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

FORM 10-Q

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

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003
-------------

Commission File No. 33-22976-NY
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INTERVEST MORTGAGE CORPORATION
------------------------------
(Exact name of registrant as specified in its charter)


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

10 ROCKEFELLER PLAZA, SUITE 1015
NEW YORK, NEW YORK 10020-1903
----------------------------------------
(Address of principal executive offices)

(212) 218-2800
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(Registrant's telephone number, including area code)



Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days:
YES X NO .
--- ---

Indicate by check mark whether the registrant is an accelerated filer (as
defined in rule 12b-2 of the Exchange Act):
YES NO X .
--- ---

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date:

Title of Each Class: Shares Outstanding:
-------------------- -------------------

Common Stock, no par value per share 100 shares outstanding at July 31, 2003
------------------------------------ ---------------------------------------


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INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES

FORM 10-Q
JUNE 30, 2003

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION Page
----

ITEM 1. FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets
as of June 30, 2003 (Unaudited) and December 31, 2002 . . . . . . 2

Condensed Consolidated Statements of Operations (Unaudited)
for the Quarters and Six-Months Ended June 30, 2003 and 2002 . . . 3

Condensed Consolidated Statements of Changes in Stockholder's Equity
(Unaudited) for the Six-Months Ended June 30, 2003 and 2002 . . . 4

Condensed Consolidated Statements of Cash Flows (Unaudited)
for the Six-Months Ended June 30, 2003 and 2002 . . . . . . . . . 5

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

Review by Independent Certified Public Accountants . . . . . . . . . 9

Report on Review by Independent Certified Public Accountants . . . . 10

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . 11

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . 15

ITEM 4. CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . . 15

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . 16

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS . . . . . . . . . . 16

ITEM 3. DEFAULTS UPON SENIOR SECURITIES . . . . . . . . . . . . . . . 16

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . 16

ITEM 5. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . 16

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. . . . . . . . . . . . . . . 16

SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

CERTIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17


PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
- --------------------------------------------------------------

The Company is making this statement in order to satisfy the "Safe Harbor"
provision contained in the Private Securities Litigation Reform Act of 1995. The
statements contained in this report on Form 10-Q that are not statements of
historical fact may include forward-looking statements that involve a number of
risks and uncertainties. Such forward-looking statements are made based on
management's expectations and beliefs concerning future events impacting the
Company and are subject to uncertainties and factors relating to the Company's
operations and economic environment, all of which are difficult to predict and
many of which are beyond the control of the Company, that could cause actual
results of the Company to differ materially from those matters expressed in or
implied by forward-looking statements. The following factors are among those
that could cause actual results to differ materially from the forward-looking
statements: changes in general economic, market and regulatory conditions, the
development of an interest rate environment that may adversely affect the
Company's net interest income, other income or cash flow anticipated from the
Company's operations, investment and lending activities; and changes in laws and
regulations affecting the Company.


1



PART I. FINANCIAL INFORMATION
- -----------------------------
ITEM 1. FINANCIAL STATEMENTS
- ----------------------------


INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


(Unaudited)
JUNE 30, DECEMBER 31,
($in thousands) 2003 2002
- --------------------------------------------------------------------------------------------------------------


ASSETS
Cash and due from banks $ 1,145 $ 3,225
Commercial paper and other short-term investments 10,563 14,721
---------------------------
Total cash and cash equivalents 11,708 17,946
Time deposits with banks - 2,000
Mortgage loans receivable (net of unearned fees and discounts and allowance for
loan losses -note 2) 90,727 73,398
Accrued interest receivable 666 583
Fixed assets, net 57 67
Deferred debenture offering costs, net (note 3) 2,714 2,556
Other assets 1,052 761
- --------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 106,924 $ 97,311
==============================================================================================================

LIABILITIES
Mortgage escrow funds payable $ 938 $ 660
Subordinated debentures payable (note 4) 80,100 74,000
Debenture interest payable at maturity (note 4) 11,255 10,751
Other liabilities 448 487
- --------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 92,741 85,898

STOCKHOLDER'S EQUITY
Class A common stock (no par value, 200 shares authorized, 100 shares issued and
outstanding) 2,100 2,100
Class B common stock (no par value, 100 shares authorized, none issued) - -
Additional paid-in-capital 5,510 3,509
Retained earnings 6,573 5,804
- --------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDER'S EQUITY 14,183 11,413
- --------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 106,924 $ 97,311
==============================================================================================================

See accompanying notes to condensed consolidated financial statements.


