10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2007
	OR
o	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 registrant as specified in its charter)

Indiana	35-1984567
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
430 Clifty Drive Madison, Indiana	47250
(Address of principal executive offices)	(Zip Code)

(812) 273-4949

(Registrant’s telephone number, including area code)

[None]

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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  ý          No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o          Accelerated filer  o          Non-accelerated filer  ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  o          No  ý

The number of shares of the Registrant’s common stock, without par value, outstanding as of June 30, 2007 was 1,627,933.

RIVER VALLEY BANCORP

FORM 10-Q

INDEX

		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Condensed Balance Sheets	3
	Consolidated Condensed Statements of Income	4
	Consolidated Condensed Statements of Comprehensive Income	5
	Consolidated Condensed Statements 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	9
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	14
Item 4.	Controls and Procedures	15
PART II. OTHER INFORMATION		15
Item 1.	Legal Proceedings	15
Item 1A.	Risk Factors	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item 4.	Submission of Matters to a Vote of Security Holders	16
Item 5.	Other Information	16
Item 6.	Exhibits	16
SIGNATURES		17
EXHIBIT INDEX		18

2

PART I.  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RIVER VALLEY BANCORP

Consolidated Condensed Balance Sheet

	June 30, 2007 (Unaudited)			December 31, 2006
	(In Thousands, Except Share Amounts)
Assets
Cash and due from banks	$	4,790		$	6,838
Interest-bearing demand deposits		7,244			4,736
Fed funds sold		0			234
Cash and cash equivalents		12,034			11,808
Investment securities available for sale		57,718			65,150
Loans held for sale		365			0
Loans		244,914			244,063
Allowance for loan losses		(1,904	)		(2,176	)
Net loans		243,010			241,887
Premises and equipment		7,788			7,813
Federal Home Loan Bank stock		4,550			4,400
Interest receivable		2,115			2,334
Cash surrender value life insurance		7,366			7,222
Other assets		1,760			1,635
Total assets	$	336,706		$	342,249
Liabilities
Deposits
Non-interest-bearing	$	20,973		$	19,340
Interest-bearing		193,404			200,898
Total deposits		214,377			220,238
Borrowings		95,217			95,217
Interest payable		688			705
Other liabilities		2,147			1,942
Total liabilities		312,429			318,102
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 - 1,627,933 and 1,620,431 shares		9,133			9,129
Retained earnings		15,788			15,346
Accumulated other comprehensive loss		(644	)		(328	)
Total shareholders’ equity		24,277			24,147
Total liabilities and shareholders’ equity	$	336,706		$	342,249

See notes to consolidated condensed financial statements.

3

RIVER VALLEY BANCORP

Consolidated Condensed Statement of Income

(Unaudited)

	Six Months Ended June 30,					Three Months Ended June 30,
	2007			2006		2007		2006
	(In Thousands, Except Share Amounts)
Interest Income
Loans receivable	$	8,444			7,697		4,268		3,991
Investment securities		1,288			1,211		629		619
Interest-earning deposits and other		248			286		125		140
Total interest income		9,980			9,194		5,022		4,750
Interest Expense
Deposits		3,708			3,272		1,849		1,757
Borrowings		2,308			1,950		1,158		967
Total interest expense		6,016			5,222		3,007		2,724
Net Interest Income		3,964			3,972		2,015		2,026
Provision for loan losses		96			168		48		84
Net Interest Income After Provision for Loan Losses		3,868			3,804		1,967		1,942
Other Income
Net realized losses on sales of available-for-sale securities		(22	)		0		0		0
Service fees and charges		1,033			962		530		487
Net gains on loan sales		45			55		17		33
Increase in cash value of life insurance		144			98		83		51
Trust Income		128			63		57		31
Other income		70			20		43		24
Total other income		1,398			1,198		730		626
Other Expenses
Salaries and employee benefits		2,093			1,987		1,070		1,002
Net occupancy and equipment expenses		584			583		298		290
Data processing fees		35			55		16		25
Advertising		155			130		88		75
Legal and professional fees		203			99		108		63
Amortization of mortgage servicing rights		161			199		80		100
Other expenses		543			639		282		287
Total other expenses		3,774			3,692		1,942		1,842
Income Before Income Tax		1,492			1,310		755		726
Income tax expense		402			404		197		223
Net Income	$	1,090			906		558		503
Basic earnings per share	$	.67			.57		.34		.31
Diluted earnings per share		.66			.55		.34		.31
Dividends per share		.40			.39		.20		.195

See notes to consolidated condensed financial statements.

4

RIVER VALLEY BANCORP

Consolidated Condensed Statement of Comprehensive Income

(Unaudited)

	Six Months Ended June 30,						Three Months Ended June 30,
	2007			2006			2007			2006
	(In Thousands)
Net income	$	1,090			906			558			503
Other comprehensive income, net of tax
Unrealized losses on securities available for sale
Unrealized holding losses arising during the period, net of tax benefit of $185, $155, $223, and $157		(329	)		(371	)		(402	)		(283	)
Less: Reclassification adjustment for losses included in net income, net of tax benefit of $9, $0, $0, and $0.		(13	)
Comprehensive income	$	774			535			156			220

See notes to consolidated condensed financial statements.

5

RIVER VALLEY BANCORP

Consolidated Condensed Statement of Cash Flows

(Unaudited)

	Six Months Ended June 30,
	2007			2006
	(In Thousands)
Operating Activities
Net income	$	1,090			906
Adjustments to reconcile net income to net cash provided by operating activities
Provision for loan losses		96			168
Depreciation and amortization		294			319
Investment securities gains		22			0
Loans originated for sale in the secondary market		(3,226	)		(2,360	)
Proceeds from sale of loans in the secondary market		2,878			2,197
Gain on sale of loans		(45	)		(55	)
Amortization of net loan origination cost		108			72
Employee Stock Ownership Plan compensation		88			10
Net change in:
Interest receivable		219			38
Interest payable		(17	)		84
Other adjustments		46			(1,084	)
Net cash provided by operating activities		1,553			295
Investing Activities
Purchases of securities available for sale		(5,951	)		(8,908	)
Proceeds from sale of securities available for sale		5,917			0
Proceeds from maturities of securities available for sale		7,016			4,009
Purchase of Federal Home Loan Bank stock		(150	)		0
Net change in loans		(1,389	)		(3,748	)
Purchases of premises and equipment		(274	)		(158	)
Proceeds from sale of foreclosed real estate		0			506
Other investing activities		1			0
Net cash provided by (used in) investing activities		5,170			(8,299	)
Financing Activities
Net change in
Non-interest bearing, interest-bearing demand and savings deposits		(4,320	)		11,970
Certificates of deposit		(1,541	)		774
Short term borrowings		0			(14,565	)
Proceeds from borrowings		28,000			9,000
Repayment of borrowings		(28,000	)		(8,000	)
Cash dividends		(647	)		(620	)
Excess tax benefit on stock options exercised		9			43
Stock options exercised		90			162
Purchase of stock		(183	)		0
Advances by borrowers for taxes and insurance		95			14
Net cash used in financing activities		(6,497	)		(1,222	)
Net Change in Cash and Cash Equivalents		226			(9,226	)
Cash and Cash Equivalents, Beginning of Period		11,808			17,730
Cash and Cash Equivalents, End of Period	$	12,034			8,504
Additional Cash Flows and Supplementary Information
Interest paid	$	6,016			5,138
Income tax paid		220			574

See notes to consolidated condensed financial statements.

