EXHIBIT 99.1
INTERVEST BANCSHARES CORPORATION
10 ROCKEFELLER PLAZA/NEW YORK, N.Y. 10020-1903
TEL: (212) 218-2800/ FAX: (212) 218-2808
A FINANCIAL HOLDING COMPANY JEROME DANSKER CHAIRMAN
LOWELL S. DANSKER VICE CHAIRMAN
LAWRENCE G. BERGMAN DIRECTOR
(BW) (INTERVEST-BANCSHARES) (IBCA)
INTERVEST BANCSHARES CORPORATION
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REPORTS RECORD EARNINGS FOR 2003
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Business Editors - New York - (Business Wire - January 20, 2004)
Intervest Bancshares Corporation (NASDAQ: IBCA) (the "Company") today
reported that its consolidated net earnings for 2003 amounted to $9,120,000, an
increase of 32% over net earnings of $6,906,000 for 2002. Net earnings for 2003
represent the highest level of earnings reported by the Company since its
inception in 1993. Diluted earnings per share amounted to $1.53 in 2003,
compared to $1.37 in 2002. The Company's return on average assets and equity was
1.19% and 15.34%, respectively, in 2003, compared to 1.13% and 15.56% in 2002.
Consolidated net earnings for the fourth quarter of 2003 increased 16% to
$2,222,000, or $0.35 per diluted share, from $1,910,000, or $0.37 per diluted
share, in the same quarter of 2002. The diluted per share computations for the
2003 periods included a higher number of common shares outstanding resulting
from the exercise of common stock warrants, conversion of debentures and a
higher stock price.
The $2,214,000 improvement in earnings for 2003 was attributable to
increases in both net interest and dividend income and noninterest income. Net
interest and dividend income was higher by $4,746,000 reflecting growth in the
loan portfolio, while noninterest income increased by $1,103,000 primarily due
to higher income from loan prepayments as well as fees earned from loan
commitments that expired during the year. These items were partially offset by
the following: a $695,000 increase in the provision for loan losses due to loan
growth; a $780,000 increase in noninterest expenses (of which $309,000 was
non-cash and non-recurring compensation expense recorded in connection with
common stock warrants held by employees and directors and the remainder was
largely attributable to the Company's growth in assets); and a $2,160,000
increase in the provision for income taxes resulting from higher pre-tax income.
The $312,000 improvement in earnings for the fourth quarter of 2003 was
largely due to an increase in net interest and dividend income of $1,292,000,
partially offset by a $283,000 increase in the provision for loan losses and a
$604,000 increase in the provision for income taxes, all of which were due to
the same factors discussed above. Noninterest expenses for the fourth quarter of
2003 increased slightly by $41,000 to $1,784,000 and included the reversal of
$124,000 of data processing expense accrued from March to September due to the
renegotiation of Intervest National Bank's data processing contract. Noninterest
income for the fourth quarter of 2003 decreased slightly by $52,000 to $778,000.
Noninterest income for the fourth quarter of 2002 included a $120,000 gain from
the sale of securities.
Total consolidated assets at December 31, 2003 increased 33% to
$910,595,000, from $685,979,000 at December 31, 2002, which is reflected
primarily in the increase in the Company's loan portfolio.
Total consolidated loans, net of unearned fees, at December 31, 2003
increased 37% to $671,125,000, from $489,912,000 at year-end 2002. The increase
was due to new commercial real estate and multifamily mortgage loan originations
exceeding repayments. At December 31, 2003, the Company has two past due real
estate loans totaling $8,474,000 on a nonaccrual status. The Company has
commenced foreclosure proceedings and believes the estimated fair value of each
of the underlying properties exceeds its recorded investment in these loans.
SUBSIDIARIES OF INTERVEST BANCSHARES CORPORATION
NASDAQ SYMBOL: IBCA
______________________
INTERVEST NATIONAL BANK INTERVEST SECURITIES CORPORATION INTERVEST MORTGAGE
FDIC INSURED MEMBER NASD/SIPC CORPORATION
MORTGAGE INVESTMENTS
Total consolidated security investments at December 31, 2003 increased 6%
to $155,898,000, from $146,802,000 at December 31, 2002. The increase was due to
new investments exceeding maturities and early calls of securities. At December
31, 2003, the portfolio was comprised of U.S. government agency debt obligations
with an average remaining maturity of approximately 1.7 years. The Company
normally invests in short-to-medium term security investments to emphasize
liquidity.
