Company Quick10K Filing
Quick10K
Arrow Financial
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$35.68 14 $516
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
8-K 2019-02-04 Officers, Other Events, Exhibits
8-K 2019-01-29 Earnings, Exhibits
8-K 2018-10-31 Other Events, Exhibits
8-K 2018-10-22 Earnings, Exhibits
8-K 2018-08-29 Other Events, Exhibits
8-K 2018-07-25 Other Events, Exhibits
8-K 2018-07-23 Earnings, Exhibits
8-K 2018-04-25 Shareholder Vote
8-K 2018-04-23 Earnings, Exhibits
8-K 2018-02-06 Officers, Exhibits
8-K 2018-01-31 Other Events, Exhibits
8-K 2018-01-30 Earnings, Exhibits
JPM JPMorgan Chase
ONB Old National Bancorp
WSBC Wesbanco
EBSB Meridian Bancorp
SYBT Stock Yards Bancorp
CNOB Connectone Bancorp
TBBK The Bancorp
GNTY Guaranty Bancshares
RIVE Riverview Financial
SSFN Stewardship Financial
AROW 2018-09-30
Part I - Financial Information
Item 1.
Note 1. Accounting Policies
Note 2. Investment Securities (In Thousands)
Note 3. Loans (In Thousands)
Note 4. Guarantees (In Thousands)
Note 5. Comprehensive Income (In Thousands)
Note 6. Stock-Based Compensation (Dollars in Thousands, Except Share and per Share Amounts)
Note 7. Retirement Plans (Dollars in Thousands)
Note 8. Earnings per Common Share (In Thousands, Except per Share Amounts)
Note 9. Fair Value of Financial Instruments (In Thousands)
Item 2.
Item 3.
Item 4.
Part II - Other Information
Item 1.
Item 1.A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
EX-15 ex15awarenessletterseptemb.htm
EX-31.1 ex311ceoq32018.htm
EX-31.2 ex312cfoq32018.htm
EX-32.906 ex32906cert-q32018.htm

Arrow Financial Earnings 2018-09-30

AROW 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 arowform10-qseptember2018.htm 10-Q Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2018

or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 0-12507

ARROW FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

New York
 
22-2448962
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer
Identification No.)
250 GLEN STREET, GLENS FALLS, NEW YORK 12801
(Address of principal executive offices)   (Zip Code)
Registrant’s telephone number, including area code:   (518) 745-1000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes          No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes          No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer     
Accelerated filer   x 
Non-accelerated filer     
 
Smaller reporting company     
 
 
 
 
 
 
 
Emerging growth company     
 
 
 
 
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standard provided pursuant to Section 13(a) of the Exchange Act. __

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes      x   No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class
 
Outstanding as of October 31, 2018
Common Stock, par value $1.00 per share
 
14,452,521




ARROW FINANCIAL CORPORATION
FORM 10-Q
TABLE OF CONTENTS


# 2



PART I - FINANCIAL INFORMATION
Item 1.
FINANCIAL STATEMENTS
ARROW FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Amounts)
(Unaudited)
 
September 30, 2018
 
December 31, 2017
 
September 30, 2017
ASSETS
 
 
 
 
 
Cash and Due From Banks
$
57,385

 
$
42,562

 
$
55,683

Interest-Bearing Deposits at Banks
34,910

 
30,276

 
24,983

Investment Securities:
 
 
 
 
 
Available-for-Sale
340,411

 
300,200

 
315,459

Held-to-Maturity (Approximate Fair Value of $282,719 at September 30, 2018; $335,901 at December 31, 2017; and $343,899 at September 30, 2017)
289,952

 
335,907

 
341,526

Equity Securities
1,916

 

 

Other Investments
10,866

 
9,949

 
6,704

Loans
2,126,100

 
1,950,770

 
1,908,799

Allowance for Loan Losses
(20,003
)
 
(18,586
)
 
(17,695
)
Net Loans
2,106,097

 
1,932,184

 
1,891,104

Premises and Equipment, Net
28,601

 
27,619

 
26,432

Goodwill
21,873

 
21,873

 
21,873

Other Intangible Assets, Net
1,954

 
2,289

 
2,395

Other Assets
59,255

 
57,606

 
58,303

Total Assets
$
2,953,220

 
$
2,760,465

 
$
2,744,462

LIABILITIES
 
 
 
 
 
Noninterest-Bearing Deposits
$
490,469

 
$
441,945

 
$
448,515

Interest-Bearing Checking Accounts
899,547

 
907,315

 
967,250

Savings Deposits
758,727

 
694,573

 
696,805

Time Deposits over $250,000
76,226

 
38,147

 
28,464

Other Time Deposits
182,886

 
163,136

 
166,082

Total Deposits
2,407,855

 
2,245,116

 
2,307,116

Federal Funds Purchased and
Securities Sold Under Agreements to Repurchase
62,503

 
64,966

 
61,419

Federal Home Loan Bank Overnight Advances
131,000

 
105,000

 
33,000

Federal Home Loan Bank Term Advances
45,000

 
55,000

 
55,000

Junior Subordinated Obligations Issued to Unconsolidated
Subsidiary Trusts
20,000

 
20,000

 
20,000

Other Liabilities
22,052

 
20,780

 
23,279

Total Liabilities
2,688,410

 
2,510,862

 
2,499,814

STOCKHOLDERS’ EQUITY
 
 
 
 
 
Preferred Stock, $5 Par Value; 1,000,000 Shares Authorized

 

 

Common Stock, $1 Par Value; 20,000,000 Shares Authorized (19,035,565 Shares Issued at September 30, 2018; 18,481,301 at December 31, 2017 and 18,481,301 at September 30, 2017)
19,035

 
18,481

 
18,481

Additional Paid-in Capital
313,763

 
290,219

 
289,294

Retained Earnings
24,258

 
28,818

 
22,581

Unallocated ESOP Shares (9,932 Shares at September 30, 2018; 9,643 Shares at December 31, 2017 and 20,050 Shares at September 30, 2017)
(200
)
 
(200
)
 
(400
)
Accumulated Other Comprehensive Loss
(12,621
)
 
(8,514
)
 
(6,135
)
Treasury Stock, at Cost (4,584,147 Shares at September 30, 2018; 4,541,524 Shares at December 31, 2017 and 4,570,291 Shares at September 30, 2017)
(79,425
)
 
(79,201
)
 
(79,173
)
Total Stockholders’ Equity
264,810

 
249,603

 
244,648

Total Liabilities and Stockholders’ Equity
$
2,953,220

 
$
2,760,465

 
$
2,744,462

    
See Notes to Unaudited Interim Consolidated Financial Statements.

