Intermountain Community Bancorp Reports Fourth Quarter Profit and Full Year 2012 Results

Intermountain Community Bancorp Reports Fourth Quarter Profit and Full Year
2012 Results

SANDPOINT, Idaho, Feb. 13, 2013 (GLOBE NEWSWIRE) -- Intermountain Community
Bancorp (Nasdaq:IMCB), the holding company for Panhandle State Bank, reported
$910,000, or $0.14 per share in net income applicable to common shareholders
for the fourth quarter 2012, as higher non interest income, lower interest
expense and a lower loan loss provision offset lower interest income and
higher operating expenses than reported in the third quarter. The fourth
quarter 2012 results compare to net income applicable to common shareholders
of $343,000 and $907,000, or $0.05 and $1.08 per share for the third quarter
of 2012 and fourth quarter of 2011, respectively. All per share results have
been adjusted for the impact of a 1-for-10 reverse stock split completed by
the Company in the fourth quarter of 2012. 2012 results also reflect the
issuance of new shares in two successful capital raises earlier in the year.

Net income applicable to common shareholders improved to $1.9 million, or
$0.33 per share, for 2012, compared to a net loss of $1.8 million, or $2.15
per share, in the comparable 2011 period, as decreases in interest expense,
operating expense and the provision for loan loss offset decreases in interest
income.

"We are pleased with the consistent improvement in profit shown over the past
couple years, and optimistic about our recent and future growth in loans and
earnings," said Chief Executive Officer Curt Hecker. "The Company's strong
financial position coupled with our excellent staff and local,
community-focused development plans continue to build momentum in our
markets."

Fourth Quarter 2012 Highlights (at or for the period ended December 31, 2012,
compared to September 30, 2012, and December 31, 2011)

  *Net loans receivable increased to $520.8 million at year end 2012, up from
    $502.9 million and $502.2 million at September 30, 2012 and December 31,
    2011, respectively, as commercial and commercial real estate production
    activity increased.
  *Interest expense continued to drop, totaling $1.01 million for the fourth
    quarter, compared to $1.26 million in the third quarter of 2012 and $1.43
    million in the fourth quarter of 2011. The Company's cost of interest
    bearing liabilities totaled 0.49% for the quarter, down from 0.59% in the
    third quarter and 0.67% in the fourth quarter of 2011.
  *The provision for loan losses dropped to $619,000 from $1.2 million in the
    third quarter of 2012 and $706,000 in the fourth quarter of 2011,
    respectively, as the negative impact of problem loans continues to
    subside.
  *Nonperforming assets (NPAs) totaled 1.18% of total assets at December 31,
    2012 stable from 1.18% at September 30, 2012 and down from 1.71% at
    December 31, 2011.
  *Loan delinquencies (30 days past due and over) continue to remain very
    low, at 0.13% of total loans compared to 0.21% in the third quarter and
    0.28% in the fourth quarter of 2011.
  *The Company's community-centric outreach initiative, "Powered by
    Community" continues to develop partnerships focused on economic
    advancement, education, job-readiness, and small business enhancement. The
    Bank remains deeply committed to assisting its communities through
    volunteerism, seed grants and sponsorship of far-reaching initiatives
    throughout its regional markets.

Assets and Loan Portfolio Summary

Assets totaled $972.1 million at December 31, 2012, up from $953.2 million at
September 30, 2012, and up from $934.2 million at December 31, 2011. The
increase from the prior year reflected the additional capital raised in the
Company's capital offerings earlier this year, offset by reductions in cash as
the Company used funds available to reduce higher rate Federal Home Loan Bank
advances, and brokered and retail certificates of deposit. Net loans
receivable increased by $17.9 million during the quarter as increased
commercial and commercial real estate loan production offset continued
reductions in land development loans.

"Loan demand is picking up in our markets and our lending teams are working
with many borrowers to grow present and future business," noted Hecker.
"Although we anticipate a seasonal reduction in agricultural loans in the
first quarter of 2013, we are encouraged that new loan production seems to be
gaining steam overall," he added.

The following tables summarize the Company's loan portfolio by type and
geographic region, and provide trending information over the prior year.

