Arrow Third-Quarter Net Income Up 10.1%; Double-Digit Loan Growth Continues
-- Third-quarter net income increased 10.1% year over year to $7.4 million.
GLENS FALLS, N.Y., Oct. 23, 2017 /PRNewswire/ -- Arrow Financial Corporation (NasdaqGS: AROW) announced operating results for the three and nine-month periods ended September 30, 2017. Net income for the third quarter of 2017 was $7.4 million, an increase of $678 thousand, or 10.1%, from net income of $6.7 million a year earlier. Diluted earnings per share (EPS) for the third quarter was $0.53, an increase of 10.4% from diluted EPS of $0.48 during the comparable 2016 quarter.
Annualized key profitability ratios continue to remain strong, as measured by a return on average equity (ROE) of 12.07% and a return on average assets (ROA) of 1.08% for the third quarter, compared to 11.75% and 1.06% a year earlier.
Arrow President and CEO Thomas J. Murphy stated, "Our solid performance on the lending side, as well as our strategic expansion into new markets, contributed again to new records for total assets, total deposits, total loans, total equity and assets under trust administration, all while maintaining healthy profitability and asset quality ratios. I am proud of the entire team for their contributions toward our success."
During the third quarter, Arrow subsidiary Saratoga National Bank and Trust Company completed the final steps toward establishing its 10th branch, located in Schenectady. The new office opened October 10, 2017 and expands the brand's presence in the Capital District. Also in the third quarter, Arrow's lead subsidiary, Glens Falls National Bank and Trust Company, legally merged its two property and casualty insurance agencies; they are now operating as one unified business line as Upstate Agency LLC.
The following expands upon third-quarter results:
Net Interest Income: In the third quarter of 2017, net interest income on a GAAP basis increased to $19.7 million, up 9.9% over the $17.9 million total in the comparable quarter of 2016. On a tax-equivalent (non-GAAP) basis, net interest income increased by 9.6%, compared to the third quarter of 2016. Net interest margin, measured on a tax-equivalent (non-GAAP) basis, increased slightly to 3.15% from 3.12% in the prior-year quarter.
Loan Growth: Over the 12 months ended September 30, 2017, total loans increased to a record high of $1.9 billion, up $201.6 million, or 11.8%, from the September 30, 2016 level. Over the nine-month period ended September 30, 2017, total loans grew $155.5 million, or 8.9%. During the third quarter of 2017, total loans grew by $30.2 million, or 1.6% as compared to the second quarter of 2017. There was growth in all three major loan segments: commercial, consumer and residential real estate.
During the third quarter of 2017, the consumer loan portfolio grew $13.3 million, or 2.3%, to $592 million at period-end. This balance exceeded the prior year's by $68.3 million, or 13.0%. The increase was primarily a result of growth in the indirect automobile lending program. Total outstanding commercial loans decreased 0.4% during the third quarter to $566.1 million on September 30, 2017, but was up $34.0 million, or 6.4%, from September 30, 2016. The residential real estate loan portfolio increased $18.9 million, or 2.6%, during the third quarter of 2017 to $750.7 million, up $99.2 million, or 15.2%, over the balance at September 30, 2016.
Deposit Growth: At September 30, 2017, deposit balances reached $2.3 billion, up $93.9 million, or 4.2%, from the prior-year level. Deposit growth was spread across both personal and business accounts. Noninterest-bearing demand deposits increased $66.8 million, or 17.5%, from the prior-year level, which had a positive impact on net interest margin. Noninterest-bearing demand deposits represented 19.4% of total deposits at September 30, 2017, compared to 17.2% at the 2016 quarter-end.
Assets Under Management: Assets under trust administration and investment management reached a record high of $1.4 billion at September 30, 2017. Assets under trust administration increased by $127.6 million, or 9.9%, from the balance at September 30, 2016, primarily due to the performance of the equity markets.
