Financial Analysis

14. COMMITMENTS AND CONTINGENCIES Long-Term Contracts Due to the nature of the natural gas distribution business, Roanoke Gas enters into agreements with suppliers and pipelines to contract for natural gas commodity purchases, storage capacity and pipeline delivery capacity. Roanoke Gas obtains most of its natural gas supply through third -party asset management contracts. Through March 31, 2025, the Company utilized two asset managers to optimize the use of its transportation, storage rights and gas supply inventories, which helps to ensure a secure and reliable source of natural gas. Those services were consolidated to one asset manager as of April 1, 2025. Under the current asset management contract, Roanoke Gas has designated the asset manager to act as agent for its storage capacity and all gas balances in storage. Roanoke Gas retains ownership of gas in storage. Under provisions of this contract, Roanoke Gas is obligated to purchase its winter storage requirements from the asset manager during the spring and summer injection periods at market price. The current asset management contract was signed for a three year period which will expire in March 2028. The volumetric obligation as of September 30, 2025 for the remainder of the contract period is 2,071,061 DTH for fiscal years 2026 and 2027 and 295,721 DTH for fiscal year 2028. In addition to the volumetric commitment, the Company also has fixed price agreements to purchase approximately 1.36 million DTH, from October 2 …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

6. LINE-OF-CREDIT The Company had been operating with a line-of-credit in the principal amount of $25 million that it renewed annually each March. On March 31, 2025, Roanoke Gas amended its line-of-credit to increase the principal amount to $30 million and extend the maturity date to March 31, 2027. The line-of-credit's variable interest rate is based upon Term SOFR plus 1.25% and provides for multiple-tier borrowing limits to accommodate seasonal borrowing demands. The Company's total borrowing limits during the term of the line-of-credit range from $20 million to $30 million. As of September 30, 2025, the Company had an outstanding balance of $11,916,760 under the line-of-credit. The Company's total available borrowing limits for the remaining term are as follows: Available Line-of-Credit As of September 30, 2025 $ 20,000,000 October 1, 2025 through March 31, 2026 30,000,000 April 1, 2026 through September 30, 2026 20,000,000 October 1, 2026 through March 31, 2027 30,000,000 A summary of the line-of-credit follows: September 30 2025 2024 Borrowing limit at year-end $ 20,000,000 $ 20,000,000 Outstanding balance at year-end 11,916,760 11,166,181 Average rate of interest during year on outstanding balances 5.56 % 6.39 % Interest rate at year-end 5.42 % 6.29 % Interest rate on unused line-of-credit 0.25 % 0.15 %

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2025 Gas utility Non utility Total operating revenues Natural Gas (Billed and Unbilled): Residential $ 54,093,809 $ $ 54,093,809 Commercial 33,035,454 33,035,454 Transportation and Interruptible 5,871,389 5,871,389 Other 791,194 102,269 893,463 Total contracts with customers 93,791,846 102,269 93,894,115 Alternative revenue programs 1,440,097 1,440,097 Total operating revenues $ 95,231,943 $ 102,269 $ 95,334,212 2024 Gas utility Non utility Total operating revenues Natural Gas (Billed and Unbilled): Residential $ 46,472,676 $ $ 46,472,676 Commercial 27,659,507 27,659,507 Transportation and Interruptible 5,414,157 5,414,157 Other 879,186 108,131 987,317 Total contracts with customers 80,425,526 108,131 80,533,657 Alternative revenue programs 4,107,575 4,107,575 Total operating revenues $ 84,533,101 $ 108,131 $ 84,641,232 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

