Arrow Financial Corporation · NASDAQ:AROW
Arrow Financial — Q4 2025 Earnings Presentation
48 slides from Arrow Financial's earnings presentation, Jan 29, 2026
Slide 1: 4Q 2025 Investor Presentation
4Q 2025 Investor Presentation January 29, 2026
Slide 2: Safe Harbor
2 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
Slide 3: Table of Contents
3 Table of Contents • 4Q25 and FY2025 Results and Performance Metrics • Non-Interest Income/Expense • Loans • Deposits/Funding Sources • Credit Quality • Investments • Capital Actions and Ownership • Overview and History
Slide 4: Results
Results - =\RROW Financial Corporation
Slide 5: 4Q25 Summary
5 4Q25 Summary Financial information provided in this document is unaudited. Return on Average Assets 1.24% Earnings Per Share $0.85 Record FTE NIM 3.25% vs 3.24% (3Q) Return on Average Equity 13.08% Tangible Book Value per Share $24.71 Net Charge-Offs 0.08% NPLs $8.5M; 0.24% of Total Loans Strong f
Slide 6: FY2025 Summary
6 FY2025 Summary Financial information provided in this document is unaudited. Return on Average Assets 1.00% Earnings Per Share $2.65 Record FTE NIM 3.19% 2025 Return on Average Equity 10.66% TBV/Share $24.71; +10.3% YoY Net Charge-Offs 0.19% NPLs $8.5M; 0.24% of Total Loans 2025 saw strong growth
Slide 7: 4Q25 and FY2025 Review Highlights
7 4Q25 and FY2025 Review Highlights Record 4Q25 Net Income of $14.0 million, or $0.85 EPS 2025 Net Income of $44.0 million, or $2.65 EPS 4Q25 and 2025 EPS driven by NIM expansion (loan & deposit repricing), loan growth 4Q25 included no unification-related expenses – project completed 2025
Slide 8: 2025 Reported Results & Key Metrics
8 4Q 2025 FY 2025 EPS $0.85 $2.65 FTE Net Interest Margin 3.25% 3.19% Profitability Net Revenue $43.4 million $165.6 million Return on Average Assets (ROA) 1.24% 1.00% Return on Average Equity (ROE) 13.08% 10.66% $3.5 billion of gross loans 87.65% loan-to-deposit ratio Balance Sheet $3.9 billion of
Slide 9: Net Interest Margin
9 Net Interest Margin 1 1Yield includes the impact of deferred fees and amortization of loan origination costs 2FTE has historically been 1-2 bps higher than NIM reported under GAAP 2.62% 2.69% 2.79% 2.85% 3.08% 3.16% 3.24% 3.25% 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 All NIM presented on a fully t
Slide 10: 4Q 2025 Consolidated Financial Statements
10 4Q 2025 Consolidated Financial Statements 1 Variances are rounded based on actual whole-dollar amounts UNAUDITED Dollars in millions, except per share data Linked Quarter and Comparative Year Income Statement 4Q25 3Q25 Fav/(Unfav) Var1 Total Interest Income $ 54.6 $ 53.6 1.0 Total Interest Expens
Slide 11: 4Q 2025 Consolidated Financial Statements
11 4Q 2025 Consolidated Financial Statements 1 Variances rounded based on actual whole-dollar amounts UNAUDITED Dollars in millions, except per share data Linked Quarter and Prior Year Period Balance Sheet 4Q25 3Q25 4Q24 4Q25 vs 3Q251 4Q25 vs 4Q241 Cash & Cash Equivalents $ 214.2 $ 397.4 $ 154.5 (18
Slide 12: Non-Interest Income/Expense
Non-Interest Income/Expense
Slide 13: 4Q 2025 Non-Interest Income
13 4Q 2025 Non-Interest Income • Wealth Management assets under management (AUM) increased by ~$45 million in 4Q25 • Primarily driven by net account activity (new business less closed accounts) • 4Q25 Other Income negatively impacted from valuation adjustment to an equity position • 4Q24 included a
Slide 14: 2025 Non-Interest Income
14 2025 Non-Interest Income • Wealth Management assets under management (AUM) increased by ~$152 million • Net account activity – new business less closed accounts – increased AUM by ~$75 million • Market performance increased AUM by ~$77 million • Insurance revenue up year-over-year • 100% retentio
Slide 15: 4Q 2025 Non-Interest Expense
15 4Q 2025 Non-Interest Expense • 4Q25 included no unification-related expenses – project completed • Contributions/Donations increase quarter-over-quarter due to seasonality of “giving campaigns” • Management continues to focus on expense discipline to generate operating leverage Dollars in thousan
Slide 16: 2025 Non-Interest Expense