LOANS BY CATEGORIES
(Dollars in thousands)   12/31/2012 % of   9/30/2012  % of   12/31/2011 % of
                                    total             total             total
Commercial loans         $ 121,307  23.0%  $ 115,203  22.5%  $ 110,395  21.4%
Commercial real estate   186,844    35.4%  174,965    34.2%  167,586    32.6%
Commercial construction  3,832      0.7%   2,573      0.5%   6,335      1.2%
Land and land            31,278     5.9%   33,814     6.6%   38,499     7.5%
development
Agriculture              85,967     16.3%  87,851     17.2%  81,316     15.8%
Multifamily              16,544     3.1%   17,849     3.5%   26,038     5.1%
Residential real estate  60,020     11.3%  59,367     11.6%  58,861     11.4%
Residential construction 940        0.2%   532        0.1%   2,742      0.5%
Consumer                 9,626      1.8%   9,724      1.9%   11,847     2.3%
Municipal                12,267     2.3%   9,827      1.9%   11,063     2.2%
Total loans receivable   $ 528,625  100.0% $ 511,705  100.0% $ 514,682  100.0%
Allowance for loan       (7,943)          (9,088)          (12,690)   
losses
Net deferred origination 86               235              260        
costs
Loans receivable, net    $520,768       $502,852       $502,252 


LOAN PORTFOLIO BY LOCATION
December 31, 2012

                                            E. Oregon,                      % of
             North      Magic     Greater   SW                              Loan
(Dollars in  Idaho -    Valley    Boise     Idaho,     Other     Total      type
thousands)   Eastern    Idaho     Area      excluding                       to
             Washington                     Boise                           total
                                                                            loans
Commercial   $87,387  $4,606  $9,252  $13,852  $6,210  $121,307 23%
loans
Commercial   123,451    11,330    10,651    18,895     22,517    186,844    35.4%
real estate
Commercial   503        —         2,819     —          510       3,832      0.7%
construction
Land and
land         20,710     1,748     6,298     1,500      1,022     31,278     5.9%
development
Agriculture  1,670      3,269     16,886    60,479     3,663     85,967     16.3%
Multifamily  10,396     151       5,947     30         20        16,544     3.1%
Residential  41,624     3,734     3,808     7,083      3,771     60,020     11.3%
real estate
Residential  387        —         240       313        —         940        0.2%
construction
Consumer     5,716      1,026     517       2,053      314       9,626      1.8%
Municipal    10,880     1,387     —         —          —         12,267     2.3%
Total        $302,724 $27,251 $56,418 $104,205 $38,027 $528,625 100.0%
Percent of
total loans
in           57.3%      5.2%      10.7%     19.7%      7.2%      100.0%     
geographic
area

Asset Quality

Nonperforming loans totaled $6.5 million at December 31, 2012, a slight
increase from $5.6 million at September 30, 2012, but down from $9.3 million
at December 31, 2011.The allowance for loan loss coverage of non-performing
loans totaled 121.7% as of December 31, 2012, down from 161.3% at September
30, 2012 and 136.6% at December 31, 2011, respectively, as the Company's
allowance was reduced as resolved credits were charged against prior period
reserves and the overall quality of the loan portfolio improved.

Total nonperforming assets (NPAs) were $11.5 million at quarter end, compared
to $11.3 million at September 30, 2012, and $15.9 million at December 31,
2011.Troubled debt restructured loans totaled $6.7 million, up from $3.5
million at September 30, 2012, but down from $7.2 million at December 31,
2011, as the Company restructured one larger relationship during the fourth
quarter.

Classified loans totaled $24.9 million at quarter end, a 23.9% decrease from
September 30, 2012 and a 53.1% decrease from a year ago.Classified loans are
loans in which the Company anticipates potential problems in obtaining
repayment of principal and interest per the contractual terms, but does not
necessarily believe that losses will occur.

"We achieved a substantial reduction in problem loans during the fourth
quarter, as we successfully resolveda number of remaining work-out
situations," said Hecker.

The following tables summarize nonperforming assets by type and geographic
region, and provide trending information over the prior year.

NPA BY CATEGORY
(Dollars in thousands)    12/31/2012 % of   9/30/2012 % of   12/31/2011 % of
                                     total            total             total
Commercial loans          $4,042   35.2%  $3,400  30.2%  $3,686   23.0%
Commercial real estate    1,716      14.9%  1,021     9.1%   2,786      17.5%
Commercial construction   —          —      —         —      44         0.3%
Land and land development 5,118      44.6%  6,204     55.0%  8,653      54.3%
Agriculture               98         0.9%   26        0.2%   187        1.2%
Multifamily               —          —      —         —      —          —
Residential real estate   502        4.4%   609       5.4%   567        3.6%
Residential construction  —          —      —         —      2          —
Consumer                  4          —      12        0.1%   17         0.1%
Total NPA by Categories   $11,480  100.0% $11,272 100.0% $15,942  100.0%

The modest increase in commercial and commercial real estate NPAs reflects the
addition of one larger relationship, for which active restructuring efforts
are underway.Exposure from land and land development loans continues to
decline each quarter.Most of the remaining NPAs are in the North
Idaho/Eastern Washington region, reflecting the Company's higher loan totals
in these areas, and the presence of a couple of larger problem credits in this
market area.

