UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

           [X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2006
                                                 --------------

                                       or

          [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                 For The Transition Period From        to
                                               ------    ------

                        Commission file number 000-23377
                                               ---------

                        INTERVEST BANCSHARES CORPORATION
                        --------------------------------
             (Exact name of registrant as specified in its charter)

                DELAWARE                               13-3699013
   ----------------------------------      ----------------------------------
      (State or other jurisdiction                   (IRS Employer
    of incorporation or organization)              Identification No.)

                        ONE ROCKEFELLER PLAZA, SUITE 400
                          NEW YORK, NEW YORK 10020-2002
               ---------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (212) 218-2800
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

                                 NOT APPLICABLE
              ----------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

Indicate  by  check  mark  whether  the  registrant:  (1)  has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the past 12 months (or for such shorter period that the registrant
was  required  to  file  such  reports), and (2) has been subject to such filing
requirements  for  the  past  90  days:
YES XX  NO   .
    --     --

Indicate  by  check mark whether the registrant is a large accelerated filer, an
accelerated  filer,  or  a nonaccelerated filer (as defined in Rule 12b-2 of the
Exchange  Act).  Check  one:
Large accelerated filer      Accelerated filer      Nonaccelerated filer XX
                       --                     --                         --

Indicate  by check mark whether the registrant is a shell company (as defined in
Rule  12b-2  of  the  Exchange  Act):
YES     NO XX.
    --     --

Indicate  the  number  of  shares outstanding of each of the issuer's classes of
common  stock,  as  of  the  latest  practicable  date:

<TABLE>
<CAPTION>
Title of Each Class:                             Shares Outstanding:
--------------------                             -------------------
<S>                                              <C>
Class A Common Stock, $1.00 par value per share  7,457,302 outstanding as of April 28, 2006
-----------------------------------------------  ------------------------------------------

Class B Common Stock, $1.00 par value per share  385,000 outstanding as of April 28, 2006
-----------------------------------------------  ----------------------------------------
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                        INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES

                                            FORM 10-Q
                                         MARCH 31, 2006
                                        TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION                                                               Page
                                                                                            ----
<S>                                                                                         <C>
     ITEM 1.     FINANCIAL STATEMENTS

          Condensed Consolidated Balance Sheets
            as of March 31, 2006 (Unaudited) and December 31, 2005 . . . . . . . . . . . .     3
          Condensed Consolidated Statements of Earnings (Unaudited)
            for the Quarters Ended March 31, 2006 and 2005 . . . . . . . . . . . . . . . .     4

          Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
            for the Quarters Ended March 31, 2006 and 2005 . . . . . . . . . . . . . . . .     5

          Condensed Consolidated Statements of Cash Flows (Unaudited)
            for the Quarters Ended March 31, 2006 and 2005 . . . . . . . . . . . . . . . .     6

          Notes to Condensed Consolidated Financial Statements (Unaudited) . . . . . . . .     7

          Review by Independent Registered Public Accounting Firm. . . . . . . . . . . . .    17

          Report of Independent Registered Public Accounting Firm. . . . . . . . . . . . .    18

     ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                    RESULTS OF OPERATIONS. . . . . . . . . . . . . . . . . . . . . . . . .    19

     ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. . . . . . . .    30

     ITEM 4.     CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . .    30

PART II. OTHER INFORMATION

     ITEM 1.     LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . .    30

     ITEM 1A.    RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   30

     ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS . . . . . . .    30

     ITEM 3.     DEFAULTS UPON SENIOR SECURITIES . . . . . . . . . . . . . . . . . . . . .    30

     ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . . . . . . .    30

     ITEM 5.     OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .    30

     ITEM 6.     EXHIBITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    31

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    31
</TABLE>


         PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT

Intervest Bancshares Corporation and subsidiaries (the "Company") is making this
statement  in  order  to  satisfy  the  "Safe Harbor" provision contained in the
Private  Securities  Litigation  Reform Act of 1995. The statements contained in
this  report on Form 10-Q that are not statements of historical fact may include
forward-looking  statements  that  involve  a number of risks and uncertainties.
Such  forward-looking statements are made based on management's expectations and
beliefs  concerning  future  events  impacting  the  Company  and are subject to
uncertainties  and  factors  relating  to  the Company's operations and economic
environment,  all of which are difficult to predict and many of which are beyond
the  control  of  the Company, that could cause actual results of the Company to
differ  materially from those matters expressed in or implied by forward-looking
statements.


                                        2
<PAGE>
<TABLE>
<CAPTION>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
                                      INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
                                            CONDENSED CONSOLIDATED BALANCE SHEETS


                                                                                                 MARCH 31,     DECEMBER 31,
($in thousands, except par value)                                                                   2006           2005
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                             <C>           <C>
ASSETS                                                                                          (Unaudited)     (Audited)
Cash and due from banks                                                                         $      8,698  $       11,595
Federal funds sold                                                                                    16,022          42,675
Commercial paper and other short-term investments                                                      3,111           2,446
                                                                                                ----------------------------
  Total cash and cash equivalents                                                                     27,831          56,716
Securities held to maturity, net (estimated fair value of $325,290 and $249,088, respectively)       327,974         251,508
Federal Reserve Bank and Federal Home Loan Bank stock, at cost                                         6,299           5,241
Loans receivable (net of allowance for loan losses of $15,542 and $15,181, respectively)           1,386,466       1,352,805
Accrued interest receivable                                                                            9,066           7,706
Loan fees receivable                                                                                  11,229          10,941
Premises and equipment, net                                                                            6,347           6,421
Deferred income tax asset                                                                              7,208           6,988
Deferred debenture offering costs, net                                                                 5,327           5,610
Other assets                                                                                           2,777           2,487
============================================================================================================================
TOTAL ASSETS                                                                                    $  1,790,524  $    1,706,423
============================================================================================================================
LIABILITIES
Deposits:
  Noninterest-bearing demand deposit accounts                                                   $      6,484  $        9,188
  Interest-bearing deposit accounts:
    Checking (NOW) accounts                                                                            8,903           7,202
    Savings accounts                                                                                  15,913          17,351
    Money market accounts                                                                            246,431         223,075
    Certificate of deposit accounts                                                                1,151,950       1,118,514
                                                                                                ----------------------------
Total deposit accounts                                                                             1,429,681       1,375,330
Borrowed Funds:
    Federal Home Loan Bank advances                                                                   23,500               -
    Subordinated debentures                                                                           86,000          87,390
    Subordinated debentures - capital securities                                                      61,856          61,856
    Accrued interest payable on all borrowed funds                                                     6,898           6,250
    Mortgage note payable                                                                                226             229
                                                                                                ----------------------------
Total borrowed funds                                                                                 178,480         155,725
Accrued interest payable on deposits                                                                   3,665           3,232
Mortgage escrow funds payable                                                                         25,830          20,302
Official checks outstanding                                                                            2,900          11,689
Other liabilities                                                                                      7,140           3,967
----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES                                                                                  1,647,696       1,570,245
----------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock (300,000 shares authorized, none issued)                                                   -               -
Class A common stock ($1.00 par value, 9,500,000 shares authorized,
  7,452,642 and 7,438,058 shares issued and outstanding, respectively)                                 7,453           7,438
Class B common stock ($1.00 par value, 700,000 shares authorized,
  385,000 shares issued and outstanding)                                                                 385             385
Additional paid-in-capital, common                                                                    65,524          65,309
Retained earnings                                                                                     69,466          63,046
----------------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY                                                                           142,828         136,178
============================================================================================================================
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                      $  1,790,524  $    1,706,423
============================================================================================================================
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
                     INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
                       CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                        (Unaudited)

                                                                       QUARTER ENDED
                                                                         MARCH 31,
                                                                   -----------------------
($in thousands, except per share data)                                2006        2005
------------------------------------------------------------------------------------------
<S>                                                                <C>         <C>
INTEREST AND DIVIDEND INCOME
Loans receivable                                                   $   26,931  $   18,811
Securities                                                              2,747       1,563
Other interest-earning assets                                             388         194
------------------------------------------------------------------------------------------
TOTAL INTEREST AND DIVIDEND INCOME                                     30,066      20,568
------------------------------------------------------------------------------------------

INTEREST EXPENSE
Deposits                                                               14,559       9,039
Subordinated debentures                                                 1,908       2,060
Subordinated debentures - capital securities                            1,090       1,090
Other borrowed funds                                                       23          94
------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE                                                 17,580      12,283
------------------------------------------------------------------------------------------

NET INTEREST AND DIVIDEND INCOME                                       12,486       8,285
Provision for loan losses                                                 361       1,033
------------------------------------------------------------------------------------------
NET INTEREST AND DIVIDEND INCOME AFTER PROVISION FOR LOAN LOSSES       12,125       7,252
------------------------------------------------------------------------------------------

NONINTEREST INCOME
Customer service fees                                                     159          76
Income from mortgage lending activities                                   249         149
Income from the early repayment of mortgage loans                       1,674         654
Loss from early call of investment securities                               -          (1)
------------------------------------------------------------------------------------------
TOTAL NONINTEREST INCOME                                                2,082         878
------------------------------------------------------------------------------------------

NONINTEREST EXPENSES
Salaries and employee benefits                                          1,459       1,285
Occupancy and equipment, net                                              403         357
Data processing                                                           178         136
Professional fees and services                                            225         139
Stationery, printing and supplies                                          53          54
Postage and delivery                                                       41          33
FDIC and general insurance                                                 88          79
Director and committee fees                                               122         122
Advertising and promotion                                                  72          47
All other                                                                 155         122
------------------------------------------------------------------------------------------
TOTAL NONINTEREST EXPENSES                                              2,796       2,374
------------------------------------------------------------------------------------------
Earnings before income taxes                                           11,411       5,756
Provision for income taxes                                              4,991       2,508
==========================================================================================
NET EARNINGS                                                       $    6,420  $    3,248
==========================================================================================

BASIC EARNINGS PER SHARE                                           $     0.82  $    0 .52
DILUTED EARNINGS PER SHARE                                         $     0.77  $    0 .48
CASH DIVIDENDS PER SHARE                                           $        -  $        -
------------------------------------------------------------------------------------------
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
                       INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                          (Unaudited)

                                                                    QUARTER ENDED
                                                                      MARCH 31,
                                                       ---------------------------------------
                                                               2006                2005
                                                       ---------------------------------------
($thousands)                                            SHARES     AMOUNT    SHARES    AMOUNT
----------------------------------------------------------------------------------------------
<S>                                                    <C>        <C>       <C>        <C>
CLASS A COMMON STOCK
Balance at beginning of period                         7,438,058  $  7,438  5,886,433  $ 5,886
Issuance of shares upon the conversion of debentures      14,584        15      2,410        3
----------------------------------------------------------------------------------------------
Balance at end of period                               7,452,642     7,453  5,888,843    5,889
----------------------------------------------------------------------------------------------

CLASS B COMMON STOCK
----------------------------------------------------------------------------------------------
Balance at beginning and end of period                   385,000       385    385,000      385
----------------------------------------------------------------------------------------------

ADDITIONAL PAID-IN-CAPITAL, COMMON
Balance at beginning of period                                      65,309              38,961
Issuance of shares upon the conversion of debentures                   215                  31
----------------------------------------------------------------------------------------------
Balance at end of period                                            65,524              38,992
----------------------------------------------------------------------------------------------

RETAINED EARNINGS
Balance at beginning of period                                      63,046              44,862
Net earnings for the period                                          6,420               3,248
----------------------------------------------------------------------------------------------
Balance at end of period                                            69,466              48,110
----------------------------------------------------------------------------------------------

==============================================================================================
TOTAL STOCKHOLDERS' EQUITY AT END OF PERIOD            7,837,642  $142,828  6,273,843  $93,376
==============================================================================================
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>


                                        5
<PAGE>
<TABLE>
<CAPTION>
                            INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
                             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                               (Unaudited)

                                                                                      QUARTER ENDED
                                                                                         MARCH 31,
                                                                                  ----------------------
($in thousands)                                                                      2006        2005
--------------------------------------------------------------------------------------------------------
<S>                                                                               <C>         <C>
OPERATING ACTIVITIES
Net earnings                                                                      $   6,420   $   3,248
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization                                                           136         129
Provision for loan losses                                                               361       1,033
Deferred income tax benefit                                                            (220)       (452)
Amortization of deferred debenture offering costs                                       284         296
Amortization of premiums (accretion) of discounts and deferred loan fees, net        (2,752)     (1,499)
Net increase (decrease) in accrued interest payable on debentures                       722      (1,032)
Net decrease in official checks outstanding                                          (8,789)     (5,483)
Net increase in loan fees receivable                                                   (288)       (524)
Net change in all other assets and liabilities                                        3,857       3,718
--------------------------------------------------------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES                                                  (269)       (566)
--------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Maturities and calls of securities held to maturity                                  29,050      19,305
Purchases of securities held to maturity                                           (105,449)    (25,523)
Net increase in loans receivable                                                    (33,219)    (79,896)
Purchases of Federal Reserve Bank and Federal Home Loan Bank stock, net              (1,058)          -
Purchases of premises and equipment, net                                                (62)       (103)
--------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES                                              (110,738)    (86,217)
--------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Net increase in deposits                                                             54,351     129,785
Net increase in mortgage escrow funds payable                                         5,528       5,381
Net increase (decrease) in FHLB advances                                             23,500     (21,000)
Principal repayments of debentures and mortgage note payable                         (1,253)     (2,603)
Debenture issuance costs                                                                 (4)        (32)
--------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                            82,122     111,531
--------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents                                (28,885)     24,748
Cash and cash equivalents at beginning of period                                     56,716      24,599
========================================================================================================
Cash and cash equivalents at end of period                                        $  27,831   $  49,347
========================================================================================================

SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
  Interest                                                                        $  16,122   $  12,606
  Income taxes                                                                        2,956         871
Noncash activities:
  Conversion of debentures and accrued interest into Class A common stock               230          34
--------------------------------------------------------------------------------------------------------
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>


                                        6
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 1 - PRINCIPLES OF CONSOLIDATION, BASIS OF PRESENTATION AND USE OF ESTIMATES

The  condensed  consolidated  financial  statements  of  Intervest  Bancshares
Corporation  and  Subsidiaries  in  this report have not been audited except for
information  derived from the 2005 audited consolidated financial statements and
notes  thereto.  The  condensed consolidated financial statements in this report
should  be  read  in  conjunction  with  the 2005 audited consolidated financial
statements  and  notes  thereto  included in the Company's Annual Report on Form
10-K  for  the  year  ended  December  31,  2005.

