# EDGAR Filing Document

**Accession Number:** 0000717538
**File Stem:** 0000717538-23-000041
**Filing Date:** 2023-1
**Character Count:** 47687
**Document Hash:** e591ef7af686049f3f72651fcc225b21
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000717538-23-000041.hdr.sgml**: 20230130

**ACCESSION NUMBER**: 0000717538-23-000041

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230130

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230130

**DATE AS OF CHANGE**: 20230130

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ARROW FINANCIAL CORP
- **CENTRAL INDEX KEY:** 0000717538
- **STANDARD INDUSTRIAL CLASSIFICATION:** NATIONAL COMMERCIAL BANKS [6021]
- **IRS NUMBER:** 222448962
- **STATE OF INCORPORATION:** NY
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-12507
- **FILM NUMBER:** 23565837

**BUSINESS ADDRESS:**
- **STREET 1:** 250 GLEN ST
- **CITY:** GLENS FALLS
- **STATE:** NY
- **ZIP:** 12801
- **BUSINESS PHONE:** 5184154299

**MAIL ADDRESS:**
- **STREET 1:** 250 GLEN STREET
- **CITY:** GLENS FALLS
- **STATE:** NY
- **ZIP:** 12801

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** ARROW BANK CORP
- **DATE OF NAME CHANGE:** 19900710

?xml version="1.0" ? arow-20230130

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

Washington, D.C. 20549

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934**

**Date of Report: January 30, 2023**

**(Date of earliest event reported)**

**ARROW FINANCIAL CORPORATION**

**(Exact name of registrant as specified in its charter)**

<u>New York</u> <u>0-12507</u> <u>22-2448962</u> <br> (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)

---

| | | | | |
|:---|:---|:---|:---|:---|
| 250 Glen Street | Glens Falls | New York | 12801 | 12801 |
| (Address of principal executive offices) | (Address of principal executive offices) | (Address of principal executive offices) | (Zip Code) | (Zip Code) |
| Registrant's telephone number, including area code: | Registrant's telephone number, including area code: | Registrant's telephone number, including area code: | 518 | 745-1000 |

---

(Former name or former address, if changed since last report)

---

| | |
|:---|:---|
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |

---

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| Title of Each Class | Trading Symbol | Name of each exchange on which registered |
| Common Stock, Par Value $1.00 per share | AROW | NASDAQ Global Select Market |

---

---

| | |
|:---|:---|
| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |
| Emerging growth company | ☐ |
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act | ☐ |

---

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**Item 2.02. &nbsp;&nbsp;&nbsp;&nbsp;Results of Operations and Financial Condition.**

On January 30, 2023, Arrow Financial Corporation issued a press release containing unaudited financial information and accompanying discussion for the year-to-date period ended December 31, 2022. A copy of this press release is furnished as Exhibit 99 to this report on Form 8-K.

**Item 9.01.&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements and Exhibits.**

Exhibits:

<u>Exhibit No.</u> <u>Description</u>

<u>[Exhibit 99](ex99-earningsye2022.htm)</u> <u>[Arrow Financial Corporation Earnings Press Release dated January](ex99-earningsye2022.htm)[30](ex99-earningsye2022.htm)[, 202](ex99-earningsye2022.htm)[3](ex99-earningsye2022.htm)</u>

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
| | | **<u>ARROW FINANCIAL CORPORATION</u>** |
| | | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Registrant |
| Date: | January 30, 2023 | &nbsp;&nbsp;&nbsp;<u>/s/ Thomas J. Murphy</u> |
| | | Thomas J. Murphy<br>President and Chief Executive Officer |

---

## Ex-99

---

| | |
|:---|:---|
| ![newsreleaselogoallreda18a.jpg](newsreleaselogoallreda18a.jpg) | 250 Glen Street<br>Glens Falls, NY 12801 |
| ![newsreleaselogoallreda18a.jpg](newsreleaselogoallreda18a.jpg) | NASDAQ® Symbol: "AROW" <br>Website: arrowfinancial.com<br>Media Contact: Rachael Murray<br>Tel: (518) 415-4313 |

---

**<u>Arrow Reports $48.8 million in Net Income, Record Loan Growth of $315 million in 2022</u>**

GLENS FALLS, N.Y. (January 30, 2023) – Arrow Financial Corporation (NasdaqGS<sup>®</sup> – AROW) reported net income for fiscal year 2022 of $48.8 million, a decrease of $1.1 million, or 2.1%, compared to fiscal year 2021. Diluted earnings per share was $2.95 for the year ended December 31, 2022, as compared to $3.01 for the year ended December 31, 2021, a decrease of 2.0%. For the fourth quarter of 2022, net income was $12.1 million, an increase of $1.8 million, or 17.2%, from the fourth quarter of 2021. Diluted EPS was $0.73 for the fourth quarter of 2022, an increase of 17.7% from $0.62 from the comparable 2021 quarter.

**<u>2022 Annual Highlights</u>**

**Earnings:**

• Diluted earnings per Share (EPS) was $2.95.

• Net income was $48.8 million.

