GLENS FALLS, N.Y., Oct. 21, 2020 /PRNewswire/ -- Arrow
Financial Corporation (NasdaqGS® – AROW) announced operating
results for the three month and nine month periods ended
September 30, 2020. Net income
for the third quarter of 2020 was $11.0
million, compared to $10.1
million in the third quarter of 2019. Net interest income
increased to $24.9 million in the
third quarter of 2020, compared to $22.3
million for the comparable quarter of 2019.
Arrow continues to manage its COVID-19 response with health and
safety concerns as a top priority. In the third quarter, our
Business Continuity Task Force focused on maintaining protocols
that have allowed us to keep our team and customers healthy and our
branches open. We actively monitor developments, and if future
restrictions are imposed, we are confident in our ability to
continue to provide essential banking services and meet our
customers' needs.
"Throughout this pandemic, Arrow has remained strong, and we
delivered again for our shareholders in the third quarter with
solid earnings, and both a cash and stock dividend," said
Thomas J. Murphy, President and CEO.
"We continued to assist our customers and communities with
temporary financial assistance, stimulus program support, and
forgiveness assistance for our 1,400 Small Business Administration
Paycheck Protection Program borrowers. As these challenging times
continue, I thank our team for their commitment to safety while
also demonstrating flexibility in adapting to the changing needs of
our customers."
In the third quarter, Arrow opened a Saratoga National Bank Branch as well as a Capital Region Business
Development Office in Latham, NY.
Both locations continue our forward momentum and expansion into the
Capital Region. Also in the third quarter, Arrow closed the Glens
Falls National Bank Route 9 Queensbury Branch, consolidating the
operations of that branch with those of other nearby branches.
The following expands on our COVID-19 response:
COVID-19 Safety Measures: Throughout the third quarter,
Arrow maintained open lobbies for the majority of its bank branches
and insurance offices. Safety measures continue to be followed,
including clear shields for desks and teller lines, hand sanitizing
stations, required face coverings, and social distancing markers.
Traffic to lobbies is stable, and we continue to promote usage of
no-contact alternatives such as digital banking, drive-ins and
ATMs. While some positions have returned to the office, a
significant portion of the Arrow workforce remains remote as part
of our risk-mitigation strategy. Additionally, employee travel
remains paused, self-quarantine protocol is in place for personal
travel to hot spots, in-person meetings are minimized, social
distancing is strongly enforced, and increased cleaning and
sanitizing of our locations continues. We believe these measures
have helped to keep our workforce healthy and has aided in
community efforts to slow the spread of the COVID-19 virus in our
footprint. We will continue to utilize these measures as
appropriate based on public health guidance.
COVID-19 Customer Support: During the third quarter,
support continued for customers experiencing financial hardship. We
worked closely with individuals and businesses seeking temporary
financial assistance. On the small business side, support for Small
Business Administration Paycheck Protection Program borrowers
shifted from taking new applications to preparing for loan
forgiveness. In total, we have assisted more than 1,400 small
businesses, and more than $142.7
million in such loans have been funded. Our team has engaged
in regular communication around the ever-changing guidelines and
the start of our digital forgiveness application process.
COVID-19 Operational Impact: While COVID-19 did not have
a material adverse effect on our third quarter 2020 financial
results, we are actively monitoring the impact of the pandemic on
our business and results of operations and we can make no assurance
as to the future negative impact on our operations or results.
Currently, all of our banking locations and some of our insurance
locations are open to the public, and through a mix of onsite and
remote work amongst our team, we continue to meet customer needs
and deliver high-quality service daily.
The following expands upon our third quarter financial
results:
Loan Growth: Total loans reached $2.6 billion as of September 30, 2020, which represents an increase
of $256.9 million, or 11.0%, from
September 30, 2019. Loan growth for
the third quarter of 2020 was $30.5
million. The consumer loan portfolio grew by $43.7 million, or 5.4%, as compared to
September 30, 2019, primarily within
the indirect automobile lending program. Total outstanding
residential real estate loans increased $36.2 million, or 4.1%, as compared to
September 30, 2019. Total outstanding
commercial loans increased $176.9
million, or 27.6%, as compared to September 30, 2019. The increase in
commercial loans includes $142.7
million in Small Business Administration Paycheck Protection
Program loans.
