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

FORM 10-K

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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
-----------------

Commission File Number 33-22976-NY

INTERVEST CORPORATION OF NEW YORK
(Exact name of registrant as specified in its charter)

New York 13-3415815
- ----------------------------- ----------------------------
(State or other jurisdiction (I.R.S. employer identification no.)
of incorporation)
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)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act
of 1934

None
----------------------
(Title of class)

Securities registered pursuant to Section 12(g) of the Securities Exchange Act
of 1934

None
-----------------------
(Title of class)

Indicate by check mark whether the registrant: (1) 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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment of this Form 10-K. [X]

As of February 1, 2002, there were 100 shares of the registrant's common stock
outstanding.

DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------

None
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Intervest Corporation of New York and Subsidiaries

2001 ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

PART I
Page
----
Item 1 Description of Business .......................................... 2

Item 2 Description of Properties......................................... 5

Item 3 Legal Proceedings................................................. 5

Item 4 Submission of Matters to Vote of Security Holders................. 5

PART II

Item 5 Market for Common Equity and Related Stockholder Matters.......... 6

Item 6 Selected Financial Data........................................... 6

Item 7 Management's Discussion and Analysis of Financial Condition
and Results of Operations ........................................ 7

Item 7A Quantitative and Qualitative Disclosures about Market Risk........ 11

Item 8 Financial Statements and Supplementary Data....................... 12

Item 9 Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure.......................... 30

PART III

Item 10 Directors and Executive Officers of the Registrant................ 30

Item 11 Executive Compensation............................................ 31

Item 12 Security Ownership of Certain Beneficial Owners and Management.... 32

Item 13 Certain Relationships and Related Transactions.................... 32

PART IV

Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K... 32

Signatures................................................................. 35

1


PART I
Item 1. Description of Business
-----------------------

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-K 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.

General

Intervest Corporation of New York 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, junior mortgage and wraparound mortgage
loans. The principal office of the Company is located at 10 Rockefeller Plaza,
Suite 1015, New York, New York 10020-1903, and its telephone number is
212-218-2800.

On March 10, 2000, Intervest Bancshares Corporation (hereafter referred to as
the "Parent Company") acquired all the outstanding capital stock of the Company
in exchange for shares of the Parent Company's Class A common stock. As a result
of the acquisition, the Company became a wholly owned subsidiary of the Parent
Company, which is a bank holding company. Former shareholders of the Company are
officers and directors of both the Company and the Parent Company. The Parent
Company also owns Intervest National Bank, a national bank with its headquarters
and a full-service banking office in New York, New York, four full-service
banking offices in Clearwater, Florida and one in South Pasadena, Florida.

Market Area and Competition

The Company's lending activities have been concentrated in the New York City
metropolitan region. The Company also makes loans in other states, including
Connecticut, Florida, New Jersey, Pennsylvania, North Carolina, Washington DC,
Georgia and Virginia.

In connection with originating mortgage loans, the Company experiences
significant competition from banks, insurance companies, savings and loan
associations, mortgage bankers, pension funds, real estate investment trusts,
limited partnerships and other lenders and investors engaged in purchasing
mortgages or making real property investments with investment objectives similar
in whole or in part to the Company's. An increase in the general availability of
funds may increase competition in the making of investments in mortgages and
real property, and may reduce the yields available therefrom.

Lending Activities

The Company's lending activities include both long-term and short-term mortgage
loans on income producing properties, such as office and commercial properties
and multifamily residential apartment buildings. The Company also may acquire or
originate mortgage loans on other types of properties, and may resell mortgages.

2


At December 31, 2001, the Company's loan portfolio amounted to $63,594,000,
compared to $52,800,000 at December 31, 2000. At December 31, 2001, $42,081,000,
or 30 loans, were secured by multi-family apartment buildings located in the
City of New York. These represent approximately 66% of the principal balance of
the Company's portfolio.

Mortgage loans originated and acquired are solicited directly by the Company's
officers, from existing borrowers, through advertising and from broker
referrals. The Company has in the past and may in the future participate in
mortgages originated by its affiliates, including Intervest National Bank.

The Company's mortgage loans typically provide for periodic payments of interest
and principal during the term of the mortgage, with the remaining principal
balance and any accrued interest due at the maturity date. The majority of the
mortgages owned by the Company provide for balloon payments at maturity, which
means that a substantial part or the entire original principal amount is due in
one lump sum payment at maturity. Thirty-nine of the mortgage loans in the
Company's portfolio, representing approximately 82% of the principal balance of
the Company's portfolio have balloon payments due at the time of their maturity.
If the net revenue from the property is not sufficient to make all debt service
payments due on the mortgage, or if at maturity or the due date of any balloon
payment, the owner of the property fails to raise the funds (by refinancing,
sale or otherwise) to make the lump sum payment, the Company could sustain a
loss on its investment in the mortgage. To the extent that the aggregate net
revenues from the Company's mortgage investments are insufficient to provide
funds equal to the payments due under the Company's debt obligations, then the
Company would be required to utilize its working capital for such purposes or
otherwise obtain the necessary funds from outside sources. No assurance can be
given that such funds would be available to the Company. The Company's mortgage
loans are generally not personal obligations of the borrower and are not insured
or guaranteed by governmental agencies or otherwise.

In determining whether to make mortgage loans, the Company analyzes relevant
real property and financial factors, which in certain cases may include factors
such as: the condition and use of the subject property; the property's
income-producing capacity; and the quality, experience and creditworthiness of
the property's owner. The Company requires that all mortgaged properties be
covered by property insurance in amounts deemed adequate in the opinion of
management. In addition, management as part of the approval process makes
physical inspections of properties being considered for mortgage loans.

The Company's mortgage loans include first mortgage loans and junior mortgage
loans. The Company owns 21 junior mortgages. The mortgages owned by the Company
that are junior mortgages are subordinate in right of payment to senior
mortgages on the various properties. In all cases, in the opinion of management,
the current value of the underlying property collateralizing the mortgage loan
is in excess of the stated amount of the mortgage loan plus the senior loan.
Therefore, in the opinion of management of the Company, each property on which a
mortgage owned by the Company is a lien constitutes adequate collateral for the
related mortgage loan. Accordingly, in the event the owner of a property fails
to make required debt service payments, management believes that, based upon
current value, upon a foreclosure of the mortgage and sale of the property, the
Company would recover its entire investment. However, there can be no assurance
that the current value of the underlying property will be maintained.

The Company does not have a formal policy regarding the percentage of its assets
that may be invested in any single mortgage, or in any type of mortgage
investment, or regarding the geographic location of properties collateralizing
the mortgages owned by the Company.

Substantially all of the Company's mortgages are non-recourse. It is expected
that most mortgages that the Company acquires in the future will be non-recourse
mortgages as well. Under the terms of non-recourse mortgages, the owner of the
property subject to the mortgage has no personal obligation to pay the mortgage
note which the mortgage secures. Therefore, in the event of default, the
Company's ability to recover its investment is solely dependent upon the value
of the mortgaged property and balances of any loans secured by mortgages and
liens that are senior in right to us, which must be paid from the net proceeds
of any foreclosure proceeding. Any loss we may incur as a result of the
foregoing factors may have a material adverse effect on the Company's business,
financial condition and results of operations. At December 31, 2001: five of the
mortgages in the Company's portfolio (representing approximately 17% of the
principal balance in the Company's portfolio) allowed recourse against the
mortgagor only with respect to liabilities related to tenant security deposits;

3


32 of the mortgages (representing approximately 67% of the principal balance in
the Company's portfolio) allowed recourse against the mortgagor only with
respect to liabilities relating to tenant security deposits, proceeds from
insurance policies, losses arising under environmental laws and losses resulting
from waste or acts of malfeasance; seven loans (representing approximately 14%
of the portfolio), are full recourse; the balance of loans were without
recourse. In addition, at December 31, 2001, six of the Company's mortgages were
guaranteed by third parties.

Real Estate Investing Activities

The Company, from time to time, may purchase equity interests in real property
or it may acquire such an equity interest pursuant to a foreclosure upon a
mortgage in the normal course of business. With respect to such equity interests
in real estate, the Company may acquire and retain title to properties either
directly or through a subsidiary. While no such transactions are presently
pending, the Company would, in appropriate circumstances, consider the expansion
of its business through investments in or acquisitions of other companies
engaged in real estate or mortgage business activities. While the Company has
not previously made acquisitions of real property or managed income-producing
property, its management has had substantial experience in the acquisition and
management of properties and, in particular, multifamily residential properties.

Temporary Investment Activities

The Company has historically invested its excess cash (after meeting its lending
commitments) in commercial paper and certificate of deposits issued by large
commercial banks, and U.S. government securities. The level of such investments
fluctuates based on various factors, including liquidity needs, loan demand and
scheduled repayments of debentures. Cash and short-term investments at December
31, 2001 amounted to $16,752,000, compared to $19,476,000 at December 31, 2000.

Loan Loss Experience

For financial reporting purposes, the Company considers a loan as delinquent or
non-performing when it is contractually past due 90 days or more as to principal
or interest payments. The Company evaluates its portfolio of mortgage loans
based on various factors to determine the need for an allowance for loan losses.
An allowance for loan losses has been maintained starting in the fourth quarter
of 2001. At December 31, 2001, the allowance was $18,000. The Company did not
maintain an allowance in 2000. The Company did not have any nonperforming assets
or impaired loans at December 31, 2001 and 2000.

Sources of Funds

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. Subordinated debentures outstanding at
December 31, 2001 totaled $63,000,000, compared to $57,150,000 at December 31,
2000.

Employees

At December 31, 2001, the Company employed 12 full-time employees. The employees
are not covered by a collective bargaining agreement and the Company believes
its employee relations are good.

Federal and State Taxation

The Company files consolidated federal, New York State and City income tax
returns with its Parent Company on a calendar year basis. Consolidated returns
have the effect of eliminating intercompany distributions, including dividends,
from the computation of consolidated taxable income for the taxable year in
which the distributions occur. Income taxes are provided as if the Company filed
a separate consolidated tax return with its subsidiaries.

4


Investment in Subsidiaries



At December 31, 2001
------------------------------------------ Subsidiaries
($ in thousands) % of Equity in Earnings (Loss) for the
Voting Total Underlying Year Ended Dec. 31,
Subsidiary Stock Investment Net Assets 2001 2000 1999
- --------------------------- -------- ---------- ---------- ----------------------

Intervest Distribution Corporation 100% $ 33 $ 33 $ (1) $ (1) $ 1
Intervest Realty Servicing Corporation 100% $ 671 $ 671 $ 11 $ 18 $15


There were no dividends paid to the Company by its subsidiaries in 2001, 2000 or
1999.

Effect of Government Regulation

Investment in mortgages on real properties may be impacted by government
regulation in several ways. Residential properties may be subject to rent
control and rent stabilization laws. As a consequence, the owner of the property
may be restricted in its ability to raise the rents on apartments. If real
estate taxes, fuel costs and maintenance of and repairs to the property were to
increase substantially, and such increases are not offset by increases in rental
income, the ability of the owner of the property to make the payments due on the
mortgage as and when they are due might be adversely affected.

