GLENS FALLS, N.Y., Oct. 26, 2021 /PRNewswire/
-- Arrow Financial Corporation (NasdaqGS® – AROW) announced
operating results for the three- and nine-month periods ended
September 30, 2021. Net income
for the third quarter of 2021 was $13.0
million, compared to $11.0
million in the third quarter of 2020. Net interest
income increased to $28.6 million in
the third quarter of 2021, compared to $24.9 million for the comparable quarter of
2020. For the nine months ended September
30, 2021, net interest income and net income were
$83.2 million and $39.5 million, respectively, as compared to
$72.7 million and $28.3
million for the nine
months ended September 30, 2020.
Annualized key profitability ratios remained strong, as measured
by a return on average equity (ROE) of 14.34% and a return on
average assets (ROA) of 1.32% for the third quarter, compared to
13.55% and 1.23%, respectively, for the
prior-year quarter.
"Arrow delivered another quarter of solid earnings, strong
profitability ratios, and asset growth to a new record of more than
$4 billion," said Arrow President and
CEO Thomas J. Murphy. "I commend our
team members for their dedication to continuous improvement and
exceptional service for our customers during these challenging
times. I am thankful for and humbled by their unwavering commitment
to achieve our mission."
In the third quarter, Arrow advanced its focus on technology and
digital experience with the launch of a new mortgage
application platform and upgrades to our Business Online Banking
platform. Additionally, branch network enhancement plans
continued. Glens Falls National Bank announced the consolidation
of two branches in Fort Edward located less than a mile apart
before year-end, with the remaining full- service branch
undergoing improvements; Saratoga National Bank likewise renovated
a new full-service location in Wilton, which will open in the
fourth quarter and replace its smaller Jones and Ballard
road branches.
The following expands on our third-quarter financial results:
COVID-19 Response: In the third quarter, our
lending team further advanced the forgiveness process for PPP
borrowers, with about three quarters of loans forgiven as of
September 30, 2021. Frontline teams
also assisted customers with additional stimulus programs and
provided fraud education around pandemic-related scams.
Arrow also complied with the New York
State HERO Act by implementing required face coverings for
employees. The Arrow Business Continuity Plan Committee continues
to meet regularly to evaluate pandemic metrics and our response,
including our plan for pending OSHA guidance on vaccination
requirements for large employers.
Additionally, Arrow recognized the team's outstanding
performance and tremendous dedication during this pandemic with a
special recognition bonus, following a similar bonus in 2020.
Loan Growth: Total loans were $2.7 billion as of September 30, 2021. Loan growth for the third
quarter of 2021 was $10.7
million and increased $62.3
million, or 2.4%, from September 30,
2020. In the third quarter, total outstanding
commercial loans decreased $37.8
million, or 4.5%. PPP loans, included in the commercial
portfolio, decreased $56.7 million in
the third quarter as a result of the continued
loan forgiveness processed by the Small Business
Administration. The consumer loan portfolio grew by $28.6 million, or 3.2% in the third quarter,
primarily within the indirect automobile lending program.
Total outstanding residential real estate loans, net of
approximately $4.0 million of loans
sold, increased $19.8 million, or 2.2%, for
the third quarter of 2021.
Deposit Growth: At September
30, 2021, deposit balances were $3.6
billion. Deposits increased in the third quarter of 2021 by
$167.5 million and increased by
$340.7 million, or 10.4%, from the
prior-year level. Municipal deposits increased $118.4 million in the third quarter and
$134.0 million, or 15.8% from
September 30, 2020. Non-municipal
deposits increased $49.1 million for
the quarter and $206.7 million, or
8.6% from September 30, 2020.
Noninterest-bearing deposits represented 23.4% of total deposits at
September 30, 2021, compared to 21.1%
of total deposits at September 30,
2020. At September 30, 2021,
other time deposits were $138.7
million, a decrease of $55.4
million compared to the prior year.
Net Interest Income: Net interest income for the
third quarter was $28.6 million, up
15.0% from $24.9 million in the
comparable quarter of 2020. Interest and fees on loans were
$27.2 million for the third quarter
of 2021, an increase of 9.9% from $24.7
million for the quarter ending September 30, 2020. Interest and fees related to
PPP loans, included in the $27.2
million, were $2.5 million in
the third quarter of 2021. Interest expense for the third quarter
of 2021 was $1.2 million, a decrease
of $1.2 million, or 51.2%, from the
$2.4 million in expense for the
comparable quarter ending September 30,
2020. The net interest margin was 3.04% for the quarter,
compared to 2.90% for the third quarter of 2020. The increase in
net interest margin from the prior year was due to a variety of
factors, including the timing of the forgiveness of PPP loans
partially offset by lower interest rates and increased cash
balances.
