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Arrow Financial Corp

Arrow Reports 1st Quarter Net Income of $6.3 Million, or $0.38 per Share, and Declares 2nd Quarter Dividend of $0.28 per Share

GLENS FALLS, N.Y. , May 1, 2025 /PRNewswire/ -- Arrow Financial Corporation (NasdaqGS® – AROW) ("Arrow" or "the Company") announced financial results for the three-month period ended March 31, 2025. Reported net income for the first quarter of 2025 was $6.3 million and fully diluted earnings per share ("EPS") was $0.38, versus $4.5 million and EPS of $0.27 for the fourth quarter of 2024.

The Board of Directors of Arrow declared a quarterly cash dividend of $0.28 per share payable May 23, 2025 to shareholders of record as of May 13, 2025.

The quarter was adversely impacted by the recognition of a specific reserve of $3.75 million ($0.17 per share) related to a $15 million commercial real estate loan participation secured by properties in two office parks in upstate New York, where Arrow is a 22% participant in a $67 million multi-bank lending facility as previously reported in a Form 8-K filed April 16, 2025.

This quarter's results also reflect approximately $0.6 million ($0.03 per share) of non-core unification costs related to Arrow's planned July 2025 system conversion and operational merger of its two banking subsidiaries.

This Earnings Release and related commentary should be read in conjunction with the Company's May 1, 2025 Form 8-K and related First Quarter 2025 Investor Presentation, which can also be found on Arrow's website: arrowfinancial.com/documents/investor-presentations. 

Arrow President and CEO David S. DeMarco:  

"We delivered another quarter of strong margin expansion along with continued loan growth, further improving core profitability during these volatile economic times. We continue to execute on our strategic initiatives for continued growth, including expanding our Corporate Banking Team in the Capital Region of New York state. Our overall credit quality remains extremely strong, despite the recent development in one of our larger commercial credit exposures. We believe this to be an isolated incident as all credit metrics outside of this particular exposure are trending favorably. Furthermore, we are moving closer to finalizing our bank unification efforts to better serve our growing market and drive stronger operating performance under one brand."

First-Quarter Highlights and Key Metrics

  • Net Income of $6.3 million (EPS of $0.38)
  • Record Net Interest Income of $31.4 million
  • Net Interest Margin improved to 3.07% (3.08% FTE1), up from 2.83% (2.85% FTE) in the prior quarter
  • Deposit balances increased to $4.0 billion, resulting in a Loan-to-Deposit ratio of 86.1%
  • Cost of interest-bearing deposits decreased by 23 bps in the quarter to 2.41%
  • Year-to-date loan growth of approximately $22 million2 (2.5% annualized), despite an increase in loan pay-offs and sale activity
  • Quarter-end loan exit rates increased to 5.45% at March 31, 2025 vs. 5.40% at December 31, 2024
  • Tangible Book Value increased to $22.72
  • Repurchased $3.4 million shares (128,047 shares at an average cost of $26.48 per share)
  • Increased share repurchase authority by $5.0 million, resulting in a total of $6.6 million available
  • Return on Average Assets (ROA) improved to 0.59%, up from 0.41% in the previous quarter
  • Excluding the impact of the specific reserve and unification related expenses, ROA was 0.91%

Income Statement

  • Net Income: Net income for the first quarter of 2025 was $6.3 million, increasing from $4.5 million in the fourth quarter of 2024.
    • Compared to the prior quarter, net income benefited from an increase of $1.7 million in net interest income and an increase in non-interest income of $3.6 million, partially offset by an increase in the provision for credit losses of $2.2 million and a slight increase in non-interest expense of $207 thousand.
  • Net Interest Income: Net interest income for the first quarter of 2025 was $31.4 million, increasing 5.6% from $29.7 million for the fourth quarter of 2024.
    • Total interest and dividend income was $50.4 million for the first quarter of 2025, a decrease from $50.9 million in the fourth quarter of 2024. Interest expense for the first quarter of 2025 was $19.0 million, a decrease from $21.2 million for the fourth quarter of 2024. The decrease in interest expense from the prior quarter was driven primarily by active management of deposit rates, partially offset by changes in deposit composition.
  • Net Interest Margin: Net interest margin, on an FTE basis, for the first quarter of 2025 increased to 3.08%, compared to 2.85% for the fourth quarter of 2024. The increase in net interest margin compared to the fourth quarter in 2024 was primarily the result of continued yield expansion on earning assets combined with the moderating cost of interest-bearing liabilities. Net interest margin is negatively affected by deposits continuing to migrate to higher cost products, such as money market savings and time deposits, while being positively impacted by repricing of higher cost time deposits.

