0000714712falseNoneNONE00007147122023-07-212023-07-21

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 21, 2023

JUNIATA VALLEY FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

-

Pennsylvania

0-13232

23-2235254

(State or other Jurisdiction of Incorporation)

(Commission File Number)

(IRS Employer Identification No.)

Bridge and Main Streets, Mifflintown, Pennsylvania

17059

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (855) 582-5101

Not Applicable

(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

None

N/A

N/A

Juniata Valley Financial Corp.

Current Report on Form 8-K

Item 2.02Results of Operations and Financial Condition

On July 21, 2023, Juniata Valley Financial Corp. issued a press release reporting financial results for the quarter ended June 30, 2023. The aforementioned press release is attached as Exhibit 99.1 to this current report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

 

Exhibits. The exhibits listed in the Exhibit Index accompanying this Form 8-K are furnished herewith.

Exhibit Index

 

Exhibit No.

 

Description

99.1

 

Press Release reporting financial results for the quarter ended June 30, 2023.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Juniata Valley Financial Corp.

Date: July 21, 2023

By:

/s/ Michael W. Wolf

Name:

Michael W. Wolf

Title:

EVP, Chief Financial Officer

Exhibit 99.1

Graphic

Juniata Valley Financial Corp. Announces Second Quarter 2023 Results

Mifflintown, PA, July 21, 2023 (GLOBE NEWSWIRE) -- Juniata Valley Financial Corp. (OTCQX:JUVF) (“Juniata”), announced net income for the three months ended June 30, 2023 of $1.4 million, a decrease of 29.5% compared to net income of $2.0 million for the three months ended June 30, 2022. Earnings per share, basic and diluted, decreased 30.0%, to $0.28, during the three months ended June 30, 2023, compared to $0.40 during the three months ended June 30, 2022. Net income for the six months ended June 30, 2023 decreased 23.6%, to $3.1 million, compared to net income of $4.1 million for the six months ended June 30, 2022. Earnings per share, basic and diluted, decreased 24.4% during the six months ended June 30, 2023, to $0.62, compared to basic and diluted earnings per share of $0.82 during the corresponding 2022 period.

President’s Message

President and Chief Executive Officer, Marcie A. Barber stated, “We are pleased to deliver solid operating results for the first half of 2023 despite more than $440,000 in non-recurring expenses recorded in the second quarter and the challenges facing the banking industry; our fundamentals remain very strong. Like the banking industry in general, the full effects of the rapid interest rate increases of the last 18 months have affected our results. We continue to attempt to mitigate net interest margin compression with a global strategy for loan and deposit pricing while taking a more granular approach to address the intense competition to retain and attract loan and deposit customers. Our asset quality continues to be outstanding. We successfully integrated the Path Valley branch into our network on May 12, 2023 and we look forward to expanding our presence in the Spring Run region and taking advantage of new opportunities for growth.”    

Financial Results Year-to-Date

Annualized return on average assets for the six months ended June 30, 2023, was 0.75%, a decrease of 25.0% compared to the annualized return on average assets of 1.00% for the six months ended June 30, 2022. Annualized return on average equity for the six months ended June 30, 2023 was 16.87%, an increase of 21.8% compared to the annualized return on average equity of 13.85% for the six months ended June 30, 2022.

Net interest income was $11.4 million during the six months ended June 30, 2023 compared to $12.0 million during the comparable 2022 period. Average earning assets increased $51.1 million, or 6.6%, to $831.7 million, during the six months ended June 30, 2023, compared to the same period in 2022, due primarily to an increase of $69.5 million, or 16.5%, in average loans. The increase in average loans was partially offset by a decline of $15.4 million, or 4.4%, in average investment securities as the amortization on the mortgage-backed securities portfolio was used to fund loan growth rather than being reinvested into the securities portfolio. Average interest bearing liabilities increased by $31.0 million, or 5.5%, during the six months ended June 30, 2023 compared to the comparable 2022 period, due primarily to growth in average short-term borrowings, which were also used to fund loan growth. The yield on average loans and investment securities increased by 32 basis points and 18 basis points, respectively, in the six months ended June 30, 2023 compared to the six months ended June 30, 2022, while the cost of short-term borrowings over the same period increased by 170 basis points primarily due to the increase in market interest rates as both the prime rate and federal funds target range increased by 350 basis points between periods. The yield on earning assets increased 44 basis points, to 3.86%, in the six months ended June 30, 2023 compared to the six months ended June 30, 2022, while the cost to fund interest earning assets with interest bearing liabilities increased 105 basis points, to 1.51%. The net interest margin, on a fully tax equivalent basis, decreased from 3.12% during the six months ended June 30, 2022, to 2.81% during the six months ended June 30, 2023.

