EXHIBIT 13
                                                                      ----------
                              River Valley Bancorp
  P.O. Box 1590 Madison, Indiana 47250-0590 (812)273-4949 Fax - (812) 273-4944


To Our Shareholders, Customers, and Friends:

It is my pleasure to present to you River Valley  Bancorp's  sixth Annual Report
to Shareholders covering the year ending December 31, 2001.

The year of 2001 will  always be defined by the events of  September  11th.  Our
lives have been scarred by those tragic  events,  but our souls have been lifted
by a new sense of patriotism and hope. America's well being was challenged,  but
not our spirit.  History will record the tragedy and the hatred of those events,
but the true  newsmaker  that we bore  witness  to was the  rekindled  spirit of
goodness.  This renewal has transformed our nation, our people, and I am pleased
to say, our Company.

Our  Company's own renewal is a process that began in 1999. I am proud to report
this  commitment  produced yet another record year for 2001. The Corporation has
not  only  prospered;   it  has  positioned  itself  for  continued  growth  and
profitability  for the  future.  The  Corporation  has had solid  balance  sheet
growth, made strategic commitments in facilities and technology,  and positioned
itself  for  meeting  the  needs  of an  expanded  customer  base.  Through  our
subsidiary,  River  Valley  Financial  Bank,  we  became  our  county's  largest
financial institution, taking that century old distinction away from a bank that
is recognized as Indiana's oldest financial institution.

Operationally  for the year ended December 31, 2001, net income was  $1,976,000,
or basic  earnings per share of $2.50,  compared to  $1,610,000,  or $1.88 basic
earnings per share,  reported in 2000.  The return on average  assets for fiscal
2001 was 1.09%;  the return on average equity was 11.27%.  For fiscal 2000 those
numbers were 1.05% and 9.45% respectively.  The earnings per share reflected not
only stronger  profitability,  but prudent repurchase of outstanding shares. The
book value of shares  outstanding as of December 31, 2001 was $22.21 compared to
$19.78 at December 31, 2000.

The Organization experienced good asset growth in fiscal 2001 led by strong loan
growth.  Assets  totaled  $191.6 million as of December 31, 2001, an increase of
18.2%.  Net  loans,  including  loans held for sale,  were  $158.0  million,  an
increase of $17.0 million from that recorded as of December 31, 2000, or a 12.1%
increase.  Deposits also increased by $15.4 million,  or 11.8% to $145.6 million
as of December 31, 2001.

In spite of the economic downturn  reported in 2001, the Corporation  diligently
controlled  non-performing  loans  while  providing  adequate  funding  for  its
allowance for loan losses. As of December 31, 2001, non-performing loans totaled
$690,000,  or 0.36% of  total  assets,  compared  to  0.38% of total  assets  at
year-end  2000. The  Corporation  raised its loan loss reserve ratio to 1.25% of
total loans by providing $450,000 to allowances for loan losses in 2001, up from
the $227,000 provided for in 2000.

Your  Corporation had another record year. We are proud of our  accomplishments,
but most importantly,  mindful of the realities of September 11th that say "what
we take for  granted can hurt us." We thank you for your  continued  support and
patronage. May God continue to bless us all.

Respectfully Submitted,

/s/ Matthew P. Forrester

Matthew P. Forrester
President, CEO
<PAGE>

                              River Valley Bancorp

                            BUSINESS OF RIVER VALLEY


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

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


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

There were 809,951 common shares of River Valley Bancorp outstanding at February
19, 2002, held of record by 359  shareholders.  The number of shareholders  does
not reflect  the number of persons or entities  who may hold stock in nominee or
"street name." Since December of 1996, the Corporation's common shares have been
listed on The Nasdaq SmallCap Market ("Nasdaq"), under the symbol "RIVR".

Presented  on the  following  page  are the high  and low  sale  prices  for the
Corporation's  common shares, as well as cash  distributions  paid thereon since
December  1999.  Such sales  prices do not  include  retail  financial  markups,
markdowns or commissions. Information relating to sales prices has been obtained
from Nasdaq.

<PAGE>

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

Quarter Ended                 High             Low           Cash Distributions

2001
  December 31, 2001         $20.70           $19.50               $0.150
  September 30, 2001         21.07            17.72                0.125
  June 30, 2001              18.00            16.02                0.125
  March 31, 2001             17.00            15.19                0.100

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

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

The high and low sales prices for River Valley's common shares between  December
31, 2001 and February 19, 2002 were $28.35 and $20.20, respectively.

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

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

           SELECTED CONSOLIDATED FINANCIAL INFORMATION AND OTHER DATA


The following tables set forth certain  information  concerning the consolidated
financial  condition,  earnings,  and other data  regarding  River Valley at the
dates and for the periods indicated.
<TABLE>
<CAPTION>

Selected consolidated financial condition data:                          At December 31,
                                                     2001         2000         1999         1998         1997
Total amount of:                                                         (In thousands)
<S>                                              <C>          <C>          <C>          <C>          <C>
  Assets                                         $191,618     $162,130     $138,695     $138,369     $136,933
  Loans receivable - net (1)                      157,972      140,970      115,131      112,385      111,887
  Cash and cash equivalents (2)                     5,641        6,382        8,052       12,307        5,765
  Mortgage-backed and related securities              831        1,918        4,209        5,986        8,978
  Investment securities                            16,822        5,329        5,230        1,283        4,272
  Deposits                                        145,571      130,225      114,251      118,151      114,955
  FHLB advances and other borrowings               26,500       13,450        6,500          270        2,000
  Shareholders' equity- net                        17,971       17,184       16,866       18,613       17,989

<PAGE>
Summary of consolidated earnings data:                               Year Ended December 31,
                                                     2001         2000         1999         1998         1997
                                                                  (In thousands, except share data)

Total interest income                            $ 13,084     $ 11,118     $  9,734     $ 10,108     $ 10,362
Total interest expense                              6,617        5,637        4,617        4,842        5,049
                                                 --------     --------     --------     --------     --------
Net interest income                                 6,467        5,481        5,117        5,266        5,313
Provision for losses on loans                         450          227          140          275          304
                                                 --------     --------     --------     --------     --------
Net interest income after provision for
losses on loans                                     6,017        5,254        4,977        4,991        5,009

Other income                                        1,922        1,053          844        1,188        1,134
General, administrative and other expense           4,706        3,764        4,080        4,093        4,003
                                                 --------     --------     --------     --------     --------
Earnings before income tax expense                  3,233        2,543        1,741        2,086        2,140
Income tax expense                                  1,257          933          702          833          830
                                                 --------     --------     --------     --------     --------
Net earnings                                     $  1,976     $  1,610     $  1,039     $  1,253     $  1,310
                                                 ========     ========     ========     ========     ========
Basic earnings per share                         $   2.50     $   1.88     $   1.03     $   1.13     $   1.20
                                                 ========     ========     ========     ========     ========
Diluted earnings per share                       $   2.44     $   1.87     $   1.03     $   1.12     $   1.18
                                                 ========     ========     ========     ========     ========
</TABLE>

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

(1)     Includes  loans held for sale.
(2)     Includes certificates of deposit in other financial institutions.

<PAGE>

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


Selected financial ratios and other data:

                                                                     Year ended December 31,
                                                      2001         2000          1999         1998         1997

<S>                                                   <C>          <C>           <C>          <C>          <C>
Interest rate spread during period                    3.58%        3.47%         3.63%        3.66%        3.64%
Net yield on interest-earning assets (1)              3.80         3.79          3.94         4.08         4.00
Return on assets (2)                                  1.09         1.05          0.76         0.92         0.99
Return on equity (3)                                 11.27         9.45          5.87         6.85         7.53
Equity to assets (4)                                  9.38        10.60         12.16        13.45        13.12
Average interest-earning assets to
  average interest-bearing liabilities              105.94       108.02        108.81       111.07       109.56
Non-performing assets to total assets (4)             0.36         0.38          0.62         1.47         0.58
Allowance for loan losses to total
  loans outstanding (4)                               1.25         1.21          1.28         1.33         1.13
Allowance for loan losses to
  non-performing loans (4)                          285.80       274.07        164.41        75.78       177.72
Net charge-offs to average total
  loans outstanding                                   0.12         0.04          0.08         0.06         0.20
General, administrative and other expense
  to average assets (5)                               2.60         2.47          2.97         3.01         2.83
Dividend payout ratio                                20.49        18.45         25.73        19.64        11.02
Number of full service offices (4)                       4            5             5            5            6

</TABLE>


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

(1)     Net interest income divided by average interest-earning assets.
(2)     Net earnings divided by average total assets.
(3)     Net earnings divided by average total equity.
(4)     At end of period.
(5)     General,  administrative  and other  expense  divided by  average  total
        assets.

<PAGE>


                              River Valley Bancorp

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


General

As discussed  previously,  River Valley was incorporated for the primary purpose
of owning all of the outstanding shares of River Valley Financial.  As a result,
the  discussion  that  follows  focuses on River  Valley  Financial's  financial
condition and results of  operations  for the periods  presented.  The following
discussion  and analysis of the financial  condition as of December 31, 2001 and
River  Valley's  results of operations  for periods prior to that date should be
read in conjunction  with the  consolidated  financial  statements and the notes
thereto, included elsewhere in this Annual Report.

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

     1.   Management's  determination  as to the amount and adequacy of the loan
          loss allowance;

     2.   The effect of changes in interest  rates on  financial  condition  and
          results of operations;

     3.   The effects of proposed  legislation  that would eliminate the federal
          thrift charter and the separate federal regulation of thrifts; and

     4.   Management's   opinion   as  to  the   effect  of  recent   accounting
          pronouncements on River Valley's  consolidated  financial position and
          results of operations.