Laws and regulations relating to asbestos have been adopted in many
jurisdictions, including New York City, which require that whenever any work is
undertaken in a property in an area in which asbestos is present, the asbestos
must be removed or encapsulated in accordance with such applicable local and
federal laws and regulations. The cost of asbestos removal or encapsulation may
be substantial, and if there were not sufficient cash flow from the property,
after debt service on mortgages, to fund the required work, and the owner of the
property fails to fund such work from other sources, the value of the property
could be adversely affected, with consequent impairment of the security for the
mortgage.

Laws regulating the storage, disposal and clean up of hazardous or toxic
substances at real property have been adopted at the federal, state and local
levels. Such laws may impose a lien on the real property superior to any
mortgages on the property. In the event such a lien were imposed on any
property, which serves as security for a mortgage owned by the Company, the
security for such mortgage could be impaired.

In addition, as a bank holding company, the Parent Company is extensively
regulated under both federal and state laws and regulations.


Item 2. Description of Properties
-------------------------

The office of the Company is located in leased premises at 10 Rockefeller Plaza,
New York, N.Y, 10020. The lease expires on September 30, 2004.


Item 3. Legal Proceedings
-----------------

The Company may periodically be party to or otherwise involved in legal
proceedings arising in the normal course of business, such as claims to enforce
liens, claims involving the making and servicing of real property loans, and
other issues incident to the Company's business. Management does not believe
that there is any pending or threatened proceeding against the Company which, if
determined adversely, would have a material effect on the business, results of
operations, or financial position of the Company.


Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------

None

5


PART II

Item 5. Market for Common Equity and Related Stockholder Matters
--------------------------------------------------------

There is no established trading market for the Company's shares of common stock.
At December 31, 2001 and 2000, the Company's outstanding common stock was 100%
owned by the Parent Company.

The payment of dividends by the Company to the Parent Company is subject to
restrictions. The Company cannot declare or pay any dividend or make any
distribution on its capital stock (other than dividends or distributions payable
in capital stock), or purchase, redeem or otherwise acquire or retire for value,
or permit any subsidiary to purchase or otherwise acquire for value, capital
stock of the Company, if at the time of such payment, the Company is not in
compliance with the indentures under which the Company's debentures were issued.

The Company declared and paid a $3,000,000 cash dividend to the Parent Company
in 2000. The payment of dividends is determined by the Company's Board of
Directors and in addition to the restrictions noted above, is dependent upon
results of operations and financial condition of the Company, and tax
considerations of both the Company and the Parent Company. The actual amount, if
any, and timing of future dividends will depend on such factors.

Item 6. Selected Financial Data
-----------------------

The table below presents selected consolidated financial data. This data should
be read in conjunction with, and are qualified in their entirety by, the
Consolidated Financial Statements and the Notes thereto, and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included elsewhere in this report.




- ------------------------------------------------------------------------------------------------------------------------------
At or For The Year Ended December 31,
--------------------------------------------------------------------
($ in thousands) 2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------

Financial Condition Data:
Total assets $ 83,083 $ 74,860 $ 98,740 $ 99,605 $ 95,262
Cash and short-term investments 16,752 19,476 30,754 27,452 15,622
Mortgage loans receivable, net of deferred fees 62,665 51,992 63,290 67,251 74,007
Subordinated debentures and related interest payable (1) 72,113 64,347 84,600 85,791 82,966
Stockholder's equity 9,847 9,269 12,140 11,568 10,522
Allowance for loan loss reserve 18 - - - -
- ------------------------------------------------------------------------------------------------------------------------------
Operations Data:
Interest income $ 7,625 $ 8,519 $ 10,552 $ 11,743 $ 10,485
Gain on early repayment of mortgages receivable 582 340 369 291 215
Other income 569 415 298 59 31
- ------------------------------------------------------------------------------------------------------------------------------
Total revenues 8,776 9,274 11,219 12,093 10,731
- ------------------------------------------------------------------------------------------------------------------------------
Interest expense 5,849 6,922 8,150 8,510 8,181
Amortization of deferred debenture offering costs 662 714 899 891 958
General and administrative expenses 1,192 1,015 1,118 944 773
- ------------------------------------------------------------------------------------------------------------------------------
Total expenses 7,703 8,651 10,167 10,345 9,912
- ------------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes and extraordinary item 1,073 623 1,052 1,748 819
Provision for income taxes 495 288 480 801 373
- ------------------------------------------------------------------------------------------------------------------------------
Income before extraordinary item 578 335 572 947 446
Extraordinary item, net of taxes (2) - (206) - - -
- ------------------------------------------------------------------------------------------------------------------------------
Net income $ 578 $ 129 $ 572 $ 947 $ 446
- ------------------------------------------------------------------------------------------------------------------------------
Ratios and Other Data
Ratio of earnings to fixed charges (3) 1.2x 1.1x 1.1x 1.2x 1.1x
Dividends paid to Parent Company $ - $ 3,000 $ - $ - $ -
- ------------------------------------------------------------------------------------------------------------------------------

(1) Includes current portion of obligations.
(2) Represents a charge, net of taxes, in connection with the early retirement
of certain debentures.
(3) The ratio of earnings to fixed charges has been computed by dividing
earnings (before the provision for income taxes and fixed charges) by fixed
charges. Fixed charges consist of interest expense incurred during the
period and amortization of deferred debenture offering costs.

6


Item 7. Management's Discussion and Analysis of Financial Condition and Results
------------------------------------------------------------------------
of Operations
-------------

General

Intervest Corporation of New York and its wholly owned subsidiaries, Intervest
Distribution Corporation and Intervest Realty Servicing Corporation (hereafter
referred to as the "Company" on a consolidated basis), is engaged in the real
estate business, including the origination and purchase of real estate mortgage
loans, consisting of first mortgage, junior mortgage and wraparound mortgage
loans.

On March 10, 2000, Intervest Bancshares Corporation (hereafter referred to as
the "Parent Company") acquired all the outstanding capital stock of the Company
in exchange for shares of the Parent Company's Class A common stock. As a result
of the acquisition, the Company became a wholly owned subsidiary of the Parent
Company, which is a bank holding company. Former shareholders of the Company are
officers and directors of both the Company and the Parent Company. The Parent
Company also owns Intervest National Bank, a national bank with its headquarters
and full-service banking office located in New York, New York, four full-service
banking offices in Clearwater, Florida and one in South Pasadena, Florida.

The Company's results of operations are affected by general economic trends in
real estate markets, as well as by trends in the general economy and the
movement of interest rates. 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.

The Company has historically invested primarily in short-term real estate
mortgage loans secured by income producing real property that mature in
approximately five years. The properties to be mortgaged are personally
inspected by management and mortgage loans are made only on those properties
where management is knowledgeable as to operating income and expense. The
Company generally relies upon management in connection with the valuation of
properties. From time to time, however, it may engage independent appraisers and
other agents to assist in determining the value of income-producing properties
underlying mortgages, in which case the costs associated with such services are
generally paid by the mortgagor. The Company does not finance new construction.
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.

The Company's mortgage portfolio is composed predominantly of mortgages on
multi-family residential properties, most of which 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.

The prepayment of mortgage loans tends to increase during periods of declining
interest rates and tends to decrease during periods of increasing interest
rates. Certain of the Company's mortgages include prepayment provisions, and
others prohibit prepayment of indebtedness entirely. Of the 48 mortgages in the
portfolio: five allow prepayment without penalty; three prohibit prepayment; 18
permit prepayment only after passage of a specific period; and 22 permit
prepayment after payment of penalties ranging from 0.5% up to 4% of the
principal balance.

Comparison of Financial Condition at December 31, 2001 and December 31, 2000

Total assets at December 31, 2001 increased to $83,083,000, from $74,860,000 at
December 31, 2000. The increase is primarily reflected in new loan originations
funded by the sale of debentures.

Cash and cash equivalents decreased to $16,752,000 at December 31, 2001, from
$19,476,000 at December 31, 2000. This decrease was due to the funding of new
loans.

Mortgage loans receivable, net of unearned income and allowance for loan loss
reserves, amounted to $62,647,000 at December 31, 2001, compared to $51,992,000
at December 31, 2000. At December 31, 2001 and 2000, the Company did not have

7


any loans on a nonaccrual status. The Company's policy is to discontinue the
accrual of interest income and classify a loan as nonaccrual when principal or
interest is past due 90 days or more and the loan is not adequately
collateralized and in the process of collection, or when in the opinion of the
Company's management, principal or interest is not likely to be paid in
accordance with the terms of the loan.

Management's periodic evaluation of the need for or adequacy of the allowance
for loan loss reserves is based on the Company's past loan loss experience,
known and inherent risks in the portfolio, adverse situations that may affect
the borrower's ability to repay (including the timing of future payments), the
estimated value of the underlying collateral and other relevant factors. This
evaluation is inherently subjective as it requires material estimates including
the amounts and timing of future cash flows expected to be received on any
impaired loans that may be susceptible to significant change. An allowance for
loan losses was established by the Company in the fourth quarter of 2001 and
amounted to $18,000 at December 31, 2001. An allowance was not maintained at any
time during 2000 or 1999. 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 debenture offering costs, net of accumulated amortization, decreased to
$2,348,000 at December 31, 2001, from $2,397,000 at December 31, 2000. The
decrease was primarily due to normal amortization of $662,000 which was mostly
offset by additional deferred costs associated with the issuance of new
debentures in 2001.

Total liabilities at December 31, 2001 increased to $73,236,000, from
$65,591,000 at December 31, 2000. The increase primarily reflected an increase
in debentures. Subordinated debentures outstanding at December 31, 2001
increased to $63,000,000, from $57,150,000 at December 31, 2000. This increase
is a result of the issuance of series 8/1/01 debentures in the principal amount
of $7,250,000, partially offset by the maturity of $1,400,000 in the principal
amount of debentures.

Stockholder's equity increased to $9,847,000 at December 31, 2001, from
$9,269,000 at December 31, 2000. The increase was due to net income for 2001 of
$578,000.

Comparison of Results of Operations for the Year Ended December 31, 2001 and
2000

The Company had net income of $578,000 in 2001, compared to net income of
$129,000 in 2000. The increase in earnings was primarily due to: an increase in
gain on early repayment of mortgages of $242,000, an increase in net interest
income of $212,000 and a $172,000 increase in service fee income received from
Intervest National Bank. These increases were partially offset by a $159,000
increase in general and administrative expenses.

Total interest income was $7,625,000 in 2001, compared to $8,519,000 in 2000.
The decrease of $894,000 was mostly due to declines in market interest rates
during 2001.

Total noninterest income was $1,151,000 in 2001, compared to $755,000 in 2000.
The increase of $396,000 was due to an increase of $242,000 in gains on early
repayment of mortgages and an increase of $172,000 in service fee income
received from Intervest National Bank.

