FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

(Mark One)

[X]           QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended      September 30, 1997
                               -------------------------------------

                                       OR

[ ]          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _______________

Commission File Number 2-47541

                              RIVER VALLEY BANCORP
             (Exact name of registrant as specified in its charter)

Indiana                                                        35-1984567
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                          Identification Number)

303 Clifty Drive
Madison, Indiana                                                  47250
------------------------------------                            --------
(Address of principal                                          (Zip Code)
executive office)

Registrant's telephone number, including area code: (812) 273-4949

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports)  and (2) has been subject to such filing  requirements  for the past 90
days.

Yes   X                                                      No

As of November 7, 1997,  the latest  practicable  date  1,190,250  shares of the
registrant's common stock, without par value, were issued and outstanding.









                               Page 1 of 18 pages

<PAGE>


                              River Valley Bancorp

                                      INDEX

                                                                          Page

PART I - FINANCIAL INFORMATION

           Consolidated Statements of Financial Condition                    3

           Consolidated Statements of Operations                             4

           Consolidated Statements of Cash Flows                             5

           Notes to Consolidated Financial Statements                        7

           Management's Discussion and Analysis of
           Financial Condition and Results of
           Operations                                                       11


PART II - OTHER INFORMATION                                                 17

SIGNATURES                                                                  18





























                                        2



<PAGE>
<TABLE>


                              River Valley Bancorp
<CAPTION>
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                        (In thousands, except share data)

                                                                                      September 30,        December 31,
         ASSETS                                                                                1997                1996

<S>                                                                                           <C>                 <C>       
Cash and due from banks                                                                  $    3,150          $    4,209
Federal funds sold                                                                              300                  -
Interest bearing deposits in other financial institutions                                       954               4,476
                                                                                         ----------           ---------
         Cash and cash equivalents                                                            4,404               8,685

Certificates of deposit in other financial institutions                                         896                 100
Investment securities designated as available for sale - at market                              767               3,448
Investment securities - at amortized cost, approximate market value of
  $3,467 and $5,434 as of September 30, 1997 and December 31, 1996                            3,500               5,500
Mortgage-backed securities designated as available for sale - at market                       4,385               5,041
Mortgage-backed and related securities - at cost, approximate market
  value of $6,087 and $7,794 as of September 30, 1997 and December 31, 1996                   6,096               7,805
Loans receivable - net                                                                      112,525             107,918
Loans held for sale - at lower of cost or market                                                 -                1,076
Office premises and equipment - at depreciated cost                                           1,812               2,057
Real estate acquired through foreclosure                                                         82                  -
Federal Home Loan Bank stock - at cost                                                          943                 943
Federal Reserve Bank stock - at cost                                                            144                  80
Accrued interest receivable on loans                                                            978                 819
Accrued interest receivable on mortgage-backed securities                                        62                  78
Accrued interest receivable on investments and interest-earning deposits                         56                 171
Goodwill, net of accumulated amortization                                                       252                 272
Cash surrender value of life insurance                                                          773                 747
Prepaid expenses and other assets                                                                94                 169
Prepaid federal income taxes                                                                     39                   4
Deferred tax asset                                                                              653                 628
                                                                                         ----------          ----------

         Total assets                                                                      $138,461            $145,541
                                                                                            =======             =======

         LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                                                   $115,676            $125,656
Advances from the Federal Home Loan Bank                                                      3,000               1,100
Advances by borrowers for taxes and insurance                                                    74                  70
Accrued interest payable                                                                        238                 279
Other liabilities                                                                             1,634               1,422
Dividends payable                                                                                48                  -
Minority interest in consolidated subsidiary                                                    180                 209
                                                                                         ----------          ----------
         Total liabilities                                                                  120,850             128,736

Stockholders' equity
  Preferred stock - 2,000,000 shares without par value
    authorized; no shares issued                                                                 -                   -
  Common stock - 5,000,000 shares without par value authorized;
    1,190,250 shares issued and outstanding                                                      -                   -
  Additional paid in capital                                                                 11,173              11,173
  Retained earnings - substantially restricted                                                7,520               6,635
  Shares acquired by stock benefit plans                                                     (1,033)               (952)
  Unrealized losses on securities designated as available for sale,
    net of related tax effects                                                                  (49)                (51)
                                                                                        -----------         -----------
         Total stockholders' equity                                                          17,611              16,805
                                                                                           --------            --------

         Total liabilities and stockholders' equity                                        $138,461            $145,541
                                                                                            =======             =======
</TABLE>

                                        3


<PAGE>

<TABLE>

                              River Valley Bancorp
<CAPTION>

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                        (In thousands, except share data)

                                                                         Nine months ended            Three months ended
                                                                            September 30,                September 30,
<S>                                                                      <C>          <C>             <C>          <C> 
                                                                         1997         1996            1997         1996
Interest income
  Loans                                                                $6,834       $3,364          $2,347       $1,113
  Mortgage-backed and related securities                                  564          424             180          133
  Investment securities                                                   220          426              64          135
  Interest-earning deposits and other                                     261          136              65           27
                                                                       ------       ------         -------      -------
         Total interest income                                          7,879        4,350           2,656        1,408

Interest expense
  Deposits                                                              3,654        2,492           1,203          801
  Borrowings                                                               93           47              59            3
                                                                      -------      -------         -------     --------
         Total interest expense                                         3,747        2,539           1,262          804
                                                                        -----        -----           -----       ------

