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IB

INTERNATIONAL BANCSHARES CORP (IBOC)·Q3 2025 Earnings Summary

Executive Summary

  • IBOC delivered a solid quarter: Q3 2025 net income of $108.4M and diluted EPS of $1.74, up 8.6% and 8.8% year over year, respectively . Mix was supported by higher interest income on investment and loan portfolios, partly offset by higher deposit costs; provision expense declined .
  • Management highlighted ongoing cost discipline and balance sheet management, and for the first time explicitly cited “new AI initiatives to create efficiencies,” reinforcing a focus on durable operating leverage .
  • Balance sheet growth continued: assets $16.6B, loans $9.2B, deposits $12.5B at 9/30/25 (all up vs. year-end 2024), underscoring steady franchise momentum despite rate headwinds .
  • Stock reaction catalysts: continued EPS resilience and commentary that deposit pricing is being “closely monitor[ed] and adjust[ed]” following the Fed’s recent rate decrease, which could ease funding costs if trends persist .

What Went Well and What Went Wrong

What Went Well

  • EPS and net income growth: Diluted EPS rose to $1.74 and net income to $108.4M, both increasing ~9% YoY, reflecting higher interest income and lower credit provision .
  • Balance sheet expansion: Assets grew to ~$16.6B; net loans to ~$9.2B; deposits to ~$12.5B at 9/30/25, supporting revenue durability .
  • Strategic execution and efficiency focus: “We will remain focused… on balance sheet, asset, liability and liquidity management, and strong cost controls… supported by new AI initiatives to create efficiencies” (CEO Dennis E. Nixon) .

What Went Wrong

  • Funding cost pressure persisted: “Net interest income has also continued to be negatively impacted by an increase in interest expense, primarily driven by increases in rates paid on deposits” .
  • Competitive deposit environment: Management continues to “closely monitor and adjust rates paid on deposits to remain competitive” in the wake of the Fed’s recent rate decrease, highlighting ongoing funding sensitivity .
  • Limited external guidance/visibility: No formal quantitative guidance was provided, constraining near‑term estimate visibility .

Financial Results

Quarterly trend (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Net Income ($USD Millions)$96.9 $100.1 $108.4
Diluted EPS ($)$1.56 $1.61 $1.74
Net Income Margin %49.72%*49.15%*50.11%*

Year-over-year comparison

MetricQ3 2024Q3 2025
Net Income ($USD Millions)$99.8 $108.4
Diluted EPS ($)$1.60 $1.74

Balance sheet & activity KPIs (period-end)

KPIQ1 2025Q2 2025Q3 2025
Total Assets ($USD Billions)$16.3 $16.5 $16.6
Total Net Loans ($USD Billions)$8.9 $9.0 $9.2
Deposits ($USD Billions)$12.5 $12.5 $12.5

Revenue (company does not disclose a consolidated “revenue” metric in press releases; S&P actuals shown for context)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$194.9M*$203.8M*$216.3M*

Notes: * Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per shareQ3 2025—$0.70 per share; record 8/15/25, payable 8/29/25 Declared
RevenueFY/Q4 2025—No formal guidance provided Maintained “no guidance”
Net Interest Margin / Funding costsFY/Q4 2025—No formal guidance; management continues to manage deposit pricing dynamically Maintained “no guidance”
Noninterest ExpenseFY/Q4 2025—No formal guidance; reiterated strong cost controls focus Maintained “no guidance”

Earnings Call Themes & Trends

Note: No Q3 2025 earnings call transcript was available in our document set; themes below reflect management’s quarter-by-quarter press release commentary.

TopicQ1 2025 (prior-2)Q2 2025 (prior-1)Q3 2025 (current)Trend
Deposit costs & pricingHigher deposit rates pressured NII; actively adjusting paid rates Continued pressure; active pricing to grow/retain deposits Pressure persists; deposit pricing monitored post‑Fed rate decrease Stabilizing if rate cuts persist
Rate environmentElevated rate environment (lag impact from prior Fed hikes) Elevated environment; macro uncertainty Notes “recent” Fed rate decrease Potentially easing funding costs
AI/technology efficiencyEfficiency initiatives referenced generally Efficiency initiatives referenced generally “New AI initiatives to create efficiencies” explicitly cited Increasing focus on AI
Credit costsLower provision supported earnings Lower provision supported earnings Lower provision supported earnings Benign credit trend
Cost disciplineStrong cost controls emphasized Strong cost controls emphasized Strong cost controls emphasized Sustained focus
Balance sheet growthAssets, loans, deposits up vs YE’24 Assets, loans up vs YE’24 Assets $16.6B, loans $9.2B, deposits $12.5B Steady growth

Management Commentary

  • “We will remain focused and vigilant on delivering superior customer service, and continued execution of our long-standing practices of balance sheet, asset, liability and liquidity management, and strong cost controls. We believe that… supported by new AI initiatives to create efficiencies across our system, we will continue to deliver industry-leading financial results.” — Dennis E. Nixon, President & CEO
  • “Net interest income has also continued to be negatively impacted by an increase in interest expense, primarily driven by increases in rates paid on deposits… especially in light of the recent action by the Federal Reserve Board to decrease interest rates.”
  • Prior quarters reinforced the same playbook: industry-leading results, vigilant rate management, and efficiency/cost control focus amidst an elevated rate environment .

Q&A Highlights

  • No public Q3 2025 earnings call transcript was located in our document set; management’s commentary is drawn from the press release, and no Q&A clarifications were available .

Estimates Context

  • Consensus coverage: S&P Global showed no EPS or revenue consensus means for Q3 2025; as a result, estimate “beat/miss” cannot be determined. Actual reported EPS was $1.74 and revenue (S&P-defined) was $216.3M* .
  • Where estimates may need to adjust: With management highlighting the Fed’s recent rate decrease and active deposit pricing, funding cost pressure could moderate from peak levels; efficiency initiatives (including AI) may reinforce operating leverage. No formal guidance was given to anchor revisions .

Estimates snapshot

MetricPeriodConsensus (S&P)Actual
EPSQ3 2025N/A$1.74
Revenue ($USD Millions)Q3 2025N/A$216.3M*

Notes: * Values retrieved from S&P Global.

Key Takeaways for Investors

  • Earnings resilience continues: Q3 EPS of $1.74 and net income of $108.4M extend the uptrend, supported by higher interest income and lower provision expense despite elevated funding costs .
  • Funding cost inflection watch: Management is actively repricing deposits and flagged the Fed’s recent rate decrease; if deposit costs ease, earnings leverage could improve .
  • Operating leverage levers: Explicit introduction of “AI initiatives” plus longstanding cost control discipline should support efficiency gains into 2026 .
  • Balance sheet momentum: Loans grew to $9.2B and assets to $16.6B by quarter end, indicating healthy franchise demand and capacity to compound NII over time .
  • No formal guidance: Absence of quantitative outlook means near-term estimate visibility relies on read-throughs from deposit pricing trends, credit costs, and cost control .
  • Capital returns: A $0.70 per share cash dividend was declared during Q3, consistent with the company’s emphasis on capital strength and shareholder returns .
  • Monitoring items: Deposit beta trajectory post-Fed cuts, pace of AI-enabled efficiency capture, and sustainability of benign credit costs will shape the medium-term margin and EPS path .

Notes: Some quantitative values marked with an asterisk (*) are retrieved from S&P Global.