EXHIBIT 99.1
(BW) (INTERVEST-BANCSHARES) (IBCA)
INTERVEST BANCSHARES CORPORATION
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REPORTS 81% INCREASE IN 2005 SECOND QUARTER EARNINGS
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Business Editors - New York - (Business Wire - July 12, 2005)
Intervest Bancshares Corporation (NASDAQ: IBCA) (the "Company") today
reported that its consolidated net earnings for the second quarter of 2005
increased by 81% to $4.5 million or $0.67 per diluted share, from $2.5 million
or $0.37 per diluted share reported in the second quarter of 2004. The Company's
return on average assets and equity increased to 1.26% and 19.01%, respectively,
in the 2005 quarter, compared to 0.95% and 12.58% in the 2004 quarter. The
Company's efficiency ratio, which is a measure of its ability to control
expenses as a percentage of its revenues, continues to be favorable at 25% for
the second quarter of 2005.
As previously announced, the Company's Class A Common Stock began trading
on the Nasdaq National Market on June 27, 2005. Previously, the stock had traded
on the Nasdaq SmallCap Market.
Consolidated net earnings increased by $2.0 million in the second quarter
of 2005 due to continued growth in the Company's lending activities and
nonrecurring income from the full repayment of a $3.9 million nonaccrual loan
during the quarter. Net interest and dividend income, the Company's primary
source of revenues, grew by 41% or $2.7 million from the second quarter of 2004.
The growth was primarily due to a $315.8 million increase in average loans
outstanding as well as the receipt of $0.3 million of nonaccrual interest income
during the quarter. The Company's net interest margin increased to 2.59% from
2.53% in the second quarter of 2004. Noninterest income increased by $0.8
million from the second quarter of 2004 primarily reflecting a higher level of
income from loan prepayments, which included $0.6 million from the satisfaction
of the nonaccrual loan. The provision for loan losses also decreased by $0.8
million from the second quarter of 2004 mostly due to the favorable impact from
the satisfaction of the nonaccrual loan. The combined revenue increases and
reduction in the provision for loan losses totaling $4.3 million was partially
offset by a $1.6 million increase in income tax expense resulting from higher
pretax income and a $0.7 million increase in noninterest expenses resulting
primarily from $0.4 million in payroll cost increases, $0.1 million of
additional expenses associated with complying with the Sarbanes Oxley
requirements on internal controls and a $0.1 million Nasdaq National Market
entry fee. The Company's effective income tax rate was 43% for both reporting
periods and its employees totaled 68 at June 30, 2005, compared to 62 at June
30, 2004.
Consolidated net earnings for the first half of 2005 increased by 48% to
$7.8 million or $1.15 per diluted share, from $5.2 million or $0.78 per diluted
share reported in the first half of 2004. The increase reflected a 35% or $4.6
million increase in net interest and dividend income, a $0.2 million increase in
noninterest income and a $0.9 million decrease in the provision for loan losses.
These improvements were partially offset by a $2.0 million increase in income
tax expense and a $1.0 million increase in noninterest expenses. The reasons for
these changes are substantially the same as those discussed above regarding the
quarterly period.
Total consolidated assets at June 30, 2005 increased by 15% to $1.5
billion, from $1.3 billion at December 31, 2004. The increase is primarily
reflected in the growth in the Company's loan portfolio.
Total consolidated loans, net of unearned fees, at June 30, 2005 increased
by 16% to $1.2 billion from $1.0 billion at December 31, 2004. The increase was
due to new mortgage loan originations secured by commercial and multifamily real
estate exceeding principal repayments. New loan originations totaled $325
million in the first half of 2005, compared to $339 million in the first half of
2004.
Total consolidated security investments at June 30, 2005 amounted to $237.6
million, compared to $254.0 million at December 31, 2004. The decrease reflected
maturities exceeding new purchases during the period. The Company continues to
invest in short-term (up to 5 year maturities) U.S. government agency debt
obligations to emphasize liquidity and to currently target Intervest National
Bank's loan-to-deposit ratio at approximately 85%. The investment portfolio at
June 30, 2005 had a weighted-average remaining maturity of 1.2 years and a yield
of 2.66%, compared to 1.4 years and a yield of 2.33% at December 31, 2004.
