10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year ended December 31, 2013

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________

Commission File No. 0-13232

Juniata Valley Financial Corp.

(Exact name of registrant as specified in its charter)

Pennsylvania	23-2235254
(State or other jurisdiction of	(IRS Employer Identification No.)
incorporation or organization)

Bridge and Main Streets, PO Box 66
Mifflintown, PA	17059-0066
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (717) 436-8211

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $1.00

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

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 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.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). . x Yes             ¨ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer x Non-accelerated filer ¨ (Do not check if a smaller reporting company) Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act)

Yes ¨ No x

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter was $73,138,453. ⁽¹⁾

There were 4,196,266 shares of the registrant’s common stock outstanding as of March 4, 2014.

(1)           The aggregate dollar amount of the voting stock set forth equals the number of shares of the Company’s Common Stock outstanding, reduced by the amount of Common Stock held by officers, directors, shareholders owning in excess of 10% of the Company’s Common Stock and the Company’s employee benefit plans multiplied by the last reported sale price for the Company’s Common Stock on June 30, 2013, the last business day of the registrant’s most recently completed second fiscal quarter. The information provided shall not be construed as an admission that any officer, director or 10% shareholder of the Company, or any employee benefit plan, may be deemed an affiliate of the Company or that such person or entity is the beneficial owner of the shares reported as being held by such person or entity, and any such inference is hereby disclaimed.

DOCUMENTS INCORPORATED BY REFERENCE

(Specific sections incorporated are identified under applicable items herein)

Certain portions of the Company’s Annual Report to Shareholders for the year ended December 31, 2013 are incorporated by reference in Parts I and II of this Report. The Company’s Annual Report to Shareholders is attached to this Report as Exhibit 13.1.

With the exception of the information incorporated by reference in Parts I and II of this Report, the Company’s Annual Report to Shareholders for the year ended December 31, 2013 is not to be deemed "filed" with the Securities and Exchange Commission for any purpose.

Certain portions of the Company’s Proxy Statement to be filed in connection with its 2014 Annual Meeting of Shareholders are incorporated by reference in Part III of this Report; provided, however, that any information in such Proxy Statement that is not required to be included in this Annual Report on Form 10-K shall not be deemed to be incorporated herein or filed for the purposes of the Securities Act of 1933 or the Securities Exchange Act of 1934.

Other documents incorporated by reference are listed in the Exhibit Index.

________________________________

PART I

ITEM 1. BUSINESS

Overview

Juniata Valley Financial Corp. (the “Company” or “Juniata”) is a Pennsylvania corporation that was formed in 1983 as a result of a plan of merger and reorganization of The Juniata Valley Bank (the “Bank”). The plan was approved by the various regulatory agencies on June 7, 1983, and Juniata, a one-bank holding company, registered under the Bank Holding Company Act of 1956. The Bank is the oldest independent commercial bank in Juniata and Mifflin Counties, having originated under a state bank charter in 1867. The Company has one reportable segment, consisting of the Bank, as described in Note 2 of Notes to Consolidated Financial Statements contained in the Company’s 2013 Annual Report to Shareholders (“2013 Annual Report”).

Nature of Operations

Juniata operates primarily in central Pennsylvania with the purpose of delivering financial services within its local market. The Company provides retail and commercial banking services through 12 offices in the following locations: five community offices in Juniata County; five community offices in Mifflin County, as well as a financial services office; one community office in each of Perry and Huntingdon Counties; and a loan production office in Centre County. The Company offers a full range of consumer and commercial banking services. Consumer banking services include: Internet banking; mobile banking; telephone banking; ten automated teller machines; personal checking accounts; club accounts; checking overdraft privileges; money market deposit accounts; savings accounts; debit cards; certificates of deposit; individual retirement accounts; secured lines of credit; construction and mortgage loans; and safe deposit boxes. Commercial banking services include: low and high-volume business checking accounts; Internet account management services; remote deposit capability; ACH origination; payroll direct deposit; commercial lines of credit; commercial letters of credit; and commercial term and demand loans. The Bank provides comprehensive trust, asset management and estate services,, and the Company has a contractual arrangement with a broker-dealer to offer a full range of financial services, including annuities, mutual funds, stock and bond brokerage services and long-term care insurance to the Bank’s customers. Management believes the Bank has a relatively stable deposit base with no major seasonal depositor or group of depositors. Most of the Company’s commercial customers are small and mid-sized businesses in central Pennsylvania.

Juniata’s loan underwriting policies are updated periodically and are presented for approval to the Board of Directors of the Bank. The purpose of the policies is to grant loans on a sound and collectible basis, to invest available funds in a safe, profitable manner, to serve the credit needs of the communities in Juniata’s primary market area and to ensure that all loan applicants receive fair and equal treatment in the lending process. It is the intent of the underwriting policies to seek to minimize loan losses by requiring careful investigation of the credit history of each applicant, verifying the source of repayment and the ability of the applicant to repay, securing those loans in which collateral is deemed to be required, exercising care in the documentation of the application, review, approval and origination process and administering a comprehensive loan collection program.

The major types of investments held by Juniata consist of obligations and securities issued by U.S. government agencies or corporations, obligations of state and local political subdivisions, mortgage-backed securities and common stock. Juniata’s investment policy directs that investments be managed in a way that provides necessary funding for the Company’s liquidity needs and adequate collateral to pledge for public funds held and, as directed by the Asset Liability Committee, manages interest rate risk. The investment policy specifies the types of permitted investments owned, addresses credit quality of investments and includes limitations by investment types and issuer.

The Company’s primary source of funds is deposits, consisting of transaction type accounts, such as demand deposits and savings accounts, and time deposits, such as certificates of deposits. The majority of deposits are held by customers residing or located in Juniata’s market area. No material portion of the deposits has been obtained from a single or small group of customers, and the Company believes that the loss of any customer’s deposits or a small group of customers’ deposits would not have a material adverse effect on the Company.

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Other sources of funds used by the Company include retail repurchase agreements, borrowings from the Federal Home Loan Bank of Pittsburgh and lines of credit established with various correspondent banks for overnight funding.

Competition

The Bank’s service area is characterized by a high level of competition for banking business among commercial banks, savings and loan associations and other financial institutions located inside and outside the Bank’s market area. The Bank actively competes with dozens of such banks and institutions for local consumer and commercial deposit accounts, loans and other types of banking business. Many competitors have substantially greater financial resources and larger branch systems than those of the Bank.

In commercial transactions, the Company believes that the Bank’s legal lending limit to a single borrower (approximately $6,688,000 as of December 31, 2013) enables it to compete effectively for the business of small and mid-sized businesses. However, this legal lending limit is considerably lower than that of various competing institutions and thus may act as a constraint on the Bank’s effectiveness in competing for financings in excess of the limit.

In consumer transactions, the Bank believes that it is able to compete on a substantially equal basis with larger financial institutions because it offers competitive interest rates on savings and time deposits and on loans.

In competing with other banks, savings and loan associations and financial institutions, the Bank seeks to provide personalized services through management’s knowledge and awareness of its service areas, customers and borrowers. In management’s opinion, larger institutions often do not provide sufficient attention to the retail depositors and the relatively small commercial borrowers that comprise the Bank’s customer base.

Other competitors, including credit unions, consumer finance companies, insurance companies and money market mutual funds, compete with certain lending and deposit services offered by the Bank. The Bank also competes with insurance companies, investment counseling firms, mutual funds and other business firms and individuals in corporate and trust investment management services.

Supervision and Regulation

General

The Company operates in a highly regulated industry, and thus may be affected by changes in state and federal regulations and legislation. As a registered bank holding company under the Bank Holding Company Act of 1956, as amended (the “Bank Holding Company Act”), the Company is subject to supervision and examination by the Board of Governors of the Federal Reserve System and is required to file with the Federal Reserve Board periodic reports and information regarding its business operations and those of the Bank. In addition, under the Pennsylvania Banking Code of 1965, the Pennsylvania Department of Banking has the authority to examine the books, records and affairs of the Company and to require any documentation deemed necessary to ensure compliance with the Pennsylvania Banking Code.

The Bank Holding Company Act requires the Company to obtain Federal Reserve Board approval before: acquiring more than five percent ownership interest in any class of the voting securities of any bank; acquiring all or substantially all of the assets of a bank; or merging or consolidating with another bank holding company. In addition, the Act prohibits a bank holding company from acquiring the assets, or more than five percent of the voting securities, of a bank located in another state, unless such acquisition is specifically authorized by the statutes of the state in which the bank is located.

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The Company is generally prohibited under the Act from engaging in, or acquiring direct or indirect ownership or control of more than five percent of the voting shares of any company engaged in, nonbanking activities unless the Federal Reserve Board, by order or regulation, has found such activities to be so closely related to banking or managing or controlling banks as to be a proper incident thereto. In making such determination, the Federal Reserve Board considers whether the performance of these activities by a bank holding company can reasonably be expected to produce benefits to the public that outweigh the possible adverse effects.

A satisfactory safety and soundness rating, particularly with regard to capital adequacy, and a satisfactory Community Reinvestment Act rating, are generally prerequisites to obtaining federal regulatory approval to make acquisitions and open branch offices. As of December 31, 2013, the Bank was rated “outstanding” under the Community Reinvestment Act and was a “well capitalized” bank. An institution’s Community Reinvestment Act rating is considered in determining whether to grant approvals relating to charters, branches and other deposit facilities, relocations, mergers, consolidations and acquisitions. Less than satisfactory performance may be the basis for denying an application.

There are various legal restrictions on the extent to which the Company and its non-bank subsidiaries can borrow or otherwise obtain credit from the Bank. In general, these restrictions require that any such extensions of credit must be secured by designated amounts of specified collateral and are limited, as to any one of the Company or such non-bank subsidiaries, to ten percent of the lending bank’s capital stock and surplus and, as to the Company and all such non-bank subsidiaries in the aggregate, to 20 percent of the Bank’s capital stock and surplus. Further, the Company and the Bank are prohibited from engaging in certain tie-in arrangements in connection with any extension of credit, lease or sale of property or furnishing of services.

As a bank chartered under the laws of Pennsylvania, the Bank is subject to the regulations and supervision of the Federal Deposit Insurance Corporation (“FDIC”) and the Pennsylvania Department of Banking and Securities. These government agencies conduct regular safety and soundness and compliance reviews that have resulted in satisfactory evaluations to date. Some of the aspects of the lending and deposit business of the Bank that are regulated by these agencies include personal lending, mortgage lending and reserve requirements.

The operations of the Bank are also subject to numerous Federal, state and local laws and regulations which set forth specific restrictions and procedural requirements with respect to interest rates on loans, the extension of credit, credit practices, the disclosure of credit terms and discrimination in credit transactions. The Bank also is subject to certain limitations on the amount of cash dividends that it can pay to the Company. See Note 16 of Notes to Consolidated Financial Statements, contained in the 2013 Annual Report, which is included in Exhibit 13 to this report and incorporated by reference in this Item 1.

Under Federal Reserve Board policy, the Company is expected to act as a source of financial strength to the Bank and Liverpool Community Bank (“LCB”), of which the Company owns 39.16%, and to commit resources to support the Bank and LCB, in circumstances where they might not be in a financial position to support themselves. Consistent with the “source of strength” policy for subsidiary banks, the Federal Reserve Board has stated that, as a matter of prudent banking, a bank holding company generally should not maintain a rate of cash dividends unless its net income available to common stockholders has been sufficient to fully fund the dividends and the prospective rate of earnings retention appears to be consistent with the Company’s capital needs, asset quality and overall financial condition.

As a public company, the Company is subject to the Securities and Exchange Commission’s rules and regulations relating to periodic reporting, proxy solicitation and insider trading.

FDIC Insurance

The FDIC is an independent federal agency that insures the deposits, up to prescribed statutory limits, of federally insured banks and savings institutions and safeguards the safety and soundness of the banking and savings industries. The FDIC previously administered two separate insurance funds, the Bank Insurance Fund (“BIF”), which generally insured commercial bank and state savings bank deposits, and the Savings Association Insurance Fund (“SAIF”), which generally insured savings association deposits.

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Under the Federal Deposit Insurance Reform Act of 2005 (the “Reform Act”), (i) the BIF and the SAIF were merged into a new combined fund, called the Deposit Insurance Fund, effective March 31, 2006, (ii) the then-current $100,000 deposit insurance coverage was indexed for inflation (with adjustments every five years, commencing January 1, 2011); and (iii) deposit insurance coverage for retirement accounts was increased to $250,000 per participant subject to adjustment for inflation. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”) permanently raised the standard maximum deposit insurance coverage amount to $250,000 and made the increase retroactive to January 1, 2008. This increase was effective immediately upon the President’s signature on July 21, 2010. The FDIC deposit insurance coverage limit applies per depositor, per insured depository institution for each account ownership category. The FDIC has been given greater latitude in setting the assessment rates for insured depository institutions which could be used to impose minimum assessments.

The FDIC is authorized to set the reserve ratios for the Deposit Insurance Fund annually at between 1.15% and 1.5% of estimated insured deposits. FDIC assessment rates currently range from 12 to 50 basis points. Institutions in the lowest risk category, Risk Category I, pay between 12 and 14 basis points. Initial base assessment rates range between 12 and 45 basis points – 12 -16 basis points for Category I. The initial base rates for risk categories II, III and IV were 20, 30 and 45 basis points, respectively. For institutions in any risk category, assessment rates rose above initial rates for institutions relying significantly on secured liabilities. Assessment rates increased for institutions with a ratio of secured liabilities (repurchase agreements, Federal Home Loan Bank advances, secured Federal Funds purchased and other secured borrowings) to domestic deposits of greater than 15%, with a maximum of 50% above the rate before such adjustment.

On February 27, 2009, the FDIC adopted an interim rule permits the Board to impose an emergency special assessment of up to 10 basis points, if necessary to maintain public confidence in federal deposit insurance. In addition, the FDIC required all insured institutions to prepay three years of assessments on December 30, 2009, which required the Company to prepay approximately $1.8 million of projected fees for 2010, 2011 and 2012. As of December 31, 2012, the Company received a refund of $547,000 from the FDIC in 2013, representing funds remaining in the prepaid account at the end of 2012.

The Dodd-Frank Act revised the statutory authorities governing the FDIC’s management of the Deposit Insurance Fund (the “DIF”). Key requirements from the Dodd-Frank Act have resulted in the FDIC’s adoption of the following proposed amendments: (1) redefined the assessment base used to calculate deposit insurance assessments to “average consolidated total assets minus average tangible equity”; (2) raised the DIF’s minimum reserve ratio to 1.35 percent and removed the upper limit on the reserve ratio; (3) revised adjustments to the assessment rates by eliminating one adjustment and adding another; and (4) revised the deposit insurance assessment rate schedules due to changes to the assessment base. Revised rate schedules and other revisions to the deposit insurance assessment rules became effective April 1, 2011. Though deposit insurance assessments maintain a risk-based approach, the FDIC’s changes effective April 1, 2011, impose a more extensive risk-based assessment system on large insured depository institutions with at least $10 billion in total assets since they are more complex in nature and could pose greater risk. Due to the changes to the assessment base and assessment rates, as well as the DIF restoration time frame, the impact on the Company’s deposit insurance assessments resulted in lower premiums in from 2011through 2013 and will likely continue in future years.

Under the Reform Act, the FDIC may terminate the insurance of an institution’s deposits upon finding that the institution has engaged in unsafe and unsound practices, is in an unsafe and unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC. The Company does not know of any practice, condition or violation that might lead to termination of its deposit insurance.

In addition, all insured institutions of the FDIC are required to pay assessments to fund interest payments on bonds issued by the Financing Corporation, an agency of the Federal government established to finance resolutions of insolvent thrifts. These assessments, the current quarterly rate of which is approximately .0154 of insured deposits, will continue until the Financing Corporation bonds mature in 2017.

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Community Reinvestment Act

Under the Community Reinvestment Act, the Bank has a continuing and affirmative obligation, consistent with its safe and sound operation, to help meet the credit needs of its entire community, including low and moderate income neighborhoods. However, the Community Reinvestment Act does not establish specific lending requirements or programs for financial institutions nor does it limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community. The Community Reinvestment Act also requires;

· the applicable regulatory agency to assess an institution’s record of meeting the credit needs of its community;

· public disclosure of an institution’s CRA rating; and

· that the applicable regulatory agency provides a written evaluation of an institution’s CRA performance utilizing a four-tiered descriptive rating system.

Capital Regulation

The Company and the Bank are subject to risk-based and leverage capital standards by which all bank holding companies and banks are evaluated in terms of capital adequacy. The risk-based capital standards relate a banking organization’s capital to the risk profile of its assets and require that bank holding companies and banks must have Tier 1 capital of at least 4% of its total risk-adjusted assets, and total capital, including Tier 1 capital, equal to at least 8% of its total risk-adjusted assets. Tier 1 capital includes common stockholders’ equity and qualifying perpetual preferred stock together with related surpluses and retained earnings. The remaining portion of this capital standard, known as Tier 2 capital, may be comprised of limited life preferred stock, qualifying subordinated debt instruments and the reserves for possible loan losses.

Additionally, banking organizations must maintain a minimum leverage ratio of 3%, measured as the ratio of Tier 1 capital to adjusted average assets. This 3% leverage ratio is a minimum for the most highly rated banking organizations without any supervisory, financial or operational weaknesses or deficiencies. Other banking organizations are expected to maintain leverage capital ratios 100 to 200 basis points above such minimum, depending upon their financial condition.

Under the Federal Deposit Insurance Corporation Improvement Act of 1991 (the "1991 Act"), a bank holding company is required to guarantee that any "undercapitalized" (as such term is defined in the statute) insured depository institution subsidiary will comply with the terms of any capital restoration plan filed by such subsidiary with its appropriate federal banking agency up to the lesser of (i) an amount equal to 5% of the institution's total assets at the time the institution became undercapitalized, or (ii) the amount which is necessary (or would have been necessary) to bring the institution into compliance with all capital standards as of the time the institution failed to comply with such capital restoration plan.

See Note 16 of Notes to Consolidated Financial Statements, contained in the 2013 Annual Report and incorporated by reference in this Item 1, for a table that provides the Company’s risk based capital ratios and leverage ratio.

Federal banking agencies have broad powers to take corrective action to resolve problems of insured depository institutions. The extent of these powers depends upon whether the institutions in question are “well capitalized,” “adequately capitalized,” “undercapitalized”, “significantly undercapitalized,” or “critically undercapitalized.” As of December 31, 2013, the Bank was a “well-capitalized” bank, as defined by the FDIC.

The FDIC has issued a rule that sets the capital level for each of the five capital categories by which banks are evaluated. A bank is deemed to be "well capitalized" if the bank has a total risk-based capital ratio of 10% or greater, has a Tier 1 risk-based capital ratio of 6% or greater, has a leverage ratio of 5% or greater, and is not subject to any order or final capital directive by the FDIC to meet and maintain a specific capital level for any capital measure. A bank may be deemed to be in a capitalization category that is lower than is indicated by its actual capital position if it received an unsatisfactory safety and soundness examination rating.

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All of the bank regulatory agencies have issued rules that amend their capital guidelines for interest rate risk and require such agencies to consider in their evaluation of a bank's capital adequacy the exposure of a bank's capital and economic value to changes in interest rates. These rules do not establish an explicit supervisory threshold. The agencies intend, at a subsequent date, to incorporate explicit minimum requirements for interest rate risk into their risk based capital standards and have proposed a supervisory model to be used together with bank internal models to gather data and hopefully propose at a later date explicit minimum requirements.

The United States is a member of the Basel Committee on Banking Supervision (“the Basel Committee”) that provides a forum for regular international cooperation on banking supervisory matters. The Basel Committee develops guidelines and supervisory standards and is best known for its international standards on capital adequacy.

In December 2010, the Basel Committee released its final framework for strengthening international capital and liquidity regulation, officially identified by the Basel Committee as “Basel III”. The federal banking regulatory agencies have proposed regulations implementing the Basel III capital standards. The Basel III proposals would change required levels of capital and how banks calculate their regulatory capital and revise and harmonize the rules for calculating risk-weighted assets to enhance risk sensitivity and address weaknesses that have been identified over the past several years. The proposals would increase the minimum levels of required capital, narrow the definition of capital, and increase the risk weights for various asset classes. In July, 2013, the Federal Reserve Board approved the final rules (the “Basel III Rules”) which substantially revise the risk-based capital requirements applicable to bank holding companies and depository institutions. The new rules, which will begin phase-in starting January 1, 2015, with final phase-in completed by January 1, 2019:

· Create a new minimum Common Equity Tier I capital ratio of 4.50% of risk-weighted assets and a minimum Tier 1 capital ratio of 6.00% of risk-weighted assets;

· Continue the current minimum Total Capital Ratio at 8.00% of risk-weighted assets and the minimum Tier 1 Leverage Capital Ratio at 4.00% of average assets;

· Institute a ”capital conservation buffer” of 2.50% above the minimum risk-based capital requirements, which, if not maintained, restricts an institution from making capital distributions and certain discretionary bonus payments;

· Revised the definition of capital such that certain non-qualifying capital instruments, including cumulative preferred stock and trust preferred securities, will be excluded as a component of Tier 1 Capital for institutions of the Company’s size; and

· Expands the risk-weightings categories and weights for assets and off balance sheet exposures to a much larger and more risk-sensitive number of categories, depending on the nature of the assets, and results in higher risk weights for a variety of asset categories.

As a result of the new capital conservation buffer rules, once in effect, if the Company’s bank subsidiary (The Juniata Valley Bank) fails to maintain the required minimum capital conservation buffer, the Company may be unable to obtain capital distributions from it, which could negatively impact the Company’s ability to pay dividends, service debt obligations or repurchase common stock. In addition, such a failure could result in a restriction on the Company’s ability to pay certain cash bonuses to executive officers, negatively impacting the Company’s ability to retain key personnel.

As of December 31, 2013, the Company believes its current capital levels would meet the fully phased-in minimum capital requirements, including capital conservation buffer, as prescribed in the U.S. Basel III Capital Rules.

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Gramm-Leach-Bliley Act

On November 12, 1999, the Gramm-Leach-Bliley Act (“GLB”) was signed into law. GLB permits commercial banks to affiliate with investment banks. It also permits bank holding companies which elect financial holding company status to engage in any type of financial activity, including securities, insurance, merchant banking/equity investment and other activities that are financial in nature. The Company has not elected financial holding company status. The merchant banking provisions allow a bank holding company to make a controlling investment in any kind of company, financial or commercial. These new powers allow a bank to engage in virtually every type of activity currently recognized as financial or incidental or complementary to a financial activity. A commercial bank that wishes to engage in these activities is required to be well capitalized, well managed and to have a satisfactory or better Community Reinvestment Act rating. GLB also allows subsidiaries of banks to engage in a broad range of financial activities that are not permitted for banks themselves. Although the Company and the Bank have not commenced these types of activities to date, GLB enables them to evaluate new financial activities that would complement the products already offered to enhance non-interest income.  

Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act of 2002 implemented a broad range of corporate governance, accounting and reporting measures for companies, like Juniata, that have securities registered under the Securities Exchange Act of 1934. Specifically, the Sarbanes-Oxley Act and the various regulations promulgated under the Act, established, among other things: (i) new requirements for audit committees, including independence, expertise, and responsibilities; (ii) additional responsibilities relating to financial statements for the Chief Executive Officer and Chief Financial Officer of reporting companies; (iii) new standards for auditors and regulation of audits, including independence provisions that restrict non-audit services that accountants may provide to their audit clients; (iv) increased disclosure and reporting obligations for reporting companies and their directors and executive officers, including accelerated reporting of stock transactions and a prohibition on trading during pension blackout periods; and (v) a range of new and increased civil and criminal penalties for fraud and other violations of the securities laws. In addition, Sarbanes-Oxley required stock exchanges, such as NASDAQ, to institute additional requirements relating to corporate governance in their listing rules. 

Section 404 of the Sarbanes-Oxley Act requires the Company to include in its Annual Report on Form 10-K a report by management and an attestation report by the Company’s independent registered public accounting firm on the adequacy of the Company’s internal control over financial reporting. Management’s internal control report must, among other things, set forth management’s assessment of the effectiveness of the Company’s internal control over financial reporting.

Financial Privacy

Federal banking regulators have adopted rules that limit the ability of banks and other financial institutions to disclose non-public information about consumers to nonaffiliated third parties. These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a nonaffiliated third party. The privacy provisions of the GLB Act affect the Company by limiting how consumer information is transmitted through diversified financial companies and conveyed to outside vendors.

Anti-Money Laundering Initiatives and the USA Patriot Act

A major focus of governmental policy on financial institutions in recent years has been aimed at combating money laundering and terrorist financing. The USA Patriot Act of 2001 (“USA Patriot Act”) substantially broadened the scope of U.S. anti-money laundering laws and regulations by imposing significant new compliance and due diligence obligations, creating new crimes and penalties and expanding the extra-territorial jurisdiction of the U.S. The United States Treasury has issued a number of regulations that apply various requirements of the USA Patriot Act to financial institutions. These regulations require financial institutions to maintain appropriate policies, procedures and controls to detect, prevent and report money laundering and terrorist financing and to verify the identity of their customers. Failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing, or to comply with all of the relevant laws or regulations, could have serious legal and reputational consequences for the institution.

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Office of Foreign Assets Control Regulation

The U.S. has instituted economic sanctions which affect transactions with designated foreign countries, nationals and others. These are typically known as the “OFAC rules” because they are administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”). The OFAC-administered sanctions target countries in various ways. Generally, however, they contain one or more of the following elements: (i) restrictions on trade with or investment in a sanctioned country, including prohibitions against direct or indirect imports from and exports to a sanctioned country, and prohibitions on “U.S. persons” engaging in financial transactions which relate to investments in, or providing investment-related advice or assistance to, a sanctioned country; and (ii) a blocking of assets in which the government or specially designated nationals of the sanctioned country have an interest, by prohibiting transfers of property subject to U.S. jurisdiction (including property in the possession or control of U.S. persons). Blocked assets (e.g., property and bank deposits) cannot be paid out, withdrawn, set off or transferred in any manner without a license from OFAC. Failure to comply with these sanctions could have serious legal and reputational consequences for the institution. 

Consumer Protection Statutes and Regulations

The Company is subject to many federal consumer protection statutes and regulations including the Truth in Lending Act, Truth in Savings Act, Equal Credit Opportunity Act, Fair Housing Act, Real Estate Settlement Procedures Act and Home Mortgage Disclosure Act. Among other things, these acts:

· require banks to disclose credit terms in meaningful and consistent ways;

· prohibit discrimination against an applicant in any consumer or business credit transaction;

· prohibit discrimination in housing-related lending activities;

· require banks to collect and report applicant and borrower data regarding loans for home purchases or improvement projects;

· require lenders to provide borrowers with information regarding the nature and cost of real estate settlements;

· prohibit certain lending practices and limit escrow account amounts with respect to real estate transactions; and

· prescribe possible penalties for violations of the requirements of consumer protection statutes and regulations.

On November 17, 2009, the Federal Reserve Board (“FRB”) published a final rule amending Regulation E, which implements the Electronic Fund Transfer Act. The final rule limits the ability of a financial institution to assess an overdraft fee for paying automated teller machine transactions and one-time debit card transactions that overdraw a customer’s account, unless the customer affirmatively consents, or opts in, to the institution’s payment of overdrafts for these transactions.

Dodd-Frank Act

The Dodd-Frank Act was enacted in July 2010 and resulted in significant financial regulatory reform. The Dodd-Frank Act also changed the responsibilities of the current federal banking regulators. Among other things, the Dodd-Frank Act created the Financial Oversight Council, with oversight authority for monitoring and regulating systemic risk, and the Consumer Financial Protection Bureau (CFPB), which has broad regulatory and enforcement powers over consumer financial products and services. Effective July 21, 2011, the CFPB became responsible for administering and enforcing numerous federal consumer financial laws enumerated in the Dodd-Frank Act. The Dodd Frank Act also provided that, for banks with total assets of more than $10 billion, the CFPB would have exclusive or primary authority to examine those banks for, and enforce compliance with, the federal consumer financial laws.

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The scope of the Dodd-Frank Act impacts many aspects of the financial services industry, and it requires the development and adoption of numerous regulations, some of which have not yet been issued. The effects of the Dodd-Frank Act on the financial services industry will depend, in large part, upon the extent to which regulators exercise the authority granted to them under the Dodd-Frank Act and the approaches taken in implementing those regulations. Additional uncertainty regarding the effects of the Dodd-Frank Act exists due to court decisions and the potential for additional legislative changes to the Dodd-Frank Act.

The Dodd-Frank Act's provisions that have received the most public attention have generally been those which apply only to larger institutions with total consolidated assets of $50 billion or more. However, the Dodd-Frank Act contains numerous other provisions that affect all bank holding companies, including the Company.

The following is a list of significant provisions of the Dodd-Frank Act, and, if applicable, the resulting regulatory rules adopted, that apply (or will apply), most directly to the Company and its subsidiary:

· Federal deposit insurance - On April 1, 2011, the FDIC's revised deposit insurance assessment base changed from total domestic deposits to average total assets, minus average tangible equity. In addition, the Dodd-Frank Act created a two scorecard system, one for large depository institutions that have more than $10 billion in assets and another for highly complex institutions that have over $50 billion in assets.

· Debit card interchange fees - In June 2011, the FRB adopted regulations, which became effective on October 1, 2011, setting maximum permissible interchange fees issuers can receive or charge on electronic debit card transaction fees and network exclusivity arrangements (the "Current Rule"). Recently, there has been litigation regarding certain provisions of the Current Rule, including the level of the maximum permissible debit card interchange fees. The final outcome of such litigation, any future litigation, or any further rulemaking by the FRB, may result in a reduction in the Current Rule's maximum permissible debit card interchange fees, thereby potentially reducing the Company’s debit card income in future periods.

· Interest on demand deposits - Beginning in July 2011, depository institutions were no longer prohibited from paying interest on business transaction and other accounts.

· Stress testing - In October 2012, the FRB issued final rules regarding company-run stress testing. In accordance with these rules, the Company is required to conduct an annual stress test in the manner specified, and using assumptions for baseline, adverse and severely adverse scenarios announced by the FRB. The stress test is designed to assess the potential impact of the various scenarios on the Company’s earnings, capital levels and capital ratios over at least a nine-quarter time horizon. The Company's board of directors and its senior management will be required to consider the results of the stress test in the normal course of business, including as part of its capital planning process and the evaluation of the adequacy of its capital. As required, the Company will use data as of September 30, 2013 to conduct the stress test, using scenarios that were released by the FRB in November 2013. Stress test results must be reported to the Federal Reserve Bank in March 2014. Public disclosure of summary stress test results under the severely adverse scenario will begin in June 2015 for stress tests commencing in the fall of 2014. While the Company believes that both the quality and magnitude of its capital base are sufficient to support its current operations given its risk profile, the results of the stress testing process may lead the Company to retain additional capital or alter the mix of its capital components.

Under similar rules adopted by the OCC, national banks and federal savings associations with total consolidated assets of more than $10 billion are also required to conduct annual stress tests., Although the total consolidated assets of the Company are less than $10 billion, if its assets exceed $10 billion in the future, it will become subject to the OCC's stress test rules.

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· Ability-to-pay rules and qualified mortgages - As required by the Dodd-Frank Act, the CFPB issued a series of final rules in January 2013 amending Regulation Z, implementing the Truth in Lending Act, by requiring mortgage lenders to make a reasonable and good faith determination, based on verified and documented information, that a consumer applying for a residential mortgage loan has a reasonable ability to repay the loan according to its terms. These final rules, most of which became effective January 10, 2014, prohibit creditors, such as the Company from extending residential mortgage loans without regard for the consumer's ability to repay and add restrictions and requirements to residential mortgage origination and servicing practices. In addition, these rules restrict the imposition of prepayment penalties and compensation practices relating to residential mortgage loan origination. Mortgage lenders are required to determine consumers' ability to repay in one of two ways. The first alternative requires the mortgage lender to consider eight underwriting factors when making the credit decision. Alternatively, the mortgage lender can originate "qualified mortgages," which are entitled to a presumption that the creditor making the loan satisfied the ability-to-repay requirements. In general, a "qualified mortgage" is a residential mortgage loan that does not have certain high risk features, such as negative amortization, interest-only payments, balloon payments, or a term exceeding 30 years. In addition, to be a qualified mortgage, the points and fees paid by a consumer cannot exceed 3% of the total loan amount and the borrower's total debt-to-income ratio must be no higher than 43% (subject to certain limited exceptions for loans eligible for purchase, guarantee or insurance by a government sponsored entity or a federal agency).

Compliance with these rules has increased Juniata's overall regulatory compliance costs and required changes to the underwriting practices of the Company's with respect to mortgage loans.

· Volcker Rule — As mandated by the Dodd-Frank Act, in December 2013, the OCC, FRB, FDIC, SEC and Commodity Futures Trading Commission issued a final rule (the "Final Rules") implementing certain prohibitions and restrictions on the ability of a banking entity and non-bank financial company supervised by the FRB to engage in proprietary trading and have certain ownership interests in, or relationships with, a "covered fund" (the so-called "Volcker Rule"). The Final Rules generally treat as a covered fund any entity that would be an investment company under the Investment Company Act of 1940 (the "1940 Act") but for the application of the exemptions from SEC registration set forth in Section 3(c)(1) (fewer than l00 beneficial owners) or Section 3(c)(7) (qualified purchasers) of the 1940 Act. The Final Rules also require regulated entities to establish an internal compliance program that is consistent with the extent to which it engages in activities covered by the Volcker Rule, which must include making regular reports about those activities to regulators. Although the Final Rules provide some tiering of compliance and reporting obligations based on size, the fundamental prohibitions of the Volcker Rule apply to banking entities of any size, including the Company. Banking entities have until July 21, 2015 to conform their activities and investments to the requirements of the Final Rules. .

While the Company does not engage in proprietary trading or in any other activities prohibited by the Final Rules, the Company will continue to evaluate whether any of its investments that fall within the definition of a "covered fund" and would need to be disposed of by July 21, 2015. However, based on the Company's evaluation to date, it does not currently expect that the Final Rules will have a material effect on its business, financial condition or results of operations.

· Incentive compensation — As required by the Dodd-Frank Act, a joint interagency proposed regulation was issued in April 2011. The proposed rule would require the reporting of incentive-based compensation arrangements by a covered financial institution and prohibit incentive-based compensation arrangements at a covered financial institution that provides excessive compensation or that could expose the institution to inappropriate risks that could lead to material financial loss. The proposed rule, if adopted as currently proposed, could limit the manner in which the Company structures incentive compensation for its executives.

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National Monetary Policy

In addition to being affected by general economic conditions, the earnings and growth of the Bank and, therefore, the earnings and growth of the Company are affected by the policies of regulatory authorities, including the Federal Reserve and the FDIC. An important function of the Federal Reserve is to regulate the money supply and credit conditions. Among the instruments used to implement these objectives are open market operations in U.S. government securities, setting the discount rate and changes in financial institution reserve requirements. These instruments are used in varying combinations to influence overall growth and distribution of credit, bank loans, investments and deposits, and their use may also affect interest rates charged on loans or paid on deposits.

The monetary policies and regulations of the Federal Reserve have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future. The effects of such policies upon the future businesses, earnings and growth of the Company cannot be predicted with certainty.

Employees

As of December 31, 2013, the Company had a total of 109 full-time and 42 part-time employees.

Additional Information

The Company files annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy any reports, statements and other information we file at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operations of the Public Reference Room. Our SEC filings are also available on the SEC’s Internet site (http://www.sec.gov).

The Company’s common stock is quoted under the symbol “JUVF” on the OTC Bulletin Board, an automated quotation service, made available through, and governed by, the NASDAQ system. You may also read reports, proxy statements and other information we file at the offices of the National Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, DC 20006.

The Company’s Internet address is www.JVBonline.com. At that address, we make available, free of charge, the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act (see “Investor Information” section of website), as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

In addition, we will provide, at no cost, paper or electronic copies of our reports and other filings made with the SEC (except for exhibits). Requests should be directed to JoAnn N. McMinn, Chief Financial Officer, Juniata Valley Financial Corp., PO Box 66, Mifflintown, PA 17059, 717-436-8211.

The information on the websites listed above is not and should not be considered to be part of this annual report on Form 10-K and is not incorporated by reference in this document.

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ITEM 1A. RISK FACTORS

In analyzing whether to make or to continue an investment in the Company, investors should consider, among other factors, the following:

Difficult economic conditions and real estate markets, including protracted periods of low-growth and sluggish loan demand, can negatively impact the Company’s income, and result in higher charge-offs as borrower’s ability to repay is negatively impacted by those conditions.

Lending money is an essential part of the banking business, and the revenues derived from lending activities are the most significant segment of the Company’s income statement. Extended periods of sluggish loan demand can materially affect the composition of the Company’s consolidated statement of financial condition, reducing the ratio of loans to deposits, reducing the Company’s profitability. Adverse changes in the economy and real estate markets and the duration of economic downturns can negatively affect the solvency of businesses and consumers. Borrowers’ inability to repay loans causes increases in non-performing assets, which may result in elevated collection and carrying costs related to such non-performing assets and increases in loan charge-offs, significantly impacting the loan loss provision charged to earnings to fund the allowance for loan losses. The risk of non-payment is affected by credit risks of the borrower, changes in economic and industry conditions, the duration of the loan and, in the case of a collateralized loan, uncertainties as to the future value of the collateral supporting the loan. Historically, commercial loans have presented a greater risk of non-payment than consumer loans, but recent declines in home values and rising unemployment rates affecting consumers’ continuing financial stability have increased the risk for higher charge-offs of residential real estate loans. The application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount that can be recovered on these loans.

The Company has established an allowance for loan losses that management believes to be adequate to offset probable losses on the Company’s existing loans. However, there is no precise method of estimating loan losses. There can be no assurance that any future declines in real estate market conditions, general economic conditions or changes in regulatory policies will not require the Company to increase its allowance for loan losses, through additional loan loss provisions, which could reduce earnings.

Fluctuations in market interest rates, particularly in a continuing period of low market interest rates, and relative balances of rate-sensitive assets to rate-sensitive liabilities, can negatively impact net interest margin and net interest income.

The operations of financial institutions such as the Company are dependent to a large degree on net interest income, which is the difference between interest income from loans and investments and interest expense on deposits and borrowings. An institution's net interest income is significantly affected by market rates of interest that in turn are affected by prevailing economic conditions, by the fiscal and monetary policies of the federal government and by the policies of various regulatory agencies. The FRB regulates the national money supply in order to manage recessionary and inflationary pressures. In doing so, the FRB may use techniques such as engaging in open market transactions of U.S. Government securities, changing the discount rate and changing reserve requirements against bank deposits. The use of these techniques may also affect interest rates charged on loans and paid on deposits. The interest rate environment, which includes both the level of interest rates and the shape of the U.S. Treasury yield curve, has a significant impact on net interest income. See the section entitled “Market / Interest Rate Risk” and Table 5 – “Maturity Distribution” in Management’s Discussion and Analysis of Financial Condition in the 2013 Annual Report, incorporated by reference in this Item 1A for a discussion of the effects on net interest income over a twelve month period beginning on December 31, 2013 of simulated interest rate changes. Like all financial institutions, the Company's consolidated statement of financial condition is affected by fluctuations in interest rates. Volatility in interest rates can also result in disintermediation, which is the flow of deposits away from financial institutions into direct investments, such as US Government and corporate securities and other investment vehicles, including mutual funds, which, because of the absence of federal insurance premiums and reserve requirements, generally pay higher rates of return than bank deposit products. See "Item 7: Management's Discussion of Financial Condition and Results of Operations” and “Item 7A: Quantitative and Qualitative Disclosure about Market Risk”.

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The increasing time and expense associated with regulatory compliance and risk management could negatively impact our results of operations.

The time, expense, internal and external resources associated with regulatory compliance continue to increase. Thus, balancing the need to address regulatory changes and effectively manage growth in non-interest expenses has become more challenging than it has been in the past.

The Company’s subsidiary Bank is a depository institution whose deposits are insured by the FDIC. The Company and the Bank are extensively regulated under federal and state banking laws and regulations that are intended primarily for the protection of depositors, federal deposit insurance funds and the banking system as a whole. In general, these laws and regulations establish: the eligible business activities for the Company; certain acquisition and merger restrictions; limitations on intercompany transactions such as loans and dividends; capital adequacy requirements; requirements for anti-money laundering programs; consumer lending and other compliance matters. While these statutes and regulations are generally designed to minimize potential loss to depositors and the FDIC insurance funds, they do not eliminate risk, and compliance with such statutes and regulations increases the Company’s expense, requires management’s attention and can be a disadvantage from a competitive standpoint with respect to non-regulated competitors and larger bank competitors.

Compliance with banking statutes and regulations is important to the Company's ability to engage in new activities and to consummate additional acquisitions. Bank regulators are scrutinizing banks through longer and more extensive bank examinations in both the safety and soundness and compliance areas. The results of such examinations could result in a delay in receiving required regulatory approvals for potential new activities and transactional matters. In the event that the Company's compliance record would be determined to be unsatisfactory, such approvals may not be able to be obtained. Federal and state banking regulators also possess broad powers to take supervisory actions, as they deem appropriate. These supervisory actions may result in higher capital requirements, higher deposit insurance premiums and limitations on the Company's operations that could have a material adverse effect on its business and profitability.

The federal government, the FRB and other governmental and regulatory bodies have taken, and may in the future take other actions, in response to the stress on the financial system. For example, the FRB recently announced its intention to maintain short-term interest rates near zero at least until certain unemployment and inflation targets are reached, which the FRB currently believes will not occur until at least mid-2015. Such actions, although intended to aid the financial markets, and continued volatility in the markets, could materially and adversely affect the Company's business, financial condition and results of operations, or the trading price of the Company's common stock.

In addition, the Company is subject to changes in federal and state tax laws as well as changes in banking and credit regulations, accounting principles, governmental economic and monetary policies and collection efforts by taxing authorities.

Financial reform legislation is likely to have a significant impact on the Company’s business and results of operations; however, until more implementing regulations are adopted, the extent to which the legislation will impact the Company is uncertain.

In July, 2010, the President of the United States signed into law the Dodd-Frank Act. Among other things, the Dodd-Frank Act created the Financial Stability Oversight Council, with oversight authority for monitoring and regulating systemic risk, and the CFPB, which has broad regulatory and enforcement powers over consumer financial products and services. The Dodd-Frank Act also changed the responsibilities of the current federal banking regulators, imposed additional corporate governance and disclosure requirements in areas such as executive compensation and proxy access, and private equity activities of banks.

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The scope of the Dodd-Frank Act impacted many aspects of the financial services industry, and it requires the development and adoption of many regulations, a significant number of which have not yet been adopted or fully implemented. The effects of the Dodd-Frank Act on the financial services industry will depend, in large part, upon the extent to which regulators exercise the authority granted to them under the Dodd-Frank Act and the approaches taken in implementing regulations. Additional uncertainty regarding the effect of the Dodd-Frank Act exists due to court decisions and the potential for additional legislative changes to the Dodd-Frank Act. The Company, as well as the broader financial services industry, is continuing to assess the potential impact of the Dodd-Frank Act (and its possible impact on customers' behaviors) on its business and operations but, at this stage, the extent of the impact cannot be fully determined with any degree of certainty. However, the Company has been impacted, and will likely continue to be in the future, by the so-called Durbin Amendment to the Dodd-Frank Act, which reduced debit card interchange revenue of banks and revised deposit insurance assessments. It also is likely to be impacted by the Dodd-Frank Act in the areas of corporate governance, capital requirements, risk management, stress testing and regulation under consumer protection laws.

Pursuant to the Dodd-Frank Act, the CFPB was given rulemaking authority over most providers of consumer financial services in the U.S., examination and enforcement authority over the consumer operations of large banks, as well as interpretive authority with respect to numerous existing consumer financial services regulations. The CFPB began exercising these oversight authorities over the largest banks during 2011. Because this is an entirely new agency, the impact on the Company, including its retail banking and mortgage businesses, is largely uncertain. However, any new regulatory requirements, or modified interpretations of existing regulations, will affect the Company’s consumer business practices and operations, potentially resulting in increased compliance costs. Furthermore, the CFPB represents an additional source of potential enforcement or litigation against the Company and, as an entirely new agency with a focus on consumer protection, the CFPB may have new or different enforcement or litigation strategies than those typically utilized by other regulatory agencies. Such actions could further increase the Company’s costs.

The delay in the implementation of many of the regulations mandated by the Dodd-Frank Act has resulted in a lack of clear regulatory guidance to banks. The resulting uncertainty has caused banks to take a cautious approach to business initiatives and planning.

Capital and liquidity strategies, including the expected impact of the capital and liquidity requirements proposed by the Basel III standards, may require the Company to maintain higher levels of capital, which could restrict the Company’s other activities.

In July, 2013, the FRB approved the final rules implementing the Basel III capital standards (the “Basel III Rules”) which substantially revise the risk-based capital requirements applicable to bank holding companies and depository institutions. The new rules, which will begin phase-in starting January 1, 2015, with final phase-in completed by January 1, 2019:

· Create a new minimum Common Equity Tier I capital ratio of 4.50% of risk-weighted assets and a minimum Tier 1 capital ratio of 6.00% of risk-weighted assets;

· Continue the current minimum Total Capital Ratio at 8.00% of risk-weighted assets and the minimum Tier 1 Leverage Capital Ratio at 4.00% of average assets;

· Institute a ”capital conservation buffer” of 2.50% above the minimum risk-based capital requirements, which, if not maintained, restricts an institution from making capital distributions and certain discretionary bonus payments;

· Revised the definition of capital such that certain non-qualifying capital instruments, including cumulative preferred stock and trust preferred securities, will be excluded as a component of Tier 1 Capital for institutions of the Company’s size; and

· Expands the risk-weightings categories and weights for assets and off balance sheet exposures to a much larger and more risk-sensitive number of categories, depending on the nature of the assets, and results in higher risk weights for a variety of asset categories.

As a result of the new capital conservation buffer rules, once in effect, if the Company’s bank subsidiary (The Juniata Valley Bank) fails to maintain the required minimum capital conservation buffer, the Company may be unable to obtain capital distributions from it, which could negatively impact the Company’s ability to pay dividends, service debt obligations or repurchase common stock. In addition, such a failure could result in a restriction on the Company’s ability to pay certain cash bonuses to executive officers, negatively impacting the Company’s ability to retain key personnel.

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As of December 31, 2013, the Company believes its current capital levels would meet the fully phased-in minimum capital requirements, including capital conservation buffer, as prescribed in the U.S. Basel III Capital Rules.

Additionally, the Basel III framework requires banks and bank holding companies to measure their liquidity against specific liquidity tests, including a liquidity coverage ratio (“LCR”), which is designed to ensure that the banking entity maintains a level of unencumbered high-quality liquid assets greater than or equal to the entity’s expected net cash outflow for a 30-day time horizon under an acute liquidity stress scenario, and a net stable funding ratio (“NSFR”) designed to promote more medium and long-term funding based on the liquidity characteristics of the assets and activities of banking entities over a one-year time horizon. The LCR and NSFR have proposed adoption dates beginning in 2015 and 2018, respectively.

Competition on rates of deposit and for loan growth may negatively impact the Company’s net interest margin.

There is significant competition among banks in the market areas served by the Company. In addition, as a result of deregulation of the financial industry, the Bank also competes with other providers of financial services such as savings and loan associations, credit unions, consumer finance companies, securities firms, insurance companies, the mutual funds industry, full service brokerage firms and discount brokerage firms, some of which are subject to less extensive regulations than the Company with respect to the products and services they provide. Some of the Company’s competitors have greater resources than the Company and, as a result, may have higher lending limits and may offer other services not offered by our Company. See "Item 1: Business - Competition." Competition may adversely affect the rates the Company pays on deposits and charges on loans, thereby potentially adversely affect the Company’s profitability. The Company’s profitability depends upon its continued ability to successfully compete in the markets it serves. Further, intense competition among lenders is contributing to downward pressure on loan yields.

Cyber security incidents could disrupt business operations, result in the loss of critical and confidential information, and adversely impact our reputation and results of operations.

Global cyber security threats can range from uncoordinated individual attempts to gain unauthorized access to our information technology (IT) systems to sophisticated and targeted measures known as advanced persistent threats. Cyber security incidents, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption or unavailability of critical data and confidential or proprietary information (our own or that of third parties) and the disruption of business operations. The potential consequences of a material cyber security incident include reputational damage, litigation with third parties, and increased cyber security protection and remediation costs, which in turn could adversely affect our competitiveness and results of operations.

Potential disruption or failure of network and information processing systems and those of third-party vendors may negatively impact our operations.

The Company's business activities are dependent on its ability to accurately and timely process, record and monitor a large number of transactions. If any of its financial, accounting, network or other information processing systems fail or have other significant shortcomings, the Company could be materially adversely affected. Third parties with which the Company does business could be sources of operational risk to the Company, including the risk that the third parties' own network and information processing systems could fail. Any of these occurrences could materially diminish the Company's ability to operate one or more of the Company's businesses, or result in potential liability to clients, reputational damage and regulatory intervention, any of which could materially adversely affect the Company.

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The Company may be subject to disruptions or failures of the Company's financial, accounting, network and information processing systems arising from events that are wholly or partially beyond the Company's control, which may include, for example, computer viruses or electrical or telecommunications outages, denial of service attacks or hacking targeting the Company's network or information processing systems or the Company's websites, natural disasters, disease pandemics or other damage to property or physical assets or terrorist acts. The Company has developed an emergency recovery program, which includes plans to maintain or resume operations in the event of an emergency, such as a power outage or disease pandemic, and contingency plans in the event that operations or systems cannot be resumed or restored. The emergency recovery program is periodically reviewed and updated, and components of the emergency recovery program are periodically tested and validated. The Company also reviews and evaluates the emergency recovery programs of vendors which provide certain third-party systems that the Company considers critical. Nevertheless, disruptions or failures affecting any of these systems may give rise to interruption in service to customers, damage to the Company's reputation and loss or liability to the Company.

Investment securities losses, including other-than-temporary declines in the value of securities which may result in charges to earnings, could negatively impact our results of operations.

Price fluctuations in securities markets, as well as other market events, could have an impact on the Company’s results of operations. As described below, the Company’s holding of certain securities and the revenues the Company earns from its trust and investment management services business are particularly sensitive to those events:

Equity investments:

As of December 31, 2013, the Company’s equity investments were comprised of publicly traded financial institutions. The value of the securities in the Company’s equity portfolio may be affected by a number of factors. General economic conditions and uncertainty surrounding the financial institution sector as a whole has impacted the value of these securities. Declines in bank stock values in general, as well as deterioration in the performance of specific banks, could result in other-than-temporary impairment charges. Considerations used to determine other-than-temporary impairment status to individual holdings include the length of time the stock has remained in an unrealized loss position, and the percentage of unrealized loss compared to the carrying cost of the stock, dividend reduction or suspension, market analyst reviews and expectations, and other pertinent news that would affect expectations for recovery or further decline.

Municipal securities:

As of December 31, 2013 the Company had approximately $42 million of municipal securities issued by various municipalities in its investment portfolio. Ongoing uncertainty with respect to the financial viability of municipal insurers places greater emphasis on the underlying strength of issuers. Increasing pressure on local tax revenues of issuers due to adverse economic conditions could also have a negative impact on the underlying credit quality of issuers.

Investment management and trust services revenue:

The Company’s investment management and trust services revenue is also impacted by fluctuations in the securities markets. A portion of this revenue is based on the value of the underlying investment portfolios. If the values of those investment portfolios decrease, whether due to factors influencing U.S. securities markets, in general or otherwise, the Company’s revenue could be negatively impacted. In addition, the Company’s ability to sell its brokerage services is dependent, in part, upon consumers’ level of confidence in securities markets.

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"Anti-takeover" provisions may keep shareholders from receiving a premium for their shares.

The Articles of Incorporation of the Company presently contain certain provisions, such as a staggered Board of Directors, which may be deemed to be "anti-takeover" in nature in that such provisions may deter, discourage or make more difficult the assumption of control of the Company by another Company or person through a tender offer, merger, proxy contest or similar transaction or series of transactions. In addition, provisions of Pennsylvania and applicable banking laws could similarly make it more difficult for a third party to acquire control of the Company. The overall effects of the "anti-takeover” provisions may be to discourage, make more costly or more difficult, or prevent a future takeover offer, thereby preventing shareholders from receiving a premium for their securities in a takeover offer. These provisions may also increase the possibility that a future bidder for control of the Company will be required to act through arms-length negotiation with the Company’s Board of Directors. Copies of the Articles of Incorporation of the Company are on file with the Securities and Exchange Commission and the Pennsylvania Secretary of State.

If the Company fails to maintain an effective system of internal controls, it may not be able to accurately report its financial results or prevent fraud. As a result, current and potential shareholders could lose confidence in the Company’s financial reporting, which could harm its business and the trading price of its common stock.

The Company has established a process to document and evaluate its internal controls over financial reporting in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the related regulations, which require annual management assessments of the effectiveness of the Company’s internal controls over financial reporting and a report by the Company’s independent registered public accounting firm on the effectiveness of the Company’s internal control. In this regard, management has dedicated internal resources, engaged outside consultants and adopted a detailed work plan to (i) assess and document the adequacy of internal controls over financial reporting, (ii) take steps to improve control processes, where appropriate, (iii) validate through testing that controls are functioning as documented and (iv) implement a continuous reporting and improvement process for internal control over financial reporting. The Company’s efforts to comply with Section 404 of the Sarbanes-Oxley Act of 2002 and the related regulations regarding the Company’s assessment of its internal controls over financial reporting and the Company’s independent registered public accounting firm audit of internal control are likely to continue to result in increased expenses. The Company’s management and audit committee have given the Company’s compliance with Section 404 a high priority. The Company cannot be certain that these measures will ensure that the Company implements and maintains adequate controls over its financial processes and reporting in the future. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm the Company’s operating results or cause the Company to fail to meet its reporting obligations. If the Company fails to correct any issues in the design or operating effectiveness of internal controls over financial reporting or fails to prevent fraud, current and potential shareholders could lose confidence in the Company’s financial reporting, which could harm its business and the trading price of its common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

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ITEM 2. PROPERTIES

The physical properties of the Company are all owned or leased by the Bank.

The Bank owns and operates for banking purposes, the buildings located at:

1 South Main Street, Mifflintown, Pennsylvania

218 Bridge Street, Mifflintown, Pennsylvania (its corporate headquarters)

1762 Butcher Shop Road, Mifflintown, Pennsylvania (operations center and Trust offices)

301 Market Street, Port Royal, Pennsylvania (branch office)

30580 Rt. 35, McAlisterville, Pennsylvania (branch office)

Four North Market Street, Millerstown, Pennsylvania (branch office)

17428 Tuscarora Creek Road, Blairs Mills, Pennsylvania (branch office)

One East Market Street, Lewistown, Pennsylvania (branch office)

20 Prince Street, Reedsville, Pennsylvania (branch office)

100 West Water Street, Lewistown, Pennsylvania (branch office)

320 South Logan Boulevard, Burnham, Pennsylvania (branch office)

571 Main Street, Richfield, Pennsylvania (branch office)

The Bank leases four offices:

Branch Offices –

5294 West River Road, Mifflintown, Pennsylvania (lease expires December 31, 2017)

Wal-Mart Supercenter, Route 522 South, Lewistown, Pennsylvania (lease expires November 2016)

Financial Services Office –

129 South Main Street, Suite 600, Lewistown, Pennsylvania (lease expires November 2014)

Loan Production Office –

1366 South Atherton Street, State College, Pennsylvania (lease expires November 2014)

ITEM 3. LEGAL PROCEEDINGS

The nature of the Company’s and Bank’s business, at times, generates litigation involving matters arising in the ordinary course of business. However, in the opinion of management, there are no proceedings pending to which the Company or the Bank is a party or to which its property is subject, which, if adversely determined, would be material in relation to their financial condition. In addition, no material proceedings are pending or are known to be threatened or contemplated against the Company by government authorities or others.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information:

Information regarding the market for the Company’s stock, the market price of the stock and dividends that the Company has paid is included in the Company’s Annual Report to Shareholders for the year ended December 31, 2013, in the section entitled “Common Stock Market Prices and Dividends,” and is incorporated by reference in this Item 5.

Holders:

As of March 4, 2014, there were 1,760 registered holders of the Company’s outstanding common stock.

For information concerning the Company’s Equity Compensation Plans, see “Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters”.

Recent Sales of Unregistered Securities:

None

Purchases of Equity Securities by the Issuer and Affiliated Purchasers:

The Company periodically repurchases shares of its common stock under the share repurchase program approved by the Board of Directors. In September of 2008, the Board of Directors authorized the repurchase of 200,000 shares of its common stock through its Share Repurchase Program. The Program will remain authorized until all approved shares are repurchased, unless terminated by the Board of Directors.

					Total Number of
					Shares Purchased as		Maximum Number of
	Total Number		Average		Part of Publicly		Shares that May Yet Be
	of Shares		Price Paid		Announced Plans or		Purchased Under the
Period	Purchased		per Share		Programs		Plans or Programs
October 1-31, 2013		-	$	-		-		43,775
November 1-30, 2013		300		17.15		300		43,475
December 1-31, 2013		-		-		-		43,475
Totals		300	$	17.15		300		43,475

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Performance Graph:

The following graph shows the yearly percentage change in the Company’s cumulative total shareholder return on its common stock from December 31, 2008 to December 31, 2013 compared with the Russell 3000 Index and a peer group index (the “JUVF Peer Group Index”), consisting of seven bank holding companies that operate within our immediate market area. The bank holding companies included in the JUVF Peer Group Index are First Community Financial Corporation, F.N.B. Corporation, Kish Bancorp, Inc., Mifflinburg Bank & Trust Company, Mid Penn Bancorp, Inc., Northumberland Bancorp and Orrstown Financial Services, Inc.

	Period Ending
Index	12/31/08		12/31/09		12/31/10		12/31/11		12/31/12		12/31/13
Juniata Valley Financial Corp.		100.00		96.39		98.15		110.37		116.23		118.74
Russell 3000		100.00		128.34		150.07		151.61		176.49		235.71
JUVF Peer Group Index*		100.00		67.48		88.83		96.22		96.59		120.72

22

ITEM 6. SELECTED FINANCIAL DATA

The section entitled “Five Year Financial Summary - Selected Financial Data” in the Company’s Annual Report to Shareholders for the year ended December 31, 2013 is incorporated by reference in this Item 6.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The section entitled “Management’s Discussion and Analysis of Financial Condition” and “Results of Operations” in the Company’s Annual Report to Shareholders for the year ended December 31, 2013 is incorporated by reference in this Item 7.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The section entitled “Management’s Discussion and Analysis – Financial Condition – Market / Interest Rate Risk” in the Company’3 Annual Report to Shareholders for the year ended December 31, 2013 is incorporated by reference in this Item 7A.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Company’s Consolidated Financial Statements and the Notes to Consolidated Financial Statements thereto included in the Company’s Annual Report to Shareholders for the year ended December 31, 2013 is incorporated by reference in this Item 8.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

As previously reported by the Company on a Form 8-K, filed July 12, 2013, the Company appointed BDO USA LLP (“BDO”) as the Company’s new independent registered public accounting firm for and with respect to the year ending December 31, 2013, and dismissed ParenteBeard LLC (“ParenteBeard”) from that role.

During the Company’s two most recent fiscal years and the subsequent interim period preceding ParenteBeard’s dismissal, there were: (i) no disagreements with ParenteBeard on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of ParenteBeard, would have caused it to make reference to the subject matter of the disagreements in its reports on the consolidated financial statements of the Company; and (ii) no “reportable events” (as such term is defined in Item 304(a)(1)(v) of Regulation S-K).

ITEM 9A. CONTROLS AND PROCEDURES

Attached as exhibits to this Form 10-K are certifications of the Company’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), which are required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934, as amended (the Exchange Act). This “Controls and Procedures” section includes information concerning the controls and controls evaluation referred to in the certifications.

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

The Company’s management, with the participation of its CEO and CFO, conducted an evaluation, as of December 31, 2013, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)). Based on this evaluation, the Company’s CEO and CFO concluded that, as of the end of the period covered by this annual report, the Company’s disclosure controls and procedures were effective in reaching a reasonable level of assurance that management is timely alerted to material events relating to the Company during the period when the Company’s periodic reports are being prepared.

23

Conclusion Regarding Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13(a) – 15(f) promulgated under the Exchange Act. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the evaluation under the framework in Internal Control-Integrated Framework (1992), the Company’s management concluded that internal control over financial reporting was effective as of December 31, 2013.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for the preparation, integrity and fair presentation of the consolidated financial statements included in this Annual Report on Form 10-K. The consolidated financial statements and notes included in this annual report have been prepared in conformity with accounting principles generally accepted in the United States of America, and as such, include some amounts that are based on management’s best estimates and judgments.

The Company’s management is responsible for establishing and maintaining effective internal control over financial reporting. The system of internal control over financial reporting, as it relates to the financial statements, is evaluated for effectiveness by management and tested for reliability through a program of internal audits and management testing and review. Actions are taken to correct potential deficiencies as they are identified. Any system of internal control, no matter how well designed, has inherent limitations, including the possibility that a control can be circumvented or overridden and misstatements due to error or fraud may occur and not be detected. Also, because of changes in conditions, internal control effectiveness may vary over time. Accordingly, even an effective system of internal control will provide only a reasonable assurance with respect to financial statement preparation.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2013. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (1992). Based on our assessment, management concluded that as of December 31, 2013, the Company’s internal control over financial reporting is effective and meets the criteria of the Internal Control-Integrated Framework (1992).

The independent registered public accounting firm that audited the consolidated financial statements included in the annual report has issued an attestation report on the Company's internal control over financial reporting.

/s/ Marcie A. Barber

Marcie A. Barber, President and Chief Executive Officer

/s/ JoAnn N. McMinn

JoAnn N. McMinn, Chief Financial Officer

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

24

Report of Independent Registered Public Accounting Firm on Effectiveness of Internal Control over Financial Reporting

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

Juniata Valley Financial Corp.

Mifflintown, Pennsylvania

We have audited Juniata Valley Financial Corp. and its wholly-owned subsidiary’s, The Juniata Valley Bank, (the “Company”) internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Item 9A, Report on Management’s Assessment of Internal Control over Financial Reporting.” Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of financial condition and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows of Juniata Valley Financial Corp. and its wholly-owned subsidiary, The Juniata Valley Bank as of and for the year ended December 31, 2013, and our report dated March 14, 2014 expressed an unqualified opinion.

/s/ BDO USA, LLP

Harrisburg, Pennsylvania

March 14, 2014

25

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Incorporated by reference herein is information appearing in the Proxy Statement for the Annual Meeting of Shareholders to be held on May 20, 2014 (the “Proxy Statement”) under the captions “Directors of the Company”, “Executive Officers of the Company”, “Corporate Governance and Board Matters” and “Section 16(a) Beneficial Ownership Reporting Compliance”. The Company has adopted a Code of Ethics that is applicable to the Company’s Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer and other designated senior officers, which can be found in the Investor Information – Governance Documents section of the Company’s website at www.JVBonline.com. The Company will file its Proxy Statement on or before April 11, 2014.

ITEM 11. EXECUTIVE COMPENSATION

Incorporated by reference herein is the information contained in the Proxy Statement under the captions “Compensation Discussion and Analysis”, “Director’s Compensation” and “Compensation Committee Interlocks and Insider Participation”.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Incorporated by reference herein is the information contained in the Proxy Statement under the caption “Stock Ownership by Management and Beneficial Owners”. Additionally, the following table contains information regarding equity compensation plans approved by shareholders, which include a stock option plan for the Company’s employees and an employee stock purchase plan. The Company has no equity compensation plans that were not approved by shareholders.

Equity Compensation Plan Information
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column a)
	a
Equity compensation plans approved by security holders		83,930	$	18.50		437,680
Equity compensation plans not approved by security holders		-		-
Total		83,930	$	18.50		437,680

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Incorporated by reference herein is the information contained in the Proxy Statement under the caption “Related Party Transactions” and “Corporate Governance and Board Matters”.

