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

Arrow Reports 3rd Quarter Net Income of $9.0 Million, or $0.53 per Share

GLENS FALLS, N.Y. (October 31, 2024) – Arrow Financial Corporation (NasdaqGS® – AROW) ("Arrow" or "the Company") announced financial results for the three-month period ended September 30, 2024. Net income for the third quarter of 2024 was $9.0 million and fully diluted earnings per share ("EPS") was $0.53, versus $7.7 million and EPS of $0.46 for the same period in 2023.

This Earnings Release and related commentary should be read in conjunction with the Company's October 31, 2024 Form 8-K and related Third 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 delivered a solid third quarter with strong net interest margin expansion, improved core profitability, increased return on average assets and continued strong credit metrics. Stabilizing funding costs, increasing asset yields, and continued expense discipline have positioned us for increased core operating leverage for the upcoming quarters. Our incredible teamwork was recently recognized by being named to the prestigious Piper Sandler Sm-All Stars: Class of 2024, a list of 30 top-performing small-cap banks and thrifts in the country.

Among our third-quarter accomplishments, we completed two small acquisitions. We expanded our insurance business with the strategic acquisition of the assets of A&B Agency, Inc. and acquired a branch in Whitehall, New York. Our team continues to prepare for the unification of 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, slated for December 31, 2024. Starting in early November, our customers will gain surcharge-free access to the Allpoint ATM Network of more than 55,000 locations. As we continue to strengthen our market position, we also rewarded our shareholders with an increase to the fourth-quarter cash dividend, which we announced in early October.”

Third-Quarter Highlights and Key Metrics

•EPS improved $0.07 to $0.53 versus the same period in 2023 and $0.01 over the previous quarter

•Results included approximately $450 thousand of non-core expenses related to our insurance agency and branch acquisitions as well as unification efforts

•Deposit balances were $3.8 billion, resulting in a Loan-to-Deposit ratio of 87.0%

•Net Interest Margin improved to 2.78% (2.79% FTE1), up from 2.67% (2.69% FTE) in the prior quarter

•Year-to-date loan growth reached $126.3 million2 (5.2% annualized)

•Resumed mortgage loan sales into the secondary market

•Average Loan Yields increased to 5.27% for 3Q24, up from 5.17% in the prior quarter

•Net Charge-Offs for the quarter were 8bps on an annualized basis

•Tangible Book Value increased to $21.95

•Accumulated Other Comprehensive Loss improved $5.7 million, or 18%, from the prior quarter

•Return on Average Assets (ROA) improved to 0.84%, up from 0.82% in the previous quarter

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

2 Excludes both $6.5 million fair value hedge adjustment at September 30, 2024 and $5.8 million fair value hedge adjustment at December 31, 2023

1

Income Statement

•Net Income: Net income for the third quarter of 2024 was $9.0 million, increasing from $8.6 million in the second quarter of 2024 and $7.7 million in the third quarter of 2023.

◦Compared to the prior quarter, net income benefited from an increase of $1.3 million in net interest income, partially offset by an increase in non-interest expense of $0.8 million.

◦Compared to the third quarter of 2023, net income growth was driven by an increase in net interest income of $3.1 million, partially offset by an increase in non-interest expense of $0.6 million.

•Net Interest Income: Net interest income for the third quarter of 2024 was $28.4 million, increasing 4.7% from $27.2 million for the second quarter of 2024 and increasing 12.2% from $25.4 million in the third quarter of 2023.

◦Total interest and dividend income was $49.4 million for the third quarter of 2024, an increase from $48.0 million in the second quarter of 2024 and from $42.1 million for the third quarter of 2023. These increases were primarily driven by loan growth and higher loan yields. Interest expense for the third quarter of 2024 was $21.0 million, an increase from $20.8 million for the second quarter of 2024 and from $16.8 million for the third quarter of 2023. The increase from the prior year was driven primarily by higher deposit rates and changes in deposit composition.

•Net Interest Margin: Net interest margin, on an FTE basis, for the third quarter of 2024 was 2.79% compared to 2.69% for the second quarter of 2024 and 2.55% for the third quarter of 2023. The increase in net interest margin compared to the second quarter in 2024 was primarily the result of continued yield expansion on earning assets combined with the moderating cost of interest-bearing liabilities. As compared to the third 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 costing products, such as money market savings and time deposits.

