<PAGE>
INTERNATIONAL BANCSHARES CORPORATION
POST OFFICE DRAWER 1359
LAREDO, TEXAS 78042-1359
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 18, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
International Bancshares Corporation (the "Company") will be held at the
offices of the Company, 1200 San Bernardo, Laredo, Texas, on May 18, 2000 at
7:00 p.m. for the following purposes:
(1) To elect ten (10) directors of the Company to serve until the next
Annual Meeting of Shareholders and until their successors shall have
been duly elected and qualified;
(2) To approve the appointment of independent auditors for the 2000 fiscal
year;
(3) To transact such other business as may lawfully come before the
meeting or any adjournment thereof.
The record date for the meeting has been fixed at April 6, 2000. Only
shareholders of record at the close of business on that date will be entitled to
vote at the meeting or any adjournment thereof.
In order to ensure the representation of a quorum at the meeting,
shareholders who do not expect to attend the meeting in person are urged to sign
the enclosed proxy and return it promptly to the Trust Division, International
Bank of Commerce, P. O. Drawer 1359, Laredo, Texas 78042-1359. A return envelope
is enclosed for that purpose.
INTERNATIONAL BANCSHARES CORPORATION
Dennis E. Nixon
President
Dated: April 14, 2000
<PAGE>
INTERNATIONAL BANCSHARES CORPORATION
1200 SAN BERNARDO AVENUE
LAREDO, TEXAS 78040
------------------------
PROXY STATEMENT
------------------------
SOLICITATION AND REVOCATION OF PROXIES
The accompanying proxy is solicited by the Board of Directors of
International Bancshares Corporation, a Texas Corporation (the "Company") to
be voted at the 2000 Annual Meeting of Shareholders to be held on May 18, 2000
at 7:00 p.m. at the offices of the Company, 1200 San Bernardo, Laredo, Texas.
The Company will bear the cost of such solicitation. It is expected that the
solicitation of proxies will be primarily by mail. Proxies may be solicited
personally by regular employees of the Company at a nominal cost. Any
shareholder giving a proxy has the power to revoke it at any time prior to the
voting of the proxy by giving notice in person or in writing to the Secretary of
the Company or by appearing at the Annual Meeting and voting in person. The
approximate date on which this proxy statement and the accompanying form of
proxy are first sent or given to security holders is April 14, 2000.
VOTING AT MEETING
Only holders of record of common stock, par value $1.00 per share ("Common
Stock"), of the Company at the close of business on April 6, 2000, shall be
entitled to vote at the meeting. There were 17,260,436 shares of Common Stock
issued and outstanding on the record date held of record by approximately 1,916
shareholders. Each share of Common Stock is entitled to one vote.
All shares entitled to vote represented by a properly executed and
unrevoked proxy received in time for the meeting will be voted at the meeting in
accordance with the instructions given, but in the absence of instructions to
the contrary, such shares will be voted affirmatively. Persons empowered as
Proxies will also be empowered to vote in their discretion upon such other
matters as may properly come before the meeting or any adjournment thereof. If
any nominee shall be unable to serve, which is not now contemplated, the proxies
will be voted for such substitute nominee(s) as the Board of Directors
recommends.
A quorum for the transaction of business at the Annual Meeting requires
representation, in person or by proxy, of the holders of a majority of the
issued and outstanding shares of Common Stock. The judges of election will treat
abstentions and broker non-votes as shares that are present for purposes of
determining the presence of a quorum for the transaction of business at the
meeting. A quorum with respect to any specific matter to be voted on at the
Annual Meeting requires representation, in person or by proxy, of the holders of
a majority of the issued and outstanding shares of Common Stock entitled to vote
on the matter. Abstentions will be treated as present and entitled to vote with
respect to any matter submitted to the shareholders for a vote for purposes of
determining both the presence of a quorum with respect to such matter and the
approval of such matter. If a broker indicates on a proxy that it does not have
discretionary authority as to certain shares to vote on a particular matter, the
holder(s) of such shares will not be considered as present and entitled to vote
with respect to such matter for purposes of determining either the presence of a
quorum with respect to such matter or the approval of such matter. With respect
to any matter other than the election of directors, such matter shall be
determined by the affirmative vote of the holders of a majority of the shares of
Common Stock represented, in person or by proxy, at the meeting and entitled to
vote thereon. Thus, abstention with respect to any such matter will have the
same legal effect as a vote against such matter, while broker non-votes will not
affect the outcome of such matter. With respect to the election of directors,
the directors shall be elected by a plurality vote of the holders of shares of
Common Stock present at the meeting and entitled to vote thereon.
