8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):  July 15, 2014
River Valley Bancorp
(Exact Name of Registrant as Specified in Its Charter)
Indiana	0-21765	35-1984567
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
430 Clifty Drive, P.O. Box 1590, Madison, Indiana		47250-0590
(Address of Principal Executive Offices)		(Zip Code)
(812) 273-4949
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01  Entry into a Material Definitive Agreement.

On July 15, 2014, the Board of Directors of River Valley Financial Bank (the “Bank”), the wholly owned subsidiary of River Valley Bancorp (the “Company”) amended the 2014 River Valley Financial Bank Incentive Plan (the “2014 Plan”). The 2014 Plan was adopted in December 2013 to provide target cash incentive awards for 2014 for the Bank’s Chief Executive Officer, Executive Vice President, Senior Officers, Vice Presidents, Internal Auditor, Compliance Officer, Executive Administrative Assistant, Loan Officers and Wealth Management Officers.

Under the 2014 Plan, incentive payments based on a percentage of an employee’s base salary will be made based on achievement of threshold, targeted or maximum expected performance goals in several areas, including total shareholder return, loan portfolio growth, profitability and asset quality targets. Awards are earned as of December 31, 2014, and will be paid 75% on January 31, 2015, with 25% paid one year later, subject to certain forfeiture, recapture and clawback provisions.

The 2014 Plan was amended only to change the definition of “total shareholder return” to provide that the period for measuring price appreciation of the stock value of the Company for 2014 shall begin June 30, 2014, rather than December 31, 2013 (still ending on December 31, 2014), because of the impact the Company’s recent public offering has had on the market price for the Company’s common stock.

The foregoing description of the 2014 Plan, as amended, does not purport to be complete and is qualified in its entirety by reference to the full text of the 2014 Plan which is filed herewith as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.

Item 2.02  Results of Operations and Financial Condition.

On July 15, 2014, the Company issued a press release reporting its results of operations and financial condition for the second quarter ended June 30, 2014.

A copy of the press release is attached as Exhibit 99.1 to this Current Report. The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.

Item 8.01  Other Events.

On July 15, 2014, the Company issued a press release announcing the closing of the sale of 121,390 shares of its Common Stock pursuant to the exercise of the over-allotment option granted to the underwriter in its previously announced public offering. The press release is attached as Exhibit 99.1 hereto and is incorporated by reference herein.

Item 9.01  Financial Statements and Exhibits.

(c) Exhibits
Exhibit No.	Description
10.1	2014 River Valley Financial Bank Incentive Plan (amended as of July 15, 2014)
99.1	Press Release dated July 15, 2014 (closing of over-allotment option  and second quarter earnings)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized.

Date: July 15, 2014	River Valley Bancorp
	By:	/s/ Matthew P. Forrester
		Matthew P. Forrester
		President and Chief Executive Officer

EXHIBIT INDEX

Exhibit No.	Description	Location
10.1	2014 River Valley Financial Bank Incentive Plan (amended as of July 15, 2014)	Attached
99.1	Press Release dated July 15, 2014 (closing of over-allotment option  and second quarter earnings)	Attached

EX-10.1

Exhibit 10.1

2014 River Valley Financial Bank Incentive Plan

(Amended as of July 15, 2014)

General Considerations

This plan is designed to meet the organization’s strategic initiatives and interests of its stakeholders (including, shareholders, communities, and regulators). As such this plan is subject to the direct oversight, administration, and authority of the Compensation Committee of the Board of Directors of River Valley Financial Bank and subject to authoritative concerns of the institution’s primary regulators.

Plan Parameters

This plan covers the calendar year 2014 for the individuals (or positions) specifically named in the policy.  The payout of monies under this plan will be paid-out by January 31, 2015 at the rate of 75% of funds earned. The balance of earnings (25%) will be escrowed in an interest earning account with the Trust Department of this organization for payout one year from the date of original disbursement. This “deferral” of funds is in consideration to “clawback” provisions described subsequently in this policy. All funds are considered earned at the conclusion of the calendar year. So terminations of employment during the current calendar year are treated as forfeitures, but any termination of employment subsequent to year-end will not impact the payout of current or deferred funds.

