250 Glen Street Glens Falls, NY 12801
			NASDAQ® Symbol: "AROW" Website: arrowfinancial.com Media Contact: Rachael Murray Tel: (518) 742-6505

Arrow Reports 2nd Quarter Net Income of $8.6 Million, or $0.52 per Share,

Declares Dividend of $0.27 per Share

GLENS FALLS, N.Y. (July 25, 2024) – Arrow Financial Corporation (NasdaqGS® – AROW) ("Arrow" or "the Company") announced financial results for the three-month period ended June 30, 2024. Net income for the second quarter of 2024 was $8.6 million and fully diluted earnings per share ("EPS") was $0.52, versus $6.0 million and EPS of $0.35, for the same period in 2023.

The Board of Directors of Arrow declared a quarterly cash dividend of $0.27 per share payable August 23, 2024 to shareholders of record as of August 12, 2024. This is Arrow's 45th consecutive quarterly cash dividend.

This Earnings Release and related commentary should be read in conjunction with the Company's July 25, 2024 Form 8-K and related Second Quarter 2024 Investor Presentation, which can also be found on Arrow's website: arrowfinancial.com/documents/investor-presentations.

Arrow President and CEO David S. DeMarco:

“We are pleased to report another quarter of solid performance, demonstrating the hard work and dedication of our team. We recently expanded our insurance business with the strategic acquisition of the assets of A&B Agency, Inc. We are also looking forward to the close of our branch acquisition in Whitehall, New York scheduled for early August.

In addition, on July 22nd, we received regulatory approval to combine our banking subsidiaries, Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company, into a single entity renamed Arrow Bank National Association, or Arrow Bank. This positions us to enhance our strategic growth while ensuring stability with the same dedicated leadership team, staff and branch locations. We are confident these initiatives will further strengthen our market position and drive long-term value for our shareholders.”

Second-Quarter Highlights and Key Metrics

•Gross loans grew $57.6 million1, or 7.1% on an annualized basis.

•Net interest margin improved to 2.67% (2.69% FTE2), up from 2.60% (2.62% FTE) in the prior quarter

•Average loan yields increased to 5.17% for 2Q24, up from 5.02% in the prior quarter

•Deposit balances were $3.7 billion

•Tangible Book Value increased to $21.54

•Return on Average Assets (ROA) improved to 0.82%, up from 0.73% in the previous quarter

•Received regulatory approval to acquire a branch in Whitehall, New York with approximately $35 million in deposits; transaction expected to close in August 2024

1 Excludes both $0.4 million fair value hedge adjustment at June 30, 2024 and $1.2 million fair value hedge adjustment at March 31, 2024

2 FTE Net interest margin is a non-GAAP measure. See reconciliation on Note 3 to the Selected Quarterly Information.

1

Income Statement

•Net Income: Net income for the second quarter of 2024 was $8.6 million, increasing from $7.7 million in the first quarter of 2024 and $6.0 million in the second quarter of 2023.

◦As compared to the prior quarter, net income benefited from an increase of $0.7 million in net interest income as well as a decrease in non-interest expense of $0.7 million.

◦As compared to the second quarter of 2023, net interest income increased $1.4 million. Non-interest income increased $1.0 million and non-interest expense decreased $0.8 million.

•Net Interest Income: Net interest income for the second quarter of 2024 was $27.2 million, increasing 2.6% from $26.5 million for the first quarter of 2024 and increasing 5.4% from $25.8 million in the second quarter of 2023.

◦Total interest and dividend income was $48.0 million for the second quarter of 2024, an increase from $46.7 million in the first quarter of 2024 and from $40.0 million for the second quarter of 2023. These increases were primarily driven by loan growth and higher loan rates. Interest expense for the second quarter of 2024 was $20.8 million, an increase from $20.2 million for the first quarter of 2024 and from $14.2 million for the second quarter of 2023. The increases for both comparison periods were driven primarily by higher deposit rates and changes in deposit composition.

•Net Interest Margin: Net interest margin, on an FTE basis, for the second quarter of 2024 was 2.69% compared to 2.62% for the first quarter of 2024 and 2.63% for the second quarter of 2023. The increase in net interest margin compared to the first quarter in 2024 was primarily the result of continued yield expansion on earning assets combined with moderating increase in the cost of interest-bearing liabilities. As compared to the second quarter of 2023, the increase in net interest margin was primarily the result of yield on average earning assets increasing at a faster pace than costs of interest-bearing liabilities. Net interest margin is affected by deposits continuing to migrate to higher costs products, such as money market savings and time deposits.

