Arrow Reports 3rd Quarter Net Income of $9.0 Million, or $0.53 per Share
Arrow Financial reported net income of $9.0 million and EPS of $0.53 for Q3 2024, up from $7.7 million and $0.46 in Q3 2023. Key highlights include improved net interest margin to 2.78%, total deposits of $3.8 billion, and year-to-date loan growth of $126.3 million (5.2% annualized). The company completed two acquisitions: A&B Agency assets and a Whitehall branch. Arrow plans to unify its banking subsidiaries into Arrow Bank National Association by December 31, 2024. The company was named to Piper Sandler's Sm-All Stars: Class of 2024, among 30 top-performing small-cap banks.
Arrow Financial ha riportato un utile netto di 9,0 milioni di dollari e un utile per azione (EPS) di 0,53 dollari per il Q3 2024, in aumento rispetto ai 7,7 milioni di dollari e 0,46 dollari nel Q3 2023. I punti salienti includono un margine di interesse netto migliorato al 2,78%, depositi totali di 3,8 miliardi di dollari e una crescita dei prestiti anno su anno di 126,3 milioni di dollari (5,2% annualizzato). L'azienda ha completato due acquisizioni: beni dell'A&B Agency e una filiale di Whitehall. Arrow prevede di unificare le sue sussidiarie bancarie sotto Arrow Bank National Association entro il 31 dicembre 2024. L'azienda è stata nominata tra gli Sm-All Stars di Piper Sandler: Classe del 2024, tra le 30 banche a piccola capitalizzazione con le migliori performance.
Arrow Financial reportó un ingreso neto de 9,0 millones de dólares y un BPA de 0,53 dólares para el Q3 2024, en comparación con 7,7 millones de dólares y 0,46 dólares en el Q3 2023. Los aspectos destacados incluyen un margen de interés neto mejorado del 2,78%, depósitos totales de 3,8 mil millones de dólares y un crecimiento de préstamos hasta la fecha de 126,3 millones de dólares (5,2% anualizado). La compañía completó dos adquisiciones: los activos de A&B Agency y una sucursal de Whitehall. Arrow planea unificar sus subsidiarias bancarias en Arrow Bank National Association antes del 31 de diciembre de 2024. La empresa fue nombrada en el Sm-All Stars de Piper Sandler: Clase de 2024, entre los 30 bancos de pequeña capitalización con mejor desempeño.
애로 파이낸셜(Arrow Financial)은 2024년 3분기 순이익 900만 달러와 주당 순이익(EPS) 0.53달러를 보고했으며, 이는 2023년 3분기의 770만 달러 및 0.46달러에서 증가한 수치입니다. 주요 하이라이트로는 순이자마진이 2.78%로 개선되었고, 총 예금은 38억 달러, 연초부터 지금까지 대출 성장률은 1억 2,630만 달러(연환산 5.2%)에 달합니다. 이 회사는 A&B 에이전시 자산과 화이트홀 지점을 포함한 두 건의 인수를 완료했습니다. 애로는 2024년 12월 31일까지 자회사를 애로 은행 국가 협회(Arrow Bank National Association)로 통합할 계획입니다. 이 회사는 2024년 클래스에 대해 파이퍼 샌들러의 Sm-All Stars에 선정되었으며, 이는 30개의 최고의 소형 자본 은행 중 하나입니다.
Arrow Financial a rapporté un revenu net de 9,0 millions de dollars et un BPA de 0,53 dollar pour le troisième trimestre 2024, en hausse par rapport à 7,7 millions de dollars et 0,46 dollar au troisième trimestre 2023. Les points clés incluent une marge d'intérêt nette améliorée à 2,78%, des dépôts totaux de 3,8 milliards de dollars, et une croissance des prêts depuis le début de l'année de 126,3 millions de dollars (5,2% annualisé). L'entreprise a achevé deux acquisitions : les actifs de l'agence A&B et une succursale de Whitehall. Arrow prévoit de regrouper ses filiales bancaires sous Arrow Bank National Association d'ici le 31 décembre 2024. L'entreprise a été nommée dans les Sm-All Stars de Piper Sandler : Classe de 2024, parmi les 30 banques à petite capitalisation les plus performantes.
Arrow Financial berichtete für das dritte Quartal 2024 einen Nettogewinn von 9,0 Millionen Dollar und einen Gewinn pro Aktie (EPS) von 0,53 Dollar, im Vergleich zu 7,7 Millionen Dollar und 0,46 Dollar im dritten Quartal 2023. Zu den wichtigsten Punkten gehören ein verbesserter Nettozinsspread von 2,78%, Gesamteinlagen von 3,8 Milliarden Dollar und ein Kreditwachstum von 126,3 Millionen Dollar seit Jahresbeginn (annualisiert 5,2%). Das Unternehmen hat zwei Akquisitionen abgeschlossen: die Vermögenswerte der A&B Agency und eine Filiale in Whitehall. Arrow plant, seine Banktochtergesellschaften bis zum 31. Dezember 2024 in die Arrow Bank National Association zu integrieren. Das Unternehmen wurde in die Sm-All Stars: Klasse 2024 von Piper Sandler aufgenommen, unter den 30 leistungsstärksten Small-Cap-Banken.
- Net income increased to $9.0M in Q3 2024 from $7.7M in Q3 2023
- Net interest margin improved to 2.78% from 2.67% in previous quarter
- Year-to-date loan growth reached $126.3M (5.2% annualized)
- Total deposits increased by $171.0M from Q3 2023
- Tangible Book Value increased to $21.95
- Non-interest expense increased to $24.1M from $23.5M in Q3 2023
- Nonperforming assets increased to 0.51% of assets vs 0.16% in Q3 2023
- $450K in non-core expenses related to acquisitions and unification efforts
Insights
Arrow Financial's Q3 2024 results demonstrate solid financial performance with
- Net interest margin expansion to
2.79% (FTE), showing improved profitability - Strong loan growth of
5.2% annualized year-to-date - Stable asset quality with low net charge-offs of
0.08% - Healthy capital position with Common Equity Tier 1 ratio at
12.77%
The planned unification of subsidiary banks and recent acquisitions position Arrow for improved operational efficiency. The
The strategic moves to enhance operational infrastructure are noteworthy. The acquisition of A&B Agency and the Whitehall branch, combined with the upcoming bank subsidiary unification, should create meaningful synergies. The addition of surcharge-free access to 55,000+ Allpoint ATMs significantly expands customer convenience. The
This Earnings Release and related commentary should be read in conjunction with the Company's October 31, 2024 Form 8-K and related Third 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 delivered a solid third quarter with strong net interest margin expansion, improved core profitability, increased return on average assets and continued strong credit metrics. Stabilizing funding costs, increasing asset yields, and continued expense discipline have positioned us for increased core operating leverage for the upcoming quarters. Our incredible teamwork was recently recognized by being named to the prestigious Piper Sandler Sm-All Stars: Class of 2024, a list of 30 top-performing small-cap banks and thrifts in the country.
Among our third-quarter accomplishments, we completed two small acquisitions. We expanded our insurance business with the strategic acquisition of the assets of A&B Agency, Inc. and acquired a branch in
Third-Quarter Highlights and Key Metrics
- EPS improved
to$0.07 versus the same period in 2023 and$0.53 over the previous quarter$0.01 - Results included approximately
of non-core expenses related to our insurance agency and branch acquisitions as well as unification efforts$450 thousand - Deposit balances were
, resulting in a Loan-to-Deposit ratio of$3.8 billion 87.0% - Net Interest Margin improved to
2.78% (2.79% FTE1), up from2.67% (2.69% FTE) in the prior quarter - Year-to-date loan growth reached
2 ($126.3 million 5.2% annualized) - Resumed mortgage loan sales into the secondary market
- Average Loan Yields increased to
5.27% for 3Q24, up from5.17% in the prior quarter - Net Charge-Offs for the quarter were 8bps on an annualized basis
- Tangible Book Value increased to
$21.95 - Accumulated Other Comprehensive Loss improved
, or$5.7 million 18% , from the prior quarter - Return on Average Assets (ROA) improved to
0.84% , up from0.82% in the previous quarter
__________________________________ |
1 FTE Net interest margin is a non-GAAP measure. See reconciliation on Note 3 to the Selected Quarterly Information. |
2 Excludes both |
Income Statement
- Net Income: Net income for the third quarter of 2024 was
, increasing from$9.0 million in the second quarter of 2024 and$8.6 million in the third quarter of 2023.$7.7 million - Compared to the prior quarter, net income benefited from an increase of
in net interest income, partially offset by an increase in non-interest expense of$1.3 million .$0.8 million - Compared to the third quarter of 2023, net income growth was driven by an increase in net interest income of
, partially offset by an increase in non-interest expense of$3.1 million .$0.6 million
- Compared to the prior quarter, net income benefited from an increase of
- Net Interest Income: Net interest income for the third quarter of 2024 was
, increasing$28.4 million 4.7% from for the second quarter of 2024 and increasing$27.2 million 12.2% from in the third quarter of 2023.$25.4 million - Total interest and dividend income was
for the third quarter of 2024, an increase from$49.4 million in the second quarter of 2024 and from$48.0 million for the third quarter of 2023. These increases were primarily driven by loan growth and higher loan yields. Interest expense for the third quarter of 2024 was$42.1 million , an increase from$21.0 million for the second quarter of 2024 and from$20.8 million for the third quarter of 2023. The increase from the prior year was driven primarily by higher deposit rates and changes in deposit composition.$16.8 million
- Total interest and dividend income was
- Net Interest Margin: Net interest margin, on an FTE basis, for the third quarter of 2024 was
2.79% compared to2.69% for the second quarter of 2024 and2.55% for the third quarter of 2023. The increase in net interest margin compared to the second quarter in 2024 was primarily the result of continued yield expansion on earning assets combined with the moderating cost of interest-bearing liabilities. As compared to the third 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 costing products, such as money market savings and time deposits.
Three Months Ended | |||||
(Dollars in Thousands) | |||||
September 30, 2024 | June 30, 2024 | September 30, 2023 | |||
Interest and Dividend Income | $ 49,443 | $ 47,972 | $ 42,117 | ||
Interest Expense | 21,005 | 20,820 | 16,764 | ||
Net Interest Income | 28,438 | 27,152 | 25,353 | ||
Average Earning Assets(A) | 4,075,162 | 4,083,813 | 3,973,747 | ||
Average Interest-Bearing Liabilities | 3,085,066 | 3,127,417 | 2,920,518 | ||
Yield on Earning Assets(A) | 4.83 % | 4.72 % | 4.20 % | ||
Cost of Interest-Bearing Liabilities | 2.71 | 2.68 | 2.28 | ||
Net Interest Spread | 2.12 | 2.04 | 1.92 | ||
Net Interest Margin | 2.78 | 2.67 | 2.53 | ||
Net Interest Margin - FTE | 2.79 | 2.69 | 2.55 | ||
(A) Includes Nonaccrual Loans. | |||||
- Provision for Credit Losses: For the third quarter of 2024, the provision for credit losses was
compared to$0.9 million in the second quarter of 2024 and$0.8 million in the third quarter of 2023. The key drivers for the provision for credit losses in the third quarter of 2024 were replenishment of the allowance for charge-offs, growth in loan balances and changes to the economic forecast factors embedded in the credit loss allowance model.$0.4 million - Non-Interest Income: Non-interest income for the three months ended September 30, 2024, was
, an increase from$8.1 million in the second quarter of 2024 and consistent with the third quarter of 2023. The increases from the prior periods are primarily the result of the resumption of loan sales from current loan originations, higher wealth management fees resulting from improved market valuations of assets under management and increased insurance commissions resulting from the A&B asset acquisition. The third quarter of 2023 included one-time proceeds from bank-owned life insurance in other income.$7.9 million - Non-Interest Expense: Non-interest expense for the third quarter of 2024 was
, an increase from$24.1 million in the second quarter of 2024 and an increase from$23.3 million for the third quarter of 2023. The increase from the prior quarter was primarily attributable to several one-time non-core expenses related to the$23.5 million Whitehall and A&B asset acquisitions. - Provision for Income Taxes: The provision for income taxes and effective tax rate were
and$2.6 million 22.2% , for the third quarter of 2024, and$2.3 million 21.2% , for the second quarter of 2024 and and$1.8 million 19.1% , for the third quarter of 2023. The increase in the effective tax rate from the second quarter of 2024 was primarily attributable to a decrease in the amount of tax advantaged earning assets as a percentage of total earning assets, while the increase in the effective tax rate from the third quarter of 2023 was primarily due to a change in pre-tax income combined with a decrease in the amount of tax advantaged earning assets as a percentage of total earning assets.
Balance Sheet
- Total Assets: Total assets were
at September 30, 2024, an increase of$4.4 billion , or$167.0 million 3.9% , as compared to June 30, 2024 and an increase of , or$138.5 million 3.2% , as compared to September 30, 2023. For the third quarter of 2024, overall growth in the balance sheet was attributable to changes in cash balances, primarily seasonal municipal and corporate deposits, as well as growth in the loan portfolio. - Investments: Total investments were
as of September 30, 2024, a decrease of$549.8 million , or$6.6 million 1.2% , compared to June 30, 2024 and a decrease of , or$117.0 million 17.6% , compared to September 30, 2023. The decrease from June 30, 2024 was driven primarily by paydowns and maturities. The decrease from September 30, 2023 was also driven by paydowns and maturities as well as the fourth quarter 2023 repositioning of the investment portfolio, which reduced the portfolio by approximately at the time of the transaction. There were no credit quality issues related to the investment portfolio.$25 million - Loans3: Total loans were
as of September 30, 2024. Loan growth for the third quarter of 2024 was$3.3 billion , and$24.2 million since September 30, 2023. Loan growth was spread across all loan products. Please see the loan detail included in the Consolidated Financial Information table on page 13.$201.2 million - Allowance for Credit Losses: The allowance for credit losses was
as of September 30, 2024, which represented$31.3 million 0.94% of loans outstanding, as compared to , or$31.0 million 0.94% , at June 30, 2024, and , or$31.1 million 0.99% , at September 30, 2023. Net charge-offs, expressed as an annualized percentage of average loans outstanding, were0.08% for the three-month period ended September 30, 2024, as compared to0.16% 4 for the three-month period ended June 30, 2024 and0.05% for the three-month period ended September 30, 2023. Nonperforming assets were as of September 30, 2024, representing$22.3 million 0.51% of period-end assets, compared to0.50% at June 30, 2024 and0.16% at September 30, 2023. - Deposits: At September 30, 2024, deposit balances were
, an increase of$3.8 billion from June 30, 2024 and an increase of$153.8 million from September 30, 2023. The increase from the second quarter was primarily attributable to the seasonality of municipal deposits. The increase from September 30, 2023 was partially attributable to$171.0 million of brokered CDs, primarily used to reduce borrowings and fund continued loan growth. Please refer to page 7 for further details related to deposits.$175 million - Capital: Total stockholders' equity was
at September 30, 2024, an increase of$393.3 million , or$10.3 million 2.7% , from June 30, 2024 and an increase of , or$33.3 million 9.2% , from the September 30, 2023 level of . The increase from the second quarter was primarily attributable to net income of$360.0 million , other comprehensive income of$9.0 million offset by dividends of$5.7 million . The increase in stockholders' equity from September 30, 2023 was primarily attributable to income for the period of$4.5 million , other comprehensive income of$32.9 million and various capital items of$26.6 million offset by dividends of$1.1 million and stock repurchases of$18.1 million . Arrow's regulatory capital ratios remained strong. As of September 30, 2024, Arrow's Common Equity Tier 1 Capital Ratio was$9.2 million 12.77% and Total Risk-Based Capital Ratio was14.46% . 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.
______________________________________ |
3 Includes both |
4 Charge-offs for 2Q24 included |
Additional Commentary
- Piper Sandler Sm-All Stars: Arrow was recently named to the prestigious Piper Sandler Sm-All Stars: Class of 2024, a list of 30 top-performing small-cap banks and thrifts in the country. Arrow is one of just three
New York financial institutions on the list and the only bank in Upstate New York. Piper Sandler, an independent investment bank and research firm, evaluated more than 300 institutions that trade on a major exchange, narrowing the field to the top 30. - Bauer Financial Ratings: Both Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company continued to maintain their 5-Star Exceptional Performance ratings from Bauer Financial, for the 69th and 61st quarters, respectively.
- Subsidiary Bank Unification: 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.
About Arrow
Arrow Financial Corporation is a multi-bank holding company headquartered in
Non-GAAP Financial Measures Reconciliation
In addition to presenting information in conformity with accounting principles generally accepted in
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 Annual Report on Form 10-K for the year ended December 31, 2023 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 | Nine Months Ended | |||||||
2024 | 2023 | 2024 | 2023 | |||||
INTEREST AND DIVIDEND INCOME | ||||||||
Interest and Fees on Loans | $ 44,122 | $ 36,699 | $ 126,639 | $ 103,203 | ||||
Interest on Deposits at Banks | 2,103 | 1,805 | 6,735 | 3,958 | ||||
Interest and Dividends on Investment Securities: | ||||||||
Fully Taxable | 2,656 | 2,924 | 8,851 | 8,823 | ||||
Exempt from Federal Taxes | 562 | 689 | 1,867 | 2,256 | ||||
Total Interest and Dividend Income | 49,443 | 42,117 | 144,092 | 118,240 | ||||
INTEREST EXPENSE | ||||||||
Interest-Bearing Checking Accounts | 1,966 | 1,156 | 5,510 | 2,346 | ||||
Savings Deposits | 10,905 | 9,729 | 31,706 | 23,830 | ||||
Time Deposits over | 1,803 | 1,466 | 5,645 | 3,159 | ||||
Other Time Deposits | 4,934 | 2,051 | 15,091 | 3,721 | ||||
Borrowings | 1,177 | 2,143 | 3,439 | 5,309 | ||||
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts | 173 | 173 | 514 | 513 | ||||
Interest on Financing Leases | 47 | 46 | 142 | 143 | ||||
Total Interest Expense | 21,005 | 16,764 | 62,047 | 39,021 | ||||
NET INTEREST INCOME | 28,438 | 25,353 | 82,045 | 79,219 | ||||
Provision for Credit Losses | 934 | 354 | 2,326 | 2,856 | ||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 27,504 | 24,999 | 79,719 | 76,363 | ||||
NON-INTEREST INCOME | ||||||||
Income From Fiduciary Activities | 2,429 | 2,378 | 7,337 | 7,081 | ||||
Fees for Other Services to Customers | 2,881 | 2,761 | 8,130 | 8,073 | ||||
Insurance Commissions | 1,955 | 1,695 | 5,299 | 4,775 | ||||
Net Gain (Loss) on Securities | 94 | 71 | 165 | (214) | ||||
Net Gain on Sales of Loans | 126 | 21 | 135 | 25 | ||||
Other Operating Income | 648 | 1,124 | 2,781 | 1,893 | ||||
Total Non-Interest Income | 8,133 | 8,050 | 23,847 | 21,633 | ||||
NON-INTEREST EXPENSE | ||||||||
Salaries and Employee Benefits | 13,446 | 11,988 | 39,375 | 35,974 | ||||
Occupancy Expenses, Net | 1,754 | 1,517 | 5,299 | 4,728 | ||||
Technology and Equipment Expense | 4,692 | 4,371 | 14,246 | 13,150 | ||||
FDIC Assessments | 698 | 515 | 2,111 | 1,478 | ||||
Other Operating Expense | 3,510 | 5,088 | 10,399 | 14,528 | ||||
Total Non-Interest Expense | 24,100 | 23,479 | 71,430 | 69,858 | ||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 11,537 | 9,570 | 32,136 | 28,138 | ||||
Provision for Income Taxes | 2,562 | 1,827 | 6,897 | 5,786 | ||||
NET INCOME | $ 8,975 | $ 7,743 | $ 25,239 | $ 22,352 | ||||
Average Shares Outstanding: | ||||||||
Basic | 16,710 | 17,050 | 16,746 | 17,049 | ||||
Diluted | 16,742 | 17,050 | 16,772 | 17,049 | ||||
Per Common Share: | ||||||||
Basic Earnings | $ 0.54 | $ 0.46 | $ 1.51 | $ 1.31 | ||||
Diluted Earnings | 0.53 | 0.46 | 1.50 | 1.31 |
ARROW FINANCIAL CORPORATION AND SUBSIDIARIES | |||||
CONSOLIDATED BALANCE SHEETS | |||||
(In Thousands, Except Share and Per Share Amounts - Unaudited) | |||||
September 30, | December 31, 2023 | September 30, | |||
ASSETS | |||||
Cash and Due From Banks | $ 53,969 | $ 36,755 | $ 39,778 | ||
Interest-Bearing Deposits at Banks | 286,119 | 105,781 | 254,961 | ||
Investment Securities: | |||||
Available-for-Sale at Fair Value | 437,067 | 497,769 | 519,240 | ||
Held-to-Maturity (Fair Value of | 103,337 | 131,395 | 140,577 | ||
Equity Securities | 5,089 | 1,925 | 1,960 | ||
Other Investments | 4,352 | 5,049 | 5,110 | ||
Loans | 3,339,937 | 3,212,908 | 3,138,617 | ||
Allowance for Credit Losses | (31,262) | (31,265) | (31,112) | ||
Net Loans | 3,308,675 | 3,181,643 | 3,107,505 | ||
Premises and Equipment, Net | 59,932 | 59,642 | 60,311 | ||
Goodwill | 23,789 | 21,873 | 21,873 | ||
Other Intangible Assets, Net | 2,190 | 1,110 | 1,205 | ||
Other Assets | 126,930 | 126,926 | 120,391 | ||
Total Assets | $ 4,411,449 | $ 4,169,868 | $ 4,272,911 | ||
LIABILITIES | |||||
Noninterest-Bearing Deposits | 740,170 | 758,425 | 798,392 | ||
Interest-Bearing Checking Accounts | 875,365 | 799,785 | 920,250 | ||
Savings Deposits | 1,544,868 | 1,466,280 | 1,496,193 | ||
Time Deposits over | 177,990 | 179,301 | 167,614 | ||
Other Time Deposits | 499,064 | 483,775 | 284,036 | ||
Total Deposits | 3,837,457 | 3,687,566 | 3,666,485 | ||
Borrowings | 103,600 | 26,500 | 174,300 | ||
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts | 20,000 | 20,000 | 20,000 | ||
Finance Leases | 5,022 | 5,066 | 5,080 | ||
Other Liabilities | 52,059 | 50,964 | 47,032 | ||
Total Liabilities | 4,018,138 | 3,790,096 | 3,912,897 | ||
STOCKHOLDERS' EQUITY | |||||
Preferred Stock, | — | — | — | ||
Common Stock, | 22,067 | 22,067 | 22,067 | ||
Additional Paid-in Capital | 413,065 | 412,551 | 412,397 | ||
Retained Earnings | 77,429 | 65,792 | 62,647 | ||
Accumulated Other Comprehensive Loss | (25,968) | (33,416) | (52,584) | ||
Treasury Stock, at Cost (5,332,907 Shares at September 30, 2024; 5,124,073 Shares at December 31, 2023 and 5,017,063 Shares at September 30, 2023) | (93,282) | (87,222) | (84,513) | ||
Total Stockholders' Equity | 393,311 | 379,772 | 360,014 | ||
Total Liabilities and Stockholders' Equity | $ 4,411,449 | $ 4,169,868 | $ 4,272,911 |
Arrow Financial Corporation | |||||||||
Selected Quarterly Information | |||||||||
(Dollars In Thousands, Except Per Share Amounts - Unaudited) | |||||||||
Quarter Ended | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | ||||
Net Income | $ 8,975 | $ 8,604 | $ 7,660 | $ 7,723 | $ 7,743 | ||||
Net Changes in Fair Value of Equity Investments (Net of Tax) | 69 | 39 | 13 | 90 | 52 | ||||
Share and Per Share Data: | |||||||||
Period End Shares Outstanding | 16,734 | 16,723 | 16,710 | 16,942 | 17,049 | ||||
Basic Average Shares Outstanding | 16,710 | 16,685 | 16,865 | 17,002 | 17,050 | ||||
Diluted Average Shares Outstanding | 16,742 | 16,709 | 16,867 | 17,004 | 17,050 | ||||
Basic Earnings Per Share | $ 0.54 | $ 0.52 | $ 0.45 | $ 0.46 | $ 0.46 | ||||
Diluted Earnings Per Share | 0.53 | 0.52 | 0.45 | 0.46 | 0.46 | ||||
Cash Dividend Per Share | 0.270 | 0.270 | 0.270 | 0.270 | 0.262 | ||||
Selected Quarterly Average Balances: | |||||||||
Interest-Bearing Deposits at Banks | $ 154,937 | $ 159,336 | $ 178,452 | $ 136,026 | $ 131,814 | ||||
Investment Securities | 590,352 | 644,192 | 671,105 | 713,144 | 745,693 | ||||
Loans | 3,329,873 | 3,280,285 | 3,235,841 | 3,170,262 | 3,096,240 | ||||
Deposits | 3,672,128 | 3,678,957 | 3,693,325 | 3,593,949 | 3,491,028 | ||||
Other Borrowed Funds | 134,249 | 131,537 | 122,033 | 149,507 | 208,527 | ||||
Stockholders' Equity | 387,904 | 378,256 | 379,446 | 363,753 | 362,701 | ||||
Total Assets | 4,245,597 | 4,237,359 | 4,245,484 | 4,159,313 | 4,109,995 | ||||
Return on Average Assets, annualized | 0.84 % | 0.82 % | 0.73 % | 0.74 % | 0.75 % | ||||
Return on Average Equity, annualized | 9.20 % | 9.15 % | 8.12 % | 8.42 % | 8.47 % | ||||
Return on Average Tangible Equity, annualized 1 | 9.79 % | 9.74 % | 8.64 % | 8.99 % | 9.05 % | ||||
Average Earning Assets | |||||||||
Average Paying Liabilities | 3,085,066 | 3,127,417 | 3,108,093 | 2,985,717 | 2,920,518 | ||||
Interest Income | 49,443 | 47,972 | 46,677 | 44,324 | 42,117 | ||||
Tax-Equivalent Adjustment 2 | 149 | 163 | 176 | 184 | 183 | ||||
Interest Income, Tax-Equivalent 2 | 49,592 | 48,135 | 46,853 | 44,508 | 42,117 | ||||
Interest Expense | 21,005 | 20,820 | 20,222 | 18,711 | 16,764 | ||||
Net Interest Income | 28,438 | 27,152 | 26,455 | 25,613 | 25,353 | ||||
Net Interest Income, Tax-Equivalent 2 | 28,587 | 27,315 | 26,631 | 25,797 | 25,536 | ||||
Net Interest Margin, annualized | 2.78 % | 2.67 % | 2.60 % | 2.53 % | 2.53 % | ||||
Net Interest Margin, Tax-Equivalent, annualized 2 | 2.79 % | 2.69 % | 2.62 % | 2.55 % | 2.55 % | ||||
Efficiency Ratio Calculation: 3 | |||||||||
Non-Interest Expense | $ 24,100 | $ 23,318 | $ 24,012 | $ 23,190 | $ 23,479 | ||||
Less: Intangible Asset Amortization | 78 | 40 | 41 | 43 | 43 | ||||
Net Non-Interest Expense | $ 24,022 | $ 23,278 | $ 23,971 | $ 23,147 | $ 23,436 | ||||
Net Interest Income, Tax-Equivalent | $ 28,587 | $ 27,315 | $ 26,631 | $ 25,797 | $ 25,536 | ||||
Non-Interest Income | 8,133 | 7,856 | 7,858 | 7,484 | 8,050 | ||||
Less: Net Gain on Securities | 94 | 54 | 17 | 122 | 71 | ||||
Net Gross Income | $ 36,626 | $ 35,117 | $ 34,472 | $ 33,159 | $ 33,515 | ||||
Efficiency Ratio | 65.59 % | 66.29 % | 69.54 % | 69.81 % | 69.93 % | ||||
Period-End Capital Information: | |||||||||
Total Stockholders' Equity (i.e. Book Value) | $ 393,311 | $ 383,018 | $ 377,986 | $ 379,772 | $ 360,014 | ||||
Book Value per Share | 23.50 | 22.90 | 22.62 | 22.42 | 21.12 | ||||
Goodwill and Other Intangible Assets, net | 25,979 | 22,800 | 22,891 | 22,983 | 23,078 | ||||
Tangible Book Value per Share 1 | 21.95 | 21.54 | 21.25 | 21.06 | 19.76 | ||||
Capital Ratios:4 | |||||||||
Tier 1 Leverage Ratio | 9.78 % | 9.74 % | 9.63 % | 9.84 % | 9.94 % | ||||
Common Equity Tier 1 Capital Ratio | 12.77 % | 12.88 % | 12.84 % | 13.00 % | 13.17 % | ||||
Tier 1 Risk-Based Capital Ratio | 13.41 % | 13.53 % | 13.50 % | 13.66 % | 13.84 % | ||||
Total Risk-Based Capital Ratio | 14.46 % | 14.57 % | 14.57 % | 14.74 % | 14.94 % | ||||
Assets Under Trust Admin. & Investment Mgmt. |
Arrow Financial Corporation | ||||||||||
Selected Quarterly Information - Continued | ||||||||||
(Dollars In Thousands, Except Per Share Amounts - Unaudited) | ||||||||||
Footnotes: | ||||||||||
1. | Non-GAAP Financial Measure Reconciliation: Tangible Book Value, Tangible Equity, and Return on Tangible Equity exclude goodwill and other intangible assets, net from total equity. These are non-GAAP financial measures which Arrow believes provide investors with information that is useful in understanding its financial performance. | |||||||||
9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | ||||||
Total Stockholders' Equity (GAAP) | $ 393,311 | $ 383,018 | $ 377,986 | $ 379,772 | $ 360,014 | |||||
Less: Goodwill and Other Intangible assets, net | 25,979 | 22,800 | 22,891 | 22,983 | 23,078 | |||||
Tangible Equity (Non-GAAP) | $ 367,332 | $ 360,218 | $ 355,095 | $ 356,789 | $ 336,936 | |||||
Period End Shares Outstanding | 16,734 | 16,723 | 16,710 | 16,942 | 17,049 | |||||
Tangible Book Value per Share (Non-GAAP) | $ 21.95 | $ 21.54 | $ 21.25 | $ 21.06 | $ 19.76 | |||||
Net Income | 8,975 | 8,604 | 7,660 | 7,723 | 7,743 | |||||
Return on Tangible Equity (Net Income/Tangible Equity - Annualized) | 9.79 % | 9.74 % | 8.64 % | 8.99 % | 9.05 % | |||||
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. | |||||||||
9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | ||||||
Interest Income (GAAP) | $ 49,443 | $ 47,972 | $ 46,677 | $ 44,324 | $ 42,117 | |||||
Add: Tax-Equivalent adjustment (Non-GAAP) | 149 | 163 | 176 | 184 | 183 | |||||
Interest Income - Tax Equivalent (Non-GAAP) | $ 49,592 | $ 48,135 | $ 46,853 | $ 44,508 | $ 42,300 | |||||
Net Interest Income (GAAP) | $ 28,438 | $ 27,152 | $ 26,455 | $ 25,613 | $ 25,353 | |||||
Add: Tax-Equivalent adjustment (Non-GAAP) | 149 | 163 | 176 | 184 | 183 | |||||
Net Interest Income - Tax Equivalent (Non-GAAP) | $ 28,587 | $ 27,315 | $ 26,631 | $ 25,797 | $ 25,536 | |||||
Average Earning Assets | $ 4,075,162 | $ 4,083,813 | $ 4,085,398 | $ 4,019,432 | $ 3,973,747 | |||||
Net Interest Margin (Non-GAAP)* | 2.79 % | 2.69 % | 2.62 % | 2.55 % | 2.55 % | |||||
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, 2024 CET1 ratio listed in the tables (i.e., | |||||||||
9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | ||||||
Total Risk Weighted Assets | $ 3,110,178 | $ 3,072,922 | $ 3,049,525 | $ 3,032,188 | $ 2,988,438 | |||||
Common Equity Tier 1 Capital | 397,122 | 395,691 | 391,706 | 394,166 | 393,541 | |||||
Common Equity Tier 1 Ratio | 12.77 % | 12.88 % | 12.84 % | 13.00 % | 13.17 % | |||||
* Quarterly ratios have been annualized. |
Arrow Financial Corporation | |||||||||||
Average Consolidated Balance Sheets and Net Interest Income Analysis | |||||||||||
(Dollars in Thousands - Unaudited) | |||||||||||
Quarter Ended: | September 30, 2024 | September 30, 2023 | |||||||||
Interest | Rate | Interest | Rate | ||||||||
Average | Income/ | Earned/ | Average | Income/ | Earned/ | ||||||
Balance | Expense | Paid | Balance | Expense | Paid | ||||||
Interest-Bearing Deposits at Banks | $ 154,937 | $ 2,103 | 5.40 % | $ 131,814 | $ 1,805 | 5.43 % | |||||
Investment Securities: | |||||||||||
Fully Taxable | 497,450 | 2,656 | 2.12 | 616,020 | 2,924 | 1.88 | |||||
Exempt from Federal Taxes | 92,902 | 562 | 2.41 | 129,673 | 689 | 2.11 | |||||
Loans (1) | 3,329,873 | 44,122 | 5.27 | 3,096,240 | 36,699 | 4.70 | |||||
Total Earning Assets (1) | 4,075,162 | 49,443 | 4.83 | 3,973,747 | 42,117 | 4.20 | |||||
Allowance for Credit Losses | (31,147) | (31,386) | |||||||||
Cash and Due From Banks | 33,159 | 32,874 | |||||||||
Other Assets | 168,423 | 134,760 | |||||||||
Total Assets | $ 4,245,597 | $ 4,109,995 | |||||||||
