Arrow Financial Corporation; Arrow Announces First Quarter Results

Apr 18, 2001, 01:00 ET from Arrow Financial Corporation

    GLENS FALLS, N.Y., April 18 /PRNewswire/ -- Arrow Financial Corporation
 announced operating results for the quarter ended March 31, 2001. Net income
 for the quarter was $3.5 million, representing diluted earnings per share of
 $.48, or 11.6% above the diluted per share amount of $.43 earned in the first
 quarter of 2000, when net income was $3.2 million. Core earnings, which
 exclude one-time material and nonrecurring items, were $3.4 million in 2001 as
 compared with $3.2 million for 2000. This represented a 9.3% increase in the
 core diluted per share amount, $.47 for 2001 versus $.43 for 2000. The
 quarterly cash dividend paid to shareholders in the first quarter of 2001 was
 $.21, or 10.5% higher than paid in last year's first quarter.
     Thomas L. Hoy, President and CEO stated, "We are pleased to report that
 the favorable per share earnings performance was accompanied by growth in
 several key balance sheet categories. Also, asset quality remained very high
 and credit losses were again very limited. Our asset management activities
 expanded during the quarter with the addition of North Country Investment
 Advisors, Inc., an SEC-registered investment advisor that we have formed. This
 new subsidiary will provide investment advisory services to the North Country
 Funds, which initially will include the North Country Equity Growth Fund
 (NCEGX) and the North Country Intermediate Bond Fund (NCBDX)."
     Mr. Hoy added, "The improved earnings essentially reflect an increase in
 tax equivalent net interest income, which in turn, resulted from growth in the
 level of average earning assets.  Tax equivalent net interest income in the
 quarter totaled $10.4 million, up 6.3% from the $9.8 million earned in 2000.
 Average earning assets were $1.043 billion in the 2001 quarter versus
 $953 million for the same quarter last year, an increase of 9.4%.  Mr. Hoy
 observed that net interest income was also favorably impacted by a rising net
 interest margin, which equaled 4.06% for the first quarter of 2001, up from
 3.92% in the fourth quarter of 2000 although below the 4.15% recorded in the
 first quarter of 2000.  "Federal Reserve Board actions to lower the targeted
 federal funds rate three times in the first quarter led to reductions in
 short-term funding costs.  This effect was the principal factor leading to the
 margin expansion as the volume of short-term sources of funds repricing in the
 quarter significantly exceeded the volume of assets repricing in the quarter."
     At March 31, 2001, the Company's total assets were $1.131 billion, up
 9.9% or $102 million over last year's quarter-end amount of $1.029 billion.
 Deposits at period-end were $874 million, which reflected an increase of
 3.7% or $31 million as compared with last year's amount of $843 million.
 Loans outstanding totaled $744 million versus $679 million at March 31, 2000
 and represented growth of 10.9% when adjusted to include the effect of
 mortgage loan securitizations.
     Mr. Hoy further added, "We are also pleased to report continuing excellent
 results in our key asset quality ratios.  At quarter-end 2001, nonperforming
 loans totaled $2.0 million representing a very low .27% of loans outstanding.
 This balance was virtually unchanged from nonperforming loan totals at both
 December 31, 2000 and March 31, 2000 despite the sizable growth in the loan
 portfolio.  Nonperforming assets were $2.4 million, down from the levels of
 $2.6 million at year-end 2000 and $2.8 million at March 31, 2000 and
 represented .22% of period-end assets.  Net loan losses were only .08% of
 average loans outstanding this year, even lower than the .09% ratio for the
 first quarter of 2000."
     Mr. Hoy said that construction will soon commence on Saratoga National
 Bank's previously announced 3rd branch office located in the City of Saratoga
 Springs.  He noted another upcoming milestone in the Company's history.
 "During the month of August we will celebrate Glens Falls National Bank and
 Trust Company's 150th anniversary.  We take great pride in the length of our
 service as financial partner to so many individuals, small businesses and
 municipalities."
 