Asset Quality: Asset quality remained strong at September 30, 2017, as measured by continuing comparatively low levels of nonperforming assets and net charge-offs. Nonperforming assets at September 30, 2017, were $9.0 million, up $1.2 million, or 15.6%, from the prior-year level. Net charge-offs, expressed as an annualized percentage of average loans outstanding, were 0.11% for the three-month period ended September 30, 2017, up slightly from the prior-year quarter level of 0.07%.
Allowance for loan losses was $17.7 million at September 30, 2017, which represented 0.93% of loans outstanding. The provision for loan losses for the third quarter of 2017 was $800 thousand, up $320 thousand from the provision for the comparable 2016 quarter. The provision for loan losses for the year-to-date was $1.58 million, up $29.0 thousand from the prior year amount of $1.55 million.
Noninterest Income: Noninterest income for the three-month period ended September 30, 2017, increased 0.4% from the comparable 2016 quarter. Income from fiduciary activities increased during the quarter by $193 thousand, or 10.0%, over the amount for the third quarter of 2016. Income from fiduciary activities year to date increased $430 thousand, or 7.3%, over the year-to-date amount for September 30, 2016.
Noninterest Expense: Salaries and employee benefits increased in the third quarter of 2017 by $558 thousand, or 6.4%, over the same 2016 quarter. This increase was driven primarily by a $376 thousand, or 5.8%, increase in the salary expense, due in part to staffing expansion as well as normal increases for existing employees. Employee benefit expenses increased by $184 thousand, or 10.2%, primarily due to increases in medical costs.
Cash and Stock Dividends: On September 15, 2017, we distributed a cash dividend to shareholders of $0.250 which was subsequently restated to $0.243 per share adjusting for the 3% stock dividend distributed on September 28, 2017. The cash dividend was 3% higher than the cash dividend paid in the third quarter of 2016 when adjusted for the 3% stock dividend.
Capital: Total stockholders' equity was a record $244.6 million at period-end, up $15.4 million, or 6.7%, from the prior-year. This increase exceeded the 6.4% increase in total assets over the same period. Overall regulatory capital ratios also remained strong in 2017. At September 30, 2017, the Company's Common Equity Tier 1 Ratio was estimated to be 12.70% and the Total Risk-Based Capital Ratio was estimated to be 14.77%. These capital levels at the Company and both its subsidiary banks continue to significantly exceed the "well capitalized" regulatory standard.
Provision for Income Taxes: The effective income tax rates for the nine-month periods ended September 30, 2017 and 2016 were 29.1% and 30.0%, respectively. The decrease in the 2017 period relates primarily to current accounting standards for equity compensation under which income tax benefits from stock options exercised in the period reduced the effective tax rate from the prior year period. Under the previous accounting standards, the tax benefits would have impacted equity directly. The year-to-date impact on earnings per share was less than $0.01.
Industry Recognition: Both of the Company's two 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 43 and 35 quarters, respectively.
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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.; Upstate Agency, LLC, specializing in property and casualty insurance; and Capital Financial Group, Inc., specializing in the sale and servicing of group health plans.
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."
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, 2016, and other filings with the Securities and Exchange Commission.
