INTERMOUNTAIN COMMUNITY BANCORP

8,700,000 SHARES OF COMMON STOCK

This prospectus supplement No. 2 supplements information contained in that certain prospectus dated April 23, 2012, (as subsequently amended or supplemented, the “Prospectus”) relating to the offer to shareholders of record on January 20, 2012 subscription rights to purchase up to 8,700,000 shares of common stock of Intermountain Community Bancorp.

This prospectus supplement includes a Rights Offering Slide Presentation dated May 2012 which Intermountain intends to use in presentations to its shareholders in connection with the Rights Offering.

The information contained in the Rights Offering Presentation included in this prospectus supplement is dated as of the date of such document. This prospectus supplement should be read in conjunction with the Prospectus that was previously delivered, except to the extent that the information in this prospectus supplement updates and supersedes the information contained in the Prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has

approved or disapproved of these securities or determined if this prospectus is truthful or

complete. Any representation to the contrary is a criminal offense.

The date of this Prospectus Supplement is May 2, 2012

Rights Offering Presentation May 2012 8/6/10

2 Disclosure • This presentation contains forward-looking statements within the meaning of 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 following and the other risks described in the “Risk Factors,” “Business,” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” sections, as applicable, of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011; the possibility of 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; a continued decline in the housing and real estate market; a continued increase in unemployment or sustained high levels of unemployment; changes in accounting policies; changes in the monetary and fiscal policies of the federal government; and changes in laws, regulations and the competitive environment. Readers are cautioned that forward- looking statements in this presentation speak only as of the date of this release.  The Company does not undertake any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. • No express or implied representations or warranties as to the accuracy or completeness of any of the information in this presentation are being made, and Intermountain expressly disclaims any and all liability for any errors or omissions herein or relating to or arising from the use of the information contained herein. • All financial data in this presentation is for Intermountain and its subsidiary, Panhandle State Bank, on a consolidated basis, unless otherwise indicated.

3 Offering Overview:  Offering Terms and Rights • $8.7 million Targeted Size • Registered shares of voting common stock Securities Offered • Owners of IMCB stock as of the end of business on January 20, 2012 (“record date”) Eligible  Investors • 5:00 p.m. New York City time, Monday, May 21, 2012 Scheduled Completion Date • Right to purchase additional shares if not fully subscribed by existing shareholders as of record date. If total offering is oversubscribed, individual shareholders oversubscription amount will be reduced on a pro-rata basis based on percentage of shares owned on the record date Oversubscription  Privilege • IMCB will be solely responsible for and bear the expenses of the offering, which are anticipated to be approximately $300,000 Expenses • 4.9% of the pro forma outstanding  common stock Maximum Ownership • Strengthen the Company’s balance sheet, reinvest in its communities, other general corporate purposes, and, subject to regulatory approval, using all or a portion of such proceeds to redeem its Series A Preferred Stock held by the U.S. Treasury as part of the TARP Capital Purchase Program.  Use of Proceeds • The prospectus and other offering materials were issued to registered shareholders and to brokers on or about April 25, 2012.  To invest, please read the prospectus and, if applicable, broker information carefully and follow the instructions contained therein. Exercising shareholder rights • Rights to purchase up to 1.0324 common voting shares for each share owned as of the record date for the purchase price of $1.00 per share. Rights are not transferable. Basic Subscription Right Backstop Commitment • If the offering is not fully subscribed, then certain of the investors who invested in the January capital raise are obligated to purchase additional shares at the $1.00 offering price in a private placement, but are limited to the lower of the pro-rata shares needed to fully subscribe the $8.7 million offering or certain regulatory restrictions on the percentage of shares they may own.

4 Travis Kaul SVP Chief Banking Officer Age:  42 IMCB: 15 years Banking: 25 years Company Overview:  Management Team Curt Hecker President/CEO Age: 51 IMCB: 17 years Bank Exec: 17 years Banking: 28 years Board of Directors Chairman: John Parker (76) 13 Members 2 Insiders Audit Committee Chair Mike Romine Cindy Ingram SVP Audit & Compliance Age: 52 IMCB: 5 years Banking: 25 years Audit: 10 years Dale Schuman SVP Trust & Wealth and General Counsel Age: 53 IMCB: 6 years Banking: 13 years Law:  29 years Pam Rasmussen EVP Chief Operating Officer Age: 52 IMCB: 7 years Banking: 23 years Doug Wright EVP Chief Financial Officer Age: 47 IMCB: 10 years Banking: 25 years Dave Dean SVP Chief Credit Officer Age:  57 IMCB: 12 years Banking:  34 years • Seasoned banking executives with extensive financial backgrounds and significant local market knowledge • Cohesive management team united around thoughtful forward-looking business plan Krissy Peck VP Credit Risk Manager Credit Administration Carolyn Shaw SVP Risk Management Officer

