Arrow Reports Year-Over-Year Loan Growth of 10.8% and $8.9 million in Q2 Net Income
- Total loans grew by $45.1 million in the second quarter of 2019.
- Second quarter net income was $8.9 million.
- Second quarter diluted earnings per share (EPS) of $0.62.
- Second quarter net interest income increased 3.6% over the prior-year comparable quarter.
- Continued strong profitability, asset quality and capital ratios.
GLENS FALLS, N.Y., July 22, 2019 /PRNewswire/ -- Arrow Financial Corporation (NasdaqGS® – AROW) announced operating results for the three-month period ended June 30, 2019. Net income for the second quarter of 2019 was $8.9 million, compared to $9.7 million in the second quarter of 2018. Steady loan growth continued in the second quarter of 2019, as total loans grew by $45.1 million from March 31, 2019 to $2.3 billion. Driven primarily by this growth, net interest income increased to $21.7 million in the second quarter of 2019, compared to $21.0 million for the comparable quarter of 2018.
Annualized key profitability ratios remained strong, as measured by a return on average equity of 12.79% and a return on average assets of 1.20% for the second quarter, compared to 15.22% and 1.38%, respectively, a year earlier.
"Thanks to the efforts of our team, Arrow continued its solid performance with steady loan growth and strong asset quality through the second quarter of the year," said President and CEO Thomas J. Murphy. "Our Company is well-positioned to adapt to the continuing changes in a complex rate environment. Additionally, we are making strategic lending decisions within our communities that will help our region thrive, and we are making important investments that will help us provide an enhanced customer experience."
The Company continued its forward momentum and expansion in the Capital Region with the opening of a new Saratoga National Bank and Trust Company office in Rotterdam, New York in the second quarter. Additionally, the company announced plans for the opening of its 12th Saratoga National Bank office, in Latham, New York, anticipated in early 2020.
The following expands on our second-quarter results:
Cash Dividend: On June 14, 2019, the Company distributed a cash dividend of $0.26 per share. The June 14, 2019 cash dividend was 7.1% higher than the $0.25 cash dividend paid by the Company in the second quarter of 2018, when adjusted for the 3% stock dividend distributed on September 27, 2018. The 2018 increase from $0.25 per share to $0.26 per share was the first increase in per share dividend amount since 2008.
Loan Growth: Total loans reached $2.3 billion as of June 30, 2019, which represents an increase of $222.4 million, or 10.8% as compared to June 30, 2018. The consumer loan portfolio grew by $117.1 million, or 17.7%, as compared to June 30, 2018, primarily within the indirect automobile lending program. The total residential real estate loan portfolio increased $60.0 million, or 7.4%, as compared to June 30, 2018. Total outstanding commercial loans increased $45.3 million, or 7.8%, as compared to June 30, 2018.
Deposit Growth: At June 30, 2019, deposit balances reached $2.5 billion, up $199.0 million, or 8.6%, from the prior-year level. Noninterest-bearing deposits represented 18.7% of total deposits at June 30, 2019. At June 30, 2019, other time deposits were $289.3 million, an increase of $119.7 million compared to the prior year. Time deposits include brokered deposits acquired to diversify source of funds to more favorable rates as compared to other borrowings.
Net Interest Income: Driven by strong loan growth, second quarter 2019 net interest income increased to $21.7 million, up 3.6% from $21.0 million in the comparable quarter of 2018. The net interest margin was 3.04% for the quarter, compared to 3.11% for the second quarter of 2018. The decrease in net interest margin from the prior year was the result of the migration to higher yielding deposit accounts due to rise in short-term market rates.
Noninterest Income: Noninterest income for the three months ended June 30, 2019, was $6.9 million, compared to $7.9 million in the comparable 2018 quarter. Despite the decline from the prior year, total noninterest income represented 24.1% of total revenues in the second quarter of 2019.
Noninterest Expense: Noninterest expense for the second quarter of 2019 increased 4.4% to $16.9 million, from $16.2 million for the second quarter of 2018. Technology and equipment expense increased $394 thousand, and other operating expense increased $409 thousand from the comparable quarter in 2018.
Provision for Income Taxes: The provision for income taxes was $2.3 million for the second quarter of both 2019 and 2018. The effective income tax rates for the three-month periods ended June 30, 2019 and 2018 were 20.5% and 19.3%, respectively.
