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| 250 Glen Street Glens Falls, NY 12801 |
NASDAQ® Symbol: "AROW" Website: arrowfinancial.com
Media Contact: Blake Jones Tel: (518) 415-4274
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Arrow Reports Record Annual Net Income of $37.5 million and 8.6% Loan Growth for 2019
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| • | Net income for 2019 reached a record high of $37.5 million, up 3.3% year-over-year. |
| |
| • | Diluted Earnings Per Share (EPS) grew to $2.50 for the year. |
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| • | Period-end total loan balances reached a new record of $2.4 billion. |
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| • | Record highs were also achieved at year-end for total assets and total equity. |
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| • | Profitability, asset quality and capital ratios all remain strong. |
GLENS FALLS, N.Y. (January 28, 2020) – Arrow Financial Corporation (NasdaqGS® – AROW) announced operating results for the three- and twelve-month periods ended December 31, 2019. For the fourth quarter of 2019, net income was $9.7 million, an increase of $1.0 million, or 11.2%, from the fourth quarter of 2018. For the year ended December 31, 2019, net income was a record $37.5 million, up 3.3% over net income of $36.3 million for 2018. Diluted EPS was $0.65 for the fourth quarter, up 10.2% from $0.59 from the comparable 2018 quarter, and $2.50 for 2019, up 2.9% from $2.43 in 2018.
Profitability ratios also remained solid in 2019, as return on average equity (ROE) and return on average assets (ROA) were 13.17% and 1.24%, respectively, for the year, as compared to 13.96% and 1.27%, respectively, for 2018. Return on average equity was 13.05% for the fourth quarter, up from 12.94% from the fourth quarter of 2018. Return of average assets was 1.24% for the fourth quarter, which represents an increase from 1.18% for the comparable 2018 quarter.
“Arrow delivered another year of strong performance in 2019, as demonstrated by record earnings, steady growth, sustained profitability and excellent credit quality," said Arrow President and CEO Thomas J. Murphy. “We surpassed $3 billion in assets, enhanced and expanded our branch network, and invested in technology to drive efficiency and deepen customer relationships. I am proud of our team, which remains focused on long-term planning and responsible growth."
Arrow continued its expansion into the Capital Region of New York with the opening of a Saratoga National Bank location in Rotterdam and a location in Latham to follow in 2020. Arrow continued to execute on its strategy to optimize its existing branch network. In 2019, relocations and renovations occurred for the branches in the Plattsburgh market and the Exit 18 Office in Queensbury in addition to the Upstate Agency, LLC operations center. Significant technology upgrades were implemented in the last year for online loan payments and business banking, all part of the strategy to enhance the customer experience.
The following expands on fourth quarter and 2019 results:
Cash and Stock Dividends: On December 13, 2019, the Company distributed a cash dividend of $0.26 per share. Additionally, a 3% stock dividend was distributed on September 27, 2019. This is the 11th consecutive year the Company declared a stock dividend. All prior-period per-share data have been adjusted to reflect the September 27, 2019 stock dividend.
Loan Growth: At December 31, 2019, total loan balances reached a record high of $2.4 billion, up $189.9 million, or 8.6%, from the prior-year level. The growth was spread across all three of our major loan categories: consumer, residential real estate and commercial. The consumer loan portfolio grew by $91.7 million, or 12.7%, over the balance at December 31, 2018, primarily as a result of continued strength in the indirect automobile lending program. The residential real estate loan portfolio increased $58.5 million,
or 6.8%, while commercial loans, including commercial real estate, increased $39.7 million, or 6.4%, over the balances at December 31, 2018.
Deposit Growth: At December 31, 2019, total deposit balances reached $2.6 billion, up by $270.5 million, or 11.5%, from the prior-year level. Noninterest-bearing deposits grew by $12.2 million, or 2.6%, during 2019, and represented 18.5% of total deposits at year-end as compared to the prior-year level of 20.2%.