# 3



ARROW FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
INTEREST AND DIVIDEND INCOME
 
 
 
 
 
 
 
Interest and Fees on Loans
$
20,839

 
$
17,996

 
$
59,606

 
$
51,693

Interest on Deposits at Banks
182

 
104

 
474

 
242

Interest and Dividends on Investment Securities:
 
 
 
 
 
 
 
Fully Taxable
2,187

 
1,924

 
6,128

 
5,927

Exempt from Federal Taxes
1,287

 
1,575

 
4,295

 
4,660

Total Interest and Dividend Income
24,495

 
21,599

 
70,503

 
62,522

INTEREST EXPENSE
 
 
 
 
 
 
 
Interest-Bearing Checking Accounts
390

 
376

 
1,165

 
1,088

Savings Deposits
901

 
356

 
2,134

 
963

Time Deposits over $250,000
301

 
66

 
833

 
187

Other Time Deposits
370

 
241

 
911

 
702

Federal Funds Purchased and
Securities Sold Under Agreements to Repurchase
15

 
13

 
47

 
29

Federal Home Loan Bank Advances
1,270

 
700

 
2,340

 
1,651

Junior Subordinated Obligations Issued to
Unconsolidated Subsidiary Trusts
251

 
197

 
712

 
564

Total Interest Expense
3,498

 
1,949

 
8,142

 
5,184

NET INTEREST INCOME
20,997

 
19,650

 
62,361

 
57,338

Provision for Loan Losses
586

 
800

 
1,961

 
1,580

NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES
20,411

 
18,850

 
60,400

 
55,758

NONINTEREST INCOME
 
 
 
 
 
 
 
Income From Fiduciary Activities
2,262

 
2,116

 
7,106

 
6,284

Fees for Other Services to Customers
2,605

 
2,453

 
7,555

 
6,875

Insurance Commissions
2,024

 
2,113

 
6,119

 
6,426

Net Gain on Securities
114

 
10

 
355

 
10

Net Gain on Sales of Loans
54

 
182

 
115

 
431

Other Operating Income
291

 
267

 
900

 
867

Total Noninterest Income
7,350

 
7,141

 
22,150

 
20,893

NONINTEREST EXPENSE
 
 
 
 
 
 
 
Salaries and Employee Benefits
9,771

 
9,382

 
28,952

 
27,740

Occupancy Expenses, Net
2,262

 
2,371

 
7,223

 
7,410

FDIC Assessments
218

 
225

 
658

 
679

Other Operating Expense
3,775

 
3,570

 
11,341

 
10,832

Total Noninterest Expense
16,026

 
15,548

 
48,174

 
46,661

INCOME BEFORE PROVISION FOR INCOME TAXES
11,735

 
10,443

 
34,376

 
29,990

Provision for Income Taxes
2,475

 
3,027

 
6,855

 
8,735

NET INCOME
$
9,260


$
7,416


$
27,521


$
21,255

Average Shares Outstanding 1:
 
 
 
 
 
 

Basic
14,431

 
14,305

 
14,393

 
14,306

Diluted
14,520

 
14,385

 
14,479

 
14,401

Per Common Share:
 
 
 
 
 
 
 
Basic Earnings
$
0.64

 
$
0.52

 
$
1.91

 
$
1.49

Diluted Earnings
0.64

 
0.52

 
1.90

 
1.48


1 2017 Share and Per Share Amounts have been restated for the September 27, 2018 3% stock dividend.
See Notes to Unaudited Interim Consolidated Financial Statements.

# 4



ARROW FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands)
(Unaudited)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Net Income
$
9,260

 
$
7,416

 
$
27,521

 
$
21,255

Other Comprehensive Income, Net of Tax:
 
 
 
 
 
 
 
  Net Unrealized Securities Holding Gains (Losses)
Arising During the Period
(897
)
 
9

 
(4,017
)
 
465

  Reclassification Adjustments for Securities
Gains Included in Net Income

 
(6
)
 

 
(6
)
  Amortization of Net Retirement Plan Actuarial Loss
60

 
64

 
181

 
245

  Accretion of Net Retirement Plan Prior
Service Credit
20

 
(2
)
 
60

 
(5
)
Other Comprehensive Income (Loss)
(817
)
 
65

 
(3,776
)
 
699

  Comprehensive Income
$
8,443

 
$
7,481

 
$
23,745

 
$
21,954

 
 
 
 
 
 
 
 

See Notes to Unaudited Interim Consolidated Financial Statements.


# 5



ARROW FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
(In Thousands, Except Share and Per Share Amounts)
(Unaudited)

 
Common
Stock
 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Unallo-cated ESOP
Shares
 
Accumu-lated
Other Com-
prehensive
Loss
 
Treasury
Stock
 
Total
Balance at December 31, 2017
$
18,481

 
$
290,219

 
$
28,818

 
$
(200
)
 
$
(8,514
)
 
$
(79,201
)
 
$
249,603

Net Income

 

 
27,521

 

 

 

 
27,521

Other Comprehensive Loss

 

 

 

 
(3,776
)
 

 
(3,776
)
Impact of the Adoption of ASU 2014-09

 

 
(102
)
 

 

 

 
(102
)
Impact of the Adoption of ASU 2016-01

 

 
331

 

 
(331
)
 

 

3% Stock Dividend (554,264 Shares)
554

 
21,126

 
(21,680
)
 

 

 

 

Cash Dividends Paid, $.728 per Share

 

 
(10,630
)
 

 

 

 
(10,630
)
Stock Options Exercised, Net  (91,979 Shares)