5 Company Overview:  Company Snapshot Idaho-based community bank with $958 million in assets Panhandle State Bank (“PSB”), established in Idaho in 1981 Bancorp established in 1997 as holding company for: PSB, Intermountain Community Bank and Magic Valley Bank Idaho Market Area Recovery accelerating.  Among the fastest growing states in the country for the past 10 years Diverse economy: agriculture, tech, manufacturing and tourism Business friendly: taxes, cheap energy and health care and high quality of life Branch Map Fact Sheet (3/31/12) 4 unique regions 11 counties Northern Idaho/Eastern Washington % of deposits 57% of loans Southwest Idaho/Eastern Oregon 20% of deposits 20% of loans Boise Area 10% of deposits 10% of loans Magic Valley 8% of deposits 7% of loans IDAHO UTAH NEVADA OREGON WASHINGTON MONTANA •Boise

6 Company Snapshot Bulletin Board:  IMCB (prepared for NASDAQ upon reverse split) Unique footprint – ability to expand in 3 states 19 community bank branches Complementary geographies 3 acquisitions 2006: Premier Financial Services 2004: Snake River Bancorp ($74 million assets) 2003: Ontario Branch, Household International Inc

7 Company Snapshot Core Values Accountability – no excuses leadership Be proactive – hit conflicts head on Purpose – work with a sense of urgency Passion – deep sense of caring Drive – strive to be the best People – hire and retain the best and brightest Key Differentiators Unrivaled local market knowledge Proven ability to expand in new markets Flexible and scalable technology platforms - growth infrastructure in place today Committed, capable, focused and motivated staff

8 Company Overview – State of Industry • Banking sector still recovering from financial crisis • Credit losses are decreasing • Companies facing net interest margin pressure – Low interest rates and keen competition for loans – Future liability interest rate deductions limited • Regulatory burden increasing – Pressure on non-interest income – Compliance cost burden • Significant pressure on small banks – Lower revenues, higher fixed costs – Older board and management teams • Industry bi-furcating into “haves” and “have nots” based on capital and adequate size • Consolidation beginning to pick up

9 Company Overview:  Management Focus • Priorities over the past 3 years: – Credit quality – Problem loans below industry average and loss provisions down significantly (comparisons as of 12/31/11…1Q bank numbers show further improvement) • Non Performing Loans/Total Assets at 1.78% vs. peer group 2.78% • 30-day delinquent at 0.27% vs. peer group 0.97% • Other Real Estate owned at 0.62% vs. peer group 0.82% – Capital – successfully raised net $42.3 million in January • Regulatory capital ratios now among strongest in peer group – Liquidity – core deposit growth and capital raise • Non-interest bearing demand deposits comprise 27% of deposits at 3/31/12 • Brokered and CDARs CDs only total 3.2% of deposits at 3/31/12 – Operating expense reduction • Operating expense in 2011 was down $11.3 million or 22.8% over 2009 • Efforts continue - 1Q 2012 expense down $1.4 million or 14.8% over 1Q 2011. – Restructuring for the future • Community-focused • Leaner operation • Scalability Source: Company financial statements and FFIEC Uniform Bank Performance Report, 112-31-11

10 Company Overview: Management Focus • New Priorities Loan growth Continued expense reduction Capitalizing on potential expansion opportunities

11 IMCB Balance Sheet – Key Balances & Ratios IMCB 3/31/11 IMCB 12/31/11 IMCB 3/31/12 Investments Available for Sale $173,484 $219,039 $264,313 Cash & Cash Equivalents 160,071 109,868 102,785 Loans Receivable, Net 540,614 502,252 492,983 ALLL 12,482 12,690 11,372 Total Assets 980,873 934,218 958,631 Transaction Deposits 501,908 498,787 517,373 Savings, CDs and IRAs 265,733 230,586 214,085 Total Deposits 767,641 729,373 731,458 Equity 59,118 61,616 102,949 Tangible Common Equity 32,957 35,278 47,814 Loans/Deposits 70.4% 68.9% 67.4% Transaction Deposits/Total Deposits 65.4% 68.4% 70.7% Brokered +CDARs/Tot Dep 6.6% 5.7% 3.8% Tangible Common Equity/Tangible Assets 3.36% 3.78% 4.99% Tangible Book Value per Common Share $3.92 $4.19 $2.30

