Stock Options

6 Months Ended

Jun. 30, 2012

Stock Options

Stock Options

Note 5 — Stock Options

On April 5, 2012, the Board of Directors adopted the 2012 International Bancshares Corporation Stock Option Plan (the “2012 Plan”), subject to shareholder approval of the 2012 Plan.  The Company’s shareholders approved the 2012 Plan on May 21, 2012.  There are 800,000 shares available for stock option grants under the 2012 Plan.  The 2005 International Bancshares Corporation Stock Option Plan (the “2005 Plan”) was terminated for the purpose of future stock option grants upon adoption of the 2012 Plan.  Under the 2012 Plan, both qualified incentive stock options (“ISOs”) and non-qualified stock options (“NQSOs”) may be granted.  Options granted may be exercisable for a period of up to 10 years from the date of grant, excluding ISOs granted to 10% shareholders, which may be exercisable for a period of up to only five years.  As of June 30, 2012, 800,000 shares were available for future grants under the 2012 Plan.

A summary of option activity under the stock option plans for the six months ended June 30, 2012 is as follows:

	Number of options	Weighted average exercise price		Weighted average remaining contractual term (years)	Aggregate intrinsic value ($)
					(Dollars in Thousands)
Options outstanding at December 31, 2011	844,721	$	19.08
Plus: Options granted	—	—
Less:
Options exercised	3,165	10.40
Options expired	—	—
Options forfeited	36,551	21.43
Options outstanding at June 30, 2012	805,005	19.01		4.08	2,825
Options fully vested and exercisable at June 30, 2012	396,672	23.82		2.11	526

Stock-based compensation expense included in the consolidated statements of income for the three and six months ended June 30, 2012 was approximately $122,000 and $253,000, respectively.  Stock-based compensation expense included in the consolidated statements of income for the three and six months ended June 30, 2011 was approximately $93,000 and $195,000, respectively.  As of June 30, 2012, there was approximately $1,060,000 of total unrecognized stock-based compensation cost related to non-vested options granted under the Company plans that will be recognized over a weighted average period of 1.8 years.