ANNUAL REVIEW
Performance Comparisons
$2.36
$2.43
$2.64
$2,605
$2,760
$3,689
$3,184
$2,988
$1.92
$1.75
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
DILUTED EARNINGS PER SHARE
ASSETS
For the 12 Months Ended December 31*
As of December 31
($ in Millions)
$1.02
$.99
$.94
$2,245
$2,346
$2,117
$3,235
$2,616
$.89
$.86
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
CASH DIVIDENDS PAID PER SHARE
DEPOSITS
For the 12 Months Ended December 31*
As of December 31
($ in Millions)
$17.55
$19.53
$21.55
$334
$302
$15.35
$16.40
$233
$250
$270
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
BOOK VALUE PER SHARE
SHAREHOLDERS’ EQUITY
As of December 31*
As of December 31
($ in Millions)
*Per share amounts have been restated for stock dividends distributed.
Fellow Shareholders:
2020 FINANCIAL HIGHLIGHTS
Arrow Financial Corporation
remained strong through
2020, rising to meet
challenges presented by
the COVID-19 pandemic.
Through it all, Arrow
Financial Corporation and
its Family of Companies
have been here for our
customers, our employees and the communities
we serve.
As we look back, we are proud to have delivered
temporary financial assistance, stimulus program
support, Paycheck Protection Program loans
and charitable contributions when it was most
needed. We continued to operate with a focus
on health and safety, ensuring that essential
banking services were available, even as we
were all socially distant.
Additionally, 2020 was a year of continued
shareholder value with record earnings, steady
growth, sustained profitability and credit quality.
Our measured and thoughtful approach keeps
us focused on long-term opportunities that will
help us maintain our strong organic growth as
we continue to face an uncertain future.
Among the highlights from 2020, we:
• Provided PPP loans to more than 1,500 small
businesses, allowing them to remain open, or
reopen, which helped them pay their employees
• Opened our 12th Saratoga National Bank
branch in Latham, New York and optimized our
Glens Falls National Bank branch network by
consolidating overlapping offices in Queensbury
and Greenwich, giving us 40 branches in eight
counties within our combined banking network
• Opened a Capital Region Business Develop-
ment Office in Latham, New York
• Enhanced our customer experience with
website upgrades and the formation of a Cus-
tomer Experience Unit of Retail Banking during
these very difficult times
Net Income: $40.8 million, up 8.9%
Total Loans: $2.6 billion, up 8.8%
Total Deposits: $3.2 billion, up 23.6%
Total Assets: $3.69 billion, up 15.8%
Return on Average Equity: 12.77%
Return on Average Assets: 1.17%
Return on Tangible Equity: 13.78%
Stock Dividend: 3% distributed in Sept.
Current Quarterly Cash Dividend: $0.26
Book Value Per Share: Increase of 10.3%
Shareholders’ Equity: Increase of 10.8%
• Maintained 5-Star “Superior” ratings from
BauerFinancial for both Glens Falls National
Bank and Saratoga National Bank.
• Gave back almost $470,000 in charitable con-
tributions and our Arrow Team donated more
than 3,300 volunteer hours to our communities.
As these challenging times continue into 2021,
I need to thank our Team for their commitment
to safety while also demonstrating flexibility in
adapting to the changing needs of our cus-
tomers. The dedication of our Arrow Team is the
driving force behind all of our accomplishments.
Their passion for improving our customer expe-
rience, serving our communities, and delivering
value for shareholders keeps us competitive and
strong.
Thank you for your investment in Arrow Financial
Corporation. We appreciate your trust and sup-
port and will continue to work in partnership with
you toward creating value for your investment.
