Fair Value and Securities - As of September 30, 2023, the fair value of residential mortgage-backed securities is $4,545,600,000, while states and political subdivisions amount to $146,338,000[38]. - The total fair value of available-for-sale debt securities as of September 30, 2023, is $4,697,096,000, with equity securities valued at $5,158,000[38]. - The fair value of available-for-sale securities as of December 31, 2022, totaled $4,423,154,000, with residential mortgage-backed securities at $4,209,212,000[38]. - The fair value hierarchy includes Level 1 inputs for unadjusted quoted prices in active markets and Level 2 inputs for observable inputs other than Level 1[36]. - The company applies fair value measurements in accordance with ASC Topic 820, which establishes a framework for measuring fair value[35]. - As of September 30, 2023, the total investment securities amounted to $4,691,938,000, with a gross unrealized loss of $696,319,000[94]. - Residential mortgage-backed securities had an amortized cost of $5,227,139,000 and an estimated fair value of $4,545,600,000, reflecting a gross unrealized loss of $681,539,000[94]. - The company reported equity securities with readily determinable fair values of $5,158,000 as of September 30, 2023, down from $5,358,000 at December 31, 2022[102]. - No debt securities in an unrealized loss position were attributed to credit-related reasons, resulting in no allowances recorded for the period[93]. - The total investment in loans individually evaluated for impairment as of September 30, 2023, was $42,177,000, with an allowance of $7,651,000[76]. Loans and Credit Quality - The company reported $29,763,000 in watch-list doubtful loans as of September 30, 2023, with a net provision during the period of $5,581,000[39]. - Other real estate owned as of September 30, 2023, is valued at $546,000, with a net provision during the period of $2,510,000[39]. - The company had approximately $51,326,000 of doubtful commercial collateral-dependent loans as of December 31, 2022[39]. - As of September 30, 2023, total loans increased to $7,896,899,000 from $7,430,603,000 as of December 31, 2022, representing a growth of approximately 6.3%[58]. - The carrying amount of fixed-rate performing loans was $1,166,647,000 as of September 30, 2023, down from $1,203,381,000 as of December 31, 2022, indicating a decrease of about 3.0%[48]. - The estimated fair value of fixed-rate performing loans decreased to $1,014,777,000 as of September 30, 2023, from $1,100,848,000 as of December 31, 2022, reflecting a decline of approximately 7.8%[48]. - The total balance of credit loan losses increased to $149,006 thousand as of September 30, 2023, up from $140,503 thousand at June 30, 2023, reflecting a growth of approximately 6%[72]. - Credit loss expense for the three months ended September 30, 2023, was $10,476 thousand, compared to $8,525 thousand for the same period in 2022, representing an increase of about 23%[74]. - The balance of credit loan losses at September 30, 2023, included $33,853 thousand in domestic commercial loans, which is an increase from $27,645 thousand at June 30, 2023[72]. - The total balance of credit loan losses for foreign loans was $1,216 thousand as of September 30, 2023, which is an increase from $1,180 thousand at June 30, 2023[72]. - As of September 30, 2023, the total allowance for credit losses (ACL) increased to $141,355,000 from $123,527,000 as of December 31, 2022, reflecting a rise in credit loss expense due to economic uncertainty[76][77]. - The company has categorized loans into various segments, including commercial, real estate, and consumer loans, to better assess risk and manage credit quality[58]. - The company’s internal Watch List report categorizes loans into six categories, including Pass, Economic Monitoring, and Watch List—Doubtful, to monitor potential credit weaknesses[66]. - The total loan portfolio as of September 30, 2023, was $7,896,899,000, up from $7,430,603,000 at the end of 2022, indicating growth in the overall lending activity[86]. - Total loans evaluated for impairment as of September 30, 2023, amounted to $7,854,722,000, with a total allowance of $141,355,000[76]. - Non-accrual loans decreased to $41,997,000 as of September 30, 2023, down from $51,648,000 at December 31, 2022[77]. - The total amount of commercial real estate loans past due 90 days or greater was $19,493,000 as of September 30, 2023, compared to $1,130,000 on December 31, 2022[84]. - The total amount of residential first lien loans past due was $6,298,000 as of September 30, 2023, compared to $7,280,000 at the end of 2022[86]. - The total amount of foreign loans past due was $1,287,000 as of September 30, 2023, an increase from $1,028,000 on December 31, 2022[86]. - The total amount of consumer loans past due was $493,000 as of September 30, 2023, reflecting a slight increase from $302,000 at the end of 2022[86]. - The total amount of loans on the watch list classified as "Substandard" was $1,430,000 for 2023, compared to $1,861,000 in 2022[86]. Capital and Dividends - As of September 30, 2023, the company had a CET1 to risk-weighted assets ratio of 20.97%, up from 20.21% on December 31, 2022[120]. - The company reported a Tier 1 capital-to-average-total-assets (leverage) ratio of 16.75% as of September 30, 2023, compared to 14.59% on December 31, 2022[120]. - The total of $108,868,000 of Capital and Common Securities outstanding qualified as Tier 1 capital as of September 30, 2023[120]. - The company paid cash dividends of $0.63 per share on February 28 and August 25, 2023, compared to $0.60 per share in the same periods of 2022[109]. - A total of 13,694,792 shares had been repurchased under all programs at a cost of $414,306,000 as of October 30, 2023[110]. - The company has extended its stock repurchase program to purchase up to $124 million of common stock during the 12-month period commencing on March 15, 2023[110]. - The company continues to meet all fully phased-in capital adequacy requirements as of September 30, 2023[114]. Stock-Based Compensation - Stock-based compensation expense for the three months ended September 30, 2023, was $76,000, compared to $118,000 for the same period in 2022[89]. - As of September 30, 2023, there were 432,223 stock options outstanding with a weighted average exercise price of $29.71[89]. - The total unrecognized stock-based compensation cost related to non-vested options was approximately $507,000, expected to be recognized over a weighted average period of 1.5 years[89]. - The fair value of the liability for payments due to stock appreciation rights holders was approximately $976,000 as of September 30, 2023[91]. - Stock appreciation rights outstanding at September 30, 2023, totaled 473,250 with a weighted average exercise price of $39.35[91]. - The expense recorded in connection with all grants under the SAR Plan was $219,000 for the three months ended September 30, 2023[91]. Legal and Regulatory Matters - The company is involved in various legal proceedings, but any material loss is considered remote[111]. - The interest rate index on the Capital and Common Securities transitioned to the Three-Month CME Term Secured Overnight Financing Rate ("SOFR") with a 26 basis point spread adjustment as of July 1, 2023[108]. - The company actively monitors regulatory capital ratios to ensure that its Subsidiary Banks are well-capitalized under the regulatory framework[120].

