Financial Performance - International Bancshares Corporation reported net income for the three months ended March 31, 2025, details of which are included in the news release dated May 5, 2025[5] - The financial results and additional information are intended to comply with 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 CEO, on May 5, 2025[13]

Part I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) International Bancshares Corporation is a multibank financial holding company providing diverse commercial and retail banking services across Texas and Oklahoma, operating in a highly regulated and competitive environment - International Bancshares Corporation is a registered **multibank financial holding company** with five wholly-owned subsidiary banks, providing commercial and retail banking services across Texas and Oklahoma[12](index=12&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk) - The company operates in north, south, central, and southeast Texas, and Oklahoma, with **166 facilities** and **255 ATMs** serving **75 communities**[12](index=12&type=chunk)[18](index=18&type=chunk) - As of December 31, 2024, the company employed approximately **2,103 full-time** and **233 part-time persons**, with **66% of its 300-person officer management team** having over **15 years of tenure**[21](index=21&type=chunk) - The workforce is diverse, with approximately **75% identifying as Latino or Hispanic** and **65% as women** as of December 31, 2024[27](index=27&type=chunk) Deposits from Persons and Entities Domiciled in Mexico (as % of total deposits) | Year | Percentage of Total Deposits (%) | | :--- | :------------------------------- | | 2024 | 31 | | 2023 | 29 | | 2022 | 28 | FDIC Deposit Insurance Expense | Year | Expense (in millions USD) | | :--- | :------------------------ | | 2024 | 6.865 | | 2023 | 6.285 | | 2022 | 6.987 | - As of December 31, 2024, the company's leverage ratio was **18.84%**, and all Subsidiary Banks were classified as "**well capitalized**"[86](index=86&type=chunk)[90](index=90&type=chunk) - As of December 31, 2024, approximately **$1.44 billion** was available for dividend payments to the holding company by its Subsidiary Banks, assuming they remain "well capitalized"[76](index=76&type=chunk) - All Subsidiary Banks received a "**Satisfactory**" CRA rating, with two classified as "**intermediate small banks**" and three as "**large banks**" as of January 1, 2025[124](index=124&type=chunk) - The company amended its Compensation Clawback Policy to meet **Nasdaq Rule 5608 standards**, effective October 2, 2023[154](index=154&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) The company faces material risks from loan losses, real estate values, competition, interest rate fluctuations, regulation, cybersecurity, and stock volatility - The company's allowance for probable loan losses is inherently subjective and may be insufficient, potentially decreasing net income and capital[160](index=160&type=chunk) - A significant portion of the loan portfolio is secured by real estate, making it vulnerable to declines in real estate values in its target markets[162](index=162&type=chunk) - The company operates in a highly competitive industry, facing national, regional, and community banks, as well as non-bank entities, fintechs, and alternative financial providers[163](index=163&type=chunk)[166](index=166&type=chunk) - Failure to successfully invest in, adapt to, and integrate **AI technologies** could impair the company's competitive position and negatively impact revenue and profitability[170](index=170&type=chunk) - The company's earnings are subject to interest rate risk, with volatility potentially impacting net interest income and asset/liability valuations[176](index=176&type=chunk)[178](index=178&type=chunk) - The company relies heavily on dividends from its Subsidiary Banks for most of its revenue, which are subject to federal and state regulatory limits[185](index=185&type=chunk) - Negative publicity, diminished depositor confidence, and increased bank-run contagion could negatively impact the company's financial condition, operations, and stock price[201](index=201&type=chunk) - New or increased international tariffs, particularly by the United States on Mexico, could weaken the Mexican economy and negatively impact the company's deposit base and loan demand[206](index=206&type=chunk) - As of December 31, 2024, the company had approximately **$108 million** in junior subordinated debentures outstanding, which are senior to common stock and can impact dividend payments[210](index=210&type=chunk)[212](index=212&type=chunk) [Item 1B. Unresolved Staff Comments](index=64&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC [Item 1C. Cybersecurity](index=64&type=section&id=Item%201C.%20Cybersecurity) The company prioritizes cybersecurity through robust, multi-layer security procedures, an ISSP informed by industry frameworks, and governance involving a CISO and various committees - The company's Information Systems Security Program (ISSP) incorporates provisions from statutory, regulatory guidance, and leading industry frameworks such as the **NIST Cybersecurity Framework**[214](index=214&type=chunk) - Key cybersecurity policies include Enterprise Information Systems Security, Corporate Account Takeover, Vendor Management, Service Center Physical Security, and Security Incident Response[215](index=215&type=chunk)[217](index=217&type=chunk) - The company conducts annual self-assessments using the **Cyber Risk Institute**, regular employee training, security-incident preparedness simulations, and disaster recovery tests[217](index=217&type=chunk) - **Multi-factor authentication (MFA)** protections are implemented for retail, commercial, and treasury customers to enhance online banking security[218](index=218&type=chunk)[220](index=220&type=chunk) - Cybersecurity governance is overseen by a **Security Council Committee (SCC)** and a **Chief Information Security Officer (CISO)** who reports to senior management and the Board[221](index=221&type=chunk)[224](index=224&type=chunk) - An **Incident Response Team (IRT)** is available 24/7 to address cybersecurity incidents, following a structured policy for reporting, analysis, mitigation, and escalation[225](index=225&type=chunk)[230](index=230&type=chunk) [Item 2. Properties](index=73&type=section&id=Item%202.