JUVF 10-K & 10-Q changes, risk factors and insider trading

Like all financial institutions, the Company's consolidated statement of financial condition is affected by fluctuations in interest rates. Volatility in interest rates can also result in disintermediation, which is the flow of deposits away from financial institutions into direct investments, such as U.S. Government and corporate securities and other investment vehicles, including mutual funds, which, because of the absence of federal insurance premiums and reserve requirements, generallymay pay higher rates of return than bank deposit products. See "Item 7: Management's Discussion of Financial Condition and Results of Operations”.

Capital and liquidity strategies, including the impact of the capital and liquidity requirements implemented by the Basel III standards and future iterations of those standards, may require the Company to maintain higher levels of capital, which could restrict the amount of capital that the Company has available to deploy for income generating and other activities.

There is significant competition among banks in the market areas served by the Company. In addition, as a result of deregulation of the financial industry, the Bank also competes with other providers of financial services, such as savings and loan associations, credit unions, consumer finance companies, securities firms, insurance companies, the mutual funds industry,funds, fintech-based loan and deposit providers, full service brokerage firms and discount brokerage firms, some of which are subject to less extensive regulations than the Company with respect to the products and services they provide. Some of the Company’s competitors have greater resources than the Company and, as a result, may have higher lending limits and may offer other products or services not offered by the Company.

Competition may adversely affect the rates the Company pays on deposits and charges on loans, thereby potentially adversely affecting the Company’s profitability. Competition sometimes requires the Company to lower rates charged on loans more than market rates would otherwise indicate. Competition may also require the Company to pay higher rates on deposits than market rates would otherwise indicate. Thus, although loan demand has improved, intense competition among lenders has continued to place downward pressure on loan yields, also narrowingimpacting the net interest margin.

While the Company attempts to manage its liquidity through various techniques, the assumptions and estimates used do not always accurately forecast the impact of changes in customer behavior. For example, the Company may face limitations on its ability to fund loan growth if customers move funds out of the Bank’s deposit accounts in response to increases in interest rates. In the years following the 2008 financial crisis, even as the general level of market interest rates remained low by historical standards, depositors frequently avoided higher-yielding and higher-risk alternative investments, in favor of the safety and liquidity of non-maturing deposit accounts. These circumstances contributed to significant growth in non-maturing deposit account balances at the Company, and at depository financial institutions generally. In a rising rate environment, customers may become more sensitive to interest rates when making deposit decisions and considering alternative opportunities. This increased sensitivity to interest rates could cause customers to move funds into higher-yielding deposit accounts offered by the Company’s bank subsidiary, require the Company’s bank subsidiary to offer higher interest rates on deposit accounts to retain customer deposits or cause customers to move funds into alternative investments or deposits of other banks or non-bank providers. Technology and other factors have also made it more convenient for customers to transfer low-cost deposits into higher-cost deposits or into alternative investments or deposits of other banks or non-bank providers. Such movement of customer deposits could increase the Company’s funding costs, reduce its net interest margin and/or create liquidity challenges.

The Company and the Bank are extensively regulated under federal and state banking laws and regulations that are primarily intended for the protection of depositors, federal deposit insurance funds and the banking system, butinstead notof for the benefit of shareholders. In general, these laws and regulations establish: the eligible business activities for the Company; certain acquisition and merger restrictions; limitations on intercompany transactions such as loans and dividends; capital adequacy requirements; requirements for anti-money laundering programs; and consumer lending and other compliance requirements. While these statutes and regulations are generally designed to minimize potential loss to depositors and the FDIC insurance funds, they do not eliminate risk, and compliance with such statutes and regulations increases the Company’s expense, requires management’s attention and can be a disadvantage from a competitive standpoint with respect to non-regulated competitors and larger bank competitors.

Compliance with banking statutes and regulations is important to the Company's ability to engage in new activities and to consummate additionalmake acquisitions. Bank regulators are scrutinizingscrutinize banks through longer and more extensive bank examinations in both the safety and soundness and compliance areas. The results of such examinations could result in a delay in receiving required regulatory approvals for potential new activities and transactional matters. If the Company's compliance record would beis determined to be unsatisfactory, such approvals may not be able to be obtained. Federal and state banking regulators also possess broad powers to take supervisory actions, as they deem appropriate. These supervisory actions may result in higher capital requirements, higher deposit insurance premiums and limitations on the Company's operations that could have a material adverse effect on its business and profitability.

Cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information, and adversely impact ourthe Company’s reputation and results of operations.

The Company’s computer systems, software and networks are regularly subject to cyber-attacks, which may result in: unauthorized access; mishandling or misuse of information; loss or destruction of data (including confidential customer information); account takeovers; unavailability of service; computer viruses or other malicious code; disruption or degradation of service; denial of service; and other events. Cyber threats may arise from human error, fraud or malice on the part of employees or third parties, including third party vendors, or may result from accidental technological failure. In addition, the partiesparty’s intent on penetrating our systems may also attempt to fraudulently induce employees, customers, third parties or other users of our systems to disclose sensitive information to gain access to the Company’s data or that of the Company’s customers.

