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Arrow Reports $13.3 million in Q2 Net Income as COVID-19 Recovery Continues

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  • AROW

-- Key profitability ratios were strong in the second quarter with return on average assets (ROA) of 1.38% and return on average equity (ROE) of 15.21%.

-- Second-quarter revenue increased $4.8 million, or 15.1%, over the prior year comparative quarter.

-- Over $67 million of Small Business Administration Paycheck Protection Program (PPP) loans were forgiven in the second quarter of 2021.

-- Net income was $13.3 million and diluted earnings per share (EPS) were $0.85 for the second quarter.

-- As pandemic restrictions lift, Arrow is focused on continued optimization of digital and physical delivery channels to meet changing customer needs.

GLENS FALLS, N.Y., July 27, 2021 /PRNewswire/ -- Arrow Financial Corporation (NasdaqGS® – AROW) announced operating results for the three and six-month periods ended June 30, 2021. Net income for the second quarter of 2021 was $13.3 million, compared to $9.2 million in the second quarter of 2020. Net interest income increased to $28.4 million in the second quarter of 2021, compared to $24.8 million for the comparable quarter of 2020. For the six-months ended June 30, 2021, net income and net interest income were $26.6 million and $54.5 million, respectively as compared to $17.3 million and $47.8 million for the six-months ended June 30, 2020.

Annualized key profitability ratios remained strong, as measured by a return on average equity (ROE) of 15.21% and a return on average assets (ROA) of 1.38% for the second quarter, compared to 11.64% and 1.07%, respectively, for the prior year quarter.

"Arrow delivered another solid quarter marked by both strong core earnings and profitability ratios," said Arrow President and CEO Thomas J. Murphy. "As the economy improves and pandemic-related restrictions are lifted, Arrow is well-positioned to provide both traditional banking for those eager to return to it, as well as digital banking for the growing group of customers who embraced our digital platform over the past year. We continue to make strategic investments in our digital customer experience and branch network to support changing customer needs."

Arrow announced plans to renovate a large portion of its Glens Falls headquarters, including workspace for support teams and the Main Office branch. Additionally, Saratoga National Bank announced plans to consolidate its Jones Road and Ballard Road Wilton branches this fall into a nearby office in a high-traffic commercial district. The new location and design will provide efficiencies and enhance our ability to develop relationships, even as routine transactions continue to migrate online.

Finally, Arrow's two banks rolled out digital enhancements in the second quarter, including a mobile app for business customers and SecureLOCKTM Equip, an addition to our consumer mobile apps that allows users to freeze their debit cards.

The following expands on our second-quarter financial results:

COVID-19 Response: In the second quarter, as restrictions were lifted by the state and CDC, Arrow likewise lifted the face covering requirement at its banking and insurance offices. Vaccination was and continues to be strongly encouraged for team members, and Arrow is monitoring vaccination rates of its employees. Personal protective equipment, including shields and hand sanitizing stations remain in place and our Business Continuity Task Force continues to meet regularly to address the latest guidance and to monitor the impact of the Delta variant of COVID-19.

In the second quarter, the Arrow lending team accelerated the forgiveness process for PPP borrowers, with about half of loans forgiven as of quarter-end.

Loan Growth: Total loans were $2.6 billion as of June 30, 2021. Loan growth for the second quarter of 2021 was $4.8 million and increased $82.2 million, or 3.2%, from June 30, 2020. Total outstanding commercial loans decreased $29.0 million, or 3.3%, in the second quarter. PPP loans, included in the commercial portfolio, decreased $46.0 million in the second quarter. The consumer loan portfolio grew by $31.4 million, or 3.6%, in the second quarter, primarily within the indirect automobile lending program. Total outstanding residential real estate loans, net of approximately $15.9 million of loans sold, increased $2.5 million for the second quarter of 2021.

Deposit Growth: At June 30, 2021, deposit balances were $3.4 billion. Deposits decreased in the second quarter of 2021 by $15.6 million and increased by $369.3 million, or 12.0%, from the prior-year level. Municipal deposits decreased $49.0 million in the second quarter consistent with seasonal municipal behavior. Non-municipal deposits increased $33.4 million for the quarter. Noninterest-bearing deposits represented 22.2% of total deposits at June 30, 2021, compared to 21.8% of total deposits at June 30, 2020. At June 30, 2021, other time deposits were $142.1 million, a decrease of $74.5 million compared to the prior year. Municipal deposits increased $138.9 million, or 19.1% from June 30, 2020.

