Idaho Banking Company Reports Record 2003 Results

BOISE , January 23 /PR Newswire-First Call/ -- Idaho Banking Company (OTC Bulletin Board: IBCB) today reported record net income for 2003 of $362,000, which represents a 235% increase over net income for the prior year. Diluted net income for the year was $.42 per share compared to $.13 per share reported for 2002. The Bank recorded net income in the fourth quarter of $108,000, which compares very favorably to the $40,000 reported for the same period in 2002. Both fourth quarter and annual earnings represent record levels for the Bank.

The Bank ended the year with total assets of $139 million. During 2003 the Bank grew both its loan portfolio and deposit base by 24% and 21% respectively. At December 31, 2003 total loans were $89 million and total deposits were $120 million. Book value per share showed a $.20 increase during the year to end at $13.41.

Compared to 2002, when it had net loan losses of $649,000, the Bank ended 2003 with net loan recoveries of $31,000. Non-performing loans also compare favorably with only a modest $64,000 at December 31, 2003. At the end of 2002 non-performing loans were $333,000. As a percentage of total loans, non-performing loans decreased from .47% to .07% during the year. As of December 31, 2003 the Allowance for Loan Losses was 1.74% of total loans. During 2003 the funding of the Allowance through the Provision for Loan Losses was a modest $100,000.

“I'm extremely pleased with our performance during 2003” said Mike Johnston, President and CEO. “After a relatively flat first half, driven primarily by a sluggish business economy, the Bank gained substantial momentum and turned in strong third and fourth quarter results. Even though demand for mortgage loans waned substantially in the second half, the strong growth in our loan portfolio fueled our results in the third and fourth quarters. I'm also extremely gratified by the turnaround in the quality of the loan portfolio. Both the growth of our core business and the improvements in loan quality represent the hard work of every employee; not just this year but for two years.”

Idaho Banking Company, a state-chartered commercial bank and member of the Federal Reserve Bank, was organized in 1996. The bank operates three branch offices and one mortgage office in Ada County . A fourth branch, located in Meridian , Idaho , is currently under construction and is expected to open in the second quarter of 2004.

Source: Idaho Banking Company

Contacts: Michael K. Johnston, President & CEO at 208-472-4702, Mary E. Brimson, SVP Shareholder Relations at 208-472-4705, or Don D. Madsen, EVP and CFO at 208-947-1880

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

								Change
For the year ended December 31:			2003		2002		$		%
	Net interest income		$ 4,048		$ 3,807		$ 241		6%
	Provision for loan losses		100		800		(700)		-88%
	Mortgage banking income		1,161		1,284		(123)		-10%
	Securities gains		56		3		53		1767%
	Other noninterest income		277		323		(46)		-14%
	Noninterest expense		4,870		4,429		441		10%
	Net income before taxes		572		188		384		204%
	Income taxes		210		80		130		163%
	Net income		362		108		254		235%

	Net income per share
		Basic	0.43		0.13		0.30		231%
		Diluted	0.42		0.13		0.29		223%

								Change
At December 31:			2003		2002		$		%
	Loans		$ 88,612		$ 71,340		$ 17,272		24%
	Allowance for loan losses		1,541		1,410		131		9%
	Assets		139,497		119,929		19,568		16%
	Deposits		120,112		99,510		20,602		21%
	Shareholders' equity		11,371		11,124		247		2%
	Nonperforming loans		64		333		(269)		-81%
	Other real estate owned		0		0		0

	Book value per share		13.41		13.21		0.20		2%
	Shares of common stock outstanding		848,016		841,846		6,170		1%

	Allowance to loan ratio		1.74%		1.98%
	Allowance to nonperforming loans		24.1	X	4.2	X
	Nonperforming loans to total loans		0.07%		0.47%
								Change
Averages for the year ended December 31:			2003		2002		$		%
	Loans		$ 77,866		$ 70,329		$ 7,537		11%
	Earning assets		120,398		100,520		19,878		20%
	Assets		126,278		105,782		20,496		19%
	Deposits		105,356		85,108		20,248		24%
	Shareholders' equity		11,088		10,772		316		3%

For the year ended December 31:
	Return on average assets		0.29%		0.10%
	Return on average equity		3.26%		1.00%
	Average loans to deposits		73.91%		82.64%
	Net interest margin - tax equivalent		3.44%		3.87%
	Net loan charge-offs (recoveries)		(31)		649
	Net charge-offs to loans		-0.04%		0.92%

Quarterly Trends (Unaudited)			2003 Q4	2003 Q3	2003 Q2	2003 Q1	2002 Q4
	Net interest income		$ 1,118	$ 1,070	$ 925	$ 935	$ 970
	Provision for loan losses		0	0	20	80	170
	Mortgage banking income		175	229	378	379	371
	Securities gains		0	0	56	0	0
	Other noninterest income		67	61	77	72	77
	Noninterest expense		1,173	1,216	1,295	1,186	1,145
	Net income before taxes		187	144	121	120	103
	Income taxes		79	43	38	50	63
	Net income		108	101	83	70	40

	Net income per share
		Basic	0.13	0.12	0.10	0.08	0.05
		Diluted	0.12	0.12	0.10	0.08	0.05

	Average loans		85,528	79,012	75,030	71,730	72,319
	Average earning assets		127,554	121,515	118,301	114,061	112,090
	Average assets		134,031	127,840	123,547	119,516	117,771
	Average deposits		111,943	104,555	104,594	100,211	97,273
	Average shareholders' equity		11,279	11,132	11,009	10,930	10,865

	Return on average assets		0.32%	0.31%	0.27%	0.24%	0.13%
	Return on average equity		3.80%	3.60%	3.02%	2.60%	1.46%
	Average loans to deposits		76.40%	75.57%	71.73%	71.58%	74.35%
	Net interest margin - tax equivalent		3.55%	3.57%	3.21%	3.40%	3.51%

	Nonperforming loans - period end		$ 64	$ 289	$ 348	$ 261	$ 333
	Other real estate owned - period end		0	0	0	0	0
	Loans - period end		88,612	82,079	76,958	74,210	71,340
	Allowance for loan losses - period end		1,541	1,550	1,586	1,575	1,410
	Net charge-offs (recoveries) - quarterly		10	35	9	(85)	69

	Allowance to loans		1.74 %	1.89 %	2.06 %	2.12 %	1.98 %
	Allowance to nonperforming loans		24.1 X	5.4 X	4.6 X	6.0 X	4.2 X
	Nonperforming loans to total loans		0.07%	0.35%	0.45%	0.35%	0.47%
	Net charge-offs to loans - annualized		0.05%	0.18%	0.05%	-0.48%	0.38%