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 available for stock option grants under the 2012 Plan. Under the 2012 Plan, both qualified incentive stock options (“ISOs”) and non-qualified stock options (“NQSOs”) may be granted. 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. As of March 31, 2015, 204,000 shares were available for future grants under the 2012 Plan.

A summary of option activity under the stock option plans for the three months ended March 31, 2015 is as follows:

	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value ($)
					(Dollars in Thousands)
Options outstanding at December 31, 2014	993,889	$	18.94
Plus: Options granted	5,000	24.15
Less:
Options exercised	3,100	16.85
Options expired	28,325	26.90
Options forfeited	7,971	17.57
Options outstanding at March 31, 2015	959,493	18.75		6.59	$	6,993

Options fully vested and exercisable at March 31, 2015	243,928	$	16.13	3.02	$	2,427

Stock-based compensation expense included in the consolidated statements of income for the three months ended March 31, 2015 and March 31, 2014 was approximately $292,000 and $161,000, respectively. As of March 31, 2015, there was approximately $3,759,000 of total unrecognized stock-based compensation cost related to non-vested options granted under the Company plans that will be recognized over a weighted average period of 2.2 years.