Idaho Banking Company

Idaho Banking Company Reports Mid-Year Results

BOISE, July 22 /PR Newswire-First Call/ -- Idaho Banking Company (OTC Bulletin Board: IBCB) today reported net income of $28,000, or $.03 per share for the first six months of 2002. This is $58,000 less than net income in the first half of 2001. The major reasons for the decline include a lower net interest margin, lower gains from the sale of SBA loans, and a higher provision for loan losses. Net loan charge-offs were $581,000 in the first six months, compared to $311,000 a year ago.

Nonperforming loans have declined for three consecutive quarters, and totaled $313,000 at June 30, 2002. As a percentage of total loans, nonperforming loans were .44% at June 30. The current nonperforming loan level is about half of last September’s level, when they peaked at .86% of loans. The bank had one other real estate owned property that was sold during the second quarter.

The loan portfolio increased by 8% during the second quarter of 2002. This amount of new loan activity, with the use of stricter underwriting standards, is an encouraging shift after two prior quarters of declining loan totals. Deposit growth also accelerated due to a successful deposit promotion that began in June. Shareholders’ equity remained strong, with a capital to asset ratio of 10.45% at June 30, 2002. Book value per share of $12.96 at June 30, 2002 is up from $12.89 a year ago.

The directors, officers and staff of Idaho Banking Company extend their sincerest appreciation to former Governor Phil Batt for his dedication and valuable service as a member of the board of directors over the past several years. Governor Batt resigned from the board in May in order to take full advantage of his well-deserved retirement years. The bank wishes him well in all his future ventures.

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: Michael K. Johnston, President & CEO at 208-472-4702, 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)
(dollars in thousands)

							Change	Change
For the six months ended June 30:			2002		2001		$		%
	Net interest income		$ 1,874		$ 1,943		$ (69)		-4%
	Provision for loan losses		400		365		35		10%
	Mortgage banking income		512		478		34		7%
	Gains on loan sales		6		62		(56)		-90%
	Other noninterest income		157		192		(35)		-18%
	Noninterest expense		2,118		2,216		(98)		-4%
	Net income before taxes		31		94		(63)		-67%
	Income taxes		3		8		(5)		-63%
	Net income		28		86		(58)		-67%

	Net income per share
		Basic	0.03		0.11		(0.08)		-73%
		Diluted	0.03		0.11		(0.08)		-73%

							Change	Change
At June 30:			2002		2001		$		%
	Loans		$ 71,637		$ 70,785		$ 852		1%
	Allowance for loan losses		1,078		929		149		16%
	Assets		104,418		99,570		4,848		5%
	Deposits		84,127		82,589		1,538		2%
	Shareholders' equity		10,908		10,107		801		8%
	Nonperforming loans		313		358		(45)		-13%
	Other real estate owned		0		65		(65)		-100%

	Book value per share		12.96		12.89		0.07		1%

	Allowance to loan ratio		1.50%		1.31%
	Allowance to nonperforming loans		3.4	X	2.6	X
	Nonperforming loans to total loans		0.44%		0.51%
							Change	Change
Averages for six months ended June 30:			2002		2001		$		%
	Loans		$ 68,737		$ 68,550		$ 187		0%
	Earning assets		93,340		90,530		2,810		3%
	Assets		98,390		96,462		1,928		2%
	Deposits		76,733		79,244		(2,511)		-3%
	Shareholders' equity		10,694		10,007		687		7%

For the six months ended June 30:
	Return on average assets		0.06%		0.18%
	Return on average equity		0.53%		1.73%
	Average loans to deposits		89.58%		86.50%
	Net interest margin - tax equivalent		4.14%		4.42%
	Net loan charge-offs		581		311
	Net charge-offs to loans		1.70%		0.91%

Quarterly Trends (Unaudited)			2002 Q2		2002 Q1		2001 Q4		2001 Q3		2001 Q2
	Net interest income		$ 925		$ 949		$ 952		$ 980		$ 974
	Provision for loan losses		220		180		300		380		190
	Mortgage banking income		232		280		349		332		297
	Gains on loan sales		0		6		15		0		33
	Other noninterest income		79		78		82		85		89
	Noninterest expense		1,022		1,096		1,114		1,069		1,149
	Net income before taxes		(6)		37		(16)		(52)		54
	Income taxes		(7)		10		(18)		(30)		0
	Net income		1		27		2		(22)		54

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

	Average loans		67,784		69,701		72,171		72,534		69,994
	Average earning assets		92,784		93,901		95,791		93,059		91,781
	Average assets		98,023		98,762		101,101		99,147		97,551
	Average deposits		78,496		74,950		80,562		81,072		79,535
	Average shareholders' equity		10,799		10,588		10,101		10,099		10,009

	Return on average assets		0.00%		0.11%		0.01%		-0.09%		0.22%
	Return on average equity		0.04%		1.03%		0.08%		-0.86%		2.16%
	Average loans to deposits		86.35%		93.00%		89.58%		89.47%		88.00%
	Net interest margin - tax equivalent		4.08%		4.20%		4.03%		4.26%		4.35%

	Nonperforming loans - period end		$ 313		$ 485		$ 567		$ 622		$ 358
	Other real estate owned - period end		0		65		65		65		65
	Loans - period end		71,637		66,329		71,832		72,673		70,785
	Allowance for loan losses - period end		1,078		1,194		1,259		1,192		929
	Net charge-offs (recoveries) - quarterly		336		245		233		117		177

	Allowance to loans		1.50%		1.80%		1.75%		1.64%		1.31%
	Allowance to nonperforming loans		3.4	X	2.5	X	2.2	X	1.9	X	2.6	X
	Nonperforming loans to total loans		0.44%		0.73%		0.79%		0.86%		0.51%
	Net charge-offs to loans - annualized		1.99%		1.43%		1.28%		0.64%		1.01%