分组1 - Arrow Financial reported quarterly earnings of $0.46 per share, missing the Zacks Consensus Estimate of $0.50 per share, and down from $0.71 per share a year ago, representing an earnings surprise of -8% [1] - The company posted revenues of $33.1 million for the quarter, missing the Zacks Consensus Estimate by 5.46%, and down from $37.74 million year-over-year [1] - Over the last four quarters, Arrow Financial has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [1] 分组2 - Arrow Financial shares have declined approximately 9.8% since the beginning of the year, contrasting with the S&P 500's gain of 1.6% [2] - The current consensus EPS estimate for the upcoming quarter is $0.55 on revenues of $35.36 million, and for the current fiscal year, it is $2.60 on revenues of $149.48 million [4] - The Zacks Industry Rank for Banks - Northeast is in the top 44% of over 250 Zacks industries, indicating that the industry outlook can significantly impact stock performance [4]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Large accelerated filer ☐ Accelerated filer ☑ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standard provided pursuant to Section 13(a) of the Exchange Act. __ ☐ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Large accelerated filer ☐ Accelerated filer ☑ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standard provided pursuant to Section 13(a) of the Exchange Act. __ ☐ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-12507 ARROW FINANCIAL CORPORATION (Exact name of registrant as specified in its charter) | --- | --- | --- | --- | --- | |---------------------------------------------------- ...

Financial Performance - Net income for the quarter ended December 31, 2022, was $12,087 million, a decrease from $12,163 million in the previous quarter[104] - Basic earnings per share remained stable at $0.73, consistent with the previous quarter's $0.74[104] - Net income for the period was $48,799,000, a decrease from $49,857,000 in the previous period[105] - Basic earnings per share (EPS) was $2.95, down from $3.02 in the prior period[105] - For the year ended December 31, 2022, net income was $48.8 million, down 2.1% from $49.9 million in 2021[115] - Diluted EPS for 2022 was $2.95, a decrease of 2.1% from $3.01 in 2021[115] - Arrow reported a net income of $12.1 million for Q4 2022, an increase of $1.8 million, or 17.2%, from Q4 2021[205] Assets and Equity - Total assets increased to $4,074,028 million from $4,047,738 million in the prior quarter[104] - Total stockholders' equity was $353,538 million, compared to $345,550 million in the previous quarter[104] - Average assets increased to $4,047,480,000 from $3,882,642,000, representing a growth of approximately 4.3%[105] - Total assets were $3.97 billion at December 31, 2022, a decrease of $58.4 million, or 1.5%, from December 31, 2021[115] - Total shareholders' equity was $353.5 million at period-end, a decrease of $17.6 million, or 4.8%, from year-end 2021[117] - Total stockholders' equity decreased by $17.6 million, or 4.8%, to $353.5 million as of December 31, 2022, primarily due to a comprehensive loss of $50.0 million and cash dividends of $17.4 million[195] Income and Expenses - Net interest income for the quarter was $30,579 million, compared to $30,901 million in the previous quarter[104] - Noninterest expense was reported at $20,792 million, an increase from $21,448 million in the prior quarter[104] - Efficiency ratio improved to 54.63%, down from 55.01% in the previous quarter[104] - Net interest income was $118,343,000, compared to $110,355,000 in the previous period, reflecting an increase of about 7.9%[105] - Noninterest expense rose to $81,530,000 from $78,048,000, indicating an increase of approximately 3.2%[105] - Noninterest expenses for 2022 were $81.5 million, an increase of $3.5 million, or 4.5%, from 2021[147] Credit Quality - Nonperforming loans as a percentage of period-end loans were 0.40%, down from 0.44%[105] - The provision for credit losses related to the loan portfolio was $4.8 million, compared to $272 thousand in 2021[115] - Nonperforming assets were $12.6 million at December 31, 2022, representing 0.32% of period-end assets[115] - Provision for credit losses