Juniata adopted ASU 2016-13 – Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments as of January 1, 2023, resulting in the recording of a $1.1 million increase to the allowance for credit losses. The new current expected credit loss (CECL) model is based on forecasted economic scenarios as well as qualitative factors specific to Juniata. While Juniata continued to experience favorable asset quality trends, elevated qualitative risk factors including economic uncertainty, national delinquency trends and the effects of the increasing interest rate environment, in addition to loan growth, were considered, resulting in a credit loss expense of $290,000 for the six months ended June 30, 2023, compared to a provision expense of $250,000 for the six months ended June 30, 2022.


Non-interest income was $2.6 million during the six months ended June 30, 2023 compared to $2.7 million during the six months ended June 30, 2022, a decrease of 2.5%. Most significantly impacting the comparative six month periods was a $1.1 million decline in the loss on sales and calls of securities due to the execution of a balance sheet and regulatory capital management strategy in 2022 in which $1.1 million in securities losses were offset by $1.2 million in gains from the termination of two derivatives contracts, recorded in other non-interest income. Also impacting the comparative six month periods was a $110,000 increase in life insurance proceeds during the six months ended June 30, 2023 compared to the six months ended June 30, 2022, which was offset by decreases of $61,000 in fees derived from loan activity, $57,000 in customer service fees and $48,000 in commissions from sales of non-deposit products.

Non-interest expense was $10.2 million during the six months ended June 30, 2023 compared to $9.9 million during the six months ended June 30, 2022, an increase of 3.3%. Most significantly impacting non-interest expense in the comparative six month periods was a $298,000 increase in data processing expense primarily due to a $238,000 breakage fee paid to Juniata’s current core service provider as Juniata plans to convert to a new core service provider in the first quarter of 2024, as well as a $209,000 increase in merger and acquisition expense due to the completion of the Path Valley branch acquisition in the second quarter of 2023. These increases were partially offset by a decline of $208,000 in low-income housing partnership amortization expense during the six months ended June 30, 2023 versus the comparable 2022 period due to the completion of the 10-year amortization period in January 2023 for one of Juniata’s low-income housing partnership investments.

An income tax provision of $398,000 was recorded during the six months ended June 30, 2023 compared to an income tax provision of $386,000 recorded during the six months ended June 30, 2022. Juniata qualifies for a federal tax credit for investments in low-income housing partnerships. The tax credit decreased from $451,000 in the six months ended June 30, 2022 to $202,000 in the six months ended June 30, 2023 due to the completion of the amortization period for one of Juniata’s low-income housing partnership investments.

Financial Results for the Quarter

Annualized return on average assets for the three months ended June 30, 2023 was 0.67%, a decrease of 30.9%, compared to 0.97% for the three months ended June 30, 2022. Annualized return on average equity for the three months ended June 30, 2023 was 14.97%, a decrease of 3.6%, compared to 15.53% for the three months ended June 30, 2022.

Net interest income was $5.7 million for the three months ended June 30, 2023 compared to $6.0 million for the three months ended June 30, 2022. Average earning assets increased $41.4 million, or 5.2%, to $833.9 million during the three months ended June 30, 2023, compared to the same period in 2022, primarily due to an increase of $70.4 million, or 16.6%, in average loans, partially offset by a decline of $29.0 million, or 8.0%, in average investment securities. Average interest bearing liabilities increased by $26.6 million, or 4.6%, compared to the comparable 2022 period, primarily due to growth in short-term borrowings. The yield on average loans and investment securities increased by 50 basis points and 12 basis points, respectively, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022 while the rate on short-term borrowings and other interest bearing liabilities increased by 235 basis points over the same period, primarily due to the 350 basis point increase in market interest rates between periods. The yield on earning assets increased 52 basis points, to 3.92%, during the three months ended June 30, 2023 compared to same period in 2022, while the cost to fund interest earning assets with interest bearing liabilities increased 118 basis points, to 1.66%. The net interest margin, on a fully tax equivalent basis, decreased from 3.08% during the three months ended June 30, 2022, to 2.76% during the three months ended June 30, 2023.

