INTERNATIONAL BANCSHARES CORP [IBOC] Filings

10-Q 1 iboc-20230930x10q.htm 10-Q

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, 2023

☐

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 jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

1200 San Bernardo Avenue, Laredo, Texas 78042-1359

(Address of principal executive offices)

(Zip Code)

(956) 722-7611

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:	Trading Symbol	Name of each exchange on which registered:
Common Stock, $1.00 par value	IBOC	NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark if the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company, in Rule 12b-2 of the Exchange Act.


Large accelerated filer ⌧		Accelerated filer ◻

Non-accelerated filer ◻		Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date


Class		Shares Issued and Outstanding
Common Stock, $1.00 par value		62,058,463 shares outstanding at October 30, 2023

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

INTERNATIONAL BANCSHARES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Condition (Unaudited)

(Dollars in Thousands)


	September 30,		December 31,
	2023		2022
Assets
Cash and cash equivalents	$	698,611	$	2,087,724
Investment securities:
Held to maturity debt securities (Market value of $3,400 on September 30, 2023 and $3,400 on December 31, 2022)		3,400		3,400
Available for sale debt securities (Amortized cost of $5,388,257 on September 30, 2023 and $5,018,996 on December 31, 2022)		4,691,938		4,417,796
Equity securities with readily determinable fair values		5,158		5,358
Total investment securities		4,700,496		4,426,554
Loans		7,896,899		7,430,603
Less allowance for credit losses		(149,006)		(125,972)
Net loans		7,747,893		7,304,631
Bank premises and equipment, net		434,258		431,612
Accrued interest receivable		57,659		45,787
Other investments		368,690		358,910
Cash surrender value of life insurance policies		303,752		300,589
Goodwill		282,532		282,532
Other assets		314,051		263,137
Total assets	$	14,907,942	$	15,501,476

INTERNATIONAL BANCSHARES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Condition, continued (Unaudited)

(Dollars in Thousands)


	September 30,		December 31,
	2023		2022
Liabilities and Shareholders’ Equity
Liabilities:
Deposits:
Demand—non-interest bearing	$	5,216,418	$	5,846,055
Savings and interest bearing demand		4,357,335		4,745,768
Time		2,342,856		2,068,184
Total deposits		11,916,609		12,660,007
Securities sold under repurchase agreements		504,281		431,191
Other borrowed funds		10,796		10,944
Junior subordinated deferrable interest debentures		108,868		134,642
Other liabilities		173,777		219,933
Total liabilities		12,714,331		13,456,717
Shareholders’ equity:
Common shares of $1.00 par value. Authorized 275,000,000 shares; issued 96,444,492 shares on September 30, 2023 and 96,420,456 shares on December 31, 2022		96,444		96,420
Surplus		154,946		154,061
Retained earnings		2,922,712		2,695,567
Accumulated other comprehensive loss		(545,212)		(470,497)
		2,628,890		2,475,551
Less cost of shares in treasury, 34,388,679 shares on September 30, 2023 and 34,278,617 on December 31, 2022		(435,279)		(430,792)
Total shareholders’ equity		2,193,611		2,044,759
Total liabilities and shareholders’ equity	$	14,907,942	$	15,501,476

See accompanying notes to consolidated financial statements.

INTERNATIONAL BANCSHARES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)

(Dollars in Thousands, except per share data)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Interest income:
Loans, including fees	$	158,534	$	104,818	$	453,700	$	273,936
Investment securities:
Taxable		34,598		20,718		96,582		50,846
Tax-exempt		1,561		625		4,708		1,326
Other interest income		9,482		18,926		35,458		24,995
Total interest income		204,175		145,087		590,448		351,103

Interest expense:
Savings deposits		15,042		3,323		41,514		5,720
Time deposits		15,610		2,530		34,067		7,311
		4,143		665		9,580		1,090
Other borrowings		71		1,926		213		5,721
Junior subordinated deferrable interest debentures		1,981		1,426		6,106		3,097

Total interest expense		36,847		9,870		91,480		22,939

Net interest income		167,328		135,217		498,968		328,164

Credit loss expense		10,476		8,525		27,879		13,741

Net interest income after provision for credit losses		156,852		126,692		471,089		314,423

Non-interest income:
Service charges on deposit accounts		19,311		19,038		54,939		54,543
Other service charges, commissions and fees
Banking		14,314		15,995		42,761		41,446
Non-banking		2,302		2,618		6,837		6,425
Investment securities transactions, net		(3)		—		(3)		—
Other investments income, net		3,598		6,962		3,653		11,063
Other income		5,863		9,989		15,262		27,879

Total non-interest income	$	45,385	$	54,602	$	123,449	$	141,356

INTERNATIONAL BANCSHARES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income, continued (Unaudited)

(Dollars in Thousands, except per share data)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Non-interest expense:
Employee compensation and benefits	$	34,773	$	34,341	$	100,926	$	96,505
Occupancy		6,268		7,821		18,598		20,282
Depreciation of bank premises and equipment		5,488		5,425		16,362		16,355
Professional fees		4,123		3,087		11,051		8,347
Deposit insurance assessments		1,744		2,026		7,575		5,062
Net operations, other real estate owned		(1,638)		(253)		(3,278)		(708)
Advertising		1,360		1,476		3,913		4,371
Software and software maintenance		5,081		4,089		14,978		12,638
Other		14,001		17,161		36,638		45,195

Total non-interest expense		71,200		75,173		206,763		208,047

Income before income taxes		131,037		106,121		387,775		247,732

Provision for income taxes		27,773		22,765		82,383		52,912

Net income	$	103,264	$	83,356	$	305,392	$	194,820

Basic earnings per common share:

Weighted average number of shares outstanding		62,653,563		62,226,521		62,089,779		62,838,831
Net income per common share	$	1.66	$	1.34	$	4.92	$	3.10

Fully diluted earnings per common share:

Weighted average number of shares outstanding		62,195,486		62,371,475		62,227,379		62,980,934
Net income per common share	$	1.66	$	1.34	$	4.91	$	3.09

See accompanying notes to consolidated financial statements.

