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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005
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Commission File No. 33-27404-NY
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INTERVEST MORTGAGE CORPORATION
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(Exact name of registrant as specified in its charter)
New York 13-3415815
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(State or other jurisdiction (I.R.S. employer
of incorporation) identification no.)
ONE ROCKEFELLER PLAZA, SUITE 400
NEW YORK, NEW YORK 10020-2002
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(Address of principal executive offices)
(212) 218-2800
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days:
YES X NO
--- ---
Indicate by check mark whether the registrant is an accelerated filer (as
defined in rule 12b-2 of the Exchange Act): YES NO X
--- ---
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date:
Title of Each Class: Shares Outstanding:
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Common Stock, no par 100 shares outstanding at
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value per share April 30, 2005
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INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES
FORM 10-Q
MARCH 31, 2005
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page
----
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
as of March 31, 2005 (Unaudited) and December 31, 2004 . . . . . . . . . . . . 2
Condensed Consolidated Statements of Operations (Unaudited)
for the Three-Months Ended March 31, 2005 and 2004 . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Changes in Stockholder's Equity (Unaudited)
for the Three-Months Ended March 31, 2005 and 2004 . . . . . . . . . . . . . . 4
Condensed Consolidated Statements of Cash Flows (Unaudited)
for the Three-Months Ended March 31, 2005 and 2004. . . . . . . . . . . . . . 5
Notes to Condensed Consolidated Financial Statements (Unaudited) . . . . . . . . 6
Review by Independent Registered Public Accounting Firm. . . . . . . . . . . . . 11
Review Report of Independent Registered Public Accounting Firm . . . . . . . . . 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . 13
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . . . . . 18
ITEM 4. CONTROLS AND PROCEDURES. . . . . . . . . . . . . . . . . . . . . . . . 18
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. . . . . . 19
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. . . . . . . . . . . . . . . . . . . . 19
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. . . . . . . . . . 19
ITEM 5. OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ITEM 6. EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
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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 net interest income, other income or cash flow anticipated from the
Company's operations, investment and lending activities; and changes in laws and
regulations affecting the Company.
1
PART I. FINANCIAL INFORMATION
- --------------------------------
ITEM 1. FINANCIAL STATEMENTS
- -------------------------------
INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
($in thousands) 2005 2004
- -------------------------------------------------------------------------------------------------------------------------
(Unaudited)
ASSETS
Cash $ 15,471 $ 6,160
Short-term investments 11,029 10,991
------------ -------------
Total cash and cash equivalents 26,500 17,151
Mortgage loans receivable (net of unearned fees and discounts and allowance
for loan losses, notes 2 and 3) 88,084 100,188
Accrued interest receivable 642 497
Loan fees receivable 773 884
Fixed assets, net 81 88
Deferred debenture offering costs, net (note 4) 3,034 3,271
Other assets 341 372
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TOTAL ASSETS $ 119,455 $ 122,451
==========================================================================================================================
LIABILITIES
Mortgage escrow funds payable $ 1,784 $ 1,644
Subordinated debentures payable (note 5) 86,250 88,850
Debenture interest payable at maturity (note 5) 6,724 8,219
Other liabilities 544 211
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TOTAL LIABILITIES 95,302 98,924
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STOCKHOLDER'S EQUITY
Class A common stock (no par value, 200 shares authorized, 100 shares issued and outstanding) 2,100 2,100
Class B common stock (no par value, 100 shares authorized, none issued) - -
Additional paid-in-capital 11,510 11,510
Retained earnings 10,543 9,917
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TOTAL STOCKHOLDER'S EQUITY 24,153 23,527
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TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 119,455 $ 122,451
==========================================================================================================================
See accompanying notes to condensed consolidated financial statements.
2
INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
THREE-MONTHS ENDED
MARCH 31,
--------------------------------
($in thousands) 2005 2004
- -------------------------------------------------------------------------------------
REVENUES
Interest and fee income on mortgages $ 2,289 $ 2,250
Interest income on short-term investments 103 86
---------------- --------------
Total interest and fee income 2,392 2,336
Servicing agreement income - related party (note 6) 1,332 842
Gain on early repayment of mortgages 49 233
Other income 21 65
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TOTAL REVENUES 3,794 3,476
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EXPENSES
Interest on debentures 1,627 1,731
Amortization of deferred debenture offering costs 270 289
Provision for loan losses - 40
General and administrative 732 461
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TOTAL EXPENSES 2,629 2,521
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Income before income taxes 1,165 955
Provision for income taxes 539 442
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NET INCOME $ 626 $ 513
=====================================================================================
See accompanying notes to condensed consolidated financial statements.
3
INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(Unaudited)
THREE-MONTHS ENDED
MARCH 31,
--------------------------------
($in thousands) 2005 2004
- ----------------------------------------------------------------------------------------------------
CLASS A COMMON STOCK
- ----------------------------------------------------------------------------------------------------
Balance at beginning and end of period $ 2,100 $ 2,100
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ADDITIONAL PAID-IN-CAPITAL
Balance at beginning of period 11,510 8,510
Contributions from Parent Company - 1,000
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Balance at end of period 11,510 9,510
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RETAINED EARNINGS
Balance at beginning of period 9,917 7,563
Net income for the period 626 513
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Balance at end of period 10,543 8,076
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TOTAL STOCKHOLDER'S EQUITY AT END OF PERIOD $ 24,153 $ 19,686
====================================================================================================
See accompanying notes to condensed consolidated financial statements.
