UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
(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, 2000
--------------------------------------------
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to _______________
Commission File Number 2-47541
RIVER VALLEY BANCORP
- ------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Indiana 35-1984567
- ------------------------------- --------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
430 Clifty Drive, Madison, Indiana 47250
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(Address of principal executive offices)
(812) 273-4949
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(Issuer's telephone number)
- ------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the issuer filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: May 8, 2000 - 921,972 common shares
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
Page 1 of 16 pages
<PAGE>
River Valley Bancorp
INDEX
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Financial Condition 3
Consolidated Statements of Earnings 4
Consolidated Statements of Comprehensive Income 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
2
<PAGE>
River Valley Bancorp
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share data)
March 31, December 31,
ASSETS 2000 1999
<S> <C> <C>
Cash and due from banks $ 3,271 $ 3,648
Federal funds sold 1,350 1,550
Interest-earning deposits in other financial institutions 4,740 2,854
------- -------
Cash and cash equivalents 9,361 8,052
Investment securities designated as available for sale - at market 2,173 4,230
Investment securities held to maturity - at amortized cost, approximate market
value of $995 as of December 31, 1999 - 1,000
Mortgage-backed securities designated as available for sale - at market 1,975 2,071
Mortgage-backed and related securities held to maturity - at cost, approximate
market value of $1,941 and $2,147 as of March 31, 2000 and December 31, 1999 1,934 2,138
Loans receivable - net 122,407 115,131
Office premises and equipment - at depreciated cost 1,930 1,980
Federal Home Loan Bank stock - at cost 943 943
Accrued interest receivable on loans 971 970
Accrued interest receivable on mortgage-backed and related securities 24 26
Accrued interest receivable on investments and interest-earning deposits 55 47
Goodwill, net of accumulated amortization 42 44
Cash surrender value of life insurance 854 854
Prepaid expenses and other assets 209 210
Prepaid federal income taxes 167 359
Deferred tax asset 636 640
------- -------
Total assets $143,681 $138,695
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $122,204 $114,251
Advances from the Federal Home Loan Bank 3,000 6,000
Other borrowed money 850 500
Advances by borrowers for taxes and insurance 56 36
Accrued interest payable 332 330
Other liabilities 591 641
Dividends payable 82 71
------- -------
Total liabilities 127,115 121,829
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 at March 31, 2000 and December 31, 1999 - -
Additional paid-in capital 11,314 11,314
Retained earnings - substantially restricted 9,850 9,551
Shares acquired by stock benefit plans (967) (967)
Less 268,278 and 219,753 treasury shares - at cost (3,583) (2,976)
Accumulated comprehensive loss, unrealized losses on securities
designated as available for sale, net of related tax effects (48) (56)
------- -------
Total stockholders' equity 16,566 16,866
------- -------
Total liabilities and stockholders' equity $143,681 $138,695
======= =======
</TABLE>
3
<PAGE>
River Valley Bancorp
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF EARNINGS
For the three months ended March 31,
(In thousands, except share data)
2000 1999
<S> <C> <C>
Interest income
Loans $2,316 $2,206
Mortgage-backed and related securities 65 83
Investment securities 60 39
Interest-earning deposits and other 99 117
----- -----
Total interest income 2,540 2,445
Interest expense
Deposits 1,159 1,184
Borrowings 83 4
----- -----
Total interest expense 1,242 1,188
----- -----
Net interest income 1,298 1,257
Provision for losses on loans 13 60
----- -----
Net interest income after provision for losses on loans 1,285 1,197
Other income
Gain on sale of loans 12 16
Gain on sale of office premises 42 -
Service fees, charges and other operating 223 189
----- -----
Total other income 277 205
General, administrative and other expense
Employee compensation and benefits 514 533
Occupancy and equipment 134 132
Amortization of goodwill 2 2
Data processing 26 25
Other operating 257 302
----- -----
Total general, administrative and other expense 933 994
----- -----
Earnings before income taxes 629 408
Income taxes
Current 248 152
Deferred - 10
----- -----
Total income taxes 248 162
----- -----
NET EARNINGS $ 381 $ 246
===== =====
EARNINGS PER SHARE
Basic $.44 $.22
=== ===
Diluted $.44 $.22
=== ===
</TABLE>
4
<PAGE>
River Valley Bancorp
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the three months ended March 31,
(In thousands)
