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

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

           (X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                        THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004
                                                 --------------


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

Class A Common Stock, $1.00 par value per share  5,663,075 Outstanding at April 30, 2004
-----------------------------------------------  ---------------------------------------

Class B Common Stock, $1.00 par value per share  385,000 Outstanding at April 30, 2004
-----------------------------------------------  ---------------------------------------
</TABLE>

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


<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                                 MARCH 31, 2004
                                TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION                                               Page
                                                                            ----

  ITEM 1.     FINANCIAL STATEMENTS

     Condensed Consolidated Balance Sheets
       as of March 31, 2004 (Unaudited) and December 31, 2003 . . . . . . . .  2

     Condensed Consolidated Statements of Earnings (Unaudited)
       for the Quarters Ended March 31, 2004 and 2003 . . . . . . . . . . . .  3

     Condensed Consolidated Statements of Changes in Stockholders'
       Equity (Unaudited) for the Quarters Ended March 31, 2004 and 2003  . .  4

     Condensed Consolidated Statements of Cash Flows (Unaudited)
       for the Quarters Ended March 31, 2004 and 2003 . . . . . . . . . . . .  5

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

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

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

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

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

  ITEM 4.     CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . . . 23

PART II.  OTHER INFORMATION

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

  ITEM 2.     CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES
                OF EQUITY SECURITIES  . . . . . . . . . . . . . . . . . . . . 24

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

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

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

  ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K  . . . . . . . . . . . . . . . 24

SIGNATURES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25


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>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
                                     CONDENSED CONSOLIDATED BALANCE SHEETS


                                                                                                  MARCH 31,    DECEMBER 31,
($in thousands, except par value)                                                                    2004          2003
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                              <C>           <C>
ASSETS                                                                                            (Unaudited)
Cash and due from banks                                                                          $     11,075  $       8,833
Federal funds sold                                                                                     41,783         36,816
Commercial paper                                                                                            -          5,580
Other short-term investments                                                                           12,518         12,899
                                                                                                 ---------------------------
    Total cash and cash equivalents                                                                    65,376         64,128
Securities held to maturity, net (estimated fair value of $142,584 and $152,995,  respectively)       142,116        152,823
Federal Reserve Bank and Federal Home Loan Bank stock, at cost                                          3,255          3,075
Loans receivable (net of allowance for loan losses of $7,657 and $6,580, respectively)                755,451        664,545
Accrued interest receivable                                                                             4,916          4,995
Loan fees receivable                                                                                    6,050          5,622
Premises and equipment, net                                                                             5,665          5,752
Deferred income tax asset                                                                               3,447          2,960
Deferred debenture offering costs, net                                                                  4,808          4,023
Other assets                                                                                            1,926          3,600
============================================================================================================================
TOTAL ASSETS                                                                                     $    993,010  $     911,523
============================================================================================================================
LIABILITIES
Deposits:
  Noninterest-bearing demand deposit accounts                                                    $      6,162  $       6,210
  Interest-bearing deposit accounts:
    Checking (NOW) accounts                                                                             9,947          9,146
    Savings accounts                                                                                   31,234         30,784
    Money market accounts                                                                             177,822        162,214
    Certificate of deposit accounts                                                                   511,985        467,159
                                                                                                 ---------------------------
Total deposit accounts                                                                                737,150        675,513
Subordinated debentures                                                                                95,560         94,690
Subordinated debentures - capital securities                                                           46,392         30,928
Accrued interest payable on all debentures                                                             12,830         14,510
Mortgage note payable                                                                                     252            255
Accrued interest payable on deposits                                                                    1,153          1,080
Mortgage escrow funds payable                                                                          14,697         10,540
Official checks outstanding                                                                             1,900          6,122
Other liabilities                                                                                       4,325          2,500
----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES                                                                                     914,259        836,138
----------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock (300,000 shares authorized, none issued)                                                    -              -
Class A common stock ($1.00 par value, 9,500,000 shares authorized,
   5,663,075 and 5,603,377 shares issued and outstanding, respectively)                                 5,663          5,603
Class B common stock ($1.00 par value, 700,000 shares authorized,
   385,000 shares issued and outstanding)                                                                 385            385
Additional paid-in-capital, common                                                                     36,559         35,988
Retained earnings                                                                                      36,144         33,409
----------------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY                                                                             78,751         75,385
============================================================================================================================
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                       $    993,010  $     911,523
============================================================================================================================
See accompanying notes to condensed consolidated financial statements.
</TABLE>


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


                                                                       QUARTER ENDED
                                                                          MARCH 31,
                                                                   ----------------------
($in thousands, except per share data)                                2004        2003
-----------------------------------------------------------------------------------------
<S>                                                                <C>          <C>
INTEREST AND DIVIDEND INCOME
Loans receivable                                                   $   13,792   $ 10,670
Securities                                                                705        887
Other interest-earning assets                                              96         68
-----------------------------------------------------------------------------------------
TOTAL INTEREST AND DIVIDEND INCOME                                     14,593     11,625
-----------------------------------------------------------------------------------------


INTEREST EXPENSE
Deposits                                                                5,312      4,453
Subordinated debentures                                                 2,233      1,957
Subordinated debentures - capital securities                              666        374
Mortgage note payable                                                       4          4
-----------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE                                                  8,215      6,788
-----------------------------------------------------------------------------------------

NET INTEREST AND DIVIDEND INCOME                                        6,378      4,837
Provision for loan losses                                               1,077        344
-----------------------------------------------------------------------------------------
NET INTEREST AND DIVIDEND INCOME AFTER PROVISION FOR LOAN LOSSES        5,301      4,493
-----------------------------------------------------------------------------------------

NONINTEREST INCOME
Customer service fees                                                      59         38
Income from mortgage lending activities                                   190        153
Income from the early repayment of mortgage loans                       1,156        141
Commission and fees                                                        56          -
Loss from early call of investment securities                              (5)        (3)
-----------------------------------------------------------------------------------------
TOTAL NONINTEREST INCOME                                                1,456        329
-----------------------------------------------------------------------------------------


NONINTEREST EXPENSES
Salaries and employee benefits                                            961        867
Occupancy and equipment, net                                              344        320
Data processing                                                           129        148
Professional fees and services                                            103        107
Stationery, printing and supplies                                          44         42
Postage and delivery                                                       25         25
FDIC and general insurance                                                 64         57
Director and committee fees                                                88         25
Advertising and promotion                                                  13         15
All other                                                                 147        178
-----------------------------------------------------------------------------------------
TOTAL NONINTEREST EXPENSES                                              1,918      1,784
-----------------------------------------------------------------------------------------
Earnings before income taxes                                            4,839      3,038
Provision for income taxes                                              2,104      1,237
=========================================================================================
NET EARNINGS                                                       $    2,735   $  1,801
=========================================================================================

BASIC EARNINGS PER SHARE                                           $     0.45   $   0.38
DILUTED EARNINGS PER SHARE                                         $     0.41   $   0.32
DIVIDENDS PER SHARE                                                $        -   $      -
-----------------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
</TABLE>


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

                                                                            QUARTER ENDED MARCH 31,
                                                                    ---------------------------------------
                                                                           2004        |        2003
                                                                    ---------------------------------------
($ in thousands)                                                     SHARES    AMOUNT  |  SHARES    AMOUNT
---------------------------------------------------------------------------------------|-------------------
<S>                                                                 <C>        <C>       <C>        <C>
                                                                                       |
CLASS A COMMON STOCK                                                                   |
Balance at beginning of period                                      5,603,377  $ 5,603 | 4,348,087  $ 4,348
Issuance of shares upon the exercise of warrants                       42,510       43 |         -        -
Issuance of shares upon the conversion of debentures                   17,188       17 |         -        -
---------------------------------------------------------------------------------------|-------------------
Balance at end of period                                            5,663,075    5,663 | 4,348,087    4,348
---------------------------------------------------------------------------------------|-------------------
                                                                                       |
CLASS B COMMON STOCK                                                                   |
---------------------------------------------------------------------------------------|-------------------
Balance at beginning and end of period                                385,000      385 |   355,000      355
---------------------------------------------------------------------------------------|-------------------
                                                                                       |
ADDITIONAL PAID-IN-CAPITAL, COMMON                                                     |
Balance at beginning of period                                                  35,988 |             24,134
Compensation related to vesting of certain Class B stock warrants                    7 |                  6
Compensation related to certain Class A stock warrants modified                      - |                 67
Issuance of shares upon the exercise of warrants                                   383 |                  -
Issuance of shares upon the conversion of debentures                               181 |                  -
---------------------------------------------------------------------------------------|-------------------
Balance at end of period                                                        36,559 |             24,207
---------------------------------------------------------------------------------------|-------------------
                                                                                       |
RETAINED EARNINGS                                                                      |
Balance at beginning of period                                                  33,409 |             24,289
Net earnings for the period                                                      2,735 |              1,801
---------------------------------------------------------------------------------------|-------------------
Balance at end of period                                                        36,144 |             26,090
---------------------------------------------------------------------------------------|-------------------
                                                                                       |
=======================================================================================|===================
TOTAL STOCKHOLDERS' EQUITY AT END OF PERIOD                         6,048,075  $78,751 | 4,703,087  $55,000
=======================================================================================|===================
See accompanying notes to condensed consolidated financial statements.
</TABLE>


