River Valley Bancorp 8-K/A Financial Statements and Exhibits

Exhibit 99.4

RIVER VALLEY BANCORP AND SUBSIDIARIES AND DUPONT STATE BANK

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

SEPTEMBER 30, 2012

(In thousands)

							Pro Forma Adjustments						Pro Forma
	River Valley			DuPont			DR		CR		Reference		Combined
ASSETS
Cash and due from banks	$	1,940		$	1,939		$				$		$	3,879
Interest-bearing demand deposits		4,545			-					4,545				-
Federal funds sold		1,907			17,123					1,155				17,875
Cash and cash equivalents		8,392			19,062					5,700		a		21,754
Investment securities available for sale		112,201			8,666									120,867
Mortgage loans held for sale		1,358			-									1,358
Loans		257,622			54,762									310,527
Fair value adjustment on performing loans								1,853		1,513		c
Fair value adjustment on credit  impaired loans										2,197		d
Less allowance for loan losses		(3,642	)		(1,079	)		1,079				e		(3,642	)
Net loans		253,980			53,683			2,932		3,710				306,885
Premises and equipment		7,759			4,250					1,026		h		10,983
Real estate, held for sale		1,221			1,092					393		i		1,920
Federal Home Loan Bank stock		4,226			369									4,595
Interest receivable		2,160			378									2,538
Cash value of life insurance		10,086			-									10,086
Goodwill		79			-									79
Core deposit intangible								514				f		514
Other assets		2,972			237					31		j		3,178
Total Assets	$	404,434		$	87,737		$	3,446	$	10,860			$	484,757
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing	$	31,807		$	10,560		$				$		$	42,367
Interest-bearing		271,353			68,551									340,118
Fair value adjustment on time deposits										214		g
Total deposits		303,160			79,111									382,485
Borrowings		62,217			-									62,217
Interest payable		321			63									384
Other liabilities		4,065			423			775		494		b,j,k		4,207
Total Liabilities		369,763			79,597			775		708				449,293
Stockholders’ Equity
Preferred stock		5,000			-									5,000
Common stock		7,691			160			160						7,691
Additional paid in capital		-			5,904			5,904						-
Retained earnings		19,518			1,973			2,203		1,023		b,l		20,311
Accumulated other comprehensive income		2,462			103			103						2,462
Total Stockholders’ Equity		34,671			8,140			8,370		1,023				35,464
Total Liabilities and Stockholders’ Equity	$	404,434		$	87,737		$	9,145	$	1,731			$	484,757

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RIVER VALLEY BANCORP AND SUBSIDIARIES AND DUPONT STATE BANK

UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT

NINE MONTHS ENDED SEPTEMBER 30, 2012

(In thousands)

							Pro Forma Adjustments						Pro Forma
	River Valley			DuPont			DR		CR		Reference		Combined
INTEREST INCOME
Loans receivable	$	10,714		$	2,704		$	539	$	360		m	$	13,239
Investment securities		2,105			89									2,194
Interest earning deposits and other		120			19									139
Total interest income		12,939			2,812			539		360				15,572
INTEREST EXPENSE
Deposits		2,039			476			-		85		m		2,430
Borrowings		1,766			1									1,767
Total interest expense		3,805			477			-		85				4,197
Net interest income		9,134			2,335			539		445				11,375
Provision for loan losses		1,064			-									1,064
Net interest income after provision for loan losses		8,070			2,335			539		445				10,311
OTHER OPERATING INCOME
Service fees and charges		1,554			252									1,806
Net realized gain on sale of available for sale securities		450			-									450
Net gain on loan sales		844			65									909
Interchange fee income		327			80									407
Increase in cash value of life insurance		231			-									231
Loss on premises, equipment and real estate held for sale		(566	)		(200	)								(766	)
Other income		245			28									273
Total other income		3,085			225			-		-				3,310
OTHER OPERATING EXPENSES
Salaries and employee benefits		4,295			824									5,119
Net occupancy and equipment expense		1,069			280					35		m		1,314
Data processing expenses		333			201									534
Advertising expenses		294			18									312
Mortgage servicing rights		199			-									199
Office supplies		98			16									114
Professional fees		289			105									394
Federal Deposit Insurance Corporation Assessment		257			29									286
Loan related expenses		441			12									453
Acquisition expense		235			-					235				-
Other expense		944			500			77				m		1,521
Total other expenses		8,454			1,985			77		270				10,246
Income before income taxes		2,701			575			616		715				3,375
Income tax expense		572			226			25		53		m,n		770
Net income		2,129			349			641		768				2,605
Preferred stock dividends		272												272
Net Income Available to Common Stockholders	$	1,857		$	349		$	641	$	768			$	2,333
Basic earnings per common share	$	1.23												1.54
Diluted earnings per common share		1.22												1.54
Basic shares outstanding		1,515,587												1,515,587
Diluted shares outstanding		1,517,608												1,517,608

