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
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 • 3Q 2025 Results and Performance Metrics • Non-Interest Income/Expense • Loans • Deposits/Funding Sources • Credit Quality • Investments • Capital Actions and Ownership • Overview and History
Slide 4: 3Q 2025 Results
3Q 2025 Results - =\RROW Financial Corporation
Slide 5: 3Q25 Summary
5 3Q25 Summary Return on Average Assets 1.16% Earnings Per Share $0.77 FTE NIM1 3.24% vs. 3.16% in 2Q Return on Average Equity 12.32% Efficiency Ratio1 of 59.6% Tangible Book Value (TBV1) per Share $23.85 Accelerating NIM expansion through Y/E Very low NPLs – majority of which are making payments In
Slide 6: 3Q25 Highlights
6 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) FTE NIM of 3.24% vs. 3.16% for 2Q25; YTD NIM of 3.16%1 ROA of 1.16%
Slide 7: 2025 Reported Results & Key Metrics
7 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 ratio Balance Sheet $4.1 billion in
Slide 8: Net Interest Margin
8 Net Interest Margin 1 1Yield includes the impact of deferred fees and amortization of loan origination costs 2.63% 2.55% 2.55% 2.62% 2.69% 2.79% 2.85% 3.08% 3.16% 3.24% 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 All NIM 2024 and beyond presented on a fully taxable equivalent basis (FTE2) 2.
Slide 9: 3Q 2025 Consolidated Financial Statements
9 3Q 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 YTD Income Statement 3Q25 2Q25 Fav/(Unfav) Var1 Total Interest Income $ 53.6 $ 51.6 2.0 Total Interest Expense
Slide 10: 3Q 2025 Consolidated Financial Statements
10 3Q 2025 Consolidated Financial Statements 1 Variances rounded based on actual whole dollar amounts UNAUDITED Dollars in millions, except per share data Linked Quarter Balance Sheet 3Q25 2Q25 4Q24 3Q25 vs 2Q251 3Q25 vs 4Q241 Cash & Cash Equivalents $ 397.4 $ 268.4 $ 154.5 129.0 242.9 Investment Se
Slide 11: Non-Interest Income/Expense
Non-Interest Income/Expense
Slide 12: 3Q 2025 Non-Interest Income
12 3Q 2025 Non-Interest Income • Wealth Management assets under management (AUM) increased by ~$106 million YTD Net account activity – new business less closed accounts – increased YTD AUM by ~$29 million Market performance increased YTD AUM by ~$77 million • Insurance revenue up YoY 100% rete
Slide 13: 3Q 2025 Non-Interest Expense
13 3Q 2025 Non-Interest Expense • 3Q25 and 2Q25 included Unification expenses of ~$600K and ~$1.1M, respectively • Unification expenses primarily comprised of project management (legal & professional) and information technology costs related to the July 2025 system conversion and operational merger
Slide 14: Operating Expenses — Efficiency Trends
14 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 t
Slide 15: Loans
Loans - =\RROW Financial Corporation
Slide 16: Loans
16 Commercial (C&I)1 11.2% Commercial Real Estate (CRE) 17.3% Consumer 31.7% Residential Real Estate (RRE) 39.8% Loans • 3Q25 loan growth of ~$17M or 2.0% (annualized) • YTD loan growth ~$62M, or 2.4%, excluding $15M reduction due to 1Q credit event3 • MTD Oct 2025 loan growth of $7MM; ahead of 3Q25
Slide 17: Loan Portfolios – Key Attributes as of 9/30/25
17 Loan Portfolios – Key Attributes as of 9/30/25 • Auto loans sourced through a network of >500 dealers in NY and VT with customers extending beyond those states • Loans are underwritten/credit scored by Arrow • >73% of auto loan balances have FICO scores >700 • Less than 5% have FICO scores <620 •
Slide 18: Deposits/Funding Sources
Deposits/Funding Sources - =\RROW Financial Corporation
Slide 19: Deposit Balances – Excl. Brokered CDs
19 Deposit Balances – Excl. Brokered CDs 27.0% 27.2% 28.0% 26.4% 27.4% 27.9% 24.3% 23.3% 22.7% 25.2% 23.6% 25.3% 48.7% 49.5% 49.3% 48.4% 49.0% 46.8% 2022 2023 2024 1Q 2025 2Q 2025 3Q 2025 Non-Municipal Municipal Business Dollars in billions $3.50 $3.51 $3.56 $3.67 $3.63 $3.80 1Q and 3Q 2025 deposit
Slide 20: Deposit Balances – Excl. Brokered CDs
20 Deposit Balances – Excl. Brokered CDs 23.9% 21.5% 19.8% 19.0% 20.3% 20.3% 28.5% 22.8% 22.8% 25.2% 24.4% 25.7% 41.6% 41.8% 42.7% 41.8% 40.9% 40.2% 6.0% 13.9% 14.7% 14.0% 14.4% 13.8% 2022 2023 2024 1Q 2025 2Q 2025 3Q 2025 Time Deposits Savings Deposits Interest-Bearing Checking Noninterest-Bearing
Slide 21: Funding Sources and 3Q 2025 Exit Rates