%20Properties) The company's principal offices are in Laredo, Texas, with Subsidiary Banks operating mostly owned facilities across Texas and Oklahoma, all within regulatory investment limits - The company's principal offices are in Laredo, Texas, occupying approximately **147,000 square feet** in owned buildings[233](index=233&type=chunk) - Subsidiary Banks operate facilities in regions including Laredo, San Antonio, Austin, Dallas, Houston, Zapata, Eagle Pass, Rio Grande Valley, Coastal Bend of Texas, and throughout Oklahoma[233](index=233&type=chunk) - Texas state-chartered Subsidiary Banks cannot invest more than their Tier 1 capital in facilities and equipment without prior approval, while Oklahoma state-chartered banks have a similar limit based on Tier 1 and Tier 2 capital; none exceed these limits[234](index=234&type=chunk) [Item 3. Legal Proceedings](index=73&type=section&id=Item%203.%20Legal%20Proceedings) The company and its subsidiaries are involved in various legal proceedings, but management believes any material loss is remote or not material to financial position or results of operations - The company and its subsidiaries are involved in various legal proceedings, but management assesses that any material loss is remote or not material to financial position or results of operations[235](index=235&type=chunk) [Item 4. Mine Safety Disclosures](index=73&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company has no disclosures related to mine safety [Item 4A. Executive Officers of the Registrant](index=74&type=section&id=Item%204A.%20Executive%20Officers%20of%20the%20Registrant) The executive officers of International Bancshares Corporation, including Dennis E. Nixon, Dalia F. Martinez, and Judith I. Wawroski, serve until the 2025 Annual Meeting of Shareholders, with no family relationships and extensive tenure Executive Officers of the Registrant | Name | Age | Position of Office | Officer of the Company Since | | :--------------- | :-- | :------------------------------------------------------------------------------- | :--------------------------- | | Dennis E. Nixon | 82 | Chairman of the Board (since 1992), President (since 1979), CEO and Director of IBC | 1979 | | Dalia F. Martinez| 64 | Vice President (since 2021), Executive Vice President of IBC | 2021 | | Judith I. Wawroski | 50 | Treasurer (since 2017), Principal Financial Officer (since 2017), Executive Vice President of IBC | 2017 | Part II [Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=74&type=section&id=Item%205.%20Market%20for%20the%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section incorporates by reference information regarding the market for the company's common equity, related stockholder matters, and issuer purchases of equity securities from the 2024 Annual Report to Shareholders - Information on common stock, dividends, stock repurchase programs, and equity compensation plans is incorporated by reference from pages 24 and 25 of the 2024 Annual Report to Shareholders[240](index=240&type=chunk) [Item 6. Selected Financial Data](index=74&type=section&id=Item%206.%20Selected%20Financial%20Data) This section incorporates by reference the selected financial data from the 2024 Annual Report to Shareholders - Selected financial data is incorporated by reference from page 1 of the 2024 Annual Report to Shareholders[241](index=241&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=74&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section incorporates by reference the Management's Discussion and Analysis of Financial Condition and Results of Operations from the 2024 Annual Report to Shareholders - Management's Discussion and Analysis of Financial Condition and Results of Operations is incorporated by reference from pages 2 through 24 of the 2024 Annual Report to Shareholders[242](index=242&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures about Market Risk](index=74&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section incorporates by reference quantitative and qualitative disclosures about market risk from the 2024 Annual Report to Shareholders - Quantitative and Qualitative Disclosures about Market Risk are incorporated by reference from pages 15 through 20 of the 2024 Annual Report to Shareholders[243](index=243&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=74&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates by reference the consolidated financial statements and supplementary data, including condensed quarterly income statements, from the 2024 Annual Report to Shareholders - Consolidated financial statements (pages 27-79) and condensed quarterly income statements (pages 80-81) from the 2024 Annual Report to Shareholders are incorporated by reference[244](index=244&type=chunk)[245](index=245&type=chunk) [Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure](index=75&type=section&id=Item%209.