Potential disruption or failure of network and information processing systems and those of third-party vendors may negatively impact ourthe Company’s operations.

The financial services industry is continually undergoing rapid technological change, with frequent introductions of new technology-driven products and services. The effective use of technology increases efficiency and enables financial institutions to better serve customers and to reduce costs. The Company’s future success depends, in large part, upon its ability to address the needs of its customers by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in the Company’s operations. Many of the Company’s financial institution competitors have substantially greater resources to invest in technological improvements, and new payment services developed and offered by non-financial institution competitors pose an increasing threat to the traditional payment services offered by financial institutions. The Company may not be able to effectively implement new technology-driven products and services, be successful in marketing these products and services to its customers or effectively deploy new technologies to improve the efficiency of its operations. The Guiding and Establishing National Innovation for U.S. Stablecoins Act (“Genius Act”) established a regulatory framework for payments with stablecoin. Wide acceptance of stablecoin as a payment vehicle could lead to a reduction in deposits, negatively impacting Juniata’s liquidity position. Failure to successfully keep pace with technological change affecting the financial services industry could have a material adverse impact on the Company’s business, financial condition and results of operations.

General economic conditions may harm ourthe Company’s industry, business and results of operations.

Various aspects of our business could be impacted by general macroeconomic conditions including, among others, inflation, interest rates, supply chain complications and economic uncertainty. Inflation rates in the United States have increased to levels not experienced in several years. These economic uncertainties may be compounded by international conflicts. Inflation, interest ratesconflicts and the related economic volatility could adversely affect our business, financial condition, results of operations and liquidity. These unfavorable economic conditions could, among other things, impact the value of our securities portfolio, impact our net interest margin, adversely impact our customers’ ability to make payments on floating rate loans, if interest rates rise, and increase the risk of default by our customers experiencing financial difficulties and business disruptions.

Difficult economic conditions and real estate markets, including protracted periods of low-growthlow growth and sluggish loan demand, can negatively impact the Company’s income, and result in higher charge-offs as borrowers’ ability to repay is negatively impacted by those conditions.

The Company has established an allowance for credit losses that management believes to be adequate to offsetabsorb expected losses on the Company’s existing loans. However, there is no precise method of estimating credit losses. The Company determines the appropriate level of the allowance for credit losses based on many quantitative and qualitative factors, including, but not limited to, the size and composition of the loan portfolio; changes in risk ratings; changes in collateral values; delinquency levels; historical losses; and economic conditions. In addition, as the Company’s loan portfolio grows, it will generally be necessary to increase the allowance for credit losses through additional credit loss provisions, which will impact the Company’s operating results. If the Company’s assumptions and judgments regarding such matters prove to be inaccurate, its allowance for credit losses might not be sufficient, and additional provisions for credit losses might need to be made. Depending on the amount of such provisions for credit losses, the adverse impact on the Company’s earnings could be material. Also, there can be no assurance that any future declines in real estate market conditions, general economic conditions or changes in regulatory policies will not require the Company to increase its allowance for credit losses, through additional credit loss provisions, which could reduce earnings.

Investment securities losses could negatively impact ourthe Company’s results of operations.

WeThe Company may be negatively impacted by customer and regulatory reaction to unrelated bank failures.

In 2023, four highly publicized bank failures occurred. These banks had elevated levels of uninsured deposits, which may be less likely to remain at the bank over time and less stable as a source of funding than insured deposits. These failures led to volatility and declines in the market for bank stocks and questions about depositor confidence in depository institutions. As a result of these failures, there wascontinues to be an increased customer and regulatory focus on funding and liquidity at financial institutions, the composition of their deposits, including the amountnumber of uninsured deposits, the amount of accumulated other comprehensive loss,losses, capital levels and interest rate risk management. If we are unable to meet the liquidity expectations of our customers and regulatory agencies, it may have a material adverse effect on our financial condition and results of operations.

The CorporationCompany is a holding company and relies on dividends from its subsidiaries for substantially all of its revenue and its ability to make dividends, distributions and other payments.

The information contained in this Annual Report on Form 10-K contains forward looking statements (as such term is defined in the Securities Exchange Act of 1934 and the regulations thereunder). These forward-looking statements may include projections of, or guidance on, the Corporation’sCompany’s future financial performance, expected levels of future expenses, including future credit losses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation’sCompany’s business or financial results. When words such as "may”, "should”, "will”, "could”, "estimates”, "predicts”, "potential”, "continue”, "anticipates”, "believes”, "plans”, "expects”, "future”, "intends”, “projects”, the negative of these terms and other comparable terminology are used in this document, Juniata is making forward-looking statements. Any forward-looking statement made by the Company in this document is based only on Juniata’s current expectations, estimates and projections about future events and financial trends affecting the financial condition of its business based on information currently available to the Company 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. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company’s control, and actual results may differ materially from this forward-looking information and therefore, should not be unduly relied upon. Many factors could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements, including, without limitation:

We are committed to maximizing customer satisfaction. We are sensitive to the expanding array of financial services and financial service providers available to our customers, both locally and globally. We are committed to fostering a complete customer relationship by helping clients identify their current and future financial needs and offering practical and affordable solutions to both. As our customers’ lifestyles change, the channels through which we deliver our services must change as well. One element of the Company’s strategic plan is to provide connection through every means available, wherever we are needed, whether through a stand-alone branch, in-store boutique, ATMbranch or viaATM, online, mobile banking or our newest offering, mobile wallet,and anywhere internet or cell phone signals can be received via online and mobile banking, mobile wallet, or our newest offering, Greenlight, which is a financial literacy app for families, because we are committed to optimizing the customer experience.