			Three Months Ended
			(Dollars in Thousands)
			September 30, 2024						June 30, 2024						September 30, 2023
Interest and Dividend Income			$	49,443					$	47,972					$	42,117
Interest Expense			21,005						20,820						16,764
Net Interest Income			28,438						27,152						25,353
Average Earning Assets(A)			4,075,162						4,083,813						3,973,747
Average Interest-Bearing Liabilities			3,085,066						3,127,417						2,920,518
Yield on Earning Assets(A)			4.83		%				4.72		%				4.20		%
Cost of Interest-Bearing Liabilities			2.71						2.68						2.28
Net Interest Spread			2.12						2.04						1.92
Net Interest Margin			2.78						2.67						2.53
Net Interest Margin - FTE			2.79						2.69						2.55
(A) Includes Nonaccrual Loans.

•Provision for Credit Losses: For the third quarter of 2024, the provision for credit losses was $0.9 million compared to $0.8 million in the second quarter of 2024 and $0.4 million in the third quarter of 2023. The key drivers for the provision for credit losses in the third quarter of 2024 were replenishment of the allowance for charge-offs, growth in loan balances and 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 September 30, 2024, was $8.1 million, an increase from $7.9 million in the second quarter of 2024 and consistent with the third quarter of 2023. The increases from the prior periods are primarily the result of the resumption of loan sales from current loan originations, higher wealth management fees resulting from improved market valuations of assets under management and increased insurance commissions resulting from the A&B asset acquisition. The third quarter of 2023 included one-time proceeds from bank-owned life insurance in other income.

•Non-Interest Expense: Non-interest expense for the third quarter of 2024 was $24.1 million, an increase from $23.3 million in the second quarter of 2024 and an increase from $23.5 million for the third quarter of 2023. The increase from the prior quarter was primarily attributable to several one-time non-core expenses related to the Whitehall and A&B asset acquisitions.

•Provision for Income Taxes: The provision for income taxes and effective tax rate were $2.6 million and 22.2%, for the third quarter of 2024, $2.3 million and 21.2%, for the second quarter of 2024 and $1.8 million and 19.1%, for the third quarter of 2023. The increase in the effective tax rate from the second quarter of 2024 was primarily attributable to a decrease in the amount of tax advantaged earning assets as a percentage of total earning assets, while the increase in the effective tax rate from the third quarter of 2023 was primarily due to a change in pre-tax income combined with a decrease in the amount of tax advantaged earning assets as a percentage of total earning assets.

Balance Sheet

•Total Assets: Total assets were $4.4 billion at September 30, 2024, an increase of $167.0 million, or 3.9%, as compared to June 30, 2024 and an increase of $138.5 million, or 3.2%, as compared to September 30, 2023. For the third quarter of 2024, overall growth in the balance sheet was attributable to changes in cash balances, primarily seasonal municipal and corporate deposits, as well as growth in the loan portfolio.

•Investments: Total investments were $549.8 million as of September 30, 2024, a decrease of $6.6 million, or 1.2%, compared to June 30, 2024 and a decrease of $117.0 million, or 17.6%, compared to September 30, 2023. The decrease from June 30, 2024 was driven primarily by paydowns and maturities. The decrease from September 30, 2023 was also driven by paydowns and maturities as well as the fourth quarter 2023 repositioning of the investment portfolio, which reduced 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 were $3.3 billion as of September 30, 2024. Loan growth for the third quarter of 2024 was $24.2 million, and $201.2 million since September 30, 2023. Loan growth was spread across all loan products. Please see the loan detail included in the Consolidated Financial Information table on page 13.

