updated 2/24/2011 5:17:29 PM ET 2011-02-24T22:17:29

COEUR D'ALENE, Idaho, Feb. 24, 2011 (GLOBE NEWSWIRE) -- Jack W. Gustavel, Chairman and Chief Executive Officer of Idaho Independent Bank ("IIB" or the "Bank") (OTCBB:IIBK), announced IIB's consolidated unaudited financial results for the fourth quarter and year ended December 31, 2010.

Mr. Gustavel reported that IIB's net income before tax for the quarter ended December 31, 2010, was $107,000, compared to a net loss before tax of $2.5 million for the same period a year ago and a net loss before tax of $2.4 million for the third quarter of 2010. After posting a $3.1 million non-cash income tax adjustment to IIB's deferred tax assets, IIB's net loss after tax for the quarter ended December 31, 2010, was $2.9 million, or $0.46 per diluted share, compared to a net loss after tax of $1.3 million, or $0.20 per diluted share, for the same period a year ago. IIB's net loss after tax for the year ended December 31, 2010, including the non-cash adjustment, was $5.7 million, or $0.89 per diluted share, compared to a net loss after tax of $6.7 million, or $1.06 per diluted share, for the year ended December 31, 2009. Prior period results have been restated to reflect earlier revisions to amounts reported for 2009.

Primarily because of provision for loan loss expenses incurred over the last two years, IIB accumulated a substantial deferred tax asset that represents timing differences related to future tax benefits.  IIB expects to recapture some or all of the non-cash adjustment to its deferred tax asset when it becomes more certain the Bank will be able to realize the tax benefit through future earnings.  In that event, the Bank would be able to reduce its future income tax expense.

 "We made solid progress in addressing non-performing assets, reducing concentrations in land and land development loans, and improving profitability.  While we are pleased with the progress, there is still work to be done. Improved asset quality, reduced costs, and managed growth will be priorities in 2011," Mr. Gustavel said.  IIB continues to maintain very strong capital and remains well above the threshold required to be considered "Well-Capitalized" under regulatory guidelines. The Total Risk-Based Capital Ratio improved to 16.9% at December 31, 2010, compared to 15.4% at December 31, 2009. 

In response to the Bank's plan to shrink the balance sheet, IIB's total assets as of December 31, 2010, decreased $51.6 million, or 10.5%, to $441.6 million from $493.2 million at December 31, 2009. Total loans, including loans held-for-sale, at December 31, 2010, decreased $92.0 million, or 24.0%, to $291.1 million from $383.0 million at December 31, 2009. Total deposits and customer repurchase agreements decreased $46.5 million, or 11.2%, to $368.8 million at December 31, 2010, compared to $415.3 million at December 31, 2009. 

As of December 31, 2010, IIB's reserve for loan loss (the "Reserve") totaled $9.9 million, or 3.4% of total loans, excluding loans held-for-sale. Monthly, the Bank goes through a rigorous review of its loan portfolio and an extensive analysis to confirm the adequacy of its Reserve. The analysis takes into account the known issues, while providing for inherent losses in the loan portfolio. Non-performing assets declined 12.0% to $41.6 million, or 9.4% of total assets at December 31, 2010, compared to $47.1 million, or 9.8% of total assets as of September 30, 2010.  Non-performing assets at December 31, 2010, included $30.9 million in non-performing loans and $10.7 million in other real estate owned.

About IIB

IIB was established in 1993 as an Idaho state-chartered, commercial bank and currently operates branches in Boise (3), Meridian, Coeur d'Alene, Nampa, Mountain Home, Hayden, Caldwell, Star, Eagle, and Sun Valley/Ketchum, Idaho.  IIB has approximately 200 employees throughout the State of Idaho.  To learn more about IIB, visit us online at www.theidahobank.com.

Statements contained herein concerning future performance, developments or events, expectations for earnings, growth and market forecasts, and any other statements that are not historical facts are forward-looking statements that are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995, and as such, are subject to a number of risks and uncertainties that might cause actual results to differ materially from expectations or our stated objectives. Factors that could cause actual results to differ materially, include, but are not limited to: continued declines or worsening in regional and general economic conditions; changes in interest rates, deposit flows, demand for loans, real estate values, competition, or loan delinquency rates; changes in accounting principles, practices, policies, or guidelines; changes in legislation or regulations; changes in the regulatory environment; changes in monetary policy of the Federal Reserve Bank; changes in fiscal policy of the Federal government and the State of Idaho; changes in other economic, competitive, governmental, regulatory and technological factors affecting operations, pricing, products, and services; material unforeseen changes in the liquidity, results of operations, or financial condition of the Bank's customers. These risks and other factors are described in greater detail  in the Bank's filings with the Federal Deposit Insurance Corporation, including, without limitation, the Item 1A Risk Factors section of the Bank's Annual Report on Form 10-K for the year ended December 31, 2009. Accordingly, these factors should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. The Bank undertakes no responsibility to update or revise any forward-looking statements.

Idaho Independent Bank        
Financial Highlights (unaudited)        
(dollars in thousands, except share data)        
         
  Three Months Ended Year Ended
CONDENSED STATEMENT OF OPERATIONS December 31, December 31,
  2010 2009 (1) 2010 2009
Net interest income  $ 4,329  $ 5,562  $ 17,879  $ 24,072
Provision for loan losses  828  5,430  8,673  20,115
Net interest income after provision for loan losses  3,501  132  9,206  3,957
Noninterest income  1,506  1,265  4,738  5,377
Noninterest expense  4,900  3,878  18,429  20,514
Net income (loss) before taxes  107  (2,481)  (4,485)  (11,180)
Income tax expense (benefit)  3,031  (1,223)  1,194  (4,529)
Net loss  $ (2,924)  $ (1,258)  $ (5,679)  $ (6,651)
         
Loss per share:        
Basic  $ (0.46)  $ (0.20)  $ (0.89)  $ (1.06)
Diluted  $ (0.46)  $ (0.20)  $ (0.89)  $ (1.06)
         
SELECTED BALANCE SHEET ACCOUNTS December 31, December 31,    
  2010 2009 (1)    
Loans held for sale  $ 3,905  $ 2,350    
Loans receivable  287,237  380,639    
Gross loans  291,142  382,989    
Allowance for loan losses  9,853  17,140    
Total assets  441,557  493,239    
Deposits  350,812  388,998    
Customer repurchase agreements  17,947  26,258    
Total deposits and repurchase agreements  368,759  415,256    
Stockholders' equity  56,693  62,157    
         
PER SHARE DATA        
Common shares outstanding  6,357,112  6,357,112    
Book value per share  $ 8.92  $ 9.78    
         
CAPITAL RATIOS        
Tier 1 capital (to average assets) 11.76% 12.02%    
Tier 1 capital (to risk-weighted assets) 15.58% 14.11%    
Total risk-based capital (to risk-weighted assets) 16.85% 15.39%    
         
  Three Months Ended Year Ended
PERFORMANCE RATIOS (annualized) December 31, December 31,
  2010 2009 (1) 2010 2009
Return on average assets -2.44% -0.96% -1.17% -1.23%
Return on average equity -19.39% -7.74% -9.21% -10.12%
Efficiency ratio 83.98% 56.80% 81.48% 69.66%
Net interest margin 4.05% 4.63% 4.08% 4.84%
______        
(1) Certain quarterly financial information was restated to reflect revisions to previously reported amounts.
CONTACT:  Kurt R. Gustavel, President & COO
          IDAHO INDEPENDENT BANK
          401 W. Front Street
          Boise, Idaho  83702
          (208) 338-8000

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