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

                     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 SEPTEMBER 30, 2001
                                               ------------------


                          Commission File No. 000-23377
                                              ---------

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


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

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

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

Class B Common Stock, $1.00 par value per share        355,000 Outstanding at November 1, 2001
-----------------------------------------------        ---------------------------------------
</TABLE>


================================================================================
<PAGE>

                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES

                                    FORM 10-Q
                               September 30, 2001

                                TABLE OF CONTENTS
<TABLE>
PART I. FINANCIAL INFORMATION                                                                                                  Page

     Item 1.      Financial Statements
         <S>                                                                                                                     <C>
         Condensed Consolidated Balance Sheets
            as of September 30, 2001 (Unaudited) and December 31, 2000 ........................................................  2

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

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

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

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

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

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

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

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

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

  PART II. OTHER INFORMATION

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

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

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

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

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

     Item 6.      Exhibits and Reports on Form 8-K ............................................................................ 22

    Signatures................................................................................................................. 22
</TABLE>

Private Securities Litigation Reform Act Safe Harbor Statement

The  Company is making  this  statement  in order to satisfy  the "Safe  Harbor"
provision contained in the Private Securities Litigation Reform Act of 1995. The
statements  contained  in this  report on Form 10-Q that are not  statements  of
historical fact may include forward-looking  statements that involve a number of
risks and  uncertainties.  Such  forward-looking  statements  are made  based on
management's  expectations  and beliefs  concerning  future events impacting the
Company and are subject to  uncertainties  and factors relating to the Company's
operations and economic  environment,  all of which are difficult to predict and
many of which are beyond the control of the  Company,  that could  cause  actual
results of the Company to differ  materially from those matters  expressed in or
implied by  forward-looking  statements.  The following  factors are among those
that could cause actual results to differ  materially  from the  forward-looking
statements:  changes in general economic, market and regulatory conditions,  the
development  of an  interest  rate  environment  that may  adversely  affect the
Company's  interest rate spread,  other income or cash flow anticipated from the
Company's operations, investment and lending activities; and changes in laws and
regulations affecting banks and bank holding companies.

                                       1
<PAGE>
<TABLE>

                Intervest Bancshares Corporation and Subsidiaries
                      Condensed Consolidated Balance Sheets

                                                                                                                 (Unaudited)
                                                                                                            At               At
                                                                                                       September 30,    December 31,
($ in thousands, except par value)                                                                          2001             2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                     <C>               <C>
ASSETS
Cash and due from banks                                                                                 $   5,004         $   5,016
Federal funds sold                                                                                         14,421            20,268
Commercial paper                                                                                           11,250            17,125
Other short-term investments                                                                                2,381               529
                                                                                                        ----------------------------
    Total cash and cash equivalents                                                                        33,056            42,938
Securities available for sale at estimated fair value                                                       8,239            74,789
Time deposits with banks                                                                                      350                 -
Securities held to maturity, net (estimated fair value of $70,637 and $20,978, respectively)               70,377            20,970
Federal Reserve Bank stock, at cost                                                                           654               605
Loans receivable (net of allowance for loan losses of $3,132 and $2,768, respectively)                    346,994           263,558
Accrued interest receivable                                                                                 3,212             2,961
Premises and equipment, net                                                                                 5,997             5,731
Deferred income tax asset                                                                                   1,062             1,105
Deferred debenture offering costs                                                                           3,108             2,835
Other assets                                                                                                2,667             1,435
------------------------------------------------------------------------------------------------------------------------------------
Total assets                                                                                            $ 475,716         $ 416,927
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Deposits:
   Noninterest-bearing demand deposit accounts                                                          $   4,029         $   5,035
   Interest-bearing deposit accounts:
      Checking (NOW) accounts                                                                               7,375             9,188
      Savings accounts                                                                                     23,442            15,743
      Money-market accounts                                                                                73,049            52,619
      Certificate of deposit accounts                                                                     233,830           217,656
                                                                                                        ----------------------------
Total deposit accounts                                                                                    341,725           300,241
Subordinated debentures payable                                                                            73,430            64,080
Accrued interest payable on debentures                                                                     10,680             8,733
Accrued interest payable on deposits                                                                          791               856
Mortgage escrow funds payable                                                                               7,144             3,397
Official checks outstanding                                                                                 1,611             2,281
Other liabilities                                                                                           1,308             1,111
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities                                                                                         436,689           380,699
------------------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock (300,000 shares authorized, none issued)                                                        -                 -
Class A common stock ($1.00 par value, 9,500,000 shares authorized,
    3,544,629 shares issued and outstanding at each date)                                                   3,545             3,545
Class B common stock ($1.00 par value, 700,000 shares authorized,
    355,000 shares issued and outstanding at each date)                                                       355               355
Additional paid-in-capital, common                                                                         18,995            18,975
Retained earnings                                                                                          15,993            13,605
Accumulated other comprehensive income:
    Net unrealized gain (loss) on securities available for sale, net of tax                                   139              (252)
------------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity                                                                                 39,027            36,228
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                                                              $ 475,716         $ 416,927
------------------------------------------------------------------------------------------------------------------------------------
         See accompanying notes to condensed consolidated financial statements.
</TABLE>


                                       2
<PAGE>
<TABLE>


                                           Intervest Bancshares Corporation and Subsidiaries
                                             Condensed Consolidated Statements of Earnings
                                                              (Unaudited)
                                                                                    Quarter Ended                Nine-Months Ended
                                                                                     September 30,                 September 30,
                                                                                ----------------------------------------------------
($ in thousands, except per share data)                                          2001            2000          2001           2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>            <C>            <C>            <C>
INTEREST AND DIVIDEND INCOME
Loans receivable                                                              $  8,050       $  6,538       $ 21,637       $ 18,214
Securities                                                                         463          1,462          2,643          4,413
Other interest-earning assets                                                      437            324          1,758            611
------------------------------------------------------------------------------------------------------------------------------------
Total interest and dividend income                                               8,950          8,324         26,038         23,238
------------------------------------------------------------------------------------------------------------------------------------

