International Bancshares reports $114.47 million net income for Q3 2026

Cover page 4 changes

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For the quarterly period ended June September 30, 2026

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Commission file number 000-09439 001-43507

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62,191,514 shares outstanding at August 3, 2026

62,148,364 shares outstanding at November 2, 2026

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Financial statements 39 changes

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Held to maturity debt securities (Market value of $ 4,400 on June September 30, 2026 and $ 4,400 on December 31, 2025)

Available for sale debt securities (Amortized cost of $ 5,439,382 5,635,381 on June September 30, 2026 and $ 5,281,090 on December 31, 2025)

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Common shares of $ 1.00 par value. Authorized 275,000,000 shares; issued 96,680,381 96,690,806 shares on June September 30, 2026 and 96,658,794 shares on December 31, 2025

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Less cost of shares in treasury, 34,492,192 34,499,692 shares on June September 30, 2026 and 34,490,048 on December 31, 2025 ( 441,131 441,647 )

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Investment securities transactions, net

Other investments income, (loss), net

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Net change in unrealized holding (losses) gains on securities available for sale arising during period (net of tax effects of $( 2,333 27,845 ), $ 8,220 10,739 , $( 7,859 35,704 ) and $ 20,087 30,826 )

Reclassification adjustment for losses on securities available for sale included in net income (net of tax effects of $ 0 , $ 0 , $ 0 and $ 0 )

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Three and Six Nine Months ended June September 30, 2026 and 2025

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Balance at March 31, 2026

Balance at June 30, 2026

Cash ($ .73 per share)

Purchase of treasury stock ( 1,317 7,500 shares)

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Balance at March 31, 2025

Purchase of treasury stock ( 81,532 shares)

Net change in unrealized gains and losses on available for sale securities, net of reclassification adjustments ( 8,778 104,752 )

Balance at June September 30, 2026

Balance at June 30, 2025

Cash ($ .70 per share)

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Balance at June September 30, 2025

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Cash ($ .73 per share)

Cash ($ 1.46 per share)

Purchase of treasury stock ( 2,144 9,644 shares)

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Net change in unrealized losses on available for sale securities, net of reclassification adjustments ( 29,564 134,316 )

Balance at June September 30, 2026

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Cash ($ .70 per share)

Cash ($ 1.40 per share)

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Balance at June September 30, 2025

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(Gain) loss on sale of other real estate owned

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Investment securities transactions, net

Unrealized loss (gain) on equity securities with readily determinable fair values ( 89 152 )

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(Losses) Earnings from affiliates and other investments

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(Increase) Decrease in other assets

Increase (decrease) in other liabilities

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Net decrease increase in non-interest bearing demand deposits ( 12,539 )

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Net (decrease) increase (decrease) in other borrowed funds

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(Decrease) Increase in cash and cash equivalents

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Purchases of available-for-sale securities not yet settled

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Net transfers from other investments to loans

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Note 1: Basis of Presentation 2 changes

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Subsequent to the end of the period and through the date we have issued these financial statements, we reduced our ownership percentage in a merchant banking investment in accordance with regulatory requirements for merchant banking investments and their holding period. We are still evaluating the impact of the transaction on our financial statements.

In the third quarter of 2026, we reduced our ownership percentage in a merchant banking investment in accordance with regulatory requirements for merchant banking investments and their holding period. This resulted in a non-cash transaction of a partnership interest to an affiliate of $ 72,500,000 in exchange for a promissory note of the same amount, recorded in loans on the statement of financial condition and originated at market terms. No gain or loss was recognized on the transaction.

Note 2: Fair Value Measurements 11 changes

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The following table represents assets and liabilities reported on the consolidated balance sheets at their fair value on a recurring basis as of June September 30, 2026 by level within the fair value measurement hierarchy:

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Certain financial assets and financial liabilities are measured at fair value on a non-recurring basis. The instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Our policy is to recognize transfers between levels at the end of each reporting period, if applicable. There were no transfers between levels of the fair value hierarchy during the six nine months ended June September 30, 2026.

The following table represents financial instruments measured at fair value on a non-recurring basis as of and for the period ended June September 30, 2026 by level within the fair value measurement hierarchy:

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As of June September 30, 2026, we had $ 296,896,000 336,766,000 of doubtful commercial collateral-dependent loans, of which $ 118,007,000 208,401,000 had an appraisal performed within the immediately preceding rolling twelve-month period, and of which $ 90,067,000 84,082,000 had an internal evaluation performed within the immediately preceding rolling twelve-month period. As of December 31, 2025, we had approximately $ 139,643,000 of doubtful commercial collateral-dependent loans, of which $ 0 had an appraisal performed within the immediately preceding rolling twelve-month period and of which $ 139,643,000 had an internal evaluation performed within the immediately preceding rolling twelve-month period.

Other real estate owned is comprised of real estate acquired by foreclosure and deeds in lieu of foreclosure. Other real estate owned is carried at the lower of the recorded investment in the property or its fair value less estimated costs to sell such property (as determined by independent appraisal) within Level 3 of the fair value hierarchy. Prior to foreclosure, the value of the underlying loan is written down to the fair value of the real estate to be acquired by a charge to the ACL, if necessary. The fair value is reviewed periodically, and subsequent write-downs are made through a charge to operations, accordingly. Other real estate owned is included in other assets on the consolidated financial statements. For the three and six nine months ended June September 30, 2026 and the twelve months ended December 31, 2025, we recorded $ 42,000 237,000 , $ 42,000 242,000 and $ 101,000 , respectively, in charges to the ACL in connection with loans transferred to other real estate owned. For the three and six nine months ended June September 30, 2026 and the twelve months ended December 31, 2025, we recorded $ 0 , $ 23,000 and $ 1,296,000 , respectively, in adjustments to fair value in connection with other real estate owned.

The fair value estimates, methods, and assumptions for our financial instruments at June September 30, 2026 and December 31, 2025 are outlined below.

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For variable rate performing loans, the carrying amount approximates fair value. For fixed-rate performing loans, the fair value is calculated by discounting scheduled cash flows using current interest rates at which similar loans with similar terms would be made to borrowers of similar credit quality. At June September 30, 2026 and December 31, 2025, the carrying amount of fixed rate performing loans was $ 1,157,552,000 1,128,822,000 and $ 1,200,539,000 , respectively, and the estimated fair value was $ 1,114,696,000 1,073,918,000 and $ 1,166,537,000 , respectively.

