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Arrow Reports 2nd Quarter Net Income of $8.6 Million, or $0.52 per Share, Declares Dividend of $0.27 per Share

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Arrow Financial (NasdaqGS: AROW) reported Q2 2024 net income of $8.6 million, with an EPS of $0.52, up from $6.0 million and $0.35 EPS in Q2 2023. The Board declared a quarterly dividend of $0.27 per share, payable on August 23, 2024, to shareholders of record on August 12, 2024.

Key highlights: Gross loans grew by $57.6 million, net interest margin improved to 2.67%, and the average loan yield increased to 5.17%. Deposits were $3.7 billion, while tangible book value rose to $21.54. ROA improved to 0.82%.

Recent developments include regulatory approval to combine its banking subsidiaries into Arrow Bank and an acquisition of a branch in Whitehall, NY. The company also expanded its insurance business by acquiring assets from A&B Agency, Inc.

Arrow Financial (NasdaqGS: AROW) ha riportato un utile netto nel Q2 2024 di 8,6 milioni di dollari, con un EPS di 0,52 dollari, in crescita rispetto ai 6,0 milioni di dollari e all'EPS di 0,35 nel Q2 2023. Il Consiglio ha dichiarato un dividendo trimestrale di 0,27 dollari per azione, pagabile il 23 agosto 2024, agli azionisti registrati il 12 agosto 2024.

Punti salienti: i prestiti lordi sono aumentati di 57,6 milioni di dollari, il margine interesse netto è migliorato al 2,67% e il rendimento medio dei prestiti è salito al 5,17%. I depositi ammontavano a 3,7 miliardi di dollari, mentre il valore contabile tangibile è aumentato a 21,54 dollari. Il ROA è migliorato allo 0,82%.

Sviluppi recenti includono l'approvazione normativa per unire le sue filiali bancarie in Arrow Bank e l'acquisizione di una filiale a Whitehall, NY. L'azienda ha anche ampliato la sua attività assicurativa acquisendo beni da A&B Agency, Inc.

Arrow Financial (NasdaqGS: AROW) reportó un ingreso neto en el Q2 2024 de 8.6 millones de dólares, con un EPS de 0.52 dólares, un aumento respecto a los 6.0 millones de dólares y un EPS de 0.35 en el Q2 2023. La Junta declaró un dividendo trimestral de 0.27 dólares por acción, pagadero el 23 de agosto de 2024, a los accionistas registrados el 12 de agosto de 2024.

Aspectos destacados: los préstamos brutos crecieron en 57.6 millones de dólares, el margen de interés neto mejoró al 2.67%, y el rendimiento promedio de los préstamos aumentó al 5.17%. Los depósitos ascendieron a 3.7 mil millones de dólares, mientras que el valor contable tangible se elevó a 21.54 dólares. El ROA mejoró al 0.82%.

Desarrollos recientes incluyen la autorización regulatoria para combinar sus subsidiarias bancarias en Arrow Bank y la adquisición de una sucursal en Whitehall, NY. La empresa también amplió su negocio de seguros al adquirir activos de A&B Agency, Inc.

Arrow Financial (NasdaqGS: AROW)는 2024년 2분기 순이익을 860만 달러로 보고했으며, 주당 순이익(EPS)은 0.52달러로, 2023년 2분기의 600만 달러와 0.35달러 EPS에서 증가했습니다. 이사회는 분기 배당금으로 주당 0.27달러를 선언했으며, 2024년 8월 23일에 지급되고, 2024년 8월 12일 기준 주주에게 지급됩니다.

주요 하이라이트: 총 대출이 5760만 달러 증가하였고, 순이자 마진이 2.67%로 개선되었으며, 평균 대출 수익률이 5.17%로 증가했습니다. 예금은 37억 달러였고, 유형 자산의 장부 가치는 21.54달러로 상승했습니다. ROA는 0.82%로 개선되었습니다.

최근 개발 사항으로는 Arrow Bank로의 은행 자회사의 통합에 대한 규제 승인이 포함되며, NY의 Whitehall에 위치한 지점 인수도 포함됩니다. 회사는 또한 A&B Agency, Inc.로부터 자산을 인수하여 보험 사업을 확장하였습니다.

Arrow Financial (NasdaqGS: AROW) a rapporté un revenu net pour le 2e trimestre 2024 de 8,6 millions de dollars, avec un BPA de 0,52 dollars, en hausse par rapport à 6,0 millions de dollars et 0,35 dollars de BPA au 2e trimestre 2023. Le Conseil a déclaré un dividende trimestriel de 0,27 dollars par action, payable le 23 août 2024, aux actionnaires inscrits le 12 août 2024.