 

Three Months Ended


(Dollars in Thousands)


March 31, 2025


December 31, 2024


March 31, 2024

Interest and Dividend Income

$                 50,366


$                 50,901


$                 46,677

Interest Expense

19,009


21,214


20,222

Net Interest Income

31,357


29,687


26,455

Average Earning Assets(A)

4,143,939


4,167,039


4,085,398

Average Interest-Bearing Liabilities

3,184,196


3,185,215


3,108,093







Yield on Earning Assets(A)

4.93 %


4.86 %


4.60 %

Cost of Interest-Bearing Liabilities

2.42


2.65


2.62

Net Interest Spread

2.51


2.21


1.98

Net Interest Margin

3.07


2.83


2.60

Net Interest Margin - FTE

3.08


2.85


2.62







(A) Includes Nonaccrual Loans.






 

  • Provision for Credit Losses: For the first quarter of 2025, the provision for credit losses was $5.0 million compared to $2.9 million in the fourth quarter of 2024. The primary driver of the increase was Arrow's recognition of a $3.75 million specific reserve on a $15 million commercial real estate loan. Other drivers for the provision for credit losses in the first quarter of 2025 were charge-offs, growth in loan balances and changes to the economic forecast factors embedded in the credit loss allowance model. Subsequent to March 31, 2025, the bank group foreclosed on the collateral related to the above referenced commercial real estate loan.

  • Non-Interest Income: Non-interest income for the three months ended March 31, 2025, was $7.8 million, an increase from $4.2 million in the fourth quarter of 2024. The increase from the prior quarter was primarily attributable to the absence of a $3.0 million pre-tax loss related to the investment portfolio repositioning as well as a $0.7 million pre-tax charge related to legacy branding, both recognized in the fourth quarter of 2024.

  • Non-Interest Expense: Non-interest expense for the first quarter of 2025 was $26.0 million, an increase from $25.8 million in the fourth quarter of 2024. The first quarter of 2025 included unification expenses of approximately $0.6 million. The unification expenses were primarily comprised of project management and information technology costs related to the July 2025 system conversion. Arrow continues to focus on overall expense management.

  • Provision for Income Taxes: The provision for income taxes and effective tax rate were $1.8 million and 22.4%, for the first quarter of 2025, and $0.8 million and 14.4%, for the fourth quarter of 2024. The increase in the effective tax rate from the fourth quarter of 2024 was primarily attributable to the change in pre-tax income combined with a change in the amount of tax advantaged earning assets as a percentage of total earning assets.

Balance Sheet

  • Total Assets: Total assets were $4.4 billion at March 31, 2025, an increase of $142.5 million, or 3.3%, as compared to December 31, 2024. For the first quarter of 2025, overall growth in the balance sheet was attributable to changes in cash balances, primarily from seasonal municipal and corporate deposits, as well as growth in the loan portfolio. 

  • Investments: Total investments were $553.0 million as of March 31, 2025, a decrease of $17.8 million, or 3.1%, compared to December 31, 2024. The decrease from December 31, 2024 was driven primarily by paydowns and maturities. There were no credit quality issues related to the investment portfolio.

  • Loans3: Total loans were $3.4 billion as of March 31, 2025. Loan growth for the first quarter of 2025 was $22.3 million. Loan growth was primarily driven by an increase in residential real estate loans. Please see the loan detail included in the Consolidated Financial Information table on page 12.