Asset Quality: Asset quality remained strong at June 30, 2019, with continued low levels of nonperforming loans and net charge-offs. Nonperforming loans at June 30, 2019, were $5.5 million, up $26.0 thousand from the level at December 31, 2018. Net charge-offs, expressed as an annualized percentage of average loans outstanding, were 0.02% for the three-month period ended June 30, 2019, up from the prior-year comparable quarter of 0.01%. The allowance for loan losses was $20.7 million at June 30, 2019, which represented 0.91% of loans outstanding, as compared to 0.95% at June 30, 2018. The loss provision expense for the second quarter of 2019 was $455 thousand, down $174 thousand from the provision for the comparable 2018 quarter.
Capital: Total stockholders' equity was a record $284.6 million at June 30, 2019, up $25.2 million, or 9.7%, from the comparable quarter of 2018. Overall regulatory capital ratios also remained strong in 2019, with the Company's common equity tier 1 ratio estimated to be 12.99% and the total risk-based capital ratio estimated to be 14.91% at June 30, 2019. These capital levels at the Company and both its subsidiary banks continue to significantly exceed the "well capitalized" regulatory standard.
Industry Recognition: Both of the Company's banking subsidiaries maintained their BauerFinancial, Inc. 5-Star Superior Bank rating. Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company have continued to earn this designation for the last 49 and 41 quarters, respectively. In May, Seifried & Brew named Glens Falls National and Saratoga National to the top 15th percentile of Community Banks based on their performance in 2018.
About Arrow: 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.
Non-GAAP Financial Measures Reconciliation: 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."
Safe Harbor Statement: 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" 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, 2018, and other filings with the Securities and Exchange Commission.
250 Glen Street
Glens Falls, NY 12801
NASDAQ® Symbol: "AROW"
Website: arrowfinancial.com
ARROW FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, Except Per Share Amounts - Unaudited) | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
INTEREST AND DIVIDEND INCOME | ||||||||||||||||
Interest and Fees on Loans | $ | 23,520 | $ | 19,909 | $ | 45,923 | $ | 38,767 | ||||||||
Interest on Deposits at Banks | 195 | 158 | 390 | 292 | ||||||||||||
Interest and Dividends on Investment Securities: | ||||||||||||||||
Fully Taxable | 2,284 | 2,048 | 4,653 | 3,941 | ||||||||||||
Exempt from Federal Taxes | 1,228 | 1,475 | 2,474 | 3,008 | ||||||||||||
Total Interest and Dividend Income | 27,227 | 23,590 | 53,440 | 46,008 | ||||||||||||
INTEREST EXPENSE | ||||||||||||||||
Interest-Bearing Checking Accounts | 453 | 388 | 935 | 775 | ||||||||||||
Savings Deposits | 2,008 | 711 | 3,609 | 1,233 | ||||||||||||
Time Deposits over $250,000 | 515 | 328 | 911 | 532 | ||||||||||||
Other Time Deposits | 1,131 | 282 | 1,844 | 541 | ||||||||||||
Federal Funds Purchased and | 25 | 16 | 47 | 32 | ||||||||||||
Federal Home Loan Bank Advances | 1,099 | 656 | 2,693 | 1,070 | ||||||||||||
Junior Subordinated Obligations Issued to | 261 | 247 | 530 | 461 | ||||||||||||
