IBC First Quarter Earnings Down

International Bancshares Corp. today reported earnings for the first quarter of 2007 of $18.6 million, or 29 cents diluted earnings per common share and 30 cents basic earnings per common share, as compared to $24 million or 37 cents diluted earnings per common share and 38 cents basic earnings per common share for the same period of 2006.
Net income for the first quarter of 2007 was negatively impacted by an impairment charge of $13.1 million, after tax, on certain investments. A significant portion of the impairment charge is a result of the company’s strategic identification of certain investment securities to be sold in 2007 with the proceeds from the sales to be used to reduce Federal Home Loan Bank borrowings.
Net income for the first quarter of 2006 was negatively impacted by a $8.9 million, net of tax, charge to operations as a result of the loss of an IRS tax lawsuit that was litigated during the third quarter of 2005 in the Federal District Court in San Antonio and relates to certain leasing transactions previously discussed in Footnote 17 of the Notes to Consolidated Financial Statements set forth in the company’s 2006 Annual Report.
“I’m pleased with the first quarter earnings of 2007 despite the impairment charge related to the investment securities. The company believes the re-positioning of the balance sheet to a more neutral position in terms of interest rate risk will positively impact the company’s operations in the long-term.” Dennis E. Nixon, president and CEO, said.



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