Dividends and Stock Repurchase - The company declared a semi-annual cash dividend of $0.63 per share, payable on August 25, 2023, for recordholders as of August 11, 2023[34] - The company paid cash dividends of $0.63 per share on February 28, 2023, compared to $0.60 per share on February 28, 2022[108] - The stock repurchase program was extended to authorize the repurchase of up to $124 million of common stock during the 12-month period commencing on March 15, 2023[109] - As of July 31, 2023, a total of 13,692,792 shares had been repurchased at a cost of $414,222,000[109] Financial Performance and Position - The company operates as one segment, with performance assessed through consolidated financial statements[33] - The company’s financial statements are prepared in accordance with U.S. GAAP and include necessary adjustments for fair presentation[32] - Total loans increased to $7,573,077,000 as of June 30, 2023, compared to $7,430,603,000 at December 31, 2022, reflecting a growth of approximately 1.9%[57] - The carrying amount of fixed-rate performing loans was $1,179,615,000 as of June 30, 2023, down from $1,203,381,000 at December 31, 2022, indicating a decrease of about 2.0%[48] - The estimated fair value of fixed-rate performing loans decreased to $1,077,069,000 as of June 30, 2023, from $1,100,848,000 at December 31, 2022, representing a decline of approximately 2.1%[48] - The total amount of commercial, financial, and agricultural loans was $4,280,036,000 as of June 30, 2023, down from $4,373,373,000 at December 31, 2022, showing a decrease of approximately 2.1%[57] Allowance for Credit Losses - The allowance for credit losses (ACL) recorded charges of $0 for the three months ended June 30, 2023, and $2,000 for the twelve months ended December 31, 2022[58] - The allowance for credit loan losses (ACL) at June 30, 2023, is $140,503,000, an increase from $133,557,000 at March 31, 2023[72] - The methodology for estimating ACL includes quantitative historical loss percentages and qualitative current conditions[70] - The adequacy of the ACL is influenced by factors such as loan portfolio performance and economic conditions[70] - The allowance for credit losses (ACL) at June 30, 2023, was deemed adequate to absorb probable losses from the loan portfolio[81] Loan Performance and Quality - The total non-accrual loans as of June 30, 2023, amounted to $42,083,000, a decrease from $51,648,000 as of December 31, 2022[76] - The total past due loans amounted to $68,474,000, representing an increase from $18,018,000 on December 31, 2022[83] - Commercial loans past due 90 days or greater increased significantly, primarily due to a loan secured by equipment in the oil and gas industry[83] - The largest category of past due loans was in Commercial Real Estate: Other Construction & Land Development, with $10,812,000 past due as of June 30, 2023[83] - The increase in past due loans is attributed to loans on non-accrual status, particularly in the oil and gas sector[83] Securities and Investments - As of June 30, 2023, the total investment securities amounted to $4,669,847,000, with a carrying value of $5,285,989,000[94] - Residential mortgage-backed securities had an amortized cost of $5,123,159,000 and an estimated fair value of $4,508,112,000, reflecting unrealized losses of $616,284,000[94] - The fair value of the liability for payments due to SAR holders was approximately $976,000 as of June 30, 2023[90] - The amortized cost of available-for-sale debt investment securities pledged for fiduciary powers was $1,642,812,000, with an estimated fair value of $1,394,906,000 at June 30, 2023[97] Capital Adequacy - As of June 30, 2023, the Common Equity Tier 1 (CET1) to risk-weighted assets ratio was 21.32%, up from 20.21% on December 31, 2022[119] - The Tier 1 capital-to-average-total-assets (leverage) ratio was 16.29% as of June 30, 2023, compared to 14.59% at the end of 2022[119] - The risk-weighted total capital ratio stood at 23.28% on June 30, 2023, an increase from 22.22% on December 31, 2022[119] - A total of $108,868,000 of Capital and Common Securities was outstanding as of June 30, 2023, qualifying as Tier 1 capital[119] Regulatory and Legal Matters - The company continues to meet all fully phased-in capital adequacy requirements as of June 30, 2023[116] - The company is involved in various legal proceedings, but any material loss is considered remote based on current assessments[110]