     Arrow Financial Corporation is a multi-bank holding company headquartered
 in Glens Falls, NY with 25 banking locations in upstate New York.  Arrow is
 the parent of the Glens Falls National Bank and Trust Company and Saratoga
 National Bank and Trust Company.
 
     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 are "forward-looking statements" within the meaning of Section 21E
 of the Securities Exchange Act of 1934, as amended, and involve 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.  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, 2000.
 
                          ARROW FINANCIAL CORPORATION
                       CONSOLIDATED FINANCIAL INFORMATION
                    (In thousands, except per share amounts)
                                   Unaudited
                                                            Three Months
                                                           Ended March 31,
     Income Statement                                    2001           2000
     Interest Income                                  $19,711        $17,836
     Interest Expense                                   9,696          8,374
     Net Interest Income                               10,015          9,462
     Provision for Loan Losses                            381            405
     Net Interest Income
      After Provision for Loan Losses                   9,634          9,057
 
     Net Gains (Losses) on Securities Transactions          8            (4)
     Other Nonrecurring Income                            122             19
     Net Gain on Sale of Loans                              1              4
     Income from Fiduciary Activities                   1,049            905
     Fees for Other Services to Customers               1,168          1,149
     Other Operating Income                               149            236
     Total Other Income                                 2,497          2,309
 
     Salaries and Employee Benefits                     4,005          3,841
     Occupancy Expense of Premises, Net                   549            489
     Furniture and Equipment Expense                      622            641
     Amortization of Intangibles                          236            236
     Foreclosed Property Expense                           19             27
     Other Operating Expense                            1,669          1,584
     Total Other Expense                                7,100          6,818
 
     Income Before Taxes                                5,031          4,548
     Provision for Income Taxes                         1,525          1,367
     Net Income                                       $ 3,506        $ 3,181
 
     Share and Per Share Data
     Period Ending Shares Outstanding                   7,265          7,275
     Basic Average Shares Outstanding                   7,255          7,340
     Diluted Average Shares Outstanding                 7,338          7,442
 
 
     Basic Earnings Per Share                            $.48           $.43
     Diluted Earnings Per Share                           .48            .43
 
     Cash Dividends                                       .21            .19
 
     Diluted Earnings Per Share,
      based on Core Net Income (1)                        .47            .43
     Cash Diluted Earnings Per Share,
      based on Core Net Income (1,2)                      .49            .45
 
     Book Value                                         11.61           9.71
     Tangible Book Value (3)                            10.13           8.14
 
     Key Earnings Ratios
     Return on Average Assets                           1.29%          1.27%
     Return on Average Equity                           17.19          18.03
     Net Interest Margin                                 4.06           4.15
 
     1.  Core Net Income excludes gains/losses on securities transactions,
         one-time material and nonrecurring items of income and expense.
     2.  Cash Earnings Per Share adds back to core net income the amortization,
         net of tax, of goodwill associated with branch purchases.
     3.  Tangible Book Value excludes from total equity intangible assets,
         primarily goodwill associated with branch purchases.
 
                          ARROW FINANCIAL CORPORATION
                       CONSOLIDATED FINANCIAL INFORMATION
                                ($ in thousands)
                                   Unaudited
 
