Panhandle State buys southern Idaho banks

Sandpoint — Intermountain Community Bancorp and Snake River Bancorp, Inc. have announced a merger between the two companies in a cash and stock deal currently valued at $17.1 million.

Terms of the agreement call for Intermountain Community Bancorp to pay, in the aggregate, $4.5 million in cash and issue 504,305 shares of common stock.

Based on the June, 23 closing price for Intermountain Community Bancorp stock of $25 per share, the current value of the stock consideration is about $12.6 million. The transaction is expected to be added to Intermountain Community Bancorp's 2005 earnings. Completion of the transaction is expected to occur in the fourth quarter of 2004, subject to regulatory approval and approval by the shareholders of Snake River Bancorp, Inc.

Intermountain Community Bancorp, which is headquartered in Sandpoint, has total assets of $463 million as of June 30, 2004. Its banking subsidiary, Panhandle State Bank, offers financial services in Idaho and Oregon through seven branches located in Bonner, Boundary and Kootenai counties in northern Idaho; four branches operating as Intermountain Community Bank in Canyon, Payette, and Washington counties in southern Idaho; and one branch operating as Intermountain Community Bank in Malheur County, Oregon.

Snake River Bancorp was formed in 2002 as the holding company for Magic Valley Bank, which began operations in late 1997. Magic Valley Bank has three branches in Twin Falls, Gooding and Jerome, and $78.7 million in total assets as of June 30, 2004.

"I am very excited about combining Magic Valley Bank and its people-oriented community culture with Panhandle State Bank, said Curt Hecker, presidentand CEP of Intermountain Community Bancorp.

"Our employees, customers and shareholders will benefit from leveraging the combined resources of our franchises. This combination enables both companies to improve customer service and profitability through increased lending capacity, leverage of existing infrastructure, and an expanded line of competitive products and services."

Both organizations believe that reinvesting the community's dollars into local economies results in the safest and most successful financial institution for our shareholders and our customers, Hecker said.

"We also share the core value of continual investment in our employees and technology to further enhance our customer service efforts," he added. "A highly skilled, motivated and knowledgeable team of employees makes the ultimate difference to our customers and ensures we provide the highest quality customer service in the industry."

Reflecting the community focus of the bank, the Snake River branches will continue to operate under the Magic Valley Bank name after the merger.

As with the Panhandle State Bank branches in northern Idaho and the Intermountain Community Bank branches in southwest Idaho, the Magic Valley offices will operate with a great deal of autonomy and local decision-making.

"It is critical to the ongoing success of our bank to remain focused and flexible in our local communities," Hecker said. "We attract and retain the best bankers in each market, and they make it happen by building relationships and the community."

Phil Bratton, president and CEO of Snake River Bancorp, Inc., commented, "The combination with Intermountain Community Bancorp will allow us to offer higher lending limits and a greater array of financial products while maintaining our highly attentive approach to client service. The transition will be greatly enhanced with the addition of two of our board members to the board of directors of Intermountain. We also believe that it will provide our shareholders with the opportunity to benefit financially."

Under the terms of the merger agreement, which has been approved by the boards of directors of both companies, Snake River Bancorp shareholders will receive $8.22 in cash plus 0.93 shares of Intermountain Community Bancorp stock in exchange for each Snake River Bancorp share, equating to a total per share price at announcement of $31.

Magic Valley Bank will be merged into Panhandle State Bank at the same as time as the completion of the acquisition.

Hecker will continue as president and CEO of the combined company, while Bratton will be appointed president of Magic Valley Bank, a division of Panhandle State Bank.