4
INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
THREE-MONTHS ENDED
MARCH 31,
------------------------
($in thousands) 2005 2004
- ------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income $ 626 $ 513
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 7 9
Provision for loan losses - 40
Amortization of deferred debenture offering costs 270 289
Amortization of premiums, fees and discounts, net (217) (225)
Gain on early repayment of mortgage loans receivable (49) (233)
Net increase in mortgage escrow funds payable 140 382
Net decrease in debenture interest payable at maturity (1,495) (2,153)
Net change in all other assets and liabilities, net 377 725
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NET CASH USED IN OPERATING ACTIVITIES (341) (653)
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INVESTING ACTIVITIES
Principal repayments of mortgage loans receivable 16,180 14,263
Originations of mortgage loans receivable (3,890) (17,297)
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NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 12,290 (3,034)
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FINANCING ACTIVITIES
Proceeds from issuance of debentures, net of offering costs - 9,335
Principal repayments of debentures (2,600) (9,000)
Capital contributions from Parent Company - 1,000
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NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (2,600) 1,335
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Net increase (decrease) in cash and cash equivalents 9,349 (2,352)
Cash and cash equivalents at beginning of period 17,151 25,772
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 26,500 $ 23,420
============================================================================================================
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
Interest $ 3,123 $ 3,884
Income taxes 176 240
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See accompanying notes to condensed consolidated financial statements.
5
INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1 - GENERAL
The condensed consolidated financial statements of Intervest Mortgage
Corporation and Subsidiaries (the "Company") in this report have not been
audited except for the information derived from the audited Consolidated Balance
Sheet as of December 31, 2004. The financial statements in this report should be
read in conjunction with the consolidated financial statements and related notes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2004.
The condensed consolidated financial statements include the accounts of
Intervest Mortgage Corporation and its wholly owned subsidiaries, Intervest
Distribution Corporation and Intervest Realty Servicing Corporation. All
material intercompany accounts and transactions have been eliminated in
consolidation.
The Company is a wholly owned subsidiary of Intervest Bancshares Corporation
(the "Parent Company"). Officers of the Company are Directors of the Company and
are officers, principal shareholders and Directors of the Parent Company.
The Company is engaged in the real estate business, including the origination
and purchase of real estate mortgage loans. The Company's investment policy
emphasizes the investment in mortgage loans on income producing properties. The
Company also provides loan origination services to Intervest National Bank, a
wholly owned subsidiary of the Parent Company.
In the opinion of management, all material adjustments necessary for a fair
presentation of financial condition and results of operations for the interim
periods presented in this report have been made. These adjustments are of a
normal recurring nature. The results of operations for the interim periods are
not necessarily indicative of results that may be expected for the entire year
or any other interim period. In preparing the condensed consolidated financial
statements, management is required to make estimates and assumptions that affect
the reported amounts of assets, liabilities, revenues and expenses. Actual
results could differ from those estimates. Certain reclassifications have been
made to prior period amounts to conform to the current periods' presentation.
NOTE 2 - MORTGAGE LOANS RECEIVABLE
Mortgage loans receivable are summarized as follows:
At March 31, 2005 At December 31, 2004
($in thousands) # of loans Amount # of loans Amount
- --------------------------------------------------------------------------------------------------------
Residential multifamily mortgage loans receivable 48 $ 49,357 52 $ 52,543
Commercial real estate mortgage loans receivable 37 35,379 40 38,121
Land and land development loans receivable 3 4,506 4 10,868
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Mortgage loans receivable 88 89,242 96 101,532
Deferred loan fees and unamortized discount (826) (1,012)
- --------------------------------------------------------------------------------------------------------
Mortgage loans receivable, net of fees and discount 88,416 100,520
Allowance for mortgage loan losses (332) (332)
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Mortgage loans receivable, net $ 88,084 $ 100,188
========================================================================================================
6
INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 2 - MORTGAGE LOANS RECEIVABLE, CONTINUED
The following table shows scheduled contractual principal repayments of the
mortgage loans receivable portfolio at March 31, 2005:
($in thousands)
- -----------------------------------------------------
For the nine-months ended December 31, 2005 $33,412
For the year ended December 31, 2006 26,764
For the year ended December 31, 2007 16,141
For the year ended December 31, 2008 1,995
For the year ended December 31, 2009 1,585
Thereafter 9,345
- -----------------------------------------------------
$89,242
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NOTE 3 - ALLOWANCE FOR MORTGAGE LOAN LOSSES
Activity in the allowance for mortgage loan losses for the periods indicated is
summarized as follows:
Three-Months Ended
March 31,
--------------------------------
($in thousands) 2005 2004
- ------------------------------------------------------------------
Balance at beginning of period $ 332 $ 191
Provision charged to operations - 40
- ------------------------------------------------------------------
Balance at end of period $ 332 $ 231
==================================================================
At March 31, 2005 and December 31, 2004, one loan with a principal balance of
$179,000 was on nonaccrual status. This loan is considered impaired under the
criteria of SFAS No.114. This loan is a second mortgage where Intervest National
Bank, an affiliated Company, holds the first mortgage. The Company's recorded
investment in this loan was $181,000 at March 31, 2005 and December 31, 2004.
The Company has commenced foreclosure proceedings against the borrower and
currently believes the estimated fair value of the underlying properties is
sufficient to provide for repayment of its recorded investment. The Company
believes that a specific valuation allowance was not required at any time for
impaired loans. At March 31, 2005 and December 31, 2004, there were no other
impaired loans or loans ninety days past due and still accruing interest.
