Arrow Reports 3rd Quarter Net Income of $5.7 Million, or $0.31 per Share, and Declares 4th Quarter Dividend of $0.30 per Share
Completes Acquisition of Adirondack Bancorp Inc. and Recognizes $15.6 Million in Merger Related Expenses
GLENS FALLS, N.Y., Oct. 29, 2026 /PRNewswire/ -- Arrow Financial Corporation (NasdaqGS ® – AROW) ("Arrow" or the "Company") announced financial results for the three-month period ended September 30, 2026. Reported net income for the third quarter of 2026 was $5.7 million and fully diluted earnings per share ("EPS") was $0.31, versus net income of $11.0 million and EPS of $0.66 for the second quarter of 2026.
The Board of Directors of Arrow declared a quarterly cash dividend of $0.30 per share; payable November 23, 2026 to shareholders of record as of November 11, 2026.
Arrow posted core EPS of $0.97 for the third quarter of 2026. Core results exclude approximately $15.6 million ($0.66 per share) of merger-related expenses ("MRE" 1) related to the July 1, 2026 acquisition of Adirondack Bancorp, Inc. and Adirondack Bank based in Utica, New York ("Acquisition").
This earnings release and related commentary should be read in conjunction with the Company's October 29, 2026 Form 8-K and related Third Quarter 2026 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 excited to report our third-quarter financial results, marking the first quarter of financial performance following our acquisition of Adirondack Bancorp. Reflecting the collaboration and commitment of our combined team, Arrow is already delivering on expected benefits from the strategic acquisition with strong loan growth, net interest margin expansion, significant increase in non-interest income, core earnings of $0.97 per share and core ROA growth. We expect to complete the core banking system integration over the next few weeks and remain on track to realize approximately 95 percent of the anticipated cost savings by the first quarter of 2027. We also continued to celebrate our bank's 175th anniversary year by ringing the Nasdaq closing bell in late September. I would like to thank all of our valued team members, both past and present, for their dedication and hard work to mark this milestone as Arrow continues to grow to better serve our expanding communities."
Acquisition Highlights
Third-Quarter Highlights and Key Metrics
Income Statement
Three Months Ended
(Dollars in Thousands)
September 30, 2026
December 31, 2025
September 30, 2025
Interest and Dividend Income
$ 68,075
$ 54,610
$ 53,598
Interest Expense
19,342
19,467
19,467
Net Interest Income
48,733
35,143
34,131
Average Earning Assets (A)
5,089,406
4,302,305
4,199,115
Average Interest-Bearing Liabilities
3,729,983
3,280,856
3,193,789
Average Yield on Earning Assets (A)
5.31 %
5.04 %
5.06 %
Average Cost of Interest-Bearing Liabilities
2.06
2.35
2.42
Net Interest Spread
3.25
2.69
2.64
Net Interest Margin
3.80
3.24
3.22
Net Interest Margin - FTE
3.81
3.25
3.24
(A) Includes Nonaccrual Loans.
Balance Sheet
Additional Commentary
About Arrow: Arrow Financial Corporation is a holding company headquartered in Glens Falls, New York, serving the financial needs of northeastern and central New York. The Company is the parent of Arrow Bank, a full-service commercial bank, and Upstate Agency, LLC, a comprehensive insurance agency.
Non-GAAP Financial Measures Reconciliation: In addition to presenting information in conformity with accounting principles generally accepted in the United States of America (GAAP), this news release contains financial information determined by methods other than GAAP (non-GAAP). The following measures used in this release, which are commonly utilized by financial institutions, have not been specifically exempted by the Securities and Exchange Commission ("SEC") and may constitute "non-GAAP financial measures" within the meaning of the SEC's rules: tangible book value, tangible equity, return on tangible equity, tax-equivalent adjustment and related net interest income, tax-equivalent net interest margin and the efficiency ratio. Management believes that the non-GAAP financial measures disclosed by Arrow from time to time are useful in evaluating Arrow's performance and that such information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Non-GAAP financial measures may differ from similar measures presented by other companies. See the reconciliation of GAAP to non-GAAP measures in the section "Selected Quarterly Information."
