Arrow Financial Corporation (NasdaqGS® – AROW) (“Arrow” or “the Company”) announced financial results for the three-month period ended September 30, 2025. Reported net income for the third quarter of 2025 was $12.8 million and fully diluted earnings per share (“EPS”) was $0.77, versus net income of $10.8 million and EPS of $0.65 for the second quarter of 2025.
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The Board of Directors of Arrow declared a quarterly cash dividend of $0.29 per share; payable November 24, 2025 to shareholders of record as of November 12, 2025.
This quarter's results include approximately $600 thousand ($0.03 per share) of non-core unification costs related to Arrow's system conversion and operational merger of its two banking subsidiaries, which were successfully completed in July 2025. Arrow does not expect to incur additional costs related to the unification effort.
This Earnings Release and related commentary should be read in conjunction with the Company's October30, 2025 Form 8-K and related Third 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:
“I am proud to report that on the heels of our unification effort, the Arrow team delivered a great financial quarter. EPS increased by almost 20% from the prior quarter and ROA improved by 16 bps to 1.16%, despite recognizing the last remaining unification expenses. Our third quarter delivered record net interest income, solid net interest margin expansion and more than 10% annualized growth in tangible book value. With the Federal Reserve enacting a first round of interest rate cuts late in the third quarter and again in late October, Arrow is well-positioned with our near-term liability sensitive balance sheet to deliver another great quarter to end the year. We are delighted that we can use our improved financial performance to continue to support our communities while delivering strong results to our shareholders.”
Third-Quarter Highlights and Key Metrics
— Net Income of $12.8 million (EPS of $0.77)
— Record Net Interest Income of $34.1 million
— Net Interest Margin improved to 3.22% (3.24%FTE1), from 3.15% (3.16% FTE1) in the prior quarter
— Return on Average Assets (ROA) improved to 1.16%, an increase from 1.00% for the prior quarter
— Loan-to-Deposit ratio of 84.0%
— Quarter-end loan exit rates2 increased to 5.56% at September 30, 2025 vs. 5.51% at June 30, 2025
— Cost of retail deposits3 decreased by 9 bps to 1.68% from the prior quarter
— Approximately $2 billion of deposits subject torepricing with additional federal reserve rate cuts
— Tangible Book Value per share increased to $23.85, an increase of 2.7% from the prior quarter
— Repurchased $1.4 million of shares (52,947 shares at an average cost of $26.87 per share)
— $5.1 million remaining under current repurchase authorization
— Recently received preliminary court approval of the negotiated settlement in the Shareholder Derivative Complaint described in previous SEC filings. The preliminary approval has no material financial impact to the results of operations or financial position.
Income Statement
— Net Income:Net income for the third quarter of 2025 was $12.8 million, increasing from $10.8 million in the second quarter of 2025.
— Compared to the prior quarter, net income benefited from an increase of $1.6 million in net interest income, an increase in non-interest income of $1.1 million and a slight decrease in non-interest expense of $0.2 million.
— Net Interest Income:Net interest income for the third quarter of 2025 was $34.1 million, increasing 4.9% from the second quarter of 2025.
— Total interest and dividend income was $53.6 million for the third quarter of 2025, an increase from $51.6 million in the second quarter of 2025. Interest expense for the third quarter of 2025 was $19.5 million, an increase from $19.0 million in the second quarter of 2025.
— Net Interest Margin:Net interest margin, on an FTE basis, for the third quarter of 2025 increased to 3.24%, compared to 3.16% for the second quarter of 2025. The increase in net interest margin compared to the second quarter of 2025 was primarily the result of continued yield expansion on earning assets combined with the stabilizing cost of interest-bearing liabilities.
Three Months Ended (Dollars in Thousands) September 30, 2025 June 30, 2025 September 30, 2024Interest and Dividend Income $ 53,598 $ 51,573 $ 49,443Interest Expense 19,467 19,040 21,005Net Interest Income 34,131 32,533 28,438Average Earning Assets(A) 4,199,115 4,142,993 4,075,162Average Interest-Bearing Liabilities 3,193,789 3,191,906 3,085,066Average Yield on Earning Assets(A) 5.06% 4.99% 4.83%Average Cost of Interest-Bearing Liabilities 2.42 2.39 2.71Net Interest Spread 2.64 2.60 2.12Net Interest Margin 3.22 3.15 2.78Net Interest Margin – FTE 3.24 3.16 2.79(A) Includes Nonaccrual Loans
— Provision for Credit Losses:For the third quarter of 2025, the provision for credit losses was $815 thousand compared to $594 thousand in the second quarter of 2025, primarily driven by third quarter 2025 charge-offs.