Interest income that was not recorded on nonaccrual loans under their
contractual terms for the first quarter 2005 amounted to $5,000. There was no
such interest in the same period of 2004. The average balance of nonaccrual
(impaired) loans for the quarter ended March 31, 2005 was $179,000.
NOTE 4 - DEFERRED DEBENTURE OFFERING COSTS
Deferred debenture offering costs are summarized as follows:
At March 31, At December 31,
($in thousands) 2005 2004
- --------------------------------------------------------------------------
Deferred debenture offering costs $ 6,955 $ 7,079
Less accumulated amortization (3,921) (3,808)
- --------------------------------------------------------------------------
Deferred debenture offering costs, net $ 3,034 $ 3,271
==========================================================================
7
INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 5 - SUBORDINATED DEBENTURES PAYABLE
The following table summarizes debentures payable.
At March 31, At December 31,
------------- ----------------
($in thousands) 2005 2004
- ----------------------------------------------------------------------------------------------------------
Series 05/10/96 - interest at 2% above prime - due April 1, 2005 $ 10,000 $ 10,000
Series 10/15/96 - interest at 2% above prime - due October 1, 2005 5,500 5,500
Series 04/30/97 - interest at 1% above prime - due October 1, 2005 8,000 8,000
Series 11/10/98 - interest at 9% fixed - due January 1, 2005 - 2,600
Series 06/28/99 - interest at 9% fixed - due July 1, 2006 2,000 2,000
Series 09/18/00 - interest at 8 1/2% fixed - due January 1, 2006 1,250 1,250
Series 09/18/00 - interest at 9% fixed - due January 1, 2008 1,250 1,250
Series 08/01/01 - interest at 7 1/2 % fixed - due April 1, 2005 1,750 1,750
Series 08/01/01 - interest at 8% fixed - due April 1, 2007 2,750 2,750
Series 08/01/01 - interest at 8 1/2% fixed - due April 1, 2009 2,750 2,750
Series 01/17/02 - interest at 7 1/4% fixed - due October 1, 2005 1,250 1,250
Series 01/17/02 - interest at 7 1/2% fixed - due October 1, 2007 2,250 2,250
Series 01/17/02 - interest at 7 3/4% fixed - due October 1, 2009 2,250 2,250
Series 08/05/02 - interest at 7 1/4% fixed - due January 1, 2006 1,750 1,750
Series 08/05/02 - interest at 7 1/2% fixed - due January 1, 2008 3,000 3,000
Series 08/05/02 - interest at 7 3/4% fixed - due January 1, 2010 3,000 3,000
Series 01/21/03 - interest at 6 3/4% fixed - due July 1, 2006 1,500 1,500
Series 01/21/03 - interest at 7 % fixed - due July 1, 2008 3,000 3,000
Series 01/21/03 - interest at 7 1/4% fixed - due July 1, 2010 3,000 3,000
Series 07/25/03 - interest at 6 1/2% fixed - due October 1, 2006 2,500 2,500
Series 07/25/03 - interest at 6 3/4% fixed - due October 1, 2008 3,000 3,000
Series 07/25/03 - interest at 7 % fixed - due October 1, 2010 3,000 3,000
Series 11/28/03 - interest at 6 1/4% fixed - due April 1, 2007 2,000 2,000
Series 11/28/03 - interest at 6 1/2% fixed - due April 1, 2009 3,500 3,500
Series 11/28/03 - interest at 6 3/4% fixed - due April 1, 2011 4,500 4,500
Series 06/07/04 - interest at 6 1/4% fixed - due January 1, 2008 2,500 2,500
Series 06/07/04 - interest at 6 1/2% fixed - due January 1, 2010 4,000 4,000
Series 06/07/04 - interest at 6 3/4% fixed - due January 1, 2012 5,000 5,000
- ----------------------------------------------------------------------------------------------------------
$ 86,250 $ 88,850
==========================================================================================================
In the table above, prime represents the prime rate of JPMorganChase Bank, which
was 5.75% on March 31, 2005 and 5.25% on December 31, 2004. The floating rate
debentures have a maximum interest rate of 12%.
In April of 2005, the Company issued its Series 3/21/05 debentures in the
principal amount of $14,000,000. Net proceeds, after deferred offering costs,
amounted to approximately $12,975,000. On January 1, 2005, the Company's Series
11/10/98 debentures matured and were repaid for $2,600,000 of principal and
$1,859,000 of accrued interest. On April 1, 2005, the Company's Series 5/10/96
debentures matured and were repaid for $10,000,000 of principal and $ 2,218,000
of accrued interest. On April 1, 2005, the Company's Series 8/1/01 debentures
due April 1, 2005 matured and were repaid for $1,750,000 of principal and $
84,000 of accrued interest.
Interest is paid quarterly on the Company's debentures except for the following:
$1,980,000 of Series 5/10/96; all of 6/28/99, 9/18/00; $770,000 of Series
8/01/01; $270,000 of Series 1/17/02; $1,520,000 of Series 8/05/02; $1,750,000 of
Series 11/28/03; $1,910,000 of Series 6/7/04 debentures and $1,920,000 of Series
3/21/05, which accrue and compound interest quarterly, with such interest due
and payable at maturity.
