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Juniata Valley Financial Corp. Announces Completion of Liverpool Merger and First Quarter Results

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MIFFLINTOWN, Pa., May 03, 2018 (GLOBE NEWSWIRE) --

Liverpool Merger Completed

Juniata Valley Financial Corp. (OTC:JUVF) ("Juniata") today announced that its acquisition of Liverpool Community Bank ("Liverpool") was completed on April 30, 2018.

Execution of an agreement and plan of merger between Juniata and Liverpool was announced on December 29, 2017.  Pursuant to the merger agreement, Liverpool was merged with and into Juniata's subsidiary bank, The Juniata Valley Bank, and the Liverpool shareholders will receive a combination of Juniata stock and cash for their Liverpool shares, with the transaction valued at approximately $12.6 million. Liverpool will now operate as the Liverpool Community Office of The Juniata Valley Bank.

The transaction expands Juniata's footprint in Perry County and Juniata now operates a total of 16 community offices in Pennsylvania. The consolidated assets of the combined company were approximately $640.0 million as of April 30, 2018.

Marcie A. Barber, President and Chief Executive Officer of Juniata stated, "Juniata acquired 39.16% of Liverpool's outstanding stock in 2006. Our alliance with management and staff over the past twelve years has resulted in our thorough understanding of Liverpool's customers and market. We look forward to introducing new financial services and products to the Liverpool community while maintaining the exemplary customer service they trust and value."

Sandler O'Neill + Partners, LP acted as financial advisor and Barley Snyder LLP acted as legal advisor to Juniata in the transaction. The Kafafian Group, Inc. acted as financial advisor and Pillar + Aught acted as legal advisor to Liverpool.

Earnings Announcement

Juniata's first quarter 2018 net income was $1,327,000, representing an annualized return on average assets of 0.89% and an annualized return on average equity of 9.15%. Earnings per share for the first quarter of 2018 were $0.28. Net income of $1,459,000 in the first quarter of 2017, which included $519,000 more in gains realized on the sale of securities than the current year's first quarter, was 9.0% greater than net income in the first quarter of 2018. In the first quarter of 2017, annualized return on average assets was 1.00%, annualized return on average equity was 9.83% and earnings per share were $0.31. Ms. Barber stated, "We are proud of Juniata's first quarter earnings, as the building blocks of normal earnings show good improvement over prior periods.  Loan balances are up over $5.0 million from year end and net of security gains, non-interest income grew nearly 7.0% over first quarter 2017".

Net interest income increased during the three months ended March 31, 2018 by $98,000, or 2.2%, when compared to the three months ended March 31, 2017. Average earning assets increased $9.0 million, primarily due to an $8.3 million increase in average loans, and the yield on earning assets increased to 3.97% during the three months ended March, 31 2018 from 3.85% in the same period in 2017. In addition, the yield on interest bearing liabilities increased from 0.61% during the three months ended March 31, 2017 to 0.77% in the same period in 2018; however, the average balance of interest bearing liabilities over the period remained relatively stable, increasing by $150,000 during the 2018 period compared to the 2017 period.

Non-interest income was $1,174,000 in the first quarter of 2018 compared to $1,616,000 in the first quarter of 2017, a decrease of $442,000. Most significantly impacting the comparative first quarter periods was the net gain on the sales and calls of investment securities of $504,000 recorded in the first quarter of 2017, while a net loss of $15,000 was recorded in the first quarter of 2018. Excluding the impact of the securities gains, non-interest income grew by 6.9%, due primarily to increases in debit card activity, trust fees and fees derived from loan activity.

Non-interest expense was $4,405,000 for the three months ended March 31, 2018 versus $4,269,000 for the same period in 2017, an increase of $136,000. Included in the first quarter of 2018 was $64,000 in merger-related expenses, with no similar expense recorded in the comparable 2017 period. Occupancy and equipment expense increased $75,000 due to the completion and occupation of a relocated banking office at the end of 2017 and amortization expense increased $80,000 due to the additional investment in phase II of Juniata's low income elderly housing tax credit investment, with no similar expense recorded in the first quarter of 2017. Partially offsetting these increases, were cost reductions in employee benefits relating to medical insurance and defined benefit expense. Juniata's income tax provision in the first quarter of 2018 was $401,000 less than the tax provision in the comparable quarter in 2017 as a result of lower taxable income in the 2018 period as well as the reduction in the federal income tax rate to 21% in 2018 versus 34% in 2017.

Total assets at March 31, 2018 were $594,984,000, an increase of 0.5% compared to December 31, 2017. Through the first quarter of 2018, loan balances averaged $390,023,000 compared to average loan balances in the first quarter of 2017 of $381,719,000, an increase of 2.2%. Average deposit balances increased by 4.2%, while average borrowings and other interest bearing liabilities declined 14.4% in the first quarter of 2018 compared to the first quarter of 2017.

On April 17, 2018, Juniata Valley Financial Corp.'s Board of Directors declared a cash dividend of $0.22 per share, payable on June 1, 2018 to shareholders of record on March 15, 2018.