Faits saillants : les prêts bruts ont augmenté de 57,6 millions de dollars, la marge d'intérêt nette s'est améliorée à 2,67 % et le rendement moyen des prêts a augmenté à 5,17 %. Les dépôts s'élevaient à 3,7 milliards de dollars, tandis que la valeur comptable tangible a augmenté à 21,54 dollars. Le ROA a été amélioré à 0,82 %.

Les développements récents incluent l'approbation réglementaire pour combiner ses filiales bancaires en Arrow Bank et l'acquisition d'une succursale à Whitehall, NY. L'entreprise a également élargi son activité d'assurance en acquérant des actifs de A&B Agency, Inc.

Arrow Financial (NasdaqGS: AROW) berichtete für das 2. Quartal 2024 einen Nettogewinn von 8,6 Millionen US-Dollar, mit einem EPS von 0,52 US-Dollar, was einen Anstieg gegenüber 6,0 Millionen US-Dollar und 0,35 US-Dollar EPS im 2. Quartal 2023 darstellt. Der Vorstand erklärte eine vierteljährliche Dividende von 0,27 US-Dollar pro Aktie, zahlbar am 23. August 2024 an die Aktionäre, die am 12. August 2024 im Verzeichnis stehen.

Wichtige Höhepunkte: Bruttokredite wuchsen um 57,6 Millionen US-Dollar, die netto Zinsmarge verbesserte sich auf 2,67%, und die durchschnittliche Kreditausbeute stieg auf 5,17%. Die Einlagen betrugen 3,7 Milliarden US-Dollar, während der tangibler Buchwert auf 21,54 US-Dollar anstieg. Die ROA verbesserte sich auf 0,82%.

Zu den jüngsten Entwicklungen gehört die Genehmigung der Regulierung zur Fusion der Bankenkonsolidate in Arrow Bank sowie der Erwerb einer Filiale in Whitehall, NY. Das Unternehmen erweiterte auch sein Versicherungsgeschäft durch den Erwerb von Vermögenswerten von A&B Agency, Inc.

Positive
  • Net income increased to $8.6 million from $6.0 million in Q2 2023.
  • EPS rose to $0.52, up from $0.35 in Q2 2023.
  • Quarterly dividend of $0.27 per share declared.
  • Gross loans grew by $57.6 million.
  • Net interest margin improved to 2.67%.
  • Average loan yield increased to 5.17%.
  • ROA improved to 0.82%.
  • Tangible book value increased to $21.54.
Negative
  • Interest expense rose to $20.8 million from $14.2 million in Q2 2023.
  • Net charge-offs increased to 0.16% from 0.07% in Q2 2023.
  • Total assets decreased by $89.2 million compared to March 31, 2024.
  • Total investments decreased by $137.6 million compared to Q2 2023.
  • Deposit balances decreased by $95.4 million from Q1 2024.

GLENS FALLS, N.Y., July 25, 2024 /PRNewswire/ -- Arrow Financial Corporation (NasdaqGS® – AROW) ("Arrow" or "the Company") announced financial results for the three-month period ended June 30, 2024. Net income for the second quarter of 2024 was $8.6 million and fully diluted earnings per share ("EPS") was $0.52, versus $6.0 million and EPS of $0.35, for the same period in 2023.

The Board of Directors of Arrow declared a quarterly cash dividend of $0.27 per share payable August 23, 2024 to shareholders of record as of August 12, 2024. This is Arrow's 45th consecutive quarterly cash dividend.

This Earnings Release and related commentary should be read in conjunction with the Company's July 25, 2024 Form 8-K and related Second 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: 

"We are pleased to report another quarter of solid performance, demonstrating the hard work and dedication of our team. We recently expanded our insurance business with the strategic acquisition of the assets of A&B Agency, Inc. We are also looking forward to the close of our branch acquisition in Whitehall, New York scheduled for early August.

In addition, on July 22nd, we received regulatory approval to combine our banking subsidiaries, Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company, into a single entity renamed Arrow Bank National Association, or Arrow Bank. This positions us to enhance our strategic growth while ensuring stability with the same dedicated leadership team, staff and branch locations. We are confident these initiatives will further strengthen our market position and drive long-term value for our shareholders."

Second-Quarter Highlights and Key Metrics

  • Gross loans grew $57.6 million1, or 7.1% on an annualized basis.
  • Net interest margin improved to 2.67% (2.69% FTE2), up from 2.60% (2.62% FTE) in the prior quarter
  • Average loan yields increased to 5.17% for 2Q24, up from 5.02% in the prior quarter
  • Deposit balances were $3.7 billion
  • Tangible Book Value increased to $21.54
  • Return on Average Assets (ROA) improved to 0.82%, up from 0.73% in the previous quarter
  • Received regulatory approval to acquire a branch in Whitehall, New York with approximately $35 million in deposits; transaction expected to close in August 2024

____________________________________

1 Excludes both $0.4 million fair value hedge adjustment at June 30, 2024 and $1.2 million fair value hedge adjustment at March 31, 2024