We are capable of producing solid results from operations. RecognizingThrough thatdisciplined loan and deposit pricing, we have improved our net interest marginsmargin. haveWe narrowed for banks in general and that these margins may not return to the ranges experienced in the past, wealso focus on the importance of providing fee-generating services in which customers find value. Offering a broad array of services prevents us from becoming too reliant on one form of revenue. It has also been our philosophy to spend conservatively and to implement operating efficiencies where possible to keep non-interest expense from escalating in areas that can be controlled.

We are active corporate citizens, connected to the communities we serve. Although the world of banking has transitioned to global availability through electronics, we believe that our community banking philosophy is not only still valid, but essential. Despite technological advances, banking is still a personal business, particularly in the rural areas we serve. We believe that our customers shop for services and value a relationship with an institution involved in the same community, with the same interests in its prosperity. We have a foundation and a history in each of the communities we serve. Management takes an active role in local business and industry development organizations to help attract and retain commerce in our market area. We provide businesses, large and small, with financial tools and financing needed to grow and prosper. And though these tools are electronically driven, they are custom designed by relationship managers who take time to understand the need. We have always been committed to responsible lending practices. We invest locally by including local municipal bonds in our investment portfolio and participating in funding for such projects as low income and elderly housing. We support charitable programs that benefit the local communities, not only with monetary contributions, but also through the personal involvement of our caring employees.

The allowance for credit losses represents management’s assessment of the estimated credit losses the Company will receive over the life of the loan and is based on forecasted economic scenarios as well as qualitative factors specific to Juniata augmented by industry-wide trends. The methodology for determining the allowance for credit losses is considered a critical accounting policy by management because of the high degree of judgment involved, the subjectivity of the assumptions used and the potential for changes in the forecasted economic environment that could result in changes to the amount of the recorded allowance for credit losses. Changes in underlying factors, assumptions or estimates in the allowance for credit losses could have a material impact on the Company’s future financial condition and results of operations. The allowance for credit losses is maintained at a level believed to be adequate by management to absorb estimated lifetime losses in the loan portfolio. Management’s determination of the adequacy of the allowance for credit losses is based upon an evaluation of relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. This determination is inherently subjective, as it requires materialsignificant estimates. If a loan no longer demonstrates similar risk characteristics to theirthe loan pool,pool to which it is assigned (for a collective risk assessment), it is removed from the pool and an individual assessment will beis performed. The allowance calculation is also supplemented with qualitative reserves that take into consideration the current portfolio and specific risk characteristics, such as changes in policy and/or underwriting standards, portfolio mix, concentration and delinquency levels, as well as changes in environmental conditions, among other factors, that have occurred but are not yet reflected in the quantitative model component.

Net income for Juniata in 20242025 was $6.2$8.0 million, aan decreaseincrease of 5.6%,28.2%, compared to net income of $6.6$6.2 million for 2023.2024. Earnings per share on a fully diluted basis decreasedincreased 5.3%,28.2%, to $1.24,$1.59, in 2024,2025, compared to $1.31$1.24 in 2023.2024. Return on average assets (“ROA”) for the years ended December 31, 20242025 and 2023December 31, 2024 was 0.72%0.92% and 0.79%,0.72%, respectively, while the return on average equity (“ROE”) for 20242025 was 14.19%15.30% compared to 18.20%14.19% in 2023.2024.

The net interest margin, on a fully tax-equivalent basis, decreasedincreased from 2.74% in 2023 to 2.71% in 2024.2024 to 2.98% in 2025. The yield on earning assets increased 3918 basis points, to 4.35%,4.53%, while the cost of funds increaseddecreased 56nine basis points, to 2.31%,2.22%, in 20242025 compared to 2023. Net interest margin compression remained a factor in 2024 as interest-earning assets, such as loans and investments, were originated or repriced at higher rates, increasing the average rate earned on those assets, while the average rate paid on interest bearing liabilities, such as deposits and borrowings, increased at a faster pace.2024.

Juniata strives to attain consistently satisfactory earnings levels each year by protecting the core (repeatable) earnings base through conservative growth strategies that seek to minimize shareholder and balance-sheet risk, while serving its rural Pennsylvania customer base. This approach has helpedgenerally achieveresulted in solid performances year after year. The Company considers the return on assets ratio to be a key indicator of its success and constantly scrutinizes the broad categories of the income statement that impact this profitability indicator.

