UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D. C. 20549




FORM
10-Q




x  Quarterly report
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934




For
the quarterly period ended March 31, 2009




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




Commission
file number: 001-33257




White
River Capital, Inc.


(Exact
name of registrant as specified in its charter)




Indiana
            35-1908796(State
      or other jurisdiction of  incorporation or
      organization)
            (I.R.S.
      Employer Identification No.)





1445
Brookville Way, Suite I


Indianapolis,
Indiana 46239


(Address
of principal executive offices/zip code)




Registrant’s
telephone number, including area code:  (317) 806-2166




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.


x Yes o No




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


o Yes o No





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





Large
      Accelerated Filer o
            Accelerated
      Filer oNon-Accelerated
      Filer o
              (Do
      not check if a smaller reporting company)
            Smaller
      Reporting Company x







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




o Yes x No




Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date. As of May 14, 2009, there were
4,061,386 shares outstanding of the issuer’s Common Stock, without par
value.









WHITE RIVER CAPITAL, INC.


FORM 10-Q FOR THE QUARTER ENDED MARCH 31,
2009


-
INDEX -




PAGEPART
      I.
              FINANCIAL
      INFORMATIONItem
      1.
              Financial
      StatementsUnaudited
      Condensed Consolidated Balance Sheets as of March 31, 2009
              1Unaudited
      Condensed Consolidated Statements of Operations for the quarters ended
      March 31, 2009 and 2008
              2Unaudited
      Condensed Consolidated Statements of Comprehensive Income for the quarters
      ended March 31, 2009 and 2008
              3Unaudited
      Condensed Consolidated Statements of Cash Flows for the quarters ended
      March 31, 2009 and 2008
              4Notes
      to Unaudited Condensed Consolidated Financial Statements
              5Item
      2.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              12Item
      4T.
              Controls
      and Procedures
              22PART
      II.
              OTHER
      INFORMATIONItem
      2.
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              23Item
      6.
              Exhibits
              23SIGNATURES
              24EXHIBIT
      INDEX
              25





Part
I   Financial Information




ITEM
1.   FINANCIAL STATEMENTS.




WHITE
RIVER CAPITAL, INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED BALANCE SHEETS


(Unaudited)


(Dollars
in thousands)








ASSETS
                
                March
      31, 2009
                
                
                December
      31, 2008Cash
      and cash equivalents
                
                $
                6,279
                
                
                $
                6,403Finance
      receivables—net
                
                
                87,229
                
                
                
                84,187Deferred
      tax assets—net
                
                
                46,255
                
                
                
                46,946Other
      assets
                
                
                1,377
                
                
                
                1,292TOTAL
                
                $
                141,140
                
                
                $
                138,828LIABILITIES
      AND SHAREHOLDERS’ EQUITYLIABILITIES:Line
      of credit
                
                
                42,000
                
                
                
                40,500Accrued
      interest
                
                
                120
                
                
                
                165Creditor
      notes payable
                
                
                53
                
                
                
                128Other
      payables and accrued expenses
                
                
                1,647
                
                
                
                1,949Total
      liabilities
                
                
                43,820
                
                
                
                42,742SHAREHOLDERS’
      EQUITY:Preferred
      Stock, without par value, authorized 3,000,000 shares; none issued and
      outstanding
                
                
                -
                
                
                
                -Common
      Stock, without par value, authorized 20,000,000 shares; 4,060,586 and
      4,022,853 issued and outstanding at March 31, 2009 and December 31, 2008,
      respectively
                
                
                182,544
                
                
                
                182,462Accumulated
      other comprehensive income, net of taxes
                
                
                88
                
                
                
                210Accumulated
      deficit
                
                
                (85,312
                )
                
                
                (86,586
                )Total
      shareholders’ equity
                
                
                97,320
                
                
                
                96,086TOTAL
                
                $
                141,140
                
                
                $
                138,828







See notes
to condensed consolidated financial statements.




1




Part
I   Financial Information




WHITE
RIVER CAPITAL, INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


(Unaudited)


(Dollars
in thousands, except per share amounts)











Quarters
      Ended March 31,2009
                      
                      
                      2008INTEREST:Interest
      on receivables
                      
                      $
                      7,457
                      
                      
                      $
                      8,070Accretion
      and other interest
                      
                      
                      204
                      
                      
                      
                      3,565Total
      interest income
                      
                      
                      7,661
                      
                      
                      
                      11,635Interest
      expense
                      
                      
                      (381
                      )
                      
                      
                      (832
                      )Net
      interest margin
                      
                      
                      7,280
                      
                      
                      
                      10,803Provision
      for estimated credit losses
                      
                      
                      (1,812
                      )
                      
                      
                      (1,197
                      )Net
      interest margin after provision for estimated credit
losses
                      
                      
                      5,468
                      
                      
                      
                      9,606OTHER
      REVENUES (EXPENSES):Salaries
      and benefits
                      
                      
                      (2,119
                      )
                      
                      
                      (2,294
                      )Third
      party servicing expense
                      
                      
                      (14
                      )
                      
                      
                      (114
                      )Other
      operating expenses
                      
                      
                      (1,404
                      )
                      
                      
                      (1,411
                      )Change
      in fair market valuation of creditor notes payable
                      
                      
                      2
                      
                      
                      
                      (46
                      )Gain
      from deficiency account sale
                      
                      
                      162
                      
                      
                      
                      159Other
      expense
                      
                      
                      (51
                      )
                      
                      
                      (34
                      )Total
      other revenues (expenses)
                      
                      
                      (3,424
                      )
                      
                      
                      (3,740
                      )INCOME
      BEFORE INCOME TAXES
                      
                      
                      2,044
                      
                      
                      
                      5,866INCOME
      TAX EXPENSE
                      
                      
                      (770
                      )
                      
                      
                      (2,142
                      )NET
      INCOME
                      
                      $
                      1,274
                      
                      
                      $
                      3,724NET
      INCOME PER COMMON SHARE (BASIC)
                      
                      $
                      0.31
                      
                      
                      $
                      0.96NET
      INCOME PER COMMON SHARE (DILUTED)
                      
                      $
                      0.31
                      
                      
                      $
                      0.94BASIC
      WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
                      
                      
                      4,046,568
                      
                      
                      
                      3,863,507DILUTED
      WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
                      
                      
                      4,050,060
                      
                      
                      
                      3,942,503







See notes
to condensed consolidated financial statements.




2


Part
I   Financial Information


WHITE
RIVER CAPITAL, INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


(Unaudited)


(Dollars
in thousands)








Quarters
      Ended March 31,2009
                
                
                2008NET
      INCOME
                
                $
                1,274
                
                
                $
                3,724OTHER
      COMPREHENSIVE INCOME:Net
      unrealized change on recombined assets and Beneficial Interest in Master
      Trust, net of tax
                
                
                (123
                )
                
                
                (2,254
                )COMPREHENSIVE
      INCOME
                
                $
                1,151
                
                
                $
                1,470







See notes
to condensed consolidated financial statements.