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

                                                                                         QUARTER ENDED
                                                                                           MARCH 31,
                                                                                      --------------------
($in thousands)                                                                         2004       2003
----------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>        <C>
OPERATING ACTIVITIES
Net earnings                                                                          $  2,735   $  1,801
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization                                                              176        131
Provision for loan losses                                                                1,077        344
Deferred income tax benefit                                                               (487)      (248)
Amortization of deferred debenture offering costs                                          315        245
Compensation expense related to common stock warrants                                        7         73
Amortization of premiums, fees and discounts, net                                         (575)      (197)
Net (decrease) increase in accrued interest payable on debentures                       (1,607)       473
Net decrease in official checks outstanding                                             (4,222)    (2,256)
Net change in all other assets and liabilities                                           5,780      1,097
----------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES                                                3,199      1,463
----------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Maturities and calls of securities held to maturity                                     24,315     27,665
Purchases of securities held to maturity                                               (14,220)   (19,815)
Net increase in loans receivable                                                       (92,889)   (43,112)
Purchases of Federal Reserve Bank and Federal Home Loan Bank stock, net                   (180)        (6)
Purchases of premises and equipment, net                                                   (89)       (62)
Investment in unconsolidated subsidiaries                                                 (464)         -
----------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES                                                  (83,527)   (35,330)
----------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Net increase in deposits                                                                61,637     32,140
Net increase in mortgage escrow funds payable                                            4,157      3,065
Principal repayments of debentures and mortgage note payable                            (9,003)    (1,403)
Gross proceeds from issuance of debentures                                              25,464      7,500
Debenture issuance costs                                                                (1,105)      (554)
Proceeds from issuance of common stock                                                     426          -
----------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                               81,576     40,748
----------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents                                                1,248      6,881
Cash and cash equivalents at beginning of period                                        64,128     30,849
==========================================================================================================
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                            $ 65,376   $ 37,730
==========================================================================================================

SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
  Interest                                                                            $  9,434   $  6,036
  Income taxes                                                                           1,508        963
Noncash activities:
  Conversion of debentures and accrued interest into Class A common stock                  203          -
----------------------------------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
</TABLE>


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

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

The  condensed  consolidated  financial  statements  of  Intervest  Bancshares
Corporation  and  Subsidiaries  in  this report have not been audited except for
information  derived from the 2003 audited consolidated financial statements and
notes  thereto.  The  condensed consolidated financial statements in this report
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,  2003.

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

Intervest  Statutory  Trust  I,  II  and II are wholly owned subsidiaries of the
Holding  Company  that  are  unconsolidated  entities  as  required  by  FASB
Interpretation  No. 46, "Consolidation of Variable Interest Entities" as revised
in  December  2003.  FIN  46  requires  bank  holding  companies  that have used
controlled  business  trusts  to  raise  financing  by  issuing  trust preferred
securities  (capital  securities)  to  deconsolidate  their investments in those
trusts.  The  Company  adopted  FIN  46  in  the  first  quarter of 2004 and the
deconsolidation  of  Intervest Statutory Trust I and II, which were formed prior
to  FIN  46,  increased  both  the  Company's  total  assets  and borrowed funds
previously  reported  at  December  31,  2003  by  $968,000.

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

NOTE 2 - DESCRIPTION OF BUSINESS

The  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 issues debt
securities  to  raise funds for working capital purposes. The Company's business
segment  is  banking.

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 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  and  junior  mortgage loans. Intervest Mortgage Corporation
issues  debentures  to  provide  funding  for  its  business.

Intervest  Securities  Corporation is a broker/dealer and a NASD and SIPC member
firm  located  at  10  Rockefeller  Plaza in New York City. 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


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

NOTE 2 - DESCRIPTION OF BUSINESS - CONTINUED
the  outstanding  capital  stock of Intervest Securities Corporation in exchange
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. The
acquisition  was  accounted  for  at  historical  cost.  No  restatements of the
Company's  prior  period consolidated financial statements were made because the
financial  results  of  Intervest  Securities  Corporation  were  diminimus.

Intervest  Statutory  Trust  I,  Intervest  Statutory  Trust  II  and  Intervest
Statutory Trust III were formed in December 2001, September 2003 and March 2004,
respectively.  Each was formed for the sole purpose of issuing and administering
capital  securities as discussed in note 5 below.  The Trusts do not conduct any
trade  or  business.

The  Company  expects  to  be  moving from its present New York locations to the
entire  fourth  floor  of  One  Rockefeller  Plaza in New York City in May 2004.

NOTE 3 - LOANS RECEIVABLE

<TABLE>
<CAPTION>
Loans receivable is summarized as follows:
                                          At March 31, 2004     At December 31, 2003
                                         ---------------------  ---------------------
($in thousands)                          # of Loans   Amount    # of Loans   Amount
-------------------------------------------------------------------------------------
<S>                                      <C>         <C>        <C>         <C>

Commercial real estate loans                    199  $407,064          184  $344,071
Residential multifamily loans                   225   342,527          210   310,650
Land development and other land loans             6    20,484            6    20,526
Residential 1-4 family loans                      3       130           26     1,628
Commercial business loans                        24     1,339           28     1,662
Consumer loans                                   13       201           16       319
------------------------------------------------------------------------------------
Loans receivable                                470   771,745          470   678,856
------------------------------------------------------------------------------------
Deferred loan fees                                     (8,637)                (7,731)
------------------------------------------------------------------------------------
Loans receivable, net of deferred fees                763,108                671,125
------------------------------------------------------------------------------------
Allowance for loan losses                              (7,657)                (6,580)
------------------------------------------------------------------------------------
Loans receivable, net                                $755,451               $664,545
------------------------------------------------------------------------------------
</TABLE>

At  March  31,  2004, one real estate loan with a princpal balance of $1,036,000
was on nonaccrual status, compared to two real estate loans (aggregate principal
balance  of $8,474,000) at December 31, 2003. The loans were considered impaired
but  no valuation allowance was maintained since the estimated fair value of the
underlying  properties  exceeded  the  Company's  recorded  investment. Interest
income  that  was not recorded on nonaccrual loans under their contractual terms
was  $28,000  for  the  first  quarter of 2004 and none for the first quarter of
2003.  At  March  31,  2004  and December 31, 2003, there were no other impaired
loans  or  loans  ninety  days  past  due  and  still  accruing  interest.

