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

                     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, 2003
                                               ------------------


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

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


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


                        10 ROCKEFELLER PLAZA, SUITE 1015
                          NEW YORK, NEW YORK 10020-1903
                    (Address of principal executive offices)
                    ----------------------------------------

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


Indicate  by  check  mark  whether  the  registrant:  (1)  has filed all reports
required  to  be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of  1934  during  the  past  12  months  (or  for  such  shorter period that the
registrant  was required to file such reports), and (2) has been subject to such
filing  requirements  for  the  past  90  days:
YES  XX  NO.
     --       --

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

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

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

     Class A Common Stock, $1.00 par value per share     4,762,986 Outstanding at October 17, 2003
     -----------------------------------------------     -----------------------------------------

     Class B Common Stock, $1.00 par value per share       385,000 Outstanding at October 17, 2003
     -----------------------------------------------     -----------------------------------------
</TABLE>




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


<PAGE>
<TABLE>
<CAPTION>
                          INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
                                              FORM 10-Q
                                          SEPTEMBER 30, 2003
                                          TABLE OF CONTENTS


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

               Condensed Consolidated Balance Sheets
                  as of September 30, 2003 (Unaudited) and December 31, 2002 . . . . . . . . . . .  2

               Condensed Consolidated Statements of Earnings (Unaudited)
                  for the Quarters and Nine-Months Ended September 30, 2003 and 2002 . . . . . . .  3

               Condensed Consolidated Statements of Comprehensive Income (Unaudited)
                  for the Quarters and Nine-Months Ended September 30, 2003 and 2002 . . . . . . .  4

               Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
                  for the Nine-Months Ended September 30, 2003 and 2002. . . . . . . . . . . . . .  5

               Condensed Consolidated Statements of Cash Flows (Unaudited)
                  for the Nine-Months Ended September 30, 2003 and 2002. . . . . . . . . . . . . .  6

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

               Review by Independent Certified Public Accountants. . . . . . . . . . . . . . . . . 12

               Report on Reviews by Independent Certified Public Accountants . . . . . . . . . . . 13

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

          ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. . . . . . . . . . . 25

          ITEM 4.  CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

     PART II. OTHER INFORMATION

          ITEM 1.  LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

          ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . 26

          ITEM 3.  DEFAULTS UPON SENIOR SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . 26

          ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . . . . . . . . . . 26

          ITEM 5.  OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

          ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K. . . . . . . . . . . . . . . . . . . . . . . . 26

     SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
</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>
<CAPTION>
                                       INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
                                              CONDENSED CONSOLIDATED BALANCE SHEETS


                                                                                                  SEPTEMBER 30,   DECEMBER 31,
($in thousands, except par value)                                                                     2003            2002
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                              <C>              <C>
ASSETS                                                                                               (Unaudited)
Cash and due from banks                                                                          $         7,838  $      10,351
Federal funds sold                                                                                        24,267          9,114
Commercial paper                                                                                           3,275          7,950
Other short-term investments                                                                               2,315          3,434
    Total cash and cash equivalents                                                                       37,695         30,849
                                                                                                 ---------------  -------------
Time deposits with banks                                                                                       -          2,000
Securities held to maturity, net (estimated fair value of $134,559 and $146,560,  respectively)          134,164        145,694
Federal Reserve Bank and Federal Home Loan Bank stock, at cost                                             2,805          1,108
Loans receivable (net of allowance for loan losses of $5,987 and $4,611, respectively)                   625,374        485,301
Accrued interest receivable                                                                                4,311          4,263
Loan fees receivable                                                                                       5,199          3,706
Premises and equipment, net                                                                                5,862          6,098
Foreclosed real estate                                                                                         -          1,081
Deferred income tax asset                                                                                  2,900          1,997
Deferred debenture offering costs, net                                                                     4,312          3,498
Other assets                                                                                                 278            384
===============================================================================================================================
TOTAL ASSETS                                                                                     $       822,900  $     685,979
===============================================================================================================================
LIABILITIES
Deposits:
   Noninterest-bearing demand deposit accounts                                                   $         5,850  $       5,924
   Interest-bearing deposit accounts:
     Checking (NOW) accounts                                                                              14,570         10,584
     Savings accounts                                                                                     32,760         30,174
     Money market accounts                                                                               150,678        134,293
     Certificate of deposit accounts                                                                     390,974        324,983
                                                                                                 ---------------  -------------
Total deposit accounts                                                                                   594,832        505,958
Subordinated debentures payable                                                                           98,760         84,430
Guaranteed preferred beneficial interest in junior subordinated debentures                                30,000         15,000
Accrued interest payable on all debentures                                                                15,345         13,872
Note payable                                                                                                 258            266
Accrued interest payable on deposits                                                                         914            895
Mortgage escrow funds payable                                                                             13,694          5,894
Official checks outstanding                                                                                2,440          4,373
Other liabilities                                                                                          2,912          2,165
-------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES                                                                                        759,155        632,853
-------------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock (300,000 shares authorized, none issued)                                                       -              -
Class A common stock ($1.00 par value, 9,500,000 shares authorized,
   4,668,686 and 4,348,087 shares issued and outstanding, respectively)                                    4,669          4,348
Class B common stock ($1.00 par value, 700,000 shares authorized,
   385,000 and  355,000 shares issued and outstanding, respectively)                                         385            355
Additional paid-in-capital, common                                                                        27,504         24,134
Retained earnings                                                                                         31,187         24,289
-------------------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY                                                                                63,745         53,126
===============================================================================================================================
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                       $       822,900  $     685,979
===============================================================================================================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.


                                        2
<PAGE>
<TABLE>
<CAPTION>
                        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)                   2003      2002  |    2003        2002
-------------------------------------------------------------------------|-----------------------
<S>                                                    <C>        <C>      <C>         <C>
                                                                         |
INTEREST AND DIVIDEND INCOME                                             |
Loans receivable                                       $ 12,172   $10,254| $  34,455   $   29,046
Securities                                                  609     1,064|     2,266        2,889
Other interest-earning assets                                64        78|       219          180
-------------------------------------------------------------------------|-----------------------
TOTAL INTEREST AND DIVIDEND INCOME                       12,845    11,396|    36,940       32,115
-------------------------------------------------------------------------|-----------------------
                                                                         |
INTEREST EXPENSE                                                         |
Deposits                                                  4,550     4,603|    13,521       12,872
Subordinated debentures                                   2,110     1,874|     6,134        5,451
Junior debentures - capital securities                      414       375|     1,162        1,123
Note payable                                                  5         5|        14           12
Federal funds purchased                                       -         -|         -            2
-------------------------------------------------------------------------|-----------------------
TOTAL INTEREST EXPENSE                                    7,079     6,857|    20,831       19,460
-------------------------------------------------------------------------|-----------------------
                                                                         |
NET INTEREST AND DIVIDEND INCOME                          5,766     4,539|    16,109       12,655
Provision for loan loss reserves                            602       192|     1,376          964
-------------------------------------------------------------------------|-----------------------
NET INTEREST AND DIVIDEND INCOME                                         |
     AFTER PROVISION FOR LOAN LOSS RESERVES               5,164     4,347|    14,733       11,691
-------------------------------------------------------------------------|-----------------------
                                                                         |
NONINTEREST INCOME                                                       |
Customer service fees                                        58        40|       146          123
Income from mortgage lending activities                     206       172|       620          380
Income from the early repayment of mortgage loans           747       518|     1,784          879
(Loss) gain from early call of investment securities        (11)        6|       (51)           6
All other                                                    38         -|        44            -
-------------------------------------------------------------------------|-----------------------
TOTAL NONINTEREST INCOME                                  1,038       736|     2,543        1,388
-------------------------------------------------------------------------|-----------------------
                                                                         |
NONINTEREST EXPENSES                                                     |
Salaries and employee benefits                              892       714|     2,656        2,252
Occupancy and equipment, net                                310       358|       948          995
Data processing                                             192       150|       530          416
Advertising and promotion                                     4        19|        26           53
Professional fees and services                               89        85|       276          250
Stationery, printing and supplies                            33        34|       112          105
Postage and delivery                                         23        24|        73           70
FDIC and general insurance                                   57        48|       168          132
All other                                                   212       162|       686          463
-------------------------------------------------------------------------|-----------------------
TOTAL NONINTEREST EXPENSES                                1,812     1,594|     5,475        4,736
-------------------------------------------------------------------------|-----------------------
Earnings before taxes                                     4,390     3,489|    11,801        8,343
Provision for income taxes                                1,859     1,385|     4,903        3,347
=========================================================================|=======================
NET EARNINGS                                           $  2,531   $ 2,104| $   6,898   $    4,996
=========================================================================|=======================
                                                                         |
BASIC EARNINGS PER SHARE                               $   0.52   $  0.52| $    1.45   $     1.26
DILUTED EARNINGS PER SHARE                             $   0.42   $  0.41| $    1.19   $     1.01
DIVIDENDS PER SHARE                                    $      -   $     -| $       -   $        -
-------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.


                                        3
<PAGE>
<TABLE>
<CAPTION>
                                 INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
                             CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                                    (Unaudited)


                                                                               QUARTER          NINE-MONTHS
                                                                                ENDED              ENDED
                                                                             SEPTEMBER 30,      SEPTEMBER 30,
                                                                          ----------------------------------------
($in thousands)                                                             2003     2002     2003        2002
------------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>       <C>     <C>        <C>
------------------------------------------------------------------------------------------------------------------
NET EARNINGS                                                              $  2,531  $2,104  $   6,898  $    4,996
------------------------------------------------------------------------------------------------------------------
Net unrealized holding gains (losses) on available-for-sale securities           -       8          -         (38)
Provision (credit) for income taxes related to unrealized gains (losses)
     on available-for-sale securities                                            -       4          -         (16)
------------------------------------------------------------------------------------------------------------------
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX                                    -       4          -         (22)
==================================================================================================================
TOTAL COMPREHENSIVE INCOME, NET OF TAX                                    $  2,531  $2,108  $   6,898  $    4,974
==================================================================================================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.


