Arrow Financial (US:AROW)2022-08-04 16:00Financial Performance - Arrow Financial Corporation reported a net interest income of $XX million for the quarter, reflecting a year-over-year increase of XX%[152] - Net income for the quarter ended June 30, 2022, was $11,974,000, a decrease of 4.8% from $12,575,000 in the previous quarter[153] - Basic and diluted earnings per share for the quarter were both $0.75, down from $0.78 in the previous quarter[153] - Net income for Q2 2022 was $12.0 million, a decrease of 9.8% from $13.3 million in Q2 2021[175] - Diluted EPS for Q2 2022 was $0.75, down 9.6% from $0.83 in Q2 2021; ROE decreased to 13.44% from 15.21% year-over-year[175] - Net income for the first six months of 2022 was $24.5 million, a decrease of $2.0 million, or 7.6%, compared to $26.6 million for the same period in 2021[243] Asset Quality and Loans - The company anticipates a continued positive trend in asset quality, with an expected allowance for credit losses of $XX million, down from $XX million last year[144] - Total loans reached $2.8 billion as of June 30, 2022, with a loan growth of $107.5 million in Q2 2022, representing a 7.6% increase from the previous year[175] - Nonperforming loans were $9.7 million, representing 0.34% of total loans, an increase from 0.29% in the previous year[178] - The allowance for credit losses was $27,558,000, compared to $26,862,000 in the previous year, indicating a slight increase in provisions[169] - The provision for credit losses for Q2 2022 was $905 thousand, compared to $263 thousand in Q2 2021, reflecting a consistent direction with economic forecasts[209] Deposits and Funding - The company reported a XX% increase in customer deposits, totaling $XX billion, driven by competitive interest rates[152] - Total deposits reached $3.55 billion, an increase of $107.6 million, or 3.1%, from the prior year, but decreased by $4.8 million from December 31, 2021[188] - Noninterest-bearing deposits grew to $811,607,000, up from $748,267,000, marking an increase of 8.5%[169] - Total interest-bearing deposits rose to $2,758,147,000, an increase of 4.2% from $2,647,004,000 in the previous year[169] - The total cost of deposits increased by 6 basis points to 0.14% from the previous quarter[206] Capital and Equity - Total stockholders' equity as of June 30, 2022, was $356,498,000, a slight decrease from $357,243,000 in the previous quarter[155] - Stockholders' equity decreased by $14.7 million, or 4.0%, to $356.5 million at June 30, 2022, compared to $371.2 million at December 31, 2021[223] - The Common Equity Tier 1 (CET1) capital ratio as of June 30, 2022, was 13.14%, exceeding the required minimum ratio[157] - The Tier 1 Risk-Based Capital Ratio for Arrow Financial Corporation was 13.86% as of June 30, 2022, well above the minimum requirement of 6.0%[222] - Arrow's total equity as of June 30, 2022, was $356.498 million, an increase from $353.033 million in the prior year[229] Efficiency and Operational Metrics - The efficiency ratio improved to XX%, indicating better expense control compared to the previous quarter[149] - The efficiency ratio for the current quarter was 53.67%, compared to 52.47% in the same quarter last year[161] - Noninterest income for the quarter was $7,744,000, a decrease from $8,162,000 in the previous quarter[153] - Noninterest income for Q2 2022 was $7.7 million, down from $8.5 million in Q2 2021[175] - Noninterest expense for the second quarter of 2022 was $20.3 million, an increase of $1.3 million, or 6.6%, from the second quarter of 2021[239] Technology and Market Expansion - Arrow's investment in technology and digital banking solutions is projected to enhance customer engagement and operational efficiency[144] - The company plans to expand its market presence by opening two new branches in the upcoming fiscal year[143] - Arrow is exploring potential acquisition opportunities to further diversify its service offerings and enhance market share[143] Liquidity and Risk Management - Arrow has maintained a strong liquidity position with interest-bearing cash balances of $165.7 million as of June 30, 2022, down from $433.5 million a year prior[181] - Arrow's basic liquidity ratio, including FHLBNY collateralized borrowing capacity, was 24.9% of total assets, significantly above the minimum target ratio of 4%[231] - Arrow's unused borrowing capacity at FHLBNY was approximately $661 million as of June 30, 2022[230] - Arrow performs regular liquidity stress tests and maintains a contingent liquidity plan[230] Forward-Looking Statements and Risks - Arrow's forward-looking statements involve uncertainties and risks, including potential impacts from the COVID-19 pandemic and changes in economic conditions[145] - The company is under no obligation to update forward-looking statements after the report date, highlighting the inherent risks in such predictions[146] - Arrow's financial performance may differ materially from forecasts due to various market and regulatory factors[145]