ARROW FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, Except Per Share Amounts - Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
INTEREST AND DIVIDEND INCOME | ||||||||||||||||
Interest and Fees on Loans | $ | 17,996 | $ | 15,833 | $ | 51,693 | $ | 46,565 | ||||||||
Interest on Deposits at Banks | 104 | 34 | 242 | 100 | ||||||||||||
Interest and Dividends on Investment Securities: | ||||||||||||||||
Fully Taxable | 1,924 | 1,889 | 5,927 | 5,994 | ||||||||||||
Exempt from Federal Taxes | 1,575 | 1,526 | 4,660 | 4,486 | ||||||||||||
Total Interest and Dividend Income | 21,599 | 19,282 | 62,522 | 57,145 | ||||||||||||
INTEREST EXPENSE | ||||||||||||||||
Interest-Bearing Checking Accounts | 376 | 320 | 1,088 | 941 | ||||||||||||
Savings Deposits | 356 | 231 | 963 | 677 | ||||||||||||
Time Deposits over $250,000 | 66 | 61 | 187 | 133 | ||||||||||||
Other Time Deposits | 241 | 231 | 702 | 677 | ||||||||||||
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase | 13 | 9 | 29 | 24 | ||||||||||||
Federal Home Loan Bank Advances | 700 | 390 | 1,651 | 1,013 | ||||||||||||
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts | 197 | 163 | 564 | 487 | ||||||||||||
Total Interest Expense | 1,949 | 1,405 | 5,184 | 3,952 | ||||||||||||
NET INTEREST INCOME | 19,650 | 17,877 | 57,338 | 53,193 | ||||||||||||
Provision for Loan Losses | 800 | 480 | 1,580 | 1,550 | ||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR | 18,850 | 17,397 | 55,758 | 51,643 | ||||||||||||
NONINTEREST INCOME | ||||||||||||||||
Income From Fiduciary Activities | 2,116 | 1,923 | 6,284 | 5,854 | ||||||||||||
Fees for Other Services to Customers | 2,453 | 2,491 | 7,122 | 7,144 | ||||||||||||
Insurance Commissions | 2,113 | 2,127 | 6,426 | 6,468 | ||||||||||||
Net Gain on Securities Transactions | 10 | — | 10 | 144 | ||||||||||||
Net Gain on Sales of Loans | 182 | 310 | 431 | 649 | ||||||||||||
Other Operating Income | 267 | 263 | 620 | 925 | ||||||||||||
Total Noninterest Income | 7,141 | 7,114 | 20,893 | 21,184 | ||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||
Salaries and Employee Benefits | 9,251 | 8,693 | 27,343 | 25,223 | ||||||||||||
Occupancy Expenses, Net | 2,371 | 2,425 | 7,410 | 7,223 | ||||||||||||
FDIC Assessments | 225 | 217 | 679 | 844 | ||||||||||||
Other Operating Expense | 3,701 | 3,747 | 11,229 | 11,047 | ||||||||||||
Total Noninterest Expense | 15,548 | 15,082 | 46,661 | 44,337 | ||||||||||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 10,443 | 9,429 | 29,990 | 28,490 | ||||||||||||
Provision for Income Taxes | 3,027 | 2,691 | 8,735 | 8,556 | ||||||||||||
NET INCOME | $ | 7,416 | $ | 6,738 | $ | 21,255 | $ | 19,934 | ||||||||
Average Shares Outstanding 1: | ||||||||||||||||
Basic | 13,889 | 13,810 | 13,889 | 13,775 | ||||||||||||
Diluted | 13,966 | 13,901 | 13,981 | 13,842 | ||||||||||||
Per Common Share: | ||||||||||||||||
Basic Earnings | $ | 0.53 | $ | 0.49 | $ | 1.53 | $ | 1.45 | ||||||||
Diluted Earnings | 0.53 | 0.48 | 1.52 | 1.44 | ||||||||||||
1 Share and per share data have been restated for the September 28, 2017, 3% stock dividend. | ||||||||||||||||