•Allowance for Credit Losses: The allowance for credit losses was $31.3 million as of September 30, 2024, which represented 0.94% of loans outstanding, as compared to $31.0 million, or 0.94%, at June 30, 2024, and $31.1 million, or 0.99%, at September 30, 2023. Net charge-offs, expressed as an annualized percentage of average loans outstanding, were 0.08% for the three-month period ended September 30, 2024, as compared to 0.16%4 for the three-month period ended June 30, 2024 and 0.05% for the three-month period ended September 30, 2023. Non

3 Includes both $6.5 million fair value hedge adjustment at September 30, 2024 and $0.4 million fair value hedge adjustment at June 30, 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

performing assets were $22.3 million as of September 30, 2024, representing 0.51% of period-end assets, compared to 0.50% at June 30, 2024 and 0.16% at September 30, 2023.

•Deposits: At September 30, 2024, deposit balances were $3.8 billion, an increase of $153.8 million from June 30, 2024 and an increase of $171.0 million from September 30, 2023. The increase from the second quarter was primarily attributable to the seasonality of municipal deposits. The increase from September 30, 2023 was partially attributable to $175 million of brokered CDs, primarily used to reduce borrowings and fund continued loan growth. Please refer to page 7 for further details related to deposits.

•Capital: Total stockholders’ equity was $393.3 million at September 30, 2024, an increase of $10.3 million, or 2.7%, from June 30, 2024 and an increase of $33.3 million, or 9.2%, from the September 30, 2023 level of $360.0 million. The increase from the second quarter was primarily attributable to net income of $9.0 million, other comprehensive income of $5.7 million offset by dividends of $4.5 million. The increase in stockholders' equity from September 30, 2023 was primarily attributable to income for the period of $32.9 million, other comprehensive income of $26.6 million and various capital items of $1.1 million offset by dividends of $18.1 million and stock repurchases of $9.2 million. Arrow's regulatory capital ratios remained strong. As of September 30, 2024, Arrow's Common Equity Tier 1 Capital Ratio was 12.77% and Total Risk-Based Capital Ratio was 14.46%. 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

•Piper Sandler Sm-All Stars: Arrow was recently named to the prestigious Piper Sandler Sm-All Stars: Class of 2024, a list of 30 top-performing small-cap banks and thrifts in the country. Arrow is one of just three New York financial institutions on the list and the only bank in Upstate New York. Piper Sandler, an independent investment bank and research firm, evaluated more than 300 institutions that trade on a major exchange, narrowing the field to the top 30.

•Bauer Financial Ratings: Both Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company continued to maintain their 5-Star Exceptional Performance ratings from Bauer Financial, for the 69th and 61st quarters, respectively.

•Subsidiary Bank Unification: 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.

4

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."

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 Annual Report on Form 10-K for the year ended December 31, 2023 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 September 30												Nine Months Ended September 30
						2024												2023						2024						2023
INTEREST AND DIVIDEND INCOME
Interest and Fees on Loans						$	44,122											$	36,699					$	126,639					$	103,203
Interest on Deposits at Banks						2,103												1,805						6,735						3,958
Interest and Dividends on Investment Securities:
Fully Taxable						2,656												2,924						8,851						8,823
Exempt from Federal Taxes						562												689						1,867						2,256
Total Interest and Dividend Income						49,443												42,117						144,092						118,240
INTEREST EXPENSE
Interest-Bearing Checking Accounts						1,966												1,156						5,510						2,346
Savings Deposits						10,905												9,729						31,706						23,830
Time Deposits over $250,000						1,803												1,466						5,645						3,159
Other Time Deposits						4,934												2,051						15,091						3,721
Borrowings						1,177												2,143						3,439						5,309
Junior Subordinated Obligations Issued to   Unconsolidated Subsidiary Trusts						173												173						514						513
Interest on Financing Leases						47												46						142						143
Total Interest Expense						21,005												16,764						62,047						39,021
NET INTEREST INCOME						28,438												25,353						82,045						79,219
Provision for Credit Losses						934												354						2,326						2,856
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES						27,504												24,999						79,719						76,363
NON-INTEREST INCOME
Income From Fiduciary Activities						2,429												2,378						7,337						7,081
Fees for Other Services to Customers						2,881												2,761						8,130						8,073
Insurance Commissions						1,955												1,695						5,299						4,775
Net Gain (Loss) on Securities						94												71						165						(214)
Net Gain on Sales of Loans						126												21						135						25
Other Operating Income						648												1,124						2,781						1,893
Total Non-Interest Income						8,133												8,050						23,847						21,633
NON-INTEREST EXPENSE
Salaries and Employee Benefits						13,446												11,988						39,375						35,974
Occupancy Expenses, Net						1,754												1,517						5,299						4,728
Technology and Equipment Expense						4,692												4,371						14,246						13,150
FDIC Assessments						698												515						2,111						1,478
Other Operating Expense						3,510												5,088						10,399						14,528
Total Non-Interest Expense						24,100												23,479						71,430						69,858
INCOME BEFORE PROVISION FOR INCOME TAXES						11,537												9,570						32,136						28,138
Provision for Income Taxes						2,562												1,827						6,897						5,786
NET INCOME						$	8,975											$	7,743					$	25,239					$	22,352
Average Shares Outstanding:
Basic						16,710												17,050						16,746						17,049
Diluted						16,742												17,050						16,772						17,049
Per Common Share:
Basic Earnings						$	0.54											$	0.46					$	1.51					$	1.31
Diluted Earnings						0.53												0.46						1.50						1.31

