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

                     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, 2002


                          Commission File No. 000-23377

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


        Delaware                                                  13-3699013
-----------------------------                                -------------------
 (State or other jurisdiction                                 (I.R.S. employer
     of 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:

<TABLE>
Title of Each Class:                                              Shares Outstanding:
--------------------                                              -------------------

<S>                                                               <C>
Class A Common Stock, $1.00 par value per share                   4,077,279 Outstanding at July 31, 2002
-----------------------------------------------                   --------------------------------------

Class B Common Stock, $1.00 par value per share                   355,000 Outstanding at July 31, 2002
-----------------------------------------------                   ------------------------------------
</TABLE>
================================================================================

<PAGE>



                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES

                                    FORM 10-Q
                                  June 30, 2002

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                         <C>
PART I. FINANCIAL INFORMATION                                                               Page

     Item 1.      Financial Statements

         Condensed Consolidated Balance Sheets
            as of June 30, 2002 (Unaudited) and December 31, 2001..........................  2

         Condensed Consolidated Statements of Earnings (Unaudited)
            for the Quarters and Six-Months Ended June 30, 2002 and 2001...................  3

         Condensed Consolidated Statements of Comprehensive Income (Unaudited)
            for the Quarters and Six-Months Ended June 30, 2002 and 2001 ..................  4

         Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
            for the Six-Months Ended June 30, 2002 and 2001................................  5

         Condensed Consolidated Statements of Cash Flows (Unaudited)
            for the Six-Months Ended June 30, 2002 and 2001................................  6

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

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

         Report on Reviews 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............... 23

PART II. OTHER INFORMATION

     Item 1.      Legal Proceedings........................................................ 23

     Item 2.      Changes in Securities and Use of Proceeds................................ 23

     Item 3.      Defaults Upon Senior Securities.......................................... 23

     Item 4.      Submission of Matters to a Vote of Security Holders...................... 23

     Item 5.      Other Information........................................................ 24

     Item 6.      Exhibits and Reports on Form 8-K ........................................ 24


Signatures................................................................................. 24
</TABLE>

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>
                                                                                                  At June 30,     At December 31,
($ in thousands, except par value)                                                                   2002              2001
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                 <C>                <C>
ASSETS                                                                                                     (Unaudited)
Cash and due from banks                                                                             $ 7,735            $ 4,714
Federal funds sold                                                                                   13,637              6,345
Commercial paper                                                                                      3,440             12,400
Other short-term investments                                                                          1,557                950
                                                                                               -------------------------------------
    Total cash and cash equivalents                                                                  26,369             24,409
Time deposits with banks                                                                                 50                250
Securities available for sale at estimated fair value                                                 5,646              6,192
Securities held to maturity, net (estimated fair value of $129,151 and $99,404, respectively)       128,766             99,157
Federal Reserve Bank stock, at cost                                                                   1,104                654
Loans receivable (net of allowance for loan losses of $4,109 and $3,380, respectively)              445,662            365,146
Accrued interest receivable                                                                           4,496              3,202
Loan fees receivable                                                                                  3,316              2,679
Premises and equipment, net                                                                           6,358              6,042
Foreclosed real estate                                                                                1,081                  -
Deferred income tax asset                                                                             1,654              1,236
Deferred debenture offering costs                                                                     3,402              3,396
Other assets                                                                                            253                259
------------------------------------------------------------------------------------------------------------------------------------
Total assets                                                                                       $628,157           $512,622
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Noninterest-bearing demand deposit accounts                                                         $ 4,695            $ 5,550
Interest-bearing deposit accounts:
      Checking (NOW) accounts                                                                         9,011             10,204
      Savings accounts                                                                               30,089             24,624
      Money market accounts                                                                         131,269             80,594
      Certificate of deposit accounts                                                               290,689            241,465
                                                                                               -------------------------------------
Total deposit accounts                                                                              465,753            362,437
Subordinated debentures payable                                                                      76,680             73,430
Guaranteed preferred beneficial interest in junior subordinated debentures                           15,000             15,000
Note payable                                                                                            271                  -
Accrued interest payable on all debentures                                                           12,295             11,480
Accrued interest payable on deposits                                                                    864                817
Mortgage escrow funds payable                                                                         7,404              4,253
Official checks outstanding                                                                           4,180              3,219
Other liabilities                                                                                     1,555              1,591
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities                                                                                   584,002            472,227
------------------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock (300,000 shares authorized, none issued)                                                  -                  -
Class A common stock ($1.00 par value, 9,500,000 shares authorized,
    3,650,279 and 3,544,629 shares issued and outstanding, respectively )                             3,650              3,545
Class B common stock ($1.00 par value, 700,000 shares authorized,
    355,000 shares issued and outstanding)                                                              355                355
Additional paid-in-capital, common                                                                   19,790             19,001
Retained earnings                                                                                    20,275             17,383
Accumulated other comprehensive income:
    Net unrealized gain on securities available for sale, net of tax                                     85                111
------------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity                                                                           44,155             40,395
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                                                         $628,157           $512,622
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       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)                                        2002         2001        2002          2001
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>          <C>         <C>           <C>
INTEREST AND DIVIDEND INCOME
Loans receivable                                                               $9,972       $6,984      $18,792       $13,587
Securities                                                                        983          684        1,825         2,180
Other interest-earning assets                                                      53          736          102         1,321
------------------------------------------------------------------------------------------------------------------------------------
Total interest and dividend income                                             11,008        8,404       20,719        17,088
------------------------------------------------------------------------------------------------------------------------------------

INTEREST EXPENSE
Deposits                                                                        4,347        4,169        8,269         8,775
Federal funds purchased                                                             -            -            2
Subordinated debentures                                                         1,804        1,886        3,577         3,901
Junior debentures - capital securities                                            374            -          748             -
Note payable                                                                        5            -            7             -
------------------------------------------------------------------------------------------------------------------------------------
Total interest expense                                                          6,530        6,055       12,603        12,676
------------------------------------------------------------------------------------------------------------------------------------

Net interest and dividend income                                                4,478        2,349        8,116         4,412
Provision for loan loss reserves                                                  426          100          772           100
------------------------------------------------------------------------------------------------------------------------------------
Net interest and dividend income after
      provision for loan loss reserves                                          4,052        2,249        7,344         4,312
------------------------------------------------------------------------------------------------------------------------------------

NONINTEREST INCOME
Customer service fees                                                              48           35           83            73
Income from mortgage lending activities                                           330          534          569           717
All other                                                                           -            1            -             4
------------------------------------------------------------------------------------------------------------------------------------
Total noninterest income                                                          378          570          652           794
------------------------------------------------------------------------------------------------------------------------------------

NONINTEREST EXPENSES
Salaries and employee benefits                                                    822          586        1,538         1,212
Occupancy and equipment, net                                                      322          278          637           582
Data processing                                                                   148           60          266            95
Advertising and promotion                                                          27            6           34            14
Professional fees and services                                                     85          100          165           197
Stationery, printing and supplies                                                  38           35           71            68
Postage and delivery                                                               22           21           46            43
FDIC and general insurance                                                         42           40           84            85
All other                                                                         174          203          301           357
------------------------------------------------------------------------------------------------------------------------------------
Total noninterest expenses                                                      1,680        1,329        3,142         2,653
------------------------------------------------------------------------------------------------------------------------------------
Earnings before taxes                                                           2,750        1,490        4,854         2,453
Provision for income taxes                                                      1,106          612        1,962           994
------------------------------------------------------------------------------------------------------------------------------------
Net earnings                                                                   $1,644         $878      $ 2,892       $ 1,459
------------------------------------------------------------------------------------------------------------------------------------

Basic earnings per share                                                        $0.42       $ 0.23       $ 0.74        $ 0.37
Diluted earnings per share                                                      $0.33       $ 0.23       $ 0.60        $ 0.37
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to condensed consolidated financial statements.