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

Income Statement

  • Net Income: Net income for the second quarter of 2024 was $8.6 million, increasing from $7.7 million in the first quarter of 2024 and $6.0 million in the second quarter of 2023.
    • As compared to the prior quarter, net income benefited from an increase of $0.7 million in net interest income as well as a decrease in non-interest expense of $0.7 million.
    • As compared to the second quarter of 2023, net interest income increased $1.4 million. Non-interest income increased $1.0 million and non-interest expense decreased $0.8 million.
  • Net Interest Income: Net interest income for the second quarter of 2024 was $27.2 million, increasing 2.6% from $26.5 million for the first quarter of 2024 and increasing 5.4% from $25.8 million in the second quarter of 2023.
    • Total interest and dividend income was $48.0 million for the second quarter of 2024, an increase from $46.7 million in the first quarter of 2024 and from $40.0 million for the second quarter of 2023. These increases were primarily driven by loan growth and higher loan rates. Interest expense for the second quarter of 2024 was $20.8 million, an increase from $20.2 million for the first quarter of 2024 and from $14.2 million for the second 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, on an FTE basis, for the second quarter of 2024 was 2.69% compared to 2.62% for the first quarter of 2024 and 2.63% for the second quarter of 2023. The increase in net interest margin compared to the first quarter in 2024 was primarily the result of continued yield expansion on earning assets combined with moderating increase in the cost of interest-bearing liabilities. As compared to the second quarter of 2023, the increase in net interest margin was primarily the result of yield on average earning assets increasing at a faster pace than costs of interest-bearing liabilities. Net interest margin is affected by deposits continuing to migrate to higher costs products, such as money market savings and time deposits.

Three Months Ended


(Dollars in Thousands)


June 30, 2024


March 31, 2024


June 30, 2023

Interest and Dividend Income

$            47,972


$               46,677


$            40,013

Interest Expense

20,820


20,222


14,241

Net Interest Income

27,152


26,455


25,772

Average Earning Assets(A)

4,083,813


4,085,398


3,953,642

Average Interest-Bearing Liabilities

3,127,417


3,108,093


2,924,743







Yield on Earning Assets(A)

4.72 %


4.60 %


4.06 %

Cost of Interest-Bearing Liabilities

2.68


2.62


1.95

Net Interest Spread

2.04


1.98


2.11

Net Interest Margin

2.67


2.60


2.61

Net Interest Margin - FTE

2.69


2.62


2.63







(A) Includes Nonaccrual Loans.






  • Provision for Credit Losses: For the second quarter of 2024, the provision for credit losses was $0.8 million compared to $0.6 million in the first quarter of 2024 and $0.9 million in the second quarter of 2023. The key drivers for the provision for credit losses in the second quarter of 2024 were loan growth and replenishment of the allowance for charge-offs, partially offset by changes to the economic forecast factors embedded in the credit loss allowance model.
  • Non-Interest Income: Non-interest income for the three months ended June 30, 2024, was $7.9 million consistent with the first quarter of 2024 and an increase from $6.9 million in the second quarter of 2023 due to the other investment income and a small gain on a sale leaseback transaction.
  • Non-Interest Expense: Non-interest expense for the second quarter of 2024 was $23.3 million, a decrease from $24.0 million in the first quarter of 2024 and from $24.1 million for the second quarter of 2023. The decrease from the prior quarter and year was primarily due to elimination of elevated legal and professional expenses related to the delayed filings in 2023.
  • Provision for Income Taxes: The provision for income taxes was 21.2%, or $2.3 million, for the second quarter of 2024, 20.9%, or $2.0 million, for the first quarter of 2024 and 20.9%, or $1.6 million, for the second quarter of 2023.