3


Part
I   Financial Information


WHITE
RIVER CAPITAL, INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)


(Dollars
in thousands)





Quarters
      Ended March 31,2009
                
                
                2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income
                
                $
                1,274
                
                
                $
                3,724Adjustments
      to reconcile net income to net cash provided by (used in) operating
      activities:Accretion
      of other comprehensive income
                
                
                (193
                )
                
                
                (3,550
                )Accretion
      of securitization discount
                
                
                (26
                )
                
                
                (485
                )Provision
      for estimated credit losses
                
                
                1,811
                
                
                
                1,197Amortization
      and depreciation
                
                
                118
                
                
                
                108Amortization
      of discount and interest accrued on creditor notes payable
                
                
                -
                
                
                
                (106
                )Deferred
      income taxes
                
                
                762
                
                
                
                2,085Change
      in fair value of creditor notes payable
                
                
                (2
                )
                
                
                46Stock
      based compensation expense
                
                
                82
                
                
                
                252Changes
      in assets and liabilities:Accrued
      interest receivable and other assets
                
                
                (180
                )
                
                
                (14
                )Other
      payables and accrued expenses
                
                
                (345
                )
                
                
                (613
                )Net
      cash provided by operating activities
                
                
                3,301
                
                
                
                2,644CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of finance receivables
                
                
                (16,666
                )
                
                
                (14,483
                )Collections
      on finance receivables
                
                
                11,144
                
                
                
                12,631Principal
      collections and recoveries on receivables held for
    investment
                
                
                691
                
                
                
                5,465Capital
      expenditures
                
                
                (18
                )
                
                
                (24
                )Net
      cash provided by (used in) investing activities
                
                
                (4,849
                )
                
                
                3,589CASH
      FLOWS FROM FINANCING ACTIVITIES:Principal
      payments on creditor notes payable
                
                
                (76
                )
                
                
                (480
                )Net
      borrowing (repayment) on line of credit
                
                
                1,500
                
                
                
                (6,000
                )Net
      cash provided by (used in) financing activities
                
                
                1,424
                
                
                
                (6,480
                )DECREASE
      IN CASH AND CASH EQUIVALENTS
                
                
                (124
                )
                
                
                (247
                )CASH
      AND CASH EQUIVALENTS—Beginning of year
                
                
                6,403
                
                
                
                3,785CASH
      AND CASH EQUIVALENTS—End of period
                
                $
                6,279
                
                
                $
                3,538SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW INFORMATION:Interest
      paid
                
                $
                695
                
                
                $
                1,058







See notes
to condensed consolidated financial statements.




4




Part
I   Financial Information


WHITE
RIVER CAPITAL, INC. AND SUBSIDIARIES




NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) QUARTERS ENDED MARCH
31, 2009 AND 2008






1.   BASIS
      OF PRESENTATION




The
foregoing condensed consolidated financial statements are unaudited. However, in
the opinion of management, all adjustments necessary for a fair presentation of
the results of the interim periods presented have been included. Results for any
interim period are not necessarily indicative of results to be expected for the
year ending December 31, 2009.




The
condensed consolidated unaudited interim financial statements have been prepared
in accordance with Form 10-Q specifications and therefore do not include all
information and footnotes normally shown in annual financial statements. These
interim period financial statements should be read in conjunction with the
consolidated financial statements that are included in the Annual Report on Form
10-K for the year ended December 31, 2008 of White River Capital, Inc., which is
available online at www.WhiteRiverCap.com
or www.sec.gov.




The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expense during
the reporting period. Actual results could differ from those
estimates.




2.   GENERAL
      DISCUSSION




White
River Capital, Inc. (“White River” or the “Company”) is a holding company for
specialized indirect auto finance businesses, with two principal operating
subsidiaries, Coastal Credit LLC (“Coastal Credit”) and Union Acceptance Company
LLC (“UAC”). Coastal Credit based in Virginia Beach, Virginia, is a specialized
subprime auto finance company engaged in acquiring subprime auto receivables
from both franchised and independent automobile dealers which have entered into
contracts with purchasers of typically used, but some new, cars and light
trucks.  Coastal Credit then services the receivables it acquires.
Coastal Credit operates in 21 states through 17 offices. UAC, based in
Indianapolis, Indiana, holds and oversees its portfolio of approximately $0.5
million in non-prime auto receivables, as of March 31, 2009.




UAC
operates under a bankruptcy plan of reorganization under which UAC must pay net
proceeds from its residual interest in its receivables portfolios and other
estate assets to creditors holding notes and claims under the plan. White River
owns substantially all of such notes and claims.  UAC’s bankruptcy
case was closed in January 2007.




On June
27, 2008, White River and First Chicago Bancorp ("First Chicago”) signed a
definitive agreement and plan of merger pursuant to which First Chicago will
merge into White River.  Terms of the agreement call for shareholders
of First Chicago to receive one share of White River common stock for each two
shares of First Chicago common stock.  Subject to consummation of the
merger and effective registration of the shares of common stock to be issued to
First Chicago’s shareholders in the merger with the U.S. Securities and Exchange
Commission (“SEC”), and approval for listing of such shares with the NYSE Amex
the common stock issued to First Chicago shareholders will be listed on the NYSE
Amex. White River does not anticipate that the merger will be consummated on the
terms reflected in the merger agreement as initially executed and is engaging in
discussions with First Chicago regarding possible alternative transaction terms
(including a change of the exchange ratio).


5




Part
I   Financial Information




3.   FINANCE
      RECEIVABLES – NET




Coastal
Credit




Finance
receivables – net acquired by Coastal Credit generally have original terms
ranging from 32 to 48 months and are secured by the related
vehicles.




Coastal
Credit finance receivables – net outstanding were as follows (in
thousands):




March
      31,
                                                
                                                
                                                December
      31,2009
                                                
                                                
                                                2008Finance
      receivables, gross
                                                
                                                $
                                                109,055
                                                
                                                
                                                $
                                                104,599Unearned
      interest
                                                
                                                
                                                (2,920
                                                )
                                                
                                                
                                                (3,076
                                                )Finance
      receivables, net of unearned finance charge income
                                                
                                                
                                                106,135
                                                
                                                
                                                
                                                101,523Accretable
      unearned acquisition discounts and fees
                                                
                                                
                                                (11,726
                                                )
                                                
                                                
                                                (10,836
                                                )Finance
      receivables, net of unearned finance charge income and discounts and
      fees
                                                
                                                
                                                94,409
                                                
                                                
                                                
                                                90,687Allowance
      for loan losses
                                                
                                                
                                                (7,685
                                                )
                                                
                                                
                                                (7,560
                                                )Finance
      receivables, net
                                                
                                                $
                                                86,724
                                                
                                                
                                                $
                                                83,127









Activity
in the Coastal Credit allowance for loan losses on finance receivables is as
follows (dollars in thousands):




Quarters
      Ended March 31,2009
                                      
                                      
                                      2008Balance
      at beginning of period
                                      
                                      $
                                      7,560
                                      
                                      
                                      $
                                      6,810Charge-offs,
      net of recoveries
                                      
                                      
                                      (1,801
                                      )
                                      
                                      
                                      (1,609
                                      )Provision
      for estimated credit losses
                                      
                                      
                                      1,926
                                      
                                      
                                      
                                      1,609Balance
      at the end of the period
                                      
                                      $
                                      7,685
                                      
                                      
                                      $
                                      6,810












6




Part
I   Financial Information
  Union
Acceptance Company LLC




UAC
finance receivables – net outstanding were as follows (in
thousands):




March
      31,
                                  
                                  
                                  December
      31,2009
                                  
                                  
                                  2008Principal
      balance of finance receivables
                                  
                                  $
                                  520
                                  
                                  
                                  $
                                  1,103Unearned
      discount
                                  
                                  
                                  (19
                                  )
                                  
                                  
                                  (45
                                  )Accrued
      interest receivable
                                  
                                  
                                  4
                                  
                                  
                                  
                                  9Allowance
      for credit losses
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (7
                                  )Finance
      receivables—net
                                  
                                  $
                                  505
                                  
                                  
                                  $
                                  1,060







Activity
in the UAC allowance for credit losses is as follows (in
thousands):




Quarters
      Ended March 31,2009
                                    
                                    
                                    2008Balance
      at the beginning of period
                                    
                                    $
                                    7
                                    
                                    
                                    $
                                    222Charge-offs
                                    
                                    
                                    (44
                                    )
                                    
                                    
                                    (331
                                    )Recoveries
                                    
                                    
                                    151
                                    
                                    
                                    
                                    534Provision
      (recovery) for estimated credit losses
                                    
                                    
                                    (114
                                    )
                                    
                                    
                                    (412
                                    )Balance
      at the end of the period
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    13









4.   OTHER
      ASSETS




Other
assets are as follows (in thousands) at:


March
      31,
                                    
                                    
                                    December
      31,2009
                                    
                                    
                                    2008Receivable
      from servicer
                                    
                                    $
                                    6
                                    
                                    
                                    $
                                    -Prepaid
      expenses
                                    
                                    
                                    816
                                    
                                    
                                    
                                    691Property,
      equipment and leasehold improvements, net
                                    
                                    
                                    551
                                    
                                    
                                    
                                    599Other
                                    
                                    
                                    4
                                    
                                    
                                    
                                    2Total
      other assets
                                    
                                    $
                                    1,377
                                    
                                    
                                    $
                                    1,292







7




5.   CREDITOR
      NOTES PAYABLE




Creditor
notes payable consists of debt owed to the one remaining third party creditor
from the UAC bankruptcy. With the adoption of SFAS No. 159, creditor notes
payable is recorded at fair value which represents the present value of the
amount that UAC anticipates to pay to the creditors from the residual assets of
the finance receivables. UAC’s finance receivables are in essence the only asset
UAC has remaining to pay the creditor notes payable.




