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, 2020 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 (Exact Name of Registrant as Specified in its Charter) Texas (State or other Jurisdi ...

Accounting Standards and Financial Reporting - The adoption of ASU 2016-02 resulted in a right of use asset and lease liability of approximately $6.4 million as of January 1, 2019[35]. - Amortization of the right of use asset for the three months ended September 30, 2020 was $340,000, compared to $267,000 for the same period in 2019[36]. - The adoption of ASU 2016-13 increased the allowance for probable loan losses by approximately 17.2%, resulting in a cumulative-effect adjustment to retained earnings of approximately $8.3 million, net of tax[37]. - The financial statements are unaudited but include all necessary adjustments for fair presentation[32]. - The company adopted ASU 2016-13 on January 1, 2020, transitioning from an incurred loss model to an expected credit loss model, significantly affecting the provision for loan losses[83]. Loan and Credit Losses - The total loans increased to $7,589,235,000 as of September 30, 2020, up from $6,894,946,000 as of December 31, 2019, representing an increase of approximately 10.1%[64]. - The allowance for credit loan losses increased to $102,165,000 as of September 30, 2020, from $94,554,000 at June 30, 2020, reflecting a growth of approximately 8.5%[81]. - The provision charged to operations for the three months ended September 30, 2020, was $8,770,000, compared to a net recovery of $1,159,000 in the previous quarter, indicating a significant increase in provisions[81]. - The company has identified various risk factors affecting loan repayment, including cost overruns and market value deterioration in construction and land development loans[69]. - The company evaluates loans classified as Watch List—Doubtful using the fair value of collateral method, with specific reserves allocated as necessary[76]. - The total recorded investment in loans was $7,585,958,000 with an allowance of $101,684,000[85]. - The total non-accrual loans amounted to $3,761,000 as of September 30, 2020, a decrease from $4,886,000 at December 31, 2019[87]. - The company identified doubtful loans totaling $3,277,000 as of September 30, 2020, with a related allowance of $481,000[85]. Investment Securities - As of September 30, 2020, total investment securities amounted to $3,298,840,000, with available-for-sale debt securities valued at $3,257,601,000[104]. - The company reported gross unrealized losses on available-for-sale debt securities of $4,083,000, with residential mortgage-backed securities contributing $4,069,000 to this total[111]. - The amortized cost of available-for-sale debt investment securities pledged for fiduciary powers was $1,116,960,000, with an estimated fair value of $1,131,366,000 at September 30, 2020[108]. - The company has no intent to sell and is unlikely to be required to sell residential mortgage-backed securities before market price recovery, indicating no other-than-temporary impairment[111]. Capital and Dividends - The company has a CET1 to risk-weighted assets ratio of 18.57% as of September 30, 2020, compared to 18.58% on December 31, 2019[130]. - The company paid cash dividends of $0.55 per share on April 3 and October 5, 2020[120]. - A total of 12,267,402 shares had been repurchased under all programs at a cost of $357,054,000 as of November 3, 2020[122]. - The Capital and Common Securities issued by the Trusts qualify as Tier 1 capital up to a maximum of 25% of Tier 1 capital on an aggregate basis[118]. Economic Conditions and Impact - The provision charged to operations for the nine months ended September 30, 2020, was $36,595,000, reflecting a proactive approach to managing credit risk[81]. - The provision charged to operations for the nine months ended September 30, 2020, was $15,363,000, reflecting the impact of deteriorating economic conditions due to COVID-19[83]. - The company anticipates that approximately 17% of loans in deferral programs will request additional relief, particularly from sectors heavily impacted by COVID-19[91]. Legal and Regulatory Matters - The company is involved in various legal proceedings, but any material loss is considered remote[123]. - The capital conservation buffer is designed to absorb losses during periods of economic stress, with the company exceeding all capital adequacy requirements under the Basel III Capital Rules as of September 30, 2020[128].