8. FAIR VALUE The following table summarizes the Companys financial assets and liabilities that are measured at fair value on a recurring basis and the fair value measurements by level within the fair value hierarchy as defined in Note 1 as of September 30, 2025 and 2024 , respectively. There have been no changes to the Company's valuation techniques during fiscal years ended September 30, 2025 and 2024 . Fair Value Measurements - September 30, 2025 Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs Fair Value Level 1 Level 2 Level 3 Assets: Interest rate swaps - current $ 828,573 $ $ 828,573 $ Interest rate swaps - noncurrent $ 421,511 $ 421,511 Total $ 1,250,084 $ $ 1,250,084 $ Liabilities: Natural gas purchases $ 135,863 $ $ 135,863 $ Interest rate swaps - current $ 57,144 $ $ 57,144 $ Interest rate swaps - noncurrent $ 298,016 $ $ 298,016 $ Total $ 491,023 $ $ 491,023 $ Fair Value Measurements - September 30, 2024 Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs Fair Value Level 1 Level 2 Level 3 Assets: Interest rate swaps - current $ 871,026 $ $ 871,026 $ Interest rate swaps - noncurrent $ 1,191,526 $ $ 1,191,526 $ Total $ 2,062,552 $ $ 2,062,552 $ Liabilities: Natural gas purchases $ 761,020 $ $ 761,020 $ Total $ 761,020 $ $ 761,020 $ The fair value of the interest rate swaps is determined by using the counterparty's proprietary models that include observable quoted mark …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

"9. INCOME TAXES Under the provisions of ASC 740, the deferred tax assets and liabilities of the Company were revalued in fiscal 2018 to reflect the reduction in the corporate federal income tax rate. As a result of the revaluation, the excess deferred income taxes of the regulated operations of Roanoke Gas were reclassified to a regulatory liability. The excess deferred taxes related to the depreciable property are being returned to customers over the remaining weighted average useful life of the property with a corresponding reduction in income tax expense. The excess deferred taxes related to the other regulatory basis differences were being collected from customers over a five -year period, which concluded in December 2023. The details of income tax expense (benefit) are as follows: Years Ended September 30 2025 2024 Current income taxes: Federal $ 3,167,466 $ 3,128,721 State 733,266 689,671 Total current income taxes 3,900,732 3,818,392 Deferred income taxes: Federal (156,415 ) (398,588 ) State 347,218 276,807 Total deferred income taxes 190,803 (121,781 ) Total income tax expense $ 4,091,535 $ 3,696,611 Income tax expense for the years ended September 30, 2025 and 2024 differed from amounts computed by applying the U.S. federal income tax rate to earnings before income taxes due to the following: Years Ended September 30 2025 2024 Income before income taxes $ 17,371,505 $ 15,457,507 Corporate federal income tax rate 21 % 21 % Income tax expense computed at the federal s …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

13. LEASES During 2023, the Company entered into a land lease in conjunction with its RNG facility that has a 20-year term with two five -year Company renewal options that are not considered part of the ROU asset and liability as it was not reasonably certain that the Company would exercise these options. The Company also has two other operating leases with original terms ranging from 3 to 6 years, one of which was renewed during fiscal 2025. The operating lease ROU assets of $341,612 are reflected in other non-current assets in the consolidated balance sheets. The current operating lease liabilities of $25,600 and non-current lease liabilities of $319,573 are included in other current liabilities and deferred credits and other non-current liabilities , respectively, in the consolidated balance sheets. The cost components of the Companys operating leases are included under operations and maintenance expense in the consolidated statements of income and were less than $50,000 for each period presented. Other information related to leases were as follows: 2025 2024 Supplemental Cash Flow Information: Cash paid on operating leases $ 42,900 $ 37,900 Right of use obtained in exchange for operating lease obligations 36,734 N/A Weighted-average remaining term (in years) 15.7 17.4 Weighted-average discount rate 5.64 % 5.65 % On September 30, 2025, the future minimum rental payments under non-cancelable operating leases were as follows: 2026 $ 51,268 2027 43,238 2028 39,600 2029 26,400 …

