8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15 (d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 28, 2011

INTERNATIONAL BANCSHARES CORPORATION

(Exact name of registrant as specified in its charter)

Texas	0-9439	74-2157138
(State or other jurisdiction	(Commission File	(IRS Employer
of incorporation	Number)	Identification No.)

1200 San Bernardo, Laredo, Texas	78040-1359
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (956) 722-7611

None

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4 (c )  under the Exchange Act (17 CFR 240.13e-4 ( c))

Item 2.02 Results of Operations and Financial Condition.

On February 28, 2011, International Bancshares Corporation issued a news release announcing 2010 earnings.  The news release, attached hereto and filed herewith as Exhibit 99, is incorporated herein by reference.

All of the information furnished in Item 2.02 of this report, including the accompanying exhibits, is also intended to be included under “Item 7.01 — Regulation Fair Disclosure” and shall not be deemed “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, is not subject to the liabilities of that section and shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits

99 — News Release of International Bancshares Corporation dated February 28, 2011.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

INTERNATIONAL BANCSHARES CORPORATION
(Registrant)
By:	/s/ Dennis E. Nixon
	DENNIS E. NIXON, President
	and Chief Executive Officer

Date: February 28, 2011

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EXHIBIT INDEX

99 News Release of International Bancshares Corporation dated February 28, 2011.

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EX-99

EXHIBIT 99

Contact:	Judith Wawroski
	International Bancshares Corporation
	(956) 722-7611

FOR IMMEDIATE RELEASE:

IBC Announces 2010 Earnings

LAREDO, Texas—(BUSINESS WIRE)— February 28, 2011—International Bancshares Corporation (NASDAQ:IBOC), one of the largest independent bank holding companies in Texas, today reported annual net income for 2010 of $130.0 million compared to $142.7 million, which represents a 8.9 percent decrease in net income over the corresponding period in 2009,  prior to amounts related to participation in the TARP program, including preferred stock dividends and amounts related to the Warrants. After these amounts, annual net income for 2010 applicable to common shareholders was $116.9 million, or $1.72 diluted earnings per common share ($1.72 per share basic), as compared to net income of $129.8 million or $1.90 diluted earnings per common share ($1.90 per share basic) for the same period of 2009.  Net income for the three months en ded December 31, 2010 was $30.4   million, compared to $37.1 million, a decrease of 18.1 percent compared to the same period of 2009, prior to amounts related to participation in the TARP program, including preferred stock dividends and amounts related to the Warrants.  After these amounts, net income for the fourth quarter of 2010 applicable to common shareholders was $27.1 million, or $.40 diluted earnings per common share ($.40 per share basic), as compared to $33.8 million or $.50 diluted earnings per common share ($.50 per share basic) for the same period of 2009, which represents a decrease of 19.8 percent in net income available to common shareholders.

Net income available to common shareholders for the year ended December 31, 2010 decreased by 9.9% as compared to the same period in 2009.  Net income for the year ended December 31, 2010 was positively affected by gains on investment securities sales totaling $21.6 million, net of tax. The sales of the securities were to facilitate a re-positioning of the Company’s investment portfolio.  Net income was negatively affected by an additional reserve of $21.8 million that the Company recorded during the first quarter of 2010 in connection with a dispute related to certain tax matters that were inherited by the Company in its 2004 acquisition of LFIN.  The provision for probable loan losses charged to expense decreased $23.4 million, after tax to $14.8 million, after tax from the same period of 2009.  The decrease is mainly due to a decrease in required reserves f or impaired loans analyzed on an individual basis.

International Bancshares Corporation and Subsidiaries

Consolidated Financial Summary

	Years Ended December 31,
	2010			2009
	(Dollars in thousands, except per share data) Unaudited
Interest income	$	458,769		$	527,377
Interest expense	(114,036		)	(139,796		)
Net interest income	344,733			387,581
Provision for probable loan losses	(22,812		)	(58,833		)
Non-interest income	218,784			201,013
Non-interest expense	(339,725		)	(309,031		)
Income before income taxes	200,980			220,730
Income taxes	(70,957		)	(77,988		)
Net income	$	130,023		$	142,742
Preferred stock dividends	(13,126		)	(12,984		)
Net income available to common shareholders	$	116,897		$	129,758
Net income per common share
Basic	$	1.72		$	1.90
Diluted	$	1.72		$	1.90

“I’m pleased with the Company’s earnings for 2010, especially in light of this difficult economic environment and all the challenges faced by the industry.  IBC has continued to produce positive results during this period of economic stress.  We are confident in the strength of our balance sheet and the quality of our loan portfolio.  The Company continues to seek out qualified borrowers and is actively lending and financing.  We are pleased that the economies of Texas and Oklahoma continue to perform better than the national economy during this weakened economic environment and we are continuing to see improvements in the Texas and Oklahoma markets compared to earlier in this recessionary period,” said Dennis E. Nixon, President and CEO.

“Additionally, during the year the substantial increase in shareholders’ equity further strengthened the Company’s capital ratios, providing more opportunity for the Company to seek out qualified borrowers and actively lend and invest.  We are committed to serving the needs of our customers as well as enhancing our shareholder value,” commented Mr. Nixon.

Total assets at December 31, 2010 were $11.9 billion compared to $11.8 billion at December 31, 2009.  Total net loans were $5.3 billion at December 31, 2010 compared to $5.6 billion at December 31, 2009. Deposits were $7.6 billion at December 31, 2010 compared to $7.2 billion at December 31, 2009.

IBC is a multi-bank financial holding company headquartered in Laredo, Texas, with 278 facilities and 440 ATMs serving 107 communities in Texas and Oklahoma.

“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts contain forward looking information with respect to plans, projections or future performance of IBC and its subsidiaries, the occurrence of which involve certain risks and uncertainties detailed in IBC’s filings with the Securities and Exchange Commission.

Copies of IBC’s SEC filings and Annual Report (as an exhibit to the 10-K) may be downloaded from the SEC filings site located at http://www.sec.gov/edgar.shtml.