2



INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)


QUARTER ENDED SIX-MONTHS ENDED
JUNE 30, JUNE 30,
($in thousands) 2003 2002 2003 2002
- --------------------------------------------------------------------------------------------

REVENUES
Interest and fee income on mortgages $ 2,350 $2,267 $ 4,369 $ 4,161
Interest income on short-term investments 35 27 108 114
----------------------------------------
Total interest and fee income 2,385 2,294 4,477 4,275
Service agreement income - related party (note 5) 497 400 984 671
Gain on early repayment of mortgages 124 48 132 83
Other income 49 29 93 61
- --------------------------------------------------------------------------------------------
TOTAL REVENUES 3,055 2,771 5,686 5,090
- --------------------------------------------------------------------------------------------

EXPENSES
Interest on debentures 1,532 1,316 2,974 2,617
Amortization of deferred debenture offering costs 233 202 449 392
General and administrative 404 354 853 692
- --------------------------------------------------------------------------------------------
TOTAL EXPENSES 2,169 1,872 4,276 3,701
- --------------------------------------------------------------------------------------------
Income before income taxes 886 899 1,410 1,389
Provision for income taxes 402 410 641 636
- --------------------------------------------------------------------------------------------
NET INCOME $ 484 $ 489 $ 769 $ 753
============================================================================================

See accompanying notes to condensed consolidated financial statements.


3



INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(Unaudited)


SIX-MONTHS ENDED
JUNE 30,
--------------------
($in thousands) 2003 2002
- ------------------------------------------------------------------

COMMON STOCK
- ------------------------------------------------------------------
Balance at beginning and end of period $ 2,100 $ 2,100
- ------------------------------------------------------------------

ADDITIONAL PAID-IN-CAPITAL, COMMON
- ------------------------------------------------------------------
Balance at beginning of period 3,509 3,509
Contribution from Parent Company 2,001 -
- ------------------------------------------------------------------
Balance at end of period 5,510 3,509
- ------------------------------------------------------------------

RETAINED EARNINGS
- ------------------------------------------------------------------
Balance at beginning of period 5,804 4,238
Net income for the period 769 753
- ------------------------------------------------------------------
Balance at end of period 6,573 4,991
- ------------------------------------------------------------------
TOTAL STOCKHOLDER'S EQUITY AT END OF PERIOD $ 14,183 $ 10,600
==================================================================

See accompanying notes to condensed consolidated financial statements.


4



INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)


SIX-MONTHS ENDED
JUNE 30,
-----------------------
($in thousands) 2003 2002
- -------------------------------------------------------------------------------------

OPERATING ACTIVITIES
Net income $ 769 $ 753
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 16 13
Amortization of deferred debenture offering costs 449 392
Amortization of premiums, fees and discounts, net (418) (313)
Gain on early repayment of mortgage loans receivable (132) (83)
Increase in mortgage escrow funds payable 278 15
Increase in debenture interest payable at maturity 504 444
Change in all other assets and liabilities, net 486 173
- -------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,952 1,394
- -------------------------------------------------------------------------------------

INVESTING ACTIVITIES
Principal repayments of mortgage loans receivable 23,671 8,399
Originations of mortgage loans receivable (41,350) (22,580)
Decrease in interest-earning time deposits 2,000 -
Purchases of fixed asset, net (5) (24)
- -------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (15,684) (14,205)
- -------------------------------------------------------------------------------------

FINANCING ACTIVITIES
Proceeds from issuance of debentures, net of offering costs 6,893 5,296
Principal repayments of debentures (1,400) (2,500)
Capital contribution from Parent Company 2,001 -
- -------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 7,494 2,796
- -------------------------------------------------------------------------------------

Net decrease in cash and cash equivalents (6,238) (10,015)

Cash and cash equivalents at beginning of period 17,946 16,752

- -------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 11,708 $ 6,737
=====================================================================================

SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
Interest $ 2,470 $ 2,172
Income taxes 961 697
- -------------------------------------------------------------------------------------

See accompanying notes to condensed consolidated financial statements.