OREO balances totaled $5.0 million at December 31, 2012, compared to $5.6
million at September 30, 2012 and $6.7 million at December 31, 2011.The
Company sold 6 properties totaling $764,000 in the fourth quarter, had net
negative valuation adjustments of $191,000 and added 3 properties totaling
$270,000. A total of 6 properties remained in the OREO portfolio at quarter
end, consisting of $4.9 million in land and land development and $79,000 in
residential real estate.

Investment Portfolio, Deposit, Borrowings and Equity Summary

Investments available for sale decreased by $10.1 million during the quarter,
as the Company sold several longer-dated securities for gains and experienced
more rapid prepayment speeds on its mortgage-backed securities. The $61.1
million increase from December 31, 2011 primarily reflects the investment of
funds raised in the Company's 2012 capital offerings.

Deposits totaled $748.9 million at December 31, 2012, compared to $722.1
million at September 30, 2012 and $729.4 million at the end of 2011.The
increase from the third quarter reflects increases in demand deposit account
balances, which offset continued reductions in CDs.While demand deposits grew
by $50.1 million during the fourth quarter, approximately $30.1 million of
this growth resulted from temporary shifts in the Company's money market
demand deposits and other customer investment funds used to pay taxes and
dividends at year end. After adjusting for this temporary growth, demand
deposits were still up approximately $20 million, or 6.6% during the
quarter. Overall, low-cost transaction deposits now represent 75.8% of the
deposit portfolio, up from 70.7% at December 31, 2011.During the fourth
quarter, the Company redeemed $13.8 million in brokered CDs, which will save
about $125,000 in future annual interest expense.The table below provides
information on both current composition and trends in the deposit portfolio.

DEPOSITS
(Dollars in thousands)   12/31/2012 % of   9/30/2012  % of   12/31/2011 % of
                                    total             total             total
Non-interest bearing     $254,979 34%    $214,524 29.7%  $190,074 26.1%
demand accounts
Interest bearing demand  99,623     13.3%  89,941     12.5%  —          —
accounts
NOW                      —          —      —          —      107,476    14.7%
Money market accounts    213,155    28.5%  216,767    30%    201,237    27.6%
Savings & IRA accounts   75,788     10.1%  74,315     10.3%  73,493     10.1%
Certificates of deposit  43,535     5.8%   47,509     6.6%   59,199     8.1%
(CDs)
Jumbo CDs                56,228     7.5%   59,433     8.2%   56,177     7.7%
Brokered CDs             5,200      0.7%   18,994     2.6%   37,000     5.1%
CDARS CDs to local       426        0.1%   601        0.1%   4,717      0.6%
customers
Total Deposits           $748,934 100.0% $722,084 100.0% $729,373 100.0%

The Company also paid off a $25 million advance from the Federal Home Loan
Bank in October, 2012, reducing future annual interest expense by
$515,000.Advances from the FHLB now total $4 million.Securities sold subject
to repurchase agreements, which reflects investment activity by local
municipalities in the Company's market areas, increased to $76.7 million from
a seasonal low of $57.0 million at the end of September 2012, but was down
from the December 2011 balance of $85.1 million.

Stockholders' equity totaled $114.4 million at December 31, 2012, compared to
$113.6 million at September 30, 2012 and $61.6 million at December 31,
2011.The increase from the sequential quarter reflects earnings growth,
offset by a slight decrease in the unrealized gain on the Company's securities
portfolio.The increase over last year is a result of the Company's successful
capital raises, earnings improvement, and larger unrealized gains on the
securities portfolio. On a reverse-split adjusted basis, tangible book value
per common share totaled $13.63 at year end 2012, compared to $13.51 at
September 30, 2012 and $41.95 at December 31, 2011. The increase from the
sequential quarter reflected higher capital levels, while the decrease from
the prior year reflected the increased number of shares outstanding as a
result of the Company's capital raises earlier this year. Tangible
stockholders' equity to tangible assets was 11.8%, compared to 11.9% at
September 30, 2012 and 6.6% at the end of December last year.Tangible common
equity to tangible assets was 9.0%, compared to 9.1% at September 30, 2012 and
3.8% at the end of 2011.