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The fair value of deposits with no stated maturity, such as non-interest-bearing demand deposit accounts, savings accounts and interest-bearing demand deposit accounts, was equal to the amount payable on demand as of June September 30, 2026 and December 31, 2025. The fair value of time deposits is based on the discounted value of contractual cashflows. The discount rate is based on currently offered rates. Time deposits are within Level 3 of the fair value hierarchy. At June September 30, 2026 and December 31, 2025, the carrying amount of time deposits was $ 3,257,699,000 3,305,499,000 and $ 3,201,320,000 , respectively, and the estimated fair value was $ 3,255,972,000 3,303,959,000 and $ 3,196,649,000 , respectively.

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Securities sold under repurchase agreements are short-term maturities. Due to the contractual terms of the instruments, the carrying amounts approximated fair value at June September 30, 2026 and December 31, 2025.

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We currently have floating-rate junior subordinated deferrable interest debentures outstanding. Due to the contractual terms of the floating-rate junior subordinated deferrable interest debentures, the carrying amounts approximated fair value at June September 30, 2026 and December 31, 2025.

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We currently have short- and long-term borrowings issued from the Federal Home Loan Bank ("FHLB"). Due to the contractual terms of the short-term borrowings, the carrying amounts approximated fair value at September 30, 2026. The long-term borrowings outstanding at June September 30, 2026 and December 31, 2025 are fixed-rate borrowings, and the fair value is based on established market spreads for similar types of borrowings. The fixed rate long-term borrowings are included in Level 2 of the fair value hierarchy. At June September 30, 2026 and December 31, 2025, the carrying amount of the fixed rate long-term FHLB borrowings was $ 10,225,000 10,171,000 and $ 10,332,000 , respectively, and the estimated fair value was $ 10,225,000 and $ 10,332,000 , respectively.

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Note 3: Loans 1 change

A summary of loans, by loan type, at June September 30, 2026 and December 31, 2025 is as follows:

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Note 4: Allowance for Credit Losses 31 changes

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Construction and land development loans. This category includes loans for the development of unimproved land to lot development for both residential and commercial use and vertical construction across residential and commercial real estate classes. These loans carry the risk of repayment when projects incur cost overruns, have an increase in the price of construction materials, encounter zoning, entitlement or environmental issues, or encounter other factors that may affect the completion of a project on time and on budget. Additionally, repayment risk may be negatively impacted when the market experiences a deterioration in the value of real estate. Risks specifically related to 1-4 family development loans also include mortgage rate risk and the practice by the mortgage industry of imposing more restrictive underwriting standards, which inhibits the buyer from obtaining long term financing, creating excessive housing and lot inventory in the market.

1-4 family development loans also include mortgage rate risk and the practice by the mortgage industry of imposing more restrictive underwriting standards, which inhibits the buyer from obtaining long term financing, creating excessive housing and lot inventory in the market.

Commercial real estate loans. This category includes loans secured by farmland, multifamily properties, owner-occupied commercial properties, and non-owner-occupied commercial properties. Owner-occupied commercial properties include warehouses often along the U.S. border for import/export operations, office space where the borrower is the primary tenant, restaurants and other single-tenant retail spaces. Non-owner-occupied commercial properties include hotels, retail centers, office and professional buildings, and leased warehouses. These loans carry the risk of repayment when market values deteriorate, the business experiences turnover in key management, the business is unable to attract or maintain stable occupancy levels, or the market experiences an exit of a specific business type that is significant to the local economy, such as a manufacturing plant. Our primary risk management tool is internal monitoring measured against internal concentration limits that are significantly lower than regulatory thresholds and are segmented by low-risk and high-risk characteristics, such as the borrower's equity, cash flow coverage, and non-amortizing versus amortizing status, further disaggregated by the length of time to pay in full. This monitoring is regularly reported to senior management and the board of directors. Risk management practices also extend to managing the borrower's relationship with us and are designed to recognize degradation in the borrower's ability to repay under established terms well before the borrower may default. Loan and deposit activity by the borrower is monitored on a frequent basis, which may prompt a change in risk classification. Once a loan is moved to a more severe risk classification, the loan performance, and when applicable, a plan by the borrower to rectify issues are monitored and reviewed at least quarterly. Additionally, our credit administration team, which is independent from the lending team, reviews a substantial portion of the commercial lending portfolio annually, which includes a significant portion of the commercial real estate loan portfolio given the current mix of loans in our portfolio. The table below summarizes the commercial real estate loan portfolio disaggregated by the type of real estate securing the credit as of June September 30, 2026 and December 31, 2025:

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Three Months Ended June September 30, 2026

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Balance at March 31, 2026

Balance at June 30, 2026

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Balance at June September 30, 2026

Three Months Ended June September 30, 2025

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Balance at March 31, 2025

Balance at June 30, 2025

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Six Months Ended June 30, 2026

Balance at June September 30, 2025

Nine Months Ended September 30, 2026

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Six Months Ended June 30, 2025

Balance at June September 30, 2026

Nine Months Ended September 30, 2025

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Balance at June September 30, 2025

The qualitative loss factors for the June September 30, 2026 ACL remained the same as the prior period. The provision for credit losses for the second quarter of nine months ended September 30, 2026 increased as a result of a change in the level of non-accrual loan balances and the reevaluation of the specific provision for credit losses related to those loans. The change in the level of non-accrual loans can be primarily attributed to a relationship consisting of several loans secured by interests in affordable housing projects that were placed on non-accrual in the second quarter of 2026.

The tables below provide additional information on the balance of loans individually or collectively evaluated for impairment and their related allowance, by loan class, as of June September 30, 2026 and December 31, 2025:

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The table below provides additional information on loans accounted for on a non-accrual basis by loan class at June September 30, 2026 and December 31, 2025:

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We occasionally provide modifications to borrowers experiencing financial difficulties. Modifications may include certain concessions that we must evaluate under current accounting standards to determine the need for disclosure. Concessions to borrowers experiencing financial difficulties that would require disclosure include principal forgiveness, a term extension, an other-than-insignificant payment delay, an interest rate reduction or a combination of these concessions. For the six nine months ended June September 30, 2026, we did not provide any modifications under these circumstances to any borrower experiencing financial difficulty that would require disclosure.

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While our management believes that it is generally able to identify borrowers with financial problems reasonably early and to monitor credit extended to such borrowers carefully, there is no precise method of predicting loan losses. The determination that a loan is likely to be uncollectible and that it should be wholly or partially charged-off as a loss is an exercise of judgment. Similarly, the determination of the adequacy of the ACL can be made only on a subjective basis. It is the judgment of our management that the ACL at June September 30, 2026 was adequate to absorb probable losses from loans in the portfolio at that date.

