FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 1997
--------------
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 2-47541
RIVER VALLEY BANCORP
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Indiana 35-1984567
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
303 Clifty Drive
Madison, Indiana 47250
- ---------------- --------
(Address of principal (Zip Code)
executive office)
Registrant's telephone number, including area code: (812) 265-3421
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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
As of May 9, 1997, the latest practicable date 1,190,250 shares of the
registrant's common stock, without par value, were issued and outstanding.
Page 1 of 16 pages
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River Valley Bancorp
INDEX
Page
PART I - FINANCIAL INFORMATION
Consolidated Statements of Financial Condition 3
Consolidated Statements of Earnings 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 11
PART II - OTHER INFORMATION 15
SIGNATURES 16
2
<PAGE>
River Valley Bancorp
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 1997 1996
<S> <C> <C>
Cash and due from banks $ 2,999 $ 4,209
Federal funds sold 300 --
Interest bearing deposits in other financial institutions 3,235 4,476
--------- ---------
Cash and cash equivalents 6,534 8,685
Certificates of deposit in other financial institutions 299 100
Investment securities designated as available for sale - at market 1,440 3,448
Inv estment securities - at amortized cost, approximate market value of
$3,423 and $5,434 as of March 31, 1997 and December 31, 1996 3,500 5,500
Mortgage-backed securities designated as available for sale - at market 5,017 5,041
Mo rtgage-backed and related securities - at cost, approximate market
value of $7,150 and $7,794 as of March 31, 1997 and December 31, 1996 7,192 7,805
Lo ans receivable - net 107,696 107,918
L oans held for sale - at lower of cost or market 944 1,076
Off ice premises and equipment - at depreciated cost 1,813 2,057
Real estate acquired through foreclosure 82 --
Fede ral Home Loan Bank stock - at cost 943 943
Federal Reserve Bank stock - at cost 80 80
Accrued interest receivable on loans 770 819
Accr ued interest receivable on mortgage-backed securities 86 78
Accru ed interest receivable on investments and interest-bearing deposits 58 171
Good will, net of accumulated amortization 266 272
Cash surrender value of life insurance 758 747
Prep aid expenses and other assets 195 169
Prep aid federal income taxes -- 4
Deferred tax asset 652 628
--------- ---------
Total assets $ 138,325 $ 145,541
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 118,661 $ 125,656
Advances from the Federal Home Loan Bank 500 1,100
Ad vances by borrowers for taxes and insurance 84 70
Accru ed interest payable 240 279
Othe r liabilities 1,436 1,422
Accrued federal income taxes 91 --
Minority interest in consolidated subsidiary 214 209
--------- ---------
Total liabilities 121,226 128,736
Stockholders' equity
Preferred stock - 2,000,000 shares without par value
authorized; no shares issued -- --
Common stock - 5,000,000 shares without par value authorized;
1,190,250 shares issued and outstanding -- --
Additional paid in capital 11,173 11,173
Retained earnings - substantially restricted 6,976 6,635
Shares acquired by Employee Stock Ownership Plan (ESOP) (952) (952)
Unrealized losses on securities designated as available for sale,
net of related tax effects (98) (51)
--------- ---------
Total stockholders' equity 17,099 16,805
--------- ---------
Total liabilities and stockholders' equity $ 138,325 $ 145,541
========= =========
</TABLE>
3
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River Valley Bancorp
CONSOLIDATED STATEMENTS OF EARNINGS
For the three months ended March 31,
(In thousands, except share data)
1997 1996
Interest income
Loans $ 2,201 $ 1,117
Mortgage-backed and related securities 206 149
Investment securities 87 150
Interest-bearing deposits and other 117 43
------- -------
Total interest income 2,611 1,459
Int erest expense
Deposits 1,250 854
Borrowings 4 36
------- -------
Total interest expense 1,254 890
------- -------
Net interest income 1,357 569
Provision for losses on loans 96 6
------- -------
Net interest income after
provision for losses on loans 1,261 563
Other income
Insurance commissions 12 60
Gain on sale of investment securities 2 --
Loss on sale of loans (4) --
Gain on sale of office premises and equipment 203 --
Service fees, charges and other operating 198 48
------- -------
Total other income 411 108
General, administrative and other expense
Employee compensation and benefits 561 294
Occupancy and equipment 128 44
Federal deposit insurance premiums 10 45
Amortization of goodwill 6 1
Data processing 70 70
Other operating 313 99
------- -------
Total general, administrative and other expense 1,088 553
------- -------