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RIVER VALLEY BANCORP AND SUBSIDIARIES AND DUPONT STATE BANK

UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT

YEAR ENDED DECEMBER 31, 2011

(In thousands, except per share amounts)

							Pro Forma Adjustments						Pro Forma
	River Valley			DuPont			DR		CR		Reference		Combined
INTEREST INCOME
Loans receivable	$	14,818		$	4,138		$	679	$	476		o	$	18,753
Investment securities		2,749			151									2,900
Interest earning deposits and other		145			34									179
Total interest income		17,712			4,323			679		476				21,832
INTEREST EXPENSE
Deposits		3,458			840					108		o		4,190
Borrowings		2,365			6									2,371
Total interest expense		5,823			846			-		108				6,561
Net interest income		11,889			3,477			679		584				15,271
Provision for loan losses		2,771			381			-		-				3,152
Net interest income after provision for loan losses		9,118			3,096			679		584				12,119
OTHER OPERATING INCOME
Service fees and charges		1,935			178									2,113
Net realized gain on sale of available for sale securities		312			77									389
Net gain on loan sales		730			47									777
Interchange fee income		409			93									502
Increase in cash value of life insurance		323			-									323
Loss on premises, equipment and real estate held for sale		(750	)		(31	)								(781	)
Other income		49			75									124
Total other income		3,008			439			-		-				3,447
OTHER OPERATING EXPENSES
Salaries and employee benefits		5,309			1,257									6,566
Net occupancy and equipment expense		1,428			380					47		o		1,761
Data processing expenses		420			223									643
Advertising expenses		403			20									423
Mortgage servicing rights		185			-									185
Office supplies		124			32									156
Professional fees		551			100									651
Federal Deposit Insurance Corporation Assessment		397			158									555
Loan related expenses		210			7									217
Acquisition expense		173			-					173		p		-
Other expense		1,051			443			103				o		1,597
Total other expenses		10,251			2,620			103		220				12,754
Income before income taxes		1,875			915			782		804				2,812
Income tax expense		103			359			-		59		o		403
Net income		1,772			556			782		863				2,409
Preferred stock dividends		362												362
Net Income Available to Common Stockholders	$	1,410		$	556		$	782	$	863			$	2,047
Basic earnings per common share	$	.93												1.35
Diluted earnings per common share		.93												1.35
Basic shares outstanding		1,514,472												1,514,472
Diluted shares outstanding		1,516,446												1,516,446

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RIVER VALLEY BANCORP AND SUBSIDIARIES AND DUPONT STATE BANK

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Note 1 - Basis of Presentation

The unaudited pro forma condensed combined financial statements are based on the historical financial statements of River Valley Bancorp (River Valley) and DuPont State Bank (DuPont) after giving effect to the cash paid by River Valley and River Valley Financial Bank (the Bank), the wholly owned subsidiary of River Valley, to consummate the acquisition of DuPont, as well as certain pro forma adjustments.

The unaudited pro forma condensed combined balance sheet as of September 30, 2012 is based on the historical balance sheets of River Valley and DuPont as of that date, and gives effect to the acquisition transaction as if it had occurred on September 30, 2012. The pro forma adjustments give effect to events that are directly attributable to the transaction and factually supportable regardless of whether they have continuing impact or are nonrecurring.

The unaudited pro forma condensed combined statements of income are based on the historical statements of income of River Valley and DuPont and give effect to the acquisition transaction as if it had occurred at the beginning of the earliest period presented.