Interest expense on debentures was $5,849,000 in 2001, compared to $6,922,000 in
2000. The decrease of $1,073,000 was primarily due to interest rate decreases on
various floating-rate debentures tied to the JPMorgan Chase Bank prime rate,
which decreased a total of 475 basis points during 2001.

Amortization of deferred debenture offering costs was $662,000 in 2001, compared
to $714,000 in 2000. The decrease reflected the retirement of various debentures
partially offset by new issues in 2001 and 2000.

General and administrative expenses aggregated $1,174,000 in 2001, compared to
$1,015,000 in 2000. The increase of $159,000 was primarily the result of an
increase in salary expense due to salary increases and additional staff.

The provision for income taxes amounted to $495,000 and $288,000 for 2001 and
2000, respectively. The provision represented 46% of pretax income for each
period.

8


The extraordinary charge of $206,000 represents $382,000 of unamortized deferred
debenture offering costs that was charged to expense in the second quarter of
2000 in connection with the earlier retirement of debentures, less a related tax
benefit of $176,000.

Comparison of Results of Operations for the Year Ended December 31, 2000 and
1999

The Company had net income of $129,000 in 2000, compared to net income of
$572,000 in 1999. The decline in earnings was primarily due to an extraordinary
charge, net of taxes, of $206,000, in connection with the early retirement of
debentures, as well as a lower level of interest income from mortgage loans.
These items were partially offset by a decline in interest expense on
debentures.

Total interest income was $8,519,000 in 2000, compared to $10,552,000 in 1999.
The decrease of $2,033,000 was due to declines in the average balance of
mortgage loans (due to principal repayments exceeding new originations) and
short-term investments outstanding. These declines were partially offset by
interest rate increases on floating-rate mortgage loans and higher yields earned
on short-term investments.

Total noninterest income was $755,000 in 2000, compared to $667,000 in 1999. The
increase of $88,000 was due to an increase in service fee income received from
Intervest National Bank.

Interest expense on debentures was $6,922,000 in 2000, compared $8,150,000 in
1999. The decrease of $1,228,000 was due to a decline in the average balance of
debentures outstanding (resulting from retirements exceeding new issues), offset
in part by interest rate increases on various floating-rate debentures tied to
the JPMorgan Chase Bank prime rate. This rate increased six times from June 30,
1999 to June 30, 2000 for a total of 175 basis points.

Amortization of deferred debenture offering costs was $714,000 in 2000, compared
to $899,000 in 1999. The decrease reflected the retirement of various
debentures.

General and administrative expenses aggregated $1,015,000 in 2000, relatively
unchanged from $1,118,000 in 1999.

The provision for income taxes amounted to $288,000 and $480,000 for 2000 and
1999, respectively. The provision represented 46% of pretax income for each
period.

The extraordinary charge of $206,000 represents $382,000 of unamortized deferred
debenture offering costs that was charged to expense in the second quarter of
2000 in connection with the earlier retirement of debentures, less a related tax
benefit of $176,000.

Liquidity and Capital Resources

The Company manages its liquidity position on a daily basis to assure that funds
are available to meet 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. For information
about the cash flows from the Company's operating, investing and financing
activities, see the consolidated statements of cash flows in this report.

On January 1, 2001, $1,400,000 was repaid to debenture holders pursuant to the
scheduled maturity of series 11/10/98 debentures. Accrued interest of $248,000
was also paid on these debentures. In the first half of 2000, the Company repaid
$24,000,000 in principal amount of debentures, plus accrued interest of
$3,970,000 to debenture holders. The Company maintained adequate funds to retire
these debentures. During the first quarter of 2000, the Company paid a cash
dividend of $3,000,000 to the Parent Company. In September of 2001 and November
of 2000, the Company completed the sale of debentures in the principal amount of
$ 7,250,000 and $3,750,000, respectively, which resulted in net proceeds of
approximately $6,636,000 and $3,500,000, respectively, after underwriter's
commissions and other issuance costs.

At December 31, 2001, the Company's total commitment to lend aggregated
approximately $8,625,000. The Company considers its current liquidity and
sources of funds sufficient to satisfy its outstanding lending commitments and
its maturing liabilities.


9


In the first quarter of 2002, the Company completed the sale of additional
subordinated debentures in the aggregate principal amount of $5,750,000.

Asset and Liability Management

Interest rate risk arises from differences in the repricing of assets and
liabilities within a given time period. 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.
The floor for each specific loan is determined in relation to the prevailing
market rates on the date of origination and most adjust upwards in the event of
increases in the loan's interest rate.

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.










10


The following table summarizes information relating to the Company's
interest-earning assets and interest-bearing liabilities as of December 31,
2001, that are scheduled to mature or reprice within the periods shown.
Floating-rate loans which are subject to adjustment at any time are included in
the 0-3 month period rather than in the period in which the loans mature.
Fixed-rate loans are scheduled, including repayments, according to their
contractual maturities.




0-3 4-12 Over 1-4 Over 4
($ in thousands) Months Months Years Years Total
-------------------------------------------------------------------------------------------------------------

Floating- rate loans $ 52,766 - $ 343 $ - $ 53,109
Fixed- rate loans 887 - 4,443 5,155 10,485
-------------------------------------------------------------------------------------------------------------
Loans 53,653 - 4,786 5,155 63,594
Short-term investments 15,702 - - - 15,702
-------------------------------------------------------------------------------------------------------------
Total rate-sensitive assets $ 69,355 - $ 4,786 $ 5,155 $ 79,296
-------------------------------------------------------------------------------------------------------------

Debentures payable $ 41,500 $ 2,500 $ 9,000 $ 10,000 $ 63,000
Accrued interest on debentures 5,848 525 1,841 899 9,113
-------------------------------------------------------------------------------------------------------------
Total rate-sensitive liabilities $ 47,348 $ 3,025 $ 10,841 $ 10,899 $ 72,113
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
GAP (repricing differences) $ 22,007 $ (3,025) $ (6,055) $ (5,744) $ 7,183
-------------------------------------------------------------------------------------------------------------
Cumulative GAP $ 22,007 $ 18,982 $ 12,927 $ 7,183 $ 7,183
-------------------------------------------------------------------------------------------------------------
Cumulative GAP to total assets 26.5% 22.8% 15.6% 8.6% 8.6%
-------------------------------------------------------------------------------------------------------------



Impact of Inflation and Changing Prices

The financial statements and related financial data concerning the Company
presented herein have been prepared in accordance with generally accepted
accounting principles, which require the measurement of financial position and
operating results in terms of historical dollars without considering changes in
the relative purchasing power of money over time due to inflation.

The primary impact of inflation on the operations of the Company is reflected in
increased operating costs. Virtually all of the assets and liabilities of the
Company are monetary in nature. As a result, changes in interest rates have a
more significant impact on the performance of the Company than do the effects of
changes in the general rate of inflation and changes in prices. Additionally,
interest rates do not necessarily move in the same direction or in the same
magnitude as the prices of goods and services.

In a rising rate environment, it is possible that the Company would have to
devote a higher percentage of the interest payments it receives from its
fixed-rate mortgages to meet the interest payments due on variable-rate
Debentures. However, it should be noted that the interest rate on variable-rate
Debentures is limited to a maximum of 12%.


Item 7A. 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-selling activities. 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, 2001 and 2000, which reflect changes in market prices and rates,
can be found in note 12 of the notes to consolidated financial statements.

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

11


the section "Asset and Liability Management."

Item 8. Financial Statements and Supplementary Data
-------------------------------------------

The following consolidated financial statements of the Company are included
herein:

- - Independent Auditors' Report (page 13)
- -------------------------------
- - Consolidated Balance Sheets at December 31, 2001 and 2000 (page 14)
- ------------------------------------------------------------
- - Consolidated Statements of Operations for the Years Ended December 31, 2001,
2000 and 1999 (page 15)
- --------------------------------------------------------------------------------
- - Consolidated Statements of Changes in Stockholders' Equity for the Years
Ended December 31, 2001, 2000 and 1999 (page 16)
- --------------------------------------------------------------------------------
- - Consolidated Statements of Cash Flows for the Years Ended December 31, 2001,
2000 and 1999 (page 17)
- --------------------------------------------------------------------------------
- - Notes to the Consolidated Financial Statements (pages 18 to 27)
- --------------------------------------------------------------------------------
- - Schedule IV - Mortgage Loans on Real Estate (page 28)
- --------------------------------------------------------------------------------

The following table sets forth information with respect to the composition of
loans receivable at December 31:



2001 2000 1999 1998 1997
---- ---- ---- ---- ----
Carrying Carrying Carrying Carrying Carrying
($ in thousands) Value Value Value Value Value
- ---------------------------------------------------------------------------------------------------------------------

Commercial real estate and multifamily loans $ 63,594 $ 52,800 $ 64,119 $ 68,074 $ 75,202
Deferred loan fees and unamortized discounts (929) (808) (829) (824) (1,195)
- ---------------------------------------------------------------------------------------------------------------------
Loans receivable, net of discounts 62,665 51,992 63,290 67,250 74,007
- ---------------------------------------------------------------------------------------------------------------------
Allowance for loan losses (18) - - - -
- ---------------------------------------------------------------------------------------------------------------------
Loans receivable, net $ 62,647 $ 51,992 $ 63,290 $ 67,250 $ 74,007
- ---------------------------------------------------------------------------------------------------------------------
Loans on a nonaccrual status at year end $ - $ - $ - $ - $ -
- ---------------------------------------------------------------------------------------------------------------------


Other financial statement schedules and inapplicable periods with respect to
schedules listed above are omitted because the conditions requiring their filing
do not exist or the information required thereby is included in the financial
statements filed, including the notes thereto.




















12


INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying consolidated balance sheets of Intervest
Corporation of New York and Subsidiaries as of December 31, 2001 and 2000 and
the related consolidated statements of operations, changes in stockholder's
equity and cash flows for each of the years in the three-year period ended
December 31, 2001. Our audits also included the financial statement schedule
listed in the exhibit index as item 14(a)(2). These financial statements and
related schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
related schedules based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Intervest
Corporation of New York as of December 31, 2001 and 2000, and the consolidated
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 2001 in conformity with accounting
principles generally accepted in the United States of America. Also in our
opinion, the schedule referred to above, when considered in relation to the
basic financial statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.


