Intervest Bancshares (NASDAQ:IBCA)
Historical Stock Chart
2 Years : From Jun 2011 to Jun 2013
Intervest Bancshares Corporation (NASDAQ-GS: IBCA), parent company of
Intervest National Bank, today reported its 2011 third quarter financial
results. Financial highlights follow.
-
Net earnings amounted to $2.6 million, or $0.12 per diluted common
share, for the third quarter of 2011 ("Q3-11"), compared to net
earnings of $2.5 million, or $0.12 per share, for the second quarter
of 2011 ("Q2-11'') and a net loss of $0.7 million, or $0.07 per share
for the third quarter of 2010 ("Q3-10"). Earnings before deducting
provisions for loan and real estate losses, real estate expenses,
income taxes and preferred dividend requirements were $8.9 million in
Q3-11, compared to $7.8 million in Q2-11 and $4.9 million in Q3-10.
-
The net interest margin was 2.13% for Q3-11, compared to 2.24% for
Q2-11 and 1.98% for Q3-10.
-
Nonaccrual loans and real estate owned (REO) totaled $87 million at
September 30, 2011, compared to $71 million at June 30, 2011 and $80
million at December 31, 2010. Nonaccrual loans include certain
restructured loans (TDRs) that are current and performing in
accordance with their renegotiated terms, but are classified
nonaccrual based on regulatory guidance. At September 30, 2011, such
loans totaled $37 million and were yielding 4.71%, compared to $33
million yielding 4.43% at June 30, 2011 and $21 million yielding 2.98%
at December 31, 2010.
-
The total provision for loan and real estate losses amounted to $2.9
million in Q3-11, compared to $2.0 million in Q2-11 and $4.6 million
in Q3-10. The allowance for loan losses was 2.70% of total outstanding
loans at September 30, 2011, compared to 2.54% at June 30, 2011 and
2.61% at December 31, 2010.
-
Noninterest expenses amounted to $3.6 million in Q3-11, compared to
$4.1 million in Q2-11 and $5.2 million in Q3-10. The Company's
efficiency ratio, which is a measure of its ability to control
expenses as a percentage of its revenues, improved to 29% in Q3-11,
from 35% in Q2-11 and 51% in Q3-10.
-
Intervest National Bank's regulatory capital ratios at September 30,
2011 were well above its minimum requirements and were as follows:
Tier One Leverage - 10.62%; Tier One Risk-Based - 15.28%; and Total
Risk-Based Capital - 16.54%. The Bank's minimum required capital
ratios as per its agreement with its regulator are 9%, 10% and 12%,
respectively.
-
Common book value per share increased to $7.94 at September 30, 2011.
Net earnings for Q3-11 increased by $3.3 million over Q3-10 due to the
following: a $2.0 million increase in noninterest income primarily from
loan prepayments, including $0.9 million of income from one loan; a $1.7
million decrease in the total provision for loan and real estate losses
resulting from fewer credit rating downgrades on loans and writedowns of
REO; a $1.6 million decrease in noninterest expenses reflecting
decreases of $0.8 million in FDIC insurance premiums, $0.7 million in
data processing costs and $0.2 million in professional fees; a $0.5
million decrease in real estate expenses primarily reflecting less REO
and a $0.3 million increase in net interest and dividend income (as
described below). The total of these items was partially offset by a
$2.8 million increase in income tax expense (due to pre-tax income of
$5.8 million in Q3-11 versus a $0.3 million loss in Q3-10). The
effective tax rate was 47% in Q3-11 versus 25% in Q3-10. The 2010 rate
was negatively impacted to a greater degree by a deductibility limit on
certain executive compensation resulting from IBC's participation in the
TARP program.
The increase in net interest and dividend income over Q3-10 reflected a
15 basis point improvement in the net interest margin, partially offset
by a planned decrease in the Bank's assets and liabilities as well as
decreased lending opportunities. In Q3-11 total average interest-earning
assets decreased by $82 million from Q3-10, reflecting a $155 million
decrease in loans, partially offset by an $81 million increase in
security investments. At the same time, average deposits and borrowed
funds decreased by $103 million and $15 million, respectively, while
average stockholders' equity increased by $28 million (primarily from a
common stock offering completed in October 2010). The decrease in
average assets positively impacted the Bank's regulatory capital ratios.