Fair Value and Securities - As of March 31, 2023, the fair value of available-for-sale debt securities was $4,865,210,000, with residential mortgage-backed securities contributing $4,647,229,000[34]. - The fair value of Watch-List doubtful loans as of March 31, 2023, was $29,894,000, with a net provision during the period of $1,000,000[37]. - The total fair value of other real estate owned as of March 31, 2023, was $752,000, with a net provision during the period of $250,000[37]. - As of December 31, 2022, the fair value of available-for-sale securities was $4,423,154,000, with residential mortgage-backed securities at $4,209,212,000[36]. - The fair value hierarchy includes Level 1 inputs, which are unadjusted quoted prices in active markets, and Level 2 inputs, which are observable inputs other than Level 1[35]. - The estimated fair value of fixed-rate performing loans was $1,094,152,000 as of March 31, 2023, compared to $1,100,848,000 as of December 31, 2022, reflecting a decline of approximately 0.6%[47]. - The estimated fair value of time deposits was $2,154,962,000 as of March 31, 2023, compared to $2,076,231,000 as of December 31, 2022, indicating an increase of approximately 3.8%[50]. - The total investment securities amounted to $5,397,131,000 with an estimated fair value of $4,859,818,000, reflecting unrealized losses of $544,087,000[92]. - The gross unrealized losses on investment securities at March 31, 2023, totaled $544,087,000, primarily due to changes in market interest rates[99]. - The residential mortgage-backed securities held a carrying value of $4,647,229,000, which includes $810,907,000 from Ginnie Mae and $3,836,322,000 from Fannie Mae and Freddie Mac[92]. Loans and Credit Quality - As of March 31, 2023, total loans amounted to $7,531,773,000, an increase from $7,430,603,000 as of December 31, 2022, representing a growth of approximately 1.4%[58]. - The carrying amount of fixed-rate performing loans was $1,196,549,000 as of March 31, 2023, down from $1,203,381,000 as of December 31, 2022, indicating a decrease of about 0.6%[47]. - The company had approximately $51,306,000 of doubtful commercial collateral-dependent loans as of March 31, 2023, with no appraisals performed in the preceding twelve months[38]. - The allowance for credit loan losses increased from $125,972 thousand on December 31, 2022, to $133,557 thousand on March 31, 2023, reflecting a rise of approximately 6.4%[71]. - Credit loss expense for the three months ended March 31, 2023, was $8,587 thousand, compared to $1,481 thousand for the same period in 2022, indicating a significant increase in provisions due to economic uncertainty[72]. - The total recorded investment for loans evaluated for impairment as of March 31, 2023, was $7,479,964 thousand, with a corresponding allowance of $130,112 thousand[73]. - Non-accrual loans totaled $51,632 thousand as of March 31, 2023, slightly decreasing from $51,648 thousand on December 31, 2022[74]. - The total past due loans amounted to $83,029,000, representing an increase from $18,018,000 as of December 31, 2022[81]. - The total past due loans increased by approximately 46% from December 31, 2022, to March 31, 2023, highlighting potential credit quality concerns[81]. - The total balance of commercial loans classified as "Pass" was $1,435,291,000 as of March 31, 2023, down from $1,498,102,000[83]. Capital and Stockholder Equity - The CET1 to risk-weighted assets ratio was 20.43% on March 31, 2023, compared to 20.21% on December 31, 2022[117]. - The Tier 1 capital-to-average-total-asset (leverage) ratio was 15.61% as of March 31, 2023, up from 14.59% at the end of 2022[117]. - The risk-weighted Tier 1 capital ratio was 21.37% on March 31, 2023, compared to 21.04% on December 31, 2022[117]. - Cash dividends of $0.63 per share were paid on February 28, 2023, compared to $0.60 per share on February 28, 2022[107]. - The company authorized a stock repurchase program of up to $124 million for the 12-month period starting March 15, 2023[108]. - A total of 13,615,730 shares had been repurchased at a cost of $411,099,000 as of May 1, 2023[108]. - The total outstanding Capital and Common Securities qualified as Tier 1 capital amounted to $134,642,000[106]. - The company continues to meet all fully phased-in capital adequacy requirements as of March 31, 2023[114]. Accounting and Reporting - The consolidated financial statements are unaudited but include all necessary adjustments for fair presentation[30]. - The company did not have any material recognizable or non-recognizable subsequent events through the date of issuing the financial statements[32]. - The company applies the provisions of FASB ASC 280 for segment reporting, operating as one segment with five active subsidiary banks[31]. - The company adopted ASU 2022-02 on January 1, 2023, which enhances disclosure requirements for troubled debt restructurings but did not significantly impact consolidated financial statements[74]. - The allowance for credit losses (ACL) at March 31, 2023, was deemed adequate by management to absorb probable losses from the loan portfolio[79]. - The company has not recorded any allowances for debt securities in the Allowance for Credit Losses (ACL) for the period[91].