%20Changes%20In%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no changes in or disagreements with accountants on accounting and financial disclosure [Item 9A. Controls and Procedures](index=75&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2024, with an unqualified opinion from RSM US LLP - Disclosure controls and procedures were evaluated and deemed **effective** as of December 31, 2024[247](index=247&type=chunk) - Management assessed and maintained **effective internal control over financial reporting** as of December 31, 2024, based on the 2013 COSO framework[249](index=249&type=chunk) - RSM US LLP, the independent registered public accounting firm, issued an **unqualified opinion** on the effectiveness of the company's internal controls over financial reporting as of December 31, 2024[250](index=250&type=chunk)[252](index=252&type=chunk) [Item 9B. Other Information](index=78&type=section&id=Item%209B.%20Other%20Information) No directors or officers adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fourth quarter of 2024 - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers during Q4 2024[259](index=259&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=78&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) The company has no disclosures regarding foreign jurisdictions that prevent inspections Part III [Item 10. Directors, Executive Officers, and Corporate Governance](index=78&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) This section incorporates information on directors, executive officers, and corporate governance from the 2025 proxy statement and Item 4A, including the company's policy on securities trades - Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 Annual Meeting of Shareholders proxy statement and Item 4A of this report[262](index=262&type=chunk) - The company has a Statement of Company Policy on Securities Trades by Directors, Officers and Employees to promote compliance with insider trading laws[262](index=262&type=chunk) [Item 11. Executive Compensation](index=78&type=section&id=Item%2011.%20Executive%20Compensation) This section incorporates by reference information on executive compensation and compensation committee interlocks and insider participation from the definitive proxy statement for the 2025 Annual Meeting of Shareholders - Information on executive compensation and compensation committee interlocks is incorporated by reference from the 2025 Annual Meeting of Shareholders proxy statement[263](index=263&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=78&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section incorporates by reference information on security ownership of certain beneficial owners and management, as well as equity compensation plan information, from the definitive proxy statement for the 2025 Annual Meeting of Shareholders - Information on principal shareholders, security ownership of management, and equity compensation plan information is incorporated by reference from the 2025 Annual Meeting of Shareholders proxy statement[263](index=263&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=78&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section incorporates by reference information on interests of management in certain transactions and director independence from the definitive proxy statement for the 2025 Annual Meeting of Shareholders - Information on management's interests in certain transactions and director independence is incorporated by reference from the 2025 Annual Meeting of Shareholders proxy statement[264](index=264&type=chunk) [Item 14. Principal Accountant Fees and Services](index=78&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This section incorporates by reference information on principal accountant fees and services from the definitive proxy statement for the 2025 Annual Meeting of Shareholders - Information on principal accountant fees and services is incorporated by reference from the 2025 Annual Meeting of Shareholders proxy statement[264](index=264&type=chunk) Part IV [Item 15. Exhibits, Financial Statement Schedules](index=80&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists documents incorporated into the report, including consolidated financial statements from the 2024 Annual Report and various exhibits such as corporate documents, compensation plans, and certifications - Consolidated financial statements for the years ended December 31, 2024, 2023, and 2022, including Statements of Condition, Income, Comprehensive Income, Shareholders' Equity, and Cash Flows, are incorporated by reference from the 2024 Annual Report to Shareholders[266](index=266&type=chunk)[267](index=267&type=chunk) - The report includes various exhibits such as Articles of Incorporation, By-Laws, stock option plans, incentive compensation plans, the 2024 Annual Report, Statement of Company Policy on Securities Trades, List of Subsidiaries, Consent of Independent Registered Public Accounting Firm, Sarbanes-Oxley Act certifications (Sections 302 and 906), and the Compensation Clawback Policy[268](index=268&type=chunk)[271](index=271&type=chunk) [Item 16. Form 10-K Summary](index=82&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company did not provide a Form 10-K Summary in this report

Financial Performance - International Bancshares Corporation reported net income for the three months ended December 31, 2024, with specific figures detailed in the attached news release[5] - The financial results for the twelve months ended December 31, 2024, were also announced, highlighting overall performance trends[5] Company Classification - The company is not classified as an emerging growth company, indicating a stable operational status[4] Documentation - The news release is filed as Exhibit 99, providing comprehensive financial data and insights[10] - The report was signed by Dennis E. Nixon, President and CEO, affirming the authenticity of the financial disclosures[14]

