AROW

GLENS FALLS, N.Y., July 23, 2026 /PRNewswire/ -- Arrow Financial Corporation (NasdaqGS® – AROW) ("Arrow" or the "Company") announced financial results for the three-month period ended June 30, 2026. Reported net income for the second quarter of 2026 was $11.0 million and fully diluted earnings per share ("EPS") was $0.66, versus net income of $13.5 million and EPS of $0.82 for the first quarter of 2026. The Board of Directors of Arrow declared a quarterly cash dividend of $0.30 per share; payable August 25, 2026 to shareholders of record as of August 11, 2026. This quarter's results include approximately $1.0 million ($0.05 per share) of merger-related expenses related to the July 1, 2026 acquisition of Adirondack Bancorp, Inc. and Adirondack Bank based in Utica, New York. Excluding the merger-related expenses, Arrow achieved EPS of $0.71 for the second quarter of 2026. The transaction added approximately $1.0 billion in assets and 19 new branch locations. Second-quarter results were impacted by a specific reserve of $1.6 million ($0.08 per share) for an isolated commercial real estate credit due to a sudden personal and corporate bankruptcy declared in June 2026 (for more details on this credit, please refer to our Second Quarter Investor Presentation), as well as an elevated loan provision due to strong loan growth. This earnings release and related commentary should be read in conjunction with the Company's July 23, 2026 Form 8-K and related Second 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: "The Arrow team delivered another quarter of strong operating results. While our results were negatively impacted by recognizing a reserve on one isolated commercial credit, the credit metrics of the loan portfolio remain strong with low charge-offs and low non-performing loan balances. The overall health and trajectory of the business continues to perform well. I am particularly excited about the return to significant loan growth and the closing of our acquisition of Adirondack Bank, which will provide us with increased growth opportunities. We look forward to expanding our market with this high-quality, low-cost deposit franchise, adding approximately $1.0 billion to our balance sheet. We expect the transaction to provide significant EPS accretion in 2027 and beyond. Arrow remains well-positioned to deliver shareholder value and execute on its strategic initiatives to build a premier banking franchise for its customers and the communities it serves." Second-Quarter Highlights and Key Metrics Net Income of $11.0 million (EPS of $0.66; or $0.71 adjusted for merger-related expenses "MRE"1) Insurance revenue 1H26 versus 1H25 up 12.6% Wealth management revenue 1H26 versus 1H25 up 9.9% Loan growth of $57.6 million (6.7% annualized) Annualized charge-offs of 8bps and non-performing loans of 24bps Moved $3.8 million loan to non-performing (11bps) due to bankruptcy and recorded $1.6 million specific reserve ($0.08 per share) Efficiency ratio of 62.02%; 59.83% excluding MRE1 Net Interest Income of $35.9 million Net Interest Margin of 3.42% (3.43% fully taxable equivalent ("FTE")2), versus 3.47% (3.48% FTE2) in the prior quarter Return on Average Assets (ROA) of 0.99%; 1.06% adjusted for MRE1 Cost of retail deposits3 decreased to 1.61% Income Statement Net Income: Net income for the second quarter of 2026 was $11.0 million, decreasing from $13.5 million in the first quarter of 2026. Net Interest Income: Net interest income for the second quarter of 2026 was $35.9 million, decreasing 0.6% from the first quarter of 2026. Net Interest Margin: Net interest margin, on an FTE basis, for the second quarter of 2026 decreased to 3.43%, compared to 3.48% for the first quarter of 2026. The decrease in net interest margin compared to the first quarter of 2026 was primarily the result of a seasonal change in the deposit mix toward higher costing interest-bearing liabilities. Net interest margin was also impacted by the reversal of interest income related to the aforementioned commercial loan migrating to non-performing. Provision for Credit Losses: For the second quarter of 2026, the provision for credit losses was $2.8 million compared to $0.5 million in the first quarter of 2026, primarily driven by a $1.6 million specific reserve related to the non-performing commercial loan as well as an increase to the provision due to loan growth in the second quarter of 2026. Non-Interest Income: Non-interest income for the three months ended June 30, 2026, was $8.3 million, a decrease from $8.6 million in the first quarter of 2026. The decrease was the result of the season fluctuation of insurance premiums of $0.1 million as well as a $0.3 million charge related to the impairment of a property held for future use. This was partially offset by an increase in interchange fees from the linked quarter and a positive equity position valuation adjustment of approximately $0.2 million Non-Interest Expense: Non-interest expense for the second quarter of 2026 was $27.5 million, an increase from $26.9 million in the first quarter of 2026. The second quarter of 2026 included approximately $1.0 million of MRE versus $0.8 million in the first quarter of 2026. Provision for Income Taxes: The provision for income taxes and effective tax rate were $2.9 million and 21.1%, respectively for the second quarter of 2026, and $3.9 million and 22.3%, respectively for the first quarter of 2026. The lower tax expense was driven by lower pre-tax income and a lower effective tax rate. The effective tax rate for the second quarter of 2026 reflects the impact of tax credits recognized from energy production tax credit purchases made in June 2026 offset by nondeductible expenses related to the acquisition of Adirondack Bancorp, Inc. and Adirondack Bank. Balance Sheet Total Assets: Total assets were $4.5 billion at June 30, 2026, a decrease of $39.7 million, or 0.9%, as compared to March 31, 2026. For the second quarter of 2026, the overall change in asset was driven by a decline in cash balances attributable to a net decrease in deposits. Investments: Total investments were $587.9 million as of June 30, 2026, a decrease of $6.6 million, or 1.1%, compared to March 31, 2026. The decrease from March 31, 2026 was driven primarily by paydowns and maturities. There were no material credit quality issues related to the investment portfolio. Loans: Total loans were $3.5 billion as of June 30, 2026. Loans outstanding increased in the second quarter of 2026 by $57.6 million, driven by growth in commercial loans. Please see the loan detail included in the Consolidated Financial Information table on page 14. Allowance for Credit Losses: The allowance for credit losses was $36.2 million as of June 30, 2026, which represented 1.03% of loans outstanding, as compared to $34.1 million, or 0.99% of loans outstanding, at March 31, 2026. The increase in the allowance was the result of a $1.6 million specific reserve related to the previously referenced non-performing commercial loan as well as an increase to the allowance for growth in the loan portfolio, partially offset by charge-offs. Net charge-offs, expressed as an annualized