In accordance with generally accepted accounting principles in effect for River Valley as of the date of consummation of the acquisition, the acquisition is accounted for as a business combination in accordance with FASB ASC 805 (ASC 805). As such, the transaction is treated as a purchase whereby the purchase price is allocated to the net assets acquired and the assets and liabilities of DuPont are recorded at fair value.  In accordance with ASC 805, Goodwill and Other Intangible Assets, goodwill acquired in a business combination for which the acquisition date is after June 30, 2001 shall not be amortized. Also, in accordance with this statement, intangible assets other than goodwill acquired in a business combination shall be amortized based on the estimated useful life of the intangible asset unless that life is determined to be indefinite.  In accordance with ASC820, when the fair value of the net asset acquired exceeds the purchase price, the acquirer shall recognize the resulting gain in earnings on the acquisition date.  The allocation of the purchase price of the acquisition used in these unaudited pro forma condensed combined financial statements is based on the detailed valuation studies necessary to arrive at the required estimates of fair value of the assets acquired and the liabilities assumed of DuPont completed as of the date of this document.

Effective November 9, 2012, River Valley completed its acquisition of DuPont pursuant to the terms of a Reorganization Agreement, dated as of December 5, 2011, as amended. River Valley acquired all outstanding shares of common stock of DuPont at an aggregate purchase price of $5.7 million, payable in cash.

The unaudited pro forma balance sheet should be read in conjunction with the historical financial statements of River Valley and DuPont, including the respective notes to those statements. The adjustments included in these unaudited pro forma condensed financial statements are preliminary and may be revised.  The unaudited pro forma condensed combined financial statements are presented for informational purposes only and are not necessarily indicative of the operating results or the financial position that would have been achieved had the acquisition been consummated as of the date indicated or of the results that may be obtained in the future.

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RIVER VALLEY BANCORP AND SUBSIDIARIES AND DUPONT STATE BANK

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS - CONTINUED

Note 2 – Pro Forma Balance Sheet Adjustments

Following is a summary of the pro forma adjustments to reflect the proposed business combination in the pro forma combined balance sheet:

(a) Pro forma adjustment to record $5,700,000 capital investment in the Bank by River Valley, cash consideration to shareholder of DuPont for the transaction value.

(b) Pro forma adjustment of $205,000 to recognize a liability, net of tax benefit at 39%, for compensation costs of DuPont incurred prior to or coincident with consummation of the merger, and the pro forma adjustment to accrue $230,000 of estimated acquisition expense not yet reflected in historical retained earnings at September 30, 2012.

For the purpose of the pro forma presentation, management has assumed that the fair values of assets acquired and liabilities assumed approximate their carrying amounts except those presented here.  Fair value adjustments here were done using the purchase method and applying push-down accounting.

(c) Pro forma adjustments to recognize adjustments to the fair value of performing loans of DuPont at September 30, 2012.  Loans were increased by $1,853,000 to recognize a yield premium and reduced by $1,513,000 to recognize the credit adjustment.

(d) Pro forma adjustments to recognize adjustments to the fair value of the credit impaired loans of DuPont at September 30, 2012.  The adjustments totaled $2,197,000 of which $750,000 is an accretable adjustment and $1,447,000 is a non-accretable adjustment.

(e) Pro forma adjustment to eliminate the DuPont’s historical allowance for loan losses of $1,079,000 at September 30, 2012.

(f) Pro forma adjustment to recognize a core deposit intangible of $514,000 on the non-maturity deposits of DuPont at September 30, 2012.

(g) Pro forma adjustment to recognize a premium of $214,000 on certificates of deposit of DuPont at September 30, 2012.

(h) Pro forma adjustment to record a fair value adjustment of $1,026,000 to reduce the carrying value of the premises and equipment of DuPont at September 30, 2012.

(i) Pro forma adjustment to record  a fair value adjustment of $393,000 to reduce the carrying value of foreclosed real estate of DuPont prior to or coincident with consummation of the merger.

(j) Pro forma adjustment to recognize an increase of $59,000 in the fair value certain  accrued expenses included in other liabilities and an adjustment for write off other assets totaling $31,000 with no post-merger value.

(k) Pro forma adjustment to record a net deferred tax asset of $775,000 resulting from the fair value adjustments relative to the merger (39% effective tax rate utilized).