5

INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1 - GENERAL

The condensed consolidated financial statements of Intervest Mortgage
Corporation and Subsidiaries (the "Company") in this report have not been
audited except for the information derived from the audited Consolidated Balance
Sheet as of December 31, 2002. The financial statements in this report should be
read in conjunction with the consolidated financial statements and related notes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2002.

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

The Company is engaged in the real estate business, including the origination
and purchase of real estate mortgage loans, consisting of first mortgage, junior
mortgage loans and wraparound mortgage loans receivable. The Company's
investment policy emphasizes the investment in mortgage loans receivable on
income producing properties.

The Company is 100% owned by Intervest Bancshares Corporation (the "Parent
Company"). Executive Officers of the Company are also shareholders and officers
of the Parent Company and serve on the Boards of Directors of both companies.

In the opinion of management, all material adjustments necessary for a fair
presentation of financial condition and results of operations for the interim
periods presented in this report have been made. These adjustments are of a
normal recurring nature. The results of operations for the interim periods are
not necessarily indicative of results that may be expected for the entire year
or any other interim period. In preparing the condensed consolidated financial
statements, management is required to make estimates and assumptions that affect
the reported amounts of assets, liabilities, revenues and expenses. Actual
results could differ from those estimates. Certain reclassifications have been
made to prior period amounts to conform to the current periods' presentation.

NOTE 2 - MORTGAGE LOANS RECEIVABLE

Mortgage loans receivable are stated at their outstanding principal balances,
exclusive of any deferred fees or costs on originated mortgage loans receivable
and net of unamortized discounts on purchased mortgage loans receivable and the
allowance for mortgage loans receivable losses. Purchased mortgage loans
receivable, 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 mortgage loans receivable based
on their variable or floating interest rates. Interest income is accrued on the
unpaid principal balance. Discounts are amortized to income over the term of
the related mortgage loans receivable using the constant interest method.
Mortgage loans receivable origination fees net of certain direct origination
costs are deferred and recognized as an adjustment of the yield of the related
mortgage loans receivable.

The allowance for mortgage loans receivable losses is netted against mortgage
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
mortgage loans receivable portfolio, overall portfolio quality, mortgage loans
receivable concentrations, specific problem mortgage loans receivable 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 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 mortgage loans receivable losses is computed related to certain
mortgage loans receivable that are impaired. A mortgage loan receivable 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 mortgage
loans receivable normally consist of mortgage loans receivable on nonaccrual
status. Interest income on impaired mortgage loans receivable is recognized on a
cash basis. Impairment for commercial real estate and residential mortgage loans
receivable is measured based on the present value of expected future cash flows,
discounted at the mortgage loan receivable's effective interest rate, or



6

INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 2 - MORTGAGE LOANS RECEIVABLE, CONTINUED

the observable market price of the mortgage loan receivable or the estimated
fair value of the mortgage loan receivable'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 mortgage loan
receivable, 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 mortgage loan receivable that exceeds
the fair value of the collateral.

The balance of the allowance for mortgage loans receivable losses was $194,000
at June 30, 2003 and $101,000 at December 31, 2002. For the quarter and six
months ended June 30, 2003, the provision for mortgage loans receivable losses
was $36,000 and $93,000, respectively, compared to $38,000 and $56,000 for the
quarter and six months ended June 30, 2002 . For the quarter and six months
ended June 30, 2003 and 2002, there were no mortgage loans receivable
chargeoffs, or mortgage loans receivable classified as nonaccrual or impaired.

NOTE 3 - DEFERRED DEBENTURE OFFERING COSTS

Costs related to offerings of debentures are deferred and amortized over the
respective terms of the debentures. Deferred debenture offering costs consist
primarily of underwriter's commissions. At June 30, 2003, deferred debenture
offering costs, net of accumulated amortization of $3,853,000, amounted to
$2,714,000. At December 31, 2002, deferred debenture offering costs, net of
accumulated amortization of $3,488,000, amounted to $2,556,000.

NOTE 4 - SUBORDINATED DEBENTURES PAYABLE

The following table summarizes debentures payable.