Deposits: | |||||||||||
Interest-Bearing Checking Accounts | $ 785,134 | 1,966 | 1.00 | $ 795,627 | 1,156 | 0.58 | |||||
Savings Deposits | 1,492,888 | 10,905 | 2.91 | 1,505,916 | 9,729 | 2.56 | |||||
Time Deposits of | 174,028 | 1,803 | 4.12 | 152,738 | 1,466 | 3.81 | |||||
Other Time Deposits | 498,767 | 4,934 | 3.94 | 257,710 | 2,051 | 3.16 | |||||
Total Interest-Bearing Deposits | 2,950,817 | 19,608 | 2.64 | 2,711,991 | 14,402 | 2.11 | |||||
Borrowings | 109,230 | 1,177 | 4.29 | 183,452 | 2,143 | 4.63 | |||||
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts | 20,000 | 173 | 3.44 | 20,000 | 173 | 3.43 | |||||
Finance Leases | 5,019 | 47 | 3.73 | 5,075 | 46 | 3.60 | |||||
Total Interest-Bearing Liabilities | 3,085,066 | 21,005 | 2.71 | 2,920,518 | 16,764 | 2.28 | |||||
Noninterest-Bearing Deposits | 721,311 | 779,037 | |||||||||
Other Liabilities | 51,316 | 47,739 | |||||||||
Total Liabilities | 3,857,693 | 3,747,294 | |||||||||
Stockholders' Equity | 387,904 | 362,701 | |||||||||
Total Liabilities and Stockholders' Equity | $ 4,245,597 | $ 4,109,995 | |||||||||
Net Interest Income | $ 28,438 | $ 25,353 | |||||||||
Net Interest Spread | 2.12 % | 1.92 % | |||||||||
Net Interest Margin | 2.78 % | 2.53 % |
(1) Includes Nonaccrual Loans. |
Arrow Financial Corporation | |||||||||||
Average Consolidated Balance Sheets and Net Interest Income Analysis | |||||||||||
(Dollars in Thousands - Unaudited) | |||||||||||
Quarter Ended: | September 30, 2024 | June 30, 2024 | |||||||||
Interest | Rate | Interest | Rate | ||||||||
Average | Income/ | Earned/ | Average | Income/ | Earned/ | ||||||
Balance | Expense | Paid | Balance | Expense | Paid | ||||||
Interest-Bearing Deposits at Banks | $ 154,937 | $ 2,103 | 5.40 % | $ 159,336 | $ 2,185 | 5.52 % | |||||
Investment Securities: | |||||||||||
Fully Taxable | 497,450 | 2,656 | 2.12 | 530,869 | 3,009 | 2.28 | |||||
Exempt from Federal Taxes | 92,902 | 562 | 2.41 | 113,323 | 637 | 2.26 | |||||
Loans (1) | 3,329,873 | 44,122 | 5.27 | 3,280,285 | 42,141 | 5.17 | |||||
Total Earning Assets (1) | 4,075,162 | 49,443 | 4.83 | 4,083,813 | 47,972 | 4.72 | |||||
Allowance for Credit Losses | (31,147) | (31,459) | |||||||||
Cash and Due From Banks | 33,159 | 28,611 | |||||||||
Other Assets | 168,423 | 156,394 | |||||||||
Total Assets | $ 4,245,597 | $ 4,237,359 | |||||||||
Deposits: | |||||||||||
Interest-Bearing Checking Accounts | $ 785,134 | 1,966 | 1.00 | $ 832,087 | 1,903 | 0.92 | |||||
Savings Deposits | 1,492,888 | 10,905 | 2.91 | 1,487,062 | 10,571 | 2.86 | |||||
Time Deposits of | 174,028 | 1,803 | 4.12 | 172,655 | 1,869 | 4.35 | |||||
Other Time Deposits | 498,767 | 4,934 | 3.94 | 504,076 | 5,074 | 4.05 | |||||
Total Interest-Bearing Deposits | 2,950,817 | 19,608 | 2.64 | 2,995,880 | 19,417 | 2.61 | |||||
Borrowings | 109,230 | 1,177 | 4.29 | 106,502 | 1,186 | 4.48 | |||||
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts | 20,000 | 173 | 3.44 | 20,000 | 170 | 3.42 | |||||
Finance Leases | 5,019 | 47 | 3.73 | 5,035 | 47 | 3.75 | |||||
Total Interest-Bearing Liabilities | 3,085,066 | 21,005 | 2.71 | 3,127,417 | 20,820 | 2.68 | |||||
Noninterest-Bearing Deposits | 721,311 | 683,077 | |||||||||
Other Liabilities | 51,316 | 48,609 | |||||||||
Total Liabilities | 3,857,693 | 3,859,103 | |||||||||
Stockholders' Equity | 387,904 | 378,256 | |||||||||
Total Liabilities and Stockholders' Equity | $ 4,245,597 | $ 4,237,359 | |||||||||
Net Interest Income | $ 28,438 | $ 27,152 | |||||||||
Net Interest Spread | 2.12 % | 2.04 % | |||||||||
Net Interest Margin | 2.78 % | 2.67 % |
(1) Includes Nonaccrual Loans. |
Average Consolidated Balance Sheets and Net Interest Income Analysis | |||||||||||
(GAAP Basis) | |||||||||||
(Dollars In Thousands) | |||||||||||
Nine Months Ended September 30: | 2024 | 2023 | |||||||||
Interest | Rate | Interest | Rate | ||||||||
Average | Income/ | Earned/ | Average | Income/ | Earned/ | ||||||
Balance | Expense | Paid | Balance | Expense | Paid | ||||||
Interest-Bearing Deposits at Banks | $ 164,208 | $ 6,735 | 5.48 % | $ 101,104 | $ 3,958 | 5.23 % | |||||
Investment Securities: | |||||||||||
Fully Taxable | 526,181 | 8,851 | 2.25 | 635,126 | 8,823 | 1.86 | |||||
Exempt from Federal Taxes | 108,872 | 1,867 | 2.29 | 146,736 | 2,256 | 2.06 | |||||
Loans (1) | 3,282,175 | 126,639 | 5.15 | 3,041,909 | 103,203 | 4.54 | |||||
