2023
ANNUAL REVIEW
While the last year posed its challenges,
it did not distract us from growing the
business. We remain steadfast in our
commitment to serving our shareholders,
customers and communities and
empowering our employees.
David S. DeMarco
President and CEO
The information in this document may contain statements based on management’s beliefs, assumptions, expectations,
estimates and projections about the future. Such "forward-looking statements," as defined in Section 21E of the Securities
Exchange Act of 1934, as amended, involve a degree of uncertainty and attendant risk. Actual outcomes and results may
differ, explicitly or by implication. We are not obliged to revise or update these statements to reflect unanticipated events.
This document should be read in conjunction with Arrow’s Annual Report on Form 10-K for the year ended December 31,
2023 and other filings with the Securities and Exchange Commission.
Arrow Stakeholders:
As we reflect on the past year, I am pleased
to share our accomplishments and milestones.
While the last year posed its challenges, it did
not distract us from growing the business. We
remain steadfast in our commitment to serving
our shareholders, customers and communities
and empowering our employees.
One of the highlights of 2023 was our robust
loan growth. This growth was coupled with
record-high loan balances, a testament to our
ability to meet the diverse financial needs of our
customers while maintaining strong credit,
capital and liquidity positions. We issued a cash
dividend to our shareholders for the 43rd
consecutive quarter, expanded our existing
stock repurchase program by $5 million,
reinstated our dividend reinvestment program
and issued an annual stock dividend for the
15th consecutive year. Both Glens Falls National
Bank and Trust Company and Saratoga National
Bank and Trust Company maintained their Bauer
Financial 5-Star "Exceptional Performance"
ratings for the 16th and 14th consecutive years,
respectively.
Furthermore, we completed a multi-year
renovation project on our downtown Glens
Falls headquarters, providing a modern and
welcoming space for both employees and
customers alike. The Main Office branch of
Glens Falls National Bank also reopened right
in the center of downtown Glens Falls, serving
as a centerpiece of what community banking
means to us—accessible, long-lasting and
friendly. This investment in our infrastructure
underscores our dedication to providing the
best possible customer experience and
reinforces our commitment to the community.
You can read more about the headquarters
renovation on page 4.
In line with our commitment to innovation,
we continued to advance our technology,
enhancing our capabilities and delivering
a superior customer experience. Additionally,
we invested in our people through expanded
learning and development programs designed
to support our culture of collaboration and
continuous improvement.
At the heart of everything we do is our mission to
strengthen financial lives and make a positive
impact in the communities we serve. As noted
at the end of this review, we continued to
demonstrate an impressive commitment to
our communities by donating $781,000 and
more than 11,000 volunteer hours in 2023.
We are incredibly proud of the dollars we
donate, the thousands of hours our team
gives back and the impact we make on
our communities by doing so.
Finally, I would like to take this opportunity to
recognize our exceptional team for their hard
work and dedication throughout the year. Our
success is directly tied to their unwavering
commitment to our values and vision.
As we look ahead, we remain focused on
building upon our achievements and continuing
to deliver value to our shareholders, customers
and communities.
Thank you for your commitment to the Arrow
Family of Companies. For those of you who are
shareholders, thank you for your investment in
Arrow Financial Corporation. Your support is
appreciated as we continue to work to maintain
your trust in us and create increased value for
your investment.
David S. DeMarco
President and CEO
2 | ARROW FINANCIAL CORPORATION • 2023 ANNUAL REVIEW
2023
IN REVIEW
Our team continued to advance our strategic
goals while serving the needs of our customers,
communities and shareholders. Find more details
below, followed by our financial highlights.
SOLID RESULTS
In 2023, Arrow Financial Corporation saw
robust loan growth and retail deposit
balances of $3.5 billion, slightly ahead
of year-end 2022. Arrow finished the
year with solid earnings, again thanks
to the hard work and dedication of our
exceptional team. In a challenging rate
environment, we looked to draw in new
customers with competitive rates on
deposit products while continuing to
deepen existing customer
relationships. We maintained
asset quality with total
assets reaching $4.17
billion at year-end.