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"7. LONG-TERM DEBT Long-term debt consisted of the following: September 30 2025 2024 Principal Unamortized Debt Issuance Costs Principal Unamortized Debt Issuance Costs Roanoke Gas: Unsecured senior note payable at 4.26 %, due September 18, 2034 $ 30,500,000 $ 86,887 $ 30,500,000 $ 96,541 Unsecured term note payable at 3.58 %, due October 2, 2027 8,000,000 9,632 8,000,000 14,448 Unsecured term note payable at 4.41 %, due March 28, 2031 10,000,000 17,229 10,000,000 20,362 Unsecured term note payable at 3.60 %, due December 6, 2029 10,000,000 14,971 10,000,000 18,494 Unsecured term note payable at 30-day SOFR plus 1.20 %, due August 20, 2026 (swap rate at 2.00 %) 15,000,000 15,000,000 Unsecured term note payable at Term SOFR plus 1.00 %, due October 1, 2028 (swap rate at 2.49 %) 10,000,000 22,612 10,000,000 27,044 Midstream: Unsecured term note payable at Term SOFR plus 1.55 %, due September 5, 2032 ($14M swap rate at 3.24 %, $4M swap rate at 2.443 %, and $20.6M swap rate at 5.061 %) 38,600,000 171,362 Unsecured term note payable at Term SOFR plus 1.55 %, due September 5, 2032 (swap rate at 5.061 %) 15,000,000 66,592 Revolving credit facility at Term SOFR plus 1.75 %, due September 5, 2030 (""Southgate"") 4,215 5,553 Revolving credit facility at Term SOFR plus 1.75 %, due September 5, 2030 (""Boost"") 10,956 Unsecured term note payable at Term SOFR plus 1.55 %, retired September 5, 2025 24,855,000 32,299 Unsecured term note payable at Daily Simple SOFR plus 1.26448 % (swap rate …

LongTermDebtTextBlock · excerpt; the full note is in the filing

Recently Adopted Accounting Standards In November 2023, the FASB issued ASU 2023 - 07, Segment Reporting (Topic 280 ) - Improvements to Reportable Segment Disclosures, which enhances and expands the current annual and interim requirements on segment information disclosures. The new guidance requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, an amount and description of the composition of other segment items to reconcile to segment profit or loss, and the title and position of the entity's CODM. The provisions within the guidance are to be applied retrospectively for all comparative periods and are effective for the Company for the fiscal year that began October 1, 2024 and interim periods within fiscal year beginning October 1, 2025. The Company adopted ASU 2023 - 07 effective for the year ended September 30, 2025, with retrospective application of the additional segment information for the year ended September 30, 2024. Additional information regarding the Company's reportable segments is included in Note 3 to the consolidated financial statements, with no impact on results of operations, cash flows, or financial condition of the Company. Recently Issued Accounting Standards In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures . The new guidance requires that on an annual b …

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"12. EMPLOYEE BENEFIT PLANS The Company sponsors both a noncontributory pension plan and a postretirement plan. The pension plan covers all employees hired prior to January 2017 and benefits fully vest after 5 years of credited service. Benefits paid to retirees are based on age at retirement, years of service and average compensation. Effective January 1, 2017, a ""soft freeze"" to the pension plan was implemented, and employees hired on or after that date are no longer eligible to participate. Commensurate with the ""soft freeze"" in the pension plan, the Company amended its 401 (k) Plan, allowing management to authorize a discretionary contribution to the 401 (k) account for those employees hired on or after January 1, 2017. The amount, if any, of this discretionary contribution would be determined each year and would be applied to the eligible employees in the following calendar year. This Company contribution would be in addition to any employee elected deferrals and employer match as provided for under the 401 (k) Plan. The postretirement plan provides certain health care, supplemental retirement and life insurance benefits to retired employees who meet specific age and service requirements. Employees hired prior to January 1, 2000 are eligible to participate in the postretirement plan. Employees must have a minimum of 10 years of service and retire after attaining the age of 55 in order to vest in the postretirement plan. Retiree contributions to the plan are based on …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