26

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Incorporated by reference herein is information contained in the Proxy Statement under the caption “Independent Registered Public Accounting Firm”.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) The following consolidated financial statements of the Company are filed as part of this Form 10-K:

(i) Reports of Independent Registered Public Accounting Firms

(ii) Consolidated Statements of Financial Condition as of December 31, 2013 and December 31, 2012

(iii) Consolidated Statements of Income for the fiscal years ended December 31, 2013, December 31, 2012 and December 31, 2011

(iv) Consolidated Statements of Comprehensive Income for the fiscal years ended December 31, 2013, December 31, 2012 and December 31, 2011

(v) Consolidated Statements of Stockholders’ Equity for the fiscal years ended December 31, 2013, December 31, 2012 and December 31, 2011

(vi) Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2013, December 31, 2012 and December 31, 2011

(vii) Notes to Consolidated Financial Statements

(a)(2) Financial Statements Schedules. All financial statement schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and have therefore been omitted.

(a)(3) Exhibits.

3.1	Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 4.1 to the Company’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 Company’s Current Report on Form 8-K filed with the SEC on December 21, 2007)
3.3	Bylaw Amendment – (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 28, 2012
10.1	1993 Directors Deferred Compensation Agreement for Dale G. Nace  (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2009) *
10.2	1999 Directors Deferred Compensation Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2009) *

27

10.3	Amendments to the 1999 Directors Deferred Compensation Agreement (incorporated by reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K filed with the SEC on March 15, 2011) *
10.4	Director Supplemental Life Insurance/ Split Dollar Plan (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2009) *
10.5	Employee Annual Incentive Plan, (filed herewith)*■
10.6	Change of Control Severance Agreement with JoAnn N. McMinn (incorporated by reference to Exhibit 10 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 8, 2005).*
10.7	Salary Continuation Agreement with Francis J. Evanitsky (incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K filed with the SEC on March 16, 2006)*
10.8	Salary Continuation Agreement with JoAnn N. McMinn (incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2008)*
10.9	Salary Continuation Agreement with Marcie A. Barber (incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2008)*
10.10	Change of Control Severance Agreement with Marcie A. Barber (incorporated by reference to Exhibit 10.19 to the Company’s Current Report on Form 8-K filed with the SEC on May 27, 2008).*
10.11	Juniata Valley Financial Corp. 2011 Stock Option Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 15, 2011)*
10.12	Technology Outsourcing Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 22, 2010).
13.1	Annual Report to Shareholders
21.1	Subsidiaries of Juniata Valley Financial Corp.
23.1	Consent of BDO USA, LLP
23.2	Consent of ParenteBeard LLC
31.1	Rule 13a-4(d) Certification of Marcie A. Barber
31.2	Rule 13a-4(d) Certification of JoAnn N. McMinn
32.1	Section 1350 Certification of Marcie A. Barber
32.2	Section 1350 Certification of JoAnn N. McMinn
101.LAB**	XBRL Taxonomy Extension Label Linkbase

28

101.PRE**	XBRL Taxonomy Extension Presentation Linkbase
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase
101.DEF**	XBRL Taxonomy Extension Definition Linkbase

*Denotes a compensatory plan.

(b) Exhibits. The exhibits required to be filed as part of this report are submitted as a separate section of this report.

(c) Financial Statements Schedules. None Required.

n Denotes that portions of such Plan have been omitted pursuant to a request for confidential treatment and such confidential information has been filed separately with the Securities Exchange Commission.

29

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and 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: March 14, 2014

/s/ Marcie A. Barber

By: Marcie A. Barber

Director, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Philip E. Gingerich, Jr.
Philip E. Gingerich, Jr.	March 14, 2014
Chairman
/s/ Timothy I. Havice
Timothy I. Havice	March 14, 2014
Vice Chairman
/s/ Charles L. Hershberger
Charles L. Hershberger	March 14, 2014
Secretary
/s/ Marcie A. Barber
Marcie A. Barber	March 14, 2014
Director and Chief Executive Officer (Principal Executive Officer)
/s/ Martin L. Dreibelbis
Martin L. Dreibelbis	March 14, 2014
Director
/s/ Jan G. Snedeker
Jan G. Snedeker	March 14, 2014
Director
/s/ Francis J. Evanitsky
Francis J. Evanitsky	March 14, 2014
Director
/s/ Dale G. Nace
Dale G. Nace	March 14, 2014
Director
/s/ Richard M. Scanlon
Richard M. Scanlon, DMD	March 14, 2014
Director
/s/ JoAnn N. McMinn
JoAnn N. McMinn	March 14, 2014
Chief Financial Officer (Principal Accounting and Financial Officer)

30

EX-10.5

Employee Annual Incentive Plan

Plan Document

Plan Effective: January 1, 2004

Revised/Approved: February 7, 2014

Last Amendment: June 19, 2012

Last Schedule A revision and approval: February 7, 2014

Employee Annual Incentive Plan

I. Introduction/Purpose

This Employee Annual Incentive Plan has been developed as a meaningful compensation tool for employees at all levels, who through high levels of performance, contribute to the success and profitability of Juniata Valley Financial Corp (Company). The Plan is designed to support organizational objectives, financial goals, and the best interests of the shareholders as defined in the Bank’s Strategic Plan, by making available additional, variable, and contingent at-risk compensation, in the form of cash awards.

The Employee Annual Incentive Plan is based upon the achievement of required financial targets and other defined objectives consistent with those contained in the Strategic Plan. The formulas and awards have been carefully constructed to integrate the interests of the shareholder as well as enable the Bank to attract, retain, and motivate high quality personnel and support the continued growth and profitability of the Company.

The Plan is not meant to be a substitute for salary increases, but supplemental to base salary and a reward for performance that contributes to outstanding levels of long-term achievement.

While risk is an inherent aspect of business, this compensation plan is designed to reward executives for certain levels of performance without encouraging undue risk taking which could materially threaten the safety and soundness of the organization or business unit.

II. Plan Year

The Plan year for this program will be the calendar year. The effective date of the Plan is January 1, 2004. The performance measures for this will be determined, calculated and approved annually.

III. Participation

In order to be eligible, an individual must meet the following criteria:

· Must have been employed prior to July 1 of the Plan year;

· Must be employed in a full-time or part-time position; and

· Must receive an overall rating of “Good” or better on his/her most recent individual performance evaluation prior to the Plan year award.

Last Plan Amendment: June 15, 2012
Last Schedule A revision and approval: February 7, 2014 Page 2 of 7

A participant's eligibility ceases at termination of employment (other than retirement, death or disability), and the participant will not receive any awards under the Plan for the year of termination. Termination as a result of retirement (as defined in the company’s retirement plans), death, or disability will provide pro-rated awards in the Plan through the last working date for the year in which termination occurred. If the participant dies during the Plan year, his/her designated beneficiary shall receive a pro-rated share of any award for which he/she would have been eligible.

Due to the various levels of responsibility of the positions within the Bank, the Board of Directors has selected the following Tiers of participation for the Employee Annual Incentive Plan. These tiers will generally be based upon position responsibility and grade level.

Tier 1 – President and Chief Executive Officer

Tier 2 – Executive Vice President/Chief Financial Officer

Tier 3 –■

Tier 4 – ■)

Tier 5 – ■

IV. Performance Factors

The annual portion of the Plan is based upon company financial performance factors which may change from year to year. In general, these factors may be measures such as return on assets, return on equity, net income, earnings per share or similar indicators. The factors and weighing of the factors are determined at the beginning of each Plan year. Each factor has quantifiable objectives consisting of threshold, target and optimum goals. The Company’s financial performance factors for the current year can be found in Exhibit A.

V. Award Calculation and Distribution

Awards under the Plan are calculated according to determination of the established performance factors at year end. Company performance between the threshold and target, and target and optimum is interpolated. Awards are determined by taking the determined award percentage times eligible compensation.

Last Plan Amendment: June 15, 2012
Last Schedule A revision and approval: February 7, 2014 Page 3 of 7

With regard to discretionary changes to award amounts relative to individual performance, please reference the following:

· Tier 4 ■

· Tier 3 ■.

· Tier 2 (Executive Vice President/Chief Financial Officer) – After the award is calculated according to the financial performance factors, the President and Chief Executive Officer may increase or decrease the award up to 10%* (of the calculated award amount) based on the participant’s individual performance for the year.

· Tier 1 (President and Chief Executive Officer) – After the award is calculated according to the financial performance factors, the Board may increase or decrease the award up to 10% (of the calculated award amount) based on the participant’s individual performance for the year.

*All discretionary adjustments within the 10% (of the calculated award amount) being made by the President and Chief Executive Officer will be reviewed and approved by the Board of Directors.

Bank performance below threshold will result in no awards being paid under the Plan. In the event this occurs, the President and Chief Executive Officer will have discretion to grant individual awards, with approval by the Board of Directors, for performance bonuses to those individuals who have achieved a high level of individual performance within their divisions.

Annual awards are paid in cash less normal payroll tax withholding. Awards will be paid within 75 days following the end of the plan year. Any participant terminating employment (except retirement, death, or disability) prior to the actual payment of the award will forfeit that award.

While every effort has been made to ensure that this incentive plan does not motivate or reward undue risk taking, any results deemed to have been the result of inappropriate risk will be backed out of incentive payments. The Board of Directors has the discretion to lever incentive payments down by as much as 100% if it is determined that excessive risk has been taken. This can be done on an individual or overall basis, as appropriate.

Last Plan Amendment: June 15, 2012
Last Schedule A revision and approval: February 7, 2014 Page 4 of 7

VI. Clawback

Awards will be recalculated if the relevant company performance measures upon which they are based are restated or otherwise adjusted within the 36-month period following the public release of the financial information. Any material overpayments or adjustments required by law will be owed back to the company.

VII. Administration

Eligible Compensation for purpose of this Plan is defined as a participant’s W-2 gross wages net of any option activity results, taxable retirement earnings, prior year commissions and bonuses and any other imputed income resulting from employee benefits.

The Board of Directors of the Bank may amend the Plan at any time.

Once established, performance factors will remain in place for the year, unless the Board of Directors decides otherwise.

Participation, performance factors, thresholds, targets and any other participation features are established each Plan year and may change from year to year according to the strategic objectives of the bank.

At least annually, the Chief Financial Officer acting as the highest ranking risk officer will review this Plan and provide a detailed report including a detailed assessment regarding any risk issues inherent in the Plan. This risk report and the plan document in full will be reviewed by the Personnel and Compensation Committee of the Board of Directors to ensure that the plan design is consistent with the compensation philosophy of Juniata Valley Bank and that the plan does not motivate undue risk taking. The annual review will also include the market competitiveness of the plan, the plan’s alignment with the Bank’s strategic plan, an assessment of how the plan meets the objectives in the Introduction of this document, plus the plan’s impact on the overall safety and soundness of the Bank. The Committee will then provide a report and recommendations to the full Board of Directors who are responsible to approve the Plan. The Board of Directors of the Bank may amend the Plan at any time.

The Plan does not constitute a contract of employment, and participation in the Plan does not give any employee the right to be retained by the Bank or any right or claim to an award under the Plan unless specifically accrued under the terms of this Plan.

Any right of a participant or his or her beneficiary to the payment of an award under this Plan may not be assigned, transferred, pledged or encumbered.

Any adjustments to the financial performance results utilized in this Plan because of extraordinary gains or losses or other items must be approved by the Board of Directors.

Last Plan Amendment: June 15, 2012
Last Schedule A revision and approval: February 7, 2014 Page 5 of 7

VIII. Plan Approval

This Plan has been amended and approved by the Board of Directors of Juniata Valley Financial Corp on

.

By

Board of Directors

Juniata Valley Financial Corp

Last Plan Amendment: June 15, 2012
Last Schedule A revision and approval: February 7, 2014 Page 6 of 7

Exhibit A: Bank Performance Factors and Award Schedule

Plan Year 2014

2014 Goals

Performance Measures (Basic) Earnings Per Share (75%)
Threshold		Target		Optimum
$	0.94	$	.99	$	1.09

Return on Average Equity (25%)
Threshold			Target			Optimum
	7.74	%		8.15	%		8.97	%

2014 Award Schedule

President & CEO

EVP/CFO

Tier 1*

Tier 2*

Tier 3*

Tier 4

Tier 5

Min

12.00

%

10.00

%

■

■

■

Target

20.00

%

16.00

%

■

■

■

Max

30.00

%

24.00

%

■

■

■

NOTE: Awards will be interpolated for performance levels between threshold and target and target and maximum.

*Please see additional notes for these Tiers:

Tier 4 ■ .

Tier 3 ■

Tier 2 (Executive Vice President/Chief Financial Officer) – After the award is calculated according to the financial performance factors, the President and Chief Executive Officer may increase or decrease the award up to 10%* (of the calculated award amount) based on the participant’s individual performance for the year.

Tier 1 (President and Chief Executive Officer) – After the award is calculated according to the financial performance factors, the Board may increase or decrease the award up to 10% (of the calculated award amount) based on the participant’s individual performance for the year.

*All discretionary adjustments within the 10% (of the calculated award amount) being made by the President and Chief Executive Officer will be reviewed and approved by the Board of Directors.

Last Plan Amendment: June 15, 2012
Last Schedule A revision and approval: February 7, 2014 Page 7 of 7

EX-13.1

Five-Year Financial Summary - Selected Financial Data

(In thousands of dollars, except share and per share data)

	2013			2012			2011			2010			2009
BALANCE SHEET INFORMATION
at December 31
Assets	$	448,782		$	448,869		$	447,433		$	435,753		$	442,109
Deposits		379,645			386,751			386,665			376,790			377,397
Loans, net of allowance for loan losses		275,511			274,219			286,750			295,278			308,911
Investments		128,262			124,911			114,077			83,356			80,973
Goodwill		2,046			2,046			2,046			2,046			2,046
Short-term borrowings		13,797			5,436			3,500			3,314			3,207
Long-term debt		-			-			-			-			5,000
Stockholders' equity		49,984			50,297			49,720			49,976			50,603
Number of shares outstanding		4,196,266			4,218,361			4,228,218			4,257,765			4,337,587
Average for the year
Assets		450,031			454,057			447,323			439,130			435,285
Stockholders' equity		49,571			49,766			50,355			50,654			49,514
Weighted average shares outstanding		4,210,336			4,231,404			4,241,286			4,297,443			4,341,097
INCOME STATEMENT INFORMATION
Years Ended December 31
Total interest income	$	16,734		$	18,170		$	20,033		$	21,574		$	23,268
Total interest expense		2,900			3,648			4,591			5,502			7,279
Net interest income		13,834			14,522			15,442			16,072			15,989
Provision for loan losses		415			1,411			364			741			627
Other income		4,233			4,592			3,946			3,855			4,190
Other expenses		13,146			13,077			12,802			12,641			12,638
Income before income taxes		4,506			4,626			6,222			6,545			6,914
Federal income tax expense		505			978			1,542			1,630			1,808
Net income	$	4,001		$	3,648		$	4,680		$	4,915		$	5,106
PER SHARE DATA
Earnings per share - basic	$	0.95		$	0.86		$	1.10		$	1.14		$	1.18
Earnings per share - diluted		0.95			0.86			1.10			1.14			1.18
Cash dividends		0.88			0.88			0.86			0.82			0.78
Book value		11.91			11.92			11.76			11.74			11.67
FINANCIAL RATIOS
Return on average assets		0.89	%		0.80	%		1.05	%		1.12	%		1.17	%
Return on average equity		8.07			7.33			9.29			9.70			10.31
Dividend payout		92.65			102.08			77.95			71.72			66.31
Average equity to average assets		11.02			10.96			11.26			11.54			11.38
Loans to deposits (year end)		72.57			70.90			74.16			78.37			81.85

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS

The information contained in this Annual Report contains forward looking statements (as such term is defined in the Securities Exchange Act of 1934 and the regulations thereunder) including statements which are not historical facts or as to trends or management's intentions, plans, beliefs, expectations or opinions. Such forward looking statements are subject to risks and uncertainties and may be affected by various factors which may cause actual results to differ materially from those in the forward looking statements including, without limitation, the impact of adverse changes in the economy and real estate markets, including protracted periods of low-growth and sluggish loan demand; the effect of market interest rates, particularly a continuing period of low market interest rates, and relative balances of rate-sensitive assets to rate-sensitive liabilities, on net interest margin and net interest income; the effect of competition on rates of deposit and loan growth and net interest margin; increases in non-performing assets, which may result in increases in the allowance for credit losses, loan charge-offs and elevated collection and carrying costs related to such non-performing assets; other income growth, including the impact of regulatory changes which have reduced debit card interchange revenue; investment securities gains and losses, including other than temporary declines in the value of securities which may result in charges to earnings; the level of other expenses, including salaries and employee benefit expenses; the increasing time and expense associated with regulatory compliance and risk management; the uncertainty and lack of clear regulatory guidance associated with the delay in implementing many of the regulations mandated by the Dodd Frank Act; and capital and liquidity strategies, including the expected impact of the capital and liquidity requirements proposed by the Basel III standards. Certain of these risks, uncertainties and other factors are discussed in this Annual Report or in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, a copy of which may be obtained from the Company upon request and without charge (except for the exhibits thereto).

OVERVIEW

This discussion concerns Juniata Valley Financial Corp. (“Company” or “Juniata”) and its wholly owned subsidiary, The Juniata Valley Bank (“Bank”). The overview is intended to provide a context for the following Management’s Discussion and Analysis of Financial Condition and Results of Operations. Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements, including the notes thereto, included in this annual report. We have attempted to identify the most important matters on which our management focuses in evaluating our financial condition and operating performance and the short-term and long-term opportunities, challenges and risks (including material trends and uncertainties) which we face. We also discuss the actions we are taking to address these opportunities, challenges and risks. The Overview is not intended as a summary of, or a substitute for review of, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Nature of Operations

Juniata is a bank holding company that delivers financial services within its market, primarily central Pennsylvania. The Company owns one bank, the Bank, which provides retail and commercial banking services through 12 offices in Juniata, Mifflin, Perry, Huntingdon and Centre counties. Additionally, Juniata owns 39.16% of Liverpool Community Bank ("LCB"), carried as an unconsolidated subsidiary and accounted for under the equity method of accounting.

The Bank provides a full range of consumer and commercial services. Consumer services include Internet, mobile and telephone banking, an automated teller machine network, personal checking accounts, interest checking accounts, savings accounts, insured money market accounts, debit cards, certificates of deposit, club accounts, secured and unsecured installment loans, construction and mortgage loans, safe deposit facilities, credit lines with overdraft checking protection, individual retirement accounts, health savings accounts, on-line bill payment and other on-line and mobile services. Commercial banking services include small and high-volume business checking accounts, on-line account management services, ACH origination, payroll direct deposit, commercial lines and letters of credit, commercial term and demand loans and repurchase agreements. The Bank also provides a variety of trust, asset management and estate services. The Bank offers annuities, mutual funds, stock and bond brokerage services and long-term care insurance products through an arrangement with a broker-dealer and insurance brokers. Management believes the Company has a relatively stable deposit base with no major seasonal depositor or group of depositors. Most of the Company’s commercial customers are small and mid-sized businesses in central Pennsylvania.

Economic and Industry-Wide Factors Relevant to Juniata

As a financial services organization, Juniata’s core business is most influenced by the movement of interest rates. Lending and investing is done daily, using funding from deposits and borrowings, resulting in net interest income, the most significant portion of operating results. Through the use of asset/liability management tools, the Company continually evaluates the effects that possible changes in interest rates could have on operating results and balance sheet growth. Using this information, along with analysis of competitive factors, management designs and prices its products and services.

General economic conditions are relevant to Juniata’s business. In addition, economic factors impact customers’ need for financing, thus affecting loan growth. Additionally, changes in the economy can directly impact the credit strength of existing and potential borrowers.

Focus of Management

The management of Juniata believes that it is important to know who and what we are in order to be successful. We must be aligned in our efforts to achieve goals. We’ve identified the four characteristics that define the Company and the personnel that support it. We are Committed, Capable, Caring and Connected. Management seeks to be the preeminent financial institution in its market area and measures its success by five key elements.

Shareholder Satisfaction

Above all else, management is committed to maximizing the value of our shareholders’ investment, through both stock value appreciation and dividend returns. Remaining connected to our communities will allow us to identify the financial needs of our market and to deliver those products and services capably. In doing so, we will profitably grow the balance sheet and enhance core earnings, while maintaining capital and liquidity levels well exceeding all regulatory guidelines.

Customer Relationships

We are committed to maximizing customer satisfaction. We are sensitive to the expanding array of financial services and financial service providers available to our customers, both locally and globally. We are committedto fostering a complete customer relationship by helping clients identify their current and future financial needs and offering practical and affordable solutions to both. As our customers’ lifestyles change, the channels through which we deliver our services must change as well. One element of the Company’s strategic plan is to provide connectionthrough every means available, wherever we are needed, whether through a stand-alone branch, in-store boutique, ATM or via on-line and mobile banking anywhere internet or cell phone signals can be received.

Balance Sheet Growth

We are capableof profitable balance sheet growth. Rapid growth should not be a substitute for careful fiscal and strategic management. It is our goal to continue quality growth despite intense competition by paying careful attention to the needs of our customers. We will continue to maintain high credit standards, knowing that lending under the right circumstances is the proper way to maintain soundness and profitability. We believe we consistently pay fair market rates on all deposits, and have invested wisely and conservatively in compliance with self-imposed standards, minimizing risk of asset impairment. We aspire to increase our market share within the current communities that we serve, and to expand in contiguous areas through acquisition and investment. As part of our strategic plan for growth, we continue to actively seek opportunities for acquisitions of branches or stakes in other financial institutions, similar to those that have occurred in prior years.

Operating Results

We are capable of producing profitability ratios that exceed those of many of our peers. Recognizing that net interest margins have narrowed for banks in general and that they may not return to the ranges experienced in the past, we also focus on the importance of providing fee-generating services in which customers find value. Offering a broad array of services prevents us from becoming too reliant on one form of revenue. It has also been our philosophy to spend conservatively and to implement operating efficiencies where possible to keep non-interest expense from escalating in areas that can be controlled. In 2013, we continued to make advances in technological resources, placing data and information in the hands of our customers and employees, committed to optimizing the customer experience.

Connectionto the Community

We are active corporate citizens of the communities we serve. Although the world of banking has transitioned to global availability through electronics, we believe that our community banking philosophy is still valid. Despite technological advances, banking is still a personal business, particularly in the rural areas we serve. We believe that our customers shop for services and value a relationship with an institution involved in the same community, with the same interests in its prosperity. We have a foundation and a history in each of the communities we serve. Management takes an active role in local business and industry development organizations to help attract and retain commerce in our market area. We provide businesses, large and small, with financial tools and financing needed to grow and prosper. We have always been committed to responsible lending practices. We invest locally by including local municipal bonds in our investment portfolio and participating in funding for such projects as low income and elderly housing. We support charitable programs that benefit the local communities, not only with monetary contributions, but also through the personal involvement of our caringemployees.

Juniata’s Opportunities

Soundness and stability

Our financial condition is strong. We enjoy strong capital and liquidity ratios that significantly exceed regulatory guidelines. Our business model includes a plan for growth without sacrificing profitability or integrity. We believe an opportunity exists for banks such as ours to offer the trusted, personal service of a locally managed institution that has roots in the community reaching back more than 140 years.

Expansion of customer base

Our strategic focus is based on leveraging our collective knowledge of the Company’s primary and contiguous markets to identify lending or fee-based opportunities consistent with our risk parameters and profitability targets. We continue to develop our sales team through mentoring and by making employee education paramount. We continually seek and implement back-room efficiencies. We recognize changes taking place in a world where convenience and mobility are priorities for consumers and businesses when choosing a financial institution with whom to do business. We offer full-featured secure mobile banking for use on home computers and all mobile devices for consumers. For businesses, we provide options for cash management and remote deposit. In 2013, we expanded our marketing and advertising channels to increase awareness of our Bank’s services. We launched an electronic financial education session to the community. Through team sales efforts we reach out to present and potential customers to make them aware of the full complement of services available to match family and business needs. In 2014, we are set to announce several exciting new deposit products, targeted to meet the changing needs of families.

Delivery system enhancements

We seek to continually enhance our customer delivery system, both through technology and physical facilities. We actively seek opportunities to expand our branch network through acquisitions. We believe that it is imperative that our customers have convenient and easy access to personal financial services that complement their particular lifestyle, whether it is through electronic or personal delivery. It is with this goal in mind that we announced our entrance into the mobile banking arena in 2011 and followed up with an on-line mortgage application product beginning in 2012. In 2013, remote deposit capabilities were introduced to our business clients. In 2014, our ATMs will be upgraded to state-of-the-art machines, designed to appeal to both traditional customers and those that prefer electronic efficiencies. In addition to offering on-line and mobile services, our sales staff has also become more mobile, reaching out to clients and potential clients through on-site visits, connecting more closely with the business and personal financial needs of our customer base.

Juniata’s Challenges

Economy

The direction of the economy continues to be uncertain. Unemployment levels have not yet shown signs of sustained decrease, home values have remained depressed, earnings rates on investments remain historically low and government actions to intervene in the markets continue to result in large increases in the national debt. All these factors are affecting the behavior of consumers and businesses and the way in which money is spent, saved, borrowed and invested. The aforementioned factors have combined to create an uncertain and challenging economic environment, especially for financial institutions.

Competition

Each year, competition becomes more intense and global in nature. To meet this challenge, we attempt to stay in close contact with our customers, monitoring their satisfaction with our services through surveys, personal visits and networking in the communities we serve. We strive to meet or exceed our customers’ expectations and deliver consistent high-quality service. We believe that our customers have become acutely aware of the value of local service, and we strive to maintain their confidence.

Rate environment

We intend to continue making what we believe to be rational pricing decisions for loans, deposits and non-deposit products. This strategy can be difficult to maintain, as many of our peers appear to continue pricing for growth, rather than long-term profitability and stability. We believe that a strategy of “growth for the sake of growth” results in lower profitability, and such actions by large groups of banks have had an adverse impact on the entire financial services industry. We intend to maintain our core pricing principles, which we believe protect and preserve our future as a sound community financial services provider, proven by results.

Regulated Company

The Company is subject to banking regulation, as well as regulation by the Securities and Exchange Commission (“SEC”) and, as such, must comply with many laws, including the USA Patriot Act, the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act. Management has established a Disclosure Committee for Financial Reporting, an internal group at Juniata that seeks to ensure that current and potential investors in the Company receive full and complete information concerning our financial condition. Juniata has incurred direct and indirect costs associated with compliance with the SEC’s filing and reporting requirements imposed on public companies by the Sarbanes-Oxley Act, as well as adherence to new and existing banking regulations and stronger corporate governance requirements. Regulatory burdens continue to increase as evidenced by the provisions in the Dodd-Frank Act that impact the Company in the areas of corporate governance, capital requirements and restrictions on fees that may be charged to consumers.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

The Company’s consolidated financial statements are prepared based upon the application of accounting principles generally accepted in the United States of America (“GAAP”), the most significant of which are described in Note 2 to our consolidated financial statements – Summary of Significant Accounting Policies. Certain of these policies, particularly with respect to allowance for loan losses, the investment portfolio and deferred tax assets and liabilities require numerous estimates and economic assumptions, based upon information available as of the date of the consolidated financial statements. As such, over time, they may prove inaccurate or vary and may significantly affect the Company’s reported results and financial position in future periods.

The accounting policy for establishing the allowance for loan losses relies to a greater extent on the use of estimates than other areas and, as such, has a greater possibility of producing results that could be different from those currently reported. Changes in underlying factors, assumptions or estimates in the allowance for loan losses could have a material impact on the Company’s future financial condition and results of operations. The section of this Annual Report to Shareholders entitled “Allowance for Loan Losses” provides management’s analysis of the Company’s allowance for loan losses and related provision expense. The allowance for loan losses is maintained at a level believed adequate by management to absorb probable losses in the loan portfolio. Management’s determination of the adequacy of the allowance for loan losses is based upon an evaluation of individual credits in the loan portfolio, historical loan loss experience, current economic conditions and other relevant factors. This determination is inherently subjective, as it requires material estimates, including the amounts and timing of future cash flows expected to be received on impaired loans that may be susceptible to significant change.

In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and may require the Company to recognize additions to the allowance for loan losses based on their judgments about information available to them at the time of their examination, which may not be currently available to management.

Considerations used by management to determine other-than-temporary impairment status of individual holdings within the investment securities portfolio are based partially upon estimations of fair value and potential for recovery. As market conditions and perception can unpredictably affect the value of individual investments in the future, these determinations could have a material impact on the Company’s future financial condition and results of operations.

The Company recognizes deferred tax assets and liabilities for the future effects of temporary differences and tax credits. Enacted tax rates are applied to cumulative temporary differences based on expected taxable income in the periods in which the deferred tax asset or liability is anticipated to be realized. Future tax rate changes could occur that would require the recognition of income or expense in the consolidated statements of income in the period in which they are enacted. Deferred tax assets must be reduced by a valuation allowance if, in management’s judgment, it is “more likely than not” that some portion of the asset will not be realized. Management may need to modify their judgments in this regard from one period to another should a material change occur in the business environment, tax legislation, or in any other business factor that could impair the Company’s ability to benefit from the asset in the future.

RESULTS OF OPERATIONS

2013

Financial Performance Overview

Net income for Juniata in 2013 was $4,001,000, representing a 9.7% increase as compared to net income for 2012. Earnings per share on a fully diluted basis increased by 10.5%, from $0.86 in 2012 to $0.95 in 2013. The net interest margin, on a fully tax-equivalent basis, decreased from 3.68% in 2012 to 3.53%, in 2013. The ratio of non-interest income (excluding gains on sales of securities) to average assets decreased by 7 basis points, while the ratio of non-interest expense to average assets increased by 4 basis points to 2.92%. Five-year historical ratios are presented below.

	2013			2012			2011			2010			2009
Return on average assets		0.89	%		0.80	%		1.05	%		1.12	%		1.17	%
Return on average equity		8.07			7.33			9.29			9.70			10.31
Yield on earning assets		4.09			4.39			4.91			5.42			5.88
Cost to fund earning assets		0.71			0.88			1.13			1.38			1.84
Net interest margin (fully tax equivalent)		3.53			3.68			3.97			4.24			4.23
Non-interest income (excluding gains on sales or calls of securities and securities impairment charges) to average assets		0.94			1.01			0.88			0.88			1.01
Non-interest expense to average assets		2.92			2.88			2.86			2.98			2.90
Net non-interest expense to average assets		1.98			1.87			1.98			2.10			1.89

As demonstrated above, there were improvements in both Return on Average Asset and Return on Average Equity ratios in 2013 as compared to 2012, in spite of a continuing narrowing net interest margin. Much of the increase in 2013 can be attributed to a lower provision for loan losses. In 2012, an unusually high provision was recorded to address declines in fair value of collateral held for certain land development loans. The sustained low rate environment has resulted in generally lower margins for most banking organizations. Therefore, it is important to understand the degree of change in the net interest margin and how it compares to similar companies in our competitive market. We follow the performances of a group of six local competitors as a peer group to compare total stock return and the analysis below compares our net interest margin to the peer group’s financial performance for the year ended December 31, 2013. As noted below, Juniata’s net interest margin significantly exceeded the averages of the peer group, that includes F.N.B. Corporation, First Community Financial Corporation, Kish Bancorp, Inc., Mid Penn Bancorp, Inc., Mifflinburg Bank and Trust Co., Northumberland Bancorp, and Orrstown Financial Services, Inc.

	For the Year Ended December 31, 2013
	Net Interest Margin
Juniata Valley Financial Corp		3.53	%
Peer Group Average		3.36	%

Juniata strives to attain consistently high earnings levels each year by protecting the core (repeatable) earnings base through conservative growth strategies that minimize stockholder and balance-sheet risk, while serving its rural Pennsylvania customer base. This approach has helped achieve solid performances year after year. The Company considers the return on assets (“ROA”) ratio to be a key indicator of its success and constantly scrutinizes the broad categories of the income statement that impact this profitability indicator. Summarized below are the components of net income (in thousands of dollars) and the contribution of each to ROA for 2013 and 2012.

	2013						2012
				% of Average						% of Average
				Assets						Assets
Net interest income	$	13,834			3.07	%	$	14,522			3.20	%
Provision for loan losses		(415	)		(0.09	)		(1,411	)		(0.31	)
Customer service fees		1,290			0.29			1,282			0.28
Debit card fee income		822			0.18			809			0.18
BOLI		416			0.09			450			0.10
Trust fees		355			0.08			379			0.08
Commissions from sales of non-deposit products		375			0.08			353			0.08
Income from unconsolidated subsidiary		237			0.05			249			0.05
Security gains		(2	)		(0.00	)		2			0.00
Gains on sale of other assets		338			0.08			567			0.12
Other noninterest income		402			0.09			501			0.11
Total noninterest income		4,233			0.94			4,592			1.01
Employee expense		(7,028	)		(1.56	)		(7,286	)		(1.60	)
Occupancy and equipment		(1,433	)		(0.32	)		(1,439	)		(0.32	)
Data processing expense		(1,450	)		(0.32	)		(1,440	)		(0.32	)
Director compensation		(223	)		(0.05	)		(234	)		(0.05	)
Professional fees		(388	)		(0.09	)		(362	)		(0.08	)
Taxes, other than income		(483	)		(0.11	)		(438	)		(0.10	)
FDIC insurance premiums		(331	)		(0.07	)		(327	)		(0.07	)
Gain (Loss) on sales of other real estate owned		39			0.01			(34	)		(0.01	)
Intangible amortization		(45	)		(0.01	)		(45	)		(0.01	)
Amortization of investment in partnership		(448	)		(0.10	)		-			0.00
Other noninterest expense		(1,356	)		(0.30	)		(1,472	)		(0.32	)
Total noninterest expense		(13,146	)		(2.92	)		(13,077	)		(2.88	)
Income tax expense		(505	)		(0.11	)		(978	)		(0.22	)
Net income	$	4,001			0.89	%	$	3,648			0.80	%
Average assets	$	450,031					$	454,057

Net Interest Income

Net interest income is the amount by which interest income on earning assets exceeds interest expense on interest bearing liabilities. Net interest income is the most significant component of revenue, comprising approximately 77% of total revenues (the total of net interest income and non-interest income, exclusive of security gains) for 2013. Interest spread measures the absolute difference between average rates earned and average rates paid. Because some interest earning assets are tax-exempt, an adjustment is made for analytical purposes to place all assets on a fully tax-equivalent basis. Net interest margin is the percentage of net return on average earning assets on a fully tax-equivalent basis and provides a measure of comparability of a financial institution’s performance.

Both net interest income and net interest margin are impacted by interest rate changes, changes in the relationships between various rates and changes in the composition of the average balance sheet. Additionally, product pricing, product mix and customer preferences dictate the composition of the balance sheet and the resulting net interest income. Table 1 shows average asset and liability balances, average interest rates and interest income and expense for the years 2013, 2012 and 2011. Table 2 further shows changes attributable to the volume and rate components of net interest income.

Table 1

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS

(Dollars in thousands)

	Years Ended December 31,
	2013								2012								2011
	Average								Average								Average
	Balance					Yield/			Balance					Yield/			Balance					Yield/
	(1)			Interest		Rate			(1)			Interest		Rate			(1)			Interest		Rate
ASSETS
Interest earning assets:
Loans:
Taxable (5)	$	258,116		$	14,310		5.54	%	$	263,174		$	15,439		5.87	%	$	279,501		$	17,332		6.20	%
Tax-exempt		18,621			558		3.00			19,108			653		3.42			13,818			525		3.80
Total loans (8)		276,737			14,868		5.37			282,282			16,092		5.70			293,319			17,857		6.09
Investment securities:
Taxable		91,972			1,267		1.38			88,482			1,311		1.48			70,658			1,240		1.75
Tax-exempt		37,210			583		1.57			36,429			738		2.03			33,724			901		2.67
Total investment securities		129,182			1,850		1.43			124,911			2,049		1.64			104,382			2,141		2.05
Interest bearing deposits		2,834			16		0.56			6,707			29		0.43			3,681			30		0.81
Federal funds sold		-			-		0.00			75			0		0.13			6,590			5		0.08
Total interest earning assets		408,753			16,734		4.09			413,975			18,170		4.39			407,972			20,033		4.91
Non-interest earning assets:
Cash and due from banks		8,557								8,813								9,514
Allowance for loan losses		(2,679	)							(3,533	)							(2,854	)
Premises and equipment		6,305								6,555								6,892
Other assets (7)		29,095								28,247								25,799
Total assets	$	450,031							$	454,057							$	447,323
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest bearing liabilities:
Demand deposits (2)	$	94,338			160		0.17		$	96,599			209		0.22		$	91,897			396		0.43
Savings deposits		59,926			69		0.12			56,263			135		0.24			49,894			202		0.40
Time deposits		161,677			2,642		1.63			174,844			3,277		1.87			185,005			3,962		2.14
Other, including short-term borrowings, and other interest bearing liabilities		8,848			29		0.33			5,330			27		0.51			4,495			31		0.69
Total interest bearing liabilities		324,789			2,900		0.89			333,036			3,648		1.10			331,291			4,591		1.39
Non-interest bearing liabilities:
Demand deposits		71,006								65,224								60,986
Other		4,665								6,031								4,691
Stockholders' equity		49,571								49,766								50,355
Total liabilities and stockholders' equity	$	450,031							$	454,057							$	447,323
Net interest income				$	13,834							$	14,522							$	15,442
Net margin on interest earning assets (3)							3.38	%							3.51	%							3.79	%
Net interest income and margin - Tax equivalent basis (4)				$	14,422		3.53	%				$	15,239		3.68	%				$	16,177		3.97	%

Notes:

(1) Average balances were calculated using a daily average.

(2) Includes Super Now and money market accounts.

(3) Net margin on interest earning assets is net interest income divided by average interest earning assets.

(4) Interest on obligations of states and municipalities is not subject to federal income tax. In order to make the net yield comparable on a fully taxable basis, a tax equivalent adjustment is applied against the tax-exempt income utilizing a federal tax rate of 34%.

Table 2

RATE - VOLUME ANALYSIS OF NET INTEREST INCOME

(Dollars in thousands)

	2013 Compared to 2012									2012 Compared to 2011
	Increase (Decrease) Due To (6)									Increase (Decrease) Due To (6)
	Volume			Rate			Total			Volume			Rate			Total
ASSETS
Interest earning assets:
Loans:
Taxable (5)	$	(293	)	$	(836	)	$	(1,129	)	$	(984	)	$	(909	)	$	(1,893	)
Tax-exempt		(16	)		(79	)		(95	)		185			(57	)		128
Total loans (8)		(309	)		(915	)		(1,224	)		(799	)		(966	)		(1,765	)
Investment securities:
Taxable		50			(94	)		(44	)		283			(212	)		71
Tax-exempt		16			(171	)		(155	)		68			(231	)		(163	)
Total investment securities		66			(265	)		(199	)		351			(443	)		(92	)
Interest bearing deposits		(20	)		7			(13	)		17			(18	)		(1	)
Federal funds sold		-			-			-			(7	)		2			(5	)
Total interest earning assets		(263	)		(1,173	)		(1,436	)		(438	)		(1,425	)		(1,863	)
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest bearing liabilities:
Demand deposits (2)		(5	)		(44	)		(49	)		19			(206	)		(187	)
Savings deposits		8			(74	)		(66	)		23			(90	)		(67	)
Time deposits		(235	)		(400	)		(635	)		(209	)		(476	)		(685	)
Other, including short-term borrowings, and other interest bearing liabilities		14			(12	)		2			5			(9	)		(4	)
Total interest bearing liabilities		(218	)		(530	)		(748	)		(162	)		(781	)		(943	)
Net interest income	$	(45	)	$	(643	)	$	(688	)	$	(276	)	$	(644	)	$	(920	)

(5) Non-accruing loans are included in the above table until they are charged off.

(6) The change in interest due to rate and volume has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each.

(7) Includes net unrealized gains on securities available for sale: $86 in 2013, $1,389 in 2012 and $930 in 2011.

(8) Interest income includes loan fees of $185, $167 and $218, in 2013, 2012 and 2011, respectively.

On average, total loans outstanding in 2013 decreased from 2012 by 2.0%, to $276,737,000. Average yields on loans decreased by 33 basis points in 2013 when compared to 2012. As shown in the preceding Rate – Volume Analysis of Net Interest Income Table 2, the decrease in yield reduced interest income on loans by approximately $915,000, and the decrease in volume further reduced interest income by $309,000, resulting in an aggregate decrease in interest recorded on loans of $1,224,000. While the prime rate has remained unchanged at 3.25% since December of 2008, most adjustable rate mortgages scheduled to reprice during 2013 that had not already reached a floor, did so at rates below their previous rates, effectively decreasing the overall yield to the Bank. Additionally, in 2013, with fixed rates offered through the secondary market, it was favorable for some customers with adjustable rate loans to refinance through that program, decreasing both volume and yield in the loan portfolio. Likewise, new and refinanced portfolio loans were priced at lower rates during 2013, also contributing to the decrease in overall yield.

During 2013, 33% of the investment portfolio, or $38,973,000, matured or was prepaid. All proceeds from these events and other funds available through loan repayments, totaling $45,446,000, were reinvested in the investment portfolio in the lower rate environment, resulting in the decrease in overall yield of the investment securities by 21 basis points. Yields on the investment securities portfolio decreased to 1.43% in 2013, as compared to 1.64% in 2012. Yield declines decreased net interest income by $265,000 when compared to 2012. Average balances of investment securities increased by $4,271,000, and this volume increase accounted for a $66,000 increase in interest income as compared to 2012.

In total, yield on earning assets in 2013 was 4.09% as compared to 4.39% in 2012, a decrease of 30 basis points. On a fully tax equivalent basis, yield on earning assets decreased from 4.56% in 2012 to 4.24% in 2013.

Average interest bearing liabilities decreased by $8,247,000 in 2013, as compared to 2012. Within the categories of interest bearing liabilities, deposits decreased on average by $11,765,000, and borrowings increased by $3,518,000 on average. During 2013, the most significant change in interest bearing deposits was in time deposit balances, which decreased on average by $13,167,000, while interest-bearing demand and savings accounts increased on average by $1,402,000. This shift continues a trend that has been occurring for several years. Management believes this trend reflects the consumers’ response to historical low interest rates. In 2013, time deposits accounted for 51.1% of total interest-bearing deposits. One and two years prior, time deposits represented 53.4% and 63.5%, respectively, of all interest-bearing deposits. Changes in total interest-bearing liabilities reduced interest expense by $218,000 in 2013 as compared to 2012, while decreases in interest rates further reduced interest expense by $530,000. Non-interest bearing liabilities used to fund earning assets included demand deposits, which increased $5,782,000 on average. The percentage of interest earning assets funded by non-interest bearing liabilities was approximately 20.5% in 2013 versus 19.6% in 2012. The total cost to fund earning assets (computed by dividing the total interest expense by the total average earning assets) in 2013 was 0.71%, as compared to 0.88% in 2012.

Net interest income was $13,834,000 for 2013, a decrease of $688,000 when compared to 2012, with $643,000 due to net rate decreases and $45,000 attributed to net volume decreases.

Provision for Loan Losses

Juniata’s provision for loan losses is determined as a result of an analysis of the adequacy level of the allowance for loan losses. In order to closely reflect the potential losses within the current loan portfolio based upon current information known, the Company carries no unallocated allowance. An analysis was performed following the process described in “Application of Critical Accounting Policies” earlier in this discussion, and it was determined that a provision of $415,000 was appropriate for 2013, a decrease of $996,000 when compared to 2012 when the total loan loss provision was $1,411,000. The higher provision in 2012 was primarily the result of analysis of the values of collateral securing certain impaired loans. Discussion included in the Loans and Allowance for Loan Losses in the section below titled “Financial Condition” explains the information and analysis used to arrive at the significant increase in the provision in 2012. In 2013, net charge-offs exceeded the provision by $994,000, due primarily to specific loss confirming events related to one loan in which a $1,026,000 charge-off was taken in 2013, which had a specific reserve established in 2012.

Non-interest Income

The Company remains committed to providing comprehensive services and products to meet the current and future financial needs of our customers. We believe that our responsiveness to customers’ needs surpasses that of our competitors, and we measure our success by the customer acceptance of fee-based services. We continually explore avenues to enhance product offerings in areas beneficial to customers. We offer a variety of options for financing to home-buyers that includes a secondary market lending program, providing significant fee income. We continue to add new features and services for our electronic banking clientele. We provide alternative investment opportunities through an arrangement with a broker dealer and integrate the delivery of non–traditional products with our Trust and Wealth Management Division. This arrangement enables us to meet the investment needs of a varied customer base and to better identify our clients’ needs for traditional trust services.

Fee-generated non-interest revenues consist of customer service fees derived from deposit accounts, trust relationships and sales of non-deposit products. In 2013, revenues from these services totaled $2,020,000, representing a slight increase of $6,000, or 0.3%, from 2012 revenues. Customer service fees derived from deposit accounts were $8,000 higher in 2013 than in 2012. The slight increase was attributed to overdraft and non-sufficient fund charges to customers. Total fees for trust services decreased by $24,000, or 6.3%, as fees from estate settlements decreased by $9,000 in 2013 as compared to 2012, and non-estate fees decreased by $15,000. Variance in fees from estate settlements occurs because estate settlements occur sporadically and are not necessarily consistent year to year. Non-estate fees are repeatable revenues that generally increase and decrease in relation to movements in interest rates as market values of trust assets under management increase or decrease and as new relationships are established. Commissions from sales of non-deposit products increased in 2013, resulting in a $22,000 increase in related fee income.

Fees and income derived from the origination, sale and servicing of residential mortgage loans was $338,000 in 2013, a decrease of $229,000, or 40.4%, compared to 2012, when refinancing activities were more active. Other non-interest-related fees derived from loan activity decreased by $32,000 when comparing 2013 to 2012. A gain of $53,000 was recorded in 2012 as a result of a life insurance claim. No such activity occurred in 2013.

The Company owns 39.16% of the stock of Liverpool Community Bank, (“LCB”) and accounts for its ownership through the equity method. As such, 39.16% of the income of LCB is recorded by Juniata as non-interest income. As a result of this investment, $237,000 was recorded as income in 2013, compared to $249,000 in 2012. Earnings on bank-owned life insurance and annuities decreased in 2013 by $34,000, or 7.6%, when compared to the previous year, as crediting rates were reduced.

As a percentage of average assets, non-interest income (excluding securities gains and losses) was 0.94% in 2013 as compared to 1.01% in 2012.

Non-interest Expense

Management strives to control non-interest expense where possible in order to achieve maximum operating results.

In 2013, total non-interest expense increased by $69,000, or 0.5%, when compared to 2012. The overall change in non-interest expense was attributable to the first year’s amortization of the Company’s investment in a low income housing project in 2013, offset by decreases in the cost for employee benefits expenses and costs associated with loan foreclosures (included in other non-interest expense). In 2013, amortization of the low income housing investment was $448,000, with no such expense recorded in 2012. Amortization is scheduled to continue through 2023 at similar amounts.

On December 31, 2012, the Company froze its defined benefit plan to future service accruals while at the same time significantly enhancing the defined contribution plan employer match for its employees. The result was a reduction in expense of $257,000, or 43.5%, in 2013 compared to 2012. Additionally, the cost of medical insurance for employees declined by $203,000, or 23.6%, in the Company’s self-funded plan. Small variances in occupancy, equipment, data processing, director compensation, professional fees and FDIC insurance resulted in a net increase of $23,000 for 2013 in comparison to 2012. Sales of properties carried as other real estate owned generated net gains of $39,000 for 2013, as compared to a net loss of $34,000 during 2012. This increase was offset somewhat by a decrease in costs associated with assets in foreclosure of $50,000, included in other non-interest expense.

As a percentage of average assets, non-interest expense was 2.92% in 2013 as compared to 2.88% in 2012. The low-income housing investment amortization increased this key ratio by 10 basis points. Excluding the new amortization, annualized non-interest expense would have been 2.82% of average assets, representing an improvement of 6 basis points.

Income Taxes

Income tax expense for 2013 amounted to $505,000, which included the effect of a tax credit in the amount of $556,000, versus $978,000 of income tax expense with no such credit in 2012. The tax credit is available to the Company as a result of an equity investment in a low income housing project. The effective tax rate in 2013 was 11.2% versus 21.1% in 2012. The reduction in the effective rate is attributed to the tax credit earned in 2013. See Note 15 of Notes to Consolidated Financial Statements for further information on income taxes.

Net Income

For comparative purposes, the following table sets forth earnings, in thousands of dollars, and selected earnings ratios for the past three years.

	2013			2012			2011
Net Income	$	4,001		$	3,648		$	4,680
Return on average assets		0.89	%		0.80	%		1.05	%
Return on average equity		8.07	%		7.33	%		9.29	%

Outlook for 2014

Since December of 2008, the national prime rate has remained at 3.25% and the federal funds rate has remained at a historically low level. This period is the longest period of unchanged rates in recent history. Still, we expect, and are prepared for, the interest rate environment to remain relatively unchanged again throughout 2014. However, because experience also tells us that rate movement can occur quickly and significantly, we are managing our interest sensitive assets and liabilities with an understanding of the rate risk involved with rapidly rising rates. We enter 2014 with non-performing loans at the lowest level since 2010 and expect to see further reductions by year-end as issues are resolved. Our net interest margin remains a primary component of profitability; however, we have sought and continue to seek to focus on fee services, including an attempt to regain income lost to consumer regulation that lessens our ability to charge for consumer overdrafts, in order to augment revenues. We will maintain the conservative lending and investing philosophies and responsible deposit pricing that have resulted in our healthy net interest margin and solid balance sheet.

Also necessary to our success is the satisfaction level of our customers, clients and employees. In recent years, we have introduced new avenues of service delivery through technology, such as an on-line mortgage application portal, a mobile banking application for the IPad and other electronic tablets to complement our smart phone apps, internal and external transfers of funds features through on-line banking and merchant remote deposit, to name a few. Further advancement in 2013 continued as we realigned our human resources to achieve more efficient and competent delivery. In 2014, we will be replacing our ATM network with new state-of-the art machines, designed with high-level functionality.

Increasing our customer base and connection with those customers is a priority. In 2013, we embarked upon a new and effective advertising campaign that showcased the Company’s new brand. We followed up with several successful direct-mail marketing efforts, setting the stage for expanded marketing plans for 2014. We believe that it is imperative that our customers have convenient and easy access to personal financial services that complement their changing lifestyles, whether through electronic or personal delivery. Convenience and mobility have become priorities for a large segment of the population in deciding with whom one will do business, and thus we have made it our priority to provide such convenience.

In recent years, attempts to defraud consumers have continued to grow. For several years we have had mechanisms in place to detect and thwart fraud attempts against our customers before monetary loss. We believe our customers value the service. We are planning an announcement for a new service in 2014 that will go beyond fraud detection on singular deposit accounts and provide full ID protection for families. This service will accompany a complete new line-up of accounts, designed to support the lifestyles and needs of our clientele.

Additionally, in 2014, our business development plan continues to expand and reward more horizontal integration, extending the opportunities for cross selling across departmental lines. We strive to be the financial services provider of choice to those within our market area.

Management is aware of the challenges facing us in the coming year. We are positioned to reward our stockholders with a good return on their investment in our Company while maintaining strong capital and liquidity levels, and we intend to remain in that position. The confidence of our stockholders and the trust of our community are vital to our ongoing success.

2012

Financial Performance Overview

Net income for Juniata in 2012 was $3,648,000, representing a 22.1% decrease as compared to net income for 2011. Earnings per share on a fully diluted basis decreased from $1.10 in 2011 to $0.86 in 2012. The net interest margin, on a fully tax-equivalent basis, decreased from 3.97% in 2011 to 3.68%, in 2012. The ratio of noninterest income (excluding gains on sales of securities and securities impairment charges) to average assets increased by 13 basis points, while the ratio of noninterest expense to average assets increased by 2 basis points to 2.88%.

Summarized below are the components of net income (in thousands of dollars) and the contribution of each to ROA for 2012 and 2011.

	2012						2011
				% of Average						% of Average
				Assets						Assets
Net interest income	$	14,522			3.20	%	$	15,442			3.45	%
Provision for loan losses		(1,411	)		(0.31	)		(364	)		(0.08	)
Customer service fees		1,282			0.28			1,346			0.30
BOLI		450			0.10			478			0.11
Trust fees		379			0.08			388			0.09
Commissions from sales of non-deposit products		353			0.08			273			0.06
Income from unconsolidated subsidiary		249			0.05			263			0.06
Other noninterest income		1,310			0.29			1,192			0.27
Security gains and impairment charges, net		2			0.00			6			0.00
Gains on sale of other assets		567			0.12			-			0.00
Total noninterest income		4,592			1.01			3,946			0.88
Employee expense		(7,286	)		(1.60	)		(6,944	)		(1.55	)
Occupancy and equipment		(1,439	)		(0.32	)		(1,526	)		(0.34	)
Data processing expense		(1,440	)		(0.32	)		(1,326	)		(0.30	)
Director compensation		(234	)		(0.05	)		(284	)		(0.06	)
Professional fees		(362	)		(0.08	)		(462	)		(0.10	)
Taxes, other than income		(438	)		(0.10	)		(496	)		(0.11	)
FDIC insurance premiums		(327	)		(0.07	)		(369	)		(0.08	)
Gain (Loss) on sales of other real estate owned		(34	)		(0.01	)		56			0.01
Intangible amortization		(45	)		(0.01	)		(45	)		(0.01	)
Other noninterest expense		(1,472	)		(0.32	)		(1,406	)		(0.31	)
Total noninterest expense		(13,077	)		(2.88	)		(12,802	)		(2.86	)
Income tax expense		(978	)		(0.22	)		(1,542	)		(0.34	)
Net income	$	3,648			0.80	%	$	4,680			1.05	%
Average assets	$	454,057					$	447,323

Net Interest Income

On average, total loans outstanding in 2012 decreased from 2011 by 3.8%, to $282,282,000. Average yields on loans decreased by 39 basis points in 2012 when compared to 2011. As shown in the preceding Rate – Volume Analysis of Net Interest Income Table 2, the decrease in yield reduced interest income by approximately $966,000, and the decrease in volume further reduced interest income by $799,000, resulting in an aggregate decrease in interest recorded on loans of $1,765,000. While the prime rate has remained unchanged at 3.25% since December of 2008, adjustable rate mortgages scheduled to reprice during 2012 that had not already reached a floor, did so at rates below their previous rates, effectively decreasing the overall yield to the Bank. Additionally, in 2012, with fixed rates offered through the secondary market, it became favorable for some customers with adjustable rate loans to refinance through that program, decreasing both volume and yield in the loan portfolio. Likewise, new and refinanced loans remaining in the portfolio at lower rates during 2012 also contributed to the decrease in overall yield.

During 2012, 68% of the investment portfolio, or $75,816,000, matured or was prepaid. All proceeds from these events and other funds available through deposit growth, totaling $87,319,000, were reinvested in the investment portfolio in the lower rate environment, explaining the decrease in overall yield of the investment securities by 41 basis points. Yields on the investment securities portfolio decreased to 1.64% in 2012, as compared to 2.05% in 2011. Yield declines decreased net interest income by $443,000 when compared to 2011. Average balances of investment securities increased by $20,529,000, and this volume increase accounted for a $351,000 increase in interest income as compared to 2011.

In total, yield on earning assets in 2012 was 4.39% as compared to 4.91% in 2011, a decrease of 52 basis points. On a fully tax equivalent basis, yield on earning assets decreased from 5.09% in 2011 to 4.56% in 2012.

Average interest bearing liabilities increased by $1,745,000 in 2012, as compared to 2011. Within the categories of interest bearing liabilities, deposits increased on average by $910,000, and borrowings increased by $835,000 on average. While interest-bearing deposits increased only slightly in total, there was a shift in types of interest-bearing deposits. During 2012, time deposit balances decreased on average by $10,161,000, while interest-bearing demand and savings accounts increased on average by $11,071,000. This trend had been occurring over the previous several years. Management believes this was the consumers’ response to historical low interest rates. In 2012, time deposits accounted for 53.3% of total interest-bearing deposits. Two years prior, time deposits represented 61.6% of all interest-bearing deposits. Changes in total interest-bearing liabilities reduced interest expense by $162,000 in 2012 as compared to 2011, while decreases in interest rates further reduced interest expense by $782,000. Non-interest bearing liabilities used to fund earning assets included demand deposits, which increased $4,238,000 on average. The percentage of interest earning assets funded by non-interest bearing liabilities was approximately 19.6% in 2012 versus 18.8% in 2011. The total cost to fund earning assets in 2012 was 0.88%, as compared to 1.13% in 2011.

Net interest income was $14,522,000 for 2012, a decrease of $920,000 when compared to 2011, with $644,000 due to rate differences and $276,000 attributed to volume changes.

Provision for Loan Losses

Management performed an analysis of the loan portfolio following the process described in “Application of Critical Accounting Policies” earlier in this discussion, and management determined that a provision of $1,411,000 was appropriate for 2012, an increase of $1,047,000 when compared to 2011 when the total loan loss provision was $364,000. The increased provision was primarily the result of analysis of the values of collateral securing certain impaired loans. In 2012, the provision exceeded net charge-offs by $350,000.

Non-interest Income

In 2012, revenues from fee-generated services (customer service fees derived from deposit accounts, trust relationships and sales of non-deposit products) totaled $2,014,000, representing a slight increase of $7,000, or 0.3%, from 2011 revenues. Customer service fees derived from deposit accounts were $64,000 less in 2012 than in 2011. The decrease was a result of a reduction in overdraft and non-sufficient fund charges to customers. Total fees for trust services decreased by $9,000, or 2.3%, as fees from estate settlements increased by $2,000 in 2012 as compared to 2011, and non-estate fees decreased by $11,000. Variance in fees from estate settlements occurs because estate settlements occur sporadically and are not necessarily consistent year to year. Non-estate fees are repeatable revenues that generally increase and decrease in relation to movements in interest rates as market values of trust assets under management increase or decrease and as new relationships are established. Commissions from sales of non-deposit products increased in 2012, resulting in an $80,000 increase in related fee income.

As a result of the Company’s investment in LCB, $249,000 was recorded as income in 2012, compared to $263,000 in 2011. Earnings on bank-owned life insurance and annuities decreased in 2012 by $28,000, or 5.9%, when compared to the previous year, as crediting rates are reduced.

As a percentage of average assets, non-interest income (excluding securities gains and impairment charges) was 1.01% in 2012 as compared to 0.88% in 2011.

Non-interest Expense

In 2012, total non-interest expense increased by $275,000, or 2.1%, when compared to 2011. Total employee compensation and benefits increased by $342,000, or 4.9% in 2012 over 2011. While total salary expense in 2012 was decreased by $68,000 when compared to salary expense in 2011, the cost to provide medical insurance to employees increased by approximately $194,000, and defined benefit expense increased by $244,000. FDIC insurance premiums for the Bank were reduced in 2012 by $42,000 as compared to 2011 as the full year benefit of the revised FDIC insurance premium formula was realized during 2012. The calculation changed mid-year in 2011 and the premiums for banks are became based upon total assets and risk-based capital levels so that banks such as Juniata Valley Bank with lower levels of risk in the balance sheet are charged at a lower rate. Director compensation costs were $50,000, or 17.7%, lower in 2012 as compared to 2011, as a result of retirements of board and advisory board members. Professional fees decreased by $100,000 in 2012 as compared to 2011 due to the decreased use of various consultants and attorneys during 2012. Other non-interest expense categories that increased in 2012 included losses realized on the sales of foreclosed properties, which added $90,000 to expense, but was partially offset by a reduction in delinquent and foreclosed loan costs, included in other non-interest expense, of $27,000 when compared to 2011.

As a percentage of average assets, non-interest expense was 2.88% in 2012 as compared to 2.86% in 2011.

Income Taxes

Income tax expense for 2012 amounted to $978,000 compared to $1,542,000 in 2011. The effective tax rate was 21.1% in 2012 versus 24.8% in 2011, as tax-exempt income as a percentage of income before tax increased to 30.1% in 2012 from 22.9% in 2011. Average tax-exempt investments and loans as a percentage of average assets were 12.2% and 10.6% in 2012 and 2011, respectively. See Note 15 of Notes to Consolidated Financial Statements for further information on income taxes.

FINANCIAL CONDITION

Balance Sheet Summary

Juniata functions as a financial intermediary and, as such, its financial condition is best analyzed in terms of changes in its uses and sources of funds, and is most meaningful when analyzed in terms of changes in daily average balances. The table below sets forth average daily balances for the last three years and the dollar change and percentage change for the past two years.

Table 3

Changes in Uses and Sources of Funds

(Dollars in thousands)

	2013									2012									2011
	Average			Increase(Decrease)						Average			Increase(Decrease)						Average
	Balance			Amount			%			Balance			Amount			%			Balance
Funding Uses:
Taxable loans	$	258,116		$	(5,058	)		(1.9	)%	$	263,174		$	(16,327	)		(5.8	)%	$	279,501
Tax-exempt loans		18,621			(487	)		(2.5	)		19,108			5,290			38.3			13,818
Taxable securities		91,972			3,490			3.9			88,482			17,824			25.2			70,658
Tax-exempt securities		37,210			781			2.1			36,429			2,705			8.0			33,724
Interest bearing deposits		2,834			(3,873	)		(57.7	)		6,707			3,026			82.2			3,681
Federal funds sold		-			(75	)		(100.0	)		75			(6,515	)		(98.9	)		6,590
Total interest earning assets		408,753			(5,222	)		(1.3	)		413,975			6,003			1.5			407,972
Investment in:
Unconsolidated subsidiary		4,060			181			4.7			3,879			218			6.0			3,661
Low income housing		3,989			3,028			315.1			961			961			-			-
BOLI and annuities		14,616			410			2.9			14,206			724			5.4			13,482
Goodwill and intangible assets		2,321			65			2.9			2,256			(23	)		(1.0	)		2,279
Other non-interest earning assets		18,885			(2,039	)		(9.7	)		20,924			(929	)		(4.3	)		21,853
Unrealized gains on securities		86			(1,303	)		(93.8	)		1,389			459			49.4			930
Less: Allowance for loan losses		(2,679	)		854			(24.2	)		(3,533	)		(679	)		23.8			(2,854	)
Total uses	$	450,031		$	(4,026	)		(0.9	)%	$	454,057		$	6,734			1.5	%	$	447,323
Funding Sources:
Interest bearing demand deposits	$	94,338		$	(2,261	)		(2.3	)%	$	96,599		$	4,702			5.1	%	$	91,897
Savings deposits		59,926			3,663			6.5			56,263			6,369			12.8			49,894
Time deposits under $100,000		129,417			(11,008	)		(7.8	)		140,425			(8,893	)		(6.0	)		149,318
Time deposits over $100,000		32,260			(2,159	)		(6.3	)		34,419			(1,268	)		(3.6	)		35,687
Repurchase agreements		4,332			724			20.1			3,608			574			18.9			3,034
Short-term borrowings		3,199			2,737			592.4			462			207			81.2			255
Other interest bearing liabilities		1,317			57			4.5			1,260			54			4.5			1,206
Total interest bearing liabilities		324,789			(8,247	)		(2.5	)		333,036			1,745			0.5			331,291
Demand deposits		71,006			5,782			8.9			65,224			4,238			6.9			60,986
Other liabilities		4,665			(1,366	)		(22.6	)		6,031			1,340			28.6			4,691
Stockholders' equity		49,571			(195	)		(0.4	)		49,766			(589	)		(1.2	)		50,355
Total sources	$	450,031		$	(4,026	)		(0.9	)%	$	454,057		$	6,734			1.5	%	$	447,323

Overall, total average assets decreased by $4,026,000, or 0.9%, for the year 2013 compared to 2012, following an increase of $6,734,000, or 1.5%, in 2012 over average assets in 2011. The ratio of average earning assets to total average assets was consistent at 91%, in each of the last three years, while the ratio of average interest-bearing liabilities to total average assets dropped from 74% in 2011 to 73% in 2012 and then further to 72% in 2013. Although Juniata’s investment in its unconsolidated subsidiary, investment in a low income elderly housing project and its bank owned life insurance and annuities are not classified as interest-earning assets, income is derived directly from those assets. These instruments have represented 5.0% and 4.2% of total average assets in 2013 and 2012, respectively. A more detailed discussion of the Company’s earning assets and interest bearing liabilities will follow in Sections titled “Loans”, “Investments”, “Deposits” and “Market/Interest Rate Risk”.