Net Interest Income: Net interest income for the year ending December 31, 2019 was $88.0 million, an increase of $4.0 million, or 4.8%, from the prior year. Continued loan growth generated $95.5 million in interest and fees on loans, an increase of 16.9% from the $81.6 million in interest and fees on loans for the year ending December 31, 2018. Interest expense for the year ending December 31, 2019 was $21.7 million. This is an increase of $9.2 million, or 73.9%, from the $12.5 million in expense for the year ending December 31, 2018. The net interest margin (NIM) was 3.05% for the year ending December 31, 2019, as compared to 3.07% for the year ended December 31, 2018. In the fourth quarter of 2019, net interest margin (NIM) was 3.06%, as compared to 3.03% for the fourth quarter of 2018.
Noninterest Income: Noninterest income was $28.6 million for the year ending December 31, 2019, a decrease of 1.4% when compared to $28.9 million for the year ending December 31, 2018. Income generated from fiduciary activities decreased by $446 thousand in 2019, or 4.8% year-over-year, yet reported a record $1.5 billion in assets under management. Insurance revenue decreased by $706 thousand from the prior year. Other noninterest income in 2019 was positively impacted by a $487 thousand increase in the gain on the sale of loans. Noninterest income represented 24.5% of total revenues in 2019 as compared to 25.6% for the year ending December 31, 2018.
Noninterest Expense: Noninterest expense for the year ending December 31, 2019 increased by $2.4 million, or 3.7%, to $67.5 million compared to $65.1 million in 2018. The largest component of noninterest expense is salaries and benefits paid to our employees, which totaled $38.4 million in 2019. Noninterest expense for the three-month period ended December 31, 2019 increased $218 thousand, or 1.3%, as compared to the fourth quarter of 2018.
Provision for Income Taxes: The provision for income taxes for 2019 was $9.6 million compared to $9.0 million for 2018. The effective income tax rates for 2019 and 2018 were 20.4% and 19.9%, respectively.
Asset Quality: Asset quality remained strong in 2019, as evidenced by low levels of nonperforming assets and charge-offs. Net loan losses for the fourth quarter of 2019, expressed as an annualized percentage of average loans outstanding, were 0.06%. Net loan losses for the full year 2019 were 0.05% of average loans outstanding, consistent with the 2018 ratio. Nonperforming assets of $5.7 million at December 31, 2019, represented 0.18% of period-end assets, down from 0.23% at December 31, 2018.
The Company's allowance for loan losses was $21.2 million at December 31, 2019, which represented 0.89% of loans outstanding, a decrease of three basis points from the ratio of 0.92% at year-end 2018. This decrease was primarily driven by continued strong asset quality. When expressed as a percentage of nonperforming loans, the allowance for loan loss coverage ratio grew to 481.4% at year-end 2019, compared to 365.7% at year-end 2018.
Capital: Total shareholders’ equity grew to a record of $301.7 million at period-end, an increase of $32.1 million, or 11.9%, above the year-end 2018 balance. The Company's regulatory capital ratios remained strong in 2019. At December 31, 2019, the Company's Common Equity Tier 1 Capital Ratio was 12.94% and Total Risk-Based Capital Ratio was 14.78%. The capital ratios of the Company and both its subsidiary banks continued to significantly exceed the “well capitalized” regulatory standards.
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 51 and 43 quarters, respectively. Saratoga National Bank and Trust Company was named “Top Small Community Lender” by the U.S. Small Business Administration for the Capital Region of New York for the sixth consecutive year.
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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, 2018, 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)
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| | | | | | | | | | | | | | | |
| | Three Months Ended | | Twelve Months Ended |
| | December 31, | | December 31, |
| | 2019 | | 2018 | | 2019 | | 2018 |
| INTEREST AND DIVIDEND INCOME | | | | | | | |
| Interest and Fees on Loans | $ | 24,924 |
| | $ | 22,041 |
| | $ | 95,467 |
| | $ | 81,647 |
|
| Interest on Deposits at Banks | 150 |
| | 237 |
| | 722 |
| | 711 |
|
| Interest and Dividends on Investment Securities: | | | | |
| |
|
| Fully Taxable | 2,212 |
| | 2,454 |
| | 8,883 |
| | 8,582 |
|
| Exempt from Federal Taxes | 1,081 |
| | 1,268 |
| | 4,687 |
| | 5,563 |
|
| Total Interest and Dividend Income | 28,367 |
| | 26,000 |
| | 109,759 |
| | 96,503 |
|
| INTEREST EXPENSE | | | | | | | |
| Interest-Bearing Checking Accounts | 550 |
| | 453 |
| | 1,985 |
| | 1,618 |
|
| Savings Deposits | 2,473 |
| | 1,323 |
| | 8,399 |
| | 3,457 |
|
| Time Deposits over $250,000 | 570 |
| | 350 |
| | 1,932 |
| | 1,183 |
|
| Other Time Deposits | 1,125 |
| | 509 |
| | 4,224 |
| | 1,420 |
|
Federal Funds Purchased and
Securities Sold Under Agreements to Repurchase | 25 |
| | 15 |
| | 100 |
| | 62 |
|
| Federal Home Loan Bank Advances | 439 |
| | 1,439 |
| | 3,952 |
| | 3,779 |
|
Junior Subordinated Obligations Issued to
Unconsolidated Subsidiary Trusts | 239 |
| | 254 |
| | 1,019 |
| | 966 |
|
| Interest on Financing Leases | 28 |
| | — |
| | 99 |
| | — |
|
| Total Interest Expense | 5,449 |
| | 4,343 |
| | 21,710 |
| | 12,485 |
|
| NET INTEREST INCOME | 22,918 |
| | 21,657 |
| | 88,049 |
| | 84,018 |
|
| Provision for Loan Losses | 634 |
| | 646 |
| | 2,079 |
| | 2,607 |
|
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES | 22,284 |
| | 21,011 |
| | 85,970 |
| | 81,411 |
|
| NONINTEREST INCOME | | | | | | | |
| Income From Fiduciary Activities | 2,238 |
| | 2,149 |
| | 8,809 |
| | 9,255 |
|
| Fees for Other Services to Customers | 2,606 |
| | 2,579 |
| | 10,176 |
| | 10,134 |
|
| Insurance Commissions | 1,592 |
| | 1,769 |
| | 7,182 |
| | 7,888 |
|
| Net Gain (Loss) on Securities | 67 |
| | (142 | ) | | 289 |
| | 213 |
|
| Net Gain on Sales of Loans | 121 |
| | 20 |
| | 622 |
| | 135 |
|
| Other Operating Income | 457 |
| | 424 |
| | 1,477 |
| | 1,324 |
|
| Total Noninterest Income | 7,081 |
| | 6,799 |
| | 28,555 |
| | 28,949 |
|
| NONINTEREST EXPENSE | | | | | | | |
| Salaries and Employee Benefits | 9,341 |
| | 9,836 |
| | 38,402 |
| | 38,788 |
|
| Occupancy Expenses, Net | 1,384 |
| | 1,284 |
| | 5,407 |
| | 5,026 |
|
| Technology and Equipment Expense | 3,365 |
| | 2,978 |
| | 13,054 |
| | 11,284 |
|
| FDIC Assessments | 213 |
| | 223 |
| | 157 |
| | 881 |
|
| Other Operating Expense | 2,796 |
| | 2,560 |
| | 10,430 |
| | 9,076 |
|
| Total Noninterest Expense | 17,099 |
| | 16,881 |
| | 67,450 |
| | 65,055 |
|
| INCOME BEFORE PROVISION FOR INCOME TAXES | 12,266 |
| | 10,929 |
| | 47,075 |
| | 45,305 |
|
| Provision for Income Taxes | 2,526 |
| | 2,171 |
| | 9,600 |
| | 9,026 |
|
| NET INCOME | $ | 9,740 |
| | $ | 8,758 |
| | $ | 37,475 |
| | $ | 36,279 |
|
Average Shares Outstanding1: | | | | | | | |
| Basic | 14,978 |
| | 14,885 |
| | 14,940 |
| | 14,840 |
|
| Diluted | 15,026 |
| | 14,949 |
| | 14,983 |
| | 14,922 |
|
| Per Common Share: | | | | | | | |
| Basic Earnings | $ | 0.65 |
| | $ | 0.59 |
| | $ | 2.51 |
| | $ | 2.44 |
|
| Diluted Earnings | 0.65 |
| | 0.59 |
| | 2.50 |
| | 2.43 |
|
1 Share and per share data have been restated for the September 27, 2019, 3% stock dividend. | | | |
ARROW FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Amounts - Unaudited) |
| | | | | | | |
| | December 31, 2019 | | December 31, 2018 |
| ASSETS | | | |
| Cash and Due From Banks | $ | 47,035 |
| | $ | 56,529 |
|
| Interest-Bearing Deposits at Banks | 23,186 |
| | 27,710 |
|
| Investment Securities: | | | |
| Available-for-Sale | 357,334 |
| | 317,535 |
|
Held-to-Maturity (Approximate Fair Value of $249,618 at
December 31, 2019, and $280,338 at December 31, 2018) | 245,065 |
| | 283,476 |
|
| Equity Securities | 2,063 |
| | 1,774 |
|
| Other Investments | 10,317 |
| | 15,506 |
|
| Loans | 2,386,120 |
| | 2,196,215 |
|
| Allowance for Loan Losses | (21,187 | ) | | (20,196 | ) |
| Net Loans | 2,364,933 |
| | 2,176,019 |
|
| Premises and Equipment, Net | 40,629 |
| | 30,446 |
|
| Goodwill | 21,873 |
| | 21,873 |
|
| Other Intangible Assets, Net | 1,661 |
| | 1,852 |
|
| Other Assets | 70,179 |
| | 55,614 |
|
| Total Assets | $ | 3,184,275 |
| | $ | 2,988,334 |
|
| LIABILITIES | | | |
| Noninterest-Bearing Deposits | $ | 484,944 |
| | $ | 472,768 |
|
| Interest-Bearing Checking Accounts | 689,221 |
| | 790,781 |
|
| Savings Deposits | 1,046,568 |
| | 818,048 |
|
| Time Deposits over $250,000 | 123,968 |
| | 73,583 |
|
| Other Time Deposits | 271,353 |
| | 190,404 |
|
| Total Deposits | 2,616,054 |
| | 2,345,584 |
|
Federal Funds Purchased and
Securities Sold Under Agreements to Repurchase | 51,099 |
| | 54,659 |
|
| Federal Home Loan Bank Overnight Advances | 130,000 |
| | 234,000 |
|
| Federal Home Loan Bank Term Advances | 30,000 |
| | 45,000 |
|
| Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts | 20,000 |
| | 20,000 |
|
| Finance Leases | 5,254 |
| | — |
|
| Other Liabilities | 30,140 |
| | 19,507 |
|
| Total Liabilities | 2,882,547 |
| | 2,718,750 |
|
| STOCKHOLDERS’ EQUITY | | | |
| Preferred Stock, $1 Par Value and 1,000,000 Shares Authorized at December 31, 2019 and $5 Par Value; 1,000,000 Shares Authorized at December 31, 2018 | — |
| | — |
|
| Common Stock, $1 Par Value; 20,000,000 Shares Authorized (19,606,449 Shares Issued at December 31, 2019, and 19,035,565 Shares Issued at December 31, 2018) | 19,606 |
| | 19,035 |
|
| Additional Paid-in Capital | 335,355 |
| | 314,533 |
|
| Retained Earnings | 33,218 |
| | 29,257 |
|
Unallocated ESOP Shares (None at December 31, 2019, and