Income Statement Summary

Net income applicable to common shareholders for the fourth quarter totaled
$910,000, or $0.14 per common diluted share, compared to a net income
applicable to common shareholders of $343,000, or $0.05 per common diluted
share in the third quarter of 2012, and $907,000, or $1.08 per common diluted
share in the fourth quarter of 2011. Net income applicable to common
shareholders improved to $1.9 million or $0.32 per diluted common share for
2012, compared to a net loss of $1.8 million, or $2.15 per diluted common
share in 2011.All per share results have been adjusted for the impact of the
1-for-10 reverse stock split, which became effective in October, 2012.

Fourth quarter 2012 net interest income before provision totaled $7.6 million,
down slightly from $7.7 million in the third quarter 2012, and from $8.3
million in the fourth quarter last year.The decrease from the third quarter
reflects continued pressure on the Company's loan and investment yields, as
market rates, particularly for fixed income securities, continued to trend
down, and prepayments in the investment portfolio accelerated.The $4.2
million decrease from last year is a result of lower loan and investment
yields and higher premium amortization of mortgage-backed securities in the
investment portfolio.

Net interest margin improved slightly to 3.53% from the sequential quarter, as
the earning asset yield stabilized while the cost of interest-bearing
liabilities continued to drop.Reflective of the factors noted above, net
interest margin for the year 2012 declined 0.46% to 3.56% as the earning asset
yield dropped from 4.81% to 4.15%, while the cost of interest-bearing
liabilities declined 0.16% to 0.61%."Asset yields are still under significant
pressure as market conditions, governmental actions, and heavy mortgage
refinancing continue to drive effective yields down," said Chief Financial
Officer Doug Wright."We've been able to offset some of this impact in recent
quarters by redeploying cash into loans that have higher relative yields,
while simultaneously lowering our liability interest costs.However, investing
in the current market remains challenging, and the Company continues to
approach investment opportunities cautiously to mitigate higher credit or
interest rate risk exposure."

Intermountain recorded a $619,000 provision for loan losses in the fourth
quarter, down from the $1.2 million expense recorded in the third quarter of
2012, and $706,000 million provision recorded in the comparable period last
year.Net chargeoffs totaled $1.8 million during the quarter, compared to $2.3
million in the sequential quarter and $2.4 million in the fourth quarter of
2011.Net chargeoffs for the year totaled $9.1 million, compared to $7.1
million in 2011, as the company accelerated efforts to reduce problem assets
further. "During 2012 we worked aggressively to resolve a significant portion
of our remaining classified loans. While this resulted in a higher level of
chargeoffs, we now hold a substantially lower level of problem assets than our
industry peers," Hecker said.

The tables below provide information on other income for the current
three-month and twelve-month period in comparison to prior periods.

Three Months Ended          12/31/2012 % of  9/30/2012 % of  12/31/2011 % of
                                       Total           Total            Total
                           (Dollars in thousands)
Fees and service charges    $1,716   56%   $1,702  66%   $1,810   66%
Loan related fee income     807        26%   686       27%   559        20%
Net gain on sale of         208        7%    —         —     119        4%
securities
Net gain (loss)on sale of  4          —     (7)       —     4          —
other assets
Other-than-temporary credit
impairment on investment    —          —     (34)      (1)%  (64)       (2)%
securities
BOLI income                 86         3%    86        3%    93         3%
Hedge Fair Value Adjustment (26)       (1)%  (6)       —     —          —
Unexercised Warrant         71         2%    (49)      (2)%  —          —
Liability Fair Value
Other income                204        7%    174       7%    224        9%
Total                       $ 3,070    100%  $2,552  100%  $2,745   100.0%

                                                                
Twelve Months Ended                12/31/2012 % of Total 12/31/2011 % of Total
                                  (Dollars in thousands)
Fees and service charges           $6,662   62%        $7,036   66%
Loan related fee income            2,734      25%        2,202      21%
Net gain on sale of securities     794        7%         131        1%
Net gain (loss)on sale of other   19         —          (40)       —
assets
Other-than-temporary credit
impairment on investment           (357)      (3)%       (145)      (1)%
securities
BOLI income                        345        3%         362        3%
Hedge Fair Value Adjustment        (326)      (3)%       —          —
Unexercised Warrant Liability Fair 180        2%         —          —
Value
Other income                       775        7%         1,079      10%
Total                              $10,826  100%       $10,625  100%

Other income in the third quarter was $3.1 million, up from $2.6 million in
the third quarter of 2012 and $2.7 million in the same period last year,
respectively.Higher mortgage origination income and gains on the sale of
securities produced the quarterly increases as fee and service charge income
was relatively stable.For the year, other income totaled $10.8 million
compared to $10.6 million in 2011, as higher mortgage fee income and gains on
the sale of securities offset reductions in fees and service charges, secured
savings contract income and fair value adjustments.