The following tables present information regarding the aging of past due loans by loan class at June September 30, 2026 and December 31, 2025:

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The increase in Commercial loans past due 30 60 – 59 89 days at June September 30, 2026 can be attributed to one a relationship secured by bonds related to low-income housing tax credit properties that was past due and is secured by a leasehold interest in a marina. on non-accrual. The increase in Commercial loans past due 60 – 89 90 days at June or greater September 30, 2026 can be attributed to a loan secured by a partnership interest in real estate investments that is on non-accrual. The decrease in Commercial real estate: multifamily loans past due 30 – 59 days at June 30, 2026 can be attributed to a loan secured by a multifamily building that was brought current. The increase for the same period in Commercial real estate: multifamily loans past due 90 days or greater can be attributed to two loans secured by multifamily affordable housing communities that are on non-accrual.

A summary of the loan portfolio by credit quality indicator by loan class and by year of origination at June September 30, 2026 and December 31, 2025 is presented below:

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Balance at June September 30, 2026

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Commercial real estate: farmland & commercial

Current-period gross writeoffs

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Watch List - Substandard

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The increase in Watch List – Pass Commercial loans at June 30, 2026, can be attributed to one loan secured by an interest in an affordable housing project that was downgraded from Pass. The increase in Watch List Doubtful Commercial loans at June September 30, 2026, can be attributed to a relationship consisting of several loans secured by interests in affordable housing projects that were placed on non-accrual. The loans are secured, but management will continue to monitor collateral values going forward and assign specific reserves if collateral values decline. Management expects a positive outcome since the need for affordable housing continues. These loans are primarily community development lending under the Community Reinvestment Act ("CRA"). The decrease in Special Review Commercial real estate: farmland & commercial loans at June September 30, 2026, can be attributed to a loan secured by a hotel that was paid in full. The decrease in Watch List Pass Commercial real estate: farmland & commercial loans at June September 30, 2026, can be attributed to two loans. One loan was paid off and one, secured by a restaurant and vacant land held for development, was downgraded to Watch List Substandard. The increase in Watch List Doubtful

Commercial real estate: multifamily loans at September 30, 2026 can be attributed to a relationship secured by affordable housing projects that were downgraded.

Note 5: Stock Options 9 changes

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A summary of option activity under the 2012 Plan for the six nine months ended June September 30, 2026 is as follows:

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Options outstanding at June September 30, 2026

Options fully vested and exercisable at June September 30, 2026

Stock-based compensation expense included in the consolidated statements of income for the three and six nine months ended June September 30, 2026 was $ 15,000 13,000 and $ 33,000 47,000 , respectively. Stock-based compensation expense included in the consolidated statements of income for the three and six nine months ended June September 30, 2025 was $ 21,000 20,000 and $ 66,000 86,000 , respectively. As of June September 30, 2026, there was approximately $ 80,000 67,000 of total unrecognized stock-based compensation cost related to non-vested options granted under our plans that will be recognized over a weighted average period of 1.08 years. one year .

On April 18, 2022, the Board adopted the 2022 International Bancshares Corporation Stock Appreciation Rights Plan (the "SAR Plan"). There are 750,000 shares of underlying common stock that may be used for stock appreciation right ("SAR") grants under the SAR Plan; however, no actual shares will be granted. Upon exercise, the SAR will be settled in cash. SARs granted may be exercisable for a period of up to 10 years from the date of grant and may vest over an eight-year period. As of June 30, 2026, a total of 419,830 SARs had been issued under the SAR Plan.

A summary of activity under the SAR Plan for the six nine months ended June September 30, 2026 is as follows:

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SARs outstanding at June September 30, 2026

SARs fully vested and exercisable at June September 30, 2026

The fair value of the liability for payments due to SAR holders at June September 30, 2026 and December 31, 2025 is approximately $ 8,680,000 7,035,000 and $ 6,620,000 , respectively, as calculated using a Black-Scholes-Merton pricing model, and is included in other liabilities on the consolidated statements of condition. The (credit) expense recorded in connection with all grants under the SAR Plan totaled $( 2,003,000 954,000 ), and $ 2,546,000 1,591,000 for the three and six nine months ended June September 30, 2026, respectively. The expense recorded in connection with all grants under the SAR Plan totaled $ 874,000 758,000 and $ 1,262,000 2,020,000 for the three and six nine months ended June September 30, 2025, respectively. As of June September 30, 2026, there was approximately $ 7,037,000 5,430,000 in unrecognized liability related to non-vested SARs granted under the SAR Plan that will be recognized over a weighted average period of 6.04 5.79 years.

Note 6: Investment Securities, Equity Securities with Readily Determinable Fair Values and Other Investments 14 changes

We classify debt securities into one of three categories: held-to-maturity, available-for-sale, or trading. Such debt securities are reassessed for appropriate classification at each reporting date. Securities classified as "held-to-maturity" are carried at amortized cost for financial statement reporting, while securities classified as "available-for-sale" and "trading" are carried at their fair value. Unrealized holding gains and losses are included in net income for those securities classified as "trading," while unrealized holding gains and losses related to those securities classified as "available-for-sale" are excluded from net income and reported net of tax as other comprehensive income (loss) and accumulated other comprehensive income (loss) until realized, or in the case of losses, when deemed other than temporary. Available-for-sale and held-to-maturity debt securities in an unrealized loss position are evaluated for the underlying cause of the loss. In the event that the deterioration in value is attributable to credit-related reasons, then the amount of credit-related impairment will be recorded as a charge to our ACL with subsequent changes in the amount of impairment, up or down, also recorded through our ACL. We have evaluated the debt securities classified as available-for-sale and held-to-maturity at June September 30, 2026 and have determined that no debt securities in an unrealized loss position are arising from credit-related reasons and have therefore not recorded any allowances for debt securities in our ACL for the period.

The amortized cost and estimated fair value by type of investment security at June September 30, 2026 are as follows:

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(1) Included in the carrying value of residential mortgage-backed securities are $ 802,003 924,866 of mortgage-backed securities issued by Ginnie Mae and $ 4,151,964 4,106,582 of mortgage-backed securities issued by Fannie Mae and Freddie Mac.

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The amortized cost and estimated fair value of investment securities at June September 30, 2026, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties.

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The amortized cost and fair value of available-for-sale debt investment securities pledged to qualify for fiduciary powers, to secure public monies as required by law, repurchase agreements and short-term fixed borrowings was $ 1,638,689,000 1,744,412,000 and $ 1,472,501,000 1,531,898,000 , respectively, at June September 30, 2026.

