================================================================================

                     U.S. 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 JUNE 30, 2001


                          Commission File No. 000-23377

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


             Delaware                                           13-3699013
--------------------------------------                    ----------------------
(State or other jurisdiction of                             (I.R.S. employer
            incorporation)                                   identification no.)


                        10 Rockefeller Plaza, Suite 1015
                          New York, New York 10020-1903
      --------------------------------------------------------------------
                    (Address of principal executive offices)

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



Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 12, 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 the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date:

Title of Each Class:                     Shares Outstanding:
--------------------                     -------------------

Class A Common Stock, $1.00              3,544,629 Outstanding at August 1, 2001
---------------------------              ---------------------------------------
par value per share
-------------------

Class B Common Stock, $1.00              355,000 Outstanding at August 1, 2001
---------------------------              -------------------------------------
par value per share
-------------------
================================================================================

<PAGE>







                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES

                                    FORM 10-Q
                                  June 30, 2001

                                TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION                                               Page

  Item 1. Financial Statements

      Condensed  Consolidated Balance Sheets as of June 30, 2001 (Unaudited) and
        December 31, 2000 ...................................................  2

      Condensed Consolidated Statements of Earnings (Unaudited) for the Quarters
        and Six-Months Ended June 30, 2001 and 2000 .........................  3

      Condensed Consolidated  Statements of Comprehensive Income (Unaudited) for
        the Quarters and Six-Months Ended June 30, 2001 and 2000 ............  4

      Condensed  Consolidated  Statements  of  Changes in  Stockholders'  Equity
        (Unaudited) for the Six-Months Ended June 30, 2001 and 2000..........  5

      Condensed  Consolidated  Statements  of  Cash  Flows  (Unaudited)  for the
        Six-Months Ended June 30, 2001 and 2000..............................  6

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

      Review by Independent Certified Public Accountants .................... 10

      Report  on Review by Independent Certified Public Accountants ......... 11

  Item 2. Management's Discussion and Analysis of Financial Condition and
           Results of Operations ............................................ 13

  Item 3.  Quantitative  and Qualitative Disclosures about Market Risk....... 21

PART II. OTHER INFORMATION

  Item 1. Legal Proceedings.................................................. 22

  Item 2. Changes in Securities and Use of Proceeds.......................... 22

  Item 3. Defaults Upon Senior Securities.................................... 22

  Item 4. Submission of Matters to a Vote of Security Holders................ 22

  Item 5. Other Information.................................................. 22

  Item 6. Exhibits and Reports on Form 8-K .................................. 23


Signatures................................................................... 23

Private Securities Litigation Reform Act Safe Harbor Statement

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.  The following  factors are among those
that could cause actual results to differ  materially  from the  forward-looking
statements:  changes in general economic, market and regulatory conditions,  the
development  of an  interest  rate  environment  that may  adversely  affect the
Company's  interest rate spread,  other income or cash flow anticipated from the
Company's operations, investment and lending activities; and changes in laws and
regulations affecting banks and bank holding companies.



                                       1
<PAGE>

                Intervest Bancshares Corporation and Subsidiaries
                      Condensed Consolidated Balance Sheets
<TABLE>

                                   (Unaudited)
                                                                                                            June 30,    December 31,
($ in thousands, except par value)                                                                            2001          2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                        <C>            <C>
ASSETS
Cash and due from banks                                                                                    $   4,148      $   5,016
Federal funds sold                                                                                            49,145         20,268
Commercial paper                                                                                              10,625         17,125
Other short-term investments                                                                                   2,405            529
                                                                                                           -------------------------
    Total cash and cash equivalents                                                                           66,323         42,938
Securities available for sale at estimated fair value                                                         15,146         74,789
Time deposits with banks                                                                                         300              -
Securities held to maturity, net (estimated fair value of $16,668 and $20,978, respectively)                  16,664         20,970
Federal Reserve Bank stock, at cost                                                                              669            605
Loans receivable (net of allowance for loan losses of $2,868 and $2,768, respectively)                       310,202        263,558
Accrued interest receivable                                                                                    2,255          2,961
Premises and equipment, net                                                                                    5,731          5,731
Deferred income tax asset                                                                                        904          1,105
Deferred debenture offering costs                                                                              2,804          2,835
Other assets                                                                                                   2,188          1,435
------------------------------------------------------------------------------------------------------------------------------------
Total assets                                                                                               $ 423,186      $ 416,927
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Deposits:
   Noninterest-bearing demand deposit accounts                                                             $   6,246      $   5,035
   Interest-bearing deposit accounts:
      Checking (NOW) accounts                                                                                  8,288          9,188
      Savings accounts                                                                                        18,302         15,743
      Money-market accounts                                                                                   58,680         52,619
      Certificate of deposit accounts                                                                        205,494        217,656
                                                                                                           -------------------------
Total deposit accounts                                                                                       297,010        300,241
Subordinated debentures payable                                                                               66,180         64,080
Accrued interest payable on debentures                                                                         9,931          8,733
Accrued interest payable on deposits                                                                             778            856
Mortgage escrow funds payable                                                                                  5,158          3,397
Official checks outstanding                                                                                    4,721          2,281
Other liabilities                                                                                              1,366          1,111
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities                                                                                            385,144        380,699
------------------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock (300,000 shares authorized, none issued)                                                           -              -
Class A common stock ($1.00 par value, 9,500,000 shares authorized,
    3,544,629 shares issued and outstanding at each date)                                                      3,545          3,545
Class B common stock ($1.00 par value, 700,000 shares authorized,
    355,000 shares issued and outstanding at each date)                                                          355            355
Additional paid-in-capital, common                                                                            18,987         18,975
Retained earnings                                                                                             15,064         13,605
Accumulated other comprehensive income:
    Net unrealized gain (loss) on securities available for sale, net of tax                                       91           (252)
------------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity                                                                                    38,042         36,228
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                                                                 $ 423,186      $ 416,927
------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.

</TABLE>


                                       2
<PAGE>


                Intervest Bancshares Corporation and Subsidiaries
                  Condensed Consolidated Statements of Earnings
                                   (Unaudited)
<TABLE>

                                                             Quarter Ended       Six-Months Ended
                                                                                                 June 30,              June 30,
                                                                                ----------------------------------------------------
($ in thousands, except per share data)                                                      2001      2000        2001       2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>        <C>         <C>        <C>
INTEREST AND DIVIDEND INCOME
Loans receivable                                                                         $  6,984   $  6,030    $ 13,587   $ 11,676
Securities                                                                                    684      1,431       2,180      2,951
Other interest-earning assets                                                                 736        197       1,321        287
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Total interest and dividend income                                                          8,404      7,658      17,088     14,914
------------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Deposits                                                                                    4,169      3,469       8,775      6,313
Federal funds purchased                                                                         -          -           -        146
Subordinated debentures                                                                     1,886      2,083       3,901      4,505
------------------------------------------------------------------------------------------------------------------------------------
Total interest expense                                                                      6,055      5,552      12,676     10,964
------------------------------------------------------------------------------------------------------------------------------------
Net interest and dividend income                                                            2,349      2,106       4,412      3,950
Provision for loan loss reserves                                                              100         90         100        245
------------------------------------------------------------------------------------------------------------------------------------
Net interest and dividend income after provision for loan loss                              2,249      2,016       4,312      3,705
------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST INCOME
Customer service fees                                                                          35         31          73         66
Income from mortgage lending activities                                                       534        146         717        273
All other                                                                                       1          1           4          1
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Total noninterest income                                                                      570        178         794        340
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NONINTEREST EXPENSES
Salaries and employee benefits                                                                586        508       1,212      1,184
Occupancy and equipment, net                                                                  278        278         582        549
Data processing                                                                                60         35          95         47
Advertising and promotion                                                                       6         12          14         25
Professional fees and services                                                                100        116         197        220
Stationery, printing and supplies                                                              35         35          68         73
All other                                                                                     264        146         485        283
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Total noninterest expenses                                                                  1,329      1,130       2,653      2,381
------------------------------------------------------------------------------------------------------------------------------------
Earnings before taxes and extraordinary item                                                1,490      1,064       2,453      1,664
Provision for income taxes                                                                    612        427         994        637
                                                                                         -------------------------------------------
Earnings before extraordinary item                                                            878        637       1,459      1,027
Extraordinary item, net of tax                                                                  -       (206)          -       (206)
------------------------------------------------------------------------------------------------------------------------------------
Net earnings                                                                             $    878   $    431    $  1,459   $    821
------------------------------------------------------------------------------------------------------------------------------------
Basic earnings per share:
   Earnings before extraordinary item                                                    $   0.23   $   0.16    $   0.37   $   0.26
   Extraordinary item                                                                           -      (0.05)          -      (0.05)
------------------------------------------------------------------------------------------------------------------------------------
   Net earnings per share                                                                $   0.23   $   0.11      $0. 37   $   0.21
------------------------------------------------------------------------------------------------------------------------------------
Diluted earnings per share:
   Earnings before extraordinary item                                                    $   0.23   $   0.16    $   0.37   $   0.26
   Extraordinary item                                                                           -      (0.05)          -      (0.05)
------------------------------------------------------------------------------------------------------------------------------------
   Net earnings per share                                                                $   0.23   $   0.11    $   0.37   $   0.21
------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.