Safe Harbor Statement: The information contained in this earnings release may contain statements that are not historical in nature but rather are based on management's beliefs, assumptions, expectations, estimates and projections about the future. These statements can sometimes be identified by Arrow's use of forward-looking words such as "may," "will," "anticipate," "estimate," "expect," or "intend." These statements may be "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, involving a degree of uncertainty and attendant risk. In the case of all forward-looking statements, actual outcomes and results may differ materially from what the statements predict or forecast, explicitly or by implication because of various factors, including changes in economic conditions or interest rates, credit risk, inflation, tariffs, cybersecurity risks, changes in FDIC assessments, bank failures, geopolitical events, difficulties in managing Arrow's growth, competition, changes in law or the regulatory environment, risks relating to the integration of Adirondack Bancorp, Inc. and Adirondack Bank, and changes in general business and economic trends. Arrow undertakes no obligation to revise or update these forward-looking statements to reflect the occurrence of unanticipated events. This earnings release should be read in conjunction with Arrow's Annual Report on Form 10-K for the year ended December 31, 2025, and other filings with the SEC.
1
EPS and ROA excluding merger-related expenses are non-GAAP measures. See reconciliation in Note 5 to the Selected Quarterly Information
2
FTE Net interest margin is a non-GAAP measure. See reconciliation on Note 2 to the Selected Quarterly Information
3
Retail deposits exclude wholesale funding sources
ARROW FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts - Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2026
2025
2026
2025
INTEREST AND DIVIDEND INCOME
Interest and Fees on Loans
$ 58,896
$ 46,832
$ 153,203
$ 136,982
Interest on Deposits at Banks
1,962
2,245
4,837
5,488
Interest and Dividends on Investment Securities:
Fully Taxable
6,059
4,066
15,305
11,464
Exempt from Federal Taxes
1,158
455
2,141
1,603
Total Interest and Dividend Income
68,075
53,598
175,486
155,537
INTEREST EXPENSE
Interest-Bearing Checking Accounts
2,567
2,160
6,829
5,904
Savings Deposits
9,472
9,534
27,121
28,384
Time Deposits over $250,000
1,612
1,695
3,860
5,232
Other Time Deposits
3,089
5,859
12,829
17,181
Borrowings
2,230
—
3,249
167
Junior Subordinated Obligations Issued to
Unconsolidated Subsidiary Trusts
326
173
666
513
Interest on Financing Leases
46
46
138
135
Total Interest Expense
19,342
19,467
54,692
57,516
NET INTEREST INCOME
48,733
34,131
120,794
98,021
Provision for Credit Losses
1,467
815
4,842
6,428
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES
47,266
33,316
115,952
91,593
NON-INTEREST INCOME
Income From Fiduciary Activities
2,609
2,600
8,028
7,533
Fees for Other Services to Customers
4,243
2,857
9,939
8,244
Insurance Commissions
2,145
1,986
6,232
5,616
Net Gain on Securities
114
392
414
669
Net Gain on Sales of Loans
180
261
624
573
Other Operating Income
2,124
620
3,062
1,529
Total Non-Interest Income
11,415
8,716
28,299
24,164
NON-INTEREST EXPENSE
Salaries and Employee Benefits
19,391
14,339
49,410
41,980
Occupancy Expenses, Net
2,805
1,907
7,365
5,881
Technology and Equipment Expense
6,976
4,963
16,785
15,639
FDIC Assessments
903
634
1,929
1,953
Other Operating Expense
21,753
3,590
30,668
11,677
Total Non-Interest Expense
51,828
25,433
106,157