1
<PAGE>
PROPOSAL - 1
ELECTION OF DIRECTORS
Ten directors, constituting the entire Board of Directors, are to be
elected at the Annual Meeting. Each director is to hold office until the next
Annual Meeting and until his/her successor is elected and qualified. The Proxies
named in the accompanying proxy, who have been designated by the Board of
Directors of the Company, intend to vote for the following nominees, all of whom
are currently directors, except for Daniel B. Hastings, Jr., unless otherwise
instructed in such proxy. Certain information concerning each nominee is set
forth below, including information regarding each nominee's positions with
International Bank of Commerce, the Company's lead bank subsidiary ("IBC"):
<TABLE>
<CAPTION>
SERVED AS
NOMINEE FOR DIRECTOR
DIRECTOR SINCE(1)(3) AGE PRINCIPAL OCCUPATION(2)
- ------------------------------ ------------ --- -------------------------------------
<S> <C> <C> <C>
Lester Avigael................ 1966 73 Retail Merchant and Director of IBC
Irving Greenblum.............. 1981 70 Retail Merchant (Muebleria Mexico,
S.A.)
R. David Guerra............... 1993 47 Vice President of the Company since
1986 and President of the IBC branch
in McAllen, Texas and Director of IBC
Daniel B. Hastings Jr......... -- 52 Licensed U.S. Custom Broker and
Director of IBC
Richard E. Haynes............. 1977 57 Attorney at Law; Real Estate
Investments; and Director of IBC
Sioma Neiman.................. 1981 72 International entrepreneur
Peggy J. Newman............... 1997 68 Real Estate Investments; President of
Newman Poultry Co. and Director of
IBC since 1996
Dennis E. Nixon............... 1975 57 Chairman of the Board of the Company
since May 1992 and President of the
Company since 1979; President, Chief
Executive Officer and Director of IBC
Leonardo Salinas.............. 1976 66 Vice President of the Company since
1982; Senior Executive Vice President
and Director of IBC
Antonio R. Sanchez, Jr........ 1995 57 Chairman of the Board of Sanchez Oil
& Gas Corporation; Investments; and
Director of IBC
</TABLE>
- ------------
(1) Includes time served as director of IBC prior to July 28, 1980 when the
Company became the successor issuer to IBC.
(2) Except as otherwise noted, each nominee has held the office indicated or
other offices in the same company for the last five years.
(3) Roy Jennings, Jr. who had served as a director since 1966 passed away on
November 11, 1999.
None of the nominees for director and none of the executive officers of the
Company have a family relationship with any of the other nominees for director
or executive officers.
None of the above nominees is a director of any other company which has a
class of securities registered under, or is required to file reports under, the
Securities Exchange Act of 1934 or of any company registered under the
Investment Company Act of 1940, except for Mr. Sanchez who is Chairman of the
Board of Sanchez Oil & Gas Corporation and serves as director of Conoco Oil and
Zixit Corporations.
EXECUTIVE OFFICERS
The executive officers of the Company are Dennis E. Nixon, President and
Chairman of the Board; Leonardo Salinas, Vice President; R. David Guerra, Vice
President; and Imelda Navarro, Treasurer, all of whom are nominees for director
except for Imelda Navarro. Imelda Navarro, age 42 is presently Treasurer
2
<PAGE>
of the Company and Senior Executive Vice President of IBC and has served IBC
since 1975 and the Company since 1982.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Audit Committee of the Board of Directors during 1999 consisted of
Lester Avigael, Irving Greenblum and Richard E. Haynes. The Committee met five
times during the 1999 fiscal year. Each member of the Committee attended all
five meetings except for Mr. Irving Greenblum who missed one meeting. The
functions of the Audit Committee are to recommend the appointment of the
independent auditors; to review the annual plan of the internal and independent
auditors; to review annual and quarterly financial reports and to review the
results of examinations by the internal auditor and the independent auditors,
including recommendations regarding internal controls and operating procedures,
along with management's response and follow-up to ensure any necessary
corrective action has been implemented. Under applicable law, the Audit
Committee is required to review with management and the independent auditors the
basis for all financial reports.