Total consolidated cash and short-term investments at December 31, 2003
amounted to $64,128,000, compared to $30,849,000 at December 31, 2002. The
increase reflected the temporary investment of deposit inflows during December.
A significant portion of these funds are expected to fund new loans.
Total consolidated deposits at December 31, 2003 increased 34% to
$675,513,000, from $505,958,000 at December 31, 2002, primarily reflecting
increases in money market and certificate of deposit accounts of $27,921,000 and
$142,176,000, respectively.
Total consolidated borrowed funds amounted to $139,455,000 at December 31,
2003, compared to $113,568,000 at December 31, 2002. The increase was due to the
following: the sale of $16,000,000 of debentures by the Company's subsidiary
Intervest Mortgage Corporation as part of its normal funding of mortgage loan
originations; the sale of $15,000,000 of capital securities as discussed below;
and a net increase of $638,000 in accrued interest payable. These increases were
partially offset by principal repayments during the year of $3,661,000 and
$2,090,000 (principal only) of debenture conversions into common stock.
On September 17, 2003, the Company sold $15,000,000 of Trust Preferred
securities through FTN Financial Capital Markets, a division of First Tennessee
Bank National Association. The securities qualify as regulatory capital and were
sold to institutional investors. The securities bear interest at a fixed rate of
6.75% per annum for the first five years and thereafter at a floating rate based
on LIBOR and mature in 30 years. The securities can be redeemed by the Company
at anytime after five years subject to regulatory approval. The Company has
invested the entire proceeds in Intervest National Bank. In 2003, the Company
also invested $5,000,000 in Intervest Mortgage Corporation and $250,000 in
Intervest Securities Corporation.
Total consolidated stockholders' equity at December 31, 2003 increased 42%
to $75,385,000, from $53,126,000 at December 31, 2002. The increase was largely
due to earnings of $9,120,000 and $12,481,000 from the issuance of shares in
connection with the exercise of stock warrants and conversion of debentures.
Book value per common share increased to $12.59 at December 31, 2003, from
$11.30 at December 31, 2002.
As previously announced, the Company will be moving from its present New
York locations to the entire fourth floor of One Rockefeller Plaza, New York,
NY. Renovations are expected to be completed by May 2004.
Intervest Bancshares Corporation is a registered financial holding company.
Its subsidiaries are: Intervest National Bank, a nationally chartered commercial
bank, that has its headquarters and full-service banking office at One
Rockefeller Plaza, in New York City, and a total of five full-service banking
offices in Clearwater and Pinellas County, Florida; Intervest Mortgage
Corporation, a mortgage investment company; and Intervest Securities
Corporation, a registered broker/dealer. Intervest National Bank maintains
capital ratios in excess of the regulatory requirements to be designated as a
well-capitalized institution. Intervest Bancshares Corporation's Class A Common
Stock is listed on the NASDAQ Small Cap: Trading Symbol IBCA.
This press release may contain forward-looking information. Except for
historical information, the matters discussed herein are subject to certain
risks and uncertainties that may affect the Company's actual results of
operations. The following important factors, among others, could cause actual
results to differ materially from those set forth in forward looking statements:
changes in general economic conditions in the Company's market areas; changes in
policies by regulatory agencies; fluctuations in interest rates; demand for
loans; and competition. Reference is made to the Company's filings with the SEC
for further discussion of risks and uncertainties regarding the Company's
business. Historical results are not necessarily indicative of the future
prospects of the Company.
CONTACT: JEROME DANSKER, CHAIRMAN, INTERVEST BANCSHARES CORPORATION
10 Rockefeller Plaza, Suite 1015, New York, New York 10020 (212-218-2800)
(Fax 212-218-2808)
SELECTED CONSOLIDATED FINANCIAL INFORMATION FOLLOWS.
