Arrow Financial Corporation · NASDAQ:AROW
Arrow Financial — Q3 2025 Earnings Presentation
45 slides from Arrow Financial's earnings presentation, Oct 30, 2025
Slide 1: 3Q 2025 Investor Presentation
3Q 2025 Investor Presentation October 30, 2025 -• •RRO~ I Corporation F1nanc1a
Slide 2: Safe Harbor
Safe Harbor The information contained in this investor presentation 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. These statements can sometimes be identified by Arrow's us
Slide 3: Table of Contents
Table of Contents • 3Q 2025 Results and Performance Metrics • Non-Interest Income/Expense • Loans • Deposits/Funding Sources • Credit Quality • Investments • Capital Actions and Ownership • Overview and History / / 3 -=~RROW Financial Corporation
Slide 4: 3Q 2025 Results
3Q 2025 Results -• •RRO~ I Corporation F1nanc1a
Slide 5: 3Q25 Summary
3Q25 Summary Earnings Return on FTE NIM1 Return on Per Share Average Assets 3.24% Average Equity $0.77 1.16% vs. 12.32% 3.16% in 2Q Efficiency Ratio1 Tangible Book Accelerating NIM Very low NPLs – of 59.6% Value (TBV1) per expansion majority of which Share through Y/E are making $23.85 payments In J
Slide 6: 3Q25 Highlights
3Q25 Highlights Net income of $12.8 million; $0.77 EPS, an increase of over 18% over 2Q25 YTD Net Income of $29.9 million; $1.80 EPS Residual unification spend in 3Q25 of $600k (-$0.03 EPS); YTD $2.3 million (-$0.11 EPS) 1 FTE NIM of 3.24% vs. 3.16% for 2Q25; YTD NIM of 3.16% ROA of 1.16%;
Slide 7: 2025 Reported Results & Key Metrics
2025 Reported Results & Key Metrics 3Q 2025 YTD 2025 EPS $0.77 $1.80 FTE Net Interest Margin1 3.24% 3.16% Profitability Net Revenue $42.8 million $122.2 million Return on Average Assets (ROA) 1.16% 0.92% Return on Average Equity (ROE) 12.32% 9.81% $3.4 billion in gross loans 83.95% loan-to-deposit r
Slide 8: Net Interest Margin
Net Interest Margin 3.24% 3.24% 3.16% 3.08% 3.16% 2.67% 2.62% 2.69% 2.79% 2.85% 3.08% 5.36% 5.43% 5.01% 5.17% 5.27% 5.30% 5.30% 4.62% 2.85% 2.79% 2.06% 2.12% 2.12% 2.15% 2.69% 1.96% 1.96% 1.95% 2.63% 2.62% 1.43% 2.55% 2.55% 2023 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1
Slide 9: 3Q 2025 Consolidated Financial Statements
3Q 2025 Consolidated Financial Statements UNAUDITED Linked Quarter and Comparative YTD Dollars in millions, except per share data Fav/(Unfav) YTD YTD Fav/(Unfav) Income Statement 3Q25 2Q25 Income Statement Var1 3Q25 3Q24 Var1 Total Interest Income $ 53.6 $ 51.6 2.0 Total Interest Income $ 155.5 $ 14
Slide 10: 3Q 2025 Consolidated Financial Statements
3Q 2025 Consolidated Financial Statements Linked Quarter UNAUDITED Dollars in millions, except per share data 3Q25 vs 3Q25 vs Balance Sheet 3Q25 2Q25 4Q24 2Q251 4Q241 Cash & Cash Equivalents $ 397.4 $ 268.4 $ 154.5 129.0 242.9 Investment Securities 558.4 528.4 570.8 30.0 (12.4) Loans Receivable, net
Slide 11: Non-Interest Income/Expense
Non-Interest Income/Expense -• •RRO~ I Corporation F1nanc1a
Slide 12: 3Q 2025 Non-Interest Income
3Q 2025 Non-Interest Income Dollars in thousands Three Months Ended September 30, 2025 June 30, 2025 September 30, 2024 Fees for Other Services to Customers $ 2,857 $ 2,787 $ 2,881 Fiduciary Activities/Wealth Management 2,600 2,398 2,429 Insurance Commissions 1,986 1,804 1,955 Other Operating Income
Slide 13: 3Q 2025 Non-Interest Expense
3Q 2025 Non-Interest Expense Dollars in thousands Three Months Ended September 30, 2025 June 30, 2025 September 30, 2024 Compensation & Benefits $ 14,339 $ 14,086 $ 13,446 Occupancy & Equipment 1,907 1,952 1,754 Data Processing & Technology 4,963 5,589 4,692 Advertising & Contributions 438 419 305 L
Slide 14: Operating Expenses — Efficiency Trends
Operating Expenses — Efficiency Trends 68.8% 67.7% 66.5% 63.4% 59.6% 2023 2024 1Q 2025 2Q 2025 3Q 2025 Operating efficiency trends on the right track Generating positive core operating leverage Ongoing expense reviews Non-core items in rear-view mirror (Unification) Operating expenses to b
Slide 15: Loans
Loans -• •RRO~ I Corporation F1nanc1a
