Employment and Workforce - As of December 31, 2025, the company employed approximately 2,126 full-time and 193 part-time employees, with 66% of the management team having over 15 years of tenure [20]. - Approximately 79% of the management team has been with the company for more than 20 years, reflecting strong employee retention [20]. - The company maintains a commitment to a diverse workforce and community involvement, supporting various professional groups and educational institutions [26]. Banking Operations and Market Position - The company operates 166 facilities and 247 ATMs across 75 communities in Texas and Oklahoma, focusing on both commercial and retail banking services [17]. - The company has increased its market share in Texas and Oklahoma through strategic acquisitions, positioning itself as one of the largest independent financial bank holding companies in the state [29]. - The company emphasizes consumer and retail banking, including mortgage lending, and has opened branches in retail locations and shopping malls in recent years [17]. Regulatory Environment - The company is subject to extensive regulation by federal and state laws, which could materially affect its business and financial condition [34]. - The Dodd-Frank Act has introduced significant regulatory changes that may impact the company's capital requirements and operational costs [40]. - The Consumer Financial Protection Bureau (CFPB) is established as the central regulator for consumer financial protection [41]. - Financial institutions with consolidated assets over $10 billion are required to undergo financial stress tests [41]. - The federal deposit insurance limit is made permanent at $250,000, with an increase in cash limits for Securities Investor Protection Corporation protection to $250,000 [41]. - The Gramm-Leach-Bliley Act allows for broader affiliations among banks, securities firms, and insurance companies, enabling a financial holding company structure [53]. - The Foreign Account Tax Compliance Act (FATCA) requires foreign financial institutions to identify U.S. account holders and imposes a 30% withholding tax on non-compliant entities [51]. - The Anti-Money Laundering Act of 2020 mandates financial institutions to maintain a risk-based anti-money laundering program [45]. - The Office of Foreign Assets Control (OFAC) enforces economic sanctions affecting transactions with designated foreign countries and nationals [52]. - The Corporate Transparency Act (CTA) requires certain entities to report beneficial ownership information, effective January 1, 2024 [48]. - The Financial Crimes Enforcement Network (FinCEN) is finalizing regulations related to the AMLA, including risk-based AML and countering the financing of terrorism programs [47]. - The FRB has proposed changes to merchant banking investment regulations, but no final rule has been issued yet [58]. - The CFPB proposed a "Personal Financial Data Rights" rule (PFDR Rule) to enhance consumer access to financial data, with compliance dates potentially extended beyond April 2028 [61]. Financial Performance and Capital Management - The holding company had approximately $1,644,000,000 available for dividend payments from Subsidiary Banks as of December 31, 2025, assuming continued classification as "well capitalized" [70]. - The holding company's leverage ratio was reported at 19.86% as of December 31, 2025, significantly exceeding the minimum requirements [83]. - The FDIC deposit insurance expense for the company totaled $7,151,000 in 2025, reflecting an increase from $6,865,000 in 2024 and $6,285,000 in 2023 [76]. - The Basel III capital framework requires bank holding companies to maintain higher capital levels, emphasizing common equity [87]. - The company is classified as "well capitalized" under applicable regulations, with total risk-based capital ratios meeting or exceeding the required thresholds [85]. - The FDIC's special assessment to recover losses of approximately $16.3 billion from two failed banks will not apply to the company's Subsidiary Banks [79]. - The Dodd-Frank Act mandates that bank holding companies act as a source of strength to their subsidiary banks, requiring them to commit resources even in adverse conditions [71]. - The FRB has not yet issued rules implementing the "source of strength" doctrine as required by the Dodd-Frank Act, as of December 31, 2025 [74]. - The Basel III capital rules require a minimum CET1 capital ratio of 4.5% to risk-weighted assets, plus a capital conservation buffer of at least 2.5%, resulting in a minimum CET1 ratio of 7.0% [95]. - The minimum Tier 1 capital ratio is set at 6.0% to risk-weighted assets, with a capital conservation buffer leading to a minimum Tier 1 ratio of 8.5% [95]. - Total capital must be at least 8.0% to risk-weighted assets, plus the capital conservation buffer, resulting in a minimum total capital ratio of 10.5% [95]. - The Basel III capital rules allow banks to opt out of recognizing most items of Accumulated Other Comprehensive Income (AOCI) in regulatory capital, affecting CET1 calculations [94]. - As of December 31, 2025, all Subsidiary Banks are classified as "well capitalized" based on the required ratios under Basel III [105]. - The Basel III liquidity coverage ratio (LCR) requires banks to measure liquidity against specific tests, aligning with international standards [107]. - The implementation of Basel IV standards began on January 1, 2023, with a five-year transition period expected for full compliance [98]. - The FASB's CECL accounting standard requires expected credit losses to be measured based on historical experience and forecasts, impacting retained earnings upon adoption [111]. Community Reinvestment Act (CRA) and Fair Lending - The 2023 CRA Rule, effective April 1, 2024, primarily impacts "large" banks with assets over $2 billion, increasing data collection and evaluation metrics related to geography and assessment areas [116]. - All Subsidiary Banks received a "Satisfactory" CRA rating in their most recent examinations, with asset thresholds updated as of January 1, 2026 [119]. - Proposed legislation in September 2022 aimed to broaden CRA requirements, including the formation of community advisory committees and increased reporting on borrower demographics, but