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INDEPENDENT AUDITOR'S REPORT
To the Plan Administrator
Juniata Valley Financial Corp.
Employee Stock Purchase Plan
Mifflintown, Pennsylvania
We have audited the accompanying statement of net assets
available for benfits of Juniata Valley Financial Corp. Employee
Stock Purchase Plan as of June 30, 1997 and the related statement
of changes in net assets available for benefits for the year then
ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for benefits of the Juniata Valley Financial Corp.
Employee Stock Purchase Plan as of June 30, 1997 and the changes
in net assets available for benefits for the year then ended in
comformity with generally accepted accounting principles.
Reading, Pennsylvania
October 28, 1997
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JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY
EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
ASSETS JUNE 30, 1997
Cash and cash equivalents $ -
Investment in Juniata Valley
Financial Corp. common stock -
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Net assets available for benefits $ -
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See Notes to Financial Statements.
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JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY
EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended June 30, 1997
Interest income $ 592
Employee contributions 114,537
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Total additions 115,129
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Distributions to participants 937
Distribution of shares of common stock of Juniata
Valley Financial Corp. to participants
(3,600 shares at $31.72 per share) 114,192
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Total deductions 115,129
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Net increase -
Net assets available for benefits
Beginning of year -
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End of year $ -
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See Notes to Financial Statements.
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JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY
EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting:
The accompanying financial statements have been
prepared on the accrual basis of accounting.
Estimates:
The preparation of financial statements in conformity
with generally accepted accounting principles requires
the Plan Administrator to make estimates and
assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results may differ
from those estimates.
PLAN DESCRIPTION
The Corporation established the Employee Stock Purchase Plan
(Plan) effective as of July 1, 1996. The purpose of the
Plan is to provide employees of the Bank the opportunity to
purchase stock of Juniata Valley Financial Corp.
(Corporation) and to acquire a proprietary interest in the
Corporation. Under the Plan, each eligible employee is
granted options to purchase stock during successive yearly
offerings. The Plan is administered by a Committee
appointed by the Board of Directors.
Employees of the Bank are eligible to participate in the
Plan after ninety days of service and must be employed at
the Bank as of the stock issuance date in order to purchase
the stock. Enrollment occurs on July 1 of each plan year.
Eligible employees, upon enrollment, choose to have payroll
deductions at rates from 2% to 10% of their compensation.
The payroll deductions are deposited into restricted
individual savings accounts, which earn interest computed at
the regular statement savings account rate of the Bank.
Voluntary cash contributions are also permitted by the Plan,
provided that the total amount available to purchase stock
per participant does not exceed $25,000. Contributions
cease as of the termination date of each plan year (May 15).
When a participant terminates employment at the Bank, their
participation in the Plan will automatically terminate. The
participant will not be entitled to purchase any shares
through the Plan and the amount of contributions made to the
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PLAN DESCRIPTION (CONTINUED)
plan will be returned to the participant. Should the
termination of the employee occur because of the employee's
death, the beneficiary may elect to withdraw the
contributions or to exercise the participants's option for
the purchase of the stock on the next termination date (May
15 of each year). Voluntary withdrawals of the
participant's entire balance are permitted, as approved by
the Chief Financial Officer of the Bank.
The Plan permits participants to acquire stock of the
Corporation at an option price of between 85% and 100% of
the fair market value of the stock. The discount approved
by the Board of Directors was 10% during the current plan
year, which resulted in a purchase price of $31.72 per share
based upon the fair market value as of the commencement date
of the offering (July 1).
The stock may be purchased directly from the Corporation,
either through authorized but unissued stock or stock held
in the treasury of the Corporation, or on the open market,
or by a combination of both. The Plan purchased 3,600
shares of stock which were issued in June 1997 to the
participants of the Plan. Fractional shares are not
distributed, therefore, excess cash in each participant's
account is returned to the participant.
The Corporation may terminate or amend the Plan at any time.
Additional information about the Plan agreement can be
obtained from the Chief Financial Officer of the Bank.
ADMINISTRATIVE EXPENSES
Fees for legal, accounting and other services are paid by
the Corporation and are based upon customary and reasonable
rates for such services.
INCOME TAX STATUS
The Plan administrator believes that the Plan is currently
designed and being operated in compliance with the
applicable requirements under Section 423 of the Internal
Revenue Code of 1986, as amended. Therefore, the Plan
administrator believes that the Plan was qualified and was
tax-exempt as of the financial statement date.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustess (or other persons who administer the Plan)
have duly caused this annual report to be signed by the
undersigned hereunto duly authorized.
JUNIATA VALLEY FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Date:_____________________ By:___________________________
A. Jerome Cook
President and C.E.O.
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Index to Exhibit
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Exhibit No.
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23 Consent of Beard & Company, Inc., independent auditors
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Exhibit 23
CONSENT OF BEARD & COMPANY, INC., INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-15150) pertaining to the Juniata
Valley Financial Corp. Employee Stock Purchase Plan, of the
financial statements of the Juniata Valley Financial Corp.
Employee Stock Purchase Plan included in this Annual Report (Form
11-K) for the year ended June 30, 1997.
BEARD & COMPANY, INC.
Reading, Pennsylvania
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