Loans

Loans outstanding at the end of each year consisted of the following (in thousands):

	December 31,
	2013		2012		2011			2010			2009
Commercial, financial and agricultural	$	26,281	$	19,296	$	19,417		$	19,911		$	20,783
Real estate - commercial		74,471		69,187		60,774			56,305			51,299
Real estate - construction		19,681		18,092		17,508			13,256			24,578
Real estate - mortgage		140,459		153,122		176,548			190,985			190,811
Obligations of states and political subdivisions		12,702		12,769		8,780			8,984			13,553
Personal		4,204		5,034		6,658			8,688			10,670
Unearned interest		-		-		(4	)		(27	)		(64	)
Total	$	277,798	$	277,500	$	289,681		$	298,102		$	311,630

From year-end 2012 to year-end 2013, total loans outstanding increased by $298,000, following a decrease of $12,181,000 in 2012 when compared to year-end 2011. The following table summarizes how the ending balances (in thousands) changed annually in each of the last three years.

	2013			2012			2011
Beginning balance	$	277,500		$	289,681		$	298,102
Net new loans (repayments)		2,359			(10,097	)		(7,519	)
Loans charged off		(1,431	)		(1,071	)		(282	)
Loans transferred to other real estate owned and other adjustments to carrying value		(630	)		(1,013	)		(620	)
Net change		298			(12,181	)		(8,421	)
Ending balance	$	277,798		$	277,500		$	289,681

The loan portfolio was comprised of approximately 52% consumer loans and 48% commercial loans (including construction) on December 31, 2013 as compared to 57% consumer loans and 43% commercial loans on December 31, 2012. Management believes that diversification in the loan portfolio is important and performs a loan concentration analysis on a quarterly basis. The highest loan concentration by activity type was commercial real estate loans secured by income-producing property whose debt service on this category of loans is reliant upon the cash flow generated by the property. In the aggregate, loans in this category had outstanding balances of $21,236,000 at December 31, 2013, or 47.6% of capital. Components of this concentration group with balances considered for general reserve purposes are as follows:

	Outstanding Balance		% of Capital
Operators of Apartment Buildings	$	9,347,000		21.0	%
Operators of Dwellings other than Apartments		8,508,000		19.1	%
Hotels and Motels		3,381,000		7.6	%
Total	$	21,236,000		47.6	%

Given the reserves allocated to this sector over the past 36 months and the continuing softness in the market, management has assigned an additional concentration risk factor to this group of loans when analyzing the adequacy of the Allowance for Loan Losses. See Note 6 of Notes to Consolidated Financial Statements.

During 2013, there was growth in the commercial real estate and construction lines of business, as well as commercial, financial and agricultural business, primarily as a result of participation opportunities with other banks. This growth was largely offset by the decrease in mortgages and personal loans, as the secondary market continued to offer more appealing fixed rates and longer terms to borrowers. Growth was further offset by payments and charge-downs of non-performing loans. Juniata is willing, able and continues to lend to qualifying businesses and individuals. Management also believes that the economic climate will continue to result in low loan growth. Our business model closely aligns lenders and community office managers’ efforts to effectively develop referrals and existing customer relationships. Continued emphasis is placed on responsiveness and personal attention given to customers, which we believe differentiates the Bank from its competition. Nearly all commercial loans and most residential mortgage loans are either variable or adjustable rate loans, while other consumer loans generally have fixed rates for the duration of the loan

Juniata strives to offer fair, competitive rates and to provide optimal service in order to attract loan growth. Emphasis will continue to be placed upon attracting the entire customer relationship of our borrowers.

The loan portfolio carries the potential risk of past due, non-performing or, ultimately, charged-off loans. The Bank attempts to manage this risk through credit approval standards and aggressive monitoring and collection efforts. Where prudent, the Bank secures commercial loans with collateral consisting of real and/or tangible personal property. Management further believes that non-performing loans will continue to decline in 2014. The Company maintains a dedicated credit administration division, in responise to the need for heightened credit review, both in the loan origination process and in the ongoing risk assessment process. With stringent credit standards in place, Juniata’s lending strategy stresses quality growth, diversified by product. A standardized credit policy is in place throughout the Company, and the credit committee of the Board of Directors reviews and approves all loan requests for amounts that exceed management’s approval levels. The Company makes credit judgments based on a customer’s existing debt obligations, collateral, ability to pay and general economic trends. See Note 2 of Notes to Consolidated Financial Statements.

The allowance for loan losses has been established in order to absorb probable losses on existing loans. A quarterly provision or credit is charged to earnings to maintain the allowance at adequate levels. Charge-offs and recoveries are recorded as adjustments to the allowance. The allowance for loan losses at December 31, 2013 was 0.82% of total loans, net of unearned interest, as compared to 1.18% of total loans, net of unearned interest, at the end of 2012. The allowance decreased $994,000 when compared to December 31, 2012, as a result of charge-offs of $1,026,000 that had been previously reserved to carry impaired loans at fair value. Net charge-offs for 2013 and 2012 were 0.51% and 0.38% of average loans, respectively.

At December 31, 2013, non-performing loans (as defined in Table 4 below), as a percentage of the allowance for loan losses, were 305.1% as compared to 292.2% at December 31, 2012. Non-performing loans were 2.51% of loans as of December 31, 2013, and 3.46% of loans as of December 31, 2012. Management believes that the decreasing levels of nonperforming loans in 2012 and 2013 will continue into 2014. Of the $6,978,000 of non-performing loans at December 31, 2013, $6,968,000, or 99%, is collateralized with real estate and $10,000 is collateralized with other assets. As of December 31, 2013, there was one restructured loan delinquent in excess of 90 days with respect to the terms of the restructuring as of December 31, 2013 that was included with “accruing restructured loans” in Table 4. This loan has a balance of $61,000 and is in the process of foreclosure.

Table 4

Non-Performing Loans

	2013		2012		2011		2010		2009
	(In thousands)
Nonaccrual loans	$	5,952	$	8,846	$	7,947	$	5,964	$	2,629
Accruing loans past due 90 days or more		251		742		2,743		1,007		1,369
Accruing restructured loans		775		-		-		-		-
Total non-performing loans	$	6,978	$	9,588	$	10,690	$	6,971	$	3,998

Loans on which the accrual of interest has been discontinued are designated as non-accrual loans. Accrual of interest on loans is generally discontinued when the contractual payment of principal or interest has become 90 days past due or reasonable doubt exists as to the full, timely collection of principal or interest. However, it is the Company’s policy to continue to accrue interest on loans over 90 days past due as long as (1) they are guaranteed or well secured and (2) there is an effective means of timely collection in process. When a loan is placed on non-accrual status, all unpaid interest credited to income in the current year is reversed against current period income, and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest received on nonaccrual loans generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, accruals are resumed on loans only when the obligation is brought fully current with respect to interest and principal, has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt. The Company’s nonaccrual and charge-off policies are the same, regardless of loan type. During 2013, gross interest income that would have been recorded if loans in nonaccrual status had been current was $578,000, of which $88,000 was collected and included in net income.

Allowance for Loan Losses

The amount of allowance for loan losses is determined through a critical quantitative and qualitative analysis performed by management that includes significant assumptions and estimates. It is maintained at a level deemed sufficient to absorb probable estimated losses within the loan portfolio, and supported by detailed documentation. To assess potential credit weaknesses, it is critical to analyze observable trends that may be occurring,.

Management systematically monitors the loan portfolio and the adequacy of the allowance for loan losses on a quarterly basis to provide for probable losses inherent in the portfolio. The Bank’s methodology for maintaining the allowance is highly structured and contains two components; a component for loans that are deemed to be impaired and a component for contingencies.

Component for impaired loans:

A loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loans and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis by the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent.

The estimated fair values of substantially all of the Company’s impaired loans are measured based on the estimated fair value of the loan’s collateral. For commercial loans secured with real estate, estimated fair values are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the current appraisal and the condition of the property. Appraised values may be discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include the estimated costs to sell the property. For commercial loans secured by non-real estate collateral, estimated fair values are determined based on the borrower’s financial statements, inventory reports, aging accounts receivable, equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets. For such loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The Company generally does not separately identify individual consumer segment loans for impairment disclosures, unless such loans are subject to a restructuring agreement.

Loans whose terms are modified are classified as troubled debt restructurings if the Company grants borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a troubled debt restructuring generally involve a below-market interest rate based on the loan’s risk characteristics or an extension of a loan’s stated maturity date. Nonaccrual troubled debt restructurings are restored to accrual status if principal and interest payments, under the modified terms, are current for a sustained period of time after modification. Loans classified as troubled debt restructurings are designated as impaired.

As of December 31, 2013, 59 loans, with aggregate outstanding balances of $8,049,000, were evaluated for impairment. A collateral analysis was performed on each of these 59 loans in order to establish a portion of the reserve needed to carry impaired loans at no higher than fair value. As a result, five loans were determined to have insufficient collateral and specific reserves were established for each of the five impaired loans, totaling $164,000.

Component for contingencies:

A contingency is an existing condition, or set of circumstances, involving uncertainty as to possible gain or loss to the Company that will ultimately be resolved when one or more future events occur or fail to occur. These conditions may be considered in relation to individual loans or in relation to groups of similar types of loans. If the conditions are met, a provision is made even though the particular loans that are uncollectible may not be identifiable.

The component of the allowance for contingencies relates to other loans that have been segmented into risk rated categories as follows:

· Commercial, financial and agricultural

· Real estate – commercial

· Real estate - construction

· Real estate – mortgage

· Obligations of states and political subdivisions

· Personal

Contingency allowance evaluation consists of several key elements. The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated quarterly or when credit deficiencies arise, such as delinquent loan payments. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans classified as special mention have potential weaknesses that deserve management’s close attention. If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects. Loans classified as substandard have one or more well-defined weaknesses that jeopardize the liquidation of the debt. Substandard loans include loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as a loss are considered uncollectible and are charged to the allowance for loan losses. Loans not classified are rated pass. Specific reserves may be established for larger, individual classified loans as a result of this evaluation, as discussed above. Remaining loans are categorized into large groups of smaller balance homogeneous loans and are collectively evaluated for impairment. This computation is generally based on historical loss experience adjusted for qualitative factors. The historical loss experience is averaged over a ten-year period for each of the portfolio segments. The ten-year timeframe was selected in order to capture activity over a wide range of economic conditions and has been consistently used for the past seven years. The qualitative risk factors are reviewed for relevancy each quarter and include:

· 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;

· Nature and volume of the portfolio and terms of loans;

· Experience, ability and depth of lending and credit management and staff;

· Volume and severity of past due, classified and nonaccrual loans, as well as other loan modifications;

· Existence and effect of any concentrations of credit and changes in the level of such concentrations; and

· Effect of external factors, including competition.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation.

A summary of activity in the allowance for loan loss for the last five years (in thousands) is shown below. The level of net charge-offs in 2013 was the highest in the most recent five year period. The area most affected by charge-offs in each of the five years presented was real estate – mortgages, whose balances accounted for approximately 50% of the total loan portfolio at December 31, 2013. In 2013, the Company recorded net charge-offs of $1,409,000. Of the 2013 net charge-offs, $1,026,000 was due to specific loss confirming events which were the subjects of specific reserves established in 2012. Due to charge-offs and successful resolution of other troubled debt, non-performing loans decreased by $2,610,000, or 27.2%, at December 31, 2013 compared to December 31, 2012. As such, the level of allowance needed to adequately reserve for loan losses decreased. Management’s analysis indicated that an adequate loan loss allowance would be $2,287,000 at December 31, 2013.

	Years Ended December 31,
	2013			2012			2011			2010			2009
Balance of allowance - beginning of period	$	3,281		$	2,931		$	2,824		$	2,719		$	2,610
Loans charged off:
Commercial, financial and agricultural		4			25			18			134			47
Real estate - commercial		-			-			37			-			32
Real estate - construction		117			193			-			-			-
Real estate - mortgage		1,281			852			205			482			343
Personal		29			1			22			38			107
Total charge-offs		1,431			1,071			282			654			529
Recoveries of loans previously charged off:
Commercial, financial and agricultural		13			8			2			-			-
Real estate - mortgage		-			-			10			-			-
Personal		9			2			13			18			11
Total recoveries		22			10			25			18			11
Net charge-offs		1,409			1,061			257			636			518
Provision for loan losses		415			1,411			364			741			627
Balance of allowance - end of period	$	2,287		$	3,281		$	2,931		$	2,824		$	2,719
Ratio of net charge-offs during period to average loans outstanding		0.51	%		0.38	%		0.09	%		0.21	%		0.17	%

The following tables show how the allowance for loan losses is allocated among the various types of outstanding loans and the percent of loans by type to total loans.

	Allocation of the Allowance for Loan Losses (in thousands)
	December 31,
	2013		2012		2011		2010		2009
Commercial, financial and agricultural	$	253	$	179	$	195	$	163	$	157
Real estate - commercial		534		463		455		442		426
Real estate - construction		212		202		442		336		324
Real estate - mortgage		1,246		2,387		1,771		1,810		1,743
Obligations of states and political subdivisions		-		-		-		-		-
Personal		42		50		68		73		69
	$	2,287	$	3,281	$	2,931	$	2,824	$	2,719

	Percent of Loan Type to Total Loans
	2013			2012			2011			2010			2009
Commercial, financial and agricultural		9.5	%		7.0	%		6.7	%		6.7	%		6.7	%
Real estate - commercial		26.8	%		24.9	%		21.0	%		18.9	%		16.5	%
Real estate – construction		7.1	%		6.5	%		6.0	%		4.4	%		7.9	%
Real estate - mortgage		50.5	%		55.2	%		61.0	%		64.1	%		61.2	%
Obligations of states and political subdivisions		4.6	%		4.6	%		3.0	%		3.0	%		4.3	%
Personal		1.5	%		1.8	%		2.3	%		2.9	%		3.4	%
		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Investments

Total investments, defined to include all interest earning assets except loans (i.e. investment securities available for sale (at market value), federal funds sold, interest bearing deposits, Federal Home Loan Bank stock and other interest-earning assets), totaled $128,305,000 on December 31, 2013, representing an increase of $3,258,000 when compared to year-end 2012. The following table summarizes how the ending balances (in thousands) changed annually in each of the last three years.

	2013			2012			2011
Beginning balance	$	125,047		$	116,177		$	95,874
Purchases of investment securities		45,446			87,319			87,131
Calls and maturities of investment securities		(38,973	)		(75,816	)		(56,034	)
Adjustment in market value of AFS securities		(2,325	)		(34	)		630
Amortization/Accretion		(440	)		(412	)		(369	)
Federal Home Loan Bank stock, net change		241			26			(388	)
Federal funds sold, net change		-			-			(12,300	)
Interest bearing deposits with others, net change		(691	)		(2,213	)		1,633
Net change		3,258			8,870			20,303
Ending balance	$	128,305		$	125,047		$	116,177

On average, investments increased slightly, by $323,000, or 0.2%, during 2013, following an increase of $17,040,000, or 14.9%, during 2012. The increase in 2012 was due to deposit growth outpacing loan growth with the excess funding invested in short-term debt securities.

The investment area is managed according to internally established guidelines and quality standards. Juniata segregates its investment securities portfolio into two classifications: those held to maturity and those available for sale. Juniata classifies all new marketable investment securities as available for sale, and currently holds no securities in the held to maturity or trading classifications. At December 31, 2013, the market value of the entire securities portfolio was below amortized cost by $1,138,000 as compared to December 31, 2012, when market value was greater than amortized cost by $1,185,000. The weighted average maturity of the investment portfolio was 4.1 years on December 31, 2013 versus 3.7 years on December 31, 2012. The weighted average maturity has remained short in order to achieve a desired level of liquidity. Table 5, “Maturity Distribution”, in this Management’s Discussion and Analysis of Financial Condition shows the remaining maturity or earliest possible repricing for investment securities. The following table sets forth the maturities of securities (in thousands) and the weighted average yields of such securities by contractual maturities or call dates. Yields on obligations of states and public subdivisions are presented on a tax-equivalent basis.

	December 31, 2013					December 31, 2012					December 31, 2011
Securities			Weighted					Weighted					Weighted
	Fair		Average			Fair		Average			Fair		Average
Type and maturity	Value		Yield			Value		Yield			Value		Yield
Obligations of U.S. Government agencies and corporations
Within one year	$	4,192		0.77	%	$	7,996		2.10	%	$	2,947		1.94	%
After one year but within five years		47,578		1.26	%		42,796		1.19	%		52,202		1.55	%
After five years but within ten years		26,508		1.50	%		22,025		1.10	%		12,539		1.49	%
		78,278		1.32	%		72,817		1.26	%		67,688		1.55	%
Obligations of state and political subdivisions
Within one year		8,314		1.75	%		10,505		2.13	%		11,154		2.39	%
After one year but within five years		26,098		1.34	%		29,809		1.54	%		22,289		2.36	%
After five years but within ten years		7,182		2.26	%		4,936		2.61	%		4,147		3.23	%
After ten years		338		1.20	%		726		1.35	%		-		-
		41,932		1.58	%		45,976		1.78	%		37,590		3.79	%
Corporate Notes and Other
Within one year		-		-			-		-			1,004		4.00	%
		-		-			-		-			1,004		4.00	%
Mortgage-backed securities
Within one year		878		2.86	%		-		-			-		-
After one year but within five years		1,003		2.63	%		1,428		2.46	%		1,878		2.84	%
After five years but within ten years		2,588		2.09	%		1,098		1.24	%		2,231		2.26	%
		4,469		2.36	%		2,526		1.93	%		4,109		2.52	%
Equity securities		1,367					1,019					890
	$	126,046				$	122,338				$	111,281

Bank Owned Life Insurance and Annuities

The Company periodically insures the lives of certain bank officers in order to provide split-dollar life insurance benefits to some key officers and to offset the cost of providing post-retirement benefits through non-qualified plans. Some annuities are also owned to provide cash streams that match certain post-retirement liabilities. See Note 8 of Notes to Consolidated Financial Statements. The following table summarizes how the ending balances (in thousands) of these instruments changed annually in each of the last three years.

	2013		2012		2011
Beginning balance	$	14,402	$	14,069	$	13,568
Bank-owned life insurance		426		318		496
Annuities		20		15		5
Net change		446		333		501
Ending balance	$	14,848	$	14,402	$	14,069

Investment in Unconsolidated Subsidiary

The Company owns 39.16% of the outstanding common stock of Liverpool Community Bank (LCB), Liverpool, PA. This investment is accounted for under the equity method of accounting. The investment is being carried at $4,172,000 as of December 31, 2013. The Company increases its investment in LCB for its share of earnings and decreases its investment by any dividends received from LCB. The investment is evaluated quarterly for impairment. A loss in value of the investment which is determined to be other than a temporary decline would be recognized as a loss in the period in which such determination is made. Evidence of a loss in value might include, but would not necessarily be limited to, absence of an ability to recover the carrying amount of the investment or inability of LCB to sustain an earnings capacity which would justify the current carrying value of the investment. The carrying amount at December 31, 2013 represented an increase of $172,000 when compared to December 31, 2012. In connection with this investment, two representatives of Juniata serve on the Board of Directors of LCB.

Goodwill and Intangible Assets

In 2006, the Company acquired a branch office in Richfield, PA. Completing this purchase was in line with a strategic goal of the Company to expand its base into contiguous market areas within rural Pennsylvania. Included in the purchase price of the branch was goodwill of $2,046,000. Additionally, core deposit intangible was acquired and had carrying values of $119,000 and $164,000, as of December 31, 2013 and December 31, 2012, respectively. The core deposit intangible is being amortized over a ten-year period on a straight-line basis. Goodwill is not being amortized, but is measured annually for impairment.

The Company originates and sells residential mortgage loans into the secondary market, but retains the servicing on the loans. The mortgage servicing rights are valued based on the present value of estimated future cash flows on pools of mortgages stratified by rate and maturity date. The computed value is carried as an intangible asset. As of December 31, 2013, the fair value of mortgage servicing rights was $167,000, compared to $98,000 on December 31, 2012.

Deferred Taxes

The Company accounts for income taxes under the asset/liability method. Deferred tax assets and liabilities are recognized for the future consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as operating loss and tax credit carry-forwards, if applicable. A valuation allowance is established against deferred tax assets when, in the judgment of management, it is more likely than not that such deferred tax assets will not become realizable. Management has determined that there was no need for a valuation allowance for deferred taxes as of December 31, 2013 and 2012. As of December 31, 2013 and 2012, the Company recorded a net deferred tax asset of $602,000 and $1,137,000, respectively, which was carried as a non-interest earning asset. Significant components of the decrease of $535,000 included:

1. A change in the funded status of the Company’s defined benefit plan, decreasing the deferred tax asset by $663,000,

2. A $361,000 decrease in the deferred tax asset relating to the allowance for loan losses,

3. An increase of $790,000 in the deferred tax asset relating to unrealized losses arising in the available-for-sale securities portfolio.

The remainder of the difference was due to the various other changes in gross temporary tax differences. See Note 15 of Notes to Consolidated Financial Statements.

Other Non-interest Earning Assets

The following table summarizes the components of the non-interest earning asset category, and how the ending balances (in thousands) changed annually in each of the last three years.

	2013			2012			2011
Beginning balance	$	28,893		$	24,386		$	25,183
Cash and due from banks		(5,691	)		2,187			(684	)
Premises and equipment, net		(142	)		(238	)		(357	)
Other real estate owned		(147	)		1			15
Investment in low income housing		194			3,403			393
Other receivables and prepaid expenses, including deferred tax assets		507			(846	)		(164	)
Net change		(5,279	)		4,507			(797	)
Ending balance	$	23,614		$	28,893		$	24,386

Deposits

At December 31, 2013, total deposits were $379,645,000, a decrease of $7,106,000 from total deposits on December 31, 2012. From year-end 2011 to year-end 2012, total deposits were essentially unchanged. The following table summarizes how the ending balances (in thousands) changed annually in each of the last three years.

	2013			2012			2011
Beginning balance	$	386,751		$	386,665		$	376,790
Demand deposits		3,293			6,567			4,055
Interest bearing demand deposits		(482	)		(2,707	)		11,678
Savings deposits		4,379			5,667			3,603
Time deposits, $100,000 and greater		(2,012	)		(26	)		(1,066	)
Time deposits, other		(12,284	)		(9,415	)		(8,395	)
Net change		(7,106	)		86			9,875
Ending balance	$	379,645		$	386,751		$	386,665

The following table shows (in thousands of dollars) the comparison of average core deposits and average time deposits as a percentage of total deposits for each of the last three years.

	Changes in Deposits
	(Dollars in thousands)
	2013								2012								2011
	Average		Increase(Decrease)						Average		Increase(Decrease)						Average
	Balance		Amount			%			Balance		Amount			%			Balance
Core transaction deposits:
Indexed money market	$	38,920	$	(3,073	)		(7.3	)%	$	41,993	$	3,370			8.7	%	$	38,623
Interest bearing demand		55,418		812			1.5			54,606		1,332			2.5			53,274
Savings		59,926		3,663			6.5			56,263		6,369			12.8			49,894
Demand		71,006		5,782			8.9			65,224		4,238			6.9			60,986
Total		225,270		7,184			3.3			218,086		15,309			7.5			202,777
Time deposits:
$100,000 and greater		32,260		(2,159	)		(6.3	)		34,419		(1,268	)		(3.6	)		35,687
Other		129,417		(11,008	)		(7.8	)		140,425		(8,893	)		(6.0	)		149,318
Total		161,677		(13,167	)		(7.5	)		174,844		(10,161	)		(5.5	)		185,005
Total deposits	$	386,947	$	(5,983	)		(1.5	)%	$	392,930	$	5,148			1.3	%	$	387,782

Average deposits decreased $5,983,000, or 1.5%, to $386,947,000 in 2013 following an increase in 2012 of $5,148,000, or 1.3%, to $392,930,000. Core transaction accounts increased by 3.3% and 7.5%, respectively in 2013 and 2012. We believe that over the past two years, because of the market uncertainties that accompany uncertain economic periods, investors have moved balances of available funds into safe, FDIC-insured banking institutions and particularly into liquid transaction accounts. In both 2013 and 2012 however, funds invested in time deposits have declined. Due to the sustained low-interest rate environment, we believe many investors are seeking higher yields than are available in time deposit products. We are experiencing a higher number of sales in our wealth management (non-deposit) products and are seeing investors seeking dividend yields in the stock market as well.

The consumer continues to have a need for transaction accounts, and the Bank is continuing to focus on that need in order to build deposit relationships. Our products are geared toward low-cost convenience and ease for the customer. The Company’s strategy is to aggressively seek to grow customer relationships by staying in touch with customers’changing needs and new methods of connectivity, in an effort to increase deposit (and loan) market share.

The Bank competes in the marketplace with many sources that offer products that directly compete with traditional banking products. In keeping with our desire to provide our customers with a full array of financial services, we supplement the services traditionally offered by our Trust Department by staffing our community offices with wealth management consultants that are licensed and trained to sell variable and fixed rate annuities, mutual funds, stock brokerage services and long-term care insurance. Although the sale of these products can reduce the Bank’s deposit levels, these products offer solutions for our customers that traditional bank products cannot and allow us to more completely service our community. Fee income from the sale of non-deposit products (primarily annuities and mutual funds) was $375,000 and $353,000 in 2013 and 2012, respectively, representing approximately 8.3% and 7.6%, respectively, of total pre-tax income.

Other Interest Bearing Liabilities

Because Juniata funds its needs primarily with local deposits, high levels of debt are not necessary, as can be seen in the table below. Occasionally, there is a need for short term, overnight borrowings that are temporary in nature, and there are instances where long-term debt may be used in matched-funding arrangements for particular loans. Juniata’s average balances for all borrowings increased in 2013 by $3,518,000, or 66.0%, following an increase of $835,000, or 18.6%, in 2012 as compared to 2011. The increase in 2013 was related to the Company’s use of short-term borrowings to fund loan and investment growth. The increase in 2012 was primarily due to the increase in repurchase agreement balances.

			Changes in Borrowings
			(Dollars in thousands)
	2013							2012							2011
	Average		Increase(Decrease)					Average		Increase(Decrease)					Average
	Balance		Amount		%			Balance		Amount		%			Balance
Repurchase agreements	$	4,332	$	724		20.1	%	$	3,608	$	574		18.9	%	$	3,034
Short-term borrowings		3,199		2,737		592.4			462		207		81.2			255
Other interest bearing liabilities		1,317		57		4.5			1,260		54		4.5			1,206
	$	8,848	$	3,518		66.0	%	$	5,330	$	835		18.6	%	$	4,495

Pension Plan

Through its noncontributory pension plan, the Company provides pension benefits to substantially all of its employees that were employed as of December 31, 2007. Benefits are provided based upon an employee’s years of service and compensation through December 31, 2012. Effective December 31, 2012, the defined benefit retirement plan was amended to cease future service accruals after that date (frozen). ASC Topic 715 gives guidance on the allowable pension expense that is recognized in any given year. In determining the appropriate amount of pension expense to recognize, management must make subjective assumptions relating to amounts and rates that are inherently uncertain. Please refer to Note 20 of Notes to Consolidated Financial Statements.

Stockholders’ Equity

Total stockholders’ equity decreased by $313,000 in 2013. The decrease in stockholders’ equity resulted primarily from the decrease in fair values of investment securities and funds used for treasury stock repurchases. Offsetting this decrease was the reduction in unamortized expense related to the defined benefit retirement plan and undistributed net income. The following table summarizes how the components of equity (in thousands) changed annually in each of the last three years.

	2013			2012			2011
Beginning balance	$	50,297		$	49,720		$	49,976
Net income		4,001			3,648			4,680
Dividends		(3,707	)		(3,724	)		(3,648	)
Stock-based compensation		30			25			26
Repurchase of stock, net of re-issuance		(397	)		(209	)		(523	)
Net change in unrealized security gains		(1,551	)		(23	)		424
Defined benefit retirement plan adjustments, net of tax		1,311			860			(1,215	)
Net change		(313	)		577			(256	)
Ending balance	$	49,984		$	50,297		$	49,720

On average, stockholders' equity in 2013 was $49,571,000, essentially unchanged from the average in 2012 of $49,766,000. At December 31, 2013, Juniata held 549,560 shares of stock in treasury at a cost of $10,591,000 as compared to 527,465 in 2012 at a cost of $10,200,000. These increases are a result of the Company’s stock repurchase program (see Note 16 of Notes to Consolidated Financial Statements). Return on average equity increased to 8.07% in 2013 from 7.33% in 2012.

The Company periodically repurchases shares of its common stock under the share repurchase program approved by the Board of Directors. In September of 2008, the Board of Directors authorized the repurchase of an additional 200,000 shares of its common stock through its share repurchase program. The program will remain authorized until all approved shares are repurchased, unless terminated by the Board of Directors. Repurchases have typically been through open market transactions and have complied with all regulatory restrictions on the timing and amount of such repurchases. Shares repurchased have been added to treasury stock and accounted for at cost. These shares may be periodically reissued for stock option exercises, employee stock purchase plan purchases and to fulfill dividend reinvestment program needs. During 2013, 24,918 shares were repurchased in conjunction with the current program. Remaining shares authorized for repurchase were 43,475 as of December 31, 2013.

In both 2013 and 2012, Juniata declared dividends of $0.88 per common share. The per-share common dividend in 2011 was $0.86. (See Note 16 of Notes to Consolidated Financial Statements regarding restrictions on dividends from the Bank to the Company.) The dividend payout ratio was 92.65% and 102.08% in 2013 and 2012, respectively. In January 2014, the Board of Directors declared a dividend of $0.22 per share for the first quarter of 2014 to stockholders of record on February 14, 2014, payable on March 3, 2014.

Juniata’s book value per share at December 31, 2013 was 11.91, as compared to $11.92 and $11.76 at December 31, 2012 and 2011, respectively. Juniata’s average equity to assets ratio for 2013, 2012 and 2011 was 11.01%, 10.96% and 11.26%, respectively. Refer also to the Capital Risk section in the Asset / Liability management discussion that follows.

Asset / Liability Management Objectives

Management believes that optimal performance is achieved by maintaining overall risks at a low level. Therefore, the objective of asset/liability management is to control risk and produce consistent, high quality earnings independent of changing interest rates. The Company has identified five major risk areas discussed below:

· Liquidity Risk

· Capital Risk

· Market / Interest Rate Risk

· Investment Portfolio Risk

· Economic Risk

Liquidity Risk

Through liquidity risk management, we seek to maintain our ability to readily meet commitments to fund loans, purchase assets and other securities and repay deposits and other liabilities. This area also includes the ability to manage unplanned changes in funding sources and recognize and address changes in market conditions that affect the quality of liquid assets. Juniata has developed a methodology for assessing its liquidity risk through an analysis of its primary and total liquidity sources. Three types of liquidity sources are (1) asset liquidity, (2) liability liquidity and (3) off-balance sheet liquidity.

Asset liquidity refers to assets that we are quickly able to convert into cash, consisting of cash, federal funds sold and securities. Short-term liquid assets generally consist of federal funds sold and securities maturing over the next twelve months. The quality of our short-term liquidity is very good: as federal funds are unimpaired by market risk and as bonds approach maturity, their value moves closer to par value. Liquid assets tend to reduce earnings when there is not an immediate use for such funds, since normally these assets generate income at a lower rate than loans or other longer-term investments.

Liability liquidity refers to funding obtained through deposits. The largest challenge associated with liability liquidity is cost. Juniata’s ability to attract deposits depends primarily on several factors, including sales effort, competitive interest rates and other conditions that help maintain consumer confidence in the stability of the financial institution. Large certificates of deposit, public funds and brokered deposits are all acceptable means of generating and providing funding. If the cost is favorable or fits the overall cost structure of the Bank, then these sources have many benefits. They are readily available, come in large block size, have investor-defined maturities and are generally low maintenance.

Off-balance sheet liquidity is closely tied to liability liquidity. Sources of off-balance sheet liquidity include Federal Home Loan Bank borrowings, repurchase agreements and federal funds lines with correspondent banks. These sources provide immediate liquidity to the Bank. They are available to be deployed when a need arises. These instruments also come in large block sizes, have investor-defined maturities and generally require low maintenance.

“Available liquidity” encompasses all three sources of liquidity when determining liquidity adequacy. It results from the Bank’s access to short-term funding sources for immediate needs and long-term funding sources when the need is determined to be permanent. Management uses both on-balance sheet liquidity and off-balance sheet liquidity to manage its liquidity position. The Company’s liquidity strategy is to maintain an adequate volume of high quality liquid instruments to facilitate customer liquidity demands. Management also maintains sufficient capital, which provides access to the liability and off-balance sheet sides of the balance sheet for funding. An active knowledge of debt funding sources is important to liquidity adequacy.

Contingency funding management involves maintaining contingent sources of immediate liquidity. Management believes that it must consider an array of available sources in terms of volume, maturity, cash flows and pricing. To meet demands in the normal course of business or for contingency, secondary sources of funding such as public funds deposits, collateralized loans, sales of investment securities or sales of loan receivables are considered.

It is the Company’s policy to maintain both a primary liquidity ratio and a total liquidity ratio of at least 10% of total assets. The primary liquidity ratio equals liquid assets divided by total assets, where liquid assets equal the sum of cash and due from banks, federal funds sold, interest-bearing deposits with other banks and available for sale securities. Total liquidity is comprised of all components noted in primary liquidity plus securities classified as held-to-maturity, if any. If either of these liquidity ratios falls below 10%, it is the Company’s policy to increase liquidity in a timely manner to achieve the required ratio.

It is the Company’s policy to maintain available liquidity at a minimum of 10% of total assets and contingency liquidity at a minimum of 7.5% of total assets.

Juniata is a member of the Federal Home Loan Bank (FHLB) of Pittsburgh, which provides short-term liquidity. The Bank uses this vehicle to satisfy temporary funding needs throughout the year. The Company had overnight advances of $8,400,000 on December 31, 2013 and $1,600,000 on December 31, 2012.

The Bank’s maximum borrowing capacity with the FHLB is $135,454,000 at December 31, 2013. In order to borrow additional amounts in excess of $2,021,000, the FHLB would require the Bank to purchase additional FHLB Stock. The FHLB is a source of both short-term and long-term funding. The Bank must maintain sufficient qualifying collateral to secure all outstanding advances.

Juniata needs to have liquid resources available to fulfill contractual obligations that require future cash payments. The table below summarizes the Company’s significant contractual obligations to third parties (in thousands of dollars), by type, that are fixed and determined at December 31, 2013. Further discussion of the nature of each obligation is included in the referenced note to the consolidated financial statements.

Contractual Obligations

		Payments Due by Period
						One to		Three to		More than
	Note			Less than		Three		Five		Five
	Reference	Total		One Year		Years		Years		Years
Certificates of deposits	12	$	154,406	$	70,197	$	61,785	$	17,044	$	5,380
Federal Funds borrowed and security repurchase agreements	13		13,797		13,797		-		-		-
Operating lease obligations	14		337		121		172		44		-
Other long-term liabilities 3rd party data processor contract	23		2,376		528		1,056		792		-
Supplemental retirement and deferred compensation	20		3,261		362		545		384		1,970
		$	174,177	$	85,005	$	63,558	$	18,264	$	7,350

The schedule of contractual obligations (above) excludes expected defined benefit retirement payments that will be paid from the plan assets, as referenced in Note 20 of Notes to Consolidated Financial Statements.

Capital Risk

The Company maintains sufficient core capital to protect depositors and stockholders and to take advantage of business opportunities while ensuring that it has resources to absorb the risks inherent in the business. Federal banking regulators have established capital adequacy requirements for banks and bank holding companies based on risk factors, which require more capital backing for assets with higher potential credit risk than assets with lower credit risk. All banks and bank holding companies are currently required to have a minimum of 4% of risk adjusted assets in Tier I capital and 8% of risk adjusted assets in Total capital (Tier I and Tier II capital). As of December 31, 2013 and 2012, Juniata's Tier I capital ratio was 17.13% and 17.14%, respectively, and its Total capital ratio was 17.97% and 18.28%, respectively. Additionally, banking organizations must maintain a minimum Tier I capital to total average asset (leverage) ratio of 3%. This 3% leverage ratio is a minimum for the top-rated banking organizations without any supervisory, financial or operational weaknesses or deficiencies. Other banking organizations are required to maintain leverage capital ratios 100 to 200 basis points above the minimum depending on their financial condition. At December 31, 2013 and 2012, Juniata's leverage ratio was 11.04% and 10.96%, respectively, with a required leverage ratio of 4% (see Note 16 of Notes to the Consolidated Financial Statements).

31

In December 2010, the Basel Committee released its final framework for strengthening international capital and liquidity regulation, officially identified by the Basel Committee as “Basel III”. The federal banking regulatory agencies have proposed regulations implementing the Basel III capital standards. The Basel III proposals would change required levels of capital and how banks calculate their regulatory capital and revise and harmonize the rules for calculating risk-weighted assets to enhance risk sensitivity and address weaknesses that have been identified over the past several years. The proposals would increase the minimum levels of required capital, narrow the definition of capital, and increase the risk weights for various asset classes. In July, 2013, the Federal Reserve Board approved the final rules (the “Basel III Rules”) which substantially revise the risk-based capital requirements applicable to bank holding companies and depository institutions. The new rules, which will begin phase-in starting January 1, 2015, with final phase-in completed by January 1, 2019:

· Create a new minimum Common Equity Tier I capital ratio of 4.50% of risk-weighted assets and a minimum Tier 1 capital ratio of 6.00% of risk-weighted assets;

· Continue the current minimum Total Capital Ratio at 8.00% of risk-weighted assets and the minimum Tier 1 Leverage Capital Ratio at 4.00% of average assets;

· Institute a ”capital conservation buffer” of 2.50% above the minimum risk-based capital requirements, which, if not maintained, restricts an institution from making capital distributions and certain discretionary bonus payments;

· Revised the definition of capital such that certain non-qualifying capital instruments, including cumulative preferred stock and trust preferred securities, will be excluded as a component of Tier 1 Capital for institutions of the Company’s size; and

· Expands the risk-weightings categories and weights for assets and off balance sheet exposures to a much larger and more risk-sensitive number of categories, depending on the nature of the assets, and results in higher risk weights for a variety of asset categories.

As a result of the new capital conservation buffer rules, once in effect, if the Company’s bank subsidiary (The Juniata Valley Bank) fails to maintain the required minimum capital conservation buffer, the Company may be unable to obtain capital distributions from it, which could negatively impact the Company’s ability to pay dividends, service debt obligations or repurchase common stock. In addition, such a failure could result in a restriction on the Company’s ability to pay certain cash bonuses to executive officers, negatively impacting the Company’s ability to retain key personnel.

As of December 31, 2013, the Company believes its current capital levels would meet the fully phased-in minimum capital requirements, including capital conservation buffer, as prescribed in the U.S. Basel III Capital Rules.

Market / Interest Rate Risk

Market risk is the exposure to economic loss that arises from changes in the values of certain financial instruments. The types of market risk exposures generally faced by financial institutions include equity market price risk, interest rate risk, foreign currency risk and commodity price risk. Due to the nature of its operations, only equity market price risk and interest rate risk are significant to the Company.

Equity market price risk is the risk that changes in the values of equity investments could have a material impact on the financial position or results of operations of the Company. The Company’s equity investments consist of common stocks of publicly traded financial institutions.

32

Declines and volatility in the values of financial institution stocks have significantly reduced the likelihood of realizing significant gains in the near-term. Although the Company has realized occasional gains from this portfolio in the past, the primary objective of the portfolio is to achieve value appreciation in the long term while earning consistent, attractive after-tax yields from dividends. The carrying value of the financial institutions stocks accounted for 0.3% of the Company’s total assets as of December 31, 2013. Management performs an impairment analysis on the entire investment portfolio, including the financial institutions stocks on a quarterly basis. No “other-than-temporary” impairment was identified or recorded on stocks in 2013, 2012 or 2011, however, there is no assurance that declines in market values of the common stock portfolio in the future will not result in subsequent “other-than-temporary” impairment charges, depending upon facts and circumstances present.

The equity investments in the Corporation’s portfolio had an adjusted cost basis of approximately $1,055,000 and a fair value of $1,367,000 at December 31, 2013. Net unrealized gains in this portfolio were $312,000 at December 31, 2013.

In addition to its equity portfolio, the Company’s investment management and trust services revenue could be impacted by fluctuations in the securities markets. A portion of the Company’s trust revenue is based on the value of the underlying investment portfolios. If securities values decline, the Company’s trust revenue could be negatively impacted.

Interest rate risk creates exposure in two primary areas. First, changes in rates have an impact on the Company’s liquidity position and could affect its ability to meet obligations and continue to grow. Second, movements in interest rates can create fluctuations in the Company’s net interest income and changes in the economic value of equity.

The primary objective of the Company’s asset-liability management process is to maximize current and future net interest income within acceptable levels of interest rate risk while satisfying liquidity and capital requirements. Management recognizes that a certain amount of interest rate risk is inherent, appropriate and necessary to ensure profitability. A simulation analysis is used to assess earnings and capital at risk from movements in interest rates. The model considers three major factors of (1) volume differences, (2) repricing differences, and (3) timing in its income simulation. As of the most recent model run, data was disseminated into appropriate repricing buckets, based upon the static position at that time. The interest-earning assets and interest-bearing liabilities were assigned a multiplier to simulate how much that particular balance sheet item would re-price when interest rates change. Finally, the estimated timing effect of rate changes is applied, and the net interest income effect is determined on a static basis (as if no other factors were present). As the table below indicates, based upon rate shock simulations on a static basis, the Company’s balance sheet is relatively rate-neutral as rates decline. Each 100 basis point increase results in approximately $584,000 decline in net interest income in the static environment. This negative effect of rising rates is offset to a large degree by the positive effect of imbedded options that include loans floating above their floors and likely internal deposit pricing strategies. After applying the effects of options, over a one-year period, the net effect of an immediate 100, 200, 300 and 400 basis point rate increase would decrease net interest income by $216,000, $420,000, $1,641,000 and $2,033,000, respectively. Rate shock modeling was done for a declining rate of 25 basis points only, as the federal funds target rate currently is between zero and 0.25%. As the table below indicates, the net effect of interest rate risk on net interest income is $77,000 in a declining rate environment. Juniata’s rate risk policies provide for maximum limits on net interest income that can be at risk for 100 through 400 basis point changes in interest rates.

Effect of Interest Rate Risk on Net Interest Income

(Dollars in thousands)

Change in Interest Rates (Basis Points)			Change in Net Interest Income Due to Interest Rate Risk (Static)			Change in Net Interest Income Due to Imbedded Options			Total Change in Net Interest Income
	400		$	(2,338	)	$	305		$	(2,033	)
	300			(1,753	)		112			(1,641	)
	200			(1,169	)		749			(420	)
	100			(584	)		368			(216	)
	0			-			-			-
	(25	)		146			(69	)		77

33

The net interest income at risk position remained within the guidelines established by the Company’s asset/liability policy.

Table 5, presented below, illustrates the maturity distribution of the Company’s interest-sensitive assets and liabilities as of December 31, 2013. Earliest re-pricing opportunities for variable and adjustable rate products and scheduled maturities for fixed rate products have been placed in the appropriate column to compute the cumulative sensitivity ratio (ratio of interest-earning assets to interest-bearing liabilities). Securities with call features are treated as though the call date is the maturity date. Through one year, the cumulative sensitivity ratio is 0.93, indicating a liability-sensitive balance sheet, when measured on a static basis.

Table 5

MATURITY DISTRIBUTION

AS OF DECEMBER 31, 2013

(Dollars in thousands)

Remaining Maturity / Earliest Possible Repricing

				Over One
	Within			Year But		Over
	One			Within Five		Five
	Year			Years		Years		Total
Interest Earning Assets
Interest bearing deposits	$	292		$	-	$	-	$	292
Investment securities:
Debt securities - taxable		55,526			24,388		5,051		84,965
Debt securities - tax-exempt		5,895			26,857		2,493		35,245
Mortgage-backed securities		879			1,003		2,587		4,469
Stocks		-			-		1,367		1,367
Loans:
Commercial, financial, and agricultural		12,134			7,564		6,583		26,281
Real estate - construction		7,382			6,425		5,874		19,681
Other loans		138,186			68,667		24,983		231,836
Total Interest Earning Assets		220,294			134,904		48,938		404,136
Interest Bearing Liabilities
Demand deposits		89,867			-		-		89,867
Savings deposits		60,761			-		-		60,761
Certificates of deposit over $100,000		14,526			15,382		1,087		30,995
Time deposits		55,671			63,447		4,293		123,411
Securities sold under agreements to repurchase		5,397			-		-		5,397
Short-term borrowings		8,400			-		-		8,400
Other interest bearing liabilities		1,356			-		-		1,356
Total Interest Bearing Liabilities		235,978			78,829		5,380		320,187
Gap	$	(15,684	)	$	56,075	$	43,558	$	83,949
Cumulative Gap	$	(15,684	)	$	40,391	$	83,949
Cumulative sensitivity ratio		0.93			1.13		1.26
Commercial, financial and agricultural loans maturing after one year with:
Fixed interest rates				$	6,657	$	6,080	$	12,737
Variable interest rates					9,910		1,174		11,084
Total				$	16,567	$	7,254	$	23,821

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Investment Portfolio Risk

Management considers its investment portfolio risk as the amount of appreciation or depreciation the investment portfolio will sustain when interest rates change. The securities portfolio will decline in value when interest rates rise and increase in value when interest rates decline. Securities with long maturities, excessive optionality (as a result of call features) and unusual indexes tend to produce the most market risk during interest rate movements. Rate shocks of minus 100 and plus 100, 200, 300 and 400 basis points were applied to the securities portfolio to determine how Tier 1 capital would be affected if the securities portfolio had to be liquidated and all gains and losses were recognized. The test revealed that, as of December 31, 2013, the risk-based capital ratio would remain adequate under these scenarios.

Economic Risk

Economic risk is the risk that the long-term or underlying value of the Company will change if interest rates change. Economic value of equity (EVE) represents the change in the value of the balance sheet without regard to business continuity. Generally, banks are exposed to rising interest rates on an economic value of equity basis because of the inherent mismatch between longer duration assets compared to shorter duration liabilities. Rate shocks are applied to all financial assets and liabilities, using parallel and non-parallel rate shifts of 100 to 400 basis points to estimate the change in EVE under the various scenarios. As of December 31, 2013, a non-parallel 200 basis point increase shock in rates produced an estimated 12.3% decline in EVE, indicating a stable value well within Juniata’s policy guidelines.

Off-Balance Sheet Arrangements

The Company has numerous off-balance sheet loan obligations that exist in order to meet the financing needs of its customers. These financial instruments include commitments to extend credit, unused lines of credit and letters of credit. Because many commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. These instruments involve, to varying degrees, elements of credit and interest rate risk that are not recognized in the consolidated financial statements. The Company does not expect that these commitments will have an adverse effect on its liquidity position.

Exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit and financial guarantees written is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making these commitments as it does for on-balance sheet instruments.

The Company had outstanding loan origination commitments aggregating $33,532,000 and $31,918,000 at December 31, 2013 and 2012, respectively. In addition, the Company had $7,457,000 and $11,246,000 outstanding in unused lines of credit commitments extended to its customers at December 31, 2013 and 2012, respectively.

Letters of credit are instruments issued by the Company that guarantee the beneficiary payment by the Bank in the event of default by the Company's customer in the non-performance of an obligation or service. Most letters of credit are extended for one-year periods. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company holds collateral supporting those commitments for which collateral is deemed necessary. The amount of the liability as of December 31, 2013 and 2012 for guarantees under letters of credit issued is not material.

The maximum undiscounted exposure related to these commitments at December 31, 2013 was $1,199,000, and the approximate value of underlying collateral upon liquidation that would be expected to cover this maximum potential exposure was $1,061,000.

35

In 2009, the Company executed an agreement to obtain technology outsourcing services through an outside service bureau, and those services began in June 2010. The agreement provides for termination fees if the Company cancels the services prior to the end of the 8-year commitment period. The termination fee would be an amount equal to one hundred percent of the estimated remaining value of the terminated services if terminated in the first contract year, ninety percent of the estimated remaining value of the terminated services if terminated in the second contract year, eighty percent and seventy percent of the remaining value of the terminated services if terminated in the third and fourth contract years, respectively, and sixty percent of the remaining value of the terminated services if terminated in contract years five through eight. Termination fees are estimated to be approximately $1,663,000 at December 31, 2013. Since the Company does not expect to terminate these services prior to the end of the commitment period, no liability has been recorded at December 31, 2013.

The Company has no investment in or financial relationship with any unconsolidated entities that are reasonably likely to have a material effect on liquidity or the availability of capital resources.

Effects of Inflation

The performance of a bank is affected more by changes in interest rates than by inflation; therefore, the effect of inflation is normally not as significant as it is on other businesses and industries. During periods of high inflation, the money supply usually increases and banks normally experience above average growth in assets, loans and deposits. A bank’s operating expenses may increase during inflationary times as the price of goods and services increase.

A bank’s performance is also affected during recessionary periods. In times of recession, a bank usually experiences a tightening on its earning assets and on its profits. A recession is usually an indicator of higher unemployment rates, which could mean an increase in the number of nonperforming loans because of continued layoffs and other deterioration of consumers’ financial condition.

36

Report on Management’s Assessment of Internal Control over Financial Reporting

Management is responsible for the preparation, integrity and fair presentation of the consolidated financial statements included in this Annual Report on Form 10-K. The consolidated financial statements and notes included in this annual report have been prepared in conformity with accounting principles generally accepted in the United States of America, and as such, include some amounts that are based on management’s best estimates and judgments.

The Company’s management is responsible for establishing and maintaining effective internal control over financial reporting. The system of internal control over financial reporting, as it relates to the financial statements, is evaluated for effectiveness by management and tested for reliability through a program of internal audits and management testing and review. Actions are taken to correct potential deficiencies as they are identified. Any system of internal control, no matter how well designed, has inherent limitations, including the possibility that a control can be circumvented or overridden and misstatements due to error or fraud may occur and not be detected. Also, because of changes in conditions, internal control effectiveness may vary over time. Accordingly, even an effective system of internal control will provide only a reasonable assurance with respect to financial statement preparation.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2013. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (1992). Based on our assessment, management concluded that as of December 31, 2013, the Company’s internal control over financial reporting is effective and meets the criteria of the Internal Control-Integrated Framework (1992).

The independent registered public accounting firm that audited the consolidated financial statements included in the annual report has issued an attestation report on the Company’s internal control over financial reporting.

Marcie A. Barber, President and Chief Executive Officer

JoAnn N. McMinn, Chief Financial Officer

37

Report of Independent Registered Public Accounting Firm on Effectiveness of Internal Control over

Financial Reporting

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Juniata Valley Financial Corp.

Mifflintown, Pennsylvania

We have audited Juniata Valley Financial Corp. and its wholly-owned subsidiary’s, The Juniata Valley Bank, (the “Company”) internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Item 9A, Report on Management’s Assessment of Internal Control over Financial Reporting.” Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of financial condition and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows of Juniata Valley Financial Corp. and its wholly-owned subsidiary, The Juniata Valley Bank as of and for the year ended December 31, 2013, and our report dated March 14, 2014 expressed an unqualified opinion.

/s/ BDO USA, LLP

Harrisburg, Pennsylvania

March 14, 2014

38

Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

Juniata Valley Financial Corp.

Mifflintown, Pennsylvania

We have audited the accompanying consolidated statement of financial condition of Juniata Valley Financial Corp., and its wholly-owned subsidiary, The Juniata Valley Bank, (the “Company”) as of December 31, 2013 and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Juniata Valley Financial Corp. and its wholly-owned subsidiary, The Juniata Valley Bank at December 31, 2013, and the results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2013, based on criteria established in the Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 14, 2014, expressed an unqualified opinion.

/s/ BDO USA, LLP

Harrisburg, Pennsylvania

March 14, 2014

39

Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Juniata Valley Financial Corp.

Mifflintown, Pennsylvania

We have audited the accompanying consolidated statements of financial condition of Juniata Valley Financial Corp. and its wholly-owned subsidiary, The Juniata Valley Bank, (the “Company”) as of December 31, 2012 and 2011, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2012. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Juniata Valley Financial Corp. and its wholly-owned subsidiary, The Juniata Valley Bank, as of December 31, 2012 and 2011 and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012 in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated March 15, 2013 expressed an unqualified opinion.

ParenteBeard LLC
Pittsburgh, Pennsylvania
March 15, 2013

40

Juniata Valley Financial Corp. and Subsidiary

Consolidated Statements of Financial Condition

( in thousands, except share data)

	December 31,			December 31,
	2013			2012
ASSETS
Cash and due from banks	$	8,570		$	14,261
Interest bearing deposits with banks		43			136
Cash and cash equivalents		8,613			14,397
Interest bearing time deposits with banks		249			847
Securities available for sale		126,046			122,338
Restricted investment in Federal Home Loan Bank (FHLB) stock		1,967			1,726
Investment in unconsolidated subsidiary		4,172			4,000
Total loans		277,798			277,500
Less: Allowance for loan losses		(2,287	)		(3,281	)
Total loans, net of allowance for loan losses		275,511			274,219
Premises and equipment, net		6,330			6,472
Other real estate owned		281			428
Bank owned life insurance and annuities		14,848			14,402
Investment in low income housing project		3,990			3,796
Core deposit intangible		119			164
Goodwill		2,046			2,046
Mortgage servicing rights		167			98
Accrued interest receivable and other assets		4,443			3,936
Total assets	$	448,782		$	448,869
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing	$	74,611		$	71,318
Interest bearing		305,034			315,433
Total deposits		379,645			386,751
Securities sold under agreements to repurchase		5,397			3,836
Short-term borrowings		8,400			1,600
Other interest bearing liabilities		1,356			1,305
Accrued interest payable and other liabilities		4,000			5,080
Total liabilities		398,798			398,572
Stockholders' Equity:
Preferred stock, no par value:
Authorized - 500,000 shares, none issued		-			-
Common stock, par value $1.00 per share:
Authorized - 20,000,000 shares
Issued - 4,745,826 shares
Outstanding -
4,196,266 shares at December 31, 2013;
4,218,361 shares at December 31, 2012		4,746			4,746
Surplus		18,370			18,346
Retained earnings		39,118			38,824
Accumulated other comprehensive loss		(1,659	)		(1,419	)
Cost of common stock in Treasury:
549,560 shares at December 31, 2013;
527,465 shares at December 31, 2012		(10,591	)		(10,200	)
Total stockholders' equity		49,984			50,297
Total liabilities and stockholders' equity	$	448,782		$	448,869

See Notes to Consolidated Financial Statements

41

Juniata Valley Financial Corp. and Subsidiary

Consolidated Statements of Income

(in thousands, except share and per share data)

	Years Ended December 31,
	2013			2012		2011
Interest income:
Loans, including fees	$	14,868		$	16,092	$	17,857
Taxable securities		1,267			1,311		1,240
Tax-exempt securities		583			738		901
Other interest income		16			29		35
Total interest income		16,734			18,170		20,033
Interest expense:
Deposits		2,871			3,621		4,560
Securities sold under agreements to repurchase		4			4		3
Short-term borrowings		8			1		1
Other interest bearing liabilities		17			22		27
Total interest expense		2,900			3,648		4,591
Net interest income		13,834			14,522		15,442
Provision for loan losses		415			1,411		364
Net interest income after provision for loan losses		13,419			13,111		15,078
Non-interest income:
Customer service fees		1,290			1,282		1,346
Debit card fee income		822			809		792
Earnings on bank owned life insurance and annuities		416			450		478
Trust fees		355			379		388
Commissions from sales of non-deposit products		375			353		273
Income from unconsolidated subsidiary		237			249		263
Fees derived from loan activity		165			197		152
Gain on sales of loans		338			567		-
(Loss) gain on calls of securities		(2	)		2		6
Gain from life insurance proceeds		-			53		-
Other non-interest income		237			251		248
Total non-interest income		4,233			4,592		3,946
Non-interest expense:
Employee compensation expense		5,413			5,190		5,258
Employee benefits		1,615			2,096		1,686
Occupancy		971			929		957
Equipment		462			510		569
Data processing expense		1,450			1,440		1,326
Director compensation		223			234		284
Professional fees		388			362		462
Taxes, other than income		483			438		496
FDIC Insurance premiums		331			327		369
(Gain) loss on sales of other real estate owned		(39	)		34		(56	)
Amortization of intangibles		45			45		45
Amortization of investment in low-income housing partnership		448			-		-
Other non-interest expense		1,356			1,472		1,406
Total non-interest expense		13,146			13,077		12,802
Income before income taxes		4,506			4,626		6,222
Provision for income taxes		505			978		1,542
Net income	$	4,001		$	3,648	$	4,680
Earnings per share
Basic	$	0.95		$	0.86	$	1.10
Diluted	$	0.95		$	0.86	$	1.10
Cash dividends declared per share	$	0.88		$	0.88	$	0.86
Weighted average basic shares outstanding		4,210,336			4,231,404		4,241,286
Weighted average diluted shares outstanding		4,211,078			4,233,448		4,244,507

See Notes to Consolidated Financial Statement

42

Juniata Valley Financial Corp. and Subsidiary

Consolidated Statements of Comprehensive Income

( in thousands)

	Year ended December 31, 2013
	Before
	Tax			Tax			Net-of-Tax
	Amount			Effect			Amount
Net income	$	4,506		$	(505	)	$	4,001
Other comprehensive income (loss):
Aavailable for sale securities :
Unrealized holding losses arising during the period		(2,325	)		791			(1,534	)
Unrealized holding losses from unconsolidated subsidiary		(18	)		-			(18	)
Less reclassification adjustment for losses included in net income (1) (3)		2			(1	)		1
Unrecognized pension net gain (2) (3)		821			(279	)		542
Unrecognized pension gain due to change in assumptions (2) (3)		962			(327	)		635
Amortization of pension prior service income (2) (3)		(1	)		-			(1	)
Amortization of pension net actuarial loss (2) (3)		203			(68	)		135
Other comprehensive loss		(356	)		116			(240	)
Total comprehensive income	$	4,150		$	(389	)	$	3,761

	Year ended December 31, 2012
	Before
	Tax			Tax			Net-of-Tax
	Amount			Effect			Amount
Net income	$	4,626		$	(978	)	$	3,648
Other comprehensive income (loss):
Aavailable for sale securities :
Unrealized holding losses arising during the period		(33	)		11			(22	)
Less reclassification adjustment for gains included in net income (1) (3)		(2	)		1			(1	)
Unrecognized pension net gain (2) (3)		1,633			(555	)		1,078
Unrecognized pension cost due to change in assumptions (2) (3)		(681	)		232			(449	)
Amortization of pension prior service income (2) (3)		56			(19	)		37
Amortization of pension net actuarial loss (2) (3)		296			(102	)		194
Other comprehensive income		1,269			(432	)		837
Total comprehensive income	$	5,895		$	(1,410	)	$	4,485

	Year ended December 31, 2011
	Before
	Tax			Tax			Net-of-Tax
	Amount			Effect			Amount
Net income	$	6,222		$	(1,542	)	$	4,680
Other comprehensive income (loss):
Aavailable for sale securities :
Unrealized holding gains arising during the period		630			(214	)		416
Unrealized holding gains from unconsolidated subsidiary		12			-			12
Less reclassification adjustment for gains included in net income (1) (3)		(6	)		2			(4	)
Unrecognized pension net loss (2) (3)		(743	)		252			(491	)
Unrecognized pension cost due to change in assumptions (2) (3)		(1,247	)		424			(823	)
Amortization of pension prior service cost (2) (3)		(2	)		1			(1	)
Amortization of pension net actuarial loss (2) (3)		152			(52	)		100
Other comprehensive loss		(1,204	)		413			(791	)
Total comprehensive income	$	5,018		$	(1,129	)	$	3,889

(1) Amounts are included in (loss) gain on calls of securities on the Consolidated Statements of Income as a separate element within total non-interest income.

(2) Amounts are included in the computation of net periodic benefit cost and are included in employee benefits expense on the Consolidated Statements of Income as a separate element within total non-interest expense.

(3) Income tax amounts are included in the provision for income taxes on the Consolidated Statements of Income.

See Notes to Consolidated Financial Statements

43

Juniata Valley Financial Corp. and Subsidiary

Consolidated Statements of Stockholders' Equity

(in thousands, except share and per share data)

Years Ended December 31, 2013, 2012 and 2011

	Number											Accumulated
	of											Other						Total
	Shares			Common					Retained			Comprehensive			Treasury			Stockholders'
	Outstanding			Stock		Surplus			Earnings			Loss			Stock			Equity
Balance at January 1, 2011		4,257,765		$	4,746	$	18,354		$	37,868		$	(1,465	)	$	(9,527	)	$	49,976
Net income										4,680									4,680
Other comprehensive loss													(791	)					(791	)
Cash dividends at $0.86 per share										(3,648	)								(3,648	)
Stock-based compensation activity							26												26
Purchase of treasury stock		(33,850	)													(589	)		(589	)
Treasury stock issued for stock option and stock purchase plans		4,303					(17	)								83			66
Balance at December 31, 2011		4,228,218			4,746		18,363			38,900			(2,256	)		(10,033	)		49,720
Net income										3,648									3,648
Other comprehensive income													837						837
Cash dividends at $0.88 per share										(3,724	)								(3,724	)
Stock-based compensation activity							25												25
Purchase of treasury stock		(19,793	)													(360	)		(360	)
Treasury stock issued for stock option and stock purchase plans		9,936					(42	)								193			151
Balance at December 31, 2012		4,218,361			4,746		18,346			38,824			(1,419	)		(10,200	)		50,297
Net income										4,001									4,001
Other comprehensive loss													(240	)					(240	)
Cash dividends at $0.88 per share										(3,707	)								(3,707	)
Stock-based compensation activity							30												30
Purchase of treasury stock		(24,918	)													(445	)		(445	)
Treasury stock issued for stock purchase plan		2,823					(6	)								54			48
Balance at December 31, 2013		4,196,266		$	4,746	$	18,370		$	39,118		$	(1,659	)	$	(10,591	)	$	49,984

See Notes to Consolidated Financial Statements

44

Juniata Valley Financial Corp. and Subsidiary

Consolidated Statements of Cash Flows

( in thousands)

	Years Ended December 31,
	2013			2012			2011
Operating activities:
Net income	$	4,001		$	3,648		$	4,680
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		415			1,411			364
Depreciation		497			524			581
Net amortization of securities premiums		440			412			369
Net amortization of loan origination costs (fees)		25			(31	)		43
Deferred net loan origination fees (costs)		15			(32	)		(9	)
Amortization of core deposit intangible		45			45			45
Amortization of investment in low income housing partnership		448			-			-
Net realized loss (gain) on calls of securities		2			(2	)		(6	)
Net (gain) loss on sales of other real estate owned		(39	)		34			(56	)
Earnings on bank owned life insurance and annuities		(416	)		(450	)		(478	)
Deferred income tax expense (benefit)		662			(64	)		(20	)
Equity in earnings of unconsolidated subsidiary, net of dividends of $47, $45 and $29		(190	)		(204	)		(234	)
Stock-based compensation expense		30			25			26
Mortgage loans originated for sale		(8,173	)		(11,057	)		-
Proceeds from loans sold to others		8,442			11,526			-
Gains on sales of loans		(338	)		(567	)		-
Gain from life insurance proceeds		-			(53	)		-
Decrease in accrued interest receivable and other assets		930			478			190
(Decrease) increase in accrued interest payable and other liabilities		(997	)		167			86
Net cash provided by operating activities		5,799			5,810			5,581
Investing activities:
Purchases of:
Securities available for sale		(45,446	)		(87,319	)		(87,131	)
FHLB stock		(241	)		(26	)		-
Premises and equipment		(355	)		(286	)		(224	)
Bank owned life insurance and annuities		(68	)		(70	)		(70	)
Proceeds from:
Maturities of and principal repayments on securities available for sale		38,973			75,816			56,034
Redemption of FHLB stock		-			-			388
Bank owned life insurance and annuities		8			13			23
Life insurance claim		-			200			-
Sale of other real estate owned		780			988			612
Sale of other assets		18			2			9
Investment in low income housing partnership		(642	)		(3,403	)		-
Net decrease in interest bearing time deposits with banks		598			249			249
Net (increase) decrease in loans		(2,359	)		10,160			7,537
Net cash used in investing activities		(8,734	)		(3,676	)		(22,573	)
Financing activities:
Net (decrease) increase in deposits		(7,106	)		86			9,875
Net increase in short-term borrowings and securities sold under agreements to repurchase		8,361			1,936			186
Cash dividends		(3,707	)		(3,724	)		(3,648	)
Purchase of treasury stock		(445	)		(360	)		(589	)
Treasury stock issued for employee stock plans		48			151			66
Net cash  (used in) provided by financing activities		(2,849	)		(1,911	)		5,890
Net (decrease) increase in cash and cash equivalents		(5,784	)		223			(11,102	)
Cash and cash equivalents at beginning of year		14,397			14,174			25,276
Cash and cash equivalents at end of year	$	8,613		$	14,397		$	14,174
Supplemental information:
Interest paid	$	2,967		$	3,715		$	4,669
Income taxes paid		695			1,135			1,200
Supplemental schedule of noncash investing and financing activities:
Transfer of loans to other real estate owned	$	594		$	1,023		$	571
Transfer of loans to other assets		18			-			22

See Notes to Consolidated Financial Statements

45

JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

1. Nature Of Operations

Juniata Valley Financial Corp. (“Juniata” or the “Company”) is a bank holding company operating in central Pennsylvania, for the purpose of delivering financial services within its local market. Through its wholly-owned banking subsidiary, The Juniata Valley Bank (the “Bank”), Juniata provides retail and commercial banking and other financial services through 12 branch locations located in Juniata, Mifflin, Perry and Huntingdon Counties. Additionally, in Mifflin, Juniata and Centre Counties, the Company maintains three offices for loan production, trust services and wealth management sales. Each of the Company’s lines of business are part of the same reporting segment, whose operating results are regularly reviewed and managed by a centralized executive management group. As a result, the Company has only one reportable segment for financial reporting purposes. The Bank provides a full range of banking services including on-line banking, an automatic teller machine network, checking accounts, NOW accounts, savings accounts, money market accounts, fixed rate certificates of deposit, club accounts, secured and unsecured commercial and consumer loans, construction and mortgage loans, safe deposit facilities and credit loans with overdraft checking protection. The Bank also provides a variety of trust services. The Company has a contractual arrangement with a broker-dealer to allow the offering of annuities, mutual funds, stock and bond brokerage services and long-term care insurance to its local market. Most of the Company’s commercial customers are small and mid-sized businesses operating in the Bank’s local service area. The Bank operates under a state bank charter and is subject to regulation by the Pennsylvania Department of Banking and the Federal Deposit Insurance Corporation. Juniata is subject to regulation of the Board of Governors of the Federal Reserve Bank and the Pennsylvania Department of Banking.

