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Previous: MUTUAL FUND VARIABLE ANNUITY TRUST, N-30D, 1997-05-08 |
Next: EQUITY CORP INTERNATIONAL, S-8 POS, 1997-05-08 |
- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X Quarterly report under Section 13 or 15(d) of the
- ---- Securities Exchange Act of 1934
For the quarterly period ended March 31, 1997
Transition report under Section 13 or 15(d) of the Exchange Act
- ----
For the transition period from _____________ to _____________
Commission file number 33-82246
--------
INTERVEST BANCSHARES CORPORATION
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 13-3699013
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
10 Rockefeller Plaza, Suite 1015
New York, New York 10020-1903
(Address of Principal Executive Offices)
(212)757-7300
------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days:
YES X NO
--- ---
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date;
Class A Common stock, par value $1.00 per share 900,000
- ----------------------------------------------- -----------------------------
(class) Outstanding at April 30, 1997
Class B Common stock, par value $1.00 per share 200,000
- ----------------------------------------------- -----------------------------
(class) Outstanding at April 30, 1997
- --------------------------------------------------------------------------------
CONFORMED COPY
<PAGE>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
INDEX
Part I. Financial Information
Item 1. Financial Statements Page
Condensed Consolidated Balance Sheets -
March 31, 1997 (unaudited) and December 31, 1996.......................2
Condensed Consolidated Statements of Earnings -
Three Months ended March 31, 1997 and 1996 (unaudited).................3
Condensed Consolidated Statement of Stockholders' Equity -
Three Months ended March 31, 1997 (unaudited)..........................4
Condensed Consolidated Statements of Cash Flows -
Three Months ended March 31, 1997 and 1996 (unaudited).................5
Notes to Condensed Consolidated Financial Statements (unaudited).........6
Item 2. Management's Discussion and Analysis or Plan of Operation........7-8
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K...................................9
SIGNATURES....................................................................9
1
<PAGE>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
March 31, December 31,
Assets 1997 1996
---- ----
(unaudited)
<S> <C> <C>
Cash and due from banks $ 2,694 2,868
Federal funds sold 1,114 3,452
------- -------
Total cash and cash equivalents 3,808 6,320
------- -------
Interest-bearing deposits with banks 99 99
Securities held to maturity 41,093 34,507
Loans receivable, net 64,746 59,499
Accrued interest receivable 975 842
Premises and equipment, net 3,367 2,940
Restricted securities, Federal Reserve Bank stock, at cost 203 203
Foreclosed real estate 177 185
Deferred income tax asset 487 526
Other assets 130 75
-------- --------
Total $ 115,085 105,196
========= =======
Liabilities and Stockholders' Equity
Deposits:
Demand deposits 2,386 2,401
Savings and NOW deposits 11,105 9,278
Money market deposits 13,694 7,507
Other time deposits 76,254 74,261
------- -------
Total deposits 103,439 93,447
Other liabilities 1,406 1,676
------- -------
Total liabilities 104,845 95,123
------- -------
Minority interest 333 326
-------- --------
Stockholders' Equity:
Class A common stock 900 900
Class B common stock 200 200
Additional paid-in capital 7,655 7,655
Retained earnings 1,152 992
-------- --------
Total stockholders' equity 9,907 9,747
-------- --------
Total $ 115,085 105,196
========= =======
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
2
<PAGE>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of Earnings
(Dollars in thousands, except per share figures)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
---- ----
(unaudited)
Interest income:
<S> <C> <C>
Loans receivable $ 1,434 975
Securities held to maturity 598 336
Other interest earning assets 53 66
----------- -----------
Total interest income 2,085 1,377
---------- ----------
Interest expense-
Deposits 1,309 788
---------- ----------
Net interest income 776 589
Provision for loan losses 92 73
---------- -----------
Net interest income after provision for loan losses 684 516
---------- ----------
Noninterest income:
Customer service charges 27 21
Other 4 9
---------- -----------
Total noninterest income 31 30
---------- -----------
Noninterest expenses:
Salaries and employee benefits 216 171
Occupancy and equipment 90 89
Advertising and promotion 11 2
Professional fees 40 42
Deposit insurance premiums 2 1
Other 102 56
---------- -----------
Total noninterest expenses 461 361
---------- -----------
Earnings before income taxes 255 185
Income taxes 94 75
---------- -----------
Net earnings $ 160 110
========== ==========
Earnings per share $ .15 .10
========== ===========
Weighted average number of shares outstanding 1,100,000 1,100,000
========= =========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
Condensed Consolidated Statement of Stockholders' Equity
For the Three-Month Period Ended March 31, 1997
(In thousands)
<TABLE>
<CAPTION>
Class A Class B Additional Total
Common Common Paid-In Retained Stockholders'
Stock Stock Capital Earnings Equity
----- ----- ------- -------- ------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1996 $ 900 200 7,655 992 9,747
Net earnings for the three months
ended March 31, 1997
(unaudited) - - - 160 160
----- --- ----- ----- -----