The  consolidated  financial  statements  include  the  accounts  of  Intervest
Bancshares  Corporation  (a  registered financial holding company referred to by
itself  as  the  "Holding  Company")  and  its  three wholly owned subsidiaries,
Intervest  National  Bank  (referred  to  as  the  "Bank"),  Intervest  Mortgage
Corporation  and Intervest Securities Corporation. All the entities are referred
to  collectively  as  the  "Company"  on  a  consolidated basis. All significant
intercompany  balances  and  transactions have been eliminated in consolidation.
Intervest Statutory Trust I, II, III and IV are wholly owned subsidiaries of the
Holding  Company  that  are  unconsolidated  entities  as  required by Financial
Accounting  Standards  Board  (FASB)  Interpretation No. 46-R, "Consolidation of
Variable  Interest  Entities."  The  accounting  and  reporting  policies of the
Company conform to United States generally accepted accounting principles and to
general  practices  within  the  banking  industry.

In  preparing  the  consolidated financial statements, management is required to
make  estimates  and  assumptions  that  affect  the reported amounts of assets,
liabilities  and  disclosure  of  contingent  liabilities  as of the date of the
consolidated  financial  statements,  and  revenues  and  expenses  during  the
reporting  periods.  Actual results could differ from those estimates. Estimates
that  are  particularly  susceptible  to  significant  change  relate  to  the
determination  of the allowance for loan losses and the estimated fair values of
financial  instruments.  In  the opinion of management, all material adjustments
necessary  for  a  fair  presentation  of  financial  condition  and  results of
operations  for  the  interim  periods  presented in this report have been made.
These  adjustments  are  of a normal recurring nature. The results of operations
for  the  interim  periods are not necessarily indicative of results that may be
expected  for  the  entire  year  or  any  other  interim  period.

NOTE 2 - DESCRIPTION OF BUSINESS

The  offices  of  the Holding Company, Intervest Mortgage Corporation, Intervest
Securities  Corporation  and  the  Bank's  headquarters and full-service banking
office  are  located  on the entire fourth floor of One Rockefeller Plaza in New
York  City, New York, 10020-2002, and the main telephone number is 212-218-2800.
The  Holding  Company's  primary  business is the ownership and operation of its
subsidiaries.  It  does  not engage in any other substantial business activities
other  than  a  limited  amount  of  real estate mortgage lending, including the
participation  in  loans  originated by the Bank. From time to time, the Holding
Company  also  issues  debt  and  equity  securities  to raise funds for working
capital  purposes.

The  Company's  primary business segment is banking and real estate lending. The
Company's  lending  activities  are comprised almost entirely of origination for
its  loan  portfolio,  mortgage loans secured by commercial and multifamily real
estate  properties  (including  rental  and  cooperative/condominium  apartment
buildings,  office  buildings,  mixed-use  properties, shopping centers, hotels,
restaurants, industrial properties, parking lots/garages and vacant land). These
loans  have  an  average life of approximately three years. The Company tends to
lend in areas that are in the process of being revitalized, with a concentration
of  loans  on  properties  located in New York State and the State of Florida. A
significant  portion  of the residential properties are located in New York City
and  are  subject  to  rent control and rent stabilization laws, which limit the
ability  of  the  property  owners  to  increase  rents.

The  Bank  is  a nationally chartered, full-service commercial bank that has its
headquarters  and  full-service  banking office in Rockefeller Plaza in New York
City,  and  a  total  of  five  full-service banking offices in Pinellas County,
Florida  -  four  in Clearwater and one in South Pasadena. The Bank has received
regulatory  permission  to open an additional branch office in Clearwater Beach,
Florida,  which  is  expected  to  open  by  August 1, 2006. The Bank conducts a
personalized commercial and consumer banking business and attracts deposits from
the areas served by its banking offices. The Bank also provides internet banking
services  through  its  web  site:  www.intervestnatbank.com,  which can attract
deposit  customers from outside its primary market areas. The deposits, together
with  funds  derived  from  other sources, are mainly used to originate mortgage
loans  secured  by  commercial  and  multifamily  real  estate properties and to
purchase  investment  securities. The information on the aforementioned web site
is  not and should not be considered part of this report and is not incorporated
by  reference.


                                        7
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 2 - DESCRIPTION OF BUSINESS - CONTINUED

Intervest  Mortgage  Corporation's  business focuses on the origination of first
mortgage  and  junior  mortgage loans secured by commercial and multifamily real
estate  properties.  It  also  provides  loan  origination services to the Bank.
Intervest  Mortgage  Corporation funds its lending business through the issuance
of  subordinated  debentures  in  public  offerings. It currently has one active
wholly  owned  subsidiary,  Intervest  Realty  Servicing  Corporation,  which is
engaged  in  certain  mortgage  servicing  activities.

Intervest Securities Corporation is a broker/dealer and a member of the National
Association  of Securities Dealers (NASD) whose business activities to date have
not  been  material. Its only revenues have been derived from participating as a
selected  dealer  from  time  to  time  in  offerings  of debt securities of the
Company,  primarily  those  of  Intervest  Mortgage  Corporation.

Intervest  Statutory  Trust I, II, III and IV issued in December 2001, September
2003,  March  2004  and  September  2004,  $15  million,  respectively, of trust
preferred  securities  for a total of $60 million. Each trust was formed for the
sole  purpose  of  issuing  and administering the trust preferred securities and
they  do not conduct any trade or business. For a further discussion, see note 8
herein.

NOTE 3 - SECURITIES

The  carrying value (amortized cost) and estimated fair value of securities held
to  maturity  are  as  follows:

<TABLE>
<CAPTION>
                                         Gross        Gross   Estimated              Wtd-Avg
                        Amortized   Unrealized   Unrealized        Fair   Wtd-Avg  Remaining
($in thousands)              Cost        Gains       Losses       Value     Yield   Maturity
--------------------------------------------------------------------------------------------
<S>                    <C>         <C>          <C>          <C>         <C>       <C>
At March 31, 2006      $  327,974  $         3  $     2,687  $  325,290     3.88%  1.4 Years
At December 31, 2005   $  251,508  $        14  $     2,434  $  249,088     3.26%  1.1 Years
--------------------------------------------------------------------------------------------
</TABLE>

All the securities at March 31, 2006 and December 31, 2005 were debt obligations
of U.S. government corporations or sponsored agencies (such as FHLB, FNMA, FHLMC
or  FFCB)  and  were  held  by the Bank. The securities have fixed rates or have
predetermined  scheduled  rate increases, and some have call features that allow
the  issuer  to  call  the  security  at  par before its stated maturity without
penalty.

At March 31, 2006, the portfolio consisted of 201 securities nearly all of which
had  an  unrealized  loss.  A  large portion of the unrealized losses were for a
continuous  period of more than 12 months. Management believes that the cause of
these unrealized losses is directly related to changes in market interest rates.
In general, as interest rates rise, the fair value of fixed rate securities will
decrease;  as  interest  rates  fall,  their  fair  value  will  increase.

Management  views the unrealized losses noted above to be temporary based on the
impact of interest rates, the very short maturities of the investments and their
high  credit  quality.  In addition, the Bank has the ability and intent to hold
its  investments  for  a  period  of  time  sufficient for the fair value of the
securities  to  recover.  To date, the Bank has always recovered the cost of its
investment  securities  upon  maturity.  Management  evaluates  securities  for
other-than-temporary  impairment  at  least  on  a  quarterly  basis,  and  more
frequently  when  economic  or  market  concerns  warrant  such  evaluation.

The  amortized  cost  and estimated fair value of securities held to maturity by
remaining  term  to  contractual  maturity  is  as  follows:

<TABLE>
<CAPTION>
     ($in thousands)                         Amortized Cost   Estimated Fair Value   Average Yield
     ----------------------------------------------------------------------------------------------
<S>                                          <C>              <C>                    <C>
     At March 31, 2006:
     Due in one year or less                 $       122,904  $             121,885           3.05%
     Due after one year through five years           205,070                203,405           4.39%
     ----------------------------------------------------------------------------------------------
                                             $       327,974  $             325,290           3.88%
     ----------------------------------------------------------------------------------------------

     ($in thousands)                         Amortized Cost   Estimated Fair Value   Average Yield
     ----------------------------------------------------------------------------------------------
     At December 31, 2005:
     Due in one year or less                 $       124,413  $             123,345           2.71%
     Due after one year through five years           127,095                125,743           3.79%
     ----------------------------------------------------------------------------------------------
                                             $       251,508  $             249,088           3.26%
     ----------------------------------------------------------------------------------------------
</TABLE>

There  were  no  securities  classified  as  available  for sale or any sales of
securities  during  the  reporting  periods.


                                        8
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 4 - LOANS RECEIVABLE
Loans  receivable  are  summarized  as  follows:

<TABLE>
<CAPTION>
                                                      At March 31, 2006        At December 31, 2005
                                                   ------------------------  ------------------------
          ($in thousands)                          # of Loans     Amount     # of Loans     Amount
          -------------------------------------------------------------------------------------------
<S>                                                <C>         <C>           <C>         <C>
          Commercial real estate loans                    273  $   753,792          264  $   735,650
          Residential multifamily loans                   234      568,042          234      538,760
          Land development and other land loans            33       90,886           31      105,251
          Residential 1-4 family loans                      3          100            3          100
            Commercial business loans                      22        1,139           22        1,089
          Consumer loans                                   14          304           10          194
          -------------------------------------------------------------------------------------------
          Loans receivable                                579    1,414,263          564    1,381,044
          -------------------------------------------------------------------------------------------
          Deferred loan fees                                       (12,255)                  (13,058)
          -------------------------------------------------------------------------------------------
          Loans receivable, net of deferred fees                 1,402,008                 1,367,986
          -------------------------------------------------------------------------------------------
          Allowance for loan losses                                (15,542)                  (15,181)
          -------------------------------------------------------------------------------------------
          Loans receivable, net                                $ 1,386,466               $ 1,352,805
          -------------------------------------------------------------------------------------------
</TABLE>

At  March 31, 2006, there were three multifamily real estate loans totaling $1.7
million  on  nonaccrual  status,  compared to two loans totaling $0.7 million at
December  31,  2005. Nonaccrual loans are considered impaired under the criteria
of SFAS No. 114, but no valuation allowance was maintained at any time since the
Company  believes  that  the  estimated  fair value of the underlying properties
exceeded its recorded investment. At March 31, 2006 and December 31, 2005, there
were  no  other  impaired  loans.

At  March  31,  2006  and  December  31,  2005, there were $1.5 million and $2.6
million, respectively, of loans ninety days past due and still accruing interest
because  they were deemed by management to be well secured and in the process of
collection.

Interest  income  that  was  not  recorded  on  nonaccrual  loans  under  their
contractual  terms  amounted  to  $51,000  for the quarter ended March 31, 2006,
compared  to  $104,000 for the quarter ended March 31, 2005. The average balance
of  nonaccrual  loans  for  the  quarter  ended March 31, 2006 and 2005 was $2.9
million  and  $4.6  million,  respectively.

NOTE  5  -  ALLOWANCE  FOR  LOAN  LOSSES

Activity  in  the  allowance  for  loan  losses  is  summarized  as  follows:

<TABLE>
<CAPTION>
                                      Quarter Ended March 31,
                                  ------------------------------
($in thousands)                        2006            2005
----------------------------------------------------------------
<S>                               <C>             <C>
Balance at beginning of period    $       15,181  $       11,106
Provision charged to operations              361           1,033
----------------------------------------------------------------
Balance at end of period          $       15,542  $       12,139
----------------------------------------------------------------
</TABLE>

NOTE 6 - DEPOSITS

Scheduled  maturities  of  certificates  of  deposit  accounts  are  as follows:

<TABLE>
<CAPTION>
                                    At March 31, 2006         At December 31, 2005
                                -------------------------  -------------------------
                                               Wtd-Avg                    Wtd-Avg
     ($in thousands)              Amount     Stated Rate     Amount     Stated Rate
     -------------------------------------------------------------------------------
<S>                             <C>          <C>           <C>          <C>
     Within one year            $   417,655         4.10%  $   381,968         3.77%
     Over one to two years          275,991         4.33       259,698         4.30
     Over two to three years        131,094         4.23       126,546         4.13
     Over three to four years       183,675         4.51       160,344         4.43
     Over four years                143,535         4.79       189,958         4.69
     -------------------------------------------------------------------------------
                                $ 1,151,950         4.32%  $ 1,118,514         4.18%
     -------------------------------------------------------------------------------
</TABLE>

Certificate  of  deposit accounts of $100,000 or more totaled $388.1 million and
$371.8  million  at March 31, 2006 and December 31, 2005, respectively. At March
31,  2006,  certificate  of  deposit  accounts  of $100,000 or more by remaining
maturity  were  as  follows: due within one year $135.9 million; over one to two
years  $104.4 million; over two to three years $37.4 million; over three to four
years  $62.3  million;  and  over  four  years  $48.1  million.


