Idaho Banking Company

Idaho Banking Company Reports 2002 Results

BOISE, January 24 /PR Newswire-First Call/ -- Idaho Banking Company (OTC Bulletin Board: IBCB) today reported net income for 2002 of $108,000 or $.13 per share. Compared to 2001, net income increased 64%, which contributed to an increase in ending book value per share of $13.21. Total assets of the Bank also grew significantly to end the year at $119,929,000. Lower provisions for loan losses and record single family mortgage loan originations contributed to the improvement in earnings. Lower interest rates and a lower loan-to-deposit ratio caused net interest margin in 2002 to fall to 3.87% compared to 4.28% in the previous year. The provision for income taxes in 2002 was $80,000, compared to a benefit in 2001 of $40,000. This large increase was the result of significantly higher pre-tax earnings and a decision to provide a valuation allowance for a portion of Idaho state tax benefits that have not been utilized and are being carried forward to future years.

Net income for the 4th quarter of 2002 was $40,000 compared to $2,000 in the last quarter of 2001. Nonperforming loans decreased slightly during the fourth quarter to $333,000 at December 31, 2002, and are 41% below the $567,000 of nonperforming loans at the beginning of 2002. During the fourth quarter of 2002 the allowance for loan losses increased from 1.84% to 1.98%. The provision for loan losses for the fourth quarter was $170,000 compared to net charge-offs of $69,000 for the quarter.

Shareholders’ equity remained strong, with a capital to asset ratio of 9.28% at December 31, 2002. Book value per share of $13.21 at the end of 2002 is up from $12.84 a year ago.

“Boise, like the rest of the nation, was measurably impacted by September 11th and the subsequent recession” said Mike Johnston, President and Chief Executive Officer. “Loan demand in the Treasure Valley was anemic which created a very difficult environment for the Bank to grow its earning assets. But exceptionally strong mortgage originations coupled with good expense control resulted in a significant improvement to our bottom line. The improvement is better illustrated by the 623% increase in net income before taxes. We also experienced strong core account growth as deposits and total assets increased 30% and 19% respectively. The numbers don’t reflect the hours of hard work put in by all of the Bank’s employees in repositioning our loan portfolio and developing a strategy to move the Bank forward in 2003 and beyond. Overall, I’m quite pleased with our financial performance for the year.”

Idaho Banking Company, a state-chartered commercial bank and member of the Federal Reserve Bank, was organized in 1996. The bank operates from three branch offices and one mortgage office in Ada County.

Source: Idaho Banking Company

Contacts: Michael K. Johnston, President & CEO at 208-472-4702, Mary E. Brimson, SVP 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:			2002	2001		$		%
	Net interest income		$ 3,807	$ 3,875		$ (68)		-2%
	Provision for loan losses		800	1,045		(245)		-23%
	Mortgage banking income		1,284	1,159		125		11%
	Gains on loan sales		6	77		(71)		-92%
	Other noninterest income		320	359		(39)		-11%
	Noninterest expense		4,429	4,399		30		1%
	Net income before taxes		188	26		162		623%
	Income taxes		80	(40)		120		300%
	Net income		108	66		42		64%

	Net income per share
		Basic	0.13	0.08		0.05		63%
		Diluted	0.13	0.08		0.05		63%

							Change
At December 31:			2002	2001		$		%
	Loans		$71,340	$71,832	$	(492)		-1%
	Allowance for loan losses		1,410	1,259		151		12%
	Assets		119,929	100,442		19,487		19%
	Deposits		99,510	76,306		23,204		30%
	Shareholders' equity		11,124	10,140		984		10%
	Nonperforming loans		333	567		(234)		-41%
	Other real estate owned		0	65		(65)		-100%

	Book value per share		13.21	12.84		0.37		3%
	Shares of common stock outstanding		841,846	789,846		52,000		7%

	Allowance to loan ratio		1.98%	1.75%
	Allowance to nonperforming loans		4.2%	2.2%
	Nonperforming loans to total loans		0.47%	0.79%
							Change
Averages for year ended December 31:			2002	2001		$		%
	Loans		$70,329	$70,467		(138)		0%
	Earning assets		100,520	92,494		8,026		9%
	Assets		105,782	98,308		7,474		8%
	Deposits		85,108	80,037		5,071		6%
	Shareholders' equity		10,772	10,054		718		7%

For the year ended December 31:
	Return on average assets		0.10%	0.07%
	Return on average equity		1.00%	0.66%
	Average loans to deposits		82.64%	88.04%
	Net interest margin - tax equivalent		3.87%	4.28%
	Net loan charge-offs		649	661
	Net charge-offs to loans		0.92%	0.94%

Quarterly Trends (Unaudited)			2002 Q4		2002 Q3		2002 Q2		2002 Q1		2001 Q4
	Net interest income		$ 970		$ 963		$ 925		$ 949		$ 952
	Provision for loan losses		170		230		220		180		300
	Mortgage banking income		371		401		232		280		349
	Gains on loan sales		0		0		0		6		15
	Other noninterest income		77		86		79		78		82
	Noninterest expense		1,145		1,166		1,022		1,096		1,114
	Net income before taxes		103		54		(6)		37		(16)
	Income taxes		63		14		(7)		10		(18)
	Net income		40		40		1		27		2

	Net income per share
		Basic	0.05		0.05		0.00		0.03		0.00
		Diluted	0.05		0.05		0.00		0.03		0.00

	Average loans		72,319		71,473		67,784		69,701		72,171
	Average earning assets		112,090		103,075		92,784		93,901		95,791
	Average assets		117,771		108,336		98,023		98,762		101,101
	Average deposits		97,273		89,420		78,496		74,950		80,562
	Average shareholders' equity		10,865		10,832		10,799		10,588		10,101

	Return on average assets		0.13%		0.15%		0.00%		0.11%		0.01%
	Return on average equity		1.46%		1.47%		0.04%		1.03%		0.08%
	Average loans to deposits		74.35%		79.93%		86.35%		93.00%		89.58%
	Net interest margin - tax equivalent		3.51%		3.79%		4.08%		4.20%		4.03%

	Nonperforming loans - period end		$ 333		$ 386		$ 313		$ 485		$ 567
	Other real estate owned - period end		0		0		0		65		65
	Loans - period end		71,340		71,142		71,637		66,329		71,832
	Allowance for loan losses - period end		1,410		1,309		1,078		1,194		1,259
	Net charge-offs (recoveries) - quarterly		69		(1)		336		245		233

	Allowance to loans		1.98%		1.84%		1.50%		1.80%		1.75%
	Allowance to nonperforming loans		4.2	X	3.4	X	3.4	X	2.5	X	2.2	X
	Nonperforming loans to total loans		0.47%		0.54%		0.44%		0.73%		0.79%
	Net charge-offs to loans - annualized		0.38%		-0.01%		1.99%		1.43%		1.28%