EXHIBIT 99.1
(BW) (INTERVEST-BANCSHARES) (IBCA)
INTERVEST BANCSHARES CORPORATION
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REPORTS 2006 FIRST QUARTER EARNINGS DOUBLE TO $6.4 MILLION
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Business Editors - New York - (Business Wire - April 12, 2006)
Intervest Bancshares Corporation (NASDAQ: IBCA) (the "Company") today
reported that its consolidated net earnings for the first quarter of 2006
increased by $3.2 million, or 100%, to $6.4 million, or $0.77 per diluted share,
from $3.2 million, or $0.48 per diluted share, in the first quarter of 2005. The
earnings per share calculation for the 2006 period included a greater number of
outstanding shares resulting primarily from a public offering of 1.4 million
shares of Class A common stock in the third quarter of 2005.
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 and
improved to 19% in the first quarter of 2006, from 26% in the first quarter of
2005. The Company's return on average assets and equity also increased to 1.47%
and 18.55%, respectively, in the 2006 first quarter, from 0.94% and 14.25% in
the 2005 first quarter. The Company's book value per common share rose to $18.22
at March 31, 2006, from $17.41 at December 31, 2005.
The increase in 2006 first quarter earnings of $3.2 million reflected the
continued growth in the Company's lending activities and an improvement in its
net interest margin. Net interest and dividend income, the Company's primary
source of revenues, grew by 51% or $4.2 million, reflecting a $321 million
increase in average loans outstanding and a higher net interest margin. In a
steadily rising interest rate environment, the Company's net interest margin
improved to 2.92% in the 2006 first quarter, from 2.47% in the 2005 first
quarter, as the yield on the Company's interest-earning assets increased at a
faster pace than its cost of funds. Noninterest income increased by $1.2 million
primarily due to a higher level of income from loan prepayments, while the
provision for loan losses decreased by $0.7 million primarily due to a decrease
in the rate of net loan growth over the prior year period. The increases in
income and the lower provision for loan losses were partially offset by a $2.5
million increase in income tax expense due to higher pretax income and a $0.4
million increase in noninterest expenses primarily due to increases in the
Company's staff and its other operating expenses associated with the Company's
growth. The Company had 76 employees at March 31, 2006, compared to 67 at March
31, 2005. The Company's effective income tax rate was approximately 44% for both
reporting periods.
Total consolidated assets at March 31, 2006 increased by 5% to $1.79
billion from $1.71 billion at December 31, 2005. The increase reflected the
growth in the Company's loan portfolio and a higher level of security
investments, partially offset by a decrease in other short-term investments.
Total consolidated loans, net of unearned fees, at March 31, 2006 increased
by 2% to $1.40 billion from $1.37 billion at December 31, 2005. The increase was
due to new mortgage loan originations secured by commercial and multifamily real
estate exceeding principal repayments. New loan originations totaled $144
million for the first quarter of 2006, compared to $151 million for the same
period of 2005.
Total consolidated security investments at March 31, 2006 increased 30% to
$334.3 million from $256.7 million at December 31, 2005. The investment
portfolio at March 31, 2006, all of which was held by Intervest National Bank,
had a weighted-average remaining maturity of 1.4 years and a yield of 3.88%,
compared to 1.1 years and a yield of 3.26% at December 31, 2005. Intervest
National Bank invests in short-term U.S. government agency debt obligations to
emphasize liquidity and currently targets its loan-to-deposit ratio at
approximately 85%.
Total consolidated cash and other short-term investments at March 31, 2006
decreased by 51% to $27.8 million from $56.7 million at December 31, 2005. The
decrease reflected the investment of funds into loans and securities.
Total consolidated deposits at March 31, 2006 increased by 4% to $1.43
billion from $1.38 billion at December 31, 2005, reflecting an increase in
certificate of deposit accounts of $34 million and a net increase in checking,
savings and money market accounts totaling $21 million.
Total consolidated borrowed funds and related interest payable at March 31,
2006 increased by 15% to $178.5 million from $155.7 million at December 31,
2005. The increase was due to $23.5 million of short-term borrowings from the
Federal Home Loan Bank of New York by Intervest National Bank.
Total consolidated stockholders' equity at March 31, 2006 increased by 5%
to $142.8 million from $136.2 million at December 31, 2005. The increase
reflected net earnings of $6.4 million and $0.2 million from the conversion of
convertible debentures into common stock.
Intervest Bancshares Corporation is a 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.
Additionally, Intervest National Bank has received regulatory permission to
open an additional branch office at 483 Mandalay Avenue in Clearwater Beach,
Florida. The Bank expects to complete renovations and open the office by August
1, 2006.