ARROW FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Amounts - Unaudited) | |||||||||||
September 30, | December 31, | September 30, | |||||||||
ASSETS | |||||||||||
Cash and Due From Banks | $ | 55,683 | $ | 43,024 | $ | 66,556 | |||||
Interest-Bearing Deposits at Banks | 24,983 | 14,331 | 35,503 | ||||||||
Investment Securities: | |||||||||||
Available-for-Sale | 315,459 | 346,996 | 339,190 | ||||||||
Held-to-Maturity (Approximate Fair Value of $343,899 at September 30, 2017; $343,751 at December 31, 2016; and $347,441 at September 30, 2016) | 341,526 | 345,427 | 338,238 | ||||||||
Other Investments | 6,704 | 10,912 | 5,371 | ||||||||
Loans | 1,908,799 | 1,753,268 | 1,707,216 | ||||||||
Allowance for Loan Losses | (17,695) | (17,012) | (16,975) | ||||||||
Net Loans | 1,891,104 | 1,736,256 | 1,690,241 | ||||||||
Premises and Equipment, Net | 26,432 | 26,938 | 26,718 | ||||||||
Goodwill | 21,873 | 21,873 | 21,873 | ||||||||
Other Intangible Assets, Net | 2,395 | 2,696 | 2,802 | ||||||||
Other Assets | 58,303 | 56,789 | 53,993 | ||||||||
Total Assets | $ | 2,744,462 | $ | 2,605,242 | $ | 2,580,485 | |||||
LIABILITIES | |||||||||||
Noninterest-Bearing Deposits | $ | 448,515 | $ | 387,280 | $ | 381,760 | |||||
Interest-Bearing Checking Accounts | 967,250 | 877,988 | 993,221 | ||||||||
Savings Deposits | 696,805 | 651,965 | 629,201 | ||||||||
Time Deposits over $250,000 | 28,464 | 32,878 | 45,237 | ||||||||
Other Time Deposits | 166,082 | 166,435 | 163,768 | ||||||||
Total Deposits | 2,307,116 | 2,116,546 | 2,213,187 | ||||||||
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase | 61,419 | 35,836 | 38,589 | ||||||||
Federal Home Loan Bank Overnight Advances | 33,000 | 123,000 | — | ||||||||
Federal Home Loan Bank Term Advances | 55,000 | 55,000 | 55,000 | ||||||||
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts | 20,000 | 20,000 | 20,000 | ||||||||
Other Liabilities | 23,279 | 22,008 | 24,501 | ||||||||
Total Liabilities | 2,499,814 | 2,372,390 | 2,351,277 | ||||||||
STOCKHOLDERS' EQUITY | |||||||||||
Preferred Stock, $5 Par Value; 1,000,000 Shares Authorized | — | — | — | ||||||||
Common Stock, $1 Par Value; 20,000,000 Shares Authorized (18,481,301 Shares Issued and Outstanding at September 30, 2017; 17,943,201 at | 18,481 | 17,943 | 17,943 | ||||||||
Additional Paid-in Capital | 289,294 | 270,880 | 269,680 | ||||||||
Retained Earnings | 22,581 | 28,644 | 25,400 | ||||||||
Unallocated ESOP Shares (20,050 Shares at September 30, 2017; 19,466 Shares at December 31, 2016 and 38,396 Shares at September 30, 2016) | (400) | (400) | (750) | ||||||||
Accumulated Other Comprehensive Loss | (6,135) | (6,834) | (5,442) | ||||||||
Treasury Stock, at Cost (4,570,291 Shares at September 30, 2017; 4,441,093 Shares at December 31, 2016 and 4,479,257 Shares at September 30, 2016) | (79,173) | (77,381) | (77,623) | ||||||||
Total Stockholders' Equity | 244,648 | 232,852 | 229,208 | ||||||||
Total Liabilities and Stockholders' Equity | $ | 2,744,462 | $ | 2,605,242 | $ | 2,580,485 | |||||