INTEREST EXPENSE
Deposits                                                                         4,193          4,074         12,968         10,387
Federal funds purchased                                                              -              -              -            146
Subordinated debentures                                                          1,821          1,869          5,722          6,374
------------------------------------------------------------------------------------------------------------------------------------
Total interest expense                                                           6,014          5,943         18,690         16,907
------------------------------------------------------------------------------------------------------------------------------------
Net interest and dividend income                                                 2,936          2,381          7,348          6,331
Provision for loan loss reserves                                                   264             47            364            292
------------------------------------------------------------------------------------------------------------------------------------
Net interest and dividend income after provision for loan loss                   2,672          2,334          6,984          6,039
------------------------------------------------------------------------------------------------------------------------------------

NONINTEREST INCOME
Customer service fees                                                               37             38            110            104
Income from mortgage lending activities                                            198            268            915            541
All other                                                                            2             32              6             33
------------------------------------------------------------------------------------------------------------------------------------
Total noninterest income                                                           237            338          1,031            678
------------------------------------------------------------------------------------------------------------------------------------

NONINTEREST EXPENSES
Salaries and employee benefits                                                     611            491          1,823          1,675
Occupancy and equipment, net                                                       277            286            859            835
Data processing                                                                    109             35            204             82
Advertising and promotion                                                            6              6             20             31
Professional fees and services                                                      72            100            269            320
Stationery, printing and supplies                                                   32             31            100            104
All other                                                                          206            132            691            415
------------------------------------------------------------------------------------------------------------------------------------
Total noninterest expenses                                                       1,313          1,081          3,966          3,462
------------------------------------------------------------------------------------------------------------------------------------
Earnings before taxes and extraordinary item                                     1,596          1,591          4,049          3,255
Provision for income taxes                                                         667            662          1,661          1,299
                                                                              ------------------------------------------------------
Earnings before extraordinary item                                                 929            929          2,388          1,956
Extraordinary item, net of tax                                                       -              -              -           (206)
------------------------------------------------------------------------------------------------------------------------------------
Net earnings                                                                  $    929       $    929       $  2,388       $  1,750
------------------------------------------------------------------------------------------------------------------------------------

Basic earnings per share:
   Earnings before extraordinary item                                         $   0.24       $   0.24       $   0.61       $   0.50
   Extraordinary item                                                                -              -              -          (0.05)
------------------------------------------------------------------------------------------------------------------------------------
   Net earnings per share                                                     $   0.24       $   0.24         $0. 61       $   0.45
------------------------------------------------------------------------------------------------------------------------------------

Diluted earnings per share:
   Earnings before extraordinary item                                         $   0.24       $   0.24       $   0.61       $   0.50
   Extraordinary item                                                                -              -              -          (0.05)
------------------------------------------------------------------------------------------------------------------------------------
   Net earnings per share                                                     $   0.24       $   0.24       $   0.61       $   0.45
------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
</TABLE>



                                       3
<PAGE>
<TABLE>


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





                                                                                                Quarter            Nine-Months
                                                                                                 Ended                Ended
                                                                                             September 30,         September 30,
                                                                                      ----------------------------------------------
($ in thousands)                                                                            2001       2000        2001        2000
------------------------------------------------------------------------------------------------------------------------------------

<S>                                                                                       <C>         <C>         <C>         <C>
Net earnings                                                                              $  929      $  929      $2,388      $1,750
------------------------------------------------------------------------------------------------------------------------------------
Net unrealized holding gains on securities arising during the period                          94           -         644           -
Provision for income taxes related to unrealized holding gains on securities                  46           -         253           -
------------------------------------------------------------------------------------------------------------------------------------
Other comprehensive income, net of tax                                                        48           -         391           -
------------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income, net of tax                                                    $  977      $  929      $2,779      $1,750
------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.

</TABLE>


















                                       4
<PAGE>
<TABLE>


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

                                                                                                          Nine-Months Ended
                                                                                                            September 30,
                                                                                                   -----------------------------
($ in thousands)                                                                                        2001              2000
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                   <C>               <C>
CLASS A COMMON STOCK
Balance at beginning of period                                                                        $  3,545          $  3,532
Issuance of 12,750 shares upon the exercise of warrants in 2000                                              -                13
--------------------------------------------------------------------------------------------------------------------------------
Balance at end of period                                                                                 3,545             3,545
--------------------------------------------------------------------------------------------------------------------------------

CLASS B COMMON STOCK
Balance at beginning of period                                                                             355               305
Issuance of 50,000 shares of restricted stock compensation in 2000                                           -                50
--------------------------------------------------------------------------------------------------------------------------------
Balance at end of period                                                                                   355               355
--------------------------------------------------------------------------------------------------------------------------------

ADDITIONAL PAID-IN-CAPITAL, COMMON
Balance at beginning of period                                                                          18,975            18,770
Compensation related to issuance of Class B stock warrants                                                  20                19
Issuance of 50,000 shares of restricted Class B stock compensation in 2000                                   -               109
Issuance of 12,750 shares upon the exercise of Class A stock warrants in 2000                                -                73
--------------------------------------------------------------------------------------------------------------------------------
Balance at end of period                                                                                18,995            18,971
--------------------------------------------------------------------------------------------------------------------------------

RETAINED EARNINGS
Balance at beginning of period                                                                          13,605            10,997
Net earnings for the period                                                                              2,388             1,750
--------------------------------------------------------------------------------------------------------------------------------
Balance at end of period                                                                                15,993            12,747
--------------------------------------------------------------------------------------------------------------------------------

ACCUMULATED OTHER COMPREHENSIVE INCOME, NET
Balance at beginning of period                                                                            (252)                -
Net change in accumulated other comprehensive income, net                                                  391                 -
--------------------------------------------------------------------------------------------------------------------------------
Balance at end of period                                                                                   139                 -
--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity at end of period                                                           $ 39,027          $ 35,618
--------------------------------------------------------------------------------------------------------------------------------
 See accompanying notes to condensed consolidated financial statements.