77,130
INCOME BEFORE PROVISION FOR INCOME TAXES
6,853
16,599
38,094
38,627
Provision for Income Taxes
1,153
3,774
7,947
8,687
NET INCOME
$ 5,700
$ 12,825
$ 30,147
$ 29,940
Average Shares Outstanding:
Basic
18,421
16,402
17,084
16,541
Diluted
18,462
16,406
17,119
16,543
Per Common Share:
Basic Earnings
$ 0.31
$ 0.77
$ 1.75
$ 1.80
Diluted Earnings
0.31
0.77
1.75
1.80
ARROW FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Amounts - Unaudited)
September 30, 2026
December 31, 2025
ASSETS
Cash and Due From Banks
$ 53,172
$ 29,132
Interest-Earning Deposits at Banks
325,600
185,051
Investment Securities:
Available-for-Sale at Fair Value
609,085
495,868
Held-to-Maturity (Fair Value of $63,866 at September 30,
2026 and $66,569 at December 31, 2025)
64,258
66,975
Equity Securities
6,011
5,597
Other Investments
14,220
4,372
Loans
4,144,587
3,453,093
Allowance for Credit Losses
(41,131)
(34,322)
Net Loans
4,103,456
3,418,771
Premises and Equipment, Net
76,206
59,433
Goodwill
69,813
23,789
Other Intangible Assets, Net
18,379
1,741
Other Assets
206,854
155,133
Total Assets
$ 5,547,054
$ 4,445,862
LIABILITIES
Noninterest-Bearing Deposits
1,137,492
722,374
Interest-Bearing Checking Accounts
1,154,313
862,192
Savings Deposits
1,839,409
1,557,638
Time Deposits over $250,000
229,694
155,802
Other Time Deposits
377,989
641,463
Total Deposits
4,738,897
3,939,469
Borrowings
185,190
4,265
Junior Subordinated Obligations Issued to Unconsolidated
Subsidiary Trusts
28,248
20,000
Finance Leases
4,866
4,929
Other Liabilities
74,761
45,347
Total Liabilities
5,031,962
4,014,010
STOCKHOLDERS' EQUITY
Preferred Stock, $1 Par Value; 1,000,000 Shares Authorized
at September 30, 2026 and December 31, 2025 (none issued)
—
—
Common Stock, $1 Par Value: 30,000,000 Shares Authorized;
22,066,559 Shares Issued; 18,535,102 and 16,445,342
Shares Outstanding at September 30, 2026 and
December 31, 2025
22,067
22,067
Additional Paid-in Capital
468,436
414,506
Retained Earnings
116,948
102,271
Accumulated Other Comprehensive Loss
(18,324)
(4,037)
Treasury Stock, at Cost (3,531,457 Shares at September 30,
2026 and 5,621,217 Shares at December 31, 2025)
(74,035)
(102,955)
Total Stockholders' Equity
515,092
431,852
Total Liabilities and Stockholders' Equity
$ 5,547,054
$ 4,445,862
Arrow Financial Corporation
Selected Quarterly Information
(Dollars In Thousands, Except Per Share Amounts - Unaudited)
Quarter Ended
9/30/2026
6/30/2026
3/31/2026
12/31/2025
9/30/2025
Net Income
$ 5,700
$ 10,962
$ 13,485
$ 14,013
$ 12,825
Share and Per Share Data:
Period End Shares Outstanding
18,535
16,545
16,527
16,445
16,438
Basic Average Shares Outstanding
18,421
16,428
16,382
16,390
16,402
Diluted Average Shares Outstanding
18,462
16,467
16,403
16,413
16,406
Basic Earnings Per Share
$ 0.31
$ 0.66
$ 0.82
$ 0.85
$ 0.77
Diluted Earnings Per Share
0.31
0.66
0.82
0.85
0.77
Cash Dividend Per Share
0.30
0.30
0.30
0.29
0.29
Selected Quarterly Average Balances:
Interest-Earning Deposits at Banks
$ 211,383
$ 129,628
$ 183,252
$ 260,806
$ 200,251
Investment Securities
770,629
614,771
598,817
596,994
574,080
Loans
4,107,394
3,466,810
3,440,505
3,444,505
3,424,784
Deposits
4,566,546
3,788,961
3,928,761
4,002,221
3,913,721
Other Borrowed Funds
267,225
149,307
29,181
29,203
30,539
Stockholders' Equity
530,861
445,887
438,846
425,042
413,058
Total Assets
5,407,135
4,425,821
4,439,833
4,499,195
4,399,815
Return on Average Assets, annualized
0.42 %
0.99 %
1.23 %
1.24 %
1.16 %
Return on Average Equity, annualized
4.26 %
9.86 %
12.46 %
13.08 %
12.32 %