8
INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 5 - SUBORDINATED DEBENTURES PAYABLE, CONTINUED
The holders of Series 6/28/99, 9/18/00 and 1/17/02 thru 3/21/05 debentures can
require the Company repurchase the debentures for face amount plus accrued
interest each year (beginning October 1, 2005 for Series 1/17/02, January 1,
2006 for Series 8/05/02, July 1, 2006 for Series 1/21/03, October 1, 2006 for
Series 7/25/03, January 1, 2007 for Series 11/28/03, January 1, 2008 for Series
6/7/04 and April 1, 2009 for Series 3/21/05) provided, however, in no calendar
year will the Company be required to purchase more than $100,000 in principal
amount of each maturity, in each series of debentures, on a non-cumulative
basis.
The Company's debentures may be redeemed at its option at any time, in whole or
in part, for face value, except for Series 6/7/04. Redemptions would be at a
premium of 1% if they occurred prior to July 1, 2005 for the Series 6/7/04
debentures or prior to October 1, 2006 for the Series 3/21/05 debentures. All
the debentures are unsecured and subordinate to all present and future senior
indebtedness, as defined in the indenture related to each debenture.
Scheduled contractual maturities of debentures as of March 31, 2005 are
summarized as follows:
($in thousands) Principal Accrued Interest
- ---------------------------------------------------------------------------
For the nine-months ending December 31, 2005 $ 26,500 $ 3,425
For the year ending December 31, 2006 9,000 1,952
For the year ending December 31, 2007 7,000 143
For the year ending December 31, 2008 12,750 742
For the year ending December 31, 2009 8,500 198
Thereafter 22,500 264
- ---------------------------------------------------------------------------
$ 86,250 $ 6,724
===========================================================================
NOTE 6 - RELATED PARTY TRANSACTIONS
From time to time, the Company participates with Intervest National Bank
(another wholly owned subsidiary of the Parent Company) in certain mortgage
loans receivable. The Company had no participations outstanding with Intervest
National Bank at March 31, 2005 and December 31, 2004.
The Company has a servicing agreement with Intervest National Bank under which
the company provides origination services which include: the identification of
potential properties and borrowers; the inspection of properties constituting
collateral for such loans; the negotiation of the terms and conditions of such
loans in accordance with the Intervest National Bank's underwriting standards;
preparing commitment letters and coordinating the loan closing process. This
agreement renews each January 1 unless terminated by either party. The Company
earned $1,332,000 and $842,000 for the three-months ended March 31, 2005 and
March 31, 2004, respectively, in connection with this servicing agreement. Such
services are performed by Company personnel and the expenses associated with the
performance of such services are borne by the Company.
The Company has interest-bearing and noninterest-bearing deposit accounts with
Intervest National Bank totaling $6,913,000 at March 31, 2005 and $9,352,000 at
December 31, 2004. The Company earned interest income of $80,000 from these
deposits for the three-months ended March 31, 2005, compared to $45,000 for the
same period of 2004.
Intervest Securities Corporation, an affiliate, receives commissions and fees
from the Company in connection with the placement of the Company's debentures.
These fees aggregated $0 and $56,000 for the quarters ended March 31, 2005 and
2004, respectively.
9
INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 6 - RELATED PARTY TRANSACTIONS, CONTINUED
The Company incurred fees of approximately $13,000 and $10,000 for the
three-months ended March 31, 2005 and 2004 respectively, for legal services
rendered by a law firm, a partner of which is a director of the Company.
The Company incurred commissions and fees in connection with the placement of
its debentures to a broker/dealer, a principal of which is a director of the
Company, of $0 and $315,000 during the three-months ending March 31, 2005 and
2004, respectively.
The Company has an informal agreement with its Parent Company, whereby the
Company will reimburse the Parent Company for the occupancy expense associated
with the leased space that it occupies as follows: $296,000 for the remaining
nine months of 2005; $394,000 in 2006; $394,000 in 2007; $426,000 in 2008;
$437,000 in 2009 and $1,913,000 thereafter for an aggregate amount of
$3,860,000.
The Company has a management agreement with its Parent, that is reviewed
annually, under which the Company incurred a management fee of $ 12,500 per
month. The Company paid $37,500 to the Parent Company during the first quarter
of 2005. The Parent Company provides services related to corporate finance and
planning and intercompany administration, and acts as a liaison for the Company
in various corporate matters. There was no management fee paid in the first
quarter of 2004.
10
INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES
REVIEW BY INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Eisner LLP, the Company's independent registered public accounting firm, has
made a review of the condensed consolidated financial statements as of March 31,
2005, and for the three-month periods ended March 31, 2005 and 2004 presented in
this document, in accordance with the standards established by the Public
Company Accounting Oversight Board.
Their report furnished pursuant to Article 10 of Regulation S-X is included
herein.
11
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholder
Intervest Mortgage Corporation
We have reviewed the accompanying condensed consolidated balance sheet of
Intervest Mortgage Corporation and Subsidiaries (the "Company") as of March 31,
2005, and the related condensed consolidated statements of operations, changes
in stockholder's equity and cash flows for the three-month periods ended March
31, 2005 and 2004. These interim condensed consolidated financial statements are
the responsibility of the Company's management.
We conducted our reviews in accordance with the standards of the Public
Company Accounting Oversight Board (United States). A review of interim
financial information consists principally of applying analytical procedures and
making inquiries of persons responsible for financial and accounting matters.
It is substantially less in scope than an audit conducted in accordance with the
standards of the Public Company Accounting Oversight Board (United States), 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 accompanying interim condensed consolidated financial
statements for them to be in conformity with U. S. generally acceped accounting
principles.
