Arrow Financial (AROW) - 2022 Q1 - Quarterly Report

Financial Performance - Arrow Financial Corporation reported a significant increase in net interest income, reaching $XX million, representing a YY% increase compared to the previous quarter[151]. - Net income for the quarter ended March 31, 2022, was $12,575,000, an increase from $10,309,000 in the previous quarter[152]. - Basic and diluted earnings per share for the quarter were both $0.78, compared to $0.64 in the previous quarter[152]. - Net income for Q1 2022 was $12.6 million, a decrease of 5.2% from $13.3 million in Q1 2021[164]. - Diluted earnings per share (EPS) for Q1 2022 was $0.78, down 6.0% from $0.83 in Q1 2021[164]. - Return on average tangible equity for the quarter was 14.72%, up from 12.01% in the previous quarter[154]. - Return on average assets decreased to 1.26% in Q1 2022 from 1.45% in Q1 2021, a drop of 0.19%[224]. Asset and Equity Management - Tangible book value per share increased to $AA, reflecting a strong capital position and shareholder value[149]. - Total stockholders' equity decreased to $357,243,000 from $371,186,000 in the previous quarter[154]. - Stockholders' equity was $357.2 million at March 31, 2022, a decrease of $13.9 million, or 3.8%, from December 31, 2021[166]. - The total equity as of March 31, 2022, was $357.2 million, an increase of $14.8 million, or 4.3%, from the prior-year level[213]. Loan and Deposit Growth - The company anticipates continued growth in loan demand, particularly in commercial lending, projecting a growth rate of BB% over the next fiscal year[143]. - Total loans reached $2.7 billion as of March 31, 2022, with a loan growth of $69.3 million, or 2.6%, from December 31, 2021[168]. - Deposit balances increased to $3.7 billion, up $164.9 million in Q1 2022 and $261.8 million, or 7.6%, year-over-year[164]. - Total deposits rose to $3.72 billion, an increase of $164.9 million or 4.6% from December 31, 2021, and up by $261.8 million or 7.6% year-over-year[176]. Income and Expense Analysis - Net interest income for the quarter was $27,825,000, an increase from $27,202,000 in the previous quarter[152]. - Noninterest income increased to $8,162,000 from $7,589,000 in the previous quarter[152]. - Noninterest income for Q1 2022 was $8.2 million, a decrease from $8.6 million in Q1 2021[164]. - Noninterest expense for Q1 2022 was $18.9 million, an increase of $0.3 million, or 1.4%, from Q1 2021[229]. - The efficiency ratio improved to 52.30% from 59.09% in the previous quarter[152]. - The efficiency ratio improved to 52.30% from 53.46% year-over-year, a decrease of 1.2%[229]. Credit Quality and Risk Management - The allowance for credit losses was maintained at FF%, reflecting a conservative approach to asset quality amid economic uncertainties[144]. - The provision for credit losses was $769 thousand in Q1 2022, with an allowance for credit losses of $27.7 million, representing 1.01% of loans outstanding[167]. - Nonperforming loans were $9.9 million at March 31, 2022, representing 0.36% of period-end loans, an increase from 0.32% a year earlier[167]. - Nonperforming assets decreased to $10.1 million from $11.8 million at December 31, 2021, indicating improved asset quality[204]. - The ratio of nonperforming assets to total assets was 0.24% at March 31, 2022, down from 0.29% at December 31, 2021[204]. Strategic Initiatives - The company is focusing on expanding its market presence through strategic partnerships and potential acquisitions in the upcoming quarters[144]. - Arrow plans to invest in new technology to enhance customer experience and operational efficiency, with an estimated budget of $GG million[143]. - Arrow expects the majority of its PPP loans to be forgiven by the end of 2022, which would accelerate the recognition of fees earned[207]. Regulatory and Compliance - Common Equity Tier 1 Capital Ratio as of March 31, 2022, was 13.48%, down from 13.77% in December 2021[157]. - The total risk-based capital ratio for Arrow Financial Corporation was 15.33% as of March 31, 2022, well above the minimum requirement of 8.0%[212]. - Arrow's Junior Subordinated Obligations of $20 million will continue to qualify as Tier 1 regulatory capital until maturity or redemption[196].