NOTE 4 - ALLOWANCE FOR LOAN LOSSES

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

<TABLE>
<CAPTION>
                                                         Quarter Ended March 31,
                                                         -----------------------
($in thousands)                                            2004           2003
--------------------------------------------------------------------------------
<S>                                                     <C>             <C>
Balance at beginning of period                          $  6,580        $  4,611
Provision charged to operations                            1,077             344
--------------------------------------------------------------------------------
Balance at end of period                                $  7,657        $  4,955
--------------------------------------------------------------------------------
</TABLE>

NOTE 5 - DEPOSITS

Scheduled  maturities  of  certificates  of  deposit  accounts  are  as follows:

<TABLE>
<CAPTION>
                             At March 31, 2004       At December 31, 2003
                             -----------------       --------------------
                                       Wtd-Avg                 Wtd-Avg
($in thousands)             Amount   Stated Rate    Amount   Stated Rate
-------------------------------------------------------------------------
<S>                        <C>       <C>           <C>       <C>

Within one year            $208,062         2.72%  $182,693         2.75%
Over one to two years        97,576         3.49     90,936         3.64
Over two to three years      32,465         4.54     30,094         4.43
Over three to four years     94,168         4.67     89,085         4.83
Over four years              79,714         4.19     74,351         4.20
-------------------------------------------------------------------------
                           $511,985         3.57%  $467,159         3.66%
-------------------------------------------------------------------------
</TABLE>


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

NOTE 6 - SUBORDINATED DEBENTURES AND MORTGAGE NOTE PAYABLE

Subordinated  debentures  and  mortgage  note  payable  are  summarized  as  follows:

                                                                           At March 31,   At December 31,
                                                                           -------------  ----------------
($in thousands)                                                                2004             2003
----------------------------------------------------------------------------------------------------------
<S>                                                                        <C>            <C>
INTERVEST MORTGAGE CORPORATION:
Series 05/12/95 - interest at 2% above prime (1) - due April 1, 2004       $           -  $          9,000
Series 10/19/95 - interest at 2% above prime (1) - due October 1, 2004             9,000             9,000
Series 05/10/96 - interest at 2% above prime (1) - due April 1, 2005              10,000            10,000
Series 10/15/96 - interest at 2% above prime (1) - due October 1, 2005             5,500             5,500
Series 04/30/97 - interest at 1% above prime (1) - due October 1, 2005             8,000             8,000
Series 11/10/98 - interest at 9% fixed           - due January 1, 2005             2,600             2,600
Series 06/28/99 - interest at 8 1/2% fixed       - due July 1, 2004                2,000             2,000
Series 06/28/99 - interest at 9% fixed           - due July 1, 2006                2,000             2,000
Series 09/18/00 - interest at 8 1/2% fixed       - due January 1, 2006             1,250             1,250
Series 09/18/00 - interest at 9% fixed           - due January 1, 2008             1,250             1,250
Series 08/01/01 - interest at 7 1/2% fixed       - due April 1, 2005               1,750             1,750
Series 08/01/01 - interest at 8% fixed           - due April 1, 2007               2,750             2,750
Series 08/01/01 - interest at 8 1/2% fixed       - due April 1, 2009               2,750             2,750
Series 01/17/02 - interest at 7 1/4% fixed       - due October 1, 2005             1,250             1,250
Series 01/17/02 - interest at 7 1/2% fixed       - due October 1, 2007             2,250             2,250
Series 01/17/02 - interest at 7 3/4% fixed       - due October 1, 2009             2,250             2,250
Series 08/05/02 - interest at 7 1/4% fixed       - due January 1, 2006             1,750             1,750
Series 08/05/02 - interest at 7 1/2% fixed       - due January 1, 2008             3,000             3,000
Series 08/05/02 - interest at 7 3/4% fixed       - due January 1, 2010             3,000             3,000
Series 01/21/03 - interest at 6 3/4% fixed       - due July 1, 2006                1,500             1,500
Series 01/21/03 - interest at 7% fixed           - due July 1, 2008                3,000             3,000
Series 01/21/03 - interest at 7 1/4% fixed       - due July 1, 2010                3,000             3,000
Series 07/25/03 - interest at 6 1/2% fixed       - due October 1, 2006             2,500             2,500
Series 07/25/03 - interest at 6 3/4% fixed       - due October 1, 2008             3,000             3,000
Series 07/25/03 - interest at 7% fixed           - due October 1, 2010             3,000             3,000
Series 11/28/03 - interest at 6 1/4% fixed       - due April 1, 2007               2,000                 -
Series 11/28/03 - interest at 6 1/2% fixed       - due April 1, 2009               3,500                 -
Series 11/28/03 - interest at 6 3/4% fixed       - due April 1, 2011               4,500                 -
                                                                           -------------------------------
                                                                                  88,350            87,350
INTERVEST BANCSHARES CORPORATION:
Series 05/14/98 - interest at 8% fixed           - due July 1, 2008                4,710             4,840
Series 12/15/00 - interest at 8 1/2% fixed       - due April 1, 2006               1,250             1,250
Series 12/15/00 - interest at 9% fixed           - due April 1, 2008               1,250             1,250
                                                                           -------------------------------
                                                                                   7,210             7,340
INTERVEST NATIONAL BANK:
Mortgage note payable - interest at 7% fixed     - due February 1, 2017              252               255
----------------------------------------------------------------------------------------------------------
                                                                           $      95,812  $         94,945
----------------------------------------------------------------------------------------------------------
<FN>
(1) Prime represents prime rate of JPMorganChase Bank, which was 4.00% on March 31, 2004 and December 31,
    2003. The debentures have a maximum interest rate of 12%.
</TABLE>

In January 2004, Intervest Mortgage Corporation issued $10,000,000 of its Series
11/28/03  debentures  for  net  proceeds,  after  offering costs, of $9,252,000.

On March 1, 2004, Intervest Mortgage Corporation's Series 5/12/95 debentures due
April 1, 2004 were redeemed for $9,000,000 of principal and $2,749,00 of accrued
interest.

Intervest  Mortgage  Corporation  intends  to  redeem  on May 1, 2004 its Series
6/28/99  debentures due July 1, 2004 for $2,000,000 of principal and $980,000 of
accrued interest through the redemption date. Intervest Mortgage Corporation has
filed  an  offering  to  issue additional debentures of up to $11,500,000 in the
second  quarter  of  2004.


                                        8
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 6 - SUBORDINATED DEBENTURES AND MORTGAGE NOTE PAYABLE, CONTINUED

Interest is paid quarterly on Intervest Mortgage Corporation's debentures except
for  the  following  debentures:  $1,950,000  of  Series 10/19/95; $1,980,000 of
Series  5/10/96;  all of 11/10/98, 6/28/99, 9/18/00; $770,000 of Series 8/01/01;
$270,000  of  Series  1/17/02;  $1,520,000  of Series 8/05/02; and $1,750,000 of
Series  11/28/03,  which  accrue  and  compound  interest  quarterly,  with such
interest  due and payable at maturity. Any holder of Series 10/19/95 and 5/10/96
debentures  whose  interest accrues and is due at maturity may at any time elect
to  receive  the  accrued  interest and subsequently receive regular payments of
interest.

The  holders of Intervest Mortgage Corporation's Series 11/10/98 through 9/18/00
and  1/17/02  through  11/28/03  debentures  can  require  Intervest  Mortgage
Corporation  to  repurchase the debentures for face amount plus accrued interest
each  year  (beginning  October 1, 2005 for Series 01/17/02, January 1, 2006 for
Series  08/05/02,  July  1,  2006 for Series 1/21/03, October 1, 2006 for Series
7/25/03  and  January  1,  2007  for  Series  11/28/03) provided, however, in no
calendar  year  will Intervest Mortgage Corporation be required to purchase more
than  $100,000  in  principal  amount  of  each  maturity,  in  each  series  of
debentures,  on  a  non-cumulative  basis.

Intervest Mortgage Corporation's debentures may be redeemed at its option at any
time,  in  whole  or  in  part,  for  face  value, except for Series 7/25/03 and
11/28/03. Redemptions would be at a premium of 1% if they occurred prior to July
1,  2004  for  Series  7/25/03  and January 1, 2005 for Series 11/28/03. All the
debentures  are  unsecured  and  subordinate  to  all  present and future senior
indebtedness,  as  defined  in  the  indenture  related  to  each  debenture.

The  Holding Company's Series 5/14/98 subordinated debentures are convertible at
the  option of the holders at any time prior to April 1, 2008, unless previously
redeemed  by the Holding Company, into shares of its Class A common stock at the
following conversion prices per share: $12.00 in 2004; $14.00 in 2005; $16.00 in
2006;  $18.00 in 2007 and $20.00 from January 1, 2008 through April 1, 2008. The
Holding  Company has the right to establish conversion prices that are less than
those set forth above for such periods as it may determine. In the first quarter
of  2004,  $203,000  of debentures ($130,000 of principal and $73,000 of accrued
interest)  were  converted  into  shares  of  Class  A  common  stock.