The higher net interest margin was attributable to lower rates paid on
deposits (particularly CDs) and the ongoing repayment of maturing
higher-cost brokered CDs and FHLB borrowings, largely offset by the
negative impact from the net decrease in the loan portfolio. Overall,
the yield on average earning assets decreased by 22 basis points to
4.74% in Q3-11, from 4.96% in Q3-10, due to the impact of payoffs of
higher yielding loans and calls of security investments due to declining
interest rates, coupled with the re-investment of a large portion of
these cash inflows into securities at lower interest rates. The average
cost of funds decreased at a faster pace by 34 basis points to 2.81% in
Q3-11, from 3.15% in Q3-10, due to the factors noted above.
Net earnings for the first nine months of 2011 amounted to $6.8 million,
or $0.32 per diluted common share, compared to a net loss of $55.4
million, or $6.39 per share for the same 2010 period. The improvement
resulted from a $105.3 million decrease in the total provision for loan
and real estate losses, a $2.7 million decrease in real estate expenses,
a $2.3 million increase in noninterest income and a $2.1 million
decrease in noninterest expenses, the total of which was partially
offset by a $2.3 million decrease in net interest and dividend income
and a $47.9 million increase in income tax expense. The net loss in the
2010 period was primarily driven by a bulk sale in May of nonperforming
and underperforming assets as discussed in prior releases. The assets
sold aggregated to $207 million and consisted of $192 million of loans
and $15 million of REO. The assets were sold at a substantial discount
to their net carrying values. As a result of this transaction, a $79
million combined provision for loan and real estate losses was recorded,
which after taxes contributed approximately $44 million, or 79%, to the
reported loss. The reasons for the changes in the other factors noted
are similar to those described earlier regarding the quarterly
variances. At September 30, 2011, the Company had a net deferred tax
asset totaling $41.1 million, which included unused net operating loss
carryforwards (NOLs) of $40 million for Federal purposes and $72 million
for state and local purposes. The NOLs, which arose from the bulk sale,
are available to reduce taxes payable on future taxable income.
Total assets at September 30, 2011 decreased to $1.99 billion from $2.07
billion at December 31, 2010, primarily reflecting a decrease in loans,
partially offset by an increase in security investments. Loans totaled
$1.20 billion at September 30, 2011, a $138 million decrease from $1.34
billion at December 31, 2010. The decrease reflected $180.1 million of
principal repayments (resulting from payoffs and amortization), $7.6
million of loan chargeoffs and $1.7 million transferred to REO,
partially offset by $50.3 million of new originations. New loan
originations for the first nine months of 2010 amounted to $46 million.
Nonaccrual loans and REO aggregated to $87 million, or 4.4% of total
assets, at September 30, 2011, compared to $80 million, or 3.9%, at
December 31, 2010. Nonaccrual loans totaled $60 million at September 30,
2011 and $53 million at December 31, 2010 and included $37 million (9
loans) and $21 million (6 loans) of performing TDRs at each date,
respectively. The increase in TDRs was primarily due to a $14.8 million
nonaccrual loan restructured in June, which included $0.5 million of
past due interest recovered as part of the settlement. The new terms
call for interest payments at 5% in year one, increasing thereafter at
predetermined amounts. All TDRs classified as nonaccrual have performed
as agreed under their renegotiated terms and interest income is being
recorded on a cash basis. In the first nine months of 2011, based on
updated appraisals received on the underlying collateral properties, we
charged off a portion ($4.7 million in principal) of five TDRs. The
borrowers remain obligated to pay all principal amounts due. The Company
does not own or originate construction/development loans.
The allowance for loan losses at September 30, 2011 was $32.4 million,
representing 2.70% of total net loans, compared to $34.8 million, or
2.61%, at December 31, 2010. The overall allowance included specific
reserves for impaired loans (comprised of all of our nonaccrual loans as
well as accruing TDRs) at each date totaling $7.2 million.
Securities held to maturity increased by $63.8 million to $678.1 million
at September 30, 2011 from $614.3 million at December 31, 2010, due to
new purchases exceeding calls and maturities. The growth in the security
investments has been a function of decreased lending opportunities. At
September 30, 2011, the portfolio, comprised mainly of U.S. government
agency debt securities, had a weighted-average yield to earliest call
date of 1.47% and a weighted-average remaining contractual maturity of
4.9 years. The Bank invests in U.S. government agency debt obligations
to emphasize safety and liquidity, and does not own or invest in
collateralized debt obligations, collateralized mortgage obligations or
derivatives.