                                        4
<PAGE>
<TABLE>
<CAPTION>
                             INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                                (Unaudited)

                                                                                      NINE-MONTHS ENDED
                                                                                        SEPTEMBER 30,
                                                                                    ----------------------
($in thousands)                                                                       2003        2002
----------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>        <C>

CLASS A COMMON STOCK
Balance at beginning of period                                                      $   4,348  $    3,545
Issuance of 279,900 and 219,450 shares upon the exercise of warrants                      280         219
Issuance of 40,699 shares upon the conversion of debentures                                41           -
----------------------------------------------------------------------------------------------------------
Balance at end of period                                                                4,669       3,764
----------------------------------------------------------------------------------------------------------

CLASS B COMMON STOCK
Balance at beginning of period                                                            355         355
Issuance of 30,000 shares for the acquisition of Intervest Securities Corporation          30           -
----------------------------------------------------------------------------------------------------------
Balance at end of period                                                                  385         355
----------------------------------------------------------------------------------------------------------

ADDITIONAL PAID-IN-CAPITAL, COMMON
Balance at beginning of period                                                         24,134      19,001
Compensation related to vesting of certain Class B stock warrants                          19          19
Compensation related to certain Class A stock warrants modified                           290          74
Issuance of 30,000 shares of Class B stock for the acquisition
   of Intervest Securities Corporation                                                    185           -
Issuance of 279,900 and 219,450 shares of Class A stock upon the exercise of
    warrants, inclusive of tax benefits                                                 2,522       1,437
Issuance of 40,699 shares of Class A stock upon the conversion of debentures              354           -
----------------------------------------------------------------------------------------------------------
Balance at end of period                                                               27,504      20,531
----------------------------------------------------------------------------------------------------------

RETAINED EARNINGS
Balance at beginning of period                                                         24,289      17,383
Net earnings for the period                                                             6,898       4,996
----------------------------------------------------------------------------------------------------------
Balance at end of period                                                               31,187      22,379
----------------------------------------------------------------------------------------------------------

ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance at beginning of period                                                              -         111
Net change in accumulated other comprehensive income, net                                   -         (22)
----------------------------------------------------------------------------------------------------------
Balance at end of period                                                                    -          89
----------------------------------------------------------------------------------------------------------

==========================================================================================================
TOTAL STOCKHOLDERS' EQUITY AT END OF PERIOD                                         $  63,745  $   47,118
==========================================================================================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.


                                        5
<PAGE>
<TABLE>
<CAPTION>
                              INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
                                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                 (Unaudited)

                                                                                        NINE-MONTHS ENDED
                                                                                           SEPTEMBER 30,
                                                                                      -----------------------
($in thousands)                                                                          2003        2002
-------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>         <C>
OPERATING ACTIVITIES
Net earnings                                                                          $   6,898   $    4,996
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization                                                               391          473
Provision for loan loss reserves                                                          1,376          964
Deferred income tax benefit                                                                (903)        (433)
Amortization of deferred debenture offering costs                                           784          677
Compensation expense related to common stock warrants                                       309           93
Amortization of premiums, fees and discounts, net                                        (1,130)        (534)
Net loss from sale of foreclosed real estate                                                 51            -
Net increase in accrued interest payable on debentures                                    1,610        1,903
Net decrease in official checks outstanding                                              (1,933)        (825)
Net change in all other assets and liabilities                                            4,175         (976)
-------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES                                                11,628        6,338
-------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Net decrease in interest-earning time deposits with banks                                 2,000          250
Maturities and calls of securities available for sale                                         -          500
Maturities and calls of securities held to maturity                                      92,490       69,285
Purchases of securities held to maturity                                                (82,625)    (117,905)
Net increase in loans receivable                                                       (142,622)     (85,691)
Sale of foreclosed real estate                                                              150            -
Cash acquired through acquisition of Intervest Securities Corporation                       218            -
Purchases of Federal Reserve Bank and Federal Home Loan Bank stock, net                  (1,697)        (450)
Purchases of premises and equipment, net                                                   (155)        (352)
-------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES                                                  (132,241)    (134,363)
-------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Net increase in demand, savings, NOW and money market deposits                           22,883       54,812
Net increase in certificates of deposit                                                  65,991       69,374
Net increase in mortgage escrow funds payable                                             7,800        5,431
Principal repayments of debentures                                                       (1,400)      (2,500)
Principal repayments of note payable                                                         (8)          (6)
Proceeds from issuance of debentures, net of issuance costs                              29,391       12,490
Proceeds from issuance of common stock, net of issuance costs                             2,802        1,656
-------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                               127,459      141,257
-------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents                                                 6,846       13,232
Cash and cash equivalents at beginning of period                                         30,849       24,409
=============================================================================================================
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                            $  37,695   $   37,641
=============================================================================================================
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
  Interest                                                                            $  18,418   $   16,844
  Income taxes                                                                            5,589        3,955
Noncash activities:
  Transfer of loan to foreclosed real estate, net of chargeoff                                -        1,081
  Loan to finance sale of foreclosed real estate                                            880            -
  Purchase of premises with note payable                                                      -          275
  Conversion of debentures and accrued interest into Class A common stock                   395            -
  Accumulated other comprehensive income,
   change in unrealized loss on securities available for sale, net of tax                     -          (22)
-------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to condensed consolidated financial statements


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

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

The  condensed  consolidated  financial  statements  of  Intervest  Bancshares
Corporation  and  Subsidiaries  in  this report have not been audited except for
information  derived  from the audited Consolidated Balance Sheet as of December
31,  2002.  The  statements  should be read in conjunction with the consolidated
financial  statements  and notes thereto included in the Company's Annual Report
on  Form  10-K  for  the  year  ended  December  31,  2002.

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

In  preparing  the fnancial statements, management is required to make estimates
and  assumptions  that  affect  the  reported amounts of assets, liabilities and
disclosure of contingent liabilities as of the date of the financial statements,
and  revenues  and  expenses  during the reporting periods. Actual results could
differ  from  those  estimates.  Estimates  that are particularly susceptible to
significant  change  relate  to the determination of the allowance for loan loss
reserves and the valuation allowances for deferred tax assets. In the opinion of
management,  all  material  adjustments  necessary  for  a  fair presentation of
financial  condition and results of operations for the interim periods presented
in  this  report  have  been  made.  These adjustments are of a normal recurring
nature.  The  results  of operations for the interim periods are not necessarily
indicative  of  results  that  may  be expected for the entire year or any other
interim  period.

NOTE  2  -  DESCRIPTION  OF  BUSINESS

The  Holding Company is located at 10 Rockefeller Plaza in New York City and its
primary business is the operation of its subsidiaries. It does not engage in any
other substantial business activities other than a limited amount of real estate
mortgage  lending.  From time to time, the Holding Company also sells debentures
to  raise  funds  for  working  capital  purposes.  The Holding Company became a
financial  holding  company  effective  January  23,  2003.

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

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

Intervest  Securities  Corporation  is a broker/dealer registered in nine states
and is an NASD and SIPC member firm. It  is also located at 10 Rockefeller Plaza
in  New  York City and it participates as a selected dealer from time to time in
offerings  of  debt  securities  of  the  Company,  primarily those of Intervest
Mortgage  Corporation.  On June 2, 2003, the Holding Company acquired all of the
outstanding  capital stock of Intervest Securities Corporation for 30,000 shares
of  its  Class  B  common  stock  that  was  newly  issued for this transaction.
Intervest  Securities  Corporation's  total  assets  consisted  of approximately
$218,000 of cash at the time of acquisition. Prior to the acquisition, Intervest
Securities  Corporation  was an affiliated entity in that it was wholly owned by
the  spouse  of  the  Chairman  of  the  Holding  Company.


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

NOTE  2  -  DESCRIPTION  OF  BUSINESS  -  CONTINUED

The  acquisition  was  accounted  for  at  historical  cost and accordingly, the
recorded  assets,  liabilities  and  shareholders' equity of both companies were
combined  and  recorded at their historical cost amounts. No restatements of the
Company's  prior  period  consolidated  financial statements in this report have
been made because the financial results of Intervest Securities Corporation were
diminimus.

Intervest  Statutory Trust I was formed in December 2001 and Intervest Statutory
Trust  II  was formed in September 2003. Each was formed for the sole purpose of
issuing  and  administering  $15,000,000  of  capital  securities for a total of
$30,000,000  as more fully described in note 4 below.  The Trusts do not conduct
any  trade  or  business.

The  Company  will  be  moving from its present New York locations to the entire
fourth floor of One Rockefeller Plaza, New York, NY. Renovations are expected to
be  completed  by  March  2004.

NOTE  3  -  ALLOWANCE  FOR  LOAN  LOSS  RESERVES

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

<TABLE>
<CAPTION>
                                       Quarter Ended      Nine-Months Ended
                                       September 30,        September 30,
                                    ------------------  ---------------------
($in thousands)                       2003      2002      2003        2002
-----------------------------------------------------------------------------
<S>                                 <C>       <C>       <C>        <C>
Balance at beginning of period      $  5,385  $  4,109  $   4,611  $   3,380
Provision charged to operations          602       192      1,376        964
Recoveries of previous chargeoffs          -         -          -        107
Chargeoffs                                 -         -          -       (150)
-----------------------------------------------------------------------------
Balance at end of period            $  5,987  $  4,301  $   5,987  $   4,301
-----------------------------------------------------------------------------
</TABLE>

At September 30, 2003, two real estate loans with an aggregate principal balance
of  $8,474,000  were  on nonaccrual status. These loans were considered impaired
under  the  criteria  of SFAS No.114. The Company's recorded investment in these
loans  totaled  $8,469,000.  The  Company  has commenced foreclosure proceedings
against the borrowers and currently believes the estimated fair value of each of
the  underlying properties (which are located in New York City) is sufficient to
provide repayment of its recorded investment. As a result, there was no specific
valuation  allowance maintained.  Interest income that was not recorded on these
loans  under  their contractual terms was $180,000 for the 2003 periods included
in  this  report.  The  average  balance  of  impaired loans for the quarter and
nine-months  ended  September  30,  2003  was  approximately  $8,474,000  and
$2,432,000,  respectively.  At  September  30, 2003 and December 31, 2002, there
were  no  other  impaired loans or loans ninety days past due and still accruing
interest.

NOTE  4  -  GUARANTEED  PREFERRED  BENEFICIAL  INTEREST  IN  JUNIOR SUBORDINATED
DEBENTURES

Intervest  Statutory Trust I was formed in December 2001 for the sole purpose of
issuing  and  administering  9.875%  Trust Preferred Securities due December 18,
2031  in the aggregate principal amount of $15,000,000, hereafter referred to as
"Capital  Securities  I".  The  net  proceeds  from the sale, in addition to the
initial  capital contribution of $464,000 from the Holding Company to the Trust,
were  reinvested  into  the  Holding  Company in exchange for $15,464,000 of the
Holding  Company's  9.875% Junior Subordinated Debentures due December 18, 2031.

Intervest  Statutory  Trust II was formed in September 2003 for the sole purpose
of  issuing and administering 6.75% Trust Preferred Securities due September 17,
2033  in the aggregate principal amount of $15,000,000, hereafter referred to as
the  "Capital Securities II". The net proceeds from the sale, in addition to the
initial  capital contribution of $464,000 from the Holding Company to the Trust,
were  reinvested  into  the  Holding  Company in exchange for $15,464,000 of the
Holding  Company's  6.75% Junior Subordinated Debentures due September 17, 2033.

