Idaho Banking Company

Idaho Banking Company Reports 2nd Quarter Results

BOISE, July 20 /PR Newswire/ -- Idaho Banking Company (OTC Bulletin Board: IBCB) today reported net income of $64,000 for the second quarter of 2000, compared to $71,000 in the same quarter of the prior year. Quarterly diluted earnings per share were $.08 compared to $.09 last year. Quarterly income was down primarily because of rapid loan growth, which caused the quarterly provision for loan losses to be $120,000 in the second quarter of 2000 compared to $60,000 in the same quarter last year. Income before taxes and the provision for loan losses increased 44% from the second quarter of 1999 to the second quarter of this year.

Net income for the first six months of the year was $86,000 compared to $129,000 last year. Diluted earnings per share were $.11 for the first half of 2000 compared to $.16 last year. Weakness in mortgage banking income had a negative impact on net income for the first six months of year. However, most of the year-to-year decline in net income was caused by the higher provision for loan losses, necessitated by strong loan growth. Year-to-date income before taxes and the provision for loan losses increased 31% from last year.

Loans grew by 62% from June 30, 1999 to June 30, 2000. The allowance for loan losses was increased to 1.39% of loans at June 30, from 1.30% at March 31, to provide for potential loss exposure in nonaccrual loans. The Bank’s tax equivalent net interest margin for the second quarter of 2000 was 5.00%, compared to 4.64% in the first quarter of 2000. The improving net interest margin was primarily due to the improving loan to deposit ratio. The loan to deposit ratio averaged 82% during the second quarter. Book value per share increased from $11.98 a year ago to $12.58 at June 30.

Bank officials were extremely pleased with the impressive growth of the loan portfolio during the first six months of 2000, particularly in light of increasing rates and a highly competitive local market. "The fact that we have been able to attain what we believed to be aggressive objectives while maintaining the integrity of the portfolio has us excited indeed", president and CEO Cort Rounds said.

Idaho Banking Company, a state-chartered commercial bank, was organized in 1996. Its primary emphasis is providing personalized service and local decision-making to 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: Cortland D. Rounds, President/CEO; Don D. Madsen, CFO; Mary E. Brimson, VP Shareholder Relations, 208-472-4700

Idaho Banking Company
Financial Highlights (unaudited)

					Change	Change
For the six months ended June 30:			2000	1999	$		%
	Net interest income		$ 1,619	$ 1,062	$ 557		52%
	Net interest income - tax equivalent		1,652	1,084	568		52%
	Provision for loan losses		210	100	110		110%
	Mortgage banking income		189	0	189		-
	Gains on loan sales		69	152	-83		-55%
	Other noninterest income		232	125	107		86%
	Noninterest expense		1,809	1,110	699		63%
	Net income before taxes		90	129	-39		-30%
	Income taxes		4	0	4		-
	Net income		86	129	-43		-33%

	Net income per share
		Basic	0.11	0.17	(0.06)		-35%
		Diluted	0.11	0.16	(0.05)		-31%

					Change	Change
At June 30:			2000	1999	$		%
	Loans		$ 53,456	$ 33,083	$ 20,373		62%
	Allowance for loan losses		741	427	314		74%
	Assets		79,911	60,236	19,675		33%
	Deposits		63,499	47,303	16,196		34%
	Shareholders' equity		9,862	9,059	803		9%

	Book value per share		12.58	11.98	0.60		5%

	Allowance to loan ratio		1.39%	1.29%

					Change	Change
Averages for the six months ended June 30:			2000	1999	$		%
	Loans		$ 47,999	$ 28,569	$ 19,430		68%
	Earning assets		68,932	49,900	19,032		38%
	Assets		74,418	53,021	21,397		40%
	Deposits		60,474	42,173	18,301		43%
	Shareholders' equity		9,737	8,882	855		10%

	Return on average assets		0.23%	0.49%
	Return on average equity		1.78%	2.93%
	Average loans to deposits		79.37%	67.74%
	Net interest margin - tax equivalent		4.82%	4.38%

Quarterly Trends

2000 Q2

2000 Q1

1999 Q4

1999 Q3

1999 Q2

Net interest income

$ 858

$ 761

$ 699

$ 653

$ 575

Net interest income - tax equivalent

874

778

714

665

587

Provision for loan losses

120

90

75

50

60

Mortgage banking income

112

77

65

0

0

Gains on loan sales

58

11

62

33

116

Other noninterest income

130

102

98

87

69

Noninterest expense

970

839

815

701

629

Net income before taxes

68

22

34

22

71

Income taxes

4

0

-26

-150

0

Net income

64

22

60

172

71

Net income per share

Basic

0.08

0.03

0.08

0.23

0.09

Diluted

0.08

0.03

0.07

0.21

0.09

Average loans

50,897

45,100

37,306

34,612

31,069

Average earning assets

70,370

67,493

62,420

57,709

52,616

Average assets

75,972

72,864

67,177

61,891

56,151

Average deposits

62,370

58,578

55,314

50,752

44,592

Average shareholders' equity

9,763

9,711

9,671

9,105

9,027

Return on average assets

0.34%

0.12%

0.35%

1.10%

0.51%

Return on average equity

2.64%

0.91%

2.46%

7.49%

3.15%

Average loans to deposits

81.60%

76.99%

67.44%

68.20%

69.67%

Net interest margin - tax equivalent

5.00%

4.64%

4.54%

4.57%

4.47%

Nonperforming loans - period end

67

344

54

4

0

Other real estate owned - period end

290

0

0

94

115

Loans - period end

53,456

47,644

40,822

35,885

33,083

Allowance for loan losses - period end

741

619

531

477

427

Net charge-offs (recoveries) - quarterly

(2)

2

22

0

(1)

Allowance to loans

1.39%

1.30%

1.30%

1.33%

1.29%

Allowance to nonperforming loans

11.1

X

1.8

X

9.8

X

119.3

X

-

Quarterly net charge-offs - annualized

-0.02%

0.02%

0.23%

0.00%

-0.01%