Idaho First Bank reports quarterly results; now largest bank in McCall 

Idaho First Bank is reporting a third quarter loss of $702,000 and a loss of $1.48 million for the nine months ended Sept. 30.

The quarterly net loss was higher than the $349,000 loss in the same quarter last year primarily due to a $250,000 increase in the provision for loan losses.

The year-to-date loss was about 5 percent higher than the loss reported for the first nine months of 2008.

The provision for loan losses was $1.2 million for the first nine months of 2009 compared to $650,000 in the same period in 2008 due to increased loan charge-offs and increasing the allowance from 1.52 percent of loans to 2.01 percent of loans. Helping to offset the large provision for loan losses, the Bank sold investment securities and realized gains of $336,000 in 2009.

Despite the 35 percent increase in year-to-date earning assets, the contraction in net interest margin from 3.95 percent to 3.36 percent resulted in the year-to-date net interest income increasing by only 15 percent. The margin contraction was a result of the extremely low interest rate environment and rates on variable rate loans and investments falling more rapidly than deposit rates.

On a positive note, the FDIC released market share information for June 30, 2009, that showed that the Bank had a 31 percent share of bank deposits in McCall.

The annual survey showed Idaho First Bank was trailing the market leader by $2.8 million. As deposits grew from $50.8 million on June 30 to $60.4 million at Sept. 30, Idaho First Bank may now be the largest bank in McCall, as measured by deposits.

The allowance for loan losses was 2.01 percent of total loans at the end of the quarter and was 35 percent of nonperforming loans. The bank continues to be impacted by unfavorable economic conditions both nationally and locally.

As of Sept. 30, nonperforming loans increased to $3,344,000, or 5.72 percent of loans. In addition, the bank had $564,000 of other real estate owned bringing total nonperforming assets to $3,908,000.

"The Bank's lending staff is working diligently with our clients to resolve problem loans and reduce the level of nonperforming assets," stated Greg Lovell, president of the Bank. "While the economic climate is still unfavorable we see some indications that Valley County real estate prices have stabilized and are no longer falling."

The bank fell below "well-capitalized" levels at Sept. 30, 2009, but remains "adequately capitalized" as defined by bank regulators. The bank is pursuing several sources of additional capital, with a plan to restore the bank's capital to a "well-capitalized" level at year-end.

Idaho First Bank is a state-chartered commercial bank that opened for business in October 2005. Its headquarters are located in McCall with a loan production office in downtown Boise.

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