</TABLE>



                                       3
<PAGE>


                Intervest Bancshares Corporation and Subsidiaries
            Condensed Consolidated Statements of Comprehensive Income
                                   (Unaudited)


<TABLE>



                                                                                               Quarter                Six-Months
                                                                                                Ended                    Ended
                                                                                               June 30,                 June 30,
                                                                                      ----------------------------------------------
($ in thousands)                                                                            2001       2000        2001        2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                       <C>         <C>         <C>         <C>
Net earnings                                                                              $  878      $  431      $1,459      $  821
------------------------------------------------------------------------------------------------------------------------------------
Net unrealized holding gains on securities arising during the period                          51           -         550           -
Provision for income taxes related to unrealized holding gains on securities                  19           -         207           -
------------------------------------------------------------------------------------------------------------------------------------
Other comprehensive income, net of tax                                                        32           -         343           -
------------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income, net of tax                                                    $  910      $  431      $1,802      $  821
------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.

</TABLE>




















                                       4
<PAGE>





                Intervest Bancshares Corporation and Subsidiaries
      Condensed Consolidated Statements of Changes in Stockholders' Equity
                                   (Unaudited)
<TABLE>

                                                                                                                Six-Months Ended
                                                                                                                     June 30,
                                                                                                               ---------------------
($ in thousands)                                                                                               2001           2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                         <C>             <C>
CLASS A COMMON STOCK
Balance at beginning of period                                                                              $  3,545        $  3,532
Issuance of 3,750 shares upon the exercise of warrants in 2000                                                     -               4
------------------------------------------------------------------------------------------------------------------------------------
Balance at end of period                                                                                       3,545           3,536
------------------------------------------------------------------------------------------------------------------------------------
CLASS B COMMON STOCK
Balance at beginning of period                                                                                   355             305
Issuance of 50,000 shares of restricted stock compensation in 2000                                                 -              50
------------------------------------------------------------------------------------------------------------------------------------
Balance at end of period                                                                                         355             355
------------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL PAID-IN-CAPITAL, COMMON
Balance at beginning of period                                                                                18,975          18,770
Compensation related to issuance of Class B stock warrants                                                        12              12
Issuance of 50,000 shares of restricted Class B stock compensation in 2000                                         -             109
Issuance of 3,750 shares upon the exercise of Class A stock warrants in 2000                                       -              22
------------------------------------------------------------------------------------------------------------------------------------
Balance at end of period                                                                                      18,987          18,913
------------------------------------------------------------------------------------------------------------------------------------
RETAINED EARNINGS
Balance at beginning of period                                                                                13,605          10,997
Net earnings for the period                                                                                    1,459             821
------------------------------------------------------------------------------------------------------------------------------------
Balance at end of period                                                                                      15,064          11,818
------------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED OTHER COMPREHENSIVE INCOME, NET
Balance at beginning of period                                                                                  (252)              -
Net change in accumulated other comprehensive income, net                                                        343               -
------------------------------------------------------------------------------------------------------------------------------------
Balance at end of period                                                                                          91               -
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity at end of period                                                                 $ 38,042        $ 34,622
------------------------------------------------------------------------------------------------------------------------------------
 See accompanying notes to condensed consolidated financial statements.

</TABLE>



                                       5
<PAGE>

                Intervest Bancshares Corporation and Subsidiaries
                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
                                                                                                                Six-Months Ended
                                                                                                                    June 30,
                                                                                                              ----------------------
($ in thousands)                                                                                              2001             2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                        <C>             <C>
OPERATING ACTIVITIES
   Net earnings                                                                                            $  1,459        $    821
   Adjustments to reconcile net earnings to net cash provided by
         operating activities:
   Depreciation and amortization                                                                                228             225
   Provision for loan loss reserves                                                                             100             245
   Deferred income tax benefit                                                                                   (6)            (36)
   Amortization of deferred debenture offering costs                                                            355             800
   Compensation expense from awards of common stock and warrants                                                 12             171
   Amortization of premiums, fees and discounts, net                                                         (1,308)           (821)
   Net increase (decrease) in accrued interest payable on debentures                                          1,198          (1,855)
   Net increase in official checks outstanding                                                                2,440           4,963
   Net decrease in all other assets and liabilities                                                           1,775              14
------------------------------------------------------------------------------------------------------------------------------------
   Net cash provided by operating activities                                                                  6,253           4,527
------------------------------------------------------------------------------------------------------------------------------------
   INVESTING ACTIVITIES
   Maturities and calls of securities available for sale                                                     60,194               -
   Maturities and calls of securities held to maturity                                                       21,875          12,511
   Purchases of securities held to maturity                                                                 (17,792)        (15,507)
   Net increase in loans receivable                                                                         (47,159)        (39,003)
   Purchases of Federal Reserve Bank stock, net                                                                 (64)            (88)
   Purchases of premises and equipment, net                                                                    (228)           (126)
------------------------------------------------------------------------------------------------------------------------------------
   Net provided by (used in) investing activities                                                            16,826         (42,213)
------------------------------------------------------------------------------------------------------------------------------------
   FINANCING ACTIVITIES
   Net increase in demand, savings, NOW and money market deposits                                             8,931           4,896
   Net (decrease) increase in certificates of deposit                                                       (12,162)         52,389
   Net increase in mortgage escrow funds payable                                                              1,761           1,810
   Repayments of Federal funds purchased, net                                                                     -          (6,955)
   Principal repayments of debentures                                                                        (1,400)        (24,000)
   Proceeds from issuance of debentures, net of issuance costs                                                3,176               -
   Proceeds from issuance of common stock, net of issuance costs                                                  -              26
------------------------------------------------------------------------------------------------------------------------------------
   Net cash provided by financing activities                                                                    306          28,166
------------------------------------------------------------------------------------------------------------------------------------
   Net increase (decrease) in cash and cash equivalents                                                      23,385          (9,520)
   Cash and cash equivalents at beginning of period                                                          42,938          32,095
------------------------------------------------------------------------------------------------------------------------------------
   Cash and cash equivalents at end of period                                                              $ 66,323        $ 22,575
------------------------------------------------------------------------------------------------------------------------------------
   SUPPLEMENTAL DISCLOSURES
   Cash paid during the period for:
      Interest                                                                                             $ 12,118        $ 12,252
      Income taxes                                                                                            1,218             704
   Noncash activities:
      Accumulated other comprehensive income,
         change in unrealized gain on securities available for sale, net of tax                                 343               -
------------------------------------------------------------------------------------------------------------------------------------
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 - General

The  condensed   consolidated   financial  statements  of  Intervest  Bancshares
Corporation and Subsidiaries in this report have not been audited except for the
information derived from the audited  Consolidated  Balance Sheet as of December
31, 2000. The financial  statements in this report should be read in conjunction
with the consolidated financial statements and related notes thereto included in
the  Company's  Annual  Report to  Stockholders  on Form 10-K for the year ended
December 31, 2000.

The  condensed   consolidated  financial  statements  include  the  accounts  of
Intervest  Bancshares  Corporation (a bank holding company referred to by itself
as the  "Holding  Company")  and  its  subsidiaries,  Intervest  National  Bank,
Intervest Bank, and Intervest Corporation of New York. The banks are referred to
together as the "Banks." The Holding Company and its  subsidiaries  are referred
to as the  "Company" on a  consolidated  basis.  The Holding  Company's  primary
business activity is the ownership of the aforementioned subsidiaries.

