Idaho Banking Company

Idaho Banking Company Reports 3rd Quarter Results

BOISE, October 20 /PR Newswire/ -- Idaho Banking Company (OTC Bulletin Board: IBCB) today reported net income of $66,000 for the third quarter of 2000, or $.08 per share. Earnings for the third quarter of 1999 were favorably impacted by a large adjustment of the valuation allowance for deferred taxes. Ignoring the impact of taxes, quarterly income before taxes was up dramatically from $22,000 last year to $90,000 this year. Earnings continue to be impacted by the bank’s rapid growth. Two new branch offices and a mortgage office were added last year. While related expenses continue to affect current earnings, these expansions are expected to contribute significantly to future earnings of the Bank.

Net income for the first nine months of the year was $152,000, or $.19 per share. This year’s net income is not easily compared to last year’s net income because of the large nonrecurring tax benefit in 1999. Year-to-date income before taxes, which is more comparable, grew from $151,000 to $180,000, an increase of 19%. This gain in pre-tax earnings was despite a large increase in the provision for credit losses necessitated by rapid loan growth. The year-to-date provision for loan losses increased 120% from $150,000 last year to $330,000 this year.

Loans grew by 64% from September 30, 1999 to September 30, 2000. The allowance for loan losses was 1.32% of loans at September 30, 2000. The Bank’s tax equivalent net interest margin for the third quarter of 2000 was 4.86%, compared to 4.57% in the third quarter of 1999. The net interest margin improvement was primarily due to the improving loan to deposit ratio. The loan to deposit ratio averaged 82% during the third quarter. Book value per share increased from $12.19 a year ago to $12.73 at September 30.

Bank officials were extremely pleased with the impressive growth of the loan portfolio during the first nine months of 2000, particularly in light of interest rate movement and a highly competitive local market. President and CEO Cort Rounds expressed that while the Bank has enjoyed reaching some pretty aggressive goals in terms of loan growth, the primary focus has always been on maintaining a sound and healthy portfolio. "We are very diligent that each and every loan booked meets certain criteria to uphold the integrity of the Bank’s loan portfolio. We want to please our shareholders, our regulators, and of course our customers", he 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 or Mary E. Brimson, VP Shareholder Relations, 208-472-4700. Don D. Madsen, CFO at 208-947-1880

Idaho Banking Company
Financial Highlights (unaudited)

						Change
For the nine months ended September 30:			2000	1999	$		%
	Net interest income		$ 2,536	$ 1,715	$ 821		48%
	Net interest income - tax equivalent		2,591	1,749	842		48%
	Provision for loan losses		330	150	180		120%
	Mortgage banking income		339	0	339		N/A
	Gains on loan sales		97	185	(88)		-48%
	Other noninterest income		344	212	132		62%
	Noninterest expense		2,806	1,811	995		55%
	Net income before taxes		180	151	29		19%
	Income taxes		28	(150)	178		119%
	Net income		152	301	(149)		-50%

	Net income per share
		Basic	0.19	0.40	(0.21)		-53%
		Diluted	0.19	0.38	(0.19)		-50%

						Change
At September 30:			2000	1999	$		%
	Loans		$ 58,921	$ 35,885	$ 23,036		64%
	Allowance for loan losses		775	477	298		62%
	Assets		87,818	67,004	20,814		31%
	Deposits		74,211	53,433	20,778		39%
	Shareholders' equity		9,978	9,272	706		8%

	Book value per share		12.73	12.19	0.54		4%

	Allowance to loan ratio		1.32%	1.33%

						Change
Averages for the nine months ended September 30:			2000	1999	$		%
	Loans		$ 50,723	$ 30,606	$ 20,117		66%
	Earning assets		71,572	52,532	19,040		36%
	Assets		77,326	56,011	21,315		38%
	Deposits		63,147	45,064	18,083		40%
	Shareholders' equity		9,782	8,958	824		9%

	Return on average assets		0.26%	0.72%
	Return on average equity		2.08%	4.49%
	Average loans to deposits		80.33%	67.92%
	Net interest margin - tax equivalent		4.84%	4.45%

Quarterly Trends			2000 Q3		2000 Q2		2000 Q1		1999 Q4		1999 Q3
	Net interest income		$ 917		$ 858		$ 761		$ 699		$ 653
	Net interest income - tax equivalent		939		874		778		714		665
	Provision for loan losses		120		120		90		75		50
	Mortgage banking income		150		112		77		65		0
	Gains on loan sales		28		58		11		62		33
	Other noninterest income		112		130		102		98		87
	Noninterest expense		997		970		839		815		701
	Net income before taxes		90		68		22		34		22
	Income taxes		24		4		0		(26)		(150)
	Net income		66		64		22		60		172

	Net income per share
		Basic	0.08		0.08		0.03		0.08		0.23
		Diluted	0.08		0.08		0.03		0.07		0.21

	Average loans		56,112		50,897		45,100		37,306		34,612
	Average earning assets		76,796		70,370		67,493		62,420		57,709
	Average assets		83,081		75,972		72,864		67,177		61,891
	Average deposits		68,435		62,370		58,578		55,314		50,752
	Average shareholders' equity		9,870		9,763		9,711		9,671		9,105

	Return on average assets		0.32%		0.34%		0.12%		0.35%		1.10%
	Return on average equity		2.66%		2.64%		0.91%		2.46%		7.49%
	Average loans to deposits		81.99%		81.60%		76.99%		67.44%		68.20%
	Net interest margin - tax equivalent		4.86%		5.00%		4.64%		4.54%		4.57%

	Nonperforming loans - period end		213		67		344		54		4
	Other real estate owned - period end		290		290		0		0		94
	Loans - period end		58,921		53,456		47,644		40,822		35,885
	Allowance for loan losses - period end		775		741		619		531		477
	Net charge-offs (recoveries) - quarterly		86		(2)		2		22		0

	Allowance to loans		1.32%		1.39%		1.30%		1.30%		1.33%
	Allowance to nonperforming loans		3.6	X	11.1	X	1.8	X	9.8	X	119.3	X
	Quarterly net charge-offs - annualized		0.61%		-0.02%		0.02%		0.23%		0.00%