Accounting Standards and Financial Reporting - The adoption of ASU 2016-02 resulted in a right of use asset and lease liability of approximately $6.4 million as of January 1, 2019[34]. - The amortization of the right of use asset for the three and six months ended June 30, 2020 was $338,000 and $658,000 respectively[34][35]. - The adoption of ASU 2016-13 increased the allowance for probable loan losses by approximately 17.2%, resulting in a cumulative-effect adjustment to retained earnings of approximately $8.3 million, net of tax[36]. - The consolidated financial statements are unaudited but include all necessary adjustments for fair presentation[31]. - The financial statements should be read in conjunction with the latest Annual Report on Form 10-K for complete information[31]. - The company applies the provisions of FASB ASC 280 for determining reportable segments and related disclosures[32]. Loan and Credit Losses - The allowance for credit losses (ACL) is based on a loss-rate methodology that measures lifetime losses on loan pools with similar risk characteristics[66]. - The allowance for credit loan losses increased to $94,554,000 as of June 30, 2020, up from $85,273,000 at March 31, 2020, reflecting a rise of approximately 10.4%[80]. - The provision charged to operations for the three months ended June 30, 2020, was $10,989,000, compared to $2,665,000 for the same period in 2019, indicating a significant increase in provisions[80]. - The total losses charged to the allowance for the six months ended June 30, 2020, amounted to $5,322,000, indicating a substantial impact on the allowance due to credit losses[80]. - The company recorded recoveries credited to the allowance of $634,000 for the three months ended June 30, 2020, compared to $552,000 for the same period in 2019, reflecting an increase in recoveries[80]. - The company identified doubtful loans totaling $3,478,000 as of June 30, 2020, with an allowance of $528,000[83]. - A specific reserve of $9,500,000 was placed on a relationship classified as doubtful due to significant fraud leading to bankruptcy[82]. - The company adopted the expected credit loss model on January 1, 2020, transitioning from the incurred loss model[82]. Loan Portfolio and Performance - The total loans increased to $7,501,807,000 as of June 30, 2020, up from $6,894,946,000 as of December 31, 2019, representing an increase of approximately 8.8%[63]. - The total loan portfolio amounted to $2,090,901,000, a decrease from $2,347,379,000 in 2019, representing a decline of approximately 10.9%[93]. - The commercial loan category showed a total of $982,334,000, down from $1,228,110,000 in 2019, indicating a decrease of about 19.9%[94]. - The residential first lien loans totaled $41,957,000, compared to $71,159,000 in 2019, reflecting a decline of approximately 41.2%[94]. - The total non-accrual loans as of June 30, 2020, were $4,102,000, a decrease from $4,886,000 as of December 31, 2019[84]. - The company has approximately $1,853,640,000 in loans with some degree of payment deferrals due to the COVID-19 economic crisis[87]. - Total past due loans as of June 30, 2020, reached $109,367,000, compared to $84,450,000 as of December 31, 2019, indicating an increase in delinquency[92]. Investment Securities - As of June 30, 2020, the total investment securities amounted to $3,097,734,000, with residential mortgage-backed securities contributing $3,023,413,000 to this total[102]. - The amortized cost of available-for-sale debt securities pledged for fiduciary powers was $1,151,578,000, with an estimated fair value of $1,170,646,000 at June 30, 2020[104]. - The gross unrealized losses on available-for-sale debt investment securities totaled $3,630,000 as of June 30, 2020, with residential mortgage-backed securities accounting for $3,617,000 of this loss[106]. - The company has no intent to sell residential mortgage-backed securities, which are primarily affected by changes in market interest rates, indicating a long-term investment strategy[106]. Capital and Dividends - Cash dividends of $0.55 per share were paid on April 3, 2020, to common stockholders[116]. - The company authorized a stock repurchase program of up to $50 million starting March 16, 2020[117]. - A total of 12,267,402 shares had been repurchased at a cost of $357,054,000 as of August 4, 2020[118]. - The company believes it meets all capital adequacy requirements as of June 30, 2020[128]. Economic Conditions and Risks - Construction and land development loans carry repayment risks due to cost overruns, increased construction material prices, and market value deterioration[68]. - Commercial real estate loans are affected by market value declines and business turnover, with risks associated with specific local economic conditions[69]. - 1-4 family mortgages may face repayment challenges due to unemployment and declining real estate market values[70]. - Consumer loans, including unsecured loans, are primarily impacted by unemployment or underemployment[71]. - The company’s management believes the allowance for credit losses (ACL) at June 30, 2020, was adequate to absorb probable losses from loans in the portfolio[90].