</TABLE>




                                       5
<PAGE>
<TABLE>


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

                                                                                                               Nine-Months Ended
                                                                                                                 September 30,
                                                                                                         ---------------------------
($ in thousands)                                                                                            2001              2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                      <C>               <C>
OPERATING ACTIVITIES
Net earnings                                                                                             $  2,388          $  1,750
Adjustments to reconcile net earnings to net cash provided by
      operating activities:
Depreciation and amortization                                                                                 353               334
Provision for loan loss reserves                                                                              364               292
Deferred income tax benefit                                                                                  (210)              (43)
Amortization of deferred debenture offering costs                                                             545               964
Compensation expense from awards of common stock and warrants                                                  20               178
Amortization of premiums, fees and discounts, net                                                          (1,777)           (1,171)
Net increase (decrease) in accrued interest payable on debentures                                           1,947            (1,135)
Net decrease in official checks outstanding                                                                  (670)             (464)
Net decrease in all other assets and liabilities                                                            2,544             1,196
------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                                                   5,504             1,901
------------------------------------------------------------------------------------------------------------------------------------

INVESTING ACTIVITIES
Increase in interest-earning time deposits with banks                                                        (350)           (2,050)
Maturities and calls of securities available for sale                                                      66,789                 -
Maturities and calls of securities held to maturity                                                        31,284            19,841
Purchases of securities held to maturity                                                                  (80,975)          (27,608)
Net increase in loans receivable                                                                          (85,229)          (49,146)
Purchases of Federal Reserve Bank stock, net                                                                  (49)              (88)
Purchases of premises and equipment, net                                                                     (619)             (127)
------------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                                                     (69,149)          (59,178)
------------------------------------------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES
Net increase in demand, savings, NOW and money market deposits                                             25,310             1,098
Net increase in certificates of deposit                                                                    16,174            79,556
Net increase in mortgage escrow funds payable                                                               3,747             2,757
Repayments of Federal funds purchased, net                                                                      -            (6,955)
Principal repayments of debentures                                                                         (1,400)          (24,000)
Proceeds from issuance of debentures, net of issuance costs                                                 9,932                 -
Proceeds from issuance of common stock, net of issuance costs                                                   -                86
------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities                                                                  53,763            52,542
------------------------------------------------------------------------------------------------------------------------------------

Net decrease in cash and cash equivalents                                                                  (9,882)           (4,735)
Cash and cash equivalents at beginning of period                                                           42,938            32,095

------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                                               $ 33,056          $ 27,360
------------------------------------------------------------------------------------------------------------------------------------

SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
   Interest                                                                                              $ 16,263          $ 17,207
   Income taxes
                                                                                                            1,896               451
Noncash activities:
   Accumulated other comprehensive income,
      change in unrealized gain on securities available for sale, net of tax                                  391                 -

------------------------------------------------------------------------------------------------------------------------------------
 See accompanying notes to condensed consolidated financial statements.
</TABLE>



                                       6
<PAGE>

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

Note 1 - General

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

The  condensed   consolidated  financial  statements  include  the  accounts  of
Intervest  Bancshares  Corporation (a bank holding company referred to by itself
as the  "Holding  Company")  and  its  subsidiaries,  Intervest  National  Bank,
Intervest  Bank, and Intervest  Corporation of New York. The 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.

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

The Bank conducts a full-service commercial banking business,  which consists of
attracting deposits from the general public and investing those funds,  together
with other sources of funds, primarily through the origination of commercial and
multifamily real estate loans, and through the purchase of security investments.
The  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 a mortgage investment company.

In the opinion of  management,  all material  adjustments  necessary  for a fair
presentation  of financial  condition and results of operations  for the interim
periods  presented  in this report have been made.  These  adjustments  are of a
normal recurring  nature.  The results of operations for the interim periods are
not  necessarily  indicative of results that may be expected for the entire year
or any other interim period. In preparing the condensed  consolidated  financial
statements, management is required to make estimates and assumptions that affect
the  reported  amounts of assets,  liabilities,  revenues and  expenses.  Actual
results could differ from those estimates.  Certain  reclassifications have been
made to prior period amounts to conform to the current periods' presentation.

Note 2 - Allowance for Loan Loss Reserves

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

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

                                           Quarter Ended       Nine-Months Ended
                                            September 30,        September 30,
                                           --------------      -----------------
($ in thousands)
                                           2001      2000        2001      2000
--------------------------------------------------------------------------------
Balance at beginning of period            $2,868    $2,738      $2,768    $2,493
Provision charged to operations              264        47         364       292
--------------------------------------------------------------------------------
Balance at end of period                  $3,132    $2,785      $3,132    $2,785
--------------------------------------------------------------------------------

                                       7
<PAGE>






                Intervest Bancshares Corporation and Subsidiaries
        Notes to Condensed Consolidated Financial Statements (Unaudited)
--------------------------------------------------------------------------------
Note 3 - Earnings Per Share (EPS)

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

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

<TABLE>

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:

                                                                                     Quarter Ended             Nine-Months Ended
                                                                                      September 30,              September 30,
                                                                              ------------------------------------------------------
                                                                                   2001          2000         2001          2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>           <C>           <C>           <C>
BASIC EARNINGS PER SHARE
Net earnings:
  Earnings before extraordinary item                                          $   929,000   $   929,000   $ 2,388,000   $ 1,956,000
  Extraordinary item (1)                                                                -             -             -      (206,000)
------------------------------------------------------------------------------------------------------------------------------------
 Net earnings                                                                 $   929,000   $   929,000   $ 2,388,000   $ 1,750,000
------------------------------------------------------------------------------------------------------------------------------------

Average number of common shares outstanding                                     3,899,629     3,896,365     3,899,629     3,879,500
Per share amounts:
  Earnings before extraordinary item                                          $      0.24   $      0.24   $      0.61   $      0.50

  Extraordinary item (1)                                                                -             -             -         (0.05)
------------------------------------------------------------------------------------------------------------------------------------
  Basic net earnings per share                                                $      0.24   $      0.24   $      0.61   $      0.45
------------------------------------------------------------------------------------------------------------------------------------

DILUTED EARNINGS PER SHARE
Adjusted net earnings for diluted earnings per share computation (2)          $   929,000   $   929,000   $ 2,388,000   $ 1,750,000
Average number of common shares outstanding for dilution:
  Common shares outstanding per above                                           3,899,629     3,896,365     3,899,629     3,879,500
  Potential dilutive shares resulting from exercise of warrants (3)                45,868             -             -             -
  Potential dilutive shares resulting from conversion of debentures (2)                 -             -             -             -
                                                                              ------------------------------------------------------
  Total average number of common shares outstanding                             3,945,497     3,896,365     3,899,629     3,879,500
                                                                              ------------------------------------------------------
Per share amounts:
  Earnings before extraordinary item                                          $      0.24   $      0.24   $      0.61   $      0.50

  Extraordinary item (1)                                                                -             -             -         (0.05)

------------------------------------------------------------------------------------------------------------------------------------
  Diluted net earnings per share                                              $      0.24   $      0.24   $      0.61   $      0.45
------------------------------------------------------------------------------------------------------------------------------------

<FN>
(1) Represents a charge, net of taxes, from the early retirement of debentures.