• Revenue for 2022 was $149.2 million.

• Return on average assets (ROA) was 1.21%.

• Return on average equity (ROE) was 13.55%.

• Net interest margin was 3.03%.

**Balance Sheet:**

**•** Total assets were $3.97 billion as of December 31, 2022.

**•** Total cash and cash equivalents were $64.7 million as of December 31, 2022.

**•** Total loans were $2.98 billion as of December 31, 2022.

**•** Total deposits were $3.50 billion as of December 31, 2022.

**•** Total borrowings were $74.8 million as of December 31, 2022.

**•** Loans to deposits and borrowings as of December 31, 2022 was 83.49%.

**Additional Items:**

**•** Book value per share was $21.36, down 4.9% from the prior-year level, primarily as a result of unrealized losses within the available-for-sale investment portfolio due to higher interest rates.

**•** Nonperforming assets of $12.6 million at December 31, 2022, represented 0.32% of period-end assets, an increase from 0.29% at December 31, 2021.

Net income for 2022 was $48.8 million, down from $49.9 million for 2021. The decrease from the prior year was primarily the result of an increase in net interest income of $8.0 million, offset by a $4.5 million increase in the provision for credit loss, a decrease in Paycheck Protection Program (PPP) revenue earned of $6.2 million and a $2.3 million decrease in the gain on the sale of loans.

"Arrow Financial Corporation delivered another year of strong performance in 2022, with record loan growth, excellent earnings and sustained profitability. During 2022, we made key investments in our technology and our Team, with the upgrade of our core banking system and the payment of a special employee bonus for outstanding performance, respectively," said Arrow President and CEO Thomas J.

------

Murphy. "With the economic headwinds anticipated for 2023, we will continue to focus on what we do best: organic growth, expense management, and deepening and growing relationships. Thank you to the Arrow Team for their continued commitment to our customers and the communities we serve."

The 2022 system upgrade reflects our strategic focus on a strong technology foundation and this investment paves the way for customer-facing enhancements and more efficient and improved internal operations as we continue to work toward fully leveraging the capabilities of our new bank core system.

Additionally in 2022, Arrow further optimized its branch network with the December consolidation of Glens Falls National Bank's Aviation Road Office into nearby Queensbury locations. Meanwhile, construction on our downtown Glens Falls headquarters advanced; once completed later this year, the energy-efficient space will improve both the employee and customer experience.

Please see below for further quarter- and year-end detail.

**<u>Income Statement</u>**

**• Net Interest Income:** Net interest income for the year ended December 31, 2022 was $118.3 million, an increase of $8.0 million, or 7.2%, from the prior year. Interest and fees on loans were $113.0 million, an increase of 7.6% from the $105.0 million for the year ended December 31, 2021. Interest and fees related to PPP loans, included in the $113.0 million, were $1.6 million. In 2021, $7.8 million of income was earned on PPP loans. Interest expense for the year ended December 31, 2022 was $11.3 million. This is an increase of $6.1 million, or 117.7%, from the $5.2 million in expense for the prior-year period.

**• Net Interest Margin:** Net interest margin was 3.03% for the year ended December 31, 2022, as compared to 2.97% for the year ended December 31, 2021. In the fourth quarter of 2022, the net interest margin was 3.08%, as compared to 2.77% for the fourth quarter of 2021. The increase in net interest margin was due to a variety of factors, including higher market rates impacting asset yields and a reduction in cash balances. Net interest margin in 2022, excluding PPP income, increased to 3.00% from 2.84% in the prior year. The cost of interest-bearing liabilities increased primarily due to the repricing of time deposits and municipal deposits.

---

| | | |
|:---|:---|:---|
| | Twelve Months Ended | Twelve Months Ended |
| | December 31, 2022 | December 31, 2021 |
| Interest and Dividend Income | $129651 | $115550 |
| Interest Expense | 11308 | 5195 |
| Net Interest Income | 118343 | 110355 |
| Average Earning Assets<sup>(1)</sup> | 3902077 | 3716856 |
| Average Interest-Bearing Liabilities | 2834266 | 2727441 |
| Yield on Earning Assets<sup>(1)</sup> | 3.32% | 3.11% |
| Cost of Interest-Bearing Liabilities | 0.40 | 0.19 |
| Net Interest Spread | 2.92 | 2.92 |
| Net Interest Margin | 3.03 | 2.97 |
| Income Earned on PPP Loans included in Net Interest Income | $1589 | $7811 |
| Net Interest Income excluding PPP loans | 116754 | 102544 |
| Net Interest Margin excluding PPP loans | 3.00% | 2.84% |
| <sup>(1)</sup> Includes Nonaccrual Loans. |  |  |

---

------

**• Provision for Credit Losses:** For 2022, the provision for credit losses related to the loan portfolio was $4.8 million, compared to $272 thousand in 2021. The key drivers affecting the provision were strong loan growth, increase in net charge-offs and a deterioration in forecasted economic conditions.

