Intermountain Community Bancorp Announces Capital Purchase Program Funds and Community Partnership Plan

TARP stands for Troubled Assets Relief Program, and it is part of the economic rescue and stimulus package designed - and still being refined - by the Federal Government. Mr. Hecker says that TARP has been incorrectly defined as a bailout of failing institutions. While some of the money from TARP is being used in this manner, there are other parts of the program that have very different objectives.

IMCB has elected to receive qualified funds under the Capital Purchase Program, which is a voluntary program designed for healthy banks. The American Bankers Association points out that the money allocated to the Capital Purchase Program must be repaid, with interest, at a profit to the government.

Intermountain Community Bancorp has reviewed opportunities to use funds for the best long-term impact, and has determined that direct investment into its communities is the most ethical and beneficial course of action. Significant funds will be made immediately available for lending in the community, to help stimulate economic activity and rebuild a platform of prosperity.

In addition, IMCB executives have been diligently at work on a strategy to infuse capital directly into selected community initiatives. This will involve encouraging matching funds from several sources, including other financial institutions that recognize the benefit to expanded community investment in tough economic times. Mr. Hecker says that he hopes the grassroots stimulus plan will engage over 1,000 new community volunteer leaders, improve over 100 community education and economic initiatives and engage 100% of IMCB employees.

Mr. Hecker looks forward to addressing questions from shareholders, customers and the media in a series of Town Hall meetings to begin in February. These events are part of a wider community development strategy to engage local policy makers, investors and volunteers in establishing priorities, setting funding goals, and putting funds directly into selected initiatives.

About Intermountain Community Bancorp: Intermountain is headquartered in Sandpoint, Idaho, and operates as four separate divisions with twenty 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 listed on the OTC Bulletin Board, ticker symbol IMCB.OB.

Additional information on Intermountain Community Bancorp, and its Internet banking services, can be found at www.intermountainbank.com.

This news release contains forward-looking statements within 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 continued 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; lower-than-expected revenue or cost savings in connection with acquisitions; changes in accounting policies; changes in the monetary and fiscal policies of the federal government; and changes in laws, regulations and the competitive environment.

SOURCE: Intermountain Community Bancorp

Intermountain Community Bancorp Rick Youngblood, President of Community Development, 208-412-5107 ricky@intermountainbank.com or Curt Hecker, Chief Executive Officer, 208-263-0505 curth@intermountainbank.com