The Stock Option Plan Committee of the Board of Directors during 1999
consisted of Lester Avigael, Roy Jennings Jr., and Richard E. Haynes. The
Committee met three times during the 1999 fiscal year. Each member of the
Committee attended the three meetings with the exception of Mr. Jennings who
attended two of the three meetings. The primary function of the Stock Option
Plan Committee is the administration of the 1996 International Bancshares
Corporation Stock Option Plan.
The Board of Directors of the Company does not have a standing nominating
committee or a committee which performs similar functions.
During 1999, the Board of Directors held six meetings. All of the directors
attended at least 75% of the aggregate of the total number of meetings of the
board and of committees on which they served, except for Sioma Neiman and
Antonio R. Sanchez, Jr. who attended fewer than 75% of such meetings.
PRINCIPAL SHAREHOLDERS
Insofar as is known to the Company, no person beneficially owned, as of
April 6, 2000, more than five percent of the outstanding Common Stock of the
Company, except as follows:
SHARES OF COMMON STOCK
NAME AND ADDRESS BENEFICIALLY OWNED AS PERCENT
OF BENEFICIAL OWNER OF APRIL 6, 2000 OF CLASS
- ------------------------------------- ---------------------- --------
Alicia M. Sanchez (1)................ 3,151,300 18.23%
2119 Guerrero Street
Laredo, Texas 78040
A.R. Sanchez Jr. (2)................. 1,693,729 9.80%
P.O. Box 2986
Laredo, Texas 78040
- ------------
(1) All the shares shown for Mrs. Alicia M. Sanchez are held by certain trusts
and a family limited partnership for which Mrs. Sanchez serves as sole
trustee or general partner. Mrs. Sanchez has the sole power to vote and to
dispose of all of the shares held by such trusts and the family limited
partnership. Mrs. Sanchez is the mother of A. R. Sanchez Jr.
(2) A. R. Sanchez Jr. owns directly and has the sole power to vote and to
dispose of 1,008,309 shares owned beneficially by him. Mr. Sanchez also
controls the disposition of 682,764 shares as trustee for trusts in which
his children have a vested interest in the income and corpus of such trusts,
however, George M. Sanchez, the brother of Mr. Sanchez, has the power to
vote the 682,764 shares. Mr. Sanchez also has the power to vote and dispose
of 2,656 shares which were gifted to the A. R. Sanchez and Maria J. Sanchez
Foundation.
3
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
Based upon information received from the persons concerned, each of whom is
a director and nominee for director, the following individuals and all directors
and executive officers of the Company as a group owned beneficially as of April
6, 2000, the number and percentage of outstanding shares of Common Stock of the
Company indicated in the following table:
NAME OF INDIVIDUAL SHARES BENEFICIALLY OWNED PERCENT
OR IDENTITY OF GROUP AS OF APRIL 6, 2000 OF CLASS
- ------------------------------------- ------------------------- --------
Lester Avigael (1)................... 147,288 *
Irving Greenblum (2)................. 164,268 *
R. David Guerra (3).................. 136,516 *
Daniel B. Hastings, Jr. ............. 0 *
Richard E. Haynes.................... 14,183 *
Sioma Neiman (4)..................... 507,698 2.94%
Peggy J. Newman...................... 4,050 *
Dennis E. Nixon (5).................. 856,046+ 4.95%
Leonardo Salinas..................... 60,048 *
A. R. Sanchez Jr. (6)................ 1,693,729 9.80%
All Directors and Executive Officers
as a group (12 persons) (7)........ 3,794,903 21.96%
- ------------
* Ownership of less than one percent
+ Include shares which are issuable upon the exercise of options exercisable
on or prior to June 1, 2000 ("currently exercisable options").
(1) The holdings shown for Mr. Avigael include 100,000 shares held in the name
of Avigael Investments which he has the power to vote and 13,026 shares
which he holds as trustee for the benefit of his grandchildren.
(2) The holdings shown for Mr. Greenblum include 83,332 shares held in two
trusts for the benefit of himself and his wife.