Earnings before income taxes 584 118
Income taxes
Current 250 82
Deferred (7) (28)
------- -------
Total income taxes 243 54
------- -------
NET EARNINGS $ 341 $ 64
======= =======
EARNINGS PER SHARE $ .31 N/A
4
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River Valley Bancorp
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31,
(In thousands)
<TABLE>
<CAPTION>
1997 1996
Cash flows from operating activities:
<S> <C> <C>
Net earnings for the period $ 341 $ 64
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Amortization of premiums and discounts on
investments and mortgage-backed securities - net 1 3
Gain on sale of investment securities designated as available for sale (2) --
Loans orginated for sale in the secondary market (944) --
Proceeds from sale of loans in the secondary market 1,072 --
Loss on sale of loans 4 --
Amortization of deferred loan origination costs 20 7
Provision for losses on loans 96 6
Depreciation and amortization 49 13
Amortization of goodwill 6 1
Proceeds from sale of office premises and equipment 407 --
Gain on sale of office premises and equipment (203) --
Increase (decrease) in cash due to changes in:
Accrued interest receivable on loans 49 20
Accrued interest receivable on mortgage-backed securities (8) 5
Accrued interest receivable on investments and interest-
bearing deposits 113 146
Prepaid expenses and other assets (26) 14
Accrued interest payable (39) 5
Other liabilities 14 47
Income taxes
Current 95 72
Deferred (7) (28)
------- -------
Net cash provided by operating activities 1,038 375
Cash flows provided by (used in) investing activities:
Proceeds from maturity of investment securities 2,000 3,000
Proceeds from sale of investment securities designated as available for sale 2,002 --
Purchase of mortgage-backed securities (67) --
Principal repayments on mortgage-backed securities 650 768
Loan principal repayments 7,251 3,036
Loan disbursements (7,225) (2,497)
Purchase of office equipment (9) --
(Increase) decrease in certificates of deposit in other financial institutions - net (199) 100
Purchase of single premium life insurance -- (188)
Increase in cash surrender value of life insurance (11) (6)
------- -------
Net cash provided by investing activities 4,392 4,213
------- -------
Net cash provided by operating and investing
activities (subtotal carried forward) 5,430 4,588
------- -------
</TABLE>
5
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River Valley Bancorp
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
For the three months ended March 31,
(In thousands)
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Net cash provided by operating and investing
activities (subtotal brought forward) $ 5,430 $ 4,588
Cash flows provided by (used in) financing activities:
Increase (decrease) in deposit accounts (6,995) 4,021
Repayment of Federal Home Loan Bank advances (600) (2,471)
Advances by borrowers for taxes and insurance 14 30
------- -------
Net cash provided by (used in) financing activities (7,581) 1,580
------- -------
Net increase (decrease) in cash and cash equivalents (2,151) 6,168
Cash and cash equivalents at beginning of period 8,685 2,389
------- -------
Cash and cash equivalents at end of period $ 6,534 $ 8,557
======= =======
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Federal income taxes $ 108 $-
======= =======
Interest on deposits and borrowings $ 1,293 $ 885
======= =======
Supplemental disclosure of noncash investing activities:
Transfers from loans to real estate acquired through foreclosure $ 82 $-
======= =======
Unrealized losses on securities designated as available
for sale, net of related tax effects $ (47) $ (39)
======= =======
</TABLE>
6
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River Valley Bancorp
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On March 5, 1996, the Board of Directors of Madison First Federal
Savings and Loan Association ("First Federal" or the "Association")
adopted an overall plan of conversion and reorganization (the "Plan")
whereby First Federal would convert to the stock form of ownership,
followed by the issuance of all of First Federal's outstanding stock to
a newly formed holding company, River Valley Bancorp ("River Valley" or
the "Corporation"). Pursuant to the Plan, the Corporation offered for
sale up to 1,190,250 common shares to certain depositors of First
Federal and members of the community. The conversion was completed on
December 20, 1996, and resulted in the issuance of 1,190,250 common
shares of the Corporation which, after consideration of offering and
acquisition expenses totaling approximately $730,000, and shares
purchased by the ESOP totaling $952,000, resulted in net capital
proceeds of $10.2 million. The financial statements included herein for
periods prior to December 20, 1996, are those of First Federal prior to
the conversion to stock form.