Employment and Workforce - As of December 31, 2022, the company employed approximately 1,974 full-time and 195 part-time employees, with over 65% of the management team having more than 15 years of tenure[21] - The company has a strong commitment to diversity, with over 74% of its workforce self-identifying as Latino or Hispanic and over 66% as women as of December 31, 2022[26] - The company has a commitment to maintaining a safe and healthy work environment, free from discrimination and harassment[27] Operations and Facilities - The company operates 167 facilities and 257 ATMs across 75 communities in Texas and Oklahoma, focusing on both commercial and retail banking services[18] - The company has emphasized consumer and retail banking, including mortgage lending, and has strategically located branches in retail locations and shopping malls[18] - The company’s principal offices occupy approximately 147,000 square feet in Laredo, Texas, with facilities located in various regions including Austin, Dallas, and Houston[196] Financial Performance and Capitalization - The leverage ratio for the holding company at December 31, 2022, was 14.59%, well above the minimum requirement of 3% for the highest regulatory rating[83] - The company is classified as "well-capitalized" under applicable regulations, with total risk-based capital ratios exceeding the minimum thresholds of 10% for total capital, 6% for Tier 1 capital, and 5% for leverage ratio[85] - As of December 31, 2022, approximately $961,000,000 is available for dividend payments to the holding company, assuming all subsidiary banks remain "well-capitalized"[71] Regulatory Compliance - The company is subject to extensive regulation by the Federal Reserve Board and the Federal Deposit Insurance Corporation, impacting its operations and financial condition[34] - The company must comply with NASDAQ listing standards, which include disclosure requirements and standards related to board independence[63] - The company is subject to regulatory policies regarding dividend payments, which depend on cash derived from dividends declared by Subsidiary Banks[69] Risk Management and Legal Compliance - The company has implemented a program to monitor and enforce policies on money laundering, corruption, and bribery, which could have serious legal and reputational consequences if not maintained[48] - The Foreign Account Tax Compliance Act (FATCA) requires U.S. banks to withhold a 30% tax on U.S. sourced income payable to foreign financial institutions that do not comply with reporting requirements[50] - The company is subject to numerous consumer laws and regulations designed to protect consumers in transactions with banks[122] Economic and Market Conditions - The company’s financial performance is significantly affected by economic conditions in its primary market areas, including Texas and Oklahoma, which could lead to increased loan delinquencies if conditions worsen[186] - The company faces substantial competition from various financial institutions, including fintechs, which may affect revenue streams and customer deposits[160] - The trading price of the company’s common stock has been volatile, influenced by various factors including earnings variations and market conditions[194] Internal Controls and Reporting - As of December 31, 2022, management assessed the effectiveness of internal controls over financial reporting and determined they were effective[210] - RSM US LLP provided an unqualified opinion on the effectiveness of internal controls over financial reporting as of December 31, 2022[211] - There were no changes in internal control over financial reporting during the quarter ended December 31, 2022, that materially affected the controls[208] Capital and Loan Losses - The adoption of the FASB CECL accounting standard increased the allowance for probable loan losses by approximately 17.2%, resulting in a one-time cumulative-effect adjustment to retained earnings of approximately $8.3 million, net of tax[114] - The allowance for probable loan losses may be insufficient, requiring management to make significant estimates and assumptions regarding credit risks[157] - The company relies on analytical tools and forecasting models for estimating loan losses and measuring fair value, which may not be accurate during market stress[184] Strategic Initiatives and Future Outlook - The company has increased its market share in its primary market area through strategic acquisitions, competing with commercial banks, savings and loan associations, and credit unions[29] - The company may face additional risks from new lines of business or products, which could require significant investment and may not achieve profitability targets[183] - The company has established disaster recovery policies, but severe external events could materially affect its business operations[177]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 000-09439 INTERNATIONAL BANCSHARES CORPORATION (Exact name of registrant as specified in its charter) incorporation or organization) Texas 74-21 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 000-09439 INTERNATIONAL BANCSHARES CORPORATION (Exact name of registrant as specified in its charter) incorporation or organization) Texas 74-2 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 0-09439 INTERNATIONAL BANCSHARES CORPORATION (956) 722-7611 (Registrant's telephone number, including area code) | Title of each ...