Noninterest Income: Noninterest income for the three
months ended September 30, 2021 was
$7.7 million, compared to
$8.7 million in the comparable 2020
quarter. Income from fiduciary activities for the three months
ended September 30, 2021, increased
by $306 thousand over the comparable
quarter of 2020. Fees and other services to customers increased
$347 thousand over the comparable
quarter of 2020. Interchange fees related to increased customer
activity of debit card usage was the largest driver of the
increase. Gain on sales of loans decreased $1.2 million from the third quarter of 2020 as a
result of the strategic decision to retain more newly originated
real estate loans.
Noninterest Expense: Noninterest expense for the
third quarter of 2021 was $19.4
million, an increase from $17.5
million for the third quarter of 2020. The largest component
of noninterest expense was salaries and benefits paid to our
employees, which totaled $11.4
million for the third quarter of 2021. The increase is
primarily due to a special recognition bonus of approximately
$510 thousand which was paid in the
third quarter. Technology expenses increased from the prior year in
part due to variable costs related to increased utilization of
consumer banking technology. Other non-interest expense included
the expense for estimated credit losses on off-balance sheet credit
exposures of $300 thousand in the
third quarter.
Provision for Income Taxes: The provision for income
taxes was $3.8 million for the third
quarter of 2021, compared to $2.8
million for the same quarter of 2020. The effective income
tax rates for the three- month periods ended September 30, 2021 and 2020, were 22.7% and
20.2%, respectively.
Asset Quality: Asset quality remained solid at
September 30, 2021, as evidenced by
low levels of nonperforming assets and charge-offs. Net loan
losses, expressed as an annualized percentage of average loans
outstanding, were 0.02% for the three-month period ended
September 30, 2021, consistent with
the three-month period ended September 30,
2020. Nonperforming loans at September 30, 2021 were $11.3 million, up $5.1
million from September 30,
2020 which was primarily the result of two commercial real
estate loans being classified as nonaccrual during 2021.
Nonperforming assets of $11.7 million
at September 30, 2021 represented
0.29% of period-end assets up from 0.17% at September 30, 2020.
For the third quarter of 2021, the provision for credit losses
was $99 thousand and the expense
for estimated credit losses on off-balance sheet credit
exposures included in other liabilities was $300 thousand. The
allowance for credit losses was $27.0
million on September 30, 2021,
which represented 1.02% of loans
outstanding, as compared
to 1.10% at September 30, 2020.
Liquidity: As of September
30, 2021, Arrow's liquidity position remained strong with
interest-bearing cash balances of $548.9
million. Arrow continues to be well-positioned to address
any unexpected volatility, which may affect cash flow and deposit
balances. At September 30, 2021,
contingent collateralized lines of credit were in place and
available through the Federal Home Loan Bank of New York (FHLB) and the Federal Reserve Bank,
totaling $1.4 billion. Arrow has
additional liquidity options currently available, including access
to unsecured lines of credit such as Fed funds and brokered
markets.
Capital: Total stockholders' equity was $360.2 million on September 30, 2021, up $34.5 million, or 10.6%, from September 30, 2020. Arrow's regulatory capital
ratios remained strong in the third quarter of 2021. As of
September 30, 2021, Arrow's Common
Equity Tier 1 Capital Ratio was 13.71% and Total Risk-Based Capital
Ratio was 15.66%. The capital ratios of Arrow and both its
subsidiary banks continued to exceed the "well capitalized"
regulatory standards.
Cash and Stock Dividends: On September 15, 2021, Arrow distributed a cash
dividend of $0.26 per share. The cash
dividend was 3% higher than the cash dividend paid by Arrow in the
third quarter of 2020 when adjusted for the 3% stock dividend
distributed on September 25, 2020.
Additionally, a 3% stock dividend was distributed on September 24, 2021. This is the 13th consecutive
year Arrow has declared a stock dividend.
Industry Recognition: In the third quarter of 2021,
Arrow was selected as one of the top 35 banks and thrifts that
comprise the Piper Sandler Sm-All Stars Class of 2021. Arrow is one
of just five New York financial institutions on the list, and
the only one headquartered locally. Additionally, both of
Arrow's banking subsidiaries, Glens Falls National Bank and
Trust Company and Saratoga National Bank
and Trust Company, continue to hold BauerFinancial, Inc. 5-Star Superior Bank ratings.