                                       3
<PAGE>


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





<TABLE>
                                                                                       Quarter Ended         Six-Months Ended
                                                                                         June 30,                June 30,
                                                                                   ---------------------- -----------------------
($ in thousands)                                                                      2002       2001        2002        2001
------------------------------------------------------------------------------------------------------------------------------------

<S>                                                                                   <C>         <C>        <C>        <C>
Net earnings                                                                          $1,644      $878       $2,892     $1,459
------------------------------------------------------------------------------------------------------------------------------------
Net unrealized gains (losses) on securities available for sale                             -        51          (46)       550
Provision for income taxes related to unrealized gains (losses)
   on securities available for sale                                                        -        19          (20)       207
------------------------------------------------------------------------------------------------------------------------------------
Other comprehensive income (loss), net of tax                                              -        32          (26)       343
------------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income, net of tax                                                $1,644      $910       $2,866     $1,802
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to condensed consolidated financial statements.









                                       4
<PAGE>



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

<TABLE>
                                                                                                   Six-Months Ended
                                                                                                       June 30,
                                                                                             -----------------------------
($ in thousands)                                                                                  2002           2001
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                             <C>            <C>
CLASS A COMMON STOCK
Balance at beginning of period                                                                  $ 3,545        $ 3,545
Issuance of 105,650 shares upon the exercise of warrants in 2002                                    105              -
------------------------------------------------------------------------------------------------------------------------------------
Balance at end of period                                                                          3,650          3,545
------------------------------------------------------------------------------------------------------------------------------------

CLASS B COMMON STOCK
------------------------------------------------------------------------------------------------------------------------------------
Balance at beginning and end of period                                                              355            355
------------------------------------------------------------------------------------------------------------------------------------

ADDITIONAL PAID-IN-CAPITAL, COMMON
Balance at beginning of period                                                                   19,001         18,975
Compensation related to vesting of certain Class B stock warrants                                    13             12
Compensation related to certain Class A stock warrants modified                                     117              -
Issuance of 105,650 shares upon the exercise of Class A stock warrants
     and related tax benefit in 2002                                                                659              -
------------------------------------------------------------------------------------------------------------------------------------
Balance at end of period                                                                         19,790         18,987
------------------------------------------------------------------------------------------------------------------------------------

RETAINED EARNINGS
Balance at beginning of period                                                                   17,383         13,605
Net earnings for the period                                                                       2,892          1,459
------------------------------------------------------------------------------------------------------------------------------------
Balance at end of period                                                                         20,275         15,064
------------------------------------------------------------------------------------------------------------------------------------

ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance at beginning of period                                                                      111           (252)
Net change in accumulated other comprehensive income, net                                           (26)           343
------------------------------------------------------------------------------------------------------------------------------------
Balance at end of period                                                                             85             91
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity at end of period                                                     $44,155        $38,042
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to condensed consolidated financial statements.



                                       5
<PAGE>



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

<TABLE>
                                                                                                              Six-Months Ended
                                                                                                                  June 30,
                                                                                                         ---------------------------
   ($ in thousands)                                                                                        2002               2001
------------------------------------------------------------------------------------------------------------------------------------
   <S>                                                                                                 <C>                <C>
   OPERATING ACTIVITIES
   Net earnings                                                                                        $   2,892          $   1,459
   Adjustments to reconcile net earnings to net cash provided by
         operating activities:
   Depreciation and amortization                                                                             292                228
   Provision for loan loss reserves                                                                          772                100
   Deferred income tax benefit                                                                              (399)                (6)
   Amortization of deferred debenture offering costs                                                         449                355
   Compensation expense related to common stock warrants                                                     130                 12
   Amortization of premiums, fees and discounts, net                                                        (443)            (1,308)
   Net increase in accrued interest payable on debentures                                                    815              1,198
   Net increase in official checks outstanding                                                               961              2,440
   Net increase in all other assets and liabilities                                                          486              1,775
------------------------------------------------------------------------------------------------------------------------------------
   Net cash provided by operating activities                                                               5,955              6,253
------------------------------------------------------------------------------------------------------------------------------------

   INVESTING ACTIVITIES
   Maturities of interest-earning time deposits with banks                                                   200                  -
   Maturities and calls of securities available for sale                                                     500             60,194
   Maturities and calls of securities held to maturity                                                    36,950             21,875
   Purchases of securities held to maturity                                                              (67,355)           (17,792)
   Net increase in loans receivable                                                                      (83,529)           (47,159)
   Purchases of Federal Reserve Bank stock, net                                                             (450)               (64)
   Purchases of premises and equipment, net                                                                 (333)              (228)
------------------------------------------------------------------------------------------------------------------------------------
   Net cash (used in) provided by investing activities                                                  (114,017)            16,826
------------------------------------------------------------------------------------------------------------------------------------

   FINANCING ACTIVITIES
   Net increase in demand, savings, NOW and money market deposits                                         54,092              8,931
   Net increase (decrease) in certificates of deposit                                                     49,224            (12,162)
   Net increase in mortgage escrow funds payable                                                           3,151              1,761
   Principal repayments of debentures                                                                     (2,500)            (1,400)
   Principal repayments of note payable                                                                       (4)                 -
   Proceeds from issuance of debentures, net of issuance costs                                             5,295              3,176
   Proceeds from issuance of common stock                                                                    764                  -
------------------------------------------------------------------------------------------------------------------------------------
   Net cash provided by financing activities                                                             110,022                306
------------------------------------------------------------------------------------------------------------------------------------

   Net increase in cash and cash equivalents                                                               1,960             23,385
   Cash and cash equivalents at beginning of period                                                       24,409             42,938
------------------------------------------------------------------------------------------------------------------------------------
   Cash and cash equivalents at end of period                                                          $  26,369          $  66,323
------------------------------------------------------------------------------------------------------------------------------------

   SUPPLEMENTAL DISCLOSURES
   Cash paid during the period for:
      Interest                                                                                         $  11,292          $  12,118
      Income taxes                                                                                         2,754              1,218
   Noncash activities:
      Transfer of loans to foreclosed real estate, net of chargeoffs                                       1,081                  -
      Purchase of premises with note payable                                                                 275                  -
      Accumulated other comprehensive income,
         change in unrealized gain on securities available for sale, net of tax                              (26)               343
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to condensed consolidated financial statements.



                                       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, 2001. 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, 2001.

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 (the
Bank),  Intervest  Corporation of New York and Intervest  Statutory Trust I. 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 has its headquarters and full-service  banking office in
Rockefeller  Center in New York City, and a total of five  full-service  banking
offices  in  Clearwater  and  Pinellas  County,  Florida.  The Bank  conducts  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  Corporation of New York and its wholly owned subsidiaries,  Intervest
Distribution Corporation and Intervest Realty Servicing Corporation, are located
in  Rockefeller  Center in New York City.  Intervest  Corporation of New York is
engaged in the real estate  business,  including the origination and purchase of
real estate  mortgage loans,  consisting of first mortgage,  junior mortgage and
wraparound mortgage loans.

