River Valley Bancorp

   P.O. Box 1590 Madison, Indiana 47250-0590 (812)273-4949 Fax - (812)273-4944


To Our Shareholders, Customers, and Friends:

It is my pleasure to present to you River Valley  Bancorp's  fifth Annual Report
to Shareholders covering the year ending December 31, 2000.

While the passing of a century marked a defining moment in time, year 2000 truly
was a  momentous  event in the  annals of River  Valley  Bancorp.  I  previously
characterized the year 1999 as a year of transitions for the organization and it
was hoped that 2000 would be the  foundation on which River Valley Bancorp would
be  reinvigorated.  I am proud to say that the  employees,  and  communities  we
serve, have responded.

Year  2000 was a record  year!  A year  that was not  defined  by one or two new
records  or  record  improvements,   but  a  year  where  there  was  meaningful
improvement in nearly every area of financial measurement.

Year 2000 was a year  that also saw the  organization  position  itself  for the
future.  The  Corporation  made a commitment to expand and renovate what will be
its main bank office.  This  expansion will afford the Bank to close a duplicate
full  service  office just blocks away while  expanding  its  physical  plant to
accommodate growth in lending and deposit services. The Bank also made necessary
commitments in  technological  improvements  that are providing new efficiencies
and controlling  operating  expenses.  The Corporation has positioned  itself to
respond to opportunities without disregarding  conservative principles that have
served the organization so well.

Operationally  for the year ended December 31, 2000, net income was  $1,610,000,
or basic  earnings per share of $1.88,  compared to  $1,039,000,  or $1.03 basic
earnings per share,  reported in 1999.  The return on average  assets for fiscal
2000 was 1.05%;  the return on average  equity was 9.45%.  For fiscal 1999 those
numbers  were  0.76% and 5.87%  respectively.  The  earnings  per share  reflect
continued prudent  repurchase of shares to be held as treasury shares.  The book
value  per share  was  $19.78 as of  December  31,  2000  compared  to $17.38 at
December 31, 1999.

The  Organization  experienced  good asset growth in fiscal 2000 led by superior
net loan growth.  Assets  totaled  $162.1  million as of December  31, 2000,  an
increase of 16.9%.  Net loans were $141.0 million,  an increase of $25.9 million
from that recorded as of December 31, 1999, or a 22.5%  increase.  Deposits also
increased by $15.9 million, or 13.9%, to $130.2 million as of December 31, 2000.

Additionally,  during 2000 the Company continued to reduce non-performing loans,
lowered its net loan  charge-offs,  as well as,  increased dollar funding of its
allowance for loan losses. As of December 31, 2000, non-performing loans totaled
$621,000,  or 0.38% of  total  assets,  compared  to  0.62% of total  assets  at
year-end 1999. Net loan  charge-offs for fiscal 2000 totaled just $47,000,  or a
50.5%  dollar  improvement  over  the  year  earlier  period.  Furthermore,  the
Corporation  made  provision  for loan losses of $227,000 in year 2000,  up from
$140,000 provided for in fiscal year 1999.

Our Bank's  service  promise  is  "Expect a  Difference!"  We have  worked  very
diligently to demonstrate that to our customer base each and every day. We trust
that  commitment  is  illustrated  here in these  pages.  We thank  you for your
continued support and patronage.

Respectfully,

/s/ Matthew P. Forrester
Matthew P. Forrester
President, CEO


<PAGE>



                              River Valley Bancorp

                            BUSINESS OF RIVER VALLEY

River  Valley  Bancorp  ("River  Valley"  or  the  "Corporation"),   an  Indiana
corporation, was formed in 1996 for the primary purpose of purchasing all of the
issued and  outstanding  common stock of River Valley  Financial  Bank (formerly
Madison First Federal Savings and Loan  Association;  hereinafter  "River Valley
Financial"  or the "Bank") in its  conversion  from  mutual to stock  form.  The
conversion  offering  was  completed  on  December  20,  1996,  with the sale of
1,190,250  common shares at an initial  offering  price of $10.00 per share.  On
December 23, 1996, the Corporation  utilized  approximately  $3.0 million of the
net conversion  proceeds to purchase 95.6% of the  outstanding  common shares of
Citizens  National  Bank of  Madison  ("Citizens")  in a  transaction  that  was
accounted for using the purchase  method of accounting.  River Valley  Financial
and Citizens  merged on November 20, 1997.  Future  references  to River Valley,
River  Valley  Financial  and  Citizens  are  utilized  herein,  as the  context
requires.

The activities of River Valley have been limited  primarily to holding the stock
of the Bank.  River Valley Financial was organized in 1875 under the laws of the
United States of America.  River Valley Financial  conducts  operations from its
five  full-service  office locations in Jefferson  County,  Indiana and offers a
variety of deposit and lending services to consumer and commercial  customers in
Jefferson and  surrounding  counties.  The Corporation is subject to regulation,
supervision  and  examination  by the Office of Thrift  Supervision  of the U.S.
Department  of  Treasury  (the  "OTS").  River  Valley  Financial  is subject to
regulation,  supervision  and  examination  by the OTS and the  Federal  Deposit
Insurance  Corporation  (the  "FDIC").  Deposits in River Valley  Financial  are
insured  up to  applicable  limits by the  Savings  Association  Insurance  Fund
("SAIF") of the FDIC.

                 MARKET PRICE OF THE CORPORATION'S COMMON SHARES
                         AND RELATED SHAREHOLDER MATTERS

There were 868,874 common shares of River Valley Bancorp outstanding at February
19, 2001, held of record by 379  shareholders.  The number of shareholders  does
not reflect  the number of persons or entities  who may hold stock in nominee or
"street name." Since December of 1996, the Corporation's common shares have been
listed on The Nasdaq SmallCap Market ("Nasdaq"), under the symbol "RIVR".

Presented  on the  following  page  are the high  and low  sale  prices  for the
Corporation's  common shares, as well as cash  distributions  paid thereon since
December  1998.  Such sales  prices do not  include  retail  financial  markups,
markdowns or commissions. Information relating to sales prices has been obtained
from Nasdaq.


<PAGE>
<TABLE>
<CAPTION>

                 MARKET PRICE OF THE CORPORATION'S COMMON SHARES
                   AND RELATED SHAREHOLDER MATTERS (CONTINUED)

Quarter Ended                           High                   Low                  Cash Distributions (1)

2000

<S>                                     <C>                    <C>                              <C>
  December 31, 2000                     $16.00                 $13.63                           $0.100
  September 30, 2000                     14.25                  12.88                            0.085
  June  30, 2000                         13.00                  10.44                            0.085
  March 31, 2000                         12.63                  10.25                            0.075

1999

  December 31, 1999                     $12.63                 $11.50                           $0.075
  September 30, 1999                     14.38                  13.00                            0.065
  June 30, 1999                          14.75                  12.25                            0.065
  March 31, 1999                         15.75                  13.13                            0.060

1998

  December 31, 1998                     $16.00                 $13.25                           $0.060
  September 30, 1998                     19.00                  13.75                            0.055
  June 30, 1998                          20.75                  18.38                            0.055
  March 31, 1998                         19.75                  18.50                            0.050
</TABLE>

(1)      River Valley  Financial  had filed a request with the Internal  Revenue
         Service  ("IRS") in 1995 to  deconsolidate  the Bank's  subsidiaries in
         future  federal  income  tax  return  filings.   In  August  1998,  the
         Corporation finalized a closing agreement with the IRS that enabled the
         Corporation and each of its subsidiaries to file separate  returns.  By
         definition,  the 1998 cash  distributions  have been  deemed a tax-free
         return of capital.

The high and low sales prices for River Valley's common shares between  December
31, 2000 and February 19, 2001 were $16.88 and $15.19, respectively.

Under OTS regulations applicable to converted savings associations, River Valley
Financial is not  permitted to pay a cash  dividend on its common  shares if the
regulatory  capital of River Valley  Financial would, as a result of the payment
of such  dividend,  be reduced  below the amount  required  for the  liquidation
account (which was  established  for the purpose of granting a limited  priority
claim on the  assets  of River  Valley  Financial,  in the  event of a  complete
liquidation,  to those members of River Valley  Financial  before the Conversion
who maintain a savings  account at River Valley  Financial after the Conversion)
or applicable regulatory capital requirements prescribed by the OTS.

Regulations of the OTS impose  limitations on the payment of dividends and other
capital  distributions  by savings  associations.  The OTS recently  amended its
capital  distribution  regulation  in a final rule which took effect on April 1,
1999. Because the Bank is a subsidiary of a savings and loan holding company, it
is  required  to file a notice  with the OTS 30 days  before  making any capital
distributions  to the Holding  Company.  It may also have to file an application
for approval of a proposed capital  distribution with the OTS if the Bank is not
eligible for expedited  treatment under the OTS's application  processing rules,
or the total amount of all capital distributions, including the proposed capital
distribution,  for the applicable  calendar year would exceed an amount equal to
the  Bank's net  earnings  for that year to date plus the  Bank's  retained  net
earnings for the preceding two years. The Bank must also file an application for
approval  of  a  proposed  capital   distribution  if,  following  the  proposed
distribution,  the Bank would not be at least adequately  capitalized  under the
OTS prompt corrective action regulations,  or if the proposed distribution would
violate a  prohibition  contained  in any  applicable  statute,  regulation,  or
agreement between the OTS or the FDIC.


<PAGE>

           SELECTED CONSOLIDATED FINANCIAL INFORMATION AND OTHER DATA

The following tables set forth certain  information  concerning the consolidated
financial  condition,  earnings,  and other data  regarding  River Valley at the
dates and for the periods indicated.
<TABLE>
<CAPTION>
Selected consolidated financial condition data:  (1)                     At December 31,
                                                        2000          1999         1998            1997           1996
   Total amount of:                                                          (In thousands)
<S>                                                 <C>           <C>          <C>             <C>            <C>
   Assets                                           $162,130      $138,695     $138,369        $136,933       $145,541
   Loans receivable - net (2)                        140,970       115,131      112,385         111,887        108,994
   Cash and cash equivalents (3)                       6,382         8,052       12,307           5,765          8,785
   Mortgage-backed and related securities (4)          1,918         4,209        5,986           8,978         12,846
   Investment securities (4)                           5,329         5,230        1,283           4,272          8,948
   Deposits                                          130,225       114,251      118,151         114,955        125,656
   FHLB advances and other borrowings                 13,450         6,500          270           2,000          1,100
   Shareholders' equity- net                          17,184        16,866       18,613          17,989         16,805

   Summary of consolidated earnings data: (1)                        Year Ended December 31,
                                                        2000          1999         1998            1997           1996
                                                                           (In thousands, except share data)

   Total interest income                            $ 11,118     $   9,734      $10,108         $10,362     $    5,875
   Total interest expense                              5,637         4,617        4,842           5,049          3,412
                                                    --------     ---------      -------         -------     ----------
   Net interest income                                 5,481         5,117        5,266           5,313          2,463
   Provision for losses on loans                         227           140          275             304             22
                                                    --------     ---------      -------         -------     ----------
   Net interest income after provision for
   losses on loans                                     5,254         4,977        4,991           5,009          2,441

   Other income                                        1,053           844        1,188           1,134           578
   General, administrative and other expense           3,764         4,080        4,093           4,003          2,870
                                                    --------     ---------      -------         -------     ----------
   Earnings before income tax expense                  2,543         1,741        2,086           2,140            149
   Income tax expense                                    933           702          833             830             76
                                                    --------     ---------      -------         -------     ----------
   Net earnings                                      $ 1,610        $1,039      $ 1,253         $ 1,310     $       73
                                                    ========     =========      =======         =======     ==========
   Basic earnings per share (5)                        $1.88         $1.03        $1.13           $1.20            N/A
                                                    ========     =========      =======         =======     ==========
   Diluted earnings per share (5)                      $1.87         $1.03        $1.12           $1.18            N/A
                                                    ========     =========      =======         =======     ==========
</TABLE>

   ----------------------------

(1)  River Valley acquired Citizens as of December 20, 1996. The acquisition was
     accounted for using the purchase  method of  accounting.  The 1998 and 1997
     consolidated  financial  statements reflect the results of operations for a
     full year while the 1996 financial  statements  reflect only eleven days of
     activity with respect to Citizens.

(2)  Includes loans held for sale.

(3)  Includes  interest  earning assets,  federal funds sold and certificates of
     deposit in other financial institutions.

(4)  Includes securities designated as available for sale.

(5)  Earnings per share is not  applicable for the year ended December 31, 1996,
     as River Valley converted to stock form in 1996.