Clawback Provision

This plan specifically reserves the right to “recapture” funds disbursed under this plan for material misstatements of facts, whether individually or collectively derived, and as deemed inappropriate by the authorities having governance over this policy. Assuming certain timing parameters and after an investigation of facts, no less than any monies  deferred under this plan will be subject to recapture, and depending on the serious of the misstatement, the organization specifically reserves all rights and remedies to collect previously disbursed funds. A determination of misappropriated value will be at the Board of Directors sole discretion for any and all participants of the plan.

Other Provisions

The Board of Directors of River Valley Financial Bank specifically reserves the right to discontinue, alter, and/or modify the provisions of this plan at its sole discretion. It has discretionary abilities to supplement or modify awards under this plan as it deems appropriate.

Specific Plan Design Features

This plan has features unique to the individuals covered by this plan. Because of varying responsibilities, there are different criteria, as well as, differences in the value of potential rewards. As an attachment to this plan, there is a summary sheet illustrating the employees covered by this plan and the amounts that could be earned under this incentive plan. As well, individual worksheets will also be attached illustrating the performance factors, the value of those factors, and potential value of rewards earned under each of the factors.

Performance Criteria – Goals and Objectives

· Bank Performance – For most plan participants a percentage of the annual incentive will be based overall Bank performances. For the top tier of this plan 75% of the incentive payout is based on overall Bank Performance.

· Department/Individual Performance – For all participants a portion of this plan will be dependent on departmental and/or individual criteria.  An increasing proportion of the incentive program is subjective to those parameters as those individuals have less control in the success of the overall bank performance.

· Wealth management officers have a defined monetary goal based upon dollar values of production over and above expectations.

Performance Standards – Performance Expectations

For each performance factor (Overall Bank, Department, and Individual), an appropriate standard of performance must be established with these three essential performance points:

· Threshold Performance: That level of performance for each factor below which no award will be given. The budgeted, or expected, level of performance based upon historical data, and management’s best judgment as to expected performance during the coming period.

· Targeted Performance: The budgeted, or expected, level of performance based upon historical data, and management’s best judgment as to expected performance during the coming performance period.

· Maximum Expected Performance: That level of performance which based upon historical performance and management’s judgment would be exceptional or significantly beyond the expected.

Performance standards are typically determined by using the Bank’s performance history, peer data and management’s judgment of what reasonable levels could be attained based on previous experience. One the targeted performance is established; the threshold and maximum payout are typically (but, not absolutes) as follows. The threshold is typically 80% to 90% of target while the maximum can be in a range from typically 110% to 140% of target (with the primary exception being profitability with a variance of 5% either side of the target).

Weighting for each performance criteria (overall bank and department/individual) will be discussed during goal setting sessions and reflect the individual’s abilities to impact results in a particular factor, as well as representing areas of specific focus for the executive. Properly assigned factor weights to the performance criteria assure that the annual incentive plan augments the annual strategic business plan of the Bank.

Plan Design Features for CEO & EVP (Tier I)

CEO and EVP – Payouts:  Target – 15% Maximum – 30%

CEO and EVP Factor Weights – 50% on Total Shareholder Return, the greater of: 25% on Profitability or 25% on Loan Portfolio Growth (having an average risk weighting of 3.8), and 25% on Asset Quality Targets

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Individual Weighting (25% Assigned to Asset Quality Targets) -	50% on Non-Performing Number
	50% on Charge-offs

Total Shareholder Return – is defined as price appreciation of the stock value for the period beginning June 30, 2014 and ended December 31, 2014, plus the annualized dividend rate paid to common stock shareholders for the year ended December 31, 2014.  June 30, 2014, in lieu of December 31, 2013, is being used as the beginning date for measuring price appreciation because of the extraordinary and adverse impact the public offering of River Valley Bancorp had on the market price for River Valley Bancorp’s common stock. Due to fact that the Corporation’s stock is thinly traded and that there can be significant price swings in any one day of trading, for calculation purposes the 30 day average price as of December 31, 2014 will be used.

Loan Portfolio Growth is defined as the net growth of the aggregated loan portfolio as December 31, 2014 measured against the ending loan portfolio balance as of December 31, 2013.