Return on Average Tangible Equity, annualized 1
5.08 %
10.46 %
13.23 %
13.92 %
13.13 %
Average Earning Assets
$ 5,089,406
$ 4,211,209
$ 4,222,574
$ 4,302,305
$ 4,199,115
Average Paying Liabilities
3,729,983
3,222,939
3,244,709
3,280,856
3,193,789
Interest Income
68,075
53,617
53,794
54,610
53,598
Tax-Equivalent Adjustment 2
148
133
123
114
121
Interest Income, Tax-Equivalent 2
68,223
53,750
53,917
54,724
53,719
Interest Expense
19,342
17,686
17,664
19,467
19,467
Net Interest Income
48,733
35,931
36,130
35,143
34,131
Net Interest Income, Tax-Equivalent 2
48,881
36,064
36,253
35,258
34,252
Net Interest Margin, annualized
3.80 %
3.42 %
3.47 %
3.24 %
3.22 %
Net Interest Margin, Tax-Equivalent, annualized 2
3.81 %
3.43 %
3.48 %
3.25 %
3.24 %
Efficiency Ratio Calculation: 3
Non-Interest Expense
$ 51,828
$ 27,464
$ 26,865
$ 25,804
$ 25,433
Less: Intangible Asset Amortization
812
71
72
74
76
Net Non-Interest Expense
$ 51,016
$ 27,393
$ 26,793
$ 25,730
$ 25,357
Net Interest Income, Tax-Equivalent
$ 48,881
$ 36,064
$ 36,253
$ 35,257
$ 34,252
Non-Interest Income
11,415
8,255
8,628
8,268
8,716
Less: Net Gain (Loss) on Securities
114
155
145
(127)
392
Net Gross Income
$ 60,182
$ 44,165
$ 44,736
$ 43,652
$ 42,576
Efficiency Ratio
84.77 %
62.02 %
59.89 %
58.94 %
59.56 %
Period-End Capital Information:
Total Stockholders' Equity (i.e. Book Value)
$ 515,092
$ 446,306
$ 440,143
$ 431,852
$ 417,687
Book Value per Share
27.79
26.98
26.63
26.26
25.41
Goodwill and Other Intangible Assets, net
88,192
25,401
25,481
25,530
25,594
Tangible Book Value per Share 1
23.03
25.44
25.09
24.71
23.85
Capital Ratios: 4
Tier 1 Leverage Ratio
8.93 %
10.19 %
10.02 %
9.68 %
9.66 %
Common Equity Tier 1 Capital Ratio
11.63 %
13.21 %
13.30 %
13.01 %
13.07 %
Tier 1 Risk-Based Capital Ratio
12.35 %
13.83 %
13.93 %
13.64 %
13.71 %
Total Risk-Based Capital Ratio
13.46 %
14.98 %
15.04 %
14.76 %
14.86 %
Arrow Financial Corporation
Selected Quarterly Information
(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.
9/30/2026
6/30/2026
3/31/2026
12/31/2025
9/30/2025
Total Stockholders' Equity (GAAP)
$ 515,092
$ 446,306
$ 440,143
$ 431,852
$ 417,687
Less: Goodwill and Other Intangible assets, net
88,192
25,401
25,481
25,530
25,594
Tangible Equity (Non-GAAP)
$ 426,900
$ 420,905
$ 414,662
$ 406,322
$ 392,093
Period End Shares Outstanding
18,535
16,545
16,527
16,445
16,438
Tangible Book Value per Share (Non-GAAP)
$ 23.03
$ 25.44
$ 25.09
$ 24.71
$ 23.85
Net Income
5,700
10,962
13,485
14,013
12,825
Return on Tangible Equity (Net Income/Tangible Equity - Annualized)
5.08 %
10.46 %
13.23 %
13.92 %
13.13 %
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.
9/30/2026
6/30/2026
3/31/2026
12/31/2025
9/30/2025
Interest Income (GAAP)
$ 68,075
$ 53,617
$ 53,794
$ 54,610
$ 53,598
Add: Tax-Equivalent adjustment (Non-GAAP)
148
133
123
114
121
Interest Income - Tax Equivalent (Non-GAAP)
$ 68,223
$ 53,750
$ 53,917
$ 54,724
$ 53,719
Net Interest Income (GAAP)
$ 48,733
$ 35,931
$ 36,130
$ 35,143
$ 34,131
Add: Tax-Equivalent adjustment (Non-GAAP)
148
133
123
114
121
Net Interest Income - Tax Equivalent (Non-GAAP)
$ 48,881
$ 36,064
$ 36,253
$ 35,257
$ 34,252
Average Earning Assets
$ 5,089,406
$ 4,211,209
$ 4,222,574
$ 4,302,305
$ 4,199,115
Net Interest Margin (Non-GAAP)*
3.81 %
3.43 %
3.48 %
3.25 %
3.24 %
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, 2026 CET1 ratio listed in the tables (i.e., 11.63%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%). Regulatory capital ratios are estimated, subject to finalization as part of the current quarter Call Report.