Total consolidated cash and other short-term investments at June 30, 2005
increased to $75.2 million from $24.6 million at December 31, 2004. The increase
reflected the temporary investment of deposit inflows during June. A portion of
these funds is expected to fund new loans.
Total consolidated deposits at June 30, 2005 increased by 23% to $1.2
billion, from $993.9 million at December 31, 2004, reflecting an increase in
certificate of deposit accounts of $240.6 million, partially offset by a
decrease in checking, savings and money market accounts aggregating $16.5
million.
Total consolidated borrowed funds and related interest payable decreased by
20% to $163.0 million at June 30, 2005, from $202.7 million at December 31,
2004. The decrease was largely due to the full repayment of $36.0 million of
short-term FHLBNY borrowings by Intervest National Bank.
Total consolidated stockholders' equity at June 30, 2005 increased by 9% to
$98.0 million, from $90.1 million at December 31, 2004. The increase was almost
entirely due to net earnings of $7.8 million during the first half of 2005. The
Company's book value per common share amounted to $15.60 at June 30, 2005.
Intervest Bancshares Corporation is a registered financial holding company.
Its operating 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 Gulfport, Florida; Intervest Mortgage
Corporation, a mortgage investment company; and Intervest Securities
Corporation, a broker/dealer and an NASD member firm. 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 National Market: 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
One Rockefeller Plaza (Suite 400)
New York, New York 10020-2002
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
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QUARTER ENDED SIX-MONTHS ENDED
(Dollars in thousands, except per share amounts) JUNE 30, JUNE 30,
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2005 2004 2005 2004
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SELECTED OPERATING DATA:
Interest and dividend income. . . . . . . . . . . . . . . . . $ 22,696 $ 15,391 $ 43,264 $ 29,984
Interest expense. . . . . . . . . . . . . . . . . . . . . . . 13,500 8,866 25,783 17,081
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Net interest and dividend income. . . . . . . . . . . . . . . 9,196 6,525 17,481 12,903
Provision for loan losses . . . . . . . . . . . . . . . . . . 452 1,284 1,485 2,361
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Net interest and dividend income
after provision for loan losses . . . . . . . . . . . . . . 8,744 5,241 15,996 10,542
Noninterest income. . . . . . . . . . . . . . . . . . . . . . 2,009 1,225 2,887 2,681
Noninterest expenses. . . . . . . . . . . . . . . . . . . . . 2,749 2,045 5,123 3,963
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Earnings before income taxes. . . . . . . . . . . . . . . . . 8,004 4,421 13,760 9,260
Provision for income taxes. . . . . . . . . . . . . . . . . . 3,481 1,916 5,989 4,020
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NET EARNINGS. . . . . . . . . . . . . . . . . . . . . . . . . $ 4,523 $ 2,505 $ 7,771 $ 5,240
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BASIC EARNINGS PER SHARE. . . . . . . . . . . . . . . . . . . $ 0.72 $ 0.42 $ 1.24 $ 0.87
DILUTED EARNINGS PER SHARE. . . . . . . . . . . . . . . . . . $ 0.67 $ 0.37 $ 1.15 $ 0.78
Adjusted net earnings for diluted earnings per share (1). . . $ 4,578 $ 2,587 $ 7,881 $ 5,404
Weighted-average common shares and common
equivalent shares outstanding for computing:
Basic earnings per share. . . . . . . . . . . . . . . . . . 6,275,954 6,048,075 6,274,904 6,045,461
Diluted earnings per share (2). . . . . . . . . . . . . . . 6,870,292 6,912,067 6,870,803 6,912,059
Common shares outstanding at end of period. . . . . . . . . . 6,279,501 6,048,075 6,279,501 6,048,075
Common stock warrants outstanding at end of period. . . . . . 696,465 696,465 696,465 696,465
Yield on interest-earning assets. . . . . . . . . . . . . . . 6.39% 5.96% 6.26% 6.12%
Cost of funds . . . . . . . . . . . . . . . . . . . . . . . . 4.15% 3.79% 4.07% 3.85%
Net interest margin . . . . . . . . . . . . . . . . . . . . . 2.59% 2.53% 2.53% 2.63%
Return on average assets (3). . . . . . . . . . . . . . . . . 1.26% 0.95% 1.10% 1.05%
Return on average equity (3). . . . . . . . . . . . . . . . . 19.01% 12.58% 16.68% 13.43%
Effective income tax rate . . . . . . . . . . . . . . . . . . 43.49% 43.34% 43.52% 43.41%
Efficiency ratio (4). . . . . . . . . . . . . . . . . . . . . 25% 26% 25% 25%
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AT AT AT AT AT
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JUN 30, MAR 31, DEC 31, SEP 30, JUN 30,
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SELECTED FINANCIAL CONDITION INFORMATION: 2005 2005 2004 2004 2004
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Total assets. . . . . . . . . . . . . . . . . . . $1,511,604 $1,427,439 $1,316,751 $1,269,256 $1,119,266
Total cash and short-term investments . . . . . . $ 75,197 $ 49,347 $ 24,599 $ 47,138 $ 19,879
Total securities held to maturity . . . . . . . . $ 231,630 $ 254,754 $ 248,888 $ 255,340 $ 196,132
Total FRB and FHLB stock. . . . . . . . . . . . . $ 5,983 $ 5,092 $ 5,092 $ 4,642 $ 4,642
Total loans, net of unearned fees . . . . . . . . $1,174,107 $1,095,161 $1,015,396 $ 939,001 $ 877,296
Total deposits. . . . . . . . . . . . . . . . . . $1,217,506 $1,123,657 $ 993,872 $ 976,392 $ 852,852
Total borrowed funds and accrued interest payable $ 163,021 $ 177,995 $ 202,682 $ 180,368 $ 155,640
Total stockholders' equity. . . . . . . . . . . . $ 97,975 $ 93,376 $ 90,094 $ 84,410 $ 81,259
Total allowance for loan losses . . . . . . . . . $ 12,591 $ 12,139 $ 11,106 $ 10,008 $ 8,941
Total nonperforming loans . . . . . . . . . . . . $ 750 $ 4,607 $ 4,607 $ 5,226 $ -
Total loan chargeoffs . . . . . . . . . . . . . . $ - $ - $ - $ - $ -
Book value per common share . . . . . . . . . . . $ 15.60 $ 14.88 $ 14.37 $ 13.96 $ 13.44
Allowance for loan losses / net loans . . . . . . 1.07% 1.11% 1.09% 1.07% 1.02%
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(1) Represents net earnings plus interest expense on dilutive convertible
debentures, net of taxes, that would not occur if the convertible
debentures were assumed to be converted for purposes of computing diluted
earnings per share.
(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 the EPS computations.
Convertible debentures (principal and accrued interest) outstanding at June
30, 2005 and 2004 totaling $4,826,000 and $7,557,000, respectively, were
convertible into common stock at a price of $14.00 per share in 2005 and
$12.00 per share in 2004. Assumed conversion results in additional common
shares (based on average balances outstanding) of approximately 344,000 in
the 2005 EPS computations and 610,000 in the 2004 computations.
(3) Returns for the quarter and six-month periods have been annualized.
(4) Noninterest expenses (excluding the provision for loan losses) as a
percentage of net interest and dividend income plus noninterest income.