Loan Loss Allowance and Credit Quality - International Bancshares Corporation's allowance for probable loan losses increased by approximately 17.2%, resulting in a cumulative-effect adjustment to retained earnings of approximately $8.3 million, net of tax [35]. - The allowance for credit losses (ACL) recorded charges of $2,065,000 for the nine months ended September 30, 2021, compared to $1,539,000 for the twelve months ended December 31, 2020, indicating an increase of approximately 34% [43]. - The total balance of the allowance for credit loan losses as of September 30, 2021, was $109,325,000, reflecting an increase from $108,281,000 at June 30, 2021 [74]. - Credit loss expense for the three months ended September 30, 2021, was $2,801,000, compared to a net recovery of $1,757,000 charged to the allowance [74]. - The company recorded net losses charged to the allowance of $1,757,000 for the three months ended September 30, 2021 [74]. - The balance of the allowance for commercial loans increased to $23,204,000 from $23,063,000 during the same period [74]. - The foreign loan allowance balance was $3,745,000 as of September 30, 2021, down from $3,916,000 at June 30, 2021 [74]. - The company experienced recoveries credited to the allowance totaling $673,000 for the three months ended September 30, 2021 [74]. - The company’s methodology for estimating ACL includes a reversion to the average lifetime loss rate beyond the forecast period [73]. - Changes in economic conditions, government actions, and interest rates could impact the adequacy of the ACL and future credit loss expenses [73]. - The credit loss expense charged to operations increased throughout 2020 due to deteriorating economic conditions caused by COVID-19, impacting certain segments of the loan portfolio [77]. - Economic conditions during the first nine months of 2021 have stabilized and improved in some segments, leading to a decrease in credit loss expense for the three and nine months ended September 30, 2021 compared to the same period in 2020 [77]. - The allowance for credit losses (ACL) calculation at December 31, 2020 remained constant in the September 30, 2021 ACL calculation, positively impacting the credit loss expense [77]. - The balance at September 30, 2020 was $102,165,000, with significant components including $22,144,000 in domestic commercial and $38,083,000 in foreign commercial [75]. - For the nine months ended September 30, 2021, the balance increased to $109,325,000, reflecting growth in various segments [75]. - Losses charged to the allowance for the nine months ended September 30, 2021 totaled $6,631,000, indicating a significant impact from economic conditions [75]. - Recoveries credited to the allowance for the nine months ended September 30, 2021 amounted to $1,760,000, showing some recovery in the loan portfolio [75]. - The net losses charged to the allowance for the nine months ended September 30, 2021 were $4,871,000, reflecting ongoing challenges in the economic environment [75]. - The credit loss expense for the nine months ended September 30, 2020 was $36,595,000, highlighting the financial strain during that period [75]. - As of September 30, 2021, total loans individually evaluated for impairment amounted to $1,650,000, while loans collectively evaluated for impairment totaled $7,402,508, resulting in an overall allowance of $109,226,000 [78]. - The total non-accrual loans as of September 30, 2021 were $1,903,000, a significant decrease from $19,822,000 as of December 31, 2020 [79]. - The total troubled debt restructuring loans decreased to $2,919,000 as of September 30, 2021, down from $5,821,000 at the end of 2020 [80]. - The company continues to monitor credit extended to borrowers and is actively working with customers affected by the economic crisis due to COVID-19 [80]. Loan Portfolio and Growth - As of September 30, 2021, total loans amounted to $7,404,158,000, a decrease from $7,541,754,000 as of December 31, 2020, representing a decline of approximately 1.8% [61]. - Total loans increased to $2,623,804,000 at September 30, 2021, up from $2,065,068,000 in 2020, representing a growth of approximately 27% [86]. - The commercial loan segment showed a total balance of $814,350,000 in 2021, compared to $473,912,000 in 2020, indicating a significant increase of about 72% [86]. - The balance of commercial real estate loans reached $1,671,212,000 in 2021, up from $1,615,727,000 in 2020, reflecting a growth of approximately 3.4% [86]. - The residential first lien loans totaled $385,633,000 in 2021, compared to $385,260,000 in 2020, showing a slight increase of about 0.1% [86]. - The total balance of foreign loans was $135,843,000 in 2021, up from $37,503,000 in 2020, marking a substantial increase of approximately 262% [86]. - The pass category for commercial loans increased to $775,702,000 in 2021 from $398,790,000 in 2020, a growth of about 94.5% [86]. - Special review loans in the commercial segment decreased to $1,517,000 in 2021 from $74,691,000 in 2020, indicating a decline of approximately 98% [86]. - The total balance of residential junior lien loans was $490,680,000 in 2021, compared to $141,401,000 in 2020, reflecting a significant increase of about 247% [86]. - The watch list for commercial loans showed a total of $33,803,000 in 2021, compared to $8,408,000 in 2020, representing an increase of approximately 302% [86]. - The total balance of consumer loans was $40,699,000 in 2021, up from $10,196,000 in 2020, indicating a growth of about 299% [86]. - Total Commercial loans reached $1,288,332, a significant increase from the previous year [88]. - Total Commercial real estate loans were reported at $1,846,757, showing growth in this sector [88]. - The company reported a total of $2,289,308 in farmland and commercial loans, highlighting its diverse portfolio [88]. - Consumer loans reached $30,910, demonstrating a stable consumer lending environment [88]. - The company has a total of $441,044 in loans under special review, indicating proactive risk assessment measures [88]. - Watch List - Doubtful loans were recorded at $134, suggesting potential concerns in this category [88]. Financial Instruments and Securities - As of September 30, 2021, the fair value of residential mortgage-backed securities was $4,509,643,000, while available-for-sale debt securities totaled $4,560,446,000 [37]. - The fair value of Watch-List doubtful loans as of September 30, 2021, was $57,000, with a net provision for credit during the period of $209,000 [39]. - The fair value of other real estate owned as of September 30, 2021, was $1,685,000, with a net provision for credit during the