Intervest  Statutory Trust I was formed in December 2001 for the sole purpose of
issuing  $15,000,000 of capital  securities as more fully described in note 9 to
the  consolidated  financial  statements  in  the  Company's  Annual  Report  to
Stockholders on Form 10-K for the year ended December 31, 2001.

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.

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)                                                    2002         2001              2002           2001
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>          <C>               <C>             <C>
Balance at beginning of period                                     $3,833       $2,768            $3,380          $2,768
Provision charged to operations                                       426          100               772             100
Recoveries of previous chargeoffs (1)                                   -            -               107               -
Chargeoffs (2)                                                       (150)           -              (150)              -
------------------------------------------------------------------------------------------------------------------------------------
Balance at end of period                                           $4,109       $2,868            $4,109          $2,868
------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1)  Represents  proceeds  received from the sale of collateral from a loan that
     was charged off prior to 1997.
(2)  Represents a chargeoff in connection  with the transfer of a  nonperforming
     loan to foreclosed real estate.
</FN>
</TABLE>


                                       7
<PAGE>


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

Note 2 - Allowance for Loan Loss Reserves, Continued

In the second quarter of 2002, the property  collateralizing  a commercial  real
estate loan with a principal balance of $1,243,000 that was on nonaccrual status
and considered  impaired under the criteria of SFAS No.114 at March 31, 2002 and
December  31,  2001,  was  acquired  through   foreclosure  and  transferred  to
Foreclosed  Real Estate at estimated fair value less estimated  selling costs. A
loan charge off of $150,000 was  recorded  against the  allowance  for loan loss
reserves in  connection  with this  transfer.  At June 30,  2002,  there were no
nonaccrual or impaired loans. At December 31, 2001, the  aforementioned  loan of
$1,243,000 was on nonaccrual  status and considered  impaired.  Interest  income
that  was not  accrued  on this  loan  under  its  contractual  terms  prior  to
foreclosure amounted to $31,000 in the first half of 2002.

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,
                                                                           ---------------------------  ---------------------------
                                                                               2002           2001          2002          2001
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>             <C>         <C>            <C>
BASIC EARNINGS PER SHARE
Net earnings                                                                 $1,644,000      $878,000    $2,892,000     $1,459,000
Average number of common shares outstanding                                   3,959,542     3,899,629     3,930,577      3,899,629
------------------------------------------------------------------------------------------------------------------------------------
  Basic net earnings per share                                                    $0.42         $0.23         $0.74          $0.37
------------------------------------------------------------------------------------------------------------------------------------

DILUTED EARNINGS PER SHARE
Adjusted net earnings for diluted earnings per share computation (1)         $1,752,000      $878,000    $3,105,000     $1,459,000
Average number of common shares outstanding for dilution:
  Common shares outstanding per above                                         3,959,542     3,899,629     3,930,577      3,899,629
  Potential dilutive shares resulting from exercise of warrants (2)             417,965             -       324,577              -
  Potential  dilutive  shares  resulting from conversion of debentures (3)      952,502             -       952,502              -

                                                                             -------------------------------------------------------
  Total average number of common shares outstanding                           5,330,009     3,899,629     5,207,656      3,899,629
------------------------------------------------------------------------------------------------------------------------------------
  Diluted net earnings per share                                                  $0.33         $0.23         $0.60          $0.37
------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1)  Adjusted net earnings  represents  net earnings  plus  interest  expense on
     dilutive convertible  debentures,  net of tax, that would not occur if they
     were assumed converted.


(2)  Common  stock  warrants to  purchase  1,132,403  shares of common  stock at
     prices of $10.00 and $10.01 per share were not  considered in the six-month
     computation  of diluted EPS for 2002 because their exercise price per share
     exceeded  the  average  market  price of Class A common  stock  during  the
     period.

     Common  stock  warrants to  purchase  2,650,218  shares of common  stock at
     prices  ranging from $6.67 to $16.00 per share were not  considered  in the
     quarterly and six-month  computations of diluted EPS for 2001 because their
     exercise  price per share  exceeded  the  average  market  price of Class A
     common stock during those periods.

(3)  Convertible  debentures  outstanding  at June 30, 2001 totaling  $8,808,000
     (outstanding  principal and accrued  interest) were convertible into common
     stock at a price of  $14.00  per  share,  but  were not  considered  in the
     quarterly and six-month  computations  of diluted EPS for 2001 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  Bank  is  required  to  maintain   certain   minimum   regulatory   capital
requirements.  The Bank is a  well-capitalized  institution  as  defined  in the
regulations,  which  require  minimum  Tier 1  leverage  and  Tier  1 and  total
risk-based  ratios of 5%, 6% and 10%,  respectively.  Management  believes  that
there are no current  conditions  or events  outstanding  which would change the
Bank's designation as a well-capitalized institution.

The  following is a summary at June 30, 2002 of the minimum  regulatory  capital
requirements and the actual capital of the Bank on a percentage basis:

<TABLE>
                                                                       Actual            Minimum            To Be Considered
                                                                       Ratios           Requirement         Well Capitalized
                                                                       ------           -----------         ----------------
         <S>                                                           <C>                 <C>                   <C>
         Total capital to risk-weighted assets                         12.72%              8.00%                 10.00%
         Tier 1 capital to risk-weighted assets                        11.74%              4.00%                  6.00%
         Tier 1 capital to total average assets - leverage ratio        9.55%              4.00%                  5.00%
</TABLE>
















                                       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,
2002,  and for the three- and  six-month  periods  ended June 30,  2002 and 2001
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,
2002,  and  the  related  condensed  consolidated  statements  of  earnings  and
comprehensive  income for the three- and  six-month  periods ended June 30, 2002
and 2001,  and the  related  condensed  consolidated  statements  of  changes in
stockholders'  equity and cash flows for the  six-month  periods  ended June 30,
2002 and 2001  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 reviews of
the interim  financial  information of Intervest  Corporation of New York, whose
total assets as of June 30, 2002 constituted  13.8% 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  17.4%,  22.5%,  and
29.7%; and 15.6%, 23.6% and 26.1%, respectively,  and whose net interest income,
noninterest  income and net earnings for the three- and six-month  periods ended
June 30, 2001,  constituted  9.5%,  61.8% and 20.6%;  and 6.4%,  49.1% and 8.6%,
respectively of the related consolidated totals.

     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,  2001,  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 21,
2002,  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, 2001 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
July 30, 2002



                                       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, 2002,
and the related condensed  consolidated  statements of operations for the three-
and six-month  periods ended June 30, 2002 and 2001,  and the related  condensed
consolidated  statements of changes in  stockholder's  equity and cash flows for
the  six-month  periods  ended  June 30,  2002 and  2001  (all of which  are not
presented seperately 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, 2001 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 21, 2002, 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, 2001 is fairly stated in all material respects in relation to
the consolidated balance sheet from which it has been derived.



/s/ Eisner, LLP
---------------
New York, New York
July 30, 2002






                                       12
<PAGE>



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

                                     General
                                     -------

Intervest Bancshares Corporation has three wholly owned subsidiaries - Intervest
National Bank, Intervest Corporation of New York and Intervest Statutory Trust I
(hereafter  referred to collectively as the "Company" on a consolidated  basis).
Intervest Bancshares  Corporation and Intervest National Bank may be referred to
individually as the "Holding Company" and the "Bank," respectively.

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.

