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, 2000

                          Commission File No. 000-23377

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


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


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

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



Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 12, 13 or 15(d) of the  Securities  Exchange Act
of 1934  during  the  past 12  months  (or for  such  shorter  period  that  the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days:

YES  XX   NO
     ---     ----

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

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

Class A Common Stock, $1.00 par
 value per share                         3,535,629 Outstanding at April 30, 2000
--------------------------------         ---------------------------------------

Class B Common Stock, $1.00 par
 value per share                         355,000 Outstanding at April 30, 2000
--------------------------------         ---------------------------------------

<PAGE>


                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES

                                    FORM 10-Q

                                 March 31, 2000

                                TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION                                               Page
                                                                            ----

   Item 1.      Financial Statements

       Condensed Consolidated Balance Sheets
          as of March 31, 2000 (Unaudited) and December 31, 1999 ............ 2

       Condensed Consolidated Statements of Earnings (Unaudited)
          for the Quarters Ended March 31, 2000 and 1999 .................... 3

       Condensed Consolidated Statements of Changes in Stockholders'
          Equity (Unaudited)for the Quarters Ended March 31, 2000 and 1999... 4

       Condensed Consolidated Statements of Cash Flows (Unaudited)
          for the Quarters Ended March 31, 2000 and 1999..................... 5

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

       Review by Independent Certified Public Accountants ................... 13

       Report on Review by Independent Certified Public Accountants ......... 14

   Item 2.      Management's Discussion and Analysis of Financial Condition
                  and Results of Operations ................................. 15

   Item 3.      Quantitative and Qualitative Disclosures about Market Risk... 22


PART II. OTHER INFORMATION

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

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

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

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

              Item 5.  Other Information..................................... 23

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

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

                                       1
<PAGE>
<TABLE>

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

                Intervest Bancshares Corporation and Subsidiaries
                      Condensed Consolidated Balance Sheets

                                                                                          (Unaudited)
                                                                                            March 31,        December 31,
      ($ in thousands, except par value)                                                      2000              1999
      --------------------------------------------------------------------------------- ---------------- ------------------
      ASSETS
<S>                                                                                             <C>                <C>
      Cash and due from banks                                                                   $ 3,396            $ 4,663
      Federal funds sold                                                                         13,703              3,900
      Short-term investments                                                                     12,565             23,532
                                                                                        ---------------- ------------------
          Total cash and cash equivalents                                                        29,664             32,095
      Securities held to maturity, net
          (estimated fair value of $79,964 and $79,882, respectively)                            83,183             83,132
      Federal Reserve Bank stock, at cost                                                           508                508
      Loans receivable  (net of allowance for loan loss reserves of
           $2,648 and $2,493, respectively)                                                     239,039            210,444
      Accrued interest receivable                                                                 3,130              2,834
      Premises and equipment, net                                                                 5,814              5,863
      Deferred income tax asset                                                                     950                936
      Deferred debenture offering costs                                                           3,491              3,721
      Other assets                                                                                1,340                948
      --------------------------------------------------------------------------------- ---------------- ------------------
      Total assets                                                                             $367,119           $340,481
      --------------------------------------------------------------------------------- ---------------- ------------------

      LIABILITIES
      Deposits:
         Noninterest-bearing demand deposit accounts                                            $ 5,330            $ 4,337
         Interest-bearing deposit accounts:
            Checking (NOW) accounts                                                               7,375              6,636
            Savings accounts                                                                     17,232             18,722
            Money-market accounts                                                                55,331             48,591
            Certificate of deposit accounts                                                     154,102            122,794
                                                                                        ---------------- ------------------
      Total deposits                                                                            239,370            201,080
      Federal funds purchased                                                                         -              6,955
      Subordinated debentures payable                                                            77,330             84,330
      Accrued interest payable on debentures                                                      7,426              8,092
      Mortgage escrow funds payable                                                               4,790              3,375
      Official checks outstanding                                                                 2,382              1,821
      Other liabilities                                                                           1,636              1,224
      --------------------------------------------------------------------------------- ---------------- ------------------
      Total liabilities                                                                         332,934            306,877
      --------------------------------------------------------------------------------- ---------------- ------------------

      STOCKHOLDERS' EQUITY
      Preferred stock (300,000 shares authorized, none issued)                                        -                  -
      Class A common stock ($1.00 par value, 9,500,000 shares authorized,
        3,535,629 and 3,531,879 shres issued and outstanding, respectively)                       3,536              3,532
      Class B common stock ($1.00 par value, 700,000 shares authorized,
        355,000 and 305,000 shares issued and outstanding, respectively)                            355                305
      Additional paid-in-capital, common                                                         18,907             18,770
      Retained earnings                                                                          11,387             10,997
      --------------------------------------------------------------------------------- ---------------- ------------------
      Total stockholders' equity                                                                 34,185             33,604
      --------------------------------------------------------------------------------- ---------------- ------------------
      Total liabilities and stockholders' equity                                               $367,119           $340,481
      --------------------------------------------------------------------------------- ---------------- ------------------
         See accompanying notes to condensed consolidated financial statements.
</TABLE>

                                       2
<PAGE>
<TABLE>

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

                                                                                                              For the
                                                                                                          Quarter Ended
                                                                                                            March 31,
                                                                                                    ------------- -------------
($ in thousands, except per share data)                                                                  2000          1999
------------------------------------------------------------------------------------ ----- -------- ------------- -------------

<S>                                                                                                       <C>           <C>
INTEREST AND DIVIDEND INCOME
Loans receivable                                                                                          $5,646        $4,481
Securities                                                                                                 1,520         1,518
Other interest-earning assets                                                                                 90           130
------------------------------------------------------------------------------------ ----- -------- ------------- -------------
Total interest and dividend income                                                                         7,256         6,129
------------------------------------------------------------------------------------ ----- -------- ------------- -------------

INTEREST EXPENSE

Deposits                                                                                                   2,844         2,015
Federal funds purchased                                                                                      146             -
Subordinated debentures                                                                                    2,422         2,425
------------------------------------------------------------------------------------ ----- -------- ------------- -------------
Total interest expense                                                                                     5,412         4,440
------------------------------------------------------------------------------------ ----- -------- ------------- -------------

Net interest and dividend income                                                                           1,844         1,689
Provision for loan loss reserves                                                                             155           112
------------------------------------------------------------------------------------ ----- -------- ------------- -------------
Net interest and dividend income after provision for loan loss reserves                                    1,689         1,577
------------------------------------------------------------------------------------ ----- -------- ------------- -------------

NONINTEREST INCOME

Customer service fees                                                                                         35            32
Income from mortgage lending activities                                                                      127           381
All other                                                                                                      -             1
------------------------------------------------------------------------------------ ----- -------- ------------- -------------
Total noninterest income                                                                                     162           414
------------------------------------------------------------------------------------ ----- -------- ------------- -------------

NONINTEREST EXPENSES

Salaries and employee benefits                                                                               676           479
Occupancy and equipment, net                                                                                 271           151
Advertising and promotion                                                                                     13            37
Professional fees and services                                                                               104            56
Stationery, printing and supplies                                                                             38            42
All other                                                                                                    149           136
------------------------------------------------------------------------------------ ----- -------- ------------- -------------
Total noninterest expenses                                                                                 1,251           901
------------------------------------------------------------------------------------ ----- -------- ------------- -------------

Earnings before income taxes and change in accounting principle                                              600         1,090
Provision for income taxes                                                                                   210           468
Cumulative effect of change in accounting principle (note 7)                                                   -          (128)
------------------------------------------------------------------------------------ ----- -------- ------------- -------------
Net earnings                                                                                               $ 390          $494
------------------------------------------------------------------------------------ ----- -------- ------------- -------------

Basic earnings per share:

   Earnings before change in accounting principle                                                          $0.10        $ 0.16
   Cumulative effect of change in accounting principle                                                         -         (0.03)
------------------------------------------------------------------------------------ ----- -------- ------------- -------------
   Net earnings per share                                                                                  $0.10        $ 0.13
------------------------------------------------------------------------------------ ----- -------- ------------- -------------

Diluted earnings per share:

