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          June 30, 1998
                               --------------------------------

                                       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) 265-3421

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 August 10,  1998,  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 Earnings                       4

             Consolidated Statements of Comprehensive Income           5

             Consolidated Statements of Cash Flows                     6

             Notes to Consolidated Financial Statements                8

             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)

                                                                                           June 30,        December 31,
         ASSETS                                                                                1998                1997
<S>                                                                                           <C>                  <C>
Cash and due from banks                                                                    $  1,715            $  3,542
Federal funds sold                                                                              700                 300
Interest earning deposits in other financial institutions                                     1,454               1,026
                                                                                            -------             -------
         Cash and cash equivalents                                                            3,869               4,868

Certificates of deposit in other financial institutions                                         200                 897
Investment securities designated as available for sale - at market                              776                 772
Investment securities - at amortized cost, approximate market value of
  $2,462 and $3,444 as of June 30, 1998 and December 31, 1997                                 2,500               3,500
Mortgage-backed securities designated as available for sale - at market                       2,913               3,604
Mortgage-backed and related securities - at cost, approximate market
  value of $4,720 and $5,432 as of June 30, 1998 and December 31, 1997                        4,777               5,374
Loans receivable - net                                                                      109,022             111,319
Loans held for sale - at lower of cost or market                                              5,186                 684
Office premises and equipment - at depreciated cost                                           2,099               2,065
Real estate acquired through foreclosure                                                         82                  82
Federal Home Loan Bank stock - at cost                                                          943                 943
Accrued interest receivable on loans                                                            958                 916
Accrued interest receivable on mortgage-backed and related securities                           159                 117
Accrued interest receivable on investments and interest-earning deposits                         81                  65
Goodwill, net of accumulated amortization                                                       232                 245
Cash surrender value of life insurance                                                          800                 776
Prepaid expenses and other assets                                                               243                 141
Prepaid federal income taxes                                                                    271                  -
Deferred tax asset                                                                              572                 681
                                                                                            -------             -------

         Total assets                                                                      $135,683            $137,049
                                                                                            =======             =======

         LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                                                   $110,453            $114,955
Advances from the Federal Home Loan Bank                                                      5,000               2,000
Advances by borrowers for taxes and insurance                                                    28                  53
Accrued interest payable                                                                        406                 463
Other liabilities                                                                             1,241               1,524
Dividends payable                                                                                65                  60
Accrued federal income taxes                                                                     -                    5
                                                                                            -------             -------
         Total liabilities                                                                  117,193             119,060

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                                                                 11,229              11,229
  Retained earnings - substantially restricted                                                8,305               7,797
  Shares acquired by stock benefit plans                                                     (1,026)             (1,005)
  Unrealized losses on securities designated as available for sale,
    net of related tax effects                                                                  (18)                (32)
                                                                                            -------             -------
         Total stockholders' equity                                                          18,490              17,989
                                                                                            -------             -------

         Total liabilities and stockholders' equity                                        $135,683            $137,049
                                                                                            =======             =======

</TABLE>


                                        3


<PAGE>

<TABLE>

                              River Valley Bancorp
<CAPTION>

                       CONSOLIDATED STATEMENTS OF EARNINGS

                        (In thousands, except share data)

                                                                          Six months ended            Three months ended
                                                                              June 30,                     June 30,
                                                                         1998         1997            1998         1997
<S>                                                                       <C>          <C>             <C>          <C>
Interest income
  Loans                                                                $4,576       $4,487          $2,296       $2,286
  Mortgage-backed and related securities                                  249          384             121          178
  Investment securities                                                   104          156              48           69
  Interest-earning deposits and other                                     128          196              62           79
                                                                        -----        -----           -----        -----
         Total interest income                                          5,057        5,223           2,527        2,612

Interest expense
  Deposits                                                              2,346        2,451           1,152        1,201
  Borrowings                                                               56           34              22           30
                                                                        -----        -----           -----        -----
         Total interest expense                                         2,402        2,485           1,174        1,231
                                                                        -----        -----           -----        -----

         Net interest income                                            2,655        2,738           1,353        1,381

Provision for losses on loans                                             150          170              75           74
                                                                        -----        -----           -----        -----