Non-Performing Assets – is defined as 90 day or longer delinquency and assets held as Other Real Estate Owned (OREO).  Any loan that is restructured when it is in a non performing status at the time of restructuring will continue to be non performing until the loan has performed for six consecutive months according to the terms of the restructured loan.

Goals

Total Return – Threshold – 8%, Target – 12%, Maximum – 16%

Profitability – Threshold - $4.400 million, Target - $4.625 million, Maximum - $4.850 million

Loan Portfolio Growth – Threshold – 4%, Target – 5%, Maximum –7%

Asset Quality Targets:

Non-Performing Assets (as a percentage of total assets) – Threshold – 3.6%,

Target - 3.0%, Maximum - 2.4%

Charge-offs (as percentage of loan portfolio) – Threshold - < .50, Target - < .40,

Maximum - < .30

Senior Officers (Tier II)

We will have payouts of 10% for Target and 20% for Maximums. Factors will be weighted at 50% for overall Bank objectives as defined as Total Return and Profitability as illustrated above. The balance of potential earnings will be based on individual goals that will carry 50% value, but will have individual factors (up to five criteria) that may have unique factor weights.

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Vice Presidents (Tier III)

We will have payouts of 7.50% for Target and 15% for maximums. Factors will be weighted at 50% for overall Bank objectives as defined as Total Return and Profitability as illustrated above. The balance of potential earnings will be based on individual goals that will carry 50% value, but will have individual factors (up to four criteria) that may have unique factor weights. Those individual factors may also have subjective criteria that are defined by meeting, exceeding, far exceeds expectations.

Internal Audit, Compliance, and Ex. Administrative Assistant (Tier IV)

We will have payouts of 5% for Target and 10% for maximums. Factors will be weighted at 50% for overall Bank objectives as defined as Total Return and Profitability as illustrated above. The balance of potential earnings will be based on individual goals that will carry 50% value, but will have individual factors (up to four criteria) that may have unique factor weights. Those individual factors may also have subjective criteria that are defined by meeting, exceeding, far exceeds expectations.

Loan Officers (Tier V)

We will have payouts of 7.50% for Target and 15% for maximums. Factors will be weighted at 25% for overall Bank objectives as defined as Total Return (6.3% of goal) and Loan Portfolio Growth (18.8%). The balance of potential earnings will be based on individual goals that will carry 75% value, but will have individual factors (up to four criteria) that may have unique factor weights tailored to desired performance goals.

Wealth Management Officers (Tier VI)

Officers will be afforded specific monetary rewards for achieving collective targeted minimums and maximums tied to reportable income to general ledger accounts attributed to wealth management operations. The wealth management officers will be eligible for an individual reward of $2,000 if the targeted amount (recorded in 2014) exceeds $300,000. Individual rewards are prorated to a maximum of $7,500 based upon aggregated income of $400,000.

Other Considerations:

These calculations are based solely of the financials of River Valley Financial Bank. Any acquisition of assets, other than through “normal” ongoing operations, will facilitate a need to modify calculations appropriately. Modifications to this plan will be subject to Board approval.

Participants to this plan will need to be identified no later than January 31, 2014. Hires subsequent to this date will not qualify for participation in the 2014 plan.

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EX-99.1

Exhibit 99.1

River Valley Bancorp Closes Underwriter’s Exercise of Over-Allotment

Option for 121,390 Shares of Common Stock

and

Announces Earnings for the Quarter Ended June 30, 2014

MADISON, IN, July 15, 2014 – River Valley Bancorp (Nasdaq: RIVR) (the “Corporation” or “River Valley”) announced today that it closed the sale of an additional 121,390 shares of its common stock at the public offering price of $20.50 per share pursuant to the exercise of the over-allotment option granted to the underwriter in its previously announced underwritten public offering.  Together with the 825,000 shares of common stock issued in the underwritten public offering which closed on July 7, 2014, the exercise of the over-allotment option brings the total number of shares of common stock sold by River Valley in the public offering to 946,390 shares. Including proceeds from the exercise of the over-allotment option, gross proceeds from the offering were approximately $19.4 million and net proceeds were approximately $18.1 million.