2000 1999
<S> <C> <C>
Net earnings $381 $246
Other comprehensive income, net of tax:
Unrealized holding gains (losses) during the period, net of tax of
$4 and $(4) during 2000 and 1999, respectively 8 (7)
--- ---
Comprehensive income $389 $239
=== ===
Accumulated comprehensive loss $(48) $(20)
=== ===
</TABLE>
5
<PAGE>
River Valley Bancorp
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31,
(In thousands)
2000 1999
<S> <C> <C>
Cash flows from operating activities:
Net earnings for the period $ 381 $ 246
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 (26) (8)
Loans originated for sale in the secondary market (728) (3,689)
Proceeds from sale of loans in the secondary market 733 5,372
Gain on sale of loans (5) (35)
Amortization of deferred loan origination costs 26 18
Provision for losses on loans 13 60
Depreciation and amortization 59 58
Gain on sale of office premises (42) -
Amortization of goodwill 2 2
Increase (decrease) in cash due to changes in:
Accrued interest receivable on loans (1) 35
Accrued interest receivable on mortgage-backed securities 2 7
Accrued interest receivable on investments and interest-earning deposits (8) (33)
Prepaid expenses and other assets 1 123
Accrued interest payable 2 (90)
Other liabilities (40) 108
Income taxes
Current 193 67
Deferred - 10
------ ------
Net cash provided by operating activities 562 2,251
Cash flows provided by (used in) investing activities:
Purchase of investment securities (1,900) (5,959)
Proceeds from maturity of investment securities 5,000 1,000
Principal repayments on mortgage-backed securities 293 511
Loan principal repayments 11,628 12,074
Loan disbursements (18,943) (12,431)
Proceeds from sale of real estate acquired through foreclosure - 82
Purchase of office equipment (23) (196)
Proceeds from sale of office premises 56 -
Increase in cash surrender value of life insurance - (9)
------ ------
Net cash used in investing activities (3,889) (4,928)
------ ------
Net cash used in operating and investing activities
(subtotal carried forward) (3,327) (2,677)
------ ------
</TABLE>
6
<PAGE>
River Valley Bancorp
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
For the three months ended March 31,
(In thousands)
2000 1999
<S> <C> <C>
Net cash used in operating and investing activities
(subtotal brought forward) $(3,327) $(2,677)
Cash flows provided by (used in) financing activities:
Net increase in deposit accounts 7,954 307
Repayment of Federal Home Loan Bank advances (3,000) -
Proceeds from other borrowed money 350 671
Advances by borrowers for taxes and insurance 20 25
Dividends on common stock (82) (68)
Purchase of shares (606) (570)
------ ------
Net cash provided by financing activities 4,636 365
------ ------
Net increase (decrease) in cash and cash equivalents 1,309 (2,312)
Cash and cash equivalents at beginning of period 8,052 12,307
------ ------
Cash and cash equivalents at end of period $ 9,361 $ 9,995
====== ======
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Federal income taxes $ - $ 55
====== ======
Interest on deposits and borrowings $ 1,240 $ 1,278
====== ======
Supplemental disclosure of noncash investing and financing activities:
Unrealized gains (losses) on securities designated as available
for sale, net of related tax effects $ 8 $ (7)
====== ======
Recognition of mortgage servicing rights in accordance with
SFAS No. 125 $ 7 $ 23
====== ======
</TABLE>
7
<PAGE>
River Valley Bancorp
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the three month periods ended March 31, 2000 and 1999
River Valley Bancorp (the "Corporation") is a unitary savings and loan holding
company whose activities are primarily limited to holding the stock of River
Valley Financial Bank ("River Valley" or the "Bank"). The Bank conducts 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. River Valley's
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 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 consolidated 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 consolidated financial statements and notes
thereto of the Corporation included in the Annual Report on Form 10-K for the
year ended December 31, 1999. 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 month period ended March 31, 2000, are not
necessarily indicative of the results which may be expected for the entire year.
2. Principles of Consolidation
The consolidated financial statements include the accounts of the Corporation
and its subsidiary, the Bank and the Bank'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 June 1998, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities," which requires entities to
recognize all derivatives in their financial statements as either assets or
liabilities measured at fair value. SFAS No. 133 also specifies new methods of
accounting for hedging transactions, prescribes the items and transactions that
may be hedged, and specifies detailed criteria to be met to qualify for hedge
accounting.
