Arrow Financial Earnings 2020-03-31

Balance Sheet	Income Statement	Cash Flow

10-Q 1 arowform10-qmarch2020.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 March 31, 2020

[ ] 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

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, Par Value $1.00 per share	AROW	NASDAQ Global Select Market

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. x 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). x 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 April 30, 2020
Common Stock, par value $1.00 per share		14,983,674

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)

	March 31, 2020			December 31, 2019			March 31, 2019
ASSETS
Cash and Due From Banks	$	32,525		$	47,035		$	36,198
Interest-Bearing Deposits at Banks	106,004			23,186			25,031
Investment Securities:
Available-for-Sale at Fair Value	378,186			357,334			298,812
Held-to-Maturity (Approximate Fair Value of $242,804 at March 31, 2020; $249,618 at December 31, 2019; and $280,414 at March 31, 2019)	238,520			245,065			279,400
Equity Securities	1,689			2,063			1,850
FHLB and Federal Reserve Bank Stock	5,379			10,317			7,878
Loans	2,414,193			2,386,120			2,235,208
Allowance for Loan Losses	(23,637		)	(21,187		)	(20,373		)
Net Loans	2,390,556			2,364,933			2,214,835
Premises and Equipment, Net	40,987			40,629			34,949
Goodwill	21,873			21,873			21,873
Other Intangible Assets, Net	1,640			1,661			1,777
Other Assets	73,973			70,179			62,280
Total Assets	$	3,291,332		$	3,184,275		$	2,984,883
LIABILITIES
Noninterest-Bearing Deposits	$	489,151		$	484,944		$	453,089
Interest-Bearing Checking Accounts	793,425			689,221			823,301
Savings Deposits	1,146,683			1,046,568			866,861
Time Deposits over $250,000	135,854			123,968			83,834
Other Time Deposits	245,892			271,353			263,012
Total Deposits	2,811,005			2,616,054			2,490,097
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase	57,909			51,099			58,407
Federal Home Loan Bank Overnight Advances	—			130,000			74,500
Federal Home Loan Bank Term Advances	50,000			30,000			35,000
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts	20,000			20,000			20,000
Finance Leases	5,249			5,254			2,946
Other Liabilities	37,771			30,140			27,324
Total Liabilities	2,981,934			2,882,547			2,708,274
STOCKHOLDERS’ EQUITY
Preferred Stock, $1 Par Value and 1,000,000 Shares Authorized at March 31, 2020 and December 31, 2019; $5 Par Value and 1,000,000 Shares Authorized at March 31, 2019	—			—			—
Common Stock, $1 Par Value; 30,000,000 Shares Authorized at March 31, 2020 and December 31, 2019 and 20,000,000 Shares Authorized at March 31, 2019 (19,606,449 Shares Issued at March 31, 2020 and December 31, 2019 and 19,035,565 at March 31, 2019)	19,606			19,606			19,035
Additional Paid-in Capital	336,021			335,355			315,262
Retained Earnings	37,441			33,218			34,231
Unallocated ESOP Shares (None at March 31, 2020 and December 31, 2019 and 5,501 Shares at March 31, 2019)	—			—			(100		)
Accumulated Other Comprehensive Loss	(2,412		)	(6,357		)	(11,567		)
Treasury Stock, at Cost (4,624,348 Shares at March 31, 2020; 4,608,258 Shares at December 31, 2019 and 4,556,083 Shares at March 31, 2019)	(81,258		)	(80,094		)	(80,252		)
Total Stockholders’ Equity	309,398			301,728			276,609
Total Liabilities and Stockholders’ Equity	$	3,291,332		$	3,184,275		$	2,984,883