<PAGE>

<TABLE>
<CAPTION>
                 SELECTED CONSOLIDATED FINANCIAL INFORMATION AND
                             OTHER DATA (CONTINUED)


   Selected financial ratios and other data:

                                                                        Year ended December 31,
                                                  2000          1999             1998            1997         1996

<S>                                                <C>            <C>            <C>             <C>            <C>
Interest rate spread during period                 3.47%          3.63%          3.66%           3.64%          2.79%
Net yield on interest-earning assets (1)           3.79           3.94           4.08            4.00           2.98
Return on assets (2)                               1.05           0.76           0.92            0.99           0.08
Return on equity (3)                               9.45           5.87           6.85            7.53           1.05
Equity to assets (4)                              10.60          12.16          13.45           13.12          11.55
Average interest-earning assets to
  average interest-bearing liabilities           108.02         108.81         111.07          109.56         104.64
Non-performing assets to total assets (4)          0.38           0.62           1.47            0.58           0.56
Allowance for loan losses to total
  loans outstanding (4)                            1.21           1.28           1.33            1.13           1.06
Allowance for loan losses to
  non-performing loans (4)                       274.07         164.41          75.78          177.72         145.30
Net charge-offs to average total
  loans outstanding                                0.04           0.08           0.06            0.20           0.01
General, administrative and other expense
  to average assets (5) (6)                        2.47           2.97           3.01            2.83           3.33
Dividend payment ratio (7)                        18.45          25.73          19.64           11.02             --
Number of full service offices (4)                    5              5              5               6              6

</TABLE>

-------------------------------------

(1)  Net interest income divided by average interest-earning assets.
(2)  Net earnings divided by average total assets.
(3)  Net earnings divided by average total equity.
(4)  At end of period.
(5)  General, administrative and other expense divided by average total assets.
(6)  Includes a $503,000  charge  (or .94% of  weighted-average  assets) in 1996
     related to the SAIF recapitalization assessment.
(7)  Dividends per share divided by diluted earnings per share.


<PAGE>

                              River Valley Bancorp

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

General

As discussed  previously,  River Valley was incorporated for the primary purpose
of owning all of the outstanding shares of River Valley Financial.  As a result,
the  discussion  that  follows  focuses on River  Valley  Financial's  financial
condition and results of  operations  for the periods  presented.  The following
discussion  and analysis of the financial  condition as of December 31, 2000 and
River  Valley's  results of operations  for periods prior to that date should be
read in conjunction  with the  consolidated  financial  statements and the notes
thereto, included elsewhere in this Annual Report.

In  addition to the  historical  information  contained  herein,  the  following
discussion   contains   forward-looking   statements   that  involve  risks  and
uncertainties. River Valley's operations and River Valley's actual results could
differ  significantly  from those discussed in the  forward-looking  statements.
Some of the  factors  that could cause or  contribute  to such  differences  are
discussed  herein  but also  include,  but are not  limited  to,  changes in the
economy and interest rates in the nation and River Valley's general market area.
The  forward-looking  statements  contained herein include those with respect to
the following matters:

     1.   Management's  determination  as to the amount and adequacy of the loan
          loss allowance;
     2.   The effect of changes in interest  rates on  financial  condition  and
          results of operations;
     3.   The effects of proposed  legislation  that would eliminate the federal
          thrift charter and the separate federal regulation of thrifts;
     4.   Management's   opinion   as  to  the   effect  of  recent   accounting
          pronouncements on River Valley's  consolidated  financial position and
          results of operations.

Discussion of Changes in Financial  Condition from December 31, 1999 to December
31, 2000

At December 31, 2000, River Valley's consolidated assets totaled $162.1 million,
representing an increase of $23.4 million over the December 31, 1999 total. This
increase  in assets was funded in part by a $15.9  million  increase in deposits
and a $7.0 million increase in borrowings.  Deposits increased to $130.2 million
as of December 31, 2000 from $114.3 million while borrowings increased from $6.5
million as of  December  31,  1999 to $13.5  million as of  December  31,  2000.
Shareholders'  equity was $17.2  million as December 31, 2000, a net increase of
$0.3 million from $16.9 million as of December 31, 1999. The modest  increase in
equity was  attributed  primarily  to net income of $1.6  million  offset by the
repurchase of approximately  $1,367,000,  or 101,623 shares of common stock held
as treasury shares.

Liquid assets (i.e.),  cash, federal funds sold,  interest-earning  deposits and
certificates of deposit) decreased by $1.7 million from December 31, 1999 levels
to a total of $6.4 million at December 31, 2000.  Investment  securities totaled
$5.3 million at December 31, 2000,  consistent with the $5.2 million reported at
December 31, 1999.  Mortgage-backed  securities  decreased by $2.3  million,  or
54.8%,  to a total of $1.9  million  at  December  31,  2000,  primarily  due to
principal repayments.


<PAGE>



                              River Valley Bancorp

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Discussion of Changes in Financial  Condition from December 31, 1999 to December
31, 2000 (continued)

Loans  receivable,  including  loans held for sale,  totaled  $141.0  million at
December  31,  2000,  an increase of $25.9  million,  or 22.5%,  over the $115.1
million total at December 31, 1999.  The increase  resulted  primarily from loan
originations  during  2000 of $85.3  million,  which  were  partially  offset by
principal  repayments  of  $58.2  million  and  sales  of  $2.6  million.   Loan
origination  volume for 2000 exceeded that of 1999 by $28.3  million,  or 49.7%.
There were  significant  increases in all types of lending with the exception of
land and  multi-family  loans.  The  volume  of loan  sales  into the  secondary
mortgage  market  decreased  during 2000 from 1999 volume by $11.6  million,  or
81.6%,  due in large part to the  maturation  of the market and to interest rate
pressures.

River Valley's consolidated allowance for loan losses totaled approximately $1.7
million for the year ended December 31, 2000, which  represented  1.21% of total
loans at that date. The allowance for loan losses totaled $1.5 million, or 1.28%
of total loans for the period  ended  December  31,  1999.  Nonperforming  loans
(defined  as  loans  delinquent  greater  than 90 days and  loans on  nonaccrual
status)  totaled  $0.6  million and $0.9  million at December 31, 2000 and 1999,
respectively.  The consolidated  allowance for loan losses  represented 274% and
178% of nonperforming loans at December 31, 2000 and 1999, respectively.

Although  management believes that its allowance for loan losses at December 31,
2000, was adequate based upon the available facts and  circumstances,  there can
be no assurance that additions to such allowance will not be necessary in future
periods, which could negatively affect the Corporation's results of operations.

Deposits  increased by $15.9 million,  or 13.9%, to a total of $130.2 million at
December  31,  2000,  compared to $114.3  million  total at December  31,  1999.
Savings and demand  deposits  decreased by $3.0 million,  or 5.4%,  during 2000,
while  certificates  of deposit  increased  by $19.0  million,  or 32.4%.  These
fluctuations in balances were attributed to customers' preference for fixed rate
savings  products  that  typically  provide  higher  yields  than  transactional
accounts.

Advances from the Federal Home Loan Bank and other borrowed  money  increased by
$7.0 million from the total at December 31, 1999, as current  period  borrowings
of $13.5 million were used in part to fund loan growth.

Shareholders'  equity totaled $17.2 million at December 31, 2000, an increase of
$0.3 million  from the $16.9  million  total at December 31, 1999.  The increase
resulted  primarily from net income of $1.6 million,  which was partially offset
by repurchases  of shares  totaling $1.4 million and cash dividends of $279,000.
This net  increase  also  includes a net  increase of $268,000  related to stock
benefit plans and unrealized gain on securities available for sale of $86,000.


<PAGE>

Comparison  of Results of Operations  for the Years Ended  December 31, 2000 and
1999

General

River Valley's net earnings for the year ended December 31, 2000,  totaled $1.61
million, an increase of $571,000,  or 55.0%, from net earnings reported in 1999.
The increase in net earnings in the 2000 period was primarily attributable to an
increase in net interest income of $364,000 and an increase of $209,000 in other
income,  while general,  administrative and other expense were $316,000 lower in
the current period.  The provision for federal income taxes was $231,000 more in
fiscal year 2000 as compared to the same period in 1999.  The provision for loan
losses in 2000 was $227,000 as compared to $140,000 in 1999.

Net Interest Income

Total interest  income for the year ended  December 31, 2000,  amounted to $11.1
million, an increase of $1.4 million, or 14.2%, from the 1999 total,  reflecting
the effects of higher average balances on average assets. The average balance of
interest-earning assets outstanding  year-to-year increased by $14.7 million and
the yield on those assets  increased  from an average  yield of 7.49% in 1999 to
7.68% in 2000. Interest income on loans and  mortgage-backed  securities totaled
$10.6 million for 2000,  an increase of  approximately  $1.5 million,  or 16.8%,
from  1999.  Interest  income  on  investments  and  interest-earning   deposits
decreased by $132,000,  or 19.0%, due to significantly  smaller average balances
despite higher average yields on those investments.

Interest expense on deposits increased by $663,000, or 14.8%, to a total of $5.1
million for the year ended  December 31, 2000,  due primarily to higher  average
balances  and a 28 basis point  increase in the  weighted  average cost of those
deposits.  The cost of deposits  increased from 3.82% in 1999 to 4.10% in fiscal
2000.  Interest  expense  on  borrowings  totaled  $500,000  for the year  ended
December  31, 2000,  an increase of $357,000  from 1999.  The increase  resulted
primarily from higher average borrowings year-to-year,  partially offset by a 76
basis point decrease in average cost.

As a result of the foregoing  changes in interest  income and interest  expense,
net interest  income  increased  during 2000 by $364,000,  or 7.1%,  compared to
1999.  The interest rate spread  decreased by 16 basis points for 2000, to 3.47%
from 3.63% in the 1999 period,  while the net interest  margin amounted to 3.79%
in 2000 and 3.94% in 1999.

Provision for Losses on Loans

A  provision  for  losses on loans is  charged  to  earnings  to bring the total
allowance for loan losses to a level considered  appropriate by management based
upon historical  experience,  the volume and type of lending  conducted by River
Valley  Financial,  the  status of past due  principal  and  interest  payments,
general  economic  conditions,  particularly  as such  conditions  relate to the
primary market area, and other factors related to the collectability of the loan
portfolio.  As a  result  of  such  analysis,  management  recorded  a  $227,000
provision  for  losses  on loans in 2000,  an  increase  of  $87,000,  or 62.1%,
compared  to the  $140,000  provision  recorded  in  1999.  The  current  period
provision  generally  reflects  growth  in the loan  portfolio,  coupled  with a
decrease in the level of nonperforming loans year-to-year.

<PAGE>

Comparison  of Results of Operations  for the Years Ended  December 31, 2000 and
1999 (continued)


Nonperforming  loans for the period ended December 31, 2000,  were  $621,000,  a
reduction of approximately $236,000 from the $857,000 recorded as of fiscal year
ended 1999. Net charge-offs  amounted to $47,000 in 2000, compared to $95,000 in
1999.  While  management  believes  that the  allowance  for  losses on loans is
adequate at December 31, 2000,  based upon  available  facts and  circumstances,
there can be no assurance that the loan loss allowance will be adequate to cover
losses on nonperforming assets in the future.

Other Income

Other income  amounted to $1.1 million for the year ended  December 31, 2000, an
increase of $209,000,  or 24.8%, compared to 1999, due primarily to increases in
service fees, charges and other operating income.

General, Administrative and Other Expense

General,  administrative  and other  expense  totaled  $3.8 million for the year
ended  December 31, 2000, a decrease of $316,000  over the 1999 total.  Employee
compensation  and  benefits  decreased by $137,000 in fiscal 2000 as compared to
1999  primarily  from  $150,000  in  non-recurring  expense  associated  with  a
severance agreement in a managerial restructuring completed in the third quarter
of fiscal 1999.  Occupancy and equipment expense increased only $4,000 in fiscal
2000 primarily from cost containment efforts, lower depreciation costs, and from
higher  charges  in  1999  associated  with  equipment   upgrades  and  expenses
associated  with Year 2000. All other operating  expenses  decreased by $183,000
from  decreases  in  legal  and  professional  services,  office  supplies,  and
educational expenses of staff.

Income Taxes

The  provision for income taxes  increased by $231,000,  or 32.9 %, for the year
ended December 31, 2000, as compared to 1999. The effective tax rates were 36.7%
and 40.3% for the years ended December 31, 2000 and 1999, respectively.

Comparison  of Results of Operations  for the Years Ended  December 31, 1999 and
1998

General

River Valley's net earnings for the year ended December 31, 1999,  totaled $1.04
million,  a decrease of $214,000,  or 17.1%, from net earnings reported in 1998.
The decrease in net earnings in the 1999 period was primarily  attributable to a
decrease in net interest  income of $149,000 and a decrease of $344,000 in other
income,  including  a decrease  of  $265,000 in the sale of loans from the prior
year  period.  General,  administrative  and  other  expense  for the  year  was
marginally  lower, but included  $150,000 in non-recurring  expenses  associated
with severance  agreements.  The provision for federal income taxes decreased by
$131,000  in  fiscal  year 1999 as  compared  to the same  period  in 1998.  The
provision for loan losses in 1999 was $140,000 as compared to $275,000 in 1998.
<PAGE>

Comparison  of Results of Operations  for the Years Ended  December 31, 1999 and
1998 (continued)

Net Interest Income

Total  interest  income for the year ended  December 31, 1999,  amounted to $9.7
million,  a decrease of $374,000,  or 3.7%, from the 1998 total,  reflecting the
effects of a lower yield on average assets. While the average balance of average
interest-earning  assets  outstanding  year-to-year  increased by $823,000,  the
yield on those assets  decreased from an average yield of 7.82% in 1998 to 7.49%
in 1999.  Interest income on loans and  mortgage-backed  securities totaled $9.0
million for 1999,  a decrease of  approximately  $684,000,  or 7.0%,  from 1998.
Interest  income on  investments  and  interest-earning  deposits  increased  by
$310,000,  or 80.9%,  due to an increase in the average  balance  outstanding of
$6.0  million  associated  with a  modest  decrease  in  the  average  yield  of
approximately 5 basis points in yield from the comparable 1998 period.

