International Bancshares (IBOC) investor relations material

Executive summary

• Net income for Q2 2025 rose 3.3% year-over-year to $100.1 million, with six-month net income up 1.4% to $197.0 million, driven by higher interest income and lower credit loss provisions, partially offset by increased non-interest expenses and deposit costs.

• Diluted EPS was $1.61 for Q2 2025 and $3.16 for the first half, both showing modest growth over 2024.

• The company remains focused on cost control, efficiency, and maintaining a strong capital position amid economic uncertainty and competitive deposit markets.

Financial highlights

• Total assets increased to $16.5 billion as of June 30, 2025, with net loans up to $9.0 billion and deposits up to $12.5 billion from year-end 2024.

• Net interest income for Q2 2025 grew 2.0% year-over-year to $167.5 million; six-month net interest income was up 0.3% to $328.7 million.

• Provision for credit losses dropped 49.9% in Q2 and 64.5% for the six months, reflecting lower charge-offs and improved credit quality.

• Non-interest income declined 6.6% in Q2 and 9.4% for the six months, mainly due to losses on merchant banking investments.

• Non-interest expense increased 5.0% in Q2 and 5.4% for the six months, primarily from higher employee compensation and inflationary pressures.

Outlook and guidance

• Management expects continued focus on deposit retention, cost control, and efficiency amid ongoing economic uncertainty and competitive pressures.

• No material impact is expected from recent federal tax law changes enacted in July 2025.