Fair Value Measurements - As of September 30, 2024, the fair value of residential mortgage-backed securities was $4,855,607,000, while states and political subdivisions amounted to $156,976,000[28]. - The total assets measured at fair value on a recurring basis as of December 31, 2023, were $4,827,758,000, with residential mortgage-backed securities at $4,660,099,000[29]. - The fair value of available-for-sale securities as of December 31, 2023, was $4,827,758,000, with equity securities valued at $5,417,000[29]. - The company’s fair value measurements for investment securities are based on independent pricing services, considering various observable data[38]. - The carrying amounts of cash and cash equivalents approximate fair value, reflecting the short-term nature of these instruments[37]. - The estimated fair value of fixed-rate long-term FHLB borrowings remained stable at $10,593,000 as of September 30, 2024, unchanged from December 31, 2023[44]. - The fair value of time deposits was estimated at $2,797,797,000 as of September 30, 2024, compared to $2,428,681,000 on December 31, 2023, indicating a fair value increase of approximately 15.2%[42]. - The fair value of fixed-rate performing loans was estimated at $1,112,046,000 as of September 30, 2024, compared to $1,073,892,000 on December 31, 2023, showing an increase of approximately 3.6%[40]. - The estimated fair value of equity securities with readily determinable fair values was $5,538,000 at September 30, 2024, compared to $5,417,000 at December 31, 2023[97]. Loan and Credit Losses - The company reported $55,479,000 in doubtful loans as of September 30, 2024, with a net provision during the period of $10,985,000[31]. - Other real estate owned was valued at $2,627,000 as of September 30, 2024, with a net provision of $371,000 during the same period[31]. - The company had approximately $99,835,000 in doubtful commercial collateral-dependent loans as of September 30, 2024[35]. - The allowance for credit losses (ACL) methodology incorporates qualitative factors such as trends in portfolio volume and economic conditions, which could affect future credit loss expenses[60]. - As of September 30, 2024, the total allowance for credit loan losses is $156,099, an increase from $148,609 at June 30, 2024, reflecting a rise in commercial loan losses[62]. - The credit loss expense for the nine months ended September 30, 2024, is $30,351, which is an increase of approximately $4.3 million compared to the same period in 2023[65]. - The charge-down on a loan secured by equipment in the oil and gas industry resulted in a loss of approximately $25.6 million, impacting the provision for credit loss expense[65]. - The total recorded investment for loans evaluated for impairment as of September 30, 2024, is $100,575, with an impairment of $11,385[67]. - The allowance for credit loan losses in the commercial category increased due to a charge-down on a specific loan classified as Watch List—Doubtful[65]. - The total allowance for credit loan losses at December 31, 2023, was $157,069, indicating a consistent upward trend in reserves[64]. - Recoveries credited to the allowance for the nine months ended September 30, 2024, amount to $3,134, showing efforts to mitigate losses[65]. - The total allowance for credit loan losses at June 30, 2023, was $140,503, highlighting a significant increase over the past year[63]. - Total non-accrual loans increased to $100,519 thousand as of September 30, 2024, compared to $47,170 thousand on December 31, 2023[70]. - The total past due loans reached $139,435 thousand as of September 30, 2024, with a significant increase in commercial real estate: farmland & commercial loans past due 90 days or greater attributed to specific relationships[75]. - The allowance for credit losses (ACL) at September 30, 2024, was deemed adequate by management to absorb probable losses from the loan portfolio[73]. - The company did not provide any modifications to borrowers experiencing financial difficulties for the nine months ended September 30, 2024[71]. - The increase in commercial real estate: farmland & commercial loans individually evaluated for impairment was due to one relationship secured by commercial buildings housing childcare centers[68]. - The total loans evaluated for impairment amounted to $8,011,900 thousand as of September 30, 2024[68]. Capital Adequacy - The company continues to meet all fully phased-in capital adequacy requirements as of September 30, 2024[110]. - Capital levels exceed all capital adequacy requirements under the Basel III capital rules as currently applicable[114]. - CET1 to risk-weighted assets ratio was 22.18% on September 30, 2024, compared to 21.72% on December 31, 2023[116]. - Tier 1 capital-to-average-total-asset (leverage) ratio was 18.33% on September 30, 2024, up from 17.46% on December 31, 2023[116]. - Risk-weighted Tier 1 capital ratio was 22.85% on September 30, 2024, compared to 22.39% on December 31, 2023[116]. - Risk-weighted total capital ratio increased to 24.10% on September 30, 2024, from 23.65% on December 31, 2023[116]. - Total of $108,868,000 of Capital and Common Securities outstanding qualified as Tier 1 capital as of September 30, 2024[116]. - Regulatory capital requirements are administered by the Federal Reserve and FDIC for the company and its Subsidiary Banks[119]. - Management believes that as of September 30, 2024, the company and its Subsidiary Banks meet all capital adequacy requirements[119]. Stock-Based Compensation - The stock-based compensation expense for the three months ended September 30, 2024, was $47,000, down from $76,000 in the same period of 2023, a decrease of approximately 38.2%[82]. - As of September 30, 2024, there were 227,029 options outstanding with a weighted average exercise price of $35.15[82]. - The total unrecognized stock-based compensation cost related to non-vested options was approximately $263,000, expected to be recognized over a weighted average period of 1.4 years[82]. - The total number of SARs