Arrow Financial Corp Files 2023 Annual Report on Form 10-K

Ticker: AROW · Form: 10-K · Filed: Mar 11, 2024 · CIK: 717538

Sentiment: neutral

Topics: 10-K, Arrow Financial Corp, Annual Report, Banking, Financials

TL;DR

<b>Arrow Financial Corp has submitted its 2023 annual report (10-K) detailing its financial performance and operations for the fiscal year ending December 31, 2023.</b>

AI Summary

ARROW FINANCIAL CORP (AROW) filed a Annual Report (10-K) with the SEC on March 11, 2024. Arrow Financial Corp filed its 2023 Form 10-K on March 11, 2024. The filing covers the fiscal year ending December 31, 2023. The company is incorporated in New York (NY). Its primary SIC code is 6021 (National Commercial Banks). The business and mailing address is 250 Glen St, Glens Falls, NY 12801.

Why It Matters

For investors and stakeholders tracking ARROW FINANCIAL CORP, this filing contains several important signals. This 10-K filing provides a comprehensive overview of Arrow Financial Corp's financial health, operational performance, and strategic direction for the past fiscal year, crucial for investors and stakeholders to assess the company's current standing and future prospects. As a national commercial bank, the details within this filing are vital for understanding its regulatory compliance, market position, and risk management strategies within the banking sector.

Risk Assessment

Risk Level: low — ARROW FINANCIAL CORP shows low risk based on this filing. The filing is a standard annual report (10-K) for a publicly traded company, indicating routine disclosure rather than an immediate event or crisis.

Analyst Insight

Review the detailed financial statements and risk factors within the 10-K to understand Arrow Financial Corp's performance and outlook for the upcoming year.

Key Numbers

Key Players & Entities

FAQ

When did ARROW FINANCIAL CORP file this 10-K?

ARROW FINANCIAL CORP filed this Annual Report (10-K) with the SEC on March 11, 2024.

What is a 10-K filing?

A 10-K is a comprehensive annual financial report required by the SEC, covering audited financials, business operations, risk factors, and management discussion. This particular 10-K was filed by ARROW FINANCIAL CORP (AROW).

Where can I read the original 10-K filing from ARROW FINANCIAL CORP?

You can access the original filing directly on the SEC's EDGAR system. The filing is publicly available and includes all exhibits and attachments submitted by ARROW FINANCIAL CORP.

What are the key takeaways from ARROW FINANCIAL CORP's 10-K?

ARROW FINANCIAL CORP filed this 10-K on March 11, 2024. Key takeaways: Arrow Financial Corp filed its 2023 Form 10-K on March 11, 2024.. The filing covers the fiscal year ending December 31, 2023.. The company is incorporated in New York (NY)..

Is ARROW FINANCIAL CORP a risky investment based on this filing?

Based on this 10-K, ARROW FINANCIAL CORP presents a relatively low-risk profile. The filing is a standard annual report (10-K) for a publicly traded company, indicating routine disclosure rather than an immediate event or crisis.

What should investors do after reading ARROW FINANCIAL CORP's 10-K?

Review the detailed financial statements and risk factors within the 10-K to understand Arrow Financial Corp's performance and outlook for the upcoming year. The overall sentiment from this filing is neutral.

How does ARROW FINANCIAL CORP compare to its industry peers?

Arrow Financial Corp operates within the National Commercial Banks industry, a sector characterized by its role in financial intermediation, lending, and deposit-taking services.

Are there regulatory concerns for ARROW FINANCIAL CORP?

As a national commercial bank, Arrow Financial Corp is subject to extensive regulation by federal and state authorities, including oversight from agencies like the Federal Reserve and the FDIC, ensuring compliance with banking laws and capital requirements.

Industry Context

Arrow Financial Corp operates within the National Commercial Banks industry, a sector characterized by its role in financial intermediation, lending, and deposit-taking services.

Regulatory Implications

As a national commercial bank, Arrow Financial Corp is subject to extensive regulation by federal and state authorities, including oversight from agencies like the Federal Reserve and the FDIC, ensuring compliance with banking laws and capital requirements.

What Investors Should Do

  1. Analyze the financial statements within the 10-K for revenue, net income, and asset growth.
  2. Review the Management's Discussion and Analysis (MD&A) section for insights into the company's strategy and outlook.
  3. Examine any disclosed risk factors to understand potential challenges facing the company.

Key Dates

Year-Over-Year Comparison

This filing represents the annual report for the fiscal year ending December 31, 2023, providing a year-over-year comparison of financial performance and position.