The tables below provide information operating expense for the current
three-month and twelve-month period in comparison to prior periods.

Three Months Ended          12/31/2012 % of  9/30/2012 % of  12/31/2011 % of
                                       Total           Total            Total
                           (Dollars in thousands)
Salaries and employee       $4,181   47%   $4,103  49%   $4,123   44%
benefits
Occupancy expense           1,615      19%   1,648     20%   1,699      19%
Advertising                 174        2%    178       2%    146        2%
Fees and service charges    620        7%    590       7%    674        7%
Printing, postage and       208        2%    178       2%    260        3%
supplies
Legal and accounting        483        6%    504       6%    388        4%
FDIC assessment             97         1%    306       4%    301        3%
OREO operations             390        4%    39        1%    805        9%
Other expense               903        10%   696       9%    770        9%
Total                       $8,671   100%  $8,242  100%  $9,166   100%

                                                            
Twelve Months Ended            12/31/2012 % of Total 12/31/2011 % of Total
                              (Dollars in thousands)
Salaries and employee benefits $16,291  49%        $18,736  49%
Occupancy expense              6,570      20%        6,879      18%
Advertising                    633        2%         677        2%
Fees and service charges       2,460      7%         2,645      7%
Printing, postage and supplies 987        3%         1,135      3%
Legal and accounting           1,733      5%         1,521      4%
FDIC assessment                1,024      3%         1,394      4%
OREO operations                653        2%         2,166      6%
Other expense                  3,082      9%         3,177      7%
Total                          $33,433  100%       $38,330  100%

Operating expenses totaled $8.7 million in the fourth quarter of 2012,
compared to $8.2 million in the sequential quarter and $9.2 million in the
fourth quarter of last year, respectively.Increases in OREO, loan servicing
and compliance-related expenses offset lower FDIC assessments from the
sequential quarter.The reduction from the fourth quarter of last year
primarily reflected reductions in FDIC assessments and OREO expenses.For the
12-month period, operating expenses totaled $33.4 million, a $4.9 million, or
12.8% reduction from 2011 as a result of decreases in employee compensation
and benefits, occupancy expense, FDIC assessments and OREO expense. "While
some expense categories have now stabilized after significant decreases in the
past couple years, we are now implementing additional cost reduction plans in
other areas, including data processing and occupancy expense," said
Wright."We expect that these new efforts will result in additional cost
savings in future periods."

The Company recorded a small $8,000 tax benefit related to a delayed state tax
refund during the fourth quarter.Given its current tax position, the Company
did not record any other income tax provision or benefit during the quarter as
it offset taxable income with net operating losses that it has carried forward
from prior years.The Company maintains an $8.5 million tax valuation
allowance, resulting in a net deferred tax asset of $12.3 million.

Reverse Stock Split & NASDAQ filing

On August 31, 2012, the Company announced that it would implement, effective
as of the close of business on October 5, 2012, a 1-for-10 reverse stock split
of Intermountain's common stock (both voting and nonvoting) as approved by the
shareholders at the Company's Annual Meeting on May 17, 2012.

As a result, the number of shares of outstanding voting and nonvoting common
stock has been reduced from approximately 26.0 million and 38.4 million shares
to approximately 2.6 million and 3.8 million shares, respectively. The reverse
stock split also reduced the number of authorized shares of voting and
nonvoting common stock from 300,000,000 and 100,000,000 shares to 30,000,000
and 10,000,000 shares, respectively. Proportional adjustments were also made
to the conversion or exercise rights under the Company's outstanding warrants,
stock options and other common stock-based equity grants outstanding
immediately prior to the effectiveness of the reverse stock split.

The Company also received approval to list its voting common shares on the
NASDAQ Capital Market Exchange, and formally listed those shares on January 9,
2013.

About Intermountain Community Bancorp:

Intermountain is headquartered in Sandpoint, Idaho, and operates as four
separate divisions with nineteen banking locations in three states.Its
banking subsidiary, Panhandle State Bank, offers financial services through
northern Idaho offices in Sandpoint, Ponderay, Bonners Ferry, Priest River,
Coeur d'Alene, Post Falls, Rathdrum and Kellogg.Intermountain Community Bank,
a division of Panhandle State Bank, operates branches in southwest Idaho in
Weiser, Payette, Nampa, Caldwell and Fruitland, as well as in Ontario,
Oregon.Intermountain Community Bank Washington, a division of Panhandle State
Bank, operates branches in downtown Spokane and Spokane Valley, Washington.
Magic Valley Bank, a division of Panhandle State Bank, operates branches in
Twin Falls and Gooding, Idaho.