(2) Convertible  debentures  totaling  $6,930,000 and convertible (at $14.00 per
    share in 2001 and $12.50  per share in 2000) into Class A common  stock were
    excluded from all diluted EPS computations because they were not dilutive.

(3) A total of 1,134,000  and  2,650,218 of common stock  warrants with exercise
    prices  ranging  from $6.67 to $16.00  were not  included in the quarter and
    nine-month computation of diluted EPS for 2001,  respectively,  because they
    were not dilutive.  A total of 2,650,000 common stock warrants with exercise
    prices  ranging  from $6.67 to $15.00  were not  included in the quarter and
    nine-month  computation  of  diluted  EPS for  2000  because  they  were not
    dilutive.
</FN>
</TABLE>



                                       8
<PAGE>


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

Note 4 - Regulatory Capital

Intervest  National  Bank is  required to maintain  certain  minimum  regulatory
capital requirements.

<TABLE>

The  following  is a summary at  September  30, 2001 of the  minimum  regulatory
capital requirements and the actual capital of the Bank on a percentage basis:

                                                                           Actual         Minimum          To Be Considered
                                                                           Ratios         Requirement      Well Capitalized
                                                                           ------         -----------      ----------------

<S>                                                                        <C>               <C>              <C>
Total capital to risk-weighted assets                                      10.78%            8.00%            10.00%
Tier 1 capital to risk-weighted assets                                      9.76%            4.00%             6.00%
Tier 1 capital to total average assets - leverage ratio                     9.45%            4.00%             5.00%
</TABLE>


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















                                       9
<PAGE>




                Intervest Bancshares Corporation and Subsidiaries

               Review by Independent Certified Public Accountants

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

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













                                       10
<PAGE>






          Report on Review by Independent Certified Public Accountants



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

     We have reviewed the accompanying  condensed  consolidated balance sheet of
Intervest  Bancshares   Corporation  and  Subsidiaries  (the  "Company")  as  of
September  30,  2001,  and the  related  condensed  consolidated  statements  of
earnings and  comprehensive  income for the three- and nine-month  periods ended
September 30, 2001 and 2000, and the related condensed  consolidated  statements
of changes in  stockholders'  equity and cash flows for the  nine-month  periods
ended  September  30, 2001 and 2000  included in this  report.  These  financial
statements are the responsibility of the Company's management.

     We were furnished with the report of other  accountants on their reviews of
the interim  financial  information of Intervest  Corporation of New York, whose
total  assets  as of  September  30,  2001  constituted  17.3%  of  the  related
consolidated  total, and whose net interest income,  noninterest  income and net
earnings for the three- and nine-month  periods then ended,  constituted  13.2%,
16.9%,  and  14.4%;  and 9.1%,  41.7%,  and 10.9%,  respectively,  and whose net
interest  income,  noninterest  income  and  net  earnings  for the  three-  and
nine-month periods ended September 30, 2000, constituted 13.4%, 60.4% and 22.3%;
and 10.7%, 42.5% and 1.3%, respectively, of the related consolidated totals.

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

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

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


/s/ HACKER, JOHNSON & SMITH PA
------------------------------
HACKER, JOHNSON & SMITH PA
Tampa, Florida
November 7, 2001




                                       11
<PAGE>


          Report on Review by Independent Certified Public Accountants



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

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

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

     Based on our review,  we are not aware of any material  modifications  that
should be made to the accompanying  condensed  consolidated financial statements
for them to be in conformity with accounting  principles  generally  accepted in
the United States of America.

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



/s/ Richard A. Eisner & Company, LLP
------------------------------------
Richard A. Eisner & Company, LLP
New York, New York
October 18, 2001







                                       12
<PAGE>


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

                                     General
                                     -------

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

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

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

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

Intervest  Corporation of New York and its wholly owned subsidiaries,  Intervest
Distribution  Corporation  and  Intervest  Realty  Servicing  Corporation, is  a
mortgage  investment  company located in Rockefeller Center in New York City. It
is engaged in the real estate  business,  including the origination and purchase
of real estate mortgage loans, consisting of first mortgage, junior mortgage and
wraparound mortgage loans.

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

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

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

Overview
--------

Total assets at September 30, 2001 increased to $475,716,000,  from $416,927,000
at December 31, 2000.  Total  liabilities  at  September  30, 2001  increased to
$436,689,000,  from  $380,699,000  at December  31, 2000.  Stockholders'  equity


                                       13
<PAGE>

increased to  $39,027,000  at September 30, 2001,  from  $36,228,000 at year-end
2000.  Book value per common  share  rose to $10.01 per share at  September  30,
2001, from $9.29 at December 31, 2000.
<TABLE>

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

                                                                        Intervest     Intervest      Inter-
                                                             Holding     National    Corporation     company
($ in thousands)                                             Company      Bank       of New York    Balances    Consolidated
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>          <C>          <C>           <C>            <C>
Cash and cash equivalents                                 $   4,766    $  18,606    $  13,692     $  (4,008)     $  33,056
Time deposits with banks                                          -          250          100             -            350
Securities available for sale at estimated fair value             -        8,239            -             -          8,239
Securities held to maturity, net                                  -       70,377            -             -         70,377
Federal Reserve Bank stock                                        -          654            -             -            654
Loans receivable, net of deferred fees                        5,907      279,483       64,736             -        350,126
Allowance for loan loss reserves                                (30)      (3,102)           -             -         (3,132)
All other assets                                             41,122       11,421        3,819       (40,316)        16,046
------------------------------------------------------------------------------------------------------------------------------------
Total assets                                              $  51,765    $ 385,928    $  82,347     $ (44,324)     $ 475,716
------------------------------------------------------------------------------------------------------------------------------------
Deposits                                                  $       -    $ 345,819    $       -     $  (4,094)     $ 341,725
Debentures and accrued interest payable                      12,559            -       71,551             -         84,110
All other liabilities                                           179        9,354        1,266            55         10,854
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities                                            12,738      355,173       72,817        (4,039)       436,689
------------------------------------------------------------------------------------------------------------------------------------
Stockholders' equity                                         39,027       30,755        9,530       (40,285)        39,027
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                $  51,765    $ 385,928    $  82,347     $ (44,324)     $ 475,716
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>