Proceeds from the sales and calls of available-for-sale debt securities were $ 0 480,000 and $ 3,345,000 3,825,000 for the three and six nine months ended June September 30, 2026, respectively, which included $ 0 and $ 0 of mortgage-backed securities, respectively. Gross gains of $ 0 and $ 0 and gross losses of $ 0 and $ 0 were realized on the sales and calls for the three and six nine months ended June September 30, 2026, respectively. Proceeds from the sales and calls of available-for-sale debt securities were $ 730,000 11,255,000 and $ 4,235,000 15,490,000 for the three and six nine months ended June September 30, 2025, respectively, which included $ 0 and $ 0 of mortgage-backed securities. Gross gains of $ 0 and $ 0 and gross losses of $ 0 1,000 and $ 0 1,000 were realized on the sales and calls for the three and six nine months ended June September 30, 2025, respectively.

Gross unrealized losses on debt investment securities and the fair value of those related securities, aggregated by investment category and length of time that individual debt securities have been in a continuous unrealized loss position at June September 30, 2026, were as follows:

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Equity securities with readily determinable fair values consist primarily of Community Reinvestment Act funds. At June September 30, 2026 and December 31, 2025, the balance in equity securities with readily determinable fair values recorded at fair value were $ 5,545,000 5,326,000 and $ 5,573,000 , respectively. The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the three and six nine months ended June September 30, 2026 and the three and six nine months ended June September 30, 2025:

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Net gains losses recognized during the period on equity securities ( 219 )

Less: Net gains and (losses) recognized during the period on equity securities sold during the period

Unrealized gains losses recognized during the reporting period on equity securities still held at the reporting date ( 219 )

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Net losses recognized during the period on equity securities ( 28 247 )

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Unrealized losses recognized during the reporting period on equity securities still held at the reporting date ( 28 247 )

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Other investments include equity and merchant banking investments held by our Subsidiary Banks and non-banking subsidiary entities. We hold ownership interests in limited partnerships for the purpose of investing in low-income housing tax credit ("LIHTC") projects. The partnerships may acquire, construct or rehabilitate housing for low- and moderate-income individuals. We realize a return primarily from federal tax credits and other federal tax deductions associated with the underlying LIHTC projects. We are a limited partner in the partnerships and are not required to consolidate the entities in our consolidated financial statements. Investments in LIHTC projects totaled $ 248,590,000 243,148,000 and $ 261,128,000 at June September 30, 2026 and December 31, 2025, respectively, and are included in other investments on the consolidated financial statements. Unfunded commitments to LIHTC projects totaled $ 26,526,000 24,766,000 at June September 30, 2026 and $ 37,200,000 at December 31, 2025 and are included in other liabilities on the consolidated financial statements. Tax credits and other tax benefits, as well as amortization expense associated with investments in qualified low-income housing partnerships are accounted for using the proportional amortization method of accounting. There was a total of $ 8,355,000 and $ 16,615,000 24,971,000 in estimated tax credits related to these investments for the three and six nine months ended June September 30, 2026, respectively and $ 7,070,000 and $ 14,034 000 21,103,000 in estimated amortization related to these investments for the three and six nine months ended June September 30, 2026, respectively. There was a total of $ 8,141,000 and $ 16,282,000 24,423,000 in estimated tax credits related to these investments for the three and six nine months ended June September 30, 2025, respectively and $ 6,542,000 and $ 13,084,000 19,626,000 in estimated amortization related to these investments for the three and six nine months ended June September 30, 2025. We monitor LIHTC investments for indicators of impairment and evaluate the recoverability of the carrying amount based on the expected realization of the remaining tax credits, tax benefits, and other economic benefits. There were no impairment losses recorded on tax equity investments during the six nine months ended June September 30, 2026 or the twelve months ended December 31, 2025, respectively.

Note 7: Other Borrowed Funds 1 change

Other borrowed funds include FHLB borrowings, which are short- and long-term borrowings issued by the FHLB of Dallas at the market price offered at the time of funding. These borrowings are secured by residential mortgage-backed investment securities and a portion of our loan portfolio. At June September 30, 2026, other borrowed funds totaled $ 10,225,000 40,171,000 compared to $ 10,332,000 at December 31, 2025.

Note 8: Junior Subordinated Interest Deferrable Debentures 3 changes

As of June September 30, 2026, we had four statutory business trusts, Trusts IX, X, XI and XII (the "Trusts"), formed under the laws of the State of Delaware, for the purpose of issuing trust preferred securities. The Trusts each issued capital and common securities (the "Capital and Common Securities") and invested the proceeds thereof in an equivalent amount of junior subordinated debentures (the "Debentures") that we issued. As of June September 30, 2026 and December 31, 2025, the principal amount of Debentures outstanding totaled $ 108,868,000 , respectively.

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For financial reporting purposes, the Trusts are treated as investments and not consolidated in our consolidated financial statements. Although the Capital and Common Securities issued by each of the Trusts are not included as a component of shareholders' equity on the consolidated statement of condition, the Capital and Common Securities are treated as capital for regulatory purposes. Specifically, under applicable regulatory guidelines, the Capital and Common Securities issued by the Trusts qualify as Tier 1 capital up to a maximum of 25 % of Tier 1 capital on an aggregate basis. Any amount that exceeds the 25 % threshold would qualify as Tier 2 capital. At June September 30, 2026 and December 31, 2025, the total $ 108,868,000 , respectively, of the Capital and Common Securities outstanding qualified as Tier 1 capital.

The following table illustrates key information about each of the Capital and Common Securities issued by each of the Trusts and their the Debentures purchased with the proceeds thereof, including the interest rate at June September 30, 2026:

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Note 9: Common Stock and Dividends 2 changes

We paid cash dividends of $ 0.73 per share on February 27 and August 28, 2026 , respectively, to record holders of our common stock on February 13 and August 14, 2026 , respectively. We paid cash dividends of $ 0.70 per share on February 28 and August 15, 2025 , respectively, to record holders of our common stock on February 14 and August 1, 2025 .

In April 2009, the Board re-established a formal stock repurchase program that authorized the repurchase of up to $ 40 million of our common stock within the following 12 months . Annually since then, including on February 17, 2026, the Board extended and increased the repurchase program to purchase authorize the repurchase of up to $ 150 million of common stock during the 12-month period commencing on March 15, 2026. Shares of common stock may be purchased from time to time on the open market or through privately negotiated transactions. Shares purchased in this program will be are held in treasury for reissue for various corporate purposes, including employee compensation plans. During the second third quarter of 2026, the Board adopted a Rule 10b-18 trading plan and a Rule 10b5-1 trading plan and intends to adopt additional Rule 10b-18 and Rule 10b5-1 trading plans, which will allow us to purchase shares of our common stock during certain open and blackout periods when we ordinarily would not be in the market due to trading restrictions in our insider trading policy. During the terms of both a Rule 10b-18 and Rule 10b5-1 trading plan, purchases of common stock are automatic to the extent the conditions of the plan's trading instructions are met. Shares purchased under these trading plans will be held in treasury for reissue for various corporate purposes, including employee stock compensation plans. As of August 4, November 2, 2026, a total of 13,798,305 13,849,305 shares had been repurchased under all programs since April 2009 at a cost of $ 420,157,000 423,593,000 . We are not obligated to purchase shares under our stock repurchase program outside of the Rule 10b-18 and Rule 10b5-1trading plans.