16 2025 Non-Interest Expense • 2025 expenses included $2.3 million related to unification, primarily comprised of project management (legal & professional) and information technology costs related to the July 2025 system conversion and operational merger Dollars in thousands December 31, 2025 Decemb
Slide 17: Operating Expenses — Efficiency Trends
17 Operating Expenses — Efficiency Trends 68.8% 67.7% 66.5% 63.4% 59.6% 59.0% 2023 2024 1Q 2025 2Q 2025 3Q 2025 4Q 2025 Operating efficiency trends on the right track Generating positive core operating leverage Ongoing expense reviews/initiatives Non-core items in rear-view mirror (unificati
Slide 18: Loans
Loans - =\RROW Financial Corporation
Slide 19: Loans
19 Commercial (C&I)1 11.4% Commercial Real Estate (CRE) 17.1% Consumer 31.2% Residential Real Estate (RRE) 40.3% Loans • Portfolio exit rates2 increased 16bps from 4Q24 • Average origination rate exceeded portfolio exit rate in 4Q25 • YTD loan growth ~$73M, or 2.1%, excluding $15M reduction due to 1
Slide 20: Loan Portfolios – Key Attributes as of 12/31/25
20 Loan Portfolios – Key Attributes as of 12/31/25 • Auto loans sourced through a network of >510 dealers in NY and VT with customers extending beyond those states • Loans are underwritten/credit scored by Arrow • >75% of auto loan balances have FICO scores >700 • Less than 4% have FICO scores <620
Slide 21: Deposits/Funding Sources
Deposits/Funding Sources - =\RROW Financial Corporation
Slide 22: Deposit Balances – Excl. Brokered CDs
22 Deposit Balances – Excl. Brokered CDs 27.0% 27.2% 28.0% 26.4% 27.4% 27.9% 29.2% 24.3% 23.3% 22.7% 25.2% 23.6% 25.3% 21.6% 48.7% 49.5% 49.3% 48.4% 49.0% 46.8% 49.2% 4Q 2022 4Q 2023 4Q 2024 1Q 2025 2Q 2025 3Q 2025 4Q 2025 Non-Municipal Municipal Business Dollars in billions $3.50 $3.51 $3.56 $3.67
Slide 23: Deposit Balances – Excl. Brokered CDs
23 Deposit Balances – Excl. Brokered CDs 23.9% 21.5% 19.8% 19.0% 20.3% 20.3% 19.8% 28.5% 22.8% 22.8% 25.2% 24.4% 25.7% 23.7% 41.6% 41.8% 42.7% 41.8% 40.9% 40.2% 42.8% 6.0% 13.9% 14.7% 14.0% 14.4% 13.8% 13.7% 4Q 2022 4Q 2023 4Q 2024 1Q 2025 2Q 2025 3Q 2025 4Q 2025 Deposit Balances Time Deposits Savin
Slide 24: 4Q 2025 Funding Sources and Exit Rates
24 4Q 2025 Funding Sources and Exit Rates • Retail deposit rates decreased by 8bps from 1.68% to 1.60% in 4Q25 • Rate cuts implemented in early November and December across all products • Continued strong pricing discipline Dollars in millions Balance Rate Balance Rate Balance Rate Balance Rate Dema
Slide 25: Retail Deposit Analysis
25 Retail Deposit Analysis • Disciplined pricing continues to favorably impact retail deposit (exit) rates • Growth in Demand Deposit balances benefitting from new commercial account wins 4Q vs 3Q Dollars in millions Balance Exit Rate Balance Exit Rate Balance Exit Rate Demand (Non-Interest Bearing)
Slide 26: Credit Quality
Credit Quality - =\RROW Financial Corporation
Slide 27: Credit Quality
27 Credit Quality 0.66% 0.64% 0.66% 0.62% 0.56% 0.19% 0.18% 0.24% 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 Non-Performing Loans (NPL) / Gross Loans Dollars in millions 2025 annualized charge-offs were 19bps 4Q25 annualized charge-offs were 8bps Allowance for credit losses to loans is 0.99% Al
Slide 28: Delinquent Loan Trends
28 Delinquent Loan Trends 0.43% 0.45% 0.51% 0.68% 0.57%0.58% 0.62% 0.76% 0.56% 0.61% 0.60% 0.60% 0.53% 0.58% 0.69% 0.84% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 Delinquent Loans to Total Loans – Excl. $15M CRE Loan Participation Seasonal (4Q) fluctuation D
Slide 29: Allowance for Credit Losses
29 Allowance for Credit Losses $33,598 ($6,550) $6,550 $724 $34,322 4Q 2024 Net Charge-Offs Net Charge-Offs Loan Growth & Model Calculation 4Q 2025 2025 Allowance for Credit Loss Walk Provision for Credit Losses $7.3M In 2Q25, new Loss Drivers implemented for CECL model – resulting in > $2 million
Slide 30: Investments
Investments - =\RROW Financial Corporation
Slide 31: Investment Portfolio – AFS and HTM
31 • During 4Q25 book yield increased 9bps to 3.38% while duration is 3.33 years • 2025 sub-debt purchases total $22.5M with a yield of 6.87% • Overall unrealized losses ~3% of investment portfolio value Investment Portfolio – AFS and HTM 1 1 Unrealized Gain/(Loss) on HTM for informational purposes