— Non-Interest Income:Non-interest income for the three months ended September 30, 2025, was $8.7 million, an increase from $7.6 million in the second quarter of 2025. Revenue related to wealth management increased from the prior quarter as a result of overall market performance. Interchange fees improved in the third quarter from the linked quarter. The third quarter of 2025 included a positive valuation adjustment related to an equity position.
— Non-Interest Expense:Non-interest expense for the third quarter of 2025 was $25.4 million, a decrease from $25.7 million in the second quarter of 2025. The third quarter of 2025 included unification expenses of approximately $600 thousand as compared to $1.1 million in the second quarter of 2025. 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 control.
— Provision for Income Taxes: The provision for income taxes and effective tax rate were $3.8 million and 22.7%, respectively for the third quarter of 2025, and $3.1 million and 22.4%, respectively for the second quarter of 2025.
Balance Sheet
— Total Assets: Total assets were $4.6 billion at September 30, 2025, an increase of $172.4 million, or 3.9%, as compared to June 30, 2025. For the third quarter of 2025, the overall change in the balance sheet was primarily attributable to the seasonal surge in municipal deposits as well as fluctuations in cash balances, maturities of investments and growth in the loan portfolio.
— Investments: Total investments were $558.4 million as of September 30, 2025, an increase of $30.0 million, or 5.7%, compared to June 30, 2025. The increase from June 30, 2025 was driven primarily by $48 million of additional investments offset by paydowns and maturities. There were no credit quality issues related to the investment portfolio.]
— Loans4: Total loans were $3.4 billion as of September 30, 2025. Loan growth for the third quarter of 2025 was $17.3 million. Loan growth was primarily driven by an increase in residential real estate loans and commercial 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 $34.2 million as of September 30, 2025, which represented 0.99% of loans outstanding, as compared to $34.2 million, or 1.00% of loans outstanding, at June 30, 2025. Net charge-offs, expressed as an annualized percentage of average loans outstanding, were 0.10% for the three-month period ended September 30, 2025, as compared to 0.49% for the three-month period ended June 30, 2025. The decrease was the result of a charge-off of a previously reserved commercial loan participation in the second quarter of 2025. Nonperforming assets were $6.7 million as of September 30, 2025, representing 0.15% of period-end assets, compared to $6.8 million, or 0.15%, at June 30, 2025.
— Deposits: At September 30, 2025, deposit balances were $4.1 billion, an increase of $170.7 million from June 30, 2025. The change from June 30, 2025 was primarily attributable to the seasonality of municipal deposits. Please refer to page 6 for further details related to deposits.
— Capital:Total stockholders' equity was $417.7 million at September 30, 2025, an increase of $9.2 million, or 2.2%, from June 30, 2025. The increase from June 30, 2025 was primarily attributable to net income of $12.8 million and other comprehensive income of $2.2 million offset by dividends of $4.8 million and share repurchases of $1.4 million and other stock-based activity. Arrow's regulatory capital ratios remain strong. As of September 30, 2025, Arrow's Common Equity Tier 1 Capital Ratio was 13.07% and Total Risk-Based Capital Ratio was 14.86%. Regulatory capital ratios are preliminary, subject to finalization as part of the current quarter Call Report. 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 74 consecutive quarters, securing its prominent position as an “Exceptional Performance Bank.”
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.
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 withGAAP.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 earnings 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 can sometimes be identified by Arrow's use of forward-looking words such as “may,” “will,” “anticipate,” “estimate,” “expect,” or “intend.” 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 because of various factors, including changes in economic conditions or interest rates, credit risk, inflation, tariffs, cybersecurity risks, changes in FDIC assessments, bank failures, difficulties in managing the Arrow's growth, competition, changes in law or the regulatory environment, and changes in general business and economic trends. Arrow undertakes no obligation to revise or update these forward-looking statements to reflect the occurrence of unanticipated events. This earnings 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.
