Arrow Financial Corporation · NASDAQ:AROW
Arrow Financial — Shareholder Meeting (June 2024)
43 slides from Arrow Financial's shareholder meeting presentation, Jun 5, 2024
Slide 1: Annual Meeting of Shareholders June 5, 2024
ANNUAL MEETING OF SHAREHOLDERS June 5, 2024
Slide 2: Welcome
Welcome =A\rrRow Financial Corporation
Slide 3: Today's Agenda
Today’s Agenda Welcome Arrow Overview Business Meeting Financials Commitment to Growth Closing
Slide 4: Safe Harbor 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 Michele Kloeppel and Bill Vega Attorneys
Slide 6: Welcome, Crowe LLP
Welcome, Crowe LLP Ashish Ahlowalia Auditor
Slide 7: Arrow Overview
Arrow Overview =A\rrRow Financial Corporation
Slide 8: Our Family of Companies
Our Family of Companies =ARROW Financial Corporation Glens FullsNational SARATOGA 3 UPSTATE, Bank and Trust Company A A INSURANCE
Slide 9: Our Market
Our Market Rensselaer Schenectady Saratoga Essex Clinton Albany Washington Counties Branches Insurance Offices 8 37 9
Slide 10: Our Guiding Language
Our Guiding Language At the Arrow Family of Companies, our mission to serve our customers, communities, employees and shareholders has never been clearer. Here’s how we define our purpose and look to shape our future together. To strengthen financial lives within our communities through the power of
Slide 11: Our Values
Our Values We are your neighbors. We believe a great team delivers great results. We continuously improve. We do the right thing the right way. We make data-driven decisions. We value differences.
Slide 12: Our Philanthropy
Our Philanthropy TED ANCL? OUR 2023 GIVING IN ACTION Caring $781,000 ioicr & 11,193 5. 25220 5612 Nearly $3 million donated in the last five years. We're so proud to serve you and our communities, =A\rrRow Financial Corporation
Slide 13: Our Directors
Our Directors Mark L. Behan Founder and President, Behan Communications, Inc. Tenée R. Casaccio, AIA President, JMZ Architects and Planners, P.C. Gregory J. Champion Executive Vice President – Legal, Syncromune, Inc. Gary C. Dake President, Stewart’s Shops Corp. William L. Owens, Esq. (Chair) Partne
Slide 14: Thank You, Mr. Owens
Thank You, Mr. Owens William L. Owens, Esq. Partner, Stafford, Owens, Piller, Murnane, Kelleher and Trombley, PLLC
Slide 15: Welcome, Ms. Casaccio
Welcome, Ms. Casaccio Tenée R. Casaccio, AIA President, JMZ Architects and Planners, P.C.
Slide 16: Our Executive Management
Our Executive Management Brooke Pancoe EVP and Chief Human Resources Officer Marc Yrsha SEVP and Chief Banking Officer Andrew Wise SEVP and Chief Risk Officer Michael Jacobs EVP and Chief Information Officer Penko K. Ivanov SEVP, Chief Financial Officer, Treasurer and Chief Accounting Officer David
Slide 17: Our Senior Management
Our Senior Management Dave Riihimaki SVP and Director of Credit Administration Douglas Thorn SVP and Director of Insurance Operations Annette Reitano SVP and Director of Marketing and Communications Ginny Sullivan SVP and Director of Residential Lending Daniel Segrell SVP and Director of Consumer Le
Slide 18: Business Meeting
Business Meeting David S. DeMarco President and CEO
Slide 19: 2024 Shareholder Voting Proposals
2024 Shareholder Voting Proposals 1. Election of three Class B Directors to three-year terms. 2. Advisory approval of our 2023 executive compensation (“Say on Pay”). 3. Approval of the Arrow Financial Corporation 2023 Employee Stock Purchase Plan. 4. Ratification of the selection of Crowe LLP as our
Slide 20: Financials
Financials Penko Ivanov SEVP, CFO and Treasurer *This presentation is subject to our Safe Harbor, Forward-Looking Statements, found on slide 4. *
Slide 21: Financial Highlights
Financial Highlights Arrow Financial Corporation delivered a year of solid earnings, sustained profitability and robust loan growth. Please refer to the 2023 10-K for a reconciliation of any non-GAAP measures.