did not advance [117]. - The CFPB's authority to enforce consumer protection laws may impact compliance costs for Subsidiary Banks, with significant recent developments affecting operations [121]. - The CFPB continues to issue guidance affecting mortgage lending, focusing on consumer protections and mortgage servicing standards [140]. - The CFPB's focus on fair lending and compliance obligations may lead to increased scrutiny and operational costs for financial institutions [123]. - The joint NPR proposing to rescind the 2023 CRA Rule indicates ongoing regulatory changes affecting the banking landscape [116]. Economic and Market Risks - The company operates in a highly competitive industry with substantial competition from national, regional, and community banks, as well as other financial institutions like credit unions and fintechs [158]. - From March 2022 to July 2023, the Federal Reserve increased interest rates a total of eleven times, reaching a range of 5.25% to 5.50%, the highest level in over two decades [170]. - The regulatory landscape for cryptocurrencies and fintech services remains uncertain, which may create additional competitive challenges for traditional banks [162]. - The company’s earnings are subject to interest rate risk, which could adversely affect net interest income and overall financial condition [172]. - The rise of fintech companies and alternative financial providers may lead to a decline in customer acquisition and retention for traditional banking services [163]. - Severe weather, natural disasters, and other external events could significantly impact the company's ability to conduct business and affect its financial stability [182]. - Economic conditions in primary market areas, including Texas and Oklahoma, significantly impact loan delinquencies and demand for products, with potential adverse effects on financial performance [189]. - Recent bank failures have eroded customer confidence in the banking system, potentially leading to decreased deposits and adverse impacts on liquidity and financial performance [194]. - New legislation and regulatory changes in response to banking industry volatility may impose additional oversight and costs, affecting operations and financial condition [197]. - Macroeconomic conditions, including inflation and geopolitical tensions, could negatively impact business operations, loan demand, and overall financial health [201]. Cybersecurity and Risk Management - Cybersecurity is a high-priority component of the company's overall risk-management system, with robust multi-layer security procedures implemented to mitigate cyber risks [205]. - The Information Systems Security Program (ISSP) includes administrative and technical safeguards to protect sensitive information and guard against unauthorized access and evolving security risks [207]. - The company has adopted a Corporate Account Takeover Policy to mitigate risks associated with account takeover crimes, ensuring compliance with regulatory guidance [208]. - A Security Council Committee (SCC) has been formed to oversee cybersecurity policies and infrastructure, reporting to the Service Center Board and ultimately to the Board [210]. - The company conducts annual self-assessments based on the NIST Cybersecurity Framework to evaluate the effectiveness of its cybersecurity policies and procedures [210]. - Regular cybersecurity training is provided to employees to enhance security awareness and compliance with protocols for managing cybersecurity threats [210]. - Multi-factor authentication (MFA) is employed for both retail and commercial customers to enhance security during online banking transactions [210]. - The company engages in security-incident preparedness simulations and disaster recovery tests to strengthen its cybersecurity infrastructure [210]. - Robust encryption and anonymization technologies are utilized to fortify the cybersecurity framework, including an Online Banking Enhanced Security Program [210]. - The company actively monitors network intrusion attempts and scans for vulnerabilities in its infrastructure to ensure timely resolution of security threats [210]. Financial Risks and Asset Management - The company has experienced substantial growth in assets and deposits since 1979, largely attributed to the leadership of its CEO [175]. - The company’s ability to pay dividends is subject to federal and state regulations, which may limit the amount that can be distributed from its Subsidiary Banks [180]. - A significant portion of the loan portfolio is secured by real estate, making it vulnerable to declines in real estate values in target markets [157]. - The allowance for probable loan losses is subject to significant estimates and assumptions regarding current credit risks and future trends, which may lead to material changes [155]. - The company relies on analytical tools and forecasting models for estimating loan losses and measuring fair value, which may prove inadequate during market stress, potentially impacting financial results [187]. - Declining crude oil prices could compress margins for oil producers in key markets, adversely affecting the company's financial condition and results of operations [188]. - The company is subject to claims and litigation related to intellectual property, which could result in significant costs and operational disruptions [192]. - The Dodd-Frank Act may increase the likelihood of lawsuits against financial institutions, potentially leading to higher legal costs and operational risks [198]. - Legislative and regulatory initiatives may change banking statutes and the operating environment, potentially affecting the company's business and costs [153]. - The company is subject to enforcement actions if insider loans violate applicable restrictions, which could impact financial stability [139]. - The FRB reviews incentive compensation arrangements as part of its examination process, which can affect the organization's ability to make acquisitions [145]. - The SEC has included incentive-based compensation arrangements on its spring 2024 rulemaking agenda, indicating potential future regulatory changes [149]. - The company amended its Compensation Clawback Policy to comply with Nasdaq's listing standards effective October 2, 2023 [151].