                                    March 31, 2001           March 31, 2000
                                              First                    First
                                Period       Quarter      Period      Quarter
     Balance Sheet               End         Average        End       Average
     Cash and Due from Banks   $23,539      $26,932       $24,464    $23,961
     Federal Funds Sold         56,400       11,018         4,000      4,449
     Securities
      Available-for-Sale       219,225      230,377       232,267    227,162
     Securities
      Held-to-Maturity          60,435       60,584        54,979     54,970
     Total Loans               743,807      741,095       679,092    666,041
     Allowance for
      Loan Losses              (8,956)      (8,831)       (8,040)    (7,923)
     Net Loans                 734,851      732,264       671,052    658,118
     Premises and Equipment,
      Net                       12,365       12,391        11,843     11,870
     Goodwill and
      Intangible Assets         10,715       10,832        11,454     11,656
     Other Assets               13,412       14,354        18,791     18,441
     Total Assets           $1,130,942   $1,098,752    $1,028,850 $1,010,627
     Demand Deposits          $119,768     $113,390     $ 106,817   $106,321
     Nonmaturity Interest-
      Bearing Deposits         406,014      385,837       377,232    364,206
     Time Deposits of
      $100,000 or More         149,168      156,966       159,540    137,385
     Other Time Deposits       198,952      199,931       199,303    200,354
     Total Deposits            873,902      856,124       842,892    808,266
     Short-Term Borrowings      28,287       38,214        26,889     37,879
     Federal Home Loan
      Bank Advances            125,000      101,790        70,000     74,730
     Other Long-Term Debt        5,000        5,000         5,000      5,000
     Other Liabilities          14,412       14,923        13,411     13,812
     Total Liabilities       1,046,601    1,016,051       958,192    939,687
     Common Stock                9,496        9,496         9,496      9,496
     Surplus                    85,561       85,560        85,480     85,479
     Undivided Profits          23,902       22,987        15,844     14,935
     Unallocated ESOP Shares   (2,377)      (2,387)       (2,383)    (2,368)
     Accumulated Other
      Comprehensive
       Income (Loss)             1,241          603       (4,803)    (4,972)
     Treasury Stock           (33,482)     (33,558)      (32,976)   (31,630)
     Total Shareholders'
      Equity                    84,341       82,701        70,658     70,940
     Total Liabilities and
      Shareholders' Equity  $1,130,942   $1,098,752    $1,028,850 $1,010,627
 
     Trust Assets Under
      Administration          $685,058                  $ 721,525
 
     Capital Ratios
     Leverage Ratio              7.12%                      6.86%
     Tier I Risk-based
      Capital Ratio              10.55                      10.29
     Total Risk-based
      Capital Ratio              11.77                      11.49
 
                          ARROW FINANCIAL CORPORATION
                       CONSOLIDATED FINANCIAL INFORMATION
                                ($ in thousands)
                                   Unaudited
 
                                                             March 31,
                                                        2001           2000
     Loan Portfolio
     Commercial, Financial and Agricultural          $ 71,158       $ 55,446
     Real Estate - Commercial                          66,432         67,365
     Real Estate - Residential                        257,973        254,789
     Real Estate - Construction                         5,608          4,553
     Indirect Consumer Loans                          323,562        270,344
     Other Loans to Individuals                        19,074         26,595
     Total Loans                                     $743,807       $679,092
 
     Allowance for Loan Losses, First Quarter
     Allowance for Loan Losses, Beginning of Period    $8,727         $7,784
     Loans Charged-off                                  (242)          (245)
     Recoveries of Loans Previously Charged-off            90             96
     Net Loans Charged-off                              (152)          (149)
     Provision for Loan Losses                            381            405
     Allowance for Loan Losses, End of Period          $8,956         $8,040
     Nonperforming Assets
     Nonaccrual Loans                                  $2,000         $1,583
     Loans Past Due 90 or More Days and Accruing            1            492
     Restructured Loans                                    --             --
     Total Nonperforming Loans                          2,001          2,075
     Other Real Estate Owned                              274            540
     Repossessed Assets                                   169            135
     Total Nonperforming Assets                        $2,444         $2,750
 
     Key Asset Quality Ratios
     Net Loan Charge-offs to Average Loans,
      First Quarter Annualized                           .08%           .09%
     Provision for Loan Losses to Average Loans,
      First Quarter Annualized                            .21            .24
     Allowance for Loan Losses to Period-end Loans       1.20           1.18
     Allowance for Loan Losses to
      Nonperforming Loans                              447.58         387.47
     Nonperforming Loans to Period-end Loans              .27            .31
     Nonperforming Assets to Period-end Assets            .22            .27
 