period of $2,065,000 [39]. - As of December 31, 2020, the fair value of residential mortgage-backed securities was $3,029,954,000, and total available-for-sale securities amounted to $3,086,970,000 [38]. - The fair value measurements hierarchy includes Level 1, Level 2, and Level 3 inputs, with specific classifications for financial instruments [36]. - The estimated fair value of fixed-rate performing loans was $1,451,592,000 as of September 30, 2021, compared to $1,747,257,000 as of December 31, 2020, reflecting a decline of approximately 17% [50]. - The estimated fair value of time deposits was $2,184,386,000 as of September 30, 2021, compared to $2,148,976,000 as of December 31, 2020, showing an increase of approximately 1.6% [53]. - The fair value of long-term fixed-rate borrowings from the Federal Home Loan Bank was estimated at $466,315,000 as of September 30, 2021, compared to $480,475,000 as of December 31, 2020, indicating a decrease of about 2.9% [56]. - The company evaluated debt securities classified as available-for-sale and held-to-maturity and determined no allowances for debt securities in an unrealized loss position were necessary [91]. - As of September 30, 2021, unrealized losses on equity securities amounted to $5,000 for the three months and $70,000 for the nine months ended September 30, 2021 [102]. - The total investment securities at September 30, 2021, included $4,540,752,000 in available-for-sale debt securities, with an estimated fair value of $4,554,314,000 [92]. - Gross unrealized losses on available-for-sale residential mortgage-backed securities totaled $11,243,000 as of September 30, 2021 [99]. - The amortized cost of held-to-maturity investment securities was $3,400,000, with an estimated fair value of $3,400,000 [92]. - The company had $1,442,729,000 in available-for-sale debt investment securities pledged for fiduciary powers as of September 30, 2021 [97]. - Proceeds from the sale and calls of debt securities available-for-sale were $5,890,000 for the nine months ended September 30, 2021, with gross losses of $16,000 [98]. Capital Adequacy and Regulatory Compliance - The company continues to meet all fully phased-in capital adequacy requirements as of September 30, 2021, under the Basel III Capital Rules [117]. - The capital conservation buffer requires a minimum ratio of Common Equity Tier 1 (CET1) capital to risk-weighted assets of at least 7% [114]. - As of September 30, 2021, the CET1 to risk-weighted assets ratio was 19.64%, up from 19.05% on December 31, 2020 [120]. - The Tier 1 capital-to-average-total-assets (leverage) ratio was 13.89% as of September 30, 2021, compared to 14.92% on December 31, 2020 [120]. - The risk-weighted Tier 1 capital ratio stood at 20.76% on September 30, 2021, an increase from 20.25% on December 31, 2020 [120]. - The risk-weighted total capital ratio was 21.86% as of September 30, 2021, compared to 21.40% on December 31, 2020 [120]. - Total outstanding Capital and Common Securities qualified as Tier 1 capital amounted to $134,642,000 as of September 30, 2021 [120]. - Regulatory capital ratios are actively monitored to ensure that the subsidiary banks are well-capitalized under the regulatory framework [120]. - The company and its subsidiary banks believe they meet all capital adequacy requirements as of September 30, 2021 [122]. - The leverage ratio is calculated by dividing Tier 1 capital by adjusted quarterly average total assets, excluding goodwill and other intangible assets [121]. - Regulatory authorities can initiate mandatory actions if minimum capital requirements are not met, which could materially affect financial statements [122]. Corporate Governance and Legal Matters - The company is involved in various legal proceedings, but any material loss is considered remote or not material to its consolidated financial position [111]. - The company did not have any material recognizable or non-recognizable subsequent events through the date of issuing the financial statements [33]. - The company has five wholly-owned subsidiary banks contributing to its consolidated financial statements [31]. - The company operates as one segment, with performance assessed through consolidated statements presented in the report [32]. - The implementation of the FASB Accounting Standards Update No. 2016-13 was effective for the company on January 1, 2020, impacting the accounting for credit losses [34]. - The company has opted not to measure an Allowance for Credit Losses (ACL) for accrued interest receivable due to its timely approach in identifying and writing off uncollectible accrued interest [72]. - The company continues to monitor credit extended to borrowers and is actively working with customers affected by the economic crisis due to COVID-19 [80]. - The company is focusing on market expansion and new product development to enhance growth prospects [88]. - Future guidance indicates a commitment to maintaining loan quality while pursuing strategic growth initiatives [88].

Loan Losses and Credit Risk - The allowance for probable loan losses increased by approximately 17.2%, resulting in a cumulative-effect adjustment to retained earnings of approximately $8.3 million, net of tax [33][34]. - The allowance for credit losses (ACL) methodology measures lifetime losses on loan pools with similar risk characteristics, ensuring a comprehensive evaluation of credit risk [62]. - The company has a structured internal Watch List report to monitor loans with potential weaknesses, categorized into various risk levels [68]. - The company emphasizes the importance of qualitative loss factors in evaluating the adequacy of the ACL, which may affect future credit loss expense estimates [70]. - The ACL for the Subsidiary Banks is reviewed based on specific doubtful loans, historical loss percentages, and qualitative current conditions, with future estimates potentially affecting credit loss expenses [73]. - The total balance of the allowance for credit loan losses as of June 30, 2020, was $94,554,000, indicating a year-over-year increase [75]. - The credit loss expense charged to operations increased throughout 2020 due to deteriorating economic conditions from COVID-19, but stabilized in the first half of 2021, resulting in a decrease in credit loss expense for the three and six months ended June 30, 2021 compared to the same period in 2020 [78]. - The total balance of the allowance for credit loan losses was $108,281,000, showing a slight decrease from $108,408,000 at March 31, 2021 [74]. - The credit loss expense for the three months ended June 30, 2021, was $1,144,000, compared to a credit loss expense of $10,989,000 