Juniata Valley Financial Corp. Announces 2016 Second Quarter Financial Results
Mifflintown, PA, Aug. 06, 2016 (GLOBE NEWSWIRE) --
Marcie A. Barber, President and Chief Executive Officer of Juniata Valley Financial Corp. (OTC Pink: JUVF) ("Juniata"), announced that Juniata's net income for the second quarter of 2016 was $1,115,000, an increase of $114,000, or 11.4% as compared to net income in the second quarter of 2015. Earnings per share was $0.23 per share in the second quarter of 2016, compared to $0.24 in the second quarter of 2015. For the six months ended June 30, 2016 net income was $2,407,000, an increase of 25.0% over earnings for the same time period in 2015, with earnings per share increasing by $0.04, or 8.7%, over the corresponding 2015 period.
The comparability of the results of operations for the three and six month periods ending June 30, 2016 to the corresponding periods in 2015 were materially impacted by the acquisition of FNBPA Bancorp, Inc. ("FNBPA") on November 30, 2015. The earnings increases in both 2016 periods were due primarily to growth of earning assets and revenues as a result of the acquisition. The growth in earning assets and revenues more than offset increased operational expenses related to the expansion of the franchise in both 2016 periods that are expected to be recurring, as well as significant one-time merger integration costs.
Specifically, Juniata incurred $372,000 of non-recurring expense in conjunction with the integration of its new Northern Tier region during the first six months of 2016, with $314,000 recorded in the second quarter. In the second quarter and year-to-date periods of 2015, only $48,000 and $58,000, respectively, in merger expenses were incurred. Exclusive of these non-recurring expenses and the corresponding tax impact for both the 2016 and 2015 periods, an increase of net income for the six months ended June 30, 2016 was $2,653,000, an increase of $690,000, or 35.2%, over net income of $1,963,000 in the first six months of 2015. Excluding similar expenses and their corresponding tax impact for each of the second quarter periods, net income increased by $289,000, or 28.0%.
Ms. Barber stated, "All material aspects of consolidation in the Northern Tier were completed during the second quarter. Our financial results in the first six months of 2016 evidence successful integration. We look forward to growth in assets and fee based services in that region, as well as in the Juniata Valley, throughout 2016."
Annualized return on average assets for the six months ended June 30, 2016 was 0.83%. Adjusted for the non-recurring tax-effected merger and integration expenses in both the 2016 and 2015 periods, annualized return on average assets was 0.92% as compared to 0.81% for the same period in 2015. Annualized return on average equity, including and excluding tax-effected merger and acquisition expense, was 7.87% and 8.68%, respectively, for the six months ended June 30, 2016, as compared to 7.68% and 7.83%, respectively, in the six months ended June 30, 2015. On the adjusted basis, basic and diluted earnings per share increased from $0.46 in the first half of 2015 to $0.55 in the first half of 2016.
Net interest income increased in the first half of 2016 by $1,775,000 when compared to the first half of 2015, driven by higher average loan balances and lower funding costs. Average earning assets were $93.0 million higher in the 2016 period, resulting from both organic growth and the FNBPA acquisition. Partially offsetting the increase in net interest income was an increase in non-interest expense, primarily employee compensation and benefits expense due to added staffing in Juniata's Northern Tier (FNBPA's market area). Other non-interest expense increases included data processing expense, professional fees and FDIC insurance premiums, each related to the expansion of the franchise.
Non-interest income during the first half of 2016 increased by $394,000 when compared to the first half of 2015 and included $128,000 in net gains on investment transactions, a $113,000 gain on the sale of student loans acquired in the FNBPA transaction, as well as a $136,000 aggregate increase in customer service fees and debit card fee income.
For the second quarter of 2016, annualized return on average assets was 0.78% as compared to 0.84% for the same period in 2015 and annualized return on average equity was 7.25% and 7.99% in the second quarters of 2016 and 2015, respectively. Excluding tax-effected non-recurring merger and integration costs, return on average assets and return on average equity were 0.93% and 8.60%, respectively, for the second quarter of 2016, and 0.87% and 8.24%, respectively, in the second quarter of 2015. On the adjusted basis, basic and diluted earnings per share increased from $0.25 in the second quarter of 2015 to $0.28 in the second quarter of 2016.
Net interest income increased in the second quarter of 2016 by $807,000 when compared to the second quarter of 2015, driven by higher average loan balances and lower funding costs. Non-interest income grew by $215,000, or 19.0%, with $128,000 of the increase attributable to net gains on security transactions. Non-interest expense increased by $599,000, or 16.7%, exclusive of non-recurring merger and acquisition costs.
Total assets at June 30, 2016 were $572.8 million, a decrease of 1.9% compared to December 31, 2015. During the same period, loans grew by $1.1 million, or 0.3%, and deposits increased by $9.9 million, or 2.2%.
On July 19, 2016, Juniata Valley Financial Corp.'s Board of Directors declared a cash dividend of $0.22 per share, payable on September 1, 2016 to shareholders of record on August 15, 2016.
To review financial statements which include detailed quarter and year-to-date financial information, please refer to Juniata's reports by following this link Q2 2016 Financial Statements. These financial statements can be also be found at www.jvbonline.com, under Investor Relations/SEC Filings/Documents/Latest 10Q.
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 when filed with the SEC. Accordingly, the financial information in this announcement 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, Huntingdon, McKean and Potter Counties. In addition, Juniata Valley owns 39.16% of Liverpool Community Bank, which it carries under the equity method of accounting. 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 OTC Pink under the symbol JUVF.
*This press release may contain "forward looking" information as defined by the Private Securities Litigation Reform Act of 1995. When words such as "believes", "expects", "anticipates" or similar expressions are used in this release, Juniata Valley 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. These statements are not historical facts or guarantees of future performance, events or results. Such statements involve potential risks and uncertainties and, accordingly, actual results may differ materially from this "forward looking" information. Many factors could affect future financial results. Juniata undertakes no obligation to publicly update or revise forward looking information, whether as a result 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 SEC.