Interest on Financing Leases | 28 | — | 43 | — | ||||||||||||
Total Interest Expense | 5,520 | 2,628 | 10,612 | 4,644 | ||||||||||||
NET INTEREST INCOME | 21,707 | 20,962 | 42,828 | 41,364 | ||||||||||||
Provision for Loan Losses | 455 | 629 | 927 | 1,375 | ||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR | 21,252 | 20,333 | 41,901 | 39,989 | ||||||||||||
NONINTEREST INCOME | ||||||||||||||||
Income From Fiduciary Activities | 2,252 | 2,647 | 4,359 | 4,844 | ||||||||||||
Fees for Other Services to Customers | 2,545 | 2,570 | 4,947 | 4,950 | ||||||||||||
Insurance Commissions | 1,935 | 2,192 | 3,654 | 4,095 | ||||||||||||
Net Gain on Securities Transactions | — | 223 | 76 | 241 | ||||||||||||
Net Gain on Sales of Loans | 140 | 23 | 244 | 61 | ||||||||||||
Other Operating Income | 24 | 256 | 503 | 609 | ||||||||||||
Total Noninterest Income | 6,896 | 7,911 | 13,783 | 14,800 | ||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||
Salaries and Employee Benefits | 9,727 | 9,812 | 19,046 | 19,181 | ||||||||||||
Occupancy Expenses, Net | 1,279 | 1,270 | 2,699 | 2,610 | ||||||||||||
Technology and Equipment Expense | 3,243 | 2,849 | 6,384 | 5,547 | ||||||||||||
FDIC Assessments | 212 | 223 | 424 | 440 | ||||||||||||
Other Operating Expense | 2,447 | 2,038 | 5,007 | 4,370 | ||||||||||||
Total Noninterest Expense | 16,908 | 16,192 | 33,560 | 32,148 | ||||||||||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 11,240 | 12,052 | 22,124 | 22,641 | ||||||||||||
Provision for Income Taxes | 2,306 | 2,322 | 4,456 | 4,380 | ||||||||||||
NET INCOME | $ | 8,934 | $ | 9,730 | $ | 17,668 | $ | 18,261 | ||||||||
Average Shares Outstanding 1: | ||||||||||||||||
Basic | 14,487 | 14,394 | 14,478 | 14,374 | ||||||||||||
Diluted | 14,527 | 14,480 | 14,523 | 14,459 | ||||||||||||
Per Common Share: | ||||||||||||||||
Basic Earnings | $ | 0.62 | $ | 0.68 | $ | 1.22 | $ | 1.27 | ||||||||
Diluted Earnings | 0.62 | 0.67 | 1.22 | 1.26 | ||||||||||||
1 2018 Share and Per Share Amounts have been restated for the September 27, 2018, 3% stock dividend. | ||||||||||||||||
ARROW FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Amounts - Unaudited) | |||||||||||||
June 30, 2019 | December 31, 2018 | June 30, 2018 | |||||||||||
ASSETS | |||||||||||||
Cash and Due From Banks | $ | 34,650 | $ | 56,529 | $ | 38,552 | |||||||
Interest-Bearing Deposits at Banks | 28,045 | 27,710 | 22,189 | ||||||||||
Investment Securities: | |||||||||||||
Available-for-Sale | 285,878 | 317,535 | 325,387 | ||||||||||
Held-to-Maturity (Approximate Fair Value of $266,068 at June 30, 2019; $280,338 at December 31, 2018; and $292,605 at June 30, 2018) | 262,541 | 283,476 | 297,885 | ||||||||||
Equity Securities | 1,850 | 1,774 | 1,802 | ||||||||||
Other Investments | 8,202 | 15,506 | 11,089 | ||||||||||
Loans | 2,280,308 | 2,196,215 | 2,057,862 | ||||||||||
Allowance for Loan Losses | (20,695) | (20,196) | (19,640) | ||||||||||
Net Loans | 2,259,613 | 2,176,019 | 2,038,222 | ||||||||||
Premises and Equipment, Net | 38,836 | 30,446 | 28,104 | ||||||||||
Goodwill | 21,873 | 21,873 | 21,873 | ||||||||||
Other Intangible Assets, Net | 1,730 | 1,852 | 2,060 | ||||||||||
Other Assets | 62,532 | 55,614 | 58,008 | ||||||||||