/s/ Richard A. Eisner & Company, LLP
- ------------------------------------
Richard A. Eisner & Company, LLP

New York, New York
January 21, 2002
















13



Intervest Corporation of New York and Subsidiaries

Consolidated Balance Sheets




At December 31,
-----------------------------
($ in thousands) 2001 2000
- ----------------------------------------------------------------------------------------------------------------------


ASSETS
Cash and due from banks $ 1,050 $ 1,986
Short-term investments (note 2) 15,702 17,490
---------- ----------
Total cash and cash equivalents 16,752 19,476
Mortgage loans receivable net of unearned fees and discounts and allowance for
loan losses (note 3) 62,647 51,992
Accrued interest receivable 523 544
Fixed assets, net (note 4) 61 75
Deferred debenture offering costs, net (note 5) 2,348 2,397
Other assets 752 376
- ----------------------------------------------------------------------------------------------------------------------
Total assets $ 83,083 $ 74,860
- ----------------------------------------------------------------------------------------------------------------------

LIABILITIES
Mortgage escrow funds payable $ 658 $ 828
Subordinated debentures payable (note 6) 63,000 57,150
Debenture interest payable at maturity (note 6) 9,113 7,197
Other liabilities 465 416
- ----------------------------------------------------------------------------------------------------------------------
Total liabilities 73,236 65,591
- ----------------------------------------------------------------------------------------------------------------------

Commitments and contingencies (notes 4 and 11)

STOCKHOLDER'S EQUITY
Common stock (no par value, 100 shares issued and outstanding) 2,100 2,100
Additional paid-in-capital 3,509 3,509
Retained earnings (note 7) 4,238 3,660
- ----------------------------------------------------------------------------------------------------------------------
Total stockholder's equity 9,847 9,269
- ----------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholder's equity $ 83,083 $ 74,860
- ----------------------------------------------------------------------------------------------------------------------


See accompanying notes to consolidated financial statements.











14



Intervest Corporation of New York and Subsidiaries

Consolidated Statements of Operations




Year Ended December 31,
---------------------------------------
($ in thousands) 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------


REVENUES
Interest and fee income on mortgages $ 7,009 $ 7,576 $ 9,103
Interest income on short-term investments 616 943 1,449
------------------------------------
Total interest income 7,625 8,519 10,552
Gain on early repayment of mortgages 582 340 369
Other income (note 9) 569 415 298
- ----------------------------------------------------------------------------------------------------------------
Total revenues 8,776 9,274 11,219
- ----------------------------------------------------------------------------------------------------------------

EXPENSES
Interest on debentures 5,849 6,922 8,150
Amortization of deferred debenture offering costs 662 714 899
General and administrative 1,192 1,015 1,118
- ----------------------------------------------------------------------------------------------------------------
Total expenses 7,703 8,651 10,167
- ----------------------------------------------------------------------------------------------------------------

Income before income taxes and extraordinary item 1,073 623 1,052
Provision for income taxes 495 288 480
------------------------------------
Income before extraordinary item 578 335 572
Extraordinary item, net of tax (note 6) (206) -
- ----------------------------------------------------------------------------------------------------------------
Net income $ 578 $ 129 $ 572
- ----------------------------------------------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.
















15


Intervest Corporation of New York and Subsidiaries

Consolidated Statements of Changes in Stockholder's Equity




Year Ended December 31,
--------------------------------------
($ in thousands) 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------


COMMON STOCK
Balance at beginning of year $ 2,100 $ 2,000 $ 2,000
Retirement of 31.84 shares - (2,000) -
Issuance of 100 shares to Parent Company - 2,100 -
- -----------------------------------------------------------------------------------------------------------------------------
Balance at end of year 2,100 2,100 2,000
- -----------------------------------------------------------------------------------------------------------------------------

CLASS B COMMON STOCK
Balance at beginning of year - 100 100
Retirement of 15.89 shares - (100) -
- -----------------------------------------------------------------------------------------------------------------------------
Balance at end of year - - 100
- -----------------------------------------------------------------------------------------------------------------------------

ADDITIONAL PAID-IN-CAPITAL
- -----------------------------------------------------------------------------------------------------------------------------
Balance at beginning and end of year 3,509 3,509 3,509
- -----------------------------------------------------------------------------------------------------------------------------

RETAINED EARNINGS
Balance at beginning of year 3,660 6,531 5,959
Cash dividend declared and paid to Parent Company - (3,000) -
Net income 578 129 572
- -----------------------------------------------------------------------------------------------------------------------------
Balance at end of year 4,238 3,660 6,531
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Total stockholder's equity at end of year $ 9,847 $ 9,269 $12,140
- -----------------------------------------------------------------------------------------------------------------------------


See accompanying notes to consolidated financial statements.















16



Intervest Corporation of New York and Subsidiaries

Consolidated Statements of Cash Flows






Year Ended December 31,
------------------------------------------
($ in thousands) 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------


OPERATING ACTIVITIES
Net income $ 578 $ 129 $ 572
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation 24 21 6
Amortization of deferred debenture offering costs 662 1,096 899
Amortization of premiums, fees and discounts, net (608) (451) (292)
Gain on early repayment of mortgage loans (582) (340) (369)
Decrease in mortgage escrow funds payable (170) (1,026) (181)
Increase (decrease) in debenture interest payable at maturity 1,917 (3) 1,709
Change in all other assets and liabilities, net 1,023 1,478 (164)
- ----------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 2,844 904 2,180
- ----------------------------------------------------------------------------------------------------------------------------

INVESTING ACTIVITIES
Principal repayments of mortgage loans receivable 38,294 39,164 41,740
Originations and purchases of mortgage loans receivable (49,088) (27,846) (37,120)
Purchases of fixed assets (10) - (102)
- ----------------------------------------------------------------------------------------------------------------------------
Net cash (used in) provided by investing activities (10,804) 11,318 4,518
- ----------------------------------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES
Proceeds from issuance of debentures, net of offering costs 6,636 3,500 6,604
Principal repayments of debentures (1,400) (24,000) (10,000)
Dividends paid to Parent Company (3,000) -
- ----------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 5,236 (23,500) (3,396)
- ----------------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents (2,724) (11,278) 3,302
Cash and cash equivalents at beginning of year 19,476 30,754 27,452
- ----------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 16,752 $ 19,476 $ 30,754
- ----------------------------------------------------------------------------------------------------------------------------

SUPPLEMENTAL DISCLOSURES
Cash paid (received) during the year for:
Interest $ 3,933 $ 6,925 $ 6,442
Income taxes 490 (340) 780
- ----------------------------------------------------------------------------------------------------------------------------


See accompanying notes to consolidated financial statements.

17


Intervest Corporation of New York and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended December 31, 2001, 2000 and 1999

- --------------------------------------------------------------------------------

1. Description of Business and Summary of Significant Accounting Policies

Description of Business

Intervest Corporation of New York and Subsidiaries (the "Company") is
engaged in the real estate business, including the origination and purchase
of real estate mortgage loans on income producing properties. On March 10,
2000, Intervest Bancshares Corporation, a bank holding company, (hereafter
referred to as the "Parent Company") acquired all the outstanding capital
stock of the Company in exchange for shares of the Parent Company's Class A
common stock. As a result of the acquisition, the Company became a wholly
owned subsidiary of the Parent Company. Former shareholders of the Company
are officers and directors of both the Company and the Parent Company.

Principles of Consolidation, Basis of Presentation and Use of Estimates

The consolidated financial statements include the accounts of Intervest
Corporation of New York and its wholly owned subsidiaries, Intervest
Distribution Corporation and Intervest Realty Servicing Corporation. All
material intercompany accounts and transactions have been eliminated in
consolidation.

In preparing the consolidated financial statements, management is required
to make estimates and assumptions that affect the reported amounts of
assets and liabilities, and disclosure of contingent liabilities, as of the
date of the financial statements and revenues and expenses during the
reporting periods. Actual results could differ from those estimates.
Material estimates that are particularly susceptible to significant change
in the near term relate to the determination of the allowance for loan
losses.

Cash Equivalents

For purposes of the statements of cash flows, cash equivalents include
short-term investments that have maturities of three months or less when
purchased.

Mortgage Loans Receivable

Loans are stated at their outstanding principal balances, net of any
deferred fees or costs on originated loans and unamortized discounts on
purchased loans and the allowance for loan losses. Purchased loans, all of
which have been made from affiliated companies, are recorded at cost which
is equivalent to the carrying amount of the seller. The purchase price is
deemed equivalent to fair value of the loans based on their variable or
floating interest rates. Interest income is accrued on the unpaid principal
balance. Discounts are amortized to income over the life of the related
receivables using the constant interest method. Loan origination fees net
of certain direct origination costs are deferred and recognized as an
adjustment of the yield of the related loans.

Allowance for Loan Losses

The allowance for loan losses is netted against loans receivable and is
increased by provisions charged to operations and decreased by chargeoffs
(net of recoveries). The adequacy of the allowance is evaluated monthly
with consideration given to the nature and volume of the loan portfolio,
overall portfolio quality, loan concentrations, specific problem loans and
commitments and estimates of fair value thereof; historical chargeoffs and
recoveries, adverse situations which may affect the borrowers' ability to
repay, and management's perception of the current and anticipated economic

18


Intervest Corporation of New York and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended December 31, 2001, 2000 and 1999
- --------------------------------------------------------------------------------


1. Description of Business and Summary of Significant Accounting Policies,
Continued

conditions in the Company's lending areas. In addition, Statement of
Financial Accounting Standards (SFAS) No. 114 specifies the manner in which
the portion of the allowance for loan losses is computed related to certain
loans that are impaired. A loan is normally deemed impaired when, based
upon current information and events, it is probable the Company will be
unable to collect both principal and interest due according to the
contractual terms of the loan agreement. Impaired loans normally consist of
loans on nonaccrual status. Interest income on impaired loans is recognized
on a cash basis. Impairment for commercial real estate and residential
loans is measured based on the present value of expected future cash flows,
discounted at the loan's effective interest rate, or the observable market
price of the loan or the estimated fair value of the loan's collateral, if
payment of the principal and interest is dependent upon the collateral.
When the fair value of the property is less than the recorded investment in
the loan, this deficiency is recognized as a valuation allowance. and a
charge through the provision for loan losses. The Company normally charges
off any portion of the recorded investment in the loan that exceeds the
fair value of the collateral.

Fixed Assets

Fixed assets are carried at cost net of accumulated depreciation.
Depreciation is computed using the straight-line method over the estimated
useful life of the asset. Maintenance, repairs and minor improvements are
charged to operating expense as incurred.

Deferred Debenture Offering Costs

Costs relating to offerings of debentures are amortized over the terms of
the debentures. Deferred debenture offering costs consist primarily of
underwriters' commissions.

Income Taxes

Under SFAS No. 109, "Accounting for Income Taxes," deferred tax assets and
liabilities are recognized for the estimated future tax consequences
attributable to temporary differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the year in which those
temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax law or rates is
recognized in income in the period that includes the enactment date of
change. A valuation allowance is recorded if it is more likely than not
that some portion or all of the deferred tax assets will not be realized
based on a review of available evidence.

Off-Balance Sheet Financial Instruments

In the ordinary course of business, the Company enters into off-balance
sheet financial instruments consisting of commitments to extend credit.
Such financial instruments are recorded in the consolidated financial
statements when they are funded and related fees are recorded when incurred
or received.

2. Short-Term Investments

At December 31, 2001 and 2000, short-term investments was comprised of bank
commercial paper.