Slide 22: 2023 Summary
2023 Summary Total loans does not include FV hedge mark of $5.8M Total Assets $4.2B, up 5.0% from prior year $3.2B, up 7.5% from prior year Total Loans Earnings Per Share $1.77 0.74% Return on Average Assets
Slide 23: Assets
Assets $2,988 $3,184 $3,689 $4,028 $3,970 $4,170 2018 2019 2020 2021 2022 2023 Assets 6.9% CAGR History of strong performanceDollars in millions
Slide 24: Loans
$2,196 $2,386 $2,595 $2,668 $2,983 $3,207 2018 2019 2020 2021 2022 2023 Loans Loans History of strong performanceDollars in millions 7.9% CAGR 2023 loan figure reported above does not include FV hedge mark of $5.8M
Slide 25: Deposits
Deposits History of strong performanceDollars in millions $2,346 $2,616 $3,235 $3,550 $3,498 $3,513 2018 2019 2020 2021 2022 2023 Deposits 8.4% CAGR 2023 deposits exclude $175M of brokered certificates of deposit
Slide 26: Credit
Credit 0.25% 0.18% 0.25% 0.44% 0.40% 0.66% 2018 2019 2020 2021 2022 2023 NPL1 / Gross Loans • Portfolio credit performance is strong • ~$15.3M commercial loan relationship migrated to NPL status in 4Q 2023 • Collateral position is strong; no loss anticipated • Charge-offs, down from 8bps in 2022 to
Slide 27: Return Metrics
Return Metrics 1.24% 1.17% 1.28% 1.21% 0.74% 2019 2020 2021 2022 2023 Return on Average Assets 13.17% 12.77% 14.09% 13.55% 8.29% 2019 2020 2021 2022 2023 Return on Average Equity • Delivered strong ROA and ROE results before, during and after pandemic • Balance Sheet grew more than 30% during the sa
Slide 28: EPS and Dividends
EPS and Dividends $2.23 $2.41 $2.92 $2.86 $1.77 2019 2020 2021 2022 2023 Diluted EPS $0.90 $0.93 $0.96 $1.03 $1.06 2019 2020 2021 2022 2023 Cash Dividends Paid Per Share Per share data has been restated for stock dividends distributed. • Earnings able to support consistent dividend growth/return of
Slide 29: Strong Capital Position
Strong Capital Position 9.84% 13.00% 13.66% 14.74% 8.60% 4.0% 4.5% 6.0% 8.0% 0% 2% 4% 6% 8% 10% 12% 14% 16% Tier 1 Leverage Ratio Common Equity Tier 1 Capital Tier 1 Risk-Based Capital Total Risk-Based Capital Tangible Common Equity Select Capital Ratios – Arrow Minimum Regulatory Capital Ratios 202
Slide 30: 1Q 2024 Performance
1Q 2024 Performance =A\rrRow Financial Corporation
Slide 31: 1Q 2024 Highlights
1Q 2024 Highlights • Net income of $7.7M and EPS of $0.45 • Annualized loan growth of 6.1% in 1Q’24 • Loan yields and net interest margin expanding from low points of 2023 • Exceptional asset/credit quality • Paid 1Q’24 cash dividend and declared 2Q’24 cash dividend (paid 5/24) • Returned an additio
Slide 32: 1Q 2024 Financial Summary
1Q 2024 Financial Summary $21.06 $21.25 4Q23 1Q24 Fully Diluted Tangible Book Value 2.53% 2.60% 4Q23 1Q24 Net Interest Margin (NIM) Loans exclude impact of FV hedge mark Deposits exclude $175M of brokered certificates of deposit $3,207 $3,257 4Q23 1Q24 Loan Balances Dollars in millions $3,513 $3,604
Slide 33: Commitment to Growth
Commitment to Growth =A\rrRow Financial Corporation
Slide 34: Overall Strong Performance
Overall Strong Performance In 2023, we delivered another year of strong performance, and we remain focused. Strong earnings and record loan growth Completed Main Headquarters renovation Invested in our team Advanced our technology Socially conscious performance Made meaningful strides in our communi
Slide 35: BauerFinancial Consecutive Quarters
BauerFinancial 67CONSECUTIVE QUARTERS Glens Falls National Bank Saratoga National Bank 59CONSECUTIVE QUARTERS
Slide 36: Whitehall Branch Acquisition
Whitehall Branch Acquisition Sale is targeted for completion in 3Q24 Planning is underway to open the doors to our new customers Arrow to acquire Berkshire Bank Whitehall Branch Recently received regulatory approval 1 1
Slide 37: Growing Our Team
Growing Our Team Growing Our Team Strategic Hires Employer of Choice Recently added several experienced loan and deposit team members in the region. Currently exploring other strategic hires for business development and are focused on continuing to build our teams. Striving to be an employer of choi
Slide 38: Working to Protect Our Customers Against Fraud
Working to Protect Our Customers Against Fraud Made changes to our fraud division Created a new department dedicated to preventing financial crimes This new department will work to protect our customers and our communities from the evolving tactics used by fraudsters Educate our customers and branch
Slide 39: Advancing Technology
Advancing Technology Advance technology, enhance capabilities and deliver superior customer service Efficient tools and mobile capabilities Easy-to-use fraud prevention tools Improve operational efficiency and internal reporting
Slide 40: Socially Conscious Performance
Socially Conscious Performance • We believe that socially conscious performance is critical to attracting and retaining the best talent, meeting the evolving needs of our customers and being good stewards of our communities. • We are committed to operating in a manner that provides and maintains saf
Slide 41: Team
Team = xe) reais @ Open-minded a z Thoughtful (<b) A 2 sy cf ) rs Eig s 2B5 We e oa EMP 4 oO ti Committed § 8 aS — a 8 o rH : & mpatheti = & FA I io Sympathetic a NS a a a eS [Bo = S H @ 5 B i) 26 3 © sO &., oO Eager Sincere » QO) "4 Intelligent e ) «Caring =A\rrRow Financial Corporation Organized.
Slide 42: Thank You / Contact Us
Thank You Contact Us Great Team. Great Results. (518) 415-4307 corporatesecretary@arrowbank.com arrowfinancial.com 250 Glen Street, Glens Falls, NY 12801
Slide 43: Arrow Financial Corporation
=ARROW Financial Corporation Glens FullsNational SARATOGA 3 UPSTATE, Bank and Trust Company A A INSURANCE