At March 31, 2004, interest accrues and compounds quarterly on $4,040,000 of the
convertible  debentures  at  the  rate  of  8%  per annum, while $670,000 of the
debentures  pay  interest  quarterly  at  the  rate of 8% per annum. All accrued
interest  is  due and payable at maturity whether by acceleration, redemption or
otherwise.  Any  convertible  debenture  holder may, on or before July 1 of each
year elect to be paid all accrued interest and to thereafter receive payments of
interest  quarterly. All of the Holding Company's debentures may be redeemed, in
whole  or  in  part,  at  any time at the option of the Holding Company for face
value.

The  mortgage  note payable cannot be prepaid except during the last year of its
term.

Scheduled  contractual  maturities  as  of  March  31,  2004  are  as  follows:

<TABLE>
<CAPTION>
($in thousands)                               Principal   Accrued Interest
---------------------------------------------------------------------------
<S>                                           <C>         <C>
For the nine months ended December 31, 2004   $   11,010  $           4,213
For the year ended December 31, 2005              29,116              3,469
For the year ended December 31, 2006              10,269              1,491
For the year ended December 31, 2007               7,022                 80
For the year ended December 31, 2008              16,235              2,860
Thereafter                                        22,160                200
---------------------------------------------------------------------------
                                              $   95,812  $          12,313
---------------------------------------------------------------------------
</TABLE>

NOTE 7 - SUBORDINATED DEBENTURES - CAPITAL SECURITIES

Capital Securities (commonly referred to as Trust Preferred Securities) are
summarized as follows:

<TABLE>
<CAPTION>
                                                              At March 31, 2004    At December 31, 2003
                                                            ---------------------  ---------------------
                                                                         Accrued                Accrued
($in thousands)                                             Principal   Interest   Principal   Interest
--------------------------------------------------------------------------------------------------------
<S>                                                         <C>         <C>        <C>         <C>

Capital Securities I -  debentures due December 18, 2031    $   15,464  $     441  $   15,464  $      58
Capital Securities II - debentures due September 17, 2033       15,464         41      15,464         39
Capital Securities III - debentures due March 17, 2034          15,464         35           -          -
--------------------------------------------------------------------------------------------------------
                                                            $   46,392  $     517  $   30,928  $      97
--------------------------------------------------------------------------------------------------------
</TABLE>


                                        9
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 7 - SUBORDINATED DEBENTURES - CAPITAL SECURITIES, CONTINUED

The  Capital  Securities  are  obligations of the Holding Company's wholly owned
statutory  business  trusts, Intervest Statutory Trust I, II and III. Each Trust
was  formed with a capital contribution of $464,000 from the Holding Company and
for  the  sole  purpose  of  issuing  and  administering Capital Securities. The
proceeds  from  the issuance of the Capital Securities together with the capital
contribution  for  each  Trust were used to acquire the Holding Company's Junior
Subordinated  Debentures  that are due concurrently with the Capital Securities.
The  Capital  Securities  currently qualify as regulatory capital (see note 10).

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.
Issuance  costs  of  $469,000,  $444,000  and  $440,000  associated with Capital
Securities  I,  II  and  III, respectively, have been capitalized by the Holding
Company  and  are  being  amortized  over  the  life of the securities using the
straight-line  method.

Cash  distributions  are  payable  in arrears as follows: Capital Securities I -
semi-annually  at  the fixed rate of 9.875% per annum on December 18 and June 18
of  each year; Capital Securities II - quarterly 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;  Capital Securities III - quarterly on March 17, June 17, September 17
and  December  17  of each year based on a fixed rate of 5.88% per annum for the
first  five  years  and thereafter at the rate of 2.79% over 3 month libor until
maturity.

All  of  the  Capital Securities are subject to mandatory redemption as follows:
(i)  in  whole,  but  not  in  part,  upon  repayment of the Junior Subordinated
Debentures  at stated maturity or earlier, at the option of the Holding Company,
within  90  days following the occurrence and continuation of certain changes in
the  tax or capital treatment of the Capital Securities, or a change in law such
that the Trust would be considered an investment company, contemporaneously with
the redemption by the Holding Company of the Junior Subordinated Debentures; and
(ii)  in  whole or in part at any time on or after December 18, 2006 for Capital
Securities  I,  September  17, 2008 for Capital Securities II and March 17, 2009
for  Capital  Securities  III, contemporaneously with the optional redemption by
the  Holding  Company of the Junior Subordinated Debentures in whole or in part.
Any  redemption  would  need  prior  regulatory  approvals.

NOTE 8 - COMMON STOCK WARRANTS

At  March  31,  2004,  the  Holding  Company  has  696,465 common stock warrants
outstanding  that  entitle  its  holder, the Chairman of the Holding Company, to
purchase  one share of common stock for each warrant. All warrants are currently
exercisable,  except  for  certain  Class  B  common  stock  warrants.

<TABLE>
<CAPTION>

Data concerning common stock warrants is as follows:

                                                       Exercise Price Per Warrant
                                                       ------------------------------     Total          Wtd-Avg
Class A Common Stock Warrants:                         $          6.67  $      10.01   Warrants   Exercise Price
-----------------------------------------------------------------------------------------------------------------
<S>                                                    <C>              <C>            <C>        <C>
Outstanding at December 31, 2003                               501,465        42,510    543,975   $          6.93
Exercised during the first three months of 2004                      -       (42,510)   (42,510)  $         10.01
------------------------------------------------------------------------------------------------
Outstanding at March 31, 2004                                  501,465             -    501,465   $          6.67
------------------------------------------------------------------------------------------------
Remaining contractual life in years at March 31, 2004              2.8             -        2.8
------------------------------------------------------------------------------------------------
<FN>
(1) The holders of the 42,510 warrants outstanding at December 31, 2003 presented these warrants to the Company
    for exercise prior to the expiration date of December 31, 2003. The resulting shares were issued in January 2004.
</TABLE>

<TABLE>
<CAPTION>
                                                           Exercise Price Per Warrant
                                                       ------------------------------     Total         Wtd-Avg
Class B Common Stock Warrants:                         $          6.67  $   10.00 (1)  Warrants  Exercise Price
----------------------------------------------------------------------------------------------------------------
<S>                                                    <C>              <C>            <C>       <C>
Outstanding at December 31, 2003 and March 31, 2004            145,000        50,000    195,000  $          7.52
-----------------------------------------------------------------------------------------------
Remaining contractual life in years at March 31, 2004              3.8           3.8        3.8
----------------------------------------------------------------------------------------------------------------
<FN>
(1) At December 31, 2003 and March 31, 2004, 42,600 of these warrants were immediately exercisable. An
    additional 7,100 warrants vested and became exercisable on April 27th of 2004.
</TABLE>


                                       10
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 8 - COMMON STOCK WARRANTS, CONTINUED

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

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

<TABLE>
<CAPTION>
                                                                 Quarter Ended
                                                                    March 31,
                                                              --------------------
($ in thousands)                                                 2004       2003
----------------------------------------------------------------------------------
<S>                                                           <C>         <C>
Compensation expense recorded in connection with vesting
     of Class B warrants during the period                    $        7  $      6
Compensation expense recorded in connection with
    Class A common stock warrants whose terms were modified            -        67
----------------------------------------------------------------------------------
                                                              $        7  $     73
----------------------------------------------------------------------------------
</TABLE>

NOTE 9 - 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
and  dilutive  potential  common  stock  shares  that  may be outstanding in the
future.  Potential  common  stock  shares consist of outstanding dilutive common
stock  warrants  (which  are  computed  using  the  "treasury stock method") and
convertible  debentures  (computed using 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 earnings (as adjusted for interest expense 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
                                                                                March 31,
                                                                         ----------------------
($ in thousands, except share and per share amounts)                        2004        2003
-----------------------------------------------------------------------------------------------
<S>                                                                      <C>         <C>