			Three Months Ended
			(Dollars in Thousands)
			June 30, 2024						March 31, 2024						June 30, 2023
Interest and Dividend Income			$	47,972					$	46,677					$	40,013
Interest Expense			20,820						20,222						14,241
Net Interest Income			27,152						26,455						25,772
Average Earning Assets(A)			4,083,813						4,085,398						3,953,642
Average Interest-Bearing Liabilities			3,127,417						3,108,093						2,924,743
Yield on Earning Assets(A)			4.72		%				4.60		%				4.06		%
Cost of Interest-Bearing Liabilities			2.68						2.62						1.95
Net Interest Spread			2.04						1.98						2.11
Net Interest Margin			2.67						2.60						2.61
Net Interest Margin - FTE			2.69						2.62						2.63
(A) Includes Nonaccrual Loans.

•Provision for Credit Losses: For the second quarter of 2024, the provision for credit losses was $0.8 million compared to $0.6 million in the first quarter of 2024 and $0.9 million in the second quarter of 2023. The key drivers for the provision for credit losses in the second quarter of 2024 were loan growth and replenishment of the allowance for charge-offs, partially offset by changes to the economic forecast factors embedded in the credit loss allowance model.

2

•Non-Interest Income: Non-interest income for the three months ended June 30, 2024, was $7.9 million consistent with the first quarter of 2024 and an increase from $6.9 million in the second quarter of 2023 due to the other investment income and a small gain on a sale leaseback transaction.

•Non-Interest Expense: Non-interest expense for the second quarter of 2024 was $23.3 million, a decrease from $24.0 million in the first quarter of 2024 and from $24.1 million for the second quarter of 2023. The decrease from the prior quarter and year was primarily due to elimination of elevated legal and professional expenses related to the delayed filings in 2023.

•Provision for Income Taxes: The provision for income taxes was 21.2%, or $2.3 million, for the second quarter of 2024, 20.9%, or $2.0 million, for the first quarter of 2024 and 20.9%, or $1.6 million, for the second quarter of 2023.

Balance Sheet

•Total Assets: Total assets were $4.2 billion at June 30, 2024, a decrease of $89.2 million, or 2.1%, as compared to March 31, 2024 and an increase of $140.8 million, or 3.4%, as compared to June 30, 2023. For the second quarter of 2024, overall change in balance sheet was attributable to seasonal changes of cash balances offset by growth in the loan portfolio.

•Investments: Total investments were $556.4 million as of June 30, 2024, a decrease of $63.6 million, or 10.3%, compared to March 31, 2024 and a decrease of $137.6 million, or 19.8%, compared to June 30, 2023. The decrease from March 31, 2024 was driven primarily by paydowns and maturities. The change from June 30, 2023 was also driven by paydowns and maturities as well as the fourth quarter 2023 repositioning of the investment portfolio, reducing the portfolio by approximately $25 million at the time of the transaction. There were no credit quality issues related to the investment portfolio.

•Loans3: Total loans reached $3.3 billion as of June 30, 2024. Loan growth for the second quarter of 2024 was $57.6 million, and $245.3 million since June 30, 2023. Loan growth was spread across all loan products. Please see the loan detail included in the Consolidated Financial Information table on page 12.

•Allowance for Credit Losses: The allowance for credit losses was $31.0 million as of June 30, 2024, which represented 0.94% of loans outstanding, as compared to $31.6 million, or 0.97%, at March 31, 2024 and $31.2 million, or 1.02%, at June 30, 2023. Net charge-offs, expressed as an annualized percentage of average loans outstanding, were 0.16% for the three-month period ended June 30, 20244, as compared to 0.04% for the three-month period ended March 31, 2024 and 0.07% for the three-month period ended June 30, 2023. Nonperforming assets were $21.3 million as of June 30, 2024, representing 0.50% of period-end assets, compared to 0.50% at March 31, 2024 and 0.17% at June 30, 2023. The increase from the second quarter of 2023 was primarily due to one large, well collateralized loan relationship of approximately $15 million, which moved into non-performing status during the fourth quarter of 2023.