   Earnings before change in accounting principle                                                          $0.10         $0.15
   Cumulative effect of change in accounting principle                                                         -         (0.03)
------------------------------------------------------------------------------------ ----- -------- ------------- -------------
   Net earnings per share                                                                                  $0.10         $0.12
------------------------------------------------------------------------------------ ----- -------- ------------- -------------
See accompanying notes to condensed consolidated financial statements.
</TABLE>

                                       3
<PAGE>
<TABLE>

                Intervest Bancshares Corporation and Subsidiaries

      Condensed Consolidated Statements of Changes in Stockholders' Equity

                                   (Unaudited)

                                                                                             For the Quarter Ended
                                                                                                   March 31,
                                                                                          -----------------------------
($ in thousands)                                                                                2000         1999
----------------------------------------------------------------------------------------- -------------- --------------
<S>                                                                                             <C>            <C>
CLASS A COMMON STOCK
Balance at beginning of period                                                                  $ 3,532        $ 3,434
Issuance of 510 shares in exchange for common stock of minority
  stockholders of Intervest Bank                                                                      -              1
Issuance of 1,063 shares upon the conversion of debentures                                            -              1
Issuance of 3,750 shares upon exercise of warrants                                                    4              -
----------------------------------------------------------------------------------------- -------------- --------------
Balance at end of period                                                                          3,536          3,436
----------------------------------------------------------------------------------------- -------------- --------------

CLASS B COMMON STOCK

Balance at beginning of period                                                                      305            300
Issuance of 5,000 shares upon the exercise of warrants                                                -              5
Issuance of 50,000 shares of restricted stock compensation (note 2)                                  50              -
----------------------------------------------------------------------------------------- -------------- --------------
Balance at end of period                                                                            355            305
----------------------------------------------------------------------------------------- -------------- --------------

ADDITIONAL PAID-IN-CAPITAL, COMMON

Balance at beginning of period                                                                   18,770         18,148
Issuance of 510 shares in exchange for common stock of minority
  stockholders of Intervest Bank                                                                      -              6
Issuance of 1,063 shares upon the conversion of debentures, net of
  issuance costs                                                                                      -              2
Compensation related to issuance of Class B common stock warrants                                     6              6
Issuance of 5,000 shares upon exercise of Class B stock warrants                                      -             28
Issuance of 50,000 shares of restricted Class B stock (note 2)                                      109              -
Issuance of 3,750 shares upon exercise of Class A stock warrants                                     22              -
----------------------------------------------------------------------------------------- -------------- --------------
Balance at end of period                                                                         18,907         18,190
----------------------------------------------------------------------------------------- -------------- --------------

RETAINED EARNINGS

Balance at beginning of period                                                                   10,997          9,230
Comprehensive income - net earnings for the period                                                  390            494
----------------------------------------------------------------------------------------- -------------- --------------
Balance at end of period                                                                         11,387          9,724
----------------------------------------------------------------------------------------- -------------- --------------

----------------------------------------------------------------------------------------- -------------- --------------
Total stockholders' equity at end of period                                                     $34,185        $31,655
----------------------------------------------------------------------------------------- -------------- --------------
     See accompanying notes to condensed consolidated financial statements.
</TABLE>

                                       4
<PAGE>
<TABLE>


                Intervest Bancshares Corporation and Subsidiaries

                 Condensed Consolidated Statements of Cash Flows

                                   (Unaudited)

                                                                                           For the Quarter Ended
                                                                                                  March 31,
                                                                                     ---------------- -----------------
   ($ in thousands)                                                                             2000          1999
   --------------------------------------------------------------------------------- ---------------- -----------------
   <S>                                                                                         <C>               <C>
   OPERATING ACTIVITIES
   Net earnings                                                                                $ 390             $ 494
   Adjustments to reconcile net earnings to net cash provided by
       operating activities
     Depreciation and amortization                                                               115                79
     Provision for loan loss reserves                                                            155               112
     Deferred income tax benefit                                                                 (14)              (91)
     Amortization of deferred debenture offering costs                                           230               227
     Compensation expense from awards of common stock and warrants                               165                 6
     Amortization of premiums, fees and discounts, net                                          (262)             (211)
     (Decrease) increase in accrued interest on debentures                                      (666)              306
     Increase (decrease) in official checks outstanding                                          561               (40)
     Change in all other assets and liabilities, net                                              (6)               (1)
   --------------------------------------------------------------------------------- ---------------- -----------------
   Net cash provided by operating activities                                                     668               881
   --------------------------------------------------------------------------------- ---------------- -----------------
   INVESTING ACTIVITIES
   Decrease in interest-earning time deposits with banks                                           -                99
   Maturities and calls of securities held to maturity                                         4,015            16,525
   Purchases of securities held to maturity                                                   (3,972)          (19,500)
   (Originations) repayments of loans receivable, net                                        (28,852)            3,142
   Purchases of premises and equipment, net                                                      (66)             (235)
   --------------------------------------------------------------------------------- ---------------- -----------------
   Net cash (used) provided by investing activities                                          (28,875)               31
   --------------------------------------------------------------------------------- ---------------- -----------------
   FINANCING ACTIVITIES
   Net increase in demand, savings, NOW and money-market deposits                              6,982             3,504
   Net increase (decrease) in certificates of deposit accounts                                31,308            (7,893)
   Net increase in mortgage escrow funds payable                                               1,415             1,139
   Repayments of federal funds purchased, net                                                 (6,955)                -
   Repayments of debentures                                                                   (7,000)             (500)
   Proceeds from issuance of debentures, net of offering costs                                     -               548
   Proceeds from issuance of common stock                                                         26                26
   --------------------------------------------------------------------------------- ---------------- -----------------
   Net cash provided (used) by financing activities                                           25,776            (3,176)
   --------------------------------------------------------------------------------- ---------------- -----------------
   Net decrease in cash and cash equivalents                                                  (2,431)           (2,264)
   Cash and cash equivalents at beginning of period                                           32,095            40,924
   --------------------------------------------------------------------------------- ---------------- -----------------
   Cash and cash equivalents at end of period                                               $ 29,664          $ 38,660
   --------------------------------------------------------------------------------- ---------------- -----------------
   SUPPLEMENTAL DISCLOSURES
   Cash paid during the period for:
      Interest                                                                               $ 5,744           $ 3,941
      Income taxes                                                                                80               639
   Noncash financing activities:
      Issuance of common stock to minority stockholders of Intervest Bank                          -                 7
      Conversion of convertible debentures into common stock                                       -                10
   --------------------------------------------------------------------------------- ---------------- -----------------
         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 - General

The  condensed   consolidated   financial  statements  of  Intervest  Bancshares
Corporation and Subsidiaries in this report have not been audited except for the
information derived from the audited  Consolidated  Balance Sheet as of December
31, 1999. The financial  statements in this report should be read in conjunction
with the consolidated financial statements and related notes thereto included in
the Company's  Annual Report to  Stockholders  on Form 10-KSB for the year ended
December 31, 1999.

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

Intervest  National Bank is a nationally  chartered  commercial  bank located in
Rockefeller  Plaza in New York City.  It opened for  business  on April 1, 1999.
Intervest Bank is a Florida state  chartered  commercial  bank with four banking
offices in Clearwater,  Florida and one in South  Pasadena,  Florida.  The Banks
conduct a full-service commercial banking business, which consists of attracting
deposits from the general public and investing those funds,  together with other
sources  of  funds,   primarily   through  the  origination  of  commercial  and
multifamily real estate loans, and through the purchase of security investments.
Intervest National Bank also provides Internet banking services at its Web Site:
www.intervestnatbank.com.

Intervest  Corporation of New York is located in  Rockefeller  Plaza in New York
City  and is in  the  business  of  originating  and  acquiring  commercial  and
multifamily  residential loans. As discussed in note 2, Intervest Corporation of
New York was  acquired by the Holding  Company  effective  March 10,  2000.  The
acquisition   was   accounted   for   at   historical   cost   similar   to  the
pooling-of-interests method of accounting.  Under this method of accounting, the
recorded assets, liabilities,  shareholders' equity, income and expenses of both
companies  are  combined  and  recorded  at  their   historical   cost  amounts.
Accordingly,  all prior  period  financial  information  in this report has been
adjusted  to include the  accounts of  Intervest  Corporation  of New York.  All
material   intercompany  accounts  and  transactions  have  been  eliminated  in
consolidation.