The
following table presents the creditor notes payable (in thousands) on a
recurring basis using significant unobservable inputs (Level 3) per SFAS No. 157
at:




Quarters
      Ended March 31,2009
                                                  
                                                  
                                                  2008Beginning
      balance
                                                  
                                                  $
                                                  128
                                                  
                                                  
                                                  $
                                                  1,324Total
      (income) losses included in earnings (recorded as "other revenues
      (expenses)")
                                                  
                                                  
                                                  (2
                                                  )
                                                  
                                                  
                                                  46Purchases,
      issuances and settlements
                                                  
                                                  
                                                  (73
                                                  )
                                                  
                                                  
                                                  (586
                                                  )Ending
      balance
                                                  
                                                  $
                                                  53
                                                  
                                                  
                                                  $
                                                  784







The
contractual interest related to the creditor notes payable will continue to be
accrued as interest expense and the interest payable will be included in the
fair value calculation along with the creditor notes payable on a quarterly
basis.  The difference between the aggregate fair value and the unpaid
principal balance of creditor notes payable was $1.9 million as of March 31,
2009 and 2008.  The ultimate amount paid on creditor notes payable
could differ depending on the actual cash flows from UAC’s finance
receivables.






6.   INCOME
      TAXES




White
River has adopted FIN 48 and the implementation of FIN 48 did not impact White
River’s financial statements. As of December 31, 2008, there were no
unrecognized tax benefits.




White
River recognizes interest and penalties, if any, on tax assessments or tax
refunds in the financial statements as a component of income tax
expense.




White
River and its subsidiaries are subject to taxation by the United States and by
various state jurisdictions.  With some exceptions, White River’s
consolidated tax returns for its 2004 tax year and forward remain open to
examination by tax authorities.  Also, net operating losses carried
forward from prior years remain open to examination by tax
authorities.  With some exceptions, White River is no longer subject
to federal or state examinations by tax authorities for years before
2004.


8




Part
I   Financial Information


7.   STOCK
      BASED COMPENSATION




On
October 26, 2005, the board of directors of White River adopted the White River
Capital, Inc. Directors Stock Compensation Plan. The plan provides for the
payment of a portion of regular fees to certain members of the board of
directors in the form of shares of White River common stock. The terms of the
plan includes the reservation of 50,000 shares of White River common stock for
issuance under the plan.




Effective
January 1, 2006, the restated employment agreement between Coastal Credit and
William McKnight, President of Coastal Credit, includes a long-term incentive
award. This award provides for the payment, in cash, of the value of 100,000
shares of White River stock, vesting in three annual increments of 33,333.33
shares on January 1, 2007, 2008 and 2009. In accordance with SFAS No. 123R,
Share-Based Payment
(“SFAS No. 123R”), this award is accounted for as a liability award. The value
of payment is to be determined based on the mean of the trading value of White
River shares for 20 trading days prior to the vesting date. Compensation expense
related to this award approximated $145,000 for the quarter ended March 31,
2008. The compensation expense related to this award is included in salaries and
benefits expense in the accompanying condensed consolidated statements of
operations. This award was fully vested on January 1, 2009. Under Mr. McKnight’s
current employment agreement, there are no additional expenses related to the
awards, however there are ongoing negotiations for a new employment agreement
with Mr. McKnight. It is probable that a new agreement would include new
long-term incentive awards.




On May 5,
2006, White River shareholders approved the White River Capital, Inc. 2005 Stock
Incentive Plan. The purpose of this plan is to offer certain employees,
non-employee directors, and consultants the opportunity to acquire a proprietary
interest in White River. The plan provides for the grant of options, restricted
stock awards and performance stock awards. The total number of options and stock
awards that may be awarded under the plan may not exceed 250,000. As of March
31, 2009, White River awarded restricted stock awards totaling 104,100 shares
and 74,400 of these shares have vested and have been issued and 17,300 shares
have been forfeited.  Forfeited shares are available for the purposes
of the plan. White River has not issued stock options as of March 31, 2009. The
following is a summary of the status of White River’s non-vested restricted
stock awards and changes during the quarter ended March 31, 2009:




Restricted
      Stock Awards
                                    
                                    Shares
                                    
                                    
                                    Weighted
      Average Grant Date Fair ValueBeginning
      nonvested awards
                                    
                                    
                                    21,400
                                    
                                    
                                    $
                                    14.99Granted
                                    
                                    
                                    6,000
                                    
                                    
                                    
                                    6.45Vested
                                    
                                    
                                    (18,600
                                    )
                                    
                                    
                                    14.25Forfeited
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Ending
      nonvested awards
                                    
                                    
                                    8,800
                                    
                                    
                                    $
                                    10.74







The value
of restricted awards is determined based on the trading value of White River
shares on the grant date. An estimated forfeiture rate of 7% was used.
Compensation expense related to these awards approximated $18,000 and $96,000
for quarters ended March 31, 2009 and 2008, respectively. The compensation
expense related to these awards is included in salaries and benefits expense in
the accompanying consolidated statements of operations. There was $0.1 million
and $0.8 million of total unrecognized compensation cost related to non-vested
share-based compensation arrangements granted and long-term incentive awards as
of March 31, 2009 and 2008, respectively. That cost is expected to be recognized
over a weighted-average period of 2.1 years and 0.9 years as of March 31, 2009
and 2008, respectively.


9




Part
I   Financial Information
  8.   BUSINESS
SEGMENT INFORMATION




Set forth
in the table below is certain financial information with respect to White
River’s segments.





For The Quarter Ended March 31,
      2009
                                  
                                  UAC
                                  
                                  
                                  Coastal Credit
                                  
                                  
                                  Corporate and Other
                                  
                                  
                                  ConsolidatedTotal
      interest income
                                  
                                  $
                                  243
                                  
                                  
                                  $
                                  7,408
                                  
                                  
                                  $
                                  10
                                  
                                  
                                  $
                                  7,661Interest
      expense
                                  
                                  
                                  (43
                                  )
                                  
                                  
                                  (338
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (381
                                  )Net
      interest margin
                                  
                                  
                                  200
                                  
                                  
                                  
                                  7,070
                                  
                                  
                                  
                                  10
                                  
                                  
                                  
                                  7,280Recovery
      (provision) for estimated credit losses
                                  
                                  
                                  114
                                  
                                  
                                  
                                  (1,926
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (1,812
                                  )Net
      interest margin after recovery (provision) for estimated credit
      losses
                                  
                                  
                                  314
                                  
                                  
                                  
                                  5,144
                                  
                                  
                                  
                                  10
                                  
                                  
                                  
                                  5,468Total
      other revenues (expenses)
                                  
                                  
                                  (931
                                  )
                                  
                                  
                                  (2,848
                                  )
                                  
                                  
                                  355
                                  
                                  
                                  
                                  (3,424
                                  )Income
      (loss) before income taxes
                                  
                                  $
                                  (617
                                  )
                                  
                                  $
                                  2,296
                                  
                                  
                                  $
                                  365
                                  
                                  
                                  $
                                  2,044





For The Quarter Ended March 31,
      2008
                                          
                                          UAC
                                          
                                          
                                          Coastal Credit
                                          
                                          
                                          Corporate and Other
                                          
                                          
                                          ConsolidatedTotal
      interest income
                                          
                                          $
                                          4,330
                                          
                                          
                                          $
                                          7,301
                                          
                                          
                                          $
                                          4
                                          
                                          
                                          $
                                          11,635Interest
      expense
                                          
                                          
                                          (68
                                          )
                                          