Balance Sheet

  • Total Assets: Total assets were $4.2 billion at June 30, 2024, a decrease of $89.2 million, or 2.1%, as compared to March 31, 2024 and an increase of $140.8 million, or 3.4%, as compared to June 30, 2023. For the second quarter of 2024, overall change in balance sheet was attributable to seasonal changes of cash balances offset by growth in the loan portfolio.
  • Investments: Total investments were $556.4 million as of June 30, 2024, a decrease of $63.6 million, or 10.3%, compared to March 31, 2024 and a decrease of $137.6 million, or 19.8%, compared to June 30, 2023. The decrease from March 31, 2024 was driven primarily by paydowns and maturities. The change from June 30, 2023 was also driven by paydowns and maturities as well as 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 June 30, 2024. Loan growth for the second quarter of 2024 was $57.6 million, and $245.3 million since June 30, 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 $31.0 million as of June 30, 2024, which represented 0.94% of loans outstanding, as compared to $31.6 million, or 0.97%, at March 31, 2024 and $31.2 million, or 1.02%, at June 30, 2023. Net charge-offs, expressed as an annualized percentage of average loans outstanding, were 0.16% for the three-month period ended June 30, 20244, as compared to 0.04% for the three-month period ended March 31, 2024 and 0.07% for the three-month period ended June 30, 2023. Nonperforming assets were $21.3 million as of June 30, 2024, representing 0.50% of period-end assets, compared to 0.50% at March 31, 2024 and 0.17% at June 30, 2023. The increase from the second 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 June 30, 2024, deposit balances were $3.7 billion, a decrease of $95.4 million from March 31, 2024 and an increase of $181.4 million from June 30, 2023. The decrease from the first quarter was primarily attributable to the seasonality of municipal deposits, expected to normalize in the third quarter. The increase from June 30, 2023 was partially attributable to $175 million of brokered CDs, primarily used to reduce borrowings by $160 million. Arrow simultaneously entered into three-year interest rate swaps to strategically manage its asset-liability profile and cost of funds. Please refer to page 7 for further details related to deposits.
  • Capital: Total stockholders' equity was $383.0 million at June 30, 2024, an increase of $5.0 million, or 1.3%, from March 31, 2024 and an increase of $21.6 million, or 6.0%, from the June 30, 2023 level of $361.4 million. The increase in capital from June 30, 2023, was primarily attributable to net income of $32 million, other comprehensive income of $16 million offset by dividends and stock repurchases of $27 million. Arrow's regulatory capital ratios remained strong. As of June 30, 2024, Arrow's Common Equity Tier 1 Capital Ratio was 12.88% 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 68th and 60th quarters, respectively.
  • Subsidiary Bank Unification: On July 22 2024, Arrow received approval from the Office of the Comptroller of the Currency to combine its two subsidiary banks, Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company, into one bank that will be known as Arrow Bank National Association. The combination will create operational efficiencies, unify branding and enhance Arrow's ability to pursue its strategic growth objectives. The combination of the entities is anticipated to become effective December 31, 2024.

___________________________________________
3 Excludes both $0.4 million fair value hedge adjustment at June 30, 2024 and $1.2 million fair value hedge adjustment at March 31, 2024

4 Charge-offs for 2Q24 included 0.09% related to a previously specifically reserved amount for overdraft balances relating to one customer relationship

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 (FTE). 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 June 30


Six Months Ended June 30



2024


2023


2024


2023

INTEREST AND DIVIDEND INCOME









Interest and Fees on Loans


$            42,141


$            34,618


$       82,517


$       66,504

Interest on Deposits at Banks


2,185


1,674


4,632


2,153

Interest and Dividends on Investment Securities:









Fully Taxable


3,009


2,951


6,195


5,899

Exempt from Federal Taxes


637


770


1,305


1,567

Total Interest and Dividend Income


47,972


40,013


94,649


76,123

INTEREST EXPENSE









Interest-Bearing Checking Accounts


1,903


820


3,544


1,190

Savings Deposits


10,571


8,514


20,801


14,101

Time Deposits over $250,000


1,869


1,119


3,842


1,693

Other Time Deposits


5,074


1,196


10,157


1,670

Borrowings


1,186


2,373


2,262


3,166

Junior Subordinated Obligations Issued to

  Unconsolidated Subsidiary Trusts


170


171


341


340

Interest on Financing Leases


47


48


95


97

Total Interest Expense


20,820


14,241


41,042


22,257

NET INTEREST INCOME


27,152


25,772


53,607


53,866

Provision for Credit Losses


775


948


1,392


2,502

NET INTEREST INCOME AFTER PROVISION
FOR CREDIT LOSSES


26,377


24,824


52,215


51,364

NON-INTEREST INCOME









Income From Fiduciary Activities


2,451


2,428


4,908


4,703

Fees for Other Services to Customers


2,706


2,717


5,249


5,312

Insurance Commissions


1,662


1,560


3,344


3,080

Net Gain (Loss) on Securities


54


(181)


71


(285)

Net Gain on Sales of Loans


5


—


9


4

Other Operating Income


978


382


2,133


769

Total Non-Interest Income


7,856


6,906


15,714


13,583

NON-INTEREST EXPENSE









Salaries and Employee Benefits


13,036


12,039


25,929


23,986

Occupancy Expenses, Net


1,774


1,583


3,545


3,211

Technology and Equipment Expense


4,734


4,362


9,554


8,779

FDIC Assessments


698


484


1,413


963

Other Operating Expense


3,076


5,615


6,889


9,440

Total Non-Interest Expense


23,318


24,083


47,330


46,379

INCOME BEFORE PROVISION FOR INCOME TAXES


10,915


7,647


20,599


18,568

Provision for Income Taxes


2,311


1,600


4,335


3,959

NET INCOME


$              8,604


$              6,047


$       16,264


$       14,609

Average Shares Outstanding 1:









Basic


16,685


17,050


16,764


17,050

Diluted


16,709


17,050


16,789


17,050

Per Common Share:









Basic Earnings


$                0.52


$                0.35


$           0.97


$           0.85

Diluted Earnings


0.52


0.35


0.97


0.85

1 June 30, 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)



June 30,
2024


December 31,
2023


June 30,
2023

ASSETS






Cash and Due From Banks

$                30,372


$                36,755


$                33,803

Interest-Bearing Deposits at Banks

169,826


105,781


139,798

Investment Securities:






Available-for-Sale at Fair Value

450,786


497,769


543,708

Held-to-Maturity (Fair Value of $96,454 at June 30, 2024;
$128,837 at December 31, 2023; and $139,143 at June 30,
2023)

99,348


131,395


143,460

Equity Securities

1,996


1,925


1,889

Other Investments

4,274


5,049


4,932

Loans

3,315,523


3,212,908


3,069,897

Allowance for Credit Losses

(31,009)


(31,265)


(31,170)

Net Loans

3,284,514


3,181,643


3,038,727

Premises and Equipment, Net

59,243


59,642


59,773

Goodwill

21,873


21,873


21,873

Other Intangible Assets, Net

927


1,110


1,302

Other Assets

121,248


126,926


114,388

Total Assets

$          4,244,407


$          4,169,868


$          4,103,653

LIABILITIES






Noninterest-Bearing Deposits

704,707


758,425


759,495

Interest-Bearing Checking Accounts

856,788


799,785


856,016

Savings Deposits

1,446,821


1,466,280


1,517,937

Time Deposits over $250,000

173,526


179,301


140,694

Other Time Deposits

501,797


483,775


228,082

Total Deposits

3,683,639


3,687,566


3,502,224

Borrowings

106,500


26,500


171,800

Junior Subordinated Obligations Issued to Unconsolidated

  Subsidiary Trusts

20,000


20,000


20,000

Finance Leases

5,038


5,066


5,093

Other Liabilities

46,212


50,964


43,093

Total Liabilities

3,861,389


3,790,096


3,742,210

STOCKHOLDERS' EQUITY






Preferred Stock, $1 Par Value and 1,000,000 Shares
Authorized at June 30, 2024, December 31, 2023 and
June 30, 2023

—


—


—

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

22,067


22,067


21,424

Additional Paid-in Capital

412,917


412,551


401,069

Retained Earnings

72,980


65,792


71,076

Accumulated Other Comprehensive Loss

(31,632)


(33,416)


(47,613)

Treasury Stock, at Cost (5,343,295 Shares at June 30, 2024;
5,124,073 Shares at December 31, 2023 and 4,870,934
Shares at June 30, 2023)

(93,314)


(87,222)


(84,513)

Total Stockholders' Equity

383,018


379,772


361,443

Total Liabilities and Stockholders' Equity

$          4,244,407


$          4,169,868


$          4,103,653

 

Arrow Financial Corporation

Selected Quarterly Information

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


Quarter Ended

6/30/2024


3/31/2024


12/31/2023


9/30/2023


6/30/2023

Net Income

$         8,604


$        7,660


$         7,723


$         7,743


$        6,047











Net Changes in Fair Value of Equity Investments
(Net of Tax)

39


13


90


52


(133)











Share and Per Share Data:1










Period End Shares Outstanding

16,723


16,710


16,942


17,049


17,050

Basic Average Shares Outstanding

16,685


16,865


17,002


17,050


17,050

Diluted Average Shares Outstanding

16,709


16,867


17,004


17,050


17,050

Basic Earnings Per Share

$           0.52


$           0.45


$           0.46


$           0.46


$           0.35

Diluted Earnings Per Share

0.52


0.45


0.46


0.46


0.35

Cash Dividend Per Share

0.270


0.270


0.270


0.262


0.262











Selected Quarterly Average Balances:










  Interest-Bearing Deposits at Banks

$     159,336


$    178,452


$     136,026


$    131,814


$    130,057

  Investment Securities

644,192


671,105


713,144


745,693


787,175

  Loans

3,280,285


3,235,841


3,170,262


3,096,240


3,036,410

  Deposits

3,678,957


3,693,325


3,593,949


3,491,028


3,460,711

  Other Borrowed Funds

131,537


122,033


149,507


208,527


220,616

  Stockholders' Equity

378,256


379,446


363,753


362,701


365,070

  Total Assets

4,237,359


4,245,484


4,159,313


4,109,995


4,087,653

Return on Average Assets, annualized

0.82 %


0.73 %


0.74 %


0.75 %


0.59 %

Return on Average Equity, annualized

9.15 %


8.12 %


8.42 %


8.47 %


6.64 %

Return on Average Tangible Equity, annualized 2

9.74 %


8.64 %


8.99 %


9.05 %


7.10 %

Average Earning Assets

$ 4,083,813


$ 4,085,398


$ 4,019,432


$ 3,973,747


$ 3,953,642

Average Paying Liabilities

3,127,417


3,108,093


2,985,717


2,920,518


2,924,743

Interest Income

47,972


46,677


44,324


42,117


40,013

Tax-Equivalent Adjustment 3

163


176


184


183


196

Interest Income, Tax-Equivalent 3

48,135


46,853


44,508


42,117


40,013

Interest Expense

20,820


20,222


18,711


16,764


14,241

Net Interest Income

27,152


26,455


25,613


25,353


25,772

Net Interest Income, Tax-Equivalent 3

27,315


26,631


25,797


25,536


25,968

Net Interest Margin, annualized

2.67 %


2.60 %


2.53 %


2.53 %


2.61 %

Net Interest Margin, Tax-Equivalent, annualized 3

2.69 %


2.62 %


2.55 %


2.55 %


2.63 %











Efficiency Ratio Calculation: 4










Non-Interest Expense

$       23,318


$      24,012


$       23,190


$      23,479


$      24,083

Less: Intangible Asset Amortization

40


41


43


43


44

Net Non-Interest Expense

$       23,278


$      23,971


$       23,147


$      23,436


$      24,039

Net Interest Income, Tax-Equivalent

$       27,315


$      26,631


$       25,797


$      25,536


$      25,968

Non-Interest Income

7,856


7,858


7,484


8,050


6,906

Less: Net Gain (Loss) on Securities

54


17


122


71


(181)

Net Gross Income

$       35,117


$      34,472


$       33,159


$      33,515


$      33,055

Efficiency Ratio

66.29 %


69.54 %


69.81 %


69.93 %


72.72 %











Period-End Capital Information:










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

$     383,018


$    377,986


$     379,772


$    360,014


$    361,443

Book Value per Share 1

22.90


22.62


22.42


21.12


21.20

Goodwill and Other Intangible Assets, net

22,800


22,891


22,983


23,078


23,175

Tangible Book Value per Share 1,2

21.54


21.25


21.06


19.76


19.84











Capital Ratios:5










Tier 1 Leverage Ratio

9.74 %


9.63 %


9.84 %


9.94 %


9.92 %

Common Equity Tier 1 Capital Ratio 

12.88 %


12.84 %


13.00 %


13.17 %


13.27 %

Tier 1 Risk-Based Capital Ratio

13.53 %


13.50 %


13.66 %


13.84 %


13.96 %

Total Risk-Based Capital Ratio

14.57 %


14.57 %


14.74 %


14.94 %


15.08 %











Assets Under Trust Admin. & Investment Mgmt.

$ 1,848,349


$ 1,829,266


$ 1,763,194


$ 1,627,522


$ 1,711,460

 

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.



6/30/2024


3/31/2024


12/31/2023


9/30/2023


6/30/2023


Total Stockholders' Equity (GAAP)

$   383,018


$   377,986


$   379,772


$   360,014


$   361,443


Less:  Goodwill and Other Intangible
assets, net

22,800


22,891


22,983


23,078


23,175


Tangible Equity (Non-GAAP)

$   360,218


$   355,095


$   356,789


$   336,936


$   338,268













Period End Shares Outstanding

16,723


16,710


16,942


17,049


17,050


Tangible Book Value per Share (Non-
GAAP)

$        21.54


$        21.25


$        21.06


$        19.76


$        19.84


Net Income

8,604


7,660


7,723


7,743


6,047


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

9.74 %


8.64 %


8.99 %


9.05 %


7.10 %












3.

Non-GAAP Financial Measure Reconciliation: Net Interest Margin is the ratio of annualized tax-equivalent netinterest 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.



6/30/2024


3/31/2024


12/31/2023


9/30/2023


6/30/2023


Interest Income (GAAP)

$     47,972


$     46,677


$     44,324


$     42,117


$     40,013


Add:  Tax-Equivalent adjustment

     (Non-GAAP)

163


176


184


183


196


Interest Income - Tax Equivalent

     (Non-GAAP)

$     48,135


$     46,853


$     44,508


$     42,300


$     40,209


Net Interest Income (GAAP)

$     27,152


$     26,455


$     25,613


$     25,353


$     25,772


Add:  Tax-Equivalent adjustment

     (Non-GAAP)

163


176


184


183


196


Net Interest Income - Tax Equivalent

     (Non-GAAP)

$     27,315


$     26,631


$     25,797


$     25,536


$     25,968


Average Earning Assets

$  4,083,813


$  4,085,398


$  4,019,432


$  3,973,747


$  3,953,642


Net Interest Margin (Non-GAAP)*

2.69 %


2.62 %


2.55 %


2.55 %


2.63 %












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 June 30, 2024 CET1 ratio listed in the tables (i.e., 12.88%) exceeds the sum of the required minimum
CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%).