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INTERVEST BANCSHARES CORPORATION
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SELECTED CONSOLIDATED FINANCIAL INFORMATION
QUARTER ENDED YEAR ENDED
(Dollars in thousands, except per share amounts) DECEMBER 31, DECEMBER 31,
------------------------ ------------------------
2003 2002 2003 2002
- --------------------------------------------------------------------------------------- ------------------------
SELECTED OPERATING DATA:
Interest and dividend income. . . . . . . . . . . . . . . . . $ 13,524 $ 11,364 $ 50,464 $ 43,479
Interest expense. . . . . . . . . . . . . . . . . . . . . . . 7,733 6,865 28,564 26,325
------------------------ ------------------------
Net interest and dividend income. . . . . . . . . . . . . . . 5,791 4,499 21,900 17,154
Provision for loan loss reserves. . . . . . . . . . . . . . . 593 310 1,969 1,274
------------------------ ------------------------
Net interest and dividend income
after provision for loan loss reserves . . . . . . . . . . 5,198 4,189 19,931 15,880
Noninterest income. . . . . . . . . . . . . . . . . . . . . . 778 830 3,321 2,218
Noninterest expenses. . . . . . . . . . . . . . . . . . . . . 1,784 1,743 7,259 6,479
------------------------ ------------------------
Earnings before taxes . . . . . . . . . . . . . . . . . . . . 4,192 3,276 15,993 11,619
Provision for income taxes. . . . . . . . . . . . . . . . . . 1,970 1,366 6,873 4,713
------------------------ ------------------------
NET EARNINGS. . . . . . . . . . . . . . . . . . . . . . . . . $ 2,222 $ 1,910 $ 9,120 $ 6,906
======================== ========================
BASIC EARNINGS PER SHARE. . . . . . . . . . . . . . . . . . . $ .41 $ .45 $ 1.85 $ 1.71
DILUTED EARNINGS PER SHARE. . . . . . . . . . . . . . . . . . $ .35 $ .37 $ 1.53 $ 1.37
Adjusted net earnings for diluted earnings per share (1). . . $ 2,329 $ 2,022 $ 9,572 $ 7,342
Weighted-average common shares and common
equivalent shares outstanding for computing:
Basic earnings per share . . . . . . . . . . . . . . . . . 5,432,732 4,242,247 4,938,995 4,043,619
Diluted earnings per share (2) . . . . . . . . . . . . . . 6,627,007 5,485,685 6,257,720 5,348,121
Common shares outstanding at end of period. . . . . . . . . . 5,988,377 4,703,087 5,988,377 4,703,087
Common stock warrants outstanding at end of period. . . . . . 738,975 1,750,010 738,975 1,750,010
Net interest margin . . . . . . . . . . . . . . . . . . . . . 2.69% 2.72% 2.90% 2.88%
Return on average assets (3). . . . . . . . . . . . . . . . . 1.03% 1.14% 1.19% 1.13%
Return on average equity (3). . . . . . . . . . . . . . . . . 13.17% 15.71% 15.34% 15.56%
Efficiency ratio (4). . . . . . . . . . . . . . . . . . . . . 27% 33% 29% 33%
AT AT AT AT AT
-- -- -- -- --
DEC 31, SEP 30, JUN 30, MAR 31, DEC 31,
--------- --------- --------- --------- ---------
SELECTED FINANCIAL CONDITION INFORMATION: 2003 2003 2003 2003 2002
- ------------------------------------------------- --------- --------- --------- --------- ---------
Total assets. . . . . . . . . . . . . . . . . . . $910,595 $822,900 $749,777 $727,945 $685,979
Total cash and short-term investments . . . . . . $ 64,128 $ 37,695 $ 33,405 $ 37,730 $ 30,849
Total time deposits with banks. . . . . . . . . . - - - $ 2,000
Total securities held to maturity . . . . . . . . $152,823 $134,164 $121,833 $137,243 $145,694
Total FRB and FHLB stock. . . . . . . . . . . . . $ 3,075 $ 2,805 $ 2,805 $ 1,114 $ 1,108
Total loans, net of unearned fees . . . . . . . . $671,125 $631,361 $575,975 $532,592 $489,912
Total deposits. . . . . . . . . . . . . . . . . . $675,513 $594,832 $553,388 $538,098 $505,958
Total borrowed funds and accrued interest payable $139,455 $144,363 $120,524 $120,138 $113,568
Total stockholders' equity. . . . . . . . . . . . $ 75,385 $ 63,745 $ 58,009 $ 55,000 $ 53,126
Total allowance for loan loss reserves. . . . . . $ 6,580 $ 5,987 $ 5,385 $ 4,955 $ 4,611
Total nonperforming loans . . . . . . . . . . . . $ 8,474 $ 8,474 - - -
Total loan chargeoffs . . . . . . . . . . . . . . - - - - $ 150
Total loan recoveries . . . . . . . . . . . . . . - - - - $ 107
Total foreclosed real estate. . . . . . . . . . . - - - $ 1,081 $ 1,081
Book value per common share . . . . . . . . . . . $ 12.59 $ 12.61 $ 12.23 $ 11.69 $ 11.30
Allowance for loan losses/nonperforming loans . . 78% 71% NA NA NA
Allowance for loan losses /net loans. . . . . . . 0.98% 0.95% 0.93% 0.93% 0.94%
<FN>
(1) Net earnings plus interest expense on dilutive convertible debentures, net of taxes, that would
not occur if they were assumed converted.