----------------
About Arrow: Arrow Financial Corporation is a
multi-bank holding company headquartered in Glens Falls,
New York, serving the financial
needs of northeastern New York.
Arrow is the parent of Glens Falls National Bank and Trust
Company and Saratoga National Bank and Trust Company. Other
subsidiaries include Upstate Agency, LLC
and North Country Investment Advisers, Inc.
Non-GAAP Financial Measures Reconciliation: In
addition to presenting information in conformity with accounting
principles generally accepted in the
United States of America (GAAP), this news release contains
financial information determined by methods other than GAAP
(non-GAAP). Some measures used in this release, which are commonly
utilized by financial institutions, have not been specifically
exempted by the Securities and Exchange Commission (SEC) and may
constitute "non-GAAP financial measures" within the meaning of the
SEC's rules. These non-GAAP financial measures include: tangible
equity, return on tangible equity, tax-equivalent adjustment and
related net interest income, tax- equivalent, and the efficiency
ratio. Management believes that the non-GAAP financial measures
disclosed by Arrow from 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, including, in particular, statements regarding
the uncertainty surrounding the COVID-19 pandemic. 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, 2020, and
other filings with the Securities and Exchange Commission.
|
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
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
INTEREST AND DIVIDEND INCOME
|
|
|
|
|
|
|
|
|
Interest and Fees on Loans
|
$
27,157
|
|
$
24,706
|
|
$
79,354
|
|
$
74,657
|
|
Interest on Deposits at Banks
|
163
|
|
64
|
|
351
|
|
229
|
|
Interest and Dividends on Investment Securities:
|
|
|
|
|
|
|
|
|
Fully Taxable
|
1,632
|
|
1,557
|
|
4,809
|
|
5,621
|
|
Exempt from Federal Taxes
|
855
|
|
969
|
|
2,682
|
|
3,017
|
|
Total Interest and Dividend Income
|
29,807
|
|
27,296
|
|
87,196
|
|
83,524
|
|
INTEREST EXPENSE
|
|
|
|
|
|
|
|
|
Interest-Bearing Checking Accounts
|
155
|
|
264
|
|
566
|
|
1,061
|
|
Savings Deposits
|
424
|
|
806
|
|
1,490
|
|
4,450
|
|
Time Deposits over $250,000
|
39
|
|
292
|
|
228
|
|
1,263
|
|
Other Time Deposits
|
133
|
|
576
|
|
511
|
|
2,360
|
|
Federal Funds Purchased and
|
|
|
|
|
|
|
|
|
Securities Sold Under Agreements to Repurchase
|
—
|
17
|
3
|
55
|
|
Federal Home Loan Bank Advances
|
197
|
219
|
586
|
865
|
|
Junior Subordinated Obligations Issued to
|
|
|
|
|
|
Unconsolidated Subsidiary Trusts
|
173
|
173
|
513
|
574
|
|
Interest on Financing Leases
|
48
|
|
49
|
|
146
|
|
148
|
|
Total Interest Expense
|
1,169
|
|
2,396
|
|
4,043
|
|
10,776
|
|
NET INTEREST INCOME
|
28,638
|
|
24,900
|
|
83,153
|
|
72,748
|
|
Provision for Credit Losses
|
99
|
|
2,271
|
|
(286)
|
|
8,083
|
|
NET INTEREST
INCOME AFTER PROVISION FOR CREDIT LOSSES
|
28,539
|
|
22,629
|
|
83,439
|
|