Net interest income is the amount by which interest income on earning assets exceeds interest expense on interest bearing liabilities. Net interest income is the most significant component of revenue, comprising approximately 80%81% of total revenues (the total of net interest income and non-interest income, exclusive of gains on sales and calls of securities) for 2024.2025. Interest spread measures the absolute difference between average rates earned and average rates paid. BecauseThe some interest earning assets are tax-exempt, an adjustment is made for analytical purposes to present all assets on a fully tax-equivalent basis. Netnet interest margin is expressed as the percentage of net returninterest on average earning assets,income, on a fully tax-equivalenttaxable equivalent basis, andto providesaverage ainterest measureearning assets. To compare the tax-exempt asset yields to taxable yields, amounts are adjusted to the pretax equivalent amounts based on the corporate federal income tax rate of comparability21%. ofThe ataxable financialequivalent institution’sadjustment performance.to net interest income for 2025 was $278,000 compared to $235,000 in 2024.

Net interest income was $22.9$25.4 million for the year ended December 31, 2024.2025. An increase of $1.2 million in both volume of $921,000 and arate, decrease of $684,000 in raterespectively, resulted in an overall increase in net interest income of $237,000,$2.4 million, or 1.0%,10.6%, when compared to net interest income of $22.7$22.9 million for the comparable 20232024 period, which decreasedincreased by $1.4 million,$237,000, or 6.0%,1.0%, over the 2022comparable 2023 period. Average interest earning assets increased $15.7$5.6 million, or 1.9%,0.7%, to $853.9$859.5 million, during the year ended December 31, 2024,2025, compared to the same period in 2023,2024, which increased $50.8$15.7 million, or 6.5%1.9%, compared to the year ended December 31, 2022.2023.

On average, total loans outstanding increased $25.5 million, or 4.8%, in 2025 compared to 2024. Average total loans outstanding increased $34.6 million, or 6.9%, in 2024 compared to 2023. Average total loans outstanding increased $60.3 million, or 13.6%, in 2023 compared to 2022. Average yields on loans increased by 4715 basis points in 20242025 compared to 2023,2024, which was 5247 basis points more than 2022.2023. As shown in Table 2, Rate – Volume Analysis of Net Interest Income, the increase in yield in 20242025 increased interest income on loans by approximately $844,000, while the increase in volume raised interest income by $1.5 million compared to 2024, resulting in a net increase in interest recorded on loans of $2.3 million. During 2024, the increase in the yield on loans increased interest income by approximately $2.4 million, while the increase in volume raised interest income by $2.0 million compared to 2023, resulting in a net increase in interest recorded on loans of $4.4 million. During 2023, the increase in the yield on loans increased interest income by approximately $2.5 million, while the increase in volume raised interest income by $3.0 million compared to 2022, resulting in a net increase in interest recorded on loans of $5.5 million.

Average interest bearing liabilities increaseddecreased by $334,000, or 0.1%, in 2025 compared to 2024, which increased $14.3 million, or 2.4%, compared to 2023. Average borrowings and other interest bearing liabilities decreased by $16.0 million, or 23.3%, in 20242025 compared to 2023,2024, which increasedwas $31.6partially millionoffset comparedby toan 2022.increase in interest bearing deposits of $15.7 million, or 2.9%. Average interest bearing deposits increased by $8.8 million, or 1.6%, in 20242025 compared to 2023,2024, due to an increase in time deposits of $21.4 million, which was partially offset by declines in interest bearing demand and savings deposits as customers sought higher interest rate deposit products. Over the same period, average short-term borrowings increased by $9.0 million, due to an increase in average FRB advances, and average repurchase agreements increased by $5.4 million. These increases were partially offset by a decrease of $8.8 million in average long-term debt due to the maturity of a $15.0 million advance in May 2024. During 2023, average interest bearing deposits increased by $14.9 million compared to 2022, due to an increase in time deposits of $47.7 million, which was partially offset by declines in interest bearing demand and savings deposits. Over the same period, average short-term borrowings increased by $13.7 million, primarily due to increases in overnight FHLB borrowings and FRB advances in 2023 compared to 2022, while average repurchase agreements increased by $4.3 million due to the addition of three new relationships in 2023.

Changes in the volume and rate of total interest bearing liabilities, in the aggregate, increaseddecreased interest expense by $3.7 million$570,000 in 20242025 compared to 2023,2024, while the aggregate changes in volume and rate in 20232024 increased interest expense by $7.1$3.7 million compared to 2022. Both increases in market interest rates and competitive pricing pressure to both retain and attract deposit customers resulted in the increase in interest expense in the 2024 and 2023 periods.2023. The percentage of average interest earning assets funded by average non-interest bearing demand deposits was approximately 23.0% in 2025, compared to 22.8% in 2024, compared toand 23.4% in 2023, and 24.8% in 2022.2023. The total cost to fund earning assets (computed by dividing the total interest expense by the total average earning assets) in 20242025 was 1.66%,1.58%, compared to 1.66% in 2024 and 1.25% in 2023 and 0.43% in 2022.2023.