         Net interest income after provision for losses on loans        2,505        2,568           1,278        1,307

Other income
  Insurance commissions                                                    -             7              -            -
  Gain on sale of investment and mortgage-backed securities                -             3              -             1
  Gain on sale of loans                                                   127           14              31           18
  Gain on sale of office premises and equipment                            -           203              -            -
  Service fees, charges and other operating                               411          397             203          194
                                                                        -----        -----           -----        -----
         Total other income                                               538          624             234          213

General, administrative and other expense
  Employee compensation and benefits                                    1,168        1,082             583          521
  Occupancy and equipment                                                 223          248             129          120
  Federal deposit insurance premiums                                       20           15               9            9
  Amortization of goodwill                                                 13           14               7            8
  Data processing                                                          56          133              24           63
  Other operating                                                         517          568             229          251
                                                                        -----        -----           -----        -----
         Total general, administrative and other expense                1,997        2,060             981          972
                                                                        -----        -----           -----        -----

         Earnings before income taxes                                   1,046        1,132             531          548

Income taxes
  Current                                                                 310          488             258          238
  Deferred                                                                102          (21)            (40)         (14)
                                                                        -----        -----           -----        -----
         Total income taxes                                               412          467             218          224
                                                                        -----        -----           -----        -----

         NET EARNINGS                                                  $  634       $  665          $  313       $  324
                                                                        =====        =====           =====        =====

         EARNINGS PER SHARE
           Basic                                                         $.57         $.61            $.28         $.30
                                                                          ===          ===             ===          ===

           Diluted                                                       $.56         $.61            $.28         $.30
                                                                          ===          ===             ===          ===
</TABLE>



                                        4


<PAGE>

<TABLE>

                              River Valley Bancorp
<CAPTION>

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                        For the six months ended June 30,
                                 (In thousands)

                                                                                                 1998              1997
<S>                                                                                               <C>               <C>
Net earnings                                                                                     $634              $665

Unrealized holding gains (losses) during the period, net of tax                                    14               (19)

Reclassification adjustment for gains on sale of securities included
  in net earnings, net of related taxes                                                            -                 13
                                                                                                  ---               ---

Comprehensive income                                                                             $648              $659
                                                                                                  ===               ===

Accumulated other comprehensive losses                                                          $ (18)            $ (70)
                                                                                                 ====              ==== 
</TABLE>


































                                        5



<PAGE>

<TABLE>

                              River Valley Bancorp
<CAPTION>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                        For the six months ended June 30,
                                 (In thousands)

                                                                                                 1998              1997
<S>                                                                                              <C>                <C>
Cash flows from operating activities:
  Net earnings for the period                                                                 $   634           $   665
  Adjustments to reconcile net earnings to net cash
  provided by (used in) operating activities:
    Amortization of premiums and discounts on
      investments and mortgage-backed securities - net                                             24                (2)
    Gain on sale of investment and mortgage-backed securities designated
      as available for sale                                                                        -                 (3)
    Loans originated for sale in the secondary market                                         (12,538)           (1,396)
    Proceeds from sale of loans in the secondary market                                         8,090             2,188
    Loss (gain) on sale of loans                                                                  (54)                8
    Amortization of deferred loan origination costs                                                52                21
    Provision for losses on loans                                                                 150               170
    Depreciation and amortization                                                                 105                98
    Amortization of goodwill                                                                       13                14
    Proceeds from sale of office premises and equipment                                            -                402
    Gain on sale of office premises and equipment                                                  -               (203)
    Increase (decrease) in cash due to changes in:
      Accrued interest receivable on loans                                                        (42)              (74)
      Accrued interest receivable on mortgage-backed securities                                   (42)               19
      Accrued interest receivable on investments and interest-
        earning deposits                                                                          (16)               86
      Prepaid expenses and other assets                                                          (102)               51
      Accrued interest payable                                                                    (57)              (17)
      Other liabilities                                                                          (278)               23
      Income taxes
        Current                                                                                  (276)              (23)
        Deferred                                                                                  102               (21)
                                                                                               ------            ------
         Net cash provided by (used in) operating activities                                   (4,235)            2,006