increased significantly to $4.8 million in 2022, up from $0.3 million in 2021[135] - Total nonperforming assets at period-end were $12.576 million, compared to $11.790 million in 2021[137] - Nonaccrual loans represented 0.68% of total loans outstanding as of December 31, 2022, compared to 0.46% in 2021, indicating a deterioration in credit quality[173] Loans and Lending Activities - Total loan balances reached $3.0 billion, up $315 million, or 11.8%, from the prior year[115] - Total loans grew by $315.3 million, or 11.8%, from December 31, 2021, to December 31, 2022[118] - Consumer loans, primarily automobile loans, comprised approximately 35.7% of the total loan portfolio, totaling $1.1 billion[120] - Residential real estate loan originations were $217.5 million in 2022, down from $244.5 million in 2021, indicating a decline in demand due to rising interest rates[160] - The loan portfolio is well diversified, with no concentrations of credit exceeding 10% of the portfolio, ensuring a balanced risk profile[176] Deposits and Funding - Average total deposit balances increased by $171.3 million, or 5.0%, in 2022, primarily driven by growth in demand deposits, checking, and savings deposit categories[182] - The total deposits as of December 31, 2022, amounted to $3.59 billion, with an average interest rate of 0.27%, compared to $3.42 billion and 0.10% in 2021[182] - The cost of deposits increased to 0.54% by December 31, 2022, up from 0.08% at the end of 2021, reflecting the rising Federal Funds rate throughout 2022[187] Capital and Liquidity - Arrow's Tier 1 leverage ratio was 9.8%, and the Common Equity Tier 1 Capital Ratio was 13.3%, both well above the minimum required ratios of 4.0% and 4.5%, respectively[194] - Arrow's basic liquidity ratio, including FHLBNY collateralized borrowing capacity, was 19.6% of total assets, or $619 million in excess of the internally-set minimum target ratio of 4%[191] - The liquidity position includes a securities portfolio valued at $573.5 million, an increase of $14.2 million from the previous year, and interest-bearing cash balances of $32.8 million, down from $430.7 million[191] Governance and Corporate Responsibility - Arrow's governance program adheres to comprehensive standards, ensuring strong corporate governance practices[51] - In 2022, Arrow donated over $675,000 and contributed 9,395 hours to community support initiatives[51] - The company has installed solar panels at its corporate headquarters, contributing approximately 3,000 square feet of green energy[50] - Arrow's incentive compensation policies are designed to avoid excessive risk-taking, aligning with regulatory guidelines established by the FRB, OCC, and FDIC[39] Management Changes - David S. DeMarco has been appointed as President and Chief Executive Officer of Arrow since May 13, 2023[53] - Penko Ivanov became Chief Financial Officer and Chief Accounting Officer effective February 21, 2023[53] - David D. Kaiser has served as Chief Credit Officer since February 2022, with prior experience in various senior roles within the company[53] - Andrew J. Wise has been Chief Operating Officer since February 2022, previously holding senior positions in the company[53]

Financial Performance - Net income for the quarter ended December 31, 2021, was $10,309 million, a decrease from $12,989 million in the previous quarter[94] - Basic earnings per share decreased to $0.64 from $0.81 in the previous quarter[94] - Net income for the period was $49,857,000, an increase from $40,827,000 in the previous year, representing a growth of 4.99%[95] - Basic earnings per share rose to $3.11, up from $2.56, reflecting a 21.5% increase year-over-year[95] - For the year ended December 31, 2021, net income reached a record $49.9 million, up 22.1% from $40.8 million in 2020[107] - Net income for Q4 2021 was $10.3 million, a decrease of 17.5% from $12.5 million in Q4 2020[198] - Diluted earnings per share for Q4 2021 were $0.63, down from $0.78 in Q4 2020[198] Assets and Equity - Total assets increased to $4,060,540 million from $3,902,041 million in the previous quarter, reflecting a growth of approximately 4.03%[94] - Total stockholders' equity increased to $371,186 million from $360,171 million in the