Question-and-Answer SessionAnd where I've been kind of starting out the discussions kind of open-ended big picture, 3 or 4 strategic priorities that management -- the management team is spending a lot of time focusing in on and why. And I know there's some defined kind of goals that you guys have. But maybe I'll just kind of put it there and then we can kind of drill down from there.Eric JobinExecutive VP, CFO, & Chief Actuary Yes. Thanks, Doug, and pleased to be with you today on this first event. Really, ...

Financial Data and Key Metrics Changes - The company reported an adjusted net income of nearly $128 million or $1.49 per share, compared to $118 million or $1.37 per share in the previous quarter, reflecting a strong performance [12] - Return on Assets (ROA) improved to 1.46% from 1.32% a year ago, indicating continued profitability improvement [5] - Net interest income (NII) increased by $3 million or 1%, while the efficiency ratio improved to 54.1% from 54.91% in the prior quarter [13][15] - Total loans grew by $135 million or 2% annualized, with a notable increase in loan production of 6% quarter over quarter and 46% year over year [6][7] Business Line Data and Key Metrics Changes - Fee income totaled $106 million, an increase of 8% from the prior quarter, driven by record highs in investment insurance and annuity fees [5][6] - The company experienced a modest increase in personnel expenses due to investments in revenue producers, contributing to a controlled expense growth of just 1% [6][12] - Criticized commercial loans decreased by $20 million to $549 million, while non-accrual loans increased slightly to $114 million [17][18] Market Data and Key Metrics Changes - Deposits decreased by $387 million, primarily due to seasonal activity in public fund accounts, with interest-bearing transaction balances increasing [8][16] - The company ended the quarter with a tangible common equity (TCE) ratio of 10.01% and a common equity Tier 1 ratio of 14.08% [9] - The yield on the bond portfolio increased by six basis points to 2.92%, with expectations for continued yield improvement through reinvestment at higher rates [14] Company Strategy and Development Direction - The company plans to open five new locations in the Dallas market, aiming for growth in the region and a target compounded annual balance sheet growth rate [10] - The focus remains on organic growth, with a strategy to hire more bankers to support loan production and maintain profitability [10][29] - The company aspires to become the best bank in the Southeast for privately owned businesses, emphasizing the importance of local access and quality service [105] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the dynamic macroeconomic environment, highlighting a strong capital position and solid allowance for credit losses [11] - The company anticipates continued growth and profitability through disciplined execution of its organic growth plan, despite challenges from loan paydowns [10][30] - Future expectations include low single-digit growth in loans and deposits, with a focus on maintaining high-quality deposits [29][100] Other Important Information - The company repurchased approximately $40 million of shares during the quarter, with plans to continue share repurchases at similar levels [18][36] - The company expects to see a reduction in deposit costs following anticipated rate cuts in the fourth quarter [15][16] Q&A Session Summary Question: Loan growth expectations and paydowns - Management noted that loan production was strong, with a 6% increase quarter over quarter, but paydowns were higher than expected due to project completions and client sales [21][24] Question: Capital management and M&A opportunities - Management clarified that they are not currently focused on M&A but are open to opportunistic growth, prioritizing organic growth and capital deployment [32][34] Question: Guidance for NII and expenses - Management indicated that NII growth expectations are more modest than previously suggested, with a focus on controlling expenses in the upcoming quarter [54][56] Question: Competitive landscape for deposits - Management reported no significant changes in competitive pressures for deposits, with expectations for continued stability in deposit pricing [99][100] Question: Future branch expansion plans - Management confirmed plans for branch expansions in Dallas and other markets, with a focus on enhancing service quality and client relationships [101][105]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported net income of $8.4 million or $0.08 per share and adjusted EBITDAX of $49.9 million, driven by NRI production of 16,956 BOE per day, which exceeded guidance [5][18] - NRI sales for the quarter were 19,393 BOE per day, a slight increase from the first quarter, while pricing decreased by approximately 15% quarter over quarter [19] - Production costs for Q2 were $40.4 million, a 10% reduction quarter over quarter, with a per barrel cost of $22.87 [20] Business Line Data and Key Metrics Changes - The FPSO project in Cote D'Ivoire is ahead of schedule, with significant investments expected to yield production increases starting in 2026 [9][10] - Gabon has shown positive production results, with strong uptime and improved decline curves, and a drilling program is set to begin in late Q3 2025 [10][12] - In Egypt, the company has drilled multiple wells in 2025, with plans for an additional eight wells in the second half of the year [13][59] Market Data and Key Metrics Changes - The company has seen higher volatility in the commodity price environment in 2025, impacting pricing despite increased sales [19] - The company’s unrestricted cash at the end of Q2 was $67.9 million, not including approximately $24 million in receipts collected in July [21] Company Strategy and Development Direction - The company remains focused on operational efficiency, prudent investments, and maximizing asset value while returning cash to shareholders through dividends [7][26] - A new reserve-based revolving credit facility was established with an initial commitment of $190 million, allowing for growth to $300 million to fund organic growth initiatives [6][22] - The company is committed to returning over $100 million to shareholders through dividends and share buybacks since 2022 [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute on multiple major projects that are expected to significantly grow production and reserves [27] - The company anticipates a strong year in 2025, with continued focus on organic growth and shareholder returns [71] Other Important Information - The FPSO refurbishment in Cote D'Ivoire is underway, with the vessel expected to return to service in early 2026 [8][9] - The company has maintained its full-year guidance despite a 10% reduction in CapEx forecast [23] Q&A Session Summary Question: Update on Cote D'Ivoire project status - The FPSO project remains ahead of schedule, with projections for reconnection in March 2026 [32] Question: Working capital and cash flow expectations - Working capital is expected to show a positive inflow in Q3, with improvements in receivables anticipated [34] Question: Cote D'Ivoire FPSO critical path concerns - The bearing swivel assembly is on track for installation, with no delays expected [41] Question: Impact of Gabon drilling program on production - Minimal disruptions are expected during the drilling program, with planned downtime aligned with rig movements [51] Question: Equatorial Guinea final investment decision timeline - The FID for Equatorial Guinea is projected for 2026, with ongoing evaluations to optimize expenditures [46] Question: Planned drilling activity in Egypt - The company plans to drill eight additional wells in the second half of the year, which is expected to positively impact production [59]