Deposit Growth: At September 30,
2020, deposit balances reached $3.3
billion, up $650.3 million, or
24.9%, from the prior-year level. Deposit growth for the third
quarter of 2020 was $196.1 million.
Noninterest-bearing deposits represented 21.1% of total deposits at
September 30, 2020, compared to
19.8% of total deposits on September 30, 2019. At September 30, 2020, other time deposits were
$194.1 million, a decrease of $75.6 million compared to the prior year. Municipal deposits increased
$218.8 million, or 34.6% from
September 30, 2019.
Net Interest Income: Net interest income for the third
quarter increased to $24.9 million,
up 11.6% from $22.3 million in the
comparable quarter of 2019. The net interest margin was 2.90% for
the quarter, compared to 3.07% for the third quarter of 2019. The
decrease in net interest margin from the prior year was due to a
variety of factors, including lower interest rates, increased cash
balances and the impact of participating in the Small Business
Administration Paycheck Protection Program.
Noninterest Income: Noninterest income for the three
months ended September 30, 2020 was
$8.7 million, compared to
$7.7 million in the comparable 2019
quarter. For the third quarter of 2020, the net gain on the sale of
loans was $1.4 million. In addition,
income from fiduciary activities for the three months ended
September 30, 2020 increased over the
comparable quarter of 2019.
Noninterest Expense: Noninterest expense for the third
quarter of 2020 increased 4.1% to $17.5 million, from $16.8 million for the third quarter of 2019.
Salaries and benefits increased $393
thousand. In the third quarter, both the Saratoga
National Bank Latham Branch and the Capital Region Business
Development Office opened, increasing occupancy expenses for
the quarter.
Provision for Income Taxes: The provision for income
taxes was $2.8 million for the third
quarter of 2020, compared to $2.6
million for the same quarter of 2019. The effective income
tax rates for the nine month periods ended September 30, 2020 and 2019 were 20.7% and 20.3%,
respectively.
Asset Quality: Asset quality remained strong at
September 30, 2020, with continued
low levels of nonperforming loans and net charge-offs.
Nonperforming loans at September 30,
2020, were $6.3 million, up
$1.6 million from the level at
September 30, 2019. Net charge-offs,
expressed as an annualized percentage of average loans outstanding,
were 0.02% for the three month period ended September 30, 2020, a decrease from 0.05% for the
three month period ended September 30,
2019. The allowance for loan losses was $28.4 million at September
30, 2020, which represented 1.10% of loans outstanding, as
compared to 0.90% at September 30,
2019. Loan loss provision expense for the third quarter of
2020 was $2.3 million, up
$1.8 million from the provision for
loan losses for the comparable 2019 quarter. Although credit
quality remains strong, the increase in provision for loan losses
reflects the uncertainty resulting from the
COVID-19 pandemic.
Liquidity: At September 30,
2020, Arrow's liquidity position was strong. Deposit growth
for the third quarter of 2020 was $196.1
million and interest-bearing cash balances at September 30, 2020 were $396.4 million. Arrow continues to be
well-prepared to address volatility due to the COVID-19 pandemic,
which may affect current cash and deposit balances. At September 30, 2020, contingent collateralized
lines of credit were established and available through the Federal
Home Loan Bank of New York and
Federal Reserve Bank, totaling $1.3
billion. Arrow also has additional liquidity options
available to it including unsecured lines of credit, such as Fed
Funds and brokered markets.
Capital: Total stockholders' equity was $325.7 million at September 30, 2020, up $33.4 million, or 11.4%, from September 30, 2019. Arrow's consistent earnings
and measured dividend practices have created strong capital
reserves, which make the company well-positioned to address the
uncertainties related to the COVID-19 pandemic. Overall regulatory
capital ratios also remained strong in 2020, with Arrow's common
equity tier 1 ratio estimated to be 13.20% and the total risk-based
capital ratio estimated to be 15.28% at September 30, 2020. These capital levels at Arrow
and both of the subsidiary banks continue to exceed the "well
capitalized" regulatory standard.