5,001 Shares at December 31, 2018) | — |
| | (100 | ) |
| Accumulated Other Comprehensive Loss | (6,357 | ) | | (13,810 | ) |
| Treasury Stock, at Cost (4,608,258 Shares at December 31, 2019, and 4,558,207 Shares at December 31, 2018) | (80,094 | ) | | (79,331 | ) |
| Total Stockholders’ Equity | 301,728 |
| | 269,584 |
|
| Total Liabilities and Stockholders’ Equity | $ | 3,184,275 |
| | $ | 2,988,334 |
|
Arrow Financial Corporation Selected Quarterly Information (Dollars In Thousands, Except Per Share Amounts - Unaudited) |
| | | | | | | | | | | | | | | | | | | |
| Quarter Ended | 12/31/2019 |
| | 9/30/2019 |
| | 6/30/2019 |
| | 3/31/2019 |
| | 12/31/2018 |
|
| Net Income | $ | 9,740 |
| | $ | 10,067 |
| | $ | 8,934 |
| | $ | 8,734 |
| | $ | 8,758 |
|
| Transactions Recorded in Net Income (Net of Tax): | | | | | | | | | |
| Net Changes in Fair Value of Equity Investments | 50 |
| | 109 |
| | — |
| | 57 |
| | (106 | ) |
| | | | | | | | | | |
Share and Per Share Data:1 | | | | | | | | | |
| Period End Shares Outstanding | 14,998 |
| | 14,969 |
| | 14,949 |
| | 14,909 |
| | 14,907 |
|
| Basic Average Shares Outstanding | 14,978 |
| | 14,955 |
| | 14,922 |
| | 14,903 |
| | 14,885 |
|
| Diluted Average Shares Outstanding | 15,026 |
| | 14,991 |
| | 14,963 |
| | 14,956 |
| | 14,949 |
|
| Basic Earnings Per Share | $ | 0.65 |
| | $ | 0.67 |
| | $ | 0.60 |
| | $ | 0.59 |
| | $ | 0.59 |
|
| Diluted Earnings Per Share | 0.65 |
| | 0.67 |
| | 0.60 |
| | 0.58 |
| | 0.59 |
|
| Cash Dividend Per Share | 0.260 |
| | 0.252 |
| | 0.252 |
| | 0.252 |
| | 0.252 |
|
| | | | | | | | | | |
| Selected Quarterly Average Balances: | |
| �� | |
| | |
| | |
| | |
|
| Interest-Bearing Deposits at Banks | $ | 28,880 |
| | $ | 27,083 |
| | $ | 25,107 |
| | $ | 26,163 |
| | $ | 34,782 |
|
| Investment Securities | 582,982 |
| | 545,073 |
| | 584,679 |
| | 611,161 |
| | 637,341 |
|
| Loans | 2,358,110 |
| | 2,308,879 |
| | 2,255,299 |
| | 2,210,642 |
| | 2,160,435 |
|
| Deposits | 2,607,421 |
| | 2,472,528 |
| | 2,436,290 |
| | 2,347,985 |
| | 2,347,231 |
|
| Other Borrowed Funds | 177,877 |
| | 231,291 |
| | 250,283 |
| | 327,138 |
| | 315,172 |
|
| Shareholders’ Equity | 296,124 |
| | 289,016 |
| | 280,247 |
| | 272,864 |
| | 268,503 |
|
| Total Assets | 3,113,114 |
| | 3,023,043 |
| | 2,997,458 |
| | 2,977,056 |
| | 2,954,031 |
|
| Return on Average Assets, annualized | 1.24 | % | | 1.32 | % | | 1.20 | % | | 1.19 | % | | 1.18 | % |
| Return on Average Equity, annualized | 13.05 | % | | 13.82 | % | | 12.79 | % | | 12.98 | % | | 12.94 | % |
Return on Average Tangible Equity, annualized 2 | 14.18 | % | | 15.05 | % | | 13.96 | % | | 14.22 | % | | 14.20 | % |
| Average Earning Assets | 2,969,972 |
| | 2,881,035 |
| | 2,865,085 |
| | 2,847,966 |
| | 2,832,558 |
|
| Average Paying Liabilities | 2,293,804 |
| | 2,213,642 |
| | 2,235,462 |
| | 2,224,403 |
| | 2,189,233 |
|
| Interest Income | 28,367 |
| | 27,952 |
| | 27,227 |
| | 26,213 |
| | 26,000 |
|
Tax-Equivalent Adjustment 3 | 321 |
