Arrow Financial Corporation · NASDAQ:AROW
Arrow Financial — Shareholder Meeting (May 2022)
45 slides from Arrow Financial's shareholder meeting presentation, May 4, 2022
Slide 1: Annual Meeting of Shareholders May 4, 2022
ANNUAL MEETING OF SHAREHOLDERS May 4, 2022
Slide 2: Arrow Financial Corporation
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Slide 3: Today's Agenda
Today’s Agenda Welcome Arrow Overview Business Meeting Financials Strategic Focus Closing
Slide 4: Forward-Looking Statement
The information in this presentation may contain statements based on management’s beliefs, assumptions, expectations, estimates and/or projections about the future. Such "forward-looking statements," as defined in Section 21E of the Securities Exchange Act of 1934, as amended, involve a degree of un
Slide 5: Acknowledgements
Acknowledgements Annual Meeting Technical Team Frank Arren, Inspector of Elections Maryteresa Crealese and J. Patrick Holmes Auditors Michele Kloeppel and Patrick Paterson Attorneys
Slide 6: Retirement
Retirement • Director of the Arrow with more than 25 years of service. • President of Glens Falls Cement Company, 1985-1999. • President and CEO of Lone Star Industries in Indiana,1999-2004 • President of the Midwest Division of Buzzi Unicem, USA, 2004-2005. Thank you for your service to Arrow! Mich
Slide 7: Arrow Overview
Arrow Overview =ArROWw Financial Corporation
Slide 8: Our Family of Companies
Our Family of Companies =\rROW Financial Corporation Glens FillsNational 3aRAEOGS =D ursrars, Bank and Trust Company SSTION AL | INSURANCE
Slide 9: Our Market
Our Market Rensselaer Schenectady Saratoga Essex Clinton Albany Washington Counties Branches Insurance Offices 8 38 9
Slide 10: Our Guiding Language
Our Guiding Language To strengthen financial lives within our communities through the power of care, capability, commitment and collaboration. Mission To build meaningful and long-lasting relationships with our customers, employees and shareholders. Vision • We are your neighbors. • We believe a gre
Slide 11: Our Philanthropy
Our Philanthropy $674,000 ix employee Donated to im communities | contributions /, ] 57 Hours @ 1 7 Be Employee regaet Volunteers COMMUNITY COUNTIES 4 50+ ORGANIZATIONS manent SUPPORTED i to Plattsburgh Our phitsahigy sipped many areas of impact, including food insecurity, affordable housing, financ
Slide 12: Our Directors
Our Directors William L. Owens, Esq. Partner, Stafford, Owens, Piller, Murnane, Kelleher and Trombley, PLLC Colin L. Read, PhD Professor of Economics/ Finance, SUNY Plattsburgh Thomas L. Hoy (Chairman) Retired President and CEO, Arrow Financial Corporation Mark L. Behan President, Behan Communicatio
Slide 13: Our Executive Management
Our Executive Management Thomas Murphy President and CEO Edward Campanella SEVP, CFO and Treasurer David DeMarco SEVP and Chief Banking Officer David Kaiser SEVP and Chief Credit Officer Andrew Wise SEVP and Chief Operating Officer
Slide 14: Our Senior Management
Our Senior Management Michael Jacobs EVP and Chief Information Officer Christine Snow EVP and Director of Customer Experience Marc Yrsha EVP and Director of Relationship Banking Wendy Brust SVP and IT Systems and Operations Manager Kurt Moser SVP and Director of Corporate Banking Leslie Munger SVP a
Slide 15: Business Meeting
Business Meeting Tom Murphy =ArROWw Financial Corporation
Slide 16: 2022 Shareholder Voting Proposals
2022 Shareholder Voting Proposals 1. Election of four Class C Directors to three-year terms. 2. Advisory approval of our 2022 executive compensation (“Say on Pay”). 3. Approval of the Arrow Financial Corporation 2022 Long Term Incentive Plan. 4. Ratification of the selection of KPMG LLP as our indep
Slide 17: Financials
mlatclarercits Ed Campanella =ArROWw Financial Corporation
Slide 18: Total Assets
Total Assets 5 Year History (S in Millions) $4,500 $4,000 eui02s $3,689 $3,500 $3,184 $2,988 $3,000 + $2,760 ; §2,500 + $2,000 + al 7 2017 2018 2019 2020 2021 =\rrow Financial Corporation
Slide 19: Total Loans
Total Loans $3,500 $3,000 $2,500 + $2,000 $1,500 $1,000 — 5 Year History (S in Millions) $2,386 L, $2,196 $1,951 2017 2018 2019 2020 2021 =ArROWw Financial Corporation
Slide 20: Loan Mix
Loan Mix Diversification between 3 primary sectors As of 12/31/21
Slide 21: Excellent Credit Quality
Excellent Credit Quality 0.50% 1.40% 1.13% 1.20% 0.40% 1.02% 0.95% 0.92% 0.89% 1.00% 0.30% 0.80% pie 0.60% 0.40% 0.10% 0.20% 0.28% 0.23% 0.18% 0.18% 0.29% 0.00% + 0.00% 2017 2018 2019 2020 2021 Non-Performing Assets / Assets «Allowance / Total Loans =ArROW Financial Corporation.