Intervest  National Bank is a nationally  chartered  commercial  bank located in
Rockefeller Plaza in New York City.  Intervest Bank is a Florida state chartered
commercial  bank with four  banking  offices in  Clearwater,  Florida and one in
South Pasadena,  Florida.  The Banks conduct a full-service  commercial  banking
business,  which  consists of attracting  deposits  from the general  public and
investing those funds,  together with other sources of funds,  primarily through
the origination of commercial and multifamily real estate loans, and through the
purchase of security investments. Intervest National Bank also provides Internet
banking   services   at  its  Web  Site:   www.intervestnatbank.com.   Intervest
Corporation of New York is located in Rockefeller  Plaza in New York City and is
in the business of originating  and acquiring  commercial and  multifamily  real
estate loans.

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. In preparing the condensed  consolidated  financial
statements, management is required to make estimates and assumptions that affect
the  reported  amounts of assets,  liabilities,  revenues and  expenses.  Actual
results could differ from those estimates.  Certain  reclassifications have been
made to prior period amounts to conform to the current periods' presentation.

Note 2 - Allowance for Loan Loss Reserves

The Company  monitors its loan portfolio to determine the  appropriate  level of
the  allowance for loan loss reserves  based on various  factors.  These factors
include:  the type and level of loans outstanding;  volume of loan originations;
overall  portfolio  quality;   loan  concentrations;   specific  problem  loans,
historical  chargeoffs and recoveries;  adverse  situations which may affect the
borrowers'  ability to repay;  and  management's  assessment  of the current and
anticipated  economic conditions in the Company's lending regions. No loans were
classified as nonaccrual or impaired during the 2001 and 2000 reporting  periods
in this report.

Activity in the allowance  for loan loss  reserves for the periods  indicated is
summarized as follows:
<TABLE>

                                                                                   Quarter Ended                 Six-Months Ended
                                                                                     June 30,                        June 30,
                                                                              -----------------------         ----------------------
($ in thousands)                                                              2001               2000         2001              2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>                <C>          <C>               <C>
Balance at beginning of period                                              $2,768             $2,648       $2,768            $2,493
Provision charged to operations                                                100                 90          100               245
------------------------------------------------------------------------------------------------------------------------------------
Balance at end of period                                                    $2,868             $2,738       $2,868            $2,738
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>




                                       7
<PAGE>


                Intervest Bancshares Corporation and Subsidiaries
        Notes to Condensed Consolidated Financial Statements (Unaudited)
--------------------------------------------------------------------------------

Note 3 - Earnings Per Share (EPS)

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
outstanding and dilutive  potential  common stock shares that may be outstanding
in the future. Potential common stock shares may arise from outstanding dilutive
common  stock  warrants  (as  computed  by  the  "treasury  stock  method")  and
convertible debentures (as computed by the "if converted method").

Diluted EPS considers  the potential  dilution that could occur if the Company's
outstanding stock warrants and convertible debentures were converted into common
stock that then shared in the  Company's  adjusted  earnings  (as  adjusted  for
interest expense,  net of tax, that would no longer occur if the debentures were
converted).

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>

                                                                               Quarter Ended              Six-Months Ended
                                                                                  June 30,                   June 30,
                                                                          ------------ ------------ ------------- --------------
                                                                             2001         2000          2001          2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>           <C>            <C>            <C>
BASIC EARNINGS PER SHARE
Net earnings:
  Earnings before extraordinary item                                        $   878,000   $   637,000    $ 1,459,000    $ 1,027,000
  Extraordinary item (1)                                                              -      (206,000)             -       (206,000)
------------------------------------------------------------------------------------------------------------------------------------
 Net earnings                                                               $   878,000   $   431,000    $ 1,459,000    $   821,000
------------------------------------------------------------------------------------------------------------------------------------
Average number of common shares outstanding                                   3,899,629     3,890,629      3,899,629      3,871,007
Per share amounts:
  Earnings before extraordinary item                                        $      0.23   $      0.16    $      0.37    $      0.26

  Extraordinary item (1)                                                              -         (0.05)             -          (0.05)
------------------------------------------------------------------------------------------------------------------------------------
  Basic net earnings per share                                              $      0.23   $      0.11    $      0.37    $      0.21
------------------------------------------------------------------------------------------------------------------------------------
DILUTED EARNINGS PER SHARE
Adjusted net earnings for diluted earnings per share computation (2)        $   878,000   $   431,000    $ 1,459,000    $   821,000
Average number of common shares outstanding for dilution:
  Common shares outstanding per above                                         3,899,629     3,890,629      3,899,629      3,871,007
  Potential dilutive shares resulting from exercise of warrants (3)                   -             -              -              -
  Potential dilutive shares resulting from conversion of debentures (2)               -             -              -              -
                                                                            --------------------------------------------------------
  Total average number of common shares outstanding                           3,899,629     3,890,629      3,899,629      3,871,007
                                                                            --------------------------------------------------------
Per share amounts:
  Earnings before extraordinary item                                        $      0.23   $      0.16    $      0.37    $      0.26
  Extraordinary item (1)                                                              -         (0.05)             -          (0.05)
------------------------------------------------------------------------------------------------------------------------------------
  Diluted net earnings per share                                            $      0.23   $      0.11    $      0.37    $      0.21
------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1)  Represents a charge, net of taxes, from the early retirement of debentures.
(2)  Convertible  debentures  totaling $6,930,000 and convertible (at $14.00 per
     share in 2001 and $12.50 per share in 2000) into Class A common  stock were
     excluded from all diluted EPS computations because they were not dilutive.
(3)  A total of 2,650,000 of common stock warrants with exercise  prices ranging
     from $6.67 to $16.00 were not  included  in the  quarterly  and  six-months
     computation of diluted EPS for 2001 because they were not dilutive. A total
     of 2,659,000  common stock warrants with exercise prices ranging from $6.67
     to $15.00 were not included in the quarterly and six-months  computation of
     diluted EPS for 2000 because they were not dilutive .
</FN>
</TABLE>




                                       8
<PAGE>

                Intervest Bancshares Corporation and Subsidiaries
        Notes to Condensed Consolidated Financial Statements (Unaudited)
--------------------------------------------------------------------------------

Note 4 - Regulatory Capital

The  Banks  are  required  to  maintain  certain  minimum   regulatory   capital
requirements.

The  following is a summary at June 30, 2001 of the minimum  regulatory  capital
requirements and the actual capital of each Bank on a percentage basis:
<TABLE>

                                                                            Actual            Minimum           To Be Considered
        Intervest Bank                                                      Ratios            Requirement       Well Capitalized
                                                                            ------            -----------       ----------------
<S>                                                                         <C>                 <C>                  <C>
        Total capital to risk-weighted assets                               10.24%              8.00%                10.00%
        Tier 1 capital to risk-weighted assets                               9.09%              4.00%                 6.00%
        Tier 1 capital to total average assets - leverage ratio              7.01%              4.00%                 5.00%

        Intervest National Bank
        Total capital to risk-weighted assets                               14.44%              8.00%                10.00%
        Tier 1 capital to risk-weighted assets                              13.58%              4.00%                 6.00%
        Tier 1 capital to total average assets - leverage ratio             11.66%              4.00%                 5.00%

</TABLE>

In June  2001,  the  Office of the  Comptroller  of the  Currency  terminated  a
Memorandum  of  Understanding  with  Intervest  National Bank that was in effect
since June 2000. The memorandum was a formal written  agreement  whereby,  among
other  things,  Intervest  National  Bank had been  required to review,  revise,
develop and  implement  various  policies  and  procedures  with  respect to its
lending and credit underwriting. Management implemented various actions in order
for Intervest National Bank to be in full compliance with the memorandum.

Note 5 - Subsequent Event

Effective July 20, 2001,  Intervest  Bank merged into  Intervest  National Bank.
Intervest  National Bank, a nationally  chartered bank, retains its headquarters
and full-service  banking office at One Rockefeller Plaza, in New York City, and
now has a total of five full-service  banking offices in Clearwater and Pinellas
County,  Florida.  As of June 30, 2001,  the combined banks have total assets of
$337,870,000,  total deposits of  $297,010,000  and total equity of $30,353,000,
compared to total assets of  $333,957,000,  total deposits of  $300,241,000  and
total equity of $27,606,000 at December 31, 2000.