 

SOURCE Arrow Financial Corporation
    GLENS FALLS, N.Y., April 18 /PRNewswire/ -- Arrow Financial Corporation
 announced operating results for the quarter ended March 31, 2001. Net income
 for the quarter was $3.5 million, representing diluted earnings per share of
 $.48, or 11.6% above the diluted per share amount of $.43 earned in the first
 quarter of 2000, when net income was $3.2 million. Core earnings, which
 exclude one-time material and nonrecurring items, were $3.4 million in 2001 as
 compared with $3.2 million for 2000. This represented a 9.3% increase in the
 core diluted per share amount, $.47 for 2001 versus $.43 for 2000. The
 quarterly cash dividend paid to shareholders in the first quarter of 2001 was
 $.21, or 10.5% higher than paid in last year's first quarter.
     Thomas L. Hoy, President and CEO stated, "We are pleased to report that
 the favorable per share earnings performance was accompanied by growth in
 several key balance sheet categories. Also, asset quality remained very high
 and credit losses were again very limited. Our asset management activities
 expanded during the quarter with the addition of North Country Investment
 Advisors, Inc., an SEC-registered investment advisor that we have formed. This
 new subsidiary will provide investment advisory services to the North Country
 Funds, which initially will include the North Country Equity Growth Fund
 (NCEGX) and the North Country Intermediate Bond Fund (NCBDX)."
     Mr. Hoy added, "The improved earnings essentially reflect an increase in
 tax equivalent net interest income, which in turn, resulted from growth in the
 level of average earning assets.  Tax equivalent net interest income in the
 quarter totaled $10.4 million, up 6.3% from the $9.8 million earned in 2000.
 Average earning assets were $1.043 billion in the 2001 quarter versus
 $953 million for the same quarter last year, an increase of 9.4%.  Mr. Hoy
 observed that net interest income was also favorably impacted by a rising net
 interest margin, which equaled 4.06% for the first quarter of 2001, up from
 3.92% in the fourth quarter of 2000 although below the 4.15% recorded in the
 first quarter of 2000.  "Federal Reserve Board actions to lower the targeted
 federal funds rate three times in the first quarter led to reductions in
 short-term funding costs.  This effect was the principal factor leading to the
 margin expansion as the volume of short-term sources of funds repricing in the
 quarter significantly exceeded the volume of assets repricing in the quarter."
     At March 31, 2001, the Company's total assets were $1.131 billion, up
 9.9% or $102 million over last year's quarter-end amount of $1.029 billion.
 Deposits at period-end were $874 million, which reflected an increase of
 3.7% or $31 million as compared with last year's amount of $843 million.
 Loans outstanding totaled $744 million versus $679 million at March 31, 2000
 and represented growth of 10.9% when adjusted to include the effect of
 mortgage loan securitizations.
     Mr. Hoy further added, "We are also pleased to report continuing excellent
 results in our key asset quality ratios.  At quarter-end 2001, nonperforming
 loans totaled $2.0 million representing a very low .27% of loans outstanding.
 This balance was virtually unchanged from nonperforming loan totals at both
 December 31, 2000 and March 31, 2000 despite the sizable growth in the loan
 portfolio.  Nonperforming assets were $2.4 million, down from the levels of
 $2.6 million at year-end 2000 and $2.8 million at March 31, 2000 and
 represented .22% of period-end assets.  Net loan losses were only .08% of
 average loans outstanding this year, even lower than the .09% ratio for the
 first quarter of 2000."
     Mr. Hoy said that construction will soon commence on Saratoga National
 Bank's previously announced 3rd branch office located in the City of Saratoga
 Springs.  He noted another upcoming milestone in the Company's history.
 "During the month of August we will celebrate Glens Falls National Bank and
 Trust Company's 150th anniversary.  We take great pride in the length of our
 service as financial partner to so many individuals, small businesses and
 municipalities."
 