Discussion of Changes in Financial  Condition from December 31, 2000 to December
31, 2001

At December 31, 2001, River Valley's consolidated assets totaled $191.6 million,
representing an increase of $29.5 million over the December 31, 2000 total. This
increase  in assets was funded in part by a $15.4  million  increase in deposits
and a $13.1 million increase in borrowings. Deposits increased to $145.6 million
as of December 31, 2001 from $130.2  million  while  borrowings  increased  from
$13.5  million as of December 31, 2000 to $26.5 million as of December 31, 2001.
Shareholders'  equity was $18.0  million as December 31, 2001, a net increase of
$0.8 million from $17.2 million as of December 31, 2000. The modest  increase in
equity was  attributed  primarily  to net income of $2.0  million  offset by the
repurchase of approximately $1.2 million or 64,293 shares of common stock.

Liquid assets (i.e.,  cash,  federal funds sold,  interest-earning  deposits and
certificates of deposit) decreased by $0.7 million from December 31, 2000 levels
to a total of $5.6 million at December 31, 2001.  Investment  securities totaled
$17.7  million at December 31, 2001,  an increase of $11.5 million over December
31, 2000.  Mortgage-backed  securities  decreased by $1.1 million, to a total of
$831,000 at December 31, 2001,  primarily  due to principal  repayments  and the
sale of several issues.
<PAGE>

                              River Valley Bancorp

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

Discussion of Changes in Financial  Condition from December 31, 2000 to December
31, 2001 (continued)

Loans  receivable,  including  loans held for sale,  totaled  $158.0  million at
December  31,  2001,  an increase of $17.0  million,  or 12.1%,  over the $141.0
million total at December 31, 2000.  The increase  resulted  primarily from loan
originations  during  2001 of $147.9  million,  which were  partially  offset by
principal  repayments  of  $85.3  million  and  sales  of  $46.1  million.  Loan
origination  volume for 2001 exceeded that of 2000 by $62.7  million,  or 73.6%.
There were  significant  increases in all types of lending with the exception of
land and  multi-family  loans.  The  volume  of loan  sales  into the  secondary
mortgage market increased during 2001 from 2000 volume by $43.5 million,  due in
large part to low interest rates.

River Valley's consolidated allowance for loan losses totaled approximately $2.0
million for the year ended December 31, 2001, which  represented  1.25% of total
loans at that date. The allowance for loan losses totaled $1.7 million, or 1.21%
of total loans for the period  ended  December  31,  2000.  Nonperforming  loans
(defined  as  loans  delinquent  greater  than 90 days and  loans on  nonaccrual
status)  totaled  $0.7  million and $0.6  million at December 31, 2001 and 2000,
respectively.  The consolidated  allowance for loan losses  represented 286% and
274% of nonperforming loans at December 31, 2001 and 2000, respectively.

Although  management believes that its allowance for loan losses at December 31,
2001 was adequate based upon the available facts and circumstances, there can be
no assurance  that  additions to such  allowance will not be necessary in future
periods, which could negatively affect the Corporation's results of operations.

Deposits  increased by $15.3 million,  or 11.8%, to a total of $145.6 million at
December  31,  2001,  compared to $130.2  million  total at December  31,  2000.
Savings and demand deposits  increased by $9.6 million,  or 18.2%,  during 2001,
while  certificates  of  deposit  increased  by $5.7  million,  or  7.4%.  These
fluctuations  in balances were  attributed to competitive  rates,  marketing and
good community public relations.

Advances from the Federal Home Loan Bank and other borrowed  money  increased by
$13.0 million from the total at December 31, 2000, as current period  borrowings
of $26.5 million were used in part to fund loan growth.

Shareholders'  equity totaled $18.0 million at December 31, 2001, an increase of
$0.8 million  from the $17.2  million  total at December 31, 2000.  The increase
resulted  primarily from net income of $2.0 million,  which was partially offset
by repurchases  of shares  totaling $1.2 million and cash dividends of $388,000.
This net  increase  also  includes a net  increase of $296,000  related to stock
benefit  plans,  proceeds  of $68,000  from the  exercise  of stock  options and
unrealized gain on securities available for sale of $17,000.

<PAGE>


                              River Valley Bancorp

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

Comparison  of Results of Operations  for the Years Ended  December 31, 2001 and
2000

General

River Valley's net earnings for the year ended December 31, 2001,  totaled $1.98
million, an increase of $366,000,  or 22.7%, from net earnings reported in 2000.
The increase in net earnings in the 2001 period was primarily attributable to an
increase in net interest income of $986,000 and an increase of $869,000 in other
income, while general,  administrative and other expense were $942,000 higher in
the current period.  The provision for federal income taxes was $324,000 more in
fiscal year 2001 as compared to the same period in 2000.  The provision for loan
losses in 2001 was $450,000 as compared to $227,000 in 2000.

Net Interest Income

Total interest  income for the year ended  December 31, 2001,  amounted to $13.1
million, an increase of $2.0 million, or 18.0%, from the 2000 total,  reflecting
the effects of higher average balances on interest  earning assets.  The average
balance of interest-earning  assets outstanding  year-to-year increased by $25.2
million and the yield on those assets  increased  from an average yield of 7.68%
in 2000  to  7.70%  in  2001.  Interest  income  on  loans  and  mortgage-backed
securities  totaled $12.3 million for 2001,  an increase of  approximately  $1.8
million,  or 16.9%,  from 2000.  Interest income on investments,  FHLB stock and
interest-earning deposits increased by $183,000, or 32.6%, due to higher average
balances on those investments.

Interest expense on deposits increased by $524,000, or 10.2%, to a total of $5.7
million for the year ended  December 31, 2001,  due primarily to higher  average
balances.  The cost of  deposits  decreased  from 4.1% in 2000 to 3.9% in fiscal
2001.  Interest  expense  on  borrowings  totaled  $956,000  for the year  ended
December  31, 2001,  an increase of $456,000  from 2000.  The increase  resulted
primarily from higher average borrowings year-to-year,  partially offset by a 17
basis point decrease in average cost.

As a result of the foregoing  changes in interest  income and interest  expense,
net interest income  increased  during 2001 by $986,000,  or 18.0%,  compared to
2000.  The interest rate spread  increased by 11 basis points for 2001, to 3.58%
from 3.47% in the 2000 period,  while the net interest  margin amounted to 3.80%
in 2001 and 3.79% in 2000.

Provision for Losses on Loans

A  provision  for  losses on loans is  charged  to  earnings  to bring the total
allowance for loan losses to a level considered  appropriate by management based
upon historical  experience,  the volume and type of lending  conducted by River
Valley  Financial,  the  status of past due  principal  and  interest  payments,
general  economic  conditions,  particularly  as such  conditions  relate to the
primary market area, and other factors related to the collectibility of the loan
portfolio.  As a  result  of  such  analysis,  management  recorded  a  $450,000
provision  for  losses on loans in 2001,  an  increase  of  $223,000,  or 98.2%,
compared  to the  $227,000  provision  recorded  in  2000.  The  current  period
provision generally reflects growth in the loan portfolio, coupled with a change
in the loan mix; less 1-4 family and more commercial/non-residential.
<PAGE>

                              River Valley Bancorp

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


Comparison  of Results of Operations  for the Years Ended  December 31, 2001 and
2000 (continued)

Nonperforming  loans for the period ended  December 31, 2001 were  $690,000,  an
increase of approximately  $69,000 from the $621,000  recorded as of fiscal year
ended 2000. Net charge-offs amounted to $180,000 in 2001, compared to $47,000 in
2000.  While  management  believes  that the  allowance  for  losses on loans is
adequate at December 31, 2001,  based upon  available  facts and  circumstances,
there can be no assurance that the loan loss allowance will be adequate to cover
losses on nonperforming assets in the future.

Other Income

Other income  amounted to $1.9 million for the year ended  December 31, 2001, an
increase of $869,000,  or 82.5%, compared to 2000, due primarily to increases in
net gains on loan sales and service  fees and  charges.  Net gains on loan sales
increased from $44,000 in 2000 to $772,000 in 2001, an increase of $728,000. The
volume of loan sales  increased  from $2.6  million in 2000 to $46.1  million in
2001.

General, Administrative and Other Expense

General,  administrative  and other  expense  totaled  $4.7 million for the year
ended  December 31, 2001, an increase of $942,000 over the 2000 total.  Employee
compensation  and  benefits  increased by $266,000 in fiscal 2001 as compared to
2000  primarily  from cost of  living,  benefit  expense  and  increase  in ESOP
expenses. Occupancy and equipment expense increased by $44,000 in fiscal 2001 as
compared to 2000 due to higher  depreciation  costs.  Other  operating  expenses
increased by $632,000 primarily from increases in advertising,  data processing,
donations and mortgage servicing.  The corporation also made a $100,000 donation
to a local school system in exchange for federal tax credits in future years.

Income Taxes

The  provision for income taxes  increased by $324,000,  or 34.7 %, for the year
ended December 31, 2001, as compared to 2000. The effective tax rates were 38.8%
and 36.7% for the years ended December 31, 2001 and 2000, respectively.

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

General

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

<PAGE>


                              River Valley Bancorp

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

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

Net Interest Income

Total interest  income for the year ended  December 31, 2000,  amounted to $11.1
million, an increase of $1.4 million, or 14.20%, from the 1999 total, reflecting
the  effects of higher  average  balances on average  assets.  While the average
balance of interest-earning  assets outstanding  year-to-year increased by $14.7
million,  and the yield on those assets increased from an average yield of 7.49%
in 1999  to  7.68%  in  2000.  Interest  income  on  loans  and  mortgage-backed
securities  totaled $10.6 million for 2000,  an increase of  approximately  $1.5
million,  or 16.8%,  from 1999.  Interest income on investments,  FHLB stock and
interest-earning  deposits decreased by $132,000, or 19.0%, due to a decrease in
the average balance outstanding.