Cash and Stock Dividends: On September 15, 2020, the Company distributed a
cash dividend of $0.26 per share. The
cash dividend was 3% higher than the cash dividend paid by the
Company in the third quarter of 2019 when adjusted for the 3% stock
dividend distributed on September 27,
2019. Additionally, a 3% stock dividend was distributed on
September 25, 2020. This is the 12th
consecutive year the Company has declared a stock dividend.
Industry Recognition: 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. The Company 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). 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, 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. 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, 2019,
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,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
INTEREST AND
DIVIDEND INCOME
|
|
|
|
|
|
|
|
Interest and Fees on
Loans
|
$
24,706
|
|
$
24,620
|
|
$
74,657
|
|
$
70,543
|
Interest on Deposits at
Banks
|
64
|
|
182
|
|
229
|
|
572
|
Interest and Dividends
on Investment Securities:
|
|
|
|
|
|
|
|
Fully
Taxable
|
1,557
|
|
2,018
|
|
5,621
|
|
6,671
|
Exempt from Federal
Taxes
|
969
|
|
1,132
|
|
3,017
|
|
3,606
|
Total Interest and
Dividend Income
|
27,296
|
|
27,952
|
|
83,524
|
|
81,392
|
INTEREST
EXPENSE
|
|
|
|
|
|
|
|
Interest-Bearing
Checking Accounts
|
264
|
|
500
|
|
1,061
|
|
1,435
|
Savings
Deposits
|
806
|
|
2,317
|
|
4,450
|
|
5,926
|
Time Deposits over
$250,000
|
292
|
|
451
|
|
1,263
|
|
1,362
|
Other Time
Deposits
|
576
|
|
1,255
|
|
2,360
|
|
3,099
|
Federal Funds Purchased
and
|
|
|
|
|
|
|
|
Securities Sold Under
Agreements to Repurchase
|
17
|
|
28
|
|
55
|
|
75
|
Federal Home Loan Bank
Advances
|
219
|
|
820
|
|
865
|
|
3,513
|
Junior Subordinated
Obligations Issued to
|
|
|
|
|
|
|
|
Unconsolidated
Subsidiary Trusts
|
173
|
|
250
|
|
574
|
|
780
|
Interest on Financing
Leases
|
49
|
|
28
|
|
148
|
|
71
|
Total Interest
Expense
|
2,396
|
|
5,649
|
|
10,776
|
|
16,261
|
NET INTEREST
INCOME
|
24,900
|
|
22,303
|
|
72,748
|
|
65,131
|
Provision for Loan
Losses
|
2,271
|
|
518
|
|
8,083
|
|
1,445
|
NET INTEREST
INCOME AFTER PROVISION FOR LOAN LOSSES
|
22,629
|
|
21,785
|
|
64,665
|
|
63,686
|
NONINTEREST
INCOME
|
|
|
|
|
|
|
|
Income From Fiduciary
Activities
|
2,265
|
|
2,212
|
|
6,613
|
|
6,571
|
Fees for Other Services
to Customers
|
2,619
|
|
2,623
|
|
7,348
|
|
7,570
|
Insurance
Commissions
|
1,713
|
|
1,936
|
|
5,077
|
|
5,590
|
Net (Loss) Gain on
Securities
|
(72)
|
|
146
|
|
(552)
|
|
222
|
Net Gain on Sales of
Loans
|
1,433
|
|
257
|
|
2,193
|
|
501
|
Other Operating
Income
|
739
|
|
517
|
|
2,876
|
|
1,020
|
Total Noninterest
Income
|
8,697
|
|
7,691
|
|
23,555
|
|
21,474
|
NONINTEREST