| | 344 |
| | 376 |
| | 373 |
| | 376 |
|
Interest Income, Tax-Equivalent 3 | 28,688 |
| | 28,296 |
| | 27,603 |
| | 26,586 |
| | 26,376 |
|
| Interest Expense | 5,449 |
| | 5,649 |
| | 5,520 |
| | 5,092 |
| | 4,343 |
|
| Net Interest Income | 22,918 |
| | 22,303 |
| | 21,707 |
| | 21,121 |
| | 21,657 |
|
Net Interest Income, Tax-Equivalent 3 | 23,239 |
| | 22,647 |
| | 22,083 |
| | 21,494 |
| | 22,033 |
|
| Net Interest Margin, annualized | 3.06 | % | | 3.07 | % | | 3.04 | % | | 3.01 | % | | 3.03 | % |
Net Interest Margin, Tax-Equivalent, annualized 3 | 3.10 | % | | 3.12 | % | | 3.09 | % | | 3.06 | % | | 3.09 | % |
| | | | | | | | | | |
Efficiency Ratio Calculation: 4 | | | | | | | | | |
| Noninterest Expense | $ | 17,099 |
| | $ | 16,791 |
| | $ | 16,908 |
| | $ | 16,652 |
| | $ | 16,881 |
|
| Less: Intangible Asset Amortization | 60 |
| | 61 |
| | 44 |
| | 79 |
| | 65 |
|
| Net Noninterest Expense | $ | 17,039 |
| | $ | 16,730 |
| | $ | 16,864 |
| | $ | 16,573 |
| | $ | 16,816 |
|
| Net Interest Income, Tax-Equivalent | $ | 23,238 |
| | $ | 22,647 |
| | $ | 22,083 |
| | $ | 21,494 |
| | $ | 22,033 |
|
| Noninterest Income | 7,081 |
| | 7,691 |
| | 6,896 |
| | 6,887 |
| | 6,799 |
|
| Less: Net Changes in Fair Value of Equity Investments | $ | 67 |
| | 146 |
| | — |
| | 76 |
| | (142 | ) |
| Net Gross Income | $ | 30,252 |
| | $ | 30,192 |
| | $ | 28,979 |
| | $ | 28,305 |
| | $ | 28,974 |
|
| Efficiency Ratio | 56.32 | % | | 55.41 | % | | 58.19 | % | | 58.55 | % | | 58.04 | % |
| | | | | | | | | | |
Period-End Capital Information: | | | | | | | | | |
| Total Stockholders’ Equity (i.e. Book Value) | $ | 301,728 |
| | $ | 292,228 |
| | $ | 284,649 |
| | $ | 276,609 |
| | $ | 269,584 |
|
Book Value per Share 1 | 20.12 |
| | 19.52 |
| | 19.04 |
| | 18.55 |
| | 18.08 |
|
| Goodwill and Other Intangible Assets, net | 23,534 |
| | 23,586 |
| | 23,603 |
| | 23,650 |
| | 23,725 |
|
Tangible Book Value per Share 1,2 | 18.55 |
| | 17.95 |
| | 17.46 |
| | 16.97 |
| | 16.49 |
|
| | | | | | | | | | |
Capital Ratios:5 | | | | | | | | | |
| Tier 1 Leverage Ratio | 9.98 | % | | 10.04 | % | | 9.88 | % | | 9.73 | % | | 9.61 | % |
Common Equity Tier 1 Capital Ratio | 12.94 | % | | 12.93 | % | | 12.99 | % | | 12.98 | % | | 12.89 | % |
| Tier 1 Risk-Based Capital Ratio | 13.83 | % | | 13.85 | % | | 13.93 | % | | 13.95 | % | | 13.87 | % |
| Total Risk-Based Capital Ratio | 14.78 | % | | 14.81 | % | | 14.91 | % | | 14.93 | % | | 14.86 | % |
| | | | | | | | | | |
| Assets Under Trust Administration & Investment Mgmt | $ | 1,543,653 |
| | $ | 1,485,116 |
| | $ | 1,496,966 |
| | $ | 1,483,259 |
| | $ | 1,385,752 |
|
Arrow Financial Corporation
Selected Quarterly Information - Continued
(Dollars In Thousands, Except Per Share Amounts - Unaudited)
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| Footnotes: | | | | | | | | |
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| 1. | Share and per share data have been restated for the September 27, 2019, 3% stock dividend.