Total Assets | $ | 3,005,750 | $ | 2,988,334 | $ | 2,845,171 | |||||||
LIABILITIES | |||||||||||||
Noninterest-Bearing Deposits | $ | 467,179 | $ | 472,768 | $ | 467,048 | |||||||
Interest-Bearing Checking Accounts | 741,395 | 790,781 | 861,959 | ||||||||||
Savings Deposits | 908,642 | 818,048 | 735,217 | ||||||||||
Time Deposits over $250,000 | 97,220 | 73,583 | 70,950 | ||||||||||
Other Time Deposits | 289,317 | 190,404 | 169,607 | ||||||||||
Total Deposits | 2,503,753 | 2,345,584 | 2,304,781 | ||||||||||
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase | 51,149 | 54,659 | 60,248 | ||||||||||
Federal Home Loan Bank Overnight Advances | 83,000 | 234,000 | 136,000 | ||||||||||
Federal Home Loan Bank Term Advances | 30,000 | 45,000 | 45,000 | ||||||||||
Junior Subordinated Obligations Issued to Unconsolidated | 20,000 | 20,000 | 20,000 | ||||||||||
Finance Leases | 5,270 | — | — | — | — | ||||||||
Other Liabilities | 27,929 | 19,507 | 19,654 | ||||||||||
Total Liabilities | 2,721,101 | 2,718,750 | 2,585,683 | ||||||||||
STOCKHOLDERS' EQUITY | |||||||||||||
Preferred Stock, $1 Par Value and 1,000,000 Shares Authorized at June 30, 2019; $5 Par Value and 1,000,000 Shares Authorized at December 31, 2018 and June 30, 2018 | — | — | — | ||||||||||
Common Stock, $1 Par Value; 30,000,000 Shares Authorized at June 30, 2019 and 20,000,000 Shares Authorized at December 31, 2018 and June 30, 2018 (19,035,565 Shares Issued at June 30, 2019 and December 31, 2018 and 18,481,301 at June 30, 2018) | 19,035 | 19,035 | 18,481 | ||||||||||
Additional Paid-in Capital | 316,229 | 314,533 | 292,020 | ||||||||||
Retained Earnings | 39,397 | 29,257 | 40,326 | ||||||||||
Unallocated ESOP Shares (5,001 Shares at June 30, 2019; 5,001 Shares at December 31, 2018 and 9,643 Shares at June 30, 2018) | (100) | (100) | (200) | ||||||||||
Accumulated Other Comprehensive Loss | (9,647) | (13,810) | (11,804) | ||||||||||
Treasury Stock, at Cost (4,517,412 Shares at June 30, 2019; 4,558,207 Shares at December 31, 2018 and 4,467,909 Shares at June 30, 2018) | (80,265) | (79,331) | (79,335) | ||||||||||
Total Stockholders' Equity | 284,649 | 269,584 | 259,488 | ||||||||||
Total Liabilities and Stockholders' Equity | $ | 3,005,750 | $ | 2,988,334 | $ | 2,845,171 | |||||||
Arrow Financial Corporation Selected Quarterly Information (Dollars In Thousands, Except Per Share Amounts - Unaudited) | |||||||||||||||||||
Quarter Ended | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | ||||||||||||||
Net Income | $ | 8,934 | $ | 8,734 | $ | 8,758 | $ | 9,260 | $ | 9,730 | |||||||||
Transactions in Net Income (Net of Tax): | |||||||||||||||||||
Net Changes in Fair Value of Equity Investments | — | 57 | (106) | 85 | 166 | ||||||||||||||
Share and Per Share Data:1 | |||||||||||||||||||
Period End Shares Outstanding | 14,513 | 14,474 | 14,472 | 14,441 | 14,424 | ||||||||||||||
Basic Average Shares Outstanding | 14,487 | 14,469 | 14,451 | 14,431 | 14,394 | ||||||||||||||
Diluted Average Shares Outstanding | 14,527 | 14,520 | 14,514 | 14,520 | 14,480 | ||||||||||||||
Basic Earnings Per Share | $ | 0.62 | $ | 0.60 | $ | 0.61 | $ | 0.64 | $ | 0.68 | |||||||||
Diluted Earnings Per Share | 0.62 | 0.60 | 0.60 | 0.64 | 0.67 | ||||||||||||||
