FORM 10-KSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
(Mark One)

[X]  Annual Report  Pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934

                   For the fiscal year ended December 31, 2004

or

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

For the transition period from _____________ to _______________

Commission File Number       000-21765

                              RIVER VALLEY BANCORP
                         (Name of small business issuer)


                 INDIANA                                   35-1984567
      (State or other Jurisdiction               (I.R.S. Employer Identification
    of Incorporation or Organization)                        Number)


                    430 Clifty Drive
                      P.O. Box 1590
                    Madison, Indiana                       47250-0590
        (Address of Principal Executive Offices)           (Zip Code)

                           Issuer's telephone number:
                                 (812) 273-4949

           Securities Registered Pursuant to Section 12(b) of the Act:

                                      None

           Securities Registered Pursuant to Section 12(g) of the Act:

                         Common Stock, without par value
                                (Title of Class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such requirements for the past 90 days. YES [X] NO [ ]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [ ]

The issuer had  $16,063,000  in revenues for the fiscal year ended  December 31,
2004.

As of February 25, 2005,  there were issued and outstanding  1,584,877 shares of
the issuer's Common Stock.  The aggregate  market value of the voting stock held
by non-affiliates of the issuer, computed by reference to the average sale price
of such stock as of February 25, 2005 was $25,141,650.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report to  Shareholders  for the year ended  December 31,
2004 are incorporated into Part II. Portions of the Proxy Statement for the 2005
Annual Meeting of Shareholders are incorporated in Part I and Part III.

Transitional Small Business Disclosure Format (check one): YES [ ] NO [X]

                            Exhibit Index on Page E-1
                               Page 1 of 39 pages

<PAGE>


                              RIVER VALLEY BANCORP
                                   Form 10-KSB
                                      INDEX


                                                                            Page

FORWARD LOOKING STATEMENT......................................................3

PART I
  Item 1.   Description of Business............................................3
  Item 2.   Description of Properties.........................................31
  Item 3.   Legal Proceedings.................................................32
  Item 4.   Submission of Matters to a Vote of Security Holders...............32
  Item 4.5. Executive Officers of the Registrant..............................32

PART II
  Item 5.   Market for Common Equity, Related Stockholder Matters and
              Small Business Issuer Purchases of Equity Securities............33
  Item 5.5. Selected Consolidated Financial Data..............................34
  Item 6.   Management's Discussion and Analysis or Plan of Operation.........34
  Item 7.   Financial Statements..............................................34
  Item 8.   Changes in and Disagreements With Accountants on Accounting and
               Financial Disclosure...........................................34
  Item 8A.  Controls and Procedures...........................................34
  Item 8B.  Other Information.................................................35

PART III
  Item 9.   Directors, Executive Officers, Promoters and Control Persons,
               Compliance with Section 16(a) of the Exchange Act..............35
  Item 10.  Executive Compensation............................................35
  Item 11.  Security Ownership of Certain Beneficial Owners and Management
               and Related Stockholder Matters................................35
  Item 12.  Certain Relationships and Related Transactions....................36
  Item 13.  Exhibits..........................................................37
  Item 14.  Principal Accountant Fees and Services............................37

SIGNATURES....................................................................38


                                       2
<PAGE>

                            FORWARD LOOKING STATEMENT


     This Annual Report on Form 10-KSB ("Form 10-KSB") contains statements which
constitute  forward  looking  statements  within  the  meaning  of  the  Private
Securities Litigation Reform Act of 1995. These statements appear in a number of
places in this Form 10-KSB and include statements regarding the intent,  belief,
outlook,  estimates or  expectations  of the Holding Company (as defined below),
its directors,  or its officers  primarily with respect to future events and the
future financial performance of the Holding Company. Readers of this Form 10-KSB
are cautioned  that any such forward  looking  statements  are not guarantees of
future  events or  performance  and involve  risks and  uncertainties,  and that
actual  results  may  differ  materially  from  those  in  the  forward  looking
statements  as  a  result  of  various  factors.  The  accompanying  information
contained in this Form 10-KSB identifies important factors that could cause such
differences.  These  factors  include but are not limited to changes in interest
rates;  loss of  deposits  and  loan  demand  to  other  savings  and  financial
institutions;  substantial changes in financial markets;  changes in real estate
values and the real estate market;  regulatory changes; or unanticipated results
in pending legal proceedings.

Item 1. Description of Business.
General

     River Valley  Bancorp (the "Holding  Company" and together with the "Bank,"
the  "Company"),  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. 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"),  and River
Valley Financial and Citizens merged on November 20, 1997.

     The  activities  of the Holding  Company  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 six  full-service  office  locations in Jefferson and Clark
Counties, Indiana, and Carroll County, Kentucky, and offers a variety of deposit
and lending  services  to  consumer  and  commercial  customers.  The Company 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.

     The Bank  historically  has  concentrated  its  lending  activities  on the
origination  of  loans  secured  by  first  mortgage  liens  for  the  purchase,
construction,  or refinancing of one- to four- family residential real property.
One- to four-family residential mortgage loans continue to be the major focus of
the Bank's loan origination  activities,  representing 43.2% of the Bank's total
loan portfolio at December 31, 2004. The Bank identified  $337,000 in loans held
for sale at December 31, 2004. The Bank also offers multi-family mortgage loans,
non-residential real estate loans, land loans,  construction loans,  nonmortgage
commercial  loans and consumer  loans.  Its  principal  market area is Jefferson
County,  Indiana and  adjoining  counties.  The  Company's  internet  address is
www.rvfbank.com, and the Company makes available all filings with the Securities
and Exchange Commission via its internet website.

                                       3
<PAGE>

     Loan Portfolio  Data. The following table sets forth the composition of the
Bank's loan  portfolio,  including loans held for sale, as of December 31, 2004,
2003,  2002, 2001 and 2000 by loan type as of the dates  indicated,  including a
reconciliation  of gross loans receivable  after  consideration of the allowance
for loan losses, deferred loan origination costs and loans in process.

<TABLE>
<CAPTION>

                                                                     At December 31,
                                    ------------------------------------------------------------------------------------------------
                                           2004               2003               2002                2001                2000
                                    ------------------   ----------------   -----------------   -----------------   ----------------
                                              Percent            Percent             Percent             Percent            Percent
                                     Amount   of Total   Amount  of Total   Amount   of Total   Amount   of Total   Amount  of Total
TYPE OF LOAN                                                     (Dollars in thousands)
Residential real estate:
<S>                                 <C>         <C>    <C>         <C>     <C>         <C>      <C>        <C>     <C>         <C>
   One-to four-family...............$104,466    43.2%  $ 90,492    45.9%   $ 73,197    43.4%    $ 73,431   45.1%   $ 77,304    52.0%
   Multi-family.....................   8,100     3.4      5,009     2.5       4,396     2.6        3,932    2.4       3,319     2.2
   Construction.....................  20,046     8.3      8,689     4.4       4,866     2.9        6,874    4.2       6,827     4.6
Nonresidential real estate..........  59,702    24.7     50,995    25.8      42,672    25.3       36,898   22.7      25,944    17.4
Land loans..........................   7,933     3.3      5,393     2.7       3,364     2.0        4,994    3.1       4,269     2.9
Consumer loans:
   Automobile loans.................   4,675     1.9      6,347     3.2       9,494     5.6       12,320    7.6      11,118     7.5
   Loans secured by deposits........     553      .2        427      .2         401      .2          537     .3         574      .4
   Home improvement loans...........      --      --         --      --          --      --           --     --           6      --
   Other............................   3,659     1.5      3,513     1.8       4,171     2.5        4,549    2.8       2,988     2.0
Commercial loans....................  32,582    13.5     26,764    13.5      26,203    15.5       19,216   11.8      16,361    11.0
                                    --------    -----  --------   -----    --------   -----     --------  -----    --------   -----
Gross loans receivable.............. 241,716   100.0    197,629   100.0     168,764   100.0      162,751  100.0     148,710   100.0
Add/(Deduct):
   Deferred loan origination costs..    496       .2        461      .2         379      .2          356     .2         324      .2
   Undisbursed portions of loans
     in process.....................  (8,812)   (3.7)    (3,868)   (2.0)     (2,147)   (1.3)      (3,163)  (2.0)     (6,362)   (4.3)
         Allowance for loan losses..  (2,364)   (1.0)    (2,056)   (1.1)     (2,101)   (1.3)      (1,972)  (1.3)     (1,702)   (1.1)
                                    --------    -----  --------   -----    --------   -----     --------  -----    --------   -----
Net loans receivable................$231,036    95.5%  $192,166    97.1%   $164,895    97.6%    $157,972   96.9%   $140,970   94.8%
                                    ========    ====   ========   =====    ========   =====     ========  =====    ========  ======
</TABLE>


     The  following  table sets forth certain  information  at December 31, 2004
regarding the dollar amount of loans maturing in the Bank's loan portfolio based
on the  contractual  terms to  maturity.  Demand  loans,  loans having no stated
schedule of repayments and no stated maturity and overdrafts are reported as due
in one year or less.  This  schedule  does not  reflect  the effects of possible
prepayments  or  enforcement  of   due-on-sale   clauses.   Management   expects
prepayments will cause actual maturities to be shorter.

<TABLE>
<CAPTION>

                                                                         Due During Years Ended December 31,
                                    Balance             --------------------------------------------------------------------
                                Outstanding at                                         2008       2010     2015      2020
                                 December 31,                                           to         to       to       and
                                     2004                  2005    2006       2007     2009       2014     2019    following
                                --------------          --------  ------     ------   ------    -------   -------  ---------
                                                                                   (In thousands)
Residential real estate loans:
<S>                                <C>                  <C>       <C>        <C>      <C>       <C>       <C>      <C>
   One-to four-family...........   $104,466             $  5,891  $2,216     $1,809   $  705    $ 5,304   $14,441  $ 74,100
   Multi-family.................      8,100                   --      --         --       --        317       960     6,823
   Construction.................     20,046               16,424   1,786      1,836       --         --        --        --
Nonresidential
   Real estate loans............     59,702                   33      12         26      308      3,379    12,396    43,548
Land loans......................      7,933                   42       6          6      368      1,936     1,227     4,348
Consumer loans:
   Loans secured by deposits....        553                  307      95        128       22          1        --        --
   Other loans..................      8,334                1,555   1,276      1,680    2,457        331     1,035        --
Commercial loans................     32,582               20,175   3,731        753    4,129      2,584     1,210        --
                                   --------             --------  ------     ------   ------    -------   -------  --------
                  Total............$241,716             $ 44,427  $9,122     $6,238   $7,989    $13,852   $31,269  $128,819
                                   ========             ========  ======     ======   ======    =======   =======  ========
</TABLE>

                                       4
<PAGE>


     The following  table sets forth, as of December 31, 2004, the dollar amount
of all loans due after one year that have fixed  interest  rates and floating or
adjustable interest rates.

<TABLE>
<CAPTION>

                                                                            Due After December 31, 2005
                                                                   ----------------------------------------------
                                                                   Fixed Rates     Variable Rates         Total
                                                                   -----------     --------------         -----
                                                                                   (In thousands)
Residential real estate loans:
<S>                                                                   <C>             <C>               <C>
   One-to four-family.........................................        $  9,188        $  89,387         $  98,575
   Multi-family...............................................             575            7,525             8,100
   Construction...............................................              --            3,622             3,622
Non-residential real estate loans.............................           4,911           54,758            59,669
Land loans....................................................             454            7,437             7,891
Consumer loans:
   Loans secured by deposits..................................             246               --               246
   Other loans................................................           6,671              108             6,779
Commercial loans..............................................           6,952            5,455            12,407
                                                                      --------        ---------         ---------
                  Total                                               $ 28,997        $ 168,292         $ 197,289
                                                                      ========        =========         =========
</TABLE>

     Residential   Loans.   Residential  loans  consist  primarily  of  one-  to
four-family  loans.  Approximately  $104.5  million,  or  43.2%  of  the  Bank's
portfolio  of loans,  at December 31,  2004,  consisted  of one- to  four-family
residential loans, of which approximately 85.3% had adjustable rates.

     The Bank currently offers  adjustable rate one- to four-family  residential
mortgage loans  ("ARMs")  which adjust  annually and are indexed to the one-year
U.S. Treasury securities yields adjusted to a constant maturity,  although until
late 1995, the Bank's ARMs were indexed to the 11th District Cost of Funds. Some
of the Bank's  residential  ARMs are  originated  at a discount or "teaser" rate
which is generally 150 to 175 basis points below the "fully indexed" rate. These
ARMs then  adjust  annually  to maintain a margin  above the  applicable  index,
subject to maximum  rate  adjustments  discussed  below.  The Bank's ARMs have a
current margin above such index of 2.5% for  owner-occupied  properties and 3.0%
for  non-owner-occupied  properties.  A  substantial  portion of the ARMs in the
Bank's  portfolio at December 31, 2004 provide for maximum rate  adjustments per
year and over the life of the loan of 1% and 4%, respectively, although the Bank
also originates  residential ARMs which provide for maximum rate adjustments per
year and over the life of the loan of 1.5% and 6%, respectively. The Bank's ARMs
generally  provide for interest rate minimums of 1% below the origination  rate.
The Bank's residential ARMs are amortized for terms up to 30 years.

     Adjustable rate loans decrease the risk associated with changes in interest
rates but involve other risks,  primarily  because as interest  rates rise,  the
payments by the borrowers  may rise to the extent  permitted by the terms of the
loan, thereby increasing the potential for default.  Also, adjustable rate loans
have features which restrict changes in interest rates on a short-term basis and
over the life of the loan. At the same time,  the market value of the underlying
property may be adversely affected by higher interest rates.

     The Bank  currently  offers  fixed  rate  one- to  four-family  residential
mortgage  loans which  provide for the payment of principal  and  interest  over
periods of 10 to 30 years.  At December  31,  2004,  approximately  14.7% of the
Bank's one- to four-family  residential mortgage loans had fixed rates. The Bank
currently  underwrites its fixed-rate  residential  mortgage loans for potential
sale to the Federal  Home Loan  Mortgage  Corporation  (the  "FHLMC").  The Bank
retains  all  servicing  rights on the  residential  mortgage  loans sold to the
FHLMC. At December 31, 2004, the Bank had  approximately  $88.7 million of fixed
rate  residential  mortgage loans which were sold to the FHLMC and for which the
Bank provides servicing.

     The Bank  generally  does not  originate  one- to  four-family  residential
mortgage loans if the ratio of the loan amount to the lesser of the current cost
or appraised value of the property (the  "Loan-to-Value  Ratio")


                                       5
<PAGE>

exceeds 95% and generally  does not originate  one- to  four-family  residential
ARMs if the Loan-to-Value Ratio exceeds 80%. The Bank generally requires private
mortgage  insurance on all  conventional  one- to four-family  residential  real
estate  mortgage loans with  Loan-to-Value  Ratios in excess of 80%. The cost of
such insurance is factored into the annual  percentage  yield on such loans, and
is not  automatically  eliminated when the principal balance is reduced over the
term of the loan.