EXPENSE
|
|
|
|
|
|
|
|
Salaries and Employee
Benefits
|
10,408
|
|
10,015
|
|
31,003
|
|
29,061
|
Occupancy Expenses,
Net
|
1,427
|
|
1,324
|
|
4,221
|
|
4,023
|
Technology and
Equipment Expense
|
3,228
|
|
3,305
|
|
9,807
|
|
9,689
|
FDIC
Assessments
|
309
|
|
(480)
|
|
770
|
|
(56)
|
Other Operating
Expense
|
2,115
|
|
2,627
|
|
6,685
|
|
7,634
|
Total Noninterest
Expense
|
17,487
|
|
16,791
|
|
52,486
|
|
50,351
|
INCOME BEFORE
PROVISION FOR INCOME TAXES
|
13,839
|
|
12,685
|
|
35,734
|
|
34,809
|
Provision for Income
Taxes
|
2,793
|
|
2,618
|
|
7,402
|
|
7,074
|
NET
INCOME
|
$
11,046
|
|
$
10,067
|
|
$
28,332
|
|
$
27,735
|
Average Shares
Outstanding 1:
|
|
|
|
|
|
|
|
Basic
|
15,472
|
|
15,404
|
|
15,453
|
|
15,375
|
Diluted
|
15,481
|
|
15,441
|
|
15,467
|
|
15,417
|
Per Common
Share:
|
|
|
|
|
|
|
|
Basic
Earnings
|
$
0.71
|
|
$
0.65
|
|
$
1.83
|
|
$
1.80
|
Diluted
Earnings
|
0.71
|
|
0.65
|
|
1.83
|
|
1.80
|
1 2019 Share and Per Share Amounts have been
restated for the September 25, 2020,
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,
|
2020
|
2019
|
2019
|
ASSETS
|
|
|
|
Cash and Due From
Banks
|
$
54,286
|
$
47,035
|
$
65,882
|
Interest-Bearing
Deposits at Banks
|
396,380
|
23,186
|
26,416
|
Investment
Securities:
|
|
|
|
Available-for-Sale at
Fair Value
|
374,928
|
357,334
|
314,182
|
Held-to-Maturity
(Approximate Fair Value of $233,501 at
|
|
|
|
September 30, 2020;
$249,618 at December 31, 2019; and
|
|
|
|
$259,128 at September
30, 2019)
|
224,799
|
245,065
|
255,095
|
Equity
Securities
|
1,511
|
2,063
|
1,996
|
FHLB and Federal
Reserve Bank Stock
|
5,574
|
10,317
|
6,627
|
Loans
|
2,592,455
|
2,386,120
|
2,335,591
|
Allowance for Loan
Losses
|
(28,446)
|
(21,187)
|
(20,931)
|
Net Loans
|
2,564,009
|
2,364,933
|
2,314,660
|
Premises and Equipment,
Net
|
42,075
|
40,629
|
40,228
|
Goodwill
|
21,873
|
21,873
|
21,873
|
Other Intangible
Assets, Net
|
1,789
|
1,661
|
1,713
|
Other Assets
|
90,460
|
70,179
|
64,150
|
Total
Assets
|
$
3,777,684
|
$
3,184,275
|
$
3,112,822
|
LIABILITIES
|
|
|
|
Noninterest-Bearing
Deposits
|
690,232
|
484,944
|
516,876
|
Interest-Bearing
Checking Accounts
|
912,980
|
689,221
|
801,446
|
Savings
Deposits
|
1,354,956
|
1,046,568
|
929,691
|
Time Deposits over
$250,000
|
112,555
|
123,968
|
96,770
|
Other Time
Deposits
|
194,135
|
271,353
|
269,764
|
Total
Deposits
|
3,264,858
|
2,616,054
|
2,614,547
|
Federal Funds Purchased
and
|
|
|
|
Securities Sold Under
Agreements to Repurchase
|
73,949
|
51,099
|
72,869
|
Federal Home Loan Bank
Overnight Advances
|
—
|
130,000
|
48,000
|
Federal Home Loan Bank
Term Advances
|
50,000
|
30,000
|
30,000
|
Junior Subordinated
Obligations Issued to Unconsolidated
|
|
|
|
Subsidiary
Trusts
|
20,000
|
20,000
|
20,000
|