19


Intervest Corporation of New York and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended December 31, 2001, 2000 and 1999
- --------------------------------------------------------------------------------

3. Mortgage Loans Receivable

Mortgage loans receivable are summarized as follows:


At December 31, 2001 At December 31, 2000
-------------------- --------------------
($ in thousands) # of loans Amount # of loans Amount
- ----------------------------------------------------------------------------------------------------------------

Residential multifamily loans 35 $45,906 27 $46,553
Commercial real estate loans 13 17,688 7 6,247
- ----------------------------------------------------------------------------------------------------------------
Loans receivable 48 63,594 34 52,800
- ----------------------------------------------------------------------------------------------------------------
Deferred loan fees and discount (929) (808)
- ----------------------------------------------------------------------------------------------------------------
Loans receivable, net of fees and discount 62,665 51,992
- ----------------------------------------------------------------------------------------------------------------
Allowance for loan losses (18) -
- ----------------------------------------------------------------------------------------------------------------
Loans receivable, net $62,647 $51,992
- ----------------------------------------------------------------------------------------------------------------


At December 31, 2001, the loan portfolio consisted of $43,187,000 and
$20,407,000 of first mortgage loans and junior mortgage loans,
respectively. These loans were comprised of $10,485,000 of fixed-rate loans
and $53,109,000 of adjustable-rate loans. At December 31, 2000, the loan
portfolio consisted of $42,744,000 and $10,056,000 of first mortgage loans
and junior mortgage loans, respectively. These loans were comprised of
$17,977,000 of fixed-rate loans and $34,823,000 of adjustable-rate loans.

At December 31, 2001, effective interest rates on mortgages ranged from
6.88% to 18.55% (7.68% to 16.73% at December 31, 2000). Many of the
mortgage loans have an interest rate floor which resets upward along with
any increase in the loan's interest rate. This feature reduces the loan's
interest rate exposure to periods of declining interest rates.

During 2001, 2000 and 1999, certain mortgages were repaid in full prior to
their maturity date. The prepayments resulted in the recognition of
unearned fees and discount associated with such loans, as well as the
receipt of prepayment penalties in certain cases. For 2001, 2000 and 1999,
income associated with the prepayments of mortgages was $582,000, $340,000
and $369,000, respectively.

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 (such as office buildings, shopping centers and
rental and cooperative apartment buildings).

The geographic distribution of the properties that collateralize the loan
portfolio is summarized as follows:

At December 31, 2001 At December 31, 2000
-------------------- --------------------
($ in thousands) Amount %ofTotal Amount %ofTotal
- --------------------------------------------------------------------------------
New York $50,260 79.0% $42,193 79.9%
New Jersey 8,176 12.9 - -
Pennsylvania 1,916 3.0 - -
Florida 1,087 1.7 7,820 14.8
North Carolina - - 2,068 3.9
Connecticut 1,660 2.6 187 0.4
All other 495 0.8 532 1.0
- --------------------------------------------------------------------------------
$63,594 100.0% $52,800 100.0%
- --------------------------------------------------------------------------------

20


Intervest Corporation of New York and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended December 31, 2001, 2000 and 1999
- --------------------------------------------------------------------------------
3. Mortgage Loans Receivable, Continued

The table below shows the scheduled contractual principal repayments of the
loan portfolio at December 31, 2001:

($ in thousands)
- --------------------------------------------------------------------------------
For the year ended December 31, 2002 $17,790
For the year ended December 31, 2003 14,819
For the year ended December 31, 2004 11,210
For the year ended December 31, 2005 7,680
For the year ended December 31, 2006 -
Thereafter 12,095
- --------------------------------------------------------------------------------
$63,594
- --------------------------------------------------------------------------------

At December 31, 2001, $36,206,000 of loans with adjustable rates and
$9,598,000 of loans with fixed rates were due after one year. At December
31, 2001 and 2000, the Company did not have any loans on a nonaccrual
status or impaired. At December 31, 2001, the allowance for loan losses was
$18,000; no allowance was required in 2000 or 1999.

4. Fixed Assets, Lease Commitments and Rental Expense

Fixed assets is summarized as follows:

At December 31,
---------------
($ in thousands) 2001 2000
- --------------------------------------------------------------------------------
Furniture, fixtures and equipment $ 54 $ 44
Automobiles 58 58
- --------------------------------------------------------------------------------
Total cost 111 102
- --------------------------------------------------------------------------------
Less accumulated deprecation (50) (27)
- --------------------------------------------------------------------------------
Fixed assets, net $ 61 $ 75
- --------------------------------------------------------------------------------


The Company occupies its office space under a lease which terminates on
September 30, 2004. In addition to minimum rents, the Company is required
to pay its proportionate share of increases in the building's real estate
taxes and costs of operation and maintenance as additional rent. Rent
expense amounted to $183,000 in 2001, $179,000 in 2000 and $177,000 in
1999. The Company shares its rented space with affiliates who were charged
rent of $1,000 in 2001, 2000 and 1999. The Company's future minimum annual
lease payments under the office lease at December 31, 2001, are as follows:
$192,000 in 2002; $192,000 in 2003 and $143,000 in 2004 for an aggregate of
$527,000.

5. Deferred Debenture Offering Costs

Deferred debenture offering costs are summarized as follows:

At December 31,
---------------
($ in thousands) 2001 2000
- --------------------------------------------------------------------------------
Deferred debenture offering costs $5,199 $4,670
Less accumulated amortization (2,851) (2,273)
- --------------------------------------------------------------------------------
Deferred debenture offering costs, net $2,348 $2,397
- --------------------------------------------------------------------------------





21


Intervest Corporation of New York and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended December 31, 2001, 2000 and 1999
- --------------------------------------------------------------------------------

6. Subordinated Debentures Payable and Extraordinary Item

The following table summarizes debenture payable.


At December 31,
($ in thousands) 2001 2000
- ------------------------------------------------------------------------------------------------------------

Series 05/12/95 - interest at 2% above prime - due April 1, 2004 $ 9,000 $ 9,000
Series 10/19/95 - interest at 2% above prime - due October 1, 2004 9,000 9,000
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 8% fixed - due January 1, 2001 - 1,400
Series 11/10/98 - interest at 81/2% fixed - due January 1, 2003 1,400 1,400
Series 11/10/98 - interest at 9% fixed - due January 1, 2005 2,600 2,600
Series 06/28/99 - interest at 8% fixed - due July 1, 2002 2,500 2,500
Series 06/28/99 - interest at 81/2% 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% fixed - due January 1, 2004 1,250 1,250
Series 09/18/00 - interest at 81/2% 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 71/2% fixed - due April 1, 2005 1,750 -
Series 08/01/01 - interest at 8% fixed - due April 1, 2007 2,750 -
Series 08/01/01 - interest at 81/2% fixed - due April 1, 2009 2,750 -
- ------------------------------------------------------------------------------------------------------------
$63,000 $57,150
- ------------------------------------------------------------------------------------------------------------


The "Prime" in the preceding table refers to the prime rate of JPMorgan
Chase Bank, which was 4.75% on December 31, 2001, and 9.5% at December 31,
2000.

On January 1, 2001, series 11/10/98 debentures totaling $1,400,000 in
principal plus accrued interest of $248,000 matured and were repaid.

On March 1, 2000, Series 6/29/92 debentures totaling $7,000,000 in
principal and maturing on April 1, 2000 were redeemed for outstanding
principal plus accrued interest of $1,435,000. In the second quarter of
2000, Series 9/13/93, 1/28/94 and 10/28/94 debentures maturing on October
1, 2001, April 1, 2002 and April 1, 2003, respectively, were redeemed for
outstanding principal aggregating $17,000,000 plus accrued interest
totaling $2,535,000. In connection with these early redemptions,
approximately $382,000 of unamortized deferred debenture offering costs,
net of a tax benefit of $176,000, was charged to expense and reported as an
extraordinary item in 2000.

The Series 5/12/95, 10/19/95, 5/10/96, 10/15/96 and 4/30/97 debentures have
a maximum interest rate of 12%. Interest on an aggregate of $6,400,000 of
these debentures is accrued and compounded quarterly, and is due and
payable at maturity. The payment of interest on the remaining debentures is
made quarterly. Any debenture holder in the aforementioned Series 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.

22


Intervest Corporation of New York and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended December 31, 2001, 2000 and 1999
- --------------------------------------------------------------------------------

6. Subordinated Debentures Payable and Extraordinary Item, Continued

The Series 11/10/98, 6/28/99 and 9/18/00 and $770,000 of Series 11/10/98
debentures accrue and compound interest quarterly, with such interest due
and payable at maturity. The holders of Series 11/10/98, 6/28/99 and
9/18/00 debentures can require the Company to repurchase the debentures for
face amount plus accrued interest each year (beginning July 1, 2002 for the
Series 6/28/99 and January 1, 2004 for the Series 9/18/00) provided,
however that 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.

All the debentures may be redeemed, in whole or in part, at any time at the
option of the Company, for face value, except for Series 8/1/01 debentures,
which would be at a premium of 1% if the redemption is prior to October 1,
2002. All the debentures are unsecured and subordinate to all present and
future senior indebtedness, as defined.

Scheduled contractual maturities of debentures as of December 31, 2001 are
summarized as follows:

($ in thousands) Principal Accrued Interest
---------------------------------------------------------------------------
For the year ended December 31, 2002 $2,500 $1,386
For the year ended December 31, 2003 1,400 411
For the year ended December 31, 2004 21,250 4,303
For the year ended December 31, 2005 27,850 2,252
For the year ended December 31, 2006 3,250 607
Thereafter 6,750 154
---------------------------------------------------------------------------
$63,000 $9,113
---------------------------------------------------------------------------

7. Dividend Restriction

The payment of dividends by the Company to the Parent Company is subject to
restrictions. The Company cannot declare or pay any dividend or make any
distribution on its capital stock (other than dividends or distributions
payable in capital stock), or purchase, redeem or otherwise acquire or
retire for value, or permit any subsidiary to purchase or otherwise acquire
for value, capital stock of the Company, if at the time of such payment,
the Company is not in compliance with the indentures under which the
Company's debentures were issued. The Company declared and paid a
$3,000,000 cash dividend to the Parent Company in 2000.

8. Profit Sharing Plan

In 2000, the Company established a tax-qualified, profit sharing plan and
trust in accordance with the provisions of Section 401(k) of the Internal
Revenue Code. The plan is available to each of the Company's employees who
elects to participate after meeting certain length-of-service requirements.
The Company's contributions to the profit sharing plans are discretionary
and vest to the employees over a period of time. Total Company
contributions to the plan for 2001 and 2000 were $7,000 and $1,000,
respectively.

9. Related Party Transactions

The Company participates with Intervest National Bank (a wholly owned
subsidiary of the Parent Company) in certain mortgage loans. The balances
of the Company's participation in these mortgages were $3,919,000 and
$2,629,000 at December 31, 2001 and 2000, respectively.

23


Intervest Corporation of New York and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended December 31, 2001, 2000 and 1999
- --------------------------------------------------------------------------------

9. Related Party Transactions, Continued

The Company entered into a service agreement in June 1999 with Intervest
National Bank with respect to providing mortgage loan origination and
servicing services to Intervest National Bank. The Company received
$463,000, $285,000 and $225,000 from Intervest National Bank for 2001, 2000
and 1999, respectively, in connection with this service agreement. These
amounts are included in other income in the consolidated statements of
operations.

The Company has interest-bearing and noninterest-bearing deposit accounts
with Intervest National Bank totaling $3,030,000 at December 31, 2001 and
$544,000 at December 31, 2000. The Company received interest income of
$41,000, $90,000 and $110,000, respectively, in 2001, 2000 and 1999 in
connection with such deposits. These amounts are included in interest
income in the consolidated statements of operations.


In connection with the placement of subordinated debentures, Intervest
Securities Corporation, an affiliate of the Company, received commissions
and fees aggregating $15,000 in 2001, $34,000 in 2000 and $35,700 in 1999.
These amounts are included in other income in the consolidated statements
of operations.


The Company acquired furniture, fixtures and equipment in 1999 aggregating
$40,000 from an affiliate on the Company.


10. Income Taxes

Commencing in 2000, the Company filed consolidated federal and combined New
York State and City income tax returns with its Parent Company on a
calendar year basis. Income taxes are provided as if the Company filed a
separate consolidated tax return with its subsidiaries.

At December 31, 2001 and 2000, the Company's net deferred tax asset was
$171,000 and $10,000, respectively. The asset relates to the unrealized
benefit for net temporary differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases. A valuation allowance was not maintained at any time during 2001
and 2000.

Income tax expense (benefit) consists of the following:



For the Year Ended December 31,
-------------------------------
($ in thousands) 2001 2000 1999
---------------------------------------------------------------------------------------------------------

Provision for income taxes $495 $288 $480
Income tax effect of extraordinary item - (176) -
---------------------------------------------------------------------------------------------------------
$495 $112 $480
---------------------------------------------------------------------------------------------------------






24


Intervest Corporation of New York and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended December 31, 2001, 2000 and 1999
- --------------------------------------------------------------------------------

10. Income Taxes, Continued

Income tax expense (benefit) attributable to income before extraordinary
item consists of the following:


($ in thousands) Current Deferred Total
- --------------------------------------------------------------------------------
Year Ended December 31, 2001:
- -----------------------------
Federal $ 406 $ (119) $ 287
State and Local 250 (42) 208
- --------------------------------------------------------------------------------
$ 656 $ (161) $ 495
- --------------------------------------------------------------------------------
Year Ended December 31, 2000:
- -----------------------------
Federal $ 189 $ 10 $ 199
State and Local 85 4 89
- --------------------------------------------------------------------------------
$ 274 $ 14 $ 288
- --------------------------------------------------------------------------------
Year Ended December 31, 1999:
- -----------------------------
Federal $ 284 $ 4 $ 288
State and Local 190 2 192
- --------------------------------------------------------------------------------
$ 474 $ 6 $ 480
- --------------------------------------------------------------------------------

The components of deferred tax expense (benefit) are summarized as follows:


For the Year Ended December 31,
-------------------------------
($ in thousands) 2001 2000 1999
- --------------------------------------------------------------------------------
Debenture underwriting commissions $ - $ - $ 3
Deferred loan fees and discount (148) 16 3
Allowance for loan losses (9) - -
Depreciation (4) (2) -
- --------------------------------------------------------------------------------
$ (161) $ 14 $ 6
- --------------------------------------------------------------------------------


The tax effects of the temporary differences that give rise to the deferred
tax asset are summarized as follows:


At December 31,
($ in thousands) 2001 2000
- --------------------------------------------------------------------------------
Deferred loan fees and discount $ 157 $ 8
Allowance for loan losses 8 -
Depreciation 6 2
- --------------------------------------------------------------------------------
$ 171 $ 10
- --------------------------------------------------------------------------------


A reconciliation between the statutory federal income tax rate and the
Company's effective tax rate follows:



For the Year Ended December 31,
-------------------------------
($ in thousands) 2001 2000 1999
- -------------------------------------------------------------------------------------------------------

Tax provision at statutory rate 34.0% 34.0% 34.0%
Increase (decrease) in taxes resulting from:
State and local income taxes, net of federal benefit 12.0 12.1 12.2
All other 0.2 0.1 (0.6)
- -------------------------------------------------------------------------------------------------------
46.2% 46.2% 45.6%
- -------------------------------------------------------------------------------------------------------


25


Intervest Corporation of New York and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended December 31, 2001, 2000 and 1999
- --------------------------------------------------------------------------------

11. Commitments and Contingencies

Effective July 1, 1995, the Company entered into an employment agreement
with its Executive Vice-President, who is also a director and shareholder
of the Parent Company, for a term of ten years at an annual salary in the
present amount of $177,315, which is subject to increase annually by six
percent or by the percentage increase in the consumer price index, if
higher. In the event of the executive's death or disability, one-half of
this amount will continue to be paid for a term as defined in the
agreement. Effective August 3, 1998, the Company modified the
aforementioned employment agreement to provide for additional compensation
of $1,000 per month for each $10,000,000 of gross assets of the Company in
excess of $100,000,000.

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. Commitments to extend credit amounted to
$8,625,000 at December 31, 2001.

The Company is periodically party to or otherwise involved in legal
proceedings arising in the normal course of business, such as claims to
enforce liens, claims involving the making and servicing of mortgage loans,
and other issues incident to the Company's business. Management does not
believe that there is any pending or threatened proceeding against the
Company which, if determined adversely, would have a material effect on the
business, results of operations, or financial position of the Company.

12. Estimated Fair Value of Financial Instruments

Fair value estimates are made at a specific point in time based on
available information about each financial instrument. Where available,
quoted market prices are used. However, a significant portion of the
Company's financial instruments, such as commercial real estate and
multifamily loans, do not have an active marketplace in which they can be
readily sold or purchased to determine fair value. Consequently, fair value
estimates for such instruments are based on assumptions made by management
that include the financial instrument's credit risk characteristics and
future estimated cash flows and prevailing interest rates. As a result,
these fair value estimates are subjective in nature, involve uncertainties
and matters of significant judgment and therefore, cannot be determined
with precision. Accordingly, changes in any of management's assumptions
could cause the fair value estimates to deviate substantially. The fair
value estimates also do not reflect any additional premium or discount that
could result from offering for sale, at one time, the Company's entire
holdings of a particular financial instrument, nor estimated transaction
costs. Further, the tax ramifications related to the realization of
unrealized gains and losses can have a significant effect on and have not
been considered in the fair value estimates. Finally, fair value estimates
do not attempt to estimate the value of anticipated future business and the
Company's customer relationships.

26





Intervest Corporation of New York and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended December 31, 2001, 2000 and 1999
- --------------------------------------------------------------------------------

12. Estimated Fair Value of Financial Instruments, Continued

The carrying and estimated fair values of the Company's financial
instruments are as follows:



At December 31, 2001 At December 31, 2000
--------------------- --------------------
Carrying Fair Carrying Fair
($ in thousands) Value Value Value Value
- ---------------------------------------------------------------------------------------------------------

Financial Assets:
Cash and cash equivalents $ 16,752 $ 16,752 $ 19,476 $ 19,476
Loans receivable, net 62,647 64,595 51,992 51,992
Accrued interest receivable 523 523 544 544
Financial Liabilities:
Debentures payable plus accrued interest 72,113 73,141 64,347 64,347
Off balance sheet:
Commitments to lend 65 65 52 52
- ---------------------------------------------------------------------------------------------------------


The following methods and assumptions were used to estimate the fair value
of each class of financial instruments:

Loans Receivable. The estimated fair value of loans is based on a
discounted cash flow analysis, using interest rates currently being offered
for loans with similar terms to borrowers of similar credit quality.

Management can make no assurance that its perception and quantification of
credit risk would be viewed in the same manner as that of a potential
investor. Therefore, changes in any of management's assumptions could cause
the fair value estimates of loans to deviate substantially.

Debentures and Accrued Interest Payable. The estimated fair value of
debentures and related accrued interest payable is based on a discounted
cash flow analysis. The discount rate used in the present value computation
was estimated by comparison to what management believes to be the Company's
incremental borrowing rate for similar arrangements. For 2000, management
believes that the incremental borrowing rate approximated the then current
rates for each of the borrowings.

All Other Financial Assets and Liabilities. The estimated fair value of
cash and cash equivalents and accrued interest receivable approximates
their carrying values since these instruments are payable on demand or have
short-term maturities.

Off-Balance Sheet Instruments. The carrying amounts of commitments to lend
approximated estimated fair value. The fair value of commitments to lend is
based on fees currently charged to enter into similar agreements, taking
into account the remaining terms of the agreement and the counter-parties
credit standing.







27



INTERVEST CORPORATION OF NEW YORK

SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE

As of DECEMBER 31, 2001


Effective Stated Final Face Carrying
Interest Interest Maturity Payment Prior Amount of Amount of Prepayment Penalty/
Description Rate Rate Date Terms Liens Mortgage Mortgage Other Fees
- -------------------------- ---- ---- ---- ----- ----- -------- -------- ----------

Commercial first Mortgages
Office Buildings
New City, New York 12.92% 6.20% 12/08/10 Y $ - $ 159,000 $ 122,000 none
Tampa, Florida 7.00% 7.00% 7/01/09 M - 343,000 343,000 1.00%
Newark, New Jersey 11.42% 9.50% 12/01/05 M - 4,487,000 4,424,000 not prepayable until
9/1/02, then 1%
New York, New York 6.88% 6.88% 1/1/05 M - 2,200,000 2,200,000 3% prior to 1/1/03, 2%
prior to 1/1/04,

Restaurants
Decatur and
Jonesboro, Georgia 13.95% 8.50% 4/1/13 M - 406,000 332,000 none
Manassas, Virginia 14.95% 6.50% 12/01/05 Y - 89,000 77,000 0.50%
Irondequoint, New York 13.06% 7.20% 12/01/12 Y - 210,000 166,000 1.00%

Hotel
New York, New York 9.92% 9.00% 2/01/04 M - 3,011,000 2,978,000 3% prior to 2/02, 2%
prior to 2/03, 1% prior
to 2/04