The Corporation intends to use the net proceeds from this offering to redeem all 5,000 of its issued and outstanding Fixed Rate Cumulative Perpetual Preferred Stock, Series A, and for general corporate purposes, including the contribution of a portion of the proceeds to River Valley Financial Bank, its wholly owned subsidiary, as additional capital. The net proceeds will also support future growth, which may include organic growth in existing markets and opportunistic acquisitions of all or part of other financial institutions.

Keefe, Bruyette & Woods, Inc., a Stifel company, was the sole book-running manager in this offering.

River Valley also announced today earnings for the quarter and six months ended June 30, 2014.

Net income for the quarter ended June 30, 2014 was $1.14 million, or $0.68 per share. Net income for the like period in 2013 was $1.19 million, or $0.72 per share. For the quarter ended June 30, 2014, the return on average assets was 0.93%, and the return on average equity was 12.16%, which compares to 0.99% and 13.47%, respectively, for the same period ended June 30, 2013.

The quarterly results reflect higher interest margins augmented by lower provision for loan losses, partially offset by higher operating expenses and lower noninterest income. For the quarter ended June 30, 2014, total interest income was $139,000 lower than the comparable quarter in 2013. In the second quarter of 2013, the Corporation realized an increase of approximately $177,000 from accretive adjustments on the carrying value of loans acquired through the 2012 acquisition of Dupont State Bank which were not repeated in the 2014 period.  During the quarter ended June 30, 2014, River Valley recorded a total of $250,000 in losses and fair value adjustments, primarily to write-down the carrying value on two pieces of property, one acquired through foreclosure proceedings and the second bank owned premises transferred to ‘held for sale’ during the quarter. These losses and adjustments affected noninterest income. In the second quarter, the Corporation also recorded a $225,000 recovery to the allowance for loan losses enabling a lower provision expense for the quarter.

For the six-month period ended June 30, 2014, net income was $2.21 million, or $1.32 per share. For the six-month period ended June 30, 2013, net income was $2.19 million, or $1.32 per share. The return on average assets for the six-month period ended June 30, 2014 was 0.91%, and the return on average equity was 12.09%. For the same six-month period in 2013, those corresponding numbers were 0.93% and 12.44%.

Comparing the six-month periods ended June 30, 2014 and 2013, River Valley experienced results similar to the quarterly numbers. The six-month results reflected higher interest margins and lower provision for loan losses. For the 2014 period, noninterest income (excluding losses on real premises and other real estate owned) was approximately $400,000 lower, primarily due to decreased sales of loans into the secondary markets, while operating expenses were higher by a similar number when compared to 2013, primarily due to additional branch costs.

Assets totaled $485.8 million as of June 30, 2014, an increase of $10.1 million from the $475.7 million reported as of June 30, 2013. Net loans, including loans held for sale, were $317.8 million as of June 30, 2014, an increase of $23.1 million from $294.7 million reported as of June 30, 2013. As of June 30, 2014, deposits totaled $401.6 million, an increase of $13.0 million from $388.6 million reported as of June 30, 2013.

“During the second quarter, there were a number of one-time occurrences. We realized a significant loan recovery, and planned for the disposition of an under-utilized operations building acquired in the 2012 acquisition. Likewise, we cleared a lingering loan workout. We also saw the opening of our fourteenth full service branch location in a commercial development anchored by a nationally recognized home improvement center. And as an important contributor to our continued profitability, we experienced significant loan growth year over year,” stated Matthew P. Forrester, President of River Valley Bancorp. “Additionally, although it will be recorded as a third quarter event, we successfully completed a follow-on common stock offering that we believe will provide us the financial resources to continue to grow and serve our customers, communities and shareholders.”

Total delinquent loans (which include loans purchased with credit impairment from the 2012 acquisition), defined as loans 30 or more days past due, as a percentage of total loans, were 2.74% as of June 30, 2014 and 3.02% as of June 30, 2013. Non-performing loans, including loans purchased with credit impairment, to total loans were 4.31% and 4.68% as of June 30, 2014 and 2013, respectively.

