International Bancshares (US:IBOC)2021-05-06 18:55Financial 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].