Finance
Leases
|
5,228
|
5,254
|
5,263
|
Other
Liabilities
|
37,989
|
30,140
|
29,915
|
Total
Liabilities
|
3,452,024
|
2,882,547
|
2,820,594
|
STOCKHOLDERS'
EQUITY
|
|
|
|
Preferred Stock, $1 Par
Value and 1,000,000 Shares
|
|
|
|
Authorized at September
30, 2020, December 31, 2019 and
|
|
|
|
September 30,
2019
|
—
|
—
|
—
|
Common Stock, $1 Par
Value; 30,000,000 Shares Authorized
|
|
|
|
(20,194,474 Shares
Issued at September 30, 2020 and
|
|
|
|
19,606,449 at December
31, 2019 and September 30, 2019)
|
20,194
|
19,606
|
19,606
|
Additional Paid-in
Capital
|
353,062
|
335,355
|
334,597
|
Retained
Earnings
|
33,434
|
33,218
|
27,375
|
Unallocated ESOP Shares
(None at September 30, 2020 and
|
|
|
|
December 31, 2019 and
5,151 Shares at September 30, 2019)
|
—
|
—
|
(100)
|
Accumulated Other
Comprehensive Loss
|
(253)
|
(6,357)
|
(8,979)
|
Treasury Stock, at Cost
(4,705,102 Shares at September 30,
|
|
|
|
2020; 4,608,258 Shares
at December 31, 2019 and 4,632,657
|
|
|
|
Shares at September 30,
2019)
|
(80,777)
|
(80,094)
|
(80,271)
|
Total Stockholders'
Equity
|
325,660
|
301,728
|
292,228
|
Total Liabilities and
Stockholders' Equity
|
$
3,777,684
|
$
3,184,275
|
$
3,112,822
|
Arrow Financial Corporation
Selected Quarterly Information
(Dollars In Thousands, Except Per Share Amounts - Unaudited)
Quarter
Ended
|
9/30/2020
|
|
6/30/2020
|
|
3/31/2020
|
|
12/31/2019
|
|
9/30/2019
|
Net Income
|
$
11,046
|
|
$
9,159
|
|
$
8,127
|
|
$
9,740
|
|
$
10,067
|
Transactions in Net
Income (Net of Tax):
|
|
|
|
|
|
|
|
|
|
Net Changes in Fair
Value of Equity Investments
|
(53)
|
|
(80)
|
|
(279)
|
|
50
|
|
109
|
Share and Per Share
Data:1
|
|
|
|
|
|
|
|
|
|
Period End Shares
Outstanding
|
15,489
|
|
15,461
|
|
15,432
|
|
15,448
|
|
15,418
|
Basic Average Shares
Outstanding
|
15,472
|
|
15,441
|
|
15,446
|
|
15,427
|
|
15,404
|
Diluted Average Shares
Outstanding
|
15,481
|
|
15,448
|
|
15,476
|
|
15,476
|
|
15,441
|
Basic Earnings Per
Share
|
$
0.71
|
|
$
0.59
|
|
$
0.53
|
|
$
0.63
|
|
$
0.65
|
Diluted Earnings Per
Share
|
0.71
|
|
0.59
|
|
0.53
|
|
0.63
|
|
0.65
|
Cash Dividend Per
Share
|
0.252
|
|
0.252
|
|
0.252
|
|
0.252
|
|
0.245
|
Selected Quarterly
Average Balances:
|
|
|
|
|
|
|
|
|
|
Interest-Bearing
Deposits at Banks
|
$ 242,928
|
|
$ 155,931
|
|
$
32,787
|
|
$
28,880
|
|
$
27,083
|
Investment
Securities
|
592,457
|
|
607,094
|
|
603,748
|
|
582,982
|
|
545,073
|
Loans
|
2,582,253
|
|
2,518,198
|
|
2,394,346
|
|
2,358,110
|
|
2,308,879
|
Deposits
|
3,082,499
|
|
2,952,432
|
|
2,670,009
|
|
2,607,421
|
|
2,472,528
|
Other Borrowed
Funds
|
136,117
|
|
129,383
|
|
170,987
|
|
177,877
|
|
231,291
|
Shareholders'
Equity
|
324,269
|
|
316,380
|
|
306,527
|
|
296,124
|
|
289,016
|
Total
Assets
|
3,583,322
|
|
3,437,155
