Financial Data and Key Metrics Changes - The company reported net income of $119 million or $1.98 per diluted share, an increase from $99.3 million or $1.75 in the same period last year [4][10] - Revenues increased by approximately $52 million from new rates and $2 million from continued customer growth [10] - First quarter O&M expenses were approximately 2% higher than the first quarter last year, with a projected 4% CAGR in O&M expenses across the five-year plan [10][52] Business Line Data and Key Metrics Changes - The company completed $178 million worth of capital projects this quarter, consistent with the same period last year [14] - Nearly 8,000 new meters were installed through April, driven by new housing developments, particularly in major metropolitan areas in Texas and Oklahoma [16] Market Data and Key Metrics Changes - Weather across service territories was 5% colder than normal and 16% colder than the first quarter last year, contributing to strong customer demand [9] - The company expects to achieve the upper half of its stated guidance ranges, including net income of $254 million to $261 million and earnings per diluted share of $4.20 to $4.32 [9] Company Strategy and Development Direction - The company aims for an earnings per share CAGR of approximately 6% through 2029, with reduced capital intensity and related funding needs [6] - The company is focused on growth opportunities in power generation and system reinforcement, particularly in response to new housing demands [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in expense management and the ability to remain insulated from material tariff impacts through 2025 [5][39] - The company remains committed to safely and reliably delivering natural gas to customers, supported by a highly engaged workforce [7] Other Important Information - The Board of Directors declared a dividend of $0.67 per share, unchanged from the previous quarter [11] - The company is actively monitoring legislative developments that could impact gas investments in Texas [26][27] Q&A Session Summary Question: O&M expense sustainability in an inflationary environment - Management noted that while O&M expenses have come in lower than expected, they remain cautious about future trends due to labor market influences [22][24] Question: Impact of Texas legislation on capital spending - Management indicated that proposed legislation could enhance recovery rates but would not significantly alter capital spending plans [26][29] Question: Factors driving guidance increase - The increase in guidance was attributed to strong customer demand, growth in the customer base, and better-than-expected cost management [35] Question: Weather impact on working capital - Management confirmed that strong demand due to weather has increased working capital needs, but they expect some relief as they move into warmer months [46] Question: Future of the in-sourcing program - The in-sourcing program will continue, with ongoing evaluations to identify further opportunities for efficiency [48][49] Question: O&M expense expectations for the year - Management anticipates O&M expenses will align with the 4% growth target, factoring in employee costs and efficiency gains [52][53]

Financial Data and Key Metrics Changes - The company reported net income of $11.3 million, or 67 cents per diluted share, for the first quarter of 2025 [10] - Tangible book value increased to $23.61 per share, representing over 9% annualized growth quarter over quarter [10] - Total revenue reached $46.8 million, with net interest income expanding as anticipated [12] Business Line Data and Key Metrics Changes - Loan growth was at a 9% annualized pace for Q1, meeting expectations, while deposit growth was at 10% quarter over quarter annualized [11] - Noninterest income for the quarter totaled $8.6 million, exceeding guidance, driven by strong insurance and mortgage banking revenues [20] - Operating expenses remained stable at just over $32 million, consistent with the previous quarter [20] Market Data and Key Metrics Changes - The average portfolio yield, including fees, was 5.97%, slightly down from the previous quarter [15] - The loan to deposit ratio held steady at 83%, providing flexibility for future growth [15][17] - The company anticipates a net interest margin of around 3.25% for Q2 2025, with expectations of margin expansion of 2 to 3 basis points quarterly throughout the year [19] Company Strategy and Development Direction - The company is focused on leveraging its growth phase, aiming for continued EPS growth and achieving near-term revenue targets [24] - There is an emphasis on recruiting talented team members to enhance revenue-generating capabilities, particularly in private banking and treasury management [26] - The company remains committed to organic growth while being open to potential M&A opportunities if they align with strategic goals [125][126] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's growth prospects despite market volatility, citing strong client relationships and business performance [34][35] - The company is closely monitoring the impact of tariffs on clients but has received positive feedback regarding order volumes and pricing stability [37][38] - Management believes that credit quality remains strong, with nonperforming assets at 0.19% of total assets [20] Other Important Information - The effective corporate tax rate for the quarter was approximately 17%, with expectations of stabilization between 18% to 19% going forward [21] - The company's consolidated TCE ratio increased to 7.6%, and total risk-based capital ratio remained well above regulatory standards at 11.2% [21] Q&A Session Summary Question: Customer sentiment and loan growth outlook - Management noted strong market conditions and positive client feedback, indicating confidence in maintaining loan growth [34][35] Question: Balance sheet leverage and loan to deposit ratio - The company has room to increase its loan to deposit ratio while ensuring prudent growth and maintaining appropriate credit structures [42][43] Question: Share repurchase plans - The company has approximately $1.5 million left for share repurchases and will consider buying back shares as valuations improve [49][50] Question: Margin expectations with potential Fed rate cuts - Management indicated that they are well-positioned to benefit from Fed rate cuts, with potential upside to margin expansion if cuts occur earlier than expected [58][60] Question: Fee income outlook and performance of investment services - The company expects fee income in the low to mid $8 million range for Q2, with strong performance in insurance and mortgage banking contributing to growth [96][100] Question: Equipment financing and leasing business line - Management expressed satisfaction with the growth of the equipment financing segment, indicating plans for continued expansion in this area [131][132]