**• Noninterest Income:** Noninterest income was $30.9 million for the year ended December 31, 2022, a decrease of 4.5%, as compared to $32.4 million for the year ended December 31, 2021. Income from fiduciary activities in 2022 was $9.7 million, a decrease of $431 thousand from 2021, driven by market conditions. Fees and other services to customers increased $164 thousand to $11.6 million in 2022. Gain on sales of loans decreased $2.3 million from 2021 to $83 thousand in 2022. Other operating income increased $814 thousand from 2021 due to gains related to other investments and bank-owned life insurance proceeds.

• **Noninterest Expense:** Noninterest expense for the year ended December 31, 2022 increased by $3.5 million, or 4.5%, to $81.5 million, as compared to $78.0 million in 2021. The largest component of noninterest expense is salaries and benefits paid to our employees, which totaled $47.0 million in 2022. Salaries and benefits increased $2.2 million, or 4.9%, from the prior year. Technology and and equipment expense were $16.1 million, an increase of $1.2 million or 8.4%, from the prior year reflects our continued commitment to innovation. Noninterest expense for the fourth quarter of 2022 decreased $68 thousand, or 0.3%, as compared to the fourth quarter of 2021.

**• Provision for Income Taxes:** The provision for income taxes for 2022 was $14.1 million, compared to $14.5 million for 2021. The effective income tax rates for 2022 and 2021 were 22.4% and 22.6%, respectively.

**<u>Balance Sheet</u>**

**• Total Assets:** Total assets were $3.97 billion at December 31, 2022, a decrease of $58.4 million, or 1.5%, compared to December 31, 2021.

**• Cash and Cash Equivalents:** Total cash and cash equivalents were $64.7 million at December 31, 2022, a decrease of $393.0 million, or 85.9%, compared to December 31, 2021.

**• Investments:** Total investments were $757.1 million at December 31, 2022, a decrease of $5.9 million, or 0.8%, compared to December 31, 2021. In 2022, the rising interest rate environment resulted in an increase of unrealized losses versus the prior year.

**• Loans:** At December 31, 2022, total loan balances reached $3.0 billion, up $315 million, or 11.8%, from the prior-year level. Loan growth for the fourth quarter was $58.4 million. The consumer loan portfolio grew by $144.6 million, or 15.7%, over the balance at December 31, 2021, primarily as a result of continued strength in the indirect automobile lending program. The residential real estate loan portfolio increased $124.8 million, or 13.2%, from the prior year. Commercial loans, including commercial real estate, increased $45.9 million, or 5.7%, over the balances at December 31, 2021.

**• Allowance for Credit Losses:** The allowance for credit losses was $30.0 million at December 31, 2022, an increase of $2.7 million from December 31, 2021. The allowance for credit losses represents 1.00% of loans outstanding, a decrease from 1.02% at year-end 2021. When expressed as a percentage of nonperforming loans, the allowance for credit loss coverage ratio was 250.0% at year-end 2022 as compared to 233.9% at year-end 2021. Asset quality remained solid at December 31, 2022. Net loan losses, expressed as an annualized percentage of average loans outstanding, were 0.08% for the year ended December 31, 2022, as compared to 0.03% for the prior year. Nonperforming assets of $12.6 million at December 31, 2022, represented 0.32% of period-end assets, compared to $11.8 million or 0.29% at December 31, 2021.

------

**• Deposits:** At December 31, 2022, total deposit balances were $3.5 billion, a decrease of $52.1 million, or 1.5%, from the prior-year level. Non-municipal deposits decreased by $26.6 million and municipal deposits decreased by $25.5 million as compared to December 31, 2021. Noninterest-bearing deposits grew by $26.6 million, or 3.3%, during 2022, and represented 23.9% of total deposits at year-end, as compared to the prior-year level of 22.8%. At December 31, 2022, total time deposits decreased $5.1 million from the prior-year level. Deposits decreased in the fourth quarter by $296.7 million. Non-municipal and municipal deposits decreased by $149.0 million and $147.7 million, respectively in the fourth quarter. The decline is deposits was primarily the result of both increased consumer spending and pressure from competitive rate pricing.

**• Borrowings:** Total borrowings were $74.8 million at December 31, 2022, an increase of $9.8 million, or 15.1%, compared to December 31, 2021.

**• Capital:** Total shareholders' equity was $353.5 million at period-end, a decrease of $17.6 million, or 4.8%, from the year-end 2021 balance. Arrow's regulatory capital ratios remained strong in 2022. At December 31, 2022, Arrow's Common Equity Tier 1 Capital Ratio was 13.32% and Total Risk-Based Capital Ratio was 15.11%. The capital ratios of Arrow and both its subsidiary banks continued to significantly exceed the "well capitalized" regulatory standards.

**<u>Additional Commentary</u>**

**• Cash and Stock Dividends:** On December 15, 2022, Arrow distributed a cash dividend of $0.27 per share. Additionally, a 3% stock dividend was distributed on September 23, 2022.

**• Industry Recognition:** In the fourth quarter, both of Arrow's banking subsidiaries, Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company, maintained their BauerFinancial, Inc. 5-Star "Exceptional Performance" Bank ratings for the 15th and 13th consecutive years, respectively.