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 March 31
	2020			2019
INTEREST AND DIVIDEND INCOME
Interest and Fees on Loans	$	24,874		$	22,403
Interest on Deposits at Banks	124			195
Interest and Dividends on Investment Securities:
Fully Taxable	2,193			2,369
Exempt from Federal Taxes	1,035			1,246
Total Interest and Dividend Income	28,226			26,213
INTEREST EXPENSE
Interest-Bearing Checking Accounts	487			482
Savings Deposits	2,471			1,601
Time Deposits over $250,000	533			396
Other Time Deposits	1,000			713
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase	22			22
Federal Home Loan Bank Advances	429			1,594
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts	228			269
Interest on Financing Leases	50			15
Total Interest Expense	5,220			5,092
NET INTEREST INCOME	23,006			21,121
Provision for Loan Losses	2,772			472
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	20,234			20,649
NONINTEREST INCOME
Income From Fiduciary Activities	2,213			2,107
Fees for Other Services to Customers	2,451			2,402
Insurance Commissions	1,632			1,719
Net (Loss) Gain on Securities	(374		)	76
Net Gain on Sales of Loans	213			104
Other Operating Income	1,559			479
Total Noninterest Income	7,694			6,887
NONINTEREST EXPENSE
Salaries and Employee Benefits	10,383			9,319
Occupancy Expenses, Net	1,449			1,420
Technology and Equipment Expense	3,352			3,141
FDIC Assessments	219			212
Other Operating Expense	2,351			2,560
Total Noninterest Expense	17,754			16,652
INCOME BEFORE PROVISION FOR INCOME TAXES	10,174			10,884
Provision for Income Taxes	2,047			2,150
NET INCOME	$	8,127		$	8,734
Average Shares Outstanding ¹:
Basic	14,996			14,903
Diluted	15,026			14,956
Per Common Share:
Basic Earnings	$	0.54		$	0.59
Diluted Earnings	0.54			0.58

¹2019 Share and Per Share Amounts have been restated for the September 27, 2019 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 March 31,
	2020			2019
Net Income	$	8,127		$	8,734
Other Comprehensive Income, Net of Tax:
Net Unrealized Securities Holding Gains Arising During the Period	4,098			2,080
Net Unrealized Loss on Cash Flow Hedge Agreements	(219		)	—
Amortization of Net Retirement Plan Actuarial Loss	27			121
Amortization of Net Retirement Plan Prior Service Cost	39			42
Other Comprehensive Income	3,945			2,243
Comprehensive Income	$	12,072		$	10,977

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)



	Three-Month Period Ended March 31, 2020
	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, 2019	$	19,606	$	335,355	$	33,218		$	—	$	(6,357	)	$	(80,094	)	$	301,728
Net Income	—		—		8,127			—		—			—			8,127
Other Comprehensive Income	—		—		—			—		3,945			—			3,945
Cash Dividends Paid, $.26 per Share	—		—		(3,904		)	—		—			—			(3,904		)
Stock Options Exercised, Net (14,282 Shares)	—		199		—			—		—			144			343
Shares Issued Under the Employee Stock Purchase Plan (3,648 Shares)	—		84		—			—		—			37			121
Shares Issued for Dividend Reinvestment Plans (16,001 Shares)	—		280		—			—		—			162			442
Stock-Based Compensation Expense	—		103		—			—		—			—			103
Purchase of Treasury Stock (50,021 Shares)	—		—		—			—		—			(1,507		)	(1,507		)
Balance at March 31, 2020	$	19,606	$	336,021	$	37,441		$	—	$	(2,412	)	$	(81,258	)	$	309,398



	Three-Month Period Ended March 31, 2019
Balance at December 31, 2018	$	19,035	$	314,533	$	29,257		$	(100	)	$	(13,810	)	$	(79,331	)	$	269,584
Net Income	—		—		8,734			—			—			—			8,734
Other Comprehensive Loss	—		—		—			—			2,243			—			2,243
Cash Dividends Paid, $.252 per Share ¹	—		—		(3,760		)	—			—			—			(3,760		)
Stock Options Exercised, Net (26,135 Shares)	—		249		—			—			—			286			535
Shares Issued Under the Employee Stock Purchase Plan (3,709 Shares)	—		76		—			—			—			41			117
Shares Issued for Dividend Reinvestment Plans (13,132 Shares)	—		309		—			—			—			144			453
Stock-Based Compensation Expense	—		95		—			—			—			—			95
Purchase of Treasury Stock (40,852 Shares)	—		—		—			—			—			(1,392		)	(1,392		)
Balance at March 31, 2019	$	19,035	$	315,262	$	34,231		$	(100	)	$	(11,567	)	$	(80,252	)	$	276,609