Cash Dividend Per Share | 0.260 | 0.260 | 0.260 | 0.252 | 0.243 | ||||||||||||||
Selected Quarterly Average Balances: | |||||||||||||||||||
Interest-Bearing Deposits at Banks | $ | 25,107 | $ | 26,163 | $ | 34,782 | $ | 30,522 | $ | 28,543 | |||||||||
Investment Securities | 584,679 | 611,161 | 637,341 | 636,847 | 647,913 | ||||||||||||||
Loans | 2,255,299 | 2,210,642 | 2,160,435 | 2,089,651 | 2,026,598 | ||||||||||||||
Deposits | 2,436,290 | 2,347,985 | 2,347,231 | 2,279,709 | 2,325,202 | ||||||||||||||
Other Borrowed Funds | 250,283 | 327,138 | 315,172 | 314,304 | 219,737 | ||||||||||||||
Shareholders' Equity | 280,247 | 272,864 | 268,503 | 263,139 | 256,358 | ||||||||||||||
Total Assets | 2,997,458 | 2,977,056 | 2,954,029 | 2,879,854 | 2,823,061 | ||||||||||||||
Return on Average Assets, annualized | 1.20 | % | 1.19 | % | 1.18 | % | 1.28 | % | 1.38 | % | |||||||||
Return on Average Equity, annualized | 12.79 | % | 12.98 | % | 12.94 | % | 13.96 | % | 15.22 | % | |||||||||
Return on Average Tangible Equity, annualized 2 | 13.96 | % | 14.22 | % | 14.20 | % | 15.36 | % | 16.80 | % | |||||||||
Average Earning Assets | $ | 2,865,085 | $ | 2,847,966 | $ | 2,832,558 | $ | 2,757,020 | $ | 2,703,054 | |||||||||
Average Paying Liabilities | 2,235,462 | 2,224,403 | 2,189,233 | 2,110,924 | 2,100,085 | ||||||||||||||
Interest Income | 27,227 | 26,213 | 26,000 | 24,495 | 23,590 | ||||||||||||||
Tax-Equivalent Adjustment 3 | 376 | 373 | 376 | 376 | 468 | ||||||||||||||
Interest Income, Tax-Equivalent 3 | 27,603 | 26,586 | 26,376 | 24,871 | 24,058 | ||||||||||||||
Interest Expense | 5,520 | 5,092 | 4,343 | 3,498 | 2,628 | ||||||||||||||
Net Interest Income | 21,707 | 21,121 | 21,657 | 20,997 | 20,962 | ||||||||||||||
Net Interest Income, Tax-Equivalent 3 | 22,083 | 21,494 | 22,033 | 21,373 | 21,430 | ||||||||||||||
Net Interest Margin, annualized | 3.04 | % | 3.01 | % | 3.03 | % | 3.02 | % | 3.11 | % | |||||||||
Net Interest Margin, Tax-Equivalent, annualized 3 | 3.09 | % | 3.06 | % | 3.09 | % | 3.08 | % | 3.18 | % | |||||||||
Efficiency Ratio Calculation: 4 | |||||||||||||||||||
Noninterest Expense | $ | 16,908 | $ | 16,652 | $ | 16,881 | $ | 16,026 | $ | 16,192 | |||||||||
Less: Intangible Asset Amortization | 44 | 79 | 65 | 65 | 66 | ||||||||||||||
Net Noninterest Expense | $ | 16,864 | $ | 16,573 | $ | 16,816 | $ | 15,961 | $ | 16,126 | |||||||||
Net Interest Income, Tax-Equivalent | $ | 22,083 | $ | 21,494 | $ | 22,033 | $ | 21,373 | $ | 21,430 | |||||||||
Noninterest Income | 6,896 | 6,887 | 6,799 | 7,350 | 7,911 | ||||||||||||||
Less: Net Changes in Fair Value of Equity Invest. | — | 76 | (142) | 114 | 223 | ||||||||||||||
Net Gross Income | $ | 28,979 | $ | 28,305 | $ | 28,974 | $ | 28,609 | $ | 29,118 | |||||||||
Efficiency Ratio | 58.19 | % | 58.55 | % | 58.04 | % | 55.79 | % | 55.38 | % | |||||||||
Period-End Capital Information: | |||||||||||||||||||
Total Stockholders' Equity (i.e. Book Value) | $ | 284,649 | $ | 276,609 | $ | 269,584 | $ | 264,810 | $ | 259,488 | |||||||||
Book Value per Share 1 | 19.61 | 19.11 | 18.63 | 18.34 | 17.99 | ||||||||||||||
Goodwill and Other Intangible Assets, net | 23,603 | 23,650 | 23,725 | 23,827 | 23,933 | ||||||||||||||
Tangible Book Value per Share 1,2 | 17.99 | 17.48 | 16.99 | 16.69 | 16.33 | ||||||||||||||
