Arrow Reports $10.1 million in Q3 Net Income and Year-Over-Year Loan Growth of 9.9%

-- Total loans grew by $55.3 million in the third quarter of 2019 to a record high.

Published

GLENS FALLS, N.Y., Oct. 22, 2019 /PRNewswire/ -- Arrow Financial Corporation (NasdaqGS® – AROW) announced operating results for the three-month period ended September 30, 2019. Net income for the third quarter of 2019 was $10.1 million, compared to $9.3 million in the third quarter of 2018. Steady loan growth continued in the third quarter of 2019, as total loans grew by $55.3 million from June 30, 2019 to $2.3 billion. Driven primarily by this growth, net interest income increased to $22.3 million in the third quarter of 2019, compared to $21.0 million for the comparable quarter of 2018.

Annualized key profitability ratios remained strong, as measured by a return on average equity of 13.82% and a return on average assets of 1.32% for the third quarter, compared to 13.96% and 1.28%, respectively, a year earlier.

"Arrow delivered another strong quarter, demonstrated by $55.3 million of loan growth in the quarter, total assets above $3.0 billion and continued stable asset quality," said President and CEO Thomas J. Murphy. "Alongside organic growth, we remain focused on the customer experience through strategic investments in technology as well as our branch network. I am proud of our team and these results."

In the third quarter, Glens Falls National Bank completed a yearlong optimization of its three-branch Plattsburgh presence, which included relocations, renovations and the debut of a newly built facility at Smithfield Boulevard in September. In addition, Glens Falls National Bank reopened its fully renovated Exit 18 Office in Queensbury, and Saratoga National Bank is targeting to open its 12th branch in Latham in early 2020.

The following expands on our third-quarter results:

Cash and Stock Dividends: On September 13, 2019, the Company distributed a cash dividend of $0.26 per share. The cash dividend was 3% higher than the cash dividend paid by the Company in the third quarter of 2018 when adjusted for the 3% stock dividend distributed on September 27, 2018. Additionally, a 3% stock dividend was distributed on September 27, 2019. This is the 11th consecutive year the Company declared a stock dividend.

Loan Growth: Total loans reached $2.3 billion as of September 30, 2019, which represents an increase of $209.5 million, or 9.9% as compared to September 30, 2018. The consumer loan portfolio grew by $111.6 million, or 16.1%, as compared to September 30, 2018, primarily within the indirect automobile lending program. Total outstanding residential real estate loans increased $54.9 million, or 6.6%, as compared to September 30, 2018. Total outstanding commercial loans increased $43.0 million, or 7.2%, as compared to September 30, 2018.

Deposit Growth: At September 30, 2019, deposit balances reached $2.6 billion, up $206.7 million, or 8.6%, from the prior-year level. Noninterest-bearing deposits represented 19.8% of total deposits at September 30, 2019, a decrease from 20.4% of total deposits a year prior. At September 30, 2019, other time deposits were $269.8 million, an increase of $86.9 million compared to the prior year. Time deposits include brokered deposits acquired to diversify funding with more favorable rates as compared to wholesale borrowings. Total combined Federal Home Loan Bank Overnight and Term Advances declined $98.0 million from September 30, 2018.

Net Interest Income: Third quarter 2019 net interest income increased to $22.3 million, up 6.2% from $21.0 million in the comparable quarter of 2018. The net interest margin was 3.07% for the quarter, compared to 3.02% for the third quarter of 2018. The increase in net interest margin from the prior year was primarily the result of an improved balance sheet mix, with loans and deposits increasing and investments and borrowings decreasing.

Noninterest Income: Noninterest income for the three months ended September 30, 2019 was $7.7 million, compared to $7.4 million in the comparable 2018 quarter. For the third quarter of 2019, income from fiduciary activities and insurance combined to generate 13.8% of total revenue. For the third quarter of 2018, income from fiduciary activities and insurance combined to generate 15.1% of total revenue.

Noninterest Expense: Noninterest expense for the third quarter of 2019 increased 4.8% to $16.8 million, from $16.0 million for the third quarter of 2018. Technology and equipment expense increased $546 thousand, and other operating expense increased $481 thousand from the comparable quarter in 2018. The FDIC provided Small Bank Assessment Credits of $687 thousand, which were fully recorded in the third quarter of 2019.

Provision for Income Taxes: The provision for income taxes was $2.6 million for the third quarter of 2019 compared to $2.5 million for the same quarter of 2018. The effective income tax rates for the three-month periods ended September 30, 2019 and 2018 were 20.6% and 21.1%, respectively.

Asset Quality: Asset quality remained strong at September 30, 2019, with continued low levels of nonperforming loans and net charge-offs. Nonperforming loans at September 30, 2019, were $4.7 million, down $1.1 million from the level at September 30, 2018. Net charge-offs, expressed as an annualized percentage of average loans outstanding, were 0.05% for the three-month period ended September 30, 2019, up from the prior-year comparable quarter of 0.04%. The allowance for loan losses was $20.9 million at September 30, 2019, which represented 0.90% of loans outstanding, as compared to 0.94% at September 30, 2018. The loss provision expense for the third quarter of 2019 was $518 thousand, down $68 thousand from the provision for the comparable 2018 quarter.

Capital: Total stockholders' equity was a record $292.2 million at September 30, 2019, up $27.4 million, or 10.4%, from the comparable quarter of 2018. Overall regulatory capital ratios also remained strong in 2019, with the Company's common equity tier 1 ratio estimated to be 12.93% and the total risk-based capital ratio estimated to be 14.81% at September 30, 2019. These capital levels at the Company and both its subsidiary banks continue to significantly exceed the "well capitalized" regulatory standard.

Industry Recognition: Both of the Company's banking subsidiaries maintained their BauerFinancial, Inc. 5-Star Superior Bank rating. Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company have continued to earn this designation for the last 50 and 42 quarters, respectively.

About Arrow: Arrow Financial Corporation is a multi-bank holding company headquartered in Glens Falls, New York, serving the financial needs of northeastern New York. The Company is the parent of Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company. Other subsidiaries include Upstate Agency, LLC and North Country Investment Advisers, Inc.

Non-GAAP Financial Measures Reconciliation: In addition to presenting information in conformity with accounting principles generally accepted in the United States of America (GAAP), this news release contains financial information determined by methods other than GAAP (non-GAAP). The following measures used in this release, which are commonly utilized by financial institutions, have not been specifically exempted by the Securities and Exchange Commission ("SEC") and may constitute "non-GAAP financial measures" within the meaning of the SEC's rules. Certain non-GAAP financial measures include: tangible equity, return on tangible equity, tax-equivalent adjustment and related net interest income, tax-equivalent, and the efficiency ratio. Management believes that the non-GAAP financial measures disclosed by the Company from time to time are useful in evaluating the Company's performance and that such information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Non-GAAP financial measures may differ from similar measures presented by other companies. See the reconciliation of GAAP to non-GAAP measures in the section "Selected Quarterly Information."

Safe Harbor Statement: The information contained in this news release 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 may be "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, involving a degree of uncertainty and attendant risk. In the case of all forward-looking statements, actual outcomes and results may differ materially from what the statements predict or forecast, explicitly or by implication. The Company undertakes no obligation to revise or update these forward-looking statements to reflect the occurrence of unanticipated events. This News Release should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2018, and other filings with the Securities and Exchange Commission.

