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| 8-K - FORM 8-K - JUNIATA VALLEY FINANCIAL CORP | tv493146_8k.htm |
Exhibit 99.1
Juniata Valley Financial Corp. Announces Completion of Liverpool Merger and First Quarter Results
MIFFLINTOWN, Pa., May 03, 2018 (GLOBE NEWSWIRE) --
Liverpool Merger Completed
Juniata Valley Financial Corp. (OTC Pink: 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 | ||||||