-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VhSpdnoU6ChkiPHtap6t7GQyGqH0B7iKNqBQcYJRYgRCD/FuI231vNLhqmOyzbhX VkJElVaZsW5WaavIlkv8WQ== 0000908834-02-000309.txt : 20021114 0000908834-02-000309.hdr.sgml : 20021114 20021114104534 ACCESSION NUMBER: 0000908834-02-000309 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RIVER VALLEY BANCORP CENTRAL INDEX KEY: 0001015593 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 351984567 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-21765 FILM NUMBER: 02822452 BUSINESS ADDRESS: STREET 1: 430 CLIFTY DR CITY: MADISON STATE: IN ZIP: 47250 BUSINESS PHONE: 8122734949 MAIL ADDRESS: STREET 1: 430 CLIFTY DR CITY: MADISON STATE: IN ZIP: 47250 10QSB 1 rv_10qsb1102.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002 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: 0-21765 RIVER VALLEY BANCORP (Exact name of small business issuer as specified in its charter) Indiana 35-1984567 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 430 Clifty Drive Madison, Indiana 47250 (Address of principal executive offices) (812) 273-4949 (Issuer's telephone number) 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: November 8, 2002 - 810,544 common shares. Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ X ] RIVER VALLEY BANCORP FORM 10-QSB INDEX Page No. PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Condensed Balance Sheet 3 Consolidated Condensed Statement of Income 4 Consolidated Condensed Statement of Comprehensive Income 5 Consolidated Condensed Statement of Cash Flows 6 Notes to Unaudited Consolidated Condensed Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 8 Item 3. Controls and Procedures. 12 PART II. OTHER INFORMATION Item 1. Legal Proceedings 12 Item 2. Changes in Securities and Use of Proceeds 13 Item 3. Defaults Upon Senior Securities 13 Item 4. Submission of Matters to a Vote of Security Holders 13 Item 5. Other Information 13 Item 6. Exhibits and Reports on Form 8-K 13 SIGNATURES 14 CERTIFICATIONS 14
PART I FINANCIAL INFORMATION Item 1. Financial Statements RIVER VALLEY BANCORP Consolidated Condensed Balance Sheet September 30, December 31, 2002 2001 (Unaudited) --------------------- -------------------- (In Thousands, Except Share Amounts) Assets Cash and due from banks $ 3,440 $ 4,689 Interest-bearing demand deposits 18,440 952 Federal funds sold 1,300 0 -------------------- --------------------- Cash and cash equivalents 23,180 5,641 Investment securities available for sale 23,146 17,653 Loans held for sale 1,127 2,638 Loans, net of allowance for loan losses of $2,029, and $1,972 164,082 155,334 Premises and equipment 5,469 5,379 Federal Home Loan Bank stock 2,000 1,250 Interest receivable 1,564 1,475 Other assets 2,594 2,248 -------------------- --------------------- Total assets $223,162 $191,618 ==================== ===================== Liabilities Deposits Non-interest-bearing $ 12,133 $ 11,406 Interest-bearing 149,284 134,165 -------------------- --------------------- Total deposits 161,417 145,571 Borrowings 40,000 26,500 Interest payable 447 613 Other liabilities 1,283 963 -------------------- --------------------- Total liabilities 203,147 173,647 -------------------- --------------------- Commitments and Contingencies Shareholders' Equity Preferred stock, without par value Authorized and unissued - 2,000,000 shares Common stock, without par value Authorized - 5,000,000 shares Issued and outstanding - 810,544 and 868,874 shares Additional paid-in capital 7,732 7,654 Retained earnings 12,318 10,802 Shares acquired by stock benefit plans (388) (532) Accumulated other comprehensive income 353 47 -------------------- --------------------- Total shareholders' equity 20,015 17,971 -------------------- --------------------- Total liabilities and shareholders' equity $223,162 $191,618 ==================== ===================== See notes to consolidated condensed financial statements.