                                          
                                          (764
                                          )
                                          
                                          
                                          -
                                          
                                          
                                          
                                          (832
                                          )Net
      interest margin
                                          
                                          
                                          4,262
                                          
                                          
                                          
                                          6,537
                                          
                                          
                                          
                                          4
                                          
                                          
                                          
                                          10,803Recovery
      (provision) for estimated credit losses
                                          
                                          
                                          412
                                          
                                          
                                          
                                          (1,609
                                          )
                                          
                                          
                                          -
                                          
                                          
                                          
                                          (1,197
                                          )Net
      interest margin after recovery (provision) for estimated credit
      losses
                                          
                                          
                                          4,674
                                          
                                          
                                          
                                          4,928
                                          
                                          
                                          
                                          4
                                          
                                          
                                          
                                          9,606Total
      other revenues (expenses)
                                          
                                          
                                          (5,731
                                          )
                                          
                                          
                                          (2,910
                                          )
                                          
                                          
                                          4,901
                                          
                                          
                                          
                                          (3,740
                                          )Income
      (loss) before income taxes
                                          
                                          $
                                          (1,057
                                          )
                                          
                                          $
                                          2,018
                                          
                                          
                                          $
                                          4,905
                                          
                                          
                                          $
                                          5,866







The
following table presents assets with respect to White River’s segments (in
thousands) at:




March
      31,
                                
                                
                                December
      31,2009
                                
                                
                                2008Corporate
      and other
                                
                                $
                                51,194
                                
                                
                                $
                                51,795Coastal
      Credit
                                
                                
                                89,268
                                
                                
                                
                                85,408UAC
                                
                                
                                678
                                
                                
                                
                                1,625$
                                141,140
                                
                                
                                $
                                138,828







10




Part
I   Financial Information
  9.   EARNINGS
PER SHARE




Basic
earnings per share are calculated by dividing the reported net income for the
period by the weighted average number of common shares outstanding. The weighted
average number of common shares outstanding during a period is weighted for the
portion of the period that the shares were outstanding. Diluted earnings per
share include the dilutive effect of warrants that were granted on August 31,
2005 and stock award plans which were issued on January 2, 2009, August 1, 2007
and June 1, 2006. Basic and diluted earnings per share have been computed as
follows (dollars in thousands except share and per share data):




Quarters
      Ended March 31,2009
                                                        
                                                        
                                                        2008Net
      income in thousands
                                                        
                                                        $
                                                        1,274
                                                        
                                                        
                                                        $
                                                        3,724Weighted
      average shares outstanding
                                                        
                                                        
                                                        4,046,568
                                                        
                                                        
                                                        
                                                        3,863,507Incremental
      shares from assumed conversions:Warrants
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        68,025Stock
      award plans
                                                        
                                                        
                                                        3,492
                                                        
                                                        
                                                        
                                                        10,971Weighted
      average shares and assumed incremental shares
                                                        
                                                        
                                                        4,050,060
                                                        
                                                        
                                                        
                                                        3,942,503Earnings
      per share:Basic
                                                        
                                                        $
                                                        0.31
                                                        
                                                        
                                                        $
                                                        0.96Diluted
                                                        
                                                        $
                                                        0.31
                                                        
                                                        
                                                        $
                                                        0.94







10.   SUBSEQUENT
EVENTS




On April
28, 2009, White River entered into amended and restated employment agreements
with each of Mark R. Ruh, White River’s President and Chief Operating Officer,
and Martin J. Szumski, White River’s Chief Financial Officer.  Each
agreement became effective upon signing (which we previously disclosed on Form
8-K filed with the SEC on May 1, 2009).







11.   COMMITMENTS
AND CONTINGENCIES




White
River and its subsidiaries, as consumer finance companies, are subject to
various consumer claims and litigation seeking damages and statutory penalties,
based upon, among other things, usury, disclosure inaccuracies, wrongful
repossession, violations of bankruptcy stay provisions, certificate of title
disputes, fraud, breach of contract and discriminatory treatment of credit
applicants. Some litigation against White River and its subsidiaries could take
the form of class action complaints by consumers. As the assignee of finance
contracts originated by dealers, White River and its subsidiaries may also be
named as a co-defendant in lawsuits filed by consumers principally against
dealers. The damages and penalties claimed by consumers in these types of
matters can be substantial. The relief requested by the plaintiffs varies but
can include requests for compensatory, statutory and punitive damages. White
River and its subsidiaries believe that it has taken prudent steps to address
and mitigate the litigation risks associated with its business
activities.






11




Part
I   Financial Information


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




General




Founded
in 2004, White River Capital, Inc. (“White River”) is a financial services
holding company headquartered in Indianapolis, Indiana with two principal
operating subsidiaries.




Coastal
Credit LLC (“Coastal Credit”), based in Virginia Beach, Virginia, is a
specialized subprime auto finance company engaged in acquiring subprime auto
receivables from both franchised and independent automobile dealers which have
entered into contracts with purchasers of typically used, but some new, cars and
light trucks.  Coastal Credit then services the receivables it
acquires. Coastal Credit operates in 21 states through 17 offices.




Union
Acceptance Company LLC (“UAC”), based in Indianapolis, Indiana, is a specialized
auto finance company which holds and oversees its portfolio of non-prime auto
receivables. On January 5, 2007, the U.S. Bankruptcy Court for the Southern
District of Indiana issued a final decree and closed UAC’s Chapter 11 bankruptcy
case. UAC remains contractually obligated to distribute its remaining assets in
compliance with its Second Amended and Restated Plan of Reorganization (the
“Plan” or the “Plan of Reorganization”) approved in connection with the
bankruptcy case. Under the Plan, UAC must pay net proceeds from its residual
interest in its receivables portfolios and other estate assets to creditors
holding notes and claims under the Plan. White River owns all of UAC’s general
unsecured claims, 89.1% of UAC’s restructured subordinated notes and 94.7% of
UAC's accrual notes issued under the Plan.  UAC was designated the
Creditor Representative to oversee the distribution of its remaining assets as
contractually required under the Plan.




On June
27, 2008, White River and First Chicago Bancorp (“First Chicago”) signed a
definitive agreement and plan of merger (the “Merger Agreement”) pursuant to
which First Chicago will merge into White River.  Terms of the
agreement call for shareholders of First Chicago to receive one share of White
River common stock for each two shares of First Chicago common
stock.  Subject to consummation of the merger and effective
registration of the shares of common stock to be issued to First Chicago’s
shareholders in the merger with the SEC, and approval for listing of such shares
with the NYSE Amex the common stock issued to First Chicago shareholders will be
listed on the NYSE Amex.  White River does not anticipate that the
merger will be consummated on the terms reflected in the merger agreement as
initially executed and is engaging in discussions with First Chicago regarding
possible alternative transaction terms (including a change of the exchange
ratio).






Critical
Accounting Policies




The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
significant estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosures of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenue and expenses
during the reporting period. White River believes that the following represent
the material critical accounting policies used in the preparation of its
consolidated financial statements. Actual results could differ significantly
from estimates.




Allowance
for Loan Losses – Finance Receivables




Provisions
for loan losses are charged to operations in amounts sufficient to maintain the
allowance for loan losses at a level considered adequate to cover probable
credit losses inherent in finance receivables.




12




Part
I   Financial Information


The
allowance for loan losses is established systematically by management based on
the determination of the amount of probable credit losses inherent in the
finance receivables as of the reporting date. Coastal Credit reviews charge off
experience factors, delinquency reports, historical collection rates and other
information in order to make the necessary judgments as to probable credit
losses inherent in the portfolio as of the reporting date. Assumptions regarding
probable credit losses are reviewed quarterly and may be impacted by actual
performance of finance receivables and changes in any of the factors discussed
above. Should the credit loss assumptions increase, there could be an increase
in the amount of allowance for loan losses required, which could decrease the
net carrying value of finance receivables and increase the provision for loan
losses recorded on the consolidated statements of operations. Coastal Credit
believes that the existing allowance for loan losses is sufficient to absorb all
probable finance receivable losses.




