Idaho Banking Company

Idaho Banking Company Reports Quarterly Results

BOISE, July 20 /PR Newswire/ -- Idaho Banking Company (OTC Bulletin Board: IBCB) today reported net income of $54,000 for the second quarter of 2001, or $.07 per share. Net income in the second quarter of 2000 was $64,000, or $.08 per share. The decrease in net income is partially attributable to an increase in the provision for loan losses from $120,000 in the second quarter of last year to $190,000 in the second quarter of this year. Also, impacting year to year earnings were the dramatic declines in interest rates since the first of the year. Net interest margin decreased from 5.00% in the second quarter of 2000 to 4.35% in the second quarter of 2001.

Net income for the first six months of the year was $86,000, or $.11 per share, the same as last year. On a year-to-date basis the provision for loan losses was $365,000 in 2001, compared to $210,000 in 2000. Net interest margin was 4.42% for the first six months of 2001, compared to 4.82% in the same period last year. Helping to offset the decline in net interest margin was higher gross mortgage banking income, which increased from $189,000 last year to $478,000 in the first half of this year.

Loans increased 5.5% in the second quarter this year, and are 32% higher than one year ago. The management of loan quality, refinements in loan policies, and underwriting standards have received increased attention this year. Net loan charge-offs totaled $177,000 in the second quarter of 2001, compared to $134,000 in the first quarter of 2001 and $254,000 in the last quarter of 2000. Management is still not content with this level of activity and is spending considerable efforts to reduce future loan losses. The allowance for loan losses was 1.31% at June 30, 2001 compared to 1.30% at the end of last year.

Shareholders’ equity remained strong, with a capital to asset ratio of 10.15% at the end of the quarter. Book value per share has increased from $12.58 a year ago to $12.89 at June 30, 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: Cortland D. Rounds, President/CEO at 208-472-4700, 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 six months ended June 30:			2001	2000	$		%
	Net interest income		$ 1,943	$ 1,619	$ 324		20%
	Provision for loan losses		365	210	155		74%
	Mortgage banking income		478	189	289		153%
	Gains on loan sales		62	69	(7)		-10%
	Other noninterest income		192	232	(40)		-17%
	Noninterest expense		2,216	1,809	407		22%
	Net income before taxes		94	90	4		4%
	Income taxes		8	4	4		100%
	Net income		86	86	0		0%

	Net income per share
		Basic	0.11	0.11	-		0%
		Diluted	0.11	0.11	-		0%

						Change
At June 30:			2001	2000	$		%
	Loans		$70,785	$53,456	$17,329		32%
	Allowance for loan losses		929	741	188		25%
	Assets		99,570	79,911	19,659		25%
	Deposits		82,589	63,499	19,090		30%
	Shareholders' equity		10,107	9,862	245		2%

	Book value per share		12.89	12.58	0.31		2%

	Allowance to loan ratio		1.31%	1.39%

						Change
Averages for the six months ended June 30:			2001	2000	$		%
	Loans		$68,550	$47,999	$20,551		43%
	Earning assets		90,530	68,932	21,598		31%
	Assets		96,462	74,418	22,044		30%
	Deposits		79,244	60,474	18,770		31%
	Shareholders' equity		10,007	9,737	270		3%

	Return on average assets		0.18%	0.23%
	Return on average equity		1.73%	1.78%
	Average loans to deposits		86.50%	79.37%
	Net interest margin - tax equivalent		4.42%	4.82%

Quarterly Trends (Unaudited)			2001 Q2		2001 Q1		2000 Q4		2000 Q3		2000 Q2
	Net interest income		$ 974		$ 969		$ 1,009		$ 917		$ 858
	Provision for loan losses		190		175		355		120		120
	Mortgage banking income		297		181		109		150		112
	Gains on loan sales		33		29		0		28		58
	Other noninterest income		89		103		118		112		130
	Noninterest expense		1,149		1,067		1,017		997		970
	Net income before taxes		54		40		(136)		90		68
	Income taxes		0		8		(65)		24		4
	Net income		54		32		(71)		66		64

	Net income per share
		Basic	0.07		0.04		(0.09)		0.08		0.08
		Diluted	0.07		0.04		(0.09)		0.08		0.08

	Average loans		69,994		67,089		63,603		56,112		50,897
	Average earning assets		91,781		89,266		85,203		76,796		70,370
	Average assets		97,551		95,361		91,559		83,081		75,972
	Average deposits		79,535		78,949		76,419		68,435		62,370
	Average shareholders' equity		10,009		10,006		9,978		9,870		9,763

	Return on average assets		0.22%		0.14%		-0.31%		0.32%		0.34%
	Return on average equity		2.16%		1.30%		-2.83%		2.66%		2.64%
	Average loans to deposits		88.00%		84.98%		83.23%		81.99%		81.60%
	Net interest margin - tax equivalent		4.35%		4.49%		4.79%		4.86%		5.00%

	Nonperforming loans - period end		$ 358		$ 121		$ 93		$ 213		$ 67
	Other real estate owned - period end		65		65		65		290		290
	Loans - period end		70,785		67,105		67,159		58,921		53,456
	Allowance for loan losses - period end		929		916		875		775		741
	Net charge-offs (recoveries) - quarterly		177		134		254		86		(2)

	Allowance to loans		1.31%		1.37%		1.30%		1.32%		1.39%
	Allowance to nonperforming loans		2.6	X	7.6	X	9.4	X	3.6	X	11.1	X
	Quarterly net charge-offs - annualized		1.01%		0.81%		1.59%		0.61%		-0.02%