UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K/A
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2004 Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition period from ________________ to ________________
Commission File Number 0-13232
JUNIATA VALLEY FINANCIAL CORP.
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(Exact name of registrant as specified in its charter)
Pennsylvania 23-2235254
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Bridge & Main Streets, PO Box 66, Mifflintown, PA 17059-0066
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (717) 436-8211
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SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT:
Common Stock, Par Value $1.00 Per Share
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(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. (X)
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes X No
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The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of June 30, 2004.
Common Stock, $1.00 Par Value - $79,295,179
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Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of January 31, 2005.
Common Stock, $1.00 Par Value, 2,280,630 shares
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1
JUNIATA VALLEY FINANCIAL CORP.
AMENDMENT 1 TO THE ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2004
EXPLANATORY NOTE
As permitted by the Order of the Securities and Exchange Commission Granting an
Exemption from Specified Provisions of Exchange Act Rules 13a-1 and 15d-1
(Release No. 34-50754, November 30, 2004), we omitted "Management's Report on
Internal Control over Financial Reporting" and the related "Attestation Report
of the Registered Public Accounting Firm" from our Annual Report on Form 10-K
for the year ended December 31, 2004, filed with the U.S. Securities and
Exchange Commission on March 16, 2005. We are filing this Amendment to our
Annual Report on Form 10-K to amend Item 9A and include the reports required by
Item 308 of Regulation S-K.
This Amendment does not affect the original financial statements or footnotes as
originally filed. This Amendment does not reflect events occurring after the
original filing of the Form 10-K, and does not modify or update disclosures
therein in any way other than as required to amend Item 9A as set forth below.
Accordingly, the Form 10-K/A should be read in conjunction with our other
filings made with the Securities and Exchange Commission subsequent to the
filing of the original Annual Report on Form 10-K, including any amendments to
those filings.
2
ITEM 9A. CONTROLS AND PROCEDURES
(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
The Corporation's Chief Executive Officer and Chief Financial Officer, after
evaluating the effectiveness of the Corporation's disclosure controls and
procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934 (Exchange Act) as of the end of the period
covered by this report, have concluded that, based on such evaluation, the
Corporation's disclosure controls and procedures were not effective in
reporting, on a timely basis, information required to be disclosed by the
Corporation in the reports that the Corporation files or submits under the
Exchange Act due to a deficiency in the Corporation's disclosure controls and
procedures. The Corporation did not discover until the first quarter of 2005
that the Corporation is an accelerated filer and, as such, was required to file
its Annual Report on Form 10-K within 75 days after the Corporation's December
31 year end and was required to include in its Annual Report on Form 10-K a
report by management and an attestation by the Corporation's independent
registered public accounting firm on the adequacy of the Corporation's internal
control over financial reporting. During the first quarter of 2005, we have
implemented additional disclosure controls and procedures in order to remediate
this deficiency and we are continuing to assess additional controls that may be
required to remediate this deficiency.
(B) MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of the Corporation is responsible for establishing and
maintaining adequate internal control over financial reporting. Management's
internal control system was designed to provide reasonable assurance to the
Corporation's management and Board of Directors regarding the preparation and
fair presentation of published financial statements in accordance with U.S.
generally accepted accounting principles. All internal control systems, no
matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation.
An internal control material weakness is a significant deficiency (as defined in
PCAOB Auditing Standard No.2), or a combination of significant deficiencies,
that results in there being more than a remote likelihood that a material
misstatement of the annual or interim financial statements will not be prevented
or detected on a timely basis by management or employees in the normal course of
performing their assigned functions.
In order to ensure that the corporation's internal control over financial
reporting is effective, management regularly assesses such controls and did so
most recently for its financial reporting as of December 31, 2004. This
assessment was based on criteria for effective internal control over financial
reporting described in Internal Control - Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). In
performing this assessment, management has identified the material weaknesses in
internal control over financial reporting listed below:
o Because the Corporation was not aware until the first quarter of 2005
that the Corporation is an accelerated filer, the Corporation was not
able to complete its documentation and testing of its internal
controls over financial reporting in a timely manner in order to
permit our independent registered public accounting firm, Beard Miller
Company, LLC (Beard Miller), sufficient time to perform its audit of
management's assessment and its audit of effectiveness of the
Corporation's internal control. Accordingly, Beard Miller has issued a
disclaimer of opinion on both management's assessment and the
effectiveness of the Corporation's internal control over financial
reporting.
o The Corporation lacks sufficient personnel in the Finance Department
to review information prepared by management and to assure that the
information is calculated correctly and properly disclosed in the
financial statements and related footnotes. Greater expertise is
needed in certain complex areas of financial reporting, including the
calculation of income taxes, stock options and employee benefit plans.
3
As a result of these two material weaknesses in the Corporation's internal
control over financial reporting, management has concluded that the
Corporation's internal control over financial reporting , as of December 31,
2004, was not effective based on the criteria set forth by COSO in Internal
Control - Integrated Framework.
The Corporation is now aware of its accelerated filer status. In the future, it
will allow sufficient time for completion of the appropriate documentation and
testing of its internal control over financial reporting and for the accounting
firm to perform its audit of management's assessment. The Corporation,
therefore, believes that the first identified material weakness will not recur.