issued under the 2022 SAR Plan as of September 30, 2024, was 459,639[83]. - The total number of stock appreciation rights (SARs) outstanding is 459,639, with a weighted average exercise price of $39.60[84]. - The fair value of the liability for payments due to SAR holders increased from approximately $1,464,000 at December 31, 2023, to $3,680,000 at September 30, 2024[85]. - The expense recorded in connection with all grants under the SAR Plan totaled $847,000 for the three months ended September 30, 2024, compared to $219,000 for the same period in 2023[85]. - The unrecognized liability related to non-vested SARs granted under the SAR Plan is approximately $8,813,000, to be recognized over a weighted average period of 7.8 years[85]. Investment Securities - The total investment securities at September 30, 2024, amount to $5,012,584, with residential mortgage-backed securities valued at $4,855,608[87]. - Proceeds from the sales and calls of available-for-sale debt securities for the three months ended September 30, 2024, were $2,030,000, with gross losses of $1[93]. - The gross unrealized losses on available-for-sale residential mortgage-backed securities at September 30, 2024, were $418,446[95]. - The amortized cost of available-for-sale debt investment securities pledged for fiduciary powers was $1,832,243,000, with an estimated fair value of $1,626,862,000 at September 30, 2024[92]. - Investments in low-income housing tax credit (LIHTC) projects totaled $186,916,000 at September 30, 2024, down from $200,245,000 at December 31, 2023[100]. - Unfunded commitments to LIHTC projects were $22,741,000 at September 30, 2024, compared to $34,126,000 at December 31, 2023[100]. Loan Growth and Performance - As of September 30, 2024, total loans increased to $8,587,025,000 from $8,058,961,000 on December 31, 2023, representing a growth of approximately 6.5%[48]. - The carrying amount of fixed-rate performing loans was $1,211,321,000 as of September 30, 2024, compared to $1,199,347,000 on December 31, 2023, indicating a slight increase of 1.0%[40]. - Time deposits rose to $2,801,761,000 as of September 30, 2024, up from $2,425,177,000 on December 31, 2023, reflecting an increase of approximately 15.5%[42]. - The carrying amount of commercial, financial, and agricultural loans increased to $4,922,980,000 as of September 30, 2024, from $4,802,622,000 on December 31, 2023, a growth of about 2.5%[48]. - The commercial loan portfolio's pass category reached $713,573,000, up from $453,452,000 in 2023, indicating a significant increase of 57.3%[77]. - The total commercial real estate loans stood at $762,741,000, a decrease from $1,008,961,000 in 2023, representing a decline of 24.4%[77]. - The total balance of commercial real estate loans in the farmland and commercial category was $688,375,000, down from $785,392,000 in 2023, a decrease of 12.4%[77]. - The total balance of residential first lien loans was $152,345,000, an increase from $109,558,000 in 2023, representing a growth of 39.0%[77]. - The total consumer loans remained at $32,306,000, up from $12,701,000 in 2023, reflecting a growth of 154.5%[77]. - The current-period gross write-offs for commercial loans were $3,874,000, compared to $2,476,000 in 2023, marking an increase of 56.5%[77]. - The current-period gross write-offs for consumer loans were $19,000, a decrease from $92,000 in 2023, indicating a decline of 79.3%[77]. - Total loans as of December 31, 2023, amounted to $3,364,226, an increase from $1,928,023 in 2022, representing a growth of approximately 74.5%[79]. - The total commercial loans reached $811,918 as of December 31, 2023, compared to $305,621 in 2022, indicating a significant increase of about 165.5%[79]. - The current-period gross write-offs for commercial real estate were $7,053, up from $2,187 in 2022, reflecting an increase of approximately 222.5%[79]. - The total commercial real estate loans for farmland and commercial reached $1,040,592, compared to $631,029 in 2022, marking an increase of about 65%[79]. Stock Repurchase and Dividends - Cash dividends paid were $0.66 per share on February 28 and August 28, 2024, compared to $0.63 per share on the same dates in 2023[106]. - The company has authorized a stock repurchase program of up to $150 million for the 12-month period commencing on March 15, 2024[107]. - As of November 4, 2024, a total of 13,711,689 shares had been repurchased at a cost of $415,258,000[107]. Market Risk - No material changes in market risk exposures were reported during the nine months ended September 30, 2024[175].

Financial Performance - International Bancshares Corporation reported net income for the three and nine months ended September 30, 2024, with specific figures detailed in the attached news release[3]. - The financial results and operational conditions are expected to be further elaborated in the attached news release[3]. Regulatory Compliance - The news release is intended to comply with Regulation Fair Disclosure, ensuring transparency in financial reporting[4]. - The report was filed on November 7, 2024, indicating timely disclosure of financial performance[1]. Company Information - The company is listed on The Nasdaq Stock Market under the trading symbol IBOC[2]. - Dennis E. Nixon serves as the President and Chief Executive Officer of International Bancshares Corporation, signing the report[8]. - The report does not indicate any emerging growth company status for International Bancshares Corporation[2]. - The company has not elected to use the extended transition period for new financial accounting standards[2]. Financial Documentation - The financial statements and exhibits related to the earnings announcement are included in the report[5]. - The report includes an interactive data file embedded within the Inline XBRL document[7].

