International Bancshares (IBOC) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $96.98 million, down 3.5% year-over-year; six-month net income was $194.31 million, down 3.9% year-over-year.

• Diluted EPS for the six months was $3.12, a 4.0% decrease compared to the same period in 2023; Q2 basic EPS was $1.56, down from $1.62 year-over-year.

• Interest income rose 8.9% for the quarter and 10.7% for the six months, driven by larger loan and investment portfolios and higher rates.

• Net interest income declined 1.3% for the quarter and 1.1% for the six months due to sharply higher interest expense, especially on deposits.

• Non-interest income increased 15.4% for the quarter and 9.9% for the six months, aided by higher service charges and investment income.

Financial highlights

• Total assets grew 2.8% to $15.49 billion from December 2023; reached $15.5 billion as of June 30, 2024.

• Net loans increased 2.8% to $8.12 billion; deposits rose 1.8% to $12.03 billion.

• Allowance for credit losses (ACL) was $148.6 million (1.80% of loans), down from $157.1 million (1.95%) at year-end.

• Shareholders’ equity increased 5.3% to $2.58 billion since year-end.

• Net interest income benefited from higher interest rates and portfolio growth, but interest expense increased due to higher rates paid on deposits.

Outlook and guidance

• Management expects continued strong financial performance through focus on balance sheet, asset liability, and liquidity management.

• Ongoing initiatives aim to drive further efficiencies and maintain industry-leading results.

• Management continues to monitor deposit pricing to remain competitive and retain/grow deposits.

• Expense control remains a focus, with ongoing efforts to align non-interest expenses with operations and revenue.

• Capital levels are expected to remain well above regulatory minimums.