Basic earnings per share:
  Net earnings applicable to common stockholders                         $    2,735  $    1,801
  Average number of common shares outstanding                             6,042,847   4,703,087
-----------------------------------------------------------------------------------------------
Basic net earnings per share amount                                      $     0.45  $     0.38
-----------------------------------------------------------------------------------------------
Diluted earnings per share:
  Net earnings applicable to common stockholders                         $    2,735  $    1,801
  Adjustment to net earnings from assumed conversion of debentures (1)           82         114
                                                                         ----------------------
  Adjusted net earnings for diluted earnings per share computation       $    2,817  $    1,915
                                                                         ----------------------
Average number of common shares outstanding:
  Common shares outstanding                                               6,042,847   4,703,087
  Potential dilutive shares resulting from exercise of warrants (2)         253,362     230,516
  Potential dilutive shares resulting from conversion of debentures (3)     592,279   1,010,803
                                                                         ----------------------
Total average number of common shares outstanding used for dilution       6,888,488   5,944,406
-----------------------------------------------------------------------------------------------
Diluted net earnings per share amount                                    $     0.41  $     0.32
-----------------------------------------------------------------------------------------------
<FN>
(1)  Represents interest expense on dilutive convertible debentures, net of taxes, that
     would not occur if they were assumed converted.
(2)  All outstanding warrants were considered for the EPS computations.
(3)  Convertible debentures (principal and accrued interest) outstanding at March 31, 2004
     and 2003 totaling $7,069,000 and $10,118,000, respectively, were convertible into common stock
     at a price of $12.00 per share in 2004 and $10.01 per share in 2003 and resulted in additional
     common shares (based on average balances outstanding) .
</TABLE>


                                       11
<PAGE>
                INTERVEST BANCSHARES CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 10 - REGULATORY CAPITAL

The  Bank  and  the  Holding Company are required to maintain regulatory defined
minimum  Tier  1  leverage  and  Tier  1  and  total  risk-based capital ratios.
Management  believes  that  the  Bank and the Holding Company meet their capital
adequacy  requirements.

Management  believes  that there are no current conditions or events outstanding
which  would  change  the  Bank's designation as a well-capitalized institution.

At  March  31, 2004, 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                     13.41%         8.00%             10.00%
     Tier 1 capital to risk-weighted assets                    12.37%         4.00%              6.00%
     Tier 1 capital to total average assets - leverage ratio   10.87%         4.00%              5.00%
</TABLE>

At  March  31,  2004,  the actual capital of the Holding Company 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                     15.47%         8.00%               NA
     Tier 1 capital to risk-weighted assets                    12.28%         4.00%               NA
     Tier 1 capital to total average assets - leverage ratio   10.75%         4.00%               NA
</TABLE>

On  January  1,  2004,  the  Company  adopted  FASB  Interpretation  No.  46,
"Consolidation  of Variable Interest Entities" ("FIN 46") as revised in December
2003.  FIN 46 requires bank holding companies that have used controlled business
trusts  to  raise  financing  by  issuing  trust  preferred  securities (capital
securities)  to  deconsolidate  their investments in those trusts.  At March 31,
2004,  the  Company has $45,000,000 of qualifying capital securities outstanding
that  are  included  in  regulatory  capital  computations.

The  Federal  Reserve  continues  to  require  bank holding companies to include
eligible  trust  preferred  securities  in Tier I capital for regulatory capital
purposes  until  further  notice.  The  Federal  Reserve  intends  to review the
regulatory implications of any accounting treatment changes brought about by FIN
46  and,  if  necessary,  it  will provide further regulatory guidance. However,
there  can  be  no  assurance  that  the  Federal Reserve will continue to allow
institutions  to  include  trust  preferred  securities  in  Tier  I capital for
regulatory  capital purposes. As of March 31, 2004, assuming the Company was not
allowed  to  treat  any  of the trust preferred securities as Tier 1 Capital, it
would  still  exceed  the  regulatory threshold for capital adequacy as follows:
total  capital  to  risk-weighted  assets  ratio  -  15.47%;  Tier  1 capital to
risk-weighted  assets  ratio - 9.11%; and Tier 1 capital to total average assets
(leverage  ratio)  -  7.97%.

Intervest  Securities  Corporation  is  subject to the SEC's Uniform Net Capital
Rule  [15c3-1  (a)  (2)  (vi)],  which  requires  the maintenance of minimum net
capital  of  $5,000.  At  March 31, 2004, Intervest Securities Corporation's net
capital  was  $469,000.


                                       12
<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 March
31, 2004 and for the three-month periods ended March 31, 2004 and 2003 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.


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

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

We  have  reviewed  the  accompanying  condensed  consolidated  balance sheet of
Intervest  Bancshares  Corporation  and Subsidiaries (the "Company") as of March
31,  2004 and the related condensed consolidated statements of earnings, changes
in  stockholders'  equity and cash flows for the three-month periods ended March
31,  2004  and  2003.  These  financial statements are the responsibility of the
Company's  management.

We  were  furnished with the report of other accountants on their reviews of the
interim  financial  information  of  Intervest Mortgage Corporation, whose total
assets as of March 31, 2004 constituted 10.1% of the related consolidated total,
and  whose  net  interest  income,  noninterest  income and net earnings for the
three-month period then ended, constituted 5.0%, 20.5%, and 18.8%, respectively,
and  whose  net  interest  income,  noninterest  income and net earnings for the
three-month  period  ended  March  31,  2003, constituted 9.0%, 18.5% and 15.8%,
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 reports 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,  2003,  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 February 6,
2004,  with  respect to note 3 dated March 16, 2004, we, based on our audits 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, 2003 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
May 10, 2004


                                       14
<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 March 31, 2004, and the
related  condensed  consolidated  statements  of  operations,  changes  in
stockholder's  equity and cash flows for the three-month periods ended March 31,
2004  and  2003  (all  of  which  are  not  presented  separately herein). These
financial  statements  are  the  responsibility  of  the  Company's  management.

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, 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, 2003 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 February 3, 2004, 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, 2003 (not presented separately herein) is fairly stated
in  all  material  respects  in  relation to the consolidated balance sheet from
which  it  has  been  derived.



/s/ Eisner, LLP
-----------------
EISNER,LLP
New York, New York
April 19, 2004


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

                                     GENERAL
                                     -------

At  March  31,  2004,  Intervest  Bancshares  Corporation has three wholly owned
consolidated  subsidiaries  -  Intervest  National  Bank,  Intervest  Mortgage
Corporation  and  Intervest  Securities  Corporation  (hereafter  referred  to
collectively  as  the  "Company"  on a consolidated basis). Intervest Bancshares
Corporation  and  Intervest National Bank may be referred to individually as the
"Holding Company" and the "Bank," respectively. Intervest Bancshares Corporation
also  has  three  wholly  owned unconsolidated subsidiaries, Intervest Statutory
Trust  I,  Intervest Statutory Trust II and Intervest Statutory Trust III. For a
discussion  of  the Company's business, see note 2 to the condensed consolidated
financial  statements  in  this  report.

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

The  Company's  profitability  is  also affected by the level of its noninterest
income  and  expenses,  provision  for  loan losses and provision for income tax
expense.  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.

The  Company's  profitability  is significantly affected by general economic and
competitive  conditions,  changes  in market interest rates, government policies
and  actions  of  regulatory  authorities.  The  Company's  loan  portfolio  has
historically  been  concentrated  in  commercial  real  estate  and  multifamily
mortgage  loans.  The  properties  underlying  the  Company's mortgages are also
concentrated  in  New York State and the State of Florida.  Many of the New York
properties are located in New York City and are subject to rent control and rent
stabilization  laws,  which limit the ability of the property owners to increase
rents.  Credit  risk,  which  represents  the  possibility  of  the  Company not
recovering  amounts  due  from  its borrowers, is significantly related to local
economic  conditions  in  the  areas  the properties are located, as well as the
Company's underwriting standards. Economic conditions affect the market value of
the underlying collateral as well as the levels of occupancy of income-producing
properties.  Additionally,  terrorist  acts,  such  as  those  that  occurred on
September  11,  2001, and armed conflicts, such as the recent Gulf War, may have
an  adverse  impact  on  economic  conditions.

    COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2004 AND DECEMBER 31, 2003
    -------------------------------------------------------------------------

OVERVIEW
--------

Total  assets  at March 31, 2004 increased to $993,010,000, from $911,523,000 at
December  31,  2003.  Total  liabilities  at  March  31,  2004  increased  to
$914,259,000,  from  $836,138,000 at December 31, 2003, and stockholders' equity
increased  to  $78,751,000 at March 31, 2004, from $75,385,000 at year-end 2003.
Book  value  per  common  share increased to $13.02 per share at March 31, 2004,
from  $12.59  at  December  31,  2003.

