Arrow Financial Corporation · NASDAQ:AROW
Arrow Financial — Q3 2026 Earnings Presentation
46 slides from Arrow Financial's earnings presentation, Oct 29, 2026
Slide 1: 3Q 2026 Investor Presentation
—=\RROW Financia | Corporation 3Q 2026 INVESTOR PRESENTATION October 29, 2026
Slide 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 use of forward
Slide 3: Glossary of Terms and Non-GAAP Measures
This presentation makes use of certain financial terms and non-GAAP measures, described below, commonly accepted and widely used within the banking industry. Please refer to the Appendix to this presentation for a reconciliation of certain non-GAAP measures. • Earnings per Share (EPS) • Tangible Boo
Slide 4: Table of Contents
• M&A (Acquisition of Adirondack Bancorp, Inc., “ADK”) • 3Q26 Results and Performance Metrics • Non-Interest Income/Expense • Loans • Deposits/Funding Sources • Credit Quality & Provision for Credit Losses • Investments • Capital • Company Profile & Management Bios • Appendix 4 Table of Contents
Slide 5: M&A Update
—=\RROW Financial Corporation M&A UPDATE
Slide 6: Acquisition Highlights
Acquisition Highlights Closed Adirondack Bancorp, Inc. acquisition on July 1, 2026 Added ~$600M in loans and ~$900M in deposits Purchase accounting substantially complete • Loan FV Purchase Accounting (Non-Credit) Discount ~$21M, 3.5%; Amortizes over ~4.5 years • Allowance for Credit Loss of $
Slide 7: Acquisition – Arrow/ADK Opening Balance Sheet
Acquisition – Arrow/ADK Opening Balance Sheet 7 1 Variances are rounded based on actual whole-dollar amounts UNAUDITED Dollars in millions Balance Sheet Day 1 July 1, 2026 Cash & Cash Equivalents $238.4 Investment Securities 868.2 Loans Receivable, net 4,041.7 All Other Assets 367.3 Total Assets $5,
Slide 8: 3Q26 & YTD Results
—=\RROW Financia | Corporation 3Q26 & YTD RESULTS
Slide 9: 3Q26 and YTD Highlights
3Q26 and YTD Highlights 3Q26 Net Income of $5.7 million, or $0.31 EPS; YTD $30.1 million or $1.75 EPS • 3Q26 included $15.6M of merger-related expenses; lowering reported EPS by $0.66 • YTD 2026 included $17.4M of merger-related expenses; lowering reported EPS by $0.80 Core EPS of $0.97 for 3Q26
Slide 10: 3Q26 Summary
3Q26 Summary 10 (1) MRE represents merger-related expenses of $15.6M in 3Q26 EPS of $0.31 $0.97 excl. MRE(1) ROAA of 0.42% 1.33% excl. MRE ROAE of 4.26% 13.50% excl. MRE Organic Loan Growth of ~$60M, 6.8% annualized FTE NIM 3.81% TCE of 7.82% TBV of $23.03 Net Charge-Offs 0.21% NPLs $12.5M; 0.30% of
Slide 11: YTD September 2026 Summary
YTD September 2026 Summary 11 (1) MRE represents merger-related expenses of $17.4M YTD 2026 Organic Loan Growth of ~$103M, 4.0% annualized ROAA of 0.85% 1.23% excl. MRE ROAE of 8.54% 12.43% excl. MRE Loan-To-Deposit Ratio of 87.45% Wholesale Funding Ratio of 3.34% Allowance for Credit Loss 0.99% EPS
Slide 12: Net Interest Margin
Net Interest Margin 12 1 Yield includes the impact of deferred fees and amortization of loan origination costs 2 FTE has historically been 1-2 bps higher than NIM reported under GAAP 3.24% 3.25% 3.48% 3.43% 3.81% 3Q25 4Q25 1Q26 2Q26 3Q26 3.24% 3.25% 3.48% 3.43% 3.81% 5.43% 5.45% 5.55% 5.46% 5.69% 1.
