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

                     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 MARCH 31, 2005
                                                 --------------


                          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.)


                        ONE ROCKEFELLER PLAZA, SUITE 400
                          NEW YORK, NEW YORK 10020-2002
              ----------------------------------------------------
                    (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 13 or 15(d) of the Securities Exchange Act of
1934  during  the past 12 months (or for such shorter period that the registrant
was  required  to  file  such  reports), and (2) has been subject to such filing
requirements  for  the  past  90  days:
YES XX  NO   .
    --     --

Indicate  by  check  mark  whether  the  Registrant  is an accelerated filer (as
defined  in  Rule  12b-2  of  the  Exchange  Act):
YES     NO XX.
    --     --

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

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

     Class A Common Stock, $1.00         5,890,073 Outstanding at April 30, 2005
     ---------------------------         ---------------------------------------
     par value per share
     -------------------

     Class B Common Stock, $1.00           385,000 Outstanding at April 30, 2005
     ---------------------------         ---------------------------------------
     par value per share
     -------------------

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


<PAGE>
<TABLE>
<CAPTION>
                     INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
                                         FORM 10-Q
                                      MARCH 31, 2005
                                     TABLE OF CONTENTS

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

    Condensed Consolidated Balance Sheets
      as of March 31, 2005 (Unaudited) and December 31, 2004 . . . . . . . . . . . . .   2

    Condensed Consolidated Statements of Earnings (Unaudited)
      for the Quarters Ended March 31, 2005 and 2004 . . . . . . . . . . . . . . . . .   3

    Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
      for the Quarters Ended March 31, 2005 and 2004 . . . . . . . . . . . . . . . . .   4

    Condensed Consolidated Statements of Cash Flows (Unaudited)
      for the Quarters Ended March 31, 2005 and 2004 . . . . . . . . . . . . . . . . .   5

    Notes to Condensed Consolidated Financial Statements (Unaudited) . . . . . . . . .   6

    Review by Independent Registered Public Accounting Firm. . . . . . . . . . . . . .  13

    Report of Independent Registered Public Accounting Firm. . . . . . . . . . . . . .  14

  ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS OF OPERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . .  16

  ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . . . . . . .  23

  ITEM 4.   CONTROLS AND PROCEDURES. . . . . . . . . . . . . . . . . . . . . . . . . .  24

PART II. OTHER INFORMATION

  ITEM 1.   LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24

  ITEM 2   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS . . . . . . . .  24

  ITEM 3.   DEFAULTS UPON SENIOR SECURITIES. . . . . . . . . . . . . . . . . . . . . .  24

  ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. . . . . . . . . . . .  24

  ITEM 5.   OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24

  ITEM 6.   EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25
</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 factors below are among those that
could  cause  actual  results  to  differ  materially  from  the forward-looking
statements.

RISK  FACTORS

The  Company's  business  is  affected by a number of factors, including but not
limited to the impact of: interest rates; loan demand; loan concentrations; loan
prepayments;  ability  to  raise  funds  for investment; competition; general or
local economic conditions; credit risk and the related adequacy of the allowance
for  loan losses; terrorist acts; natural disasters; armed conflicts; regulatory
supervision  and  regulation;  dependence  on key personnel; and voting control.


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

                                                                                                 MARCH 31,    DECEMBER 31,
($in thousands, except par value)                                                                   2005          2004
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                                             <C>           <C>
ASSETS                                                                                           (Unaudited)
Cash and due from banks                                                                         $     21,874  $      12,026
Federal funds sold                                                                                    22,372          9,948
Commercial paper and other short-term investments                                                      5,101          2,625
                                                                                                ---------------------------
  Total cash and cash equivalents                                                                     49,347         24,599
Securities held to maturity, net (estimated fair value of $251,777 and $247,211, respectively)       254,754        248,888
Federal Reserve Bank and Federal Home Loan Bank stock, at cost                                         5,092          5,092
Loans receivable (net of allowance for loan losses of $12,139 and $11,106, respectively)           1,083,022      1,004,290
Accrued interest receivable                                                                            7,098          6,699
Loan fees receivable                                                                                   8,732          8,208
Premises and equipment, net                                                                            6,610          6,636
Deferred income tax asset                                                                              5,547          5,095
Deferred debenture offering costs, net                                                                 4,664          4,929
Other assets                                                                                           2,573          2,315
===========================================================================================================================
TOTAL ASSETS                                                                                    $  1,427,439  $   1,316,751
===========================================================================================================================
LIABILITIES
Deposits:
  Noninterest-bearing demand deposit accounts                                                   $      7,919  $       6,142
  Interest-bearing deposit accounts:
    Checking (NOW) accounts                                                                           10,963         15,051
    Savings accounts                                                                                  23,313         27,359
    Money market accounts                                                                            193,118        200,549
    Certificate of deposit accounts                                                                  888,344        744,771
                                                                                                ---------------------------
Total deposit accounts                                                                             1,123,657        993,872
Borrowed Funds:
    Federal Home Loan Bank advances                                                                   15,000         36,000
    Subordinated debentures                                                                           91,810         94,430
    Subordinated debentures - capital securities                                                      61,856         61,856
    Accrued interest payable on all borrowed funds                                                     9,090         10,154
    Mortgage note payable                                                                                239            242
                                                                                                ---------------------------
Total borrowed funds                                                                                 177,995        202,682
Accrued interest payable on deposits                                                                   2,131          1,718
Mortgage escrow funds payable                                                                         19,914         14,533
Official checks outstanding                                                                            6,578         12,061
Other liabilities                                                                                      3,788          1,791
---------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES                                                                                  1,334,063      1,226,657
---------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock (300,000 shares authorized, none issued)                                                   -              -
Class A common stock ($1.00 par value, 9,500,000 shares authorized,
  5,888,843 and 5,886,433 shares issued and outstanding, respectively)                                 5,889          5,886
Class B common stock ($1.00 par value, 700,000 shares authorized,
  385,000 shares issued and outstanding)                                                                 385            385
Additional paid-in-capital, common                                                                    38,992         38,961
Retained earnings                                                                                     48,110         44,862
---------------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY                                                                            93,376         90,094
===========================================================================================================================
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                      $  1,427,439  $   1,316,751
===========================================================================================================================
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
                      INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
                        CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                         (Unaudited)

                                                                            QUARTER ENDED
                                                                               MARCH 31,
                                                                         -------------------
($in thousands, except per share data)                                     2005       2004
--------------------------------------------------------------------------------------------
<S>                                                                      <C>        <C>
INTEREST AND DIVIDEND INCOME
Loans receivable                                                         $ 18,811   $13,792
Securities                                                                  1,563       705
Other interest-earning assets                                                 194        96
--------------------------------------------------------------------------------------------
TOTAL INTEREST AND DIVIDEND INCOME                                         20,568    14,593
--------------------------------------------------------------------------------------------

INTEREST EXPENSE
Deposits                                                                    9,039     5,312
Subordinated debentures                                                     2,060     2,233
Subordinated debentures - capital securities                                1,090       666
Other borrowed funds                                                           94         4
--------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE                                                     12,283     8,215
--------------------------------------------------------------------------------------------

NET INTEREST AND DIVIDEND INCOME                                            8,285     6,378
Provision for loan losses                                                   1,033     1,077
--------------------------------------------------------------------------------------------
NET INTEREST AND DIVIDEND INCOME AFTER PROVISION FOR LOAN LOSSES            7,252     5,301
--------------------------------------------------------------------------------------------

NONINTEREST INCOME
Customer service fees                                                          76        59
Income from mortgage lending activities                                       149       190
Income from the early repayment of mortgage loans                             654     1,156
Commissions and fees                                                            -        56
Loss from early call of investment securities                                  (1)       (5)
--------------------------------------------------------------------------------------------
TOTAL NONINTEREST INCOME                                                      878     1,456
--------------------------------------------------------------------------------------------

NONINTEREST EXPENSES
Salaries and employee benefits                                              1,285       961
Occupancy and equipment, net                                                  357       344
Data processing                                                               136       129
Professional fees and services                                                139       103
Stationery, printing and supplies                                              54        44
Postage and delivery                                                           33        25
FDIC and general insurance                                                     79        64
Director and committee fees                                                   122        88
Advertising and promotion                                                      47        13
All other                                                                     122       147
--------------------------------------------------------------------------------------------
TOTAL NONINTEREST EXPENSES                                                  2,374     1,918
--------------------------------------------------------------------------------------------
Earnings before income taxes                                                5,756     4,839
Provision for income taxes                                                  2,508     2,104
============================================================================================
NET EARNINGS                                                             $  3,248   $ 2,735
============================================================================================

BASIC EARNINGS PER SHARE                                                 $  0 .52   $  0.45
DILUTED EARNINGS PER SHARE                                               $  0 .48   $  0.41
DIVIDENDS PER SHARE                                                      $      -   $     -
--------------------------------------------------------------------------------------------
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
                             INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                                (Unaudited)

                                                                                QUARTER ENDED
                                                                                  MARCH 31,
                                                                    --------------------------------------
                                                                           2005                 2004
                                                                    --------------------------------------
($in thousands)                                                      SHARES    AMOUNT    SHARES    AMOUNT
----------------------------------------------------------------------------------------------------------
<S>                                                                 <C>        <C>      <C>        <C>

CLASS A COMMON STOCK
Balance at beginning of period                                      5,886,433  $ 5,886  5,603,377  $ 5,603
Issuance of shares upon the exercise of warrants                            -        -     42,510       43
Issuance of shares upon the conversion of debentures                    2,410        3     17,188       17
----------------------------------------------------------------------------------------------------------
Balance at end of period                                            5,888,843    5,889  5,663,075    5,663
----------------------------------------------------------------------------------------------------------

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

ADDITIONAL PAID-IN-CAPITAL, COMMON
Balance at beginning of period                                                  38,961              35,988
Compensation related to vesting of certain Class B stock warrants                    -                   7
Issuance of shares upon the exercise of warrants                                     -                 383
Issuance of shares upon the conversion of debentures                                31                 181
----------------------------------------------------------------------------------------------------------
Balance at end of period                                                        38,992              36,559
----------------------------------------------------------------------------------------------------------