Core Viewpoint - International Bancshares Corporation reported an annual net income of approximately $412.3 million for the year 2025 [1] Financial Performance - The reported net income reflects the company's financial performance for the year 2025, indicating a strong profitability position [1]

Financial Performance - International Bancshares Corporation reported net income for the twelve months ended December 31, 2025, with specific figures detailed in the attached news release[5]. Compliance and Regulations - The report was filed on February 26, 2026, indicating timely compliance with SEC regulations[2]. - The financial results and accompanying exhibits are intended to be included under "Item 7.01 – Regulation Fair Disclosure"[6]. Company Information - The company is listed on The Nasdaq Stock Market under the trading symbol IBOC[4]. - The report was signed by Dennis E. Nixon, President and Chief Executive Officer, affirming the authenticity of the financial disclosures[11].

Core Viewpoint - International Bancshares Corporation has declared a cash dividend of $0.73 per share for its shareholders [1] Group 1 - The dividend amount is set at $0.73 per share [1]

Financial Position - As of September 30, 2025, the fair value of residential mortgage-backed securities was $4,845,524,000, while available-for-sale debt securities totaled $4,985,888,000[40]. - The company had $4,993,310,000 in available-for-sale securities as of December 31, 2024, with residential mortgage-backed securities valued at $4,835,176,000[43]. - The total investment securities held by the company as of September 30, 2025, amounted to $4,980,342,000, with residential mortgage-backed securities valued at $4,845,524,000[99]. - The balance in equity securities with readily determinable fair values was $5,546,000 as of September 30, 2025, reflecting an increase from $5,394,000 at December 31, 2024[107]. - The company reported a total of $9.400969 billion in the loan portfolio as of September 30, 2025, compared to $8.809826 billion as of December 31, 2024[89]. Loan Performance - As of September 30, 2025, total loans amounted to $9,400,969,000, an increase from $8,809,826,000 as of December 31, 2024, representing a growth of approximately 6.67%[67]. - The total commercial real estate loans reached $6,261,871,000 as of September 30, 2025, up from $5,722,372,000 as of December 31, 2024, reflecting an increase of approximately 9.4%[71]. - The total balance of loans classified as Watch List—Doubtful is evaluated using the fair value of collateral method, with specific reserves allocated as necessary based on borrower conditions and economic factors[76]. - The total non-accrual loans as of September 30, 2025, amounted to $153,882,000, a decrease from $169,136,000 at December 31, 2024, representing a decline of about 9%[85]. - The total past due loans as of December 31, 2024, were $138.946 million, indicating a significant increase in past due loans year-over-year[89]. Credit Losses and Allowance - The allowance for credit losses (ACL) methodology measures lifetime losses on loan pools with similar risk characteristics, ensuring a conservative approach to risk management[68]. - The allowance for credit losses (ACL) increased from $154,983,000 on June 30, 2025, to $155,506,000 on September 30, 2025, reflecting a net increase of $523,000[81]. - The credit loss expense for the three months ended September 30, 2025, was $1,827,000, compared to $8,602,000 for the same period in 2024, indicating a significant decrease in credit loss expense year-over-year[81]. - The total balance of the allowance for credit losses for domestic loans was $28,656,000 as of September 30, 2025, showing a slight increase from $28,414,000 on June 30, 2025[81]. - The company reported a net recovery of $721,000 credited to the allowance for the three months ended September 30, 2025, compared to a net loss recovery of $1,304,000 for the same period in 2024[81]. Capital Adequacy - The company continues to exceed all capital adequacy requirements under the Basel III capital rules as of September 30, 2025[123]. - CET1 to risk-weighted assets ratio was 23.20% as of September 30, 2025, compared to 22.42% on December 31, 2024[125]. - Tier 1 capital-to-average-total-asset (leverage) ratio was 19.35% as of September 30, 2025, up from 18.84% on December 31, 2024[125]. - Risk-weighted Tier 1 capital ratio stood at 23.80% as of September 30, 