         Net interest income                                            4,132        1,811           1,394          604

Provision for losses on loans                                             238           18              68            6
                                                                       ------      -------         -------     --------

         Net interest income after provision for losses on loans        3,894        1,793           1,326          598

Other income
  Insurance commissions                                                    10          156               3           52
  Loss on sale of investment and mortgage-backed securities                (4)          -               (7)          -
  Gain on sale of loans                                                    73           -               59           -
  Gain (loss) on sale of office premises and equipment                    202           -               (1)          -
  Service fees, charges and other operating                               589          172             192           75
                                                                       ------       ------          ------      -------
         Total other income                                               870          328             246          127

General, administrative and other expense
  Employee compensation and benefits                                    1,663          890             581          298
  Occupancy and equipment                                                 376          142             128           44
  Federal deposit insurance premiums                                       27          637              12          549
  Amortization of goodwill                                                 20            5               6            1
  Data processing                                                         189          206              56           65
  Other operating                                                         849          274             281           90
                                                                       ------       ------          ------      -------
         Total general, administrative and other expense                3,124        2,154           1,064        1,047
                                                                        -----        -----           -----        -----

         Earnings (loss) before income taxes (credits)                  1,640          (33)            508         (322)

Income taxes (credits)
  Current                                                                 685           58             197          (90)
  Deferred                                                                (25)         (68)             (4)         (28)
                                                                      -------      -------        --------      -------
         Total income taxes (credits)                                     660          (10)            193         (118)
                                                                       ------      -------          ------       ------

         NET EARNINGS (LOSS)                                          $   980     $    (23)        $   315      $  (204)
                                                                       ======      =======          ======       ====== 

         EARNINGS PER SHARE                                              $.90          N/A            $.29          N/A
                                                                          ===          ===             ===          ===
</TABLE>

                                                             4


<PAGE>

<TABLE>

                              River Valley Bancorp
<CAPTION>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                     For the nine months ended September 30,
                                 (In thousands)

<S>                                                                                              <C>               <C> 
                                                                                                 1997              1996

Cash flows from operating activities:
  Net earnings (loss) for the period                                                        $     980        $      (23)
  Adjustments to reconcile net earnings (loss) to net cash provided
  by (used in) operating activities:
    Amortization of premiums  and discounts on investments and
      mortgage-backed securities - net                                                             (5)               (2)
    Loss on sale of investment and mortgage-backed  securities designated
      as available for sale                                                                         4                -
    Loans originated for sale in the secondary market                                          (5,415)               -
    Proceeds from sale of loans in the secondary market                                         6,521                -
    Gain on sale of loans                                                                         (30)               -
    Amortization of deferred loan origination costs                                                 5                11
    Provision for losses on loans                                                                 238                18
    Depreciation and amortization                                                                 147                41
    Amortization of goodwill                                                                       20                 5
    Gain on sale of office premises and equipment                                                (202)               -
    Increase (decrease) in cash due to changes in:
      Accrued interest receivable on loans                                                       (159)               35
      Accrued interest receivable on mortgage-backed securities                                    16                 8
      Accrued interest receivable on investments and interest-bearing deposits                    115               145
      Prepaid expenses and other assets                                                            77              (331)
      Accrued interest payable                                                                    (41)                9
      Other liabilities                                                                           231               581
      Income taxes
        Current                                                                                   (35)              (40)
        Deferred                                                                                  (25)              (68)
                                                                                            ---------         ---------
         Net cash provided by operating activities                                              2,442               389

Cash flows provided by (used in) investing activities:
  Proceeds from maturity of investment securities                                               2,000             3,500
  Proceeds from sale of investment securities designated as available for sale                  2,698                -
  Proceeds from sale of mortgage-backed securities designated as available for sale             1,473                -
  Purchase of mortgage-backed securities                                                       (1,010)               -
  Principal repayments on mortgage-backed securities                                            1,886             1,686
  Loan principal repayments                                                                    24,034            13,301
  Loan disbursements                                                                          (28,966)          (14,110)
  Purchase of Federal Reserve Bank stock                                                          (64)               -
  Purchase of office equipment                                                                   (107)               -
  Proceeds from sale of office premises and equipment                                             407                -
  (Increase) decrease in certificates of deposit in other financial institutions - net           (796)              200
  Purchase of single premium life insurance                                                        -               (188)
  Increase in cash surrender value of life insurance                                              (26)              (18)
                                                                                            ---------         ---------
         Net cash provided by investing activities                                              1,529             4,371
                                                                                              -------           -------

         Net cash provided by operating and investing
           activities (subtotal carried forward)                                                3,971             4,760
                                                                                              -------           -------
</TABLE>

                                                             5


<PAGE>

<TABLE>

                              River Valley Bancorp
<CAPTION>

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                     For the nine months ended September 30,
                                 (In thousands)

<S>                                                                                              <C>               <C> 
                                                                                                 1997              1996

         Net cash provided by operating and investing
           activities (subtotal brought forward)                                               $3,971            $4,760

