IBC’s Strong Earnings Continue in the First Quarter of 2024

Rhea-AI Summary

International Bancshares (NASDAQ:IBOC) reported net income of $97.3 million for Q1 2024, with diluted earnings per share at $1.56, representing a 4.3% decrease in earnings compared to the same period in 2023. Despite the decrease, the company's net income was positively impacted by an increase in interest income from investment and loan portfolios. However, an increase in interest expenses and provision for credit losses had a negative impact on net income. The company remains focused on delivering exceptional service and maintaining financial stability.

Positive

• Positive impact on net income from an increase in interest income on investment and loan portfolios

• Ranked first in S&P Global Market Intelligence best-performing Public Banks for 2023 and third in Forbes America's Best Banks listing

• Focus on delivering exceptional service and innovative products to customers

• Continued practices in balance sheet, asset liability, and liquidity management for financial stability

Negative

• 4.3% decrease in diluted earnings per share compared to Q1 2023

• 4.2% decrease in net income compared to the same period in 2023

• Negative impact on net income from an increase in interest expenses and provision for credit losses

Insights

Financial Analyst

International Bancshares Corporation's (IBC) first quarter earnings for 2024 exhibit a slight decline in both net income and diluted earnings per share compared to the same period last year. This decline could be attributed to various factors, including an increase in provision for credit losses due to a specific impaired credit incident. Despite this setback, it's noteworthy that the bank has managed an increase in interest income, which reflects a strategic response to the Federal Reserve's rate hikes. From an investment standpoint, the bank's asset growth—both in terms of total assets and loan portfolios—indicates a potential for future revenue growth. However, investors should also consider the increase in interest expense due to higher rates paid on deposits, which could squeeze net interest margins if deposit rates continue to rise. The bank's ranking in industry listings and focus on service and product innovation might sustain investor confidence by demonstrating management’s commitment to maintaining competitiveness. IBC's asset, liability and liquidity management practices could be vital in preserving stability in future quarters. The rating for this PR, from a financial perspective, is neutral given the mixed nature of the earnings report.

Market Research Analyst

The banking industry is heavily influenced by interest rate environments and IBC's strategic adjustments in response to rate hikes show a proactive stance. The bank's increase in net loans and deposits indicates customer confidence and potential for revenue from loan interests. However, the competitive banking landscape requires continuous innovation and service enhancement to retain and attract customers, areas in which IBC is focusing its efforts. Their recent accolades could be seen as a testament to their market position and operational excellence. For investors, the bank's strategic initiatives could be promising, but the pressure from rising interest costs remains a concern, which may influence long-term profitability. The overall impression for a retail investor is neutral, as IBC appears to be navigating the challenges with concerted strategies but faces industry-wide headwinds that may affect future performance.

LAREDO, Texas--(BUSINESS WIRE)-- International Bancshares Corporation (NASDAQ:IBOC), one of the largest independent bank holding companies in Texas, today reported net income for the three months ended March 31, 2024 of $97.3 million or $1.56 diluted earnings per common share ($1.57 per share basic) compared to $101.6 million or $1.63 diluted earnings per common share ($1.64 per share basic), which represents a decrease of 4.3% in diluted earnings per share and a 4.2% decrease in net income over the corresponding period in 2023.

Net income for the first quarter of 2024 continues to be positively impacted by an increase in interest income earned on our investment and loan portfolios. The increase in interest is being driven by both an increase in the size of our investment and loan portfolios as well as rate changes as a result of the Federal Reserve Board actions to raise interest rates in 2022 and 2023. Net interest income has been impacted by an increase in interest expense, primarily driven by increases in rates paid on deposits throughout the latter part of 2023. We continue to closely monitor and adjust rates paid on deposits to remain competitive in the current economic environment and retain deposits. Net income for the period was negatively impacted by an increase in our provision for credit losses, which was primarily impacted by a charge-down of an impaired credit after the results of a bankruptcy related foreclosure.

“We are pleased with our continued success in 2024. We are also extremely pleased to have been ranked first in the S&P Global Market Intelligence best-performing Public Banks for 2023 listing and third in the Forbes America’s Best Banks listing. Our team is highly focused on ‘Doing More’ to deliver exceptional service and innovative products to our customers, as well as continuing our long-standing practices of balance sheet, asset liability and liquidity management. Those initiatives, coupled with strong cost controls and continued identification of opportunities for efficiencies across our system will continue to deliver positive financial results and ideally keep us at the top of the rankings in 2024,” said Dennis E. Nixon, president and CEO.

Total assets at March 31, 2024 were $15.4 billion compared to $15.1 billion at Dec. 31, 2023. Total net loans were $8.0 billion at March 31, 2024 compared to $7.9 billion at Dec. 31, 2023. Deposits were $12.0 billion at March 31, 2024 compared to $11.8 billion at Dec. 31, 2023.

IBC is a multi-bank financial holding company headquartered in Laredo, Texas, with 166 facilities and 256 ATMs serving 75 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/20240502974647/en/

Judith Wawroski

Treasurer and Principal Financial Officer

International Bancshares Corporation

(956) 722-7611

Source: International Bancshares Corporation

FAQ

What was International Bancshares 's net income for Q1 2024?

International Bancshares reported a net income of $97.3 million for the first quarter of 2024.

What caused the decrease in diluted earnings per share for IBOC in Q1 2024?

The decrease in diluted earnings per share was primarily due to an increase in interest expenses and provision for credit losses.

Where is International Bancshares headquartered?

International Bancshares is headquartered in Laredo, Texas.

How many facilities and ATMs does IBC have?

IBC has 166 facilities and 256 ATMs serving 75 communities in Texas and Oklahoma.