Throughout the year, we focused on
enhancing customer relationships,
expanding our presence in newer
markets and maintaining asset quality
and other performance metrics.
3 | ARROW FINANCIAL CORPORATION • 2023 ANNUAL REVIEW
HEADQUARTERS
RENOVATION
After a multi-year investment, we
reopened our completely renovated
corporate headquarters in
downtown Glens Falls and
welcomed back our team
and our customers.
These renovations and updates, which
include our Main Office branch and
lending areas, provide our team with
an efficient and flexible workspace, an
enhanced experience for our customers
and will help reduce our environmental
impact. Project updates included:
• A fully renovated lobby and
lending center for the main branch
of Glens Falls National Bank
• The replacement of aging infrastructure
and equipment including a full overhaul
of electrical and HVAC, a rooftop green
space, solar panels, energy-saving
lighting and water-conserving plumbing
• Flexible and functional
workspaces for our teams
• Increased physical security
• Energy-saving interior and
exterior improvements
The completion of our corporate
headquarters renovation project is more
than just a revitalization of our bank and
offices—it's an investment in the future of
our customers, our employees and our
communities. See images on page 6.
ADVANCING TECHNOLOGY
As a company, we are continually making
enhancements to our customer-facing
platforms. Upgrades
focused on improving
the user experience with
efficient tools and
mobile capabilities.
In addition, we continue to introduce easy-
to-use fraud prevention digital services for
businesses to monitor and approve activity
on their accounts. As always, our goal is to
improve operational efficiency and internal
reporting to make data-driven decisions.
SAFER BANKING,
TOGETHER
Fraud attempts are widespread,
targeting both individuals and
businesses. We are dedicated to
educating and empowering our
customers to prevent, detect and report
fraud on their accounts. We also urge our
customers and communities to be
cautious with their financial and
personal information. Behind the
scenes, we work to maintain robust
and ever-evolving fraud prevention
measures to protect customer data.
SOCIALLY CONSCIOUS
PERFORMANCE
At Arrow, we are committed
to operating in a socially
conscious manner that demonstrates
positive environmental, social and
governance contributions.
Below are some examples of our
commitment to conserving natural
resources, supporting our employees,
customers and communities, demonstrating
that we value differences, particularly in
the areas of diversity, equity, inclusion
and belonging (“DEIB”) and adhering
to strong corporate governance.
• Digital banking options and paperless
statements are provided and encouraged
• Facility renovations, including our
corporate headquarters, incorporate
energy-saving features
• Emissions reduction through remote
work and video conferencing
4 | ARROW FINANCIAL CORPORATION • 2023 ANNUAL REVIEW
• Long-standing dedication to diversity
on Arrow’s Board of Directors,
exceeding Nasdaq requirements
• Professional development, wellness
and mental health employee
services are available to our team
• Annual engagements with a third party
to assess diversity within our employee
base and support for the setting and
tracking of goals to encourage the
advancement of minorities, women,
veterans and persons with disabilities
• Incorporation of inclusion and
belonging into our HR policies,
practices and programs
• Products to facilitate first-time
home ownership
• Bank On certification for Smart Steps
checking to serve the underbanked
• Annually, time, dollars and
expertise are donated to community
organizations with an emphasis on
affordable homeownership, economic
empowerment, health and human
services and social progress (find more
about our 2023 support on page 12)
• Comprehensive governance
program, as described in further
detail in our annual Proxy Statement
• Expanding our philanthropic support
of environmental sustainability in our
community, including organizations
that impact soil, water and land
conservation, sustainable farming,
mountain and lake protection and
stewardship, and parks and recreation
• Developed sustainability investment
models for our socially conscious clients
• Strong cybersecurity
protections and training
Find additional details in our shareholder
communications and filings with the
Securities and Exchange Commission.