Cash flows provided by (used in) investing activities:
  Proceeds from maturity of investment securities                                               1,000             2,000
  Proceeds from sale of investment securities designated as available for sale                     -              2,200
  Proceeds from sale of mortgage-backed securities designated as available for sale                -              1,158
  Purchase of Federal Reserve Bank stock                                                           -                (64)
  Purchase of mortgage-backed securities designated as available for sale                          -                (67)
  Principal repayments on mortgage-backed and related securities                                1,281             1,378
  Loan principal repayments                                                                    19,906            17,271
  Loan disbursements                                                                          (17,811)          (22,206)
  Purchase of office equipment                                                                   (139)              (50)
  (Increase) decrease in certificates of deposit in other financial institutions - net            697              (796)
  Increase in cash surrender value of life insurance                                              (24)              (19)
                                                                                              -------            ------
         Net cash provided by investing activities                                              4,910               805
                                                                                              -------            ------

         Net cash provided by operating and investing
           activities (subtotal carried forward)                                                  675             2,811
                                                                                              -------            ------

</TABLE>

                                                             6


<PAGE>

<TABLE>

                              River Valley Bancorp
<CAPTION>

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                        For the six months ended June 30,
                                 (In thousands)

                                                                                                 1998              1997
<S>                                                                                             <C>                 <C>
         Net cash provided by operating and investing
           activities (subtotal brought forward)                                              $   675            $2,811

Cash flows provided by (used in) financing activities:
  Decrease in deposit accounts                                                                 (4,502)           (9,636)
  Proceeds from Federal Home Loan Bank advances                                                 6,000             5,000
  Repayment of Federal Home Loan Bank advances                                                 (3,000)           (1,100)
  Purchase of shares for stock benefit plan                                                       (21)               -
  Dividends paid on common stock                                                                 (126)               -
  Advances by borrowers for taxes and insurance                                                   (25)              (15)
                                                                                                -----             -----
         Net cash used in financing activities                                                 (1,674)           (5,751)
                                                                                                -----             -----

Net decrease in cash and cash equivalents                                                        (999)           (2,940)

Cash and cash equivalents at beginning of period                                                4,868             8,685
                                                                                                -----             -----

Cash and cash equivalents at end of period                                                     $3,869            $5,745
                                                                                                =====             =====


Supplemental  disclosure of cash flow  information:  Cash paid during the period
  for:
    Federal income taxes                                                                      $   271           $   344
                                                                                               ======            ======

    Interest on deposits and borrowings                                                        $2,459            $2,502
                                                                                                =====             =====

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

  Unrealized gains (losses) on securities designated as available
    for sale, net of related tax effects                                                     $     14          $    (19)
                                                                                              =======           ======= 

  Recognition of mortgage servicing rights in accordance with
    SFAS No. 125                                                                             $     73          $     22
                                                                                              =======           =======
</TABLE>











                                        7



<PAGE>


                              River Valley Bancorp

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

        For the six and three month periods ended June 30, 1998 and 1997


River Valley  Bancorp (the  "Corporation")  is a financial  institution  holding
company whose  activities  are  primarily  limited to holding the stock of River
Valley  Financial  Bank  ("River  Valley  Financial"  or the  "Bank").  The Bank
conducts 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.  River
Valley  Financial's  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 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  consolidated  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,  1997.  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 six and three month  periods ended June 30, 1998
are not  necessarily  indicative  of the results  which may be expected  for the
entire year.

2.  Principles of Consolidation

The consolidated  financial  statements  include the accounts of the Corporation
and its subsidiary,  the Bank and the Bank's  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 June 1996,  the  Financial  Accounting  Standards  Board (the "FASB")  issued
Statement of Financial  Accounting  Standards ("SFAS") No. 125,  "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments 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



                                        8


<PAGE>


                              River Valley Bancorp

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

        For the six and three month periods ended June 30, 1998 and 1997


3.  Effect of Recent Accounting Pronouncements (continued)

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.

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 adopted SFAS No. 125 effective January 1, 1998, as required,  without
material effect on River Valley's consolidated  financial position or results of
operations.

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.