Arrow Financial Corporation Selected Quarterly Information (Dollars In Thousands, Except Per Share Amounts - Unaudited) | |||||||||||||||||||
Quarter Ended | 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | ||||||||||||||
Net Income | 7,416 | 7,208 | 6,631 | 6,600 | 6,738 | ||||||||||||||
Transactions Recorded in Net Income (Net of Tax): | |||||||||||||||||||
Net (Loss) Gain on Securities Transactions | 6 | — | — | (101) | — | ||||||||||||||
Share and Per Share Data:1 | |||||||||||||||||||
Period End Shares Outstanding | 13,891 | 13,900 | 13,886 | 13,887 | 13,828 | ||||||||||||||
Basic Average Shares Outstanding | 13,889 | 13,890 | 13,889 | 13,844 | 13,810 | ||||||||||||||
Diluted Average Shares Outstanding | 13,966 | 13,975 | 14,001 | 13,972 | 13,901 | ||||||||||||||
Basic Earnings Per Share | $ | 0.53 | $ | 0.52 | $ | 0.48 | $ | 0.48 | $ | 0.49 | |||||||||
Diluted Earnings Per Share | 0.53 | 0.52 | 0.47 | 0.47 | 0.48 | ||||||||||||||
Cash Dividend Per Share | 0.243 | 0.243 | 0.243 | 0.243 | 0.236 | ||||||||||||||
Selected Quarterly Average Balances: | |||||||||||||||||||
Interest-Bearing Deposits at Banks | 27,143 | 24,480 | 23,565 | 34,731 | 21,635 | ||||||||||||||
Investment Securities | 677,368 | 684,570 | 695,615 | 684,906 | 696,712 | ||||||||||||||
Loans | 1,892,766 | 1,842,543 | 1,781,113 | 1,726,738 | 1,680,850 | ||||||||||||||
Deposits | 2,193,778 | 2,206,365 | 2,161,798 | 2,160,156 | 2,063,832 | ||||||||||||||
Other Borrowed Funds | 262,864 | 207,270 | 205,436 | 157,044 | 209,946 | ||||||||||||||
Shareholders' Equity | 243,801 | 239,396 | 235,257 | 230,198 | 228,048 | ||||||||||||||
Total Assets | 2,725,653 | 2,677,843 | 2,626,470 | 2,572,425 | 2,528,124 | ||||||||||||||
Return on Average Assets, annualized | 1.08 | % | 1.08 | % | 1.02 | % | 1.02 | % | 1.06 | % | |||||||||
Return on Average Equity, annualized | 12.07 | % | 12.08 | % | 11.43 | % | 11.41 | % | 11.75 | % | |||||||||
Return on Average Tangible Equity, annualized | 13.40 | % | 13.45 | % | 12.76 | % | 12.77 | % | 13.18 | % | |||||||||
Average Earning Assets | 2,597,277 | 2,551,593 | 2,500,293 | 2,446,375 | 2,399,197 | ||||||||||||||
Average Paying Liabilities | 2,012,802 | 2,005,421 | 1,977,628 | 1,933,974 | 1,892,583 | ||||||||||||||
Interest Income, Tax-Equivalent3 | 22,565 | 21,875 | 20,945 | 20,709 | 20,222 | ||||||||||||||
Interest Expense | 1,949 | 1,699 | 1,536 | 1,404 | 1,405 | ||||||||||||||
Net Interest Income, Tax-Equivalent3 | 20,616 | 20,176 | 19,409 | 19,305 | 18,817 | ||||||||||||||
Tax-Equivalent Adjustment3 | 966 | 949 | 948 | 939 | 940 | ||||||||||||||
Net Interest Margin, annualized 3 | 3.15 | % | 3.17 | % | 3.15 | % | 3.14 | % | 3.12 | % | |||||||||
Efficiency Ratio Calculation: 4 | |||||||||||||||||||
Noninterest Expense | 15,548 | 15,637 | 15,475 | 15,272 | 15,082 | ||||||||||||||
Less: Intangible Asset Amortization | 69 | 70 | 71 | 73 | 74 | ||||||||||||||
Net Noninterest Expense | 15,479 | 15,567 | 15,404 | 15,199 | 15,008 | ||||||||||||||
Net Interest Income, Tax-Equivalent | 20,616 | 20,176 | 19,409 | 19,305 | 18,817 | ||||||||||||||
