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Arrow Reports 1st Quarter Net Income of $7.7 Million, or $0.45 per Share, Declares Dividend of $0.27 per Share

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Arrow Financial reported a net income of $7.7 million and EPS of $0.45 for the first quarter of 2024. They also declared a $0.27 per share dividend, marking their 44th consecutive quarterly dividend. Arrow showed growth in loans, deposits, and net interest margin, with strong liquidity and a focus on the Capital Region of New York. They repurchased shares and announced an acquisition. The company reached a settlement in a class action complaint without a material impact on financial results.

Arrow Financial ha riportato un reddito netto di 7,7 milioni di dollari e un EPS di 0,45 per il primo trimestre del 2024. Hanno inoltre dichiarato un dividendo di 0,27 dollari per azione, segnando il loro 44° dividendo trimestrale consecutivo. Arrow ha mostrato una crescita nei prestiti, nei depositi e nel margine di interesse netto, con una forte liquidità e un focus sulla regione della capitale di New York. Hanno riacquistato azioni e annunciato un'acquisizione. La compagnia ha raggiunto un accordo in una causa collettiva senza un impatto materiale sui risultati finanziari.
Arrow Financial reportó un ingreso neto de 7,7 millones de dólares y un EPS de 0,45 para el primer trimestre de 2024. También declararon un dividendo de 0,27 dólares por acción, marcando su 44º dividendo trimestral consecutivo. Arrow mostró crecimiento en préstamos, depósitos y margen de interés neto, con una sólida liquidez y enfoque en la Región Capital de Nueva York. La empresa recompró acciones y anunció una adquisición. Llegaron a un acuerdo en una demanda colectiva sin un impacto material en los resultados financieros.
Arrow Financial은 2024년 첫 분기에 770만 달러의 순수익과 주당 0.45달러의 EPS를 보고했습니다. 또한 주당 0.27달러의 배당금을 선언하며 44번째 연속 분기 배당을 기록했습니다. Arrow는 대출, 예금 및 순이자 마진에서 성장을 보였으며, 뉴욕 수도권에 중점을 둔 강력한 유동성을 유지했습니다. 그들은 주식을 매입하고 인수를 발표했습니다. 회사는 집단 소송에서 합의에 도달했으며 이는 재무 결과에 실질적인 영향을 미치지 않았습니다.
Arrow Financial a déclaré un revenu net de 7,7 millions de dollars et un BPA de 0,45 pour le premier trimestre de 2024. Ils ont également annoncé un dividende de 0,27 dollar par action, marquant leur 44e dividende trimestriel consécutif. Arrow a montré une croissance dans les prêts, les dépôts et la marge d'intérêt net, avec une forte liquidité et un accent sur la région capitale de New York. Ils ont racheté des actions et annoncé une acquisition. La société a réglé un recours collectif sans impact matériel sur les résultats financiers.
Arrow Financial hat für das erste Quartal 2024 einen Nettogewinn von 7,7 Millionen Dollar und einen EPS von 0,45 ausgewiesen. Sie erklärten auch eine Dividende von 0,27 Dollar pro Aktie, was ihre 44. aufeinanderfolgende Quartalsdividende markiert. Arrow zeigte Wachstum bei Krediten, Einlagen und der Nettomargezinsen, mit starker Liquidität und einem Fokus auf die Hauptstadtregion von New York. Sie kauften Aktien zurück und kündigten eine Übernahme an. Das Unternehmen erzielte eine Einigung in einer Sammelklage, die keinen materiellen Einfluss auf die finanziellen Ergebnisse hatte.
Positive

  • Arrow Financial reported strong loan growth, deposit balance increases, and improved net interest margin in the first quarter of 2024.

  • The company's on-balance sheet liquidity of $450 million and loan-to-deposit ratio of approximately 86% demonstrate financial strength.

  • Arrow repurchased shares worth $6.0 million and announced an acquisition, showing commitment to growth and shareholder value.

Negative

  • Net income and EPS decreased from the previous year, which may raise concerns among investors about future profitability.

  • There was an increase in non-interest expense and a decrease in net interest income from the first quarter of 2023, potentially impacting overall earnings.

  • The reduction in total investments and the decrease in stockholders' equity could be seen as concerning trends for the company.

GLENS FALLS, N.Y., April 30, 2024 /PRNewswire/ -- Arrow Financial Corporation (NasdaqGS® – AROW) ("Arrow" or "the Company") announced financial results for the three-month period ended March 31, 2024. Net income for the first quarter of 2024 was $7.7 million and fully diluted earnings per share ("EPS") was $0.45, versus $8.6 million and EPS of $0.50, for the same period in 2023.