•Deposits: At June 30, 2024, deposit balances were $3.7 billion, a decrease of $95.4 million from March 31, 2024 and an increase of $181.4 million from June 30, 2023. The decrease from the first quarter was primarily attributable to the seasonality of municipal deposits, expected to normalize in the third quarter. The increase from June 30, 2023 was partially attributable to $175 million of brokered CDs, primarily used to reduce borrowings by $160 million. Arrow simultaneously entered

3 Excludes both $0.4 million fair value hedge adjustment at June 30, 2024 and $1.2 million fair value hedge adjustment at March 31, 2024

4 Charge-offs for 2Q24 included 0.09% related to a previously specifically reserved amount for overdraft balances relating to one customer relationship

3

into three-year interest rate swaps to strategically manage its asset-liability profile and cost of funds. Please refer to page 7 for further details related to deposits.

•Capital: Total stockholders’ equity was $383.0 million at June 30, 2024, an increase of $5.0 million, or 1.3%, from March 31, 2024 and an increase of $21.6 million, or 6.0%, from the June 30, 2023 level of $361.4 million. The increase in capital from June 30, 2023, was primarily attributable to net income of $32 million, other comprehensive income of $16 million offset by dividends and stock repurchases of $27 million. Arrow's regulatory capital ratios remained strong. As of June 30, 2024, Arrow's Common Equity Tier 1 Capital Ratio was 12.88% and Total Risk-Based Capital Ratio was 14.57%. The capital ratios of Arrow's subsidiary banks, Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company, continued to exceed the “well capitalized” regulatory standards.

Additional Commentary

•Bauer Financial Ratings: Both Glens Falls National Bank and Saratoga National Bank continued to maintain their 5-Star Exceptional Performance ratings from Bauer Financial, for the 68th and 60th quarters, respectively.

•Subsidiary Bank Unification: On July 22 2024, Arrow received approval from the Office of the Comptroller of the Currency to combine its two subsidiary banks, Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company, into one bank that will be known as Arrow Bank National Association. The combination will create operational efficiencies, unify branding and enhance Arrow's ability to pursue its strategic growth objectives. The combination of the entities is anticipated to become effective December 31, 2024.

About Arrow

Arrow Financial Corporation is a multi-bank holding company headquartered in Glens Falls, New York, serving the financial needs of northeastern New York. Arrow is the parent of Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company. Other subsidiaries include Upstate Agency, LLC and North Country Investment Advisers, Inc.

Non-GAAP Financial Measures Reconciliation

In addition to presenting information in conformity with accounting principles generally accepted in the United States of America (GAAP), this news release contains financial information determined by methods other than GAAP (non-GAAP). Some 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. These non-GAAP financial measures include: tangible equity, return on tangible equity, tax-equivalent adjustment and related net interest income, tax-equivalent, the efficiency ratio and net interest margin (FTE). Management believes that the non-GAAP financial measures disclosed by Arrow are useful in evaluating Arrow'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."

4

Safe Harbor Statement

The information in this document may contain statements based on management’s beliefs, assumptions, expectations, estimates and projections about the future. Such "forward-looking statements," as defined in Section 21E of the Securities Exchange Act of 1934, as amended, involve a degree of uncertainty and attendant risk. Actual outcomes and results may differ, explicitly or by implication. We are not obligated to revise or update these statements to reflect unanticipated events. This document should be read in conjunction with Arrow's 2023 Form 10-K and other filings with the SEC.

5

ARROW FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Amounts - Unaudited)