Net Interest Income: Net interest income for the second quarter was $28.4 million, up 14.2% from $24.8 million in the comparable quarter of 2020. Interest and fees on loans were $27.0 million for the second quarter of 2021, an increase of 7.6% from $25.1 million for the quarter ending June 30, 2020. Interest and fees related to PPP loans, included in the $27.0 million, produced $3.1 million in revenue in the second quarter of 2021. Interest expense for the second quarter of 2021 was $1.3 million, a decrease of $1.8 million, or 57.8%, from the $3.2 million in expense for the comparable quarter ending June 30, 2020. The net interest margin was 3.08% for the quarter, compared to 3.05% for the second quarter of 2020. The increase in net interest margin from the prior year was due to a variety of factors, including the timing of the forgiveness of PPP loans offset by lower interest rates and increased cash balances.

Noninterest Income: Noninterest income for the three months ended June 30, 2021 was $8.5 million, compared to $7.2 million in the comparable 2020 quarter. Income from fiduciary activities for the three months ended June 30, 2021, increased by $454 thousand over the comparable quarter of 2020. Fees and other services to customers increased $641 thousand over the comparable quarter of 2020. Interchange fees related to increased customer activity of debit card usage was the largest driver of the increase.

Noninterest Expense: Noninterest expense for the second quarter of 2021 was $19.1 million, an increase from $17.2 million for the second quarter of 2020. The largest component of noninterest expense was salaries and benefits paid to our employees, which totaled $10.8 million for the second quarter of 2021. Technology expenses increased from the prior year in part due to variable costs related to increased utilization of consumer banking technology. Other non-interest expense included the expense for estimated credit losses on off-balance sheet credit exposures of $501 thousand in the second quarter.

Provision for Income Taxes: The provision for income taxes was $4.2 million for the second quarter of 2021, compared to $2.6 million for the same quarter of 2020. The effective income tax rates for the three- month periods ended June 30, 2021 and 2020, were 24.1% and 21.9%, respectively.

Asset Quality: Asset quality remained strong at June 30, 2021, as evidenced by low levels of nonperforming assets and charge-offs. Net loan losses, expressed as an annualized percentage of average loans outstanding, were 0.01% for the three-month period ended June 30, 2021, a decrease from 0.06% for the three-month period ended June 30, 2020. Nonperforming loans at June 30, 2021, were $7.8 million, up $1.3 million from June 30, 2020. Nonperforming assets of $8.0 million at June 30, 2021 represented 0.20% of period-end assets consistent with June 30, 2020.

For the second quarter of 2021, the provision for credit losses was $263 thousand and the expense for estimated credit losses on off-balance sheet credit exposures included in other liabilities was $501 thousand. The allowance for credit losses was $27.0 million on June 30, 2021, which represented 1.02% of loans outstanding, as compared to 1.03% on June 30, 2020.

Liquidity: As of June 30, 2021, Arrow's liquidity position was strong with interest-bearing cash balances at June 30, 2021 of $433.5 million. Arrow continues to be positioned to address any unexpected volatility, which may affect cash flow and deposit balances. At June 30, 2021, contingent collateralized lines of credit were in place and available through the Federal Home Loan Bank of New York and the Federal Reserve Bank, totaling $1.4 billion. Arrow has additional liquidity options currently available, including access to unsecured lines of credit such as Fed funds and brokered markets.

Capital: Total stockholders' equity was $353.0 million on June 30, 2021, up $35.3 million, or 11.1%, from June 30, 2020. Arrow's regulatory capital ratios remained strong in the second quarter of 2021. As of June 30, 2021, Arrow's Common Equity Tier 1 Capital Ratio was 13.79% and Total Risk-Based Capital Ratio was 15.78%. The capital ratios of Arrow and both its subsidiary banks continued to exceed the "well capitalized" regulatory standards.

Cash and Stock Dividends: On June 15, 2021, Arrow distributed a cash dividend of $0.26 per share. The cash dividend was 3% higher than the cash dividend paid by Arrow in the second quarter of 2020 when adjusted for the 3% stock dividend distributed on September 25, 2020.

Industry Recognition: Both of Arrow's banking subsidiaries, Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company, continue to hold BauerFinancial, Inc. 5-Star Superior Bank ratings. Additionally, in the second quarter of 2021, Arrow was named a Raymond James Community Bankers Cup winner, which recognizes the top 10% of community banks using various profitability, efficiency and balance sheet metrics.

___________

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. Arrow is the parent of Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company. Other subsidiaries include Upstate Agency, LLC and North Country Investment Advisers, Inc.