The   merger   was   accounted   for  at   historical   cost   similar   to  the
pooling-of-interests method of accounting.  Under this method of accounting, the
recorded assets, liabilities,  shareholders' equity, income and expenses of both
banks are combined and recorded at their historical cost amounts.








                                       9
<PAGE>









                Intervest Bancshares Corporation and Subsidiaries

               Review by Independent Certified Public Accountants

Hacker,   Johnson  &  Smith  PA,  the  Company's  independent  certified  public
accountants,  have made a limited  review of the  financial  data as of June 30,
2001,  and for the three- and  six-month  periods  ended June 30,  2001 and 2000
presented in this  document,  in accordance  with  standards  established by the
American Institute of Certified Public Accountants.

Their  report  furnished  pursuant to Article 10 of  Regulation  S-X is included
herein.































                                       10
<PAGE>


          Report on Review by Independent Certified Public Accountants



The 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 June 30,
2001,  and  the  related  condensed  consolidated  statements  of  earnings  and
comprehensive  income for the three- and  six-month  periods ended June 30, 2001
and 2000,  and the  related  condensed  consolidated  statements  of  changes in
stockholders'  equity and cash flows for the  six-month  periods  ended June 30,
2001 and 2000  included  in this  report.  These  financial  statements  are the
responsibility of the Company's management.

     We were furnished  with the report of other  accountants on their review of
the interim  financial  information of Intervest  Corporation of New York, whose
total assets as of June 30, 2001 constituted  17.5% of the related  consolidated
total,  and whose net interest income,  noninterest  income and net earnings for
the three- and six-month periods then ended, constituted 9.5%, 61.8%, and 20.6%;
and 6.4%,  49.1%,  and 8.6%,  respectively,  and whose net  interest  income and
noninterest  income for the three- and  six-month  periods  ended June 30, 2000,
constituted  11.6% and 33.1%; and 9.0% and 25.0%,  respectively,  of the related
consolidated totals. The net loss for Intervest Corporation of New York included
in the consolidated  totals for the three- and six-month  periods ended June 30,
2000 was $150,000 and $185,000, respectively.

     We conducted our reviews in accordance  with  standards  established by the
American  Institute  of  Certified  Public  Accountants.  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 auditing  standards  generally  accepted in the United States of
America,  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 and the report of other accountants,  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
accounting principles generally accepted in the United States of America.

     We have previously audited, in accordance with auditing standards generally
accepted in the United States of America,  the consolidated  balance sheet as of
December  31,  2000,  and  the  related  consolidated  statements  of  earnings,
comprehensive  income,  changes in  stockholders'  equity and cash flows for the
year then ended (not  presented  herein);  and in our report  dated  January 18,
2001,  we  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, 2000 is fairly stated in
all material respects,  in relation to the consolidated balance sheet from which
it has been derived.


/s/ HACKER, JOHNSON & SMITH PA
------------------------------
HACKER, JOHNSON & SMITH PA
Tampa, Florida
August 8, 2001





                                       11
<PAGE>



          Report on Review by Independent Certified Public Accountants



Board of Directors and Stockholder
Intervest Corporation of New York
New York, New York:

     We have  reviewed the  condensed  consolidated  balance  sheet of Intervest
Corporation of New York and  Subsidiaries  (the  "Company") as of June 30, 2001,
and the related condensed  consolidated  statements of operations for the three-
and six-month  periods ended June 30, 2001 and 2000,  and the related  condensed
consolidated  statements of changes in  stockholder's  equity and cash flows for
the  six-month  periods  ended  June 30,  2001 and  2000  (all of which  are not
presented  herein).  These financial  statements are the  responsibility  of the
Company's management.

     We conducted our review in accordance  with  standards  established  by the
American  Institute  of  Certified  Public  Accountants.  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 auditing  standards  generally  accepted in the United States of
America,  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 review,  we are not aware of any material  modifications  that
should be made to the accompanying  condensed  consolidated financial statements
for them to be in conformity with accounting  principles  generally  accepted in
the United States of America.

     We previously  audited,  in accordance  with auditing  standards  generally
accepted in the United States of America,  the consolidated  balance sheet as of
December 31, 2000 and the related consolidated statements of operations, changes
in  stockholder's  equity and cash flows for the year then ended (not  presented
herein),  and in our report dated January 18, 2001, we 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, 2000 is fairly stated in all material respects in relation to
the consolidated balance sheet from which it has been derived.



/s/ Richard A. Eisner & Company, LLP
------------------------------------
Richard A. Eisner & Company, LLP
New York, New York
July 31, 2001








                                       12
<PAGE>





ITEM 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

General
-------

At June 30,  2001,  Intervest  Bancshares  Corporation  had three  wholly  owned
subsidiaries - Intervest National Bank, Intervest Bank and Intervest Corporation
of  New  York  (hereafter  referred  to  collectively  as  the  "Company"  on  a
consolidated basis).  Intervest Bank and Intervest National Bank may be referred
to  collectively  as the "Banks," and Intervest  Bancshares  Corporation  may be
referred to by itself as the "Holding Company."

The Holding Company's primary business is the operation of its subsidiaries.  It
does not  engage in any  other  substantial  business  activities  other  than a
limited amount of real estate mortgage  lending.  From time to time, the Holding
Company sells debentures to raise funds for working capital purposes.

Intervest National Bank is a nationally chartered,  full-service commercial bank
located in Rockefeller  Center in New York City and Intervest Bank was a Florida
state-chartered commercial bank with four banking offices in Clearwater, Florida
and one in  South  Pasadena,  Florida.  Intervest  Corporation  of New York is a
mortgage investment company located in Rockefeller Center in New York City.

The Banks conduct a personalized commercial and consumer banking business, which
consists of attracting  deposits from the areas served by their banking offices.
Intervest  National Bank also provides Internet banking services through its Web
Site: www.intervestnatbank.com, which can attract deposit customers from outside
its primary  market area.  The deposits,  together with funds derived from other
sources, are used to originate a variety of real estate, commercial and consumer
loans and to purchase investment securities. The Banks emphasize multifamily and
commercial real estate lending.

Effective July 20, 2001,  Intervest  Bank merged into  Intervest  National Bank.
Intervest National Bank retains its headquarters and full-service banking office
at One  Rockefeller  Plaza,  in New  York  City,  and now  has a  total  of five
full-service  banking offices in Clearwater and Pinellas  County,  Florida.  The
merger was accounted for at historical cost similar to the  pooling-of-interests
method of  accounting.  Under this method of  accounting,  the recorded  assets,
liabilities,  stockholder's  equity,  income  and  expenses  of both  banks  are
combined and recorded at their historical cost amounts.

The Company's  profitability  depends primarily on net interest income, which is
interest  income  generated from its  interest-earning  assets less 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,  the provision  for loan loss  reserves,  and its effective
income tax rate. Noninterest income consists primarily of loan and other banking
fees.  Noninterest  expense  consists  of  compensation  and  benefits  expense,
occupancy  and  equipment  expenses,   data  processing  expenses,   advertising
expenses, deposit insurance premiums and other operating expenses. The Company's
profitability is also significantly affected by general economic and competitive
conditions, changes in market interest rates, government policies and actions of
regulatory authorities.

Comparison of Financial Condition at June 30, 2001 and December 31, 2000
------------------------------------------------------------------------

Overview
--------

Total assets at June 30, 2001 amounted to $423,186,000, compared to $416,927,000
at  December  31,  2000.  Total   liabilities  at  June  30,  2001  amounted  to
$385,144,000,  compared to  $380,699,000  at December  31,  2000.  Stockholders'
equity  increased to $38,042,000 at June 30, 2001, from  $36,228,000 at year-end
2000. Book value per common share increased to $9.76 per share at June 30, 2001,
from $9.29 at December 31, 2000.