RETAINED EARNINGS
Balance at beginning of period                                                  44,862              33,409
Net earnings for the period                                                      3,248               2,735
----------------------------------------------------------------------------------------------------------
Balance at end of period                                                        48,110              36,144
----------------------------------------------------------------------------------------------------------

==========================================================================================================
TOTAL STOCKHOLDERS' EQUITY AT END OF PERIOD                         6,273,843  $93,376  6,048,075  $78,751
==========================================================================================================
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
                          INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
                           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                             (Unaudited)

                                                                                    QUARTER ENDED
                                                                                      MARCH 31,
                                                                                --------------------
($in thousands)                                                                   2005       2004
----------------------------------------------------------------------------------------------------
<S>                                                                             <C>        <C>
OPERATING ACTIVITIES
Net earnings                                                                    $  3,248   $  2,735
Adjustments to reconcile net earnings to net cash (used in) provided
  by operating activities:
Depreciation and amortization                                                        129        176
Provision for loan losses                                                          1,033      1,077
Deferred income tax benefit                                                         (452)      (487)
Amortization of deferred debenture offering costs                                    296        315
Compensation expense related to common stock warrants                                  -          7
Amortization of premiums (accretion) of discounts and deferred loan fees, net     (1,499)      (575)
Net decrease in accrued interest payable on debentures                            (1,032)    (1,607)
Net decrease in official checks outstanding                                       (5,483)    (4,222)
Net increase in loan fees receivable                                                (524)      (428)
Net change in all other assets and liabilities                                     3,718      3,673
----------------------------------------------------------------------------------------------------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                                 (566)       664
----------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Maturities and calls of securities held to maturity                               19,305     24,315
Purchases of securities held to maturity                                         (25,523)   (14,220)
Net increase in loans receivable                                                 (79,896)   (92,889)
Purchases of Federal Reserve Bank and Federal Home Loan Bank stock                     -       (180)
Purchases of premises and equipment, net                                            (103)       (89)
Investment in unconsolidated subsidiaries                                              -       (464)
----------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES                                            (86,217)   (83,527)
----------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Net increase in deposits                                                         129,785     61,637
Net increase in mortgage escrow funds payable                                      5,381      4,157
Net decrease in FHLB advances                                                    (21,000)         -
Principal repayments of debentures and mortgage note payable                      (2,603)    (9,003)
Gross proceeds from issuance of debentures                                             -     25,464
Debenture issuance costs                                                             (32)    (1,105)
Proceeds from issuance of common stock                                                 -      2,961
----------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                        111,531     84,111
----------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents                                         24,748      1,248
Cash and cash equivalents at beginning of period                                  24,599     64,128
====================================================================================================
Cash and cash equivalents at end of period                                      $ 49,347   $ 65,376
====================================================================================================

SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
  Interest                                                                      $ 12,606   $  9,434
  Income taxes                                                                       871      1,508
Noncash activities:
Conversion of debentures and accrued interest into Class A common stock               34        203
----------------------------------------------------------------------------------------------------
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>


                                        5
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

NOTE 1 - PRINCIPLES OF CONSOLIDATION, BASIS OF PRESENTATION AND USE OF ESTIMATES

The  condensed  consolidated  financial  statements  of  Intervest  Bancshares
Corporation  and  Subsidiaries  in  this report have not been audited except for
information  derived from the 2004 audited consolidated financial statements and
notes  thereto.  The  condensed consolidated financial statements in this report
should  be  read  in  conjunction  with  the 2004 audited consolidated financial
statements  and  notes  thereto  included in the Company's Annual Report on Form
10-K  for  the  year  ended  December  31,  2004.

The  financial  statements  include  the  accounts  of  Intervest  Bancshares
Corporation  (a  financial holding company referred to by itself as the "Holding
Company")  and its subsidiaries, Intervest National Bank (the "Bank"), Intervest
Mortgage  Corporation  and  Intervest  Securities  Corporation. The entities are
referred  to  collectively  as  the  "Company"  on  a  consolidated  basis.  All
significant  intercompany  balances  and  transactions  have  been eliminated in
consolidation.  Certain reclassifications have been made to prior period amounts
to  conform  to  the current period's presentation. The accounting and reporting
policies  of  the Company conform to accounting principles generally accepted in
the  United  States  of  America  and  to  general  practices within the banking
industry.

Intervest Statutory Trust I, II, III and IV are wholly owned subsidiaries of the
Holding  Company  that  are  unconsolidated  entities  as  required  by  FASB
Interpretation  No.  46-R,  "Consolidation  of  Variable  Interest  Entities."

Management  is  required  to  make  estimates  and  assumptions  that affect the
reported amounts of assets, liabilities and disclosure of contingent liabilities
as  of  the  date  of  the  consolidated  financial statements, and revenues and
expenses  during  the  reporting periods. Actual results could differ from those
estimates.  Estimates  that  are  particularly susceptible to significant change
relate  to the determination of the allowance for loan losses and the need for a
valuation  allowance  for  deferred  tax  assets.

In  the  opinion  of  management,  all material adjustments necessary for a fair
presentation  of  financial  condition and results of operations for the interim
periods  presented  in  this  report  have been made. These adjustments are of a
normal  recurring  nature. The results of operations for the interim periods are
not  necessarily  indicative of results that may be expected for the entire year
or  any  other  interim  period.

NOTE  2  -  DESCRIPTION  OF  BUSINESS

The  offices  of  the Holding Company, Intervest Mortgage Corporation, Intervest
Securities  Corporation  and  the  Bank's  headquarters and full-service banking
office  are  located  on the entire fourth floor of One Rockefeller Plaza in New
York  City,  New  York,  10020-2002.

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 also issues debt securities to raise funds for working capital purposes.
The  Company's  primary  business  segment  is  banking and real estate lending.

The  Bank  is  a nationally chartered, full-service commercial bank that has its
headquarters  and  full-service  banking office in Rockefeller Plaza in New York
City,  and  a  total  of  five  full-service banking offices in Pinellas County,
Florida  -  four  in  Clearwater  and one in South Pasadena. The Bank conducts a
personalized commercial and consumer banking business and attracts 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 real estate,
commercial  and  consumer  loans and to purchase investment securities. The Bank
emphasizes  multifamily  and  commercial  real  estate  lending.

Intervest  Mortgage  Corporation is a mortgage investment company engaged in the
real  estate  business,  including  the  origination and purchase of real estate
mortgage  loans,  consisting  of  first  mortgage  and  junior  mortgage  loans.
Intervest  Mortgage  Corporation  also provides loan origination services to the
Bank.  Intervest  Mortgage  Corporation  has  two  wholly  owned  subsidiaries,
Intervest  Distribution  Corporation and Intervest Realty Servicing Corporation,
which  provide  administrative  services  to  Intervest  Mortgage  Corporation.
Intervest  Mortgage  Corporation  issues  debentures  to provide funding for its
lending  business. Intervest Mortgage Corporation's mortgage loans are comprised
of  multifamily  and  commercial  real  estate  loans.


                                        6
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

NOTE  2  -  DESCRIPTION  OF  BUSINESS  -  CONTINUED

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

Intervest  Statutory  Trust  I,  II,  III  and  IV were formed in December 2001,
September 2003, March 2004 and September 2004, respectively. Each was formed for
the  sole  purpose  of  issuing and administering $15,000,000 of Trust Preferred
Securities  for  a  total of $60,000,000. The trusts do not conduct any trade or
business.

NOTE  3  -  LOANS  RECEIVABLE

Loans  receivable  is  summarized  as  follows:

<TABLE>
<CAPTION>
                                             At March 31, 2005     At December 31, 2004
                                          ----------------------  -----------------------
($in thousands)                           # of Loans    Amount     # of Loans    Amount
-----------------------------------------------------------------------------------------
<S>                                      <C>         <C>          <C>         <C>
Commercial real estate loans                    258  $  641,749          244  $  601,512
Residential multifamily loans                   248     424,837          249     403,613
Land development and other land loans            17      37,787           11      19,198
Residential 1-4 family loans                      4         983            4         984
Commercial business loans                        22       1,042           23       1,215
Consumer loans                                   12         241           12         221
-----------------------------------------------------------------------------------------
Loans receivable                                561   1,106,639          543   1,026,743
-----------------------------------------------------------------------------------------
Deferred loan fees                                      (11,478)                 (11,347)
-----------------------------------------------------------------------------------------
Loans receivable, net of deferred fees                1,095,161                1,015,396
-----------------------------------------------------------------------------------------
Allowance for loan losses                               (12,139)                 (11,106)
-----------------------------------------------------------------------------------------
Loans receivable, net                                $1,083,022               $1,004,290
-----------------------------------------------------------------------------------------
</TABLE>

At  March 31, 2005 and December 31, 2004, $4,607,000 of loans were on nonaccrual
status.  These loans were considered impaired under the criteria of SFAS No.114,
but no valuation allowance was maintained at any time since the Company believes
that  the  estimated  fair  value  of  the  underlying  properties  exceeded the
Company's  recorded  investment.  At March 31, 2005 and December 31, 2004, there
were  no  other  impaired loans or loans ninety days past due and still accruing
interest.  Interest income that was not recorded on nonaccrual loans under their
contractual  terms  amounted  to  $104,000 for the quarter ended March 31, 2005,
compared  to  $28,000  for  the  same  period  of  2004.  The average balance of
nonaccrual  loans  for  the quarter ended March 31, 2005 and 2004 was $4,607,000
and  $5,290,000,  respectively.  In  April  2005, the property collateralizing a
nonaccrual  loan  with a principal balance of $3,857,000 was sold at foreclosure
to  a  third party. The loan was paid in full and the Bank recovered all amounts
due  thereunder.

