Third-quarter earnings at Intervest Bancshares (IBCA) fell roughly 15%, to $2.2 million, from a year earlier as the New York company shrunk its balance sheet.

For the first nine months of the year, the $1.8 billion-asset Intervest earned $7.3 million, up about 7% from the same period a year earlier.

Third-quarter net interest and dividend income totaled $9.9 million, down more than 5% from a year earlier mostly because of a planned reduction in the size of its balance sheet, Intervest said. Average interest-earning assets decreased by $245 million from the same period a year earlier. This included a $66 million decline in average loans and a $179 million drop in average total securities and overnight investments. Average deposits fell by $222 million and borrowed funds decreased by $12 million.

Intervest's net interest margin benefited from an improved interest rate spread, it said. The company's net interest margin totaled 2.32%, up from 2.13% a year earlier.

Real estate expenses totaled $883,000, more than seven times higher than a year earlier, mostly from increased costs tied to repairs, maintenance and insurance costs on real estate owned. This was partially offset by provisions for loan and real estate losses declining 66%, to $1 million, from the same period a year earlier.

Capital ratios at Intervest National Bank remained above the minimum requirements set out in an agreement with the Office of the Comptroller of the Currency. At Sept. 30, the bank's Tier 1 leverage ratio was 13.24%, and its total risk-based capital ratio was 19.67%. The December 2010 order requires the bank to maintain a Tier 1 capital ratio of at least 9% and a total risk-based capital ratio of at least 12%.

Intervest's shares closed at $4.11 on Monday, up roughly 1.5% from Friday's closing.

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