GLENS FALLS, N.Y.,
Oct. 22, 2018 /PRNewswire/ -- Arrow Financial Corporation
(NasdaqGS® – AROW) announced operating results for the three-month
period ended September 30, 2018. Net income for the third
quarter of 2018 increased $1.8
million compared to the third quarter of 2017, mainly due to
the $1.6 million increase in net
interest income after the provision for loan losses as a result of
strong loan growth, and a $552
thousand reduction in the provision for income taxes
primarily due to lower tax rates as a result of the Tax Cuts and
Jobs Act of 2017 ("Tax Act").
Annualized key profitability ratios also improved, as measured
by a return on average equity (ROE) of 13.96% and a return on
average assets (ROA) of 1.28% for the third quarter, compared to
12.07% and 1.08% a year earlier.
Arrow President and CEO Thomas J.
Murphy said, "Third quarter results were strong, driven by
new records in total assets and assets under management and trust
administration. Once again, I congratulate the entire Arrow team
for this exceptional performance. I am very proud of their efforts
and contributions as we look forward to continuously investing in
our communities and growing into new markets."
The following expands upon third quarter results:
Loan Growth: Over the twelve months ended
September 30, 2018, total loans increased $217.3 million, or 11.4%, to $2.1 billion. The consumer loan portfolio grew by
$102.2 million, or 17.3%, over the
balance at September 30, 2017, primarily as a result of growth
in the indirect automobile lending program, while the total
residential real estate loan portfolio increased $84.0 million, or 11.2%, over the balance at
September 30, 2017. The total outstanding commercial loans
increased $31.2 million, or 5.5% over
the balance at September 30, 2017.
Deposit Growth: At September 30, 2018, deposit
balances reached $2.4 billion, up
$100.7 million, or 4.4%, from the
prior-year level with growth in both personal and business
balances. Noninterest-bearing deposits increased $42.0 million and represented 20.4% of total
deposits at September 30, 2018, compared to 19.4% at
September 30, 2017. As a result of higher market rates and
deposit customers seeking a higher return, time deposits over
$250,000 increased $47.8 million at September
30, 2018 compared to the prior year.
Net Interest Income: Driven by strong loan growth,
third quarter 2018 net interest income increased to $21.0 million, up 6.9% from $19.7 million in the comparable quarter of 2017.
The net interest margin was 3.02% for the quarter, compared to
3.00% for the third quarter of 2017. On a tax equivalent (non-GAAP)
basis, the net interest margin was 3.08% compared to 3.15% for the
prior year period.
Noninterest Income: Noninterest income for the
three-month period ended September 30, 2018 increased 3.0%
from the comparable 2017 quarter, due mainly to increases in
service fee revenue and income from fiduciary activities. Service
fee revenue increased during the quarter by $152 thousand, or 6.2%, over the amount for the
third quarter of 2017, while income from fiduciary activities
increased by $146 thousand, or 6.9%
due to a $139.7 million, or 9.9%,
increase in assets under management and trust administration. The
increase in assets under management, which reached a new record
high of $1.6 billion at
September 30, 2018, was driven primarily by continued strength
in equity markets. Additionally, the Company recorded a net gain on
equity securities of $114 thousand
during the third quarter of 2018. For periods prior to 2018,
accounting guidance resulted in these gains being recorded as a
component of accumulated comprehensive income. The aforementioned
increases in noninterest income were partially offset by reductions
in net gain on sales of loans and in insurance commissions.
Noninterest Expense: Noninterest expense for the
third quarter of 2018 increased 3.1% to $16.0 million, from $15.5
million for the third quarter of 2017, primarily due to a
4.1% increase in salaries and employee benefits over the same 2017
quarter.
Provision for Income Taxes: The provision for income
taxes was $2.5 million in the third
quarter of 2018 versus $3.0 million
in the same quarter of 2017. The effective income tax rates for the
three-month periods ended September 30, 2018 and 2017 were
21.1% and 29.0%, respectively, which reflects the impact of the Tax
Act.