9/30/2026
6/30/2026
3/31/2026
12/31/2025
9/30/2025
Total Risk Weighted Assets
$ 3,863,576
$ 3,253,881
$ 3,180,782
$ 3,182,240
$ 3,095,225
Common Equity Tier 1 Capital
449,211
429,971
423,139
414,050
404,426
Common Equity Tier 1 Ratio
11.63 %
13.21 %
13.30 %
13.01 %
13.07 %
5.
Non-GAAP Financial Measure Reconciliation: Net Income and Net Non-Interest Expense adjusted for non-core expenses. Non-core expenses include merger-related expenses, which are related to the announced acquisition of Adirondack Bancorp, Inc., and unification expenses, which are related to the system conversion and operational merger of the Company's two banking subsidiaries during the year ended December 31, 2025. EPS, efficiency ratio, and ROA are presented on an adjusted basis to reflect these exclusions. In the third quarter of 2026, Arrow issued approximately 1.98 million shares of common stock. These are non-GAAP financial measures, which Arrow believes provides investors with information that is useful in understanding its financial performance.
9/30/2026
6/30/2026
3/31/2026
12/31/2025
9/30/2025
Net Income
$ 5,700
$ 10,962
$ 13,485
$ 14,013
$ 12,825
Non-Core Expenses:
Merger-Related Expenses
15,609
971
790
—
—
Unification Expenses
—
—
—
—
543
Less: Tax Benefit
(3,247)
(214)
(174)
—
(119)
Net Non-Core Expenses (Non-GAAP)
12,362
757
616
—
424
Core Net Income (Non-GAAP)
$ 18,062
$ 11,719
$ 14,101
$ 14,013
$ 13,249
Net Non-Interest Expense
$ 51,016
$ 27,393
$ 26,793
$ 25,730
$ 25,357
Non-Core Expenses:
Merger-Related Expenses
15,609
971
790
—
—
Unification Expenses
—
—
—
—
543
Core Net Non-Interest Expense (Non-GAAP)
$ 35,407
$ 26,422
$ 26,003
$ 25,730
$ 24,814
Core Earnings Per Share (Non-GAAP)
$ 0.97
$ 0.71
$ 0.85
$ 0.85
$ 0.80
Core Return on Average Assets (Non-GAAP)
1.33 %
1.06 %
1.29 %
1.24 %
1.20 %
Core Efficiency Ratio (Non-GAAP)
58.83 %
59.83 %
58.13 %
58.94 %
58.28 %
* 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, 2026
September 30, 2025
Interest
Rate
Interest
Rate
Average
Income/
Earned/
Average
Income/
Earned/
Balance
Expense
Paid
Balance
Expense
Paid
Interest-Earning Deposits at Banks
$ 211,383
$ 1,962
3.68 %
$ 200,251
$ 2,245
4.45 %
Investment Securities:
Fully Taxable
695,702
6,059
3.46
509,599
4,066
3.17
Exempt from Federal Taxes
74,927
1,158
6.13
64,481
455
2.80
Loans (1)
4,107,394
58,896
5.69
3,424,784
46,832
5.43
Total Earning Assets (1)
5,089,406
68,075
5.31
4,199,115
53,598
5.06
Allowance for Credit Losses
(41,602)
(34,143)
Cash and Due From Banks
40,281
33,984
Other Assets
319,050
200,859
Total Assets
$ 5,407,135
$ 4,399,815
Deposits:
Interest-Bearing Checking Accounts
$ 1,030,495
2,567
0.99
$ 848,622
2,160
1.01
Savings Deposits
1,819,689
9,472
2.07
1,492,204
9,534
2.53
Time Deposits over $250,000
235,470
1,612
2.72
177,826
1,695
3.78
Other Time Deposits
377,104
3,089
3.25
644,598
5,859
3.61
Total Interest-Bearing Deposits
3,462,758
16,740
1.92
3,163,250
19,248
2.41
Borrowings
234,103
2,230
3.78
5,583
—
—
Junior Subordinated Obligations Issued to
Unconsolidated Subsidiary Trusts
28,248
326
4.58
20,000
173
3.43
Finance Leases
4,874
46
3.74
4,956
46
3.68
Total Interest-Bearing Liabilities
3,729,983
19,342
2.06
3,193,789
19,467
2.42
Noninterest-Bearing Deposits
1,103,788
750,471
Other Liabilities
42,503
42,497
Total Liabilities
4,876,274
3,986,757
Stockholders' Equity
530,861
413,058
Total Liabilities and Stockholders' Equity
$ 5,407,135
$ 4,399,815
Net Interest Income
$ 48,733
$ 34,131
Net Interest Spread
3.25 %
2.64 %
Net Interest Margin
3.80 %
3.22 %
(1) Includes Nonaccrual Loans.