Cash flows provided by (used in) financing activities:
  Increase (decrease) in deposit accounts                                                      (9,980)            1,595
  Proceeds from Federal Home Loan Bank advances                                                 5,000                -
  Repayment of Federal Home Loan Bank advances                                                 (3,100)           (4,471)
  Advances by borrowers for taxes and insurance                                                     4                20
  Dividends on common stock                                                                       (95)               -
  Purchase of shares for stock benefit plans                                                      (81)               -
                                                                                              -------             ----
         Net cash used in financing activities                                                 (8,252)           (2,856)
                                                                                                -----             -----

Net increase (decrease) in cash and cash equivalents                                           (4,281)            1,904

Cash and cash equivalents at beginning of period                                                8,685             2,389
                                                                                                -----             -----

Cash and cash equivalents at end of period                                                     $4,404            $4,293
                                                                                                =====             =====


Supplemental disclosure of cash flow information: Cash paid during the year for:
    Federal income taxes                                                                      $   438          $     84
                                                                                               ======           =======

    Interest on deposits and borrowings                                                        $3,788            $2,530
                                                                                                =====             =====


Supplemental disclosure of noncash investing activities:
  Transfers from loans to real estate acquired through foreclosure                           $     82             $   -
                                                                                              =======              ====

  Unrealized gains on securities designated as available
    for sale, net of related tax effects                                                    $       2            $   62
                                                                                             ========            ======

  Recognition of mortgage servicing rights in accordance with
    SFAS No. 122                                                                             $     43            $   -
                                                                                              =======             ====

</TABLE>









                                                             6



<PAGE>


                              River Valley Bancorp

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



On March 5, 1996,  the Board of Directors of Madison First  Federal  Savings and
Loan  Association  ("First  Federal")  adopted an overall plan of conversion and
reorganization  (the "Plan")  whereby  First  Federal would convert to the stock
form  of  ownership,  followed  by  the  issuance  of  all  of  First  Federal's
outstanding  stock to a newly  formed  holding  company,  River  Valley  Bancorp
("River  Valley" or the  "Corporation").  Pursuant to the Plan, the  Corporation
offered for sale up to 1,190,250  common  shares to certain  depositors of First
Federal and members of the  community.  The conversion was completed on December
20,  1996,  and  resulted in the  issuance  of  1,190,250  common  shares of the
Corporation  which,  after  consideration  of offering and acquisition  expenses
totaling  approximately  $730,000,  and shares  purchased  by the ESOP  totaling
$952,000,  resulted in net  capital  proceeds of $10.2  million.  The  financial
statements  included herein for periods prior to December 20, 1996, are those of
First Federal prior to the conversion to stock form.

In  connection  with  the  Conversion,   River  Valley  acquired  95.6%  of  the
outstanding   stock  of  Citizens  National  Bank  of  Madison  (the  "Bank"  or
"Citizens")  for $3.1  million.  This  acquisition  was  accounted for using the
purchase  method of accounting  and as such,  the September 30, 1996,  financial
statements presented herein have not been restated for this acquisition.

The Corporation is a financial  institution holding company whose activities are
primarily   limited  to  holding  the  stock  of  First  Federal  and  the  Bank
(collectively,  "the Institutions").  The Institutions conduct a general banking
business in southeastern  Indiana which consists of attracting deposits from the
general  public  and  applying  those  funds to the  origination  of  loans  for
consumer,  residential and commercial purposes. The Institutions'  profitability
is  significantly  dependent on net  interest  income,  which is the  difference
between interest income generated from  interest-earning  assets (i.e. loans and
investments) and the interest expense paid on interest-bearing liabilities (i.e.
customer  deposits and borrowed  funds).  Net interest income is affected by the
relative amount of interest-earning assets and interest-bearing  liabilities and
the interest  received or paid on these  balances.  The level of interest  rates
paid or received by First Federal and the Bank can be  significantly  influenced
by a number of competitive factors,  such as governmental  monetary policy, that
are outside of management's control.

1.  Basis of Presentation

The accompanying unaudited financial statements were prepared in accordance with
instructions  for Form 10-QSB and,  therefore,  do not  include  information  or
footnotes necessary for a complete  presentation of financial position,  results
of operations and cash flows in conformity  with generally  accepted  accounting
principles.   Accordingly,   these  financial   statements  should  be  read  in
conjunction with the consolidated  financial statements and notes thereto of the
Corporation  included  in the  Annual  Report on Form  10-KSB for the year ended
December  31,  1996.  However,  in the opinion of  management,  all  adjustments
(consisting of only normal  recurring  accruals)  which are necessary for a fair
presentation  of the financial  statements  have been  included.  The results of
operations  for the nine and three month  periods  ended  September 30, 1997 and
1996 are not necessarily  indicative of the results which may be expected for an
entire year.




                                        7


<PAGE>


                              River Valley Bancorp

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


2.  Principles of Consolidation

The consolidated  financial  statements  include the accounts of the Corporation
and its  subsidiaries,  the Bank and First Federal and its  subsidiary,  Madison
First  Service  Corporation  ("First  Service").  All  significant  intercompany
balances and transactions have been eliminated in the accompanying  consolidated
financial statements.