21 Funding Sources and 3Q 2025 Exit Rates • Continued strong pricing discipline • 6-month CD special repricing to 3.50% APY by the end of October • 14-month CD special repricing to 3.30% APY by the end of October • FRB rate cuts will lead to further deposit rate decreases Dollars in millions Balance
Slide 22: Retail Deposit Analysis
22 Retail Deposit Analysis 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 2.48% $41 -0.10% Time Deposits $525 3.34% $524 3.36%
Slide 23: Credit Quality
Credit Quality - =\RROW Financial Corporation
Slide 24: Credit Quality
24 Credit Quality 0.66% 0.64% 0.66% 0.62% 0.56% 0.19% 0.18% 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 Non-Performing Loans (NPL) / Gross Loans Dollars in millions YTD Annualized charge-offs were 23bps YTD charge-offs are 8bps excluding the 1Q25 credit event1 3Q25 NCO was 10bps Allowance for credit
Slide 25: Delinquent Loan Trends
25 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% 0.63% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 Delinquent Loans to Total Loans – Excl. $15M CRE Loan Participation Delinquency trends remain benign – Q4 hist
Slide 26: Allowance for Credit Losses
26 Allowance for Credit Losses $33,598 ($5,850) $5,850 $578 $34,176 4Q 2024 Net Charge-Offs Net Charge-Offs Loan Growth & Model Calculation 3Q 2025 YTD 2025 Allowance for Credit Loss Walk Provision for Credit Losses $6.4M In 2Q25, new Loss Drivers implemented for CECL model - resulting in > $2 mil
Slide 27: Investments
Investments - =\RROW Financial Corporation
Slide 28: Investment Portfolio – AFS and HTM
28 • During 3Q25 book yield increased 18bps to 3.29% while portfolio duration was 3.29 years • YTD sub-debt purchases total $13.5M with a yield of 7.30% and an avg. remaining life of < 5 years • Overall unrealized losses are ~3.6% of the investment portfolio Investment Portfolio – AFS and HTM 1 1 Un
Slide 29: Capital Actions and Ownership
Capital Actions and Ownership
Slide 30: Capital & Ownership
30 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
Slide 31: 2025 TBV / Share Walk
31 $22.40 $1.81 ($0.85) ($0.13) $0.62 $23.85 4Q 2024 Net Income Dividends AOCI Stock Repurchases 3Q 2025 2025 TBV / Share Walk Fully Diluted Tangible Book Value (TBV1) 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 1No
Slide 32: Capital Position – Arrow Financial Corporation
32 Capital Position 9.66% 13.07% 13.71% 14.86% 8.60% 9.64% 12.73% 13.37% 14.51% 8.72% 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 33: Capital Position – Arrow Bank
33 Capital Position 9.24% 13.16% 13.16% 14.31% 9.26% 12.93% 12.93% 14.07% 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 34: Overview and History
Overview and History - =\RROW Financial Corporation
Slide 35: Financial Snapshot
35 Financial Snapshot 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 91.2% 80.2% 75.1% 85.3% 87.1% 88.7% 84.0% RO
Slide 36: Our Profile
36 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 Insurance Offices Bank Branches 938
Slide 37: Our History
37 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 38: Our History
38 Our History 1988 Formed Saratoga National Bank and Trust Company and expanded footprint 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 bra
Slide 39: President and Chief Executive Officer
39 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 40: Experienced Leadership Team
40 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 41: Experienced Leadership Team
41 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 42: Appendix
Appendix - =\RROW Financial Corporation
Slide 43: Reconciliation of Non-GAAP Financial Measures
43 Reconciliation of Non-GAAP Financial Measures September 30, 2025 YTD September 30, 2025 Interest Income (GAAP) $ 53,598 $ 155,537 Add: Tax-Equivalent adjustment (Non-GAAP) 121 423 Interest Income - Tax Equivalent (Non-GAAP) $ 53,719 $ 155,960 Net Interest Income (GAAP) $ 34,131 $ 98,021 Add: Tax-
Slide 44: Reconciliation of Non-GAAP Financial Measures
44 Reconciliation of Non-GAAP Financial Measures September 30, 2025 Total Stockholders' Equity (GAAP) $ 417,687 Less: Goodwill and Other Intangible assets, net 25,594 Tangible Equity (Non-GAAP) $ 392,093 Total Assets (GAAP) $ 4,587,115 Less: Goodwill and Other Intangible assets, net 25,594 Tangible
Slide 45: Thank you!
Thank you! - =\RROW Financial Corporation