Idaho Bancorp Reports Mid-Year Results

• Press Release
• Source: Idaho Bancorp
• On 7:41 pm EDT, Friday July 31, 2009

BOISE, ID--(Marketwire - 07/31/09) - Today Idaho Bancorp (the "Company") (OTC.BB:IDBC - News) reported that its wholly owned subsidiary, Idaho Banking Company, continues to be "well capitalized" with total risk based capital of 11.53%, well above the 10.00% regulatory standard for such designation, notwithstanding a write down of $3,870,000 in loan losses and an increase in allowance for loan losses of $3,030,000 resulting in a net loss for the Company of $5,969,000 for the six months ended June 30, 2009 compared to a net loss of $10,000 for the six months ended June 30, 2008. The reported loss represents ($3.24) per share compared to a net loss of ($0.01) per share for the first six months of 2008. The book value per share was $5.03 and $9.56 as of June 30, 2009 and 2008, respectively.

In light of continued economic weakness, the Company increased its allowance for loan losses to 3.86% of outstanding loans at June 30, 2009 compared to 1.46% and 2.17% as of June 30, 2008 and December 31, 2008, respectively. The Company's nonperforming assets were $15,945,000 and $11,287,000 at June 30, 2009 and December 31, 2008, respectively. The Company's loans considered to be more than thirty days past due and still on accrual status were $6,786,000, or 3.46% of outstanding loans, at June 30, 2009 compared to $491,000 at December 31, 2008. There were no loans more than ninety days past due and still accruing interest as of June 30, 2009 or December 31, 2008.

The net interest margin for the six-month period ended June 30, 2009 was 3.64% compared to 3.83% for the same time period in 2008. Net interest income was reduced by approximately $271,000 due to the reversal of earned interest and lost potential interest income resulting from non-accrual loans. This lost interest income accounts for 24 basis points in the reduction of the year-to-date net interest margin for 2009. Excluding the impact of non-accrual loans, the net interest margin would have improved 5 basis points. That improvement in the net interest margin is partially due to the Company's continued focus on growing lower costing core deposits with products like the Perfectly Free Non-Interest Business Checking product. The Company's in-market core deposits, excluding certificates of deposit, increased $12,269,000, or 18.1% when comparing balances at June 30, 2009 to balances at June 30, 2008.

The Company has had significant improvements in its 2009 non-interest income compared to 2008. The Company's Home Loan Center, through the origination of held-for-sale residential mortgage loans, has increased its noninterest income by $248,000, or 66%, when comparing the six-month periods ended June 30, 2009 to 2008, respectively. The Company's Home Loan Center continues to be very active in providing funds for individuals and families looking to buy or refinance homes in the Idaho market.

The Company continues to focus on reducing its non-interest expenses. The Company has reduced its full time equivalent employees to 82 as of June 30, 2009 from 86 at June 30, 2008. Salaries, excluding mortgage commissions and 2008 one time charges, have declined by approximately $194,000. The Company has cut year-to-date costs for travel and entertainment, supplies, postage and freight and various other costs. However, due to increased FDIC fee assessments for all insured banks, the Company's 2009 year-to-date FDIC insurance costs have increased by $76,000, or 121% from the costs recognized in 2008 for the same time period. Idaho Banking Company President and CEO James C. Latta commented, "Although the second half of 2009 will continue to be challenging given the state of the economy, the Company will take advantage of every opportunity to return to profitability and provide greater service to its clients." Mr. Latta continued by saying, "The recent successful conversion to new core application software will allow the Company to better serve the needs of clients and potential clients throughout the Idaho market."

Idaho Bancorp is the parent company of Idaho Banking Company, a state-chartered commercial bank and member of the Federal Reserve, which was organized in 1996 and operates four branch offices, and a construction & mortgage home loan center. The Company serves clients throughout southwestern Idaho.

This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected, including but not limited to the following: the concentration of loans of the company's banking subsidiary, particularly with respect to commercial and residential real estate lending; a continued decline in the housing and real estate market, changes in the regulatory environment and increases in associated costs, particularly ongoing compliance expenses and resource allocation needs in response to regulatory rules and guidelines; vendor quality and efficiency; employee recruitment and retention; the company's ability to control risks associated with rapidly changing technology both from an internal perspective as well as for external providers; increased competition among financial institutions; fluctuating interest rate environments; a tightening of available credit, and similar matters. Readers are cautioned not to place undue reliance on the forward-looking statements. Idaho Bancorp undertakes no obligation to publicly revise or update the forward-looking statements to reflect events or circumstances that arise after the date of this release. This statement is included for the express purpose of invoking PSLRA's safe harbor provisions.