3.  Effect of Recent Accounting Pronouncements

In October 1995, the Financial  Accounting  Standards  Board (the "FASB") issued
Statement of Financial  Accounting  Standards ("SFAS") No. 123,  "Accounting for
Stock-Based  Compensation,"  establishing  financial  accounting  and  reporting
standards  for  stock-based  compensation  plans.  SFAS No. 123  encourages  all
entities to adopt a new method of accounting to measure compensation cost of all
stock  compensation  plans based on the estimated fair value of the award at the
financial statement date. Companies are, however, allowed to continue to measure
compensation  cost for those plans  using the  intrinsic  value based  method of
accounting,  which generally does not result in compensation expense recognition
for most plans.  Companies that elect to remain with the existing accounting are
required to disclose in a footnote  to the  financial  statements  pro forma net
earnings  and, if  presented,  earnings  per share,  as if SFAS No. 123 had been
adopted.  The  accounting  requirements  of  SFAS  No.  123  are  effective  for
transactions  entered  into during  fiscal  years that begin after  December 15,
1995, although companies are required to disclose information for awards granted
in their first fiscal year  beginning  after  December 15, 1994.  Management has
determined  that the  Corporation  will  continue  to  account  for  stock-based
compensation in accordance with Accounting  Principles Board Opinion No. 25, and
therefore  the  disclosure  provisions  of  SFAS  No.  123  have  no  effect  on
consolidated financial position or results of operations.

In June 1996,  the FASB  issued  SFAS No.  125,  "Accounting  for  Transfers  of
Financial Assets,  Servicing Rights,  and  Extinguishment of Liabilities",  that
provides  accounting  guidance on transfers of  financial  assets,  servicing of
financial assets, and extinguishment of liabilities.  SFAS No. 125 introduces an
approach to accounting  for transfers of financial  assets that provides a means
of dealing with more complex transactions in which the seller disposes of only a
partial  interest in the assets,  retains  rights or  obligations,  makes use of
special  purpose  entities  in the  transaction,  or  otherwise  has  continuing
involvement with the transferred assets. The new accounting method,  referred to
as the financial components  approach,  provides that the carrying amount of the
financial assets transferred be allocated to components of the transaction based
on their relative fair values.  SFAS No. 125 provides  criteria for  determining
whether control of assets has been relinquished and whether a sale has occurred.
If the transfer  does not qualify as a sale,  it is  accounted  for as a secured
borrowing. Transactions subject to the provisions of SFAS No. 125 include, among
others, transfers involving repurchase agreements,  securitizations of financial
assets,  loan   participations,   factoring   arrangements,   and  transfers  of
receivables with recourse.






                                        8



<PAGE>


                              River Valley Bancorp

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


3.  Effect of Recent Accounting Pronouncements (continued)

An entity that undertakes an obligation to service  financial assets  recognizes
either a servicing asset or liability for the servicing contract (unless related
to a securitization of assets,  and all the securitized  assets are retained and
classified  as  held-to-maturity).  A  servicing  asset  or  liability  that  is
purchased or assumed is initially recognized at its fair value. Servicing assets
and  liabilities are amortized in proportion to and over the period of estimated
net  servicing  income  or net  servicing  loss and are  subject  to  subsequent
assessments for impairment based on fair value.

SFAS No. 125 provides that a liability is removed from the balance sheet only if
the debtor  either pays the creditor and is relieved of its  obligation  for the
liability or is legally released from being the primary obligor.

SFAS No. 125 is effective for  transfers  and servicing of financial  assets and
extinguishment  of liabilities  occurring  after December 31, 1997, and is to be
applied  prospectively.  Earlier or  retroactive  application  is not permitted.
Management  does not believe that  adoption of SFAS No. 125 will have a material
adverse effect on River Valley's  consolidated  financial position or results of
operations.

In March 1997,  the FASB issued SFAS No.  128,  "Earnings  Per Share",  which is
effective for financial  statements  for periods ending after December 15, 1997,
including  interim periods.  SFAS No. 128 simplifies the calculation of earnings
per share by  replacing  primary  EPS with  basic  EPS.  It also  requires  dual
presentation  of basic EPS and diluted EPS for  entities  with  complex  capital
structures.  Basic EPS includes no dilution  and is computed by dividing  income
available  to  common  shareholders  by  the   weighted-average   common  shares
outstanding  for the period.  Diluted EPS  reflects  the  potential  dilution of
securities  that could share in  earnings,  such as stock  options,  warrants or
other  common stock  equivalents.  All prior period EPS data will be restated to
conform  with the new  presentation.  SFAS  No.  128 is not  expected  to have a
material impact on the Corporation's financial statements.

     In February 1997, the FASB issued SFAS No. 129, "Disclosures of Information
about Capital Structure." SFAS No. 129 consolidated existing accounting guidance
relating to  disclosure  about a company's  capital  structure.  SFAS No. 129 is
effective for financial  statements  for periods ending after December 15, 1997.
SFAS No.  129 is not  expected  to have a material  impact on the  Corporation's
financial statements.

In June 1997, the FASB issued SFAS No. 130,  "Reporting  Comprehensive  Income."
SFAS No. 130  establishes  standards for reporting and display of  comprehensive
income and its components (revenues,  expenses,  gains and losses) in a full set
of general-purpose  financial  statements.  SFAS No. 130 requires that all items
that are required to be recognized under  accounting  standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same  prominence  as other  financial  statements.  It does  not  require  a
specific  format for that  financial  statement  but requires that an enterprise
display an amount representing total comprehensive income for the period in that
financial statement.