Asset Quality: Asset quality remained strong at
September 30, 2018, as measured by continuing low levels of
nonperforming assets and net charge-offs. Nonperforming assets at
September 30, 2018 were $7.0
million, down $2.0 million, or
22.4%, from the level at September 30, 2017. Net charge-offs,
expressed as an annualized percentage of average loans outstanding,
were 0.04% for the three-month period ended September 30,
2018, down from the prior-year comparable quarter of 0.11%. The
allowance for loan losses was $20.0
million at September 30, 2018, which represented 0.94%
of loans outstanding as compared to 0.93% at September 30,
2017. The loss provision expense for the third quarter of 2018 was
$586 thousand, down $214 thousand from the provision for the
comparable 2017 quarter.
Capital: Total stockholders' equity was a record
$264.8 million at September 30,
2018, up $20.2 million, or 8.2%, from
the prior year. Overall regulatory capital ratios also remain
strong in 2018, with the Company's common equity tier 1 ratio
estimated to be 12.89% and the total risk-based capital ratio
estimated to be 14.89% at September 30, 2018. These capital
levels at the Company and both its subsidiary banks continue to
significantly exceed the "well capitalized" regulatory
standard.
Cash and Stock Dividends: On September 14, 2018, the Company distributed a
cash dividend of $0.26 per share.
This cash dividend reflected a $0.01
per share increase from the $0.25
cash dividend paid in the third quarter of 2017 and is the first
increase in the Company's cash dividend rate since 2008.
Additionally, a 3% stock dividend was distributed on September 27, 2018. This is the 10th consecutive
year the Company declared a stock dividend. The September 14, 2018 cash dividend was 7.1% higher
than the cash dividend paid by the Company in the third quarter of
2017 when adjusted for the 3% stock dividend.
Industry Recognition: Both of the Company's banking
subsidiaries maintained their BauerFinancial, Inc. 5-Star Superior
Bank rating. Glens Falls National Bank and Trust Company and
Saratoga National Bank and Trust Company have continued to earn
this designation for the last 46 and 38 quarters, respectively.
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. The Company is the
parent of Glens Falls National Bank and Trust Company and Saratoga
National Bank and Trust Company. Other subsidiaries include North
Country Investment Advisers, Inc. and Upstate Agency, LLC.
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
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 the Company from time to time are useful in evaluating
the Company'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. The Company 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 the Company's Annual Report on Form 10-K
for the year ended December 31, 2017, 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,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
INTEREST AND
DIVIDEND INCOME
|
|
|
|
|
|
|
|
|
Interest and Fees on
Loans
|
|
$
|
20,839
|
|
|