8
<PAGE>
River Valley Bancorp
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the three month periods ended March 31, 2000 and 1999
3. Effect of Recent Accounting Pronouncements (continued)
The definition of a derivative financial instrument is complex, but in general,
it is an instrument with one or more underlyings, such as an interest rate or
foreign exchange rate, that is applied to a notional amount, such as an amount
of currency, to determine the settlement amount(s). It generally requires no
significant initial investment and can be settled net or by delivery of an asset
that is readily convertible to cash. SFAS No. 133 applies to derivatives
embedded in other contracts, unless the underlying of the embedded derivative is
clearly and closely related to the host contract.
SFAS No. 133, as amended by SFAS No. 137, is effective for fiscal years
beginning after June 15, 2000. On adoption, entities are permitted to transfer
held-to-maturity debt securities to the available-for-sale or trading category
without calling into question their intent to hold other debt securities to
maturity in the future. SFAS No. 133 is not expected to have a material impact
on the Corporation's financial statements.
4. Earnings Per Share
Basic earnings per share is computed based upon the weighted-average shares
outstanding during the period, less shares in the ESOP that are unallocated and
not committed to be released. Weighted-average common shares outstanding, which
gives effect to 60,876 and 71,730 unallocated ESOP shares at March 31, 2000 and
1999, respectively, totaled 870,903 and 1,098,216 for the three month periods
ended March 31, 2000 and 1999, respectively.
Diluted earnings per share is computed taking into consideration common shares
outstanding and dilutive potential common shares to be issued under the
Corporation's stock option plan. Weighted-average common shares deemed
outstanding for purposes of computing diluted earnings per share totaled 870,903
and 1,098,216 for the three month periods ended March 31, 2000 and 1999,
respectively.
There were no incremental shares related to the assumed exercise of stock
options in the computation of diluted earnings per share for the periods ended
March 31, 2000 and 1999. Options to purchase 93,959 and 103,959 shares of common
stock with a weighted average price of $14.70 and $14.81 were outstanding at
March 31, 2000 and 1999, respectively, but were excluded from the computation of
common share equivalents because their share prices were greater than the
average market price of the common shares.
5. Reclassifications
Certain reclassifications have been made to the 1999 consolidated financial
statements to conform to the March 31, 2000 presentation.
9
<PAGE>
River Valley Bancorp
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
For the three month periods ended March 31, 2000 and 1999
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 and adequacy of the allowance
for losses on loans and the effect of certain recent accounting pronouncements.
Discussion of Financial Condition Changes from December 31, 1999 to March 31,
2000
At March 31, 2000, the Corporation's consolidated assets totaled $143.7 million,
an increase of $5.0 million, or 3.6%, over the December 31, 1999 total. The
increase in assets resulted primarily from an increase in deposits of $8.0
million and a $350,000 increase in other borrowed money, which were partially
offset by a decrease in advances from the Federal Home Loan Bank of $3.0 million
and a decrease in stockholders' equity of $300,000.
Liquid assets (i.e., cash, federal funds sold and interest-earning deposits)
increased by $1.3 million from December 31, 1999 levels, to a total of $9.4
million at March 31, 2000. Investment and mortgage-backed securities decreased
by $3.4 million, or 35.6%, to a total of $6.1 million at March 31, 2000, due
primarily to maturities of short-term investments of $5.0 million and principal
repayments on mortgage-backed and related securities totaling $293,000, which
were partially offset by purchases of investment securities of $1.9 million.
Loans receivable totaled $122.4 million at March 31, 2000, an increase of $7.3
million, or 6.3%, over the $115.1 million total at December 31, 1999. The
increase resulted primarily from loan originations of $19.7 million, which was
partially offset by principal repayments during the period of $11.6 million and
sales of $728,000. Loan origination volume during the three months ended March
31, 2000, exceeded that of the same quarter in 1999 by $3.6 million, or 22.0%.
The Corporation's consolidated allowance for loan losses totaled $1.5 million at
both March 31, 2000 and December 31, 1999, which represented 1.2% and 1.3% of
total loans at those respective dates. Nonperforming loans (defined as loans
delinquent greater than 90 days and loans on nonaccrual status) totaled $636,000
and $857,000 at March 31, 2000 and December 31, 1999, respectively. Although
management believes that its allowance for loan losses at March 31, 2000, 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.