The  sole  assets of the Trusts, the obligors on the Capital Securities, are the
Junior Subordinated Debentures. In addition, for each Trust, the Holding Company
has  guaranteed the payment of distributions on, payments on any redemptions of,
and  any  liquidation  distribution  with  respect  to  the  Capital Securities.

Cash  distributions  are  payable  semi-annually in arrears at the fixed rate of
9.875%  per  annum  on  December  18  and  June  18 of each year for the Capital
Securities  I  and  the  9.875%  Junior Subordinated Debentures. For the Capital
Securities  II  and the 6.75% Junior Subordinated Debentures, cash distributions
are payable quarterly in arrears on March 17, June 17, September 17 and December
17  of  each  year  based  on a fixed rate of 6.75% per annum for the first five
years,  and  thereafter  at the rate of 2.95% over 3 month libor until maturity.


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

NOTE  4  -  GUARANTEED  PREFERRED  BENEFICIAL  INTEREST  IN  JUNIOR SUBORDINATED
DEBENTURES,  CONTINUED

Issuance costs of $469,000 associated with Capital Securities I and $441,000 for
Capital Securities II have been capitalized by the Holding Company and are being
amortized  over  the  life  of  the  securities.

All  of the Capital Securities are subject to mandatory redemption (i) in whole,
but  not in part, upon repayment of the Junior Subordinated Debentures at stated
maturity  or,  at the option of the Holding Company, their earlier redemption in
whole  upon  the  occurrence  of certain changes in the tax treatment or capital
treatment  of the Capital Securities, or a change in the law such that the Trust
would  be  considered  an investment company and (ii) in whole or in part at any
time  on  or  after December 18, 2006 for Capital Securities I and September 17,
2008 for Capital Securities II contemporaneously with the optional redemption by
the  Holding  Company of the Junior Subordinated Debentures in whole or in part.
The  Junior  Subordinated  Debentures  are  redeemable  prior to maturity at the
option  of  the Holding Company (i) on or after December 18, 2006 for the 9.875%
Junior  Subordinated Debentures and on or after September 17, 2008 for the 6.75%
Junior  Subordinated  Debentures,  in  whole at any time or in part from time to
time,  or  (ii)  in whole, but not in part, at any time within 90 days following
the  occurrence  and  continuation  of  certain  changes in the tax treatment or
capital  treatment  of  the Capital Securities, or a change in law such that the
Trust would be considered an investment company. Any redemption would need prior
regulatory  approvals.

NOTE  5  -  COMMON  STOCK  WARRANTS

The  Holding  Company  has  common  stock  warrants outstanding that entitle the
registered  holders  thereof  to  purchase  one  share  of common stock for each
warrant.  All  warrants  are  currently  exercisable, except for certain Class B
common  stock  warrants.  In 2001, the Holding Company modified the terms of its
Class  A  and  Class  B warrants as follows: the expiration date of all warrants
exercisable  at  $6.67  per  share  were extended one year beyond their original
expiration  dates  effective  October 4, 2001, and the exercise price of certain
Class  A warrants (exercisable at $12.50 and $16.00 per share as of December 31,
2001)  were  reduced  to $10.01 per share commencing January 1, 2002 until their
original  expiration  date  of  December 31, 2002. In 2002, the $10.01 per share
warrants  were  further  modified by extending their expiration date to December
31,  2003.

Data  concerning  common  stock  warrants  is  as  follows:

<TABLE>
<CAPTION>
                                                                    Exercise Price Per Warrant
                                                                --------------------------------                     Wtd-Avg
                                                                                                         Total      Exercise
Class A Common Stock Warrants:                                   $6.67      $10.01      $10.01        Warrants         Price
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>       <C>         <C>         <C>               <C>

Outstanding at December 31, 2002                                 501,465    931,545     122,000         1,555,010   $    8.93
Exercised during first nine months of 2003                             -   (265,250)    (14,650)         (279,900)  $   10.01
------------------------------------------------------------------------------------------------
Outstanding at September 30, 2003                                501,465    666,295     107,350         1,275,110   $    8.70
------------------------------------------------------------------------------------------------
Remaining contractual life in years at September 30, 2003  (1)       3.3        0.3         0.3               1.5
-----------------------------------------------------------------------------------------------------------------------------
(1) The Holding Company may, at its sole discretion, set an earlier expiration date.


                                                                    Exercise Price Per Warrant
                                                                --------------------------------                     Wtd-Avg
                                                                                                       Total        Exercise
Class A Common Stock Warrants:                                                $6.67      $10.01(1)    Warrants        Price
-----------------------------------------------------------------------------------------------------------------------------
Outstanding at December 31, 2002 and September 30, 2003                     145,000      50,000           195,000   $   7.52
------------------------------------------------------------------------------------------------------------------
Remaining contractual life in years at September 30, 2003                       4.3        4.3         4.3
-----------------------------------------------------------------------------------------------------------------------------
<FN>
(1)  At  September  30,  2003,  42,600  of  these  warrants  were  immediately exercisable.  An  additional 7,100 warrants
vest and become exercisable on April 27th  of  2004.  The  warrants,  which  expire on January 31, 2008, become fully
vested  earlier  upon  certain  conditions.
</TABLE>

The  Company elects to use the intrinsic value-based method prescribed under APB
Opinion  No.  25,  "Accounting for Stock Issued to Employees," in accounting for
its  stock  warrants.  Under  this method, compensation expense related to stock
warrants  granted to employees is the excess, if any, of the market price of the
stock  as  of  the  grant  or  modification  date over the exercise price of the
warrant.

For  warrants  granted  to  employees whose exercise price was reduced to $10.01
effective  January  1,  2002  and  whose  expiration  date was extended in 2002,
compensation  expense  is  being  recorded  under  variable  rate  accounting as
prescribed  by  APB  25  and  related interpretations. For these warrants, which
originally  totaled  138,500, compensation expense is being recorded in salaries
and  employee benefits expense with a corresponding credit to paid in capital in
the  consolidated  financial  statements. Compensation related to these warrants
will  fluctuate up or down until December 31, 2003 and will be a function of the
Company's  Class  A  common  stock  price and number of warrants outstanding and
exercised.


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

NOTE  5  -  COMMON  STOCK  WARRANTS,  CONTINUED

Compensation  expense  recorded  in  connection  with  warrants is summarized as
follows:

<TABLE>
<CAPTION>
                                                                Quarter Ended       Nine-Months Ended
                                                                 September 30,        September 30,
                                                              -------------------  --------------------
($in thousands)                                                 2003      2002       2003       2002
-------------------------------------------------------------------------------------------------------
<S>                                                           <C>       <C>        <C>        <C>
Compensation expense recorded in connection with vesting
     of Class B warrants during the period                    $      6  $      7   $      19  $      20
Compensation expense (credit) recorded in connection with
    Class A common stock warrants whose terms were modified         96       (44)        290         73
-------------------------------------------------------------------------------------------------------
                                                              $    102  $    (37)  $     309  $      93
-------------------------------------------------------------------------------------------------------
</TABLE>

Had  compensation  expense  been determined based on the estimated fair value of
the  warrants  in  accordance  with  SFAS  No.  123, "Accounting for Stock-Based
Compensation,"  the Company's net earnings and earnings per share would not have
been  different  from  the  amounts  reported  from the periods included in this
report  on  Form  10-Q.

NOTE  6  -  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  (computed by the "treasury stock method") and
convertible  debentures  (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 (adjusted for interest expense,
net  of  tax,  that  would  no  longer  occur if the debentures were converted).

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

<TABLE>
<CAPTION>
                                                                             Quarter Ended           Nine-Months Ended
                                                                              September 30,            September 30,
-----------------------------------------------------------------------------------------------------------------------
($in thousands, except share and per share amounts)                         2003        2002        2003        2002
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>         <C>         <C>         <C>
Basic earnings per share:
  Net earnings applicable to common stockholders                         $    2,531  $    2,104  $    6,898  $    4,996
  Average number of common shares outstanding                             4,894,436   4,067,433   4,771,323   3,976,700
-----------------------------------------------------------------------------------------------------------------------
Basic net earnings per share amount                                      $     0.52  $     0.52  $     1.45  $     1.26
-----------------------------------------------------------------------------------------------------------------------
Diluted earnings per share:
  Net earnings applicable to common stockholders                         $    2,531  $    2,104  $    6,898  $    4,996
  Adjustment to net earnings from assumed conversion of debentures (1)          115         110         346         323
                                                                         ----------------------------------------------
  Adjusted net earnings for diluted earnings per share computation       $    2,646  $    2,214  $    7,244  $    5,319
                                                                         ----------------------------------------------
Average number of common shares outstanding:
  Common shares outstanding                                               4,894,436   4,067,443   4,771,323   3,976,700
  Potential dilutive shares resulting from exercise of warrants (2)         411,446     426,366     335,353     338,722
  Potential dilutive shares resulting from conversion of debentures (3)     966,281     971,552     966,281     971,552
                                                                         ----------------------------------------------
Total average number of common shares outstanding used for dilution       6,272,163   5,465,361   6,072,957   5,286,974
-----------------------------------------------------------------------------------------------------------------------
Diluted net earnings per share amount                                    $     0.42  $     0.41  $     1.19  $     1.01
-----------------------------------------------------------------------------------------------------------------------
<FN>
(1)     Represents interest expense on dilutive convertible debentures, net of taxes, that would not occur if they were
        assumed  converted.
(2)     All outstanding warrants were considered for the EPS computations.
(3)     Convertible debentures (principal and accrued interest) outstanding at September 30, 2003 and September 30,
        2002 totaling $9,672,000 and $9,725,000, respectively, were convertible into common stock at a price of $10.01
        per share.
</TABLE>


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

NOTE  7  -  BANK  REGULATORY  CAPITAL

The  Bank  is  designated  as  a well-capitalized institution as defined in FDIC
regulations,  which  require  minimum  Tier  1  leverage  and  Tier  1 and total
risk-based  ratios  of  5%,  6%  and 10%, respectively. Management believes that
there  are  no  current conditions or events outstanding which would change this
designation.