Arrow Financial Corporation
Average Consolidated Balance Sheets and Net Interest Income Analysis
(Dollars in Thousands - Unaudited)
Quarter Ended:
September 30, 2026
June 30, 2026
Interest
Rate
Interest
Rate
Average
Income/
Earned/
Average
Income/
Earned/
Balance
Expense
Paid
Balance
Expense
Paid
Interest-Earning Deposits at Banks
$ 211,383
$ 1,962
3.68 %
$ 129,628
$ 1,200
3.71 %
Investment Securities:
Fully Taxable
695,702
6,059
3.46
548,084
4,717
3.45
Exempt from Federal Taxes
74,927
1,158
6.13
66,687
519
3.12
Loans (1)
4,107,394
58,896
5.69
3,466,810
47,181
5.46
Total Earning Assets (1)
5,089,406
68,075
5.31
4,211,209
53,617
5.11
Allowance for Credit Losses
(41,602)
(34,305)
Cash and Due From Banks
40,281
29,874
Other Assets
319,050
219,043
Total Assets
$ 5,407,135
$ 4,425,821
Deposits:
Interest-Bearing Checking Accounts
$ 1,030,495
2,567
0.99
$ 827,385
2,162
1.05
Savings Deposits
1,819,689
9,472
2.07
1,596,055
8,933
2.24
Time Deposits over $250,000
235,470
1,612
2.72
139,256
1,052
3.03
Other Time Deposits
377,104
3,089
3.25
510,936
4,304
3.38
Total Interest-Bearing Deposits
3,462,758
16,740
1.92
3,073,632
16,451
2.15
Borrowings
234,103
2,230
3.78
124,411
1,019
3.29
Junior Subordinated Obligations Issued to
Unconsolidated Subsidiary Trusts
28,248
326
4.58
20,000
171
3.43
Finance Leases
4,874
46
3.74
4,896
45
3.69
Total Interest-Bearing Liabilities
3,729,983
19,342
2.06
3,222,939
17,686
2.20
Noninterest-Bearing Deposits
1,103,788
715,329
Other Liabilities
42,503
41,666
Total Liabilities
4,876,274
3,979,934
Stockholders' Equity
530,861
445,887
Total Liabilities and Stockholders' Equity
$ 5,407,135
$ 4,425,821
Net Interest Income
$ 48,733
$ 35,931
Net Interest Spread
3.25 %
2.91 %
Net Interest Margin
3.80 %
3.42 %
(1) Includes Nonaccrual Loans.
