International Bancshares Corporation (IBOC) has announced a 15% hike in its semi-annual cash dividend. The company declared a dividend of 23 cents per share to be paid on Oct 15 to shareholders of record as of Sep 30.
Since 2009, International Bancshares has raised its semi-annual dividend twice. The last time was in Mar 2012, when the dividend was increased by nearly 5% to 20 cents per share. Earlier in 2010, the company raised the dividend approximately 12% to 19 cents.
During the financial crisis, International Bancshares slashed its semi-annual dividend by almost 50% to 17 cents per share and took $216 million of Troubled Asset Relief Program (:TARP) money in Dec 2008. Notably, in November last year, the company exited the TARP program. However, the Treasury still holds the warrants issued by the company (when it took the TARP money).
Apart from regular dividend payments, International Bancshares has an effective share repurchase policy in place. Every year since Apr 2009, the company has been announcing the extension its share buyback authorization of up to $40 million. As of Jul 31, 2013, the company had repurchased shares worth $23.8 million.
International Bancshares’ steady capital deployment program reflects its strong balance sheet position. As of Jun 30, 2013, its Tier 1 capital ratio was 19.58% and leverage ratio was 11.65%. Also, the company’s cash and due from banks was $239 million at the end of the second quarter.
International Bancshares will likely continue with its capital deployment plans going forward. This will enable it to enhance shareholders’ confidence in the stock.
Some well-performing stocks in the banking sector include Prosperity Bancshares Inc. (PB), Southside Bancshares Inc. (SBSI) and East West Bancorp, Inc. (EWBC). While Prosperity Bancshares and Southside Bancshares both carry a Zacks Rank #1 (Strong Buy), East West Bancorp has a Zacks Rank #2 (Buy).