						Three Months Ended June 30												Six Months Ended June 30
						2024												2023						2024						2023
INTEREST AND DIVIDEND INCOME
Interest and Fees on Loans						$	42,141											$	34,618					$	82,517					$	66,504
Interest on Deposits at Banks						2,185												1,674						4,632						2,153
Interest and Dividends on Investment Securities:
Fully Taxable						3,009												2,951						6,195						5,899
Exempt from Federal Taxes						637												770						1,305						1,567
Total Interest and Dividend Income						47,972												40,013						94,649						76,123
INTEREST EXPENSE
Interest-Bearing Checking Accounts						1,903												820						3,544						1,190
Savings Deposits						10,571												8,514						20,801						14,101
Time Deposits over $250,000						1,869												1,119						3,842						1,693
Other Time Deposits						5,074												1,196						10,157						1,670
Borrowings						1,186												2,373						2,262						3,166
Junior Subordinated Obligations Issued to   Unconsolidated Subsidiary Trusts						170												171						341						340
Interest on Financing Leases						47												48						95						97
Total Interest Expense						20,820												14,241						41,042						22,257
NET INTEREST INCOME						27,152												25,772						53,607						53,866
Provision for Credit Losses						775												948						1,392						2,502
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES						26,377												24,824						52,215						51,364
NON-INTEREST INCOME
Income From Fiduciary Activities						2,451												2,428						4,908						4,703
Fees for Other Services to Customers						2,706												2,717						5,249						5,312
Insurance Commissions						1,662												1,560						3,344						3,080
Net Gain (Loss) on Securities						54												(181)						71						(285)
Net Gain on Sales of Loans						5												—						9						4
Other Operating Income						978												382						2,133						769
Total Non-Interest Income						7,856												6,906						15,714						13,583
NON-INTEREST EXPENSE
Salaries and Employee Benefits						13,036												12,039						25,929						23,986
Occupancy Expenses, Net						1,774												1,583						3,545						3,211
Technology and Equipment Expense						4,734												4,362						9,554						8,779
FDIC Assessments						698												484						1,413						963
Other Operating Expense						3,076												5,615						6,889						9,440
Total Non-Interest Expense						23,318												24,083						47,330						46,379
INCOME BEFORE PROVISION FOR INCOME TAXES						10,915												7,647						20,599						18,568
Provision for Income Taxes						2,311												1,600						4,335						3,959
NET INCOME						$	8,604											$	6,047					$	16,264					$	14,609
Average Shares Outstanding 1:
Basic						16,685												17,050						16,764						17,050
Diluted						16,709												17,050						16,789						17,050
Per Common Share:
Basic Earnings						$	0.52											$	0.35					$	0.97					$	0.85
Diluted Earnings						0.52												0.35						0.97						0.85
1 June 30, 2023 Share and Per Share Amounts have been restated for the September 26, 2023, 3% stock dividend.

6

ARROW FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share and Per Share Amounts - Unaudited)

			June 30, 2024						December 31, 2023						June 30, 2023
ASSETS
Cash and Due From Banks			$	30,372					$	36,755					$	33,803
Interest-Bearing Deposits at Banks			169,826						105,781						139,798
Investment Securities:
Available-for-Sale at Fair Value			450,786						497,769						543,708
Held-to-Maturity (Fair Value of $96,454 at June 30, 2024; $128,837 at December 31, 2023; and $139,143 at June 30, 2023)			99,348						131,395						143,460
Equity Securities			1,996						1,925						1,889
Other Investments			4,274						5,049						4,932
Loans			3,315,523						3,212,908						3,069,897
Allowance for Credit Losses			(31,009)						(31,265)						(31,170)
Net Loans			3,284,514						3,181,643						3,038,727
Premises and Equipment, Net			59,243						59,642						59,773
Goodwill			21,873						21,873						21,873
Other Intangible Assets, Net			927						1,110						1,302
Other Assets			121,248						126,926						114,388
Total Assets			$	4,244,407					$	4,169,868					$	4,103,653
LIABILITIES
Noninterest-Bearing Deposits			704,707						758,425						759,495
Interest-Bearing Checking Accounts			856,788						799,785						856,016
Savings Deposits			1,446,821						1,466,280						1,517,937
Time Deposits over $250,000			173,526						179,301						140,694
Other Time Deposits			501,797						483,775						228,082
Total Deposits			3,683,639						3,687,566						3,502,224
Borrowings			106,500						26,500						171,800
Junior Subordinated Obligations Issued to Unconsolidated   Subsidiary Trusts			20,000						20,000						20,000
Finance Leases			5,038						5,066						5,093
Other Liabilities			46,212						50,964						43,093
Total Liabilities			3,861,389						3,790,096						3,742,210
STOCKHOLDERS’ EQUITY
Preferred Stock, $1 Par Value and 1,000,000 Shares Authorized at June 30, 2024, December 31, 2023 and June 30, 2023			—						—						—
Common Stock, $1 Par Value; 30,000,000 Shares Authorized (22,066,559 Shares Issued at June 30, 2024 and December 31, 2023 and 21,423,992 Shares Issued at June 30, 2023)			22,067						22,067						21,424
Additional Paid-in Capital			412,917						412,551						401,069
Retained Earnings			72,980						65,792						71,076
Accumulated Other Comprehensive Loss			(31,632)						(33,416)						(47,613)
Treasury Stock, at Cost (5,343,295 Shares at June 30, 2024; 5,124,073 Shares at December 31, 2023 and 4,870,934 Shares at June 30, 2023)			(93,314)						(87,222)						(84,513)
Total Stockholders’ Equity			383,018						379,772						361,443
Total Liabilities and Stockholders’ Equity			$	4,244,407					$	4,169,868					$	4,103,653