$
|
17,996
|
|
|
$
|
59,606
|
|
|
$
|
51,693
|
|
Interest on Deposits
at Banks
|
|
182
|
|
|
104
|
|
|
474
|
|
|
242
|
|
Interest and
Dividends on Investment Securities:
|
|
|
|
|
|
|
|
|
Fully
Taxable
|
|
2,187
|
|
|
1,924
|
|
|
6,128
|
|
|
5,927
|
|
Exempt from Federal
Taxes
|
|
1,287
|
|
|
1,575
|
|
|
4,295
|
|
|
4,660
|
|
Total Interest and
Dividend Income
|
|
24,495
|
|
|
21,599
|
|
|
70,503
|
|
|
62,522
|
|
INTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
Interest-Bearing
Checking Accounts
|
|
390
|
|
|
376
|
|
|
1,165
|
|
|
1,088
|
|
Savings
Deposits
|
|
901
|
|
|
356
|
|
|
2,134
|
|
|
963
|
|
Time Deposits over
$250,000
|
|
301
|
|
|
66
|
|
|
833
|
|
|
187
|
|
Other Time
Deposits
|
|
370
|
|
|
241
|
|
|
911
|
|
|
702
|
|
Federal Funds
Purchased and
Securities Sold Under Agreements to
Repurchase
|
15
|
|
|
13
|
|
|
47
|
|
|
29
|
|
Federal Home Loan
Bank Advances
|
|
1,270
|
|
|
700
|
|
|
2,340
|
|
|
1,651
|
|
Junior Subordinated
Obligations Issued to
Unconsolidated Subsidiary
Trusts
|
|
251
|
|
|
197
|
|
|
712
|
|
|
564
|
|
Total Interest
Expense
|
|
3,498
|
|
|
1,949
|
|
|
8,142
|
|
|
5,184
|
|
NET INTEREST
INCOME
|
|
20,997
|
|
|
19,650
|
|
|
62,361
|
|
|
57,338
|
|
Provision for Loan
Losses
|
|
586
|
|
|
800
|
|
|
1,961
|
|
|
1,580
|
|
NET INTEREST
INCOME AFTER PROVISION FOR
LOAN LOSSES
|
20,411
|
|
|
18,850
|
|
|
60,400
|
|
|
55,758
|
|
NONINTEREST
INCOME
|
|
|
|
|
|
|
|
|
Income From Fiduciary
Activities
|
|
2,262
|
|
|
2,116
|
|
|
7,106
|
|
|
6,284
|
|
Fees for Other
Services to Customers
|
|
2,605
|
|
|
2,453
|
|
|
7,555
|
|
|
6,875
|
|
Insurance
Commissions
|
|
2,024
|
|
|
2,113
|
|
|
6,119
|
|
|
6,426
|
|
Net Gain on
Securities
|
|
114
|
|
|
10
|
|
|
355
|
|
|
10
|
|
Net Gain on Sales of
Loans
|
|
54
|
|
|
182
|
|
|
115
|
|
|
431
|
|
Other Operating
Income
|
|
291
|
|
|
267
|
|
|
900
|
|
|
867
|
|
Total Noninterest
Income
|
|
7,350
|
|
|
7,141
|
|
|
22,150
|
|
|
20,893
|
|
NONINTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
Salaries and Employee
Benefits
|
|
9,771
|
|
|
9,382
|
|
|
28,952
|
|
|
27,740
|
|
Occupancy Expenses,
Net
|
|
2,262
|
|
|
2,371
|
|
|
7,223
|
|
|
7,410
|
|
FDIC
Assessments
|
|
218
|
|
|
225
|
|
|
658
|
|
|
679
|
|
Other Operating
Expense
|
|
3,775
|
|
|
3,570
|
|
|
11,341
|
|
|
10,832
|
|
Total Noninterest
Expense
|
|
16,026
|
|
|
15,548
|
|
|
48,174
|
|
|
46,661
|
|
INCOME BEFORE
PROVISION FOR INCOME TAXES
|
11,735
|
|
|
10,443
|
|
|
34,376
|
|
|
29,990
|
|
Provision for Income
Taxes
|
|
2,475
|
|
|
3,027
|
|
|
6,855
|
|
|
8,735
|
|
NET
INCOME
|
|
$
|
9,260
|
|
|
$
|
7,416
|
|
|
$
|
27,521
|
|
|
$
|
21,255
|
|
Average Shares
Outstanding 1:
|
|
|
|
|
|
|
|
|
Basic
|
|
14,431
|
|
|
14,305
|
|
|
14,393
|
|
|
14,306
|
|
Diluted
|
|
14,520
|
|
|
14,385
|
|
|
14,479
|
|
|
14,401
|
|
Per Common
Share:
|
|
|
|
|
|
|
|
|
Basic
Earnings
|
|
$
|
0.64
|
|
|
$
|
0.52
|
|
|
$
|
1.91
|
|
|
$
|
1.49
|
|
Diluted
Earnings
|
|
0.64
|
|
|
0.52
|
|
|
1.90
|
|
|
1.48
|
|
1 Share and per share data have been
restated for the September 27, 2018, 3% stock dividend.