NOTE  4  -  ALLOWANCE  FOR  LOAN  LOSSES

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

<TABLE>
<CAPTION>
                                                       Quarter Ended March 31,
                                                      -------------------------
($in thousands)                                           2005          2004
-------------------------------------------------------------------------------
<S>                                                   <C>            <C>
Balance at beginning of period                        $      11,106  $    6,580
Provision charged to operations                               1,033       1,077
-------------------------------------------------------------------------------
Balance at end of period                              $      12,139  $    7,657
-------------------------------------------------------------------------------
</TABLE>

NOTE  5  -  DEPOSITS

Scheduled maturities of certificates of deposit accounts are as follows:

<TABLE>
<CAPTION>
                              At March 31, 2005     At December 31, 2004
                           ----------------------  ----------------------
                                       Wtd-Avg                 Wtd-Avg
($in thousands)             Amount   Stated Rate    Amount   Stated Rate
-------------------------------------------------------------------------
<S>                        <C>       <C>           <C>       <C>
Within one year            $311,192         2.98%  $269,553         2.84%
Over one to two years       120,298         3.67    119,780         3.43
Over two to three years     171,894         4.34    134,409         4.48
Over three to four years     98,335         4.10     75,317         4.06
Over four years             186,625         4.54    145,712         4.48
-------------------------------------------------------------------------
                           $888,344         3.79%  $744,771         3.68%
-------------------------------------------------------------------------
</TABLE>


                                        7
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

NOTE  5  -  DEPOSITS,  CONTINUED

Certificate  of  deposit  accounts  of $100,000 or more totaled $267,262,000 and
$215,876,000 at March 31, 2005 and December 31, 2004, respectively. At March 31,
2005,  certificate of deposit accounts of $100,000 or more by remaining maturity
were  as  follows:  due  within  one  year  $96,951,000;  over  one to two years
$27,070,000;  over  two  to  three  years  $51,584,000; over three to four years
$27,941,000;  and  over  four  years  $63,716,000.

NOTE  6  -  SUBORDINATED  DEBENTURES  AND  MORTGAGE  NOTE  PAYABLE

Subordinated  debentures  and  mortgage  note payable are summarized as follows:

<TABLE>
<CAPTION>
                                                                               At March 31,   At December 31,
($in thousands)                                                                    2005             2004
--------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>            <C>
INTERVEST MORTGAGE CORPORATION:
Series 05/10/96 - interest at 2% above prime (1) - due April 1, 2005           $      10,000  $        10,000
Series 10/15/96 - interest at 2% above prime (1) - due October 1, 2005                 5,500            5,500
Series 04/30/97 - interest at 1% above prime (1) - due October 1, 2005                 8,000            8,000
Series 11/10/98 - interest at 9% fixed           - due January 1, 2005                     -            2,600
Series 06/28/99 - interest at 9% fixed           - due July 1, 2006                    2,000            2,000
Series 09/18/00 - interest at 8 1/2% fixed       - due January 1, 2006                 1,250            1,250
Series 09/18/00 - interest at 9% fixed           - due January 1, 2008                 1,250            1,250
Series 08/01/01 - interest at 7 1/2% fixed       - due April 1, 2005                   1,750            1,750
Series 08/01/01 - interest at 8% fixed           - due April 1, 2007                   2,750            2,750
Series 08/01/01 - interest at 8 1/2% fixed       - due April 1, 2009                   2,750            2,750
Series 01/17/02 - interest at 7 1/4% fixed       - due October 1, 2005                 1,250            1,250
Series 01/17/02 - interest at 7 1/2% fixed       - due October 1, 2007                 2,250            2,250
Series 01/17/02 - interest at 7 3/4% fixed       - due October 1, 2009                 2,250            2,250
Series 08/05/02 - interest at 7 1/4% fixed       - due January 1, 2006                 1,750            1,750
Series 08/05/02 - interest at 7 1/2% fixed       - due January 1, 2008                 3,000            3,000
Series 08/05/02 - interest at 7 3/4% fixed       - due January 1, 2010                 3,000            3,000
Series 01/21/03 - interest at 6 3/4% fixed       - due July 1, 2006                    1,500            1,500
Series 01/21/03 - interest at 7 % fixed          - due July 1, 2008                    3,000            3,000
Series 01/21/03 - interest at 7 1/4% fixed       - due July 1, 2010                    3,000            3,000
Series 07/25/03 - interest at 6 1/2% fixed       - due October 1, 2006                 2,500            2,500
Series 07/25/03 - interest at 6 3/4% fixed       - due October 1, 2008                 3,000            3,000
Series 07/25/03 - interest at 7 % fixed          - due October 1, 2010                 3,000            3,000
Series 11/28/03 - interest at 6 1/4% fixed       - due April 1, 2007                   2,000            2,000
Series 11/28/03 - interest at 6 1/2% fixed       - due April 1, 2009                   3,500            3,500
Series 11/28/03 - interest at 6 3/4% fixed       - due April 1, 2011                   4,500            4,500
Series 06/07/04 - interest at 6 1/4% fixed       - due January 1, 2008                 2,500            2,500
Series 06/07/04 - interest at 6 1/2% fixed       - due January 1, 2010                 4,000            4,000
Series 06/07/04 - interest at 6 3/4% fixed       - due January 1, 2012                 5,000            5,000
                                                                               ------------------------------
                                                                                      86,250           88,850
INTERVEST BANCSHARES CORPORATION:
Series 05/14/98 - interest at 8% fixed           - due July 1, 2008                    3,060            3,080
Series 12/15/00 - interest at 8 1/2% fixed       - due April 1, 2006                   1,250            1,250
Series 12/15/00 - interest at 9% fixed           - due April 1, 2008                   1,250            1,250
                                                                               ------------------------------
                                                                                       5,560            5,580
INTERVEST NATIONAL BANK:
Mortgage note payable (2) - interest at 7% fixed - due February 1, 2017                  239              242
-------------------------------------------------------------------------------------------------------------
                                                                               $      92,049  $        94,672
-------------------------------------------------------------------------------------------------------------
<FN>
(1)  Prime represents prime rate of JPMorganChase Bank, which was 5.75% on March
31,  2005  and  5.25%  at December 31, 2004. The floating-rate debentures have a
maximum  interest  rate of 12%. (2) The note cannot be prepaid except during the
last  year  of  its  term.
</TABLE>


                                        8
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

NOTE  6  -  SUBORDINATED  DEBENTURES  AND  MORTGAGE  NOTE  PAYABLE,  CONTINUED

On  January 1, 2005, Intervest Mortgage Corporation's Series 11/10/98 debentures
matured  and  were repaid for a total of $4,459,000 ($2,600,000 of principal and
$1,859,000  of  accrued  interest).  On  April  1,  2005,  Intervest  Mortgage
Corporation's  Series 5/10/96 and 8/01/01 debentures matured and were repaid for
a  total  of  $14,052,000  ($11,750,000  of  principal and $2,302,000 of accrued
interest).

In  April  2005, Intervest Mortgage Corporation issued $14,000,000 of its Series
3/21/05  debentures  for  net  proceeds,  after offering costs, of approximately
$12,975,000.  The  terms  of  the debentures are as follows: $3,000,000 maturing
April  1,  2009 with an annual interest rate of 6.25%; $4,500,000 maturing April
1,  2011 with an annual interest rate of 6.50%; and $6,500,000 maturing April 1,
2013  with  an  annual  interest  rate  of  7.00%

Interest is paid quarterly on Intervest Mortgage Corporation's debentures except
for:  $1,980,000  of Series 5/10/96; all of Series 6/28/99, 9/18/00; $770,000 of
Series  8/01/01;  $270,000  of  Series  1/17/02;  $1,520,000  of Series 8/05/02;
$1,750,000  of  Series  11/28/03; $1,910,000 of Series 6/7/04; and $1,920,000 of
Series  3/21/05,  all of which accrue and compound interest quarterly, with such
interest  due  and  payable  at  maturity.

The  holders  of  Intervest  Mortgage  Corporation's Series 6/28/99, 9/18/00 and
Series  1/17/02  through  3/21/05  debentures  can  require  Intervest  Mortgage
Corporation  to  repurchase the debentures for face amount plus accrued interest
each  year  (beginning  October  1, 2005 for Series 1/17/02, January 1, 2006 for
Series  8/05/02,  July  1,  2006  for Series 1/21/03, October 1, 2006 for Series
7/25/03,  January 1, 2007 for Series 11/28/03, January 1, 2008 for Series 6/7/04
and  April  1,  2009  for  Series 3/21/05). However, in no calendar year can the
required  purchases  be more than $100,000 in principal amount of each maturity,
in  each  series  of  debentures,  on  a  non-cumulative  basis.

Intervest Mortgage Corporation's debentures may be redeemed at its option at any
time, in whole or in part, for face value, except for Series 6/7/04 and 3/21/05,
which  would be at a premium of 1% if it were redeemed prior to July 1, 2005 for
Series  6/7/04  and  prior  to  October  1,  2006  for  Series 03/21/05. All the
debentures  are  unsecured  and  subordinate  to  all  present and future senior
indebtedness,  as  defined  in  the  indenture  related  to  each  debenture.

The  Holding  Company's  Series  5/14/98 subordinated debentures are convertible
along  with  accrued interest  at the option of the holders at any time prior to
April  1,  2008  into  shares  of  its  Class  A  common  stock at the following
conversion  prices per share: $14.00 in 2005; $16.00 in 2006; $18.00 in 2007 and
$20.00  from  January 1, 2008 through April 1, 2008. The Holding Company has the
right  to  establish  conversion prices that are less than those set forth above
for  such  periods as it may determine. In the first quarter of 2005, $34,000 of
debentures ($20,000 of principal and $14,000 of accrued interest) were converted
into  shares  of  Class  A  common  stock  at  $14.00  per  share.

At March 31, 2005, interest accrues and compounds quarterly on $2,460,000 of the
convertible  debentures  at  the  rate  of  8%  per annum, while $600,000 of the
convertible  debentures  pay interest quarterly at the rate of 8% per annum. All
accrued  interest  of  $1,762,000  is  due  and  payable  at maturity whether by
acceleration,  redemption or otherwise. Any convertible debenture holder may, on
or  before  July  1  of  each year, elect to be paid all accrued interest and to
thereafter  receive  regular payments of interest quarterly. The Holding Company
may  redeem  any  of  its  debentures, in whole or in part, at any time for face
value.