Income
Taxes




Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax basis. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.




The
ultimate realization of the deferred tax asset depends on White River’s ability
to generate sufficient taxable income in the future and its ability to prevent
an ownership change from occurring for tax purposes. The valuation allowance has
been derived pursuant to the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 109, Accounting for Income Taxes,
and reduces the total deferred tax asset to an amount that will “more likely
than not” be realized. The implementation of FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes did not impact White River’s consolidated financial statements. As
of December 31, 2008, there were no unrecognized tax benefits.






Results
of Operations




The
Quarter Ended March 31, 2009 Compared to the Quarter Ended March 31, 2008 –
Overview




Net
income was $1.3 million, or $0.31 per diluted share, for the quarter ended March
31, 2009, compared to net income of $3.7 million, or $0.94 per diluted share,
for the quarter ended March 31, 2008. The following items contributed to the
decrease of net income:




§
            Interest
      on receivables was $7.5 million and $8.1 million for the quarters ended
      March 31, 2009 and 2008, respectively.  This decline is the
      result of the continued liquidation of the UAC
  receivables.




§
            Accretion
      and other income decreased $3.4 million to $0.2 million for the quarter
      ended March 31, 2009 as compared to $3.6 million for the same period
      during 2008. This decline is the result of the decline of accretion income
      related to accumulated other comprehensive
  income.




§
            A
      provision for estimated credit losses of $1.8 million was recognized for
      the quarter ended March 31, 2009 compared to $1.2 million for the quarter
      ended March 31, 2008.




The above
decreases in net income were partially offset by a decrease in interest expense
for the quarter ended March 31, 2009 of $0.4 million as the result of the
reductions of debt and interest rates as compared to the quarter ended March 31,
2008.




13




Part
I   Financial Information
  Discussion
of Results




The
following table presents consolidated financial information for White River for
the periods indicated (in thousands):




For The Quarter Ended March 31,
      2009
                                                          
                                                          UAC
                                                          
                                                          
                                                          Coastal Credit
                                                          
                                                          
                                                          Corporate and Other
                                                          
                                                          
                                                          ConsolidatedInterest
      on receivables
                                                          
                                                          $
                                                          49
                                                          
                                                          
                                                          $
                                                          7,408
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          7,457Accretion
      and other interest
                                                          
                                                          
                                                          194
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          10
                                                          
                                                          
                                                          
                                                          204Total
      interest income
                                                          
                                                          
                                                          243
                                                          
                                                          
                                                          
                                                          7,408
                                                          
                                                          
                                                          
                                                          10
                                                          
                                                          
                                                          
                                                          7,661Interest
      expense
                                                          
                                                          
                                                          (43
                                                          )
                                                          
                                                          
                                                          (338
                                                          )
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (381
                                                          )Net
      interest margin
                                                          
                                                          
                                                          200
                                                          
                                                          
                                                          
                                                          7,070
                                                          
                                                          
                                                          
                                                          10
                                                          
                                                          
                                                          
                                                          7,280Recovery
      (provision) for estimated credit losses
                                                          
                                                          
                                                          114
                                                          
                                                          
                                                          
                                                          (1,926
                                                          )
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (1,812
                                                          )Net
      interest margin after recovery (provision) for estimated credit
      losses
                                                          
                                                          
                                                          314
                                                          
                                                          
                                                          
                                                          5,144
                                                          
                                                          
                                                          
                                                          10
                                                          
                                                          
                                                          
                                                          5,468OTHER
      REVENUES (EXPENSES):Salaries
      and benefits
                                                          
                                                          
                                                          (42
                                                          )
                                                          
                                                          
                                                          (1,978
                                                          )
                                                          
                                                          
                                                          (99
                                                          )
                                                          
                                                          
                                                          (2,119
                                                          )Operating
      expenses
                                                          
                                                          
                                                          (76
                                                          )
                                                          
                                                          
                                                          (791
                                                          )
                                                          
                                                          
                                                          (537
                                                          )
                                                          
                                                          
                                                          (1,404
                                                          )Third
      party servicing expense
                                                          
                                                          
                                                          (14
                                                          )
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (14
                                                          )Change
      in fair market valuation of creditor liabilities
                                                          
                                                          
                                                          2
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          2Gain
      from extinguishment of debt
                                                          
                                                          
                                                          (991
                                                          )
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          991
                                                          
                                                          
                                                          
                                                          -Gain
      from deficiency account sale
                                                          
                                                          
                                                          162
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          162Other
      income (expense)
                                                          
                                                          
                                                          28
                                                          
                                                          
                                                          
                                                          (79
                                                          )
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (51
                                                          )Total
      other revenues (expenses)
                                                          
                                                          
                                                          (931
                                                          )
                                                          
                                                          
                                                          (2,848
                                                          )
                                                          
                                                          
                                                          355
                                                          
                                                          
                                                          
                                                          (3,424
                                                          )Income
      (loss) before income taxes
                                                          
                                                          
                                                          (617
                                                          )
                                                          
                                                          
                                                          2,296
                                                          
                                                          
                                                          
                                                          365
                                                          
                                                          
                                                          
                                                          2,044Income
      tax expense
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (770
                                                          )
                                                          
                                                          
                                                          (770
                                                          )Net
      income (loss)
                                                          
                                                          $
                                                          (617
                                                          )
                                                          
                                                          $
                                                          2,296
                                                          
                                                          
                                                          $
                                                          (405
                                                          )
                                                          
                                                          $
                                                          1,274







For The Quarter Ended March 31,
      2008
                                                      
                                                      UAC
                                                      
                                                      
                                                      Coastal Credit
                                                      
                                                      
                                                      Corporate and Other
                                                      
                                                      
                                                      ConsolidatedInterest
      on receivables
                                                      
                                                      $
                                                      769
                                                      
                                                      
                                                      $
                                                      7,301
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      8,070Accretion
      and other interest
                                                      
                                                      
                                                      3,561
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      4
                                                      
                                                      
                                                      
                                                      3,565Total
      interest income
                                                      
                                                      
                                                      4,330
                                                      
                                                      
                                                      
                                                      7,301
                                                      
                                                      
                                                      
                                                      4
                                                      
                                                      
                                                      
                                                      11,635Interest
      expense
                                                      
                                                      
                                                      (68
                                                      )
                                                      
                                                      
                                                      (764
                                                      )
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      (832
                                                      )Net
      interest margin
                                                      
                                                      
                                                      4,262
                                                      
                                                      
                                                      
                                                      6,537
                                                      
                                                      
                                                      
                                                      4
                                                      
                                                      
                                                      
                                                      10,803Recovery
      (provision) for estimated credit losses
                                                      
                                                      
                                                      412
                                                      
                                                      
                                                      
                                                      (1,609
                                                      )
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      (1,197
                                                      )Net
      interest margin after recovery (provision) for estimated credit
      losses
                                                      
                                                      
                                                      4,674
                                                      
                                                      
                                                      
                                                      4,928
                                                      
                                                      
                                                      
                                                      4
                                                      
                                                      
                                                      
                                                      9,606OTHER
      REVENUES (EXPENSES):Salaries
      and benefits
                                                      
                                                      
                                                      (78
                                                      )
                                                      
                                                      
                                                      (2,041
                                                      )
                                                      
                                                      
                                                      (175
                                                      )
                                                      
                                                      
                                                      (2,294
                                                      )Operating
      expenses
                                                      
                                                      
                                                      (144
                                                      )
                                                      
                                                      
                                                      (801
                                                      )
                                                      
                                                      
                                                      (466
                                                      )
                                                      
                                                      
                                                      (1,411
                                                      )Third
      party servicing expense
                                                      
                                                      
                                                      (114
                                                      )
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      (114
                                                      )Change
      in fair market valuation of creditor liabilities
                                                      
                                                      
                                                      (46
                                                      )
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      (46
                                                      )Gain
      from extinguishment of debt
                                                      