All data contained in this report have been prepared on a consolidated basis
for Intermountain Community Bancorp.IMCB's shares are quoted on the NASDAQ
Capital Market Exchange, ticker symbol IMCB.Additional information on
Intermountain Community Bancorp, and its internet banking services, can be
found at www.intermountainbank.com. 

The Intermountain Community Bancorp logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=8745

Forward Looking Statements

This news release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995.Such forward-looking
statements may include but are not limited to statements about the Company's
plans, objectives, expectations and intentions and other statements contained
in this report that are not historical facts.These forward-looking statements
are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond the Company's
control.Actual results may differ materially from the results discussed in
these forward-looking statements because of numerous possible risks and
uncertainties.These include but are not limited to the following and the
other risks described in the "Risk Factors," "Business," and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
sections, as applicable, of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2011; the possibility of adverse economic
developments that may, among other things, increase default and delinquency
risks in the Company's loan portfolio; shifts in interest rates that may
result in lower interest rate margins; shifts in the demand for the Company's
loan and other products;declines in the housing and real estate market;
increases in unemployment or sustained high levels of unemployment; changes in
accounting policies; changes in the monetary and fiscal policies of the
federal government; and changes in laws, regulations and the competitive
environment. Readers are cautioned that forward-looking statements in this
release speak only as of the date of this release.The Company does not
undertake any obligation to update any forward-looking statement, whether as a
result of new information, future events or otherwise.

INTERMOUNTAIN COMMUNITY BANCORP
CONSOLIDATED BALANCE SHEETS
(Unaudited)
                                                            
                             12/31/2012       9/30/2012       12/31/2011
                             (Dollars in thousands, except per share amounts)
ASSETS                                                       
Cash and cash equivalents:                                   
Interest-bearing              $53,403        $45,015       $82,242
Non-interest bearing and      13,536           6,016           24,958
vault
Restricted cash               13,146           12,710          2,668
Available-for-sale            280,169          290,311         219,039
securities, at fair value
Held-to-maturity securities,  14,826           14,843          16,143
at amortized cost
Federal Home Loan Bank of     2,269            2,290           2,310
Seattle stock, at cost
Loans held for sale           1,684            5,070           5,561
Loans receivable, net         520,768          502,852         502,252
Accrued interest receivable   4,320            4,542           4,100
Office properties and         35,453           36,031          37,687
equipment, net
Bank-owned life insurance     9,472            9,387           9,127
Other intangibles             72               101             189
Other real estate owned       4,951            5,636           6,650
("OREO")
Prepaid expenses and other    18,070           18,488          21,292
assets
Total assets                  $972,139       $953,292      $934,218
                                                            
LIABILITIES                                                  
Deposits                      $748,934       $722,084      $729,373
Securities sold subject to    76,738           56,989          85,104
repurchase agreements
Advances from Federal Home    4,000            29,000          29,000
Loan Bank
Unexercised stock warrant     828              899             —
liability
Cashier checks issued and     2,024            266             481
payable
Accrued interest payable      1,185            2,124           1,676
Other borrowings              16,527           16,527          16,527
Accrued expenses and other    7,469            11,819          10,441
liabilities
Total liabilities             857,705          839,708         872,602
                                                            
STOCKHOLDERS' EQUITY                                         
Common stock - voting shares  96,368           96,330          78,916
Common stock - non-voting     31,941           31,941          —
shares
Preferred stock, Series A     26,527           26,430          26,149
Accumulated other             3,529            3,724           2,370
comprehensive income (1)
Accumulated deficit           (43,931)         (44,841)        (45,819)
Total stockholders' equity    114,434          113,584         61,616
Total liabilities and         $972,139       $953,292      $934,218
stockholders' equity
                                                            
Book value per common share,  $13.64         $13.53        $42.17
excluding preferred stock
Tangible book value per
common share, excluding       $13.63         $13.51        $41.95
preferred stock (2)
Shares outstanding at end of  6,442,820        6,441,986       840,984
period
Stockholders' Equity to Total 11.77%           11.91%          6.6%
Assets
Tangible Stockholders' Equity 11.76%           11.91%          6.58%
to Tangible Assets (3)
Tangible Common Equity to     9.04%            9.13%           3.78%
Tangible Assets
                                                            
(1)Net of deferred income taxes
(2)Amount represents common stockholders' equity less net goodwill and other
intangible assets divided by total common shares outstanding.
(3)Amount represents stockholders' equity less net goodwill and other
intangible assets divided by assets less net goodwill and other intangible
assets.