5 | ARROW FINANCIAL CORPORATION • 2023 ANNUAL REVIEW
GREAT TEAM,
GREAT RESULTS
What we achieve, we
achieve together. It is through our
team’s hard work and dedication that
we continue to deliver on our mission
of strengthening financial lives.
Beyond our mission, we have a company
culture of continuous improvement.
That means we are constantly growing,
learning and evolving. We have internal
programs in place to support our emerging
talent and our seasoned managers. As
our business environment changes more
rapidly, we want to meet the evolving
needs of our customers, and that starts
with a culture of learning and collaboration.
Together, the Arrow Team will continue
to deliver the results that our customers,
communities and shareholders expect.
IN MEMORY OF
THOMAS L. HOY
Finally, we would like to acknowledge
and remember Tom Hoy, former President
and CEO, and Chairman of Arrow Financial
Corporation.
In his nearly five-decade career with the
Arrow Family of Companies, Tom’s dedica-
tion was unwavering. He held various roles
before becoming company President and
CEO from 1997 until his retirement in 2012.
He remained Chair of the Board until early
2023, when he stepped back due to health
reasons.
During his time as CEO, Tom expanded
our company’s footprint and set forth a
strategic vision that we still follow today. As
Chair, his steadiness and integrity helped
us navigate significant growth and
continuous improvement.
We are grateful to have known Tom, and
his professional legacy lives on in the
company culture he helped shape.
This is more than just a revitalization of our
bank and offices—it’s an investment in the
future of our customers, our employees and
our communities.
Here's a look at our revitalized corporate headquarters and Main Office branch at 250 Glen Street in downtown Glens Falls.
6 | ARROW FINANCIAL CORPORATION • 2023 ANNUAL REVIEW
2023 Financial Highlights
Arrow finished the year with robust
loan growth, posting record high loan
balances while maintaining strong credit,
capital and liquidity positions.
Net Income:
Total Loans:
$30.08 million
$3.18 billion, up 7.7%
Total Retail Deposits:
$3.51 billion, up 0.4%
Total Assets:
$4.17 billion, up 5.0%
Total Shareholders' Equity:
$379.77 million, up 7.4%
Return on Average Equity:
Return on Average Assets:
8.29%
0.74%
Stock Dividend:
Current Quarterly
Cash Dividend:
3% distributed in
September 2023
$0.27
Book Value Per Share:
$22.42
Diluted Earnings per Share:
$1.77
7 | ARROW FINANCIAL CORPORATION • 2023 ANNUAL REVIEW
Performance Comparisons
$2.92
$2.86
$3,689
$3,184
$2.41
$2.23
$1.77
$4,028
$3,970
$4,170
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
DILUTED EARNINGS PER SHARE
For the 12 Months Ended December 31*
ASSETS
As of December 31
($ in Millions)
$0.90
$0.93
$0.96
$1.03
$1.06
$3,550
$3,498
$3,688
**
$3,235
$2,616
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
CASH DIVIDENDS PAID PER SHARE
For the 12 Months Ended December 31*
DEPOSITS
As of December 31
($ in Millions)
$21.81
$20.74
$22.42
$19.72
$17.87
$334
$302
$371
$354
$380
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
BOOK VALUE PER SHARE
SHAREHOLDERS’ EQUITY
As of December 31*
As of December 31
($ in Millions)
*Per Share Amounts have been restated for stock dividends distributed.