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

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

                                       6
<PAGE>

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

--------------------------------------------------------------------------------


Note 2 - Acquisition of Intervest Corporation of New York

On March 10, 2000, Intervest Bancshares Corporation completed the acquisition of
Intervest  Corporation  of New  York,  a  company  engaged  in the  business  of
originating and acquiring commercial and multifamily  residential loans. The two
entities  were  related in that the same  persons  serve on their boards and the
former  holders of all of the shares of Intervest  Corporation  of New York also
owned approximately 48% of the voting shares of Intervest Bancshares Corporation
prior to the merger.  Both Boards of  Directors,  the  shareholders  of both the
Holding  Company and Intervest  Corporation of New York, and the Federal Reserve
Bank of Atlanta approved the merger. In the merger, Intervest Corporation of New
York  shareholders  received an  aggregate  of  1,250,000  shares of the Holding
Company's  Class A common stock in exchange for all of Intervest  Corporation of
New York's  capital  stock.  The merger was  accounted  for at  historical  cost
similar to the pooling-of-interests method of accounting.

In  connection  with the merger,  the  Holding  Company  incurred  approximately
$210,000 in expenses related to attorney and consulting fees, printing and stock
compensation   expense.  The  Board  of  Directors  and  the  Holding  Company's
shareholders  approved a grant of 50,000  shares of Class B common  stock to the
Chairman  of  the  Holding   Company  for  his  services  with  respect  to  the
development,  structuring and other activities  associated with the merger. This
resulted in $159,000 of compensation  expense being recorded,  which is included
in the consolidated statement of earnings for the quarter ended March 31, 2000.

Certain pro forma consolidated  balance sheet information follows as of December
31, 1999:
<TABLE>

                                                                 Originally      Historical       Pro Forma
($ in thousands)                                                  Reported          ICNY         Adjustments       Adjusted
--------------------------------------------------------------- -------------- --------------- ----------------- --------------
<S>                                                                   <C>             <C>       <C>         <C>       <C>
Cash and cash equivalents                                             $ 7,429         $30,754   $   (6,088)  (1)      $ 32,095
Securities held to maturity                                            83,132               -            -              83,132
Federal Reserve Bank stock                                                508               -            -                 508
Loans receivable, net of unearned fees and loan loss reserves         147,154          63,290            -             210,444
Accrued interest receivable                                             1,836             998            -               2,834
Premises and equipment, net                                             5,767              96            -               5,863
Deferred income tax asset                                                 912              24            -                 936
Deferred debenture offering costs                                         479           3,242            -               3,721
All other assets                                                          612             336            -                 948
--------------------------------------------------------------- -------------- --------------- ----------------- --------------
Total assets                                                         $247,829         $98,740    $  (6,088)           $340,481
--------------------------------------------------------------- -------------- --------------- ----------------- --------------

Deposit liabilities                                                  $207,168         $     -    $  (6,088) (1)       $201,080
Federal funds purchased                                                 6,955               -            -               6,955
Debentures payable                                                      6,930          77,400            -              84,330
Accrued interest on debentures payable                                    892           7,200            -               8,092
Mortgage escrow funds payable                                           1,521           1,854            -               3,375
Official checks outstanding                                             1,821               -            -               1,821
All other liabilities                                                   1,078             146            -               1,224
--------------------------------------------------------------- -------------- --------------- ----------------- --------------
Total liabilities                                                     226,365          86,600       (6,088)            306,877
--------------------------------------------------------------- -------------- --------------- ----------------- --------------

Common stock and paid-in capital                                       16,998           5,609            -              22,607
Retained earnings                                                       4,466           6,531            -              10,997
--------------------------------------------------------------- -------------- --------------- ----------------- --------------
Total stockholders' equity                                             21,464          12,140            -              33,604
--------------------------------------------------------------- -------------- --------------- ----------------- --------------
Total liabilities and stockholders' equity                           $247,829         $98,740    $  (6,088)           $340,481
--------------------------------------------------------------- -------------- --------------- ----------------- --------------
<FN>

(1)  Represents  the  elimination  of  certain  intercompany  deposit  accounts.
     Certain  reclassifications  were also  made to the  historical  amounts  of
     Intervest Corporation of New York and the Company to conform to the current
     period's presentation.
</FN>

</TABLE>

                                       7

<PAGE>

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

Note 2 - Acquisition of Intervest Corporation of New York, Continued

A pro forma summary of the Company's  consolidated statement of earnings for the
quarter ended March 31, 1999 follows:
<TABLE>

                                                                          Originally   Historical    Pro Forma
($ in thousands)                                                           Reported       ICNY      Adjustments     Adjusted
------------------------------------------------------------------------ ------------- ----------- -------------- -------------
<S>                                                                            <C>         <C>            <C>
Interest and dividend income                                                   $3,476      $2,654      $(1)  (a)       $ 6,129
Interest expense                                                                2,171       2,270       (1)  (a)         4,440
                                                                         ------------- ----------- -------------- -------------
Net interest and dividend income                                                1,305         384              -         1,689
Provision for loan loss reserves                                                  112           -              -           112
                                                                         ------------- ----------- -------------- -------------
Net interest and dividend income after
  provision for loan loss reserve                                               1,193         384              -         1,577
Noninterest income                                                                123         291              -           414
Noninterest expense                                                               647         254              -           901
                                                                         ------------- ----------- -------------- -------------
Earnings before income taxes and change in accounting principle                   669         421              -         1,090
Income taxes                                                                      275         193              -           468
Cumulative effect of change in accounting principle                              (128)          -              -          (128)
------------------------------------------------------------------------ ------------- ----------- -------------- -------------
Net earnings                                                                     $266       $ 228     $        -          $494
------------------------------------------------------------------------ ------------- ----------- -------------- -------------
Basic earnings per share                                                       $ 0.11           -                        $0.13
Diluted earnings per share                                                     $ 0.10           -                        $0.12
Adjusted earnings used for diluted computation                                 $  350       $ 228              -         $ 578
Average number of common shares outstanding - Basic                         2,489,831           -      1,250,000     3,739,831
Average number of common shares outstanding - Diluted                       3,544,038           -      1,250,000     4,794,038
------------------------------------------------------------------------ ------------- ----------- ------------- --------------

<FN>
(a)      Represents the elimination of certain intercompany interest expense.
</FN>

</TABLE>

A summary of the  Company's  consolidated  statement of earnings for the quarter
ended March 31, 2000 follows:
<TABLE>

                                                                                    Excluding
                                                                                    Intervest
                                                                                   Corporation          As
($ in thousands)                                                                 of New York (1)   Reported (1)
----------------------------------------------------------------------- -- ---- ------------------ --------------
<S>                                                                                        <C>            <C>
Interest and dividend income                                                               $4,936         $7,256
Interest expense                                                                            3,205          5,412
                                                                                      ------------ --------------
Net interest and dividend income                                                            1,731          1,844
Provision for loan loss reserves                                                              155            155
                                                                                      ------------ --------------
Net  interest  and  dividend  income  after
  provision  for loan  loss reserves                                                        1,576          1,689
Noninterest income                                                                            136            162
Noninterest expense                                                                         1,044          1,251
                                                                                      ------------ --------------
Earnings before income taxes                                                                  668            600
Income taxes                                                                                  243            210
----------------------------------------------------------------------- -- ---------- ------------ --------------
Net earnings                                                                                 $425           $390
----------------------------------------------------------------------- -- ---------- ------------ --------------
<FN>
(1)      After elimination of intercompany revenue and expense.
</FN>
</TABLE>

                                       8
<PAGE>


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

Note 3 - Allowance for Loan Loss Reserves

The Company  monitors its loan portfolio to determine the  appropriate  level of
the  allowance for loan loss reserves  based on various  factors.  These factors
include:  the type and level of loans outstanding,  volume of loan originations;
overall  portfolio  quality;   loan  concentrations;   specific  problem  loans,
historical  chargeoffs and recoveries;  adverse  situations which may affect the
borrowers'  ability to repay;  and  management's  assessment  of the current and
anticipated economic conditions in the Company's lending regions.

No loans were  classified  as  nonaccrual  or impaired  during the 2000 and 1999
reporting periods in this report.

