International Bancshares Corporation has reported net income for the first six months of 2008 of $66.5 million, or $.97 per share – basic compared to $53.2 million, or $.77 per share – basic for the first six months of 2007, which represents an increase of 25.0 percent in net income and 27.6 percent in diluted earnings per share.
Net income for the second quarter of 2008 was $33.0 million or $.48 per share – basic compared to $34.6 million or $.50 per share – basic for the second quarter 2007, which represents a decrease of 4.6 percent in net income and a decrease of 4.0 percent in diluted earnings per share.
Net income for the second quarter of 2008 was negatively impacted by a pre-tax increase in the provision for possible loan losses of $3.0 million in connection with an energy-related commercial borrower. The energy-related borrower filed for bankruptcy protection on July 22, 2008. The total allowance allocated to the credit was derived from a range of values using information currently available, including information provided by a nationally recognized financial advisor. The provision for possible loan losses considers both the value of the borrower as a going concern and its liquidation value. The Company will continue to monitor the credit and adjust the allowance allocated to the credit as needed.
Net income for the first six months 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 sold in 2007 with the proceeds from the sales used to reduce Federal Home Loan Bank borrowings.