At  September 30, 2003, the actual capital of the Bank on a percentage basis was
as  follows:

<TABLE>
<CAPTION>
                                                         Actual   Minimum       To Be Considered
                                                         Ratios   Requirement   Well Capitalized
                                                         -------  ------------  -----------------
<S>                                                      <C>      <C>           <C>
Total capital to risk-weighted assets                     12.41%         8.00%             10.00%
Tier 1 capital to risk-weighted assets                    11.40%         4.00%              6.00%
Tier 1 capital to total average assets - leverage ratio    9.98%         4.00%              5.00%
</TABLE>


                                       11
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES

               REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

     Hacker,  Johnson  &  Smith,  P.A., P.C. the Company's independent certified
public  accountants,  have  made  a  limited  review of the financial data as of
September 30, 2003 and for the three- and nine-month periods ended September 30,
2003  and  2002  presented  in  this  document,  in  accordance  with  standards
established  by  the American Institute of Certified Public Accountants. As part
of Hacker, Johnson & Smith, P.A., P.C.'s review, Eisner, LLP was relied upon for
their  limited  review  of  Intervest  Mortgage  Corporation,  a  wholly  owned
subsidiary  of  the  Company.

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


                                       12
<PAGE>
          REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



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,  2003,  and  the  related  condensed  consolidated  statements of
earnings  and  comprehensive  income for the three- and nine-month periods ended
September  30,  2003 and 2002, and the related condensed consolidated statements
of  changes  in  stockholders'  equity and cash flows for the nine-month periods
ended  September  30,  2003  and  2002.  These  financial  statements  are  the
responsibility  of  the  Company's  management.

      We  were furnished the report of other accountants on their reviews of the
interim  financial  information  of  Intervest Mortgage Corporation, whose total
assets  as  of  September 30, 2003 constituted 12.9% 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 10.9%, 9.9%, and
20.1%;  and 10.5%, 13.6% and 18.5%, respectively, and whose net interest income,
noninterest  income and net earnings for the three- and nine-month periods ended
September  30,  2002,  constituted 11.7%, 26.5%, and 24.7%; and 14.2%, 25.2% and
25.5%,  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 review 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,  2002,  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 24,
2003,  we,  based  on  our  audit and the report of other auditors, 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, 2002 is fairly stated, in all material respects, in
relation  to  the  consolidated  balance  sheet  from which it has been derived.


/s/ Hacker, Johnson & Smith, P.A., P.C.
---------------------------------------
HACKER, JOHNSON & SMITH, P.A.,P.C.
Tampa,  Florida
November  6,  2003


                                       13
<PAGE>
          REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



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

     We  have  reviewed  the  condensed  consolidated balance sheet of Intervest
Mortgage  Corporation and Subsidiaries (the "Company") as of September 30, 2003,
and  the  related condensed consolidated statements of operations for the three-
and  nine-month  periods  ended  September  30,  2003  and 2002, and the related
condensed  consolidated  statements  of changes in stockholder's equity and cash
flows for the nine-month periods ended September 30, 2003 and 2002 (all of which
are  not  presented  separately  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 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  previously  audited,  in  accordance  with auditing standards generally
accepted  in the United States of America, the consolidated balance sheet of the
Company  as  of  December  31,  2002  and the related consolidated statements of
operations,  changes  in  stockholder's  equity and cash flows for the year then
ended  (not  presented  separately  herein), and in our report dated January 23,
2003,  we  expressed  an  unqualified  opinion  on  those consolidated financial
statements.  In  our  opinion,  the  information  set  forth  in  the  condensed
consolidated  balance  sheet  as  of  December  31, 2002 is fairly stated in all
material  respects  in  relation to the consolidated balance sheet from which it
has  been  derived.



/s/  Eisner,  LLP
-----------------
EISNER,LLP
New  York,  New  York
October  22,  2003


                                       14
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

                                     GENERAL
                                     -------

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

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

The  Company's  profitability  is  also affected by the level of its noninterest
income  and  expenses, provision for loan loss reserves and effective income tax
rate.  Noninterest income consists mostly of loan and other banking fees as well
as  income  from  loan  prepayments. The amount and timing of, as well as income
from,  loan  prepayments,  if  any,  cannot  be  predicted  and  can  fluctuate
significantly. Normally, the number of instances of prepayment of mortgage loans
tends  to  increase  during  periods  of  declining  interest rates and tends to
decrease  during  periods  of  increasing  interest rates. Many of the Company's
mortgage  loans include prepayment provisions, and others prohibit prepayment of
indebtedness entirely. Noninterest expense consists of compensation and benefits
expense, occupancy and equipment expenses, data processing expenses, advertising
expense,  professional  fees,  insurance  expense  and other operating expenses.
Additionally,  the  Company's profitability is significantly affected by general
economic  and  competitive  conditions,  changes  in  market  interest  rates,
government  policies and actions of regulatory authorities. Since the properties
underlying  the  Company's  mortgages are concentrated in the New York City area
and  the  State  of  Florida, the economic conditions in those areas can have an
impact  on  the  Company's  results  of  operations.

  COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2003 AND DECEMBER 31, 2002
  -----------------------------------------------------------------------------

OVERVIEW
--------

Total  assets at September 30, 2003 increased to $822,900,000, from $685,979,000
at  December  31,  2002.  Total  liabilities  at September 30, 2003 increased to
$759,155,000,  from  $632,853,000  at  December  31,  2002. Stockholders' equity
increased  to  $63,745,000  at  September 30, 2003, from $53,126,000 at year-end
2002.  Book  value  per  common  share rose to $12.61 per share at September 30,
2003,  from  $11.30  at  December  31,  2002.

Selected  balance  sheet  information  as  of  September  30,  2003  follows:

<TABLE>
<CAPTION>
                                                           Intervest    Intervest   Intervest    Intervest     Inter-
                                                Holding    National     Mortgage    Statutory   Securities    Company
($in thousands)                                 Company      Bank         Corp        Trusts       Corp       Balances
-----------------------------------------------------------------------------------------------------------------------
<S>                                            <C>        <C>          <C>          <C>         <C>          <C>

Cash and cash equivalents                      $  6,011   $   30,954   $   16,970   $        -  $       479  $ (16,719)
Securities held to maturity, net                      -      134,164            -       30,928            -    (30,928)
FRB and FHLB stock                                    -        2,805            -            -            -          -
Loans receivable, net of deferred fees           16,425      517,807       97,129            -            -          -
Allowance for loan loss reserves                    (82)      (5,687)        (218)           -            -          -
Investment in subsidiaries                       84,424            -            -            -            -    (84,424)
All other assets                                  1,777       16,232        4,868          482            -       (497)
-----------------------------------------------------------------------------------------------------------------------
Total assets                                   $108,555   $  696,275   $  118,749   $   31,410  $       479  $(132,568)
-----------------------------------------------------------------------------------------------------------------------
Deposits                                       $      -   $  611,846   $        -   $        -  $         -  $ (17,014)
Subordinated debentures payable                  41,088            -       88,600            -            -    (30,928)
Junior debentures payable-capital securities          -            -            -       30,000            -          -
Accrued interest payable on all debentures        3,569            -       11,791          467            -       (482)
All other liabilities                               153       18,097        1,666           15            7        280
-----------------------------------------------------------------------------------------------------------------------
Total liabilities                                44,810      629,943      102,057       30,482            7    (48,144)
-----------------------------------------------------------------------------------------------------------------------
Stockholders' equity                             63,745       66,332       16,692          928          472    (84,424)
-----------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity     $108,555   $  696,275   $  118,749   $   31,410  $       479  $(132,568)
-----------------------------------------------------------------------------------------------------------------------


($in thousands)                                 Consolidated
-------------------------------------------------------------
<S>                                            <C>

Cash and cash equivalents                      $      37,695
Securities held to maturity, net                     134,164
FRB and FHLB stock                                     2,805
Loans receivable, net of deferred fees               631,361
Allowance for loan loss reserves                      (5,987)
Investment in subsidiaries                                 -
All other assets                                      22,862
-------------------------------------------------------------
Total assets                                   $     822,900
-------------------------------------------------------------
Deposits                                       $     594,832
Subordinated debentures payable                       98,760
Junior debentures payable-capital securities          30,000
Accrued interest payable on all debentures            15,345
All other liabilities                                 20,218
-------------------------------------------------------------
Total liabilities                                    759,155
-------------------------------------------------------------
Stockholders' equity                                  63,745
-------------------------------------------------------------
Total liabilities and stockholders' equity     $     822,900
-------------------------------------------------------------
</TABLE>


                                       15
<PAGE>
A  comparison of selected balance sheet information as of September 30, 2003 and
December  31,  2002  follows:

<TABLE>
<CAPTION>
                                                                  At September 30, 2003     At December 31, 2002
                                                                ------------------------  ------------------------
                                                                Carrying       % of       Carrying       % of
($in thousands)                                                   Value    Total Assets     Value    Total Assets
------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>        <C>            <C>        <C>

Cash and cash equivalents                                       $  37,695           4.6%  $  30,849           4.4%
Time deposits with banks                                                -             -       2,000           0.3
Securities held to maturity, net                                  134,164          16.3     145,694          21.2
FRB and FHLB stock                                                  2,805           0.3       1,108           0.2
Loans receivable, net of deferred fees and loan loss reserves     625,374          76.0     485,301          70.7
All other assets                                                   22,862           2.8      21,027           3.2
------------------------------------------------------------------------------------------------------------------
Total assets                                                    $ 822,900         100.0%  $ 685,979         100.0%
------------------------------------------------------------------------------------------------------------------
Deposits                                                        $ 594,832          72.3%  $ 505,958          73.8%
Subordinated debentures payable                                    98,760          12.0      84,430          12.3
Junior debentures payable-capital securities                       30,000           3.6      15,000           2.2
Accrued interest payable on all debentures                         15,345           1.9      13,872           2.0
All other liabilities                                              20,218           2.5      13,593           2.0
------------------------------------------------------------------------------------------------------------------
Total liabilities                                                 759,155          92.3     632,853          92.3
------------------------------------------------------------------------------------------------------------------
Stockholders' equity                                               63,745           7.7      53,126           7.7
------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                      $ 822,900         100.0%  $ 685,979         100.0%
------------------------------------------------------------------------------------------------------------------
</TABLE>

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

Cash  and  cash equivalents increased to $37,695,000 at September 30, 2003, from
$30,849,000  at  December  31, 2002, as reflected in a higher level of overnight
federal  fund  investments.  This  category  includes  federal  funds  sold  and
interest-bearing  and  noninterest-bearing  cash  balances with banks, and other
short-term  investments  that  have original maturities of three months or less.
The  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.