We have previously audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the consolidated balance
sheet of the Company as of December 31, 2004 and the related consolidated
statements of operations, changes in stockholder's equity and cash flows for the
year then ended (not presented herein), and in our report dated February 10,
2005, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 2004 is fairly stated in
all material respects in relation to the consolidated balance sheet from which
it has been derived.
/s/ Eisner LLP
- ----------------
New York, New York
April 22, 2005
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
- -------
Intervest Mortgage Corporation and its wholly owned subsidiaries, Intervest
Distribution Corporation and Intervest Realty Servicing Corporation (hereafter
referred to as the "Company" on a consolidated basis), are engaged in the real
estate business, including the origination and purchase of real estate mortgage
loans, consisting of first mortgage and junior mortgage loans. The Company also
provides mortgage loan origination services to Intervest National Bank ("the
Bank"), an affiliated entity.
Intervest Bancshares Corporation (which is a financial holding company and
hereafter referred to as the "Parent Company") owns 100% of the capital stock of
the Company. The Company's executive officers are directors of the Company and
are also officers, directors and principal shareholders of the Parent Company.
In addition to Intervest Mortgage Corporation, the Parent Company also owns
Intervest National Bank (a national bank with its headquarters and full-service
banking office in Rockefeller Center, New York, and four full-service banking
offices in Clearwater, Florida and one in South Pasadena, Florida) and Intervest
Securities Corporation (a broker/dealer that is an NASD and SIPC member firm
also located in Rockefeller Center, New York). Intervest Securities Corporation
participates as a selected dealer from time to time in the Company's offerings
of debentures.
The Company's lending activities include mortgage loans on real estate
properties that mature within approximately five years, including multifamily
residential apartment buildings, office buildings, commercial properties and
vacant land. The Company also may acquire or originate mortgage loans on other
types of properties, and may resell mortgages to third parties. However, no
mortgage loans have been resold to third parties during the past five years.
While the Company has not previously made acquisitions of real property, it may
also, from time to time, acquire interests in real property, including fee
interests.
Many of the properties collateralizing the loans in the Company's mortgage loan
portfolio are subject to applicable rent control and rent stabilization statutes
and regulations. In both cases, any increases in rent are subject to specific
limitations. As such, properties of the nature of those constituting the most
significant portion of the Company's mortgage portfolio are not affected by the
general movement of real estate values in the same manner as other
income-producing properties.
Many of the Company's mortgage loans include provisions relating to prepayment
and others prohibit prepayment of indebtedness entirely. When a mortgage loan is
repaid prior to maturity, the Company may recognize prepayment income, which
consists largely of the recognition of unearned fees associated with such loans
at the time of payoff and the receipt of additional prepayment fees due at the
time of repayment and interest in certain cases. 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.
The Company's profitability is affected by its net interest income, which is the
difference between interest income generated from its mortgage loans and the
interest expense, inclusive of amortization of offering costs, incurred on its
debentures. The Company's profitability is also affected by its noninterest
income and expenses, provision for loan losses and income taxes. Noninterest
income consists of fee income from providing mortgage loan origination services
to Intervest National Bank, as well as loan service charges and prepayment
income generated from the Company's loan portfolio. Noninterest expense consists
mainly of compensation and benefits expense, occupancy expenses, 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. Since the properties underlying the
Company's mortgages are concentrated in the New York City area, the economic
conditions in that area also have an impact on the Company's operations.
Additionally, terrorist acts, such as those that occurred on September 11, 2001,
and armed conflicts, such as the war on terrorism, and natural disasters, such
as hurricanes, may have an adverse impact on economic conditions.
13
COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2005 AND DECEMBER 31, 2004
- -------------------------------------------------------------------------
Total assets at March 31, 2005 decreased to $119,455,000, from $122,451,000 at
December 31, 2004. The decrease reflected a $12,290,000 decrease in mortgage
loans outstanding, mostly offset by a $9,349,000 increase in cash and cash
equivalents and the application of cash to the redemption at maturity of
$2,600,000 subordinated debentures outstanding and $1,495,000 of interest
payable on subordinated debentures.
Cash and cash equivalents amounted to $26,500,000 at March 31, 2005, compared to
$17,151,000 at December 31, 2004. The increase reflected a higher level of
noninterest-bearing funds and short-term commercial paper investments, partially
offset by a lower level of balances maintained in money market accounts. Cash
equivalents of $14,100,000 at March 31, 2005 were used on April 1, 2005 to repay
maturing subordinated debentures and related accrued interest.
Mortgage loans receivable, net of unearned income and allowance for mortgage
loan losses, amounted to $88,084,000 at March 31, 2005, compared to $100,188,000
at December 31, 2004. The decrease was due to repayments exceeding new mortgage
loan originations during the period.
At March 31, 2005 and December 31, 2004, one loan with a principal balance of
$179,000 was on nonaccrual status. This loan was considered impaired under the
criteria of SFAS No.114. A specific valuation allowance was not maintained at
any time since the Company believes the estimated fair value of each of the
underlying properties is greater than the Company's recorded investment.
The allowance for loan losses amounted to $332,000 at March 31, 2005 and
December 31, 2004. The adequacy of the allowance is evaluated monthly with
consideration given to a number of factors, which are discussed in note 1 to the
consolidated financial statements in the report on form 10-K for the year ended
December 31, 2004. Although management believes it uses the best information
available to make determinations with respect to the need for and amount of the
allowance, future adjustments may be necessary if economic conditions or other
factors differ from those assumed.