RIVER VALLEY BANCORP Consolidated Condensed Statement of Income (Unaudited)
Nine Months Ended Three Months Ended September 30, September 30, ------------- ------------ ------------- ------------ 2002 2001 2002 2001 ------------- ------------ ------------- ------------ Interest Income (In Thousands, Except Share Amounts) Loans receivable $ 8,712 $ 9,192 $ 2,953 $ 3,128 Investment securities 658 398 218 147 Interest-earning deposits and other 158 203 71 56 ------------ ---------- ------------- --------------- Total interest income 9,528 9,793 3,242 3,331 ------------ ---------- ------------- --------------- Interest Expense Deposits 3,085 4,423 991 1,421 Borrowings 1,103 678 415 231 ------------ ---------- ------------- --------------- Total interest expense 4,188 5,101 1,406 1,652 ------------ ---------- ------------- --------------- Net Interest Income 5,340 4,692 1,836 1,679 Provision for loan losses 410 310 150 110 ------------ ---------- ------------- --------------- Net Interest Income After Provision for Loan Losses 4,930 4,382 1,686 1,569 ------------ ---------- ------------- --------------- Other Income Gains on investment securities 6 9 0 8 Service fees and charges 1,016 688 369 247 Net gains on loan sales 643 374 493 157 Gain on sale of premises and equipment 352 2 0 2 Other income 81 21 17 7 ------------ ---------- ------------- --------------- Total other income 2,098 1,094 879 421 ------------ ---------- ------------- --------------- Other Expenses Salaries and employee benefits 1,789 1,603 632 540 Net occupancy and equipment expenses 601 442 199 164 Data processing fees 176 125 73 41 Advertising 145 160 59 66 Legal and professional fees 55 122 31 29 Other expenses 1,044 739 443 286 ------------ ---------- ------------- --------------- Total other expenses 3,810 3,191 1,437 1,126 ------------ ---------- ------------- --------------- Income Before Income Tax 3,218 2,285 1,128 864 Income tax expense 1,274 881 446 334 ------------ ---------- ------------- --------------- Net Income $ 1,944 $ 1,404 $ 682 $ 530 ============ ========== ============= =============== Basic earnings per share $ 2.50 $ 1.76 $ .87 $ .68 2.40 1.72 .84 .66 See notes to consolidated condensed financial statements.
RIVER VALLEY BANCORP Consolidated Condensed Statement of Comprehensive Income (Unaudited)
Nine Months Ended Three Months Ended September 30, September 30, -------------- ------------ ------------- ------------ 2002 2001 2002 2001 -------------- ------------ ------------- ------------ (In Thousands) Net income $1,944 $1,404 $682 $530 Other comprehensive income, net of tax Unrealized gains on securities available for sale Unrealized holding gains arising during the period, net of tax expense of $203, $112, $138 and $75. 310 170 210 115 Less: Reclassification adjustment for gains included in net income, net of tax expense of $2, $4, $0 and $3. 4 5 0 5 -------------- ------------ ------------- ------------ 306 165 210 110 -------------- ------------ ------------- ------------ Comprehensive income $2,250 $1,569 $892 $640 ============== ============ ============= ============ See notes to consolidated condensed financial statements.