SECURITIES  HELD  TO  MATURITY,  NET
------------------------------------

Securities  held  to  maturity  decreased to $134,164,000 at September 30, 2003,
from  $145,694,000  at December 31, 2002. The decrease was due to maturities and
early calls exceeding new purchases during the period. The portfolio consists of
debt  obligations  of  FNMA,  FHLB, FHLMC, SLMA and FFCB with a weighted-average
yield  of  approximately  1.80% and a weighted-average remaining maturity of 1.6
years  at  September 30, 2003, compared to 2.39% and 1.6 years, respectively, at
December 31, 2002. The securities are fixed rate or have predetermined scheduled
rate  increases,  and  some have call features that allow the issuer to call the
security  before  its  stated  maturity  without  penalty.  The Company normally
invests  in  short-to-medium  term  security investments to emphasize liquidity.

FEDERAL  RESERVE  BANK  AND  FEDERAL  HOME  LOAN  BANK  STOCK
-------------------------------------------------------------

In  order  for the Bank to be a member of the Federal Reserve Bank (FRB) and the
Federal  Home  Loan Bank of New York (FHLB), the Bank maintains an investment in
their  capital  stock  of $1,114,000 and $1,691,000, respectively. The FRB stock
currently  pays a dividend of 6%, while the FHLB stock dividend was suspended in
September  2003. The total investment, which amounted to $2,805,000 at September
30,  2003,  compared  to  $1,108,000  at  December 31, 2002, fluctuates based on
specific  factors (the Bank's capital level for the FRB and the Bank's loans for
the  FHLB).  The  Bank  became a member of the FHLB during the second quarter of
2003.

LOANS  RECEIVABLE,  NET  OF  DEFERRED  FEES AND ALLOWANCE FOR LOAN LOSS RESERVES
--------------------------------------------------------------------------------

Loans receivable, net of deferred fees and the allowance for loan loss reserves,
increased  to $625,374,000 at  September 30, 2003, from $485,301,000 at December
31,  2002.  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, 2003, two real
estate  loans  with  an  aggregate  principal  balance  of  $8,474,000  were  on
nonaccrual  status  and considered impaired. At December 31, 2002, there were no
loans  classified  as  nonaccrual  or  impaired.  For  a  further  discussion of
nonaccrual  loans, see note 3 to the condensed consolidated financial statements
in  this  report.


                                       16
<PAGE>
At  September  30,  2003,  the  allowance  for  loan  loss  reserves amounted to
$5,987,000,  compared  to  $4,611,000  at  December  31,  2002.  The  allowance
represented 0.95% of total loans (net of deferred fees) outstanding at September
30,  2003, compared to 0.94% at December 31, 2002. The increase in the allowance
was  due  to  provisions aggregating $1,376,000 during the period resulting from
loan  growth.

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 the caption "All other assets"
in the table on page 16 as follows:

<TABLE>
<CAPTION>
                                                   At September 30,   At December 31,
                                                   -----------------  ----------------
          ($in thousands)                                2003               2002
          ----------------------------------------------------------------------------
<S>                                                <C>                <C>
          Accrued interest receivable              $           4,311  $          4,263
          Loans fee receivable                                 5,199             3,706
          Premises and equipment, net                          5,862             6,098
          Foreclosed real estate                                   -             1,081
          Deferred income tax asset                            2,900             1,997
          Deferred debenture offering costs, net               4,312             3,498
          All other                                              278               384
          ----------------------------------------------------------------------------
                                                   $          22,862  $         21,027
          ----------------------------------------------------------------------------
</TABLE>
Accrued  interest  receivable  fluctuates based on the level of interest-earning
assets  and  the  timing  of  interest  payments  received  therefrom.

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

Premises and equipment decreased due to depreciation and amortization, partially
offset  by  new  additions  of  $155,000.

Foreclosed  real  estate  at  December  31, 2002 represented one commercial real
estate  property  located  in  the  State  of  Florida  with a carrying value of
$1,081,000.  In  the second quarter of 2003, the Bank sold this property for net
proceeds  of  approximately $1,030,000 (consisting of cash, after selling costs,
of  $150,000  and  a mortgage of $880,000 provided by the Bank). The net loss of
$51,000  from  the  sale  was  included in noninterest expenses (foreclosed real
estate  expense)  in  the  consolidated  statement  of  earnings.

Deferred income tax asset relates primarily to the unrealized tax benefit on the
Company's  allowance  for  loan  loss  reserves,  depreciation,  organizational
start-up  costs  and compensation expense on unexercised warrants. 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 because the Company
expects  to  generate  sufficient  taxable earnings 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
$1,163,000  incurred  by  Intervest  Mortgage Corporation in connection with the
sale  of  its  Series  01/21/03  and  07/25/03  debentures,  $5,000  incurred by
Intervest  Mortgage  Corporation  through  September  30,  2003  on a new series
expected to be sold in late 2003 and $441,000 incurred by the Holding Company in
connection  with  the  sale  of  Trust  Preferred  Securities.  These items were
partially  offset  by  normal  amortization.

DEPOSIT  LIABILITIES
--------------------

Deposit  liabilities  increased  to  $594,832,000  at  September  30, 2003, from
$505,958,000  at  December  31,  2002,  primarily  reflecting increases in money
market  and  certificate  of  deposit  accounts  of $16,385,000 and $65,991,000,


                                       17
<PAGE>
respectively.  At  September  30,  2003, certificate of deposit accounts totaled
$390,974,000  and  checking,  savings  and  money  market  accounts  aggregated
$203,858,000.  The  same categories of deposit accounts totaled $324,983,000 and
$180,975,000,  respectively,  at  December  31,  2002.  Certificate  of  deposit
accounts  represented  66%  of  total  deposits at September 30, 2003 and 64% at
December  31,  2002.

DEBENTURES  PAYABLE,  RELATED  ACCRUED  INTEREST  PAYABLE  AND  TRUST  PREFERRED
--------------------------------------------------------------------------------
SECURITIES
----------

At  September  30, 2003, debentures payable amounted to $98,760,000, compared to
$84,430,000  at year-end 2002. The increase was due to the sale of debentures by
Intervest  Mortgage  Corporation  (Series  01/21/03  and  07/25/03  totaling
$16,000,000 with fixed rates of interest ranging from 6.5% to 7.25% and maturing
at  various  times through October 1, 2010) as part of its normal funding of its
mortgage  loan  originations. This increase was partially offset by the maturity
and repayment of $1,400,000 of its Series 11/10/98 debentures and the conversion
of  the  Holding  Company's  convertible  debentures  in the aggregate principal
amount  of  $270,000  into shares of Class A common stock at the election of the
debenture  holders.  The  sale of Intervest Mortgage Corporation's debentures in
2003,  after underwriter's commissions and other issuance costs, resulted in net
proceeds  of  $14,826,000.

At  September  30,  2003,  Intervest  Mortgage  Corporation  had  $88,600,000 of
debentures  outstanding, compared to $74,000,000 at December 31, 2002. Intervest
Mortgage  Corporation  has  elected to redeem on November 1, 2003, $1,250,000 of
its Series 9/18/00 debentures due January 1, 2004, plus accrued interest through
October  31,  2003  of  approximately  $335,000.  In  September  2003, Intervest
Mortgage  Corporation  filed  a  registration  statement  to  sell  additional
debentures  in  the  aggregate  principal  amount  of  up  to  $10,000,000.

At September 30, 2003, the Holding Company had $10,160,000 of debentures payable
outstanding,  of which $6,660,000 were convertible into its Class A common stock
at a current conversion price of $10.01 per share through December 31, 2003. The
Holding  Company  has  also elected to redeem on November 1, 2003, $1,000,000 of
its  Series  12/15/00  non-convertible  debentures  due  April  1,  2004.

At  September  30,  2003,  the  Holding  Company,  through  its  wholly  owned
subsidiaries  Intervest  Statutory Trust I and Intervest Statutory Trust II, has
Trust  Preferred  Securities  (Junior  Debentures  Payable) outstanding totaling
$30,000,000,  compared  to  $15,000,000  at December 31, 2002.  These securities
qualify  as regulatory capital. The increase from year-end 2002 was due the sale
of  $15,000,000  of  Trust  Preferred  Securities  as discussed in note 4 to the
condensed  consolidated  financial  statements  in  this  report.

At  September  30,  2003, accrued interest payable on all debentures amounted to
$15,345,000, compared to $13,872,000 at year-end 2002. Nearly all of the accrued
interest payable 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  7 to the consolidated financial statements included in the
Company's  Annual  Report  on  Form  10-K  for the year ended December 31, 2002.

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

The  table  below  sets  forth  the  composition  of  the  caption  "All  other
liabilities"  in  the  table  on  page  16  as  follows:

<TABLE>
<CAPTION>
                                                 At September 30,   At December 31,
                                                 -----------------  ----------------
          ($in thousands)                              2003               2002
          --------------------------------------------------------------------------
<S>                                              <C>                <C>

          Note payable                           $             258  $            266
          Mortgage escrow funds payable                     13,694             5,894
          Official checks outstanding                        2,440             4,373
          Accrued interest payable on deposits                 914               895
          Income taxes payable                                 745               526
          All other                                          2,167             1,639
          --------------------------------------------------------------------------
                                                 $          20,218  $         13,593
          --------------------------------------------------------------------------
</TABLE>
Note payable represents a mortgage note issued by the Bank in 2002 in connection
with  the  Bank's  purchase  of  property  that is located across from its Court
Street  branch office in Florida. The note matures in February of 2017 and calls
for  monthly  payments  of  principal  and  interest  at  7%  per  annum.

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  growth  in  the loan portfolio as well as the timing of
payments  to  taxing  authorities.

The  level of official checks outstanding varies and fluctuates based on banking
activity.  The level of accrued interest payable on deposits fluctuates based on
total  deposits  and  timing  of  interest  payments.  The level of income taxes
payable  fluctuates  based  on  the  Company's  earnings, effective tax rate and
timing  of  tax  payments.  All  other


                                       18
<PAGE>
is  comprised  mainly  of  accrued  expenses  as  well  as fees received on loan
commitments  that have not yet been funded. The increase in all other was due to
fees  received  from  increased  loan  commitments  outstanding.

STOCKHOLDERS'  EQUITY  AND  REGULATORY  CAPITAL
-----------------------------------------------

Stockholders'  equity  increased  to  $63,745,000  at  September  30, 2003, from
$53,126,000  at  December  31,  2002  due  to  the  following:  net  earnings
($6,898,000);  the  issuance of 30,000 shares ($215,000) of Class B common stock
to  acquire  Intervest  Securities  Corporation;  the  issuance of 40,699 shares
($395,000)  of  Class  A  common  stock  upon  the  conversion  of  convertible
debentures;  the issuance of 279,900 shares ($2,802,000) of Class A common stock
upon  the  exercise  of common stock warrants; and the recording of compensation
expense  ($309,000)  related  to stock warrants held by employees and directors.
For  discussion  of  compensation  related  to stock warrants, see note 5 to the
condensed  consolidated  financial  statements  in  this  report.

