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.
Intervest Bancshares Corporation Reports Earnings Of $2.6 Million Or $0.12 Per Share For 2011 Third Quarter
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