                                       13
<PAGE>
<TABLE>

Selected balance sheet  information for the Holding Company and its subsidiaries
as of June 30, 2001 follows:

                                                                               Intervest      Intervest      Inter-
                                                    Holding      Intervest     National     Corporation     company
($ in thousands)                                    Company        Bank          Bank       of New York    Balances    Consolidated
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>          <C>          <C>             <C>          <C>           <C>
Assets                                             $  50,551    $ 217,116    $ 128,759       $  74,412    $ (47,652)    $ 423,186
Cash and cash equivalents                              4,040       45,382       12,578          12,204       (7,881)       66,323
Time deposits with banks                                   -            -          200             100            -           300
Securities available for sale                              -       15,146            -               -            -        15,146
Securities held to maturity, net                           -            -       16,664               -            -        16,664
Federal Reserve Bank stock                                 -          249          420               -            -           669
Loans receivable, net of deferred fees                 5,949      151,056       97,132          58,933            -       313,070
Allowance for loan loss reserves                          30        1,923          915               -            -         2,868
Deposits                                                   -      196,111      108,904               -       (8,005)      297,010
Debentures and accrued interest payable               12,308            -            -          63,803            -        76,111
Stockholders' equity                                  38,042       15,847       14,506           9,395      (39,748)       38,042
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

A comparison of the Company's consolidated balance sheet as of June 30, 2001 and
December 31, 2000 follows:

<TABLE>


                                                                                At June 30, 2001              At December 31, 2000
                                                                             Carrying       % of            Carrying        % of
($ in thousands)                                                               Value    Total Assets          Value     Total Assets
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>           <C>              <C>             <C>
Cash and cash equivalents                                                    $ 66,323      15.7%            $ 42,938        10.3%
Time deposits with banks                                                          300       0.1                    -           -
Securities available for sale                                                  15,146       3.6               74,789        17.9
Securities held to maturity, net                                               16,664       3.9               20,970         5.0
Federal Reserve Bank stock                                                        669       0.2                  605         0.2
Loans receivable,  net of deferred fees and loan loss reserves                310,202      73.3              263,558        63.2
All other assets                                                               13,882       3.2               14,067         3.4
------------------------------------------------------------------------------------------------------------------------------------
Total assets                                                                 $423,186     100.0%            $416,927       100.0%
------------------------------------------------------------------------------------------------------------------------------------
Deposits                                                                     $297,010      70.2%            $300,241        72.0%
Debentures payable                                                             66,180      15.6               64,080        15.4
Accrued interest payable on debentures                                          9,931       2.3                8,733         2.1
All other liabilities                                                          12,023       2.9                7,645         1.8
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities                                                             385,144      91.0              380,699        91.3
------------------------------------------------------------------------------------------------------------------------------------
Stockholders' equity                                                           38,042       8.9               36,228         8.7
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                                   $423,186     100.0%            $416,927       100.0%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Cash and Cash Equivalents
-------------------------

Cash and cash  equivalents  increased  to  $66,323,000  at June 30,  2001,  from
$42,938,000 at December 31, 2000.  The increase was due to early  redemptions by
various  agencies  of  Intervest  Bank's  holdings  of  U.S  government   agency
securities.  The redemptions were brought about by a decrease in market interest
rates during the first half of 2001. A portion of the  resulting  proceeds  were
used to fund the growth in mortgage loans and the remainder has been temporarily
invested in the overnight  Federal Funds market pending  investment in mortgages
as opportunities arise.

In addition to Federal  funds  investments,  cash and cash  equivalents  include
interest-bearing  and  noninterest-bearing  cash balances with banks,  and other
short-term  investments  that have original  maturities of three months or less.
These short-term  investments are normally  comprised of commercial paper issued
by  large  commercial  banks,   certificates  of  deposit  and  U.S.  government
securities.  The level of cash and cash equivalents  fluctuates based on various
factors,  including  liquidity  needs,  loan  demand,  deposit  flows,  calls of
securities,   repayments   of   borrowed   funds  and   alternative   investment
opportunities.



                                       14
<PAGE>




Securities Available for Sale
-----------------------------

Securities that are held for indefinite periods of time which management intends
to use as part of its asset/liability  management strategy,  or that may be sold
in response to changes in interest  rates or other  factors,  are  classified as
available for sale and are carried at estimated fair value. Securities available
for sale decreased to $15,146,000 at June 30, 2001, from $74,789,000 at December
31, 2000, due to the early redemptions discussed previously.

At June 30, 2001, the portfolio consisted of Intervest Bank's remaining holdings
of U.S.  government agency securities,  and approximately  $6,000,000 have terms
that  allow  the  issuer  the  right to call or prepay  its  obligation  without
prepayment  penalty. At June 30, 2001, the portfolio had an unrealized gain, net
of tax, of $91,000,  compared to an unrealized  loss, net of tax, of $252,000 at
December 31, 2000. Unrealized gains and losses on securities available for sale,
net  of  related  income  taxes,  are  reported  as  a  separate   component  of
comprehensive income and included in stockholders' equity.

Securities Held to Maturity
---------------------------

Securities  for which the Company has the intent and ability to hold to maturity
are  classified  as held to maturity and carried at amortized  cost.  Securities
held to maturity totaled  $16,664,000 at June 30, 2001,  compared to $20,970,000
at December 31, 2000. The decrease was due to maturities exceeding new purchases
during the quarter. The portfolio consists of Intervest National Bank's holdings
of short-term U.S. government agency securities.

Federal Reserve Bank Stock
--------------------------

In order for the Banks to be members of the Federal Reserve Banking System,  the
Banks  maintain an investment in the capital stock of the Federal  Reserve Bank,
which pays a dividend that is currently 6%. The  investment,  which  amounted to
$669,000 at June 30, 2001 and $605,000 at December 31, 2000, fluctuates based on
each Bank's capital level.

Loans Receivable, Net of Deferred Fees and Loan Loss Reserves
-------------------------------------------------------------

Loans receivable, net of deferred fees and the allowance for loan loss reserves,
increased to $310,202,000  at June 30, 2001,  from  $263,558,000 at December 31,
2000. The growth primarily  reflected new originations of commercial real estate
and  multifamily  mortgage  loans,  partially  offset by  principal  repayments.
Commercial real estate and  multifamily  real estate  properties  collateralized
almost all of the loans in the Company's loan portfolio.

At June 30, 2001,  the allowance for loan loss reserves  amounted to $2,868,000,
compared to $2,768,000 at December 31, 2000. The allowance  represented 0.92% of
total loans  outstanding  at June 30,  2001,  compared to 1.04% at December  31,
2000. At June 30, 2001 and December 31, 2000, the Company did not have any loans
on a nonaccrual status or classified as impaired.  The Company monitors its loan
portfolio to determine  the  appropriate  level of the  allowance  for loan loss
reserves based on various factors.  These factors include: the type and level of
loans outstanding; volume of loan originations;  overall portfolio quality; loan
concentrations;  specific problem loans,  historical  chargeoffs and recoveries;
adverse  situations  which may  affect  the  borrowers'  ability  to repay;  and
management's  assessment of the current and anticipated  economic  conditions in
the Company's lending regions.

All Other Assets
----------------

The following  table sets forth the composition of all other assets in the table
on page 14:

                                                   At June 30,   At December 31,
     ($ in thousands)                                2001            2000
     ---------------------------------------------------------------------------
     Accrued interest receivable                        $2,255           $2,961
     Loans fee receivable                                1,554            1,276
     Premises and equipment, net                         5,731            5,731
     Deferred income tax asset                             904            1,105
     Deferred debenture offering costs,net               2,804            2,835
     All other                                             634              159
     ---------------------------------------------------------------------------
                                                       $13,882          $14,067
     ---------------------------------------------------------------------------


                                       15
<PAGE>


Accrued interest receivable fluctuates based on the amount of loans, investments
and  other  interest-earning  assets  outstanding  and the  timing  of  interest
payments received.

Loan fees receivable are fees due to the Company in accordance with the terms of
mortgage  loans.  Such amounts are generally due upon the full  repayment of the
loan.  This fee is recorded as deferred  income at the time a loan is originated
and is then amortized to interest income over the life of the loan. The increase
was due to an increase in mortgage loans outstanding.