Management has developed a plan to resolve the material weakness relative to
personnel in its Finance Department. Management has requested proposals from
independent accounting firms for assistance in the review of financial
information, particularly with respect to non-routine, major and complex
financial transactions. Management will be interviewing independent accounting
firms in the coming weeks in order to remedy this weakness at the earliest
possible time. The Corporation notes that while there were weaknesses in its
internal control, the consolidated financial statements for 2004 were prepared
in accordance with generally accepted accounting principles and our independent
registered public accounting firm rendered an opinion that our financial
statements presented fairly, in all material respects, the consolidated
financial position of the Corporation as of December 31, 2004.
4
(C) REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We were engaged to audit management's assessment included in the accompanying
Management's Report on Internal Control Over Financial Reporting that Juniata
Valley Financial Corp. and its wholly-owned subsidiary, The Juniata Valley Bank,
(The "Company") maintained effective internal control over financial reporting
as of December 31, 2004 based on the criteria established in Internal Control -
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO). The Company's management is responsible for
maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting.
A material weakness is a control deficiency, or combination of control
deficiencies, that result in more than a remote likelihood that a material
misstatement of the annual or interim financial statements will not be prevented
or detected. The following material weaknesses have been identified and included
in management's assessment:
The Company had inadequate controls related to its assessment of the
effectiveness of the Company's internal control over financial reporting as
management was not aware until the first quarter of 2005 that the Company
was an accelerated filer. Management was not able to complete their
assessment in a timely manner and completed their assessment on March 31,
2005, which did not allow an adequate timeframe for us to complete our
audit of management's assessment on the effectiveness of the Company's
internal control over financial reporting.
In addition, the Company lacks sufficient personnel in the finance
department to review information prepared by management and to assure that
the information is calculated correctly and properly disclosed in the
financial statements and related footnotes. Greater expertise is needed in
certain complex areas of financial reporting, including the calculation of
income taxes, stock options and employee benefit plans.
These material weaknesses were considered in determining the nature, timing and
extent of audit tests applied in our audit of the 2004 consolidated financial
statements, and this report does not affect our report dated February 14, 2005
on those consolidated financial statements.
A company's internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial statements.
5
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Since management was not able to complete its assessment on internal control
over financial reporting as of December 31, 2004, and we were unable to apply
other procedures to satisfy ourselves as to the effectiveness of the Company's
internal control over financial reporting, the scope of our work was not
sufficient to enable us to express, and we do not express, an opinion either on
management's assessment or on the effectiveness of the Company's internal
control over financial reporting. The inability of management to complete its
assessment as of December 31, 2004 represents a material weakness in the process
of formulating management's assessment on internal control.
We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated balance sheets of
Juniata Valley Financial Corp. and its wholly-owned subsidiary, The Juniata
Valley Bank as of December 31, 2004 and 2003 and the related consolidated
statements of income, stockholders' equity and cash flows for each of the three
years in the period ended December 31, 2004. Our report dated February 14, 2005,
expressed an unqualified opinion on these financial statements.
We do not express an opinion or any other form of assurance on management's
statements referring to post year-end remediation to address material
weaknesses.
/s/ Beard Miller Company LLP
Pittsburgh, Pennsylvania
April 22, 2005
6
PART IV
ITEM 15. EXHIBITS AND FINANCIAL SCHEDULES
(a) Financial Statements
None
(b) Exhibit Index
23. Consent of Beard Miller Company LLP.
31.1 Rule 13a-14(a)/15d-14(a) Certification of Francis J. Evanitsky,
Chief Executive Officer
31.2 Rule 13a-14(a)/15d-14(a) Certification of Linda L. Engle, Chief
Financial Officer
(c) Financial Statement Schedules
None
7
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
JUNIATA VALLEY FINANCIAL CORP. (REGISTRANT)
Date: May 2, 2005
By /s/
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Francis J. Evanitsky
Director, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
/s/ /s/
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Ronald H. Witherite Joe E. Benner
Vice Chairman, Secretary Director
Date: May 2, 2005 Date: May 2, 2005
/s/ /s/
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Jan G. Snedeker A. Jerome Cook
Director Director
Date: May 2, 2005 Date: May 2, 2005
/s/ /s/
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Don E. Haubert Martin L. Dreibelbis
Director Director
Date: May 2, 2005 Date: May 2, 2005
/s/ /s/
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John A. Renninger Dale G. Nace
Director Director
Date: May 2, 2005 Date: May 2, 2005
/s/ /s/
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Francis J. Evanitsky Harold B. Shearer
Director, President & CEO Director
Date: May 2, 2005 Date: May 2, 2005
8
/s/ /s/
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Philip E. Gingerich, Jr. Charles L. Hershberger
Director Director
Date: May 2, 2005 Date: May 2, 2005
/s/ /s/
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Marshall L. Hartman Robert K. Metz, Jr.
Director Director
Date: May 2, 2005 Date: May 2, 2005
/s/ /s/
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Timothy I. Havice Richard M. Scanlon, DMD
Chairman Director
Date: May 2, 2005 Date: May 2, 2005
/s/
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Linda L. Engle
Chief Financial Officer
Chief Accounting Officer
Date: May 2, 2005
9