At June 30, At December 31,
------------ ----------------
($in thousands) 2003 2002
- ---------------------------------------------------------------------------------------------------------

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, 2003 - 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, 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 8 % fixed - due January 1, 2006 1,250 1,250
Series 09/18/00 - interest at 9% fixed - due January 1, 2008 1,250 1,250
Series 08/01/01 - interest at 7 % fixed - due April 1, 2005 1,750 1,750
Series 08/01/01 - interest at 8% fixed - due April 1, 2007 2,750 2,750
Series 08/01/01 - interest at 8 % fixed - due April 1, 2009 2,750 2,750
Series 01/17/02 - interest at 7 % fixed - due October 1, 2005 1,250 1,250
Series 01/17/02 - interest at 7 % fixed - due October 1, 2007 2,250 2,250
Series 01/17/02 - interest at 7 % fixed - due October 1, 2009 2,250 2,250
Series 08/05/02 - interest at 7 % fixed - due January 1, 2006 1,750 1,750
Series 08/05/02 - interest at 7 % fixed - due January 1, 2008 3,000 3,000
Series 08/05/02 - interest at 7 % fixed - due January 1, 2010 3,000 3,000
Series 01/21/03 - interest at 6 % fixed - due July 1, 2006 1,500 -
Series 01/21/03 - interest at 7 % fixed - due July 1, 2008 3,000 -
Series 01/21/03 - interest at 7 % fixed - due July 1, 2010 3,000 -
- ---------------------------------------------------------------------------------------------------------
$ 80,100 $ 74,000
- ---------------------------------------------------------------------------------------------------------


The "prime" in the preceding table refers to the prime rate of JP Morgan Chase
Bank, which was 4.00% at June 30, 2003 and 4.25% at December 31, 2002.


7

INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 4 - SUBORDINATED DEBENTURES PAYABLE, CONTINUED

In March of 2003, the Company issued its Series 01/21/03 debentures in the
principal amount of $7,500,000. Net proceeds, after deferred offering costs,
amounted to $6,935,000. This series accrues and pays interest quarterly.

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 $6,350,000 of these
debentures at June 30, 2003 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.

The Series 11/10/98, 6/28/99, 9/18/00, $770,000 of Series 8/1/01, $270,000 of
Series 1/17/02 and $1,520,000 of Series 8/5/02 debentures accrue and compound
interest quarterly, with such interest due and payable at maturity. Interest is
paid quarterly on the remaining debentures in series 8/1/01, 1/17/02 and 8/5/02.
The holders of Series 11/10/98, 6/28/99, 9/18/00, 1/17/02, 8/5/02 and 1/21/03
debentures can require the Company to repurchase the debentures for face amount
plus accrued interest each year (beginning January 1, 2004 for Series 9/18/00,
October 1, 2005 for Series 1/17/02, January 1, 2006 for Series 8/5/02 and July
1, 2006 for series 1/21/03) 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 08/05/02 and Series
01/21/03 debentures. The Series 08/05/02 debentures would be redeemable at a
premium of 1% if the redemption were prior to October 1, 2003. The Series
01/21/03 debentures would be redeemable at a premium of 1% if the redemption
were prior to April 1, 2004. All the debentures are unsecured and subordinate to
all present and future senior indebtedness, as defined in the indenture related
to the debenture.

The Company has filed an offering to issue additional subordinated debentures.
It is anticipated that debentures in an aggregate principal amount of up to
$8,500,000 will be issued in the third quarter of 2003.

Scheduled contractual maturities of debentures as of June 30, 2003 are
summarized as follows:



($in thousands) Principal Accrued Interest
- ---------------------------------------------------------------------------

For the six-months ended December 31, 2003 $ - $ 1,013
For the year ended December 31, 2004 21,250 5,496
For the year ended December 31, 2005 29,100 3,044
For the year ended December 31, 2006 6,500 1,171
For the year ended December 31, 2007 5,000 50
Thereafter 18,250 481
- ---------------------------------------------------------------------------
$ 80,100 $ 11,255
- ---------------------------------------------------------------------------


NOTE 5 - RELATED PARTY TRANSACTIONS

The Company has a service agreement, which renews each January 1, unless
terminated by either party, with Intervest National Bank (another wholly owned
subsidiary of the Parent Company) with respect to mortgage loan origination and
servicing for them. The Company earned $497,000 and $984,000 from Intervest
National Bank for the quarter and six months ended June 30, 2003, respectively
and $400,000 and $671,000 for the quarter and six months ended June 30, 2002,
respectively, in connection with this service agreement.