percentage of average loans outstanding, were 0.08% for the three-month period ended June 30, 2026, as compared to 0.10% for the three-month period ended March 31, 2026. Nonperforming assets were $8.7 million as of June 30, 2026, representing 0.19% of period-end assets, an increase from $4.9 million, or 0.11%, at March 31, 2026. Nonperforming assets increased due to the $3.8 million non-performing commercial loan previously referenced. Deposits: At June 30, 2026, deposit balances were $3.7 billion, a decrease of $358.7 million from March 31, 2026. The change from March 31, 2026 was primarily attributable to $300 million of brokered CDs, being replaced by lower costing FHLB borrowings. In addition, the seasonality of municipal deposits contributed to decreased deposits in the quarter. Please refer to page 7 for further details related to deposits. Capital: Total stockholders' equity was $446.3 million at June 30, 2026, an increase of $6.2 million, or 1.4%, from March 31, 2026. The increase from March 31, 2026 was primarily attributable to net income of $11.0 million and other stock-based activity of $0.8 million offset by other comprehensive loss of $0.6 million and dividends of $5.0 million. Arrow's regulatory capital ratios remain strong. As of June 30, 2026, Arrow's Common Equity Tier 1 Capital Ratio was 13.21% and Total Risk-Based Capital Ratio was 14.98%. The capital ratios of Arrow and its subsidiary bank continued to exceed the "well capitalized" regulatory standards. Regulatory capital ratios are preliminary, subject to finalization as part of the current quarter Call Report. Additional Commentary BauerFinancial Ratings: Arrow Bank National Association ("Arrow Bank") received a 5-Star Superior rating from BauerFinancial, Inc., the nation's premier bank rating firm. Arrow Bank has earned this designation for 77 consecutive quarters, securing its prominent position as an "Exceptional Performance Bank." About Arrow: Arrow Financial Corporation is a holding company headquartered in Glens Falls, New York, serving the financial needs of northeastern New York. The Company is the parent of Arrow Bank, a full-service commercial bank, and Upstate Agency, LLC, a comprehensive insurance agency. Non-GAAP Financial Measures Reconciliation: In addition to presenting information in conformity with accounting principles generally accepted in the United States of America (GAAP), this news release contains financial information determined by methods other than GAAP (non-GAAP). The following measures used in this release, which are commonly utilized by financial institutions, have not been specifically exempted by the Securities and Exchange Commission ("SEC") and may constitute "non-GAAP financial measures" within the meaning of the SEC's rules: 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. 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GLENS FALLS, N.Y., April 30, 2026 /PRNewswire/ -- Arrow Financial Corporation (NasdaqGS® – AROW) ("Arrow" or the "Company") announced financial results for the three-month period ended March 31, 2026. Reported net income for the first quarter of 2026 was $13.5 million and fully diluted earnings per share ("EPS") was $0.82, versus net income of $14.0 million and EPS of $0.85 for the fourth quarter of 2025. The Board of Directors of Arrow declared a quarterly cash dividend of $0.30 per share; payable May 26, 2026 to shareholders of record as of May 12, 2026. This quarter's results include approximately $790 thousand ($0.03 per share) of non-core merger expenses related to the announced acquisition of Adirondack Bancorp, Inc. based in Utica, New York. Excluding the merger expenses, Arrow achieved record operating results of $0.85 for the first quarter of 2026. Pending regulatory approvals, the transaction is expected to close early in the third quarter of 2026 and will add approximately $950 million in assets and 19 new branch locations. This Earnings Release and related commentary should be read in conjunction with the Company's April 30, 2026 Form 8-K and related First 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: "As we celebrate our 175th anniversary, building on the strong year-end momentum, the Arrow team delivered exceptional financial results for the first quarter of 2026. We achieved strong net interest margin expansion as well as a return on average assets close to 1.30% on an operating basis. Credit performance was even better with non-performing loans dipping to 13 basis points. During the first quarter, we also announced the acquisition of Adirondack Bank, which is expected to close in the third quarter of 2026. We look forward to expanding our market with this high-quality, low-cost deposit franchise, adding approximately $950 million to our balance sheet. We expect the transaction to provide significant EPS accretion in 2027 and beyond. Arrow is well positioned to continue to deliver strong results for its shareholders while continuing to execute on its strategic initiatives to build a premier banking franchise for its customers and the communities it serves." First-Quarter Highlights and Key Metrics Net Income of $13.5 million (EPS of $0.82); $0.85 adjusted for merger-related expenses ("MRE")1 Efficiency ratio of 59.89%; 58.13% excluding MRE1 Net Interest Income of $36.1 million Net Interest Margin improved to 3.47% (3.48% FTE2), from 3.24% (3.25% FTE) in the prior quarter Return on Average Assets (ROA) of 1.23%; 1.29% adjusted for MRE1 Strong credit metrics: annualized charge-offs of 10bps and non-performing loans of 13bps Loan-to-Deposit ratio of 85.7% Cost of retail deposits3 decreased by 11bps to 1.62% from the prior quarter Income Statement Net Income: Net income for the first quarter of 2026 was $13.5 million, decreasing from $14.0 million in the fourth quarter of 2025. Compared to the prior quarter, net income decreased due to an increase in income tax expense of $1.1 million and an increase in non-interest expense of $1.1 million offset by an increase in net interest income of $1.0 million and an increase in non-interest income of $0.4 million. Net Interest Income: Net interest income for the first quarter of 2026 was $36.1 million, increasing 2.8% from the fourth quarter of 2025. Total interest and dividend income was $53.8 million for the first quarter of 2026, a decrease from $54.6 million in the fourth quarter of 2025. Interest expense for the first quarter of 2026 was $17.7 million, a decrease from $19.5 million in the fourth quarter of 2025. Net Interest Margin: Net interest margin, on an FTE basis, for the first quarter of 2026 increased to 3.48%, compared to 3.25% for the fourth quarter of 2025. The increase in net interest margin compared to the fourth quarter of 2025 was primarily the result of continued yield expansion on earning assets combined with the reduced cost of interest-bearing liabilities. Provision for Credit Losses: For the first quarter of 2026, the provision for credit losses was $548 thousand compared to $846 thousand in the fourth quarter of 2025, primarily driven by low net charge-offs and lower loan growth in the first quarter of 2026. Non-Interest Income: Non-interest