 
942

 

 

 

 
1,035

 
1,977

Shares Issued Under the Directors’ Stock
  Plan  (2,705 Shares)

 
72

 

 

 

 
31

 
103

Shares Issued Under the Employee Stock
  Purchase Plan  (10,801 Shares)

 
247

 

 

 

 
121

 
368

Shares Issued for Dividend
  Reinvestment Plans (35,947 Shares)

 
890

 

 

 

 
412

 
1,302

Stock-Based Compensation Expense

 
267

 

 

 

 

 
267

Purchase of Treasury Stock
  (50,697 Shares)

 

 

 

 

 
(1,823
)
 
(1,823
)
Balance at September 30, 2018
$
19,035

 
$
313,763

 
$
24,258

 
$
(200
)
 
$
(12,621
)
 
$
(79,425
)
 
$
264,810

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2016
$
17,943

 
$
270,880

 
$
28,644

 
$
(400
)
 
$
(6,834
)
 
$
(77,381
)
 
$
232,852

Net Income

 

 
21,255

 

 

 

 
21,255

Other Comprehensive Income

 

 

 

 
699

 

 
699

3% Stock Dividend (538,100 Shares)
538

 
16,661

 
(17,199
)
 

 

 

 

Cash Dividends Paid, $.707 per Share 1

 

 
(10,119
)
 

 

 

 
(10,119
)
Stock Options Exercised, Net (34,489 Shares)

 
335

 

 

 

 
399

 
734

Shares Issued Under the Directors’ Stock
  Plan  (3,927 Shares)

 
84

 

 

 

 
42

 
126

Shares Issued Under the Employee Stock
  Purchase Plan  (10,869 Shares)

 
230

 

 

 

 
121

 
351

Shares Issued for Dividend
  Reinvestment Plans (37,525 Shares)

 
843

 

 

 

 
413

 
1,256

Stock-Based Compensation Expense

 
261

 

 

 

 

 
261

Purchase of Treasury Stock
 (83,256 Shares)

 

 

 

 

 
(2,767
)
 
(2,767
)
Balance at September 30, 2017
$
18,481

 
$
289,294

 
$
22,581

 
$
(400
)
 
$
(6,135
)
 
$
(79,173
)
 
$
244,648


1 Cash dividends paid per share have been adjusted for the September 27, 2018 3% stock dividend.
See Notes to Unaudited Interim Consolidated Financial Statements.




# 6



ARROW FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
 
Nine Months Ended September 30,
Cash Flows from Operating Activities:
2018
 
2017
Net Income
$
27,521

 
$
21,255

Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
 
 
 
Provision for Loan Losses
1,961

 
1,580

Depreciation and Amortization
3,576

 
4,247

Net Gains on the Sale of Securities Available-for-Sale

 
(10
)
Net Gain on Equity Securities
(355
)
 

Loans Originated and Held-for-Sale
(3,378
)
 
(14,890
)
Proceeds from the Sale of Loans Held-for-Sale
3,620

 
14,481

Net Gain on the Sale of Loans
(115
)
 
(431
)
Net Loss on the Sale of Premises and Equipment, Other Real Estate Owned and Repossessed Assets
155

 
197

Contributions to Retirement Benefit Plans
(524
)
 
(640
)
Deferred Income Tax Benefit
(389
)
 
(20
)
Shares Issued Under the Directors’ Stock Plan
103

 
126

Stock-Based Compensation Expense
267

 
261

Tax Benefit from Exercise of Stock Options
205

 
112

Net Increase in Other Assets
(1,030
)
 
(1,689
)
Net Increase in Other Liabilities
1,980

 
1,819

Net Cash Provided By Operating Activities
33,597

 
26,398

Cash Flows from Investing Activities:
 
 
 
Proceeds from the Sale of Securities Available-for-Sale

 
10,015

Proceeds from the Maturities and Calls of Securities Available-for-Sale
36,663

 
43,617

Purchases of Securities Available-for-Sale
(84,746
)
 
(22,503
)
Proceeds from the Maturities and Calls of Securities Held-to-Maturity
49,721

 
39,062

Purchases of Securities Held-to-Maturity
(4,506
)
 
(36,018
)
Net Increase in Loans
(176,607
)
 
(156,643
)
Proceeds from the Sales of Premises and Equipment, Other Real Estate Owned and Repossessed Assets
1,078

 
830

Purchase of Premises and Equipment
(2,371
)
 
(1,335
)
Proceeds from the Sale of a Subsidiary, Net
75

 
72

Net (Increase) Decrease in Other Investments
(917
)
 
4,208

Net Cash Used By Investing Activities
(181,610
)
 
(118,695
)
Cash Flows from Financing Activities:
 
 
 
Net Increase in Deposits
162,739

 
190,570

Net Increase (Decrease) in Short-Term Federal Home Loan Bank Borrowings
26,000

 
(90,000
)
Net Increase (Decrease) in Short-Term Borrowings
(2,463
)
 
25,583

Repayments of Federal Home Loan Bank Term Advances
(10,000
)
 

Purchase of Treasury Stock
(1,823
)
 
(2,767
)
Stock Options Exercised, Net
1,977

 
734

Shares Issued Under the Employee Stock Purchase Plan
368

 
351

Shares Issued for Dividend Reinvestment Plans
1,302

 
1,256

Cash Dividends Paid
(10,630
)
 
(10,119
)
Net Cash Provided By Financing Activities
167,470

 
115,608

Net Increase in Cash and Cash Equivalents
19,457

 
23,311

Cash and Cash Equivalents at Beginning of Period
72,838

 
57,355

Cash and Cash Equivalents at End of Period
$
92,295

 
$
80,666

 
 
 
 
Supplemental Disclosures to Statements of Cash Flow Information:
 
 
 
Interest on Deposits and Borrowings
$
7,946

 
$
5,168

Income Taxes
7,493

 
8,404

Non-cash Investing and Financing Activity:
 
 
 
Transfer of Loans to Other Real Estate Owned and Repossessed Assets
606

 
1,055


See Notes to Unaudited Interim Consolidated Financial Statements.

