Juniata Valley Financial Corp. · OTC:JUVF
Juniata Valley Financial — Shareholder Meeting (May 2016)
50 slides from Juniata Valley Financial's shareholder meeting presentation, May 18, 2016
Slide 1: Annual Shareholders Meeting May 17, 2016
Annual Shareholders Meeting May 17, 2016
Slide 2: Shareholders' Business Meeting
“ ” Shareholders’ Business Meeting Timothy I. Havice Chairman of the Board of Directors
Slide 3: Forward-looking statements
The presentation 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 inform
Slide 4: Banking on Community
Banking on Community Marcie A. Barber President and Chief Executive Officer
Slide 5: Number of Financial Institutions in United States
Number of Financial Institutions In United States 12,329 10,945 9,510 8,564 7,871 7,510 7,072 6,279 5,865 5,573 5,309 0 2000 4000 6000 8000 10000 12000 14000 1990 1993 1996 1999 2002 2005 2008 2011 2013 2014 2015 # of Financial Institutions
Slide 6: Reduction in financial institutions over 2 years
2013 2015 5,865 5,309 Reduction in financial institutions over this 2 year period 556
Slide 7: Failed Financial Institutions in United States 2000-2016
Failed Financial Institutions In United States 2000 - 2016 2 4 11 3 4 0 0 3 25 140 157 92 50 25 18 8 3 0 20 40 60 80 100 120 140 160 180 200 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 8: Failed institutions over that period
2014 2015 18 8 Failed Institutions over that period 26
Slide 9: Who chose to sell
556 - 26 = 530 Who chose fo sell
Slide 10: Total assets, loans, deposits of acquired bank
Total Assets $89.6 Million Gross Loans $47.1 Million Deposits $77.7 Million Net Interest Margin 3.66% LTM Net Income $0.8 Million LTM Return on Average Assets 0.86%
Slide 11: Financial Performance
Financial Performance JoAnn N. McMinn Executive Vice President and Chief Financial Officer
Slide 12: Non-GAAP supplemental financial information notice
The presentation that follows contains some supplemental financial information determined by methods other than in accordance with U . S . generally accepted accounting principles (GAAP) . Some tables that follow present reconciliations of certain non - GAAP measures to the most directly comparable
Slide 13: 2015 - Year of Growth
2015 - Year of Growth Juniata Valley Financial Corp. Acquires FNBPA Bancorp, Inc. Early in 2015, Management explored possibility of expansion through acquisition. Began negotiations and due diligence in March. Definitive Agreement to merge announced in June. Five months of planning for clo
Slide 14: Sources of Balance Sheet Growth
Sources of Balance Sheet Growth (in thousands) Balance Sheet 12/31/2014 FNBPA Acquisition 11/30/2015 Organic Growth 12/31/2015 Investment securities 142,903$ 35,458$ (26,034)$ 152,327$ Loans 294,901 47,055 36,770 378,726 Other Assets 42,725 7,118 3,032 52,875 Total Assets 480,529$ 89,631$ 13,768$ 58
Slide 15: The Cost of Acquiring
The Cost of Acquiring There are many significant costs that accompany a merger transaction: Investment Banking Firm Fairness Opinion Legal Due Diligence Fair Value Analysis Accounting/Audit System Conversion/Deconversion Long - term contract termination penalties Contractual Paym
Slide 16: 2015 earnings affected by one-time non-recurring costs
“ ” In 2015, earnings were affected more by one - time non - recurring costs than by the increased earnings potential of the business combination, due to the timing of the settlement. November 30, 2015 Settlement – combined operations, only one month. To properly evaluate and compare the earnings re
Slide 17: Non-GAAP presentation of net income and performance ratios
Note concerning performance comparisons * In order to provide meaningful comparisons to prior years and to peer performance, earnings and non - interest expense ratios for 2015 will reflect the adjusted results indicated above. Non-GAAP presentation of net income and performance ratios 2015 Net inco
Slide 18: Income and Performance Ratios
Income and Performance Ratios 2013 2014 2015, as adjusted * Net Income 4,001,000$ 4,216,000$ 4,369,000$ * Return on Average Assets 0.89% 0.90% 0.89% * Return on Average Equity 8.07% 8.31% 8.54% * Net Interest Margin (fully tax equivalent) 3.53% 3.48% 3.56% Loan Loss Provision as % of Average Assets
Slide 19: Credit Quality: Non-Performing Loans
Credit Quality Continued Improvement in Non - Performing Loans 10,690 9,588 6,203 5,646 3,690 - 2,000 4,000 6,000 8,000 10,000 12,000 2011 2012 2013 2014 2015 Non - Performing Loan Balances, in thousands 3.69% 3.46% 2.23% 1.91% 0.98% Percentage of Total Loans Outstanding
Slide 20: Peer Group Comparisons
Peer Group Comparisons Important to assess our performance against other financial institutions of our relative size who are experiencing similar regulatory and compliance governance .
