Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In a Current Report on Form 8-K filed with the Securities Exchange Commission on December 23, 2008, International Bancshares Corporation, a Texas corporation ("IBC"), reported that it had entered into an agreement with the U.S. Department of the Treasury ("Treasury") to sell preferred stock and warrants to the Treasury under the Capital Purchase Program ("CPP"). As a result of IBC's participation in the CPP, IBC was subject to certain compensation restrictions, which include a prohibition on the payment or accrual of any bonuses (including equity-based incentive compensation) to certain officers and employees except for awards of CPP-compliant long-term restricted stock and stock units. On November 28, 2012, IBC completed the repurchase of all of the remaining Fixed Rate Cumulative Perpetual Preferred Stock, Series A that it issued to Treasury under the CPP; however, the CPP incentive compensation restrictions still apply to compensation paid for services rendered while the Company was a participant in the CPP.

In light of the CPP incentive compensation restrictions, on December 18, 2009, IBC's Board of Directors (the "Board") adopted the 2009 International Bancshares Corporation Long-Term Restricted Stock Unit Plan (the "Plan") to give IBC additional flexibility in the compensation of its officers, employees, consultants and advisors in compliance with all applicable laws and restrictions. The Plan authorizes IBC to issue Restricted Stock Units ("RSUs") to officers, employees, consultants and advisors of IBC and its subsidiaries. RSUs issued under the Plan are not equity and are payable only in cash.

Dennis E. Nixon, IBC's President, Chairman of the Board, and a director of IBC, received an award of CPP-Compliant RSUs, granted as of December 19, 2012, in the amount of $425,000 worth of RSUs for his performance during 2012. In order to meet the requirements of a CPP-Compliant RSU, Mr. Nixon's RSUs do not exceed one-third of his total annual compensation. The Committee determined to grant Mr. Nixon CPP-Compliant RSUs after considering the compensation structures utilized by other CPP participants for their executive officers.

The foregoing description of the Plan and the form of Restricted Stock Unit Award Agreement is qualified in its entirety by reference to the full text of the Plan and the form of Restricted Stock Unit Award Agreement. This description should be read in conjunction with the Plan and the form of Restricted Stock Unit Award Agreement, copies of which were attached as Exhibits 10.1 and 10.2, respectively, to the Company's Form 8-K filed on December 22, 2009 and incorporated herein by reference.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this report 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 SEC.

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