(3) The holdings shown for Mr. Guerra include 3,477 shares which are issuable
upon the exercise of currently exercisable options. The holdings shown for
Mr. Guerra include 133,039 shares which he and his wife hold in their names
jointly.
(4) The holdings shown for Mr. Neiman include 507,698 shares in the name of Inar
Investments, Corp., of which he is the Managing Director.
(5) The holdings shown for Mr. Nixon include 31,982 shares which are issuable
upon the exercise of currently exercisable options. The holdings shown for
Mr. Nixon also include 2,841 shares held in the name of his wife.
(6) The holdings shown for Mr. A. R. Sanchez Jr. include 815,759 shares which he
owns directly and has the sole power to dispose of and to vote. Mr. Sanchez
also controls the disposition of 546,212 shares as trustee for trusts in
which his children have a vested interest in the income and corpus of such
trusts, however, George M. Sanchez, the brother of Mr. Sanchez, has the
power to vote the 546,212 shares. Mr. Sanchez also has the power to vote and
dispose of 2,125 shares which were gifted to the A. R. Sanchez and Maria J.
Sanchez Foundation.
(7) The holdings shown for all directors and executive officers as a group
include 47,675 shares which are issuable upon the exercise of currently
exercisable options and includes the 142,854 shares owned by the Estate of
Roy Jennings, Jr.
Except as reflected in the notes to the preceding table, each of the
individuals listed in the table owns directly the number of shares indicated in
the table and has the sole power to vote and to dispose of such shares.
4
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY
The following table contains information concerning the compensation
awarded during each of the last three years for the Chief Executive Officer of
the Company and the other most highly compensated executive officers of the
Company whose total annual salary and bonus exceeded $100,000 in 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION ALL OTHER
NAME AND --------------------------------- SECURITIES COMPENSATION
PRINCIPAL POSITION YEAR SALARY (1) BONUS (2) UNDERLYING OPTIONS (3)
- ------------------------------------- --------- ---------- --------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
Dennis E. Nixon...................... 1997 320,005 800,000 14,275 10,416
Chairman of the Board, 1998 341,482 1,000,000 -- 11,678
President and Director of 1999 348,995 1,000,000 -- 11,648
the Company; President,
CEO and Director of IBC
R. David Guerra...................... 1997 181,363 44,402 5,000 9,537
Vice President and 1998 189,023 45,520 -- 11,355
Director of the Company; 1999 188,586 35,269 2,500 11,605
President of IBC branch
in McAllen, Texas and
Director of IBC
Leonardo Salinas..................... 1997 109,770 13,975 -- 6,172
Vice President and 1998 111,270 13,815 -- 7,080
Director of the Company; 1999 112,070 14,287 -- 7,058
Director and Senior
Executive Vice President
of IBC
Imelda Navarro....................... 1997 80,300 22,552 2,850 5,254
Treasurer of the Company 1998 103,425 25,733 5,000 7,606
Senior Executive Vice 1999 130,154 29,668 1,750 8,887
President of IBC
</TABLE>
- ------------
(1) These amounts do not include certain perquisites and other personal
benefits, securities or property received by the officers which did not
exceed the lesser of $50,000 or 10% of such executive officer's total salary
and bonus set forth in the table; however, such amounts include directors
fees as well as certain expense allowances. All cash compensation paid to
the named officers was paid by IBC. The Company does not pay any cash
compensation to any officer.
(2) All amounts shown in this column are discretionary cash bonuses except
$500,000 paid to Mr. Nixon for services rendered in 1999 pursuant to the
Executive Incentive Compensation Plan.
(3) All amounts shown in this column consist of funds contributed or allocated
by the Company pursuant to the Company's Employee Profit Sharing Plan and
Trust, a deferred profit sharing plan for employees with one year of
continual employment.
Each director of the Company and each director of IBC receives compensation
for his services as a director in the amount of $800 for each meeting of the
Board he attends and $300 for each meeting of a committee of the Board he
attends. Salaried officers who are directors are not compensated for committee
meetings. The director fees paid to the named executive officers are included in
the salary totals set forth in the table.