The Company participates with Intervest National Bank in certain mortgage loans
receivable. The aggregate balance of the Company's participation in these
mortgages was $5,988,000 and $6,224,000 at June 30, 2003 and December 31, 2002,
respectively.

The Company has interest-bearing and noninterest-bearing deposit accounts with
Intervest National Bank totaling $1,009,000 at June 30, 2003 and $4,255,000 at
December 31, 2002. The Company received interest income of $7,000 and $24,000
from Intervest National Bank for the quarter and six months ended June 30, 2003,
respectively and $4,000 and $37,000 for the quarter and six months ended June
30, 2002, respectively, in connection with such deposits. These amounts are
included in interest income in the statement of operations.


8

INTERVEST MORTGAGE CORPORATION AND SUBSIDIARIES

REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Eisner LLP, the Company's independent certified public accountants, have made a
limited review of the condensed consolidated financial statements as of June 30,
2003, and for the three- and six-month periods ended June 30, 2003 and June 30,
2002 presented in this document, in accordance with standards established by the
American Institute of Certified Public Accountants.

Their report furnished pursuant to Article 10 of Regulation S-X is included
herein.




9

REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


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

We have reviewed the condensed consolidated balance sheet of Intervest
Mortgage Corporation and Subsidiaries (the "Company") as of June 30, 2003, and
the related condensed consolidated statements of operations for the three and
six-month periods ended June 30, 2003 and 2002 and the related condensed
consolidated statements of changes in stockholder's equity and cash flows for
the six-month periods ended June 30, 2003 and 2002. These financial statements
are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with auditing standards generally accepted in the United States of
America, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.

Based on our review, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated financial statements
for them to be in conformity with accounting principles generally accepted in
the United States of America.

We previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet as of
December 31, 2002 and the related consolidated statements of operations, changes
in stockholder's equity and cash flows for the year then ended (not presented
herein) , and in our report dated January 23, 2003, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance sheet
as of December 31, 2002 is fairly stated in all material respects in relation to
the consolidated balance sheet from which it has been derived.




/s/ Eisner LLP
- ----------------
New York, New York
July 22, 2003


10

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

GENERAL
- -------

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

In 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 financial 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 and Intervest Securities Corporation.
Intervest National Bank is 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.
Intervest Securities Corporation is a broker/dealer who has and will continue to
participate as a selected dealer from time to time in offerings of debt
securities for the Company.

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 can also have an impact on the Company's operations.

The Company has historically invested primarily in short-term real estate
mortgage loans receivable secured by income producing real property that mature
in approximately five years. The properties to be mortgaged are inspected by
representatives of the Company and mortgage loans receivable are made only on
those types of 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.

A significant portion of the Company's mortgage portfolio is composed of
mortgages on multi-family residential properties, many 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 a 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 receivable 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.

COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2003 AND DECEMBER 31, 2002
- ------------------------------------------------------------------------

Total assets at June 30, 2003 increased to $106,924,000, from $97,311,000 at
December 31, 2002. The increase is reflective of the proceeds from issuance of
subordinated debentures with a principal amount of $7,500,000, which was
partially offset by the redemption at maturity of subordinated debentures with a
principal amount of $1,400,000. Total assets also increased as the result of a
$2,001,000 capital contribution from the Parent Company and $769,000 of income
for the first half of 2003.

Cash and cash equivalents amounted to $11,708,000 at June 30, 2003, compared to
$17,946,000 at December 31, 2002. The decrease was reflected in a lower level of
funds maintained in money market accounts and cash in other banks. The decrease
was used to fund additional mortgage loans receivable originated in the first
six months of 2003.

Mortgage loans receivable, net of unearned income and allowance for loan losses,
amounted to $90,727,000 at June 30, 2003, compared to $73,398,000 at December
31, 2002. The increase, funded by the above-mentioned decrease in cash and cash


11

equivalents and a net increase in subordinated debentures, was due to new
originations exceeding repayments during the period. At June 30, 2003 and
December 31, 2002, the Company did not have any nonaccrual loans.

