JUNIATA VALLEY FINANCIAL CORP

Previous wording

The following discussion relates to the consolidated financial condition of the Company as of June 30, 2026, compared to December 31, 2025, and the consolidated results of operations for the three and six months ended June 30, 2026, compared to the same periods in 2025. This discussion should be read in conjunction with the interim consolidated financial statements and related notes included herein.

Current wording

The following discussion relates to the consolidated financial condition of the Company as of September 30, 2026, compared to December 31, 2025, and the consolidated results of operations for the three and nine months ended September 30, 2026, compared to the same periods in 2025. This discussion should be read in conjunction with the interim consolidated financial statements and related notes included herein.

Previous wording

Total assets as of June 30, 2026 were $918.9 million, an increase of $23.7 million, or 2.6%, compared to total assets of $895.3 million at December 31, 2025. Cash and cash equivalents increased by $2.6 million, or 22.3%, as of June 30, 2026 compared to December 31, 2025, while total debt securities decreased by $13.6 million, or 5.7%, over the same period as principal paydowns on the mortgage-backed securities portfolio, as well as proceeds from maturities and called securities, were used to fund loan growth rather than being reinvested into the securities portfolio. Total loans increased by $34.9 million, or 5.8%, as of June 30, 2026 compared to year-end 2025 primarily due to increases in real estate – commercial and construction loans. Total deposits increased by $23.9 million, or 3.1%, as of June 30, 2026 compared to December 31, 2025 mainly due primarily to an increase in interest bearing demand and time deposits. Short-term borrowings and repurchase agreements decreased by $6.1 million, or 12.2%, as of June 30, 2026 compared to year-end 2025 primarily due to a decrease in repurchase agreement balances resulting from fluctuations in customers’ accounts.

Current wording

Total assets as of September 30, 2026 were $913.1 million, an increase of $17.9 million, or 2.0%, compared to total assets of $895.3 million at December 31, 2025. Total debt securities decreased by $18.5 million, or 7.8%, over the same nine-month period as principal paydowns on the mortgage-backed securities portfolio, as well as proceeds from maturities and called securities, were used to fund loan growth rather than being reinvested into the securities portfolio. Total loans increased by $36.0 million, or 6.0%, as of September 30, 2026 compared to year-end 2025 primarily due to an increase in real estate – construction – other construction loans. Total deposits increased by $31.7 million, or 4.1%, as of September 30, 2026 compared to December 31, 2025 mainly due to an increase in interest bearing demand and time deposits. Short-term borrowings and repurchase agreements decreased by $22.0 million, or 44.1%, as of September 30, 2026 compared to year-end 2025 primarily due to a decrease in overnight borrowings, while total stockholders’ equity increased $7.2 million,

Previous wording

A summary of the activity in the allowance for credit losses for the six months ended June 30, 2026 and 2025, respectively, is presented below.

Current wording

A summary of the activity in the allowance for credit losses for the nine months ended September 30, 2026 and 2025, respectively, is presented below.

Previous wording

As of June 30, 2026, there were $17.7 million of loans classified as special mention compared to $17.5 million at December 31, 2025, $177,000 of loans classified as substandard at June 30, 2026 compared to $507,000 at December 31, 2025, and $124,000 of loans classified as doubtful at June 30, 2026 compared to $128,000 at December 31, 2025.

Current wording

As of September 30, 2026, there were $17.3 million of loans classified as special mention compared to $17.5 million at December 31, 2025, $165,000 of loans classified as substandard at September 30, 2026 compared to $507,000 at December 31, 2025, and $124,000 of loans classified as doubtful at September 30, 2026 compared to $128,000 at December 31, 2025.