Juniata recorded a credit loss expense of $47,000 for the three months ended June 30, 2023 compared to a provision expense of $222,000 for the three months ended June 30, 2022. While elevated qualitative risk factors were considered including economic uncertainty and the effects of the increasing interest rate environment, favorable asset quality trends, slower loan growth than the comparative 2022 period and net recoveries recorded during the three months ended June 30, 2023 resulted in a lower credit loss expense in the 2023 period.

Non-interest income was $1.4 million for the three months ended June 30, 2023 and June 30, 2022. Most significantly impacting non-interest income in the comparative three month periods was a $1.1 million decrease in the loss on sales and calls of securities recorded as no securities losses were recorded in the 2023 period, as well as a $1.2 million decrease in other noninterest income due to $1.2 million in gains from the termination of two derivatives contracts recorded in other non-interest income in the 2022 period. Also affecting non-interest income between the three months ended June 30, 2023 and 2022 was an increase of $110,000 in life insurance proceeds, which was partially offset by decreases of $39,000 in commissions from sales of non-deposit products, $24,000 in fees derived from loan activity and $23,000 in customer service fees.


Non-interest expense was $5.5 million for the three months ended June 30, 2023, compared to $5.0 million for the three months ended June 30, 2022, an increase of 8.5%. Most significantly impacting non-interest expense in the comparative three month periods was a $280,000 increase in data processing expense due primarily to recording a $238,000 breakage fee paid to Juniata’s current core service provider as Juniata plans to convert to a new core service provider in the first quarter of 2024, as well as a $209,000 increase in merger and acquisition expense during the three months ended June 30, 2023 from the completion of the Path Valley branch acquisition in the second quarter of 2023. These increases were partially offset by a $120,000 decline in amortization of investment in low-income housing partnerships due to the completion of the amortization period for one of Juniata’s low-income housing partnership investments in January 2023.

An income tax provision of $151,000 was recorded during the three months ended June 30, 2023 compared to an income tax provision of $177,000 recorded during the three months ended June 30, 2022. The federal tax credit for investments in low-income housing partnerships decreased from $226,000 in the three months ended June 30, 2022 to $82,000 in the three months ended June 30, 2023 due to the completion of the amortization period for one of Juniata’s low-income housing partnership investments.

Financial Condition

Total assets as of June 30, 2023 were $845.5 million, an increase of $14.6 million, or 1.8%, compared to total assets of $830.9 million at December 31, 2022. Comparing asset balances on June 30, 2023 and December 31, 2022, cash and cash equivalents increased by $3.6 million and total loans increased by $20.7 million, while total debt securities decreased by $8.8 million. On May 12, 2023, Juniata acquired $18.7 million in deposits from the Path Valley branch acquisition, which contributed to the $28.5 million increase in total deposits as of June 30, 2023 compared to December 31, 2022, as well as the $13.9 million decrease in short-term borrowings and repurchase agreements as the funds from the acquired deposits were used to repay Federal Home Loan Bank overnight borrowings.

Juniata maintains a strong liquidity position as of June 30, 2023, with additional borrowing capacity with the Federal Home Loan Bank of Pittsburgh of $180.5 million and $68.0 million in additional borrowing capacity of from either the Federal Reserve’s Discount Window or the Federal Reserve’s new Bank Term Funding Program (BTFP), as well as an authorized internal limit for brokered deposits of $175.0 million. Juniata had no brokered deposits outstanding as of June 30, 2023.

Subsequent Event

On July 18, 2023, the Board of Directors declared a cash dividend of $0.22 per share to shareholders of record on August 17, 2023, payable on September 1, 2023.

Management considers subsequent events occurring after the statement of condition date for matters which may require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company’s consolidated financial statements with the Securities and Exchange Commission. Accordingly, the financial information in this release is subject to change.