The Bank is a nationally  chartered,  full-service  commercial bank that has its
headquarters and full-service  banking office in Rockefeller Center, in New York
City,  and a total  of five  full-service  banking  offices  in  Clearwater  and
Pinellas  County,  Florida.  The Bank  conducts a  personalized  commercial  and
consumer banking business,  which consists of attracting deposits from the areas
served by its  banking  offices.  It also  provides  internet  banking  services
through  its web  site:  www.intervestnatbank.com,  which  can  attract  deposit
customers  from outside its primary  market areas.  The deposits,  together with
funds  derived  from  other  sources,  are used to  originate  a variety of real
estate, commercial and consumer loans and to purchase investment securities. The
Bank emphasizes multifamily and commercial real estate lending.

Intervest  Corporation of New York is a mortgage  investment  company located in
Rockefeller  Center in New York City. It is engaged in the real estate business,
including the origination and purchase of real estate mortgage loans, consisting
of first  mortgage,  junior mortgage and wraparound  mortgage loans.  Its wholly
owned  subsidiaries,  Intervest  Distribution  Corporation and Intervest  Realty
Servicing  Corporation  are  nonoperating  entities that provide  administrative
services to Intervest Corporation of New York.

Intervest  Statutory  Trust I was formed in December 2001 in connection with the
issuance of $15,000,000 of Capital Securities. For a further discussion, See the
section entitled "Debentures Payable and Accrued Interest Payable on Debentures"
on page 30 of the Company's  Annual Report to  Stockholders on Form 10-K for the
year ended December 31, 2001.

The Company  announced  that it intends to explore  further  growth  through the
acquisition  of  other  banks  or  thrifts.  It  will  consider  acquisition  of
banks/thrifts  with  operations  compatible  with its own,  with a view  towards
consolidating  selected lines of business,  operations and support  functions in
order  to  achieve  economies  of  scale,  greater  efficiency  and  operational
consistency.  The  Company  anticipates  that  any such  banks/thrifts  would be
located in the eastern United  States.  The Company  emphasizes  that it has not
entered into any agreements or identified any  institutions  for acquisition and
there  can be no  assurances  that any such  acquisitions  will be  successfully
completed.

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

The Company's  profitability  is also  affected by the level of its  noninterest
income and expenses,  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,  occupancy and
equipment  related  expenses,  data processing  expenses,  advertising  expense,
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.  Since the properties underlying the Company's mortgages
are  concentrated  in the New York  City  area and the  State  of  Florida,  the
economic  conditions  in those  areas can also  have an impact on the  Company's
operations.  While  none  of the  properties  underlying  these  mortgages  were



                                       13
<PAGE>

directly  impacted by the  terrorist act of September 11, 2001, it is impossible
to predict the impact such events will have on real estate generally in the City
of New York.

    Comparison of Financial Condition at June 30, 2002 and December 31, 2001
    ------------------------------------------------------------------------

Overview
--------

Total assets at June 30, 2002 increased to  $628,157,000,  from  $512,622,000 at
December 31, 2001. Total liabilities at June 30, 2002 increased to $584,002,000,
from  $472,227,000  at December  31,  2001.  Stockholders'  equity  increased to
$44,155,000 at June 30, 2002, from  $40,395,000 at year-end 2001. Book value per
common share rose to $11.02 per share at June 30, 2002,  from $10.36 at December
31, 2001.

Selected balance sheet  information for the Holding Company and its subsidiaries
as of June 30, 2002 follows:

<TABLE>
                                                                                    Intervest
                                                                        Intervest  Corporation    Intervest   Inter-
                                                           Holding      National      of New     Statutory    Company
($ in thousands)                                           Company        Bank         York        Trust I    Balances  Consolidated
------------------------------------------------------------------------------------------------------------------------------------

<S>                                                       <C>          <C>          <C>              <C>     <C>          <C>
Cash and cash equivalents                                 $   1,725    $  19,613    $   6,737        $   -   $  (1,706)   $  26,369
Time deposits with banks                                          -           50            -            -           -           50
Securities available for sale                                     -        5,646            -            -           -        5,646
Securities held to maturity, net                                  -      128,766            -       15,464     (15,464)     128,766
Federal Reserve Bank stock                                        -        1,104            -            -           -        1,104
Loans receivable, net of deferred fees                       10,076      362,932       76,763            -           -      449,771
Allowance for loan loss reserves                                (51)      (3,984)         (74)           -           -       (4,109)
Investment in subsidiaries                                   59,809            -            -            -     (59,809)           -
Foreclosed real estate                                            -        1,081            -            -           -        1,081
All other assets                                              1,498       14,050        4,097           59        (225)      19,479
------------------------------------------------------------------------------------------------------------------------------------
Total assets                                              $  73,057    $ 529,258    $  87,523    $  15,523   $ (77,204)   $ 628,157
------------------------------------------------------------------------------------------------------------------------------------
Deposits                                                      $   -    $ 467,773        $   -        $   -   $  (2,020)   $ 465,753
Subordinated debentures payable                              25,894            -       66,250            -     (15,464)      76,680
Junior debentures payable-capital securities                      -            -            -       15,000           -       15,000
Note payable                                                      -          271            -            -           -          271
Accrued interest payable on all debentures                    2,739            -        9,558           57         (59)      12,295
All other liabilities                                           269       12,469        1,115            2         148       14,003
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities                                            28,902      480,513       76,923       15,059     (17,395)     584,002
------------------------------------------------------------------------------------------------------------------------------------
Stockholders' equity                                         44,155       48,745       10,600          464     (59,809)      44,155
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                $  73,057    $ 529,258    $  87,523    $  15,523   $ (77,204)   $ 628,157
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

A comparison of the consolidated balance sheets as of June 30, 2002 and December
31, 2001 follows:


<TABLE>
                                                                       At June 30, 2002              At December 31, 2001
                                                                       ----------------              --------------------
                                                                  Carrying          % of          Carrying           % of
($ in thousands)                                                    Value       Total Assets        Value         Total Assets
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>               <C>          <C>                <C>
Cash and cash equivalents                                           $26,369           4.2%         $24,409            4.8%
Time deposits with banks                                                 50             -              250            0.1
Securities available for sale at estimated fair value                 5,646           0.9            6,192            1.2
Securities held to maturity, net                                    128,766          20.5           99,157           19.3
Federal Reserve Bank stock                                            1,104           0.2              654            0.1
Loans receivable, net of deferred fees and loan loss reserves       445,662          70.9          365,146           71.2
Foreclosed real estate                                                1,081           0.2                -              -
All other assets                                                     19,479           3.1           16,814            3.3
------------------------------------------------------------------------------------------------------------------------------------
Total assets                                                       $628,157         100.0%        $512,622          100.0%
------------------------------------------------------------------------------------------------------------------------------------
Deposits                                                           $465,753          74.1%        $362,437           70.7%
Subordinated debentures payable                                      76,680          12.2           73,430           14.3
Junior debentures payable-capital securities                         15,000           2.4           15,000            2.9
Note payable                                                            271           0.1                -              -
Accrued interest payable on all debentures                           12,295           2.0           11,480            2.3
All other liabilities                                                14,003           2.2            9,880            1.9
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities                                                   584,002          93.0          472,227           92.1
------------------------------------------------------------------------------------------------------------------------------------
Stockholders' equity                                                 44,155           7.0           40,395            7.9
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                         $628,157         100.0%        $512,622          100.0%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                       14
<PAGE>

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

Cash and cash equivalents  amounted to $26,369,000 at June 30, 2002, compared to
$24,409,000  at December  31, 2001,  and  consisted of cash on hand and due from
banks, overnight federal funds and short-term commercial paper investments.  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.