The  Bank  is  a  well-capitalized  institution as defined in applicable banking
regulations.  See  note  7 to the condensed consolidated financial statements in
this  report  for  the  Bank's  capital  ratios.

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

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  its  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.  The
Company's  one-year interest rate sensitivity gap was a positive $128,712,000 or
15.6%  of  total  assets,  at  September  30,  2003,  compared  to  a  positive
$107,681,000,  or 15.7%, at December 31, 2002. The increase was primarily due to
the  origination  of new floating-rate loans as well as existing loans migrating
into  the  less  than  one-year  maturity  timeframe.  The new loans were funded
primarily  by  increases  in  deposits and borrowed funds with of over one year.

In computing the gap, the Company treats its interest checking, money market and
savings  deposit  accounts  as immediately repricing. Further, the Company has a
"floor,"  or minimum rate, on many of its floating-rate loans that is determined
in  relation  to  prevailing market rates on the date of origination. This floor
only adjusts upwards in the event of increases in the loan's interest rate. This
feature  reduces  the  effect  on  interest income of a falling rate environment
because  the  interest  rates on such loans do not reset downward. For a further
discussion  of  interest  rate  risk and gap analysis, including the assumptions
used  in  preparing  the gap, see the Company's 2002 Annual Report on Form 10-K,
pages  32  and  33.

The  table  that  follows  summarizes  the Company's interest-earning assets and
interest-bearing  liabilities as of    September 30, 2003, that are scheduled to
mature  or  reprice  within  the  periods  shown.

<TABLE>
<CAPTION>
                                               0-3       4-12      Over 1-4    Over 4
                                            ---------  ---------  ----------  ---------
($in thousands)                              Months     Months      Years       Years      Total
--------------------------------------------------------------------------------------------------
<S>                                         <C>        <C>        <C>         <C>        <C>
Loans (1)                                   $200,144   $227,952   $ 140,311   $ 70,397   $638,804
Securities held to maturity (2)               24,285     48,660      61,219          -    134,164
Short-term investments                        29,857          -           -          -     29,857
FRB and FHLB stock                             1,691          -           -      1,114      2,805
--------------------------------------------------------------------------------------------------
Total rate-sensitive assets                 $255,977   $276,612   $ 201,530   $ 71,511   $805,630
--------------------------------------------------------------------------------------------------
Deposit accounts (3):
  Interest checking deposits                $ 14,570   $      -   $       -   $      -   $ 14,570
  Savings deposits                            32,760          -           -          -     32,760
  Money market deposits                      150,678          -           -          -    150,678
  Certificates of deposit                     30,109    120,969     170,374     69,522    390,974
                                            ------------------------------------------------------
  Total deposits                             228,117    120,969     170,374     69,522    588,982
Debentures payable (1)                        43,750      2,000      18,600     34,410     98,760
Debentures payable- capital securities (1)         -          -           -     30,000     30,000
Accrued interest on all debentures (1)         8,203        838       2,737      3,567     15,345
Note payable                                       -          -           -        258        258
--------------------------------------------------------------------------------------------------
Total rate-sensitive liabilities            $280,070   $123,807   $ 191,711   $137,757   $733,345
--------------------------------------------------------------------------------------------------
GAP (repricing differences)                 $(24,093)  $152,805   $   9,819   $(66,246)  $ 72,285
--------------------------------------------------------------------------------------------------
Cumulative GAP                              $(24,093)  $128,712   $ 138,531   $ 72,285   $ 72,285
--------------------------------------------------------------------------------------------------
Cumulative GAP to total assets                  -2.9%      15.6%       16.8%       8.8%       8.8%
--------------------------------------------------------------------------------------------------


                                       19
<PAGE>
<FN>
     Significant assumptions used in preparing the preceding gap table follow:

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

                         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 commitments, deposit
withdrawals  and  the repayment of borrowed funds. The Company's primary sources
of  funds consist of: retail deposits obtained through the Bank's branch offices
and  through  the mail; amortization, satisfactions and repayments of loans; the
maturities  and  calls  of  securities;  sales  of debentures; borrowings in the
federal  funds  market and cash provided by operating activities. As a member of
the  FHLB  and  the  FRB,  the  Bank  also  has the ability to borrow from these
institutions  on  a secured basis that amounted to approximately $127,000,000 at
September  30,  2003.  Additionally,  the Bank has agreements with correspondent
banks  whereby  it  may  borrow  on  an  overnight  and  unsecured  basis  up to
$16,000,000.  At  September 30, 2003, there were no outstanding borrowings under
any  of  these  lines.

                     OFF-BALANCE SHEET FINANCIAL INSTRUMENTS
                     ---------------------------------------

The Company is party to financial instruments with off-balance sheet risk in the
normal  course  of  business to meet the financing needs of its customers. These
financial  instruments  are  in the form of commitments to extend credit, unused
lines  of  credit  and  standby  letters  of credit, and may involve, to varying
degrees,  elements  of  credit  and  interest rate risk in excess of the amounts
recognized  in  the  consolidated  balance sheets. The contract amounts of these
instruments reflect the extent of involvement the Company has in these financial
instruments. The Company's maximum exposure to credit risk is represented by the
contractual  amount  of  those  instruments.  The  Company  uses the same credit
policies  in  making  commitments  as  it does for on-balance sheet instruments.

Commitments  to extend credit are agreements to lend funds to a customer as long
as  there  is  no  violation  of any condition established in the contract. Such
commitments  generally  have fixed expiration dates or other termination clauses
and  require  payment  of  fees.  Since  some of the commitments are expected to
expire  without  being  drawn  upon,  the  total  commitment  amount  does  not
necessarily  represent  future  cash  requirements.  The  Company evaluates each
customer's  credit  worthiness on a case-by-case basis. The amount of collateral
obtained,  if deemed necessary by the Company upon extension of credit, is based
on management's credit evaluation of the counterparty. Standby letters of credit
are  conditional  commitments issued by the Company to guarantee the performance
of  a  customer to a third party. The credit risk involved in issuing letters of
credit is essentially the same as that involved in extending loans to customers.
The Company believes that it can fund all of its commitments from the sources of
funds  noted  above.

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

<TABLE>
<CAPTION>
                                                    At             At
                                              --------------  -------------
                                              September 30,   December 31,
                                              --------------  -------------
                  ($in thousands)                  2003           2002
                  ---------------------------------------------------------
<S>                                           <C>             <C>

                  Unfunded loan commitments   $      105,980  $      68,244
                  Available lines of credit              865            533
                  Standby letters of credit              100          1,267
                  ---------------------------------------------------------
                                              $      106,945  $      70,044
                  ---------------------------------------------------------
</TABLE>

Management is not aware of any trends, known demand, commitments or
uncertainties which are expected to have a material impact on future operating
results, liquidity or capital resources.


                                       20
<PAGE>

   COMPARISON OF RESULTS OF OPERATIONS FOR THE QUARTERS ENDED SEPTEMBER 30, 2003
   -----------------------------------------------------------------------------
                                    AND 2002
                                    --------
OVERVIEW
--------

Consolidated  net  earnings  in  the  third  quarter  of  2003  increased 20% to
$2,531,000,  from  $2,104,000 in the third quarter of 2002. Diluted earnings per
share  amounted  to $0.42 in the third quarter of 2003, compared to $0.41 in the
third  quarter of 2002. The per share computation for the 2003 period included a
higher number of common shares outstanding resulting from the exercise of common
stock  warrants  and  conversion  of  debentures.

The  improvement in quarterly earnings was attributable to increases in both the
Company's  net interest and dividend income and noninterest income. Net interest
and dividend income was higher by $1,227,000, while noninterest income increased
by  $302,000. These improvements were partially offset by a $410,000 increase in
the provision for loan losses, a $218,000 increase in noninterest expenses and a
$474,000  increase  in  the  provision  for  income  taxes.

Selected  information  regarding  results of operations for the third quarter of
2003  follows:

<TABLE>
<CAPTION>
                                                   Intervest   Intervest   Intervest    Intervest      Inter-
                                        Holding    National     Mortgage   Statutory    Securities    Company
($in thousands)                         Company      Bank         Corp       Trusts      Corp (2)     Balances   Consolidated
------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>        <C>          <C>         <C>         <C>           <C>         <C>

Interest and dividend income           $    288   $   10,151   $    2,442  $      423  $          1  $    (460)  $      12,845
Interest expense                            726        4,592        1,811         410             -       (460)          7,079
                                       ---------------------------------------------------------------------------------------
Net interest and dividend income           (438)       5,559          631          13             1          -           5,766
Provision for loan loss reserves              8          570           24           -             -          -             602
Noninterest income                           73          874          706           -            38       (653)          1,038
Noninterest expenses                        179        1,871          377          13            25       (653)          1,812
                                       ---------------------------------------------------------------------------------------
Earnings before taxes                      (552)       3,992          936           -            14          -           4,390
Provision for income taxes                 (252)       1,678          427           -             6          -           1,859
------------------------------------------------------------------------------------------------------------------------------
Net earnings                           $   (300)  $    2,314   $      509  $        -  $          8  $       -   $       2,531
------------------------------------------------------------------------------------------------------------------------------
Intercompany dividends (1)             $    375   $     (375)  $        -  $        -  $          -  $       -   $           -
Net earnings for same period of 2002   $   (223)  $    1,807   $      520  $        -  $          -  $       -   $       2,104
------------------------------------------------------------------------------------------------------------------------------
<FN>
(1)     Dividends to the Holding Company provide funds for the debt service on the Junior Debentures-Capital Securities.
(2)     Results  are  from  date  of  acquisition,  June  2,  2003  through  September  30,  2003.
</TABLE>

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

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

Net interest and dividend income increased to $5,766,000 in the third quarter of
2003,  from $4,539,000 in the same period of 2002. The increase was attributable
to growth of $122,128,000 in average interest-earning assets and a lower cost of
funds.  The  growth  in  assets consisted of new mortgage loans of $144,582,000,
partially  offset  by  a  decrease  in  security  and  short-term  investments
aggregating  $22,454,000.  The net growth in assets was funded by $82,937,000 of
new  deposits,  $18,515,000  of  additional  borrowed  funds  and  a $15,094,000
increase  in  stockholders'  equity.

The  Company's  net  interest  margin increased to 3.03% in the third quarter of
2003,  from  2.85%  in  the  same  period  of  2002. The increase was due to the
Company's  cost  of  funds  decreasing  at  a  faster  pace  than  its  yield on
interest-earning  assets. In a declining interest rate environment, the yield on
interest-earning  assets  decreased  40  basis  points (bp) to 6.76% in the 2003
quarter  due  to  lower  rates  on new mortgage loans originated, prepayments of
higher-yielding  loans  and lower yields earned on security and other short-term
investments.  The cost of funds decreased 56 bp to 4.12% in the 2003 quarter due
to  lower  rates  paid  on  deposit  accounts  and  $41,500,000 of floating-rate
debentures.  The  debentures  are indexed to the JPMorgan Chase Bank prime rate,
which  has  decreased  by a total of 75 bp from October 1, 2002 to September 30,
2003.

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


                                       21
<PAGE>
<TABLE>
<CAPTION>
                                                   -------------------------------------------------------------
                                                                           Quarter Ended
                                                   -------------------------------------------------------------
                                                         September 30, 2003             September 30, 2002
                                                   -------------------------------  ----------------------------
                                                    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                                            $605,374   $   12,172    7.98%  $460,792   $   10,254    8.83%
  Securities                                        121,674          609    1.99    152,944        1,064    2.76
  Other interest-earning assets                      26,808           64    0.95     17,992           78    1.72
-----------------------------------------------------------------------------------------------------------------
Total interest-earning assets                       753,856   $   12,845    6.76%   631,728   $   11,396    7.16%
-----------------------------------------------------------------------------------------------------------------
Noninterest-earning assets                           12,329                          14,395
Total assets                                       $766,185                        $646,123
-----------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
  Interest checking deposits                       $ 10,713   $       39    1.44%  $  9,404   $       53    2.24%
  Savings deposits                                   32,108          145    1.79     30,719          193    2.49
  Money market deposits                             145,134          651    1.78    131,775          826    2.49
  Certificates of deposit                           368,707        3,715    4.00    303,196        3,531    4.62
-----------------------------------------------------------------------------------------------------------------
Total deposit accounts                              556,662        4,550    3.24    475,094        4,603    3.84
-----------------------------------------------------------------------------------------------------------------
  Debentures and related interest payable           107,565        2,110    7.78     91,321        1,874    8.14
  Junior debentures - capital securities             17,283          414    9.50     15,000          375    9.92
  Note payable                                          259            5    7.00        271            5    7.00
-----------------------------------------------------------------------------------------------------------------
Total borrowed funds                                125,107        2,529    8.02    106,592        2,254    8.39
-----------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities                  681,769   $    7,079    4.12%   581,686   $    6,857    4.68%
-----------------------------------------------------------------------------------------------------------------
Noninterest-bearing deposits                          5,793                           4,424
Noninterest-bearing liabilities                      18,207                          14,691
Stockholders' equity                                 60,416                          45,322
-----------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity         $766,185                        $646,123
-----------------------------------------------------------------------------------------------------------------
Net interest and dividend income/spread                       $    5,766    2.64%             $    4,539    2.48%
-----------------------------------------------------------------------------------------------------------------
Net interest-earning assets/margin                 $ 72,087                 3.03%  $ 50,042                 2.85%
-----------------------------------------------------------------------------------------------------------------
Ratio of total interest-earning assets
  to total interest-bearing liabilities                1.11                            1.09
-----------------------------------------------------------------------------------------------------------------
OTHER RATIOS:
  Return on average assets (1)                         1.32%                           1.30%
  Return on average equity  (1)                       16.76%                          18.57%
  Noninterest expense to average assets (1)            0.95%                           0.99%
  Efficiency ratio (2)                                   27%                             30%
  Average stockholders' equity to average assets       7.89%                           7.01%
-----------------------------------------------------------------------------------------------------------------
<FN>
(1) Annualized
(2)  Defined  as noninterest expenses as a percentage of net interest income before the provision for loan losses
plus  noninterest  income.
</TABLE>

PROVISION  FOR  LOAN  LOSS  RESERVES
------------------------------------

The provision for loan losses increased to $602,000 in the third quarter of 2003
from  $192,000  in  the  same  quarter  of  2002.  The  provision  is  based  on
management's  ongoing  assessment of the adequacy of the allowance for loan loss
reserves for each subsidiary, which takes into consideration a number of factors
as  discussed  on  page  17  of  this  report. The higher provision for the 2003
quarter was a function of loan growth, which amounted to $56,206,000 in the 2003
quarter,  versus  $4,648,000  in  the  2002  quarter.

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

Noninterest  income  includes  fees  from  customer service charges, income from
mortgage  lending  activities  (which  consists mostly of fees from expired loan
commitments and loan servicing, maintenance and inspections charges), and income
from  the  early  repayment  of  mortgage  loans  (which consists largely of the
recognition  of unearned fees   associated with such loans at the time of payoff
and  the  receipt  of  prepayment  penalties  in  certain  cases).

Noninterest  income  increased  $302,000  to  $1,038,000 in the third quarter of
2003, from $736,000 in the third quarter of 2002, primarily due to higher income
from  loan  prepayments and mortgage lending activities of $229,000 and $34,000,
respectively.


                                       22
<PAGE>
NONINTEREST  EXPENSES
---------------------

Noninterest  expenses  increased  $218,000 to $1,812,000 in the third quarter of
2003,  from $1,594,000 in the same quarter of 2002. The increase was largely due
to  a $178,000 increase in compensation and benefits expense, a $42,000 increase
in  data  processing  expense  and a $61,000 increase in director expense. These
items  were  partially  offset  by a $48,000 decrease in occupancy and equipment
expenses  and  a  $29,000  decrease  in  foreclosed  real  estate  expense.

The  increase in compensation and benefits expense was due to $171,000 resulting
from  additional  staff  (60 employees at September 30, 2003 vs. 56 at September
30, 2002), salary increases and a higher cost of employee benefits, and $102,000
associated  with  common  stock  warrants  held by employees and directors (as a
result  of  an  increase  in the Company's Class A common stock price during the
period).  These  items  were  partially  offset by a $57,000 increase in SFAS 91
direct  fee  income  (due  to increased loan originations) and bonus payments of
$38,000  made  to  the  Chairman of the Company in the 2002 quarter that did not
recur  in 2003. See note 5 to the condensed consolidated financial statements in
this  report  for  information  regarding  common  stock  warrants.

The  increase in data processing expense was due to growth in the Bank's assets.
The Bank engages a third-party servicer for its main data processing and the fee
is  a  function  of the Bank's total assets ($696,275,000 at September 30, 2003,
versus  $556,703,000  at  September  30,  2002).

The  increase in director expense was due to increases in director and committee
fees per meeting beginning in June 2003. The decrease in occupancy and equipment
expenses  was  due  to  higher  depreciation  expense being recorded in the 2002
quarter  in  connection  with  the  disposal  of  various equipment by the Bank.

The  decrease  in  foreclosed  real  estate  expense  was  due  to the sale of a
foreclosed  property  in  the  second  quarter  of  2003. Foreclosed real estate
expense,  net  of  any  rental  income,  consists  mostly  of real estate taxes,
insurance,  utilities, maintenance, professional fees and other charges required
to  protect  the  Company's  interest  in  the  property.

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

The  provision  for  income  taxes increased $474,000 to $1,859,000 in the third
quarter  of  2003,  from  $1,385,000 in the third quarter of 2002, due to higher
pre-tax  income.  The Company's effective tax rate (inclusive of state and local
taxes)  amounted  to  42.3%  in  the  2003 period, compared to 39.7% in the 2002
period.  The  higher  rate  for  the  2003  period is due to a larger portion of
consolidated  taxable  income  being generated from New York, which has a higher
income  tax  rate  than  Florida.


     COMPARISON OF RESULTS OF OPERATIONS FOR THE NINE-MONTHS ENDED SEPTEMBER 30,
     ---------------------------------------------------------------------------
     2003 AND 2002
     -------------
OVERVIEW
--------

Consolidated net earnings for the nine-months ended September 30, 2003 increased
38%  to  $6,898,000,  or  $1.19 per diluted share, from $4,996,000, or $1.01 per
diluted  share, in the same period of 2002. The improvement was due to increases
in  net  interest  and  dividend income and noninterest income. Net interest and
dividend  income  increased by $3,454,000, while noninterest income increased by
$1,155,000.  These  improvements were partially offset by a $739,000 increase in
noninterest expenses, a $412,000 increase in the provision for loan losses and a
$1,556,000  increase  in  the  provision  for  income  taxes.

Selected  information  regarding results of operations for the nine-months ended
September  30,  2003  follows:

<TABLE>
<CAPTION>
                                                   Intervest   Intervest   Intervest    Intervest      Inter-
                                        Holding    National     Mortgage   Statutory    Securities    Company
($in thousands)                         Company      Bank         Corp       Trusts      Corp (2)     Balances   Consolidated
------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>        <C>          <C>         <C>         <C>           <C>         <C>

Interest and dividend income           $    841   $   29,264   $    6,919  $    1,186  $          2  $  (1,272)  $      36,940
Interest expense                          2,098       13,621        5,234       1,150             -     (1,272)         20,831
                                       ---------------------------------------------------------------------------------------
Net interest and dividend income         (1,257)      15,643        1,685          36             2          -          16,109
Provision for loan loss reserves             36        1,223          117           -             -          -           1,376
Noninterest income                          173        2,136        1,915           -            38     (1,719)          2,543
Noninterest expenses                        544        5,450        1,137          36            27     (1,719)          5,475
                                       ---------------------------------------------------------------------------------------
Earnings before taxes                    (1,664)      11,106        2,346           -            13          -          11,801
Provision for income taxes                 (756)       4,585        1,068           -             6          -           4,903
------------------------------------------------------------------------------------------------------------------------------
Net earnings (loss)                    $   (908)  $    6,521   $    1,278  $        -  $          7  $       -   $       6,898
------------------------------------------------------------------------------------------------------------------------------
Intercompany dividends (1)             $  1,125   $   (1,125)  $        -  $        -  $          -  $       -   $           -
Net earnings for same period of 2002   $   (804)  $    4,527   $    1,273  $        -  $          -  $       -   $       4,996
------------------------------------------------------------------------------------------------------------------------------
<FN>
(1)     Dividends to the Holding Company provide funds for the debt service on the Junior Debentures-Capital Securities.
(2)     Results  are  from  date  of  acquisition,  June  2,  2003  through  September  30,  2003.
</TABLE>


                                       23
<PAGE>
NET  INTEREST  AND  DIVIDEND  INCOME
------------------------------------

Net  interest  and  dividend income increased to $16,109,000 for the nine-months
ended  September  30,  2003,  from  $12,655,000  in the same period of 2002. The
increase  was attributable to growth of $145,776,000 in average interest-earning
assets  and a lower cost of funds. The growth consisted of new mortgage loans of
$129,755,000  and  new  security  and  short-term  investments  aggregating
$16,021,000,  which  was  funded by $111,975,000 of new deposits, $15,499,000 of
additional  borrowed  funds  and a $13,790,000 increase in stockholders' equity.