Interest expense on deposits increased by $663,000, or 14.8%, to a total of $5.2
million for the year ended  December 31, 2000, due primarily to a 28 basis point
increase in the weighted  average cost of  deposits.  The cost of deposits  rose
from  3.82% in 1999 to 4.10% in fiscal  2000.  Interest  expense  on  borrowings
totaled  $500,000  for the year ended  December 31, 2000 an increase of $357,000
from 1999.  The  increase  resulted  primarily  from higher  average  borrowings
year-to-year, partially offset by a 75 basis point decrease in average cost.

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

Provision for Losses on Loans

A  provision  for  losses on loans is  charged  to  earnings  to bring the total
allowance for loan losses to a level considered  appropriate by management based
upon historical  experience,  the volume and type of lending  conducted by River
Valley  Financial,  the  status of past due  principal  and  interest  payments,
general  economic  conditions,  particularly  as such  conditions  relate to the
primary market area, and other factors related to the collectibility of the loan
portfolio.  As a  result  of  such  analysis,  management  recorded  a  $227,000
provision for losses on loans in 2000, an increase of $87,000 or 62.1%  compared
to the  $140,000  provision  recorded  in 1999.  The  current  period  provision
generally reflects growth in the loan portfolio,  coupled with a decrease in the
level of nonperforming  loans  year-to-year.  Nonperforming loans for the period
ended December 31, 2000 were  $621,000,  a reduction of  approximately  $236,000
from the  $857,000  recorded  as of fiscal  year  ended  1999.  Net  charge-offs
amounted  to $47,000 in 2000,  compared  to  $95,000 in 1999.  While  management
believes  that the  allowance  for losses on loans was  adequate at December 31,
2000,  based upon available facts and  circumstances,  there can be no assurance
that the loan allowance will be adequate to cover losses on nonperforming assets
in the future.
<PAGE>


                              River Valley Bancorp

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


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

Other Income

Other income  amounted to $1.1 million for the year ended  December 31, 2000, an
increase of $209,000,  or 24.8%,  compared to 1999,  due primarily to a $208,000
increase in service fees and charges.

General, Administrative and Other Expense

General,  administrative  and other  expense  totaled  $3.8 million for the year
ended  December 31, 2000, a decrease of $316,000  over the 1999 total.  Employee
compensation  and  benefits  decreased  by  $137,000  or 6.3% in fiscal  2000 as
compared to 1999 primarily from the decrease in staffing levels. Included in the
1999 compensation expense was $150,000 in non-recurring  expense associated with
a severance  agreement  in a  managerial  restructuring  completed  in the third
quarter of fiscal 1999.  Occupancy and equipment  expense increased by $4,000 or
0.1% in fiscal 2000 primarily from charges  associated with equipment  upgrades.
All other operating  expenses decreased by $183,000 or 13.5% due to decreases in
a variety of expense categories and were not attributable to any one item.

Income Taxes

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

                  AVERAGE BALANCE, YIELD, RATE AND VOLUME DATA

The following  table  presents  certain  information  relating to River Valley's
average balance sheet and reflects the average yield on interest-earning  assets
and the average cost of interest-bearing  liabilities for the periods indicated.
Such yields and costs are derived by  dividing  annual  income or expense by the
average   daily   balance  of   interest-earning   assets  or   interest-bearing
liabilities, respectively, for the years presented. Average balances are derived
from daily balances, which include nonaccruing loans in the loan portfolio.
<TABLE>
<CAPTION>
                                                                       Year ended December 31,
                                                      2001                         2000                          1999
                                          Average Interest            Average  Interest              Average Interest
                                      outstanding  earned/ Yield/ outstanding   earned/ Yield/   outstanding  earned/ Yield/
                                          balance     paid   rate     balance      paid   rate       balance     paid   rate
                                                                   (Dollars in thousands)
<S>                                     <C>         <C>      <C>      <C>       <C>       <C>     <C>          <C>      <C>
Interest-earning assets:
  Interest-earning deposits             $   5,042   $  185   3.67%    $ 4,005   $   240   5.99%   $    6,878   $  342   4.97%
  Other securities (1)                      8,480      481   5.67       3,580       243   6.79         5,347      276   5.16
  Mortgage-backed and related
    securities                              1,259       73   5.80       2,976       192   6.45         5,051      301   5.96
  Loans receivable (2)                    154,171   12,267   7.96     133,255    10,365   7.78       111,794     8740   7.82
  FHLB stock                                1,055       78   7.39         943        78   8.27           943       75   7.95
                                        ---------   ------           --------    ------           ----------   ------
Total interest-earning assets             170,007   13,084   7.70     144,759    11,118   7.68       130,013    9,734   7.49
Non-interest earning assets,                                                     ------                        ------
  net of allowance for loan losses         10,922                       7,859                          7,309
                                        ---------                    --------                     ----------
          Total assets                  $ 180,929                    $152,618                     $  137,322
                                        =========                    ========                     ==========

<PAGE>

Liabilities/shareholder equity
Interest-bearing liabilities:
  Savings deposits                      $  32,108    1,006   3.13    $ 32,906     1,185   3.60    $   34,250    1,220   3.56
  Interest bearing demand  (5)             26,719      330   1.24      24,265       392   1.62        23,430      372   1.59
  Certificates of deposit                  84,262    4,325   5.13      68,026     3,560   5.23        59,578    2,882   4.84
  FHLB advances and other borrowings       17,385      956   5.50       8,813       500   5.67         2,228      143   6.42
                                        ---------   ------                       ------                        ------
Total interest-bearing liabilities        160,474    6,617   4.12     134,010     5,637   4.21       119,486    4,617   3.86
Other liabilities                           2,915   ------              1,561    ------                  347   ------
                                        ---------                    --------                     ----------
          Total liabilities               163,389                     135,571                        119,833
          Total equity                     17,540                      17,047                         17,489
                                        ---------                    --------                     ----------

Total liabilities and equity            $ 180,929                    $152,618                     $  137,322
                                        =========                    ========                     ==========

Net interest earning assets             $   9,533                    $ 10,749                     $   10,527
                                        =========                    ========                     ==========

Net interest income                                 $6,467                      $ 5,481                        $5,117
                                                    ======                      =======                        ======
Interest rate spread (3)                                     3.58%                        3.47%                         3.63%
Net yield on weighted average
  interest-earning assets (4)                                3.80%                        3.79%                         3.94%
Average interest-earning assets to
  average Interest-bearing liabilities     105.94%                     108.02%                        108.81%

</TABLE>

(1)  Includes securities  available for sale at amortized cost prior to SFAS No.
     115 adjustments.
(2)  Total loans less loans in process plus loans held for sale.
(3)  Interest rate spread is calculated by subtracting weighted average interest
     rate  cost  from  weighted  average  interest  rate  yield  for the  period
     indicated.
(4)  The net yield on weighted average  interest-earning assets is calculated by
     dividing net interest income by weighted  average  interest-earning  assets
     for the period indicated.
(5)  Includes Non-Interest DDA of $9,985,  $8,512, and $8,113.
<PAGE>

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


Rate/Volume Table

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

<TABLE>
<CAPTION>
                                                                  Year ended December 31,
                                                     2001 vs. 2000                   2000 vs. 1999
                                                       Increase                        Increase
                                                       (decrease)                      (decrease)
                                                        due to                          due to
                                           Volume        Rate      Total     Volume      Rate      Total
                                                                       (In thousands)
<S>                                        <C>         <C>       <C>        <C>        <C>        <C>
Interest-earning assets:
  Interest-earning deposits and other      $    64     $ (119)   $   (55)   $  (173)   $    74    $   (99)
  Investment securities                        284        (46)       238       (106)        73        (33)
  Mortgage-backed and related securities      (101)       (18)      (119)      (132)        23       (109)
  Loans receivable, net                      1,659        243      1,902      1,670        (45)     1,625
                                           -------     ------    -------    -------    -------    -------
Total                                        1,906         60      1,966      1,259        125      1,384
                                           -------     ------    -------    -------    -------    -------
Interest-bearing liabilities:
Deposits                                       713       (189)       524        314        349        663
FHLB advances and other borrowings             472        (16)       456        375        (18)       357
                                           -------     ------    -------    -------    -------    -------
Total                                        1,185       (205)       980        689        331      1,020
                                           -------     ------    -------    -------    -------    -------
Net change in interest income              $   721    $   265    $   986    $   570    $  (206)   $   364
                                           =======    =======    =======    =======    =======    =======
</TABLE>

Asset and Liability Management

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

Presented  on the  following  table is an analysis of River  Valley  Financial's
interest rate risk, as of December 31, 2001, (the latest information  available)
and December 31, 2000,  as measured by changes in NPV for an  instantaneous  and
sustained  parallel  shift of 100  through 300 basis  points in market  interest
rates.
<PAGE>

                              River Valley Bancorp

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

Asset and Liability Management (continued)

Generally,  NPV is more  sensitive to rising rates than  declining  rates.  Such
difference in sensitivity  occurs principally  because,  as rates rise, a bank's
assets  re-price  slower than the  deposits  that fund them.  As a result,  in a
rising interest rate environment, the amount of interest a bank would receive on
loans would  increase as loans are slowly  prepaid and new loans at higher rates
are made. Moreover,  the interest the bank would pay on deposits would increase,
but generally  slower than the bank's  ability to re-price its  interest-earning
assets. However, River Valley Financial Bank has addressed some of these issues,
which has generally reduced its overall exposure to interest rate risk.

                             As of December 31, 2001

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

+300                   $ 22,166          $ (3,131)             (12)%
+200                     23,416            (1,881)              (7)
+100                     24,376              (921)              (4)
-------                  25,297           --------
-100                     25,957               661                3
-200 (1)                 ------            --------           ------
-300 (1)                 ------            --------           ------

                             As of December 31, 2000

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

+300                   $ 17,112          $ (1,285)             (7)%
+200                     17,898              (499)             (3)
+100                     18,309               (88)              0
  -                      18,397           -------            ------
-100                     18,296              (101)             (1)
-200                     19,025               628               3
-300                     20,294             1,897              10

(1) At December 31,  2001,  the OTS did not provide  information  as to interest
rate risk for 200 and 300 point decreases.
<PAGE>

                              River Valley Bancorp

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


Asset and Liability Management (continued)

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

Liquidity and Capital Resources

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

The Financial  Regulatory Relief and Economic  Efficiency Act of 2000, which was
signed into law on December 27, 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.  At December 31,
2001,  River Valley  Financial Bank had  commitments to originate loans totaling
$7.0 million and in addition, had undisbursed loans in process,  unused lines of
credit and standby letters of credit totaling $10.3 million. At such date, River
Valley  Financial  Bank had $2.6  million  in  commitments  to sell loans and no
outstanding commitment to purchase loans. The Corporation considers River Valley
Financial Bank's liquidity and capital resources  sufficient to meet outstanding
short- and long-term needs.

<PAGE>

                              River Valley Bancorp

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


Liquidity and Capital Resources (continued)

The Corporation's liquidity, primarily represented by cash and cash equivalents,
is a result of the funds  provided  by or used in the  Corporation's  operating,
investing and financing  activities.  These  activities are summarized below for
the years ended December 31, 2001, 2000 and 1999:

                                                     Year ended December 31,
                                                   2001        2000        1999
                                                          (In thousands)

Cash flows from operating activities           $    756    $  2,028    $  5,346

Cash flows from investing activities:
 Purchase of securities                         (19,262)     (7,949)    (21,537)
 Proceeds from maturities of securities           5,204       8,297      19,399
 Proceeds from sales of securities                3,689       2,002     -------
 Net loan (originations) repayments             (15,078)    (26,165)     (6,673)
 Other                                           (3,079)     (1,087)       (121)

Cash flows from financing activities:
Net increase (decrease) in deposits              15,346      15,974      (3,900)
Net increase (decrease) in borrowings            13,050       6,950       6,230
Purchase of stock                                (1,182)     (1,367)     (2,724)
Other                                              (185)       (353)       (275)
                                               ---------   ---------   ---------
Net increase (decrease) in cash and cash
Equivalents                                    $   (741)   $ (1,670)   $ (4,255)
                                               =========   =========   =========

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

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

<PAGE>
                              River Valley Bancorp

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


Liquidity and Capital Resources (continued)

OTS regulations require that savings associations  maintain "risk-based capital"
in an amount not less than 8% of "risk-weighted  assets."  Risk-based capital is
defined as core capital plus certain  additional items of capital,  which in the
case of River Valley  Financial  includes a general loan loss  allowance of $2.0
million at December 31, 2001.

River Valley Financial  exceeded all of its regulatory  capital  requirements at
December 31, 2001.  The  following  table  summarizes  River Valley  Financial's
regulatory capital requirements and regulatory capital at December 31, 2001:
<TABLE>
<CAPTION>

                             OTS Requirement                              Actual Amount

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

<S>                          <C>        <C>                 <C>       <C>             <C>
Tangible capital             1.50%      $ 2,863             9.6%      $   18,398      $ 15,535
Core capital (2)             4.00%        7,635             9.6%          18,398        10,763
Risk-based capital           8.00%       11,627            13.9%          20,162         8,535

</TABLE>



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

<PAGE>

                              River Valley Bancorp

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


Effect of Recent Accounting Pronouncements

Accounting  for  a  Business  Combination.  Statement  of  Financial  Accounting
Standards  ("SFAS") No. 141, requires that all business  combinations  should be
accounted for using the purchase method of accounting; use of the pooling method
is prohibited.

This statement requires that goodwill be initially recognized as an asset in the
financial statement and measured as the excess of the cost of an acquired entity
over  the net of the  amounts  assigned  to  identifiable  assets  acquired  and
liabilities  assumed. In addition,  SFAS No. 141 requires all other intangibles,
such as core deposit intangibles for a financial institution, to be identified.

The  provisions of Statement No. 141 are effective for any business  combination
that is initiated after June 30, 2001.

Accounting for Goodwill.  Under the provisions of SFAS NO. 142,  goodwill should
not be  amortized  but should be tested for  impairment  at the  reporting  unit
level.  Impairment  test of goodwill  should be done on an annual  basis  unless
events or circumstances  indicate impairment has occurred in the interim period.
The annual  impairment test can be performed at any time during the year as long
as the measurement date is used consistently from year to year.

Impairment testing is a two step process,  as outlined within the statement.  If
the fair  value  of the  goodwill  is less  than its  carrying  value,  then the
goodwill  is  deemed  impaired  and  a  loss  recognized.  Any  impairment  loss
recognized as a result of completing the transitional  impairment test should be
treated as a change in accounting  principle and recognized in the first interim
period financial statements.

The  provisions  of  Statement  No.  142 would be  effective  for  fiscal  years
beginning  after  December  15, 2001.  Early  adoption  would be  permitted  for
companies  with a fiscal year  beginning  after March 15, 2001 provided that the
first quarter  financial  statements  have not been  previously  issued.  In all
cases,  the  statement  must be adopted as of the  beginning  of a fiscal  year.
Goodwill and intangible  assets  acquired in a transaction  completed after June
30, 2001 but before this  Statement is initially  applied would be accounted for
in  accordance  with the  amortization  and  nonamortization  provisions  of the
statement.  The useful economic life of previously  recognized intangible assets
should be reassessed upon adoption of the Statement,  and remaining amortization
periods  should be adjusted  accordingly.  Intangible  assets  deemed to have an
indefinite life would no longer be amortized.

The Company adopted these new accounting  rules on January 1, 2002. As a result,
the Company will not  amortize  the  goodwill it has recorded  prior to June 30,
2001,  but will make an annual  assessment of any impairment in goodwill and, if
necessary,  recognize an impairment  loss at that time. The Company had goodwill
of $31,000 at December 31, 2001, and  amortization  of $6,000 for the year ended
December 31, 2001.


<PAGE>

                              River Valley Bancorp

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


Impact of Inflation and Changing Prices

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

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

<PAGE>

                              River Valley Bancorp

            Accountants' Report and Consolidated Financial Statements

                           December 31, 2001 and 2000

<PAGE>

                         Independent Accountants' Report



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


We have audited the  accompanying  consolidated  balance  sheets of River Valley
Bancorp  as of  December  31,  2001  and  2000,  and  the  related  consolidated
statements of income, comprehensive income, stockholders' equity, and cash flows
for the years  then  ended.  These  consolidated  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these  consolidated  financial  statements  based on our  audit.  The
financial  statements for the year ended December 31, 1999 were audited by other
auditors whose report dated February 16, 2000,  expressed an unqualified opinion
on those statements.

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

In our opinion,  the consolidated  financial  statements described above present
fairly, in all material respects,  the consolidated  financial position of River
Valley  Bancorp  as of  December  31,  2001 and  2000,  and the  results  of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.

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


/s/ BKD, LLP

BKD, LLP

Indianapolis, Indiana
February 15, 2002
<PAGE>

<TABLE>
<CAPTION>
                                                         River Valley Bancorp
                                                      Consolidated Balance Sheets
                                                      December 31, 2001 and 2000


Assets
                                                                                 2001                 2000
                                                                         -------------------------------------------
                                                                            (In Thousands, Except Share Amounts)
<S>                                                                        <C>                  <C>
    Cash and due from banks                                                $          4,689     $          3,361
    Interest-bearing demand deposits                                                    952                3,021
                                                                           ----------------     ----------------
               Cash and cash equivalents                                              5,641                6,382
    Investment securities - available for sale                                       17,653                7,247
    Loans held for sale                                                               2,638                   --
    Loans, net of allowance for loan losses of $1,972 and $1,702                    155,334              140,970
    Premises and equipment                                                            5,379                2,817
    Federal Home Loan Bank stock                                                      1,250                  943
    Interest receivable                                                               1,475                1,468
    Other assets                                                                      2,248                2,303
                                                                           ----------------     ----------------
               Total assets                                                $        191,618     $        162,130
                                                                           ================     ================
Liabilities
    Deposits
        Noninterest-bearing                                                $         11,406     $          9,170
        Interest-bearing                                                            134,165              121,055
                                                                           ----------------     ----------------
               Total deposits                                                       145,571              130,225
    Borrowings                                                                       26,500               13,450
    Interest payable                                                                    613                  598
    Other liabilities                                                                   963                  673
                                                                           ----------------     ----------------
               Total liabilities                                                    173,647              144,946
                                                                           ----------------     ----------------
Commitments and Contingencies

Stockholders' Equity
    Preferred stock, no par value
        Authorized and unissued - 2,000,000 shares
    Common stock, no par value
        Authorized - 5,000,000 shares
        Issued and outstanding - 809,251 and 868,874 shares
    Additional paid-in capital                                                        7,654                8,135
    Retained earnings                                                                10,802                9,753
    Shares acquired by stock benefit plans                                             (532)                (734)
    Accumulated other comprehensive income                                               47                   30
                                                                           ----------------     ----------------
               Total stockholders' equity                                            17,971               17,184
                                                                           ----------------     ----------------
               Total liabilities and stockholders' equity                  $        191,618     $        162,130
                                                                           ================     ================
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                         River Valley Bancorp
                                                   Consolidated Statements of Income
                                             Years Ended December 31, 2001, 2000 and 1999


                                                              2001                 2000                1999
                                                      --------------------------------------------------------------
                                                                (In Thousands, Except Per Share Amounts)

    Interest Income
<S>                                                     <C>                  <C>                 <C>
        Loans receivable                                $         12,267     $         10,365    $          8,740
        Investment securities                                        554                  435                 577
        Interest-earning deposits and other                          263                  318                 417
                                                         ---------------      ---------------     ---------------
               Total interest income                              13,084               11,118               9,734
                                                         ---------------      ---------------     ---------------
    Interest Expense
        Deposits                                                   5,661                5,137               4,474
        Borrowings                                                   956                  500                 143
                                                         ---------------      ---------------     ---------------
               Total interest expense                              6,617                5,637               4,617
                                                         ---------------      ---------------     ---------------