|
|
|
ARROW FINANCIAL
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(In Thousands, Except
Share and Per Share Amounts - Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2018
|
|
December 31,
2017
|
|
September 30,
2017
|
ASSETS
|
|
|
|
|
|
Cash and Due From
Banks
|
$
|
57,385
|
|
|
$
|
42,562
|
|
|
$
|
55,683
|
|
Interest-Bearing
Deposits at Banks
|
34,910
|
|
|
30,276
|
|
|
24,983
|
|
Investment
Securities:
|
|
|
|
|
|
Available-for-Sale
|
340,411
|
|
|
300,200
|
|
|
315,459
|
|
Held-to-Maturity
(Approximate Fair Value of $282,719 at September 30,
2018; $335,901 at December 31, 2017; and $343,899 at September
30,
2017)
|
289,952
|
|
|
335,907
|
|
|
341,526
|
|
Equity
Securities
|
1,916
|
|
|
—
|
|
|
—
|
|
Other
Investments
|
10,866
|
|
|
9,949
|
|
|
6,704
|
|
Loans
|
2,126,100
|
|
|
1,950,770
|
|
|
1,908,799
|
|
Allowance for Loan
Losses
|
(20,003)
|
|
|
(18,586)
|
|
|
(17,695)
|
|
Net Loans
|
2,106,097
|
|
|
1,932,184
|
|
|
1,891,104
|
|
Premises and
Equipment, Net
|
28,601
|
|
|
27,619
|
|
|
26,432
|
|
Goodwill
|
21,873
|
|
|
21,873
|
|
|
21,873
|
|
Other Intangible
Assets, Net
|
1,954
|
|
|
2,289
|
|
|
2,395
|
|
Other
Assets
|
59,255
|
|
|
57,606
|
|
|
58,303
|
|
Total
Assets
|
$
|
2,953,220
|
|
|
$
|
2,760,465
|
|
|
$
|
2,744,462
|
|
LIABILITIES
|
|
|
|
|
|
Noninterest-Bearing
Deposits
|
$
|
490,469
|
|
|
$
|
441,945
|
|
|
$
|
448,515
|
|
Interest-Bearing
Checking Accounts
|
899,547
|
|
|
907,315
|
|
|
967,250
|
|
Savings
Deposits
|
758,727
|
|
|
694,573
|
|
|
696,805
|
|
Time Deposits over
$250,000
|
76,226
|
|
|
38,147
|
|
|
28,464
|
|
Other Time
Deposits
|
182,886
|
|
|
163,136
|
|
|
166,082
|
|
Total
Deposits
|
2,407,855
|
|
|
2,245,116
|
|
|
2,307,116
|
|
Federal Funds
Purchased and
Securities Sold Under Agreements to
Repurchase
|
62,503
|
|
|
64,966
|
|
|
61,419
|
|
Federal Home Loan
Bank Overnight Advances
|
131,000
|
|
|
105,000
|
|
|
33,000
|
|
Federal Home Loan
Bank Term Advances
|
45,000
|
|
|
55,000
|
|
|
55,000
|
|
Junior Subordinated
Obligations Issued to Unconsolidated
Subsidiary Trusts
|
20,000
|
|
|
20,000
|
|
|
20,000
|
|
Other
Liabilities
|
22,052
|
|
|
20,780
|
|
|
23,279
|
|
Total
Liabilities
|
2,688,410
|
|
|
2,510,862
|
|
|
2,499,814
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
Preferred Stock, $5
Par Value; 1,000,000 Shares Authorized
|
—
|
|
|
—
|
|
|
—
|
|
Common Stock, $1 Par
Value; 20,000,000 Shares Authorized
(19,035,565 Shares Issued at September 30, 2018; 18,481,301 at
December 31, 2017 and 18,481,301 at September 30, 2017)
|
19,035
|
|
|
18,481
|
|
|
18,481
|
|
Additional Paid-in
Capital
|
313,763
|
|
|
290,219
|
|
|
289,294
|
|
Retained
Earnings
|
24,258
|
|
|
28,818
|
|
|
22,581
|
|
Unallocated ESOP
Shares (9,932 Shares at September 30, 2018; 9,643
Shares at December 31, 2017 and 20,050 Shares at September 30,
2017)
|
(200)
|
|
|
(200)
|
|
|
(400)
|
|
Accumulated Other
Comprehensive Loss
|
(12,621)
|
|
|
(8,514)
|
|
|