5
<PAGE>
STOCK OPTIONS
During 1999, the Company granted certain options to the named executive
officers of the Company. The following table reflects certain information
concerning grants of options made by the Company during 1999 to the named
executive officers of the Company:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERCENT OF
TOTAL POTENTIAL REALIZABLE VALUE
NUMBER OF OPTIONS AT ASSUMED ANNUAL RATES OF
SECURITIES GRANTED TO STOCK PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE OR FOR OPTION TERM
OPTIONS IN FISCAL BASE PRICE EXPIRATION ---------------------------
GRANTED(1) YEAR ($/SH) DATE 5% ($) (2) 10% ($) (2)
------------ ----------- ------------ -------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
R. David Guerra...................... 2,500 1.33% 38.00 06/03/2007 45,334 108,604
Imelda Navarro....................... 1,750 0.93% 38.00 06/03/2007 31,730 76,038
</TABLE>
- ------------
(1) The options shown in the table are incentive stock options within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended each
of which were granted under the Company's 1996 International Bancshares
Corporation Stock Option Plan with an exercise price equal to the fair
market value on the date of grant. Twenty percent of these options become
exercisable on the anniversary date of the option grant during each of the
five years beginning June 3, 2000 and will expire eight years from the date
of grant, subject to earlier termination pursuant to the terms and
provisions of the Plan and the Stock Option Agreement.
(2) The dollar amounts shown are based on certain assumed rates of appreciation
and the assumption that the options will not be exercised until the end of
the expiration periods applicable to the options. Actual realizable values,
if any, on stock option exercises and common stock holdings are dependent on
the future performance of the Company's common stock and overall stock
market conditions. There can be no assurances that the amounts reflected
will be achieved.
The following table reflects certain information regarding individual
exercises of stock options with respect to the Common Stock during 1999 and
through April 6, 2000 by each of the named executive officers of the Company.
AGGREGATED OPTION EXERCISES IN 1998
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
UNDERLYING VALUE OF
SHARES OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES 12/31/99 12/31/99
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
NAME (#) ($) (1) (#) ($) (1)
- ---------------------------------------- ----------- -------- ------------- ---------------
<S> <C> <C> <C> <C>
Dennis E. Nixon......................... -0- -0- 31,982/11,153 533,945/109,230
R. David Guerra......................... 6,259 124,697 3,480/6,407 56,200/43,280
Imelda Navarro.......................... -0- -0- 13,466/7,726 221,750/31,280
</TABLE>
- ------------
(1) Based on market value of underlying shares minus aggregate exercise price.
REPORT OF THE SALARY AND STEERING COMMITTEE
The Company's compensation package for each of its executive officers
consists of base salary, annual discretionary bonus and a discretionary
incentive stock option grant. Also, certain executive officer(s) may receive
compensation pursuant to the Company's Executive Incentive Compensation Plan.
Stock option grants are determined by the Company's Compensation Committee and
are discussed under the Committee's separate report below. All cash compensation
paid to executive officers of the Company is paid by
6
<PAGE>
IBC. Base salary levels and annual bonuses are recommended by the Salary and
Steering Committee of IBC (the "Committee").
The Committee's recommendations regarding each executive officer's
compensation is subjective with regard to both the base salary and bonus. The
annual financial performance of IBC is the most important factor in the
subjective analysis. The bonus program is intended to compensate each executive
officer for the officer's contribution to IBC's financial performance during the
previous year. At the end of each year based on the financial performance of IBC
and the perceived contribution by each executive officer, a base salary
recommendation for the next year and a bonus recommendation for the previous
year is made for each executive officer by the Committee. The overall bonus pool
for executive officers is affected by the earnings performance of IBC for the
previous year. All base salary and bonus recommendations of the Committee are
subject to final approval of the Board of Directors of IBC.
With respect to the compensation of Mr. Nixon, the CEO of the Company, the
Committee recommends to the Board of Directors the CEO's salary and bonus based
on its subjective determination. In determining the CEO compensation, the
Committee reviews the objectives of the Company for the previous year and the
attainment thereof, principally including the Company's financial performance.
For services rendered to IBC in 1999, Mr. Nixon received a cash bonus under
IBC's discretionary cash bonus program of $500,000. During 1999, the Company met
both the return on average total assets and the return on average total
shareholders' equity targets established pursuant to the 1998 Executive
Incentive Compensation Plan (the "EICP") by the Committee. Accordingly, Mr.