Slide 13: Adirondack Bank Acquisition Accounting Impact
Adirondack Bank Acquisition Accounting Impact 13 Net Interest Income Accretion Non-Interest Expense Amortization $ in millions 3Q26 Loans $1.3 Securities AFS 0.7 Asset Accretion 2.0 Time Deposits (0.2) Liability Accretion (0.2) Total Accretion $1.8 $ in millions 3Q26 Core Deposit Intangible $(0.7) T
Slide 14: 3Q 2026 Consolidated Financial Statements
3Q 2026 Consolidated Financial Statements 141 Variances are rounded based on actual whole-dollar amounts 1 Variances are rounded based on actual whole-dollar amounts Linked Quarter and Prior Year Period UNAUDITED Dollars in millions Balance Sheet 3Q26 2Q26 3Q25 3Q26 vs 2Q261 3Q26 vs 3Q251 Cash & Cas
Slide 15: 3Q 2026 Consolidated Financial Statements
3Q 2026 Consolidated Financial Statements 151 Variances are rounded based on actual whole-dollar amounts UNAUDITED Dollars in millions, except per share data Linked Quarter Income Statement 3Q26 2Q26 Fav/(Unfav) Var1 Total Interest Income $68.0 $53.6 $14.4 Total Interest Expense 19.3 17.7 (1.6) Net
Slide 16: YTD 2026 Consolidated Financial Statements
YTD 2026 Consolidated Financial Statements 16 1 Variances are rounded based on actual whole-dollar amounts 2 Non-core expenses include merger-related expenses and unification expenses UNAUDITED Dollars in millions, except per share data YTD Comparative Income Statement YTD 3Q26 YTD 3Q25 Fav/(Unfav)
Slide 17: Non-Interest Income/Expense
NON-INTEREST INCOME/EXPENSE 17
Slide 18: 3Q 2026 Non-Interest Income
3Q 2026 Non-Interest Income 18 Dollars in thousands • Positive variance in fee income driven by acquisition of ADK • Wealth Management revenue up ~$500K or 7%, over same period for prior year • 3Q impacted by market performance, AUM up 7% YoY, but down 1% for 3Q26 • Insurance revenue up ~$600K or 11
Slide 19: 3Q 2026 Non-Interest Expense
3Q 2026 Non-Interest Expense 19 • Majority of 3Q variance to 2Q driven by addition of ADK expenses (non-MRE) • Compensation increase driven by ADK head count (permanent & temporary ~$3M) • Technology & Equipment includes temporary cost of two operating systems and duplicate IT (Network) charges, etc
Slide 20: Loans
—=\RROW Financial Corporation LOANS
Slide 21: Loan Portfolio
Loans 21 Loan Portfolio ~ $4.14 billion As of September 30, 2026 • 3Q26 portfolio exit rates2 up ~2bps from 2Q26 • Average origination rate exceeded portfolio exit rate in 3Q26 • No single relationship represents > ~1.75% of total loans 1 Commercial (C&I) includes owner-occupied real estate loans 2
Slide 22: Deposits/Funding Sources
DEPOSITS/FUNDING SOURCES 22
Slide 23: Deposit Balances – Excl. Brokered CDs
Deposit Balances – Excl. Brokered CDs 23 19.8% 20.1% 23.4% 24.0% 23.7% 23.9% 23.3% 24.3% 42.8% 43.5% 39.8% 38.9% 13.7% 12.5% 13.5% 12.8% 2025 2Q26 Day 1 Combined 3Q26 Time Deposits Savings Deposits Interest-Bearing Checking Noninterest-Bearing 36.4% 19.2% 26.9% 17.5% Day 1 - ADK $3.64 $3.66 $4.58 $4
Slide 24: Deposit Analysis
Deposit Analysis 24 • Addition of ADK deposits has lowered deposit exit rates • Disciplined pricing continues to offset market pressure for higher rates • 3Q26 includes negative impact of seasonal change in municipal deposit mix toward higher- costing deposits Dollars in millions Balance Exit Rate B
Slide 25: Credit Quality & Provision for Credit Losses
CREDIT QUALITY & PROVISION FOR CREDIT LOSSES 25
Slide 26: Credit Quality
Credit Quality 26 Dollars in millions 0.18% 0.24% 0.13% 0.24% 0.30% 3Q25 4Q25 1Q26 2Q26 3Q26 Non-Performing Loans (NPL) / Gross Loans $6.3 $8.5 $4.4 $8.3 $12.5 • YTD 2026 annualized charge-offs were 14bps • Allowance for credit losses to loans is 0.99% • Allowance to NPL coverage of 329% 0.10% 0.05%
Slide 27: Delinquent Loan Trends
Delinquent Loan Trends 27 Delinquent loans are defined as being greater than 30 days and less than 89 days past due and still accruing interest 0.58% 0.62% 0.76% 0.56% 0.61% 0.60% 0.60% 0.53% 0.58% 0.69% 0.84% 0.73% 0.67% 0.59% 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 De
Slide 28: Allowance for Credit Losses
Allowance for Credit Losses 28 $34,322 ($3,711) $3,711 $1,131 $5,678 $41,131 4Q 2025 Net Charge-Offs Net Charge-Offs Loan Growth & Model Calculation Acquisition of ADK* 3Q 2026 Provision for Credit Losses $4.8M Dollars in thousands YTD 2026 Allowance for Credit Loss Walk • Net charge-offs include ~$
Slide 29: Investments
