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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549

                                   FORM 10-KSB

[X]  Annual report under Section 13 or 15(d) of the Securities Exchange Act of
     1934 for the fiscal year ended December 31, 2005

[ ]  Transition report under Section 13 or 15(d) of The Securities Exchange Act
     of 1934 for the transition period from ____________ to ___________

                         COMMISSION FILE NUMBER 0-24501

                           BLUE RIVER BANCSHARES, INC.
                 (Name of small business issuer in its charter)

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            Indiana                                     35-2016637
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)
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                29 E. Washington St., Shelbyville, Indiana 46176
               (Address of principal executive offices) (Zip Code)

                    Issuer's telephone number (317) 398-9721

        Securities to be registered under Section 12 (b) of the Act: None

          Securities to be registered under Section 12 (g) of the Act:

                           Common Shares, No Par Value
                                (Title of class)

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. [ ]

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

                               Yes   X   No
                                   -----    -----

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Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

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

                               Yes       No   X
                                   -----    -----

State issuer's revenues for the year ended December 31, 2005: $7,100,000

The aggregate market value of the voting common stock of the issuer held by
non-affiliates, based upon the price of a share of common stock as quoted on the
Small-Cap Market of NASDAQ on March 24, 2006 was $23,849,000.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 3,507,150 shares of common stock as
of March 24, 2006.

DOCUMENTS INCORPORATED BY REFERENCE. If the following documents are incorporated
by reference, briefly describe them and identify the part of the Form 10-KSB
(e.g. Part I, Part II, etc.) into which the document is incorporated: (1) any
annual report to security holders; (2) any proxy or information statement; (3)
any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of
1933 ("Securities Act"). The listed documents should be clearly described for
identification purposes (e.g. annual report to security holders for fiscal year
ended December 31, 2005): The Registrant's Proxy Statement for the Annual
Meeting of Shareholders to be filed with the Commission not later than 120 days
after December 31, 2005 is incorporated by reference into Part III hereof, and
the Annual Report of Shareholders for the year ended December 31, 2005 is
incorporated by reference into Part II hereof.

Transitional Small Business Disclosure Format: Yes       No   X
                                                   -----    -----


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FORM 10-KSB TABLE OF CONTENTS

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                                                                            PAGE
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PART I
   Item  1 - Description of Business.....................................     4
   Item  2 - Description of Property.....................................    18
   Item  3 - Legal Proceedings...........................................    19
   Item  4 - Submission of Matters to a Vote of Security Holders ........    20
PART II
   Item  5 - Market for Common Equity, Related Stockholder Matters and
             Small Business Issuer Purchases of Equity Securities........    20
   Item  6 - Management's Discussion and Analysis or Plan of Operation...    20
   Item  7 - Financial Statements........................................    20
   Item  8 - Changes in and Disagreements with Accountants on Accounting
             and Financial Disclosure....................................    21
   Item 8A - Controls and Procedures.....................................    21
   Item 8B - Other Information...........................................    21
PART III
   Item  9 - Directors, Executive Officers, Promoters and Control
             Persons; Compliance with Section 16(a) of the Exchange Act..    22
   Item 10 - Executive Compensation .....................................    22
   Item 11 - Security Ownership of Certain Beneficial Owners and
             Management and Related Stockholder Matters..................    22
   Item 12 - Certain Relationships and Related Transactions..............    22
   Item 13 - Exhibits....................................................    23
   Item 14 - Principal Accountant Fees and Services......................    25
             Signature Page..............................................    26
             Exhibits....................................................    27
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PART I.

ITEM 1. DESCRIPTION OF BUSINESS

GENERAL

Blue River Bancshares, Inc. (the "Company" or "Blue River") was organized on
March 18, 1997 for the purpose of acquiring or forming a bank to be
headquartered in Shelbyville, Indiana. On February 5, 1998, the Company entered
into an Agreement of Affiliation and Merger (the "Merger Agreement") with Shelby
County Bancorp ("SCB" or the "Predecessor") and Shelby County Savings Bank (the
"Bank") pursuant to which the Company would acquire the Bank through the merger
of SCB into the Company (the "Merger").

On June 9, 2003, the Company and Unified Financial Services, Inc. entered into a
Stock Purchase Agreement pursuant to which the Company would acquire all of the
outstanding shares of common stock of Unified Banking Company, a wholly-owned
subsidiary of Unified Financial Services, Inc. On November 17, 2003 (effective
November 1, 2003), the Company completed the acquisition of all of the
outstanding shares of common stock of Unified Banking Company, located in
Lexington, Kentucky. Effective October 1, 2004, Unified Banking Company changed
its name to Paramount Bank and will be referred to as such throughout this
document.

On August 31, 2004, the Company and Heartland Bancshares, Inc. ("Heartland"),
Franklin, Indiana, entered into an Agreement of Affiliation and Merger which
provided for Heartland to merge with and into to the Company. The banking
subsidiaries, of the Company and Heartland, Shelby County Bank and Heartland
Community Bank, respectively, were also intended to merge their operations
pursuant to the merger agreement. On February 10, 2005, the Company and
Heartland mutually agreed to terminate the merger agreement and certain other
related agreements, including the reciprocal stock option agreements entered
into by the Company and Heartland in connection with the merger agreement.

The financial statements of the Company as of December 31, 2005 are presented on
a consolidated basis, including the Company's two major subsidiaries, Shelby
County Bank and Paramount Bank, (collectively the "Banks").

COMMUNITY BANKING

Blue River's strategy is to operate as a holding company of community based
financial institutions, each operating independently, with a decentralized
governance structure. This strategy does not depend upon geographic or
demographic factors. The strategy of Blue River is predicated upon the premise
that each financial institution acquired by Blue River should have a positive
impact on the stability and earnings of the Company. Therefore, the Company
grants significant autonomy to its banking offices in developing, delivering and
pricing its products at the local level.

The Company also emphasizes accountability by establishing standards that are
tied to success measures at each banking subsidiary. The combination of this
autonomy and accountability allows each of the Banks to provide personalized
customer service and still remain attentive to the financial performance of the
Company.

The Company believes that locally-managed banks can attract those customers who
prefer to conduct business with a local institution that demonstrates an active
interest in their business or personal financial affairs and can provide timely
responses and personal attention by its executive officers. The Company intends
for its Banks to maintain a strong commitment to community banking.

The Banks' offices are located in the Indiana cities of Shelbyville, Morristown
and St. Paul in Shelby County, Indiana, and one office in the city of Lexington,
Fayette County, Kentucky. The retail strategy of the Banks is to offer a wide
range of basic banking products and services that are reasonably priced and
easily understood by the customer. The Banks' commercial strategy centers on
small to medium-sized businesses.

LENDING ACTIVITIES

The Banks offer short and long-term real estate, consumer, commercial and other
loans to individuals and businesses in its market areas. While each loan must
meet minimum underwriting standards established in the Banks' credit policies,
lending officers are granted certain levels of autonomy in approving loans to
assure that the Banks are responsive to competitive issues and community needs.
The loan approval process also includes various levels of loan committees which
have authority above those limits of individual officers. Again, the structure
is such that customer service remains a priority while the appropriate oversight
of credit quality and pricing is maintained.


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Real estate loans provide interim and permanent financing for both single-family
and multi-family properties, medium and short-term loans for commercial,
agricultural and industrial property as well as consumer and commercial lines of
credit secured by real estate. The Banks originate variable and fixed rate real
estate mortgages. Each of the Banks maintain their own strategy in regard to
residential real estate lending, but have the ability to retain the loans in its
portfolio, sell the loans and retain servicing or sell the loans in the
secondary markets.

Commercial business loans include various types of secured and unsecured
commercial loans to customers in our market areas for the purpose of financing
equipment, working capital, expansion and other general business purposes.

Consumer loans include personal loans such as automobile loans and equity lines
of credit. The Banks current consumer lending does not include the purchase of
dealer paper, the purchase of consumer loan contracts or other "indirect" loans.

Agricultural loans are available solely to high credit worthy and local
customers or to government guarantee programs. These loans comprise a small
percentage of the current portfolios and are made only to serve the needs within
the local communities. These loans consist of both real estate and operating
lines of credit.

The overall portfolio mix in the banks is monitored to ensure that Qualified
Thrift Lender status is maintained.

FUNDING SOURCES

The Company's current funding is from current liquid assets. Funding of the
acquisition of Paramount Bank was partially funded with a term loan from a
commercial bank. This $4,000,000 loan was originally for a period of ten years.
The first two years of payments were interest only with the remaining eight
years requiring a full amortization with principal and interest payments. On
June 30, 2005, the Company and its commercial lender entered into a Third
Amendment to the original Credit Agreement dated November 19, 2003. The purposes
of which were to increase the outstanding principal amount of the Company's term
loan of $4,000,000 to $6,000,000, and to modify the repayment terms of the term
loan. Specifically, the repayment terms were amended to require interest only
until June 30, 2008, at which time the entire principal balance of the term loan
will be due. The Credit Agreement was also amended to include making a capital
contribution to one of the Company's subsidiaries, Shelby County Bank, as a
purpose of the term loan. The loan is secured by the capital stock of the Banks.
The interest rate is tied to prime for the full term of the loan. The spread
above prime can be adjusted downward based on performance criteria of the Banks.
Further, a $500,000 deposit was made at the lending bank and is held as
collateral for the term loan.

The Banks offer traditional deposit products including checking, NOW, savings
and time deposits. Additional funding sources include Federal Home Loan Bank
(the "FHLB") borrowings for overnight, short-term and term loans. Deposits of
the Banks are insured by the FDIC up to statutory limits.

GROWTH STRATEGY

The Company's growth strategy includes growing internally and expanding into new
and complementary markets when opportunities may arise. The Company believes it
has an infrastructure that will allow for growth.

CONSOLIDATED SERVICES

The Company provides general policy and management direction and specialized
staff support services for the Banks. These services include Human Resources
assistance and administration of employee benefit plans; internal auditing and
regulatory compliance reviews; and loan review and credit administration
services, including the evaluation of loan policy, individual credit reviews and
portfolio reviews.

REGULATORY MATTERS

On July 10, 2000 the Office of Thrift Supervision (the "OTS") issued a letter
which formally designated Shelby County Bank to be in "troubled condition" based
upon the preliminary findings of the OTS' then ongoing examination of the Bank.
On September 22, 2003, the OTS issued a letter which deemed Shelby County Bank
to no longer be in "troubled condition" and stated that restrictions contained
in their letter of July 10, 2000, no longer apply.