The Board of Directors of Arrow declared a quarterly cash dividend of $0.27 per share payable May 24, 2024 to shareholders of record as of May 13, 2024. This is Arrow's 44th consecutive quarterly cash dividend.

This Earnings Release and related commentary should be read in conjunction with the Company's April 30, 2024 Form 8-K and related First Quarter 2024 Investor Presentation, which can also be found on Arrow's website: arrowfinancial.com/documents/investor-presentations. 

Arrow President and CEO David S. DeMarco: 

"Arrow delivered a solid quarter with healthy loan growth and strong credit performance in a challenging interest rate and overall unsettled economic environment. I am very excited about our growth prospects in the Capital Region of New York, having recently added several experienced loan and deposit team members in the region. This comes on the heels of our recently announced branch acquisition in Whitehall, NY which we hope to finalize in the third quarter pending regulatory approval.  I would also like to note that we returned approximately $6.0 million to our shareholders in the form of share repurchases in addition to our normal quarterly dividend."

First-Quarter Highlights and Key Metrics

  • Gross loans grew $50.5 million1 or 6.1% on an annualized basis.
  • Deposit balances increased to $3.8 billion, growing $91.5 million, or 2.5%
  • Net charge-offs to average loans were 0.04% as compared to 0.05% for the previous quarter
  • Net interest margin improved to 2.60% (2.62% on a FTE2 basis), up from 2.53% (2.55% on a FTE basis) from the prior quarter
  • Loan-to-deposit ratio of approximately 86%
  • Strong on-balance sheet liquidity of $450 million, or 10.4% of total assets
  • Repurchased 244,387 shares for $6.0 million during the first quarter
  • On March 4, Arrow announced the acquisition of a branch in Whitehall, NY with approximately $40 million in deposits;  transaction expected to close in 3Q24, subject to regulatory approval

 




1 Excludes both $1.2 million fair value hedge adjustment at March 31, 2024 and $5.8 million fair value hedge adjustment at December 31, 2023

2 Full tax equivalent

Other Highlights

  • On April 27, Arrow reached an agreement in principle to settle a class action complaint (the "Ashe Lawsuit"), fully described in Arrow's 2023 Form 10-K and 2024 Proxy filing, subject to final documentation and court approval. The terms of the settlement do not have a material impact on the financial results.

Income Statement

  • Net Income: Net income for the first quarter of 2024 was $7.7 million, consistent with $7.7 million in the fourth quarter of 2023, while decreasing from $8.6 million in the first quarter of 2023.
    • As compared to the prior quarter, net income benefited from an increase of $0.8 million in net interest income as well as an increase in non-interest income of $0.4 million, offset by an increase in non-interest expense of $0.8 million.
    • As compared to the first quarter of 2023, net interest income decreased $1.6 million primarily on higher deposit costs. Non-interest income increased $1.2 million and non-interest expense increased $1.7 million.

  • Net Interest Income: Net interest income for the first quarter of 2024 was $26.5 million, increasing 3.3% from $25.6 million for the fourth quarter of 2023 and decreasing 5.8% from $28.1 million in the comparable quarter of 2023.
    • Total interest and dividend income was $46.7 million for the first quarter of 2024, an increase from $44.3 million in the fourth quarter of 2023 and from $36.1 million for the first quarter of 2023. These increases were primarily driven by loan growth and higher loan rates. Interest expense for the first quarter of 2024 was $20.2 million, an increase from $18.7 million for the fourth quarter of 2023 and from $8.0 million for the first quarter of 2023.  The increases for both comparison periods were driven primarily by higher deposit rates and changes in deposit composition.

  • Net Interest Margin: Net interest margin was 2.60% for the first quarter of 2024, compared to 2.53% for the fourth quarter of 2023 and 2.96% for the first quarter of 2023. The increase in net interest margin compared to the fourth quarter in 2023 was primarily the result of the continued expansion on the yield of earning assets combined with the moderating increase in the cost of interest-bearing liabilities.  As compared to the first quarter of 2023, the decline in net interest margin was primarily the result of costs of interest-bearing liabilities increasing at a faster pace than the yield on average earning assets. In addition, deposits have continued to migrate to higher costs products, such as money market savings and time deposits.