Scheduled  contractual  maturities  as  of  March  31,  2005  are  as  follows:

<TABLE>
<CAPTION>
($in thousands)                               Principal   Accrued Interest
--------------------------------------------------------------------------
<S>                                           <C>         <C>
For the nine-months ended December 31, 2005   $   26,510  $          3,492
For the year ended December 31, 2006              10,264             1,952
For the year ended December 31, 2007               7,015               143
For the year ended December 31, 2008              17,076             2,492
For the year ended December 31, 2009               8,517               198
Thereafter                                        22,667               264
--------------------------------------------------------------------------
                                              $   92,049  $          8,541
--------------------------------------------------------------------------
</TABLE>


                                        9
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

NOTE  7  - FEDERAL FUNDS PURCHASED, FEDERAL HOME LOAN BANK ADVANCES AND LINES OF
CREDIT

From time to time, the Bank may borrow funds on an overnight or short-term basis
to  manage its liquidity needs. At  March 31, 2005, the Bank has agreements with
correspondent  banks whereby it may borrow up to $16,000,000 of federal funds on
an  unsecured  basis.  In addition, as a member of the Federal Home Loan Bank of
New  York  (FHLB)  and  the Federal Reserve Bank of New York (FRB), the Bank can
also  borrow  from  these  institutions on a secured basis up to an aggregate of
approximately  $230,000,000  based  on  available  collateral at March 31, 2005.

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

<TABLE>
<CAPTION>
                                                     Quarter Ended     Quarter Ended
($in thousands)                                      March 31, 2005    March 31, 2004
-------------------------------------------------------------------------------------
<S>                                                  <C>               <C>
Balance at period end (1)                            $        15,000   $           -
Maximum amount outstanding at any month end          $        17,000   $           -
Average outstanding balance for the period           $        13,911   $           -
Weighted-average interest rate paid for the period              2.62%              -%
Weighted-average interest rate at period end                    2.96%              -%
-------------------------------------------------------------------------------------
<FN>
(1) The balance at March 31, 2005 represents FHLB advances of $15,000,000 due in
April  2005.  The  amounts  were repaid. The balance at year-end 2004 represents
FHLB  advances  of  $19,000,000  due in January 2005 and $17,000,000 in February
2005.  The  amounts  were  repaid.
</TABLE>

NOTE  8  -  COMMON  STOCK  WARRANTS

The  Holding  Company has 696,465 common stock warrants outstanding that entitle
its  holder,  the  Chairman of the Board of the Holding Company, to purchase one
share  of common stock for each warrant. All warrants are currently exercisable.

Data  concerning  common  stock  warrants  is  as  follows:

<TABLE>
<CAPTION>
                                                        Exercise Price Per Warrant
                                                        --------------------------         Wtd-Avg
Class A Common Stock Warrants:                                               $6.67  Exercise Price
--------------------------------------------------------------------------------------------------
<S>                                                      <C>                        <C>
Outstanding at December 31, 2004 and March 31, 2005                        501,465           $6.67
----------------------------------------------------------------------------------
Remaining contractual life in years at March 31, 2005                          1.8
--------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                             Exercise Price Per Warrant
                                             --------------------------      Total         Wtd-Avg
Class B Common Stock Warrants:                           $6.67   $10.00   Warrants  Exercise Price
--------------------------------------------------------------------------------------------------
<S>                                                    <C>       <C>      <C>       <C>
Outstanding at December 31, 2004 and March 31, 2005    145,000   50,000   195,000            $7.52
---------------------------------------------------------------------------------
Remaining contractual life in years at March 31, 2005      2.8      2.8       2.8
--------------------------------------------------------------------------------------------------
</TABLE>

The  Company elects to use the intrinsic value-based method prescribed under APB
Opinion  No.  25,  "Accounting for Stock Issued to Employees," in accounting for
its  stock  warrants.  Under  this method, compensation expense related to stock
warrants  granted to employees is the excess, if any, of the market price of the
stock  as  of  the  grant  or  modification  date over the exercise price of the
warrant.  Compensation expense recorded in connection with common stock warrants
amounted  to  $7,000  for  the  quarter  ended March 31, 2004. There was no such
compensation  for  the  quarter  ended  March  31,  2005.

NOTE  9  -  EARNINGS  PER  SHARE  (EPS)

Basic  EPS is calculated by dividing net earnings the weighted-average number of
shares  of  common  stock  outstanding.  Diluted  EPS  is calculated by dividing
adjusted  net  earnings by the weighted-average number of shares of common stock
and  dilutive  potential  common  stock  shares  that  may be outstanding in the
future.

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


                                       10
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

NOTE  9  -  EARNINGS  PER  SHARE  (EPS),  CONTINUED

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

<TABLE>
<CAPTION>
                                                                              Quarter Ended
                                                                                March 31,
                                                                         ----------------------
($in thousands, except share and per share amounts)                         2005        2004
-----------------------------------------------------------------------------------------------
<S>                                                                      <C>         <C>
Basic earnings per share:
  Net earnings applicable to common stockholders                         $    3,248  $    2,735
  Average number of common shares outstanding                             6,273,843   6,042,847
-----------------------------------------------------------------------------------------------
Basic net earnings per share amount                                      $     0.52  $     0.45
-----------------------------------------------------------------------------------------------
Diluted earnings per share:
  Net earnings applicable to common stockholders                         $    3,248  $    2,735
  Adjustment to net earnings from assumed conversion of debentures (1)           55          82
                                                                         ----------------------
  Adjusted net earnings for diluted earnings per share computation       $    3,303  $    2,817
                                                                         ----------------------
Average number of common shares outstanding:
  Common shares outstanding                                               6,273,843   6,042,847
  Potential dilutive shares resulting from exercise of warrants (2)         255,207     253,362
  Potential dilutive shares resulting from conversion of debentures (3)     342,719     592,279
                                                                         ----------------------
Total average number of common shares outstanding used for dilution       6,871,769   6,888,488
-----------------------------------------------------------------------------------------------
Diluted net earnings per share amount                                    $     0.48  $     0.41
-----------------------------------------------------------------------------------------------
<FN>
(1)  Represents  interest  expense  on  dilutive  convertible debentures, net of
     taxes,  that  would  not  occur  if  they  were  assumed  converted.

(2)  All  outstanding  warrants  were  considered  for  the  EPS  computations.

(3)  Convertible  debentures  (principal  and  accrued  interest) outstanding at
     March  31,  2005 and 2004 totaling $4,798,000 and $7,069,000, respectively,
     were  convertible  into common stock at a price of $14.00 per share in 2005
     and  $12.00  per  share  in  2004  and resulted in additional common shares
     (based  on  average  balances  outstanding).
</TABLE>

NOTE  10  -  OFF-BALANCE  SHEET  FINANCIAL  INSTRUMENTS

The  Company  is a party to financial instruments with off-balance sheet risk in
the  normal  course  of  business  to meet the financing needs of its customers.
These  instruments are in the form of commitments to extend credit, unused lines
of  credit  and  standby letters of credit, and may involve, to varying degrees,
elements of credit and interest rate risk in excess of the amounts recognized in
the  consolidated financial statements. The Company's maximum exposure to credit
risk  is represented by the contractual amount of those instruments. The Company
uses  the  same  credit policies in making commitments as it does for on-balance
sheet  instruments. Commitments to extend credit are agreements to lend funds to
a  customer as long as there is no violation of any condition established in the
contract.  Such  commitments  generally  have  fixed  expiration  dates or other
termination  clauses  and  may  require  payment  of  fees.  Since  some  of the
commitments  are  expected  to  expire  without  being  drawn  upon,  the  total
commitment  amount  does not necessarily represent future cash requirements. The
Company evaluates each customer's credit worthiness on a case-by-case basis. The
amount  of collateral obtained, if deemed necessary upon extension of credit, is
based  on management's credit evaluation of the counterparty. Standby letters of
credit  are  conditional  commitments  issued  by  the  Company to guarantee the
performance  of a customer to a third party. The credit risk involved in issuing
letters of credit is essentially the same as that involved in extending loans to
customers.  Management  is not aware of any trends, known demand, commitments or
uncertainties  which  are expected to have a material impact on future operating
results,  liquidity  or  capital  resources.

The contractual amounts of the Company's off-balance sheet financial instruments
is  as  follows:

<TABLE>
<CAPTION>
                                       At March 31,   At December 31,
                                      -------------  ----------------
($in thousands)                                2005              2004
---------------------------------------------------------------------
<S>                                   <C>            <C>
Unfunded loan commitments             $     136,956  $        159,697
Available lines of credit                       937               789
Standby letters of credit                       750               750
---------------------------------------------------------------------
                                      $     138,643  $        161,236
---------------------------------------------------------------------
</TABLE>


                                       11
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

NOTE  11  -  REGULATORY  CAPITAL

The  Bank  and  the  Holding Company are required to maintain regulatory defined
minimum  Tier  1  leverage  and  Tier  1  and  total  risk-based capital ratios.
Management  believes  that  the  Bank and the Holding Company meet their capital
adequacy  requirements. Management believes that there are no current conditions
or  events  outstanding  which  would  change  the  Bank's  designation  as  a
well-capitalized  institution.

At  March  31, 2005, the actual capital of the Bank on a percentage basis was as
follows:

<TABLE>
<CAPTION>
                                                         Actual     Minimum    To Be Considered
                                                         Ratios   Requirement  Well Capitalized
                                                         -------  -----------  -----------------
<S>                                                      <C>      <C>          <C>
Total capital to risk-weighted assets                     11.23%      8.00%         10.00%
Tier 1 capital to risk-weighted assets                    10.13%      4.00%          6.00%
Tier 1 capital to total average assets - leverage ratio    8.66%      4.00%          5.00%
</TABLE>

At  March  31,  2005,  the  actual  capital  of  the Company (consolidated) on a
percentage  basis  was  as  follows:

<TABLE>
<CAPTION>
                                                         Actual     Minimum    To Be Considered
                                                         Ratios   Requirement  Well Capitalized
                                                         -------  -----------  ----------------
<S>                                                      <C>      <C>          <C>
Total capital to risk-weighted assets                     13.51%      8.00%           NA
Tier 1 capital to risk-weighted assets                    10.05%      4.00%           NA
Tier 1 capital to total average assets - leverage ratiO    8.67%      4.00%           NA
</TABLE>

The  Federal  Reserve  on  March  1,  2005 issued a final rule that allows trust
preferred  securities  to  continue to be included in the Tier 1 capital of bank
holding  companies  (BHC),  but  with  stricter  quantitative limits and clearer
qualitative  standards.  The  new  rule provides a transition period for BHCs to
meet  the  new,  stricter  limitations within regulatory capital by allowing the
limits on restricted core capital elements to become fully effective as of March
31,  2009.  For  a  further discussion of these regulatory implications, see the
section  entitled  "Recent  Accounting and Regulatory Developments" in note 1 to
consolidated  financial  statements  included  in the Company's Annual Report on
Form  10-K  for  the  year  ended  December  31,  2004.