                                                      
                                                      (5,542
                                                      )
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      5,542
                                                      
                                                      
                                                      
                                                      -Gain
      from deficiency account sale
                                                      
                                                      
                                                      159
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      159Other
      income (expense)
                                                      
                                                      
                                                      34
                                                      
                                                      
                                                      
                                                      (68
                                                      )
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      (34
                                                      )Total
      other revenues (expenses)
                                                      
                                                      
                                                      (5,731
                                                      )
                                                      
                                                      
                                                      (2,910
                                                      )
                                                      
                                                      
                                                      4,901
                                                      
                                                      
                                                      
                                                      (3,740
                                                      )Income
      (loss) before income taxes
                                                      
                                                      
                                                      (1,057
                                                      )
                                                      
                                                      
                                                      2,018
                                                      
                                                      
                                                      
                                                      4,905
                                                      
                                                      
                                                      
                                                      5,866Income
      tax expense
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      (2,142
                                                      )
                                                      
                                                      
                                                      (2,142
                                                      )Net
      income (loss)
                                                      
                                                      $
                                                      (1,057
                                                      )
                                                      
                                                      $
                                                      2,018
                                                      
                                                      
                                                      $
                                                      2,763
                                                      
                                                      
                                                      $
                                                      3,724







14




Part
I   Financial Information
  The
Quarter Ended March 31, 2009 Compared to the Quarter Ended March 31,
2008




Interest
on receivables decreased to $7.5 million for the quarter ended March 31, 2009 as
compared to $8.1 million for the quarter ended March 31, 2008 as a result of the
continued liquidation of the UAC finance receivable portfolio. Interest on
receivables for Coastal Credit increased by $0.1 million. The Coastal Credit
average finance receivable balance increased to $92.2 million for the quarter
ended March 31, 2009 compared to $85.9 million for the quarter ended March 31,
2008.




Accretion
and other interest decreased to $0.2 million compared to $3.6 million for the
quarters ended March 31, 2009 and 2008, respectively. This decrease is the
result of a decrease in accretion income of the accumulated other comprehensive
income from UAC. The individual components of accretion and other interest
income are shown in the following table (in thousands):









Quarters
      Ended March 31,2009
                      
                      
                      2008UAC
      discount accretion from accumulated other comprehensive
    income
                      
                      $
                      193
                      
                      
                      $
                      3,550Interest
      on cash balances
                      
                      
                      11
                      
                      
                      
                      15Accretion
      and other interest income
                      
                      $
                      204
                      
                      
                      $
                      3,565







Interest
expense decreased 54.2% to $0.4 million compared to $0.8 million for the
quarters ended March 31, 2009 and 2008, respectively. Coastal Credit interest
expense decreased by $0.4 million to $0.3 million from $0.7 million for the
quarters ended March 31, 2009 and 2008, respectively, as a result of the
decrease in average debt to $41.1 million compared to $47.0 million, and a
reduction in interest rates, for the quarters ended March 31, 2009 and 2008,
respectively.




Provision
for estimated credit losses was $1.8 million compared to $1.2 million for the
quarters ended March 31, 2009 and 2008, respectively. Coastal Credit contributed
a provision of $1.9 million and $1.6 million for the quarters ended March 31,
2009 and 2008, respectively. Provision for estimated credit losses is charged to
income to bring Coastal Credit’s allowance for estimated credit losses to a
level which management considers adequate to absorb probable credit losses
inherent in the portfolio of finance receivables. This provision was partially
offset by a recovery of $0.1 million and $0.4 million to the provision for
estimated credit losses at UAC for the quarters ended March 31, 2009 and 2008,
respectively. This change in recovery for estimated credit losses is a result of
declining defaulted receivables between the periods.




Salaries
and benefits declined to $2.1 million from $2.3 million for the quarters ended
March 31, 2009 and 2008, respectively. This decline can be attributable to the
decrease in expense for stock based compensation as a result of awards fully
vesting during 2009.




Operating
expenses were unchanged at $1.4 million for the quarters ended March 31, 2009
and 2008.




Third
party servicing expenses decreased to $14,000 for the quarter ended March 31,
2009 compared to $114,000 for the quarter ended March 31, 2008. UAC is the only
segment that incurs this expense. This decrease is the result of the decline in
the number of accounts serviced by the third party servicer during the quarter
ended March 31, 2009 as compared to March 31, 2008. UAC pays a monthly servicing
fee per active receivable. As the number of receivable accounts decreases, the
third party servicing expense decreases.




15


Part
I   Financial Information


Income
tax expense was $0.8 million for the quarter ended March 31, 2009 compared to
$2.1 million for the quarter ended March 31, 2008. The expense is based on the
estimated effective tax rates for 2009 and 2008, respectively.




The
availability of tax benefits currently available to White River would be
jeopardized if an ownership change (as defined in IRS regulations governing Net
Operating Loss (“NOL”) carryforward limitations) were to occur in the future
with respect to White River. In general, an ownership change occurs when, as of
any testing date, the aggregate of the increase in percentage points of the
total amount of a corporation's stock owned by each 5-percent shareholder within
the meaning of the NOL carryforward limitations whose percentage ownership of
the stock has increased as of such date over the lowest percentage of the stock
owned by each such 5-percent shareholder at any time during the three-year
period preceding such date, is more than 50 percentage points. In general,
persons who own 5% or more of a corporation's stock are 5-percent shareholders,
and all other persons who own less than 5% of a corporation's stock are treated
together, as a single, public group 5-percent shareholder, regardless of whether
they own an aggregate of 5% of a corporation's stock. Calculating whether an
ownership change has occurred is subject to inherent uncertainty. This
uncertainty results from the complexity and ambiguity of the NOL carryforward
limitations as well as the limitations on the knowledge of a publicly-traded
corporation concerning the ownership of, and transactions in, its securities.
White River is not aware of any facts indicating that an ownership change
has occurred with respect to White River.






Financial
Condition as of March 31, 2009 and December 31, 2008




Finance
Receivables, Net




Finance
receivables, net increased to $87.2 million at March 31, 2009 as compared to
$84.2 million at December 31, 2008. UAC finance receivables, net decreased to
$0.5 million at March 31, 2009 as compared to $1.1 million at December 31, 2008.
Coastal Credit finance receivables, net increased to $86.7 million compared to
$83.1 million for the periods ended March 31, 2009 and December 31, 2008,
respectively.




A
significant number of contracts acquired by Coastal Credit are contracts made
with borrowers who are in the United States military.  As of March 31,
2009, 34.8% of the Coastal Credit receivables were with borrowers who are in the
United States military as compared to 32.8% as of December 31,
2008.  Coastal Credit believes that having in the portfolio a
significant percentage of contracts for which the borrowers are United States
military personnel contributes to lower payment delinquency and greater
collection personnel efficiency.  Coastal Credit requests that all
borrowers who are in the military use the military allotment system to make
payments on their contracts. Under this allotment system, the borrower
authorizes the military to make a payroll deduction for the amount of the
borrower’s monthly contract payment and to direct this deduction payment to
Coastal Credit on behalf of the borrower.  Delinquency of payments on
contracts paid by allotment historically has been less than delinquency of
payments on contracts not paid by allotment.  As a result, the
collection effort associated with the military contracts requires less time,
allowing Coastal Credit’s collection staff to focus on an increasing number of
non-military contracts.




As of
March 31, 2009, Coastal Credit’s finance receivables consisted exclusively of
contracts acquired by Coastal Credit without credit recourse to the dealer.
Although all the contracts in Coastal Credit’s portfolio were acquired without
credit recourse, each dealer remains liable to Coastal Credit for liabilities
arising from certain representations and warranties made by the dealer with
respect to compliance with applicable federal and state laws and valid title to
the vehicle.




Coastal
Credit’s policy is to only acquire a contract after the dealer has provided
Coastal Credit with the requisite proof that Coastal Credit will have a first
priority lien on the financed vehicle, that the borrower has obtained the
required collision insurance naming Coastal Credit as loss payee and that the
contract has been




16


Part
I   Financial Information


fully and
accurately completed and validly executed. Coastal Credit typically buys
contracts on an individual basis and occasionally considers portfolio
acquisitions as part of its growth strategy.