|
|
3,180,857
|
|
3,113,114
|
|
3,023,043
|
Return on Average
Assets, annualized
|
1.23 %
|
|
1.07 %
|
|
1.03 %
|
|
1.24 %
|
|
1.32 %
|
Return on Average
Equity, annualized
|
13.55 %
|
|
11.64 %
|
|
10.66 %
|
|
13.05 %
|
|
13.82 %
|
Return on Average
Tangible Equity, annualized 2
|
14.61 %
|
|
12.58 %
|
|
11.55 %
|
|
14.18 %
|
|
15.05 %
|
Average Earning
Assets
|
$
3,417,638
|
|
$
3,281,223
|
|
$
3,030,881
|
|
$
2,969,972
|
|
$
2,881,035
|
Average Paying
Liabilities
|
2,545,435
|
|
2,457,690
|
|
2,362,515
|
|
2,293,804
|
|
2,213,642
|
Interest
Income
|
27,296
|
|
28,002
|
|
28,226
|
|
28,367
|
|
27,952
|
Tax-Equivalent
Adjustment 3
|
284
|
|
281
|
|
288
|
|
321
|
|
344
|
Interest Income,
Tax-Equivalent 3
|
27,580
|
|
28,283
|
|
28,514
|
|
28,688
|
|
28,296
|
Interest
Expense
|
2,396
|
|
3,160
|
|
5,220
|
|
5,449
|
|
5,649
|
Net Interest
Income
|
24,900
|
|
24,842
|
|
23,006
|
|
22,918
|
|
22,303
|
Net Interest Income,
Tax-Equivalent 3
|
25,184
|
|
25,123
|
|
23,294
|
|
23,239
|
|
22,647
|
Net Interest Margin,
annualized
|
2.90 %
|
|
3.05 %
|
|
3.05 %
|
|
3.06 %
|
|
3.07 %
|
Net Interest Margin,
Tax-Equivalent, annualized 3
|
2.93 %
|
|
3.08 %
|
|
3.09 %
|
|
3.10 %
|
|
3.12 %
|
Efficiency Ratio
Calculation: 4
|
|
|
|
|
|
|
|
|
|
Noninterest
Expense
|
$
17,487
|
|
$
17,245
|
|
$
17,754
|
|
$
17,099
|
|
$
16,791
|
Less: Intangible Asset
Amortization
|
56
|
|
57
|
|
58
|
|
60
|
|
61
|
Net Noninterest
Expense
|
$
17,431
|
|
$
17,188
|
|
$
17,696
|
|
$
17,039
|
|
$
16,730
|
Net Interest Income,
Tax-Equivalent
|
$
25,184
|
|
$
25,123
|
|
$
23,294
|
|
$
23,238
|
|
$
22,647
|
Noninterest
Income
|
8,697
|
|
7,164
|
|
7,694
|
|
7,081
|
|
7,691
|
Less: Net Changes in
Fair Value of Equity Invest.
|
(72)
|
|
(106)
|
|
(374)
|
|
67
|
|
146
|
Net Gross
Income
|
$
33,953
|
|
$
32,393
|
|
$
31,362
|
|
$
30,252
|
|
$
30,192
|
Efficiency
Ratio
|
51.34 %
|
|
53.06 %
|
|
56.42 %
|
|
56.32 %
|
|
55.41 %
|
Period-End Capital
Information:
Total Stockholders'
Equity (i.e. Book Value)
|
$ 325,660
|
|
$ 317,687
|
|
$ 309,398
|
|
$ 301,728
|
|
$ 292,228
|
Book Value per Share
1
|
21.03
|
|
20.55
|
|
20.05
|
|
19.53
|
|
18.95
|
Goodwill and Other
Intangible Assets, net
|
23,662
|
|
23,535
|
|
23,513
|
|
23,534
|
|
23,586
|
Tangible Book Value per
Share 1,2
|
19.50
|
|
19.03
|
|
18.53
|
|
18.01
|
|
17.42
|
Capital
Ratios:5
|
|
|
|
|
|
|
|
|
|
Tier 1 Leverage
Ratio
|
9.17 %
|
|
9.32 %
|
|
9.87 %
|
|
9.98 %
|
|
10.04 %
|
Common Equity Tier 1
Capital Ratio
|
13.20 %
|
|
13.07 %
|
|
12.84 %
|
|
12.94 %
|
|
12.93 %
|
Tier 1 Risk-Based
Capital Ratio
|
14.06 %
|
|
13.94 %
|
|
13.72 %
|
|
13.83 %
|
|
13.85 %
|
Total Risk-Based
Capital Ratio
|
15.28 %
|
|
15.10 %
|
|
14.76 %
|
|
14.78 %
|
|
14.81 %
|
Assets Under Trust
Admin. & Investment Mgmt.