     Substantially  all of the one- to  four-family  residential  mortgage loans
that the Bank originates include "due-on-sale"  clauses, which give the Bank the
right to declare a loan  immediately  due and payable in the event  that,  among
other  things,  the borrower  sells or otherwise  disposes of the real  property
subject to the mortgage and the loan is not repaid.

     At December 31, 2004, the Bank had outstanding  approximately  $9.8 million
of home equity loans, with unused lines of credit totaling  approximately  $11.8
million.  Three home equity loans were included in non-performing assets on that
date in the  amount of  $48,000.  The  Bank's  home  equity  lines of credit are
adjustable  rate lines of credit tied to the prime rate and are amortized  based
on a  10-  to  20-year  maturity.  The  Bank  generally  allows  a  maximum  90%
Loan-to-Value  Ratio for its home equity  loans  (taking  into account any other
mortgages on the property). Payments on such home equity loans equal 1.5% of the
outstanding principal balance per month.

     The Bank also offers indemnification  mortgage loans ("ID Mortgage Loans"),
which are typically  written as fixed rate second mortgage loans.  The Bank's ID
Mortgage  Loans are written for terms of five years and  generally  have maximum
Loan-to-Value Ratios of 80%.

     The Bank also offers standard  second mortgage loans,  which are adjustable
rate loans tied to the U.S.  Treasury  securities  yields adjusted to a constant
maturity  with a current  margin  above  such  index of 3%.  The  Bank's  second
mortgage loans have maximum rate  adjustments per year and over the terms of the
loans equal to 1% and 4%,  respectively.  The Bank's second  mortgage loans have
terms of 10 to 30 years.

     At December 31, 2004, $893,000 of one- to four-family  residential mortgage
loans, or .4% of total loans, were included in the Bank's non-performing assets.

     Construction  Loans.  The Bank offers  construction  loans with  respect to
residential and nonresidential real estate and, in certain cases, to builders or
developers constructing such properties on a speculative basis (i.e., before the
builder/developer obtains a commitment from a buyer).

     Generally, construction loans are written as 12-month fixed rate loans with
interest  calculated  on the amount  disbursed  under the loan and  payable on a
semi-annual or monthly basis. The Bank generally  requires an 80%  Loan-to-Value
Ratio  for  its  construction  loans,  although  the  Bank  may  permit  an  85%
Loan-to-Value  Ratio for one- to  four-family  residential  construction  loans.
Inspections  are generally made prior to any  disbursement  under a construction
loan, and the Bank does not charge commitment fees for its construction loans.

     At December  31,  2004,  $20.0  million,  or 8.3% of the Bank's  total loan
portfolio,  consisted of construction  loans. The largest  construction  loan at
December  31, 2004  totaled $3.4  million.  Construction  loans in the amount of
$158,000,  or .1% of total loans, were included in non-performing assets on that
date.

     While providing the Bank with a comparable, and in some cases higher, yield
than a conventional mortgage loan,  construction loans involve a higher level of
risk. For example, if a project is not completed and the borrower defaults,  the
Bank may have to hire  another  contractor  to complete  the project at a higher
cost.  Also, a project may be completed,  but may not be saleable,  resulting in
the borrower defaulting and the Bank taking title to the project.

     Nonresidential  Real Estate Loans. At December 31, 2004, $59.7 million,  or
24.7% of the Bank's portfolio,  consisted of  nonresidential  real estate loans.
Nonresidential  real estate loans are  primarily  secured


                                       6
<PAGE>

by real estate such as churches,  farms and small business properties.  The Bank
generally  originates  nonresidential  real estate loans as one-year  adjustable
rate loans indexed to the one-year U.S. Treasury securities yields adjusted to a
constant maturity,  written for maximum terms of 30 years. The Bank's adjustable
rate nonresidential real estate loans have maximum adjustments per year and over
the life of the loan of 1% and 4%,  respectively,  and interest rate minimums of
1% below the origination rate. The Bank generally requires a Loan-to-Value Ratio
of up to 80%, depending on the nature of the real estate collateral.

     The Bank underwrites its nonresidential real estate loans on a case-by-case
basis and,  in  addition  to its normal  underwriting  criteria,  evaluates  the
borrower's  ability to  service  the debt from the net  operating  income of the
property. As of December 31, 2004, the Bank's largest nonresidential real estate
loan was $4.7  million.  Nonresidential  real  estate  loans  in the  amount  of
$255,000 or .11% were included in non-performing assets at December 31, 2004.

     Loans secured by nonresidential  real estate generally are larger than one-
to  four-family  residential  loans  and  involve  a  greater  degree  of  risk.
Nonresidential  real estate loans often  involve  large loan  balances to single
borrowers  or groups of related  borrowers.  Payments on these loans depend to a
large degree on results of operations  and  management of the properties and may
be affected to a greater extent by adverse  conditions in the real estate market
or the economy in general.  Accordingly, the nature of the loans makes them more
difficult for management to monitor and evaluate.

     Multi-family  Loans. At December 31, 2004,  approximately $8.1 million,  or
3.4% of the Bank's total loan portfolio,  consisted of mortgage loans secured by
multi-family  dwellings  (those  consisting  of more than four units).  The Bank
writes  multi-family loans on terms and conditions similar to its nonresidential
real estate loans. The largest  multi-family  loan in the Bank's portfolio as of
December  31,  2004 was $1.4  million  and was  secured  by a 46-unit  apartment
complex  in  Hanover,   Indiana.   No   multi-family   loans  were  included  in
non-performing assets on that date.

     Multi-family  loans,  like  nonresidential  real  estate  loans,  involve a
greater risk than  residential  loans.  See  "Nonresidential  Real Estate Loans"
above. Also, the loan-to-one  borrower  limitations  restrict the ability of the
Bank to make loans to developers of apartment  complexes and other  multi-family
units.

     Land Loans. At December 31, 2004,  approximately  $7.9 million,  or 3.3% of
the  Bank's  total  loan  portfolio,  consisted  of  mortgage  loans  secured by
undeveloped  real estate.  The Bank's land loans are generally  written on terms
and  conditions  similar to its  nonresidential  real estate loans.  Some of the
Bank's land loans are land  development  loans;  i.e., the proceeds of the loans
are used for  improvements  to the real estate  such as streets  and sewers.  At
December 31, 2004, the Bank's largest land loan totaled $1.8 million.

     No land loans were  included in  non-performing  assets as of December  31,
2004. Such loans are more risky than  conventional  loans since land development
borrowers  who are over budget may divert the loan funds to cover  cost-overruns
rather than  direct  them toward the purpose for which such loans were made.  In
addition,  those loans are more difficult to monitor than conventional  mortgage
loans.  As such,  a  defaulting  borrower  could cause the Bank to take title to
partially improved land that is unmarketable without further capital investment.

     Commercial  Loans.  At December 31, 2004,  $32.6  million,  or 13.5% of the
Bank's total loan  portfolio,  consisted of nonmortgage  commercial  loans.  The
Bank's commercial loans are written on either a fixed rate or an adjustable rate
basis  with  terms  that vary  depending  on the type of  security,  if any.  At
December  31,  2004,  approximately  $27.8  million,  or  85.3%,  of the  Bank's
commercial  loans were secured by collateral,  such as equipment,  inventory and
crops. The Bank's  adjustable rate commercial loans are generally indexed to the
prime rate with varying  margins and terms  depending on the type of  collateral
securing  the loans and the credit  quality of the  borrowers.  At December  31,
2004,  the  largest  commercial  loan was  $2.0  million.  As of the same  date,
commercial loans totaling $821,000 were included in non-performing assets.

                                       7
<PAGE>

     Commercial  loans  tend to bear  somewhat  greater  risk  than  residential
mortgage loans,  depending on the ability of the underlying  enterprise to repay
the loan. Further,  they are frequently larger in amount than the Bank's average
residential mortgage loans.

     Consumer Loans.  The Bank's consumer  loans,  consisting  primarily of auto
loans, home improvement  loans,  unsecured  installment  loans, loans secured by
deposits  and  mobile  home  loans,  aggregated  approximately  $8.9  million at
December  31,  2004,  or 3.7% of the  Bank's  total  loan  portfolio.  The  Bank
consistently originates consumer loans to meet the needs of its customers and to
assist in  meeting  its  asset/liability  management  goals.  All of the  Bank's
consumer  loans,  except loans  secured by  deposits,  are fixed rate loans with
terms that vary from six months (for unsecured  installment  loans) to 60 months
(for home improvement loans and loans secured by new  automobiles).  At December
31, 2004, 82.4% of the Bank's consumer loans were secured by collateral.

     The Bank's  loans  secured by deposits are made in amounts up to 90% of the
current account balance and accrue at a rate of 2% over the underlying  passbook
or certificate of deposit rate.

     The Bank offers both direct and indirect automobile loans. Under the Bank's
indirect  automobile  program,  participating  automobile  dealers  receive loan
applications from prospective purchasers of automobiles at the point of sale and
deliver them to the Bank for  processing.  The dealer  receives a portion of the
interest payable on approved loans.

     Consumer loans may entail  greater risk than  residential  mortgage  loans,
particularly in the case of consumer loans which are unsecured or are secured by
rapidly  depreciable  assets,  such as  automobiles.  Further,  any  repossessed
collateral for a defaulted  consumer loan may not provide an adequate  source of
repayment  of  the  outstanding  loan  balance.   In  addition,   consumer  loan
collections depend upon the borrower's continuing financial stability,  and thus
are more likely to be affected by adverse personal  circumstances.  Furthermore,
the  application  of various  federal and state laws,  including  bankruptcy and
insolvency  laws, may limit the amount which can be recovered on such loans.  At
December  31,  2004,  consumer  loans  amounting  to $26,000  were  included  in
non-performing assets.

     Origination,  Purchase and Sale of Loans. The Bank historically  originated
its ARMs pursuant to its own  underwriting  standards which did not conform with
the  standard  criteria of the FHLMC or Federal  National  Mortgage  Association
("FNMA").  The Bank's ARMs varied from secondary market criteria because,  among
other things,  the Bank did not require current  property  surveys in most cases
and did not  permit  the  conversion  of those  loans to fixed rate loans in the
first three years of its term.  If the Bank  desired to sell its  non-conforming
ARMs,  it may have  experienced  difficulty in selling such loans quickly in the
secondary market.

     In 1996, the Bank began underwriting fixed rate residential  mortgage loans
for potential sale to the FHLMC on a servicing-retained  basis. Loans originated
for sale to the FHLMC in the secondary  market are originated in accordance with
the  guidelines  established  by the FHLMC and are sold promptly  after they are
originated.  The  Bank  receives  a  servicing  fee of  one-fourth  of 1% of the
principal balance of all loans serviced. At December 31, 2004, the Bank serviced
$88.7 million in loans sold to the FHLMC.

     The Bank confines its loan  origination  activities  primarily to Jefferson
County and  surrounding  counties.  At December  31,  2004,  the Bank held loans
totaling  approximately  $23.7  million  that were  secured by property  located
outside of Indiana.  The Bank's loan  originations  are generated from referrals
from  existing  customers,  real estate  brokers and  newspaper  and  periodical
advertising.  Loan applications are taken at any of the Bank's five full-service
offices.

     The Bank's loan approval  processes  are intended to assess the  borrower's
ability to repay the loan,  the  viability  of the loan and the  adequacy of the
value of the  property  that will  secure  the loan.  To assess  the


                                       8
<PAGE>

borrower's  ability  to repay,  the Bank  evaluates  the  employment  and credit
history and  information on the historical and projected  income and expenses of
its borrowers.

     Under the Bank's lending policy,  a loan officer may approve mortgage loans
up to $150,000,  a Senior Loan Officer may approve mortgage loans up to $275,000
and the President may approve mortgage loans up to $359,650.  All other mortgage
loans  must be  approved  by at  least  four  members  of the  Bank's  Board  of
Directors.  The lending  policy  further  provides that loans secured by readily
marketable  collateral,  such as stock, bonds and certificates of deposit may be
approved by a Loan Officer for up to  $150,000,  by a Senior Loan Officer for up
to $250,000 and by the President up to $333,700. Loans secured by other non-real
estate  collateral  may be  approved by a Loan  Officer for up to $50,000,  by a
Senior Loan Officer up to $75,000 and by the President up to $175,000.  Finally,
the  lending  policy  provides  that  unsecured  loans may be approved by a Loan
Officer up to $15,000 or up to $25,000 by a Senior Loan Officer or up to $50,000
by the President.  All other unsecured loans or loans secured by non-real estate
collateral  must be  approved  by at least four  members of the Bank's  Board of
Directors.

     The Bank generally  requires  appraisals on all real property  securing its
loans and requires an attorney's  opinion or title insurance and a valid lien on
the mortgaged real estate.  Appraisals for all real property  securing  mortgage
loans are performed by independent  appraisers who are state-licensed.  The Bank
requires fire and extended  coverage  insurance in amounts at least equal to the
principal  amount of the loan and also requires  flood  insurance to protect the
property  securing the loan if the  property is in a flood plain.  The Bank also
generally requires private mortgage insurance for all residential mortgage loans
with Loan-to-Value  Ratios of greater than 80%. The Bank does not require escrow
accounts for insurance premiums or taxes.

     The Bank's  underwriting  standards for consumer and  commercial  loans are
intended  to protect  against  some of the risks  inherent in making such loans.
Borrower  character,   paying  habits  and  financial  strengths  are  important
considerations.

     The  Bank  occasionally  purchases   participations  in  commercial  loans,
nonresidential   real  estate  and  multi-family   loans  from  other  financial
institutions.  At  December  31,  2004,  the  Bank  held in its  loan  portfolio
participations  in these types of loans aggregating  approximately  $2.3 million
that it had purchased,  all of which were serviced by others. The Bank generally
does not sell participations in any loans that it originates.

                                       9
<PAGE>

     The following table shows loan disbursement and repayment  activity for the
Bank during the periods indicated:
<TABLE>
<CAPTION>

                                                                                Year Ended December 31,
                                                                     --------------------------------------------
                                                                      2004              2003              2002
                                                                     ---------        ----------        ---------
                                                                                   (In thousands)
Loans Disbursed:
<S>                                <C>                               <C>               <C>              <C>
     Residential real estate loans (1)........................       $  57,876         $108,782         $  98,791
     Multi-family loans.......................................           3,778              811               864
     Construction loans.......................................          28,526           17,183            16,980
     Non-residential real estate loans........................          20,795            9,066            17,988
     Land loans...............................................           5,062            3,805             4,537
     Consumer and other loans.................................           5,174            4,924             6,758
     Commercial loans.........................................          27,358           38,214            25,505
                                                                     ----------        --------         ---------
         Total loans disbursed................................         148,569          182,785           171,423
Reductions:
     Sales....................................................          18,288           69,498            67,915
     Principal loan repayments and other (2)..................          91,411           86,016            96,585
                                                                     ---------         --------         ---------
         Total reductions.....................................         109,699          155,514           164,500
                                                                     ---------         --------         ---------
     Net increase ............................................       $  38,870         $ 27,271         $   6,923
                                                                     =========         ========         =========
--------------------------------------------------
</TABLE>

(1)  Includes loans originated for sale in the secondary market.