                                        9



<PAGE>


                              River Valley Bancorp

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


3.  Effect of Recent Accounting Pronouncements (continued)

SFAS  No.  130  requires  that  an  enterprise   (a)  classify  items  of  other
comprehensive  income by their nature in a financial  statement  and (b) display
the accumulated balance of other  comprehensive  income separately from retained
earnings and additional  paid-in capital in the equity section of a statement of
financial  position.  SFAS No. 130 is effective for fiscal years beginning after
December 15, 1997.  Reclassification of financial statements for earlier periods
provided for comparative  purposes is required.  SFAS No. 130 is not expected to
have a material impact on the Corporation's financial statements.

In June 1997,  the FASB issued SFAS No. 131,  "Disclosures  about Segments of an
Enterprise and Related  Information." SFAS No. 131 significantly changes the way
that public business  enterprises report information about operating segments in
annual financial  statements and requires that those enterprises report selected
information  about reportable  segments in interim  financial  reports issued to
shareholders.  It also  establishes  standards  for  related  disclosures  about
products and services, geographic areas and major customers. SFAS No. 131 uses a
"management  approach" to disclose  financial and descriptive  information about
the way that management  organizes the segments within the enterprise for making
operating  decisions  and  assessing  performance.  For  many  enterprises,  the
management  approach  will likely  result in more segments  being  reported.  In
addition,  SFAS No. 131 requires  significantly more information to be disclosed
for each reportable segment than is presently being reported in annual financial
statements  and also requires that selected  information  be reported in interim
financial statements. SFAS No. 131 is effective for fiscal years beginning after
December 15, 1997. SFAS No. 131 is not expected to have a material impact on the
Corporation's financial statements.

4.  Earnings Per Share

Earnings  per  share  is  computed  based  upon  the   weighted-average   shares
outstanding during the period,  less shares in the ESOP that are unallocated and
not committed to be released. Weighted-average common shares deemed outstanding,
which gives effect to 95,220 unallocated ESOP shares, totaled 1,095,050 for each
of the three and nine month periods ended  September 30, 1997. The provisions of
Accounting  Principles  Board  Opinion  No. 15,  "Earnings  Per  Share",  is not
applicable  for the three and nine  months  ended  September  30,  1997,  as the
Corporation completed its conversion to stock form in December 1996.

5.  Reclassifications

Certain  reclassifications  have  been made to the 1996  consolidated  financial
statements to conform to the September 30, 1997 presentation.

6.  Proposed Legislation

Congress is considering  legislation  to eliminate the federal  savings and loan
charter  and  separate  federal  regulation  of savings  and loan  associations.
Pursuant to such  legislation,  Congress  may  develop a common  charter for all
financial  institutions,  eliminate the OTS and regulate First Federal as a bank
or require it to change its charter to that of a national bank.  Management does
not  believe  the  pending  legislation  would  have a  material  effect  on the
financial statements of the Corporation.


                                       10


<PAGE>


                              River Valley Bancorp

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

     For the three and nine month periods ended September 30, 1997 and 1996


Forward-Looking Statements

In addition to historical information contained herein, the following discussion
contains  forward-looking  statements  that  involve  risks  and  uncertainties.
Economic  circumstances,  the  Corporation's  operations  and the  Corporation'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 changes in the economy
and interest rates in the nation and the Corporation's market area generally.

Some of the  forward-looking  statements  included  herein  are  the  statements
regarding management's determination of the amount and adequacy of the allowance
for losses on loans,  legislative  changes  with  respect to the federal  thrift
charter and the effect of certain accounting pronouncements.


Discussion of Financial Condition Changes from December 31, 1996 to
  September 30, 1997

At  September  30, 1997,  River  Valley's  consolidated  assets  totaled  $138.5
million,  a decrease of $7.1 million,  or 4.9%, from the December 31, 1996 total
of $145.5 million.  The decrease in assets resulted primarily from a decrease in
the  deposit  portfolio  of $10.0  million,  which  was  partially  offset by an
increase  in  advances  from the  Federal  Home  Loan Bank of $1.9  million  and
undistributed net earnings of $885,000.

Liquid assets (i.e.,  cash,  federal funds sold,  interest-earning  deposits and
certificates of deposit) decreased by $3.5 million from December 31, 1996 levels
to a total of $5.3 million at September 30, 1997.  Investment securities totaled
$4.3 million at September 30, 1997, a decrease of $4.7 million,  or 52.3%,  from
December 31, 1996 levels. During the nine month period ended September 30, 1997,
maturities  of  investment  securities  totaled  $2.0  million,  while  sales of
investment  securities  designated  as available  for sale totaled $2.7 million.
Mortgage-backed  securities  decreased by $2.4 million,  or 18.4%, to a total of
$10.5  million at September 30, 1997,  primarily due to principal  repayments of
$1.9 million and sales of mortgage-backed securities designated as available for
sale of $1.5 million.

The  decrease  in liquid  assets,  investments  and  mortgage-backed  securities
resulted from the utilization of these assets to fund loan  originations and the
sale of deposits related to the disposition of the Hanover, Indiana branch which
was consummated in February 1997.

Loans  receivable,  including  loans held for sale,  totaled  $112.5  million at
September  30,  1997,  an increase  of $3.5  million,  or 3.2%,  over the $109.0
million total at December 31, 1996.  The increase  resulted  primarily from loan
originations during the period of $34.4 million,  which were partially offset by
principal repayments of $24.0 million and sales of $6.5 million.