(6,135)
|
|
Treasury Stock, at
Cost (4,584,147 Shares at September 30, 2018;
4,541,524 Shares at December 31, 2017 and 4,570,291 Shares at
September 30, 2017)
|
(79,425)
|
|
|
(79,201)
|
|
|
(79,173)
|
|
Total Stockholders'
Equity
|
264,810
|
|
|
249,603
|
|
|
244,648
|
|
Total Liabilities and
Stockholders' Equity
|
$
|
2,953,220
|
|
|
$
|
2,760,465
|
|
|
$
|
2,744,462
|
|
Arrow Financial
Corporation
Selected Quarterly
Information
(Dollars In
Thousands, Except Per Share Amounts -
Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
9/30/2018
|
|
|
6/30/2018
|
|
|
3/31/2018
|
|
|
12/31/2017
|
|
|
9/30/2017
|
|
Net Income
|
9,260
|
|
|
9,730
|
|
|
8,531
|
|
|
8,071
|
|
|
7,416
|
|
Transactions
Recorded in Net Income (Net of Tax):
|
|
|
|
|
|
|
|
|
|
Net Realized Gain
(Loss) on Available-for-Sale Securities
|
—
|
|
|
—
|
|
|
—
|
|
|
(278)
|
|
|
6
|
|
Net Unrealized Gain
on Equity Securities
|
85
|
|
|
166
|
|
|
13
|
|
|
—
|
|
|
—
|
|
Tax Benefit from Net
Deferred Tax Liability Revaluation
|
—
|
|
|
—
|
|
|
—
|
|
|
1,116
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Share and Per
Share Data:1
|
|
|
|
|
|
|
|
|
|
Period End Shares
Outstanding
|
14,441
|
|
|
14,424
|
|
|
14,368
|
|
|
14,348
|
|
|
14,308
|
|
Basic Average Shares
Outstanding
|
14,431
|
|
|
14,394
|
|
|
14,354
|
|
|
14,322
|
|
|
14,305
|
|
Diluted Average
Shares Outstanding
|
14,520
|
|
|
14,480
|
|
|
14,436
|
|
|
14,426
|
|
|
14,385
|
|
Basic Earnings Per
Share
|
$
|
0.64
|
|
|
$
|
0.68
|
|
|
$
|
0.59
|
|
|
$
|
0.56
|
|
|
$
|
0.52
|
|
Diluted Earnings Per
Share
|
0.64
|
|
|
0.67
|
|
|
0.59
|
|
|
0.56
|
|
|
0.52
|
|
Cash Dividend Per
Share
|
0.252
|
|
|
0.243
|
|
|
0.243
|
|
|
0.243
|
|
|
0.236
|
|
|
|
|
|
|
|
|
|
|
|
Selected Quarterly
Average Balances:
|
|
|
|
|
|
|
|
|
|
Interest-Bearing Deposits at
Banks
|
30,522
|
|
|
28,543
|
|
|
27,978
|
|
|
27,047
|
|
|
27,143
|
|
Investment Securities
|
636,847
|
|
|
647,913
|
|
|
642,442
|
|
|
660,043
|
|
|
677,368
|
|
Loans
|
2,089,651
|
|
|
2,026,598
|
|
|
1,971,240
|
|
|
1,930,590
|
|
|
1,892,766
|
|
Deposits
|
2,279,709
|
|
|
2,325,202
|
|
|
2,305,736
|
|
|
2,284,206
|
|
|
2,193,778
|
|
Other
Borrowed Funds
|
314,304
|
|
|
219,737
|
|
|
184,613
|
|
|
187,366
|
|
|
262,864
|
|
Shareholders' Equity
|
263,139
|
|
|
256,358
|
|
|
251,109
|
|
|
247,253
|
|
|
243,801
|
|
Total
Assets
|
2,879,854
|
|
|
2,823,061
|
|
|
2,763,706
|
|
|
2,744,180
|
|
|
2,725,653
|
|
Return on Average
Assets, annualized
|
1.28
|
%
|
|
1.38
|
%
|
|
1.25
|
%
|
|
1.17
|
%
|
|
1.08
|
%
|
Return on Average
Equity, annualized
|
13.96
|
%
|
|
15.22
|
%
|
|
13.78
|
%
|
|
12.95
|
%
|
|
12.07
|
%
|
Return on Average
Tangible Equity, annualized 2
|
15.36
|
%
|
|
16.80
|
%
|
|
15.24
|
%
|
|
14.36
|
%
|
|
13.40
|
%
|
Average Earning
Assets
|
2,757,020
|
|
|
2,703,054
|
|
|
2,641,660
|
|
|
2,617,680
|
|
|
2,597,277
|
|
Average Paying
Liabilities
|
2,110,924
|
|
|
2,100,085
|
|
|
2,050,661
|
|
|
2,029,811
|