 

ARROW FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, Except Per Share Amounts - Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 2019 2018
INTEREST AND DIVIDEND INCOME
Interest and Fees on Loans $ 24,620 $ 20,839 $ 70,543 $ 59,606
Interest on Deposits at Banks 182 182 572 474
Interest and Dividends on Investment Securities:
Fully Taxable 2,018 2,187 6,671 6,128
Exempt from Federal Taxes 1,132 1,287 3,606 4,295
Total Interest and Dividend Income 27,952 24,495 81,392 70,503
INTEREST EXPENSE
Interest-Bearing Checking Accounts 500 390 1,435 1,165
Savings Deposits 2,317 901 5,926 2,134
Time Deposits over $250,000 451 301 1,362 833
Other Time Deposits 1,255 370 3,099 911
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase 28 15 75 47
Federal Home Loan Bank Advances 820 1,270 3,513 2,340
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts 250 251 780 712
Interest on Financing Leases 28 71
Total Interest Expense 5,649 3,498 16,261 8,142
NET INTEREST INCOME 22,303 20,997 65,131 62,361
Provision for Loan Losses 518 586 1,445 1,961
NET INTEREST INCOME AFTER PROVISION FORLOAN LOSSES 21,785 20,411 63,686 60,400
NONINTEREST INCOME
Income From Fiduciary Activities 2,212 2,262 6,571 7,106
Fees for Other Services to Customers 2,623 2,605 7,570 7,555
Insurance Commissions 1,936 2,024 5,590 6,119
Net Gain on Securities Transactions 146 114 222 355
Net Gain on Sales of Loans 257 54 501 115
Other Operating Income 517 291 1,020 900
Total Noninterest Income 7,691 7,350 21,474 22,150
NONINTEREST EXPENSE
Salaries and Employee Benefits 10,015 9,771 29,061 28,952
Occupancy Expenses, Net 1,324 1,132 4,023 3,742
Technology and Equipment Expense 3,305 2,759 9,689 8,306
FDIC Assessments (480) 218 (56) 658
Other Operating Expense 2,627 2,146 7,634 6,516
Total Noninterest Expense 16,791 16,026 50,351 48,174
INCOME BEFORE PROVISION FOR INCOME TAXES 12,685 11,735 34,809 34,376
Provision for Income Taxes 2,618 2,475 7,074 6,855
NET INCOME $ 10,067 $ 9,260 $ 27,735 $ 27,521
Average Shares Outstanding 1:
Basic 14,955 14,864 14,927 14,825
Diluted 14,991 14,956 14,968 14,914
Per Common Share:
Basic Earnings $ 0.67 $ 0.62 $ 1.86 $ 1.85
Diluted Earnings 0.67 0.62 1.85 1.84
1 Share and Per Share Amounts have been restated for the September 27, 2019, 3% stock dividend.

 

 

ARROW FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, Except Per Share Amounts - Unaudited) ARROW FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Amounts - Unaudited)
Three Months Ended September 30, Nine Months Ended September 30, September 30, 2019 December 31, 2018 September 30, 2018
2019 2018 2019 2018 ASSETS
INTEREST AND DIVIDEND INCOME Cash and Due From Banks $ 65,882 $ 56,529 $ 57,385
Interest and Fees on Loans $ 24,620 $ 20,839 $ 70,543 $ 59,606 Interest-Bearing Deposits at Banks 26,416 27,710 34,910
Interest on Deposits at Banks 182 182 572 474 Investment Securities:
Interest and Dividends on Investment Securities: Available-for-Sale 314,182 317,535 340,411
Fully Taxable 2,018 2,187 6,671 6,128 Held-to-Maturity (Approximate Fair Value of $259,128 at September 30, 2019; $280,338 at December 31, 2018; and $282,719 at September 30, 2018) 255,095 283,476 289,952
Exempt from Federal Taxes 1,132 1,287 3,606 4,295 Equity Securities 1,996 1,774 1,916
Total Interest and Dividend Income 27,952 24,495 81,392 70,503 Other Investments 6,627 15,506 10,866
INTEREST EXPENSE Loans 2,335,591 2,196,215 2,126,100
Interest-Bearing Checking Accounts 500 390 1,435 1,165 Allowance for Loan Losses (20,931) (20,196) (20,003)
Savings Deposits 2,317 901 5,926 2,134 Net Loans 2,314,660 2,176,019 2,106,097
Time Deposits over $250,000 451 301 1,362 833 Premises and Equipment, Net 40,228 30,446 28,601
Other Time Deposits 1,255 370 3,099 911 Goodwill 21,873 21,873 21,873
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase 28 15 75 47 Other Intangible Assets, Net 1,713 1,852 1,954
Federal Home Loan Bank Advances 820 1,270 3,513 2,340 Other Assets 64,150 55,614 59,255
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts 250 251 780 712 Total Assets $ 3,112,822 $ 2,988,334 $ 2,953,220
Interest on Financing Leases 28 71 LIABILITIES
Total Interest Expense 5,649 3,498 16,261 8,142 Noninterest-Bearing Deposits $ 516,876 $ 472,768 $ 490,469
NET INTEREST INCOME 22,303 20,997 65,131 62,361 Interest-Bearing Checking Accounts 801,446 790,781 899,547
Provision for Loan Losses 518 586 1,445 1,961 Savings Deposits 929,691 818,048 758,727
NET INTEREST INCOME AFTER PROVISION FORLOAN LOSSES 21,785 20,411 63,686 60,400 Time Deposits over $250,000 96,770 73,583 76,226
NONINTEREST INCOME Other Time Deposits 269,764 190,404 182,886
Income From Fiduciary Activities 2,212 2,262 6,571 7,106 Total Deposits 2,614,547 2,345,584 2,407,855
Fees for Other Services to Customers 2,623 2,605 7,570 7,555 Federal Funds Purchased and  Securities Sold Under Agreements to Repurchase 72,869 54,659 62,503
Insurance Commissions 1,936 2,024 5,590 6,119 Federal Home Loan Bank Overnight Advances 48,000 234,000 131,000
Net Gain on Securities Transactions 146 114 222 355 Federal Home Loan Bank Term Advances 30,000 45,000 45,000
Net Gain on Sales of Loans 257 54 501 115 Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts 20,000 20,000 20,000
Other Operating Income 517 291 1,020 900 Finance Leases 5,263
Total Noninterest Income 7,691 7,350 21,474 22,150 Other Liabilities 29,915 19,507 22,052
NONINTEREST EXPENSE Total Liabilities 2,820,594 2,718,750 2,688,410
Salaries and Employee Benefits 10,015 9,771 29,061 28,952 STOCKHOLDERS' EQUITY
Occupancy Expenses, Net 1,324 1,132 4,023 3,742 Preferred Stock, $1 Par Value and 1,000,000 Shares Authorized at September 30, 2019; $5 Par Value and 1,000,000 Shares Authorized at December 31, 2018 and September 30, 2018
Technology and Equipment Expense 3,305 2,759 9,689 8,306 Common Stock, $1 Par Value; 30,000,000 Shares Authorized at September 30, 2019 and 20,000,000 Shares Authorized at December 31, 2018 and September 30, 2018 (19,606,449 Shares Issued at September 30, 2019 and 19,035,565 at December 31, 2018 and September 30, 2018) 19,606 19,035 19,035
FDIC Assessments (480) 218 (56) 658 Additional Paid-in Capital 334,597 314,533 313,763
Other Operating Expense 2,627 2,146 7,634 6,516 Retained Earnings 27,375 29,257 24,258
Total Noninterest Expense 16,791 16,026 50,351 48,174 Unallocated ESOP Shares (5,151 Shares at September 30, 2019; 5,001 Shares at December 31, 2018 and 9,932 Shares at September 30, 2018) (100) (100) (200)
INCOME BEFORE PROVISION FOR INCOME TAXES 12,685 11,735 34,809 34,376 Accumulated Other Comprehensive Loss (8,979) (13,810) (12,621)
Provision for Income Taxes 2,618 2,475 7,074 6,855 Treasury Stock, at Cost (4,632,657 Shares at September 30, 2019; 4,558,207 Shares at December 31, 2018 and 4,584,147 Shares at September 30, 2018) (80,271) (79,331) (79,425)
NET INCOME $ 10,067 $ 9,260 $ 27,735 $ 27,521 Total Stockholders' Equity 292,228 269,584 264,810
Average Shares Outstanding 1: Total Liabilities and Stockholders' Equity $ 3,112,822 $ 2,988,334 $ 2,953,220
Basic 14,955 14,864 14,927 14,825
Diluted 14,991 14,956 14,968 14,914
Per Common Share:
Basic Earnings $ 0.67 $ 0.62 $ 1.86 $ 1.85
Diluted Earnings 0.67 0.62 1.85 1.84
1 Share and Per Share Amounts have been restated for the September 27, 2019, 3% stock dividend.