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

Securities  available for sale amounted to $5,646,000 at June 30, 2002, compared
to $6,192,000 at December 31, 2001. The decrease was due to maturities.  At June
30, 2002, the portfolio had an unrealized gain, net of tax, of $85,000, compared
to $111,000 at December  31,  2001.  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  held to maturity  increased to  $128,766,000  at June 30, 2002, from
$99,157,000  at  December  31,  2001.  The  increase  was  due to new  purchases
exceeding  maturities  during the period.  The portfolio  consists of short-term
debt obligations of FNMA, FHLB, FHLMC and FFCB with a weighted-average  yield of
approximately 2.89% and a weighted average term of 1.3 years. The securities are
predominately fixed rate and some have call features,  which allow the issuer to
call the security before its stated maturity without penalty.

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

In order for the Bank to be a member of the Federal Reserve Banking System,  the
Bank  maintains an investment in the capital stock of the Federal  Reserve Bank,
which pays a dividend that is currently 6%. The  investment,  which  amounted to
$1,104,000 at June 30, 2002 and $654,000 at December 31, 2001,  fluctuates based
on the 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 $445,662,000  at June 30, 2002,  from  $365,146,000 at December 31,
2001.  The growth  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, 2002,  the allowance for loan loss reserves  amounted to $4,109,000,
compared to $3,380,000 at December 31, 2001. The allowance  represented 0.91% of
total loans (net of deferred  fees)  outstanding  at June 30, 2002,  compared to
0.92% at December 31, 2001. 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.
The increase in the allowance was due to a provision for loan losses of $772,000
(due to loan growth) and a $107,000  recovery from the sale of collateral from a
loan that was charged off prior to 1997.  These additions were partially  offset
by a $150,000  charge off recorded in connection  with a  nonperforming  loan as
discussed below.

In the second quarter of 2002, the property  collateralizing  a commercial  real
estate loan with a principal balance of $1,243,000 that was on nonaccrual status
and considered  impaired under the criteria of SFAS No.114 at March 31, 2002 and
December  31,  2001,  was  acquired  through   foreclosure  and  transferred  to
Foreclosed  Real Estate at estimated fair value less estimated  selling costs. A
loan charge off of $150,000 was  recorded  against the  allowance  for loan loss
reserves in  connection  with this  transfer.  At June 30,  2002,  there were no
nonaccrual or impaired loans. At December 31, 2001, the  aforementioned  loan of
$1,243,000 was the only loan on nonaccrual status and considered impaired.


                                       15
<PAGE>

Foreclosed Real Estate
----------------------

At June 30, 2002,  foreclosed real estate amounted to $1,081,000 and represented
one  commercial  real estate  property  located in the State of Florida that was
acquired by the Bank as discussed in the  preceding  paragraph.  The property is
actively being marketed for sale. Foreclosed real estate is carried at the lower
of the new cost basis or  estimated  fair value less  estimated  selling  costs.
Revenue and expenses from  operations and changes in the valuation  allowance of
the property are included in the consolidated statement of earnings.

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)                               2002               2001
    ----------------------------------------------------------------------------
    Accrued interest receivable                   $4,496            $3,202
    Loans fee receivable                           3,316             2,679
    Premises and equipment, net                    6,358             6,042
    Deferred income tax asset                      1,654             1,236
    Deferred debenture offering costs, net         3,402             3,396
    All other                                        253               259
    ----------------------------------------------------------------------------
                                                 $19,479           $16,814
    ----------------------------------------------------------------------------

Accrued interest receivable fluctuates based on the amount of loans, investments
and  other  interest-earning  assets  outstanding  and the  timing  of  interest
payments received.  The increase was due to a higher level of the aforementioned
interest-earning assets.

Loan fees receivable are fees due to the Company in accordance with the terms of
mortgage  loans.  These fees 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 loan originations.

Premises and equipment  increased due to the purchase of property,  at a cost of
$350,000,  by the Bank that is across  from its Court  Street  branch  office in
Florida. This property was purchased primarily to provide additional parking for
the branch.

The deferred income tax asset relates primarily to the unrealized tax benefit on
the Company's allowance for loan loss reserves, depreciation, 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  increase was due to
additional  costs  incurred  with  the  sale  of  new  debentures  by  Intervest
Corporation of New York, partially offset by normal amortization.

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

Deposit   liabilities   increased  to   $465,753,000  at  June  30,  2002,  from
$362,437,000  at December  31,  2001,  primarily  reflecting  increases in money
market and  certificate  of deposit  accounts of  $50,675,000  and  $49,224,000,
respectively.  At  June  30,  2002,  certificate  of  deposit  accounts  totaled
$290,689,000  and  demand  deposit,  savings,  NOW  and  money  market  accounts
aggregated  $175,064,000.  The  same  categories  of  deposit  accounts  totaled
$241,465,000 and $120,972,000,  respectively,  at December 31, 2001. Certificate
of deposit accounts represented 62% of total deposits at June 30, 2002, compared
to 67% at year-end 2001.

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

At June 30,  2002,  debentures  payable  amounted  to  $76,680,000,  compared to
$73,430,000  at year-end  2001.  The increase was due to the sale of  additional
debentures (Series 1/17/02 maturing at various times through October 1, 2009) by
Intervest  Corporation  of New York totaling  $5,750,000  (as part of its normal
funding of its mortgage loan originations), partially offset by the repayment of


                                       16
<PAGE>

$2,500,000 of its Series 06/28/99 debentures. The sale of the debentures,  after
underwriter's  commissions and other issuance costs, resulted in net proceeds of
$5,325,000.

At June 30, 2002,  Intervest  Corporation of New York had $66,250,000  principal
amount of debentures payable outstanding and the Holding Company had $10,430,000
principal  amount of debentures  payable  outstanding,  of which $6,930,000 were
convertible  into the Holding  Company's Class A common stock at a current price
of $10.01 per share.  Intervest Corporation of New York has filed a registration
statement for the issuance of up to an additional $7,750,000 in principal amount
of debentures that is expected to be completed in the third quarter.

At June 30, 2002 and December 31, 2001, the Holding Company,  through its wholly
owned  subsidiary  Intervest  Statutory Trust I, has Trust Preferred  Securities
(Junior Debentures  Payable)  outstanding  totaling  $15,000,000 that qualify as
regulatory capital.

At June 30,  2002,  accrued  interest  payable  on all  debentures  amounted  to
$12,295,000, compared to $11,480,000 at year-end 2001. Nearly all of the accrued
interest payable is due and payable at the maturity of various debentures. For a
further  discussion  of all the  debentures,  including  conversion  prices  and
redemption premiums,  see notes 7 and 9 to the consolidated financial statements
included in the  Company's  Annual Report to  Stockholders  on Form 10-K for the
year ended December 31, 2001.

Note Payable
------------

In connection  with the purchase of property by the Bank that is across from its
Court Street branch office in Florida as described previously, the Bank issued a
note  payable to the seller for  $275,000.  The note matures in February of 2017
and calls for monthly payments of principal and interest at 7% per annum.