|
$
1,537,128
|
|
$
1,502,866
|
|
$
1,342,531
|
|
$
1,543,653
|
|
$
1,485,116
|
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 25, 2020,
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.
|
9/30/2020
|
6/30/2020
|
3/31/2020
|
12/31/2019
|
9/30/2019
|
Total Stockholders'
Equity (GAAP)
|
$ 325,660
|
$ 317,687
|
$ 309,398
|
$ 301,728
|
$ 292,228
|
Less: Goodwill and
Other Intangible
|
|
|
|
|
|
assets, net
|
23,662
|
23,535
|
23,513
|
23,534
|
23,586
|
Tangible Equity
(Non-GAAP)
|
$
301,998
|
$
294,152
|
$
285,885
|
$
278,194
|
$
268,642
|
Period End Shares
Outstanding
|
15,489
|
15,461
|
15,432
|
15,448
|
15,418
|
Tangible Book Value per
Share (Non-
|
|
|
|
|
|
GAAP)
|
$
19.50
|
$
19.03
|
$
18.53
|
$
18.01
|
$
17.42
|
Net Income
|
11,046
|
9,159
|
8,127
|
9,740
|
10,067
|
Return on Average
Tangible Equity (Net Income/Tangible Equity -
|
|
|
|
|
|
Annualized)
|
14.61 %
|
12.58 %
|
11.55 %
|
14.18 %
|
15.05 %
|
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.
|
9/30/2020
|
6/30/2020
|
3/31/2020
|
12/31/2019
|
9/30/2019
|
Interest Income
(GAAP)
|
$
27,296
|
$
28,002
|
$
28,226
|
$
28,367
|
$
27,952
|
Add: Tax-Equivalent
adjustment (Non-GAAP)
|
284
|
281
|
288
|
321
|
344
|
Interest Income - Tax
Equivalent (Non-GAAP)
|
$
27,580
|
$
28,283
|
$
28,514
|
$
28,688
|
$
28,296
|
Net Interest Income
(GAAP)
|
$
24,900
|
$
24,842
|
$
23,006
|
$
22,918
|
$
22,303
|
Add: Tax-Equivalent
adjustment (Non-GAAP)
|
284
|
281
|
288
|
321
|
344
|
Net Interest
Income - Tax Equivalent (Non-GAAP)
|
$
25,184
|
$
25,123
|
$
23,294
|
$
23,239
|
$
22,647
|
Average Earning
Assets
|
$3,417,638
|
$3,281,223
|
$3,030,881
|
$2,969,972
|
$2,881,035
|
Net Interest Margin
(Non-GAAP)*
|
2.93 %
|
3.08 %
|
3.09 %
|
3.10 %
|
3.12 %
|
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, 2020 listed in the tables (i.e.,
13.20%) exceeds the sum of the required minimum CET1 ratio plus the
fully phased-in Capital Conservation Buffer (i.e., 7.00%).
