Intervest Bancshares Corporation (NASDAQ-GS: IBCA), parent company of Intervest National Bank, today reported its 2011 second quarter financial results. Financial highlights follow.
- Net earnings increased to $2.5 million, or $0.12 per diluted common share, for the second quarter of 2011 ("Q2-11") from $1.7 million, or $0.08 per share, for the first quarter of 2011 ("Q1-11"). In the second quarter of 2010 ("Q2-10"), the Company had a net loss of $51.9 million, or $6.02 per share, primarily due to a bulk sale of nonperforming and underperforming assets.
- Net interest margin for Q2-11 improved to 2.24% from 2.14% in Q1-11 and 2.13% in Q2-10.
- Nonaccrual loans and real estate owned totaled $71 million at June 30, 2011, compared to $72 million at March 31, 2011 and $80 million at December 31, 2010. Nonaccrual loans necessarily include certain restructured loans (TDRs) that are classified as such based on regulatory guidance. At June 30, 2011, such loans amounted to $33 million and were yielding 4.43%. These loans were current and performing in accordance with their renegotiated terms.
- The total provision for loan and real estate losses amounted to $2.0 million for both Q2-11 and Q1-11, compared to $96.1 million in Q2-10. The allowance for loan losses was 2.54% of total outstanding loans at June 30, 2011, compared to 2.49% at March 31, 2011, 2.61% at December 31, 2010 and 2.17% at June 30, 2010.
- Noninterest expense decreased to $4.1 million in Q2-11, from $4.3 million in Q2-10 and $4.4 million in Q1-11. The Company's efficiency ratio, which is a measure of its ability to control expenses as a percentage of its revenues, improved to 35% in Q2-11, from 41% in Q1-11 and 36% in Q2-10.
- At June 30, 2011, Intervest National Bank's regulatory capital ratios were well above its minimum requirements and were as follows: Tier One Leverage -10.41%; Tier One Risk-Based -14.19%; and Total Risk-Based Capital - 15.45%. 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 $7.81 at June 30, 2011.
Net earnings for Q2-11 increased by $54.3 million over Q2-10 due to the following: a $94.0 million decrease in the total provision for loan and real estate losses (reflecting a large provision recorded in connection with the Q2-10 bulk sale and fewer problem assets and credit rating downgrades); a $1.6 million decrease in real estate expenses (reflecting less real estate owned); a $0.5 million increase in noninterest income (reflecting primarily increased income from loan prepayments and other related fees); and a $0.2 million decrease in noninterest expenses (reflecting primarily lower data processing costs and professional fees). The total of these items was partially offset by a $0.5 million decrease in net interest and dividend income (described below) and a $41.5 million increase in tax expense (due to pre-tax income in Q2-11 versus a large pre-tax loss in Q2-10). The Company's effective tax rate was 44.6% in Q2-11 and 43.2% in Q2-10.