——————

**<u>About Arrow:</u>** 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 North Country Investment Advisers, Inc. and Upstate Agency, LLC.

**<u>Non-GAAP Financial Measures Reconciliation:</u>** 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."

**<u>Safe Harbor Statement:</u>** 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"

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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, 2021, and other filings with the Securities and Exchange Commission.

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**ARROW FINANCIAL CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF INCOME**

(In Thousands, Except Per Share Amounts - Unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three Months Ended | Three Months Ended | Twelve Months Ended | Twelve Months Ended |
| | December 31, | December 31, | December 31, | December 31, |
| | 2022 | 2021 | 2022 | 2021 |
| **INTEREST AND DIVIDEND INCOME** |  |  |  |  |
| Interest and Fees on Loans | 30719 | 25631 | $112982 | $104985 |
| Interest on Deposits at Banks | 1274 | 214 | 3100 | 565 |
| Interest and Dividends on Investment Securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Fully Taxable | 3121 | 1678 | 10357 | 6487 |
| &nbsp;&nbsp;&nbsp;Exempt from Federal Taxes | 790 | 831 | 3212 | 3513 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Interest and Dividend Income | 35904 | 28354 | 129651 | 115550 |
| **INTEREST EXPENSE** |  |  |  |  |
| Interest-Bearing Checking Accounts | 344 | 165 | 973 | 731 |
| Savings Deposits | 4101 | 412 | 7879 | 1904 |
| Time Deposits over $250,000 | 226 | 33 | 369 | 261 |
| Other Time Deposits | 234 | 123 | 604 | 632 |
| Federal Funds Purchased and <br> Securities Sold Under Agreements to Repurchase |  |  |  | 3 |
| Federal Home Loan Bank Advances | 200 | 197 | 605 | 783 |
| Junior Subordinated Obligations Issued to <br> Unconsolidated Subsidiary Trusts | 172 | 173 | 685 | 686 |
| Interest on Financing Leases | 48 | 49 | 193 | 195 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Interest Expense | 5325 | 1152 | 11308 | 5195 |
| **NET INTEREST INCOME** | 30579 | 27202 | 118343 | 110355 |
| Provision for Credit Losses | 1409 | 558 | 4798 | 272 |
| **NET INTEREST INCOME AFTER PROVISION FOR<br> CREDIT LOSSES** | 29170 | 26644 | 113545 | 110083 |
| **NONINTEREST INCOME** |  |  |  |  |
| Income From Fiduciary Activities | 2257 | 2604 | 9711 | 10142 |
| Fees for Other Services to Customers | 2710 | 2968 | 11626 | 11462 |
| Insurance Commissions | 1680 | 1645 | 6463 | 6487 |
| Net Gain (Loss) on Securities | 48 | (139) | 427 | 111 |
| Net Gain on Sales of Loans | 3 | 142 | 83 | 2393 |
| Other Operating Income | 467 | 369 | 2588 | 1774 |
| &nbsp;&nbsp;&nbsp;Total Noninterest Income | 7165 | 7589 | 30898 | 32369 |
| **NONINTEREST EXPENSE** |  |  |  |  |
| Salaries and Employee Benefits | 11603 | 11438 | 47003 | 44798 |
| Occupancy Expenses, Net | 1481 | 1334 | 6202 | 5814 |
| Technology and Equipment Expense | 4316 | 3868 | 16118 | 14870 |
| FDIC Assessments | 283 | 278 | 1176 | 1042 |
| Other Operating Expense | 3109 | 3942 | 11031 | 11524 |
| &nbsp;&nbsp;&nbsp;Total Noninterest Expense | 20792 | 20860 | 81530 | 78048 |
| **INCOME BEFORE PROVISION FOR INCOME TAXES** | 15543 | 13373 | 62913 | 64404 |
| Provision for Income Taxes | 3456 | 3064 | 14114 | 14547 |
| **NET INCOME** | 12087 | 10309 | $48799 | $49857 |
| **Average Shares Outstanding**<sup>1</sup>**:** |  |  |  |  |
| Basic | 16535 | 16509 | 16513 | 16499 |
| Diluted | 16589 | 16574 | 16562 | 16555 |
| **Per Common Share:** |  |  |  |  |
| Basic Earnings | 0.73 | 0.62 | $2.95 | $3.02 |
| Diluted Earnings | 0.73 | 0.62 | 2.95 | 3.01 |
| <sup>1</sup> Share and per share data have been restated for the September 23, 2022, 3% stock dividend. | <sup>1</sup> Share and per share data have been restated for the September 23, 2022, 3% stock dividend. | <sup>1</sup> Share and per share data have been restated for the September 23, 2022, 3% stock dividend. |  |  |

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**ARROW FINANCIAL CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

(In Thousands, Except Share and Per Share Amounts - Unaudited)