2. Summary of Significant Accounting Policies

The accounting policies of Juniata Valley Financial Corp. and its wholly owned subsidiary conform to accounting principles generally accepted in the United States of America (“GAAP”) and to general financial services industry practices. A summary of the more significant accounting policies applied in the preparation of the accompanying consolidated financial statements follows.

Principles of consolidation

The consolidated financial statements include the accounts of Juniata Valley Financial Corp. and its wholly owned subsidiary, The Juniata Valley Bank. All significant intercompany transactions and balances have been eliminated.

Use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of deferred tax assets and the determination of other-than-temporary impairment on securities.

Basis of presentation

Certain amounts previously reported have been reclassified to conform to the consolidated financial statement presentation for 2013. The reclassification had no effect on net income.

Significant group concentrations of credit risk

Most of the Company’s activities are with customers located within the Juniata Valley region. Note 5 discusses the types of securities in which the Company invests. Note 6 discusses the types of lending in which the Company engages.

46

As of December 31, 2013, there were no concentrations of credit to any particular industry equaling more than 25% of total capital. The Bank’s business activities are geographically concentrated in the counties of Juniata, Mifflin, Perry, Huntingdon, Centre, Franklin and Snyder, Pennsylvania. The Bank has a diversified loan portfolio; however, a substantial portion of its debtors’ ability to honor their obligations is dependent upon the economy in central Pennsylvania.

Cash and cash equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, interest bearing demand deposits with banks and federal funds sold. Generally, federal funds are sold for one-day periods.

Interest bearing time deposits with banks

Interest-bearing time deposits with banks consist of certificates of deposits in other banks with maturities within one year.

Securities

Securities classified as available for sale, which include marketable investment securities, are stated at fair value, with the unrealized gains and losses, net of tax, reported as a component of other comprehensive income (loss). Securities classified as available for sale are those securities that the Company intends to hold for an indefinite period of time but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including significant movement in interest rates, changes in maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations and other similar factors. Investment securities that management has the positive intent and ability to hold until maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions are classified as held to maturity and are stated at cost, adjusted for amortization of premium and accretion of discount computed by the interest method over their contractual lives. Interest and dividends on investment securities available for sale and held to maturity are recognized as income when earned. Premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains or losses on the disposition of securities available for sale are based on the net proceeds and the adjusted carrying amount of the securities sold, determined on a specific identification basis. The Company has no securities classified as held to maturity at December 31, 2013 and 2012.

Accounting Standards Codification (ASC) Topic 320, Investments – Debt and Equity Securities, clarifies the interaction of the factors that should be considered when determining whether a debt security is other-than-temporarily impaired. For debt securities, management must assess whether (a) it has the intent to sell the security and (b) it is more likely than not that it will be required to sell the security prior to its anticipated recovery. These steps are taken before an assessment is made as to whether the entity will recover the cost basis of the investment. For equity securities, consideration is given to management’s intention and ability to hold the securities until recovery of unrealized losses in assessing potential other-than-temporary impairment. More specifically, factors considered to determine other-than-temporary impairment status for individual equity holdings include the length of time the stock has remained in an unrealized loss position, the percentage of unrealized loss compared to the carrying cost of the stock, dividend reduction or suspension, market analyst reviews and expectations, and other pertinent factors that would affect expectations for recovery or further decline.

In instances when a determination is made that an other-than-temporary impairment exists and the entity does not intend to sell the debt security and it is not more likely than not that it will be required to sell the debt security prior to its anticipated recovery, the other-than-temporary impairment is separated into the amount of the total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the credit loss) and the amount of the total other-than-temporary impairment related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total other-than-temporary impairment related to all other factors is recognized in other comprehensive (loss) income.

Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each balance sheet date.

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Restricted Investment in Federal Home Loan Bank Stock

The Bank owns restricted stock investments in the Federal Home Loan Bank. Federal law requires a member institution of the Federal Home Loan Bank to hold stock according to a predetermined formula. The stock is carried at cost.

Management evaluates the restricted stock for impairment on an annual basis. Management’s determination of whether these investments are impaired is based on management’s assessment of the ultimate recoverability of the cost of these investments rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of the cost of these investments is influenced by criteria such as (1) the significance of the decline in net assets of the FHLB as compared to the capital stock amount for the FHLB and the length of time this situation has persisted, (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the FHLB.

Management believes no impairment charge was necessary related to the FHLB restricted stock during 2013, 2012 or 2011.

Loans

Loans that the Company has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the outstanding unpaid principal balances, net of any deferred fees or costs and the allowance for loan losses. Interest income on all loans, other than nonaccrual loans, is accrued over the term of the loans based on the amount of principal outstanding. Unearned income is amortized to income over the life of the loans, using the interest method.

The loan portfolio is segmented into commercial and consumer loans. Commercial loans are comprised of the following classes of loans: (1) commercial, financial and agricultural, (2) commercial real estate, (3) real estate construction, a portion of (4) mortgage loans and (5) obligations of states and political subdivisions. Consumer loans are comprised of a portion of (4) mortgage loans and (6) personal loans.

Loans on which the accrual of interest has been discontinued are designated as non-accrual loans. Accrual of interest on loans is generally discontinued when the contractual payment of principal or interest has become 90 days past due or reasonable doubt exists as to the full, timely collection of principal or interest. However, it is the Company’s policy to continue to accrue interest on loans over 90 days past due as long as (1) they are guaranteed or well secured and (2) there is an effective means of collection in process. When a loan is placed on non-accrual status, all unpaid interest credited to income in the current year is reversed against current period income and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest received on nonaccrual loans generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, accruals are resumed on loans only when the obligation is brought fully current with respect to interest and principal, has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt.

The Company originates loans in the portfolio with the intent to hold them until maturity. At the time the Company no longer intends to hold loans to maturity based on asset/liability management practices, the Company transfers loans from its portfolio to held for sale at fair value. Any write-down recorded upon transfer is charged against the allowance for loan losses. Any write-downs recorded after the initial transfers are recorded as a charge to other non-interest expense. Gains or losses recognized upon sale are included in other non-interest income.

Loan origination fees and costs

Loan origination fees and related direct origination costs for a given loan are deferred and amortized over the life of the loan on a level-yield basis as an adjustment to interest income over the contractual life of the loan. As of December 31, 2013 and 2012, the amount of net unamortized origination fees carried as an adjustment to outstanding loan balances was $123,000 and $42,000, respectively.

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Allowance for credit losses

The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments. The allowance for loan losses (“allowance”) represents management’s estimate of losses inherent in the loan portfolio as of the consolidated statement of financial condition date and is recorded as a reduction to loans. The reserve for unfunded lending commitments represents management’s estimate of losses inherent in its unfunded lending commitments and is recorded in other liabilities on the consolidated statement of financial condition, when necessary. The amount of the reserve for unfunded lending commitments is not material to the consolidated financial statements. The allowance for loan losses is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance.

For financial reporting purposes, the provision for loan losses charged to current operating income is based on management's estimates, and actual losses may vary from estimates. These estimates are reviewed and adjusted at least quarterly and are reported in earnings in the periods in which they become known.

Loans included in any class are considered for charge-off when:

· 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;

· all collateral securing the loan has been liquidated and a deficiency balance remains;

· a bankruptcy notice is received for an unsecured loan;

· a confirming loss event has occurred; or

· the loan is deemed to be uncollectible for any other reason.

The allowance for loan losses is maintained at a level considered adequate to offset probable losses on the Company’s existing loans. The analysis of the allowance for loan losses relies heavily on changes in observable trends that may indicate potential credit weaknesses. Management’s periodic evaluation of the adequacy of the allowance is based on the Bank’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and may require the Company to recognize additions to the allowance for loan losses based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Based on management’s comprehensive analysis of the loan portfolio, management believes the level of the allowance for loan losses as of December 31, 2013 was adequate.

There are two components of the allowance: a specific component for loans that are deemed to be impaired; and a general component for contingencies.

A loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loans and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis by the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent.

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The estimated fair values of substantially all of the Company’s impaired loans are measured based on the estimated fair value of the loan’s collateral. For commercial loans secured with real estate, estimated fair values are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the current appraisal and the condition of the property. Appraised values may be discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include the estimated costs to sell the property. For commercial loans secured by non-real estate collateral, estimated fair values are determined based on the borrower’s financial statements, inventory reports, aging accounts receivable, equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets. For such loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The Company generally does not separately identify individual consumer segment loans for impairment disclosures, unless such loans are subject to a restructuring agreement.

Loans whose terms are modified are classified as troubled debt restructurings if the Company grants borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a troubled debt restructuring generally involve a below-market interest rate based on the loan’s risk characteristics or an extension of a loan’s stated maturity date. Nonaccrual troubled debt restructurings are restored to accrual status if principal and interest payments, under the modified terms, are current for a sustained period of time after modification. Loans classified as troubled debt restructurings are designated as impaired.

The component of the allowance for contingencies relates to other loans that have been segmented into risk rated categories. The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated quarterly or when credit deficiencies arise, such as delinquent loan payments. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans classified as special mention have potential weaknesses that deserve management’s close attention. If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects. Loans classified as substandard have one or more well-defined weaknesses that jeopardize the liquidation of the debt. Substandard loans include loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as a loss are considered uncollectible and are charged to the allowance for loan losses. Loans not classified are rated pass. Specific reserves may be established for larger, individual classified loans as a result of this evaluation, as discussed above. Remaining loans are categorized into large groups of smaller balance homogeneous loans and are collectively evaluated for impairment. This computation is generally based on historical loss experience adjusted for qualitative factors. The historical loss experience is averaged over a ten-year period for each of the portfolio segments. The ten-year timeframe was selected in order to capture activity over a wide range of economic conditions and has been consistently used for the past seven years. The qualitative risk factors are reviewed for relevancy each quarter and include:

· 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;

· Nature and volume of the portfolio and terms of loans;

· Experience, ability and depth of lending and credit management and staff;

· Volume and severity of past due, classified and nonaccrual loans, as well as other loan modifications;

· Existence and effect of any concentrations of credit and changes in the level of such concentrations; and

· Effect of external factors, including competition.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation.

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Commercial, Financial and Agricultural Lending

The Company originates commercial, financial and agricultural loans primarily to businesses located in its primary market area and surrounding areas. These loans are used for various business purposes, which include short-term loans and lines of credit to finance machinery and equipment purchases, inventory and accounts receivable. Generally, the maximum term for loans extended on machinery and equipment is shorter and does not exceed the projected useful life of such machinery and equipment. Most business lines of credit are written with a five year maturity, subject to an annual review.

Commercial loans are generally secured with short-term assets; however, in many cases, additional collateral, such as real estate, is provided as additional security for the loan. Loan-to-value maximum values have been established by the Company and are specific to the type of collateral. Collateral values may be determined using invoices, inventory reports, accounts receivable aging reports, collateral appraisals, etc.

In underwriting commercial loans, an analysis of the borrower’s character, capacity to repay the loan, the adequacy of the borrower’s capital and collateral, as well as an evaluation of conditions affecting the borrower, is performed. Analysis of the borrower’s past, present and future cash flows is also an important aspect of the Company’s analysis.

Concentration analysis assists in identifying industry specific risk inherent in commercial, financial and agricultural lending. Mitigants include the identification of secondary and tertiary sources of repayment and appropriate increases in oversight.

Commercial, financial and agricultural loans generally present a higher level of risk than certain other types of loans, particularly during slow economic conditions.

Commercial Real Estate Lending

The Company engages in commercial real estate lending in its primary market area and surrounding areas. The Company’s commercial real estate portfolio is secured primarily by residential housing, commercial buildings, raw land and hotels. Generally, commercial real estate loans have terms that do not exceed 20 years, have loan-to-value ratios of up to 80% of the appraised value of the property and are typically secured by personal guarantees of the borrowers.

As economic conditions deteriorate, the Company reduces its exposure in real estate loans with higher risk characteristics. In underwriting these loans, the Company performs a thorough analysis of the financial condition of the borrower, the borrower’s credit history, and the reliability and predictability of the cash flow generated by the property securing the loan. Appraisals on properties securing commercial real estate loans originated by the Company are performed by independent appraisers.

Commercial real estate loans generally present a higher level of risk than certain other types of loans, particularly during slow economic conditions.

Real Estate Construction Lending

The Company engages in real estate construction lending in its primary market area and surrounding areas. The Company’s real estate construction lending consists of commercial and residential site development loans, as well as commercial building construction and residential housing construction loans.

The Company’s commercial real estate construction loans are generally secured with the subject property, and advances are made in conformity with a pre-determined draw schedule supported by independent inspections. Terms of construction loans depend on the specifics of the project, such as estimated absorption rates, estimated time to complete, etc.

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In underwriting commercial real estate construction loans, the Company performs a thorough analysis of the financial condition of the borrower, the borrower’s credit history, the reliability and predictability of the cash flow generated by the project using feasibility studies, market data, etc. Appraisals on properties securing commercial real estate loans originated by the Company are performed by independent appraisers.

Real estate construction loans generally present a higher level of risk than certain other types of loans, particularly during slow economic conditions. The difficulty of estimating total construction costs adds to the risk as well.

Mortgage Lending

The Company’s real estate mortgage portfolio is comprised of consumer residential mortgages and business loans secured by one-to-four family properties. One-to-four family residential mortgage loan originations, including home equity installment and home equity lines of credit loans, are generated by the Company’s marketing efforts, its present customers, walk-in customers and referrals. These loans originate primarily within the Company’s market area or with customers primarily from the market area.

The Company offers fixed-rate and adjustable rate mortgage loans with terms up to a maximum of 25-years for both permanent structures and those under construction. The Company’s one-to-four family residential mortgage originations are secured primarily by properties located in its primary market area and surrounding areas. The majority of the Company’s residential mortgage loans originate with a loan-to-value of 80% or less. Home equity installment loans are secured by the borrower’s primary residence with a maximum loan-to-value of 80% and a maximum term of 15 years. Home equity lines of credit are secured by the borrower’s primary residence with a maximum loan-to-value of 90% and a maximum term of 20 years.

In underwriting one-to-four family residential real estate loans, the Company evaluates the borrower’s ability to make monthly payments, the borrower’s repayment history and the value of the property securing the loan. The ability to repay is determined by the borrower’s employment history, current financial conditions, and credit background. The analysis is based primarily on the customer’s ability to repay and secondarily on the collateral or security. Most properties securing real estate loans made by the Company are appraised by independent fee appraisers. The Company generally requires mortgage loan borrowers to obtain an attorney’s title opinion or title insurance, and fire and property insurance (including flood insurance, if necessary) in an amount not less than the amount of the loan. The Company does not engage in sub-prime residential mortgage originations.

Residential mortgage loans and home equity loans generally present a lower level of risk than certain other types of consumer loans because they are secured by the borrower’s primary residence. Risk is increased when the Company is in a subordinate position for the loan collateral.

Obligations of States and Political Subdivisions

The Company lends to local municipalities and other tax-exempt organizations. These loans are primarily tax-anticipation notes and, as such, carry little risk. Historically, the Company has never had a loss on any loan of this type.

Personal Lending

The Company offers a variety of secured and unsecured personal loans, including vehicle loans, mobile home loans and loans secured by savings deposits as well as other types of personal loans.

Personal loan terms vary according to the type and value of collateral and creditworthiness of the borrower. In underwriting personal loans, a thorough analysis of the borrower’s willingness and financial ability to repay the loan as agreed is performed. The ability to repay is determined by the borrower’s employment history, current financial conditions and credit background.

Personal loans may entail greater credit risk than do residential mortgage loans, particularly in the case of personal loans which are unsecured or are secured by rapidly depreciable assets, such as automobiles or recreational equipment. In such cases, any repossessed collateral for a defaulted personal loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation. In addition, personal loan collections are dependent on the borrower’s continuing financial stability and, thus are more likely to be affected by adverse personal circumstances. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans.

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Other real estate owned

Assets acquired in settlement of mortgage loan indebtedness are recorded as other real estate owned (OREO) at fair value less estimated costs to sell, establishing a new cost basis. Costs to maintain the assets and subsequent gains and losses attributable to their disposal are included in other expense as realized. No depreciation or amortization expense is recognized. At December 31, 2013 and 2012, the carrying value of other real estate owned was $281,000 and $428,000, respectively.

Goodwill and intangibles

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets that also lack physical substance but can be separately distinguished from goodwill because of contractual or other legal rights or because the asset is capable of being sold or exchanged either on its own or in combination with a related contract, asset or liability. It is the Company’s policy that goodwill be tested at least annually for impairment.

Mortgage servicing rights

The Company originates residential mortgage loans with the intent to sell. These individual loans are normally funded by the buyer immediately. The Company maintains servicing rights on these loans.

Mortgage servicing rights are recognized as an asset upon the sale of a mortgage loan. A portion of the cost of the loan is allocated to the servicing right based upon relative fair value. Servicing rights are intangible assets and are carried at estimated fair value. The carrying amount of mortgage servicing rights was $167,000 and $98,000 at December 31, 2013 and 2012, respectively. Adjustments to fair value are recorded as non-interest income and included in gain on sales of loans in the consolidated statements of income.

The Company retains the servicing rights on certain mortgage loans sold to the FHLB and receives mortgage banking fee income based upon the principal balance outstanding. Total loans serviced for the FHLB were $18,688,000 and $11,295,000 at December 31, 2013 and 2012, respectively. The mortgage loans sold to the FHLB and serviced by the Company are not reflected in the consolidated statements of financial condition.

Premises and equipment and depreciation

Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed principally using the straight-line method over the estimated useful lives of the related assets, which range from 3 to 10 years for furniture and equipment and 25 to 50 years for buildings. Expenditures for maintenance and repairs are charged against income as incurred. Costs of major additions and improvements are capitalized. Amortization of leasehold improvements is computed by straight line over the shorter of the assets’ useful life or the related lease term.

Trust assets and revenues

Assets held in a fiduciary capacity are not assets of the Bank or the Bank’s Trust Department and are, therefore, not included in the consolidated financial statements. Trust revenues are recorded on the accrual basis.

Bank owned life insurance, annuities and split-dollar arrangements

The cash surrender value of bank owned life insurance and annuities is carried as an asset, and changes in cash surrender value are recorded as non-interest income.

GAAP requires split-dollar life insurance arrangements to have a liability recognized related to the postretirement benefits covered by an endorsement split-dollar life insurance arrangement. The accrued benefit liability was $792,000 and $738,000 as of December 31, 2013 and 2012, respectively. Related expenses for 2013, 2012 and 2011 were $54,000, $29,000 and $49,000, respectively.

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Investments in low-income housing partnerships

Juniata has invested as a limited partner in a partnership that provides low-income housing in Lewistown, Pennsylvania. The carrying value of the investment in the limited partnership was $3,990,000 at December 31, 2013 and $3,796,000 at December 31, 2012. The partnership anticipates receiving $575,000 annually in low-income housing tax credits over ten years, beginning in 2013. Amortization of the investment using the cost method is scheduled to occur over the same period as tax credits are earned. The maximum exposure to loss is limited to the carrying value of its investment at year-end.

Income taxes

The Company accounts for income taxes in accordance with income tax accounting guidance ASC Topic 740, Income Taxes.

Current income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the weight of the evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The Company accounts for uncertain tax positions if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to management’s judgment.

The Company recognizes interest and penalties on income taxes, if any, as a component of income tax expense.

Advertising

The Company follows the policy of charging costs of advertising to expense as incurred. Advertising expenses were $207,000, $172,000 and $144,000 in 2013, 2012 and 2011, respectively.

Off-balance sheet financial instruments

In the ordinary course of business, the Bank has entered into off-balance sheet financial instruments consisting of commitments to extend credit and letters of credit. Such financial instruments are recorded on the consolidated statement of financial condition when they are funded.

Transfer of financial assets

Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

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Stock-based compensation

The Company sponsors a stock option plan for certain key officers. Compensation expense for stock options granted is measured using the fair value of the award on the grant date and is recognized over the vesting period. The Company recognized $30,000, $25,000 and $26,000 of expense for the years ended December 31, 2013, 2012 and 2011, respectively, for stock-based compensation. The stock-based compensation expense amounts were derived based on the fair value of options using the Black-Scholes option-pricing model. The following weighted average assumptions were used to value options granted in the periods indicated.

	2013			2012			2011
Expected life of options		7 years			7 years			7 years
Risk-free interest rate		1.41	%		1.78	%		1.39	%
Expected volatility		21.57	%		22.12	%		21.91	%
Expected dividend yield		4.91	%		4.86	%		4.62	%

Segment reporting

Management does not separately allocate expenses, including the cost of funding loan demand, between the commercial, retail and trust operations of the Company. As such, discrete financial information is not available, and segment reporting would not be meaningful.

Subsequent events

The Company has evaluated events and transactions occurring subsequent to the consolidated statement of financial condition date of December 31, 2013, for items that should potentially be recognized or disclosed in the consolidated financial statements. The evaluation was conducted through the date these consolidated financial statements were issued.

3. Recent Accounting Standards Update (ASU)

There were no new accounting pronouncements affecting the Company during the year ended December 31, 2013 that had not been adopted by the Company in previous periods. In addition, there are no recently issued accounting standards that are expected to have a material impact on the Company’s consolidated financial statements in future periods.

4. Restrictions on Cash and Due From Banks

The Bank is required to maintain cash reserve balances with the Federal Reserve Bank. The total required reserve balances were $362,000 and $225,000 as of December 31, 2013 and 2012, respectively.

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5. Securities

The Company’s investment portfolio includes primarily bonds issued by U.S. Government sponsored agencies (approximately 62%) and municipalities (approximately 33%) as of December 31, 2013. Most of the municipal bonds are general obligation bonds with maturities or pre-refunding dates within 5 years. The remaining 5% of the portfolio includes mortgage-backed securities issued by Government-sponsored agencies and backed by residential mortgages and a group of equity investments in other financial institutions.

The amortized cost and fair value of securities as of December 31, 2013 and 2012, by contractual maturity, are shown below (in thousands). Expected maturities may differ from contractual maturities because the securities may be called or prepaid with or without prepayment penalties.

	December 31, 2013
Securities Available for Sale					Gross		Gross
	Amortized		Fair		Unrealized		Unrealized
Type and maturity	Cost		Value		Gains		Losses
Obligations of Government agencies and corporations
Within one year	$	4,177	$	4,192	$	15	$	-
After one year but within five years		48,011		47,578		203		(636	)
After five years but within ten years		27,615		26,508		-		(1,107	)
		79,803		78,278		218		(1,743	)
Obligations of state and political subdivisions
Within one year		8,260		8,314		55		(1	)
After one year but within five years		26,027		26,098		133		(62	)
After five years but within ten years		7,224		7,182		56		(98	)
After ten years		350		338		-		(12	)
		41,861		41,932		244		(173	)
Mortgage-backed securities		4,465		4,469		7		(3	)
Equity securities		1,055		1,367		366		(54	)
Total	$	127,184	$	126,046	$	835	$	(1,973	)

	December 31, 2012
Securities Available for Sale					Gross		Gross
	Amortized		Fair		Unrealized		Unrealized
Type and maturity	Cost		Value		Gains		Losses
Obligations of Government agencies and corporations
Within one year	$	7,908	$	7,996	$	88	$	-
After one year but within five years		42,253		42,796		543		-
After five years but within ten years		22,004		22,025		53		(32	)
		72,165		72,817		684		(32	)
Obligations of state and political subdivisions
Within one year		10,448		10,505		57		-
After one year but within five years		29,595		29,809		246		(32	)
After five years but within ten years		4,727		4,936		215		(6	)
After ten years		731		726		-		(5	)
		45,501		45,976		518		(43	)
Mortgage-backed securities		2,502		2,526		24		-
Equity securities		985		1,019		145		(111	)
Total	$	121,153	$	122,338	$	1,371	$	(186	)

Certain obligations of the U.S. Government and state and political subdivisions are pledged to secure public deposits, securities sold under agreements to repurchase and for other purposes as required or permitted by law. The carrying value of the pledged assets was $31,921,000 and $30,785,000 at December 31, 2013 and 2012, respectively.

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In addition to cash received from the scheduled maturities of securities, some investment securities available for sale are sold at current market values during the course of normal operations. Following is a summary of proceeds received from all investment securities transactions and the resulting realized gains and losses (in thousands):

	Years Ended December 31,
	2013			2012		2011
Gross proceeds from sales of securities	$	-		$	-	$	-
Securities available for sale:
Gross realized gains from called securities	$	-		$	2	$	6
Gross realized losses from called securities		(2	)		-		-

The following table shows gross unrealized losses and fair value, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2013 (in thousands):

	Unrealized Losses at December 31, 2013
	Less Than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Obligations of U.S. Government agencies and corporations	$	53,438	$	(1,664	)	$	1,921	$	(79	)	$	55,359	$	(1,743	)
Obligations of state and political subdivisions		11,496		(130	)		4,301		(43	)		15,797		(173	)
Mortgage-backed securities		308		(3	)		-		-			308		(3	)
Debt securities		65,242		(1,797	)		6,222		(122	)		71,464		(1,919	)
Equity securities		-		-			266		(54	)		266		(54	)
Total temporarily impaired securities	$	65,242	$	(1,797	)	$	6,488	$	(176	)	$	71,730	$	(1,973	)

At December 31, 2013, 45 U.S. Government and agency securities had unrealized losses that in the aggregate did not exceed 3% of amortized cost. One of these securities has been in a continuous loss position for 12 months or more.

At December 31, 2013, 37 obligations of state and political subdivision bonds had unrealized losses that in the aggregate did not exceed 2% of amortized cost. Eight of these securities have been in a continuous loss position for 12 months or more.

At December 31, 2013, one mortgage-backed security had an unrealized loss that did not exceed 1% of amortized cost. This security had not been in a continuous loss position for 12 months or more.

The mortgage-backed securities in the Company’s portfolio are government sponsored enterprise (GSE) pass-through instruments issued by the Federal National Mortgage Association (FNMA), which guarantees the timely payment of principal on these investments.

The unrealized losses noted above are considered to be temporary impairments. The decline in the values of the debt securities is due only to interest rate fluctuations, rather than erosion of issuer credit quality. As a result, the payment of contractual cash flows, including principal repayment, is not at risk. As the Company does not intend to sell the securities, does not believe the Company will be required to sell the securities before recovery and expects to recover the entire amortized cost basis, none of the debt securities are deemed to be other-than-temporarily impaired.

Equity securities owned by the Company consist of common stock of various financial services providers (“Bank Stocks”) and are evaluated quarterly for evidence of other-than-temporary impairment. There were seven equity securities that were in an unrealized loss position on December 31, 2013, and have carried unrealized losses for 12 months or more. Individually, none of these seven equity securities have significant unrealized losses. Of the seven equity securities that have sustained unrealized losses for more than 12 months, all have increased in fair value during 2013, indicating the possibility of full recovery and therefore are deemed to be temporarily impaired. Management has identified no other-than-temporary impairment as of, or for the periods ended, December 31, 2013 and 2012 in the equity portfolio. Management continues to track the performance of each stock owned to determine if it is prudent to deem any further other-than-temporary impairment charges. The Company has the ability and intent to hold its equity securities until recovery of unrealized losses.

57

The following table shows gross unrealized losses and fair value, aggregated by category and length of time that individual securities had been in a continuous unrealized loss position, at December 31, 2012 (in thousands):

	Unrealized Losses at December 31, 2012
	Less Than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Obligations of U.S. Government agencies and corporations	$	11,471	$	(32	)	$	-	$	-		$	11,471	$	(32	)
Obligations of state and political subdivisions		13,040		(43	)		-		-			13,040		(43	)
Debt securities		24,511		(75	)		-		-			24,511		(75	)
Equity securities		249		(13	)		251		(98	)		500		(111	)
Total temporarily impaired securities	$	24,760	$	(88	)	$	251	$	(98	)	$	25,011	$	(186	)

6. Loans and Related Allowance for Loan Losses

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Company’s internal risk rating system as of December 31, 2013 and December 31, 2012 (in thousands):

As of December 31, 2013	Pass		Special Mention		Substandard		Doubtful		Total
Commercial, financial and agricultural	$	20,388	$	5,658	$	235	$	-	$	26,281
Real estate - commercial		56,867		11,706		5,620		278		74,471
Real estate - construction		15,803		292		1,754		1,832		19,681
Real estate - mortgage		130,706		3,995		4,272		1,486		140,459
Obligations of states and political subdivisions		12,674		28				-		12,702
Personal		4,204		-				-		4,204
Total	$	240,642	$	21,679	$	11,881	$	3,596	$	277,798

As of December 31, 2012	Pass		Special Mention		Substandard		Doubtful		Total
Commercial, financial and agricultural	$	17,570	$	904	$	822	$	-	$	19,296
Real estate - commercial		55,198		8,939		5,010		40		69,187
Real estate - construction		14,001		1,022		867		2,202		18,092
Real estate - mortgage		144,179		3,864		2,350		2,729		153,122
Obligations of states and political subdivisions		12,769		-		-		-		12,769
Personal		5,024		10		-		-		5,034
Total	$	248,741	$	14,739	$	9,049	$	4,971	$	277,500

The Company has certain loans in its portfolio that are considered to be impaired. It is the policy of the Company to recognize income on impaired loans that have been transferred to nonaccrual status on a cash basis, only to the extent that it exceeds principal balance recovery. Until an impaired loan is placed on nonaccrual status, income is recognized on the accrual basis. A collateral analysis is performed on each impaired loan at least quarterly and results are used to determine if a specific reserve is necessary to adjust the carrying value of each individual loan down to the estimated fair value. Generally, specific reserves are carried against impaired loans based upon estimated collateral value until a confirming loss event occurs or until termination of the credit is scheduled through liquidation of the collateral or foreclosure. Charge off will occur when a confirmed loss is identified. Professional appraisals of collateral, discounted for expected selling costs, are used to determine the charge-off amount. The following tables summarize information regarding impaired loans by portfolio class as of December 31, 2013 and December 31, 2012 (in thousands):

	As of December 31, 2013						As of December 31, 2012
Impaired loans	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial, financial and agricultural	$	94	$	94	$	-	$	160	$	160	$	-
Real estate - commercial		2,017		2,142		-		2,672		2,672		-
Real estate - construction		504		813		-		2,004		2,197		-
Real estate - mortgage		3,353		4,751		-		487		523		-
With an allowance recorded:
Real estate - commercial	$	238	$	238	$	26	$	-	$	-	$	-
Real estate - construction		1,478		1,502		93		198		198		91
Real estate - mortgage		365		394		45		2,141		2,141		1,036
Total:
Commercial, financial and agricultural	$	94	$	94	$	-	$	160	$	160	$	-
Real estate - commercial		2,255		2,380		26		2,672		2,672		-
Real estate - construction		1,982		2,315		93		2,202		2,395		91
Real estate - mortgage		3,718		5,145		45		2,628		2,664		1,036
	$	8,049	$	9,934	$	164	$	7,662	$	7,891	$	1,127

	Year Ended December 31,  2013						Year Ended December 31,  2012						Year Ended December 31,  2011
Impaired loans	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
With no related allowance recorded:
Commercial, financial and agricultural	$	127	$	-	$	-	$	199	$	14	$	-	$	274	$	19	$	-
Real estate - commercial		2,345		96		24		2,492		119		3		2,354		139		10
Real estate - construction		1,254		2		6		1,362		-		-		485		42		14
Real estate - mortgage		1,920		64		24		1,371		-		-		2,453		34		47
With an allowance recorded:
Real estate - commercial	$	119	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Real estate - construction		838		-		-		674		-		15		1,025		-		-
Real estate - mortgage		1,253		-		7		2,503		-		-		2,051		65		-
Total:
Commercial, financial and agricultural	$	127	$	-	$	-	$	199	$	14	$	-	$	274	$	19	$	-
Real estate - commercial		2,464		96		24		2,492		119		3		2,354		139		10
Real estate - construction		2,092		2		6		2,036		-		15		1,510		42		14
Real estate - mortgage		3,173		64		31		3,874		-		-		4,504		99		47
	$	7,856	$	162	$	61	$	8,601	$	133	$	18	$	8,642	$	299	$	71

The following table presents nonaccrual loans by classes of the loan portfolio as of December 31, 2013 and December 31, 2012 (in thousands):

Nonaccrual loans:	December 31, 2013		December 31, 2012
Commercial, financial and agricultural	$	10	$	20
Real estate - commercial		1,331		1,835
Real estate - construction		1,982		2,376
Real estate - mortgage		2,629		4,615
Total	$	5,952	$	8,846

Interest income not recorded based on the original contractual terms of the loans for nonaccrual loans was $490,000, $472,000 and $405,000 in 2013, 2012 and 2011, respectively. The aggregate amount of demand deposits that have been reclassified as loan balances at December 31, 2013 and 2012 were $41,000 and $620,000, respectively.

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio summarized by the past due status as of December 31, 2013 and December 31, 2012 (in thousands): 

As of  December 31, 2013	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Loans Past Due greater than 90 Days and Accruing
Commercial, financial and agricultural	$	19	$	-	$	10	$	29	$	26,252	$	26,281	$	-
Real estate - commercial		35		1,092		947		2,074		72,397		74,471		61
Real estate - construction		239		7		1,801		2,047		17,634		19,681		-
Real estate - mortgage		1,239		2,130		2,585		5,954		134,505		140,459		251
Obligations of states and political subdivisions		-		-		-		-		12,702		12,702		-
Personal		23		1				24		4,180		4,204		-
Total	$	1,555	$	3,230	$	5,343	$	10,128	$	267,670	$	277,798	$	312

As of December 31, 2012	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Loans Past Due greater than 90 Days and Accruing
Commercial, financial and agricultural	$	30	$	-	$	191	$	221	$	19,075	$	19,296	$	171
Real estate - commercial		295		819		1,928		3,042		66,145		69,187		93
Real estate - construction		9		136		2,335		2,480		15,612		18,092		156
Real estate - mortgage		1,359		3,131		4,428		8,918		144,204		153,122		320
Obligations of states and political subdivisions		-		-		-		-		12,769		12,769		-
Personal		29		25		2		56		4,978		5,034		2
Total	$	1,722	$	4,111	$	8,884	$	14,717	$	262,783	$	277,500	$	742

The following table summarizes information regarding troubled debt restructurings by loan portfolio class as of and for the year ended December 31, 2013, in thousands of dollars. There were no loans identified as troubled debt restructurings as of or for the year ended December 31, 2012.

	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Recorded Investment
2013
Accruing troubled debt restructurings:
Real estate - commercial		1	$	64	$	61	$	61
Real estate - mortgage		6		706		714		714
		7	$	770	$	775	$	775

The Company’s troubled debt restructurings are also impaired loans, which may result in a specific allocation and subsequent charge-off if appropriate. As of December 31, 2013, there were no specific reserves or charge-offs relating to the troubled debt restructurings. The amended terms of the restructured loans vary, whereby interest rates have been reduced, principal payments have been reduced or deferred for a period of time and/or maturity dates have been extended. One restructured loan was delinquent in excess of 90 days with respect to the terms of the restructuring as of December 31, 2013. This loan has a balance of $61,000 and is in the process of foreclosure.

There were no loans modified resulting in troubled debt restructurings during 2012. There have been no defaults of troubled debt restructuring that took place during 2012 and 2013 within 12 months of restructure.

The following tables summarize the activity in the allowance for loan losses by loan class and loans by loan class, segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of and for the years ended December 31, 2013, 2012 and 2011 (in thousands): 

Allowance for loan losses:	Commercial, financial and agricultural			Real estate - commercial		Real estate - construction			Real estate - mortgage			Obligations of states and political subdivisions		Personal			Total
Beginning Balance, January 1, 2013	$	179		$	463	$	202		$	2,387		$	-	$	50		$	3,281
Charge-offs		(4	)		-		(117	)		(1,281	)		-		(29	)		(1,431	)
Recoveries		13			-		-			-			-		9			22
Provisions		65			71		127			140			-		12			415
Ending balance	$	253		$	534	$	212		$	1,246		$	-	$	42		$	2,287

As of December 31, 2013	Commercial, financial and agricultural		Real estate - commercial		Real estate - construction		Real estate - mortgage		Obligations of states and political subdivisions		Personal		Total
Allowance for loan losses:
Ending balance	$	253	$	534	$	212	$	1,246	$	-	$	42	$	2,287
evaluated for impairment
individually	$	-	$	26	$	93	$	45	$	-	$	-	$	164
collectively	$	253	$	508	$	119	$	1,201	$	-	$	42	$	2,123
Loans:
Ending balance	$	26,281	$	74,471	$	19,681	$	140,459	$	12,702	$	4,204	$	277,798
evaluated for impairment
individually	$	94	$	2,255	$	1,982	$	3,718	$	-	$	-	$	8,049
collectively	$	26,187	$	72,216	$	17,699	$	136,741	$	12,702	$	4,204	$	269,749

Allowance for loan losses:	Commercial, financial and agricultural			Real estate - commercial		Real estate - construction			Real estate - mortgage			Obligations of states and political subdivisions		Personal			Total
Beginning Balance, January 1, 2012	$	195		$	455	$	442		$	1,771		$	-	$	68		$	2,931
Charge-offs		(25	)		-		(193	)		(852	)		-		(1	)		(1,071	)
Recoveries		8			-		-			-			-		2			10
Provisions		1			8		(47	)		1,468			-		(19	)		1,411
Ending balance	$	179		$	463	$	202		$	2,387		$	-	$	50		$	3,281

As of December 31, 2012	Commercial, financial and agricultural		Real estate - commercial		Real estate - construction		Real estate - mortgage		Obligations of states and political subdivisions		Personal		Total
Allowance for loan losses:
Ending balance	$	179	$	463	$	202	$	2,387	$	-	$	50	$	3,281
evaluated for impairment
individually	$	-	$	-	$	91	$	1,036	$	-	$	-	$	1,127
collectively	$	179	$	463	$	111	$	1,351	$	-	$	50	$	2,154
Loans:
Ending balance	$	19,296	$	69,187	$	18,092	$	153,122	$	12,769	$	5,034	$	277,500
evaluated for impairment
individually	$	160	$	2,672	$	2,202	$	2,628	$	-	$	-	$	7,662
collectively	$	19,136	$	66,515	$	15,890	$	150,494	$	12,769	$	5,034	$	269,838

Allowance for loan losses:	Commercial, financial and agricultural			Real estate - commercial			Real estate - construction		Real estate - mortgage			Obligations of states and political subdivisions		Personal			Total
Beginning Balance, January 1, 2011	$	163		$	442		$	336	$	1,810		$	-	$	73		$	2,824
Charge-offs		(18	)		(37	)		-		(205	)		-		(22	)		(282	)
Recoveries		2			-			-		10			-		13			25
Provisions		48			50			106		156			-		4			364
Ending balance	$	195		$	455		$	442	$	1,771		$	-	$	68		$	2,931

As of December 31, 2011	Commercial, financial and agricultural		Real estate - commercial		Real estate - construction		Real estate - mortgage		Obligations of states and political subdivisions		Personal		Total
Allowance for loan losses:
Ending balance	$	195	$	455	$	442	$	1,771	$	-	$	68	$	2,931
evaluated for impairment
individually	$	-	$	-	$	343	$	432	$	-	$	-	$	775
collectively	$	195	$	455	$	99	$	1,339	$	-	$	68	$	2,156
Loans, net of unearned interest:
Ending balance	$	19,417	$	60,774	$	17,508	$	176,544	$	8,780	$	6,658	$	289,681
evaluated for impairment
individually	$	238	$	2,312	$	1,870	$	5,119	$	-	$	-	$	9,539
collectively	$	19,179	$	58,462	$	15,638	$	171,425	$	8,780	$	6,658	$	280,142

7. Pledged Assets

The Bank must maintain sufficient qualifying collateral with the Federal Home Loan Bank (FHLB), in order to secure borrowings. Therefore, a Master Collateral Agreement has been entered into which pledges all mortgage related assets as collateral for future borrowings. Mortgage related assets could include loans or investment securities. As of December 31, 2013, the amount of loans included in qualifying collateral was $190,905,000, for a collateral value of $135,454,000. No investment securities are included in qualifying collateral as of December 31, 2013.

8. Bank Owned Life Insurance and Annuities

The Company holds bank-owned life insurance (BOLI), deferred annuities and payout annuities with a combined cash value of $14,848,000 and $14,402,000 at December 31, 2013 and 2012, respectively. As annuitants retire, the deferred annuities may be converted to payout annuities to create payment streams that match certain post-retirement liabilities. The cash surrender value on the BOLI and annuities increased by $446,000, $333,000 and $501,000 in 2013, 2012 and 2011, respectively, from earnings recorded as non-interest income and from premium payments, net of cash payments received. The contracts are owned by the Bank in various insurance companies. The crediting rate on the policies varies annually based on the insurance companies’ investment portfolio returns in their general fund and market conditions. Changes in cash value of BOLI and annuities in 2013 and 2012 are shown below (in thousands):

	Life Insurance			Deferred Annuities		Payout Annuities			Total
Balance as of December 31, 2011	$	13,718		$	327	$	24		$	14,069
Earnings		409			13		1			423
Premiums on existing policies		56			14		-			70
Annuity payments received		-			-		(13	)		(13	)
Net proceeds from life insurance claim		(147	)		-		-			(147	)
Balance as of December 31, 2012		14,036			354		12			14,402
Earnings		372			13		1			386
Premiums on existing policies		54			14		-			68
Annuity payments received		-			-		(8	)		(8	)
Balance as of December 31, 2013	$	14,462		$	381	$	5		$	14,848

9. Premises And Equipment

Premises and equipment consist of the following (in thousands):

	December 31,
	2013			2012
Land	$	1,066		$	864
Buildings and improvements		8,585			8,510
Furniture, computer software and equipment		4,601			4,523
		14,252			13,897
Less: accumulated depreciation		(7,922	)		(7,425	)
	$	6,330		$	6,472

Depreciation expense on premises and equipment charged to operations was $497,000 in 2013, $524,000 in 2012 and $581,000 in 2011.

10. Acquisition

On September 8, 2006, the Company completed its acquisition of a branch office in Richfield, PA. The acquisition included real estate, deposits and loans. The assets and liabilities of the acquired branch office were recorded on the consolidated statement of financial condition at their estimated fair values as of September 8, 2006, and its results of operations have been included in the consolidated statements of income since such date.

Included in the purchase price of the branch was goodwill and core deposit intangible of $2,046,000 and $449,000, respectively. The core deposit intangible is being amortized over a ten-year period on a straight line basis. The goodwill is not amortized, but is measured annually for impairment. Core deposit intangible amortization expense of $45,000 was recorded in each of the years 2013, 2012 and 2011. Intangible amortization expense projected for the succeeding five years beginning in 2014 is estimated to be $45,000 in 2014 and 2015 and $29,000 for 2016.

11. Investment in Unconsolidated Subsidiary

On September 1, 2006, the Company invested in Liverpool Community Bank (formerly known as The First National Bank of Liverpool) (“LCB”), Liverpool, PA, by purchasing 39.16% of its outstanding common stock. This investment is accounted for under the equity method of accounting. The investment is being carried at $4,172,000 as of December 31, 2013. The Company increases its investment in LCB for its share of earnings and decreases its investment by any dividends received from LCB. The investment is evaluated quarterly for impairment. A loss in value of the investment which is determined to be other than a temporary decline would be recognized as a loss in the period in which such determination is made. Evidence of a loss in value might include, but would not necessarily be limited to, absence of an ability to recover the carrying amount of the investment or inability of LCB to sustain an earnings capacity which would justify the current carrying value of the investment.

12. Deposits

Deposits consist of the following (in thousands):

	December 31,
	2013		2012
Demand, non-interest bearing	$	74,611	$	71,318
NOW and Money Market		89,867		90,349
Savings		60,761		56,382
Time deposits, $100,000 or more		30,995		33,007
Other time deposits		123,411		135,695
	$	379,645	$	386,751

Aggregate amount of scheduled maturities of time deposits as of December 31, 2013 include the following (in thousands):

	Time Deposits
Maturing in:	$100,000 or more		Other		Total Time Deposits
2014	$	14,526	$	55,671	$	70,197
2015		10,222		35,221		45,443
2016		2,456		13,886		16,342
2017		1,375		6,914		8,289
2018		1,329		7,426		8,755
Later		1,087		4,293		5,380
	$	30,995	$	123,411	$	154,406

13. Borrowings

Borrowings consist of the following (dollars in thousands):

	December 31, 2013					December 31, 2012					December 31, 2011					For the year 2013
	Outstanding Balance		Rate			Outstanding Balance		Rate			Outstanding Balance		Rate			Average Balance		Weighted Average Rate
Securities sold under agreements to repurchase	$	5,397		0.10	%	$	3,836		0.10	%	$	3,500		0.10	%	$	4,332		0.10	%
Short-term borrowings - Federal Home Loan Bank overnight advances		8,400		0.25	%		1,600		0.25	%		-					3,200		0.25	%
	$	13,797		0.19	%	$	5,436		0.14	%	$	3,500		0.10	%	$	7,532		0.16	%

The maximum balance of short-term borrowings at any month-end during 2013 was $ 13,863,000.

The Bank has repurchase agreements with several of its depositors, under which customers’ funds are invested daily into an interest bearing account. These funds are carried by the Company as short-term debt. It is the Company’s policy to have repurchase agreements collateralized 100% by U.S. Government securities. As of December 31, 2013, the securities that serve as collateral for securities sold under agreements to repurchase had a fair value of $8,919,000. The interest rate paid on these funds is variable and subject to change daily.

The Bank’s maximum borrowing capacity with the Federal Home Loan Bank of Pittsburgh (“FHLB”) is $135,454,000, with a balance of $8,400,000 outstanding as of December 31, 2013. In order to borrow additional amounts in excess of $2,021,000, the FHLB would require the Bank to purchase additional FHLB Stock. The FHLB is a source of both short-term and long-term funding. The Bank must maintain sufficient qualifying collateral to secure all outstanding advances.

The Bank has entered into an agreement under which it can borrow up to $20,000,000 from the FHLB in their Open RepoPlus product. There were no borrowings under this agreement during the periods included in these consolidated financial statements. There is no expiration date on the current agreement.

14. Operating Lease Obligations

The Company has entered into a number of arrangements that are classified as operating leases. The operating leases are for several branch and office locations. The majority of the branch and office location leases are renewable at the Company’s option. Future minimum lease commitments are based on current rental payments. Rental expense charged to operations, including license fees for branch offices, was $122,000, $114,000 and $108,000 in 2013, 2012 and 2011, respectively.

The following is a summary of future minimum rental payments for the next five years required under operating leases that have initial or remaining noncancellable lease terms in excess of one year as of December 31, 2013 (in thousands):

Years ending December 31,
2014	$	121
2015		89
2016		83
2017		44
2018		-
2019 and beyond		-
Total minimum payments required	$	337

15. Income Taxes

The components of income tax expense for the three years ended December 31 were (in thousands):

	2013			2012			2011
Current tax (benefit) expense	$	(157	)	$	1,042		$	1,562
Deferred tax expense (benefit)		662			(64	)		(20	)
Total tax expense	$	505		$	978		$	1,542

Income tax expense (benefit) related to realized securities gains was $(1,000) in 2013, $1,000 in 2012 and $2,000 in 2011.

A reconciliation of the statutory income tax expense computed at 34% to the income tax expense included in the consolidated statements of income follows (dollars in thousands):

	Years Ended December 31,
	2013			2012			2011
Income before income taxes	$	4,506		$	4,626		$	6,222
Effective tax rate		34.0	%		34.0	%		34.0	%
Federal tax at statutory rate		1,532			1,573			2,115
Tax-exempt interest		(354	)		(431	)		(439	)
Net earnings on BOLI		(108	)		(148	)		(133	)
Dividend from unconsolidated subsidiary		(13	)		(12	)		(8	)
Stock-based compensation		10			2			7
Federal tax credits		(556	)		-			-
Other permanent differences		(6	)		(6	)		-
Total tax expense	$	505		$	978		$	1,542
Effective tax rate		11.2	%		21.1	%		24.8	%

Deductible temporary differences and taxable temporary differences gave rise to a net deferred tax asset for the Company as of December 31, 2013 and 2012. The components giving rise to the net deferred tax asset are detailed below (in thousands):

	December 31,
	2013			2012
Deferred Tax Assets
Allowance for loan losses	$	639		$	1,000
Deferred directors' compensation		541			565
Employee and director benefits		574			605
Qualified pension liability		-			321
Unrealized losses on securities available for sale		387			-
Unrealized loss from securities impairment		221			221
Other		109			160
Total deferred tax assets		2,471			2,872
Deferred Tax Liabilities
Depreciation		(223	)		(236	)
Equity income from unconsolidated subsidiary		(462	)		(398	)
Qualified pension asset		(342	)		-
Loan origination costs		(287	)		(223	)
Prepaid expense		(95	)		(90	)
Unrealized gains on securities available for sale		-			(403	)
Annuity earnings		(63	)		(58	)
Fair value of mortgage servicing rights		(57	)		(33	)
Goodwill		(340	)		(294	)
Total deferred tax liabilities		(1,869	)		(1,735	)
Net deferred tax asset included in other assets	$	602		$	1,137

The Company has concluded that the deferred tax assets are realizable (on a more likely than not basis) through the combination of future reversals of existing taxable temporary differences, certain tax planning strategies and expected future taxable income.

It is the Company’s policy to recognize interest and penalties on unrecognized tax benefits in income tax expense in the Consolidated Statements of Income. No significant income tax uncertainties were identified as a result of the Company’s evaluation of its income tax position. Therefore, the Company recognized no adjustment for unrecognized income tax benefits for the years ended December 31, 2013, 2012 and 2011. The Company is no longer subject to examination by taxing authorities for years before 2010.  Tax years 2010 through the present, with limited exception, remain open to examination.

16. Stockholders’ Equity and Regulatory Matters

The Company is authorized to issue 500,000 shares of preferred stock with no par value. The Board has the ability to fix the voting, dividend, redemption and other rights of the preferred stock, which can be issued in one or more series. No shares of preferred stock have been issued.

The Company has a dividend reinvestment and stock purchase plan. Under this plan, additional shares of Juniata Valley Financial Corp. stock may be purchased at the prevailing market prices with reinvested dividends and voluntary cash payments, within limits. To the extent that shares are not available in the open market, the Company has reserved common stock to be issued under the plan. Any adjustment in capitalization of the Company will result in a proportionate adjustment to the reserved shares for this plan. At December 31, 2013, 141,887 shares were available for issuance under the Dividend Reinvestment Plan.

The Company periodically repurchases shares of its common stock under a share repurchase program approved by the Board of Directors. Repurchases have typically been through open market transactions and have complied with all regulatory restrictions on the timing and amount of such repurchases. Shares repurchased have been added to treasury stock and accounted for at cost. These shares may be reissued for stock option exercises, employee stock purchase plan purchases and to fulfill dividend reinvestment program needs. During 2013, 2012 and 2011, 24,918, 19,793 and 33,850 shares, respectively, were repurchased in conjunction with this program. Remaining shares authorized in the program were 43,475 as of December 31, 2013.

The Company and the Bank are subject to risk-based capital standards by which bank holding companies and banks are evaluated in terms of capital adequacy. These regulatory capital requirements are administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s and Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to each maintain minimum amounts and ratios (set forth in the table below) of Total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined in the regulations), and Tier I capital (as defined in the regulations) to average assets (as defined in the regulations). Management believes, as of December 31, 2013 and 2012, that the Company and the Bank met all capital adequacy requirements to which they were subject.

As of December 31, 2013, the most recent notification from the regulatory banking agencies categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as “well capitalized”, the Bank must maintain minimum Total risk-based, Tier I risk-based and Tier I leverage ratios as set forth in the table. To the knowledge of management, there are no conditions or events since these notifications that have changed the Bank’s category.

The table below provides a comparison of the Company’s and the Bank’s risk-based capital ratios and leverage ratios to the minimum regulatory requirements for the periods indicated (dollars in thousands).

Juniata Valley Financial Corp. (Consolidated)						Minimum Requirement
						For Capital
	Actual					Adequacy Purposes
	Amount		Ratio			Amount		Ratio
As of December 31, 2013:
Total Capital	$	51,888		17.97	%	$	23,105		8.00	%
(to Risk Weighted Assets)
Tier 1 Capital		49,461		17.13	%		11,553		4.00	%
(to Risk Weighted Assets)
Tier 1 Capital		49,461		11.04	%		17,915		4.00	%
(to Average Assets)
As of December 31, 2012:
Total Capital	$	52,803		18.28	%	$	23,103		8.00	%
(to Risk Weighted Assets)
Tier 1 Capital		49,506		17.14	%		11,552		4.00	%
(to Risk Weighted Assets)
Tier 1 Capital		49,506		10.96	%		18,074		4.00	%
(to Average Assets)

											Minimum Regulatory
											Requirements to be
The Juniata Valley Bank						Minimum Requirement					"Well Capitalized"
						For Capital					under Prompt
	Actual					Adequacy Purposes					Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2013:
Total Capital	$	46,530		16.35	%	$	22,773		8.00	%	$	28,467		10.00	%
(to Risk Weighted Assets)
Tier 1 Capital		44,185		15.52	%		11,387		4.00	%		17,080		6.00	%
(to Risk Weighted Assets)
Tier 1 Capital		44,185		9.97	%		17,723		4.00	%		22,154		5.00	%
(to Average Assets)
As of December 31, 2012:
Total Capital	$	47,812		16.79	%	$	22,780		8.00	%	$	28,475		10.00	%
(to Risk Weighted Assets)
Tier 1 Capital		44,519		15.63	%		11,390		4.00	%		17,085		6.00	%
(to Risk Weighted Assets)
Tier 1 Capital		44,519		9.99	%		17,822		4.00	%		22,277		5.00	%
(to Average Assets)

Certain regulatory restrictions exist regarding the ability of the Bank to transfer funds to the Company in the form of cash dividends, loans or advances. At December 31, 2013, $39,118,000 of undistributed earnings of the Bank, included in the consolidated stockholders’ equity, was available for distribution to the Company as dividends without prior regulatory approval, subject to the regulatory capital requirements above.

17. Calculation Of Earnings Per Share

Basic earnings per share (EPS) is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share:

	Years Ended December 31,
	2013		2012		2011
	(Amounts, except earnings per share, in thousands)
Net income	$	4,001	$	3,648	$	4,680
Weighted-average common shares outstanding		4,210		4,231		4,241
Basic earnings per share	$	0.95	$	0.86	$	1.10
Weighted-average common shares outstanding		4,210		4,231		4,241
Common stock equivalents due to effect of stock options		1		2		3
Total weighted-average common shares and equivalents	$	4,211	$	4,233	$	4,244
Diluted earnings per share	$	0.95	$	0.86	$	1.10
Anti-dilutive stock options outstanding		78		79		60

18. Accumulated other Comprehensive loss

Components of accumulated other comprehensive loss, net of tax as of December 31 of each of the last three years consist of the following (in thousands):

	12/31/2013			12/31/2012			12/31/2011
Unrealized (losses)  gains on available for sale securities	$	(751	)	$	800		$	823
Unrecognized expense for defined benefit pension		(908	)		(2,219	)		(3,079	)
Accumulated other comprehensive loss	$	(1,659	)	$	(1,419	)	$	(2,256	)

19. Fair Value Measurement

Fair value measurement and disclosure guidance defines fair value as the price that would be received to sell an asset or transfer a liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. Additional guidance is provided on determining when the volume and level of activity for the asset or liability has significantly decreased. The guidance also includes guidance on identifying circumstances when a transaction may not be considered orderly.

Fair value measurement and disclosure guidance provides a list of factors that a reporting entity should evaluate to determine whether there has been a significant decrease in the volume and level of activity for the asset or liability in relation to normal market activity for the asset or liability. When the reporting entity concludes there has been a significant decrease in the volume and level of activity for the asset or liability, further analysis of the information from that market is needed, and significant adjustments to the related prices may be necessary to estimate fair value in accordance with fair value measurement and disclosure guidance.

This guidance clarifies that, when there has been a significant decrease in the volume and level of activity for the asset or liability, some transactions may not be orderly. In those situations, the entity must evaluate the weight of the evidence to determine whether the transaction is orderly. The guidance provides a list of circumstances that may indicate that a transaction is not orderly. A transaction price that is not associated with an orderly transaction is given little, if any, weight when estimating fair value.

Fair value measurement and disclosure guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

Fair value measurement and disclosure guidance requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, the guidance establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

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.

An asset’s or liability’s placement in the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality, the Company’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Securities Available for Sale. Debt securities classified as available for sale are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurement from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. Equity securities classified as available for sale are reported at fair value using Level 1 inputs.

Impaired Loans. Certain impaired loans are reported on a non-recurring basis at the fair value of the underlying collateral since repayment is expected solely from the collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.

Other Real Estate Owned. Certain assets included in other real estate owned are carried at fair value as a result of impairment and accordingly are presented as measured on a non-recurring basis. Values are estimated using Level 3 inputs, based on appraisals that consider the sales prices of property in the proximate vicinity.

Mortgage Servicing Rights. The fair value of servicing assets is based on the present value of estimated future cash flows on pools of mortgages stratified by rate and maturity date and are considered Level 3 inputs.

The following table summarizes financial assets and financial liabilities measured at fair value as of December 31, 2013 and December 31, 2012, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands). There were no transfers of assets between fair value Level 1 and Level 2 during the year ended December 31, 2013.

			(Level 1)		(Level 2)		(Level 3)
			Quoted Prices in		Significant		Significant
			Active Markets		Other		Other
	December 31,		for Identical		Observable		Unobservable
	2013		Assets		Inputs		Inputs
Measured at fair value on a recurring basis:
Debt securities available-for-sale:
Obligations of U.S. Government agencies and corporations	$	78,278	$	-	$	78,278	$	-
Obligations of state and political subdivisions		41,932		-		41,932		-
Mortgage-backed securities		4,469		-		4,469		-
Equity securities available-for-sale		1,367		1,367		-		-
Measured at fair value on a non-recurring basis:
Impaired loans		3,300		-		-		3,300
Other real estate owned		50		-		-		50
Mortgage servicing rights		167		-		-		167

			(Level 1)		(Level 2)		(Level 3)
			Quoted Prices in		Significant		Significant
			Active Markets		Other		Other
	December 31,		for Identical		Observable		Unobservable
	2012		Assets		Inputs		Inputs
Measured at fair value on a recurring basis:
Debt securities available-for-sale:
Obligations of U.S. Government agencies and corporations	$	72,817	$	-	$	72,817	$	-
Obligations of state and political subdivisions		45,976		-		45,976		-
Mortgage-backed securities		2,526		-		2,526		-
Equity securities available-for-sale		1,019		1,019		-		-
Measured at fair value on a non-recurring basis:
Impaired loans		2,056		-		-		2,056
Other real estate owned		50		-		-		50
Mortgage servicing rights		98		-		-		98

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Level 3 inputs have been used to determine fair value:

December 31, 2013	Fair Value Estimate		Valuation Technique	Unobservable Input	Range			Weighted Average
Impaired loans	$	3,300	Appraisal of collateral (1)	Appraisal and liquidation adjustments (2)		(7)% - (10)	%		(9.0	)%
Other real estate owned		50	Appraisal of collateral (1)	Appraisal and liquidation adjustments (2)		0	%		0	%
Mortgage servicing rights		167	Multiple of annual servicing fee	Estimated pre-payment speed, based on rate and term		300% - 400	%		326	%

December 31, 2012	Fair Value Estimate		Valuation Technique	Unobservable Input	Range			Weighted Average
Impaired loans	$	2,056	Appraisal of collateral (1)	Appraisal and liquidation adjustments (2)		(7)% - (10)	%		(8.1	)%
Other real estate owned		50	Appraisal of collateral (1)	Appraisal and liquidation adjustments (2)		0	%		0	%
Mortgage servicing rights		98	Multiple of annual servicing fee	Estimated pre-payment speed, based on rate and term		300% - 400	%		326	%

(1) Fair value is generally determined through independent appraisals of the underlying collateral that generally include various level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

Fair Value of Financial Instruments

Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in sales transactions on the dates indicated. The estimated fair value amounts have been measured as of their respective year ends and have not been re-evaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different from the amounts reported at each year end.

The information presented below should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is provided only for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful.

The following describes the estimated fair value of the Company’s financial instruments as well as the significant methods and assumptions not previously disclosed used to determine these estimated fair values.

Carrying values approximate fair value for cash and due from banks, interest-bearing demand deposits with banks, restricted stock in the Federal Home Loan Bank, interest receivable, mortgage servicing rights, non-interest bearing demand deposits, securities sold under agreements to repurchase, short-term borrowings and interest payable. Other than cash and due from banks, which are considered Level 1 inputs and mortgage servicing rights, which are considered Level 3 inputs, these instruments are Level 2 inputs.