A comparison  of the  consolidated  balance  sheets as of September 30, 2001 and
December 31, 2000 follows:


                                                                               At September 30, 2001          At December 31, 2000
                                                                              Carrying        % of          Carrying       % of
($ in thousands)                                                               Value      Total Assets       Value     Total Assets
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>              <C>          <C>                <C>
Cash and cash equivalents                                                    $ 33,056         6.9%         $ 42,938           10.3%
Time deposits with banks                                                          350         0.1                 -              -
Securities available for sale at estimated fair value                           8,239         1.7            74,789           17.9
Securities held to maturity, net                                               70,377        14.8            20,970            5.0
Federal Reserve Bank stock                                                        654         0.2               605            0.2
Loans receivable,  net of deferred fees and loan loss reserves                346,994        72.9           263,558           63.2
All other assets                                                               16,046         3.4            14,067            3.4
------------------------------------------------------------------------------------------------------------------------------------
Total assets                                                                 $475,716       100.0%         $416,927          100.0%
------------------------------------------------------------------------------------------------------------------------------------
Deposits                                                                     $341,725        71.8%         $300,241           72.0%
Debentures payable                                                             73,430        15.4            64,080           15.4
Accrued interest payable on debentures                                         10,680         2.3             8,733            2.1
All other liabilities                                                          10,854         2.3             7,645            1.8
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities                                                             436,689        91.8           380,699           91.3
------------------------------------------------------------------------------------------------------------------------------------
Stockholders' equity                                                           39,027         8.2            36,228            8.7
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                                   $475,716       100.0%         $416,927          100.0%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


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

Cash and cash  equivalents  decreased to $33,056,000 at September 30, 2001, from
$42,938,000  at December  31,  2000,  due to a lower level of Federal  funds and
short-term commercial paper investments outstanding.

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



                                       14
<PAGE>

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

Securities that are held for indefinite periods of time which management intends
to use as part of its asset/liability  management strategy,  or that may be sold
in response to changes in interest  rates or other  factors,  are  classified as
available for sale and are carried at estimated fair value. Securities available
for  sale  (which  consist  of  fixed-rate  debt  obligations  of  various  U.S.
government  agencies)  decreased  to  $8,239,000  at September  30,  2001,  from
$74,789,000 at December 31, 2000.  The decrease was due to early  redemptions by
various  agencies brought about from the steady decline in market interest rates
during 2001. The resulting  proceeds from the redemptions were used to partially
fund  new  mortgage  loan  originations  and the  remainder  was  reinvested  in
shorter-term U.S. government agency securities classified as held to maturity.

At September  30,  2001,  the  portfolio  consisted  of U.S.  government  agency
securities with a weighted-average  yield of 5.57% and maturing at various times
through 2005.  Approximately  $1,000,000 of the securities have terms that allow
the  issuer  the  right to call or  prepay  its  obligation  without  prepayment
penalty.  At September 30, 2001,  the portfolio had an unrealized  gain,  net of
tax, of $139,000.  compared to an  unrealized  loss,  net of tax, of $252,000 at
December 31, 2000. Unrealized gains and losses on securities available for sale,
net  of  related  income  taxes,  are  reported  as  a  separate   component  of
comprehensive income and included in stockholders' equity.

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

Securities  for which the Company has the intent and ability to hold to maturity
are  classified  as held to maturity and carried at amortized  cost.  Securities
held to  maturity  totaled  $70,377,000  at  September  30,  2001,  compared  to
$20,970,000  at  December  31,  2000.  The  increase  was  due to new  purchases
exceeding  maturities during the year. The portfolio consists of short-term U.S.
government  agency  securities with a  weighted-average  yield of  approximately
3.05% and an average term of approximately one year.

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

In order for the Bank to be a member of the Federal Reserve Banking System,  the
Bank  maintains an investment in the capital stock of the Federal  Reserve Bank,
which pays a dividend that is currently 6%. The  investment,  which  amounted to
$654,000 at September  30, 2001 and  $605,000 at December  31, 2000,  fluctuates
based on the Bank's capital level.

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

Loans receivable, net of deferred fees and the allowance for loan loss reserves,
increased to $346,994,000  at September 30, 2001, from  $263,558,000 at December
31, 2000. The growth  reflected new  originations  of commercial real estate and
multifamily mortgage loans, partially offset by principal repayments. Commercial
real estate and multifamily real estate properties  collateralized almost all of
the loans in the Company's loan portfolio.

At  September  30,  2001,  the  allowance  for loan loss  reserves  amounted  to
$3,132,000,   compared  to  $2,768,000  at  December  31,  2000.  The  allowance
represented 0.89% of total loans outstanding at September 30, 2001,  compared to
1.04% at December 31, 2000.  At  September  30, 2001 and December 31, 2000,  the
Company did not have any loans on a nonaccrual status or classified as impaired.
The Company  monitors its loan portfolio to determine the  appropriate  level of
the  allowance for loan loss reserves  based on various  factors.  These factors
include:  the type and level of loans outstanding;  volume of loan originations;
overall  portfolio  quality;   loan  concentrations;   specific  problem  loans,
historical  chargeoffs and recoveries;  adverse  situations which may affect the
borrowers'  ability to repay;  and  management's  assessment  of the current and
anticipated economic conditions in the Company's lending regions.

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

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

                                                       At               At
                                                  September 30,     December 31,
($ in thousands)                                      2001             2000
--------------------------------------------------------------------------------
Accrued interest receivable                          $3,212            $2,961
Loans fee receivable                                  2,403             1,276
Premises and equipment, net                           5,997             5,731
Deferred income tax asset                             1,062             1,105
Deferred debenture offering costs,net                 3,108             2,835
All other                                               264               159
--------------------------------------------------------------------------------
                                                    $16,046           $14,067
--------------------------------------------------------------------------------

                                       15
<PAGE>

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

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

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

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

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

Deposit  liabilities  increased  to  $341,725,000  at September  30, 2001,  from
$300,241,000 at December 31, 2000. At September 30, 2001, certificate of deposit
accounts totaled $233,830,000 and demand deposit,  savings, NOW and money market
accounts  aggregated  $107,895,000.  The same  categories  of  deposit  accounts
totaled  $217,656,000  and  $82,585,000,  respectively,  at December  31,  2000.
Certificate of deposit  accounts  represented 68% of total deposits at September
30, 2001, compared to 72% at year-end 2000.