    Net Interest Income                                            6,467                5,481               5,117
        Provision for loan losses                                    450                  227                 140
                                                         ---------------      ---------------     ---------------
    Net Interest Income After Provision for Loan
       Losses                                                      6,017                5,254               4,977
                                                         ---------------      ---------------     ---------------
    Other Income
        Service fees and charges                                   1,099                  931                 723
        Net realized gains (losses) on sales of
          available-for-sale securities                               17                   (2)                 --
        Net gains on loan sales                                      772                   44                  74
        Other income                                                  34                   80                  47
                                                         ---------------      ---------------     ---------------
               Total other income                                  1,922                1,053                 844
                                                         ---------------      ---------------     ---------------
    Other Expenses
        Salaries and employee benefits                             2,291                2,025               2,162
        Net occupancy and equipment expenses                         612                  568                 564
        Data processing fees                                         190                  151                 126
        Advertising                                                  208                  190                 182
        Legal and professional fees                                  164                  144                 155
        Other expenses                                             1,241                  686                 891
                                                         ---------------      ---------------     ---------------
               Total other expenses                                4,706                3,764               4,080
                                                         ---------------      ---------------     ---------------
    Income Before Income Tax                                       3,233                2,543               1,741
        Income tax expense                                         1,257                  933                 702
                                                         ---------------      ---------------     ---------------

    Net Income                                          $          1,976     $          1,610    $          1,039
                                                         ===============      ===============     ===============

    Basic Earnings per Share                            $           2.50     $           1.88    $           1.03
                                                         ===============      ===============     ===============

    Diluted Earnings per Share                          $           2.44     $           1.87    $           1.03
                                                         ===============      ===============     ===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                                         River Valley Bancorp
                                            Consolidated Statements of Comprehensive Income
                                             Years Ended December 31, 2001, 2000 and 1999


                                                             2001                 2000                1999
                                                     ---------------------------------------------------------------
                                                                             (In Thousands)

<S>                                                    <C>                  <C>                 <C>
    Net Income                                         $          1,976     $          1,610    $          1,039
    Other comprehensive income (loss), net of tax
        Unrealized gains (losses) on securities
          available for sale
           Unrealized holding gains (losses) arising
              during the period, net of tax expense
              (benefit) of $18, $55, and $(22)                       27                   85                 (43)
           Less: Reclassification adjustment for
              gains (losses) included in net income,
              net of tax expense (benefit) of $7 and
              $(1)                                                   10                   (1)                 --
                                                        ---------------      ---------------     ---------------
                                                                     17                   86                 (43)
                                                        ---------------      ---------------     ---------------
    Comprehensive Income                               $          1,993     $          1,696    $            996
                                                        ===============      ===============     ===============
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                                         River Valley Bancorp
                                            Consolidated Statements of Stockholders' Equity
                                             Years Ended December 31, 2001, 2000 and 1999


                                                                                  Shares     Accumulated
                                                                                 Acquired       Other
                                                      Additional                 by Stock   Comprehensive
                                     Common Stock       Paid-in     Retained      Benefit      Income
                                   Shares     Amount    Capital     Earnings       Plans       (Loss)        Total
                                 ------------------------------------------------------------------------------------
                                                            (In Thousands, Except for Share Amounts)


<S>                                 <C>       <C>       <C>        <C>          <C>           <C>           <C>
    Balances, January 1, 1999       1,173440  $   --    $11,119    $   8,706    $ (1,199)     $     (13)    $  18,613

        Net income                                                     1,039                                    1,039
        Unrealized losses on
          securities                                                                                (43)          (43)
        Cash dividends ($.265
          per share)                                                    (277)                                    (277)
        Amortization of expense
          related to stock
          benefit plans                                      26                      232                          258
        Purchase of stock           (202,943)            (2,029)        (695)                                  (2,724)
                                     -------  ------    -------    ---------    --------      ---------     ---------

    Balances, December 31, 1999      970,497              9,116        8,773        (967)           (56)       16,866


        Net income                                                     1,610                                    1,610
        Unrealized gains on
          securities, net of
          reclassification
          adjustment                                                                                 86            86
        Cash dividends ($.345
          per share)                                                    (279)                                    (279)
        Contribution to stock
          benefit plans                                                               (8)                          (8)
        Amortization of expense
          related to stock
          benefit plans                                      35                      241                          276
        Purchase of stock           (101,623)            (1,016)        (351)                                  (1,367)
                                     -------  ------    -------    ---------    --------      ---------     ---------

    Balances, December 31, 2000      868,874              8,135        9,753        (734)            30        17,184


        Net income                                                     1,976                                    1,976
        Unrealized gains on
          securities, net of
          reclassification
          adjustment                                                                                 17            17
        Cash dividends ($.50 per
          share)                                                        (388)                                    (388)
        Exercise of stock options      4,670                 68                                                    68
        Tax benefit of stock
          options exercised and
          RRP                                                 4                                                     4
        Amortization of expense
          related to stock
          benefit plans                                      90                      202                          292
        Purchase of stock            (64,293)              (643)        (539)                                  (1,182)
                                     -------  ------    -------    ---------    --------      ---------     ---------
    Balances, December 31, 2001      809,251  $    0    $ 7,654    $  10,802    $   (532)     $      47     $  17,971
                                     =======  ======    =======    =========    ========      =========     =========
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                                         River Valley Bancorp
                                                 Consolidated Statements of Cash Flows
                                             Years Ended December 31, 2001, 2000 and 1999

                                                                       2001             2000              1999
                                                                ------------------------------------------------------
                                                                                   (In Thousands)
<S>                                                               <C>               <C>              <C>
    Operating Activities
        Net income                                                $        1,976    $        1,610   $        1,039
        Items not requiring (providing) cash
           Provision for loan losses                                         450               227              140
           Depreciation and amortization                                     311               240              250
           Deferred income tax                                                 3               (77)              38
           Investment securities amortization (accretion), net                 9               (26)             (95)
           Investment securities (gains) losses                              (17)                2               --
           Loans originated for sale in the secondary market             (48,428)           (2,614)         (10,552)
           Proceeds from sale of loans in the secondary market            46,101             2,632           14,226
           (Gain) loss on sale of loans                                     (311)              (18)              27
           Amortization of deferred loan origination cost                    157                99               93
           Amortization of expense related to stock benefit
              plans                                                          292               276              258
           Gain on sale of premises and equipment                             --               (42)             (11)
           Capitalized interest on construction                              (89)               (8)              --
        Net change in
           Interest receivable                                                (7)             (425)              13
           Interest payable                                                   15               268             (138)
        Other adjustments                                                    294              (116)              58
                                                                  --------------    --------------   --------------
               Net cash provided by operating activities                     756             2,028            5,346
                                                                  --------------    --------------   --------------
    Investing Activities
        Purchase of FHLB stock                                              (307)               --               --
        Purchases of securities available for sale                       (19,262)           (7,949)         (21,537)
        Proceeds from maturities of securities available for
          sale                                                             5,204             7,093           18,347
        Proceeds from sales of securities available for sale               3,689             2,002               --
        Proceeds from maturities of securities held to maturity               --             1,204            1,052
        Net change in loans                                              (15,078)          (26,165)          (6,673)
        Purchases of premises and equipment                               (2,784)           (1,143)            (245)
        Proceeds from sale of premises and equipment                          --                56               49
        Proceeds from sale of real estate acquired through
          foreclosure                                                        107                --               75
        Premiums paid on life insurance                                      (95)               --               --
                                                                  --------------    --------------   --------------
               Net cash used in investing activities                     (28,526)          (24,902)          (8,932)
                                                                  --------------    --------------   --------------
    Financing Activities
        Net change in
           Noninterest-bearing, interest-bearing demand and
              savings deposits                                             9,643            (2,991)           3,614
           Certificates of deposit                                         5,703            18,965           (7,514)
        Proceeds from borrowings                                          32,050            23,450            9,131
        Repayment of borrowings                                          (19,000)          (16,500)          (2,901)
        Cash dividends                                                      (261)             (350)            (277)
        Purchase of stock                                                 (1,182)           (1,367)          (2,724)
        Proceeds from exercise of stock options                               68                --               --
        Advances by borrowers for taxes and insurance                          8                 5                2
        Acquisition of stock for stock benefit plans                          --                (8)              --
                                                                  --------------    --------------   --------------
               Net cash provided (used) by financing activities           27,029            21,204             (669)
                                                                  --------------    --------------   --------------
    Net Change in Cash and Cash Equivalents                                 (741)           (1,670)          (4,255)

    Cash and Cash Equivalents, Beginning of Year                           6,382             8,052           12,307
                                                                  --------------    --------------   --------------

    Cash and Cash Equivalents, End of Year                        $        5,641    $        6,382   $        8,052
                                                                  ==============    ==============   ==============


    Additional Cash Flows Information
        Interest paid                                             $        6,691    $        5,369   $        4,755
        Income tax paid                                                    1,119               876              657
        Investment securities held to maturity transferred to
          available for sale                                                  --             1,934               --
</TABLE>
<PAGE>

                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)


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

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

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

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

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

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

     Cash  Equivalents  - The  Company  considers  all liquid  investments  with
     original maturities of three months or less to be cash equivalents.

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

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

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

<PAGE>

                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)


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

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

     The determination of the adequacy of the allowance for loan losses is based
     on estimates that are  particularly  susceptible to significant  changes in
     the economic environment and market conditions. Management believes that as
     of December 31, 2001,  the allowance  for loan losses is adequate  based on
     information currently available. A worsening or protracted economic decline
     in the areas within which the Bank operates  would  increase the likelihood
     of  additional  losses due to credit and market  risks and could create the
     need for additional loss reserves.

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

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

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

<PAGE>

                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)


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

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

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

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

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

     Reclassifications  of  certain  amounts  in the 2000 and 1999  consolidated
     financial statements have been made to conform to the 2001 presentation.