Balance at March 31, 1997
(unaudited) $ 900 200 7,655 1,152 9,907
===== === ===== ===== =====
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements
4
<PAGE>
<TABLE>
<CAPTION>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
(In thousands)
Three Months Ended
March 31,
1997 1996
---- ----
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 160 110
Adjustments to reconcile net earnings to net cash provided by
(used in) operating activities:
Depreciation 53 60
Decrease in deferred income tax asset 39 75
Increase in other assets (55) (16)
(Decrease) increase in other liabilities (263) 700
Increase in accrued interest receivable (133) (12)
Net amortization of fees, premiums and discounts 8 96
Write-down of foreclosed real estate 8 --
Provision for loan losses 92 73
-------- --------
Net cash (used in) provided by operating activities (91) 1,086
-------- --------
Cash flows from investing activities:
Purchase of securities held to maturity (13,600) (6,174)
Maturities of securities held to maturity 7,025 4,500
Maturity of interest-bearing deposits -- 199
Net purchases of premises and equipment (480) (96)
Net increase in loans (5,358) (5,454)
-------- --------
Net cash used in investing activities (12,413) (7,025)
-------- --------
Cash flows from financing activities:
Net increase in demand, savings, NOW and money
market deposits 7,999 2,016
Net increase in time deposits 1,993 941
-------- --------
Net cash provided by financing activities 9,992 2,957
-------- --------
Net decrease in cash and cash equivalents (2,512) (2,982)
Cash and cash equivalents at beginning of period 6,320 8,551
-------- --------
Cash and cash equivalents at end of period $ 3,808 5,569
======== ========
Supplemental disclosure of cash flow information: Cash paid during the period
for:
Interest $ 1,303 810
======== ========
Income taxes $ 352 1
======== ========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
Notes to Condensed Consolidated Financial Statements (unaudited)
1. General. In the opinion of the management of Intervest Bancshares
Corporation (the "Holding Company"), the accompanying condensed
consolidated financial statements contain all adjustments (consisting
principally of normal recurring accruals) necessary to present fairly the
financial position at March 31, 1997, and the results of operations and
cash flows for the three-month periods ended March 31, 1997 and 1996. The
results of operations for the three months ended March 31, 1997 are not
necessarily indicative of the results to be expected for the full year.
The Holding Company's condensed consolidated financial statements include
the accounts of its majority-owned subsidiary, Intervest Bank (the "Bank")
(collectively the "Company"). The Holding Company's primary business
activity is the ownership of the Bank. All intercompany accounts and
transactions have been eliminated in consolidation.
2. Loan Impairment and Credit Losses. No loans were identified as impaired
during the three-month periods ended March 31, 1997 or 1996. The activity
in the allowance for loan losses is as follows (in thousands):
For the Three
Months Ended
March 31,
1997 1996
------------
Balance at beginning of period $811 593
Provision charged to earnings 92 73
Recoveries, net of charge offs 3 11
---- ----
Balance at end of period $906 677
==== ====
3. Earnings Per Common Share. Earnings per common share were computed by
dividing the net earnings for the period by the weighted-average number of
shares outstanding. The effect of the outstanding warrants was not
material.
4. Regulatory Capital. The Bank is required to maintain certain minimum
regulatory capital requirements. The following is a summary at March 31,
1997 of the regulatory capital requirements and the Bank's capital on a
percentage basis:
Ratios of Regulatory
the Bank Requirement
Total capital to risk-weighted assets 11.07% 8.00%
Tier I capital to risk-weighted assets 9.88% 4.00%
Tier I capital to total assets - leverage ratio 6.81% 4.00%
5. Impact of New Accounting Principle. On January 1, 1997, the Company
adopted Statement of Financial Accounting Standards No. 125 "Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities" ("SFAS 125") which provides accounting and reporting
standards for transfers and servicing of financial assets and
extinguishments of liabilities. This Statement also provides consistent
standards for distinguishing transfers of financial assets that are sales
from transfers that are secured borrowings. SFAS 125 is effective for
transfers and servicing of financial assets and extinguishments of
liabilities occurring after December 31, 1996. The adoption of SFAS 125
has no effect on the Company's financial statements during the three-month
period ended March 31, 1997.
6
<PAGE>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
Item 2. Management's Discussion and Analysis
or Plan of Operation
Comparison of March 31, 1997 and December 31, 1996
Liquidity and Capital Resources
The Company's primary source of cash during the three months ended
March 31, 1997 was from the maturity of securities totaling $7.0
million and net deposit inflows of $10.0 million. Cash was used
primarily for net loan originations of $5.4 million and the purchase of
securities totaling $13.6 million. At March 31, 1997, the Company had
outstanding commitments to originate loans of $3.5 million. It is
expected that these requirements will be funded from the sources
described above. At March 31, 1997, the Bank exceeded its regulatory
liquidity requirements.