64,665
|
|
NONINTEREST INCOME
|
|
|
|
|
|
|
|
|
Income From Fiduciary Activities
|
2,571
|
|
2,265
|
|
7,538
|
|
6,613
|
|
Fees for Other Services to Customers
|
2,966
|
|
2,619
|
|
8,494
|
|
7,348
|
|
Insurance Commissions
|
1,576
|
|
1,713
|
|
4,842
|
|
5,077
|
|
Net (Loss) Gain on Securities
|
(106)
|
|
(72)
|
|
250
|
|
(552)
|
|
Net Gain on Sales of Loans
|
211
|
|
1,433
|
|
2,251
|
|
2,193
|
|
Other Operating Income
|
476
|
|
739
|
|
1,405
|
|
2,876
|
|
Total Noninterest Income
|
7,694
|
|
8,697
|
|
24,780
|
|
23,555
|
|
NONINTEREST EXPENSE
|
|
|
|
|
|
|
|
|
Salaries and Employee Benefits
|
11,377
|
|
10,408
|
|
33,360
|
|
31,003
|
|
Occupancy Expenses, Net
|
1,403
|
|
1,427
|
|
4,480
|
|
4,221
|
|
Technology and Equipment Expense
|
3,833
|
|
3,228
|
|
11,002
|
|
9,807
|
|
FDIC Assessments
|
249
|
|
309
|
|
764
|
|
770
|
|
Other Operating Expense
|
2,561
|
|
2,115
|
|
7,582
|
|
6,685
|
|
Total Noninterest Expense
|
19,423
|
|
17,487
|
|
57,188
|
|
52,486
|
|
INCOME BEFORE PROVISION FOR INCOME TAXES
|
16,810
|
|
13,839
|
|
51,031
|
|
35,734
|
|
Provision for Income Taxes
|
3,821
|
|
2,793
|
|
11,483
|
|
7,402
|
|
NET INCOME
|
$
12,989
|
|
$
11,046
|
|
$
39,548
|
|
$
28,332
|
|
Average Shares Outstanding 1:
|
|
|
|
|
|
|
|
|
Basic
|
16,027
|
|
15,936
|
|
16,015
|
|
15,917
|
|
Diluted
|
16,085
|
|
15,946
|
|
16,072
|
|
15,931
|
|
Per Common Share:
|
|
|
|
|
|
|
|
|
Basic Earnings
|
$
0.81
|
|
$
0.69
|
|
$
2.47
|
|
$
1.78
|
|
Diluted Earnings
|
0.81
|
|
0.69
|
|
2.46
|
|
1.78
|
|
|
|
1
|
2020 Share and Per Share Amounts have been restated for the September 24, 2021, 3% stock dividend.
|
|
ARROW FINANCIAL
CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Amounts - Unaudited)
|
|
|
|
|
|
September 30,
|
December 31,
|
September 30,
|
|
2021
|
2020
|
2020
|
|
ASSETS
|
|
|
|
|
Cash and Due From Banks
|
$
49,430
|
$
42,116
|
$
54,286
|
|
Interest-Bearing Deposits at Banks
|
548,936
|
338,875
|
396,380
|
|
Investment Securities:
|
|
|
|
|
Available-for-Sale at Fair Value
|
486,900
|
365,287
|
374,928
|
|
Held-to-Maturity (Approximate Fair Value of $203,936 at
|
|
|
|
|
September 30, 2021; $226,576 at December 31, 2020; and
|
|
|
|
|
$233,501 at September 30, 2020)
|
198,337
|
218,405
|
224,799
|
|
Equity Securities
|
1,886
|
1,636
|
1,511
|
|
FHLB and Federal Reserve Bank Stock
|
5,380
|
5,349
|
5,574
|
|
Loans
|
2,654,751
|
2,595,030
|
2,592,455
|
|
Allowance for Credit Losses
|
(26,956)
|
(29,232)
|
(28,446)
|
|
Net Loans
|
2,627,795
|
2,565,798
|
2,564,009
|
|
Premises and Equipment, Net
|
44,003
|
42,612
|
42,075
|
|
Goodwill
|
21,873
|
21,873
|
21,873
|
|
Other Intangible Assets, Net
|
2,006
|
1,950
|
1,789
|
|
Other Assets
|
84,558
|
84,735
|
90,460
|
|
Total Assets
|
$
4,071,104
|
$
3,688,636
|
$
3,777,684
|
|
LIABILITIES
|
|
|
|
|
Noninterest-Bearing Deposits
|
841,910
|
701,341
|
690,232
|
|
Interest-Bearing Checking Accounts
|
1,035,358
|
832,434
|
912,980
|
|
Savings Deposits
|
1,515,692
|
1,423,358
|
1,354,956