The deferred income tax asset relates primarily to the unrealized tax benefit on
the  Company's  allowance  for loan loss  reserves and  organizational  start-up
costs. These charges have been expensed for financial  statement  purposes,  but
are  not  all  currently  deductible  for  income  tax  purposes.  The  ultimate
realization  of the  deferred  tax asset is  dependent  upon the  generation  of
sufficient  taxable  income by the  Company  during the  periods in which  these
temporary  differences become deductible for tax purposes.  Management  believes
that it is more likely than not that the  Company's  deferred  tax asset will be
realized and accordingly,  a valuation  allowance for deferred tax assets is not
maintained.

Deferred debenture offering costs consist primarily of underwriters' commissions
and are  amortized  over the terms of the  debentures.  The  decrease was due to
normal  amortization,  largely offset by additional costs incurred with the sale
of new debentures in the first quarter of 2001.

Deposit Liabilities
-------------------

Deposit  liabilities  amounted to  $297,010,000  at June 30,  2001,  compared to
$300,241,000  at December 31, 2000.  At June 30,  2001,  certificate  of deposit
accounts totaled $205,494,000 and demand deposit,  savings, NOW and money market
accounts aggregated $91,516,000. The same categories of deposit accounts totaled
$217,656,000 and $82,585,000, respectively, at December 31, 2000. Certificate of
deposit accounts represented 69% of total deposits at June 30, 2001, compared to
72% at year-end 2000.

Debentures Payable and Related Accrued Interest Payable
-------------------------------------------------------

At June 30, 2001, total debentures payable amounted to $66,180,000,  compared to
$64,080,000 at December 31, 2000. The increase was due to the sale of debentures
in the aggregate  principal amount of $3,500,000 by the Holding  Company,  which
resulted  in  net  proceeds  of  approximately  $3,200,000  after  underwriter's
commissions and other issuance costs. The sale of these debentures was partially
offset  by  the  maturity  on  January  1,  2001,  of  $1,400,000  of  Intervest
Corporation of New York's debentures.

At  June  30,  2001,  Intervest  Corporation  of New  York  had  $55,750,000  of
debentures  payable  outstanding  and the  Holding  Company had  $10,430,000  of
debentures  payable  outstanding,  of which $6,930,000 were convertible into the
Holding  Company's Class A common stock.  From time to time, the Holding Company
sells debentures and the proceeds are used for working capital purposes.

At June 30, 2001, accrued interest payable on debentures amounted to $9,931,000,
compared to  $8,733,000  at year-end  2000.  Nearly all of the accrued  interest
payable  at  June  30,  2001 is due  and  payable  at the  maturity  of  various
debentures.  For a further  discussion of the debentures,  including  conversion
prices  and  redemption  premiums,  see  note  8 to the  consolidated  financial
statements  included in the Company's Annual Report to Stockholders on Form 10-K
for the year ended December 31, 2000.

All Other Liabilities
---------------------

The following table shows the composition of all other  liabilities in the table
on page 14:

                                                      At                At
                                                   June 30,        December 31,
        ($ in thousands)                             2001              2000
        ------------------------------------------------------------------------
        Accrued interest payable on deposits      $   778           $   856
        Mortgage escrow funds payable               5,158             3,397
        Official checks outstanding                 4,721             2,281
        All other                                   1,366             1,111
        ------------------------------------------------------------------------
                                                  $12,023           $ 7,645
        ------------------------------------------------------------------------



                                       16
<PAGE>

Mortgage escrow funds payable  represent  advance payments made by borrowers for
taxes and  insurance  that are  remitted  by the Company to third  parties.  The
increase  reflects the timing of payments to taxing  authorities  as well as the
growth in the loan portfolio.  The level of official checks  outstanding  varies
and fluctuates based on banking activity.

Stockholders' Equity and Regulatory Capital
-------------------------------------------

Stockholders' equity increased to $38,042,000 at June 30, 2001, from $36,228,000
at December 31, 2000.  The increase was due to net earnings of $1,459,000  and a
$343,000 increase in unrealized  gains, net of tax, on securities  available for
sale.  Intervest  Bank and  Intervest  National  Bank are both  well-capitalized
institutions  as  defined  by  FDIC  regulations.  See  note 4 to the  condensed
consolidated  financial  statements in this report for their respective  capital
ratios.

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  funding  commitments,
deposit  withdrawals and the repayment of borrowed funds. The Company's  primary
sources of funds consist of retail deposits obtained through the Banks' offices,
satisfactions  and repayments of loans,  the maturities and calls of securities,
and cash provided by operating  activities.  From time to time,  the Company may
also borrow funds  through the Federal funds market or sale of  debentures.  For
information  about the cash flows from the  Company's  operating,  investing and
financing activities, see the condensed consolidated statements of cash flows in
this report.

At  June  30,  2001,  the  Company's   total   commitment  to  lend   aggregated
approximately  $49,000,000.  Based on its cash  flow  projections,  the  Company
believes  that  it  can  fund  all  of  its  outstanding  commitments  from  the
aforementioned sources of funds.

Interest Rate Risk
------------------

Interest  rate risk  arises  from  differences  in the  repricing  of assets and
liabilities  within a given time period.  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 the  Company's 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.  At June 30, 2001, the Company's one-year interest-rate sensitivity
gap was a positive  $669,000,  or 0.2% of total  assets,  compared to a negative
$12,411,000,  or 3%, at December 31, 2000. The change in the gap was largely due
to the early  redemptions  of securities  available for sale by U.S.  government
agencies and the resulting  proceeds  being  invested in the  overnight  Federal
funds market and  variable-rate  loans. In computing the gap, the Company treats
its interest checking,  money market and savings deposit accounts as immediately
repricing.  For a further  discussion  of interest  rate risk and gap  analysis,
including all of the assumptions  used in developing the Company's  one-year gap
position,  see the Company's  2000 Annual Report to  Stockholders  on Form 10-K,
pages 30 through 32.

Comparison  of Results of  Operations  for the Quarters  Ended June 30, 2001 and
--------------------------------------------------------------------------------
2000
----

Overview
--------

Consolidated  net earnings for the second quarter of 2001 increased to $878,000,
or $0.23 per fully  diluted  share,  from  $431,000,  or $0.11 per fully diluted
share,  in the second  quarter of 2000,  or a 104%  year-to-year  increase.  The
improvement  was primarily  due to a $405,000  increase in income from the early
repayment of mortgage  loans and growth in net  interest and dividend  income of
$243,000. These increases were partially offset by a higher provision for income
taxes of $185,000 and a $199,000 increase in noninterest  expenses.  Results for
the second quarter of 2000 included an  extraordinary  charge,  net of taxes, of
$206,000, or $0.05 per share, in connection with the early retirement of various
debentures by the Company's subsidiary, Intervest Corporation of New York.

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.



                                       17
<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 mainly 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>


                                                                                  Quarter Ended
                                                  ---------------------------------------------------------------------------------
                                                                        June 30, 2001                        June 30, 2000
                                                  ---------------------------------------------------------------------------------
                                                            Average      Interest     Yield/         Average      Interest   Yield/
($ in thousands)                                            Balance     Inc./Exp.      Rate          Balance     Inc./Exp.    Rate
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>           <C>            <C>         <C>           <C>         <C>
Assets
Interest-earning assets:
   Loans                                                   $289,636      $  6,984       9.67%       $245,685      $  6,030    9.87%
   Securities                                                52,563           684       5.22          96,423         1,431    5.97
   Other interest-earning assets                             68,938           736       4.28          13,348           197    5.94
-----------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets                               411,137      $  8,404       8.20%        355,456      $  7,658    8.67%
-----------------------------------------------------------------------------------------------------------------------------------
Noninterest-earning assets                                   11,464                                   13,708
-----------------------------------------------------------------------------------------------------------------------------------
Total assets                                               $422,601                                 $369,164
-----------------------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
   Interest checking deposits                              $  7,080      $     51       2.89%       $  7,768      $     59    3.05%
   Savings deposits                                          17,561           177       4.04          17,410           231    5.34
   Money market deposits                                     60,284           606       4.03          53,425           711    5.35
   Certificates of deposit                                  211,006         3,335       6.34         163,963         2,468    6.05
                                                           ------------------------------------------------------------------------
   Total deposit accounts                                   295,931         4,169       5.65         242,566         3,469    5.75
   Debentures and accrued interest payable                   75,224         1,886      10.06          77,173         2,083   10.86
-----------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities                          371,155      $  6,055       6.54%        319,739      $  5,552    6.98%
-----------------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing deposits                                  4,685                                    9,225
Noninterest-bearing liabilities                               9,320                                    5,813
Stockholders' equity                                         37,441                                   34,387
-----------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                 $422,601                                 $369,164
-----------------------------------------------------------------------------------------------------------------------------------
Net interest and dividend income/spread                                  $  2,349       1.66%                     $  2,106    1.69%
-----------------------------------------------------------------------------------------------------------------------------------
Net interest-earning assets/margin                         $ 39,982                     2.29%       $ 35,717                  2.38%
-----------------------------------------------------------------------------------------------------------------------------------
Ratio of total interest-earning assets
   to total interest-bearing liabilities                       1.11x                                    1.11x
-----------------------------------------------------------------------------------------------------------------------------------
Other Ratios:
  Return on average assets (1)                                 0.83%                                    0.47%
  Return on average equity (1)                                 9.38%                                    5.01%
  Noninterest expense to average assets (1)                    1.26%                                    1.22%
  Efficiency ratio                                            45.53%                                   49.47%
  Average stockholders' equity to average assets               8.86%                                    9.31%
-----------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Annualized
</FN>
</TABLE>