Tom Murphy
President and CEO
Consolidated Statements of Income (Unaudited)
Years Ended December 31
(in thousands, except per-share amounts)
2016
2017
2018
2019
2020
Interest and Dividend Income
Interest Expense
$ 76,915
5,356
$ 84,657
7,006
$ 96,503
12,485
$ 109,759
21,710
$ 111,896
12,694
Net Interest Income
Provision for Loan Losses
Net Interest Income after
Provision for Loan Losses
Total Noninterest Income
Total Noninterest Expense
Income Before Taxes
Provision for Income Taxes
71,559
2,033
69,526
27,832
59,609
37,749
11,215
77,651
2,736
74,915
27,645
62,705
39,855
10,529
84,018
2,607
81,411
28,949
65,055
45,305
9,026
88,049
2,079
99,202
9,319
85,970
28,555
67,450
47,075
9,600
89,883
32,658
70,678
51,863
11,036
Net Income
$ 26,534
$ 29,326
$ 36,279
$ 37,475
$ 40,827
Share and Per Share Data
Diluted Average Shares
Outstanding
Diluted Earnings Per Share
Cash Dividends Per Share
Book Value Per Share
Tangible Book Value Per Share
Key Earnings Ratios
Return on Average Assets
Return on Average Equity
Return on Tangible Equity
Net Interest Margin
Capital Ratios
Tier 1 Leverage Ratio
Total Risk-Based Capital Ratio
Asset Quality Ratios
Nonperforming Assets to
Period-End Assets
Allowance for Loan Losses to
Period-End Loans
15,168
1.75
.86
15.35
13.73
15,283
1.92
.89
16.40
14.82
$
$
$
$
15,370
2.36
. 94
17.55
16.01
$
$
$
$
15,433
2.43
.99
19.53
18.01
$
$
$
$
15,479
2.64
$
1.02
$
$
21.55
$ 20.02
$
$
$
$
1.06%
11.79%
13.25%
3.00%
1.09%
12.14%
13.51%
3.02%
1 .27%
13.96%
15.38%
3.07%
1.24%
13.17%
14.36%
3.05%
1.17%
12.77%
13.78%
2.99%
9.47%
15.15%
9.49%
14.98%
9. 6 1 %
14.86%
9.98%
14.78%
9.07%
15.48%
0.28%
0.28%
0.23%
0.18%
0.18%
0.97%
0.95%
0.92%
0.89%
1.13%
Consolidated Balance Sheets (Unaudited)
As of December 31
(in thousands)
2016
2017
2018
2019
2020
Assets
Cash and Due from Banks
Interest-Bearing Deposits
at Banks
Investment Securities
Loans
Allowance for Loan Losses
Net Loans
Premises and Equipment, Net
Goodwill and Intangible
Assets, Net
Other Assets
$ 43,024
$ 42,562
$
56,529
$ 47,035
$
42,116
14,331
703,335
1,753,268
(17,012)
30,276
646,056
1,950,770
(18,586)
27,710
618,291
2,196,215
(20,196)
23,186
614,779
2,386,120
(21,187)
338,875
590,677
2,595,030
(29,232)
1,736,256
26,938
1,932,184
27,619
2,176,019
30,446
2,364,933
40,629
2,565,798
42,612
24,569
56,789
24,162
57,606
23,725
55,614
23,534
70,179
23,823
84,735
Total Assets
$ 2,605,242
$ 2,760,465
$ 2,988,334
$ 3,184,275
$ 3,688,636
Liabilities and
Shareholders’ Equity
Noninterest-Bearing Deposits
Interest-Bearing Checking
and Savings Deposits
$ 387,280
$ 441,945
$ 472,768
$ 484,944
$ 701,341
1,529,953
1,601,888
1,608,829
1,735,789
2,255,792
Time Deposits
199,313
201,283
263,987
395,321
277,593
Total Deposits
2,116,546
2,245,116
2,345,584
2,616,054
3,234,726
Short-Term Borrowings
Federal Home Loan
Bank Term Advances
Other Long-Term Debt
Other Liabilities
158,836
169,966
288,659
181,099
17,486
55,000
20,000
22,008
55,000
20,000
20,780
45,000
20,000
19,507
30,000
20,000
35,394
45,000
20,000
37,032
Total Liabilities
2,372,390
2,510,862
2,718,750
2,882,547
3,354,244
Total Shareholders’ Equity
232,852
249,603
269,584
301,728
334,392
Total Liabilities and
Shareholders’ Equity
$ 2,605,242
$ 2,760,465
$ 2,988,334
$ 3,184,275
$ 3,688,636
Total Return Performance
Comparison of Five-Year Cumulative Total Return • Assumes Initial Investment of $100