  • Allowance for Credit Losses: The allowance for credit losses was $37.8 million as of March 31, 2025, which represented 1.11% of loans outstanding, as compared to $33.6 million, or 0.99%, at December 31, 2024. The increase in the allowance for credit losses was primarily driven by the recognition of the specific reserve of $3.75 million. Excluding the specific reserve, the coverage ratio for the allowance for credit loses was 1.00%. Net charge-offs, expressed as an annualized percentage of average loans outstanding, were 0.10% for the three-month period ended March 31, 2025, as compared to 0.06% for the three-month period ended December 31, 2024. Nonperforming assets were $19.5 million as of March 31, 2025, representing 0.44% of period-end assets, compared to 0.50% at December 31, 2024.

  • Deposits: At March 31, 2025, deposit balances were $4.0 billion, an increase of $140.2 million from December 31, 2024. The increase from December 31, 2024 was primarily attributable to the seasonality of municipal deposits as well as an additional $125.0 million of brokered CDs. The brokered CDs partially replaced previous wholesale funding sources and are part of a cash flow hedge using interest rate swaps to reduce overall funding costs. Please refer to page 7 for further details related to deposits.

  • Capital: Total stockholders' equity was $404.4 million at March 31, 2025, an increase of $3.5 million, or 0.9%, from December 31, 2024. The increase from December 31, 2024 was primarily attributable to net income of $6.3 million and other comprehensive income of $4.9 million offset by dividends of $4.7 million and share repurchases of $3.4 million. Arrow's regulatory capital ratios remain strong. As of March 31, 2025, Arrow's Common Equity Tier 1 Capital Ratio was 12.59% and Total Risk-Based Capital Ratio was 14.48%. The capital ratios of Arrow and its subsidiary bank continued to exceed the "well capitalized" regulatory standards.

Additional Commentary

  • BauerFinancial Ratings: Arrow Bank National Association ("Arrow Bank") received a 5-Star Superior rating from BauerFinancial, Inc., the nation's premier bank rating firm. Arrow Bank has earned this designation for 72 consecutive quarters, securing its prominent position as an "Exceptional Performance Bank."

 

——————

1 FTE Net interest margin is a non-GAAP measure. See reconciliation on Note 3 to the Selected Quarterly Information.

2 Includes both $3.3 million fair value hedge adjustment at March 31, 2025 and $2.2 million fair value hedge adjustment at December 31, 2024.

3 Excludes both $3.3 million fair value hedge adjustment at March 31, 2025 and $2.2 million fair value hedge adjustment at December 31, 2024.

About Arrow:  Arrow Financial Corporation is a holding company headquartered in Glens Falls, New York, serving the financial needs of northeastern New York. The Company is the parent of Arrow Bank, a full-service commercial bank, and Upstate Agency, LLC, a comprehensive insurance agency. Other subsidiaries include North Country Investment Advisers, Inc.

Non-GAAP Financial Measures Reconciliation:  In addition to presenting information in conformity with accounting principles generally accepted in the United States of America (GAAP), this news release contains financial information determined by methods other than GAAP (non-GAAP). The following measures used in this release, which are commonly utilized by financial institutions, have not been specifically exempted by the Securities and Exchange Commission ("SEC") and may constitute "non-GAAP financial measures" within the meaning of the SEC's rules. Certain non-GAAP financial measures include: tangible book value, tangible equity, return on tangible equity, tax-equivalent adjustment and related net interest income, tax-equivalent net interest margin and the efficiency ratio. Management believes that the non-GAAP financial measures disclosed by Arrow from time to time are useful in evaluating Arrow's performance and that such information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Non-GAAP financial measures may differ from similar measures presented by other companies. See the reconciliation of GAAP to non-GAAP measures in the section "Selected Quarterly Information."