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 Arrow from time to time are useful in evaluating Arrow'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, including, in particular, statements regarding the uncertainty surrounding the COVID-19 pandemic. 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. Arrow 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 Arrow's Annual Report on Form 10-K for the year ended December 31, 2020, 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)



Three Months Ended June 30


Six Months Ended June 30


2021


2020


2021


2020

INTEREST AND DIVIDEND INCOME








Interest and Fees on Loans

$ 27,014


$ 25,077


$ 52,197


$ 49,951

Interest on Deposits at Banks

103


41


188


165

Interest and Dividends on Investment Securities:








Fully Taxable

1,671


1,871


3,177


4,064

Exempt from Federal Taxes

907


1,013


1,827


2,048

Total Interest and Dividend Income

29,695


28,002


57,389


56,228

INTEREST EXPENSE








Interest-Bearing Checking Accounts

192


310


411


797

Savings Deposits

501


1,173


1,066


3,644

Time Deposits over $250,000

69


438


189


971

Other Time Deposits

156


784


378


1,784

Federal Funds Purchased and








Securities Sold Under Agreements to Repurchase

1

16

3

38

Federal Home Loan Bank Advances

196

217

389

646

Junior Subordinated Obligations Issued to





Unconsolidated Subsidiary Trusts

171

173

340

401

Interest on Financing Leases

49


49


98


99

Total Interest Expense

1,335


3,160


2,874


8,380

NET INTEREST INCOME

28,360


24,842


54,515


47,848

Provision for Credit Losses

263


3,040


(385)


5,812

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES

28,097


21,802


54,900


42,036

NONINTEREST INCOME








Income From Fiduciary Activities

2,589


2,135


4,967


4,348

Fees for Other Services to Customers

2,919


2,278


5,528


4,729

Insurance Commissions

1,626


1,732


3,266


3,364

Net Gain (Loss) on Securities

196


(106)


356


(480)

Net Gain on Sales of Loans

625


547


2,040


760

Other Operating Income

523


578


929


2,137

Total Noninterest Income

8,478


7,164


17,086


14,858

NONINTEREST EXPENSE








Salaries and Employee Benefits

10,845


10,212


21,983


20,595

Occupancy Expenses, Net

1,484


1,345


3,077


2,794

Technology and Equipment Expense

3,710


3,227


7,169


6,579

FDIC Assessments

245


242


515


461

Other Operating Expense

2,803


2,219


5,021


4,570

Total Noninterest Expense

19,087


17,245


37,765


34,999

INCOME BEFORE PROVISION FOR INCOME TAXES

17,488


11,721


34,221


21,895

Provision for Income Taxes

4,209


2,562


7,662


4,609

NET INCOME

$ 13,279


$ 9,159


$ 26,559


$ 17,286

Average Shares Outstanding 1:








Basic

15,557


15,441


15,543


15,444

Diluted

15,616


15,448


15,589


15,460

Per Common Share:








Basic Earnings

$ 0.85


$ 0.59


$ 1.71


$ 1.12

Diluted Earnings

0.85


0.59


1.70


1.12



1

2020 Share and Per Share Amounts have been restated for the September 25, 2020, 3% stock dividend.




ARROW FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share and Per Share Amounts - Unaudited)



June 30,
2021

December 31,
2020

June 30,
2020

ASSETS




Cash and Due From Banks

$ 44,760

$ 42,116

$ 38,267

Interest-Bearing Deposits at Banks

433,468

338,875

215,003

Investment Securities:




Available-for-Sale at Fair Value

437,868

365,287

378,778

Held-to-Maturity (Approximate Fair Value of $210,916 at




June 30, 2021; $226,576 at December 31, 2020; and




$241,875 at June 30, 2020)

204,490

218,405

233,517

Equity Securities

1,992

1,636

1,583

FHLB and Federal Reserve Bank Stock

5,380

5,349

5,574

Loans

2,644,082

2,595,030

2,561,915

Allowance for Credit Losses

(27,010)

(29,232)

(26,300)