for the same period in 2020 [75]. - The company recorded net losses charged to the allowance of $1,271,000 for the three months ended June 30, 2021 [74]. - The company experienced recoveries credited to the allowance totaling $577,000 for the three months ended June 30, 2021 [74]. - The total non-accrual loans as of June 30, 2021 were $2,232,000, a significant decrease from $19,822,000 as of December 31, 2020 [80]. - The total troubled debt restructuring as of June 30, 2021 was $3,322,000, down from $5,821,000 as of December 31, 2020 [81]. - The company continues to monitor credit extended to borrowers carefully, although there is no precise method for predicting loan losses [84]. Loan Portfolio and Securities - As of June 30, 2021, total loans amounted to $7,387,537,000, a decrease from $7,541,754,000 as of December 31, 2020, representing a decline of approximately 2.04% [61]. - The total loan portfolio was reported at $7,387,537,000 as of June 30, 2021, reflecting a slight decrease from $7,541,754,000 at the end of 2020 [87]. - The commercial loan segment showed a total balance of $1,707,424,000 as of June 30, 2021, down from $1,785,936,000 at the end of 2020 [87]. - The residential first lien loans reported a total of $399,171,000 as of June 30, 2021, compared to $405,119,000 at the end of 2020, a decrease of approximately 1.9% [87]. - The commercial real estate segment, specifically construction and land development loans, saw a total of $1,618,493,000 as of June 30, 2021, down from $1,846,757,000 at the end of 2020 [87]. - The total balance of foreign loans was $141,218,000 as of June 30, 2021, consistent with the previous period [87]. - The total balance of consumer loans remained stable at $40,505,000 as of June 30, 2021, compared to $40,595,000 at the end of 2020 [87]. - The total recorded investment for commercial loans individually evaluated for impairment was $567,000 as of June 30, 2021 [79]. - The total balance of the allowance for credit loan losses for commercial loans was $23,063,000 as of June 30, 2021 [74]. - The company has no intent to sell residential mortgage-backed securities, which are primarily affected by changes in market interest rates [102]. - As of June 30, 2021, the total investment securities amounted to $4,171,881,000, with a carrying value of $4,148,673,000 for available-for-sale debt securities [94]. - Residential mortgage-backed securities had an amortized cost of $4,103,989,000 and an estimated fair value of $4,123,636,000, reflecting unrealized losses of $6,684,000 [96]. - The gross unrealized losses on available-for-sale residential mortgage-backed securities totaled $6,684,000, with $1,672,076,000 in fair value for securities held less than 12 months [100]. - The company evaluated its debt securities and determined no impairments were necessary as of June 30, 2021 [92]. Capital and Financial Position - The company operates as one segment, with performance assessed through consolidated statements presented in the report [31]. - The company has five wholly-owned subsidiary banks contributing to its consolidated financial statements [30]. - The company continues to meet all fully phased-in capital adequacy requirements as of June 30, 2021, under the Basel III Capital Rules [119]. - The company actively monitors regulatory capital ratios to ensure that its subsidiary banks are well-capitalized [122]. - The Common Equity Tier 1 (CET1) to risk-weighted assets ratio was 19.53% on June 30, 2021, compared to 19.05% on December 31, 2020 [122]. - The Tier 1 capital-to-average-total-assets (leverage) ratio was 14.15% as of June 30, 2021, down from 14.92% on December 31, 2020 [122]. - The risk-weighted Tier 1 capital ratio was 20.66% on June 30, 2021, compared to 20.25% on December 31, 2020 [122]. - The risk-weighted total capital ratio was 21.75% as of June 30, 2021, up from 21.40% on December 31, 2020 [122]. - A cash dividend of $0.55 per share was paid on February 17, 2021, to record holders of common stock [111]. - The company has repurchased a total of 12,268,401 shares at a cost of $357,102,000 under its stock repurchase programs as of August 2, 2021 [112]. - The company is involved in various legal proceedings, but any material loss is considered remote and not material to its financial position [113][114]. Fair Value Measurements - The fair value measurements hierarchy includes Level 1, Level 2, and Level 3 inputs, with specific classifications for financial instruments [37]. - The fair value of residential mortgage-backed securities was $4,123,636,000, while available-for-sale debt securities totaled $4,178,017,000 [36]. - The fair value of Watch List-Doubtful loans as of June 30, 2021 was $144,000, with a net provision (credit) during the period of $29,000 [39]. - The fair value of other real estate owned as of June 30, 2021 was $1,980,000, with a net provision (credit) during the period of $2,065,000 [39]. - The carrying amount of fixed-rate performing loans was $1,664,177,000 as of June 30, 2021, down from $1,812,413,000 as of December 31, 2020, indicating a decrease of about 8.15% [50]. - The estimated fair value of fixed-rate performing loans was $1,610,401,000 as of June 30, 2021, compared to $1,747,257,000 as of December 31, 2020, reflecting a decline of approximately 7.83% [50]. - The carrying amount of time deposits was $2,143,987,000 as of June 30, 2021, slightly down from $2,153,541,000 as of December 31, 2020, a decrease of about 0.44% [53]. - The estimated fair value of time deposits was $2,141,515,000 as of June 30, 2021, compared to $2,148,976,000 as of December 31, 2020, indicating a decline of approximately 0.34% [53]. - The fair value of fixed-rate long-term borrowings from the Federal Home Loan Bank was estimated at $475,671,000 as of June 30, 2021, compared to $480,475,000 as of December 31, 2020, reflecting a decrease of about 1.68% [56]. - The company recognized net gains of $11,000 on equity securities during the three months ended June 30, 2021, but reported net losses of $65,000 for the six months ended June 30, 2021 [103]. - The total unrecognized stock-based compensation cost related to non-vested options was approximately $982,000, expected to be recognized over a weighted average period of 1.6 years [91]. - The aggregate intrinsic value of options outstanding at June 30, 2021, was $8,066,000 [91]. - No debt securities in an unrealized loss position were attributed to credit-related reasons, resulting in no allowances recorded for the period [92]. - The company recorded $1,915,000 in adjustments to fair value in connection with other real estate owned for the three months ended June 30, 2021 [43].