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

                                                  For the Quarter Ended
                                                        March 31,
                                                 ------------ -------------
($ in thousands)                                        2000          1999
------------------------------------------------------------- -------------
Balance at beginning of period                        $2,493        $1,662
Provision charged to operations                          155           112
Recoveries                                                 -             1
------------------------------------------------------------- -------------
Balance at end of period                              $2,648        $1,775
------------------------------------------------------------- -------------

Note 4 - Earnings Per Share (EPS)

Basic EPS is calculated by dividing net earnings by the weighted-average  number
of shares of common stock  outstanding.  Diluted EPS is  calculated  by dividing
adjusted net earnings by the  weighted-average  number of shares of common stock
outstanding and dilutive  potential  common stock shares that may be outstanding
in the future. Potential common stock shares may arise from outstanding dilutive
common  stock  warrants  (as  computed  by  the  "treasury  stock  method")  and
convertible debentures (as computed by the "if converted method").

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

EPS  computations  for the 1999 period have been adjusted to include the results
of  operations  of Intervest  Corporation  of New York as well as the  1,250,000
common shares issued in the merger.

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:

                                       9
<PAGE>
<TABLE>
                Intervest Bancshares Corporation and Subsidiaries
        Notes to Condensed Consolidated Financial Statements (Unaudited)
--------------------------------------------------------------------------------

Note 4 - Earnings Per Share (EPS), Continued

                                                                           For the Quarter Ended
                                                                                 March 31,
                                                                         ------------- -------------
BASIC EARNINGS PER SHARE                                                     2000          1999
------------------------------------------------------------------------ ------------- -------------
<S>                                                                          <C>           <C>
Net earnings:
  Earnings before change in accounting principle                             $390,000      $622,000
  Cumulative effect of change in accounting principle (1)                           -      (128,000)
------------------------------------------------------------------------ ------------- -------------
 Net earnings                                                                $390,000      $494,000
------------------------------------------------------------------------ ------------- -------------
Average number of common shares outstanding                                 3,851,384     3,739,831
Per share amounts:
  Earnings before change in accounting principle                                $0.10         $0.16
  Cumulative effect of change in accounting principle (1)                           -         (0.03)
------------------------------------------------------------------------ ------------- -------------
  Basic net earnings per share                                                  $0.10         $0.13
------------------------------------------------------------------------ ------------- -------------

DILUTED EARNINGS PER SHARE

Adjusted net earnings for diluted earnings per share computation (2)         $390,000      $578,000
Average number of common shares outstanding for dilution:
  Common shares outstanding per above                                       3,851,384     3,739,831
  Potential dilutive shares resulting from exercise of warrants (2)                 -       310,774
  Potential dilutive shares resulting from conversion of debentures (2)             -       743,433
                                                                         ------------- -------------
  Total average number of common shares outstanding                         3,851,384     4,794,038
                                                                         ------------- -------------
Per share amounts:
  Earnings before change in accounting principle                                $0.10         $0.15
  Cumulative effect of change in accounting principle (1)                           -         (0.03)
------------------------------------------------------------------------ ------------- -------------
  Diluted net earnings per share                                                $0.10         $0.12
------------------------------------------------------------------------ ------------- -------------
<FN>
(1)  Represents  a charge,  net of taxes,  from the  adoption  of  Statement  of
     Position 98-5, "Reporting on the Costs of Start-Up Activities."

(2)  A total of 2,659,000  and  1,134,000  common stock  warrants  with exercise
     prices  ranging  from $6.67 to $15.00 were not  included  in the  quarterly
     computation  of diluted EPS for 2000 and 1999,  respectively,  because they
     were antidilutive.  Additionally, convertible debentures were excluded from
     the 2000 quarterly diluted EPS computation because they were not dilutive.
</FN>
</TABLE>

Note 5 - Subordinated Debentures Payable

The  Holding  Company  and  Intervest  Corporation  of New York have  debentures
outstanding as follows:

<TABLE>
                                                                        At March 31,    At December 31,
($ in thousands)                                                            2000              1999
---------------------------------------------------------------------- --------------- -------------------
<S>                                                                        <C>               <C>
INTERVEST CORPORATION OF NEW YORK:
Series 06/29/92 - interest at 2% above prime - due April 1, 2000          $     -            $7,000
Series 09/13/93 - interest at 2% above prime - due October 1, 2001          8,000             8,000
Series 01/28/94 - interest at 2% above prime - due April 1, 2002            4,500             4,500
Series 10/28/94 - interest at 2% above prime - due April 1, 2003            4,500             4,500
Series 05/12/95 - interest at 2% above prime - due April 1, 2004            9,000             9,000
Series 10/19/95 - interest at 2% above prime - due October 1, 2004          9,000             9,000
Series 05/10/96 - interest at 2% above prime - due April 1, 2005            0,000            10,000
Series 10/15/96 - interest at 2% above prime - due October 1, 2005          5,500             5,500
Series 04/30/97 - interest at 1% above prime - due October 1, 2005          8,000             8,000
Series 11/10/98 - interest at 8% fixed       - due January 1, 2001          1,400             1,400
Series 11/10/98 - interest at 81/2% fixed    - due January 1, 2003          1,400             1,400
Series 11/10/98 - interest at 9% fixed       - due January 1, 2005          2,600             2,600
Series 06/28/99 - interest at 8% fixed       - due July 1, 2002             2,500             2,500
Series 06/28/99 - interest at 81/2% fixed    - due July 1, 2004             2,000             2,000
Series 06/28/99 - interest at 9% fixed       - due July 1, 2006             2,000             2,000
                                                                         ------------- -------------------
                                                                           70,400            77,400
INTERVEST BANCSHARES CORPORATION:
Series 05/14/98 - interest at 8% fixed       - due July 1, 2008             6,930             6,930
------------------------------------------------------------------------ ------------- -------------------
                                                                          $77,330           $84,330
------------------------------------------------------------------------ ------------- -------------------
</TABLE>

                                       10
<PAGE>

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

Note 5 - Subordinated Debentures Payable, Continued

The "Prime" in the preceding  table refers to the prime rate of Chase  Manhattan
Bank, which was 9% on March 31, 2000 and 8.50% at December 31, 1999. On March 1,
2000,  Intervest  Corporation of New York's Series 6/29/92  debentures  totaling
$7,000,000  in  principal  and  maturing on April 1, 2000 were  redeemed for the
outstanding principal amount plus accrued interest of $1,435,000.

Intervest  Corporation of New York's  floating-rate  Series  10/28/94,  5/12/95,
10/19/95,  5/10/96, 10/15/96 and 4/30/97 debentures have a maximum interest rate
of 12%.  Additionally,  payment of interest on an  aggregate of  $19,060,000  of
debentures,  which  interest is  compounded,  is deferred  until  maturity.  The
payment of interest on the remaining debentures is made quarterly. Any debenture
holder who has deferred receipt of interest may at any time elect to receive the
deferred interest and subsequently receive regular payments of interest,  except
holders of the various Series  11/10/98 and Series 6/28/99  debentures.  All the
debentures  may be redeemed,  in whole or in part,  at any time at the option of
Intervest  Corporation of New York, for face value, except for debentures issued
after 1997, which would be at a premium of 1% if the redemption is prior to July
1, 2000.  Series  11/10/98  and Series  6/28/99  debenture  holders  can require
Intervest Corporation of New York to repurchase the debentures up to $100,000 in
principal  amount plus accrued interest each year after January 1, 2000 and July
1, 2002,  respectively.  All the debentures are unsecured and subordinate to all
present and future senior indebtedness, as defined.

The Holding  Company's Series 05/14/98  subordinated  debentures are due July 1,
2008 and are convertible at the option of the holders at any time prior to April
1, 2008, unless previously redeemed by the Holding Company, into shares of Class
A common stock of the Holding  Company at the  following  conversion  prices per
share: $12.50 in 2000; $14.00 in 2001; $15.00 in 2002; $16.00 in 2003; $18.00 in
2004;  $21.00 in 2005; $24.00 in 2006; $27.00 in 2007 and $30.00 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.  The Holding  Company also has the option at any time to call
all or any part of the convertible debentures for payment and redeem the same at
any time prior to maturity thereof. The redemption price is the face amount plus
a 1% premium if redemption occurs before July 1, 2000, or the face amount if the
date of redemption is on or after July 1, 2000.  Interest  accrues and compounds
each calendar quarter at 8%. All accrued interest is payable at maturity whether
by acceleration,  redemption or otherwise. Any convertible debenture holder may,
on or before July 1 of each year commencing  July 1, 2003,  elect to be paid all
accrued interest and to thereafter receive payments of interest quarterly.