2025, compared to 23.06% on December 31, 2024[125]. - Total capital ratio was 24.99% as of September 30, 2025, compared to 24.31% on December 31, 2024[125]. Stock-Based Compensation - Stock-based compensation expense for the three months ended September 30, 2025, was $20,000, compared to $47,000 for the same period in 2024[94]. - As of September 30, 2025, there were 170,835 options outstanding with a weighted average exercise price of $35.46[94]. - The total unrecognized stock-based compensation cost related to non-vested options was approximately $132,000, expected to be recognized over a weighted average period of 1.25 years[94]. - A total of 434,529 Stock Appreciation Rights (SARs) had been issued under the SAR Plan as of September 30, 2025[95]. - The total expense recorded in connection with all grants under the SAR Plan for the nine months ended September 30, 2025, was $2,020,000, a decrease from $2,271,000 for the same period in 2024[97]. Economic Environment - The economic environment has posed challenges for borrowers, with increasing capitalization rates and elevated office vacancies contributing to the risk in large loans[77]. - Management's evaluation of the ACL considers various qualitative factors, including trends in portfolio volume, classified loans, and economic conditions, which could impact future credit loss estimates[79]. - The company has implemented a large loan operational risk factor in its ACL calculation starting Q2 2023, acknowledging the heightened risk of default associated with large loans in the current economic environment[77]. - The company did not provide any modifications to borrowers experiencing financial difficulties for the nine months ended September 30, 2025[85]. - The past due loans in the commercial real estate sector increased due to two loans secured by commercial properties placed on non-accrual status in Q4 2024[89].

Financial Performance - International Bancshares Corporation reported net income for the three and nine months ended September 30, 2025, with specific figures detailed in the attached news release[5]. Compliance and Reporting - The report was filed on November 6, 2025, indicating timely compliance with SEC regulations[2]. Stock Information - The company is listed on The Nasdaq Stock Market under the trading symbol IBOC[4].

Core Insights - International Bancshares Corporation (IBC) reported strong earnings for Q3 2025, with net income of $108.4 million, representing an 8.8% increase in diluted earnings per share compared to Q3 2024 [1][2] - For the first nine months of 2025, net income was $305.4 million, a 3.8% increase from the same period in 2024 [1][2] - The company continues to focus on customer service and efficient management practices, including the implementation of AI initiatives to enhance operational efficiency [3] Financial Performance - Q3 2025 net income: $108.4 million or $1.74 diluted earnings per share, compared to $99.8 million or $1.60 diluted earnings per share in Q3 2024 [1] - Nine-month net income for 2025: $305.4 million or $4.91 diluted earnings per share, compared to $294.1 million or $4.72 diluted earnings per share in the same period of 2024 [1] - Interest income from investment and loan portfolios positively impacted net income, while interest expense increased due to higher rates on deposits [2] Asset and Loan Growth - Total assets as of September 30, 2025, were approximately $16.6 billion, up from $15.7 billion at the end of 2024 [4] - Total net loans reached approximately $9.2 billion as of September 30, 2025, compared to $8.7 billion at the end of 2024 [4] - Deposits increased to approximately $12.5 billion as of September 30, 2025, from approximately $12.1 billion at the end of 2024 [4] Company Overview - IBC is a multi-bank financial holding company headquartered in Laredo, Texas, operating 166 facilities and 255 ATMs across 75 communities in Texas and Oklahoma [5]