Previous wording

The Company estimates expected credit losses over a reasonable and supportable four-quarter forecast period using Federal Open Market Committee (“FOMC”) estimates for real GDP and unemployment rate. For periods beyond the forecast period, management has elected to revert to historical loss experience over four quarters. The economic factors considered as part of the ACL were selected after a rigorous regression analysis and model selection process. Additionally, the Company uses reasonable credit risk assumptions based on an annual report produced by Moody’s for the obligations of states and political subdivisions segment. The quantitative general allowance was $3.7 million at both June 30, 2026 and December 31, 2025.

Current wording

The Company estimates expected credit losses over a reasonable and supportable four-quarter forecast period using Federal Open Market Committee (“FOMC”) estimates for real GDP and unemployment rate. For periods beyond the forecast period, management has elected to revert to historical loss experience over four quarters. The economic factors considered as part of the ACL were selected after a rigorous regression analysis and model selection process. Additionally, the Company uses reasonable credit risk assumptions based on an annual report produced by Moody’s for the obligations of states and political subdivisions segment. The quantitative general allowance was $3.8 million at September 30, 2026 and $3.7 million at December 31, 2025.

Previous wording

In determining how to apply the weightings for the various qualitative factors, management considered which factors were not entirely considered within the base model and assessed which factors would have the highest impact on potential loan losses. Weights and risks are consistent across various segments except for instances where the risk factor is not applicable, or the segment is more or less exposed than other segments. Risk weighting is adjusted directionally based on relevancy and the ability to quantify an impact. For example, the economy and external factors were determined to have the most significant effect on the estimated losses largely because there is evidence that economic conditions are largely correlated and can explain a significant portion of historical changes in loss. Likewise, risks that are well-controlled throughout the organization, such as managerial contingencies and loan review controls, require less allocation. The qualitative analysis resulted in a general reserve of $3.9 million at June 30, 2026 and $3.4 million at December 31, 2025.

Current wording

In determining how to apply the weightings for the various qualitative factors, management considered which factors were not entirely considered within the base model and assessed which factors would have the highest impact on potential loan losses. Weights and risks are consistent across various segments except for instances where the risk factor is not applicable, or the segment is more or less exposed than other segments. Risk weighting is adjusted directionally based on relevancy and the ability to quantify an impact. For example, the economy and external factors were determined to have the most significant effect on the estimated losses largely because there is evidence that economic conditions are largely correlated and can explain a significant portion of historical changes in loss. Likewise, risks that are well-controlled throughout the

Previous wording

Net income for the three months ended June 30, 2026 was $2.5 million, an increase of $611,000, or 32.0%, compared to the three months ended June 30, 2025. Both basic and diluted earnings per share were $0.50 for the three months ended June 30, 2026 compared to both basic and diluted earnings per share of $0.38 for the comparable 2025 period.

Current wording

Net income for the three months ended September 30, 2026 was $2.9 million, an increase of $833,000, or 40.5%, compared to the three months ended September 30, 2025. Both basic and diluted earnings per share were $0.57 for the three months ended September 30, 2026 compared to both basic and diluted earnings per share of $0.41 for the comparable 2025 period.

Previous wording

Annualized return on average assets for the three months ended June 30, 2026 was 1.11 %, compared to the annualized return on average assets of 0.89% for the same period in 2025. For the three months ended June 30, annualized return on average equity was 16.51% in 2026 compared to 15.01% in the 2025 period.

Current wording

Annualized return on average assets for the three months ended September 30, 2026 was 1.26 %, compared to the annualized return on average assets of 0.94% for the same period in 2025. For the three months ended September 30, annualized return on average equity was 18.13% in 2026 compared to 15.47% in the 2025 period.

Previous wording

Average interest earning assets increased 5.2%, to $894.1 million, for the three months ended June 30, 2026 compared to the same period in 2025, due to an increase of $72.8 million, or 13.3%, in average loans, which was partially offset by a decrease of $29.3 million, or 9.9%, in average investment securities. Average interest bearing liabilities increased by $27.4 million, or 4.5%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, with the largest increase being in average interest bearing demand deposits, which increased $13.5 million, or 6.3%.