Arrow Financial Corporation
Average Consolidated Balance Sheets and Net Interest Income Analysis
(Dollars in Thousands - Unaudited)
Year to Date Period Ended:
September 30, 2026
September 30, 2025
Interest
Rate
Interest
Rate
Average
Income/
Earned/
Average
Income/
Earned/
Balance
Expense
Paid
Balance
Expense
Paid
Interest-Earning Deposits at Banks
$ 174,857
$ 4,837
3.70 %
$ 164,114
$ 5,488
4.47 %
Investment Securities:
Fully Taxable
593,943
15,305
3.45
502,075
11,464
3.05
Exempt from Federal Taxes
68,091
2,141
4.20
80,628
1,603
2.66
Loans (1)
3,674,013
153,203
5.58
3,415,401
136,982
5.36
Total Earning Assets (1)
4,510,904
175,486
5.20
4,162,218
155,537
5.00
Allowance for Credit Losses
(36,786)
(34,359)
Cash and Due From Banks
33,506
31,598
Other Assets
251,971
193,174
Total Assets
$ 4,759,595
$ 4,352,631
Deposits:
Interest-Bearing Checking Accounts
$ 906,273
6,829
1.01
$ 844,774
5,904
0.93
Savings Deposits
1,663,027
27,121
2.18
1,500,944
28,384
2.53
Time Deposits over $250,000
174,373
3,860
2.96
181,291
5,232
3.86
Other Time Deposits
507,870
12,829
3.38
625,557
17,181
3.67
Total Interest-Bearing Deposits
3,251,543
50,639
2.08
3,152,566
56,701
2.40
Borrowings
121,768
3,249
3.57
12,455
167
1.79
Junior Subordinated Obligations Issued to
Unconsolidated Subsidiary Trusts
22,780
666
3.91
20,000
513
3.43
Finance Leases
4,895
138
3.77
4,977
135
3.63
Total Interest-Bearing Liabilities
3,400,986
54,692
2.15
3,189,998
57,516
2.41
Noninterest-Bearing Deposits
845,547
710,404
Other Liabilities
40,859
44,203
Total Liabilities
4,287,392
3,944,605
Stockholders' Equity
472,203
408,026
Total Liabilities and Stockholders' Equity
$ 4,759,595
$ 4,352,631
Net Interest Income
$ 120,794
$ 98,021
Net Interest Spread
3.05 %
2.59 %
Net Interest Margin
3.58 %
3.15 %
(1) Includes Nonaccrual Loans.
Arrow Financial Corporation
Consolidated Financial Information
(Dollars in Thousands - Unaudited)
Quarter Ended:
9/30/2026
12/31/2025
Loan Portfolio
Commercial Loans
$ 256,574
$ 165,729
Commercial Real Estate Loans
1,068,892
818,259
Subtotal Commercial Loan Portfolio
1,325,466
983,988
Consumer Loans
1,100,061
1,076,007
Residential Real Estate Loans
1,719,060
1,393,098
Total Loans
$ 4,144,587
$ 3,453,093
Allowance for Credit Losses
Allowance for Credit Losses, Beginning of Quarter
$ 36,183
$ 34,176
Acquisition of Adirondack Bank
5,678
—
Loans Charged-off
(3,093)
(1,477)
Less Recoveries of Loans Previously Charged-off
896
777
Net Loans Charged-off
(2,197)
(700)
Provision for Credit Losses
1,467
846
Allowance for Credit Losses, End of Quarter
$ 41,131
$ 34,322
Nonperforming Assets
Nonaccrual Loans
$ 10,117
$ 6,415
Loans Past Due 90 or More Days and Accruing
2,382
2,040
Loans Restructured and in Compliance with Modified Terms
—
—
Total Nonperforming Loans
12,499
8,455
Repossessed Assets
231
280
Other Real Estate Owned
—
—
Total Nonperforming Assets
$ 12,730
$ 8,735
Key Asset Quality Ratios
Net Loans Charged-off to Average Loans,
Quarter-to-date Annualized
0.21 %
0.08 %
Provision for Credit Losses to Average Loans,
Quarter-to-date Annualized
0.14 %
0.10 %
Allowance for Credit Losses to Period-End Loans
0.99 %
0.99 %
Allowance for Credit Losses to Period-End Nonperforming Loans
329.07 %
405.94 %
Nonperforming Loans to Period-End Loans
0.30 %
0.24 %
Nonperforming Assets to Period-End Assets
0.23 %
0.20 %
Year-to-Date Period Ended:
9/30/2026
12/31/2025
Allowance for Credit Losses
Allowance for Credit Losses, Beginning of Year
$ 34,322
$ 33,598
Acquisition of Adirondack Bank
5,678
—
Loans Charged-off
(6,437)
(9,554)
Less Recoveries of Loans Previously Charged-off
2,726
3,004
Net Loans Charged-off
(3,711)
(6,550)
Provision for Credit Losses
4,842
7,274
Allowance for Credit Losses, End of Period
$ 41,131
$ 34,322
Key Asset Quality Ratios
Net Loans Charged-off to Average Loans, Annualized
0.14 %
0.19 %
Provision for Credit Losses to Average Loans, Annualized
0.18 %
0.21 %
SOURCE Arrow Financial Corporation