**Includes retail and wholesale deposits.
8 | ARROW FINANCIAL CORPORATION • 2023 ANNUAL REVIEW
Total Return Performance
Comparison of Five-Year Cumulative Total Return • Assumes Initial Investment of $100
Comparison of 5 Year Cumulative Total Return
Assumes Initial Investment of $100
December 2023
200.00
180.00
160.00
140.00
120.00
100.00
80.00
60.00
40.00
20.00
0.00
2018
2019
2020
2021
2022
2023
Arrow Financial Corporation
ABA NASDAQ Community BankTR
Russell 2000 Index
Zacks $1B-$5B Bank Assets Index
Arrow Financial Corporation
NASDAQ Banks Index
Russell 2000 Index
Zacks $1B-$5B Bank Assets Index
2018
100.00
100.00
100.00
100.00
2019
125.39
123.30
125.52
117.34
2020
105.80
109.05
150.58
95.01
2021
132.22
147.76
172.90
130.61
December 2023
2022
135.28
137.43
137.56
127.10
2023
120.71
134.58
160.85
126.09
Comparison of 15 Year Cumulative Total Return
Assumes Initial Investment of $100
December 2023
Comparison of 15-Year Cumulative Total Return • Assumes Initial Investment of $100
600.00
550.00
500.00
450.00
400.00
350.00
300.00
250.00
200.00
150.00
100.00
50.00
0.00
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Arrow Financial Corporation
ABA NASDAQ Community BankTR
Russell 2000 Index
Zacks $1B-$5B Bank Assets Index
December 2023
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022 2023
Arrow
Financial
Corporation
NASDAQ
Banks Index
Russell 2000
Index
100.00 106.74 126.21 115.69 130.80 147.59 161.74 169.10 267.96 238.23 238.10 298.56 251.91 314.82 322.12 287.41
100.00
80.80 90.06
84.18 99.10 140.40 146.94 160.97 223.37 229.11 194.97 240.40 212.62 288.09 267.94 262.39
100.00 127.17 161.32 154.57 179.84 249.66 261.87 250.32 303.66 348.15 309.82 388.90 466.53 535.66 426.19 498.34
Zacks $1B-$5B
Bank Assets
Index
100.00
83.14 91.29
86.56 101.88 128.00 140.15 152.44 212.71 234.10 214.34 251.50 203.63 279.96 272.42 270.26
Source: Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980–2024.
9 | ARROW FINANCIAL CORPORATION • 2023 ANNUAL REVIEW
Consolidated Statements of Income (Unaudited)
(In thousands, except Per Share Amounts)
2019
2020
2021
2022
2023
Years Ended December 31
Interest and Dividend Income
Interest Expense
$109,759
21,710
$111,896
12,694
$115,550
5,195
$129,651
11,308
$162,564
57,732
Net Interest Income
Provision for Credit Losses
Net Interest Income after
Provision for Credit Losses
Total Noninterest Income
Total Noninterest Expense
Income Before Taxes
Provision for Income Taxes
88,049
2,079
99,202
9,319
110,355
272
118,343
4,798
104,832
3,381
85,970
28,555
67,450
47,075
9,600
89,883
32,658
70,678
51,863
11,036
110,083
32,369
78,048
64,404
14,547
113,545
30,898
81,530
62,913
14,114
101,451
29,117
93,048
37,520
7,445
Net Income
$37,475
$40,827
$49,857
$48,799
$30,075
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 Credit Losses to
Period-End Loans
16,864
$2.23
$.90
$17.87
$16.48
1.24%
13.17%
14.36%
3.05%
16,915
$2.41
$.93
$19.72
$18.32
1.17%
12.77%
13.78%
2.99%
17,052
$2.92
$.96
$21.81
$20.41
1.28%
14.09%
15.11%
2.97%
17,059
$2.86
$1.03
$20.74
$19.37
1.21%
13.55%
14.50%
3.03%
17,037
$1.77
$1.06
$22.42
$21.06
0.74%
8.29%
8.86%
2.65%
9.98%
14.78%
9.07%
15.48%
9.20%
15.69%
9.80%
15.11%
9.84%
14.74%
0.18%
0.18%
0.29%
0.32%
0.51%
0.89%
1.13%
1.02%
1.00%
0.97%
*Further discussion and reconciliation of non-GAAP financial measures can be found in our earnings press
release and Form 8-K furnished February 1, 2024.