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, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to INTERNATIONAL BANCSHARES CORPORATION (Exact name of registrant as specified in its charter) incorporation or organization) Texas 74-2157138 (State or other jurisdicti ...

Employment and Operations - As of December 31, 2019, the company employed approximately 2,869 full-time and 445 part-time employees[21] - The company operates 188 facilities and 284 ATMs serving 88 communities in Texas and Oklahoma[18] - The company focuses on providing commercial banking services to small and medium-sized businesses, as well as consumer and retail banking[18] Customer Deposits - Deposits from customers domiciled in Mexico comprised approximately 29%, 29%, and 27% of the total deposits for the years ended December 31, 2019, 2018, and 2017, respectively[24] Customer Service and Technology - The company has a strong commitment to customer service, represented by the motto "We Do More"[13] - The company has introduced IBC Bank Online and IBC Mobile Banking to provide customers with 24/7 access to banking services[20] Regulatory Compliance - The company is subject to extensive regulation by the Federal Reserve Board and the FDIC, impacting its operations and financial condition[27] - The company must comply with NASDAQ listing standards, which include quantitative and qualitative requirements related to disclosure and corporate governance[56] - The company is required to maintain adequate capital above regulatory minimums to pay dividends, with the FRB discouraging high dividend payment ratios unless asset quality and capital are strong[60] - The company is required to act as a source of strength to its subsidiary banks, committing resources even when not in a strong financial position[64] - The company must adhere to the Foreign Account Tax Compliance Act (FATCA), which requires U.S. financial institutions to report on U.S. account holders at foreign financial institutions[44] - The company is subject to economic sanctions enforced by the Office of Foreign Assets Control (OFAC), which can have serious legal and reputational consequences for non-compliance[45] Capital and Financial Position - As of December 31, 2019, the company's Tier 1 leverage ratio was 16.65%, significantly above the minimum requirement of 4%[71] - The company and its Subsidiary Banks were classified as "well-capitalized" under Basel III capital rules, with a total risk-based capital ratio of 10% or greater[73][97] - The minimum capital ratios required under Basel III include 4.5% CET1 to risk-weighted assets, 6.0% Tier 1 capital to risk-weighted assets, and 8.0% total capital to risk-weighted assets, plus a capital conservation buffer of at least 2.5%[84] - The capital conservation buffer was phased in to reach 2.5% by January 1, 2019, enhancing the company's capital position during economic stress[86] - The Basel III capital rules introduced a new capital measure, Common Equity Tier 1 (CET1), emphasizing the importance of common equity in capital adequacy[75][76] - The company opted out of including most Accumulated Other Comprehensive Income (AOCI) items in the calculation of CET1 capital, affecting its legal lending limit calculation[83] - The Basel III framework requires a standardized approach for risk weightings, expanding categories from four to a more sensitive range based on asset nature[87] - The company does not have any Tier 3 capital and did not require it to offset market risks, indicating a strong capital position[74] - The Basel III capital rules mandate that banks maintain higher capital levels during economic expansions and lower levels during contractions, promoting stability[74] - As of December 31, 2019, all Subsidiary Banks maintained a leverage ratio in excess of 5%, ensuring compliance with regulatory capital requirements[72] Loan Losses and Accounting Standards - The adoption of the FASB CECL Accounting Standard is expected to increase the allowance for probable loan losses by approximately 2% to 6%[104] - The allowance for probable loan losses is subject to significant estimates and assumptions, which may lead to adverse effects