BOISE, ID--(Marketwire - January 23, 2009) - Today Idaho Bancorp (OTCBB: IDBC) reported a net loss for the year ended December 31, 2008 of ($232,000) or ($0.13)/share, compared to $1,441,000 or $0.78/diluted share for 2007. The largest contributing factors responsible for these results included a decline in the net interest margin between 2008 and 2007, an increased provision for loan losses due to a weakening economy, expenses related to management changes at Idaho Banking Company, and a favorable tax expense variance.

Since the Federal Open Market Committee lowered the fed funds rate by 400 basis points during 2008, the Bank's average tax equivalent net interest margin decreased only 41 basis points from the 2007 level to 3.83% for 2008. As a result, a 2008 unfavorable net interest income rate variance of approximately $919,000 was recognized compared to 2007. Average earning assets increased during 2008 by 4.74% or $10,314,000, which led to a favorable net interest income volume variance of approximately $437,000, offsetting the unfavorable rate variance.

The Company is focused on improving its tax equivalent net interest margin with the introduction of the Perfectly Free Business Checking product during the third quarter 2008. The Bank has been accepted into the Certificate of Deposit Account Registry Service (CDARS) program and can offer fully insured certificates of deposit up to $50 million under this program. The Bank also introduced the Picture Perfect Treasury Money Market Account in early 2008.

Due to the weakening economy, the Company has increased its allowance for loan losses to 1.46% of outstanding loans from 1.38% at December 31, 2007. This increase, combined with net charge-offs of $1,395,000, led to a provision in the income statement of $1,845,000, an increase of $1,535,000 compared to 2007. The annualized year-to-date net charge-offs to loans ratio is 0.71%. Nonperforming loans consist of nineteen accounts totaling $9,350,000, or 4.43% of loans outstanding as of December 31, 2008 compared to $911,000 in nonperforming loans at the end of 2007. The Company believes it has an adequate reserve for these loans.

As previously reported, the Company was one of the first non-SEC reporting companies to receive preliminary approval for TARP capital from the U.S. Treasury. Idaho Bancorp is pleased to announce that it did receive final approval to receive $6.9 million of TARP capital, which was funded to the Bank on January 16, 2009 and will be recorded as preferred stock on the Bank's balance sheet. Until the preferred stock is redeemed, the Bank will pay cumulative dividends of 5% to the U.S. Treasury for the use of this capital. The cumulative dividend rate increases to 9% after five years. One of the purposes, as stated in the legislation allowing qualifying institutions to purchase TARP capital, is that the funds are to be used in a manner that "maximizes overall returns to the taxpayers of the United States." This indicates the U.S. Treasury will only allow safe and sound institutions to purchase TARP capital. Jim Latta, President and CEO of Idaho Bancorp's subsidiary, Idaho Banking Company, said, "We appreciate the faith the U.S. Treasury has shown in our bank. This investment will allow us additional flexibility to manage our business in the challenging current market environment. The capital will also give us the opportunity to increase our active relationship lending within the Treasure Valley."

The Bank's noninterest expenses increased by $478,000 or 6% compared to 2007 levels, largely due to one time charges of approximately $453,000 due to changes in management personnel. Idaho Banking Company, the primary subsidiary of Idaho Bancorp, continues to look for ways to become more efficient and to reduce its noninterest expenses in relation to its operating revenue.

Idaho Bancorp President and CEO James C. Latta commented, "2008 was a turbulent year for all banks in the Treasure Valley. The Bank is very fortunate to have employees dedicated to providing lasting impressions of trust and service, while building strong loan and deposit relationships with businesses and individuals within our market area. Our employees' genuine concern for the success of the Bank's customers will reap rewards for the Bank's shareholders."

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 Bank 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.