Slide 32: Capital Actions and Ownership
Capital Actions and Ownership
Slide 33: Capital & Ownership
33 Capital & Ownership • Declared 1Q26 Dividend of $0.30 per share; 49th consecutive quarter of dividends • 2025 Share Repurchase Activity • ~$9.9M of stock repurchases • ~377.5K shares at an average price of $26.32 • $5.1 million remaining under current repurchase authorization • Stock Ownership as
Slide 34: 2025 TBV / Share Walk
34 $22.40 $2.65 ($1.14) ($0.07) $0.87 $24.71 4Q 2024 Net Income Dividends AOCI Stock Repurchases 4Q 2025 2025 TBV / Share Walk Fully Diluted Tangible Book Value (TBV) TBV growth driven by strong earnings and improved AOCI marks
Slide 35: Capital Position
35 Capital Position 9.68% 13.10% 13.74% 14.86% 9.19% 9.66% 13.07% 13.71% 14.86% 8.60% 4.00% 4.50% 6.00% 8.00% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% Tier 1 Leverage Ratio Common Equity Tier 1 Capital Tier 1 Risk-Based Capital Total Risk-Based Capital Tangible Common Equity Capital
Slide 36: Capital Position – Arrow Bank
36 Capital Position 9.26% 13.23% 13.24% 14.37% 9.24% 13.16% 13.16% 14.31% 4.00% 4.50% 6.00% 8.00% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% Tier 1 Leverage Ratio Common Equity Tier 1 Capital Tier 1 Risk-Based Capital Total Risk-Based Capital Capital Ratios – Arrow Bank1 Minimum Regul
Slide 37: Overview and History
Overview and History - =\RROW Financial Corporation
Slide 38: Financial Snapshot
38 Financial Snapshot 2019 2020 2021 2022 2023 2024 2025 Total assets $3,184,275 $3,688,636 $4,027,952 $3,969,509 $4,169,868 $4,306,348 $4,445,862 Loans $2,386,120 $2,595,030 $2,667,941 $2,983,207 $3,212,908 $3,394,541 $3,453,093 Loan-to-deposit ratio 91.2% 80.2% 75.1% 85.3% 87.1% 88.7% 87.7% ROA 1.
Slide 39: Our Profile
39 Our Profile • Bank holding company • Arrow Bank National Association • Upstate Agency, LLC • Wealth Management Services • $4.4 billion in assets • ~600 employees • Primary service area population of more than 1.1 million Insurance Offices Bank Branches 938
Slide 40: Our History
40 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
Slide 41: Our History
41 Our History 1988 Formed Saratoga National Bank and Trust Company 1999 Surpassed $1 billion in assets 2004 Bought first insurance agency 2001 Added to the Russell 2000 Index 2021 Topped $4 billion in assets 2018 Consolidated our insurance business into the Upstate Agency brand 2012 Reached $2 bill
Slide 42: President and Chief Executive Officer
42 President and Chief Executive Officer 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, now named Arrow Bank. In May 202
Slide 43: Experienced Leadership Team
43 Experienced Leadership Team Mr. Ivanov joined the Company in 2023 with more than 30 years of experience in Financial Planning & Analysis, Controllership, SOX, Financial Reporting and Treasury. Mr. Ivanov previously served as CFO for Bankwell Financial Group, helping it almost double in size over
Slide 44: Experienced Leadership Team
44 Experienced Leadership Team Ms. Pancoe joined the Company in 2018 as Director of Human Resources. In her current role as Chief Human Resources Officer, she has executive oversight of the Company’s human resource strategies, which includes organizational design and succession planning, talent acqu
Slide 45: Appendix
Appendix - =\RROW Financial Corporation
Slide 46: Reconciliation of Non-GAAP Financial Measures
46 Reconciliation of Non-GAAP Financial Measures Three months ended December 31, 2025 Year ended December 31, 2025 Non-Interest Expense $ 25,804 $ 102,934 Less: Intangible Asset Amortization 74 311 Net Non-Interest Expense $ 25,730 $ 102,623 Net Interest Income, Tax-Equivalent $ 35,255 $ 133,700 Non
Slide 47: Reconciliation of Non-GAAP Financial Measures
47 Reconciliation of Non-GAAP Financial Measures December 31, 2025 Total Stockholders' Equity (GAAP) $ 431,852 Less: Goodwill and Other Intangible assets, net 25,530 Tangible Equity (Non-GAAP) $ 406,322 Total Assets (GAAP) $ 4,445,862 Less: Goodwill and Other Intangible assets, net 25,530 Tangible A
Slide 48: Thank you!
Thank you! - =\RROW Financial Corporation