Net interest and dividend  income  increased to $2,349,000 in the second quarter
of 2001,  from  $2,106,000  in the second  quarter  of 2000.  The  increase  was
attributable  to  growth in the  Company's  average  interest-earning  assets of
$55,681,000,  partially  offset by a decrease  in the net  interest  margin from
2.38% in the second quarter of 2000, to 2.29% in the second quarter of 2001.

The growth in earning  assets was primarily due to  $43,951,000  in new mortgage
loans  and  $11,730,000  of  additional   short-term   investments,   funded  by
$53,365,000 of new deposits. The decrease in the margin was due to the Company's
yield earned on  interest-earning  assets  decreasing  at a faster pace than its
cost of funds.

The yield on  interest-earning  assets decreased 47 basis points to 8.20% in the
second quarter of 2001.  The decrease was primarily due to a declining  interest
rate  environment,  which  resulted in lower yields  earned on  interest-earning
assets and a reduction of $43,860,000 in security investments due to early calls
of higher yielding U.S government agency securities. The resulting proceeds were



                                       18
<PAGE>

temporarily invested in the overnight Federal funds market pending investment in
mortgages as opportunities  arise. The Company's  short-term  investments have a
significantly lower yield than its loan portfolio.

The cost of funds  decreased 44 basis  points to 6.54% in the second  quarter of
2001,  primarily due the effect of a lower level of debentures  outstanding  and
lower rates paid on checking deposits,  savings deposits,  money market deposits
and variable-rate  debentures.  These items were partially offset by an increase
in  certificate  of  deposit  accounts  as well as  higher  rates  paid for such
accounts  throughout  2000.  Normally,  there is a significant time lag from the
impact  of a  rising  or  declining  market  rate  environment  on the  cost  of
certificate of deposit  accounts.  The  precipitous  decline in market  interest
rates during the first half of 2001 will continue to have a favorable  impact on
the Company's cost of funds in the second half of 2001.

Provision for Loan Loss Reserves
--------------------------------

In the second quarter of 2001, the Company  recorded a provision for loan losses
of $100,000,  compared to a provision of $90,000 in the second  quarter of 2000.
The provision for loan loss reserves is based on management's ongoing assessment
of the  adequacy  of the  allowance  for loan loss  reserves,  which  takes into
consideration a number of factors as discussed on page 15 of this report.

Noninterest Income
------------------

Noninterest  income includes fees from customer  service charges and income from
mortgage  lending  activities,  which is  comprised  mostly of income  from loan
prepayments,  fees  earned  on  expired  loan  commitments,  and  loan  service,
inspection and maintenance charges.

Noninterest  income  increased to $570,000 in the second  quarter of 2001,  from
$178,000 in the second quarter of 2000, due to higher income from the prepayment
of mortgage loans. The number of instances of prepayment of mortgage loans tends
to increase  during  periods of declining  interest  rates and tends to decrease
during periods of increasing  interest rates.  Certain of the Company's mortgage
loans  include  prepayment   provisions,   and  others  prohibit  prepayment  of
indebtedness entirely.

Noninterest Expenses
--------------------

Noninterest expenses increased to $1,329,000 in the second quarter of 2001, from
$1,130,000 in the comparable quarter of 2000. The increase was due to $90,000 of
nonrecurring  expenses  associated  with  the  merger  of  Intervest  Bank  into
Intervest National Bank, a $78,000 increase in compensation and benefits (due to
salary  increases,  higher  benefit  expenses  and a lower amount of SFAS No. 91
deferred  origination costs) and a $25,000 increase in data processing  expenses
due to growth in Intervest National Bank's total assets.

Extraordinary Item
------------------

In the second  quarter of 2000,  Intervest  Corporation of New York redeemed its
Series  9/13/93,  1/28/94 and 10/28/94  debentures  aggregating  $17,000,000  in
principal  amount prior to maturity for the  outstanding  principal plus accrued
interest.  In connection with these early  redemptions,  $382,000 of unamortized
deferred  debenture  offering costs was charged to expense in the second quarter
of 2000 and  reported  as an  extraordinary  charge  of  $206,000  (net of a tax
benefit of $176,000).

Provision for Income Taxes
--------------------------

The  provision  for income taxes  amounted to $612,000 in the second  quarter of
2001,  compared to $427,000 in the second  quarter of 2000. The increase was due
to higher pre-tax earnings. The Company's effective tax rate (inclusive of state
and local taxes) amounted to 41% in the 2001 period, compared to 40% in the 2000
period.

Comparison of Results of Operations for the  Six-Months  Ended June 30, 2001 and
--------------------------------------------------------------------------------
2000
----

Overview
--------

For the first  six  months  of 2001,  consolidated  net  earnings  increased  to
$1,459,000,  or $0.37 per fully diluted share, from $821,000, or $0.21 per fully
diluted  share,  in the first  half of 2000,  or a 78%  increase.  The growth in
earnings was primarily  due to a $462,000  increase in net interest and dividend
income, a $426,000 increase in income from the early repayment of mortgage loans



                                       19
<PAGE>

and a $145,000  decrease in the  provision for loan loss  reserves.  These items
were partially  offset by a $357,000  increase in the provision for income taxes
and a $272,000  increase in  noninterest  expenses.  Results for the 2000 period
included an extraordinary charge of $206,000.

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.

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 mainly 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>


                                                                                Six-Months Ended
                                                  ---------------------------------------------------------------------------------
                                                             June 30, 2001                            June 30, 2000
                                                  ---------------------------------------------------------------------------------
                                                       Average      Interest      Yield/          Average     Interest    Yield/
($ in thousands)                                       Balance     Inc./Exp.        Rate          Balance     Inc./Exp.     Rate
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>           <C>              <C>         <C>           <C>           <C>
Assets
Interest-earning assets:
   Loans                                             $ 279,979     $  13,587        9.79%       $ 238,097     $  11,676     9.86%
   Securities                                           77,672         2,180        5.66          100,904         2,951     5.88
   Other interest-earning assets                        55,909         1,321        4.76            9,987           287     5.78
-----------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets                          413,560     $  17,088        8.33%         348,988     $  14,914     8.59%
-----------------------------------------------------------------------------------------------------------------------------------
Noninterest-earning assets                              11,514                                     14,052
-----------------------------------------------------------------------------------------------------------------------------------
Total assets                                         $ 425,074                                  $ 363,040
-----------------------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
   Interest checking deposits                        $   7,020     $     103        2.96%       $   7,526     $     114     3.05%
   Savings deposits                                     16,938           385        4.58           17,423           445     5.14
   Money market deposits                                58,943         1,360        4.65           52,756         1,373     5.23
   Certificates of deposit                             217,811         6,927        6.41          148,245         4,381     5.94
                                                       -------         -----        ----          -------         -----     ----