Interest bearing time deposits with banks - The estimated fair value is determined by discounting the contractual future cash flows, using the rates currently offered for deposits of similar remaining maturities.

Loans – For variable-rate loans that reprice frequently and which entail no significant changes in credit risk, carrying values approximated fair value. Substantially all commercial loans and real estate mortgages are variable rate loans. The fair value of other loans (i.e. consumer loans and fixed-rate real estate mortgages) are estimated by calculating the present value of the cash flow difference between the current rate and the market rate, for the average maturity, discounted quarterly at the market rate.

Fixed rate time deposits - The estimated fair value is determined by discounting the contractual future cash flows, using the rates currently offered for deposits of similar remaining maturities.

Other interest bearing liabilities – The fair value is estimated using discounted cash flow analysis, based on incremental borrowing rates for similar types of arrangements.

Commitments to extend credit and letters of credit – The fair value of commitments to extend credit is estimated using the fees currently charged to enter into similar agreements, taking into account market interest rates, the remaining terms and present credit-worthiness of the counterparties. The fair value of guarantees and letters of credit is based on fees currently charged for similar agreements.

The estimated fair values of the Company’s financial instruments are as follows (in thousands):

Financial Instruments
(in thousands)
	December 31, 2013				December  31, 2012
	Carrying		Fair		Carrying		Fair
Financial assets:	Value		Value		Value		Value
Cash and due from banks	$	8,570	$	8,570	$	14,261	$	14,261
Interest bearing deposits with banks		43		43		136		136
Interest bearing time deposits with banks		249		250		847		849
Securities		126,046		126,046		122,338		122,338
Restricted investment in FHLB stock		1,967		1,967		1,726		1,726
Loans, net of allowance for loan losses		275,511		282,226		274,219		286,467
Mortgage servicing rights		167		167		98		98
Accrued interest receivable		1,529		1,529		1,632		1,632
Financial liabilities:
Non-interest bearing deposits		74,611		74,611		71,318		71,318
Interest bearing deposits		305,034		308,414		315,433		319,946
Securities sold under agreements to repurchase		5,397		5,397		3,836		3,836
Short-term borrowings		8,400		8,400		1,600		1,600
Other interest bearing liabilities		1,356		1,358		1,305		1,315
Accrued interest payable		287		287		354		354
Off-balance sheet financial instruments:
Commitments to extend credit		-		-		-		-
Letters of credit		-		-		-		-

The following presents the carrying amount, fair value and placement in the fair value hierarchy of the Company’s financial instruments not previously disclosed as of December 31, 2013 and December 31, 2012. This table excludes financial instruments for which the carrying amount approximates fair value.

					(Level 1)		(Level 2)		(Level 3)
					Quoted Prices in
					Active Markets		Significant		Significant
					for Identical		Other		Other
December 31, 2013	Carrying Amount		Fair Value		Assets or Liabilities		Observable Inputs		Unobservable Inputs
Financial instruments - Assets
Interest bearing time deposits with banks	$	249	$	250	$	-	$	250	$	-
Loans, net of allowance for loan losses		275,511		282,226		-		-		282,226
Financial instruments - Liabilities
Interest bearing deposits		305,034		308,414		-		308,414		-
Other interest bearing liabilities		1,356		1,358		-		1,358		-

					(Level 1)		(Level 2)		(Level 3)
					Quoted Prices in
					Active Markets		Significant		Significant
					for Identical		Other		Other
December 31, 2012	Carrying Amount		Fair Value		Assets or Liabilities		Observable Inputs		Unobservable Inputs
Financial instruments - Assets
Interest bearing time deposits with banks	$	847	$	849	$	-	$	849	$	-
Loans, net of allowance for loan losses		274,219		286,467		-		-		286,467
Financial instruments - Liabilities
Interest bearing deposits		315,433		319,946		-		319,946		-
Other interest bearing liabilities		1,305		1,315		-		1,315		-

20. Employee Benefit Plans

Stock Option Plan

The 2000 Incentive Stock Option Plan expired in May 2010 and was replaced with the 2011 Stock Option Plan in May 2011 (collectively, the “Plans”). The 2011 Stock Option Plan has essentially the same structure as the 2000 plan. Under the provisions of the Plans, while active, options can be granted to officers and key employees of the Company. The Plans provide that the option price per share is not to be less than the fair market value of the stock on the day the option was granted, but in no event less than the par value of such stock. Options granted under the Plans are exercisable no earlier than one year after the date of grant and expire ten years after the date of the grant.

The Plans are administered by a committee of the Board of Directors, whose members are not eligible to receive options under the Plans. The Committee determines, among other things, which officers and key employees receive options, the number of shares to be subject to each option, the option price and the duration of the option. Options vest over three to five years and are exercisable at the grant price, which is at least the fair market value of the stock on the grant date. All options previously granted under the Plans are scheduled to expire through February 20, 2023. The aggregate number of shares that may be issued upon the exercise of options under the 2011 Stock Option Plan is set at 300,000 shares, and 247,300 shares were available for grant as of December 31, 2013. Total options outstanding at December 31, 2013 have exercise prices between $17.22 and $24.00, with a weighted average exercise price of $18.50 and a weighted average remaining contractual life of 6.7 years.

As of December 31, 2013, there was $57,000 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plans. That cost is expected to be recognized through 2018.

Cash received from option exercises under the Plans for the years ended December 31, 2013, 2012 and 2011 was $0, $104,000, and $27,000, respectively.

A summary of the status of the Plans as of December 31, 2013, 2012 and 2011, and changes during the years ending on those dates is presented below:

	2013					2012					2011
	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Outstanding at beginning of year		97,792		$	19.04		90,474		$	18.85		92,953		$	18.83
Granted		21,800			17.65		19,150			18.00		16,050			17.75
Exercised		-			-		(7,207	)		14.47		(1,890	)		14.37
Forfeited		(35,662	)		19.45		(4,625	)		17.89		(16,639	)		18.20
Outstanding at end of year		83,930		$	18.50		97,792		$	19.04		90,474		$	18.85
Options exercisable at year-end		43,079					68,361					67,685
Weighted-average fair value of of options granted during the year				$	1.75				$	1.98				$	1.91
Intrinsic value of options exercised during the year				$	-				$	24,444				$	7,070
Intrinsic value of options outstanding and exercisable at December 31, 2013				$	5,309

The following table summarizes characteristics of stock options as of December 31, 2013:

			Outstanding				Exercisable
Grant Date	Exercise Price		Shares		Contractual Average Life (Years)		Shares
11/15/2004		20.25		1,248		0.88		1,248
10/18/2005		24.00		2,662		1.46		2,662
10/17/2006		21.00		3,195		2.03		3,195
10/16/2007		20.05		5,623		3.20		5,623
10/21/2008		21.10		7,289		4.19		7,289
10/20/2009		17.22		11,213		5.15		10,211
9/20/2011		17.75		13,850		7.72		7,900
3/20/2012		18.00		17,050		8.22		4,951
2/19/2013		17.65		21,800		9.14		-
				83,930				43,079

Defined Benefit Retirement Plan

The Company sponsors a defined benefit retirement plan which covers substantially all of its employees employed prior to December 31, 2007. As of January 1, 2008, the plan was amended to close the plan to new entrants. All active participants as of December 31, 2007 became 100% vested in their accrued benefit and, as long as they remained eligible, continued to accrue benefits until December 31, 2012. The benefits are based on years of service and the employee’s compensation. Effective December 31, 2012, the defined benefit retirement plan was amended to cease future service accruals after that date (frozen). The Company’s funding policy is to contribute annually no more than the maximum amount that can be deducted for federal income tax purposes. Contributions are intended to provide for benefits attributed to service through December 31, 2012. The Company does not expect to contribute to the defined benefit plan in 2014.

Management expects no expense to be recorded as net periodic expense in 2014 for the defined benefit plan, which includes expected amortization out of accumulated other comprehensive loss. The following table sets forth by level, within the fair value hierarchy, debt and equity instruments included in the defined benefit retirement’s plan assets at fair value as of December 31, 2013 and December 31, 2012 (in thousands). Assets included in the plan that are not valued in the hierarchy table consist of cash and cash equivalents, totaling $703,000 and $738,000, at December 31, 2013 and 2012, respectively.

			(Level 1)		(Level 2)		(Level 3)
			Quoted Prices in		Significant Other		Significant Other
	December 31,		Active Markets for		Observable		Unobservable
	2013		Identical Assets		Inputs		Inputs
Measured at fair value on a recurring basis:
U.S. Government and agency securities	$	739	$	-	$	739	$	-
Corporate bonds and notes		2,987		-		2,987		-
Mutual funds
Value funds		2,120		2,120		-		-
Blend funds		1,522		1,522		-		-
Growth funds		1,867		1,867		-		-
Common stocks		4		4		-		-
Money market funds		172		172		-		-
	$	9,411	$	5,685	$	3,726	$	-

			(Level 1)		(Level 2)		(Level 3)
			Quoted Prices in		Significant Other		Significant Other
	December 31,		Active Markets for		Observable		Unobservable
	2012		Identical Assets		Inputs		Inputs
Measured at fair value on a recurring basis:
U.S. Government and agency securities	$	199	$	-	$	199	$	-
Corporate bonds and notes		3,017		-		3,017		-
Mutual funds
Value funds		1,379		1,379		-		-
Blend funds		1,220		1,220		-		-
Growth funds		1,932		1,932		-		-
Common stocks		3		3		-		-
Money market funds		590		590		-		-
	$	8,340	$	5,124	$	3,216	$	-

The measurement date for the defined benefit plan is December 31. Information pertaining to the activity in the defined benefit plan is as follows (in thousands):

	Years ended December 31,
	2013			2012
Change in projected benefit obligation (PBO)
PBO at beginning of year	$	10,022		$	10,438
Service cost		-			222
Interest cost		395			451
Change in assumptions		(962	)		681
Curtailment adjustment		-			(1,393	)
Actuarial loss		91			49
Benefits paid		(438	)		(426	)
PBO at end of year	$	9,108		$	10,022
Change in plan assets
Fair value of plan assets at beginning of year	$	9,078		$	8,625
Actual return on plan assets, net of expenses		1,474			879
Benefits paid		(438	)		(426	)
Fair value of plan assets at end of year	$	10,114		$	9,078
Funded status, included in other assets (liabilities)	$	1,006		$	(944	)
Amounts recognized in accumulated comprehensive loss
before income taxes consist of:
Unrecognized actual loss	$	(1,377	)	$	(3,362	)
Unrecognized net transition asset		1			1
	$	(1,376	)	$	(3,361	)
Accumulated benefit obligation	$	9,108		$	10,022

Pension expense included the following components for the years ended December 31 (in thousands):

	2013			2012			2011
Service cost during the year	$	-		$	222		$	192
Interest cost on projected benefit obligation		395			451			479
Expected return on plan assets		(561	)		(591	)		(631	)
Net accretion (amortization)		(1	)		56			(2	)
Recognized net actuarial loss		203			296			152
Net periodic benefit cost		36			434			190
Net loss (gain)		(1,782	)		(952	)		1,990
Amortization of net loss		(203	)		(296	)		(152	)
Net  amortization (accretion)		1			(56	)		2
Total recognized in other comprehensive loss (income)	$	(1,984	)	$	(1,304	)	$	1,840
Total recognized in net periodic benefit cost and other
comprehensive loss (income)	$	(1,948	)	$	(870	)	$	2,030

Assumptions used to determine benefit obligations were:

	2013			2012			2011
Discount rate		4.75	%		4.00	%		4.40	%
Rate of compensation increase		N/A			N/A			3.00

Assumptions used to determine the net periodic benefit cost were:

	2013			2012			2011
Discount rate		4.00	%		4.40	%		5.50	%
Expected long-term return on plan assets		6.35			7.00			7.00
Rate of compensation increase		N/A			3.00			3.00

The investment strategy and investment policy for the retirement plan is to target the plan assets to contain 50% equity and 50% fixed income securities. The asset allocation as of December 31, 2013 was approximately 43% fixed income securities, 55% equities and 2% cash equivalents.

Future expected benefit payments (in thousands):

	2014		2015		2016		2017		2018		2019-2023
Estimated future benefit payments	$	450	$	444	$	447	$	463	$	510	$	2,633

Defined Contribution Plan

The Company has a Defined Contribution Plan under which employees, through payroll deductions, are able to defer portions of their compensation. The Company makes an annual non-elective fully vested contribution equal to 3% of compensation to each eligible participant. As of December 31, 2013, a liability of $172,000 was recorded to satisfy this obligation, and was credited to employees’ accounts by January 31, 2014. This liability at December 31, 2012 totaled $161,000 and was credited to employee accounts during 2013. Expense incurred under this plan was $175,000, $157,000 and $151,000 in 2013, 2012 and 2011, respectively. Effective January 1, 2013, the Company amended the Defined Contribution Plan to include an employer matching contribution for employees that elect to defer compensation into this program. The matching contribution in 2013 was $123,000.

Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan under which employees, through payroll deductions, are able to purchase shares of Company stock annually. The option price of the stock purchases is between 95% and 100% of the fair market value of the stock on the offering termination date as determined annually by the Board of Directors. The maximum number of shares which employees may purchase under the Plan is 250,000; however, the annual issuance of shares may not exceed 5,000 shares plus any unissued shares from prior offerings. There were 2,823 shares issued in 2013, 2,729 shares issued in 2012 and 2,413 shares issued in 2011 under this plan. At December 31, 2013, there were 187,557 shares reserved for issuance under the Employee Stock Purchase Plan.

Supplemental Retirement Plans

The Company has non-qualified supplemental retirement plans for directors and key employees. At December 31, 2013 and 2012, the present value of the future liability was $533,000 and $627,000, respectively. For the years ended December 31, 2013, 2012 and 2011, $47,000, $56,000 and $73,000, respectively, was charged to expense in connection with these plans. The Company offsets the cost of these plans through the purchase of bank-owned life insurance and annuities. See Note 8.

Deferred Compensation Plans

The Company has entered into deferred compensation agreements with certain directors to provide each director an additional retirement benefit, or to provide their beneficiary a benefit, in the event of pre-retirement death. At December 31, 2013 and 2012, the present value of the future liability was $1,591,000 and $1,661,000, respectively. For the years ended December 31, 2013, 2012 and 2011, $47,000, $66,000 and $83,000, respectively, was charged to expense in connection with these plans. The Company offsets the cost of these plans through the purchase of bank-owned life insurance. See Note 8.

Salary Continuation Plans

The Company has non-qualified salary continuation plans for key employees. At December 31, 2013 and 2012, the present value of the future liability was $1,154,000 and $1,151,000, respectively. For the years ended December 31, 2013, 2012 and 2011, $97,000, $132,000 and $136,000, respectively, was charged to expense in connection with these plans. The Company offsets the cost of these plans through the purchase of bank-owned life insurance. See Note 8.

21. Financial Instruments With Off-Balance Sheet Risk

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments may include commitments to extend credit and letters of credit. These instruments involve, to varying degrees, elements of credit risk that are not recognized in the consolidated financial statements.

Exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit and letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making these commitments and conditional obligations as it does for on-balance sheet instruments. The Company controls the credit risk of its financial instruments through credit approvals, limits and monitoring procedures; however, it does not generally require collateral for such financial instruments since there is no principal credit risk.

A summary of the Company’s financial instrument commitments is as follows (in thousands):

	December 31,
	2013		2012
Commitments to grant loans	$	33,532	$	31,918
Unfunded commitments under lines of credit		7,457		11,246
Outstanding letters of credit		1,199		1,293

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since portions of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained by the Bank upon extension of credit is based on management's credit evaluation of the counter-party. Collateral held varies but may include personal or commercial real estate, accounts receivable, inventory and equipment.

Outstanding letters of credit are instruments issued by the Bank that guarantee the beneficiary payment by the Bank in the event of default by the Bank’s customer in the non-performance of an obligation or service. Most letters of credit are extended for one year periods. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank holds collateral supporting those commitments for which collateral is deemed necessary. The amount of the liability as of December 31, 2013 and 2012 for guarantees under letters of credit issued is not material.

The maximum undiscounted exposure related to these guarantees at December 31, 2013 was $1,199,000, and the approximate value of underlying collateral upon liquidation that would be expected to cover this maximum potential exposure was $1,061,000.

22. Related-Party Transactions

The Bank has granted loans to certain of its executive officers, directors and their related interests. These loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and, in the opinion of management, do not involve more than normal risk of collection. The aggregate dollar amount of these loans was $1,892,000 and $2,370,000 at December 31, 2013 and 2012, respectively. During 2013, $281,000 of new loans were made and repayments totaled $759,000. None of these loans were past due, in non-accrual status or restructured at December 31, 2013 or 2012.

23. Commitments And Contingent Liabilities

In 2009, the Company executed an agreement to obtain technology outsourcing services through an outside service bureau, and those services began in June 2010. The agreement provides for termination fees if the Company cancels the services prior to the end of the 8-year commitment period. The termination fee would be an amount equal to one hundred percent of the estimated remaining value of the terminated services if terminated in the first contract year, ninety percent of the estimated remaining value of the terminated services if terminated in the second contract year, eighty percent and seventy percent of the remaining value of the terminated services if terminated in the third and fourth contract years, respectively, and sixty percent of the remaining value of the terminated services if terminated in contract years five through eight.Termination fees are estimated to be approximately $1,663,000 at December 31, 2013. Since the Company does not expect to terminate these services prior to the end of the commitment period, no liability has been recorded at December 31, 2013.

The Company, from time to time, may be a defendant in legal proceedings relating to the conduct of its banking business. Most of such legal proceedings are a normal part of the banking business and, in management's opinion, the consolidated financial condition and results of operations of the Company would not be materially affected by the outcome of such legal proceedings.

Additionally, the Company has committed to fund and sell qualifying residential mortgage loans to the Federal Home Loan Bank of Pittsburgh in the total amount of $15,000,000. As of December 31, 2013, $14,211,000 remains to be delivered on that commitment, of which $160,000 has been committed to borrowers.

24. Subsequent Events

In January 2014, the Board of Directors declared a dividend of $0.22 per share for the first quarter of 2014 to shareholders of record on February 14, payable on March 3, 2014.

25. Juniata Valley Financial Corp. (Parent Company Only)

Financial information:

CONDENSED BALANCE SHEETS
(in thousands)
	December 31,
	2013		2012
ASSETS:
Cash and cash equivalents	$	365	$	231
Investment in bank subsidiary		44,589		45,285
Investment in unconsolidated subsidiary		4,172		4,000
Investment securities available for sale		1,127		954
Other assets		56		15
TOTAL ASSETS	$	50,309	$	50,485
LIABILITIES:
Accounts payable and other liabilities	$	325	$	188
STOCKHOLDERS' EQUITY		49,984		50,297
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	50,309	$	50,485

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(in thousands)
	Years Ended December 31,
	2013			2012		2011
INCOME:
Interest and dividends on investment securities available for sale	$	28		$	41	$	44
Dividends from bank subsidiary		4,290			2,793		4,217
Income from unconsolidated subsidiary		237			249		263
TOTAL INCOME		4,555			3,083		4,524
EXPENSE:
Non-interest expense		140			80		140
TOTAL EXPENSE		140			80		140
INCOME BEFORE INCOME TAXES AND EQUITY
IN UNDISTRIBUTED NET (LOSS) INCOME OF SUBSIDIARY		4,415			3,003		4,384
Income tax expense		23			47		36
		4,392			2,956		4,348
Undistributed net (loss) income of subsidiary		(391	)		692		332
NET INCOME	$	4,001		$	3,648	$	4,680
COMPREHENSIVE INCOME	$	3,761		$	4,485	$	3,889

CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
	Years Ended December 31,
	2013			2012			2011
Cash flows from operating activities:
Net income	$	4,001		$	3,648		$	4,680
Adjustments to reconcile net income to net cash provided by operating activities:
Undistributed net loss (income) of subsidiary		391			(692	)		(332	)
Net amortization of securities premiums		-			2			2
Equity in earnings of unconsolidated subsidiary, net of dividends of $47, $45 and $29		(190	)		(204	)		(234	)
(Increase) decrease in other assets		(42	)		12			2
Increase in taxes payable		87			127			68
(Decrease) increase in accounts payable and other liabilities		(7	)		(2	)		19
Net cash provided by operating activities		4,240			2,891			4,205
Cash flows from investing activities:
Purchases of available for sale securities		(252	)		-			(50	)
Proceeds from the maturity of available for sale investment securities		250			1,235			-
Net cash (used in) provided by investing activities		(2	)		1,235			(50	)
Cash flows from financing activities:
Cash dividends		(3,707	)		(3,724	)		(3,648	)
Purchase of treasury stock		(445	)		(360	)		(589	)
Treasury stock issued for dividend reinvestment and employee stock purchase plan		48			151			66
Net cash used in financing activities		(4,104	)		(3,933	)		(4,171	)
Net increase (decrease) in cash and cash equivalents		134			193			(16	)
Cash and cash equivalents at beginning of year		231			38			54
Cash and cash equivalents at end of year	$	365		$	231		$	38

26. Quarterly Results Of Operations (Unaudited)

The unaudited quarterly results of operations for the years ended December 31, 2013 and 2012 follow (in thousands, except per-share data):

	2013 Quarter ended
	March 31		June 30		September 30		December 31
Total interest income	$	4,144		4,173		4,224		4,193
Total interest expense		763		741		719		677
Net interest income		3,381		3,432		3,505		3,516
Provision for loan losses		80		86		100		149
Gains from the sale of loans		97		85		84		72
Other income		980		970		939		1,006
Other expense		3,035		3,330		3,349		3,432
Income before income taxes		1,343		1,071		1,079		1,013
Income tax expense		337		62		60		46
Net income	$	1,006	$	1,009	$	1,019	$	967
Per-share data:
Basic earnings	$	.24	$	.24	$	.24	$	.23
Diluted earnings		.24		.24		.24		.23
Cash dividends		.22		.22		.22		.22

	2012 Quarter ended
	March 31		June 30		September 30		December 31
Total interest income	$	4,711	$	4,605	$	4,464	$	4,390
Total interest expense		972		924		898		854
Net interest income		3,739		3,681		3,566		3,536
Provision for loan losses		1,108		69		60		174
Gains from the sale of loans		65		149		208		147
Other income		977		1,046		1,045		955
Other expense		3,245		3,220		3,273		3,339
Income before income taxes		428		1,587		1,486		1,125
Income tax expense		10		372		354		242
Net income	$	418	$	1,215	$	1,132	$	883
Per-share data:
Basic earnings	$	.10	$	.29	$	.27	$	.20
Diluted earnings		.10		.29		.27		.20
Cash dividends		.22		.22		.22		.22

Common Stock Market Prices and Dividends

The common stock of Juniata Valley Financial Corp. is quoted under the symbol “JUVF” on the over-the-counter (“OTC”) Electronic Bulletin Board, a regulated electronic quotation service made available through, and governed by, the NASDAQ system. As of December 31, 2013, the number of stockholders of record of the Company’s common stock was 1,767.

The following table presents the quarterly high and low prices of the Company’s common stock and per common share cash dividends declared for each of the quarterly periods in 2013 and 2012.

	2013
Quarter Ended	High		Low		Dividends Declared
March 31	$	18.49	$	17.00	$	0.22
June 30		18.08		17.55		0.22
September 30		18.50		17.30		0.22
December 31		17.85		16.80		0.22

	2012
Quarter Ended	High		Low		Dividends Declared
March 31	$	18.95	$	17.60	$	0.22
June 30		18.85		17.30		0.22
September 30		18.90		17.35		0.22
December 31		18.50		17.65		0.22

As stated in “Note 16 – Stockholders’ Equity and Regulatory Matters” in the Notes to Consolidated Financial Statements, the Company is subject to various regulatory capital requirements that limit the amount of capital available for dividends. While the Company expects to continue its policy of regular dividend payments, no assurance of future dividend payments can be given. Future dividend payments will depend upon maintenance of a strong financial condition, future earnings, capital and regulatory requirements, future prospects, business conditions and other factors deemed relevant by the Board of Directors.

For further information on stock quotes, please contact any licensed broker-dealer, some of which make a market in Juniata Valley Financial Corp. stock.

Corporate Information

Corporate Headquarters

Juniata Valley Financial Corp.

Bridge and Main Streets

P.O. Box 66

Mifflintown, PA 17059

(855) 582-5101

JVBonline.com

Investor Information

JoAnn N. McMinn,

Executive Vice President and Chief Financial Officer

P.O. Box 66

Mifflintown, PA 17059

JoAnn.McMinn@JVBonline.com

Information Availability

Information about the Company’s financial performance may be found at www.JVBonline.com, following the “Investor Information” link.

All reports filed electronically by Juniata Valley Financial Corp. with the United States Securities and Exchange Commission (SEC), including the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, as well as any amendments to those reports, are also accessible at no cost on the SEC’s web site at www.SEC.gov.

Additionally, a copy of the Company’s Annual Report to the SEC on Form 10-K for the year ended December 31, 2013 will be supplied without charge (except for exhibits) upon written request. Please direct all inquiries to Ms. JoAnn McMinn, as detailed above.

Pursuant to Part 350 of FDIC’s Annual Disclosure Regulation, Juniata Valley Financial Corp. will make available to you upon request, financial information about The Juniata Valley Bank. Please contact:

Ms. Danyelle Pannebaker

The Juniata Valley Bank

P.O. Box 66

Mifflintown, PA 17059

Investment Considerations

In analyzing whether to make, or to continue, an investment in Juniata Valley Financial Corp., investors should consider, among other factors, the information contained in this Annual Report and certain investment considerations and other information more fully described in our Annual Report on Form 10-K for the year ended December 31, 2013, a copy of which can be obtained as described above.

Registrar and Transfer Agent

Registrar and Transfer Company

10 Commerce Drive

Cranford, New Jersey 07016-3572

Telephone: (800) 368-5948

Website: www.RTCo.com

Email: info@RTCo.com

Stockholders of record may access their accounts via the Internet to review account holdings and transaction history through Registrar and Transfer Company’s website: www.RTCo.com.

Information regarding the Company’s Dividend Reinvestment and Stock Purchase Plan, including a Prospectus, may be obtained by contacting Registrar and Transfer Company, through the means listed above.

The Company offers a dividend direct deposit option whereby shareholders of record may have their dividends deposited directly into the bank account of their choice on the dividend payment date. Please contact Registrar and Transfer Company for further information and to register for this service.

Annual Meeting of Shareholders

The Annual Meeting of Shareholders of Juniata Valley Financial Corp. will be held at 10:30 a.m., on Tuesday, May 20, 2014 at the Quality Inn Suites, 13015 Ferguson Valley Road, Burnham, Pennsylvania.

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF JUNIATA VALLEY FINANCIAL CORP.

Name of Subsidiary	State or Jurisdiction of Incorporation	Trade Name (If any)
The Juniata Valley Bank	Pennsylvania	None
Bridge and Main Streets
Mifflintown, PA  17059

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3D (No. 033-64369) filed with the SEC on November 17, 1995, Form S-8 (No. 333-02007) filed with the SEC on March 28, 1996, Form S-8 (No. 333-36610) filed with the SEC on May 9, 2000, Form S-3D (No. 333-129023) filed with the SEC on October 14, 2005, and Form S-8 (No. 333-174667) filed with the SEC on June 2, 2011 of Juniata Valley Financial Corp. of our reports dated March 14, 2014, relating to the consolidated financial statements and the effectiveness of Juniata Valley Financial Corp.’s internal control over financial reporting, which appear in this Annual Report on Form 10-K for the year ended December 31, 2013.

/s/ BDO USA, LLP

Harrisburg, Pennsylvania

March 14, 2014

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     We hereby consent to the incorporation by reference in the Registration Statements on Form S-3D (No. 033-64369) filed with the SEC on November 17, 1995, Form S-8 (No. 333-02007) filed with the SEC on March 28, 1996, Form S-8 (No. 333-36610) filed with the SEC on May 9, 2000, Form S-3D (No. 333-129023) filed with the SEC on October 14, 2005, and Form S-8 (No. 333-174667) filed with the SEC on June 2, 2011 of Juniata Valley Financial Corp. of our report dated March 15, 2013, relating to the consolidated statement of financial condition as of December 31, 2012 and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2012, which appear in this Annual Report on Form 10-K for the year ended December 31, 2013.

/s/ ParenteBeard LLC

Pittsburgh, Pennsylvania

March 14, 2014

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Marcie A. Barber, certify that:

1. I have reviewed this annual report on Form 10-K of Juniata Valley Financial Corp.;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision 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 report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  03/14/2014	/s/ Marcie A. Barber
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, JoAnn N. McMinn, certify that:

1. I have reviewed this annual report on Form 10-K of Juniata Valley Financial Corp.;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision 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 report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  03/14/2014	/s/ JoAnn N. McMinn
	Chief Financial Officer

EX-32.1

Exhibit 32.1

SECTION 1350 CERTIFICATION

I, Marcie A. Barber, of Juniata Valley Financial Corp., certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1. The Annual Report on Form 10-K of the Company for the annual period ended December 31, 2013 (“the Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

/s/ Marcie A. Barber
Chief Executive Officer	Date:  03/14/2014

EX-32.2

Exhibit 32.2

SECTION 1350 CERTIFICATION

I, JoAnn N. McMinn, of Juniata Valley Financial Corp., certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1. The Annual Report on Form 10-K of the Company for the annual period ended December 31, 2013 (“the Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

/s/ JoAnn N. McMinn
Chief Financial Officer	Date:  03/14/2014

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Securities (Tables)

12 Months Ended

Dec. 31, 2013

Securities [Abstract]

Securities Available for Sale

The amortized cost and fair value of securities as of December 31, 2013 and 2012, by contractual maturity, are shown below (in thousands). Expected maturities may differ from contractual maturities because the securities may be called or prepaid with or without prepayment penalties.

		December 31, 2013
Securities Available for Sale						Gross		Gross
		Amortized		Fair		Unrealized		Unrealized
Type and maturity		Cost		Value		Gains		Losses
Obligations of Government agencies and corporations
Within one year	$	4,177	$	4,192	$	15	$	-
After one year but within five years		48,011		47,578		203		(636)
After five years but within ten years		27,615		26,508		-		(1,107)
		79,803		78,278		218		(1,743)
Obligations of state and political subdivisions
Within one year		8,260		8,314		55		(1)
After one year but within five years		26,027		26,098		133		(62)
After five years but within ten years		7,224		7,182		56		(98)
After ten years		350		338		-		(12)
		41,861		41,932		244		(173)
Mortgage-backed securities		4,465		4,469		7		(3)
Equity securities		1,055		1,367		366		(54)
Total	$	127,184	$	126,046	$	835	$	(1,973)

		December 31, 2012
Securities Available for Sale						Gross		Gross
		Amortized		Fair		Unrealized		Unrealized
Type and maturity		Cost		Value		Gains		Losses
Obligations of Government agencies and corporations
Within one year	$	7,908	$	7,996	$	88	$	-
After one year but within five years		42,253		42,796		543		-
After five years but within ten years		22,004		22,025		53		(32)
		72,165		72,817		684		(32)
Obligations of state and political subdivisions
Within one year		10,448		10,505		57		-
After one year but within five years		29,595		29,809		246		(32)
After five years but within ten years		4,727		4,936		215		(6)
After ten years		731		726		-		(5)
		45,501		45,976		518		(43)
Mortgage-backed securities		2,502		2,526		24		-
Equity securities		985		1,019		145		(111)
Total	$	121,153	$	122,338	$	1,371	$	(186)

Summary of Proceeds and Realized Gain/(Loss)

Following is a summary of proceeds received from all investment securities transactions and the resulting realized gains and losses (in thousands):

				Years Ended December 31,
		2013		2012		2011
Gross proceeds from sales of securities	$	-	$	-	$	-
Securities available for sale:
Gross realized gains from called securities	$	-	$	2	$	6
Gross realized losses from called securities		(2)		-		-

Schedule of Unrealized Losses

The following table shows gross unrealized losses and fair value, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2013 (in thousands):

		Unrealized Losses at December 31, 2013
		Less Than 12 Months				12 Months or More				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
Obligations of U.S. Government
agencies and corporations	$	53,438	$	(1,664)	$	1,921	$	(79)	$	55,359	$	(1,743)
Obligations of state and political
subdivisions		11,496		(130)		4,301		(43)		15,797		(173)
Mortgage-backed securities		308		(3)		-		-		308		(3)
Debt securities		65,242		(1,797)		6,222		(122)		71,464		(1,919)
Equity securities		-		-		266		(54)		266		(54)
Total temporarily impaired securities	$	65,242	$	(1,797)	$	6,488	$	(176)	$	71,730	$	(1,973)

The following table shows gross unrealized losses and fair value, aggregated by category and length of time that individual securities had been in a continuous unrealized loss position, at December 31, 2012 (in thousands):

		Unrealized Losses at December 31, 2012
		Less Than 12 Months				12 Months or More				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
Obligations of U.S. Government
agencies and corporations	$	11,471	$	(32)	$	-	$	-	$	11,471	$	(32)
Obligations of state and political
subdivisions		13,040		(43)		-		-		13,040		(43)
Debt securities		24,511		(75)		-		-		24,511		(75)
Equity securities		249		(13)		251		(98)		500		(111)
Total temporarily impaired securities	$	24,760	$	(88)	$	251	$	(98)	$	25,011	$	(186)

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Quarterly Results of Operations (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2013

Quarterly Results of Operations (Unaudited) [Abstract]

Schedule of Quarterly Financial Information

The unaudited quarterly results of operations for the years ended December 31, 2013 and 2012 follow (in thousands, except per-share data):

		2013 Quarter ended
		March 31		June 30		September 30		December 31
Total interest income	$	4,144		4,173		4,224		4,193
Total interest expense		763		741		719		677
Net interest income		3,381		3,432		3,505		3,516
Provision for loan losses		80		86		100		149
Gains from the sale of loans		97		85		84		72
Other income		980		970		939		1,006
Other expense		3,035		3,330		3,349		3,432
Income before income taxes		1,343		1,071		1,079		1,013
Income tax expense		337		62		60		46
Net income	$	1,006	$	1,009	$	1,019	$	967
Per-share data:
Basic earnings		$.24		$.24		$.24		$.23
Diluted earnings		.24		.24		.24		.23
Cash dividends		.22		.22		.22		.22
		2012 Quarter ended
		March 31		June 30		September 30		December 31
Total interest income	$	4,711	$	4,605	$	4,464	$	4,390
Total interest expense		972		924		898		854
Net interest income		3,739		3,681		3,566		3,536
Provision for loan losses		1,108		69		60		174
Gains from the sale of loans		65		149		208		147
Other income		977		1,046		1,045		955
Other expense		3,245		3,220		3,273		3,339
Income before income taxes		428		1,587		1,486		1,125
Income tax expense		10		372		354		242
Net income	$	418	$	1,215	$	1,132	$	883
Per-share data:
Basic earnings		$.10		$.29		$.27		$.20
Diluted earnings		.10		.29		.27		.20
Cash dividends		.22		.22		.22		.22

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Calculation of Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2013

Calculation of Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share:

	Years Ended December 31,
		2013		2012		2011
	(Amounts, except earnings per share, in thousands)
Net income	$	4,001	$	3,648	$	4,680
Weighted-average common shares outstanding		4,210		4,231		4,241
Basic earnings per share	$	0.95	$	0.86	$	1.10
Weighted-average common shares outstanding		4,210		4,231		4,241
Common stock equivalents due to effect of stock options		1		2		3
Total weighted-average common shares and equivalents	$	4,211	$	4,233	$	4,244
Diluted earnings per share	$	0.95	$	0.86	$	1.10
Anti-dilutive stock options outstanding		78		79		60

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Pledged Assets (Narrative) (Details) (USD $)	Dec. 31, 2013
Pledged Assets [Abstract]
Loans pledged as collateral	$ 190,905,000
Loans pledged as collateral, fair value	135,454,000
Securities pledged as collateral	$ 0

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Summary of Significant Accounting Policies (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012 security	Dec. 31, 2011 security	Dec. 31, 2013 Leasehold Improvements [Member]	Dec. 31, 2013 Minimum [Member]	Dec. 31, 2013 Minimum [Member] Furniture and Equipment [Member]	Dec. 31, 2013 Minimum [Member] Building [Member]	Dec. 31, 2013 Maximum [Member] Furniture and Equipment [Member]	Dec. 31, 2013 Maximum [Member] Building [Member]	Dec. 31, 2012 Investment in Federal Home Loan Bank Stock [Member]	Dec. 31, 2011 Investment in Federal Home Loan Bank Stock [Member]	Dec. 31, 2010 Investment in Federal Home Loan Bank Stock [Member]	Dec. 31, 2013 Real Estate - Commercial [Member]	Dec. 31, 2013 Real Estate - Mortgage [Member]	Dec. 31, 2013 Real Estate - Mortgage [Member] Maximum [Member]	Dec. 31, 2013 Home Equity Installments [Member]	Dec. 31, 2013 Home Equity Lines of Credit [Member]	Dec. 31, 2013 Home equity installment loans [Member]	Dec. 31, 2013 Home equity lines of credit [Member]
Summary of Significant Accounting Policies [Line Items]
Percentage of total capital	25.00%
Maturity of interest-bearing time deposits					1 year
Mortgage servicing rights	$ 167,000	$ 98,000
Held-to-maturity securities, number of holdings		0	0
Securities impairment charge										0	0	0
Net unamortized origination fees	123,000	42,000
Usual period of lines of credit for commercial, financial and agricultural lending	5 years
Loan period for lending													20 years		25 years	15 years	20 years
Maximum loan-to-value ratio													80.00%	80.00%				80.00%	90.00%
Other real estate owned	281,000	428,000
Non-accrual loan status period	90 days
Loans consideration write off period in default.	120 days
Mortgage banking and servicing	18,688,000	11,295,000
Estimate useful life of property and equipment						3 years	25 years	10 years	50 years
Estimate useful life of property and equipment, description				shorter of the assets' useful life or the related lease term
Investment in low-income housing limited partnership	3,990,000	3,796,000
Income tax credits	575,000
Income tax credits and adjustments period	10 years
Accrued benefit liability	792,000	738,000
Other postretirement benefit	54,000	29,000	49,000
Advertising expense	207,000	172,000	144,000
Share-based compensation expense	$ 30,000	$ 25,000	$ 26,000

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Deposits (Schedule of Maturities of Time Deposits) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013
Time Deposits $100,000 or More [Member]
2013	$ 14,526
2014	10,222
2015	2,456
2016	1,375
2017	1,329
Later	1,087
Time Deposits, $100,000 or More	30,995
Time Deposits Less Than $100,000 [Member]
2013	55,671
2014	35,221
2015	13,886
2016	6,914
2017	7,426
Later	4,293
Time Deposits, Other	123,411
Certificates of Deposit [Member]
2013	70,197
2014	45,443
2015	16,342
2016	8,289
2017	8,755
Later	5,380
Total CD's	$ 154,406

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Financial Instruments With Off-Balance Sheet Risk (Summary of Financial Instrument Commitments) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Commitments to Grant Loans and Unfunded Commitments Under Lines of Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability	$ 33,532	$ 31,918
Unfunded Commitments Under Lines of Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability	7,457	11,246
Outstanding letters of Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability	$ 1,199	$ 1,293

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Taxes [Abstract]

Components of Income Tax Expense

The components of income tax expense for the three years ended December 31 were (in thousands):

		2013		2012		2011
Current tax (benefit) expense	$	(157)	$	1,042	$	1,562
Deferred tax expense (benefit)		662		(64)		(20)
Total tax expense	$	505	$	978	$	1,542

Effective Income Tax Rate Reconciliation

A reconciliation of the statutory income tax expense computed at 34% to the income tax expense included in the consolidated statements of income follows (dollars in thousands):

	Years Ended December 31,
		2013		2012		2011
Income before income taxes	$	4,506	$	4,626	$	6,222
Effective tax rate		34.0%		34.0%		34.0%
Federal tax at statutory rate		1,532		1,573		2,115
Tax-exempt interest		(354)		(431)		(439)
Net earnings on BOLI		(108)		(148)		(133)
Dividend from unconsolidated subsidiary		(13)		(12)		(8)
Stock-based compensation		10		2		7
Federal tax credits		(556)		-		-
Other permanent differences		(6)		(6)		-
Total tax expense	$	505	$	978	$	1,542
Effective tax rate		11.2%		21.1%		24.8%

Schedule of Deferred Tax Assets and Liabilities

The components giving rise to the net deferred tax asset are detailed below (in thousands):

		December 31,
		2013		2012
Deferred Tax Assets
Allowance for loan losses	$	639	$	1,000
Deferred directors' compensation		541		565
Employee and director benefits		574		605
Qualified pension liability		-		321
Unrealized losses on securities available for sale		387		-
Unrealized loss from securities impairment		221		221
Other		109		160
Total deferred tax assets		2,471		2,872
Deferred Tax Liabilities
Depreciation		(223)		(236)
Equity income from unconsolidated subsidiary		(462)		(398)
Qualified pension asset		(342)		-
Loan origination costs		(287)		(223)
Prepaid expense		(95)		(90)
Unrealized gains on securities available for sale		-		(403)
Annuity earnings		(63)		(58)
Fair value of mortgage servicing rights		(57)		(33)
Goodwill		(340)		(294)
Total deferred tax liabilities		(1,869)		(1,735)
Net deferred tax asset
included in other assets	$	602	$	1,137

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Juniata Valley Financial Corp. (Parent Company Only)

12 Months Ended

Dec. 31, 2013

Juniata Valley Financial Corp. (Parent Company Only) [Abstract]

JUNIATA VALLEY FINANCIAL CORP. (PARENT COMPANY ONLY)

25.  Juniata Valley Financial Corp. (Parent Company Only)

Financial information:

CONDENSED BALANCE SHEETS
(in thousands)
	December 31,
		2013		2012
ASSETS:
Cash and cash equivalents	$	365	$	231
Investment in bank subsidiary		44,589		45,285
Investment in unconsolidated subsidiary		4,172		4,000
Investment securities available for sale		1,127		954
Other assets		56		15
TOTAL ASSETS	$	50,309	$	50,485
LIABILITIES:
Accounts payable and other liabilities	$	325	$	188
STOCKHOLDERS' EQUITY		49,984		50,297
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	50,309	$	50,485

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(in thousands)
		Years Ended December 31,
		2013		2012		2011
INCOME:
Interest and dividends on investment securities available for sale	$	28	$	41	$	44
Dividends from bank subsidiary		4,290		2,793		4,217
Income from unconsolidated subsidiary		237		249		263
TOTAL INCOME		4,555		3,083		4,524
EXPENSE:
Non-interest expense		140		80		140
TOTAL EXPENSE		140		80		140
INCOME BEFORE INCOME TAXES AND EQUITY
IN UNDISTRIBUTED NET (LOSS) INCOME OF SUBSIDIARY		4,415		3,003		4,384
Income tax expense		23		47		36
		4,392		2,956		4,348
Undistributed net (loss) income of subsidiary		(391)		692		332
NET INCOME	$	4,001	$	3,648	$	4,680
COMPREHENSIVE INCOME	$	3,761	$	4,485	$	3,889

CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
	Years Ended December 31,
		2013		2012		2011
Cash flows from operating activities:
Net income	$	4,001	$	3,648	$	4,680
Adjustments to reconcile net income to net cash provided by operating activities:
Undistributed net loss (income) of subsidiary		391		(692)		(332)
Net amortization of securities premiums		-		2		2
Equity in earnings of unconsolidated subsidiary, net of dividends of $47, $45 and $29		(190)		(204)		(234)
(Increase) decrease in other assets		(42)		12		2
Increase in taxes payable		87		127		68
(Decrease) increase in accounts payable and other liabilities		(7)		(2)		19
Net cash provided by operating activities		4,240		2,891		4,205
Cash flows from investing activities:
Purchases of available for sale securities		(252)		-		(50)
Proceeds from the maturity of available for sale investment securities		250		1,235		-
Net cash (used in) provided by investing activities		(2)		1,235		(50)
Cash flows from financing activities:
Cash dividends		(3,707)		(3,724)		(3,648)
Purchase of treasury stock		(445)		(360)		(589)
Treasury stock issued for dividend reinvestment and employee stock purchase plan		48		151		66
Net cash used in financing activities		(4,104)		(3,933)		(4,171)
Net increase (decrease) in cash and cash equivalents		134		193		(16)
Cash and cash equivalents at beginning of year		231		38		54
Cash and cash equivalents at end of year	$	365	$	231	$	38

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Borrowings (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Short-term Debt [Line Items]
Maximum balance of short-term borrowings	$ 13,863
Percentage of repurchase agreements collateralized by Government securities	100.00%
Carrying value of pledged assets	31,921	30,785
Maximum borrowing capacity with the Federal Home Loan Bank of Pittsburgh ("FHLB")	135,454
Amount outstanding with Federal Home Loan Bank ("FHLB")	8,400
Maximum borrowing capacity under the credit facility without the purchase of additional stock	2,021
Line of credit facility, revolving line of credit, maximum borrowing capacity		20,000
Securities Sold under Agreements to Repurchase [Member]
Short-term Debt [Line Items]
Carrying value of pledged assets	$ 8,919

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Premises And Equipment (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Premises and Equipment [Abstract]
Depreciation	$ 497	$ 524	$ 581

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Calculation of Earnings Per Share (Earnings Per Share) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Calculation of Earnings Per Share [Abstract]
Net income	$ 967	$ 1,019	$ 1,009	$ 1,006	$ 883	$ 1,132	$ 1,215	$ 418	$ 4,001	$ 3,648	$ 4,680
Weighted-average common shares outstanding									4,210,336	4,231,404	4,241,286
Basic earnings per share	$ 0.23	$ 0.24	$ 0.24	$ 0.24	$ 0.20	$ 0.27	$ 0.29	$ 0.10	$ 0.95	$ 0.86	$ 1.10
Common stock equivalents due to effect of stock options									1,000	2,000	3,000
Total weighted-average common shares and equivalents									4,211,078	4,233,448	4,244,507
Diluted earnings per share	$ 0.23	$ 0.24	$ 0.24	$ 0.24	$ 0.20	$ 0.27	$ 0.29	$ 0.10	$ 0.95	$ 0.86	$ 1.10
Anit-dilutive stock options outstanding									78	79	60

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Restrictions on Cash and Due From Banks (Narrative) (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Restrictions on Cash and Due from Banks [Abstract]
Restricted Cash and Cash Equivalents	$ 362,000	$ 225,000

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Juniata Valley Financial Corp. (Parent Company Only) (Schedule of Condensed Statements of Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income from unconsolidated subsidiary									$ 237	$ 249	$ 263
Non-interest expense	3,432	3,349	3,330	3,035	3,339	3,273	3,220	3,245	13,146	13,077	12,802
Income Tax Expense (Benefit)	46	60	62	337	242	354	372	10	505	978	1,542
Net income	967	1,019	1,009	1,006	883	1,132	1,215	418	4,001	3,648	4,680
COMPREHENSIVE INCOME									3,761	4,485	3,889
Parent Company [Member]
Interest and dividends on investment securities available for sale									28	41	44
Dividends from bank subsidiary									4,290	2,793	4,217
Income from unconsolidated subsidiary									237	249	263
TOTAL INCOME									4,555	3,083	4,524
Non-interest expense									140	80	140
TOTAL EXPENSE									140	80	140
INCOME BEFORE INCOME TAXES (BENEFIT) AND EQUITY IN UNDISTRIBUTED NET INCOME OF SUBSIDIARY									4,415	3,003	4,384
Income Tax Expense (Benefit)									23	47	36
INCOME BEFORE EQUITY IN UNDISTRIBUTED NET INCOME OF SUBSIDIARY									4,392	2,956	4,348
Undistributed net income of subsidiary									(391)	692	332
Net income									4,001	3,648	4,680
COMPREHENSIVE INCOME									$ 3,761	$ 4,485	$ 3,889

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Investment in Unconsolidated Subsidiary (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Investment in Unconsolidated Subsidiary [Abstract]
Ownership percentage in Liverpool Community Bank	39.16%
Investment in unconsolidated subsidiary	$ 4,172	$ 4,000

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Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Deferred Tax Assets
Allowance for loan losses	$ 639	$ 1,000
Deferred directors' compensation	541	565
Employee and director benefits	574	605
Qualified pension liability		321
Unrealized losses on securities available for sale	387
Unrealized loss from securities impairment	221	221
Other	109	160
Total deferred tax assets	2,471	2,872
Deferred Tax Liabilities
Depreciation	(223)	(236)
Equity income from unconsolidated subsidiary	(462)	(398)
Qualified pension asset	(342)
Loan origination costs	(287)	(223)
Prepaid expense	(95)	(90)
Unrealized gains on securities available for sale		(403)
Annuity earnings	(63)	(58)
Fair value of mortgage servicing rights	(57)	(33)
Goodwill	(340)	(294)
Total deferred tax liabilities	(1,869)	(1,735)
Net deferred tax asset included in other assets	$ 602	$ 1,137

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Operating Lease Obligations (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Operating Lease Obligations [Abstract]
Rental expense including license fees	$ 122	$ 114	$ 108

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Stockholders' Equity And Regulatory Matters (Narrative) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Stockholders' Equity And Regulatory Matters [Abstract]
Preferred Stock, Authorized	500,000	500,000
Preferred Stock Par Value	$ 0	$ 0
Preferred Stock, Issued	0	0
Shares Available For Issuance Under Dividend Reinvestment Plan	141,887
Common Shares Repurchased Under Repurchase Program	24,918	19,793	33,850
Remaining Number of Shares Authorized Under Repurchase Program	43,475
Undistributed Earnings of Subsidiary, Available for Distribution	$ 39,118

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Deposits (Schedule of Deposits) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Deposits [Abstract]
Demand, non-interest bearing	$ 74,611	$ 71,318
NOW and Money Market	89,867	90,349
Savings	60,761	56,382
Time deposits, $100,000 or more	30,995	33,007
Other time deposits	123,411	135,695
Total deposits	$ 379,645	$ 386,751

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Bank Owned Life Insurance and Annuities (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Bank Owned Life Insurance and Annuities [Abstract]
Bank owned life insurance and annuities, cash value	$ 14,848	$ 14,402	$ 14,069
Increase in cash surrender value of bank-owned life insurance	$ 446	$ 333	$ 501

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Calculation of Earnings Per Share

12 Months Ended

Dec. 31, 2013

Calculation of Earnings Per Share [Abstract]

CALCULATION OF EARNINGS PER SHARE

17.  Calculation Of Earnings Per Share

Basic earnings per share (EPS) is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share:

	Years Ended December 31,
		2013		2012		2011
	(Amounts, except earnings per share, in thousands)
Net income	$	4,001	$	3,648	$	4,680
Weighted-average common shares outstanding		4,210		4,231		4,241
Basic earnings per share	$	0.95	$	0.86	$	1.10
Weighted-average common shares outstanding		4,210		4,231		4,241
Common stock equivalents due to effect of stock options		1		2		3
Total weighted-average common shares and equivalents	$	4,211	$	4,233	$	4,244
Diluted earnings per share	$	0.95	$	0.86	$	1.10
Anti-dilutive stock options outstanding		78		79		60

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements by Level of Valuation Inputs

The following table summarizes financial assets and financial liabilities measured at fair value as of December 31, 2013 and December 31, 2012, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands). There were no transfers of assets between fair value Level 1 and Level 2 during the year ended December 31, 2013.

				(Level 1)		(Level 2)		(Level 3)
				Quoted Prices in		Significant		Significant
				Active Markets		Other		Other
		December 31,		for Identical		Observable		Unobservable
		2013		Assets		Inputs		Inputs
Measured at fair value on a recurring basis:
Debt securities available-for-sale:
Obligations of U.S. Government agencies and corporations	$	78,278	$	-	$	78,278	$	-
Obligations of state and political subdivisions		41,932		-		41,932		-
Mortgage-backed securities		4,469		-		4,469		-
Equity securities available-for-sale		1,367		1,367		-		-
Measured at fair value on a non-recurring basis:
Impaired loans		3,300		-		-		3,300
Other real estate owned		50		-		-		50
Mortgage servicing rights		167		-		-		167
				(Level 1)		(Level 2)		(Level 3)
				Quoted Prices in		Significant		Significant
				Active Markets		Other		Other
		December 31,		for Identical		Observable		Unobservable
		2012		Assets		Inputs		Inputs
Measured at fair value on a recurring basis:
Debt securities available-for-sale:
Obligations of U.S. Government agencies and corporations	$	72,817	$	-	$	72,817	$	-
Obligations of state and political subdivisions		45,976		-		45,976		-
Mortgage-backed securities		2,526		-		2,526		-
Equity securities available-for-sale		1,019		1,019		-		-
Measured at fair value on a non-recurring basis:
Impaired loans		2,056		-		-		2,056
Other real estate owned		50		-		-		50
Mortgage servicing rights		98		-		-		98

Quantitative Information for Assets Measured at Fair Value

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Level 3 inputs have been used to determine fair value:

December 31, 2013	Fair Value Estimate		Valuation Technique	Unobservable Input	Range	Weighted Average
Impaired loans	$	3,300	Appraisal of collateral (1)	Appraisal and liquidation adjustments (2)	(7)% - (10)%	(9.0)%
Other real estate owned		50	Appraisal of collateral (1)	Appraisal and liquidation adjustments (2)	0%	0%
Mortgage servicing rights		167	Multiple of annual servicing fee	Estimated pre-payment speed, based on rate and term	300% - 400%	326%

December 31, 2012	Fair Value Estimate		Valuation Technique	Unobservable Input	Range	Weighted Average
Impaired loans	$	2,056	Appraisal of collateral (1)	Appraisal and liquidation adjustments (2)	(7)% - (10)%	(8.1)%
Other real estate owned		50	Appraisal of collateral (1)	Appraisal and liquidation adjustments (2)	0%	0%
Mortgage servicing rights		98	Multiple of annual servicing fee	Estimated pre-payment speed, based on rate and term	300% - 400%	326%

(1) Fair value is generally determined through independent appraisals of the underlying collateral that generally include various level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

Estimated Fair Values of Financial Instruments

The estimated fair values of the Company’s financial instruments are as follows (in thousands):

Financial Instruments
(in thousands)
		December 31, 2013				December  31, 2012
		Carrying		Fair		Carrying		Fair
Financial assets:		Value		Value		Value		Value
Cash and due from banks	$	8,570	$	8,570	$	14,261	$	14,261
Interest bearing deposits with banks		43		43		136		136
Interest bearing time deposits with banks		249		250		847		849
Securities		126,046		126,046		122,338		122,338
Restricted investment in FHLB stock		1,967		1,967		1,726		1,726
Loans, net of allowance for loan losses		275,511		282,226		274,219		286,467
Mortgage servicing rights		167		167		98		98
Accrued interest receivable		1,529		1,529		1,632		1,632
Financial liabilities:
Non-interest bearing deposits		74,611		74,611		71,318		71,318
Interest bearing deposits		305,034		308,414		315,433		319,946
Securities sold under agreements to repurchase		5,397		5,397		3,836		3,836
Short-term borrowings		8,400		8,400		1,600		1,600
Other interest bearing liabilities		1,356		1,358		1,305		1,315
Accrued interest payable		287		287		354		354
Off-balance sheet financial instruments:
Commitments to extend credit		-		-		-		-
Letters of credit		-		-		-		-

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The following presents the carrying amount, fair value and placement in the fair value hierarchy of the Company’s financial instruments not previously disclosed as of December 31, 2013 and December 31, 2012. This table excludes financial instruments for which the carrying amount approximates fair value.

			(Level 1)	(Level 2)	(Level 3)
			Quoted Prices in
			Active Markets	Significant	Significant
			for Identical	Other	Other
December 31, 2013	Carrying Amount	Fair Value	Assets or Liabilities	Observable Inputs	Unobservable Inputs
Financial instruments - Assets
Interest bearing time deposits with banks	$              249	$            250	$                      -	$              250	$                    -
Loans, net of allowance for loan losses	275,511	282,226	-	-	282,226
Financial instruments - Liabilities
Interest bearing deposits	305,034	308,414	-	308,414	-
Other interest bearing liabilities	1,356	1,358	-	1,358	-

			(Level 1)	(Level 2)	(Level 3)
			Quoted Prices in
			Active Markets	Significant	Significant
			for Identical	Other	Other
December 31, 2012	Carrying Amount	Fair Value	Assets or Liabilities	Observable Inputs	Unobservable Inputs
Financial instruments - Assets
Interest bearing time deposits with banks	$              847	$            849	$                      -	$              849	$                    -
Loans, net of allowance for loan losses	274,219	286,467	-	-	286,467
Financial instruments - Liabilities
Interest bearing deposits	315,433	319,946	-	319,946	-
Other interest bearing liabilities	1,305	1,315	-	1,315	-

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Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2013

Premises and Equipment [Abstract]

Premises and Equipment

Premises and equipment consist of the following (in thousands):

	December 31,
		2013		2012
Land	$	1,066	$	864
Buildings and improvements		8,585		8,510
Furniture, computer software and equipment		4,601		4,523
		14,252		13,897
Less: accumulated depreciation		(7,922)		(7,425)
	$	6,330	$	6,472

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Acquisition (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2006
Acquisition [Abstract]
Acquisition of branch office in Richfield, PA, acquisition date		Sep. 08, 2006
Goodwill included in purchase price of the branch	$ 2,046	$ 2,046			$ 2,046
Core deposit intangible included in purchase price of the branch					449
Core deposit intangible amortization period		10 years
Amortization of intangibles	45	45	45	45
Core deposit intangible amortization expense		45
Core deposit intangible amortization expense, year one		45
Core deposit intangible amortization expense, year two		$ 29

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Employee Benefit Plans (Schedule of Stock Option Information by Grant Date) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Weighted average exercise price	$ 17.65	$ 18.00	$ 17.75
Shares outstanding	83,930	97,792	90,474	92,953
Shares Exercisable	43,079
Grant Date - 11/15/2004 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Weighted average exercise price	$ 20.25
Shares outstanding	1,248
Contractual average life (years)	10 months 17 days
Shares Exercisable	1,248
Grant Date - 10/18/2005 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Weighted average exercise price	$ 24.00
Shares outstanding	2,662
Contractual average life (years)	1 year 5 months 16 days
Shares Exercisable	2,662
Grant Date - 10/17/2006 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Weighted average exercise price	$ 21.00
Shares outstanding	3,195
Contractual average life (years)	2 years 11 days
Shares Exercisable	3,195
Grant Date - 10/16/2007 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Weighted average exercise price	$ 20.05
Shares outstanding	5,623
Contractual average life (years)	3 years 2 months 12 days
Shares Exercisable	5,623
Grant Date - 10/21/2008 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Weighted average exercise price	$ 21.10
Shares outstanding	7,289
Contractual average life (years)	4 years 2 months 9 days
Shares Exercisable	7,289
Grant Date - 10/20/2009 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Weighted average exercise price	$ 17.22
Shares outstanding	11,213
Contractual average life (years)	5 years 1 month 24 days
Shares Exercisable	10,211
Grant Date - 9/20/2011 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Weighted average exercise price	$ 17.75
Shares outstanding	13,850
Contractual average life (years)	7 years 8 months 19 days
Shares Exercisable	7,900
Grant Date - 3/20/2012 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Weighted average exercise price	$ 18.00
Shares outstanding	17,050
Contractual average life (years)	8 years 2 months 19 days
Shares Exercisable	4,951
Grant Date - 2/19/2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Weighted average exercise price	$ 17.65
Shares outstanding	21,800
Contractual average life (years)	9 years 1 month 21 days

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Employee Benefit Plans (Policy)

12 Months Ended

Dec. 31, 2013

Employee Benefit Plans [Abstract]

Defined Benefit Retirement Plan

The Company sponsors a defined benefit retirement plan which covers substantially all of its employees employed prior to December 31, 2007. As of January 1, 2008, the plan was amended to close the plan to new entrants. All active participants as of December 31, 2007 became 100% vested in their accrued benefit and, as long as they remained eligible, continued to accrue benefits until December 31, 2012. The benefits are based on years of service and the employee’s compensation. Effective December 31, 2012, the defined benefit retirement plan was amended to cease future service accruals after that date (frozen). The Company’s funding policy is to contribute annually no more than the maximum amount that can be deducted for federal income tax purposes. Contributions are intended to provide for benefits attributed to service through December 31, 2012. The Company does not expect to contribute to the defined benefit plan in 2014.

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Financial Instruments With Off-Balance Sheet Risk (Tables)

12 Months Ended

Dec. 31, 2013

Nature of Operations [Abstract]

Summary of Financial Instrument Commitments

A summary of the Company’s financial instrument commitments is as follows (in thousands):

		December 31,
		2013		2012
Commitments to grant loans	$	33,532	$	31,918
Unfunded commitments under lines of credit		7,457		11,246
Outstanding letters of credit		1,199		1,293

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Loans and Related Allowance for Loan Losses (Loan Portfolio Summarized by the Past Due Status) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	$ 1,555	$ 1,722
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	3,230	4,111
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	5,343	8,884
Financing Receivable, Recorded Investment, Past Due, Total	10,128	14,717
Financing Receivable, Recorded Investment, Current	267,670	262,783
Total loans	277,798	277,500	289,681
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	312	742
Commercial, Financial and Agricultural [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	19	30
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	10	191
Financing Receivable, Recorded Investment, Past Due, Total	29	221
Financing Receivable, Recorded Investment, Current	26,252	19,075
Total loans	26,281	19,296	19,417
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing		171
Real Estate - Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	35	295
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	1,092	819
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	947	1,928
Financing Receivable, Recorded Investment, Past Due, Total	2,074	3,042
Financing Receivable, Recorded Investment, Current	72,397	66,145
Total loans	74,471	69,187	60,774
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	61	93
Real Estate - Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	239	9
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	7	136
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	1,801	2,335
Financing Receivable, Recorded Investment, Past Due, Total	2,047	2,480
Financing Receivable, Recorded Investment, Current	17,634	15,612
Total loans	19,681	18,092	17,508
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing		156
Real Estate - Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	1,239	1,359
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	2,130	3,131
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	2,585	4,428
Financing Receivable, Recorded Investment, Past Due, Total	5,954	8,918
Financing Receivable, Recorded Investment, Current	134,505	144,204
Total loans	140,459	153,122	176,544
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	251	320
Obligations of State and Political Subdivisions [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Current	12,702	12,769
Total loans	12,702	12,769	8,780
Personal [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	23	29
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	1	25
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due		2
Financing Receivable, Recorded Investment, Past Due, Total	24	56
Financing Receivable, Recorded Investment, Current	4,180	4,978
Total loans	4,204	5,034	6,658
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing		$ 2

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Quarterly Results of Operations (Unaudited) (Quarterly Results of Operations) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Quarterly Results of Operations (Unaudited) [Abstract]
Total interest income	$ 4,193	$ 4,224	$ 4,173	$ 4,144	$ 4,390	$ 4,464	$ 4,605	$ 4,711	$ 16,734	$ 18,170	$ 20,033
Total interest expense	677	719	741	763	854	898	924	972	2,900	3,648	4,591
Net interest income	3,516	3,505	3,432	3,381	3,536	3,566	3,681	3,739	13,834	14,522	15,442
Provision for loan losses	149	100	86	80	174	60	69	1,108	415	1,411	364
Gains from the sale of assets	72	84	85	97	147	208	149	65
Other income	1,006	939	970	980	955	1,045	1,046	977	4,233	4,592	3,946
Other expense	3,432	3,349	3,330	3,035	3,339	3,273	3,220	3,245	13,146	13,077	12,802
Income before income taxes	1,013	1,079	1,071	1,343	1,125	1,486	1,587	428	4,506	4,626	6,222
Income Tax Expense (Benefit)	46	60	62	337	242	354	372	10	505	978	1,542
Net income	$ 967	$ 1,019	$ 1,009	$ 1,006	$ 883	$ 1,132	$ 1,215	$ 418	$ 4,001	$ 3,648	$ 4,680
Per-share data: Basic earnings	$ 0.23	$ 0.24	$ 0.24	$ 0.24	$ 0.20	$ 0.27	$ 0.29	$ 0.10	$ 0.95	$ 0.86	$ 1.10
Per-share data: Diluted earnings	$ 0.23	$ 0.24	$ 0.24	$ 0.24	$ 0.20	$ 0.27	$ 0.29	$ 0.10	$ 0.95	$ 0.86	$ 1.10
Per-share data: Cash dividends	$ 0.22	$ 0.22	$ 0.22	$ 0.22	$ 0.22	$ 0.22	$ 0.22	$ 0.22	$ 0.88	$ 0.88	$ 0.86

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Securities (Schedule of Unrealized Losses) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less Than 12 Months	$ 65,242	$ 24,760
Gross unrealized Losses, Less Than 12 Months	(1,797)	(88)
Fair Value, 12 Months or More	6,488	251
Gross Unrealized Losses, 12 Months or More	(176)	(98)
Fair Value, Total	71,730	25,011
Unrealized Losses, Total	(1,973)	(186)
Obligations of U.S. Government agencies and corporations [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less Than 12 Months	53,438	11,471
Gross unrealized Losses, Less Than 12 Months	(1,664)	(32)
Fair Value, 12 Months or More	1,921
Gross Unrealized Losses, 12 Months or More	(79)
Fair Value, Total	55,359	11,471
Unrealized Losses, Total	(1,743)	(32)
Obligations of State and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less Than 12 Months	11,496	13,040
Gross unrealized Losses, Less Than 12 Months	(130)	(43)
Fair Value, 12 Months or More	4,301
Gross Unrealized Losses, 12 Months or More	(43)
Fair Value, Total	15,797	13,040
Unrealized Losses, Total	(173)	(43)
Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less Than 12 Months	308
Gross unrealized Losses, Less Than 12 Months	(3)
Fair Value, Total	308
Unrealized Losses, Total	(3)
Debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less Than 12 Months	65,242	24,511
Gross unrealized Losses, Less Than 12 Months	(1,797)	(75)
Fair Value, 12 Months or More	6,222
Gross Unrealized Losses, 12 Months or More	(122)
Fair Value, Total	71,464	24,511
Unrealized Losses, Total	(1,919)	(75)
Equity securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less Than 12 Months		249
Gross unrealized Losses, Less Than 12 Months		(13)
Fair Value, 12 Months or More	266	251
Gross Unrealized Losses, 12 Months or More	(54)	(98)
Fair Value, Total	266	500
Unrealized Losses, Total	$ (54)	$ (111)

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Stockholders' Equity And Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2013

Stockholders' Equity And Regulatory Matters [Abstract]

Schedule of Compliance with Regulatory Capital Requirements

The table below provides a comparison of the Company’s and the Bank’s risk-based capital ratios and leverage ratios to the minimum regulatory requirements for the periods indicated (dollars in thousands).