10 | ARROW FINANCIAL CORPORATION • 2023 ANNUAL REVIEW
Consolidated Balance Sheets (Unaudited)
(In thousands)
2019
2020
2021
2022
2023
As of December 31
Assets
Cash and Due from Banks
Interest-Bearing Deposits
at Banks
Investment Securities
Loans
Allowance for Credit Losses
Net Loans
Premises and Equipment, Net
Goodwill and Intangible
Assets, Net
Other Assets
$47,035
$42,116
$26,978
$31,886
$36,755
23,186
614,779
2,386,120
(21,187)
338,875
590,677
2,595,030
(29,232)
430,718
763,009
2,667,941
(27,281)
32,774
757,097
2,983,207
(29,952)
105,781
636,138
3,212,908
(31,265)
2,364,933
40,629
2,565,798
42,612
2,640,660
46,217
2,953,255
56,491
3,181,643
59,642
23,534
70,179
23,823
84,735
23,791
96,579
23,373
114,633
22,983
126,926
Total Assets
$3,184,275
$3,688,636
$4,027,952
$3,969,509
$4,169,868
Liabilities and
Shareholders’ Equity
Noninterest-Bearing Deposits
Interest-Bearing Checking
and Savings Deposits
$484,944
$701,341
$810,274
$836,871
$758,425
1,735,789
2,255,792
2,525,678
2,452,058
2,266,065
Time Deposits
395,321
277,593
214,545
209,435
663,076
Total Deposits
2,616,054
3,234,726
3,550,497
3,498,364
3,687,566
Borrowings
Other Long-Term Debt
Other Liabilities
211,099
20,000
35,394
62,486
20,000
37,032
45,000
20,000
41,269
54,800
20,000
42,807
26,500
20,000
56,030
Total Liabilities
2,882,547
3,354,244
3,656,766
3,615,971
3,790,096
Total Shareholders’ Equity
301,728
334,392
371,186
353,538
379,772
Total Liabilities and
Shareholders’ Equity
$3,184,275
$3,688,636
$4,027,952
$3,969,509
$4,169,868
11 | ARROW FINANCIAL CORPORATION • 2023 ANNUAL REVIEW
Community Contributions
OUR 2023 GIVING IN ACTION
$781,000
DONATED TO OUR COMMUNITIES
UP 19%
FROM 2022
INCLUDING
$103,076
from employee
contributions
LOGGED
11,193 HOURS
UP 21% 561
UP 19%
FROM 2022
NON-PROFITS SUPPORTED
across our 8 county footprint
VOLUNTEERS
252 EMPLOYEE
FROM 2022
Nearly $3 million donated
in the last five years.
12 | ARROW FINANCIAL CORPORATION • 2023 ANNUAL REVIEW
Beyond our mission, we have a company
culture of continuous improvement.
That means we are constantly
growing, learning and evolving.
13 | ARROW FINANCIAL CORPORATION • 2023 ANNUAL REVIEW
Our Leadership
Executive Team
David S. DeMarco
President and CEO
Penko Ivanov
Senior Executive Vice President,
Chief Financial Officer, Treasurer
and Chief Accounting Officer
Michael Jacobs
Executive Vice President
and Chief Information Officer
David D. Kaiser
Senior Executive Vice President
and Chief Credit Officer
Brooke M. Pancoe
Executive Vice President and
Chief Human Resources Officer
Andrew J. Wise
Senior Executive Vice President
and Chief Risk Officer
Marc J. Yrsha
Senior Executive Vice President
and Chief Banking Officer
Board of Directors
William L. Owens, Esq.
(Chairman)
Partner
Stafford, Owens, Piller, Murnane,
Kelleher and Trombley, PLLC
Mark L. Behan
Founder and President
Behan Communications, Inc.