Capital Ratios:5 | |||||||||||||||||||
Tier 1 Leverage Ratio | 9.88 | % | 9.73 | % | 9.61 | % | 9.67 | % | 9.65 | % | |||||||||
Common Equity Tier 1 Capital Ratio | 12.99 | % | 12.98 | % | 12.89 | % | 12.89 | % | 13.01 | % | |||||||||
Tier 1 Risk-Based Capital Ratio | 13.93 | % | 13.95 | % | 13.87 | % | 13.90 | % | 14.04 | % | |||||||||
Total Risk-Based Capital Ratio | 14.91 | % | 14.93 | % | 14.86 | % | 14.90 | % | 15.06 | % | |||||||||
Assets Under Trust Admin. & Investment Mgmt. | $ | 1,496,966 | $ | 1,483,259 | $ | 1,385,752 | $ | 1,551,289 | $ | 1,479,753 | |||||||||
Arrow Financial Corporation Selected Quarterly Information - Continued (Dollars In Thousands, Except Per Share Amounts - Unaudited) | ||||||||||||||||||||
Footnotes: | ||||||||||||||||||||
1. | Share and Per Share Data have been restated for the September 27, 2018, 3% stock dividend. | |||||||||||||||||||
2. | Non-GAAP Financial Measures Reconciliation: Tangible Book Value and 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. | |||||||||||||||||||
6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | ||||||||||||||||
Total Stockholders' Equity (GAAP) | $ | 284,649 | $ | 276,609 | $ | 269,584 | $ | 264,810 | $ | 259,488 | ||||||||||
Less: Goodwill and Other Intangible assets, net | 23,603 | 23,650 | 23,725 | 23,827 | 23,933 | |||||||||||||||
Tangible Equity (Non-GAAP) | $ | 261,046 | $ | 252,959 | $ | 245,859 | $ | 240,983 | $ | 235,555 | ||||||||||
Period End Shares Outstanding | 14,513 | 14,474 | 14,472 | 14,441 | 14,424 | |||||||||||||||
Tangible Book Value per Share (Non-GAAP) | $ | 17.99 | $ | 17.48 | $ | 16.99 | $ | 16.69 | $ | 16.33 | ||||||||||
Net Income | 8,934 | 8,734 | 8,758 | 9,260 | 9,730 | |||||||||||||||
Return on Tangible Equity (Net Income/Tangible Equity - Annualized) | 13.96 | % | 14.22 | % | 14.20 | % | 15.36 | % | 16.80 | % | ||||||||||
3. | Non-GAAP Financial Measures Reconciliation: Net Interest Margin, Tax-Equivalent 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. | |||||||||||||||||||
6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | ||||||||||||||||
Interest Income (GAAP) | $ | 27,227 | $ | 26,213 | $ | 26,000 | $ | 24,495 | $ | 23,590 | ||||||||||
Add: Tax-Equivalent adjustment | 376 | 373 | 376 | 376 | 468 | |||||||||||||||
Interest Income - Tax Equivalent | $ | 27,603 | $ | 26,586 | $ | 26,376 | $ | 24,871 | $ | 24,058 | ||||||||||
Net Interest Income (GAAP) | $ | 21,707 | $ | 21,121 | $ | 21,657 | $ | 20,997 | $ | 20,962 | ||||||||||
Add: Tax-Equivalent adjustment | 376 | 373 | 376 | 376 | 468 | |||||||||||||||
Net Interest Income - Tax Equivalent | $ | 22,083 | $ | 21,494 | $ | 22,033 | $ | 21,373 | $ | 21,430 | ||||||||||
Average Earning Assets | $ | 2,865,085 | $ | 2,847,966 | $ | 2,832,558 | $ | 2,757,020 | $ | 2,703,054 | ||||||||||
Net Interest Margin (Non-GAAP)* | 3.09 | % | 3.06 | % | 3.09 | % | 3.08 | % | 3.18 | % | ||||||||||
4. | Non-GAAP Financial Measures: 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 CET1 ratio at June 30, 2019 listed in the tables (i.e., 12.99%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%). | |||||||||||||||||||
6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | ||||||||||||||||