(2)  Other items consist of amortization of deferred loan origination costs, the
     provision  for losses on loans and net  charges to the  allowance  for loan
     losses.

     Origination and Other Fees. The Bank realizes income from loan  origination
fees, loan servicing fees,  late charges,  checking  account service charges and
fees for other  miscellaneous  services.  Late charges are generally assessed if
payment is not received  within a specified  number of days after it is due. The
grace period depends on the individual loan documents.

Non-Performing and Problem Assets

     Mortgage  loans are reviewed by the Bank on a regular  basis and are placed
on a non-accrual  status when management  determines that the  collectibility of
the interest is less than  probable or  collection of any amount of principal is
in doubt. Generally, when loans are placed on non-accrual status, unpaid accrued
interest is written off,  and further  income is  recognized  only to the extent
received.  The Bank  delivers  delinquency  notices with respect to all mortgage
loans  contractually  past due 5 to 10 days.  When loans are 30 days in default,
personal contact is made with the borrower to establish an acceptable  repayment
schedule.  Management is authorized to commence foreclosure  proceedings for any
loan upon making a determination that it is prudent to do so.

     Commercial and consumer  loans are treated  similarly.  Interest  income on
consumer, commercial and other nonmortgage loans is accrued over the term of the
loan except when serious  doubt exists as to the  collectibility  of a loan,  in
which case accrual of interest is discontinued  and the loan is written-off,  or
written down to the fair value of the  collateral  securing the loan.  It is the
Bank's  policy  to  recognize  losses  on  these  loans  as soon as they  become
apparent.

     Non-performing  Assets.  At December 31,  2004,  $2.2  million,  or .76% of
consolidated total assets,  were non-performing  loans compared to $514,000,  or
0.2% of consolidated  total assets, at December 31, 2003. The Bank had no REO at
December 31, 2004.

     The table  below  sets  forth the  amounts  and  categories  of the  Bank's
non-performing assets (non-performing loans, foreclosed real estate and troubled
debt restructurings) for the last three years. It is


                                       10
<PAGE>

the policy of the Bank that all earned but uncollected  interest on all loans be
reviewed  monthly to determine if any portion  thereof  should be  classified as
uncollectible for any loan past due in excess of 90 days.
<TABLE>
<CAPTION>
                                                                                     At December 31,
                                                                       -----------------------------------------
                                                                        2004            2003               2002
                                                                       ------          -------            ------
                                                                                   (In thousands)
Non-performing assets:
<S>                                                                    <C>             <C>                <C>
   Non-performing loans.......................................         $2,201          $   514            $1,080
   Troubled debt restructurings ..............................          1,684            1,003               848
                                                                      -------          -------          --------
     Total non-performing loans and troubled
       debt restructurings....................................          3,885            1,517             1,928
                                                                      -------          -------           -------
     Total non-performing assets..............................         $3,885           $1,517            $1,928
                                                                       ======           ======            ======
Total non-performing loans and troubled debt
   restructurings to total loans..............................          1.61%             .77%             1.14%
                                                                        ====             =====             ====
Total non-performing assets to total assets.                            1.34%             .59%              .86%
                                                                        ====             =====             =====
</TABLE>

     At December 31,  2004,  the Bank held loans  delinquent  from 30 to 89 days
totaling  $2,386,000.  Other  than in  connection  with  these  loans  and other
delinquent  loans  disclosed in this  section,  management  was not aware of any
other borrowers who were experiencing financial difficulties. In addition, there
were no other assets that would need to be disclosed as non-performing assets.

     Delinquent  Loans.  The following  table sets forth certain  information at
December  31,  2004,  2003,  and 2002  relating to  delinquencies  in the Bank's
portfolio.  Delinquent  loans  that are 90 days or more past due are  considered
non-performing assets.
<TABLE>
<CAPTION>

                          At December 31, 2004                 At December 31, 2003                   At December 31, 2002
                   ------------------------------------ ------------------------------------- --------------------------------------
                       30-89 Days      90 Days or More     30-89 Days       90 Days or More      30-89 Days        90 Days or More
                    ----------------- ----------------- -----------------  ------------------ ------------------ -------------------
                            Principal         Principal         Principal           Principal          Principal         Principal
                     Number  Balance   Number  Balance   Number  Balance    Number   Balance  Number    Balance  Number   Balance
                    of Loans of Loans of Loans of Loans of Loans of Loans  of Loans of Loans  of Loans  of Loans of Loans of Loans
                    -------- -------- -------- -------- -------- --------  -------- --------  --------  -------- -------- --------
                                                                (Dollars in thousands)
Residential real
<S>                    <C>    <C>        <C>    <C>        <C>     <C>        <C>    <C>          <C>     <C>       <C>    <C>
   estate loans.....   60     $1,267     16     $  893     16      $512       6      $  248       9       $105      5      $  499
Construction loans..    1        104      1        158     --        --       1          33       2        100      1         113
Land loans..........    1         15     --         --     --        --      --          --      --         --      1          82
Non-residential
   real estate loans    3        134      3        255     --        --      --          --      --         --      2         252
Consumer loans......   34        115     16         74     33       204       8          51      42        270     10          55
Commercial loans....   13        751     10        821      3        31       2         182       2         30      4          79
                      ---     ------     --     ------     --      ----      --      ------      --       ----     --      ------
   Total............  112     $2,386     46     $2,201     52      $747      17      $  514      55       $505     23      $1,080
                      ===     ======     ==     ======     ==      ===       ==      ======      ==       ====     ==      ======
Delinquent loans to
 total loans........                              1.90%                                0.64%                                 0.94%
                                                  ====                                 ====                                  ====
</TABLE>

     Classified Assets.  Federal regulations and the Bank's Asset Classification
Policy provide for the classification of loans and other assets such as debt and
equity  securities  to be of lesser  quality as  "substandard,"  "doubtful,"  or
"loss"  assets.  An  asset is  considered  "substandard"  if it is  inadequately
protected by the current net worth and paying  capacity of the obligor or of the
collateral pledged, if any.  "Substandard" assets include those characterized by
the  "distinct  possibility"  that  the Bank  will  sustain  "some  loss" if the
deficiencies are not corrected.  Assets classified as "doubtful" have all of the
weaknesses   inherent  in  those  classified   "substandard,"   with  the  added
characteristic  that the weaknesses  present make  "collection or liquidation in
full," on the basis of currently existing facts, conditions, and values, "highly
questionable and improbable."  Assets  classified as "loss" are those considered
"uncollectible"  and of such  little  value  that  their  continuance  as assets
without the establishment of a specific loss reserve is not warranted.

     An insured institution is required to establish general allowances for loan
losses  in  an  amount  deemed  prudent  by  management  for  loans   classified
substandard or doubtful,  as well as for other problem loans. General allowances
represent loss allowances  which have been established to recognize the inherent
risk

                                       11
<PAGE>

associated with lending activities, but which, unlike specific allowances,  have
not been allocated to particular  problem  assets.  When an insured  institution
classifies  problem  assets as  "loss," it is  required  either to  establish  a
specific  allowance  for  losses  equal to 100% of the  amount  of the  asset so
classified or to charge off such amount.  An  institution's  determination as to
the  classification of its assets and the amount of its valuation  allowances is
subject to review by the OTS,  which can order the  establishment  of additional
general or specific loss allowances.

     At December 31, 2004, the aggregate amount of the Bank's  classified assets
are as follows:

                                                   At December 31, 2004
                                                   --------------------

                                                      (In thousands)
Substandard assets...............................           $5,446
Doubtful assets..................................              378
Loss assets......................................               --
                                                            ------
   Total classified assets.......................           $5,824
                                                            ======

     The Bank  regularly  reviews its loan  portfolio to  determine  whether any
loans require classification in accordance with applicable regulations.  Not all
of the Bank's classified assets constitute non-performing assets.

Allowance for Loan Losses

     The allowance for loan losses is maintained  through the provision for loan
losses,  which  is  charged  to  earnings.  The  provision  for loan  losses  is
determined in  conjunction  with  management's  review and evaluation of current
economic conditions (including those of the Bank's lending area), changes in the
character and size of the loan portfolio,  loan delinquencies (current status as
well as past and  anticipated  trends) and adequacy of collateral  securing loan
delinquencies,  historical  and estimated net  charge-offs  and other  pertinent
information  derived  from a  review  of the  loan  portfolio.  In  management's
opinion,  the Bank's  allowance  for loan losses is adequate to absorb  probable
losses from loans at December 31, 2004. However,  there can be no assurance that
regulators,  when  reviewing the Bank's loan  portfolio in the future,  will not
require  increases in its allowances for loan losses or that changes in economic
conditions will not adversely affect the Bank's loan portfolio.

                                       12
<PAGE>

     Summary of Loan Loss Experience. The following table analyzes changes in
the allowance during the five years ended December 31, 2004.

<TABLE>
<CAPTION>
                                                                         Year Ended December 31,
                                                       ---------------------------------------------------------
                                                         2004         2003        2002        2001        2000
                                                       --------     --------    --------    --------    --------
                                                                         (Dollars in thousands)
<S>                                                     <C>          <C>         <C>         <C>         <C>
Balance at beginning of period                          $2,056       $2,101      $1,972      $1,702      $1,522
Charge-offs:
   Single-family residential                               (24)        (401)       (132)        (31)         (4)
   Consumer                                               (150)        (242)       (258)       (107)        (71)
   Commercial                                               --         (100)       (111)        (73)         (9)
                                                        -------      ------      ------      ------      ------
      Total charge-offs                                   (174)        (743)       (501)       (211)        (84)
Recoveries                                                 144          190          60          31          37
                                                        -------      ------      ------      ------      ------
   Net charge-offs                                         (30)         553        (441)       (180)        (47)
Provision for losses on loans                              338          508         570         450         227
                                                        -------      ------      ------      ------      ------
   Balance at end of period                             $2,364       $2,056      $2,101      $1,972      $1,702
                                                        ======       ======      ======      ======      ======
Allowance for loan losses as a percent of
 total loans outstanding before net items                 0.98%        1.04%       1.25%       1.21%       1.15%
                                                          ====         ====        ====        ====        ====
Ratio of net charge-offs to average loans
  outstanding before net items                            0.01%        0.30%       0.27%       0.12%       0.03%
                                                          ====         ====        ====        ====        ====
</TABLE>


     Allocation of Allowance for Loan Losses.  The following  table  presents an
analysis of the allocation of the Bank's  allowance for loan losses at the dates
indicated.

<TABLE>
<CAPTION>
                                                                           At December 31,
                                     -----------------------------------------------------------------------------------------------
                                            2004                 2003             2002               2001                2000
                                    -------------------    ------------------ -----------------  ----------------   ----------------
                                               Percent               Percent          Percent            Percent            Percent
                                               of loans              of loans         of loans           of loans           of loans
                                               in each               in each          in each            in each            in each
                                               category              category         category           category           category
                                               to total              to total         to total           to total           to total
                                      Amount    loans      Amount     loans   Amount   loans     Amount   loans     Amount   loans
                                    --------   --------    ------   -------   ------  --------   ------  --------   ------   -------
                                                                      (Dollars in thousands)
Balance at end of
period applicable to:
<S>                                   <C>        <C>       <C>         <C>   <C>        <C>     <C>      <C>       <C>        <C>
 Residential real estate ........     $  930     54.9%     $1,007      52.8% $  827     48.9    $  610   51.7%     $  346     58.8
 Nonresidential real estate .....        162     28.0         171      28.5     131     27.3       156   25.8          --     20.3
 Consumer loans .................        226      3.6         246       5.2     452      8.3       626   10.7         403      9.9
 Commercial loans ...............        807     13.5         512      13.5     458     15.5       365   11.8         106     11.0
 Unallocated ....................        239       --         120        --     233      --        215     --         847       --
                                      ------    -----      ------     -----  ------    -----    ------  -----      ------    -----
          Total .................     $2,364    100.0%     $2,056     100.0% $2,101    100.0%   $1,972  100.0%     $1,702    100.0%
                                      ======    =====      ======     ====== ======    =====    ======  ======     ======    =====
</TABLE>

Investments and Mortgage-Backed Securities

     Investments.  The Bank's investment  portfolio  (excluding  mortgage-backed
securities) consists of U.S. government and agency obligations, corporate bonds,
municipal  securities and Federal Home Loan Bank ("FHLB") stock. At December 31,
2004, the  investments  in the portfolio had a carrying  value of  approximately
$30.1 million, or 10.4%, of the consolidated total assets.

                                       13
<PAGE>

     The following  table sets forth the amortized  cost and the market value of
the Bank's investment portfolio at the dates indicated.

<TABLE>
<CAPTION>
                                                                          At December 31,
                                                -----------------------------------------------------------------
                                                       2004                    2003                   2002
                                                ------------------    -------------------    --------------------
                                                Amortized   Market    Amortized    Market    Amortized    Market
                                                  Cost       Value       Cost       Value       Cost       Value
                                                ---------   ------    ---------    ------    ---------    -------
                                                                          (In thousands)
Available for Sale:
   U.S. Government and agency
<S>                                              <C>        <C>         <C>        <C>        <C>         <C>
     obligations.............................    $25,478    $25,413     $33,483    $33,897    $24,581     $25,148
   Corporate bonds...........................         --         --          --         --      2,090       2,091
   Municipal securities......................      1,430      1,438         475        485        335         352
                                                 -------    -------     -------    -------    -------     -------
   Total available for sale..................     26,908     26,851      33,958     34,382     27,006      27,591
FHLB stock...................................      3,281      3,281       2,176      2,176      2,000       2,000
                                                 -------    -------     -------    -------    -------     -------
                  Total investments ........     $30,189    $30,132     $36,134    $36,558    $29,006     $29,591
                                                 =======    =======     =======    =======    =======     =======
</TABLE>


     The  following  table  sets  forth  the  amount  of  investment  securities
(excluding FHLB stock) which mature during each of the periods indicated and the
weighted average yields for each range of maturities at December 31, 2004.

