Arrow Financial Corporation · NASDAQ:AROW
Arrow Financial — Q1 2026 Earnings Presentation
51 slides from Arrow Financial's earnings presentation, Apr 30, 2026
Slide 1: 1Q 2026 Investor Presentation
—=\RROW Financial Corporation 1Q 2026 INVESTOR PRESENTATION April 30, 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 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 any non-GAAP measures. • Tangible Book Value per Share (TBV/Share) • Full Tax
Slide 4: Table of Contents
• 1Q26 Results and Performance Metrics • Non-Interest Income/Expense • Loans • Deposits/Funding Sources • Credit Quality • Investments • Capital Actions and Ownership • Overview and History 4 Table of Contents
Slide 5: Results
—=\RROW Financial Corporation RESULTS
Slide 6: 1Q26 Summary
1Q26 Summary 6 EPS of $0.82 $0.85 excl. MRE(1) ROAA of 1.23% 1.29% excl. MRE FTE NIM 3.48% vs 3.25% (4Q25) TBV of $25.09 Net Charge-Offs 0.10% ROAE of 12.46% 13.03% excl. MRE NPLs $4.4M; 0.13% of Total Loans TCE of 9.22% Financial information provided in this document is unaudited. (1) MRE represent
Slide 7: 1Q26 Highlights
1Q26 Highlights 1Q26 Net Income of $13.5 million, or $0.82 EPS • 1Q26 EPS driven by NIM expansion (loan & deposit repricing, reinvestment rate on AFS securities) • 1Q26 included ~$800k for pre-tax MRE; lowering EPS by $0.03 • 1Q26 ETR of 22.5%; Expecting lower ETR for full year 2026 as tax plannin
Slide 8: 2026 Reported Results and Key Metrics
2026 Reported Results and Key Metrics 8 1Q 2026 EPS $0.82 FTE Net Interest Margin 3.48% Profitability Net Revenue $44.8 million Return on Average Assets (ROA) 1.23% Return on Average Equity (ROE) 12.46% $3.4 billion of gross loans 85.68% loan-to-deposit ratio Balance Sheet $4.0 billion of deposits 6
Slide 9: Net Interest Margin
Net Interest Margin 9 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 3.08% 3.16% 3.24% 3.25% 3.48% 1Q25 2Q25 3Q25 4Q25 1Q26 3.08% 3.16% 3.24% 3.25% 3.48% 5.30% 5.36% 5.43% 5.45% 5.55% 1.9
Slide 10: 1Q 2026 Consolidated Financial Statements: Income Statement
1Q 2026 Consolidated Financial Statements 101 Variances are rounded based on actual whole-dollar amounts UNAUDITED Dollars in millions, except per share data Linked Quarter Income Statement 1Q26 4Q25 Fav/(Unfav) Var1 Total Interest Income $53.8 $54.6 (0.8) Total Interest Expense 17.7 19.5 1.8 Net In
Slide 11: 1Q 2026 Consolidated Financial Statements: Balance Sheet
1Q 2026 Consolidated Financial Statements 111 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, except per share data Balance Sheet 1Q26 4Q25 1Q25 1Q26 vs 4Q251 1
Slide 12: Non-Interest Income/Expense
NON-INTEREST INCOME/EXPENSE 12
Slide 13: 1Q 2026 Non-Interest Income
1Q 2026 Non-Interest Income 13 Dollars in thousands • Net new wealth management accounts added ~ $30M in AUM in 1Q26 • Overall market performance negatively impacted AUM by ~ $63M in 1Q26 • Volatility in other operating income primarily from quarterly valuation adjustments to equity position as well
Slide 14: 1Q 2026 Non-Interest Expense
1Q 2026 Non-Interest Expense 14 • Compensation and benefits cost reflect increased benefits costs as well as competitive labor market • Occupancy expenses impacted by increases in utility and building maintenance costs • 4Q25 Contributions elevated due to seasonal giving campaigns • Management conti
Slide 15: Operating Expenses – Efficiency Trends
Operating Expenses – Efficiency Trends 15 67.7% 66.5% 63.4% 59.6% 59.0% 59.9% 2024 1Q 2025 2Q 2025 3Q 2025 4Q 2025 1Q 2026 • Generating positive core operating leverage • Ongoing expense reviews/initiatives • Excluding MRE 1Q26 Efficiency Ratio would be 58.1% 62.0%
Slide 16: Loans
—=\RROW Financial Corporation LOANS
Slide 17: Loan Portfolio
Commercial (C&I)1 11.5% Commercial Real Estate (CRE) 17.1% Consumer 31.2% Residential Real Estate (RRE) 40.2%3 Loans 17 Loan Portfolio ~ $3.44 billion As of March 31, 2026 • Portfolio exit rates2 flat to 4Q25 due to the repricing of variable rate loans • Average origination rate exceeded portfolio e
Slide 18: Loans – Monthly Activity
Loans – Monthly Activity 18 • Loans decreased by $14 million during 1Q26 due to an unusually harsh winter impacting both auto and residential activity • Month to date, as of April 24, 2026, loans grew $13 million, offsetting slow start to the year Dollars in millions CRE excludes owner-occupied real