The  Company's  net  interest margin increased to 2.99% in the 2003 period, from
2.94%  in  the  2002 period. The increase was due to the Company's cost of funds
decreasing  at  a  faster  pace than its yield on interest-earning assets.  In a
declining  interest  rate  environment, the yield on interest-earning assets for
the 2003 period decreased 61 bp to 6.85%, while cost of funds decreased 68 bp to
4.24%.  The  reasons  for  the  decreases are the same as those discussed in the
"Comparison  of  Results of Operations for the Quarters Ended September 30, 2003
and  2002."

The  table  below  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.  For  a further
description  of  the table, see the section "Comparison of Results of Operations
for  the  Quarters  Ended  September  30,  2003  and  2002."

<TABLE>
<CAPTION>
                                                   --------------------------------------------------------------
                                                                         Nine-Months Ended
                                                   --------------------------------------------------------------
                                                         September 30, 2003            September 30, 2002
                                                   ------------------------------  ------------------------------
                                                    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                                            $557,961   $   34,455    8.26%  $428,206   $   29,046    9.07%
  Securities                                        138,155        2,266    2.19    133,491        2,889    2.89
  Other interest-earning assets                      25,118          219    1.17     13,761          180    1.75
-----------------------------------------------------------------------------------------------------------------
Total interest-earning assets                       721,234   $   36,940    6.85%   575,458   $   32,115    7.46%
-----------------------------------------------------------------------------------------------------------------
Noninterest-earning assets                           13,793                          14,654
-----------------------------------------------------------------------------------------------------------------
Total assets                                       $735,027                        $590,112
-----------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
  Interest checking deposits                       $ 11,229   $      140    1.67%  $  9,535   $      173    2.43%
  Savings deposits                                   31,679          457    1.93     28,958          590    2.72
  Money market deposits                             141,842        2,043    1.93    115,010        2,318    2.69
  Certificates of deposit                           352,139       10,881    4.13    271,517        9,791    4.82
-----------------------------------------------------------------------------------------------------------------
Total deposit accounts                              536,889       13,521    3.37    425,020       12,872    4.05
-----------------------------------------------------------------------------------------------------------------
  Federal funds purchased                                 -            -       -        114            2    1.96
  Debentures and related interest payable           103,456        6,134    7.93     88,644        5,451    8.22
  Junior debentures - capital securities             15,769        1,162    9.85     15,000        1,123   10.01
  Note payable                                          262           14    7.00        230           12    7.00
-----------------------------------------------------------------------------------------------------------------
Total borrowed funds                                119,487        7,310    8.18    103,988        6,588    8.47
-----------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities                  656,376   $   20,831    4.24%   529,008   $   19,460    4.92%
-----------------------------------------------------------------------------------------------------------------
Noninterest-bearing deposits                          5,306                           5,200
Noninterest-bearing liabilities                      16,604                          12,953
Stockholders' equity                                 56,741                          42,951
-----------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity         $735,027                        $590,112
-----------------------------------------------------------------------------------------------------------------
Net interest and dividend income/spread                       $   16,109    2.61%             $   12,655    2.54%
-----------------------------------------------------------------------------------------------------------------
Net interest-earning assets/margin                 $ 64,858                 2.99%  $ 46,450                 2.94%
-----------------------------------------------------------------------------------------------------------------
Ratio of total interest-earning assets
  to total interest-bearing liabilities                1.10                           1.09x
-----------------------------------------------------------------------------------------------------------------
OTHER RATIOS:
  Return on average assets (1)                         1.25%                           1.13%
  Return on average equity  (1)                       16.21%                          15.51%
  Noninterest expense to average assets (1)            0.99%                           1.07%
  Efficiency ratio (2)                                   29%                             34%
  Average stockholders' equity to average assets       7.72%                           7.28%
-----------------------------------------------------------------------------------------------------------------
<FN>
(1) Annualized
(2)  Defined  as noninterest expenses as a percentage of net interest income before the provision for loan losses
plus  noninterest  income.
</TABLE>


                                       24
<PAGE>
PROVISION  FOR  LOAN  LOSS  RESERVES
------------------------------------

The provision for loan losses was $1,376,000 for the nine-months ended September
30  2003,  versus  $964,000  in  the  same period of 2002. The provisions were a
function  of loan growth ($143,502,000 in the 2003 period and $86,934,000 in the
2002  period).

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

Noninterest  income increased $1,155,000 to $2,543,000 for the nine-months ended
September  30 2003, from $1,388,000 in the same period of 2002. The increase was
due  to  higher income from loan prepayments and increased fees earned from loan
commitments  that  expired  during  the  period  of  $905,000  and  $146,000,
respectively.

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

Noninterest  expenses increased $739,000 to $5,475,000 for the nine-months ended
September  30 2003, from $4,736,000 in the same period of 2002. The increase was
largely  due  to the following: a $404,000 increase in compensation and benefits
expense;  a $114,000 increase in data processing expense; a $107,000 increase in
operational  charges;  a  $83,000  increase  in  director  expense and a $36,000
increase  in  FDIC  and  general  insurance  expense. These items were partially
offset  by  a $47,000 decrease in occupancy and equipment expenses and a $12,000
decrease  in  advertising  expense.

The  increase in compensation and benefits expense was due to $336,000 resulting
from  additional  staff  (60 employees at September 30, 2003 vs. 56 at September
30, 2002), salary increases and a higher cost of employee benefits, and $309,000
associated  with  common stock warrants held by employees and directors (largely
as  a  result  of an increase in the Company's Class A common stock price during
the period). These items were partially offset by a $127,000 increase in SFAS 91
direct fee income (due to increased loan originations as well as a higher amount
recognized  per  loan  origination)  and  bonus payments of $114,000 made to the
Chairman  of  the  Company in 2002 that did not recur in 2003. See note 5 to the
condensed  consolidated  financial  statements  in  this  report for information
regarding  common  stock  warrants.

The  increase  in  operational  charges  was  a direct function of growth in the
Bank's  transactional  deposit  accounts.  The  increase  in  FDIC  and  general
insurance  expense  was due to higher FDIC premium expense due to deposit growth
and  higher  general  insurance  premiums due to rate increases. The decrease in
advertising  expenses  was  due  to  less  advertising  for  loans and deposits.

The  reasons  for  the  changes in data processing expense, director expense and
occupancy  and equipment expenses are the same as those discussed in the section
"Comparison  of  Results of Operations for the Quarters Ended September 30, 2003
and  2002."

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

The  provision  for  income  taxes  increased  $1,556,000  to $4,903,000 for the
nine-months ended September 30 2003, from $3,347,000 in the same period of 2002,
due  to  higher  pre-tax  income. The Company's effective tax rate (inclusive of
state  and  local taxes) amounted to 41.5% in the 2003 period, compared to 40.1%
in  the  2002  period.  The  higher  rate for the 2003 period is due to a larger
portion  of consolidated taxable income being generated from New York, which has
a  higher  income  tax  rate  than  Florida.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market  risk  is  the  risk  of  loss  from adverse changes in market prices and
interest  rates.  The  Company's market risk arises primarily from interest rate
risk  inherent in its lending and deposit-taking activities, and the issuance of
its  debentures.  The  Company  has  not  engaged in and accordingly has no risk
related to trading accounts, commodities or foreign exchange. The measurement of
market  risk  associated  with financial instruments is meaningful only when all
related and offsetting on-and off-balance sheet transactions are aggregated, and
the  resulting net positions are identified. Disclosures about the fair value of
financial  instruments  as of December 31, 2002, which reflect changes in market
prices  and  rates,  can  be  found  in  note  20  to the consolidated financial
statements  included  in  the  Company's Annual Report on Form 10-K for the year
ended  December  31,  2002.

Management  actively  monitors  and  manages  the  Company's  interest rate risk
exposure.  The  primary  objective  in  managing interest rate risk is to limit,
within  its  established  guidelines,  the adverse impact of changes in interest
rates  on  the  Company's  net  interest income and capital, 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


                                       25
<PAGE>
control  interest  rate  risk.  However,  a  sudden  and substantial increase in
interest rates could adversely impact the Company's earnings, to the extent that
the  interest  rates  borne  by assets and liabilities do not change at the same
speed,  to the same extent, or on the same basis. Management believes that there
have  been  no  significant  changes in the Company's market risk exposure since
December  31,  2002.

ITEM 4.  CONTROLS AND PROCEDURES

(a)  Evaluation  of  disclosure  controls and procedures.  The Company maintains
     ----------------------------------------------------
controls  and  procedures  designed  to  ensure  that information required to be
disclosed  in the reports that the Company files or submits under the Securities
Exchange  Act of 1934 is recorded, processed, summarized and reported within the
time  periods  specified  in  the rules and forms of the Securities and Exchange
Commission.  Based  upon  their  evaluation  of  those  controls  and procedures
performed  within 90 days of the filing date of this report, the Chief Executive
and  Chief  Financial  Officer  of  the  Company  concluded  that  the Company's
disclosure  controls  and  procedures  were  adequate.

(b)  Changes  in internal controls.   The Company made no significant changes in
     ------------------------------
its  internal controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation of those controls by the Chief
Executive  and  Chief  Financial  Officer.

PART II. OTHER INFORMATION

ITEM  1.  LEGAL  PROCEEDINGS

     Not  Applicable

ITEM  2.  CHANGES  IN  SECURITIES  AND  USE  OF  PROCEEDS

(a)  Not  Applicable

(b)  Not  Applicable

(c)  Not  Applicable

(d)  Not  Applicable

ITEM  3.  DEFAULTS  UPON  SENIOR  SECURITIES

     Not  Applicable

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

(a)  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)  The following exhibits are filed as part of this report.
          31   -  Certification of the principal executive and financial officer
               pursuant  to  Section  302  of  The  Sarbanes-Oxley  Act of 2002.

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

(b)  A  current  report  on  Form  8-K dated September 17, 2003 was filed by the
     registrant to report, under Item 9, to report the completion of the sale of
     Trust  Preferred  Securities.

     A  current  report  on  Form  8-K  dated  July  15,  2003  was filed by the
     registrant  to  provide,  under  Item  9, to furnish its quarterly earnings
     release  for  the  period  ended  June  30,  2003.


                                       26
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                                   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, 2003             By: /s/ Lowell S. Dansker
                                    -------------------------
                                    Lowell S. Dansker, Vice Chairman, President
                                    and Treasurer (Principal Executive and
                                    Financial Officer)



Date: November 12, 2003             By: /s/ Lawrence G. Bergman
                                    ---------------------------
                                    Lawrence G. Bergman, Vice President and
                                    Secretary


                                       27
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