Note 11: Capital Ratios 8 changes

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CECL and its potential impact on regulatory capital. Pursuant to rules issued by the federal bank regulatory agencies in February 2019 and March 2020, banking organizations were given options to phase in the adoption of CECL over a three-year transition period through December 31, 2022 or over a five-year transition period through December 31, 2024. Rather than electing to make one of the phase-in options, we immediately recognized the capital impact upon adopting CECL accounting standards on January 1, 2020, which resulted in an increase in our allowance for probable loan losses and a one-time cumulative-effect adjustment to retained earnings upon adoption.

In July 2013, the FDIC and other regulatory bodies established a new, comprehensive capital framework for U.S. banking organizations, consisting of minimum requirements that increase both the quantity and quality of capital held by banking organizations. The final rules are a result of the implementation of the Basel III capital reforms and various related capital provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd Frank Act"). Consistent with the Basel international framework, the rules include a new minimum ratio of Common Equity Tier 1 ("CET1") capital to risk-weighted assets of 4.5% and a CET1 capital conservation buffer of 2.5% of risk-weighted assets, effectively resulting in a minimum ratio of CET1 capital to risk-weighted assets of at least 7% upon full implementation. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of CET1 capital to risk-weighted assets above the minimum but below the conservation buffer will face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall. The rules also raised the minimum ratio of Tier 1 capital to risk-weighted assets from 4% to 6% and include a minimum leverage ratio of 4% for all banking organizations. Regarding the quality of capital, the rules emphasize CET1 capital and implements strict eligibility criteria for regulatory capital instruments. The rules also improve the methodology for calculating risk-weighted assets to enhance risk sensitivity. We believe that as of June September 30, 2026, we meet all fully phased-in capital adequacy requirements.

In November 2017, the OCC, the Federal Reserve Board ("FRB") and the FDIC finalized a proposed rule that extends the current treatment under the regulatory capital rules for certain regulatory capital deductions and risk weights and certain minority interest requirements, as they apply to banking organizations that are not subject to the advanced approaches capital rules. Effective January 1, 2018, the rule also paused the full transition to the Basel III treatment of mortgage servicing assets, certain deferred tax assets, investments in the capital of unconsolidated financial institutions and minority interests. The agencies are also considering whether to make adjustments to the capital rules in response to CECL and its potential impact on regulatory capital. Pursuant to rules issued by the federal bank regulatory agencies in February 2019 and March 2020, banking organizations were given options to phase in the adoption of CECL over a three-year transition period through December 31, 2022 or over a five-year transition period through December 31, 2024. Rather than electing to make one of the phase-in options, we immediately recognized the capital impact upon adopting CECL accounting standards on January 1, 2020, which resulted in an increase in our allowance for probable loan losses and a one-time cumulative-effect adjustment to retained earnings upon adoption.

In December 2017, the Basel Committee on Banking Supervision unveiled its final set of standards and reforms to its Basel III regulatory capital framework, commonly called "Basel III Endgame" or "Basel IV." The Basel IV framework makes changes to the capital framework first introduced as "Basel III" in 2010 and aims to reduce excessive variability in banks' calculations of risk-weighted capital ratios. Implementation of Basel IV across the Basel Committee's member jurisdictions began on January 1, 2023 and was intended to continue over a five-year transition period by regulators in individual countries, including the U.S. federal bank regulatory agencies. In July 2023, U.S. regulators issued initial proposals for implementing the Basel IV framework (the "2023 Proposals"), which targeted implementation of Basel IV to begin on July 1, 2025, subject to a three-year transition period with full compliance expected by July 1, 2028. However, the previously established implementation dates for Basel IV are no longer definitive, and the future implementation of Basel IV remains unclear, as the federal banking agencies continue to review the Basel IV rules. Most recently, on March 19, 2026, the Federal Reserve Board, the FDIC, and the OCC jointly rescinded the 2023 Proposals and unveiled a set of re-proposed capital rules (the "2026 Proposals") that are intended to streamline and modernize certain aspects of the Basel IV framework and be less onerous for banks than the 2023 Proposals, including based on agency estimates, due to anticipated reductions in certain CET1 capital requirements for banking organizations. The 2026 Proposals include: (i) an expanded risk-based capital framework for large banking organizations; (ii) revisions to the standardized approach for calculating risk-weighted assets; and (iii) revisions to the capital surcharge applicable to global systemically important bank holding companies. The 2026 Proposals were subject to public comment through June 18, 2026. Accordingly, the timing, scope, and final form of the U.S. implementation of the Basel IV framework remains uncertain.

Proposals include: (i) an expanded risk-based capital framework for large banking organizations; (ii) revisions to the standardized approach for calculating risk-weighted assets; and (iii) revisions to the capital surcharge applicable to global systemically important bank holding companies. The public comment period for the 2026 Proposals closed on June 18, 2026. As of the date of this report, the timing, scope, and final form of the U.S. implementation of the Basel IV framework remains uncertain.

As of June September 30, 2026, our capital levels continue to exceed all capital adequacy requirements under the Basel III capital rules as currently applicable to us.

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We had a CET1 to risk-weighted assets ratio of 23.56 24.41 % on June September 30, 2026 and 23.36 % on December 31, 2025. We had a Tier 1 capital-to-average-total-asset (leverage) ratio of 20.27 20.30 % and 19.86 %, risk-weighted Tier 1 capital ratio of 24.09 25.00 % and 23.91 %, and risk-weighted total capital ratio of 25.30 26.23 % and 25.09 % at June September 30, 2026 and December 31, 2025, respectively. Our CET1 capital consists of common stock and related surplus, net of treasury stock, and retained earnings. We and our Subsidiary Banks elected to opt-out of the requirement to include most components of accumulated other comprehensive income (loss) in the calculation of CET1 capital. CET1 is reduced by goodwill and other intangible assets, net of associated deferred tax liabilities and subject to transition provisions. Tier 1 capital includes CET1 capital and additional Tier 1 capital. Additional Tier 1 capital includes the Capital and Common Securities issued by the Trusts (see Note 8 above) up to a maximum of 25 % of Tier 1 capital on an aggregate basis. Any amount that exceeds the 25 % threshold qualifies as Tier 2 capital. As of June September 30, 2026 and December 31, 2025, the total of $ 108,868,000 of the Capital and Common Securities outstanding qualified as Tier 1 capital. We actively monitor the regulatory capital ratios to ensure that our Subsidiary Banks are well-capitalized under the regulatory framework.