Tenée R. Casaccio, AIA
President
JMZ Architects and Planners, PC
Gregory J. Champion
Executive Vice President - Legal
Syncromune, Inc.
Gary C. Dake
President
Stewart’s Shops Corp.
David S. DeMarco
President and CEO
David G. Kruczlnicki
Retired President and CEO
Glens Falls Hospital
Elizabeth A. Miller
President and CEO
Miller Mechanical
Services, Inc.
Raymond F. O’Conor
Chairman and Retired
President and CEO
Saratoga National Bank
Colin L. Read, PhD
Professor of
Economics/Finance
SUNY Plattsburgh
14 | ARROW FINANCIAL CORPORATION • 2023 ANNUAL REVIEW
Directors Emeriti
Herbert O. Carpenter
David L. Moynehan
John J. Carusone, Jr.
Michael B. Clarke
John J. Murphy
Doris E. Ornstein
Mary-Elizabeth T. FitzGerald
Richard J. Reisman, DMD
Herbert A. Heineman, Jr.
Elizabeth O’Connor Little
Michael F. Massiano
(Chairman Emeritus)
In Memoriam
Thomas L. Hoy
(Chairman Emeritus)
Our Family of
Companies
Arrow Financial Corporation
is the parent company
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.
15 | ARROW FINANCIAL CORPORATION • 2023 ANNUAL REVIEW
Glens Falls National Bank and Trust
Company is a community bank
headquartered in Glens Falls, New York, that
serves Warren, Washington, Essex, Clinton
and northern Saratoga counties in Upstate
New York. It operates 26 banking offices and
provides a wide range of financial products
and services to individuals and businesses,
including banking, investments and insurance.
Saratoga National Bank and Trust Company
is a community bank headquartered in
Saratoga Springs, New York. It serves
Saratoga, Albany, Rensselaer and
Schenectady counties through 11 banking
offices and provides a wide range of financial
products to individuals and businesses,
including banking, investments and insurance.
Other Arrow Financial Corporation
subsidiaries include:
Upstate Agency, LLC, an insurance agency
that specializes in personal and business
insurance, as well as group health and
employee benefits.
North Country Investment Advisers,
Inc., an investment advisory firm that
provides portfolio management of
proprietary accounts for our banks.
Our Footprint
16 | ARROW FINANCIAL CORPORATION • 2023 ANNUAL REVIEW
Arrow Financial Corporation is a multi-
bank holding company headquartered
in Glens Falls, New York, providing
banking, insurance and wealth
management services from 37 branches
and nine insurance offices in eight
counties from Plattsburgh to Albany.
With a footprint of more than 160
miles along the eastern border of New
York State, our companies reach a
broad customer base including rural,
urban and suburban areas from the
Canadian border to the Hudson Valley.
As of the 2020 Census, this service area
includes a population of over 1.1 million
individuals, families and businesses.
Our Arrow Team of more than 530 staff
members strives to deliver an exceptional
customer experience across all lines of
business. They make our achievements
and financial results possible!
Glens Falls National Bank and Trust Company
Saratoga National Bank and Trust Company
Upstate Agency, LLC
ElizabethtownWarrensburgChestertownTiconderogaSchroon LakeDurkee St.Ticonderoga Drive-InPort HenryU.S. Ave.SchuylervilleCambridgeSalemArgyleKingsburyFort AnnFort EdwardGreenwichGranvilleMain OfficeQueensburyLakeGeorgeSouth Glens FallsLake LuzerneBroad St.Bay Rd.Exit 18CorinthWilton SquareRoute 9West Ave.Clifton ParkTroyLathamColonieSaratoga SpringsSchenectadyRotterdamSaratogaAlbanyRensselaerSchenectadyWashingtonWarrenClintonEssex 250 Glen Street, PO Box 307, Glens Falls, NY 12801
(518) 415-4307 | arrowfinancial.com
17 | ARROW FINANCIAL CORPORATION • 2023 ANNUAL REVIEW