Intervest Bancshares Corporation (NASDAQ-GS:IBCA), parent company of Intervest National Bank, today reported that its net earnings for the fourth quarter of 2012 increased to $3.1 million, or $0.14 per common share, from $2.7 million, or $0.13 per share, for the fourth quarter of 2011, and net earnings for the full year 2012 increased to $10.4 million, or $0.48 per share, from $9.5 million, or $0.45 per share, for 2011.
Key Points Follow:
- Intervest National Bank's regulatory capital ratios continued to increase through the retention of earnings and a planned gradual reduction in the size of its balance sheet. The Bank's ratios at December 31, 2012 were as follows: Tier One Leverage - 14.44%; Tier One Risk-Based - 19.80%; and Total Risk-Based Capital - 21.06%; well above its minimum requirements of 9%, 10% and 12%, respectively. The Bank's Tier One capital amounted to $244 million and was $92 million in excess of the required minimum for the Tier One Leverage ratio.
- The net interest margin (exclusive of loan prepayment income) increased to 2.47% in Q4-12 and 2.29% for 2012, from 2.22% in Q4-11 and 2.18% for 2011.
- Net interest and dividend income, which was affected by a smaller balance sheet, decreased to $9.7 million in Q4-12 from $10.6 million in Q4-11, and to $39.2 million in 2012 from $42.3 million in 2011.
- New loan originations increased to $242 million in 2012, from $82 million in 2011, while total repayments increased to $291 million in 2012 from $243 million in 2011.
- Nonaccrual loans decreased to $46 million at December 31, 2012, from $57 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 December 31, 2012, such loans totaled $36 million compared to $46 million at December 31, 2011. These loans were yielding approximately 5% at December 31, 2012.
- Real estate owned through foreclosure (REO) decreased to $15.9 million at December 31, 2012, from $28.3 million at December 31, 2011, reflecting $12.9 million of sales and $4.1 million of writedowns in carrying value, partially offset by $4.6 million of additions.
- Provisions for loan and real estate losses decreased to a total of $1.1 million in Q4-12 from $1.4 million in Q4-11, and to $4.1 million in 2012 from $8.4 million in 2011.
- Operating expenses increased to $4.2 million in Q4-12, from $3.8 million in Q4-11, and to $16.7 million in 2012, from $15.9 million in 2011. Despite the increases, the Company's efficiency ratio (which measures its ability to control expenses as a percentage of revenues) continued to be favorable and was 35% for Q4-12 and 37% for 2012.
- Book value per common share (after subtracting preferred dividends in arrears) increased to $8.44 at December 31, 2012.
Net earnings for Q4-12 increased by $0.4 million from Q4-11 due to the following: a $1.5 million increase in noninterest income (due to a $1.9 million increase in loan prepayment income partially offset by a $0.4 million security impairment charge); a $0.3 million decrease in the provision for loan and real estate losses; and a $0.3 million decrease in real estate expenses associated with REO. The sum of these items was partially offset by a $0.9 million decrease in net interest and dividend income (as detailed below), a $0.4 million increase in operating expenses (primarily due to a $0.3 million aggregate increase in salaries, benefits and stock compensation expense including the impact of several new officer positions filled during 2012) and a $0.3 million increase in income tax expense (due to higher pre-tax income).