                                        9
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 7 - SUBORDINATED DEBENTURES AND MORTGAGE NOTE PAYABLE

Subordinated  debentures  by  series and mortgage note payable are summarized as
follows:

<TABLE>
<CAPTION>
                                                                               At March 31,   At December 31,
($in thousands)                                                                    2006             2005
--------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>            <C>
INTERVEST MORTGAGE CORPORATION:
Series 06/28/99 - interest at 9% fixed               - due July 1, 2006        $       2,000  $          2,000
Series 09/18/00 - interest at 9% fixed               - due January 1, 2008             1,250             1,250
Series 08/01/01 - interest at 8% fixed               - due April 1, 2007               2,750             2,750
Series 08/01/01 - interest at 8 1/2% fixed           - due April 1, 2009               2,750             2,750
Series 01/17/02 - interest at 7 1/2% fixed           - due October 1, 2007             2,250             2,250
Series 01/17/02 - interest at 7 3/4% fixed           - due October 1, 2009             2,250             2,250
Series 08/05/02 - interest at 7 1/2% fixed           - due January 1, 2008             3,000             3,000
Series 08/05/02 - interest at 7 3/4% fixed           - due January 1, 2010             3,000             3,000
Series 01/21/03 - interest at 6 3/4% fixed           - due July 1, 2006                1,500             1,500
Series 01/21/03 - interest at 7 % fixed              - due July 1, 2008                3,000             3,000
Series 01/21/03 - interest at 7 1/4% fixed           - due July 1, 2010                3,000             3,000
Series 07/25/03 - interest at 6 1/2% fixed           - due October 1, 2006             2,500             2,500
Series 07/25/03 - interest at 6 3/4% fixed           - due October 1, 2008             3,000             3,000
Series 07/25/03 - interest at 7 % fixed              - due October 1, 2010             3,000             3,000
Series 11/28/03 - interest at 6 1/4% fixed           - due April 1, 2007               2,000             2,000
Series 11/28/03 - interest at 6 1/2% fixed           - due April 1, 2009               3,500             3,500
Series 11/28/03 - interest at 6 3/4% fixed           - due April 1, 2011               4,500             4,500
Series 06/07/04 - interest at 6 1/4% fixed           - due January 1, 2008             2,500             2,500
Series 06/07/04 - interest at 6 1/2% fixed           - due January 1, 2010             4,000             4,000
Series 06/07/04 - interest at 6 3/4% fixed           - due January 1, 2012             5,000             5,000
Series 03/21/05 - interest at 6 1/4% fixed           - due April 1, 2009               3,000             3,000
Series 03/21/05 - interest at 6 1/2% fixed           - due April 1, 2011               4,500             4,500
Series 03/21/05 - interest at 7% fixed               - due April 1, 2013               6,500             6,500
Series 08/12/05 - interest at 6 1/4% fixed           - due October 1, 2009             2,000             2,000
Series 08/12/05 - interest at 6 1/2% fixed           - due October 1, 2011             4,000             4,000
Series 08/12/05 - interest at 7% fixed               - due October 1, 2013             6,000             6,000
                                                                               -------------------------------
                                                                                      82,750            82,750
INTERVEST BANCSHARES CORPORATION:
Series 05/14/98 - interest at 8% fixed               - due July 1, 2008                2,000             2,140
Series 12/15/00 - interest at 8 1/2% fixed           - due April 1, 2006               1,250             1,250
Series 12/15/00 - interest at 9% fixed               - due April 1, 2008                   -             1,250
                                                                               -------------------------------
                                                                                       3,250             4,640

INTERVEST NATIONAL BANK:
Mortgage note payable (1) - interest at 7% fixed  - due February 1, 2017                 226               229
--------------------------------------------------------------------------------------------------------------
                                                                               $      86,226  $         87,619
--------------------------------------------------------------------------------------------------------------
<FN>
(1) The note cannot be prepaid except during the last year of its term.
</TABLE>

Scheduled  contractual  maturities  as  of  March  31,  2006  were  as  follows:

<TABLE>
<CAPTION>
     ($in thousands)                                     Principal   Accrued Interest
     ---------------------------------------------------------------------------------
<S>                                                      <C>         <C>

     For the period April 1, 2006 to December 31, 2006   $    6,011  $           2,872
     For the year ended December 31, 2007                     7,015                210
     For the year ended December 31, 2008                    16,016              2,294
     For the year ended December 31, 2009                    13,517                325
     For the year ended December 31, 2010                    13,019                270
     Thereafter                                              30,648                361
     ---------------------------------------------------------------------------------
                                                         $   86,226  $           6,332
     ---------------------------------------------------------------------------------
</TABLE>


                                       10
<PAGE>

                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE  7  -  SUBORDINATED  DEBENTURES  AND  MORTGAGE  NOTE  PAYABLE,  CONTINUED

Intervest  Bancshares  Corporation  repaid  the  following  debentures:
-    Series  12/15/00  due  4/1/08 were repaid early on 3/1/06 for $1,250,000 of
     principal  and  $18,000  of  accrued  interest;

Intervest  Mortgage  Corporation  repaid  the following debentures subsequent to
March  31,  2006:
-    Series  6/28/99  due  7/1/06  were repaid early on 5/1/06 for $2,000,000 of
     principal  and  $1,645,000  of  accrued  interest;
-    Series  1/21/03  due  7/1/06  were repaid early on 5/1/06 for $1,500,000 of
     principal  and  $34,000  of  accrued  interest;

Interest is paid quarterly on Intervest Mortgage Corporation's debentures except
for  the  following:  all  of Series 6/28/99 and 9/18/00; $0.6 million of Series
8/01/01;  $0.2  million  of Series 1/17/02; $1.1 million of Series 8/05/02; $1.8
million  of  Series  11/28/03;  $1.9  million  of Series 6/7/04; $1.9 million of
Series  3/21/05;  and  $1.8  million  of Series 8/12/05, all of which accrue and
compound  interest  quarterly,  with  such interest due and payable at maturity.

The  holders  of  Intervest  Mortgage  Corporation's  Series 9/18/00 and 1/17/02
through  8/12/05  debentures  can  require  Intervest Mortgage Corporation, on a
first  come basis during a specified time, to repurchase the debentures for face
amount  plus  accrued interest once each year (beginning July 1, 2006 for Series
1/21/03,  October  1,  2006  for  Series  7/25/03,  January  1,  2007 for Series
11/28/03,  January  1,  2008 for Series 6/7/04, April 1, 2009 for Series 3/21/05
and  October  1,  2009 for Series 8/12/05). However, in no calendar year can the
required  purchases  be more than $100,000 in principal amount of each maturity,
in  each  series  of  debentures,  on  a  non-cumulative  basis.

Intervest Mortgage Corporation's debentures may be redeemed at its option at any
time,  in whole or in part, for face value, except for Series 3/21/05 and Series
8/12/05,  which  would  be  at  a  premium  of 1% if they were redeemed prior to
October  1,  2006  and  April  1,  2007,  respectively.  All  the debentures are
unsecured  and  subordinate  to  all  present and future senior indebtedness, as
defined  in  the  indenture  related  to  each  debenture.

In  the  second  quarter  of  2006,  Intervest  Mortgage Corporation anticipates
completing  a public offering of up to $16 million in aggregate principal amount
of  additional  debentures

The  Holding  Company's  Series  5/14/98 subordinated debentures are convertible
along  with  accrued  interest at the option of the holders at any time prior to
April  1,  2008  into  shares  of  its  Class  A  common  stock at the following
conversion  prices  per  share:  $16.00  in 2006; $18.00 in 2007 and $20.00 from
January  1,  2008  through  April  1, 2008. The Holding Company has the right to
establish  conversion  prices  that are less than those set forth above for such
periods  as  it  may  determine.  In  the  first  quarter  of  2006, $233,000 of
debentures  ($140,000  of  principal  and  $93,000  of  accrued  interest)  were
converted  into  shares  of  Class  A  common  stock  at  $16.00  per  share.

At  March 31, 2006, interest accrued and compounded quarterly on $0.5 million of
the  Holding Company's convertible debentures at the rate of 8% per annum, while
$1.5 million of the convertible debentures pay interest quarterly at the rate of
8%  per  annum.  All  accrued  interest  of  $1.3  million is due and payable at
maturity  whether  by  acceleration,  redemption  or  otherwise. Any convertible
debenture  holder  may,  on  or before July 1 of each year, elect to be paid all
accrued  interest  and  to  thereafter  receive  regular  quarterly  payments of
interest.  The  Holding Company may redeem any of its debentures, in whole or in
part,  at  any  time  for  face  value.

NOTE 8 - SUBORDINATED DEBENTURES - CAPITAL SECURITIES

Capital  Securities  (commonly  referred  to  as trust preferred securities) are
summarized  as  follows:

<TABLE>
<CAPTION>
                                                                 At March 31, 2006      At December  31, 2005
                                                             ------------------------  ------------------------
                                                                            Accrued                   Accrued
($in thousands)                                               Principal    Interest     Principal    Interest
---------------------------------------------------------------------------------------------------------------
<S>                                                          <C>          <C>          <C>          <C>
Capital Securities   I -  debentures due December 18, 2031   $    15,464  $       441  $    15,464  $        59
Capital Securities  II - debentures due September 17, 2033        15,464           41       15,464           35
Capital Securities III - debentures due March 17, 2034            15,464           36       15,464           31
Capital Securities  IV - debentures due September 20, 2034        15,464           29       15,464           29
---------------------------------------------------------------------------------------------------------------
                                                             $    61,856  $       547  $    61,856  $       154
---------------------------------------------------------------------------------------------------------------
</TABLE>


                                       11
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 8 - SUBORDINATED DEBENTURES - CAPITAL SECURITIES, CONTINUED

The  Capital  Securities  are  obligations of the Holding Company's wholly owned
statutory  business  trusts,  Intervest  Statutory Trust I, II, III and IV. Each
Trust  was  formed  with  a  capital  contribution  of $464,000 from the Holding
Company  and  for  the  sole  purpose  of  issuing and administering the Capital
Securities.  The  proceeds  from the issuance of the Capital Securities together
with  the  capital  contribution for each Trust were used to acquire the Holding
Company's  Junior  Subordinated  Debentures  that  are due concurrently with the
Capital  Securities.  The  Capital  Securities,  net  of  the  Company's capital
contributions  totaling  $1.9  million,  qualify  as  regulatory  capital.

The  sole  assets of the Trusts, the obligors on the Capital Securities, are the
Junior Subordinated Debentures. In addition, for each Trust, the Holding Company
has  guaranteed the payment of distributions on, payments on any redemptions of,
and  any  liquidation  distribution  with  respect  to  the  Capital Securities.
Issuance  costs  of  $0.5  million,  $0.4 million, $0.4 million and $0.2 million
associated  with  Capital  Securities I, II, III and IV, respectively, have been
capitalized  by the Holding Company and are being amortized over the life of the
securities  using  the  straight-line  method.

Interest  payments  on the Junior Subordinated Debentures (and the corresponding
distributions  on  the  Capital  Securities)  are payable in arrears as follows:
Capital  Securities  I  -  semi-annually  at the fixed rate of 9.875% per annum;
Capital  Securities  II  -  quarterly at the fixed rate of 6.75% per annum until
September  17,  2008  and  thereafter  at  the rate of 2.95% over 3 month libor;
Capital  Securities  III  - quarterly at the fixed rate of 5.88% per annum until
March  17,  2009  and  thereafter  at  the rate of 2.79% over 3 month libor; and
Capital  Securities  IV  -  quarterly at the fixed rate of 6.20% per annum until
September  20,  2009  and  thereafter  at  the rate of 2.40% over 3 month libor.

Interest  payments  may be deferred at any time and from time to time during the
term  of  the  Junior  Subordinated  Debentures  at  the election of the Holding
Company  for  up  to  20  consecutive quarterly periods, or 5 years. There is no
limitation  on  the  number  of extension periods the Holding Company may elect;
provided, however, no deferral period may extend beyond the maturity date of the
Junior  Subordinated  Debentures.  During  an interest deferral period, interest
will  continue  to  accrue on the Junior Subordinated Debentures and interest on
such  accrued  interest will accrue at an annual rate equal to the interest rate
in  effect  for  such  deferral  period, compounded quarterly from the date such
interest  would  have  been  payable  were  it  not  deferred. At the end of the
deferral  period, the Holding Company will be obligated to pay all interest then
accrued  and  unpaid.

All  of  the  Capital Securities are subject to mandatory redemption as follows:
(i)  in  whole,  but  not  in  part,  upon  repayment of the Junior Subordinated
Debentures  at stated maturity or earlier, at the option of the Holding Company,
within  90  days following the occurrence and continuation of certain changes in
the  tax or capital treatment of the Capital Securities, or a change in law such
that the Trust would be considered an investment company, contemporaneously with
the redemption by the Holding Company of the Junior Subordinated Debentures; and
(ii)  in  whole or in part at any time on or after December 18, 2006 for Capital
Securities  I,  September 17, 2008 for Capital Securities II, March 17, 2009 for
Capital  Securities  III,  and  September  20,  2009  for  Capital Securities IV
contemporaneously  with  the  optional  redemption by the Holding Company of the
Junior  Subordinated  Debentures  in  whole  or in part. Any redemption would be
subject  to  the  receipt  of  regulatory  approvals.

NOTE 9 - SHORT-TERM BORROWINGS AND LINES OF CREDIT

From time to time, the Bank may borrow funds on an overnight or short-term basis
to  manage  its liquidity needs. At March 31, 2006, the Bank had agreements with
correspondent  banks  whereby  it could borrow up to $16 million on an unsecured
basis.

In  addition,  as  a member of the Federal Home Loan Bank of New York (FHLB) and
the  Federal Reserve Bank of New York (FRB), the Bank can also borrow from these
institutions  on  a secured basis. At March 31, 2006, the Bank had $23.5 million
of  FHLB  advances  outstanding  and  had  available  collateral  consisting  of
investment  securities  to  support  total additional borrowings of $295 million
from  the  FHLB  and  FRB.


                                       12
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 9 - SHORT-TERM BORROWINGS AND LINES OF CREDIT, CONTINUED

The  following  is  a  summary  of  certain  information  regarding  short-term
borrowings  in  the  aggregate:

<TABLE>
<CAPTION>
                                                       Quarter Ended
                                                         March 31,
                                                     ------------------
($in thousands)                                        2006      2005
-----------------------------------------------------------------------
<S>                                                  <C>       <C>
Balance at period end  (1)                           $23,500   $15,000
Maximum amount outstanding at any month end          $23,500   $17,000
Average outstanding balance for the period           $ 1,522   $13,911
Weighted-average interest rate paid for the period      5.06%     2.62%
Weighted-average interest rate at period end            5.06%     2.96%
-----------------------------------------------------------------------
<FN>
(1) The balance at March 31, 2006 represented FHLB advances that mature in April
2006.
</TABLE>


NOTE 10 - COMMON STOCK WARRANTS

At  March  31,  2006,  there were 696,465 common stock warrants outstanding that
entitle  its  holder,  the Chairman of the Board of the Company, to purchase one
share  of  the Holding Company's Class A or Class B common stock as the case may
be  for  each  warrant.  All  warrants  are  vested  and  currently exercisable.

Data  concerning  common  stock  warrants  is  as  follows:

<TABLE>
<CAPTION>
                                                       Exercise Price Per Warrant
                                                       ---------------------------          Wtd-Avg
Class A Common Stock Warrants:                                               $6.67   Exercise Price
---------------------------------------------------------------------------------------------------
<S>                                                    <C>                          <C>
Outstanding at December 31, 2005 and March 31, 2006                        501,465  $          6.67
Remaining contractual life in years at March 31, 2006                          0.8
---------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                     Exercise Price Per Warrant
                                                     --------------------------       Total          Wtd-Avg
Class B Common Stock Warrants:                               $6.67       $10.00    Warrants   Exercise Price
------------------------------------------------------------------------------------------------------------
<S>                                                    <C>          <C>          <C>         <C>
Outstanding at December 31, 2005 and March 31, 2006        145,000       50,000     195,000  $          7.52
Remaining contractual life in years at March 31, 2006          1.8          1.8         1.8
------------------------------------------------------------------------------------------------------------
</TABLE>

Effective  January  1,  2006,  the  Company adopted SFAS No. 123-R, "Share-Based
Payment"  which replaces SFAS 123 and supersedes APB No. 25. SFAS 123-R requires
companies  to  recognize  in  the  income statement the grant-date fair value of
stock  options  and  other  equity-based  compensation  issued  to employees and
directors, but expresses no preference for a type of valuation model. There were
no  grants  of  warrants  or  options  in  the  first  quarter  of  2006  and no
compensation expense recorded in any of the reporting periods in connection with
the  Company's  outstanding  warrants.