Deposits at September 30, 2011 decreased to $1.68 billion from $1.77
billion at December 31, 2010, primarily reflecting an $89 million
decrease in CD accounts. Borrowed funds and related interest payable at
September 30, 2011 decreased to $78 million, from $85 million at
December 31, 2010, due to the maturity and repayment of $8 million of
FHLB borrowings, partially offset by a $1.7 million increase in accrued
interest payable on trust preferred securities. As required by our
regulators and as permitted by the underlying documents, since February
2010 we have suspended the payment of interest on $55 million of trust
preferred securities as well as the declaration and payment of TARP
dividends on $25 million of preferred stock held by the U.S. Treasury.
Stockholders' equity increased to $194 million at September 30, 2011
from $186 million at December 31, 2010, due to $8 million of net
earnings before preferred dividend requirements.
Intervest Bancshares Corporation (IBC) is a bank holding company. Its
principal operating subsidiary is Intervest National Bank (INB), 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 six full-service banking offices in Clearwater and
Gulfport, Florida. IBC's Common Stock is listed on the NASDAQ Global
Select Market: Trading Symbol IBCA. This release may contain
forward-looking information. Words such as "may," "will," "could,"
"should," "would," "believe," "anticipate," "estimate," "expect,"
"intend," "plan," "project," "assume," "indicate," "continue," "target,"
"goal," and similar words or expressions of the future are intended to
identify forward-looking statements. Except for historical information,
the matters discussed herein are subject to certain risks and
uncertainties that may adversely affect our business, financial
condition and results of operations. The following factors, among
others, could cause actual results to differ materially from those set
forth in forward looking statements: the regulatory agreements to which
IBC and INB are currently subject to and any operating restrictions
arising there from including availability of regulatory approvals or
waivers; changes in economic conditions and real estate values both
nationally and in our market areas; changes in our borrowing facilities,
volume of loan originations and deposit flows; changes in the levels of
our non-interest income and provisions for loan and real estate losses;
changes in the composition and credit quality of our loan portfolio;
legislative or regulatory changes, including increased expenses arising
there from; changes in interest rates which may reduce our net interest
margin and net interest income; increases in competition; technological
changes which we may not be able to implement; changes in accounting or
regulatory principles, policies or guidelines; changes in tax laws and
our ability to utilize deferred tax assets, including NOLs; and our
ability to attract and retain key members of management. Reference is
made to IBC's filings with the SEC for further discussion of risks and
uncertainties regarding our business. Historical results are not
necessarily indicative of our future prospects.
Selected Consolidated Financial Information Follows.
INTERVEST BANCSHARES CORPORATION
Selected Consolidated Financial Information
(Dollars in thousands, except per share amounts)
Quarter Ended
Nine-Months Ended
September 30,
September 30,
Selected Operating Data:
2011
2010
2011
2010
Interest and dividend income
$23,160
$ 25,265
$70,671
$82,325
Interest expense
12,729
15,180
39,016
48,385
Net interest and dividend income
10,431
10,085
31,655
33,940
Provision for loan losses
2,191
1,598
4,978
98,770
Noninterest income
2,004
7
3,334
1,037
Noninterest expenses:
Provision for real estate losses
701
2,984
1,979
13,505
Real estate expenses
121
665
1,000
3,762
All other noninterest expenses
3,578
5,163
12,087
14,182
Earnings (loss) before income taxes
5,844
(318
)
14,945
(95,242
)
Provision (benefit) for income taxes
2,771
(78
)
6,833
(41,075
)
Net earnings (loss) before preferred dividend requirements
3,073
(240
)
8,112
(54,167
)
Preferred dividend requirements (1)
435
421
1,290
1,245
Net earnings (loss) available to common stockholders
$ 2,638
$ (661
)
$ 6,822
$(55,412
)
Basic earnings (loss) per common share
$0.12
$(0.07
)
$0.32
$(6.39
)
Diluted earnings (loss) per common share
$0.12
$(0.07
)
$0.32
$(6.39
)
Average shares used for basic and diluted earnings (loss) per share
(2)
21,126,489
9,120,812
21,126,489
8,672,460
Common shares outstanding at end of period
21,126,489
9,120,812
21,126,489
9,120,812
Common stock options/warrants outstanding at end of period
1,045,422
1,018,122
1,045,422
1,018,122
Yield on interest-earning assets
4.74
%
4.96
%
4.85
%
5.14
%
Cost of funds
2.81
%
3.15
%
2.90
%
3.25
%
Net interest margin
2.13
%
1.98
%
2.17
%
2.12
%
Return on average assets (annualized)
0.60
%
-0.05
%
0.53
%
-3.23
%
Return on average common equity (annualized)
7.31
%
-0.68
%
6.54
%
-42.89
%
Effective income tax rate
47
%
25
%
46
%
43
%
Efficiency ratio (3)
29
%
51
%
35
%
41
%
Average loans outstanding
$1,228,049
$1,382,753
$1,281,126
$1,533,305
Average securities outstanding
705,291
624,197
653,943
586,284
Average short-term investments outstanding
6,179
14,690
13,204
20,973
Average assets outstanding
2,036,412
2,127,002
2,037,215
2,233,547
Average interest-bearing deposits outstanding
$1,716,529
$1,819,907
$1,720,306
$1,889,498
Average borrowings outstanding
78,148
92,801
79,678
100,671
Average stockholders' equity
192,314
164,288
189,396
192,008
At Sep 30,
At Jun 30,
At Mar 31,
At Dec 31,
At Sep 30,
Selected Financial Condition Information:
2011
2011
2011
2010
2010
Total assets
$1,991,245
$2,050,379
$2,014,125
$2,070,868
$2,104,098
Cash and short-term investments
36,798
14,461
29,079
23,911
13,815
Securities held to maturity
678,118
691,334
589,940
614,335
613,844
Loans, net of unearned fees
1,199,770
1,252,128
1,300,546
1,337,326
1,363,312
Allowance for loan losses
32,365
31,772
32,400
34,840
32,250
Allowance for loan losses/net loans
2.70
%
2.54
%
2.49
%
2.61
%
2.37
%
Deposits
1,678,003
1,735,292
1,706,630
1,766,083
1,806,834
Borrowed funds and accrued interest payable
78,156
82,634
82,072
84,676
89,135
Preferred stockholder's equity
24,141
24,045
23,948
23,852
23,755
Common stockholders' equity
170,164
167,109
164,243
162,108
140,317
Common book value per share (4)
7.94
7.81
7.69
7.61
15.26
Loan chargeoffs for the quarter
$ 1,667
$ 1,374
$ 4,513
$ 386
$ 298
Loan recoveries for the quarter
69
4
28
283
600
Real estate chargeoffs for the quarter
-
-
-
2,970
912
Security impairment writedowns for the quarter
96
-
105
351
293
Nonaccrual loans (5)
$ 59,707
$ 45,352
$ 45,192
$ 52,923
$ 38,560
Real estate owned, net of valuation allowance
27,005
25,786
27,064
27,064
38,792
Investment securities on a cash basis
4,379
4,475
4,475
2,318
2,670
Accruing troubled debt restructured (TDR) loans (6).
5,601
5,619
5,630
3,632
617
Loans 90 days past due and still accruing
8,571
4,594
3,879
7,481
16,865
Loans 31-89 days past due and still accruing
939
7,704
21,785
11,364
5,264
(1)
Represents dividend requirements on cumulative preferred stock held
by the U.S. Treasury and amortization of related preferred stock
discount.
(2)
Outstanding options/warrants were not dilutive for the reporting
periods.
(3)
Represents noninterest expenses (excluding provisions for real
estate losses & real estate expenses) as a percentage of net
interest and dividend income plus noninterest income.
(4)
Represents common stockholders' equity less preferred dividends in
arrears ($2.4 million at September 30, 2011 and $1.4 million at
December 31, 2010) divided by common shares outstanding.
(5)
Include performing TDRs maintained on nonaccrual status of $37
million, $33 million, $18 million, $21 million and $22 million,
respectively.
(6)
Represent loans whose terms have been modified mostly through the
deferral of principal and/or a partial reduction in interest
payments.