Current wording

Net interest income was $7.9 million for the three months ended September 30, 2026, an increase of $1.3 million, or 20.9%, compared to $6.6 million for the three months ended September 30, 2025. Average interest earning assets increased 4.2%, to $900.8 million, for the three months ended September 30, 2026 compared to the same period in 2025, due to an increase of $68.7 million, or 12.1%, in average loans, which was partially offset by a decrease of $33.1 million, or 11.5%, in average investment securities. Average interest-bearing liabilities increased $21.9 million, or 3.6%, for the three months ended September 30, 2026, compared to the same period in 2025. The increase was primarily attributable to a $30.5 million, or 5.4% increase in average interest-bearing deposits, partially offset by an $8.5 million, or 17.0%, decline in average borrowings.

Previous wording

The yield on earning assets increased 30 basis points, to 4.80%, for the three months ended June 30, 2026 compared to same period last year, driven by an increase in loan yields of 13 basis points, while the cost to fund interest earning assets with interest bearing liabilities decreased 14 basis points, to 2.07%.

Current wording

The yield on earning assets increased 36 basis points, to 4.95%, for the three months ended September 30, 2026 compared to same period last year, driven by an increase in loan yields of 20 basis points, while the cost to fund interest earning assets with interest bearing liabilities decreased 16 basis points, to 2.06%. The net interest margin, on a fully tax equivalent basis, increased from 3.04% for the three months ended September 30, 2025 to 3.53% for the three months ended September 30, 2026.

Previous wording

Juniata recorded a provision for credit losses of $376,000 for the three months ended June 30, 2026 compared to a provision for credit losses of $349,000 for the three months ended June 30, 2025.

Current wording

Juniata recorded a provision for credit losses of $186,000 for the three months ended September 30, 2026 compared to a provision for credit losses of $216,000 for the three months ended September 30, 2025.

Previous wording

As a percentage of average assets, annualized non-interest income was 0.61% for the three months ended June 30, 2026 compared to 0.69% for the three months ended June 30, 2025.

Current wording

As a percentage of average assets, annualized noninterest income was 0.64% for the three months ended September 30, 2026 compared to 0.69% for the three months ended September 30, 2025.

Previous wording

An income tax provision of $478,000 was recorded during the three months ended June 30, 2026 compared to an income tax provision of $329,000 recorded during the three months ended June 30, 2025. The increase between three-month periods was mainly due to more taxable income being recorded in the 2026 period. Juniata qualifies for a federal tax credit for an investment in a low-income housing partnership. The tax credit was $83,000 for both the three months ended June 30, 2026 and June 30, 2025. For the three months ended June 30, 2026, the tax credit lowered the effective tax rate from 18.7% to 15.9% compared to the same period in 2025, when the tax credit lowered the effective tax rate from 18.4% to 14.7%.

Current wording

An income tax provision of $576,000 was recorded during the three months ended September 30, 2026 compared to an income tax provision of $357,000 recorded during the three months ended September 30, 2025. The increase between three-month periods was mainly due to more taxable income being recorded in the 2026 period. Juniata qualifies for a federal tax credit for an investment in a low-income housing partnership. The tax credit was $82,000 for both the three months ended September 30, 2026 and September 30, 2025. For the three months ended September 30, 2026, the tax credit lowered the effective tax rate from 19.0% to 16.6% compared to the same period in 2025, when the tax credit lowered the effective tax rate from 18.2% to 14.8%.

Previous wording

Net income for the six months ended June 30, 2026 was $5.3 million, an increase of $1.4 million, or 35.7%, compared to the six months ended June 30, 2025. Basic and diluted earnings per share were $1.06 and $1.05, respectively, for the six months ended June 30, 2026 compared to both basic and diluted earnings per share of $0.78 for the comparable 2025 period.