|
|
2,012,802
|
|
Interest
Income
|
24,495
|
|
|
23,590
|
|
|
22,418
|
|
|
22,135
|
|
|
21,599
|
|
Tax-Equivalent
Adjustment 3
|
376
|
|
|
468
|
|
|
491
|
|
|
980
|
|
|
966
|
|
Interest Income,
Tax-Equivalent 3
|
24,871
|
|
|
24,058
|
|
|
22,909
|
|
|
23,115
|
|
|
22,565
|
|
Interest
Expense
|
3,498
|
|
|
2,628
|
|
|
2,016
|
|
|
1,821
|
|
|
1,949
|
|
Net Interest
Income
|
20,997
|
|
|
20,962
|
|
|
20,402
|
|
|
20,314
|
|
|
19,650
|
|
Net Interest Income,
Tax-Equivalent 3
|
21,373
|
|
|
21,430
|
|
|
20,893
|
|
|
21,294
|
|
|
20,616
|
|
Net Interest Margin,
annualized
|
3.02
|
%
|
|
3.11
|
%
|
|
3.13
|
%
|
|
3.08
|
%
|
|
3.00
|
%
|
Net Interest Margin,
Tax-Equivalent, annualized 3
|
3.08
|
%
|
|
3.18
|
%
|
|
3.21
|
%
|
|
3.23
|
%
|
|
3.15
|
%
|
|
|
|
|
|
|
|
|
|
|
Efficiency Ratio
Calculation: 4
|
|
|
|
|
|
|
|
|
|
Noninterest
Expense
|
16,026
|
|
|
16,192
|
|
|
15,955
|
|
|
16,045
|
|
|
15,548
|
|
Less: Intangible
Asset Amortization
|
65
|
|
|
66
|
|
|
67
|
|
|
69
|
|
|
69
|
|
Net Noninterest
Expense
|
15,961
|
|
|
16,126
|
|
|
15,888
|
|
|
15,976
|
|
|
15,479
|
|
Net Interest Income,
Tax-Equivalent
|
21,373
|
|
|
21,430
|
|
|
20,893
|
|
|
21,294
|
|
|
20,616
|
|
Noninterest
Income
|
7,352
|
|
|
7,911
|
|
|
6,888
|
|
|
6,752
|
|
|
7,141
|
|
Less: Net (Loss) Gain
on Sales of Securities
|
—
|
|
|
—
|
|
|
—
|
|
|
(458)
|
|
|
10
|
|
Less: Net Gain on
Equity Securities
|
114
|
|
|
223
|
|
|
18
|
|
|
—
|
|
|
—
|
|
Net Gross
Income
|
28,611
|
|
|
29,118
|
|
|
27,763
|
|
|
28,504
|
|
|
27,747
|
|
Efficiency
Ratio
|
55.79
|
%
|
|
55.38
|
%
|
|
57.23
|
%
|
|
56.05
|
%
|
|
55.79
|
%
|
|
|
|
|
|
|
|
|
|
|
Period-End Capital
Information:
|
|
|
|
|
|
|
|
|
|
Total Stockholders'
Equity (i.e. Book Value)
|
264,810
|
|
|
259,488
|
|
|
252,734
|
|
|
249,603
|
|
|
244,648
|
|
Book Value per
Share 1
|
18.34
|
|
|
17.99
|
|
|
17.59
|
|
|
17.40
|
|
|
17.10
|
|
Goodwill and Other
Intangible Assets, net
|
23,827
|
|
|
23,933
|
|
|
24,045
|
|
|
24,162
|
|
|
24,268
|
|
Tangible Book Value
per Share 1,2
|
16.69
|
|
|
16.33
|
|
|
15.92
|
|
|
15.71
|
|
|
15.40
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Ratios:5
|
|
|
|
|
|
Tier 1 Leverage
Ratio
|
9.67
|
%
|
|
9.65
|
%
|
|
9.62
|
%
|
|
9.49
|
%
|
|
9.30
|
%
|
Common Equity Tier 1
Capital Ratio
|
12.89
|
%
|
|
13.01
|
%
|
|
12.97
|
%
|
|
12.89
|
%
|
|
12.70
|
%
|
Tier 1 Risk-Based
Capital Ratio
|
13.89
|
%
|
|
14.04
|
%
|
|
14.03
|
%
|
|
13.97
|
%
|
|
13.79
|
%
|
Total Risk-Based
Capital Ratio
|
14.89
|
%
|
|
15.06
|
%
|
|
15.04
|
%
|
|
14.99
|
%
|
|
14.77
|
%
|
|
|
|
|
|
|
|
|
|
|
Assets Under Trust
Administration & Investment Mgmt
|
$
|
1,551,289
|
|
|
$
|
1,479,753
|
|
|
$
|
1,470,191
|
|
|
$
|
1,452,994
|
|
|
$
|
1,411,608
|
|
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 27, 2018, 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 we
believe provide investors with information that is useful in
understanding our financial performance.
