Intervest Bancshares Corporation Reports Net Loss Of $2.9 Million For The First Quarter Of 2010
Net interest and dividend income increased to $12.5 million in Q1-10 from $9.3 million in Q1-09, reflecting an improved net interest margin. The margin increased to 2.23% in Q1-10 from 1.67% in Q1-09 primarily due to lower rates paid on deposits, the early retirement of higher cost borrowings and the recovery of $0.8 million of nonaccrual interest from the full repayment of a nonaccrual loan. The positive effect of these items was partially offset by calls of higher yielding U.S. government agency security investments (coupled with the reinvestment of the proceeds into similar securities with lower interest rates). The yield on the Company's average interest-earning assets decreased by 21 basis points to 5.30% in Q1-10, from 5.51% in Q1-09. The Company's average cost of funds decreased at a faster pace by 93 basis points to 3.36% in Q1-10, from 4.29% in Q1-09.
Noninterest income increased to $0.5 million in Q1-10 from $0.1 million in Q1-09, primarily due to $0.4 million of fees from the full repayment of the nonaccrual loan noted above.
Total assets at March 31, 2010 were $2.28 billion compared to $2.40 billion at December 31, 2009, reflecting a decrease in security investments and loans receivable, partially offset by an increase in overnight investments and foreclosed real estate. As a result of current market conditions and higher regulatory capital requirements, Intervest National Bank has reduced its aggregate deposits and its new loan originations.
Total securities held to maturity decreased by $143.8 million to $491.1 million at March 31, 2010, primarily due to calls exceeding new purchases. A portion of the resulting proceeds were used to fund deposit outflow and the repayment of FHLB borrowings. The securities portfolio had a weighted-average remaining contractual maturity and a yield of 4.4 years and 2.58%, respectively, at March 31, 2010.Total loans receivable, net of unearned fees, amounted to $1.63 billion at March 31, 2010, a $52 million decrease from $1.68 billion at December 31, 2009. The decrease was due to an aggregate of $33.7 million of principal repayments, $28.0 million of loans transferred to foreclosed real estate and $14.0 million of loan chargeoffs exceeding $23.0 million of new loan originations.
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