1 FTE Net interest margin is a non-GAAP measure. See reconciliation on Note 2 to the Selected Quarterly Information. 2The “loan exit rate” is the point in time interest rate in effect at the end of the reporting period. 3Retail deposits exclude wholesale funding sources 4Excludes $3.0 million and $3.2 million fair value hedge adjustments at September 30, 2025 and June30, 2025, respectively.
ARROW FINANCIAL CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(In Thousands, Except Per Share Amounts – Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024INTEREST AND DIVIDEND INCOMEInterest and Fees on Loans $ 46,832 $ 44,122 $ 136,982 $ 126,639Interest on Deposits at Banks 2,245 2,103 5,488 6,735Interest and Dividends on Investment Securities:Fully Taxable 4,066 2,656 11,464 8,851Exempt from Federal Taxes 455 562 1,603 1,867Total Interest and Dividend Income 53,598 49,443 155,537 144,092INTEREST EXPENSEInterest-Bearing Checking Accounts 2,160 1,966 5,904 5,510Savings Deposits 9,534 10,905 28,384 31,706Time Deposits over $250,000 1,695 1,803 5,232 5,645Other Time Deposits 5,859 4,934 17,181 15,091Borrowings – 1,177 167 3,439Junior Subordinated Obligations Issued to 173 173 513 514Unconsolidated Subsidiary TrustsInterest on Financing Leases 46 47 135 142Total Interest Expense 19,467 21,005 57,516 62,047NET INTEREST INCOME 34,131 28,438 98,021 82,045Provision for Credit Losses 815 934 6,428 2,326NET INTEREST INCOME AFTER PROVISION FOR 33,316 27,504 91,593 79,719CREDIT LOSSESNON-INTEREST INCOMEIncome From Fiduciary Activities 2,600 2,429 7,533 7,337Fees for Other Services to Customers 2,857 2,881 8,244 8,130Insurance Commissions 1,986 1,955 5,616 5,299Net Gain on Securities 392 94 669 165Net Gain on Sales of Loans 259 126 573 135Other Operating Income 622 648 1,529 2,781Total Non-Interest Income 8,716 8,133 24,164 23,847NON-INTEREST EXPENSESalaries and Employee Benefits 14,339 13,446 41,980 39,375Occupancy Expenses, Net 1,907 1,754 5,881 5,299Technology and Equipment Expense 4,963 4,692 15,639 14,246FDIC Assessments 634 698 1,953 2,111Other Operating Expense 3,590 3,510 11,677 10,399Total Non-Interest Expense 25,433 24,100 77,130 71,430INCOME BEFORE PROVISION FOR INCOME TAXES 16,599 11,537 38,627 32,136Provision for Income Taxes 3,774 2,562 8,687 6,897NET INCOME $ 12,825 $ 8,975 $ 29,940 $ 25,239Average Shares Outstanding:Basic 16,402 16,710 16,541 16,746Diluted 16,406 16,742 16,543 16,772Per Common Share:Basic Earnings $ 0.77 $ 0.54 $ 1.80 $ 1.51Diluted Earnings 0.77 0.53 1.80 1.50
ARROW FINANCIAL CORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In Thousands, Except Share and Per Share Amounts – Unaudited) September 30, December 31, 2025 2024ASSETSCash and Due From Banks $ 45,925 $ 27,422Interest-Earning Deposits at Banks 351,512 127,124Investment Securities:Available-for-Sale at Fair Value 485,583 463,111Held-to-Maturity (Fair Value of $62,251 at September30, 62,744 98,2612025 and $96,586 at December31, 2024)Equity Securities 5,724 5,055Other Investments 4,369 4,353Loans 3,442,009 3,394,541Allowance for Credit Losses (34,176) (33,598)Net Loans 3,407,833 3,360,943Premises and Equipment, Net 60,002 59,717Goodwill 23,789 23,789Other Intangible