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| 2. | Non-GAAP Financial Measure Reconciliation: Tangible Book Value, Tangible Equity, and Return on 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. |
| | | 12/31/2019 | | 9/30/2019 | | 6/30/2019 | | 3/31/2019 | | 12/31/2018 |
| | Total Stockholders' Equity (GAAP) | $ | 301,728 |
| | $ | 292,228 |
| | $ | 284,649 |
| | $ | 276,609 |
| | $ | 269,584 |
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| | Less: Goodwill and Other Intangible assets, net | 23,534 |
| | 23,586 |
| | 23,603 |
| | 23,650 |
| | 23,725 |
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| | Tangible Equity (Non-GAAP) | $ | 278,194 |
| | $ | 268,642 |
| | $ | 261,046 |
| | $ | 252,959 |
| | $ | 245,859 |
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| | | | | | | | | | | |
| | Period End Shares Outstanding | 14,998 |
| | 14,969 |
| | 14,949 |
| | 14,909 |
| | 14,907 |
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| | Tangible Book Value per Share (Non-GAAP) | $ | 18.55 |
| | $ | 17.95 |
| | $ | 17.46 |
| | $ | 16.97 |
| | $ | 16.49 |
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| | Net Income | 9,740 |
| | 10,067 |
| | 8,934 |
| | 8,734 |
| | 8,758 |
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| | Return on Tangible Equity (Net Income/Tangible Equity - Annualized) | 14.18 | % | | 15.05 | % | | 13.96 | % | | 14.22 | % | | 14.20 | % |
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| 3. | Non-GAAP Financial Measure Reconciliation: Net Interest Margin 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.
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| | | 12/31/2019 | | 9/30/2019 | | 6/30/2019 | | 3/31/2019 | | 12/31/2018 |
| | Interest Income (GAAP) | $ | 28,367 |
| | $ | 27,952 |
| | $ | 27,227 |
| | $ | 26,213 |
| | $ | 26,000 |
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| | Add: Tax Equivalent Adjustment (Non-GAAP) | 321 |
| | 344 |
| | 376 |
| | 373 |
| | 376 |
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| | Interest Income - Tax Equivalent (Non-GAAP) | $ | 28,688 |
| | $ | 28,296 |
| | $ | 27,603 |
| | $ | 26,586 |
| | $ | 26,376 |
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| | | | | | | | | | | |
| | Net Interest Income (GAAP) | $ | 22,918 |
| | $ | 22,303 |
| | $ | 21,707 |
| | $ | 21,121 |
| | $ | 21,657 |
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| | Add: Tax-Equivalent adjustment (Non-GAAP) | 321 |
| | 344 |
| | 376 |
| | 373 |
| | 376 |
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| | Net Interest Income - Tax Equivalent (Non-GAAP) | $ | 23,239 |
| | $ | 22,647 |
| | $ | 22,083 |
| | $ | 21,494 |
| | $ | 22,033 |
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| | Average Earning Assets | 2,969,972 |
| | 2,881,035 |
| | 2,865,085 |
| | 2,847,966 |
| | 2,832,558 |
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| | Net Interest Margin (Non-GAAP)* | 3.10 | % | | 3.12 | % | | 3.09 | % | | 3.06 | % | | 3.09 | % |
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| 4. | Non-GAAP Financial Measure Reconciliation: 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). |
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| 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 December 31, 2019 CET1 ratio listed in the tables (i.e., 12.94%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%). |
| | | 12/31/2019 | | 9/30/2019 | | 6/30/2019 | | 3/31/2019 | | 12/31/2018 |
| | Total Risk Weighted Assets | 2,237,127 |
| | 2,184,214 |
| | 2,121,541 |
| | 2,075,115 |
| | 2,046,495 |
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| | Common Equity Tier 1 Capital | 289,409 |
| | 282,485 |
| | 275,528 |
| | 269,363 |
| | 263,863 |