Slide 19: Loan Portfolios – Key Attributes
Loan Portfolios – Key Attributes 19 As of March 31, 2026 Consumer Residential Real Estate CRE & C&I • Auto loans sourced through a network of >510 dealers in NY and VT • Loans are underwritten/credit scored by Arrow • >75% of auto loan balances have FICO scores >700 • Less than 4% have FICO scores <
Slide 20: Deposits/Funding Sources
DEPOSITS/FUNDING SOURCES 20
Slide 21: Deposit Balances – Excl. Brokered CDs
Deposit Balances – Excl. Brokered CDs 21 Deposit mix improving against comparable prior periods Dollars in billions $3.51 $3.56 $3.64 25.2% 26.4% 28.1% 26.5% 25.2% 24.7% 48.3% 48.4% 47.2% 1Q 2024 1Q 2025 1Q 2026 $3.60 $3.67 $3.71
Slide 22: Deposit Balances – Excl. Brokered CDs
Deposit Balances – Excl. Brokered CDs 22 21.5% 19.8% 19.8% 22.8% 22.8% 23.7% 41.8% 42.7% 42.8% 13.9% 14.7% 13.7% 2023 2024 2025 Time Deposits Savings Deposits Interest-Bearing Checking Noninterest-Bearing 19.3% 19.0% 19.4% 25.2% 25.2% 24.2% 41.5% 41.8% 43.6% 13.9% 14.0% 12.8% 1Q 2024 1Q 2025 1Q 2026
Slide 23: Retail Deposit Cost Trend
Retail Deposit Cost Trend 23 ~ $155M of CDs maturing/repricing through 2Q26, further lowering cost of retail deposits 1.94% 2.01% 2.01% 1.98% 1.81% 1.79% 1.79% 1.73% 1.62% 1.98% 1.98% 1.97% 1.92% 1.80% 1.77% 1.68% 1.60% 1.60% 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 Quarterly Cost of Retail Depo
Slide 24: 1Q 2026 Funding Sources and Exit Rates
1Q 2026 Funding Sources and Exit Rates 24 As of March 31, 2026Dollars in millions • Consumer deposits down 6bps from 4Q25; Business deposits down 4 bps from 4Q25 • Municipal deposits up 5bps from 4Q25 resulting from temporary/seasonal surge at end of 1Q26 • Overall exit rates on retail deposits on t
Slide 25: Retail Deposit Analysis
Retail Deposit Analysis 25 • Disciplined pricing continues to favorably impact retail deposit (exit) rates • March exit rates impacted by seasonal surge in municipal deposits • Exit rates should continue to decline in 2Q26 Dollars in millions Balance Exit Rate Balance Exit Rate Balance Exit Rate Dem
Slide 26: Credit Quality
—=\RROW Financia | Corporation CREDIT QUALITY
Slide 27: Credit Quality
Credit Quality 27 Dollars in millions 0.56% 0.19% 0.18% 0.25% 0.13% 1Q25 2Q25 3Q25 4Q25 1Q26 Non-Performing Loans (NPL) / Gross Loans $19.0 $6.4 $6.3 $8.5 $4.4 • 1Q26 annualized charge-offs were 10bps • Allowance for credit losses to loans is 0.99% • Allowance to NPL coverage of 770%
Slide 28: Delinquent Loan Trends
Delinquent Loan Trends 28 0.57% 0.58% 0.62% 0.76% 0.56% 0.61% 0.60% 0.60% 0.53% 0.58% 0.69% 0.84% 0.73% 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 Delinquent Loans to Total Loans • Seasonal (4Q) fluctuation • Delinquency in 4Q25 impacted by one commercial loan, $2.6 million or
Slide 29: Allowance for Credit Losses
Allowance for Credit Losses 29 $34,322 ($815) $815 ($267) $34,055 4Q 2025 Net Charge-Offs Net Charge-Offs Loan Growth & Model Calculation 1Q 2026 Provision for Credit Losses $548K Dollars in thousands 2026 Allowance for Credit Loss Walk • Low charge-offs in 1Q26 • Decrease in loan balances contribut
Slide 30: Investments
—=\RROW Financial Corporation INVESTMENTS
Slide 31: Investment Portfolio – AFS and HTM
Investment Portfolio – AFS and HTM 31 1 Unrealized Gain/(Loss) on HTM for informational purposes only – not reflected in OCI • During 1Q26 book yield increased 9bps to 3.47% while duration decreased to 3.12 years • Overall unrealized losses ~3% of investment portfolio value
Slide 32: Capital Actions and Ownership
CAPITAL ACTIONS AND OWNERSHIP 32
Slide 33: Capital & Ownership
Capital & Ownership • Declared 2Q26 Dividend of $0.30 per share; 50th consecutive quarter of dividends • Stock Ownership as of April 6, 2026 • Approximately 16.5M shares outstanding: • Management – Approximately 0.7% • Directors – Approximately 1.5% • Employees – Approximately 5.4% a) Employee Stock
Slide 34: Fully Diluted Tangible Book Value (TBV)
Fully Diluted Tangible Book Value (TBV) 34 $24.71 $0.82 ($0.30) ($0.14) $25.09 4Q 2025 Net Income Dividends AOCI 1Q 2026 2026 TBV / Share Walk TBV growth driven by strong earnings • Partially offset by 1Q26 AOCI marks from rise in rates triggered by current global events • Excluding MRE, TBV of $25.