Nixon received an incentive award under the EICP of $500,000 for services
rendered to the Company during 1999. The amounts of the cash bonus and the
incentive award were largely affected by the strong financial results of the
Company during 1999, which included (i) net income of $66.2 million, or $4.11
per share-basic, an amount which represents a 28% increase in earnings per share
compared to the previous year, (ii) the Company's excellent return on average
total assets of 1.31% and (iii) the Company's strong return on average total
shareholders' equity of 17.88%.
The Salary and Steering Committee has considered the limitations on
deductibility of compensation of the named executive officers under Section
162(m) of the Internal Revenue Code. The Steering Committee's current policy is
to ensure that substantially all such compensation is deductible under Section
162(m) when paid.
Lester Avigael Roy Jennings, Jr.
Richard E. Haynes Dennis E. Nixon
REPORT OF THE STOCK OPTION PLAN COMMITTEE
The Stock Option Plan Committee of the Board of Directors determines the
stock option grants to executive officers and key salaried employees of the
Company. During 1999, the Stock Option Plan Committee met and granted options to
purchase a total of 186,900 shares of Common Stock to several of the key
salaried employees of the Company. The primary purpose of the Company's Stock
Option Plan is to increase the interest of the executive and key salaried
employees of the Company and the subsidiary banks in its future growth and
success through the added incentive created by the opportunity afforded for
stock ownership under the Plan. The size of the option grants were determined by
the Stock Option Plan Committee based upon a subjective assessment of the
respective employee's performance, compensation level and other factors. The
exercise price of each option equaled the fair market value of the Common Stock
as of the date of grant.
Lester Avigael Roy Jennings Jr. Richard E. Haynes
SALARY AND STEERING COMMITTEE AND STOCK OPTION PLAN COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
The Salary and Steering Committee members during 1999 were Lester Avigael,
Richard E. Haynes and Roy Jennings, Jr. Mr. Nixon, President and Chairman of the
Board of the Company and President and
7
<PAGE>
CEO of IBC, is consulted with respect to compensation decisions for all
executives and key salaried employees other than for himself. Stock Option
grants are determined by the Stock Option Plan Committee whose members were
Lester Avigael, Richard E. Haynes and Roy Jennings Jr. Messrs. Richard E. Haynes
and Dennis E. Nixon each have total indebtedness outstanding with the Company
and/or the subsidiary banks of the Company in an amount which exceeds $60,000,
which indebtedness is fully performing and is included in the disclosure
regarding the aggregate amount receivable to the banks and the Company from
certain related parties of the Company set forth on pages 9 and 10, under the
caption "Interest of Management in Certain Transactions".
FINANCIAL PERFORMANCE
The following graph illustrates the cumulative return experienced by the
Company's shareholders for the period commencing on December 31, 1994 and ending
at year end 1999 as compared with the cumulative total returns of the other
companies included within the Standard & Poor's 500 Stock Index and Standard &
Poors Regional Banks Index. The calculations were prepared on a
dividends-reinvestment basis.
TOTAL RETURN ANALYSIS
INTERNATIONAL BANCSHARES CORPORATION
VS. MARKET INDICES
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
1994 1995 1996 1997 1998 1999
---- ------ ------ ------ ------ ------
Int. Bchs. Corp....... 100 97.22 147.33 270.83 225.92 254.72
S & P 500............. 100 137.58 169.17 225.6 290.08 351.12
S & P Regional Banks.. 100 157.46 215.15 323.51 357.44 306.69
INTEREST OF MANAGEMENT IN
CERTAIN TRANSACTIONS
Some of the directors, executive officers and nominees for directors of the
Company and IBC and principal shareholders of the Company and their immediate
families and the companies with which they are
8
<PAGE>
associated were customers of, and had banking transactions with, the Company's
subsidiary banks in the ordinary course of the subsidiary banks' business during
1999, and the Company anticipates that such banking transactions will continue
in the future. All loans and commitments to loan included in such banking
transactions were made in the ordinary course of business, on substantially the
same terms, including interest rates and collateral, as those prevailing in the
industry at the time for comparable transactions with non-insiders, and, in the
opinion of management of the Company, did not involve more than a normal risk of
collectibility or present other unfavorable features.
At December 31, 1999, loans outstanding made by the Company and all
subsidiary banks to directors, executive officers and nominees for directors of
the Company (not including those executive officers and directors who only serve
at the bank subsidiaries) and principal shareholders of the Company and to
persons or entities affiliated with such individuals aggregated $36,379,016.56.
At December 31, 1999, all of such loans were current with respect to principal
and interest.
During 1994, the Company obtained approval from the Federal Reserve Bank of
Dallas to engage in the activity of making loans to certain of its executive
officers, directors, affiliates, and principal shareholders, and to certain
executive officers and directors and their related interests of the subsidiary
banks. In connection with such approval, the Company committed that all loans
would be on terms and under circumstances, including credit standards, that are
substantially the same or at least as favorable to the Company as those
prevailing at the time for comparable transactions with or involving other
non-affiliated borrowers, or in the absence of comparable transactions, on terms
and under circumstances, including credit standards, that in good faith would be
offered to or would apply to non-affiliated companies. As of December 31, 1999,
loans outstanding made by the Company to such persons or entities aggregated
$4,668,701 and all of said loans, which are described in the following
paragraph, were made on terms and under circumstances consistent with the
commitment made by the Company to the Federal Reserve Bank of Dallas.
As of December 31, 1999, IBC Partners Investment Joint Venture and IBC
Partners Organizational Joint Venture were indebted to the Company in the amount
of $63,435 and $241,920, respectively. The two loans were extended as part of a
single credit facility in connection with the formation of IBC Partners, Ltd.
The two joint ventures are controlled by certain directors and executive
officers of the Company or its subsidiary banks. The joint ventures repaid
$103,063 and $172,561, respectively, on the credit facility during 1999. As of
December 31, 1999, Dennis E. Nixon and his related interests were indebted to
the Company in the amount of $4,423,701 in connection with three real estate and
two consumer related loans. Mr. Nixon and his related interests repaid $415,110
on the related loans during 1999. As of December 31, 1999, R. David Guerra and
his related interests were indebted to the Company in the amount of $245,000 in
connection with two consumer loans. At December 31, 1999, all of the loans
outstanding in the aggregate principal amount of $4,668,701 (as described in
this paragraph and the foregoing paragraph) were current with respect to
principal and interest.
IBC and Sanchez Oil & Gas Corporation, a related interest of Antonio R.
Sanchez, Jr., who is a director and principal shareholder of the Company,
jointly own, in varying percentages certain aircraft used for business purposes
by IBC, the other bank subsidiaries and Sanchez Oil and Gas Corporation. The net
book value of IBC's aggregate interest in all of the aircraft as of April 6,
2000 was approximately $3.5 million. Each bank subsidiary and Sanchez Oil and
Gas Corporation pay the pro rata expense related to their actual use of the
aircraft.
FILING OF BENEFICIAL OWNERSHIP REPORTS
Under the securities laws of the United States, the Company's directors,
its executive officers and any persons holding more than ten percent of the
Company's Common Stock are required to report their initial ownership of the
Company's Common Stock and any subsequent changes in that ownership to the
Securities and Exchange Commission. Specific due dates for these reports have
been established and the Company is required to disclose in this proxy statement
any failure to file such reports by the applicable dates during 1999. The
Company believes that all of these filing requirements were timely satisfied. In
making these disclosures, the Company has relied solely on written
representations of its directors,
9
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executive officers and its ten percent holders and copies of the reports that
they have filed with the Commission.
PROPOSAL - 2
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed the firm of KPMG LLP to
audit the accounts of the Company for the 2000 fiscal year. The firm has audited
the books of the Company and its predecessor, IBC, annually since 1979.
Audit services rendered by KPMG LLP for the fiscal year ended December 31,
1999 included the annual examination of the Company's financial statements,
including reports to shareholders and the Securities and Exchange Commission;
and consultation on accounting and related matters and services performed in
connection with other regulatory filings.
Representatives of KPMG LLP are expected to be present at the annual
meeting of shareholders with the opportunity to make a statement if they desire
to do so and are expected to be available to respond to appropriate questions.
Approval of the appointment of independent auditors is not a matter which
is required to be submitted to a vote of shareholders, but the Board of
Directors considers it appropriate for the shareholders to express whether they
approve or withhold their approval of the appointment. If shareholder approval
should be withheld, the Board of Directors would consider an alternative
appointment for the succeeding fiscal year. The Board of Directors of the
Company recommends that the shareholders approve the appointment of KPMG LLP as
the independent auditors. The affirmative vote of a majority of the shares
present and entitled to vote thereon will constitute approval.