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We and our Subsidiary Banks are subject to the regulatory capital requirements administered by the Federal Reserve, and, for our Subsidiary Banks, the FDIC. Regulatory authorities can initiate certain mandatory actions if we or any of our Subsidiary Banks fail to meet the minimum capital requirements, which could have a direct material effect on our financial statements. Management believes, as of June September 30, 2026, that we and each of our Subsidiary Banks meet all capital adequacy requirements to which we are subject.

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MD&A 22 changes

The following discussion should be read in conjunction with our consolidated financial statements, and notes thereto, for the year ended December 31, 2025, which are included in our 2025 Annual Report. Operating results for the three and six nine months ended June September 30, 2026 are not necessarily indicative of the results for the year ending December 31, 2026, or any future period.

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● The transfer of the primary listing of our common stock from Nasdaq to the Texas Stock Exchange, a newly operational securities exchange, and the potential impact of such transfer on the trading market, liquidity, and market price of our common stock.

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● Changes in U.S.—Mexico trade, including reductions in border crossings and commerce, integration, and implementation of potential modifications to the United States-Mexico-Canada Agreement ("USMCA") in connection with the ongoing joint review and renegotiations of the USMCA following the United States' decision to not renew and extend the agreement in its current form, the imposition of tariffs on imported goods from Mexico, and the potential retaliatory tariffs that Mexico may impose on the United States.

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● Technological changes or system failures or breaches of our network security, as well as and other cybersecurity risks, which could subject us to increased operating costs, litigation, and other liabilities.

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● The development and increasing use of agentic AI systems by customers and third parties, including the potential for such systems to autonomously access sensitive customer data, initiate transactions without appropriate authorization or adequate human oversight, or be compromised or manipulated to perform actions that exceed or otherwise deviate from customers' instructions.

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Net income for the three and six nine months ended June September 30, 2026, decreased by 4.3% and increased by 0.5%, 5.6% and 2.3%, respectively, compared to the same periods of 2025. Net income for the first six nine months of 2026 continued to be positively affected by interest income earned on our investment and loan portfolios driven primarily by both an increase in the size of our investment and loan portfolios and the current rate environment. Net interest income was also positively affected by a decrease in interest expense, primarily driven by a redistribution in rates paid on deposits. We continue to closely monitor rates paid on deposits to remain competitive to grow and retain deposits. Net income for the same period was positively impacted by earnings on other investments and was negatively impacted by an increase in our provision for credit loss expense, driven primarily by a change in non-accrual loan balances and the reevaluation of specific reserves on those non-accrual loans .

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The change in net interest income for the three and six nine months ended June September 30, 2026 can be attributed to interest income, which continues to be positively impacted by interest income earned on our investment and loan portfolios, driven by both an increase in the size of such portfolios and the current rate environment, which remains elevated due to FRB actions on interest rates in recent years, including the recent rate increase, and a decrease in interest expense, primarily driven by a redistribution in rates paid on deposits, which we continue to closely monitor. rates paid on deposits. Net interest income is the spread between income on interest earning assets, such as loans and securities, and the interest expense on liabilities used to fund those assets, such as deposits, repurchase agreements and funds borrowed. As part of our strategy to manage interest rate risk, we strive to manage both assets and liabilities so that interest sensitivities match. One method of calculating interest rate sensitivity is through gap analysis. A gap is the difference between the amount of interest rate sensitive assets and interest rate sensitive liabilities that re-price or mature in a given time period. Positive gaps occur when interest rate sensitive assets exceed interest rate sensitive liabilities, and negative gaps occur when interest rate sensitive liabilities exceed interest rate sensitive assets. A positive gap position in a period of rising interest rates should have a positive effect on net interest income as assets will re-price faster than liabilities. Conversely, net interest income should contract somewhat in a period of falling interest rates. Our management can quickly change our interest rate position at any given point in time as market conditions dictate. Additionally, interest rate changes do not affect all categories of assets and liabilities equally or at the same time. Analytical techniques we employ to supplement gap analysis include simulation analysis to quantify interest rate risk exposure. The gap analysis prepared by management is reviewed by our Investment Committee twice a year (see the "Interest Rate Sensitivity" table on page 47 for t he June the September 30, 2026 gap analysis). Our management currently believes that we are properly positioned for interest rate changes; however, if our management determines at any time that we are not properly positioned, we will strive to adjust the interest rate sensitive assets and liabilities in order to manage the effect of interest rate changes.

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Investment securities transactions, net

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Total non-interest income for the three and six nine months ended June September 30, 2026 increased by 7.5% 18.7% and 11.4%, 14.1%, respectively, compared to the same periods of 2025. Non-interest income for the three and six nine months ended June September 30, 2025 2026 was negatively positively impacted due to losses earnings recorded on merchant banking investments and is reflected in other investments, net in the table above.

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Non-interest expense increased by 6.2% 3.6% and 4.7% 4.3% for the three and six nine months ended June September 30, 2026, respectively, compared to the same periods of 2025. Non-interest expense continues to be primarily impacted by an increase in our employee compensation and benefits as we continue to adjust our compensation programs to retain our workforce and remain competitive in the current employment market. We also continue to monitor and manage our controllable non-interest expenses through a variety of measures with the ultimate goal of ensuring we align non-interest expenses with our operations and revenue streams.

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The ACL increased 6.8 % to $170,014,000 $169,956,000 at June September 30, 2026 from $159,174,000 at December 31, 2025. The provision for credit losses charged to expense increased 152.5% decreased 11.1% to $11,105,000 $1,625,000 for the three months ended June September 30, 2026 compared to $4,398,000 $1,827,000 for the same period of 2025. The provision for credit losses charged to expense increased 82.9% 64.9% to $14,129,000 $15,754,000 for the six nine months ended June September 30, 2026 compared to $7,727,000 $9,554,000 for the same period of 2025. The increase in our provision for credit loss expense was driven primarily by a change in non-accrual loan balances and the reevaluation of specific reserves on those non-accrual loans. The ACL was 1.72% 1.74% of total loans at June September 30, 2026 and 1.68% of total loans at December 31, 2025.