The Company determined that a provision for credit losses of $534,000$923,000 was appropriate for 2024,2025, compared to a loanprovision lossfor provisioncredit losses of $500,000$534,000 recorded in 2023.2024. The discussion included in the Loans and Allowance for Credit Losses section below titled “Financial Condition” explains the information and analysis used to derive the provision for credit losses for 2024.2025.

The Company remains committed to providing comprehensive services and products to meet the current and future financial needs of its customers. Juniata believes its responsiveness to customers’ needs surpasses that of many of its competitorscompetitors, and it measures its success by the customer acceptance of fee-based services. The Company continually explores avenues to enhance product offerings in areas beneficial to its customers, such as adding new features and services for its electronic banking clientele. Fraud protection services are made available to all consumer depositors. Juniata offers a variety of options for financing to home-buyers that includes a mortgage referral program, providingwhich significantprovides fee income. Juniata also provides alternative investment opportunities through an arrangement with a broker-dealer that integrates the delivery of non–traditional products with Juniata’s Trust and Wealth Management Division. This arrangement enables Juniata to meet the investment needs of a varied customer base and to better identify its clients’ needs for traditional trust services.

Fee-generated non-interest income consists of customer service fees derived from deposit accounts, debit card fee income, trust relationships and sales of non-deposit products. In 2024, revenues from these services totaled $4.4 million, representing an increase of $427,000, or 10.8%, from 2023 revenues with the increase in customer service fees being the main catalyst for the increase followed by a $51,000, or 15.1%, increase in commissions from sales of non-deposit products. Trust fees increased by $3,000decreased in 2025 compared to 2024 versus 2023 due to ana increasedecrease in non-estateestate trustsettlement fees which were partially offset by aan declineincrease in estatenon-estate settlementtrust fees. Variances in trust fees from estate settlements can arise because estate settlements occur sporadically and are not necessarily consistent year to year. Non-estate trust fees are repeatable revenues that generally increase and decrease in relation to movements in interest rates as market values of trust assets under management increase or decrease and as new relationships are established.

As a percentage of average assets, non-interest income was 0.68%0.66% and 0.63%,0.68%, respectivelyrespectively, infor 2024the years ended 2025 and 2023.2024.

Management strives to control non-interest expense where possible to improve operating results. Non-interest expense was $21.0$20.8 million infor 2024,the anyear increaseended ofDecember $1.131, million, or 5.3%2025 compared to 2023.$21.0 million for the year ended December 31, 2024, a decrease of 0.9%. Most significantly impacting non-interest expense in the comparative year end periods was a $568,000, or 6.7%, increasedecrease in employee compensationbenefits expenseexpenses of $307,000, or 12.5%, due to annuala salarydecline increasesin andmedical overtimeclaims payexpenses fromfor the coreyear conversionended inDecember 31, 2025 compared to the firstyear quarterended ofDecember 31, 2024.

As a percentage of average assets, non-interest expense was 2.44%2.40% inand 20242.44%, asrespectively, comparedfor tothe 2.38%years inended 2023.2025 and 2024.

Income tax expense for 20242025 was $979,000$1.4 million compared to $970,000$979,000 in 2023.2024. The increase was due to more taxable income in the 2025 period. Juniata qualifies for a federal tax credit for investments in low-income housing partnerships. The tax credit decreasedwas from$329,000 $366,000for inboth the year ended December 31, 20232025 to $329,000 inand the year ended December 31, 2024 due to the completion of the amortization period for one of Juniata’s low-income housing partnership investments in January 2023.2024.

Exclusive of the tax credit, the Company recorded income tax expense of $1.7 million in 2025 and $1.3 million in both 2024 and 2023.2024. Juniata’s effective tax rate in 20242025 was 13.6%14.8% versus 12.8%13.6% in 2023.2024. See Note 13 of The Notes to Consolidated Financial Statements for further information on income taxes.

Overall, total average assets increased by $20.8$10.1 million, or 2.5%,1.2%, for the year 20242025 compared to 2023.2024. The increase in 20242025 was primarily due to an increase in taxable loans, which were funded by increasescash inflows timefrom deposits,taxable securities, as well as short-termtime deposits and interest bearing and noninterest bearing demand deposits. Average short- and long-term borrowings declined by $7.4 million and repurchase$9.1 agreements.million, respectively, in 2025 compared to 2024 as deposits, rather than borrowings, were used for funding needs. The ratio of average earning assets to total average assets decreased from 99.9% in 2023 to 99.3% in 2024.2024 to 98.8% in 2025. The ratio of average interest bearing liabilities to total average assets decreased from 71.5% in 2023 to 71.4% in 2024.2024 to 70.6% in 2025. Although Juniata’s investment in low incomelow-income elderly housing projects and its bank owned life insurance and annuities are not classified as interest-earning assets, income is derived directly from those assets. These instruments represented 1.9% of total average assets in 20242025 and 2023.2024. Total average stockholders’ equity increased $7.7$8.3 million as of December 31, 20242025 compared to December 31, 20232024 primarily due to a decrease in accumulated other comprehensive loss due to the amortization of unrealized holding losses on previously transferred HTM securities and the net change in unrealized AFS security losses, as well as an increase in retained earnings. A more detailed discussion of the Company’s earning assets and interest bearing liabilities will follow in the Sections titled “Loans”, “Investments” and “Deposits”.