SHAREHOLDER PROPOSALS FOR YEAR 2001 ANNUAL MEETING
The 2001 Annual Meeting of Shareholders will be held on May 17, 2001.
Proposals from shareholders intended to be presented at the 2001 Annual Meeting
must be received in writing by the Company at its principal executive offices
not later than December 20, 2000. The Company's principal executive offices are
located at 1200 San Bernardo Avenue, Laredo, Texas 78040.
OTHER MATTERS
No business other than the matters set forth in this proxy statement is
expected to come before the meeting, but should any other matters requiring a
vote of shareholders arise, including a question of adjourning the meeting, the
persons named in the accompanying proxy will vote thereon according to their
best judgment in the interest of the Company. In the event that any of the
nominees for director should withdraw or otherwise become unavailable for
reasons not presently known, the persons named as Proxies will vote for such
substitute nominee(s) as the Board of Directors recommends, or in the absence of
such recommendation, such other persons as they consider to be in the best
interests of the Company.
INTERNATIONAL BANCSHARES CORPORATION
Dennis E. Nixon
President
Dated: April 14, 2000
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THE COMPANY WILL PROVIDE SHAREHOLDERS WITH A COPY OF THE COMPANY'S ANNUAL REPORT
ON FORM 10-K, FOR THE PERIOD ENDED DECEMBER 31, 1999, INCLUDING FINANCIAL
STATEMENTS AND SCHEDULES, WITHOUT CHARGE, UPON WRITTEN REQUEST ADDRESSED TO THE
TREASURER OF THE COMPANY, MS. IMELDA NAVARRO AT:
INTERNATIONAL BANCSHARES CORPORATION
P. O. DRAWER 1359
LAREDO, TEXAS 78042-1359
(956) 722-7611 EXTENSION 6222
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FRONT SIDE OF PROXY
________________________________________________________________________________
PROXY INTERNATIONAL BANCSHARES CORPORATION PROXY
FOR THE ANNUAL MEETING OF SHAREHOLDERS
CALLED FOR MAY 18, 2000
The undersigned shareholder(s) of International Bancshares Corporation, a Texas
corporation (the "Company"), hereby appoints Lester Avigael, Irving Greenblum,
and Richard E. Haynes, and each of them, as Proxies, each with power to appoint
his substitute, and hereby authorizes them to vote, as designated below, all the
shares of Common Stock which the undersigned may be entitled to vote at the
Annual Meeting of Shareholders of the Company, to be held on Thursday, May 18,
2000 at 7:00 P.M., local time, and at any adjournment of such meeting, with all
powers which the undersigned would possess if personally present:
1. ELECTION OF DIRECTORS. Nominees: L. Avigael, I. Greenblum, R.D. Guerra, R.E.
Haynes, D. B. Hastings, Jr., S. Neiman, P. J. Newman, D.E. Nixon, L. Salinas,
A. R. Sanchez, Jr.
FOR, all nominees FOR, all nominees listed WITHHOLD AUTHORITY, to vote
listed above [ ] above, except for the for all nominees listed
nominee(s) set forth on above [ ]
the line below [ ]
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name on the line provided below.)
_________________________________________________________________
A vote FOR all nominees is recommended by the Board of Directors.
2. PROPOSAL TO APPROVE THE APPOINTMENT OF KPMG LLP as the independent auditors
of the Company for the 2000 fiscal year.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
A vote FOR the above proposal is recommended by the Board of Directors.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
________________________________________________________________________________
<PAGE>
BACK SIDE OF PROXY
________________________________________________________________________________
3. In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the meeting.
EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS
MADE THEREON. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED "FOR" ALL
THE NOMINEES AND "FOR" PROPOSAL 2 ABOVE.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement of the Company dated April 14, 2000.
Dated: _____________, 2000 _______________________________________________
Signature(s)
_______________________________________________
(Signature should agree with name of Stock
Certificate as stenciled thereon. Executors,
Administrators, Trustees, etc. should so
indicate when signing).
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO ITS EXERCISE
I [ ]do [ ]do not Plan to Attend the Meeting.
________________________________________________________________________________