Financial Position - As of June 30, 2025, the fair value of residential mortgage-backed securities was $4,869,078,000, while available-for-sale securities totaled $5,015,326,000[38]. - The fair value of doubtful loans classified as Watch List was $25,064,000 as of June 30, 2025, with a net provision during the period of $2,378,000[42]. - The company reported $158,263,000 of doubtful commercial collateral-dependent loans as of June 30, 2025, compared to approximately $168,621,000 as of December 31, 2024[45]. - The company’s available-for-sale securities included residential mortgage-backed securities valued at $4,835,176,000 as of December 31, 2024[38]. - Total loans increased to $9,138,620,000 as of June 30, 2025, up from $8,809,826,000 at December 31, 2024, representing a growth of 3.73%[63]. - The carrying amount of fixed-rate performing loans was $1,258,953,000 as of June 30, 2025, with an estimated fair value of $1,183,192,000[54]. - The carrying amount of time deposits was $3,015,589,000 as of June 30, 2025, with an estimated fair value of $3,014,207,000[56]. - The fair value of deposits with no stated maturity was equal to the amount payable on demand as of June 30, 2025[56]. - The fair value of fixed-rate long-term FHLB borrowings was estimated at $10,437,000 as of June 30, 2025, unchanged from December 31, 2024[59]. - The carrying amount of accrued interest approximated fair value as of June 30, 2025[55]. Risk Management - The company’s risk management practices include monitoring borrower relationships and loan performance regularly to identify potential repayment issues[67]. - The current economic environment has led to increased risks for borrowers, including rising capitalization rates and significant increases in interest rates, impacting large loans[74]. - The large loan operational risk factor was introduced in Q2 2023, acknowledging the heightened risk of default associated with larger loans[72]. - The analysis of specific reserves for doubtful loans considers various factors, including the borrower's ability to pay and economic conditions affecting their industry[71]. Allowance for Credit Losses - The allowance for credit losses (ACL) recorded charges of $2,228,000 for the twelve months ended December 31, 2024, related to loans transferred to other real estate owned[46]. - The allowance for credit losses (ACL) for the three months ended June 30, 2025, was $154,983,000, down from $158,707,000 at the end of the previous quarter[77]. - Losses charged to the allowance during this period totaled $9,978,000, while recoveries credited to the allowance were $1,856,000, resulting in a net loss recovery of $8,122,000[77]. - The credit loss expense for the three months ended June 30, 2025, was $4,398,000, reflecting the ongoing economic challenges faced by borrowers[77]. - The management's evaluation of the ACL incorporates qualitative factors such as trends in portfolio volume, classified loans, and economic conditions, which are critical in determining future credit loss expenses[76]. - The methodology for estimating the ACL includes a two-year reasonable and supportable forecast period, reverting to the average lifetime loss-rate thereafter[76]. - The balance of the ACL for domestic commercial loans as of June 30, 2025, was $28,414,000, while foreign commercial loans stood at $54,065,000[77]. - The company has opted not to measure an ACL for accrued interest receivable, relying on timely identification and write-off of uncollectible amounts[75]. - The total balance of loans evaluated for impairment was $158,832,000 for individually evaluated loans and $8,979,788,000 for collectively evaluated loans, with total allowances of $12,888,000 and $142,095,000 respectively[80]. - The credit loss expense for the six months ended June 30, 2025 was $7,727,000, compared to a credit loss expense of $21,749,000 for the same period in 2024, indicating a significant decrease[79]. - The total non-accrual loans as of June 30, 2025 amounted to $158,746,000, with $80,721,000 classified as having no credit allowance[81]. - The allowance for credit losses (ACL) at June 30, 2025 was deemed adequate to absorb probable losses from loans in the portfolio, reflecting management's judgment on loss exposure[83]. Loan Performance - The total past due loans as of June 30, 2025 amounted to $119,879,000, an increase from $138,946,000 on December 31, 2024, indicating a rise in loan delinquencies[85]. - The commercial real estate: multifamily loans past due 30-59 days increased due to a loan secured by a multifamily affordable housing community[85]. - The total portfolio for past due loans increased from $8,670,880,000 on December 31, 2024, to $9,018,741,000 on June 30, 2025[85]. - The total past due loans in the commercial sector rose from $56,226,000 in December 2024 to $55,730,000 in June 2025[85]. - The residential first lien loans past due increased to $11,792,000 as of June 30, 2025, compared to $9,731,000 on December 31, 2024[85]. - The commercial loans past due 90 days or more increased due to two loans secured by commercial properties placed on non-accrual in Q4 2024[85]. - The total past due loans in the foreign sector decreased slightly from $3,147,000 in December 2024 to $3,857,000 in June 2025[85]. - The commercial real estate: farmland & commercial loans past due 90 days or greater increased to $27,615,000 as of June 30, 2025, from $27,637,000 in December 2024[85]. - The consumer loans past due increased to $315,000 as of June 30, 2025, compared to $170,000 on December 31, 2024[85]. - The decrease in commercial real estate: multifamily loans past due 90 days or greater was attributed to two loans that were brought current during the non-accrual period[85]. Capital and Regulatory Compliance - As of June 30, 2025, the CET1 to risk-weighted assets ratio was 23.23%, compared to 22.42% on December 31, 2024[123]. - The Tier 1 capital-to-average-total-assets (leverage) ratio was 19.51% on June 30, 2025, up from 18.84% on December 31, 2024[123]. - The risk-weighted total capital ratio was 25.06% as of June 30, 2025, compared to 24.31% on December 31, 2024[123]. - The company opted out of including most components of accumulated other comprehensive income (loss) in the CET1 capital calculation[123]. - The company and its Subsidiary Banks are subject to regulatory capital requirements administered by the Federal Reserve and FDIC[125]. - As of June 30, 2025, the company believes it meets all capital adequacy requirements[125]. - The implementation of Basel IV is targeted to begin on July 1, 2025, with full compliance expected by July 1, 2028[120]. - The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 allows banks with assets under $10 billion to be exempt from risk-based capital requirements[122]. - The company recognized the capital impact of adopting CECL accounting standards on January 1, 2020, leading to an increase in the allowance for probable loan losses[119]. Stock and Dividends - Cash dividends paid per share were $0.70 on February 28, 2025, compared to $0.66 on February 28, 2024[113]. - The stock repurchase program was extended to allow for the purchase of up to $150 million of common stock during the 12-month period starting March 15, 2025[114]. - As of August 4, 2025, a total of 13,795,319 shares had been repurchased at a cost of $419,939,000[114]. Investment Securities - The total investment securities at June 30, 2025, included available-for-sale debt securities with an amortized cost of $5,397,669,000 and an estimated fair value of $5,009,843,000[95]. - Proceeds from the sales and calls of available-for-sale debt securities were $4,235,000 for the six months ended June 30, 2025, with no gross gains or losses realized[100]. - The company evaluated debt securities classified as available-for-sale and held-to-maturity and determined no unrealized losses were attributable to credit-related reasons[94]. - The amortized cost of available-for-sale debt investment securities pledged for fiduciary powers was $1,720,908,000 at June 30, 2025[99]. - As of June 30, 2025, gross unrealized losses on debt investment securities totaled $413,023,000, with $401,353,000 attributed to residential mortgage-backed securities[102]. - At December 31, 2024, gross unrealized losses on debt investment securities were $493,583,000, with $489,170,000 from residential mortgage-backed securities[102]. - Equity securities with readily determinable fair values were valued at $5,483,000 as of June 30, 2025, compared to $5,394,000 at December 31, 2024[102]. - For the six months ended June 30, 2025, net gains recognized on equity securities amounted to $89,000, while net losses for the same period in 2024 were $80,000[104]. - Investments in low-income housing tax credit (LIHTC) projects totaled $192,616,000 at June 30, 2025, with unfunded commitments of $32,504,000[105].

Financial Results - International Bancshares Corporation reported net income for the three and six months ended June 30, 2025, with specific figures detailed in the attached news release[5]. - The news release announcing the financial results was dated August 7, 2025, and is filed as Exhibit 99[8]. Regulatory Information - The financial results are intended to be included under "Item 7.01 – Regulation Fair Disclosure" and are not subject to the liabilities of Section 18 of the Securities Exchange Act of 1934[6].