<TABLE>
<CAPTION>

                                                       Amount at December 31, 2004 which matures in
                                      ----------------------------------------------------------------------------------
                                          One Year             One Year               Five to              After
                                           or Less           to Five Years            Ten Years           Ten Years
                                      ------------------  -------------------    -------------------  ------------------
                                      Amortized  Average  Amortized   Average    Amortized   Average  Amortized  Average
                                        Cost      Yield     Cost       Yield       Cost       Yield     Cost      Yield
                                      ---------  -------  ---------   -------    ---------   -------  ---------  -------
                                                                (Dollars in thousands)
U.S. Government and agency
<S>                                   <C>         <C>      <C>         <C>
   obligations......................  $9,508      2.97%    $15,970     3.22%        --          --       --        --
Municipal Securities................      --        --        615      3.72        815        3.40       --        --
</TABLE>

     Mortgage-Backed   Securities.   The   Bank   maintains   a   portfolio   of
mortgage-backed   pass-through  securities  in  the  form  of  FHLMC,  FNMA  and
Government National Mortgage  Association ("GNMA")  participation  certificates.
Mortgage-backed  pass-through securities generally entitle the Bank to receive a
portion of the cash flows from an  identified  pool of  mortgages  and gives the
Bank an interest in that pool of mortgages.  FHLMC, FNMA and GNMA securities are
each guaranteed by its respective agencies as to principal and interest.  Except
for a $2,000 investment in interest-only certificates,  the Bank does not invest
in any derivative products.

     Although  mortgage-backed  securities  generally yield less than individual
loans   originated  by  the  Bank,  they  present  less  credit  risk.   Because
mortgage-backed  securities have a lower yield relative to current market rates,
retention  of such  investments  could  adversely  affect the  Bank's  earnings,
particularly  in  a  rising  interest  rate  environment.   The  mortgage-backed
securities  portfolio  is  generally  considered  to have very low  credit  risk
because they are guaranteed as to principal repayment by the issuing agency.

     In  addition,  the  Bank  has  purchased  adjustable  rate  mortgage-backed
securities  as part of its effort to reduce its interest  rate risk. In a period
of declining  interest  rates,  the Bank is subject to  prepayment  risk on such
adjustable rate mortgage-backed  securities.  The Bank attempts to mitigate this
prepayment  risk by  purchasing  mortgage-backed  securities  at or near par. If
interest  rates rise in general,  the  interest  rates on the loans  backing the
mortgage-backed securities will also adjust upward, subject to the interest rate
caps in the underlying  mortgage  loans.  However,  the Bank is still subject to
interest rate risk on such  securities if interest  rates rise faster than 1% to
2% maximum annual interest rate adjustments on the underlying loans.

                                       14
<PAGE>

     At  December  31,  2004,  the Bank had  mortgage-backed  securities  with a
carrying  value of  approximately  $113,000,  all of which  were  classified  as
available for sale. These  mortgage-backed  securities may be used as collateral
for borrowings and, through repayments, as a source of liquidity.

     The following  table sets forth the amortized  cost and market value of the
Bank's mortgage-backed securities at the dates indicated.
<TABLE>
<CAPTION>

                                                                          At December 31,
                                                ----------------------------------------------------------------
                                                       2004                    2003                    2002
                                                -------------------    -------------------    ------------------
                                                Amortized    Market    Amortized    Market    Amortized   Market
                                                  Cost       Value       Cost       Value       Cost      Value
                                                ---------    ------    ---------    ------    ---------   ------
                                                                          (In thousands)
Available for Sale:
<S>                                               <C>        <C>        <C>         <C>         <C>        <C>
   Government agency securities..............     $   0      $   0      $   0       $   0       $120       $122
   Collateralized mortgage obligations.......       113        113        177         175        451        461
                                                  -----      -----      -----       -----       ----       ----
     Total mortgage-backed securities             $ 113      $ 113      $ 177       $ 175       $571       $583
                                                  =====      =====      =====       =====       ====       ====
</TABLE>


     The  following  table sets forth the amount of  mortgage-backed  securities
which  mature  during each of the periods  indicated  and the  weighted  average
yields for each range of maturities at December 31, 2004.

<TABLE>
<CAPTION>

                                                           Amount at December 31, 2004 which matures in
                                                ----------------------------------------------------------------
                                                      One Year               One Year               After
                                                      or Less             to Five Years           Five Years
                                                -------------------   --------------------   -------------------
                                                Amortized   Average   Amortized    Average   Amortized   Average
                                                  Cost       Yield      Cost        Yield      Cost       Yield
                                                ---------   -------   ---------    -------   ---------   -------
                                                                    (Dollars in thousands)
Mortgage-backed securities available
<S>                                                                                             <C>        <C>
   for sale..................................       --         --         --           --       $113       3.16%
</TABLE>

     The  following  table sets forth the changes in the Bank's  mortgage-backed
securities portfolio for the years ended December 31, 2004, 2003, and 2002.

<TABLE>
<CAPTION>

                                                                               Year Ended December 31,
                                                                       -----------------------------------------
                                                                      2004              2003              2002
                                                                      ----              ----              ----
                                                                                   (In thousands)
<S>                                                                  <C>               <C>               <C>
Beginning balance...............................................     $  175            $ 583             $ 831
Purchases.......................................................         --               --                --
Sales proceeds..................................................         --              (98)              (44)
Repayments......................................................        (62)            (287)             (217)
Losses on sales.................................................         --               (4)               --
Premium and discount amortization, net..........................         (2)              (5)               (6)
Unrealized gains (losses) on securities available for sale......          2              (14)               19
                                                                     ------            -----             -----
Ending balance..................................................     $  113            $ 175             $ 583
                                                                     ======            =====             =====
</TABLE>

Sources of Funds

     General.  Deposits have  traditionally  been the Bank's  primary  source of
funds for use in lending and investment activities. In addition to deposits, the
Bank derives funds from  scheduled loan payments,  investment  maturities,  loan
prepayments,  retained earnings, income on earning assets and borrowings.  While
scheduled  loan  payments  and income on earning  assets are  relatively  stable
sources  of  funds,  deposit  inflows  and  outflows  can  vary  widely  and are
influenced  by  prevailing  interest  rates,  market  conditions  and  levels of
competition.  Borrowings  from  the  FHLB  of  Indianapolis  may be  used in the
short-term to compensate for  reductions in deposits or deposit  inflows at less
than projected levels.

                                       15
<PAGE>

     Deposits. Deposits are attracted, principally from within Jefferson County,
through the offering of a broad selection of deposit instruments including fixed
rate  certificates  of  deposit,  NOW,  MMDAs  and other  transaction  accounts,
individual retirement accounts and savings accounts.  The Bank actively solicits
and advertises for deposits  outside of Jefferson  County.  Since the opening of
our branch in Charlestown, Indiana (Clark County), and the branch in Carrollton,
Kentucky  (Carroll County),  the Bank's market area has expanded.  Deposits will
come from all of our market area. Deposit account terms vary, with the principal
differences  being the minimum  balance  required,  the amount of time the funds
remain on deposit  and the  interest  rate.  The Bank does not pay a fee for any
deposits it receives.

     Interest rates paid, maturity terms,  service fees and withdrawal penalties
are  established  by the Bank on a periodic  basis.  Determination  of rates and
terms are predicated on funds acquisition and liquidity requirements, rates paid
by competitors,  growth goals and applicable  regulations.  The Bank relies,  in
part, on customer  service and  long-standing  relationships  with  customers to
attract  and retain its  deposits,  but also  closely  prices  its  deposits  in
relation to rates offered by its competitors.

     The flow of  deposits  is  influenced  significantly  by  general  economic
conditions,   changes  in  money  market  and  prevailing   interest  rates  and
competition.  The variety of deposit accounts offered by the Bank has allowed it
to be competitive in obtaining funds and to respond with  flexibility to changes
in  consumer  demand.  The  Bank  has  become  more  susceptible  to  short-term
fluctuations  in deposit  flows as  customers  have  become more  interest  rate
conscious.  The Bank  manages  the pricing of its  deposits in keeping  with its
asset/liability   management  and   profitability   objectives.   Based  on  its
experience,  the Bank  believes  that its NOW and  MMDAs are  relatively  stable
sources of  deposits.  However,  the ability of the Bank to attract and maintain
certificates  of deposit,  and the rates paid on these  deposits,  have been and
will continue to be significantly affected by market conditions.

                                       16
<PAGE>

     An analysis of the Company's deposit accounts by type, maturity and rate at
December 31, 2004 is as follows:
<TABLE>
<CAPTION>

                                                         Minimum       Balance at                       Weighted
                                                         Opening      December 31,        % of           Average
Type of Account                                          Balance          2004          Deposits          Rate
---------------                                        ----------     ------------      --------        ---------
                                                                         (Dollars in thousands)
Withdrawable:
<S>                                                     <C>              <C>               <C>             <C>
   Non-interest bearing accounts.................       $    100         $15,066           8.83%           0.00%
   Savings accounts..............................             50          28,825          16.90            0.49
   MMDA..........................................            100          12,309           7.22            0.81
   NOW accounts..................................            100          23,680          13.89            1.28
                                                                         -------         ------
     Total withdrawable..........................                         79,880          46.84            0.68

Certificates (original terms):
   I.R.A.........................................            250           7,000           4.10            3.15
   Brokerage CD..................................         99,000           2,229           1.31            3.17
   3 months......................................          2,500              --           0.00            0.00
   6 months......................................          2,500           1,140           0.67            1.32
   9 months......................................          2,500             294           0.17            1.73
   12 months.....................................            500          19,808          11.62            1.79
   15 months.....................................            500           4,600           2.70            1.83
   18 months.....................................            500           1,382           0.81            1.98
   24 months.....................................            500           2,514           1.47            2.51
   30 months ....................................            500           3,266           1.92            2.88
   36 months.....................................            500           2,661           1.56            3.32
   48 months.....................................            500           1,634           0.96            3.83
   60 months.....................................            500           8,977           5.26            4.53
Jumbo certificates...............................        100,000          35,153          20.61            2.28
                                                                        --------         ------
Total certificates...............................                         90,658          53.16            2.53
                                                                        --------         ------
Total deposits                                                          $170,538         100.00%           1.66%
                                                                        ========         ======

</TABLE>

     The  following  table sets forth by various  interest rate  categories  the
composition of time deposits of the Bank at the dates indicated:
<TABLE>
<CAPTION>


                                                                                    At December 31,
                                                                       ------------------------------------------
                                                                        2004             2003              2002
                                                                        ----             ----              ----
                                                                                    (In thousands)
<C>     <C>                                                            <C>              <C>               <C>
0.00 to 3.00%.................................................         $64,354          $67,726           $63,261
3.01 to 5.00%.................................................          21,714           19,259            21,412
5.01 to 6.00%.................................................           4,474            5,489             8,187
6.01 to 7.00%.................................................              16               28             2,346
7.01 to 8.00%.................................................             100              100               322
                                                                       -------          -------           -------
         Total                                                         $90,658          $94,602           $95,528
                                                                       =======          =======           =======
</TABLE>

                                       17
<PAGE>


     The following table  represents,  by various interest rate categories,  the
amounts of time  deposits  maturing  during  each of the three  years  following
December  31,  2004.  Matured  certificates,  which have not been  renewed as of
December 31, 2004, have been allocated based upon certain rollover assumptions.

<TABLE>
<CAPTION>

                                                                     Amounts at December 31, 2004
                                                      ----------------------------------------------------------
                                                      One Year           Two            Three       Greater Than
                                                       or Less          Years           Years        Three Years
                                                      --------          -----           -----       ------------
                                                                           (In thousands)
<C>     <C>                                            <C>            <C>             <C>            <C>
0.00 to 3.00%....................................      $52,879        $  8,743        $  1,933       $  1,657
3.01 to 5.00%....................................        4,425           1,250           6,585          8,597
5.01 to 6.00%....................................          700             546           3,227             --
6.01 to 7.00%....................................           16              --              --             --
7.01 to 8.00%....................................          100              --              --             --
                                                       -------        --------        --------       --------
         Total                                         $58,120        $ 10,539        $ 11,745       $ 10,254
                                                       =======        ========        ========       ========

</TABLE>

     The  following  table  indicates  the amount of the Bank's  jumbo and other
certificates  of deposit of $100,000 or more by time remaining until maturity as
of December 31, 2004.

<TABLE>
<CAPTION>

                                                                             At December 31, 2004
                                                                             --------------------
Maturity Period                                                                  (In thousands)
---------------
<S>                                                                                  <C>
   Three months or less....................................................          $15,135
   Greater than three months through six months............................            2,395
   Greater than six months through twelve months...........................            9,347
   Over twelve months......................................................            8,276
                                                                                     -------
                  Total                                                              $35,153
                                                                                     =======
</TABLE>

                                       18
<PAGE>

     The following table sets forth the dollar amount of savings deposits in the
various types of deposits  offered by the Bank at the dates  indicated,  and the
amount of  increase or  decrease  in such  deposits as compared to the  previous
period.

<TABLE>
<CAPTION>
                                 Balance                Increase       Balance                 Increase      Balance
                                   at                  (Decrease)         at                  (Decrease)       at
                              December 31,    % of        from       December 31,     % of      from       December 31,    % of
                                  2004      Deposits      2003           2003       Deposits    2002           2002       Deposits
                             -------------  --------   ----------    ------------   --------- ---------   -------------   - -------
                                                            (Dollars in thousands)
Withdrawable:
   Non-interest bearing
<S>                           <C>             <C>       <C>          <C>              <C>    <C>          <C>                <C>
     accounts................ $  15,066       8.83%     $ 3,238      $  11,828        6.6%   $   713      $  11,115          6.9%
   Savings accounts..........    28,825      16.90        2,347         26,478       14.7      1,940         24,538         15.2
   MMDA......................    12,309       7.22      (14,048)        26,357       14.6     14,457         11,900          7.3
   NOW accounts..............    23,680      13.89        2,991         20,689       11.5      1,941         18,748         11.6
                             ----------    -------      -------      ---------      -----    -------      ---------        -----
     Total withdrawable......    79,880      46.84       (5,472)        85,352       47.4     19,051         66,301         41.0
Certificates (original terms):
   I.R.A.....................     7,000       4.10          (93)         7,093        3.9        432          6,661          4.1
   Brokerage CD..............     2,229       1.31        2,229             --         .0         --             --           .0
   3 months..................        --       0.00          (28)            28         .0       (556)           584           .4
   6 months..................     1,140       0.67       (1,051)         2,191        1.2        896          1,295           .8
   9 months..................       294       0.17           77            217         .1       (330)           547           .3
   12 months.................    19,808      11.62        1,585         18,223       10.1        908         17,315         10.7
   15 months.................     4,600       2.70       (4,780)         9,380        5.2      2,177          7,203          4.4
   18 months.................     1,382       0.81         (664)         2,046        1.1       (294)         2,340          1.4
   24 months.................     2,514       1.47       (2,080)         4,594        2.6     (2,782)         7,376          4.6
   30 months ................     3,266       1.92        1,666          1,600         .9       (214)         1,814          1.1
   36 months.................     2,661       1.56          744          1,917        1.1        327          1,590          1.0
   48 months.................     1,634       0.96          459          1,175         .7        (97)         1,272           .8
   60 months.................     8,977       5.26        1,448          7,529        4.2      1,899          5,630          3.5
Jumbo certificates...........    35,153      20.61       (3,456)        38,609       21.5     (3,292)        41,901         25.9
                               --------     ------      -------      ---------      -----    -------      ---------        -----
   Total certificates........    90,658      53.16       (3,944)        94,602       52.6       (926)        95,528         59.0
                               --------     ------      --------     ---------      -----    -------      ---------        -----
Total deposits                 $170,538     100.00%     $(9,416)     $ 179,954      100.0%   $18,125      $ 161,829        100.0%
                               ========     ======      =======      =========      =====    =======      =========        =====
</TABLE>

     Borrowings.  The Bank focuses on  generating  high  quality  loans and then
seeks the best source of funding from deposits,  investments,  or borrowings. At
December 31, 2004,  the Bank had $65.0 million in FHLB  advances.  The Bank does
not  anticipate  any  difficulty in obtaining  advances  appropriate to meet its
requirements in the future.