During 2025, all loan classes increased except the personal loan class. During 2024, the commercial, financial and agricultural, real estate – commercial and real estate – mortgage loan classes increased, offset by declines in the real estate – construction, obligations of states and political subdivisions and personal loan classes. During 2023, all loan classes, except for obligations of states and political subdivision loans, increased. Continued emphasis is placed on responsiveness and personal attention given to customers, which management believes differentiates the Bank from its competition. Nearly all commercial loans are either variable or adjustable rate loans, while non-mortgage consumer loans generally have fixed rates for the duration of the loan.

Juniata recorded a provision for credit losses of $923,000 in 2025 compared to a provision for credit losses of $534,000 in 2024 compared to a loan loss provision of $500,000 in 2023.2024. Loan growth of 1.6%12.6% as of December 31, 20242025 compared to December 31, 20232024 was athe primary factor infor the increase in the provision for credit losses for the year ended December 31, 2024.losses. Net charge-offs wereas 0.01%a percentage of average loans outstanding forwere the year ended 20240.00% and net recoveries were 0.01% of average loans outstanding for the yearyears ended 2023.2025 and 2024, respectively.

At December 31, 2024,2025, non-performing loans (as defined in Table 4 below), as a percentage of the allowance for credit losses, were 9.9%,9.0%, compared to 87.2%9.9% at December 31, 2023.2024. Non-performing loans wereas 0.12%a percentage of loans outstanding were 0.11% and 0.12% as of December 31, 20242025 and 0.94% of loans outstanding as of December 31, 2023.2024, Non-accrual loans decreased at December 31, 2024 compared to December 31, 2023 due to the payoff of a $4.9 million non-accrual participated real-estate construction loan in 2024.respectively. All non-performing loans were collateralized with real estate at December 31, 2024,2025, except three non-accrual loans totaling $105,000.$148,000.

When a loan is placed on non-accrual status, all unpaid interest credited to income is reversed against current period income. Interest received on nonaccrualnon-accrual loans generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, accruals are resumed on loans only when the obligation is brought fully current with respect to interest and principal, has performed in accordance with the contractual terms for a reasonable period and the ultimate collectability of the total contractual principal and interest is no longer in doubt. The Company’s nonaccrualnon-accrual and charge-off policies are the same, regardless of the loan type. During 2024,the year ended December 31, 2025, gross interest income that would have been recorded if loans on non-accrual status had been current was $101,000,$100,000. ofThe whichCompany $74,000recognized wasno collectedinterest andincome includedon innon-accrual netloans income.during the year ended December 31, 2025.

Management estimates the allowance balance using relevant available information, from internal and external sources, related to past events, current conditions and reasonable and supportable forecasts of certain macro-economic variables. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, lending personnel, delinquency trends, credit concentrations, loan review results, changes in collateral values, as well as the impact of changes in the regulatory and business environment or other relevant factors.

The Company estimates losses over a four quarter forecast period using Federal Open Market Committee (“FOMC”) estimates for real GDP and unemployment rate. Based on the final values in the forecast and the uncertainty of a post-pandemic economic recovery, management has elected to revert to historical loss experience overfor periods beyond 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 Company recorded net charge-offs of $28,000$23,000 in 20242025 compared to net recoveriescharge-offs of $39,000$28,000 in 2023.2024. The allowance for credit losses at December 31, 20242025 increased by 8.9%14.6% over the allowance for credit losses at December 31, 20232024 due primarily to recording net charge-offs and loan growth of 1.6%12.6% in 2024, as well as updating the loss driver analysis in the third quarter of 2024.2025. Management’s analysis indicated that the allowance for credit losses of $6.2$7.1 million at December 31, 20242025 was adequate.

The following tables show how the allowance for credit losses is allocated among the various types of outstanding loans and the percentpercentage of loans by type to total loans.

The Company periodically insures the lives of certain bank officers to provide split-dollar life insurance benefits to some key officers and to offset the cost of providing post-retirement benefits through non-qualified plans. Some annuities are also owned to provide cash streams that match certain post-retirement liabilities. The $373,000$733,000 increase in cash surrender value of the Company’s bank owned life insurance (“BOLI”) and annuities was due primarily to earnings and the purchase of additional insurance related to a 1035 ExchangesExchange for twoan active participantsparticipant to take advantage of increased interest rates. See Note 7 of The Notes to Consolidated Financial Statements.

On November 30, 2015, the Company completed its acquisition of FNBPA. Goodwill recorded on the acquisition was $3.4 million as of December 31, 20242025 and 2023.2024. In addition, a core deposit intangible in the amount of $303,000 was recorded and is being amortized over a ten-year period using a sum of the year’s digits basis. Core deposit intangible amortization expense recorded in 20242025 was $11,000$5,000 and is estimated to be $5,000 in 2025. The core deposit intangible will bewas fully amortized in 2025. Core deposit and other intangible assets, net of amortization, was fully amortized as of December 31, 2025 and $5,000 as of December 31, 2024 and $16,000 as of December 31, 2023.2024.