on financial condition if future charge-offs exceed the allowance[140] - The adoption of ASU 2016-13 is expected to increase the allowance for probable loan losses by approximately 2% to 6%[141] Competition and Market Risks - The company faces significant competition from various financial institutions, including fintechs, which may impact revenue streams and deposit levels[143] - The transition from LIBOR could create considerable costs and additional risks, affecting the company's market risk profiles and requiring changes to pricing models[150] - Interest rate risk is a significant concern, as changes in rates could negatively influence net interest income and overall earnings[145] Internal Controls and Financial Reporting - The company maintained effective internal control over financial reporting as of December 31, 2019, based on criteria established by the Committee of Sponsoring Organizations of the Treadway Commission[195] - The independent registered public accounting firm expressed an unqualified opinion on the effectiveness of the company's internal controls over financial reporting as of December 31, 2019[196] - Management assessed the effectiveness of internal controls over financial reporting and determined they were effective as of December 31, 2019[190] - The company’s management is responsible for establishing and maintaining adequate internal controls over financial reporting[189] - The company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting[199] - The company’s management determined that the risk of material weakness in internal controls is low based on their assessment[190] Legal and Environmental Risks - The company is involved in various legal proceedings, but any material loss is considered remote and not material to the consolidated financial position[178] - Environmental liabilities from lending activities could result in substantial remediation costs and negatively impact financial condition[159] Business Continuity and External Factors - External events like severe weather or natural disasters could significantly disrupt business operations and impact financial stability[157] - The company must adapt to rapid changes in the financial services industry to maintain competitive performance and avoid revenue loss[167] Leadership and Governance - The company relies heavily on its CEO, Dennis E. Nixon, for leadership, and his departure could adversely affect business prospects[153] - Acquisitions and branch expansion are crucial for growth but face challenges from competition and regulatory approvals[152] Funding and Liquidity - The company relies on external funding sources for liquidity, and any inability to access these sources could adversely impact financial condition and operations[144] - Access to additional capital may be limited during market volatility, impacting liquidity and the ability to meet customer needs[155] - The holding company primarily depends on dividends from Subsidiary Banks, which are subject to regulatory limitations and could affect common stock dividends[156] Compliance with Consumer Protection Laws - The CFPB's authority to issue and enforce federal consumer protection laws significantly impacts the consumer compliance programs of the subsidiary banks[112] - The Military Lending Act requires lenders to cap the Military Annual Percentage Rate for covered credit products at 36%[114] - The CFPB amended mortgage servicing rules, clarifying provisions regarding force-placed insurance notices and early intervention requirements[125] Cybersecurity and Data Protection - The NIST Cybersecurity Framework is expected to be incorporated into the security frameworks of subsidiary banks, governed by FFIEC guidelines[118] - The Texas data breach notification law was amended to limit the timeframe for notifying individuals whose data has been compromised[119] - The company may face significant risks from potential disruptions or breaches in its information systems, which could lead to unauthorized access to sensitive customer information[154]

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 September 30, 2019 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 ...