Total Risk Weighted Assets | $ | 2,121,541 | $ | 2,075,115 | $ | 2,046,495 | $ | 1,999,849 | $ | 1,934,890 | ||||||||||
Common Equity Tier 1 Capital | 275,528 | 269,363 | 263,863 | 257,852 | 251,666 | |||||||||||||||
Common Equity Tier 1 Ratio | 12.99 | % | 12.98 | % | 12.89 | % | 12.89 | % | 13.01 | % | ||||||||||
* Quarterly ratios have been annualized | ||||||||||||||||||||
Arrow Financial Corporation Consolidated Financial Information (Dollars in Thousands - Unaudited) | |||||||||||
Quarter Ended: | 6/30/2019 | 12/31/2018 | 6/30/2018 | ||||||||
Loan Portfolio | |||||||||||
Commercial Loans | $ | 138,331 | $ | 136,890 | $ | 118,881 | |||||
Commercial Real Estate Loans | 490,274 | 484,562 | 464,393 | ||||||||
Subtotal Commercial Loan Portfolio | 628,605 | 621,452 | 583,274 | ||||||||
Consumer Loans | 779,024 | 719,510 | 661,908 | ||||||||
Residential Real Estate Loans | 872,679 | 855,253 | 812,680 | ||||||||
Total Loans | $ | 2,280,308 | $ | 2,196,215 | $ | 2,057,862 | |||||
Allowance for Loan Losses | |||||||||||
Allowance for Loan Losses, Beginning of Quarter | $ | 20,373 | $ | 20,003 | $ | 19,057 | |||||
Loans Charged-off | (368) | (573) | (264) | ||||||||
Less Recoveries of Loans Previously Charged-off | 235 | 120 | 218 | ||||||||
Net Loans Charged-off | (133) | (453) | (46) | ||||||||
Provision for Loan Losses | 455 | 646 | 629 | ||||||||
Allowance for Loan Losses, End of Quarter | $ | 20,695 | $ | 20,196 | $ | 19,640 | |||||
Nonperforming Assets | |||||||||||
Nonaccrual Loans | $ | 4,949 | $ | 4,159 | $ | 3,880 | |||||
Loans Past Due 90 or More Days and Accruing | 457 | 1,225 | 170 | ||||||||
Loans Restructured and in Compliance with Modified Terms | 142 | 138 | 106 | ||||||||
Total Nonperforming Loans | 5,548 | 5,522 | 4,156 | ||||||||
Repossessed Assets | 115 | 130 | 76 | ||||||||
Other Real Estate Owned | 1,258 | 1,130 | 1,412 | ||||||||
Total Nonperforming Assets | $ | 6,921 | $ | 6,782 | $ | 5,644 | |||||
Key Asset Quality Ratios | |||||||||||
Net Loans Charged-off to Average Loans, Quarter-to-date Annualized | 0.02 | % | 0.08 | % | 0.01 | % | |||||
Provision for Loan Losses to Average Loans, Quarter-to-date Annualized | 0.08 | % | 0.12 | % | 0.12 | % | |||||
Allowance for Loan Losses to Period-End Loans | 0.91 | % | 0.92 | % | 0.95 | % | |||||
Allowance for Loan Losses to Period-End Nonperforming Loans | 373.02 | % | 365.74 | % | 472.57 | % | |||||
Nonperforming Loans to Period-End Loans | 0.24 | % | 0.25 | % | 0.20 | % | |||||
Nonperforming Assets to Period-End Assets | 0.23 | % | 0.23 | % | 0.20 | % | |||||
Six-Month Period Ended: | |||||||||||
Allowance for Loan Losses | |||||||||||
Allowance for Loan Losses, Beginning of Year | $ | 20,196 | $ | 18,586 | |||||||
Loans Charged-off | (830) | (634) | |||||||||
Less Recoveries of Loans Previously Charged-off | 402 | 313 | |||||||||
Net Loans Charged-off | (428) | (321) | |||||||||
Provision for Loan Losses | 927 | 1,375 | |||||||||
Allowance for Loan Losses, End of Period | $ | 20,695 | $ | 19,640 | |||||||
Key Asset Quality Ratios | |||||||||||
Net Loans Charged-off to Average Loans, Annualized | 0.04 | % | 0.03 | % | |||||||
Provision for Loan Losses to Average Loans, Annualized | 0.08 | % | 0.14 | % | |||||||
SOURCE Arrow Financial Corporation
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