Blue River Bancshares, Inc. Announces Dividend and Third Quarter Earnings (Unaudited)

November 3, 2009

SHELBYVILLE, Ind., Nov. 3 /PRNewswire-FirstCall/ -- Blue River Bancshares, Inc. (OTC Bulletin Board: BRBI) today announced that a quarterly dividend of $0.01 per share was declared by the Board of Directors, payable December 1, 2009, to shareholders of record as of the close of business on November 15, 2009.

In addition, Blue River reported a consolidated net loss of $356,000 for the quarter ended September 30, 2009 and a net loss to common shareholders of $431,000. The net loss to common shareholders is the result of preferred stock dividends to the U.S. Treasury Department under the TARP Capital Purchase Program of $70,000 and $5,000 of preferred stock discount accretion. This net loss compares to consolidated net income of $96,000 for the same period of 2008. Fully diluted earnings (loss) per common share was ($.14) for the quarter ended September 30, 2009 and $.03 for the same period in 2008. Weighted average outstanding shares (fully diluted) were 2,999,149, for the quarter ended September 30, 2009, compared to 3,170,821 for the same quarter of 2008.

Net interest income before loan loss provision for the three months ended September 30, 2009 was $1,648,000 as compared to $1,810,000 for the same period of 2008. This decrease is primarily due to reversals of interest due from commercial loans, which either were placed on non-accrual status or were reclassified as troubled debt during the( )third quarter of 2009.

For the quarter ended September 30, 2009, the loan loss provision was $786,000 compared to $402,000 for the quarter ended September 30, 2008. For the three months ended September 30, 2009, $468,000 in loan loss provision was primarily related to one loan relationship. Please note the following table for information regarding our non-performing assets, which has contributed to the increase in loan loss provision:

                                  Quarter      Quarter    Quarter    Quarter
                                   Ended        Ended      Ended       Ended
                                 9/30/2009   6/30/2009  12/31/2008  9/30/2008
                                 ---------   ---------  ----------  ---------
     Non-Performing Assets
      Non-performing loans 90+
       days                     $3,912,675  $2,231,901 $1,198,706 $1,056,445
      Non-accrual loans          6,952,891   6,821,948  3,346,989  5,408,559
      Troubled Debt
       Restructured              2,742,973     180,002     58,801     58,991
      Other real estate          1,598,748   1,414,045  1,077,943  1,192,107
      Other repossessed assets      14,400      14,400     32,000     30,900
                                    ------      ------     ------     ------
                               $15,221,687 $10,662,296 $5,714,439 $7,747,002
                               =========== =========== ========== ==========

At SCB Bank, the loan loss provision was $776,000 for the three month period ended September 30, 2009 compared to $77,000 for the three month period ended September 2008. For the same periods, the loan loss allowance at the bank was $1,022,000 and $544,000, respectively. The provision and the allowance for loan losses at SCB Bank has increased significantly due to the increase in non-performing loans resulting also in an increase of the allowance to total loans ratio. As a result of the current economic conditions, during the third quarter 2009, our non-performing assets at SCB Bank, which includes other real estate owned (ORE) properties and other repossessed assets, increased by approximately $4,723,000 from second quarter 2009 levels. Please note the following table:

     SCB BANK ONLY
                                   Quarter    Quarter    Quarter    Quarter
                                    Ended      Ended      Ended      Ended
                                  9/30/2009  6/30/2009 12/31/2008  9/30/2008
                                  ---------  --------- ----------  ---------
      Non-Performing Assets
       Non-performing loans 90+
        days                     $3,912,675 $2,231,901 $1,198,706 $1,056,445
       Non-accrual
        loans                     6,856,819  6,515,510  2,586,481  3,533,866
       Troubled Debt
        Restructured              2,742,973    180,002     58,801     58,991
       Other real
        estate                      923,543    785,840    408,738     91,902
       Other repossessed assets      14,400     14,400     32,000     30,900
                                     ------     ------     ------     ------
                                $14,450,410 $9,727,653 $4,284,726 $4,772,104
                                =========== ========== ========== ==========

At Blue River, non-interest income for the quarter ended September 30, 2009 was $21,000 as compared to $139,000 for the quarter ended September 30, 2008. This quarter was negatively impacted by a $101,000 charge, which includes the write down of ORE and other repossessed assets, a $20,000 loss on the sale of available for sale securities and an OTTI (other than temporary impairment) charge on investments of $20,000.

Non-interest expense increased by $105,000 from the( )third quarter of 2008 to the third quarter of 2009. This increase was primarily the result of a $54,000 increase in FDIC premiums and a write off of an overdrawn checking account in the amount of $55,000.