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                        Idaho Bancorp and Subidiary
               Consolidated Financial Highlights (unaudited)
                 (Dollars in thousands, except per share)

For the six months ended June 30:
                                   2009       2008    $ Change   % Change
                                ---------  ---------  ---------  ---------
  Net interest income           $   4,063  $   4,236  $    (173)        -4%
  Provision for loan losses         6,900        345      6,555       1900%
  Mortgage banking income             623        375        248         66%
  Other noninterest income            270        256         14          5%
  Noninterest expense               4,486      4,577        (91)        -2%
  Net loss before taxes            (6,430)       (55)    (6,375)     11591%
  Income taxes                       (461)       (45)      (416)       924%
  Net loss                         (5,969)       (10)    (5,959)     59590%

  Loss per share
    Basic                           (3.24)     (0.01)     (3.23)     32300%
    Diluted                         (3.24)     (0.01)     (3.23)     32300%

At June 30:                        2009       2008    $ Change   % Change
                                ---------  ---------  ---------  ---------
  Loans                         $ 196,341  $ 196,894  $    (553)         0%
  Allowance for loan losses         7,583      2,868      4,715        164%
  Assets                          233,230    238,664     (5,434)        -2%
  Deposits                        190,776    177,416     13,360          8%
  Shareholders' equity             16,189     17,586     (1,397)        -8%
  Nonperforming loans              14,508         60     14,448        N/A
  Other real estate owned *         1,437        206      1,231        N/A

  Book value per share               5.03       9.56      (4.53)       -47%
  Shares of common stock
   outstanding                  1,841,128  1,839,610      1,518          0%

  Allowance to loan ratio            3.86%      1.46%
  Allowance to nonperforming
   loans                               52%      4780%
  Nonperforming loans to total
   loans                             7.39%      0.03%

Averages for the six months
 ended June 30:                    2009       2008    $ Change   % Change
                                ---------  ---------  ---------  ---------
  Loans                         $ 200,078  $ 191,511  $   8,567          4%
  Earning assets                  228,484    225,933      2,551          1%
  Assets                          238,524    236,078      2,446          1%
  Deposits                        182,842    185,237     (2,395)        -1%
  Shareholders' equity             21,988     17,763      4,225         24%

For the six months ended June 30:
  Return on average assets          -5.05%     -0.01%
  Return on average equity         -54.74%     -0.11%
  Average loans to deposits        109.43%    103.39%
  Net interest margin - tax
   equivalent                        3.64%      3.83%
  Net loan charge-offs
   (recoveries)                     3,870        100
  Net charge-offs (recoveries)
   to loans (annualized)             3.90%      0.11%

* Includes only retaken property.



                       Idaho Bancorp and Subsidiary
         Quarterly Consolidated Financial Highlights (unaudited)
                  (Dollars in thousands, except per share)

                          2009 Q2   2009 Q1   2008 Q4   2008 Q3   2008 Q2
                          --------  --------  --------  --------  --------
  Net interest income     $  1,943  $  2,120  $  2,084  $  2,250  $  2,122
  Provision for loan
   losses                    6,200       700     4,104       260       200
  Mortgage banking income      281       342       100       168       161
  Other noninterest
   income                      135       135       118       135       123
  Noninterest expense        2,314     2,172     1,718     2,044     2,443
  Net income / (loss)
   before taxes             (6,155)     (275)   (3,520)      249      (237)
  Income tax expense /
   (benefit)                  (335)     (126)     (237)       80       (98)
  Net income / (loss)       (5,820)     (149)   (3,283)      169      (139)

  Earnings / (loss) per
   share
    Basic                    (3.16)    (0.08)    (1.16)     0.09     (0.08)
    Diluted                  (3.16)    (0.08)    (1.16)     0.09     (0.08)

  Average loans            196,244   204,018   202,910   197,948   193,323
  Average earning assets   224,179   232,901   231,809   227,730   228,614
  Average assets           234,648   242,591   242,032   238,021   238,248
  Average deposits         181,921   183,895   180,689   176,924   185,846
  Average shareholders'
   equity                   21,896    22,081    17,703    17,763    17,985

  Return on average
   assets                    -9.95%    -0.25%    -5.40%     0.28%    -0.23%
  Return on average
   equity                  -106.61%    -2.74%   -73.78%     3.78%    -3.11%
  Average loans to
   deposits                 107.87%   110.94%   112.30%   111.88%   104.02%
  Net interest margin -
   tax equivalent             3.53%     3.75%     3.63%     3.99%     3.79%

  Nonperforming loans -
   period end             $ 14,508  $  7,637  $ 10,907  $  2,158  $     60
  Other real estate
   owned - period end *      1,437     1,155       380       336       206
  Loans - period end       196,341   193,404   209,648   199,788   196,894
  Allowance for loan
   losses - period end       7,583     4,118     4,553     3,024     2,868
  Net charge-offs
   (recoveries) -
   quarterly                 2,735     1,135     2,575       104        (6)

  Allowance to loans          3.86%     2.13%     2.17%     1.51%     1.46%
  Allowance to
   nonperforming loans          52%       54%       42%      140%     4780%
  Nonperforming loans to
   total loans                7.39%     3.95%     5.20%     1.08%     0.03%
  Net charge-offs to
   loans - annualized         5.59%     2.26%     5.05%     0.21%    -0.01%

* Includes only retaken property.

 
Contacts:
James C. Latta
President and CEO
208-472-4702
Bruce W. Barfuss
Executive Vice President and CFO
208-947-1873
Mary E. Brimson
Senior Vice President, Shareholder Relations
208-472-4705