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 sixteen community offices located in Juniata, Mifflin, Perry, Huntingdon, 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 OTC Pink 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. Do not unduly rely on forward-looking statements.  Forward-looking statements can be identified by the use of words such as "believes", "expects", "anticipates", "may", "should", "will", "could", "estimates", "projects", "predicts", "potential", "continue", "plans", "future" "intends", "goal", "strategy", "likely", "seek" and similar expressions. Any forward-looking statement made by us in this document is based only on information currently available to us and speaks only as of the date when made.  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. Forward-looking statements are not historical facts or guarantees of future performance, events or results, and are subject to potential risks and uncertainties, many of which are outside of our control, that could cause actual results to differ materially from this forward-looking information.  Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include those discussed in the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations – Forward-Looking Statements" set forth in Juniata's Annual Report on Form 10-K for the year ended December 31, 2017.

Financial Statements

           
Juniata Valley Financial Corp. and Subsidiary
Consolidated Statements of Financial Condition
  (Unaudited)      
(Dollars in thousands, except share data) March 31,   December 31,
    2018       2017  
ASSETS          
Cash and due from banks $  12,130      $  9,839   
Interest bearing deposits with banks    22         58   
Cash and cash equivalents    12,152         9,897   
           
Interest bearing time deposits with banks    350         350   
Equity securities (fair value adjustment in net income)    1,113         -  
Securities available for sale    147,449         153,824   
Restricted investment in bank stock    2,904         3,104   
Investment in unconsolidated subsidiary    4,845         4,812   
Total loans    389,180         383,904   
Less: Allowance for loan losses    (3,035 )      (2,939 )
Total loans, net of allowance for loan losses    386,145         380,965   
Premises and equipment, net    8,724         8,887   
Other real estate owned    377         355   
Bank owned life insurance and annuities    15,045         14,972   
Investment in low income housing partnerships    5,145         5,245   
Core deposit and other intangible    184         195   
Goodwill    5,448         5,448   
Mortgage servicing rights    221         225   
Accrued interest receivable and other assets    4,882         3,666   
Total assets $  594,984      $  591,945   
           
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:          
Deposits:          
Non-interest bearing $  119,567      $  115,911   
Interest bearing    368,559         361,757   
Total deposits    488,126         477,668   
           
Securities sold under agreements to repurchase    4,240         9,769   
Short-term borrowings    12,000         12,000   
Long-term debt    25,000         25,000   
Other interest bearing liabilities    1,566         1,593   
Accrued interest payable and other liabilities    6,053         6,528   
Total liabilities    536,985         532,558   
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 -          
4,816,831 shares at March 31, 2018;          
4,811,611 shares at December 31, 2017          
Outstanding -          
4,772,948 shares at March 31, 2018;          
4,767,656 shares at December 31, 2017    4,816         4,811   
Surplus    18,575         18,565   
Retained earnings    41,310         40,876   
Accumulated other comprehensive loss    (5,869 )      (4,034 )
Cost of common stock in Treasury:          
43,883 shares at March 31, 2018;          
43,955 shares at December 31, 2017    (833 )      (831 )
Total stockholders' equity    57,999         59,387   
Total liabilities and stockholders' equity $  594,984      $  591,945   


           
Juniata Valley Financial Corp. and Subsidiary
Consolidated Statements of Income (Unaudited)
     
    Three Months Ended
(Dollars in thousands, except share data)   March 31,
    2018     2017
Interest income:          
Loans, including fees $  4,551      $  4,370 
Taxable securities    775         683 
Tax-exempt securities    103         114 
Other interest income    10         7 
Total interest income    5,439         5,174 
Interest expense:          
Deposits    594         469 
Securities sold under agreements to repurchase    15         3 
Short-term borrowings    84         62 
Long-term debt    93         85 
Other interest bearing liabilities    8         8 
Total interest expense    794         627 
Net interest income    4,645         4,547 
Provision for loan losses    158         105 
Net interest income after provision for loan losses    4,487         4,442 
Non-interest income:          
Customer service fees    412         433 
Debit card fee income    292         270 
Earnings on bank-owned life insurance and annuities    81         84 
Trust fees    102         84 
Commissions from sales of non-deposit products    50         47 
Income from unconsolidated subsidiary    69         47 
Fees derived from loan activity    95         45 
Mortgage banking income    19         33 
(Loss) gain on sales and calls of securities    (15 )      504 
Unrealized loss on equity securities    (6 )      -
Other non-interest income    75         69 
Total non-interest income    1,174         1,616 
Non-interest expense:          
Employee compensation expense    1,792         1,739 
Employee benefits    564         654 
Occupancy    318         295 
Equipment    207         155 
Data processing expense    416         417 
Director compensation    54         60 
Professional fees    177         142 
Taxes, other than income    113         134 
FDIC Insurance premiums    70         91 
Loss on sales of other real estate owned    -        13 
Amortization of intangibles    11         17 
Amortization of investment in low-income housing partnerships    200         120 
Merger and acquisition expense    64         -
Other non-interest expense    419         432 
Total non-interest expense    4,405         4,269 
Income before income taxes    1,256         1,789 
Income tax provision    (71 )      330 
Net income $  1,327      $  1,459 
Earnings per share          
Basic $  0.28      $  0.31 
Diluted $  0.28      $  0.31 
Cash dividends declared per share $  0.22      $  0.22 
Weighted average basic shares outstanding   4,770,389       4,756,517
Weighted average diluted shares outstanding   4,787,769       4,762,090

                                                                                                              

 


 

 

JoAnn McMinn, Executive Vice President and Chief Financial Officer
joann.mcminn@jvbonline.com
717-436-8211

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