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

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

                                                  At June 30,    At December 31,
       ($ in thousands)                              2002             2001
       -------------------------------------------------------------------------
       Mortgage escrow funds payable                $7,404          $4,253
       Official checks outstanding                   4,180           3,219
       Accrued interest payable on deposits            864             817
       Income taxes payable                            326             772
       All other                                     1,229             819
       -------------------------------------------------------------------------
                                                   $14,003          $9,880
       -------------------------------------------------------------------------

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.  The increase in all other is largely
due to fees collected and unearned on outstanding loan commitments.

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

Stockholders' equity increased to $44,155,000 at June 30, 2002, from $40,395,000
at December 31, 2001.  The  increase was due to the  following:  net earnings of
$2,892,000;  the issuance of 105,650 shares of common stock upon the exercise of
Class A  common  stock  warrants  for  total  proceeds,  including  related  tax
benefits,  of $764,000;  the  recording of $130,000 of  compensation  related to
stock  warrants;  and a $26,000  decrease in  unrealized  gains,  net of tax, on
securities  available for sale. For additional  discussion of the aforementioned
compensation,  see the  section  "Comparison  of Results of  Operations  for the
Quarters Ended June 30, 2002 and 2001."

The Bank is a well-capitalized institution as defined in the regulations,  which
require minimum Tier 1 leverage and Tier 1 and total risk-based ratios of 5%, 6%
and 10%, respectively.  Management believes that there are no current conditions
or  events   outstanding  which  would  change  the  Bank's   designation  as  a
well-capitalized institution. See note 4 to the condensed consolidated financial
statements in this report for the Bank's 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 Bank's offices


                                       17
<PAGE>

and through the mail,  satisfactions and repayments of loans, the maturities and
calls of securities,  and cash provided by operating activities. 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, 2002, the Company's total commitment to lend aggregated
approximately  $76,000,000.  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, 2002, the Company's one-year interest-rate sensitivity
gap was a positive $65,594,000 or 10.4% of total assets,  compared to a positive
$31,738,000,  or 6.2%,  at December 31, 2001.  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 2001 Annual Report to  Stockholders on
Form 10-K, pages 31and 32.

              Comparison of Results of Operations for the Quarters
              ----------------------------------------------------
                          Ended June 30, 2002 and 2001
                          ----------------------------

Overview
--------

Consolidated  net  earnings  in the  second  quarter  of 2002  increased  87% to
$1,644,000,  from $878,000, in the second quarter of 2001. Earnings per share on
a fully diluted basis increased 43% to $0.33 in the second quarter of 2002, from
$0.23 in the second quarter of 2001.  The earnings per share  computation in the
2002 quarter  included  common shares  resulting  from common stock warrants and
convertible  debentures that became  dilutive  during the period.  The growth in
quarterly earnings was due to a $2,129,000 increase in net interest and dividend
income,  partially offset by the following: a $494,000 increase in the provision
for income  taxes;  an  increase  in the  provision  for loan loss  reserves  of
$326,000; a $351,000 increase in noninterest expenses; and a $192,000 decline in
noninterest income.

Selected information regarding results of operations for the Holding Company and
its subsidiaries for the second quarter of 2002 follows:

<TABLE>
                                                                                Intervest
                                                                  Intervest   Corporation    Intervest       Inter-
                                                      Holding      National        of New    Statutory      Company
($ in thousands)                                      Company          Bank          York      Trust I     Balances    Consolidated
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>           <C>           <C>          <C>          <C>             <C>
Interest and dividend income                          $   257       $ 8,465       $ 2,295      $   382      $  (391)        $11,008
Interest expense                                          672         4,361         1,518          370         (391)          6,530
                                                      -----------------------------------------------------------------------------
Net interest and dividend (expense) income               (415)        4,104           777           12            -           4,478
Provision for loan loss reserves                            2           386            38            -            -             426
Noninterest income                                         51           291           477            -         (441)            378
Noninterest expenses                                      234         1,559           316           12         (441)          1,680
                                                      ------------------------------------------------------------------------------
Earnings (loss) before taxes                             (600)        2,450           900            -            -           2,750
Provision (credit) for income taxes                      (271)          966           411            -            -           1,106
-----------------------------------------------------------------------------------------------------------------------------------
Net (loss) earnings                                   $  (329)      $ 1,484       $   489          $ -         $  -         $ 1,644
------------------------------------------------------------------------------------------------------------------------------------
Intercompany dividends received (paid) (1)            $   375       $  (375)         $  -          $ -         $  -            $  -
------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1)  The Bank pays a monthly  dividend of  $125,000  to the  Holding  Company in
     order   to   provide   funds   for  the   debt   service   on  the   Junior
     Debentures-Capital  Securities  (the proceeds of which were  contributed to
     the Bank as capital in December 2001).
</FN>
</TABLE>


Net Interest and Dividend Income
--------------------------------

Net interest and dividend income is the Company's primary source of earnings and
is   influenced   primarily   by  the   amount,   distribution   and   repricing
characteristics of its interest-earning assets and interest-bearing  liabilities
as well as by the relative levels and movements of interest rates.  Net interest
and dividend income  increased to $4,478,000 in the second quarter of 2002, from
$2,349,000  in the second  quarter of 2001.  The  increase was  attributable  to
growth of $169,002,000 in the Company's average  interest-earning  assets and an
increase in the net interest margin from 2.29% in the second quarter of 2001, to
3.10% in the second  quarter of 2002.  The growth in average  earning assets was
due to  $145,987,000  in new  mortgage  loans and a net increase in security and
other  short-term  investments  aggregating  $23,015,000.  These  increases were
funded by $135,450,000 of new deposits, $27,931,000 of additional borrowed funds
and $5,213,000 of additional stockholders' equity.

                                       18
<PAGE>

The increase in the margin was due to the Company's cost of funds  decreasing at
a faster pace than its yield  earned on  interest-earning  assets in a declining
interest rate  environment.  The yield on  interest-earning  assets decreased 59
basis  points to 7.61% in the second  quarter of 2002 due to lower  rates on new
mortgage  loans  originated,  and  lower  yields  earned on  security  and other
short-term investments. The cost of funds decreased 164 basis points to 4.90% in
the second quarter of 2002 primarily due to lower rates paid on deposit accounts
and rate decreases on floating-rate debentures. The floating-rate debentures are
indexed to the JPMorgan Chase Bank prime rate, which decreased by a total of 475
basis points from January 2001 to June 2002.

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

<TABLE>
                                                                                  Quarter Ended
                                                  ----------------------------------------------------------------------------------
                                                                June 30, 2002                         June 30, 2001
                                                  ----------------------------------------------------------------------------------
                                                        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                                               $435,623     $ 9,972    9.18%         $289,636      $6,984       9.67%
   Securities                                           132,345         983    2.98            52,563         684       5.22
   Other interest-earning assets                         12,171          53    1.75            68,938         736       4.28
------------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets                           580,139     $11,008    7.61%          411,137      $8,404       8.20%
------------------------------------------------------------------------------------------------------------------------------------
Noninterest-earning assets                               15,643                                11,464
------------------------------------------------------------------------------------------------------------------------------------
Total assets                                           $595,782                              $422,601
------------------------------------------------------------------------------------------------------------------------------------