Filing Stats: 4,435 words · 18 min read · ~15 pages · Grade level 16.4 · Accepted 2024-03-11 09:14:38

Key Financial Figures

Filing Documents

Forward-Looking Statements 3

Forward-Looking Statements 3 Use of Non-GAAP Financial Measures 4 PART I

Risk Factors

Item 1A. Risk Factors 16

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 20 I tem 1C.Cybersecurity 20

Properties

Item 2. Properties 20

Legal Proceedings

Item 3. Legal Proceedings 21

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 21 PART II

Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of

Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 22

Reserved

Item 6. Reserved 25

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 26

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 53

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 53

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 111

Controls and Procedures

Item 9A. Controls and Procedures 111

Other Information

Item 9B. Other Information 112

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 113 PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 114

Executive Compensation

Item 11. Executive Compensation 114

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 114

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 114

Principal Accounting Fees and Services

Item 14. Principal Accounting Fees and Services 114 PART IV

Exhibits, Financial Statement Schedules

Item 15. Exhibits, Financial Statement Schedules 114

Form 10-K Summary

Item 16. Form 10-K Summary 115 Exhibit Index 116

Signatures

Signatures 118 2 NOTE ON TERMINOLOGY In this Annual Report on Form 10-K, the terms "Arrow," "the registrant," "the Company," "we," "us," and "our," generally refer to Arrow Financial Corporation and subsidiaries as a group, except where the context indicates otherwise. At certain points in this Report, our performance is compared with that of our "peer group" of financial institutions. Unless otherwise specifically stated, this peer group is comprised of the group of 177 domestic (U.S.-based) bank holding companies with $3 to $10 billion in total consolidated assets as identified in the Federal Reserve Board's most recent "Bank Holding Company Performance Report" (which is the Performance Report for the most recently available period ending September 30, 2023), and peer group data has been derived from such Report. This peer group is not, however, identical to either of the peer groups comprising the two bank indices included in the stock performance graphs on pages 23 and 24 of this Report. THE COMPANY AND ITS SUBSIDIARIES Arrow is a two-bank holding company headquartered in Glens Falls, New York. The banking subsidiaries are Glens Falls National Bank and Trust Company (Glens Falls National or GFNB) whose main office is located in Glens Falls, New York, and Saratoga National Bank and Trust Company (Saratoga National or SNB) whose main office is located in Saratoga Springs, New York. Active subsidiaries of Glens Falls National include Upstate Agency, LLC (an insurance agency that sells property and casualty insurance and also specializes in selling and servicing group health care policies and life insurance), North Country Investment Advisers, Inc. (a registered investment adviser that provides investment advice to Arrow's proprietary mutual fund) and Arrow Properties, Inc. (a real estate investment trust, or REIT). Arrow also owns directly two subsidiary business trusts, organized in 2003 and 2004 to issue trust preferred securities (TRUPs), which are stil

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS The information contained in this Annual Report on Form 10-K contains statements that are not historical in nature but rather are based on our beliefs, assumptions, expectations, estimates and projections about the future. These statements are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and involve a degree of uncertainty and attendant risk. Words such as "expects," "believes," "anticipates," "estimates" and variations of such words and similar expressions often identify such forward-looking statements. Some of these statements, such as those included in the interest rate sensitivity analysis in Item 7A of this Report, entitled "Quantitative and Qualitative Disclosures About Market Risk," are merely presentations of what future performance or changes in future performance would look like based on hypothetical assumptions and on simulation models. Other forward-looking statements are based on our general perceptions of market conditions and trends in activity, both locally and nationally, as well as current management strategies for future operations and development. These forward-looking statements may not be exhaustive, are not guarantees of future performance and involve certain risks and uncertainties that are difficult to quantify or, in some cases, to identify. You should not place undue reliance on any such forward-looking statements. In the case of all forward-looking statements, actual outcomes and results may differ materially from what the statements predict or forecast. Factors that could cause or contribute to such differences include, but are not limited to the following: continuing and growing security risks to its information base including the information maintained relating to customers, and any breaches in the security systems implemented to protect this information; significant changes to market conditions presenting challeng

Business

Item 1. Business A. GENERAL The holding company, Arrow Financial Corporation, a New York corporation, was incorporated on March 21, 1983 and is registered as a bank holding company within the meaning of the Bank Holding Company Act of 1956. Arrow owns two nationally-chartered banks in New York (Glens Falls National and Saratoga National), and through such banks indirectly owns various non-bank subsidiaries, including an insurance agency, a registered investment adviser and a REIT. See "The Company and Its Subsidiaries," above. Subsidiary Banks (dollars in thousands and data is as of December 31, 2023) Glens Falls National Saratoga National Total Assets at Year-End $ 3,274,507 $ 1,062,118 Trust Assets Under Administration and Investment Management at Year-End (Not Included in Total Assets) $ 1,625,139 $ 138,055 Date Organized 1851 1988 Employees (full-time equivalent) 480 57 Offices 26 11 Counties of Operation Warren, Washington, Saratoga, Essex & Clinton Saratoga, Albany, Rensselaer, & Schenectady Main Office 250 Glen Street Glens Falls, NY 171 So. Broadway Saratoga Springs, NY The holding company's business consists primarily of the ownership, supervision and control of Arrow's two banks, including the banks' subsidiaries. The holding company provides various advisory and administrative services and coordinates the general policies and operation of the banks. There were 537 full-time equivalent employees, including 38 employees within Arrow's insurance agency subsidiary, at December 31, 2023. See the discussion of our human capital resources in Section G ("HUMAN CAPITAL") of this Item 1. Arrow offers a broad range of commercial and consumer banking and financial products. The deposit base consists of deposits derived principally from the communities served. The Company targets lending activities to consumers and small- and mid-sized companies in Arrow's regional geographic area. In addition, through an indirect lending program Arrow sources consume

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