Safe Harbor Statement:  The information contained in this news release may contain statements that are not historical in nature but rather are based on management's beliefs, assumptions, expectations, estimates and projections about the future. These statements may be "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, involving a degree of uncertainty and attendant risk. In the case of all forward-looking statements, actual outcomes and results may differ materially from what the statements predict or forecast, explicitly or by implication. Arrow undertakes no obligation to revise or update these forward-looking statements to reflect the occurrence of unanticipated events. This News Release should be read in conjunction with Arrow's Annual Report on Form 10-K for the year ended December 31, 2024, and other filings with the SEC.

 

ARROW FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Amounts - Unaudited)




Three Months Ended:



March 31,
2025


December 31,
2024


March 31,
2024

INTEREST AND DIVIDEND INCOME







Interest and Fees on Loans


$            44,550


$            44,703


$            40,376

Interest on Deposits at Banks


1,621


2,880


2,447

Interest and Dividends on Investment Securities:







Fully Taxable


3,608


2,728


3,186

Exempt from Federal Taxes


587


590


668

Total Interest and Dividend Income


50,366


50,901


46,677

INTEREST EXPENSE







Interest-Bearing Checking Accounts


1,803


1,932


1,641

Savings Deposits


9,483


11,144


10,230

Time Deposits over $250,000


1,811


1,815


1,973

Other Time Deposits


5,529


5,906


5,083

Borrowings


167


198


1,076

Junior Subordinated Obligations Issued to

  Unconsolidated Subsidiary Trusts


169


172


171

Interest on Financing Leases


47


47


48

Total Interest Expense


19,009


21,214


20,222

NET INTEREST INCOME


31,357


29,687


26,455

Provision for Credit Losses


5,019


2,854


617

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES


26,338


26,833


25,838

NON-INTEREST INCOME







Income From Fiduciary Activities


2,535


2,615


2,457

Fees for Other Services to Customers


2,600


2,762


2,543

Insurance Commissions


1,826


1,848


1,682

Net Gain (Loss) on Securities


317


(3,072)


17

Net Gain on Sales of Loans


101


74


4

Other Operating Income


460


—


1,155

Total Non-Interest Income


7,839


4,227


7,858

NON-INTEREST EXPENSE







Salaries and Employee Benefits


13,555


13,332


12,893

Occupancy Expenses, Net


2,022


1,870


1,771

Technology and Equipment Expense


5,087


5,119


4,820

FDIC Assessments


670


664


715

Other Operating Expense


4,711


4,853


3,813

Total Non-Interest Expense


26,045


25,838


24,012

INCOME BEFORE PROVISION FOR INCOME TAXES


8,132


5,222


9,684

Provision for Income Taxes


1,822


752


2,024

NET INCOME


$              6,310


$              4,470


$              7,660

Average Shares Outstanding:







Basic


16,665


16,718


16,865

Diluted


16,673


16,739


16,867

Per Common Share:







Basic Earnings


$                0.38


$                0.26


$                0.45

Diluted Earnings


0.38


0.27


0.45

 

ARROW FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share and Per Share Amounts - Unaudited)



March 31,
2025


December 31,
2024

ASSETS




Cash and Due From Banks

$                32,965


$                27,422

Interest-Bearing Deposits at Banks

268,481


127,124

Investment Securities:




Available-for-Sale at Fair Value

445,744


463,111

Held-to-Maturity (Fair Value of $96,335 at March 31, 2025 and $96,586 at December 31, 2024)

97,492


98,261

Equity Securities

5,372


5,055

Other Investments

4,353


4,353

Loans

3,416,868


3,394,541

Allowance for Credit Losses

(37,771)


(33,598)

Net Loans

3,379,097


3,360,943

Premises and Equipment, Net

59,919


59,717

Goodwill

23,789


23,789

Other Intangible Assets, Net

1,954


2,058

Other Assets

129,719


134,515

Total Assets

$          4,448,885


$          4,306,348

LIABILITIES




Noninterest-Bearing Deposits

697,374


702,978

Interest-Bearing Checking Accounts

924,200


810,834

Savings Deposits

1,532,385


1,520,024

Time Deposits over $250,000

182,552


191,962

Other Time Deposits

631,654


602,132

Total Deposits

3,968,165


3,827,930

Borrowings

8,600


8,600

Junior Subordinated Obligations Issued to Unconsolidated

  Subsidiary Trusts

20,000


20,000

Finance Leases

4,979


5,005

Other Liabilities

42,732


43,912

Total Liabilities

4,044,476


3,905,447

STOCKHOLDERS' EQUITY




Preferred Stock, $1 Par Value and 1,000,000 Shares Authorized at March 31, 2025 and December 31, 2024

