BOISE, October 22 /PR Newswire/ -- Idaho Banking Company (OTC Bulletin Board: IBCB) today reported a net loss of $22,000 for the third quarter of 2001, or $.03 per share. The loss is a result of a decision to increase the allowance for loan losses from a ratio of 1.31% at June 30, 2001 to 1.64% at September 30, 2001. Management felt that an increase in the allowance for loan losses was warranted, due to an increase in nonperforming loans, and a careful evaluation of loss potential in the portfolio. Management cited the banking industry as a whole has been affected this year by unsettled economic conditions and subsequent increases in nonperforming loans. Idaho Banking Company has not been immune to this trend.

Net income for the first nine months of the year was $64,000, or $.08 per share, compared to $152,000, or $.19 per share last year. On a year-to-date basis the provision for loan losses was $745,000 in 2001, compared to $330,000 in 2000. Net loan charge-offs for the first nine months of 2001 were $428,000, compared to $86,000 last year. Net interest margin was 4.36% for the first nine months of 2001, compared to 4.84% in the same period last year. The rapid decline in interest rates has had a negative impact on net interest margin, as the yields on our earning assets have fallen more rapidly than our cost of funds. Helping to partially offset the negative impact of the decline in net interest margin was increased activity in the bank’s mortgage operation. Management is pleased to report that gross mortgage banking income increased from $339,000 last year to $810,000 this year.

The bank welcomed a major milestone in the third quarter, as assets passed the $100 million mark. Total assets were $104 million on September 30, up 19% from last year. Loans are 23% higher than one year ago, and deposits have grown by 16% during the same period. Shareholders’ equity remained strong, with a capital to asset ratio of 9.71% at the end of the quarter. Book value per share has increased from $12.73 a year ago to $12.91 at September 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.

Idaho Banking Company
Financial Highlights (unaudited)