Interest expense on deposits decreased by $208,000,  or 4.4%, to a total of $4.5
million for the year ended  December 31, 1999, due primarily to a 30 basis point
decrease in the weighted  average cost of  deposits.  The cost of deposits  fell
from  4.12% in 1998 to 3.82% in 1999.  Interest  expense on  borrowings  totaled
$143,000 for the year ended December 31, 1999, a decrease of $17,000,  or 10.6%,
from  1998.  The  decrease  resulted  primarily  from lower  average  borrowings
year-to-year, partially offset by a 14 basis point increase in average cost.

As a result of the foregoing  changes in interest  income and interest  expense,
net interest  income  decreased  during 1999 by $149,000,  or 2.8%,  compared to
1998.  The interest  rate spread  decreased by 3 basis points for 1999, to 3.63%
from 3.66% in the 1998 period,  while the net interest  margin amounted to 3.94%
in 1999 and 4.08% in 1998.

Provision for Losses on Loans

A  provision  for  losses on loans is  charged  to  earnings  to bring the total
allowance for loan losses to a level considered  appropriate by management based
upon historical  experience,  the volume and type of lending  conducted by River
Valley  Financial,  the  status of past due  principal  and  interest  payments,
general  economic  conditions,  particularly  as such  conditions  relate to the
primary market area, and other factors related to the collectibility of the loan
portfolio.  As a  result  of  such  analysis,  management  recorded  a  $140,000
provision  for  losses  on loans in 1999,  a  decrease  of  $135,000,  or 49.1%,
compared  to the  $275,000  provision  recorded  in  1998.  The  current  period
provision  generally  reflects  growth  in the loan  portfolio,  coupled  with a
decrease in the level of nonperforming loans  year-to-year.  Nonperforming loans
for  the  period  ended  December  31,  1999,  were  $857,000,  a  reduction  of
approximately  $1.0  million  from the $1.9  million  recorded as of fiscal year
ended 1998. Net charge-offs  amounted to $95,000 in 1999, compared to $74,000 in
1998.  While  management  believes  that the  allowance  for losses on loans was
adequate at December 31, 1999,  based upon  available  facts and  circumstances,
there can be no assurance that the loan loss allowance will be adequate to cover
losses on nonperforming assets in the future.

Other Income

Other  income  amounted to $844,000  for the year ended  December  31,  1999,  a
decrease of $344,000,  or 29.0%,  compared to 1998, due primarily to a $265,000,
or 78.2%,  decrease  in gain on sale of loans and a $79,000  decrease in service
fees, charges and other operating income.

General, Administrative and Other Expense

General,  administrative  and other  expense  totaled  $4.1 million for the year
ended  December 31,  1999,  a decrease of $13,000 from the 1998 total.  Employee
compensation  and  benefits  decreased  by  $147,000  or 6.4% in fiscal  1999 as
compared to 1998  primarily from the decrease in the  Corporation's  stock price
used to record expense for various  compensation  programs,  and by decreases in
staffing  levels.  Included  in the 1999  compensation  expense is  $150,000  in
non-recurring  expense  associated  with a severance  agreement  in a managerial
restructuring  completed  in the third  quarter of fiscal  1999.  Occupancy  and
equipment  expense  increased by $80,000 or 16.5% in fiscal 1999  primarily from
charges  associated  with equipment  upgrades and expenses  associated with Year
2000. All other operating expenses increased by $76,000 or 6.9% due primarily to
increases in advertising,  legal and professional  fees,  office  supplies,  and
educational expenses of staff.

Income Taxes

The  provision for income taxes  decreased by $131,000,  or 15.7 %, for the year
ended December 31, 1999, as compared to 1998. The effective tax rates were 40.3%
and 39.9% for the years ended December 31, 1999 and 1998, respectively.


<PAGE>
<TABLE>
<CAPTION>

                  AVERAGE BALANCE, YIELD, RATE AND VOLUME DATA

The following  table  presents  certain  information  relating to River Valley's
average balance sheet and reflects the average yield on interest-earning  assets
and the average cost of interest-bearing  liabilities for the periods indicated.
Such yields and costs are derived by  dividing  annual  income or expense by the
average  monthly  balance  of   interest-earning   assets  or   interest-bearing
liabilities, respectively, for the years presented. Average balances are derived
from month-end balances, which include nonaccruing loans in the loan portfolio.

                                                                                                 Year ended December 31,
                                                          2000                               1999
                                          Average     Interest               Average     Interest                         Average
                                      outstanding      earned/   Yield/  outstanding      earned/       Yield/        outstanding
                                          balance         paid     rate      balance         paid         rate            balance
                                                                                                              (Dollars in thousands)
<S>                                     <C>           <C>         <C>        <C>          <C>             <C>            <C>
Interest-earning assets:
  Interest-earning deposits and other    $  4,948      $   318     6.43%     $ 7,821      $   417         5.33%          $  4,337
  Investment securities (1)                 3,580          243     6.79        5,347          276         5.16              2,871
  Mortgage-backed and related securities (1)2,976          192     6.45        5,051          301         5.96              7,542
  Loans receivable, net (2)               133,255       10,365     7.78      111,794        8,740         7.82            114,440
                                         --------      -------              --------                                     --------
Total interest-earning assets            $144,759       11,118     7.68     $130,013        9,734         7.49           $129,190
                                         ========      -------     ----     ========      -------         ----           ========
Interest-bearing liabilities:
  Deposits                               $125,197        5,137     4.10     $117,258        4,474         3.82           $113,770
  FHLB advances and other borrowings        8,813          500     5.67        2,228          143         6.42              2,549
                                         --------                           --------                                     --------
Total interest-bearing liabilities       $134,010        5,637     4.21     $119,486        4,617         3.86           $116,319
                                         ========      -------     ----     ========      -------         ----           ========

Net interest income                                    $ 5,481                            $ 5,117
                                                       =======                            =======

Interest rate spread (3)                                           3.47%                                  3.63%
                                                                   =====                                  =====
Net yield on weighted average interest-earning
  assets (4)                                                       3.79%                                  3.94%
                                                                   =====                                  =====
Average interest-earning assets to average
  interest-bearing liabilities                                   108.02%                                108.81%
                                                                 =======                                =======



                                             1998
                                         Interest
                                          earned/       Yield/
                                             paid         rate

Interest-earning assets:
  Interest-earning deposits and other    $    233         5.37%
  Investment securities (1)                   150         5.22
  Mortgage-backed and related securities      462         6.13
  Loans receivable, net (2)                 9,263         8.09
                                         --------         ----

Total interest-earning assets              10,108         7.82
                                         --------         ----
Interest-bearing liabilities:
  Deposits                                  4,682         4.12
  FHLB advances and other borrowings          160         6.28
                                         --------         ----
Total interest-bearing liabilities          4,842         4.16
                                         --------         ----

Net interest income                      $  5,266
                                         ========

Interest rate spread (3)                                  3.66%
                                                          =====

Net yield on weighted average interest-earning
  assets (4)                                              4.08%
                                                          =====

Average interest-earning assets to average
  interest-bearing liabilities                          111.07%
                                                        =======
</TABLE>

-------------------------

(1)  Includes securities  available for sale at amortized cost prior to SFAS No.
     115 adjustments.
(2)  Total loans less loans in process plus loans held for sale.
(3)  Interest rate spread is calculated by subtracting weighted average interest
     rate  cost  from  weighted  average  interest  rate  yield  for the  period
     indicated.
(4)  The net yield on weighted average  interest-earning assets is calculated by
     dividing net interest income by weighted  average  interest-earning  assets
     for the period indicated.


<PAGE>

                              River Valley Bancorp

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Rate/Volume Table

The following  table describes the extent to which changes in interest rates and
changes in volume of interest-related assets and liabilities have affected River
Valley's  interest  income  and  expense  during the years  indicated.  For each
category   of   interest-earning   assets  and   interest-bearing   liabilities,
information is provided on changes attributable to (i) changes in volume (change
in volume  multiplied by prior year rate),  (ii) changes in rate (change in rate
multiplied  by prior year  volume),  and (iii) total changes in rate and volume.
The  combined  effects  of  changes in both  volume  and rate,  which  cannot be
separately identified,  have been allocated proportionately to the change due to
volume and the change due to rate:
<TABLE>
<CAPTION>

                                                                     Year ended December 31,
                                                         2000 vs. 1999                        1999 vs. 1998
                                                          Increase                               Increase
                                                         (decrease)                             (decrease)
                                                           due to                                  due to
                                                Volume        Rate      Total               Volume      Rate     Total
                                                                         (In thousands)

Interest-earning assets:
<S>                                             <C>           <C>      <C>                    <C>      <C>        <C>
  Interest-earning deposits and other           $ (173)       $  74    $  (99)                $186     $  (2)     $184
  Investment securities                           (132)          23      (109)                 128        (2)      126
  Mortgage-backed and related securities          (106)          73       (33)                (149)      (12)     (161)
  Loans receivable, net                          1,670          (45)    1,625                 (211)     (312)     (523)
                                                 -----        ------    -----                 -----     -----     -----
Total                                            1,259          125     1,384                  (46)     (328)     (374)

Interest-bearing liabilities:
  Deposits                                         314          349       663                  151      (359)     (208)
  FHLB advances and other borrowing                375          (18)      357                  (21)        4       (17)
                                                 -----        ------    -----                 -----     -----     -----
Total                                              689          331     1,020                  130      (355)     (225)

                                                 -----        ------    -----                 -----     -----     -----

Net change in interest income                    $ 570        $(206)    $ 364                $(176)     $ 27     $(149)
                                                 =====        ======    =====                ======     =====    ======
</TABLE>

Asset and Liability Management

Like other financial institutions, River Valley Financial is subject to interest
rate risk to the extent that  interest-earning  assets re-price differently than
interest-bearing  liabilities.  As part of its  effort  to  monitor  and  manage
interest  rate risk,  River Valley  Financial is using the Net  Portfolio  Value
("NPV")  methodology  adopted  by the OTS as part  of its  capital  regulations.
Although  River Valley  Financial is not subject to the NPV  regulation  because
such regulation  does not apply to  institutions  with less than $300 million in
assets and  risk-based  capital  in excess of 12%,  the  application  of the NPV
methodology  can  illustrate  River Valley  Financial's  degree of interest rate
risk.

Presented  on the  following  table is an analysis of River  Valley  Financial's
interest  rate risk,  as of December 31, 2000 and December 31, 1999, as measured
by changes  in NPV for an  instantaneous  and  sustained  parallel  shift of 100
through 300 basis points in market interest rates.


<PAGE>

                              River Valley Bancorp

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)



Asset and Liability Management (continued)

As illustrated  below,  River Valley Financial's NPV is currently more sensitive
to rising rates than declining  rates.  Such  difference in  sensitivity  occurs
principally  because,  as rates rise,  the Bank's assets reprice slower than the
deposits that fund them. As a result, in a rising interest rate environment, the
amount of interest River Valley  Financial would receive on loans would increase
as loans are slowly  prepaid and new loans at higher  rates are made.  Moreover,
the interest River Valley  Financial would pay on deposits would  increase,  but
generally  quicker  than the  Bank's  ability to  reprice  its  interest-earning
assets.
<TABLE>
<CAPTION>

                                                  As of December 31, 2000

                                                   (Dollars in thousands)

Change in
Interest Rates                        Estimated                        Amount
(basis points)                              NPV                     of Change                 Percent
<S>                                     <C>                           <C>                          <C>
+300                                    $17,112                       $(1,285)                     (7)%
+200                                     17,898                          (499)                     (3)
+100                                     18,309                           (88)                      0
  -                                      18,397                             -                       -
-100                                     18,296                          (101)                     (1)
-200                                     19,025                           628                       3
-300                                     20,294                         1,897                      10


                                                  As of December 31, 1999

                                                   (Dollars in thousands)

Change in
Interest Rates                        Estimated                        Amount
(basis points)                              NPV                     of Change                 Percent

+300                                    $19,427                    $      801                       4%
+200                                     19,463                           836                       4
+100                                     19,198                           571                       3
  -                                      18,627                            -                        -
-100                                     17,759                          (867)                     (5)
-200                                     17,402                        (1,225)                     (7)
-300                                     17,349                        (1,278)                     (7)
</TABLE>

<PAGE>



Asset and Liability Management (continued)

As with any method of measuring  interest rate risk,  certain  shortcomings  are
inherent  in  the  NPV  approach.  For  example,  although  certain  assets  and
liabilities may have similar maturities or periods of repricing,  they may react
in different  degrees to changes in market  interest  rates.  Also, the interest
rates on certain  types of assets and  liabilities  may  fluctuate in advance of
changes in market  interest  rates,  while interest rates on other types may lag
behind  changes in market rates.  Further,  in the event of a change in interest
rates, expected rates of prepayment on loans and mortgage-backed  securities and
early  withdrawal  levels from  certificates  of deposit  would  likely  deviate
significantly from those assumed in making the risk calculations.