NOTE 11 - EARNINGS PER SHARE (EPS)

Basic  and diluted EPS are calculated in accordance with SFAS No. 128, "Earnings
per  Share."  Basic  EPS  is  calculated  by  dividing  net  earnings  by  the
weighted-average  number  of  shares of common stock outstanding. Diluted EPS is
calculated  by  dividing adjusted net earnings by the weighted-average number of
shares  of  common  stock and dilutive potential common stock shares that may be
outstanding  in  the  future.

Potential  common stock shares consist of shares that may arise from outstanding
dilutive  common  stock  warrants  (the  number  of  which is computed using the
"treasury stock method") and from outstanding convertible debentures (the number
of which is computed using the "if converted method"). Diluted EPS considers the
potential  dilution  that  could occur if the Company's outstanding common stock
warrants  and  convertible debentures were converted into common stock that then
shared  in  the  Company's  earnings  (as  adjusted for interest expense, net of
taxes,  that  would  no  longer  occur  if  the  debentures  were  converted).


                                       13
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED
--------------------------------------------------------------------------------
NOTE 11 - EARNINGS PER SHARE (EPS), CONTINUED

Net  earnings  applicable  to  common  stock  and the weighted-average number of
shares used for basic and diluted earnings per share computations are summarized
in  the  table  that  follows:

<TABLE>
<CAPTION>
                                                                              Quarter Ended
                                                                                March 31,
                                                                         ----------------------
($in thousands, except share and per share amounts)                         2006        2005
-----------------------------------------------------------------------------------------------
<S>                                                                      <C>         <C>
Basic Earnings Per Share:
  Net earnings applicable to common stockholders                         $    6,420  $    3,248
  Average number of common shares outstanding                             7,825,746   6,273,843
-----------------------------------------------------------------------------------------------
Basic Earnings Per Share                                                 $     0.82  $     0.52
-----------------------------------------------------------------------------------------------
Diluted Earnings Per Share:
  Net earnings applicable to common stockholders                         $    6,420  $    3,248
  Adjustment to net earnings from assumed conversion of debentures (1)           40          55
                                                                         ----------------------
  Adjusted net earnings for diluted earnings per share computation       $    6,460  $    3,303
                                                                         ----------------------
Average number of common shares outstanding:
  Common shares outstanding                                               7,825,746   6,273,843
  Potential dilutive shares resulting from exercise of warrants (2)         308,888     255,207
  Potential dilutive shares resulting from conversion of debentures (3)     212,149     342,719
                                                                         ----------------------
Total average number of common shares outstanding used for dilution       8,346,783   6,871,769
-----------------------------------------------------------------------------------------------
Diluted Earnings Per Share                                               $     0.77  $     0.48
-----------------------------------------------------------------------------------------------
<FN>
(1)  Represents  interest  expense  on  dilutive  convertible debentures, net of
     taxes,  that  would  not  occur  if  they  were  assumed  converted.
(2)  All  outstanding  warrants  were  considered  for  the  EPS  computations.
(3)  Convertible  debentures  (principal  and  accrued  interest) outstanding at
     March  31,  2006  and  2005  totaling  $3.3  million  and  $4.8  million,
     respectively,  were  convertible into common stock at a price of $16.00 per
     share  in  2006  and  $14.00  per  share in 2005 and resulted in additional
     common  shares  (based  on  average  balances  outstanding).
</TABLE>

NOTE 12 - OFF-BALANCE SHEET FINANCIAL INSTRUMENTS

The  Company  is a party to financial instruments with off-balance sheet risk in
the  normal  course  of  business  to meet the financing needs of its customers.
These  instruments are in the form of commitments to extend credit, unused lines
of  credit  and  standby letters of credit, and may involve, to varying degrees,
elements of credit and interest rate risk in excess of the amounts recognized in
the  consolidated financial statements. The Company's maximum exposure to credit
risk  is  represented  by  the  contractual  amount  of  those  instruments.

Commitments  to extend credit are agreements to lend funds to a customer as long
as  there  is  no  violation  of any condition established in the contract. Such
commitments  generally  have fixed expiration dates or other termination clauses
and normally require payment of fees. Since some of the commitments are expected
to  expire  without  being  drawn  upon,  the  total  commitment amount does not
necessarily  represent  future  cash  requirements.  The  Company evaluates each
customer's  creditworthiness  on  a case-by-case basis. The amount of collateral
obtained  upon extension of credit is based on management's credit evaluation of
the  counterparty.  Standby letters of credit are conditional commitments issued
by  the Company to guarantee the performance of a customer to a third party. The
credit  risk  involved  in  issuing letters of credit is essentially the same as
that  involved  in  extending  loans  to  customers.

The contractual amounts of off-balance sheet financial instruments is summarized
as  follows:

<TABLE>
<CAPTION>
                                 At March 31,   At December 31,
                                 -------------  ----------------
     ($in thousands)                 2006             2005
     -----------------------------------------------------------
<S>                              <C>            <C>
     Unfunded loan commitments   $     153,101  $        101,597
     Available lines of credit             755               737
     Standby letters of credit             100               100
     -----------------------------------------------------------
                                 $     153,956  $        102,434
     -----------------------------------------------------------
</TABLE>


                                       14
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE  13  -  REGULATORY  CAPITAL

The Holding Company is subject to regulation, examination and supervision by the
FRB.  The Bank is also subject to regulation, examination and supervision by the
Federal  Deposit  Insurance Corporation (FDIC) and the Office of the Comptroller
of  the  Currency  of  the  United States of America (OCC). Intervest Securities
Corporation  is  subject  to regulation, examination and supervision by the U.S.
Securities  and  Exchange  Commission  (SEC)  and  the  National  Association of
Securities  Dealers  (NASD).

The  Company  (on  a  consolidated  basis)  and  the Bank are subject to various
regulatory  capital  requirements  administered by the federal banking agencies.
Failure  to  meet them can initiate certain mandatory and possibly discretionary
actions  by  the  regulators  that,  if undertaken, could have a direct material
effect  on  the  Company's  and  the  Bank's financial statements. Under capital
adequacy  guidelines  and the regulatory framework for prompt corrective action,
the  Company  and  the  Bank  must meet specific capital guidelines that involve
quantitative measures of their assets, liabilities and certain off-balance sheet
items as calculated under regulatory accounting practices. These capital amounts
are  also  subject  to  qualitative judgment by the regulators about components,
risk  weighting  and  other  factors.

Quantitative  measures established by the regulations to ensure capital adequacy
require the Company and the Bank to maintain minimum amounts and ratios of total
and  Tier  1  capital  to  risk-weighted assets and of Tier 1 capital to average
assets,  as  defined  by  the  regulations.

The  Federal  Reserve  on  March  1, 2005 issued a final rule that retains trust
preferred  securities in the Tier 1 capital of bank holding companies (BHC), but
with  stricter  quantitative  limits  and clearer qualitative standards. The new
rule provides a transition period for BHCs to meet the new, stricter limitations
within  regulatory  capital  by  allowing  the limits on restricted core capital
elements  to  become fully effective as of March 31, 2009. Until March 31, 2009,
BHCs  generally  must comply with the current Tier 1 capital limits. As of March
31,  2006  and  December  31,  2005, assuming the Company no longer included its
trust preferred securities in Tier 1 Capital, the Company would still exceed the
well  capitalized threshold under the regulatory framework for prompt corrective
action.

Management  believes,  as  of  March  31,  2006  and December 31, 2005, that the
Company  and  the  Bank  met all capital adequacy requirements to which they are
subject.  As  of  March  31,  2006, the most recent notification from the Bank's
regulators  categorized  the  Bank  as  a well-capitalized institution under the
regulatory framework for prompt corrective action, which requires minimum Tier 1
leverage  and  Tier  1  and  total  risk-based capital ratios of 5%, 6% and 10%,
respectively.  Management  is  not  aware  of  any  current conditions or events
outstanding  that  would  change  the  designation  from  well  capitalized.

At  March  31, 2006, the actual capital of the Bank on a percentage basis was as
follows:

<TABLE>
<CAPTION>
                                                              Actual     Minimum     To Be Considered
                                                              Ratios   Requirement   Well Capitalized
                                                              -------  ------------  -----------------
<S>                                                           <C>      <C>           <C>
     Total capital to risk-weighted assets                     12.67%         8.00%             10.00%
     Tier 1 capital to risk-weighted assets                    11.59%         4.00%              6.00%
     Tier 1 capital to total average assets - leverage ratio    9.85%         4.00%              5.00%
</TABLE>

At  March  31,  2006,  the  actual  capital  of  the Company (consolidated) on a
percentage  basis  was  as  follows:

<TABLE>
<CAPTION>
                                                              Actual     Minimum     To Be Considered
                                                              Ratios   Requirement   Well Capitalized
                                                              -------  ------------  ----------------
<S>                                                           <C>      <C>           <C>
     Total capital to risk-weighted assets                     14.45%         8.00%  NA
     Tier 1 capital to risk-weighted assets                    12.60%         4.00%  NA
     Tier 1 capital to total average assets - leverage ratio   10.89%         4.00%  NA
</TABLE>

Intervest  Securities  Corporation  is  subject to the SEC's Uniform Net Capital
Rule  [15c3-1  (a)  (2)  (vi)],  which  requires  the maintenance of minimum net
capital  of  $5,000.  At  March 31, 2006, Intervest Securities Corporation's net
capital  was  $505,000.


                                       15
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE  14  -  RECENT  ACCOUNTING  PRONOUNCEMENTS

SHARE-BASED  COMPENSATION.  In  December  2004,  the  FASB  issued  SFAS No. 123
(Revised  2004), "Share-Based Payment" (SFAS 123-R), which replaces the existing
SFAS  123  and supersedes APB No. 25. SFAS 123-R requires companies to recognize
in  the  income  statement  the grant-date fair value of stock options and other
equity-based  compensation  issued  to employees and directors, but expresses no
preference  for  a  type of valuation model. SFAS 123-R is effective for interim
and  annual  reporting periods beginning on January 1, 2006. SFAS 123-R does not
impact any of the Company's outstanding warrants at March 31, 2006, all of which
are  vested  and  were  issued  prior  to this new standard. The Company has not
issued  any  new  stock warrants and/or options to employees or directors in the
first  quarter of 2006. The Company will be required to recognize expense on new
stock warrants/options granted, or modified, which may have a material impact on
the  Company's  statement  of  earnings.

ACCOUNTING CHANGES AND ERROR CORRECTIONS.  In May 2005, the FASB issued SFAS No.
154 "Accounting Changes and Error Corrections." This statement requires entities
that  voluntarily  make  a  change  in accounting principle to apply that change
retrospectively  to  prior  periods'  financial statements, unless this would be
impracticable.  SFAS  No. 154 supersedes APB Opinion No. 20, Accounting Changes,
which previously required that most voluntary changes in accounting principle be
recognized by including in the current period's net income the cumulative effect
of  changing  to  the  new  accounting  principle.  SFAS  No.  154  also makes a
distinction  between  "retrospective application" of an accounting principle and
the "restatement" of financial statements to reflect the correction of an error.
Another  significant  change  in  practice under SFAS No. 154 will be that if an
entity  changes  its  method  of  depreciation,  amortization,  or depletion for
long-lived,  non-financial  assets, the change must be accounted for as a change
in  accounting estimate. Under APB Opinion No. 20, such a change would have been
reported as a change in accounting principle. SFAS No. 154 applies to accounting
changes  and  error  corrections  that  are made in fiscal years beginning after
December  15,  2005.  The Statement does not change the transition provisions of
any existing accounting pronouncements, including those that are in a transition
phase as of the effective date of this Statement. The adoption of this statement
on  January  1,  2006  did  not  impact  the  Company's  financial  statements.

ACCOUNTING FOR LOAN COMMITMENTS.  In March 2005, the SEC issued Staff Accounting
Bulletin  No.  105,  "Application  of Accounting Principles to Loan Commitments"
(SAB  105).  SAB  105 provides recognition guidance for entities that issue loan
commitments  related  to  the  origination  of fixed- and variable-rate mortgage
loans  that  will  be  held  for  sale  that are required to be accounted for as
derivative instruments. Currently, loan commitments that the Company enters into
would  not  be  required to be accounted for as derivative instruments under SAB
105.

CONCENTRATION  OF  CREDIT RISKS.  In December 2005, the FASB issued Statement of
Position  ("SOP")  94-6-1,  "Terms  of  Loan  Products  That  May Give Rise to a
Concentration  of Credit Risk." This statement addresses the circumstances under
which the terms of loan products give rise to a concentration of credit risk and
related  disclosures  and accounting considerations. It is intended to emphasize
the  requirement  to assess the adequacy of disclosures for all lending products
and  the  effect  of changes in market or economic conditions on the adequacy of
those  disclosures.  SOP  94-6-1 is effective for all periods after December 19,
2005.  The  adoption of this SOP on January 1, 2006 did not impact the Company's
financial  statements.

IMPAIRMENT. In November 2005, the FASB issued Staff Position ("FSP") 115-1, "The
Meaning  of  Other-Than-Temporary  Impairment  and  Its  Application  to Certain
Investments,"  which  superseded  Emerging Issues Task Force Issue ("EITF") 03-1
and  related  amendments  to  EITF  03-1.  The  guidance in FSP 115-1 outlines a
three-step  model  for  identifying  investment impairments regarding impairment
measurement,  other-than-temporary  impairment  evaluation  and  recognition  of
other-than-temporary  impairment  losses and subsequent accounting. The FSP also
carries forward the disclosure requirements of EITF 03-1. FSP 115-1 is effective
for  periods  beginning  after  December  15,  2005. The adoption of this FSP on
January  1,  2006  did  not  impact  the  Company's  financial  statements.


                                       16
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES

             REVIEW BY INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     Hacker,  Johnson  & Smith, P.A., P.C., the Company's independent registered
public  accounting  firm,  has made a limited review of the financial data as of
March  31,  2006  and for the three month periods ended March 31, 2006, and 2005
presented  in this document, in accordance with the standards established by the
Public  Company  Accounting  Oversight  Board.

     The  report  of  Hacker,  Johnson & Smith, P.A., P.C. furnished pursuant to
Article  10  of  Regulation  S-X  is  included  herein.