¹ Cash dividends paid per share have been adjusted for the September 27, 2019 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)



	Three Months Ended March 31,
Cash Flows from Operating Activities:	2020			2019
Net Income	$	8,127		$	8,734
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Provision for Loan Losses	2,772			472
Depreciation and Amortization	1,597			1,309
Net Loss (Gain) on Securities Transactions	374			(76		)
Loans Originated and Held-for-Sale	(9,322		)	(4,223		)
Proceeds from the Sale of Loans Held-for-Sale	7,975			3,718
Net Gain on the Sale of Loans	(213		)	(104		)
Net (Gain) Loss on the Sale of Premises and Equipment, Other Real Estate Owned and Repossessed Assets	(91		)	130
Contributions to Retirement Benefit Plans	(195		)	(153		)
Deferred Income Tax Benefit	(873		)	(297		)
Stock-Based Compensation Expense	103			95
Tax Benefit from Exercise of Stock Options	28			78
Net Increase in Other Assets	(5,719		)	(1,565		)
Net Increase in Other Liabilities	8,563			2,613
Net Cash Provided By Operating Activities	13,126			10,731
Cash Flows from Investing Activities:
Proceeds from the Maturities and Calls of Securities Available-for-Sale	17,444			21,261
Purchases of Securities Available-for-Sale	(33,201		)	—
Proceeds from the Maturities and Calls of Securities Held-to-Maturity	7,075			5,319
Purchases of Securities Held-to-Maturity	(717		)	(1,457		)
Net Increase in Loans	(27,317		)	(39,545		)
Proceeds from the Sales of Premises and Equipment, Other Real Estate Owned and Repossessed Assets	781			442
Purchase of Premises and Equipment	(1,072		)	(2,099		)
Net Decrease in Other Investments	4,938			7,628
Net Cash Used By Investing Activities	(32,069		)	(8,451		)
Cash Flows from Financing Activities:
Net Increase in Deposits	194,951			144,513
Net Decrease in Short-Term Federal Home Loan Bank Borrowings	(130,000		)	(159,500		)
Net Increase in Short-Term Borrowings	6,810			3,748
Finance Lease Payments	(5		)	(4		)
Federal Home Loan Bank Advances	40,000			—
Repayments of Federal Home Loan Bank Term Advances	(20,000		)	(10,000		)
Purchase of Treasury Stock	(1,507		)	(1,392		)
Stock Options Exercised, Net	343			535
Shares Issued Under the Employee Stock Purchase Plan	121			117
Shares Issued for Dividend Reinvestment Plans	442			453
Cash Dividends Paid	(3,904		)	(3,760		)
Net Cash Provided (Used) By Financing Activities	87,251			(25,290		)
Net Increase (Decrease) in Cash and Cash Equivalents	68,308			(23,010		)
Cash and Cash Equivalents at Beginning of Period	70,221			84,239
Cash and Cash Equivalents at End of Period	$	138,529		$	61,229

Supplemental Disclosures to Statements of Cash Flow Information:
Interest on Deposits and Borrowings	$	5,264		$	4,924
Income Taxes	344			311
Non-cash Investing and Financing Activity:
Transfer of Loans to Other Real Estate Owned and Repossessed Assets	371			728

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 March 31, 2020, December 31, 2019 and March 31, 2019; the results of operations for the three-month periods ended March 31, 2020 and 2019; the consolidated statements of comprehensive income for the three-month periods ended March 31, 2020 and 2019; the changes in stockholders' equity for the three-month periods ended March 31, 2020 and 2019; and the cash flows for the three-month periods ended March 31, 2020 and 2019. 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 (US GAAP) 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. Due to the uncertainty regarding the impact of the COVID-19 pandemic, management utilized estimates and assumptions in its evaluation of potential impairment of the Company's right-of-use lease assets, goodwill and intangible assets. Our most significant estimate is the allowance for loan losses. Other estimates include the evaluation of other-than-temporary impairment of investment securities, pension and other post-retirement 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, 2019 included in Arrow's Annual Report on Form 10-K for the year ended December 31, 2019.