# 7



NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1.     ACCOUNTING POLICIES

In the opinion of the management of Arrow Financial Corporation (Arrow, the Company, we, or us), the accompanying unaudited interim consolidated financial statements contain all of the adjustments necessary to present fairly the financial position as of September 30, 2018, December 31, 2017 and September 30, 2017; the results of operations for the three- and nine-month periods ended September 30, 2018 and 2017; the consolidated statements of comprehensive income for the three- and nine-month periods ended September 30, 2018 and 2017; the changes in stockholders' equity for the nine-month periods ended September 30, 2018 and 2017; and the cash flows for the nine-month periods ended September 30, 2018 and 2017. All such adjustments are of a normal recurring nature.

Management’s Use of Estimates -The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period.  Our most significant estimate is the allowance for loan losses. Other estimates include the evaluation of other-than-temporary impairment of investment securities, goodwill impairment, pension and other postretirement liabilities and an analysis of a need for a valuation allowance for deferred tax assets. Actual results could differ from those estimates.
A material estimate that is particularly susceptible to significant change in the near term is the allowance for loan losses.  In connection with the determination of the allowance for loan losses, management obtains appraisals for properties.  The allowance for loan losses is management’s best estimate of probable loan losses incurred as of the balance sheet date.  While management uses available information to recognize losses on loans, future adjustments to the allowance for loan losses may be necessary based on changes in economic conditions.  
The unaudited interim consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements of Arrow for the year ended December 31, 2017, included in Arrow's Annual Report on Form 10-K for the year ended December 31, 2017.

Recently Adopted and Recently Issued Accounting Standards

The following accounting standards have been adopted in the first nine months of 2018:
    
ASU 2014-09 "Revenue from Contracts With Customers" (Topic 606) was adopted as of January 1, 2018. For additional information, see Revenue Recognition under Significant Accounting Policy Update in this Note.
ASU 2016-01 "Recognition and Measurement of Financial Assets and Financial Liabilities" (Subtopic 825-10) significantly changed the income statement impact of equity investments. For Arrow, the standard became effective for the first quarter of 2018, and requires that equity investments be measured at fair value, with changes in fair value recognized in net income. The cumulative effect of the January 1, 2018 adoption was an increase to retained earnings of $331 thousand with a corresponding decrease to Accumulated Other Comprehensive Loss. For periods prior to January 1, 2018, equity securities were classified as available-for-sale and stated at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive income, net of tax. ASU 2016-01 also emphasized the existing requirement to use exit prices to measure fair value for disclosure purposes and clarifies that entities not make use of a practicability exception in determining the fair value of loans. Accordingly, the Company refined the calculation used to determine the disclosed fair value of its loans as part of adopting this standard. See Note 9 to the unaudited interim consolidated financial statements titled Fair Value of Financial Instruments.
    ASU 2016-15 "Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments" (Topic 230) will reduce existing diversity in practice with respect to eight specific cash flow issues. Arrow adopted this ASU in the first quarter of 2018.
ASU 2017-01 "Business Combinations" (Topic 805) defines when a set of assets and activities constitutes a business for the purposes of determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this update allow for a business to consist of inputs, processes, and the ability to create output. For Arrow, the standard became effective in the first quarter of 2018. This update had no effect on its accounting for acquisitions and dispositions of businesses.
ASU 2017-07 "Compensation-Retirement Benefits" (Topic 715) improves the presentation of net periodic pension cost and net periodic post-retirement benefit cost by requiring that an employer disaggregate the service cost component from the other components of net benefit cost. For Arrow, the standard became effective in the first quarter of 2018. In accordance with the practical expedient adoption method, for all periods presented Arrow used the amounts disclosed in the retirement plans footnote for the prior period retrospective reclassification of the non-service cost components from salaries and benefits to other operating expenses. The adoption of this change in accounting for pension costs did not have a material impact on its financial position or the results of operations.
ASU 2017-09 "Compensation-Stock Compensation" (Topic 718) provides guidance about which changes to the terms and conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The guidance highlights the requirements for applying modification accounting and the exception criteria relating to changes in share-based payment terms. For Arrow, the standard became effective in the first quarter of 2018. The adoption of this change in accounting for share-based payment awards did not have a material impact on its financial position or the results of operations in periods subsequent to its adoption.
    

# 8



The following accounting standards have been issued and will become effective for the Company at a future date:

In February 2016, the FASB issued ASU 2016-02, "Leases" (Topic 842) which requires lessees to recognize right-of-use assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. For a lease with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize a right-of-use asset and lease liability. Additionally, when measuring assets and liabilities arising from a lease, optional payments should be included only if the lessee is reasonably certain to exercise an option to extend the lease, exercise a purchase option or not exercise an option to terminate the lease. In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842): "Land Easement Practical Expedient for Transition to Topic 842". In July 2018, the FASB issued ASU 2018-10 "Codification Improvements to Topic 842, Leases" which provided clarification on certain components of the original guidance, including that the rate implicit in the lease cannot be less than zero. Also in July 2018, the FASB issued ASU 2018-11 "Targeted Improvements" to Leases (Topic 842) which amends the original guidance to allow for the adoption of this standard to be applied retrospectively at the beginning of the period of adoption, which will be January 1, 2019 for Arrow, through a cumulative-effect adjustment to the balance sheet, including retained earnings, as of January 1, 2019. Practical expedients may be elected that would not require Arrow to reassess whether an existing contract contains a lease, to reassess existing leases between operating leases and finance leases and to not reassess initial direct costs for any existing leases. If elected, these practical expedients must be applied together. An entity may also elect a practical expedient, which must be applied consistently to all of its leases, to use hindsight in determining the lease term when considering lessee options to extend or terminate the lease and in assessing impairment in the right-of-use asset. In addition, a lessor may make an accounting policy election, by class of underlying asset, to not separate nonlease components from lease components and account for these components as a single lease component. Early adoption of this standard is permitted in any interim or annual period. The Company expects to adopt the new lease standard on January 1, 2019 through a cumulative-effect adjustment without revising prior comparative periods, and elect the practical expedients available to effectively account for leases commenced prior to the effective date. The Company expects assets and liabilities to increase between $7 million and $9 million at the January 1, 2019 adoption date, with no material impact to operating lease expense in its Consolidated Statements of Income.
In June 2016, the FASB issued ASU 2016-13 "Financial Instruments - Credit Losses" (Topic 326) which will change the way financial entities measure expected credit losses for financial assets, primarily loans. Under this ASU, the "incurred loss" model will be replaced with an "expected loss" model which will recognize losses over the life of the instrument and requires consideration of a broader range of reasonable and supportable information. Currently, credit losses on available-for-sale securities reduce the carrying value of the instrument and cannot be reversed. Under this ASU, the amount of the credit loss is carried as a valuation allowance and can be reversed. The standard also requires expanded credit quality disclosures. For Arrow, the standard is effective for the first quarter of 2020 and early adoption is allowed in 2019. The Company plans on adopting the standard in the first quarter of 2020, in order to maximize the accumulation of data needed to calculate the new current expected credit loss ("CECL") methodologies. The ASU describes several acceptable methodologies for calculating expected losses on a loan or a pool of loans and requires additional disclosures. The initial adjustment will not be reported in earnings, but as the cumulative effect of a change in accounting principle. The FASB’s Transition Research Group for credit losses still has several outstanding unresolved questions, some of which may have a significant impact on CECL calculations. The Company continues its implementation efforts with the development and testing of various methods within its core model, developing forecast scenarios, monitoring of guidance interpretations and consideration of relevant internal controls and processes. This will likely have the effect of increasing the allowance for loan and lease losses and reducing shareholders' equity, the extent of which will depend upon the nature and characteristics of the Company's loan portfolio and economic conditions and forecasts at the adoption date. The Company expects to remain a well-capitalized financial institution under current regulatory calculations.     
In January 2017, the FASB issued ASU 2017-04 "Intangibles-Goodwill and Other" (Topic 350) which simplifies the procedures for evaluating impairment of goodwill. Prior to the adoption of this standard, entities were required to perform procedures to determine the fair value of the underlying assets and liabilities for determining the fair value of assets and liabilities in a business combination. This additional step to impairment testing has been eliminated. Under this ASU, entities will perform goodwill impairment testing by comparing the fair value of a reporting unit to its carrying value. For Arrow, the standard becomes effective in the first quarter of 2019, however, early adoption is permitted. This amendment will not affect the assessment of goodwill impairment since the Company currently performs the analysis of comparing carrying value to fair value of its reporting units that have goodwill and the Company has not had to perform a Step 2 Impairment Test to date.    
In March 2017, the FASB issued ASU 2017-08 "Receivables-Nonrefundable Fees and Other Costs" which amends the amortization period for certain purchased callable debt securities held at a premium. This shortens the amortization period for the premium to the earliest call date. Under GAAP, entities generally amortize the premium as an adjustment of yield over the contractual life of the instrument. For Arrow, the standard becomes effective in the first quarter of 2019. The Company does not expect that the adoption of this change in accounting for certain callable debt securities will have a material impact on its financial position or the results of operations in periods subsequent to its adoption.
In August 2018, the FASB issued ASU 2018-13 "Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement" which as part of its disclosure framework, the FASB has eliminated, amended and added disclosure requirements for fair value measurements. The following disclosure requirements were eliminated: Amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy of the timing of transfers between levels of the fair value hierarchy; the valuation processes for Level 3 fair value measurements. For public companies such as Arrow, the following new disclosures will be required: Changes in unrealized gains and losses for the period included in other comprehensive income (OCI); the range and weighted average of significant unobservable inputs used; alternatively, a company may choose to disclose other quantitative information if it determines that it is a more reasonable and rational method that reflects the distribution of unobservable inputs used. For Arrow, the standard becomes effective in the first quarter of 2020. The Company does not expect that the adoption of this change in fair value disclosure will have a material impact on its financial position or the results of operations in periods subsequent to its adoption.
In August 2018, the FASB issued ASU 2018-14 "Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans" which applies to all companies that provide defined benefit pension or other postretirement benefit plans for their employees. Certain disclosure requirements have been eliminated such as reporting the amounts in accumulated other comprehensive income expected to

# 9



be recognized as components of net periodic benefit cost over the next year, and reporting the effects of a one-percentage-point change in the assumed healthcare cost trend rate on the aggregate of the service cost and interest cost components of net periodic benefit cost and on the benefit obligation for postretirement healthcare benefits. New required disclosures for reporting the weighted-average interest rate used to credit cash balance and similar plans that have a promised interest credit, the reasons for significant gains and losses affecting benefit obligations and other requirements for reporting aggregate information related to pension plans. For Arrow, the standard becomes effective at December 31, 2020. The Company does not expect that the adoption of this change affecting defined benefit plan disclosures will have a material impact on its financial position or the results of operations.
In August 2018, the FASB issued ASU 2018-15 "Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" which will require companies to defer potentially significant, specified implementation costs incurred in a cloud computing arrangement that are often expensed under current US GAAP. For Arrow, the standard becomes effective at January 1, 2020. The Company is in the process of assessing the impact of this new accounting standard on its financial position and the results of operations in periods subsequent to its adoption.