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
   Interest checking deposits                          $  9,640     $    59    2.45%         $  7,080      $   51       2.89%
   Savings deposits                                      29,938         208    2.79            17,561         177       4.04
   Money market deposits                                122,896         852    2.78            60,284         606       4.03
   Certificates of deposit                              268,907       3,228    4.81           211,006       3,335       6.34
------------------------------------------------------------------------------------------------------------------------------------
Total deposit accounts                                  431,381       4,347    4.04           295,931       4,169       5.65
------------------------------------------------------------------------------------------------------------------------------------
   Debentures and related interest payable               87,882       1,804    8.23            75,224       1,886      10.06
   Junior debentures - capital securities                15,000         374   10.00                 -           -          -
   Note payable                                             273           5    7.00                 -           -          -
------------------------------------------------------------------------------------------------------------------------------------
Total borrowed funds                                    103,155       2,183    8.49            75,224       1,886      10.06
------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities                      534,536     $ 6,530    4.90%          371,155      $6,055       6.54%
------------------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing deposits                              5,040                                 4,685
Noninterest-bearing liabilities                          13,552                                 9,320
Stockholders' equity                                     42,654                                37,441
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity             $595,782                              $422,601
------------------------------------------------------------------------------------------------------------------------------------
Net interest and dividend income/spread                             $ 4,478    2.71%                       $2,349       1.66%
------------------------------------------------------------------------------------------------------------------------------------
Net interest-earning assets/margin                     $ 45,603                3.10%         $ 39,982                   2.29%
------------------------------------------------------------------------------------------------------------------------------------
Ratio of total interest-earning assets
   to total interest-bearing liabilities                  1.09x                                 1.11x
------------------------------------------------------------------------------------------------------------------------------------
Other Ratios:
  Return on average assets (1)                            1.10%                                 0.83%
  Return on average equity  (1)                          15.42%                                 9.38%
  Noninterest expense to average assets (1)               1.13%                                 1.26%
  Efficiency ratio (2)                                   34.60%                                45.53%
  Average stockholders' equity to average assets          7.16%                                 8.86%
------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Annualized
(2)  Defined as  noninterest  expenses as a percentage  of net  interest  income
     before the provision for loan losses plus noninterest income.
</FN>
</TABLE>


                                       19
<PAGE>



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

In the second quarter of 2002, the Company  recorded a provision for loan losses
of $426,000, compared to $100,000 in the same quarter of 2001. 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.  The higher provision for the
2002 quarter was due to the growth in the loan portfolio of  $45,297,000  during
the period.

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  decreased to $378,000 in the second  quarter of 2002,  from
$570,000 in the second quarter of 2001. The decrease was due to lower income and
fees  ($230,000)  from the  prepayment of mortgage  loans,  partially  offset by
higher loan service fee income.  The amount and timing of loan  prepayments,  if
any, cannot be predicted and can fluctuate  significantly.  Normally, 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.

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

Noninterest expenses increased to $1,680,000 in the second quarter of 2002, from
$1,239,000  in  the  comparable  quarter  of  2001,   exclusive  of  $90,000  of
nonrecurring  expenses  associated  with  the  merger  of  Intervest  Bank  into
Intervest  National Bank in 2001. The resulting increase of $441,000 was largely
due to a $236,000  increase in compensation and benefits,  a $88,000 increase in
data  processing  expenses,  a  $44,000  increase  in  occupancy  and  equipment
expenses, a $21,000 increase in advertising expenses and the addition of $47,000
of net expenses associated with foreclosed real estate during the second quarter
of 2002.

The  increase  in  compensation  and  benefits  was  primarily  due to  $117,000
associated  with certain common stock  warrants held by employees.  During 2001,
the Company  modified the terms of its Class A warrants  (exercisable  at $12.50
and $16.00 per share as of December 31, 2001) and reduced the exercise  price to
$10.01 per share  commencing  January 1, 2002 until their new expiration date of
December 31, 2002. For these warrants, compensation expense is being recorded in
the  statement of earnings with the  corresponding  credit to paid in capital in
accordance  with variable  rate  accounting as prescribed in APB Opinion No. 25.
Future compensation  amounts related to these warrants will fluctuate up or down
depending  on the  Company's  Class A common  stock price and number of warrants
outstanding  and exercised.  The remainder of the increase was due to additional
staff, salary increases, and a bonus payment to the Chairman of the Company.

The increase in data processing expenses was due to growth in the Bank's assets.
The Bank engages a third-party servicer for its main data processing and the fee
is a function of the Bank's total assets.

The increase in occupancy  and  equipment  expenses was  primarily due to higher
real estate taxes and  maintenance  charges,  including  insurance  and security
protection expenses.

The  increase in  advertising  expenses  was due to  additional  advertising  to
support loan and deposit growth.

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

The provision for income taxes  increased to $1,106,000 in the second quarter of
2002, from $612,000 in the second quarter of 2001, due to higher pre-tax income.
The Company's  effective tax rate  (inclusive of state and local taxes) amounted
to 40.2% in the 2002 period, compared to 41.1% in the 2001 period.




                                       20
<PAGE>


             Comparison of Results of Operations for the Six-Months
             ------------------------------------------------------
                          Ended June 30, 2002 and 2001
                          ----------------------------

Overview
--------

Consolidated  net  earnings  for  the  first  half  of  2002  increased  98%  to
$2,892,000,  or $0.60 per fully diluted  share,  from  $1,459,000,  or $0.37 per
fully diluted  share,  in the first half of 2001. The growth in earnings was due
to a $3,704,000  increase in net interest and dividend income,  partially offset
by a higher provision for income taxes of $968,000,  a $672,000  increase in the
provision for loan loss reserves,  a $489,000  increase in noninterest  expenses
and a $142,000 decline in noninterest income. The earnings per share computation
in the 2002 period included  common shares  resulting from common stock warrants
and convertible debentures that became dilutive during the period.

Selected information regarding results of operations for the Holding Company and
its subsidiaries for the six-months ended June 30, 2002 follows:

<TABLE>
                                                                             Intervest
                                                              Intervest    Corporation     Intervest        Inter-
                                                 Holding       National         of New     Statutory       Company
($ in thousands)                                 Company           Bank           York       Trust I      Balances     Consolidated
------------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>            <C>            <C>           <C>           <C>              <C>
Interest and dividend income                    $    501       $ 15,988       $  4,275      $    764      $   (809)        $ 20,719
Interest expense                                   1,338          8,324          3,009           741          (809)          12,603

                                                ------------------------------------------------------------------------------------
Net interest and dividend (expense) income          (837)         7,664          1,266            23             -            8,116
Provision for loan loss reserves                       2            714             56             -             -              772
Noninterest income                                   100            496            815             -          (759)             652
Noninterest expenses                                 326          2,917            635            23          (759)           3,142
                                                ------------------------------------------------------------------------------------
Earnings (loss) before taxes                      (1,065)         4,529          1,390             -             -            4,854
Provision (credit) for income taxes                 (483)         1,809            636             -             -            1,962
------------------------------------------------------------------------------------------------------------------------------------
Net (loss) earnings                             $   (582)      $  2,720       $    754           $ -          $  -         $  2,892
------------------------------------------------------------------------------------------------------------------------------------
Intercompany dividends received (paid) (1)      $    750       $   (750)          $  -           $ -          $  -             $  -
------------------------------------------------------------------------------------------------------------------------------------
<FN>

(1)  The Bank pays a monthly  dividend of  $125,000  to the  Holding  Company in
     order   to   provide   funds   for  the   debt   service   on  the   Junior
     Debentures-Capital  Securities  (the proceeds of which were  contributed to
     the Bank as capital in December 2001).
</FN>
</TABLE>

Net Interest and Dividend Income
--------------------------------

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

Net interest and dividend  income  increased to  $8,116,000 in the first half of
2002, from  $4,412,000 in the first half of 2001. The increase was  attributable
to growth of $132,837,000 in the Company's average  interest-earning  assets and
an increase in the net interest  margin from 2.15% in the first half of 2001, to
3.00% in the first half of 2002.