     The following table presents  certain  information  relating to the Holding
Company's and the Bank's borrowings at or for the years ended December 31, 2004,
2003, and 2002.

<TABLE>
<CAPTION>
                                                                                 At or for the Year
                                                                      ------------------------------------------
                                                                                  Ended December 31,
                                                                       2004              2003              2002
                                                                       ----              ----              ----
                                                                                   (In thousands)
FHLB Advances and Other Borrowed Money:
<S>                                                                   <C>              <C>               <C>
   Outstanding at end of period...............................        $94,600          $50,000           $40,000
   Average balance outstanding for period.....................         65,468           45,636            32,475
   Maximum amount outstanding at any
     month-end during the period..............................         94,600           50,000            40,000
   Weighted average interest rate during the period...........           4.15%            4.58%             4.88%
   Weighted average interest rate at end of period............           4.00%            4.40%             4.48%
</TABLE>

Service Corporation Subsidiaries

     Office  of  Thrift   Supervision   regulations   permit   federal   savings
associations  to invest in the capital  stock,  obligations  or other  specified
types of securities of subsidiaries (referred to as "service  corporations") and
to make loans to such subsidiaries and joint ventures in which such subsidiaries
are  participants in an aggregate


                                       19
<PAGE>

amount not exceeding 2% of the  association's  assets,  plus an additional 1% of
assets if the  amount  over 2% is used for  specified  community  or  inner-city
development  purposes.  In addition,  federal regulations permit associations to
make specified types of loans to such  subsidiaries  (other than special purpose
finance  subsidiaries) in which the association owns more than 10% of the stock,
in an aggregate amount not exceeding 50% of the association's regulatory capital
if  the  association's  regulatory  capital  is in  compliance  with  applicable
regulations.

     A savings association that acquires a non-savings  association  subsidiary,
or that  elects to conduct a new  activity  within a  subsidiary,  must give the
Federal Deposit Insurance Corporation,  the Office of Thrift Supervision and the
Department of Financial  Institutions  at least 30 days advance  written notice.
The Federal  Deposit  Insurance  Corporation  may, after  consultation  with the
Office of Thrift  Supervision,  prohibit  specified  activities if it determines
such activities pose a serious threat to the Savings Association Insurance Fund.
Moreover,  a savings  association  must deduct  from  capital,  for  purposes of
meeting the core capital,  tangible capital and risk-based capital requirements,
its entire  investment in and loans to a subsidiary  engaged in  activities  not
permissible for a national bank (other than  exclusively  agency  activities for
its customers or mortgage banking subsidiaries).

     The Bank currently owns one subsidiary,  Madison First Service Corporation,
which was  incorporated  under the laws of the State of Indiana on July 3, 1973.
Madison First Service  Corporation  currently  holds land but does not otherwise
engage in significant business activities.

Financing Subsidiary

     On March 13,  2003,  the  Company  formed the "RIVR  Statutory  Trust I," a
statutory trust formed under  Connecticut  law, and filed a Certificate of Trust
with the Secretary of the State of Connecticut. The sole purpose of the Trust is
to issue and sell certain securities representing undivided beneficial interests
in the  assets of the  Trust  and to invest  the  proceeds  thereof  in  certain
debentures of the Company.

Employees

     As of December 31, 2004, the Bank employed 66 persons on a full-time  basis
and 14 persons on a part-time  basis.  None of the employees is represented by a
collective  bargaining group.  Management considers its employee relations to be
good.

                                  COMPETITION

     The Bank  originates  most of its loans to and accepts most of its deposits
from residents of Jefferson and Clark  Counties,  Indiana,  and Carroll  County,
Kentucky.   The  Bank  is  subject  to   competition   from  various   financial
institutions,  including  state and national  banks,  state and federal  savings
associations, credit unions and certain nonbanking consumer lenders that provide
similar  services  in  Jefferson  County  and which  have  significantly  larger
resources available to them than does the Bank. In total, there are 11 financial
institutions located in Jefferson County, Indiana,  including the Bank. The Bank
also competes with money market funds with respect to deposit  accounts and with
insurance companies with respect to individual retirement accounts.

     The primary  factors  influencing  competition  for  deposits  are interest
rates,  service and convenience of office locations.  The Bank competes for loan
originations  primarily  through  the  efficiency  and  quality of  services  it
provides borrowers and through interest rates and loan fees charged. Competition
is affected by, among other things, the general  availability of lendable funds,
general and local economic  conditions,  current  interest rate levels and other
factors that are not readily predictable.

                                       20
<PAGE>

                                   REGULATION

General

     As a  federally-chartered,  SAIF-insured savings  association,  the Bank is
subject to extensive  regulation by the OTS and the FDIC. For example,  the Bank
must obtain OTS  approval  before it may engage in certain  activities  and must
file reports with the OTS regarding its activities and financial condition.  The
OTS periodically  examines the Bank's books and records and, in conjunction with
the FDIC in certain  situations,  has examination and enforcement  powers.  This
supervision  and  regulation  are  intended  primarily  for  the  protection  of
depositors and the federal deposit  insurance funds. A savings  association must
pay a semi-annual  assessment to the OTS based upon a marginal  assessment  rate
that decreases as the asset size of the savings association increases, and which
includes a fixed-cost  component  that is assessed on all savings  associations.
The  assessment  rate that  applies to a savings  association  depends  upon the
institution's size,  condition and the complexity of its operations.  The Bank's
semi-annual assessment is approximately $32,000.

     The Bank is also subject to federal and state regulation as to such matters
as loans to officers,  directors, or principal shareholders,  required reserves,
limitations as to the nature and amount of its loans and investments, regulatory
approval  of any  merger  or  consolidation,  issuances  or  retirements  of its
securities,  and  limitations  upon  other  aspects of  banking  operations.  In
addition,  the  Bank's  activities  and  operations  are  subject to a number of
additional  detailed,  complex and sometimes  overlapping federal and state laws
and regulations.  These include state usury and consumer credit laws, state laws
relating to fiduciaries,  the Federal Truth-In-Lending Act and Regulation Z, the
Federal Equal Credit Opportunity Act and Regulation B, the Fair Credit Reporting
Act, the Community Reinvestment Act, anti-redlining legislation,  antitrust laws
and   regulations   protecting  the   confidentiality   of  consumer   financial
information.

Savings and Loan Holding Company Regulation

     As the holding  company for the Bank, the Holding Company is regulated as a
"non-diversified  savings and loan  holding  company"  within the meaning of the
Home  Owners'  Loan Act,  as amended  ("HOLA"),  and is  subject  to  regulatory
oversight by the Director of the OTS. As such, the Holding Company is registered
with  the  OTS  and  is  thereby  subject  to  OTS  regulations,   examinations,
supervision  and reporting  requirements.  As a subsidiary of a savings and loan
holding  company,  the Bank is subject to certain  restrictions  in its dealings
with the Holding  Company and with other  companies  affiliated with the Holding
Company.

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

     The  Holding  Company  currently  operates  as a unitary  savings  and loan
holding company.  Prior to the enactment of the Gramm-Leach-Bliley Act (the "GLB
Act") in 1999, there were no restrictions on the permissible business activities
of a unitary savings and loan holding company.  The GLB Act included a provision
that prohibits any new unitary  savings and loan holding  company,  defined as a
company that  acquires a thrift after May 4, 1999,  from  engaging in commercial
activities.  This provision also includes a grandfather  clause,  however,  that
permits a company that was a savings and loan holding company as of May 4, 1999,
or had an application to become a savings and loan holding  company on file with
the OTS as of that date,  to  acquire  and  continue  to control a thrift and to
continue  to  engage in  commercial  activities.  Because  the  Holding  Company
qualifies  under  this  grandfather  provision,  the GLB Act did not  affect the
Holding Company's authority to engage in diversified business activities.

                                       21
<PAGE>

     If  the  Holding  Company  were  to  acquire  control  of  another  savings
association  other than through a merger or other business  combination with the
Bank, the Holding  Company would  thereupon  become a multiple  savings and loan
holding  company.  Except where such acquisition is pursuant to the authority to
approve  emergency  thrift   acquisitions  and  where  each  subsidiary  savings
association meets the QTL test, the activities of the Holding Company and any of
its subsidiaries (other than the Bank or other subsidiary savings  associations)
would  thereafter be subject to further  restrictions.  The HOLA provides  that,
among other things,  a multiple savings and loan holding company may not, either
directly  or acting  through  a  subsidiary  that is not a savings  association,
conduct,   any  business  activity  other  than  (i)  furnishing  or  performing
management  services for a subsidiary  savings  association,  (ii) conducting an
insurance agency or escrow  business,  (iii) holding,  managing,  or liquidating
assets owned by or acquired from a subsidiary savings association,  (iv) holding
or managing properties used or occupied by a subsidiary savings association, (v)
acting as trustee under deeds of trust,  (vi) those activities in which multiple
savings and loan holding  companies were  authorized (by regulation) to directly
engage on March 5, 1987,  or (vii)  those  activities  authorized  by the FRB as
permissible  for bank  holding  companies,  unless  the  Director  of the OTS by
regulation  prohibits  or limits such  activities  for savings and loan  holding
companies.  Those activities  described in (viii) above must also be approved by
the Director of the OTS before a multiple  savings and loan holding  company may
engage in such activities.

     The  Director of the OTS may also  approve  acquisitions  resulting  in the
formation of a multiple  savings and loan holding company which controls savings
associations  in more than one state,  if the multiple  savings and loan holding
company involved controls a savings  association which operated a home or branch
office in the state of the association to be acquired as of March 5, 1987, or if
the  laws of the  state in which  the  association  to be  acquired  is  located
specifically permit associations to be acquired by state-chartered  associations
or savings and loan holding  companies  located in the state where the acquiring
entity is located (or by a holding  company that controls  such  state-chartered
savings associations).  Also, the Director of the OTS may approve an acquisition
resulting in a multiple  savings and loan holding  company  controlling  savings
associations  in more than one  state in the case of  certain  emergency  thrift
acquisitions.

     Notwithstanding  the above rules as to permissible  business  activities of
savings and loan holding  companies,  if the savings  association  subsidiary of
such a holding  company fails to meet the Qualified  Thrift Lender ("QTL") test,
then such holding  company would be deemed to be a bank holding  company subject
to all of the  provisions  of the Bank  Holding  Company  Act of 1956 and  other
statutes  applicable  to bank  holding  companies,  to the same extent as if the
Holding  Company  were a bank  holding  company  and the Bank  were a bank.  See
"-Qualified  Thrift Lender." At December 31, 2004, the Bank's asset  composition
was in excess of that required to qualify as a Qualified Thrift Lender.

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

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

                                       22
<PAGE>

Federal Home Loan Bank System

     The Bank is a member of the FHLB  system,  which  consists  of 12  regional
banks.  The Federal  Housing  Finance Board  ("FHFB"),  an  independent  agency,
controls the FHLB System  including  the FHLB of  Indianapolis.  The FHLB System
provides a central credit facility primarily for member financial  institutions.
At December 31, 2004, the Bank's investment in stock of the FHLB of Indianapolis
was $3.3  million.  For the fiscal year ended  December  31,  2004,  the FHLB of
Indianapolis paid approximately $122,000 in dividends to the Bank, for an annual
rate of 4.3%.

     All 12 FHLBs are required to provide funds to establish  affordable housing
programs through direct loans or interest subsidies on advances to members to be
used for  lending at  subsidized  interest  rates for  low-and  moderate-income,
owner-occupied  housing projects,  affordable rental housing,  and certain other
community  projects.  These contributions and obligations could adversely affect
the value of FHLB stock in the future.  A  reduction  in the value of such stock
may result in a corresponding reduction in the Bank's capital.

     The FHLB of Indianapolis serves as a reserve or central bank for its member
institutions.  It is funded  primarily  from  proceeds  derived from the sale of
consolidated  obligations  of the FHLB System.  It makes  advances to members in
accordance with policies and procedures established by the FHLB and the Board of
Directors of the FHLB of Indianapolis.

     All FHLB  advances  must be  fully  secured  by  sufficient  collateral  as
determined by the FHLB.  Eligible  collateral  includes first mortgage loans not
more  than  90 days  delinquent  or  securities  evidencing  interests  therein,
securities (including mortgage-backed  securities) issued, insured or guaranteed
by the federal government or any agency thereof, cash or FHLB deposits,  certain
small business and  agricultural  loans of smaller  institutions and real estate
with readily  ascertainable  value in which a perfected security interest may be
obtained.  Other forms of collateral may be accepted as additional  security or,
under  certain  circumstances,  to renew  outstanding  advances.  All  long-term
advances are required to provide funds for  residential  home  financing and the
FHLB has  established  standards of community  service that members must meet to
maintain access to long-term advances.

     Interest rates charged for advances vary depending upon maturity,  the cost
of funds to the FHLB of Indianapolis and the purpose of the borrowing.

Insurance of Deposits

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

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

     In addition to the assessment for deposit insurance,  savings  institutions
are  required  to  pay on  bonds  issued  in the  late  1980s  by the  Financing
Corporation  ("FICO"),  which  is a  federally-chartered  corporation  that  was
organized to provide some of the  financing to resolve the thrift  crisis in the
1980s.  Prior to 2000,


                                       23
<PAGE>

FICO payments for SAIF members approximated 6.10 basis points, while BIF members
paid 1.22 basis points.  By law,  payments on FICO  obligations have been shared
equally between BIF members and SAIF members since January 1, 2000. From time to
time,  legislation  may be introduced  before  Congress that would  increase the
deposit insurance assessments paid by all financial institutions,  including the
Bank.

     Although Congress has considered  merging the SAIF and the BIF, until then,
savings  associations  with SAIF deposits may not transfer deposits into the BIF
system without  paying  various exit and entrance  fees.  Such exit and entrance
fees need not be paid if a SAIF institution converts to a bank charter or merges
with a bank, as long as the resulting bank continues to pay applicable insurance
assessments to the SAIF, and as long as certain other conditions are met.