Significant Accounting Policy Update:

Revenue Recognition - Accounting Standard Codification ("ASC") Topic 606, "Revenue from Contracts with Customers," establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle of Topic 606 requires an entity to recognize revenue in a way that depicts the transfer of goods or services promised to a customer in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services as performance obligations are satisfied.
The Company adopted Topic 606 as of January 1, 2018 using the modified retrospective approach. The Company has determined that revenue from specific types of fiduciary activities and insurance commissions are within the scope of this guidance. Under prior GAAP, revenue from fiduciary activities was recognized from settling client estates over the time period the work was performed. With the adoption of Topic 606, revenue is now recognized when the performance obligation is completed, which is when the settlement of the client estate is closed. The impact of this change in revenue recognition was not material to the Company's consolidated financial statements. Under prior GAAP when clients elected to pay premiums on property and casualty insurance policies in installments, revenue was recognized when the premiums were billed. With the adoption of Topic 606, this type of revenue is recognized when the performance obligation is substantially completed, i.e., when the insurance policy is issued. The impact of this change in revenue recognition was not material to the Company's consolidated financial statements. The cumulative effect of the adoption of Topic 606 related to the previously described fiduciary activities and insurance commissions was a decrease in retained earnings by $102 thousand as of January 1, 2018.
The majority of the Company's revenue-generating transactions are not subject to ASC Topic 606, including revenue generated from financial instruments, such as loans and investment securities which are presented in its consolidated income statements as components of net interest income. The following is a description of principal activities from which the Company generates its revenue from noninterest income sources that are within the scope of ASC Topic 606:
Income from Fiduciary Activities: represents revenue derived mainly through the management of client investments which is based on the market value of the covered assets and the fee schedule contained in the applicable account management agreement. Since the revenue is mainly based on the market value of assets, this amount can be volatile as financial markets increase and decrease based on various economic factors. The terms of the account management agreements generally specify that the performance obligations are completed each quarter. Accordingly, the Company mainly recognizes revenue from fiduciary activities on a quarterly basis.
Fees for Other Services to Customers: represents general service fees for monthly deposit account maintenance and account activity plus fees from other deposit-based services. Revenue is recognized when the performance obligation is completed, which is generally on a monthly basis for account maintenance services, or upon the completion of a deposit-related transaction. Payment for these performance obligations is generally received at the time the performance obligations are satisfied.
Insurance Commissions: represents commissions and fees paid by insurance carriers for both property and casualty insurance policies, and for services performed for employment benefits clients. Revenue from the property and casualty insurance business is recognized when the performance obligation is satisfied, which is generally the effective date of the bound coverage since there are no significant performance obligations remaining. Revenue from the employment benefit brokerage business is recognized when the benefit servicing performance obligations are satisfied, generally on a monthly basis.


# 10



Note 2.    INVESTMENT SECURITIES (In Thousands)
Management determines the appropriate classification of securities at the time of purchase.  Securities reported as held-to-maturity are those debt securities which Arrow has both the positive intent and ability to hold to maturity and are stated at amortized cost. Securities available-for-sale are reported at fair value, with unrealized gains and losses reported in accumulated other comprehensive income or loss, net of taxes. Beginning January 1, 2018, upon adoption of ASU 2016-01, equity securities with readily determinable fair values are stated at fair value with realized and unrealized gains and losses reported in income. For periods prior to January 1, 2018, equity securities were classified as available-for-sale and stated at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive income, net of tax.

The following table is the schedule of Available-For-Sale Securities at September 30, 2018, December 31, 2017 and September 30, 2017:
Available-For-Sale Securities
 
 
U.S. Government & Agency
Obligations
 
State and
Municipal
Obligations
 
Mortgage-
Backed
Securities
 
Corporate
and Other
Debt
Securities
 
Mutual Funds
and Equity
Securities
 
Total
Available-
For-Sale
Securities
September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
Available-For-Sale Securities,
  at Amortized Cost
 
$
60,135

 
$
2,545

 
$
284,236

 
$
1,000

 
$

 
$
347,916

Available-For-Sale Securities,
  at Fair Value
 
59,602

 
2,548

 
277,461

 
800

 

 
340,411

Gross Unrealized Gains
 

 
3

 
201

 

 

 
204

Gross Unrealized Losses
 
533

 

 
6,976

 
200

 

 
7,709

Available-For-Sale Securities,
  Pledged as Collateral
 
 
 
 
 
 
 
 
 
 
 
219,587

 
 
 
 
 
 
 
 
 
 
 
 
 
Maturities of Debt Securities,
  at Amortized Cost:
 
 
 
 
 
 
 
 
 
 
 
 
Within One Year
 
$
42,621

 
$
1,346

 
$
1,024

 
$

 
 
 
$
44,991

From 1 - 5 Years
 
17,514

 
719

 
164,808

 

 
 
 
183,041

From 5 - 10 Years
 

 

 
103,597

 

 
 
 
103,597

Over 10 Years
 

 
480

 
14,807

 
1,000

 
 
 
16,287

 
 
 
 
 
 
 
 
 
 
 
 
 
Maturities of Debt Securities,
  at Fair Value:
 
 
 
 
 
 
 
 
 
 
 
 
Within One Year
 
$
42,410

 
$
1,346

 
$
1,025

 
$

 
 
 
$
44,781

From 1 - 5 Years
 
17,192

 
722

 
158,846

 

 
 
 
176,760

From 5 - 10 Years
 

 

 
102,800

 

 
 
 
102,800

Over 10 Years
 

 
480

 
14,790

 
800

 
 
 
16,070

 
 
 
 
 
 
 
 
 
 
 
 
 
Securities in a Continuous
  Loss Position, at Fair Value:
 
 
 
 
 
 
 
 
 
 
 
 
Less than 12 Months
 
$
4,831

 
$
1,120

 
$
167,718

 
$

 
$

 
$
173,669

12 Months or Longer
 
54,771

 

 
71,433

 
800

 

 
127,004

Total
 
$
59,602

 
$
1,120

 
$
239,151

 
$
800

 
$

 
$
300,673

Number of Securities in a
  Continuous Loss Position
 
14

 
5

 
90

 
1

 

 
110

 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized Losses on
  Securities in a Continuous
  Loss Position:
 
 
 
 
 
 
 
 
 
 
 
 
Less than 12 Months
 
$
193

 
$

 
$
3,165

 
$

 
$

 
$
3,358

12 Months or Longer
 
340

 

 
3,811

 
200

 

 
4,351

Total
 
$
533

 
$

 
$
6,976

 
$
200

 
$

 
$
7,709

 
 
 
 
 
 
 
 
 
 
 
 
 
Disaggregated Details:
 
 
 
 
 
 
 
 
 
 
 
 
US Treasury Obligations,
  at Amortized Cost
 
$

 
 
 
 
 
 
 
 
 
 
US Treasury Obligations,
at Fair Value
 

 
 
 
 
 
 
 
 
 
 