The Juniata Valley Bank, the principal subsidiary of Juniata Valley Financial Corp., is headquartered in Mifflintown, Pennsylvania, with fifteen community offices located in Juniata, Mifflin, Perry, Franklin, McKean and Potter Counties. More information regarding Juniata Valley Financial Corp. and The Juniata Valley Bank can be found online at www.JVBonline.com. Juniata Valley Financial Corp. trades through the OTCQX Best Market under the symbol JUVF.

Forward-Looking Information

*This press release may contain “forward looking” information as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect the current views of Juniata’s management with respect to, among other things, future events and Juniata’s financial performance. When words such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words  or similar expressions are used in this release, Juniata is making forward-looking statements. Such information is based on Juniata’s current expectations, estimates and projections about future events and financial trends affecting the financial condition of its business, many of which, by their nature, are inherently uncertain and beyond the control of Juniata. These statements are not historical facts or guarantees of future performance, events or results and are subject to risks, assumptions and uncertainties that are difficult to predict. If one or more events related to these or other risks or uncertainties materializes, or if underlying assumptions prove to be incorrect, actual results may differ materially from this forward-looking information. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and many factors could affect future financial results. Juniata undertakes no obligation to publicly update or revise forward looking information, whether because of new or updated information, future events, or otherwise. For a more complete discussion of certain risks and uncertainties affecting Juniata, please see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Forward-Looking Statements” set forth in the Juniata’s filings with the Securities and Exchange Commission.


Financial Statements

Juniata Valley Financial Corp. and Subsidiary

Consolidated Statements of Financial Condition

(Dollars in thousands, except share data)

    

(Unaudited)

    

June 30, 2023

December 31, 2022

ASSETS

Cash and due from banks

$

14,383

$

10,856

Interest bearing deposits with banks

 

190

 

143

Cash and cash equivalents

 

14,573

 

10,999

Equity securities

 

992

 

1,056

Debt securities available for sale

 

69,098

 

73,536

Debt securities held to maturity (fair value $202,267 and $209,887, respectively)

 

205,208

 

209,565

Restricted investment in bank stock

 

2,483

 

3,666

Total loans

 

505,184

 

484,512

Less: Allowance for credit losses

 

(5,442)

 

(4,027)

Total loans, net of allowance for credit losses

 

499,742

 

480,485

Premises and equipment, net

 

8,211

 

8,190

Bank owned life insurance and annuities

 

14,712

 

15,197

Investment in low income housing partnerships

 

1,315

 

1,507

Core deposit and other intangible assets

 

393

 

121

Goodwill

 

9,871

 

9,047

Mortgage servicing rights

 

87

 

92

Deferred tax asset

 

12,112

 

11,838

Accrued interest receivable and other assets

 

6,664

 

5,576

Total assets

$

845,461

$

830,875

LIABILITIES AND STOCKHOLDERS' EQUITY

 

  

 

  

Liabilities:

 

  

 

  

Deposits:

 

  

 

  

Non-interest bearing

$

195,300

$

199,131

Interest bearing

 

544,677

 

512,381

Total deposits

 

739,977

 

711,512

Short-term borrowings and repurchase agreements

 

41,827

 

55,710

Long-term debt

 

20,000

 

20,000

Other interest bearing liabilities

 

1,006

 

1,011

Accrued interest payable and other liabilities

 

5,650

 

5,693

Total liabilities

 

808,460

 

793,926

Commitments and contingent liabilities

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 - 5,151,279 shares at June 30, 2023 and December 31, 2022; Outstanding - 5,018,129 shares at June 30, 2023 and 5,003,059 shares at December 31, 2022

 

5,151

 

5,151

Surplus

 

24,852

 

24,986

Retained earnings

 

51,291

 

51,217

Accumulated other comprehensive loss

 

(42,013)

 

(41,867)

Cost of common stock in Treasury: 133,150 shares at June 30, 2023; 148,220 shares at December 31, 2022

 

(2,280)

 

(2,538)

Total stockholders' equity

 

37,001

 

36,949

Total liabilities and stockholders' equity

$

845,461

$

830,875


Juniata Valley Financial Corp. and Subsidiary

Consolidated Statements of Income (Unaudited)

Three Months Ended

 

Six Months Ended

(Dollars in thousands, except share and per share data)

June 30, 

 