|
9/30/2020
|
|
6/30/2020
|
3/31/2020
|
12/31/2019
|
9/30/2019
|
Total Risk Weighted
Assets
|
$2,321,637
|
|
$2,283,430
|
$2,275,902
|
$2,237,127
|
$2,184,214
|
Common Equity Tier 1
Capital
|
306,356
|
|
298,362
|
292,165
|
289,409
|
282,485
|
Common Equity Tier 1
Ratio
|
13.20 %
|
|
13.07 %
|
12.84 %
|
12.94 %
|
12.93 %
|
* Quarterly ratios have been annualized
Arrow Financial Corporation
Consolidated Financial Information
(Dollars in Thousands -
Unaudited)
Quarter
Ended:
Loan
Portfolio
|
9/30/2020
|
12/31/2019
|
9/30/2019
|
Commercial
Loans
|
$
275,921
|
$
150,660
|
$
142,135
|
Commercial Real Estate
Loans
|
541,233
|
510,541
|
498,083
|
Subtotal Commercial
Loan Portfolio
|
817,154
|
661,201
|
640,218
|
Consumer
Loans
|
849,526
|
811,198
|
805,798
|
Residential Real Estate
Loans
|
925,775
|
913,721
|
889,575
|
Total Loans
|
$
2,592,455
|
$
2,386,120
|
$
2,335,591
|
Allowance for Loan
Losses
|
|
|
|
Allowance for Loan
Losses, Beginning of Quarter
|
$
26,300
|
$
20,931
|
$
20,695
|
Loans
Charged-off
|
(392)
|
(503)
|
(402)
|
Less Recoveries of
Loans Previously Charged-off
|
267
|
125
|
120
|
Net Loans
Charged-off
|
(125)
|
(378)
|
(282)
|
Provision for Loan
Losses
|
2,271
|
634
|
518
|
Allowance for Loan
Losses, End of Quarter
|
$
28,446
|
$
21,187
|
$
20,931
|
Nonperforming
Assets
|
|
|
|
Nonaccrual
Loans
|
$
6,004
|
$
4,005
|
$
3,465
|
Loans Past Due 90 or
More Days and Accruing
|
121
|
253
|
1,066
|
Loans Restructured and
in Compliance with Modified Terms
|
157
|
143
|
150
|
Total Nonperforming
Loans
|
6,282
|
4,401
|
4,681
|
Repossessed
Assets
|
126
|
139
|
76
|
Other Real Estate
Owned
|
—
|
1,122
|
1,198
|
Total Nonperforming
Assets
|
$
6,408
|
$
5,662
|
$
5,955
|
Key Asset Quality
Ratios
|
|
|
|
Net Loans Charged-off
to Average Loans,
|
|
|
|
Quarter-to-date
Annualized
|
0.02 %
|
0.06 %
|
0.05 %
|
Provision for
Loan Losses to Average Loans, Quarter-to-date Annualized
|
0.35 %
|
0.11 %
|
0.09 %
|
Allowance for Loan
Losses to Period-End Loans
|
1.10 %
|
0.89 %
|
0.90 %
|
Allowance for Loan
Losses to Period-End Nonperforming Loans
|
452.82 %
|
481.41 %
|
447.15 %
|
Nonperforming Loans to
Period-End Loans
|
0.24 %
|
0.18 %
|
0.20 %
|
Nonperforming Assets to
Period-End Assets
|
0.17 %
|
0.18 %
|
0.19 %
|
Nine Month Period
Ended:
|
|
|
|
Allowance for Loan
Losses
|
|
|
|
Allowance for Loan
Losses, Beginning of Year
|
$
21,187
|
|
$
20,196
|
Loans
Charged-off
|
(1,360)
|
|
(1,232)
|
Less Recoveries of
Loans Previously Charged-off
|
536
|
|
522
|
Net Loans
Charged-off
|
(824)
|
|
(710)
|
Provision for Loan
Losses
|
8,083
|
|
1,445
|
Allowance for Loan
Losses, End of Period
|
$
28,446
|
|
$
20,931
|
Key Asset Quality
Ratios
|
|
|
|
Net Loans Charged-off
to Average Loans, Annualized
|
0.04 %
|
|
0.04 %
|
Provision for Loan
Losses to Average Loans, Annualized
|
0.43 %
|
|
0.09 %
|
View original
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SOURCE Arrow Financial Corporation