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Total loans increased by 4.3% 3.4% to $9,863,199,000 $9,784,037,000 at June September 30, 2026, from $9,460,422,000 at December 31, 2025. Commercial real estate loans have historically been the largest category in our loan portfolio and comprise approximately 67 % 66% of total loans at June September 30, 2026 and December 31, 2025, respectively. The loans in this category primarily include owner- and non-owner-occupied commercial buildings such as shopping centers, warehouses, hotels and office buildings and are primarily geographically concentrated in central and south Texas and throughout Oklahoma. Commercial real estate loans generally carry a lower risk of loss; however, they may also be significantly more affected by changes in real estate markets or the general economy. We regularly monitor commercial real estate loan concentrations and also have processes and procedures in place to monitor economic conditions that may adversely affect our commercial real estate portfolio.

Deposits increased by 2.4% 3.6% to $12,736,044,000 $12,883,646,000 at June September 30, 2026, compared to $12,436,506,000 at December 31, 2025. Deposits have continued to fluctuate as a result of increased general activities by customers, increased competition for deposits by the federal government, and aggressive competitors' pricing. We have closely monitored the rates paid on deposits by competitors and have made changes to our pricing accordingly in order to remain competitive in an effort to retain deposits. The five separately charted banks within our holding company structure also allow us to work with customers to maximize their FDIC insurance levels and provide additional levels of insured deposits.

On June September 30, 2026, we had $17,021,950,000 $17,287,505,000 of consolidated assets, of which approximately $401,801,000, $371,738,000, or 2.4%, 2.2%, was related to loans outstanding to borrowers domiciled in foreign countries, compared to $392,811,000, or 2.4%, 2.2%, at December 31, 2025. Of the $401,801,000, 88.2% $371,738,000, 88.5% is directly or indirectly secured by U.S. assets, certificates of deposits and real estate; 2.8% 3.5% is secured by foreign real estate or other assets; and 9.0% 8.0% is unsecured.

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Commercial real estate loans. This category includes loans secured by farmland, multifamily properties, owner-occupied commercial properties, and non-owner-occupied commercial properties. Owner-occupied commercial properties include warehouses often along the U.S./Mexico border for import/export operations, office space where the borrower is the primary tenant, restaurants and other single-tenant retail spaces. Non-owner-occupied commercial properties include hotels, retail centers, office and professional buildings, and leased warehouses. These loans carry the risk of repayment when market values deteriorate, the business experiences turnover in key management, the business is unable to attract or maintain stable occupancy levels, or the market experiences an exit of a specific business type that is significant to the local economy, such as a manufacturing plant. Our primary risk management tool is internal monitoring measured against internal concentration limits that are significantly lower than regulatory thresholds and are segmented by low-risk and high-risk characteristics, such as the borrower's equity, cash flow coverage, and non-amortizing versus amortizing status, further disaggregated by the length of time to pay in full. This monitoring is regularly reported to senior management and the board of directors. Risk management practices also extend to managing the borrower's relationship with us and are designed to recognize degradation in the borrower's ability to repay under established terms well before the borrower may default. Loan and deposit activity by the borrower is monitored on a frequent basis, which may prompt a change in risk classification. Once a loan is moved to a more severe risk classification, the loan performance, and when applicable, a plan by the borrower to rectify issues are monitored and reviewed at least quarterly. Additionally, our credit administration team, which is independent from the lending team, reviews a substantial portion of the commercial lending portfolio annually, which includes a significant portion of the commercial real estate loan portfolio given the current mix of loans in our portfolio. The table below summarizes the commercial real estate loan portfolio disaggregated by the type of real estate securing the credit as of June September 30, 2026 and December 31, 2025:

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We maintain an adequate level of capital as a margin of safety for our depositors and shareholders. At June September 30, 2026, shareholders' equity was $3,375,304,000 $3,339,481,000 compared to $3,251,638,000 at December 31, 2025. The increase in shareholders' equity can be primarily attributed to the retention of earnings offset by shareholder dividends paid.

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In July 2013, the FDIC and other regulatory bodies established a new, comprehensive capital framework for U.S. banking organizations, consisting of minimum requirements that increase both the quantity and quality of capital held by banking organizations. The final rules are a result of the implementation of the Basel III capital reforms and various related capital provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd Frank Act"). Consistent with the Basel international framework, the rules include a new minimum ratio of Common Equity Tier 1 ("CET1") capital to risk-weighted assets of 4.5% and a CET1 capital conservation buffer of 2.5% of risk-weighted assets, effectively resulting in a minimum ratio of CET1 capital to risk-weighted assets of at least 7% upon full implementation. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of CET1 capital to risk-weighted assets above the minimum but below the conservation buffer will face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall. The rules also raised the minimum ratio of Tier 1 capital to risk-weighted assets from 4% to 6% and include a minimum leverage ratio of 4% for all banking organizations. Regarding the quality of capital, the rules emphasize CET1 capital and implements strict eligibility criteria for regulatory capital instruments. The rules also improve the methodology for calculating risk-weighted assets to enhance risk sensitivity. We believe that as of June September 30, 2026, we meet all fully phased-in capital adequacy requirements.

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In December 2017, the Basel Committee on Banking Supervision unveiled its final set of standards and reforms to its Basel III regulatory capital framework, commonly called "Basel III Endgame" or "Basel IV." The Basel IV framework makes changes to the capital framework first introduced as "Basel III" in 2010 and aims to reduce excessive variability in banks' calculations of risk-weighted capital ratios. Implementation of Basel IV across the Basel Committee's member jurisdictions began on January 1, 2023 and was intended to continue over a five-year transition period by regulators in individual countries, including the U.S. federal bank regulatory agencies. In July 2023, U.S. regulators issued initial proposals for implementing the Basel IV framework (the "2023 Proposals"), which targeted implementation of Basel IV to begin on July 1, 2025, subject to a three-year transition period with full compliance expected by July 1, 2028. However, the previously established implementation dates for Basel IV are no longer definitive, and the future implementation of Basel IV remains unclear, as the federal banking agencies continue to review the Basel IV rules. Most recently, on March 19, 2026, the Federal Reserve Board, the FDIC and the OCC jointly rescinded the 2023 Proposals and unveiled a set of re-proposed capital rules (the "2026 Proposals") that are intended to streamline and modernize certain aspects of the Basel IV framework and be less onerous for banks than the 2023 Proposals, including based on agency estimates, due to anticipated reductions in certain CET1 capital requirements for banking organizations. The 2026 Proposals include: (i) an expanded risk-based capital framework for large banking organizations; (ii) revisions to the standardized approach for calculating risk-weighted assets; and (iii) revisions to the capital surcharge applicable to global systemically important bank holding companies. The 2026 Proposals were subject to public comment through period for the 2026 Proposals closed on June 18, 2026. Accordingly, As of the date of this report, the timing, scope, and final form of the U.S. implementation of the Basel IV framework remains uncertain.