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

Total assets as of MarchJune 31,30, 2026 were $901.9$918.9 million, an increase of $6.6$23.7 million, or 0.7%,2.6%, compared to total assets of $895.3 million at December 31, 2025. ThisCash increaseand wascash primarilyequivalents dueincreased toby an $8.7$2.6 million, or 1.5%, increase in total loans22.3%, as of MarchJune 31,30, 2026 compared to December 31, 2025, withwhile thetotal increasedebt fundedsecurities decreased by the $6.8$13.6 million, or 0.9%,5.7%, increaseover inthe totalsame depositsperiod as principal paydowns on the mortgage-backed securities portfolio, as well as cash flowsproceeds from thematurities reductionand incalled securities, were used to fund loan growth rather than being reinvested into the debt securities portfolioportfolio. ofTotal $2.9loans increased by $34.9 million, or 1.2%,5.8%, as of MarchJune 31,30, 2026 compared to year-end 2025.2025 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 $3.4$6.1 million, or 6.8%,12.2%, as of MarchJune 31,30, 2026 compared to Decemberyear-end 31, 2025,2025 primarily due to a decrease in repurchase agreement accountbalances balances.resulting Atfrom March 31, 2026, stockholders’ equity increased $2.7 million, or 4.7%, compared to year-end 2025 due to an increasefluctuations in retainedcustomers’ earnings and a decline in other comprehensive losses.accounts.

The table below illustrates the changes in deposit volumes by type of deposit as of MarchJune 31,30, 2026 compared to December 31, 2025.

The following table shows the change in loan balances by loan class between December 31, 2025 and MarchJune 31,30, 2026.

A summary of the activity in the allowance for credit losses for the threesix month periodsmonths ended MarchJune 31,30, 2026 and 2025, respectively, is presented below.

As of MarchJune 31,30, 2026, there were $16.9$17.7 million of loans classified as special mention compared to $17.5 million at December 31, 2025, $165,000$177,000 of loans classified as substandard at MarchJune 31,30, 2026 compared to $507,000 at December 31, 2025, and $124,000 of loans classified as doubtful at MarchJune 31,30, 2026 compared to $128,000 at December 31, 2025.

Management believes the allowance for credit losses carried was adequate to cover forecasted expected credit losses as of MarchJune 31,30, 2026. Management also believes the Company has sufficient liquidity and capital to absorb losses that may occur but continues to closely monitor the financial strength of borrowers and their ability to comply with repayment terms.

The following table summarizes the Bank’s non-performing loans on MarchJune 31,30, 2026 compared to December 31, 2025.

The ACL is a valuation account that is deducted from thea loans’ amortized cost basis to present the net amount expected to be collected on the loans. The ACL requires a projection of credit losses estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a loan modification will be executed with an individual borrower, or the extension or renewal options are included in the original or modified contract at the reporting date and not unconditionally cancellable by the Company. LoansA areloan is charged off against the allowance when management believes the uncollectability of a loan balance is confirmed.confirmed Expectedand recoveriesthe doexpected recovery does not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. The companyCompany has identified the following portfolio segments: commercial, financial and agricultural; real estate – commercial; real estate -– construction: 1-41–4 family residential construction; real estate -– construction: other construction; real estate – mortgage; obligations of states and political subdivisions and personal loans.

Loans that do not share risk characteristics are evaluated on an individual bases.basis. Loans evaluated individually are excluded from the collective evaluation. When management determines that foreclosure is probable, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.

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 MarchJune 31,30, 2026 and December 31, 2025.

In addition to the quantitative analysis, a qualitative analysis is performed each quarter to determine additional general reserves on loan portfolios that are not individually analyzed for variousseveral factors. The overall qualitative factors are based on the following risk factors:

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 $3.6$3.9 million at MarchJune 31,30, 2026 and $3.4 million at December 31, 2025.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

Net income for the three months ended MarchJune 31,30, 2026 was $2.8$2.5 million, an increase of $789,000,$611,000, or 39.3%,32.0%, compared to the three months ended MarchJune 31,30, 2025. BasicBoth basic and diluted earnings per share were $0.56 and $0.55, respectively,$0.50 for the three months ended MarchJune 31,30, 2026 compared to both basic and diluted earnings per share of $0.40$0.38 for the comparable 2025 period.

Annualized return on average assets for the three months ended MarchJune 31,30, 2026 was 1.251.11 %, compared to the annualized return on average assets of 0.94%0.89% for the same period in 2025. For the three months ended MarchJune 31,30, annualized return on average equity was 19.04%16.51% in 2026 compared to 16.55%15.01% in the 2025 period.

The discussion that follows further explains changes in the components of net income when comparing the three months ended MarchJune 31,30, 2026 to the three months ended MarchJune 31,30, 2025.

