River Valley Bancorp (NASDAQ: RIVR), an Indiana corporation (the “Corporation”) and holding company for River Valley Financial Bank, based in Madison, Indiana announced today earnings for the third quarter ended September 30, 2010. Net income for the quarter was $291,475, or $0.13 expressed as basic earnings per share. Net income for the third quarter ended September 30, 2009 was $748,584, or $0.50 per basic share. The decrease in earnings reflected significantly higher provision for loan losses in the current quarter. The provision increased to $1,390,000 for the 2010 quarter as compared to $135,000 expensed during the third quarter 2009. This increase was primarily attributable to one lending relationship that was not renewed due to declining collateral value. The loan had been performing, but a recent appraisal indicated a substantive decline in value. With the exception of the provision for loan losses, the other operating indicators including interest margins and non-interest income all reflected improvement over the previous year quarter, while operating expenses increased only slightly.
Return on average assets for the quarter ended September 30, 2010 was 0.30% and the return on average equity was 3.56% for the quarter. For the third quarter of 2009, those corresponding returns were 0.78% and 11.96% respectively.
Net income for the nine-month period ended September 30, 2010 was $1,726,266, or $0.96 per basic share. This represents an increase of $796,447 from the $929,819, or $0.62 per basic share, recorded for the same period ended September 30, 2009. The increase is attributable to additional provision expense, in the amount of $2.1 million, taken during the second quarter 2009 in recognition of deteriorating real estate values on certain loans, partially offset by the provision recorded in the third quarter 2010. The return on average assets for the nine-month period ended September 30, 2010 was 0.58% and the return on average equity was 7.19%. Those respective ratios were 0.24% and 3.69% for the like period in 2009.