Residential first Mortgages
Rental Apartment Buildings
Bronx, New York 11.28% 11.00% 11/01/12 M - 1,896,000 1,871,000 none
Bronx, New York 12.75% 12.75% 1/1/11 M - 978,000 978,000 no prepayment permitted
New York, New York 11.63% 11.00% 5/29/03 M - 610,000 608,000 2% until 5/02 then 1%
Bronx, New York 14.37% 13.00% 6/1/13 M - 1,873,000 1,765,000 no prepayment permitted
Bronx, New York 13.09% 12.75% 11/1/11 M - 1,662,000 1,638,000 not prepayable until
1/1/03
Bronx, New York 13.50% 13.50% 11/1/13 M - 4,375,000 4,375,000 no prepayment permitted
New York, New York 8.87% 8.13% 3/30/02 M - 887,000 886,000 1.00%
Hartford , Connecticut 13.50% 13.50% OPEN M - 167,000 167,000 1.00%
New York, New York 13.07% 12.00% 2/01/02 M - 1,710,000 1,708,000 1.00%
New York, New York 15.01% 11.50% 3/1/02 M - 5,187,000 5,139,000 1.13%
Brooklyn, New York 11.00% 11.00% 12/1/01 M - 843,000 843,000 1.25%
Chester Pennsylvania 12.02% 10.50% 4/1/03 M - 1,806,000 1,783,000 not prepayable until
10/1/02, then 1%
Brooklyn, New York 10.38% 9.00% 10/1/02 M - 2,686,000 2,666,000 not prepayable until
5/15/02, then 1%
New York, New York 12.08% 10.50% 4/1/04 M - 2,215,000 2,179,000 none
New York, New York 8.00% 8.00% 6/1/09 M - 194,000 194,000 1.00%
New York, New York 10.46% 9.00% 6/1/03 M - 2,488,000 2,453,000 not prepayable until
12/1/02, then 1%
Brooklyn, New York 11.83% 9.50% 8/1/02 M - 626,000 619,000 not prepayable until
5/1/02, then 1%
New York, New York 12.91% 10.50% 8/1/02 M - 898,000 888,000 not prepayable until
5/1/02, then 1%
Brooklyn, New York 7.88% 7.88% 10/1/04 M - 1,182,000 1,182,000 not prepayable until
1/1/04, then 1%

Commercial Junior Mortgages
Office Buildings
Tampa, Florida 11.68% 10.50% 6/1/04 M 5,121,000 494,000 487,000 1.00%
Newark, New Jersey 11.81% 9.50% 2/1/03 M 4,487,000 3,290,000 3,233,000 not prepayable until
9/1/02, then 1%
Wall township, New Jersey 11.20% 9.00% 10/1/04 M 3,450,000 398,000 383,000 3% prior to 9/1/02,
2% prior to 9/1/03, 1%
thereafter

New York, New York 12.22% 11.00% 1/1/05 M 4,700,000 2,300,000 2,256,000 3% prior to 1/1/03,
2% prior to 1/1/04, 1%
thereafter
Retail
Brooklyn, New York 13.00% 10.75% 8/1/02 M 898,000 299,000 296,000 not prepayable until
2/1/02, then 1% is under
$200,000
Residential Junior Mortgages
Rental Apartment Buildings
New York, New York 9.50% 9.50% 5/27/01 M 3,787,000 1,899,000 1,899,000 1.00%
New York, New York 14.75% 10.50% 12/2/02 M (1) 249,000 241,000 not prepayable until
7/15/02, then 1%
New York, New York 12.59% 11.50% 10/1/05 M 3,374,000 2,790,000 2,741,000 4% prior to 10/02, 3%
prior to 10/03, 2% prior
to 10/04
New York, New York 11.98% 10.50% 3/1/03 M 6,643,000 991,000 980,000 not prepayable until
1/1/03, then 1%
New York, New York 11.69% 10.50% 4/1/04 M 2,172,000 1,591,000 1,568,000 not prepayable until
7/1/03, then 1%
New York, New York 15.16% 10.50% 5/1/03 M 1,588,000 897,000 863,000 not prepayable until
11/1/02, then 1%
New York, New York 10.36% 9.00% 6/1/04 M 4,966,000 990,000 976,000 1.00%
Lowery Place, Newington, CT 11.25% 9.00% 10/1/02 M 3,974,000 1,493,000 1,473,000 not prepayable until
6/1/02, then 1%
Bronx, New York 12.67% 10.50% 10/1/02 M 2,489,000 698,000 689,000 not prepayable until
3/1/02, then 1%
Philadelphia, Pennsylvania 11.59% 10.75% 9/1/04 M 1,569,000 110,000 109,000 3% prior to 9/1/02, 2%
prior to 9/1/03, 1%
thereafter
New York, New York 11.05% 10.00% 9/1/04 M 1,717,000 234,000 231,000 no prepayment allowed,
1% due 9/1/04
Brooklyn, New York 11.71% 10.50% 10/1/04 M 5,161,000 723,000 711,000 not prepayable until
1/1/04, then 1%
New York, New York 11.06% 10.00% 10/1/04 M 2,352,000 260,000 256,000 not prepayable until
1/1/04, then 1%
Brooklyn, New York 12.40% 10.50% 11/1/02 M 680,000 150,000 148,000 1.00%
New York, New York 10.86% 10.00% 12/1/05 M 3,200,000 300,000 295,000 3% prior to 12/1/02, 2%
prior to 12/1/03, 1%
thereafter
Ocala, Florida 13.13% 12.00% 12/1/03 M 1,249,000 250,000 246,000 not prepayable until
1/1/04, then 31 days
interest on original
balance
---------------------------------------------
TOTAL $25,817,000 $63,594,000 $ 62,665,000
=============================================


Notes:

(Y) Yearly principal and interest payments
(M) Monthly principal and interest payments
(1) Prior lien amount included in preceding mortgage.



28


INTERVEST CORPORATION OF NEW YORK

SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE (continued)





The following summary reconciles mortgages receivable at their carrying value

Year Ended December 31,
-------------------------------------------
2001 2000 1999
---- ---- ----


Balance at beginning of period $ 51,992,000 $ 63,290,000 $ 67,250,000
Additions during period
Mortgages originated and acquired 49,088,000 27,846,000 37,120,000

Deductions during period
Collections of principal, net of amortization of fees and (38,415,000) (39,144,000) (41,080,000)
discounts

Change in allowance for loan losses (18,000) - -
-------------------------------------------
Balance at end of period $ 62,647,000 $ 51,992,000 $ 63,290,000
===========================================




















29


Item 9. Changes in and Disagreements with Accountants on Accounting and
-----------------------------------------------------------------------
Financial Disclosure
--------------------

None
PART III

Item 10. Directors and Executive Officers of the Registrant
--------------------------------------------------

The current Directors and Executive Officers of the Company are as follows:

Lawrence G. Bergman, age 57, serves as a Director, and as Vice President
and Secretary of the Company and has served in such capacities since the Company
was organized in 1987. Mr. Bergman received a Bachelor of Science degree and a
Master of Engineering (Electrical) degree from Cornell University, and a Master
of Science in Engineering and a Ph.D. degree from The Johns Hopkins University.
Mr. Bergman is also a Director, Vice-President and Secretary of Intervest
Bancshares Corporation, the Parent Company, and Director and a member of the
Loan Committee of Intervest National Bank, a wholly owned subsidiary of
Intervest Bancshares Corporation.

Michael A. Callen, age 59, serves as a Director of the Company, and has
served in such capacity since October, 1992. Mr. Callen received a Bachelor of
Arts degree from the University of Wisconsin in Economics and Russian. Mr.
Callen is President of Avalon Argus Associates, a financial consulting firm.
Previously, Mr. Callen had been Senior Advisor, The National Commercial Bank,
Jeddah, Kingdom of Saudi Arabia and was a Director and Sector Executive at
Citicorp/Citibank , responsible for corporate banking activities in North
America, Europe and Japan. Mr. Callen is a Director of Intervest Bancshares
Corporation and Intervest National Bank, and also serves as a Director of AMBAC,
Inc.

Jerome Dansker, age 83, serves as a Director and as Executive Vice
President of the Company, and has served in such capacity since November, 1993.
Mr. Dansker became Chairman of the Board of Directors in June, 1996. Mr. Dansker
received a Bachelor of Science degree from the New York University School of
Commerce, Accounts and Finance, a law degree from the New York University School
of Law, and is admitted to practice as an attorney in the State of New York. Mr.
Dansker is a Director, Chairman of the Board and Executive Vice President of
Intervest Bancshares Corporation. He is also Chairman of the Board of Directors
and Chairman of the Loan Committee of Intervest National Bank.

Lowell S. Dansker, age 51, serves as a Director, and as President and
Treasurer of the Company, and has served in such capacities since the Company
was organized in 1987. Mr. Dansker received a Bachelor of Science in Business
Administration from Babson College, a law degree from the University of Akron
School of Law, and is admitted to practice as an attorney in New York, Ohio,
Florida and the District of Columbia. Mr. Dansker is also a Director, President
and Treasurer of Intervest Bancshares Corporation, and Chief Executive Officer,
Director and a member of the Loan Committee of Intervest National Bank.

Wayne F. Holly, age 45, serves as a Director of the Company and has served
in such capacity since June, 1999. Mr. Holly received a Bachelor of Science
degree in Economics from Alfred University. Mr. Holly is President of Sage,
Rutty & Co., Inc., a member of the Boston Stock Exchange, with offices in
Rochester, New York and Canandaigua, New York, and is also a Director of
Intervest Bancshares Corporation and Intervest National Bank.

Edward J. Merz, age 70, serves as a Director of the Company and has served
in such capacity since February, 1998. Mr. Merz received a Bachelor of Business
Administration from City College of New York and is a graduate of the Stonier
School of Banking at Rutgers University. Mr. Merz is Chairman of the Board of
Directors of the Suffolk County National Bank of Riverhead and of its parent,
Suffolk Bancorp and has been an officer and Director of those companies for more
than five years. He is also a Director of Intervest Bancshares Corporation and
Intervest National Bank.

30


Lawton Swan, III, age 59, serves as a Director of the Company, and has
served in such capacity since February, 2000. Mr. Swan received a Bachelor of
Science degree from Florida State University in Business Administration and
Insurance. Mr. Swan is President of Interisk Corporation, a consulting firm
specializing in risk management and employee benefit plans, which he founded in
1978. He is also a Director of Intervest Bancshares Corporation and Intervest
National Bank.

Thomas E. Willett, age 54, serves as a Director of the Company, and has
served in such capacity since March, 1999. Mr. Willett received a Bachelor of
Science Degree from the United States Air Force Academy and a law degree from
Cornell University School of Law. Mr. Willett has been a partner of Harris Beach
LLP, a law firm in Rochester, New York, for more than five years and is a
Director of Intervest Bancshares Corporation and Intervest National Bank.

David J. Willmott, age 63, serves as a Director of the Company, and has
served in such capacity since June, 1989. Mr. Willmott is a graduate of Becker
Junior College and attended New York University Extension and Long Island
University Extension of Southampton College. Mr. Willmott is the Editor and
Publisher of Suffolk Life Newspapers, which he founded more than 25 years ago.
Mr. Willmott is also a Director of Intervest Bancshares Corporation and
Intervest National Bank.

Wesley T. Wood, age 59, serves as a Director of the Company, and has served
in such capacity since April, 1992. Mr. Wood received a Bachelor of Science
degree from New York University, School of Commerce. Mr. Wood is President of
Marketing Capital Corporation, an international marketing consulting and
investment firm which he founded in 1973. He is also a Director of Intervest
Bancshares Corporation and Intervest National Bank, a Director of the Center of
Direct Marketing at New York University, a member of the Marketing Committee at
Fairfield University in Connecticut, and a Trustee of St. Dominics in Oyster
Bay, New York.

All of the Directors of the Company have been elected to serve as Directors
until the next annual meeting of the Company's shareholders. Each of the
officers of the Company has been elected to serve as an officer until the next
annual meeting of the Company's Directors.