The growth in average  earning  assets was due to  $131,236,000  in new mortgage
loans.  The loans were funded by  $98,861,000  of new deposits,  $28,074,000  of
additional borrowed funds and a $4,752,000 increase in stockholders' equity.

The increase in the margin was due to the Company's cost of funds  decreasing at
a faster pace than its yield  earned on  interest-earning  assets in a declining
interest rate  environment.  The yield on  interest-earning  assets decreased 68
basis  points  to  7.65% in the  first  half of  2002,  while  the cost of funds
decreased  176 basis points to 5.06% in the first half of 2002.  The reasons for
the changes are  substantially the same as those discussed in the "Comparison of
Results of Operations for the Quarters Ended June 30, 2002 and 2001."

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



                                       21
<PAGE>


<TABLE>
                                                                                Six-Months Ended
                                                  ----------------------------------------------------------------------------------
                                                             June 30, 2002                            June 30, 2001
                                                  ----------------------------------------------------------------------------------
                                                       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                                              $411,215     $18,792    9.22%            $279,979     $13,587     9.79%
   Securities                                          123,574       1,825    2.98               77,672       2,180     5.66
   Other interest-earning assets                        11,608         102    1.77               55,909       1,321     4.76
------------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets                          546,397     $20,719    7.65%             413,560     $17,088     8.33%
------------------------------------------------------------------------------------------------------------------------------------
Noninterest-earning assets                              14,824                                   11,514
------------------------------------------------------------------------------------------------------------------------------------
Total assets                                          $561,221                                 $425,074
------------------------------------------------------------------------------------------------------------------------------------

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
   Interest checking deposits                          $ 9,602       $ 119    2.50%            $  7,020       $ 103     2.96%
   Savings deposits                                     28,398         401                       16,938         385     4.58
                                                                              2.85
   Money market deposits                               106,158       1,488    2.83               58,943       1,360     4.65
   Certificates of deposit                             255,415       6,261    4.94              217,811       6,927     6.41
------------------------------------------------------------------------------------------------------------------------------------
Total deposit accounts                                 399,573       8,269    4.17              300,712       8,775     5.88
------------------------------------------------------------------------------------------------------------------------------------
   Federal funds purchased                                 171           2    1.96                    -           -        -
   Debentures and related interest payable              86,869       3,577                       74,175       3,901    10.61
                                                                              8.30
   Junior debentures - capital securities               15,000         748   10.06                    -           -        -
   Note payable                                            209           7    6.98                    -           -        -
------------------------------------------------------------------------------------------------------------------------------------
Total borrowed funds                                   102,249       4,334    8.55               74,175       3,901    10.61
------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities                     501,822     $12,603    5.06%             374,887     $12,676     6.82%
------------------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing deposits                             5,593                                    5,083
Noninterest-bearing liabilities                         12,061                                    8,111
Stockholders' equity                                    41,745                                   36,993
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity            $561,221                                 $425,074
------------------------------------------------------------------------------------------------------------------------------------
Net interest and dividend income/spread                              $8,116   2.59%                          $4,412     1.51%
------------------------------------------------------------------------------------------------------------------------------------
Net interest-earning assets/margin                     $44,575                3.00%             $38,673                 2.15%
------------------------------------------------------------------------------------------------------------------------------------
Ratio of total interest-earning assets
   to total interest-bearing liabilities                 1.09x                                    1.10x
------------------------------------------------------------------------------------------------------------------------------------
Other Ratios:
  Return on average assets (1)                           1.03%                                    0.69%
  Return on average equity  (1)                         13.86%                                    7.89%
  Noninterest expense to average assets (1)              1.12%                                    1.25%
  Efficiency ratio (2)                                  35.83%                                   50.96%
  Average stockholders' equity to average assets         7.44%                                    8.70%
------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1)  Annualized
(2)  Defined as  noninterest  expenses as a percentage  of net  interest  income
     before the provision for loan losses plus noninterest income.
</FN>
</TABLE>

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

In the first half of 2002,  the Company  recorded a provision for loan losses of
$772,000, compared to $100,000 in the first half of 2001. 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.  The  provision  for the 2002
period was due to the growth in the loan portfolio of $81,245,000.

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 decreased to $652,000 in
the first half of 2002,  from  $794,000 in the first half of 2001.  The decrease
was due to lower  income and fees  ($190,000)  from the  prepayment  of mortgage


                                       22
<PAGE>

loans, partially offset by higher loan service fee income. The amount and timing
of  loan   prepayments,   if  any,   cannot  be  predicted   and  can  fluctuate
significantly. Normally, 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.

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

Noninterest  expenses  increased to $3,142,000  in the first half of 2002,  from
$2,498,000  in  the  comparable  period  of  2001,   exclusive  of  $155,000  of
nonrecurring  expenses  associated  with  the  merger  of  Intervest  Bank  into
Intervest  National Bank in 2001. The resulting increase of $644,000 was largely
due to a $326,000 increase in compensation and benefits,  a $171,000 increase in
data  processing  expenses,  a  $55,000  increase  in  occupancy  and  equipment
expenses, a $20,000 increase in advertising expenses and the addition of $47,000
of net expenses associated with foreclosed real estate during the second quarter
of  2002.  The  reasons  for the  changes  are  substantially  the same as those
discussed in the  "Comparison  of Results of Operations  for the Quarters  Ended
June 30, 2002 and 2001."

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

The  provision  for income taxes  increased to  $1,962,000  in the first half of
2002, from $994,000 in the first half of 2001, due to higher pre-tax income. The
Company's  effective tax rate  (inclusive of state and local taxes)  amounted to
40.4% in the 2002 period, compared to 40.5% in the 2001 period.

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, and the issuance of
its  debentures.  The  Company has not  engaged in and  accordingly  has no risk
related to trading accounts, commodities or foreign exchange. The measurement of
market risk  associated  with financial  instruments is meaningful only when all
related and offsetting on-and off-balance sheet transactions are aggregated, and
the resulting net positions are identified.  Disclosures about the fair value of
financial  instruments as of December 31, 2001,  which reflect changes in market
prices  and  rates,  can be  found  in  note  20 to the  consolidated  financial
statements  included in the Company's Annual Report to Stockholders on Form 10-K
for the year ended December 31, 2001.

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, 2001.

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 24, 2002.



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<PAGE>

(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 22, 2002 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
     ---------------------------------------------------------------------------------------------------
     <S>                                      <C>                   <C>
     Election of Directors - Class A
     Michael A. Callen                        3,298,277             1,111                   -
     Wayne F. Holly                           3,290,288             9,100                   -
     Lawton Swan, III                         3,290,488             8,900                   -

     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


ITEM 6.  Exhibits and Reports on Form 8-K

(a)  No Exhibits filed with this report.

(b)  No reports on Form 8-K were filed during the  reporting  period  covered by
     this report.

                                   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 9, 2002         By:  /s/ Lowell S. Dansker
                             --------------------------
                                      Lowell S. Dansker, President and Treasurer
                                      (Chief Financial Officer)

Date:  August 9, 2002        By:  /s/ Lawrence G. Bergman
                             ----------------------------
                                      Lawrence G. Bergman,  Vice  President  and
                                      Secretary




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