River Valley Bancorp (NASDAQ: RIVR), an Indiana corporation (the “Corporation”) and holding company for River Valley Financial Bank, based in Madison, Indiana, announced unaudited earnings for the fourth quarter and fiscal year ended December 31, 2011.
For the year ended December 31, 2011, the Corporation reported net income of $1,772,000 or $0.93 per share. This compared to net income of $2,320,000 for the year ended December 31, 2010, or $1.30 per share. In comparing like year periods, the Corporation experienced dramatically higher net interest income. Net interest income increased by $556,000, or 4.68%, in 2011 over that recorded in 2010, but was offset by lower noninterest income and higher operating expenses. The factors decreasing noninterest income were primarily write downs, dispositions, and holding costs associated with other real estate owned. For assets held in other real estate owned, a write down of value is accounted through the income statement and impacts other income. Expenses associated with holding those properties are also recorded in other income, net of income. For the fiscal year, there was an $894,000 decrease in other income, of which $613,000 was directly related to values of property held or sold, and $213,000 of which was associated with net expenses associated with properties owned or in foreclosure. Noninterest expense increased period to period primarily from an increase in higher salaries and benefits, and expenses relative to an announced acquisition. Income taxes in 2011 were $449,000 lower than in 2010, reflecting the tax effect of these expenses.
The return on average assets for fiscal year 2011 was 0.45%; the return on average equity was 5.41%. For fiscal 2010, those numbers were 0.59% and 7.23% respectively.
For the fourth quarter ended December 31, 2011, the Corporation reported net income of $556,000 or $0.31 per share. This compared to net income of $594,000 for the quarter ended December 31, 2010 or $0.32 per share. This decrease was primarily attributed to a $318,000 increase in operating expenses, of which $127,000 was associated with expenses paid on the behalf of delinquent borrowers and $191,000 in expenses associated with an announced acquisition. Those costs are expensed as incurred. These results were partially offset by a lower provision for loan losses, an increase in net interest income, and a lower income tax provision. For the fourth quarter 2011, the return on average assets was 0.54% while the return on average equity was 6.71%. Those percentages for the like period in 2010 were 0.61% and 7.35% respectively.
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