Intervest  Securities  Corporation  is  subject to the SEC's Uniform Net Capital
Rule  [15c3-1  (a)  (2)  (vi)],  which  requires  the maintenance of minimum net
capital  of  $5,000.  At  March 31, 2005, Intervest Securities Corporation's net
capital  was  $479,000.

NOTE  12  -  RECENT  ACCOUNTING  PRONOUNCEMENTS

In  December  2004,  the  FASB  issued SFAS No. 123 (revised 2004), "Share-Based
Payment," SFAS No. 123-R). SFAS No. 123-R requires companies to recognize in the
income  statement  the  grant-date  fair  value  of  stock  options  and  other
equity-based  compensation  issued  to employees and directors, but expresses no
preference  for  a  type  of  valuation  model.  SFAS  No.  123-R eliminates the
intrinsic  value-based  method  that  the  Company  currently  uses.

On  April  14,  2005  the  U.S.  Securities  and Exchange Commission announced a
deferral  of  the  effective  date of SFAS No. 123-R for calendar year companies
until the beginning of 2006. The Company's financial statements will be prepared
in  accordance  with  this  new  standard if and when the Company issues any new
stock  warrants  and/or  options  to  employees  or directors in the future. The
amount  of  any  impact  cannot  be  determined  at  this  juncture.


                                       12
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES

             REVIEW BY INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     Hacker,  Johnson  & Smith, P.A., P.C., the Company's independent registered
public  accounting  firm,  has made a limited review of the financial data as of
March  31,  2005  and  for the three-month periods ended March 31, 2005 and 2004
presented  in this document, in accordance with the standards established by the
Public  Company  Accounting Oversight Board. As part of Hacker, Johnson & Smith,
P.A.,  P.C.'s  review,  Eisner,  LLP was relied upon for their limited review of
Intervest  Mortgage  Corporation,  a  wholly  owned  subsidiary  of the Company.

     The  reports  of  Hacker,  Johnson  &  Smith,  P.A.,  P.C.  and Eisner, LLP
furnished  pursuant  to  Article  10  of  Regulation  S-X  are  included herein.


                                       13
<PAGE>
             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

We  have  reviewed  the  accompanying  condensed  consolidated  balance sheet of
Intervest  Bancshares  Corporation  and Subsidiaries (the "Company") as of March
31,  2005 and the related condensed consolidated statements of earnings, changes
in  stockholders'  equity and cash flows for the three-month periods ended March
31,  2005 and 2004. These interim financial statements are the responsibility of
the  Company's  management.

We  were  furnished  the  reports  of  the  other  independent registered public
accounting  firm  on  their  reviews  of  the  interim  financial information of
Intervest  Mortgage  Corporation,  whose  total  assets  as  of  March  31, 2005
constituted  7.9%  of  the  related  consolidated  total, and whose net interest
income,  noninterest  income  and  net  earnings for the three-month period then
ended,  constituted  6.0%,  12.4%,  and  19.2%;  and  whose net interest income,
noninterest  income  and net earnings for the three-month period ended March 31,
2004,  constituted  5.0%,  20.5%,  and  18.8%,  respectively,  of  the  related
consolidated  totals.

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

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

We  have  previously  audited,  in  accordance  with the standards of the Public
Company  Accounting  Oversight  Board,  the  consolidated  balance  sheet of the
Company  as  of  December  31,  2004, 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 March
11,  2005,  we,  based  on  our  audit  and  the report of the other independent
registered  public  accounting  firm,  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, 2004 is
fairly stated, in all material respects, in relation to the consolidated balance
sheet  from  which  it  has  been  derived.


/s/ Hacker, Johnson & Smith, P.A., P.C.
---------------------------------------
HACKER, JOHNSON & SMITH, P.A.,P.C.
Tampa, Florida
April 29, 2005


                                       14
<PAGE>
             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



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

We  have reviewed the condensed consolidated balance sheet of Intervest Mortgage
Corporation  and  Subsidiaries  (the  "Company")  as  of  March 31, 2005 and the
related  condensed  consolidated  statements  of  operations,  changes  in
stockholders'  equity  and  cash flows for each of the three-month periods ended
March  31,  2005  and  2004  (all of which are not presented separately herein).
These  interim  financial  statements  are  the  responsibility of the Company's
management.

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

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

We  previously  audited,  in accordance with the standards of the Public Company
Accounting  Oversight  Board  (United States), the consolidated balance sheet of
the  Company  as of December 31, 2004 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 February 10, 2005, we
expressed  an unqualified opinion on those consolidated financial statements. In
our  opinion,  the  information  set forth in the condensed consolidated balance
sheet as of December 31, 2004 (not presented separately herein) is fairly stated
in  all  material  respects  in  relation to the consolidated balance sheet from
which  it  has  been  derived.



/s/ Eisner, LLP
---------------
EISNER,LLP
New York, New York
April 22, 2005


                                       15
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

                                     GENERAL
                                     -------

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

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

The  Company's  profitability  is  also affected by the level of its noninterest
income  and  expenses,  provision  for  loan  losses  and  income  tax  expense.
Noninterest  income  consists  mostly  of loan and other banking fees as well as
income  from loan prepayments. When a mortgage loan is repaid prior to maturity,
the  Company  may  recognize  prepayment  income,  which consists largely of the
recognition  of  unearned  fees associated with such loans at the time of payoff
and the receipt of additional prepayment fees and interest in certain cases. The
amount of income from loan prepayments can fluctuate significantly and cannot be
predicted.  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. Many of the Company's
mortgage  loans  include  provisions  relating to prepayment and others prohibit
prepayment  of  indebtedness  entirely.  Noninterest  expense  consists  of
compensation  and  benefits  expense,  occupancy  and  equipment  expenses, data
processing  expenses,  advertising expense, professional fees, insurance expense
and  other  operating  expenses.  The  Company's  profitability is significantly
affected  by  general  economic  and  competitive  conditions, changes in market
interest  rates,  government  policies  and  actions  of  regulatory authorities

The  Company's  loan  portfolio  has  historically  been  and  continues  to  be
concentrated in commercial real estate and multifamily mortgage loans (including
land  loans),  which represented nearly all of the Company's loan portfolio. The
properties  underlying the Company's mortgages are also concentrated in New York
State  and  the State of Florida. Many of the New York properties are located in
New York City and are subject to rent control and rent stabilization laws, which
limit  the  ability  of  the  property  owners  to  increase  rents.

All  loans  are  subject to the risk of default, otherwise known as credit risk,
which  represents the possibility of the Company not recovering amounts due from
its  borrowers.  A borrower's ability to make payments due under a mortgage loan
is  related  to  the  Company's underwriting standards and is dependent upon the
risks  associated with real estate investments in general, including: general or
local  economic conditions in the areas the properties are located, neighborhood
values,  interest  rates,  real  estate  tax  rates,  operating  expenses of the
mortgaged  properties,  supply  of  and  demand  for rental units, supply of and
demand  for properties, ability to obtain and maintain adequate occupancy of the
properties,  zoning  laws,  governmental rules, regulations and fiscal policies.
Additionally, terrorist acts, such as those that occurred on September 11, 2001,
armed  conflicts,  such  as the war on terrorism, and natural disasters, such as
hurricanes,  may  have  an  adverse  impact  on  economic  conditions.  Economic
conditions  affect  the market value of the underlying collateral as well as the
levels  of  occupancy  of  income-producing  properties.

    COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2005 AND DECEMBER 31, 2004
    -------------------------------------------------------------------------

OVERVIEW
--------

Total  assets at March 31, 2005 increased to $1,427,439,000, from $1,316,751,000
at  December  31,  2004.  Total  liabilities  at  March  31,  2005  increased to
$1,334,063,000,  from  $1,226,657,000  at  December  31, 2004, and stockholders'
equity  increased to $93,376,000 at March 31, 2005, from $90,094,000 at year-end
2004.  Book  value  per  common share increased to $14.88 per share at March 31,
2005,  from  $14.37  at  December  31,  2004.