Slide 21: Peer Groups Defined
Local Peers Geographic Peers of similar size and complexity CBTC - CBT Financial Corporation CCFN – CCFNB Bancorp, Inc. DIMC – Dimeco, Inc. EMCF – Emclaire Financial Corp. ENBP – ENB Financial Corp FMFP – First Community Financial Corporation FRAF – Franklin Financial Services Corporat
Slide 22: Performance Comparison: ROA and ROE
Performance Comparison Return on Average Assets 0.89% 0.90% 0.89% 0.78% 0.82% 0.70% 0.79% 0.89% 0.86% 2013 2014 2015 JUVF Local Peers PA Banking Corp Return on Average Equity 8.07% 8.31% 8.54% 8.30% 8.68% 7.99% 7.86% 8.62% 8.01% JUVF Local Peers PA Banking Corp Source: SNL Financial, an offering of
Slide 23: Performance Comparison: Net Interest Margin, Loan Loss Provision
Performance Comparison Net Interest Margin (Fully Tax Equivalent) 3.53% 3.48% 3.56% 3.50% 3.54% 3.51% 3.39% 3.39% 3.34% 2013 2014 2015 JUVF Local Peers PA Banking Corp Loan Loss Provision (As a Percentage of Average Assets) 0.09% 0.08% 0.10% 0.14% 0.11% 0.14% 0.16% 0.10% 0.12% 2013 2014 2015 JUVF Lo
Slide 24: Performance Comparison: Non-Interest Income and Expense
Performance Comparison Non - Interest Income (As a Percentage of Average Assets) 0.94% 0.92% 0.92% 0.78% 0.77% 0.77% 0.67% 0.61% 0.61% 2013 2014 2015 JUVF Local Peers PA Banking Corp Non - Interest Expense (As a Percentage of Average Assets) 2.92% 2.88% 2.94% 2.90% 2.88% 2.97% 2.63% 2.56% 2.60% 2013
Slide 25: Credit Quality: Non-Performing Assets as % of Equity
Credit Quality Non - Performing Assets as % of Equity 13.90% 11.79% 7.81% 21.69% 17.36% 12.25% 14.83% 13.55% 10.97% 2013 2014 2015 JUVF Local Peers PA Banking Corp JUVF Trend High Focus on Reduction and Prevention of Non - Performing Assets. Definition of Non - Performing Asset: Loan that has
Slide 26: Capital Strength
Capital Strength Risk - Based Capital Ratios 17.97% 17.12% 15.03% 15.41% 15.44% 15.12% 17.30% 18.42% 17.83% 10.00% 11.00% 12.00% 13.00% 14.00% 15.00% 16.00% 17.00% 18.00% 19.00% 2013 2014 2015 JUVF Local Peers PA Banking Corp Regulatory Measurement of Capital Adequacy Minimum regulatory requirem
Slide 27: Healthy Capital Supporting Dividend Level
Healthy Capital Supporting Dividend Level 10.71% 9.98% 9.38% 8.70% 9.09% 9.00% 9.96% 10.81% 10.55% 2013 2014 2015 JUVF Local Peers PA Banking Corp Tangible Equity to Asset Ratio 4.96% 4.82% 4.99% 3.51% 3.65% 3.89% 2.79% 2.82% 2.83% 2013 2014 2015 JUVF Local Peers PA Banking Corp Dividend Yield Sourc
Slide 28: Enhanced Performance Achieved Through Growth
Enhanced Performance Achieved Through Growth First Quarter 2016 vs. First Quarter 2015 Q1 2015 Q1 2016 Change Net Income $924,000 $1,292,000 39.83% Return on Average Assets 0.78% 0.88% 12.82% Return on Average Equity 7.36% 8.50% 15.49% Net Interest Margin (fully tax equivalent) 3.50% 3.58% 2.29% Loa
Slide 29: What is Community Banking?