On February 7, 2001 the OTS issued a letter which formally designated Blue River
Bancshares, Inc. to be in "troubled condition" pursuant to the results of a
March 13, 2000 examination. On September 22, 2003, the OTS issued a letter which


                                       5

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deemed Blue River Bancshares, Inc., to no longer be in "troubled condition" and
stated that restrictions contained in the letter of February 7, 2001, no longer
apply.

ENVIRONMENTAL MATTERS RELATING TO ST. PAUL PROPERTY

In August 1993, Shelby County Savings Bank discovered the presence of petroleum
compounds in both the soil and groundwater underlying the property at the St.
Paul branch of the Bank. A portion of the property was the site of a former
gasoline station. The Bank engaged an environmental remediation firm to remove
the "free product" (i.e., gasoline) which was floating on top of the water table
at the St. Paul site. The cost of this clean-up work was approximately $10,000.
On April 13, 1995, the Bank sold a portion of the St. Paul property to a
resident of St. Paul, Indiana for nominal consideration. The Bank apprised the
buyer of the environmental matters relating to the real estate sold, and the
buyer released and indemnified the Bank from all future liability connected with
environmental conditions on this property. There can be no assurance that a
third party will not make a claim against the Bank with respect to the
contamination on or originating from this portion of the St. Paul property or
that if such a claim were made that the indemnification of the Bank by the buyer
of the property would be sufficient to reimburse the Bank for any damages
relating to such claim.

In early 1997, a heating oil storage tank was removed from the ground on the
portion of the property still owned by Shelby Count Bank and the area was
remediated by excavating the soil surrounding the location of the tank and
replacing it with granular fill material. In April 1998, Shelby County Bank
began the process of submitting the St. Paul branch location into Indiana's
Voluntary Remediation Program (the "VRP"). On June 26, 2002, the Bank submitted
a Remediation Work Plan with respect to the St. Paul branch of the Bank which is
currently entered in Indiana's Voluntary Remediation Program. On February 24,
2004, the Indiana Department of Environmental Management ("IDEM") approved the
Voluntary Remediation Work Plan ("RWP") submitted by the environmental
consultant on behalf of the Bank. The active remediation system was turned off
on September 18, 2002. A closure report requesting a Certificate of Completion
and a Covenant Not to Sue was submitted to IDEM on February 2, 2005.

On December 19, 2005, IDEM issued a letter to the Company indicating that the
closure report was approved. IDEM issued a Certificate of Completion on January
30, 2006 (which is recorded) and the Governor of the State of Indiana will issue
a Covenant Not to Sue.

Additionally, IDEM and the U.S. Environmental Protection Agency ("EPA") have a
Memorandum of Agreement that provides in substance that once a Certificate of
Completion has been issued by IDEM, unless the site poses an immediate and
substantial threat to human health and the environment, EPA will not plan or
anticipate any federal action under the Superfund law.


                                       6

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SERVICE CORPORATION SUBSIDIARY

Shelby County Bank wholly owns two subsidiaries. First Tier One Corporation, an
Indiana corporation, held common stock issued by Intrieve, Inc., the Bank's
previous data processing provider. Through March 1994, First Tier One
Corporation offered tax-deferred annuity products. With the conversion of the
data processing system, the stock in Intrieve was repurchased by Intrieve in
2003. The Shelby Group, Inc., an Indiana Corporation ("TSGI"), offered a full
line of insurance products, including health, life, auto and medical insurance.
The Bank ceased the operations of TSGI as of November 1, 1996. Paramount Bank
does not own any subsidiaries.

EMPLOYEES

As of December 31, 2005, the Banks employed 64 persons on a full-time basis and
7 persons on a part-time basis. Of the Banks' 64 full time employees, the
Company employed 6 of them on a part-time basis. In addition the Company
employed 1 person on a full-time basis. None of the Banks' employees are
represented by a collective bargaining group. Management of the Company
considers its employee relations to be good.

MARKET AREA

The Banks' primary service areas are Shelby County, Indiana which is located
approximately 25 miles southeast of Indianapolis, Indiana, and the city of
Lexington and Fayette County, Kentucky. The Banks also consider contiguous
counties and surrounding areas to be service areas and intend to provide banking
services into those surrounding markets.

According to the 2004 Census, Shelby County Indiana's population is 43,717,
ranked 33rd of 92 Indiana counties. The population increased by 7.8% compared to
the 1990 census. The population of Shelby County is projected to remain at 33rd
among the 92 counties in population growth projected to 2010. Shelby County
businesses employed 22,894 full and part-time workers in 2004. The Shelby County
total payrolls are comprised of 98.5% from non-farm employment, with the most
prevalent segments being manufacturing, other private, and retail. The
unemployment rate in Shelby County was 4.8% in November 2005, compared to a
state average of 5.0%.

Total deposits held by Shelby County financial institutions were $475 million at
June 30, 2005, according to the FDIC/OTS Summary of Deposits Report.

Fayette County Kentucky's population according to the estimated 2004 Census was
266,358, ranked 2nd of 120 Kentucky counties. The population has increased by
2.2% since the 2000 census. The civilian labor force of Fayette County was
149,274 in 2005. The Fayette County total payrolls are comprised mostly from
non-farm employment, with the most prevalent segments being government,
services, retail and manufacturing. According to the U.S. Department of Labor,
Bureau of Labor Statistics, the Fayette County unemployment rate was 3.9% in
2004 compared to 5.3% for Kentucky.

Total deposits held by Fayette County financial institutions as of June 30, 2005
were $4.6 billion according to the FDIC/OTS Summary of Deposits report.

The Company's executive offices are located at 29 East Washington Street, P.O.
Box 927, Shelbyville, Indiana 46176 and its telephone number is (317) 398-9721.

COMPETITION

The Company and the Banks face strong competition for deposits, loans and other
financial services from numerous banks, thrifts, credit unions and other
financial institutions as well as other entities which provide financial
services, including consumer finance companies, securities brokerage firms,
mortgage brokers, equipment leasing companies, insurance companies, mutual
funds, and other lending sources and investment alternatives. Some of the
financial institutions and financial services providers with which the Banks
compete are not subject to the same degree of regulation as the Banks. Many of
the financial institutions aggressively compete for business in the Banks'
market areas. Many of these competitors have been in business for many years,
have established customer bases and have substantially higher lending limits
than the Banks. In addition, most of these entities have greater capital
resources than the Banks, which, among other things, may allow them to price
their services at levels more favorable to the customer and to provide larger
credit facilities than could the Banks.


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TAXATION

Federal Taxation. The Company and the Banks will file a consolidated federal
income tax return on the accrual basis for each calendar year ending December
31. The consolidated federal income tax return has the effect of eliminating
intercompany distributions, including dividends, in the computation of
consolidated taxable income. Income of the Company generally would not be taken
into account in determining the bad debt deduction allowed to the Bank,
regardless of whether a consolidated tax return is filed. However, certain
"functionally related" losses of the Company would be required to be taken into
account in determining the permitted bad debt deduction which, depending upon
the particular circumstances, could reduce the bad debt deduction. The Company's
federal income tax returns have not been audited.

Historically, savings associations, such as the Banks, have been permitted to
compute bad debt deductions using either the bank experience method or the
percentage of taxable income method. However, for years beginning after December
31, 1995, the Banks are no longer able to use the percentage of taxable income
method in computing its allocable tax bad debt deduction. The Banks are required
to compute its allocable deduction using the experience method. As a result of
the repeal of the percentage of taxable income method, reserves taken after 1987
using the percentage of taxable income method generally must be included in
future taxable income over a six-year period, although a two-year delay may be
permitted for institutions meeting a residential mortgage loan origination test.
In addition, the pre-1988 reserve, in which no deferred taxes have been
recorded, will not have to be recaptured into income unless (i) the Bank no
longer qualifies as a bank under the Internal Revenue Code of 1986, as amended
(the "Code"), or (ii) excess dividends are paid out by the Banks.

Depending on the composition of its items of income and expense, a savings
institution may be subject to the alternative minimum tax. A savings institution
must pay an alternative minimum tax equal to the amount (if any) by which 20% of
alternative minimum taxable income ("AMTI"), as reduced by an exemption varying
with AMTI, exceeds the regular tax due. AMTI equals regular taxable income
increased or decreased by certain tax preferences and adjustments, including
depreciation deductions in excess of that allowable for alternative minimum tax
purposes, tax-exempt interest on most private activity bonds issued after August
7, 1986 (reduced by any related interest expense disallowed for regular tax
purposes), the amount of the bad debt reserve deduction claimed in excess of the
deduction based on the experience method and 75% of the excess of adjusted
current earnings over AMTI (before this adjustment and before any alternative
tax net operating loss). AMTI may be reduced only up to 90% by net operating
loss carryovers, but alternative minimum tax paid that is attributable to most
preferences (although not to post-August 7, 1986 tax-exempt interest) can be
credited against regular tax due in later years.

On August 20, 1996, the "Small Business Job Protection Act of 1996" was passed
into law. One provision of this act repealed the special bad debt reserve method
for thrift institutions currently provided for in Section 593 of the Code. The
provision requires thrifts to recapture any reserves accumulated after 1987 but
generally forgives taxes owed. Thrift institutions have been given six years to
account for the recaptured excess reserves, beginning with the first taxable
year after 1995, and are permitted to delay the timing of this recapture for one
or two years subject to whether they meet certain residential loan test
requirements.

Income of the Banks appropriated to bad debt reserves and deducted for federal
income tax purposes is not available for payment of cash dividends or other
distributions to the Company without the payment of federal income taxes by the
Banks on the amount of such income deemed removed from the reserves at the
then-current income tax rate. At December 31, 2005, approximately $1.1 million
of the Banks, retained income represented bad debt deductions for which no
federal income tax provision had been made.

State Taxation. Shelby County Bank is subject to Indiana's Financial
Institutions Tax ("FIT") that is imposed at a flat rate of 8.5% on "adjusted
gross income." "Adjusted gross income," for purposes of FIT, begins with taxable
income as defined by Section 63 of the Code, and thus, incorporates federal tax
law to the extent that it affects the computation of taxable income. Federal
taxable income is then adjusted by several Indiana modifications. Other
applicable state taxes include generally applicable sales and use taxes plus
real and personal property taxes. Paramount Bank is subject to the Commonwealth
of Kentucky Savings and Loan Tax that is imposed at a flat rate of .10% or $1.00
on each $1,000 of deposits and capital.

