UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: January 15, 1996
ARROW FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
New York 0-12507 22-2448962
State or other jurisdiction of Commission (IRS Employer
incorporation or organization File Number Identification
Number)
250 GLEN STREET, GLENS FALLS, NEW YORK 12801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: 518 745-1000
Page 1 of 19 pages: Exhibit Index is located on page 5.
Item 2. Acquisition or Disposition of Assets
On January 15, 1996, Green Mountain Bank, a wholly-owned indirect
subsidiary of the Registrant, sold its eight eastern Vermont branch offices
(the "Branches") to Mascoma Savings Bank, of Lebanon, New Hampshire. The
transaction was effected pursuant to an Agreement for Purchase and Sale of
Branches dated as of June 1, 1995 (the "P&S Agreement") whereby Mascoma
Savings Bank purchased substantially all of the assets of the Branches,
consisting primarily of $41 million in loans and $2 million in other assets
and assumed substantially all of the liabilities, consisting primarily of $100
million in deposits. Green Mountain Bank received a premium of 8 percent on
substantially all of the deposits transferred.
The eight Branches sold to Mascoma Savings Bank are located in Bethel,
Chelsea, Norwich, Hartland, South Strafford and in White River Junction (3),
Vermont. Green Mountain Bank, which is headquartered in Rutland, Vermont,
will continue to offer commercial loans, home mortgages and other financial,
loan and trust products at its other banking locations in central and western
Vermont.
The amount of consideration given in the transaction was determined by
arms-length negotiations and was based upon, among other factors, the book
value of the assets being transferred and the liabilities being assumed.
Other than in connection with the transactions contemplated by the P&A
Agreement, neither Mascoma Savings Bank nor its shareholders have had any
material relationship with the Registrant or any of its affiliates, any
officer or director of the Registrant or any associate of any such director or
officer.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
( a ) Financial Statements - not applicable
( b ) Pro Forma Financial Information - See "Pro Forma Financial Statements"
on page 3 hereof.
( c ) Exhibits - See Exhibit Index on page 5 hereof.
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ARROW FINANCIAL CORPORATION
Proforma Condensed Balance Sheet
(in thousands)
January 15, 1996
UNAUDITED
Proforma
Arrow Arrow
Financial Branch Financial
Corporation Sale Adjustments Corporation
ASSETS Consolidated Effects Debit Credit Consolidated
Cash & Due from Banks $ 30,979 $ 884 $ 0 $ 0 $ 30,095
Federal Funds Sold 41,400 0 18,836 (3) 59,293 (6) 943
Investment Securities 187,482 164 0 0 187,318
Loans 514,407 39,959 (1) 16 (4) 0 474,463
Loan Loss Allowance (12,112) (596) 0 0 (11,517)
Fixed Assets, Net 13,893 1,533 0 0 12,360
Real Estate Owned 2,404 0 0 0 2,404
Goodwill 1,920 0 0 181 (7) 1,740
Other Assets 14,733 12 0 35 (8) 14,686
Total Assets $795,106 $41,957 $18,852 $59,509 $712,493
LIABILITIES
Deposits:
Interest Bearing $598,740 $ 86,568 $ 0 $ 0 $512,172
Noninterest Bearing 94,893 14,432 0 0 80,461
Total Deposits 693,632 101,000 (2) 0 0 592,633
Borrowed Money 19,152 0 11,000 (5) 0 30,152
Other Liabilities 14,442 257 0 2,795 (9) 16,980
Total Liabilities 727,226 101,256 11,000 2,795 639,765
SHAREHOLDERS' EQUITY
Common Stock and Surplus 46,917 0 0 0 46,917
Undivided Profits 24,725 0 0 4,848 (10) 29,573
Valuation Reserve - SFAS 115 1,153 0 0 0 1,153
Unallocated ESOP Shares (700) 0 0 0 (700)
Treasury Stock (4,215) 0 0 0 (4,215)
Total Shareholders' Equity 67,880 0 0 4,848 72,728
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $795,106 $101,256 $11,000 $7,643 $712,493
KEY RATIOS:
Loans/Deposits 74.16% n/a n/a n/a 80.06%
Loans/Assets 64.70% n/a n/a n/a 66.59%
Loan Loss Allowance/Loans 2.35% n/a n/a n/a 2.43%
Shareholders' Equity/Loans 13.20% n/a n/a n/a 15.33%
Shareholders' Equity/Assets 8.54% n/a n/a n/a 10.21%
Notes to Unaudited Proforma Statement of Condition: (dollars in thousands)
1) Principal balance of loans sold - approximate yield of 8.70%.
2) Amount of deposits transferred - approximate cost of 3.57%.
3) Represents sum of estimated deposit premium of $7,836 and proceeds from short-term borrowings
of $11,000. Deposit premium will not be determined until pricing period expires on
January 29, 1996.
4) Reversal of SFAS No. 91 net deferred fees.
5) Short-term borrowing advance from Federal Home Loan Bank.
6) Cash equalization payment gross, net amount of $51,457 after deducting estimated deposit premium of
$7,836.
7) Write-off of goodwill assigned to branches sold.
8) Reversal of certain loan fees and capitalized loan servicing rights.
9) Includes estimated income tax effect (net) of $2,558 and accrued professional fees and other
expenses of $237.
10) Estimated net income, after tax, for transaction.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereto duly authorized.
Dated January 30, 1996
ARROW FINANCIAL CORPORATION
By: s/ John J. Murphy
Executive Vice President, Treasurer & CFO,
(Chief Accounting Officer)
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EXHIBIT INDEX
Exhibit No. Exhibit
2.1 Agreement for Purchase & Sale of Branches
(Incorporated herein by reference
to Form 8-K dated June 1, 1995).
2.2 Supplement to Purchase & Sale Agreement
dated Janaury 12, 1996.
PAGE 5