6/30/2024


3/31/2024


12/31/2023


9/30/2023


6/30/2023


Total Risk Weighted Assets

$  3,072,922


$  3,049,525


$  3,032,188


$  2,988,438


$  2,937,837


Common Equity Tier 1 Capital

395,691


391,706


394,166


393,541


389,966


Common Equity Tier 1 Ratio

12.88 %


12.84 %


13.00 %


13.17 %


13.27 %












* Quarterly ratios have been annualized.










 

Arrow Financial Corporation

Average Consolidated Balance Sheets and Net Interest Income Analysis

(Dollars in Thousands - Unaudited)


Quarter Ended:

June 30, 2024


June 30, 2023




Interest


Rate




Interest


Rate


Average


Income/


Earned/


Average


Income/


Earned/


Balance


Expense


Paid


Balance


Expense


Paid

Interest-Bearing Deposits at Banks

$   159,336


$       2,185


5.52 %


$  130,057


$       1,674


5.16 %

Investment Securities:












Fully Taxable

530,869


3,009


2.28


637,018


2,951


1.86

Exempt from Federal Taxes

113,323


637


2.26


150,157


770


2.06

Loans

3,280,285


42,141


5.17


3,036,410


34,618


4.57

Total Earning Assets

4,083,813


47,972


4.72


3,953,642


40,013


4.06

Allowance for Credit Losses

(31,459)






(30,577)





Cash and Due From Banks

28,611






28,742





Other Assets

156,394






135,846





Total Assets

$  4,237,359






$  4,087,653





Deposits:












Interest-Bearing Checking Accounts

$   832,087


1,903


0.92


$  863,892


820


0.38

Savings Deposits

1,487,062


10,571


2.86


1,504,412


8,514


2.27

Time Deposits of $250,000 or More

172,655


1,869


4.35


133,897


1,119


3.35

Other Time Deposits

504,076


5,074


4.05


201,926


1,196


2.38

Total Interest-Bearing Deposits

2,995,880


19,417


2.61


2,704,127


11,649


1.73

Borrowings

106,502


1,186


4.48


195,527


2,373


4.87

Junior Subordinated Obligations Issued to
Unconsolidated Subsidiary Trusts

20,000


170


3.42


20,000


171


3.43

Finance Leases

5,035


47


3.75


5,089


48


3.78

Total Interest-Bearing Liabilities

3,127,417


20,820


2.68


2,924,743


14,241


1.95

Noninterest-Bearing Deposits

683,077






756,584





Other Liabilities

48,609






41,256





Total Liabilities

3,859,103






3,722,583





Stockholders' Equity

378,256






365,070





Total Liabilities and Stockholders' Equity

$  4,237,359






$  4,087,653





Net Interest Income



$     27,152






$     25,772



Net Interest Spread





2.04 %






2.11 %

Net Interest Margin





2.67 %






2.61 %

 

Arrow Financial Corporation

Average Consolidated Balance Sheets and Net Interest Income Analysis

(Dollars in Thousands - Unaudited)


Quarter Ended:

June 30, 2024


March 31, 2024




Interest


Rate




Interest


Rate


Average


Income/


Earned/


Average


Income/


Earned/


Balance


Expense


Paid


Balance


Expense


Paid

Interest-Bearing Deposits at Banks

$     159,336


$       2,185


5.52 %


$  178,452


$       2,447


5.52 %

Investment Securities:












Fully Taxable

530,869


3,009


2.28


550,538


3,186


2.33

Exempt from Federal Taxes

113,323


637


2.26


120,567


668


2.23

Loans

3,280,285


42,141


5.17


3,235,841


40,376


5.02

Total Earning Assets

4,083,813


47,972


4.72


4,085,398


46,677


4.60

Allowance for Credit Losses

(31,459)






(31,416)





Cash and Due From Banks

28,611






29,804





Other Assets

156,394






161,698





Total Assets

$  4,237,359






$  4,245,484





Deposits:












Interest-Bearing Checking Accounts

$     832,087


1,903


0.92


$  830,918


1,641


0.79

Savings Deposits

1,487,062


10,571


2.86


1,481,001


10,230


2.78

Time Deposits of $250,000 or More

172,655


1,869


4.35


177,328


1,973


4.47

Other Time Deposits

504,076


5,074


4.05


496,813


5,083


4.11

Total Interest-Bearing Deposits

2,995,880


19,417


2.61


2,986,060


18,927


2.55

Borrowings

106,502


1,186


4.48


96,984


1,076


4.46

Junior Subordinated Obligations Issued to
Unconsolidated Subsidiary Trusts

20,000


170


3.42


20,000


171


3.44

Finance Leases

5,035


47


3.75


5,049


48


3.82

Total Interest-Bearing Liabilities

3,127,417


20,820


2.68


3,108,093


20,222


2.62

Noninterest-bearing deposits

683,077






707,265





Other Liabilities

48,609






50,680





Total Liabilities

3,859,103






3,866,038





Stockholders' Equity

378,256






379,446





Total Liabilities and Stockholders' Equity

$  4,237,359






$  4,245,484





Net Interest Income



$     27,152






$     26,455



Net Interest Spread





2.04 %






1.98 %

Net Interest Margin





2.67 %






2.60 %

 