Financial Statements - The consolidated financial statements include the accounts of International Bancshares Corporation and its wholly-owned subsidiary banks, with adjustments deemed necessary for fair presentation[30]. - The company applies the provisions of FASB ASC 280 for segment reporting, operating as one segment with five active subsidiary banks[31]. - The company did not have any material recognizable or non-recognizable subsequent events through the date of issuing the financial statements[32]. Fair Value of Securities - As of March 31, 2021, the fair value of available-for-sale debt securities was approximately $4.06 billion, with $3.06 billion in residential mortgage-backed securities[36]. - As of December 31, 2020, the fair value of available-for-sale securities was approximately $3.09 billion, with $3.03 billion in residential mortgage-backed securities[37]. - The fair value measurements hierarchy includes Level 1 inputs (quoted prices in active markets) and Level 2 inputs (observable inputs other than Level 1)[35]. - The estimated fair value of available-for-sale debt investment securities pledged for fiduciary powers was $1,274,911,000 at March 31, 2021[95]. - The amortized cost of available-for-sale debt securities was $4,034,746,000, with gross unrealized gains of $31,741,000 and gross unrealized losses of $9,130,000[90]. - The company evaluated its debt securities and determined that no unrealized losses were considered other-than-temporarily impaired[99]. - No allowances for debt securities in an unrealized loss position were recorded for the period, as no losses were attributed to credit-related reasons[90]. Loan Portfolio and Credit Quality - As of March 31, 2021, total loans amounted to $7,462,358,000, a decrease from $7,541,754,000 as of December 31, 2020, representing a decline of approximately 1.05%[59]. - The carrying amount of fixed-rate performing loans was $1,772,056,000 as of March 31, 2021, down from $1,812,413,000 as of December 31, 2020, indicating a decrease of about 2.22%[48]. - The estimated fair value of fixed-rate performing loans was $1,714,645,000 as of March 31, 2021, compared to $1,747,257,000 as of December 31, 2020, reflecting a decline of approximately 1.87%[48]. - The total balance of loans individually evaluated for impairment was $2,681,000 as of March 31, 2021, compared to $19,447,000 at December 31, 2020[74]. - The total balance of loans collectively evaluated for impairment was $7,459,677,000 as of March 31, 2021, compared to $7,522,307,000 at December 31, 2020[75]. - The total non-accrual loans decreased to $2,895,000 as of March 31, 2021, from $19,822,000 at December 31, 2020[76]. - The credit quality of doubtful loans is assessed in weekly credit quality meetings, where collateral values are analyzed and appraisals are determined as necessary[40]. - The allowance for credit loan losses included $21,954,000 for domestic commercial loans as of March 31, 2021[74]. - The allowance for credit losses (ACL) was deemed adequate by management as of March 31, 2021, to cover probable losses[79]. Allowance for Credit Losses - The adoption of the new accounting standard ASU 2016-13 increased the allowance for probable loan losses by approximately 17.2%, resulting in a cumulative-effect adjustment to retained earnings of about $8.3 million, net of tax[34]. - The total allowance for credit loan losses was $108,408,000, a decrease from $109,059,000 at December 31, 2020[72]. - The credit loss expense charged to operations for the three months ended March 31, 2021, was $1,192,000, a decrease compared to $16,836,000 for the same period in 2020[73]. - The company utilizes a loss-rate methodology for estimating the ACL, which measures lifetime losses on loan pools with similar risk characteristics[60]. Capital and Dividends - As of March 31, 2021, the total outstanding Capital and Common Securities qualified as Tier 1 capital amounted to $134,642,000[104]. - The CET1 to risk-weighted assets ratio was 19.27% on March 31, 2021, compared to 19.05% on December 31, 2020[115]. - The Tier 1 capital-to-average-total-assets (leverage) ratio was 14.52% on March 31, 2021, down from 14.92% on December 31, 2020[115]. - The risk-weighted Tier 1 capital ratio was 20.44% as of March 31, 2021, compared to 20.25% on December 31, 2020[115]. - The risk-weighted total capital ratio was 21.58% on March 31, 2021, compared to 21.40% on December 31, 2020[115]. - A cash dividend of $0.55 per share was paid on February 17, 2021, to record holders of common stock[106]. - The company extended its stock repurchase program to purchase up to $50 million of common stock during the 12-month period commencing on March 17, 2021[107]. - As of May 3, 2021, a total of 12,268,401 shares had been repurchased at a cost of $357,102,000[107]. Legal Proceedings - The company is involved in various legal proceedings, but any material loss is considered remote[108]. - The company believes it meets all capital adequacy requirements as of March 31, 2021[117]. Stock-Based Compensation - Stock-based compensation expense for Q1 2021 was $159,000, down from $219,000 in Q1 2020[87]. - As of March 31, 2021, there were 574,339 options outstanding with a weighted average exercise price of $27.92[87]. - The company has approximately $1,095,000 of total unrecognized stock-based compensation cost related to non-vested options[87]. - The company has 800,000 shares available for stock option grants under the 2012 Plan[86]. - Options fully vested and exercisable at March 31, 2021, totaled 342,257 with an intrinsic value of $7,928,000[87].