As of June 30, 2014, the allowance for loan losses (“ALL”) totaled $3.76 million, but does not include amounts recognized as “fair market” adjustments on the loan portfolio acquired from Dupont State Bank in 2012. Those loans have a separate “mark” determined at the time of closing, and only new developments to that portfolio are reflected in the provision for loan loss calculations. The balance of the ALL on June 30, 2013 was $4.04 million.

Stockholders’ equity as of June 30, 2014 was $37.6 million, or 7.74% expressed as a percentage of assets, reported book value per common share was $21.20, and tangible book value per common share was $20.82.

River Valley Financial Bank comfortably exceeded the three regulatory capital standards to be considered “well capitalized” at June 30, 2014.

The last reported closing price of “RIVR” stock on July 14, 2014 was at $21.89.

Selected Financial Information

	At or for the						At or for the
	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(Dollar Amounts In Thousands, Except Per Share Amounts)
Assets							$	485,776		$	475,737
Net loans, including loans held for sale								317,828			294,721
Allowance for loan losses (ALL)								3,762			4,036
Deposits								401,588			388,618
Borrowings and advances								42,717			49,717
Stockholders’ equity								37,593			33,696
Total interest income	$	4,780		$	4,919			9,599			9,710
Total noninterest income		1,204			1,344			2,247			2,658
Gain (loss) real premises, OREO		(250	)		(59	)		(270	)		(202	)
Interest expense		853			1,064			1,760			2,154
Noninterest expense		3,390			3,193			6,808			6,374
Provision for loan losses		24			318			198			636
Taxes		326			441			604			808
Net income		1,141			1,188			2,206			2,194
ROAA		0.93	%		0.99	%		0.91	%		0.93	%
ROAE		12.16			13.47			12.09			12.44
Earnings per basic common share	$	0.68		$	0.72		$	1.32		$	1.32
Diluted earnings per common share		0.68			0.72			1.31			1.32
Book value per common share								21.20			18.78
Tangible book value per common share								20.82			18.42

Disclosure Regarding Non-GAAP Financial Measures

Certain information set forth in this press release refers to a financial measure determined by methods other than in accordance with GAAP. Specifically, we have included a non-GAAP financial measure of the tangible book value per common share. The Corporation believes that this non-GAAP financial measure is helpful to investors and provides a greater understanding of our business, although this measure is not necessarily comparable to similar measures that may be presented by other companies and it should not be considered in isolation or as a substitute for the related GAAP measure.

The information below provides a reconciliation of the non-GAAP measure to the comparable GAAP measure.

	At or For the Six Months Ended June 30,
	2014			2013
	(In Thousands, Except Share Data)
Total stockholders’ equity	$	37,593		$	33,696
Less:
Preferred equity		5,000			5,000
Goodwill and intangible assets (not including deferred tax assets)		580			542
Tangible common equity	$	32,013		$	28,154
Common shares outstanding at period end		1,537,306			1,528,306
Book value per common share	$	21.20		$	18.78
Effect of intangible assets		(0.38	)		(0.35	)
Tangible book value per common share	$	20.82		$	18.42

About River Valley Bancorp

River Valley Bancorp is the bank holding company for River Valley Financial Bank, which was founded in 1875 as a federally chartered thrift institution. The Bank converted to an Indiana state chartered commercial bank in 2012 in connection with its acquisition of Dupont State Bank, an Indiana commercial bank. The Bank is headquartered in Madison, Indiana, located along the Ohio River, and serves clients in southeastern Indiana and northern Kentucky from its 14 full-service office locations in Clark, Floyd, Jackson, Jennings, Jefferson and Ripley Counties in Indiana, and in Carroll County in Kentucky. As of June 30, 2014, River Valley had total consolidated assets of $485.7 million, total deposits of $401.6 million and total stockholders’ equity of $37.6 million.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include expressions such as "expects," "intends," "believes," and "should," which are necessarily statements of belief as to the expected outcomes of future events. Actual results could materially differ from those presented. The Corporation’s ability to predict future results involves a number of risks and uncertainties, some of which have been set forth in the Corporation’s most recent annual report on Form 10-K filed with the Securities and Exchange Commission. The Corporation undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release.

Contact:	Matthew P. Forrester - President, CEO
	River Valley Bancorp
	812-273-4949