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Idaho Banking Company to Form Holding Company
Market Wire, September, 2004
Today the Board of Directors of Idaho Banking Company (OTC BB: IBCB) announced their intention to form a bank holding company, to be named Idaho Bancorp. The new name is subject to approval by the Secretary of State of Idaho. Shareholders will be asked to approve the formation of the holding company at a special meeting that will be held before year end.
In addition to approval by a majority of shareholders, the Plan of Exchange and formation of the holding company is subject to approval by the Federal Reserve and the Idaho Department of Finance. If the Plan is approved by shareholders and regulators, each share of Idaho Banking Company stock will be exchanged for one share of Idaho Bancorp stock, and Idaho Banking Company will become a wholly owned subsidiary of Idaho Bancorp. The Board expects the holding company formation to be completed by December 31, 2004.
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Commenting on the primary reason for forming a holding company, Mike Johnston, President and CEO, said, "With the rapid growth of the Bank in the past twelve months, the Bank is beginning to face capital constraints that will restrict further balance sheet growth. The formation of a holding company enables the Bank to strengthen its capital position and continue without interruption the excellent loan growth that is available."
In addition to providing greater flexibility in attracting new capital for the Bank, the holding company structure provides greater flexibility in acquiring other institutions, and diversifying into bank-related activities. In addition, once capital has been raised, the holding company structure allows greater flexibility in being able to provide liquidity to shareholders through stock repurchase programs. If the formation of the holding company is approved, each director of Idaho Banking Company will become a director of Idaho Bancorp.
The Board also announced its intention to declare a 2 for 1 stock split, in the form of a 100% stock dividend, of the holding company stock, as soon as possible after its formation. Currently the number of authorized shares of Idaho Banking Company is insufficient to declare stock splits or dividends, but the proposed holding company will have sufficient authorized shares to complete a stock split. Mike Johnston said, "The significant increase in the Bank's stock during the past year appears to be an acknowledgement of the Bank's strengthened asset quality and earnings improvement. If the formation of the holding company is approved by shareholders, the stock split will make the stock more affordable to new investors. The stock split rewards our loyal shareholders, many of whom have faithfully supported the Bank since it was formed almost eight years ago."
Idaho Banking Company, a state-chartered commercial bank and member of the Federal Reserve, was organized in 1996. The Bank operates four branch offices and one mortgage office in Ada County.
Contacts: Michael K. Johnston President and CEO 208-472-4702 Mary E. Brimson SVP Shareholder Relations 208-472-4705 Don D. Madsen EVP and CFO 208-947-1880
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