Accrued
Interest Payable




Accrued
interest payable was $0.1 million at March 31, 2009, compared to $0.2 million at
December 31, 2008. The change in accrued interest payable is the result of the
prepayment of the collateralized financing and a decline in the interest rate on
the line of credit.




Creditor
Notes Payable




Creditor
notes payable was approximately $53,000 at March 31, 2009, compared to
approximately $128,000 at December 31, 2008. The decrease was the result of
distributions to UAC’s third party creditor during the quarter ended March 31,
2009.






Liquidity
and Capital Resources for the Quarters Ended March 31, 2009 and
2008




Net cash
provided by operating activities was $3.3 million for the quarter ended March
31, 2009 compared to $2.6 million for the quarter ended March 31, 2008. The
change in net cash flows is primarily from the reduction of interest on expense
from Coastal Credit related to the reduction in the average line of credit
between the periods.




Net cash
used in investing activities was $4.8 million for the quarter ended March 31,
2009 compared to net cash provided by investing activities of $3.6 million for
quarter ended March 31, 2008. This change was primarily the result of a
reduction in the principal collection and recoveries on the UAC finance
receivable portfolio and the increase in purchases of finance receivables by
Coastal Credit during the quarter ended March 31, 2009 as compared to the
quarter ended March 31, 2008.




Net cash
provided by financing activities was $1.4 million for the quarter ended March
31, 2009 compared to net cash used in financing activities of $6.5 million for
the quarter ended March 31, 2008. Net cash flows provided by financing
activities for the quarter ended March 31, 2009 primarily resulted from the $1.5
million of net borrowings on the line of credit. Net cash used in financing
activities for the quarter ended March 31, 2008 primarily resulted from the $6.0
million net repayment on the line of credit.




At March
31, 2009, White River and its subsidiaries had cash and cash equivalents of $6.3
million compared to $3.5 million at March 31, 2008.




Coastal
Credit has a revolving credit facility from a lending institution with a maximum
borrowing limit at March 31, 2009 of $100.0 million. The maturity date is
December 31, 2011. As of March 31, 2009, Coastal Credit had $42.0 million of
indebtedness outstanding under this facility as compared to $44.0 million as of
March 31, 2008. Total availability under the line of credit was $77.4 million
based upon the level of eligible collateral with $35.4 million available in
excess of the amount utilized at March 31, 2009. The credit facility is secured
by substantially all of the assets of Coastal Credit. In addition, White River
has provided an unconditional corporate guaranty. Coastal Credit must maintain
specified financial ratios within guidelines established by the lender and is in
compliance with these ratios. Interest is paid monthly at a variable rate, based
on meeting certain financial criteria. At March 31, 2009, the rate was the
London Interbank Offered Rate (“LIBOR”) plus 2.60% (3.10%). There is an annual
commitment fee of 1/8 of 1% on the average daily unused commitment. In the event
of a significant pay down or an earlier retirement of the revolver commitment,
Coastal Credit would sustain certain prepayment penalties. This facility limits
distributions Coastal Credit may make to White River to 50% of Coastal Credit’s
net income in addition to permitted payments on subordinated debt.




17


Part
I   Financial Information


UAC’s
sources of liquidity are limited and consist of cash on hand, escrowed cash for
operations, funds from consolidated operations and cash collections of the
liquidating finance receivables. White River, as owner of the substantial
majority of UAC's notes and claims outstanding under the Plan of Reorganization,
is entitled to distribution of the substantial majority of these cash flows
as they are realized by UAC. However, the realization of such
projected cash flows is dependent upon the performance of the
underlying auto receivable portfolios and the effective servicing of such
receivables. In particular, if gross defaults, recoveries on defaulted
receivables or prepayments on such receivables are less favorable than the
rates projected by management, UAC's realization of such cash flows will
be reduced or delayed relative to such projections. Such reduction may
be material.




White
River’s sources of liquidity, as the parent company, are limited and consist of
cash on hand, payments by UAC on the UAC creditor notes payable owned by White
River and distributions by Coastal Credit (subject to restrictions under Coastal
Credit’s credit facility).




White
River has no present intention of paying cash dividends in the foreseeable
future.




Asset
Quality




Set forth
below is certain information concerning the credit loss experiences on the fixed
rate retail automobile receivables of White River. There can be no assurance
that future net credit loss experience on the receivables will be comparable to
that set forth below. See “Discussion of Forward-Looking
Statements.”




Finance
Receivables – Coastal Credit




Delinquency
experience of finance receivables at Coastal Credit, including unearned interest
($ in thousands):




March
      31, 2009
                                                              
                                                              December
      31, 2008$
                                                              
                                                              
                                                              
                                                              %
                                                              
                                                              $
                                                              
                                                              
                                                              
                                                              %Finance
      receivables - gross balance
                                                              
                                                              $
                                                              109,055
                                                              
                                                              
                                                              
                                                              
                                                              
                                                              
                                                              $
                                                              104,599Delinquencies:30-59
      days
                                                              
                                                              $
                                                              1,024
                                                              
                                                              
                                                              
                                                              0.9
                                                              %
                                                              
                                                              $
                                                              1,452
                                                              
                                                              
                                                              
                                                              1.4
                                                              %60-89
      days
                                                              
                                                              
                                                              964
                                                              
                                                              
                                                              
                                                              0.9
                                                              %
                                                              
                                                              
                                                              1,269
                                                              
                                                              
                                                              
                                                              1.2
                                                              %90+
      days
                                                              
                                                              
                                                              2,294
                                                              
                                                              
                                                              
                                                              2.1
                                                              %
                                                              
                                                              
                                                              1,943
                                                              
                                                              
                                                              
                                                              1.9
                                                              %Total
      delinquencies
                                                              
                                                              $
                                                              4,282
                                                              
                                                              
                                                              
                                                              3.9
                                                              %
                                                              
                                                              $
                                                              4,664
                                                              
                                                              
                                                              
                                                              4.5
                                                              %







As a
result of the nature of the customers in Coastal Credit’s portfolio, Coastal
Credit considers the establishment of an adequate allowance for loan losses to
be critical to its continued profitability. Coastal Credit has an allowance for
loan losses that is calculated independent of the aggregate acquisition
discounts and fees on finance receivables. Coastal Credit’s allowance for loan
losses is based upon the historical rate at which (1) current loans, (2)
contracts in a 30, 60 and 90+ day delinquency state and (3) loans ineligible for
its borrowing line, have defaulted. These historical rates are evaluated and
revised on a quarterly basis for current conditions. See “Discussion of
Forward-Looking Statements.”




18


Part
I   Financial Information
 Allowance
for loan losses of finance receivables ($ in thousands):


Quarters
      Ended March 31,2009
                                                  
                                                  
                                                  2008Balance
      at beginning of period
                                                  
                                                  $
                                                  7,560
                                                  
                                                  
                                                  $
                                                  6,810Charge-offs,
      net of recoveries
                                                  
                                                  
                                                  (1,801
                                                  )
                                                  
                                                  
                                                  (1,609
                                                  )Provision
      for estimated credit losses
                                                  
                                                  
                                                  1,926
                                                  
                                                  
                                                  
                                                  1,609Balance
      at the end of the period
                                                  
                                                  $
                                                  7,685
                                                  
                                                  
                                                  $
                                                  6,810Net
      charge-offs
                                                  
                                                  $
                                                  1,801
                                                  
                                                  
                                                  $
                                                  1,609Finance
      receivables, net of unearned finance charges
                                                  
                                                  $
                                                  106,135
                                                  
                                                  
                                                  $
                                                  96,945Allowance
      for loan losses as a percent of finance receivables, net of unearned
      finance charges
                                                  
                                                  
                                                  7.24
                                                  %
                                                  
                                                  
                                                  7.02
                                                  %Annualized
      net charge-offs as a percent of finance receivables, net of unearned
      finance charges
                                                  