6

RIVER VALLEY BANCORP

Notes to Unaudited Consolidated Condensed Financial Statements

River Valley Bancorp (the “Corporation” or the “Company”) 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-Q 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, 2006. 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 and six-month periods ended June 30, 2007, 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, 2006 has been derived from the audited consolidated balance sheet of the Corporation as of that date.

NOTE 2:  PRINCIPLES OF CONSOLIDATION

The consolidated condensed financial statements include the accounts of the Corporation and its subsidiary, the Bank. The Bank currently owns four subsidiaries. Madison First Service Corporation, which was incorporated under the laws of the State of Indiana on July 3, 1973, currently holds land and cash but does not otherwise engage in significant business activities. RVFB Investments, Inc., RVFB Holdings, Inc., and RVFB Portfolio, LLC were established in Nevada the latter part of 2005. They hold and manage a significant portion of the Bank’s investment portfolio. All significant inter-company 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.

	Six Months Ended June 30, 2007						Six Months Ended June 30, 2006
	Income		Weighted Average Shares		Per Share Amount		Income		Weighted Average Shares		Per Share Amount
	(In Thousands, Except Share Amounts)
Basic earnings per share
Income available to common shareholders	$	1,090		1,618,166	$	.67		906		1,598,487	$	.57
Effect of dilutive RRP awards and stock options				27,763						44,201
Diluted earnings per share
Income available to common shareholders and assumed conversions	$	1,090		1,645,929	$	.66		906		1,642,688	$	.55

7

	Three Months Ended June 30, 2007						Three Months Ended June 30, 2006
	Income		Weighted Average Shares		Per Share Amount		Income		Weighted Average Shares		Per Share Amount
	(In Thousands, Except Share Amounts)
Basic earnings per share
Income available to common shareholders	$	558		1,621,493	$	.34		503		1,606,336	$	.31
Effect of dilutive RRP awards and stock options				26,012						40,867
Diluted earnings per share
Income available to common shareholders and assumed conversions	$	558		1,647,506	$	.34		503		1,647,203	$	.31

Options to purchase 5,000 shares of common stock at $22.67 per share were outstanding at June 30, 2007, but were not included in the computation of diluted earnings per share because the option price was greater than the average market price of the common shares.

NOTE 4:  CHANGE IN ACCOUNTING PRINCIPLE

The Company or one of its subsidiaries files income tax returns in the U.S. federal and Indiana jurisdictions.  With few exceptions, the Company is no longer subject to U.S. federal, state and local examinations by tax authorities for years before 2003.

The Company adopted the provisions of the Financial Accounting Standards Board (FASB) Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109, on January 1, 2007.  FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  As a result of the implementation of FIN 48, the Company did not identify any uncertain tax positions that it believes should be recognized in the financial statements.

NOTE 5:  FUTURE ACCOUNTING PRONOUNCEMENTS

In September 2006, the FASB issued Statement No. 157, Fair Value Measurements.  This Statement defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This Statement establishes a fair value hierarchy about the assumptions used to measure fair value and clarifies assumptions about risk and the effect of a restriction on the sale or use of an asset. The standard is effective for fiscal years beginning after November 15, 2007. The Company does not expect that the adoption of SFAS No. 157 will have a material impact on financial condition or results of operations.

In September 2006, the FASB Emerging Issues Task Force (EITF) finalized Issue No. 06−5, Accounting for Purchases of Life Insurance - Determining the Amount That Could Be Realized in Accordance with FASB Technical Bulletin No. 85−4 (Accounting for Purchases of Life Insurance).  This issue requires that a policyholder consider contractual terms of a life insurance policy in determining the amount that could be realized under the insurance contract.  It also requires that if the contract provides for a greater surrender value if all individual policies in a group are surrendered at the same time, that the surrender value be determined based on the assumption that policies will be surrendered on an individual basis.  Lastly, the issue discusses whether the cash surrender value should be discounted when the policyholder is contractually limited in its ability to surrender a policy.  This issue is effective for fiscal years beginning after December 15, 2006.  Adoption of EITF No. 06-5 has not had a material impact on the financial condition of results of operations.

8

On February 15, 2007, the FASB issued its Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of FASB Statement No. 115.  FAS 159 permits entities to elect to report most financial assets and liabilities at their fair value with changes in fair value included in net income.  The fair value option may be applied on an instrument-by-instrument or instrument class-by-class basis.  The option is not available for deposits withdrawable on demand, pension plan assets and obligations, leases, instruments classified as stockholders’ equity, investments in consolidated subsidiaries and variable interest entities and certain insurance policies. The new standard is effective at the beginning of the Company’s fiscal year beginning January 1, 2008, and early application may be elected in certain circumstances.  The Company expects to first apply the new standard at the beginning of its 2008 fiscal year.  The Company does not expect that the adoption of SFAS No. 159 will have a material impact on financial condition or results of operations.

NOTE 6:  RECLASSIFICATIONS

Certain reclassifications have been made to the 2006 consolidated condensed financial statements to conform to the June 30, 2007 presentation.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q ("Form 10-Q") 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 places in this Form 10-Q 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-Q are cautioned that any such those in the forward-looking statements as a result of various factors. The accompanying information contained in this Form 10-Q 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 55 through 58 of the Annual Report to Shareholders for the year ended December 31, 2006. 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 allowance for loan losses represents management’s estimate of probable losses inherent in the Corporation’s loan portfolios. In determining the appropriate amount of the allowance for loan losses, management makes numerous assumptions, estimates and assessments.

9

The Corporation’s strategy for credit risk management includes conservative, centralized credit policies, and uniform underwriting criteria for all loans as well as an overall credit limit for each customer significantly below legal lending limits. The strategy also emphasizes diversification on a geographic, industry and customer level, regular credit quality reviews and quarterly management reviews of large credit exposures and loans experiencing deterioration of credit quality.

The Corporation’s allowance consists of three components: probable losses estimated from individual reviews of specific loans, probable losses estimated from historical loss rates, and probable losses resulting from economic or other deterioration above and beyond what is reflected in the first two components of the allowance.

Larger commercial loans that exhibit probable or observed credit weaknesses are subject to individual review. Where appropriate, reserves are allocated to individual loans based on management’s estimate of the borrower’s ability to repay the loan given the availability of collateral, other sources of cash flow and legal options available to the Corporation. Included in the review of individual loans are those that are impaired as provided in SFAS No. 114, Accounting by Creditors for Impairment of a Loan. Any allowances for impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or fair value of the underlying collateral. The Corporation evaluates the collectibility of both principal and interest when assessing the need for a loss accrual. Historical loss rates are applied to other commercial loans not subject to specific reserve allocations.

Homogenous loans, such as consumer installment and residential mortgage loans are not individually risk graded. Rather, standard credit scoring systems are used to assess credit risks. Reserves are established for each pool of loans based on the expected net charge-offs for one year. Loss rates are based on the average net charge-off history by loan category.

Historical loss rates for commercial and consumer loans may be adjusted for significant factors that, in management’s judgment, reflect the impact of any current conditions on loss recognition. Factors which management considers in the analysis include the effects of the national and local economies, trends in the nature and volume of loans (delinquencies, charge-offs and non-accrual loans), changes in mix, credit score migration comparisons, asset quality trends, risk management and loan administration, changes in the internal lending policies and credit standards, collection practices and examination results from bank regulatory agencies and the Corporation’s internal loan review.

An unallocated reserve is maintained to recognize the imprecision in estimating and measuring loss when evaluating reserves for individual loans or pools of loans. Allowances on individual loans and historical loss rates are reviewed quarterly and adjusted as necessary based on changing borrower and/or collateral conditions and actual collection and charge-off experience.