INTERNATIONAL BANCSHARES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in Thousands)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022

Net income	$	103,264	$	83,356	$	305,392	$	194,820
Other comprehensive loss, net of tax:

Net change in unrealized holding losses on securities available for sale arising during period (net of tax effects of $(16,721), $(47,326), $(19,862) and $(112,388))		(62,902)		(178,037)		(74,717)		(422,792)
Reclassification adjustment for losses on securities available for sale included in net income (net of tax effects of $1, $0, $1 and $0)		2		—		2		—
		(62,900)		(178,037)		(74,715)		(422,792)

Comprehensive income (loss)	$	40,364	$	(94,681)	$	230,677	$	(227,972)

See accompanying notes to consolidated financial statements.

INTERNATIONAL BANCSHARES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Shareholders’ Equity

Three and Nine Months ended September 30, 2023 and 2022

(in Thousands, except per share amounts)


	Number							Other
	of	Common				Retained		Comprehensive		Treasury
	Shares	Stock		Surplus		Earnings		Income (Loss)		Stock		Total
Balance at June 30, 2023	96,432	$	96,432	$	154,522	$	2,858,544	$	(482,312)	$	(435,195)	$	2,191,991
Net income	—		—		—		103,264		—		—		103,264
Dividends:
Payable ($.63 per share)	—		—		—		(39,096)		—		—		(39,096)
Purchase of treasury stock (2,000 shares)	—		—		—		—		—		(84)		(84)
Exercise of stock options	12		12		348		—		—		—		360
Stock compensation expense recognized in earnings	—		—		76		—		—		—		76
Other comprehensive loss, net of tax:
Net change in unrealized gains and losses on available for sale securities, net of reclassification adjustments	—		—		—		—		(62,900)		—		(62,900)
Balance at September 30, 2023	96,444	$	96,444	$	154,946	$	2,922,712	$	(545,212)	$	(435,279)	$	2,193,611


	Number							Other
	of	Common				Retained		Comprehensive		Treasury
	Shares	Stock		Surplus		Earnings		Income (Loss)		Stock		Total
Balance at June 30, 2022	96,368	$	96,368	$	152,743	$	2,544,148	$	(276,735)	$	(419,293)	$	2,097,231
Net income	—		—		—		83,356		—		—		83,356
Dividends:
Payable ($.60 per share)	—		—		—		(37,349)		—		—		(37,349)
Purchase of treasury stock (283,270 shares)	—		—	—	—	—	—	—	—		(11,390)		(11,390)
Exercise of stock options	17		17		328		—		—		—		345
Stock compensation expense recognized in earnings	—		—		118		—		—		—		118
Other comprehensive loss, net of tax:
Net change in unrealized gains and losses on available for sale securities, net of reclassification adjustments	—		—		—		—		(178,037)		—		(178,037)
Balance at September 30, 2022	96,385	$	96,385	$	153,189	$	2,590,155	$	(454,772)	$	(430,683)	$	1,954,274


	Number							Other
	of	Common				Retained		Comprehensive		Treasury
	Shares	Stock		Surplus		Earnings		Income (Loss)		Stock		Total
Balance at December 31, 2022	96,420	$	96,420	$	154,061	$	2,695,567	$	(470,497)	$	(430,792)	$	2,044,759
Net income	—		—		—		305,392		—		—		305,392
Dividends:

INTERNATIONAL BANCSHARES CORP [IBOC] Filings
10-Q	[2023-11-02]
10-Q	[2023-08-03]
10-Q	[2023-05-04]
10-K	[2023-02-23]
10-Q	[2022-11-03]
10-Q	[2022-08-04]
10-Q	[2022-05-05]
10-K	[2022-02-24]
10-Q	[2021-11-04]
10-Q	[2021-08-05]
10-Q	[2021-05-06]
10-K	[2021-02-25]
10-Q	[2020-11-05]
10-Q	[2020-08-06]
10-Q	[2020-05-07]
10-K	[2020-02-27]
10-Q	[2019-11-06]
10-Q	[2019-08-08]
10-Q	[2019-05-09]
10-K	[2019-02-27]
10-Q	[2018-11-07]
10-Q	[2018-08-07]
10-Q	[2018-05-08]
10-K	[2018-02-28]
10-Q	[2017-11-08]
10-Q	[2017-08-07]
10-Q	[2017-05-08]
10-K	[2017-02-27]
10-Q	[2016-11-07]
10-Q	[2016-08-05]
10-Q	[2016-05-09]
10-K	[2016-02-26]
10-Q	[2015-11-06]
10-Q	[2015-08-07]
10-Q	[2015-05-08]
10-K	[2015-02-27]
10-Q	[2014-11-10]
10-Q	[2014-08-11]
10-Q	[2014-05-05]
10-K	[2014-02-24]
10-Q	[2013-11-06]
10-Q	[2013-08-05]
10-Q	[2013-05-09]
10-K	[2013-02-25]
10-Q	[2012-11-05]
10-Q	[2012-08-06]
10-Q	[2012-05-07]
10-K	[2012-02-27]