The following accounting standards have been adopted in the first three months of 2020:

In August 2018, the Financial Accounting Standards Board (FASB) issued ASU 2018-13 "Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement" as part of its disclosure framework, and pursuant to which FASB has eliminated, amended and added disclosure requirements for fair value measurements. For Arrow, the standard became effective, on a prospective basis, on January 1, 2020. The adoption of this change in fair value disclosure did not have a material impact on its financial position or the results of operations in the period subsequent to its adoption.

In August 2018, the FASB issued Accounting Standards Update (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 currently often expensed under US GAAP. For Arrow, the standard was adopted, on a prospective basis, on January 1, 2020. The adoption of this standard did not have a material impact on its financial position or the results of operations in the period subsequent to its adoption.

In October 2018, the FASB issued ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities ("ASU 2018-17"). ASU 2018-17 provides that indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. For Arrow, the standard was effective on January 1, 2020 and the adoption of this standard did not have a material impact on its financial position or the results of operations in the period subsequent to its adoption.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). ASU 2020-04 provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued, such as LIBOR. Companies can apply the ASU immediately. However, the guidance will only be available for a limited time (generally through December 31, 2022), and provides optional relief for contract modifications, hedge accounting and Held-to-maturity debt securities. For Arrow, this standard was effective January 1, 2020 and can be applied prospectively beginning January 1, 2020 for contract modifications and hedging relationships. The one-time election to sell and/or transfer securities classified as Held-to-maturity may be made at any point after March 12, 2020. Arrow is evaluating the impact of this standard as it will provide relief for contracts currently tied to LIBOR and hedge accounting relationships.

# 8

Note 2. INVESTMENT SECURITIES (In Thousands)

The following table is the schedule of Available-For-Sale Securities at March 31, 2020, December 31, 2019 and March 31, 2019:



Available-For-Sale Securities
	U.S. Government & Agency Obligations		State and Municipal Obligations		Mortgage- Backed Securities			Corporate and Other Debt Securities			Total Available- For-Sale Securities
March 31, 2020
Available-For-Sale Securities, at Amortized Cost	$	5,002	$	723	$	365,333		$	1,000		$	372,058
Gross Unrealized Gains	179		—		7,484			—			7,663
Gross Unrealized Losses	—		—		(1,335		)	(200		)	(1,535		)
Available-For-Sale Securities, at Fair Value	5,181		723		371,482			800			378,186
Available-For-Sale Securities, Pledged as Collateral, at Fair Value											273,124

Maturities of Debt Securities, at Amortized Cost:
Within One Year	$	—	$	26	$	14,201		$	—		$	14,227
From 1 - 5 Years	5,002		257		325,234			—			330,493
From 5 - 10 Years	—		—		25,898			1,000			26,898
Over 10 Years	—		440		—			—			440

Maturities of Debt Securities, at Fair Value:
Within One Year	$	—	$	26	$	14,616		$	—		$	14,642
From 1 - 5 Years	5,181		257		331,422			—			336,860
From 5 - 10 Years	—		—		25,444			800			26,244
Over 10 Years	—		440		—			—			440

Securities in a Continuous Loss Position, at Fair Value:
Less than 12 Months	$	—	$	—	$	18,846		$	—		$	18,846
12 Months or Longer	—		—		59,262			800			60,062
Total	$	—	$	—	$	78,108		$	800		$	78,908
Number of Securities in a Continuous Loss Position	—		—		27			1			28

Unrealized Losses on Securities in a Continuous Loss Position:
Less than 12 Months	$	—	$	—	$	316		$	—		$	316
12 Months or Longer	—		—		1,019			200			1,219
Total	$	—	$	—	$	1,335		$	200		$	1,535