Savings Association Regulatory Capital

     Currently,  savings  associations  are  subject to three  separate  minimum
capital-to-assets  requirements:  (i) a leverage limit,  (ii) a tangible capital
requirement,  and (iii) a risk-based  capital  requirement.  The leverage  limit
requires that savings  associations  maintain  "core  capital" of at least 3% of
total assets. Core capital is generally defined as common  shareholders'  equity
(including  retained  earnings),  noncumulative  perpetual  preferred  stock and
related surplus,  certain minority equity interests in subsidiaries,  qualifying
supervisory  goodwill,  purchased mortgage servicing rights and purchased credit
card relationships  (subject to certain limits) less nonqualifying  intangibles.
The OTS requires a core capital level of 3% of total adjusted assets for savings
associations  that  receive  the  highest  supervisory  rating  for  safety  and
soundness,  and no less than 4% for all other  savings  associations.  Under the
tangible  capital  requirement,  a savings  association  must maintain  tangible
capital  (core capital less all  intangible  assets  except  purchased  mortgage
servicing  rights which may be included after making the above-noted  adjustment
in an amount up to 100% of tangible  capital) of at least 1.5% of total  assets.
Under the risk-based capital  requirements,  a minimum amount of capital must be
maintained by a savings  association  to account for the relative risks inherent
in the type and amount of assets held by the savings association. The risk-based
capital requirement  requires a savings association to maintain capital (defined
generally for these purposes as core capital plus general  valuation  allowances
and  permanent  or maturing  capital  instruments  such as  preferred  stock and
subordinated  debt  less  assets  required  to be  deducted)  equal  to  8.0% of
risk-weighted  assets.  Assets are  ranked as to risk in one of four  categories
(0-100%).  A credit  risk-free  asset,  such as  cash,  requires  no  risk-based
capital,  while an asset with a significant  credit risk,  such as a non-accrual
loan,  requires a risk  factor of 100%.  Moreover,  a savings  association  must
deduct from capital, for purposes of meeting the core capital,  tangible capital
and risk-based  capital  requirements,  its entire  investment in and loans to a
subsidiary engaged in activities not permissible for a national bank (other than
exclusively   agency   activities   for  its   customers  or  mortgage   banking
subsidiaries). At December 31, 2004, the Bank was in compliance with all capital
requirements imposed by law.

     The OTS issued a final rule in 1993  which  sets  forth a  methodology  for
calculating an interest rate risk  component to be used by savings  associations
in calculating  regulatory  capital.  The OTS delayed the implementation of this
rule,  however,  and in 2002 deleted this interest rate risk  component from the
capital requirements applicable to savings associations.

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

                                       24
<PAGE>

Prompt Corrective Regulatory Action

     The  Federal  Deposit  Insurance   Corporation   Improvement  Act  of  1991
("FedICIA")   requires,   among  other  things,  that  federal  bank  regulatory
authorities take "prompt corrective action" with respect to institutions that do
not meet minimum capital requirements.  For these purposes,  FedICIA establishes
five capital tiers: well capitalized, adequately capitalized,  undercapitalized,
significantly undercapitalized and critically undercapitalized.  At December 31,
2004,  the Bank was  categorized as "well  capitalized,"  meaning that its total
risk-based  capital  ratio  exceeded  10%, its Tier I risk-based  capital  ratio
exceeded  6%,  its  leverage  ratio  exceeded  5%,  and it was not  subject to a
regulatory order, agreement or directive to meet and maintain a specific capital
level for any capital measure.

     The FDIC may order savings  associations which have insufficient capital to
take corrective actions. For example, a savings association which is categorized
as  "undercapitalized"  would be  subject  to  growth  limitations  and would be
required  to submit a capital  restoration  plan,  and a  holding  company  that
controls  such a savings  association  would be required to  guarantee  that the
savings   association   complies  with  the  restoration  plan.   "Significantly
undercapitalized"   savings   associations   would  be  subject  to   additional
restrictions.  Savings  associations  deemed  by  the  FDIC  to  be  "critically
undercapitalized"  would  be  subject  to  the  appointment  of  a  receiver  or
conservator.

Dividend Limitations

     The OTS also  restricts the amount of "capital  distributions"  that may be
made by  savings  associations.  The  applicable  regulation  defines  a capital
distribution  as  a  distribution  of  cash  or  other  property  to  a  savings
association's  owners,  made on  account  of their  ownership.  This  definition
includes a savings association's  payment of cash dividends to shareholders,  or
any payment by a savings association to repurchase, redeem, retire, or otherwise
acquire  any of its  shares  or debt  instruments  that  are  included  in total
capital,  and any extension of credit to finance an  affiliate's  acquisition of
those shares or interests.  The amended  regulation  does not apply to dividends
consisting  only of a savings  association's  shares or rights to purchase  such
shares.

     The regulation  exempts certain savings  associations  from filing either a
notice or an  application  with the OTS before making any capital  distribution,
and  requires a savings  association  to file an  application  for approval of a
proposed  capital  distribution  with the OTS if the association is not eligible
for expedited  treatment under 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  savings  association's  net income  for that year to date plus the  savings
association's retained net income for the preceding two years (the "retained net
income  standard").  A savings  association  must also file an  application  for
approval  of  a  proposed  capital   distribution  if,  following  the  proposed
distribution, the association 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 association and the OTS or the FDIC.

     The  regulation  requires  a  savings  association  to file a  notice  of a
proposed  capital  distribution  in lieu of an application if the association or
the proposed  capital  distribution do not meet the conditions  described above,
and:  (1) the  savings  association  will not be at least well  capitalized  (as
defined  under the OTS  prompt  corrective  action  regulations)  following  the
capital  distribution;  (2) the capital distribution would reduce the amount of,
or retire any part of the savings  association's  common or preferred  stock, or
retire any part of debt instruments such as notes or debentures  included in the
association's  capital  under the OTS  capital  regulation;  or (3) the  savings
association is a subsidiary of a savings and loan holding  company.  Because the
Bank is a  subsidiary  of a  savings  and  loan  holding  company,  this  latter
provision  requires,  at a minimum,  that the Bank file a notice with the OTS 30
days before making any capital distributions to the Holding Company.



                                       25
<PAGE>

     In addition to these regulatory restrictions, the Bank's Plan of Conversion
imposes  additional  limitations on the amount of capital  distributions  it may
make to the  Holding  Company.  The  Plan of  Conversion  requires  the  Bank to
establish and maintain a liquidation account for the benefit of Eligible Account
Holders and  Supplemental  Eligible  Account Holders and prohibits the Bank from
making capital  distributions  to the Holding  Company if its net worth would be
reduced below the amount required for the liquidation account.

Limitations on Rates Paid for Deposits

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

Liquidity

     The  Financial  Regulatory  Relief  and  Economic  Efficiency  Act of  2000
repealed the former statutory requirement that all savings associations maintain
an average daily  balance of liquid assets in a minimum  amount of not less than
4% or more than 10% of their withdrawable  accounts plus short-term  borrowings.
The OTS  adopted an  interim  final  rule in March  2001 that  implemented  this
revised statutory  requirement,  although savings associations remain subject to
the OTS regulation that requires them to maintain sufficient liquidity to ensure
their safe and sound operation.

Safety and Soundness Standards

     The federal  banking  agencies  have  adopted  final  safety and  soundness
standards for all insured  depository  institutions.  The standards,  which were
issued in the form of  guidelines  rather than  regulations,  relate to internal
controls,  information  systems,  internal audit systems,  loan underwriting and
documentation,  compensation, interest rate exposure, asset quality and earnings
standards.  In general, the standards are designed to assist the federal banking
agencies  in  identifying   and  addressing   problems  at  insured   depository
institutions  before capital becomes  impaired.  If an institution fails to meet
these  standards,  the  appropriate  federal  banking  agency  may  require  the
institution to submit a compliance plan. Failure to submit a compliance plan may
result in enforcement proceedings.

Real Estate Lending Standards

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

                                       26
<PAGE>

Loans to One Borrower

     Under OTS  regulations,  the Bank may not make a loan or extend credit to a
single or related group of borrowers in excess of 15% of its unimpaired  capital
and surplus.  Additional amounts may be lent, not in excess of 10% of unimpaired
capital and surplus,  if such loans or extensions of credit are fully secured by
readily marketable collateral,  including certain debt and equity securities but
not including real estate.  In some cases, a savings  association may lend up to
30 percent of  unimpaired  capital and surplus to one  borrower  for purposes of
developing domestic residential housing, provided that the association meets its
regulatory  capital  requirements  and the OTS authorizes the association to use
this expanded lending authority. At December 31, 2004, the Bank did not have any
loans or  extensions  of credit to a single or  related  group of  borrowers  in
excess  of  its  lending   limits.   Management   does  not  believe   that  the
loans-to-one-borrower  limits  will  have a  significant  impact  on the  Bank's
business operations or earnings.

Qualified Thrift Lender

     Savings  associations must meet a QTL test that requires the association to
maintain  an  appropriate  level  of  qualified  thrift   investments   ("QTIs")
(primarily  residential  mortgages and related  investments,  including  certain
mortgage-related  securities)  and  otherwise  to qualify as a QTL. The required
percentage  of QTIs is 65% of  portfolio  assets  (defined  as all assets  minus
intangible  assets,  property used by the association in conducting its business
and liquid assets equal to 10% of total assets). Certain assets are subject to a
percentage  limitation  of  20%  of  portfolio  assets.  In  addition,   savings
associations may include shares of stock of the FHLBs,  FNMA, and FHLMC as QTIs.
Compliance  with the QTL test is  determined  on a monthly  basis in nine out of
every twelve months.  As of December 31, 2004,  the Bank was in compliance  with
its QTL requirement,  with approximately  77.3% of its portfolio assets invested
in QTIs.

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

Acquisitions or Dispositions and Branching

     The  Bank  Holding  Company  Act  specifically  authorizes  a bank  holding
company, upon receipt of appropriate regulatory approvals, to acquire control of
any savings association or holding company thereof wherever located.  Similarly,
a savings and loan  holding  company may  acquire  control of a bank.  Moreover,
federal  savings  associations  may  acquire  or  be  acquired  by  any  insured
depository  institution.   Regulations  promulgated  by  the  FRB  restrict  the
branching authority of savings associations  acquired by bank holding companies.
Savings  associations  acquired by bank  holding  companies  may be converted to
banks if they continue to pay SAIF premiums,  but as such they become subject to
branching and activity restrictions applicable to banks.

     Subject  to  certain  exceptions,  commonly-controlled  banks  and  savings
associations  must reimburse the FDIC for any losses suffered in connection with
a failed  bank or  savings  association  affiliate.  Institutions  are  commonly
controlled  if one is owned by another or if both are owned by the same  holding
company.  Such claims by the FDIC under this provision are subordinate to claims
of depositors,  secured creditors,  and holders of subordinated debt, other than
affiliates.

                                       27
<PAGE>

     The OTS has adopted  regulations which permit  nationwide  branching to the
extent  permitted by federal  statute.  Federal  statutes permit federal savings
associations to branch outside of their home state if the association  meets the
domestic  building  and loan  test in  ss.7701(a)(19)  of the Code or the  asset
composition  test of ss.7701(c) of the Code.  Branching that would result in the
formation of a multiple  savings and loan holding  company  controlling  savings
associations  in more  than one  state is  permitted  if the law of the state in
which the savings association to be acquired is located specifically  authorizes
acquisitions of its state-chartered associations by state-chartered associations
or their  holding  companies  in the state where the  acquiring  association  or
holding company is located. Moreover, Indiana banks and savings associations are
permitted  to  acquire  other  Indiana  banks and  savings  associations  and to
establish branches throughout Indiana.

     Finally, The Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994 (the "Riegle-Neal  Act") permits bank holding companies to acquire banks in
other states and, with state consent and subject to certain limitations,  allows
banks  to  acquire  out-of-state  branches  either  through  merger  or de  novo
expansion.  The State of Indiana  enacted  legislation  establishing  interstate
branching  provisions for Indiana  state-chartered  banks  consistent with those
established by the Riegle-Neal Act (the "Indiana  Branching  Law").  The Indiana
Branching  Law,  which became  effective in 1996,  authorizes  Indiana  banks to
branch   interstate  by  merger  or  de  novo  expansion,   provided  that  such
transactions  are not permitted to  out-of-state  banks unless the laws of their
home  states  permit  Indiana  banks to merge or  establish  de novo  banks on a
reciprocal basis.

Transactions with Affiliates

     The Bank is subject to Sections  22(h),  23A and 23B of the Federal Reserve
Act, which limits credit transactions  between a bank or savings association and
its executive officers and its affiliates. These provisions also prescribe terms
and conditions deemed to be consistent with safe and sound banking practices for
transactions  between a financial  institution and its affiliates,  and restrict
the types of  collateral  security  permitted  in  connection  with a  financial
institution's extension of credit to an affiliate.

Federal Securities Law

     The shares of Common Stock of the Holding Company have been registered with
the SEC under the Securities  Exchange Act (the "1934 Act"). The Holding Company
is subject to the information, proxy solicitation,  insider trading restrictions
and  other  requirements  of the 1934 Act and the  rules of the SEC  thereunder.
After three years following the Bank's  conversion to stock form, if the Holding
Company has fewer than 300 shareholders,  it may deregister its shares under the
1934 Act and cease to be subject to the foregoing requirements.

     Shares of Common  Stock held by persons who are  affiliates  of the Holding
Company may not be resold without  registration  unless sold in accordance  with
the resale  restrictions  of Rule 144 under the  Securities  Act of 1933. If the
Holding  Company meets the current public  information  requirements  under Rule
144,  each  affiliate  of the  Holding  Company  who  complies  with  the  other
conditions of Rule 144 (including  those that require the affiliate's sale to be
aggregated  with those of certain  other  persons)  would be able to sell in the
public market,  without  registration,  a number of shares not to exceed, in any
three-month  period,  the  greater  of (i) 1% of the  outstanding  shares of the
Holding  Company or (ii) the  average  weekly  volume of trading in such  shares
during the preceding four calendar weeks.

Sarbanes-Oxley Act of 2002

     On July 30, 2002,  President Bush signed into law the Sarbanes-Oxley Act of
2002 (the  "Sarbanes-Oxley"  Act). The Sarbanes-Oxley Act's stated goals include
enhancing  corporate  responsibility,  increasing  penalties for  accounting and
auditing  improprieties at publicly traded companies and protecting investors by
improving the accuracy and reliability of corporate  disclosures pursuant to the
securities laws.


                                       28
<PAGE>

The  Sarbanes-Oxley  Act  generally  applies to all  companies  that file or are
required to file periodic  reports with the Securities  and Exchange  Commission
under the 1934 Act.

     Among other  things,  the  Sarbanes-Oxley  Act  creates the Public  Company
Accounting  Oversight  Board as an independent  body subject to SEC  supervision
with responsibility for setting auditing,  quality control and ethical standards
for auditors of public companies.  The  Sarbanes-Oxley  Act also requires public
companies to make faster and more-extensive financial disclosures,  requires the
chief  executive  officer and chief  financial  officer of public  companies  to
provide signed  certifications  as to the accuracy and completeness of financial
information  filed  with the SEC,  and  provides  enhanced  criminal  and  civil
penalties for violations of the federal securities laws.

