Idaho Banking Company - Y2K Compliance Information

WE’RE READY FOR Y2K

A MESSAGE FROM THE PRESIDENT OF IDAHO BANKING COMPANY

By now, you have no doubt been exposed to information about the so-called “Y2K computer problem” and its possible implications on everyday life. Like us, you’ve probably heard a good mix of exaggerated tales and sage advice. Idaho Banking Company wants to reassure you about the steps we have taken to make our systems ready for the Year 2000 and to uphold the integrity of your accounts.

Maintaining your confidence in our Bank has always been our number one priority. We have taken the Y2K glitch seriously (we’ve been working on the problem since 1997), and we've upgraded or replaced all our computer systems to bring them into Y2K compliance. We have completed testing our mission-critical systems and are pleased to report that the tests were successful. We are now using Y2K-ready systems in all our daily operations. We have also been working with our suppliers and vendors to ensure Y2K readiness.

Federal and State banking regulators have examined our Bank several times not only for Y2K compliance, but for our contingency planning as well. Our back-ups and contingency plans are in place to minimize disruptions and maintain operations and service in the event problems arise.

While we can’t say for sure that there will be absolutely no glitches in the early days of the new millennium – just as we can’t say everything will work perfectly 100 percent of the time in our normal operations daily – we fully expect the transition to the year 2000 to be uneventful for our customers. In fact, we’ll be open for a full day of business on Friday, December 31^st with our entire staff on hand. They’re dedicated to ensuring a smooth passage into next year and that a normal business day greets customers on Monday morning, January 3, 2000.

And remember, regardless of Y2K, each of our depositors remains insured up to $100,000 by the Federal Deposit Insurance Corporation.

If you have any questions, please stop by or call us. We are eager to help and appreciate your business. We look forward to serving you each and every day, in 2000 and beyond.

Please read on for other helpful information including important Web sites to assist you with Y2K issues.

Cortland D. Rounds
President and CEO

Idaho Banking Company (IBC) is prepared for the year 2000 date change. We can make this statement for the following reasons:

· IBC has undergone rigorous, detailed assessments by Federal and State regulators that are unsurpassed by any other industry segment.

· All systems have been thoroughly examined to determine the extent and complexity of their vulnerability. Evaluations included hardware, software, mechanical and other critical/noncritical systems.

· In each case where a potential problem was identified, action was taken to address it. Mission-critical systems (those that would affect customers most directly) were fixed immediately. Other systems have either been made Y2K ready or will be well before the date change.

· Every mission critical system has been tested and others will be tested before the date change. In many cases, Y2K-ready systems are in use now. There is no need to have large amounts of cash on hand because the usual payment methods, such as checks, credit cards, debit cards, ATMs and Fedwire, have been tested extensively and will be Y2K ready.

· Plans are in place to ensure that operations continue in the unlikely event a system fails. For example:

- Complete back-up records on all customer accounts are maintained.

- Service providers (phone companies, utilities, and others) have been assessed for Y2K readiness.

- Sufficient cash will be available for customer requirements.

· The evaluation and testing process began over three years ago and is ongoing. It will continue well into the Year 2000.

SYSTEMS EVALUATED FOR Y2K READINESS:

· Electronic benefits transfer systems (including direct deposit and direct payment)

· Wire transfer systems

· ATM Networks

· Electronic data interchange systems

· Internal hardware and software (including systems for core banking, investments, fiduciary, management information, retail delivery and operating)

· Automated clearing houses

· Check clearing providers

· Credit card merchant and issuing systems

· Telecommunications systems

· Audit systems

· Budget systems

· Audio response systems

· Embedded software systems (including vaults, security and alarm systems, telephones, fax machines and HVAC)

· Programming languages and tools

· All third party vendors of computer hardware and software

FOR FURTHER READING we have provided the following Web sites and/or links dedicated to Year 2000 issues that may be of interest to you:

MESSAGE FROM IDAHO'S FINANCIAL INSTITUTION REGULATORS TO BANK CUSTOMERS CONSIDERING LARGE WITHDRAWALS BECAUSE OF Y2K CONCERNS

Board of Governors of the Federal Reserve System http://www.federalreserve.gov/y2k/

Idaho Department of Finance
http://www2.state.id.us/finance/dof.htm

Federal Deposit Insurance Corporation
http://www.fdic.gov/about/y2k

FDIC “Consumer News”
http://www.fdic.gov

US Small Business Administration
http://www.sba.gov/y2k

Y2K Planning for Consumers
http://www.y2kexperts.com

Federal Trade Commission’s Consumer Alert
http://www.ftc.gov (“Protecting Your Finances from Y2K Scams”)