In connection with the Conversion, River Valley acquired 95.6% of the
outstanding stock of Citizens National Bank of Madison (the "Bank") for
$3.1 million. This acquisition was accounted for using the purchase
method of accounting and as such, the March 31, 1996, statements
presented herein have not been restated for this acquisition.
The Corporation is a financial institution holding company whose
activities are primarily limited to holding the stock of First Federal
and the Bank, (collectively, the "Institutions"). The Institutions
conduct a general banking business in southeastern Indiana which
consists of attracting deposits from the general public and applying
those funds to the origination of loans for consumer, residential and
commercial purposes. The Institutions' profitability is significantly
dependent on net interest income, which is the difference between
interest income generated from interest-earning assets (i.e. loans and
investments) and the interest expense paid on interest-bearing
liabilities (i.e. customer deposits and borrowed funds). Net interest
income is affected by the relative amount of interest-earning assets
and interest-bearing liabilities and the interest received or paid on
these balances. The level of interest rates paid or received by the
Association and the Bank can be significantly influenced by a number of
competitive factors, such as governmental monetary policy, that are
outside of management's control.
1. Basis of Presentation
The accompanying unaudited financial statements were prepared in
accordance with instructions for Form 10-QSB and, therefore, do not
include information or footnotes necessary for a complete presentation
of financial position, results of operations and cash flows in
conformity with generally accepted accounting principles. Accordingly,
these financial statements should be read in conjunction with the
Corporation's Annual Report on Form 10-KSB for the year ended December
31, 1996. However, in the opinion of management, all adjustments
(consisting of only normal recurring accruals) which are necessary for
a fair presentation of the financial statements have been included. The
results of operations for the three months ended March 31, 1997 and
1996 are not necessarily indicative of the results which may be
expected for an entire fiscal year.
7
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River Valley Bancorp
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. Principles of Consolidation
The consolidated financial statements include the accounts of the
Corporation and its subsidiaries, the Bank and First Federal, and First
Federal's subsidiary, Madison First Service Corporation ("First
Service"). All significant intercompany balances and transactions have
been eliminated in the accompanying consolidated financial statements.
3. Effect of Recent Accounting Pronouncements
In October 1995, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation," establishing financial
accounting and reporting standards for stock-based compensation plans.
SFAS No. 123 encourages all entities to adopt a new method of
accounting to measure compensation cost of all stock compensation plans
based on the estimated fair value of the award at the financial
statement date. Companies are, however, allowed to continue to measure
compensation cost for those plans using the intrinsic value based
method of accounting, which generally does not result in compensation
expense recognition for most plans. Companies that elect to remain with
the existing accounting are required to disclose in a footnote to the
financial statements pro forma net earnings and, if presented, earnings
per share, as if SFAS No. 123 had been adopted. The accounting
requirements of SFAS No. 123 are effective for transactions entered
into during fiscal years that begin after December 15, 1995, although
companies are required to disclose information for awards granted in
their first fiscal year beginning after December 15, 1994. River Valley
does not currently have any stock-based compensation plans, and
therefore the disclosure provisions of SFAS No. 123 have no effect on
consolidated financial position or results of operations.