Arrow Financial Corporation
NASDAQ Banks Index
Russell 2000 Index
Zacks $1B-$5B Bank Assets Index
2015
100.00
100.00
100.00
100.00
2016
158.47
135.40
121.31
135.72
2017
140.88
144.24
139.08
148.54
2018
140.81
119.76
123.76
135.24
2019
176.56
150.57
155.35
156.49
2020
148.98
141.32
186.36
133.30
Comparison of 15-Year Cumulative Total Return • Assumes Initial Investment of $100
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019 2020
Arrow
Financial
Corporation
NASDAQ
Banks Index
Russell 2000
Index
100.00 101.53 95.03 116.30 124.14 146.78 134.55 152.12 171.64 188.10 196.65 311.63 277.05 276.90 347.21 292.97
100.00 112.29 88.87
64.79 53.91
64.11 57.34
68.60
98.18 103.17 112.37 152.14 162.08 134.57 169.18 158.79
100.00 118.37 116.51
77.14 98.10 124.44 119.24 138.74 192.59 202.01 193.10 234.25 268.57 239.00 300.01 359.89
Zacks $1B-$5B
Bank Assets
Index
100.00 111.25 96.06
73.51 63.62
69.27 66.86
78.77
99.79 111.03 120.98 164.19 179.70 163.61 189.32 161.27
Source: Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980–2021.
Arrow Financial Corporation
Board of Directors
Thomas L. Hoy (Chairman)
Retired President and CEO
Arrow Financial Corporation/
Glens Falls National Bank
Mark L. Behan
President
Behan Communications, Inc.
Tenée R. Casaccio, AIA
President
JMZ Architects and Planners, PC
Michael B. Clarke
Retired President and CEO
Lone Star Industries
Directors Emeriti
Herbert O. Carpenter
John J. Carusone, Jr.
Mary-Elizabeth T. FitzGerald
Corporate Officers
Thomas J. Murphy
President and CEO
Edward J. Campanella
Senior Vice President,
Treasurer and Chief Financial
Officer
Gary C. Dake
President
Stewart’s Shops Corp.
Raymond F. O’Conor
Chairman, Retired President and CEO
Saratoga National Bank
David G. Kruczlnicki
Retired President and CEO
Glens Falls Hospital
Elizabeth A. Miller
President and CEO
Miller Mechanical Services, Inc.
Thomas J. Murphy
President and CEO
Arrow Financial Corporation/
Glens Falls National Bank
William L. Owens, Esq.
Partner
Stafford, Owens, Piller, Murnane,
Kelleher and Trombley, PLLC
Colin L. Read, PhD
Professor of Economics/Finance
SUNY Plattsburgh
Richard J. Reisman, DMD
Chairman - Section of Dentistry
Glens Falls Hospital
Herbert A. Heineman, Jr.
David L. Moynehan
Elizabeth O’Connor Little
Michael F. Massiano
(Chairman Emeritus)
John J. Murphy
Doris E. Ornstein
David S. DeMarco
Senior Vice President
and Chief Banking Officer
David D. Kaiser
Senior Vice President
and Chief Credit Officer
Andrew J. Wise
Senior Vice President
and Chief Operating Officer
Shareholder Information
Arrow Stock
Arrow’s common stock trades on the NASDAQ Global Select MarketSM under the symbol “AROW.”
Dividend Reinvestment Plan
The Arrow Financial Corporation Dividend
Reinvestment Plan offers participants a
convenient and economical way to acquire
common stock of Arrow Financial Corporation
without payment of any brokerage commission
or service charges.
Participants may reinvest all cash dividends in
additional shares as well as make optional cash
contributions to buy shares.
Since the Plan is entirely voluntary, you may
join at any time and terminate whenever
you wish.
For more information, please contact:
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
Tel: (888) 444-0058 or astfinancial.com
250 Glen Street, PO Box 307, Glens Falls, NY 12801
(518) 745-1000 | arrowfinancial.com