Current wording

Net income for the nine months ended September 30, 2026 was $8.2 million, an increase of $2.2 million, or 37.4%, compared to the nine months ended September 30, 2025. Basic and diluted earnings per share were $1.63 for the nine months ended September 30, 2026 compared to basic and diluted earnings per share of $1.19 for the comparable 2025 period.

Previous wording

Annualized return on average assets for the six months ended June 30, 2026 was 1.18%, compared to the annualized return on average assets of 0.92 % for the same period in 2025. For the six months ended June 30, annualized return on average equity was 17.75% in 2026 compared to 15.76% in the 2025 period.

Current wording

Annualized return on average assets for the nine months ended September 30, 2026 was 1.21%, compared to the annualized return on average assets of 0.92% for the same period in 2025. For the nine months ended September 30, annualized return on average equity was 17.88% in 2026 compared to 15.65% in the 2025 period.

Previous wording

The discussion that follows further explains changes in the components of net income when comparing the six months ended June 30, 2026 to the six months ended June 30, 2025.

Current wording

The discussion that follows further explains changes in the components of net income when comparing the nine months ended September 30, 2026 to the nine months ended September 30, 2025.

Previous wording

Average earning assets increased $42.1 million, or 5.0%, to $888.4 million for the six months ended June 30, 2026 compared to the same period in 2025. This increase was due to an increase of $69.3 million, or 12.8%, in average loans, which was partially offset by a decrease of $27.9 million, or 9.4%, in average investment securities as principal paydowns on the mortgage-backed securities portfolio, as well as proceeds from maturities and called securities, were used to fund loan growth rather than being reinvested into the securities portfolio. Average interest bearing liabilities increased by $25.8 million, or 4.3%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, with the largest increase being in average interest bearing demand deposits, which increased $14.3 million, or 6.9%.

Current wording

Average earning assets increased $40.1 million, or 4.7%, to $892.6 million for the nine months ended September 30, 2026 compared to the same period in 2025. This increase was due to an increase of $69.1 million, or 12.5%, in average loans, which was partially offset by a decrease of $29.6 million, or 10.1%, in average investment securities as principal paydowns on the mortgage-backed securities portfolio, as well as proceeds from maturities and called securities, were used to fund loan growth rather than being reinvested into the securities portfolio. For the nine months ended September 30, 2026, average interest-bearing liabilities increased $24.5 million, or 4.0%, from the comparable 2025 period. The increase was driven by growth in all categories of interest-bearing deposits, which collectively increased $26.3 million, or 4.7%. Partially offsetting this growth in interest-bearing deposits was a decline in average borrowings of $1.8 million, or 3.5%.

Previous wording

The yield on earning assets increased 37 basis points, to 4.83%, for the six months ended June 30, 2026 compared to same period last year, driven by an increase in loan yields of 26 basis points, while the cost to fund interest earning assets with interest bearing liabilities decreased 15 basis points, to 2.09%.

Current wording

The yield on earning assets increased 37 basis points, to 4.87%, for the nine months ended September 30, 2026 compared to the same period last year, driven by an increase in loan yields of 24 basis points, while the cost to fund interest earning assets with interest bearing liabilities decreased 15 basis points, to 2.08%.

Previous wording

The net interest margin, on a fully tax equivalent basis, increased from 2.95% for the three months ended June 30, 2025 to 3.36% for the three months ended June 30, 2026.

Current wording

The net interest margin, on a fully tax equivalent basis, increased from 2.94% for the nine months ended September 30, 2025 to 3.43% for the nine months ended September 30, 2026.

Previous wording

The table below shows the net interest margin on a fully tax-equivalent basis for the six months ended June 30, 2026 and 2025.

Current wording

The table below shows the net interest margin on a fully tax-equivalent basis for the nine months ended September 30, 2026 and 2025.

Previous wording

Juniata recorded a provision for credit losses of $556,000 in the six months ended June 30, 2026 compared to a provision for credit losses of $453,000 in the six months ended June 30, 2025. The increase in the provision for credit losses between six-month periods was due to continued loan growth.