The Corporation’s primary market area for lending is Clark, Floyd and Jefferson counties in southeastern Indiana and portions of northeastern Kentucky. When evaluating the adequacy of allowance, consideration is given to this regional geographic concentration and the closely associated effect changing economic conditions have on the Corporation’s customers.

The Corporation has not substantively changed any aspect to its overall approach in the determination of the allowance for loan losses. There have been no material changes in assumptions or estimation techniques as compared to prior periods that impacted the determination of the current period allowance.

10

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 June 30, 2007 and December 31, 2006, mortgage servicing rights had carrying values of $391,000 and $525,000, respectively.

FINANCIAL CONDITION

At June 30, 2007, the Corporation’s consolidated assets totaled $336.7 million, a decrease of $5.5 million, or 1.6% from December 31, 2006. The decrease in assets resulted primarily from a $7.4 million decline in the investment portfolio offset in part by a $2.5 million increase in loans, including loans held for sale.  Deposits also declined by $5.9 million due in part to a decline in local municipality deposits.

The Corporation’s consolidated allowance for loan losses totaled $1.9 million and $2.2 million on June 30, 2007 and December 31, 2006, respectively, which represented .78% and .89% of total loans. Non-performing loans (defined as loans delinquent greater than 90 days and loans on non-accrual status) totaled $2,197,000 and $1,114,000 at June 30, 2007 and December 31, 2006 respectively. The increase in non-performing loans from December 31, 2006 to June 30, 2007 was primarily due to an increase in non-performing residential loans which are well collateralized.  Although management believes that its allowance for loan losses at June 30, 2007, 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 $214.4 million at June 30, 2007, a decrease of $5.9 million, or 2.7%, compared to total deposits at December 31, 2006. This change was due primarily to decreases in the level of demand deposits held by local municipalities due to the late collection of tax revenues.

Borrowings remained steady at $95.2 million from December 31, 2006 to June 30, 2007. Of total borrowings, $88.0 million represents FHLB Advances with average rates of 4.63% and 4.69% period to period.

Shareholders’ equity totaled $24.3 million at June 30, 2007, an increase of $130,000, or .54% from the $24.1 million reported at December 31, 2006. The increase in shareholders’ equity was primarily due to net income of $1.1 million offset by dividends of $649,000 and an increase in unrealized losses on securities available for sale of $316,000.

The Bank is required to maintain minimum regulatory capital pursuant to federal regulations. At June 30, 2007, the Bank’s regulatory capital exceeded all applicable regulatory capital requirements.

COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006

GENERAL

The Corporation’s net income for the six months ended June 30, 2007, totaled $1,090,000, an increase of $184,000 or 20.4% from the $906,000 reported for the period ended June 30, 2006. The increase in income in the 2007 period was primarily attributable to increases in non-interest income.

11

NET INTEREST INCOME

Total interest income for the six months ended June 30, 2007 increased by $786,000, or 8.6%, to $10.0 million from the $9.2 million recorded for the same period in 2006.  The increase represents across the board increases, with increases in non-interest income exceeding the increases in non-interest expense.

Total interest expense for the same period nearly matched the increase in interest income with an increase of $795,000, or 15.2%, from $5.2 million at June 30, 2006 to $6.0 million at June 30, 2007.  Of this increase, $436,000 was attributable to interest expense on deposits and $358,000 to interest expense on borrowings.  These increases translate to a 13.3% increase in interest expense on deposits, to $3.7 million for the six months ended June 30, 2007 and 18.4% increase on interest expense on borrowings, to $2.3 million at the same date.

Net Interest Income remained constant at $4.0 million for both June 30, 2007 and the same period of 2006, due primarily to the effective management of the interest margin.

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 $96,000 provision for losses on loans for the six months ended June 30, 2007, as compared to $168,000 for the same period in 2006. The 2007 provision amount was predicated on the increase in the balance of the loan portfolio, coupled with the decrease in the level of delinquent loans year-to-year. While management believes that the allowance for losses on loans is adequate at June 30, 2007, 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 $200,000, during the six months ended June 30, 2007, as compared to the same period in 2006. This change was due to an increase in income from trust department operations of approximately $60,000, over the same period in 2006 due primarily to estate fees collected, increases in service charges and fees of $71,000 over the same period, and $37,000 in revenue from the Bank’s new wealth management division.

OTHER EXPENSE

Other expenses remained constant at $3.7 million, period to period, for June 30, 2007 and June 30, 2006. Period to period increases in personnel costs and professional expenses were offset by decreases in other managed expenses such as data processing expenses and a reduction in the amortization expense for mortgage servicing rights.

INCOME TAXES

The provision for income taxes totaled $402,000 for the six months ended June 30, 2007, in line with the $404,000 for the same period in 2006.  The effective tax rate for the six months ended June 30, 2007 was 26.9% as compared to 30.8% for the same period in 2006.  The decrease was primarily due to an increase in tax-exempt income from cash surrender value life insurance and municipal investments.

12

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2007 AND 2006

GENERAL

The Corporation’s net income for the three months ended June 30, 2007, totaled $558,000, an increase of $55,000, or 10.9% from the $503,000 of net income reported in the comparable 2006 period. The increase represents across the board increases, with increases in non-interest income exceeding increases in non-interest expense.

NET INTEREST INCOME

Total interest income for the three months ended June 30, 2007 amounted to $5.0 million, a increase of $272,000, or 5.7%, from the comparable quarter in 2006, reflecting the effects of an increase in average interest-earning assets outstanding. Interest income on loans totaled $4.3 million for the three months ended June 30, 2007, an increase of $277,000, or 6.9%, from the comparable quarter in 2006.  The average yield on loans at June 30, 2007 was 7.05% compared to 6.79%, an increase of .26%, for the same date in 2006.

Interest expense on deposits experienced a modest modest increase of $92,000, or 5.2%, to a total of $1.9 million for the three months ended June 30, 2007 as compared to the same period in 2006.  Interest expense on borrowings totaled $1.2 million for the three months ended June 30, 2007, an increase of $191,000, or 19.8%, over the comparable quarter in 2006. The increase resulted from an increase in the average borrowings outstanding from year-to-year. The average cost of deposits at June 30, 2007 was 3.84% compared to 3.58% for the same date in 2006, a change of .26%, nearly exactly matching the changes in loan yields over the same period.

As a result of the foregoing offsetting changes in interest income and interest expense, net interest income remained constant at $2.0 million for both three month periods.

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 $48,000 provision for losses on loan for the three months ended June 30, 2007 and $84,000 was recorded in the 2006 period. While management believes that the allowance for losses on loans is adequate at June 30, 2007, 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 $104,000, or 16.7%, for the three months ended June 30, 2007, as compared to the same period in 2006, due to strong income in the trust and wealth management divisions and increased income from service charges and fees.

OTHER EXPENSE

Other expenses increased by $100,000, or 5.4%, during the three months ended June 30, 2007, compared to the same period in 2006. The increase was due to an increase in salaries/benefits due to the growth of the Bank, and professional fees incurred during the period.

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INCOME TAXES

The provision for income taxes totaled $197,000 for the three months ended June 30, 2007, a decrease of $26,000, or 11.8%, as compared to the same period in 2006.   The effective tax rate for the quarter ended June 30, 2007 was 26.1% as compared to 30.7% for the same period in 2006.  The decrease was primarily due to an increase in tax-exempt income from cash surrender value life insurance and municipal investments.

RECENT DEVELOPMENTS

June 20, 2007 the Company’s Board of Directors of River Valley Bancorp notified the Office of Thrift Supervision of their intent to establish a branch at the corner of Paoli Pike and Scottsville Road in Floyd Knobs, Indiana, to be opened mid-year 2008.