7

Arrow Financial Corporation

Selected Quarterly Information

(Dollars In Thousands, Except Per Share Amounts - Unaudited)

Quarter Ended			6/30/2024						3/31/2024						12/31/2023						9/30/2023						6/30/2023
Net Income			$	8,604					$	7,660					$	7,723					$	7,743					$	6,047
Net Changes in Fair Value of Equity Investments (Net of Tax)			39						13						90						52						(133)
Share and Per Share Data:1
Period End Shares Outstanding			16,723						16,710						16,942						17,049						17,050
Basic Average Shares Outstanding			16,685						16,865						17,002						17,050						17,050
Diluted Average Shares Outstanding			16,709						16,867						17,004						17,050						17,050
Basic Earnings Per Share			$	0.52					$	0.45					$	0.46					$	0.46					$	0.35
Diluted Earnings Per Share			0.52						0.45						0.46						0.46						0.35
Cash Dividend Per Share			0.270						0.270						0.270						0.262						0.262
Selected Quarterly Average Balances:
Interest-Bearing Deposits at Banks			$	159,336					$	178,452					$	136,026					$	131,814					$	130,057
Investment Securities			644,192						671,105						713,144						745,693						787,175
Loans			3,280,285						3,235,841						3,170,262						3,096,240						3,036,410
Deposits			3,678,957						3,693,325						3,593,949						3,491,028						3,460,711
Other Borrowed Funds			131,537						122,033						149,507						208,527						220,616
Stockholders' Equity			378,256						379,446						363,753						362,701						365,070
Total Assets			4,237,359						4,245,484						4,159,313						4,109,995						4,087,653
Return on Average Assets, annualized			0.82		%				0.73		%				0.74		%				0.75		%				0.59		%
Return on Average Equity, annualized			9.15		%				8.12		%				8.42		%				8.47		%				6.64		%
Return on Average Tangible Equity, annualized 2			9.74		%				8.64		%				8.99		%				9.05		%				7.10		%
Average Earning Assets			$	4,083,813					$	4,085,398					$	4,019,432					$	3,973,747					$	3,953,642
Average Paying Liabilities			3,127,417						3,108,093						2,985,717						2,920,518						2,924,743
Interest Income			47,972						46,677						44,324						42,117						40,013
Tax-Equivalent Adjustment 3			163						176						184						183						196
Interest Income, Tax-Equivalent 3			48,135						46,853						44,508						42,117						40,013
Interest Expense			20,820						20,222						18,711						16,764						14,241
Net Interest Income			27,152						26,455						25,613						25,353						25,772
Net Interest Income, Tax-Equivalent 3			27,315						26,631						25,797						25,536						25,968
Net Interest Margin, annualized			2.67		%				2.60		%				2.53		%				2.53		%				2.61		%
Net Interest Margin, Tax-Equivalent, annualized 3			2.69		%				2.62		%				2.55		%				2.55		%				2.63		%
Efficiency Ratio Calculation: 4
Non-Interest Expense			$	23,318					$	24,012					$	23,190					$	23,479					$	24,083
Less: Intangible Asset Amortization			40						41						43						43						44
Net Non-Interest Expense			$	23,278					$	23,971					$	23,147					$	23,436					$	24,039
Net Interest Income, Tax-Equivalent			$	27,315					$	26,631					$	25,797					$	25,536					$	25,968
Non-Interest Income			7,856						7,858						7,484						8,050						6,906
Less: Net Gain (Loss) on Securities			54						17						122						71						(181)
Net Gross Income			$	35,117					$	34,472					$	33,159					$	33,515					$	33,055
Efficiency Ratio			66.29		%				69.54		%				69.81		%				69.93		%				72.72		%
Period-End Capital Information:
Total Stockholders' Equity (i.e. Book Value)			$	383,018					$	377,986					$	379,772					$	360,014					$	361,443
Book Value per Share 1			22.90						22.62						22.42						21.12						21.20
Goodwill and Other Intangible Assets, net			22,800						22,891						22,983						23,078						23,175
Tangible Book Value per Share 1,2			21.54						21.25						21.06						19.76						19.84
Capital Ratios:5
Tier 1 Leverage Ratio			9.74		%				9.63		%				9.84		%				9.94		%				9.92		%
Common Equity Tier 1 Capital Ratio			12.88		%				12.84		%				13.00		%				13.17		%				13.27		%
Tier 1 Risk-Based Capital Ratio			13.53		%				13.50		%				13.66		%				13.84		%				13.96		%
Total Risk-Based Capital Ratio			14.57		%				14.57		%				14.74		%				14.94		%				15.08		%
Assets Under Trust Admin. & Investment Mgmt.			$	1,848,349					$	1,829,266					$	1,763,194					$	1,627,522					$	1,711,460