Liquidity and Capital Resources

The   Corporation's   principal   sources  of  funds  are  deposits,   loan  and
mortgage-backed securities repayments,  maturities of securities, borrowings and
other funds provided by operations. While scheduled loan repayments and maturing
investments   are   relatively   predictable,   deposit   flows   and  loan  and
mortgage-backed  securities  prepayments  are more influenced by interest rates,
general  economic   conditions  and  competition.   The  Corporation   maintains
investments in liquid assets based upon management's  assessment of (1) the need
for funds,  (2) expected  deposit flows,  (3) the yield  available on short-term
liquid assets and (4) the objectives of the asset/liability management program.

OTS regulations  presently require River Valley Financial to maintain an average
daily  balance  of cash,  investments  in  United  States  Treasury  and  agency
securities  and other  investments  in an amount equal to 4% of the sum of River
Valley Financial's  average daily balance of net withdrawable  deposit accounts.
The liquidity requirement,  which may be changed from time to time by the OTS to
reflect  changing  economic  conditions,  is  intended  to  provide  a source of
relatively  liquid funds upon which River Valley Financial may rely if necessary
to fund deposit  withdrawals or other short-term  funding needs. At December 31,
2000,  River Valley  Financial's  regulatory  liquidity ratio was 11.4%. At such
date,  River Valley  Financial had  commitments to originate loans totaling $2.4
million  and, in addition,  had  undisbursed  loans in process,  unused lines of
credit and standby  letters of credit  totaling $11.8  million.  At December 31,
2000, River Valley Financial had no commitments to sell loans and no outstanding
commitments  to  purchase  loans.   The   Corporation   considers  River  Valley
Financial's  liquidity  and capital  resources  sufficient  to meet  outstanding
short- and  long-term  needs.  At  December  31,  2000,  the  Corporation  had a
commitment of $2.9 million to renovate and expand its office at 430 Clifty Drive
to be its  main  office.  Subsequent  to the  completion  of  the  project,  the
Corporation intends to sell its office at 303 Clifty Drive.


<PAGE>
Liquidity and Capital Resources (continued)

The Corporation's liquidity, primarily represented by cash and cash equivalents,
is a result of the funds  provided  by or used in the  Corporation's  operating,
investing and financing  activities.  These  activities are summarized below for
the years ended December 31, 2000, 1999, and 1998:
<TABLE>
<CAPTION>
                                                                      Year ended December 31,
                                                                   2000             1999              1998
                                                                                (In thousands)
<S>                                                              <C>              <C>              <C>
Cash flows from operating activities                             $2,028           $5,346           $(1,955)

Cash flows from investing activities:
  Purchase of securities                                         (7,949)         (21,537)                -
  Proceeds from maturities of securities                          8,297           19,399             5,970
  Proceeds from sales of securities                               2,002                -                 -
  Net loan (originations) repayments                            (26,165)          (6,673)            2,145
  Other                                                          (1,087)            (121)              773

Cash flows from financing activities:
  Net increase (decrease) in deposits                            15,974           (3,900)            3,196
  Net increase (decrease) in borrowings                           6,950            6,230            (1,730)
  Purchase of stock                                              (1,367)          (2,724)             (270)
  Other                                                            (353)            (275)             (690)
                                                                --------         --------          --------
Net increase (decrease) in cash and cash
  equivalents                                                   $(1,670)         $(4,255)          $ 7,439
                                                                ========         ========          =======
</TABLE>

River Valley  Financial is required by  applicable  law and  regulation  to meet
certain minimum capital  standards.  Such capital  standards  include a tangible
capital  requirement,  a core  capital  requirement,  or leverage  ratio,  and a
risk-based capital requirement.

The tangible  capital  requirement  requires  savings  associations  to maintain
"tangible  capital" of not less than 1.5% of the  association's  adjusted  total
assets.  Tangible  capital is defined in OTS  regulations  as core capital minus
intangible assets.  "Core capital" is comprised of common  shareholders'  equity
(including  retained  earnings),   noncumulative  preferred  stock  and  related
surplus,    minority   interests   in   consolidated    subsidiaries,    certain
nonwithdrawable  accounts  and  pledged  deposits  of mutual  associations.  OTS
regulations  require  savings  associations  to maintain core capital  generally
equal to 4% of the association's total assets except those associations with the
highest examination rating and acceptable levels of risk.

<PAGE>

Liquidity and Capital Resources (continued)

OTS regulations require that savings associations  maintain "risk-based capital"
in an amount not less than 8% of "risk-weighted  assets."  Risk-based capital is
defined as core capital plus certain  additional items of capital,  which in the
case of River Valley  Financial  includes a general loan loss  allowance of $1.7
million at December 31, 2000.

River Valley Financial  exceeded all of its regulatory  capital  requirements at
December 31, 2000.  The  following  table  summarizes  River Valley  Financial's
regulatory capital requirements and regulatory capital at December 31, 2000:
<TABLE>
<CAPTION>
                                             OTS Requirement                     Actual Amount

                                 Percent of                        Percent of                               Amount
                                     Assets           Amount        Assets(1)           Amount           of Excess
                                                            (Dollars in thousands)

<S>                                   <C>             <C>              <C>             <C>                 <C>
Tangible capital                      1.50%           $2,422           10.45%          $16,867             $14,445
Core capital (2)                      4.00%            6,458           10.45%           16,867              10,409
Risk-based capital                    8.00%            9,293           15.52%           18,031               8,738

</TABLE>

(1)      Tangible  and core capital  levels are shown as a  percentage  of total
         assets;  risk-based  capital  levels  are  shown  as  a  percentage  of
         risk-weighted assets.
(2)      The  OTS  has  proposed  and  is  expected  to  adopt  a  core  capital
         requirement for savings associations  comparable to that adopted by the
         OCC for national  banks.  The  regulation  requires  core capital of at
         least  3% of  total  adjusted  assets  for  savings  associations  that
         received the highest  supervisory rating for safety and soundness,  and
         4% to 5% for all other savings associations.  River Valley Financial is
         in compliance with this requirement.


Effect of Recent Accounting Pronouncements

In June 1998,  the  Financial  Accounting  Standards  Board (the "FASB")  issued
Statement of Financial  Accounting  Standards ("SFAS") No. 133,  "Accounting for
Derivative  Instruments  and Hedging  Activities,"  which  requires  entities to
recognize  all  derivatives  in their  financial  statements as either assets or
liabilities  measured at fair value.  SFAS No. 133 also specifies new methods of
accounting for hedging transactions,  prescribes the items and transactions that
may be hedged,  and specifies  detailed  criteria to be met to qualify for hedge
accounting.

The definition of a derivative  financial instrument is complex, but in general,
it is an instrument  with one or more  underlyings,  such as an interest rate or
foreign exchange rate, that is applied to a notional  amount,  such as an amount
of currency,  to determine the settlement  amount(s).  It generally  requires no
significant initial investment and can be settled net or by delivery of an asset
that is  readily  convertible  to cash.  SFAS No.  133  applies  to  derivatives
embedded in other contracts, unless the underlying of the embedded derivative is
clearly and closely related to the host contract.

SFAS No.  133,  as amended  by SFAS No.  137,  was  effective  for fiscal  years
beginning after June 15, 2000. On adoption,  entities were permitted to transfer
held-to-maturity  debt securities to the  available-for-sale or trading category
without  calling into  question  their intent to hold other debt  securities  to
maturity in the future.  Adoption of SFAS No. 133 did not have a material impact
on the Corporation's consolidated financial statements.

Impact of Inflation and Changing Prices

The  consolidated  financial  statements and notes thereto  included herein have
been prepared in accordance with generally accepted accounting principles, which
require River Valley to measure financial  position and results of operations in
terms of historical dollars with the exception of investment and mortgage-backed
securities  available-for-sale,  which are carried at fair value. Changes in the
relative  value of  money  due to  inflation  or  recession  are  generally  not
considered.

In  management's  opinion,  changes  in  interest  rates  affect  the  financial
condition of a financial institution to a far greater degree than changes in the
rate of inflation. While interest rates are greatly influenced by changes in the
rate of inflation,  they do not change at the same rate or in the same magnitude
as the rate of inflation.  Rather,  interest rate volatility is based on changes
in the  expected  rate of  inflation,  as well as changes in monetary and fiscal
policies.

Change in Accountants

On May 18, 2000, the Holding Company engaged the accounting firm of Olive LLP to
examine the  consolidated  financial  statements of the Holding  Company for the
fiscal year ending  December  31,  2000.  This  action was taken  following  the
recommendation  of  the  Holding  Company's  Audit  Committee  to the  Board  of
Directors.  Grant  Thornton  LLP,  which  had  acted as the  independent  public
accountant  for the Holding  Company  since 1996 and  audited  its  consolidated
financial  statements for 1998 and 1999,  was notified of the Holding  Company's
decision.

The audit  reports  issued by Grant  Thornton  LLP with  respect to the  Holding
Company's consolidated financial statements for 1998 and 1999 did not contain an
adverse  opinion  or  disclaimer  of  opinion,  and  were  not  qualified  as to
uncertainty, audit scope or accounting principles. During 1998 and 1999 (and any
subsequent interim period),  there had been no disagreements between the Holding
Company  and Grant  Thornton  LLP on any  matter  of  accounting  principles  or
practices,  financial statement disclosure or auditing scope or procedure, which
disagreements,  if not resolved to the satisfaction of Grant Thornton LLP, would
have caused it to make a reference to the subject matter of the  disagreement in
connection  with its audit report.  Moreover,  none of the events listed in Item
304(a)(1)(iv)(B)  of  Regulation  S-B  occurred  during  1998  or  1999  or  any
subsequent interim period.

Prior to its engagement, Olive LLP had not been consulted by the Holding Company
as to the  application  of  accounting  principles  to a specific  completed  or
contemplated  transaction or the type of audit opinion that might be rendered on
the Holding Company's financial statements.


<PAGE>


                          Independent Auditor's Report

To the Stockholders and
Board of Directors
River Valley Bancorp
Madison, Indiana

We have  audited the  accompanying  consolidated  balance  sheet of River Valley
Bancorp and  subsidiary  as of December 31, 2000,  and the related  consolidated
statements of income, comprehensive income, stockholders' equity, and cash flows
for the  year  then  ended.  These  consolidated  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these  consolidated  financial  statements  based on our  audit.  The
financial  statements as of December 31, 1999,  and for the years ended December
31, 1999 and 1998,  were audited by other  auditors  whose report dated February
16, 2000, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion,  the consolidated  financial  statements described above present
fairly, in all material respects,  the consolidated  financial position of River
Valley  Bancorp and subsidiary as of December 31, 2000, and the results of their
operations  and their  cash  flows for the year then  ended in  conformity  with
generally accepted accounting principles.

As discussed in the notes to the consolidated financial statements,  the Company
changed  its  method  of  accounting  for  derivative  instruments  and  hedging
activities in 2000.