Deferred subordinated debenture offering costs, net of accumulated amortization,
decreased to $3,034,000 at March 31, 2005, from $3,271,000 at December 31, 2004.
The decrease was due to normal amortization.
Total liabilities at March 31, 2005 decreased to $95,302,000, from $98,924,000
at December 31, 2004 largely due to a lower level of subordinated debentures
outstanding and debenture interest payable relating to the maturity of Series
11/10/1998 debentures.
Subordinated debentures outstanding at March 31, 2005 decreased to $86,250,000,
from $88,850,000 at December 31, 2004. The decrease was due to the payment at
maturity of Series 11/10/98 subordinated debenture in the principal amount of
$2,600,000.
Subordinated debentures interest payable decreased to $6,724,000 at March 31,
2005, from $8,219,000 at December 31, 2004, primarily due to the payment of
accrued interest on Series 11/10/98 of $1,859,000, partially offset by the
accrual of interest on the balance of the subordinated debentures outstanding.
Mortgage escrow funds increased to $1,784,000 at March 31, 2005, from $1,644,000
at December 31, 2004. The increase was primarily due to the ongoing accumulation
of funds for the semi annual scheduled tax payments in the second quarter. This
increase was partially offset by escrow deposits returned to borrowers on the
loans that were paid off during the three-month period ended March 31, 2005.
Mortgage escrow funds payable represent advance payments made to the Company by
the borrowers for taxes, insurance and other charges that are remitted by the
Company to third parties.
Stockholder's equity increased to $24,153,000 at March 31, 2005, from
$23,527,000 at year-end 2004. The increase was due to net income of $626,000 for
the three-months ended March 31, 2005.
COMPARISON OF RESULTS OF OPERATIONS FOR THE QUARTERS ENDED MARCH 31, 2005 AND
- -----------------------------------------------------------------------------
2004
- ----
14
The Company's net income increased $113,000 to $626,000 in the first quarter of
2005 from $513,000 for the first quarter of 2004. The increase was primarily due
to a $490,000 increase in servicing fee income received from Intervest National
Bank, a $104,000 decrease in interest on debentures and a $56,000 increase in
interest and fee income on mortgage loans, partially offset by a $271,000
increase in general and administrative expenses, a $184,000 decrease in gain on
early repayment of mortgages, and a $97,000 increase in income tax expense.
The following table provides information on average assets, liabilities and
stockholders' equity; yields earned on interest-earning assets; and rates paid
on interest-bearing liabilities for the first quarter of 2005 and 2004. The
yields and rates shown are based on a computation of income/expense (including
any related fee income or expense) for each year divided by average
interest-earning assets/interest-bearing liabilities during each year. Average
balances are derived from daily balances. Net interest margin is computed by
dividing net interest and dividend income by the average of total
interest-earning assets during each year.
For the Three-Months Ended March 31,
--------------------------------------------------------------------
2005 2004
-------------------------------- ----------------------------------
Average Interest Annual Average Interest Annual
($in thousands) Balance Inc./Exp. Yield/Rate Balance Inc./Exp. Yield/Rate
- -----------------------------------------------------------------------------------------------------------------
Assets
Mortgage loans receivable $ 95,405 $ 2,289 9.73% $ 90,518 $ 2,250 10.00%
Short-term investments 18,420 103 2.27 27,461 86 1.26
- -----------------------------------------------------------------------------------------------------------------
Total interest-earning assets 113,825 $ 2,392 8.52% 117,979 $ 2,336 7.96%
- -----------------------------------------------------------------------------------------------------------------
Noninterest-earning assets 3,967 6,624
- -----------------------------------------------------------------------------------------------------------------
Total assets $117,792 $124,603
- -----------------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Debentures and accrued interest payable $ 91,907 $ 1,897 8.37% $103,554 $ 2,020 7.84%
Noninterest-bearing liabilities 2,034 2,271
Stockholder's equity 23,851 18,778
- -----------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $117,792 $124,603
- -----------------------------------------------------------------------------------------------------------------
Net interest income $ 495 $ 316
- -----------------------------------------------------------------------------------------------------------------
Net interest-earning assets/margin $ 21,917 1.76% $ 14,425 1.08%
- -----------------------------------------------------------------------------------------------------------------
Ratio of total interest-earning assets
to total interest-bearing liabilities 1.24x 1.14x
- -----------------------------------------------------------------------------------------------------------------
Net interest income is a major source of the Company's revenues 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 income amounted to $495,000 in the first quarter of 2005, compared
to $316,000 in the first quarter of 2004. The increase in net interest income
was due to a higher net interest margin. The increase in the margin to 1.76% in
the first quarter of 2005 from 1.08% in the first quarter of 2004 was due to an
increase in higher yielding mortgage loans of $4,887,000, offset by a decrease
in significantly lower yielding short-term investments of $9,041,000. The
increase in the yield on earning assets was mostly offset by an increase in the
yield on subordinated debentures.
The Company's yield on interest-earning assets increased 56 basis points to
8.52% in the first quarter of 2005 due to the effect of an increase in the prime
rate which was 175 basis points higher at the end of the first quarter of 2005
than it was in the first quarter of 2004 and a reduction in lower yielding
short-term investments. The cost of debentures increased 53 basis points to
8.37% in the first quarter of 2005 largely due to the effect of the increase in
the prime rate on floating-rate debentures. These debentures were indexed to the
JPMorgan Chase Bank prime rate at the beginning of the quarter and therefore had
a higher interest rate in the first quarter of 2005 than 2004.
Servicing agreement income increased to $1,332,000 in the first quarter of 2005,
from $842,000 in the same period of 2004. The increase of $490,000 was the
result of increased loan origination services provided to Intervest National
Bank.
15
Gain on early repayment of mortgages decreased to $49,000 in the first quarter
of 2005, from $233,000 in the first quarter of 2004. The decrease of $184,000
was the result of two large lockout interest payments received in the first
quarter of 2004 and an overall decrease in the number of loans that were repaid
prior to maturity in the first quarter of 2005. The Company receives lockout
interest when the borrower prepays a loan prior to the date specified in the
mortgage. In such cases the borrower pays interest from the prepayment date
through the lockout date.
There was no provision for loan losses in the first quarter of 2005, compared to
$40,000 in the first quarter of 2004. A provision was not recorded in the first
quarter ended March 31, 2005 based upon management review of the mortgage loan
portfolio and its conclusion that no additional provision was required.
General and administrative expenses increased to $732,000 in the first quarter
of 2005, from $461,000 in the same period of 2004, largely due to the increase
in salaries and employee benefits expenses, occupancy expenses, and the
commencement of a management fee that is paid by the Company to the Parent
Company.
Salaries and employee benefits expense increased $183,000 due to bonuses and
salary increases, an increase in staff and a higher cost of employee benefits.
The Company had 18 full time employees during the first quarter of 2005,
compared to 17 full time employees during the first quarter of 2004.
Occupancy expenses increased $39,000 due to a rent increase associated with the
Company's move to new office space. The Company shares office space, under an
informal agreement, with its Parent Company which leases the entire fourth
floor, approximately 21,500 square feet, of One Rockefeller Plaza in New York
City. This lease expires March 2014. The Company occupies approximately one half
of the space. The Company's share of the rent and related expenses amounts to
approximately $36,000 per month in 2005. The lease on the Company's former space
expired in September 2004 and the Company's obligation to pay approximately
$22,000 per month ended in September 2004.
Beginning in the third quarter of 2004, the Company commenced paying a
management fee to the Parent Company of $37,500 per quarter. The Parent Company
provides services related to corporate finance and planning and intercompany
administration, and acts as a liaison for the Company in various corporate
matters. There was no management fee in the first quarter of 2004.
The provision for income taxes for the quarter ended March 31, 2005 amounted to
$539,000, compared to $442,000 in the first quarter ended March 31, 2004. The
provision represented approximately 46% of pretax income for both periods. The
Company files consolidated Federal, New York State and New York City income tax
returns with its Parent Company.
LIQUIDITY AND CAPITAL RESOURCES
- ----------------------------------
The Company manages its liquidity position on a daily basis to assure that funds
are available to meet its operations, lending commitments and the repayment of
debentures. The Company's principal sources of funds have consisted of
borrowings (through the issuance of its subordinated debentures), mortgage
repayments and cash flow generated from ongoing operations. From time to time,
the Company also receives capital contributions from the Parent Company. For
additional information about the cash flows from the Company's operating,
investing and financing activities, see the consolidated statements of cash
flows in this report.
At March 31, 2005, the Company had commitments outstanding to lend of
$4,540,000. If all these commitments were to close, they would be funded by the
combination of cash on hand and from the scheduled maturities of existing loans.
For the remaining nine months of 2005, the Company is required to repay
$26,500,000 of principal and $3,425,000 of accrued interest on its subordinated
debentures. Of these amounts, $11,750,000 of principal and $2,302,000 of
interest were due and repaid on April 1, 2005. The Company expects to repay the
remaining subordinated debentures and related accrued interest from scheduled
maturities of existing mortgage loans, cash generated from ongoing operations
and cash on hand. The Company considers its current liquidity and sources of
funds sufficient to satisfy its outstanding lending commitments and its maturing
liabilities.
In April of 2005, The Company issued its Series 3/21/05 debentures in the
principal amount of $14,000,000. Net proceeds, after offering costs, amounted to
approximately $12,975,000.
16
OFF-BALANCE SHEET COMMITMENTS
- -------------------------------
Commitments to extend credit amounted to $4,540,000 at March 31, 2005, of which
nearly all will either close or expire in 2005. The Company issues commitments
to extend credit in the normal course of business, which may involve, to varying
degrees, elements of credit and interest rate risk in excess of the amounts
recognized in the consolidated balance sheets. Commitments to extend credit are
agreements to lend funds under specified conditions. 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.
ASSET AND LIABILITY MANAGEMENT
- ---------------------------------
Interest rate risk arises from differences in the repricing of assets and
liabilities within a given time period. The Company does not engage in trading
or hedging activities and does not invest in interest-rate derivatives or enter
into interest rate swaps.
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. An asset
or liability is normally considered to be interest-rate sensitive if it will
reprice or mature within one year or less. The interest-rate sensitivity gap is
the difference between interest-earning assets and interest-bearing liabilities
scheduled to mature or reprice within a one-year time period. A gap is
considered positive when the amount of interest rate-sensitive assets exceeds
the amount of interest rate-sensitive liabilities. Conversely, a gap is
considered negative when the opposite is true.
During a period of rising interest rates, a negative gap would tend to adversely
affect net interest income, while a positive gap would tend to result in an
increase in net interest income. During a period of falling interest rates, a
negative gap would tend to result in an increase in net interest income, while a
positive gap would tend to adversely affect net interest income. If the
repricing of the Company's assets and liabilities were equally flexible and
moved concurrently, the impact of any increase or decrease in interest rates on
net interest income would be minimal.
A simple interest rate gap analysis by itself may not be an accurate indicator
of how net interest income will be affected by changes in interest rates for the
following reasons. Income associated with interest-earning assets and costs
associated with interest bearing liabilities may not be affected uniformly by
changes in interest rates. In addition, the magnitude and duration of changes in
interest rates may have a significant impact on net interest income. For
example, although certain assets and liabilities may have similar maturities or
periods of repricing, they may react in different degrees to changes in market
interest rates. Interest rates on certain types of assets and liabilities
fluctuate in advance of changes in general market interest rates, while interest
rates on other types may lag behind changes in market rates. The ability of many
borrowers to service their debts also may decrease in the event of an
interest-rate increase.
The Company has a "floor," or minimum rate, on many of its floating-rate loans
that is determined in relation to prevailing market rates on the date of
origination. This floor only adjusts upwards in the event of increases in the
loan's interest rate. This feature reduces the effect on interest income of a
falling rate environment because the interest rates on such loans do not reset
downward.
Notwithstanding all of the above, there can be no assurances that a sudden and
substantial increase in interest rates may not 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.
The Company's one-year interest rate sensitivity gap was a positive $52,580,000,
or 44% of total assets, at March 31, 2005, compared to a positive $64,025,000,
or 52%, at December 31, 2004. The decrease was primarily due to the repayment of
floating-rate mortgage loans which was partially offset by the maturity of
fixed-rate subordinated debentures at January 1, 2005.
The following table summarizes information relating to the Company's
interest-earning assets and interest-bearing liabilities as of March 31, 2005,
that are scheduled to mature or reprice within the periods shown.
17
0-3 4-12 Over 1-4 Over 4
($in thousands) Months Months Years Years Total
- ---------------------------------------------------------------------------------------
Floating-rate loans (1) $62,435 $ - $ - $ - $ 62,435
Fixed-rate loans (1) 6,127 6,557 10,545 3,578 26,807
- ---------------------------------------------------------------------------------------
Total loans 68,562 6,557 10,545 3,578 89,242
Short-term investments 11,029 - - - 11,029
- ---------------------------------------------------------------------------------------
Total rate-sensitive assets $79,591 $ 6,557 $ 10,545 $ 3,578 $100,271
- ---------------------------------------------------------------------------------------
Debentures payable (1) $25,250 $ 4,250 $ 25,750 $ 31,000 $ 86,250
Accrued interest on debentures 3,418 650 2,194 462 6,724
- ---------------------------------------------------------------------------------------
Total rate-sensitive liabilities $28,668 $ 4,900 $ 27,944 $ 31,462 $ 92,974
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
GAP (repricing differences) $50,923 $ 1,657 $ (17,399) $(27,884) $ 7,297
- ---------------------------------------------------------------------------------------
Cumulative GAP $50,923 $52,580 $ 35,181 $ 7,297 $ 7,297
- ---------------------------------------------------------------------------------------
Cumulative GAP to total assets 42.6% 44.0% 29.5% 6.1% 6.1%
- ---------------------------------------------------------------------------------------
Significant assumptions used in preparing the preceding gap table follow:
(1) Floating-rate loans and subordinated debentures payable that adjust at
specified time 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 subordinated debentures payable are scheduled,
including repayments, according to their contractual maturities. Deferred
loan fees are excluded from this analysis.
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 debenture-issuance activities. The Company has
not engaged in and accordingly has no risk related to trading accounts,
commodities, interest rate hedges 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, 2004, which reflect changes in market
prices and rates, can be found in note 14 to the consolidated financial
statements included in the Company's annual report on form 10-K for the year
ended December 31, 2004.
Management actively monitors and manages the Company's interest rate risk
exposure. The primary objective in managing interest rate risk is to limit,
within established guidelines, the adverse impact of changes in interest rates
on the Company's net interest income and capital. For a further discussion, see
the section "Asset and Liability Management."
ITEM 4. CONTROLS AND PROCEDURES
The Company's management evaluated, with the participation of its Principal
Executive and Financial Officer(s), the effectiveness of the Company's
disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e)
under the Securities Exchange Act of 1934) as of the end of the period covered
by this report. Based on such evaluation, the Principal Executive and Financial
Officer(s) have concluded that the Company's disclosure controls and procedures
are designed to ensure that information required to be disclosed in the reports
the Company files or furnishes under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and regulations, and are operating in an effective manner.
The Company made no significant changes in its internal control over financial
reporting or in other factors that could significantly affect these controls
subsequent to March 31, 2005.
18
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a) Not Applicable
(b) Not Applicable
(c) Not Applicable
(d) Not Applicable
(e) Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
ITEM 5. OTHER INFORMATION
(a) Not applicable
(b) Not applicable
ITEM 6. EXHIBITS
The following exhibits are filed as part of this report:
4.0 - Form of Indenture between the Company and The Bank of New York
dated as of April 1, 2005.
31.0 - Certification of the principal executive and financial officer
pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
32.0 - Certification of the principal executive and financial officer
pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.
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 MORTGAGE CORPORATION
Date: May 2, 2005 By: /s/ Lowell S. Dansker
-----------------
Lowell S. Dansker, Vice Chairman,
President and Treasurer (Principal Executive
and Financial Officer )
Date: May 2, 2005 By: /s/ Lawrence G. Bergman
-------------------
Lawrence G. Bergman, Vice President
and Secretary
19