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| | | |
|:---|:---|:---|
| | December 31, 2022 | December 31, 2021 |
| **ASSETS** |  |  |
| Cash and Due From Banks | $31886 | $26978 |
| Interest-Bearing Deposits at Banks | 32774 | 430718 |
| Investment Securities: |  |  |
| &nbsp;&nbsp;&nbsp;Available-for-Sale | 573495 | 559316 |
| &nbsp;&nbsp;Held-to-Maturity (Approximate Fair Value of $171,623 at <br>&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2022, and $201,292 at December 31, 2021) | 175364 | 196566 |
| &nbsp;&nbsp;&nbsp;Equity Securities | 2174 | 1747 |
| &nbsp;&nbsp;&nbsp;Other Investments | 6064 | 5380 |
| Loans | 2983207 | 2667941 |
| &nbsp;&nbsp;&nbsp;Allowance for Credit Losses | (29952) | (27281) |
| &nbsp;&nbsp;&nbsp;Net Loans | 2953255 | 2640660 |
| Premises and Equipment, Net | 56491 | 46217 |
| Goodwill | 21873 | 21873 |
| Other Intangible Assets, Net | 1500 | 1918 |
| Other Assets | 114633 | 96579 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Assets | $3969509 | $4027952 |
| **LIABILITIES** |  |  |
| Noninterest-Bearing Deposits | $836871 | $810274 |
| Interest-Bearing Checking Accounts | 997694 | 994391 |
| Savings Deposits | 1454364 | 1531287 |
| Time Deposits over $250,000 | 76224 | 82811 |
| Other Time Deposits | 133211 | 131734 |
| &nbsp;&nbsp;&nbsp;Total Deposits | 3498364 | 3550497 |
| Federal Home Loan Bank Overnight Advances | 27000 |  |
| Federal Home Loan Bank Term Advances | 27800 | 45000 |
| Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts | 20000 | 20000 |
| Finance Leases | 5119 | 5169 |
| Other Liabilities | 37688 | 36100 |
| &nbsp;&nbsp;&nbsp;Total Liabilities | 3615971 | 3656766 |
| **STOCKHOLDERS' EQUITY** |  |  |
| Preferred Stock, $1 Par Value, 1,000,000 Shares Authorized |  |  |
| Common Stock, $1 Par Value; 30,000,000 Shares Authorized (21,423,992 Shares Issued at December 31, 2022, and 20,800,144 Shares Issued at December 31, 2021) | 21424 | 20800 |
| Additional Paid-in Capital | 400270 | 377996 |
| Retained Earnings | 65401 | 54078 |
| Accumulated Other Comprehensive (Loss) Income | (49655) | 347 |
| Treasury Stock, at Cost (4,872,355 Shares at December 31, 2022, and 4,759,414 Shares at December 31, 2021) | (83902) | (82035) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Stockholders' Equity | 353538 | 371186 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Liabilities and Stockholders' Equity | $3969509 | $4027952 |

---

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**Arrow Financial Corporation**