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.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

An important part of River Valley Financial Bank’s asset/liability management policy includes examining the interest rate sensitivity of the assets and liabilities and monitoring the expected effects of interest rate changes on its net portfolio value.

Presented below, as of March 31, 2007 and 2006, is an analysis performed by the OTS of River Valley’s interest rate risk as measured by changes in River Valley’s net portfolio value (“NPV”) for instantaneous and sustained parallel shifts in the yield curve, in 100 basis point increments, up 300 basis points and down 200 basis points.

March 31, 2007

Net Portfolio Value									NPV as % of PV of Assets
Changes In Rates		$ Amount			$ Change		% Change		NPV Ratio		Change
		(Dollars in thousands)
+300	bp	$	38,602	$	(1,859	)	-5	%	11.49	%	-16	bp
+200	bp		39,634		(828	)	-2	%	11.66	%	+1	bp
+100	bp		40,597		136		0	%	11.80	%	-15	bp
0	bp		40,462						11.65	%
-100	bp		39,371		(1,090	)	-3	%	11.25	%	-39	bp
-200	bp		37,491		(2,971	)	-7	%	10.66	%	-98	bp

March 31, 2006

Net Portfolio Value									NPV as % of PV of Assets
Changes In Rates		$ Amount			$ Change		% Change		NPV Ratio		Change
		(Dollars in thousands)
+300	bp	$	42,566	$	(277	)	-1	%	13.12	%	+28	bp
+200	bp		42,792		(51	)	0	%	13.07	%	+22	bp
+100	bp		42,953		110		0	%	13.00	%	+15	bp
0	bp		42,843						12.85	%
-100	bp		41,640		(1,203	)	-3	%	12.41	%	-44	bp
-200	bp		39,474		(3,369	)	-8	%	11.72	%	-113	bp

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Management believes at June 30, 2007 there have been no material changes in River Valley’s interest rate sensitive instruments which would cause a material change in the market risk exposures which affect the quantitative and qualitative risk disclosures as presented in Item 7., Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 7A, Quantitative and Qualitative Disclosures About Market Risk, of the Company’s Annual Report on Form 10-K for the period ended December 31, 2006.

ITEM 4.  CONTROLS AND PROCEDURES

A. Evaluation of disclosure controls and procedures . The Corporation’s chief executive officer and chief financial officer, after evaluating the effectiveness of the Corporation’s disclosure controls and procedures (as defined in Sections 13a-15(e) and 15d-15(e) of regulations promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the most recent fiscal quarter covered by this quarterly report (the “Evaluation Date”), have concluded that as of the Evaluation Date, the Corporation’s disclosure controls and procedures were effective in ensuring that information required to be disclosed by the Corporation in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and are designed to ensure that information required to be disclosed in those reports is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

B. Changes in internal control over financial reporting . There were no changes in the Corporation’s internal control over financial reporting identified in connection with the Corporation’s evaluation of controls that occurred during the Corporation’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

On April 27, 2007, Cecilia Means filed a putative class action complaint in the Marion County Superior Court, Marion County, Indiana, on behalf of herself and others who paid funds into a pre-need trust (the “Pre-Need Trust”) for burial services and merchandise from Grandview Memorial Gardens, against the Bank, a former trustee of the Pre-Need Trust; three other banks that serve or have served as trustees of the Pre-Need Trust; and the current and former owners of Grandview Memorial Gardens.  The complaint alleges that the Bank and other trustees did not properly account for funds placed in the Pre-Need Trust and did not properly verify the legitimacy of disbursements from the Pre-Need Trust in violation of certain state statutes and in breach of the trustees’ alleged fiduciary duties.  The complaint is not specific as to the amount of damages sought but states that the plaintiff believes that the Pre-Need Trust has an estimated $4 million in unfunded liabilities. The Bank believes that it has meritorious defenses to the allegations, and the Bank intends to vigorously defend against the litigation.

ITEM 1A.  RISK FACTORS.

There have been no material changes with respect to the risk factors disclosed in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2006.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

None.

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ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.

On April 18, 2007, the Annual Meeting of the Corporation was held.  One director was elected to the following term, by the following votes:

  Charles J. McKay (three year term)   Votes for:  1,402,468   Votes against:  15,978

ITEM 5.  OTHER INFORMATION.

Effective June 19, 2007 the Board of Directors of River Valley Bancorp voted to amend its Code of By-Laws to establish an age limitation of 75 years of age for the election, re-election, appointment or reappointment of any director to the Board. A copy of the Code of By-Laws as amended is attached as Exhibit 3(1) to this Form 10-Q.

ITEM 6.  EXHIBITS.

3(1)	Amended Code of By-Laws of River Valley Bancorp, As Amended July 19, 2007
31(1)	CEO Certification required by 17 C.F.R. Section 240.13a-14(a)
31(2)	CFO Certification required by 17 C.F.R. Section 240.13a-14(a)
32	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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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: August 14, 2007	By:	/s/ Matthew P. Forrester
		Matthew P. Forrester
		President and Chief Executive Officer
Date: August 14, 2007	By:	/s/ Vickie L. Grimes
		Vickie L. Grimes
		Vice President of Finance

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EXHIBIT INDEX

No.	Description	Location
3(1)	Amended Code of By-Laws of River Valley Bancorp, As Amended July 19, 2007	Attached
31(1)	CEO Certification required by 17 C.F.R. Section 240.13a-14(a)	Attached
31(2)	CFO Certification required by 17 C.F.R. Section 240.13a-14(a)	Attached
32	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Attached

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EX-3.1

Exhibit 3(1)

AMENDED CODE OF BY-LAWS

OF

RIVER VALLEY BANCORP

As Amended July 19, 2007

ARTICLE I

Offices

Section 1.  Principal Office.  The principal office (the “Principal Office”) of River Valley Bancorp (the “Corporation”) shall be at 303 Clifty Drive, P.O.  Box 626, Madison, Indiana 47250, or such other place as shall be determined by resolution of the Board of Directors of the Corporation (the “Board”).

Section 2.  Other Offices.  The Corporation may have such other offices at such other places within or without the State of Indiana as the Board may from time to time designate, or as the business of the Corporation may require.

ARTICLE II

Seal

Section 1.  Corporate Seal.  The corporate seal of the Corporation (the “Seal”) shall be circular in form and shall have inscribed thereon the words “River Valley Bancorp” and “INDIANA.” In the center of the seal shall appear the word “Seal.” Use of the Seal or an impression thereof shall not be required, and shall not affect the validity of any instrument whatsoever.

ARTICLE III

Shareholder Meetings

Section 1.  Place of Meeting.  Every meeting of the shareholders of the Corporation (the “Shareholders”) shall be held at the Principal Office, unless a different place is specified in the notice or waiver of notice of such meeting or by resolution of the Board or the Shareholders, in which event such meeting may be held at the place so specified, either within or without the State of Indiana.

Section 2.  Annual Meeting.  The annual meeting of the Shareholders (the “Annual Meeting”) shall be held each year at 3:00 o’clock P.M.  on the third Wednesday in April (or, if such day is a legal holiday, on the next succeeding day not a legal holiday), for the purpose of electing directors of the Corporation (“Directors”) and for the transaction of such other business as may legally come before the Annual Meeting.  If for any reason the Annual Meeting shall not be held at the date and time herein provided, the same may be held at any time thereafter, or the business to be transacted at such Annual Meeting may be transacted at any special meeting of the Shareholders (a “Special Meeting”) called for that purpose.