Fair Value and Securities - As of March 31, 2025, the fair value of residential mortgage-backed securities was $4,874,583,000, while the total available-for-sale securities amounted to $5,025,486,000[34]. - The fair value of doubtful commercial collateral-dependent loans was $164,472,000 as of March 31, 2025, compared to $168,621,000 as of December 31, 2024[39]. - The total fair value of available-for-sale securities as of December 31, 2024, was $4,993,310,000, with residential mortgage-backed securities valued at $4,835,176,000[34]. - The company had no transfers between levels of the fair value hierarchy during the three months ended March 31, 2025[36]. - The company’s fair value measurements are classified within Level 1 or 2 of the valuation hierarchy, with equity securities having readily determinable fair values classified within Level 1[34]. - The total fair value of doubtful loans on the watch list was $167,987,000 as of March 31, 2025[36]. - The fair value of fixed-rate long-term FHLB borrowings remained stable at $10,489,000 as of March 31, 2025, unchanged from December 31, 2024[52]. - The fair value of accrued interest approximates the carrying amounts, indicating stability in interest income recognition[48]. - The fair value of variable rate performing loans approximates their carrying amount, reflecting market alignment[47]. - The fair value of securities sold under repurchase agreements approximated their carrying amounts, indicating short-term stability[50]. - As of March 31, 2025, the total investment securities amounted to $5,020,025,000, with available-for-sale debt securities showing unrealized losses of $447,029,000[87]. - Residential mortgage-backed securities held as available-for-sale totaled $5,294,142,000, with an estimated fair value of $4,874,583,000, reflecting a significant unrealized loss of $439,216,000[87]. - The fair value of available-for-sale debt investment securities pledged for fiduciary powers was $1,630,062,000 as of March 31, 2025[93]. - The company evaluated its debt securities and determined that no unrealized losses were due to credit-related reasons, maintaining a strong position in its investment portfolio[86]. Allowance for Credit Losses (ACL) - For the three months ended March 31, 2025, the company recorded $46,000 in charges to the allowance for credit losses (ACL) related to loans transferred to other real estate owned[40]. - The allowance for credit losses (ACL) methodology is based on lifetime loss estimates for loan pools with similar risk characteristics, ensuring conservative risk management practices[58]. - The allowance for credit losses (ACL) at March 31, 2025, is $158.707 million, a decrease from $156.537 million at December 31, 2024[70]. - Losses charged to the ACL for the three months ended March 31, 2024, included a charge-down of approximately $25.6 million due to a loan in the oil and gas sector[71]. - The total recorded investment for loans individually evaluated for impairment as of March 31, 2025, is $165.078 million, while the allowance for these loans is $18.632 million[72]. - The total recorded investment for loans collectively evaluated for impairment as of March 31, 2025, is $8.915 billion, with an allowance of $140.075 million[72]. - The company has added an operational risk factor for large loans to the ACL calculation starting in Q2 2023 due to increased default risk in the current economic environment[67]. - The current economic environment has led to challenges for borrowers, including rising capitalization rates and significant increases in interest rates, contributing to elevated risks in large loans[67]. - The methodology for estimating the ACL includes both quantitative historical loss percentages and qualitative current conditions, reverting to average lifetime loss rates beyond a two-year forecast period[69]. - The company has not measured an ACL for accrued interest receivable, relying on timely identification and write-off of uncollectible interest[68]. - The total credit loss expense for the three months ended March 31, 2025, is $3.329 million[70]. - The company expects to recover a portion of the $25.6 million charge-down through repayment from the guarantor via arbitration[71]. - As of March 31, 2025, total non-accrual loans amounted to $165,022,000, with a non-accrual credit allowance of $77,951,000[73]. - The total past due loans as of March 31, 2025, reached $110,103,000, with $8,970,117,000 in current loans, resulting in a total portfolio of $9,080,220,000[77]. - The commercial loans past due 90 days or more increased to $47,039,000, attributed to two loans secured by commercial properties placed on non-accrual in Q4 2024[77]. - The allowance for credit losses (ACL) as of March 31, 2025, was deemed adequate by management to absorb probable losses from the loan portfolio[75]. - No modifications were provided to borrowers experiencing financial difficulties for the three months ended March 31, 2025[73]. - The total past due loans as of December 31, 2024, were $138,946,000, with a current loan portfolio of $8,670,880,000[77]. - The commercial real estate: multifamily loans past due 90 days or greater decreased, primarily due to two loans being brought current during the non-accrual period[77]. - The total non-accrual loans as of December 31, 2024, were $169,136,000, with a non-accrual credit allowance of $76,313,000[73]. - The company considers commercial and industrial or real estate loans as a loss when exposure beyond collateral coverage is apparent[74]. - Unsecured consumer loans are charged-off when they are 90 days past due[74]. Loan Portfolio and Performance - As of March 31, 2025, the total loans amounted to $9,080,220,000, an