Financial Position - As of June 30, 2024, the fair value of residential mortgage-backed securities was $4,712,423,000, while available-for-sale securities totaled $4,874,364,000[27]. - The fair value of doubtful loans on the Watch List was $33,465,000 as of June 30, 2024, with a net provision during the period of $5,471,000[30]. - For the period ended December 31, 2023, the fair value of doubtful loans on the Watch List was $46,124,000, with a net provision during the period of $10,221,000[31]. - As of December 31, 2023, the fair value of residential mortgage-backed securities was $4,660,099,000, and total available-for-sale securities amounted to $4,827,758,000[28]. - The fair value of other real estate owned was recorded at $2,920,000 as of June 30, 2024, with a net provision of $16,000 during the period[30]. - The carrying amount of fixed-rate performing loans was $1,260,853,000, with an estimated fair value of $1,143,631,000, reflecting a decrease in fair value from $1,073,892,000 as of December 31, 2023[38]. - Total loans increased to $8,267,827,000 as of June 30, 2024, compared to $8,058,961,000 as of December 31, 2023, representing a growth of approximately 2.6%[43]. - The carrying amount of time deposits rose to $2,644,913,000 as of June 30, 2024, from $2,425,177,000 as of December 31, 2023, indicating an increase of about 9.0%[38]. - The carrying amount of fixed-rate long-term FHLB borrowings was $10,644,000 as of June 30, 2024, remaining stable compared to $10,745,000 as of December 31, 2023[39]. - The total portfolio of loans as of June 30, 2024, was $8,267,827,000[66]. Credit Losses and Provisions - The company recorded $2,228,000 in charges to the allowance for credit losses (ACL) related to loans transferred to other real estate owned for the three months ended June 30, 2024[34]. - The allowance for credit losses (ACL) methodology is based on a loss-rate approach that measures lifetime losses on loan pools with similar risk characteristics[44]. - As of June 30, 2024, the total allowance for credit loan losses is $148,609,000, an increase from $133,557,000 as of March 31, 2023, representing an increase of approximately 11.3%[55]. - The credit loss expense for the six months ended June 30, 2024, is $21,749,000, compared to $8,816,000 for the same period in 2023, indicating a significant increase of approximately 146.5%[58]. - Losses charged to the allowance for the six months ended June 30, 2024, total $32,084,000, compared to $2,982,000 for the same period in 2023, reflecting a substantial increase of approximately 975.5%[59]. - The net (losses) recoveries charged to the allowance for the six months ended June 30, 2024, is $(30,209,000), compared to $(1,870,000) for the same period in 2023, indicating a worsening trend[58]. - The total non-accrual loans increased to $102,139,000 as of June 30, 2024, compared to $47,170,000 on December 31, 2023[62]. - The total past due loans reached $103,469,000 as of June 30, 2024, with a total portfolio of $8,164,358,000[65]. - The allowance for credit losses (ACL) was deemed adequate to absorb probable losses from loans in the portfolio as of June 30, 2024[64]. Loan Portfolio Composition - The company’s loan portfolio includes commercial, financial, agricultural, real estate, consumer, and foreign loans, with commercial loans totaling $4,769,703,000 as of June 30, 2024[43]. - The balance of loans evaluated for impairment as of June 30, 2024, is $8,165,806,000, with a recorded investment of $102,021,000 for loans evaluated individually[60]. - The total balance at June 30, 2024, for commercial real estate: other construction & land development is $54,840,000, while the balance for commercial real estate: farmland & commercial is $44,888,000[55]. - Commercial real estate: farmland & commercial loans individually evaluated for impairment increased significantly due to one relationship secured by childcare centers[61]. - The aging of past due loans showed that 30-59 days past due loans totaled $57,623,000 as of June 30, 2024[65]. - The increase in past due loans in commercial real estate: other construction & land development was attributed to three loans secured by real estate[66]. Capital and Equity - The Common Equity Tier 1 (CET1) to risk-weighted assets ratio was 22.32% on June 30, 2024, up from 21.72% on December 31, 2023[97]. - The Tier 1 capital-to-average-total-asset (leverage) ratio was 18.08% as of June 30, 2024, compared to 17.46% at December 31, 2023[97]. - The risk-weighted total capital ratio was 24.26% on June 30, 2024, compared to 23.65% on December 31, 2023[97]. - The total of $108,868,000 of Capital and Common Securities outstanding qualified as Tier 1 capital as of June 30, 2024[97]. - As of June 30, 2024, the company and its subsidiary banks meet all capital adequacy requirements[99]. Stock-Based Compensation - Stock-based compensation expense for the six months ended June 30, 2024, was $122,000, down from $179,000 for the same period in 2023, a decrease of 31.8%[70]. - As of June 30, 2024, there were 249,526 options outstanding with a weighted average exercise price of $34.57[70]. - The aggregate intrinsic value of options outstanding at June 30, 2024, was $5,650 thousand[70]. - The total unrecognized stock-based compensation cost related to non-vested options was approximately $310,000, expected to be recognized over 1.4 years[70]. - As of June 30, 2024, a total of 461,750 stock appreciation rights (SARs) were outstanding, with a weighted average exercise price of $39.60 and an aggregate intrinsic value of $8,130,000[71]. - The fair value of the liability for payments due to SAR holders increased from approximately $1,464,000 at December 31, 2023, to approximately $2,888,000 at June 30, 2024[72]. - The expense recorded in connection with all grants under the SAR Plan totaled $344,000 for the three months ended June 30, 2024, compared to $264,000 for the same period in 2023[72]. Investment Securities - The total investment securities at June 30, 2024, amounted to $4,869,027,000, with residential mortgage-backed securities contributing $4,712,423,000[74]. - At June 30, 2024, the amortized cost and estimated fair value of available-for-sale debt investment securities pledged was $2,001,561,000 and $1,734,388,000, respectively[79]. - Proceeds from the sales and calls of available-for-sale debt securities for the six months ended June 30, 2024, were $1,720,000, with no gross gains or losses realized[79]. - The balance in equity securities with readily determinable fair values was $5,337,000 at June 30, 2024, down from $5,417,000 at December 31, 2023[80]. - Net losses recognized during the three months ended June 30, 2024, on equity securities amounted to $23,000[80]. - No debt securities in an unrealized loss position were attributed to credit-related reasons as of June 30, 2024[73]. - Investments in Low-Income Housing Tax Credit (LIHTC) projects totaled $193,135,000 as of June 30, 2024, down from $200,245,000 at December 31, 2023[81]. - Unfunded commitments to LIHTC projects were $21,251,000 at June 30, 2024, compared to $34,126,000 at December 31, 2023[81].