|
|
Time Deposits over $250,000
|
73,889
|
123,622
|
112,555
|
|
Other Time Deposits
|
138,714
|
153,971
|
194,135
|
|
Total Deposits
|
3,605,563
|
3,234,726
|
3,264,858
|
|
Federal Funds Purchased and
|
|
|
|
|
Securities Sold Under Agreements to Repurchase
|
2,426
|
17,486
|
73,949
|
|
Federal Home Loan Bank Term Advances
|
45,000
|
45,000
|
50,000
|
|
Junior Subordinated Obligations Issued to Unconsolidated
|
|
|
|
|
Subsidiary Trusts
|
20,000
|
20,000
|
20,000
|
|
Finance Leases
|
5,181
|
5,217
|
5,228
|
|
Other Liabilities
|
32,763
|
31,815
|
37,989
|
|
Total Liabilities
|
3,710,933
|
3,354,244
|
3,452,024
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
Preferred Stock, $1 Par Value and 1,000,000 Shares
|
|
|
|
|
Authorized at September 30, 2021, December 31, 2020 and
|
|
|
|
|
September 30, 2020
|
—
|
—
|
—
|
|
Common Stock, $1 Par Value; 30,000,000 Shares Authorized
|
|
|
|
|
(20,800,144 Shares Issued at September 30, 2021 and
December 31, 2020 and 20,194,474 at September 30, 2020)
|
20,800
|
20,194
|
20,194
|
|
Additional Paid-in Capital
|
377,349
|
353,662
|
353,062
|
|
Retained Earnings
|
47,936
|
41,899
|
33,434
|
|
Accumulated Other Comprehensive Loss
|
(3,719)
|
(816)
|
(253)
|
|
Treasury Stock, at Cost (4,780,496 Shares at September 30,
|
|
|
|
|
2021; 4,678,736 Shares at December 31, 2020 and 4,705,102
|
|
|
|
|
Shares at September 30, 2020)
|
(82,195)
|
(80,547)
|
(80,777)
|
|
Total Stockholders' Equity
|
360,171
|
334,392
|
325,660
|
|
Total Liabilities and Stockholders' Equity
|
$
4,071,104
|
$
3,688,636
|
$
3,777,684
|
|
Arrow Financial
Corporation
Selected Quarterly Information
(Dollars In Thousands, Except Per Share Amounts - Unaudited)
|
|
|
Quarter Ended
|
9/30/2021
|
6/30/2021
|
3/31/2021
|
12/31/2020
|
|
9/30/2020
|
|
Net Income
|
$
12,989
|
$
13,279
|
$
13,280
|
$
12,495
|
|
$
11,046
|
|
Transactions in Net Income (Net of Tax):
|
|
|
|
|
|
|
|
Net Changes in Fair Value of Equity Investments
|
(79)
|
145
|
119
|
66
|
|
(53)
|
|
Share and Per Share Data:1
|
|
|
|
|
|
|
|
Period End Shares Outstanding
|
16,020
|
16,039
|
16,009
|
15,981
|
|
15,954
|
|
Basic Average
Shares Outstanding
|
16,027
|
16,024
|
15,994
|
15,964
|
|
15,936
|
|
Diluted Average Shares Outstanding
|
16,085
|
16,085
|
16,030
|
15,981
|
|
15,946
|
|
Basic Earnings Per Share
|
$
0.81
|
$
0.83
|
$
0.83
|
$
0.78
|
|
$
0.69
|
|
Diluted Earnings Per Share
|
0.81
|
0.83
|
0.82
|
0.78
|
|
0.69
|
|
Cash Dividend Per Share
|
0.252
|
0.252
|
0.252
|
0.252
|
|
0.245
|
|
Selected Quarterly Average Balances:
|
|
|
|
|
|
|
|
Interest-Bearing Deposits at Banks
|
$ 416,500
|
$ 369,034
|
$ 334,155
|
$ 349,430
|
|
$ 242,928
|
|
Investment Securities
|
675,980
|
668,089
|
593,822
|
590,151
|
|
592,457
|
|
Loans
|
2,641,726
|
2,651,449
|
2,618,362
|
2,610,834
|
|
2,582,253
|
|
Deposits
|
3,435,933
|
3,395,271
|
3,254,815
|
3,256,238
|
|
3,082,499
|
|
Other Borrowed Funds
|
72,187
|
74,957
|
82,659
|
95,047
|
|
136,117
|
|
Shareholders' Equity