Section 3.  Notice of Annual Meeting.  Written or printed notice of the Annual Meeting, stating the date, time and place thereof, shall be delivered or mailed by the Secretary or an Assistant Secretary to each Shareholder of record entitled to notice of such Meeting, at such

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address as appears on the records of the Corporation, at least ten and not more than seventy days before the date of such Meeting.

Section 4.  Special Meetings.  Special Meetings, for any purpose or purposes (unless otherwise prescribed by law), may be called by only the Chairman of the Board of Directors (the “Chairman”), if any, or by the Board, pursuant to a resolution adopted by a majority of the total number of Directors of the Corporation, to vote on the business proposed to be transacted thereat.  All requests for Special Meetings shall state the purpose or purposes thereof, and the business transacted at such Meeting shall be confined to the purposes stated in the call and matters germane thereto.

Section 5.  Notice of Special Meetings.  Written or printed notice of all Special Meetings, stating the date, time, place and purpose or purposes thereof, shall be delivered or mailed by the Secretary or the President or any Vice President calling the Meeting to each Shareholder of record entitled to notice of such Meeting, at such address as appears on the records of the Corporation, at least ten and not more than sixty days before the date of such Meeting.

Section 6.  Waiver of Notice of Meetings.  Notice of any Annual or Special Meeting (a “Meeting”) may be waived in writing by any Shareholder, before or after the date and time of the Meeting specified in the notice thereof, by a written waiver delivered to the Corporation for inclusion in the minutes or filing with the corporate records.  A Shareholder’s attendance at any Meeting in person or by proxy shall constitute a waiver of (a) notice of such Meeting, unless the Shareholder at the beginning of the Meeting objects to the holding of or the transaction of business at the Meeting, and (b) consideration at such Meeting of any business that is not within the purpose or purposes described in the Meeting notice, unless the Shareholder objects to considering the matter when it is presented.

Section 7.  Quorum.  At any Meeting, the holders of a majority of the voting power of all shares of the Corporation (the “Shares”) issued and outstanding and entitled to vote at such Meeting (after giving effect to the provisions in Article 11 of the Articles of Incorporation of the Corporation, as the same may, from time to time, be amended (the “Articles”)), represented in person or by proxy, shall constitute a quorum for the election of Directors or for the transaction of other business, unless otherwise provided by law, the Articles or this Code of By-Laws, as the same may, from time to time, be amended (these “By-Laws”).  If, however, a quorum shall not be present or represented at any Meeting, the Shareholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the Meeting from time to time, without notice other than announcement at the Meeting of the date, time and place of the adjourned Meeting, unless the date of the adjourned Meeting requires that the Board fix a new record date (the “Record Date”) therefor, in which case notice of the adjourned Meeting shall be given.  At such adjourned Meeting, if a quorum shall be present or represented, any business may be transacted that might have been transacted at the Meeting as originally scheduled.

Section 8.  Voting.  At each Meeting, every Shareholder entitled to vote shall have one vote for each Share standing in his name on the books of the Corporation as of the Record Date fixed by the Board for such Meeting, except as otherwise provided by law or the Articles, and except that no Share shall be voted at any Meeting upon which any installment is due and unpaid and no share which is not entitled to vote pursuant to Article 11 of the Articles shall be voted at any Meeting.  Voting for Directors and, upon the demand of any Shareholder, voting upon any question properly before a Meeting, shall be by ballot.  A plurality vote shall be necessary to

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elect any Director, and on all other matters, the action or a question shall be approved if the number of votes cast thereon in favor of the action or question exceeds the number of votes cast opposing the action or question, except as otherwise provided by law or the Articles.

Section 9.  Shareholder List.  The Secretary shall prepare before each Meeting a complete list of the Shareholders entitled to notice of such Meeting, arranged in alphabetical order by class of Shares (and each series within a class), and showing the address of, and the number of Shares entitled to vote held by, each Shareholder (the “Shareholder List”).  Beginning five business days before the Meeting and continuing throughout the Meeting, the Shareholder List shall be on file at the Principal Office or at a place identified in the Meeting notice in the city where the Meeting will be held, and shall be available for inspection by any Shareholder entitled to vote at the Meeting.  On written demand, made in good faith and for a proper purpose and describing with reasonable particularity the Shareholder’s purpose, and if the Shareholder List is directly connected with the Shareholder’s purpose, a Shareholder (or such Shareholder’s agent or attorney authorized in writing) shall be entitled to inspect and to copy the Shareholder List, during regular business hours and at the Shareholder’s expense, during the period the Shareholder List is available for inspection.  The original stock register or transfer book (the “Stock Book”), or a duplicate thereof kept in the State of Indiana, shall be the only evidence as to who are the Shareholders entitled to examine the Shareholder List, or to notice of or to vote at any Meeting.

Section 10.  Proxies.  A Shareholder may vote either in person or by proxy executed in writing by the Shareholder or a duly authorized attorney-in-fact.  No proxy shall be valid after eleven months from the date of its execution, unless a shorter or longer time is expressly provided therein.

Section 11.  Notice of Shareholder Business.  At an Annual Meeting of the Shareholders, only such business shall be conducted as shall have been properly brought before the Meeting.  To be properly brought before an Annual Meeting, business must be (a) specified in the notice of Meeting (or any supplement thereto) given by or at the direction of the Board, (b) otherwise properly brought before the Meeting by or at the direction of the Board, or (c) otherwise properly brought before the Meeting by a Shareholder.  For business to be properly brought before an Annual Meeting by a Shareholder, the Shareholder must have the legal right and authority to make the Proposal for consideration at the Meeting and the Shareholder must have given timely notice thereof in writing to the Secretary of the Corporation.  To be timely, a Shareholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation, not less than 120 days prior to the Meeting; provided, however, that in the event that less than 130 days’ notice or prior public disclosure of the date of the Meeting is given or made to Shareholders (which notice or public disclosure shall include the date of the Annual Meeting specified in these By-Laws, if such By-Laws have been filed with the Securities and Exchange Commission and if the Annual Meeting is held on such date), notice by the Shareholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the Annual Meeting was mailed or such public disclosure was made.  A Shareholder’s notice to the Secretary shall set forth as to each matter the Shareholder proposes to bring before the Annual Meeting (a) a brief description of the business desired to be brought before the Annual Meeting and the reasons for conducting such business at the Annual Meeting, (b) the name and record address of the Shareholders proposing such business, (c) the class and number of shares of the Corporation which are beneficially

3

owned by the Shareholder, and (d) any material interest of the Shareholder in such business.  Notwithstanding anything in these By-Laws to the contrary, no business shall be conducted at an Annual Meeting except in accordance with the procedures set forth in this Section 11.  The Chairman of an Annual Meeting shall, if the facts warrant, determine and declare to the Meeting that business was not properly brought before the Meeting and in accordance with the provisions of this Section 11, and if he should so determine, he shall so declare to the Meeting and any such business not properly brought before the Meeting shall not be transacted.  At any Special Meeting of the Shareholders, only such business shall be conducted as shall have been brought before the Meeting by or at the direction of the Board of Directors.