                                                  
                                                  6.79
                                                  %
                                                  
                                                  
                                                  6.64
                                                  %Allowance
      for loan losses as a percent of annualized net charge-offs
                                                  
                                                  
                                                  106.68
                                                  %
                                                  
                                                  
                                                  105.81
                                                  %







Finance
Receivables – UAC




Delinquency
experience of finance receivables at UAC ($ in thousands):





March
      31, 2009
                                                                
                                                                December
      31, 2008$
                                                                
                                                                
                                                                
                                                                %
                                                                
                                                                $
                                                                
                                                                
                                                                
                                                                %Finance
      receivables principal balance
                                                                
                                                                $
                                                                520
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                $
                                                                1,103Delinquencies:30-59
      days
                                                                
                                                                $
                                                                94
                                                                
                                                                
                                                                
                                                                18.1
                                                                %
                                                                
                                                                $
                                                                195
                                                                
                                                                
                                                                
                                                                17.7
                                                                %60-89
      days
                                                                
                                                                
                                                                46
                                                                
                                                                
                                                                
                                                                8.8
                                                                %
                                                                
                                                                
                                                                76
                                                                
                                                                
                                                                
                                                                6.9
                                                                %90+
      days
                                                                
                                                                
                                                                9
                                                                
                                                                
                                                                
                                                                1.7
                                                                %
                                                                
                                                                
                                                                22
                                                                
                                                                
                                                                
                                                                2.0
                                                                %Total
      delinquencies
                                                                
                                                                $
                                                                149
                                                                
                                                                
                                                                
                                                                28.7
                                                                %
                                                                
                                                                $
                                                                293
                                                                
                                                                
                                                                
                                                                26.6
                                                                %





19


Part
I   Financial Information


Allowance
for loan losses of finance receivables ($ in thousands):




Quarters
      Ended March 31,2009
                                  
                                  
                                  2008Balance
      at the beginning of period
                                  
                                  $
                                  7
                                  
                                  
                                  $
                                  222Charge-offs
                                  
                                  
                                  (44
                                  )
                                  
                                  
                                  (331
                                  )Recoveries
                                  
                                  
                                  151
                                  
                                  
                                  
                                  534Recovery
      for estimated credit losses
                                  
                                  
                                  (114
                                  )
                                  
                                  
                                  (412
                                  )Balance
      at the end of the period
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  13Net
      charge-offs (recoveries)
                                  
                                  $
                                  (107
                                  )
                                  
                                  $
                                  (203
                                  )Finance
      receivables
                                  
                                  $
                                  520
                                  
                                  
                                  $
                                  7,311Allowance
      for loan losses as a percent of finance receivables
                                  
                                  
                                  0.00
                                  %
                                  
                                  
                                  0.18
                                  %









Recent
Market Developments




Since
January 2008, operations of many auto finance companies have been affected by
the significant contraction of the personal credit markets and the near
elimination of the securitization markets. In addition, there have been auto
finance companies which have seen their lines of credit reduced or terminated as
a result of the credit crisis. Some companies have been forced to severely
curtail loan purchases and originations or shut down operations as a result of a
lack of funding. We believe White River is well positioned to continue
operations and grow the company responsibly based on the following
factors:




·
            Coastal
      Credit is not dependent on the securitization market for
      financing.




·
            At
      March 31, 2009, there was $35.4 million available, in excess of the amount
      utilized, from the line of credit, which does not expire until December
      2011.




·
            White
      River is very well capitalized with an equity to asset ratio of 69.0% as
      of March 31, 2009.




While
there is never any guarantee White River will not be faced with similar
financing scenarios as others have seen, we believe White River is well
positioned in this difficult economic environment, and we expect to be able to
fund normal business operations and meet our general liquidity needs for the
next 12 months through access to the line of credit, cash flows from operation,
and our other funding sources.




20


Part
I   Financial Information
 Discussion
of Forward-Looking Statements
  The
preceding Management’s Discussion and Analysis contains forward-looking
statements within the meaning of The Private Securities Litigation Reform Act of
1995. Forward-looking statements are also made elsewhere in this report. White
River publishes other forward-looking statements from time to time. Statements
that are not historical in nature, including those containing words such as
“anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar
expressions, are intended to identify forward-looking statements.
We caution you to be aware of the speculative nature of “forward-looking
statements.” Although these statements reflect White River’s good faith belief
based on current expectations, estimates and projections about (among other
things) the industry and the markets in which White River operates, they are not
guarantees of future performance. Whether actual results will conform to
management’s expectations and predictions is subject to a number of known and
unknown risks and uncertainties, including:




·
            the
      risks and uncertainties discussed in White River’s Annual Report on Form
      10-K;


·
            general
      economic, market, or business
conditions;


·
            changes
      in economic variables, such as the availability of business and consumer
      credit, conditions in the housing market, energy costs, the number and
      size of personal bankruptcy filings, the rate of unemployment and the
      levels of consumer confidence and consumer
debt;


·
            changes
      in interest rates, the cost of funds, and demand for White River’s
      financial services;


·
            the
      level and volatility of equity prices, commodity prices, currency values,
      investments, and other market fluctuations and other market
      indices;


·
            changes
      in White River’s competitive
position;


·
            White
      River’s ability to manage growth;


·
            the
      opportunities that may be presented to and pursued by White
      River;


·
            competitive
      actions by other companies;


·
            changes
      in laws or regulations, including the impact of current, pending and
      future legislation and regulations, including the impact of recently
      enacted federal economic and financial markets recovery
      legislation;


·
            changes
      in the policies of federal or state regulators and
    agencies;


·
            the
      risk that the proposed merger with First Chicago may not be consummated,
      or that challenges associated with the integration and operation of the
      combined company following the merger may increase costs or impair or
      delay the anticipated benefits of the merger;
  and


·
            other
      circumstances, many of which are beyond White River’s
    control.




Consequently,
all of White River’s forward-looking statements are qualified by these
cautionary statements. White River may not realize the results anticipated by
management or, even if White River substantially realizes the results management
anticipates, the results may not have the consequences to, or effects on, White
River or its business or operations that management expects. Such differences
may be material. Except as required by applicable laws, White River does not
intend to publish updates or revisions of any forward-looking statements
management makes to reflect new information, future events or
otherwise.




21




Part
I   Financial Information


ITEM
4T.   CONTROLS AND PROCEDURES




Evaluation
of disclosure controls and procedures




White
River's chief executive officer and chief financial officer, after evaluating
the effectiveness of the White River's disclosure controls and procedures (as
defined in Sections 13a-15(e) and 15d-15(e) of the 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, White River's
disclosure controls and procedures are effective in ensuring that information
required to be disclosed by White River in the reports that 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.




Changes
in Internal Control Over Financial Reporting




During
White River’s fiscal quarter ended March 31, 2009, there were no changes in
White River’s internal controls over financial reporting that have materially
affected, or are reasonably likely to materially affect White River’s internal
control over financial reporting.




22


Part
II    Other Information




PART
II







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




On
October 27, 2008, White River announced that its board of directors had
authorized a stock repurchase program for up to 150,000, or approximately 3.9%,
of White River’s issued and outstanding shares of common
stock.  Repurchases under the program are not authorized to begin
until the third business day following the filing, with the SEC, of the Form S-4
registration statement relating to White River’s merger transaction with First
Chicago.  During the first quarter of 2009, White River made no
repurchases of its common stock under the stock repurchase program.









ITEM
6.   EXHIBITS.




No.
            
            Description31.1
            
            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












23


SIGNATURES




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









White
      River Capital, Inc.(Registrant)May
      14, 2009
            By:
            /s/
      Martin
      J. SzumskiMartin
      J. SzumskiChief
      Financial Officer(Signing
      on behalf of the registrant and as Principal Financial
      Officer)





24


EXHIBIT
INDEX


No.
            
            Description
            
            Location31.1
            
            CEO
      Certification required by 17 C.F.R. Section 240.13a-14(a)
            
            Attached31.2
            
            CFO
      Certification required by 17 C.F.R. Section 240.13a-14(a)
            
            Attached32
            
            Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002
            
            Attached