INTERMOUNTAIN COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                             Three Months Ended
                             12/31/2012       9/30/2012       12/31/2011
                             (Dollars in thousands, except per share amounts)
Interest income:                                             
Loans                         $6,906         $7,031        $7,831
Investments                   1,689            1,896           1,939
Total interest income         8,595            8,927           9,770
Interest expense:                                            
Deposits                      700              736             868
Borrowings                    312              522             560
Total interest expense        1,012            1,258           1,428
Net interest income           7,583            7,669           8,342
Provision for losses on loans (619)            (1,154)         (706)
Net interest income after     6,964            6,515           7,636
provision for losses on loans
Other income (expense):                                      
Fees and service charges      1,716            1,702           1,810
Loan related fee income       807              686             559
Net gain on sale of           208              —               119
securities
Net gain (loss) on sale of    4                (7)             4
other assets
Other-than-temporary          —                (34)            (64)
impairment on investments
Bank-owned life insurance     86               86              93
Fair value adjustment on cash (26)             (6)             —
flow hedge
Unexercised warrant liability 71               (49)            —
fair value adjustment
Other income                  204              174             224
Total other income, net       3,070            2,552           2,745
Operating expenses:                                          
Salaries and employee         4,181            4,103           4,123
benefits
Occupancy expense             1,615            1,648           1,699
FDIC assessment               97               306             301
OREO operations               390              39              805
Other expenses                2,388            2,146           2,238
Total operating expenses      8,671            8,242           9,166
Income before income tax      1,363            825             1,215
benefit
Income tax benefit            8                —               152
Net income                    1,371            825             1,367
Preferred stock dividend      461              482             460
Net Income applicable to      $910           $343          $907
common stockholders
Income per share- basic      0.14             0.05            1.08
Income per share- diluted    0.14             0.05            1.08
Weighted-average common
shares outstanding- basic    6,442,729        6,441,986       840,984
(1)
Weighted-average common
shares outstanding- diluted  6,470,944        6,458,227       842,733
(2)
                                                            
(1) Includes the weighted average number of non-voting common shares that were
outstanding at December 31, 2012.
(2) Includes the weighted average number of non-voting common shares that
would be outstanding if the 170,000 in warrants issued in the January 2012
private offering are exercised directly for non-voting common shares.


INTERMOUNTAIN COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                                      Twelve Months Ended
                                      12/31/2012          12/31/2011
                                      (Dollars in thousands, except per share
                                       amounts)
Interest income:                                          
Loans                                  $28,063           $32,821
Investments                            7,704               8,836
Total interest income                  35,767              41,657
Interest expense:                                         
Deposits                               3,002               4,408
Borrowings                             2,081               2,404
Total interest expense                 5,083               6,812
Net interest income                    30,684              34,845
Provision for losses on loans          (4,306)             (7,289)
Net interest income after provision    26,378              27,556
for losses on loans
Other income (expense):                                   
Fees and service charges               6,662               7,036
Loan related fee income                2,734               2,202
Net gain on sale of securities         794                 131
Net gain (loss) on sale of other       19                  (40)
assets
Other-than-temporary impairment on     (357)               (145)
investments
Bank-owned life insurance              345                 362
Fair value adjustment on cash flow     (326)               —
hedge
Unexercised warrant liability fair     180                 —
value adjustment
Other income                           775                 1,079
Total other income, net                10,826              10,625
Operating expenses:                                       
Salaries and employee benefits         16,291              18,736
Occupancy expense                      6,570               6,879
FDIC assessment                        1,024               1,394
OREO operations                        653                 2,166
Other expenses                         8,895               9,155
Total operating expenses               33,433              38,330
Income (loss) before income tax        3,771               (149)
benefit
Income tax (provision) benefit         8                   152
Net income                             3,779               3
Preferred stock dividend               1,891               1,808
Net Income (loss) applicable to common $1,888            $(1,805)
stockholders
Income (loss) per share- basic        0.33                (2.15)
Income (loss) per share- diluted      0.32                (2.15)
Weighted-average common shares         5,806,958           840,654
outstanding- basic (1)
Weighted-average common shares         5,825,283           840,654
outstanding- diluted (2)
                                                         
(1) Includes the weighted average number of non-voting common shares.
(2) Includes the weighted average number of non-voting common shares that
would be outstanding if the 170,000 in warrants issued in the January 2012
private offering are exercised directly for non-voting common shares.