|
359,384
|
350,203
|
340,708
|
331,899
|
|
324,269
|
|
Total Assets
|
3,902,041
|
3,851,921
|
3,712,020
|
3,721,954
|
|
3,583,322
|
|
Return on Average Assets, annualized
|
1.32 %
|
1.38 %
|
1.45 %
|
1.34 %
|
|
1.23 %
|
|
Return on Average
Equity, annualized
|
14.34 %
|
15.21 %
|
15.81 %
|
14.98 %
|
|
13.55 %
|
|
Return
on Average Tangible Equity, annualized 2
|
15.36 %
|
16.32 %
|
17.00 %
|
16.13 %
|
|
14.61 %
|
|
Average Earning Assets
|
$
3,734,206
|
$
3,688,572
|
$
3,546,339
|
$
3,550,415
|
|
$
3,417,638
|
|
Average Paying Liabilities
|
2,705,283
|
2,721,961
|
2,639,240
|
2,674,795
|
|
2,545,435
|
|
Interest Income
|
29,807
|
29,695
|
27,694
|
28,372
|
|
27,296
|
|
Tax-Equivalent Adjustment 3
|
292
|
293
|
235
|
251
|
|
284
|
|
Interest Income, Tax-Equivalent 3
|
30,099
|
29,988
|
27,929
|
28,623
|
|
27,580
|
|
Interest Expense
|
1,169
|
1,335
|
1,539
|
1,918
|
|
2,396
|
|
Net Interest Income
|
28,638
|
28,360
|
26,155
|
26,454
|
|
24,900
|
|
Net Interest Income, Tax-Equivalent 3
|
28,930
|
28,653
|
26,390
|
26,705
|
|
25,184
|
|
Net Interest Margin, annualized
|
3.04 %
|
3.08 %
|
2.99 %
|
2.96 %
|
|
2.90 %
|
|
Net Interest
Margin, Tax-Equivalent,
annualized 3
|
3.07 %
|
3.12 %
|
3.02 %
|
2.99 %
|
|
2.93 %
|
|
Efficiency Ratio Calculation: 4
|
|
|
|
|
|
|
|
Noninterest Expense
|
$
19,423
|
$
19,087
|
$
18,678
|
$
18,192
|
|
$
17,487
|
|
Less: Intangible Asset Amortization
|
51
|
53
|
54
|
56
|
|
56
|
|
Net Noninterest Expense
|
$
19,372
|
$
19,034
|
$
18,624
|
$
18,136
|
|
$
17,431
|
|
Net Interest Income, Tax-Equivalent
|
$
28,930
|
$
28,653
|
$
26,390
|
$
26,705
|
|
$
25,184
|
|
Noninterest Income
|
7,694
|
8,478
|
8,608
|
9,103
|
|
8,697
|
|
Less: Net (Loss) Gain on Securities
|
(106)
|
196
|
160
|
88
|
|
(72)
|
|
Net Gross Income
|
$
36,730
|
$
36,935
|
$
34,838
|
$
35,720
|
|
$
33,953
|
|
Efficiency Ratio
|
52.74 %
|
51.53 %
|
53.46 %
|
50.77 %
|
|
51.34 %
|
|
Period-End Capital Information:
|
|
|
|
|
|
|
|
Total Stockholders' Equity (i.e. Book Value)
|
$ 360,171
|
$ 353,033
|
$ 342,413
|
$ 334,392
|
|
$ 325,660
|
|
Book Value per
Share 1
|
22.48
|
22.01
|
21.39
|
20.91
|
|
20.41
|
|
Goodwill and Other Intangible Assets, net
|
23,879
|
23,955
|
23,922
|
23,823
|
|
23,662
|
|
Tangible Book Value per Share 1,2
|
20.99
|
20.52
|
19.89
|
19.43
|
|
18.93
|
|
Capital Ratios:5
|
|
|
|
|
|
|
|
Tier 1 Leverage Ratio
|
9.39 %
|
9.29 %
|
9.37 %
|
9.07 %
|
|
9.17 %
|
|
Common Equity Tier 1 Capital Ratio
|
13.71 %
|
13.79 %
|
13.56 %
|
13.39 %
|
|
13.20 %
|
|
Tier 1 Risk-Based Capital Ratio
|
14.51 %
|
14.61 %
|
14.39 %
|
14.24 %
|
|
14.06 %
|
|
Total Risk-Based Capital Ratio
|
15.66 %
|
15.78 %
|
15.55 %
|
15.48 %
|
|
15.28 %
|
|
Assets Under Trust Admin. & Investment Mgmt.
|
$
1,778,659
|
$
1,804,854
|
$
1,725,754
|
$
1,659,029
|
|
$
1,537,128
|
|
Arrow Financial
Corporation
Selected Quarterly Information - Continued
|
|
(Dollars In
Thousands, Except Per Share Amounts - Unaudited)
|
|
|
|
Footnotes:
|
|
|
|
1.