The following table shows selected ratios for the periods ended or at
the dates indicated:
<TABLE>
<CAPTION>
Three Months Three Months
Ended Year Ended Ended
March 31, December 31, March 31,
1997 1996 1996
-------------- --------------- ---------
<S> <C> <C> <C>
Average equity as a percentage
of average assets 8.95% 11.29% 12.73%
Equity to total assets at end of period 8.61% 9.27% 12.79%
Return on average assets (1) .57% .67% .61%
Return on average equity (1) 6.32% 5.91% 4.76%
Noninterest expense to average assets (1) 1.63% 1.85% 1.99%
Nonperforming loans and foreclosed real estate to
total assets at end of period .15% .18% - %
(1) Annualized for the three months ended March 31, 1997 and 1996.
</TABLE>
7
<PAGE>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
Comparison of the Quarters Ended March 31, 1997 and 1996
Results of Operations:
General. Net earnings for the three months ended March 31, 1997 were $160,000
or $.15 per share compared to net earnings of $110,000 or $.10 per
share for the three months ended March 31, 1996. This increase in the
Company's net earnings was primarily due to an increase in net interest
income, partially offset by an increase in noninterest expenses.
Interest Income and Expense. Interest income increased by $708,000 from $1.4
million for the three months ended March 31, 1996 to $2.1 million for
the three months ended March 31, 1997. Interest income on loans
increased $459,000 primarily due to an increase in the average loan
portfolio balance for the three months ended March 31, 1997 to $63.4
million compared to $39.4 million during the 1996 period. Interest on
securities increased $262,000 primarily due to an increase in the
average securities portfolio during the three months ended March 31,
1997 to $40.7 million from $22.7 million during the 1996 period.
Interest on other interest-earning assets decreased $13,000 due to a
decrease in the average balance of other interest earning assets from
1996 to 1997.
Interest expense on deposit accounts increased to $1.3 million for the
three months ended March 31, 1997 from $788,000 for the three months
ended March 31, 1996. Interest expense increased due to an increase in
the average balance partially offset by a decrease in the weighted
average rate from 1996 to 1997. The average balance for the three
months ended March 31, 1997 was $98.5 million compared to $58.0 million
during 1996 and the weighted average rate was 5.3% in 1997 compared to
5.5% in 1996.
Provision for Loan Losses. The provision for loan losses is charged to
earnings to bring the total allowance to a level deemed appropriate by
management and is based upon historical experience, the volume and type
of lending conducted by the Company, industry standards, the amount of
nonperforming loans, general economic conditions, particularly as they
relate to the Company's market areas, and other factors related to the
collectibility of the Company's loan portfolio. The provision increased
from $73,000 for the three months ended March 31, 1996 to $92,000 for
the three months ended March 31, 1997. The increase was deemed
appropriate by management due to the growth in the loan portfolio
during the three months ended March 31, 1997.
Noninterest Expenses. Total noninterest expenses increased $100,000 to
$461,000 for the three months ended March 31, 1997 from $361,000 for
the three months ended March 31, 1996, primarily due to an increase in
employee compensation and benefits and other expenses associated with
the growth of the Company.
Provision for Income Taxes. The income tax provision for the three months
ended March 31, 1997 was $94,000 (an effective rate of 36.9%) compared
to $75,000 (an effective rate of 40.5%) for the comparable 1996 period.
8
<PAGE>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
There were no reports on Form 8-K filed for the three months ended March 31,
1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERVEST BANCSHARES CORPORATION
AND SUBSIDIARY
(Registrant)
Date: May 8, 1997 By: /s/ Lowell S. Dansker
------------------------ ----------------------
Lowell S. Dansker,
President and Treasurer
(Chief Financial Officer)
Date: May 8, 1997 By: /s/ Lawrence G. Bergman
---------------------- ------------------------
Lawrence G. Bergman,
Vice President and Secretary
9
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,694
<INT-BEARING-DEPOSITS> 99
<FED-FUNDS-SOLD> 1,114
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 41,093
<INVESTMENTS-MARKET> 40,813
<LOANS> 41,999
<ALLOWANCE> 906
<TOTAL-ASSETS> 115,085
<DEPOSITS> 103,439
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,739
<LONG-TERM> 0
0
0
<COMMON> 1,100
<OTHER-SE> 8,807
<TOTAL-LIABILITIES-AND-EQUITY> 115,085
<INTEREST-LOAN> 1,434
<INTEREST-INVEST> 598
<INTEREST-OTHER> 53
<INTEREST-TOTAL> 2,085
<INTEREST-DEPOSIT> 1,309
<INTEREST-EXPENSE> 1,309
<INTEREST-INCOME-NET> 776
<LOAN-LOSSES> 92
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 461
<INCOME-PRETAX> 255
<INCOME-PRE-EXTRAORDINARY> 255
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 160
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
<YIELD-ACTUAL> 7.78
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 811
<CHARGE-OFFS> 0
<RECOVERIES> 3
<ALLOWANCE-CLOSE> 906
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
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