Arrow Financial Corporation

Consolidated Financial Information

(Dollars in Thousands - Unaudited)


Quarter Ended:

6/30/2024


12/31/2023


6/30/2023

Loan Portfolio






Commercial Loans

$       163,832


$       156,224


$       147,518

Commercial Real Estate Loans

757,478


745,487


723,948

  Subtotal Commercial Loan Portfolio

921,310


901,711


871,466

Consumer Loans

1,138,813


1,111,667


1,087,765

Residential Real Estate Loans

1,255,400


1,199,530


1,110,666

Total Loans

$    3,315,523


$    3,212,908


$    3,069,897

Allowance for Credit Losses






Allowance for Credit Losses, Beginning of Quarter

$         31,561


$         31,112


$         30,784

Loans Charged-off

(1,850)


(1,366)


(1,280)

Less Recoveries of Loans Previously Charged-off

523


994


718

Net Loans Charged-off

(1,327)


(372)


(562)

Provision for Credit Losses

775


525


948

Allowance for Credit Losses, End of Quarter

$         31,009


$         31,265


$         31,170

Nonperforming Assets






Nonaccrual Loans

$         20,118


$         20,645


$           5,997

Loans Past Due 90 or More Days and Accruing

915


452


467

Loans Restructured and in Compliance with Modified Terms

36


54


67

Total Nonperforming Loans

21,069


21,151


6,531

Repossessed Assets

239


312


342

Other Real Estate Owned

34


—


182

Total Nonperforming Assets

$         21,342


$         21,463


$           7,055







Key Asset Quality Ratios






Net Loans Charged-off to Average Loans,

   Quarter-to-date Annualized

0.16 %


0.05 %


0.07 %

Provision for Credit Losses to Average Loans,

  Quarter-to-date Annualized

0.10 %


0.07 %


0.13 %

Allowance for Credit Losses to Period-End Loans

0.94 %


0.97 %


1.02 %

Allowance for Credit Losses to Period-End Nonperforming Loans

147.18 %


147.82 %


477.26 %

Nonperforming Loans to Period-End Loans

0.64 %


0.66 %


0.21 %

Nonperforming Assets to Period-End Assets

0.50 %


0.51 %


0.17 %







Year-to-Date Period Ended:

6/30/2024


12/31/2023


6/30/2023

Allowance for Credit Losses






Allowance for Credit Losses, Beginning of Year

$         31,265


$         29,952


$         29,952

Loans Charged-off

(3,133)


(5,177)


(2,608)

Less Recoveries of Loans Previously Charged-off

1,485


3,109


1,324

Net Loans Charged-off

(1,648)


(2,068)


(1,284)

Provision for Credit Losses

1,392


3,381


2,502

Allowance for Credit Losses, End of Period

$         31,009


$         31,265


$         31,170







Key Asset Quality Ratios






Net Loans Charged-off to Average Loans, Annualized

0.10 %


0.07 %


0.09 %

Provision for Loan Losses to Average Loans, Annualized

0.09 %


0.11 %


0.17 %

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/arrow-reports-2nd-quarter-net-income-of-8-6-million-or-0-52-per-share-declares-dividend-of-0-27-per-share-302206063.html

SOURCE Arrow Financial Corporation

FAQ

What was Arrow Financial's net income for Q2 2024?

Arrow Financial's net income for Q2 2024 was $8.6 million.

What is the dividend declared by Arrow Financial for Q2 2024?

Arrow Financial declared a quarterly dividend of $0.27 per share.

When is the dividend payment date for Arrow Financial's Q2 2024 dividend?

The dividend payment date is August 23, 2024.

What is the EPS of Arrow Financial for Q2 2024?

The EPS for Q2 2024 is $0.52.

What is the net interest margin reported by Arrow Financial for Q2 2024?

The net interest margin for Q2 2024 is 2.67%.

How much did gross loans grow for Arrow Financial in Q2 2024?

Gross loans grew by $57.6 million in Q2 2024.

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Arrow Financial Corp

NASDAQ:AROW

AROW Rankings

#3048 Ranked by Market Cap
#894 Ranked by Dividends

AROW Latest News

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
Jul 23, 2024
Arrow to Unify Bank Subsidiaries into One Entity Renamed Arrow Bank

AROW Stock Data

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2.81%
50.65%
0.84%
Banks - Regional
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