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


For the year ended December 31:    2008      2007     $ Change   % Change
                                ---------  ---------  ---------  ---------
  Net interest income           $   8,598  $   9,080  $    (482)        -5%
  Provision for loan losses         1,845        310      1,535        495%
  Mortgage banking income             643        715        (72)       -10%
  Other noninterest income            509        625       (116)       -19%
  Noninterest expense               8,339      7,860        479          6%
  Net income before taxes            (434)     2,250     (2,684)      -119%
  Income taxes                       (202)       809     (1,011)      -125%
  Net income (loss)                  (232)     1,441     (1,673)      -116%

  Earnings per share
    Basic                           (0.13)      0.79      (0.92)      -116%
    Diluted                         (0.13)      0.78      (0.91)      -117%

At December 31:                    2008      2007     $  Change   % Change
                                ---------  ---------  ---------  ---------
  Loans                         $ 211,133  $ 190,366  $  20,767         11%
  Allowance for loan losses         3,073      2,623        450         17%
  Assets                          249,285    234,502     14,783          6%
  Deposits                        185,467    189,226     (3,759)        -2%
  Shareholders' equity             16,743     17,438       (695)        -4%
  Nonperforming loans               9,350        911      8,439        926%
  Other real estate owned *           380          0        380        N/A

  Book value per share               9.10       9.61      (0.51)        -5%
  Shares of common stock
   outstanding                  1,839,860  1,814,222     25,638          1%

  Allowance to loan ratio            1.46%      1.38%
  Allowance to nonperforming
   loans                               33%       288%
  Nonperforming loans to total
   loans                             4.43%      0.48%

Averages for the year ended
 December 31:                      2008      2007     $  Change   % Change
                                ---------  ---------  ---------  ---------
  Loans                         $ 195,998  $ 181,719  $  14,279          8%
  Earning assets                  227,866    217,553     10,313          5%
  Assets                          238,069    229,412      8,657          4%
  Deposits                        182,004    186,789     (4,785)        -3%
  Shareholders' equity             17,755     16,779        976          6%

For the year ended December 31:
  Return on average assets          -0.10%      0.63%
  Return on average equity          -1.31%      8.59%
  Average loans to deposits        107.69%     97.29%
  Net interest margin - tax
   equivalent                        3.83%      4.24%
  Net loan charge-offs
   (recoveries)                     1,395        106
  Net charge-offs (recoveries)
   to loans (annualized)             0.71%      0.06%

* Includes only retaken property.





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


                           2008 Q4   2008 Q3   2008 Q2   2008 Q1   2007 Q4
                           --------  --------  --------  --------  -------
Net interest income        $  2,112  $  2,250  $  2,122  $  2,114  $ 2,325
Provision for loan losses     1,240       260       200       145      125
Mortgage banking income         100       168       161       214      197
Other noninterest income        118       135       123       133      217
Noninterest expense           1,718     2,044     2,443     2,134    1,955
Net income before taxes        (628)      249      (237)      182      659
Income taxes                   (237)       80       (98)       53      278
Net income (loss)              (391)      169      (139)      129      381

Earnings per share
  Basic                       (0.21)     0.09     (0.08)     0.07     0.21
  Diluted                     (0.21)     0.09     (0.08)     0.07     0.21

Average loans               202,924   197,948   193,323   189,698  194,381
Average earning assets      231,825   227,730   228,614   223,253  227,257
Average assets              242,057   238,021   238,248   233,908  238,798
Average deposits            180,689   176,924   185,846   184,627  191,565
Average shareholders'
 equity                      17,730    17,763    17,985    17,541   17,439

Return on average assets      -0.64%     0.28%    -0.23%     0.22%    0.63%
Return on average equity      -8.77%     3.78%    -3.11%     2.96%    8.67%
Average loans to
 deposits                    112.31%   111.88%   104.02%   102.75%  101.47%
Net interest margin -
 tax equivalent                3.68%     3.99%     3.79%     3.87%    4.13%

Nonperforming loans -
 period end                $  9,350  $  2,158  $     60  $    316  $   911
Other real estate owned -
 period end *                   380       336       206         -        -
Loans - period end          211,133   199,788   196,894   189,284  190,366
Allowance for loan
 losses - period end          3,073     3,024     2,868     2,662    2,623
Net charge-offs
 (recoveries) - quarterly     1,191       104        (6)      106       91

Allowance to loans             1.46%     1.51%     1.46%     1.41%    1.38%
Allowance to nonperforming
 loans                           33%      140%     4780%      842%     288%
Nonperforming loans to
 total loans                   4.43%     1.08%     0.03%     0.17%    0.48%
Net charge-offs to loans -
 annualized                    2.33%     0.21%    -0.01%     0.22%    0.19%

* Includes only retaken property.