Juniata Valley Financial Corp. (Consolidated)					Minimum Requirement
					For Capital
		Actual			Adequacy Purposes
		Amount	Ratio		Amount	Ratio
As of December 31, 2013:
Total Capital	$	51,888	17.97%	$	23,105	8.00%
(to Risk Weighted Assets)
Tier 1 Capital		49,461	17.13%		11,553	4.00%
(to Risk Weighted Assets)
Tier 1 Capital		49,461	11.04%		17,915	4.00%
(to Average Assets)
As of December 31, 2012:
Total Capital	$	52,803	18.28%	$	23,103	8.00%
(to Risk Weighted Assets)
Tier 1 Capital		49,506	17.14%		11,552	4.00%
(to Risk Weighted Assets)
Tier 1 Capital		49,506	10.96%		18,074	4.00%
(to Average Assets)
								Minimum Regulatory
								Requirements to be
The Juniata Valley Bank					Minimum Requirement			"Well Capitalized"
					For Capital			under Prompt
		Actual			Adequacy Purposes			Corrective Action Provisions
		Amount	Ratio		Amount	Ratio		Amount	Ratio
As of December 31, 2013:
Total Capital	$	46,530	16.35%	$	22,773	8.00%	$	28,467	10.00%
(to Risk Weighted Assets)
Tier 1 Capital		44,185	15.52%		11,387	4.00%		17,080	6.00%
(to Risk Weighted Assets)
Tier 1 Capital		44,185	9.97%		17,723	4.00%		22,154	5.00%
(to Average Assets)
As of December 31, 2012:
Total Capital	$	47,812	16.79%	$	22,780	8.00%	$	28,475	10.00%
(to Risk Weighted Assets)
Tier 1 Capital		44,519	15.63%		11,390	4.00%		17,085	6.00%
(to Risk Weighted Assets)
Tier 1 Capital		44,519	9.99%		17,822	4.00%		22,277	5.00%
(to Average Assets)

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Nature of Operations

12 Months Ended

Dec. 31, 2013

Nature of Operations [Abstract]

NATURE OF OPERATIONS

1. Nature Of Operations

Juniata Valley Financial Corp. (“Juniata” or the “Company”) is a bank holding company operating in central Pennsylvania, for the purpose of delivering financial services within its local market. Through its wholly-owned banking subsidiary, The Juniata Valley Bank (the “Bank”), Juniata provides retail and commercial banking and other financial services through 12 branch locations located in Juniata, Mifflin, Perry and Huntingdon Counties. Additionally, in Mifflin, Juniata and Centre Counties, the Company maintains three offices for loan production, trust services and wealth management sales. Each of the Company’s lines of business are part of the same reporting segment, whose operating results are regularly reviewed and managed by a centralized executive management group. As a result, the Company has only one reportable segment for financial reporting purposes. The Bank provides a full range of banking services including on-line banking, an automatic teller machine network, checking accounts, NOW accounts, savings accounts, money market accounts, fixed rate certificates of deposit, club accounts, secured and unsecured commercial and consumer loans, construction and mortgage loans, safe deposit facilities and credit loans with overdraft checking protection. The Bank also provides a variety of trust services. The Company has a contractual arrangement with a broker-dealer to allow the offering of annuities, mutual funds, stock and bond brokerage services and long-term care insurance to its local market. Most of the Company’s commercial customers are small and mid-sized businesses operating in the Bank’s local service area. The Bank operates under a state bank charter and is subject to regulation by the Pennsylvania Department of Banking and the Federal Deposit Insurance Corporation. Juniata is subject to regulation of the Board of Governors of the Federal Reserve Bank and the Pennsylvania Department of Banking.

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Loans and Related Allowance for Loan Losses (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013 loan	Dec. 31, 2012 loan	Dec. 31, 2011
Loans and Related Allowance for Credit Losses [Abstract]
Interest loss on nonaccrual loans	$ 490,000	$ 472,000	$ 405,000
Aggregate amount of demand deposits reclassified as loan balances	41,000	620,000
Loan balance in the process of foreclosure	$ 61,000
Number of troubled debt restructurings	7	0

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Deposits (Tables)

12 Months Ended

Dec. 31, 2013

Deposits [Abstract]

Schedule of Deposits

Deposits consist of the following (in thousands):

	December 31,
		2013		2012
Demand, non-interest bearing	$	74,611	$	71,318
NOW and Money Market		89,867		90,349
Savings		60,761		56,382
Time deposits, $100,000 or more		30,995		33,007
Other time deposits		123,411		135,695
	$	379,645	$	386,751

Schedule of Maturities of Time Deposits

Aggregate amount of scheduled maturities of time deposits as of December 31, 2013 include the following (in thousands):

		Time Deposits
Maturing in:		$100,000 or more		Other		Total Time Deposits
2014	$	14,526	$	55,671	$	70,197
2015		10,222		35,221		45,443
2016		2,456		13,886		16,342
2017		1,375		6,914		8,289
2018		1,329		7,426		8,755
Later		1,087		4,293		5,380
	$	30,995	$	123,411	$	154,406

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Financial Instruments with Off-Balance Sheet Risk

12 Months Ended

Dec. 31, 2013

Nature of Operations [Abstract]

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

21.  Financial Instruments With Off-Balance Sheet Risk

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments may include commitments to extend credit and letters of credit. These instruments involve, to varying degrees, elements of credit risk that are not recognized in the consolidated financial statements.

Exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit and letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making these commitments and conditional obligations as it does for on-balance sheet instruments. The Company controls the credit risk of its financial instruments through credit approvals, limits and monitoring procedures; however, it does not generally require collateral for such financial instruments since there is no principal credit risk.

A summary of the Company’s financial instrument commitments is as follows (in thousands):

		December 31,
		2013		2012
Commitments to grant loans	$	33,532	$	31,918
Unfunded commitments under lines of credit		7,457		11,246
Outstanding letters of credit		1,199		1,293

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since portions of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained by the Bank upon extension of credit is based on management's credit evaluation of the counter-party. Collateral held varies but may include personal or commercial real estate, accounts receivable, inventory and equipment.

Outstanding letters of credit are instruments issued by the Bank that guarantee the beneficiary payment by the Bank in the event of default by the Bank’s customer in the non-performance of an obligation or service. Most letters of credit are extended for one year periods. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank holds collateral supporting those commitments for which collateral is deemed necessary. The amount of the liability as of December 31, 2013 and 2012 for guarantees under letters of credit issued is not material.

The maximum undiscounted exposure related to these guarantees at December 31, 2013was $1,199,000,  and the approximate value of underlying collateral upon liquidation that would be expected to cover this maximum potential exposure was $1,061,000.

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2013

Employee Benefit Plans [Abstract]

EMPLOYEE BENEFIT PLANS

20.  Employee Benefit Plans

Stock Option Plan

The 2000 Incentive Stock Option Plan expired in May 2010 and was replaced with the 2011 Stock Option Plan in May 2011 (collectively, the “Plans”).  The 2011 Stock Option Plan has essentially the same structure as the 2000 plan. Under the provisions of the Plans, while active, options can be granted to officers and key employees of the Company. The Plans provide that the option price per share is not to be less than the fair market value of the stock on the day the option was granted, but in no event less than the par value of such stock. Options granted under the Plans are exercisable no earlier than one year after the date of grant and expire ten years after the date of the grant.

The Plans are administered by a committee of the Board of Directors, whose members are not eligible to receive options under the Plans. The Committee determines, among other things, which officers and key employees receive options, the number of shares to be subject to each option, the option price and the duration of the option. Options vest over three to five years and are exercisable at the grant price, which is at least the fair market value of the stock on the grant date. All options previously granted under the Plans are scheduled to expire through February 20, 2023. The aggregate number of shares that may be issued upon the exercise of options under the 2011 Stock Option Plan is set at 300,000 shares, and 247,300  shares were available for grant as of December 31, 2013. Total options outstanding at December 31, 2013 have exercise prices between $17.22 and $24.00, with a weighted average exercise price of  $18.50  and a weighted average remaining contractual life of 6.7 years.

As of December 31, 2013,  there was $57,000 of total unrecognized compensation cost related to nonvestedshare-based compensation arrangements granted under the Plans. That cost is expected to be recognizedthrough 2018.

Cash received from option exercises under the Plans for the years ended December 31, 2013, 2012 and2011  was $0, $104,000, and $27,000, respectively.

A summary of the status of the Plans as of December 31, 2013,  2012 and 2011, and changes during the years ending on those dates is presented below:

	2013			2012			2011
	Shares	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
Outstanding at beginning of year	97,792	$	19.04	90,474	$	18.85	92,953	$	18.83
Granted	21,800		17.65	19,150		18.00	16,050		17.75
Exercised	-		-	(7,207)		14.47	(1,890)		14.37
Forfeited	(35,662)		19.45	(4,625)		17.89	(16,639)		18.20
Outstanding at end of year	83,930	$	18.50	97,792	$	19.04	90,474	$	18.85
Options exercisable at year-end	43,079			68,361			67,685
Weighted-average fair value of
of options granted
during the year		$	1.75		$	1.98		$	1.91
Intrinsic value of options
exercised during the year		$	-		$	24,444		$	7,070
Intrinsic value of options
outstanding and exercisable at
December 31, 2013		$	5,309

The following table summarizes characteristics of stock options as of December 31, 2013:

		Outstanding		Exercisable
Grant Date	Exercise Price	Shares	Contractual Average Life (Years)	Shares
11/15/2004	20.25	1,248	0.88	1,248
10/18/2005	24.00	2,662	1.46	2,662
10/17/2006	21.00	3,195	2.03	3,195
10/16/2007	20.05	5,623	3.20	5,623
10/21/2008	21.10	7,289	4.19	7,289
10/20/2009	17.22	11,213	5.15	10,211
9/20/2011	17.75	13,850	7.72	7,900
3/20/2012	18.00	17,050	8.22	4,951
2/19/2013	17.65	21,800	9.14	-
		83,930		43,079

Defined Benefit Retirement Plan

The Company sponsors a defined benefit retirement plan which covers substantially all of its employees employed prior to December 31, 2007. As of January 1, 2008, the plan was amended to close the plan to new entrants. All active participants as of December 31, 2007 became 100% vested in their accrued benefit and, as long as they remained eligible, continued to accrue benefits until December 31, 2012. The benefits are based on years of service and the employee’s compensation. Effective December 31, 2012, the defined benefit retirement plan was amended to cease future service accruals after that date (frozen). The Company’s funding policy is to contribute annually no more than the maximum amount that can be deducted for federal income tax purposes. Contributions are intended to provide for benefits attributed to service through December 31, 2012. The Company does not expect to contribute to the defined benefit plan in 2014.

Management expects no expense to be recorded as net periodic expense in 2014 for the defined benefit plan, which includes expected amortization out of accumulated other comprehensive loss. The following table sets forth by level, within the fair value hierarchy, debt and equity instruments included in the defined benefit retirement’s plan assets at fair value as of December 31, 2013 and December 31, 2012 (in thousands). Assets included in the plan that are not valued in the hierarchy table consist of cash and cash equivalents, totaling $703,000 and $738,000, at December 31, 2013 and 2012, respectively.

			(Level 1)		(Level 2)		(Level 3)
			Quoted Prices in		Significant Other		Significant Other
	December 31,		Active Markets for		Observable		Unobservable
	2013		Identical Assets		Inputs		Inputs
Measured at fair value on a recurring basis:
U.S. Government and agency securities	$	739	$	-	$	739	$	-
Corporate bonds and notes		2,987		-		2,987		-
Mutual funds
Value funds		2,120		2,120		-		-
Blend funds		1,522		1,522		-		-
Growth funds		1,867		1,867		-		-
Common stocks		4		4		-		-
Money market funds		172		172		-		-
	$	9,411	$	5,685	$	3,726	$	-
			(Level 1)		(Level 2)		(Level 3)
			Quoted Prices in		Significant Other		Significant Other
	December 31,		Active Markets for		Observable		Unobservable
	2012		Identical Assets		Inputs		Inputs
Measured at fair value on a recurring basis:
U.S. Government and agency securities	$	199	$	-	$	199	$	-
Corporate bonds and notes		3,017		-		3,017		-
Mutual funds
Value funds		1,379		1,379		-		-
Blend funds		1,220		1,220		-		-
Growth funds		1,932		1,932		-		-
Common stocks		3		3		-		-
Money market funds		590		590		-		-
	$	8,340	$	5,124	$	3,216	$	-

The measurement date for the defined benefit plan is December 31. Information pertaining to the activity in the defined benefit plan is as follows (in thousands):

	Years ended December 31,
		2013		2012
Change in projected benefit obligation (PBO)
PBO at beginning of year	$	10,022	$	10,438
Service cost		-		222
Interest cost		395		451
Change in assumptions		(962)		681
Curtailment adjustment		-		(1,393)
Actuarial loss		91		49
Benefits paid		(438)		(426)
PBO at end of year	$	9,108	$	10,022
Change in plan assets
Fair value of plan assets at beginning of year	$	9,078	$	8,625
Actual return on plan assets, net of expenses		1,474		879
Benefits paid		(438)		(426)
Fair value of plan assets at end of year	$	10,114	$	9,078
Funded status, included in other assets (liabilities)	$	1,006	$	(944)
Amounts recognized in accumulated comprehensive loss
before income taxes consist of:
Unrecognized actual loss	$	(1,377)	$	(3,362)
Unrecognized net transition asset		1		1
	$	(1,376)	$	(3,361)
Accumulated benefit obligation	$	9,108	$	10,022

Pension expense included the following components for the years ended December 31 (in thousands):

		2013		2012		2011
Service cost during the year	$	-	$	222	$	192
Interest cost on projected benefit obligation		395		451		479
Expected return on plan assets		(561)		(591)		(631)
Net accretion (amortization)		(1)		56		(2)
Recognized net actuarial loss		203		296		152
Net periodic benefit cost		36		434		190

Net loss (gain)		(1,782)		(952)		1,990
Amortization of net loss		(203)		(296)		(152)
Net  amortization (accretion)		1		(56)		2
Total recognized in other comprehensive loss (income)	$	(1,984)	$	(1,304)	$	1,840
Total recognized in net periodic benefit cost and other
comprehensive loss (income)	$	(1,948)	$	(870)	$	2,030

Assumptions used to determine benefit obligations were:

	2013	2012	2011
Discount rate	4.75%	4.00%	4.40%
Rate of compensation increase	N/A	N/A	3.00

Assumptions used to determine the net periodic benefit cost were:

	2013	2012	2011
Discount rate	4.00%	4.40%	5.50%
Expected long-term return on plan assets	6.35	7.00	7.00
Rate of compensation increase	N/A	3.00	3.00

The investment strategy and investment policy for the retirement plan is to target the plan assets to contain 50% equity and 50% fixed income securities. The asset allocation as of December 31, 2013wasapproximately 43% fixed income securities, 55% equities and2% cash equivalents.

Future expected benefit payments (in thousands):

		2014		2015		2016		2017		2018		2019-2023
Estimated future benefit payments	$	450	$	444	$	447	$	463	$	510	$	2,633

Defined Contribution Plan

The Company has a Defined Contribution Plan under which employees, through payroll deductions, are able to defer portions of their compensation. The Company makes an annual non-elective fully vested contribution equal to 3% of compensation to each eligible participant. As of December 31, 2013, a liability of $172,000  was recorded to satisfy this obligation, and was credited to employees’ accounts by January 31, 2014. This liability at December 31, 2012 totaled $161,000 and was credited to employee accounts during 2013. Expense incurred under this plan was $175,000, $157,000 and $151,000 in 2013, 2012 and 2011, respectively. Effective January 1, 2013, the Company amended the Defined Contribution Plan to include an employer matching contribution for employees that elect to defer compensation into this program. The matching contribution in 2013 was $123,000.

Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan under which employees, through payroll deductions, are able to purchase shares of Company stock annually. The option price of the stock purchases is between 95% and 100% of the fair market value of the stock on the offering termination date as determined annually by the Board of Directors. The maximum number of shares which employees may purchase under the Plan is 250,000; however, the annual issuance of shares may not exceed 5,000 shares plus any unissued shares from prior offerings. There were  2,823 shares issued in2013,  2,729 shares issued in 2012 and 2,413 shares issued in 2011 under this plan. At December 31, 2013, there were 187,557 shares reserved for issuance under the Employee Stock Purchase Plan.

Supplemental Retirement Plans

The Company has non-qualified supplemental retirement plans for directors and key employees. At December 31, 2013 and 2012, the present value of the future liability was $533,000 and $627,000, respectively. For the years ended December 31, 2013, 2012 and 2011, $47,000, $56,000 and $73,000, respectively, was charged to expense in connection with these plans. The Company offsets the cost of these plans through the purchase of bank-owned life insurance and annuities. See Note 8.

Deferred Compensation Plans

The Company has entered into deferred compensation agreements with certain directors to provide each director an additional retirement benefit, or to provide their beneficiary a benefit, in the event of pre-retirement death. At December 31, 2013 and 2012, the present value of the future liability was $1,591,000 and $1,661,000, respectively. For the years ended December 31, 2013, 2012 and 2011, $47,000, $66,000 and $83,000, respectively, was charged to expense in connection with these plans. The Company offsets the cost of these plans through the purchase of bank-owned life insurance. See Note 8.

Salary Continuation Plans

The Company has non-qualified salary continuation plans for key employees. At December 31, 2013 and 2012, the present value of the future liability was $1,154,000 and $1,151,000, respectively. For the years ended December 31, 2013, 2012 and 2011, $97,000, $132,000 and $136,000, respectively, was charged to expense in connection with these plans. The Company offsets the cost of these plans through the purchase of bank-owned life insurance. See Note 8.

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Employee Benefit Plans (Components of Net Periodic Pension Cost) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Employee Benefit Plans [Abstract]
Service cost during the year		$ 222	$ 192
Interest cost on projected benefit obligation	395	451	479
Expected return on plan assets	(561)	(591)	(631)
Net amortization	(1)	56	(2)
Recognized net actuarial loss	203	296	152
Net periodic benefit cost	36	434	190
Net loss (gain)	(1,782)	(952)	1,990
Amortization of net loss	(203)	(296)	(152)
Net amortization (accretion)	1	(56)	2
Total recognized in other comprehensive loss (income)	(1,984)	(1,304)	1,840
Total recognized in net periodic benefit cost and other comprehensive loss (income)	$ (1,948)	$ (870)	$ 2,030

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Summary of Significant Accounting Policies (Disclosure of Share-based Compensation Arrangements, Assumptions Used) (Details)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Summary of Significant Accounting Policies [Abstract]
Expected life of options	7 years	7 years	7 years
Risk-free interest rate	1.41%	1.78%	1.39%
Expected volatility	21.57%	22.12%	21.91%
Expected dividend yield	4.91%	4.86%	4.62%

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Borrowings (Tables)

12 Months Ended

Dec. 31, 2013

Borrowings [Abstract]

Schedule of Borrowings

Borrowings consist of the following (dollars in thousands):

		December 31, 2013			December 31, 2012			December 31, 2011			For the year 2013
		Outstanding Balance	Rate		Outstanding Balance	Rate		Outstanding Balance	Rate		Average Balance	Weighted Average Rate
Securities sold under agreements to repurchase	$	5,397	0.10%	$	3,836	0.10%	$	3,500	0.10%	$	4,332	0.10%
Short-term borrowings - Federal Home Loan Bank overnight advances		8,400	0.25%		1,600	0.25%		-			3,200	0.25%
	$	13,797	0.19%	$	5,436	0.14%	$	3,500	0.10%	$	7,532	0.16%

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Related-Party Transactions

12 Months Ended

Dec. 31, 2013

Related-Party Transactions [Abstract]

RELATED-PARTY TRANSACTIONS

22.  Related-Party Transactions

The Bank has granted loans to certain of its executive officers, directors and their related interests. These loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and, in the opinion of management, do not involve more than normal risk of collection. The aggregate dollar amount of these loans was $1,892,000 and $2,370,000 at December 31, 2013 and 2012, respectively. During 2013, $281,000 of new loans were made and repayments totaled $759,000. None of these loans were past due, in non-accrual status or restructured at December 31, 2013 or 2012.  

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Commitments and Contingent Liabilities

12 Months Ended

Dec. 31, 2013

Commitments and Contingent Liabilities [Abstract]

Commitments and Contingent Liabilities

23.  Commitments And Contingent Liabilities

In 2009, the Company executed an agreement to obtain technology outsourcing services through an outside service bureau, and those services began in June 2010. The agreement provides for termination fees if the Company cancels the services prior to the end of the 8-year commitment period. The termination fee would be an amount equal to one hundred percent of the estimated remaining value of the terminated services if terminated in the first contract year, ninety percent of the estimated remaining value of the terminated services if terminated in the second contract year, eighty percent and seventy percent of the remaining value of the terminated services if terminated in the third and fourth contract years, respectively, and sixty percent of the remaining value of the terminated services if terminated in contract years five through eight.Termination fees are estimated to be approximately $1,663,000 at December 31, 2013.  Since the Company does not expect to terminate these services prior to the end of the commitment period, no liability has been recorded at December 31, 2013.

The Company, from time to time, may be a defendant in legal proceedings relating to the conduct of its banking business. Most of such legal proceedings are a normal part of the banking business and, in management's opinion, the consolidated financial condition and results of operations of the Company would not be materially affected by the outcome of such legal proceedings.

Additionally, the Company has committed to fund and sell qualifying residential mortgage loans to the Federal Home Loan Bank of Pittsburgh in the total amount of $15,000,000. As of December 31, 2013, $14,211,000 remains to be delivered on that commitment, of which $160,000 has been committed to borrowers.

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Consolidated Statements of Cash Flows(Parenthetical) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Consolidated Statements of Cash Flows(Parenthetical) [Abstract]
Equity Method Investment, Dividends	$ 47	$ 45	$ 29

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Subsequent Events

12 Months Ended

Dec. 31, 2013

Subsequent Events [Abstract]

Subsequent Events

24.  Subsequent Events

In January 2014, the Board of Directors declared a dividend of $0.22 per share for the first quarter of 2014 to shareholders of record on February 14, payable on March 3, 2014.

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Income Taxes (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Taxes [Abstract]
Income tax expense (benefits) related to realized securities gains	$ (1)	$ 1	$ 2
Federal statutory income tax rate	34.00%	34.00%	34.00%
Adjustments to unrecognized tax benefits	$ 0	$ 0	$ 0

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Loans and Related Allowance for Credit Losses (Tables)

12 Months Ended

Dec. 31, 2013

Loans and Related Allowance for Credit Losses [Abstract]

Classes of the Loan Portfolio Summarized by the Aggregate Risk Rating

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Company’s internal risk rating system as of December 31, 2013 and December 31, 2012 (in thousands):

As of December 31, 2013	Pass		Special Mention		Substandard		Doubtful		Total
Commercial, financial and agricultural	$	20,388	$	5,658	$	235	$	-	$	26,281
Real estate - commercial		56,867		11,706		5,620		278		74,471
Real estate - construction		15,803		292		1,754		1,832		19,681
Real estate - mortgage		130,706		3,995		4,272		1,486		140,459
Obligations of states and political subdivisions		12,674		28				-		12,702
Personal		4,204		-				-		4,204
Total	$	240,642	$	21,679	$	11,881	$	3,596	$	277,798
As of December 31, 2012	Pass		Special Mention		Substandard		Doubtful		Total
Commercial, financial and agricultural	$	17,570	$	904	$	822	$	-	$	19,296
Real estate - commercial		55,198		8,939		5,010		40		69,187
Real estate - construction		14,001		1,022		867		2,202		18,092
Real estate - mortgage		144,179		3,864		2,350		2,729		153,122
Obligations of states and political subdivisions		12,769		-		-		-		12,769
Personal		5,024		10		-		-		5,034
Total	$	248,741	$	14,739	$	9,049	$	4,971	$	277,500

Impaired Loans by Loan Portfolio Class

The following tables summarize information regarding impaired loans by portfolio class as of December 31, 2013 and December 31, 2012 (in thousands):

		As of December 31, 2013						As of December 31, 2012
Impaired loans		Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial, financial and agricultural	$	94	$	94	$	-	$	160	$	160	$	-
Real estate - commercial		2,017		2,142		-		2,672		2,672		-
Real estate - construction		504		813		-		2,004		2,197		-
Real estate - mortgage		3,353		4,751		-		487		523		-
With an allowance recorded:
Real estate - commercial	$	238	$	238	$	26	$	-	$	-	$	-
Real estate - construction		1,478		1,502		93		198		198		91
Real estate - mortgage		365		394		45		2,141		2,141		1,036
Total:
Commercial, financial and agricultural	$	94	$	94	$	-	$	160	$	160	$	-
Real estate - commercial		2,255		2,380		26		2,672		2,672		-
Real estate - construction		1,982		2,315		93		2,202		2,395		91
Real estate - mortgage		3,718		5,145		45		2,628		2,664		1,036
	$	8,049	$	9,934	$	164	$	7,662	$	7,891	$	1,127

		Year Ended December 31,  2013						Year Ended December 31,  2012						Year Ended December 31,  2011
Impaired loans		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
With no related allowance recorded:
Commercial, financial and agricultural	$	127	$	-	$	-	$	199	$	14	$	-	$	274	$	19	$	-
Real estate - commercial		2,345		96		24		2,492		119		3		2,354		139		10
Real estate - construction		1,254		2		6		1,362		-		-		485		42		14
Real estate - mortgage		1,920		64		24		1,371		-		-		2,453		34		47
With an allowance recorded:
Real estate - commercial	$	119	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Real estate - construction		838		-		-		674		-		15		1,025		-		-
Real estate - mortgage		1,253		-		7		2,503		-		-		2,051		65		-
Total:
Commercial, financial and agricultural	$	127	$	-	$	-	$	199	$	14	$	-	$	274	$	19	$	-
Real estate - commercial		2,464		96		24		2,492		119		3		2,354		139		10
Real estate - construction		2,092		2		6		2,036		-		15		1,510		42		14
Real estate - mortgage		3,173		64		31		3,874		-		-		4,504		99		47
	$	7,856	$	162	$	61	$	8,601	$	133	$	18	$	8,642	$	299	$	71

Nonaccrual Loans by Classes of the Loan Portfolio

The following table presents nonaccrual loans by classes of the loan portfolio as of December 31, 2013 and December 31, 2012 (in thousands):

Nonaccrual loans:		December 31, 2013		December 31, 2012
Commercial, financial and agricultural	$	10	$	20
Real estate - commercial		1,331		1,835
Real estate - construction		1,982		2,376
Real estate - mortgage		2,629		4,615
Total	$	5,952	$	8,846

Loan Portfolio Summarized by the Past Due Status

The following table presents the classes of the loan portfolio summarized by the past due status as of December 31, 2013 and December 31, 2012 (in thousands):

As of  December 31, 2013		30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Loans Past Due greater than 90 Days and Accruing
Commercial, financial and agricultural	$	19	$	-	$	10	$	29	$	26,252	$	26,281	$	-
Real estate - commercial		35		1,092		947		2,074		72,397		74,471		61
Real estate - construction		239		7		1,801		2,047		17,634		19,681		-
Real estate - mortgage		1,239		2,130		2,585		5,954		134,505		140,459		251
Obligations of states and political subdivisions		-		-		-		-		12,702		12,702		-
Personal		23		1				24		4,180		4,204		-
Total	$	1,555	$	3,230	$	5,343	$	10,128	$	267,670	$	277,798	$	312
As of December 31, 2012		30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Loans Past Due greater than 90 Days and Accruing
Commercial, financial and agricultural	$	30	$	-	$	191	$	221	$	19,075	$	19,296	$	171
Real estate - commercial		295		819		1,928		3,042		66,145		69,187		93
Real estate - construction		9		136		2,335		2,480		15,612		18,092		156
Real estate - mortgage		1,359		3,131		4,428		8,918		144,204		153,122		320
Obligations of states and political subdivisions		-		-		-		-		12,769		12,769		-
Personal		29		25		2		56		4,978		5,034		2
Total	$	1,722	$	4,111	$	8,884	$	14,717	$	262,783	$	277,500	$	742

Troubled Debt Restructurings on Financing Receivables

The following table summarizes information regarding troubled debt restructurings by loan portfolio class as of and for the year ended December 31, 2013, in thousands of dollars. There were no loans identified as troubled debt restructurings as of or for the year ended December 31, 2012.

	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Recorded Investment
2013
Accruing troubled debt restructurings:
Real estate - commercial	1	$	64	$	61	$	61
Real estate - mortgage	6		706		714		714
	7	$	770	$	775	$	775

Allowance for Loan Losses and Recorded Investments in Loans Receivable

The following tables summarize the activity in the allowance for loan losses by loan class and loans by loan class, segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of and for the years ended December 31, 2013, 2012 and  2011 (in thousands):

Allowance for loan losses:	Commercial, financial and agricultural		Real estate - commercial		Real estate - construction		Real estate - mortgage		Obligations of states and political subdivisions		Personal		Total
Beginning Balance, January 1, 2013	$	179	$	463	$	202	$	2,387	$	-	$	50	$	3,281
Charge-offs		(4)		-		(117)		(1,281)		-		(29)		(1,431)
Recoveries		13		-		-		-		-		9		22
Provisions		65		71		127		140		-		12		415
Ending balance	$	253	$	534	$	212	$	1,246	$	-	$	42	$	2,287
As of December 31, 2013	Commercial, financial and agricultural		Real estate - commercial		Real estate - construction		Real estate - mortgage		Obligations of states and political subdivisions		Personal		Total
Allowance for loan losses:
Ending balance	$	253	$	534	$	212	$	1,246	$	-	$	42	$	2,287
evaluated for impairment
individually	$	-	$	26	$	93	$	45	$	-	$	-	$	164
collectively	$	253	$	508	$	119	$	1,201	$	-	$	42	$	2,123
Loans:
Ending balance	$	26,281	$	74,471	$	19,681	$	140,459	$	12,702	$	4,204	$	277,798
evaluated for impairment
individually	$	94	$	2,255	$	1,982	$	3,718	$	-	$	-	$	8,049
collectively	$	26,187	$	72,216	$	17,699	$	136,741	$	12,702	$	4,204	$	269,749

Allowance for loan losses:	Commercial, financial and agricultural		Real estate - commercial		Real estate - construction		Real estate - mortgage		Obligations of states and political subdivisions		Personal		Total
Beginning Balance, January 1, 2012	$	195	$	455	$	442	$	1,771	$	-	$	68	$	2,931
Charge-offs		(25)		-		(193)		(852)		-		(1)		(1,071)
Recoveries		8		-		-		-		-		2		10
Provisions		1		8		(47)		1,468		-		(19)		1,411
Ending balance	$	179	$	463	$	202	$	2,387	$	-	$	50	$	3,281
As of December 31, 2012	Commercial, financial and agricultural		Real estate - commercial		Real estate - construction		Real estate - mortgage		Obligations of states and political subdivisions		Personal		Total
Allowance for loan losses:
Ending balance	$	179	$	463	$	202	$	2,387	$	-	$	50	$	3,281
evaluated for impairment
individually	$	-	$	-	$	91	$	1,036	$	-	$	-	$	1,127
collectively	$	179	$	463	$	111	$	1,351	$	-	$	50	$	2,154
Loans:
Ending balance	$	19,296	$	69,187	$	18,092	$	153,122	$	12,769	$	5,034	$	277,500
evaluated for impairment
individually	$	160	$	2,672	$	2,202	$	2,628	$	-	$	-	$	7,662
collectively	$	19,136	$	66,515	$	15,890	$	150,494	$	12,769	$	5,034	$	269,838

Allowance for loan losses:		Commercial, financial and agricultural		Real estate - commercial		Real estate - construction		Real estate - mortgage		Obligations of states and political subdivisions		Personal		Total
Beginning Balance, January 1, 2011	$	163	$	442	$	336	$	1,810	$	-	$	73	$	2,824
Charge-offs		(18)		(37)		-		(205)		-		(22)		(282)
Recoveries		2		-		-		10		-		13		25
Provisions		48		50		106		156		-		4		364
Ending balance	$	195	$	455	$	442	$	1,771	$	-	$	68	$	2,931
As of December 31, 2011		Commercial, financial and agricultural		Real estate - commercial		Real estate - construction		Real estate - mortgage		Obligations of states and political subdivisions		Personal		Total
Allowance for loan losses:
Ending balance	$	195	$	455	$	442	$	1,771	$	-	$	68	$	2,931
evaluated for impairment
individually	$	-	$	-	$	343	$	432	$	-	$	-	$	775
collectively	$	195	$	455	$	99	$	1,339	$	-	$	68	$	2,156
Loans, net of unearned interest:
Ending balance	$	19,417	$	60,774	$	17,508	$	176,544	$	8,780	$	6,658	$	289,681
evaluated for impairment
individually	$	238	$	2,312	$	1,870	$	5,119	$	-	$	-	$	9,539
collectively	$	19,179	$	58,462	$	15,638	$	171,425	$	8,780	$	6,658	$	280,142

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Juniata Valley Financial Corp. (Parent Company Only) (Tables)

12 Months Ended

Dec. 31, 2013

Juniata Valley Financial Corp. (Parent Company Only) [Abstract]

Condensed Balance Sheet

CONDENSED BALANCE SHEETS
(in thousands)
	December 31,
		2013		2012
ASSETS:
Cash and cash equivalents	$	365	$	231
Investment in bank subsidiary		44,589		45,285
Investment in unconsolidated subsidiary		4,172		4,000
Investment securities available for sale		1,127		954
Other assets		56		15
TOTAL ASSETS	$	50,309	$	50,485
LIABILITIES:
Accounts payable and other liabilities	$	325	$	188
STOCKHOLDERS' EQUITY		49,984		50,297
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	50,309	$	50,485

Condensed Income Statement

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(in thousands)
		Years Ended December 31,
		2013		2012		2011
INCOME:
Interest and dividends on investment securities available for sale	$	28	$	41	$	44
Dividends from bank subsidiary		4,290		2,793		4,217
Income from unconsolidated subsidiary		237		249		263
TOTAL INCOME		4,555		3,083		4,524
EXPENSE:
Non-interest expense		140		80		140
TOTAL EXPENSE		140		80		140
INCOME BEFORE INCOME TAXES AND EQUITY
IN UNDISTRIBUTED NET (LOSS) INCOME OF SUBSIDIARY		4,415		3,003		4,384
Income tax expense		23		47		36
		4,392		2,956		4,348
Undistributed net (loss) income of subsidiary		(391)		692		332
NET INCOME	$	4,001	$	3,648	$	4,680
COMPREHENSIVE INCOME	$	3,761	$	4,485	$	3,889

Condensed Cash Flow Statement

CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
	Years Ended December 31,
		2013		2012		2011
Cash flows from operating activities:
Net income	$	4,001	$	3,648	$	4,680
Adjustments to reconcile net income to net cash provided by operating activities:
Undistributed net loss (income) of subsidiary		391		(692)		(332)
Net amortization of securities premiums		-		2		2
Equity in earnings of unconsolidated subsidiary, net of dividends of $47, $45 and $29		(190)		(204)		(234)
(Increase) decrease in other assets		(42)		12		2
Increase in taxes payable		87		127		68
(Decrease) increase in accounts payable and other liabilities		(7)		(2)		19
Net cash provided by operating activities		4,240		2,891		4,205
Cash flows from investing activities:
Purchases of available for sale securities		(252)		-		(50)
Proceeds from the maturity of available for sale investment securities		250		1,235		-
Net cash (used in) provided by investing activities		(2)		1,235		(50)
Cash flows from financing activities:
Cash dividends		(3,707)		(3,724)		(3,648)
Purchase of treasury stock		(445)		(360)		(589)
Treasury stock issued for dividend reinvestment and employee stock purchase plan		48		151		66
Net cash used in financing activities		(4,104)		(3,933)		(4,171)
Net increase (decrease) in cash and cash equivalents		134		193		(16)
Cash and cash equivalents at beginning of year		231		38		54
Cash and cash equivalents at end of year	$	365	$	231	$	38

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Bank Owned Life Insurance and Annuities (Summary of Changes in Cash Value of BOLI and Annuities) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Balance	$ 14,402	$ 14,069
Earnings	386	423
Premiums on existing policies	68	70	70
Annuity payments received	(8)	(13)	(23)
Proceeds from life insurance claim		(147)
Balance	14,848	14,402	14,069
Life Insurance Product Line [Member]
Balance	14,036	13,718
Earnings	372	409
Premiums on existing policies	54	56
Proceeds from life insurance claim		(147)
Balance	14,462	14,036
Deferred Annuities [Member]
Balance	354	327
Earnings	13	13
Premiums on existing policies	14	14
Balance	381	354
Payout Annuities [Member]
Balance	12	24
Earnings	1	1
Annuity payments received	(8)	(13)
Balance	$ 5	$ 12

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Consolidated Statements of Financial Condition (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Assets:
Cash and due from banks	$ 8,570	$ 14,261
Interest bearing deposits with banks	43	136
Cash and cash equivalents	8,613	14,397
Interest bearing time deposits with banks	249	847
Securities available for sale	126,046	122,338
Restricted investment in Federal Home Loan Bank (FHLB) stock	1,967	1,726
Investment in unconsolidated subsidiary	4,172	4,000
Total loans	277,798	277,500
Less: Allowance for loan losses	(2,287)	(3,281)
Total loans, net of allowance for loan losses	275,511	274,219
Premises and equipment, net	6,330	6,472
Other real estate owned	281	428
Bank owned life insurance and annuities	14,848	14,402
Investment in low income housing project	3,990	3,796
Core deposit intangible	119	164
Goodwill	2,046	2,046
Mortgage servicing rights	167	98
Accrued interest receivable and other assets	4,443	3,936
Total assets	448,782	448,869
Liabilities:
Non-interest bearing deposits	74,611	71,318
Interest bearing deposits	305,034	315,433
Total deposits	379,645	386,751
Securities sold under agreements to repurchase	5,397	3,836
Short-term borrowings	8,400	1,600
Other interest bearing liabilities	1,356	1,305
Accrued interest payable and other liabilities	4,000	5,080
Total liabilities	398,798	398,572
Stockholders' Equity:
Common stock, par value $1.00 per share: Authorized - 20,000,000 shares Issued - 4,745,826 shares Outstanding - 4,196,266 shares at December 31, 2013; 4,218,361 shares at December 31, 2012	4,746	4,746
Surplus	18,370	18,346
Retained earnings	39,118	38,824
Accumulated other comprehensive loss	(1,659)	(1,419)
Cost of common stock in Treasury: 549,560 shares at December 31, 2013; 527,465 shares at December 31, 2012	(10,591)	(10,200)
Total stockholders' equity	49,984	50,297
Total liabilities and stockholders' equity	$ 448,782	$ 448,869

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Operating Lease Obligations (Tables)

12 Months Ended

Dec. 31, 2013

Operating Lease Obligations [Abstract]

Schedule of Future Minimum Rental Payments

The following is a summary of future minimum rental payments for the next five years required under operating leases that have initial or remaining noncancellable lease terms in excess of one year as of December 31, 2013 (in thousands):

Years ending December 31,
	2014	$	121
	2015		89
	2016		83
	2017		44
	2018		-
	2019 and beyond		-
	Total minimum payments required	$	337

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Employee Benefit Plans (Schedule of Stock Option Activity) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Employee Benefit Plans [Abstract]
Outstanding at beginning of year, Shares	97,792	90,474	92,953
Granted, Shares	21,800	19,150	16,050
Exercised, Shares		(7,207)	(1,890)
Forfeited, Shares	(35,662)	(4,625)	(16,639)
Outstanding at end of year, Shares	83,930	97,792	90,474
Options exercisable at year-end, Shares	43,079	68,361	67,685
Outstanding at beginning of year, Weighted average exercise price	$ 19.04	$ 18.85	$ 18.83
Granted, Weighted average exercise price	$ 17.65	$ 18.00	$ 17.75
Exercised, Weighted average exercise price		$ 14.47	$ 14.37
Forfeited, Weighted average exercise price	$ 19.45	$ 17.89	$ 18.20
Outstanding at end of year, Weighted average exercise price	$ 18.50	$ 19.04	$ 18.85
Weighted-average fair value of options granted during the year	$ 1.75	$ 1.98	$ 1.91
Intrinsic value of options exercised during the year		$ 24,444	$ 7,070
Intrinsic value of options outstanding and exercisable at December 31, 2013	$ 5,309

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Consolidated Statements of Stockholders' Equity (USD $) In Thousands, except Share data	Common Stock [Member]	Surplus [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]	Treasury Stock [Member]	Total
Balance at Dec. 31, 2010	$ 4,746	$ 18,354	$ 37,868	$ (1,465)	$ (9,527)	$ 49,976
Beginning balance, shares at Dec. 31, 2010	4,257,765
Net income			4,680			4,680
Other comprehensive loss (income)				(791)		(791)
Cash dividends			(3,648)			(3,648)
Stock-based compensation activity		26				26
Purchase of treasury stock, at cost					(589)	(589)
Purchase of treasury stock, shares	(33,850)					(33,850)
Treasury stock issued for stock option and stock purchase plans		(17)			83	66
Treasury stock issued for stock option and stock purchase plans, shares	4,303
Balance at Dec. 31, 2011	4,746	18,363	38,900	(2,256)	(10,033)	49,720
Ending balance, shares at Dec. 31, 2011	4,228,218
Net income			3,648			3,648
Other comprehensive loss (income)				837		837
Cash dividends			(3,724)			(3,724)
Stock-based compensation activity		25				25
Purchase of treasury stock, at cost					(360)	(360)
Purchase of treasury stock, shares	(19,793)					(19,793)
Treasury stock issued for stock option and stock purchase plans		(42)			193	151
Treasury stock issued for stock option and stock purchase plans, shares	9,936
Balance at Dec. 31, 2012	4,746	18,346	38,824	(1,419)	(10,200)	50,297
Ending balance, shares at Dec. 31, 2012	4,218,361					4,218,361
Net income			4,001			4,001
Other comprehensive loss (income)				(240)		(240)
Cash dividends			(3,707)			(3,707)
Stock-based compensation activity		30				30
Purchase of treasury stock, at cost					(445)	(445)
Purchase of treasury stock, shares	(24,918)					(24,918)
Treasury stock issued for stock option and stock purchase plans		(6)			54	48
Treasury stock issued for stock option and stock purchase plans, shares	2,823
Balance at Dec. 31, 2013	$ 4,746	$ 18,370	$ 39,118	$ (1,659)	$ (10,591)	$ 49,984
Ending balance, shares at Dec. 31, 2013	4,196,266					4,196,266

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Fair Value Measurements (Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest bearing time deposits with banks	$ 249	$ 847
Interest bearing deposits	305,034	315,433
Other interest bearing liabilities	1,356	1,305
Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest bearing time deposits with banks	249	847
Loans, net of allowance for loan losses	275,511	274,219
Interest bearing deposits	305,034	315,433
Other interest bearing liabilities	1,356	1,305
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest bearing time deposits with banks	250	849
Loans, net of allowance for loan losses	282,226	286,467
Interest bearing deposits	308,414	319,946
Other interest bearing liabilities	1,358	1,315
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest bearing time deposits with banks
Loans, net of allowance for loan losses
Interest bearing deposits
Other interest bearing liabilities
(Level 2) Significant Other Observable Inputs [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest bearing time deposits with banks	250	849
Interest bearing deposits	308,414	319,946
Other interest bearing liabilities	1,358	1,315
(Level 3) Significant Other Unobservable Inputs [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans, net of allowance for loan losses	$ 282,226	$ 286,467

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Securities (Securities Available for Sale) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost of AFS Securities, Total	$ 127,184	$ 121,153
Fair Value of AFS Securities, Total	126,046	122,338
Gross Unrealized Gains on AFS Securities, Total	835	1,371
Gross Unrealized Losses on AFS Securities, Total	(1,973)	(186)
Obligations of U.S. Government agencies and corporations [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost of AFS Securities Maturing Within One Year	4,177	7,908
Amortized Cost of AFS Securities Maturing After One Year But Within Five Years	48,011	42,253
Amortized Cost of AFS Securities Maturing After Five Years But Within Ten Years	27,615	22,004
Amortized Cost of AFS Securities, Total	79,803	72,165
Fair Value of AFS Securities Maturing Within One Year	4,192	7,996
Fair Value of AFS Securities Maturing After One Year But Within Five Years	47,578	42,796
Fair Value of AFS Securities Maturing After Five Years But Within Ten Years	26,508	22,025
Fair Value of AFS Securities, Total	78,278	72,817
Gross Unrealized Gains on AFS Securities Maturing Within One Year	15	88
Gross Unrealized Gains on AFS Securities Maturing After One Year But Within Five Years	203	543
Gross Unrealized Gains on AFS Securities Maturing After Five Years But Within Ten Years		53
Gross Unrealized Gains on AFS Securities, Total	218	684
Gross Unrealized Losses on AFS Securities Maturing After One Year But Within Five Years	(636)
Gross Unrealized Losses on AFS Securities Maturing After Five Years But Within Ten Years	(1,107)	(32)
Gross Unrealized Losses on AFS Securities, Total	(1,743)	(32)
Obligations of State and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost of AFS Securities Maturing Within One Year	8,260	10,448
Amortized Cost of AFS Securities Maturing After One Year But Within Five Years	26,027	29,595
Amortized Cost of AFS Securities Maturing After Five Years But Within Ten Years	7,224	4,727
Amortized Cost of AFS Securities Maturing After Ten Years	350	731
Amortized Cost of AFS Securities, Total	41,861	45,501
Fair Value of AFS Securities Maturing Within One Year	8,314	10,505
Fair Value of AFS Securities Maturing After One Year But Within Five Years	26,098	29,809
Fair Value of AFS Securities Maturing After Five Years But Within Ten Years	7,182	4,936
Fair Value of AFS Securities Maturing After Ten Years	338	726
Fair Value of AFS Securities, Total	41,932	45,976
Gross Unrealized Gains on AFS Securities Maturing Within One Year	55	57
Gross Unrealized Gains on AFS Securities Maturing After One Year But Within Five Years	133	246
Gross Unrealized Gains on AFS Securities Maturing After Five Years But Within Ten Years	56	215
Gross Unrealized Gains on AFS Securities, Total	244	518
Gross Unrealized Losses on AFS Securities Maturing Within One Year	(1)
Gross Unrealized Losses on AFS Securities Maturing After One Year But Within Five Years	(62)	(32)
Gross Unrealized Losses on AFS Securities Maturing After Five Years But Within Ten Years	(98)	(6)
Gross Unrealized Losses on AFS Securities Maturing After Ten Years	(12)	(5)
Gross Unrealized Losses on AFS Securities, Total	(173)	(43)
Mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost of AFS Securities Without Single Maturity Date	4,465	2,502
Fair Value of AFS Securities Without Single Maturity Date	4,469	2,526
Gross Unrealized Gains on AFS Securities Without Single Maturity Date	7	24
Gross Unrealized Losses on AFS Securities Without Single Maturity Date	(3)
Equity securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost of AFS Securities Without Single Maturity Date	1,055	985
Fair Value of AFS Securities Without Single Maturity Date	1,367	1,019
Gross Unrealized Gains on AFS Securities Without Single Maturity Date	366	145
Gross Unrealized Losses on AFS Securities Without Single Maturity Date	(54)	(111)
Parent Company [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value of AFS Securities, Total	$ 1,127	$ 954

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Employee Benefit Plans (Schedule of Net Funded Status) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Employee Benefit Plans [Abstract]
PBO at beginning of year	$ 10,022,000	$ 10,438,000
Service cost		222,000	192,000
Interest cost	395,000	451,000	479,000
Change in assumptions	(962,000)	681,000
Curtailment adjustment		(1,393,000)
Actuarial (gain) loss	91,000	49,000
Benefits paid	(438,000)	(426,000)
PBO at end of year	9,108,000	10,022,000	10,438,000
Fair value of plan assets at beginning of year	9,078,000	8,625,000
Actual return on plan assets, net of expenses	1,474,000	879,000
Employer contribution	123,000
Fair value of plan assets at end of year	10,114,000	9,078,000	8,625,000
Funded status, included in other assets (liabilities)	1,006,000	(944,000)
Unrecognized actual loss	(1,377,000)	(3,362,000)
Unrecognized net transition asset	1,000	1,000
Amounts recognized in accumulated comprehensive income	(1,376,000)	(3,361,000)
Accumulated benefit obligation	$ 9,108,000	$ 10,022,000

XML

Summary of Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2013

Summary of Significant Accounting Policies [Abstract]

Principles of Consolidation

Principles of consolidation

The consolidated financial statements include the accounts of Juniata Valley Financial Corp. and its wholly owned subsidiary, The Juniata Valley Bank. All significant intercompany transactions and balances have been eliminated.

Use of Estimates

Use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of deferred tax assets and the determination of other-than-temporary impairment on securities.

Basis of Presentation

Basis of presentation

Certain amounts previously reported have been reclassified to conform to the consolidated financial statement presentation for 2013. The reclassification had no effect on net income.

Significant Group Concentrations of Credit Risk

Significant group concentrations of credit risk

Most of the Company’s activities are with customers located within the Juniata Valley region. Note 5 discusses the types of securities in which the Company invests. Note 6 discusses the types of lending in which the Company engages.

As of December 31, 2013, there were no concentrations of credit to any particular industry equaling more than 25% of total capital. The Bank’s business activities are geographically concentrated in the counties of Juniata, Mifflin, Perry, Huntingdon, Centre, Franklin and Snyder, Pennsylvania. The Bank has a diversified loan portfolio; however, a substantial portion of its debtors’ ability to honor their obligations is dependent upon the economy in central Pennsylvania.

Cash and Cash Equivalents

Cash and cash equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, interest bearing demand deposits with banks and federal funds sold. Generally, federal funds are sold for one-day periods.

Interest Bearing Time Deposits with Banks

Interest bearing time deposits with banks

Interest-bearing time deposits with banks consist of certificates of deposits in other banks with maturities within one year.

Securities

Securities

Securities classified as available for sale, which include marketable investment securities, are stated at fair value, with the unrealized gains and losses, net of tax, reported as a component of other comprehensive income (loss). Securities classified as available for sale are those securities that the Company intends to hold for an indefinite period of time but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including significant movement in interest rates, changes in maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations and other similar factors. Investment securities that management has the positive intent and ability to hold until maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions are classified as held to maturity and are stated at cost, adjusted for amortization of premium and accretion of discount computed by the interest method over their contractual lives. Interest and dividends on investment securities available for sale and held to maturity are recognized as income when earned. Premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains or losses on the disposition of securities available for sale are based on the net proceeds and the adjusted carrying amount of the securities sold, determined on a specific identification basis. The Company has no securities classified as held to maturity at December 31, 2013 and 2012.

Accounting Standards Codification (ASC) Topic 320, Investments – Debt and Equity Securities, clarifies the interaction of the factors that should be considered when determining whether a debt security is other-than-temporarily impaired. For debt securities, management must assess whether (a) it has the intent to sell the security and (b) it is more likely than not that it will be required to sell the security prior to its anticipated recovery. These steps are taken before an assessment is made as to whether the entity will recover the cost basis of the investment. For equity securities, consideration is given to management’s intention and ability to hold the securities until recovery of unrealized losses in assessing potential other-than-temporary impairment. More specifically, factors considered to determine other-than-temporary impairment status for individual equity holdings include the length of time the stock has remained in an unrealized loss position, the percentage of unrealized loss compared to the carrying cost of the stock, dividend reduction or suspension, market analyst reviews and expectations, and other pertinent factors that would affect expectations for recovery or further decline.

In instances when a determination is made that an other-than-temporary impairment exists and the entity does not intend to sell the debt security and it is not more likely than not that it will be required to sell the debt security prior to its anticipated recovery, the other-than-temporary impairment is separated into the amount of the total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the credit loss) and the amount of the total other-than-temporary impairment related to all other factors.  The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total other-than-temporary impairment related to all other factors is recognized in other comprehensive (loss) income.

Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each balance sheet date.

Restricted Investment in FHLB Stock

Restricted Investment in Federal Home Loan Bank Stock

The Bank owns restricted stock investments in the Federal Home Loan Bank. Federal law requires a member institution of the Federal Home Loan Bank to hold stock according to a predetermined formula. The stock is carried at cost.

Management evaluates the restricted stock for impairment on an annual basis. Management’s determination of whether these investments are impaired is based on management’s assessment of the ultimate recoverability of the cost of these investments rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of the cost of these investments is influenced by criteria such as (1) the significance of the decline in net assets of the FHLB as compared to the capital stock amount for the FHLB and the length of time this situation has persisted, (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the FHLB.

Management believes no impairment charge was necessary related to the FHLB restricted stock during 2013, 2012 or 2011.

Loans

Loans

Loans that the Company has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the outstanding unpaid principal balances, net of any deferred fees or costs and the allowance for loan losses. Interest income on all loans, other than nonaccrual loans, is accrued over the term of the loans based on the amount of principal outstanding. Unearned income is amortized to income over the life of the loans, using the interest method.

The loan portfolio is segmented into commercial and consumer loans. Commercial loans are comprised of the following classes of loans: (1) commercial, financial and agricultural, (2) commercial real estate, (3) real estate construction, a portion of (4) mortgage loans and (5) obligations of states and political subdivisions. Consumer loans are comprised of a portion of (4) mortgage loans and (6) personal loans. 

Loans on which the accrual of interest has been discontinued are designated as non-accrual loans.  Accrual of interest on loans is generally discontinued when the contractual payment of principal or interest has become 90 days past due or reasonable doubt exists as to the full, timely collection of principal or interest. However, it is the Company’s policy to continue to accrue interest on loans over 90 days past due as long as (1) they are guaranteed or well secured and (2) there is an effective means of collection in process. When a loan is placed on non-accrual status, all unpaid interest credited to income in the current year is reversed against current period income and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest received on nonaccrual loans generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, accruals are resumed on loans only when the obligation is brought fully current with respect to interest and principal, has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt.

The Company originates loans in the portfolio with the intent to hold them until maturity. At the time the Company no longer intends to hold loans to maturity based on asset/liability management practices, the Company transfers loans from its portfolio to held for sale at fair value. Any write-down recorded upon transfer is charged against the allowance for loan losses. Any write-downs recorded after the initial transfers are recorded as a charge to other non-interest expense. Gains or losses recognized upon sale are included in other non-interest income.

Loan Origination Fees and Costs

Loan origination fees and costs

Loan origination fees and related direct origination costs for a given loan are deferred and amortized over the life of the loan on a level-yield basis as an adjustment to interest income over the contractual life of the loan. As of December 31, 2013 and 2012, the amount of net unamortized origination fees carried as an adjustment to outstanding loan balances was $123,000 and $42,000, respectively.

Allowance for Credit Losses

Allowance for credit losses

The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments. The allowance for loan losses (“allowance”) represents management’s estimate of losses inherent in the loan portfolio as of the consolidated statement of financial condition date and is recorded as a reduction to loans. The reserve for unfunded lending commitments represents management’s estimate of losses inherent in its unfunded lending commitments and is recorded in other liabilities on the consolidated statement of financial condition, when necessary. The amount of the reserve for unfunded lending commitments is not material to the consolidated financial statements. The allowance for loan losses is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance.

For financial reporting purposes, the provision for loan losses charged to current operating income is based on management's estimates, and actual losses may vary from estimates. These estimates are reviewed and adjusted at least quarterly and are reported in earnings in the periods in which they become known.

Loans included in any class are considered for charge-off when:

· 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;

· all collateral securing the loan has been liquidated and a deficiency balance remains;

· a bankruptcy notice is received for an unsecured loan;

· a confirming loss event has occurred; or

· the loan is deemed to be uncollectible for any other reason.

The allowance for loan losses is maintained at a level considered adequate to offset probable losses on the Company’s existing loans. The analysis of the allowance for loan losses relies heavily on changes in observable trends that may indicate potential credit weaknesses. Management’s periodic evaluation of the adequacy of the allowance is based on the Bank’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and may require the Company to recognize additions to the allowance for loan losses based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Based on management’s comprehensive analysis of the loan portfolio, management believes the level of the allowance for loan losses as of December 31, 2013 was adequate.

There are two components of the allowance: a specific component for loans that are deemed to be impaired; and a general component for contingencies.

A loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loans and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis by the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. 

The estimated fair values of substantially all of the Company’s impaired loans are measured based on the estimated fair value of the loan’s collateral. For commercial loans secured with real estate, estimated fair values are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the current appraisal and the condition of the property. Appraised values may be discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include the estimated costs to sell the property. For commercial loans secured by non-real estate collateral, estimated fair values are determined based on the borrower’s financial statements, inventory reports, aging accounts receivable, equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets. For such loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The Company generally does not separately identify individual consumer segment loans for impairment disclosures, unless such loans are subject to a restructuring agreement.

Loans whose terms are modified are classified as troubled debt restructurings if the Company grants borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a troubled debt restructuring generally involve a below-market interest rate based on the loan’s risk characteristics or an extension of a loan’s stated maturity date. Nonaccrual troubled debt restructurings are restored to accrual status if principal and interest payments, under the modified terms, are current for a sustained period of time after modification. Loans classified as troubled debt restructurings are designated as impaired.

The component of the allowance for contingencies relates to other loans that have been segmented into risk rated categories. The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated quarterly or when credit deficiencies arise, such as delinquent loan payments. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans classified as special mention have potential weaknesses that deserve management’s close attention. If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects. Loans classified as substandard have one or more well-defined weaknesses that jeopardize the liquidation of the debt. Substandard loans include loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as a loss are considered uncollectible and are charged to the allowance for loan losses. Loans not classified are rated pass. Specific reserves may be established for larger, individual classified loans as a result of this evaluation, as discussed above. Remaining loans are categorized into large groups of smaller balance homogeneous loans and are collectively evaluated for impairment. This computation is generally based on historical loss experience adjusted for qualitative factors. The historical loss experience is averaged over a ten-year period for each of the portfolio segments. The ten-year timeframe was selected in order to capture activity over a wide range of economic conditions and has been consistently used for the past seven years. The qualitative risk factors are reviewed for relevancy each quarter and include:

· 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;

· Nature and volume of the portfolio and terms of loans;

· Experience, ability and depth of lending and credit management and staff;

· Volume and severity of past due, classified and nonaccrual loans, as well as other loan modifications;

· Existence and effect of any concentrations of credit and changes in the level of such concentrations; and

· Effect of external factors, including competition.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation.

Commercial, Financial and Agricultural Lending

The Company originates commercial, financial and agricultural loans primarily to businesses located in its primary market area and surrounding areas.  These loans are used for various business purposes, which include short-term loans and lines of credit to finance machinery and equipment purchases, inventory and accounts receivable. Generally, the maximum term for loans extended on machinery and equipment is shorter and does not exceed the projected useful life of such machinery and equipment. Most business lines of credit are written with a five year maturity, subject to an annual review.

Commercial loans are generally secured with short-term assets; however, in many cases, additional collateral, such as real estate, is provided as additional security for the loan.  Loan-to-value maximum values have been established by the Company and are specific to the type of collateral. Collateral values may be determined using invoices, inventory reports, accounts receivable aging reports, collateral appraisals, etc.

In underwriting commercial loans, an analysis of the borrower’s character, capacity to repay the loan, the adequacy of the borrower’s capital and collateral, as well as an evaluation of conditions affecting the borrower, is performed. Analysis of the borrower’s past, present and future cash flows is also an important aspect of the Company’s analysis.

Concentration analysis assists in identifying industry specific risk inherent in commercial, financial and agricultural lending. Mitigants include the identification of secondary and tertiary sources of repayment and appropriate increases in oversight.  

Commercial, financial and agricultural loans generally present a higher level of risk than certain other types of loans, particularly during slow economic conditions.

Commercial Real Estate Lending

The Company engages in commercial real estate lending in its primary market area and surrounding areas. The Company’s commercial real estate portfolio is secured primarily by residential housing, commercial buildings, raw land and hotels. Generally, commercial real estate loans have terms that do not exceed 20 years, have loan-to-value ratios of up to 80% of the appraised value of the property and are typically secured by personal guarantees of the borrowers.

As economic conditions deteriorate, the Company reduces its exposure in real estate loans with higher risk characteristics.  In underwriting these loans, the Company performs a thorough analysis of the financial condition of the borrower, the borrower’s credit history, and the reliability and predictability of the cash flow generated by the property securing the loan. Appraisals on properties securing commercial real estate loans originated by the Company are performed by independent appraisers.

Commercial real estate loans generally present a higher level of risk than certain other types of loans, particularly during slow economic conditions.

Real Estate Construction Lending

The Company engages in real estate construction lending in its primary market area and surrounding areas. The Company’s real estate construction lending consists of commercial and residential site development loans, as well as commercial building construction and residential housing construction loans. 

The Company’s commercial real estate construction loans are generally secured with the subject property, and advances are made in conformity with a pre-determined draw schedule supported by independent inspections.  Terms of construction loans depend on the specifics of the project, such as estimated absorption rates, estimated time to complete, etc. 

In underwriting commercial real estate construction loans, the Company performs a thorough analysis of the financial condition of the borrower, the borrower’s credit history, the reliability and predictability of the cash flow generated by the project using feasibility studies, market data, etc. Appraisals on properties securing commercial real estate loans originated by the Company are performed by independent appraisers.

Real estate construction loans generally present a higher level of risk than certain other types of loans, particularly during slow economic conditions. The difficulty of estimating total construction costs adds to the risk as well.