Scheduled  contractual  maturities  of all  debentures  as of March 31, 2000 are
summarized as follows:

<TABLE>

          ($ in thousands)                                                     Principal     Accrued Interest
          -------------------------------------------------------- --- ------------------ --------------------
<S>                                          <C> <C>                               <C>                   <C>
          For the nine months ended December 31, 2000                            $     -               $    -
          For the year ended December 31, 2001                                     9,400                1,147
          For the year ended December 31, 2002                                     7,000                  595
          For the year ended December 31, 2003                                     5,900                  591
          For the year ended December 31, 2004                                    20,000                2,687
          Thereafter                                                              35,030                2,406
          -------------------------------------------------------- --- ------------------ --------------------
                                                                                 $77,330               $7,426
          -------------------------------------------------------- --- ------------------ --------------------
</TABLE>

On May 1, 2000, Series 9/13/93 and 1/28/94 debentures were redeemed by Intervest
Corporation  of New York prior to maturity for  outstanding  principal  totaling
$12,500,000 plus accrued  interest of $1,580,000.  In connection with this early
redemption,  approximately  $250,000 of unamortized  deferred debenture offering
costs was charged to expense in the second quarter of 2000.

                                       11

<PAGE>


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

Note 6 - Regulatory Capital

The  Banks  are  required  to  maintain  certain  minimum   regulatory   capital
requirements.  The following is a summary at March 31, 2000 of those  regulatory
capital requirements and the actual capital of each Bank on a percentage basis:
<TABLE>

         <S>                                                          <C>               <C>                <C>
                                                                      Actual            Minimum            To Be Considered
         Intervest Bank                                               Ratios            Requirement        Well Capitalized
                                                                      -------           -----------        ----------------
         Total capital to risk-weighted assets                         10.80%              8.00%                  10.00%
         Tier 1 capital to risk-weighted assets                         9.55%              4.00%                   6.00%
         Tier 1 capital to total average assets - leverage ratio        6.50%              4.00%                   5.00%

         Intervest National Bank
         Total capital to risk-weighted assets                         19.48%              8.00%                  10.00%
         Tier 1 capital to risk-weighted assets                        18.52%              4.00%                   6.00%
         Tier 1 capital to total average assets - leverage ratio       17.72%              4.00%                   5.00%
</TABLE>

Note 7 - Cumulative Effect of Change in Accounting Principle

On January 1, 1999,  the Company  adopted as required  the AICPA's  Statement of
Position (SOP) 98-5,  "Reporting on the Costs of Start-Up  Activities."  The SOP
requires that all start-up costs (except for those that are capitalizable  under
other  generally  accepted  accounting  principles)  be expensed as incurred for
financial statement purposes effective January 1, 1999. Previously, a portion of
start-up costs were generally  capitalized  and amortized over a period of time.
The adoption of this  statement  resulted in a net charge of $128,000 on January
1,  1999.  The  charge  represents  the  expensing,  net  of a tax  benefit,  of
cumulative  start-up costs that had been incurred  through  December 31, 1998 in
connection with organizing Intervest National Bank.


                                       12

<PAGE>




                Intervest Bancshares Corporation and Subsidiaries

               Review by Independent Certified Public Accountants

Hacker,  Johnson,  Cohen & Grieb PA, the Company's  independent certified public
accountants,  have made a limited  review of the financial  data as of March 31,
2000, and for the three-month  period then ended presented in this document,  in
accordance  with standards  established  by the American  Institute of Certified
Public Accountants.

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
























                                       13


<PAGE>


        Report on Review by Independent Certified Public Accountants

The Board of Directors
Intervest Bancshares Corporation and Subsidiaries
New York, New York:

         We have reviewed the condensed  consolidated balance sheet of Intervest
Bancshares  Corporation and  Subsidiaries  (the "Company") as of March 31, 2000,
and the  related  condensed  consolidated  statements  of  earnings,  changes in
stockholders'  equity  and cash  flows for the  three-month  period  then  ended
included in this report.  These financial  statements are the  responsibility of
the Company's management.

         We were furnished with the report of other  accountants on their review
of the interim financial information of Intervest Corporation of New York, whose
total assets as of March 31, 2000, and whose interest income, noninterest income
and net loss for the three-month period then ended,  constituted  22.8%,  31.9%,
16.0% and 9.0%, respectively of the related consolidated totals.

         We conducted our review in accordance with standards established by the
American  Institute  of  Certified  Public  Accountants.  A  review  of  interim
financial  information consists principally of applying analytical procedures to
financial  data and making  inquiries of persons  responsible  for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the  expression  of an opinion  regarding the  financial  statements  taken as a
whole. Accordingly, we do not express such an opinion.

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

HACKER, JOHNSON, COHEN & GRIEB PA
Tampa, Florida
May 9, 2000









                                       14
<PAGE>


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

General

Intervest  Bancshares  Corporation is the Holding Company for Intervest National
Bank in New York City,  Intervest  Bank in  Clearwater,  Florida,  and Intervest
Corporation  of New York in New  York  City.  Hereafter,  all the  entities  are
referred to as the "Company" on a consolidated  basis.  Intervest  National Bank
and Intervest Bank may be referred to together as the "Banks."

All  financial  information  in this  report has been  adjusted  to include  the
accounts of Intervest Corporation of New York, which was acquired by the Company
through a merger completed on March 10, 2000. Intervest  Corporation of New York
engages in the business of originating and acquiring  commercial and multifamily
residential  loans. The merger has been accounted for at historical cost similar
to the  pooling-of-interests  method of accounting.  See note 2 to the condensed
consolidated financial statements for a further discussion of the merger.

The Company reported net earnings of $390,000, or $0.10 per fully diluted share,
for the first  quarter of 2000,  compared to net earnings of $494,000,  or $0.12
per fully  diluted  share,  for the first  quarter of 1999.  The  decline in net
earnings  was  primarily  due  to  nonrecurring  expenses  associated  with  the
acquisition  of  Intervest  Corporation  of New York,  an increase in  operating
expenses  and a decline in  mortgage  prepayment  fee  income.  These items were
partially offset by higher net interest income and a lower income tax provision.

Net  earnings  from the  Company's  banking  subsidiaries  continued to increase
during  the first  quarter.  Intervest  Bank,  a Florida  state-chartered  bank,
recorded  net earnings of $495,000,  a 45% increase  from  $342,000 in the first
quarter of 1999,  while  Intervest  National  Bank's net  earnings  improved  to
$61,000  in the  first  quarter  of  2000,  from a net loss of  $194,000  in the
comparable prior year quarter resulting from startup expenses.

Intervest  National Bank is a  nationally-chartered  commercial bank that opened
for business on April 1, 1999.  It is located in  Rockefeller  Plaza in New York
City and provides full commercial banking services, including internet banking.

Selected  information  about the Holding Company and its  subsidiaries at or for
the quarter ended March 31, 2000, follows in the table below:
<TABLE>

                                                                                                   Intervest
                                                                                      Intervest   Corporation
                                                            Holding      Intervest    National       of New       Consolidated
  ($ in thousands)                                           Company       Bank         Bank          York        Amounts (1)
  --------------------------------------------------------- ----------- ------------ ------------ ------------- ---------------
<S>                                                            <C>         <C>           <C>           <C>            <C>
  Total assets                                                 $42,235     $199,906      $77,940       $88,114        $367,119
  Total cash and cash equivalents                                2,516        4,950       12,725        16,648          29,664
  Total securities, net                                              -       75,462        8,229             -          83,691
  Total loans, net of unearned fees and loan loss reserves       5,105      111,733       55,283        66,918         239,039
  Total deposit liabilities                                          -      182,783       64,215             -         239,370
  Total debentures payable                                       6,930            -            -        70,400          77,330
  Total stockholders' equity                                    34,185       13,242       11,554         9,105          34,185
  Net earnings (loss) for the quarter ended                      (131)          495           61          (35)             390
  Number of full-service banking offices                             -            5            1             -               6
  --------------------------------------------------------- ----------- ------------ ------------ ------------- ---------------

(1)      Consolidated amounts exclude intercompany balances.
</TABLE>


                                       15
<PAGE>
Comparison of Financial Condition at March 31, 2000 and December 31, 1999

Overview

Total assets at March 31, 2000 increased 8% to $367,119,000,  from  $340,481,000
at December  31, 1999,  primarily  reflecting  an increase in loans  receivable,
partially offset by a decline in cash and cash equivalents.