Olive LLP

/s/ Olive LLP

Indianapolis, Indiana
February 23, 2001


<PAGE>
<TABLE>
<CAPTION>
                       River Valley Bancorp and Subsidiary
                           Consolidated Balance Sheet

December 31                                                                    2000                1999
----------------------------------------------------------------------------------------------------------------
                                                                         (In Thousands, Except Share Amounts)
Assets
<S>                                                                           <C>                  <C>
   Cash and due from banks                                                    $  3,361             $  3,648
   Federal funds sold                                                                                 1,550
   Interest-bearing demand deposits                                              3,021                2,854
                                                                       -----------------------------------------
     Cash and cash equivalents                                                   6,382                8,052
   Investment securities
     Available for sale                                                          7,247                6,301
     Held to maturity (fair value of $3,142)                                                          3,138
                                                                       -----------------------------------------
         Total investment securities                                             7,247                9,439
   Loans, net of allowance for loan losses of $1,702 and $1,522                140,970              115,131
   Premises and equipment                                                        2,817                1,928
   Federal Home Loan Bank stock                                                    943                  943
   Interest receivable                                                           1,468                1,043
   Other assets                                                                  2,303                2,159
                                                                       -----------------------------------------

         Total assets                                                         $162,130             $138,695
                                                                       =========================================

Liabilities
   Deposits
     Noninterest-bearing                                                    $    9,170           $    7,903
     Interest-bearing                                                          121,055              106,348
                                                                       -----------------------------------------
         Total deposits                                                        130,225              114,251
   Borrowings                                                                   13,450                6,500
   Interest payable                                                                598                  330
   Other liabilities                                                               673                  748
                                                                       -----------------------------------------
         Total liabilities                                                     144,946              121,829
                                                                       -----------------------------------------

Commitments and Contingencies

Stockholders' Equity
   Preferred stock, no par value
     Authorized and unissued--2,000,000 shares
   Common stock, no par value
     Authorized--5,000,000 shares
     Issued--1,190,250 shares
   Additional paid-in capital                                                   11,349               11,314
   Retained earnings                                                            10,882                9,551
   Shares acquired by stock benefit plans                                         (734)                (967)
   Less 321,376 and 219,753 treasury shares, at cost                            (4,343)              (2,976)
   Accumulated other comprehensive income (loss)                                    30                  (56)
                                                                       -----------------------------------------
         Total stockholders' equity                                             17,184               16,866
                                                                       -----------------------------------------

         Total liabilities and stockholders' equity                           $162,130             $138,695
                                                                       =========================================
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>

                       River Valley Bancorp and Subsidiary
                        Consolidated Statement of Income

Year Ended December 31                                                       2000              1999             1998
----------------------------------------------------------------------------------------------------------------------------
                                                                            (In Thousands, Except Per Share Amounts)

Interest Income
<S>                                                                           <C>              <C>               <C>
   Loans receivable                                                           $10,365          $8,740            $9,263
   Investment securities                                                          435             577               612
   Interest-earning deposits and other                                            318             417               233
                                                                      ------------------------------------------------------
         Total interest income                                                 11,118           9,734            10,108
                                                                      ------------------------------------------------------

Interest Expense
   Deposits                                                                     5,137           4,474             4,682
   Borrowings                                                                     500             143               160
                                                                      ------------------------------------------------------
         Total interest expense                                                 5,637           4,617             4,842
                                                                      ------------------------------------------------------

Net Interest Income                                                             5,481           5,117             5,266
   Provision for loan losses                                                      227             140               275
                                                                      ------------------------------------------------------
Net Interest Income After Provision for Loan Losses                             5,254           4,977             4,991
                                                                      ------------------------------------------------------

Other Income
   Service fees and charges                                                       931             723               739
   Net realized losses on sales of available-for-sale securities                   (2)
   Net gains on loan sales                                                         44              74               339
   Other income                                                                    80              47               110
                                                                      ------------------------------------------------------
         Total other income                                                     1,053             844             1,188
                                                                      ------------------------------------------------------

Other Expenses
   Salaries and employee benefits                                               2,025           2,162             2,309
   Net occupancy and equipment expenses                                           568             564               484
   Data processing fees                                                           151             126               127
   Advertising                                                                    190             182               178
   Legal and professional fees                                                    144             155               106
   Other expenses                                                                 686             891               889
                                                                      ------------------------------------------------------
         Total other expenses                                                   3,764           4,080             4,093
                                                                      ------------------------------------------------------

Income Before Income Tax                                                        2,543           1,741             2,086
   Income tax expense                                                             933             702               833
                                                                      ------------------------------------------------------

Net Income                                                                   $  1,610          $1,039            $1,253
                                                                      ======================================================

Basic Earnings per Share                                                        $1.88           $1.03             $1.13
                                                                      ======================================================

Diluted Earnings per Share                                                      $1.87           $1.03             $1.12
                                                                      ======================================================
</TABLE>
See notes to consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>

                       River Valley Bancorp and Subsidiary
                 Consolidated Statement of Comprehensive Income

Year Ended December 31                                                         2000             1999             1998
----------------------------------------------------------------------------------------------------------------------------
                                                                                           (In Thousands)

<S>                                                                             <C>              <C>              <C>
Net Income                                                                      $1,610           $1,039           $1,253
Other comprehensive income, net of tax
   Unrealized gains (losses) on securities available for sale
     Unrealized holding gains (losses) arising during the period, net
       of tax expense (benefit) of $55, $(22), and $10                              85              (43)              19
     Less: Reclassification adjustment for losses included in net
       income, net of tax benefit of $1                                             (1)
                                                                         ---------------------------------------------------
                                                                                    86              (43)              19
                                                                         ---------------------------------------------------

Comprehensive Income                                                            $1,696           $  996           $1,272
                                                                         ===================================================
</TABLE>

See notes to consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>

                       River Valley Bancorp and Subsidiary
                 Consolidated Statement of Stockholders' Equity

                                                                            Shares    Accumulated
                                                                           Acquired      Other
                                    Common Stock      Additional           by Stock  Comprehensive      Treasury Stock
                                ---------------------  Paid-in   Retained   Benefit     Income     ----------------------
                                  Shares    Amount     Capital   Earnings    Plans      (Loss)        Shares    Amount      Total
---------------------------------------------------------------------------------------------------------------------------------
                                                            (In Thousands, Except for Share Amounts)
<S>                             <C>                    <C>       <C>        <C>         <C>            <C>       <C>       <C>
Balances, January 1, 1998       1,190,250              $11,229   $  7,797   $(1,005)    $(32)                              $17,989

   Net income                                                       1,253                                                    1,253
   Unrealized gains on                                                                    19                                 19
     securities

   Cash dividends ($.22 per                                          (261)                                                   (261)
     share)
   Purchase of shares for stock
     benefit plans                                                            ( 428)                                         (428)
   Amortization of expense

     related to stock benefit                               59                  234                                           293
     plans

   Purchase of treasury stock                                                                         (18,000)   $   (270)    (270)
   Issuance of shares for stock
     benefit plans                                                                                      1,190          18       18
                                ---------------------------------------------------------------------------------------------------

Balances, December 31, 1998     1,190,250               11,288      8,789    (1,199)     (13)         (16,810)       (252)  18,613


   Net income                                                       1,039                                                    1,039
   Unrealized losses on                                                                  (43)                                  (43)
     securities

   Cash dividends ($.265 per                                         (277)                                                    (277)
     share)
   Amortization of expense

     related to stock benefit                               26                  232                                            258
     plans

   Purchase of treasury stock                                                                        (202,943)     (2,724)  (2,724)
                                ---------------------------------------------------------------------------------------------------

Balances, December 31, 1999     1,190,250               11,314      9,551      (967)     (56)        (219,753)     (2,976)  16,866


   Net income                                                       1,610                                                    1,610
   Unrealized gains on
     securities, net of
     reclassification

     adjustment                                                                           86                                    86
   Cash dividends ($.345 per                                         (279)                                                    (279)
     share)
   Contribution to stock                                                         (8)                                            (8)
     benefit plans
   Amortization of expense
     related to stock benefit

     plans                                                  35                  241                                            276
   Purchase of treasury stock                                                                        (101,623)     (1,367)  (1,367)
                                ---------------------------------------------------------------------------------------------------

Balances, December 31, 2000     1,190,250              $11,349    $10,882   $  (734)     $30         (321,376)    $(4,343) $17,184
                                ===================================================================================================
</TABLE>

See notes to consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>

                       River Valley Bancorp and Subsidiary
                      Consolidated Statement of Cash Flows

Year Ended December 31                                                            2000            1999           1998
----------------------------------------------------------------------------------------------------------------------------
                                                                                            (In Thousands)
Operating Activities
<S>                                                                              <C>              <C>            <C>
   Net income                                                                    $1,610           $1,039         $  1,253
   Adjustments to reconcile net income to
       net cash provided (used) by operating activities
     Provision for loan losses                                                      227              140              275
     Depreciation and amortization                                                  240              250              223
     Amortization of goodwill                                                         6                6               27
     Deferred income tax                                                            (77)              38               14
     Investment securities amortization (accretion), net                            (26)             (95)              39
     Investment securities losses                                                     2
     Loans originated for sale in the secondary market                           (2,614)         (10,552)         (20,042)
     Proceeds from sale of loans in the secondary market                          2,632           14,226           17,194
     (Gain) loss on sale of loans                                                   (18)              27             (169)
     Amortization of deferred loan origination cost                                  99               93               99
     Amortization of expense related to stock benefit plans                         276              258              293
     Gain on sale of premises and equipment                                         (42)             (11)             (57)
     Net change in
       Interest receivable                                                         (425)              13               42
       Interest payable                                                             268             (138)               5
     Other adjustments                                                             (130)              52           (1,151)
                                                                            ------------------------------------------------
         Net cash provided (used) by operating activities                         2,028            5,346           (1,955)
                                                                            ------------------------------------------------

Investing Activities
   Net change in interest-bearing deposits                                                                            897
   Purchases of securities available for sale                                    (7,949)         (21,537)
   Proceeds from maturities of securities available for sale                      7,093           18,347            1,286
   Proceeds from sales of securities available for sale                           2,002
   Proceeds from maturities of securities held to maturity                        1,204            1,052            4,684
   Net change in loans                                                          (26,165)          (6,673)           2,145
   Purchases of premises and equipment                                           (1,143)            (245)            (191)
   Proceeds from sale of premises and equipment                                      56               49               67
   Proceeds from sale of real estate acquired through foreclosure                                     75
                                                                            ------------------------------------------------
         Net cash provided (used) by investing activities                       (24,902)          (8,932)           8,888
                                                                            ------------------------------------------------

Financing Activities
   Net change in
     Noninterest-bearing, interest-bearing
       demand and savings deposits                                               (2,991)           3,614            1,424
     Certificates of deposit                                                     18,965           (7,514)           1,772
   Proceeds from borrowings                                                      23,450            9,131            6,270
   Repayment of borrowings                                                      (16,500)          (2,901)          (8,000)
   Cash dividends                                                                  (350)            (277)            (261)
   Purchase of stock                                                             (1,367)          (2,724)            (270)
   Proceeds from exercise of stock options                                                                             18
   Advances by borrowers for taxes and insurance                                      5                2              (19)
   Acquisition of stock for stock benefit plans                                      (8)                             (428)
                                                                            ------------------------------------------------
         Net cash provided (used) by financing activities                        21,204             (669)             506
                                                                            ------------------------------------------------

Net Change in Cash and Cash Equivalents                                          (1,670)          (4,255)           7,439

Cash and Cash Equivalents, Beginning of Year                                      8,052           12,307            4,868
                                                                            ------------------------------------------------

Cash and Cash Equivalents, End of Year                                           $6,382           $8,052          $12,307
                                                                            ================================================

Additional Cash Flows Information

   Interest paid                                                                 $5,369           $4,755           $4,837
   Income tax paid                                                                  876              657            1,159
   Investment securities held to maturity transferred to available for sale       1,934
</TABLE>

See notes to consolidated financial statements.

<PAGE>



                       River Valley Bancorp and Subsidiary
                   Notes to Consolidated Financial Statements
                       (Table Dollar Amounts in Thousands)

Note 1-- Nature of Operations and Summary of Significant Accounting Policies

The accounting and reporting  policies of River Valley Bancorp (Company) and its
wholly owned  subsidiary,  River Valley  Financial  Bank (Bank),  and the Bank's
wholly owned  subsidiary,  Madison First Service  Corporation  (First  Service),
conform to generally  accepted  accounting  principles  and reporting  practices
followed  by the thrift  industry.  The more  significant  of the  policies  are
described below.

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

The  Company  is a  thrift  holding  company  whose  principal  activity  is the
ownership and  management of the Bank.  The Bank operates under a federal thrift
charter and provides full banking  services,  in a single  significant  business
segment. As a  federally-chartered  thrift, the Bank is subject to regulation by
the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation.

The Bank generates commercial, mortgage and consumer loans and receives deposits
from customers located primarily in southeastern  Indiana.  The Bank's loans are
generally  secured by specific  items of  collateral  including  real  property,
consumer assets and business assets.

Consolidation--The consolidated financial statements include the accounts of the
Company,   the  Bank  and  First  Service  after  elimination  of  all  material
intercompany transactions.

Investment  Securities--Debt  securities are classified as held to maturity when
the  Company  has the  positive  intent and  ability to hold the  securities  to
maturity.  Securities  held to maturity  are  carried at  amortized  cost.  Debt
securities not classified as held to maturity and marketable  equity  securities
are classified as available for sale.  Securities available for sale are carried
at  fair  value  with  unrealized  gains  and  losses  reported   separately  in
accumulated other comprehensive income, net of tax.

Amortization  of premiums and  accretion  of discounts  are recorded as interest
income from  securities.  Realized gains and losses are recorded as net security
gains  (losses).  Gains and losses on sales of securities  are determined on the
specific-identification method.

Loans held for sale are carried at the lower of aggregate cost or market. Market
is determined using the aggregate  method.  Net unrealized  losses,  if any, are
recognized  through a  valuation  allowance  by charges  to income  based on the
difference between estimated sales proceeds and aggregate cost.


<PAGE>

River Valley Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Table Dollar Amounts in Thousands)

Loans are carried at the principal amount outstanding.  A loan is impaired when,
based on current  information or events, it is probable that the Company will be
unable to collect all amounts due  (principal  and  interest)  according  to the
contractual terms of the loan agreement.  Payments with insignificant delays not
exceeding 90 days outstanding are not considered  impaired.  Certain  nonaccrual
and substantially delinquent loans may be considered to be impaired. The Company
considers its investment in one-to-four  family  residential  loans and consumer
loans to be homogeneous and therefore excluded from separate  identification for
evaluation of impairment.  Interest income is accrued on the principal  balances
of  loans.  The  accrual  of  interest  on  impaired  and  nonaccural  loans  is
discontinued when, in management's  opinion,  the borrower may be unable to meet
payments as they become due. When interest accrual is  discontinued,  all unpaid
accrued interest is reversed when considered  uncollectible.  Interest income is
subsequently  recognized only to the extent cash payments are received.  Certain
loan fees and direct costs are being  deferred and amortized as an adjustment of
yield on the loans over the contractual  lives of the loans. When a loan is paid
off or sold, any unamortized loan origination fee balance is credited to income.