—


—

Common Stock, $1 Par Value; 30,000,000 Shares Authorized  (22,066,559 Shares Issued at March 31, 2025 and December 31, 2024)

22,067


22,067

Additional Paid-in Capital

413,469


413,476

Retained Earnings

78,827


77,215

Accumulated Other Comprehensive Loss

(13,520)


(18,453)

Treasury Stock, at Cost (5,397,029 Shares at March 31, 2025 and 5,323,638 Shares at December 31, 2024)

(96,434)


(93,404)

Total Stockholders' Equity

404,409


400,901

Total Liabilities and Stockholders' Equity

$          4,448,885


$          4,306,348

 

Arrow Financial Corporation

Selected Quarterly Information

(Dollars In Thousands, Except Per Share Amounts - Unaudited)


Quarter Ended

3/31/2025


12/31/2024


9/30/2024


6/30/2024


3/31/2024

Net Income

$         6,310


$        4,470


$         8,975


$         8,604


$        7,660





















Share and Per Share Data:










Period End Shares Outstanding

16,670


16,743


16,734


16,723


16,710

Basic Average Shares Outstanding

16,665


16,718


16,710


16,685


16,865

Diluted Average Shares Outstanding

16,673


16,739


16,742


16,709


16,867

Basic Earnings Per Share

$           0.38


$           0.26


$           0.54


$           0.52


$           0.45

Diluted Earnings Per Share

0.38


0.27


0.53


0.52


0.45

Cash Dividend Per Share

0.280


0.280


0.270


0.270


0.270











Selected Quarterly Average Balances:










  Interest-Bearing Deposits at Banks

$     146,023


$    233,469


$     154,937


$    159,336


$    178,452

  Investment Securities

591,841


579,107


590,352


644,192


671,105

  Loans

3,406,075


3,354,463


3,329,873


3,280,285


3,235,841

  Deposits

3,825,124


3,847,691


3,672,128


3,678,957


3,693,325

  Other Borrowed Funds

48,375


49,090


134,249


131,537


122,033

  Stockholders' Equity

404,394


393,696


387,904


378,256


379,446

  Total Assets

4,324,917


4,339,833


4,245,597


4,237,359


4,245,484

Return on Average Assets, annualized

0.59 %


0.41 %


0.84 %


0.82 %


0.73 %

Return on Average Equity, annualized

6.33 %


4.52 %


9.20 %


9.15 %


8.12 %

Return on Average Tangible Equity, annualized 1

6.76 %


4.84 %


9.79 %


9.74 %


8.64 %

Average Earning Assets

$ 4,143,939


$ 4,167,039


$ 4,075,162


$ 4,083,813


$ 4,085,398

Average Paying Liabilities

3,184,196


3,185,215


3,085,066


3,127,417


3,108,093

Interest Income

50,366


50,901


49,443


47,972


46,677

Tax-Equivalent Adjustment 2

155


157


149


163


176

Interest Income, Tax-Equivalent 2

50,521


51,058


49,592


48,135


46,853

Interest Expense

19,009


21,214


21,005


20,820


20,222

Net Interest Income

31,357


29,687


28,438


27,152


26,455

Net Interest Income, Tax-Equivalent 2

31,512


29,844


28,587


27,315


26,631

Net Interest Margin, annualized

3.07 %


2.83 %


2.78 %


2.67 %


2.60 %

Net Interest Margin, Tax-Equivalent, annualized 2

3.08 %


2.85 %


2.79 %


2.69 %


2.62 %











Efficiency Ratio Calculation: 3










Non-Interest Expense

$       26,045


$      25,838


$       24,100


$      23,318


$      24,012

Less: Intangible Asset Amortization

81


89


78


40


41

Net Non-Interest Expense

$       25,964


$      25,749


$       24,022


$      23,278


$      23,971

Net Interest Income, Tax-Equivalent

$       31,512


$      29,844


$       28,587


$      27,315


$      26,631

Non-Interest Income

7,839


4,227


8,133


7,856


7,858

Less: Net Gain(loss) on Securities

317


(3,072)