Deferred debenture offering costs, net of accumulated amortization, increased to
$2,714,000 at June 30, 2003, from $2,556,000 at December 31, 2002. The increase
was primarily due to the incremental costs associated with the issuance of the
series 1/21/03 subordinated debentures, which was partially offset by normal
amortization.

Total liabilities at June 30, 2003 increased to $92,741,000, from $85,898,000 at
December 31, 2002. The increase was primarily due to the issuance of
subordinated debentures with a principal amount of $7,500,000, partially offset
by the maturity and redemption of subordinated debentures with a principal
balance of $1,400,000. Also contributing to this increase was an increase in
accrued interest payable on debentures and a higher level of mortgage escrow
funds payable.

Subordinated debentures outstanding at June 30, 2003 increased to $80,100,000,
from $74,000,000 at December 31, 2002 as a result of the issuance of series
01/21/03 of $7,500,000, which was partially offset by the maturity and
redemption of a portion of series 11/10/98 with a principal balance of
$1,400,000. Debenture interest payable increased to $11,255,000 at June 30,
2003, from $10,751,000 at December 31, 2002, primarily as a result of the
accrual of interest on the debentures outstanding, which was partially offset by
the payment of $570,000 of accrued interest on the debentures that were redeemed
at maturity.

Mortgage escrow funds increased to $938,000 at June 30, 2003, an increase of
$278,000 from the December 31, 2002 balance of $660,000. This increase was
primarily due to new escrow funds resulting from the increase in mortgage loans
receivable. Mortgage escrow funds payable represent advance payments made by the
borrowers for taxes, insurance and other charges remitted by the Company to
third parties.

Stockholder's equity increased to $14,183,000 at June 30, 2003, from $11,413,000
at year-end 2002. The increase was due to capital contributions aggregating
$2,001,000 from the Parent Company and net income of $769,000 for the six-
months ended June 30, 2003.

COMPARISON OF RESULTS OF OPERATIONS FOR THE QUARTER ENDED JUNE 30, 2003 AND 2002
- --------------------------------------------------------------------------------

The Company recorded net income of $484,000 for the second quarter of 2003,
compared to net income of $489,000 for the second quarter of 2002.

Interest income was $2,385,000 for the quarter ended June 30, 2003, compared to
$2,294,000 for the same period a year ago. The increase of $91,000 was primarily
due to an increase in mortgage loans receivable, which was mostly offset by a
decrease in rates on new mortgage loans receivable, repayments of
higher-yielding loans and lower rates earned on short-term investments.

Interest expense on debentures was $1,532,000 for the quarter ended June 30,
2003, compared $1,316,000 for the same period of 2002. The increase of $216,000
was primarily due to a $13,850,000 increase in the average balance of debentures
outstanding in the second quarter of 2003, compared to the second quarter of
2002. This increase was partially offset by a 50 basis point decrease in
interest rates on floating-rate debentures as well as new fixed-rate debentures
issued at a lower rate than those that matured.

Amortization of deferred debenture offering costs was $233,000 for the quarter
ended June 30, 2003, compared to $202,000 for the same period of 2002. The
increase of $31,000 reflected the increased amount of debentures outstanding.

General and administrative expenses increased to $404,000 for the quarter ended
June 30, 2003, from $354,000 for the same period of 2002. The increase was
primarily the result of an increase in compensation and benefits expense of
$45,000, due to additional staff and salary increases, partially offset by a
$16,000 increase in direct fee income resulting from increased originations as
well as a higher amount recognized per loan.

Income tax expense for the quarter ended June 30, 2003 amounted to $402,000,
compared to $410,000 for the quarter ended June 30, 2002. The Company's
effective tax rate was approximately 46% for both periods.


12

COMPARISON OF RESULTS OF OPERATIONS FOR THE SIX-MONTHS ENDED JUNE 30, 2003 AND
- ------------------------------------------------------------------------------
2002
- ----

The Company recorded net income of $769,000 for the six-months ended June 30,
2003, compared to net income of $753,000 for the six-months ended June 30, 2002.