 

 

ARROW FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, Except Per Share Amounts - Unaudited) ARROW FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Amounts - Unaudited) Arrow Financial Corporation Selected Quarterly Information (Dollars In Thousands, Except Per Share Amounts - Unaudited)
Three Months Ended September 30, Nine Months Ended September 30, September 30, 2019 December 31, 2018 September 30, 2018 Quarter Ended 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018
2019 2018 2019 2018 ASSETS Net Income $ 10,067 $ 8,934 $ 8,734 $ 8,758 $ 9,260
INTEREST AND DIVIDEND INCOME Cash and Due From Banks $ 65,882 $ 56,529 $ 57,385 Transactions in Net Income (Net of Tax):
Interest and Fees on Loans $ 24,620 $ 20,839 $ 70,543 $ 59,606 Interest-Bearing Deposits at Banks 26,416 27,710 34,910 Net Changes in Fair Value of Equity Investments 109 57 (106) 85
Interest on Deposits at Banks 182 182 572 474 Investment Securities:
Interest and Dividends on Investment Securities: Available-for-Sale 314,182 317,535 340,411 Share and Per Share Data:1
Fully Taxable 2,018 2,187 6,671 6,128 Held-to-Maturity (Approximate Fair Value of $259,128 at September 30, 2019; $280,338 at December 31, 2018; and $282,719 at September 30, 2018) 255,095 283,476 289,952 Period End Shares Outstanding 14,969 14,949 14,909 14,907 14,875
Exempt from Federal Taxes 1,132 1,287 3,606 4,295 Equity Securities 1,996 1,774 1,916 Basic Average Shares Outstanding 14,955 14,922 14,903 14,885 14,864
Total Interest and Dividend Income 27,952 24,495 81,392 70,503 Other Investments 6,627 15,506 10,866 Diluted Average Shares Outstanding 14,991 14,963 14,956 14,949 14,956
INTEREST EXPENSE Loans 2,335,591 2,196,215 2,126,100 Basic Earnings Per Share $ 0.67 $ 0.60 $ 0.59 $ 0.59 $ 0.62
Interest-Bearing Checking Accounts 500 390 1,435 1,165 Allowance for Loan Losses (20,931) (20,196) (20,003) Diluted Earnings Per Share 0.67 0.60 0.58 0.59 0.62
Savings Deposits 2,317 901 5,926 2,134 Net Loans 2,314,660 2,176,019 2,106,097 Cash Dividend Per Share 0.252 0.252 0.252 0.252 0.245
Time Deposits over $250,000 451 301 1,362 833 Premises and Equipment, Net 40,228 30,446 28,601
Other Time Deposits 1,255 370 3,099 911 Goodwill 21,873 21,873 21,873 Selected Quarterly Average Balances:
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase 28 15 75 47 Other Intangible Assets, Net 1,713 1,852 1,954  Interest-Bearing Deposits at Banks $ 27,083 $ 25,107 $ 26,163 $ 34,782 $ 30,522
Federal Home Loan Bank Advances 820 1,270 3,513 2,340 Other Assets 64,150 55,614 59,255  Investment Securities 545,073 584,679 611,161 637,341 636,847
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts 250 251 780 712 Total Assets $ 3,112,822 $ 2,988,334 $ 2,953,220  Loans 2,308,879 2,255,299 2,210,642 2,160,435 2,089,651
Interest on Financing Leases 28 71 LIABILITIES  Deposits 2,472,528 2,436,290 2,347,985 2,347,231 2,279,709
Total Interest Expense 5,649 3,498 16,261 8,142 Noninterest-Bearing Deposits $ 516,876 $ 472,768 $ 490,469  Other Borrowed Funds 231,291 253,302 330,086 315,172 314,304
NET INTEREST INCOME 22,303 20,997 65,131 62,361 Interest-Bearing Checking Accounts 801,446 790,781 899,547  Shareholders' Equity 289,016 280,247 272,864 268,503 263,139
Provision for Loan Losses 518 586 1,445 1,961 Savings Deposits 929,691 818,048 758,727  Total Assets 3,023,043 2,997,458 2,977,056 2,954,029 2,879,854
NET INTEREST INCOME AFTER PROVISION FORLOAN LOSSES 21,785 20,411 63,686 60,400 Time Deposits over $250,000 96,770 73,583 76,226 Return on Average Assets, annualized 1.32 % 1.20 % 1.19 % 1.18 % 1.28 %
NONINTEREST INCOME Other Time Deposits 269,764 190,404 182,886 Return on Average Equity, annualized 13.82 % 12.79 % 12.98 % 12.94 % 13.96 %
Income From Fiduciary Activities 2,212 2,262 6,571 7,106 Total Deposits 2,614,547 2,345,584 2,407,855 Return on Average Tangible Equity, annualized 2 15.05 % 13.96 % 14.22 % 14.20 % 15.36 %
Fees for Other Services to Customers 2,623 2,605 7,570 7,555 Federal Funds Purchased and  Securities Sold Under Agreements to Repurchase 72,869 54,659 62,503 Average Earning Assets $ 2,881,035 $ 2,865,085 $ 2,847,966 $ 2,832,558 $ 2,757,020