Current wording

Juniata recorded a provision for credit losses of $742,000 in the nine months ended September 30, 2026 compared to a provision for credit losses of $669,000 in the nine months ended September 30, 2025. The increase in the provision for credit losses between nine-month periods was primarily due to loan growth.

Previous wording

Non-interest income was $2.8 million for both the six months ended June 30, 2026 and June 30, 2025. Most significantly impacting the comparative six-month periods was an increase of $266,000 in the change in value of equity securities in the 2026 period, which was partially offset by a $209,000 loss on the sales and calls of securities due to a portfolio yield restructuring plan undertaken in the second quarter of 2026. Also impacting the comparative six-month periods was an increase of $89,000 in fees derived from loan activity, which was offset by decreases of $58,000 in customer service fees and $70,000 in commissions from sales of non-deposit products due to the transition to a new wealth management business model in the second quarter of 2025.

Current wording

Noninterest income was $4.3 million for both the nine months ended September 30, 2026 and September 30, 2025. Most significantly impacting the comparative nine-month periods was an increase of $235,000 in the change in value of equity securities in the 2026 period, which was partially offset by a $209,000 loss on the sales and calls of securities due to a portfolio yield restructuring plan undertaken in the second quarter of 2026. Also impacting the comparative nine-month periods was an increase of $58,000 in fees derived from loan activity, which was offset by decreases of $89,000 in customer service fees and $63,000 in commissions from sales of non-deposit products.

Previous wording

As a percentage of average assets, annualized non-interest income was 0.63% for the six months ended June 30, 2026 compared to 0.66% for the six months ended June 30, 2025.

Current wording

As a percentage of average assets, annualized noninterest income was 0.63% for the nine months ended September 30, 2026 compared to 0.67% for the nine months ended September 30, 2025.

Previous wording

Non-interest expense was $5.4 million for the three months ended June 30, 2026, an increase of $361,000, or 7.1%, compared to the three months ended June 30, 2025. Most significantly impacting non-interest expense in the comparative three-month periods were increases in employee compensation and benefits expenses of $176,000 and $192,000, respectively. Also impacting the comparative three-month periods was an increase of $54,000 in occupancy expense due to increased maintenance expense, which was offset by a decrease of $82,000 in other non-interest expenses, primarily due to recording a $62,000 credit to the provision for unfunded commitments.

Current wording

Noninterest expense was $16.4 million for the nine months ended September 30, 2026 compared to $15.2 million for the nine months ended September 30, 2025, an increase of 7.8%. Most significantly impacting noninterest expense in the comparative nine-month periods were increases in employee compensation and benefits expenses of $303,000 and $571,000, respectively. Also impacting the comparative nine-month periods was an increase of $90,000 in data processing expenses due to scheduled core processing price increases and additional products offered to customers, as well as an increase of $71,000 in equipment expenses due to increased maintenance and depreciation expenses.

Previous wording

An income tax provision of $1.0 million was recorded during the six months ended June 30, 2026 compared to an income tax provision of $700,000 recorded during the six months ended June 30, 2025. The increase between the six-month periods was mainly due to more taxable income being recorded in the 2026 period. Juniata qualifies for a federal tax credit for an investment in a low-income housing partnership. The tax credit was $165,000 for both the six months ended June 30, 2026 and June 30, 2025. For the six months ended June 30, 2026, the tax credit lowered the effective tax rate from 19.0% to 16.4% compared to the same period in 2025, when the tax credit lowered the effective tax rate from 18.7% to 15.2%.

Current wording

An income tax provision of $1.6 million was recorded during the nine months ended September 30, 2026 compared to an income tax provision of $1.1 million recorded during the nine months ended September 30, 2025. The increase between the nine-month periods was mainly due to more taxable income being recorded in the 2026 period. Juniata qualifies for a federal tax credit for an investment in a low-income housing partnership. The tax credit was $247,000 for both the nine months ended September 30, 2026 and September 30, 2025. For the nine months ended September 30, 2026, the tax credit lowered the effective tax rate from 19.0% to 16.5% compared to the same period in 2025, when the tax credit lowered the effective tax rate from 18.5% to 15.0%.