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RIVER VALLEY BANCORP AND SUBSIDIARIES AND DUPONT STATE BANK

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS - CONTINUED

Note 2 – Pro Forma Balance Sheet Adjustments - Continued

Following is a summary of the excess of fair value over the cost of acquired net assets (bargain purchase) recognized in the pro forma balance sheet as of September 30, 2012 (in thousands):

(l)	(In thousands)
Total purchase price	$	5,700
Pro forma estimated fair value of acquired assets (liabilities) as of  September 30, 2012:
Total carrying amount of assets	$	87,737
Total carrying amount of liabilities		(79,597	)
Carrying amount of tangible net assets		8,140
Change in control contracts, net of tax	$	(205	)
Excess book over cash				$	(2,235	)
Purchase accounting adjustments:
Estimated value of core deposit intangible		514
Estimated fair value adjustment for  loans		(778	)
Estimated fair value adjustment for premises and equipment		(1,026	)
Estimated fair value adjustment for certificates of deposit		(214	)
Estimated fair value adjustment real estate held for sale		(393	)
Estimated fair value adjustment for other assets/liabilities		(90	)
Net purchase accounting adjustments		(1,987	)
Tax effect of purchase accounting adjustments		775
Pro forma fair value of net assets acquired					(1,212	)
Estimated Bargain Purchase				$	(1,023	)

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RIVER VALLEY BANCORP AND SUBSIDIARIES AND DUPONT STATE BANK

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS - CONTINUED

Note 3 – Pro Forma Statement of Income Adjustments

(m) Following is a summary of the pro forma adjustments to reflect the proposed business combination in the unaudited pro forma condensed combined statement of income for the nine months ended September 30, 2012:

n  Interest income on loans – amortization of $539,000 related to the value yield fair value adjustment

n  Interest income on loans – accretion of $360,000 related to the accretable credit fair value adjustment

n  Net occupancy and equipment expense – reduced depreciation of $35,000 related fair value adjustment

n  Other expense – amortization $77,000 related to the core deposit intangible

n  Income tax expense – tax benefit of $53,000 related to the pro forma adjustment to the pre-tax income

The above pro forma adjustments are made to recognize the amortization/accretion of the purchase accounting fair value adjustments for loans and time deposits, core deposit intangibles, and depreciation expense related to the fair value adjustment on premises for the respective periods assuming the merger took place on January 1, 2012.  The income tax effect of these items has been estimated at 39% of the net expense.

(n) Pro forma adjustment of $235,000 to remove direct, incremental costs related to the acquisition which are reflected in the historical financial statements of the acquirer and to remove the related tax benefit of $25,000 recorded on the deductible portion of the expense.

(o) Following is a summary of the pro forma adjustments to reflect the proposed business combination in the unaudited pro forma condensed combined statement of income for the year ended December 31, 2011:

n  Interest income on loans – amortization of $679,000 related to the value yield fair value adjustment

n  Interest income on loans – accretion of $476,000 related to the accretable credit fair value adjustment

n  Net occupancy and equipment expense – reduced depreciation of $47,000 related fair value adjustment

n  Other expense – amortization $103,000 related to the core deposit intangible

n  Income tax expense – tax benefit of $59,000 related to the pro forma adjustment to the pre-tax income

The above pro forma adjustments are made to recognize the amortization/accretion of the purchase accounting fair value adjustments for loans and time deposits, core deposit intangibles, and depreciation expense related to the fair value adjustment on premises for the respective periods assuming the merger took place on January 1, 2011.  The income tax effect of these items has been estimated at 39% of the net expense.

The fair value adjustments for the premium on performing loans has been estimated as a reduction of income (amortization expense) on a level yield basis over the life of the loans, estimated as 10 years.

The fair value adjustment for the amortization of core deposits intangible were estimated on a double declining balance basis, over ten years.

The fair value adjustment for the accretable discount on credit impaired loans has been estimated on an accelerated basis, over three years.

The fair value of adjustments to premises, recognized as a savings, was based on the straight-line method over 39 years.

The reduction in interest expense relative to the fair value adjustment for the premium on certificates of deposits (time deposits) was estimated on a level yield basis over the expected life of the deposits, approximately three years.

(p) Pro forma adjustment of $173,000 to remove direct incremental costs related to the acquisition which are reflected in the historical financial statements of the acquirer.

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