Jerome Dansker is the father of Lowell S. Dansker

Item 11. Executive Compensation
----------------------

Each of the directors receives a fee of $250 for each meeting of the Board of
Directors he attends.

Effective as of July 1, 1995, the Company entered into an employment agreement
with Mr. Jerome Dansker, its Chairman and Executive Vice President. The
agreement is for a term of ten years and provides for the payment of an annual
salary in the present amount of $177,315, which is subject to increase annually
by six percent or by the percentage increase in the consumer price index, if
higher. The agreement also provides for the payment of unused vacation time,
monthly expense account payments, the use of a car and medical benefits. In the
event of Mr. Dansker's death or disability, monthly payments of one-half of the
amount which otherwise would have been paid to Mr. Dansker will continue until
the greater of (i) the balance of the term of employment, or (ii) three years.
Effective August 3, 1998, the Company modified the employment agreement to
provide for additional compensation of $1,000 per month for each $10,000,000 of
gross assets of the Company in excess of $100,000,000.

The following table sets forth information concerning total compensation paid
during the last three years to Mr. Jerome Dansker. No other executive officer of
the Company received annual compensation in excess of $100,000.

31




SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
-------------------------------------------------------------------------------------
Other Annual
Name and Principal Position Year Salary Bonuses Compensation Awards Pay-Outs
- ------------------------------------------------------------------------------------------------------------------------------------

Jerome Dansker,
Chairman and Executive Vice President 2001 $214,057 $ - $ 1,700 $ - $ -
2000 $157,810 $ - $ 1,300 $ - $ -
1999 $167,414 $ 9,305 $ 1,550 $ - $ -
- ------------------------------------------------------------------------------------------------------------------------------------


Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------

Since March of 2000, 100% of the outstanding stock of the Company has been owned
by: Intervest Bancshares Corporation, 10 Rockefeller Plaza, Suite 1015 New York,
New York 10020.

Item 13. Certain Relationships and Related Transactions
----------------------------------------------

In connection with its acquisition by Intervest Bancshares Corporation in March
2000, the former shareholders of the Company received an aggregate of 1,250,000
shares of the Class A Common Stock of Intervest Bancshares Corporation in
exchange for all of the issued and outstanding shares of capital stock of the
Company.

Mr. Wayne F. Holly, who is a director of the Company, also serves as President
of Sage, Rutty & Co., Inc., which firm has acted as an underwriter/placement
agent in connection with the Company's offerings of debentures, including the
offering of debentures conducted during fiscal 2001, 2000 and 1999.

Mr. Thomas E. Willett, who is a director of the Company, also is a partner in
the law firm of Harris Beach LLP, which firm has provided legal services to the
Company and the Parent Company in 2001 and 2000.

In connection with the placement of subordinated debentures in 1998 and 2000,
Intervest Securities Corporation, an affiliate of the Company, received
commissions and fees aggregating $15,000 in 2001, $34,000 in 2000 and $36,000 in
1999.

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
----------------------------------------------------------------

(a) Documents Filed as Part of this Report

(1) Financial Statements:

See Item 8 "Financial Statements and Supplementary Data"

(2) Financial Statement Schedules:

IV - Mortgage Loans on Real Estate (See Item 8 "Financial Statements
and Supplementary Data")

All other schedules have been omitted because they are inapplicable,
not required, or the information is included in the Financial
Statements or Notes thereto.

(3) Exhibits: The following exhibits are filed herein as part of this Form
10-K:

Exhibit No. Description of Exhibit
- ----------- ----------------------

2. Agreement and Plan of Merger dated as of November 1, 1999 by and among
the Company, Intervest Bancshares Corporation and ICNY Acquisition
Corporation, incorporated by reference to the Company's annual report
on Form 10-K for the year ended December 31, 1999, wherein such
document was filed as Exhibit 2.0.

32




Exhibit No. Description of Exhibit
- ----------- ----------------------

3.1 Certificate of Incorporation of the Company, incorporated by reference
to Registrant's Registration Statement on Form S-18 (File No.
33-27404-NY), declared effective May 12, 1989.

3.2 Certificate of Amendment to Certificate of Incorporation dated August
17, 1998, incorporated by reference to the Company's annual report on
Form 10-K for the year ended December 31, 1998, wherein such document
was filed as Exhibit 3.

3.3 By-laws of the Company, incorporated by reference to the Company's
Registration Statement on Form S-11 (File No. 33-39971), declared
effective on May 13, 1991.

4.1 Form of Indenture between the Company and First American Bank of
Georgia, as trustee, dated as of April 15, 1990, incorporated by
reference to the Company's Registration Statement on Form S-11 (No.
33-33500), declared effective on March 28, 1990.

4.2 Form of Indenture between the Company and First American Bank of
Georgia, as trustee, dated as of June 1, 1991, incorporated by
reference to the Company's Registration Statement on Form S-11 (No.
33-39971), declared effective on May 13, 1991.

4.3 Form of Indenture between the Company and The Bank of New York, as
trustee, dated as of March 1, 1992, incorporated by reference to the
Company's Registration Statement on Form S-11 (File No. 33-44085),
declared effective on February 20, 1992.

4.4 Form of Indenture between the Company and The Bank of New York, as
trustee, dated as of July 1, 1992, incorporated by reference to the
Company's Registration Statement on Form S-11 (File No. 33-47801),
declared effective on June 29, 1992.

4.5 Form of Indenture between the Company and The Bank of New York, as
trustee, dated as of September 15, 1993, incorporated by reference to
the Company's Registration Statement on Form S-11 (File No. 33-65812),
declared effective on September 13, 1993.

4.6 Form of Indenture between the Company and The Bank of New York, as
trustee, dated as of February 1, 1994, incorporated by reference to
the Company's Registration Statement on Form S-11 (File No. 33-73108),
declared effective on January 28, 1994.

4.7 Form of Indenture between the Company and The Bank of New York, as
trustee, dated as of November 1, 1994, incorporated by reference to
the Company's Registration Statement on Form S-11 (File No. 33-84812),
declared effective on October 28, 1994.

4.8 Form of Indenture between the Company and The Bank of New York, as
trustee, dated as of June 1, 1995, incorporated by reference to the
Company's Registration Statement on Form S-11 (File No. 33-90596)
declared effective on May 12, 1995.

4.9 Form of Indenture between the Company and The Bank of New York, as
trustee, dated as of November 1, 1995, incorporated by reference to
the Company's Registration Statement on Form S-11 (File No. 33-96662),
declared effective on October 19, 1995.

4.10 Form of Indenture between the Company and The Bank of New York, as
trustee, dated as of June 1, 1996, incorporated by reference to the
Company's Registration Statement on Form S-11 (File No. 333-2459),
declared effective on May 10, 1996.

33


Exhibit No. Description of Exhibit
- ----------- ----------------------

4.11 Form of Indenture between the Company and The Bank of New York, as
trustee, dated as of November 1, 1996, incorporated by reference to
the Company's Registration Statement on Form S-11 (File No.
333-11413), declared effective on October 15, 1996.

4.12 Form of Indenture between the Company and The Bank of New York, as
trustee, dated as of May 1, 1997, incorporated by reference to the
Company's Registration Statement on Form S-11 (File No. 333-23093),
declared effective on April 30, 1997.

4.13 Form of Indenture between the Company and the Bank of New York, as
trustee, dated as of July 1, 1999, incorporated by reference to the
Company's Registration statement in Form S-11 (File No. 333-78135),
declared effective on June 28, 1999.

4.14 Indenture between the Company and the Bank of New York, as Trustee,
dated December 1, 1998, incorporated by reference to the Company's
annual report on Form 10-K for the year ended December 31, 1998,
wherein such document was filed as Exhibit 4.

4.15 Agreements of Resignation, Appointment and Acceptance dated as of
April 30, 1992, by and among the Company, First American Bank of
Georgia, N.A. and The Bank of New York, incorporated by reference to
the Company's annual report on Form 10K for the year ended December
31, 1992 wherein such documents were filed as Exhibit 4.8.

4.16 Indenture between the Company and the Bank of New York, as Trustee,
dated September 15, 2000, incorporated by reference to the Company's
report on Form 10-K for the year ended December 31, 2000, wherein such
document was filed as exhibit 4.16

4.17 Indenture between the Company and the Bank of New York, as trustee,
dated August 1, 2001, incorporated by reference to the Company's
Registration Statement on Form S-11 (File No. 333-57324), declared
effective September 1, 2001.

4.18 Indenture between the Company and the Bank of New York, as trustee,
dated February 1, 2002, incorporated by reference to the Company's
Registration Statement on Form S-11 (File No. 333-73580), declared
effective January 17, 2002.


10.0 Employment Agreement between the Company and Jerome Dansker dated as
of July 1, 1995, incorporated by reference to the Company's
Registration Statement on Form S-11 (File #33-96662), declared
effective on October 19, 1995.

10.1 Amendment to Employment Agreement between the Company and Jerome
Dansker dated August 3, 1998, incorporated by reference to the
Company's annual report on Form 10-K for the year ended December 31,
1998, wherein such document was filed as Exhibit 10.

(b) No reports on Form 8-K were filed during the last quarter of the
period covered by this report.




34


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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, on the date indicated.

INTERVEST CORPORATION OF NEW YORK
(Registrant)

By: /s/ Lowell S. Dansker Date: February 27, 2002
-------------------------------- -----------------------
Lowell S. Dansker, President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the date indicated.

Chairman of the Board, Executive Vice President and Director:

By: /s/ Jerome Dansker Date: February 27, 2002
-------------------------------- -----------------------
Jerome Dansker

President, Treasurer and Director
(Principal Executive, Financial and Accounting Officer):

By: /s/ Lowell S. Dansker Date: February 27, 2002
-------------------------------- -----------------------
Lowell S. Dansker

Vice President, Secretary and Director:

By: /s/ Lawrence G. Bergman Date: February 27, 2002
-------------------------------- -----------------------
Lawrence G. Bergman

Directors:

By: /s/ Michael A. Callen Date: February 27, 2002
-------------------------------- -----------------------
Michael A. Callen

By: /s/ Wayne F. Holly Date: February 27, 2002
-------------------------------- -----------------------
Wayne F. Holly

By: /s/ Edward J. Merz Date: February 27, 2002
-------------------------------- -----------------------
Edward J. Merz

By: /s/ Lawton Swan, III Date: February 27, 2002
-------------------------------- -----------------------
Lawton Swan, III

By: /s/ Thomas E. Willett Date: February 27, 2002
-------------------------------- -----------------------
Thomas E. Willett

By: /s/ David J. Willmott Date: February 27, 2002
-------------------------------- -----------------------
David J. Willmott

By: /s/ Wesley T. Wood Date: February 27, 2002
-------------------------------- -----------------------
Wesley T. Wood




35





Supplemental Information to be Furnished with Reports Filled Pursuant to Section
15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to
Section 12 of the Act:

Registrant does not solicit proxies or proxy statements to holders of its
securities. The annual report to holders of its Debentures has not as yet been
distributed.

When the annual report has been distributed to the holders of Debentures, four
copies will be sent to the Commission.














































36