Slide 16: Loans
Loans Loan Portfolio ~ $3.44 billion • 3Q25 loan growth of ~$17M or 2.0% (annualized) • YTD loan growth ~$62M, or 2.4%, excluding $15M reduction due to 1Q credit event3 Commercial (C&I)1 • MTD Oct 2025 loan growth of $7MM; ahead of 3Q25 and YTD pace 11.2% • Portfolio exit rates2 increased 5bps from
Slide 17: Loan Portfolios – Key Attributes as of 9/30/25
Loan Portfolios – Key Attributes as of 9/30/25 Consumer CRE and C&I • Auto loans sourced through a network of >500 dealers in NY • CRE concentration ratio of ~135% of risk-based capital and VT with customers extending beyond those states • CRE excludes owner-occupied real estate loans • Loans are un
Slide 18: Deposits/Funding Sources
Deposits/Funding Sources -• •RRO~ I Corporation F1nanc1a
Slide 19: Deposit Balances – Excl. Brokered CDs
Deposit Balances – Excl. Brokered CDs Dollars in billions Non-Municipal Municipal Business $3.50 $3.51 $3.56 $3.67 $3.63 $3.80 48.7% 49.5% 49.3% 48.4% 49.0% 46.8% 24.3% 23.3% 22.7% 25.2% 23.6% 25.3% 27.0% 27.2% 28.0% 26.4% 27.4% 27.9% 2022 2023 2024 1Q 2025 2Q 2025 3Q 2025 1Q and 3Q 2025 deposit bal
Slide 20: Deposit Balances – Excl. Brokered CDs
Deposit Balances – Excl. Brokered CDs Dollars in billions Time Deposits Savings Deposits Interest-Bearing Checking Noninterest-Bearing $3.50 $3.51 $3.56 $3.67 $3.63 $3.80 6.0% 13.9% 14.7% 14.0% 14.4% 13.8% 41.6% 41.8% 41.8% 40.9% 40.2% 42.7% 28.5% 22.8% 22.8% 25.2% 24.4% 25.7% 23.9% 21.5% 20.3% 20.3
Slide 21: Funding Sources and 3Q 2025 Exit Rates
Funding Sources and 3Q 2025 Exit Rates Dollars in millions Consumer Business Municipal Total Balance Rate Balance Rate Balance Rate Balance Rate Demand (Non-Interest Bearing) $ 294 0.00% $ 453 0.00% $ 24 0.00% $ 771 0.00% Interest Bearing Checking 310 0.09% 297 2.90% 370 0.34% 978 1.04% Savings and
Slide 22: Retail Deposit Analysis
Retail Deposit Analysis 3Q vs 2Q Dollars in millions 3Q 2025 2Q 2025 Variance Balance Exit Rate Balance Exit Rate Balance Exit Rate Demand (Non-Interest Bearing) $771 0.00% $736 0.00% $35 0.00% Interest Bearing Checking $978 1.04% $884 1.10% $94 -0.06% Savings and Money Market $1,526 2.38% $1,485 2.
Slide 23: Credit Quality
Credit Quality -• •RRO~ I Corporation F1nanc1a
Slide 24: Credit Quality
Credit Quality Dollars in millions Non-Performing Loans (NPL) / Gross Loans 0.66% 0.64% 0.66% 0.62% 0.56% 0.19% 0.18% 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 $21.4 $21.1 $21.9 $21.0 $19.0 $6.4 $6.3 YTD Annualized charge-offs were 23bps YTD charge-offs are 8bps excluding the 1Q25 credit event1 3Q25
Slide 25: Delinquent Loan Trends
Delinquent Loan Trends Delinquent Loans to Total Loans – Excl. $15M CRE Loan Participation 0.76% 0.68% 0.63% 0.62% 0.61% 0.60% 0.60% 0.57%0.58% 0.56% 0.58% 0.53% 0.51% 0.45% 0.43% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 Delinquency trends remain benign – Q4 histori
Slide 26: Allowance for Credit Losses
Allowance for Credit Losses YTD 2025 Allowance for Credit Loss Walk Dollars in thousands Provision for Credit Losses $6.4M $578 $34,176 $33,598 $5,850 ($5,850) 4Q 2024 Net Charge-Offs Net Charge-Offs Loan Growth & 3Q 2025 Model Calculation In 2Q25, new Loss Drivers implemented for CECL model - res
Slide 27: Investments
Investments -• •RRO~ I Corporation F1nanc1a
Slide 28: Investment Portfolio – AFS and HTM
Investment Portfolio – AFS and HTM Dollars in thousands September 30, 2025 Wtd Avg Expected Current Book Unrealized Category Market Value Book Yield Remaining Life Duration Run-Off by Value Gain / (Loss)1 1 EOY US Treasuries $ 98,278 $ 100,346 $ 2,068 4.48% 3.26 2.96 $ 25,000 US Agencies 25,000 24,7
Slide 29: Capital Actions and Ownership
Capital Actions and Ownership -• •RRO~ I Corporation F1nanc1a
Slide 30: Capital & Ownership
Capital & Ownership • Declared 4Q25 Dividend of $0.29 per share; 48th consecutive quarter of dividends • YTD 2025 Share Repurchase Activity YTD, ~$9.9M of stock repurchases o ~377.5K shares at an average price of $26.32 3Q25, ~$1.4M of stock repurchases o ~52.9K shares at an average price of $26
