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): September 22, 2011
INTERNATIONAL BANCSHARES CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Commission File Number 000-09439
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Texas |
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000-09439 |
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74-2157138 |
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(State or other Jurisdiction |
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(Commission File Number) |
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(I.R.S. Employer |
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of incorporation or organization) |
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Identification No.) |
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1200 San Bernardo, Laredo, Texas |
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78040-1359 |
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(Address of principal executive offices) |
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(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);
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 250.13e-4 (c))
Item 2.05 Costs Associated with Exit or Disposal Activities
On September 18, 2011, the Board of Directors of International Bank of Commerce (“IBOC”), the lead bank subsidiary of International Bancshares Corporation (“IBC”) approved a restructuring plan that will result in the closing of fifty three (53) in store branches of IBOC, which, when added to branch closures approved by the Boards of other subsidiary banks of IBC a few days earlier, will result in total IBC branch closures of fifty five (55) in store branches by December 31, 2011. The aggregate deposits attributable to the 55 branches to be closed represent approximately 1.01% of IBC’s total deposits as of June 30, 2011. The branch closures are a result of reduced levels of revenue resulting from regulatory changes related to interchange fee income. This action is being taken to align IBC’s expenses with the reduced levels of revenue, protecting the Company’s financial strength while preserving IBC’s free products program (the “Restructuring Plan”).
It is anticipated that the Restructuring Plan will result in estimated combined charges for IBC of $5.56 million, before tax, to be recognized during the third and fourth quarters of 2011, broken down as follows:
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(Dollars in millions) |
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Write-off of leasehold improvements and furniture, fixtures and equipment |
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$ |
3.82 |
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Lease contract terminations |
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$ |
1.54 |
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Other costs |
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$ |
.20 |
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Total |
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$ |
5.56 |
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These estimates are preliminary as management is still in the process of evaluating the cost of implementing the Restructuring Plan. Accordingly, the final charges may differ significantly from these estimates.
On September 22, 2011, IBC issued a news release announcing its intent to execute the Restructuring Plan, a copy of which is attached as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
99 News Release of International Bancshares Corporation dated September 22, 2011 entitled, “IBC Announces Branch Closings in Response to New Banking Regulations, Stresses Commitment to Customer Service and Free Products Program.”
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.
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INTERNATIONAL BANCSHARES CORPORATION | |
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(Registrant) | |
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By: |
/s/Dennis E. Nixon |
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Dennis E. Nixon, President and Chairman of the Board |
September 22, 2011
EXHIBIT 99
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Contact: |
Gabriela Carriedo |
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Katie Harvey |
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International Bancshares Corporation |
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KGBTexas .communications |
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(956) 726-6636 |
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(210) 826-8899 |
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katie@kgbtexas.com |
IBC Announces Branch Closings in Response to New Banking Regulations, Stresses Commitment to Customer Service and Free Products Program
(Sept. 22, 2011) Laredo, TX - International Bancshares Corporation (IBC) announced today its decision to close 55 of its smaller in-store branches located in grocery stores. The closings are an unfortunate result of recently passed banking regulations that limit how much banks can charge stores for debit card transactions. This action is being taken to align the Company’s expenses with the reduced levels of revenue, protecting the Company’s financial strength while preserving IBC’s free products program.
Currently, every time a consumer uses a debit card at a store, that store is charged a fee (interchange fee) to help pay for the transaction. IBC has used those fees to help offer its customers free products and services and to cover other costs. “In reaction to these new requirements that limit these fees, other banks have already cut their free offerings and rewards programs, but IBC is committed at this time to keeping free products and services because that is what our customers want,” said Dennis Nixon, IBC Chairman and CEO.
Nixon further commented: “Government many times passes regulations that end up hurting the very people they were intended to help. This appears to be one of those cases. Our customers have always made it clear to us that free products and services are extremely important to them. To keep those free offerings in place, we will have to reduce expenses. This means we will close 55 of our smaller in store branches located in grocery stores.”
The closing of 55 branches will result in the elimination of approximately 500 permanent job positions associated with these branches. During the next 90 days, employees will be reduced by attrition or absorbed in other branches. Nixon emphasizes that IBC customers will continue to experience superior customer service.
“We want to remind our customers that in addition to our strong network of 219 remaining branches, they can continue to access their accounts through IBC debit cards, IBC Voice, IBC Bank Online, IBC Bill Pay, IBC Mobile Banking, direct deposit services, and our network of over 375 IBC ATMs. This is what our customers asked for and this is what we intend to deliver. Our customers have told us, reduce expenses and close branches instead of eliminating our free checking products and services, so we are responding to that recommendation,” said Nixon.
IBC (NASDAQ: IBOC) is an $11.8 billion multi-bank financial holding company headquartered in Laredo, Texas with 275 facilities and 440 ATMs serving 107 communities in Texas and Oklahoma. More information is available at www.ibc.com.
“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: The statements contained in the release which are not historical facts contain forward-looking information with respect to plans, protections 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 or IBC’s website at http://www.ibc.com.