INTERVEST BANCSHARES CORPORATION
Consolidated Financial Highlights
At or For The Period Ended
($ in thousands, except per share amounts)
Nine-Months
Ended
Sep 30,
2011
Year
Ended
Dec 31,
2010
Year
Ended
Dec 31,
2009
Year
Ended
Dec 31,
2008
Year
Ended
Dec 31,
2007
Balance Sheet Highlights:
Total assets
$1,991,245
$2,070,868
$2,401,204
$2,271,833
$2,021,392
Cash and short-term investments
36,798
23,911
7,977
54,903
33,086
Securities held to maturity
678,118
614,335
634,856
475,581
344,105
Loans, net of unearned fees
1,199,770
1,337,326
1,686,164
1,705,711
1,614,032
Allowance for loan losses
32,365
34,840
32,640
28,524
21,593
Allowance for loan losses/net loans
2.70
%
2.61
%
1.94
%
1.67
%
1.34
%
Deposits
1,678,003
1,766,083
2,029,984
1,864,135
1,659,174
Borrowed funds and accrued interest payable
78,156
84,676
118,552
149,566
136,434
Preferred stockholder's equity
24,141
23,852
23,466
23,080
-
Common stockholders' equity
170,164
162,108
190,588
188,894
179,561
Common book value per share (1)
7.94
7.61
23.04
22.84
22.23
Market price per common share
2.68
2.93
3.28
3.99
17.22
Asset Quality Highlights
Nonaccrual loans
$59,707
$52,923
$123,877
$108,610
$90,756
Real estate owned, net of valuation allowance
27,005
27,064
31,866
9,081
-
Investment securities on a cash basis
4,379
2,318
1,385
-
-
Accruing troubled debt restructured loans (2)
5,601
3,632
97,311
-
-
Loans past due 90 days and still accruing
8,571
7,481
6,800
1,964
11,853
Loans past due 31-89 days and still accruing
939
11,364
5,925
18,943
25,122
Loan chargeoffs
7,554
100,146
8,103
4,227
-
Loan recoveries
101
883
1,354
-
-
Real estate chargeoffs
-
15,614
-
-
-
Impairment writedowns on security investments
201
1,192
2,258
-
-
Statement of Operations Highlights:
Interest and dividend income
$70,671
$ 107,072
$123,598
$128,497
$131,916
Interest expense
39,016
62,692
81,000
90,335
89,653
Net interest and dividend income
31,655
44,380
42,598
38,162
42,263
Provision for loan losses
4,978
101,463
10,865
11,158
3,760
Noninterest income
3,334
2,110
297
5,026
8,825
Noninterest expenses:
Provision for real estate losses
1,979
15,509
2,275
518
-
Real estate expenses
1,000
4,105
4,945
4,281
489
All other noninterest expenses
12,087
19,069
19,864
14,074
12,387
Earnings (loss) before income taxes
14,945
(93,656
)
4,946
13,157
34,452
Provision (benefit) for income taxes
6,833
(40,348
)
1,816
5,891
15,012
Net earnings (loss) before preferred dividend requirements
8,112
(53,308
)
3,130
7,266
19,440
Preferred dividend requirements (3)
1,290
1,667
1,632
41
-
Net earnings (loss) available to common stockholders
$ 6,822
$(54,975
)
$ 1,498
$ 7,225
$ 19,440
Basic earnings (loss) per common share
$0.32
$(4.95
)
$0.18
$0.87
$2.35
Diluted earnings (loss) per common share
$0.32
$(4.95
)
$0.18
$0.87
$2.31
Average common shares used to calculate:
Basic earnings (loss) per common share
21,126,489
11,101,196
8,270,812
8,259,091
8,275,539
Diluted earnings (loss) per common share
21,126,489
11,101,196
8,270,812
8,267,781
8,422,017
Common shares outstanding
21,126,489
21,126,489
8,270,812
8,270,812
8,075,812
Net interest margin (4)
2.17
%
2.11
%
1.83
%
1.79
%
2.11
%
Return on average assets
0.53
%
-2.42
%
0.13
%
0.34
%
0.96
%
Return on average common equity
6.54
%
-32.20
%
1.65
%
3.94
%
11.05
%
Effective income tax rate
46
%
43
%
37
%
45
%
44
%
Efficiency ratio (5)
35
%
41
%
46
%
33
%
24
%
(1)
Represents common stockholders' equity less preferred dividends in
arrears ($2.4 million at September 30, 2011 and $1.4 million at
December 31, 2010) divided by common shares outstanding.
(2)
Represent loans whose terms have been modified mostly through the
deferral of principal and/or a partial reduction in interest
payments.
(3)
Represents dividend requirements on cumulative preferred stock held
by the U.S. Treasury and amortization of related preferred stock
discount.
(4)
Net interest margin is reported exclusive of income from loan
prepayments, which is included as a component of noninterest income.
Inclusive of such income, the margin would compute to 2.31%, 2.18%,
1.81%, 1.95% and 2.57%, respectively.
(5)
Represents noninterest expenses (excluding provisions for real
estate losses and real estate expenses) as a percentage of net
interest and dividend income plus noninterest income.
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