**Selected Quarterly Information**

(Dollars In Thousands, Except Per Share Amounts - Unaudited)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Quarter Ended** | <u>12/31/2022</u> | <u>9/30/2022</u> | <u>6/30/2022</u> | <u>3/31/2022</u> | <u>12/31/2021</u> |
| Net Income | $12087 | $12163 | $11974 | $12575 | $10309 |
| **Transactions in Net Income (Net of Tax):** |  |  |  |  |  |
| Net Changes in Fair Value of Equity Investments | 35 | 70 | 114 | 96 | (104) |
| **Share and Per Share Data:**<sup>1</sup> |  |  |  |  |  |
| Period End Shares Outstanding | 16552 | 16523 | 16503 | 16493 | 16522 |
| Basic Average Shares Outstanding | 16535 | 16512 | 16494 | 16511 | 16509 |
| Diluted Average Shares Outstanding | 16589 | 16558 | 16535 | 16566 | 16574 |
| Basic Earnings Per Share | $0.73 | $0.74 | $0.72 | $0.76 | $0.62 |
| Diluted Earnings Per Share | 0.73 | 0.74 | 0.72 | 0.76 | 0.62 |
| Cash Dividend Per Share | 0.270 | 0.262 | 0.262 | 0.262 | 0.252 |
| **Selected Quarterly Average Balances:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest-Bearing Deposits at Banks | $143499 | $209001 | $232545 | $410644 | $551890 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment Securities | 845859 | 821052 | 822112 | 797347 | 681732 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans | 2951547 | 2872066 | 2804180 | 2678796 | 2660665 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deposits | 3614945 | 3598519 | 3569754 | 3582256 | 3590766 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other Borrowed Funds | 63304 | 50125 | 50140 | 68596 | 70162 |
| &nbsp;&nbsp;&nbsp;&nbsp;Shareholders' Equity | 351402 | 361675 | 357228 | 370264 | 364409 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Assets | 4074028 | 4047738 | 4012999 | 4054943 | 4060540 |
| Return on Average Assets, annualized | 1.18% | 1.19% | 1.20% | 1.26% | 1.01% |
| Return on Average Equity, annualized | 13.65% | 13.34% | 13.44% | 13.77% | 11.22% |
| Return on Average Tangible Equity, annualized <sup>2</sup> | 14.62% | 14.27% | 14.40% | 14.72% | 12.01% |
| Average Earning Assets | 3940905 | 3902119 | 3858837 | 3886787 | 3894287 |
| Average Paying Liabilities | 2891092 | 2781985 | 2808287 | 2855884 | 2841304 |
| Interest Income | 35904 | 34207 | 30593 | 28947 | 28354 |
| Tax-Equivalent Adjustment <sup>3</sup> | 279 | 268 | 269 | 270 | 285 |
| Interest Income, Tax-Equivalent <sup>3</sup> | 36183 | 34475 | 30862 | 29217 | 28639 |
| Interest Expense | 5325 | 3306 | 1555 | 1122 | 1152 |
| Net Interest Income | 30579 | 30901 | 29038 | 27825 | 27202 |
| Net Interest Income, Tax-Equivalent <sup>3</sup> | 30858 | 31169 | 29307 | 28095 | 27487 |
| Net Interest Margin, annualized | 3.08% | 3.14% | 3.02% | 2.90% | 2.77% |
| Net Interest Margin, Tax-Equivalent, annualized <sup>3</sup> | 3.11% | 3.17% | 3.05% | 2.93% | 2.80% |
| **Efficiency Ratio Calculation:** <sup>4</sup> |  |  |  |  |  |
| Noninterest Expense | $20792 | $21448 | $20345 | $18945 | $20860 |
| Less: Intangible Asset Amortization | 47 | 48 | 48 | 49 | 52 |
| &nbsp;&nbsp;&nbsp;Net Noninterest Expense | $20745 | $21400 | $20297 | $18896 | $20808 |
| Net Interest Income, Tax-Equivalent | $30858 | $31169 | $29307 | $28095 | $27487 |
| Noninterest Income | 7165 | 7827 | 7744 | 8162 | 7589 |
| Less: Net Gain (Loss) on Securities | 48 | 95 | 154 | 130 | (139) |
| &nbsp;&nbsp;&nbsp;Net Gross Income | $37975 | $38901 | $36897 | $36127 | $35215 |
| Efficiency Ratio | 54.63% | 55.01% | 55.01% | 52.30% | 59.09% |
| **Period-End Capital Information:** |  |  |  |  |  |
| Total Stockholders' Equity (i.e. Book Value) | $353538 | $345550 | $356498 | $357243 | $371186 |
| Book Value per Share <sup>1</sup> | 21.36 | 20.91 | 21.60 | 21.66 | 22.47 |
| Goodwill and Other Intangible Assets, net | 23373 | 23477 | 23583 | 23691 | 23791 |
| Tangible Book Value per Share <sup>1,2</sup> | 19.95 | 19.49 | 20.17 | 20.22 | 21.03 |
| **Capital Ratios:**<sup>5</sup> |  |  |  |  |  |
| Tier 1 Leverage Ratio | 9.80% | 9.71% | 9.60% | 9.37% | 9.20% |
| Common Equity Tier 1 Capital Ratio  | 13.32% | 13.14% | 13.14% | 13.48% | 13.77% |
| Tier 1 Risk-Based Capital Ratio | 14.01% | 13.85% | 13.86% | 14.23% | 14.55% |
| Total Risk-Based Capital Ratio | 15.11% | 14.93% | 14.93% | 15.33% | 15.69% |
| **Assets Under Trust Admin. & Investment Mgmt.** | $1606132 | $1515994 | $1589178 | $1793747 | $1851101 |

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**Arrow Financial Corporation**

**Selected Quarterly Information - Continued**

(Dollars In Thousands, Except Per Share Amounts - Unaudited)