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| | Common Equity Tier 1 Ratio | 12.94 | % | | 12.93 | % | | 12.99 | % | | 12.98 | % | | 12.89 | % |
* Quarterly ratios have been annualized
Arrow Financial Corporation Consolidated Financial Information (Dollars in Thousands - Unaudited)
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| Quarter Ended: | 12/31/2019 | | 12/31/2018 |
| Loan Portfolio | | | |
| Commercial Loans | $ | 150,660 |
| | $ | 136,890 |
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| Commercial Real Estate Loans | 510,541 |
| | 484,562 |
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| Subtotal Commercial Loan Portfolio | 661,201 |
| | 621,452 |
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| Consumer Loans | 811,198 |
| | 719,510 |
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| Residential Real Estate Loans | 913,721 |
| | 855,253 |
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| Total Loans | $ | 2,386,120 |
| | $ | 2,196,215 |
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| Allowance for Loan Losses | | | |
| Allowance for Loan Losses, Beginning of Quarter | $ | 20,931 |
| | $ | 20,003 |
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| Loans Charged-off | (503 | ) | | (573 | ) |
| Recoveries of Loans Previously Charged-off | 125 |
| | 120 |
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| Net Loans Charged-off | (378 | ) | | (453 | ) |
| Provision for Loan Losses | 634 |
| | 646 |
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| Allowance for Loan Losses, End of Quarter | $ | 21,187 |
| | $ | 20,196 |
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| Nonperforming Assets | | | |
| Nonaccrual Loans | $ | 4,005 |
| | $ | 4,159 |
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| Loans Past Due 90 or More Days and Accruing | 253 |
| | 1,225 |
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| Loans Restructured and in Compliance with Modified Terms | 143 |
| | 138 |
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| Total Nonperforming Loans | 4,401 |
| | 5,522 |
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| Repossessed Assets | 139 |
| | 130 |
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| Other Real Estate Owned | 1,122 |
| | 1,130 |
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| Total Nonperforming Assets | $ | 5,662 |
| | $ | 6,782 |
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| Key Asset Quality Ratios | | | |
Net Loans Charged-off to Average Loans, Quarter-to-date Annualized | 0.06 | % | | 0.08 | % |
Provision for Loan Losses to Average Loans, Quarter-to-date Annualized | 0.11 | % | | 0.12 | % |
| Allowance for Loan Losses to Period-End Loans | 0.89 | % | | 0.92 | % |
| Allowance for Loan Losses to Period-End Nonperforming Loans | 481.41 | % | | 365.74 | % |
| Nonperforming Loans to Period-End Loans | 0.18 | % | | 0.25 | % |
| Nonperforming Assets to Period-End Assets | 0.18 | % | | 0.23 | % |
| Twelve-Month Period Ended: | | | |
| Allowance for Loan Losses | | | |
| Allowance for Loan Losses, Beginning of Year | $ | 20,196 |
| | $ | 18,586 |
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| Loans Charged-off | (1,735 | ) | | (1,532 | ) |
| Recoveries of Loans Previously Charged-off | 647 |
| | 535 |
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| Net Loans Charged-off | (1,088 | ) | | (997 | ) |
| Provision for Loan Losses | 2,079 |
| | 2,607 |
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| Allowance for Loan Losses, End of Year | $ | 21,187 |
| | $ | 20,196 |
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| Key Asset Quality Ratios | | | |
| Net Loans Charged-off to Average Loans | 0.05 | % | | 0.05 | % |
| Provision for Loan Losses to Average Loans | 0.09 | % | | 0.13 | % |