Slide 22: Total Deposits
Total Deposits $4,000 $3,500 - $3,000 $2,500 - $2,000 - $1,500 $1,000 - 5 Year History ($ in Millions) $2,616 $2,245 $2,346 $3,235 2017 2018 2019 2020 2021 =ArROWw Financial Corporation
Slide 23: Deposit Mix
Deposit Mix As of 12/31/21 Core deposits remain our primary source of funding
Slide 24: Earnings Summary
Earnings Summary • 2021 net income of $49.9 million, up $9.0 million or 22.1% over 2020 • Revenue increased by $10.9 million, or 8.2% • Non-interest income was 23% of total revenue in 2021 Highlights Dollars in thousands ($000’s)
Slide 25: Total Revenue
Total Revenue Total revenue increased by 8.2% in 2021 74% of revenue is generated by Net Interest Income
Slide 26: Net Interest Income
Net Interest Income 77% of total revenue is from Net-Interest Income Year Ended December 31, 2021 ($ in Millions)
Slide 27: Net Interest Margin
Net Interest Margin Interest rates remained near historic lows in 2021
Slide 28: Non-Interest Income
Non-Interest Income 23% of total revenue is from Non-Interest Income Year Ended December 31, 2021 ($ in Millions)
Slide 29: Consistent Returns
Consistent Returns Return on Average Assets Return on Average Equity 12.77% =\rrow Financial Corporation.
Slide 30: Earnings Per Share (diluted)
Earnings Per Share (diluted) Per share amounts have been restated for stock dividends distributed.
Slide 31: Cash Dividends Paid Per Share
Cash Dividends Paid Per Share Years Ended December 31 (5-Year History) Per share amounts have been restated for stock dividends distributed.
Slide 32: Strong Capital
Strong Capital 11.00% 10.00% 9.00% 8.00% 7.00% 6.00% Tier 1 Leverage Ratio 9.98% 9.49% 9.07% 9.20% 2017 2018 2019 2020 2021 =\rrow Financial Corporation.
Slide 33: Book Value Per Share
Book Value Per Share Per share amounts have been restated for stock dividends distributed.
Slide 34: Q1 2022 Highlights
Q1 2022 • Net Income of $12.6 million • Net of PPP runoff, loan balances grew by $93.2 million in Q1 2022 • Deposit balances grew by $164.9 million in Q1 2022 • Net Interest Income increased by 6.4% compared to 2021 Q1 • Return on Average Assets of 1.26% • Return on Average Equity of 13.77% • Q1 202
Slide 35: Strong Performance / Steady Growth
Strong Performance / Steady Growth Like most businesses, 2021 continued to challenge us in many ways. However, with teamwork, resilience and dedication, the Arrow Team excelled. • Continued strong financial performance • Continued exceptional Shareholder value • Continued strong asset quality • Exce
Slide 36: External Recognition
External Recognition • Arrow was named a Raymond James Community Bankers Cup winner in 2021, which recognizes the top 10% of community banks using various profitability, efficiency and balance sheet metrics. • Arrow was also selected as one of the top 35 banks and thrifts that comprise the Piper San
Slide 37: Strategic Focus
Strategic Focus =ArROWw Financial Corporation
Slide 38: Branch Optimization
Branch Optimization • Saratoga National Bank consolidated its smaller Jones Road and Ballard Road branches into one larger, fully renovated branch in nearby Wilton Square shopping plaza offering customers a better and more convenient location. • Glens Falls National Bank consolidated two branches wi
Slide 39: Headquarters Renovation
Headquarters Renovation • We are replacing aging building equipment with new, energy-efficient systems and making significant exterior and interior improvements. • Our Main Office will relocate to a new, totally renovated space for customer transactions. • The renovation also includes development of
Slide 40: Advancing Technology
Advancing Technology • Our Business Online Banking interface was updated, followed by the launch of a Business Mobile App. • Within our consumer digital banking platforms, we rolled out SecurLOCK, a feature that allows customers to control their debit card and customize alerts. • Our mortgage applic
Slide 41: Socially Conscious Performance
Socially Conscious Performance • We are committed to conserving natural resources and complying with environmental regulations. • We are meeting financial needs of the low- to moderate-income population, providing professional development and holistic support of our Team, and giving back to our comm
Slide 42: Pandemic Performance
Pandemic Performance • In early 2021, both banks were named “Top Pandemic Performers” by the Rivel Banking Benchmark Survey, based on customer feedback. • In 2021, we assisted over 900 business customers with more than $92 million in second-round Paycheck Protection Program loans to help maintain th
Slide 43: Team Effort GREAT Team GREAT Results
Team Effort GREAT Team GREAT Results
Slide 44: Closing
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Slide 45: Arrow Financial Corporation
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