|
Share and Per Share Data have been restated for the September 24, 2021, 3% stock dividend.
|
|
|
|
2.
|
Non-GAAP Financial
Measures Reconciliation: Tangible Book Value and Tangible Equity
exclude goodwill and other intangible assets, net from total
equity. These are non-GAAP financial measures which Arrow
believes provides investors with information
that is useful in understanding
its financial performance.
|
|
|
|
|
|
|
|
9/30/2021
|
6/30/2021
|
3/31/2021
|
12/31/2020
|
9/30/2020
|
|
Total Stockholders' Equity (GAAP)
|
$ 360,171
|
$ 353,033
|
$ 342,413
|
$ 334,392
|
$ 325,660
|
|
Less: Goodwill and
Other Intangible
assets, net
|
23,879
|
23,955
|
23,922
|
23,823
|
23,662
|
|
Tangible Equity (Non-GAAP)
|
$ 336,292
|
$ 329,078
|
$ 318,491
|
$ 310,569
|
$ 301,998
|
|
Period End Shares Outstanding
|
16,020
|
16,039
|
16,009
|
15,981
|
15,954
|
|
Tangible Book Value per Share (Non-
GAAP)
|
$
20.99
|
$
20.52
|
$
19.89
|
$
19.43
|
$
18.93
|
|
Net Income
|
12,989
|
13,279
|
13,280
|
12,495
|
11,046
|
|
Return
on Average Tangible Equity
|
|
|
|
|
|
|
(Net Income/Tangible Equity -
|
|
|
|
|
|
|
Annualized)
|
15.36 %
|
16.32 %
|
17.00 %
|
16.13 %
|
14.61 %
|
|
|
|
3.
|
Non-GAAP Financial
Measures Reconciliation: Net Interest Margin, Tax-Equivalent is the
ratio of our 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.
|
|
|
|
|
|
|
|
9/30/2021
|
6/30/2021
|
3/31/2021
|
12/31/2020
|
9/30/2020
|
|
Interest Income (GAAP)
|
$
29,807
|
$
29,695
|
$
27,694
|
$
28,372
|
$
27,296
|
|
Add: Tax-Equivalent adjustment
(Non-GAAP)
|
|
292
|
|
293
|
|
235
|
|
251
|
|
284
|
|
Interest Income - Tax Equivalent
(Non-GAAP)
|
$
|
30,099
|
$
|
29,988
|
$
|
27,929
|
$
|
28,623
|
$
|
27,580
|
|
Net Interest Income (GAAP)
|
$
28,638
|
$
28,360
|
$
26,155
|
$
26,454
|
$
24,900
|
|
Add: Tax-Equivalent adjustment
(Non-GAAP)
|
|
292
|
|
293
|
|
235
|
|
251
|
|
284
|
|
Net Interest Income - Tax Equivalent
(Non-GAAP)
|
$
|
28,930
|
$
|
28,653
|
$
|
26,390
|
$
|
26,705
|
$
|
25,184
|
|
Average Earning Assets
|
$3,734,206
|
$3,688,572
|
$3,546,339
|
$3,550,415
|
$3,417,638
|
|
Net Interest Margin (Non-GAAP)*
|
3.07 %
|
3.12 %
|
3.02 %
|
2.99 %
|
2.93 %
|
|
|
|
4.
|
Non-GAAP Financial
Measures: 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 noninterest expense to
net
gross income (which equals tax-equivalent net interest income plus noninterest income, as adjusted).
|
|
|
|
5.
|
For the current
quarter, all of the regulatory capital ratios in the table above,
as well as the Total Risk-Weighted
Assets and Common Equity Tier 1 Capital amounts listed in the table
below, are estimates based on, and calculated
in accordance with, bank regulatory capital rules. All prior
quarters reflect actual results. The CET1 ratio at
September 30, 2021 listed in the tables (i.e., 13.71%) exceeds the
sum of the required minimum CET1 ratio plus the
fully phased-in Capital Conservation Buffer (i.e.,
7.00%).
|
|
|
|
9/30/2021
|
6/30/2021
|
3/31/2021
|
12/31/2020
|
9/30/2020
|
|
Total Risk
Weighted Assets
|
$2,511,910
|
$2,438,445
|
$2,404,456
|
$2,357,094
|
$2,321,637
|
|
Common Equity Tier 1 Capital
|
344,507
|
336,265
|
326,039
|
315,696
|
306,356
|
|
Common Equity Tier 1 Ratio
|
13.71 %
|
13.79 %
|
13.56 %
|
13.39 %
|
13.20 %
|
|
|
|
|
|
|
|
* Quarterly ratios have been annualized.