increase of 3.1% from $8,809,826,000 on December 31, 2024[57]. - The carrying amount of fixed-rate performing loans was $1,257,044,000 as of March 31, 2025, compared to $1,216,156,000 as of December 31, 2024, reflecting a growth of 3.4%[47]. - The estimated fair value of time deposits was $2,943,387,000 on March 31, 2025, slightly up from $2,895,245,000 on December 31, 2024, indicating an increase of 1.7%[49]. - The total commercial real estate loans reached $5,963,802,000 as of March 31, 2025, up from $5,722,372,000 on December 31, 2024, representing a growth of 4.2%[61]. - As of March 31, 2025, the total loan balance is $9,080,220,000, showing an increase from $8,842,073,000 in the prior year[79]. - The commercial loan segment has a total balance of $1,874,670,000, down from $1,812,481,000 in 2024, indicating a decrease of approximately 1.2%[79]. - The commercial real estate loans, specifically in farmland and commercial, have a total balance of $3,077,306,000, a decrease from $3,077,306,000 in 2024[79]. - The residential first lien loans show a total balance of $543,053,000, slightly increasing from $542,376,000 in the previous year[79]. - The consumer loan segment has a total balance of $52,111,000, which remains unchanged from the previous year[79]. - Current-period gross write-offs for commercial loans amount to $1,788,000, while residential first lien write-offs are $46,000[79]. - The foreign loan segment has a total balance of $187,160,000, reflecting a decrease from $187,160,000 in the prior year[79]. - The watch list for commercial loans includes $11,113,000 classified as pass, indicating no change from the previous year[79]. - The total balance for residential junior lien loans is $478,543,000, which is consistent with the previous year's figure[79]. - The overall loan portfolio reflects a diverse range of credit quality indicators across various loan classes[79]. - Total commercial loans increased to $1,851,803,000 in 2024, up from $1,786,716,000 in 2023, representing a growth of approximately 3.6%[80]. - The total balance for commercial real estate: farmland & commercial reached $2,927,803,000 in 2024, compared to $2,755,715,000 in 2023, indicating an increase of about 6.2%[80]. Stock and Capital Management - The company reported a stock-based compensation expense of $45,000 for the three months ended March 31, 2025, down from $74,000 in the same period of 2024, reflecting a decrease of approximately 39.2%[82]. - As of March 31, 2025, there were 201,824 stock options outstanding with a weighted average exercise price of $35.11[82]. - The total number of stock appreciation rights (SARs) outstanding as of March 31, 2025, was 452,127, with an average exercise price of $39.61[84]. - The fair value of the liability for payments due to SAR holders was approximately $4,924,000 as of March 31, 2025, compared to $4,540,000 at December 31, 2024[85]. - The company experienced a decrease in Watch List – Substandard Commercial real estate: farmland & commercial loans due to the upgrade of two loans to Special Review[80]. - The total unrecognized stock-based compensation cost related to non-vested options was approximately $173,000 as of March 31, 2025[82]. - The expense recorded in connection with all grants under the SAR Plan totaled $388,000 for the three months ended March 31, 2025, compared to $1,080,000 for the same period in 2024[85]. - The company has the right to defer interest payments on Debentures for up to 20 consecutive quarterly periods[99]. - The interest rates on Capital and Common Securities transitioned to the Three-Month CME Term SOFR with a spread adjustment of 26 basis points as of July 1, 2023[101]. - The company believes it meets all fully phased-in capital adequacy requirements as of March 31, 2025[107]. - The company paid cash dividends of $0.70 per share on February 28, 2025, up from $0.66 per share on February 28, 2024[102]. - The Board authorized a stock repurchase program of up to $150 million for the 12-month period starting March 15, 2025[103]. - A total of 13,793,396 shares had been repurchased at a cost of $419,819,000 as of May 1, 2025[103]. - As of March 31, 2025, the total of $108,868,000 of Capital and Common Securities outstanding qualified as Tier 1 capital[100]. - The CET1 to risk-weighted assets ratio was 22.41% on March 31, 2025, compared to 22.42% on December 31, 2024[113]. - The Tier 1 capital-to-average-total-asset (leverage) ratio was 18.91% as of March 31, 2025[113]. - The risk-weighted Tier 1 capital ratio was 23.03% on March 31, 2025, slightly down from 23.06% on December 31, 2024[113]. Borrowing and Debt Management - Other borrowed funds increased to $30,489,000 as of March 31, 2025, compared to $10,541,000 at December 31, 2024, indicating a substantial rise in borrowing[97]. - The company reported no allowances for debt securities in the allowance for credit losses (ACL) for the period, as no unrealized losses were attributed to credit-related reasons[86]. - The amortized cost of investments in low-income housing tax credit (LIHTC) projects was $187,040,000 as of March 31, 2025, with unfunded commitments totaling $23,772,000[96]. - The principal amount of junior subordinated debentures outstanding remained stable at $108,868,000 as of March 31, 2025, consistent with the previous reporting period[98]. - The company recognized net gains of $67,000 on equity securities during the three months ended March 31, 2025, compared to net losses of $57,000 in the same period of the previous year[96]. - Proceeds from the sales and calls of available-for-sale debt securities were $3,505,000 for the three months ended March 31, 2025, with no gross gains or losses realized[94].