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.  Management adopted SFAS No. 130
effective  January  1,  1998,  as  required,  without  material  effect  on  the
Corporation's financial statements.



                                        9



<PAGE>


                              River Valley Bancorp

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

        For the six and three month periods ended June 30, 1998 and 1997


3.  Effect of Recent Accounting Pronouncements (continued)

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

Basic  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 outstanding, which
gives effect to 83,124 and 95,220  unallocated  ESOP shares at June 30, 1998 and
1997,  respectively,  totaled  1,107,126  and  1,095,090 for each of the six and
three month periods ended June 30, 1998 and 1997, respectively.

Diluted earnings per share is computed taking into  consideration  common shares
outstanding  and  dilutive  potential  common  shares  to be  issued  under  the
Corporation's   stock  option  plan.   Weighted-average   common  shares  deemed
outstanding  for  purposes  of  computing  diluted  earnings  per share  totaled
1,131,729  and  1,095,090 for each of the six and three month periods ended June
30, 1998 and 1997, respectively.

5.  Reclassifications

Certain  reclassifications  have  been made to the 1997  consolidated  financial
statements to conform to the June 30, 1998 presentation.









                                       10



<PAGE>


                              River Valley Bancorp

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

        For the six and three month periods ended June 30, 1998 and 1997


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,  the  effect  of the year 2000 on  information  technology
systems and the effect of certain recent accounting pronouncements.


Discussion of Financial Condition Changes from December 31, 1997 to June 30,
1998

At June 30, 1998, River Valley's  consolidated  assets totaled $135.7 million, a
decrease of $1.4  million,  or 1.0%,  from the December 31, 1997 total of $137.0
million.  The  decrease  in assets  resulted  primarily  from a decrease  in the
deposit portfolio of $4.5 million,  which was partially offset by an increase in
advances from the Federal Home Loan Bank of $3.0 million.

Liquid assets (i.e.,  cash,  federal funds sold,  interest-earning  deposits and
certificates  of deposit)  decreased  by $1.7  million  from  December  31, 1997
levels,  to a total  of $4.1  million  at June  30,  1998.  Mortgage-backed  and
investment  securities  decreased by $2.3 million, or 17.2%, to a total of $11.0
million at June 30, 1998,  primarily due to maturities  of  investments  of $1.0
million and  principal  repayments  of  mortgage-backed  and related  securities
totaling $1.3 million.

Loans receivable,  including loans held for sale, totaled $114.2 million at June
30, 1998, an increase of $2.2 million, or 2.0%, from the $112.0 million total at
December 31, 1997. The increase resulted primarily from loan originations during
the period of $30.3 million, which were partially offset by principal repayments
of $19.9 million and sales of $8.1 million.  Loan origination  volume during the
current period exceeded that of the 1997 period by $6.7 million, or 28.6%.

The Corporation's consolidated allowance for loan losses totaled $1.2 million at
both June 30, 1998 and December 31, 1997, which  represented 1.0% of total loans
at those dates. Nonperforming loans (defined as loans delinquent greater than 90
days and loans on nonaccrual  status) totaled  $671,000 and $718,000 at June 30,
1998 and December 31, 1997, respectively.  Although management believes that its
allowance  for loan  losses  at June  30,  1998,  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.


                                       11


<PAGE>


                              River Valley Bancorp

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

        For the six and three month periods ended June 30, 1998 and 1997


Discussion  of Financial  Condition  Changes from  December 31, 1997 to June 30,
1998 (continued)

Deposits  decreased  by $4.5  million,  or 3.9%,  to a total of $110.5  million,
compared to the $115.0  million  total at December  31,  1997.  The  decrease is
primarily attributed to increased  competition from other local institutions and
other deposit alternatives.

Advances from the Federal Home Loan Bank increased by $3.0 million,  or 150%, to
a total of $5.0 million at June 30, 1998,  compared to the $2.0 million  balance
outstanding  at  December  31,  1997.  The  increase  was due to current  period
borrowings  of $6.0 million,  offset by  repayments of $3.0 million.  Management
deployed the advances to fund loan originations.

Stockholders'  equity  totaled  $18.5  million at June 30, 1998,  an increase of
$501,000,  or 2.8%,  over the $18.0  million  total at December  31,  1997.  The
increase  resulted  primarily  from current  period  earnings of $634,000 and an
$14,000 decrease in the unrealized losses on securities  designated as available
for sale,  partially offset by the declaration and payment of dividends totaling
$126,000.

The Bank is required to maintain minimum  regulatory capital pursuant to federal
regulations.  At June 30,  1998,  the Bank's  regulatory  capital  exceeded  all
applicable regulatory capital requirements.


Comparison of Results of Operations for the Six Months Ended June 30, 1998 and
1997

General

River  Valley's net  earnings  for the six months  ended June 30, 1998,  totaled
$634,000, a decrease of $31,000,  from the $665,000 net earnings reported in the
comparable 1997 period. The decrease in earnings in the 1998 period is primarily
attributable  to a decrease in the gain on sale of office premises and equipment
of $203,000,  which was partially  offset by an increase of $113,000 in the gain
on sale of loans,  a decrease  of $63,000 in general,  administrative  and other
expense,  a $55,000  decrease in the  provision  for federal  income taxes and a
$20,000  decrease in the  provision  for losses on loans,  which were  partially
offset by a decrease in net interest income of $83,000.

Net Interest Income

Total interest  income for the six months ended June 30, 1998,  amounted to $5.1
million,  a decrease of $166,000,  or 3.2%, from the comparable  period in 1997,
reflecting   the   effects  of  decline  in  average   interest-earning   assets
outstanding,  partially  offset by an increase in yield  year-to-year.  Interest
income on loans and  mortgage-backed  securities  totaled  $4.8 million and $4.9
million for the six months ended June 30, 1998 and 1997, respectively.  Interest
income on investments and  interest-earning  deposits decreased by $120,000,  or
34.1%, due to a decrease in the average balance  outstanding of $1.5 million and
an approximate 71 basis point decrease in yield from the comparable 1997 period.


                                       12


<PAGE>


                              River Valley Bancorp

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

        For the six and three month periods ended June 30, 1998 and 1997


Comparison of Results of Operations for the Six Months Ended June 30, 1998 and
1997 (continued)

Net Interest Income (continued)

Interest expense on deposits decreased by $105,000,  or 4.3%, to a total of $2.3
million for the six months ended June 30, 1998,  due primarily to a $7.8 million
decrease in the average  balance of deposits  outstanding,  which was  partially
offset  by an  increase  in the  weighted-average  cost of  deposits  of 9 basis
points, to 4.15% in 1998. Interest expense on borrowings totaled $56,000 for the
six months  ended June 30,  1998,  an  increase of $22,000  over the  comparable
period in 1997.  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 decreased by $83,000, or 3.0%, for the six months ended June
30, 1998,  compared to the  comparable  period in 1997. The interest rate spread
increased  by  approximately  12 basis  points for the six months ended June 30,
1998,  to 3.91% from 3.79% in the 1997  period,  while the net  interest  margin
remained virtually unchanged at 4.03%.

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
Bank, the status of past due principal and interest  payments,  general economic
conditions,  particularly as such  conditions  relate to the Bank's market area,
and other factors related to the collectibility of the Bank's loan portfolio. As
a result of such analysis,  management  recorded a $150,000 provision for losses
on loans for the six months ended June 30, 1998, compared to the $170,000 amount
recorded in the 1997 period.  While  management  believes that the allowance for
losses on loans is adequate at June 30, 1998, 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.

Other Income

Other income  decreased by $86,000,  or 13.8%, for the six months ended June 30,
1998,  as compared to the same period in 1997,  due primarily to a $203,000 gain
on sale of office  premises and equipment  recorded  during the six months ended
June 30, 1997,  coupled with a $7,000 decrease in insurance  commissions,  which
were  partially  offset by a  $113,000  increase  on gain on sale of loans and a
$14,000 increase in service fees, charges,  and other operating income. The gain
on sale of office premises  resulted from River Valley'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 River
Valley's  acquisition  of  Citizens  National  Bank of  Madison.  The decline in
insurance  commissions resulted from River Valley's sale of its insurance agency
subsidiary.



                                       13


<PAGE>


                              River Valley Bancorp

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

        For the six and three month periods ended June 30, 1998 and 1997


Comparison of Results of Operations for the Six Months Ended June 30, 1998 and
1997 (continued)

General, Administrative and Other Expense

General,  administrative and other expense decreased by $63,000, or 3.1%, during
the six months  ended June 30, 1998,  compared to the same period in 1997.  This
decrease  resulted  primarily  from  a  $77,000,  or  57.9%,  decrease  in  data
processing  expense,  a $25,000,  or 10.1%,  decrease in occupancy and equipment
expense and a $51,000, or 9.0%, decrease in other operating expense,  which were
partially offset by an $86,000, or 7.9%,  increase in employee  compensation and
benefits.  The  decrease in  general,  administrative  and other  expense can be
partially attributed to the economies recognized from the merger of River Valley
Financial Bank and Citizens  National Bank of Madison in November 1997,  coupled
with the sale of the Hanover branch during February 1997.

Income Taxes

The  provision  for income  taxes  decreased by $55,000,  or 11.8%,  for the six
months  ended  June 30,  1998,  as  compared  to the same  period in 1997.  This
decrease  resulted  primarily  from a decrease in net  earnings  before taxes of
$86,000,  or 7.6%.  The  effective  tax rates  were  39.4% and 41.3% for the six
months ended June 30, 1998 and 1997, respectively.


Comparison of Results of Operations for the Three Months Ended June 30, 1998 and
1997

General

River  Valley's net  earnings for the three months ended June 30, 1998,  totaled
$313,000,  a decrease of $11,000,  or 3.4%,  from the  $324,000 of net  earnings
reported in the  comparable  1997  period.  The decrease in earnings in the 1998
period is primarily attributable to a decrease in net interest income of $28,000
and an increase in general,  administrative  and other expense of $9,000,  which
were  partially  offset by an increase in other income of $21,000 and a decrease
in the provision for federal income taxes of $6,000.

Net Interest Income

Total interest  income for the three months ended June 30, 1998 amounted to $2.5
million,  a decrease of $85,000,  or 3.3%, from the comparable  quarter in 1997,
reflecting  the  effects  of  a  decline  in  average   interest-earning  assets
outstanding, coupled with a decrease in the yield year-to-year.  Interest income
on loans and  mortgage-backed  securities  totaled  $2.4  million  for the three
months ended June 30, 1998, a decrease of $47,000,  or 1.9%, from the comparable
1997 quarter.  The decrease  resulted  primarily  from a $1.3 million,  or 1.1%,
decrease in the average  balance  outstanding  year-to-year.  Interest income on
investments and interest-earning deposits decreased by $38,000, or 25.7%, due to
a decrease in the average balance  outstanding of $1.2 million,  coupled with an
approximate 68 basis point decrease in yield from the comparable 1997 period.


                                       14


<PAGE>


                              River Valley Bancorp

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

        For the six and three month periods ended June 30, 1998 and 1997


Comparison of Results of Operations for the Three Months Ended June 30, 1998 and
1997 (continued)

Net Interest Income (continued)

Interest expense on deposits  decreased by $49,000,  or 4.1%, to a total of $1.2
million for the quarter  ended June 30, 1998,  due  primarily to an $8.1 million
decrease in the average  balance of deposits  outstanding.  Interest  expense on
borrowings  totaled $22,000 for the three months ended June 30, 1998, a decrease
of $8,000, or 26.7%, from the comparable  quarter in 1997. The decrease resulted
primarily from a $450,000  decrease in average  borrowings  outstanding  year to
year.

As a result of the foregoing  changes in interest  income and interest  expense,
net interest  income  decreased by $28,000,  or 2.0%, for the three months ended
June 30, 1998, as compared to the comparable  quarter in 1997. The interest rate
spread amounted to 4.00% for the 1998 quarter,  compared to 3.85% in 1997, while
the net interest margin totaled 4.10% in the 1998 quarter,  compared to 4.16% in
1997.