|
|
|
9/30/2018
|
|
6/30/2018
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
Total Stockholders'
Equity (GAAP)
|
264,810
|
|
|
259,488
|
|
|
252,734
|
|
|
249,603
|
|
|
244,648
|
|
|
Less: Goodwill and
Other Intangible assets, net
|
23,827
|
|
|
23,933
|
|
|
24,045
|
|
|
24,162
|
|
|
24,268
|
|
|
Tangible Equity
(Non-GAAP)
|
$
|
240,983
|
|
|
$
|
235,555
|
|
|
$
|
228,689
|
|
|
$
|
225,441
|
|
|
$
|
220,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period End Shares
Outstanding
|
14,441
|
|
|
14,424
|
|
|
14,368
|
|
|
14,348
|
|
|
14,308
|
|
|
Tangible Book Value
per Share (Non-GAAP)
|
$
|
16.69
|
|
|
$
|
16.33
|
|
|
$
|
15.92
|
|
|
$
|
15.71
|
|
|
$
|
15.40
|
|
|
|
|
|
|
|
|
|
|
|
|
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 we believe provides investors with information that is useful
in understanding our financial performance.
|
|
|
9/30/2018
|
|
6/30/2018
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
Net Interest Income
(GAAP)
|
20,997
|
|
|
20,962
|
|
|
20,402
|
|
|
20,314
|
|
|
19,650
|
|
|
Add: Tax-Equivalent
adjustment (Non-GAAP)
|
376
|
|
|
468
|
|
|
491
|
|
|
980
|
|
|
966
|
|
|
Net Interest Income,
Tax-Equivalent (Non-GAAP)
|
$
|
21,373
|
|
|
$
|
21,430
|
|
|
$
|
20,893
|
|
|
$
|
21,294
|
|
|
$
|
20,616
|
|
|
Average Earning
Assets
|
2,757,020
|
|
|
2,703,054
|
|
|
2,641,660
|
|
|
2,617,680
|
|
|
2,597,277
|
|
|
Net Interest Margin
(Non-GAAP)*
|
3.08
|
%
|
|
3.18
|
%
|
|
3.21
|
%
|
|
3.23
|
%
|
|
3.15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
Non-GAAP Financial
Measures: Financial Institutions often use the "efficiency ratio",
a non-GAAP ratio, as a measure of expense control. We believe the
efficiency ratio provides investors with information that is useful
in understanding our financial performance. We define our
efficiency ratio as the ratio of our noninterest expense to our net
gross income (which equals our 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 September 30, 2018
CET1 ratio listed in the tables (i.e., 12.89%) exceeds the sum of
the required minimum CET1 ratio plus the fully phased-in Capital
Conservation Buffer (i.e., 7.00%).