Insurance Commissions 1,936 2,024 5,590 6,119 Federal Home Loan Bank Overnight Advances 48,000 234,000 131,000 Average Paying Liabilities 2,213,642 2,235,462 2,224,403 2,189,233 2,110,924
Net Gain on Securities Transactions 146 114 222 355 Federal Home Loan Bank Term Advances 30,000 45,000 45,000 Interest Income 27,952 27,227 26,213 26,000 24,495
Net Gain on Sales of Loans 257 54 501 115 Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts 20,000 20,000 20,000 Tax-Equivalent Adjustment 3 344 376 373 376 376
Other Operating Income 517 291 1,020 900 Finance Leases 5,263 Interest Income, Tax-Equivalent 3 28,296 27,603 26,586 26,376 24,871
Total Noninterest Income 7,691 7,350 21,474 22,150 Other Liabilities 29,915 19,507 22,052 Interest Expense 5,649 5,520 5,092 4,343 3,498
NONINTEREST EXPENSE Total Liabilities 2,820,594 2,718,750 2,688,410 Net Interest Income 22,303 21,707 21,121 21,657 20,997
Salaries and Employee Benefits 10,015 9,771 29,061 28,952 STOCKHOLDERS' EQUITY Net Interest Income, Tax-Equivalent 3 22,647 22,083 21,494 22,033 21,373
Occupancy Expenses, Net 1,324 1,132 4,023 3,742 Preferred Stock, $1 Par Value and 1,000,000 Shares Authorized at September 30, 2019; $5 Par Value and 1,000,000 Shares Authorized at December 31, 2018 and September 30, 2018 Net Interest Margin, annualized 3.07 % 3.04 % 3.01 % 3.03 % 3.02 %
Technology and Equipment Expense 3,305 2,759 9,689 8,306 Common Stock, $1 Par Value; 30,000,000 Shares Authorized at September 30, 2019 and 20,000,000 Shares Authorized at December 31, 2018 and September 30, 2018 (19,606,449 Shares Issued at September 30, 2019 and 19,035,565 at December 31, 2018 and September 30, 2018) 19,606 19,035 19,035 Net Interest Margin, Tax-Equivalent, annualized 3 3.12 % 3.09 % 3.06 % 3.09 % 3.08 %
FDIC Assessments (480) 218 (56) 658 Additional Paid-in Capital 334,597 314,533 313,763
Other Operating Expense 2,627 2,146 7,634 6,516 Retained Earnings 27,375 29,257 24,258 Efficiency Ratio Calculation: 4
Total Noninterest Expense 16,791 16,026 50,351 48,174 Unallocated ESOP Shares (5,151 Shares at September 30, 2019; 5,001 Shares at December 31, 2018 and 9,932 Shares at September 30, 2018) (100) (100) (200) Noninterest Expense $ 16,791 $ 16,908 $ 16,652 $ 16,881 $ 16,026
INCOME BEFORE PROVISION FOR INCOME TAXES 12,685 11,735 34,809 34,376 Accumulated Other Comprehensive Loss (8,979) (13,810) (12,621) Less: Intangible Asset Amortization 61 44 79 65 65
Provision for Income Taxes 2,618 2,475 7,074 6,855 Treasury Stock, at Cost (4,632,657 Shares at September 30, 2019; 4,558,207 Shares at December 31, 2018 and 4,584,147 Shares at September 30, 2018) (80,271) (79,331) (79,425) Net Noninterest Expense $ 16,730 $ 16,864 $ 16,573 $ 16,816 $ 15,961
NET INCOME $ 10,067 $ 9,260 $ 27,735 $ 27,521 Total Stockholders' Equity 292,228 269,584 264,810 Net Interest Income, Tax-Equivalent $ 22,647 $ 22,083 $ 21,494 $ 22,033 $ 21,373
Average Shares Outstanding 1: Total Liabilities and Stockholders' Equity $ 3,112,822 $ 2,988,334 $ 2,953,220 Noninterest Income 7,691 6,896 6,887 6,799 7,350
Basic 14,955 14,864 14,927 14,825 Less: Net Changes in Fair Value of Equity Invest. 146 76 (142) 114
Diluted 14,991 14,956 14,968 14,914 Net Gross Income $ 30,192 $ 28,979 $ 28,305 $ 28,974 $ 28,609
Per Common Share: Efficiency Ratio 55.41 % 58.19 % 58.55 % 58.04 % 55.79 %
Basic Earnings $ 0.67 $ 0.62 $ 1.86 $ 1.85
Diluted Earnings 0.67 0.62 1.85 1.84 Period-End Capital Information:
1 Share and Per Share Amounts have been restated for the September 27, 2019, 3% stock dividend. Total Stockholders' Equity (i.e. Book Value) $ 292,228 $ 284,649 $ 276,609 $ 269,584 $ 264,810
Book Value per Share 1 19.52 19.04 18.55 18.08 17.80
Goodwill and Other Intangible Assets, net 23,586 23,603 23,650 23,725 23,827
Tangible Book Value per Share 1,2 17.95 17.46 16.97 16.49 16.20
Capital Ratios:5
Tier 1 Leverage Ratio 10.04 % 9.88 % 9.73 % 9.61 % 9.67 %
Common Equity Tier 1 Capital Ratio  12.93 % 12.99 % 12.98 % 12.89 % 12.89 %
Tier 1 Risk-Based Capital Ratio 13.85 % 13.93 % 13.95 % 13.87 % 13.90 %
Total Risk-Based Capital Ratio 14.81 % 14.91 % 14.93 % 14.86 % 14.90 %
Assets Under Trust Admin. & Investment Mgmt. $ 1,485,116 $ 1,496,966 $ 1,483,259 $ 1,385,752 $ 1,551,289

