Idaho Banking Company

Idaho Banking Company Reports 3^rd Quarter Results

BOISE, October 21 /PR Newswire-First Call/ -- Idaho Banking Company (OTC Bulletin Board: IBCB) today reported third quarter net income of $40,000, or $.05 per share. Year-to-date the Bank made $68,000, or $.08 per share, which is 6% higher than the first nine months of 2001. Record single family mortgage loan originations and lower provisions for loan losses contributed to the improvement in earnings. The current interest rate environment has compressed the Bank’s year-to-date net interest margin to 4.01% but the balance sheet is very strong with capital at 9.76% of total assets of $113 million.

Nonperforming loans increased slightly during the third quarter to $386,000 at September 30, 2002. However, this total is nearly 40% less than the level of one year ago. During the third quarter of 2002 the allowance for loan losses increased from 1.50% to 1.84%. The provision for loan losses was $230,000 for the third quarter. This increase to the allowance was not diluted by charge-offs, as loan recoveries for the quarter slightly exceeded loan charge-offs.

As mentioned, shareholders’ equity remained strong, with a capital to asset ratio of 9.76% at September 30, 2002. Book value per share of $13.06 at September 30, 2002 is up from $12.91 a year ago.

"2002 has been a very challenging year for the Bank" said Mike Johnston, President and Chief Executive Officer. "Not only has the post September 11^th recession affected growth of the Bank’s loan portfolio but the consecutive interest rate cuts by the Federal Reserve has resulted in margin compression. But we’ve taken the opportunity in the past six months to focus on repositioning our loan portfolio and to significantly grow our deposit base. With a loan to deposit ratio of 76%, the Bank is well positioned to exploit opportunities associated with any economic expansion in the Treasure Valley."

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, VP Shareholder Relations at 208-472-4705, or Don D. Madsen, CFO at 208-947-1880

Idaho Banking Company
Financial Highlights (unaudited)
($ in thousands)

								Change
For the nine months ended September 30:			2002		2001		$			%
	Net interest income		$ 2,837		$ 2,923		$ (86)				-3%
	Provision for loan losses		630		745		(115)				-15%
	Mortgage banking income		913		810		103				13%
	Gains on loan sales		6		62		(56)				-90%
	Other noninterest income		243		277		(34)				-12%
	Noninterest expense		3,284		3,285		(1)				0%
	Net income before taxes		85		42		43				102%
	Income taxes		17		(22)		39				177%
	Net income		68		64		4				6%

	Net income per share
		Basic	0.08		0.08		-				0%
		Diluted	0.08		0.08		-				0%

									Change
At September 30:			2002		2001		$				%
	Loans		$ 71,142		$ 72,673		$ (1,531)				-2%
	Allowance for loan losses		1,309		1,192		117				10%
	Assets		112,671		104,191		8,480				8%
	Deposits		93,542		86,148		7,394				9%
	Shareholders' equity		10,996		10,116		880				9%
	Nonperforming loans		386		622		(236)				-38%
	Other real estate owned		0		65		(65)				-100%

	Book value per share		13.06		12.91		0.15				1%
	Shares of common stock outstanding		841,846		783,846		58,000				7%

	Allowance to loan ratio		1.84%		1.64%
	Allowance to nonperforming loans		3.4	X	1.9	X
	Nonperforming loans to total loans		0.54%		0.86%
									Change
Averages for nine months ended September 30:			2002		2001		$				%
	Loans		$ 69,659		$ 69,892		$ (233)				0%
	Earning assets		96,620		91,382		5,238				6%
	Assets		101,742		97,367		4,375				4%
	Deposits		81,008		79,860		1,148				1%
	Shareholders' equity		10,741		10,038		703				7%

For the nine months ended September 30:
	Return on average assets		0.09%		0.09%
	Return on average equity		0.85%		0.85%
	Average loans to deposits		85.99%		87.52%
	Net interest margin - tax equivalent		4.01%		4.36%
	Net loan charge-offs		580		428
	Net charge-offs to loans		1.11%		0.82%

Quarterly Trends (Unaudited)			2002 Q3		2002 Q2		2002 Q1		2001 Q4		2001 Q3
	Net interest income		$ 963		$ 925		$ 949		$ 952		$ 980
	Provision for loan losses		230		220		180		300		380
	Mortgage banking income		401		232		280		349		332
	Gains on loan sales		0		0		6		15		0
	Other noninterest income		86		79		78		82		85
	Noninterest expense		1,166		1,022		1,096		1,114		1,069
	Net income before taxes		54		(6)		37		(16)		(52)
	Income taxes		14		(7)		10		(18)		(30)
	Net income		40		1		27		2		(22)

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

	Average loans		71,473		67,784		69,701		72,171		72,534
	Average earning assets		103,075		92,784		93,901		95,791		93,059
	Average assets		108,336		98,023		98,762		101,101		99,147
	Average deposits		89,420		78,496		74,950		80,562		81,072
	Average shareholders' equity		10,832		10,799		10,588		10,101		10,099

	Return on average assets		0.15%		0.00%		0.11%		0.01%		-0.09%
	Return on average equity		1.47%		0.04%		1.03%		0.08%		-0.86%
	Average loans to deposits		79.93%		86.35%		93.00%		89.58%		89.47%
	Net interest margin - tax equivalent		3.79%		4.08%		4.20%		4.03%		4.26%

	Nonperforming loans - period end		$ 386		$ 313		$ 485		$ 567		$ 622
	Other real estate owned - period end		0		0		65		65		65
	Loans - period end		71,142		71,637		66,329		71,832		72,673
	Allowance for loan losses - period end		1,309		1,078		1,194		1,259		1,192
	Net charge-offs (recoveries) - quarterly		(1)		336		245		233		117

	Allowance to loans		1.84%		1.50%		1.80%		1.75%		1.64%
	Allowance to nonperforming loans		3.4	X	3.4	X	2.5	X	2.2	X	1.9	X
	Nonperforming loans to total loans		0.54%		0.44%		0.73%		0.79%		0.86%
	Net charge-offs to loans - annualized		-0.01%		1.99%		1.43%		1.28%		0.64%