IBC Reports 2020 Earnings

Rhea-AI Summary

International Bancshares Corporation (NASDAQ:IBOC) reported a net income of $167.3 million for 2020, reflecting a 16% decrease in diluted earnings per share to $2.62 compared to $3.12 in 2019. The fourth quarter net income was $48.2 million, down 6.8% year-over-year. The decline is attributed to increased provision for credit losses of $35.8 million amid COVID-19 and lower interest income due to reduced market rates. Total assets grew to $14.0 billion from $12.1 billion, while total deposits increased to $10.7 billion from $8.8 billion.

Positive

• Total assets increased to $14.0 billion in 2020, up from $12.1 billion in 2019.
• Total deposits rose to $10.7 billion, an increase from $8.8 billion in the previous year.
• The company's strong capital position and liquidity provide confidence amid uncertainty.

Negative

• Net income decreased by 18.4% from 2019, impacting diluted earnings per share.
• The provision for credit losses rose significantly to $35.8 million due to economic downturn.
• Low interest rates drove down interest income to $427.0 million from $492.4 million in 2019.

International Bancshares Corporation (NASDAQ:IBOC), one of the largest independent bank holding companies in Texas, today reported annual net income for 2020 of $167.3 million or $2.62 diluted earnings per common share ($2.63 per share basic) compared to $205.1 million or $3.12 diluted earnings per common share ($3.13 per share basic), which represents a decrease of 16.0 percent in diluted earnings per share and an 18.4 percent decrease in net income over the corresponding period in 2019. Net income for the three months ended December 31, 2020 was $48.2 million or $.76 diluted earnings per common share ($.76 per share basic), compared to $51.7 million or $.78 diluted earnings per common share ($.79 per share basic) for the same period in 2019, representing a decrease of 6.8 percent in net income and a 2.6 percent decrease in diluted earnings per share.

Net income for the year ended December 31, 2020 continues to be impacted by our provision for credit losses arising from the economic downturn as a result of COVID-19, and the impact that downturn had on our allowance for credit loss calculation for the period. We adopted the provisions of ASU 2016-13 on January 1, 2020, resulting in a transition from the long-standing incurred loss model to an expected credit loss model that recognizes credit losses over the life of a financial asset. Under the new model, our provision for credit losses increased to $35.8 million, net of tax for the year ended December 31, 2020. Net income for the period also continues to be impacted by low market rates as a result of the Federal Reserve Board action that rapidly decreased interest rates in March 2020, driving interest income down, as well as a decline in non-interest income caused by lower transaction volumes as a result of the pandemic.

We continue to work with our customers to assist them through these difficult times on a case-by-case basis on temporary deferrals of interest and/or principal payments on loans. We took an active role in assisting customers in obtaining loans through the Small Business Administration’s Paycheck Protection Programs (“PPP programs”) and are now transitioning to helping those same customers submit forgiveness applications pursuant to the PPP programs.

International Bancshares Corporation and Subsidiaries Consolidated Financial Summary
		Years Ended December 31,
		2020		2019
		(Dollars in thousands, except per share data)
Interest income	$	427,008		$	492,401
Interest expense		(39,119)			(58,629)
Net interest income		387,889			433,772
Provision for probable loan losses		(45,379)			(18,843)
Non-interest income		150,579			154,826
Non-interest expense		(281,331)			(309,801)
Income before income taxes		211,758			259,954
Income taxes		(44,439)			(54,850)
Net income	$	167,319		$	205,104
Net income per common share
Basic	$	2.63		$	3.13
Diluted	$	2.62		$	3.12

“The global health crisis resulting from COVID-19 has continued to impact our business. The long-term impact is still unknown since future economic conditions remain unclear. The newly developed vaccines provide hope that the pandemic will end soon, but the timing remains to be seen since the vaccines are not yet widely available to most of the population,” said Dennis E. Nixon, president and CEO. “Despite these uncertain times, we continue to be confident in our exceptionally strong capital position, significant liquidity, strong relationship deposit base and responsive management strategies to guide us through the crisis, including a very focused effort to reduce expenses and increase efficiencies, all aimed at providing superior returns to our shareholders as we have for the past 55 years. We remain fully committed to making the best decisions possible as we navigate the effects of the crisis to protect the future of our Company for our customers, employees, and shareholders.”

Total assets at December 31, 2020 were $14.0 billion compared to $12.1 billion at December 31, 2019. Total net loans were $7.4 billion at December 31, 2020 compared to $6.8 billion at December 31, 2019. Deposits were $10.7 billion at December 31, 2020 compared to $8.8 billion at December 31, 2019.

IBC is a multi-bank financial holding company headquartered in Laredo, Texas, with 187 facilities and 282 ATMs serving 88 communities in Texas and Oklahoma.

“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts contain forward looking information with respect to plans, projections or future performance of IBC and its subsidiaries, the occurrence of which involve certain risks and uncertainties detailed in IBC’s filings with the Securities and Exchange Commission.

Copies of IBC’s SEC filings and Annual Report (as an exhibit to the 10-K) may be downloaded from the SEC filings site located at http://www.sec.gov/edgar.shtml.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210225006002/en/

FAQ

What is the net income for International Bancshares Corporation in 2020?

The net income for International Bancshares Corporation in 2020 was $167.3 million.

How did COVID-19 impact International Bancshares Corporation's financial performance?

COVID-19 led to an increased provision for credit losses and lower interest income, resulting in an overall profit decline.

What were the earnings per share for IBOC in 2020?

The diluted earnings per share for IBOC in 2020 were $2.62, down 16% from $3.12 in 2019.

How much did total assets grow for IBOC in 2020?

Total assets grew to $14.0 billion in 2020, compared to $12.1 billion in 2019.

What are the total deposits for International Bancshares Corporation as of December 31, 2020?

Total deposits as of December 31, 2020, were $10.7 billion, up from $8.8 billion in 2019.