IBOC International Bancshares Corporation

International Bancshares Corporation ("IBC") (NASDAQ:IBOC) today reported net income for the third quarter of 2005 of $35.5 million or $.56 per share - basic ($.55 per share - diluted) compared to $33.2 million or $.52 per share - basic ($.51 per share - diluted) for the third quarter of 2004, which represents an increase of 6.9 percent in net income and 7.8 percent in diluted earnings per share. Net income for the first nine months of 2005 was $106.5 million, or $1.67 per share - basic ($1.65 per share diluted) compared to $85.9 million, or $1.39 per share - basic ($1.36 per share diluted) for the first nine months of 2004, which represents an increase of 24.0 percent in net income and 21.3 percent in diluted earnings per share. Net income for the first nine months was positively impacted by the acquisition of Local Financial Corporation ("LFIN") in June 2004 and by cash distributions of $5,613,000, net of tax, from the January 2005 merger of the PULSE EFT Association with Discover Financial Services, a business unit of Morgan Stanley, received in the first and second quarter 2005. Members of the PULSE EFT Association received these cash distributions based in part upon their volume of transactions through the PULSE network. "I'm pleased with the Company's third quarter earnings, as well as the results of the first nine months," said Dennis E. Nixon, Chairman and CEO of International Bancshares Corporation. "The Company has continued to show strong earnings for the first nine months of 2005, clearly reflecting the Company's commitment to maintain solid earnings. I am also pleased with the Company's integration of Local Financial Corporation into the operations of IBC with most of the Company's consolidation objectives being met." Total assets at September 30, 2005 were $10.3 billion compared to $9.9 billion at December 31, 2004. Total net loans were $4.6 billion at September 30, 2005 and $4.8 billion at December 31, 2004. Total deposits were $6.5 billion at September 30, 2005 compared to $6.6 billion at December 31, 2004. "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts contain forward-looking information with respect to plans, projections 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. IBC is a $10.3 billion multi-bank financial holding company headquartered in Laredo, Texas, with more than 190 facilities and more than 300 ATMs serving more than 75 communities in Texas and Oklahoma.