IBC Announces Branch Closings in Response to New Banking Regulations, Stresses Commitment to Customer Service and Free Products Program

International Bancshares Corporation announced today its decision to close 55 of its smaller in-store branches located in grocery stores. The closings are an unfortunate result of recently passed banking regulations that limit how much banks can charge stores for debit card transactions. This action is being taken to align the Company's expenses with the reduced levels of revenue, protecting the Company's financial strength while preserving IBC's free products program. Currently, every time a consumer uses a debit card at a store, that store is charged a fee (interchange fee) to help pay for the transaction. IBC has used those fees to help offer its customers free products and services and to cover other costs. “In reaction to these new requirements that limit these fees, other banks have already cut their free offerings and rewards programs, but IBC is committed at this time to keeping free products and services because that is what our customers want,” said Dennis Nixon, IBC Chairman and CEO. Nixon further commented: “Government many times passes regulations that end up hurting the very people they were intended to help. This appears to be one of those cases. Our customers have always made it clear to us that free products and services are extremely important to them. To keep those free offerings in place, we will have to reduce expenses. This means we will close 55 of our smaller in-store branches located in grocery stores.” The closing of 55 branches will result in the elimination of approximately 500 permanent job positions associated with these branches. During the next 90 days, employees will be reduced by attrition or absorbed in other branches. Nixon emphasizes that IBC customers will not see a drop in service.