Interest income was $4,477,000 for the six-months ended June 30, 2003, compared
to $4,275,000 for the same period a year ago. The increase of $202,000 was
primarily due to an increase in mortgage loans receivable, which was mostly
offset by a decrease in rates on new mortgage loans receivable, repayments of
higher-yielding loans and lower rates earned on short-term investments.

Interest expense on debentures was $2,974,000 for the six-months ended June 30,
2003, compared $2,617,000 for the same period of 2002. The increase of $357,000
was primarily due to a $12,400,000 increase in the average balance of debentures
outstanding. This increase was partially offset by a 50 basis point decrease in
interest rates on floating-rate debentures from June 30, 2002 to June 30, 2003
and a lower rate on new fixed-rate debentures issued in 2003.

Amortization of deferred debenture offering costs was $449,000 for the
six-months ended June 30, 2003, compared to $392,000 for the same period of
2002. The increase of $57,000 reflected the increased amount of debentures
outstanding.

General and administrative expenses increased to $853,000 for the six-months
ended June 30, 2003, from $692,000 for the same period of 2002. The increase
primarily reflected an increase in compensation and benefits expense of $101,000
due to additional staff and salary increases, partially offset by a $30,000
increase in SFAS 91 direct fee income resulting from increased originations as
well as a higher amount recognized per loan. The increase was also due to an
increase in the provision for loan losses of $37,000 due to new loan
originations and an increase in occupancy expense of $36,000 due to an increase
in rented space and an increase in real estate tax escalation charges.

Income tax expense for the six-months ended June 30, 2003 amounted to $641,000,
compared to $636,000 for the six- months ended June 30, 2002. The Company's
effective tax rate was approximately 46% for both periods

LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------

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

At June 30, 2003, the Company's total commitment to lend aggregated
approximately $23,069,000.

During the first six-months of 2003, the Company received capital contributions
aggregating $2,001,000 from the Parent Company

The Company considers its current liquidity and sources of funds sufficient to
satisfy its outstanding lending commitments and its maturing liabilities.

The Company has filed an offering to issue additional subordinated debentures.
It is anticipated that debentures in an aggregate principal amount of up to
$8,500,000 will be issued in the third quarter of 2003.


13

ASSET AND LIABILITY MANAGEMENT
- ------------------------------

Interest rate risk arises from differences in the repricing of assets and
liabilities within a given time period. The primary objective of the Company's
asset/liability management strategy is to limit, within its established
guidelines, the adverse impact of changes in interest rates on the Company's net
interest income and capital.

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. The
Company's one-year interest rate sensitivity gap was a positive $39,531,000, or
37% of total assets, at June 30, 2003, compared to a positive $27,642,000, or
28%, at December 31, 2002. The increase was primarily due to the origination of
new floating-rate loans as well as existing loans migrating into the less than
one-year maturity timeframe. The new loans were funded primarily by decreases in
short-term investments.

The Company has a "floor," or minimum rate, on many of its floating-rate loans
that is determined in relation to prevailing market rates on the date of
origination. This floor only adjusts upwards in the event of increases in the
loan's interest rate. This feature reduces the effect on interest income of a
falling rate environment because the interest rates on such loans do not reset
downward. For a further discussion of interest rate risk and gap analysis,
including the assumptions used in preparing the gap, see the Company's 2002
Annual Report to Stockholders on Form 10-K, pages 10 and 11.

The table that follows summarizes the Company's interest-earning assets and
interest-bearing liabilities as of June 30, 2003, that are scheduled to
mature or reprice within the periods shown.



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

Floating- rate loans $55,975 - - - $ 55,975
Fixed- rate loans 7,055 $16,130 $ 4,914 $ 7,910 36,009
- ---------------------------------------------------------------------------------------
Total loans 63,030 16,130 4,914 7,910 91,984
Short-term investments 10,563 - - - 10,563
- ---------------------------------------------------------------------------------------
Total rate-sensitive assets $73,593 $16,130 $ 4,914 $ 7,910 $102,547
- ---------------------------------------------------------------------------------------
Debentures payable $41,500 $ 1,250 $ 16,850 $ 20,500 $ 80,100
Accrued interest on debentures 7,148 294 3,314 499 11,255
- ---------------------------------------------------------------------------------------
Total rate-sensitive liabilities $48,648 $ 1,544 $ 20,164 $ 20,999 $ 91,355
- ---------------------------------------------------------------------------------------
GAP (repricing differences) $24,945 $14,586 $ (15,250) $(13,089) $ 11,192
- ---------------------------------------------------------------------------------------
Cumulative GAP $24,945 $39,531 $ 24,281 $ 11,192 $ 11,192
- ---------------------------------------------------------------------------------------
Cumulative GAP to total assets 23.3% 37.0% 22.7% 10.5% 10.5%
- ---------------------------------------------------------------------------------------