Note 2 - Restriction on Cash and Due From Banks

     The Bank is required to  maintain  reserve  funds in cash and/or on deposit
     with the Federal  Reserve Bank. The reserve  required at December 31, 2001,
     was $1,031,000.
<PAGE>


                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)

Note 3 - Investment Securities
<TABLE>
<CAPTION>
                                                                               2001
                                                                       Gross           Gross
                                                    Amortized       Unrealized       Unrealized         Fair
                                                      Cost             Gains           Losses           Value
                                                --------------------------------------------------------------------

           Available for sale
<S>                                               <C>              <C>              <C>             <C>
               Federal agencies                   $       14,756   $         179    $         100   $      14,835
               State and municipal                           335              12               --             347
               Mortgage-backed and other
                 asset-backed securities                     838               3               10             831
               Corporate obligations                       1,645              18               23           1,640
                                                  --------------   -------------    -------------   -------------
                  Total investment securities     $       17,574   $         212    $         133   $      17,653
                                                  ==============   =============    =============   =============


                                                                               2000
                                                                                       Gross
                                                    Amortized    Gross Unrealized    Unrealized         Fair
                                                      Cost             Gains           Losses           Value
                                                --------------------------------------------------------------------

           Available for sale
               Federal agencies                   $        4,921   $          68     $         --    $      4,989
               State and municipal                           336               4               --             340
               Mortgage-backed and other
                 asset-backed securities                   1,941               5               28           1,918
                                                  --------------   -------------    -------------   -------------
                  Total investment securities     $        7,198   $          77     $         28    $      7,247
                                                  ==============   =============    =============   =============
</TABLE>

     The  amortized  cost and fair  value of  securities  available  for sale at
     December 31,  2001,  by  contractual  maturity,  are shown below.  Expected
     maturities will differ from contractual maturities because issuers may have
     the right to call or prepay  obligations with or without call or prepayment
     penalties.

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

           One to five years                  $       16,676     $       16,759
           Five to ten years                              60                 63
                                              --------------     --------------
                                                      16,736             16,822
           Mortgage-backed securities                    212                214
           Other asset-backed securities                 626                617
                                              --------------     --------------
                  Totals                      $       17,574     $       17,653
                                              ==============     ==============

<PAGE>

                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)


     Securities with a carrying value of $622,000 and $6,851,000 were pledged at
     December  31,  2001 and  2000 to  secure  certain  deposits  and for  other
     purposes as permitted or required by law.

     Proceeds from sales of  securities  available for sale during 2001 and 2000
     were  $3,689,000  and  $2,002,000.  Gross  gains of $33,000 and $10,000 and
     gross  losses of $16,000 and $12,000 were  realized on those  sales.  There
     were no sales of securities available for sale during 1999.

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



Note 4 - Loans and Allowance
<TABLE>
<CAPTION>
                                                                                  2001                 2000
                                                                         -------------------------------------------
<S>                                                                        <C>                  <C>
           Residential real estate
               One-to-four family residential                              $         70,793     $         77,304
               Multi-family residential                                               3,932                3,319
               Construction                                                           6,874                6,827
           Nonresidential real estate and land                                       41,892               30,213
           Commercial                                                                19,216               16,361
           Consumer and other                                                        17,406               14,686
                                                                           ----------------     ----------------
                                                                                    160,113              148,710
           Unamortized deferred loan costs                                              356                  324
           Undisbursed loans in process                                              (3,163)              (6,362)
           Allowance for loan losses                                                 (1,972)              (1,702)
                                                                           ----------------     ----------------
                  Total loans                                              $        155,334     $        140,970
                                                                           ================     ================
</TABLE>

<TABLE>
<CAPTION>
                                                            2001                 2000                 1999
                                                    ----------------------------------------------------------------
<S>                                                   <C>                  <C>                  <C>
           Allowance for loan losses
               Balances, January 1                    $          1,702     $          1,522     $          1,477
               Provision for losses                                450                  227                  140
               Recoveries on loans                                  31                   37                   28
               Loans charged off                                  (211)                 (84)                (123)
                                                      ----------------     ----------------     ----------------
               Balances, December 31                  $          1,972     $          1,702     $          1,522
                                                      ================     ================     ================
</TABLE>

<PAGE>


                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)


     Information on impaired loans is summarized below.
<TABLE>
<CAPTION>

                                                                                 2001                 2000
                                                                         -------------------------------------------
<S>                                                                        <C>                  <C>
           Impaired loans with an allowance                                $            339     $            250
           Impaired loans for which the discounted cash flows or
              collateral value exceeds the carrying value of the loan                   357                  885
                                                                           ----------------     ----------------
                  Total impaired loans                                     $            696     $          1,135
                                                                           ================     ================
           Allowance for impaired loans (included in the Company's
              allowance for loan losses)                                   $             78     $             57


                                                                                  2001                2000
                                                                          ------------------------------------------

           Average balance of impaired loans                               $          1,352     $          1,128
           Interest income recognized on impaired loans                                 117                   89
           Cash-basis interest included above                                           110                   85

</TABLE>

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

     At December 31, 2001,  2000 and 1999, the Company had  nonperforming  loans
     totaling $690,000, $621,000, and $857,000, respectively.



Note 5 - Premises and Equipment
<TABLE>
<CAPTION>

                                                                                 2001                 2000
                                                                         -------------------------------------------

<S>                                                                        <C>                  <C>
           Land                                                            $            952     $            805
           Buildings                                                                  3,455                1,629
           Leasehold improvements                                                         2                  117
           Equipment                                                                  2,509                2,472
           Construction in progress                                                      --                  853
                                                                           ----------------     ----------------
                  Total cost                                                          6,918                5,876
           Accumulated depreciation and amortization                                 (1,539)              (3,059)
                                                                           ----------------     ----------------
                  Net                                                      $          5,379     $          2,817
                                                                           ================     ================
</TABLE>


<PAGE>

                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)

Note 6 - Deposits
<TABLE>
<CAPTION>
                                                                                   2001                2000
                                                                           -----------------------------------------

<S>                                                                          <C>                 <C>
           Demand deposits                                                   $         42,321    $         31,559
           Savings deposits                                                            20,089              21,208
           Certificates and other time deposits of $100,000 or more                    30,343              30,606
           Other certificates and time deposits                                        52,818              46,852
                                                                             ----------------    ----------------
                  Total deposits                                             $        145,571    $        130,225
                                                                             ================    ================


           Certificates and other time deposits maturing in

               2002                                                          $         64,564
               2003                                                                    11,981
               2004                                                                     4,244
               2005                                                                     1,008
               2006                                                                       883
               Thereafter                                                                 481
                                                                             ----------------
                                                                             $         83,161
                                                                             ================

Note 7 - Borrowings

                                                                                   2001                2000
                                                                           -----------------------------------------

           Federal Home Loan Bank advances                                   $         25,000    $         13,000
           Line of credit                                                               1,500                 450
                                                                             ----------------    ----------------
                  Total borrowings                                           $         26,500    $         13,450
                                                                             ================    ================
</TABLE>

     Maturities  by year for  advances at December 31, 2001 are  $21,000,000  in
     2002,  $1,000,000 in 2003,  $1,000,000 in 2006 and  $2,000,000 in 2011. The
     weighted-average  interest rate at December 31, 2001 and 2000 was 4.54% and
     6.35%.

     The Federal  Home Loan Bank  advances are secured by  first-mortgage  loans
     totaling  $54,440,000  at  December  31,  2001.  Advances  are  subject  to
     restrictions or penalties in the event of prepayment.

     The  Company  has a  $1,500,000  line  of  credit  with  another  financial
     institution,  which matures in February 2002 with a variable  interest rate
     of .5% under  prime.  The line of credit is  collateralized  by a pledge of
     1,000 shares of the Bank's stock.

<PAGE>

                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)

Note 8 - Loan Servicing

     Loans serviced for others are not included in the accompanying consolidated
     balance sheets.  The unpaid principal balances of loans serviced for others
     totaled $56,057,000, $37,562,000 and $40,212,000 at December 31, 2001, 2000
     and 1999, respectively.

     The  aggregate  fair  value of  capitalized  mortgage  servicing  rights at
     December 31, 2001, 2000 and 1999 totaled  $430,000,  $290,000 and $286,000.
     Comparable  market values and a valuation model that calculates the present
     value of future cash flows were used to estimate  fair value.  For purposes
     of measuring  impairment,  risk  characteristics  including  product  type,
     investor  type,  and interest  rates,  were used to stratify the originated
     mortgage servicing rights.
<TABLE>
<CAPTION>
                                                             2001                 2000                1999
                                                     ---------------------------------------------------------------

           Mortgage Servicing Rights
<S>                                                    <C>                  <C>                 <C>
               Balances, January 1                     $            227     $            225    $            222
               Servicing rights capitalized                         441                   26                 102
               Amortization of servicing rights                    (128)                 (24)                (99)
                                                       ----------------     ----------------    ----------------
                                                                    540                  227                 225
               Valuation allowance                                 (110)                  --                  --
                                                       ----------------     ----------------    ----------------
               Balances, December 31                   $            430     $            227    $            225
                                                       ================     ================    ================


        Activity in the valuation allowance for mortgage servicing rights was as follows:

                                                                                                      2001
                                                                                              ----------------------

           Balance, beginning of year                                                           $             --
               Additions                                                                                     110
               Reductions                                                                                     --
               Direct write downs                                                                             --
                                                                                                ----------------
           Balance, end of year                                                                 $            110
                                                                                                ================

</TABLE>

<PAGE>


                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)

Note 9 - Income Tax
<TABLE>
<CAPTION>
                                                             2001                 2000                1999
                                                     ---------------------------------------------------------------
<S>                                                    <C>                  <C>                 <C>
           Income tax expense (benefit)
               Currently payable
                  Federal                              $          1,000     $            805    $            505
                  State                                             254                  205                 159
               Deferred
                  Federal                                             2                  (61)                 38
                  State                                               1                  (16)                 --
                                                       ----------------     ----------------    ----------------
                      Total income tax expense         $          1,257     $            933    $            702
                                                       ================     ================    ================