In June 1996, the FASB issued SFAS No. 125, "Accounting for Transfers
of Financial Assets, Servicing Rights, and Extinguishment of
Liabilities", that provides accounting guidance on transfers of
financial assets, servicing of financial assets, and extinguishment of
liabilities. SFAS No. 125 introduces an approach to accounting for
transfers of financial assets that provides a means of dealing with
more complex transactions in which the seller disposes of only a
partial interest in the assets, retains rights or obligations, makes
use of special purpose entities in the transaction, or otherwise has
continuing involvement with the transferred assets. The new accounting
method, referred to as the financial components approach, provides that
the carrying amount of the financial assets transferred be allocated to
components of the transaction based on their relative fair values. SFAS
No. 125 provides criteria for determining whether control of assets has
been relinquished and whether a sale has occurred. If the transfer does
not qualify as a sale, it is accounted for as a secured borrowing.
Transactions subject to the provisions of SFAS No. 125 include, among
others, transfers involving repurchase agreements, securitizations of
financial assets, loan participations, factoring arrangements, and
transfers of receivables with recourse.
8
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River Valley Bancorp
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. Effect of Recent Accounting Pronouncements (continued)
An entity that undertakes an obligation to service financial assets
recognizes either a servicing asset or liability for the servicing
contract (unless related to a securitization of assets, and all the
securitized assets are retained and classified as held-to-maturity). A
servicing asset or liability that is purchased or assumed is initially
recognized at its fair value. Servicing assets and liabilities are
amortized in proportion to and over the period of estimated net
servicing income or net servicing loss and are subject to subsequent
assessments for impairment based on fair value.
SFAS No. 125 provides that a liability is removed from the balance
sheet only if the debtor either pays the creditor and is relieved of
its obligation for the liability or is legally released from being the
primary obligor.
SFAS No. 125 is effective for transfers and servicing of financial
assets and extinguishment of liabilities occurring after December 31,
1997, and is to be applied prospectively. Earlier or retroactive
application is not permitted. Management does not believe that adoption
of SFAS No. 125 will have a material adverse effect on River Valley's
consolidated financial position or results of operations.
In February 1997, the FASB issued SFAS No. 128 "Earnings Per Share",
which requires companies to present basic earnings per share and, if
applicable, diluted earnings per share, instead of primary and fully
diluted earnings per share, respectively. Basic earnings per share is
computed without including potential common shares, i.e., no dilutive
effect. Diluted earnings per share is computed taking into
consideration common shares outstanding and dilutive potential common
shares, including options, warrants, convertible securities and
contingent stock agreements. SFAS No. 128 is effective for periods
ending after December 15, 1997. Early adoption is not permitted. Based
upon the provisions of SFAS No. 128, the Corporation's basic and
diluted earnings per share for the three months ended March 31, 1997
would each have been $.31.
4. Pending Legislative Changes
Legislation enacted in 1996 recapitalized the Savings Association
Insurance Fund (the "SAIF") and significantly reduced the deposit
insurance premiums paid by savings associations, including First
Federal. This legislation also provided for the merger of the SAIF and
the Bank Insurance Fund (the "BIF") by 1999, but not until such time as
bank and thrift charters are combined. Since the enactment of this
legislation in 1996, a bill has been introduced in the House Banking
Committee that would consolidate the OTS with the Office of the
Comptroller of the Currency and would require savings associations to
convert to state or national commercial banks. If this bill were to
become law, First Federal's authority to engage in diversified
activities would be limited or prohibited. The proposed legislation
would also subject the Corporation, as the holding company of First
Federal, to regulation as a bank holding company rather than as a
savings and loan holding company. It cannot be predicted with certainty
whether or when this bill, or any similar bill, might be enacted or the
extent to which the Corporation would be affected thereby.