previous quarter[94] - Average assets increased to $3,882,642,000, up from $3,481,761,000, marking a growth of 11.5%[95] - Total stockholders' equity increased to $371,186,000 from $334,392,000, a growth of 11%[95] - Total stockholders' equity increased by $36.8 million, or 11.0%, to $371.2 million at year-end 2021, driven by $49.9 million of net income and other equity contributions[189] Income and Expenses - Net interest income for the quarter was $27,202 million, down from $28,638 million in the previous quarter[94] - Noninterest expense increased to $20,860 million from $19,423 million in the previous quarter[94] - Noninterest expense was $78,048,000, compared to $70,678,000 in the previous year, reflecting an increase of 10.3%[95] - Noninterest expense for 2021 amounted to $78.0 million, an increase of $7.4 million, or 10.4%, from 2020[134] - Noninterest income decreased by $1.5 million to $7.589 million in Q4 2021, down from $9.103 million in Q4 2020[199] Efficiency and Profitability Ratios - Return on average assets, annualized, decreased to 1.01% from 1.32% in the previous quarter[94] - Return on average equity, annualized, decreased to 11.22% from 14.34% in the previous quarter[94] - Efficiency ratio for the quarter was 59.09%, up from 52.74% in the previous quarter, indicating a decline in operational efficiency[94] - Efficiency ratio was reported at 54.16%, slightly higher than 52.80% from the previous year, indicating a decrease in operational efficiency[95] - The efficiency ratio for 2021 was 54.16%, indicating a comparative measure of operating efficiency[134] Loans and Credit Quality - Total loan balances increased to $2.7 billion, up $73 million, or 2.8%, from the prior year, with consumer loans growing by $60.8 million, or 7.1%[107] - Nonperforming loans as a percentage of period-end loans were 0.44%, compared to 0.25% in the previous year, suggesting a slight deterioration in asset quality[95] - Total nonperforming loans rose to $11,664 thousand in 2021, compared to $6,406 thousand in 2020, indicating an increase of 82.5%[126] - The allowance for credit losses was $27.3 million, representing 1.02% of total loans, a decrease of 11 basis points from the previous year[108] - The provision for credit losses for 2021 was $272 thousand, significantly lower than the $9.3 million provision for 2020[125] Deposits and Funding - Total deposit balances reached $3.6 billion, an increase of $315.8 million, or 9.8%, from the prior year, with noninterest-bearing deposits growing by $108.9 million, or 15.5%[107] - Average total deposit balances increased by $428.9 million, or 14.3%, in 2021, primarily in demand deposits, checking, and savings deposit categories[175] - Total deposits reached $3,590.8 million as of December 31, 2021, compared to $3,256.2 million at the end of 2020, reflecting a significant increase[177] Securities and Investments - Total available-for-sale debt securities increased to $559,316 thousand in 2021 from $365,287 thousand in 2020, representing a 53% growth[138] - Mortgage-Backed Securities rose significantly to $449,751 thousand in 2021, up from $298,847 thousand in 2020, marking a 50% increase[138] - Net unrealized gains on securities available-for-sale amounted to $8.2 million at December 31, 2021, up from $7.8 million in 2020[142] Regulatory and Compliance - Arrow adopted the CECL approach on January 1, 2021, which resulted in a decrease of $1.3 million in the allowance for credit losses[127] - Arrow's Tier 1 Leverage Ratio was 9.2%, significantly above the minimum required ratio of 4.0%[188] - The minimum Common Equity Tier 1 (CET1) capital ratio under the Capital Rules is 4.50%, effective January 1, 2015[25] - Arrow's total risk-based capital ratio was 15.7%, well above the minimum required ratio of 8.0%[188] Community Engagement and Corporate Responsibility - Arrow donated over $650,000 and 7,700 hours to community support in 2021, with 62% of donations and 44% of hours being CRA-qualified[50] - The company is committed to environmental sustainability, with 40% of its branch network incorporating energy-saving features[50] - Arrow's governance program adheres to comprehensive standards, ensuring accountability and transparency in operations[50]