INTERVEST BANCSHARES CORP

Intervest Bancshares Corporation (“IBC”) is the parent company of Intervest National Bank (“INB”). References in this report to “we,” “us” and “our” refer to these entities on a consolidated basis, unless otherwise specified. We are 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, including without limitation statements contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of this report, that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties. Words such as “may,” “will,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “project,” “assume,” “indicate,” “continue,” “target,” “goal,” “objective,” and similar words or expressions of the future are intended to identify forward-looking statements. Except for historical information, the matters discussed herein are subject to certain risks and uncertainties that may adversely affect our business, financial condition and results of operations.

The following factors, among others, could cause actual results to differ materially from those set forth in forward looking statements: changes in economic conditions and real estate values both nationally and in our market areas; changes in our volume of loan originations, deposit flows and borrowing facilities; changes in the levels of our non-interest income and provisions for loan and real estate losses; changes in the composition and credit quality of our loan portfolio; legislative or regulatory changes, including increased expenses arising therefrom; changes in interest rates which may reduce our net interest margin and net interest income; increases in competition; technological changes which we may not be able to implement; changes in accounting or regulatory principles, policies or guidelines; changes in tax laws and our ability to utilize our deferred tax asset, including NOL carry forwards; our ability to attract and retain key members of management; our ability to consummate the proposed merger with Bank of the Ozarks, Inc. (“Ozarks”); our and Ozarks’ ability to satisfy the conditions to the completion of the proposed merger, including the receipt of approval of our stockholders and the receipt of requisite regulatory approvals in a timely manner and without burdensome conditions; our and Ozarks’ ability to meet expectations regarding the timing, completion and accounting and tax treatments of the merger; the impact of the proposed merger on our business operations pending consummation or termination thereof; and the outcome of any legal proceedings that have been, or may be, instituted against us and others relating to the proposed merger, the merger agreement or the transactions contemplated thereby.

On August 7, 2014, a putative class action complaint, captioned GreenTech Research LLC v. Callen, et al. (the “Greentech Action”), was filed in the Supreme Court of the State of New York for New York County, by an entity purporting to be a stockholder of Intervest. On August 19, 2014, a putative class action complaint, captioned Sonnenberg v. Intervest Bancshares Corp., et al., was filed in the Supreme Court of the State of New York for New York County, by an entity purporting to be a stockholder of IBC (also referred to as Intervest). Each of the complaints alleges that the directors of Intervest breached their fiduciary duties to Intervest’s stockholders in connection with the merger by approving a transaction pursuant to an allegedly inadequate process that undervalues Intervest and includes preclusive deal protection provisions; and that Intervest and Ozarks allegedly aided and abetted the Intervest directors in breaching their duties to Intervest’s stockholders. The complaints seek court certification of the respective plaintiffs as class representatives and that such proceedings may proceed as stockholder class actions, and various remedies, including enjoining the merger from being consummated in accordance with its agreed-upon terms, rescission or an award of rescissory damages in the event that the merger is consummated, an accounting by the defendants to the plaintiff class for all damages caused by the defendants, recovery of plaintiffs’ costs and attorneys’ and experts’ fees relating to the lawsuit, and such further relief as the court deems just and proper. The individual plaintiffs and the defendants have stipulated to the court that the two actions, as well as any further actions brought in the same court, should be consolidated for further proceedings in the same court in order to minimize expense and promote a more efficient proceeding. On October 14, 2014, the plaintiff in the Greentech Action filed an amended complaint alleging, among other things, inadequacy of the disclosures contained in the proxy statement/prospectus included in the Registration Statement on Form S-4 filed by Ozarks on September 29, 2014. The defendants named in these lawsuits, including Intervest, deny the allegations in the complaints and intend to vigorously defend against these lawsuits. No liability or reserve has been recognized in our consolidated balance sheet at September 30, 2014 with respect to the above matters.

During Q3-14, INB’s entire portfolio of securities held to maturity (HTM) was transferred to the available-for-sale category in order to provide additional flexibility in executing INB’s asset and liability management strategies. During Q3-14, proceeds from periodic sales of AFS securities totaled $37 million. The sales enhanced INB’s liquidity to fund new loans and planned deposit outflow. INB’s current strategy is to re-deploy low-yielding investments into loans or use the proceeds from sales, calls and maturities to fund planned deposit outflow. In Q3-14, INB significantly reduced its interest rates offered on longer-terms CDs from a high of 1.92% to 1.24% on its five-year CD term and most recently to 1.16% in October. INB expects these to result in additional deposit outflow for the rest of 2014. INB has historically targeted its loan-to-deposit ratio in a range from 75% to 85%. In Q3-14, INB increased this target to 95%. This ratio stood at 92% as of September 30, 2014. During October 2014, additional sales of securities were made totaling $77 million to take advantage of the bond rally that occurred in mid-October. These sales increased INB’s cash on hand to approximately $90 million at October 31, 2014 for use in funding planned deposit outflow and new loans.

On August 7, 2014, a putative class action complaint, captioned GreenTech Research LLC v. Callen, et al. (the “Greentech Action”), was filed in the Supreme Court of the State of New York for New York County, by an entity purporting to be a stockholder of Intervest. On August 19, 2014, a putative class action complaint, captioned Sonnenberg v. Intervest Bancshares Corp., et al., was filed in the Supreme Court of the State of New York for New York County, by an entity purporting to be a stockholder of IBC (also referred to as Intervest). Each of the complaints alleges that the directors of Intervest breached their fiduciary duties to Intervest’s stockholders in connection with the merger by approving a transaction pursuant to an allegedly inadequate process that undervalues Intervest and includes preclusive deal protection provisions; and that Intervest and Ozarks allegedly aided and abetted the Intervest directors in breaching their duties to Intervest’s stockholders. The complaints seek court certification of the respective plaintiffs as class representatives and that such proceedings may proceed as stockholder class actions, and various remedies, including enjoining the merger from being consummated in accordance with its agreed-upon terms, rescission or an award of rescissory damages in the event that the merger is consummated, an accounting by the defendants to the plaintiff class for all damages caused by the defendants, recovery of plaintiffs’ costs and attorneys’ and experts’ fees relating to the lawsuit, and such further relief as the court deems just and proper. The individual plaintiffs and the defendants have stipulated to the court that the two actions, as well as any further actions brought in the same court, should be consolidated for further proceedings in the same court in order to minimize expense and promote a more efficient proceeding. On October 14, 2014, the plaintiff in the Greentech Action filed an amended complaint alleging, among other things, inadequacy of the disclosures contained in the proxy statement/prospectus included in the Registration Statement on Form S-4 filed by Ozarks on September 29, 2014. The defendants named in these lawsuits, including Intervest, deny the allegations in the complaints and intend to vigorously defend against these lawsuits.

Furthermore, the parties may mutually decide to terminate the Agreement at any time, before or after approval by the stockholders of IBC, or the parties may elect to terminate the Agreement in certain other circumstances. If the Agreement is terminated, our business may be adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management and the board of directors on the merger. In addition, if the Agreement is terminated, the market price of our common stock might decline. If the Merger Agreement is terminated and our board of directors seeks another merger or business combination, we may not be certain that we will be able to find a party willing to offer equivalent or more attractive consideration than the consideration we anticipate will be paid to IBC stockholders in connection the the proposed merger with Ozarks. If the Merger Agreement is terminated under certain circumstances, we may be required to pay a termination fee of $7.9 million to Ozarks or liquidated damages of $1.75 million. Ozarks is not required to pay us any fees if the Merger Agreement is terminated.