 


Three Months Ended


(Dollars in Thousands)


March 31, 2024


December 31,

2023


March 31, 2023

Interest and Dividend Income

$            46,677


$               44,324


$            36,110

Interest Expense

20,222


18,711


8,016

Net Interest Income

26,455


25,613


28,094

Average Earning Assets(A)

4,085,398


4,019,432


3,845,825

Average Interest-Bearing Liabilities

3,108,093


2,985,717


2,782,299







Yield on Earning Assets(A)

4.60 %


4.38 %


3.81 %

Cost of Interest-Bearing Liabilities

2.62


2.49


1.17

Net Interest Spread

1.98


1.89


2.64

Net Interest Margin

2.60


2.53


2.96

Net Interest Margin - FTE

2.62


2.55


2.98







(A) Includes Nonaccrual Loans.












 

  • Provision for Credit Losses: For the first quarter of 2024, the provision for credit losses was $0.6 million compared to $0.5 million in the fourth quarter of 2023 and $1.6 million in the first quarter of 2023. The key drivers for the provision for credit losses in the first quarter of 2024 were an increase in specific reserves and loan growth, partially offset by changes to the economic forecast factors embedded in the credit loss allowance model. The increase in specific reserves of $0.7 million is tied to overdraft balances from an isolated instance of check fraud from one customer relationship.

  • Non-Interest Income: Non-interest income for the three months ended March 31, 2024, was $7.9 million, compared to $7.5 million in the fourth quarter of 2023 and $6.7 million in the first quarter of 2023. The increase was primarily driven by gains on other equity investments as well as income from fiduciary activities, which includes Wealth Management services, which benefited from strong equity markets.

  • Non-Interest Expense: Non-interest expense for the first quarter of 2024 was $24.0 million, an increase from  $23.2 million in the fourth quarter of 2023 and an increase from $22.3 million for the first quarter of 2023. The increase from the prior year was primarily due to increased salaries and benefits related to new employees hired to support growth initiatives, increased legal and professional expenses associated with the finalization of the 2023 audit, and costs incurred to reach a settlement in the Ashe Lawsuit.

  • Provision for Income Taxes: The provision for income taxes was 20.9% or $2.0 million for the first quarter of 2024,  17.7% or $1.7 million for the fourth quarter of 2023 and 21.6% or $2.4 million for the first quarter of 2023. The change in the effective tax rate from the previous quarter was primarily due to a change in pre-tax income combined with decreases in tax advantaged items.

Balance Sheet

  • Total Assets: Total assets were $4.3 billion at March 31, 2024, an increase of $163.8 million, or 3.9%, as compared to December 31, 2023 and an increase of $219.0 million, or 5.3%, as compared to March 31, 2023.  For the first quarter of 2024, overall balance sheet growth was attributable to growth in the loan portfolio and an increase in cash balances. 

  • Investments: Total investments were $620.0 million as of March 31, 2024, a decrease of $16.0 million, or 2.5%, compared to December 31, 2023 and a decrease of $125.1 million, or 16.8%, compared to March 31, 2023. The decrease from December 31, 2023 was driven primarily by paydowns and maturities. The change from March 31, 2023 was also impacted by the fourth quarter 2023 repositioning of the investment portfolio, reducing the portfolio by approximately $25 million at the time of the transaction. There were no credit quality issues related to the investment portfolio.

  • Loans3: Total loans reached $3.3 billion as of March 31, 2024. Loan growth for the first quarter of 2024 was $50.5 million, and $252.2 million compared to March 31, 2023. Loan growth was spread across all loan products.  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 $31.6 million as of March 31, 2024, which represented 0.97% of loans outstanding, as compared to $31.3 million, or 0.97%, at December 31, 2023 and $30.8 million, or 1.02%, at March 31, 2023. Net charge-offs, expressed as an annualized percentage of average loans outstanding, were 0.04% for the three-month period ended March 31, 2024, as compared to 0.05% for the three-month period ended December 31, 2023 and 0.10% for the three-month period ended March 31, 2023. Nonperforming assets were $21.8 million as of March 31, 2024, representing 0.50% of period-end assets, compared to 0.51% at December 31, 2023 and 0.27% at March 31, 2023. The increase from the first quarter of 2023 was primarily due to one large, well collateralized loan relationship of approximately $15 million, which moved into non-performing status during the fourth quarter of 2023.

  • Deposits: At March 31, 2024, deposit balances were $3.8 billion, an increase of $91.5 million from December 31, 2023 and $232.7 million from March 31, 2023. The increase from March 31, 2023 was partially attributable to $175 million of brokered CDs, primarily used to reduce borrowings by $160 million. Arrow simultaneously entered into three-year swaps to strategically manage its asset-liability profile and cost of funds. Please refer to page 6 for further details related to deposits.