Total Earning Assets (1) | 4,081,436 | 144,092 | 4.72 | 3,924,875 | 118,240 | 4.03 | |||||
Allowance for Credit Losses | (31,340) | (30,591) | |||||||||
Cash and Due From Banks | 30,534 | 30,720 | |||||||||
Other Assets | 162,194 | 134,310 | |||||||||
Total Assets | $ 4,242,824 | $ 4,059,314 | |||||||||
Deposits: | |||||||||||
Interest-Bearing Checking Accounts | $ 815,933 | 5,510 | 0.90 | $ 874,132 | 2,346 | 0.36 | |||||
Savings Deposits | 1,487,005 | 31,706 | 2.85 | 1,494,976 | 23,830 | 2.13 | |||||
Time Deposits of | 174,668 | 5,645 | 4.32 | 127,230 | 3,159 | 3.32 | |||||
Other Time Deposits | 499,881 | 15,091 | 4.03 | 203,047 | 3,721 | 2.45 | |||||
Total Interest-Bearing Deposits | 2,977,487 | 57,952 | 2.60 | 2,699,385 | 33,056 | 1.64 | |||||
Borrowings | 104,257 | 3,439 | 4.41 | 151,887 | 5,309 | 4.67 | |||||
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts | 20,000 | 514 | 3.43 | 20,000 | 513 | 3.43 | |||||
Finance Leases | 5,034 | 142 | 3.77 | 5,088 | 143 | 3.76 | |||||
Total Interest-Bearing Liabilities | 3,106,778 | 62,047 | 2.67 | 2,876,360 | 39,021 | 1.81 | |||||
Noninterest-Bearing Deposits | 703,948 | 777,994 | |||||||||
Other Liabilities | 50,207 | 42,506 | |||||||||
Total Liabilities | 3,860,933 | 3,696,860 | |||||||||
Stockholders' Equity | 381,891 | 362,454 | |||||||||
Total Liabilities and Stockholders' Equity | $ 4,242,824 | $ 4,059,314 | |||||||||
Net Interest Income | $ 82,045 | $ 79,219 | |||||||||
Net Interest Spread | 2.05 % | 2.22 % | |||||||||
Net Interest Margin | 2.69 % | 2.70 % |
(1) Includes Nonaccrual Loans. |
Arrow Financial Corporation | |||||
Consolidated Financial Information | |||||
(Dollars in Thousands - Unaudited) | |||||
Quarter Ended: | 9/30/2024 | 12/31/2023 | 9/30/2023 | ||
Loan Portfolio | |||||
Commercial Loans | $ 169,884 | $ 156,224 | $ 148,066 | ||
Commercial Real Estate Loans | 756,420 | 745,487 | 734,604 | ||
Subtotal Commercial Loan Portfolio | 926,304 | 901,711 | 882,670 | ||
Consumer Loans | 1,120,241 | 1,111,667 | 1,107,638 | ||
Residential Real Estate Loans | 1,293,392 | 1,199,530 | 1,148,309 | ||
Total Loans | $ 3,339,937 | $ 3,212,908 | $ 3,138,617 | ||
Allowance for Credit Losses | |||||
Allowance for Credit Losses, Beginning of Quarter | $ 31,009 | $ 31,112 | $ 31,170 | ||
Loans Charged-off | (1,429) | (1,366) | (1,204) | ||
Less Recoveries of Loans Previously Charged-off | 748 | 994 | 792 | ||
Net Loans Charged-off | (681) | (372) | (412) | ||
Provision for Credit Losses | 934 | 525 | 354 | ||
Allowance for Credit Losses, End of Quarter | $ 31,262 | $ 31,265 | $ 31,112 | ||
Nonperforming Assets | |||||
Nonaccrual Loans | $ 21,047 | $ 20,645 | $ 6,023 | ||
Loans Past Due 90 or More Days and Accruing | 816 | 452 | 251 | ||
Loans Restructured and in Compliance with Modified Terms | 30 | 54 | 60 | ||
Total Nonperforming Loans | 21,893 | 21,151 | 6,334 | ||
Repossessed Assets | 322 | 312 | 344 | ||
Other Real Estate Owned | 76 | — | 182 | ||
Total Nonperforming Assets | $ 22,291 | $ 21,463 | $ 6,860 | ||
Key Asset Quality Ratios | |||||
Net Loans Charged-off to Average Loans, Quarter-to-date Annualized | 0.08 % | 0.05 % | 0.05 % | ||
Provision for Credit Losses to Average Loans, Quarter-to-date Annualized | 0.11 % | 0.07 % | 0.05 % | ||
Allowance for Credit Losses to Period-End Loans | 0.94 % | 0.97 % | 0.99 % | ||
Allowance for Credit Losses to Period-End Nonperforming Loans | 142.79 % | 147.82 % | 491.19 % | ||
Nonperforming Loans to Period-End Loans | 0.66 % | 0.66 % | 0.20 % | ||
Nonperforming Assets to Period-End Assets | 0.51 % | 0.51 % | 0.16 % | ||
Year-to-Date Period Ended: | 9/30/2024 | 12/31/2023 | 9/30/2023 | ||
Allowance for Credit Losses | |||||
Allowance for Credit Losses, Beginning of Year | $ 31,265 | $ 29,952 | $ 29,952 | ||
Loans Charged-off | (4,562) | (5,177) | (3,812) | ||
Less Recoveries of Loans Previously Charged-off | 2,233 | 3,109 | 2,116 | ||
Net Loans Charged-off | (2,329) | (2,068) | (1,696) | ||
Provision for Credit Losses | 2,326 | 3,381 | 2,856 | ||
Allowance for Credit Losses, End of Period | $ 31,262 | $ 31,265 | $ 31,112 | ||
Key Asset Quality Ratios | |||||
Net Loans Charged-off to Average Loans, Annualized | 0.09 % | 0.07 % | 0.07 % | ||
Provision for Loan Losses to Average Loans, Annualized | 0.09 % | 0.11 % | 0.13 % |
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SOURCE Arrow Financial Corporation
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