Coeur d'Alene-based Idaho Independent Bank has reported a net loss of $5.7 million, or 89 cents a diluted share, for 2010, down from a loss of $6.7 million, or $1.06 per diluted share, in 2009.

The 2010 loss reflects the posting of a $3.1 million noncash income tax adjustment to IIB's deferred tax assets, says Jack Gustavel, the bank's chairman and CEO.

Total loans as of Dec. 31 were $291 million, decreasing 24 percent from $383 million a year earlier. The bank's deposits were $368.8 million as of Dec. 31, down 11.2 percent from year-end 2009 deposits, which were $415.3 million.

In addition, IIB's total assets posted at the end of 2010 fell by $51.6 million, or by 10.5 percent, to $441.6 million from $493.2 million at the end of 2009.

Gustavel says the bank made progress in addressing nonperforming loan assets and reducing concentrations in land and land development loans. Gustavel adds that the bank had few issues in the category of construction loans.

"The year was a transitional year, and when the economy turned and land development and land loans went bad not just for us but for banks across the region, we just had to adapt to the circumstances," Gustavel says.

He adds that the bank worked bad loans off the balance sheet. "With that comes cost," he says. "Your margins get squeezed in the process."

In a lot of cases, banks charge off the loans or adjust the carrying values to market, which are expenses to the bank.

Overall, the bank is seeing improvements, and its capital is good, Gustavel says.

"I think it got better and better as the year went on," he says. "The economy has stabilized, in some areas is coming back, and in some areas have hit bottom, and that reflects in our performance."

IIB was established in 1993 as an Idaho state-chartered, commercial bank and operates branches in Coeur d'Alene, Hayden, Boise, Meridian, Nampa, Mountain Home, Caldwell, Star, Eagle, and Sun Valley-Ketchum, Idaho.