The Company's state income tax returns have not been audited.


                                       8

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SUPERVISION AND REGULATION

GENERAL

Financial institutions and their holding companies are extensively regulated
under federal and state law. Consequently, the growth and earnings performance
of the Company and the Banks can be affected not only by management decisions
and general economic conditions, but also by the statutes administered by, and
the regulations and policies of, various governmental regulatory authorities.
Those authorities include, but are not limited to, the OTS, the Board of
Governors of the Federal Reserve System (the "Federal Reserve"), the Federal
Deposit Insurance Corporation (the "FDIC"), the Indiana Department of Financial
Institutions (the "Indiana DFI"), the Kentucky Department of Financial
Institutions (the "Kentucky DFI"), the Securities and Exchange Commission (the
"Commission"), the Internal Revenue Service and state taxing authorities. The
effect of such statutes, regulations and policies can be significant, and cannot
be predicted with a high degree of certainty.

Federal and state laws and regulations generally applicable to financial
institutions and their holding companies regulate, among other things, the scope
and operation of business, investments, deposit operations and processing,
reserves against deposits, capital levels relative to operations, lending
activities and practices, the nature and amount of collateral for loans, the
establishment of branches, mergers, consolidations and dividends. The system of
supervision and regulation applicable to the Company and the Banks establishes a
comprehensive framework for their respective operations and is intended
primarily for the protection of the FDIC's deposit insurance funds, the
depositors of the Banks and the public, rather than shareholders of the Banks or
the Company.

Federal law and regulations establish supervisory standards applicable to the
operation, management and lending activities of the Banks, including internal
controls, loan documentation, credit underwriting, interest rate exposure, asset
growth, compensation and loan-to-value ratios for loans secured by real
property. The Banks will continue to comply with these requirements, and in some
cases may apply more restrictive standards.

The following references to statutes and regulations are intended to summarize
material effects of certain government regulation on the business of the Company
and the Banks. Any change in government regulation may have a material adverse
effect on the Company, the Banks and their operations.

REGULATION OF THE COMPANY UNDER HOLA

As the holding company for the Banks, the Company is regulated as a "multiple
savings and loan holding company" within the meaning of Home Owners Loan Act
(the "HOLA"), and subject to regulatory oversight of the Director of the OTS. As
such, the Company is registered with the OTS and thereby subject to OTS
regulations, examinations, supervision and reporting requirements. As a
subsidiary of a multiple savings and loan holding company, the Banks are subject
to certain restrictions in their dealings with the Company and with other
companies affiliated with the Company.

In general, the HOLA prohibits a savings and loan holding company, without prior
approval of the Director of the OTS, from acquiring control of another savings
association or savings and loan holding company or retaining more than 5% of the
voting shares of a savings association or of another holding company which is
not a subsidiary. The HOLA restricts the ability of a director or officer of the
Company, or any person who owns more than 25% of the Company's common stock,
from acquiring control of another savings association or savings and loan
holding company without obtaining the prior approval of the Director of the OTS.

As a multiple savings and loan holding company, the activities of the Company
and the Banks are subject to certain restrictions. The HOLA provides that, among
other things, no multiple savings and loan holding company or subsidiary thereof
which is not a savings association shall commence or continue for a limited
period of time after becoming a multiple savings and loan holding company or
subsidiary thereof, any business activity other than (i) furnishing or
performing management services for a subsidiary savings association, (ii)
conducting an insurance agency or escrow business, (iii) holding, managing, or
liquidating assets owned by or acquired from a subsidiary savings association,
(iv) holding or managing properties used or occupied by a subsidiary savings
association, (v) acting as trustee under deeds of trust, (vi) those activities
previously directly authorized by the FSLIC by regulation as of March 5, 1987,
to be engaged in by multiple holding companies, or (vii) those activities
authorized by the Federal Reserve as permissible for bank holding companies,
unless the Director of the OTS by regulation prohibits or limits such activities
for savings and loan holding companies. Those activities described in (vii)
above must also be approved by the Director of the OTS before a multiple holding
company may engage in such activities.


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Indiana law permits federal and state savings association holding companies with
their home offices located outside of Indiana to acquire savings associations
whose home offices are located in Indiana and savings association holding
companies with their principal place of business in Indiana ("Indiana Savings
Association Holding Companies") upon receipt of approval by the Indiana DFI.
Moreover, Indiana Savings Association Holding Companies may acquire savings
associations with their home offices located outside of Indiana and savings
association holding companies with their principal place of business located
outside of Indiana upon receipt of approval by the Indiana DFI.

Kentucky law permits any savings association holding company having its
principal place of business in any state to acquire control of any Kentucky
savings association or of any savings association holding company having its
principal place of business in Kentucky, if the state wherein the savings
association holding company has its principal place of business authorizes the
acquisition of control of a savings association or savings association holding
company in that state by a savings association holding company having its
principal place of business in Kentucky under conditions substantially no more
restrictive than those imposed by Kentucky law.

No subsidiary savings association of a savings and loan holding company may
declare or pay a dividend on its permanent or nonwithdrawable stock unless it
first gives the Director of the OTS 30 days advance notice of such declaration
and payment. Any dividend declared during such period or without giving notice
shall be invalid.

REGULATION OF THE BANKS

The Banks are federally chartered Savings Association Insurance Fund ("SAIF")
insured savings associations. As such, the Banks are subject to extensive
regulation by the OTS and the FDIC. For example, the Banks must obtain OTS
approval before they may engage in certain activities and must file reports with
the OTS regarding their activities and financial condition. The OTS periodically
examines the Banks' books and records and, in conjunction with the FDIC, due to
SAIF insurance, in certain situations, has examination and enforcement powers.
This supervision and regulation is intended primarily for the protection of
depositors and federal deposit insurance funds. The semi-annual assessment owed
to the OTS, which is based upon a specified percentage of deposits, is
approximately $30,000 for Shelby County Bank and $16,000 for Paramount Bank or
an aggregate amount of $46,000.

The activities of the Banks are governed by the HOLA and, in certain respects,
the Federal Deposit Insurance Act, as amended (the "FDI Act"). The Director of
the OTS is authorized to promulgate regulations to ensure the safe and sound
operation of savings associations and may impose various requirements and
restrictions on the activities of savings associations.

FEDERAL HOME LOAN BANK SYSTEM. Shelby County Bank is a member of the FHLB of
Indianapolis and Paramount Bank is a member of the FHLB of Cincinnati. The FHLB
System consists of 12 regional FHLBs. Each FHLB serves as a reserve or central
bank for its members within its assigned region. It is funded primarily from
funds deposited by savings associations and proceeds derived from the sale of
consolidated obligations of the FHLB System. It makes loans to members (i.e.,
advances) in accordance with policies and procedures established by the Board of
Directors of the FHLB. All FHLB advances must be fully secured by sufficient
collateral as determined by the FHLB. The Federal Housing Finance Board, an
independent agency, controls the FHLB System, including the FHLBs of
Indianapolis and Cincinnati.

As a member of a FHLB, each Bank is required to purchase and maintain stock in
the FHLB in which it is a member in an amount equal to at least 1% of its
aggregate unpaid residential mortgage loans, home purchase contracts, or similar
obligations at the beginning of each year. At December 31, 2005, Shelby County
Bank's investment in stock of the FHLB of Indianapolis was $2,389,000 and
Paramount Bank's investment in stock of the FHLB of Cincinnati was $585,000. The
FHLB imposes various limitations on advances such as limiting the amount of
certain types of real estate-related collateral to 30% of a member's capital and
limiting total advances to a member. Interest rates charged for advances vary
depending upon maturity, the cost of funds to the FHLB and the purpose of the
borrowing.

The FHLBs are required to provide funds for the resolution of troubled savings
associations and to contribute to affordable housing programs through direct
loans or interest subsidies on advances targeted for community investment and
low- and moderate-income housing projects. These contributions have adversely
affected the level of FHLB dividends paid and could continue to do so in the
future. For the year ended December 31, 2005, cash and stock dividends paid to
Shelby County Bank by the FHLB of Indianapolis totaled approximately $104,000,
and dividends paid to Paramount Bank by the FHLB of Cincinnati totaled
approximately $28,000 for an aggregate amount of $132,000 at an annual rate of
4.48%.


                                       10

<PAGE>

SAVINGS ASSOCIATION REGULATORY CAPITAL. Currently, savings associations are
subject to three separate minimum capital-to-assets requirements: (i) a leverage
limit, (ii) a tangible capital requirement, and (iii) a risk-based capital
requirement. The leverage limit requires that savings associations maintain
"core capital" of at least 4% of total assets, 3% for savings associations with
a composite rating of 1. Core capital is generally defined as common
shareholders' equity (including retained income), noncumulative perpetual
preferred stock and related surplus, certain minority equity interests in
subsidiaries, certain non-withdrawable accounts, qualifying supervisory
goodwill, purchased mortgage servicing rights and purchased credit card
relationships (subject to certain limits) less nonqualifying intangibles. Under
the tangible capital requirement, a savings association must maintain tangible
capital (core capital less all intangible assets except purchased mortgage
servicing rights which may be included after making the above-noted adjustment
in an amount up to 100% of tangible capital) of at least 1.5% of total assets.
Under the risk-based capital requirements, a minimum amount of capital must be
maintained by a savings association to account for the relative risks inherent
in the type and amount of assets held by the savings association. The risk-based
capital requirement requires a savings association to maintain capital (defined
generally for these purposes as core capital plus general valuation allowances
and permanent or maturing capital instruments such as preferred stock and
subordinated debt less assets required to be deducted) equal to 8.0% of
risk-weighted assets. Assets are ranked as to risk in one of four categories
(0-100%). A credit risk-free asset, such as cash, requires no risk-based
capital, while an asset with a significant credit risk, such as a non-accrual
loan, requires a risk factor of 100%. Moreover, a savings association must
deduct from capital, for purposes of meeting the core capital, tangible capital
and risk-based capital requirements, its entire investment in and loans to a
subsidiary engaged in activities not permissible for a national bank (other than
exclusively agency activities for its customers or mortgage banking
subsidiaries). At December 31, 2005, the Banks were in compliance with all
capital requirements imposed by law.