On  January  1,  2004,  the  Company  adopted  FASB  Interpretation  No.  46,
"Consolidation  of Variable Interest Entities" ("FIN 46") as revised in December
2003.  FIN 46 requires bank holding companies that have used controlled business
trusts to raise financing by issuing trust preferred securities to deconsolidate
their  investments  in  those  trusts.  The  adoption  of FIN 46 resulted in the
deconsolidation  of the Company's common stock investment in Intervest Statutory
I  and  Intervest  Statutory II, which increased both the Company's total assets
and  borrowed  funds  previously  reported  at  December  31,  2003 by $968,000.


                                       16
<PAGE>
Selected  balance  sheet  information  as  of  March  31,  2004  follows:

<TABLE>
<CAPTION>
                                                          Intervest    Intervest    Intervest      Inter-
                                               Holding    National     Mortgage    Securities     Company
($ in thousands)                               Company      Bank         Corp.        Corp.     Amounts (1)    Combined
------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>        <C>          <C>          <C>          <C>           <C>
Cash and cash equivalents                     $  4,961   $   60,640   $   23,449   $       475  $   (24,149)  $  65,376
Security investments                                 -      145,371            -             -            -     145,371
Loans receivable, net of deferred fees          15,939      654,823       92,346             -            -     763,108
Allowance for loan losses                          (85)      (7,340)        (232)            -            -      (7,657)
Investment in consolidated subsidiaries        110,969            -            -             -     (110,969)          -
All other assets                                 3,582       18,320        5,097             -         (187)     26,812
------------------------------------------------------------------------------------------------------------------------
Total assets                                  $135,366   $  871,814   $  120,660   $       475  $  (135,305)  $ 993,010
------------------------------------------------------------------------------------------------------------------------
Deposits                                      $      -   $  761,555   $        -   $         -  $   (24,405)  $ 737,150
Borrowed funds and related interest payable     56,533          252       98,249             -            -     155,034
All other liabilities                               82       19,193        2,725             6           69      22,075
------------------------------------------------------------------------------------------------------------------------
Total liabilities                               56,615      781,000      100,974             6      (24,336)    914,259
------------------------------------------------------------------------------------------------------------------------
Stockholders' equity                            78,751       90,814       19,686           469     (110,969)     78,751
------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity    $135,366   $  871,814   $  120,660   $       475  $  (135,305)  $ 993,010
------------------------------------------------------------------------------------------------------------------------

<FN>
(1)  All significant intercompany balances and transactions are eliminated in consolidation. Such amounts arise
     largely from intercompany  deposit  accounts  and  investments.
</TABLE>

A  comparison  of  selected  balance  sheet information as of March 31, 2004 and
December  31,  2003  follows:

<TABLE>
<CAPTION>
                                                                    At March 31, 2004       At December 31, 2003
                                                                 ------------------------  -----------------------
                                                                 Carrying       % of       Carrying       % of
($ in thousands)                                                   Value    Total Assets     Value    Total Assets
-------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>        <C>            <C>        <C>
Cash and cash equivalents                                        $  65,376           6.6%  $  64,128           7.0%
Security investments                                               145,371          14.6     155,898          17.1
Loans receivable, net of deferred fees and loan loss allowance     755,451          76.1     664,545          72.9
All other assets                                                    26,812           2.7      26,952           3.0
-------------------------------------------------------------------------------------------------------------------
Total assets                                                     $ 993,010         100.0%  $ 911,523         100.0%
-------------------------------------------------------------------------------------------------------------------
Deposits                                                         $ 737,150          74.2%  $ 675,513          74.1%
Borrowed funds and related interest payable                        155,034          15.6     140,383          15.4
All other liabilities                                               22,075           2.3      20,242           2.2
-------------------------------------------------------------------------------------------------------------------
Total liabilities                                                  914,259          92.1     836,138          91.7
-------------------------------------------------------------------------------------------------------------------
Stockholders' equity                                                78,751           7.9      75,385           8.3
-------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                       $ 993,010         100.0%  $ 911,523         100.0%
-------------------------------------------------------------------------------------------------------------------
</TABLE>

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

Cash  and cash equivalents amounted to $65,376,000 at March 31, 2004, relatively
unchanged  from  $64,128,000  at  December  31,  2003.

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

Securities  held  to  maturity decreased to $142,116,000 at March 31, 2004, from
$152,823,000  at December 31, 2003. The decrease was due to maturities and early
calls  exceeding  new  purchases  during  the  period.  The  composition  of the
portfolio  was  relatively  unchanged  from  December  31,  2003.

The  Bank's  total  investment  in the Federal Reserve Bank and the Federal Home
Loan  Bank  of  New  York  stock increased to $3,255,000 at March 31, 2004, from
$3,075,000  at  December  31,  2003,  due  to  an  additional purchase of stock.

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

Loans  receivable,  net  of  deferred  fees  and  the allowance for loan losses,
increased  to  $755,451,000 at March 31, 2004, from $664,545,000 at December 31,
2003.  The  growth  reflected  new  originations  of  commercial real estate and
multifamily  mortgage  loans, partially offset by principal repayments. New loan
originations  amounted to $162,690,000 in the first quarter of 2004, compared to
$71,389,000  in  the  first  quarter  of  2003.


                                       17
<PAGE>
In  March  2004,  two  real  estate loans with an aggregate principal balance of
$8,474,000  that  were  on nonaccrual status and considered impaired at December
31,  2003  were  brought  current  and returned to an accrual status. During the
quarter, a real estate loan with a principal balance of $1,036,000 was placed on
nonaccrual  status  and  is  considered  impaired. For additional information on
loans,  see  note  3  to the condensed consolidated financial statements in this
report.

At  March  31,  2004,  the  allowance  for  loan  losses amounted to $7,657,000,
compared  to $6,580,000 at December 31, 2003. The allowance represented 1.00% of
total  loans  (net  of deferred fees) outstanding at March 31, 2004 and 0.98% at
December  31,  2003.  The  increase  in  the  allowance  was  due  to provisions
aggregating  $1,077,000  during  the  period  resulting  from loan growth. For a
further discussion of the criteria the Company uses to determine the adequacy of
the  allowance,  see pages 21 and 22 in the Company's Annual Report on Form 10-K
for  the  year  ended  December  31,  2003.

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

All  other  assets  in the table on page 17 amounted to $26,812,000 at March 31,
2004,  relatively  unchanged  from  $26,952,000  at  December  31,  2003.

DEPOSITS
--------

Deposits  increased  to  $737,150,000  at  March  31, 2004, from $675,513,000 at
December  31,  2003,  primarily  reflecting  increases  in  money  market  and
certificate of deposit accounts of $15,608,000 and $44,826,000, respectively. At
March  31,  2004,  certificate  of  deposit  accounts  totaled  $511,985,000 and
checking,  savings  and  money market accounts aggregated $225,165,000. The same
categories  of  deposit  accounts  totaled  $467,159,000  and  $208,354,000,
respectively,  at December 31, 2003. Certificate of deposit accounts represented
69%  of  total  deposits  at  March  31,  2004  and  December  31,  2003.

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

At  March  31,  2004,  borrowed  funds and related interest payable increased to
$155,034,000, from $140,383,000 at year-end 2003. The increase was primarily due
to  the issuance of Series 11/28/03 debentures by Intervest Mortgage Corporation
totaling  $10,000,000  and  the  issuance  of  $15,464,000  of debentures by the
Holding  company  to  its  wholly  owned  unconsolidated  subsidiary,  Intervest
Statutory  Trust  III.  These  increases  were partially offset by the repayment
($9,000,000 of principal and $2,749,000 of accrued interest) on March 1, 2004 of
Intervest  Mortgage  Corporation's  Series 5/12/95 debentures due April 1, 2004.
For  further  information  on  borrowed  funds and related interest payable, see
notes  6  and  7  to the condensed consolidated financial statements included in
this  report.

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

All  other liabilities in the table on page 17 increased to $22,075,000 at March
31,  2004,  from $20,242,000 at December 31, 2003, primarily due to increases in
mortgage  escrow  funds  payable  ($4,157,000)  and  income  taxes  payable
($1,083,000),  partially  offset  by  a  decease  in official checks outstanding
($4,222,000).