Net Loans

2,617,072

2,565,798

2,535,615

Premises and Equipment, Net

43,268

42,612

41,231

Goodwill

21,873

21,873

21,873

Other Intangible Assets, Net

2,082

1,950

1,662

Other Assets

83,938

84,735

74,074

Total Assets

$ 3,896,191

$ 3,688,636

$ 3,547,177

LIABILITIES




Noninterest-Bearing Deposits

761,991

701,341

667,585

Interest-Bearing Checking Accounts

977,955

832,434

791,521

Savings Deposits

1,471,591

1,423,358

1,262,102

Time Deposits over $250,000

84,357

123,622

130,935

Other Time Deposits

142,139

153,971

216,630

Total Deposits

3,438,033

3,234,726

3,068,773

Federal Funds Purchased and




Securities Sold Under Agreements to Repurchase

3,092

17,486

47,599

Federal Home Loan Bank Term Advances

45,000

45,000

50,000

Junior Subordinated Obligations Issued to Unconsolidated




Subsidiary Trusts

20,000

20,000

20,000

Finance Leases

5,193

5,217

5,239

Other Liabilities

31,840

31,815

37,879

Total Liabilities

3,543,158

3,354,244

3,229,490

STOCKHOLDERS' EQUITY




Preferred Stock, $1 Par Value and 1,000,000 Shares




Authorized at June 30, 2021, December 31, 2020 and March




31, 2020

Common Stock, $1 Par Value; 30,000,000 Shares Authorized




(20,194,474 Shares Issued at June 30, 2021 and December

31, 2020 and 19,606,449 at June 30, 2020)

20,194

20,194

19,606

Additional Paid-in Capital

355,195

353,662

336,643

Retained Earnings

60,494

41,899

42,704

Accumulated Other Comprehensive Loss

(2,658)

(816)

(276)

Treasury Stock, at Cost (4,622,797 Shares at June 30, 2021;




4,678,736 Shares at December 31, 2020 and 4,595,891




Shares at March 31, 2020)

(80,192)

(80,547)

(80,990)

Total Stockholders' Equity

353,033

334,392

317,687

Total Liabilities and Stockholders' Equity

$ 3,896,191

$ 3,688,636

$ 3,547,177




Arrow Financial Corporation

Selected Quarterly Information

(Dollars In Thousands, Except Per Share Amounts - Unaudited)


Quarter Ended

6/30/2021

3/31/2021

12/31/2020

9/30/2020


6/30/2020

Net Income

$ 13,279

$ 13,280

$ 12,495

$ 11,046


$ 9,159

Transactions in Net Income (Net of Tax):







Net Changes in Fair Value of Equity Investments

145

119

66

(53)


(80)

Share and Per Share Data:1







Period End Shares Outstanding

15,572

15,543

15,516

15,489


15,461

Basic Average Shares Outstanding

15,557

15,528

15,499

15,472


15,441

Diluted Average Shares Outstanding

15,616

15,563

15,515

15,481


15,448

Basic Earnings Per Share

$ 0.85

$ 0.86

$ 0.81

$ 0.71


$ 0.59

Diluted Earnings Per Share

0.85

0.85

0.81

0.71


0.59

Cash Dividend Per Share

0.260

0.260

0.260

0.252


0.252

Selected Quarterly Average Balances:







Interest-Bearing Deposits at Banks

$ 369,034

$ 334,155

$ 349,430

$ 242,928


$ 155,931

Investment Securities

668,089

593,822

590,151

592,457


607,094

Loans

2,651,449

2,618,362

2,610,834

2,582,253


2,518,198

Deposits

3,395,271

3,254,815

3,256,238

3,082,499


2,952,432

Other Borrowed Funds

74,957

82,659

95,047

136,117


129,383

Shareholders' Equity

350,203

340,708

331,899

324,269


316,380

Total Assets

3,851,921

3,712,020

3,721,954

3,583,322


3,437,155

Return on Average Assets, annualized

1.38 %

1.45 %

1.34 %

1.23 %


1.07 %

Return on Average Equity, annualized

15.21 %

15.81 %

14.98 %

13.55 %


11.64 %

Return on Average Tangible Equity, annualized 2

16.32 %

17.00 %

16.13 %

14.61 %


12.58 %

Average Earning Assets

$ 3,688,572

$ 3,546,339

$ 3,550,415

$ 3,417,638


$ 3,281,223

Average Paying Liabilities

2,721,961

2,639,240

2,674,795

2,545,435


2,457,690

Interest Income

29,695

27,694

28,372

27,296


28,002

Tax-Equivalent Adjustment 3

293

235

251

284


281

Interest Income, Tax-Equivalent 3

29,988

27,929

28,623

27,580


28,283

Interest Expense

1,335

1,539

1,918

2,396


3,160

Net Interest Income

28,360

26,155

26,454

24,900


24,842

Net Interest Income, Tax-Equivalent 3

28,653

26,390

26,705

25,184


25,123

Net Interest Margin, annualized

3.08 %

2.99 %

2.96 %

2.90 %


3.05 %

Net Interest Margin, Tax-Equivalent, annualized 3

3.12 %

3.02 %

2.99 %

2.93 %


3.08 %

Efficiency Ratio Calculation: 4







Noninterest Expense

$ 19,087

$ 18,678

$ 18,192

$ 17,487


$ 17,245

Less: Intangible Asset Amortization

53

54

56

56


57

Net Noninterest Expense

$ 19,034

$ 18,624

$ 18,136

$ 17,431


$ 17,188

Net Interest Income, Tax-Equivalent

$ 28,653

$ 26,390

$ 26,705

$ 25,184


$ 25,123

Noninterest Income

8,478

8,608

9,103

8,697


7,164

Less: Net Gain (Loss) on Securities

196

160

88

(72)


(106)

Net Gross Income

$ 36,935

$ 34,838

$ 35,720

$ 33,953


$ 32,394

Efficiency Ratio

51.53 %

53.46 %

50.77 %

51.34 %


53.06 %

Period-End Capital Information:







Total Stockholders' Equity (i.e. Book Value)

$ 353,033

$ 342,413

$ 334,392

$ 325,660


$ 317,687

Book Value per Share 1

22.67

22.03

21.55

21.02


20.55

Goodwill and Other Intangible Assets, net

23,955

23,922

23,823

23,662


23,535

Tangible Book Value per Share 1,2

21.13

20.49

20.02

19.50


19.03

Capital Ratios:5







Tier 1 Leverage Ratio

9.29 %

9.37 %

9.07 %

9.17 %


9.32 %

Common Equity Tier 1 Capital Ratio

13.79 %

13.56 %

13.39 %

13.20 %


13.07 %

Tier 1 Risk-Based Capital Ratio

14.61 %

14.39 %

14.24 %

14.06 %


13.94 %

Total Risk-Based Capital Ratio

15.78 %

15.55 %

15.48 %

15.28 %


15.10 %

Assets Under Trust Admin. & Investment Mgmt.

$ 1,804,854

$ 1,725,754

$ 1,659,029

$ 1,537,128


$ 1,502,866




Arrow Financial Corporation

Selected Quarterly Information - Continued

(Dollars In Thousands, Except Per Share Amounts - Unaudited)


Footnotes:


1.

Share and Per Share Data have been restated for the September 25, 2020, 3% stock dividend.



2.

Non-GAAP Financial Measures Reconciliation: Tangible Book Value and Tangible Equity exclude goodwill and other intangible assets, net from total equity. These are non-GAAP financial measures which Arrow believes provides investors with information that is useful in understanding its financial performance.




6/30/2021

3/31/2021

12/31/2020

9/30/2020

6/30/2020

Total Stockholders' Equity (GAAP)

$ 353,033

$ 342,413

$ 334,392

$ 325,660

$ 317,687

Less: Goodwill and Other Intangible assets, net

23,955

23,922

23,823

23,662

23,535

Tangible Equity (Non-GAAP)

$ 329,078

$ 318,491

$ 310,569

$ 301,998

$ 294,152

Period End Shares Outstanding

15,572

15,543

15,516

15,489

15,461

Tangible Book Value per Share (Non-






GAAP)

$ 21.13

$ 20.49

$ 20.02

$ 19.50

$ 19.03

Net Income

13,279

13,280

12,495

11,046

9,159

Return on Average Tangible Equity (Net Income/Tangible Equity - Annualized)

16.32 %

17.00 %

16.13 %

14.61 %

12.58 %



3.

Non-GAAP Financial Measures Reconciliation: Net Interest Margin, Tax-Equivalent is the ratio of our annualized tax-equivalent net interest income to average earning assets. This is also a non-GAAP financial measure which Arrow believes provides investors with information that is useful in understanding its financial performance.




6/30/2021

3/31/2021

12/31/2020

9/30/2020

6/30/2020

Interest Income (GAAP)

$ 29,695

$ 27,694

$ 28,372

$ 27,296

$ 28,002

Add: Tax-Equivalent adjustment (Non-GAAP)

293

235

251

284

281

Interest Income - Tax Equivalent (Non-GAAP)

$ 29,988

$ 27,929

$ 28,623

$ 27,580

$ 28,283

Net Interest Income (GAAP)

$ 28,360

$ 26,155

$ 26,454

$ 24,900

$ 24,842

Add: Tax-Equivalent adjustment (Non-GAAP)

293

235

251

284

281

Net Interest Income - Tax Equivalent (Non-GAAP)

$ 28,653

$ 26,390

$ 26,705

$ 25,184

$ 25,123

Average Earning Assets

$3,688,572

$3,546,339

$3,550,415

$3,417,638

$3,281,223

Net Interest Margin (Non-GAAP)*

3.12 %

3.02 %

2.99 %

2.93 %

3.08 %



4.