9
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River Valley Bancorp
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. Earnings Per Share
Earnings per share has been calculated based upon the weighted-average
number of shares outstanding during the period, less the number of
shares in the ESOP that are unallocated and not committed to be
released. Using this formula, the Corporation's weighted average number
of shares outstanding totaled 1,095,030 for the three months ended
March 31, 1997. Calculating earnings per share for the three months
ended March 31, 1996 is inapplicable as the Corporation was not
incorporated until May 22, 1996 and did not complete its stock offering
until December, 1996.
6. Reclassification
Certain reclassifications have been made to the 1996 consolidated
financial statements to conform to the March 31, 1997 presentation.
10
<PAGE>
River Valley Bancorp
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
For the three month periods ended March 31, 1997 and March 31, 1996
Forward-Looking Statements
In addition to historical information contained herein, the following
discussion contains forward- looking statements that involve risks and
uncertainties. Economic circumstances, the Corporation's operations and
the Corporation's actual results could differ significantly from those
discussed in the forward-looking statements. Some of the factors that
could cause or contribute to such differences are discussed herein but
also include changes in the economy and interest rates in the nation
and the Corporation's market area generally.
Some of the forward-looking statements included herein are the
statements regarding management's determination of the amount of
allowance for losses on loans, legislative changes with respect to the
federal thrift charter and the effect of certain accounting
pronouncements.
Discussion of Changes in Financial Condition from December 31, 1996 to
March 31, 1997
At March 31, 1997, River Valley's consolidated assets totaled $138.3
million, a decrease of $7.2 million, or 5.0%, from the December 31,
1996 total of $145.5 million. The decrease was primarily due to a
decrease in the deposit portfolio of $7.0 million and a decrease in
advances from the Federal Home Loan Bank of $600,000, which was
partially offset by an increase of $294,000, or 1.7%, in total
stockholders' equity.
Liquid assets (i.e., cash, federal funds sold, interest-bearing
deposits and certificates of deposit) decreased by $2.0 million from
December 31, 1996 levels to a total of $6.8 million at March 31, 1997.
Investment securities totaled $4.9 million at March 31, 1997, a
decrease of $4.0 million, or 44.8%, from December 31, 1996 levels.
During the three month period ended March 31, 1997, maturities of
investment securities totaled $2.0 million, while proceeds from sales
of investment securities designated as available for sale totaled $2.0
million for the period. Mortgage-backed securities decreased by
$637,000, or 5.0%, to a total of $12.2 million at March 31, 1997,
primarily due to principal repayments of $650,000.
Loans receivable totaled $108.6 million at March 31, 1997, a decrease
of $354,000, or 0.3%, from the $109.0 million total at December 31,
1996. The decrease resulted primarily from principal repayments of $7.3
million and sales of $1.1 million, which were partially offset by loan
originations during the period of $8.2 million.
The Corporation's consolidated allowance for loan losses totaled $1.2
million and $1.1 million at March 31, 1997 and December 31, 1996,
respectively, which represented 1.03% and .99% of total loans at those
dates. Nonperforming loans (defined as loans delinquent greater than 90
days and loans on nonaccrual status) totaled $85,000 and $819,000 at
March 31, 1997 and December 31, 1996, respectively. The decrease in
nonperforming loans was primarily due to restoration of certain
borrowers to a current status.
11
<PAGE>
River Valley Bancorp
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
For the three month periods ended March 31, 1997 and March 31, 1996
Discussion of Changes in Financial Condition from December 31, 1996 to
March 31, 1997 (continued)
Although management believes that its allowance for loan losses at
March 31, 1997 was adequate based upon the available facts and
circumstances, there can be no assurance that additions to such
allowance will not be necessary in future periods, which could
negatively affect the Corporation's results of operations.
Deposits decreased by $7.0 million, or 5.6%, to a total of $118.7
million, compared to the $125.7 million total at December 31, 1996. The
decline can be attributed to deposits sold in conjunction with the sale
of the Bank's former branch in Hanover, Indiana, which was consummated
on February 28, 1997.