12 IMCB Income Statement – Key Totals & Ratios IMCB 1Q 2011 IMCB 4Q 2011 IMCB 1Q 2012 IMCB FY 2011 Interest Income $10,488 $9,770 $9,120 $41,657 Interest Expense 1,777 1,428 1,498 6,819 Net Interest Income 8,711 8,342 7,622 34,838 Provision for Loan Losses 1,633 706 959 7,289 Other Income 2,663 2,690 2,506 10,678 Operating Expenses 9,740 9,166 8,298 38,342 Security gains/(losses) & Hedge Fair Value Adjustments 0 55 (70) (53) Net Income (Loss) before tax $1 $1,215 $801 ($168) Tax benefit (provision) 0 152 0 0 Net income (loss) after tax $1 $1,367 $801 ($168) Preferred stock dividend 433 460 466 1,808 Net Income (Loss) to common shareholders ($442) $907 $335 ($1,976) Earnings (Loss) per common share – diluted ($0.05) $0.11 $0.01 ($0.21) Return on Average Assets 0.00% 0.58% 0.34% 0.00% Return on Average Common Equity (5.37%) 10.28% 3.23% (5.27%)

13 IMCB Asset Quality – Key Metrics March 31, 2011 December 31, 2011 March 31, 2012 Non Performing Loans (“NPL”) & 90 day past dues $18,717 $9,292 $8,000 OREO 3,686 6,650 6,852 Total Non Performing Assets (“NPA”) 22,403 15,942 14,852 NPA/Total Assets 2.28% 1.71% 1.55% NPA to Tangible Equity + Allowance for Loan Loss (“ALLL”) aka the “Texas Ratio” 31.41% 21.51% 13.01% ALLL/Total Loans 2.26% 2.46% 2.25% ALLL Coverage of NPLs 66.69% 136.57% 142.15% 30-day delinquency/Total Loans 0.54% 0.28% 0.19% Quarterly chargeoffs, net of recoveries $1,607 $2,383 $2,277

14 Pro Forma Impacts of Raise - IMCB and PSB Capital Ratios Adjustments from Rights Offering/ Estimated (1) Priv Plac Backstop (2) Pro Forma INTERMOUNTAIN COMMUNITY BANCORP: Tier 1 Capital 108,985 $    8,334 $                     117,319 $    Tier 2 Capital 7,616           7,616           Total Risk-Based Capital 116,601       8,334                        124,935       Average Assets for Leverage Capital 939,097       8,334                        947,431       Total Risk Weighted Assets 605,496       605,496       Tier 1 Capital/Average Assets (Leverage Ratio) 11.61% 12.38% Tier 1 Capital to Risk-Weighted Assets 18.00% 19.38% Total Risk-Based Capital to Risk-Weighted Assets 19.26% 20.63% Tangible Common Equity to Tangible Assets with Preferred Conversion 7.99% 8.78% Tangible Common Equity per Share with Preferred Conversion 1.37 $         1.32 $         PANHANDLE STATE BANK: Tier 1 Capital 105,757 $    105,757 $    Tier 2 Capital 7,616           7,616           Total Risk-Based Capital 113,373       113,373       Average Assets for Leverage Capital 937,921       937,921       Total Risk Weighted Assets 605,496       605,496       Tier 1 Capital/Average Assets (Leverage Ratio) 11.28% 11.28% Tier 1 Capital to Risk-Weighted Assets 17.47% 17.47% Total Risk-Based Capital to Risk-Weighted Assets 18.72% 18.72% (1)  Assumes that the 698,993 shares of Series B Preferred Stock are converted to 34,949,648 shares of Non-Voting Common after shareholder approval authorizing Non Voting Common Stock at the Company's Annual Meeting on May 17. (2)  Assumes full subscription of 8,700,00 shares at $1 per share price, net of estimated transaction expenses. As of March 31, 2012 (Dollars in thousands)

15 ? Questions • Please direct questions to: – Susan Pleasant, IMCB Shareholder Relations • Phone:  208-255-3432 • Email: Susan.Pleasant@intermountainbank.com – American Stock Transfer and Trust (AST), Subscription Agent • Phone: 877-478-5038