US Agency Obligations,
at Amortized Cost
 
60,135

 
 
 
 
 
 
 
 
 
 
US Agency Obligations,
at Fair Value
 
59,602

 
 
 
 
 
 
 
 
 
 

# 11



Available-For-Sale Securities
 
 
U.S. Government & Agency
Obligations
 
State and
Municipal
Obligations
 
Mortgage-
Backed
Securities
 
Corporate
and Other
Debt
Securities
 
Mutual Funds
and Equity
Securities
 
Total
Available-
For-Sale
Securities
US Government Agency
  Securities, at Amortized Cost
 
 
 
 
 
$
74,160

 
 
 
 
 
 
US Government Agency
  Securities, at Fair Value
 
 
 
 
 
74,098

 
 
 
 
 
 
Government Sponsored Entity
  Securities, at Amortized Cost
 
 
 
 
 
210,076

 
 
 
 
 
 
Government Sponsored Entity
Securities, at Fair Value
 
 
 
 
 
203,363

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
Available-For-Sale Securities,
  at Amortized Cost
 
$
60,328

 
$
10,351

 
$
229,077

 
$
1,000

 
$
1,120

 
$
301,876

Available-For-Sale Securities,
  at Fair Value
 
59,894

 
10,349

 
227,596

 
800

 
1,561

 
300,200

Gross Unrealized Gains
 

 
9

 
485

 

 
441

 
935

Gross Unrealized Losses
 
434

 
11

 
1,966

 
200

 

 
2,611

Available-For-Sale Securities,
  Pledged as Collateral,
  at Fair Value
 
 
 
 
 
 
 
 
 
 
 
183,052

 
 
 
 
 
 
 
 
 
 
 
 
 
Securities in a Continuous
  Loss Position, at Fair Value:
 
 
 
 
 
 
 
 
 
 
 
 
Less than 12 Months
 
$
20,348

 
$
8,498

 
$
70,930

 
$

 
$

 
$
99,776

12 Months or Longer
 
39,546

 

 
80,759

 
800

 

 
121,105

Total
 
$
59,894

 
$
8,498

 
$
151,689

 
$
800

 
$

 
$
220,881

Number of Securities in a
  Continuous Loss Position
 
14

 
36

 
55

 
1

 

 
106

 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized Losses on
  Securities in a Continuous
  Loss Position:
 
 
 
 
 
 
 
 
 
 
 
 
Less than 12 Months
 
$
172

 
$
11

 
$
363

 
$

 
$

 
$
546

12 Months or Longer
 
262

 

 
1,603

 
200

 

 
2,065

Total
 
$
434

 
$
11

 
$
1,966

 
$
200

 
$

 
$
2,611

 
 
 
 
 
 
 
 
 
 
 
 
 
Disaggregated Details:
 
 
 
 
 
 
 
 
 
 
 
 
US Treasury Obligations,
  at Amortized Cost
 
$

 
 
 
 
 
 
 
 
 
 
US Treasury Obligations,
at Fair Value
 

 
 
 
 
 
 
 
 
 
 
US Agency Obligations,
at Amortized Cost
 
60,328

 
 
 
 
 
 
 
 
 
 
US Agency Obligations,
at Fair Value
 
59,894

 
 
 
 
 
 
 
 
 
 
US Government Agency
  Securities, at Amortized Cost
 
 
 
 
 
$
40,832

 
 
 
 
 
 
US Government Agency
  Securities, at Fair Value
 
 
 
 
 
40,832

 
 
 
 
 
 
Government Sponsored Entity
  Securities, at Amortized Cost
 
 
 
 
 
188,245

 
 
 
 
 
 
Government Sponsored Entity
Securities, at Fair Value
 
 
 
 
 
186,764

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

# 12



Available-For-Sale Securities
 
 
U.S. Government & Agency
Obligations
 
State and
Municipal
Obligations
 
Mortgage-
Backed
Securities
 
Corporate
and Other
Debt
Securities
 
Mutual Funds
and Equity
Securities
 
Total
Available-
For-Sale
Securities
September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
Available-For-Sale Securities,
  at Amortized Cost
 
$
146,976

 
$
11,875

 
$
152,858

 
$
2,500

 
$
1,120

 
$
315,329

Available-For-Sale Securities,
  at Fair Value
 
146,978

 
11,902

 
152,806

 
2,299

 
1,474

 
315,459

Gross Unrealized Gains
 
152

 
27

 
964

 

 
354

 
1,497

Gross Unrealized Losses
 
150

 

 
1,016

 
201

 

 
1,367

Available-For-Sale Securities,
  Pledged as Collateral
 
 
 
 
 
 
 
 
 
 
 
206,637

 
 
 
 
 
 
 
 
 
 
 
 
 
Securities in a Continuous
  Loss Position, at Fair Value:
 
 
 
 
 
 
 
 
 
 
 
 
Less than 12 Months
 
$
89,563

 
$

 
$
85,091

 
$
500

 
$

 
$
175,154

12 Months or Longer
 

 

 

 
1,800

 

 
1,800

Total
 
$
89,563

 
$

 
$
85,091

 
$
2,300

 
$

 
$
176,954

Number of Securities in a
  Continuous Loss Position
 
23

 

 
31

 
3

 

 
57

 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized Losses on Securities
  in a Continuous Loss Position:
 
 
 
 
 
 
 
 
 
 
 
 
Less than 12 Months
 
$
150

 
$

 
$
1,016

 
$

 
$

 
$
1,166

12 Months or Longer
 

 

 

 
201

 

 
201

Total
 
$
150

 
$

 
$
1,016

 
$
201

 
$

 
$
1,367

 
 
 
 
 
 
 
 
 
 
 
 
 
Disaggregated Details:
 
 
 
 
 
 
 
 
 
 
 
 
US Treasury Obligations,
at Amortized Cost
 
$
64,711

 
 
 
 
 
 
 
 
 
 
US Treasury Obligations,
at Fair Value
 
$
64,730

 
 
 
 
 
 
 
 
 
 
US Agency Obligations,
at Amortized Cost
 
$
82,265

 
 
 
 