income for the three months ended March 31, 2026, was $8.6 million, an increase from $8.3 million in the fourth quarter of 2025. Revenue related to wealth management was consistent with the prior quarter, while insurance commissions and interchange fees improved in the first quarter from the linked quarter. The first quarter of 2026 included a positive valuation adjustment related to an equity position. Non-Interest Expense: Non-interest expense for the first quarter of 2026 was $26.9 million, an increase from $25.8 million in the fourth quarter of 2025. The first quarter of 2026 included approximately $800 thousand of expenses related to the announced acquisition of Adirondack Bancorp, Inc. which is expected to close early in the third quarter of 2026. Provision for Income Taxes: The provision for income taxes and effective tax rate were $3.9 million and 22.3%, respectively for the first quarter of 2026, and $2.7 million and 22.2%, respectively for the fourth quarter of 2025. The effective tax rate does not reflect the anticipated implementation of certain tax strategies that are expected to lower the tax rate for the rest of 2026. Balance Sheet Total Assets: Total assets were $4.5 billion at March 31, 2026, an increase of $76.2 million, or 1.7%, as compared to December 31, 2025. For the first quarter of 2026, the overall change in the balance sheet was primarily attributable to the seasonal surge in municipal deposits. Investments: Total investments were $594.6 million as of March 31, 2026, an increase of $21.8 million, or 3.8%, compared to December 31, 2025. The increase from December 31, 2025 was driven primarily by $46 million of additional investments, partially offset by paydowns and maturities. There were no credit quality issues related to the investment portfolio. Loans: Total loans were $3.4 billion as of March 31, 2026. Loans outstanding decreased in the first quarter of 2026 by $14.1 million. Loan growth was negatively impacted by severe winter weather, which slowed indirect auto and residential loan originations. Volume is expected to rebound in the second quarter. Please see the loan detail included in the Consolidated Financial Information table on page 12. Allowance for Credit Losses: The allowance for credit losses was $34.1 million as of March 31, 2026, which represented 0.99% of loans outstanding, as compared to $34.3 million, or 0.99% of loans outstanding, at December 31, 2025. Net charge-offs, expressed as an annualized percentage of average loans outstanding, were 0.10% for the three-month period ended March 31, 2026, as compared to 0.08% for the three-month period ended December 31, 2025. Nonperforming assets were $5.1 million as of March 31, 2026, representing 0.11% of period-end assets, a decrease from $8.7 million, or 0.20%, at December 31, 2025. Nonperforming assets decreased to the payoff of a $2.6 million nonperforming loan in the first quarter. Deposits: At March 31, 2026, deposit balances were $4.0 billion, an increase of $74.5 million from December 31, 2025. The change from December 31, 2025 was primarily attributable to the seasonality of municipal deposits. Please refer to page 6 for further details related to deposits. Capital: Total stockholders' equity was $440.1 million at March 31, 2026, an increase of $8.3 million, or 1.9%, from December 31, 2025. The increase from December 31, 2025 was primarily attributable to net income of $13.5 million offset by other comprehensive loss of $0.7 million and dividends of $5.0 million and other stock-based activity. Arrow's regulatory capital ratios remain strong. As of March 31, 2026, Arrow's Common Equity Tier 1 Capital Ratio was 13.30% and Total Risk-Based Capital Ratio was 15.04%. The capital ratios of Arrow and its subsidiary bank continued to exceed the "well capitalized" regulatory standards. Regulatory capital ratios are preliminary, subject to finalization as part of the current quarter Call Report. Additional Commentary BauerFinancial Ratings: Arrow Bank National Association ("Arrow Bank") received a 5-Star Superior rating from BauerFinancial, Inc., the nation's premier bank rating firm. Arrow Bank has earned this designation for 76 consecutive quarters, securing its prominent position as an "Exceptional Performance Bank." —————— About Arrow: Arrow Financial Corporation is a holding company headquartered in Glens Falls, New York, serving the financial needs of northeastern New York. The Company is the parent of Arrow Bank, a full-service commercial bank, and Upstate Agency, LLC, a comprehensive insurance agency. Non-GAAP Financial Measures Reconciliation: In addition to presenting information in conformity with accounting principles generally accepted in the United States of America (GAAP), this news release contains financial information determined by methods other than GAAP (non-GAAP). The following measures used in this release, which are commonly utilized by financial institutions, have not been specifically exempted by the Securities and Exchange Commission ("SEC") and may constitute "non-GAAP financial measures" within the meaning of the SEC's rules. Certain non-GAAP financial measures include: tangible book value, tangible equity, return on tangible equity, tax-equivalent adjustment and related net interest income, tax-equivalent net interest margin and the efficiency ratio. Management believes that the non-GAAP financial measures disclosed by Arrow from time to time are useful in evaluating Arrow's performance and that such information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance 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 the Arrow's growth, competition, changes in law or the regulatory environment, risks relating to the announced merger with Adirondack Bancorp, Inc. 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. View original content to download multimedia:https://www.prnewswire.com/news-releases/arrow-reports-1st-quarter-net-income-of-13-5-million-or-0-82-per-share-and-declares-2nd-quarter-dividend-of-0-30-per-share-302758152.html

GLENS FALLS, N.Y., Jan. 29, 2026 /PRNewswire/ -- Arrow Financial Corporation (NasdaqGS® – AROW) ("Arrow") reported net income of $14.0 million, and fully diluted earnings per share ("EPS") of $0.85 for the fourth quarter of 2025, versus $4.5 million and EPS of $0.27, for the same period in 2024. For the year ended December 31, 2025, net income totaled $44.0 million, with EPS of $2.65, versus $29.7 million, and EPS of $1.77, for the prior year. The Board of Directors of Arrow declared a quarterly cash dividend of $0.30 per share payable February 25, 2026 to shareholders of record as of February 11, 2026. This represents a 3.4% increase from the fourth quarter cash dividend, of $0.29 per share. This Earnings Release and related commentary should be read in conjunction with our Form 8-K filed January 29, 2026 and related Fourth Quarter 2025 Investor Presentation, which can be found on our website: arrowfinancial.com/documents/investor-presentations. Arrow President and CEO David S. DeMarco: "Arrow finished the year by delivering fourth quarter record operating results with record net income of $14 million