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INTERVEST BANCSHARES CORPORATION
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CONSOLIDATED FINANCIAL HIGHLIGHTS
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At or For The Period Ended
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Six-Months Year Year Year Year
Ended Ended Ended Ended Ended
($in thousands, except per share amounts) June 30, Dec 31, Dec 31, Dec 31, Dec 31,
2005 2004 2003 2002 2001
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BALANCE SHEET HIGHLIGHTS:
Total assets . . . . . . . . . . . . . . . . $ 1,511,604 $1,316,751 $ 911,523 $ 686,443 $ 513,086
Asset growth rate. . . . . . . . . . . . . . 15% 44% 33% 34% 23%
Total loans, net of unearned fees. . . . . . $ 1,174,107 $1,015,396 $ 671,125 $ 489,912 $ 368,526
Loan growth rate . . . . . . . . . . . . . . 16% 51% 37% 33% 38%
Total deposits . . . . . . . . . . . . . . . $ 1,217,506 $ 993,872 $ 675,513 $ 505,958 $ 362,437
Deposit growth rate. . . . . . . . . . . . . 23% 47% 34% 40% 21%
Loans/deposits (Intervest National Bank) . . 84% 86% 79% 76% 79%
Borrowed funds and accrued interest payable. $ 163,021 $ 202,682 $ 140,383 $ 114,032 $ 100,374
Stockholders' equity . . . . . . . . . . . . $ 97,975 $ 90,094 $ 75,385 $ 53,126 $ 40,395
Common shares outstanding (1). . . . . . . . 6,279,501 6,271,433 5,988,377 4,703,087 3,899,629
Common book value per share. . . . . . . . . $ 15.60 $ 14.37 $ 12.59 $ 11.30 $ 10.36
Market price per common share. . . . . . . . $ 18.20 $ 19.74 $ 14.65 $ 10.80 $ 7.40
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ASSET QUALITY HIGHLIGHTS
Nonperforming loans. . . . . . . . . . . . . $ 750 $ 4,607 $ 8,474 $ - $ 1,243
Allowance for loan losses. . . . . . . . . . $ 12,591 $ 11,106 $ 6,580 $ 4,611 $ 3,380
Loan recoveries (2). . . . . . . . . . . . . $ - $ - $ - $ 107 $ -
Loan chargeoffs (3). . . . . . . . . . . . . $ - $ - $ - $ 150 $ -
Foreclosed real estate . . . . . . . . . . . $ - $ - $ - $ 1,081 $ -
Allowance for loan losses / net loans. . . . 1.07% 1.09% 0.98% 0.94% 0.92%
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STATEMENT OF OPERATIONS HIGHLIGHTS:
Interest and dividend income . . . . . . . . $ 43,264 $ 66,549 $ 50,464 $ 43,479 $ 35,462
Interest expense . . . . . . . . . . . . . . 25,783 38,683 28,564 26,325 24,714
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Net interest and dividend income . . . . . . 17,481 27,866 21,900 17,154 10,748
Provision for loan losses. . . . . . . . . . 1,485 4,526 1,969 1,274 612
Noninterest income . . . . . . . . . . . . . 2,887 5,140 3,321 2,218 1,655
Noninterest expenses . . . . . . . . . . . . 5,123 8,251 7,259 6,479 5,303
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Earnings before income taxes . . . . . . . . 13,760 20,229 15,993 11,619 6,488
Provision for income taxes . . . . . . . . . 5,989 8,776 6,873 4,713 2,710
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Net earnings . . . . . . . . . . . . . . . . $ 7,771 $ 11,453 $ 9,120 $ 6,906 $ 3,778
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Basic earnings per share . . . . . . . . . . $ 1.24 $ 1.89 $ 1.85 $ 1.71 $ .97
Diluted earnings per share . . . . . . . . . $ 1.15 $ 1.71 $ 1.53 $ 1.37 $ .97
Adjusted net earnings used to calculate
diluted earnings per share . . . . . . . $ 7,881 $ 11,707 $ 9,572 $ 7,342 $ 3,778
Average common shares used to calculate:
Basic earnings per share . . . . . . . . . 6,274,904 6,068,755 4,938,995 4,043,619 3,899,629
Diluted earnings per share . . . . . . . . 6,870,803 6,826,176 6,257,720 5,348,121 3,899,629
Net interest margin. . . . . . . . . . . . . 2.53% 2.52% 2.90% 2.88% 2.47%
Return on average assets (4) . . . . . . . . 1.10% 1.02% 1.19% 1.13% 0.85%
Return on average equity (4) . . . . . . . . 16.68% 14.14% 15.34% 15.56% 9.94%
Effective income tax rate. . . . . . . . . . 43.52% 43.38% 42.98% 40.56% 41.77%
Efficiency ratio (5) . . . . . . . . . . . . 25% 25% 29% 33% 43%
Full-service banking offices . . . . . . . . 6 6 6 6 6
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(1) The increase in shares in 2005 from 2004 was due to 8,068 from the exercise
of Class A common stock warrants. The increase in 2004 from 2003 was due to
42,510 from the exercise of Class A common stock warrants and 240,546 from
the conversion of debentures. The increase in 2003 from 2002 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.
(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) Returns for the six-month period are annualized.
(5) Noninterest expenses (excluding the provision for loan losses) as a
percentage of net interest and dividend income plus noninterest income.
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