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Footnotes:** | **Footnotes:** | **Footnotes:** | | | | |
| **1.** | Share and per share data have been restated for the September 23, 2022, 3% stock dividend. | Share and per share data have been restated for the September 23, 2022, 3% stock dividend. | Share and per share data have been restated for the September 23, 2022, 3% stock dividend. | Share and per share data have been restated for the September 23, 2022, 3% stock dividend. | Share and per share data have been restated for the September 23, 2022, 3% stock dividend. | Share and per share data have been restated for the September 23, 2022, 3% stock dividend. |
| **2.** | Non-GAAP Financial Measure Reconciliation: Tangible Book Value, Tangible Equity, and Return on 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. | Non-GAAP Financial Measure Reconciliation: Tangible Book Value, Tangible Equity, and Return on 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. | Non-GAAP Financial Measure Reconciliation: Tangible Book Value, Tangible Equity, and Return on 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. | Non-GAAP Financial Measure Reconciliation: Tangible Book Value, Tangible Equity, and Return on 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. | Non-GAAP Financial Measure Reconciliation: Tangible Book Value, Tangible Equity, and Return on 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. | Non-GAAP Financial Measure Reconciliation: Tangible Book Value, Tangible Equity, and Return on 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. |
|  |  | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | 12/31/2021 |
|  | Total Stockholders' Equity (GAAP) | $353538 | $345550 | $356498 | $357243 | $371186 |
|  | Less: Goodwill and Other Intangible assets, net | 23373 | 23477 | 23583 | 23691 | 23791 |
|  | Tangible Equity (Non-GAAP) | $330165 | $322073 | $332915 | $333552 | $347395 |
|  | Period End Shares Outstanding | 16552 | 16523 | 16503 | 16493 | 16522 |
|  | Tangible Book Value per Share (Non-GAAP) | $19.95 | $19.49 | $20.17 | $20.22 | $21.03 |
|  | Net Income | 12087 | 12163 | 11974 | 12575 | 10309 |
|  | Return on Tangible Equity (Net Income/Tangible Equity - Annualized) | 14.62% | 14.27% | 14.40% | 14.72% | 12.01% |
| **3.** | Non-GAAP Financial Measure Reconciliation: Net Interest Margin 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. | Non-GAAP Financial Measure Reconciliation: Net Interest Margin 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. | Non-GAAP Financial Measure Reconciliation: Net Interest Margin 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. | Non-GAAP Financial Measure Reconciliation: Net Interest Margin 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. | Non-GAAP Financial Measure Reconciliation: Net Interest Margin 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. | Non-GAAP Financial Measure Reconciliation: Net Interest Margin 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. |
|  |  | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | 12/31/2021 |
|  | Interest Income (GAAP) | $35904 | $34207 | $30593 | $28947 | $28354 |
|  | Add: Tax Equivalent Adjustment (Non-GAAP) | 279 | 268 | 269 | 270 | 285 |
|  | Interest Income - Tax Equivalent (Non-GAAP) | $36183 | $34475 | $30862 | $29217 | $28639 |
|  | Net Interest Income (GAAP) | $30579 | $30901 | $29038 | $27825 | $27202 |
|  | Add: Tax-Equivalent adjustment (Non-GAAP) | 279 | 268 | 269 | 270 | 285 |
|  | Net Interest Income - Tax Equivalent (Non-GAAP) | $30858 | $31169 | $29307 | $28095 | $27487 |
|  | Average Earning Assets | 3940905 | 3902119 | 3858837 | 3886787 | 3894287 |
|  | Net Interest Margin (Non-GAAP)\* | 3.11% | 3.17% | 3.05% | 2.93% | 2.80% |
| **4.** | Non-GAAP Financial Measure Reconciliation: 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). | Non-GAAP Financial Measure Reconciliation: 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). | Non-GAAP Financial Measure Reconciliation: 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). | Non-GAAP Financial Measure Reconciliation: 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). | Non-GAAP Financial Measure Reconciliation: 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). | Non-GAAP Financial Measure Reconciliation: 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). |
| **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 December 31, 2022 CET1 ratio listed in the tables (i.e., 13.32%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%). | 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 December 31, 2022 CET1 ratio listed in the tables (i.e., 13.32%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%). | 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 December 31, 2022 CET1 ratio listed in the tables (i.e., 13.32%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%). | 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 December 31, 2022 CET1 ratio listed in the tables (i.e., 13.32%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%). | 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 December 31, 2022 CET1 ratio listed in the tables (i.e., 13.32%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%). | 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 December 31, 2022 CET1 ratio listed in the tables (i.e., 13.32%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%). |
|  |  | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | 12/31/2021 |
|  | Total Risk Weighted Assets | 2883902 | 2856224 | 2790520 | 2661952 | 2552812 |
|  | Common Equity Tier 1 Capital | 384003 | 375394 | 366798 | 358738 | 351497 |
|  | Common Equity Tier 1 Ratio | 13.32% | 13.14% | 13.14% | 13.48% | 13.77% |
| \* Quarterly ratios have been annualized | \* Quarterly ratios have been annualized |  |  |  |  |  |

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**Arrow Financial Corporation**

**Average Consolidated Balance Sheets and Net Interest Income Analysis**

(Dollars in Thousands - Unaudited)