  • Capital: Total stockholders' equity was $378.0 million at March 31, 2024, a decrease of $1.8 million, or 0.5%, from December 31, 2023 and an increase of $14.6 million, or 4.0%, from the March 31, 2023 level of $363.4 million. The net decrease in equity in the first quarter of 2024 was attributable to dividends paid ($4.6 million) and share repurchases ($6.0 million) exceeding the net income for the quarter.   Arrow's regulatory capital ratios remained strong. As of March 31, 2024, Arrow's Common Equity Tier 1 Capital Ratio was 12.84% and Total Risk-Based Capital Ratio was 14.57%. The capital ratios of Arrow's subsidiary banks, Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company, continued to exceed the "well capitalized" regulatory standards.

Additional Commentary

  • Bauer Financial Ratings: Both Glens Falls National Bank and Saratoga National Bank continued to maintain their 5-Star Exceptional Performance ratings from Bauer Financial, for the 67th and 59th quarters, respectively.

 




3 Excludes both $1.2 million fair value hedge adjustment at March 31, 2024 and $5.8 million fair value hedge adjustment at December 31, 2023

About Arrow 

Arrow Financial Corporation is a multi-bank holding company headquartered in Glens Falls, New York, serving the financial needs of northeastern New York. Arrow is the parent of Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company. Other subsidiaries include Upstate Agency, LLC and 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). Some 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. These non-GAAP financial measures include: tangible equity, return on tangible equity, tax-equivalent adjustment and related net interest income, tax-equivalent, the efficiency ratio and net interest margin. Management believes that the non-GAAP financial measures disclosed by Arrow 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 in this document may contain statements based on management's beliefs, assumptions, expectations, estimates and projections about the future. Such "forward-looking statements," as defined in Section 21E of the Securities Exchange Act of 1934, as amended, involve a degree of uncertainty and attendant risk. Actual outcomes and results may differ, explicitly or by implication. We are not obligated to revise or update these statements to reflect unanticipated events. This document should be read in conjunction with Arrow's 2023 Form 10-K 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,
2024


December 31,
2023


March 31,
2023

INTEREST AND DIVIDEND INCOME







Interest and Fees on Loans


$            40,376


$            38,813


$            31,886

Interest on Deposits at Banks


2,447


1,873


479

Interest and Dividends on Investment Securities:







Fully Taxable


3,186


2,941


2,948

Exempt from Federal Taxes


668


697


797

Total Interest and Dividend Income


46,677


44,324


36,110

INTEREST EXPENSE







Interest-Bearing Checking Accounts


1,641


1,317


370

Savings Deposits


10,230


10,513


5,587

Time Deposits over $250,000


1,973


1,807


574

Other Time Deposits


5,083


3,406


474

Borrowings


1,076


1,447


793

Junior Subordinated Obligations Issued to

  Unconsolidated Subsidiary Trusts


171


173


169

Interest on Financing Leases


48


48


49

Total Interest Expense


20,222


18,711


8,016

NET INTEREST INCOME


26,455


25,613


28,094

Provision for Credit Losses


617


525


1,554

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES


25,838


25,088


26,540

NON-INTEREST INCOME







Income From Fiduciary Activities


2,457


2,363


2,275

Fees for Other Services to Customers


2,543


2,725


2,595

Insurance Commissions


1,682


1,723


1,520

Net Gain (Loss) on Securities


17


122


(104)

Net Gain on Sales of Loans


4


7


4

Other Operating Income


1,155


544


387

Total Non-Interest Income


7,858


7,484


6,677

NON-INTEREST EXPENSE







Salaries and Employee Benefits


12,893


11,693


11,947

Occupancy Expenses, Net


1,771


1,826


1,628

Technology and Equipment Expense


4,820


4,458


4,417

FDIC Assessments


715


572


479

Other Operating Expense


3,813


4,641


3,825

Total Non-Interest Expense


24,012


23,190


22,296

INCOME BEFORE PROVISION FOR INCOME TAXES


9,684


9,382


10,921

Provision for Income Taxes


2,024


1,659


2,359

NET INCOME


$              7,660


$              7,723


$              8,562

Average Shares Outstanding 1:







Basic


16,865


17,002


17,048

Diluted


16,867


17,004


17,060

Per Common Share:







Basic Earnings


$                0.45


$                0.46


$                0.50

Diluted Earnings


0.45


0.46


0.50


1  March 31, 2023 Share and Per Share Amounts have been restated for the September 26, 2023, 3% stock dividend.

 

ARROW FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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



March 31,
2024


December 31,
2023


March 31,
2023

ASSETS






Cash and Due From Banks

$                27,356


$                36,755


$                25,107

Interest-Bearing Deposits at Banks

255,109


105,781


178,365

Investment Securities:






Available-for-Sale at Fair Value

485,833


497,769


565,693

Held-to-Maturity (Fair Value of $124,861 at March 31, 2024; $128,837 at December 31, 2023; and $164,439 at March 31, 2023)

128,051


131,395


167,347

Equity Securities

1,942


1,925


2,070

Other Investments

4,208


5,049


10,027

Loans

3,258,758


3,212,908


3,005,352

Allowance for Credit Losses

(31,561)


(31,265)


(30,784)

Net Loans

3,227,197


3,181,643


2,974,568

Premises and Equipment, Net

59,494


59,642


58,233

Goodwill

21,873


21,873


21,873

Other Intangible Assets, Net

1,018


1,110


1,400

Other Assets

121,542


126,926


109,947

Total Assets

$          4,333,623


$          4,169,868


$          4,114,630

LIABILITIES






Noninterest-Bearing Deposits

696,519


758,425


788,690

Interest-Bearing Checking Accounts

908,453


799,785


958,490

Savings Deposits

1,497,466


1,466,280


1,497,326

Time Deposits over $250,000

173,976


179,301


122,827

Other Time Deposits

502,607


483,775


179,016

Total Deposits

3,779,021


3,687,566


3,546,349

Borrowings

106,500


26,500


142,800

Junior Subordinated Obligations Issued to Unconsolidated

  Subsidiary Trusts

20,000


20,000


20,000

Finance Leases

5,053


5,066


5,106

Other Liabilities

45,063


50,964


37,004

Total Liabilities

3,955,637


3,790,096


3,751,259

STOCKHOLDERS' EQUITY






Preferred Stock, $1 Par Value and 1,000,000 Shares Authorized at March 31, 2024, December 31, 2023 and March 31, 2023

—


—


—

Common Stock, $1 Par Value; 30,000,000 Shares Authorized  (22,066,559 Shares Issued at March 31, 2024 and 21,423,992 Shares Issued at December 31, 2023 and   March 31, 2023)

22,067


22,067


21,424

Additional Paid-in Capital

412,823


412,551


400,944

Retained Earnings

68,887


65,792


69,499

Accumulated Other Comprehensive Loss

(32,714)


(33,416)


(43,983)

Treasury Stock, at Cost (5,356,335 Shares at March 31, 2024; 5,124,073 Shares at December 31, 2023 and 4,870,935 Shares at March 31, 2023)

(93,077)


(87,222)


(84,513)

Total Stockholders' Equity

377,986


379,772


363,371

Total Liabilities and Stockholders' Equity

$          4,333,623


$          4,169,868


$          4,114,630

 

Arrow Financial Corporation 

Selected Quarterly Information 

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


Quarter Ended

3/31/2024


12/31/2023


9/30/2023


6/30/2023


3/31/2023

Net Income

$         7,660


$        7,723


$         7,743


$         6,047


$        8,562

Transactions in Net Income (Net of Tax):










Net Changes in Fair Value of Equity Investments

13


90


52


(133)


(76)











Share and Per Share Data:1










Period End Shares Outstanding

16,710


16,942


17,049


17,050


17,050

Basic Average Shares Outstanding

16,865


17,002


17,050


17,050


17,048

Diluted Average Shares Outstanding

16,867


17,004


17,050


17,050


17,060

Basic Earnings Per Share

$           0.45


$           0.46


$           0.46


$           0.35


$           0.50

Diluted Earnings Per Share

0.45


0.46


0.46


0.35


0.50

Cash Dividend Per Share

0.270


0.270


0.262


0.262


0.262











Selected Quarterly Average Balances:










  Interest-Bearing Deposits at Banks

$     178,452


$    136,026


$     131,814


$    130,057


$      40,436

  Investment Securities

671,105


713,144


745,693


787,175


813,461

  Loans

3,235,841


3,170,262


3,096,240


3,036,410


2,991,928

  Deposits

3,693,325


3,593,949


3,491,028


3,460,711


3,480,279

  Other Borrowed Funds

122,033


149,507


208,527


220,616


100,596

  Stockholders' Equity

379,446


363,753


362,701


365,070


359,556

  Total Assets

4,245,484


4,159,313


4,109,995


4,087,653


3,978,851

Return on Average Assets, annualized

0.73 %


0.74 %


0.75 %


0.59 %


0.87 %

Return on Average Equity, annualized

8.12 %


8.42 %


8.47 %


6.64 %


9.66 %

Return on Average Tangible Equity, annualized 2

8.64 %


8.99 %


9.05 %


7.10 %


10.33 %

Average Earning Assets

$ 4,085,398


$ 4,019,432


$ 3,973,747


$ 3,953,642


$ 3,845,825

Average Paying Liabilities

3,108,093


2,985,717


2,920,518


2,924,743


2,782,299

Interest Income

46,677


44,324


42,117


40,013


36,110

Tax-Equivalent Adjustment 3

176


184


183


196


202

Interest Income, Tax-Equivalent 3

46,853


44,508


42,117


40,013


36,110

Interest Expense

20,222


18,711


16,764


14,241


8,016

Net Interest Income

26,455


25,613


25,353


25,772


28,094

Net Interest Income, Tax-Equivalent 3

26,631


25,797


25,536


25,968


28,296

Net Interest Margin, annualized

2.60 %


2.53 %


2.53 %


2.61 %


2.96 %

Net Interest Margin, Tax-Equivalent, annualized 3

2.62 %


2.55 %


2.55 %


2.63 %


2.98 %











Efficiency Ratio Calculation: 4










Non-Interest Expense

$       24,012


$      23,190


$       23,479


$      24,083


$      22,296

Less: Intangible Asset Amortization

41


43


43


44


45

Net Non-Interest Expense

$       23,971


$      23,147


$       23,436


$      24,039


$      22,251

Net Interest Income, Tax-Equivalent

$       26,631


$      25,797


$       25,536


$      25,968


$      28,296

Non-Interest Income

7,858


7,484


8,050


6,906


6,677

Less: Net Gain (Loss) on Securities

17


122


71


(181)


(104)

Net Gross Income

$       34,472


$      33,159


$       33,515


$      33,055


$      35,077

Efficiency Ratio

69.54 %


69.81 %


69.93 %


72.72 %


63.43 %











Period-End Capital Information:










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

$     377,986


$    379,772


$     360,014


$    361,443


$    363,371

Book Value per Share 1

22.62


22.42


21.12


21.20


21.31

Goodwill and Other Intangible Assets, net

22,891


22,983


23,078


23,175


23,273

Tangible Book Value per Share 1,2

21.25


21.06


19.76


19.84


19.95











Capital Ratios:5










Tier 1 Leverage Ratio

9.63 %


9.84 %


9.94 %


9.92 %


10.13 %

Common Equity Tier 1 Capital Ratio 

12.84 %


13.00 %


13.17 %


13.27 %


13.34 %

Tier 1 Risk-Based Capital Ratio

13.50 %


13.66 %


13.84 %


13.96 %


14.03 %

Total Risk-Based Capital Ratio

14.57 %


14.74 %


14.94 %


15.08 %


15.15 %











Assets Under Trust Admin. & Investment Mgmt.

$ 1,829,266


$ 1,763,194


$ 1,627,522


$ 1,711,460


$ 1,672,117

 

Arrow Financial Corporation 

Selected Quarterly Information - Continued 

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


Footnotes:




















1.

Share and per share data have been restated for the September 26, 2023, 3% stock dividend.



2.

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.



3/31/2024


12/31/2023


9/30/2023


6/30/2023


3/31/2023


Total Stockholders' Equity (GAAP)

$   377,986


$   379,772


$   360,014


$   361,443


$   363,371


Less:  Goodwill and Other Intangible assets, net

22,891


22,983


23,078


23,175


23,273


Tangible Equity (Non-GAAP)

$   355,095


$   356,789


$   336,936


$   338,268


$   340,098













Period End Shares Outstanding

16,710


16,942


17,049


17,050


17,050


Tangible Book Value per Share (Non-GAAP)

$        21.25


$        21.06


$        19.76


$        19.84


$        19.95


Net Income

7,660


7,723


7,743


6,047


8,562


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

8.64 %


8.99 %


9.05 %


7.10 %


10.33 %












3.

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.



3/31/2024


12/31/2023


9/30/2023


6/30/2023


3/31/2023


Interest Income (GAAP)

$     46,677


$     44,324


$     42,117


$     40,013


$     36,110


Add:  Tax-Equivalent adjustment

     (Non-GAAP)

176


184


183


196


202


Interest Income - Tax Equivalent

     (Non-GAAP)

$     46,853


$     44,508


$     42,300


$     40,209


$     36,312


Net Interest Income (GAAP)

$     26,455


$     25,613


$     25,353


$     25,772


$     28,094


Add:  Tax-Equivalent adjustment

     (Non-GAAP)

176


184


183


196


202


Net Interest Income - Tax Equivalent

     (Non-GAAP)

$     26,631


$     25,797


$     25,536


$     25,968


$     28,296


Average Earning Assets

$  4,085,398


$  4,019,432


$  3,973,747


$  3,953,642


$  3,845,825


Net Interest Margin (Non-GAAP)*

2.62 %


2.55 %


2.55 %


2.63 %


2.98 %












4.