Assets, Net 1,805 2,058Other Assets 137,829 134,515Total Assets $ 4,587,115 $ 4,306,348LIABILITIESNoninterest-Bearing Deposits 771,014 702,978Interest-Bearing Checking Accounts 977,871 810,834Savings Deposits 1,526,055 1,520,024Time Deposits over $250,000 178,843 191,962Other Time Deposits 646,268 602,132Total Deposits 4,100,051 3,827,930Borrowings 4,265 8,600Junior Subordinated Obligations Issued to Unconsolidated 20,000 20,000Subsidiary TrustsFinance Leases 4,928 5,005Other Liabilities 40,184 43,912Total Liabilities 4,169,428 3,905,447STOCKHOLDERS' EQUITYPreferred Stock, $1 Par Value; 1,000,000 Shares Authorized – -at September30, 2025 and December31, 2024Common Stock, $1 Par Value; 30,000,000 Shares Authorized 22,067 22,067(22,066,559 Shares Issued at September30, 2025 and December31, 2024)Additional Paid-in Capital 414,133 413,476Retained Earnings 93,027 77,215Accumulated Other Comprehensive Loss (8,640) (18,453)Treasury Stock, at Cost (5,628,864 Shares at September30, (102,900) (93,404)2025 and 5,323,638 Shares at December31, 2024)Total Stockholders' Equity 417,687 400,901Total Liabilities and Stockholders' Equity $ 4,587,115 $ 4,306,348
Arrow Financial CorporationSelected Quarterly Information(Dollars In Thousands, Except Per Share Amounts- Unaudited)Quarter Ended 9/30/2025 6/30/2025 3/31/2025 12/31/2024 9/30/2024Net Income $ 12,825 $ 10,805 $ 6,310 $ 4,470 $ 8,975Share and Per Share Data:Period End Shares Outstanding 16,438 16,484 16,670 16,743 16,734Basic Average Shares Outstanding 16,402 16,545 16,665 16,718 16,710Diluted Average Shares Outstanding 16,406 16,551 16,673 16,739 16,742Basic Earnings Per Share $ 0.77 $ 0.65 $ 0.38 $ 0.26 $ 0.54Diluted Earnings Per Share 0.77 0.65 0.38 0.27 0.53Cash Dividend Per Share 0.29 0.28 0.28 0.28 0.27Selected Quarterly Average Balances:Interest-Earning Deposits at Banks $ 200,251 $ 145,473 $ 146,023 $ 233,469 $ 154,937Investment Securities 574,080 582,380 591,841 579,107 590,352Loans 3,424,784 3,415,140 3,406,075 3,354,463 3,329,873Deposits 3,913,721 3,849,093 3,825,124 3,847,691 3,672,128Other Borrowed Funds 30,539 33,579 48,375 49,090 134,249Stockholders' Equity 413,058 406,529 404,394 393,696 387,904Total Assets 4,399,815 4,332,339 4,324,917 4,339,833 4,245,597Return on Average Assets, annualized 1.16% 1.00% 0.59% 0.41% 0.84%Return on Average Equity, annualized 12.32% 10.66% 6.33% 4.52% 9.20%Return on Average Tangible Equity, annualized 1 13.13% 11.38% 6.76% 4.84% 9.79%Average Earning Assets $ 4,199,115 $ 4,142,993 $ 4,143,939 $ 4,167,039 $ 4,075,162Average Paying Liabilities 3,193,789 3,191,906 3,184,196 3,185,215 3,085,066Interest Income 53,598 51,573 50,366 50,901 49,443Tax-Equivalent Adjustment 2 121 148 155 157 149Interest Income, Tax-Equivalent 2 53,719 51,721 50,521 51,058 49,592Interest Expense 19,467 19,040 19,009 21,214 21,005Net Interest Income 34,131 32,533 31,357 29,687 28,438Net Interest Income, Tax-Equivalent 2 34,252 32,681 31,512 29,844 28,587Net Interest Margin, annualized 3.22% 3.15% 3.07% 2.83% 2.78%Net Interest Margin, Tax-Equivalent, annualized 2 3.24% 3.16% 3.08% 2.85% 2.79%Efficiency Ratio Calculation:3Non-Interest Expense $ 25,433 $ 25,652 $ 26,045 $ 25,838 $ 24,100Less: Intangible Asset Amortization 76 80 81 89 78Net Non-Interest Expense $ 25,357 $ 25,572 $ 25,964 $ 25,749 $ 24,022Net Interest Income, Tax-Equivalent $ 34,252 $ 32,681 $ 31,512 $ 29,844 $ 28,587Non-Interest Income 8,716 7,609 7,839 4,227 8,133Less: Net Gain (Loss) on Securities 392 (40) 317 (3,072) 94Net Gross Income $ 42,576 $ 40,330 $ 39,034 $ 37,143 $ 36,626Efficiency Ratio 59.56% 63.41% 66.52% 69.32% 65.59%Period-End Capital Information:Total Stockholders' Equity (i.e. Book Value) $ 417,687 $ 408,506 $ 404,409 $ 400,901 $ 393,311Book Value per Share 25.41 24.78 24.26 23.94 23.50Goodwill and Other Intangible Assets, net 25,594 25,659 25,743 25,847 25,979Tangible Book Value per Share 1 23.85 23.23 22.72 22.40 21.95Capital Ratios:4Tier 1 Leverage Ratio 9.66% 9.64% 9.61% 9.60% 9.78%Common Equity Tier 1 Capital Ratio 13.07% 12.73% 12.59% 12.71% 12.77%Tier 1 Risk-Based Capital Ratio 13.71% 13.37% 13.23% 13.35% 13.41%Total Risk-Based Capital Ratio 14.86% 14.51% 14.48% 14.47% 14.46%
Arrow Financial CorporationSelected 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 9/30/2025 6/30/2025 12/31/2024 12/31/2024 9/30/2024 Total Stockholders' Equity (GAAP) $ 417,687 $ 408,506 $ 404,409 $ 400,901 $ 393,311 Less: Goodwill and Other Intangible assets, net 25,594 25,659 25,743 25,847 25,979 Tangible Equity (Non-GAAP) $ 392,093 $ 382,847 $ 378,666 $ 375,054 $ 367,332 Period End Shares Outstanding 16,438 16,484 16,670 16,743 16,734 Tangible Book Value per Share (Non-GAAP) $ 23.85 $ 23.23 $ 22.72 $ 22.40 $ 21.95 Net Income 12,825 10,805 6,310 4,470 8,975 Return on Tangible Equity (Net Income/Tangible Equity – Annualized) 13.13% 11.38% 6.76% 4.84% 9.79%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 9/30/2025 6/30/2025 12/31/2024 12/31/2024 9/30/2024 Interest Income (GAAP) $ 53,598 $ 51,573 $ 50,366 $ 50,901 $ 49,443 Add: Tax-Equivalent adjustment 121 148 155 157 149 (Non-GAAP) Interest Income – Tax Equivalent $ 53,719 $ 51,721 $ 50,521 $ 51,058 $ 49,592 (Non-GAAP) Net Interest Income (GAAP) $ 34,131 $ 32,533 $ 31,357 $ 29,687 $ 28,438 Add: Tax-Equivalent adjustment 121 148 155 157 149 (Non-GAAP) Net Interest Income – Tax Equivalent $ 34,252 $ 32,681 $ 31,512 $ 29,844 $ 28,587 (Non-GAAP) Average Earning Assets $ 4,199,115 $ 4,142,993 $ 4,143,939 $ 4,167,039 $ 4,075,162 Net Interest Margin (Non-GAAP)* 3.24% 3.16% 3.08% 2.85% 2.79%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 September 30, 2025 CET1 ratio listed in the tables (i.e. , 13.07%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%). Regulatory capital ratios are estimated, subject to finalization as part of the current quarter Call Report 9/30/2025 6/30/2025 12/31/2024 12/31/2024 9/30/2024 Total Risk Weighted Assets $ 3,095,225 $ 3,121,451 $ 3,143,547 $ 3,126,364 $ 3,110,178 Common Equity Tier 1 Capital 404,426 397,432 395,900 397,285 397,122 Common Equity Tier 1 Ratio 13.07% 12.73% 12.59% 12.71% 12.77%* Quarterly ratios have been annualized