Previous wording

The Company is a member of the Federal Home Loan Bank of Pittsburgh for the purpose of providing short-term liquidity to supplement other sources of liability liquidity. During the six months ended June 30, 2026, overnight borrowings from the FHLB averaged $38.7 million. As of June 30, 2026, the Company had $33.1 million in short-term borrowings at the FHLB, with a remaining unused borrowing capacity of $232.0 million at the FHLB. Borrowings from the FHLB are secured by the Company’s qualifying loans at the FHLB.

Current wording

The Company is a member of the Federal Home Loan Bank of Pittsburgh for the purpose of providing short-term liquidity to supplement other sources of liability liquidity. During the nine months ended September 30, 2026, overnight borrowings from the FHLB averaged $34.6 million. As of September 30, 2026, the Company had $16.0 million in short-term borrowings at the FHLB, with a remaining unused borrowing capacity of $254.8 million at the FHLB. Borrowings from the FHLB are secured by the Company’s qualifying loans at the FHLB.

Previous wording

As of June 30, 2026, the Company had no outstanding borrowings at the Federal Reserve Bank with an unused borrowing capacity of $41.9 million.

Current wording

As of September 30, 2026, the Company had no outstanding borrowings at the Federal Reserve Bank with an unused borrowing capacity of $17.9 million.

Previous wording

The Company has internal authorization for brokered deposits of up to $120.9 million. As of June 30, 2026, the Company had no brokered deposits.

Current wording

The Company has internal authorization for brokered deposits of up to $122.0 million. As of September 30, 2026, the Company had no brokered deposits.

Previous wording

At June 30, 2026, the Company had $10.7 million in funding derived from securities sold under agreements to repurchase (accounted for as collateralized financing transactions). This product is available through corporate cash management accounts for business customers and provides the Company with the ability to pay interest on corporate checking accounts.

Current wording

At September 30, 2026, the Company had $11.9 million in funding derived from securities sold under agreements to repurchase (accounted for as collateralized financing transactions). This product is available through corporate cash management accounts for business customers and provides the Company with the ability to pay interest on corporate checking accounts.

Previous wording

In view of the sources previously mentioned and the steps taken by the Company through the six months ended June 30, 2026, management believes the Company’s liquidity can provide the funds needed to meet operational cash needs.

Current wording

In view of the sources previously mentioned and the steps taken by the Company through the nine months ended September 30, 2026, management believes the Company’s liquidity can provide the funds needed to meet operational cash needs.

Previous wording

As of June 30, 2026, the Company had $112.8 million outstanding in loan commitments and other unused lines of credit extended to its customers as compared to $132.3 million at December 31, 2025. As of June 30, 2026 and December 31, 2025, the Company had $5.7 million and $5.2 million, respectively, of financial and performance letters of credit commitments outstanding. Commercial letters of credit as of June 30, 2026 and December 31, 2025 totaled $17.0 million and $9.7 million, respectively.

Current wording

As of September 30, 2026, the Company had $129.0 million outstanding in loan commitments and other unused lines of credit extended to its customers as compared to $132.3 million at December 31, 2025. As of September 30, 2026 and December 31, 2025, the Company had $6.6 million and $5.2 million, respectively, of financial and performance letters of credit commitments outstanding. Commercial letters of credit as of September 30, 2026 and December 31, 2025 totaled $18.0 million and $9.7 million, respectively.

Previous wording

The Company’s principal source of funds for dividend payments is dividends received from the Bank. 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 June 30, 2026, $7.4 million in 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 regulatory capital requirements.

Current wording

The Company’s principal source of funds for dividend payments is dividends received from the Bank. 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 September 30, 2026, $8.7 million in 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 regulatory capital requirements.