Allowance  for  loan  losses  is  maintained  to  absorb  loan  losses  based on
management's  continuing  review and  evaluation  of the loan  portfolio and its
judgment  as to  the  impact  of  economic  conditions  on  the  portfolio.  The
evaluation by management includes consideration of past loss experience, changes
in the composition of the portfolio,  the current  condition and amount of loans
outstanding,  and the probability of collecting all amounts due.  Impaired loans
are  measured by the present  value of expected  future cash flows,  or the fair
value of the collateral of the loan, if collateral dependent.

The  determination  of the adequacy of the allowance for loan losses is based on
estimates  that are  particularly  susceptible  to  significant  changes  in the
economic  environment  and market  conditions.  Management  believes  that as of
December  31,  2000,  the  allowance  for  loan  losses  is  adequate  based  on
information  currently available.  A worsening or protracted economic decline in
the areas within  which the Bank  operates  would  increase  the  likelihood  of
additional  losses due to credit and market  risks and could create the need for
additional loss reserves.

Premises  and  equipment  are carried at cost net of  accumulated  depreciation.
Depreciation is computed using the straight-line method based principally on the
estimated  useful lives of the assets.  Maintenance  and repairs are expensed as
incurred  while major  additions and  improvements  are  capitalized.  Gains and
losses on dispositions are included in current operations.

Federal Home Loan Bank stock is a required  investment for institutions that are
members of the Federal Home Loan Bank system.  The  required  investment  in the
common stock is based on a predetermined formula.

Foreclosed  assets are carried at the lower of cost or fair value less estimated
selling costs. When foreclosed assets are acquired,  any required  adjustment is
charged to the allowance for loan losses. All subsequent activity is included in
current operations.

Goodwill,  resulting from the acquisition of Citizens  National Bank of Madison,
is being amortized on the straight-line basis over a period of ten years. During
1998,  goodwill  was  reduced  by  approximately   $168,000  for  the  favorable
resolution  of certain  preacquisition  contingencies,  and for the  purchase of
minority interest shares at a price below the assigned value at acquisition.  It
is periodically evaluated as to the recoverability of its carrying value.


<PAGE>
River Valley Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Table Dollar Amounts in Thousands)

Mortgage  servicing rights on originated loans are capitalized by allocating the
total cost of the mortgage loans between the mortgage  servicing  rights and the
loans based on their  relative  fair values.  Capitalized  servicing  rights are
amortized in proportion to and over the period of estimated servicing revenues.

Treasury stock is stated at cost. Cost is determined by the first-in,  first-out
method.

Stock  options  are granted for a fixed  number of shares to  employees  with an
exercise  price equal to the fair value of the shares at the date of grant.  The
Company  accounts for and will  continue to account for stock  option  grants in
accordance  with APB Opinion No. 25,  Accounting  for Stock Issued to Employees,
and,  accordingly,  recognizes  no  compensation  expense  for the stock  option
grants.

Income tax in the consolidated  statement of income includes deferred income tax
provisions or benefits for all significant  temporary differences in recognizing
income and expenses for financial reporting and income tax purposes.

Earnings per share have been  computed  based upon the  weighted-average  common
shares  outstanding  during each year.  Unearned  ESOP shares have been excluded
from the computation of average shares outstanding.

Reclassifications of certain amounts in the 1999 and 1998 consolidated financial
statements have been made to conform to the 2000 presentation.

Note 2 -- Restriction on Cash and Due From Banks

The Bank is required to maintain  reserve  funds in cash and/or on deposit  with
the Federal  Reserve  Bank.  The reserve  required at  December  31,  2000,  was
$862,000.

Note 3 -- Investment Securities
<TABLE>
<CAPTION>
                                                                                       2000
                                                       ---------------------------------------------------------------------
                                                                               Gross            Gross
                                                            Amortized        Unrealized       Unrealized           Fair
December 31                                                    Cost            Gains           Losses              Value
----------------------------------------------------------------------------------------------------------------------------

Available for sale
<S>                                                           <C>               <C>                               <C>
   Federal agencies                                           $4,921            $68                               $4,989
   State and municipal                                           336              4                                  340
   Mortgage-backed securities                                  1,941              5              $28               1,918
                                                       ---------------------------------------------------------------------

         Total investment securities                          $7,198            $77              $28              $7,247
                                                       =====================================================================

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
River Valley Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Table Dollar Amounts in Thousands)

                                                                                     1999
                                                       ------------------------------------------------------------------
                                                                           Gross               Gross
                                                          Amortized      Unrealized         Unrealized             Fair
December 31                                                  Cost          Gains              Losses               Value
-------------------------------------------------------------------------------------------------------------------------

Available for sale
<S>                                                          <C>                                <C>               <C>
   State and municipal                                       $   276                            $  3              $  273
   Mortgage-backed securities                                  2,138                              67               2,071
   Corporate obligations                                       1,000                                               1,000
   Other securities                                            2,972                              15               2,957
                                                       ------------------------------------------------------------------
         Total available for sale                              6,386                              85               6,301
                                                       ------------------------------------------------------------------

Held to maturity
   Federal agencies                                            1,000                               5                 995
   Mortgage-backed securities                                  2,138            $15                6               2,147
                                                       ------------------------------------------------------------------
         Total held to maturity                                3,138             15               11               3,142
                                                       ------------------------------------------------------------------

         Total investment securities                          $9,524            $15              $96              $9,443
                                                       ==================================================================
</TABLE>
The amortized  cost and fair value of securities  available for sale at December
31, 2000, by contractual  maturity,  are shown below.  Expected  maturities will
differ from contractual maturities because issuers may have the right to call or
prepay obligations with or without call or prepayment penalties.

                                                     Available for Sale
                                             -----------------------------------
                                                  Amortized            Fair
                                                     Cost              Value
--------------------------------------------------------------------------------

Within one year                                      $1,001           $1,003
One to five years                                     4,196            4,263
Five to ten years                                        60               63
                                             -----------------------------------
                                                      5,257            5,329
Mortgage-backed securities                            1,303            1,279
Other asset-backed securities                           638              639
                                             -----------------------------------

         Totals                                      $7,198           $7,247
                                             ===================================

Securities  with a carrying value of $6,851,000  and $5,209,000  were pledged at
December 31, 2000 and 1999 to secure certain  deposits and for other purposes as
permitted or required by law.

Proceeds  from  sales  of  securities   available  for  sale  during  2000  were
$2,002,000.  Gross gains of $10,000 and gross losses of $12,000 were realized on
those sales.  There were no sales of  securities  available for sale during 1999
and 1998.

On  April 1,  2000,  the  Company  adopted  Statement  of  Financial  Accounting
Standards  (SFAS) No. 133,  Accounting  of  Derivative  Instruments  and Hedging
Activities.  As permitted by SFAS No. 133, all securities  classified as held to
maturity were  transferred to available for sale. The adoption of this statement
did not have a significant impact on the Company's financial statement.


<PAGE>
River Valley Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Table Dollar Amounts in Thousands)

Note 4 -- Loans and Allowance

December 31                                          2000              1999
-------------------------------------------------------------------------------

Residential real estate
   One-to-four family residential                $  77,304         $  69,588
   Multi-family residential                          3,319             2,918
   Construction                                      6,827             4,163
Nonresidential real estate and land                 30,213            22,837
Commercial                                          16,361             9,780
Consumer and other                                  14,686             9,544
                                                -------------------------------
                                                   148,710           118,830
Unamortized deferred loan costs                        324               245
Undisbursed loans in process                        (6,362)           (2,422)
Allowance for loan losses                           (1,702)           (1,522)
                                                -------------------------------

         Total loans                              $140,970          $115,131
                                                ===============================

                                          2000            1999          1998
-------------------------------------------------------------------------------

Allowance for loan losses
   Balances, January 1                    $1,522           $1,477       $1,276
   Provision for losses                      227              140          275
   Recoveries on loans                        37               28          149
   Loans charged off                         (84)            (123)        (223)
                                        ---------------------------------------

   Balances, December 31                  $1,702           $1,522       $1,477
                                        =======================================

Information on impaired loans is summarized below.

December 31                                                             2000
--------------------------------------------------------------------------------

Impaired loans with an allowance                                       $   250
Impaired loans for which the discounted cash flows
   or collateral value exceeds the carrying
   value of the loan                                                       885
                                                                   -------------

         Total impaired loans                                           $1,135
                                                                   =============

Allowance for impaired loans (included in the
   Company's allowance for loan losses)                                    $57




<PAGE>
River Valley Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Table Dollar Amounts in Thousands)

Year Ended December 31                                                     2000
--------------------------------------------------------------------------------

Average balance of impaired loans                                         $1,128
Interest income recognized on impaired loans                                  89
Cash-basis interest included above                                            85

At December 31, 1999, the Company had approximately $600,000 of impaired loans.

At  December  31,  2000,  1999 and 1998,  the Company  had  nonperforming  loans
totaling $621,000, $857,000, and $1,947,000, respectively.

Note 5 -- Premises and Equipment

December 31                                               2000            1999
--------------------------------------------------------------------------------

Land                                                   $   805          $   792
Buildings                                                1,629            1,637
Leasehold improvements                                     117              117
Equipment                                                2,472            2,201
Construction in progress                                   853
                                                    ----------------------------
         Total cost                                      5,876            4,747
Accumulated depreciation and amortization               (3,059)          (2,819)
                                                    ----------------------------

         Net                                            $2,817           $1,928
                                                    ============================

At December 31, 2000, the Company had committed  $2,900,000 for office  building
renovation and expansion.


<PAGE>



River Valley Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Table Dollar Amounts in Thousands)

Note 6 -- Deposits
<TABLE>
<CAPTION>

December 31                                                          2000              1999
-----------------------------------------------------------------------------------------------

<S>                                                              <C>               <C>
Demand deposits                                                  $  31,559         $  29,118
Savings deposits                                                    21,208            26,640
Certificates and other time deposits of $100,000 or more            30,606            13,884
Other certificates and time deposits                                46,852            44,609
                                                           ------------------------------------

         Total deposits                                           $130,225          $114,251
                                                           ====================================
</TABLE>

Certificates and other time deposits maturing in years ending December 31

   2001                                                            $61,873
   2002                                                             12,250
   2003                                                              1,623
   2004                                                                553
   2005                                                                664
   Thereafter                                                          495
                                                            ------------------

                                                                   $77,458

                                                            ==================


Note 7 -- Borrowings
<TABLE>
<CAPTION>

December 31                                                          2000            1999
---------------------------------------------------------------------------------------------

<S>                                                                <C>              <C>
Federal Home Loan Bank advances                                    $13,000          $6,000
Line of credit                                                         450             500
                                                             --------------------------------

         Total borrowings                                          $13,450          $6,500
                                                             ================================
</TABLE>

Maturities by year for advances at December 31, 2000 are  $9,000,000 in 2001 and
$4,000,000 in 2002. The weighted-average  interest rate at December 31, 2000 and
1999 was 6.35% and 5.91%.

The Federal  Home Loan Bank  advances  are secured by  first-mortgage  loans and
investment  securities  totaling  $61,701,000 at December 31, 2000. Advances are
subject to restrictions or penalties in the event of prepayment.

The Company has a $1,000,000 line of credit with another  financial  institution
which matures in November 2001 with a variable interest rate of .5% under prime.
The line of credit is  collateralized  by a pledge of 1,000 shares of the Bank's
stock.

<PAGE>

River Valley Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Table Dollar Amounts in Thousands)

Note 8 -- Loan Servicing

Loans  serviced  for others are not  included in the  accompanying  consolidated
balance  sheet.  The unpaid  principal  balances  of loans  serviced  for others
totaled $37,562,000,  $40,212,000 and $34,300,000 at December 31, 2000, 1999 and
1998, respectively.

The aggregate fair value of capitalized  mortgage  servicing  rights at December
31, 2000 and 1999 totaled $290,000 and $286,000.  Comparable market values and a
valuation model that calculates the present value of future cash flows were used
to  estimate   fair  value.   For   purposes  of  measuring   impairment,   risk
characteristics  including product type, investor type, and interest rates, were
used to stratify the originated mortgage servicing rights.