     The Sarbanes-Oxley  Act also addresses  functions and  responsibilities  of
audit  committees of public  companies.  The statute  makes the audit  committee
directly responsible for the appointment, compensation and oversight of the work
of the company's outside auditor, and requires the auditor to report directly to
the audit committee.  The  Sarbanes-Oxley Act authorizes each audit committee to
engage independent counsel and other advisors,  and requires a public company to
provide the appropriate  funding,  as determined by its audit committee,  to pay
the company's  auditors and any advisors that its audit committee  retains.  The
Sarbanes-Oxley Act also requires public companies to include an internal control
report and  assessment by  management,  along with an attestation to this report
prepared by the company's  registered  public  accounting  firm, in their annual
reports to stockholders.

     Although  the Holding  Company will incur  additional  expense in complying
with the  provisions of the  Sarbanes-Oxley  Act and the resulting  regulations,
management  does not expect that such  compliance will have a material impact on
the Holding Company's results of operations or financial condition.

Community Reinvestment Act Matters

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

Predatory Lending

     The Federal  Reserve  Board  issued a regulation  that became  effective on
October  1,  2002  that is  aimed  at  curbing  "predatory  lending."  The  term
"predatory lending"  encompasses a variety of practices,  but the term generally
is used to refer to abusive  lending  practices  involving  fraud,  deception or
unfairness.  Predatory lending typically  involves one or more of the following:
(i) making unaffordable loans based on the assets of the borrower rather than on
the  borrower's  ability to repay an obligation  ("asset-based  lending");  (ii)
inducing a borrower  to  refinance  a loan  repeatedly  in order to charge  high
points and fees each time the loan is  refinanced  ("loan  flipping");  or (iii)
engaging in fraud or deception to conceal the true nature of the loan obligation
from an  unsuspecting  or  unsophisticated  borrower.  The Federal Reserve Board
amended Regulation Z to broaden the scope of loans subject to the protections of
the Home  Ownership and Equity  Protection  Act of 1994  ("HOEPA").  Among other
things,  the  regulation  brings within the scope of HOEPA  first-lien  mortgage
loans with interest  rates that are at least 8 percentage  points above Treasury
securities having a comparable  maturity.  In addition,  the regulation requires
that the cost of optional insurance and similar debt protection products paid by
a borrower at closing be included in calculating  the finance charge paid by the
borrower.  HOEPA coverage is triggered if such finance  charges exceed 8 percent
of the total loan. Finally,  the regulation restricts creditors from engaging in
repeated refinancings of their own HOEPA loans over a short time period when the
transactions are not in the borrower's interest.  Lenders that violate


                                       29
<PAGE>

the rules face  cancellation of loans and penalties equal to the finance charges
paid. The Bank does not anticipate that these  provisions,  or any similar state
predatory lending regulations, will materially affect its financial condition or
results of operations.

USA Patriot Act of 2001

     On October 26, 2001, President Bush signed the USA Patriot Act of 2001. The
Patriot Act (the "Patriot Act") is intended to strengthen U.S. law enforcement's
and the  intelligence  communities'  abilities  to  work  cohesively  to  combat
terrorism  on a variety of fronts.  The  potential  impact of the Patriot Act on
financial institutions of all kinds is significant and wide ranging. The Patriot
Act contains sweeping anti-money laundering and financial transparency laws. The
Treasury  Department  issued final  regulations that became effective on June 9,
2003 that,  among other things,  require  institutions to incorporate into their
written money laundering plans a board-approved  customer identification program
implementing reasonable procedures for: (i) verifying the identity of any person
seeking to open an  account,  to the extent  reasonable  and  practicable;  (ii)
maintaining records of the information used to verify the person's identity; and
(iii)  determining  whether the person appears on any list of known or suspected
terrorists or terrorist  organizations.  The Bank does not anticipate that these
requirements will materially affect its operations.

                                    TAXATION

Federal Taxation

     Historically,  savings associations,  such as the Bank, have been permitted
to compute bad debt deductions  using either the bank  experience  method or the
percentage of taxable income method. However, for years beginning after December
31, 1995,  the Bank can no longer use the percentage of taxable income method of
computing  its  allowable  tax bad debt  deduction  and instead must compute its
allowable  deduction  using the  experience  method.  In addition,  the pre-1988
reserve,  for which no deferred  taxes have been  recorded,  will not have to be
recaptured  into income unless (i) the Bank no longer  qualifies as a bank under
the Code or (ii) excess dividends or  distributions  are paid out by the Bank or
the Bank redeems its own stock.

     Depending on the composition of its items of income and expense,  a savings
association may be subject to the alternative minimum tax. A savings association
must pay an alternative minimum tax equal to the amount (if any) by which 20% of
alternative minimum taxable income ("AMTI"),  as reduced by an exemption varying
with AMTI,  exceeds the regular tax due.  AMTI  equals  regular  taxable  income
increased or decreased by certain tax  preferences  and  adjustments,  including
depreciation  deductions in excess of that allowable for alternative minimum tax
purposes, tax-exempt interest on most private activity bonds issued after August
7, 1986  (reduced by any related  interest  expense  disallowed  for regular tax
purposes), the amount of the bad debt reserve deduction claimed in excess of the
deduction  based on the  experience  method  and 75% of the  excess of  adjusted
current  earnings over AMTI (before this  adjustment and before any  alternative
tax net  operating  loss).  AMTI may be reduced only up to 90% by net  operating
loss  carryovers,  but  alternative  minimum  tax paid can be  credited  against
regular tax due in later years.

     For federal income tax purposes,  the Company has been reporting its income
and expenses on the accrual method of accounting.  The Company's  federal income
tax returns [have not] been audited in recent years.

State Taxation

     The Company is subject to Indiana's  Financial Bank Tax ("IFBT"),  which is
imposed at a flat rate of 8.5% on apportioned "adjusted gross income." "Adjusted
gross  income," for purposes of IFBT,  begins with taxable  income as defined by
Section 63 of the Code and,  thus,  incorporates  federal  tax law to the extent
that it affects the  computation of taxable  income.  Federal  taxable income is
then adjusted by several Indiana  modifications.  Other  applicable  state taxes
include generally applicable sales and use taxes plus real and personal property
taxes.  The  Company's  state income tax returns have not been audited in recent
years.

                                       30
<PAGE>

     The Company is subject to Kentucky's Bank Franchise Tax ("KBFT"),  which is
imposed at a flat rate of 1.1% on apportioned "net capital." For purposes of the
KBFT, "net capital" is determined by (1) adding  together the Company's  paid-in
capital stock,  surplus,  undivided  profits,  capital reserves,  net unrealized
gains  or  losses  on  certain  securities,   and  cumulative  foreign  currency
translation  adjustments and (2) deducting from the total an amount equal to the
same percentage of the total as the book value of U.S.  obligations and Kentucky
obligations  bears  to the  book  value  of the  total  assets  of the  Company.
"Kentucky   obligations"   are  all   obligations   of  the   state,   counties,
municipalities,  taxing  districts,  and school  districts  that are exempt from
taxation  under  Kentucky law. Other  applicable  state taxes include  generally
applicable  sales  and use  taxes as well as  Kentucky  bank  deposit  and local
deposit  taxes which are  generally  imposed on the Company  with respect to the
deposits  of  Kentucky  resident  individuals  at  rates  of  .001%  and  .025%,
respectively.

Item 2. Description of Properties.

     The following table provides certain information with respect to the Bank's
offices as of December 31, 2004.
<TABLE>
<CAPTION>

                                                                         Net Book Value
                                                                          of Property,
                                                   Year                    Furniture,                Approximate
                                                 Opened or                Fixtures and                 Square
Description and Address                          Acquired                   Equipment                  Footage
-----------------------                          ---------               -------------               -----------
                                                                     (Dollars in thousands)

Locations in Madison, Indiana:
   Downtown Office:
<S>  <C>                                           <C>                      <C>                         <C>
     233 E. Main Street.....................       1952                     $   482                     9,110

   Drive-Through Branch:
     401 E. Main Street.....................       1984                         222                       375

   Hilltop Location:
     430 Clifty Drive.......................       1983                       3,464                    32,000

   Wal-mart Banking Center:
     567 Ivy Tech Drive.....................       1995                          33                       517

Location in Hanover, Indiana:
     10 Medical Plaza Drive.................       1995                         507                       656

Location in Charlestown, Indiana:
     1025 Highway 62........................       2002                         629                     1,500

Location in Sellersburg, Indiana:
     Highway 311............................       2002                       1,097                        --

Location in Carrollton, Kentucky:
     1501 Highland Avenue...................       2003                         364                     2,000
</TABLE>


     The Bank owns  computer  and data  processing  equipment  which is used for
transaction processing, loan origination,  and accounting. The net book value of
electronic  data  processing  equipment  owned  by the  Bank  was  approximately
$256,000 at December 31, 2004.

     The Bank operates 11 automated teller machines ("ATMs"), one at each office
location  (the main  office has two),  one at Hanover  College,  one at a Kroger
supermarket,  all in  Madison,  Indiana,  one at Great  Escape


                                       31
<PAGE>

Theatres in New Albany, Indiana, and two in Carrolton, Kentucky. The Bank's ATMs
participate in the Shazam(R) network.

     The Bank performs its own data processing and reporting services.

Item 3. Legal Proceedings.

     Neither  the Holding  Company nor the Bank is a party to any pending  legal
proceedings,  other than routine litigation  incidental to the Holding Company's
or the Bank's business.

Item 4. Submission of Matters to a Vote of Security Holders.

     No matter was  submitted  to a vote of the Holding  Company's  shareholders
during the quarter ended December 31, 2004.

Item 4.5. Executive Officers of the Registrant.

     The executive  officers of the Holding  Company are identified  below.  The
executive  officers  of the Bank are elected  annually by the Holding  Company's
Board of Directors.
<TABLE>
<CAPTION>

                                       Position with the                        Position
     Name                              Holding Company                          with the Bank
     --------------------              -------------------------------          --------------------------------
<S>                                    <C>                                      <C>
     Matthew P. Forrester              President and Chief                      President and Chief
                                       Executive Officer                        Executive Officer

     Lonnie D. Collins                 Secretary                                Secretary

     Larry C. Fouse                    Vice President of Finance                Vice President of Finance

     Deanna Liter                      Vice President of Data Services          Vice President of Data Services

     Barbara Eades                     Vice President of Retail Banking         Vice President of Retail Banking

     Loy Skirvin                       Vice President of Human                  Vice President of Human
                                       Resources                                Resources

     Mark A. Goley                     Vice President of Lending                Vice President of Lending

     Anthony D. Brandon                Vice President of Loan                   Vice President of Loan
                                       Administration                           Administration

     John Muessel                      Vice President - Trust Officer           Vice President - Trust Officer
</TABLE>

     Matthew P.  Forrester  (age 48) has served as the Bank and Holding  Company
President and Chief  Executive  Officer since October 1999.  Prior to that,  Mr.
Forrester  served  as the  Chief  Financial  Officer  for Home Loan Bank in Fort
Wayne,  Indiana and Senior Vice President and Treasurer for its holding company,
Home Bancorp. Prior to joining Home Loan Bank, Mr. Forrester was an examiner for
the Indiana Department of Financial Institutions.

     Lonnie D.  Collins  (age 56) has  served  as  Secretary  of the Bank  since
September  1994 and as Secretary of the Holding  Company since 1996. Mr. Collins
has also  practiced law since October 1975 and has served as the Bank's  outside
counsel since 1980.

     Larry C.  Fouse  (age 59) has served as the  Holding  Company's  Controller
since  1997.  From 1993 to 1997,  he served as the Chief  Financial  Officer and
Controller of Citizens and from 1989 to 1993 served as Citizens'  Vice President
and Operations Officer.

                                       32
<PAGE>

     Deanna Liter (age 41) has served as Vice  President of Data Services  since
1999.  From 1986 to 1997,  she was  manager  of the  Citizens'  Data  Processing
Department.

     Barbara Eades (age 55) has served as Vice President of Retail Banking since
2000.  From 1997 to 1999,  she was Branch  Manager of the downtown  branch.  She
served as Assistant Vice President for Madison First Federal from 1990 to 1996.

     Loy Skirvin (age 56) has served as Vice President of Human  Resources since
1998.  From 1991 to 1997, she was Human  Resources  Manager for a  manufacturing
firm.

     Mark A. Goley (age 49) has served as Vice  President of Loan Services since
1997. From 1989 to 1997, he served as Senior Loan Officer for Citizens.

     Anthony  D.  Brandon  (age  33)  has  served  as  Vice  President  of  Loan
Administration  since September of 2001. Prior to joining the Bank, he served as
President of Republic Bank of Indiana.

     John Muessel (age 52) has served as Vice  President - Trust  Officer  since
April of 2002. Prior to joining the Bank, he served as Trust Officer of National
City Bank of Indiana.

                                    PART II

Item 5. Market for Common Equity, Related Stockholder Matters and Small Business
        Issuer Purchases of Equity Securities.

     The Holding Company's common stock,  without par value ("Common Stock"), is
quoted on the National  Association of Securities  Dealers  Automated  Quotation
System ("NASDAQ"),  Small Cap Market, under the symbol "RIVR." Since the Holding
Company has no independent  operation or other  subsidiaries to generate income,
its ability to  accumulate  earnings  for the payment of cash  dividends  to its
shareholders  directly  depends upon the ability of the Bank to pay dividends to
the Holding Company and upon the earnings on its investment securities.

     Any dividend  distributions by the Bank to the Holding Company in excess of
current or  accumulated  earnings and profits will be treated for federal income
tax purposes as a distribution  from the Bank's  accumulated  bad debt reserves,
which could  result in  increased  federal  income tax  liability  for the Bank.
Moreover,  the  Bank  may not  pay  dividends  to the  Holding  Company  if such
dividends would result in the impairment of the liquidation  account established
in connection with the Conversion.

     Generally,  there  is no  OTS  regulatory  restriction  on the  payment  of
dividends by the Holding Company unless there is a determination by the Director
of the OTS that  there  is  reasonable  cause to  believe  that the  payment  of
dividends  constitutes  a serious  risk to the  financial  safety,  soundness or
stability of the Bank. The FDIC also has authority under current law to prohibit
a bank from paying dividends if, in its opinion,  the payment of dividends would
constitute  an unsafe  or  unsound  practice  in light of the  Bank's  financial
condition.  Indiana law, however, would prohibit the Holding Company from paying
a dividend, if, after giving effect to the payment of that dividend, the Holding
Company  would  not be able to pay its  debts as they  become  due in the  usual
course of business or the Holding  Company's total assets would be less than the
sum of its total  liabilities plus  preferential  rights of holders of preferred
stock, if any.

     Other information required by this item is incorporated by reference to the
material under the heading "Market Price of the Corporation's  Common Shares and
Related Shareholder Matters" on page 2 of the Holding Company's 2004 Shareholder
Annual Report (the "Shareholder Annual Report").