Slide 35: Capital Position – Arrow Financial Corporation
Capital Position 35 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 10.02% 13.30% 13.93% 15.04% 9.22% 9.68% 13.01% 13.64% 14.76% 9.19% 4.00% 4.50% 6.00% 8.00% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9
Slide 36: Capital Position – Arrow Bank
Capital Position 36 1 Regulatory capital ratios are estimated, subject to finalization as part of the current quarter Call Report Strong Regulatory Capital Ratios 9.62% 13.41% 13.41% 14.53% 9.26% 13.14% 13.14% 14.27% 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% T
Slide 37: M&A
—=\RROW Financial Corporation M&A 37
Slide 38: Mergers and Acquisitions
Mergers and Acquisitions • On February 26, 2026, Arrow announced the acquisition of Adirondack Bancorp, Inc. • Market expansion with high quality, low-cost deposit franchise (~$950 million balance sheet) • Combined pro-forma assets of $5.4 billion, deposits of $4.8 billion and loans of $4.1 billion
Slide 39: Overview and History
—=\RROW Financia | Corporation OVERVIEW AND HISTORY
Slide 40: Financial Snapshot
Financial Snapshot 40 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 $4,522,019 Loans $2,595,030 $2,667,941 $2,983,207 $3,212,908 $
Slide 41: Our Profile
Our Profile • Bank holding company • Arrow Bank National Association • Upstate Agency, LLC • Wealth Management Services • $4.5 billion in assets • ~575 employees • Primary service area population of more than 1.1 million 41 Insurance Offices Bank Branches 938
Slide 42: Our History
Our History 42 Glens Falls Bank opened for business in a newly constructed building on Ridge Street 1851 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 43: Our History
Our History 43 Bought first insurance agency 2004 Reached $2 billion in assets 2012 Consolidated our insurance business into the Upstate Agency brand 2018 2021 Topped $4 billion in assets 2024 Unified banking subsidiaries to form Arrow Bank, NA 2026 Celebrating 175th Anniversary v Announced acquisit
Slide 44: President and Chief Executive Officer
President and Chief Executive Officer 44 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 45: Experienced Leadership Team
Experienced Leadership Team 45 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 46: Leadership Team
46 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 47: Appendix
—=\RROW Financial Corporation APPENDIX
Slide 48: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 48 Three months ended March 31, 2026 Interest Income (GAAP) $ 53,794 Add: Tax-Equivalent adjustment (Non-GAAP) 123 Interest Income - Tax Equivalent (Non-GAAP) $ 53,917 Net Interest Income (GAAP) $ 36,130 Add: Tax-Equivalent adjustment (Non-GAAP) 123 Net
Slide 49: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 49 Three months ended March 31, 2026 Non-Interest Expense $ 26,865 Less: Intangible Asset Amortization 72 Net Non-Interest Expense $ 26,793 Net Interest Income, Tax-Equivalent $ 36,253 Non-Interest Income 8,628 Less: Net Gain (Loss) on Securities 145 Net
Slide 50: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 50 March 31, 2026 Total Stockholders' Equity (GAAP) $ 440,143 Less: Goodwill and Other Intangible assets, net 25,481 Tangible Equity (Non-GAAP) $ 414,662 Total Assets (GAAP) $ 4,522,019 Less: Goodwill and Other Intangible assets, net 25,481 Tangible Asse
Slide 51: Thank You!
—=\RROW Financial Corporation THANK YOU!