Mortgage Lending

The Company’s real estate mortgage portfolio is comprised of consumer residential mortgages and business loans secured by one-to-four family properties. One-to-four family residential mortgage loan originations, including home equity installment and home equity lines of credit loans, are generated by the Company’s marketing efforts, its present customers, walk-in customers and referrals. These loans originate primarily within the Company’s market area or with customers primarily from the market area.

The Company offers fixed-rate and adjustable rate mortgage loans with terms up to a maximum of 25-years for both permanent structures and those under construction. The Company’s one-to-four family residential mortgage originations are secured primarily by properties located in its primary market area and surrounding areas. The majority of the Company’s residential mortgage loans originate with a loan-to-value of 80% or less. Home equity installment loans are secured by the borrower’s primary residence with a maximum loan-to-value of 80% and a maximum term of 15 years. Home equity lines of credit are secured by the borrower’s primary residence with a maximum loan-to-value of 90% and a maximum term of 20 years.

In underwriting one-to-four family residential real estate loans, the Company evaluates the borrower’s ability to make monthly payments, the borrower’s repayment history and the value of the property securing the loan. The ability to repay is determined by the borrower’s employment history, current financial conditions, and credit background. The analysis is based primarily on the customer’s ability to repay and secondarily on the collateral or security. Most properties securing real estate loans made by the Company are appraised by independent fee appraisers. The Company generally requires mortgage loan borrowers to obtain an attorney’s title opinion or title insurance, and fire and property insurance (including flood insurance, if necessary) in an amount not less than the amount of the loan. The Company does not engage in sub-prime residential mortgage originations.

Residential mortgage loans and home equity loans generally present a lower level of risk than certain other types of consumer loans because they are secured by the borrower’s primary residence. Risk is increased when the Company is in a subordinate position for the loan collateral.

Obligations of States and Political Subdivisions

The Company lends to local municipalities and other tax-exempt organizations. These loans are primarily tax-anticipation notes and, as such, carry little risk. Historically, the Company has never had a loss on any loan of this type.

Personal Lending

The Company offers a variety of secured and unsecured personal loans, including vehicle loans, mobile home loans and loans secured by savings deposits as well as other types of personal loans.

Personal loan terms vary according to the type and value of collateral and creditworthiness of the borrower. In underwriting personal loans, a thorough analysis of the borrower’s willingness and financial ability to repay the loan as agreed is performed. The ability to repay is determined by the borrower’s employment history, current financial conditions and credit background.

Personal loans may entail greater credit risk than do residential mortgage loans, particularly in the case of personal loans which are unsecured or are secured by rapidly depreciable assets, such as automobiles or recreational equipment. In such cases, any repossessed collateral for a defaulted personal loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation. In addition, personal loan collections are dependent on the borrower’s continuing financial stability and, thus are more likely to be affected by adverse personal circumstances. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans.

Other Real Estate Owned

Other real estate owned

Assets acquired in settlement of mortgage loan indebtedness are recorded as other real estate owned (OREO) at fair value less estimated costs to sell, establishing a new cost basis. Costs to maintain the assets and subsequent gains and losses attributable to their disposal are included in other expense as realized. No depreciation or amortization expense is recognized. At December 31, 2013 and 2012, the carrying value of other real estate owned was $281,000 and $428,000, respectively.

Goodwill and Intangibles

Goodwill and intangibles

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets that also lack physical substance but can be separately distinguished from goodwill because of contractual or other legal rights or because the asset is capable of being sold or exchanged either on its own or in combination with a related contract, asset or liability. It is the Company’s policy that goodwill be tested at least annually for impairment.

Mortgage Servicing Rights

Mortgage servicing rights

The Company originates residential mortgage loans with the intent to sell. These individual loans are normally funded by the buyer immediately. The Company maintains servicing rights on these loans.

Mortgage servicing rights are recognized as an asset upon the sale of a mortgage loan. A portion of the cost of the loan is allocated to the servicing right based upon relative fair value. Servicing rights are intangible assets and are carried at estimated fair value. The carrying amount of mortgage servicing rights was $167,000 and $98,000 at December 31, 2013 and 2012, respectively. Adjustments to fair value are recorded as non-interest income and included in gain on sales of loans in the consolidated statements of income.

The Company retains the servicing rights on certain mortgage loans sold to the FHLB and receives mortgage banking fee income based upon the principal balance outstanding. Total loans serviced for the FHLB were $18,688,000 and $11,295,000 at December 31, 2013 and 2012, respectively. The mortgage loans sold to the FHLB and serviced by the Company are not reflected in the consolidated statements of financial condition.

Premises, Equipment and Depreciation

Premises and equipment and depreciation

Premises and equipment are stated at cost less accumulated depreciation.  Depreciation is computed principally using the straight-line method over the estimated useful lives of the related assets, which range from 3 to 10 years for furniture and equipment and 25 to 50 years for buildings. Expenditures for maintenance and repairs are charged against income as incurred. Costs of major additions and improvements are capitalized. Amortization of leasehold improvements is computed by straight line over the shorter of the assets’ useful life or the related lease term.

Trust Assets and Revenues

Trust assets and revenues

Assets held in a fiduciary capacity are not assets of the Bank or the Bank’s Trust Department and are, therefore, not included in the consolidated financial statements. Trust revenues are recorded on the accrual basis.

Bank Owned Life Insurance, Annuities and Split-dollar Arrangements

Bank owned life insurance, annuities and split-dollar arrangements

The cash surrender value of bank owned life insurance and annuities is carried as an asset, and changes in cash surrender value are recorded as non-interest income.

GAAP requires split-dollar life insurance arrangements to have a liability recognized related to the postretirement benefits covered by an endorsement split-dollar life insurance arrangement. The accrued benefit liability was $792,000 and $738,000 as of December 31, 2013 and 2012, respectively. Related expenses for 2013, 2012 and 2011 were $54,000, $29,000 and $49,000, respectively.

Investments in Low-income Housing Partnerships

Investments in low-income housing partnerships

Juniata has invested as a limited partner in a partnership that provides low-income housing in Lewistown, Pennsylvania. The carrying value of the investment in the limited partnership was $3,990,000 at December 31, 2013 and $3,796,000 at December 31, 2012. The partnership anticipates receiving $575,000 annually in low-income housing tax credits over ten years, beginning in 2013. Amortization of the investment using the cost method is scheduled to occur over the same period as tax credits are earned. The maximum exposure to loss is limited to the carrying value of its investment at year-end.

Income Taxes

Income taxes

The Company accounts for income taxes in accordance with income tax accounting guidance ASC Topic 740, Income Taxes.

Current income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the weight of the evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The Company accounts for uncertain tax positions if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to management’s judgment.

The Company recognizes interest and penalties on income taxes, if any, as a component of income tax expense.

Advertising

Advertising

The Company follows the policy of charging costs of advertising to expense as incurred. Advertising expenses were $207,000, $172,000 and $144,000 in 2013, 2012 and 2011, respectively.

Off-balance Sheet Financial Instruments

Off-balance sheet financial instruments

In the ordinary course of business, the Bank has entered into off-balance sheet financial instruments consisting of commitments to extend credit and letters of credit. Such financial instruments are recorded on the consolidated statement of financial condition when they are funded.

Transfer of Financial Assets

Transfer of financial assets

Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Stock-based Compensation

Stock-based compensation

The Company sponsors a stock option plan for certain key officers. Compensation expense for stock options granted is measured using the fair value of the award on the grant date and is recognized over the vesting period. The Company recognized $30,000, $25,000 and $26,000 of expense for the years ended December 31, 2013, 2012 and 2011, respectively, for stock-based compensation. The stock-based compensation expense amounts were derived based on the fair value of options using the Black-Scholes option-pricing model. The following weighted average assumptions were used to value options granted in the periods indicated.

	2013	2012	2011
Expected life of options	7 years	7 years	7 years
Risk-free interest rate	1.41%	1.78%	1.39%
Expected volatility	21.57%	22.12%	21.91%
Expected dividend yield	4.91%	4.86%	4.62%

Segment Reporting

Segment reporting

Management does not separately allocate expenses, including the cost of funding loan demand, between the commercial, retail and trust operations of the Company. As such, discrete financial information is not available, and segment reporting would not be meaningful.

Subsequent Events

Subsequent events

The Company has evaluated events and transactions occurring subsequent to the consolidated statement of financial condition date of December 31, 2013, for items that should potentially be recognized or disclosed in the consolidated financial statements. The evaluation was conducted through the date these consolidated financial statements were issued.

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Loans and Related Allowance for Loan Losses (Average of Impaired Loans and Related Interest Income by Loan Portfolio Class) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Financing Receivable, Impaired [Line Items]
Average Recorded Investment, Total	$ 7,856	$ 8,601	$ 8,642
Interest Income Recognized, Total	162	133	299
Cash Basis Interest Income, Total	61	18	71
Commercial, Financial and Agricultural [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Average Recorded Investment	127	199	274
Impaired Loans with No Allowance: Interest Income Recognized		14	19
Average Recorded Investment, Total	127	199	274
Interest Income Recognized, Total		14	19
Real Estate - Commercial [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Average Recorded Investment	2,345	2,492	2,354
Impaired Loans with No Allowance: Interest Income Recognized	96	119	139
Impaired Loans with No Allowance: Cash Basis Interest Income	24	3	10
Impaired Loans with Allowance: Average Recorded Investment	119
Average Recorded Investment, Total	2,464	2,492	2,354
Interest Income Recognized, Total	96	119	139
Cash Basis Interest Income, Total	24	3	10
Real Estate - Construction [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Average Recorded Investment	1,254	1,362	485
Impaired Loans with No Allowance: Interest Income Recognized	2		42
Impaired Loans with No Allowance: Cash Basis Interest Income	6		14
Impaired Loans with Allowance: Average Recorded Investment	838	674	1,025
Impaired Loans with Allowance: Cash Basis Interest Income		15
Average Recorded Investment, Total	2,092	2,036	1,510
Interest Income Recognized, Total	2		42
Cash Basis Interest Income, Total	6	15	14
Real Estate - Mortgage [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Average Recorded Investment	1,920	1,371	2,453
Impaired Loans with No Allowance: Interest Income Recognized	64		34
Impaired Loans with No Allowance: Cash Basis Interest Income	24		47
Impaired Loans with Allowance: Average Recorded Investment	1,253	2,503	2,051
Impaired Loans with Allowance: Interest Income Recognized			65
Impaired Loans with Allowance: Cash Basis Interest Income	7
Average Recorded Investment, Total	3,173	3,874	4,504
Interest Income Recognized, Total	64		99
Cash Basis Interest Income, Total	$ 31		$ 47

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Operating Lease Obligations

12 Months Ended

Dec. 31, 2013

Operating Lease Obligations [Abstract]

OPERATING LEASE OBLIGATIONS

14.  Operating Lease Obligations

The Company has entered into a number of arrangements that are classified as operating leases. The operating leases are for several branch and office locations. The majority of the branch and office location leases are renewable at the Company’s option. Future minimum lease commitments are based on current rental payments. Rental expense charged to operations, including license fees for branch offices, was $122,000, $114,000 and $108,000 in 2013,  2012 and 2011, respectively.

The following is a summary of future minimum rental payments for the next five years required under operating leases that have initial or remaining noncancellable lease terms in excess of one year as of December 31, 2013 (in thousands):

Years ending December 31,
	2014	$	121
	2015		89
	2016		83
	2017		44
	2018		-
	2019 and beyond		-
	Total minimum payments required	$	337

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Borrowings (Policy)

12 Months Ended

Dec. 31, 2013

Borrowings [Abstract]

Repurchase Agreements, Policy

The Bank has repurchase agreements with several of its depositors, under which customers’ funds are invested daily into an interest bearing account. These funds are carried by the Company as short-term debt. It is the Company’s policy to have repurchase agreements collateralized 100% by U.S. Government securities

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Employee Benefit Plans (Schedule of Allocation of Plan Assets) (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	$ 9,411,000	$ 8,340,000
Obligations of U.S. Government agencies and corporations [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	739,000	199,000
Corporate notes [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	2,987,000	3,017,000
Value funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	2,120,000	1,379,000
Blend funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	1,522,000	1,220,000
Growth funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	1,867,000	1,932,000
Common Stock [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	4,000	3,000
Money Market Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	172,000	590,000
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	5,685,000	5,124,000
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Value funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	2,120,000	1,379,000
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Blend funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	1,522,000	1,220,000
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Growth funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	1,867,000	1,932,000
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Common Stock [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	4,000	3,000
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Money Market Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	172,000	590,000
(Level 2) Significant Other Observable Inputs [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	3,726,000	3,216,000
(Level 2) Significant Other Observable Inputs [Member] | Obligations of U.S. Government agencies and corporations [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	739,000	199,000
(Level 2) Significant Other Observable Inputs [Member] | Corporate notes [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	$ 2,987,000	$ 3,017,000

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Stockholders' Equity and Regulatory Matters

12 Months Ended

Dec. 31, 2013

Stockholders' Equity And Regulatory Matters [Abstract]

STOCKHOLDERS' EQUITY AND REGULATORY MATTERS

16.  Stockholders’ Equity and Regulatory Matters

The Company is authorized to issue 500,000 shares of preferred stock with no par value. The Board has the ability to fix the voting, dividend, redemption and other rights of the preferred stock, which can be issued in one or more series. No shares of preferred stock have been issued.

The Company has a dividend reinvestment and stock purchase plan. Under this plan, additional shares of Juniata Valley Financial Corp. stock may be purchased at the prevailing market prices with reinvested dividends and voluntary cash payments, within limits. To the extent that shares are not available in the open market, the Company has reserved common stock to be issued under the plan. Any adjustment in capitalization of the Company will result in a proportionate adjustment to the reserved shares for this plan. At December 31, 2013, 141,887shares were available for issuance under the Dividend Reinvestment Plan.

The Company periodically repurchases shares of its common stock under a share repurchase program approved by the Board of Directors. Repurchases have typically been through open market transactions and have complied with all regulatory restrictions on the timing and amount of such repurchases. Shares repurchased have been added to treasury stock and accounted for at cost. These shares may be reissued for stock option exercises, employee stock purchase plan purchases and to fulfill dividend reinvestment program needs. During 2013,  2012and 2011, 24,918,  19,793 and 33,850 shares, respectively, were repurchased in conjunction with this program. Remaining shares authorized in the program were 43,475 as of December 31, 2013.

The Company and the Bank are subject to risk-based capital standards by which bank holding companies and banks are evaluated in terms of capital adequacy. These regulatory capital requirements are administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s and Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to each maintain minimum amounts and ratios (set forth in the table below) of Total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined in the regulations), and Tier I capital (as defined in the regulations) to average assets (as defined in the regulations). Management believes, as of December 31, 2013 and 2012, that the Company and the Bank met all capital adequacy requirements to which they were subject.

As of December 31, 2013, the most recent notification from the regulatory banking agencies categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as “well capitalized”, the Bank must maintain minimum Total risk-based, Tier I risk-based and Tier I leverage ratios as set forth in the table. To the knowledge of management, there are no conditions or events since these notifications that have changed the Bank’s category.

The table below provides a comparison of the Company’s and the Bank’s risk-based capital ratios and leverage ratios to the minimum regulatory requirements for the periods indicated (dollars in thousands).

Juniata Valley Financial Corp. (Consolidated)					Minimum Requirement
					For Capital
		Actual			Adequacy Purposes
		Amount	Ratio		Amount	Ratio
As of December 31, 2013:
Total Capital	$	51,888	17.97%	$	23,105	8.00%
(to Risk Weighted Assets)
Tier 1 Capital		49,461	17.13%		11,553	4.00%
(to Risk Weighted Assets)
Tier 1 Capital		49,461	11.04%		17,915	4.00%
(to Average Assets)
As of December 31, 2012:
Total Capital	$	52,803	18.28%	$	23,103	8.00%
(to Risk Weighted Assets)
Tier 1 Capital		49,506	17.14%		11,552	4.00%
(to Risk Weighted Assets)
Tier 1 Capital		49,506	10.96%		18,074	4.00%
(to Average Assets)
								Minimum Regulatory
								Requirements to be
The Juniata Valley Bank					Minimum Requirement			"Well Capitalized"
					For Capital			under Prompt
		Actual			Adequacy Purposes			Corrective Action Provisions
		Amount	Ratio		Amount	Ratio		Amount	Ratio
As of December 31, 2013:
Total Capital	$	46,530	16.35%	$	22,773	8.00%	$	28,467	10.00%
(to Risk Weighted Assets)
Tier 1 Capital		44,185	15.52%		11,387	4.00%		17,080	6.00%
(to Risk Weighted Assets)
Tier 1 Capital		44,185	9.97%		17,723	4.00%		22,154	5.00%
(to Average Assets)
As of December 31, 2012:
Total Capital	$	47,812	16.79%	$	22,780	8.00%	$	28,475	10.00%
(to Risk Weighted Assets)
Tier 1 Capital		44,519	15.63%		11,390	4.00%		17,085	6.00%
(to Risk Weighted Assets)
Tier 1 Capital		44,519	9.99%		17,822	4.00%		22,277	5.00%
(to Average Assets)

Certain regulatory restrictions exist regarding the ability of the Bank to transfer funds to the Company in the form of cash dividends, loans or advances. At December 31, 2013, $39,118,000 of undistributed earnings of the Bank, included in the consolidated stockholders’ equity, was available for distribution to the Company as dividends without prior regulatory approval, subject to the regulatory capital requirements above.

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Loans and Related Allowance for Loan Losses (Troubled Debt Restructurings on Financing Receivables) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 loan	Dec. 31, 2012 loan
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	7	0
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 770
Financing Receivable, Modifications, Post-Modification Recorded Investment	775
Financing Receivable, Modifications, Recorded Investment	775
Real Estate - Commercial [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	1
Financing Receivable, Modifications, Pre-Modification Recorded Investment	64
Financing Receivable, Modifications, Post-Modification Recorded Investment	61
Financing Receivable, Modifications, Recorded Investment	61
Real Estate - Mortgage [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	6
Financing Receivable, Modifications, Pre-Modification Recorded Investment	706
Financing Receivable, Modifications, Post-Modification Recorded Investment	714
Financing Receivable, Modifications, Recorded Investment	$ 714

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Juniata Valley Financial Corp. (Parent Company Only) (Schedule of Condensed Balance Sheets) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Cash and cash equivalents	$ 8,613	$ 14,397
Investment in unconsolidated subsidiary	4,172	4,000
Investment securities available for sale	126,046	122,338
TOTAL ASSETS	448,782	448,869
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	448,782	448,869
Parent Company [Member]
Cash and cash equivalents	365	231
Investment in bank subsidiary	44,589	45,285
Investment in unconsolidated subsidiary	4,172	4,000
Investment securities available for sale	1,127	954
Other Assets	56	15
TOTAL ASSETS	50,309	50,485
Accounts payable and other liabilities	325	188
STOCKHOLDERS' EQUITY	49,984	50,297
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 50,309	$ 50,485

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Operating activities:
Net income	$ 4,001	$ 3,648	$ 4,680
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	415	1,411	364
Depreciation	497	524	581
Net amortization of securities premiums	440	412	369
Net amortization of loan origination costs (fees)	25	(31)	43
Deferred net loan origination fees (costs)	15	(32)	(9)
Amortization of intangibles	45	45	45
Amortization of investment in low income housing partnership	448
Net realized loss (gain) on calls of securities	2	(2)	(6)
Net (gain) loss on sales of other real estate owned	(39)	34	(56)
Earnings on bank owned life insurance and annuities	(416)	(450)	(478)
Deferred tax expense (benefit)	662	(64)	(20)
Equity in earnings of unconsolidated subsidiary, net of dividends of $47, $45 and $29	(190)	(204)	(234)
Stock-based compensation expense	30	25	26
Mortgage loans originated for sale	(8,173)	(11,057)
Proceeds from loans sold to others	8,442	11,526
Gains on sales of loans	(338)	(567)
Gain from life insurance proceeds		(53)
Decrease in accrued interest receivable and other assets	930	478	190
(Decrease) increase in accrued interest payable and other liabilities	(997)	167	86
Net cash provided by operating activities	5,799	5,810	5,581
Investing activities:
Purchases of: Securities available for sale	(45,446)	(87,319)	(87,131)
Purchases of: FHLB stock	(241)	(26)
Purchases of: Premises and equipment	(355)	(286)	(224)
Purchases of: Bank owned life insurance and annuities	(68)	(70)	(70)
Proceeds from: Maturities of and principal repayments on securities available for sale	38,973	75,816	56,034
Proceeds from: Redemption of FHLB stock			388
Proceeds from: Bank owned life insurance and annuities	8	13	23
Proceeds from: Proceeds from life insurance claim		200
Proceeds from: Sale of other real estate owned	780	988	612
Proceeds from: Sale of other assets	18	2	9
Investment in low income housing partnership	(642)	(3,403)
Net decrease in interest bearing time deposits with banks	598	249	249
Net (increase) decrease in loans	(2,359)	10,160	7,537
Net cash used in investing activities	(8,734)	(3,676)	(22,573)
Financing activities:
Net (decrease) increase in deposits	(7,106)	86	9,875
Net increase in short-term borrowings and securities sold under agreements to repurchase	8,361	1,936	186
Cash dividends	(3,707)	(3,724)	(3,648)
Purchase of treasury stock	(445)	(360)	(589)
Treasury stock issued for employee stock plans	48	151	66
Net cash (used in) provided by financing activities	(2,849)	(1,911)	5,890
Net (decrease) increase in cash and cash equivalents	(5,784)	223	(11,102)
Cash and cash equivalents at beginning of year	14,397	14,174	25,276
Cash and cash equivalents at end of year	8,613	14,397	14,174
Supplemental information:
Interest paid	2,967	3,715	4,669
Income taxes paid	695	1,135	1,200
Supplemental schedule of noncash investing and financing activities:
Transfer of loans to other real estate owned	594	1,023	571
Transfer of loans to other assets	$ 18		$ 22

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Consolidated Statements of Financial Condition(Parenthetical) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Consolidated Statements of Financial Condition [Abstract]
Preferred Stock, Par or Stated Value Per Share	$ 0	$ 0
Preferred Stock, Authorized	500,000	500,000
Preferred Stock, Shares Issued	0	0
Common Stock, Par or Stated Value Per Share	$ 1.00	$ 1.00
Common Stock, Shares Authorized	20,000,000	20,000,000
Common Stock, Shares Issued	4,745,826	4,745,826
Common Stock, Shares, Outstanding	4,196,266	4,218,361
Treasury Stock, Shares	549,560	527,465

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Premises and Equipment

12 Months Ended

Dec. 31, 2013

Premises and Equipment [Abstract]

PREMISES AND EQUIPMENT

9.  Premises And Equipment

Premises and equipment consist of the following (in thousands):

	December 31,
		2013		2012
Land	$	1,066	$	864
Buildings and improvements		8,585		8,510
Furniture, computer software and equipment		4,601		4,523
		14,252		13,897
Less: accumulated depreciation		(7,922)		(7,425)
	$	6,330	$	6,472

Depreciationexpense on premises and equipment charged to operations was $497,000 in 2013, $524,000 in2012 and $581,000 in 2011.

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Financial Instruments With Off-Balance Sheet Risk (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Nature of Operations [Abstract]
Maximum undiscounted exposure	$ 1,199,000
Underlying collateral upon liquidation	$ 1,061,000	$ 1,061,000

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Fair Value Measurements (Estimated Fair Values of Financial Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest bearing deposits with banks	$ 43	$ 136
Interest bearing time deposits with banks	249	847
Investment securities available for sale	126,046	122,338
Restricted investment in Federal Home Loan Bank (FHLB) stock	1,967	1,726
Non-interest bearing deposits	74,611	71,318
Interest bearing deposits	305,034	315,433
Short-term borrowings	13,797	5,436	3,500
Other interest bearing liabilities	1,356	1,305
Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and due from banks	8,570	14,261
Interest bearing deposits with banks	43	136
Interest bearing time deposits with banks	249	847
Investment securities available for sale	126,046	122,338
Restricted investment in Federal Home Loan Bank (FHLB) stock	1,967	1,726
Total loans, net of allowance for loan losses	275,511	274,219
Mortgage servicing rights	167	98
Accrued interest receivable	1,529	1,632
Non-interest bearing deposits	74,611	71,318
Interest bearing deposits	305,034	315,433
Securities sold under agreements to repurchase	5,397	3,836
Short-term borrowings	8,400	1,600
Other interest bearing liabilities	1,356	1,305
Accrued interest payable	287	354
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and due from banks	8,570	14,261
Interest bearing deposits with banks	43	136
Interest bearing time deposits with banks	250	849
Investment securities available for sale	126,046	122,338
Restricted investment in Federal Home Loan Bank (FHLB) stock	1,967	1,726
Total loans, net of allowance for loan losses	282,226	286,467
Mortgage servicing rights	167	98
Accrued interest receivable	1,529	1,632
Non-interest bearing deposits	74,611	71,318
Interest bearing deposits	308,414	319,946
Securities sold under agreements to repurchase	5,397	3,836
Short-term borrowings	8,400	1,600
Other interest bearing liabilities	1,358	1,315
Accrued interest payable	$ 287	$ 354

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Fair Value Measurements (Fair Value Measurements by Level of Valuation Inputs) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	$ 126,046	$ 122,338
Impaired loans	8,049	7,662
Other real estate owned	281	428
Obligations of U.S. Government agencies and corporations [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	78,278	72,817
Obligations of State and Political Subdivisions [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	41,932	45,976
Parent Company [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	1,127	954
Measured at Fair Value on a Recurring Basis [Member] | Obligations of U.S. Government agencies and corporations [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	78,278	72,817
Measured at Fair Value on a Recurring Basis [Member] | Obligations of State and Political Subdivisions [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	41,932	45,976
Measured at Fair Value on a Recurring Basis [Member] | Mortgage-backed securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	4,469	2,526
Measured at Fair Value on a Recurring Basis [Member] | Equity securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	1,367	1,019
Measured at Fair Value on a Recurring Basis [Member] | (Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Equity securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	1,367	1,019
Measured at Fair Value on a Recurring Basis [Member] | (Level 2) Significant Other Observable Inputs [Member] | Obligations of U.S. Government agencies and corporations [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	78,278	72,817
Measured at Fair Value on a Recurring Basis [Member] | (Level 2) Significant Other Observable Inputs [Member] | Obligations of State and Political Subdivisions [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	41,932	45,976
Measured at Fair Value on a Recurring Basis [Member] | (Level 2) Significant Other Observable Inputs [Member] | Mortgage-backed securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	4,469	2,526
Measured at Fair Value on a Non-Recurring Basis [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Impaired loans	3,300	2,056
Other real estate owned	50	50
Mortgage servicing rights	167	98
Measured at Fair Value on a Non-Recurring Basis [Member] | (Level 3) Significant Other Unobservable Inputs [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Impaired loans	3,300	2,056
Other real estate owned	50	50
Mortgage servicing rights	167	98
Impaired Loans [Member] | Measured at Fair Value on a Non-Recurring Basis [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Impaired loans	3,300	2,056
Other Real Estate Owned [Member] | Measured at Fair Value on a Non-Recurring Basis [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other real estate owned	50	50
Mortgage Servicing Rights [Member] | Measured at Fair Value on a Non-Recurring Basis [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage servicing rights	$ 167	$ 98

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013	Mar. 04, 2014	Jun. 30, 2013
Document and Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2013
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2013
Entity Registrant Name	JUNIATA VALLEY FINANCIAL CORP
Entity Central Index Key	0000714712
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Public Float			$ 73,138,453
Entity Common Stock, Shares Outstanding		4,196,266

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Acquisition

12 Months Ended

Dec. 31, 2013

Acquisition [Abstract]

Acquisition

10. Acquisition

On September 8, 2006, the Company completed its acquisition of a branch office in Richfield, PA. The acquisition included real estate, deposits and loans. The assets and liabilities of the acquired branch office were recorded on the consolidated statement of financial condition at their estimated fair values as of September 8, 2006, and its results of operations have been included in the consolidated statements of income since such date.

Included in the purchase price of the branch was goodwill and core deposit intangible of $2,046,000 and $449,000, respectively. The core deposit intangible is being amortized over a ten-year period on a straight line basis. The goodwill is not amortized, but is measured annually for impairment. Core deposit intangible amortization expense of $45,000was recorded in each of the years 2013, 2012 and 2011. Intangible amortization expense projected for the succeeding five years beginning in 2014 is estimated to be $45,000in2014and 2015 and $29,000 for 2016.

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Borrowings (Schedule of Borrowings) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Short-term Debt [Line Items]
Short-term borrowings, Outstanding Balance	$ 13,797	$ 5,436	$ 3,500
Rate	0.19%	0.14%	0.10%
Short-term borrowings, Average Balance	7,532
Weighted Average Rate	0.16%
Securities Sold under Agreements to Repurchase [Member]
Short-term Debt [Line Items]
Short-term borrowings, Outstanding Balance	5,397	3,836	3,500
Rate	0.10%	0.10%	0.10%
Short-term borrowings, Average Balance	4,332
Weighted Average Rate	0.10%
Federal Home Loan Bank Advances [Member]
Short-term Debt [Line Items]
Short-term borrowings, Outstanding Balance	8,400	1,600
Rate	0.25%	0.25%
Short-term borrowings, Average Balance	$ 3,200
Weighted Average Rate	0.25%

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Accumulated Other Comprehensive Loss (Accumulated Other Comprehensive Loss) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Accumulated Other Comprehensive Income [Abstract]
Unrealized gains on available for sale securities	$ (751)	$ 800	$ 823
Unrecognized expense for defined benefit pension	(908)	(2,219)	(3,079)
Accumulated other comprehensive loss	$ (1,659)	$ (1,419)	$ (2,256)

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Consolidated Statements of Income (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Interest income:
Loans, including fees	$ 14,868	$ 16,092	$ 17,857
Taxable securities	1,267	1,311	1,240
Tax-exempt securities	583	738	901
Other interest income	16	29	35
Total interest income	16,734	18,170	20,033
Interest expense:
Deposits	2,871	3,621	4,560
Securities sold under agreements to repurchase	4	4	3
Short-term borrowings	8	1	1
Other interest bearing liabilities	17	22	27
Total interest expense	2,900	3,648	4,591
Net interest income	13,834	14,522	15,442
Provision for loan losses	415	1,411	364
Net interest income after provision for loan losses	13,419	13,111	15,078
Non-interest income:
Customer service fees	1,290	1,282	1,346
Debit card fee income	822	809	792
Earnings on bank-owned life insurance and annuities	416	450	478
Trust fees	355	379	388
Commissions from sales of non-deposit products	375	353	273
Income from unconsolidated subsidiary	237	249	263
Fees derived from loan activity	165	197	152
Gain on sales of loans	338	567
(Loss) gain on calls of securities	(2)	2	6
Gain from life insurance proceeds		53
Other non-interest income	237	251	248
Total non-interest income	4,233	4,592	3,946
Non-interest expense:
Employee compensation expense	5,413	5,190	5,258
Employee benefits	1,615	2,096	1,686
Occupancy	971	929	957
Equipment	462	510	569
Data processing expense	1,450	1,440	1,326
Director compensation	223	234	284
Professional fees	388	362	462
Taxes, other than income	483	438	496
FDIC Insurance premiums	331	327	369
(Gain) loss on sales of other real estate owned	(39)	34	(56)
Amortization of intangibles	45	45	45
Amortization of investment in low-income housing partnership	448
Other non-interest expense	1,356	1,472	1,406
Total non-interest expense	13,146	13,077	12,802
Income before income taxes	4,506	4,626	6,222
Provision for income taxes	505	978	1,542
Net income	$ 4,001	$ 3,648	$ 4,680
Earnings per share
Basic earnings per share	$ 0.95	$ 0.86	$ 1.10
Diluted earnings per share	$ 0.95	$ 0.86	$ 1.10
Cash dividends declared per share	$ 0.88	$ 0.88	$ 0.86
Weighted average basic shares outstanding	4,210,336	4,231,404	4,241,286
Weighted average diluted shares outstanding	4,211,078	4,233,448	4,244,507

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Restrictions on Cash and Due from Banks

12 Months Ended

Dec. 31, 2013

Restrictions on Cash and Due from Banks [Abstract]

RESTRICTIONS ON CASH AND DUE FROM BANKS

4.Restrictions on Cash and Due From Banks

The Bank is required to maintain cash reserve balances with the Federal Reserve Bank. The total required reserve balances were $362,000 and $225,000 as of December 31, 2013 and 2012, respectively.

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Recent Accounting Standards Update (ASU)

12 Months Ended

Dec. 31, 2013

Recent Accounting Pronouncements [Abstract]

Recent Accounting Standards Update (ASU)

3.  Recent Accounting Standards Update (ASU)

There were no new accounting pronouncements affecting the Company during the year ended December 31, 2013 that had not been adopted by the Company in previous periods. In addition, there are no recently issued accounting standards that are expected to have a material impact on the Company’s consolidated financial statements in future periods.

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Income Taxes

12 Months Ended

Dec. 31, 2013

Income Taxes [Abstract]

INCOME TAXES

15.  Income Taxes

The components of income tax expense for the three years ended December 31 were (in thousands):

		2013		2012		2011
Current tax (benefit) expense	$	(157)	$	1,042	$	1,562
Deferred tax expense (benefit)		662		(64)		(20)
Total tax expense	$	505	$	978	$	1,542

Income tax expense (benefit) related to realized securities gains was $(1,000) in 2013, $1,000 in 2012 and $2,000 in 2011.

A reconciliation of the statutory income tax expense computed at 34% to the income tax expense included in the consolidated statements of income follows (dollars in thousands):

	Years Ended December 31,
		2013		2012		2011
Income before income taxes	$	4,506	$	4,626	$	6,222
Effective tax rate		34.0%		34.0%		34.0%
Federal tax at statutory rate		1,532		1,573		2,115
Tax-exempt interest		(354)		(431)		(439)
Net earnings on BOLI		(108)		(148)		(133)
Dividend from unconsolidated subsidiary		(13)		(12)		(8)
Stock-based compensation		10		2		7
Federal tax credits		(556)		-		-
Other permanent differences		(6)		(6)		-
Total tax expense	$	505	$	978	$	1,542
Effective tax rate		11.2%		21.1%		24.8%

Deductible temporary differences and taxable temporary differences gave rise to a net deferred tax asset for the Company as of December 31, 2013 and 2012.  The components giving rise to the net deferred tax asset are detailed below (in thousands):

		December 31,
		2013		2012
Deferred Tax Assets
Allowance for loan losses	$	639	$	1,000
Deferred directors' compensation		541		565
Employee and director benefits		574		605
Qualified pension liability		-		321
Unrealized losses on securities available for sale		387		-
Unrealized loss from securities impairment		221		221
Other		109		160
Total deferred tax assets		2,471		2,872
Deferred Tax Liabilities
Depreciation		(223)		(236)
Equity income from unconsolidated subsidiary		(462)		(398)
Qualified pension asset		(342)		-
Loan origination costs		(287)		(223)
Prepaid expense		(95)		(90)
Unrealized gains on securities available for sale		-		(403)
Annuity earnings		(63)		(58)
Fair value of mortgage servicing rights		(57)		(33)
Goodwill		(340)		(294)
Total deferred tax liabilities		(1,869)		(1,735)
Net deferred tax asset
included in other assets	$	602	$	1,137

The Company has concluded that the deferred tax assets are realizable (on a more likely than not basis) through the combination of future reversals of existing taxable temporary differences, certain tax planning strategies and expected future taxable income.

It is the Company’s policy to recognize interest and penalties on unrecognized tax benefits in income tax expense in the Consolidated Statements of Income. No significant income tax uncertainties were identified as a result of the Company’s evaluation of its income tax position. Therefore, the Company recognized no adjustment for unrecognized income tax benefits for the years ended December 31, 2013,  2012 and 2011.  The Company is no longer subject to examination by taxing authorities for years before 2010.  Tax years 2010 through the present, with limited exception, remain open to examination.

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Investment in Unconsolidated Subsidiary

12 Months Ended

Dec. 31, 2013

Investment in Unconsolidated Subsidiary [Abstract]

Investment in Unconsolidated Subsidiary

11.  Investment in Unconsolidated Subsidiary

On September 1, 2006, the Company invested in Liverpool Community Bank (formerly known as The First National Bank of Liverpool) (“LCB”), Liverpool, PA, by purchasing 39.16% of its outstanding common stock. This investment is accounted for under the equity method of accounting. The investment is being carried at $4,172,000 as of December 31, 2013.The Company increases its investment in LCB for its share of earnings and decreases its investment by any dividends received from LCB. The investment is evaluated quarterly for impairment. A loss in value of the investment which is determined to be other than a temporary decline would be recognized as a loss in the period in which such determination is made. Evidence of a loss in value might include, but would not necessarily be limited to, absence of an ability to recover the carrying amount of the investment or inability of LCB to sustain an earnings capacity which would justify the current carrying value of the investment.

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Income Taxes (Components of Income Tax Expense) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Taxes [Abstract]
Current tax (benefit) expense									$ (157)	$ 1,042	$ 1,562
Deferred tax expense (benefit)									662	(64)	(20)
Total tax expense	$ 46	$ 60	$ 62	$ 337	$ 242	$ 354	$ 372	$ 10	$ 505	$ 978	$ 1,542

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Pledged Assets

12 Months Ended

Dec. 31, 2013

Pledged Assets [Abstract]

PLEDGED ASSETS

7.  Pledged Assets

The Bank must maintain sufficient qualifying collateral with the Federal Home Loan Bank (FHLB), in order to secure borrowings. Therefore, a Master Collateral Agreement has been entered into which pledges all mortgage related assets as collateral for future borrowings. Mortgage related assets could include loans or investment securities. As of December 31, 2013, the amount of loans included in qualifying collateral was  $190,905,000, for a collateral value of $135,454,000.  No investment securities are included in qualifying collateral as of December 31, 2013.

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Securities (Summary of Proceeds and Realized Gain/(Loss)) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Securities [Abstract]
Gross proceeds from sales of securities
Gross realized gains from called securities		2	6
Gross realized losses from called securities	$ (2)

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Juniata Valley Financial Corp. (Parent Company Only) (Schedule of Condensed Statements of Cash Flows) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Net income	$ 4,001	$ 3,648	$ 4,680
Net amortization of securities premiums	440	412	369
Realized losses on sales of investment securities	(2)	2	6
Equity in earnings of unconsolidated subsidiary, net of dividends of $47, $45 and $29	(190)	(204)	(234)
Net cash provided by operating activities	5,799	5,810	5,581
Purchases of: Securities available for sale	(45,446)	(87,319)	(87,131)
Proceeds from the maturity and principal repayments of available for sale investment securities	38,973	75,816	56,034
Proceeds from the maturity of interest bearing time deposits	598	249	249
Net cash (used in) provided by investing activities	(8,734)	(3,676)	(22,573)
Cash dividends	(3,707)	(3,724)	(3,648)
Purchase of treasury stock	(445)	(360)	(589)
Treasury stock issued for dividend reinvestment and employee stock purchase plan	48	151	66
Net cash used in financing activities	(2,849)	(1,911)	5,890
Net (decrease) increase in cash and cash equivalents	(5,784)	223	(11,102)
Cash and cash equivalents at beginning of year	14,397	14,174	25,276
Cash and cash equivalents at end of year	8,613	14,397	14,174
Parent Company [Member]
Net income	4,001	3,648	4,680
Undistributed net income of subsidiary	391	(692)	(332)
Net amortization of securities premiums		2	2
Equity in earnings of unconsolidated subsidiary, net of dividends of $47, $45 and $29	(190)	(204)	(234)
(Increase) decrease in other assets	(42)	12	2
Increase (decrease) in taxes payable	87	127	68
Increase (decrease) in accounts payable and other liabilities	(7)	(2)	19
Net cash provided by operating activities	4,240	2,891	4,205
Purchases of: Securities available for sale	(252)		(50)
Proceeds from the maturity and principal repayments of available for sale investment securities	250	1,235
Net cash (used in) provided by investing activities	(2)	1,235	(50)
Cash dividends	(3,707)	(3,724)	(3,648)
Purchase of treasury stock	(445)	(360)	(589)
Treasury stock issued for dividend reinvestment and employee stock purchase plan	48	151	66
Net cash used in financing activities	(4,104)	(3,933)	(4,171)
Net (decrease) increase in cash and cash equivalents	134	193	(16)
Cash and cash equivalents at beginning of year	231	38	54
Cash and cash equivalents at end of year	$ 365	$ 231	$ 38

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Securities

12 Months Ended

Dec. 31, 2013

Securities [Abstract]

Securities

5.Securities

The Company’s investment portfolio includes primarily bonds issued by U.S. Government sponsored agencies (approximately 62%) and municipalities (approximately 33%) as of December 31, 2013. Most of the municipal bonds are general obligation bonds with maturities or pre-refunding dates within 5 years. The remaining 5% of the portfolio includes mortgage-backed securities issued by Government-sponsored agencies and backed by residential mortgages and a group of equity investments in other financial institutions.

The amortized cost and fair value of securities as of December 31, 2013 and 2012, by contractual maturity, are shown below (in thousands). Expected maturities may differ from contractual maturities because the securities may be called or prepaid with or without prepayment penalties.

		December 31, 2013
Securities Available for Sale						Gross		Gross
		Amortized		Fair		Unrealized		Unrealized
Type and maturity		Cost		Value		Gains		Losses
Obligations of Government agencies and corporations
Within one year	$	4,177	$	4,192	$	15	$	-
After one year but within five years		48,011		47,578		203		(636)
After five years but within ten years		27,615		26,508		-		(1,107)
		79,803		78,278		218		(1,743)
Obligations of state and political subdivisions
Within one year		8,260		8,314		55		(1)
After one year but within five years		26,027		26,098		133		(62)
After five years but within ten years		7,224		7,182		56		(98)
After ten years		350		338		-		(12)
		41,861		41,932		244		(173)
Mortgage-backed securities		4,465		4,469		7		(3)
Equity securities		1,055		1,367		366		(54)
Total	$	127,184	$	126,046	$	835	$	(1,973)

		December 31, 2012
Securities Available for Sale						Gross		Gross
		Amortized		Fair		Unrealized		Unrealized
Type and maturity		Cost		Value		Gains		Losses
Obligations of Government agencies and corporations
Within one year	$	7,908	$	7,996	$	88	$	-
After one year but within five years		42,253		42,796		543		-
After five years but within ten years		22,004		22,025		53		(32)
		72,165		72,817		684		(32)
Obligations of state and political subdivisions
Within one year		10,448		10,505		57		-
After one year but within five years		29,595		29,809		246		(32)
After five years but within ten years		4,727		4,936		215		(6)
After ten years		731		726		-		(5)
		45,501		45,976		518		(43)
Mortgage-backed securities		2,502		2,526		24		-
Equity securities		985		1,019		145		(111)
Total	$	121,153	$	122,338	$	1,371	$	(186)

Certain obligations of the U.S. Government and state and political subdivisions are pledged to secure public deposits, securities sold under agreements to repurchase and for other purposes as required or permitted by law. The carrying value of the pledged assets was $31,921,000 and $30,785,000at December 31, 2013 and 2012, respectively.

In addition to cash received from the scheduled maturities of securities, some investment securities available for sale are sold at current market values during the course of normal operations. Following is a summary of proceeds received from all investment securities transactions and the resulting realized gains and losses (in thousands):

				Years Ended December 31,
		2013		2012		2011
Gross proceeds from sales of securities	$	-	$	-	$	-
Securities available for sale:
Gross realized gains from called securities	$	-	$	2	$	6
Gross realized losses from called securities		(2)		-		-

The following table shows gross unrealized losses and fair value, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2013 (in thousands):

		Unrealized Losses at December 31, 2013
		Less Than 12 Months				12 Months or More				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
Obligations of U.S. Government
agencies and corporations	$	53,438	$	(1,664)	$	1,921	$	(79)	$	55,359	$	(1,743)
Obligations of state and political
subdivisions		11,496		(130)		4,301		(43)		15,797		(173)
Mortgage-backed securities		308		(3)		-		-		308		(3)
Debt securities		65,242		(1,797)		6,222		(122)		71,464		(1,919)
Equity securities		-		-		266		(54)		266		(54)
Total temporarily impaired securities	$	65,242	$	(1,797)	$	6,488	$	(176)	$	71,730	$	(1,973)

At December 31, 2013, 45 U.S. Government and agency securities had unrealized losses that in the aggregate did not exceed 3% of amortized cost. One of these securities has been in a continuous loss position for 12 months or more.

At December 31, 2013, 37 obligations of state and political subdivision bonds had unrealized losses that in the aggregate did not exceed 2% of amortized cost. Eight of these securities have been in a continuous loss position for 12 months or more.

At December 31, 2013, one mortgage-backed security had an unrealized loss that did not exceed 1% of amortized cost. This security had not been in a continuous loss position for 12 months or more.

The mortgage-backed securities in the Company’s portfolio are government sponsored enterprise (GSE) pass-through instruments issued by the Federal National Mortgage Association (FNMA), which guarantees the timely payment of principal on these investments.

The unrealized losses noted above are considered to be temporary impairments. The decline in the values of the debt securities is due only to interest rate fluctuations, rather than erosion of issuer credit quality. As a result, the payment of contractual cash flows, including principal repayment, is not at risk. As the Company does not intend to sell the securities, does not believe the Company will be required to sell the securities before recovery and expects to recover the entire amortized cost basis, none of the debt securities are deemed to be other-than-temporarily impaired.

Equity securities owned by the Company consist of common stock of various financial services providers (“Bank Stocks”) and are evaluated quarterly for evidence of other-than-temporary impairment. There were seven equity securities that were in an unrealized loss position on December 31, 2013, and have carried unrealized losses for 12 months or more. Individually, none of these seven equity securities have significant unrealized losses. Of the seven equity securities that have sustained unrealized losses for more than 12 months, all have increased in fair value during 2013, indicating the possibility of full recovery and therefore are deemed to be temporarily impaired. Management has identified no other-than-temporary impairment as of, or for the periods ended, December 31, 2013 and 2012 in the equity portfolio. Management continues to track the performance of each stock owned to determine if it is prudent to deem any further other-than-temporary impairment charges. The Company has the ability and intent to hold its equity securities until recovery of unrealized losses.

The following table shows gross unrealized losses and fair value, aggregated by category and length of time that individual securities had been in a continuous unrealized loss position, at December 31, 2012 (in thousands):

		Unrealized Losses at December 31, 2012
		Less Than 12 Months				12 Months or More				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
Obligations of U.S. Government
agencies and corporations	$	11,471	$	(32)	$	-	$	-	$	11,471	$	(32)
Obligations of state and political
subdivisions		13,040		(43)		-		-		13,040		(43)
Debt securities		24,511		(75)		-		-		24,511		(75)
Equity securities		249		(13)		251		(98)		500		(111)
Total temporarily impaired securities	$	24,760	$	(88)	$	251	$	(98)	$	25,011	$	(186)

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Loans and Related Allowance for Loan Losses

12 Months Ended

Dec. 31, 2013

Loans and Related Allowance for Credit Losses [Abstract]

Loans and Related Allowance for Loan Losses

6.  Loans and Related Allowance for Loan Losses

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Company’s internal risk rating system as of December 31, 2013 and December 31, 2012 (in thousands):

As of December 31, 2013	Pass		Special Mention		Substandard		Doubtful		Total
Commercial, financial and agricultural	$	20,388	$	5,658	$	235	$	-	$	26,281
Real estate - commercial		56,867		11,706		5,620		278		74,471
Real estate - construction		15,803		292		1,754		1,832		19,681
Real estate - mortgage		130,706		3,995		4,272		1,486		140,459
Obligations of states and political subdivisions		12,674		28				-		12,702
Personal		4,204		-				-		4,204
Total	$	240,642	$	21,679	$	11,881	$	3,596	$	277,798
As of December 31, 2012	Pass		Special Mention		Substandard		Doubtful		Total
Commercial, financial and agricultural	$	17,570	$	904	$	822	$	-	$	19,296
Real estate - commercial		55,198		8,939		5,010		40		69,187
Real estate - construction		14,001		1,022		867		2,202		18,092
Real estate - mortgage		144,179		3,864		2,350		2,729		153,122
Obligations of states and political subdivisions		12,769		-		-		-		12,769
Personal		5,024		10		-		-		5,034
Total	$	248,741	$	14,739	$	9,049	$	4,971	$	277,500

The Company has certain loans in its portfolio that are considered to be impaired. It is the policy of the Company to recognize income on impaired loans that have been transferred to nonaccrual status on a cash basis, only to the extent that it exceeds principal balance recovery. Until an impaired loan is placed on nonaccrual status, income is recognized on the accrual basis. A collateral analysis is performed on each impaired loan at least quarterly and results are used to determine if a specific reserve is necessary to adjust the carrying value of each individual loan down to the estimated fair value. Generally, specific reserves are carried against impaired loans based upon estimated collateral value until a confirming loss event occurs or until termination of the credit is scheduled through liquidation of the collateral or foreclosure. Charge off will occur when a confirmed loss is identified. Professional appraisals of collateral, discounted for expected selling costs, are used to determine the charge-off amount. The following tables summarize information regarding impaired loans by portfolio class as of December 31, 2013 and December 31, 2012 (in thousands):

		As of December 31, 2013						As of December 31, 2012
Impaired loans		Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial, financial and agricultural	$	94	$	94	$	-	$	160	$	160	$	-
Real estate - commercial		2,017		2,142		-		2,672		2,672		-
Real estate - construction		504		813		-		2,004		2,197		-
Real estate - mortgage		3,353		4,751		-		487		523		-
With an allowance recorded:
Real estate - commercial	$	238	$	238	$	26	$	-	$	-	$	-
Real estate - construction		1,478		1,502		93		198		198		91
Real estate - mortgage		365		394		45		2,141		2,141		1,036
Total:
Commercial, financial and agricultural	$	94	$	94	$	-	$	160	$	160	$	-
Real estate - commercial		2,255		2,380		26		2,672		2,672		-
Real estate - construction		1,982		2,315		93		2,202		2,395		91
Real estate - mortgage		3,718		5,145		45		2,628		2,664		1,036
	$	8,049	$	9,934	$	164	$	7,662	$	7,891	$	1,127

		Year Ended December 31,  2013						Year Ended December 31,  2012						Year Ended December 31,  2011
Impaired loans		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
With no related allowance recorded:
Commercial, financial and agricultural	$	127	$	-	$	-	$	199	$	14	$	-	$	274	$	19	$	-
Real estate - commercial		2,345		96		24		2,492		119		3		2,354		139		10
Real estate - construction		1,254		2		6		1,362		-		-		485		42		14
Real estate - mortgage		1,920		64		24		1,371		-		-		2,453		34		47
With an allowance recorded:
Real estate - commercial	$	119	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Real estate - construction		838		-		-		674		-		15		1,025		-		-
Real estate - mortgage		1,253		-		7		2,503		-		-		2,051		65		-
Total:
Commercial, financial and agricultural	$	127	$	-	$	-	$	199	$	14	$	-	$	274	$	19	$	-
Real estate - commercial		2,464		96		24		2,492		119		3		2,354		139		10
Real estate - construction		2,092		2		6		2,036		-		15		1,510		42		14
Real estate - mortgage		3,173		64		31		3,874		-		-		4,504		99		47
	$	7,856	$	162	$	61	$	8,601	$	133	$	18	$	8,642	$	299	$	71

The following table presents nonaccrual loans by classes of the loan portfolio as of December 31, 2013 and December 31, 2012 (in thousands):

Nonaccrual loans:		December 31, 2013		December 31, 2012
Commercial, financial and agricultural	$	10	$	20
Real estate - commercial		1,331		1,835
Real estate - construction		1,982		2,376
Real estate - mortgage		2,629		4,615
Total	$	5,952	$	8,846

Interest income not recorded based on the original contractual terms of the loans for nonaccrual loans was $490,000, $472,000 and $405,000 in 2013, 2012 and 2011, respectively. The aggregate amount of demand deposits that have been reclassified as loan balances at December 31, 2013 and 2012 were $41,000 and $620,000, respectively.

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio summarized by the past due status as of December 31, 2013 and December 31, 2012 (in thousands):

As of  December 31, 2013		30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Loans Past Due greater than 90 Days and Accruing
Commercial, financial and agricultural	$	19	$	-	$	10	$	29	$	26,252	$	26,281	$	-
Real estate - commercial		35		1,092		947		2,074		72,397		74,471		61
Real estate - construction		239		7		1,801		2,047		17,634		19,681		-
Real estate - mortgage		1,239		2,130		2,585		5,954		134,505		140,459		251
Obligations of states and political subdivisions		-		-		-		-		12,702		12,702		-
Personal		23		1				24		4,180		4,204		-
Total	$	1,555	$	3,230	$	5,343	$	10,128	$	267,670	$	277,798	$	312
As of December 31, 2012		30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Loans Past Due greater than 90 Days and Accruing
Commercial, financial and agricultural	$	30	$	-	$	191	$	221	$	19,075	$	19,296	$	171
Real estate - commercial		295		819		1,928		3,042		66,145		69,187		93
Real estate - construction		9		136		2,335		2,480		15,612		18,092		156
Real estate - mortgage		1,359		3,131		4,428		8,918		144,204		153,122		320
Obligations of states and political subdivisions		-		-		-		-		12,769		12,769		-
Personal		29		25		2		56		4,978		5,034		2
Total	$	1,722	$	4,111	$	8,884	$	14,717	$	262,783	$	277,500	$	742

The following table summarizes information regarding troubled debt restructurings by loan portfolio class as of and for the year ended December 31, 2013, in thousands of dollars. There were no loans identified as troubled debt restructurings as of or for the year ended December 31, 2012.

	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Recorded Investment
2013
Accruing troubled debt restructurings:
Real estate - commercial	1	$	64	$	61	$	61
Real estate - mortgage	6		706		714		714
	7	$	770	$	775	$	775

The Company’s troubled debt restructurings are also impaired loans, which may result in a specific allocation and subsequent charge-off if appropriate. As of December 31, 2013, there were no specific reserves or charge-offs relating to the troubled debt restructurings. The amended terms of the restructured loans vary, whereby interest rates have been reduced, principal payments have been reduced or deferred for a period of time and/or maturity dates have been extended. One restructured loan was delinquent in excess of 90 days with respect to the terms of the restructuring as of December 31, 2013. This loan has a balance of $61,000 and is in the process of foreclosure.

There were no loans modified resulting in troubled debt restructurings during 2012. There have been no defaults of troubled debt restructuring that took place during 2012 and 2013 within 12 months of restructure.

The following tables summarize the activity in the allowance for loan losses by loan class and loans by loan class, segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of and for the years ended December 31, 2013, 2012 and  2011 (in thousands):

Allowance for loan losses:	Commercial, financial and agricultural		Real estate - commercial		Real estate - construction		Real estate - mortgage		Obligations of states and political subdivisions		Personal		Total
Beginning Balance, January 1, 2013	$	179	$	463	$	202	$	2,387	$	-	$	50	$	3,281
Charge-offs		(4)		-		(117)		(1,281)		-		(29)		(1,431)
Recoveries		13		-		-		-		-		9		22
Provisions		65		71		127		140		-		12		415
Ending balance	$	253	$	534	$	212	$	1,246	$	-	$	42	$	2,287
As of December 31, 2013	Commercial, financial and agricultural		Real estate - commercial		Real estate - construction		Real estate - mortgage		Obligations of states and political subdivisions		Personal		Total
Allowance for loan losses:
Ending balance	$	253	$	534	$	212	$	1,246	$	-	$	42	$	2,287
evaluated for impairment
individually	$	-	$	26	$	93	$	45	$	-	$	-	$	164
collectively	$	253	$	508	$	119	$	1,201	$	-	$	42	$	2,123
Loans:
Ending balance	$	26,281	$	74,471	$	19,681	$	140,459	$	12,702	$	4,204	$	277,798
evaluated for impairment
individually	$	94	$	2,255	$	1,982	$	3,718	$	-	$	-	$	8,049
collectively	$	26,187	$	72,216	$	17,699	$	136,741	$	12,702	$	4,204	$	269,749

Allowance for loan losses:	Commercial, financial and agricultural		Real estate - commercial		Real estate - construction		Real estate - mortgage		Obligations of states and political subdivisions		Personal		Total
Beginning Balance, January 1, 2012	$	195	$	455	$	442	$	1,771	$	-	$	68	$	2,931
Charge-offs		(25)		-		(193)		(852)		-		(1)		(1,071)
Recoveries		8		-		-		-		-		2		10
Provisions		1		8		(47)		1,468		-		(19)		1,411
Ending balance	$	179	$	463	$	202	$	2,387	$	-	$	50	$	3,281
As of December 31, 2012	Commercial, financial and agricultural		Real estate - commercial		Real estate - construction		Real estate - mortgage		Obligations of states and political subdivisions		Personal		Total
Allowance for loan losses:
Ending balance	$	179	$	463	$	202	$	2,387	$	-	$	50	$	3,281
evaluated for impairment
individually	$	-	$	-	$	91	$	1,036	$	-	$	-	$	1,127
collectively	$	179	$	463	$	111	$	1,351	$	-	$	50	$	2,154
Loans:
Ending balance	$	19,296	$	69,187	$	18,092	$	153,122	$	12,769	$	5,034	$	277,500
evaluated for impairment
individually	$	160	$	2,672	$	2,202	$	2,628	$	-	$	-	$	7,662
collectively	$	19,136	$	66,515	$	15,890	$	150,494	$	12,769	$	5,034	$	269,838

Allowance for loan losses:		Commercial, financial and agricultural		Real estate - commercial		Real estate - construction		Real estate - mortgage		Obligations of states and political subdivisions		Personal		Total
Beginning Balance, January 1, 2011	$	163	$	442	$	336	$	1,810	$	-	$	73	$	2,824
Charge-offs		(18)		(37)		-		(205)		-		(22)		(282)
Recoveries		2		-		-		10		-		13		25
Provisions		48		50		106		156		-		4		364
Ending balance	$	195	$	455	$	442	$	1,771	$	-	$	68	$	2,931
As of December 31, 2011		Commercial, financial and agricultural		Real estate - commercial		Real estate - construction		Real estate - mortgage		Obligations of states and political subdivisions		Personal		Total
Allowance for loan losses:
Ending balance	$	195	$	455	$	442	$	1,771	$	-	$	68	$	2,931
evaluated for impairment
individually	$	-	$	-	$	343	$	432	$	-	$	-	$	775
collectively	$	195	$	455	$	99	$	1,339	$	-	$	68	$	2,156
Loans, net of unearned interest:
Ending balance	$	19,417	$	60,774	$	17,508	$	176,544	$	8,780	$	6,658	$	289,681
evaluated for impairment
individually	$	238	$	2,312	$	1,870	$	5,119	$	-	$	-	$	9,539
collectively	$	19,179	$	58,462	$	15,638	$	171,425	$	8,780	$	6,658	$	280,142

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Bank Owned Life Insurance and Annuities

12 Months Ended

Dec. 31, 2013

Bank Owned Life Insurance and Annuities [Abstract]

BANK OWNED LIFE INSURANCE AND ANNUITIES

8.  Bank Owned Life Insurance and Annuities

The Company holds bank-owned life insurance (BOLI), deferred annuities and payout annuities with a combined cash value of $14,848,000 and $14,402,000 at December 31, 2013 and 2012, respectively. As annuitants retire, the deferred annuities may be converted to payout annuities to create payment streams that match certain post-retirement liabilities. The cash surrender value on the BOLI and annuities increased by $446,000, $333,000 and $501,000 in 2013, 2012 and 2011, respectively, from earnings recorded as non-interest income and from premium payments, net of cash payments received. The contracts are owned by the Bank in various insurance companies. The crediting rate on the policies varies annually based on the insurance companies’ investment portfolio returns in their general fund and market conditions. Changes in cash value of BOLI and annuities in 2013 and 2012 are shown below (in thousands):

		Life Insurance		Deferred Annuities		Payout Annuities		Total
Balance as of December 31, 2011	$	13,718	$	327	$	24	$	14,069
Earnings		409		13		1		423
Premiums on existing policies		56		14		-		70
Annuity payments received		-		-		(13)		(13)
Net proceeds from life insurance claim		(147)		-		-		(147)
Balance as of December 31, 2012		14,036		354		12		14,402
Earnings		372		13		1		386
Premiums on existing policies		54		14		-		68
Annuity payments received		-		-		(8)		(8)
Balance as of December 31, 2013	$	14,462	$	381	$	5	$	14,848

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Loans and Related Allowance for Loan Losses (Impaired Loans by Loan Portfolio Class) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Financing Receivable, Impaired [Line Items]
Recorded Investment, Total	$ 8,049	$ 7,662
Unpaid Principal Balance, Total	9,934	7,891
Related Allowance, Total	164	1,127
Commercial, Financial and Agricultural [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Recorded Investment	94	160
Impaired Loans with No Allowance: Unpaid Principal Balance	94	160
Recorded Investment, Total	94	160
Unpaid Principal Balance, Total	94	160
Real Estate - Commercial [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Recorded Investment	2,017	2,672
Impaired Loans with No Allowance: Unpaid Principal Balance	2,142	2,672
Impaired Loans with Allowance: Recorded Investment	238
Impaired Loans with Allowance: Unpaid Principal Balance	238
Impaired Loans with Allowance: Related Allowance	26
Recorded Investment, Total	2,255	2,672
Unpaid Principal Balance, Total	2,380	2,672
Related Allowance, Total	26
Real Estate - Construction [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Recorded Investment	504	2,004
Impaired Loans with No Allowance: Unpaid Principal Balance	813	2,197
Impaired Loans with Allowance: Recorded Investment	1,478	198
Impaired Loans with Allowance: Unpaid Principal Balance	1,502	198
Impaired Loans with Allowance: Related Allowance	93	91
Recorded Investment, Total	1,982	2,202
Unpaid Principal Balance, Total	2,315	2,395
Related Allowance, Total	93	91
Real Estate - Mortgage [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Recorded Investment	3,353	487
Impaired Loans with No Allowance: Unpaid Principal Balance	4,751	523
Impaired Loans with Allowance: Recorded Investment	365	2,141
Impaired Loans with Allowance: Unpaid Principal Balance	394	2,141
Impaired Loans with Allowance: Related Allowance	45	1,036
Recorded Investment, Total	3,718	2,628
Unpaid Principal Balance, Total	5,145	2,664
Related Allowance, Total	$ 45	$ 1,036

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Income Taxes (Effective Income Tax Rate Reconciliation) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Taxes [Abstract]
Income before income taxes	$ 1,013	$ 1,079	$ 1,071	$ 1,343	$ 1,125	$ 1,486	$ 1,587	$ 428	$ 4,506	$ 4,626	$ 6,222
Effective tax rate									34.00%	34.00%	34.00%
Federal tax at statutory rate									1,532	1,573	2,115
Tax-exempt interest									(354)	(431)	(439)
Net earnings on BOLI									(108)	(148)	(133)
Dividend from unconsolidated subsidiary									(13)	(12)	(8)
Stock-based compensation									10	2	7
Federal tax credits									(556)
Other permanent differences									(6)	(6)
Total tax expense	$ 46	$ 60	$ 62	$ 337	$ 242	$ 354	$ 372	$ 10	$ 505	$ 978	$ 1,542
Effective tax rate									11.20%	21.10%	24.80%

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Loans and Related Allowance for Loan Losses (Nonaccrual Loans by Classes of the Loan Portfolio) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	$ 5,952	$ 8,846
Commercial, Financial and Agricultural [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	10	20
Real Estate - Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	1,331	1,835
Real Estate - Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	1,982	2,376
Real Estate - Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	$ 2,629	$ 4,615

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Employee Benefit Plans (Schedule of Expected Benefit Payments) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013
Employee Benefit Plans [Abstract]
2014	$ 450
2015	444
2016	447
2017	463
2018	510
2019-2023	$ 2,633

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Loans and Related Allowance for Loan Losses (Classes of the Loan Portfolio Summarized by the Aggregate Risk Rating) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Loans: Ending Balance	$ 277,798	$ 277,500	$ 289,681
Commercial, Financial and Agricultural [Member]
Loans: Ending Balance	26,281	19,296	19,417
Real Estate - Commercial [Member]
Loans: Ending Balance	74,471	69,187	60,774
Real Estate - Construction [Member]
Loans: Ending Balance	19,681	18,092	17,508
Real Estate - Mortgage [Member]
Loans: Ending Balance	140,459	153,122	176,544
Obligations of State and Political Subdivisions [Member]
Loans: Ending Balance	12,702	12,769	8,780
Personal [Member]
Loans: Ending Balance	4,204	5,034	6,658
Pass [Member]
Loans: Ending Balance	240,642	248,741
Pass [Member] | Commercial, Financial and Agricultural [Member]
Loans: Ending Balance	20,388	17,570
Pass [Member] | Real Estate - Commercial [Member]
Loans: Ending Balance	56,867	55,198
Pass [Member] | Real Estate - Construction [Member]
Loans: Ending Balance	15,803	14,001
Pass [Member] | Real Estate - Mortgage [Member]
Loans: Ending Balance	130,706	144,179
Pass [Member] | Obligations of State and Political Subdivisions [Member]
Loans: Ending Balance	12,674	12,769
Pass [Member] | Personal [Member]
Loans: Ending Balance	4,204	5,024
Special Mention [Member]
Loans: Ending Balance	21,679	14,739
Special Mention [Member] | Commercial, Financial and Agricultural [Member]
Loans: Ending Balance	5,658	904
Special Mention [Member] | Real Estate - Commercial [Member]
Loans: Ending Balance	11,706	8,939
Special Mention [Member] | Real Estate - Construction [Member]
Loans: Ending Balance	292	1,022
Special Mention [Member] | Real Estate - Mortgage [Member]
Loans: Ending Balance	3,995	3,864
Special Mention [Member] | Obligations of State and Political Subdivisions [Member]
Loans: Ending Balance	28
Special Mention [Member] | Personal [Member]
Loans: Ending Balance		10
Substandard [Member]
Loans: Ending Balance	11,881	9,049
Substandard [Member] | Commercial, Financial and Agricultural [Member]
Loans: Ending Balance	235	822
Substandard [Member] | Real Estate - Commercial [Member]
Loans: Ending Balance	5,620	5,010
Substandard [Member] | Real Estate - Construction [Member]
Loans: Ending Balance	1,754	867
Substandard [Member] | Real Estate - Mortgage [Member]
Loans: Ending Balance	4,272	2,350
Doubtful [Member]
Loans: Ending Balance	3,596	4,971
Doubtful [Member] | Real Estate - Commercial [Member]
Loans: Ending Balance	278	40
Doubtful [Member] | Real Estate - Construction [Member]
Loans: Ending Balance	1,832	2,202
Doubtful [Member] | Real Estate - Mortgage [Member]
Loans: Ending Balance	$ 1,486	$ 2,729

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Fair Value Measurements (Quantitative Information for Assets Measured at Fair Value) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Impaired loans	$ 8,049		$ 7,662
Other real estate owned	281		428
Measured at Fair Value on a Non-Recurring Basis [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Impaired loans	3,300		2,056
Other real estate owned	50		50
Mortgage servicing rights	167		98
Measured at Fair Value on a Non-Recurring Basis [Member] | Impaired Loans [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Impaired loans	3,300		2,056
Valuation Technique	Appraisal of collateral (1)	[1]	Appraisal of collateral (1)	[1]
Unobservable Inputs	Appraisal and liquidation adjustments (2)	[2]	Appraisal and liquidation adjustments (2)	[2]
Weighted Average Volatility Rate	(9.00%)		(8.10%)
Measured at Fair Value on a Non-Recurring Basis [Member] | Other Real Estate Owned [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other real estate owned	50		50
Valuation Technique	Appraisal of collateral (1)	[1]	Appraisal of collateral (1)	[1]
Unobservable Inputs	Appraisal and liquidation adjustments (2)	[2]	Appraisal and liquidation adjustments (2)
Range	0.00%		0.00%
Weighted Average Volatility Rate	0.00%		0.00%
Measured at Fair Value on a Non-Recurring Basis [Member] | Mortgage Servicing Rights [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage servicing rights	$ 167		$ 98
Valuation Technique	Multiple of annual servicing fee		Multiple of annual servicing fee
Unobservable Inputs	Estimated pre-payment speed, based on rate and term		Estimated pre-payment speed, based on rate and term	[2]
Weighted Average Volatility Rate	326.00%		326.00%
Measured at Fair Value on a Non-Recurring Basis [Member] | Minimum [Member] | Impaired Loans [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Range	(7.00%)		(7.00%)
Measured at Fair Value on a Non-Recurring Basis [Member] | Minimum [Member] | Mortgage Servicing Rights [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Range	300.00%		300.00%
Measured at Fair Value on a Non-Recurring Basis [Member] | Maximum [Member] | Impaired Loans [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Range	(10.00%)		(10.00%)
Measured at Fair Value on a Non-Recurring Basis [Member] | Maximum [Member] | Mortgage Servicing Rights [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Range	400.00%		400.00%

[1] Fair value is generally determined through independent appraisals of the underlying collateral that generally include various level 3 inputs which are not identifiable.