 

 

Arrow Financial CorporationSelected Quarterly Information - Continued(Dollars In Thousands, Except Per Share Amounts - Unaudited)

ARROW FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, Except Per Share Amounts - Unaudited) ARROW FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Amounts - Unaudited) Arrow Financial Corporation Selected Quarterly Information (Dollars In Thousands, Except Per Share Amounts - Unaudited)
Three Months Ended September 30, Nine Months Ended September 30, September 30, 2019 December 31, 2018 September 30, 2018 Quarter Ended 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018 Footnotes:
2019 2018 2019 2018 ASSETS Net Income $ 10,067 $ 8,934 $ 8,734 $ 8,758 $ 9,260
INTEREST AND DIVIDEND INCOME Cash and Due From Banks $ 65,882 $ 56,529 $ 57,385 Transactions in Net Income (Net of Tax): 1. Share and Per Share Data have been restated for the September 27, 2019, 3% stock dividend.
Interest and Fees on Loans $ 24,620 $ 20,839 $ 70,543 $ 59,606 Interest-Bearing Deposits at Banks 26,416 27,710 34,910 Net Changes in Fair Value of Equity Investments 109 57 (106) 85
Interest on Deposits at Banks 182 182 572 474 Investment Securities: 2. Non-GAAP Financial Measures Reconciliation: Tangible Book Value and Tangible Equity exclude goodwill and other intangible assets, net from total equity.  These are non-GAAP financial measures which we believe provide investors with information that is useful in understanding our financial performance.
Interest and Dividends on Investment Securities: Available-for-Sale 314,182 317,535 340,411 Share and Per Share Data:1 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018
Fully Taxable 2,018 2,187 6,671 6,128 Held-to-Maturity (Approximate Fair Value of $259,128 at September 30, 2019; $280,338 at December 31, 2018; and $282,719 at September 30, 2018) 255,095 283,476 289,952 Period End Shares Outstanding 14,969 14,949 14,909 14,907 14,875 Total Stockholders' Equity (GAAP) $ 292,228 $ 284,649 $ 276,609 $ 269,584 $ 264,810
Exempt from Federal Taxes 1,132 1,287 3,606 4,295 Equity Securities 1,996 1,774 1,916 Basic Average Shares Outstanding 14,955 14,922 14,903 14,885 14,864 Less: Goodwill and Other Intangible assets, net 23,586 23,603 23,650 23,725 23,827
Total Interest and Dividend Income 27,952 24,495 81,392 70,503 Other Investments 6,627 15,506 10,866 Diluted Average Shares Outstanding 14,991 14,963 14,956 14,949 14,956 Tangible Equity (Non-GAAP) $ 268,642 $ 261,046 $ 252,959 $ 245,859 $ 240,983
INTEREST EXPENSE Loans 2,335,591 2,196,215 2,126,100 Basic Earnings Per Share $ 0.67 $ 0.60 $ 0.59 $ 0.59 $ 0.62
Interest-Bearing Checking Accounts 500 390 1,435 1,165 Allowance for Loan Losses (20,931) (20,196) (20,003) Diluted Earnings Per Share 0.67 0.60 0.58 0.59 0.62 Period End Shares Outstanding 14,969 14,949 14,909 14,907 14,875
Savings Deposits 2,317 901 5,926 2,134 Net Loans 2,314,660 2,176,019 2,106,097 Cash Dividend Per Share 0.252 0.252 0.252 0.252 0.245 Tangible Book Value per Share (Non-GAAP) $ 17.95 $ 17.46 $ 16.97 $ 16.49 $ 16.20
Time Deposits over $250,000 451 301 1,362 833 Premises and Equipment, Net 40,228 30,446 28,601 Net Income 10,067 8,934 8,734 8,758 9,260
Other Time Deposits 1,255 370 3,099 911 Goodwill 21,873 21,873 21,873 Selected Quarterly Average Balances: Return on Average Tangible Equity (Net Income/Tangible Equity - Annualized) 15.05 % 13.96 % 14.22 % 14.20 % 15.36 %
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase 28 15 75 47 Other Intangible Assets, Net 1,713 1,852 1,954  Interest-Bearing Deposits at Banks $ 27,083 $ 25,107 $ 26,163 $ 34,782 $ 30,522
Federal Home Loan Bank Advances 820 1,270 3,513 2,340 Other Assets 64,150 55,614 59,255  Investment Securities 545,073 584,679 611,161 637,341 636,847 3. Non-GAAP Financial Measures Reconciliation: Net Interest Margin, Tax-Equivalent is the ratio of our annualized tax-equivalent net interest income to average earning assets. This is also a non-GAAP financial measure which we believe provides investors with information that is useful in understanding our financial performance.
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts 250 251 780 712 Total Assets $ 3,112,822 $ 2,988,334 $ 2,953,220  Loans 2,308,879 2,255,299 2,210,642 2,160,435 2,089,651 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018
Interest on Financing Leases 28 71 LIABILITIES  Deposits 2,472,528 2,436,290 2,347,985 2,347,231 2,279,709 Interest Income (GAAP) $ 27,952 $ 27,227 $ 26,213 $ 26,000 $ 24,495
Total Interest Expense 5,649 3,498 16,261 8,142 Noninterest-Bearing Deposits $ 516,876 $ 472,768 $ 490,469  Other Borrowed Funds 231,291 253,302 330,086 315,172 314,304 Add: Tax-Equivalent adjustment (Non-GAAP) 344 376 373 376 376
NET INTEREST INCOME 22,303 20,997 65,131 62,361 Interest-Bearing Checking Accounts 801,446 790,781 899,547  Shareholders' Equity 289,016 280,247 272,864 268,503 263,139 Interest Income - Tax Equivalent (Non-GAAP) $ 28,296 $ 27,603 $ 26,586 $ 26,376 $ 24,871
Provision for Loan Losses 518 586 1,445 1,961 Savings Deposits 929,691 818,048 758,727  Total Assets 3,023,043 2,997,458 2,977,056 2,954,029 2,879,854 Net Interest Income (GAAP) $ 22,303 $ 21,707 $ 21,121 $ 21,657 $ 20,997
NET INTEREST INCOME AFTER PROVISION FORLOAN LOSSES 21,785 20,411 63,686 60,400 Time Deposits over $250,000 96,770 73,583 76,226 Return on Average Assets, annualized 1.32 % 1.20 % 1.19 % 1.18 % 1.28 % Add: Tax-Equivalent adjustment (Non-GAAP) 344 376 373 376 376
NONINTEREST INCOME Other Time Deposits 269,764 190,404 182,886 Return on Average Equity, annualized 13.82 % 12.79 % 12.98 % 12.94 % 13.96 % Net Interest Income - Tax Equivalent (Non-GAAP) $ 22,647 $ 22,083 $ 21,494 $ 22,033 $ 21,373
Income From Fiduciary Activities 2,212 2,262 6,571 7,106 Total Deposits 2,614,547 2,345,584 2,407,855 Return on Average Tangible Equity, annualized 2 15.05 % 13.96 % 14.22 % 14.20 % 15.36 % Average Earning Assets $ 2,881,035 $ 2,865,085 $ 2,847,966 $ 2,832,558 $ 2,757,020