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| Years Ended December 31: | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 |
|  |  | Interest | Rate |  | Interest | Rate |
|  | Average | Income/ | Earned/ | Average | Income/ | Earned/ |
|  | Balance | Expense | Paid | Balance | Expense | Paid |
| Interest-Bearing Deposits at Banks | $252835 | $3100 | 1.23% | $418488 | 565 | 0.14% |
| Investment Securities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fully Taxable | 648540 | 10357 | 1.60% | 470133 | 6487 | 1.38% |
| &nbsp;&nbsp;&nbsp;&nbsp;Exempt from Federal Taxes | 173184 | 3212 | 1.85% | 185072 | 3513 | 1.90% |
| Loans | 2827518 | 112982 | 4.00% | 2643163 | 104985 | 3.97% |
| Total Earning Assets | 3902077 | 129651 | 3.32% | 3716856 | 115550 | 3.11% |
| Allowance for Credit Losses | (27954) |  |  | (27187) |  |  |
| Cash and Due From Banks | 30462 |  |  | 36464 |  |  |
| Other Assets | 142895 |  |  | 156509 |  |  |
| Total Assets | $4047480 |  |  | $3882642 |  |  |
| Deposits: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest-Bearing Checking Accounts | $1038751 | 973 | 0.09% | $926875 | 731 | 0.08% |
| &nbsp;&nbsp;&nbsp;&nbsp;Savings Deposits | 1549278 | 7879 | 0.51% | 1496906 | 1904 | 0.13% |
| &nbsp;&nbsp;&nbsp;&nbsp;Time Deposits of $250,000 or More | 55690 | 369 | 0.66% | 87033 | 261 | 0.30% |
| &nbsp;&nbsp;&nbsp;&nbsp;Other Time Deposits | 132541 | 604 | 0.46% | 141677 | 632 | 0.45% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Interest-Bearing Deposits | 2776260 | 9825 | 0.35% | 2652491 | 3528 | 0.13% |
| Short-Term Borrowings | 2124 | 92 | 4.33% | 4768 | 3 | 0.06% |
| FHLBNY Term Advances and Other Long-Term Debt | 50750 | 1198 | 2.36% | 65000 | 1469 | 2.26% |
| Finance Leases | 5132 | 193 | 3.76% | 5182 | 195 | 3.76% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Interest-Bearing Liabilities | 2834266 | 11308 | 0.40% | 2727441 | 5195 | 0.19% |
| Demand Deposits | 815218 |  |  | 767671 |  |  |
| Other Liabilities | 37901 |  |  | 33773 |  |  |
| Total Liabilities | 3687385 |  |  | 3528885 |  |  |
| Stockholders' Equity | 360095 |  |  | 353757 |  |  |
| Total Liabilities and Stockholders' Equity | $4047480 |  |  | $3882642 |  |  |
| Net Interest Income |  | $118343 |  |  | $110355 |  |
| Net Interest Spread |  |  | 2.92% |  |  | 2.92% |
| Net Interest Margin |  |  | 3.03% |  |  | 2.97% |

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**Arrow Financial Corporation**

**Consolidated Financial Information**

(Dollars in Thousands - Unaudited)

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| | | |
|:---|:---|:---|
| **<u>Quarter Ended:</u>** | **12/31/2022** | **12/31/2021** |
| **Loan Portfolio** | | |
| Commercial Loans | $140293 | $172518 |
| Commercial Real Estate Loans | 707022 | 628929 |
| &nbsp;&nbsp;&nbsp;&nbsp;Subtotal Commercial Loan Portfolio | 847315 | 801447 |
| Consumer Loans | 1065135 | 920556 |
| Residential Real Estate Loans | 1070757 | 945938 |
| &nbsp;&nbsp;&nbsp;Total Loans | $2983207 | $2667941 |
| **Allowance for Credit Losses** |  |  |
| Allowance for Credit Losses, Beginning of Quarter | $29232 | $26956 |
| Loans Charged-off | (1261) | (719) |
| Recoveries of Loans Previously Charged-off | 572 | 486 |
| &nbsp;&nbsp;&nbsp;Net Loans Charged-off | (689) | (233) |
| Provision for Credit Losses | 1409 | 558 |
| &nbsp;&nbsp;&nbsp;Allowance for Credit Losses, End of Quarter | $29952 | $27281 |
| **Nonperforming Assets** |  |  |
| Nonaccrual Loans | $10757 | $10764 |
| Loans Past Due 90 or More Days and Accruing | 1157 | 823 |
| Loans Restructured and in Compliance with Modified Terms | 69 | 77 |
| &nbsp;&nbsp;&nbsp;Total Nonperforming Loans | 11983 | 11664 |
| Repossessed Assets | 593 | 126 |
| Other Real Estate Owned |  |  |
| &nbsp;&nbsp;&nbsp;Total Nonperforming Assets | $12576 | $11790 |
| **Key Asset Quality Ratios** |  |  |
| Net Loans Charged-off to Average Loans, Quarter-to-date<br> Annualized | 0.09% | 0.03% |
| Provision for Credit Losses to Average Loans, Quarter-to-date<br> Annualized | 0.19% | 0.08% |
| Allowance for Credit Losses to Period-End Loans | 1.00% | 1.02% |
| Allowance for Credit Losses to Period-End Nonperforming Loans | 249.95% | 233.89% |
| Nonperforming Loans to Period-End Loans | 0.40% | 0.44% |
| Nonperforming Assets to Period-End Assets | 0.32% | 0.29% |
| **<u>Twelve-Month Period Ended:</u>** |  |  |
| **Allowance for Credit Losses** |  |  |
| Allowance for Credit Losses, Beginning of Year | $27281 | $29232 |
| Impact of the Adoption of ASU 2016-13 |  | (1300) |
| Loans Charged-off | (4143) | (2239) |
| Recoveries of Loans Previously Charged-off | 2016 | 1316 |
| &nbsp;&nbsp;&nbsp;Net Loans Charged-off | (2127) | (923) |
| Provision for Credit Losses | 4798 | 272 |
| &nbsp;&nbsp;&nbsp;Allowance for Credit Losses, End of Year | $29952 | $27281 |
| **Key Asset Quality Ratios** |  |  |
| Net Loans Charged-off to Average Loans | 0.08% | 0.03% |
| Provision for Credit Losses to Average Loans | 0.17% | 0.01% |

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