Intervest Bancshares Corporation (NASDAQ-GS: IBCA), parent company of Intervest National Bank, today reported its 2011 fourth quarter and full year financial results. Financial highlights for the quarter follow.
- Net earnings for the fourth quarter of 2011 ("Q4-11") increased to $2.7 million, or $0.13 per diluted common share, from $0.4 million, or $0.02 per share, for the fourth quarter of 2010 ("Q4-10").
- Earnings before deducting provisions for loan and real estate losses, real estate expenses, income taxes and preferred dividend requirements amounted to $7.8 million in Q4-11, compared to $6.6 million in Q4-10.
- Provisions for loan and real estate losses decreased to $1.4 million in Q4-11, from $4.7 million in Q4-10. The allowance for loan losses amounted to $30.4 million at December 31, 2011 and represented 2.61% of total outstanding loans.
- Net interest and dividend income was $10.6 million in Q4-11, compared to $10.4 million in Q4-10. The net interest margin improved to 2.22% in Q4-11, from 2.06% in Q4-10.
- Noninterest expenses decreased to $3.8 million in Q4-11, from $4.9 million in Q4-10. The Company's efficiency ratio, which is a measure of its ability to control expenses as a percentage of its revenues, continues to be strong and was 32% in Q4-11, compared to 42% in Q4-10.
- Nonaccrual loans and real estate owned (REO) totaled $86 million at December 31, 2011, compared to $87 million at September 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 December 31, 2011, such loans totaled $46 million and were yielding 5.08%, compared to $37 million yielding 4.71% at September 30, 2011 and $21 million yielding 2.98% at December 31, 2010.
- Intervest National Bank's regulatory capital ratios continue to be well above its minimum requirements. At December 31, 2011, its actual ratios were as follows: Tier One Leverage - 11.21%; Tier One Risk-Based - 16.06%; and Total Risk-Based Capital - 17.33%, compared to its minimum requirements of 9%, 10% and 12%, respectively. The Bank's Tier 1 capital amounted to $218 million and was $43 million in excess of the required minimum for its leverage ratio.
- Book value per common share increased to $8.07 at December 31, 2011, from $7.61 at December 31, 2010.
Net earnings for Q4-11 increased by $2.3 million over Q4-10 due to the following: a $3.3 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 $1.1 million decrease in noninterest expenses (reflecting decreases of $0.9 million in FDIC premiums, $0.2 million in data processing costs and $0.2 million in professional fees, partially offset by a $0.2 million increase in salaries and benefits); and a $0.2 million increase in net interest and dividend income (as described below). The total of these items was partially offset by a $2.0 million increase in income tax expense (due to higher pre-tax income) and a $0.3 million increase in real estate expenses. The effective income tax rate was 46% in Q4-11 and Q4-10.