The following is a summary of Shelby County Bank's regulatory capital and
capital requirements at December 31, 2005:

<TABLE>
<CAPTION>
                                                    AS OF DECEMBER 31, 2005
                                 -------------------------------------------------------------
                                                                                  FDICIA
                                                                                REGULATIONS
                                                           MINIMUM FOR          TO BE "WELL
                                    ACTUAL CAPITAL       CAPITAL ADEQUACY       CAPITALIZED"
                                 -------------------   -------------------   -----------------
                                    AMOUNT     RATIO      AMOUNT     RATIO     AMOUNT    RATIO
                                 -----------   -----   -----------   -----   ---------   -----
<S>                              <C>           <C>     <C>           <C>     <C>         <C>
Tangible capital ratio           $11,196,000    8.5%    $1,987,000    1.5%   6,623,000    5.0%

Core capital to average assets    11,196,000    8.5%     5,299,000    4.0%   6,623,000    5.0%

Tier 1 capital to risk
   weighted assets                11,196,000   11.4%     3,938,000    4.0%   5,908,000    6.0%
Total capital to risk weighted
   assets                         12,018,000   12.2%     7,877,000    8.0%   9,846,000   10.0%
</TABLE>

The following is a summary of Paramount Bank's regulatory capital and capital
requirements at December 31 2005.

<TABLE>
<CAPTION>
                                                   AS OF DECEMBER 31, 2005
                                 -----------------------------------------------------------
                                                                                 FDICIA
                                                                              REGULATIONS
                                                          MINIMUM FOR         TO BE "WELL
                                    ACTUAL CAPITAL     CAPITAL ADEQUACY       CAPITALIZED"
                                 ------------------   ------------------   -----------------
                                   AMOUNT     RATIO     AMOUNT     RATIO     AMOUNT    RATIO
                                 ----------   -----   ----------   -----   ---------   -----
<S>                              <C>          <C>     <C>          <C>     <C>         <C>
Tangible capital ratio           $6,534,000    7.9%   $1,247,000    1.5%   4,156,000    5.0%

Core capital to average assets    6,534,000    7.9%    3,324,000    4.0%   4,156,000    5.0%

Tier 1 capital to risk
   weighted assets                6,534,000   10.5%    2,479,000    4.0%   3,718,000    6.0%
Total capital to risk weighted
   assets                         7,288,000   11.8%    4,957,000    8.0%   6,197,000   10.0%
</TABLE>

If an association is not in compliance with the capital requirements, the OTS is
required to prohibit asset growth and to impose a capital directive that may
restrict, among other things, the payment of dividends and officers'
compensation. In addition, the OTS and the FDIC generally are authorized to take
enforcement actions against a savings association that fails to meet its capital
requirements. These actions may include restricting the operations activities of
the association, imposing a capital directive, cease and desist order, or civil
money penalties, or imposing harsher measures such as appointing a receiver or
conservator or forcing the association to merge into another institution.


                                       11

<PAGE>

DIVIDEND LIMITATIONS. An OTS regulation imposes limitations upon all "capital
distributions" by savings associations, including cash dividends, payments by an
association to repurchase or otherwise acquire its shares, payments to
shareholders of another institution in a cash-out merger and other distributions
charged against capital. Under the regulation a savings association may be
required to file an application, a notice or nothing at all prior to making a
capital distribution. A savings association will be required to file an
application prior to making a capital distribution if (i) the association is not
eligible for expedited treatment under the applicable OTS regulations, (ii) the
total amount of all of the associations capital distributions (including the
proposed capital distribution) for the applicable calendar year exceeds the
association's net income for that year to date plus the association's retained
net income for the preceding two years, (iii) the distribution, or (iv) the
proposed capital distribution would violate a prohibition contained in any
applicable statute, regulation, or agreement between the association and the OTS
(or the FDIC), or violate a condition imposed on the association in an
OTS-approved application or notice. A savings association will be required to
file a notice prior to making a capital distribution if: (i) the association
would not be well capitalized following the distribution, (ii) the proposed
capital distribution would reduce the amount of or retire any part of the
associations common or preferred stock or retire any part of debt instruments
such as notes or debentures included in capital under the OTS regulations, or
(iii) the association is a subsidiary of a savings and loan holding company.
Neither an application nor a notice will be required to be filed by the savings
association prior to making a capital distribution if none of the above criteria
are met.

REAL ESTATE LENDING STANDARDS. OTS regulations require savings associations to
establish and maintain written internal real estate lending policies. Each
association's lending policies must be consistent with safe and sound banking
practices and appropriate to the size of the association and the nature and
scope of its operations. The policies must establish loan portfolio
diversification standards; establish prudent underwriting standards, including
loan-to-value limits, that are clear and measurable; establish loan
administration procedures for the association's real estate portfolio; and
establish documentation, approval, and reporting requirements to monitor
compliance with the association's real estate lending policies. The
association's written real estate lending policies must be reviewed and approved
by the association's Board of Directors at least annually. Further, each
association is expected to monitor conditions in its real estate market to
ensure that its lending policies continue to be appropriate for current market
conditions.

LOANS TO ONE BORROWER. The Banks may not make a loan or extend credit to a
single or related group of borrowers in excess of 15% of its unimpaired capital
and surplus. Additional amounts may be lent, not in excess of 10% of unimpaired
capital and surplus, if such loans or extensions of credit are fully secured by
readily marketable collateral, including certain debt and equity securities but
not including real estate. In some cases, a savings association may lend up to
30 percent of unimpaired capital and surplus to one borrower for purposes of
developing domestic residential housing, provided that the association meets its
regulatory capital requirements and the OTS authorizes the association to use
this expanded lending authority. At December 31, 2005, the Banks did not have
any loans or extensions of credit to a single or related group of borrowers in
excess of its lending limits.

QUALIFIED THRIFT LENDER. Savings associations must meet a QTL test. If the Banks
maintain an appropriate level of qualified thrift investments ("QTIs")
(primarily residential mortgages and related investments, including certain
mortgage-related securities) and otherwise qualifies as QTLs, the Banks will
continue to enjoy full borrowing privileges from the FHLB. The required
percentage of QTIs is 65% of portfolio assets (defined as all assets minus
intangible assets, property used by the association in conducting its business
and liquid assets in an amount not exceeding 20% of total assets). In addition,
savings associations may include shares of stock of the FHLBs, FNMA, and FHLMC
as QTIs. Compliance with the QTL test is determined on a monthly basis in nine
out of every twelve months. As of December 31, 2005, the Banks were in
compliance with their QTL requirements, with approximately 87.75% of the assets
of Shelby County Bank and 84.79% of the assets of Paramount Bank invested in
QTIs.

A savings association which fails to meet the QTL test must either convert to a
bank (but its deposit insurance assessments and payments will be those of and
paid to the SAIF) or be subject to the following penalties: (i) it may not enter
into any new activity except for those permissible for a national bank and for a
savings association; (ii) its branching activities shall be limited to those of
a national bank; (iii) it shall not be eligible for any new FHLB advances; and
(iv) it shall be bound by regulations applicable to national banks respecting
payment of dividends. Three years after failing the QTL test the association
must (i) dispose of any investment or activity not permissible for a national
bank and a savings association and (ii) repay all outstanding FHLB advances. If
such a savings association is controlled by a savings and loan holding company,
then such holding company must, within a prescribed time period, become
registered as a bank holding company and become subject to all rules and
regulations applicable to bank holding companies (including restrictions as to
the scope of permissible business activities).


                                       12

<PAGE>

BRANCHING. The rules of the OTS on branching by federally-chartered savings
associations permit nationwide branching to the extent allowed by federal
statute. This permits federal savings associations with interstate networks to
diversify their loan portfolio and lines of business. The OTS authority
pre-empts any state law purporting to regulate branching by federal savings
associations.

INSURANCE OF DEPOSITS. The FDIC is an independent federal agency that insures
the deposits, up to prescribed statutory limits, of banks and thrifts and
safeguards the safety and soundness of the banking and thrift industries. The
FDIC administers two separate insurance funds, the Bank Insurance Fund (the
"BIF") for commercial banks and state savings banks and the SAIF for savings
associations such as the Banks and banks that have acquired deposits from
savings associations. The FDIC is required to maintain designated levels of
reserves in each fund.

The FDIC is authorized to establish separate annual assessment rates for deposit
insurance for members of the BIF and members of the SAIF. The FDIC may increase
assessment rates for either fund if necessary to restore the fund's ratio of
reserves to insured deposits to the target level within a reasonable time and
may decrease these rates if the target level has been met. The FDIC has
established a risk-based assessment system for both SAIF and BIF members. Under
this system, assessments vary depending on the risk the institution poses to its
deposit insurance fund. An institution's risk level is determined based on its
capital level and the FDIC's level of supervisory concern about the institution.

On September 30, 1996, President Clinton signed into law legislation which
included provisions designed to recapitalize the SAIF and eliminate the
significant premium disparity between the BIF and the SAIF. BIF institutions pay
lower assessments than comparable SAIF institutions because BIF institutions pay
only 20% of the rate being paid by SAIF institutions on their deposits with
respect to obligations issued by the federally-chartered corporation which
provided some of the financing to resolve the thrift crisis in the 1980's
("FICO"). The 1996 law also provides for the merger of the SAIF and the BIF, but
not until such time as bank and thrift charters are combined. Until the charters
are combined, savings associations with SAIF deposits may not transfer deposits
into the BIF system without paying various exit and entrance fees, and SAIF
institutions will continue to pay higher FICO assessments. Such exit and
entrance fees need not be paid if a SAIF institution converts to a bank charter
or merges with a bank, as long as the resulting bank continues to pay applicable
insurance assessments to the SAIF, and as long as certain other conditions are
met. The annual FDIC assessment for Paramount Bank was $11,000 for 2005. The
annual FDIC assessment for Shelby County Bank was $44,000 for 2005.

PROMPT CORRECTIVE ACTION. The Federal Deposit Insurance Corporation Improvement
Act of 1991 ("FDICIA") established a system of prompt corrective action to
resolve the problems of undercapitalized institutions. Under this system,
federal depository institution regulators are required to take certain mandatory
supervisory actions, and may take certain discretionary supervisory actions
against undercapitalized institutions, the severity of which depends upon the
institution's degree of capitalization. In addition, subject to a narrow
exception, FDICIA generally requires the federal depository institution
regulators to appoint a receiver or conservator for an institution that is
critically undercapitalized.