"2. REVENUE The Company assesses new contracts and identifies related performance obligations for promises to transfer distinct goods or services to the customer. Revenue is recognized when performance obligations have been satisfied. In the case of Roanoke Gas, the Company contracts with its customers for the sale and/or delivery of natural gas. The following tables summarize revenue by customer, product and income statement classification for the years ended September 30: 2025 Gas utility Non utility Total operating revenues Natural Gas (Billed and Unbilled): Residential $ 54,093,809 $ $ 54,093,809 Commercial 33,035,454 33,035,454 Transportation and Interruptible 5,871,389 5,871,389 Other 791,194 102,269 893,463 Total contracts with customers 93,791,846 102,269 93,894,115 Alternative revenue programs 1,440,097 1,440,097 Total operating revenues $ 95,231,943 $ 102,269 $ 95,334,212 2024 Gas utility Non utility Total operating revenues Natural Gas (Billed and Unbilled): Residential $ 46,472,676 $ $ 46,472,676 Commercial 27,659,507 27,659,507 Transportation and Interruptible 5,414,157 5,414,157 Other 879,186 108,131 987,317 Total contracts with customers 80,425,526 108,131 80,533,657 Alternative revenue programs 4,107,575 4,107,575 Total operating revenues $ 84,533,101 $ 108,131 $ 84,641,232 Gas utility revenues Substantially all of Roanoke Gas revenues are derived from rates authorized by the SCC through its tariffs. Based on its evaluation, the Company has concluded that thes …

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"3. SEGMENT INFORMATION Operating segments are defined as components of an enterprise for which separate financial information is available and is evaluated regularly by the Company's executive management in deciding how to allocate resources and assess performance. The Company has two reportable segments based on the nature of their activities and are defined as follows: Gas Utility - The natural gas distribution segment of the Company generates revenue from its tariff rates and other regulatory mechanisms through which it provides for the sale and distribution of natural gas to its residential, commercial and industrial customers. Investment in Affiliates - The investment in affiliates segment reflects the income generated through the activities of the Company's investment in the LLC. In order to reconcile to net income as disclosed in the consolidated statements of income, ""Corporate and other"" rows are included below associated with certain unallocated expenses that represent corporate reporting adjustments. The accounting policies of the reported segments are the same as those described within Note 1. Information is routinely presented to the CODM, the Company's President and Chief Executive Officer, in a manner that makes significant elements of profitability and cash flows of each segment easily discernible. The CODM evaluates the performance of the reportable segments based on the Gas Utility's operating income (loss) and the Investment in Affiliates' equity in earn …

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation RGC Resources, Inc. is an energy services company primarily engaged in the sale and distribution of natural gas. The consolidated financial statements include the accounts of Resources and its wholly owned subsidiaries: Roanoke Gas and Midstream. Roanoke Gas is a natural gas utility, which distributes and sells natural gas to approximately 62,500 residential, commercial and industrial customers within its service areas in Roanoke, Virginia and the surrounding localities. The Companys business is seasonal in nature as a majority of natural gas sales are for space heating during the winter season. Roanoke Gas is regulated by the SCC. Midstream is a wholly owned subsidiary created primarily to invest in the LLC. The Company follows accounting and reporting standards established by the FASB and the SEC, including certain provisions allowed under the smaller reporting company exceptions. Rate Regulated Basis of Accounting The Companys regulated operations follow the accounting and reporting requirements of ASC 980, Regulated Operations . The economic effects of regulation can result in a regulated company deferring costs that have been or are expected to be recovered from customers in a period different from the period in which the costs would be charged to expense by an unregulated enterprise. When this situation occurs, costs are deferred as assets in the consolidated balance sheet (regulatory assets) and …

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15. SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date the financial statements were issued. There were no other items not otherwise disclosed which would have materially impacted the Companys consolidated financial statements. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing