Stock Options

9 Months Ended

Sep. 30, 2022

Stock Options

Stock Options

Note 5 — Stock Options

On April 5, 2012, the Board of Directors adopted the 2012 International Bancshares Corporation Stock Option Plan (the “2012 Plan”). There are 800,000 shares of common stock available for stock option grants under the 2012 Plan, which may be qualified incentive stock options (“ISOs”) or non-qualified stock options. Options granted may be

exercisable for a period of up to 10 years from the date of grant, excluding ISOs granted to 10% shareholders, which may be exercisable for a period of up to only five years. On April 4, 2022 the 2012 plan expired and was not renewed.

A summary of option activity under the stock option plan for the nine months ended September 30, 2022 is as follows:

				Weighted
		Weighted		average
		average		remaining	Aggregate
	Number of	exercise		contractual	intrinsic
	options	price		term (years)	value ($)
					(in Thousands)
Options outstanding at December 31, 2021	520,551	$	28.28
Plus: Options granted	31,150		38.92
Less:
Options exercised	34,025		21.54
Options expired	—		—
Options forfeited	12,400		32.64
Options outstanding at September 30, 2022	505,276		29.29	4.20	$	6,677
Options fully vested and exercisable at September 30, 2022	293,638	$	24.93	2.43	$	5,160

On April 18, 2022, the Board of Directors adopted the 2022 International Bancshares Corporation Stock Appreciation Rights Plan (the “SAR Plan”). There are 750,000 shares of underlying common stock that may be used for stock appreciation right (“SAR”) grants under the plan, however, no actual shares will be granted. Upon exercise, the SAR will be settled in cash. SARs granted may be exercisable for a period of up to 10 years from the date of grant and may vest over an eight-year period. As of September 30, 2022, a total of 500,250 SARs had been issued at a base value of $39.33 per unit. The SARs granted in the third quarter vest over an eight-year period beginning on the second anniversary of the grant date and expire 10 years after the grant date.

Stock-based compensation expense included in the consolidated statements of income for the three and nine months ended September 30, 2022 was $118,000 and $347,000, respectively. Stock-based compensation expense included in the consolidated statements of income for the three and nine months ended September 30, 2021 was $118,000 and $391,000, respectively. As of September 30, 2022, there was approximately $863,000 of total unrecognized stock-based compensation cost related to non-vested options granted under our plans that will be recognized over a weighted average period of 1.7 years.