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).












5.

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, 2024 CET1 ratio listed in the tables (i.e., 12.84%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%).



3/31/2024


12/31/2023


9/30/2023


6/30/2023


3/31/2023


Total Risk Weighted Assets

$  3,049,525


$  3,032,188


$  2,988,438


$  2,937,837


$  2,909,610


Common Equity Tier 1 Capital

391,706


394,166


393,541


389,966


388,228


Common Equity Tier 1 Ratio

12.84 %


13.00 %


13.17 %


13.27 %


13.34 %













* 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, 2024


March 31, 2023




Interest


Rate




Interest


Rate


Average


Income/


Earned/


Average


Income/


Earned/


Balance


Expense


Paid


Balance


Expense


Paid

Interest-Bearing Deposits at Banks

$   178,452


$       2,447


5.52 %


$     40,436


$           479


4.80 %

Investment Securities:












Fully Taxable

550,538


3,186


2.33


652,743


2,948


1.83

Exempt from Federal Taxes

120,567


668


2.23


160,718


797


2.01

Loans

3,235,841


40,376


5.02


2,991,928


31,886


4.32

Total Earning Assets

4,085,398


46,677


4.60


3,845,825


36,110


3.81

Allowance for Credit Losses

(31,416)






(29,792)





Cash and Due From Banks

29,804






30,518





Other Assets

161,698






132,300





Total Assets

$  4,245,484






$  3,978,851





Deposits:












Interest-Bearing Checking Accounts

$   830,918


1,641


0.79


$  964,735


370


0.16

Savings Deposits

1,481,001


10,230


2.78


1,474,251


5,587


1.54

Time Deposits of $250,000 or More

177,328


1,973


4.47


94,415


574


2.47

Other Time Deposits

496,813


5,083


4.11


148,302


474


1.30

Total Interest-Bearing Deposits

2,986,060


18,927


2.55


2,681,703


7,005


1.06

Borrowings

96,984


1,076


4.46


40,138


490


4.95

Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts

20,000


171


3.44


55,356


472


3.46

Finance Leases

5,049


48


3.82


5,102


49


3.89

Total Interest-Bearing Liabilities

3,108,093


20,222


2.62


2,782,299


8,016


1.17

Noninterest-Bearing Deposits

707,265






798,576





Other Liabilities

50,680






38,420





Total Liabilities

3,866,038






3,619,295





Stockholders' Equity

379,446






359,556





Total Liabilities and Stockholders' Equity

$  4,245,484






$  3,978,851





Net Interest Income



$     26,455






$     28,094



Net Interest Spread





1.98 %






2.64 %

Net Interest Margin





2.60 %






2.96 %

 

Arrow Financial Corporation

Average Consolidated Balance Sheets and Net Interest Income Analysis

(Dollars in Thousands - Unaudited)


Quarter Ended:

March 31, 2024


December 31, 2023




Interest


Rate




Interest


Rate


Average


Income/


Earned/


Average


Income/


Earned/


Balance


Expense


Paid


Balance


Expense


Paid

Interest-Bearing Deposits at Banks

$   178,452


$       2,447


5.52 %


$  136,026


$       1,873


5.46 %

Investment Securities:












Fully Taxable

550,538


3,186


2.33


586,227


2,941


1.99

Exempt from Federal Taxes

120,567


668


2.23


126,917


697


2.18

Loans

3,235,841


40,376


5.02


3,170,262


38,813


4.86

Total Earning Assets

4,085,398


46,677


4.60


4,019,432


44,324


4.38

Allowance for Credit Losses

(31,416)






(31,417)





Cash and Due From Banks

29,804






30,402





Other Assets

161,698






140,896





Total Assets

$  4,245,484






$  4,159,313





Deposits:












Interest-Bearing Checking Accounts

$   830,918


1,641


0.79


$  801,923


1,317


0.65

Savings Deposits

1,481,001


10,230


2.78


1,509,946


10,513


2.76

Time Deposits of $250,000 or More

177,328


1,973


4.47


169,854


1,807


4.22

Other Time Deposits

496,813


5,083


4.11


354,487


3,406


3.81

Total Interest-Bearing Deposits

2,986,060


18,927


2.55


2,836,210


17,043


2.38

Borrowings

96,984


1,076


4.46


124,445


1,447


4.61

Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts

20,000


171


3.44


20,000


173


3.43

Finance Leases

5,049


48


3.82


5,062


48


3.76

Total Interest-Bearing Liabilities

3,108,093


20,222


2.62


2,985,717


18,711


2.49

Noninterest-bearing deposits

707,265






757,739





Other Liabilities

50,680






52,104





Total Liabilities

3,866,038






3,795,560





Stockholders' Equity

379,446






363,753





Total Liabilities and Stockholders' Equity

$  4,245,484






$  4,159,313





Net Interest Income



$     26,455






$     25,613



Net Interest Spread





1.98 %






1.89 %

Net Interest Margin





2.60 %






2.53 %

 

Arrow Financial Corporation 

Consolidated Financial Information 

(Dollars in Thousands - Unaudited) 


Quarter Ended:

3/31/2024


12/31/2023


3/31/2023

Loan Portfolio






Commercial Loans

$       162,389


$       156,224


$       135,917

Commercial Real Estate Loans

750,969


745,487


715,357

  Subtotal Commercial Loan Portfolio

913,358


901,711


851,274

Consumer Loans

1,125,754


1,111,667


1,073,369

Residential Real Estate Loans

1,219,646


1,199,530


1,080,709

Total Loans

$   3,258,758


$   3,212,908


$   3,005,352

Allowance for Credit Losses






Allowance for Credit Losses, Beginning of Quarter

$         31,265


$         31,112


$         29,952

Loans Charged-off

(1,283)


(1,366)


(1,328)

Less Recoveries of Loans Previously Charged-off

962


994


606

Net Loans Charged-off

(321)


(372)


(722)

Provision for Credit Losses

617


525


1,554

Allowance for Credit Losses, End of Quarter

$         31,561


$         31,265


$         30,784

Nonperforming Assets






Nonaccrual Loans

$         20,244


$         20,645


$         10,852

Loans Past Due 90 or More Days and Accruing

1,147


452


241

Loans Restructured and in Compliance with Modified Terms

49


54


62

Total Nonperforming Loans

21,440


21,151


11,155

Repossessed Assets

312


312


144

Other Real Estate Owned

—


—


—

Total Nonperforming Assets

$         21,752


$         21,463


$         11,299







Key Asset Quality Ratios






Net Loans Charged-off to Average Loans,

   Quarter-to-date Annualized

0.04 %


0.05 %


0.10 %

Provision for Credit Losses to Average Loans,

  Quarter-to-date Annualized

0.08 %


0.07 %


0.21 %

Allowance for Credit Losses to Period-End Loans

0.97 %


0.97 %


1.02 %

Allowance for Credit Losses to Period-End Nonperforming Loans

147.21 %


147.82 %


275.97 %

Nonperforming Loans to Period-End Loans

0.66 %


0.66 %


0.37 %

Nonperforming Assets to Period-End Assets

0.50 %


0.51 %


0.27 %

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/arrow-reports-1st-quarter-net-income-of-7-7-million-or-0-45-per-share-declares-dividend-of-0-27-per-share-302131151.html

SOURCE Arrow Financial Corporation

FAQ

What was Arrow Financial 's net income for the first quarter of 2024?

Arrow Financial reported a net income of $7.7 million for the first quarter of 2024.

What dividend did Arrow Financial declare for the first quarter of 2024?

Arrow Financial declared a quarterly cash dividend of $0.27 per share for the first quarter of 2024.

What was Arrow Financial 's loan growth in the first quarter of 2024?

Arrow Financial experienced loan growth of $50.5 million, or 6.1% on an annualized basis, in the first quarter of 2024.

What was Arrow Financial 's loan-to-deposit ratio?

Arrow Financial had a loan-to-deposit ratio of approximately 86% in the first quarter of 2024.

What was the total assets of Arrow Financial at the end of March 31, 2024?

Arrow Financial had total assets of $4.3 billion at the end of March 31, 2024.

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Arrow Financial Corp

NASDAQ:AROW

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#870 Ranked by Dividends

AROW Latest News

Nov 26, 2024
Arrow's Banks Join Allpoint ATM Network, Expanding Access to More Than 50,000 ATMs Worldwide
Oct 31, 2024
Arrow Reports 3rd Quarter Net Income of $9.0 Million, or $0.53 per Share
Oct 10, 2024
Arrow Named to Piper Sandler Sm-All Stars: Class of 2024
Oct 3, 2024
Arrow Declares October 2024 Cash Dividend
Aug 6, 2024
Arrow Completes Acquisition of Whitehall, N.Y. Branch

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