RIVER VALLEY BANCORP Consolidated Condensed Statement of Cash Flows (Unaudited)
Nine Months Ended September 30, -------------------- ------------------- 2002 2001 -------------------- ------------------- Operating Activities (In Thousands) Net income $ 1,944 $ 1,404 Adjustments to reconcile net income to net cash provided by operating activities Provision for loan losses 410 310 Depreciation and amortization 381 291 Investment securities (gains) losses (6) (9) Loans originated for sale in the secondary market (41,530) (23,163) Proceeds from sale of loans in the secondary market 43,354 23,308 Gain on sale of loans (313) (145) Amortization of deferred loan origination cost 123 114 Amortization of expense related to stock benefit plans 290 202 Gain on sale of premises and equipment (352) 0 Capitalized interest on construction (1) (68) Net change in: Interest receivable (89) (107) Interest payable (166) 0 Other adjustments (237) 370 -------------------- ------------------- Net cash provided by operating activities 3,808 2,507 -------------------- ------------------- Investing Activities Purchases of securities available for sale (11,049) (10,299) Proceeds from maturities of securities available for sale 131 3,191 Proceeds from sale of securities available for sale 5,933 3,649 Purchase of Federal Home Loan Bank stock (750) (207) Net change in loans (9,360) (18,434) Premiums paid on life insurance 0 (95) Purchases of premises and equipment (747) (2,406) Proceeds from sale of premises and equipment 629 0 Proceeds from sale of real estate owned 30 0 -------------------- ------------------- Net cash used in investing activities (15,183) (24,601) -------------------- ------------------- Financing Activities Net change in Noninterest-bearing, interest-bearing demand and savings deposits 5,960 9,202 Certificates of deposit 9,886 7,034 Proceeds from borrowings 44,000 26,000 Repayment of borrowings (30,500) (19,000) Cash dividends (386) (175) Purchase of stock (140) (1,182) Stock options exercised 95 15 Acquisition of stock for stock benefit plans (22) 0 Advances by borrowers for taxes and insurance 21 26 -------------------- ------------------- Net cash provided by financing activities 28,914 21,920 -------------------- ------------------- Net Change in Cash and Cash Equivalents 17,539 (174) Cash and Cash Equivalents, Beginning of Period 5,641 6,382 -------------------- ------------------- Cash and Cash Equivalents, End of Period $ 23,180 $ 6,208 ==================== =================== Additional Cash Flows and Supplementary Information Interest paid $ 4,354 $ 5,101 Income tax paid 1,012 696 See notes to consolidated condensed financial statements.
RIVER VALLEY BANCORP Notes to Unaudited Consolidated Condensed Financial Statements 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. Note 1: Basis of Presentation The accompanying unaudited consolidated condensed 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-KSB for the year ended December 31, 2001. 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 nine and three-month periods ended September 30, 2002, are not necessarily indicative of the results which may be expected for the entire year. The consolidated condensed balance sheet of the Corporation as of December 31, 2001 has been derived from the audited consolidated balance sheet of the Corporation as of that date. Note 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. Note 3: Earnings Per Share Earnings per share have been computed based upon the weighted average common shares outstanding. Unearned Employee Stock Ownership Plan shares have been excluded from the computation of average common shares outstanding.
Nine Months Ended Nine Months Ended September 30, 2002 September 30, 2001 ------------------ ------------------ Weighted Per Weighted Per Average Share Average Share Income Shares Amount Income Shares Amount ------ ------ ------ ------ ------ ------ (In Thousands, Except Share Amounts) Basic earnings per share Income available to common shareholders $ 1,944 777,042 $ 2.50 $ 1,404 798,923 $ 1.76 =========== =========== Effect of dilutive RRP awards and stock options 31,738 16,701 ------------- --------------- ---------------- -------------- Diluted earnings per share Income available to common shareholders and assumed conversions $ 1,944 808,780 $ 2.40 $ 1,404 815,624 $ 1.72 ============= =============== =========== ================ ============== =========== Three Months Ended Three Months Ended September 30, 2002 September 30, 2001 ------------------ ------------------ Weighted Per Weighted Per Average Share Average Share Income Shares Amount Income Shares Amount ------ ------ ------ ------ ------ ------ (In Thousands, Except Share Amounts) Basic earnings per share Income available to common shareholders $ 682 780,124 $ .87 $ 530 778,635 $ .68 =========== =========== Effect of dilutive RRP awards and stock options 32,868 24,116 ------------- --------------- ---------------- -------------- Diluted earnings per share Income available to common shareholders and assumed conversions $ 682 812,992 $ .84 $ 530 802,751 $ .66 ============= =============== =========== ================ ============== ===========