Total liabilities at March 31, 2000 increased to $332,934,000, from $306,877,000
at December 31, 1999, or 8%, reflecting growth in deposit accounts. The increase
in deposits was  partially  offset by a decline in federal  funds  purchased and
debentures payable.

Stockholders'   equity   increased  to  $34,185,000  at  March  31,  2000,  from
$33,604,000 at year-end 1999.  The increase  reflected  earnings for the quarter
and issuance of common stock. Book value per common share also improved to $8.79
per share at March 31, 2000, from $8.76 at December 31, 1999.

The Company's balance sheet was comprised of the following:

<TABLE>

                                                        At March 31, 2000                        At December 31, 1999
                                                 -------------- -----------------          ----------------- -----------------
                                                    Carrying          % of                      Carrying           % of
($ in thousands)                                      Value       Total Assets                   Value         Total Assets
------------------------------------------------ -------------- ----------------- -------- ----------------- -----------------
<S>                                                   <C>                   <C>                     <C>                   <C>
Cash and cash equivalents                             $ 29,664              8.1%                    $32,095               9.4%
Securities                                              83,691             22.8                      83,640              24.6
Loans receivable, net of loan loss reserves            239,039             65.1                     210,444              61.8
All other assets                                        14,725              4.0                      14,302               4.2
------------------------------------------------ -------------- ----------------- -------- ----------------- -----------------
Total assets                                          $367,119            100.0%                   $340,481             100.0%
------------------------------------------------ -------------- ----------------- -------- ----------------- -----------------
Deposits                                              $239,370             65.2                    $201,080              59.1%
Federal funds purchased                                      -                -                       6,955               2.0
Debentures payable                                      77,330             21.1                      84,330              24.8
Accrued interest payable on debentures                   7,426              2.0                       8,092               2.3
All other liabilities                                    8,808              2.4                       6,420               1.9
------------------------------------------------ -------------- ----------------- -------- ----------------- -----------------
Total liabilities                                      332,934             90.7                     306,877              90.1
------------------------------------------------ -------------- ----------------- -------- ----------------- -----------------
Stockholders' equity                                    34,185              9.3                      33,604               9.9
------------------------------------------------ -------------- ----------------- -------- ----------------- -----------------
Total liabilities and stockholders' equity            $367,119            100.0%                   $340,481             100.0%
------------------------------------------------ -------------- ----------------- -------- ----------------- -----------------
</TABLE>

Cash and Cash Equivalents

Cash and cash equivalents  decreased due to the partial deployment of funds into
new loan originations.  Cash and cash equivalents include  interest-bearing  and
noninterest-bearing  cash balances,  investments in overnight  federal funds and
other short-term  investments  that have original  maturities of three months or
less. The Company's short-term  investments are normally comprised of commercial
paper  issued  by large  commercial  banks,  certificates  of  deposit  and U.S.
government  securities.  The level of cash and cash equivalents fluctuates based
on various  factors,  including  liquidity  needs,  loan demand,  deposit flows,
repayments of borrowed funds and alternative security investment opportunities.

Securities

Securities  for which the Company has the intent and ability to hold to maturity
are  classified  as held to maturity and carried at amortized  cost.  Securities
held to maturity totaled  $83,183,000 at March 31, 2000, compared to $83,132,000
at December 31, 1999. The portfolio,  which remained  relatively  unchanged from

                                       16
<PAGE>

year-end 1999,  consists of fixed-rate debt obligations of the Federal Home Loan
Bank, Federal Farm Credit Bank and Federal National Mortgage  Association.  Most
of the  securities  have terms that allow the issuer the right to call or prepay
its obligation without prepayment penalty.

In order for the Banks to be members of the Federal Reserve Banking System,  the
Banks  maintain an investment in the capital stock of the Federal  Reserve Bank,
which pays a dividend that is currently 6%. The amount of the investment,  which
amounted to $508,000 at March 31, 2000 and year-end  1999,  fluctuates  based on
certain criteria.

Loans Receivable

Loans  receivable,  before the  allowance for loan loss  reserves,  increased to
$241,687,000 at March 31, 2000,  from  $212,937,000 at December 31, 1999, due to
new commercial and multifamily real estate loan  originations,  partially offset
by principal  repayments.  Commercial  real estate and  multifamily  real estate
properties  collateralized  almost  all  of the  loans  in  the  Company's  loan
portfolio.

At March 31, 2000 and December 31, 1999, the Company did not have any loans on a
nonaccrual status or classified as impaired.

Allowance for Loan Loss Reserves

The Company  monitors its loan portfolio to determine the  appropriate  level of
the  allowance for loan loss reserves  based on various  factors.  These factors
include:  the type and level of loans outstanding,  volume of loan originations;
overall  portfolio  quality;   loan  concentrations;   specific  problem  loans,
historical  chargeoffs and recoveries;  adverse  situations which may affect the
borrowers'  ability to repay;  and  management's  assessment  of the current and
anticipated economic conditions in the Company's lending regions.

At March 31, 2000, the allowance amounted to $2,648,000,  compared to $2,493,000
at  year-end   1999.  The  increase  in  the  allowance  was  due  to  new  loan
originations.  The allowance  represented  1.10% of total loans  outstanding  at
March 31, 2000, compared to 1.17% at December 31, 1999.

All Other Assets

The following table shows the composition of all other assets:

                                                         At            At
                                                     March 31,    December 31,
     ($ in thousands)                                   2000           1999
     ----------------------------------------------- ----------- ---------------
     Accrued interest receivable                         $3,130           $2,834
     Premises and equipment, net                          5,814            5,863
     Deferred income tax asset                              950              936
     Deferred debenture offering costs (1)                3,491            3,721
     All other                                            1,340              948
     ----------------------------------------------- ----------- ---------------
                                                        $14,725          $14,302
     ----------------------------------------------- ----------- ---------------
     (1) Deferred debenture offering costs consist primarily
     of underwriters' commissions and are amortized over the
     terms of the debentures based on their maturities.

                                       17
<PAGE>

Deposit Liabilities

Deposit  liabilities  increased due to growth in deposit accounts,  particularly
certificates  of deposits.  At March 31, 2000,  certificate of deposit  accounts
totaled $154,102,000 and demand deposit,  savings, NOW and money-market accounts
aggregated  $85,268,000.   The  same  categories  of  deposit  accounts  totaled
$122,794,000 and $78,286,000, respectively, at December 31, 1999. Certificate of
deposit accounts  represented 64% of total deposits at March 31, 2000,  compared
to 61% at year-end 1999.

Federal Funds Purchased

From time to time,  the Banks purchase  Federal funds to manage their  liquidity
needs.  At  March  31,  2000,  there  were no  outstanding  funds,  compared  to
$6,955,000 at December 31, 1999.

Debentures Payable and Related Accrued Interest Payable

Intervest  Corporation  of New  York,  the  Holding  Company's  subsidiary,  has
$70,400,000  of  registered  floating  and  fixed-rate  subordinated  debentures
outstanding.  The debentures  have been sold from time to time and the resulting
proceeds have been used to fund the  origination and purchase of mortgage loans.
The Holding  Company  has  $6,930,000  of  convertible  subordinated  debentures
outstanding, whose proceeds have been used for working capital purposes.