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

At  September  30,  2001,  total  debentures  payable  amounted to  $73,430,000,
compared to  $64,080,000  at December 31, 2000. The increase was due to the sale
of  additional   debentures  by  Intervest  Corporation  of  New  York  totaling
$7,250,000  (as part of its normal  funding of its  operations)  and the sale of
$3,500,000 of debentures by Intervest Bancshares Corporation for working capital
purposes.  The sale of these  debentures was partially offset by the maturity on
January  1,  2001,  of  $1,400,000  of  Intervest   Corporation  of  New  York's
debentures.  The sale of debentures,  after underwriter's  commissions and other
issuance costs, resulted in net proceeds of $6,670,000 for Intervest Corporation
of New York and $3,260,000 for the Holding Company.

At September 30, 2001,  Intervest  Corporation  of New York had  $63,000,000  of
debentures  payable  outstanding  and the  Holding  Company had  $10,430,000  of
debentures  payable  outstanding,  of which $6,930,000 were convertible into the
Holding Company's Class A common stock. At September 30, 2001,  accrued interest
payable on  debentures  amounted  to  $10,680,000,  compared  to  $8,733,000  at
year-end 2000.  Nearly all of the accrued interest payable at September 30, 2001
is due  and  payable  at the  maturity  of  various  debentures.  For a  further
discussion  of  the  debentures,  including  conversion  prices  and  redemption
premiums,  see note 8 to the consolidated  financial  statements included in the
Company's Annual Report to Stockholders on Form 10-K for the year ended December
31, 2000.

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

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

                                                   At                   At
                                              September 30,        December 31,
($ in thousands)                                  2001                 2000
--------------------------------------------------------------------------------
Accrued interest payable on deposits           $   791               $  856
Mortgage escrow funds payable                    7,144                3,397
Official checks outstanding                      1,611                2,281
All other                                        1,308                1,111
--------------------------------------------------------------------------------
                                               $10,854               $7,645
--------------------------------------------------------------------------------

                                       16
<PAGE>


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

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

Stockholders'  equity  increased  to  $39,027,000  at September  30, 2001,  from
$36,228,000  at December  31,  2000.  The  increase  was due to net  earnings of
$2,388,000  and a  $391,000  increase  in  unrealized  gains,  net  of  tax,  on
securities  available for sale.  Intervest  National Bank is a  well-capitalized
institution  as  defined  by  FDIC  regulations.  See  note 4 to  the  condensed
consolidated financial statements herein for the Bank's capital ratios.

                         Liquidity and Capital Resources
                         -------------------------------

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

At  September  30, 2001,  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 primary objective of the Company's
asset/liability  management strategy is to limit, within established guidelines,
the adverse  impact of changes in interest  rates on the  Company's net interest
income  and  capital.  The  Company  uses "gap  analysis,"  which  measures  the
difference between interest-earning assets and interest-bearing liabilities that
mature or reprice  within a given time  period,  to monitor  its  interest  rate
sensitivity.  At  September  30,  2001,  the  Company's  one-year  interest-rate
sensitivity gap was a positive $6,520,000,  or 1.4% of total assets, compared to
a negative  $12,411,000,  or 3%, at December 31, 2000. The change in the gap was
largely due to the early  redemptions  of securities  available for sale by U.S.
government  agencies and the resulting proceeds being reinvested in shorter-term
securities and variable-rate loans. In computing the gap, the Company treats its
interest  checking,  money market and savings  deposit  accounts as  immediately
repricing.  For a further  discussion  of interest  rate risk and gap  analysis,
including all of the assumptions  used in developing the Company's  one-year gap
position,  see the Company's  2000 Annual Report to  Stockholders  on Form 10-K,
pages 30 through 32.

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

Overview
--------

Consolidated net earnings for the third quarter of 2001 amounted to $929,000, or
$0.24 per fully diluted share, unchanged from the third quarter of 2000. Results
for the 2001 period  reflected growth in the Company's net interest and dividend
income of  $555,000,  which was offset by a  $232,000  increase  in  noninterest
expenses,  a $217,000 increase in the provision for loan loss reserves primarily
due to growth in the loan  portfolio,  and a decrease of $101,000 in noninterest
income.



                                       17
<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 following  table provides  information on average  assets,  liabilities  and
stockholders' equity;  yields earned on interest-earning  assets; and rates paid
on interest-bearing  liabilities for the periods indicated. The yields and rates
shown are based on a computation  of  income/expense  (including any related fee
income  or  expense)  for  each  period  divided  by  average   interest-earning
assets/interest-bearing  liabilities  during each period.  Average  balances are
derived mainly from daily balances.  Net interest margin is computed by dividing
net interest and dividend income by the average of total interest-earning assets
during each period.
<TABLE>


                                                                                  Quarter Ended
                                                  ----------------------------------------------------------------------------------
                                                          September 30, 2001                       September 30, 2000
                                                  ----------------------------------------------------------------------------------
                                                     Average      Interest      Yield/         Average        Interest      Yield/
($ in thousands)                                     Balance     Inc./Exp.       Rate          Balance       Inc./Exp.       Rate
------------------------------------------------------------------------------------------------------------------------------------

Assets
Interest-earning assets:
<S>                                                 <C>           <C>            <C>          <C>            <C>             <C>
   Loans                                            $ 337,545     $   8,050      9.46%        $ 257,592      $   6,538     10.10%
   Securities                                          44,129           463      4.16            97,514          1,462      5.96
   Other interest-earning assets                       50,341           437      3.44            19,671            324      6.55
------------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets                         432,015     $   8,950      8.22%          374,777      $   8,324      8.84%
------------------------------------------------------------------------------------------------------------------------------------
Noninterest-earning assets                             11,897                                    13,378
------------------------------------------------------------------------------------------------------------------------------------
Total assets                                        $ 443,912                                 $ 388,155
------------------------------------------------------------------------------------------------------------------------------------