Note 4: Reclassifications Certain reclassifications have been made to the 2001 consolidated financial statements to conform to the September 30, 2002 presentation. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Forward Looking Statements This Quarterly Report on Form 10-QSB ("Form 10-QSB") contains statements which constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of placeas in this Form 10-QSB and include statements regarding the intent, belief, outlook, estimate or expectations of the Corporation (as defined in the notes to the consolidated condensed financial statements), its directors or its officers primarily with respect to future events and the future financial performance of the Corporation. Readers of this Form 10-QSB are cautioned that any such forward looking statements are not guarantees of future events or performance and involve risks and uncertainties, and that actual results may differ materially from those in the forward looking statements as a result of various factors. The accompanying information contained in this Form 10-QSB identifies important factors that could cause such differences. These factors include changes in interest rates; loss of deposits and loan demand to other financial institutions; substantial changes in financial markets; changes in real estate values and the real estate market; or regulatory changes. Critical Accounting Policies The notes to the consolidated financial statements contain a summary of the Company's significant accounting policies presented on pages 27 through 29 of the Annual Report to Shareholders for the year ended December 31, 2001. Certain of these policies are important to the portrayal of the Company's financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. Management believes that its critical accounting policies include determining the allowance for loan losses and the valuation of mortgage servicing rights. Allowance for loan losses The allowance for loan losses is a significant estimate that can and does change based on management's assumptions about specific borrowers and current general economic and business conditions, among other factors. Management reviews the adequacy of the allowance for loan losses on at least a quarterly basis. The evaluation by management includes consideration of past loss experience, changes in the composition of the loan portfolio, the current condition and amount of loans outstanding, identified problem loans and the probability of collecting all amounts due. The determination of the adequacy of the allowance for loan losses is based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions. A worsening or protracted economic decline would increase the likelihood of additional losses due to credit and market risk and could create the need for additional loss reserves. Valuation of Mortgage Servicing Rights The Company recognizes the rights to service mortgage loans as separate assets in the consolidated balance sheet. The total cost of loans when sold is allocated between loans and mortgage servicing rights based on the relative fair values of each. Mortgage servicing rights are subsequently carried at the lower of the initial carrying value, adjusted for amortization, or fair value. Mortgage servicing rights are evaluated for impairment based on the fair value of those rights. Factors included in the calculation of fair value of the mortgage servicing rights include, estimating the present value of future net cash flows, market loan prepayment speeds for similar loans, discount rates, servicing costs, and other economic factors. Servicing rights are amortized over the estimated period of net servicing revenue. It is likely that these economic factors will change over the life of the mortgage servicing rights, resulting in different valuations of the mortgage servicing rights. The differing valuations will affect the carrying value of the mortgage servicing rights on the consolidated balance sheet as well as the income recorded from loan servicing in the income statement. As of September 30, 2002 and December 31, 2001, mortgage servicing rights had carrying values of $572,000 and $540,000, respectively. Financial Condition At September 30, 2002, the Corporation's assets totaled $223.2 million, an increase of $31.6 million, or 16.5 % from December 31, 2001. The increase in assets resulted primarily from an increase in net loans receivable, including loans held for sale, of $7.2 million and an increase of approximately $5.4 million in investments, which was funded by an increase in deposits of $15.8 million and an increase in borrowed funds of $13.5 million. Liquid assets (i.e., cash and cash equivalents) increased by $17.6 million from December 31, 2001, to a total of $23.2 million at September 30, 2002. The Corporation's consolidated allowance for loan losses totaled $2.0 million on both December 31, 2001 and September 30, 2002, which represented 1.2 % of total loans at both dates. Non-performing loans (defined as loans delinquent greater than 90 days and loans on non-accrual status) totaled $690,000 and $1,013,000 at December 31, 2001 and September 30, 2002, respectively. Although management believes that its allowance for loan losses at September 30, 2002, 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 totaled $161.4 million at September 30, 2002, an increase of $15.8 million, or 10.9 %, compared to total deposits at December 31, 2001. The growth for the nine-month period resulted from the marketing and interest rate strategies. Advances from the Federal Home Loan Bank totaled $25.0 million at December 31, 2001, and $40.0 million on September 30, 2002. The average cost of Federal Home Loan Bank advances at September 30, 2002 was 4.87 %, slightly up from 4.54 % at December 31, 2001, and $10 million in ten year advances were added to the portfolio at the beginning of the third quarter of 2002, which should result in future long-term benefits for the Corporation. Shareholders' equity totaled $20.0 million at September 30, 2002, an increase of $2.0 million, or 11.1 % from $18.0 million at December 31, 2001. The increase resulted primarily from the Corporation's net income, offset by cash dividends and stock repurchases. The Bank is required to maintain minimum regulatory capital pursuant to federal regulations. At September 30, 2002, the Bank's regulatory capital exceeded all applicable regulatory capital requirements. Comparison of Operating Results for the Nine Months Ended September 30, 2002 and 2001 General The Corporation's net income for the nine months ended September 30, 2002, totaled $1.9 million, an increase of $540,000 or 38.5 % from the $1.4 million reported for the period ended September 30, 2001. The increase in income in the 2002 period was primarily attributable to an increase in net interest income of $648,000 and an increase in other income of $1,004,000. These increases were partially offset by an increase in the provision for loan losses of $100,000 and an increase in other expenses of $619,000. Net Interest Income Total interest income for the nine months ended September 30, 2002 amounted to $9.5 million, a decrease of $265,000, or 2.7 %, below the comparable period in 2001, reflecting the effects of an increase in average interest-earning assets outstanding but also a decrease in the average loan rate of approximately 0.68 %. Interest expense on deposits decreased by $1.3 million, or 30.3 %, to a total of $3.1 million for the nine months ended September 30, 2002, due primarily to a decrease in the average rate paid on deposits outstanding year-to-year. Interest expense on borrowings totaled $1.1 million for the nine months ended September 30, 2002, an increase of $425,000, from the comparable period in 2001. This increase resulted primarily from an increase in average borrowings year-to-year. As a result of the foregoing changes in interest income and interest expense, net interest income increased by $648,000, or 13.8 %, for the nine months ended September 30, 2002, as compared to the same period in 2001. Provision for Losses on Loans A provision for losses on loans is charged to income 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 payment, 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 $410,000 provision for losses on loans for the nine months ended September 30, 2002, compared to the $310,000 amount recorded in the 2001 period. The 2002 provision amount was predicated on the increase in the balance of the loan portfolio, coupled with the level of delinquent loans year-to-year. While management believes that the allowance for losses on loans is adequate at September 30, 2002, based upon the available facts and circumstances, there can be no assurance that the loan loss allowance will be adequate to cover losses on non-performing assets in the future. Other Income Other income increased by $1.0 million, during the nine months ended September 30, 2002, as compared to the same period in 2001. The increase was due primarily to the fact that the gain on sale of loans increased by $269,000, a sale of premises added $350,000 and service fees and charges increased $328,000. The Bank sold loans of approximately $43.0 million during the nine months ended September 30, 2002. This increase in loans sold is the result of mortgage rates being at a forty-year low and the ability of the personnel of the Bank to generate a large volume of loans. Other Expense Other expense increased by $619,000, or 19.4 %, during the nine months ended September 30, 2002, as compared to the same period in 2001. The increase was due primarily to the increase in loan volume/administrative expense, both balance sheet and off-balance sheet volume, and general expense increases due to growth. Income Taxes The provision for income taxes totaled $1.3 million for the nine months ended September 30, 2002, an increase of $393,000, or 44.6 %, as compared to the same period in 2001. The effective tax rates were 39.6 % and 38.6% for the nine months ended September 30, 2002 and 2001, respectively. Comparison of Operating Results for the Three Months Ended September 30, 2002 and 2001 General The Corporation's net income for the three months ended September 30, 2002, totaled $682,000, an increase of $152,000, or 28.7 % from the $530,000 of net income reported in the comparable 2001 period. The increase in earnings in the 2002 period was primarily attributable to an increase in net interest income of $157,000 and an increase in other income of $458,000, offset by an increase in other expenses of $311,000. Net Interest Income Total interest income for the three months ended September 30, 2002 amounted to $3.2 million, a decrease of $89,000, or 2.7%, from the comparable quarter in 2001, reflecting the effects of an increase in average interest-earning assets outstanding, coupled with a decrease in the yield year-to-year. Interest income on loans totaled $3.0 million for the three months ended September 30, 2002, a decrease of $175,000, or 5.6 %, from the comparable 2001 quarter. Interest expense on deposits decreased by $430,000, or 30.3 %, to a total of $991,000 for the quarter ended September 30, 2002, due primarily to a decrease in the average rate of deposits outstanding. Interest expense on borrowings totaled $415,000 for the three months ended September 30, 2002, an increase of $184,000 over the comparable quarter in 2001. This increase resulted from an increase in average borrowings outstanding from year-to-year. As a result of the foregoing changes in interest income and interest expense, net interest income increased by $157,000, or 9.4 %, for the three months ended September 30, 2002, as compared to the same quarter in 2001. 