Noninterest Income | 7,141 | 7,057 | 6,695 | 6,648 | 7,114 | ||||||||||||||
Less: Net Securities (Loss) Gain | 10 | — | — | (166) | — | ||||||||||||||
Net Gross Income | 27,747 | 27,233 | 26,104 | 26,119 | 25,931 | ||||||||||||||
Efficiency Ratio | 55.79 | % | 57.16 | % | 59.01 | % | 58.19 | % | 57.88 | % | |||||||||
Period-End Capital Information: | |||||||||||||||||||
Total Stockholders' Equity (i.e. Book Value) | 244,648 | 240,752 | 236,111 | 232,852 | 229,208 | ||||||||||||||
Book Value per Share 1 | 17.61 | 17.32 | 17.00 | 16.77 | 16.58 | ||||||||||||||
Goodwill and Other Intangible Assets, net | 24,268 | 24,355 | 24,448 | 24,569 | 24,675 | ||||||||||||||
Tangible Book Value per Share 1,2 | 15.86 | 15.57 | 15.24 | 15.00 | 14.79 | ||||||||||||||
Capital Ratios:5 | |||||||||||||||||||
Tier 1 Leverage Ratio | 9.33 | % | 9.35 | % | 9.37 | % | 9.47 | % | 9.44 | % | |||||||||
Common Equity Tier 1 Capital Ratio | 12.70 | % | 12.68 | % | 12.84 | % | 12.97 | % | 12.80 | % | |||||||||
Tier 1 Risk-Based Capital Ratio | 13.79 | % | 13.79 | % | 13.99 | % | 14.14 | % | 13.98 | % | |||||||||
Total Risk-Based Capital Ratio | 14.77 | % | 14.77 | % | 14.98 | % | 15.15 | % | 14.99 | % | |||||||||
Assets Under Trust Administration and Investment Management | $ | 1,411,608 | $ | 1,356,262 | $ | 1,333,690 | $ | 1,301,408 | $ | 1,284,051 | |||||||||
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 28, 2017, 3% stock dividend. | ||||||||||||||||||||||
2. | 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. | ||||||||||||||||||||||
9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | |||||||||||||||||||
Total Stockholders' Equity (GAAP) | 244,648 | 240,752 | 236,111 | 232,852 | 229,208 | ||||||||||||||||||
Less: Goodwill and Other Intangible assets, net | 24,268 | 24,355 | 24,448 | 24,569 | 24,675 | ||||||||||||||||||
Tangible Equity (Non-GAAP) | $ | 220,380 | $ | 216,397 | $ | 211,663 | $ | 208,283 | $ | 204,533 | |||||||||||||
Period End Shares Outstanding | 13,891 | 13,900 | 13,886 | 13,887 | 13,828 | ||||||||||||||||||
Tangible Book Value per Share (Non-GAAP) | $ | 15.86 | $ | 15.57 | $ | 15.24 | $ | 15.00 | $ | 14.79 | |||||||||||||
3. | Net Interest Margin 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. | ||||||||||||||||||||||
9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | |||||||||||||||||||
Net Interest Income (GAAP) | 19,650 | 19,227 | 18,461 | 18,366 | 17,877 | ||||||||||||||||||
Add: Tax-Equivalent adjustment (Non-GAAP) | 966 | 949 | 948 | 939 | 940 | ||||||||||||||||||
Net Interest Income - Tax Equivalent (Non-GAAP) | $ | 20,616 | $ | 20,176 | $ | 19,409 | $ | 19,305 | $ | 18,817 | |||||||||||||
Average Earning Assets | 2,597,277 | 2,551,593 | 2,500,293 | 2,446,375 | 2,399,197 | ||||||||||||||||||
Net Interest Margin (Non-GAAP)* | 3.15 | % | 3.17 | % | 3.15 | % | 3.14 | % | 3.12 | % | |||||||||||||
4. | 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 September 30, 2017 CET1 ratio listed in the tables (i.e., 12.70%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%).
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9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | |||||||||||||||||||
Total Risk Weighted Assets | 1,830,730 | 1,802,455 | 1,747,318 | 1,707,829 | 1,690,646 | ||||||||||||||||||
Common Equity Tier 1 Capital | 232,473 | 228,586 | 224,369 | 221,472 | 216,382 | ||||||||||||||||||
Common Equity Tier 1 Ratio | 12.70 | % | 12.68 | % | 12.84 | % | 12.97 | % | 12.80 | % | |||||||||||||
* Quarterly ratios have been annualized | |||||||||||||||||||||||
Arrow Financial Corporation Consolidated Financial Information (Dollars in Thousands - Unaudited) | |||||||||||
Quarter Ended: | 09/30/2017 | 12/31/2016 | 9/30/2016 | ||||||||
Loan Portfolio | |||||||||||
Commercial Loans | $ | 125,360 | $ | 105,155 | $ | 103,054 | |||||
Commercial Real Estate Loans | 440,715 | 431,646 | 429,011 | ||||||||
Subtotal Commercial Loan Portfolio | 566,075 | 536,801 | 532,065 | ||||||||
Consumer Loans | 592,029 | 537,361 | 523,703 | ||||||||
Residential Real Estate Loans | 750,695 | 679,106 | 651,448 | ||||||||
Total Loans | $ | 1,908,799 | $ | 1,753,268 | $ | 1,707,216 | |||||
Allowance for Loan Losses | |||||||||||
Allowance for Loan Losses, Beginning of Quarter | $ | 17,442 | $ | 16,975 | $ | 16,798 | |||||
Loans Charged-off | (622) | (486) | (367) | ||||||||
Less Recoveries of Loans Previously Charged-off | 75 | 40 | 64 | ||||||||
Net Loans Charged-off | (547) | (446) | (303) | ||||||||
Provision for Loan Losses | 800 | 483 | 480 | ||||||||
Allowance for Loan Losses, End of Quarter | $ | 17,695 | $ | 17,012 | $ | 16,975 | |||||
Nonperforming Assets | |||||||||||
Nonaccrual Loans | $ | 5,482 | $ | 4,193 | $ | 6,107 | |||||
Loans Past Due 90 or More Days and Accruing | 967 | 1,201 | 548 | ||||||||
Loans Restructured and in Compliance with Modified Terms | 828 | 106 | 107 | ||||||||
Total Nonperforming Loans | 7,277 | 5,500 | 6,762 | ||||||||
Repossessed Assets | 62 | 101 | 149 | ||||||||
Other Real Estate Owned | 1,651 | 1,585 | 868 | ||||||||
Total Nonperforming Assets | $ | 8,990 | $ | 7,186 | $ | 7,779 | |||||
Key Asset Quality Ratios | |||||||||||
Net Loans Charged-off to Average Loans, Quarter-to-date Annualized | 0.11 | % | 0.10 | % | 0.07 | % | |||||
Provision for Loan Losses to Average Loans, Quarter-to-date Annualized | 0.17 | % | 0.11 | % | 0.11 | % | |||||
Allowance for Loan Losses to Period-End Loans | 0.93 | % | 0.97 | % | 0.99 | % | |||||
Allowance for Loan Losses to Period-End Nonperforming Loans | 243.16 | % | 309.31 | % | 251.04 | % | |||||
Nonperforming Loans to Period-End Loans | 0.38 | % | 0.31 | % | 0.40 | % | |||||
Nonperforming Assets to Period-End Assets | 0.33 | % | 0.28 | % | 0.30 | % | |||||
Nine-Month Period Ended: | |||||||||||
Allowance for Loan Losses | |||||||||||
Allowance for Loan Losses, Beginning of Year | $ | 17,012 | $ | 16,038 | |||||||
Loans Charged-off | (1,196) | (784) | |||||||||
Less Recoveries of Loans Previously Charged-off | 300 | 171 | |||||||||
Net Loans Charged-off | (896) | (613) | |||||||||
Provision for Loan Losses | 1,579 | 1,550 | |||||||||
Allowance for Loan Losses, End of Period | $ | 17,695 | $ | 16,975 | |||||||
Key Asset Quality Ratios | |||||||||||
Net Loans Charged-off to Average Loans, Annualized | 0.07 | % | 0.05 | % | |||||||
Provision for Loan Losses to Average Loans, Annualized | 0.11 | % | 0.13 | % | |||||||
View original content:http://www.prnewswire.com/news-releases/arrow-third-quarter-net-income-up-101-double-digit-loan-growth-continues-300541090.html
SOURCE Arrow Financial Corporation
