16. STOCKHOLDERS’ EQUITY AND REGULATORY MATTERS

The Company is authorized to issue 500,000 shares of preferred stock with no par value. The Board has the ability to fix the voting, dividend, redemption and other rights of the preferred stock, which can be issued in one or more series. No shares of preferred stock have been issued.

The Company has a dividend reinvestment and stock purchase plan. Under this plan, additional shares of Juniata Valley Financial Corp. stock may be purchased at the prevailing market prices through reinvested dividends and voluntary cash payments, within limits. To the extent that shares are not available in the open market, the Company has reserved common stock to be issued under the plan. Any adjustment in capitalization of the Company will result in a proportionate adjustment to the reserved shares for this plan. At December 31, 2019, 141,887 shares were available for issuance under the Dividend Reinvestment Plan.

The Company periodically repurchases shares of its common stock under a share repurchase program approved by the Board of Directors. Repurchases have typically been through open market transactions and have complied with all regulatory restrictions on the timing and amount of such repurchases. Shares repurchased have been added to treasury stock and accounted for at cost. These shares may be reissued for stock option exercises, stock awards, employee stock purchase plan purchases, to fulfill dividend reinvestment program needs and to supply shares needed for exchange in an acquisition. During 2019 and 2018, 21,508 and 3,416 shares, respectively, were repurchased in conjunction with this program. In 2019, 800 issued shares were transferred to treasury due to forfeitures of restricted stock awards. Remaining shares authorized in the program were 148,266 as of December 31, 2019.

The Bank is subject to risk-based capital standards by which banks are evaluated in terms of capital adequacy. These regulatory capital requirements are administered by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of various forms of capital. The requirements were revised and became effective on a phased-in basis beginning January 1, 2015 and included the establishment of a Common Equity Tier I level. The ratio of the Bank’s Total, Tier I and Common Equity Tier I capital (as defined in the regulations) to risk-weighted assets (as defined in the regulations), and Tier I capital (as defined in the regulations) as a percentage of average assets (as defined in the regulations) are set forth in the table below. Amounts recorded to accumulated other comprehensive income are not included in regulatory capital. These risk-based capital rules require that banks and holding companies maintain a “capital conservation buffer” of 250 basis points in excess of the “minimum capital ratio”. The minimum capital ratio is equal to the prompt corrective action adequately capitalized threshold ratio. The capital conservation buffer was fully phased in as of January 1, 2019. The maximum buffer for 2018 was 1.875% and was 2.5% for 2019 and thereafter. Failure to maintain the required capital conservation buffer will result in limitations on capital distributions and on discretionary bonuses to executive officers. Management believes, as of December 31, 2019 and 2018, that the Bank met all capital adequacy requirements to which they were subject.

As of December 31, 2019, the most recent notification from the regulatory banking agencies categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as “well capitalized”, the Bank must maintain minimum Total risk-based, Tier I risk-based, Common Equity Tier I risk-based and Tier I leverage ratios as set forth in the table. To the knowledge of management, there are no conditions or events since these notifications that have changed the Bank’s category. The table below provides a comparison of the Bank’s risk-based capital ratios and leverage ratios to the minimum regulatory requirements as of the dates indicated.


													Minimum
													Regulatory
													Requirements
									Minimum				to be "Well
									Capital				Capitalized"
					Minimum Requirement				Adequacy				under Prompt
					for Capital				with Capital				Corrective Action
The Juniata Valley Bank	Actual				Adequacy Purposes				Buffer				Provisions
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2019:
Total Capital (to Risk Weighted Assets)	$	65,861	15.85	%	$	33,244	8.00	%	$	43,633	10.50	%	$	41,555	10.00	%
Tier 1 Capital (to Risk Weighted Assets)		62,900	15.14	%		24,933	6.00	%		35,322	8.50	%		33,244	8.00	%
Common Equity Tier 1 Capital (to Risk Weighted Assets)		62,900	15.14	%		18,700	4.50	%		29,089	7.00	%		27,011	6.50	%
Tier 1 Capital (to Average Assets) Leverage		62,900	9.60	%		26,198	4.00	%		26,198	4.00	%		32,747	5.00	%

As of December 31, 2018:
Total Capital (to Risk Weighted Assets)	$	62,422	15.50	%	$	32,222	8.00	%	$	39,774	9.875	%	$	40,278	10.00	%
Tier 1 Capital (to Risk Weighted Assets)		59,388	14.74	%		24,167	6.00	%		31,719	7.875	%		32,222	8.00	%
Common Equity Tier 1 Capital (to Risk Weighted Assets)		59,388	14.74	%		18,125	4.50	%		25,677	6.375	%		26,181	6.50	%
Tier 1 Capital (to Average Assets) Leverage		59,388	9.77	%		24,317	4.00	%		24,317	4.000	%		30,397	5.00	%

Certain regulatory restrictions exist regarding the ability of the Bank to transfer funds to the Company in the form of cash dividends, loans or advances. At December 31, 2019, $35,824,000 of undistributed earnings of the Bank, included in the consolidated stockholders’ equity, was available for distribution to the Company as dividends without prior regulatory approval, subject to the regulatory capital requirements above.