(2) Diluted EPS includes shares that would be outstanding if dilutive common stock warrants and
convertible debentures were assumed to be exercised/converted during the period. All outstanding
warrants were considered for both 2003 EPS computations and for the 2002 quarterly computation. For
the 2002 annual EPS computation, certain warrants are not considered because their exercise price
per share exceeded the average market price of Class A common stock during the year. Warrants to
purchase 1,103,000 shares of common stock at prices ranging from $10.00 to $10.01 per share were
not considered. Convertible debentures (principal and accrued interest) outstanding at December 31,
2003 and 2002 totaling $7,145,000 and $9,920,000, respectively, were convertible into common stock
at a price of $10.01 per share, which resulted in additional common shares (based on average
balances outstanding) of approximately 843,000 and 962,000 in the 2003 quarterly and annual EPS
computations, respectively, and 991,000 in both 2002 EPS computations.
(3) Ratios for the quarter have been annualized.
(4) Defined as noninterest expenses (excluding the provision for loan losses) as a percentage of net
interest and dividend income plus noninterest income.
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INTERVEST BANCSHARES CORPORATION
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CONSOLIDATED FINANCIAL HIGHLIGHTS
- ---------------------------------------------------------------------------------------------------------------------------
At or For The Period Ended
---------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
($in thousands, except per share amounts) Dec 31, Dec 31, Dec 31, Dec 31, Dec 31,
2003 2002 2001 2000 1999
- ---------------------------------------------------------- ----------- ----------- ----------- ----------- -----------
BALANCE SHEET HIGHLIGHTS:
Total assets . . . . . . . . . . . . . . . . . . . . . . . $ 910,595 $ 685,979 $ 512,622 $ 416,927 $ 340,481
Asset growth rate. . . . . . . . . . . . . . . . . . . . . 33% 34% 23% 22% 13%
Total loans, net . . . . . . . . . . . . . . . . . . . . . $ 671,125 $ 489,912 $ 368,526 $ 266,326 $ 212,937
Loan growth rate . . . . . . . . . . . . . . . . . . . . . 37% 33% 38% 25% 29%
Total deposits . . . . . . . . . . . . . . . . . . . . . . $ 675,513 $ 505,958 $ 362,437 $ 300,241 $ 201,080
Deposit growth rate. . . . . . . . . . . . . . . . . . . . 34% 40% 21% 49% 18%
Loans/deposits (Intervest National Bank) . . . . . . . . . 79% 76% 79% 67% 66%
Borrowed funds and related accrued interest payable. . . . $ 139,455 $ 113,568 $ 99,910 $ 72,813 $ 99,377
Stockholders' equity . . . . . . . . . . . . . . . . . . . $ 75,385 $ 53,126 $ 40,395 $ 36,228 $ 33,604
Common shares outstanding (1). . . . . . . . . . . . . . . 5,988,377 4,703,087 3,899,629 3,899,629 3,836,879
Common book value per share. . . . . . . . . . . . . . . . $ 12.59 $ 11.30 $ 10.36 $ 9.29 $ 8.76
Market price per common share. . . . . . . . . . . . . . . $ 14.65 $ 10.80 $ 7.40 $ 3.75 $ 6.25
- ---------------------------------------------------------- ---------------------------------------------------------------
ASSET QUALITY HIGHLIGHTS
Nonperforming loans. . . . . . . . . . . . . . . . . . . . $ 8,474 - $ 1,243 - -
Allowance for loan loss reserves . . . . . . . . . . . . . $ 6,580 $ 4,611 $ 3,380 $ 2,768 $ 2,493
Loan recoveries (2). . . . . . . . . . . . . . . . . . . . - $ 107 - - $ 1
Loan chargeoffs (3). . . . . . . . . . . . . . . . . . . . - $ 150 - - -
Foreclosed real estate . . . . . . . . . . . . . . . . . . - $ 1,081 - - -
Allowance for loan losses reserves/net loans . . . . . . . 0.98% 0.94% 0.92% 1.04% 1.17%
