International Bancshares Corp. is leading post-NAFTA banking in South Texas. One of the largest bank holding companies in Texas, it does business through International Bank of Commerce (IBC) and Commerce Bank in Texas and Oklahoma through nearly 220 locations. The company facilitates trade between the US and Mexico and serves Texas' growing Hispanic population; about 30% of its deposits come from south of the border. In addition to commercial and international banking services, International Bancshares provides retail deposit services, insurance and investment products, and mortgages and consumer loans. The bulk of the company's portfolio is made up of business and construction loans.
Based in the border city of Laredo, Texas, IBC has many customers living in Mexico, especially northern Mexico.
IBC's 2011 revenue declined nearly 9% vs. 2010, on a decrease in both interest and non-interest income. Net income fell by about 2% over the same period. Indeed, 2011 was the fourth consecutive year of falling revenue for the bank as interest and fees declined on its shrinking loan portfolio. Income on taxable investment securities declined as well in 2011 vs. 2010.
Cash flow increased by nearly $92 million is 2011 vs. 2010, due to cash provided by investing activities as compared to cash used in 2010.
IBC maintains a decentralized structure in which local advisory boards, made up of members of the communities in the bank is located, direct operations of its branches, including recruiting prospective clients and developing products and services to meet local customers' needs However, in 2012 IBC closed most of its bank branches inside grocery stores (H-E-B, Kroger, Randalls) in response to an amendment to the Dodd-Frank Act that gutted overdraft charges and interchange fees that banks charge when a consumer swipes a debit card, suppressing revenue at fee-focused in-store branches. The company is replacing the unprofitable grocery store branches with more expensive but lucrative brick-and-mortar branches in Houston and other cities.
In addition to the tougher regulatory environment, the increasing preference by consumers for online and mobile banking, is causing IBC to shrink it branch network in Texas and Oklahoma.
Founder and director Antonio (Tony) R. Sanchez, a one-time candidate for Texas governor, and his family own around 14% of International Bancshares. With a large number of Hispanic shareholders, International Bancshares is one of the largest minority-owned banks in the nation. – less