Financial Data and Key Metrics Changes - The company reported net earnings of $64 million or $0.49 per share, with an annualized adjusted return on average assets of 1.11% and an adjusted return on average tangible equity of 16.15% [6][15] - The tangible book value per share grew by $0.69 to $14.15, and the tangible common equity ratio expanded to 7.9% [7] - The average cost of total deposits decreased by 14 basis points to 2.11%, while the net interest margin increased by 6 basis points to 3.34% [8] - Core net interest margin grew by 9 basis points, and total revenue increased to $208.8 million for the quarter [16] Business Line Data and Key Metrics Changes - The commercial lending team closed approximately $600 million in new loans, with the commercial loan portfolio increasing by 3.8% [9] - Provident Protection Plus experienced a 19% organic growth in new business compared to the same period last year, with income up 23% [12] - Beacon Trust assets under management and fee income decreased by approximately 4% due to market conditions [13] Market Data and Key Metrics Changes - The total loan pipeline increased to approximately $2.8 billion, with a weighted average interest rate of 6.31% [10] - Nonperforming loans increased to 0.54%, primarily due to two well-secured loans [11] - The provision for loan losses decreased to $325,000, reflecting stable-specific reserve requirements [21] Company Strategy and Development Direction - The company aims to maintain momentum throughout 2025, focusing on core businesses and creating value for stockholders and customers [13] - There is a targeted growth of about 5% in the commercial real estate (CRE) space, with a focus on diversifying the commercial portfolio [50][52] - The company is cautious about potential macroeconomic impacts but remains optimistic about its strong loan pipeline [33][40] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is uncertainty in the macroeconomic environment, they have not seen significant negative impacts on their portfolio [34][40] - The effective tax rate for the quarter increased to 30.3%, with expectations of approximately 29.5% for the remainder of 2025 [23] - Projected financial performance for 2025 includes a return on average assets of approximately 1.15% and a return on tangible equity of approximately 16% [23] Other Important Information - The Board of Directors approved a quarterly cash dividend of $0.24 per share payable on May 30 [7] - Noninterest income increased to $27 million, driven by strong performance from the insurance agency [22] Q&A Session Summary Question: Update on integration and hiring in wealth management - Management confirmed that integration is complete and there have been new hires in Pennsylvania and Westchester markets, contributing to pipeline growth [27][29] Question: Customer conversations regarding macro outlook and tariffs - Management indicated that there is uncertainty but no significant pullback from clients; they are monitoring the portfolio for potential impacts [34][40] Question: Details on nonaccrual loans - Management is working with borrowers on two nonaccrual loans, with favorable loan-to-value ratios providing some comfort [45][47] Question: Future M&A activity and characteristics of potential candidates - Management expressed that buying back stock is a priority over M&A, emphasizing the importance of culture in any future acquisitions [57][59] Question: Expense guidance for the year - Management expects expenses to be in the range of $112 million to $115 million, with a conservative approach to forecasting [62] Question: Insurance commissions and seasonality - Management noted that insurance business is seasonal, with strong first-quarter performance expected to continue [66]

Financial Data and Key Metrics Changes - Total assets increased by approximately $37 million during Q1 2025 [8] - Net income for Q1 2025 was $8.6 million, equating to $0.76 per basic share, down from $0.88 per share in the previous quarter but up from $0.58 per share in Q1 2024 [12] - The net interest margin (NIM) improved to 0.7% in Q1 2025, up from 0.54% in Q4 2024 and 0.16% in Q1 2024 [13] - Return on average assets was 0.13% for the quarter, compared to 0.27% last quarter, while return on average equity was 0.83%, up from 0.68% in Q4 [12] Business Line Data and Key Metrics Changes - The loan book decreased by $23 million in Q1 2025, with a strong loan pipeline anticipated for Q2 [5][22] - Non-interest income decreased by $693,000 compared to the previous quarter, primarily due to elevated non-interest income in Q4 2024 [17] - Non-interest expense increased by $1.3 million in Q1 2025, mainly due to employee compensation and related benefits [19] Market Data and Key Metrics Changes - The Texas economy remains strong and growing, with no significant negative impacts observed from national economic uncertainties [3][4] - Non-performing assets to total assets ratio was 0.15% at March 31, compared to 0.16% at year-end [24] Company Strategy and Development Direction - The company is focused on maintaining a granular and historically stable core deposit base, with an anticipated net growth of 2% to 5% in the deposit book for the year [61] - Plans to utilize cash flows from maturing securities for loan growth or reinvestment in securities [66] - The company aims to continue share repurchases as a good utilization of excess capital [80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the loan portfolio and the quality of the customer base, despite uncertainties related to tariffs and the national economy [70][72] - The company is prepared for potential economic slowdowns while also being positioned for future growth [7] Other Important Information - The company increased its dividend to $0.25 per share in Q1 2025, up from $0.24 per share in 2024 [12] - Total equity increased by $6.7 million, primarily due to net income and employee stock option exercises [11] Q&A Session Summary Question: Can you provide insights on the loan pipeline and its composition? - The loan pipeline is similar to the current composition of the loan portfolio, with a strong uptick in opportunities observed post-November election [39] Question: What are clients looking for to feel comfortable in the current environment? - Clients are cautious due to national uncertainties but see strength in local markets [44] Question: What is the outlook for reserves based on current economic conditions? - No expectation to build reserves unless there is a significant systemic concern; qualitative factors remain elevated [46][50] Question: Can you elaborate on the CNI loan portfolio and its recent contraction? - The contraction was primarily due to lower utilization and paydowns in CNI lines [58] Question: What is the strategy for deposit growth moving forward? - The company aims for a 2% to 5% net growth in deposits, focusing on core deposit relationships [61] Question: How does the company plan to utilize cash flows from securities? - Plans to systematically add to the bond portfolio as opportunities arise [66] Question: What is the company's approach to share repurchases? - The company views share repurchases as a good use of excess capital and plans to continue this strategy [80]