International Bancshares (IBOC) investor relations material

Executive summary

• Net income for Q2 2026 decreased 4.3% year-over-year to $95.8M, while six-month net income rose 0.5% to $198.0M, driven by higher interest income from larger investment and loan portfolios and lower interest expense, but offset by increased credit loss provisions.

• Diluted EPS for Q2 2026 was $1.54, down 4.3% year-over-year; six-month diluted EPS was $3.18, up 0.6% year-over-year.

Financial highlights

• Total assets grew 2.7% to $17.0B, net loans increased 4.2% to $9.7B, and deposits rose 2.4% to $12.7B compared to year-end 2025.

• Net interest income for Q2 2026 was $171.1M, up 2.2% year-over-year; six-month net interest income was $336.7M, up 2.4%, benefiting from higher portfolio balances and lower interest expense.

• Non-interest income increased 7.5% for the quarter and 11.4% for the six months, mainly from higher service charges and other income.

• Non-interest expense rose 6.2% for the quarter and 4.7% for the six months, primarily due to higher employee compensation and benefits.

• Allowance for credit losses (ACL) increased 6.8% to $170.0M, with provision for credit losses up 152.5% for the quarter and 82.9% for the six months, reflecting higher non-accrual loan balances.

Outlook and guidance

• Management continues to monitor deposit pricing, interest rate risk, and remains focused on balance sheet, asset, liability, and liquidity management.

• Expense control and process efficiencies, including AI initiatives, remain a focus.

• Uncertainty in economic conditions and regulatory changes, including Basel IV implementation, may impact future results.

• Expectation to maintain industry-leading financial results through established practices.