Intervest Bancshares Corporation (NASDAQ-GS: IBCA), parent
company of Intervest National Bank, today reported its financial
results for the first quarter of 2012. Financial highlights
follow.
- Net earnings for the first quarter of
2012 ("Q1-12") increased to $2.8 million, or $0.13 per diluted
common share, from $1.7 million, or $0.08 per share, for the first
quarter of 2011 ("Q1-11").
- Earnings before deducting provisions
for loan and real estate losses, real estate expenses, income taxes
and preferred dividend requirements increased to $6.9 million in
Q1-12, from $6.3 million in Q1-11.
- Provisions for loan and real estate
losses decreased to $0.5 million in Q1-12, from $2.0 million in
Q1-11. The allowance for loan losses amounted to $29.2 million at
March 31, 2012 and represented 2.52% of total outstanding
loans.
- Net interest and dividend income
decreased to $10.0 million in Q1-12, from $10.4 million in Q1-11,
while the net interest margin improved slightly to 2.16% in Q1-12,
from 2.14% in Q1-11. New loan originations for Q1-12 increased to
$50 million, from $7 million in Q1-11.
- Noninterest expenses decreased to $4.2
million in Q1-12, from $4.4 million in Q1-11. The efficiency ratio
(which measures the Company's ability to control expenses as a
percentage of revenues) continued to be excellent and was 38% in
Q1-12, compared to 41% in Q1-11.
- Nonaccrual loans and real estate owned
(REO) totaled $81 million at March 31, 2012, compared to $86
million at December 31, 2011. Nonaccrual loans include certain
restructured loans (TDRs) that are current as to payments and
performing in accordance with their renegotiated terms, but are
required to be classified nonaccrual based on regulatory guidance.
At March 31, 2012, such loans totaled $44 million compared to $46
million at December 31, 2011 and they were yielding approximately
5%.
- Intervest National Bank's regulatory
capital ratios continued to increase and be well above its minimum
requirements. At March 31, 2012, its actual capital ratios were as
follows: Tier One Leverage - 11.73%; Tier One Risk-Based - 16.88%;
and Total Risk-Based Capital - 18.14%, compared to its minimum
requirements of 9%, 10% and 12%, respectively. The Bank's Tier 1
capital amounted to $225 million and was $52 million in excess of
the required minimum for its Tier One Leverage ratio.
- Book value per common share was $8.04
at March 31, 2012, compared to $8.07 at December 31, 2011,
reflecting increased common shares outstanding from restricted
stock awards made to directors and employees in Q1-12 under the
Company's Long Term Incentive Plan.
Net earnings for Q1-12 increased by $1.1 million over Q1-11 due
to the following: a $1.5 million decrease in the total provision
for loan and real estate losses (resulting from fewer credit rating
downgrades on loans); a $0.8 million increase in noninterest income
(reflecting primarily higher income from loan prepayments) and a
$0.2 million decrease in noninterest expenses (reflecting primarily
a $0.5 million decrease in FDIC premiums, partially offset by a
$0.3 million aggregate increase in salaries, benefits and stock
compensation expense). The total of these items was partially
offset by a $0.9 million increase in income tax expense (due to
higher pre-tax income); a $0.4 million decrease in net interest and
dividend income (as described below) and a $0.1 million increase in
real estate expenses. The effective income tax rate was 45% in both
quarterly periods.
The decrease in net interest and dividend income in Q1-12
compared to Q1-11 reflected a planned reduction in the size of the
Bank's balance sheet as well as fewer suitable lending
opportunities during the period. In Q1-12, total average
interest-earning assets decreased by $110 million from Q1-11,
reflecting a $164 million decrease in average loans, partially
offset by a $54 million net increase in average security and
overnight investments. At the same time, average deposits and
borrowed funds decreased by $101 million and $11 million,
respectively, while average stockholders' equity increased by $12
million. The reduction in the balance sheet positively impacted the
Bank's regulatory capital ratios. The slightly higher net interest
margin was attributable to lower rates paid on deposit accounts and
the run off of higher-cost CDs and borrowings, largely offset by
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 new securities and loans
at lower market interest rates. Overall, the average cost of funds
decreased by 42 basis points to 2.54% in Q1-12, from 2.96% in
Q1-11, while the average yield on earning assets decreased at a
slower pace by 38 basis points to 4.50% in Q1-12, from 4.88% in
Q1-11.