     Purchases  of common  stock made by or on behalf of the Company  during the
three months ended December 31, 2004, are set forth below:

                                       33
<PAGE>
<TABLE>
<CAPTION>
                                                                                                Maximum Number
                                                                                               (or Approximate
                                                                            Total Number of     Dollar Value)
                                                                           Shares (or Units)    of Shares (or
                                            Total                            Purchased as      Units) that May
                                          Number of          Average       Part of Publicly    Yet be Purchased
                                      Shares (or Units)   Price Paid Per   Announced Plans      Under the Plans
Period                                  Purchased (1)     Share (or Unit)     or Programs         or Programs
------------------------------------------------------------------------------------------------------------------------------------
October 2004
<S>   <C>          <C>   <C>                                                                           <C>
  (10/1/04 through 10/31/04)                 --                  --                  --                (2)
November 2004
  (11/1/04 through 11/30/04)             10,000              $21.88              10,000                (2)
December 2004
  (12/1/04 through 12/31/04)                 --                  --                  --                (2)
                                       ---------            ---------            ---------
  Total                                  10,000              $21.88              10,000                (2)
                                         ======              ======              ======
-----------------------------------------
</TABLE>
(1)  During the periods  reported  above,  there were no shares of Common  Stock
     which  were  repurchased  by the  Company  other  than  through a  publicly
     announced plan or program.

(2)  Up to 10% of total shares outstanding may be repurchased at a given time by
     the Company.

Item 5.5. Selected Consolidated Financial Data.

     The  information  required by this item is incorporated by reference to the
material under the heading  "Selected  Consolidated  Financial  Information  and
Other Data" on pages 3 and 4 of the Shareholder Annual Report.

Item 6. Management's Discussion and Analysis or Plan of Operation.

     The information required by this item is incorporated by reference to pages
5 through 15 of the Shareholder Annual Report.

Item 7. Financial Statements.

     The Holding Company's  Consolidated  Financial Statements and Notes thereto
contained  on  pages  19  through  42  in  the  Shareholder  Annual  Report  are
incorporated herein by reference.

Item  8.  Changes  In and  Disagreements  With  Accountants  on  Accounting  and
          Financial Disclosure.

     There are no such changes and disagreements to report during the applicable
period.

Item 8A. Controls and Procedures.

     (a)  Evaluation  of  disclosure  controls  and  procedures.  The  Company's
President and Vice President of Finance,  after evaluating the  effectiveness of
the  Company's  disclosure  controls  and  procedures  (as  defined in  Sections
13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended),  as
of the end of the most recent fiscal quarter  covered by this annual report (the
"Evaluation Date"), have concluded that as of the Evaluation Date, the Company's
disclosure controls and procedures were adequate and are designed to ensure that
material  information  relating  to the  Company  would  be made  known  to such
officers by others within the Company on a timely  basis,  except as provided in
the paragraph below.

     Our independent registered public accounting firm noted a material weakness
in the  design  or  operation  of the  Company's  internal  controls  that could
adversely affect the Company's ability to record, process,  summarize and report
financial  data  consistent  with the  assertions of management in the financial
statements.  The material weakness  identified by management and our independent
auditors was that the Company does not have adequate controls in place to ensure
that all accounts are properly  reconciled  and reviewed in a timely  manner and
that appropriate period-end entries are recorded.  Management of the Company has
reviewed these items with the Audit  Committee of the Board and is  implementing
procedures and plans to ensure that the above noted items are addressed.

     (b) Changes in internal controls.  There were no significant changes in the
Company's  internal  control over financial  reporting  identified in connection
with the Company's  evaluation  of controls  that occurred  during the Company's
last fiscal quarter that has  materially  affected,  or is reasonably  likely to
materially  affect,  the Company's  internal  control over financial  reporting,
except as provided in the preceding paragraph.


                                       34
<PAGE>

Item 8B. Other Information.

     There is no  information  that was  required to be  disclosed on a Form 8-K
during the fourth quarter, but was not reported.

                                    PART III


Item 9. Directors, Executive Officers, Promoters and Control Persons, Compliance
        with Section 16(a) of the Exchange Act.

     The  information  required  by this  item  with  respect  to  directors  is
incorporated  by  reference  to the  sections  of the  Holding  Company's  Proxy
Statement for its Annual  Shareholder  Meeting to be held on April 20, 2005 (the
"2005 Proxy  Statement") with the captions  "Proposal I - Election of Directors"
and "Section  16(a)  Beneficial  Ownership  Reporting  Compliance."  Information
concerning the Registrant's executive officers is included in Item 4.5 in Part I
of this report.

     The Company has a separate Audit  Committee  established in accordance with
Section  3(a)(58)(A)  of the  Securities  Exchange Act of 1934.  Its members are
Robert W.  Anger  (Chairman),  Fred W.  Koehler,  Jonnie L.  Davis,  Michael  J.
Hensley, L. Sue Livers and Charles J. McKay.

     The Board of Directors of the Company has determined  that the Company does
not  have an  "audit  committee  financial  expert,"  as  defined  in 17 CFR ss.
228.401(e)(2),  serving on its Audit  Committee.  The Board has  selected  Audit
Committee members based on the Board's  determination that they are qualified to
oversee the  accounting  and  financial  reporting  processes of the Company and
audits of the Company's financial statements.

     The Company has adopted a code of ethics that applies, among other persons,
to its principal  executive  officer,  principal  financial  officer,  principal
accounting officer or controller,  or persons  performing  similar functions.  A
copy of that Code of Ethics was filed as an exhibit to the Company's Form 10-KSB
filed for the year ended December 31, 2003.

Item 10. Executive Compensation.

     The   information   required  by  this  item  with   respect  to  executive
compensation  is  incorporated  by  reference  to the  section of the 2005 Proxy
Statement  with the caption  "Proposal I - Election  of  Directors -  Management
Remuneration and Related Transactions."

Item 11.  Security  Ownership of Certain  Beneficial  Owners and  Management and
          Related Shareholder Matters.

     The  information  required by this item is incorporated by reference to the
sections of the 2005 Proxy  Statement with the captions  "Voting  Securities and
Principal Holders Thereof" and "Proposal I - Election of Directors."

     The following table sets forth certain information pertaining to the Bank's
equity compensation plans:

                                       35
<PAGE>
<TABLE>
<CAPTION>

                                        Equity Compensation Plan Information

                                                                                           Number of securities
                                   Number of securities                                   remaining available for
                                to be issued upon exercise       Weighted-average          future issuance under
                                  of outstanding options,        exercise price of          equity compensation
                                 warrants and rights as of     outstanding options,     plans (excluding securities
                                     December 31, 2004          warrants and rights      reflected in Column (a))
Plan Category                               (a)                        (b)                        (c)
--------------------------------------------------------------------------        ---------------------------------------
Equity compensation plans
 approved by security
<S>                                     <C>      <C>                <C>     <C>                 <C>      <C>
 holders                                110,922  (1)                $8.13   (1)                 77,736   (1)
                                          6,270  (2)                   --   (2)                 16,584   (2)
Equity compensation plans
 not approved by
 security holders                            --                        --                           --
                                        -------                     -----                       ------
Total                                   117,192                     $8.13   (3)                 94,320
                                        =======                     =====                       ======
--------------------------------------------
</TABLE>

(1)  River Valley Bancorp Stock Option Plan.

(2)  River Valley  Bancorp  Recognition  and Retention  Plan and Trust  ("RRP").
     Column (a) includes  6,270 shares granted to management but not yet vested.
     In addition,  72,366 shares  granted to management  have fully vested,  and
     shares have been issued to management in connection therewith.

(3)  The total in Column (b) includes only the  weighted-average  price of stock
     options,  as the  restricted  shares  awarded  under  the RRP plan  have no
     exercise price.

Item 12. Certain Relationships and Related Transactions.

     The  information  required by this item is incorporated by reference to the
section of the 2005 Proxy  Statement with the caption  "Proposal I - Election of
Directors - Transactions with Certain Related Persons."

                                       36
<PAGE>

Item 13.   Exhibits.

(a) List the following documents filed as part of the report:

                                                                   Annual Report
   Financial Statements                                              Page No.
   -------------------------------------------------              -------------
   Report of Independent Registered Public Accounting Firm.............   18

   Consolidated Balance Sheets at December 31, 2004 and 2003...........   19

   Consolidated Statements of Income for the Years Ended December 31,
        2004, 2003, and 2002...........................................   20

   Consolidated Statements of Comprehensive Income for the Years Ended
        December 31, 2004, 2003, and 2002..............................   21

   Consolidated Statements of Stockholders' Equity for the Years Ended
        December 31, 2004, 2003, and 2002..............................   22

   Consolidated Statements of Cash Flows for the Years Ended December 31,
        2004, 2003, and 2002...........................................   23

   Notes to Consolidated Financial Statements..........................  24-42



(b)  The exhibits filed  herewith or  incorporated  by reference  herein are set
     forth on the Exhibit Index on page E-1.

(c)  All  schedules  are  omitted  as the  required  information  either  is not
     applicable  or is  included in the  Consolidated  Financial  Statements  or
     related notes.

Item 14. Principal Accountant Fees and Services.

     The information  required by this item with respect to principal accountant
fees and services is  incorporated by reference to the section of the 2005 Proxy
Statement with the caption "Accountants."


                                       37
<PAGE>

                                   SIGNATURES


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


         RIVER VALLEY BANCORP



Date:  March 30, 2005               By: /s/ Matthew P. Forrester
                                        ------------------------------------
                                        Matthew P. Forrester, President and
                                        Chief Executive Officer


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


Signatures                                       Title                                          Date
-----------------------------------------        ---------------------------------              --------------------------
(1) Principal Executive Officer:

         /s/ Matthew P. Forrester
         ---------------------------
<S>     <C>                                     <C>                                             <C>
         Matthew P. Forrester                   President and                   )
                                                Chief Executive Officer         )
                                                                                )
                                                                                )
(2)      Principal Financial and Accounting                                     )
         Officer:                                                               )
                                                                                )
                                                                                )
         /s/ Larry C. Fouse                     Treasurer                       )
         ---------------------------                                            )
         Larry C. Fouse                                                         )
                                                                                )
                                                                                )               March 30, 2005
(3)      The Board of Directors:                                                )
                                                                                )
                                                                                )
         /s/ Robert W. Anger                    Director                        )
         ---------------------------                                            )
         Robert W. Anger                                                        )
                                                                                )
                                                                                )
         /s/ Jonnie L. Davis                    Director                        )
         ---------------------------                                            )
         Jonnie L. Davis                                                        )


                                       38
<PAGE>

                                                                                )
                                                                                )
         /s/ Matthew P. Forrester               Director                        )
         ---------------------------                                            )
         Matthew P. Forrester                                                   )
                                                                                )
                                                                                )
         /s/ Michael J. Hensley                 Director                        )
         ---------------------------                                            )
         Michael J. Hensley                                                     )
                                                                                )
                                                                                )
         /s/ L. Sue Livers                      Director                        )
         ------------------                                                     )
         L. Sue Livers                                                          )               March 30, 2005
                                                                                )
                                                                                )
         /s/ Fred W. Koehler                    Director                        )
         ---------------------------                                            )
         Fred W. Koehler                                                        )
                                                                                )
                                                                                )
         /s/ Charles J. McKay                   Director                        )
         ---------------------------                                            )
         Charles J. McKay                                                       )
                                                                                )
</TABLE>


                                       39
<PAGE>

                                 EXHIBIT INDEX

Exhibit No.    Description
----------     -----------------------------------------------------------------

    3(1)       Registrant's   Articles  of  Incorporation  are  incorporated  by
               reference to Exhibit 3(1) to the  Registration  Statement on Form
               S-1 (Registration No. 333-05121) (the "Registration Statement")

     (2)       Amended Code of By-Laws

    4(1)       Form  of  Fixed/Floating  Rate  Junior  Subordinated   Deferrable
               Interest Debentures Indenture, dated March 26, 2003, incorporated
               by reference to Exhibit 4.1 of Registrant's Form 10-QSB filed May
               15, 2003

     (2)       Form  of  Fixed/Floating  Rate  Junior  Subordinated   Deferrable
               Interest  Debentures  Trust  Agreement,  dated  March  26,  2003,
               incorporated  by  reference to Exhibit 4.2 of  Registrant's  Form
               10-QSB filed May 15, 2003

     (3)       Form  of  Fixed/Floating  Rate  Junior  Subordinated   Deferrable
               Interest Guarantee Agreement,  dated March 26, 2003, incorporated
               by reference to Exhibit 4.3 of Registrant's Form 10-QSB filed May
               15, 2003

   10(1)       Employment  Agreement  between  River Valley  Financial  Bank and
               Matthew P. Forrester

     (2)       Director Deferred  Compensation  Master Agreement is incorporated
               by reference to Exhibit 10(8) to the Registration Statement

     (3)       Director  Deferred  Compensation  Joinder  Agreement -- Robert W.
               Anger is  incorporated  by  reference  to  Exhibit  10(10) to the
               Registration Statement

     (4)       Director  Deferred  Compensation  Joinder  Agreement  --  Earl W.
               Johann is  incorporated  by  reference  to Exhibit  10(12) to the
               Registration Statement

     (5)       Director Deferred  Compensation Joinder Agreement -- Frederick W.
               Koehler is  incorporated  by reference  to Exhibit  10(13) to the
               Registration Statement

     (6)       Director  Deferred  Compensation  Joinder  Agreement  --  Michael
               Hensley is  incorporated  by reference  to Exhibit  10(15) to the
               Registration Statement

     (7)       Exempt  Loan and Share  Purchase  Agreement  between  Trust under
               River Valley  Bancorp  Employee  Stock  Ownership  Plan and Trust
               Agreement and River Valley Bancorp is  incorporated  by reference
               to Exhibit 10(22) to the Registration Statement

     (8)       River Valley Bancorp Recognition and Retention Plan and Trust

     (9)       River Valley Bancorp Stock Option Plan

     (10)      Employment  Agreement  between  River Valley  Financial  Bank and
               Gregory T. Siegrist is incorporated by reference to Exhibit 10 of
               Registrant's Form 10-QSB filed November 15, 2004

     (11)      First  Amendment of the  Director  Deferred  Compensation  Master
               Agreement  is  incorporated  by  reference  to  Exhibit  10.1  of
               Registrant's Form 8-K filed March 21, 2005

     (12)      Form of Employee Incentive Stock Option Agreement under the River
               Valley Bancorp Stock Option Plan

     (13)      Form of Director Non-Qualified Stock Option Agreement

     (14)      Form  of  Award  Notification  under  the  River  Valley  Bancorp
               Recognition and Retention Plan and Trust

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<PAGE>

   13          Shareholder Annual Report


   14          Code of Ethics is  incorporated  by  reference  to  Exhibit 14 of
               Registrant's Form 10-KSB filed March 30, 2004

   21          Subsidiaries  of the Registrant is  incorporated  by reference to
               Exhibit 21 of Registrant's Form 10-KSB filed March 30, 2004

   23          Consent of BKD, LLP

   31(1)       CEO Certification

   31(2)       CFO Certification

   32          Section 906 Certification


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