As of June September 30, 2026, our capital levels continue to exceed all capital adequacy requirements under the Basel III capital rules as currently applicable to us.

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We had a CET1 to risk-weighted assets ratio of 23.56% 24.41% on June September 30, 2026 and 23.36% on December 31, 2025. We had a Tier 1 capital-to-average-total-asset (leverage) ratio of 20.27% 20.30% and 19.86%, risk-weighted Tier 1 capital ratio of 24.09% 25.00% and 23.91%, and risk-weighted total capital ratio of 25.30% 26.23% and 25.09% at June September 30, 2026 and December 31, 2025, respectively. Our CET1 capital consists of common stock and related surplus, net of treasury stock, and retained earnings. We and our Subsidiary Banks elected to opt-out of the requirement to include most components of accumulated other comprehensive income (loss) in the calculation of CET1 capital. CET1 is reduced by goodwill and other intangible assets, net of associated deferred tax liabilities and subject to transition provisions. Tier 1 capital includes CET1 capital and additional Tier 1 capital. Additional Tier 1 capital includes the Capital and Common Securities issued by the Trusts (see Note 8 above) up to a maximum of 25% of Tier 1 capital on an aggregate basis. Any amount that exceeds the 25% threshold qualifies as Tier 2 capital. As of June September 30, 2026 and December 31, 2025, the total of $108,868,000 of the Capital and Common Securities outstanding qualified as Tier 1 capital. We actively monitor the regulatory capital ratios to ensure that our Subsidiary Banks are well-capitalized under the regulatory framework.

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We and our Subsidiary Banks are subject to the regulatory capital requirements administered by the Federal Reserve, and, for our Subsidiary Banks, the FDIC. Regulatory authorities can initiate certain mandatory actions if we or any of our Subsidiary Banks fail to meet the minimum capital requirements, which could have a direct material effect on our financial statements. Management believes, as of June September 30, 2026, that we and each of our Subsidiary Banks meet all capital adequacy requirements to which we are subject

We will continue to monitor the volatility and cost of funds in an attempt to match maturities of rate-sensitive assets and liabilities and respond accordingly to anticipate fluctuations in interest rates by adjusting the balance between sources and uses of funds as deemed appropriate. The net-interest rate sensitivity as of June September 30, 2026 is illustrated in the table entitled "Interest Rate Sensitivity," below. This information reflects the balances of assets and liabilities for which rates are subject to change. A mix of assets and liabilities that are roughly equal in volume and re-pricing characteristics represents a matched interest rate sensitivity position. Any excess of assets or liabilities results in an interest rate sensitivity gap.

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Market risk 1 change

During the six nine months ended June September 30, 2026, there were no material changes in market risk exposures that affected the quantitative and qualitative disclosures regarding market risk presented under the caption "Liquidity and Capital Resources" located on pages 15 through 19 of our 2025 Annual Report.

Unregistered sales of stock 10 changes

During the six nine months ended June September 30, 2026, there were no sales of equity securities that were not registered under the Securities Act of 1933, as amended, or which were not previously disclosed or reported in our Annual Report on Form 10-K for the year ended December 31, 2025 or a subsequent Current Report on Form 8-K.

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April 1 – April 30, 2026

May 1 – May 31, 2026

June 1 – June 30, 2026

In April 2009, the Board re-established a formal stock repurchase program that authorized the repurchase of up to $40 million of our common stock within the following 12 months. Annually since then, including on February 17, 2026, the Board extended and increased the repurchase program to purchase authorize the repurchase of up to $150 million of common stock during the 12-month period commencing on March 15, 2026. Shares of common stock may be purchased from time to time on the open market or through privately negotiated transactions. Shares purchased in this program will be are held in treasury for reissue for various corporate purposes, including employee compensation plans. During the second third quarter of 2026, the Board adopted a Rule 10b-18 trading plan and a Rule 10b5-1 trading plan and intends to adopt additional Rule 10b-18 and Rule 10b5-1 trading plans, which will allow us to purchase shares of our common stock during certain open and blackout periods when we ordinarily would not be in the market due to trading restrictions in our insider trading policy. During the terms of both a Rule 10b-18 and Rule 10b5-1 trading plan, purchases of common stock are automatic to the extent the conditions of the plan's trading instructions are met. Shares purchased under these trading plans will be held in treasury for reissue for various corporate purposes, including employee stock compensation plans. As of August 4, November 2, 2026, a total of 13,798,305 13,849,305 shares had been repurchased under all programs since April 2009 at a cost of $420,157,000. $423,593,000. We are not obligated to purchase shares under our stock repurchase program outside of the Rule 10b-18 and Rule 10b5-1trading plans.

Except for repurchases in connection with the administration of an employee benefit plan in the ordinary course of business and consistent with past practices, common stock repurchases are only conducted under publicly announced repurchase programs approved by the Board. The following table includes information about our common stock share repurchases for under our repurchase program during the quarter ended June September 30, 2026.

July 1 – July 31, 2026

August 1 – August 31, 2026

September 1 – September 30, 2026

(1) As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 26, 2026, the repurchase program was extended on February 17, 2026 and allows for the purchase of up to an additional $150,000,000 of common stock through March 15, 2027.

Other information 3 changes

During the quarter ended June September 30, 2026, there was no information required to be disclosed in a Current Report on Form 8-K which was not disclosed in a Current Report on Form 8-K.

During the quarter ended June September 30, 2026, there were no material changes to the procedures by which shareholders may recommend nominees to our Board.

During the quarter ended June September 30, 2026, none of the Company's directors or officers adopted , modified , or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," as those terms are defined in Item 408 of Regulation S-K.

Exhibits 3 changes

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(3hf)* — Third Amended and Restated By-Laws of International Bancshares Corporation (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on May 12, 2026).

13* — Annual report to Shareholders on Form ARS 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 26, 2026

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++ Attached as Exhibit 101 to this report are the following documents formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Cover Page to this Form 10-Q; (ii) the Condensed Consolidated Statement of Earnings for the three and six nine months ended June September 30, 2026; (iii) the Condensed Consolidated Balance Sheet as of June September 30, 2026 and December 31, 2025; and (iv) the Condensed Consolidated Statement of Cash Flows for the six nine months ended June September 30, 2026 and June September 30, 2025.

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