Disaggregated Details:
US Agency Obligations, at Amortized Cost	5,002
US Agency Obligations, at Fair Value	5,181
US Government Agency Securities, at Amortized Cost					$	58,089
US Government Agency Securities, at Fair Value					57,091
Government Sponsored Entity Securities, at Amortized Cost					307,244
Government Sponsored Entity Securities, at Fair Value					314,391

# 9



Available-For-Sale Securities
	U.S. Government & Agency Obligations		State and Municipal Obligations		Mortgage- Backed Securities			Corporate and Other Debt Securities			Total Available- For-Sale Securities
December 31, 2019
Available-For-Sale Securities, at Amortized Cost	$	5,002	$	764	$	349,944		$	1,000		$	356,710
Gross Unrealized Gains	52		—		1,852			—			1,904
Gross Unrealized Losses	—		—		(1,080		)	(200		)	(1,280		)
Available-For-Sale Securities, at Fair Value	5,054		764		350,716			800			357,334
Available-For-Sale Securities, Pledged as Collateral, at Fair Value											164,426

Securities in a Continuous Loss Position, at Fair Value:
Less than 12 Months	$	—	$	—	$	52,491		$	—		$	52,491
12 Months or Longer	—		—		97,164			800			97,964
Total	$	—	$	—	$	149,655		$	800		$	150,455
Number of Securities in a Continuous Loss Position	—		—		54			1			55

Unrealized Losses on Securities in a Continuous Loss Position:
Less than 12 Months	$	—	$	—	$	317		$	—		$	317
12 Months or Longer	—		—		763			200			963
Total	$	—	$	—	$	1,080		$	200		$	1,280

Disaggregated Details:
US Agency Obligations, at Amortized Cost	5,002
US Agency Obligations, at Fair Value	5,054
US Government Agency Securities, at Amortized Cost					$	61,102
US Government Agency Securities, at Fair Value					60,616
Government Sponsored Entity Securities, at Amortized Cost					288,842
Government Sponsored Entity Securities, at Fair Value					290,100

# 10



Available-For-Sale Securities
	U.S. Government & Agency Obligations			State and Municipal Obligations		Mortgage- Backed Securities			Corporate and Other Debt Securities			Total Available- For-Sale Securities
March 31, 2019
Available-For-Sale Securities, at Amortized Cost	$	35,519		$	1,114	$	263,347		$	1,000		$	300,980
Gross Unrealized Gains	—			2		657			—			659
Gross Unrealized Losses	(136		)	—		(2,491		)	(200		)	(2,827		)
Available-For-Sale Securities, at Fair Value	35,383			1,116		261,513			800			298,812
Available-For-Sale Securities, Pledged as Collateral, at Fair Value												255,028

Securities in a Continuous Loss Position, at Fair Value:
Less than 12 Months	$	—		$	—	$	53,131		$	—		$	53,131
12 Months or Longer	35,383			—		155,108			800			191,291
Total	$	35,383		$	—	$	208,239		$	800		$	244,422
Number of Securities in a Continuous Loss Position	7			—		80			1			88

Unrealized Losses on Securities in a Continuous Loss Position:
Less than 12 Months	$	—		$	—	$	258		$	—		$	258
12 Months or Longer	136			—		2,233			200			2,569
Total	$	136		$	—	$	2,491		$	200		$	2,827

Disaggregated Details:
US Agency Obligations, at Amortized Cost	35,519
US Agency Obligations, at Fair Value	35,383
US Government Agency Securities, at Amortized Cost						$	70,358
US Government Agency Securities, at Fair Value						70,034
Government Sponsored Entity Securities, at Amortized Cost						192,989
Government Sponsored Entity Securities, at Fair Value						191,479

# 11

The following table is the schedule of Held-To-Maturity Securities at March 31, 2020, December 31, 2019 and March 31, 2019:



Held-To-Maturity Securities
	State and Municipal Obligations			Mortgage- Backed Securities		Total Held-To Maturity Securities
March 31, 2020
Held-To-Maturity Securities, at Amortized Cost	$	204,148		$	34,372	$	238,520
Gross Unrealized Gains	3,104			1,329		4,433
Gross Unrealized Losses	(149		)	—		(149		)
Held-To-Maturity Securities, at Fair Value	207,103			35,701		242,804
Held-To-Maturity Securities, Pledged as Collateral, at Fair Value						231,539

Maturities of Debt Securities, at Amortized Cost:
Within One Year	$	16,308		$	2,857	$	19,165
From 1 - 5 Years	115,665			31,515		147,180
From 5 - 10 Years	70,585			—		70,585
Over 10 Years	1,590			—		1,590

Maturities of Debt Securities, at Fair Value:
Within One Year	$	16,329		$	2,964	$	19,293
From 1 - 5 Years	117,119			32,737		149,856
From 5 - 10 Years	72,031			—		72,031
Over 10 Years	1,624			—		1,624

Securities in a Continuous Loss Position, at Fair Value:
Less than 12 Months	$	5,625		$	—	$	5,625
12 Months or Longer	1,867			—		1,867
Total	$	7,492		$	—	$	7,492

Number of Securities in a Continuous Loss Position	16			—		16

Unrealized Losses on Securities in a Continuous Loss Position:
Less than 12 Months	$	16		$	—	$	16
12 Months or Longer	133			—		133
Total	$	149		$	—	$	149

Disaggregated Details:
US Government Agency Securities, at Amortized Cost				$	1,594
US Government Agency Securities, at Fair Value				1,655
Government Sponsored Entity Securities, at Amortized Cost				32,778
Government Sponsored Entity Securities, at Fair Value				34,046

# 12



Held-To-Maturity Securities
	State and Municipal Obligations			Mortgage- Backed Securities			Total Held-To Maturity Securities
December 31, 2019
Held-To-Maturity Securities, at Amortized Cost	$	208,243		$	36,822		$	245,065
Gross Unrealized Gains	4,170			477			4,647
Gross Unrealized Losses	(94		)	—			(94		)
Held-To-Maturity Securities, at Fair Value	212,319			37,299			249,618
Held-To-Maturity Securities, Pledged as Collateral, at Fair Value							237,969

Securities in a Continuous Loss Position, at Fair Value:
Less than 12 Months	$	1,438		$	—		$	1,438
12 Months or Longer	1,994			—			1,994
Total	$	3,432		$	—		$	3,432
Number of Securities in a Continuous Loss Position	10			—			10

Unrealized Losses on Securities in a Continuous Loss Position:
Less than 12 Months	$	85		$	—		$	85
12 Months or Longer	9			—			9
Total	$	94		$	—		$	94

Disaggregated Details:
US Government Agency Securities, at Amortized Cost				$	1,703
US Government Agency Securities, at Fair Value				1,720
Government Sponsored Entity Securities, at Amortized Cost				35,119
Government Sponsored Entity Securities, at Fair Value				35,579

March 31, 2019
Held-To-Maturity Securities, at Amortized Cost	$	234,454		$	44,946		$	279,400
Gross Unrealized Gains	1,695			97			1,792
Gross Unrealized Losses	(573		)	(205		)	(778		)
Held-To-Maturity Securities, at Fair Value	235,576			44,838			280,414
Held-To-Maturity Securities, Pledged as Collateral, at Fair Value							265,465

Securities in a Continuous Loss Position, at Fair Value:
Less than 12 Months	$	—		$	—		$	—
12 Months or Longer	71,450			26,021			97,471
Total	$	71,450		$	26,021		$	97,471
Number of Securities in a Continuous Loss Position	193			29			222

# 13

Held-To-Maturity Securities

State and

Municipal

Obligations

Mortgage-

Backed

Securities

Total

Held-To

Maturity

Securities

Unrealized Losses on

Securities in a Continuous

Loss Position:

Price	33.43	EPS	2
Shares	15	P/E	18
MCap	501	P/FCF	15
Net Debt	-92	EBIT	51
TEV	409	TEV/EBIT	8
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-03-31	Filed 2020-05-07
10-K	2019-12-31	Filed 2020-02-28
10-Q	2019-09-30	Filed 2019-11-05
10-Q	2019-06-30	Filed 2019-08-05
10-Q	2019-03-31	Filed 2019-05-09
10-K	2018-12-31	Filed 2019-03-08
10-Q	2018-09-30	Filed 2018-11-08
10-Q	2018-06-30	Filed 2018-08-08
10-Q	2018-03-31	Filed 2018-05-09
10-K	2017-12-31	Filed 2018-03-12
10-Q	2017-09-30	Filed 2017-11-07
10-Q	2017-06-30	Filed 2017-08-08
10-Q	2017-03-31	Filed 2017-05-09
10-K	2016-12-31	Filed 2017-03-14
10-Q	2016-09-30	Filed 2016-11-09
10-Q	2016-06-30	Filed 2016-08-09
10-Q	2016-03-31	Filed 2016-05-10
10-K	2015-12-31	Filed 2016-03-10
10-Q	2015-09-30	Filed 2015-11-06
10-Q	2015-06-30	Filed 2015-08-06
10-Q	2015-03-31	Filed 2015-05-08
10-K	2014-12-31	Filed 2015-03-13
10-Q	2014-09-30	Filed 2014-11-07
10-Q	2014-06-30	Filed 2014-08-06
10-Q	2014-03-31	Filed 2014-05-08
10-K	2013-12-31	Filed 2014-03-17
10-Q	2013-09-30	Filed 2013-11-12
10-Q	2013-06-30	Filed 2013-08-07
10-Q	2013-03-31	Filed 2013-05-09
10-K	2012-12-31	Filed 2013-03-15
10-Q	2012-09-30	Filed 2012-11-08
10-Q	2012-06-30	Filed 2012-08-09
10-Q	2012-03-31	Filed 2012-05-08
10-K	2011-12-31	Filed 2012-03-14
10-Q	2011-09-30	Filed 2011-11-08
10-Q	2011-06-30	Filed 2011-08-08
10-Q	2011-03-31	Filed 2011-05-10
10-K	2010-12-31	Filed 2011-03-10
10-Q	2010-09-30	Filed 2010-11-05
10-Q	2010-06-30	Filed 2010-08-04
10-Q	2010-03-31	Filed 2010-05-07
10-K	2009-12-31	Filed 2010-03-05

8-K	2020-05-07	Shareholder Vote
8-K	2020-04-30	Other Events, Exhibits
8-K	2020-04-24	Earnings, Other Events, Exhibits
8-K	2020-04-23	Other Events, Exhibits
8-K	2020-02-03	Officers, Other Events, Exhibits
8-K	2020-01-28	Earnings, Exhibits
8-K	2019-10-30	Other Events, Exhibits
8-K	2019-10-22	Earnings, Exhibits
8-K	2019-08-28	Other Events, Exhibits
8-K	2019-07-31	Other Events, Exhibits
8-K	2019-07-22	Earnings, Exhibits
8-K	2019-06-03	Amend Bylaw, Exhibits
8-K	2019-05-08	Shareholder Vote
8-K	2019-04-24	Other Events, Exhibits
8-K	2019-04-23	Earnings, Exhibits
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	Other Events, 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

EX-15	ex15awarenessletterq12020.htm
EX-31.1	ex311ceoq12020.htm
EX-31.2	ex312cfoq12020.htm
EX-32	ex32906cert-q12020.htm



	Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements	3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3. Quantitative and Qualitative Disclosures About Market Risk	62
Item 4. Controls and Procedures	62


PART II - OTHER INFORMATION
Item 1. Legal Proceedings	63
Item 1.A. Risk Factors	63
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 3. Defaults Upon Senior Securities	63
Item 4. Mine Safety Disclosures	63
Item 5. Other Information	64
Item 6. Exhibits	64

SIGNATURES	65

AROW 10Q Quarterly Report

Arrow Financial Earnings 2020-03-31