           Reconciliation of federal statutory to
              actual tax expense
               Federal statutory income tax at 34%     $          1,099     $            865    $            592
               Effect of state income taxes                         168                  125                 105
               Other                                                (10)                 (57)                  5
                                                       ----------------     ----------------    ----------------
                      Actual tax expense               $          1,257     $            933    $            702
                                                       ================     ================    ================
           Effective tax rate                                     38.8%                36.7%              40.3%


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

                                                                                 2001                 2000
                                                                         -------------------------------------------
           Assets
               Allowance for loan losses                                    $            759     $           564
               Deferred compensation                                                     187                 147
               Pensions and employee benefits                                             35                  60
               Securities available for sale                                              72                  83
               Purchase accounting adjustments                                            80                 131
               Other                                                                      11                   6
                                                                            ----------------    ----------------
                      Total assets                                                     1,144                 991
                                                                            ----------------    ----------------
           Liabilities
               Depreciation and amortization                                            (119)               (103)
               Loan fees                                                                (139)               (127)
               Mortgage servicing rights                                                (215)                (93)
               Other                                                                     (17)                 --
                                                                            ----------------    ----------------
                      Total liabilities                                                 (490)               (323)
                                                                            ----------------    ----------------
                                                                            $            654     $           668
                                                                            ================    ================
</TABLE>

<PAGE>

                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)


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



Note 10 - Commitments and Contingent Liabilities

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

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

                                                 2001               2000
                                           -------------------------------------

           Commitments to extend credit    $       17,083     $       14,070
           Standby letters of credit                  258                196


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

<PAGE>

                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)


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

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



Note 11 - Dividend and Capital Restrictions

     Without prior approval, current regulations allow the Bank to pay dividends
     to the Company not  exceeding net profits (as defined) for the current year
     plus  those  for the  previous  two  years.  The  Bank  normally  restricts
     dividends  to a lesser  amount  because of the need to maintain an adequate
     capital  structure.  At December 31, 2001, the stockholder's  equity of the
     Bank was $19,016,000,  of which approximately  $1,709,000 was available for
     the payment of dividends.



Note 12 - Regulatory Capital

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

<PAGE>

                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)


     There are five capital categories defined in the regulations,  ranging from
     well capitalized to critically  undercapitalized.  Classification of a bank
     in any  of  the  undercapitalized  categories  can  result  in  actions  by
     regulators  that could have a material  effect on a bank's  operations.  At
     December 31, 2001 and 2000, the Bank is categorized as well capitalized and
     met all subject capital adequacy  requirements.  There are no conditions or
     events since  December 31, 2001 that  management  believes have changed the
     Bank's classification.
<TABLE>
<CAPTION>
                                                                     Required for Adequate        To Be Well
                                                    Actual                 Capital(1)            Capitalized(1)
                                              Amount       Ratio       Amount       Ratio      Amount      Ratio
                                           -------------------------------------------------------------------------
           2001
<S>                                          <C>             <C>     <C>               <C>    <C>            <C>
           Total risk-based capital(1) (to
              risk-weighted assets)          $  20,162       13.9%   $    11,627       8.0%   $  14,534      10.0%

           Tier 1 capital(1)(to
              risk-weighted assets)             18,398       12.7%         5,814       4.0%       8,720       6.0%

           Core capital(1)(to adjusted
              total assets)                     18,398        9.6%         7,635       4.0%       9,544       5.0%

           Core capital(1)(to adjusted
              tangible assets)                  18,398        9.6%         3,818       2.0%          --       N/A

           Tangible capital(1)(to adjusted
              total assets)                     18,398        9.6%         2,863       1.5%          --       N/A

           2000

           Total risk-based capital(1)(to
              risk-weighted assets)          $  18,031       15.5%   $     9,293       8.0%   $  11,617      10.0%

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

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

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

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

           (1) As defined by regulatory agencies


Note 13 - Employee Benefits

     The Bank  provides  pension  benefits for  substantially  all of the Bank's
     employees  and is a  participant  in a pension  fund known as the  Pentegra
     Group. This plan is a multi-employer  plan;  separate actuarial  valuations
     are not made with  respect  to each  participating  employer.  There was no
     pension  expense or benefit for the years ended December 31, 2001, 2000 and
     1999.

<PAGE>

                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)


     The Bank has a retirement  savings 401(k) plan in which  substantially  all
     employees may participate. The Bank matches employees' contributions at the
     rate of 50 percent for the first 6 percent of W-2 earnings  contributed  by
     participants.  The Bank's  expense  for the plan was  $35,000,  $20,000 and
     $24,000 for the years ended December 31, 2001, 2000 and 1999.

     The Bank has a supplemental  retirement  plan,  which  provides  retirement
     benefits to all directors.  The Bank's obligations under the plan have been
     funded via the purchase of key man life  insurance  policies,  of which the
     Bank  is  the  beneficiary.   Expense  recognized  under  the  supplemental
     retirement plan totaled approximately $42,000,  $24,000 and $32,000 for the
     years ended December 31, 2001, 2000 and 1999, respectively.

     As part of the conversion in 1996, the Company established an ESOP covering
     substantially  all  employees  of the Company and Bank.  The ESOP  acquired
     95,220  shares  of the  Company  common  stock  at  $10  per  share  in the
     conversion with funds provided by a loan from the Company. Accordingly, the
     $952,000 of common  stock  acquired by the ESOP is shown as a reduction  of
     stockholders'  equity.  Unearned ESOP shares  totaled  38,023 and 48,695 at
     December 31, 2001 and 2000 and had a fair value of $787,000 and $779,000 at
     December  31,  2001  and  2000.   Shares  are   released  to   participants
     proportionately  as the loan is repaid.  Dividends on allocated  shares are
     recorded  as  dividends  and  charged to retained  earnings.  Dividends  on
     unallocated  shares,  which may be distributed to  participants  or used to
     repay the loan, are treated as compensation  expense.  Compensation expense
     is recorded equal to the fair market value of the stock when contributions,
     which are determined  annually by the Board of Directors of the Company and
     Bank,  are made to the ESOP.  ESOP expense for the years ended December 31,
     2001,  2000 and 1999 was $196,000,  $156,000 and $147,000.  At December 31,
     2001, the ESOP had 57,197 allocated  shares,  38,023 suspense shares and no
     committed-to-be  released shares. At December 31, 2000, the ESOP had 46,525
     allocated shares,  48,695 suspense shares and no  committed-to-be  released
     shares.

     The Company also has a Recognition and Retention Plan (RRP), which provides
     for the award and issuance of up to 47,610 shares of the Company's stock to
     members of the Board of Directors  and  management.  The RRP has  purchased
     32,920 shares of the Company's common stock in the open market. At December
     31, 2001,  33,820 shares had been  awarded.  Common stock awarded under the
     RRP vests ratably over a five-year period,  commencing with the date of the
     award. Expense recognized under the RRP plan totaled approximately $98,000,
     $105,000 and $113,000 for the years ended December 31, 2001, 2000 and 1999,
     respectively.



Note 14 - Related Party Transactions

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


                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)


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

           Balances, January 1, 2001                        $            657

           Change in composition                                         129
           New loans, including renewals                                 885
           Payments, etc., including renewals                           (527)
                                                            ----------------
           Balances, December 31, 2001                      $          1,144
                                                            ================

     Deposits  from  related  parties held by the Banks at December 31, 2001 and
     2000 totaled $732,000 and $915,000.



Note 15 - Stock Option Plan

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

     Although  the  Company  has  elected  to follow  APB No.  25,  SFAS No. 123
     requires pro forma  disclosures  of net income and earnings per share as if
     the  Company  had  accounted  for its  employee  stock  options  under that
     Statement.  The fair value of each option grant was  estimated on the grant
     date using an option-pricing model with the following assumptions:
<TABLE>
<CAPTION>
                                                                 2001               2000                1999
                                                          ----------------------------------------------------------

<S>                                                              <C>            <C>                     <C>
           Risk-free interest rates                              5.1%           6.5 and 5.9%            5.5%
           Dividend yields                                       2.8%               2.7%                2.2%
           Volatility factors of expected market price of
              common stock                                       7.8%               11.7%               10.0%

           Weighted-average expected life of the options        10 years           10 years            10 years
</TABLE>

<PAGE>


                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)


     Under SFAS No. 123,  compensation  cost is  recognized in the amount of the
     estimated  fair value of the  options  and  amortized  to expense  over the
     options'  vesting  period.  The pro forma effect on net income and earnings
     per share of this statement are as follows:
<TABLE>
<CAPTION>
                                                                     2001             2000              1999
                                                               -----------------------------------------------------

<S>                                              <C>             <C>              <C>              <C>
           Net income                            As reported     $       1,976    $       1,610    $        1,039
                                                 Pro forma               1,941            1,575               999

           Basic earnings per share              As reported             2.50             1.88               1.03
                                                 Pro forma               2.45             1.83                .99

           Diluted earnings per share            As reported             2.44             1.87               1.03
                                                 Pro forma               2.40             1.83                .99

</TABLE>

     The following is a summary of the status of the Company's stock option plan
     and changes in that plan as of and for the years ended  December  31, 2001,
     2000 and 1999.