Arrow Financial CorporationAverage Consolidated Balance Sheets and Net Interest Income Analysis(Dollars in Thousands – Unaudited)Quarter Ended: September 30, 2025 September 30, 2024 Interest Rate Interest Rate Average Income/ Earned/ Average Income/ Earned/ Balance Expense Paid Balance Expense PaidInterest-Earning Deposits atBanks $ 200,251 $ 2,245 4.45% $ 154,937 $ 2,103 5.40%Investment Securities:Fully Taxable 509,599 4,066 3.17 497,450 2,656 2.12Exempt from Federal Taxes 64,481 455 2.80 92,902 562 2.41Loans (1) 3,424,784 46,832 5.43 3,329,873 44,122 5.27Total Earning Assets (1) 4,199,115 53,598 5.06 4,075,162 49,443 4.83Allowance for Credit Losses (34,143) (31,147)Cash and Due From Banks 33,984 33,159Other Assets 200,859 168,423Total Assets $ 4,399,815 $ 4,245,597Deposits:Interest-Bearing Checking Accounts $ 848,622 2,160 1.01 $ 785,134 1,966 1.00Savings Deposits 1,492,204 9,534 2.53 1,492,888 10,905 2.91Time Deposits of $250,000 or More 177,826 1,695 3.78 174,028 1,803 4.12Other Time Deposits 644,598 5,859 3.61 498,767 4,934 3.94Total Interest-Bearing Deposits 3,163,250 19,248 2.41 2,950,817 19,608 2.64Borrowings 5,583 – – 109,230 1,177 4.29Junior Subordinated Obligations Issued to 20,000 173 3.43 20,000 173 3.44Unconsolidated Subsidiary TrustsFinance Leases 4,956 46 3.68 5,019 47 3.73Total Interest-Bearing Liabilities 3,193,789 19,467 2.42 3,085,066 21,005 2.71Noninterest-Bearing Deposits 750,471 721,311Other Liabilities 42,497 51,316Total Liabilities 3,986,757 3,857,693Stockholders' Equity 413,058 387,904Total Liabilities andStockholders' Equity $ 4,399,815 $ 4,245,597Net Interest Income $ 34,131 $ 28,438Net Interest Spread 2.64% 2.12%Net Interest Margin 3.22% 2.78%
(1) Includes Nonaccrual Loans.
Arrow Financial CorporationAverage Consolidated Balance Sheets and Net Interest Income Analysis(Dollars in Thousands – Unaudited)Quarter Ended: September 30, 2025 June 30, 2025 Interest Rate Interest Rate Average Income/ Earned/ Average Income/ Earned/ Balance Expense Paid Balance Expense PaidInterest-Earning Deposits atBanks $ 200,251 $ 2,245 4.45% $ 145,473 $ 1,622 4.47%Investment Securities:Fully Taxable 509,599 4,066 3.17 496,614 3,790 3.06Exempt from Federal Taxes 64,481 455 2.80 85,766 561 2.62Loans (1) 3,424,784 46,832 5.43 3,415,140 45,600 5.36Total Earning Assets (1) 4,199,115 53,598 5.06 4,142,993 51,573 4.99Allowance for Credit Losses (34,143) (35,238)Cash and Due From Banks 33,984 29,267Other Assets 200,859 195,317Total Assets $ 4,399,815 $ 4,332,339Deposits:Interest-Bearing Checking Accounts $ 848,622 2,160 1.01 $ 845,041 1,941 0.92Savings Deposits 1,492,204 9,534 2.53 1,494,930 9,367 2.51Time Deposits of $250,000 or More 177,826 1,695 3.78 179,980 1,726 3.85Other Time Deposits 644,598 5,859 3.61 638,376 5,793 3.64Total Interest-Bearing Deposits 3,163,250 19,248 2.41 3,158,327 18,827 2.39Borrowings 5,583 – – 8,601 – -Junior Subordinated Obligations Issued to 20,000 173 3.43 20,000 171 3.43Unconsolidated Subsidiary TrustsFinance Leases 4,956 46 3.68 4,978 42 3.38Total Interest-Bearing Liabilities 3,193,789 19,467 2.42 3,191,906 19,040 2.39Noninterest-Bearing Deposits 750,471 690,766Other Liabilities 42,497 43,138Total Liabilities 3,986,757 3,925,810Stockholders' Equity 413,058 406,529Total Liabilities andStockholders' Equity $ 4,399,815 $ 4,332,339Net Interest Income $ 34,131 $ 32,533Net Interest Spread 2.64% 2.60%Net Interest Margin 3.22% 3.15%
(1) Includes Nonaccrual Loans.