Total assets at March 31, 2012 decreased to $1.91 billion from
$1.97 billion at December 31, 2011, primarily reflecting a decrease
in security investments, partially offset by an increase in cash
and short-term investments.
Cash and short-term investments increased to $90 million at
March 31, 2012 from $30 million at December 31, 2011. This category
will fluctuate based on various factors, including liquidity needs,
loan demand, deposit flows, calls of securities, repayments of
borrowed funds and alternative investment opportunities. The Bank
expects to utilize a large portion of the balance to fund new loans
over the next several quarters. At March 31, 2012, the Bank had $41
million of potential new real estate loans in its origination
pipeline.
Securities held to maturity decreased by $109 million to $591
million at March 31, 2012 from $700 million at December 31, 2011,
reflecting calls of securities exceeding new purchases. A portion
of the proceeds was used to fund planned deposit outflow and a
portion was being held temporarily in cash and short-term
investments as denoted above. At March 31, 2012, the securities
portfolio, which represented 31% of total assets and was comprised
almost all of U.S. government agency debt securities, had a
weighted-average yield to earliest call date of 1.36% and a
weighted-average remaining contractual maturity of 4.8 years. The
Bank invests primarily in U.S. government agency debt obligations
to emphasize safety and liquidity. In March 2012, the Bank also
began purchasing residential mortgage-backed pass through
securities issued by GNMA, FNMA and FHLMC in an effort to increase
the overall yield on its investment portfolio.
Loans totaled $1.15 billion at March 31, 2012, compared to $1.16
billion at December 31, 2011. The decrease reflected $45 million of
payoffs and $12 million of amortization and $1.4 million of
chargeoffs, partially offset by $50 million of new loans. Loans
paid off during Q1-12 had a weighted-average yield of 6.31%. New
loans, nearly all with fixed interest rates, had a weighted-average
yield, term and loan-to-value ratio of approximately 5%, 5 years
and 60%, respectively.
Nonaccrual loans and REO aggregated to $81 million, or 4.2% of
total assets, at March 31, 2012, compared to $86 million, or 4.3%,
at December 31, 2011. Nonaccrual loans totaled $53 million at March
31, 2012 and $57 million at December 31, 2011 and included $44
million (12 loans) and $46 million (12 loans) of TDRs that were
current at each date, respectively. All the TDRs classified as
nonaccrual have performed as agreed under their renegotiated terms
and interest income is being recorded on a cash basis. During
Q1-12, based on annual updated appraisals received on the
underlying collateral properties, a portion of three of the above
TDRs (or $1.4 million of aggregate principal) was charged off for
financial statement purposes. The borrowers remain obligated to pay
all contractual principal due on the TDRs.
The allowance for loan losses at March 31, 2012 was $29.2
million, representing 2.52% of total net loans, compared to $30.4
million, or 2.61%, at December 31, 2011. The allowance included
specific reserves for impaired loans (comprised of all nonaccrual
loans as well as accruing TDRs) at each date totaling $7 million
and $8 million, respectively.
At March 31, 2012, the Company had a deferred tax asset totaling
$36.3 million, which included remaining unused NOL and AMT credit
carryforwards totaling $32 million for Federal tax purposes and $63
million for State and Local tax purposes. These carryforwards are
available to reduce taxes payable on the Company's future taxable
income.
Deposits at March 31, 2012 decreased to $1.60 billion from $1.66
billion at December 31, 2011, primarily reflecting a $60 million
decrease in CD accounts, of which $16.5 million were brokered.
Borrowed funds and related interest payable at March 31, 2012
decreased to $72.1 million, from $78.6 million at December 31,
2011, due to the maturity and repayment of $7 million of FHLB
borrowings, partially offset by a $0.5 million increase in accrued
interest payable on trust preferred securities (TRUPs). Since
February 2010, as required by its regulator and as permitted by the
underlying documents, the Company has suspended the payment of
interest on $55 million of its debt in the form of TRUPs 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 $201 million at March 31, 2012 from $198 million at
December 31, 2011, primarily due to $3.3 million of net earnings
before preferred dividend requirements.