                                       16
<PAGE>
Selected  balance  sheet  information  as  of  March  31,  2005  follows:

<TABLE>
<CAPTION>
                                                Holding     Intervest    Intervest    Intervest      Inter-
                                                Company      National     Mortgage    Securities     Company
($in thousands)                                                Bank         Corp.        Corp.     Amounts (1)    Combined
---------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>          <C>          <C>          <C>          <C>           <C>
Cash and cash equivalents                     $    5,657   $   28,804   $   26,500   $       468  $   (12,082)  $   49,347
Security investments                                   -      259,846            -             -            -      259,846
Loans receivable, net of deferred fees            13,975      992,770       88,416             -            -    1,095,161
Allowance for loan losses                            (85)     (11,722)        (332)            -            -      (12,139)
Investment in consolidated subsidiaries          138,067            -            -             -     (138,067)           -
All other assets                                   5,601       25,205        4,871            14         (467)      35,224
---------------------------------------------------------------------------------------------------------------------------
Total assets                                  $  163,215   $1,294,903   $  119,455   $       482  $  (150,616)  $1,427,439
---------------------------------------------------------------------------------------------------------------------------
Deposits                                      $        -   $1,135,770   $        -   $         -  $   (12,113)  $1,123,657
Borrowed funds and related interest payable       69,779       15,242       92,974             -            -      177,995
All other liabilities                                 60       30,456        2,328             3         (436)      32,411
---------------------------------------------------------------------------------------------------------------------------
Total liabilities                                 69,839    1,181,468       95,302             3      (12,549)   1,334,063
---------------------------------------------------------------------------------------------------------------------------
Stockholders' equity                              93,376      113,435       24,153           479     (138,067)      93,376
---------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity    $  163,215   $1,294,903   $  119,455   $       482  $  (150,616)  $1,427,439
---------------------------------------------------------------------------------------------------------------------------
<FN>
(1)  All  significant  intercompany  balances and transactions are eliminated in
     consolidation.  Such  amounts  arise  largely  from  intercompany  deposit
     accounts  and  investments.
</TABLE>

A  comparison  of  selected  balance  sheet information as of March 31, 2005 and
December  31,  2004  follows:

<TABLE>
<CAPTION>
                                                                     At March 31, 2005       At December 31, 2004
                                                                 ------------------------  --------------------------
                                                                  Carrying       % of        Carrying       % of
($in thousands)                                                    Value     Total Assets     Value     Total Assets
---------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>         <C>            <C>         <C>
Cash and cash equivalents                                        $   49,347          3.4%   $   24,599           1.9%
Security investments                                                259,846         18.2       253,980          19.3
Loans receivable, net of deferred fees and loan loss allowance    1,083,022         75.9     1,004,290          76.3
All other assets                                                     35,224          2.5        33,882           2.5
---------------------------------------------------------------------------------------------------------------------
Total assets                                                     $1,427,439        100.0%   $1,316,751         100.0%
---------------------------------------------------------------------------------------------------------------------
Deposits                                                         $1,123,657         78.7%   $  993,872          75.5%
Borrowed funds and related interest payable                         177,995         12.5       202,682          15.4
All other liabilities                                                32,411          2.3        30,103           2.2
---------------------------------------------------------------------------------------------------------------------
Total liabilities                                                 1,334,063         93.5     1,226,657          93.1
---------------------------------------------------------------------------------------------------------------------
Stockholders' equity                                                 93,376          6.5        90,094           6.9
---------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                       $1,427,439        100.0%   $1,316,751         100.0%
---------------------------------------------------------------------------------------------------------------------
</TABLE>

CASH  AND  CASH  EQUIVALENTS
----------------------------

Cash  and  cash  equivalents  increased  to  $49,347,000 at March 31, 2005, from
$24,599,000  at  December  31,  2004.  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. On April 1, 2005, $14,052,000 was used for the payment
of  principal  and  interest  due on Intervest Mortgage Corporation's debentures
that  matured  on  April  1,  2005  and $1,100,000 was used for normal quarterly
interest  payments due on Intervest Mortgage Corporation's remaining outstanding
debentures.

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

Securities  for which the Company has the intent and ability to hold to maturity
are  classified  as  held  to  maturity  and  carried  at  amortized  cost. Such
securities  increased  to  $254,754,000  at March 31, 2005, from $248,888,000 at
December  31,  2004.  The increase was due to new purchases exceeding maturities
and early calls during the period. The Company continues to invest in short-term
(up  to  5 years) U.S. government agency debt obligations to emphasize liquidity
and  to  target Intervest National Bank's loan-to-deposit ratio at approximately
80%. The investment portfolio at March 31, 2005 had a weighted-average remaining
maturity  of  1.3  years  and a weighted-average yield of 2.53%, compared to 1.4
years  and  2.33%,  respectively,  at  December 31, 2004.  At March 31, 2005 and
December  31  2004,  the  portfolio's  estimated fair value was $251,777,000 and
$247,211,000,  respectively.

The  Bank's  total  investment  in the Federal Reserve Bank and the Federal Home
Loan  Bank  of  New York stock was unchanged and amounted to $5,092,000 at March
31,  2005  and  December  31,  2004.


                                       17
<PAGE>
LOANS  RECEIVABLE,  NET  OF  DEFERRED  FEES  AND  ALLOWANCE  FOR  LOAN  LOSSES
------------------------------------------------------------------------------

Loans  receivable,  net  of  deferred  fees  and  the allowance for loan losses,
increased  to  $1,083,022,000  at March 31, 2005 from $1,004,290,000 at December
31,  2004.  The  growth  reflected  new  originations  of commercial real estate
mortgage  loans,  multifamily mortgage loans and land loans, partially offset by
principal  repayments.  New  loan originations totaled $151,447,000 in the first
quarter  of  2005  compared  to  $162,690,000  in  the  first  quarter  of 2004.

At  March  31,  2005  and  December  31,  2004,  $4,607,000  of  loans were on a
nonaccrual  status.  These  loans were considered impaired under the criteria of
SFAS  No.114,  but  no  valuation allowance was maintained at any time since the
Company  believes  that  the  estimated  fair value of the underlying properties
exceeded  the  Company's recorded investment. At March 31, 2005 and December 31,
2004, there were no other impaired loans or loans ninety days past due and still
accruing  interest. In April 2005, a nonaccrual loan with a principal balance of
$3,857,000  was  paid in full and the Bank recovered all amounts due thereunder.

At  March  31,  2005,  the  allowance  for  loan losses amounted to $12,139,000,
compared to $11,106,000 at December 31, 2004. The allowance represented 1.11% of
total  loans  (net  of deferred fees) outstanding at March 31, 2005 and 1.09% at
December  31,  2004.  The  increase  in  the  allowance  was  due  to provisions
aggregating  $1,033,000  during  the  period resulting largely from loan growth,
which amounted to $79,896,000 during the period. For a further discussion of all
the  criteria  the  Company uses to determine the adequacy of the allowance, see
pages  22  and 23 in the Company's Annual Report on Form 10-K for the year ended
December  31,  2004.

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

The following table sets forth the composition of the caption "All other assets"
in  the  table  on  page  17:

<TABLE>
<CAPTION>
                                             At March 31,   At December 31,
                                            -------------  ----------------
($in thousands)                                 2005             2004
---------------------------------------------------------------------------
<S>                                         <C>            <C>
Accrued interest receivable                 $       7,098  $          6,699
Loans fee receivable                                8,732             8,208
Premises and equipment, net                         6,610             6,636
Deferred income tax asset                           5,547             5,095
Deferred debenture offering costs, net              4,664             4,929
Investment in unconsolidated subsidiaries           1,856             1,856
All other                                             717               459
---------------------------------------------------------------------------
                                            $      35,224  $         33,882
---------------------------------------------------------------------------
</TABLE>

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 the growth in all of these assets.

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

Premises  and  equipment  remained  relatively  unchanged  as  net  additions of
$103,000 during the quarter were offset by normal depreciation and amortization.

The deferred income tax asset relates primarily to the unrealized tax benefit on
the  Company's  allowance  for  loan losses. The allowance has been expensed for
financial  statement  purposes but it is currently not deductible for income tax
purposes  until  actual  losses  are  incurred. The increase in the deferred tax
asset  is a function of the increase in the allowance for loan losses during the
period.

Deferred debenture offering costs consist primarily of underwriters' commissions
and  are  amortized  over  the  terms of the debentures. The decrease was due to
normal  amortization  during  the  period.

The  investment in unconsolidated subsidiaries consists of the Holding Company's
$464,000  common  stock  investment  in each of its unconsolidated subsidiaries,
Intervest  Statutory  Trust  I,  II,  II  and  IV.


                                       18
<PAGE>
DEPOSITS
--------

Deposits  increased  to  $1,123,657,000  at March 31, 2005, from $993,872,000 at
December  31, 2004. The increase reflected an increase in certificate of deposit
accounts  of  $143,573,000,  partially offset by a decrease in checking, savings
and  money  market  accounts  aggregating  $13,788,000.  At  March  31,  2005,
certificate  of  deposit accounts totaled $888,344,000 and checking, savings and
money  market  accounts  aggregated $235,313,000. The same categories of deposit
accounts  totaled  $744,771,000  and $249,101,000, respectively, at December 31,
2004. Certificate of deposit accounts represented 79% of total deposits at March
31,  2005  and  75%  at  December  31,  2004.

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

At  March  31,  2005,  borrowed  funds and related interest payable decreased to
$177,995,000,  from  $202,682,000  at  year-end  2004.  The  decrease  primarily
reflected  a  $21,000,000 reduction in short-term FHLBNY borrowings by Intervest
National  Bank  and the payment of principal and interest totaling $4,500,000 of
Intervest  Mortgage  Corporation's  debentures  that matured on January 1, 2005.

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

The  table  below  sets  forth  the  composition  of  the  caption  "All  other
liabilities"  in  the  table  on  page  17  as  follows:

<TABLE>
<CAPTION>
                                        At March 31,   At December 31,
                                       -------------  ----------------
($in thousands)                                 2005              2004
----------------------------------------------------------------------
<S>                                    <C>            <C>
Mortgage escrow funds payable          $      19,914  $         14,533
Official checks outstanding                    6,578            12,061
Accrued interest payable on deposits           2,131             1,718
All other                                      3,788             1,791
----------------------------------------------------------------------
                                       $      32,411  $         30,103
----------------------------------------------------------------------
</TABLE>

Mortgage  escrow  funds payable represent advance payments made by borrowers for
taxes  and  insurance that are remitted to third parties. The increase reflected
the  growth  in  the  loan  portfolio.  Official  checks  outstanding varies and
fluctuates  based  on  banking  activity.  Accrued  interest payable on deposits
fluctuates based on total deposits and timing of interest payments. The increase
reflected  the  growth  in  deposits.  All  other is comprised mainly of accrued
expenses,  income  taxes  payable  (which  fluctuates  based  on  the  Company's
earnings,  effective  tax  rate and timing of tax payments) and fees received on
loan  commitments that have not yet been funded. The increase reflected a higher
level  of  income  taxes  payable.