 
 
 
 
 
 
US Agency Obligations,
at Fair Value
 
82,248

 
 
 
 
 
 
 
 
 
 
US Government Agency
  Securities, at Amortized Cost
 
 
 
 
 
$
503

 
 
 
 
 
 
US Government Agency
  Securities, at Fair Value
 
 
 
 
 
505

 
 
 
 
 
 
Government Sponsored Entity
  Securities, at Amortized Cost
 
 
 
 
 
152,355

 
 
 
 
 
 
Government Sponsored Entity
Securities, at Fair Value
 
 
 
 
 
152,301

 
 
 
 
 
 



# 13




The following table is the schedule of Held-To-Maturity Securities at September 30, 2018, December 31, 2017 and September 30, 2017:
Held-To-Maturity Securities
 
 
State and
Municipal
Obligations
 
Mortgage-
Backed
Securities
 
Corporate
and Other
Debt
Securities
 
Total
Held-To
Maturity
Securities
September 30, 2018
 
 
 
 
 
 
 
 
Held-To-Maturity Securities,
  at Amortized Cost
 
$
239,367

 
$
50,585

 
$

 
$
289,952

Held-To-Maturity Securities,
  at Fair Value
 
233,557

 
49,162

 

 
282,719

Gross Unrealized Gains
 
261

 

 

 
261

Gross Unrealized Losses
 
6,071

 
1,423

 

 
7,494

Held-To-Maturity Securities,
  Pledged as Collateral
 
 
 
 
 
 
 
268,229

 
 
 
 
 
 
 
 
 
Maturities of Debt Securities,
  at Amortized Cost:
 
 
 
 
 
 
 
 
Within One Year
 
$
19,381

 
$

 
$

 
$
19,381

From 1 - 5 Years
 
93,084

 
48,039

 

 
141,123

From 5 - 10 Years
 
124,277

 
2,546

 

 
126,823

Over 10 Years
 
2,625

 

 

 
2,625

 
 
 
 
 
 
 
 
 
Maturities of Debt Securities,
  at Fair Value:
 
 
 
 
 
 
 
 
Within One Year
 
$
19,396

 
$

 
$

 
$
19,396

From 1 - 5 Years
 
92,199

 
46,688

 

 
138,887

From 5 - 10 Years
 
119,356

 
2,474

 

 
121,830

Over 10 Years
 
2,606

 

 

 
2,606

 
 
 
 
 
 
 
 
 
Securities in a Continuous
  Loss Position, at Fair Value:
 
 
 
 
 
 
 
 
Less than 12 Months
 
$
95,944

 
$
46,375

 
$

 
$
142,319

12 Months or Longer
 
86,378

 
2,787

 

 
89,165

Total
 
$
182,322

 
$
49,162

 
$

 
$
231,484

 
 
 
 
 
 
 
 
 
Number of Securities in a
  Continuous Loss Position
 
535

 
47

 

 
582

 
 
 
 
 
 
 
 
 
Unrealized Losses on Securities
   in a Continuous Loss Position:
 
 
 
 
 
 
 
 
Less than 12 Months
 
$
1,443

 
$
1,303

 
$

 
$
2,746

12 Months or Longer
 
4,628

 
120

 

 
4,748

Total
 
$
6,071

 
$
1,423

 
$

 
$
7,494

 
 
 
 
 
 
 
 
 
Disaggregated Details:
 
 
 
 
 
 
 
 
US Government Agency
  Securities, at Amortized Cost
 
 
 
$
3,147

 
 
 
 
US Government Agency
  Securities, at Fair Value
 
 
 
2,222

 
 
 
 
Government Sponsored Entity
  Securities, at Amortized Cost
 
 
 
47,438

 
 
 
 
Government Sponsored Entity
Securities, at Fair Value
 
 
 
46,940

 
 
 
 
 
 
 
 
 
 
 
 
 

# 14



Held-To-Maturity Securities
 
 
State and
Municipal
Obligations
 
Mortgage-
Backed
Securities
 
Corporate
and Other
Debt
Securities
 
Total
Held-To
Maturity
Securities
December 31, 2017
 
 
 
 
 
 
 
 
Held-To-Maturity Securities,
  at Amortized Cost
 
$
275,530

 
$
60,377

 
$

 
$
335,907

Held-To-Maturity Securities,
  at Fair Value
 
275,353

 
60,548

 

 
335,901

Gross Unrealized Gains
 
1,691

 
269

 

 
1,960

Gross Unrealized Losses
 
1,868

 
98

 

 
1,966

Held-To-Maturity Securities,
  Pledged as Collateral
 
 
 
 
 
 
 
318,622

 
 
 
 
 
 
 
 
 
Securities in a Continuous
  Loss Position, at Fair Value:
 
 
 
 
 
 
 
 
Less than 12 Months
 
$
55,648

 
$
13,764

 
$

 
$
69,412

12 Months or Longer
 
65,152

 
3,257

 

 
68,409

Total
 
$
120,800

 
$
17,021

 
$

 
$
137,821

Number of Securities in a
  Continuous Loss Position
 
352

 
14

 

 
366

 
 
 
 
 
 
 
 
 
Unrealized Losses on
  Securities in a Continuous
  Loss Position:
 
 
 
 
 
 
 
 
Less than 12 Months
 
$
442

 
$
56

 
$

 
$
498

12 Months or Longer
 
1,425

 
43

 

 
1,468

Total
 
$
1,867

 
$
99

 
$

 
$
1,966

 
 
 
 
 
 
 
 

Disaggregated Details:
 
 
 
 
 
 
 
 
US Government Agency
  Securities, at Amortized Cost
 
 
 
$
2,680

 
 
 
 
US Government Agency
  Securities, at Fair Value
 
 
 
2,661

 
 
 
 
Government Sponsored Entity
  Securities, at Amortized Cost
 
 
 
57,697

 
 
 
 
Government Sponsored Entity
Securities, at Fair Value
 
 
 
57,887

 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2017
 
 
 
 
 
 
 
 
Held-To-Maturity Securities,
  at Amortized Cost
 
$
277,738

 
$
63,788