Non-GAAP Financial Measures: Financial Institutions often use the "efficiency ratio", a non-GAAP ratio, as a measure of expense control. Arrow believes the efficiency ratio provides investors with information that is useful in understanding its financial performance. Arrow defines efficiency ratio as the ratio of noninterest expense to net gross income (which equals tax-equivalent net interest income plus noninterest income, as adjusted).



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 CET1 ratio at June 30, 2021 listed in the tables (i.e., 13.79%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%).




6/30/2021

3/31/2021

12/31/2020

9/30/2020

6/30/2020

Total Risk Weighted Assets

$2,438,445

$2,404,456

$2,357,094

$2,321,637

$2,283,430

Common Equity Tier 1 Capital

336,265

326,039

315,696

306,356

298,362

Common Equity Tier 1 Ratio

13.79 %

13.56 %

13.39 %

13.20 %

13.07 %



* Quarterly ratios have been annualized.





Arrow Financial Corporation

Consolidated Financial Information

(Dollars in Thousands - Unaudited)


Quarter Ended:




Loan Portfolio

6/30/2021

12/31/2020

6/30/2020

Commercial Loans

$ 242,790

$ 240,554

$ 276,671

Commercial Real Estate Loans

598,241

571,787

533,032

Subtotal Commercial Loan Portfolio

841,031

812,341

809,703

Consumer Loans

892,549

859,768

828,493

Residential Real Estate Loans

910,502

922,921

923,719

Total Loans

$ 2,644,082

$ 2,595,030

$ 2,561,915

Allowance for Credit Losses




Allowance for Credit Losses, Beginning of Quarter

$ 26,840

$ 28,446

$ 23,637

Loans Charged-off

(443)

(630)

(487)

Less Recoveries of Loans Previously Charged-off

350

179

110

Net Loans Charged-off

(93)

(451)

(377)

Provision for Credit Losses

263

1,237

3,040

Allowance for Credit Losses, End of Quarter

$ 27,010

$ 29,232

$ 26,300

Nonperforming Assets




Nonaccrual Loans

$ 7,102

$ 6,033

$ 5,461

Loans Past Due 90 or More Days and Accruing

595

228

901

Loans Restructured and in Compliance with Modified Terms

78

145

150

Total Nonperforming Loans

7,775

6,406

6,512

Repossessed Assets

99

155

116

Other Real Estate Owned

99

595

Total Nonperforming Assets

$ 7,973

$ 6,561

$ 7,223

Key Asset Quality Ratios




Net Loans Charged-off to Average Loans,




Quarter-to-date Annualized

0.01 %

0.07 %

0.06 %

Provision for Credit Losses to Average Loans, Quarter-to-date Annualized

0.04 %

0.19 %

0.49 %

Allowance for Credit Losses to Period-End Loans

1.02 %

1.13 %

1.03 %

Allowance for Credit Losses to Period-End Nonperforming Loans

347.40 %

456.32 %

403.87 %

Nonperforming Loans to Period-End Loans

0.29 %

0.25 %

0.25 %

Nonperforming Assets to Period-End Assets

0.20 %

0.18 %

0.20 %

Six Month Period Ended:




Allowance for Loan Losses




Allowance for Loan Losses, Beginning of Year

$ 29,232


$ 21,187

Impact of the Adoption of ASU 2016-13

(1,300)


Loans Charged-off

(1,076)


(968)

Less Recoveries of Loans Previously Charged-off

539


269

Net Loans Charged-off

(537)


(699)

Provision for Loan Losses

(385)


5,812

Allowance for Loan Losses, End of Period

$ 27,010


$ 26,300

Key Asset Quality Ratios




Net Loans Charged-off to Average Loans, Annualized

0.04 %


0.06 %

Provision for Loan Losses to Average Loans, Annualized

(0.03)%


0.48 %

Cision
Cision

View original content:https://www.prnewswire.com/news-releases/arrow-reports-13-3-million-in-q2-net-income-as-covid-19-recovery-continues-301342009.html

SOURCE Arrow Financial Corporation