Financial Position - As of June 30, 2019, the fair value of residential mortgage-backed securities was $3,340,220,000, while available-for-sale debt securities totaled $3,474,040,000[39]. - The total fair value of available-for-sale securities as of December 31, 2018 was $3,417,287,000, including residential mortgage-backed securities valued at $3,223,010,000[42]. - The total investment securities at June 30, 2019, were valued at $3,467,913,000, with residential mortgage-backed securities comprising $3,340,220,000 of this total[92]. - The total investment securities at December 31, 2018, were valued at $3,411,350,000, indicating a growth in value by June 30, 2019[93]. - The estimated fair value of investment securities held to maturity was $2,400,000 as of June 30, 2019[92]. Loan Performance - The total loans increased to $6,842,701,000 as of June 30, 2019, compared to $6,561,289,000 as of December 31, 2018, reflecting a growth of approximately 4.3%[65]. - The company maintains a diversified loan portfolio, with commercial loans comprising $3,452,170,000 and real estate loans totaling $3,195,640,000 as of June 30, 2019[65]. - The total balance of the allowance for loan losses at June 30, 2019, was comprised of $58,203 thousand, which reflects the company's ongoing risk management strategies[69]. - The company identified impaired loans totaling $23,707,000 as of June 30, 2019, with a related allowance of $1,699,000[75]. - Total non-accrual loans as of June 30, 2019, amounted to $15,718,000, slightly down from $15,791,000 at December 31, 2018[74]. Allowance for Loan Losses - The allowance for probable loan losses included charges of $9,500,000 for the three and six months ended June 30, 2019, related to the deterioration of one loan relationship[47]. - The allowance for probable loan losses decreased from $67,030 thousand at March 31, 2019, to $58,203 thousand at June 30, 2019, reflecting a reduction of approximately 13.2%[69]. - The provision charged to operations for the three months ended June 30, 2019, was $2,665 thousand, compared to a provision of $(2,730) thousand for the same period in 2018, indicating a significant improvement[69]. - The provision for loan losses for the six months ended June 30, 2019, was $10,085 thousand, compared to $(2,730) thousand for the same period in 2018, indicating a shift in credit loss expectations[69]. - Management believes the allowance for probable loan losses at June 30, 2019, was adequate to absorb probable losses from loans in the portfolio[81]. Capital Adequacy - The total amount of Capital and Common Securities outstanding qualified as Tier 1 capital, totaling $134,642,000 as of June 30, 2019[109]. - The Common Equity Tier 1 (CET1) to risk-weighted assets ratio was 17.82%, compared to 17.55% on December 31, 2018[120]. - The Tier 1 capital-to-average-total-assets (leverage) ratio was 16.03% as of June 30, 2019, up from 15.87% at the end of 2018[120]. - The risk-weighted Tier 1 capital ratio was 19.04% on June 30, 2019, slightly down from 19.06% on December 31, 2018[120]. - The capital conservation buffer, which began phasing in on January 1, 2016, requires a minimum CET1 capital ratio of at least 7% upon full implementation[118]. Stock and Dividends - Cash dividends of $0.50 per share were paid on April 15, 2019, compared to $0.33 per share paid on April 16, 2018[111]. - A total of 9,803,514 shares had been repurchased at a cost of $311,433,000 as of August 5, 2019[112]. - The company has established a stock repurchase program with an authorization to purchase up to $50 million of common stock during the 12-month period commencing April 9, 2019[111]. - The company has approximately $2,336,000 of total unrecognized stock-based compensation cost related to non-vested options that will be recognized over a weighted average period of 1.9 years[89]. - The company reported stock-based compensation expenses of $239,000 for the three months ended June 30, 2019, compared to $286,000 for the same period in 2018[89]. Risk Management - The company’s management continually reviews the allowance for loan losses based on specific impaired loans and historical loss experience, indicating a proactive approach to risk management[66]. - The company has a structured approach to monitor loans classified as "Special Review Credits," "Watch List-Pass Credits," and "Watch List-Substandard Credits" to manage potential risks[84]. - Specific reserves for impaired loans are allocated based on the present value of expected future cash flows, observable market price, or fair value of collateral[85]. - The company recognizes risks associated with impaired loans but is confident in reducing loss exposure through strong borrower financials and collateral[78]. - The fair value estimates are subjective and depend on various factors, including economic conditions and credit quality indicators, which could significantly affect future provisions for loan losses[62].

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, 2019 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) Texas 74-2157138 (State or other jurisdic ...

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, 2018 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 (Exact Name of Registrant as Specified in its Charter) Texas (State or other jurisdi ...