   Total deposit accounts                              300,712         8,775        5.88          225,950         6,313     5.62
   Federal funds purchased                                   -             -           -            5,000           146     5.87
   Debentures and accrued interest payable              74,175         3,901       10.61           84,023         4,505    10.78
-----------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities                     374,887     $  12,676        6.82%         314,973     $  10,964     7.00%
-----------------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing deposits                             5,083                                      8,358
Noninterest-bearing liabilities                          8,111                                      5,590
Stockholders' equity                                    36,993                                     34,119
-----------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity           $ 425,074                                  $ 363,040
-----------------------------------------------------------------------------------------------------------------------------------
Net interest and dividend income/spread                            $   4,412        1.51%                     $   3,950     1.59%
-----------------------------------------------------------------------------------------------------------------------------------
Net interest-earning assets/margin                   $  38,673                      2.15%       $  34,015                   2.28%
-----------------------------------------------------------------------------------------------------------------------------------
Ratio of total interest-earning assets
   to total interest-bearing liabilities                  1.10x                     1.11x
-----------------------------------------------------------------------------------------------------------------------------------
Other Ratios:
  Return on average assets (1)                            0.69%                     0.45%
  Return on average equity (1)                            7.89%                     4.81%
  Noninterest expense to average assets (1)               1.25%                     1.31%
  Efficiency ratio                                       50.96%                    55.50%
  Average stockholders' equity to average assets          8.70%                     9.40%
-----------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Annualized
</FN>
</TABLE>



                                       20
<PAGE>



Net interest and dividend  income  increased to  $4,412,000 in the first half of
2001, from  $3,950,000 in the first half of 2000. The increase was  attributable
to growth of  $64,572,000  in the  Company's  average  interest-earning  assets,
partially  offset by a decrease  in the net  interest  margin  from 2.28% in the
first half of 2000, to 2.15% in the first half of 2001.

The growth in earning  assets was primarily due to  $41,882,000  in new mortgage
loans  and  $22,690,000  in  additional  short-term  investments,  funded by new
deposits.  The  decrease  in the  margin  was  due to the  yield  earned  on the
Company's  interest-earning  assets decreasing at a faster pace than its cost of
funds.

The yield on  interest-earning  assets decreased 26 basis points to 8.33%, while
the cost of funds  decreased 18 basis points to 6.82% in the first half of 2001.
The  reasons for the  decrease  are the same as those  discussed  under the same
heading in the  Comparison of Results of Operations  for the Quarters Ended June
30, 2001 and 2000.

Provision for Loan Loss Reserves
--------------------------------

In the first  six-months  of 2001,  the Company  recorded a  provision  for loan
losses of $100,000,  compared to a provision of $245,000 in the first six-months
of 2000.  The  provision  is based on  management's  ongoing  assessment  of the
adequacy of the allowance for loan loss reserves, which takes into consideration
a number of factors as discussed on page 15 of this report.

Noninterest Income
------------------

Noninterest  income  increased  to  $794,000  in the  first  half of 2001,  from
$340,000 in the first half of 2000.  The reason for the  increase is the same as
the one  discussed  under the same  heading  in the  Comparison  of  Results  of
Operations for the Quarters Ended June 30, 2001 and 2000.

Noninterest Expenses
--------------------

Noninterest  expenses  increased to $2,653,000  in the first half of 2001,  from
$2,381,000  in the first  half of 2000.  Expenses  for the 2001  period  include
$155,000 of nonrecurring  expenses  associated with the merger of Intervest Bank
into Intervest National Bank. Expenses for the 2000 period include approximately
$210,000 of  nonrecurring  expenses  (consisting  of $51,000 of  attorney  fees,
consulting  fees  and  printing  costs,  and  $159,000  of  stock  compensation)
associated with the acquisition of Intervest Corporation of New York.

Absent the aforementioned  expenses,  noninterest expenses totaled $2,498,000 in
the first six-months of 2001,  compared to $2,171,000 in the first six-months of
2000. The increase was primarily due to a $187,000  increase in compensation and
benefits (due to salary increases, increased benefit expenses and a lower amount
of  SFAS  No.  91  deferred  origination  costs),  a  $48,000  increase  in data
processing  expenses (due to Intervest  National  Bank's growth in assets) and a
$33,000  increase in occupancy  expenses  (resulting  from  increased  occupancy
taxes).

Provision for Income Taxes
--------------------------

The provision for income taxes  amounted to $994,000 in the first  six-months of
2001,  compared to $637,000 in the first  six-months  of 2000.  The increase was
almost entirely due to higher pre-tax earnings. The Company's effective tax rate
(inclusive  of state  and local  taxes)  amounted  to 40.5% in the 2001  period,
compared to 38.3% in the 2000 period.

Extraordinary Item
------------------

See the  discussion  under the same  heading  in the  Comparison  of  Results of
Operations for the Quarter Ended June 30, 2001 and 2000.


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's  market risk arises  primarily from interest rate
risk inherent in its lending and deposit-taking activities. The Company does not
engage in and as such has no risk related to trading  accounts,  commodities  or
foreign exchange.



                                       21
<PAGE>

Management  actively  monitors  and manages  the  Company's  interest  rate risk
exposure.  The primary  objective  in managing  interest  rate risk is to limit,
within established  guidelines,  the adverse impact of changes in interest rates
on the Company's net interest income and capital,  while adjusting the Company's
asset-liability structure to obtain the maximum yield versus cost spread on that
structure.  Management  relies  primarily  on its  asset-liability  structure to
control  interest  rate risk.  However,  a sudden and  substantial  increase  in
interest rates could adversely impact the Company's earnings, to the extent that
the  interest  rates borne by assets and  liabilities  do not change at the same
speed, to the same extent, or on the same basis.  Management believes that there
have been no  significant  changes in the Company's  market risk exposure  since
December 31, 2000.

PART II. OTHER INFORMATION

ITEM 1.  Legal Proceedings
         Not Applicable

ITEM 2.  Changes in Securities and Use of Proceeds
(a)      Not Applicable
(b)      Not Applicable
(c)      Not Applicable

ITEM 3.  Defaults Upon Senior Securities
         Not Applicable
ITEM 4.  Submission of Matters to a Vote of Security Holders

(a)      An Annual Meeting of Stockholders was held on May 25, 2001.
(b)      Pursuant  to  the  Company's  charter  and  bylaws,  one-third  of  the
         directors  are  elected  by the  holders  of Class A common  stock  and
         two-thirds are elected by holders of Class B common stock. On all other
         matters,  Class A and Class B common  stockholders  vote  together as a
         single class.  Each of the persons named in the Proxy  Statement  dated
         April 20, 2001 as a nominee for Director was elected for one-year terms
         expiring on the date of the next annual meeting (see Item 4-C).
(c)      The table that follows summarizes the voting results on the matter that
         was submitted to the Company's common stockholders:
<TABLE>

             ---------------------------------------------------------------------------------------------------------
                                                                For          Against or Withheld         Abstained
             ---------------------------------------------------------------------------------------------------------
             Election of Directors - Class A
             -------------------------------
<S>                                                          <C>                    <C>
             Michael A. Callen                               3,221,486              27,650                   -
             Wayne F. Holly                                  3,221,486              27,650                   -
             Lawton Swan, III                                3,221,486              27,650                   -

             Election of Directors  - Class B
             --------------------------------
             Lawrence G. Bergman                              355,000                 -                      -
             Jerome Dansker                                   355,000                 -                      -
             Lowell S. Dansker                                355,000                 -                      -
             Edward J. Merz                                   355,000                 -                      -
             Thomas E. Willett                                355,000                 -                      -
             David J. Willmott                                355,000                 -                      -
             Wesley T. Wood                                   355,000                 -                      -
             ---------------------------------------------------------------------------------------------------------
</TABLE>

(d)      Not Applicable

ITEM 5.  Other Information
         Not Applicable





                                       22
<PAGE>






ITEM 6.  Exhibits and Reports on Form 8-K

(a)      No exhibits are filed with this report.
(b)      No  reports on Form 8-K were filed  during the  quarter  ended June 30,
         2001.

                                                              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 AND SUBSIDIARIES

Date:  August 10, 2001                      By:   /s/ Lowell S. Dansker
                                                  ---------------------
                                                      Lowell S. Dansker,
                                                    President and Treasurer
                                                   (Chief Financial Officer)

Date:  August 10, 2001                      By:   /s/ Lawrence G. Bergman
                                                  -----------------------
                                                      Lawrence G. Bergman,
                                                    Vice President and Secretary