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

Stockholders' equity increased to $93,376,000 at March 31, 2005 from $90,094,000
at  year-end  2004  as  follows:

<TABLE>
<CAPTION>
($in thousands)                                                     Amount   Shares
--------------------------------------------------------------------------------------
<S>                                                                 <C>      <C>
Stockholders' equity at December 31, 2004                           $90,094  6,271,433
Net earnings for the period                                           3,248          -
Convertible debentures converted at election of debenture holders        34      2,410
--------------------------------------------------------------------------------------
Stockholders' equity at March 31, 2005                              $93,376  6,273,843
--------------------------------------------------------------------------------------
</TABLE>

                         ASSET AND LIABILITY MANAGEMENT
                         ------------------------------

Interest  rate  risk  arises  from  differences  in  the repricing of assets and
liabilities  within  a given time period. The Company does not engage in trading
or  hedging activities, nor does it invest in interest rate derivatives or enter
into interest rate swaps. The primary objective of the Company's asset/liability
management  strategy  is  to  limit,  within established guidelines, the adverse
impact  of changes in interest rates on its net interest income and capital. The
Company  uses  "gap  analysis,"  which  measures  the  difference  between
interest-earning  assets and interest-bearing liabilities that mature or reprice
within  a  given  time  period,  to monitor its interest rate sensitivity. For a
further  discussion  of "gap analysis" and the assumptions used in preparing the
gap analysis that follows, see pages 28 and 29 of the Company's Annual Report on
Form  10-K  for  the  year  ended  December  31,  2004.

The  Company's  one-year  positive  interest  rate  sensitivity  gap amounted to
$242,363,000,  or  17.0%  of  total  assets,  at  March  31,  2005,  compared to
$114,022,000,  or  8.7%  at  December 31, 2004. The increase in the positive gap
primarily  reflects  an increase in loans that reprice or mature within one year
funded  by  time  deposits  with  terms  of  more  than  1 year. For purposes of
computing the gap, all deposits with no stated maturities are treated as readily
accessible  accounts.  However,  if  such deposits were treated differently, the
one-year  gap  would  then  change.  The


                                       19
<PAGE>
behavior  of  core  depositors  may  not  necessarily  result  in  the immediate
withdrawal  of  funds  in  the  event  deposit rates offered by the Bank did not
change as quickly and uniformly as changes in general market rates. For example,
if  only  25%  of  deposits  with  no stated maturity were assumed to be readily
accessible, the one-year gap would have been a positive 28.9% at March 31, 2005,
compared  to  a  positive  22.5%  at  year-end  2004.

The  table  below  summarizes  interest-earning  assets  and  interest-bearing
liabilities as of March 31, 2005, that are scheduled to mature or reprice within
the  periods  shown.

<TABLE>
<CAPTION>
                                                0-3       4-12     Over 1-4     Over 4
                                            ---------  ---------  ----------  ---------
($in thousands)                              Months     Months        Years      Years      Total
----------------------------------------------------------------------------------------------------
<S>                                         <C>        <C>        <C>         <C>        <C>
Loans (1)                                   $331,027   $335,238   $ 291,007   $149,367   $1,106,639
Securities held to maturity (2)               39,620     94,147     119,876      1,111      254,754
Short-term investments                        27,473          -           -          -       27,473
FRB and FHLB stock                             2,628          -           -      2,464        5,092
----------------------------------------------------------------------------------------------------
Total rate-sensitive assets                 $400,748   $429,385   $ 410,883   $152,942   $1,393,958
----------------------------------------------------------------------------------------------------
Deposit accounts (3):
  Interest checking deposits                $ 10,963   $      -   $       -   $      -   $   10,963
  Savings deposits                            23,313          -           -          -       23,313
  Money market deposits                      193,118          -           -          -      193,118
  Certificates of deposit                     77,391    233,801     390,526    186,626      888,344
----------------------------------------------------------------------------------------------------
  Total deposits                             304,785    233,801     390,526    186,626    1,115,738
----------------------------------------------------------------------------------------------------
FHLB advances                                 15,000          -           -          -       15,000
Debentures and mortgage note payable (1)      25,250      4,250      62,238     62,167      153,905
Accrued interest on all borrowed funds (1)     4,034        650       3,944        462        9,090
----------------------------------------------------------------------------------------------------
Total borrowed funds                          44,284      4,900      66,182     62,629      177,995
----------------------------------------------------------------------------------------------------
Total rate-sensitive liabilities            $349,069   $238,701   $ 456,708   $249,255   $1,293,733
----------------------------------------------------------------------------------------------------
GAP (repricing differences)                 $ 51,679   $190,684   $ (45,825)  $(96,313)  $  100,225
----------------------------------------------------------------------------------------------------
Cumulative GAP                              $ 51,679   $242,363   $ 196,538   $100,225   $  100,225
----------------------------------------------------------------------------------------------------
Cumulative GAP to total assets                   3.6%      17.0%       13.8%       7.0%         7.0%
----------------------------------------------------------------------------------------------------
<FN>
Significant assumptions used in preparing the preceding gap table follow:

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

                                    LIQUIDITY
                                    ---------

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

As  a  member  of  the  FHLB  and  the  FRB, the Bank can also borrow from these
institutions on a secured basis up to an aggregate of approximately $230,000,000
based on available collateral at March 31, 2005. The Bank also has federal funds
line  of  credit agreements with correspondent banks whereby it can borrow on an
overnight,  unsecured  basis  of  up  to  $16,000,000  at  March  31,  2005.

OFF-BALANCE SHEET AND OTHER FINANCING ARRANGEMENTS

The Company is party to financial instruments with off-balance sheet risk in the
normal  course  of  business to meet the financing needs of its customers. For a
further  discussion of these financial instruments, see note 10 to the condensed
consolidated  financial  statements  in  this  report.


                                       20
<PAGE>
   COMPARISON OF RESULTS OF OPERATIONS FOR THE QUARTERS ENDED MARCH 31, 2005 AND
   -----------------------------------------------------------------------------
                                      2004
                                      ----
OVERVIEW
--------

Consolidated  net  earnings  for  the  first quarter of 2005 increased by 19% to
$3,248,000  or  $0.48  per  diluted  share, from $2,735,000 or $0.41 per diluted
share  reported  in  the  first  quarter of 2004. The 2005 first quarter results
represent  the  highest  quarterly  earnings  ever  reported by the Company. The
improvement  in  quarterly  earnings  was  due  to  the  continued growth in the
Company's  lending  activities.

The  increase in consolidated earnings of $513,000 was due a $1,907,000 increase
in  net interest and dividend income and a $44,000 decrease in the provision for
loan  losses,  partially  offset by a $578,000 decrease in noninterest income, a
$456,000  increase in noninterest expenses and a $404,000 increase in income tax
expense.

The  Company's  efficiency  ratio,  which is a measure of its ability to control
expenses  as  a percentage of its revenues, continues to be favorable at 26% for
the first quarter of 2005. The Company's return on average assets and equity was
0.94%  and  14.25%,  respectively,  in  the  2005 quarter, compared to 1.15% and
14.32%  in  the  2004  quarter.

Selected  information  regarding  results of operations for the first quarter of
2005  follows:

<TABLE>
<CAPTION>
                                             Intervest   Intervest    Intervest                  Inter-
                                             National     Mortgage    Securities    Holding     Company
($in thousands)                                Bank        Corp.        Corp.       Company   Amounts (2)   Combined
---------------------------------------------------------------------------------------------------------------------
<S>                                         <C>          <C>         <C>           <C>        <C>           <C>
Interest and dividend income                $   18,048   $    2,392  $         2   $    229   $      (103)  $  20,568
Interest expense                                 9,236        1,897            -      1,253          (103)     12,283
                                            -------------------------------------------------------------------------
Net interest and dividend income                 8,812          495            2     (1,024)            -       8,285
Provision for loan losses                        1,033            -            -          -             -       1,033
Noninterest income                                 769        1,402            -        113        (1,406)        878
Noninterest expenses                             2,920          732            6        122        (1,406)      2,374
                                            -------------------------------------------------------------------------
Earnings before taxes                            5,628        1,165           (4)    (1,033)            -       5,756
Provision for income taxes                       2,447          540           (2)      (477)            -       2,508
---------------------------------------------------------------------------------------------------------------------
Net earnings                                $    3,181   $      625  $        (2)  $   (556)  $         -   $   3,248
---------------------------------------------------------------------------------------------------------------------
Intercompany dividends (1)                      (1,089)           -            -      1,089             -           -
---------------------------------------------------------------------------------------------------------------------
Net earnings after intercompany dividends   $    2,092   $      625  $        (2)  $    533   $         -   $   3,248
---------------------------------------------------------------------------------------------------------------------
Net earnings after intercompany dividends
  for the same period of 2004               $    1,907   $      513  $        10   $    305   $         -   $   2,735
---------------------------------------------------------------------------------------------------------------------
<FN>
(1)  Dividends  to  the Holding Company from the Bank provide funds for the debt
     service  on  the  subordinated  debentures-capital  securities,  which  is
     included  in  the  Holding  Company's  interest  expense.

(2)  All  significant  intercompany  balances and transactions are eliminated in
     consolidation.  Such  amounts  arise from intercompany deposit accounts and
     management  and  service  agreements.
</TABLE>

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

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

Net interest and dividend income increased to $8,285,000 in the first quarter of
2005,  from  $6,378,000  in  the  first  quarter  of  2004.  The improvement was
attributable  to  a  $430,517,000  increase  in  average interest-earning assets
resulting  from  continued growth in loans of $346,077,000 and a higher level of
security  and  short-term  investments  aggregating  $84,440,000.  The growth in
average  assets  was  funded  by  $379,177,000  of  additional  interest-bearing
deposits, $28,316,000 of additional borrowed funds and a $14,736,000 increase in
stockholders'  equity  (resulting  from earnings and issuance of shares upon the
exercise  of  common  stock  warrants and conversion of convertible debentures).

The  Company's  net  interest  margin decreased to 2.47% in the first quarter of
2005,  from  2.75%  in  the first quarter of 2004. The lower margin was due to a
decrease in the Company's yield on interest-earning assets and a slight increase
in  its  cost  of  funds.

The  yield  on interest-earning assets decreased 18 basis points to 6.12% in the
2005  quarter due to lower rates on new mortgage loans originated and the effect
of  loan  prepayments  during  2004,  partially  offset  by  higher  yields


                                       21
<PAGE>
earned on security and other short-term investments. The cost of funds increased
by  7  basis  points  to  3.98%  in the 2005 quarter due to higher rates paid on
deposit  accounts,  largely  offset  by a decrease in the cost of borrowed funds
resulting  primarily  from  the  addition  of  debentures  with lower rates than
existing  ones.