     Arrow Financial Corporation is a multi-bank holding company headquartered
 in Glens Falls, NY with 25 banking locations in upstate New York.  Arrow is
 the parent of the Glens Falls National Bank and Trust Company and Saratoga
 National Bank and Trust Company.
 
     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 are "forward-looking statements" within the meaning of Section 21E
 of the Securities Exchange Act of 1934, as amended, and involve 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.  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, 2000.
 
                          ARROW FINANCIAL CORPORATION
                       CONSOLIDATED FINANCIAL INFORMATION
                    (In thousands, except per share amounts)
                                   Unaudited
                                                            Three Months
                                                           Ended March 31,
     Income Statement                                    2001           2000
     Interest Income                                  $19,711        $17,836
     Interest Expense                                   9,696          8,374
     Net Interest Income                               10,015          9,462
     Provision for Loan Losses                            381            405
     Net Interest Income
      After Provision for Loan Losses                   9,634          9,057
 
     Net Gains (Losses) on Securities Transactions          8            (4)
     Other Nonrecurring Income                            122             19
     Net Gain on Sale of Loans                              1              4
     Income from Fiduciary Activities                   1,049            905
     Fees for Other Services to Customers               1,168          1,149
     Other Operating Income                               149            236
     Total Other Income                                 2,497          2,309
 
     Salaries and Employee Benefits                     4,005          3,841
     Occupancy Expense of Premises, Net                   549            489
     Furniture and Equipment Expense                      622            641
     Amortization of Intangibles                          236            236
     Foreclosed Property Expense                           19             27
     Other Operating Expense                            1,669          1,584
     Total Other Expense                                7,100          6,818
 
     Income Before Taxes                                5,031          4,548
     Provision for Income Taxes                         1,525          1,367
     Net Income                                       $ 3,506        $ 3,181
 
     Share and Per Share Data
     Period Ending Shares Outstanding                   7,265          7,275
     Basic Average Shares Outstanding                   7,255          7,340
     Diluted Average Shares Outstanding                 7,338          7,442
 
 
     Basic Earnings Per Share                            $.48           $.43
     Diluted Earnings Per Share                           .48            .43
 
     Cash Dividends                                       .21            .19
 
     Diluted Earnings Per Share,
      based on Core Net Income (1)                        .47            .43
     Cash Diluted Earnings Per Share,
      based on Core Net Income (1,2)                      .49            .45
 
     Book Value                                         11.61           9.71
     Tangible Book Value (3)                            10.13           8.14
 
     Key Earnings Ratios
     Return on Average Assets                           1.29%          1.27%
     Return on Average Equity                           17.19          18.03
     Net Interest Margin                                 4.06           4.15
 
     1.  Core Net Income excludes gains/losses on securities transactions,
         one-time material and nonrecurring items of income and expense.
     2.  Cash Earnings Per Share adds back to core net income the amortization,
         net of tax, of goodwill associated with branch purchases.
     3.  Tangible Book Value excludes from total equity intangible assets,
         primarily goodwill associated with branch purchases.
 
                          ARROW FINANCIAL CORPORATION
                       CONSOLIDATED FINANCIAL INFORMATION
                                ($ in thousands)
                                   Unaudited
 