                                               2000        1999         1998
--------------------------------------------------------------------------------

Mortgage Servicing Rights

   Balances, January 1                          $225         $222        $113
   Servicing rights capitalized                   26          102         170
   Amortization of servicing rights              (24)         (99)        (34)
                                          --------------------------------------
                                                 227          225         249
   Valuation allowance                                                    (27)
                                          --------------------------------------

   Balances, December 31                        $227         $225        $222
                                          ======================================


Note 9 -- Income Tax

Year Ended December 31                     2000           1999          1998
--------------------------------------------------------------------------------

Income tax expense (benefit)
   Currently payable

     Federal                                $805            $505          $631
     State                                   205             159           188
   Deferred

     Federal                                 (61)             38            16
     State                                   (16)                           (2)
                                        ----------------------------------------

         Total income tax expense           $933            $702          $833
                                        ========================================

Reconciliation of federal
  statutory to actual tax expense
    Federal statutory income tax
      at 34%                                $865            $592          $709
    Effect of state income taxes             125             105           122
    Other                                    (57)              5             2
                                        ----------------------------------------

         Actual tax expense                 $933            $702          $833
                                        ========================================

Effective tax rate                          36.7%           40.3%         39.9%


<PAGE>
River Valley Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Table Dollar Amounts in Thousands)

A cumulative net deferred tax asset is included in other assets.  The components
of the liability are as follows:

December 31                                              2000           1999
--------------------------------------------------------------------------------

Assets
   Allowance for loan losses                               $564           $469
   Deferred compensation                                    147            106
   Pensions and employee benefits                            60             66
   Securities available for sale                             83            119
   Purchase accounting adjustments                          131            142
   Other                                                      6
                                                    ----------------------------
         Total assets                                       991            902
                                                    ----------------------------

Liabilities
   Depreciation and amortization                           (103)           (93)
   Loan fees                                               (127)           (83)
   Mortgage servicing rights                                (93)           (86)
                                                    ----------------------------
         Total liabilities                                 (323)          (262)
                                                    ----------------------------

                                                           $668           $640
                                                    ============================

Retained earnings include approximately  $2,100,000 for which no deferred income
tax  liability  has been  recognized.  This amount  represents  an allocation of
income to bad debt  deductions  as of December 31, 1987 for tax  purposes  only.
Reduction of amounts so allocated for purposes other than tax bad debt losses or
adjustments  arising from carryback of net operating  losses would create income
for tax  purposes  only,  which  income  would be  subject  to the  then-current
corporate  income tax rate. The unrecorded  deferred income tax liability on the
above amount was approximately $714,000.

Note 10 -- Commitments and Contingent Liabilities

In  the  normal  course  of  business  there  are  outstanding  commitments  and
contingent liabilities, such as commitments to extend credit and standby letters
of credit, which are not included in the accompanying financial statements.  The
Bank's exposure to credit loss in the event of nonperformance by the other party
to the  financial  instruments  for  commitments  to extend  credit and  standby
letters of credit is represented by the  contractual or notional amount of those
instruments.  The Bank uses the same credit policies in making such  commitments
as it does for instruments that are included in the consolidated balance sheet.


<PAGE>



River Valley Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Table Dollar Amounts in Thousands)

Financial  instruments  whose  contract  amount  represents  credit  risk  as of
December 31 were as follows:

                                                          2000           1999
--------------------------------------------------------------------------------

Commitments to extend credit                              $14,070       $9,310
Standby letters of credit                                     196           97

Commitments  to extend  credit are  agreements  to lend to a customer as long as
there is no violation of any condition established in the contract.  Commitments
generally  have fixed  expiration  dates or other  termination  clauses  and may
require  payment of a fee. Since many of the  commitments are expected to expire
without  being  drawn  upon,  the total  commitment  amounts do not  necessarily
represent future cash  requirements.  The Bank evaluates each customer's  credit
worthiness on a case-by-case basis. The amount of collateral obtained, if deemed
necessary by the Bank upon extension of credit, is based on management's  credit
evaluation.   Collateral  held  varies  but  may  include  accounts  receivable,
inventory, property and equipment, and income-producing commercial properties.

Standby  letters of credit  are  conditional  commitments  issued by the Bank to
guarantee the performance of a customer to a third party.

The Company and  subsidiary  are also subject to claims and lawsuits which arise
primarily in the ordinary  course of business.  It is the opinion of  management
that the disposition or ultimate resolution of such claims and lawsuits will not
have a material  adverse effect on the  consolidated  financial  position of the
Company.

Note 11 -- Dividend and Capital Restrictions

Without prior approval,  current  regulations allow the Bank to pay dividends to
the Company not  exceeding  net profits (as  defined)  for the current year plus
those for the previous two years.  The Bank  normally  restricts  dividends to a
lesser amount because of the need to maintain an adequate capital structure.  At
December 31, 2000,  the  stockholder's  equity of the Bank was  $17,161,000,  of
which none was available for the payment of dividends  without prior  regulatory
approval.

Note 12 -- Regulatory Capital

The Bank is subject to various regulatory capital  requirements  administered by
the federal banking agencies and is assigned to a capital category. The assigned
capital  category is largely  determined  by three  ratios  that are  calculated
according to the regulations:  total risk adjusted capital,  Tier 1 capital, and
Tier 1 leverage  ratios.  The ratios are intended to measure capital relative to
assets and  credit  risk  associated  with those  assets and  off-balance  sheet
exposures of the entity.  The capital category assigned to an entity can also be
affected by  qualitative  judgments  made by regulatory  agencies about the risk
inherent in the entity's activities that are not part of the calculated ratios.

There are five capital categories defined in the regulations,  ranging from well
capitalized to critically  undercapitalized.  Classification of a bank in any of
the  undercapitalized  categories can result in actions by regulators that could
have a material  effect on a bank's  operations.  At December 31, 2000 and 1999,
the Bank is categorized as well capitalized and met all subject capital adequacy
requirements.  There are no  conditions  or events since  December 31, 2000 that
management believes have changed the Bank's classification.


<PAGE>
<TABLE>
<CAPTION>
River Valley Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Table Dollar Amounts in Thousands)

                                                                             Required for Adequate        To Be Well
                                                             Actual                Capital 1             Capitalized 1
                                                     -----------------------------------------------------------------------
December 31                                             Amount      Ratio       Amount      Ratio       Amount      Ratio
----------------------------------------------------------------------------------------------------------------------------

As of December 31, 2000
<S>                                                     <C>          <C>        <C>          <C>       <C>           <C>
Total risk-based capital 1 (to risk-weighted
  assets)                                               $18,031      15.5%      $9,293       8.0%      $11,617       10.0%

Tier 1 capital 1 (to risk-weighted assets)               16,867      14.5%       4,647       4.0%        6,970        6.0%

Core capital 1 (to adjusted total assets)                16,867      10.5%       6,458       4.0%        8,072        5.0%

Core capital 1 (to adjusted tangible assets)             16,867      10.5%       3,229       2.0%                     N/A

Tangible capital 1 (to adjusted total assets)            16,867      10.5%       2,422       1.5%                     N/A

As of December 31, 1999

Total risk-based capital 1 (to risk-weighted
  assets)                                               $18,040      19.0%      $7,615       8.0%       $9,518       10.0%

Tier 1 capital 1 (to risk-weighted assets)               16,850      17.7%       3,808       4.0%        5,711        6.0%

Core capital 1 (to adjusted total assets)                16,850      12.1%       5,563       4.0%        6,954        5.0%

Core capital 1 (to adjusted tangible assets)             16,850      12.1%       2,781       2.0%                     N/A

Tangible capital 1 (to adjusted total assets)            16,850      12.1%       2,086       1.5%                     N/A
</TABLE>

1 As defined by regulatory agencies


Note 13 -- Employee Benefits

The Bank provides pension benefits for substantially all of the Bank's employees
and is a participant in a pension fund known as the Pentegra Group. This plan is
a multi-employer  plan; separate actuarial  valuations are not made with respect
to each participating employer.  There was no pension expense or benefit for the
years ended December 31, 2000, 1999 and 1998.

The  Bank has a  retirement  savings  401(k)  plan in  which  substantially  all
employees may participate. The Bank matches employees' contributions at the rate
of  50  percent  for  the  first  6  percent  of  W-2  earnings  contributed  by
participants.  The Bank's expense for the plan was $20,000,  $24,000 and $28,000
for the years ended December 31, 2000, 1999 and 1998.

The Bank has a supplemental  retirement plan which provides  retirement benefits
to all directors. The Bank's obligations under the plan have been funded via the
purchase  of  key  man  life  insurance  policies,  of  which  the  Bank  is the
beneficiary.  Expense recognized under the supplemental  retirement plan totaled
approximately  $24,000,  $32,000 and $22,000  for the years ended  December  31,
2000, 1999 and 1998, respectively.


<PAGE>
River Valley Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Table Dollar Amounts in Thousands)

As part of the  conversion  in 1996,  the Company  established  an ESOP covering
substantially  all employees of the Company and Bank.  The ESOP acquired  95,220
shares of the Company common stock at $10 per share in the conversion with funds
provided by a loan from the Company.  Accordingly,  the $952,000 of common stock
acquired by the ESOP is shown as a reduction of stockholders'  equity.  Unearned
ESOP shares  totaled  48,695 and 60,876 at December  31, 2000 and 1999 and had a
fair value of $779,000 and  $777,000 at December  31, 2000 and 1999.  Shares are
released to  participants  proportionately  as the loan is repaid.  Dividends on
allocated  shares are  recorded as dividends  and charged to retained  earnings.
Dividends on unallocated  shares,  which may be distributed to  participants  or
used to repay  the loan,  are  treated  as  compensation  expense.  Compensation
expense  is  recorded  equal  to  the  fair  market  value  of  the  stock  when
contributions,  which are  determined  annually by the Board of Directors of the
Company  and  Bank,  are made to the ESOP.  ESOP  expense  for the  years  ended
December  31,  2000,  1999 and 1998 was  $156,000,  $147,000  and  $200,000.  At
December 31, 2000, the ESOP had 46,525 allocated shares,  48,695 suspense shares
and no  committed-to-be  released  shares.  At December 31,  1999,  the ESOP had
34,344 allocated shares, 60,876 suspense shares and no committed-to-be  released
shares.

The Company also has a Recognition  and Retention  Plan (RRP) which provides for
the award and issuance of up to 47,610 shares of the Company's  stock to members
of the Board of Directors and  management.  During 2000,  1998 and 1997, the RRP
purchased  32,920  shares of the Company's  common stock in the open market.  At
December 31, 2000,  32,920 shares had been  awarded.  Common stock awarded under
the RRP vests ratably over a five-year  period,  commencing with the date of the
award.  Expense  recognized under the RRP plan totaled  approximately  $105,000,
$113,000  and $113,000  for the years ended  December  31, 2000,  1999 and 1998,
respectively.

Note 14 -- Related Party Transactions

The Bank  has  entered  into  transactions  with  certain  directors,  executive
officers,  significant  stockholders and their affiliates or associates (related
parties).  Such  transactions  were made in the  ordinary  course of business on
substantially  the same  terms  and  conditions,  including  interest  rates and
collateral,  as those  prevailing at the same time for  comparable  transactions
with other  customers,  and did not, in the opinion of management,  involve more
than normal credit risk or present other unfavorable features.

The  aggregate  amount of loans,  as defined,  to such  related  parties were as
follows:

Balances, January 1, 2000                                            $893

Changes in composition of related parties                            (407)
New loans, including renewals                                         197
Payments, etc., including renewals                                    (26)
                                                            -------------------

Balances, December 31, 2000                                          $657
                                                            ===================

Deposits  from  related  parties  held by the Banks at December 31, 2000 totaled
$915,000.


<PAGE>

River Valley Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Table Dollar Amounts in Thousands)

Note 15 -- Stock Option Plan

Under the  Company's  incentive  stock  option plan,  which is accounted  for in
accordance with Accounting Principles Board Opinion (APB) No. 25, Accounting for
Stock  Issued to  Employees,  and related  interpretations,  the Company  grants
selected  executives and other key employees stock option awards which vest at a
rate of 20 percent a year.  During  1997,  the Company  authorized  the grant of
options for up to 119,025  shares of the Company's  common  stock.  The exercise
price of each option,  which has a ten-year  life, was equal to the market price
of the Company's stock on the date of grant;  therefore, no compensation expense
was recognized.

Although the Company has elected to follow APB No. 25, SFAS No. 123 requires pro
forma  disclosures  of net income and  earnings  per share as if the Company had
accounted for its employee stock options under that Statement. The fair value of
each option grant was estimated on the grant date using an option-pricing  model
with the following assumptions:

                                                     2000                1999
-------------------------------------------------------------------------------

Risk-free interest rates                        6.5 and 5.9%               5.5%
Dividend yields                                      2.7%                  2.2%
Volatility factors of expected market
  price of common stock                             11.7%                 10.0%

Weighted-average expected life of the options     10 years              10 years

Under  SFAS No.  123,  compensation  cost is  recognized  in the  amount  of the
estimated  fair value of the options and  amortized to expense over the options'
vesting  period.  The pro forma  effect on net income and  earnings per share of
this statement are as follows:

                                                    2000        1999      1998
--------------------------------------------------------------------------------

Net income                       As reported       $1,610     $1,039     $1,253
                                 Pro forma          1,575        999      1,165

Basic earnings per share         As reported         1.88       1.03       1.13
                                 Pro forma           1.83        .99       1.05

Diluted earnings per share       As reported         1.87       1.03       1.12
                                 Pro forma           1.83        .99       1.04



<PAGE>
River Valley Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Table Dollar Amounts in Thousands)

The following is a summary of the status of the Company's  stock option plan and
changes in that plan as of and for the years ended  December 31, 2000,  1999 and
1998.