or $0.85 per share. For the year, Arrow is reporting strong net interest margin expansion, reaching a record 3.19%, and tangible book value growth of over 10%. Return on average assets exceeded 1.20%. Our outstanding team was able to deliver such exceptional results and continue executing on our strategic plan after recently completing the system integration of our former two subsidiary banks transforming Arrow Bank. Our strategy has enabled us to grow EPS 50% in 2025 as we enter 2026 with significant momentum and begin celebrating our 175th anniversary, we look forward to another strong year." Fourth Quarter Highlights and Key Metrics Reported Record Net Income of $14.0 million or $0.85 EPS Record Net Interest Income of $35.1 million Record Net Interest Margin of 3.24% (3.25% FTE1) versus 3.22% (3.24% FTE) in the prior quarter Elevated average municipal deposits negatively impacted FTE NIM by 4bps Tangible Book Value2 per share of $24.71, an increase from $23.85 or 3.6% from the prior quarter Return on Average Assets of 1.24%, favorably impacted by 9bps from the successful implementation of tax strategies Net Charge-Offs remained low at 0.08% (annualized) for the quarter Select 2025 Highlights and Key Metrics Reported Net Income of $44.0 million or $2.65 EPS Record Net Interest Margin improved to 3.17% (3.19% FTE3), up from 2.72% (2.74% FTE) in the prior year Tangible Book Value4 per share of $24.71, an increase from $22.40 or 10.3% from the prior year Return on Average Assets of 1.00% Net Charge-Offs were 0.19% for the year Income Statement Net Income: Net income for the fourth quarter of 2025 was $14.0 million, increasing from $12.8 million in the third quarter of 2025. Net income for 2025 was $44.0 million, up from $29.7 million for 2024. Compared to the prior quarter, net income benefited from an increase of $1.0 million in net interest income, as interest expense remained flat to the previous quarter. During the fourth quarter of 2025, the Company successfully implemented tax planning strategies that lowered the effective tax rate versus the prior reported quarter. Compared to the prior year, the increase in net income was primarily the result of an increase in net interest income of $21.4 million as well as an increase in non-interest income of $4.4 million offset by an increase of non-interest expense of $5.7 million and a $2.1 million increase in the provision for credit losses. Net Interest Income: Net interest income for the fourth quarter of 2025 was $35.1 million, an increase of $1.0 million compared to the third quarter of 2025. Net interest income for the year ended December 31, 2025 was $133.2 million, an increase of $21.4 million, or 19.2%, from the prior year. Compared to the prior quarter, interest income increased $1.0 million while interest expense remained unchanged as a result of seasonally lower deposit balances and continued pricing discipline. Compared to the prior year, the increase was primarily due to the combination of increased interest income and decreased interest expense. Interest and fees on loans were $184.1 million for the year ended December 31, 2025, an increase of 7.4% from the $171.3 million for the year ended December 31, 2024. The increase was primarily driven by loan growth and higher loan rates. Interest expense for the year ended December 31, 2025 was $77.0 million. This represents a decrease of $6.3 million, or 7.5%, from the $83.3 million in interest expense for the prior year. The decrease in the interest expense was driven primarily by lower deposit rates and changes in deposit composition. Net Interest Margin: In the fourth quarter of 2025, the net interest margin was 3.24% (3.25% FTE), as compared to 3.22% (3.24% FTE) for the third quarter of 2025. Net interest margin was 3.17% (3.19% FTE) for the year ended December 31, 2025, as compared to 2.72% (2.74% FTE) for the year ended December 31, 2024. The increase in net interest margin compared to the third quarter of 2025 as well as the prior year was primarily the result of continued yield expansion on earning assets combined with the reduced cost of interest-bearing liabilities. Provision for Credit Losses: For the year ended December 31, 2025, the provision for credit losses related to the loan portfolio was $7.3 million, compared to $5.2 million in the prior year. The key drivers for the increase in provision for credit losses for 2025 were primarily the charge-off of the previously disclosed commercial loan participation in the second quarter of 2025 and overall loan growth. Non-Interest Income: Non-interest income was $8.3 million for the fourth quarter of 2025, a decrease from $8.7 million for the previous quarter. Non-interest income was $32.4 million for the year ended December 31, 2025, an increase of 15.5%, as compared to $28.1 million for the year ended December 31, 2024. The decrease from the prior quarter was primarily driven by a positive valuation adjustment related to an equity position recorded in the third quarter. The increase in non-interest income from the previous year was primarily driven by a 2024 net loss on securities from the repositioning of the investment portfolio as well as increases in 2025 revenue related to wealth management, insurance and interchange fees. Non-Interest Expense: Non-interest expense was $25.8 million for the fourth quarter of 2025, consistent with the fourth quarter of 2024. Non-interest expense for the year ended December 31, 2025 increased by $5.7 million, or 5.8%, to $102.9 million, as compared to $97.3 million in 2024. The largest component of non-interest expense is salaries and benefits paid to our employees, which totaled $56.3 million in 2025 and increased $3.6 million, or 6.8%, from the prior year. Salaries and benefits were impacted by inflation-driven wage increases and rising benefit costs. Provision for Income Taxes: The provision for income taxes for 2025 was $11.4 million, compared to $7.6 million for 2024. The effective income tax rates for 2025 and 2024 were 20.6% and 20.5%, respectively. Balance Sheet Total Assets: Total assets were $4.4 billion at December 31, 2025, an increase of $139.5 million, or 3.2%, compared to December 31, 2024 and a decrease of $141.3 million, or 3.1%, from September 30, 2025. The increase over the prior year end was primarily driven by loan growth and an overall increase in deposits. The decrease in cash balances in the fourth quarter was primarily driven by the seasonal decrease of municipal deposit balances as of December 31, 2025. Investments: Total investments were $572.8 million at December 31, 2025, an increase of $2.0 million, or 0.4%, compared to December 31, 2024. The increase reflected the reinvestment of the cash generated from paydowns and maturities of investments into higher yielding investments. There were no credit quality issues related to the investment portfolio. Loans: At December 31, 2025, total loan balances reached $3.5 billion. Loan growth for the fourth quarter was $11 million. Loan growth for the year was $59 million or 1.7%. Please see the loan detail included in the Consolidated Financial Information table. Allowance for Credit Losses: The