8

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 26, 2023, 3% stock dividend.
2.			Non-GAAP Financial Measure Reconciliation: Tangible Book Value, Tangible Equity, and Return on Tangible Equity exclude goodwill and other intangible assets, net from total equity.  These are non-GAAP financial measures which Arrow believes provide investors with information that is useful in understanding its financial performance.
						6/30/2024						3/31/2024						12/31/2023						9/30/2023						6/30/2023
			Total Stockholders' Equity (GAAP)			$	383,018					$	377,986					$	379,772					$	360,014					$	361,443
			Less: Goodwill and Other Intangible assets, net			22,800						22,891						22,983						23,078						23,175
			Tangible Equity (Non-GAAP)			$	360,218					$	355,095					$	356,789					$	336,936					$	338,268
			Period End Shares Outstanding			16,723						16,710						16,942						17,049						17,050
			Tangible Book Value per Share (Non-GAAP)			$	21.54					$	21.25					$	21.06					$	19.76					$	19.84
			Net Income			8,604						7,660						7,723						7,743						6,047
			Return on Tangible Equity (Net Income/Tangible Equity - Annualized)			9.74		%				8.64		%				8.99		%				9.05		%				7.10		%
3.			Non-GAAP Financial Measure Reconciliation: Net Interest Margin is the ratio of annualized tax-equivalent net interest income to average earning assets. This is also a non-GAAP financial measure which Arrow believes provides investors with information that is useful in understanding its financial performance.
						6/30/2024						3/31/2024						12/31/2023						9/30/2023						6/30/2023
			Interest Income (GAAP)			$	47,972					$	46,677					$	44,324					$	42,117					$	40,013
			Add: Tax-Equivalent adjustment      (Non-GAAP)			163						176						184						183						196
			Interest Income - Tax Equivalent      (Non-GAAP)			$	48,135					$	46,853					$	44,508					$	42,300					$	40,209
			Net Interest Income (GAAP)			$	27,152					$	26,455					$	25,613					$	25,353					$	25,772
			Add: Tax-Equivalent adjustment      (Non-GAAP)			163						176						184						183						196
			Net Interest Income - Tax Equivalent      (Non-GAAP)			$	27,315					$	26,631					$	25,797					$	25,536					$	25,968
			Average Earning Assets			$	4,083,813					$	4,085,398					$	4,019,432					$	3,973,747					$	3,953,642
			Net Interest Margin (Non-GAAP)*			2.69		%				2.62		%				2.55		%				2.55		%				2.63		%
4.			Non-GAAP Financial Measure Reconciliation: Financial Institutions often use the "efficiency ratio", a non-GAAP ratio, as a measure of expense control. Arrow believes the efficiency ratio provides investors with information that is useful in understanding its financial performance. Arrow defines efficiency ratio as the ratio of non-interest expense to net gross income (which equals tax-equivalent net interest income plus non-interest income, as adjusted).
5.			For the current quarter, all of the regulatory capital ratios as well as the Total Risk-Weighted Assets are calculated in accordance with bank regulatory capital rules. The June 30, 2024 CET1 ratio listed in the tables (i.e., 12.88%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%).
						6/30/2024						3/31/2024						12/31/2023						9/30/2023						6/30/2023
			Total Risk Weighted Assets			$	3,072,922					$	3,049,525					$	3,032,188					$	2,988,438					$	2,937,837
			Common Equity Tier 1 Capital			395,691						391,706						394,166						393,541						389,966
			Common Equity Tier 1 Ratio			12.88		%				12.84		%				13.00		%				13.17		%				13.27		%
* Quarterly ratios have been annualized.

