International Bancshares (US:IBOC)2024-08-01 18:26Financial 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].