Idaho Banking Company

Idaho Banking Company Reports 2001 Results

BOISE, January 24 /PR Newswire/ -- Idaho Banking Company (OTC Bulletin Board: IBCB) today reported net income of $66,000, or $.08 per share for 2001. This compares to net income of $81,000, or $.10 per share in 2000. Earnings continue to be negatively impacted by a high level of loan charge-offs, and a decision to increase the allowance for loan losses from a ratio of 1.30% at December 31, 2000 to 1.75% at December 31, 2001. Management felt that an increase in the allowance for loan losses was warranted, due to an increase in nonperforming loans, and a careful evaluation of loss potential in the portfolio. The provision for loan losses was $1,045,000 in 2001, compared to $685,000 in 2000. Net loan charge-offs were $661,000, compared to $340,000 in the prior year.

Net interest margin was 4.28% in 2001, compared to 4.82% in 2000. The rapid decline in interest rates throughout 2001 had a negative impact on net interest margin, as the yields on earning assets fell more rapidly than the cost of funds. Helping to partially offset the negative impact of the decline in net interest margin was increased activity in the bank’s mortgage operation. Management is pleased to report that gross mortgage banking income increased from $448,000 in 2000 to $1,159,000 in 2001.

Loan growth in 2001 was 7%, with loans ending the year at $71.8 million. Deposits declined 3% during the year to $76.3 million. The decline in deposits was due to higher competition for deposits and lower demand for certificates of deposit in the current low interest-rate market. Shareholders’ equity remained strong, with a capital to asset ratio of 10.10% at the end of the year. Book value per share increased from $12.75 a year ago to $12.84 at December 31, 2001.

Idaho Banking Company, a state-chartered commercial bank and member of the Federal Reserve Bank, was organized in 1996. Its primary emphasis is providing personalized service and local decision-making for clients seeking a change from the automated and impersonal "big bank" atmosphere. The bank operates from three branch offices and one mortgage office in Ada County.

Source: Idaho Banking Company

Contacts: Mary E. Brimson, VP Shareholder Relations at 208-472-4705, or Don D. Madsen, CFO at 208-947-1880

Idaho Banking Company
Financial Highlights (unaudited)

								Change
For the year ended December 31:			2001		2000		$		%
	Net interest income		$ 3,875		$ 3,545		$ 330		9%
	Provision for loan losses		1,045		685		360		53%
	Mortgage banking income		1,159		448		711		159%
	Gains on loan sales		77		97		(20)		-21%
	Other noninterest income		359		462		(103)		-22%
	Noninterest expense		4,399		3,823		576		15%
	Net income before taxes		26		44		(18)		-41%
	Income taxes		(40)		(37)		(3)		8%
	Net income		66		81		(15)		-19%

	Net income per share
		Basic	0.08		0.10		(0.02)		-20%
		Diluted	0.08		0.10		(0.02)		-20%

								Change
At December 31:			2001		2000		$		%
	Loans		$ 71,832		$ 67,159		$ 4,673		7%
	Allowance for loan losses		1,259		875		384		44%
	Assets		100,442		94,074		6,368		7%
	Deposits		76,306		78,711		(2,405)		-3%
	Shareholders' equity		10,140		9,994		146		1%
	Nonperforming loans		567		93		474		510%
	Other real estate owned		65		65		0		0%

	Book value per share		12.84		12.75		0.09		1%

	Allowance to loan ratio		1.75%		1.30%
	Allowance to nonperforming loans		2.2	X	9.4	X
								Change
Averages for the year ended December 31:			2001		2000		$		%
	Loans		$ 70,467		$ 53,960		$ 16,507		31%
	Earning assets		92,494		74,998		17,496		23%
	Assets		98,308		80,904		17,404		22%
	Deposits		80,037		66,483		13,554		20%
	Shareholders' equity		10,054		9,831		223		2%

For the year ended December 31:
	Return on average assets		0.07%		0.10%
	Return on average equity		0.66%		0.82%
	Average loans to deposits		88.04%		81.16%
	Net interest margin - tax equivalent		4.28%		4.82%
	Net loan charge-offs		661		340
	Net charge-offs to loans		0.94%		0.63%

Quarterly Trends (Unaudited)			2001 Q4		2001 Q3		2001 Q2		2001 Q1		2000 Q4
	Net interest income		$ 952		$ 980		$ 974		$ 969		$ 1,009
	Provision for loan losses		300		380		190		175		355
	Mortgage banking income		349		332		297		181		109
	Gains on loan sales		15		0		33		29		0
	Other noninterest income		82		85		89		103		118
	Noninterest expense		1,114		1,069		1,149		1,067		1,017
	Net income before taxes		(16)		(52)		54		40		(136)
	Income taxes		(18)		(30)		0		8		(65)
	Net income		2		(22)		54		32		(71)

	Net income per share
		Basic	0.00		(0.03)		0.07		0.04		(0.09)
		Diluted	0.00		(0.03)		0.07		0.04		(0.09)

	Average loans		72,171		72,534		69,994		67,089		63,603
	Average earning assets		95,791		93,059		91,781		89,266		85,203
	Average assets		101,101		99,147		97,551		95,361		91,559
	Average deposits		80,562		81,072		79,535		78,949		76,419
	Average shareholders' equity		10,101		10,099		10,009		10,006		9,978

	Return on average assets		0.01%		-0.09%		0.22%		0.14%		-0.31%
	Return on average equity		0.08%		-0.86%		2.16%		1.30%		-2.83%
	Average loans to deposits		89.58%		89.47%		88.00%		84.98%		83.23%
	Net interest margin - tax equivalent		4.03%		4.26%		4.35%		4.49%		4.79%

	Nonperforming loans - period end		$ 567		$ 622		$ 358		$ 121		$ 93
	Other real estate owned - period end		65		65		65		65		65
	Loans - period end		71,832		72,673		70,785		67,105		67,159
	Allowance for loan losses - period end		1,259		1,192		929		916		875
	Net charge-offs (recoveries) - quarterly		233		117		177		134		254

	Allowance to loans		1.75%		1.64%		1.31%		1.37%		1.30%
	Allowance to nonperforming loans		2.2	X	1.9	X	2.6	X	7.6	X	9.4	X
	Net charge-offs to loans - annualized		1.28%		0.64%		1.01%		0.81%		1.59%