As mandated by FDICIA, the federal banking regulators have specified by
regulation the relevant capital measures at which an insured depository
institution is deemed well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized. Pursuant to the FDIC's regulations implementing the prompt
corrective action provisions of FDICIA, a bank will be deemed to be: (i) well
capitalized if the bank has a total risk-based capital ratio of 10% or greater,
Tier 1 risk-based capital ratio of 6% or greater and leverage ratio of 5% or
greater; (ii) adequately capitalized if the bank has a total risk-based capital
ratio of 8% or greater, Tier 1 risk-based capital ratio of 4% or greater and
leverage ratio of 4% or greater (3% for the most highly rated banks); (iii)
undercapitalized if the bank has a total risk-based capital ratio of less than
8%, or Tier 1 risk-based capital ratio of 4% or greater and leverage ratio of
less than 4% (less than 3% for the most highly rated banks); (iv) significantly
undercapitalized if the bank has a total risk-based capital ratio of less than
6%, Tier 1 risk-based capital ratio of less than 3% or leverage ratio of less
than 3%; and (v) critically undercapitalized if the bank has a ratio of tangible
equity to total assets of 2% or less. At December 31, 2005, the Banks were
categorized as "well capitalized," and not subject to regulatory order,
agreement or directive to meet and maintain a specific level for any capital
measure. However, there are no assurances that the Banks will maintain their
"well capitalized" status.

Subject to certain exceptions, these capital ratios are generally determined on
the basis of reports submitted by each depository institution and the reports of
examination by each institution's appropriate federal depository institution
regulatory agency. Depending upon the capital category to which an institution
is assigned, the regulators' corrective powers include: requiring the submission
of a capital restoration plan (which must include a holding company guarantee of
performance); placing limits on asset growth and restrictions on activities;
requiring the institution to issue additional capital stock (including
additional voting stock) or to be acquired; restricting transactions with
affiliates; restricting the interest rate the institution may pay on deposits;
ordering a new election of directors of the institution; requiring that senior
executive officers or directors be dismissed; prohibiting the institution from
accepting deposits from correspondent banks; requiring the holding company to


                                       13
<PAGE>

divest certain subsidiaries including the institution; requiring the institution
to divest certain subsidiaries; prohibiting the payment of principal or interest
on subordinated debt; and ultimately, appointing a receiver or conservator for
the institution.

In general, a depository institution may be reclassified to a lower category
than is indicated by its capital position if the appropriate federal depository
institution regulatory agency determines the institution to be otherwise in an
unsafe or unsound condition or to be engaged in an unsafe or unsound practice.
This could include a failure by the institution, following receipt of a
less-than-satisfactory rating on its most recent examination report, to correct
the deficiency.

TRANSACTIONS WITH AFFILIATES. The Banks are subject to certain restrictions
imposed by the Federal Reserve Act ("FRA") on any extensions of credit to the
Company or its subsidiaries, on investments in the stock or other securities of
the Company or its subsidiaries, and the acceptance of the stock or other
securities of the Company or its subsidiaries as collateral for loans. These
restrictions limit the aggregate amount of transactions with any individual
affiliate to 10% of the Banks' capital and surplus, limit the aggregate amount
of transactions with all affiliates to 20% of the Banks' capital and surplus,
require that loans and certain other extensions of credit be secured by
collateral in certain specified amounts and types, generally prohibit the
purchase of low quality assets from affiliates and generally require that
certain transactions with affiliates, including loans and asset purchases, be on
terms and under circumstances, including credit standards, that are
substantially the same or at least as favorable to the Banks as those prevailing
at the time for comparable transactions with nonaffiliated individuals or
entities.

Also, the FRA prescribes certain limitations and reporting requirements on
extensions of credit by the Banks to their directors and executive officers, to
directors and executive officers of the Company and its subsidiaries, to
principal shareholders of the Company and its subsidiaries, to principal
shareholders of the Company and to "related interests" of such directors,
officers and principal shareholders. Among other things, the FRA, and the
regulations thereunder, requires such loans to be made on substantially the same
terms as those offered to unaffiliated individuals, place limits on the amount
of loans the Bank may extend to such individuals and require certain approval
procedures to be followed. In addition, such legislation and regulations may
affect the terms upon which any person becoming a director or officer of the
Company or one of its subsidiaries or a principal shareholder of the Company may
obtain credit from banks with which the Banks maintain a correspondent
relationship.

LIMITATIONS ON RATES PAID FOR DEPOSITS. Regulations promulgated by the FDIC
pursuant to FDICIA limit the ability of insured depository institutions to
accept, renew or roll over deposits by offering rates of interest which are
significantly higher than the prevailing rates of interest on deposits offered
by other insured depository institutions having the same type of charter in the
institution's normal market area. Under these regulations, "well-capitalized"
depository institutions may accept, renew or roll such deposits over without
restriction, "adequately capitalized" depository institutions may accept, renew
or roll such deposits over with a waiver from the FDIC (subject to certain
restrictions on payments of rates) and "undercapitalized" depository
institutions may not accept, renew or roll such deposits over. The regulations
contemplate that the definitions of "well capitalized," "adequately capitalized"
and "undercapitalized" will be the same as the definition adopted by the
agencies to implement the corrective action provisions of FDICIA. The Banks do
not believe that these regulations will have a materially adverse effect on its
current operations.

COMMUNITY REINVESTMENT ACT MATTERS. Federal law requires that ratings of
depository institutions under the Community Reinvestment Act of 1977 ("CRA") be
disclosed. The disclosure includes both a four-unit descriptive rating
(outstanding, satisfactory, needs to improve, and substantial noncompliance) and
a written evaluation of an institution's performance. Each FHLB is required to
establish standards of community investment or service that its members must
maintain for continued access to long-term advances from the FHLBs. The
standards take into account a member's performance under the CRA and its record
of lending to first-time homebuyers. The OTS has designated the Banks' record of
meeting community credit as satisfactory.

SAFETY AND SOUNDNESS STANDARDS. The Federal banking agencies have adopted
guidelines which establish standards for internal controls, information systems,
internal audit systems, loan documentation, credit underwriting, interest rate
exposure, asset growth and compensation, fees and benefits, and specifically
prohibit, as an unsafe and unsound practice, excessive compensation that could
lead to a material loss to an institution. The federal banking agencies also
adopted asset quality and earnings standards. If an institution fails to comply
with any of the standards set forth in the guidelines, the institution's primary
federal regulator may require the institution to submit a plan for achieving and
maintaining compliance. Failure to submit an acceptable compliance plan, or
failure to adhere to a compliance plan that has been accepted by the appropriate
regulator, would constitute grounds for further enforcement action.

CONSUMER BANKING. The Banks' business include making a variety of types of loans
to consumers. In making these loans, the Banks are subject to state usury and
regulatory laws and to various federal statutes, such as the Equal Credit
Opportunity Act, Fair Credit Reporting Act, Truth in Lending Act, Real Estate
Settlement Procedures Act and Home Mortgage Disclosure Act,


                                       14

<PAGE>

and the regulations promulgated thereunder, which prohibit discrimination,
specify disclosures to be made to borrowers regarding credit and settlement
costs, restrict disclosure of financial information to others and regulate the
mortgage loan servicing activities of the Banks, including the maintenance and
operation of escrow accounts and the transfer of mortgage loan servicing. The
Riegle Act imposed new escrow requirements on depository and non-depository
mortgage lenders and services under the National Flood Insurance Program. See
"Supervision and Regulation -- Regulatory Developments." In receiving deposits,
the Banks will be subject to extensive regulation under state and federal law
and regulations, including the Truth in Savings Act, the Expedited Funds
Availability Act, the Bank Secrecy Act, the Electronic Funds Transfer Act and
the FDI Act. Violation of these laws could result in the imposition of
significant damages and fines upon the Banks, their directors and officers.

REGULATORY DEVELOPMENTS

In 1994, the Congress enacted two major pieces of banking legislation, the
Riegle Community Direction Act (the "Riegle Act") and the Riegle-Neal Interstate
Banking and Branching Efficiency Act (the "Riegle-Neal Act"). The Riegle Act
addressed such varied issues as the promotion of economic revitalization of
defined urban and rural "qualified distressed communities" through special
purpose "Community Development Financial Institutions," the expansion of
consumer protection with respect to certain loans secured by a consumer's home
and reverse mortgages and reductions in compliance burdens regarding Currency
Transaction Reports, in addition to reform of the National Flood Insurance
Program, the promotion of a secondary market for small business loans and leases
and mandating specific changes to reduce regulatory impositions on depository
institutions and holding companies.

The Riegle-Neal Act substantially changed the geographic constraints applicable
to the banking industry. Effective September 29, 1995, the Riegle-Neal Act
allows bank holding companies to acquire banks located in any state in the
United States without regard to geographic restrictions or reciprocity
requirements imposed by state law, but subject to certain conditions, including
limitations on the aggregate amount of deposits that may be held by the
acquiring holding company and all of its insured depository institution
affiliates. Effective June 1, 1997 (or earlier if expressly authorized by
applicable state law), the Riegle-Neal Act allows banks to establish interstate
branch networks through acquisitions of other banks, subject to certain
conditions, including certain limitations on the aggregate amount of deposits
that may be held by the surviving bank and all of its insured depository
institution affiliates. The establishment of de novo interstate branches or the
acquisition of individual branches of a bank in another state (rather than the
acquisition of an out-of-state bank in its entirety) is allowed by the
Riegle-Neal Act only if specifically authorized by state law. The legislation
allowed individual states to "opt-out" of certain provisions of the Riegle-Neal
Act by enacting appropriate legislation prior to June 1, 1997.

Effective March 14, 1996, Indiana "opted in" to the interstate branching
provisions of the Riegle-Neal Act. The Indiana legislation authorizes, subject
to certain approval and other requirements, Indiana-chartered banks to establish
branches in states other than Indiana and out-of-state banks to establish
branches in Indiana. Indiana and out-of-state banks are authorized to establish
branches either by acquisition or de novo.

Kentucky law, however, does not permit de novo branching by out-of-state banks
except under limited circumstances. An out-of-state bank may only establish a de
novo branch in Kentucky if the laws of the home state of the out-of-state bank
would reciprocally allow a Kentucky bank to establish a de novo branch in that
state. Out-of-state banks may establish branches in Kentucky by acquisition.

FDIC regulations, which became effective April 1, 1996, impose certain
limitations (and in certain cases, prohibitions) on (i) "golden parachute"
severance payments by troubled depository institutions, their subsidiaries and
affiliated holding companies to institution-affiliated parties (primarily
directors, officers, employees or principal shareholders of the institution),
and (ii) indemnification payments by a depository institution, their
subsidiaries and affiliated holding companies, regardless of financial
condition, to institution-affiliated parties. The FDIC regulations impose
limitations on indemnification payments which could restrict, in certain
circumstances, payments by the Company or the Banks to their respective
directors or officers otherwise permitted under state law.