|
|
|
|
|
|
|
Arrow Financial
Corporation
Consolidated Financial Information
(Dollars in Thousands - Unaudited)
|
|
|
|
|
|
Quarter Ended:
|
9/30/2021
|
12/31/2020
|
9/30/2020
|
|
Loan Portfolio
|
|
|
|
|
Commercial Loans
|
$
188,191
|
$
240,554
|
$
275,921
|
|
Commercial Real Estate Loans
|
615,080
|
571,787
|
541,233
|
|
Subtotal Commercial Loan Portfolio
|
803,271
|
812,341
|
817,154
|
|
Consumer Loans
|
921,189
|
859,768
|
849,526
|
|
Residential Real Estate Loans
|
930,291
|
922,921
|
925,775
|
|
Total Loans
|
$
2,654,751
|
$
2,595,030
|
$
2,592,455
|
|
Allowance for Credit Losses
|
|
|
|
|
Allowance for Credit Losses, Beginning of Quarter
|
$
27,010
|
$
28,446
|
$
26,300
|
|
Loans Charged-off
|
(444)
|
(630)
|
(392)
|
|
Less Recoveries of Loans Previously Charged-off
|
291
|
179
|
267
|
|
Net Loans Charged-off
|
(153)
|
(451)
|
(125)
|
|
Provision for Credit Losses
|
99
|
1,237
|
2,271
|
|
Allowance for Credit Losses, End of Quarter
|
$
26,956
|
$
29,232
|
$
28,446
|
|
Nonperforming Assets
|
|
|
|
|
Nonaccrual Loans
|
$
10,723
|
$
6,033
|
$
6,004
|
|
Loans Past Due 90 or More Days and Accruing
|
555
|
228
|
121
|
|
Loans Restructured and in Compliance with Modified Terms
|
67
|
145
|
157
|
|
Total Nonperforming Loans
|
11,345
|
6,406
|
6,282
|
|
Repossessed Assets
|
272
|
155
|
126
|
|
Other Real Estate Owned
|
79
|
—
|
—
|
|
Total Nonperforming Assets
|
$
11,696
|
$
6,561
|
$
6,408
|
|
|
|
|
|
Key Asset Quality Ratios
|
|
|
|
|
Net Loans
Charged-off to Average Loans,
|
|
|
|
|
Quarter-to-date Annualized
|
0.02 %
|
0.07 %
|
0.02 %
|
|
Provision for Credit Losses to Average Loans, Quarter-to-date Annualized
|
0.01 %
|
0.19 %
|
0.35 %
|
|
Allowance for Credit Losses to Period-End Loans
|
1.02 %
|
1.13 %
|
1.10 %
|
|
Allowance for Credit Losses to Period-End Nonperforming Loans
|
237.60 %
|
456.32 %
|
452.82 %
|
|
Nonperforming Loans to Period-End Loans
|
0.43 %
|
0.25 %
|
0.24 %
|
|
Nonperforming Assets to Period-End Assets
|
0.29 %
|
0.18 %
|
0.17 %
|
|
Nine Month Period Ended:
|
|
|
|
|
Allowance for Loan Losses
|
|
|
|
|
Allowance for Loan Losses, Beginning of Year
|
$
29,232
|
|
$
21,187
|
|
Impact of the Adoption of ASU 2016-13
|
(1,300)
|
|
—
|
|
Loans Charged-off
|
(1,520)
|
|
(1,360)
|
|
Less Recoveries of Loans Previously Charged-off
|
830
|
|
536
|
|
Net Loans Charged-off
|
(690)
|
|
(824)
|
|
Provision for Loan Losses
|
(286)
|
|
8,083
|
|
Allowance for Loan Losses, End of Period
|
$
26,956
|
|
$
28,446
|
|
Key Asset Quality Ratios
|
|
|
|
|
Net Loans Charged-off to Average Loans, Annualized
|
0.03 %
|
|
0.04 %
|
|
Provision for Loan Losses to Average Loans, Annualized
|
(0.01)%
|
|
0.43 %
|
View original
content:https://www.prnewswire.com/news-releases/arrow-reports-13-0-million-in-q3-net-income-surpasses-4-billion-in-total-assets-301408596.html
SOURCE Arrow Financial Corporation