allowance for credit losses was $34.3 million at December 31, 2025, an increase of $0.7 million from December 31, 2024. The allowance for credit losses at December 31, 2025 represented 0.99% of loans outstanding, unchanged from 0.99% at year end 2024. Asset quality remained strong at December 31, 2025. Net loan charge-offs, expressed as an annualized percentage of average loans outstanding, were 0.19% for the year ended December 31, 2025, as compared to 0.09% for the prior year. The increase was the result of a charge-off of a previously reserved commercial loan participation in the second quarter of 2025. Nonperforming assets of $8.7 million at December 31, 2025, represented 0.20% of year end assets, compared to $21.5 million or 0.50% at December 31, 2024. Deposits: At December 31, 2025, total deposit balances were $3.9 billion, an increase of $111.5 million, or 2.9%, from the prior-year end level. Deposits decreased in the fourth quarter by $160.6 million. The decrease in the fourth quarter was primarily driven by the seasonality of municipal deposits. Non-municipal deposits, excluding brokered CDs, increased by $131.6 million and municipal deposits decreased by $20.1 million, each as compared to December 31, 2024. Non-interest bearing deposits increased by $19.4 million, or 2.8%, during 2025. At December 31, 2025, total time deposits, excluding brokered CDs, increased $3.2 million from the prior-year end level. Capital: Total shareholders' equity was $431.9 million at December 31, 2025, an increase of $31.0 million, or 7.7%, from December 31, 2024 and an increase of $14.2 million in the fourth quarter. The increase from the third quarter was primarily attributable to net income of $14.0 million, other comprehensive income of $4.6 million and various capital items of $0.5 million, partially offset by dividends of $4.8 million. The increase in stockholders' equity from December 31, 2024 was primarily attributable to net income of $44.0 million, other comprehensive income of $14.4 million and various capital items of $1.7 million partially offset by dividends of $18.9 million and stock repurchases of $9.9 million. The change to other comprehensive income is primarily attributable to fair value adjustments on the available for sale investment portfolio. Arrow's regulatory capital ratios remained strong in 2025. At December 31, 2025, Arrow's Common Equity Tier 1 Capital Ratio was 13.10% and Total Risk-Based Capital Ratio was 14.86%. The capital ratios of Arrow and its subsidiary bank, Arrow Bank, continued to significantly exceed the "well capitalized" regulatory standards. Additional Commentary BauerFinancial Ratings: Arrow Bank National Association ("Arrow Bank") received a 5-Star Superior rating from BauerFinancial, Inc., the nation's premier bank rating firm. Arrow Bank has earned this designation for 75 consecutive quarters, securing its prominent position as an "Exceptional Performance Bank." About Arrow: Arrow Financial Corporation is a holding company headquartered in Glens Falls, New York, serving the financial needs of northeastern New York. The Company is the parent of Arrow Bank, a full-service commercial bank, and Upstate Agency, LLC, a comprehensive insurance agency. Non-GAAP Financial Measures Reconciliation: In addition to presenting information in conformity with accounting principles generally accepted in the United States of America (GAAP), this news release contains financial information determined by methods other than GAAP (non-GAAP). The following measures used in this release, which are commonly utilized by financial institutions, have not been specifically exempted by the Securities and Exchange Commission ("SEC") and may constitute "non-GAAP financial measures" within the meaning of the SEC's rules. Certain non-GAAP financial measures include: tangible book value, tangible equity, return on tangible equity, tax-equivalent adjustment and related net interest income, tax-equivalent net interest margin and the efficiency ratio. Management believes that the non-GAAP financial measures disclosed by Arrow from time to time are useful in evaluating Arrow's performance and that such information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance 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 titled "Selected Quarterly Information." Safe Harbor Statement: The information contained in this earnings release may contain statements that are not historical in nature but rather are based on management's beliefs, assumptions, expectations, estimates and projections about the future. These statements can sometimes be identified by Arrow's use of forward-looking words such as "may," "will," "anticipate," "estimate," "expect," or "intend." These statements may be "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, involving a degree of uncertainty and attendant risk. In the case of all forward-looking statements, actual outcomes and results may differ materially from what the statements predict or forecast, explicitly or by implication because of various factors, including changes in economic conditions or interest rates, credit risk, inflation, tariffs, cybersecurity risks, changes in FDIC assessments, bank failures, difficulties in managing the Arrow's growth, competition, changes in law or the regulatory environment, and changes in general business and economic trends. Arrow undertakes no obligation to revise or update these forward-looking statements to reflect the occurrence of unanticipated events. This earnings release should be read in conjunction with Arrow's Annual Report on Form 10-K for the year ended December 31, 2024, and other filings with the SEC. View original content to download multimedia:https://www.prnewswire.com/news-releases/arrow-reports-4th-quarter-net-income-of-14-0-million-or-0-85-per-share-and-44-0-million-or-2-65-per-share-for-2025-declares-1st-quarter-dividend-of-0-30-per-share-302673535.html

GLENS FALLS, N.Y., Oct. 30, 2025 /PRNewswire/ -- Arrow Financial Corporation (NasdaqGS® – AROW) ("Arrow" or "the Company") announced financial results for the three-month period ended September 30, 2025. Reported net income for the third quarter of 2025 was $12.8 million and fully diluted earnings per share ("EPS") was $0.77, versus net income of $10.8 million and EPS of $0.65 for the second quarter of 2025. The Board of Directors of Arrow declared a quarterly cash dividend of $0.29 per share; payable November 24, 2025 to shareholders of record as of November 12, 2025. This quarter's results include approximately $600 thousand ($0.03 per share) of non-core unification costs related to Arrow's system conversion and operational merger of its two banking subsidiaries, which were successfully completed in July 2025. Arrow does not expect to incur additional costs related to the unification effort. This Earnings Release and related commentary should be read in conjunction with the Company's October 30, 2025 Form 8-K and related Third Quarter 2025 Investor Presentation, which can also be found on Arrow's website: arrowfinancial.com/documents/investor-presentations. Arrow President and CEO David S. DeMarco: "I am proud to