Fees for Other Services to Customers 2,623 2,605 7,570 7,555 Federal Funds Purchased and  Securities Sold Under Agreements to Repurchase 72,869 54,659 62,503 Average Earning Assets $ 2,881,035 $ 2,865,085 $ 2,847,966 $ 2,832,558 $ 2,757,020 Net Interest Margin (Non-GAAP)* 3.12 % 3.09 % 3.06 % 3.09 % 3.08 %
Insurance Commissions 1,936 2,024 5,590 6,119 Federal Home Loan Bank Overnight Advances 48,000 234,000 131,000 Average Paying Liabilities 2,213,642 2,235,462 2,224,403 2,189,233 2,110,924
Net Gain on Securities Transactions 146 114 222 355 Federal Home Loan Bank Term Advances 30,000 45,000 45,000 Interest Income 27,952 27,227 26,213 26,000 24,495 4. Non-GAAP Financial Measures: Financial Institutions often use the "efficiency ratio", a non-GAAP ratio, as a measure of expense control. We believe the efficiency ratio provides investors with information that is useful in understanding our financial performance. We define our efficiency ratio as the ratio of our noninterest expense to our net gross income (which equals our tax-equivalent net interest income plus noninterest income, as adjusted).
Net Gain on Sales of Loans 257 54 501 115 Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts 20,000 20,000 20,000 Tax-Equivalent Adjustment 3 344 376 373 376 376
Other Operating Income 517 291 1,020 900 Finance Leases 5,263 Interest Income, Tax-Equivalent 3 28,296 27,603 26,586 26,376 24,871 5. For the current quarter, all of the regulatory capital ratios in the table above, as well as the Total Risk-Weighted Assets and Common Equity Tier 1 Capital amounts listed in the table below, are estimates based on, and calculated in accordance with, bank regulatory capital rules. All prior quarters reflect actual results. The CET1 ratio at September 30, 2019 listed in the tables (i.e., 12.93%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%).
Total Noninterest Income 7,691 7,350 21,474 22,150 Other Liabilities 29,915 19,507 22,052 Interest Expense 5,649 5,520 5,092 4,343 3,498 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018
NONINTEREST EXPENSE Total Liabilities 2,820,594 2,718,750 2,688,410 Net Interest Income 22,303 21,707 21,121 21,657 20,997 Total Risk Weighted Assets $ 2,184,214 $ 2,121,541 $ 2,075,115 $ 2,046,495 $ 1,999,849
Salaries and Employee Benefits 10,015 9,771 29,061 28,952 STOCKHOLDERS' EQUITY Net Interest Income, Tax-Equivalent 3 22,647 22,083 21,494 22,033 21,373 Common Equity Tier 1 Capital 282,485 275,528 269,363 263,863 257,852
Occupancy Expenses, Net 1,324 1,132 4,023 3,742 Preferred Stock, $1 Par Value and 1,000,000 Shares Authorized at September 30, 2019; $5 Par Value and 1,000,000 Shares Authorized at December 31, 2018 and September 30, 2018 Net Interest Margin, annualized 3.07 % 3.04 % 3.01 % 3.03 % 3.02 % Common Equity Tier 1 Ratio 12.93 % 12.99 % 12.98 % 12.89 % 12.89 %
Technology and Equipment Expense 3,305 2,759 9,689 8,306 Common Stock, $1 Par Value; 30,000,000 Shares Authorized at September 30, 2019 and 20,000,000 Shares Authorized at December 31, 2018 and September 30, 2018 (19,606,449 Shares Issued at September 30, 2019 and 19,035,565 at December 31, 2018 and September 30, 2018) 19,606 19,035 19,035 Net Interest Margin, Tax-Equivalent, annualized 3 3.12 % 3.09 % 3.06 % 3.09 % 3.08 %
FDIC Assessments (480) 218 (56) 658 Additional Paid-in Capital 334,597 314,533 313,763
Other Operating Expense 2,627 2,146 7,634 6,516 Retained Earnings 27,375 29,257 24,258 Efficiency Ratio Calculation: 4
Total Noninterest Expense 16,791 16,026 50,351 48,174 Unallocated ESOP Shares (5,151 Shares at September 30, 2019; 5,001 Shares at December 31, 2018 and 9,932 Shares at September 30, 2018) (100) (100) (200) Noninterest Expense $ 16,791 $ 16,908 $ 16,652 $ 16,881 $ 16,026
INCOME BEFORE PROVISION FOR INCOME TAXES 12,685 11,735 34,809 34,376 Accumulated Other Comprehensive Loss (8,979) (13,810) (12,621) Less: Intangible Asset Amortization 61 44 79 65 65
Provision for Income Taxes 2,618 2,475 7,074 6,855 Treasury Stock, at Cost (4,632,657 Shares at September 30, 2019; 4,558,207 Shares at December 31, 2018 and 4,584,147 Shares at September 30, 2018) (80,271) (79,331) (79,425) Net Noninterest Expense $ 16,730 $ 16,864 $ 16,573 $ 16,816 $ 15,961
NET INCOME $ 10,067 $ 9,260 $ 27,735 $ 27,521 Total Stockholders' Equity 292,228 269,584 264,810 Net Interest Income, Tax-Equivalent $ 22,647 $ 22,083 $ 21,494 $ 22,033 $ 21,373
Average Shares Outstanding 1: Total Liabilities and Stockholders' Equity $ 3,112,822 $ 2,988,334 $ 2,953,220 Noninterest Income 7,691 6,896 6,887 6,799 7,350
Basic 14,955 14,864 14,927 14,825 Less: Net Changes in Fair Value of Equity Invest. 146 76 (142) 114
Diluted 14,991 14,956 14,968 14,914 Net Gross Income $ 30,192 $ 28,979 $ 28,305 $ 28,974 $ 28,609
Per Common Share: Efficiency Ratio 55.41 % 58.19 % 58.55 % 58.04 % 55.79 %
Basic Earnings $ 0.67 $ 0.62 $ 1.86 $ 1.85
Diluted Earnings 0.67 0.62 1.85 1.84 Period-End Capital Information:
1 Share and Per Share Amounts have been restated for the September 27, 2019, 3% stock dividend. Total Stockholders' Equity (i.e. Book Value) $ 292,228 $ 284,649 $ 276,609 $ 269,584 $ 264,810
Book Value per Share 1 19.52 19.04 18.55 18.08 17.80
Goodwill and Other Intangible Assets, net 23,586 23,603 23,650 23,725 23,827
Tangible Book Value per Share 1,2 17.95 17.46 16.97 16.49 16.20
Capital Ratios:5
Tier 1 Leverage Ratio 10.04 % 9.88 % 9.73 % 9.61 % 9.67 %
Common Equity Tier 1 Capital Ratio  12.93 % 12.99 % 12.98 % 12.89 % 12.89 %
Tier 1 Risk-Based Capital Ratio 13.85 % 13.93 % 13.95 % 13.87 % 13.90 %
Total Risk-Based Capital Ratio 14.81 % 14.91 % 14.93 % 14.86 % 14.90 %
Assets Under Trust Admin. & Investment Mgmt. $ 1,485,116 $ 1,496,966 $ 1,483,259 $ 1,385,752 $ 1,551,289