94


54


17

Net Gross Income

$       39,034


$      37,143


$       36,626


$      35,117


$      34,472

Efficiency Ratio

66.52 %


69.32 %


65.59 %


66.29 %


69.54 %











Period-End Capital Information:










Total Stockholders' Equity (i.e. Book Value)

$     404,409


$    400,901


$     393,311


$    383,018


$    377,986

Book Value per Share 

24.26


23.94


23.50


22.90


22.62

Goodwill and Other Intangible Assets, net

25,743


25,847


25,979


22,800


22,891

Tangible Book Value per Share 1

22.72


22.40


21.95


21.54


21.25











Capital Ratios:4










Tier 1 Leverage Ratio

9.61 %


9.60 %


9.78 %


9.74 %


9.63 %

Common Equity Tier 1 Capital Ratio 

12.59 %


12.71 %


12.77 %


12.88 %


12.84 %

Tier 1 Risk-Based Capital Ratio

13.23 %


13.35 %


13.41 %


13.53 %


13.50 %

Total Risk-Based Capital Ratio

14.48 %


14.47 %


14.46 %


14.57 %


14.57 %

 

Arrow Financial Corporation

Selected Quarterly Information - Continued

(Dollars In Thousands, Except Per Share Amounts - Unaudited)


Footnotes:




















1.

Non-GAAP Financial Measure Reconciliation: Tangible Book Value, Tangible Equity, and Return on Tangible Equity exclude goodwill and other intangible assets, net from total equity.  These are non-GAAP financial measures which Arrow believes provide investors with information that is useful in understanding its financial performance.



3/31/2025


12/31/2024


9/30/2024


6/30/2024


3/31/2024


Total Stockholders' Equity (GAAP)

$   404,409


$   400,901


$   393,311


$   383,018


$   377,986


Less:  Goodwill and Other Intangible assets, net

25,743


25,847


25,979


22,800


22,891


Tangible Equity (Non-GAAP)

$   378,666


$   375,054


$   367,332


$   360,218


$   355,095













Period End Shares Outstanding

16,670


16,743


16,734


16,723


16,710


Tangible Book Value per Share (Non-GAAP)

$        22.72


$        22.40


$        21.95


$        21.54


$        21.25


Net Income

6,310


4,470


8,975


8,604


7,660


Return on Tangible Equity (Net Income/Tangible Equity - Annualized)

6.76 %


4.84 %


9.79 %


9.74 %


8.64 %












2.

Non-GAAP Financial Measure Reconciliation: Net Interest Margin is the ratio of annualized tax-equivalent net interest income to average earning assets.  This is also a non-GAAP financial measure which Arrow believes provides investors with information that is useful in understanding its financial performance.



3/31/2025


12/31/2024


9/30/2024


6/30/2024


3/31/2024


Interest Income (GAAP)

$     50,366


$     50,901


$     49,443


$     47,972


$     46,677


Add:  Tax-Equivalent adjustment

     (Non-GAAP)

155


157


149


163


176


Interest Income - Tax Equivalent

     (Non-GAAP)

$     50,521


$     51,058


$     49,592


$     48,135


$     46,853


Net Interest Income (GAAP)

$     31,357


$     29,687


$     28,438


$     27,152


$     26,455


Add:  Tax-Equivalent adjustment

     (Non-GAAP)

155


157


149


163


176


Net Interest Income - Tax Equivalent

     (Non-GAAP)

$     31,512


$     29,844


$     28,587


$     27,315


$     26,631


Average Earning Assets

$  4,143,939


$  4,167,039


$  4,075,162


$  4,083,813


$  4,085,398


Net Interest Margin (Non-GAAP)*

3.08 %


2.85 %


2.79 %


2.69 %


2.62 %












3.

