Intervest Bancshares (IBCA) in New York said Monday that its first-quarter profit climbed 53% from the same period in 2011 due primarily to lower overhead and improved asset quality.
The $1.9 billion-asset company also reported that its key capital ratios all remained well above minimum targets set by regulators in a 2010 enforcement order. That order requires Intervest's bank unit to maintain a Tier 1 leverage ratio of at least 9% and a total risk-based ratio of at least 12%. At March 31, its leverage ratio was 11.73%, up from 52 basis points from three months earlier and its total risk-based capital-to-assets ratio was 18.14%, compared to 17.33% at Dec. 31.
Though problem assets remain elevated, credit quality is improving. At March 31, nonaccrual loans and real estate owned totaled $81 million, or 4.2% of assets, compared to $86 million, or 4.3% of assets, three months earlier.
Net interest income fell 4% year over year, to $10 million, as the company reduced earning assets, but net income was aided by a 75% decline in its loan-loss provision, to $500,000, and a 4.5% drop in its expenses, to $4.2 million. Intervest's efficiency ratio fell 300 basis points, to 38%.
Despite the steady improvement in its performance, Intervest National Bank remains under an enforcement order from the Office of the Comptroller and the holding company is currently prohibited from paying dividends on its trust-preferred securities or preferred shares it issued to the Treasury Department under the Troubled Asset Relief Program. Last month the Treasury appointed a representative to Intervest's board because the company has missed its last nine quarterly dividend payments to the Treasury.
Intervest's shares were trading at $3.80 early Monday, unchanged from Friday's closing price.