Advances from the Federal Home Loan Bank totaled $500,000 at March 31,
1997, a decrease of $600,000, or 54.5%, from the $1.1 million total at
December 31, 1996. The decrease was due to current period repayments of
$600,000.
Stockholders' equity totaled $17.1 million at March 31, 1997, an
increase of $294,000, or 1.7%, from the $16.8 million total at December
31, 1996. The increase resulted primarily from current period earnings
of $341,000, partially offset by an increase in the unrealized losses
on securities designated as available for sale. The Institutions are
required to maintain minimum regulatory capital pursuant to federal
regulations. At March 31, 1997, the respective equity capital exceeded
all applicable regulatory capital requirements.
Comparison of Results of Operations for the Three Months Ended March
31, 1997 and March 31, 1996
Increases in the level of income and expenses during the three month
period ended March 31, 1997, as compared to the comparable quarter in
1996, is partially due to the acquisition by the Cropration of the Bank
on December 20, 1996. This transaction was accounted for using the
purchase method of accounting. Accordingly, the statement of earnings
and the statement of cash flow for the quarter ended March 31, 1996
were not restated for the Acquisition.
General
River Valley's net earnings for the three months ended March 31, 1997,
totaled $341,000, an increase of $277,000, or 432.8%, over the $64,000
of net earnings reported in the comparable 1996 period. The increase in
earnings in the 1997 period is primarily attributable to an increase in
net interest income of $788,000 and an increase of $303,000 in other
income, which was partially offset by an increase in the provision for
losses on loans of $90,000, an increase in general, administrative and
other expense of $535,000 and an increase in the provision for federal
income taxes of $189,000.
12
<PAGE>
River Valley Bancorp
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
For the three month periods ended March 31, 1997 and March 31, 1996
Comparison of Results of Operations for the Three Months Ended March
31, 1997 and March 31, 1996 (continued)
Net Interest Income
Total interest income for the three months ended March 31, 1997,
amounted to $2.6 million, an increase of $1.2 million, or 80.0%, over
the comparable quarter in 1996, reflecting the effects of growth in
average interest-earning assets outstanding, coupled with an increase
in yield year-to-year. Interest income on loans and mortgage-backed
securities totaled $2.4 million for the three months ended March 31,
1997, an increase of $1.1 million, or 90.1%, over the comparable 1996
quarter. The increase resulted primarily from the $54.1 million, or
80.5%, increase in the average balance outstanding year-to-year.
Interest income on investments and interest-bearing deposits increased
by $11,000, or 5.7%, due to a decrease in average balances of $5.5
million which was partially offset by an approximate 269 basis point
increase in yield over the comparable 1996 period.
Interest expense on deposits increased by $396,000, or 46.4%, to a
total of $1.3 million for the three months ended March 31, 1997, due
primarily to a $44.0 million increase in the average balance of
deposits outstanding. Interest expense on borrowings totaled $4,000 for
the three months ended March 31, 1997, a decrease of $32,000, or 88.9%,
from the comparable quarter in 1996. The decrease resulted primarily
from a $1.6 million decrease in average borrowings outstanding
year-to-year.
Provision for Losses on Loans
A provision for losses on loans is charged to earnings to bring the
total allowance for loan losses to a level considered appropriate by
management based upon historical experience, the volume and type of
lending conducted by the Institutions, the status of past due principal
and interest payments, general economic conditions, particularly as
such conditions relate to the Institutions' market area, and other
factors related to the collectibility of the Institutions loan
portfolio. As a result of such analysis, management concluded that a
charge to the provision for losses on loans for $96,000 for the three
months ended March 31, 1997, was appropriate. The current period
provision generally reflects the growth in non-residential real estate
and commercial loans.