What is Community Banking? Marcie A. Barber President and Chief Executive Officer
Slide 30: Community definition
“ ” A social group of any size whose members reside in a specific locality, share government, and often have common cultural and historical heritage. COM - MU - NI - TY noun
Slide 31: What is Community Banking?
“ ” Our belief in the value of community banking and our ability to successfully execute a community banking business strategy throughout varied Pennsylvania regions is the essence of how we are building shareholder value. What is Community Banking?
Slide 32: Places
Slide 33: People
Slide 34: Do Communities Change?
Do Communities Chang:
Slide 35: Slide 35
Slide 36: Is Community Banking Changing?
Ils Community Banking Changing?
Slide 37: Changes in banking
Branch Transactions Electronic Services Bankers’ Work Hours Regulation Costs Net Interest Margins Competition
Slide 38: Competition from non-bank sources
Internet banks Credit Unions Government Agencies Corporate Financing Programs Social Media
Slide 39: A few scary facts about social media
A few scary facts about social mé
Slide 40: McKinsey social media value quote
“ ” Improved communication and collaboration from social media could add $1.3 trillion annually in value to the economy and raise knowledge worker productivity 20 - 25% McKinsey Report
Slide 41: Social network users and adoption
● Social Network Users: (Globally) ● 2013 1.73 Billion ● 2017 2.55 Billion ● Among Fortune 500 Companies ● 77% Active Twitter Accounts ● 70% Facebook Accounts ● 69% YouTube Accounts ● 52% of banks plan to invest significant effort into enhancing customer data collection over the next 5 years. ~ Audi
Slide 42: Investors and social media use
● 2/3rds of American adults with an investment account have profiles on Facebook, LinkedIn, or Twitter. ● More than half of investors over 50 access Facebook regularly. ● 75% of Senior Executives watch videos on business sites every week. ● 71% of advisors say their target clients are active on Link
Slide 43: Affluent millennials and social media
● 46% of affluent millennials (AM) perform their own research, make decisions, and execute trades. ● 76% of AM are open to trying financial offerings from non - financial brands. ● 70% of consumers prefer to interact with their bank online. ● AM are 2x more likely to use social media to influence th
Slide 44: eye
eye y?
Slide 45: Social networking like small rural communities
“ ” Social networking is the grouping of individuals into specific groups, like small rural communities or a neigh - borhood subdivision, if you will….. SocialNetworking.com 2015 Like small rural Communities!
Slide 46: Social media icons
Slide 47: Community Banking for our Shareholders
Community Banking for our Shareholders Marcie A. Barber President and Chief Executive Officer
Slide 48: Building Shareholder Value
“ ” Our belief in the value of community banking and our ability to successfully execute a community banking business strategy throughout varied Pennsylvania regions is the essence of how we are building shareholder value. Building Shareholder Value
Slide 49: Enhanced Performance Achieved Through Growth
Enhanced Performance Achieved Through Growth First Quarter 2016 vs. First Quarter 2015 Q1 2015 Q1 2016 Change Net Income $924,000 $1,292,000 39.83% Return on Average Assets 0.78% 0.88% 12.82% Return on Average Equity 7.36% 8.50% 15.49% Net Interest Margin (fully tax equivalent) 3.50% 3.58% 2.29% Loa
Slide 50: Banking on Community
Banking on Community Marcie A. Barber President and Chief Executive Officer
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