Fair Value and Securities - As of March 31, 2024, the fair value of residential mortgage-backed securities was $4,612,306,000, while available-for-sale securities totaled $4,774,990,000[36]. - The total available-for-sale securities as of December 31, 2023, amounted to $4,827,758,000[36]. - As of December 31, 2023, the fair value of residential mortgage-backed securities was $4,660,099,000[36]. - The amortized cost of available-for-sale debt securities was $5,306,234,000 with an estimated fair value of $4,769,630,000 as of March 31, 2024[89]. - Proceeds from the sales and calls of available-for-sale debt securities were $1,720,000 for the three months ended March 31, 2024, with no gross gains or losses realized[95]. Loans and Credit Losses - The fair value of doubtful loans classified as Watch List was $9,137,000 as of March 31, 2024, with a net provision during the period of $(6,471,000)[38]. - For the year ended December 31, 2023, the fair value of doubtful loans was $46,124,000, with a net provision of $10,221,000[38]. - The total doubtful commercial collateral dependent loans as of March 31, 2024, were $45,866,000[38]. - The company recorded $0 in charges to the allowance for credit losses (ACL) for loans transferred to other real estate owned for the three months ended March 31, 2024[41]. - As of March 31, 2024, the total allowance for credit loan losses was $142,798,000, a decrease from $157,069,000 at December 31, 2023[71]. - The credit loss expense for the three months ended March 31, 2024, was $12,978,000, compared to $8,587,000 for the same period in 2023, reflecting an increase of approximately 51.5%[73]. - The balance of loans individually evaluated for impairment decreased to $46,232,000 as of March 31, 2024, from $47,061,000 at December 31, 2023[75]. - The total non-accrual loans amounted to $46,322,000 as of March 31, 2024, slightly down from $47,170,000 at December 31, 2023[76]. - The allowance for credit loan losses for commercial loans collectively evaluated for impairment was $136,978,000 as of March 31, 2024, compared to $144,778,000 at December 31, 2023[75]. - The qualitative loss factors in certain pools of the portfolio were adjusted to reflect a slight improvement in economic uncertainty, resulting in a decrease in the required allowance for credit loan losses[73]. Loan Portfolio and Performance - Total loans increased to $8,112,481,000 as of March 31, 2024, compared to $8,058,961,000 at December 31, 2023, reflecting a growth of approximately 0.66%[58]. - The total portfolio value increased from $8,058,961,000 on December 31, 2023, to $8,112,481,000 on March 31, 2024, reflecting a growth of about 0.7%[81]. - As of March 31, 2024, total past due loans amounted to $69,545,000, representing an increase from $63,805,000 on December 31, 2023, indicating a rise of approximately 9.3%[81]. - The overall trend in past due loans suggests a mixed performance across different loan categories, with some experiencing increases while others show improvements in delinquency rates[81]. - The Watch List—Doubtful Commercial loans decreased primarily due to charge-downs, while Watch List—Doubtful Commercial Real Estate: Multifamily loans increased due to a loan downgrade[83]. Capital and Dividends - As of March 31, 2024, the total outstanding Capital and Common Securities qualified as Tier 1 capital amounted to $108,868,000[101]. - The Common Equity Tier 1 (CET1) to risk-weighted assets ratio was 22.00% on March 31, 2024, compared to 21.72% on December 31, 2023[114]. - The Tier 1 capital-to-average-total-assets (leverage) ratio was 17.85% as of March 31, 2024, up from 17.46% on December 31, 2023[114]. - Cash dividends paid were $0.66 per share on February 28, 2024, compared to $0.63 per share on February 28, 2023[103]. - The company authorized a stock repurchase program of up to $150 million for the 12-month period starting March 15, 2024[104]. Stock-Based Compensation - Stock-based compensation expense for the three months ended March 31, 2024, was $74,000, compared to $102,000 for the same period in 2023[85]. - The total unrecognized stock-based compensation cost related to non-vested options as of March 31, 2024, was approximately $357,000, to be recognized over a weighted average period of 1.5 years[85]. - The expense recorded in connection with all grants under the SAR Plan totaled $1,080,000 for the three months ended March 31, 2024, up from $166,000 for the same period in 2023[87]. Legal Proceedings - The company is involved in various legal proceedings, but any material loss is considered remote[106].

Financial Performance - International Bancshares Corporation reported net income for the three months ended March 31, 2024, with specific figures detailed in the attached news release[5]. - The financial results are intended to be included under "Item 7.01 – Regulation Fair Disclosure" for transparency purposes[6]. - The news release is incorporated by reference as Exhibit 99, providing detailed financial performance metrics[10]. Compliance and Reporting - The report was filed on May 2, 2024, indicating timely compliance with SEC regulations[2]. - The company is listed on The Nasdaq Stock Market under the trading symbol IBOC[4]. - The report includes a cover page interactive data file, enhancing the accessibility of financial data[10]. Company Status and Leadership - The company has not indicated any changes in its status as an emerging growth company[4]. - Dennis E. Nixon serves as the President and Chief Executive Officer, signing off on the report[14]. Business Developments - The report does not specify any new product developments or market expansion strategies[5]. - No mergers or acquisitions were mentioned in the current report[5].