* Quarterly ratios have been annualized

 

ARROW FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, Except Per Share Amounts - Unaudited) ARROW FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Amounts - Unaudited) Arrow Financial Corporation Selected Quarterly Information (Dollars In Thousands, Except Per Share Amounts - Unaudited) Arrow Financial Corporation Consolidated Financial Information (Dollars in Thousands - Unaudited)
Three Months Ended September 30, Nine Months Ended September 30, September 30, 2019 December 31, 2018 September 30, 2018 Quarter Ended 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018 Footnotes: Quarter Ended: 9/30/2019 12/31/2018 9/30/2018
2019 2018 2019 2018 ASSETS Net Income $ 10,067 $ 8,934 $ 8,734 $ 8,758 $ 9,260 Loan Portfolio
INTEREST AND DIVIDEND INCOME Cash and Due From Banks $ 65,882 $ 56,529 $ 57,385 Transactions in Net Income (Net of Tax): 1. Share and Per Share Data have been restated for the September 27, 2019, 3% stock dividend. Commercial Loans $ 142,135 $ 136,890 $ 127,112
Interest and Fees on Loans $ 24,620 $ 20,839 $ 70,543 $ 59,606 Interest-Bearing Deposits at Banks 26,416 27,710 34,910 Net Changes in Fair Value of Equity Investments 109 57 (106) 85 Commercial Real Estate Loans 498,083 484,562 470,122
Interest on Deposits at Banks 182 182 572 474 Investment Securities: 2. Non-GAAP Financial Measures Reconciliation: Tangible Book Value and Tangible Equity exclude goodwill and other intangible assets, net from total equity.  These are non-GAAP financial measures which we believe provide investors with information that is useful in understanding our financial performance.  Subtotal Commercial Loan Portfolio 640,218 621,452 597,234
Interest and Dividends on Investment Securities: Available-for-Sale 314,182 317,535 340,411 Share and Per Share Data:1 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018 Consumer Loans 805,798 719,510 694,188
Fully Taxable 2,018 2,187 6,671 6,128 Held-to-Maturity (Approximate Fair Value of $259,128 at September 30, 2019; $280,338 at December 31, 2018; and $282,719 at September 30, 2018) 255,095 283,476 289,952 Period End Shares Outstanding 14,969 14,949 14,909 14,907 14,875 Total Stockholders' Equity (GAAP) $ 292,228 $ 284,649 $ 276,609 $ 269,584 $ 264,810 Residential Real Estate Loans 889,575 855,253 834,679
Exempt from Federal Taxes 1,132 1,287 3,606 4,295 Equity Securities 1,996 1,774 1,916 Basic Average Shares Outstanding 14,955 14,922 14,903 14,885 14,864 Less: Goodwill and Other Intangible assets, net 23,586 23,603 23,650 23,725 23,827 Total Loans $ 2,335,591 $ 2,196,215 $ 2,126,101
Total Interest and Dividend Income 27,952 24,495 81,392 70,503 Other Investments 6,627 15,506 10,866 Diluted Average Shares Outstanding 14,991 14,963 14,956 14,949 14,956 Tangible Equity (Non-GAAP) $ 268,642 $ 261,046 $ 252,959 $ 245,859 $ 240,983 Allowance for Loan Losses
INTEREST EXPENSE Loans 2,335,591 2,196,215 2,126,100 Basic Earnings Per Share $ 0.67 $ 0.60 $ 0.59 $ 0.59 $ 0.62 Allowance for Loan Losses, Beginning of Quarter $ 20,695 $ 20,003 $ 19,640
Interest-Bearing Checking Accounts 500 390 1,435 1,165 Allowance for Loan Losses (20,931) (20,196) (20,003) Diluted Earnings Per Share 0.67 0.60 0.58 0.59 0.62 Period End Shares Outstanding 14,969 14,949 14,909 14,907 14,875 Loans Charged-off (402) (573) (325)
Savings Deposits 2,317 901 5,926 2,134 Net Loans 2,314,660 2,176,019 2,106,097 Cash Dividend Per Share 0.252 0.252 0.252 0.252 0.245 Tangible Book Value per Share (Non-GAAP) $ 17.95 $ 17.46 $ 16.97 $ 16.49 $ 16.20 Less Recoveries of Loans Previously Charged-off 120 120 102
Time Deposits over $250,000 451 301 1,362 833 Premises and Equipment, Net 40,228 30,446 28,601 Net Income 10,067 8,934 8,734 8,758 9,260 Net Loans Charged-off (282) (453) (223)
Other Time Deposits 1,255 370 3,099 911 Goodwill 21,873 21,873 21,873 Selected Quarterly Average Balances: Return on Average Tangible Equity (Net Income/Tangible Equity - Annualized) 15.05 % 13.96 % 14.22 % 14.20 % 15.36 % Provision for Loan Losses 518 646 586
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase 28 15 75 47 Other Intangible Assets, Net 1,713 1,852 1,954  Interest-Bearing Deposits at Banks $ 27,083 $ 25,107 $ 26,163 $ 34,782 $ 30,522 Allowance for Loan Losses, End of Quarter $ 20,931 $ 20,196 $ 20,003
Federal Home Loan Bank Advances 820 1,270 3,513 2,340 Other Assets 64,150 55,614 59,255  Investment Securities 545,073 584,679 611,161 637,341 636,847 3. Non-GAAP Financial Measures Reconciliation: Net Interest Margin, Tax-Equivalent is the ratio of our annualized tax-equivalent net interest income to average earning assets. This is also a non-GAAP financial measure which we believe provides investors with information that is useful in understanding our financial performance. Nonperforming Assets
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts 250 251 780 712 Total Assets $ 3,112,822 $ 2,988,334 $ 2,953,220  Loans 2,308,879 2,255,299 2,210,642 2,160,435 2,089,651 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018 Nonaccrual Loans $ 3,465 $ 4,159 $ 4,468
Interest on Financing Leases 28 71 LIABILITIES  Deposits 2,472,528 2,436,290 2,347,985 2,347,231 2,279,709 Interest Income (GAAP) $ 27,952 $ 27,227 $ 26,213 $ 26,000 $ 24,495 Loans Past Due 90 or More Days and Accruing 1,066 1,225 1,172
Total Interest Expense 5,649 3,498 16,261 8,142 Noninterest-Bearing Deposits $ 516,876 $ 472,768 $ 490,469  Other Borrowed Funds 231,291 253,302 330,086 315,172 314,304 Add: Tax-Equivalent adjustment (Non-GAAP) 344 376 373 376 376 Loans Restructured and in Compliance with Modified Terms 150 138 115
NET INTEREST INCOME 22,303 20,997 65,131 62,361 Interest-Bearing Checking Accounts 801,446 790,781 899,547  Shareholders' Equity 289,016 280,247 272,864 268,503 263,139 Interest Income - Tax Equivalent (Non-GAAP) $ 28,296 $ 27,603 $ 26,586 $ 26,376 $ 24,871 Total Nonperforming Loans 4,681 5,522 5,755
Provision for Loan Losses 518 586 1,445 1,961 Savings Deposits 929,691 818,048 758,727  Total Assets 3,023,043 2,997,458 2,977,056 2,954,029 2,879,854 Net Interest Income (GAAP) $ 22,303 $ 21,707 $ 21,121 $ 21,657 $ 20,997 Repossessed Assets 76 130 47
NET INTEREST INCOME AFTER PROVISION FORLOAN LOSSES 21,785 20,411 63,686 60,400 Time Deposits over $250,000 96,770 73,583 76,226 Return on Average Assets, annualized 1.32 % 1.20 % 1.19 % 1.18 % 1.28 % Add: Tax-Equivalent adjustment (Non-GAAP) 344 376 373 376 376 Other Real Estate Owned 1,198 1,130 1,173
NONINTEREST INCOME Other Time Deposits 269,764 190,404 182,886 Return on Average Equity, annualized 13.82 % 12.79 % 12.98 % 12.94 % 13.96 % Net Interest Income - Tax Equivalent (Non-GAAP) $ 22,647 $ 22,083 $ 21,494 $ 22,033 $ 21,373 Total Nonperforming Assets $ 5,955 $ 6,782 $ 6,975
Income From Fiduciary Activities 2,212 2,262 6,571 7,106 Total Deposits 2,614,547 2,345,584 2,407,855 Return on Average Tangible Equity, annualized 2 15.05 % 13.96 % 14.22 % 14.20 % 15.36 % Average Earning Assets $ 2,881,035 $ 2,865,085 $ 2,847,966 $ 2,832,558 $ 2,757,020 Key Asset Quality Ratios