10
<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, 2000 and 1999
Discussion of Financial Condition Changes from December 31, 1999 to March 31,
2000 (continued)
Deposits totaled $122.2 million at March 31, 2000, an increase of $8.0 million,
or 7.0%, compared to the total at December 31, 1999. The growth in deposits was
attributable to the Bank's participation in the State of Indiana's "Treasurers
Agricultural Loan Program", which provided for a $3.5 million one-year
certificate of deposit, which was used to fund a corresponding agricultural loan
at a spread to the Bank of 2.50%. The remaining $4.5 million of deposit growth
resulted from managements continuing efforts to increase deposits through
marketing and interest-rate pricing strategies.
Advances from the Federal Home Loan Bank totaled $3.0 million at March 31, 2000,
a $3.0 million, or 50.0%, decrease from the balance at December 31, 1999. During
the current quarter, management elected to repay advances using proceeds from
the growth in deposits and maturities of investment securities.
Stockholders' equity totaled $16.6 million at March 31, 2000, a decrease of
$300,000, or 1.8%, from the $16.9 million total at December 31, 1999. The
decrease resulted primarily from the Corporation's repurchase of 48,525 shares
of its stock for treasury totaling $606,000, and the declaration of dividends
totaling $82,000. These decreases were partially offset by current period
earnings of $381,000, and an $8,000 decrease in unrealized losses on securities
designated as available for sale.
The Bank is required to maintain minimum regulatory capital pursuant to federal
regulations. At March 31, 2000, the Bank's regulatory capital exceeded all
applicable regulatory capital requirements.
Comparison of Results of Operations for the Three Month Periods Ended March 31,
2000 and 1999
General
The Corporation's net earnings for the three months ended March 31, 2000,
totaled $381,000, an increase of $135,000, or 54.9%, from the $246,000 of net
earnings reported in the comparable 1999 period. The increase in earnings in the
2000 period was primarily attributable to an increase in net interest income of
$41,000, an increase in other income of $72,000, a decrease in the provision for
losses on loans of $47,000 and a decrease in general, administrative and other
expense of $61,000, which were partially offset by an increase in the provision
for income taxes of $86,000.
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, 2000 and 1999
Comparison of Results of Operations for the Three Month Periods Ended March 31,
2000 and 1999 (continued)
Net Interest Income
Total interest income for the three months ended March 31, 2000 amounted to $2.5
million, an increase of $95,000, or 3.9%, over the comparable quarter in 1999,
reflecting the effects of an increase in average interest-earning assets
outstanding, coupled with an increase in the yield year-to-year. Interest income
on loans and mortgage-backed securities totaled $2.4 million for the three
months ended March 31, 2000, an increase of $92,000, or 4.0%, over the
comparable 1999 quarter. The increase resulted primarily from a $5.1 million, or
4.3%, increase in the average balance outstanding year-to-year. Interest income
on investments and interest-earning deposits increased by $3,000, or 1.9%, due
to an increase in the average yields on such investments, which was partially
offset by a $2.3 million decline in the average balance outstanding year to
year.
Interest expense on deposits decreased by $25,000, or 2.1%, to a total of $1.2
million for the quarter ended March 31, 2000, due primarily to a decrease in the
average cost of deposits of approximately 10 basis points, to 3.90% during the
current quarter, partially offset by an increase in the average balance of
deposits outstanding. Interest expense on borrowings totaled $83,000 for the
three months ended March 31, 2000, an increase of $79,000, over the comparable
quarter in 1999. The increase resulted primarily from a significant increase in
average borrowings outstanding year to year.
As a result of the foregoing changes in interest income and interest expense,
net interest income increased by $41,000, or 3.3%, for the three months ended
March 31, 2000, as compared to the comparable quarter in 1999. The interest rate
spread amounted to approximately 3.67% for the three months ended March 31,
2000, compared to 3.55% for the 1999 quarter, while the net interest margin
increased to 3.93% during the 2000 quarter, from 3.88% during the 1999 quarter.
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
Bank, the status of past due principal and interest payments, general economic
conditions, particularly as such conditions relate to the Bank's market area,
and other factors related to the collectibility of the Bank's loan portfolio. As
a result of such analysis, management recorded a $13,000 provision for losses on
loans for the three months ended March 31, 2000, compared to the $60,000 amount
recorded in the 1999 period. The current period provision was predicated upon
the growth in the loan portfolio, coupled with a decline in the level of
nonperforming loans during the quarter. While management believes that the
allowance for losses on loans is adequate at March 31, 2000, based upon the
available facts and circumstances, there can be no assurance that the loan loss
allowance will be adequate to cover losses on nonperforming assets in the
future.