Workforce and Diversity - As of December 31, 2023, the company employed approximately 2,062 full-time and 230 part-time employees, with 68% of the management team having over 15 years of tenure[21]. - Approximately 74% of the workforce self-identified as Latino or Hispanic, and over 66% self-identified as women, reflecting the company's commitment to diversity and inclusion[27]. Banking Operations and Services - The company operates 166 facilities and 256 ATMs across 75 communities in Texas and Oklahoma, focusing on both commercial and retail banking services[18]. - The company has a diverse range of banking services, including international trade facilitation, mortgage lending, and online banking products[19]. - The company has increased its market share in its primary market area through strategic acquisitions, competing with other banks and non-bank entities[30]. Financial Performance and Capital Management - Deposits from customers domiciled in Mexico accounted for approximately 29% of total deposits for the year ended December 31, 2023, indicating a stable deposit base[32]. - As of December 31, 2023, approximately $1,229,500,000 is available for dividend payments to the holding company from Subsidiary Banks, assuming they remain classified as "well capitalized"[69]. - The holding company's leverage ratio was reported at 17.46% as of December 31, 2023, significantly exceeding the minimum requirement of 3% for well-capitalized institutions[80]. - All Subsidiary Banks maintained a leverage ratio in excess of 5% as of December 31, 2023, complying with FDIC capital requirements[81]. - The company is classified as "well capitalized" under applicable regulations, with total risk-based capital ratios exceeding the required benchmarks[82]. Regulatory Environment - The company is subject to extensive regulation by federal and state laws, which could materially affect its business and financial condition[36]. - The company is required to undergo financial stress tests if it has consolidated assets exceeding $10 billion, which currently does not apply to its Subsidiary Banks[41]. - The company must obtain FRB approval prior to merging or consolidating with other bank holding companies or acquiring significant ownership in banks[43]. - The Dodd-Frank Act has introduced significant regulatory changes that may impact the company's capital requirements and operational costs in the future[40]. - The company is required to report beneficial ownership information under the Corporate Transparency Act, effective January 1, 2024[46]. Cybersecurity and Risk Management - The company has implemented robust, multi-layer security procedures to mitigate cyber risks and protect sensitive customer data[193]. - The Information Systems Security Program (ISSP) includes layers of administrative and technical safeguards to protect sensitive information[194]. - The company conducts annual self-assessments using the Cyber Risk Institute to evaluate its cybersecurity strategy and compliance[200]. - Multi-factor authentication (MFA) is required for all retail and commercial customers to enhance online banking security[200]. - The risk of a data breach or cyber-attack is pervasive and severe, despite robust defensive measures[211]. Economic and Market Conditions - The company may face adverse impacts from declining crude oil prices, which could affect the economies of primary markets like Texas and Oklahoma[181]. - Economic conditions in primary market areas, including Texas and Oklahoma, significantly influence the company's performance, with potential increases in loan delinquencies if conditions worsen[182]. - The company faces substantial competition from various financial institutions, including fintechs, which may affect its revenue streams and deposit base[162]. Compliance and Legal Risks - The CFPB's authority to enforce consumer protection laws may increase compliance costs for the company and its Subsidiary Banks[121]. - The Dodd-Frank Act mandates that financial institutions with assets of $1 billion or more disclose their incentive-based compensation structures to regulators[149]. - The Dodd-Frank Act expands limitations on affiliate transactions, affecting the company's financial operations[135]. - Negative publicity and diminished depositor confidence due to recent bank failures could adversely affect the company's liquidity and results of operations[188]. Future Outlook and Strategic Considerations - Future acquisitions and branch expansions are subject to regulatory approvals, which depend on examination results and CRA ratings[166]. - The loss of the CEO, who has been pivotal in the company's growth since 1979, could materially affect the company's business and prospects[167]. - Recent volatility in the banking industry may lead to new regulations that could impose additional costs and operational changes for the company[189].

Financial Performance - International Bancshares Corporation reported a 37.2% increase in net income for 2023, totaling $411.8 million compared to $300.2 million in 2022[2] - Diluted earnings per share increased by 38.5% to $6.62 in 2023 from $4.78 in 2022[2] - Non-interest income for 2023 was $169.9 million, a decrease from $187.1 million in 2022[4] Income and Assets - Net interest income rose to $663.5 million in 2023, up from $487.6 million in 2022, driven by an increase in the investment portfolio and loan interest income[4] - Total assets decreased to $15.1 billion at December 31, 2023, down from $15.5 billion at the end of 2022[7] - Total net loans increased to $7.9 billion at December 31, 2023, compared to $7.3 billion at the end of 2022[7] - Deposits decreased to $11.8 billion at December 31, 2023, down from $12.7 billion at the end of 2022[7] Strategic Focus - The company emphasized its focus on managing interest income and expense in the current economic environment[3] - The return on assets (ROA) positions International Bancshares Corporation among the top publicly traded bank holding companies in the nation[5] - The company expressed confidence in its strong capital position and management strategies for continued success in 2024 and beyond[6]