9

Arrow Financial Corporation

Average Consolidated Balance Sheets and Net Interest Income Analysis

(Dollars in Thousands - Unaudited)

Quarter Ended:			June 30, 2024																		June 30, 2023
									Interest						Rate												Interest						Rate
			Average						Income/						Earned/						Average						Income/						Earned/
			Balance						Expense						Paid						Balance						Expense						Paid
Interest-Bearing Deposits at Banks			$	159,336					$	2,185					5.52		%				$	130,057					$	1,674					5.16		%
Investment Securities:
Fully Taxable			530,869						3,009						2.28						637,018						2,951						1.86
Exempt from Federal Taxes			113,323						637						2.26						150,157						770						2.06
Loans			3,280,285						42,141						5.17						3,036,410						34,618						4.57
Total Earning Assets			4,083,813						47,972						4.72						3,953,642						40,013						4.06
Allowance for Credit Losses			(31,459)																		(30,577)
Cash and Due From Banks			28,611																		28,742
Other Assets			156,394																		135,846
Total Assets			$	4,237,359																	$	4,087,653
Deposits:
Interest-Bearing Checking Accounts			$	832,087					1,903						0.92						$	863,892					820						0.38
Savings Deposits			1,487,062						10,571						2.86						1,504,412						8,514						2.27
Time Deposits of $250,000 or More			172,655						1,869						4.35						133,897						1,119						3.35
Other Time Deposits			504,076						5,074						4.05						201,926						1,196						2.38
Total Interest-Bearing Deposits			2,995,880						19,417						2.61						2,704,127						11,649						1.73
Borrowings			106,502						1,186						4.48						195,527						2,373						4.87
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts			20,000						170						3.42						20,000						171						3.43
Finance Leases			5,035						47						3.75						5,089						48						3.78
Total Interest-Bearing Liabilities			3,127,417						20,820						2.68						2,924,743						14,241						1.95
Noninterest-Bearing Deposits			683,077																		756,584
Other Liabilities			48,609																		41,256
Total Liabilities			3,859,103																		3,722,583
Stockholders’ Equity			378,256																		365,070
Total Liabilities and Stockholders’ Equity			$	4,237,359																	$	4,087,653
Net Interest Income									$	27,152																	$	25,772
Net Interest Spread															2.04		%																2.11		%
Net Interest Margin															2.67		%																2.61		%

10

Arrow Financial Corporation

Average Consolidated Balance Sheets and Net Interest Income Analysis

(Dollars in Thousands - Unaudited)