For the nine months ended September 30, 2009, Blue River reported a net loss of $315,000 before preferred stock dividends, and discount accretion of $189,000, resulting in a net loss to common shareholders of ($.14) per share. This compares to $311,000 of income from continuing operations or $.09 per share, during the first three quarters of 2008.

Russell Breeden, III, Chairman, CEO and President of Blue River commented, "As a result of the recent economic conditions, we have experienced a dramatic increase in the amount of our non-performing loans. We consider this to be a very serious issue and are working aggressively to identify potential losses and proactively address them, whether that means charging them down or merely providing for that possibility. At quarter end, we had three non-accrual commercial and industrial loans, totaling slightly more than $4,000,000. We believe one of the loans will be fully resolved during the fourth quarter and another should have enough activity during the fourth quarter, that we can more precisely identify SCB Bank's credit exposure. The final loan relationship appears to have stabilized and we expect it to return to performing status. Even though the delinquent loans of 30+ days have not grown since the end of March, the troubled loans are migrating through the process and SCB Bank is taking the necessary steps to properly value these loans and liquidate the loan or collateral. However, whenever possible, we work with our borrowers to develop an alternative method of repayment which meets their current capabilities"

"Management believes it has the resources to address these credit issues and to continue to pursue opportunities in our market. Our consistent pre-provision, pretax monthly profit (which is made up of net interest income and non-interest income less non-interest expense) is our first level of protection, by providing the bank with a cushion to absorb in excess of $200,000 per month in credit issues. In addition, our excess capital, at SCB Bank, would allow us to sustain an immediate loss in excess of $7,500,000 and remain 'Well Capitalized', by regulatory standards. Over the near term, these resources will help us absorb the credit quality issues with which we are dealing. Long-term these results will create additional shareholder value."

"We are very pleased to announce that the staff of W. R. Clouse & Associates has joined SCB Bank, as of October 1, 2009. The Clouse organization has been in the mortgage origination business in Indianapolis for over 17 years and provides high quality products and service to over three thousand clients. We expect this activity to provide a meaningful increase to SCB Bank's non-interest income, through this fee based activity. Bill Clouse and his associates will present SCB Bank to the community in a very professional manner and we are excited about our joint prospects."

Blue River Bancshares, Inc. is the holding company for SCB Bank which does business in the Shelbyville, Indiana market under the name of Shelby County Bank, a division of SCB Bank.

Certain matters in this news release constitute forward-looking statements. Forward-looking statements can be identified by the fact that they include words like "believe," "expect," "anticipate," "estimate," and "intend," or future or conditional verbs such as "will," "would," "should," "could," or "may". These forward-looking statements relate to, among other things, expectations of the business environment in which Blue River operates, projections of future performance, perceived opportunities in the market and potential future credit experience.

These forward-looking statements are based upon the current beliefs and expectations of Blue River's management and are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are outside of Blue River's control. Blue River's actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements due to a wide range of factors, including, but not limited to, the general business environment, interest rates, the economy, competitive conditions between banks and non-bank financial services providers, regulatory changes, other factors that may be subject to circumstances beyond Blue River's control.

Blue River undertakes no obligation to revise these statements following the date of this press release.

                           CONSOLIDATED  FINANCIAL HIGHLIGHTS
                                    (UNAUDITED)


                               QUARTERS ENDED SEPTEMBER 30,

                                         2009               2008

    GROSS LOANS                          $173,374,000       $170,848,000
    TOTAL ASSETS                         $260,868,000       $260,737,000
    DEPOSITS                             $209,813,000       $200,206,000
    SHAREHOLDERS' EQUITY                  $11,903,000        $14,485,000
    BOOK VALUE PER SHARE                        $3.97              $4.60


    NET INTEREST INCOME                    $1,648,000         $1,810,000
    PROVISION FOR LOAN LOSSES                $786,000           $402,000
    NON INTEREST INCOME                       $21,000           $139,000
    NON INTEREST EXPENSE                   $1,491,000         $1,386,000
    INCOME TAX (BENEFIT) EXPENSE           $(252,000)            $65,000
    NET INCOME (LOSS)                      $(356,000)            $96,000

    NET INCOME (LOSS) TO COMMON
     SHAREHOLDERS                          $(431,000)            $96,000
    BASIC & DILUTIVE EARNINGS (LOSS)
    PER SHARE                                  $(.14)               $.03

SOURCE Blue River Bancshares, Inc.