Net interest income was $7.3$7.4 million for the three months ended MarchJune 31,30, 2026, an increase of $1.5$1.2 million, or 25.5%,20.0%, compared to $5.8$6.2 million for the three months ended MarchJune 31,30, 2025.

Average interest earning assets increased 4.7%,5.2%, to $882.6$894.1 million, for the three months ended MarchJune 31,30, 2026,2026 compared to the same period in 2025, due to an increase of $65.9$72.8 million, or 12.2%,13.3%, in average loans, which was partially offset by a decrease of $26.4$29.3 million, or 8.8%,9.9%, in average investment securities as cash flows from the securities portfolio were used to fund loan growth rather than being reinvested into the securities portfolio.securities. Average interest bearing liabilities increased by $24.2$27.4 million, or 4.0%,4.5%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, primarilywith duethe to anlargest increase being in total average interest bearing depositsdemand ofdeposits, $23.8which increased $13.5 million, or 4.3%.6.3%.

The yield on earning assets increased 4430 basis points, to 4.86%,4.80%, for the three months ended MarchJune 31,30, 2026 compared to same period last year, driven by an increase in loan yields of 3913 basis points, while the cost to fund interest earning assets with interest bearing liabilities decreased 1514 basis points, to 2.11%.2.07%.

The net interest margin, on a fully tax equivalent basis, increased from 2.83%2.95% for the three months ended MarchJune 31,30, 2025 to 3.39%3.36% for the three months ended MarchJune 31,30, 2026.

The table below shows the net interest margin on a fully tax-equivalent basis for the three months ended MarchJune 31,30, 2026 and 2025.

Juniata recorded a provision for credit losses of $180,000$376,000 for the three months ended MarchJune 31,30, 2026 compared to a provision for credit losses of $104,000$349,000 for the three months ended MarchJune 31,30, 2025. This increase is due primarily to an increase in total loans outstanding between the comparable periods.

As a percentage of average assets, annualized non-interest income was 0.64%0.61% for the three months ended MarchJune 31,30, 2026 compared to 0.63%0.69% for the three months ended MarchJune 31,30, 2025.

Non-interest expense was $5.2$5.4 million for the three months ended MarchJune 31,30, 2026, an increase of $526,000,$361,000, or 11.2%,7.1%, compared to the three months ended MarchJune 31,30, 2025. Most significantly impacting non-interest expense in the comparative three monththree-month periods were increases in employee compensation and benefits expenses of $269,000$176,000 and $195,000,$192,000, respectively. TheAlso primary drivers forimpacting the comparative three-month periods was an increase of $54,000 in employee compensationoccupancy expense weredue regular merit increases and additional lending staff, whileto increased medicalmaintenance claimsexpense, expenseswhich was theoffset primaryby drivera fordecrease theof increase$82,000 in employeeother benefitsnon-interest expenseexpenses, forprimarily thedue threeto monthsrecording endeda March$62,000 31, 2026 comparedcredit to the threeprovision monthsfor endedunfunded March 31, 2025. Partially offsetting these increases between the comparative three month periods was a decline of $40,000 in occupancy expense.commitments.

As a percentage of average assets, annualized non-interest expense was 2.33%2.39% for the three months ended MarchJune 31,30, 2026 compared to 2.20%2.36% for the three months ended MarchJune 31,30, 2025.

An income tax provision of $563,000$478,000 was recorded during the three months ended MarchJune 31,30, 2026 compared to an income tax provision of $371,000$329,000 recorded during the three months ended MarchJune 31,30, 2025. The increase between three monththree-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 partnerships.partnership. The tax credit was $82,000$83,000 for both the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025. For the three months ended MarchJune 31,30, 2026, the tax credit lowered the effective tax rate from 19.2%18.7% to 16.8%15.9% compared to the same period in 2025, when the tax credit lowered the effective tax rate from 19.0%18.4% to 15.6%.14.7%.

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 threesix months ended MarchJune 31,30, 2026, overnight borrowings from the FHLB averaged $41.7$38.7 million. As of MarchJune 31,30, 2026, the Company had $36.4$33.1 million in short-term borrowings at the FHLB, with a remaining unused borrowing capacity of $260.2$232.0 million at the FHLB. Borrowings from the FHLB are secured by the Company’s qualifying loans at the FHLB.

As of MarchJune 31,30, 2026, the Company had no outstanding borrowings at the Federal Reserve Bank with an unused borrowing capacity of $49.2$41.9 million.

The Company has internal authorization for brokered deposits of up to $118.3$120.9 million. As of MarchJune 31,30, 2026, the Company had no brokered deposits.

In addition, the Company also has an unsecured line of credit with a correspondent bank totaling $10.0 million, of which no funds were drawn at MarchJune 31,30, 2026.

At MarchJune 31,30, 2026, the Company had $10.1$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.

At MarchJune 31,30, 2026, uninsured deposits represented 15.8%14.6% of the Company’s total deposits. This amount excludes deposits of state and political subdivisions because the Company pledges debt securities for deposits in excess of the $250,000 FDIC insurance limit in the case of those deposits.