<TABLE>
<CAPTION>

                                            2001                        2000                       1999
                                                Weighted-                   Weighted-                  Weighted-
                                                 Average                     Average                    Average
                Options             Shares   Exercise Price    Shares    Exercise Price    Shares   Exercise Price
       -------------------------------------------------------------------------------------------------------------
<S>                                  <C>       <C>              <C>        <C>              <C>       <C>
            Outstanding,
              beginning of year      99,345    $     14.17      93,959     $     14.58      103,959   $     14.81
            Granted                   2,000          17.90      24,000           13.17       10,000         12.63
            Exercised                (4,670)         14.61
            Forfeited/expired       (10,592)         14.78     (18,614)          14.78      (20,000)        14.78
                                   --------                   --------                      -------

            Outstanding, end of
              year                   86,083    $     14.16      99,345     $     14.17       93,959   $     14.58
                                   ========                   ========                     ========

            Options exercisable
              at year end            53,287                     51,725                       39,787
            Weighted-average
              fair value of
              options granted
              during the year                  $      3.08                 $      3.18                $      2.79

</TABLE>

     As of December 31,  2001,  options  totaling  16,000 have  exercise  prices
     ranging from $10.75 to $12.63 and a weighted-average  remaining contractual
     life of 8.0 years,  options  totaling  68,083 have exercise  prices ranging
     from $13.97 to $14.78 and a weighted-average  remaining contractual life of
     6.0 years,  options  totaling  2,000 have an exercise price of $17.90 and a
     weighted-average remaining contractual life of 9.5 years.

<PAGE>


                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)

Note 16 - Earnings Per Share
<TABLE>
<CAPTION>
                                            2001                          2000                            1999
                                          Weighted-                     Weighted-   Per                 Weighted-
                                           Average   Per Share           Average   Share                 Average   Per Share
                                 Income    Shares     Amount   Income    Shares    Amount     Income     Shares     Amount
                               ---------------------------------------------------------------------------------------------
<S>                              <C>        <C>      <C>       <C>       <C>       <C>         <C>       <C>        <C>
           Basic Earnings Per
              Share

            Income available
               to common
               stockholders      $ 1,976    790,933  $   2.50  $1,610    858,059   $   1.88    $1,039    1,007,087  $   1.03
                                                     ========                      ========                         ========
           Effect Of Dilutive
              Stock Options                  17,433                        1,486
                                 -------    -------            -------   -------               ------    ---------
           Diluted Earnings
              Per Share

             Income available
                to common
                stockholders
                and assumed
                conversions      $ 1,976    808,366  $   2.44  $1,610    859,545   $   1.87    $1,039    1,007,087  $   1.03
                                 =======    =======  ========  ======    =======   ========    ======    =========  ========

</TABLE>

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



Note 17 - Fair Values of Financial Instruments

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

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

     Investment Securities - Fair values are based on quoted market prices.

     Loans Held for Sale - Fair values are based on quoted market prices.

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

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

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

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

<PAGE>

                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)


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

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

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

     Off-Balance  Sheet  Commitments - For fixed-rate and  adjustable-rate  loan
     commitments,  the fair value  estimate  considers  the  difference  between
     current  levels of  interest  rates and  committed  rates.  The  difference
     between the fair value and notional amount of outstanding  loan commitments
     at December 31, 2001 and 2000, was not material.

     The estimated  fair values of the Company's  financial  instruments  are as
     follows:
<TABLE>
<CAPTION>
                                                                  2001                            2000
                                                        Carrying          Fair           Carrying         Fair
                                                         Amount           Value           Amount          Value
                                                    ----------------------------------------------------------------
<S>                                                   <C>            <C>              <C>             <C>
           Assets
               Cash and cash equivalents              $      5,641   $       5,641    $      6,382    $     6,382
               Investment securities available for
                 sale                                       17,653          17,653           7,247          7,247
               Loans including loans held for sale,
                 net                                       157,972         158,931         140,970        139,660
               Interest receivable                           1,475           1,475           1,468          1,468
               Stock in FHLB                                 1,250           1,250             943            943

           Liabilities
               Deposits                                    145,571         145,640         130,225        130,168
               FHLB advances                                25,000          25,284          13,000         13,034
               Line of credit                                1,500           1,500             450            450
               Interest payable                                613             613             598            598
               Advance payments by borrowers for
                 taxes and insurance                            49              49              41             41

</TABLE>

<PAGE>


                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)

Note 18 - Condensed Financial Information (Parent Company Only)

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

                                                                                   2001                2000
                                                                           -----------------------------------------
<S>                                                                          <C>                 <C>
           Assets
               Cash and due from banks                                       $            400    $            202
               Investment in common stock of subsidiary                                19,016              17,161
               Other assets                                                               182                 271
                                                                             ----------------    ----------------
                  Total assets                                               $         19,598    $         17,634
                                                                             ================    ================

           Liabilities
               Borrowings                                                    $          1,500    $            450
               Dividends payable                                                          127                  --
                                                                             ----------------    ----------------
                  Total liabilities                                                     1,627                 450

           Stockholders' Equity                                                        17,971              17,184
                                                                             ----------------    ----------------
                  Total liabilities and stockholders' equity                 $         19,598    $         17,634
                                                                             ================    ================
</TABLE>

<TABLE>
<CAPTION>
                                          Condensed Statements of Income

                                                               2001                2000                1999
                                                       -------------------------------------------------------------
<S>                                                      <C>                 <C>                 <C>
           Income
               Dividends from subsidiary                 $            425    $          1,621    $          3,158
               Other income                                            45                  65                  62
                                                         ----------------    ----------------    ----------------
                  Total income                                        470               1,686               3,220
                                                         ----------------    ----------------    ----------------
           Expenses
               Interest expense                                        55                  63                 101
               Other expenses                                         153                 120                 105
                                                         ----------------    ----------------    ----------------
                  Total expenses                                      208                 183                 206
                                                         ----------------    ----------------    ----------------
           Income before income tax and equity in
              undistributed (distribution in excess
              of) income of subsidiary                                262               1,503               3,014
               Income tax benefit                                      65                  47                  58
                                                         ----------------    ----------------    ----------------
           Income before equity in undistributed
              (distribution in excess of) income of
              subsidiary                                              327               1,550               3,072
               Equity in undistributed
                 (distribution in excess of)
                 income of subsidiary                               1,649                  60              (2,033)
                                                         ----------------    ----------------    ----------------
           Net Income                                    $          1,976    $          1,610    $          1,039
                                                         ================    ================    ================
</TABLE>
<PAGE>

                              River Valley Bancorp
                   Notes to Consolidated Financial Statements
                        December 31, 2001, 2000 and 1999
                       (Table Dollar Amounts in Thousands
                            Except Per Share Amounts)


                       Condensed Statements of Cash Flows

                                                    2001       2000       1999
                                                  -----------------------------

Operating Activities
    Net income                                    $ 1,976    $ 1,610    $ 1,039
    Items not requiring (providing) cash           (1,453)        (4)     1,905
                                                  -------    -------    -------
       Net cash provided by operating activities      523      1,606      2,944
                                                  -------    -------    -------
Financing Activities
    Purchase of stock                              (1,182)    (1,367)    (2,724)
    Proceeds from exercise of stock options            68         --         --
    Acquisition of stock for stock benefit plans       --         (8)        --
    Proceeds from borrowings                        1,050        450      3,131
    Repayment of borrowings                            --       (500)    (2,901)
    Cash dividends                                   (261)      (350)      (277)
                                                  -------    -------    -------
       Net cash used in financing activities         (325)    (1,775)    (2,771)
                                                  -------    -------    -------
Net Change in Cash and Cash Equivalents               198       (169)       173

Cash and Cash Equivalents at Beginning of Year        202        371        198
                                                  -------    -------    -------
Cash and Cash Equivalents at End of Year          $   400    $   202    $   371
                                                  =======    =======    =======





<PAGE>





                      GENERAL INFORMATION FOR SHAREHOLDERS


Transfer Agent and Registrar:              Shareholder and General Inquiries:

Corporate Trust Services                   River Valley Bancorp
Fifth Third Center                         Attn: Matthew P. Forrester
38 Fountain Square Plaza                   430 Clifty Drive, P.O. Box 1590
Cincinnati, Ohio  45263                    Madison, Indiana  47250
Tel: (513) 579-5417                        Tel: (812) 273-4949
Fax: (513) 744-6785                        Fax: (812) 273-4944

Corporate Counsel:                         Special Counsel:

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

Annual and Other Reports:

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


Offices of River Valley Financial Bank:

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


Internet and E-MAIL Address:   rvfbank.com


Annual Meeting:

The Annual  Meeting of  Shareholders  of River  Valley  Bancorp  will be held on
Wednesday, April 17, 2002, at 3:00 PM, at 430 Clifty Drive, Madison, IN 47250.


<PAGE>

                      DIRECTORS OF THE COMPANY AND THE BANK



Fred W. Koehler         Matthew P. Forrester            Charles J. McKay
Chairman                Director & President            Director

Robert W. Anger         Michael J. Hensley              *****************
Director                Director

Jonnie L. Davis         Earl W. Johann                  Lonnie D. Collins
Director                Director                        Secretary


                EXECUTIVE OFFICERS OF RIVER VALLEY FINANCIAL BANK


Matthew P. Forrester        Mark A. Goley                 Anthony D. Brandon
President, CEO              Vice President of Lending     Vice President of Loan
                            Compliance Officer            Administration
Barbara J. Eades
Vice President of Retail    Larry C. Fouse                Deanna J. Liter
Banking                     Vice President of Finance     Vice President of Data
                                                          Services
Loy M. Skirvin              Dawn M. Moore
Vice President of Human     Internal Audit
Resources


OFFICERS AND MANAGERS OF RIVER VALLEY FINANCIAL BANK


Loan Officers                        Other Managers

James B. Allen                       Kenneth L. Cull - Collection Officer
Theresa A. Dryden                    Donald R. Davidson - Accounting Manager
Rick T. Nelson                       Mary Ellen McClelland - Executive Secretary
Robert J. Schoenstein--AVP           Luann Nay - Loan Administrator
Natasha Wells                        Kelly Shelton - Loan Operations Manager
                                     Teresa J. Smith - Data Processing Manager
                                     Sandy Stilwell - Customer Service Manager
                                     Mary Ellen Wehner - Commercial Loan
                                     Operations Manager
Branch Managers

Angela D. Adams
Debbie R. Finnegan
Rachael A. Goble
Linda L. Ralston
Rhonda E. Wingham