Arrow Financial CorporationAverage Consolidated Balance Sheets and Net Interest Income Analysis(Dollars in Thousands – Unaudited)Year to Date Period Ended: September 30, 2025 September 30, 2024 Interest Rate Interest Rate Average Income/ Earned/ Average Income/ Earned/ Balance Expense Paid Balance Expense PaidInterest-Earning Deposits atBanks $ 164,114 $ 5,488 4.47% $ 164,208 $ 6,735 5.48%Investment Securities:Fully Taxable 502,075 11,464 3.05 526,181 8,851 2.25Exempt from Federal Taxes 80,628 1,603 2.66 108,872 1,867 2.29Loans (1) 3,415,401 136,982 5.36 3,282,175 126,639 5.15Total Earning Assets (1) 4,162,218 155,537 5.00 4,081,436 144,092 4.72Allowance for Credit Losses (34,359) (31,340)Cash and Due From Banks 31,598 30,534Other Assets 193,174 162,194Total Assets $ 4,352,631 $ 4,242,824Deposits:Interest-Bearing Checking Accounts $ 844,774 5,904 0.93 $ 815,933 5,510 0.90Savings Deposits 1,500,944 28,384 2.53 1,487,005 31,706 2.85Time Deposits of $250,000 or More 181,291 5,232 3.86 174,668 5,645 4.32Other Time Deposits 625,557 17,181 3.67 499,881 15,091 4.03Total Interest-Bearing Deposits 3,152,566 56,701 2.40 2,977,487 57,952 2.60Borrowings 12,455 167 1.79 104,257 3,439 4.41Junior Subordinated Obligations Issued to 20,000 513 3.43 20,000 514 3.43Unconsolidated Subsidiary TrustsFinance Leases 4,977 135 3.63 5,034 142 3.77Total Interest-Bearing Liabilities 3,189,998 57,516 2.41 3,106,778 62,047 2.67Noninterest-Bearing Deposits 710,404 703,948Other Liabilities 44,203 50,207Total Liabilities 3,944,605 3,860,933Stockholders' Equity 408,026 381,891Total Liabilities andStockholders' Equity $ 4,352,631 $ 4,242,824Net Interest Income $ 98,021 $ 82,045Net Interest Spread 2.59% 2.05%Net Interest Margin 3.15% 2.69%(1) Includes Nonaccrual Loans
Arrow Financial CorporationConsolidated Financial Information(Dollars in Thousands – Unaudited)Quarter Ended: 9/30/2025 12/31/2024Loan PortfolioCommercial Loans $ 170,330 $ 158,991Commercial Real Estate Loans 809,696 796,365Subtotal Commercial Loan Portfolio 980,026 955,356Consumer Loans 1,089,233 1,118,981Residential Real Estate Loans 1,372,750 1,320,204Total Loans $ 3,442,009 $ 3,394,541Allowance for Credit LossesAllowance for Credit Losses, Beginning of Quarter $ 34,191 $ 31,262Loans Charged-off (1,464) (1,333)Less Recoveries of Loans Previously Charged-off 634 815Net Loans Charged-off (830) (518)Provision for Credit Losses 815 2,854Allowance for Credit Losses, End of Quarter $ 34,176 $ 33,598Nonperforming AssetsNonaccrual Loans $ 5,615 $ 20,621Loans Past Due 90 or More Days and Accruing 685 398Loans Restructured and in Compliance with Modified Terms 6 20Total Nonperforming Loans 6,306 21,039Repossessed Assets 361 382Other Real Estate Owned – 76Total Nonperforming Assets $ 6,667 $ 21,497Key Asset Quality RatiosNet Loans Charged-off to Average Loans, 0.10% 0.06%Quarter-to-dateAnnualizedProvision for Credit Losses to Average Loans, 0.09% 0.34%Quarter-to-dateAnnualizedAllowance for Credit Losses to Period-End Loans 0.99% 0.99%Allowance for Credit Losses to Period-End NonperformingLoans 541.96% 159.69%Nonperforming Loans to Period-End Loans 0.18% 0.62%Nonperforming Assets to Period-End Assets 0.15% 0.50%Year-to-Date Period Ended: 9/30/2025 12/31/2024Allowance for Credit LossesAllowance for Credit Losses, Beginning of Year $ 33,598 $ 31,265Loans Charged-off (8,077) (5,895)Less Recoveries of Loans Previously Charged-off 2,227 3,048Net Loans Charged-off (5,850) (2,847)Provision for Credit Losses 6,428 5,180Allowance for Credit Losses, End of Period $ 34,176 $ 33,598Key Asset Quality RatiosNet Loans Charged-off to Average Loans, Annualized 0.23% 0.09%Provision for Loan Losses to Average Loans, Annualized 0.25% 0.16%
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SOURCE Arrow Financial Corporation
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