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
(Dollars in thousands, except per share amounts) MARCH 31,
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2006 2005
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SELECTED OPERATING DATA:
Interest and dividend income. . . . . . . . . . . . . . . . . $ 30,066 $ 20,568
Interest expense. . . . . . . . . . . . . . . . . . . . . . . 17,580 12,283
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Net interest and dividend income. . . . . . . . . . . . . . . 12,486 8,285
Provision for loan losses . . . . . . . . . . . . . . . . . . 361 1,033
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Net interest and dividend income
after provision for loan losses. . . . . . . . . . . . . 12,125 7,252
Noninterest income. . . . . . . . . . . . . . . . . . . . . . 2,082 878
Noninterest expenses. . . . . . . . . . . . . . . . . . . . . 2,796 2,374
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Earnings before income taxes. . . . . . . . . . . . . . . . . 11,411 5,756
Provision for income taxes. . . . . . . . . . . . . . . . . . 4,991 2,508
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NET EARNINGS. . . . . . . . . . . . . . . . . . . . . . . . . $ 6,420 $ 3,248
========================
BASIC EARNINGS PER SHARE. . . . . . . . . . . . . . . . . . . $ 0.82 $ 0.52
DILUTED EARNINGS PER SHARE. . . . . . . . . . . . . . . . . . $ 0.77 $ 0.48
Adjusted net earnings for diluted earnings per share (1). . . $ 6,460 $ 3,303
Weighted-average common shares and common
equivalent shares outstanding for computing:
Basic earnings per share. . . . . . . . . . . . . . . . . 7,825,746 6,273,843
Diluted earnings per share (2). . . . . .. . . . . . . . 8,346,783 6,871,769
Common shares outstanding at end of period. . . . . . . . . . 7,837,642 6,273,843
Common stock warrants outstanding at end of period. . . . . . 696,465 696,465
Yield on interest-earning assets. . . . . . . . . . . . . . . 7.04% 6.12%
Cost of funds . . . . . . . . . . . . . . . . . . . . . . . . 4.55% 3.98%
Net interest margin . . . . . . . . . . . . . . . . . . . . . 2.92% 2.47%
Return on average assets (3). . . . . . . . . . . . . . . . . 1.47% 0.94%
Return on average equity (3). . . . . . . . . . . . . . . . . 18.55% 14.25%
Effective income tax rate . . . . . . . . . . . . . . . . . . 43.74% 43.57%
Efficiency ratio (4). . . . . . . . . . . . . . . . . . . . . 19% 26%
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AT AT AT AT AT
-- -- -- -- --
MAR 31, DEC 31, SEP 30, JUN 30, MAR 31,
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SELECTED FINANCIAL CONDITION INFORMATION: 2006 2005 2005 2005 2005
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Total assets . . . . . . . . . . . . . . . . . . . . . $1,790,524 $1,706,423 $1,630,845 $1,511,604 $1,427,439
Total cash and short-term investments. . . . . . . . . $ 27,831 $ 56,716 $ 43,023 $ 75,197 $ 49,347
Total securities held to maturity. . . .. . . . . . . $ 327,974 $ 251,508 $ 237,724 $ 231,630 $ 254,754
Total FRB and FHLB stock . . . . . . . . . . . . . . . $ 6,299 $ 5,241 $ 6,118 $ 5,983 $ 5,092
Total loans, net of unearned fees. . . . . . . . . . . $1,402,008 $1,367,986 $1,319,155 $1,174,107 $1,095,161
Total deposits . . . . . . . . . . . . . . . . . . . . $1,429,681 $1,375,330 $1,302,309 $1,217,506 $1,123,657
Total borrowed funds and accrued interest payable. . . $ 178,480 $ 155,725 $ 160,491 $ 163,021 $ 177,995
Total stockholders' equity . . . . .. . . . . . . . . $ 142,828 $ 136,178 $ 129,207 $ 97,975 $ 93,376
Total allowance for loan losses. . . . . . . . . . . . $ 15,542 $ 15,181 $ 14,394 $ 12,591 $ 12,139
Total loans ninety days past due and still accruing. . $ 1,505 $ 2,649 $ 2,672 $ 2,672 $ -
Total nonperforming loans. . . . . . . . . . . . . . . $ 1,725 $ 750 $ 750 $ 750 $ 4,607
Total loan chargeoffs. . . . . . . . . . . . . . . . . $ - $ - $ - $ - $ -
Book value per common share. . . . . . . . . . . . . . $ 18.22 $ 17.41 $ 16.69 $ 15.60 $ 14.88
Allowance for loan losses / net loans. . . . . . . . . 1.11% 1.11% 1.09% 1.07% 1.11%
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<FN>
(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 March 31, 2006 and 2005 totaling $3,306,000
and $4,798,000, respectively, were convertible into common stock at a price of $16.00 per share in 2006 and $14.00
per share in 2005. Assumed conversion results in additional common shares (based on average balances outstanding)
of approximately 212,000 in the 2006 EPS computation and 343,000 in the 2005 EPS computation.
(3) Returns for the quarter have been annualized.
(4) Represents noninterest expenses (excluding the provision for loan losses) as a percentage of net interest and
dividend income plus noninterest income.