report that on the heels of our unification effort, the Arrow team delivered a great financial quarter. EPS increased by almost 20% from the prior quarter and ROA improved by 16 bps to 1.16%, despite recognizing the last remaining unification expenses. Our third quarter delivered record net interest income, solid net interest margin expansion and more than 10% annualized growth in tangible book value. With the Federal Reserve enacting a first round of interest rate cuts late in the third quarter and again in late October, Arrow is well-positioned with our near-term liability sensitive balance sheet to deliver another great quarter to end the year. We are delighted that we can use our improved financial performance to continue to support our communities while delivering strong results to our shareholders." Third-Quarter Highlights and Key Metrics Net Income of $12.8 million (EPS of $0.77) Record Net Interest Income of $34.1 million Net Interest Margin improved to 3.22% (3.24% FTE1), from 3.15% (3.16% FTE1) in the prior quarter Return on Average Assets (ROA) improved to 1.16%, an increase from 1.00% for the prior quarter Loan-to-Deposit ratio of 84.0% Quarter-end loan exit rates2 increased to 5.56% at September 30, 2025 vs. 5.51% at June 30, 2025 Cost of retail deposits3 decreased by 9 bps to 1.68% from the prior quarter Approximately $2 billion of deposits subject to repricing with additional federal reserve rate cuts Tangible Book Value per share increased to $23.85, an increase of 2.7% from the prior quarter Repurchased $1.4 million of shares (52,947 shares at an average cost of $26.87 per share) $5.1 million remaining under current repurchase authorization Recently received preliminary court approval of the negotiated settlement in the Shareholder Derivative Complaint described in previous SEC filings. The preliminary approval has no material financial impact to the results of operations or financial position. Income Statement Net Income: Net income for the third quarter of 2025 was $12.8 million, increasing from $10.8 million in the second quarter of 2025. Compared to the prior quarter, net income benefited from an increase of $1.6 million in net interest income, an increase in non-interest income of $1.1 million and a slight decrease in non-interest expense of $0.2 million. Net Interest Income: Net interest income for the third quarter of 2025 was $34.1 million, increasing 4.9% from the second quarter of 2025. Total interest and dividend income was $53.6 million for the third quarter of 2025, an increase from $51.6 million in the second quarter of 2025. Interest expense for the third quarter of 2025 was $19.5 million, an increase from $19.0 million in the second quarter of 2025. Net Interest Margin: Net interest margin, on an FTE basis, for the third quarter of 2025 increased to 3.24%, compared to 3.16% for the second quarter of 2025. The increase in net interest margin compared to the second quarter of 2025 was primarily the result of continued yield expansion on earning assets combined with the stabilizing cost of interest-bearing liabilities. Provision for Credit Losses: For the third quarter of 2025, the provision for credit losses was $815 thousand compared to $594 thousand in the second quarter of 2025, primarily driven by third quarter 2025 charge-offs. Non-Interest Income: Non-interest income for the three months ended September 30, 2025, was $8.7 million, an increase from $7.6 million in the second quarter of 2025. Revenue related to wealth management increased from the prior quarter as a result of overall market performance. Interchange fees improved in the third quarter from the linked quarter. The third quarter of 2025 included a positive valuation adjustment related to an equity position. Non-Interest Expense: Non-interest expense for the third quarter of 2025 was $25.4 million, a decrease from $25.7 million in the second quarter of 2025. The third quarter of 2025 included unification expenses of approximately $600 thousand as compared to $1.1 million in the second quarter of 2025. The unification expenses were primarily comprised of project management and information technology costs related to the July 2025 system conversion. Arrow continues to focus on overall expense control. Provision for Income Taxes: The provision for income taxes and effective tax rate were $3.8 million and 22.7%, respectively for the third quarter of 2025, and $3.1 million and 22.4%, respectively for the second quarter of 2025. Balance Sheet Total Assets: Total assets were $4.6 billion at September 30, 2025, an increase of $172.4 million, or 3.9%, as compared to June 30, 2025. For the third quarter of 2025, the overall change in the balance sheet was primarily attributable to the seasonal surge in municipal deposits as well as fluctuations in cash balances, maturities of investments and growth in the loan portfolio. Investments: Total investments were $558.4 million as of September 30, 2025, an increase of $30.0 million, or 5.7%, compared to June 30, 2025. The increase from June 30, 2025 was driven primarily by $48 million of additional investments offset by paydowns and maturities. There were no credit quality issues related to the investment portfolio.] Loans4: Total loans were $3.4 billion as of September 30, 2025. Loan growth for the third quarter of 2025 was $17.3 million. Loan growth was primarily driven by an increase in residential real estate loans and commercial loans. Please see the loan detail included in the Consolidated Financial Information table on page 12. Allowance for Credit Losses: The allowance for credit losses was $34.2 million as of September 30, 2025, which represented 0.99% of loans outstanding, as compared to $34.2 million, or 1.00% of loans outstanding, at June 30, 2025. Net charge-offs, expressed as an annualized percentage of average loans outstanding, were 0.10% for the three-month period ended September 30, 2025, as compared to 0.49% for the three-month period ended June 30, 2025. The decrease was the result of a charge-off of a previously reserved commercial loan participation in the second quarter of 2025. Nonperforming assets were $6.7 million as of September 30, 2025, representing 0.15% of period-end assets, compared to $6.8 million, or 0.15%, at June 30, 2025. Deposits: At September 30, 2025, deposit balances were $4.1 billion, an increase of $170.7 million from June 30, 2025. The change from June 30, 2025 was primarily attributable to the seasonality of municipal deposits. Please refer to page 6 for further details related to deposits. Capital: Total stockholders' equity was $417.7 million at September 30, 2025, an increase of $9.2 million, or 2.2%, from June 30, 2025. The increase from June 30, 2025 was primarily attributable to net income of $12.8 million and other comprehensive income of $2.2 million offset by dividends of $4.8 million and share repurchases of $1.4 million and other stock-based activity. Arrow's regulatory capital ratios remain strong. As of September 30, 2025, Arrow's Common Equity Tier 1 Capital Ratio was 13.07% and Total Risk-Based Capital Ratio was 14.86%. Regulatory capital ratios are preliminary, subject to