Intervest Bancshares Corporation (IBC) is a bank holding
company. Its 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 therefrom 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 therefrom; 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 our deferred tax asset, including NOL and AMT
carryforwards; 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 March 31,
Selected Operating Data: 2012
2011
Interest and dividend income $20,698 $ 23,594 Interest
expense 10,740 13,243 Net interest and
dividend income 9,958 10,351 Provision for loan losses - 2,045
Noninterest income 1,125 323 Noninterest expenses: Provision for
real estate losses 511 - Real estate expenses 460 325 All other
noninterest expenses 4,164 4,410 Earnings
before income taxes 5,948 3,894 Provision for income taxes 2,694
1,741 Net earnings before preferred dividend
requirements 3,254 2,153 Preferred dividend requirements (1) 444
427 Net earnings available to common
stockholders $ 2,810 $ 1,726 Basic earnings
per common share $0.13 $0.08 Diluted earnings per common share
$0.13 $0.08 Average shares used for
basic and diluted earnings per share (2) 21,493,518 21,126,489
Common shares outstanding at end of period 21,590,689 21,126,489
Common stock options/warrants outstanding at end of period
1,085,022 1,045,422 Yield on interest-earning
assets 4.50 % 4.88 % Cost of funds 2.54 % 2.96 % Net interest
margin 2.16 % 2.14 % Return on average assets
(annualized) 0.67 % 0.42 % Return on average common equity
(annualized) 7.46 % 5.29 % Effective income tax rate 45 % 45 %
Efficiency ratio (3) 38 % 41 % Average loans
outstanding $1,165,330 $1,329,413 Average securities outstanding
678,844 615,357 Average short-term investments outstanding 7,664
17,055 Average assets outstanding 1,945,130
2,045,999 Average interest-bearing deposits outstanding
$1,631,664 $1,732,180 Average borrowings outstanding 70,356 81,589
Average stockholders' equity 198,746 186,823
At Mar 31, At Dec
31, At Sep 30, At Jun
30, At Mar 31, Selected Financial
Condition Information: 2012 2011
2011 2011 2011 Total
assets $1,909,052 $1,969,540 $1,991,245 $2,050,379 $2,014,125 Cash
and short-term investments 89,839 29,863 36,798 14,461 29,079
Securities held to maturity 590,959 700,444 678,118 691,334 589,940
Loans, net of unearned fees 1,155,437 1,163,790 1,199,770 1,252,128
1,300,546 Allowance for loan losses 29,169 30,415 32,365 31,772
32,400 Allowance for loan losses/net loans 2.52 % 2.61 % 2.70 %
2.54 % 2.49 % Deposits 1,599,653 1,662,024 1,678,003 1,735,292
1,706,630 Borrowed funds and accrued interest payable 72,064 78,606
78,156 82,634 82,072 Preferred stockholder's equity 24,335 24,238
24,141 24,045 23,948 Common stockholders' equity 176,716 173,293
170,164 167,109 164,243 Common book value per share (4) 8.04
8.07 7.94 7.81
7.69 Loan chargeoffs for the quarter $1,430 $2,044
$1,667 $ 1,374 $ 4,513 Loan recoveries for the quarter 184 54 69 4
28 Real estate chargeoffs for the quarter - - - - - Security
impairment writedowns for the quarter 157 -
96 - 105
Nonaccrual loans (5) $53,208 $57,240 $59,707 $45,352 $45,192 Real
estate owned, net of valuation allowance 27,767 28,278 27,005
25,786 27,064 Investment securities on a cash basis 4,222 4,379
4,379 4,475 4,475 Accruing troubled debt restructured (TDR) loans
(6). 8,980 9,030 5,601 5,619 5,630 Loans 90 days past due and still
accruing 2,798 1,925 8,571 4,594 3,879 Loans 60-89 days past due
and still accruing 6,303 3,894 939 7,704 - Loans 31-59 days past
due and still accruing 11,840 24,876
- - 21,785 (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 of $3.1 million, $2.8 million, $2.4
million, $2.1 million and $1.8 million, respectively, divided by
common shares outstanding. (5) Include performing TDRs maintained
on nonaccrual status of $44 million, $46 million, $37 million, $33
million and $18 million, respectively. The balance at March 31,
2012 was yielding approximately 5% (6) Represent loans whose terms
have been modified mostly through the deferral of principal and/or
a partial reduction in interest payments. All loans were performing
and current as of March 31, 2012 and were yielding approximately
5.50%.