The FDIC includes, in its evaluations of a bank's capital adequacy, an
assessment of the bank's exposure to declines in the economic value of the
bank's capital due to changes in interest rates. On June 26, 1996, the FDIC,
along with the Office of the Comptroller of the Currency (the "OCC") and the
Federal Reserve, issued a joint policy statement to provide guidance on sound
practices for managing interest rate risk. The statement sets forth the factors
the federal regulatory examiners will use to determine the adequacy of a bank's
capital for interest rate risk. These qualitative factors include the adequacy
and effectiveness of the bank's internal interest rate risk management process
and the level of interest rate exposure. Other qualitative factors that will be
considered include the size of the bank, the nature and complexity of its
activities, the adequacy of its capital and earnings in relation to the bank's
overall risk profile, and its earning exposure to interest rate movements. The


                                       15

<PAGE>

interagency supervisory policy statement describes the responsibilities of a
bank's board of directors in implementing a risk management process and the
requirements of the bank's senior management in ensuring the effective
management of interest rate risk. Further, the statement specifies the elements
that a risk management process must contain.

In August 1996, the Federal Reserve and the FDIC issued final regulations
further revising their risk-based capital standards to include a supervisory
framework for measuring market risk. The effect of the regulations is that any
bank holding company or bank which has significant exposure to market risk must
measure such risk using its own internal model, subject to the requirements
contained in the regulations, and must maintain adequate capital to support that
exposure.

The regulations apply to any bank holding company or bank whose trading activity
equals 10% or more of its total assets, or whose trading activity equals $1
billion or more. Examiners may require a bank holding company or bank that does
not meet the applicability criteria to comply with the capital requirements if
necessary for safety and soundness purposes.

The regulations contain supplemental rules to determine qualifying and excess
capital, calculate risk-weighted assets, calculate market risk equivalent assets
and calculate risk-based capital ratios adjusted for market risk.

The Gramm-Leach-Bliley Act modified laws related to financial privacy and
community reinvestment. The new financial privacy provisions generally prohibit
financial institutions, including the Company, from disclosing nonpublic
personal financial information to third parties unless customers have the
opportunity to "opt out" of the disclosure. The Gramm-Leach-Bliley Act also
requires an annual disclosure of an institutions privacy policy in addition to a
disclosure at the time that a customer relationship is established.

On October 26, 2001, President Bush signed the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001 (the "Patriot Act"). The Patriot Act is intended to strengthen the
ability of U. S. Law Enforcement to combat terrorism on a variety of fronts. The
potential impact of the Patriot Act on financial institutions is significant and
wide-ranging. By way of amendments to the Bank Secrecy Act, Title III of the
Patriot Act gives the federal government new powers to address terrorist threats
through enhanced domestic security measures intended to encourage information
sharing among bank regulatory agencies and law enforcement bodies. In addition,
the Patriot Act contains sweeping anti-money laundering and financial
transparency laws and requires financial institutions to implement additional
policies and procedures with respect to, or additional measures designed to
address, any or all of the following matters, among others: money laundering,
suspicious activities and currency transaction reporting, and currency crimes.

The Sarbanes-Oxley Act of 2002 implements a broad range of corporate governance
and accounting measures for public companies (including publicly-held bank
holding companies) designed to promote honesty and transparency in corporate
America. Sarbanes-Oxley's principal provisions, many of which have been
interpreted through regulations released in 2003, provide for and include, among
other things: (1) the creation of an independent accounting oversight board (2)
auditor independence and restriction of non-audit services that accountants may
provide to their audit clients (3) corporate governance and responsibility
measures, including financial statement certifications by the Chief Executive
Officer and Chief Financial Officer (4) increased oversight and enhancement of
certain requirements relating to audit committees and how they interact with the
Company's independent auditors, (5) requirements that audit committee members be
independent and barred from accepting consulting, advisory, or other
compensatory fees from the Company, (6) requirements that companies disclose
whether one member of the audit committee is a "financial expert" (as defined by
the SEC) and if not, why the audit committee does not have a financial expert
(7) expanded disclosure requirements for corporate insiders, including
accelerated reporting of stock transactions and a prohibition on insider trading
in black out periods (8) prohibition on personal loans to directors and
officers, except certain loans made by insured financial institutions on
nonpreferential terms and in compliance with other bank regulatory requirements,
(9) disclosure of a code of ethics and filing a Form 8K for a change or waiver
of such code, and (10) enhanced penalties for fraud and other violations.

Effective October 28, 2004, the Federal Reserve adopted final amendments to
Regulation CC and its commentary to implement the Check Clearing for the 21st
Century Act (the "Check 21 Act"). The Check 21 Act was enacted on October 28,
2003 and became effective on October 28, 2004.

To facilitate check truncation and electronic check exchange, the Check 21 Act
authorizes a new negotiable instrument called a "substitute check" and provides
that a properly prepared substitute check is the legal equivalent of the
original check for all purposes. A substitute check is a paper reproduction of
the original check that can be processed just like the original check. The Check
21 Act does not require any bank to create substitute checks or to accept checks
electronically. The Federal Reserve's amendments: (i) set forth the requirements
of the Check 21 Act that apply to all banks, including those that choose


                                       16

<PAGE>

not to create substitute checks; (ii) provide a model disclosure and model
notices relating to substitute checks; and (iii) set forth bank endorsement and
identification requirements for substitute checks.

On February 8, 2006, President Bush signed the Federal Deposit Insurance Reform
Act of 2005 ("FDIRA"). The FDIC must adopt rules implementing the various
provisions of FDIRA by November 5, 2006.

Among other things, FDIRA changes the Federal deposit insurance system by:

     -    raising the coverage level for retirement accounts to $250,000;

     -    indexing deposit insurance coverage levels for inflation beginning in
          2012;

     -    prohibiting undercapitalized financial institutions from accepting
          employee benefit plan deposits;

     -    merging the Bank Insurance Fund and Savings Association Insurance Fund
          into a new Deposit Insurance Fund (the "DIF"); and

     -    providing credits to financial institutions that capitalized the FDIC
          prior to 1996 to offset future assessment premiums.

FDIRA also authorizes the FDIC to revise the current risk-based assessment
system, subject to notice and comments, and caps the amount of the DIF at 1.50%
of domestic deposits. The FDIC must issue cash dividends, awarded on a
historical basis, for the amount of the DIF over the 1.50% ratio. Additionally,
if the DIF exceeds 1.35% of domestic deposits at year-end, the FDIC must issue
cash dividends, awarded on a historical basis, for half of the amount of the
excess.

Additional legislation and administrative actions affecting the banking industry
are being considered and in the future may be considered by the United States
Congress, state legislatures and various regulatory agencies, including those
referred to above. It cannot be predicted with certainty whether such
legislation or administrative action will be enacted or the extent to which the
banking industry in general or the Company and the Banks in particular would be
affected thereby.

FORWARD LOOKING STATEMENTS

A cautionary note about forward-looking statements. In its oral and written
communication, the Company from time to time includes forward-looking
statements, within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements can include statements about estimated
cost savings, plans and objectives for future operations, and expectations about
performance as well as economic and market conditions and trends. They often can
be identified by the use of words like "expect", "may", "could", "intend",
"project", "estimate", "believe" or "anticipate." The Company may include
forward-looking statements in filings with the Securities and Exchange
Commission, such as this Form 10-KSB, in other written materials, and in oral
statements made by senior management to analysts, investors, representatives of
the media, and others. It is intended that these forward-looking statements
speak only as of the date they are made, and the Company undertakes no
obligation to update any forward-looking statement to reflect events or
circumstances after the date on which the forward-looking statement is made or
to reflect the occurrence of unanticipated events. By their nature,
forward-looking statements are based on assumptions and are subject to risks,
uncertainties, and other factors. Actual results may differ materially from
those contained in the forward-looking statement. The discussion in the 2005
Annual Report to Shareholders under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations," incorporated in Item
6 of this Form 10-KSB, lists some of the factors which could cause the Company's
actual results to materially differ from those in any forward-looking
statements. Your attention is directed to this discussion which can be found in
Exhibit 13 to this Form 10-KSB. Other uncertainties which could affect the
Company's future performance include changes in interest rates, the effects of
competition, technological changes and regulatory developments; changes in
fiscal, monetary and tax policies; market, economic conditions, either
nationally or regionally, resulting in, among other things, credit quality
deterioration; and changes in the securities markets. Investors should consider
these risks, uncertainties, and other factors in addition to those mentioned by
the Company in its other filings from time to time when considering any
forward-looking statement.


                                       17

<PAGE>

ITEM 2. DESCRIPTION OF PROPERTY

The Company is located at 29 E. Washington Street, Shelbyville, Indiana, where
it shares space with the Main Office of Shelby County Bank. The Company
previously owned a building adjacent to its principal office. This building was
acquired in 1998 and sold in 2004 for a reported gain of $21,000. The Company
owns the land upon which the Rampart Office of Shelby County Bank is located.

Facilities of the Company's subsidiary, Shelby County Bank, include its Main
Office, Rampart Office, and St. Paul Office, which are owned and its Morristown
Office which is leased. This lease expires on December 17, 2018.

Facilities of the Corporation's subsidiary, Paramount Bank, include its Main
Office which is leased. The lease for the Main Office expires on January 15,
2021.

In the opinion of management, the Banks' properties are adequately covered by
insurance.

<TABLE>
<CAPTION>
                                                        NET BOOK VALUE
                                                         OF PROPERTY,    APPROXIMATE
                                          YEAR OPENED    FURNITURE AND      SQUARE
DESCRIPTION AND ADDRESS                   OR ACQUIRED      FIXTURES        FOOTAGE
-----------------------                   -----------   --------------   -----------
<S>                                       <C>           <C>              <C>
Shelbyville Main Office
29 East Washington St.                        1975         $826,898         15,000

Shelbyville Rampart Office
34 Rampart Street                             1995         $528,165          3,000

Morristown Office (leased property)
127 East Main Street                          1995         $  7,005          1,800

St. Paul Office
105 County Line Road                          1989         $ 43,591          1,476

Lexington Kentucky Office                     1999         $565,333          8,472
2424 Harrodsburg Road (leased property)
</TABLE>


                                       18

<PAGE>

ITEM 3. LEGAL PROCEEDINGS

In August 1993, Shelby County Savings Bank discovered the presence of petroleum
compounds in both the soil and groundwater underlying the property at the St.
Paul branch of the Bank. (See complete discussion of this proceeding in Item 1.)