Other Income
Other income increased by $303,000, or 280.6%, for the three months
ended March 31, 1997, as compared to the same period in 1996, due
primarily to a $203,000 gain on sale of office premises and equipment
coupled with a $150,000, or 312.5%, increase in service fees, charges
and other operating income, which were partially offset by a decline of
$48,000, or 80.0%, in insurance commissions year-to-year. The gain on
sale of office premises resulted from the Association's sale of a
branch office facility during the quarter, as required in accordance
with the terms of regulatory approval of the Association's conversion
and the Corporation's acquisition of the Bank. The decline in insurance
commissions resulted from the Association's sale of its insurance
agency subsidiary during 1996.
13
<PAGE>
River Valley Bancorp
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
For the three month periods ended March 31, 1997 and March 31, 1996
Comparison of Results of Operations for the Three Months Ended March
31, 1997 and March 31, 1996 (continued)
General, Administrative and Other Expense
General, administrative and other expense increased by $535,000, or
96.7%, during the three months ended March 31, 1997, compared to the
same period in 1996. This increase resulted primarily from a $267,000,
or 90.8%, increase in employee compensation and benefits, an $84,000,
or 190.9%, increase in occupancy and equipment and a $213,000, or
213.0%, increase in other operating expense, which were partially
offset by a $35,000, or 77.8%, decrease in federal deposit insurance
premiums. The increase in other operating expense reflects increases in
professional fees and other costs associated with the public reporting
requirements of a public stock company.
Income Taxes
The provision for income taxes increased by $189,000, or 350.0%, for
the three months ended March 31, 1997, as compared to the same period
in 1996. This increase resulted primarily from an increase in net
earnings before tax of $466,000, or 394.9%. The effective tax rates
were 41.6% and 45.8% for the three months ended March 31, 1997 and
1996, respectively.
14
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River Valley Bancorp
PART II
ITEM 1. Legal Proceedings
Not applicable
ITEM 2. Changes in Securities
None
ITEM 3. Defaults Upon Senior Securities
Not applicable
ITEM 4. Submission of Matters to a Vote of Security Holders
Not applicable
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports on Form 8-K
Reports on Form 8-K: None
Exhibit 27: Financial Data Schedule for the three
month period ended March 31, 1997
15
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
Date: May 14, 1997 By: /s/James E. Fritz
---------------------------------
James E. Fritz
CEO/President
Date: May 14, 1997 By: /s/J. Wayne Deveary
---------------------------------
J. Wayne Deveary
Chief Financial Officer
16
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
RIVER VALLEY AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0001015593
<NAME> River Valley Bancorp
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1.000
<CASH> 2,999
<INT-BEARING-DEPOSITS> 3,534
<FED-FUNDS-SOLD> 300
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 6,457
<INVESTMENTS-CARRYING> 10,692
<INVESTMENTS-MARKET> 10,573
<LOANS> 108,640
<ALLOWANCE> 1,169
<TOTAL-ASSETS> 138,325
<DEPOSITS> 118,661
<SHORT-TERM> 500
<LIABILITIES-OTHER> 2,065
<LONG-TERM> 0
0
0
<COMMON> 0
<OTHER-SE> 17,099
<TOTAL-LIABILITIES-AND-EQUITY> 138,325
<INTEREST-LOAN> 2,201
<INTEREST-INVEST> 293
<INTEREST-OTHER> 117
<INTEREST-TOTAL> 2,611
<INTEREST-DEPOSIT> 1,250
<INTEREST-EXPENSE> 1,254
<INTEREST-INCOME-NET> 1,357
<LOAN-LOSSES> 96
<SECURITIES-GAINS> 2
<EXPENSE-OTHER> 1,088
<INCOME-PRETAX> 584
<INCOME-PRE-EXTRAORDINARY> 584
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 341
<EPS-PRIMARY> .31
<EPS-DILUTED> .31
<YIELD-ACTUAL> 4.07
<LOANS-NON> 0
<LOANS-PAST> 86
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,074
<CHARGE-OFFS> 1
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 1,169
<ALLOWANCE-DOMESTIC> 12
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,157
</TABLE>