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, 2000 and 1999
Comparison of Results of Operations for the Three Month Periods Ended March 31,
2000 and 1999 (continued)
Other Income
Other income increased by $72,000, or 35.1%, for the three months ended March
31, 2000, as compared to the same period in 1999, due primarily to a $34,000, or
18.0%, increase in service fees, charges and other operating income and a
$42,000 gain on sale of office premises. The increase in service fees, charges
and other operating income was primarily due to the Corporation's overall growth
in the volume of deposits year to year. The sale of office premises resulted
from the Bank's planned divestiture of a real estate property which was not
utilized in recent operations.
General, Administrative and Other Expense
General, administrative and other expense decreased by $61,000, or 6.1%, during
the three months ended March 31, 2000, compared to the same period in 1999. This
decrease resulted primarily from a $19,000, or 3.6%, decrease in employee
compensation and benefits and a $45,000, or 14.9%, decrease in other operating
expense. The decrease in employee compensation and benefits reflects the effects
of the managerial restructuring effected during 1999, coupled with an increase
in deferred loan origination costs resulting from the increased loan volume year
to year. The decrease in other operating expense was due primarily to
nonrecurring consulting costs recorded in the 1999 quarter, coupled with the
effects of management's efforts to control operating costs during the current
quarter.
Income Taxes
The provision for income taxes totaled $248,000 for the three months ended March
31, 2000, an increase of $86,000, or 53.1%, as compared to the same period in
1999. This increase resulted primarily from an increase in net earnings before
taxes of $221,000, or 54.2%. The effective tax rates amounted to 39.4% and 39.7%
for the three months ended March 31, 2000 and 1999, respectively.
Year 2000 Compliance Matters
As with all providers of financial services, the Bank's operations are heavily
dependent on information technology systems. During the three year period
leading up to January 1, 2000, the Bank addressed the potential problems
associated with the possibility that the computers that control or operate the
Bank's information technology system and infrastructure may not have been
programmed to read four-digit date codes and, upon arrival of the year 2000, may
have recognized the two-digit code "00" as the year 1900, causing systems to
fail to function or to generate erroneous data.
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, 2000 and 1999
Year 2000 Compliance Matters (continued)
The Bank's core data processing relative to customer loan and deposit accounts,
as well as the general ledger, is performed in-house through use of a purchased
software product. Management had been advised, and certain testing had been
performed to verify, that the system would continue to function upon arrival of
the year 2000. The Bank experienced no technology-related difficulties upon
arrival of January 1, 2000, nor was there any interruption of services to its
customers.
Financial institutions may experience increases in problem loans and credit
losses in the event that borrowers failed to prepare properly for Year 2000.
Because the Bank's loan portfolio is highly diversified with regard to
individual borrowers and types of businesses and the Bank's primary market area
is not significantly dependent upon one employer or industry, the Bank does not
expect, and to date has not experienced, any significant or prolonged
difficulties that will affect net earnings or cash flow.
14
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River Valley Bancorp
PART II
ITEM 1. Legal Proceedings
Not applicable
ITEM 2. Changes in Securities and Use of Proceeds
None
ITEM 3. Defaults Upon Senior Securities
Not applicable
ITEM 4. Submission of Matters to a Vote of Security Holders
On April 19, 2000, the Annual Meeting of the Corporation's
Stockholders was held. Two directors were elected to terms
expiring in 2002 by the following votes:
Robert W. Anger For: 749,426 Withheld: 47,022
Matthew P. Forrester For: 787,775 Withheld: 8,673
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
Reports on Form 8-K: The Corporation filed no reports on Form 8-K
during the quarter ended March 31, 2000.
Exhibit 27: Financial Data Schedule for the three month
period ended March 31, 2000
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 12, 2000 By: /s/Matthew P. Forrester
--------------------------- -----------------------
Matthew P. Forrester
Chief Executive Officer and President
Date: May 12, 2000 By: /s/Larry C. Fouse
--------------------------- -----------------
Larry C. Fouse
Vice President of Finance
16
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 3,271
<INT-BEARING-DEPOSITS> 4,740
<FED-FUNDS-SOLD> 1,350
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 4,148
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0
0
<COMMON> 0
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<EPS-BASIC> .44
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<ALLOWANCE-UNALLOCATED> 1,429
</TABLE>