[2] Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

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Quarterly Results of Operations (Unaudited)

12 Months Ended

Dec. 31, 2013

Quarterly Results of Operations (Unaudited) [Abstract]

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

26.  Quarterly Results Of Operations (Unaudited)

The unaudited quarterly results of operations for the years ended December 31, 2013 and 2012 follow (in thousands, except per-share data):

		2013 Quarter ended
		March 31		June 30		September 30		December 31
Total interest income	$	4,144		4,173		4,224		4,193
Total interest expense		763		741		719		677
Net interest income		3,381		3,432		3,505		3,516
Provision for loan losses		80		86		100		149
Gains from the sale of loans		97		85		84		72
Other income		980		970		939		1,006
Other expense		3,035		3,330		3,349		3,432
Income before income taxes		1,343		1,071		1,079		1,013
Income tax expense		337		62		60		46
Net income	$	1,006	$	1,009	$	1,019	$	967
Per-share data:
Basic earnings		$.24		$.24		$.24		$.23
Diluted earnings		.24		.24		.24		.23
Cash dividends		.22		.22		.22		.22
		2012 Quarter ended
		March 31		June 30		September 30		December 31
Total interest income	$	4,711	$	4,605	$	4,464	$	4,390
Total interest expense		972		924		898		854
Net interest income		3,739		3,681		3,566		3,536
Provision for loan losses		1,108		69		60		174
Gains from the sale of loans		65		149		208		147
Other income		977		1,046		1,045		955
Other expense		3,245		3,220		3,273		3,339
Income before income taxes		428		1,587		1,486		1,125
Income tax expense		10		372		354		242
Net income	$	418	$	1,215	$	1,132	$	883
Per-share data:
Basic earnings		$.10		$.29		$.27		$.20
Diluted earnings		.10		.29		.27		.20
Cash dividends		.22		.22		.22		.22

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Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2013

Employee Benefit Plans [Abstract]

Schedule of Stock Option Activity

A summary of the status of the Plans as of December 31, 2013,  2012 and 2011, and changes during the years ending on those dates is presented below:

	2013			2012			2011
	Shares	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
Outstanding at beginning of year	97,792	$	19.04	90,474	$	18.85	92,953	$	18.83
Granted	21,800		17.65	19,150		18.00	16,050		17.75
Exercised	-		-	(7,207)		14.47	(1,890)		14.37
Forfeited	(35,662)		19.45	(4,625)		17.89	(16,639)		18.20
Outstanding at end of year	83,930	$	18.50	97,792	$	19.04	90,474	$	18.85
Options exercisable at year-end	43,079			68,361			67,685
Weighted-average fair value of
of options granted
during the year		$	1.75		$	1.98		$	1.91
Intrinsic value of options
exercised during the year		$	-		$	24,444		$	7,070
Intrinsic value of options
outstanding and exercisable at
December 31, 2013		$	5,309

Schedule of Stock Option Information by Grant Date

The following table summarizes characteristics of stock options as of December 31, 2013:

		Outstanding		Exercisable
Grant Date	Exercise Price	Shares	Contractual Average Life (Years)	Shares
11/15/2004	20.25	1,248	0.88	1,248
10/18/2005	24.00	2,662	1.46	2,662
10/17/2006	21.00	3,195	2.03	3,195
10/16/2007	20.05	5,623	3.20	5,623
10/21/2008	21.10	7,289	4.19	7,289
10/20/2009	17.22	11,213	5.15	10,211
9/20/2011	17.75	13,850	7.72	7,900
3/20/2012	18.00	17,050	8.22	4,951
2/19/2013	17.65	21,800	9.14	-
		83,930		43,079

Schedule of Allocation of Plan Assets

The following table sets forth by level, within the fair value hierarchy, debt and equity instruments included in the defined benefit retirement’s plan assets at fair value as of December 31, 2013 and December 31, 2012 (in thousands). Assets included in the plan that are not valued in the hierarchy table consist of cash and cash equivalents, totaling $703,000 and $738,000, at December 31, 2013 and 2012, respectively.

			(Level 1)		(Level 2)		(Level 3)
			Quoted Prices in		Significant Other		Significant Other
	December 31,		Active Markets for		Observable		Unobservable
	2013		Identical Assets		Inputs		Inputs
Measured at fair value on a recurring basis:
U.S. Government and agency securities	$	739	$	-	$	739	$	-
Corporate bonds and notes		2,987		-		2,987		-
Mutual funds
Value funds		2,120		2,120		-		-
Blend funds		1,522		1,522		-		-
Growth funds		1,867		1,867		-		-
Common stocks		4		4		-		-
Money market funds		172		172		-		-
	$	9,411	$	5,685	$	3,726	$	-
			(Level 1)		(Level 2)		(Level 3)
			Quoted Prices in		Significant Other		Significant Other
	December 31,		Active Markets for		Observable		Unobservable
	2012		Identical Assets		Inputs		Inputs
Measured at fair value on a recurring basis:
U.S. Government and agency securities	$	199	$	-	$	199	$	-
Corporate bonds and notes		3,017		-		3,017		-
Mutual funds
Value funds		1,379		1,379		-		-
Blend funds		1,220		1,220		-		-
Growth funds		1,932		1,932		-		-
Common stocks		3		3		-		-
Money market funds		590		590		-		-
	$	8,340	$	5,124	$	3,216	$	-

Schedule of Net Funded Status

The measurement date for the defined benefit plan is December 31. Information pertaining to the activity in the defined benefit plan is as follows (in thousands):

	Years ended December 31,
		2013		2012
Change in projected benefit obligation (PBO)
PBO at beginning of year	$	10,022	$	10,438
Service cost		-		222
Interest cost		395		451
Change in assumptions		(962)		681
Curtailment adjustment		-		(1,393)
Actuarial loss		91		49
Benefits paid		(438)		(426)
PBO at end of year	$	9,108	$	10,022
Change in plan assets
Fair value of plan assets at beginning of year	$	9,078	$	8,625
Actual return on plan assets, net of expenses		1,474		879
Benefits paid		(438)		(426)
Fair value of plan assets at end of year	$	10,114	$	9,078
Funded status, included in other assets (liabilities)	$	1,006	$	(944)
Amounts recognized in accumulated comprehensive loss
before income taxes consist of:
Unrecognized actual loss	$	(1,377)	$	(3,362)
Unrecognized net transition asset		1		1
	$	(1,376)	$	(3,361)
Accumulated benefit obligation	$	9,108	$	10,022

Components of Net Periodic Pension Cost

Pension expense included the following components for the years ended December 31 (in thousands):

		2013		2012		2011
Service cost during the year	$	-	$	222	$	192
Interest cost on projected benefit obligation		395		451		479
Expected return on plan assets		(561)		(591)		(631)
Net accretion (amortization)		(1)		56		(2)
Recognized net actuarial loss		203		296		152
Net periodic benefit cost		36		434		190

Net loss (gain)		(1,782)		(952)		1,990
Amortization of net loss		(203)		(296)		(152)
Net  amortization (accretion)		1		(56)		2
Total recognized in other comprehensive loss (income)	$	(1,984)	$	(1,304)	$	1,840
Total recognized in net periodic benefit cost and other
comprehensive loss (income)	$	(1,948)	$	(870)	$	2,030

Schedule of Assumptions Used

Assumptions used to determine benefit obligations were:

	2013	2012	2011
Discount rate	4.75%	4.00%	4.40%
Rate of compensation increase	N/A	N/A	3.00

Assumptions used to determine the net periodic benefit cost were:

	2013	2012	2011
Discount rate	4.00%	4.40%	5.50%
Expected long-term return on plan assets	6.35	7.00	7.00
Rate of compensation increase	N/A	3.00	3.00

Schedule of Expected Benefit Payments

Future expected benefit payments (in thousands):

		2014		2015		2016		2017		2018		2019-2023
Estimated future benefit payments	$	450	$	444	$	447	$	463	$	510	$	2,633

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Borrowings

12 Months Ended

Dec. 31, 2013

Borrowings [Abstract]

BORROWINGS

13. Borrowings

Borrowings consist of the following (dollars in thousands):

		December 31, 2013			December 31, 2012			December 31, 2011			For the year 2013
		Outstanding Balance	Rate		Outstanding Balance	Rate		Outstanding Balance	Rate		Average Balance	Weighted Average Rate
Securities sold under agreements to repurchase	$	5,397	0.10%	$	3,836	0.10%	$	3,500	0.10%	$	4,332	0.10%
Short-term borrowings - Federal Home Loan Bank overnight advances		8,400	0.25%		1,600	0.25%		-			3,200	0.25%
	$	13,797	0.19%	$	5,436	0.14%	$	3,500	0.10%	$	7,532	0.16%

The maximum balance of short-term borrowings at any month-end during 2013 was $13,863,000.

The Bank has repurchase agreements with several of its depositors, under which customers’ funds are invested daily into an interest bearing account. These funds are carried by the Company as short-term debt. It is the Company’s policy to have repurchase agreements collateralized 100% by U.S. Government securities. As of December 31, 2013, the securities that serve as collateral for securities sold under agreements to repurchase had a fair value of $8,919,000. The interest rate paid on these funds is variable and subject to change daily.

The Bank’s maximum borrowing capacity with the Federal Home Loan Bank of Pittsburgh (“FHLB”) is $135,454,000, with a  balance of $8,400,000 outstanding as of December 31, 2013. In order to borrow additional amounts in excess of $2,021,000, the FHLB would require the Bank to purchase additional FHLB Stock. The FHLB is a source of both short-term and long-term funding. The Bank must maintain sufficient qualifying collateral to secure all outstanding advances.

The Bank has entered into an agreement under which it can borrow up to $20,000,000 from the FHLB in their Open RepoPlus product. There were no borrowings under this agreement during the periods included in these consolidated financial statements. There is no expiration date on the current agreement.

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Accumulated Other Comprehensive Loss

12 Months Ended

Dec. 31, 2013

Accumulated Other Comprehensive Income [Abstract]

ACCUMULATED OTHER COMPREHENSIVE LOSS

18.  Accumulated other Comprehensive loss

Components of accumulated other comprehensive loss, net of tax as of December 31 of each of the last three years consist of the following (in thousands):

		12/31/2013		12/31/2012		12/31/2011
Unrealized (losses)  gains on available for sale securities	$	(751)	$	800	$	823
Unrecognized expense for defined benefit pension		(908)		(2,219)		(3,079)
Accumulated other comprehensive loss	$	(1,659)	$	(1,419)	$	(2,256)

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Employee Benefit Plans (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2007	Dec. 31, 2010
Defined Benefit Plan Disclosure [Line Items]
Weighted average exercise price	$ 18.50	$ 19.04	$ 18.85		$ 18.83
Compensation costs not yet recognized	$ 57,000
Cash received from option exercises	0	104,000	27,000
Plan assets not included in hierarchy	9,411,000	8,340,000
Employer's safe harbor contribution rate	3.00%
Employer's safe harbor contribution payable	172,000
Prior year contribution payable credited in current year		161,000
Defined contribution plan, cost recognized	175,000	157,000	151,000
Maximum number of share per year in addition to prior unissued shares	the annual issuance of shares may not exceed 5,000 shares plus any unissued shares from prior offerings
Shares issued during period under employee stock purchase plans	2,823	2,729	2,413
Present value of future plan liability	533,000	627,000
Supplemental retirement plans, cost recognized during period	47,000	56,000	73,000
Deferred compensation liability	1,591,000	1,661,000
Deferred compensation, compensation expense	47,000	66,000	83,000
Salary continuation liability	1,154,000	1,151,000
Salary continuation period expense	97,000	132,000	136,000
Percentage of vested benefit				100.00%
Employer contribution	123,000
Equity securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Target allocation	50%
Actual allocation	43.00%
Fixed Income Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Target allocation	50%
Actual allocation	55.00%
Employee Stock Option [Member]
Defined Benefit Plan Disclosure [Line Items]
Award expiration period	10 years
Shares authorized under share-based payment awards	300,000
Shares granted, exercisable period	1 year
Shares available for grant	247,300
Exercise price, lower range limit	$ 17.22
Exercise price, upper range limit	$ 24.00
Weighted average exercise price	$ 18.50
Weighted average remaining contractual life	6 years 8 months 12 days
Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Plan assets not included in hierarchy	$ 703,000	$ 738,000	$ 738,000
Actual allocation	2.00%
Employee Stock Purchase Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Shares authorized under share-based payment awards	250,000
Shares available for grant	187,557
Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Option price as a percentage of fair value		95.00%
Minimum [Member] | Employee Stock Option [Member]
Defined Benefit Plan Disclosure [Line Items]
Award vesting period	3 years
Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Compensation cost not yet recognized, period for recognition	5 years
Option price as a percentage of fair value		100.00%
Maximum [Member] | Employee Stock Option [Member]
Defined Benefit Plan Disclosure [Line Items]
Award vesting period	5 years
Award expiration date	Feb. 20, 2023

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Accumulated Other Comprehensive Loss (Tables)

12 Months Ended

Dec. 31, 2013

Accumulated Other Comprehensive Income [Abstract]

Components of Accumulated Other Comprehensive Loss

Components of accumulated other comprehensive loss, net of tax as of December 31 of each of the last three years consist of the following (in thousands):

		12/31/2013		12/31/2012		12/31/2011
Unrealized (losses)  gains on available for sale securities	$	(751)	$	800	$	823
Unrecognized expense for defined benefit pension		(908)		(2,219)		(3,079)
Accumulated other comprehensive loss	$	(1,659)	$	(1,419)	$	(2,256)

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Related-Party Transactions (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2013
Related-Party Transactions [Abstract]
Related Party Transaction, Arms Length, Basis of Transactions	These loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and, in the opinion of management, do not involve more than normal risk of collection.
Due from Related Parties	$ 2,370,000	$ 1,892,000
Due from Related Parties, New Loans in Period		281,000
Due from Related Parties, Repayments in Period	$ 759,000

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Bank Owned Life Insurance and Annuities (Tables)

12 Months Ended

Dec. 31, 2013

Bank Owned Life Insurance and Annuities [Abstract]

Summary of Changes in Cash Value of BOLI and Annuities

Changes in cash value of BOLI and annuities in 2013 and 2012 are shown below (in thousands):

		Life Insurance		Deferred Annuities		Payout Annuities		Total
Balance as of December 31, 2011	$	13,718	$	327	$	24	$	14,069
Earnings		409		13		1		423
Premiums on existing policies		56		14		-		70
Annuity payments received		-		-		(13)		(13)
Net proceeds from life insurance claim		(147)		-		-		(147)
Balance as of December 31, 2012		14,036		354		12		14,402
Earnings		372		13		1		386
Premiums on existing policies		54		14		-		68
Annuity payments received		-		-		(8)		(8)
Balance as of December 31, 2013	$	14,462	$	381	$	5	$	14,848

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Subsequent Events (Narrative) (Details) (Subsequent Event [Member], USD $)	1 Months Ended	12 Months Ended
	Jan. 31, 2014	Dec. 31, 2013
Subsequent Event [Member]
Subsequent Event [Line Items]
Dividends payable per share	$ 0.22
Dividends payable, date declared		Jan. 15, 2014
Dividends payable, date of record	Feb. 15, 2014
Dividends payable, date to be paid	Mar. 03, 2014

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Statement of Comprehensive Income [Abstract]
Net income: Before Tax Amount	$ 4,506		$ 4,626		$ 6,222
Net Income: Tax Effect	(505)		(978)		(1,542)
Net income: Net-of-Tax Amount	4,001		3,648		4,680
Other comprehensive income (loss):
Unrealized holding losses arising during the period: Before Tax Amount	(2,325)		(33)		630
Unrealized holding losses arising during the period: Tax Effect	791		11
Unrealized holding losses arising during the period: Net-of-Tax Amount	(1,534)		(22)		416
Unrealized holding losses from unconsolidated subsidiary: Before Tax Amount	(18)				12
Unrealized gains (losses) from unconsolidated subsidiary: Tax Expense					(214)
Unrealized holding losses from unconsolidated subsidiary: Net-of-Tax Amount	(18)				12
Less reclassification adjustment for gains included in net income: Before Tax Amount	2	[1],[2]	(2)	[1],[2]	(6)	[1],[2]
Less reclassification adjustment for: gains included in net income: Tax Effect	(1)	[1],[2]	1	[1],[2]	2	[1],[2]
Less reclassification adjustment for: gains included in net income: Net-of-Tax Amount	1	[1],[2]	(1)	[1],[2]	(4)	[1],[2]
Unrecognized pension net gain (loss): Before Tax Amount	821	[2],[3]	1,633	[2],[3]	(743)	[2],[3]
Unrecognized pension net gain (loss): Tax Effect	(279)	[2],[3]	(555)	[2],[3]	252	[2],[3]
Unrecognized pension net gain (loss): Net-of-Tax Amount	542	[2],[3]	1,078	[2],[3]	(491)	[2],[3]
Unrecognized pension cost due to change in assumptions: Before Tax Amount	962	[2],[3]	(681)	[2],[3]	(1,247)	[2],[3]
Unrecognized pension cost due to change in assumptions: Tax Effect	(327)	[2],[3]	232	[2],[3]	424	[2],[3]
Unrecognized pension cost due to change in assumptions: Net-of-Tax Amount	635	[2],[3]	(449)	[2],[3]	(823)	[2],[3]
Amortization of pension prior service cost: Before Tax Amount	(1)	[2],[3]	56	[2],[3]	(2)	[2],[3]
Amortization of pension prior service cost: Tax Expense or Benefit			(19)	[2],[3]	1	[2],[3]
Amortization of pension prior service cost: Net-of-Tax Amount	(1)	[2],[3]	37	[2],[3]	(1)	[2],[3]
Amortization of pension net actuarial cost: Before Tax Amount	203	[2],[3]	296	[2],[3]	152	[2],[3]
Amortization of net pension actuarial loss: Tax Expense	(68)	[2],[3]	(102)	[2],[3]	(52)	[2],[3]
Amortization of net pension actuarial cost: Net-of-Tax Amount	135	[2],[3]	194	[2],[3]	100	[2],[3]
Other comprehensive income: Before Tax Amount	(356)		1,269		(1,204)
Other comprehensive income: Tax Effect	116		(432)		413
Other comprehensive income: Net-of-Tax Amount	(240)		837		(791)
Total comprehensive income: Before Tax Amount	4,150		5,895		5,018
Total comprehensive income: Tax Expense	(389)		(1,410)		(1,129)
Total comprehensive income: Net-of-Tax Amount	$ 3,761		$ 4,485		$ 3,889

[1] Amounts are included in (loss) gain on calls of securities on the Consolidated Statements of Income as a separate element within total non-interest income.

[2] Income tax amounts are included in the provision for income taxes on the Consolidated Statements of Income.

[3] Amounts are included in the computation of net periodic benefit cost and are included in employee benefits expense on the Consolidated Statements of Income as a separate element within total non-interest expense.

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Stockholders' Equity And Regulatory Matters (Schedule of Compliance with Regulatory Capital Requirements) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Capital	$ 51,888	$ 52,803
Capital Required for Capital Adequacy	23,105	23,103
Capital to Risk Weighted Assets	17.97%	18.28%
Capital Required for Capital Adequacy to Risk Weighted Assets	8.00%	8.00%
Tier One Risk Based Capital	49,461	49,506
Tier One Risk Based Capital Required for Capital Adequacy	11,553	11,552
Tier One Risk Based Capital to Risk Weighted Assets	17.13%	17.14%
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	4.00%	4.00%
Tier One Leverage Capital	49,461	49,506
Tier One Leverage Capital Required for Capital Adequacy	17,915	18,074
Tier One Leverage Capital to Average Assets	11.04%	10.96%
Tier One Leverage Capital Required for Capital Adequacy to Average Assets	4.00%	4.00%
The Juniata Valley Bank [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Capital	46,530	47,812
Capital Required for Capital Adequacy	22,773	22,780
Capital Required to be Well Capitalized	28,467	28,475
Capital to Risk Weighted Assets	16.35%	16.79%
Capital Required for Capital Adequacy to Risk Weighted Assets	8.00%	8.00%
Capital Required to be Well Capitalized to Risk Weighted Assets	10.00%	10.00%
Tier One Risk Based Capital	44,185	44,519
Tier One Risk Based Capital Required for Capital Adequacy	11,387	11,390
Tier One Risk Based Capital Required to be Well Capitalized	17,080	17,085
Tier One Risk Based Capital to Risk Weighted Assets	15.52%	15.63%
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	4.00%	4.00%
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	6.00%	6.00%
Tier One Leverage Capital	44,185	44,519
Tier One Leverage Capital Required for Capital Adequacy	17,723	17,822
Tier One Leverage Capital Required to be Well Capitalized	$ 22,154	$ 22,277
Tier One Leverage Capital to Average Assets	9.97%	9.99%
Tier One Leverage Capital Required for Capital Adequacy to Average Assets	4.00%	4.00%
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	5.00%	5.00%

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2013

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.  Summary of Significant Accounting Policies

The accounting policies of Juniata Valley Financial Corp. and its wholly owned subsidiary conform to accounting principles generally accepted in the United States of America (“GAAP”) and to general financial services industry practices. A summary of the more significant accounting policies applied in the preparation of the accompanying consolidated financial statements follows.

Principles of consolidation

The consolidated financial statements include the accounts of Juniata Valley Financial Corp. and its wholly owned subsidiary, The Juniata Valley Bank. All significant intercompany transactions and balances have been eliminated.

Use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of deferred tax assets and the determination of other-than-temporary impairment on securities.

Basis of presentation

Certain amounts previously reported have been reclassified to conform to the consolidated financial statement presentation for 2013. The reclassification had no effect on net income.

Significant group concentrations of credit risk

Most of the Company’s activities are with customers located within the Juniata Valley region. Note 5 discusses the types of securities in which the Company invests. Note 6 discusses the types of lending in which the Company engages.

As of December 31, 2013, there were no concentrations of credit to any particular industry equaling more than 25% of total capital. The Bank’s business activities are geographically concentrated in the counties of Juniata, Mifflin, Perry, Huntingdon, Centre, Franklin and Snyder, Pennsylvania. The Bank has a diversified loan portfolio; however, a substantial portion of its debtors’ ability to honor their obligations is dependent upon the economy in central Pennsylvania.

Cash and cash equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, interest bearing demand deposits with banks and federal funds sold. Generally, federal funds are sold for one-day periods.

Interest bearing time deposits with banks

Interest-bearing time deposits with banks consist of certificates of deposits in other banks with maturities within one year.

Securities

Securities classified as available for sale, which include marketable investment securities, are stated at fair value, with the unrealized gains and losses, net of tax, reported as a component of other comprehensive income (loss). Securities classified as available for sale are those securities that the Company intends to hold for an indefinite period of time but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including significant movement in interest rates, changes in maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations and other similar factors. Investment securities that management has the positive intent and ability to hold until maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions are classified as held to maturity and are stated at cost, adjusted for amortization of premium and accretion of discount computed by the interest method over their contractual lives. Interest and dividends on investment securities available for sale and held to maturity are recognized as income when earned. Premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains or losses on the disposition of securities available for sale are based on the net proceeds and the adjusted carrying amount of the securities sold, determined on a specific identification basis. The Company has no securities classified as held to maturity at December 31, 2013 and 2012.

Accounting Standards Codification (ASC) Topic 320, Investments – Debt and Equity Securities, clarifies the interaction of the factors that should be considered when determining whether a debt security is other-than-temporarily impaired. For debt securities, management must assess whether (a) it has the intent to sell the security and (b) it is more likely than not that it will be required to sell the security prior to its anticipated recovery. These steps are taken before an assessment is made as to whether the entity will recover the cost basis of the investment. For equity securities, consideration is given to management’s intention and ability to hold the securities until recovery of unrealized losses in assessing potential other-than-temporary impairment. More specifically, factors considered to determine other-than-temporary impairment status for individual equity holdings include the length of time the stock has remained in an unrealized loss position, the percentage of unrealized loss compared to the carrying cost of the stock, dividend reduction or suspension, market analyst reviews and expectations, and other pertinent factors that would affect expectations for recovery or further decline.

In instances when a determination is made that an other-than-temporary impairment exists and the entity does not intend to sell the debt security and it is not more likely than not that it will be required to sell the debt security prior to its anticipated recovery, the other-than-temporary impairment is separated into the amount of the total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the credit loss) and the amount of the total other-than-temporary impairment related to all other factors.  The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total other-than-temporary impairment related to all other factors is recognized in other comprehensive (loss) income.

Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each balance sheet date.

Restricted Investment in Federal Home Loan Bank Stock

The Bank owns restricted stock investments in the Federal Home Loan Bank. Federal law requires a member institution of the Federal Home Loan Bank to hold stock according to a predetermined formula. The stock is carried at cost.

Management evaluates the restricted stock for impairment on an annual basis. Management’s determination of whether these investments are impaired is based on management’s assessment of the ultimate recoverability of the cost of these investments rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of the cost of these investments is influenced by criteria such as (1) the significance of the decline in net assets of the FHLB as compared to the capital stock amount for the FHLB and the length of time this situation has persisted, (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the FHLB.

Management believes no impairment charge was necessary related to the FHLB restricted stock during 2013, 2012 or 2011.

Loans

Loans that the Company has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the outstanding unpaid principal balances, net of any deferred fees or costs and the allowance for loan losses. Interest income on all loans, other than nonaccrual loans, is accrued over the term of the loans based on the amount of principal outstanding. Unearned income is amortized to income over the life of the loans, using the interest method.

The loan portfolio is segmented into commercial and consumer loans. Commercial loans are comprised of the following classes of loans: (1) commercial, financial and agricultural, (2) commercial real estate, (3) real estate construction, a portion of (4) mortgage loans and (5) obligations of states and political subdivisions. Consumer loans are comprised of a portion of (4) mortgage loans and (6) personal loans. 

Loans on which the accrual of interest has been discontinued are designated as non-accrual loans.  Accrual of interest on loans is generally discontinued when the contractual payment of principal or interest has become 90 days past due or reasonable doubt exists as to the full, timely collection of principal or interest. However, it is the Company’s policy to continue to accrue interest on loans over 90 days past due as long as (1) they are guaranteed or well secured and (2) there is an effective means of collection in process. When a loan is placed on non-accrual status, all unpaid interest credited to income in the current year is reversed against current period income and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest received on nonaccrual loans generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, accruals are resumed on loans only when the obligation is brought fully current with respect to interest and principal, has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt.

The Company originates loans in the portfolio with the intent to hold them until maturity. At the time the Company no longer intends to hold loans to maturity based on asset/liability management practices, the Company transfers loans from its portfolio to held for sale at fair value. Any write-down recorded upon transfer is charged against the allowance for loan losses. Any write-downs recorded after the initial transfers are recorded as a charge to other non-interest expense. Gains or losses recognized upon sale are included in other non-interest income.

Loan origination fees and costs

Loan origination fees and related direct origination costs for a given loan are deferred and amortized over the life of the loan on a level-yield basis as an adjustment to interest income over the contractual life of the loan. As of December 31, 2013 and 2012, the amount of net unamortized origination fees carried as an adjustment to outstanding loan balances was $123,000 and $42,000, respectively.

Allowance for credit losses

The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments. The allowance for loan losses (“allowance”) represents management’s estimate of losses inherent in the loan portfolio as of the consolidated statement of financial condition date and is recorded as a reduction to loans. The reserve for unfunded lending commitments represents management’s estimate of losses inherent in its unfunded lending commitments and is recorded in other liabilities on the consolidated statement of financial condition, when necessary. The amount of the reserve for unfunded lending commitments is not material to the consolidated financial statements. The allowance for loan losses is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance.

For financial reporting purposes, the provision for loan losses charged to current operating income is based on management's estimates, and actual losses may vary from estimates. These estimates are reviewed and adjusted at least quarterly and are reported in earnings in the periods in which they become known.

Loans included in any class are considered for charge-off when:

· 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;

· all collateral securing the loan has been liquidated and a deficiency balance remains;

· a bankruptcy notice is received for an unsecured loan;

· a confirming loss event has occurred; or

· the loan is deemed to be uncollectible for any other reason.

The allowance for loan losses is maintained at a level considered adequate to offset probable losses on the Company’s existing loans. The analysis of the allowance for loan losses relies heavily on changes in observable trends that may indicate potential credit weaknesses. Management’s periodic evaluation of the adequacy of the allowance is based on the Bank’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and may require the Company to recognize additions to the allowance for loan losses based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Based on management’s comprehensive analysis of the loan portfolio, management believes the level of the allowance for loan losses as of December 31, 2013 was adequate.

There are two components of the allowance: a specific component for loans that are deemed to be impaired; and a general component for contingencies.

A loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loans and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis by the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. 

The estimated fair values of substantially all of the Company’s impaired loans are measured based on the estimated fair value of the loan’s collateral. For commercial loans secured with real estate, estimated fair values are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the current appraisal and the condition of the property. Appraised values may be discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include the estimated costs to sell the property. For commercial loans secured by non-real estate collateral, estimated fair values are determined based on the borrower’s financial statements, inventory reports, aging accounts receivable, equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets. For such loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The Company generally does not separately identify individual consumer segment loans for impairment disclosures, unless such loans are subject to a restructuring agreement.

Loans whose terms are modified are classified as troubled debt restructurings if the Company grants borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a troubled debt restructuring generally involve a below-market interest rate based on the loan’s risk characteristics or an extension of a loan’s stated maturity date. Nonaccrual troubled debt restructurings are restored to accrual status if principal and interest payments, under the modified terms, are current for a sustained period of time after modification. Loans classified as troubled debt restructurings are designated as impaired.

The component of the allowance for contingencies relates to other loans that have been segmented into risk rated categories. The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated quarterly or when credit deficiencies arise, such as delinquent loan payments. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans classified as special mention have potential weaknesses that deserve management’s close attention. If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects. Loans classified as substandard have one or more well-defined weaknesses that jeopardize the liquidation of the debt. Substandard loans include loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as a loss are considered uncollectible and are charged to the allowance for loan losses. Loans not classified are rated pass. Specific reserves may be established for larger, individual classified loans as a result of this evaluation, as discussed above. Remaining loans are categorized into large groups of smaller balance homogeneous loans and are collectively evaluated for impairment. This computation is generally based on historical loss experience adjusted for qualitative factors. The historical loss experience is averaged over a ten-year period for each of the portfolio segments. The ten-year timeframe was selected in order to capture activity over a wide range of economic conditions and has been consistently used for the past seven years. The qualitative risk factors are reviewed for relevancy each quarter and include:

· 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;

· Nature and volume of the portfolio and terms of loans;

· Experience, ability and depth of lending and credit management and staff;

· Volume and severity of past due, classified and nonaccrual loans, as well as other loan modifications;

· Existence and effect of any concentrations of credit and changes in the level of such concentrations; and

· Effect of external factors, including competition.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation.

Commercial, Financial and Agricultural Lending

The Company originates commercial, financial and agricultural loans primarily to businesses located in its primary market area and surrounding areas.  These loans are used for various business purposes, which include short-term loans and lines of credit to finance machinery and equipment purchases, inventory and accounts receivable. Generally, the maximum term for loans extended on machinery and equipment is shorter and does not exceed the projected useful life of such machinery and equipment. Most business lines of credit are written with a five year maturity, subject to an annual review.

Commercial loans are generally secured with short-term assets; however, in many cases, additional collateral, such as real estate, is provided as additional security for the loan.  Loan-to-value maximum values have been established by the Company and are specific to the type of collateral. Collateral values may be determined using invoices, inventory reports, accounts receivable aging reports, collateral appraisals, etc.

In underwriting commercial loans, an analysis of the borrower’s character, capacity to repay the loan, the adequacy of the borrower’s capital and collateral, as well as an evaluation of conditions affecting the borrower, is performed. Analysis of the borrower’s past, present and future cash flows is also an important aspect of the Company’s analysis.

Concentration analysis assists in identifying industry specific risk inherent in commercial, financial and agricultural lending. Mitigants include the identification of secondary and tertiary sources of repayment and appropriate increases in oversight.  

Commercial, financial and agricultural loans generally present a higher level of risk than certain other types of loans, particularly during slow economic conditions.

Commercial Real Estate Lending

The Company engages in commercial real estate lending in its primary market area and surrounding areas. The Company’s commercial real estate portfolio is secured primarily by residential housing, commercial buildings, raw land and hotels. Generally, commercial real estate loans have terms that do not exceed 20 years, have loan-to-value ratios of up to 80% of the appraised value of the property and are typically secured by personal guarantees of the borrowers.

As economic conditions deteriorate, the Company reduces its exposure in real estate loans with higher risk characteristics.  In underwriting these loans, the Company performs a thorough analysis of the financial condition of the borrower, the borrower’s credit history, and the reliability and predictability of the cash flow generated by the property securing the loan. Appraisals on properties securing commercial real estate loans originated by the Company are performed by independent appraisers.

Commercial real estate loans generally present a higher level of risk than certain other types of loans, particularly during slow economic conditions.

Real Estate Construction Lending

The Company engages in real estate construction lending in its primary market area and surrounding areas. The Company’s real estate construction lending consists of commercial and residential site development loans, as well as commercial building construction and residential housing construction loans. 

The Company’s commercial real estate construction loans are generally secured with the subject property, and advances are made in conformity with a pre-determined draw schedule supported by independent inspections.  Terms of construction loans depend on the specifics of the project, such as estimated absorption rates, estimated time to complete, etc. 

In underwriting commercial real estate construction loans, the Company performs a thorough analysis of the financial condition of the borrower, the borrower’s credit history, the reliability and predictability of the cash flow generated by the project using feasibility studies, market data, etc. Appraisals on properties securing commercial real estate loans originated by the Company are performed by independent appraisers.

Real estate construction loans generally present a higher level of risk than certain other types of loans, particularly during slow economic conditions. The difficulty of estimating total construction costs adds to the risk as well.

Mortgage Lending

The Company’s real estate mortgage portfolio is comprised of consumer residential mortgages and business loans secured by one-to-four family properties. One-to-four family residential mortgage loan originations, including home equity installment and home equity lines of credit loans, are generated by the Company’s marketing efforts, its present customers, walk-in customers and referrals. These loans originate primarily within the Company’s market area or with customers primarily from the market area.

The Company offers fixed-rate and adjustable rate mortgage loans with terms up to a maximum of 25-years for both permanent structures and those under construction. The Company’s one-to-four family residential mortgage originations are secured primarily by properties located in its primary market area and surrounding areas. The majority of the Company’s residential mortgage loans originate with a loan-to-value of 80% or less. Home equity installment loans are secured by the borrower’s primary residence with a maximum loan-to-value of 80% and a maximum term of 15 years. Home equity lines of credit are secured by the borrower’s primary residence with a maximum loan-to-value of 90% and a maximum term of 20 years.

In underwriting one-to-four family residential real estate loans, the Company evaluates the borrower’s ability to make monthly payments, the borrower’s repayment history and the value of the property securing the loan. The ability to repay is determined by the borrower’s employment history, current financial conditions, and credit background. The analysis is based primarily on the customer’s ability to repay and secondarily on the collateral or security. Most properties securing real estate loans made by the Company are appraised by independent fee appraisers. The Company generally requires mortgage loan borrowers to obtain an attorney’s title opinion or title insurance, and fire and property insurance (including flood insurance, if necessary) in an amount not less than the amount of the loan. The Company does not engage in sub-prime residential mortgage originations.

Residential mortgage loans and home equity loans generally present a lower level of risk than certain other types of consumer loans because they are secured by the borrower’s primary residence. Risk is increased when the Company is in a subordinate position for the loan collateral.

Obligations of States and Political Subdivisions

The Company lends to local municipalities and other tax-exempt organizations. These loans are primarily tax-anticipation notes and, as such, carry little risk. Historically, the Company has never had a loss on any loan of this type.

Personal Lending

The Company offers a variety of secured and unsecured personal loans, including vehicle loans, mobile home loans and loans secured by savings deposits as well as other types of personal loans.

Personal loan terms vary according to the type and value of collateral and creditworthiness of the borrower. In underwriting personal loans, a thorough analysis of the borrower’s willingness and financial ability to repay the loan as agreed is performed. The ability to repay is determined by the borrower’s employment history, current financial conditions and credit background.

Personal loans may entail greater credit risk than do residential mortgage loans, particularly in the case of personal loans which are unsecured or are secured by rapidly depreciable assets, such as automobiles or recreational equipment. In such cases, any repossessed collateral for a defaulted personal loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation. In addition, personal loan collections are dependent on the borrower’s continuing financial stability and, thus are more likely to be affected by adverse personal circumstances. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans.

Other real estate owned

Assets acquired in settlement of mortgage loan indebtedness are recorded as other real estate owned (OREO) at fair value less estimated costs to sell, establishing a new cost basis. Costs to maintain the assets and subsequent gains and losses attributable to their disposal are included in other expense as realized. No depreciation or amortization expense is recognized. At December 31, 2013 and 2012, the carrying value of other real estate owned was $281,000 and $428,000, respectively.

Goodwill and intangibles

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets that also lack physical substance but can be separately distinguished from goodwill because of contractual or other legal rights or because the asset is capable of being sold or exchanged either on its own or in combination with a related contract, asset or liability. It is the Company’s policy that goodwill be tested at least annually for impairment.

Mortgage servicing rights

The Company originates residential mortgage loans with the intent to sell. These individual loans are normally funded by the buyer immediately. The Company maintains servicing rights on these loans.

Mortgage servicing rights are recognized as an asset upon the sale of a mortgage loan. A portion of the cost of the loan is allocated to the servicing right based upon relative fair value. Servicing rights are intangible assets and are carried at estimated fair value. The carrying amount of mortgage servicing rights was $167,000 and $98,000 at December 31, 2013 and 2012, respectively. Adjustments to fair value are recorded as non-interest income and included in gain on sales of loans in the consolidated statements of income.

The Company retains the servicing rights on certain mortgage loans sold to the FHLB and receives mortgage banking fee income based upon the principal balance outstanding. Total loans serviced for the FHLB were $18,688,000 and $11,295,000 at December 31, 2013 and 2012, respectively. The mortgage loans sold to the FHLB and serviced by the Company are not reflected in the consolidated statements of financial condition.

Premises and equipment and depreciation

Premises and equipment are stated at cost less accumulated depreciation.  Depreciation is computed principally using the straight-line method over the estimated useful lives of the related assets, which range from 3 to 10 years for furniture and equipment and 25 to 50 years for buildings. Expenditures for maintenance and repairs are charged against income as incurred. Costs of major additions and improvements are capitalized. Amortization of leasehold improvements is computed by straight line over the shorter of the assets’ useful life or the related lease term.

Trust assets and revenues

Assets held in a fiduciary capacity are not assets of the Bank or the Bank’s Trust Department and are, therefore, not included in the consolidated financial statements. Trust revenues are recorded on the accrual basis.

Bank owned life insurance, annuities and split-dollar arrangements

The cash surrender value of bank owned life insurance and annuities is carried as an asset, and changes in cash surrender value are recorded as non-interest income.

GAAP requires split-dollar life insurance arrangements to have a liability recognized related to the postretirement benefits covered by an endorsement split-dollar life insurance arrangement. The accrued benefit liability was $792,000 and $738,000 as of December 31, 2013 and 2012, respectively. Related expenses for 2013, 2012 and 2011 were $54,000, $29,000 and $49,000, respectively.

Investments in low-income housing partnerships

Juniata has invested as a limited partner in a partnership that provides low-income housing in Lewistown, Pennsylvania. The carrying value of the investment in the limited partnership was $3,990,000 at December 31, 2013 and $3,796,000 at December 31, 2012. The partnership anticipates receiving $575,000 annually in low-income housing tax credits over ten years, beginning in 2013. Amortization of the investment using the cost method is scheduled to occur over the same period as tax credits are earned. The maximum exposure to loss is limited to the carrying value of its investment at year-end.

Income taxes

The Company accounts for income taxes in accordance with income tax accounting guidance ASC Topic 740, Income Taxes.

Current income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the weight of the evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The Company accounts for uncertain tax positions if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to management’s judgment.

The Company recognizes interest and penalties on income taxes, if any, as a component of income tax expense.

Advertising

The Company follows the policy of charging costs of advertising to expense as incurred. Advertising expenses were $207,000, $172,000 and $144,000 in 2013, 2012 and 2011, respectively.

Off-balance sheet financial instruments

In the ordinary course of business, the Bank has entered into off-balance sheet financial instruments consisting of commitments to extend credit and letters of credit. Such financial instruments are recorded on the consolidated statement of financial condition when they are funded.

Transfer of financial assets

Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Stock-based compensation

The Company sponsors a stock option plan for certain key officers. Compensation expense for stock options granted is measured using the fair value of the award on the grant date and is recognized over the vesting period. The Company recognized $30,000, $25,000 and $26,000 of expense for the years ended December 31, 2013, 2012 and 2011, respectively, for stock-based compensation. The stock-based compensation expense amounts were derived based on the fair value of options using the Black-Scholes option-pricing model. The following weighted average assumptions were used to value options granted in the periods indicated.

	2013	2012	2011
Expected life of options	7 years	7 years	7 years
Risk-free interest rate	1.41%	1.78%	1.39%
Expected volatility	21.57%	22.12%	21.91%
Expected dividend yield	4.91%	4.86%	4.62%

Segment reporting

Management does not separately allocate expenses, including the cost of funding loan demand, between the commercial, retail and trust operations of the Company. As such, discrete financial information is not available, and segment reporting would not be meaningful.

Subsequent events

The Company has evaluated events and transactions occurring subsequent to the consolidated statement of financial condition date of December 31, 2013, for items that should potentially be recognized or disclosed in the consolidated financial statements. The evaluation was conducted through the date these consolidated financial statements were issued.

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Securities (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Debt instrument term	5 years
Carrying value of pledged assets	$ 31,921	$ 30,785
Available-for-sale, securities in unrealized loss positions	Individually, none of these seven equity securities have significant unrealized losses. Of the seven equity securities that have sustained unrealized losses for more than 12 months, all have increased in fair value during 2013, indicating the possibility of full recovery and therefore are deemed to be temporarily impaired. Management has identified no other-than-temporary impairment as of, or for the periods ended, December 31, 2013 and 2012 in the equity portfolio
Equity securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities in unrealized loss position	7
Obligations of U.S. Government agencies and corporations [Member]
Schedule of Available-for-sale Securities [Line Items]
Investment Portfolio Percentage	62.00%
Securities in unrealized loss position	45
Securities in Unrealized Loss Positions for 12 Months or More	1
Percentage of securities depreciated from their amortized cost basis	3.00%
Obligations of State and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Investment Portfolio Percentage	33.00%
Securities in unrealized loss position	37
Securities in Unrealized Loss Positions for 12 Months or More	8
Percentage of securities depreciated from their amortized cost basis	2.00%
Mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Investment Portfolio Percentage	5.00%
Securities in unrealized loss position	1
Percentage of securities depreciated from their amortized cost basis	1.00%

XML

Operating Lease Obligations (Schedule of Future Minimum Rental Payments) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013
Operating Lease Obligations [Abstract]
2014	$ 121
2015	89
2016	83
2017	44
2018
2019 and beyond
Total minimum payments required	$ 337

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Commitments and Contingent Liabilities (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2009	Dec. 31, 2013
Loss Contingencies [Line Items]
Commitment period	8-year
Estimated contract termination fees		$ 1,663,000
Provision for loss on contract		0
Supply Commitment [Member] | Federal Home Loan Bank of Pittsburgh [Member]
Loss Contingencies [Line Items]
Commitment to fund and sell qualifying residential mortgage		15,000,000
Remaining commitment amount		14,211,000
Commitments to Borrowers [Member]
Loss Contingencies [Line Items]
Remaining commitment amount		$ 160,000
First Contract Year [Member]
Loss Contingencies [Line Items]
Percentage of estimated remaining value of the commitment, if terminated	100.00%
Second Contract Year [Member]
Loss Contingencies [Line Items]
Percentage of estimated remaining value of the commitment, if terminated	90.00%
Third Contract Year [Member]
Loss Contingencies [Line Items]
Percentage of estimated remaining value of the commitment, if terminated	80.00%
Fourth Contract Year [Member]
Loss Contingencies [Line Items]
Percentage of estimated remaining value of the commitment, if terminated	70.00%
Contract Years Five Through Eight [Member]
Loss Contingencies [Line Items]
Percentage of estimated remaining value of the commitment, if terminated	60.00%

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Loans and Related Allowance for Loan Losses (Allowance for Loan Losses and Recorded Investments in Loans Receivable) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance				$ 3,281				$ 2,931	$ 3,281	$ 2,931	$ 2,824
Charge-offs									(1,431)	(1,071)	(282)
Recoveries									22	10	25
Provisions	149	100	86	80	174	60	69	1,108	415	1,411	364
Allowance for credit losses: Ending balance	2,287				3,281				2,287	3,281	2,931
Ending balance: individually evaluated for impairment	164				1,127				164	1,127	775
Ending balance: collectively evaluated for impairment	2,123				2,154				2,123	2,154	2,156
Loans: Ending Balance	277,798				277,500				277,798	277,500	289,681
Ending balance: individually evaluated for impairment	8,049				7,662				8,049	7,662	9,539
Ending balance: collectively evaluated for impairment	269,749				269,838				269,749	269,838	280,142
Commercial, Financial and Agricultural [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance				179				195	179	195	163
Charge-offs									(4)	(25)	(18)
Recoveries									13	8	2
Provisions									65	1	48
Allowance for credit losses: Ending balance	253				179				253	179	195
Ending balance: collectively evaluated for impairment	253				179				253	179	195
Loans: Ending Balance	26,281				19,296				26,281	19,296	19,417
Ending balance: individually evaluated for impairment	94				160				94	160	238
Ending balance: collectively evaluated for impairment	26,187				19,136				26,187	19,136	19,179
Real Estate - Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance				463				455	463	455	442
Charge-offs											(37)
Provisions									71	8	50
Allowance for credit losses: Ending balance	534				463				534	463	455
Ending balance: individually evaluated for impairment	26								26
Ending balance: collectively evaluated for impairment	508				463				508	463	455
Loans: Ending Balance	74,471				69,187				74,471	69,187	60,774
Ending balance: individually evaluated for impairment	2,255				2,672				2,255	2,672	2,312
Ending balance: collectively evaluated for impairment	72,216				66,515				72,216	66,515	58,462
Real Estate - Construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance				202				442	202	442	336
Charge-offs									(117)	(193)
Provisions									127	(47)	106
Allowance for credit losses: Ending balance	212				202				212	202	442
Ending balance: individually evaluated for impairment	93				91				93	91	343
Ending balance: collectively evaluated for impairment	119				111				119	111	99
Loans: Ending Balance	19,681				18,092				19,681	18,092	17,508
Ending balance: individually evaluated for impairment	1,982				2,202				1,982	2,202	1,870
Ending balance: collectively evaluated for impairment	17,699				15,890				17,699	15,890	15,638
Real Estate - Mortgage [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance				2,387				1,771	2,387	1,771	1,810
Charge-offs									(1,281)	(852)	(205)
Recoveries											10
Provisions									140	1,468	156
Allowance for credit losses: Ending balance	1,246				2,387				1,246	2,387	1,771
Ending balance: individually evaluated for impairment	45				1,036				45	1,036	432
Ending balance: collectively evaluated for impairment	1,201				1,351				1,201	1,351	1,339
Loans: Ending Balance	140,459				153,122				140,459	153,122	176,544
Ending balance: individually evaluated for impairment	3,718				2,628				3,718	2,628	5,119
Ending balance: collectively evaluated for impairment	136,741				150,494				136,741	150,494	171,425
Obligations of State and Political Subdivisions [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans: Ending Balance	12,702				12,769				12,702	12,769	8,780
Ending balance: collectively evaluated for impairment	12,702				12,769				12,702	12,769	8,780
Personal [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance				50				68	50	68	73
Charge-offs									(29)	(1)	(22)
Recoveries									9	2	13
Provisions									12	(19)	4
Allowance for credit losses: Ending balance	42				50				42	50	68
Ending balance: collectively evaluated for impairment	42				50				42	50	68
Loans: Ending Balance	4,204				5,034				4,204	5,034	6,658
Ending balance: collectively evaluated for impairment	$ 4,204				$ 5,034				$ 4,204	$ 5,034	$ 6,658

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Fair Value Measurements

12 Months Ended

Dec. 31, 2013

Fair Value Measurements [Abstract]

FAIR VALUE MEASUREMENT

19. Fair Value Measurement

Fair value measurement and disclosure guidance defines fair value as the price that would be received to sell an asset or transfer a liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. Additional guidance is provided on determining when the volume and level of activity for the asset or liability has significantly decreased. The guidance also includes guidance on identifying circumstances when a transaction may not be considered orderly.

Fair value measurement and disclosure guidance provides a list of factors that a reporting entity should evaluate to determine whether there has been a significant decrease in the volume and level of activity for the asset or liability in relation to normal market activity for the asset or liability. When the reporting entity concludes there has been a significant decrease in the volume and level of activity for the asset or liability, further analysis of the information from that market is needed, and significant adjustments to the related prices may be necessary to estimate fair value in accordance with fair value measurement and disclosure guidance.

This guidance clarifies that, when there has been a significant decrease in the volume and level of activity for the asset or liability, some transactions may not be orderly. In those situations, the entity must evaluate the weight of the evidence to determine whether the transaction is orderly. The guidance provides a list of circumstances that may indicate that a transaction is not orderly. A transaction price that is not associated with an orderly transaction is given little, if any, weight when estimating fair value.

Fair value measurement and disclosure guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

Fair value measurement and disclosure guidance requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, the guidance establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

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.

An asset’s or liability’s placement in the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality, the Company’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Securities Available for Sale. Debt securities classified as available for sale are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurement from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. Equity securities classified as available for sale are reported at fair value using Level 1 inputs.

Impaired Loans. Certain impaired loans are reported on a non-recurring basis at the fair value of the underlying collateral since repayment is expected solely from the collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.

Other Real Estate Owned. Certain assets included in other real estate owned are carried at fair value as a result of impairment and accordingly are presented as measured on a non-recurring basis. Values are estimated using Level 3 inputs, based on appraisals that consider the sales prices of property in the proximate vicinity.

Mortgage Servicing Rights. The fair value of servicing assets is based on the present value of estimated future cash flows on pools of mortgages stratified by rate and maturity date and are considered Level 3 inputs.

The following table summarizes financial assets and financial liabilities measured at fair value as of December 31, 2013 and December 31, 2012, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands). There were no transfers of assets between fair value Level 1 and Level 2 during the year ended December 31, 2013.

				(Level 1)		(Level 2)		(Level 3)
				Quoted Prices in		Significant		Significant
				Active Markets		Other		Other
		December 31,		for Identical		Observable		Unobservable
		2013		Assets		Inputs		Inputs
Measured at fair value on a recurring basis:
Debt securities available-for-sale:
Obligations of U.S. Government agencies and corporations	$	78,278	$	-	$	78,278	$	-
Obligations of state and political subdivisions		41,932		-		41,932		-
Mortgage-backed securities		4,469		-		4,469		-
Equity securities available-for-sale		1,367		1,367		-		-
Measured at fair value on a non-recurring basis:
Impaired loans		3,300		-		-		3,300
Other real estate owned		50		-		-		50
Mortgage servicing rights		167		-		-		167
				(Level 1)		(Level 2)		(Level 3)
				Quoted Prices in		Significant		Significant
				Active Markets		Other		Other
		December 31,		for Identical		Observable		Unobservable
		2012		Assets		Inputs		Inputs
Measured at fair value on a recurring basis:
Debt securities available-for-sale:
Obligations of U.S. Government agencies and corporations	$	72,817	$	-	$	72,817	$	-
Obligations of state and political subdivisions		45,976		-		45,976		-
Mortgage-backed securities		2,526		-		2,526		-
Equity securities available-for-sale		1,019		1,019		-		-
Measured at fair value on a non-recurring basis:
Impaired loans		2,056		-		-		2,056
Other real estate owned		50		-		-		50
Mortgage servicing rights		98		-		-		98

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Level 3 inputs have been used to determine fair value:

December 31, 2013	Fair Value Estimate		Valuation Technique	Unobservable Input	Range	Weighted Average
Impaired loans	$	3,300	Appraisal of collateral (1)	Appraisal and liquidation adjustments (2)	(7)% - (10)%	(9.0)%
Other real estate owned		50	Appraisal of collateral (1)	Appraisal and liquidation adjustments (2)	0%	0%
Mortgage servicing rights		167	Multiple of annual servicing fee	Estimated pre-payment speed, based on rate and term	300% - 400%	326%

December 31, 2012	Fair Value Estimate		Valuation Technique	Unobservable Input	Range	Weighted Average
Impaired loans	$	2,056	Appraisal of collateral (1)	Appraisal and liquidation adjustments (2)	(7)% - (10)%	(8.1)%
Other real estate owned		50	Appraisal of collateral (1)	Appraisal and liquidation adjustments (2)	0%	0%
Mortgage servicing rights		98	Multiple of annual servicing fee	Estimated pre-payment speed, based on rate and term	300% - 400%	326%

(1) Fair value is generally determined through independent appraisals of the underlying collateral that generally include various level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

Fair Value of Financial Instruments

Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in sales transactions on the dates indicated. The estimated fair value amounts have been measured as of their respective year ends and have not been re-evaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different from the amounts reported at each year end.

The information presented below should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is provided only for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful.

The following describes the estimated fair value of the Company’s financial instruments as well as the significant methods and assumptions not previously disclosed used to determine these estimated fair values.

Carrying values approximate fair value for cash and due from banks, interest-bearing demand deposits with banks, restricted stock in the Federal Home Loan Bank, interest receivable, mortgage servicing rights, non-interest bearing demand deposits, securities sold under agreements to repurchase, short-term borrowings and interest payable. Other than cash and due from banks, which are considered Level 1 inputs and mortgage servicing rights, which are considered Level 3 inputs, these instruments are Level 2 inputs.

Interest bearing time deposits with banks - The estimated fair value is determined by discounting the contractual future cash flows, using the rates currently offered for deposits of similar remaining maturities. 

Loans – For variable-rate loans that reprice frequently and which entail no significant changes in credit risk, carrying values approximated fair value. Substantially all commercial loans and real estate mortgages are variable rate loans. The fair value of other loans (i.e. consumer loans and fixed-rate real estate mortgages) are estimated by calculating the present value of the cash flow difference between the current rate and the market rate, for the average maturity, discounted quarterly at the market rate.

Fixed rate time deposits - The estimated fair value is determined by discounting the contractual future cash flows, using the rates currently offered for deposits of similar remaining maturities. 

Other interest bearing liabilities – The fair valueis estimated using discounted cash flow analysis, based on incremental borrowing rates for similar types of arrangements.

Commitments to extend credit and letters of credit – The fair value of commitments to extend credit is estimated using the fees currently charged to enter into similar agreements, taking into account market interest rates, the remaining terms and present credit-worthiness of the counterparties. The fair value of guarantees and letters of credit is based on fees currently charged for similar agreements.

The estimated fair values of the Company’s financial instruments are as follows (in thousands):

Financial Instruments
(in thousands)
		December 31, 2013				December  31, 2012
		Carrying		Fair		Carrying		Fair
Financial assets:		Value		Value		Value		Value
Cash and due from banks	$	8,570	$	8,570	$	14,261	$	14,261
Interest bearing deposits with banks		43		43		136		136
Interest bearing time deposits with banks		249		250		847		849
Securities		126,046		126,046		122,338		122,338
Restricted investment in FHLB stock		1,967		1,967		1,726		1,726
Loans, net of allowance for loan losses		275,511		282,226		274,219		286,467
Mortgage servicing rights		167		167		98		98
Accrued interest receivable		1,529		1,529		1,632		1,632
Financial liabilities:
Non-interest bearing deposits		74,611		74,611		71,318		71,318
Interest bearing deposits		305,034		308,414		315,433		319,946
Securities sold under agreements to repurchase		5,397		5,397		3,836		3,836
Short-term borrowings		8,400		8,400		1,600		1,600
Other interest bearing liabilities		1,356		1,358		1,305		1,315
Accrued interest payable		287		287		354		354
Off-balance sheet financial instruments:
Commitments to extend credit		-		-		-		-
Letters of credit		-		-		-		-

The following presents the carrying amount, fair value and placement in the fair value hierarchy of the Company’s financial instruments not previously disclosed as of December 31, 2013 and December 31, 2012. This table excludes financial instruments for which the carrying amount approximates fair value.

			(Level 1)	(Level 2)	(Level 3)
			Quoted Prices in
			Active Markets	Significant	Significant
			for Identical	Other	Other
December 31, 2013	Carrying Amount	Fair Value	Assets or Liabilities	Observable Inputs	Unobservable Inputs
Financial instruments - Assets
Interest bearing time deposits with banks	$              249	$            250	$                      -	$              250	$                    -
Loans, net of allowance for loan losses	275,511	282,226	-	-	282,226
Financial instruments - Liabilities
Interest bearing deposits	305,034	308,414	-	308,414	-
Other interest bearing liabilities	1,356	1,358	-	1,358	-

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Premises And Equipment (Premises and Equipment) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	$ 14,252	$ 13,897
Less: accumulated depreciation and amortization	(7,922)	(7,425)
Premises and equipment, net	6,330	6,472
Land [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	1,066	864
Building and improvements [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	8,585	8,510
Furniture, computer software and equipment [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	$ 4,601	$ 4,523

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2013

Summary of Significant Accounting Policies [Abstract]

Disclosure of Share-based Compensation Arrangements, Assumptions Used

The following weighted average assumptions were used to value options granted in the periods indicated.

	2013	2012	2011
Expected life of options	7 years	7 years	7 years
Risk-free interest rate	1.41%	1.78%	1.39%
Expected volatility	21.57%	22.12%	21.91%
Expected dividend yield	4.91%	4.86%	4.62%

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Deposits

12 Months Ended

Dec. 31, 2013

Deposits [Abstract]

DEPOSITS

12. Deposits

Deposits consist of the following (in thousands):

	December 31,
		2013		2012
Demand, non-interest bearing	$	74,611	$	71,318
NOW and Money Market		89,867		90,349
Savings		60,761		56,382
Time deposits, $100,000 or more		30,995		33,007
Other time deposits		123,411		135,695
	$	379,645	$	386,751

Aggregate amount of scheduled maturities of time deposits as of December 31, 2013 include the following (in thousands):

		Time Deposits
Maturing in:		$100,000 or more		Other		Total Time Deposits
2014	$	14,526	$	55,671	$	70,197
2015		10,222		35,221		45,443
2016		2,456		13,886		16,342
2017		1,375		6,914		8,289
2018		1,329		7,426		8,755
Later		1,087		4,293		5,380
	$	30,995	$	123,411	$	154,406

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Employee Benefit Plans (Schedule of Assumptions Used) (Details)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Employee Benefit Plans [Abstract]
Assumptions Used Calculating Benefit Obligation, Discount Rate	4.75%	4.00%	4.40%
Assumptions Used Calculating Benefit Obligation, Rate of Compensation Increase			3.00%
Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate	4.00%	4.40%	5.50%
Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Return on Assets	6.35%	7.00%	7.00%
Assumptions Used Calculating Net Periodic Benefit Cost, Rate of Compensation Increase		3.00%	3.00%