Interest  income  that  was  not  recorded  on  nonaccrual  loans  under  their
contractual  terms  amounted  to  $104,000 for the quarter ended March 31, 2005,
compared  to  $28,000  for  the  same  period  of  2004.  The average balance of
nonaccrual  loans  for  the quarter ended March 31, 2005 and 2004 was $4,607,000
and  $5,290,000,  respectively.

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

<TABLE>
<CAPTION>
                                                   ------------------------------------------------------------------
                                                                             Quarter Ended
                                                   ------------------------------------------------------------------
                                                              March 31, 2005                   March 31, 2004
                                                   ---------------------------------  -------------------------------
                                                     Average     Interest    Yield/    Average    Interest    Yield/
($in thousands)                                      Balance    Inc./Exp.   Rate (2)   Balance   Inc./Exp.   Rate (2)
---------------------------------------------------------------------------------------------------------------------
<S>                                                <C>          <C>         <C>       <C>        <C>         <C>
ASSETS
Interest-earning assets:
  Loans (1)                                        $1,071,862   $   18,811     7.12%  $725,785   $   13,792     7.64%
  Securities                                          258,037        1,563     2.46    165,475          705     1.71
  Other interest-earning assets                        32,433          194     2.43     40,555           96     0.95
---------------------------------------------------------------------------------------------------------------------
Total interest-earning assets                       1,362,332   $   20,568     6.12%   931,815   $   14,593     6.30%
---------------------------------------------------------------------------------------------------------------------
Noninterest-earning assets                             15,153                           16,436
---------------------------------------------------------------------------------------------------------------------
Total assets                                       $1,377,485                         $948,251
---------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
  Interest checking deposits                       $   13,441   $       52     1.57%  $ 10,366   $       40     1.55%
  Savings deposits                                     25,268          113     1.81     30,993          137     1.78
  Money market deposits                               194,375        1,059     2.21    167,766          742     1.78
  Certificates of deposit                             844,031        7,815     3.76    488,813        4,393     3.61
---------------------------------------------------------------------------------------------------------------------
Total deposit accounts                              1,077,115        9,039     3.40    697,938        5,312     3.06
---------------------------------------------------------------------------------------------------------------------
  Fed funds purchased and FHLB Advances                13,911           90     2.62          -            -        -
  Debentures and related interest payable              99,197        2,060     8.42    113,159        2,233     7.94
  Debentures - capital securities                      61,856        1,090     7.15     33,477          666     8.00
  Mortgage note payable                                   241            4     7.00        253            4     7.04
---------------------------------------------------------------------------------------------------------------------
Total borrowed funds                                  175,205        3,244     7.51    146,889        2,903     7.95
---------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities                  1,252,320   $   12,283     3.98%   844,827   $    8,215     3.91%
---------------------------------------------------------------------------------------------------------------------
Noninterest-bearing deposits                            6,186                            6,179
Noninterest-bearing liabilities                        27,820                           20,822
Stockholders' equity                                   91,159                           76,423
---------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity         $1,377,485                         $948,251
---------------------------------------------------------------------------------------------------------------------
Net interest and dividend income/spread                         $    8,285     2.14%             $    6,378     2.39%
---------------------------------------------------------------------------------------------------------------------
Net interest-earning assets/margin                 $  110,012                  2.47%  $ 86,988                  2.75%
---------------------------------------------------------------------------------------------------------------------
Ratio of total interest-earning assets
  to total interest-bearing liabilities                  1.09                             1.10
---------------------------------------------------------------------------------------------------------------------
OTHER RATIOS:
  Return on average assets (2)                           0.94%                            1.15%
  Return on average equity  (2)                         14.25%                           14.32%
  Noninterest expense to average assets (2)              0.69%                            0.81%
  Efficiency ratio (3)                                     26%                              24%
  Average stockholders' equity to average assets         6.62%                            8.06%
---------------------------------------------------------------------------------------------------------------------
<FN>
(1)  Includes  nonaccrual  loans.
(2)  Annualized.
(3)  Defined  as  noninterest expenses (excluding the provision for loan losses)
     as  a  percentage  of  net  interest  and  dividend income plus noninterest
     income.
</TABLE>

                                       22
<PAGE>
PROVISION  FOR  LOAN  LOSSES
----------------------------

The  provision  for  loan losses decreased by $44,000 to $1,033,000 in the first
quarter  of  2005,  from  $1,077,000  in  the  first  quarter of 2004. The lower
provision  was  a  function  of  a  decrease in the amount of loan growth, which
amounted  to  $79,896,000  in  the  2005  quarter versus $92,889,000 in the 2004
quarter.

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

Noninterest  income  decreased  by  $578,000 to $878,000 in the first quarter of
2005,  from  $1,456,000  in  the  first  quarter  of  2004. The lower income was
primarily  due  to a $502,000 decrease in income from the prepayment of mortgage
loans.  Income  from  the  prepayment  of mortgage loans consists largely of the
recognition  of  unearned  fees associated with such loans at the time of payoff
and  the  receipt  of  prepayment  penalties  and interest in certain cases. The
Company's  income  from  loan  prepayments,  which  fluctuates  and  cannot  be
predicted,  tends  to  increase  during  periods of declining interest rates and
tends  to  decrease  during  periods  of  increasing  interest  rates.

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

Noninterest expenses increased by $456,000 to $2,374,000 in the first quarter of
2005,  from  $1,918,000 in the first quarter of 2004. The increase was primarily
due  to  increases  in  the  following:  salary and employee benefits expense of
$324,000;  professional fees expense of $36,000; advertising expense of $34,000;
and  director  and  committee  fees  expense  of  $34,000.

Salaries  and employee benefits expense increased primarily due to $210,000 from
salary increases, a higher cost of employee benefits and additional staff, and a
$136,000  increase in bonus payments to certain executives of the Company. These
items  were  partially  offset  by a $28,000 decrease in commission expense. The
Company had 67 fulltime employees at March 31, 2005 versus 62 at March 31, 2004.

Professional  fees expense increased $18,000 due to the growth in assets as well
as  additional  accruals  of $18,000  for consulting expense associated with the
ongoing  compliance  efforts  associated  with  the  Sarbanes-Oxley Act of 2002.

Advertising  expense  increased  due  to  additional advertising to support loan
growth.

Director  and  committee fees increased due to higher fees paid to directors for
each  board  and  committee meeting attended. The fees were increased in October
2004.

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

The  provision for income taxes increased by $404,000 to $2,508,000 in the first
quarter  of  2005,  from  $2,104,000  in  the  first  quarter of 2004, due to an
increase  in  pre-tax  income.  The  Company's  effective tax rate (inclusive of
state  and  local taxes) amounted to 43.6% in the 2005 period, compared to 43.5%
in  the  2004  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  has  not  engaged in and accordingly has no risk
related  to trading accounts, commodities, foreign exchange, hedging activities,
interest  rate  derivatives  or  interest  rate swaps. The Company's market risk
arises  primarily  from  interest  rate  risk  inherent  in  its  lending  and
deposit-taking  activities,  and the issuance of its debentures. The measurement
of market risk associated with financial instruments is meaningful only when all
related and offsetting on-and off-balance sheet transactions are aggregated, and
the  resulting net positions are identified. Disclosures about the fair value of
financial  instruments  as of December 31, 2004, which reflect changes in market
prices  and  rates,  can  be  found  in  note  20  to the consolidated financial
statements  included  in  the  Company's Annual Report on Form 10-K for the year
ended December 31, 2004. Management believes that there have been no significant
changes  in  the  Company's  market  risk  exposure  since  December  31,  2004.

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


                                       23
<PAGE>
ITEM 4.  CONTROLS AND PROCEDURES

The  Company's  management  evaluated,  with  the participation of its Principal
Executive  and Financial Officers, the effectiveness of the Company's disclosure
controls  and  procedures  (as  defined in Rule 13a-15(e) or 15d-15(e) under the
Securities  Exchange  Act  of  1934) as of the end of the period covered by this
report. Based on such evaluation, the Principal Executive and Financial Officers
have  concluded  that  the  Company's  disclosure  controls  and  procedures are
designed  to ensure that information required to be disclosed in the reports the
Company  files  or  furnishes  under  the  Securities  Exchange  Act  of 1934 is
recorded,  processed,  summarized and reported within the time periods specified
in  the  SEC's  rules and regulations, and are operating in an effective manner.
The  Company  made no significant changes in its internal control over financial
reporting  or  in  other  factors that could significantly affect these controls
subsequent  to  March  31,  2005.

PART II. OTHER INFORMATION

ITEM 1.  LEGAL  PROCEEDINGS

        Not  Applicable

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

(a)     Not  Applicable
(b)     Not  Applicable
(c)     Not  Applicable

ITEM 3.  DEFAULTS  UPON  SENIOR  SECURITIES

(a)     Not  Applicable
(b)     Not  Applicable

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

(a)     Not  Applicable
(b)     Not  Applicable
(c)     Not  Applicable
(d)     Not  Applicable

ITEM 5.  OTHER  INFORMATION

(a)     Not  Applicable
(b)     Not  Applicable

ITEM 6.  EXHIBITS

     The following exhibits are filed as part of this report.

4.0  Form  of  Indenture  between  the  Company's subsidiary, Intervest Mortgage
     Corporation,  and  The  Bank  of  New  York  dated  as  of  April  1, 2005,
     incorporated  by  reference  to  Intervest Mortgage Corporation's quarterly
     report  on  Form  10-Q  filed for the quarter ended March 31, 2005, wherein
     such  document  is  identified  as  Exhibit  4.0.

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

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

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


                                       24
<PAGE>
                                   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



Date: May 2, 2005                     By: /s/ Jerome Dansker
                                      ---------------------------------
                                      Jerome Dansker, Chairman and
                                      Executive Vice President
                                      (Principal  Executive  Officer)




Date: May 2, 2005                     By: /s/ Lowell S. Dansker
                                      ---------------------------------
                                      Lowell S. Dansker, Vice Chairman,
                                      President and Treasurer
                                      (Principal Financial Officer)


                                       25
<PAGE>