The  Corporation's  consolidated  allowance for loan losses totaled $1.2 million
and $1.1  million at September  30, 1997 and  December  31, 1996,  respectively,
which  represented  1.1% and 1.0% of total loans at those  dates.  Nonperforming
loans (defined as loans delinquent  greater than 90 days and loans on nonaccrual
status)  totaled  $897,000 and  $819,000 at September  30, 1997 and December 31,
1996, respectively.

                                       11


<PAGE>


                              River Valley Bancorp

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

     For the three and nine month periods ended September 30, 1997 and 1996


Discussion  of Financial  Condition  Changes from December 31, 1996 to September
30, 1997 (continued)

Although management believes that its allowance for loan losses at September 30,
1997 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  decreased by $10.0  million,  or 7.9%,  to a total of $115.7  million,
compared to the $125.7  million  total at December 31, 1996.  The decline can be
attributed  primarily to $6.8 million of deposits sold in  conjunction  with the
aforementioned sale of First Federal's Hanover branch.

Advances  from the Federal Home Loan Bank totaled $3.0 million at September  30,
1997,  an increase of $1.9  million,  or 172.7%,  over the $1.1 million total at
December 31, 1996.  The increase was due to current  period  borrowings  of $5.0
million,  offset by  repayments of $3.1 million.  The  borrowings  were deployed
primarily into loan originations.

Stockholders' equity totaled $17.6 million at September 30, 1997, an increase of
$806,000,  or 4.8%,  over the $16.8  million  total at December  31,  1996.  The
increase  resulted  primarily  from  current  period  earnings of $980,000 and a
$2,000 decrease in the unrealized  losses on securities  designated as available
for sale,  partially offset by the declaration and payment of dividends totaling
$95,000 and the funding of certain  stock benefit plans  totaling  $81,000.  The
Institutions are each required to maintain minimum  regulatory  capital pursuant
to  federal  regulations.  At  September  30,  1997,  each of the  Institutions'
regulatory capital exceeded all applicable regulatory capital requirements.


Comparison of Results of Operations for the Nine Months Ended September 30, 
  1997 and 1996

Increases in the level of income and expenses during the nine month period ended
September 30, 1997, as compared to the comparable period in 1996, are mainly due
to the inclusion of the accounts of Citizens National Bank of Madison, which was
acquired by River Valley on December 20, 1996,  in a  transaction  accounted for
using the purchase method of accounting.  Accordingly, the statement of earnings
and the  statement of cash flows for the nine month period ended  September  30,
1996, were not restated for the acquisition.

General

River  Valley's  net  earnings  for the nine months  ended  September  30, 1997,
totaled  $980,000,  an  increase  of $1.0  million,  over the  $23,000  net loss
reported in the  comparable  1996  period.  The increase in earnings in the 1997
period is primarily  attributable  to an increase in net interest income of $2.3
million and an increase of $542,000 in other income, which were partially offset
by an increase in the provision for losses on loans of $220,000,  an increase in
general,  administrative  and other  expense of $970,000  and an increase in the
provision for federal income taxes of $670,000.


                                       12


<PAGE>


                              River Valley Bancorp

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

     For the three and nine month periods ended September 30, 1997 and 1996


Comparison of Results of Operations for the Nine Months Ended September 30, 
  1997 and 1996 (continued)

Net Interest Income

Total interest income for the nine months ended September 30, 1997,  amounted to
$7.9 million,  an increase of $3.5 million, or 81.1%, over the comparable period
in 1996,  reflecting  the effects of growth in average  interest-earning  assets
outstanding, coupled with an increase in yield year-to-year.  Interest income on
loans and  mortgage-backed  securities  totaled $7.4 million for the nine months
ended  September  30,  1997,  an increase of $3.6  million,  or 95.3%,  over the
comparable 1996 period.  The increase resulted primarily from the $55.4 million,
or  82.8%,  increase  in  the  average  balance  of  loans  and  mortgage-backed
securities outstanding  year-to-year,  coupled with a 46 basis point increase in
yield, to 8.07% in 1997.  Interest  income on investments  and  interest-earning
deposits  decreased  by  $81,000,  or 14.4%,  due to a decrease  in the  average
balance  outstanding  of $1.1 million and an approximate 34 basis point decrease
in yield from the comparable 1996 period.

Interest expense on deposits increased by $1.2 million,  or 46.6%, to a total of
$3.7 million for the nine months ended  September  30, 1997,  due primarily to a
$43.2 million increase in the average balance of deposits outstanding, which was
partially  offset by a decline in the  weighted-average  cost of  deposits of 15
basis points, to 4.09% in 1997.  Interest expense on borrowings  totaled $93,000
for the nine months ended September 30, 1997, an increase of $46,000,  or 97.9%,
over the  comparable  period in 1996.  The increase  resulted  primarily from an
increase  in  average  borrowings  outstanding  year-to-year,  coupled  with  an
increase in average cost.

As a result of the foregoing  changes in interest  income and interest  expense,
net interest income  increased by $2.3 million,  or 128.2%,  for the nine months
ended  September  30,  1997,  compared  to the  comparable  period in 1996.  The
interest  rate spread  increased by  approximately  73 basis points for the nine
months ended  September 30, 1997, to 3.81% from 3.08% in the 1996 period,  while
the net interest  margin  amounted to  approximately  3.12% in 1997 and 2.31% in
1996.

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 the
Institutions,  the status of past due principal and interest  payments,  general
economic conditions, particularly as such conditions relate to the Institutions'
market area, and other factors related to the collectibility of the Institutions
loan  portfolio.  As a result of such analysis,  management  recorded a $238,000
provision for losses on loans for the nine months ended  September 30, 1997. The
current  period  provision  generally  reflects the  provision  associated  with
Citizens loan portfolio, as compared to the primarily residential loan portfolio
of First Federal prior to the acquisition.  During the 1997 period, Citizens net
charge-offs  amounted  to  approximately  $111,000,  primarily  related  to  the
consumer loan portfolio. While management believes that the allowance for losses
on loans is adequate at September 30, 1997,  based upon the 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.

                                       13


<PAGE>


                              River Valley Bancorp

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

     For the three and nine month periods ended September 30, 1997 and 1996


Comparison of Results of Operations for the Nine Months Ended September 30, 
  1997 and 1996 (continued)

Other Income

Other  income  increased  by  $542,000,  or 165.2%,  for the nine  months  ended
September 30, 1997,  as compared to the same period in 1996,  due primarily to a
$202,000 gain on sale of office premises and equipment,  coupled with a $417,000
increase in service fees,  charges and other operating income and a $73,000 gain
on sale of loans,  which  were  partially  offset by a decline of  $146,000,  or
93.6%,  in  insurance  commissions  year-to-year.  The  gain on  sale of  office
premises resulted from First Federal's sale of a branch office facility, located
in Hanover,  Indiana, which was consummated on February 28, 1997, as required in
accordance with the terms of regulatory approval of the acquisition of the Bank.
The decline in insurance  commissions  resulted from First Federal's sale of its
insurance agency subsidiary during the last quarter of 1996. The increase in the
service fees, charges and other operating income primarily reflects inclusion of
the effect of the Bank's operations during the period.

General, Administrative and Other Expense

General,  administrative  and other  expense  increased by  $970,000,  or 45.0%,
during the nine months ended September 30, 1997,  compared to the same period in
1996. This increase resulted  primarily from a $773,000,  or 86.9%,  increase in
employee compensation and benefits, a $234,000, or 164.8%, increase in occupancy
and equipment  expense and a $575,000,  or 209.9%,  increase in other  operating
expense,  which were  partially  offset by a  $610,000,  or 95.8%,  decrease  in
federal  deposit  insurance  premiums.   As  previously   discussed,   the  1997
consolidated  statements of operations  include the accounts of Citizens,  while
the 1996  statements  have not been  restated  to  include  the  effects  of the
acquisition  of  Citizens.  The  increase in general,  administrative  and other
expense is primarily  attributable to the addition of the Bank partially  offset
by the absence of the SAIF recapitalization assessment for the nine month period
ended September 30, 1997, and the resulting lower insurance premiums.

Income Taxes

The provision  for income taxes  increased by $670,000 for the nine months ended
September  30,  1997,  as  compared to the same  period in 1996.  This  increase
resulted  primarily from an increase in net earnings before tax of $1.7 million.
The effective tax rates were 40.2% and 30.3% for the nine months ended September
30, 1997 and 1996, respectively.








                                       14



<PAGE>


                              River Valley Bancorp

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

     For the three and nine month periods ended September 30, 1997 and 1996


Comparison of Results of Operations for the Three Months Ended September 30, 
  1997 and 1996

Increases in the level of income and expense during the three month period ended
September 30, 1997, as compared to the comparable quarter in 1996, is mainly due
to the inclusion of the accounts of Citizens National Bank of Madison, which was
acquired by River Valley on December 20, 1996,  in a  transaction  accounted for
using the purchase method of accounting.  Accordingly, the statement of earnings
for the  quarter  ended  September  30,  1996  has  not  been  restated  for the
acquisition.

General

River  Valley's net earnings  for the three  months  ended  September  30, 1997,
totaled  $315,000,  an increase of  $519,000,  over the $204,000 net loss in the
comparable 1996 period. The increase in earnings in the 1997 period is primarily
attributable  to an increase in net interest  income of $790,000 and an increase
of $119,000 in other income,  which were partially  offset by an increase in the
provision for losses on loans of $62,000, an increase in general, administrative
and other  expense of  $17,000,  and an increase  in the  provision  for federal
income taxes of $311,000.

Net Interest Income

Total interest  income for the three months ended September 30, 1997 amounted to
$2.7 million, an increase of $1.2 million, or 88.6%, over the comparable quarter
in 1996,  reflecting  the effects of growth in average  interest-earning  assets
outstanding,  coupled with an increase in average yield  year-to-year.  Interest
income on loans and  mortgage-backed  securities  totaled  $2.5  million for the
three months ended  September 30, 1997, an increase of $1.3 million,  or 102.8%,
over the comparable 1996 quarter. The increase resulted primarily from the $56.6
million,  or 85.0%,  increase in the average balance  outstanding  year-to-year.
Interest  income on  investments  and  interest-earning  deposits  decreased  by
$33,000,  or 20.4%, due to a decrease in the average balance outstanding of $2.0
million and an  approximate 7 basis point  decrease in yield over the comparable
1996 period.

Interest expense on deposits increased by $402,000, or 50.2%, to a total of $1.2
million for the quarter  ended  September  30,  1997,  due  primarily to a $40.1
million  increase  in the  average  balance of  deposits  outstanding.  Interest
expense on borrowings  totaled  $59,000 for the three months ended September 30,
1997, an increase of $56,000 over the  comparable  quarter in 1996. The increase
resulted   primarily  from  a  $4.0  million  increase  in  average   borrowings
outstanding year-to-year.

As a result of the foregoing  changes in interest  income and interest  expense,
net interest income increased by $790,000, or 130.8%, for the three months ended
September 30, 1997, as compared to the comparable  quarter in 1996. The interest
rate spread amounted to  approximately  3.87% for the 1997 quarter,  compared to
3.07% in 1996, while the net interest margin totaled  approximately 4.24% in the
1997 quarter, compared to 3.14% in 1996.


                                       15



<PAGE>


                              River Valley Bancorp

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

     For the three and nine month periods ended September 30, 1997 and 1996


Comparison of Results of Operations for the Three Months Ended September 30, 
  1997 and 1996 (continued)

Provision for Losses on Loans

The provision for losses on loans  increased by $62,000 over the comparable 1996
quarter to a total of $68,000.  The current period provision  generally reflects
the growth in the  non-residential  real estate and commercial loans portfolios,
integrated with a stable level of nonperforming loans in the period.

Other Income

Other  income  increased  by  $119,000,  or 93.7%,  for the three  months  ended
September 30, 1997,  as compared to the same period in 1996,  due primarily to a
$59,000 gain on sale of loans coupled with a $117,000  increase in service fees,
charges,  and other operating income,  which were partially offset by decline of
$49,000,  in  insurance  commissions  year-to-year.  The  decline  in  insurance
commissions  resulted  from First  Federal's  sale of its  insurance  subsidiary
during the last quarter of 1996.

General, Administrative and Other Expense

General,  administrative and other expense increased by $17,000, or 1.6%, during
the three months ended September 30, 1997,  compared to the same period in 1996.
This increase resulted primarily from a $283,000, or 95.0%, increase in employee
compensation and benefits,  an $84,000 increase in occupancy and equipment and a
$191,000 increase in other operating  expense,  which were partially offset by a
$537,000,   or  97.8%,  decrease  in  federal  deposit  insurance  premiums.  As
previously discussed, the 1997 consolidated statements of operations include the
accounts of Citizens while the 1996 statements have not been restated to include
the  effects  of  the   acquisition  of  Citizens.   The  increase  in  general,
administrative  and other expense is primarily  attributable  to the addition of
the Bank partially offset by the absence of the SAIF recapitalization assessment
for the three month period ended  September 30, 1997,  and the  resulting  lower
insurance premiums.

Income Taxes

The provision for income taxes  increased by $311,000 for the three months ended
September  30,  1997,  as  compared to the same  period in 1996.  This  increase
resulted primarily from an increase in net earnings before tax of $830,000.  The
effective  tax rates  amounted  to 38.0% and  36.6% for the three  months  ended
September 30, 1997 and 1996, respectively.






                                       16



<PAGE>


                              River Valley Bancorp

                                     PART II

ITEM 1.  Legal Proceedings

                  Not applicable

ITEM 2.  Changes in Securities

                  None

ITEM 3.  Defaults Upon Senior Securities

                  Not applicable

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

                  None.

ITEM 5.  Other Information

                  On September 26, 1997, River Valley Bancorp, Citizens National
                  Bank of Madison (the "Bank") and Madison First Federal Savings
                  and  Loan  Association  executed  an  Agreement  and  Plan  of
                  Reorganization (the "Merger Agreement") which provides for the
                  merger of the Bank into First  Federal.  The Merger  Agreement
                  also   changes  the   corporate   title  of  the   post-merger
                  institution to River Valley Financial Bank. Upon  consummation
                  of the  merger,  the  Bank's  status as a  national  bank will
                  terminate  and  all of its  assets  and  liabilities  will  be
                  assumed by First Federal.  In addition,  River Valley's status
                  as a bank holding company subject to regulation by the Federal
                  Reserve  Board will  terminate  and River Valley will become a
                  savings and loan holding  company subject to regulation by the
                  Office of Thrift Supervision  ("OTS"). The parties submitted a
                  merger  application  to the OTS on September  26, 1997 and are
                  awaiting  regulatory   approval  of  the  merger.   Management
                  anticipates  that the OTS will approve the merger  application
                  and that the merger will be consummated by November 22, 1997.

ITEM 6.  Exhibits and Reports on Form 8-K

                  Reports on Form 8-K:    None

                  Exhibit 10.1:           Recognition and Retention Plan
                                          and Trust

                  Exhibit 10.2:           Stock Option Plan

                  Exhibit 27:             Financial Data Schedule for the nine
                                          month period ended September 30, 1997








                                       17



<PAGE>



                                   SIGNATURES

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





Date:   November 10, 1997                          By: /s/James E. Fritz
     ------------------------                          -----------------
                                                       James E. Fritz
                                                       CEO/President



Date:   November 10, 1997                          By: /s/J. Wayne Deveary
     -----------------------                           -------------------
                                                       J. Wayne Deveary
                                                       Chief Financial Officer





































                                       18