- ---------------------------------------------------------- ---------------------------------------------------------------
STATEMENT OF OPERATIONS HIGHLIGHTS:
Interest and dividend income . . . . . . . . . . . . . . . $ 50,464 $ 43,479 $ 35,462 $ 31,908 $ 25,501
Interest expense . . . . . . . . . . . . . . . . . . . . . 28,564 26,325 24,714 23,325 18,419
---------------------------------------------------------------
Net interest and dividend income . . . . . . . . . . . . . 21,900 17,154 10,748 8,583 7,082
Provision for loan loss reserves . . . . . . . . . . . . . 1,969 1,274 612 275 830
Noninterest income . . . . . . . . . . . . . . . . . . . . 3,321 2,218 1,655 983 900
Noninterest expenses . . . . . . . . . . . . . . . . . . . 7,259 6,479 5,303 4,568 4,059
Provision for income taxes . . . . . . . . . . . . . . . . 6,873 4,713 2,710 1,909 1,198
---------------------------------------------------------------
Earnings before extraordinary item . . . . . . . . . . . . 9,120 6,906 3,778 2,814 1,895
Extraordinary item, net of tax (4) . . . . . . . . . . . . - - - (206) -
Cumulative effect of accounting change, net of tax (5) . . - - - - (128)
---------------------------------------------------------------
Net earnings . . . . . . . . . . . . . . . . . . . . . . . $ 9,120 $ 6,906 $ 3,778 $ 2,608 $ 1,767
---------------------------------------------------------------
Basic earnings per share . . . . . . . . . . . . . . . . . $ 1.85 $ 1.71 $ .97 $ .67 $ .47
Diluted earnings per share . . . . . . . . . . . . . . . . $ 1.53 $ 1.37 $ .97 $ .67 $ .44
Adjusted net earnings used to calculate
diluted earnings per share . . . . . . . . . . . $ 9,572 $ 7,342 $ 3,778 $ 2,608 $ 1,767
Average common shares used to calculate:
Basic earnings per share. . . . . . . . . . . . . . . 4,938,995 4,043,619 3,899,629 3,884,560 3,760,293
Diluted earnings per share. . . . . . . . . . . . . . 6,257,720 5,348,121 3,899,629 3,884,560 4,020,118
Net interest margin. . . . . . . . . . . . . . . . . . . . 2.90% 2.88% 2.47% 2.34% 2.38%
Return on average assets . . . . . . . . . . . . . . . . . 1.19% 1.13% 0.85% 0.69% 0.57%
Return on average equity . . . . . . . . . . . . . . . . . 15.34% 15.56% 9.94% 7.48% 5.48%
Efficiency ratio (6) . . . . . . . . . . . . . . . . . . . 29% 33% 43% 48% 51%
Full-service banking offices . . . . . . . . . . . . . . . 6 6 6 6 6
- ---------------------------------------------------------------------------------------------------------------------------
<FN>
(1) The increase in shares outstanding in 2003 was due to the following: 945,717 from the exercise of Class A common
stock warrants; 309,573 from the conversion of convertible debentures; and 30,000 from newly issued Class B common
stock in connection with the acquisition of Intervest Securities Corporation. The increase in 2002 from 2001 was all
due to the exercise of Class A common stock warrants. The increase in 2000 from 1999 was due to the exercise of Class
A and Class B common stock warrants of 12,750 and 50,000, respectively.
(2) The amount for 2002 represents proceeds received from the sale of collateral from a loan that was charged off prior
to 1997.
(3) The amount for 2002 represents a chargeoff taken in connection with the transfer of a nonperforming loan to
foreclosed real estate.
(4) Represents a charge, net of taxes, from the early retirement of debentures
(5) Represents a charge, net of taxes, from the adoption of Statement of Position 98-5, "Reporting on the Costs of
Start-Up Activities."
(6) Defined as noninterest expenses (excluding the provision for loan losses) as a percentage of net interest and
dividend income plus noninterest income.
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