Fees for Other Services to Customers 2,623 2,605 7,570 7,555 Federal Funds Purchased and  Securities Sold Under Agreements to Repurchase 72,869 54,659 62,503 Average Earning Assets $ 2,881,035 $ 2,865,085 $ 2,847,966 $ 2,832,558 $ 2,757,020 Net Interest Margin (Non-GAAP)* 3.12 % 3.09 % 3.06 % 3.09 % 3.08 % Net Loans Charged-off to Average Loans,  Quarter-to-date Annualized 0.05 % 0.08 % 0.04 %
Insurance Commissions 1,936 2,024 5,590 6,119 Federal Home Loan Bank Overnight Advances 48,000 234,000 131,000 Average Paying Liabilities 2,213,642 2,235,462 2,224,403 2,189,233 2,110,924 Provision for Loan Losses to Average Loans,  Quarter-to-date Annualized 0.09 % 0.12 % 0.11 %
Net Gain on Securities Transactions 146 114 222 355 Federal Home Loan Bank Term Advances 30,000 45,000 45,000 Interest Income 27,952 27,227 26,213 26,000 24,495 4. Non-GAAP Financial Measures: Financial Institutions often use the "efficiency ratio", a non-GAAP ratio, as a measure of expense control. We believe the efficiency ratio provides investors with information that is useful in understanding our financial performance. We define our efficiency ratio as the ratio of our noninterest expense to our net gross income (which equals our tax-equivalent net interest income plus noninterest income, as adjusted). Allowance for Loan Losses to Period-End Loans 0.90 % 0.92 % 0.94 %
Net Gain on Sales of Loans 257 54 501 115 Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts 20,000 20,000 20,000 Tax-Equivalent Adjustment 3 344 376 373 376 376 Allowance for Loan Losses to Period-End Nonperforming Loans 447.15 % 365.74 % 347.58 %
Other Operating Income 517 291 1,020 900 Finance Leases 5,263 Interest Income, Tax-Equivalent 3 28,296 27,603 26,586 26,376 24,871 5. For the current quarter, all of the regulatory capital ratios in the table above, as well as the Total Risk-Weighted Assets and Common Equity Tier 1 Capital amounts listed in the table below, are estimates based on, and calculated in accordance with, bank regulatory capital rules. All prior quarters reflect actual results. The CET1 ratio at September 30, 2019 listed in the tables (i.e., 12.93%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%). Nonperforming Loans to Period-End Loans 0.20 % 0.25 % 0.27 %
Total Noninterest Income 7,691 7,350 21,474 22,150 Other Liabilities 29,915 19,507 22,052 Interest Expense 5,649 5,520 5,092 4,343 3,498 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018 Nonperforming Assets to Period-End Assets 0.19 % 0.23 % 0.24 %
NONINTEREST EXPENSE Total Liabilities 2,820,594 2,718,750 2,688,410 Net Interest Income 22,303 21,707 21,121 21,657 20,997 Total Risk Weighted Assets $ 2,184,214 $ 2,121,541 $ 2,075,115 $ 2,046,495 $ 1,999,849 Nine-Month Period Ended:
Salaries and Employee Benefits 10,015 9,771 29,061 28,952 STOCKHOLDERS' EQUITY Net Interest Income, Tax-Equivalent 3 22,647 22,083 21,494 22,033 21,373 Common Equity Tier 1 Capital 282,485 275,528 269,363 263,863 257,852 Allowance for Loan Losses
Occupancy Expenses, Net 1,324 1,132 4,023 3,742 Preferred Stock, $1 Par Value and 1,000,000 Shares Authorized at September 30, 2019; $5 Par Value and 1,000,000 Shares Authorized at December 31, 2018 and September 30, 2018 Net Interest Margin, annualized 3.07 % 3.04 % 3.01 % 3.03 % 3.02 % Common Equity Tier 1 Ratio 12.93 % 12.99 % 12.98 % 12.89 % 12.89 % Allowance for Loan Losses, Beginning of Year $ 20,196 $ 18,586
Technology and Equipment Expense 3,305 2,759 9,689 8,306 Common Stock, $1 Par Value; 30,000,000 Shares Authorized at September 30, 2019 and 20,000,000 Shares Authorized at December 31, 2018 and September 30, 2018 (19,606,449 Shares Issued at September 30, 2019 and 19,035,565 at December 31, 2018 and September 30, 2018) 19,606 19,035 19,035 Net Interest Margin, Tax-Equivalent, annualized 3 3.12 % 3.09 % 3.06 % 3.09 % 3.08 % Loans Charged-off (1,232) (960)
FDIC Assessments (480) 218 (56) 658 Additional Paid-in Capital 334,597 314,533 313,763 Less Recoveries of Loans Previously Charged-off 522 416
Other Operating Expense 2,627 2,146 7,634 6,516 Retained Earnings 27,375 29,257 24,258 Efficiency Ratio Calculation: 4 Net Loans Charged-off (710) (544)
Total Noninterest Expense 16,791 16,026 50,351 48,174 Unallocated ESOP Shares (5,151 Shares at September 30, 2019; 5,001 Shares at December 31, 2018 and 9,932 Shares at September 30, 2018) (100) (100) (200) Noninterest Expense $ 16,791 $ 16,908 $ 16,652 $ 16,881 $ 16,026 Provision for Loan Losses 1,445 1,961
INCOME BEFORE PROVISION FOR INCOME TAXES 12,685 11,735 34,809 34,376 Accumulated Other Comprehensive Loss (8,979) (13,810) (12,621) Less: Intangible Asset Amortization 61 44 79 65 65 Allowance for Loan Losses, End of Period $ 20,931 $ 20,003
Provision for Income Taxes 2,618 2,475 7,074 6,855 Treasury Stock, at Cost (4,632,657 Shares at September 30, 2019; 4,558,207 Shares at December 31, 2018 and 4,584,147 Shares at September 30, 2018) (80,271) (79,331) (79,425) Net Noninterest Expense $ 16,730 $ 16,864 $ 16,573 $ 16,816 $ 15,961 Key Asset Quality Ratios
NET INCOME $ 10,067 $ 9,260 $ 27,735 $ 27,521 Total Stockholders' Equity 292,228 269,584 264,810 Net Interest Income, Tax-Equivalent $ 22,647 $ 22,083 $ 21,494 $ 22,033 $ 21,373 Net Loans Charged-off to Average Loans, Annualized 0.04 % 0.03 %
Average Shares Outstanding 1: Total Liabilities and Stockholders' Equity $ 3,112,822 $ 2,988,334 $ 2,953,220 Noninterest Income 7,691 6,896 6,887 6,799 7,350 Provision for Loan Losses to Average Loans, Annualized 0.09 % 0.14 %
Basic 14,955 14,864 14,927 14,825 Less: Net Changes in Fair Value of Equity Invest. 146 76 (142) 114
Diluted 14,991 14,956 14,968 14,914 Net Gross Income $ 30,192 $ 28,979 $ 28,305 $ 28,974 $ 28,609
Per Common Share: Efficiency Ratio 55.41 % 58.19 % 58.55 % 58.04 % 55.79 %
Basic Earnings $ 0.67 $ 0.62 $ 1.86 $ 1.85
Diluted Earnings 0.67 0.62 1.85 1.84 Period-End Capital Information:
1 Share and Per Share Amounts have been restated for the September 27, 2019, 3% stock dividend. Total Stockholders' Equity (i.e. Book Value) $ 292,228 $ 284,649 $ 276,609 $ 269,584 $ 264,810
Book Value per Share 1 19.52 19.04 18.55 18.08 17.80
Goodwill and Other Intangible Assets, net 23,586 23,603 23,650 23,725 23,827
Tangible Book Value per Share 1,2 17.95 17.46 16.97 16.49 16.20
Capital Ratios:5
Tier 1 Leverage Ratio 10.04 % 9.88 % 9.73 % 9.61 % 9.67 %
Common Equity Tier 1 Capital Ratio  12.93 % 12.99 % 12.98 % 12.89 % 12.89 %
Tier 1 Risk-Based Capital Ratio 13.85 % 13.93 % 13.95 % 13.87 % 13.90 %
Total Risk-Based Capital Ratio 14.81 % 14.91 % 14.93 % 14.86 % 14.90 %
Assets Under Trust Admin. & Investment Mgmt. $ 1,485,116 $ 1,496,966 $ 1,483,259 $ 1,385,752 $ 1,551,289

 

Cision View original content:http://www.prnewswire.com/news-releases/arrow-reports-10-1-million-in-q3-net-income-and-year-over-year-loan-growth-of-9-9-300942930.html

SOURCE Arrow Financial Corporation

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