SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: August 31, 1996 ARROW FINANCIAL CORPORATION A New York Corporation 0-12507 22-2448962 Commission File Number I.R.S. Employer Identification No. 250 Glen Street GLEN FALLS, NEW YORK 12801 Registrant's telephone number: (518) 745-1000 Item 7. Financial Statements and Exhibits. (a) Financial Statements - not applicable (b) Pro Forma Financial Information On September 28, 1996, the Registrant's wholly-owned subsidiary, Green Mountain Bank ("GMB"), Rutland, Vermont, sold five of its six remaining branches, and substantially all of its remaining deposits and loans to ALBANK, FSB, Albany, New York (the "ALBANK Transaction"). On August 31, 1996, GMB sold substantially all of its trust business to Vermont National Bank, Brattleboro, Vermont (the "VNB Transaction"). The pro forma financial information below shows (i) the effect the ALBANK Transaction and the VNB Transaction would have had on the Registrant's unaudited balance sheet as of June 30, 1996, had those transactions occurred on that date, and (ii) the effect the ALBANK Transaction and the VNB Transaction would have had on the Registrant's unaudited income statements for the year ended December 31, 1995 and the six-month period ended June 30, 1996, had those transactions and a similar transaction effected in January 1996 involving the sale of eight GMB branches to Mascoma Savings Bank, FSB Lebanon, New Hampshire, occurred on January 1, 1995. The pro forma unaudited balance sheet as of June 30, 1996, shows that the Registrant would have had approximately $99.7 million less in total assets as of that date than the amount of the total assets actually held on such date. The pro forma unaudited income statement for the six-month period ended June 30, 1996, shows that the Registrant would have had approximately $5.7 million less in net income for such period than the income actually recognized therefor. Arrow Financial Corporation Pro Forma Consolidated Balance Sheet June 30, 1996 Unaudited As Reported ALBANK, FSB Pro Forma June 30, Sale June 30, 1996 Transactions 1996 ASSETS Cash and Due From Banks $ 20,463 $ (769) $ 19,694 Federal Funds Sold --- 7,773 7,773 Investments 187,163 --- 187,163 Loans 487,291 (108,336) 378,955 Allowance for Loan Losses (11,540) 6,253 (5,287) Net Loans 475,751 (102,083) 373,668 Premises & Equipment 12,672 (2,740) 9,932 Other Assets 17,456 (1,850) 15,606 Total Assets $713,505 $ (99,669) $613,836 LIABILITIES Deposits $610,503 $(107,711) $502,792 Other Borrowed Funds 24,134 --- 24,134 Other Liabilities 12,293 4,390 16,683 Total Liabilities 646,930 (103,321) 543,609 SHAREHOLDERS' EQUITY Common Stock 5,979 --- 5,979 Surplus 41,138 --- 41,138 Other Shareholders' Equity 19,458 3,652 23,110 Total Shareholders' Equity 66,575 3,652 70,227 Total Liabilities and Shareholders' Equity $713,505 $ (99,669) $613,836 The pro forma consolidated income statements for the year ending December 31, 1995 and the six month period ending June 30, 1996 which follow are presented in accordance with the Form 8-K instructions for "Item 2. Acquisition or Dispositions of Assets" and "Item 7. Financial Statements and Exhibits." Accordingly, these pro forma statements may not be indicative of the on-going operating income of the Company after disposition of the Vermont banking operations. Pro Forma Consolidated Income Statement December 31, 1995 Unaudited As Reported Vermont Pro Forma December 31, 1995 December 31, 1995 Operations 1995 (3) Interest Income $60,718 $18,422 $42,296 Interest Expense 24,865 7,192 17,673 Net Interest Income Before Provision for Loan Losses 35,853 11,230 24,623 Provision for Loan Losses 1,170 --- 1,170 Net Interest Income After Provision for Loan Losses 34,683 11,230 23,453 Other Income (1) 14,496 3,278 11,218 Other Expense 29,769 11,480 18,289 Income Before Income Taxes 19,410 3,028 16,382 Provision for Income Taxes 6,986 989 5,997 Net Income $12,424 $ 2,039 $10,385 Earnings Per Share (2) $1.97 $0.32 $1.65 Notes: (1) Other income in both the actual and pro forma columns includes a $5.0 million pre-tax financial institution bond settlement. Without this nonrecurring item, earnings per share would have been $1.46 and $1.14, respectively. (2) Per share amounts are restated for the ten percent stock dividend paid in November 1996. (3) Pro forma December 31, 1995 amounts, including earnings per share, are not adjusted to reflect use of proceeds resulting from the sale. Pro Forma Consolidated Income Statement June 30, 1996 Unaudited As Reported Vermont Pro Forma June 30, 1996 June 30, 1996 Operations 1996 (2) Interest Income $28,564 $ 6,694 $21,870 Interest Expense 11,051 2,135 8,916 Net Interest Income Before Provision for Loan Losses 17,513 4,559 12,954 Provision for Loan Losses 448 --- 448 Net Interest Income After Provision for Loan Losses 17,065 4,559 12,506 Other Income (3) 11,669 8,511 3,158 Other Expense 13,284 4,611 8,673 Income Before Income Taxes 15,450 8,459 6,991 Provision for Income Taxes 5,396 2,768 2,628 Net Income $10,054 $5,691 $ 4,363 Earnings Per Share (1) $1.66 $0.94 $0.72 Notes: (1) Per share amounts are restated for the ten percent stock dividend paid in November 1996. (2) Pro forma June 30, 1996 amounts, including earnings per share, are not adjusted to reflect use of proceeds resulting from the sale. (3) Included in the Vermont 1996 Income column is a $7.1 million gain from the January 15, 1996 sale of eight branches to Mascoma Savings Bank. Exhibits. The following exhibits are filed with this report: Exhibit No. Document 2.1 Purchase and Assumption Agreement among Arrow Financial Corporation, Arrow Vermont Corporation, Green Mountain Bank and ALBANK, FSB, dated February 26, 1996 (Incorporated herein by reference to Form 8-K dated February 26, 1996). 2.2 Service Purchasing Agreement among Arrow Financial Corporation, Arrow Vermont Corporation, Green Mountain Bank and ALBANK, FSB, dated February 26, 1996 (Incorporated herein by reference to Form 8-K dated February 26, 1996). 2.3 Amendment to the Purchase and Assumption Agreement dated September 25, 1996 (Incorporated herein by reference to Form 8-K dated August 31, 1996). 2.4 Amendment to the Service Purchasing Agreement dated September 25, 1996 (Incorporated herein by reference to Form 8-K dated August 31, 1996). 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 thereunto duly authorized. Date: December 10, 1996 ARROW FINANCIAL CORPORATION By: /s/John J. Murphy John J. Murphy Executive Vice President and Chief Financial Officer EXHIBIT INDEX Exhibit Number Description 2.1 Purchase and Assumption Agreement among Arrow Financial Corporation, Arrow Vermont Corporation, Green Mountain Bank and ALBANK, FSB, dated February 26, 1996 (Incorporated herein by reference to Form 8-K dated February 26, 1996). 2.2 Service Purchasing Agreement among Arrow Financial Corporation, Arrow Vermont Corporation, Green Mountain Bank and ALBANK, FSB, dated February 26, 1996 (Incorporated herein by reference to Form 8-K dated February 26, 1996). 2.3 Amendment to the Purchase and Assumption Agreement dated September 25, 1996. (Incorporated herein by reference to Form 8-K dated August 31, 1996). 2.4 Amendment to the Service Purchasing Agreement dated September 25, 1996. (Incorporated herein by reference to Form 8-K dated August 31, 1996).