On or about September 27, 2005, Atomic Plastics, LLC filed a complaint against
Shelby County Bank, East Penn Manufacturing Co., Inc. and Richard A. Borton.
Atomic Plastics, LLC claims that a former owner and employee (Richard A. Borton)
deposited checks payable to Atomic Plastics from East Penn Manufacturing, which
deposits were made into an account with Shelby County Bank. Atomic Plastic
contends Shelby County Bank was negligent in allowing Mr. Borton to negotiate
the checks and allowing him to open an account. As of December 31, 2005, only
Shelby County Bank has filed an Answer and an Amended Complaint was filed on
December 23, 2005. Management intends to vigorously defend this case. The
litigation is in its early stages and no discovery has been commenced; however,
based upon the facts known as of this date, the attorney for Shelby County Bank
anticipates a favorable outcome.


                                       19

<PAGE>

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

     Not applicable.

PART II.

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL
     BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

     In conjunction with a public offering of common stock completed in the
     second quarter of 1998, the Company obtained approval for quotation on the
     National Association of Securities Dealers Automated Quotation System
     Small-Cap Market ("NASDAQ") under the symbol "BRBI." During 2005, the
     Company satisfied all requirements for continued inclusion on, and was
     traded on, NASDAQ.

     As of March 22, 2006, there were 190 shareholders of record of Blue River
     common stock.

     The following table sets forth the high and low sale prices for Blue River
     common stock for the quarters during the years indicated, as reported by
     NASDAQ. Such over-the-counter quotations reflect inter-dealer prices,
     without retail mark-up, markdown or commission, and may not necessarily
     represent actual transactions.

<TABLE>
<CAPTION>
                      2005            2004
                 -------------   -------------
                  HIGH    LOW     HIGH    LOW
                 -----   -----   -----   -----
<S>              <C>     <C>     <C>     <C>
First Quarter    $5.57   $5.05   $6.79   $5.81
Second Quarter    5.34    4.77    6.84    5.90
Third Quarter     5.40    5.04    6.15    5.29
Fourth Quarter    5.41    5.00    5.59    5.15
</TABLE>

     The Company did not declare any dividend on its shares of common stock
     during 2005 or 2004. Future dividend payments by the Company are subject to
     regulatory and legal limitations and may be dependent upon dividends paid
     to the Company by the Banks. See "Business-Supervision and Regulation".

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     Pages 30 through 60 inclusive, of the Company's Annual Report to
     Shareholders for the year ended December 31, 2005 are incorporated herein
     by reference in regard to this item.

ITEM 7. FINANCIAL STATEMENTS

     Pages 61 through 95 inclusive, of the Company's Annual Report to
     Shareholders for the year ended December 31, 2005 are incorporated herein
     by reference in regard to this item.


                                       20
<PAGE>

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
     FINANCIAL DISCLOSURE

               Not applicable.

ITEM 8A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we carried out an evaluation
(the "Evaluation"), under the supervision and with the participation of our
Chief Executive Officer ("CEO") and Controller, of the effectiveness of the
design and operation of our disclosure controls and procedures ("Disclosure
Controls"). Based on the Evaluation, our CEO and Controller concluded that, our
Disclosure Controls were effective at the Reasonable Assurance level as
described below as of the end of the period covered by this report.

CHANGES IN INTERNAL CONTROLS

There were no changes in the Company's internal control over financial reporting
that occurred during the quarter ended December 31, 2005 that have materially
affected, or reasonably likely to affect, the Company's internal control over
financial reporting.

REASONABLE ASSURANCE LEVEL OF THE EFFECTIVENESS OF CONTROLS

Our management, including our CEO and Controller, does not expect that our
Disclosure Controls and internal controls will prevent all errors and all fraud.
A control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met. Further, the design of a control system must reflect the fact that
there are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any within the Company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple
error or mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management
override of the control.

The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can only be
reasonable assurance that any design will succeed in achieving its stated goals
under all potential future conditions; over time, control may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate. Because of the inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur and
not be detected.

CEO AND CONTROLLER CERTIFICATIONS

Appearing as exhibit to this report there are Certifications of the CEO and
Controller. The Certifications are required in accord with Section 302 of the
Sarbanes-Oxley Act of 2002 (the Section 302 Certifications). This Item of this
report, which you are currently reading is the information concerning the
Evaluation referred to in the Section 302 Certifications and this information
should be read in conjunction with the Section 302 Certifications for a more
complete understanding of the topics presented.

ITEM 8B. OTHER INFORMATION

               Not applicable.


                                       21

<PAGE>

PART III.

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
     WITH SECTION 16(A) OF THE EXCHANGE ACT

               This information is omitted from this report pursuant to General
               Instruction E. (3) of Form 10-KSB as the Company intends to file
               with the Commission its definitive Proxy Statement for the Annual
               Meeting of Shareholders pursuant to Regulation 14A of the
               Securities Exchange Act of 1934, as amended, not later than 120
               days after December 31, 2005.

ITEM 10. EXECUTIVE COMPENSATION

               This information is omitted from this report pursuant to General
               Instruction E. (3) of Form 10-KSB as the Company intends to file
               with the Commission its definitive Proxy Statement for the Annual
               Meeting of Shareholders pursuant to Regulation 14A of the
               Securities Exchange Act of 1934, as amended, not later than 120
               days after December 31, 2005.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
     RELATED STOCKHOLDER MATTERS

               This information is omitted from this report pursuant to General
               Instruction E. (3) of Form 10-KSB as the Company intends to file
               with the Commission its definitive Proxy Statement for the Annual
               Meeting of Shareholders pursuant to Regulation 14A of the
               Securities Exchange Act of 1934, as amended, not later than 120
               days after December 31, 2005.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

               This information is omitted from this report pursuant to General
               Instruction E. (3) of Form 10-KSB as the Company intends to file
               with the Commission its definitive Proxy Statement for the Annual
               Meeting of Shareholders pursuant to Regulation 14A of the
               Securities Exchange Act of 1934, as amended, not later than 120
               days after December 31, 2005.


                                       22

<PAGE>

ITEM 13. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) The following Exhibits are being filed as part of this 10-KSB:

2.01      Agreement of Affiliation and Merger, dated August 31, 2004, by and
          among Blue River Bancshares, Inc., Shelby County Bank, Heartland
          Bancshares, Inc. and Heartland Community Bank (Incorporated by
          reference to the Registrant's Form 8-K, filed on September 1, 2004)

2.02      Stock Option Agreement, dated August 31,2004, by and between Blue
          River Bancshares, Inc. and Heartland Bancshares, Inc. (Incorporated by
          reference to the Registrant's Form 8-K, filed on September 7, 2004)

2.03      Stock Option Agreement, dated August 31,2004, by and between Heartland
          Bancshares, Inc. and Blue River Bancshares, Inc. (Incorporated by
          reference to the Registrant's Form 8-K, filed on September 7, 2004)

2.04      Termination Agreement, dated February 10, 2005, by and among Blue
          River Bancshares, Inc., Shelby County Bank, Heartland Bancshares, Inc.
          and Heartland Community Bank (Incorporated by reference to the
          Registrant's Form 8-K, filed on February 10, 2005)

3(i)(a)   Articles of Incorporation (Incorporated by reference to the
          Registrant's Amendment No. 4 to the Registration Statement on Form
          SB-2, File No. 333-48269 filed on June 22, 1998)

3(i)(b)   Amendment to Articles of Incorporation, adopted May 13, 2004
          (Incorporated by reference to the Registrant's Form 10-QSB, filed on
          August 16, 2004)

3(ii)     Amended and Restated By-Laws (Incorporated by reference to the
          Registrant's Form 10-QSB, filed on August 16, 2004)

10.01     Registrant's Amended and Restated 1997 Directors' Stock Option Plan
          (Incorporated by reference to the Registrant's Amendment No. 2 to the
          Registration Statement on Form SB-2, File No. 333-48269 filed on June
          8, 1998) (1)

10.02     Registrant's Amended and Restated 1997 Key Employees' Stock Option
          Plan (Incorporated by reference to the Registrant's Amendment No. 2 to
          the Registration Statement on Form SB-2, File No. 333-48269 filed on
          June 8, 1998) (1)

10.03     Registrant's 2000 Directors' Stock Option Plan (Incorporated by
          reference to the Registrant's Form 10-KSB, filed on April 2, 2001) (1)

10.04     Registrant's 2000 Key Employees' Stock Option Plan (Incorporated by
          reference to the Registrant's Form 10-KSB, filed on April 2, 2001) (1)

10.05     Registrant's 2000 Employee Stock Purchase Plan (Incorporated by
          reference to the Registrant's Form 10-KSB, filed on April 2, 2001) (1)

10.06     Registrant's First Amendment of 2000 Key Employees' Stock Option Plan
          (Incorporated by reference to the Registrant's Form 10-KSB, filed on
          April 2, 2001) (1)

10.07     Registrant's 2002 Key Employees' Stock Option Plan (Incorporated by
          reference to the Registrant's Form 8-K, filed on March 31, 2003) (1)

10.08     Registrant's 2004 Stock Option Plan (Incorporated by reference to the
          Registrant's Proxy Statement, filed on April 8, 2004)

10.09     Registrant's Change in Control Agreement with Randy J. Collier
          (Incorporated by reference to the Registrant's Form 8-K, filed on
          March 31, 2003) (2)

10.10     Stock Purchase Agreement between Registrant and Paramount Bank
          (Incorporated by reference to the


                                       23

<PAGE>

          Registrant's Amendment No. 2 to the Registration Statement on Form
          8-K, filed on June 10, 2003)

10.11     Depository Agreement (Incorporated by reference to the Registrant's
          Form 10-KSB, filed on March 30, 2004)

10.12     Credit Agreement with Union Federal Bank (Incorporated by reference to
          the Registrant's Form 10-KSB, filed on March 30, 2004)

10.13     First Amendment to Credit Agreement with Union Federal Bank
          (Incorporated by reference to the Registrant's Form 8-K, filed on
          January 5, 2005)

10.14     Second Amendment to Credit Agreement with Union Federal Bank
          (Incorporated by reference to the Registrant's Form 8-K, filed on
          April 1, 2005)

10.15     Third Amendment to Credit Agreement with Union Federal Bank
          (Incorporated by reference to the Registrant's Form 8-K, filed on July
          5, 2005)