INTERVEST
BANCSHARES CORPORATION
Consolidated Financial
Highlights
At or For The Period Ended
($ in thousands, except per share
amounts)
Quarter
Ended
Mar 31,
2012
Year
Ended
Dec 31,
2011
Year
Ended
Dec 31,
2010
Year
Ended
Dec 31,
2009
Year
Ended
Dec 31,
2008
Balance Sheet Highlights: Total
assets $1,909,052 $1,969,540 $2,070,868 $2,401,204 $2,271,833 Cash
and short-term investments 89,839 29,863 23,911 7,977 54,903
Securities held to maturity 590,959 700,444 614,335 634,856 475,581
Loans, net of unearned fees 1,155,437 1,163,790 1,337,326 1,686,164
1,705,711 Allowance for loan losses 29,169 30,415 34,840 32,640
28,524 Allowance for loan losses/net loans 2.52 % 2.61 % 2.61 %
1.94 % 1.67 % Deposits 1,599,653 1,662,024 1,766,083 2,029,984
1,864,135 Borrowed funds and accrued interest payable 72,064 78,606
84,676 118,552 149,566 Preferred stockholder's equity 24,335 24,238
23,852 23,466 23,080 Common stockholders' equity 176,716 173,293
162,108 190,588 188,894 Common book value per share (1) 8.04 8.07
7.61 23.04 22.84 Market price per common share 3.82
2.65 2.93 3.28
3.99
Asset Quality Highlights Nonaccrual loans
$53,208 $57,240 $52,923 $123,877 $108,610 Real estate owned, net of
valuation allowance 27,767 28,278 27,064 31,866 9,081 Investment
securities on a cash basis 4,222 4,379 2,318 1,385 - Accruing
troubled debt restructured loans (2) 8,980 9,030 3,632 97,311 -
Loans past due 90 days and still accruing 2,798 1,925 7,481 6,800
1,964 Loans past due 31-89 days and still accruing 18,143 28,770
11,364 5,925 18,943 Loan chargeoffs 1,430 9,598 100,146 8,103 4,227
Loan recoveries 184 155 883 1,354 - Real estate chargeoffs - -
15,614 - - Impairment writedowns on security investments 157
201 1,192 2,258
-
Statement of Operations Highlights: Interest
and dividend income $20,698 $92,837 $ 107,072 $123,598 $128,497
Interest expense 10,740 50,540 62,692
81,000 90,335 Net interest and
dividend income 9,958 42,297 44,380 42,598 38,162 Provision for
loan losses - 5,018 101,463 10,865 11,158 Noninterest income 1,125
4,308 2,110 297 5,026 Noninterest expenses: Provision for real
estate losses 511 3,349 15,509 2,275 518 Real estate expenses 460
1,619 4,105 4,945 4,281 All other noninterest expenses 4,164
15,861 19,069 19,864
14,074 Earnings (loss) before income taxes 5,948
20,758 (93,656 ) 4,946 13,157 Provision (benefit) for income taxes
2,694 9,512 (40,348 ) 1,816
5,891 Net earnings (loss) before preferred
dividend requirements 3,254 11,246 (53,308 ) 3,130 7,266 Preferred
dividend requirements (3) 444 1,730
1,667 1,632 41 Net earnings
(loss) available to common stockholders $ 2,810 $
9,516 $(54,975 ) $ 1,498 $ 7,225
Basic earnings (loss) per common share $0.13 $0.45
$(4.95 ) $0.18 $0.87 Diluted earnings (loss) per common share $0.13
$0.45 $(4.95 ) $0.18 $0.87 Average common shares used to
calculate: Basic earnings (loss) per common share 21,493,518
21,126,187 11,101,196 8,270,812 8,259,091 Diluted earnings (loss)
per common share 21,493,518 21,126,187 11,101,196 8,270,812
8,267,781 Common shares outstanding 21,590,689
21,125,289 21,126,489 8,270,812
8,270,812 Net interest margin (4) 2.16 % 2.18 % 2.11
% 1.83 % 1.79 % Return on average assets 0.67 % 0.56 % -2.42 % 0.13
% 0.34 % Return on average common equity 7.46 % 6.74 % -32.20 %
1.65 % 3.94 % Effective income tax rate 45 % 46 % 43 % 37 % 45 %
Efficiency ratio (5) 38 % 34 % 41 % 46
% 33 % (1) Represents common stockholders' equity
less preferred dividends in arrears ($3.1 million at March 31,
2012, $2.8 million at December 31, 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 2.37%, 2.14%, 2.32%, 1.68% and
1.74%, 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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