Section 12.  Notice of Shareholder Nominees.  Only persons who are nominated in accordance with the procedures set forth in this Section 12 shall be eligible for election as Directors.  Nominations of persons for election to the Board may be made at a Meeting of Shareholders by or at the direction of the Board of Directors, by any nominating committee or person appointed by the Board of Directors or by any Shareholder of the Corporation entitled to vote for the election of Directors at the Meeting who complies with the notice procedures set forth in this Section 12.  Such nominations, other than those made by or at the direction of the Board, shall be made pursuant to timely notice in writing to the Secretary of the Corporation.  To be timely, a Shareholder’s notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than 120 days prior to the Meeting; provided, however, that in the event that less than 130 days’ notice or prior public disclosure of the date of the Meeting is given or made to Shareholders (which notice or public disclosure shall include the date of the Annual Meeting specified in these By-Laws, if such By-Laws have been filed with the Securities and Exchange Commission and if the Annual Meeting is held on such date), notice by the Shareholders to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the Meeting was mailed or such public disclosure was made.  Such Shareholder’s notice shall set forth (a) as to each person whom the Shareholder proposes to nominate for election or re-election as a Director, (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of the Corporation which are beneficially owned by such person and (iv) any other information relating to such person that is required to be disclosed in solicitations of proxies for election of Directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including without limitation such person’s written consent to being named in the proxy statement as a nominee and to serving as a Director if elected); and (b) as to the Shareholder giving the notice (i) the name and record address of such Shareholder and (ii) the class and number of shares of the Corporation which are beneficially owned by such Shareholder.  No person shall be eligible for election as a Director of the Corporation unless nominated in accordance with the procedures set forth in this Section 12.  The Chairman of the Meeting shall, if the facts warrant, determine and declare to the Meeting that a nomination was not made in accordance with the procedures prescribed by these By-Laws, and if he should so determine, he shall so declare to the Meeting and the defective nomination shall be disregarded.

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ARTICLE IV

Board of Directors

Section 1.  Number.  The business and affairs of the Corporation shall be managed by a Board of not less than five (5) nor more than fifteen (15) Directors, as may be specified from time to time by resolution adopted by a majority of the total number of the Corporation’s Directors, divided into three classes as provided in the Articles.  If and whenever the Board of Directors has not specified the number of Directors, the number shall be six.  Directors (a) must have their primary domicile in either Jefferson County, Indiana or Trimble County, Kentucky, and (b) must have a loan or deposit relationship with Madison First Federal Savings & Loan Association which they have maintained for at least a continuous period of twelve (12) months immediately prior to their nomination to the Board.  In addition, each Director who is not an employee of the Corporation or any of its subsidiaries must have served as a member of a civic or community organization based in Jefferson County, Indiana or Trimble County, Kentucky for at least a continuous period of twelve (12) months during the five (5) years prior to his or her nomination to the Board.  The Board may elect or appoint, from among its members, a Chairman of the Board (the “Chairman”), who need not be an officer (an “Officer”) or employee of the Corporation.  The Chairman, if elected or appointed, shall preside at all Shareholder Meetings and Board Meetings and shall have such other powers and perform such other duties as are incident to such position and as may be assigned by the Board.

Section 2.  Vacancies and Removal.  Any vacancy occurring in the Board shall be filled as provided in the Articles.  Shareholders shall be notified of any increase in the number of Directors and the name, principal occupation and other pertinent information about any Director elected by the Board to fill any vacancy.  Any Director, or the entire Board, may be removed from office only as provided in the Articles.

Section 3.  Powers and Duties.  In addition to the powers and duties expressly conferred upon it by law, the Articles or these By-Laws, the Board may exercise all such powers of the Corporation and do all such lawful acts and things as are not inconsistent with the law, the Articles or these By-Laws.

Section 4.  Annual Board Meeting.  Unless otherwise determined by the Board, the Board shall meet each year immediately after the Annual Meeting, at the place where such Meeting has been held, for the purpose of organization, election of Officers of the Corporation (the “Officers”) and consideration of any other business that may properly be brought before such annual meeting of the Board (the “Annual Board Meeting”).  No notice shall be necessary for the holding of the Annual Board Meeting.  If the Annual Board Meeting is not held as above provided, the election of Officers may be held at any subsequent duly constituted meeting of the Board (a “Board Meeting”).

Section 5.  Regular Board Meetings.  Regular meetings of the Board (“Regular Board Meetings”) may be held at stated times or from time to time, and at such place, either within or without the State of Indiana, as the Board may determine, without call and without notice.

Section 6.  Special Board Meetings.  Special meetings of the Board (“Special Board Meetings”) may be called at any time or from time to time, and shall be called on the written request of at least two Directors, by the Chairman or the President, by causing the Secretary or any Assistant Secretary to give to each Director, either personally or by mail, telephone, telegraph, teletype or other form of wire or wireless communication at least two days’ notice of

5

the date, time and place of such Meeting.  Special Board Meetings shall be held at the Principal Office or at such other place, within or without the State of Indiana, as shall be specified in the respective notices or waivers of notice thereof.

Section 7.  Waiver of Notice and Assent.  A Director may waive notice of any Board Meeting before or after the date and time of the Board Meeting stated in the notice by a written waiver signed by the Director and filed with the minutes or corporate records.  A Director’s attendance at or participation in a Board Meeting shall constitute a waiver of notice of such Meeting and assent to any corporate action taken at such Meeting, unless (a) the Director at the beginning of such Meeting (or promptly upon his arrival) objects to holding of or transacting business at the Meeting and does not thereafter vote for or assent to action taken at the Meeting; (b) the Director’s dissent or abstention from the action taken is entered in the minutes of such Meeting; or (c) the Director delivers written notice of his dissent or abstention to the presiding Director at such Meeting before its adjournment, or to the Secretary immediately after its adjournment.  The right of dissent or abstention is not available to a Director who votes in favor of the action taken.

Section 8.  Quorum.  At all Board Meetings, a majority of the number of Directors designated for the full Board (the “Full Board”) shall be necessary to constitute a quorum for the transaction of any business, except (a) that for the purpose of filling of vacancies a majority of Directors then in office shall constitute a quorum, and (b) that a lesser number may adjourn the Meeting from time to time until a quorum is present.  The act of a majority of the Board present at a Meeting at which a quorum is present shall be the act of the Board, unless the act of a greater number is required by law, the Articles or these By-Laws.

Section 9.  Audit and Other Committees of the Board.  The Board shall, by resolution adopted by a majority of the Full Board, designate an Audit Committee comprised of two or more Directors, which shall have such authority and exercise such duties as shall be provided by resolution of the Board.  The Board may, by resolution adopted by such majority, also designate other regular or special committees of the Board (“Committees”), in each case comprised of two or more Directors and to have such powers and exercise such duties as shall be provided by resolution of the Board.

Section 10.  Resignations.  Any Director may resign at any time by giving written notice to the Board, The Chairman, the President or the Secretary.  Any such resignation shall take effect when delivered unless the notice specifies a later effective date.  Unless otherwise specified in the notice, the acceptance of such resignation shall not be necessary to make it effective.

Section 11.  Age Limitations.  No person seventy-five (75) years of age or older shall be eligible for election, re-election, appointment or reappointment to the Board.  No Director shall serve as such beyond the Annual Meeting of the Corporation immediately following the Director becoming seventy-five (75) years of age.

ARTICLE V

Officers

Section 1.  Officers.  The Officers shall be the President, one or more Vice Presidents, the Secretary and the Treasurer, and may include one or more Assistant Secretaries, one or more Assistant Treasurers, a Comptroller and one or more Assistant Comptrollers.  Any two or more

6

offices may be held by the same person.  The Board may from time to time elect or appoint such other Officers as it shall deem necessary, who shall exercise such powers and perform such duties as may be prescribed from time to time by these By-Laws or, in the absence of a provision in these By-Laws in respect thereto, as may be prescribed from time to time by the Board.

Section 2.  Election of Officers.  The Officers shall be elected by the Board at the Annual Board Meeting and shall hold office for one year or until their respective successors shall have been duly elected and shall have qualified; provided, however, that the Board may at any time elect one or more persons to new or different offices and/or change the title, designation and duties and responsibilities of any of the Officers consistent with the law, the Articles and these By-Laws.