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
Bank, the status of past due principal and interest  payments,  general economic
conditions,  particularly as such  conditions  relate to the Bank's market area,
and other factors related to the collectibility of the Bank's loan portfolio. As
a result of such analysis, management recorded a $75,000 provision for losses on
loans for the three months ended June 30, 1998,  compared to the $74,000  amount
recorded in the 1997 period.  While  management  believes that the allowance for
losses on loans is adequate at June 30, 1998, 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.

Other Income

Other income increased by $21,000,  or 9.9%, for the three months ended June 30,
1998,  as compared to the same period in 1997,  due  primarily to an increase of
$13,000 in gain on sale of loans coupled with a $9,000 increase in service fees,
charges, and other operating income.

General, Administrative and Other Expense

General,  administrative  and other expense increased by $9,000, or 0.9%, during
the three months ended June 30, 1998,  compared to the same period in 1997. This
increase  resulted  primarily  from a $62,000,  or 11.9%,  increase  in employee
compensation  and benefits  and a $9,000,  or 7.5%,  increase in  occupancy  and
equipment expense,  which were partially offset by a $39,000, or 61.9%, decrease
in data processing expense and a $22,000,  or 8.8%,  decrease in other operating
expense.


                                       15


<PAGE>


                              River Valley Bancorp

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

        For the six and three month periods ended June 30, 1998 and 1997


Comparison of Results of Operations for the Three Months Ended June 30, 1998 and
1997 (continued)

Income Taxes

The  provision  for income  taxes  decreased by $6,000,  or 2.7%,  for the three
months  ended  June 30,  1998,  as  compared  to the same  period in 1997.  This
decrease  resulted  primarily  from a decrease in net  earnings  before taxes of
$17,000,  or 3.1%.  The effective tax rates  amounted to 41.1% and 40.9% for the
three months ended June 30, 1998 and 1997, respectively.


Other Matters

As with all providers of financial  services,  the Bank's operations are heavily
dependent  on  information  technology  systems.  The  Bank  is  addressing  the
potential  problems  associated  with the  possibility  that the computers  that
control or operate the Bank's  information  technology system and infrastructure
may not be  programmed  to read  four-digit  date codes and, upon arrival of the
year 2000,  may  recognize  the  two-digit  code "00" as the year 1900,  causing
systems to fail to function or to generate  erroneous  data. The Bank is working
with the companies that supply or service its information  technology systems to
identify and remedy any year 2000 related problems.

As of the date of this Form  10-QSB,  the Bank has not  identified  any specific
expenses  that are  reasonably  likely to be incurred by the Bank in  connection
with this issue and does not expect to incur  significant  expense to  implement
the necessary  corrective  measures.  No assurance can be given,  however,  that
significant  expense will not be incurred in future  periods.  In the event that
the Bank is  ultimately  required  to  purchase  replacement  computer  systems,
programs and equipment,  or incur substantial expense to make the Bank's current
systems, programs and equipment year 2000 compliant, the Bank's net earnings and
financial condition could be adversely affected.

In addition to possible expense related to its own systems, the Bank could incur
losses if loan  payments  are delayed due to year 2000  problems  affecting  any
major  borrowers  in the Bank's  primary  market  area.  Because the Bank's loan
portfolio is highly diversified with regard to individual borrowers and types of
businesses  and the Bank's primary  market area is not  significantly  dependent
upon one  employer  or  industry,  the Bank does not expect any  significant  or
prolonged difficulties that will affect net earnings or cash flow.








                                       16


<PAGE>


                              River Valley Bancorp

                                     PART II

ITEM 1.  Legal Proceedings

          Not applicable

ITEM 2.  Changes in Securities and Use of Proceeds

         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

         None.

ITEM 6.  Exhibits and Reports on Form 8-K

         Reports on Form 8-K:          None

         Exhibit 27:                   Financial Data Schedule for the six month
                                       period ended June 30, 1998























                                       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:        August 12, 1998                   By: /s/James E. Fritz
       ---------------------------                 -----------------
                                                      James E. Fritz
                                                      CEO/President



Date:        August 12, 1998                   By: /s/Larry C. Fouse
       ---------------------------                 -----------------
                                                      Larry C. Fouse
                                                      Chief Financial Officer





































                                       18