finalization as part of the current quarter Call Report. The capital ratios of Arrow and its subsidiary bank continued to exceed the "well capitalized" regulatory standards. Additional Commentary BauerFinancial Ratings: Arrow Bank National Association ("Arrow Bank") received a 5-Star Superior rating from BauerFinancial, Inc., the nation's premier bank rating firm. Arrow Bank has earned this designation for 74 consecutive quarters, securing its prominent position as an "Exceptional Performance Bank." About Arrow: Arrow Financial Corporation is a holding company headquartered in Glens Falls, New York, serving the financial needs of northeastern New York. The Company is the parent of Arrow Bank, a full-service commercial bank, and Upstate Agency, LLC, a comprehensive insurance agency. Non-GAAP Financial Measures Reconciliation: In addition to presenting information in conformity with accounting principles generally accepted in the United States of America (GAAP), this news release contains financial information determined by methods other than GAAP (non-GAAP). The following measures used in this release, which are commonly utilized by financial institutions, have not been specifically exempted by the Securities and Exchange Commission ("SEC") and may constitute "non-GAAP financial measures" within the meaning of the SEC's rules. Certain non-GAAP financial measures include: tangible book value, tangible equity, return on tangible equity, tax-equivalent adjustment and related net interest income, tax-equivalent net interest margin and the efficiency ratio. Management believes that the non-GAAP financial measures disclosed by Arrow from time to time are useful in evaluating Arrow's performance and that such information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance 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, difficulties in managing the Arrow's growth, competition, changes in law or the regulatory environment, and changes in general business and economic trends. Arrow undertakes no obligation to revise or update these forward-looking statements to reflect the occurrence of unanticipated events. This earnings release should be read in conjunction with Arrow's Annual Report on Form 10-K for the year ended December 31, 2024, and other filings with the SEC. 1 FTE Net interest margin is a non-GAAP measure. See reconciliation on Note 2 to the Selected Quarterly Information. 2 The "loan exit rate" is the point in time interest rate in effect at the end of the reporting period. 3 Retail deposits exclude wholesale funding sources 4 Excludes $3.0 million and $3.2 million fair value hedge adjustments at September 30, 2025 and June 30, 2025, respectively. View original content to download multimedia:https://www.prnewswire.com/news-releases/arrow-reports-3rd-quarter-net-income-of-12-8-million-or-0-77-per-share-and-declares-4th-quarter-dividend-of-0-29-per-share-302599409.html

GLENS FALLS, N.Y., July 24, 2025 /PRNewswire/ -- Arrow Financial Corporation (NasdaqGS® – AROW) ("Arrow" or "the Company") announced financial results for the three-month period ended June 30, 2025. Reported net income for the second quarter of 2025 was $10.8 million and fully diluted earnings per share ("EPS") was $0.65, versus net income of $6.3 million and EPS of $0.38 for the first quarter of 2025. The Board of Directors of Arrow declared a quarterly cash dividend of $0.29 per share, an increase of $0.01 or 3.6% from the prior quarter, payable August 25, 2025 to shareholders of record as of August 11, 2025. This quarter's results include approximately $1.1 million ($0.05 per share) of non-core unification costs related to Arrow's system conversion and operational merger of its two banking subsidiaries, which were successfully completed in July 2025. This Earnings Release and related commentary should be read in conjunction with the Company's July 24, 2025 Form 8-K and related Second Quarter 2025 Investor Presentation, which can also be found on Arrow's website: arrowfinancial.com/documents/investor-presentations. Arrow President and CEO David S. DeMarco: "We delivered strong second-quarter results, including return on average assets reaching 1.00%, with net interest margin and other key metrics approaching our strong historic levels. Simultaneously, we recently successfully completed our bank unification by consolidating our multi-bank systems and bank software applications into a single core banking platform, the last major milestone in our rebrand to Arrow Bank. This was an important step on our path toward improving customer experience and gaining operational efficiencies, further solidifying our position as a premier community bank under a strong, single recognizable brand. Our amazing team worked incredibly hard to make this transition as easy as possible for our customers, and I want to extend my deepest appreciation for their unwavering commitment and care. As we look ahead, Arrow is poised to advance our strategic priorities and continue to deliver value for our communities and shareholders." Second-Quarter Highlights and Key Metrics Net Income of $10.8 million (EPS of $0.65) Record Net Interest Income of $32.5 million Net Interest Margin improved to 3.15% (3.16% FTE1), up from 3.07% (3.08% FTE) in the prior quarter Return on Average Assets (ROA) improved to 1.00% Excluding unification related expenses, ROA was 1.08% Loan-to-Deposit ratio of 87.2% Quarter-end loan exit rates2 increased to 5.51% at June 30, 2025 vs. 5.45% at March 31, 2025 Tangible Book Value per share increased to $23.23 Repurchased $5.1 million of shares (196,497 shares at an average cost of $26.06 per share) Additional $5.0 million authorized for potential future share repurchases Income Statement Net Income: Net income for the second quarter of 2025 was $10.8 million, increasing from $6.3 million in the first quarter of 2025. Compared to the prior quarter, net income benefited from an increase of $1.2 million in net interest income, a decrease in the provision for credit losses of $4.4 million and a slight decrease in non-interest expense of $0.4 million. Net Interest Income: Net interest income for the second quarter of 2025 was $32.5 million, increasing 3.8% from the first quarter of 2025. Total interest and dividend income was $51.6 million for the second quarter of 2025, an increase from $50.4 million in the first quarter of 2025. Interest expense for the second quarter of 2025 was $19.0 million, consistent with the first quarter of 2025. Net Interest Margin: Net interest margin, on an FTE basis, for the second quarter of 2025 increased to 3.16%, compared to 3.08% for the first quarter of 2025. The increase in net interest margin compared to the first quarter of 2025 was primarily the result of continued yield expansion on earning assets combined with the moderating cost of interest-bearing liabilities. Provision for Credit Losses: For the second quarter of 2025, the provision for credit losses was $0.6 million compared to $5.0 million in the first quarter of 2025. The sizeable quarter-over-quarter decrease in the second quarter provision reflects the recognition of a specific reserve on a large