On March 1, 2000,  Intervest  Corporation  of New York redeemed  Series  6/29/92
debentures  totaling  $7,000,000  in principal and maturing on April 1, 2000 for
outstanding principal plus accrued interest of $1,435,000.  Additionally, on May
1, 2000,  Series  9/13/93  and 1/28/94  debentures  were  redeemed by  Intervest
Corporation  of New York prior to maturity for  outstanding  principal  totaling
$12,500,000 plus accrued  interest of $1,580,000.  In connection with this early
redemption,  approximately  $250,000 of unamortized  deferred debenture offering
costs was  charged  to expense  in the  second  quarter  of 2000.  For a further
discussion of the  debentures,  including  information on conversion  prices and
redemption  features,  see  note  5  to  the  condensed  consolidated  financial
statements included in this report.

All Other Liabilities

The following table shows the composition of all other liabilities:

                                              At March 31,     At December 31,
      ($ in thousands)                            2000               1999
      ------------------------------------- --------------- -------------------
      Mortgage escrow funds payable                 $4,790              $3,375
      Accrued interest payable on deposits             564                 461
      Official checks outstanding                    2,382               1,821
      All other                                      1,072                 763
      ------------------------------------- --------------- -------------------
                                                    $8,808              $6,420
      ------------------------------------- --------------- -------------------

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

Stockholders' Equity and Regulatory Capital

Stockholders'  equity  increased  almost entirely as a result of net earnings of
$390,000 and the issuance of 53,750 shares of common stock, which resulted,  net
of issuance costs, in a $185,000 aggregate increase in stockholders' equity. The
shares  were issued as follows:  3,750  shares of Class A common  stock upon the
exercise of Class A  warrants;  and 50,000  shares of Class B common  stock as a


                                       18
<PAGE>

result of a stock bonus awarded to the Holding Company's Chairman. See note 2 to
the condensed  consolidated  financial  statements included in this report for a
further discussion of the stock bonus award.

Intervest   Bank  and  Intervest   National   Bank  are  both   well-capitalized
institutions  as  defined  by  FDIC  regulations.  See  note 6 to the  condensed
consolidated  financial  statements in this report for their respective  capital
ratios.

Liquidity and Capital Resources

The Company manages its liquidity position on a daily basis to assure that funds
are  available to meet  operations,  loan and  investment  funding  commitments,
deposit  withdrawals and the repayment of borrowed funds. The Company's  primary
sources  of funds  consist  of:  retail  deposits  obtained  through  the Banks'
offices;  satisfactions  and  repayments of loans;  the  maturities and calls of
securities;  and cash provided by operating activities.  From time-to-time,  the
Company  may  also  borrow  funds  through  the  Fed  funds  market  or  sale of
debentures.  For information about the cash flows from the Company's  operating,
investing and financing activities, see the condensed consolidated statements of
cash flows in this report.

At  March  31,  2000,  the  Company's   total   commitment  to  lend  aggregated
approximately  $26,000,000.  Based on its cash  flow  projections,  the  Company
believes  that  it  can  fund  all  of  its  outstanding  commitments  from  the
aforementioned sources of funds.

Interest Rate Risk

Interest  rate risk  arises  from  differences  in the  repricing  of assets and
liabilities within a given time period. The principal objective of the Company's
asset/liability  management  strategy is to minimize  its exposure to changes in
interest rates.  The Company uses "gap analysis,"  which measures the difference
between interest-earning assets and interest-bearing  liabilities that mature or
reprice within a given time period, to monitor its interest rate sensitivity. At
March 31, 2000, the Company's  one-year negative  interest-rate  sensitivity gap
was $72,706,000, or 19.8% of total assets, compared to $80,693,000, or 23.7%, at
December 31, 1999.

In computing the gap, the Company treats its interest checking, money market and
savings deposit accounts as immediately  repricing.  For a further discussion of
interest rate risk and gap analysis,  including all of the  assumptions  used in
developing  the Company's  one-year gap position,  see the Company's 1999 Annual
Report on Form 10-KSB, pages 28 and 29.

Comparison of Results of Operations for the Quarters Ended March 31, 2000
and 1999

Overview

Net earnings for the first quarter of 2000 were  $390,000,  compared to $494,000
for the first  quarter of 1999.  Diluted  earnings per share  amounted to $0.10,
compared  to $0.12 the first  quarter  of 1999.  The  decline  in  earnings  was
primarily  due to a $350,000  increase in  noninterest  expenses  and a $252,000
decline in noninterest income.  These items were partially offset by an increase
in net interest  income of $155,000 and a $258,000  decline in the provision for
income  taxes.  Results for the first  quarter of 1999  included a one-time  net
charge of $128,000 related to the required  adoption of the AICPA's Statement of
Position (SOP) 98-5, "Reporting on the Costs of Start-Up Activities."

                                       19
<PAGE>


Net Interest and Dividend Income

Net interest and dividend income is the Company's primary source of earnings and
is   influenced   primarily   by  the   amount,   distribution   and   repricing
characteristics of its interest-earning assets and interest-bearing  liabilities
as well as by the relative  levels and  movements of interest  rates.  The table
that  follows  sets  forth  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 annualized  income/expense  for each period
divided by average interest-earning  assets/interest-bearing  liabilities during
each period.  Certain yields and rates shown are adjusted for related fee income
or expense.  Average  balances  are  derived  mainly  from daily  balances.  Net
interest  margin is computed by dividing  annualized  net  interest and dividend
income by the average of total interest-earning assets during each period.
<TABLE>

                                                                             For the Quarter Ended
                                                  ------------------------------------ --- ------------------------------------
                                                            March 31, 2000                           March 31, 1999
                                                  ------------------------------------ --- ------------------------------------
                                                     Average      Interest    Yield/         Average      Interest    Yield/
($ in thousands)                                     Balance     Inc./Exp.     Rate          Balance     Inc./Exp.     Rate
------------------------------------------------- -------------- ----------- --------- --- ------------- ----------- ----------
<S>                                                    <C>           <C>       <C>             <C>           <C>      <C>
Assets
Interest-earning assets:
   Loans                                               $230,710      $5,646    9.84%           $164,754      $4,481   11.03%
   Securities                                           104,361       1,520    5.86             109,831       1,518    5.61
   Other interest-earning assets                          6,426          90    5.63              11,884         130    4.44
------------------------------------------------- -------------- ----------- --------- --- ------------- ----------- ----------
Total interest-earning assets                           341,497      $7,256    8.55%            286,469      $6,129    8.68%
------------------------------------------------- -------------- ----------- --------- --- ------------- ----------- ----------
Noninterest-earning assets                               14,429                                  12,544
------------------------------------------------- -------------- ----------- --------- --- ------------- ----------- ----------
Total assets                                           $355,926                                $299,013
------------------------------------------------- -------------- ----------- --------- --- ------------- ----------- ----------
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
   Checking deposits                                    $ 7,288      $   55    3.04%           $  7,321      $   56    3.10%
   Savings deposits                                      17,357         215    4.98              26,942         279    4.20
   Money-market deposits                                 51,839         662    5.14              35,953         386    4.35
   Certificates of deposit                              130,444       1,912    5.90              94,349       1,294    5.56
                                                  -------------- ----------- --------- --- ------------- ----------- ----------
   Total deposit accounts                               206,928       2,844    5.53             164,565       2,015    4.97
   Federal funds purchased                               10,101         146    5.81                   -           -       -
   Debentures and accrued interest payable               91,033       2,422   10.70              93,929       2,425   10.47
------------------------------------------------- -------------- ----------- --------- --- ------------- ----------- ----------
Total interest-bearing liabilities                      308,062      $5,412    7.07%            258,494      $4,440    6.97%
------------------------------------------------- -------------- ----------- --------- --- ------------- ----------- ----------
Noninterest-bearing deposits                              7,467                                   3,737
Noninterest-bearing liabilities                           6,531                                   5,516
Stockholders' equity                                     33,866                                  31,266
------------------------------------------------- -------------- ----------- --------- --- ------------- ----------- ----------
Total liabilities and stockholders' equity             $355,926                                $299,013
------------------------------------------------- -------------- ----------- --------- --- ------------- ----------- ----------
Net interest and dividend income/spread                              $1,844    1.48%                         $1,689   1.71%
------------------------------------------------- -------------- ----------- --------- --- ------------- ----------- ----------
Net interest-earning assets/margin                      $33,435                2.17%           $ 27,975               2.39%
------------------------------------------------- -------------- ----------- --------- --- ------------- ----------- ----------
Ratio of total interest-earning assets
   to total interest-bearing liabilities                  1.11x                                   1.11x
------------------------------------------------- -------------- ----------- --------- --- ------------- ----------- ----------
Other Ratios:
  Return on average assets (1)                            0.44%                                   0.66%
  Return on average equity  (1)                           4.61%                                   6.32%
  Noninterest expense to average assets (1)               1.41%                                   1.21%
  Average stockholders' equity to average assets          9.51%                                  10.46%
--------------------------------------------------- ------------ ----------- --------- --- ------------- ----------- ----------
<FN>
(1) Annualized
</FN>
</TABLE>

Net interest and dividend income increased to $1,844,000 in the first quarter of
2000, from $1,689,000 in the 1999 first quarter.  The increase was  attributable
to a $5,460,000  increase in net  interest-earning  assets.  The  Company's  net
interest margin declined to 2.17%,  from 2.39% in the first quarter of 1999, due
to an  increase  in cost of funds and a decline in the yield on earning  assets.