Section 3.  Vacancies; Removal.  Any vacancy among the Officers may be filled for the unexpired term by the Board.  Any Officer may be removed at any time by the affirmative vote of a majority of the Full Board.

Section 4.  Delegation of Duties.  In the case of the absence, disability, death, resignation or removal from office of any Officer, or for any other reason that the Board shall deem sufficient, the Board may delegate, for the time being, any or all of the powers or duties of such Officer to any other Officer or to any Director.

Section 5.  President.  The President shall be a Director and, subject to the control of the Board, shall have general charge of and supervision and authority over the business and affairs of the Corporation, and shall have such other powers and perform such other duties as are incident to this office and as may be assigned to him by the Board.  In the case of the absence or disability of the Chairman or if no Chairman shall be elected or appointed by the Board, the President shall preside at all Shareholder Meetings and Board Meetings.

Section 6.  Vice Presidents.  Each of the Vice Presidents shall have such powers and perform such duties as may be prescribed for him by the Board or delegated to him by the President.  In the case of the absence, disability, death, resignation or removal from office of the President, the powers and duties of the President shall, for the time being, devolve upon and be exercised by the Executive Vice President, if there be one, and if not, then by such one of the Vice Presidents as the Board or the President may designate, or, if there be but one Vice President, then upon such Vice President; and he shall thereupon, during such period, exercise and perform all of the powers and duties of the President, except as may be otherwise provided by the Board.

Section 7.  Secretary.  The Secretary shall have the custody and care of the Seal, records, minutes and the Stock Book of the Corporation; shall attend all Shareholder Meetings and Board Meetings, and duly record and keep the minutes of their proceedings in a book or books to be kept for that purpose; shall give or cause to be given notice of all Shareholder Meetings and Board Meetings when such notice shall be required; shall file and take charge of all papers and documents belonging to the Corporation; and shall have such other powers and perform such other duties as are incident to the office of secretary of a business corporation, subject at all times to the direction and control of the Board and the President.

Section 8.  Assistant Secretaries.  Each of the Assistant Secretaries shall assist the Secretary in his duties and shall have such other powers and perform such other duties as may be prescribed for him by the Board or delegated to him by the President.  In case of the absence,

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disability, death, resignation or removal from office of the Secretary, his powers and duties shall, for the time being, devolve upon such one of the Assistant Secretaries as the Board, the President or the Secretary may designate, or, if there be but one Assistant Secretary, then upon such Assistant Secretary; and he shall thereupon, during such period, exercise and perform all of the powers and duties of the Secretary, except as may be otherwise provided by the Board.

Section 9.  Treasurer.  The Treasurer shall have control over all records of the Corporation pertaining to moneys and securities belonging to the Corporation; shall have charge of, and be responsible for, the collection, receipt, custody and disbursements of funds of the Corporation; shall have the custody of all securities belonging to the Corporation; shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation; and shall disburse the funds of the Corporation as may be ordered by the Board, taking proper receipts or making proper vouchers for such disbursements and preserving the same at all times during his term of office.  When necessary or proper, he shall endorse on behalf of the Corporation all checks, notes or other obligations payable to the Corporation or coming into his  possession for or on behalf of the Corporation, and shall deposit the funds arising therefrom, together with all other funds and valuable effects of the Corporation coming into his possession, in the name and the credit of the Corporation in such depositories as the Board from time to time shall direct, or in the absence of such action by the Board, as may be determined by the President or any Vice President.  If the Board has not elected a Comptroller or an Assistant Comptroller, or in the absence or disability of the Comptroller and each Assistant Comptroller or if, for any reason, a vacancy shall occur in such offices, then during such period the Treasurer shall have, exercise and perform all of the powers and duties of the Comptroller.  The Treasurer shall also have such other powers and perform such other duties as are incident to the office of treasurer of a business corporation, subject at all times to the direction and control of the Board and the President.

If required by the Board, the Treasurer shall give the Corporation a bond, in such an amount and with such surety or sureties as may be ordered by the Board, for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.

Section 10.  Assistant Treasurers.  Each of the Assistant Treasurers shall assist the Treasurer in his duties, and shall have such other powers and perform such other duties as may be prescribed for him by the Board or delegated to him by the President.  In case of the absence, disability, death, resignation or removal from office of the Treasurer, his powers and duties shall, for the time being, devolve upon such one of the Assistant Treasurers as the Board, the President or the Treasurer may designate, or, if there be but one Assistant Treasurer, then upon such Assistant Treasurer; and he shall thereupon, during such period, exercise and perform all the powers and duties of the Treasurer except as may be otherwise provided by the Board.  If required by the Board, each Assistant Treasurer shall likewise give the Corporation a bond, in such amount and with such surety or sureties as may be ordered by the Board, for the same purposes as the bond that may be required to be given by the Treasurer.

Section 11.  Comptroller.  The Comptroller shall have direct control over all accounting records of the Corporation pertaining to moneys, properties, materials and supplies, including the bookkeeping and accounting departments; shall have direct supervision over the accounting

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records in all other departments pertaining to moneys, properties, materials and supplies; shall render to the President and the Board, at Regular Board Meetings or whenever the same shall be required, an account of all his transactions as Comptroller and of the financial condition of the Corporation; and shall have such other powers and perform such other duties as are incident to the office of comptroller of a business corporation, subject at all times to the direction and control of the Board and the President.

Section 12.  Assistant Comptrollers.  Each of the Assistant Comptrollers shall assist the Comptroller in his duties, and shall have such other powers and perform such other duties as may be prescribed for him by the Board or delegated to him by the President.  In case of the absence, disability, death, resignation or removal from office of the Comptroller, his powers and duties shall, for the time being, devolve upon such one of the Assistant Comptrollers as the Board, the President or the Comptroller may designate, or, if there be but one Assistant Comptroller, then upon such Assistant Comptroller; and he shall thereupon, during such period, exercise and perform all the powers and duties of the Comptroller, except as may be otherwise provided by the Board.

Section 13.  Age Limitations.  No person seventy (70) years of age or older shall be eligible for election, reelection, appointment, or reappointment as an Officer of the Corporation.  No Officer shall serve beyond the Annual Meeting of the Corporation immediately following the Officer becoming seventy (70) years of age.

ARTICLE VI

Certificates for Shares

Section 1.  Certificates.  Certificates for Shares (“Certificates”) shall be in such form, consistent with law and the Articles, as shall be approved by the Board.  Certificates for each class, or series within a class, of Shares, shall be numbered consecutively as issued.  Each Certificate shall state the name of the Corporation and that it is organized under the laws of the State of Indiana; the name of the registered holder; the number and class and the designation of the series, if any, of the Shares represented thereby; and a summary of the designations, relative rights, preferences and limitations applicable to such class and, if applicable, the variations in rights, preferences and limitations determined for each series and the authority of the Board to determine such variations for future series; provided, however, that such summary may be omitted if the Certificate states conspicuously on its front or back that the Corporation will furnish the Shareholder such information upon written request and without charge.  Each Certificate shall be signed (either manually or in facsimile) by (i) the President or a Vice President and (ii) the Secretary or an Assistant Secretary, or by any two or more Officers that may be designated by the Board, and may have affixed thereto the Seal, which may be a facsimile, engraved or printed.

Section 2.  Record of Certificates.  Shares shall be entered in the Stock Book as they are issued, and shall be transferable on the Stock Book by the holder thereof in person, or by his attorney duly authorized thereto in writing, upon the surrender of the outstanding Certificate therefor properly endorsed.