                                    March 31, 2001           March 31, 2000
                                              First                    First
                                Period       Quarter      Period      Quarter
     Balance Sheet               End         Average        End       Average
     Cash and Due from Banks   $23,539      $26,932       $24,464    $23,961
     Federal Funds Sold         56,400       11,018         4,000      4,449
     Securities
      Available-for-Sale       219,225      230,377       232,267    227,162
     Securities
      Held-to-Maturity          60,435       60,584        54,979     54,970
     Total Loans               743,807      741,095       679,092    666,041
     Allowance for
      Loan Losses              (8,956)      (8,831)       (8,040)    (7,923)
     Net Loans                 734,851      732,264       671,052    658,118
     Premises and Equipment,
      Net                       12,365       12,391        11,843     11,870
     Goodwill and
      Intangible Assets         10,715       10,832        11,454     11,656
     Other Assets               13,412       14,354        18,791     18,441
     Total Assets           $1,130,942   $1,098,752    $1,028,850 $1,010,627
     Demand Deposits          $119,768     $113,390     $ 106,817   $106,321
     Nonmaturity Interest-
      Bearing Deposits         406,014      385,837       377,232    364,206
     Time Deposits of
      $100,000 or More         149,168      156,966       159,540    137,385
     Other Time Deposits       198,952      199,931       199,303    200,354
     Total Deposits            873,902      856,124       842,892    808,266
     Short-Term Borrowings      28,287       38,214        26,889     37,879
     Federal Home Loan
      Bank Advances            125,000      101,790        70,000     74,730
     Other Long-Term Debt        5,000        5,000         5,000      5,000
     Other Liabilities          14,412       14,923        13,411     13,812
     Total Liabilities       1,046,601    1,016,051       958,192    939,687
     Common Stock                9,496        9,496         9,496      9,496
     Surplus                    85,561       85,560        85,480     85,479
     Undivided Profits          23,902       22,987        15,844     14,935
     Unallocated ESOP Shares   (2,377)      (2,387)       (2,383)    (2,368)
     Accumulated Other
      Comprehensive
       Income (Loss)             1,241          603       (4,803)    (4,972)
     Treasury Stock           (33,482)     (33,558)      (32,976)   (31,630)
     Total Shareholders'
      Equity                    84,341       82,701        70,658     70,940
     Total Liabilities and
      Shareholders' Equity  $1,130,942   $1,098,752    $1,028,850 $1,010,627
 
     Trust Assets Under
      Administration          $685,058                  $ 721,525
 
     Capital Ratios
     Leverage Ratio              7.12%                      6.86%
     Tier I Risk-based
      Capital Ratio              10.55                      10.29
     Total Risk-based
      Capital Ratio              11.77                      11.49
 
                          ARROW FINANCIAL CORPORATION
                       CONSOLIDATED FINANCIAL INFORMATION
                                ($ in thousands)
                                   Unaudited
 
                                                             March 31,
                                                        2001           2000
     Loan Portfolio
     Commercial, Financial and Agricultural          $ 71,158       $ 55,446
     Real Estate - Commercial                          66,432         67,365
     Real Estate - Residential                        257,973        254,789
     Real Estate - Construction                         5,608          4,553
     Indirect Consumer Loans                          323,562        270,344
     Other Loans to Individuals                        19,074         26,595
     Total Loans                                     $743,807       $679,092
 
     Allowance for Loan Losses, First Quarter
     Allowance for Loan Losses, Beginning of Period    $8,727         $7,784
     Loans Charged-off                                  (242)          (245)
     Recoveries of Loans Previously Charged-off            90             96
     Net Loans Charged-off                              (152)          (149)
     Provision for Loan Losses                            381            405
     Allowance for Loan Losses, End of Period          $8,956         $8,040
     Nonperforming Assets
     Nonaccrual Loans                                  $2,000         $1,583
     Loans Past Due 90 or More Days and Accruing            1            492
     Restructured Loans                                    --             --
     Total Nonperforming Loans                          2,001          2,075
     Other Real Estate Owned                              274            540
     Repossessed Assets                                   169            135
     Total Nonperforming Assets                        $2,444         $2,750
 
     Key Asset Quality Ratios
     Net Loan Charge-offs to Average Loans,
      First Quarter Annualized                           .08%           .09%
     Provision for Loan Losses to Average Loans,
      First Quarter Annualized                            .21            .24
     Allowance for Loan Losses to Period-end Loans       1.20           1.18
     Allowance for Loan Losses to
      Nonperforming Loans                              447.58         387.47
     Nonperforming Loans to Period-end Loans              .27            .31
     Nonperforming Assets to Period-end Assets            .22            .27
 
 SOURCE  Arrow Financial Corporation