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INTERVEST BANCSHARES CORPORATION
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CONSOLIDATED FINANCIAL HIGHLIGHTS
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At or For The Period Ended
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Quarter Year Year Year Year
Ended Ended Ended Ended Ended
($in thousands, except per share amounts) Mar 31, Dec 31, Dec 31, Dec 31, Dec 31,
2006 2005 2004 2003 2002
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BALANCE SHEET HIGHLIGHTS:
Total assets . . . . . . . . . . . . . . . . . $1,790,524 $1,706,423 $1,316,751 $ 911,523 $ 686,443
Asset growth rate. . . . . . . . . . . . . . . 5% 30% 44% 33% 34%
Total loans, net of unearned fees. . . . . . . $1,402,008 $1,367,986 $1,015,396 $ 671,125 $ 489,912
Loan growth rate . . . . . . . . . . . . . . . 2% 35% 51% 37% 33%
Total deposits . . . . . . . . . . . . . . . . $1,429,681 $1,375,330 $ 993,872 $ 675,513 $ 505,958
Deposit growth rate. . . . . . . . . . . . . . 4% 38% 47% 34% 40%
Loans/deposits (Intervest National Bank) . . . 87% 88% 86% 79% 76%
Borrowed funds and accrued interest payable. . $ 178,480 $ 155,725 $ 202,682 $ 140,383 $ 114,032
Stockholders' equity . . . . . . . . . . . . . $ 142,828 $ 136,178 $ 90,094 $ 75,385 $ 53,126
Common shares outstanding (1). . . . . . . . . 7,837,642 7,823,058 6,271,433 5,988,377 4,703,087
Common book value per share. . . . . . . . . . $ 18.22 $ 17.41 $ 14.37 $ 12.59 $ 11.30
Market price per common share. . . . . . . . . $ 36.14 $ 24.04 $ 19.74 $ 14.65 $ 10.80
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ASSET QUALITY HIGHLIGHTS
Nonperforming loans. . . . . . . . . . . . . . $ 1,725 $ 750 $ 4,607 $ 8,474 $ -
Allowance for loan losses. . . . . . . . . . . $ 15,542 $ 15,181 $ 11,106 $ 6,580 $ 4,611
Loans ninety days past due and still accruing. $ 1,505 $ 2,649 $ - $ - $ -
Loan recoveries (2). . . . . . . . . . . . . . $ - $ - $ - $ - $ 107
Loan chargeoffs (3). . . . . . . . . . . . . . $ - $ - $ - $ - $ 150
Foreclosed real estate . . . . . . . . . . . . $ - $ - $ - $ - $ 1,081
Allowance for loan losses / net loans. . . . . 1.11% 1.11% 1.09% 0.98% 0.94%
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STATEMENT OF OPERATIONS HIGHLIGHTS:
Interest and dividend income . . . . . . . . . $ 30,066 $ 97,881 $ 66,549 $ 50,464 $ 43,479
Interest expense . . . . . . . . . . . . . . . 17,580 57,447 38,683 28,564 26,325
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Net interest and dividend income . . . . . . . 12,486 40,434 27,866 21,900 17,154
Provision for loan losses. . . . . . . . . . . 361 4,075 4,526 1,969 1,274
Noninterest income . . . . . . . . . . . . . . 2,082 6,594 5,140 3,321 2,218
Noninterest expenses . . . . . . . . . . . . . 2,796 10,703 8,251 7,259 6,479
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Earnings before income taxes . . . . . . . . . 11,411 32,250 20,229 15,993 11,619
Provision for income taxes . . . . . . . . . . 4,991 14,066 8,776 6,873 4,713
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Net earnings . . . . . . . . . . . . . . . . . $ 6,420 $ 18,184 $ 11,453 $ 9,120 $ 6,906
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Basic earnings per share . . . . . . . . . . . $ 0.82 $ 2.65 $ 1.89 $ 1.85 $ 1.71
Diluted earnings per share . . . . . . . . . . $ 0.77 $ 2.47 $ 1.71 $ 1.53 $ 1.37
Adjusted net earnings used to calculate
diluted earnings per share . . . . . . . $ 6,460 $ 18,399 $ 11,707 $ 9,572 $ 7,342
Average common shares used to calculate:
Basic earnings per share . . . . . . . . . 7,825,746 6,861,887 6,068,755 4,938,995 4,043,619
Diluted earnings per share . . . . . . . . 8,346,783 7,449,658 6,826,176 6,257,720 5,348,121
Net interest margin. . . . . . . . . . . . . . 2.92% 2.70% 2.52% 2.90% 2.88%
Return on average assets . . . . . . . . . . . 1.47% 1.20% 1.02% 1.19% 1.13%
Return on average equity . . . . . . . . . . . 18.55% 16.91% 14.14% 15.34% 15.56%
Effective income tax rate. . . . . . . . . . . 43.74% 43.62% 43.38% 42.98% 40.56%
Efficiency ratio (4) . . . . . . . . . . . . . 19% 23% 25% 29% 33%
Full-service banking offices . . . . . . . . . 6 6 6 6 6
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<FN>
(1) The increase of 14,584 shares in the quarter ended March 31, 2006 was from the conversion of convertible
debentures into Class A common stock. The increase in shares in 2005 from 2004 was due to 1,436,468 from a
public offering of Class A common stock and 115,157 from the conversion of convertible debentures into
Class A common stock. 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 convertible 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.
(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) Noninterest expenses (excluding the provision for loan losses) as a percentage of net interest and
dividend income plus noninterest income.
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