Non-GAAP Financial Measure Reconciliation: Financial Institutions often use the "efficiency ratio", a non-GAAP ratio, as a measure of expense control.  Arrow believes the efficiency ratio provides investors with information that is useful in understanding its financial performance.  Arrow defines efficiency ratio as the ratio of non-interest expense to net gross income (which equals tax-equivalent net interest income plus non-interest income, as adjusted).












4.

For the current quarter, all of the regulatory capital ratios as well as the Total Risk-Weighted Assets are calculated in accordance with bank regulatory capital rules.  The March 31, 2025 CET1 ratio listed in the tables (i.e., 12.59%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%).



3/31/2025


12/31/2024


9/30/2024


6/30/2024


3/31/2024


Total Risk Weighted Assets

$  3,143,547


$  3,126,364


$  3,110,178


$  3,072,922


$  3,049,525


Common Equity Tier 1 Capital

395,900


397,285


397,122


395,691


391,706


Common Equity Tier 1 Ratio

12.59 %


12.71 %


12.77 %


12.88 %


12.84 %












* Quarterly ratios have been annualized.

 

Arrow Financial Corporation

Average Consolidated Balance Sheets and Net Interest Income Analysis

(Dollars in Thousands - Unaudited)


Quarter Ended:

March 31, 2025


March 31, 2024




Interest


Rate




Interest


Rate


Average


Income/


Earned/


Average


Income/


Earned/


Balance


Expense


Paid


Balance


Expense


Paid

Interest-Bearing Deposits at Banks

$   146,023


$       1,621


4.50 %


$  178,452


$       2,447


5.52 %

Investment Securities:












Fully Taxable

499,903


3,608


2.93


550,538


3,186


2.33

Exempt from Federal Taxes

91,938


587


2.59


120,567


668


2.23

Loans (1)

3,406,075


44,550


5.30


3,235,841


40,376


5.02

Total Earning Assets (1)

4,143,939


50,366


4.93


4,085,398


46,677


4.60

Allowance for Credit Losses

(33,691)






(31,416)





Cash and Due From Banks

31,515






29,804





Other Assets

183,154






161,698





Total Assets

$  4,324,917






$  4,245,484





Deposits:












Interest-Bearing Checking Accounts

$   840,571


1,803


0.87


$  830,918


1,641


0.79

Savings Deposits

1,515,961


9,483


2.54


1,481,001


10,230


2.78

Time Deposits of $250,000 or More

186,159


1,811


3.95


177,328


1,973


4.47

Other Time Deposits

593,130


5,529


3.78


496,813


5,083


4.11

Total Interest-Bearing Deposits

3,135,821


18,626


2.41


2,986,060


18,927


2.55

Borrowings

23,378


167


2.90


96,984


1,076


4.46

Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts

20,000


169


3.43


20,000


171


3.44

Finance Leases

4,997


47


3.81


5,049


48


3.82

Total Interest-Bearing Liabilities

3,184,196


19,009


2.42


3,108,093


20,222


2.62

Noninterest-Bearing Deposits

689,303






707,265





Other Liabilities

47,024






50,680





Total Liabilities

3,920,523






3,866,038





Stockholders' Equity

404,394






379,446





Total Liabilities and Stockholders' Equity

$  4,324,917






$  4,245,484





Net Interest Income



$     31,357






$     26,455



Net Interest Spread





2.51 %






1.98 %

Net Interest Margin





3.07 %






2.60 %


(1) Includes Nonaccrual Loans.