                                       17
<PAGE>
             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board  of  Directors  and  Stockholders
Intervest  Bancshares  Corporation
New  York,  New  York:

We  have  reviewed  the  accompanying  condensed  consolidated  balance sheet of
Intervest  Bancshares  Corporation  and Subsidiaries (the "Company") as of March
31,  2006 and the related condensed consolidated statements of earnings, changes
in  stockholders'  equity and cash flows for three month periods ended March 31,
2006  and 2005. These interim financial statements are the responsibility of the
Company's  management.

We  conducted our reviews in accordance with the standards of the Public Company
Accounting  Oversight  Board  (United  States).  A  review  of interim financial
information  consists principally of applying analytical procedures to financial
data  and  making  inquiries of persons responsible for financial and accounting
matters.  It  is  substantially  less  in  scope  than  an  audit  conducted  in
accordance  with the standards of the Public Company Accounting Oversight Board,
the  objective  of which is the expression of an opinion regarding the financial
statements  taken  as  a  whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the condensed consolidated financial statements referred to above for
them  to  be  in  conformity with U.S. generally accepted accounting principles.

We  have  previously  audited,  in  accordance  with the standards of the Public
Company  Accounting  Oversight  Board,  the  consolidated  balance  sheet of the
Company  as  of  December  31,  2005, and the related consolidated statements of
earnings, changes in stockholders' equity and cash flows for the year then ended
(not  presented  herein); and in our report dated February 3, 2006, we, based on
our  audit  expressed  an  unqualified  opinion  on those consolidated financial
statements.  In  our  opinion,  the  information  set  forth in the accompanying
condensed  consolidated  balance sheet as of December 31, 2005 is fairly stated,
in  all  material  respects,  in relation to the consolidated balance sheet from
which  it  has  been  derived.


/s/ Hacker, Johnson & Smith, P.A., P.C.
---------------------------------------
HACKER, JOHNSON & SMITH, P.A.,P.C.
Tampa, Florida
April 27, 2006


                                       18
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

                                    OVERVIEW
                                    --------

The  following  management's  discussion  of  financial condition and results of
operations  of  Intervest Bancshares Corporation and subsidiaries should be read
in  conjunction with the accompanying quarterly condensed consolidated financial
statements  in  this  report on Form 10-Q as well as the entire Annual Report on
Form  10-K  for  the  year  ended  December  31,  2005.

Intervest  Bancshares  Corporation  has  three  wholly  owned  consolidated
subsidiaries  -  Intervest  National  Bank,  Intervest  Mortgage Corporation and
Intervest  Securities  Corporation  (hereafter  referred  to collectively as the
"Company"  on  a  consolidated  basis).  Intervest  Bancshares  Corporation  and
Intervest National Bank may be referred to individually as the "Holding Company"
and  the  "Bank,"  respectively.  Intervest Bancshares Corporation also has four
wholly  owned  unconsolidated subsidiaries, Intervest Statutory Trust I, II, III
and  IV,  which  were  formed in connection with the issuance of trust preferred
securities.  For  a  discussion  of  the  Company's  business, see note 2 to the
condensed  consolidated  financial  statements  in  this  report.

The  Company's  principal revenues are derived from interest, dividends and fees
earned  on  its  interest-earning assets, which are comprised of mortgage loans,
securities  and  other  short-term investments. The Company's principal expenses
consist  of  interest  paid  on  its  interest-bearing  liabilities,  which  are
comprised  of  deposits,  debentures  and  other  short-term borrowings, and its
operating  and  general  expenses  and  income  tax  expense.

The  Company's profitability depends primarily on its net interest income, which
is  the  difference  between interest income generated from its interest-earning
assets  and  the  interest expense incurred on its interest-bearing liabilities.
Net  interest  income  is  dependent upon the interest-rate spread, which is the
difference  between  the average yield earned on interest-earning assets and the
average  rate paid on interest-bearing liabilities. When interest-earning assets
approximate  or  exceed interest-bearing liabilities, any positive interest-rate
spread  will  generate net interest income. The interest-rate spread is impacted
by  interest  rates,  deposit  flows  and  loan  demand.

The  Company's  profitability  is  also affected by the level of its noninterest
income  and  expenses,  provision  for  loan  losses  and  income  tax  expense.
Noninterest  income  consists  mostly  of loan and other banking fees as well as
income  from loan prepayments. When a mortgage loan is repaid prior to maturity,
the  Company  may recognize prepayment income, which consists of the recognition
of  unearned  fees  associated  with  such  loans  at the time of payoff and the
receipt of additional prepayment fees and interest in certain cases. Many of the
Company's  mortgage  loans  include provisions relating to prepayment and others
prohibit  prepayment  of  indebtedness  entirely. The Company's income from loan
prepayments  fluctuates and cannot be predicted. Normally, loan prepayments tend
to  increase  during  periods  of  declining interest rates and tend to decrease
during  periods of increasing interest rates. However, given the nature and type
of  the  mortgage  loans  the  Company originates, including their short average
life,  the  Company  may  still  experience loan prepayments notwithstanding the
effects  of  movements  in  interest  rates. Noninterest expenses consist of the
following:  compensation and benefits, occupancy and equipment, data processing,
advertising,  professional  fees, FDIC and general insurance and other operating
and general expenses. The Company's profitability is also significantly affected
by  general  and  local  economic  conditions,  competition,  changes  in market
interest  rates,  government  policies  and  actions  of regulatory authorities.

Nearly  all  (99.9%) of the Company's loan portfolio is concentrated in mortgage
loans  secured  by  commercial and multifamily real estate properties (including
rental  and  cooperative/condominium  apartment  buildings,  office  buildings,
mixed-use  properties,  shopping  centers,  hotels,  restaurants,  industrial
properties,  parking  lots/garages and vacant land). These loans have an average
life  of  approximately three years. The Company tends to lend in areas that are
in the process of being revitalized, with a concentration of loans on properties
located in New York State and the State of Florida. A significant portion of the
residential  properties  are  located  in  New York City and are subject to rent
control  and  rent  stabilization  laws, which limit the ability of the property
owners  to  increase  rents.

All  loans  are  subject to the risk of default, otherwise known as credit risk,
which  represents the possibility of the Company not recovering amounts due from
its  borrowers.  A borrower's ability to make payments due under a mortgage loan
is  dependent upon the risks associated with real estate investments in general,
including  the  following: general or local economic conditions in the areas the
properties  are  located,  neighborhood  values, interest rates, real estate tax
rates,  operating expenses of the mortgaged properties, supply of and demand for
rental


                                       19
<PAGE>
units,  supply  of  and  demand  for  properties, ability to obtain and maintain
adequate  occupancy  of  the  properties,  zoning  laws,  governmental  rules,
regulations  and  fiscal  policies.  Additionally,  terrorist  acts  and  armed
conflicts,  such  as  the  war  on  terrorism,  and  natural  disasters, such as
hurricanes,  may  have  an  adverse  impact  on  economic  conditions.  Economic
conditions  affect  the  market value of the mortgaged properties underlying the
Company's  loans as well as the levels of rent and occupancy of income-producing
properties.

                          CRITICAL ACCOUNTING POLICIES
                          ----------------------------

The  Company believes that currently its only accounting policy that is critical
to  the  presentation  of  its  financial  statements and requires estimates and
judgment on the part of management relates to the determination of the Company's
allowance  for  loan  losses.  The  allowance  for  loan  losses  is  a critical
accounting  estimate  because  it is highly susceptible to change from period to
period  requiring  management  to make assumptions about future loan chargeoffs.
The  impact  of  a  sudden  large  chargeoff  could  deplete  the  allowance and
potentially require increased provisions to replenish the allowance, which could
negatively affect the Company's earnings and financial position. A more detailed
discussion  of  the factors and estimates used in computing the allowance can be
found under the caption "Critical Accounting Policies" on pages 32 and 33 of the
Company's  Annual  Report  on  Form  10-K  for the year ended December 31, 2005.

    COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2006 AND DECEMBER 31, 2005
    -------------------------------------------------------------------------

OVERVIEW
--------

Total  assets at March 31, 2006 increased to $1.79 billion, from $1.71 billon at
December  31,  2005.  Total  liabilities  at  March  31, 2006 increased to $1.65
billion,  from  $1.57  billion  at  December  31, 2005, and stockholders' equity
increased  to  $142.8 million at March 31, 2006, from $136.2 million at December
31,  2005.  Book  value  per common share increased to $18.22 at March 31, 2006,
from  $17.41  at  December  31,  2005.

Selected balance sheet information as of March 31, 2006 follows:

<TABLE>
<CAPTION>
                                                          Intervest    Intervest    Intervest      Inter-
                                               Holding    National     Mortgage    Securities     Company
($in thousands)                                Company      Bank         Corp.        Corp.     Amounts (1)    Consolidated
----------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>        <C>          <C>          <C>          <C>           <C>
Cash and cash equivalents                     $  3,696   $   23,236   $   19,122   $       507  $   (18,730)  $      27,831
Security investments                                 -      334,273            -             -            -         334,273
Loans receivable, net of deferred fees          11,401    1,297,634       92,973             -            -       1,402,008
Allowance for loan losses                          (85)     (15,175)        (282)            -            -         (15,542)
Investment in consolidated subsidiaries        189,859            -            -             -     (189,859)              -
All other assets                                 5,103       31,468        5,762             9         (388)         41,954
----------------------------------------------------------------------------------------------------------------------------
Total assets                                  $209,974   $1,671,436   $  117,575   $       516  $  (208,977)  $   1,790,524
----------------------------------------------------------------------------------------------------------------------------
Deposits                                      $      -   $1,448,430   $        -   $         -  $   (18,749)      1,429,681
Borrowed funds and related interest payable     66,987       23,745       87,748             -            -         178,480
All other liabilities                              159       37,352        2,382            11         (369)         39,535
----------------------------------------------------------------------------------------------------------------------------
Total liabilities                               67,146    1,509,527       90,130            11      (19,118)      1,647,696
----------------------------------------------------------------------------------------------------------------------------
Stockholders' equity                           142,828      161,909       27,445           505     (189,859)        142,828
----------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity    $209,974   $1,671,436   $  117,575   $       516  $  (208,977)  $   1,790,524
----------------------------------------------------------------------------------------------------------------------------
<FN>
(1)  All significant intercompany balances and transactions are eliminated in consolidation. Such amounts arise largely from
     intercompany deposit accounts and investments in subsidiaries.
</TABLE>

A  comparison  of  selected  balance  sheet  information  follows:

<TABLE>
<CAPTION>
                                                                     At March 31, 2006          At December 31, 2005
                                                                 --------------------------  --------------------------
                                                                  Carrying        % of        Carrying        % of
($in thousands)                                                     Value     Total Assets      Value     Total Assets
-----------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>          <C>            <C>          <C>
Cash and cash equivalents                                        $    27,831           1.6%  $    56,716           3.3%
Security investments                                                 334,273          18.7       256,749          15.0
Loans receivable, net of deferred fees and loan loss allowance     1,386,466          77.4     1,352,805          79.3
All other assets                                                      41,954           2.3        40,153           2.4
-----------------------------------------------------------------------------------------------------------------------
Total assets                                                     $ 1,790,524         100.0%  $ 1,706,423         100.0%
-----------------------------------------------------------------------------------------------------------------------
Deposits                                                         $ 1,429,681          79.8%  $ 1,375,330          80.6%
Borrowed funds and related interest payable                          178,480          10.0       155,725           9.1
All other liabilities                                                 39,535           2.2        39,190           2.3
-----------------------------------------------------------------------------------------------------------------------
Total liabilities                                                  1,647,696          92.0     1,570,245          92.0
-----------------------------------------------------------------------------------------------------------------------
Stockholders' equity                                                 142,828           8.0       136,178           8.0
-----------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                       $ 1,790,524         100.0%  $ 1,706,423         100.0%
-----------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       20
<PAGE>
CASH  AND  CASH  EQUIVALENTS
----------------------------

Cash  and  cash  equivalents  decreased to $27.8 million at March 31, 2006, from
$56.7  million  at  December  31, 2005. The decrease reflected the investment of
funds  into  loans  and  securities.

SECURITY  INVESTMENTS
---------------------

Securities  as  to  which  the  Company  has  the  intent and ability to hold to
maturity  are  classified  as  held  to  maturity and carried at amortized cost.
Currently,  only  the  Bank  holds such security investments, which increased to
$328.0  million at March 31, 2006, from $251.5 million at December 31, 2005. The
increase  reflected  new  purchases  exceeding  maturities  and calls during the
period.  The  Bank  continues  to invest in short-term (up to 5 year maturities)
U.S.  government agency debt obligations to emphasize liquidity and to currently
target  its  loan-to-deposit ratio at approximately 85%. This ratio stood at 87%
at  March  31,  2006.

At  March  31, 2006, the held-to-maturity portfolio consisted of short-term debt
obligations  of  the  Federal  Home Loan Bank, Federal Farm Credit Bank, Federal
National  Mortgage Association and Federal Home Loan Mortgage Corporation with a
weighted-average yield of 3.88% and a weighted-average remaining maturity of 1.4
years,  compared to 3.26% and 1.1 years, respectively, at December 31, 2005. The
securities  are  fixed  rate or have predetermined scheduled rate increases, and
some  have  call  features that allow the issuer to call the security before its
stated  maturity  without  penalty.

At  March  31,  2006  and  December  31,  2005, the held-to-maturity portfolio's
estimated  fair  value  was  $325.3 million and $249.1 million, respectively. At
March  31,  2006,  the held-to-maturity portfolio had unrealized losses totaling
$2.7  million. The Bank has the ability and intent to hold the securities in the
portfolio  for  a period of time sufficient for the fair value of the securities
to  recover.  To  date, the Bank has always recovered the cost of its investment
securities  upon  maturity.

In  order  for the Bank to be a member of the Federal Reserve Bank (FRB) and the
Federal  Home  Loan Bank of New York (FHLB), the Bank maintains an investment in
their  capital  stock,  which  amounted  to  $3.4  million  and  $2.9  million,
respectively,  at March 31, 2006. The FRB stock currently pays a dividend of 6%,
while  the FHLB stock dividend fluctuates and most recently was 5.11%. The total
investment,  which  amounted to $6.3 million at March 31, 2006, compared to $5.2
million  at  December 31, 2005, fluctuates based on the Bank's capital level for
the  FRB  stock  and  the  Bank's  loans  and  borrowings  for  the  FHLB stock.

LOANS RECEIVABLE, NET OF DEFERRED FEES AND ALLOWANCE FOR LOAN LOSSES
--------------------------------------------------------------------

Loans  receivable,  net  of  deferred  fees  and  the allowance for loan losses,
increased  to $1.39 billion at March 31, 2006 from $1.35 billion at December 31,
2005.  The growth reflected new mortgage loan originations secured by commercial
and  multifamily  real  estate  exceeding  principal  repayments.  New  loan
originations totaled $144 million in the first quarter of 2006, compared to $151
million  in  the  first  quarter  of  2005.

Nearly  all  (99.9%) of the Company's loan portfolio is concentrated in mortgage
loans  secured  by  commercial and multifamily real estate properties (including
rental  and  cooperative/condominium  apartment  buildings,  office  buildings,
mixed-use  properties,  shopping  centers,  hotels,  restaurants,  industrial
properties, parking lots/garages and vacant land). At March 31, 2006, such loans
consisted  of 540 loans with an aggregate principal balance of $1.41 billion and
an average principal size of $2.6 million. Loans with principal balances of $5.0
million  or more aggregated to 70 loans or $658.2 million, with the largest loan
amounting  to  $20.5  million.

At  March 31, 2006, there were three multifamily real estate loans totaling $1.7
million  on  nonaccrual  status,  compared to two loans totaling $0.7 million at
December 31, 2005. With respect to two of these loans totaling $0.7 million, the
borrower  declared bankruptcy and the Bankruptcy Trustee has sold the properties
collateralizing  the  loans.  The proceeds of the sale are sufficient to provide
for  repayment  of  the  Company's recorded investment and the Company is taking
appropriate  action  to  obtain  the  proceeds from the Bankruptcy Trustee. With
respect  to  the  remaining loan amounting to $1.0 million, a foreclosure action
has  been  commenced  for  non-payment. Nonaccrual loans are considered impaired
under the criteria of SFAS No. 114, but no valuation allowance was maintained at
any  time  since  the  Company  believes  that  the  estimated fair value of the
underlying  properties  exceeded  its recorded investment. At March 31, 2006 and
December  31,  2005,  there  were  no  other  impaired  loans.

At  March  31,  2006  and  December  31,  2005, there were $1.5 million and $2.6
million,  respectively,  of  loans  ninety  days  past  due  and  still accruing
interest.  These  loans  were deemed by management to be well secured and in the


                                       21
<PAGE>
process  of  collection. The amount at March 31, 2006 represented two loans that
are  past  their  maturity date, but in each case the borrower continues to make
monthly  payments  of  interest  and  principal. Based upon discussions with the
borrowers,  it  is  anticipated  that  these  loans  will  be  repaid in full or
refinanced  in  the  near  term.

At  March  31,  2006,  the  allowance for loan losses amounted to $15.5 million,
compared  to $15.2 million at December 31, 2005. The allowance represented 1.11%
of total loans (net of deferred fees) outstanding at March 31, 2006 and December
31,  2005.  The increase in the allowance was due to provisions aggregating $0.3
million during the period resulting largely from net loan growth (which amounted
to  $33.2  million  from  December  31,  2005).  For a further discussion of the
criteria  the  Company  uses to determine the adequacy of the allowance, see the
section  entitled  "Critical  Accounting  Policies"  included  in  this  report.

ALL OTHER ASSETS
----------------

All  other  assets  increased  to  $42.0  million  at March 31, 2006, from $40.2
million  at  December 31, 2005, primarily due to an increase in accrued interest
receivable, which fluctuates based on the amount of loans, investments and other
interest-earning  assets  outstanding  and  the  timing  of  interest  payments
received.  The  increase  was  due  to  the  growth  in  these  assets.

DEPOSITS
--------

Deposits  increased  to  $1.43  billion at March 31, 2006, from $1.38 billion at
December  31,  2005,  reflecting increases in certificate of deposit accounts of
$33.4  million  and  an  increase in checking, savings and money market accounts
totaling  $21.0  million.

At  March  31,  2006, certificate of deposit accounts totaled $1.15 billion, and
checking,  savings and money market accounts aggregated $277.7 million. The same
categories  of  deposit  accounts  totaled  $1.12  billion  and  $256.8 million,
respectively,  at December 31, 2005. Certificate of deposit accounts represented
81% of total deposits at March 31, 2006 and December 31, 2005. At March 31, 2006
and December 31, 2005, certificate of deposit accounts included $40.5 million of
brokered  deposits.

BORROWED  FUNDS  AND  RELATED  INTEREST  PAYABLE
------------------------------------------------

At  March  31,  2006,  borrowed  funds and related interest payable increased to
$178.5 million from $155.7 million at December 31, 2005. The increase was due to
$23.5  million of short-term borrowings in March 2006 from the Federal Home Loan
Bank  of  New  York  by  the  Bank.

ALL  OTHER  LIABILITIES
-----------------------

All  other  Liabilities  remained relatively unchanged at $39.5 million at March
31,  2006,  compared  to  $39.2  million  at  December  31,  2005.

STOCKHOLDERS'  EQUITY
---------------------

Stockholders'  equity increased to $142.8 million at March 31, 2006, from $136.2
million  at  December  31,  2005  as  follows:

<TABLE>
<CAPTION>
                                                                                               Per
     ($in thousands)                                                      Amount    Shares    Share
     -----------------------------------------------------------------------------------------------
<S>                                                                      <C>       <C>        <C>
     Stockholders' equity at December 31, 2005                           $136,178  7,823,058  $17.41
     Net earnings for the period                                            6,420          -       -
     Convertible debentures converted at election of debenture holders        230     14,584   15.75
     -----------------------------------------------------------------------------------------------
     Stockholders' equity at March 31, 2006                              $142,828  7,837,642  $18.22
     -----------------------------------------------------------------------------------------------
</TABLE>


                                       22
<PAGE>
           COMPARISON OF RESULTS OF OPERATIONS FOR THE QUARTERS ENDED
           ---------------------------------------------------------
                            MARCH 31, 2006 AND 2005
                            -----------------------

OVERVIEW
--------

Consolidated  net  earnings  for  the  first  quarter  of 2006 increased by $3.2
million,  or  100%,  to  $6.4  million,  or  $0.77  per diluted share, from $3.2
million,  or $0.48 per diluted share, in the first quarter of 2005. The earnings
per  share  calculation  for  the  2006  period  included  a  greater  number of
outstanding  shares  resulting  primarily  from a public offering of 1.4 million
shares  of  Class  A  common  stock  completed  in  the  third  quarter of 2005.

The  $3.2  million  increase  in  consolidated earnings reflected a $4.2 million
increase  in  net  interest  and  dividend  income,  a  $1.2 million increase in
noninterest income and a $0.7 million decrease in the provision for loan losses,
partially  offset  by  a  $2.5 million increase in income tax expense and a $0.4
million  increase  in  noninterest  expenses.

The  Company's  efficiency  ratio,  which is a measure of its ability to control
expenses as a percentage of its revenues, continues to be favorable and improved
to  19% in the first quarter of 2006, from 26% in the first quarter of 2005. The
Company's  return  on  average  assets  and  equity  also increased to 1.47% and
18.55%,  respectively,  in  the 2006 first quarter, from 0.94% and 14.25% in the
2005  first  quarter.

Selected  information  regarding  results of operations for the first quarter of
2006  follows:

<TABLE>
<CAPTION>
                                             Intervest   Intervest    Intervest                 Inter-
                                             National     Mortgage    Securities    Holding    Company
($in thousands)                                Bank        Corp.        Corp.       Company   Amounts(2)   Consolidated
------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>          <C>         <C>           <C>        <C>          <C>
Interest and dividend income                $   27,456   $    2,685  $         5   $    198   $     (278)  $      30,066
Interest expense                                14,860        1,782            -      1,216         (278)         17,580
                                            ----------------------------------------------------------------------------
Net interest and dividend income                12,596          903            5     (1,018)           -          12,486
Provision for loan losses                          329           32            -          -            -             361
Noninterest income                               1,933        1,439            -        119       (1,409)          2,082
Noninterest expenses                             3,281          769            5        150       (1,409)          2,796
                                            ----------------------------------------------------------------------------
Earnings before taxes                           10,919        1,541            -     (1,049)           -          11,411
Provision for income taxes                       4,763          712            -       (484)           -           4,991
------------------------------------------------------------------------------------------------------------------------
Net earnings                                $    6,156   $      829  $         -   $   (565)  $        -   $       6,420
------------------------------------------------------------------------------------------------------------------------
Intercompany dividends(1)                       (1,089)           -            -      1,089            -               -
------------------------------------------------------------------------------------------------------------------------
Net earnings after intercompany dividends   $    5,067   $      829  $         -   $    524   $        -   $       6,420
------------------------------------------------------------------------------------------------------------------------
Net earnings after intercompany dividends
  for the same period of 2005               $    2,092   $      625  $        (2)  $    533   $        -   $       3,248
------------------------------------------------------------------------------------------------------------------------
<FN>
(1)  Dividends  to  the  Holding  Company  from  the  Bank  provide  funds  for  the  debt  service  on the subordinated
     debentures-capital  securities,  which  is  included  in  the  Holding  Company's  interest  expense.
(2)  All  significant  intercompany  balances  and transactions are eliminated in consolidation. Such amounts arise from
     intercompany  deposit  accounts  and  management  and  service  agreements.
</TABLE>

NET  INTEREST  AND  DIVIDEND  INCOME
------------------------------------

Net interest and dividend income is the Company's primary source of earnings and
is  influenced  primarily  by  the  amount,  distribution  and  repricing
characteristics  of its interest-earning assets and interest-bearing liabilities
as  well  as  by  the  relative  levels  and  movements  of  interest  rates.

Net interest and dividend income increased to $12.5 million in the first quarter
of  2006,  from  $8.3  million in the first quarter of 2005. The improvement was
attributable  to  a  $371  million  increase  in average interest-earning assets
resulting  from  continued growth in loans of $321 million and a higher level of
security  and  short-term  investments  aggregating  $50  million. The growth in
average  assets  was  funded  by  $333  million  of  additional interest-bearing
deposits and a $47 million increase in stockholders' equity, partially offset by
a  $19  million  decrease  in  borrowed  funds.

The  Company's  net  interest  margin increased to 2.92% in the first quarter of
2006,  from 2.47% in the first quarter of 2005. The higher margin was due to the
Company's  yield on interest-earning assets increasing at a faster pace than its
cost  of  funds.  In  a  rising  rate environment, the yield on interest-earning
assets  increased  92  basis  points  to 7.04% in the 2006 quarter due to higher
yields  on  new  mortgage  loans  originated,  rate  increases  on  existing
variable-rate  loans  indexed  to  the  prime  rate, and higher yields earned on
security  and  other short-term investments. The cost of funds also increased by
57  basis points to 4.55% in the 2006 quarter primarily due to higher rates paid
on  deposit  accounts.


                                       23
<PAGE>
The  following  table  provides  information on: average assets, liabilities and
stockholders'  equity;  yields earned on interest-earning assets; and rates paid
on  interest-bearing liabilities for the periods indicated. The yields and rates
shown  are  based  on a computation of income/expense (including any related fee
income  or  expense)  for  each  period  divided  by  average  interest-earning
assets/interest-bearing  liabilities  during  each  period. Average balances are
derived  from  daily  balances.  Net interest margin is computed by dividing net
interest  and  dividend  income  by the average of total interest-earning assets
during  each  period.

<TABLE>
<CAPTION>
                                                   --------------------------------------------------------------------
                                                                              Quarter Ended
                                                   --------------------------------------------------------------------
                                                              March 31, 2006                    March 31, 2005
                                                   ---------------------------------  ---------------------------------
                                                     Average     Interest    Yield/     Average     Interest    Yield/
($in thousands)                                      Balance    Inc./Exp.   Rate(2)     Balance    Inc./Exp.   Rate(2)
-----------------------------------------------------------------------------------------------------------------------
<S>                                                <C>          <C>         <C>       <C>          <C>         <C>
ASSETS
Interest-earning assets:
  Loans (1)                                        $1,392,837   $   26,931     7.84%  $1,071,862   $   18,811     7.12%
  Securities                                          304,061        2,747     3.66      258,037        1,563     2.46
  Other interest-earning assets                        36,175          388     4.35       32,433          194     2.43
-----------------------------------------------------------------------------------------------------------------------
Total interest-earning assets                       1,733,073   $   30,066     7.04%   1,362,332   $   20,568     6.12%
-----------------------------------------------------------------------------------------------------------------------
Noninterest-earning assets                             15,656                             15,153
-----------------------------------------------------------------------------------------------------------------------
Total assets                                       $1,748,729                         $1,377,485
-----------------------------------------------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
  Interest checking deposits                       $    8,533   $       40     1.90%  $   13,441   $       52     1.57%
  Savings deposits                                     16,591          121     2.96       25,268          113     1.81
  Money market deposits                               237,374        2,293     3.92      194,375        1,059     2.21
  Certificates of deposit                           1,147,864       12,105     4.28      844,031        7,815     3.76
-----------------------------------------------------------------------------------------------------------------------
Total deposit accounts                              1,410,362       14,559     4.19    1,077,115        9,039     3.40
-----------------------------------------------------------------------------------------------------------------------
  FHLB Advances                                         1,522           19     5.06       13,911           90     2.62
  Debentures and related interest payable              92,284        1,908     8.38       99,197        2,060     8.42
  Debentures - capital securities                      61,856        1,090     7.15       61,856        1,090     7.15
  Mortgage note payable                                   228            4     7.12          241            4     7.00
-----------------------------------------------------------------------------------------------------------------------
Total borrowed funds                                  155,890        3,021     7.86      175,205        3,244     7.51
-----------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities                  1,566,252   $   17,580     4.55%   1,252,320   $   12,283     3.98%
-----------------------------------------------------------------------------------------------------------------------
Noninterest-bearing deposits                            6,504                              6,186
Noninterest-bearing liabilities                        37,543                             27,820
Stockholders' equity                                  138,430                             91,159
-----------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity         $1,748,729                         $1,377,485
-----------------------------------------------------------------------------------------------------------------------
Net interest and dividend income/spread                         $   12,486     2.49%               $    8,285     2.14%
-----------------------------------------------------------------------------------------------------------------------
Net interest-earning assets/margin                 $  166,821                  2.92%  $  110,012                  2.47%
-----------------------------------------------------------------------------------------------------------------------
Ratio of total interest-earning assets
  to total interest-bearing liabilities                  1.11                               1.09
-----------------------------------------------------------------------------------------------------------------------
OTHER RATIOS:
  Return on average assets (2)                           1.47%                              0.94%
  Return on average equity  (2)                         18.55%                             14.25%
  Noninterest expense to average assets (2)              0.64%                              0.69%
  Efficiency ratio (3)                                     19%                                26%
  Average stockholders' equity to average assets         7.92%                              6.62%
-----------------------------------------------------------------------------------------------------------------------
<FN>
(1) Includes nonaccrual loans.
(2) Annualized.
(3) Defined as noninterest expenses (excluding the provision for loan losses) as a percentage of net interest and
    dividend income plus noninterest income.
</TABLE>

The  following  table  provides  information  regarding  changes in interest and
dividend  income  and  interest  expense.  For each category of interest-earning
assets  and  interest-bearing  liabilities,  information  is provided on changes
attributable to (1) changes in rate (change in rate multiplied by prior volume),
(2)  changes  in  volume  (change  in  volume  multiplied by prior rate) and (3)
changes  in  rate-volume  (change  in  rate  multiplied  by  change  in volume).


                                       24
<PAGE>
<TABLE>
<CAPTION>
                                                           For the Quarter Ended March 31, 2006 vs 2005
                                             ----------------------------------------------------------------------
                                                              Increase (Decrease) Due To Change In:
                                             ----------------------------------------------------------------------
($in thousands)                                    Rate             Volume         Rate/Volume          Total
-------------------------------------------------------------------------------------------------------------------
<S>                                          <C>               <C>               <C>               <C>
Interest-earning assets:
  Loans                                      $         1,929   $         5,713   $           478   $         8,120
  Securities                                             774               283               127             1,184
  Other interest-earning assets                          156                23                15               194
-------------------------------------------------------------------------------------------------------------------
Total interest-earning assets                          2,859             6,019               620             9,498
-------------------------------------------------------------------------------------------------------------------
Interest-bearing liabilities:
  Interest checking deposits                              11               (19)               (4)              (12)
  Savings deposits                                        73               (39)              (26)                8
  Money market deposits                                  831               238               165             1,234
  Certificates of deposit                              1,097             2,856               337             4,290
-------------------------------------------------------------------------------------------------------------------
Total deposit accounts                                 2,012             3,036               472             5,520
-------------------------------------------------------------------------------------------------------------------
  FHLB advances                                           85               (81)              (75)              (71)
  Debentures and accrued interest payable                (10)             (146)                4              (152)
  Debentures - capital securities                          -                 -                 -                 -
  Mortgage note payable                                    -                 -                 -                 -
-------------------------------------------------------------------------------------------------------------------
Total borrowed funds                                      75              (227)              (71)             (223)
-------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities                     2,087             2,809               401             5,297
-------------------------------------------------------------------------------------------------------------------
Net change in interest and dividend income   $           772   $         3,210   $           219   $         4,201
-------------------------------------------------------------------------------------------------------------------
</TABLE>

PROVISION FOR LOAN LOSSES
-------------------------

The  provision  for loan losses decreased by $0.7 million to $0.3 million in the
first quarter of 2006, from $1.0 million in the first quarter of 2005. The lower
provision  was  primarily  due to a decrease in the rate of net loan growth over
the prior year period. Total loans outstanding grew by $33.2 million in the 2006
period,  compared  to  $79.9  million  in  the  2005  period.

NONINTEREST INCOME
------------------

Noninterest  income  increased  by  $1.2  million  to  $2.1 million in the first
quarter  of  2006,  from  $0.9  million in the first quarter of 2005. The higher
income  was  primarily  due  to  a  $1.0  million  increase  in  income from the
prepayment  of  mortgage  loans.  Income  from  the prepayment of mortgage loans
consists  of  the recognition of unearned fees associated with such loans at the
time  of  payoff and the receipt of prepayment penalties and interest in certain
cases.  The  Company's  income  from  loan  prepayments fluctuates and cannot be
predicted.  Normally,  loan  prepayments  tend  to  increase  during  periods of
declining  interest  rates  and  tend  to  decrease during periods of increasing
interest  rates.  However,  given  the nature and type of the mortgage loans the
Company  originates,  including  their short average life, the Company may still
experience loan prepayments notwithstanding the effects of movements in interest
rates.

NONINTEREST EXPENSES
--------------------

Noninterest  expenses  increased  by  $0.4  million to $2.8 million in the first
quarter  of  2006,  from $2.4 million in the first quarter of 2005. The increase
was  primarily to higher salaries and employee benefits expenses of $0.2 million
and  $0.2  million aggregate increase in all other operating expenses associated
with  the  Company's  growth.  The  Company  had 76 employees at March 31, 2006,
compared  to  67  at  March  31,  2005.

PROVISION FOR INCOME TAXES
--------------------------

The  provision for income taxes increased by $2.5 million to $5.0 million in the
first  quarter of 2006, from $2.5 million in the first quarter of 2005 due to an
increase  in  pre-tax  income.  The  Company's  effective tax rate (inclusive of
state  and  local taxes) amounted to 43.7% in the 2006 period, compared to 43.6%
in  the  2005  period.

               OFF-BALANCE SHEET AND OTHER FINANCING ARRANGEMENTS
               --------------------------------------------------

The Company is party to financial instruments with off-balance sheet risk in the
normal  course  of  business to meet the financing needs of its customers. For a
further  discussion of these financial instruments, see note 12 to the condensed
consolidated  financial  statements  included  in  this  report.


                                       25
<PAGE>
                         LIQUIDITY AND CAPITAL RESOURCES
                         -------------------------------

The Company manages its liquidity position on a daily basis to assure that funds
are  available  to  meet  operations,  loan  and investment commitments, deposit
withdrawals  and  the repayment of borrowed funds. The Company's primary sources
of  funds  consist of the following: retail deposits obtained through the Bank's
branch  offices  and through the mail; principal repayments of loans; maturities
and  calls  of  securities;  issuance of debentures; borrowings from the federal
funds  market  and  through  FHLB  advances; and cash flow provided by operating
activities.  For  additional detail concerning the Company's cash flows, see the
condensed  consolidated  statements  of  cash  flows  included  in  this report.

The Bank's lending business is dependent on its continuing ability to generate a
positive  interest rate spread between the rates offered on its deposits and the
yields  earned on its loans. The Bank needs to pay competitive interest rates to
attract and retain time deposits to fund its loan originations. The Bank has and
expects  to  continue to rely heavily on certificates of deposit (time deposits)
as  its  main  source  of  funds.  Total consolidated deposits amounted to $1.43
billion  at  March 31, 2006 and time deposits represented 81%, or $1.15 billion,
of  those deposits. Additionally, time deposits of $100,000 or more at March 31,
2006 totaled $388.1 million and included $40.5 million of brokered deposits. The
Bank  must  maintain  its  status  as  a  well-capitalized  insured  depository
institution  in  order  to  solicit  and accept, renew or roll over any brokered
deposit without restriction. Time deposits are the only deposit accounts offered
by  the  Bank  that  have  stated  maturity  dates. These deposits are generally
considered  to  be  rate  sensitive and have a higher cost than deposits with no
stated maturities, such as checking, savings and money market accounts. At March
31,  2006,  the  Bank  had $417.7 million of time deposits maturing by March 31,
2007.  The  Bank  expects  that  a substantial portion of these deposits will be
renewed  and stay with the Bank. The Bank has and expects to continue to rely on
capital  contributions  from  the  Holding  Company  to  increase its capital to
support  its  rapid  asset  growth.  The  Holding  Company made a total of $32.5
million  of  capital  contributions to the Bank during 2005. No contributions of
capital  were  made  in  the  first  quarter  of  2006.

The  Bank,  from  time  to  time, may borrow funds on an overnight or short-term
basis  to manage its liquidity needs. At March 31, 2006, the Bank had agreements
with  correspondent  banks  whereby  it  could  borrow  up  to $16 million on an
unsecured basis. In addition, as a member of the FHLB and FRB, the Bank can also
borrow from these institutions on a secured basis. In the first quarter of 2006,
the  Bank  borrowed a total of $23.5 million of short-term FHLB advances, all of
which  were  outstanding  at March 31, 2006. At December 31, 2005, there were no
outstanding  borrowings  from  any  of  the aforementioned sources. At March 31,
2006,  the  Bank had available collateral consisting of investment securities to
support  additional  total  borrowings  of  $295  million from the FHLB and FRB.

Intervest  Mortgage  Corporation  has  and  expects  to  continue to rely on the
issuance of its subordinated debentures in registered, best efforts offerings to
the  public  as a source of funds to support its loan originations. In addition,
as  the Bank's mortgage loan portfolio has grown, service fee income received by
Intervest  Mortgage  Corporation  from  the  Bank  has  comprised  an increasing
percentage  of  Intervest  Mortgage  Corporation's  cash  flow.  The  Bank has a
servicing  agreement  with  Intervest  Mortgage  Corporation, which is described
under  the caption "Liquidity and Capital Resources" on page 46 of the Company's
Annual  Report  of Form 10-K. In addition, from time to time, Intervest Mortgage
Corporation  has  also  received capital contributions from the Holding Company.
There  have  been  no  capital  contributions  since  August  2004.

Intervest Mortgage Corporation's lending business is dependent on its continuing
ability  to  sell  its  debentures  with  interest  rates that would result in a
positive  interest rate spread, which is the difference between yields earned on
its  loans  and  the  rates paid on its debentures. As detailed in note 7 to the
condensed  consolidated  financial  statements included in this report, at March
31,  2006,  $82.8  million  in  aggregate principal amount of Intervest Mortgage
Corporation's subordinated debentures were outstanding with fixed interest rates
that  range from 6.25% to 9.00% per annum and maturities that range from July 1,
2006  to  October  1,  2013.  In  the  first quarter of 2006, Intervest Mortgage
Corporation  did not repay or issue new debentures. At March 31, 2006, Intervest
Mortgage  Corporation  had  $16.0  million  of  debentures  and  related accrued
interest  payable  maturing  by  December  31,  2007 (of which $5.2 million were
repaid  early  on  May  1, 2006), which are expected to be repaid from cash flow
generated  from  maturities  of  existing mortgage loans, ongoing operations and
cash  on  hand.  Intervest  Mortgage Corporation anticipates completing a public
offering  of  up  to  $16.0  million in aggregate principal amount of additional
debentures  in  the  second  quarter  of  2006.


                                       26
<PAGE>
The  Holding  Company's  sources  of funds and capital to date have been derived
from  the  following: interest income from a limited portfolio of mortgage loans
and  short-term investments; monthly dividends from the Bank to service interest
expense  on  trust  preferred securities; monthly management fees from Intervest
Mortgage  Corporation and the Bank for providing these subsidiaries with certain
administrative  services;  the  issuance  of  its  common  stock  through public
offerings,  exercise  of  outstanding  common  stock  warrants and conversion of
outstanding  convertible  debentures; the issuance of trust preferred securities
through  its  wholly  owned  business  trusts;  and the direct issuance of other
subordinated  debentures  to  the public. At March 31, 2006, the Holding Company
did  not  have  any  debentures  maturing  by  December  31,  2007.

The  Holding  Company,  through  its  wholly  owned  business  trusts  Intervest
Statutory  Trust  I,  II,  III  and IV, issued in December 2001, September 2003,
March  2004  and September 2004, $15.0 million, respectively, of trust preferred
securities  for  a  total  of  $60  million  at both fixed and variable rates of
interest  that mature in 2031 or later. The total proceeds from these securities
have  been  invested in the Bank at various times through capital contributions.
The  Holding  Company  is required to make interest payments on the principal of
those  securities,  which  currently  amount  to $4.4 million annually. The Bank
provides  funds to Holding Company in the form of dividends for this purpose. At
March  31,  2006,  approximately $47.6 million of the trust preferred securities
qualified  as  regulatory  Tier  1 capital and the remainder qualified as Tier 2
capital  in  the  Holding  Company's  computation  of  regulatory  capital.

Additional  information  concerning  outstanding  time  deposits, debentures and
trust  preferred  securities, including interest rates and maturity dates can be
found  in  notes 6, 7 and 8 of the notes to the condensed consolidated financial
statements  included  in  this  report.

At  March  31,  2006, the Company's total commitments to lend aggregated to $154
million.  Although  there  is  no  certainty,  management  anticipates  that the
majority  of  these  loan commitments will be funded over the next 12 months. If
all  these  commitments  were  to  close, they would be funded by the sources of
funds  described  above. The Company considers its current liquidity and sources
of  funds  sufficient  to  satisfy  its  outstanding lending commitments and its
maturing  liabilities.  Management  is  not  aware  of any trends, known demand,
commitments  or  uncertainties  which  are expected to have a material impact on
future  operating  results,  liquidity  or  capital  resources.

                               REGULATORY CAPITAL
                               ------------------

The  Bank  is  subject  to  various regulatory capital requirements. The Federal
Deposit Insurance Corporation (FDIC) and other bank regulatory agencies use five
capital  categories ranging from well capitalized to critically undercapitalized
to  determine  various  matters,  including  prompt  corrective  action and each
institution's  FDIC  deposit  insurance  premiums.  These  categories  involve
quantitative  measures  of  a  bank's  assets,  liabilities,  and  certain
off-balance-sheet items as calculated under regulatory accounting practices. The
capital amounts and classifications are also subject to qualitative judgments by
the  regulators about components, risk weightings, and other factors. Failure to
meet  minimum  capital  requirements can initiate certain mandatory and possibly
additional  discretionary  actions  by the regulators that, if undertaken, could
have  a  direct  material  effect  on  the  Company's  consolidated  financial
statements.

The  Bank is required to maintain regulatory defined minimum Tier 1 leverage and
Tier  1and  total  risk-based  capital  ratio  levels of at least 4%, 4% and 8%,
respectively.  At  March 31, 2006 and December 31, 2005, management believes the
Bank met its capital adequacy requirements and is a well-capitalized institution
as  defined in the regulations, which require minimum Tier 1 leverage and Tier 1
and  total  risk-based ratios of 5%, 6% and 10%, respectively. Management is not
aware  of any conditions or events that would change the Bank's designation as a
well-capitalized  institution.

Information  regarding  the  Bank's  regulatory  capital  and  related ratios is
summarized  as  follows:

<TABLE>
<CAPTION>
                                               At March 31,    At December 31,
                                              --------------  -----------------
     ($in thousands)                               2006             2005
     --------------------------------------------------------------------------
<S>                                           <C>             <C>
     Tier 1 Capital                           $     161,909   $        156,842
     Tier 2 Capital                                  15,175             14,846
     --------------------------------------------------------------------------
     Total risk-based capital                 $     177,084   $        171,688
     --------------------------------------------------------------------------
     Net risk-weighted assets                 $   1,397,124   $      1,362,728
     Average assets for regulatory purposes   $   1,643,444   $      1,562,779
     --------------------------------------------------------------------------
     Tier 1 capital to average assets                  9.85%             10.04%
     Tier 1 capital to risk-weighted assets           11.59%             11.51%
     Total capital to risk-weighted assets            12.67%             12.60%
     --------------------------------------------------------------------------
</TABLE>


                                       27
<PAGE>
The  Holding  Company  on  a consolidated basis is subject to minimum regulatory
capital  requirements  administered by the FRB. These guidelines require a ratio
of  Tier 1 or Core Capital, as defined in the guidelines, to total risk-weighted
assets of at least 4% and a ratio of total capital to risk-weighted assets of at
least  8%.  The  guidelines  also  require a ratio of Tier 1 capital to adjusted
total  average  assets  of  not less than 3%. At March 31, 2006 and December 31,
2005,  management  believes  that  the  Holding Company met its capital adequacy
requirements.

Information  regarding  the  Company's  (consolidated)  regulatory  capital  and
related  ratios  is  summarized  below:

<TABLE>
<CAPTION>
                                               At March 31,    At December 31,
                                              --------------  -----------------
     ($in thousands)                               2006             2005
     --------------------------------------------------------------------------
<S>                                           <C>             <C>
     Tier 1 Capital (1)                       $     190,437   $        181,571
     Tier 2 Capital (1)                              27,933             29,788
     --------------------------------------------------------------------------
     Total risk-based capital                 $     218,370   $        211,359
     --------------------------------------------------------------------------
     Net risk-weighted assets                 $   1,511,064   $      1,466,027
     Average assets for regulatory purposes   $   1,748,729   $      1,673,832
     --------------------------------------------------------------------------
     Tier 1 capital to average assets                 10.89%             10.85%
     Tier 1 capital to risk-weighted assets           12.60%             12.39%
     Total capital to risk-weighted assets            14.45%             14.42%
     --------------------------------------------------------------------------
     <FN>
     (1)  There  are  $60 million of qualifying capital securities outstanding (total
          debentures  of $61.9 million issued to Statutory Trust I, II, III and IV by
          the  Holding Company less the Holding Company's investments in those trusts
          aggregating  $1.9  million). At March 31, 2006 and December 31, 2005, $47.6
          million  and  $45.4 million of those securities, respectively, was included
          in  Tier  1  Capital,  and  the  remaining  portion  was included in Tier 2
          Capital.
</TABLE>

The  Federal  Reserve  on  March  1, 2005 issued a final rule that retains trust
preferred  securities in the Tier 1 capital of bank holding companies (BHC), but
with  stricter  quantitative  limits  and clearer qualitative standards. The new
rule provides a transition period for BHCs to meet the new, stricter limitations
within  regulatory  capital  by  allowing  the limits on restricted core capital
elements  to  become  fully  effective  as  of  March  31,  2009.  For a further
discussion  of these changes, see page 49 of the Company's Annual Report on Form
10-K for the year ended December 31, 2005. As of March 31, 2006 and December 31,
2005,  assuming the Company no longer included its trust preferred securities in
Tier  1  Capital,  the Company would still exceed the well capitalized threshold
under  the  regulatory  framework  for  prompt  corrective  action.

Intervest  Securities  Corporation  is  subject  to  the Securities and Exchange
Commission's  (SEC)  Uniform  Net  Capital  Rule  [15c3-1  (a)  (2) (vi)], which
requires the maintenance of minimum net capital of $5,000. At March 31, 2006 and
December  31,  2005,  Intervest  Securities  Corporation's  net capital was $0.5
million.

                           SARBANES OXLEY ACT OF 2002
                           --------------------------

The  requirements  of  Section  404  of the Sarbanes Oxley Act and SEC rules and
regulations  require  an  annual  management  report  on  the Company's internal
controls  over financial reporting, including, among other matters, management's
assessment  of  the  effectiveness  of  the  Company's  internal  controls  over
financial  reporting,  and  an  attestation  report by the Company's independent
registered  public  accounting  firm  addressing  these  assessments.

Beginning  with  the  Company's  annual  report for the year ending December 31,
2006,  the  Company will have to include in its annual report on Form 10-K filed
with  the  SEC  a report of management regarding the Company's internal controls
over  financial  reporting  in  accordance  with  the  above  requirements.

In  this regard, the Company is in the process of documenting and evaluating its
internal  controls  over  financial  reporting  in  order  to  satisfy  these
requirements. The process includes the involvement of internal resources and the
retention  of  outside  consultants.  This process is designed to (i) assess and
document  the  adequacy of internal controls over financial reporting, (ii) take
steps  to improve control processes, where appropriate, and (iii) verify through
testing  that  controls  are functioning as documented. To date, the Company has
identified certain deficiencies in the design and operating effectiveness of its
internal  controls over financial reporting, and it believes that they have been
corrected or are in the process of being corrected. Although this process is not
completed,  management  is  not  aware  of  any  "significant  deficiencies"  or
"material  weaknesses"  in  the  Company's  internal  controls  over  financial
reporting,  as  defined  in  applicable  SEC  rules  and  regulations.


                                       28
<PAGE>
                         ASSET AND LIABILITY MANAGEMENT
                         ------------------------------

Interest  rate  risk  arises  from  differences  in  the repricing of assets and
liabilities  within  a given time period. The Company does not engage in trading
or  hedging activities, nor does it invest in interest rate derivatives or enter
into  interest  rate  swaps.  The  primary  objective  of  the  Company's
asset/liability  management strategy is to limit, within established guidelines,
the  adverse  impact of changes in interest rates on its net interest income and
capital.

The  Company  uses  "gap  analysis,"  which  measures  the  difference  between
interest-earning  assets and interest-bearing liabilities that mature or reprice
within  a  given  time  period,  to monitor its interest rate sensitivity. For a
further  discussion  of  gap  analysis,  including  the  factors that effect its
computation and results, see page 50 of the Company's Annual Report on Form 10-K
for  the  year  ended  December  31,  2005.

The  Company's  one-year  positive  interest  rate  sensitivity gap decreased to
$451.5  million,  or  25.2%  of  total  assets,  at  March 31, 2006, from $498.7
million,  or  29.2%  at  December  31,  2005.  The  decrease in the positive gap
primarily  reflects  an  increase  in  security  investments  with over one-year
maturities,  funded  by  increases  in money-market deposit accounts, short-term
borrowings  and  time  deposits  with  terms  of  less  than  one  year.

For  purposes  of  computing the gap, all deposits with no stated maturities are
treated  as  readily accessible accounts. However, if such deposits were treated
differently, the one-year gap would then change. The behavior of core depositors
may  not  necessarily  result  in the immediate withdrawal of funds in the event
deposit  rates  offered  by  the Bank did not change as quickly and uniformly as
changes  in  general  market rates. For example, if only 25% of deposits with no
stated  maturity  were  assumed to be readily accessible, the one-year gap would
have  been  a  positive 36.6% at March 31, 2006, compared to a positive 40.1% at
December  31,  2005.

The  table  that follows summarizes interest-earning assets and interest-bearing
liabilities as of March 31, 2006, that are scheduled to mature or reprice within
the  periods  shown.

<TABLE>
<CAPTION>
                                                  0-3       4-12    Over 1-4      Over 4
                                                  ---       ----    --------      ------
($in thousands)                                Months     Months       Years       Years        Total
-----------------------------------------------------------------------------------------------------
<S>                                         <C>        <C>        <C>         <C>         <C>
Loans (1)                                   $555,764   $410,826   $ 362,117   $  85,556   $1,414,263
Securities held to maturity (2)               69,872    114,892     143,210           -      327,974
Short-term investments                        19,133          -           -           -       19,133
FRB and FHLB stock                             2,860          -           -       3,439        6,299
-----------------------------------------------------------------------------------------------------
Total rate-sensitive assets                 $647,629   $525,718   $ 505,327   $  88,995   $1,767,669
-----------------------------------------------------------------------------------------------------
Deposit accounts (3):
  Interest checking deposits                $  8,903   $      -   $       -   $       -   $    8,903
  Savings deposits                            15,913          -           -           -       15,913
  Money market deposits                      246,431          -           -           -      246,431
  Certificates of deposit                     80,272    337,384     590,759     143,535    1,151,950
-----------------------------------------------------------------------------------------------------
  Total deposits                             351,519    337,384     590,759     143,535    1,423,197
-----------------------------------------------------------------------------------------------------
FHLB advances                                 23,500          -           -           -       23,500
Debentures and mortgage note payable (1)       3,500      2,500      89,892      52,190      148,082
Accrued interest on all borrowed funds (1)     3,437          -       3,099         362        6,898
-----------------------------------------------------------------------------------------------------
Total borrowed funds                          30,437      2,500      92,991      52,552      178,480
-----------------------------------------------------------------------------------------------------
Total rate-sensitive liabilities            $381,956   $339,884   $ 683,750   $ 196,087   $1,601,677
-----------------------------------------------------------------------------------------------------
GAP (repricing differences)                 $265,673   $185,834   $(178,423)  $(107,092)  $  165,992
-----------------------------------------------------------------------------------------------------
Cumulative GAP                              $265,673   $451,507   $ 273,084   $ 165,992   $  165,992
-----------------------------------------------------------------------------------------------------
Cumulative GAP to total assets                  14.8%      25.2%       15.3%        9.3%         9.3%
-----------------------------------------------------------------------------------------------------
<FN>
Significant  assumptions  used  in  preparing  the  preceding  gap  table  follow:

(1)  Floating-rate  loans  and  debentures payable are included in the period in
which  their  interest  rates  are  next  scheduled to adjust rather than in the
period  in  which  they  mature.  Fixed-rate  loans  and  debentures payable are
scheduled,  including  repayments,  according  to  their contractual maturities.
Deferred  loan  fees  are  excluded  from  this  analysis.
(2)  Securities  are  scheduled  according  to  the earlier of their contractual
maturity  or  the  date in which the interest rate is scheduled to increase. The
effects  of possible prepayments that may result from the issuer's right to call
a  security  before  its  contractual  maturity  date  are  not  considered.
(3) Interest checking, savings and money market deposits are regarded as readily
accessible  withdrawable  accounts;  and  certificates  of deposit are scheduled
through  their  maturity  dates.
</TABLE>


                                       29
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market  risk  is  the  risk  of  loss  from adverse changes in market prices and
interest  rates.  The  Company  has  not  engaged in and accordingly has no risk
related  to trading accounts, commodities, foreign exchange, hedging activities,
interest  rate  derivatives  or  interest  rate swaps. The Company's market risk
arises  primarily  from  interest  rate  risk  inherent  in  its  lending  and
deposit-taking  activities,  and the issuance of its debentures. The measurement
of market risk associated with financial instruments is meaningful only when all
related and offsetting on-and off-balance sheet transactions are aggregated, and
the  resulting net positions are identified. Disclosures about the fair value of
financial  instruments  as of December 31, 2005, which reflect changes in market
prices  and  rates,  can  be  found  in  note  20  to the consolidated financial
statements  included  in  the  Company's Annual Report on Form 10-K for the year
ended December 31, 2005. Management believes that there have been no significant
changes  in  the  Company's  market  risk  exposure  since  December  31,  2005.

Management  actively  monitors  and  manages  the  Company's  interest rate risk
exposure.  The  primary  objective  in  managing interest rate risk is to limit,
within  its  established  guidelines,  the adverse impact of changes in interest
rates  on  the  Company's  net  interest  income  and  capital.  For  a  further
discussion, see the section entitled "Asset and Liability Management" under Item
2  of  this  report.

ITEM 4.  CONTROLS AND PROCEDURES

The  Company's  management  evaluated,  with  the participation of its Principal
Executive  and Financial Officers, the effectiveness of the Company's disclosure
controls  and  procedures  (as  defined in Rule 13a-15(e) or 15d-15(e) under the
Securities  Exchange  Act  of  1934) as of the end of the period covered by this
report. Based on such evaluation, the Principal Executive and Financial Officers
have  concluded  that  the  Company's  disclosure  controls  and  procedures are
designed  to ensure that information required to be disclosed in the reports the
Company  files  or  furnishes  under  the  Securities  Exchange  Act  of 1934 is
recorded,  processed,  summarized and reported within the time periods specified
in  the  SEC's  rules and regulations, and are operating in an effective manner.
The  Company made no significant changes in its internal controls over financial
reporting  or  in  other  factors that could significantly affect these controls
subsequent  to  March  31,  2006.

PART II. OTHER INFORMATION

ITEM  1.  LEGAL  PROCEEDINGS

     Not  Applicable

ITEM 1A. RISK FACTORS

The  Company's  business  is  affected by a number of factors, including but not
limited to the impact of: interest rates; loan demand; loan concentrations; loan
prepayments;  dependence  on  brokers  and other sources for new loan referrals,
ability  to  raise  funds for investment; competition; general or local economic
conditions;  credit  risk  and  the  related  adequacy of the allowance for loan
losses;  terrorist  acts;  natural  disasters;  armed  conflicts;  environmental
liabilities, regulatory supervision and regulation and costs thereof; dependence
on  a  limited  number  of  key  personnel; and voting control held by a limited
number  of  stockholders  who  are  also  executive  officers  and  directors.

This  Item  1A  requires  disclosure  of  any material changes from risk factors
previously  disclosed in the Company's most recent Form 10-K. There have been no
material  changes  to the Company's risk factors disclosed in the "Risk Factors"
section  of the Company's Annual Report on Form 10-K for the year ended December
31,  2005,  where  such  factors  are  discussed  on  pages  22  through  26.
``
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

     Not  Applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     Not  Applicable

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not  Applicable

ITEM 5. OTHER INFORMATION

     Not  Applicable


                                       30
<PAGE>
ITEM 6. EXHIBITS

     The following exhibits are filed as part of this report.

31.0 Certification of the principal executive officer pursuant to Section 302 of
     The  Sarbanes-Oxley  Act  of  2002.

31.1 Certification of the principal financial officer pursuant to Section 302 of
     The  Sarbanes-Oxley  Act  of  2002.

32.0 Certification of the principal executive and financial officers pursuant to
     Section  906  of  The  Sarbanes-Oxley  Act  of  2002.

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has  duly  caused  this  report  to  be  signed on its behalf by the undersigned
thereunto  duly  authorized.

                                        INTERVEST BANCSHARES CORPORATION
                                        --------------------------------
                                        (Registrant)

Date: April 27, 2006                    By:    /s/ Jerome Dansker
                                        -------------------------
                                        Jerome Dansker, Chairman and Executive
                                        Vice President
                                        (Principal Executive Officer)


Date: April 27, 2006                    By:    /s/ Lowell S. Dansker
                                        ----------------------------
                                        Lowell S. Dansker, Vice Chairman,
                                        President and Treasurer
                                        (Principal Financial Officer)


                                       31