Quarter Ended:			June 30, 2024																		March 31, 2024
									Interest						Rate												Interest						Rate
			Average						Income/						Earned/						Average						Income/						Earned/
			Balance						Expense						Paid						Balance						Expense						Paid
Interest-Bearing Deposits at Banks			$	159,336					$	2,185					5.52		%				$	178,452					$	2,447					5.52		%
Investment Securities:
Fully Taxable			530,869						3,009						2.28						550,538						3,186						2.33
Exempt from Federal Taxes			113,323						637						2.26						120,567						668						2.23
Loans			3,280,285						42,141						5.17						3,235,841						40,376						5.02
Total Earning Assets			4,083,813						47,972						4.72						4,085,398						46,677						4.60
Allowance for Credit Losses			(31,459)																		(31,416)
Cash and Due From Banks			28,611																		29,804
Other Assets			156,394																		161,698
Total Assets			$	4,237,359																	$	4,245,484
Deposits:
Interest-Bearing Checking Accounts			$	832,087					1,903						0.92						$	830,918					1,641						0.79
Savings Deposits			1,487,062						10,571						2.86						1,481,001						10,230						2.78
Time Deposits of $250,000 or More			172,655						1,869						4.35						177,328						1,973						4.47
Other Time Deposits			504,076						5,074						4.05						496,813						5,083						4.11
Total Interest-Bearing Deposits			2,995,880						19,417						2.61						2,986,060						18,927						2.55
Borrowings			106,502						1,186						4.48						96,984						1,076						4.46
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts			20,000						170						3.42						20,000						171						3.44
Finance Leases			5,035						47						3.75						5,049						48						3.82
Total Interest-Bearing Liabilities			3,127,417						20,820						2.68						3,108,093						20,222						2.62
Noninterest-bearing deposits			683,077																		707,265
Other Liabilities			48,609																		50,680
Total Liabilities			3,859,103																		3,866,038
Stockholders’ Equity			378,256																		379,446
Total Liabilities and Stockholders’ Equity			$	4,237,359																	$	4,245,484
Net Interest Income									$	27,152																	$	26,455
Net Interest Spread															2.04		%																1.98		%
Net Interest Margin															2.67		%																2.60		%

11

Arrow Financial Corporation

Consolidated Financial Information

(Dollars in Thousands - Unaudited)

Quarter Ended:			6/30/2024						12/31/2023						6/30/2023
Loan Portfolio
Commercial Loans			$	163,832					$	156,224					$	147,518
Commercial Real Estate Loans			757,478						745,487						723,948
Subtotal Commercial Loan Portfolio			921,310						901,711						871,466
Consumer Loans			1,138,813						1,111,667						1,087,765
Residential Real Estate Loans			1,255,400						1,199,530						1,110,666
Total Loans			$	3,315,523					$	3,212,908					$	3,069,897
Allowance for Credit Losses
Allowance for Credit Losses, Beginning of Quarter			$	31,561					$	31,112					$	30,784
Loans Charged-off			(1,850)						(1,366)						(1,280)
Less Recoveries of Loans Previously Charged-off			523						994						718
Net Loans Charged-off			(1,327)						(372)						(562)
Provision for Credit Losses			775						525						948
Allowance for Credit Losses, End of Quarter			$	31,009					$	31,265					$	31,170
Nonperforming Assets
Nonaccrual Loans			$	20,118					$	20,645					$	5,997
Loans Past Due 90 or More Days and Accruing			915						452						467
Loans Restructured and in Compliance with Modified Terms			36						54						67
Total Nonperforming Loans			21,069						21,151						6,531
Repossessed Assets			239						312						342
Other Real Estate Owned			34						—						182
Total Nonperforming Assets			$	21,342					$	21,463					$	7,055
Key Asset Quality Ratios
Net Loans Charged-off to Average Loans,    Quarter-to-date Annualized			0.16		%				0.05		%				0.07		%
Provision for Credit Losses to Average Loans,   Quarter-to-date Annualized			0.10		%				0.07		%				0.13		%
Allowance for Credit Losses to Period-End Loans			0.94		%				0.97		%				1.02		%
Allowance for Credit Losses to Period-End Nonperforming Loans			147.18		%				147.82		%				477.26		%
Nonperforming Loans to Period-End Loans			0.64		%				0.66		%				0.21		%
Nonperforming Assets to Period-End Assets			0.50		%				0.51		%				0.17		%
Year-to-Date Period Ended:			6/30/2024						12/31/2023						6/30/2023
Allowance for Credit Losses
Allowance for Credit Losses, Beginning of Year			$	31,265					$	29,952					$	29,952
Loans Charged-off			(3,133)						(5,177)						(2,608)
Less Recoveries of Loans Previously Charged-off			1,485						3,109						1,324
Net Loans Charged-off			(1,648)						(2,068)						(1,284)
Provision for Credit Losses			1,392						3,381						2,502
Allowance for Credit Losses, End of Period			$	31,009					$	31,265					$	31,170
Key Asset Quality Ratios
Net Loans Charged-off to Average Loans, Annualized			0.10		%				0.07		%				0.09		%
Provision for Loan Losses to Average Loans, Annualized			0.09		%				0.11		%				0.17		%

12