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

Stockholders'  equity  increased  to  $78,751,000  at  March  31,  2004,  from
$75,385,000  at  year-end  2003  as  follows:

<TABLE>
<CAPTION>
     ($ in thousands)                                                    Amount    Shares
     --------------------------------------------------------------------------------------
<S>                                                                      <C>      <C>
     Stockholders' equity at December 31, 2003                           $75,385  5,988,377
     Net earnings for the period                                           2,735          -
     Class A common stock warrants exercised                                 426     42,510
     Convertible debentures converted at election of debenture holders       198     17,188
     Compensation expense on warrants held by employee and directors           7          -
     --------------------------------------------------------------------------------------
     Stockholders' equity at March 31, 2004                              $78,751  6,048,075
     --------------------------------------------------------------------------------------
</TABLE>

                         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 established guidelines,
the  adverse  impact  of changes in interest rates on the Company's net interest
income  and  capital.


                                       18
<PAGE>
The  Company  uses  "gap  analysis,"  which  measures  the  difference  between
interest-earning  assets and interest-bearing liabilities that mature or reprice
within  a  given  time  period,  to monitor its interest rate sensitivity. For a
further  discussion  of  the assumptions used in preparing the gap analysis, see
pages  27  and 28 of the Company's Annual Report on Form 10-K for the year ended
December  31,  2003.

The  Company's  one-year  positive  interest  rate  sensitivity  gap  remained
relatively  unchanged  at  $116,233,000,  or 11.7% of total assets, at March 31,
2004,  compared  to $118,124,000, or 13.0% at December 31, 2003. For purposes of
computing the gap, all deposits with no stated maturities are treated as readily
accessible  accounts.  However,  if such deposits were treated differently, then
the gap would change. The behavior of core depositors may not necessarily result
in  the  immediate withdrawal of funds in the event deposit rates offered by the
Bank did not change as quickly and uniformly as changes in general market rates.
For  example, if only 25% of deposits with no stated maturity were assumed to be
readily  accessible,  the one-year gap would have been a positive 28.3% at March
31,  2004,  compared  to  a  positive  29.6%  at  year-end  2003.

The  table  below  summarizes  interest-earning  assets  and  interest-bearing
liabilities as of March 31, 2004, 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)                                    $233,167   $220,346   $ 211,655   $106,577   $771,745
Securities held to maturity (2)                17,387     61,661      63,068          -    142,116
Short-term investments                         54,301          -           -          -     54,301
FRB and FHLB stock                              1,691          -           -      1,564      3,255
---------------------------------------------------------------------------------------------------
Total rate-sensitive assets                  $306,546   $282,007   $ 274,723   $108,141   $971,417
---------------------------------------------------------------------------------------------------
Deposit accounts (3):
  Interest checking deposits                 $  9,947   $      -   $       -   $      -   $  9,947
  Savings deposits                             31,234          -           -          -     31,234
  Money market deposits                       177,822          -           -          -    177,822
  Certificates of deposit                      33,428    174,634     224,209     79,714    511,985
                                             ------------------------------------------------------
  Total deposits                              252,431    174,634     224,209     79,714    730,988
Debentures and mortgage note payable (1)       34,500      2,600      24,500     34,212     95,812
Debentures payable - capital securities (1)         -          -           -     46,392     46,392
Accrued interest on all debentures (1)          6,584      1,571       2,129      2,546     12,830
---------------------------------------------------------------------------------------------------
Total rate-sensitive liabilities             $293,515   $178,805   $ 250,838   $162,864   $886,022
---------------------------------------------------------------------------------------------------
GAP (repricing differences)                  $ 13,031   $103,202   $  23,885   $(54,723)  $ 85,395
---------------------------------------------------------------------------------------------------
Cumulative GAP                               $ 13,031   $116,233   $ 140,118   $ 85,395   $ 85,395
---------------------------------------------------------------------------------------------------
Cumulative GAP to total assets                    1.3%      11.7%       14.1%       8.6%       8.6%
---------------------------------------------------------------------------------------------------
</TABLE>
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.

                                    LIQUIDITY
                                    ---------

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


                                       19
<PAGE>
secured  basis  of  up  to  $135,000,000  in aggregate at March 31 2004 based on
available  collateral.  The  Bank  also  has agreements with correspondent banks
whereby  it  can  borrow  on an overnight, unsecured basis of up to $16,000,000.


                     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
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  condensed  consolidated  balance  sheets. The Company's maximum exposure to
credit  risk  is represented by the contractual amount of those instruments. The
Company  uses  the  same  credit  policies  in making commitments as it does for
on-balance  sheet  instruments.  Commitments  to extend credit are agreements to
lend  funds  to  a  customer  as  long as there is no violation of any condition
established  in  the  contract. Such commitments generally have fixed expiration
dates  or  other  termination  clauses  and  may  require  payment  of  fees.

Since  some  of the commitments are expected to expire without being drawn upon,
the  total  commitment  amount  does  not  necessarily  represent  future  cash
requirements.  The  Company  evaluates  each  customer's  creditworthiness  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 contractual amounts of the Company's off-balance sheet financial instruments
is  as  follows:

<TABLE>
<CAPTION>
                                     At           At
                                 ----------  -------------
                                 March 31,   December 31,
                                 ----------  -------------
     ($ in thousands)               2004         2003
     -----------------------------------------------------
<S>                              <C>         <C>
     Unfunded loan commitments   $  235,163  $     123,791
     Available lines of credit          892            825
     Standby letters of credit          100            100
     -----------------------------------------------------
                                 $  236,155  $     124,716
     -----------------------------------------------------
</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 MARCH 31, 2004 AND
   -----------------------------------------------------------------------------
                                      2003
                                      ----
OVERVIEW
--------

Consolidated  net  earnings  for  the  first  quarter  of  2004 increased 52% to
$2,735,000,  from  $1,801,000 for the same quarter of 2003. Diluted earnings per
share  increased  to  $0.41 in the first quarter of 2004, from $0.32 in the 2003
first  quarter.  The  diluted  per  share computation for 2004 included a higher
number  of common shares outstanding resulting from the exercise of common stock
warrants  and  conversion of debentures that occurred in the later part of 2003.

The  $934,000 improvement in quarterly earnings was attributable to increases in
both  net  interest and dividend income and noninterest income. Net interest and
dividend  income  was higher by $1,541,000 while noninterest income increased by
$1,127,000.  The increase in income was partially offset primarily by a $733,000
increase  in  the  provision  for  loan  losses  and  a $867,000 increase in the
provision  for  income  taxes.

Selected  information  regarding  results of operations for the first quarter of
2004  follows:

<TABLE>
<CAPTION>
                                                                Intervest   Intervest    Intervest      Inter-
                                                                National     Mortgage   Securities     Company
($in thousands)                              Holding Company      Bank        Corp.        Corp.     Amounts (1)   Consolidated
--------------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>                <C>          <C>         <C>          <C>           <C>
Interest and dividend income                $            295   $   12,019   $    2,336  $         1  $       (58)  $      14,593
Interest expense                                         879        5,374        2,020            -          (58)          8,215
                                            ------------------------------------------------------------------------------------
Net interest and dividend income                        (584)       6,645          316            1            -           6,378
Provision for loan losses                                  7        1,030           40            -            -           1,077
Noninterest income                                        75        1,102        1,140           56         (917)          1,456
Noninterest expenses                                      88        2,248          461           38         (917)          1,918
                                            ------------------------------------------------------------------------------------
Earnings before income taxes                            (604)       4,469          955           19            -           4,839
Provision for income taxes                              (279)       1,932          442            9            -           2,104
--------------------------------------------------------------------------------------------------------------------------------
Net earnings                                $           (325)  $    2,537   $      513  $        10  $         -   $       2,735
--------------------------------------------------------------------------------------------------------------------------------
Intercompany dividends (2)                               630         (630)           -            -            -               -
--------------------------------------------------------------------------------------------------------------------------------
Net earnings after intercompany dividends   $            305   $    1,907   $      513  $        10  $         -   $       2,735
--------------------------------------------------------------------------------------------------------------------------------
Net earnings after intercompany dividends
        for the same period of 2003         $             78   $    1,438   $      285  $         -  $         -   $       1,801
--------------------------------------------------------------------------------------------------------------------------------
<FN>
(1)  All  significant  intercompany  balances  and  transactions  are  eliminated  in  consolidation. Such amounts arise from
     intercompany  deposit  accounts  and  management  and  service  agreements.
(2)  Dividends  to the Holding Company from the Bank provide funds for the debt service on $45,000,000 of Capital Securities.
     The debt service is included in the Holding Company's interest expense. The proceeds from the Capital Securities are
     invested in  the  capital  of  the  Bank.
</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 $6,378,000 in the first quarter of
2004,  from $4,837,000 in the same period of 2003. The increase was attributable
to  a  $244,466,000 increase in average interest-earning assets. The increase in
average  interest-earning  assets  was  due  to  continued  growth  in  loans of
$216,596,000  and  a  higher  level  of  security  and  short-term  investments
aggregating  $27,870,000.  The  growth in average assets was funded primarily by
$183,355,000  of  new  deposits,  $32,983,000 of additional borrowed funds and a
$22,673,000  increase  in  stockholders'  equity  (resulting  from  earnings and
issuance  of shares upon the exercise of common stock warrants and conversion of
convertible  debentures).

The  Company's  net  interest  margin decreased to 2.75% in the first quarter of
2004,  from  2.85%  in  the  same  period  of  2003. The decrease was due to the
Company's  yield on interest-earning assets decreasing at a faster pace than its
cost  of  funds.

In  a  low  interest  rate  environment,  the  yield  on interest-earning assets
decreased  56  basis  points (bp) to 6.30% in the 2004 quarter, primarily 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 46 bp to 3.91% in the 2004 quarter due to lower rates
paid on deposit accounts and floating-rate debentures as well as the addition of
new debentures with lower rates than existing ones. The floating-rate debentures


                                       21
<PAGE>
are indexed to the JPMorgan Chase Bank prime rate, which decreased by a total of
25  bp  from  April  1,  2003  to  March  31,  2004.

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

<TABLE>
<CAPTION>
                                                   -------------------------------------------------------------
                                                                           Quarter Ended
                                                   -------------------------------------------------------------
                                                           March 31, 2004                   March 31, 2003
                                                   ------------------------------  -----------------------------
                                                    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 (1)                                        $725,785   $   13,792    7.64%  $509,189   $   10,670    8.50%
  Securities                                        165,475          705    1.71    158,120          887    2.28
  Other interest-earning assets                      40,555           96    0.95     20,040           68    1.38
----------------------------------------------------------------------------------------------------------------
Total interest-earning assets                       931,815   $   14,593    6.30%   687,349   $   11,625    6.86%
----------------------------------------------------------------------------------------------------------------
Noninterest-earning assets                           16,436                          15,084
----------------------------------------------------------------------------------------------------------------
Total assets                                       $948,251                        $702,433
----------------------------------------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
  Interest checking deposits                       $ 10,366   $       40    1.55%  $ 11,831   $       56    1.92%
  Savings deposits                                   30,993          137    1.78     31,174          162    2.11
  Money market deposits                             167,766          742    1.78    138,880          722    2.11
  Certificates of deposit                           488,813        4,393    3.61    333,768        3,513    4.27
----------------------------------------------------------------------------------------------------------------
Total deposit accounts                              697,938        5,312    3.06    515,653        4,453    3.50
----------------------------------------------------------------------------------------------------------------
  Debentures and related interest payable           113,159        2,233    7.94     98,641        1,957    8.05
  Debentures - capital securities                    33,477          666    8.00     15,000          374   10.10
  Mortgage note payable                                 253            4    7.04        265            4    6.87
----------------------------------------------------------------------------------------------------------------
Total borrowed funds                                146,889        2,903    7.95    113,906        2,335    8.31
----------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities                  844,827   $    8,215    3.91%   629,559   $    6,788    4.37%
----------------------------------------------------------------------------------------------------------------
Noninterest-bearing deposits                          6,179                           5,109
Noninterest-bearing liabilities                      20,822                          14,015
Stockholders' equity                                 76,423                          53,750
----------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity         $948,251                        $702,433
----------------------------------------------------------------------------------------------------------------
Net interest and dividend income/spread                       $    6,378    2.39%             $    4,837    2.49%
----------------------------------------------------------------------------------------------------------------
Net interest-earning assets/margin                 $ 86,988                 2.75%  $ 57,790                 2.85%
----------------------------------------------------------------------------------------------------------------
Ratio of total interest-earning assets
  to total interest-bearing liabilities                1.10                            1.09
----------------------------------------------------------------------------------------------------------------
OTHER RATIOS:
  Return on average assets (2)                         1.15%                           1.03%
  Return on average equity  (2)                       14.32%                          13.40%
  Noninterest expense to average assets (2)            0.81%                           1.02%
  Efficiency ratio (3)                                   24%                             35%
  Average stockholders' equity to average assets       8.06%                           7.65%
----------------------------------------------------------------------------------------------------------------
<FN>
(1) Includes nonaccrual loans.
(2) Annualized.
(3) Defined as noninterest expenses as a percentage of net interest income before the provision for loan losses
    plus noninterest income.
</TABLE>

PROVISION  FOR  LOAN  LOSSES
----------------------------

The  provision  for  loan losses increased to $1,077,000 in the first quarter of
2004,  from  $344,000  in  the  same  quarter of 2003. The provision is based on
management's ongoing assessment of the adequacy of the allowance for loan losses
that  takes  into consideration a number of factors as discussed on pages 21 and
22  in  the Company's Annual Report on Form 10-K for the year ended December 31,
2003.  The  higher provision for the 2004 quarter was a function of loan growth,


                                       22
<PAGE>
which  amounted  to  $92,889,000  in the 2004 quarter, versus $43,112,000 in the
2003  quarter.

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

Noninterest  income  increased  $1,127,000 to $1,456,000 in the first quarter of
2004,  from  $329,000  in the first quarter of 2003. The increase was nearly all
due  to  higher  income  from  the  prepayment of mortgage loans. 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  EXPENSES
---------------------

Noninterest expenses increased $134,000 to $1,918,000 in the first quarter 2004,
from  $1,784,000 in the first quarter of 2003. The increase was primarily due to
an  increase  in salary and employee benefits expense of $94,000 and an increase
in  director  expense  of  $63,000.

Salaries and employee benefits expense increased primarily due to the following:
$64,000  from  normal  salary  increases, a higher cost of employee benefits and
additional  staff  (62 employees at March 31, 2004 versus 60 at March 31, 2003);
and  bonus  payments aggregating $55,000 to certain executives of the Company in
connection with the sale of capital securities and leasing of new space in 2004.

Director  expense  increased due to higher fees paid to directors for each board
and  committee  meeting  attended  beginning  in  June  2003.

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

The  provision  for  income  taxes increased $867,000 to $2,104,000 in the first
quarter  of  2004,  from  $1,237,000 in the first quarter of 2003, due to higher
pre-tax  income  and a higher effective income tax rate. The Company's effective
tax  rate  (inclusive  of  state  and local taxes) amounted to 43.5% in the 2004
period, compared to 40.7% in the 2003 period. The higher rate is due to a larger
portion of consolidated taxable income being generated from New York operations,
which  is  taxed  at  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, 2003, 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,  2003.

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  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,  2003.

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.


                                       23
<PAGE>
(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, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY
          SECURITIES

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

ITEM  3.  DEFAULTS  UPON  SENIOR  SECURITIES
(a)     Not  Applicable
(b)     Not  Applicable

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

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

ITEM  5.  OTHER  INFORMATION

(a)     Not  Applicable
(c)     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  March  17,  2004 was filed by the
     registrant  to  report,  under  Item 9, the completion of the sale of Trust
     Preferred  Securities.

     A  current  report  on  Form  8-K  dated  April  13,  2004 was filed by the
     registrant  to  furnish,  under Item 12, its quarterly earnings release for
     the  period  ended  March  31,  2004.


                                       24
<PAGE>
                                   SIGNATURES



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




INTERVEST  BANCSHARES  CORPORATION  AND  SUBSIDIARIES

Date:  May 12, 2004                 By:  /s/ Lowell S. Dansker
                                    -------------------------------
                                    Lowell S. Dansker, Vice Chairman, President
                                    and Treasurer
                                     (Principal Executive and Financial Officer)



Date:  May 12, 2004                 By:  /s/ Lawrence G. Bergman
                                    ------------------------------
                                    Lawrence G. Bergman, Vice President and
                                    Secretary


                                       25
<PAGE>