June 30, 

    

2023

    

2022

 

2023

    

2022

Interest income:

 

 

Loans, including fees

$

6,509

$

5,052

$

12,629

$

10,160

Taxable securities

 

1,579

 

1,609

 

3,159

 

2,986

Tax-exempt securities

 

37

 

40

 

73

 

80

Other interest income

 

29

 

18

 

45

 

25

Total interest income

 

8,154

 

6,719

 

15,906

 

13,251

Interest expense:

 

  

 

  

 

  

 

  

Deposits

 

1,885

 

550

 

3,328

 

1,012

Short-term borrowings and repurchase agreements

 

468

 

22

 

883

 

35

Long-term debt

 

118

 

118

 

234

 

234

Other interest bearing liabilities

 

10

 

1

 

20

 

2

Total interest expense

 

2,481

 

691

 

4,465

 

1,283

Net interest income

 

5,673

 

6,028

 

11,441

 

11,968

Provision for credit losses

 

47

 

222

 

290

 

250

Net interest income after provision for credit losses

 

5,626

 

5,806

 

11,151

 

11,718

Non-interest income:

 

  

 

  

 

  

 

  

Customer service fees

 

339

 

362

 

662

 

719

Debit card fee income

 

440

 

435

 

857

 

845

Earnings on bank-owned life insurance and annuities

 

55

 

59

 

110

 

111

Trust fees

 

126

 

95

 

258

 

250

Commissions from sales of non-deposit products

 

73

 

112

 

168

 

216

Fees derived from loan activity

 

78

 

102

 

171

 

232

Mortgage banking income

 

10

 

6

 

23

 

13

Gain (loss) on sales and calls of securities

 

 

(1,074)

 

 

(1,074)

Change in value of equity securities

 

(42)

 

(57)

 

(64)

 

(80)

Gain from life insurance proceeds

 

161

 

51

 

161

 

51

Other non-interest income

 

139

 

1,291

 

246

 

1,375

Total non-interest income

 

1,379

 

1,382

 

2,592

 

2,658

Non-interest expense:

 

  

 

  

 

  

 

  

Employee compensation expense

 

2,131

 

2,213

 

4,166

 

4,235

Employee benefits

 

749

 

613

 

1,484

 

1,314

Occupancy

 

348

 

319

 

652

 

650

Equipment

 

166

 

184

 

331

 

359

Data processing expense

 

930

 

650

 

1,527

 

1,229

Professional fees

 

228

 

188

 

423

 

364

Taxes, other than income

 

56

 

133

 

165

 

264

FDIC Insurance premiums

 

124

 

72

 

195

 

164

Amortization of intangible assets

 

20

 

14

 

31

 

27

Amortization of investment in low-income housing partnerships

 

80

 

200

 

192

 

400

Merger and acquisition expense

 

209

 

 

209

 

Other non-interest expense

 

415

 

442

 

839

 

893

Total non-interest expense

 

5,456

 

5,028

 

10,214

 

9,892

Income before income taxes

 

1,549

 

2,160

 

3,529

 

4,484

Income tax provision

 

151

 

177

 

398

 

386

Net income

$

1,398

$

1,983

$

3,131

$

4,098

Earnings per share

 

  

 

  

 

  

 

  

Basic

$

0.28

$

0.40

$

0.62

$

0.82

Diluted

$

0.28

$

0.40

$

0.62

$

0.82

Michael Wolf

Email: michael.wolf@jvbonline.com

Phone: (717) 436-7203


v3.23.2
Document and Entity Information
Jul. 21, 2023
Document and Entity Information [Abstract]  
Document Type 8-K
Document Period End Date Jul. 21, 2023
Entity File Number 0-13232
Entity Registrant Name JUNIATA VALLEY FINANCIAL CORP.
Entity Incorporation, State or Country Code PA
Entity Tax Identification Number 23-2235254
Entity Address, Address Line One Bridge and Main Streets
Entity Address, City or Town Mifflintown
Entity Address, State or Province PA
Entity Address, Postal Zip Code 17059
City Area Code 855
Local Phone Number 582-5101
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security None
Trading Symbol None
Security Exchange Name NONE
Entity Emerging Growth Company false
Entity Central Index Key 0000714712
Amendment Flag false

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