14

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss from adverse changes in market prices and
interest rates. The Company's market risk arises primarily from interest rate
risk inherent in its lending and debenture-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, 2002 and 2001, which reflect changes in market prices and rates,
can be found in note 12 of the notes to consolidated financial statements
included in the Company's Annual Report to Stockholders on Form 10-K for the
year ended December 31, 2002. Management believes that there have been no
significant changes in the Company's market risk exposure since December 31,
2002.

Management actively monitors and manages the Company's interest rate risk
exposure. The primary objective in managing interest rate risk is to limit,
within established guidelines, the adverse impact of changes in interest rates
on the Company's net interest income and capital. For a further discussion, see
the section "Asset and Liability Management."


ITEM 4. CONTROLS AND PROCEDURES

a) Evaluation of disclosure controls and procedures. The Company maintains
---------------------------------------------------
controls and procedures designed to ensure that information required to be
disclosed in the reports that the Company files or submits under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the rules and forms of the Securities and Exchange
Commission. Based upon his evaluation of those controls and procedures
performed within 90 days of the filing date of this report, the Principal
Executive and Principal Financial Officer of the Company concluded that the
Company's disclosure controls and procedures were adequate.

b) Changes in internal controls. The Company made no significant changes in
------------------------------
its internal controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation of those controls by the
Principal Executive and Principal Financial Officer.


15

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS
Not Applicable

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(a) Not Applicable
(b) Not Applicable
(c) Not Applicable
(d) Not Applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable

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

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

ITEM 5. OTHER INFORMATION
Not Applicable


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibit is filed as part of this report: 99.1 Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of
the Sarbanes- Oxley Act of 2002.
(b) No reports on Form 8-K were filed during the reporting period covered by
this report.

Signatures

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

INTERVEST MORTGAGE CORPORATION

Date: Aug 08, 2003 By: /s/ Lowell S. Dansker
-----------------------------------------------
Lowell S. Dansker, President (Principal
Executive Officer), Treasurer (Principal
Financial Officer and Principal Accounting
Officer) and Director

Date: Aug 08, 2003 By: /s/ Lawrence G. Bergman
-----------------------------------------------
Lawrence G. Bergman, Vice President, Secretary
and Director


16

CERTIFICATION
-------------

I, Lowell S. Dansker, as the principal executive and principal financial
officer of Intervest Mortgage Corporation and Subsidiaries (the Company),
certify, that:

1. I have reviewed this quarterly report on Form 10-Q of the Company;

2. Based on my knowledge, the quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Company as of, and for, the periods presented in this
quarterly report;

4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
Company and I have:

(a) designed such disclosure controls and procedures to ensure that
material information relating to the Company, including its
consolidated subsidiaries, is made known to me by others within those
entities, particularly during the period in which this quarterly
report is being prepared;

(b) evaluated the effectiveness of the Company's disclosure controls and
procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

(c) presented in this quarterly report my conclusions about the
effectiveness of the disclosure controls and procedures based on my
evaluation as of the Evaluation Date.

5. I have disclosed, based on my most recent evaluation, to the Company's
auditors and the Audit Committee of the Company's Board of Directors (or
persons performing the equivalent function):

(a) all significant deficiencies in the design or operation of the
internal controls which could adversely affect the Company's ability
to record, process, summarize and report financial data and have
identified for the Company's auditors any material weaknesses in
internal controls; and

(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal
controls; and

6. I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect the internal controls subsequent to the date of my
most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.


/s/ Lowell S. Dansker
------------------------
Lowell S. Dansker, President
(Principal Executive and Financial Officer)

August 08, 2003


17