<TABLE>
<CAPTION>
Year Ended December 31                             2000                          1999                        1998
------------------------------------------------------------------------------------------------------------------------------
                                                        Weighted-                    Weighted-                   Weighted-
                                                         Average                      Average                     Average
                 Options                  Shares     Exercise Price     Shares    Exercise Price    Shares    Exercise Price
------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>           <C>             <C>            <C>          <C>             <C>
Outstanding, beginning of year            93,959        $14.58          103,959        $14.81       105,149         $14.81
Granted                                   24,000         13.17           10,000         12.63
Exercised                                                                                            (1,190)         14.78
Forfeited/expired                        (18,614)        14.78          (20,000)        14.78
                                      ---------------                --------------              --------------

Outstanding, end of year                  99,345        $14.17           93,959        $14.58       103,959         $14.81
                                      ===============                ==============              ==============

Options exercisable at year end           51,725                         39,787                      19,834
Weighted-average fair value of
   options granted during the year                       $3.18                          $2.79
</TABLE>

As of December 31, 2000, the 99,345  options  outstanding  have exercise  prices
ranging from $10.75 to $14.78 and a weighted-average  remaining contractual life
of 6.6 years.

Note 16 -- Earnings Per Share
<TABLE>
<CAPTION>

                                          2000                             1999                            1998
                            --------------------------------------------------------------------------------------------------
                                        Weighted-                       Weighted-                       Weighted-
                                         Average   Per Share             Average    Per Share            Average   Per Share
Year Ended December 31        Income      Shares     Amount    Income     Shares     Amount    Income    Shares      Amount
------------------------------------------------------------------------------------------------------------------------------
<S>                            <C>         <C>         <C>     <C>       <C>           <C>     <C>      <C>            <C>
Basic Earnings Per Share
   Income available to
     common stockholders       $1,610      858,059     $1.88   $1,039    1,007,087     $1.03   $1,253   1,105,930      $1.13
                                                   ===========                     ============                    ===========
Effect Of Dilutive Stock
   Options                                   1,486                                                         16,056
                            ------------------------         -----------------------          ----------------------
Diluted Earnings Per Share
   Income available to
     common stockholders
     and assumed conversions   $1,610      859,545     $1.87   $1,039    1,007,087     $1.03   $1,253   1,121,986      $1.12
                            ==================================================================================================
</TABLE>

Options  to  purchase  65,345  shares of common  stock  with a  weighted-average
exercise  price of $14.78 per share and 93,959  shares  with a  weighted-average
exercise  price of $14.58 per share were  outstanding  at December  31, 2000 and
1999,  respectively,  but were not  included in the  computation  of diluted EPS
because the options' exercise price was greater than the average market price of
the common shares.


<PAGE>
River Valley Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Table Dollar Amounts in Thousands)

Note 17 -- Fair Values of Financial Instruments

The following  methods and  assumptions  were used to estimate the fair value of
each class of financial instrument:

Cash  and  Cash  Equivalents--The  fair  value  of  cash  and  cash  equivalents
approximates carrying value.

Securities  and  Mortgage-backed  Securities--Fair  values  are  based on quoted
market prices.

Loans--The  fair  value  for  loans is  estimated  using  discounted  cash  flow
analyses,  using interest rates  currently  being offered for loans with similar
terms to borrowers of similar credit quality.

Interest  Receivable/Payable--The  fair  values of  interest  receivable/payable
approximate carrying values.

FHLB  Stock--Fair  value of FHLB  stock is based on the price at which it may be
resold to the FHLB.

Deposits--The fair values of  noninterest-bearing,  interest-bearing  demand and
savings  accounts are equal to the amount payable on demand at the balance sheet
date. The carrying amounts for variable rate, fixed-term certificates of deposit
approximate  their  fair  values at the  balance  sheet  date.  Fair  values for
fixed-rate  certificates  of deposit are estimated  using a discounted cash flow
calculation  that applies interest rates currently being offered on certificates
to a schedule of aggregated expected monthly maturities on such time deposits.

Federal  Home  Loan  Bank  Advances--The  fair  value  of these  borrowings  are
estimated using a discounted cash flow  calculation,  based on current rates for
similar debt.

Line of  Credit--The  approximate  market  value  for  this  variable  borrowing
approximates carrying value.

Advance   Payment  by  Borrowers  for  Taxes  and   Insurance--The   fair  value
approximates carrying value.

Off-Balance  Sheet   Commitments--For   fixed-rate  and   adjustable-rate   loan
commitments,  the fair value estimate  considers the difference  between current
levels of interest rates and committed  rates.  The difference  between the fair
value and notional amount of outstanding  loan  commitments at December 31, 2000
and 1999, was not material.


<PAGE>
River Valley Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Table Dollar Amounts in Thousands)

The estimated fair values of the Company's financial instruments are as follows:

<TABLE>
<CAPTION>
                                                                         2000                            1999
                                                          ------------------------------------------------------------------
                                                               Carrying           Fair            Carrying         Fair
December 31                                                     Amount            Value            Amount          Value
----------------------------------------------------------------------------------------------------------------------------

Assets
<S>                                                              <C>              <C>              <C>             <C>
   Cash and cash equivalents                                     $6,382           $6,382           $8,052          $8,052
   Investment securities available for sale                       7,247            7,247            6,301           6,301
   Investment securities held to maturity                                                           3,138           3,142
   Loans including loans held for sale, net                     140,970          139,660          115,131         112,633
   Interest receivable                                            1,468            1,468            1,043           1,043
   Stock in FHLB                                                    943              943              943             943

Liabilities

   Deposits                                                     130,225          130,168          114,251         114,527
   FHLB advances                                                 13,000           13,034            6,000           6,000
   Line of credit                                                   450              450              500             500
   Interest payable                                                 598              598              330             330
   Advance payments by borrowers for taxes and insurance
                                                                     41               41               36              36
</TABLE>


Note 18 -- Condensed Financial Information (Parent Company Only)

Presented  below is condensed  financial  information as to financial  position,
results of operations and cash flows of the Company:
<TABLE>
<CAPTION>

                             Condensed Balance Sheet

December 31                                                                                    2000             1999
----------------------------------------------------------------------------------------------------------------------------

Assets
<S>                                                                                           <C>                <C>
   Cash and due from banks                                                                    $     202          $    371
   Investment in common stock of subsidiary                                                      17,161            16,861
   Other assets                                                                                     271               134
                                                                                        ------------------------------------

         Total assets                                                                           $17,634           $17,366
                                                                                        ====================================

Liabilities--borrowings                                                                       $     450          $    500

Stockholders' Equity                                                                             17,184            16,866
                                                                                        ------------------------------------

         Total liabilities and stockholders' equity                                             $17,634           $17,366
                                                                                        ====================================
</TABLE>
<PAGE>
River Valley Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Table Dollar Amounts in Thousands)
<TABLE>
<CAPTION>

                          Condensed Statement of Income

Year Ended December 31                                                              2000              1999          1998
----------------------------------------------------------------------------------------------------------------------------

Income
<S>                                                                                 <C>              <C>         <C>
   Dividends from subsidiary                                                        $1,621           $3,158
   Other income                                                                         65               62      $    71
                                                                             -----------------------------------------------
         Total income                                                                1,686            3,220           71
                                                                             -----------------------------------------------

Expenses

   Interest expense                                                                     63              101            3
   Other expenses                                                                      120              105          102
                                                                             -----------------------------------------------
         Total expenses                                                                183              206          105
                                                                             -----------------------------------------------

Income (loss) before income tax and equity in undistributed (distribution in
   excess of) income of subsidiary                                                   1,503            3,014          (34)
Income tax benefit                                                                      47               58           13
                                                                             -----------------------------------------------

Income (loss) before equity in undistributed (distribution in excess of)
   income of subsidiary                                                              1,550            3,072          (21)
Equity in undistributed (distribution in excess of) income of subsidiary
                                                                                        60           (2,033)       1,274
                                                                             -----------------------------------------------

Net Income                                                                          $1,610           $1,039       $1,253
                                                                             ===============================================
</TABLE>
<PAGE>
River Valley Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Table Dollar Amounts in Thousands)

<TABLE>
<CAPTION>
                        Condensed Statement of Cash Flows

Year Ended December 31                                                           2000             1999           1998
----------------------------------------------------------------------------------------------------------------------------

Operating Activities
<S>                                                                               <C>              <C>           <C>
   Net income                                                                     $1,610           $1,039        $1,253
   Adjustments to reconcile net income to net cash provided by operating
     activities                                                                       (4)           1,905        (1,186)
                                                                           -------------------------------------------------
         Net cash provided by operating activities                                 1,606            2,944            67
                                                                           -------------------------------------------------

Financing Activities

   Purchase of stock                                                              (1,367)          (2,724)         (270)
   Proceeds from exercise of stock options                                                                           18
   Acquisition of stock for stock benefit plans                                       (8)
   Proceeds from borrowings                                                          450            3,131           270
   Repayment of borrowings                                                          (500)          (2,901)
   Cash dividends                                                                   (350)            (277)         (261)
                                                                           -------------------------------------------------
         Net cash used by financing activities                                    (1,775)          (2,771)         (243)
                                                                           -------------------------------------------------

Net Change in Cash and Cash Equivalents                                             (169)             173          (176)

Cash and Cash Equivalents at Beginning of Year                                       371              198           374
                                                                           -------------------------------------------------

Cash and Cash Equivalents at End of Year                                         $   202          $   371       $   198
                                                                           =================================================
</TABLE>
<PAGE>
                      GENERAL INFORMATION FOR SHAREHOLDERS

Transfer Agent and Registrar:                 Shareholder and General Inquiries:

Corporate Trust Services                      River Valley Bancorp
Fifth Third Center                            Attn: Matthew P. Forrester
38 Fountain Square Plaza                      303 Clifty Drive, P.O. Box 1590
Mail Drop #10AT66                             Madison, Indiana  47250
Cincinnati, Ohio  45263                       Tel: (812) 273-4949
Tel: (800) 837-2755 or                        Fax: (812) 273-4944
(513) 579-5320

Corporate Counsel:                            Special Counsel:

Lonnie D. Collins, Attorney                   Barnes & Thornburg
426 E. Main Street                            11 S. Meridian Street
Madison, Indiana  47250                       Indianapolis, Indiana  46204
Tel: (812) 265-3616                           Tel: (317) 236-1313
Fax: (812) 273-3143                           Fax: (317) 231-7433

Annual and Other Reports:

Additional  copies of this Annual Report to Shareholders  and copies of the most
recent Form 10-KSB may be obtained without charge by contacting the Corporation.

Offices of River Valley Financial Bank:

Hilltop:          303 Clifty Drive
                  430 Clifty Drive
Downtown:         233 East Main Street
Drive thru:       401 East Main Street
Wal-Mart:         567 Ivy Tech Drive
Hanover:          10 Medical Plaza

E-MAIL Address:  rvfbank.com


Annual Meeting:

The Annual  Meeting of  Shareholders  of River  Valley  Bancorp  will be held on
Wednesday, April 18, 2001, at 3:00 PM, at 430 Clifty Drive, Madison, IN 47250.


<PAGE>



                               BOARD OF DIRECTORS


Fred W. Koehler, Chairman
Auditor Jefferson County, Indiana

Robert W. Anger
Retired, Former CEO Madison First Federal

Jonnie L. Davis
Retired, Administrative Assistant, Various Firms

Matthew P. Forrester
President, CEO
River Valley Financial Bank

Michael J. Hensley
Partner, Law Firm- Hensley, Walro, Collins, & Hensley

Earl W. Johann
Retired, Former Owner
Madison Distributing Co.

Charles J. McKay
Partner - Scott, Callicotte, & McKay LLC CPAs

*****************

Lonnie D. Collins
Board Secretary
Partner, Law Firm- Hensley, Walro, Collins & Hensley


<PAGE>





                EXECUTIVE OFFICERS OF RIVER VALLEY FINANCIAL BANK


Matthew P. Forrester
President, CEO

Mark A. Goley
Vice President of Lending

Barbara J. Eades
Vice President of Retail Banking

Larry C. Fouse
Vice President of Finance

Deanna J. Liter
Vice President of Data Services

Loy M. Skirvin
Director of Human Resources


                     OFFICERS OF RIVER VALLEY FINANCIAL BANK

Dawn M. Moore
Internal Audit/Compliance Officer

Robert J. Schoenstein Jr.
Assistant Vice President
Loan Officer

Theresa A. Dryden
Loan Officer

Angela D. Adams
Branch Manager

James B. Allen
Loan Officer

Kenneth L. Cull
Loan Officer

Debbie R. Finnegan
Branch Manager

Rachael A. Goble
Branch Manager

Rick T. Nelson
Loan Officer

Linda L. Ralston
Branch Manager

Rhonda E. Wingham
Branch Manager