INTERMOUNTAIN COMMUNITY BANCORP
KEY PERFORMANCE RATIOS
                                                               
                    Three Months Ended                 Twelve Months Ended
                    12/31/2012  9/30/2012  12/31/2011  12/31/2012  12/30/2011
Net Interest Spread:                                            
Yield on Loan        5.28%       5.38%      5.81%       5.43%       5.94%
Portfolio
Yield on Investments 2.01%       2.10%      2.52%       2.23%       2.81%
& Cash
Yield on
Interest-Earning     4.00%       4.04%      4.62%       4.15%       4.81%
Assets
                                                               
Cost of Deposits     0.38%       0.40%      0.46%       0.42%       0.59%
Cost of Advances     3.08%       2.21%      2.20%       2.25%       2.13%
Cost of Borrowings   1.50%       1.74%      2.04%       1.96%       1.75%
Cost of
Interest-Bearing     0.49%       0.59%      0.67%       0.61%       0.77%
Liabilities
Net Interest Spread  3.50%       3.45%      3.95%       3.53%       4.03%
                                                               
Net Interest Margin  3.53%       3.47%      3.94%       3.56%       4.02%
                                                               
Performance Ratios:                                             
Return on Average    0.57%       0.34%      0.58%       0.39%       —
Assets
Return on Average
Common Stockholders' 4.14%       1.58%      10.28%      2.75%       -5.31%
Equity
Return on Average
Common Tangible      4.14%       1.58%      10.34%      2.75%       -5.27%
Equity (1)
Operating Efficiency 81.39%      80.64%     82.67%      80.54%      84.30%
Noninterest Expense  3.60%       3.41%      3.91%       3.46%       3.99%
to Average Assets
                                                               
(1)Average common tangible equity is average common stockholders' equity less
average net goodwill and other intangible assets.


INTERMOUNTAIN COMMUNITY BANCORP
LOAN AND REGULATORY CAPITAL DATA
                                                                 
                                              12/31/2012 9/30/2012 12/31/2011
                                              (Dollars in thousands)
Loan Data                                                         
Net Charge-Offs to Average Net Loans (QTD      1.37%      1.79%     1.81%
Annualized)
Loan Loss Allowance to Total Loans             1.50%      1.78%     2.46%
                                                                 
Nonperforming Assets:                                             
Accruing Loans-90 Days Past Due                $ —        $ —       $ —
Nonaccrual Loans                               6,529      5,636     9,292
Total Nonperforming Loans                      6,529      5,636     9,292
OREO                                           4,951      5,636     6,650
Total Nonperforming Assets ("NPA")             $11,480  $11,272 $15,942
                                                                 
Troubled Debt Restructured Loans               6,719      3,487     7,236
NPA to Total Assets                            1.18%      1.18%     1.71%
NPA to Net Loans Receivable                    2.20%      2.24%     3.17%
NPA to Estimated Risk Based Capital            9.33%      9.17%     21.31%
NPA to Tangible Equity + Allowance for Loan    9.39%      9.20%     21.51%
Loss
Loan Delinquency Ratio (30 days and over)      0.13%      0.21%     0.28%
                                                                 
                                                                 
                                              12/31/2012 9/30/2012 12/31/2011
Allowance for Loan Loss by Loan Type           (Dollars in thousands)
Commercial loans                               $2,156   $3,073  $2,817
Commercial real estate loans                   2,762      2,728     4,880
Commercial construction loans                  101        67        500
Land and land development loans                1,197      1,654     2,273
Agriculture loans                              228        187       172
Multifamily loans                              51         56        91
Residential real estate loans                  1,144      1,042     1,566
Residential construction loans                 24         13        59
Consumer loans                                 202        198       295
Municipal loans                                78         70        37
Totals                                         $7,943   $9,088  $12,690
                                                                 
                                                                 
Regulatory Capital (Estimated for "The                            
Company")
Total capital (to risk-weighted assets):                          
The Company                                    20.51%     20.86%    12.58%
Panhandle State Bank                           19.07%     19.28%    13.74%
Tier 1 capital (to risk-weighted assets):                         
The Company                                    19.26%     19.61%    11.32%
Panhandle State Bank                           17.82%     18.02%    12.48%
Tier 1 capital (to average assets):                               
The Company                                    12.54%     11.97%    7.32%
Panhandle State Bank                           11.60%     11.11%    8.07%

CONTACT: Curt Hecker, CEO
         Intermountain Community Bancorp
         (208) 263-0505 curt.hecker@panhandlebank.com
        
         Doug Wright, Executive Vice President & CFO
         Intermountain Community Bancorp
         (509) 363-2635 doug.wright@intermountainbank.com

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