                                       20
<PAGE>

The Company's cost of funds increased 10 basis points to 7.07% due to the rising
interest  rate  environment,  which  resulted in higher  rates being paid by the
Banks on all deposit accounts,  as well as an increase in certificate of deposit
accounts.  Such  accounts  pay a  higher  rate  than  savings  and  money-market
accounts.

The Company's yield on earning assets declined 13 basis points to 8.55% due to a
lower yield earned on the loan portfolio.  Despite the rising rate  environment,
the yield on the loan  portfolio  declined due to the very  competitive  lending
conditions,  which has resulted in originations of new loans with interest rates
that  are  lower  than  the  existing  portfolio,  as  well  as  prepayments  of
higher-yielding loans. This decline was offset partially by higher yields earned
on investment securities and other short-term investments.

Provision for Loan Loss Reserves

The provision is based on management's ongoing assessment of the adequacy of the
allowance for loan loss  reserves,  which takes into  consideration  a number of
factors,  including the level of outstanding  loans.  The provision  amounted to
$155,000 in the first  quarter,  compared  to  $112,000 in the first  quarter of
1999.

Noninterest Income

Noninterest  income  declined  to $162,000  in the first  quarter of 2000,  from
$414,000 in the first  quarter of 1999,  primarily  due to lower fee income from
the prepayment of loans.  Noninterest income includes fees from customer service
charges and income from mortgage lending activities, which are comprised of loan
prepayment  fees,  fees earned on expired loan  commitments,  and loan  service,
inspection and maintenance charges.

Noninterest Expenses

Noninterest  expenses increased to $1,251,000 in the first quarter of 2000, from
$901,000  in  the   comparable   quarter  of  1999.  The  increase  was  due  to
approximately  $210,000 of nonrecurring expenses associated with the acquisition
of Intervest  Corporation of New York and increased operating expenses resulting
from the  opening of  Intervest  National  Bank on April 1,  1999.  The new bank
required  the  addition of  employees  and  increased  occupancy  and  equipment
expenses.  The nonrecurring  expenses related to attorney fees, consulting fees,
printing  costs,  and stock  compensation  expense  resulting  from the grant of
50,000 shares of Class B common stock to the Chairman of the Holding Company for
his services with respect to the  development,  structuring and other activities
associated  with the merger.  Compensation  expense of $159,000  was recorded in
connection with the stock award.

Provision for Income Taxes

The  provision  for income  taxes  amounted to $210,000 in the first  quarter of
2000,  compared to $468,000 in the same period of 1999,  primarily  due to lower
pre-tax earnings. The Company's effective tax rate (inclusive of state and local
taxes)  amounted to 35% in the 2000 period,  compared to 43% in the 1999 period.
The decline in the  effective  tax rate  reflects  lower New York State and City
taxes generated from Intervest Corporation of New York and the Holding Company's
operations.

Cumulative Effect of Change in Accounting Principle

The change in  accounting  principle  represents  the  required  adoption of the
AICPA's  Statement of Position  (SOP) 98-5,  "Reporting on the Costs of Start-Up
Activities," which applies to all companies except as provided for therein.  The
SOP requires that all start-up  costs  (except for those that are  capitalizable
under other generally  accepted  accounting  principles) be expensed as incurred
for  financial  statement  purposes  effective  January 1, 1999.  Previously,  a
portion of start-up costs were generally capitalized and amortized over a period
of time. The adoption of this statement  resulted in the immediate  expensing on

                                       21
<PAGE>

January 1, 1999 of $193,000 in start-up costs incurred through December 31, 1998
in connection with organizing Intervest National Bank. A deferred tax benefit of
$65,000 was recorded in conjunction with this charge.

Year 2000 Issue

The Year 2000 issue is the result of computer  programs  that were written using
two digits rather than four digits to define the  applicable  year. As a result,
such  programs  may  recognize a date using "00" as the year 1900 instead of the
year 2000,  which could result in system failures or  miscalculations.  Prior to
January 1, 2000, the Company had completed all upgrades necessary to ensure that
its operating  and  financial  systems were Year 2000  compliant.  To date,  the
Company has not experienced any problems as a result of the Year 2000 issue, nor
does management expect it will.  Expenses incurred by the Company related to the
Year 2000 issue have not been material.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

Market  risk is the risk of loss  from  adverse  changes  in market  prices  and
interest rates.  The Company's  market risk arises  primarily from interest rate
risk inherent in its lending and deposit-taking  activities.  The Company has no
risk related to trading accounts, commodities or foreign exchange.

Management  actively  monitors  and manages  the  Company's  interest  rate risk
exposure.  The primary  objective  in managing  interest  rate risk is to limit,
within established  guidelines,  the adverse impact of changes in interest rates
on the Company's net interest income and capital,  while adjusting the Company's
asset-liability structure to obtain the maximum yield versus cost spread on that
structure.  Management  relies  primarily  on its  asset-liability  structure to
control  interest  rate risk.  However,  a sudden and  substantial  increase  in
interest rates could adversely impact the Company's earnings, to the extent that
the  interest  rates borne by assets and  liabilities  do not change at the same
speed, to the same extent, or on the same basis.  Management believes that there
have been no  significant  changes in the Company's  market risk exposure  since
December 31, 1999.

PART II. OTHER INFORMATION

ITEM 1.  Legal Proceedings

         Not Applicable

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

ITEM 3.  Defaults Upon Senior Securities

         Not Applicable

ITEM 4.  Submission of Matters to a Vote of Security Holders

(a)      A Special Meeting of Stockholders was held on March 10, 2000.
(b)      Not applicable
(c)      Pursuant to the Company's  charter and bylaws,  except for the election
         of directors,  Class A and Class B common stockholders vote together as
         a single class. The table that follows summarizes the voting results on
         each proposal that was submitted to the Company's common stockholders:

                                       22
<PAGE>
<TABLE>

                                          Proposal                                       For       Against    Abstained
         --------------------------------------------------------------------------- ------------ ---------- ------------
<S>      <C>
         1)       Merger of ICNY Acquisition Corporation into
                  Intervest Corporation of New York                                      1,940,174     25,944        5,500

         2)       Increase in the number of authorized shares of Class A Common          1,911,074     52,144        8,400

         3)       Grant of a stock bonus of 50,000 shares of Class B
                  Common Stock to the Chairman of the Board of Directors                 1,815,176    134,444       21,998
</TABLE>

(d)      Not Applicable

ITEM 5.  Other Information

         Not Applicable

ITEM 6.  Exhibits and Reports on Form 8-K

(a)      Exhibit Index (numbered in accordance with Item 601 of Regulation S-B)
         3 - Restated Certificate of Incorporation
         27 -  Financial Data Schedule  (For SEC Purposes only)
(b)      A Report on Form 8-K was filed on March 22,  2000, which  reported  the
         Company's completion of its acquisition of Intervest Corporation of New
         York.

                                   Signatures

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

INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES

Date:  May 11, 2000                         By:    /s/ Lowell S. Dansker
                                            ----------------------------
                                            Lowell S. Dansker,
                                            President and Treasurer
                                           (Chief Financial Officer)

Date:  May 11, 2000                         By:    /s/ Lawrence G. Bergman
                                            ------------------------------
                                            Lawrence G. Bergman, Vice President
                                            and Secretary