—=\RROW Financial Corporation INVESTMENTS
Slide 30: Investment Portfolio – AFS and HTM
Investment Portfolio – AFS and HTM 301 Unrealized Gain/(Loss) on HTM for informational purposes only – not reflected in OCI Book yield reflects accretion impact Book yield increased 26bps from 2Q Unrealized loss at ~5.6% (incl. HTM) – driven by rising rates/shift in interest rate environment i
Slide 31: Capital
—=\RROW Financial Corporation CAPITAL
Slide 32: Fully Diluted Tangible Book Value (TBV)
Fully Diluted Tangible Book Value (TBV) 32 $25.44 ($0.69) $0.66 ($0.66) $1.55 $0.31 ($0.30) ($3.28) $23.03 2Q 2026 Net Inc. - Reported Dividends AOCI Add. Core Net Inc MRE Equity Raised Acq - GW & Intang 3Q 2026 3Q 2026 TBV / Share Walk TBV Dilution from Acquisition - $2.39 / 9.4%
Slide 33: Capital Position
Capital Position 33 1 Regulatory capital ratios are estimated, subject to finalization as part of the current quarter Call Report 2 Non-GAAP measure. See reconciliation in Appendix 8.93% 11.63% 12.35% 13.46% 7.82% 10.19% 13.21% 13.83% 14.98% 9.44% 4.00% 4.50% 6.00% 8.00% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9
Slide 34: Capital Position
Capital Position 34 1 Regulatory capital ratios are estimated, subject to finalization as part of the current quarter Call Report Maintaining strong regulatory capital ratios post acquisition 8.38% 11.64% 11.64% 12.75% 9.33% 12.71% 12.71% 13.87% 4.00% 4.50% 6.00% 8.00% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9%
Slide 35: Company Profile & Management Bios
COMPANY PROFILE & MANAGEMENT BIOS 35
Slide 36: Our Profile – As of September 30, 2026
Our Profile – As of September 30, 2026 • Expanded footprint from Acquisition • $5.5 billion in assets • Approximately 725 employees • Primary service area population of more than 1.4 million 36 Insurance Offices Bank Branches 956
Slide 37: President and Chief Executive Officer
President and Chief Executive Officer 37 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 2023, h
Slide 38: Experienced Leadership Team
Experienced Leadership Team 38 Penko Ivanov Senior Executive Vice President, Chief Financial Officer, Treasurer and Chief Accounting Officer Andrew J. Wise Senior Executive Vice President, Chief Risk Officer Marc Yrsha Senior Executive Vice President, Chief Banking Officer Mr. Ivanov joined the Comp
Slide 39: Leadership Team
39 Michael Jacobs Executive Vice President, Chief Information Officer Brooke Pancoe Executive Vice President, Chief Human Resources Officer Mr. Jacobs joined the Company in 2003 as Information Systems Manager. He was later promoted to Senior Vice President and then Executive Vice President. As Chief
Slide 40: Appendix
—=\RROW Financial Corporation APPENDIX
Slide 41: Financial Snapshot
Financial Snapshot 41 1 Non-GAAP measure. See reconciliation in Appendix Dollars in thousands, except per share amounts 2020 2021 2022 2023 2024 2025 YTD 2026 Total assets $3,688,636 $4,027,952 $3,969,509 $4,169,868 $4,306,348 $4,445,862 $5,547,054 Loans $2,595,030 $2,667,941 $2,983,207 $3,212,908 $
Slide 42: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 42 Three months ended September 30, 2026 Nine months ended September 30, 2026 Interest Income (GAAP) $ 68,075 $ 175,486 Add: Tax-Equivalent adjustment (Non-GAAP) 148 404 Interest Income - Tax Equivalent (Non-GAAP) $ 68,223 $ 175,890 Net Interest Income (
Slide 43: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 43 Three months ended September 30, 2026 Nine months ended September 30, 2026 Non-Interest Expense $ 51,828 $ 106,157 Less: Intangible Asset Amortization 812 955 Net Non-Interest Expense $ 51,016 $ 105,202 Net Interest Income, Tax-Equivalent $ 48,881 $ 1
Slide 44: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 44 September 30, 2026 Total Stockholders' Equity (GAAP) $ 515,092 Less: Goodwill and Other Intangible assets, net 88,192 Tangible Equity (Non-GAAP) $ 426,900 Total Assets (GAAP) $ 5,547,054 Less: Goodwill and Other Intangible assets, net 88,192 Tangible
Slide 45: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 45 Three months ended September 30, 2026 Net Income $ 5,700 Non-Core Expenses: Merger-Related Expenses 15,609 Less: Tax Benefit (3,247) Net Non-Core Expenses (Non-GAAP) 12,362 Core Net Income (Non-GAAP) $ 18,062 Net Non-Interest Expense $ 51,016 Non-Core
Slide 46: Thank You!
—=\RROW Financial Corporation THANK YOU!