10.16     Collateral Pledge Agreement with Union Federal Bank (Incorporated by
          reference to the Registrant's Form 10-KSB, filed on March 30, 2004)

10.17     Severance Agreement and Release, dated October 4, 2004, by and between
          Blue River Bancshares, Inc. and Lawrence T. Toombs (Incorporated by
          reference to the Registrant's Form 8-K, filed on October 4, 2004)

10.18     Summary of compensation arrangements with Randy J. Collier
          (Incorporated by reference to the Registrant's Form 8-K, filed on
          March 28, 2005) (1)

10.19     Summary of cash bonus plan for management employees of the
          Registrant's subsidiaries (Incorporated by reference to the
          Registrant's Form 8, filed on March 28, 2005) (1)

10.20     Summary of compensation arrangements with Russell Breeden, III
          (Incorporated by reference to the Registrant's Form 8-K, filed on
          April 8, 2005) (1)

10.21     Summary of compensation arrangements with Steven R. Abel (Incorporated
          by reference to the Registrant's Form 8-K, filed on April 8, 2005) (1)

10.22     Summary of compensation arrangements with non-employee directors
          (Incorporated by reference to the Registrant's Form 8-K, filed on May
          31, 2005) (1)

13        The Annual Report to Shareholders of the Registrant for the year ended
          December 31, 2005 (Except for the pages and information thereof
          expressly incorporated by reference in this Form 10-KSB, the Annual
          Report to Shareholders is provided solely for the information of the
          Securities and Exchange Commission and is not deemed "filed" as part
          of this Form 10-KSB)

21        Subsidiaries of the Registrant

31.1      Certification for the Annual Report on Form 10-KSB by the Principal
          Executive Officer

31.2      Certification for the Annual Report on Form 10-KSB by the Principal
          Financial Officer

32.1      Certification of Principal Executive Officer pursuant to Section 906
          of the Sarbanes-Oxley Act of 2002

32.2      Certification of Principal Financial Officer pursuant to Section 906
          of the Sarbanes-Oxley Act of 2002

(1)  Management Compensatory Plan or Arrangement

(2)  Management Employment Contract


                                       24

<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

          This information is omitted from this report pursuant to General
          Instruction E. (3) of Form 10-KSB as the Company intends to file with
          the Commission its definitive Proxy Statement for the Annual Meeting
          of Shareholders pursuant to Regulation 14A of the Securities Exchange
          Act of 1934, as amended, not later than 120 days after December 31,
          2005.


                                       25
<PAGE>

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf of the undersigned, thereunto duly
authorized.

                                        Blue River Bancshares, Inc.
                                        (Registrant)


Date: March 31, 2006                    /s/ Russell Breeden, III
                                        ----------------------------------------
                                        Russell Breeden, III
                                        Chairman of the Board
                                        Chief Executive Officer, & President
                                        (Principal Executive Officer)

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.


Date: March 31, 2006                    /s/ Patrice M. Lima
                                        ----------------------------------------
                                        Patrice M. Lima
                                        Vice President & Controller
                                        (Principal Financial Officer)
                                        (Principal Accounting Officer)


Date: March 31, 2006                    /s/ Steven R. Abel
                                        ----------------------------------------
                                        Steven R. Abel,
                                        Vice Chairman of the Board


Date: March 31, 2006                    /s/ Wayne C. Ramsey
                                        ----------------------------------------
                                        Wayne C. Ramsey, Director


Date: March 31, 2006                    /s/ Wendell L. Bernard
                                        ----------------------------------------
                                        Wendell L. Bernard, Director


Date: March 31, 2006                    /s/ Peter G. DePrez
                                        ----------------------------------------
                                        Peter G. DePrez, Director


Date: March 31, 2006                    /s/ John Robert Owens
                                        ----------------------------------------
                                        John Robert Owens, Director


Date: March 31, 2006                    /s/ Robert J. Salyers
                                        ----------------------------------------
                                        Robert J. Salyers, Director


Date: March 31, 2006                    /s/ John Eckart
                                        ----------------------------------------
                                        John Eckart, Director


                                       26

<PAGE>

EXHIBIT INDEX

(a) The following Exhibits are being filed as part of this 10-KSB:

2.01      Agreement of Affiliation and Merger, dated August 31, 2004, by and
          among Blue River Bancshares, Inc., Shelby County Bank, Heartland
          Bancshares, Inc. and Heartland Community Bank (Incorporated by
          reference to the Registrant's Form 8-K, filed on September 1, 2004)

2.02      Stock Option Agreement, dated August 31,2004, by and between Blue
          River Bancshares, Inc. and Heartland Bancshares, Inc. (Incorporated by
          reference to the Registrant's Form 8-K, filed on September 7, 2004)

2.03      Stock Option Agreement, dated August 31,2004, by and between Heartland
          Bancshares, Inc. and Blue River Bancshares, Inc. (Incorporated by
          reference to the Registrant's Form 8-K, filed on September 7, 2004)

2.04      Termination Agreement, dated February 10, 2005, by and among Blue
          River Bancshares, Inc., Shelby County Bank, Heartland Bancshares, Inc.
          and Heartland Community Bank (Incorporated by reference to the
          Registrant's Form 8-K, filed on February 10, 2005)

3(i)(a)   Articles of Incorporation (Incorporated by reference to the
          Registrant's Amendment No. 4 to the Registration Statement on Form
          SB-2, File No. 333-48269 filed on June 22, 1998)

3(i)(b)   Amendment to Articles of Incorporation, adopted May 13, 2004
          (Incorporated by reference to the Registrant's Form 10-QSB, filed on
          August 16, 2004)

3(ii)     Amended and Restated By-Laws (Incorporated by reference to the
          Registrant's Form 10-QSB, filed on August 16, 2004)

10.01     Registrant's Amended and Restated 1997 Directors' Stock Option Plan
          (Incorporated by reference to the Registrant's Amendment No. 2 to the
          Registration Statement on Form SB-2, File No. 333-48269 filed on June
          8, 1998) (1)

10.02     Registrant's Amended and Restated 1997 Key Employees' Stock Option
          Plan (Incorporated by reference to the Registrant's Amendment No. 2 to
          the Registration Statement on Form SB-2, File No. 333-48269 filed on
          June 8, 1998) (1)

10.03     Registrant's 2000 Directors' Stock Option Plan (Incorporated by
          reference to the Registrant's Form 10-KSB, filed on April 2, 2001) (1)

10.04     Registrant's 2000 Key Employees' Stock Option Plan (Incorporated by
          reference to the Registrant's Form 10-KSB, filed on April 2, 2001) (1)

10.05     Registrant's 2000 Employee Stock Purchase Plan (Incorporated by
          reference to the Registrant's Form 10-KSB, filed on April 2, 2001) (1)

10.06     Registrant's First Amendment of 2000 Key Employees' Stock Option Plan
          (Incorporated by reference to the Registrant's Form 10-KSB, filed on
          April 2, 2001) (1)

10.07     Registrant's 2002 Key Employees' Stock Option Plan (Incorporated by
          reference to the Registrant's Form 8-K, filed on March 31, 2003) (1)

10.08     Registrant's 2004 Stock Option Plan (Incorporated by reference to the
          Registrant's Proxy Statement, filed on April 8, 2004)

10.09     Registrant's Change in Control Agreement with Randy J. Collier
          (Incorporated by reference to the Registrant's Form 8-K, filed on
          March 31, 2003) (2)

10.10     Stock Purchase Agreement between Registrant and Paramount Bank
          (Incorporated by reference to the


                                       27

<PAGE>

          Registrant's Amendment No. 2 to the Registration Statement on Form
          8-K, filed on June 10, 2003)

10.11     Depository Agreement (Incorporated by reference to the Registrant's
          Form 10-KSB, filed on March 30, 2004)

10.12     Credit Agreement with Union Federal Bank (Incorporated by reference to
          the Registrant's Form 10-KSB, filed on March 30, 2004)

10.13     First Amendment to Credit Agreement with Union Federal Bank
          (Incorporated by reference to the Registrant's Form 8-K, filed on
          January 5, 2005)

10.14     Second Amendment to Credit Agreement with Union Federal Bank
          (Incorporated by reference to the Registrant's Form 8-K, filed on
          April 1, 2005)

10.15     Third Amendment to Credit Agreement with Union Federal Bank
          (Incorporated by reference to the Registrant's Form 8-K, filed on July
          5, 2005)

10.16     Collateral Pledge Agreement with Union Federal Bank (Incorporated by
          reference to the Registrant's Form 10-KSB, filed on March 30,2004)

10.17     Severance Agreement and Release, dated October 4, 2004, by and between
          Blue River Bancshares, Inc. and Lawrence T. Toombs (Incorporated by
          reference to the Registrant's Form 8-K, filed on October 4, 2004)

10.18     Summary of compensation arrangements with Randy J. Collier
          (Incorporated by reference to the Registrant's Form 8-K, filed on
          March 28, 2005) (1)

10.19     Summary of cash bonus plan for management employees of the
          Registrant's subsidiaries (Incorporated by reference to the
          Registrant's Form 8, filed on March 28, 2005) (1)

10.20     Summary of compensation arrangements with Russell Breeden, III
          (Incorporated by reference to the Registrant's Form 8-K, filed on
          April 8, 2005) (1)

10.21     Summary of compensation arrangements with Steven R. Abel (Incorporated
          by reference to the Registrant's Form 8-K, filed on April 8, 2005) (1)

10.22     Summary of compensation arrangements with non-employee directors
          (Incorporated by reference to the Registrant's Form 8-K, filed on May
          31, 2005) (1)

13        The Annual Report to Shareholders of the Registrant for the year ended
          December 31, 2005 (Except for the pages and information thereof
          expressly incorporated by reference in this Form 10-KSB, the Annual
          Report to Shareholders is provided solely for the information of the
          Securities and Exchange Commission and is not deemed "filed" as part
          of this Form 10-KSB)

21        Subsidiaries of the Registrant

31.1      Certification for the Annual Report on Form 10-KSB by the Principal
          Executive Officer

31.2      Certification for the Annual Report on Form 10-KSB by the Principal
          Financial Officer

32.1      Certification of Principal Executive Officer pursuant to Section 906
          of the Sarbanes-Oxley Act of 2002

32.2      Certification of Principal Financial Officer pursuant to Section 906
          of the Sarbanes-Oxley Act of 2002

(1)  Management Compensatory Plan or Arrangement

(2)  Management Employment Contract


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