Section 3.  Lost or Destroyed Certificates.  Any person claiming a Certificate to be lost or destroyed shall make affidavit or affirmation of that fact and, if the Board or the President shall so require, shall give the Corporation and/or the transfer agents and registrars, if they shall

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so require, a bond of indemnity, in form and with one or more sureties satisfactory to the Board or the President and/or the transfer agents and registrars, in such amount as the Board or the President may direct and/or the transfer agents and registrars may require, whereupon a new Certificate may be issued of the same tenor and for the same number of Shares as the one alleged to be lost or destroyed.

Section 4.  Shareholder Addresses.  Every Shareholder shall furnish the Secretary with an address to which notices of Meetings and all other notices may be served upon him or mailed to him, and in default thereof notices may be addressed to him at his last known address or at the Principal Office.

ARTICLE VII

Corporate Books and Records

Section 1.  Places of Keeping.  Except as otherwise provided by law, the Articles or these By-Laws, the books and records of the Corporation (including the “Corporate Records,” as defined in the Articles) may be kept at such place or places, within or without the State of Indiana, as the Board may from time to time by resolution determine or, in the absence of such determination by the Board, as shall be determined by the President.

Section 2.  Stock Book.  The Corporation shall keep at the Principal Office the original Stock Book or a duplicate thereof, or, in case the Corporation employs a stock registrar or transfer agent within or without the State of Indiana, another record of the Shareholders in a form that permits preparation of a list of the names and addresses of all the Shareholders, in alphabetical order by class of Shares, stating the number and class of Shares held by each Shareholder (the “Record of Shareholders”).

Section 3.  Inspection of Corporate Records.  Any Shareholder (or the Shareholder’s agent or attorney authorized in writing) shall be entitled to inspect and copy at his expense, after giving the Corporation at least five business days’ written notice of his demand to do so, the following Corporate Records: (1) the Articles; (2) these By-Laws; (3) minutes of all Shareholder Meetings and records of all actions taken by the Shareholders without a meeting (collectively, “Shareholders Minutes”) for the prior three years; (4) all written communications by the Corporation to the Shareholders including the financial statements furnished by the Corporation to the Shareholders for the prior three years; (5) a list of the names and business addresses of the current Directors and the current Officers; and (6) the most recent Annual Report of the Corporation as filed with the Secretary of State of Indiana.  Any Shareholder (or the Shareholder’s agent or attorney authorized in writing) shall also be entitled to inspect and copy at his expense, after giving the Corporation at least five business days’ written notice of his demand to do so, the following Corporate Records, if his demand is made in good faith and for a proper purpose and describes with reasonable particularity his purpose and the records he desires to inspect, and the records are directly connected with his purpose: (1) to the extent not subject to inspection under the previous sentence, Shareholders Minutes, excerpts from minutes of Board Meetings and of Committee meetings, and records of any actions taken by the Board or any Committee without a meeting; (2) appropriate accounting records of the Corporation; and (3) the Record of Shareholders.

Section 4.  Record Date.  The Board may, in its discretion, fix in advance a Record Date not more than seventy days before the date (a) of any Shareholder Meeting, (b) for the payment

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of any dividend or the making of any other distribution, (c) for the allotment of rights, or (d) when any change or conversion or exchange of Shares shall go into effect.  If the Board fixes a Record Date, then only Shareholders who are Shareholders of record on such Record Date shall be entitled (a) to notice of and/or to vote at any such Meeting, (b) to receive any such dividend or other distribution, (c) to receive any such allotment of rights, or (d) to exercise the rights in respect of any such change, conversion or exchange of Shares, as the case may be, notwithstanding any transfer of Shares on the Stock Book after such Record Date.

Section 5.  Transfer Agents; Registrars.  The Board may appoint one or more transfer agents and registrars for its Shares and may require all Certificates to bear the signature either of a transfer agent or of a registrar, or both.

ARTICLE VIII

Checks, Drafts, Deeds and Shares of Stock

Section 1.  Checks, Drafts, Notes, Etc.  All checks, drafts, notes or orders for the payment of money of the Corporation shall, unless otherwise directed by the Board or otherwise required by law, be signed by one or more Officers as authorized in writing by the President.  In addition, the President may authorize any one or more employees of the Corporation (“Employees”) to sign checks, drafts and orders for the payment of money not to exceed specific maximum amounts as designated in writing by the President for any one check, draft or order.  When so authorized by the President, the signature of any such Officer or Employee may be a facsimile signature.

Section 2.  Deeds, Notes, Bonds, Mortgages, Contracts, Etc.  All deeds, notes, bonds and mortgages made by the Corporation, and all other written contracts and agreements, other than those executed in the ordinary course of corporate business, to which the Corporation shall be a party, shall be executed in its name by the President, a Vice President or any other Officer so authorized by the Board and, when necessary or required, the Secretary or an Assistant Secretary shall attest the execution thereof.  All written contracts and agreements into which the Corporation enters in the ordinary course of corporate business shall be executed by any Officer or by any other Employee designated by the President or a Vice President to execute such contracts and agreements.

Section 3.  Sale or Transfer of Stock.  Subject always to the further orders and directions of the Board, any share of stock issued by any corporation and owned by the Corporation (including reacquired Shares of the Corporation) may, for sale or transfer, be endorsed in the name of the Corporation by the President or a Vice President, and said endorsement shall be duly attested by the Secretary or an Assistant Secretary either with or without affixing thereto the Seal.

Section 4.  Voting of Stock of Other Corporations.  Subject always to the further orders and directions of the Board, any share of stock issued by any other corporation and owned or controlled by the Corporation (an “Investment Share”) may be voted at any shareholders’ meeting of such other corporation by the President or by a Vice President.  Whenever, in the judgment of the President, it is desirable for the Corporation to execute a proxy or give a shareholder’s consent in respect of any Investment Share, such proxy or consent shall be executed in the name of the Corporation by the President or a Vice President, and, when necessary or required, shall be attested by the Secretary or an Assistant Secretary either with or

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without affixing thereto the Seal.  Any person or persons designated in the manner above stated as the proxy or proxies of the Corporation shall have full right, power and authority to vote an Investment Share the same as such Investment Share might be voted by the Corporation.

ARTICLE IX

Fiscal Year

Section 1.  Fiscal Year.  The Corporation’s fiscal year shall begin on January 1 of each year and end on December 31 of the same year.

ARTICLE X

Amendments

Section 1.  Amendments.  These By-Laws may be altered, amended or repealed, in whole or in part, and new By-Laws may be adopted, at any Board Meeting by the affirmative vote of a majority of the Full Board.

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EX-31.1

Exhibit 31(1)

CERTIFICATION

I, Matthew P. Forrester, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of River Valley Bancorp;

2.   Based on my knowledge, this 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 report;

3.   Based on my knowledge, the financial statements, and other financial information included in this 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 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-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 14, 2007	/s/ Matthew P. Forrester
	Matthew P. Forrester
	President and Chief Executive Officer

EX-31.2

Exhibit 31(2)

CERTIFICATION

I, Vickie L. Grimes, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of River Valley Bancorp;

2.   Based on my knowledge, this 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 report;

3.   Based on my knowledge, the financial statements, and other financial information included in this 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 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-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  August 14, 2007	/s/ Vickie L. Grimes
	Vickie L. Grimes
	Vice President of Finance

EX-32

Exhibit 32

CERTIFICATION

By signing below, each of the undersigned officers hereby certifies pursuant to 18 U.S.C. § 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 14th day of August 2007.

/s/ Matthew P. Forrester	/s/ Vickie L. Grimes
Matthew P. Forrester	Vickie L. Grimes
President and Chief Executive Officer	Vice President of Finance