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
   Interest checking deposits                       $   8,036     $      62      3.06%        $   7,714      $      58        2.99%
   Savings deposits                                    20,292           206      4.03            17,341            233        5.35
   Money market deposits                               67,070           682      4.03            51,294            701        5.44
   Certificates of deposit                            216,820         3,243      5.93           193,640          3,082        6.33
                                                    ---------     ---------      ----          --------       --------    ----------
   Total deposit accounts                             312,218         4,193      5.33           269,989          4,074        6.00
   Debentures and accrued interest payable             78,372         1,821      9.22            67,336          1,869       11.04
------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities                    390,590     $   6,014      6.11%          337,325      $   5,943        7.01%
------------------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing deposits                            5,134                                     6,766
Noninterest-bearing liabilities                         9,785                                     8,940
Stockholders' equity                                   38,403                                    35,124
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity          $ 443,912                                 $ 388,155
------------------------------------------------------------------------------------------------------------------------------------
Net interest and dividend income/spread                           $   2,936      2.11%                       $   2,381        1.83%
------------------------------------------------------------------------------------------------------------------------------------
Net interest-earning assets/margin                  $  41,425                    2.70%        $  37,452                       2.53%
------------------------------------------------------------------------------------------------------------------------------------
Ratio of total interest-earning assets
   to total interest-bearing liabilities                 1.11x                                     1.11x
------------------------------------------------------------------------------------------------------------------------------------
Other Ratios:
  Return on average assets (1)                           0.84%                                     0.96%
  Return on average equity (1)                           9.68%                                    10.58%
  Noninterest expense to average assets (1)              1.18%                                     1.11%
  Efficiency ratio                                      41.38%                                    39.76%
  Average stockholders' equity to average assets         8.65%                                     9.05%
------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Annualized
</FN>
</TABLE>

Net interest and dividend income increased to $2,936,000 in the third quarter of
2001,   from  $2,381,000  in  the  third  quarter  of  2000.  The  increase  was
attributable to growth of $57,238,000 in the Company's average  interest-earning
assets  and an  increase  in the net  interest  margin  from  2.53% in the third
quarter of 2000, to 2.70% in the third quarter of 2001.

The growth in earning  assets was primarily due to  $79,953,000  in new mortgage
loans,  funded  by  $42,229,000  of  new  deposits,   $11,036,000  of  increased
debentures  and  interest  payable and a net  reduction  in  security  and other
short-term investments aggregating $22,715,000.



                                       18
<PAGE>

The increase in the margin was due to the Company's cost of funds  decreasing at
a faster pace than its yield  earned on  interest-earning  assets in a declining
interest rate  environment.  The yield on  interest-earning  assets decreased 62
basis points to 8.22% in the third quarter of 2001 due to lower yields earned on
interest-earning assets. The cost of funds decreased 90 basis points to 6.11% in
the third  quarter  of 2001 due to lower  rates  paid on  deposit  accounts  and
variable-rate debentures.

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

In the third quarter of 2001,  the Company  recorded a provision for loan losses
of $264,000,  compared to a provision  of $47,000 in the third  quarter of 2000.
The provision for loan loss reserves is based on management's ongoing assessment
of the  adequacy  of the  allowance  for loan loss  reserves,  which  takes into
consideration  a number of factors as discussed  on page 15 of this report.  The
increase was primarily due to the growth in the loan portfolio.

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

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

Noninterest  income  decreased  to $237,000 in the third  quarter of 2001,  from
$338,000  in the third  quarter of 2000,  due to lower  income and fees from the
prepayment of mortgage loans.  The number of instances of prepayment of mortgage
loans tends to increase during periods of declining  interest rates and tends to
decrease during periods of increasing  interest  rates,  although the amount and
timing  of  prepayments,  if any  cannot  be  predicted.  Many of the  Company's
mortgage loans include prepayment provisions,  and others prohibit prepayment of
indebtedness entirely.

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

Noninterest  expenses increased to $1,313,000 in the third quarter of 2001, from
$1,081,000 in the comparable quarter of 2000. The increase was due to a $120,000
increase in compensation and benefits (of which $97,000 was the result of salary
increases,  additional staff and higher benefit expenses,  and the remainder due
to a lower amount of SFAS No. 91 deferred origination costs), a $74,000 increase
in data processing  expenses (due to growth in Intervest National Bank's assets)
and a $74,000  increase  in all other  noninterest  expenses  (partially  due to
nonrecurring  expenses of $20,000  associated  with the merger of Intervest Bank
into  Intervest  National  Bank and $8,000 of higher FDIC  insurance  premiums).
These increases were partially offset by lower professional fees and expenses of
$28,000.

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

The  provision  for income  taxes  amounted to $667,000 in the third  quarter of
2001, compared to $662,000 in the third quarter of 2000. The Company's effective
tax rate  (inclusive  of state and local  taxes)  amounted  to 41.8% in the 2001
period, compared to 41.6% in the 2000 period.

Comparison of Results of Operations for the Nine-Months Ended September 30, 2001
--------------------------------------------------------------------------------
and 2000
--------

Overview
--------

Consolidated  net earnings for the first nine months of 2001 increased  $638,000
to $2,388,000,  or $0.61 per fully diluted share, from $1,750,000,  or $0.45 per
fully  diluted  share,  in the same  period  of  2000.  Increased  earnings  was
primarily due to growth in net interest and dividend income of $1,017,000 and an
increase of  $353,000  in  noninterest  income  (due to the early  repayment  of
mortgage  loans).  These items were partially  offset by a $504,000  increase in
noninterest  expenses (which included $175,000 of nonrecurring  costs associated
with the merger of Intervest Bank into Intervest  National Bank), and a $362,000
increase in the provision for income taxes. Results for the 2000 period included
an extraordinary charge, net of taxes, of $206,000, in connection with the early
retirement  of  various  debentures  by  the  Company's  subsidiary,   Intervest
Corporation of New York.