commercial loan participation in the first quarter of 2025. Non-Interest Income: Non-interest income for the three months ended June 30, 2025, was $7.6 million, a decrease from $7.8 million in the first quarter of 2025. Revenue related to wealth management decreased from the prior quarter as a result of weaker overall market performance. Interchange fees improved in the second quarter from the linked quarter. Other operating income was negatively affected by small valuation adjustments to other assets. Non-Interest Expense: Non-interest expense for the second quarter of 2025 was $25.7 million, a decrease from $26.0 million in the first quarter of 2025. The second quarter of 2025 included unification expenses of approximately $1.1 million as compared to $0.6 million in the first quarter of 2025. The unification expenses were primarily comprised of project management and information technology costs related to the July 2025 system conversion. Arrow continues to focus on overall expense management. Provision for Income Taxes: The provision for income taxes and effective tax rate were $3.1 million and 22.2%, respectively, for the second quarter of 2025, and $1.8 million and 22.4%, respectively, for the first quarter of 2025. Balance Sheet Total Assets: Total assets were $4.4 billion at June 30, 2025, a decrease of $34.2 million, or 0.8%, as compared to March 31, 2025. For the second quarter of 2025, overall change in the balance sheet was primarily attributable to fluctuations in cash balances, maturities of investments and growth in the loan portfolio. Investments: Total investments were $528.4 million as of June 30, 2025, a decrease of $24.6 million, or 4.4%, compared to March 31, 2025. The decrease from March 31, 2025 was driven primarily by paydowns and maturities. There were no credit quality issues related to the investment portfolio. • Loans3: Total loans were $3.4 billion as of June 30, 2025. Loan growth for the second quarter of 2025 was $7.9 million. Loan growth was primarily driven by an increase in residential real estate loans and to a lesser extent by commercial loan relationships. Please see the loan detail included in the Consolidated Financial Information table on page 12. Allowance for Credit Losses: The allowance for credit losses was $34.2 million as of June 30, 2025, which represented 1.00% of loans outstanding, as compared to $37.8 million, or 1.11%, at March 31, 2025. The decrease in the allowance for credit losses was primarily driven by the recognition of a specific reserve of $3.75 million in the first quarter of 2025 and subsequent charge-off of the reserved loan balances during the second quarter. The remaining loan balance has been reclassified to Other Assets after the participating banks assumed control of the collateral properties and appointed a property manager to manage the day-to-day activities while exploring further options. The properties itself are being held in an unconsolidated LLC in which Arrow has an ownership interest equivalent to its rights under the former loan participation. As previously disclosed, the properties are generating positive cash flow and a majority is tenant occupied. Net charge-offs, expressed as an annualized percentage of average loans outstanding, were 0.49% for the three-month period ended June 30, 2025, as compared to 0.10% for the three-month period ended March 31, 2025. The increase was the result of the charge-off of the previously reserved commercial loan participation. Nonperforming assets were $7.0 million as of June 30, 2025, representing 0.16% of period-end assets, compared to 0.44% at March 31, 2025. Deposits: At June 30, 2025, deposit balances were $3.9 billion, a decrease of $38.8 million from March 31, 2025. The change from March 31, 2025 was primarily attributable to the seasonality of municipal deposits. Please refer to page 7 for further details related to deposits. Capital: Total stockholders' equity was $408.5 million at June 30, 2025, an increase of $4.1 million, or 1.0%, from March 31, 2025. The increase from March 31, 2025 was primarily attributable to net income of $10.8 million and other comprehensive income of $2.6 million offset by dividends of $4.7 million and share repurchases of $5.1 million and other stock-based activity. Arrow's regulatory capital ratios remain strong. As of June 30, 2025, Arrow's Common Equity Tier 1 Capital Ratio was 12.73% and Total Risk-Based Capital Ratio was 14.51%. Regulatory capital ratios are estimated, subject to finalization as part of the current quarter Call Report. The capital ratios of Arrow and its subsidiary bank continued to exceed the "well capitalized" regulatory standards. Additional Commentary BauerFinancial Ratings: Arrow Bank National Association ("Arrow Bank") received a 5-Star Superior rating from BauerFinancial, Inc., the nation's premier bank rating firm. Arrow Bank has earned this designation for 73 consecutive quarters, securing its prominent position as an "Exceptional Performance Bank." About Arrow: Arrow Financial Corporation is a holding company headquartered in Glens Falls, New York, serving the financial needs of northeastern New York. The Company is the parent of Arrow Bank, a full-service commercial bank, and Upstate Agency, LLC, a comprehensive insurance agency. Other subsidiaries include 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). The following measures used in this release, which are commonly utilized by financial institutions, have not been specifically exempted by the Securities and Exchange Commission ("SEC") and may constitute "non-GAAP financial measures" within the meaning of the SEC's rules. Certain non-GAAP financial measures include: tangible book value, tangible equity, return on tangible equity, tax-equivalent adjustment and related net interest income, tax-equivalent net interest margin and the efficiency ratio. Management believes that the non-GAAP financial measures disclosed by Arrow from time to time are useful in evaluating Arrow's performance and that such information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance 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 news 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 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. Arrow undertakes no obligation to revise or update these forward-looking statements to reflect the occurrence of unanticipated events. This News Release should be read in conjunction with Arrow's Annual Report on Form 10-K for the year ended December 31, 2024, and other filings with the SEC. 1 FTE Net interest margin is a non-GAAP measure. See reconciliation on Note 3 to the Selected Quarterly Information. 2 The "loan exit rate" is the point in time interest rate in effect at the end of the reporting period. 3 Excludes both $3.2 million fair value hedge adjustment at June 30, 2025 and $3.3 million fair value hedge adjustment at March 31, 2025. View original content to download multimedia:https://www.prnewswire.com/news-releases/arrow-reports-2nd-quarter-net-income-of-10-8-million-or-0-65-per-share-and-declares-3rd-quarter-dividend-of-0-29-per-share-302512857.html SOURCE Arrow Financial Corporation