|
|
|
9/30/2018
|
|
6/30/2018
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
Total Risk Weighted
Assets
|
2,000,049
|
|
|
1,934,890
|
|
|
1,889,719
|
|
|
1,856,242
|
|
|
1,830,730
|
|
|
Common Equity Tier 1
Capital
|
257,852
|
|
|
259,488
|
|
|
265,066
|
|
|
259,378
|
|
|
232,473
|
|
|
Common Equity Tier 1
Ratio
|
12.89
|
%
|
|
13.01
|
%
|
|
12.97
|
%
|
|
12.89
|
%
|
|
12.70
|
%
|
* Quarterly ratios have been annualized
Arrow Financial
Corporation
Consolidated
Financial Information
(Dollars in Thousands
- Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended:
|
09/30/2018
|
|
12/31/2017
|
|
9/30/2017
|
Loan
Portfolio
|
|
|
|
|
|
Commercial
Loans
|
$
|
127,112
|
|
|
$
|
129,249
|
|
|
$
|
125,360
|
|
Commercial Real
Estate Loans
|
470,122
|
|
|
444,248
|
|
|
440,715
|
|
Subtotal
Commercial Loan Portfolio
|
597,234
|
|
|
573,497
|
|
|
566,075
|
|
Consumer
Loans
|
694,188
|
|
|
602,827
|
|
|
592,029
|
|
Residential Real
Estate Loans
|
834,678
|
|
|
774,446
|
|
|
750,695
|
|
Total
Loans
|
$
|
2,126,100
|
|
|
$
|
1,950,770
|
|
|
$
|
1,908,799
|
|
Allowance for Loan
Losses
|
|
|
|
|
|
Allowance for Loan
Losses, Beginning of Quarter
|
$
|
19,640
|
|
|
$
|
17,695
|
|
|
$
|
17,442
|
|
Loans
Charged-off
|
(325)
|
|
|
(363)
|
|
|
(622)
|
|
Less Recoveries of
Loans Previously Charged-off
|
102
|
|
|
97
|
|
|
75
|
|
Net Loans
Charged-off
|
(223)
|
|
|
(266)
|
|
|
(547)
|
|
Provision for Loan
Losses
|
586
|
|
|
1,157
|
|
|
800
|
|
Allowance for Loan
Losses, End of Quarter
|
$
|
20,003
|
|
|
$
|
18,586
|
|
|
$
|
17,695
|
|
Nonperforming
Assets
|
|
|
|
|
|
Nonaccrual
Loans
|
$
|
4,468
|
|
|
$
|
5,526
|
|
|
$
|
5,482
|
|
Loans Past Due 90 or
More Days and Accruing
|
1,172
|
|
|
319
|
|
|
967
|
|
Loans Restructured
and in Compliance with Modified Terms
|
115
|
|
|
105
|
|
|
828
|
|
Total Nonperforming
Loans
|
5,755
|
|
|
5,950
|
|
|
7,277
|
|
Repossessed
Assets
|
47
|
|
|
109
|
|
|
62
|
|
Other Real Estate
Owned
|
1,173
|
|
|
1,738
|
|
|
1,651
|
|
Total Nonperforming
Assets
|
$
|
6,975
|
|
|
$
|
7,797
|
|
|
$
|
8,990
|
|
Key Asset Quality
Ratios
|
|
|
|
|
|
Net Loans Charged-off
to Average Loans,
Quarter-to-date Annualized
|
0.04
|
%
|
|
0.05
|
%
|
|
0.11
|
%
|
Provision for Loan
Losses to Average Loans,
Quarter-to-date Annualized
|
0.11
|
%
|
|
0.24
|
%
|
|
0.17
|
%
|
Allowance for Loan
Losses to Period-End Loans
|
0.94
|
%
|
|
0.95
|
%
|
|
0.93
|
%
|
Allowance for Loan
Losses to Period-End Nonperforming Loans
|
347.58
|
%
|
|
312.37
|
%
|
|
243.16
|
%
|
Nonperforming Loans
to Period-End Loans
|
0.27
|
%
|
|
0.31
|
%
|
|
0.38
|
%
|
Nonperforming Assets
to Period-End Assets
|
0.24
|
%
|
|
0.28
|
%
|
|
0.33
|
%
|
Nine-Month Period
Ended:
|
|
|
|
|
|
Allowance for Loan
Losses
|
|
|
|
|
|
Allowance for Loan
Losses, Beginning of Year
|
$
|
18,586
|
|
|
|
|
$
|
17,012
|
|
Loans
Charged-off
|
(960)
|
|
|
|
|
(1,197)
|
|
Less Recoveries of
Loans Previously Charged-off
|
416
|
|
|
|
|
300
|
|
Net Loans
Charged-off
|
(544)
|
|
|
|
|
(897)
|
|
Provision for Loan
Losses
|
1,961
|
|
|
|
|
1,580
|
|
Allowance for Loan
Losses, End of Period
|
$
|
20,003
|
|
|
|
|
$
|
17,695
|
|
Key Asset Quality
Ratios
|
|
|
|
|
|
Net Loans Charged-off
to Average Loans, Annualized
|
0.04
|
%
|
|
|
|
0.04
|
%
|
Provision for Loan
Losses to Average Loans, Annualized
|
0.13
|
%
|
|
|
|
0.09
|
%
|
View original
content:http://www.prnewswire.com/news-releases/arrow-reports-24-9-increase-in-third-quarter-net-income-300735062.html
SOURCE Arrow Financial Corporation