Slide 31: Fully Diluted Tangible Book Value (TBV)
Fully Diluted Tangible Book Value (TBV ) 1 2025 TBV / Share Walk $1.81 $0.62 $23.85 ($0.13) ($0.85) $22.40 4Q 2024 Net Income Dividends AOCI Stock Repurchases 3Q 2025 TBV growth driven by strong earnings and improved AOCI marks 3Q25 TBV growth of 2.7% YTD TBV growth of 6.5%; 8.6% annualized 1Non
Slide 32: Capital Position
Capital Position Capital Ratios – Arrow Financial Corporation1 2 Tangible Common Equity 8.72% 8.60% 8.00% Total Risk-Based Capital 14.51% 14.86% 6.00% Tier 1 Risk-Based Capital 13.37% 13.71% 4.50% Common Equity Tier 1 Capital 12.73% 13.07% 4.00% Tier 1 Leverage Ratio 9.64% 9.66% 0% 1% 2% 3% 4% 5% 6%
Slide 33: Capital Position
Capital Position Capital Ratios – Arrow Bank1 8.00% Total Risk-Based Capital 14.07% 14.31% 6.00% Tier 1 Risk-Based Capital 12.93% 13.16% 4.50% Common Equity Tier 1 Capital 12.93% 13.16% 4.00% Tier 1 Leverage Ratio 9.26% 9.24% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% Minimum Regulato
Slide 34: Overview and History
Overview and History -• •RRO~ I Corporation F1nanc1a
Slide 35: Financial Snapshot
Financial Snapshot Dollars in thousands, except per share amounts 2019 2020 2021 2022 2023 2024 YTD 2025 Total assets $3,184,275 $3,688,636 $4,027,952 $3,969,509 $4,169,868 $4,306,348 $4,587,115 Loans $2,386,120 $2,595,030 $2,667,941 $2,983,207 $3,212,908 $3,394,541 $3,442,009 Loan-to-deposit ratio
Slide 36: Our Profile
Our Profile • Bank holding company • Arrow Bank National Association • Upstate Agency, LLC • Wealth Management Services • $4.6 billion in assets • ~600 employees • Primary service area population of more than 1.1 million 38 Bank Branches 9 Insurance Offices 36
Slide 37: Our History
Our History 1851 Glens Falls Bank opened for business in a newly constructed building on Ridge Street 1932 Changed name to Glens Falls National Bank and Trust Company 1949 Broke ground at 250 Glen Street — our current headquarters 1981 Glens Falls National Bank went public on NASDAQ as GFAL 1983 For
Slide 38: Our History
Our History 1988 Formed Saratoga National Bank and Trust Company and expanded footprint 1999 Surpassed $1 billion in assets 2001 Added to the Russell 2000 Index 2004 Bought first insurance agency 2012 Reached $2 billion in assets 2018 Consolidated our insurance business into the Upstate Agency brand
Slide 39: President and Chief Executive Officer
President and Chief Executive Officer David S. DeMarco, President and CEO Mr. DeMarco joined the Company in 1987 as a commercial lender and since that time has served in positions of increasing responsibility within the organization. In 2012, he was named President and CEO of Saratoga National Bank,
Slide 40: Experienced Leadership Team
Experienced Leadership Team Penko Ivanov, Andrew J. Wise, Marc Yrsha, Senior Executive Vice President, Senior Executive Vice President, Senior Executive Vice President, Chief Financial Officer, Treasurer and Chief Risk Officer Chief Banking Officer Chief Accounting Officer Mr. Ivanov joined the Comp
Slide 41: Experienced Leadership Team
Experienced Leadership Team Michael Jacobs, Brooke Pancoe, Executive Vice President, Executive Vice President, Chief Information Officer Chief Human Resources Officer Mr. Jacobs joined the Company in 2003 Ms. Pancoe joined the Company in 2018 as Information Systems Manager. He as Director of Human R
Slide 42: Appendix
Appendix -• •RRO~ I Corporation F1nanc1a
Slide 43: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Net Interest Margin is the ratio of 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
Slide 44: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Tangible Book Value, Tangible Equity, and Return on Tangible Equity exclude goodwill and other intangible assets, net from total equity. These are non-GAAP financial measures, which Arrow believes provide investors with information that is useful in unde
Slide 45: Thank you!
Thank you! -• •RRO~ I Corporation F1nanc1a