 

Arrow Financial Corporation

Average Consolidated Balance Sheets and Net Interest Income Analysis

(Dollars in Thousands - Unaudited)


Quarter Ended:

March 31, 2025


December 31, 2024




Interest


Rate




Interest


Rate


Average


Income/


Earned/


Average


Income/


Earned/


Balance


Expense


Paid


Balance


Expense


Paid

Interest-Bearing Deposits at Banks

$   146,023


$       1,621


4.50 %


$  233,469


$       2,880


4.91 %

Investment Securities:












Fully Taxable

499,903


3,608


2.93


484,860


2,728


2.24

Exempt from Federal Taxes

91,938


587


2.59


94,247


590


2.49

Loans (1)

3,406,075


44,550


5.30


3,354,463


44,703


5.30

Total Earning Assets (1)

4,143,939


50,366


4.93


4,167,039


50,901


4.86

Allowance for Credit Losses

(33,691)






(31,529)





Cash and Due From Banks

31,515






30,706





Other Assets

183,154






173,617





Total Assets

$  4,324,917






$  4,339,833





Deposits:












Interest-Bearing Checking Accounts

$   840,571


1,803


0.87


$  802,808


1,932


0.96

Savings Deposits

1,515,961


9,483


2.54


1,567,455


11,144


2.83

Time Deposits of $250,000 or More

186,159


1,811


3.95


183,325


1,815


3.94

Other Time Deposits

593,130


5,529


3.78


582,537


5,906


4.03

Total Interest-Bearing Deposits

3,135,821


18,626


2.41


3,136,125


20,797


2.64

Borrowings

23,378


167


2.90


24,089


198


3.27

Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts

20,000


169


3.43


20,000


172


3.42

Finance Leases

4,997


47


3.81


5,001


47


3.74

Total Interest-Bearing Liabilities

3,184,196


19,009


2.42


3,185,215


21,214


2.65

Noninterest-Bearing Deposits

689,303






711,566





Other Liabilities

47,024






49,356





Total Liabilities

3,920,523






3,946,137





Stockholders' Equity

404,394






393,696





Total Liabilities and Stockholders' Equity

$  4,324,917






$  4,339,833





Net Interest Income



$     31,357






$     29,687



Net Interest Spread





2.51 %






2.21 %

Net Interest Margin





3.07 %






2.83 %


(1) Includes Nonaccrual Loans.

 

Arrow Financial Corporation

Consolidated Financial Information

(Dollars in Thousands - Unaudited)


Quarter Ended:

3/31/2025


12/31/2024

Loan Portfolio




Commercial Loans

$       154,275


$       158,991

Commercial Real Estate Loans

804,015


796,365

  Subtotal Commercial Loan Portfolio

958,290


955,356

Consumer Loans

1,118,735


1,118,981

Residential Real Estate Loans

1,339,843


1,320,204

Total Loans

$   3,416,868


$   3,394,541

Allowance for Credit Losses




Allowance for Credit Losses, Beginning of Quarter

$         33,598


$         31,262

Loans Charged-off

(1,550)


(1,333)

Less Recoveries of Loans Previously Charged-off

704


815

Net Loans Charged-off

(846)


(518)

Provision for Credit Losses

5,019


2,854

Allowance for Credit Losses, End of Quarter

$         37,771


$         33,598

Nonperforming Assets




Nonaccrual Loans

$         18,612


$         20,621

Loans Past Due 90 or More Days and Accruing

405


398

Loans Restructured and in Compliance with Modified Terms

16


20

Total Nonperforming Loans

19,033


21,039

Repossessed Assets

426


382

Other Real Estate Owned

—


76

Total Nonperforming Assets

$         19,459


$         21,497





Key Asset Quality Ratios




Net Loans Charged-off to Average Loans,

   Quarter-to-date Annualized

0.10 %


0.06 %

Provision for Credit Losses to Average Loans,

  Quarter-to-date Annualized

0.60 %


0.34 %

Allowance for Credit Losses to Period-End Loans

1.11 %


0.99 %

Allowance for Credit Losses to Period-End Nonperforming Loans

198.45 %


159.69 %

Nonperforming Loans to Period-End Loans

0.56 %


0.62 %

Nonperforming Assets to Period-End Assets

0.44 %


0.50 %





 

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SOURCE Arrow Financial Corporation