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

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



                                       19
<PAGE>

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

<TABLE>

                                                                               Nine-Months Ended
                                                  ----------------------------------------------------------------------------------
                                                          September 30, 2001                       September 30, 2000
                                                  ----------------------------------------------------------------------------------
                                                      Average      Interest      Yield/         Average      Interest     Yield/
($ in thousands)                                      Balance      Inc./Exp.      Rate          Balance     Inc./Exp.      Rate
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>           <C>              <C>        <C>          <C>             <C>
Assets
Interest-earning assets:
   Loans                                            $ 299,407     $  21,637        9.66%      $ 244,990    $  18,214       9.93%
   Securities                                          66,224         2,643        5.34          99,442        4,413       5.93
   Other interest-earning assets                       53,924         1,758        4.36          13,209          611       6.18
------------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets                         419,555     $  26,038        8.30%        357,641    $  23,238       8.68%
------------------------------------------------------------------------------------------------------------------------------------
Noninterest-earning assets                             11,721                                    13,787
------------------------------------------------------------------------------------------------------------------------------------
Total assets                                        $ 431,276                                 $ 371,428
------------------------------------------------------------------------------------------------------------------------------------

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
   Interest checking deposits                       $   7,373     $     165        2.99%      $   7,589    $     172       3.03%
   Savings deposits                                    18,079           591        4.37          17,545          678       5.16
   Money market deposits                               61,448         2,042        4.44          51,900        2,074       5.34
   Certificates of deposit                            217,429        10,170        6.25         163,823        7,463       6.09
                                                    --------------------------------------------------------------------------------
   Total deposit accounts                             304,329        12,968        5.70         240,857       10,387       5.76
   Federal funds purchased                                  -             -           -           3,321          146       5.87
   Debentures and accrued interest payable             75,586         5,722       10.12          78,514        6,374      10.84
------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities                    379,915     $  18,690        6.58%        322,692    $  16,907       7.00%
------------------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing deposits                            6,586                                     5,980
Noninterest-bearing liabilities                         7,312                                     8,297
Stockholders' equity                                   37,463                                    34,459
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity          $ 431,276                                 $ 371,428
------------------------------------------------------------------------------------------------------------------------------------
Net interest and dividend income/spread                           $   7,348        1.72%                   $   6,331       1.68%
------------------------------------------------------------------------------------------------------------------------------------
Net interest-earning assets/margin                  $  39,640                      2.34%      $  34,949                    2.36%
------------------------------------------------------------------------------------------------------------------------------------
Ratio of total interest-earning assets
   to total interest-bearing liabilities                 1.10x                                     1.11x
------------------------------------------------------------------------------------------------------------------------------------
Other Ratios:
  Return on average assets (1)                           0.74%                                     0.63%
  Return on average equity (1)                           8.50%                                     6.77%
  Noninterest expense to average assets (1)              1.23%                                     1.24%
  Efficiency ratio                                      47.33%                                    49.39%
  Average stockholders' equity to average assets         8.69%                                     9.28%
------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Annualized
</FN>
</TABLE>


Net interest  and dividend  income  increased  to  $7,348,000  in the first nine
months of 2001,  from  $6,331,000 in the first nine months of 2000. The increase
was   attributable   to  growth  of   $61,914,000   in  the  Company's   average
interest-earning  assets, funded by increased deposits.  The net interest margin
was relatively  unchanged at 2.34% in the first nine months of 2001, compared to
2.36% in the first nine months of 2000.

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

In the first nine  months of 2001,  the Company  recorded a  provision  for loan
losses of $364,000, compared to a provision of $292,000 in the first nine months
of 2000.  The  provision  is based on  management's  ongoing  assessment  of the


                                       20
<PAGE>

adequacy of the allowance for loan loss reserves, which takes into consideration
a number of factors as  discussed  on page 15 of this  report.  The increase was
primarily due to the growth in the loan portfolio.

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

Noninterest  income  increased to  $1,031,000  in the first nine months of 2001,
from $678,000 in the first nine months of 2000. 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.  The increase from the
prior year  period  was  primarily  due to higher  prepayment  fee  income  from
mortgage loans.

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

Noninterest  expenses  increased to $3,966,000 in the first nine months of 2001,
from  $3,462,000 in the first nine months of 2000.  Expenses for the 2001 period
include  $175,000  of  nonrecurring  expenses  associated  with  the  merger  of
Intervest  Bank into  Intervest  National  Bank.  Expenses  for the 2000  period
include  approximately  $210,000 of nonrecurring expenses (consisting of $51,000
of attorney  fees,  consulting  fees and printing  costs,  and $159,000 of stock
compensation)  associated with the  acquisition of Intervest  Corporation of New
York.

Absent the aforementioned  expenses,  noninterest expenses totaled $3,791,000 in
the first nine months of 2001,  compared to  $3,252,000 in the first nine months
of 2000.  The  increase  was due to a  $307,000  increase  in  compensation  and
benefits (of which $170,000 was the result of salary increases, additional staff
and increased benefit expenses,  and the remainder due to a lower amount of SFAS
No. 91 deferred  origination  costs),  a $122,000  increase  in data  processing
expenses  (due to  Intervest  National  Bank's  growth in assets)  and a $24,000
increase in occupancy  expenses (due to higher occupancy taxes),  and a $101,000
increase in all other noninterest  expenses  (primarily due to $40,000 of higher
FDIC  insurance  premiums).  These  increases  were  partially  offset  by lower
advertising and promotion expenses of $11,000.

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

The provision  for income taxes  amounted to $1,661,000 in the first nine months
of 2001,  compared to $1,299,000 in the first nine months of 2000.  The increase
was almost entirely due to higher pre-tax earnings.  The Company's effective tax
rate  (inclusive of state and local taxes) amounted to 41.0% in the 2001 period,
compared to 39.9% in the 2000 period.

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

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


ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

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

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


                                       21
<PAGE>

have been no  significant  changes in the Company's  market risk exposure  since
December 31, 2000.







PART II. OTHER INFORMATION

ITEM 1.  Legal Proceedings
         Not Applicable

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

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

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

ITEM 5.  Other Information
         Not Applicable


ITEM 6.  Exhibits and Reports on Form 8-K

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

                                   Signatures

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


INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES

Date: November 12, 2001        By: /s/ Lowell S. Dansker
                               -------------------------
                               Lowell S. Dansker, President and Treasurer
                               (Chief Financial Officer)


Date: November 12, 2001        By: /s/ Lawrence G. Bergman
                               ---------------------------
                               Lawrence G. Bergman, Vice President and Secretary



                                       22