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 $150,000 provision for losses on loan for the three months ended September 30, 2002, compared to the $110,000 recorded in the 2001 period. While management believes that the allowance for losses on loans is adequate at September 30, 2002, based upon the available facts and circumstances, there can be no assurance that the loan loss allowance will be adequate to cover losses on non-performing assets in the future. Other Income Other income increased by $458,000, for the three months ended September 30, 2002, as compared to the same period in 2001, due primarily to a $336,000 increase in gains on sale of loans. The Bank sold loans totaling approximately $26.5 million during the third quarter of 2002. Other Expense Other expenses increased by $311,000, or 27.6 %, during the three months ended September 30, 2002, compared to the same period in 2001. The increase was due primarily to the increase in loan volume/administrative expense, both balance sheet and off-balance sheet volume, and general expense increases due to growth. Income Taxes The provision for income taxes totaled $446,000 for the three months ended September 30, 2002, an increase of $112,000, or 33.5 %, as compared to the same period in 2001. This increase resulted primarily from an increase in net income before income taxes of $264,000, or 30.6 %. The effective tax rates were 39.5 % and 38.7 % for the three months ended September 30, 2002 and 2001, respectively. Other The Securities and Exchange Commission maintains a Web site that contains reports, proxy information statements, and other information regarding registrants that file electronically with the Commission, including the Corporation. The address is http://www.sec.gov. Item 3. Controls and Procedures. Within the 90-day period prior to the filing date of this report, an evaluation was carried out under the supervision and with the participation of River Valley Bancorp's management, including our President and Vice President of Finance, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934). Based on their evaluation, our President and Vice President of Finance have concluded that River Valley Bancorp's disclosure controls and procedures are, to the best of their knowledge, effective to ensure that information required to be disclosed by the company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. Subsequent to the date of their evaluation, our President and Vice President of Finance have concluded that there were no significant changes in the company's internal controls or in other factors that could significantly affect its internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses. PART II. OTHER INFORMATION Item 1. Legal Proceedings None. Item 2. Changes in Securities and Use of Proceeds None. Item 3. Defaults Upon Senior Securities. None. Item 4. Submission of Matters to Vote of Security Holders. None. Item 5. Other Information. None. Item 6. Exhibits and Reports on Form 8-K. (a) None (b) No reports on Form 8-K were filed during the quarter September 30, 2002. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Issuer has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. RIVER VALLEY BANCORP Date: November 14, 2002 By: /s/ Matthew P. Forrester ------------------------------------------- Matthew P. Forrester President and Chief Executive Officer Date: November 14, 2002 By: /s/ Larry C. Fouse ------------------------------------------- Larry C. Fouse Vice President of Finance CERTIFICATION I, Matthew P. Forrester, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of River Valley Bancorp; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 14, 2002 /s/ Matthew P. Forrester -------------------------------------- Matthew P. Forrester President and Chief Executive Officer CERTIFICATION I, Larry C. Fouse, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of River Valley Bancorp; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Dated: November 14, 2002 /s/ Larry C. Fouse -------------------------------------- Larry C. Fouse Vice President of Finance CERTIFICATION By signing below, each of the undersigned officers hereby certifies pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his or her knowledge, (i) this report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of River Valley Bancorp. Signed this 14 day of November 2002. /s/ Matthew P. Forrester /s/ Larry C. Fouse - ------------------------------------- -------------------------------------- Matthew P. Forrester Larry C. Fouse President and Chief Executive Officer Vice President of Finance -----END PRIVACY-ENHANCED MESSAGE-----