6

ARROW FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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

			September 30, 2024						December 31, 2023						September 30, 2023
ASSETS
Cash and Due From Banks			$	53,969					$	36,755					$	39,778
Interest-Bearing Deposits at Banks			286,119						105,781						254,961
Investment Securities:
Available-for-Sale at Fair Value			437,067						497,769						519,240
Held-to-Maturity (Fair Value of $101,929 at September 30, 2024; $128,837 at December 31, 2023; and $134,811 at September 30, 2023)			103,337						131,395						140,577
Equity Securities			5,089						1,925						1,960
Other Investments			4,352						5,049						5,110
Loans			3,339,937						3,212,908						3,138,617
Allowance for Credit Losses			(31,262)						(31,265)						(31,112)
Net Loans			3,308,675						3,181,643						3,107,505
Premises and Equipment, Net			59,932						59,642						60,311
Goodwill			23,789						21,873						21,873
Other Intangible Assets, Net			2,190						1,110						1,205
Other Assets			126,930						126,926						120,391
Total Assets			$	4,411,449					$	4,169,868					$	4,272,911
LIABILITIES
Noninterest-Bearing Deposits			740,170						758,425						798,392
Interest-Bearing Checking Accounts			875,365						799,785						920,250
Savings Deposits			1,544,868						1,466,280						1,496,193
Time Deposits over $250,000			177,990						179,301						167,614
Other Time Deposits			499,064						483,775						284,036
Total Deposits			3,837,457						3,687,566						3,666,485
Borrowings			103,600						26,500						174,300
Junior Subordinated Obligations Issued to Unconsolidated   Subsidiary Trusts			20,000						20,000						20,000
Finance Leases			5,022						5,066						5,080
Other Liabilities			52,059						50,964						47,032
Total Liabilities			4,018,138						3,790,096						3,912,897
STOCKHOLDERS’ EQUITY
Preferred Stock, $1 Par Value and 1,000,000 Shares Authorized at September 30, 2024, December 31, 2023 and September 30, 2023			—						—						—
Common Stock, $1 Par Value; 30,000,000 Shares Authorized (22,066,559 Shares Issued at September 30, 2024, December 31, 2023 and September 30, 2023)			22,067						22,067						22,067
Additional Paid-in Capital			413,065						412,551						412,397
Retained Earnings			77,429						65,792						62,647
Accumulated Other Comprehensive Loss			(25,968)						(33,416)						(52,584)
Treasury Stock, at Cost (5,332,907 Shares at September 30, 2024; 5,124,073 Shares at December 31, 2023 and 5,017,063 Shares at September 30, 2023)			(93,282)						(87,222)						(84,513)
Total Stockholders’ Equity			393,311						379,772						360,014
Total Liabilities and Stockholders’ Equity			$	4,411,449					$	4,169,868					$	4,272,911

7

Arrow Financial Corporation

Selected Quarterly Information

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

Quarter Ended			9/30/2024						6/30/2024						3/31/2024						12/31/2023						9/30/2023
Net Income			$	8,975					$	8,604					$	7,660					$	7,723					$	7,743
Net Changes in Fair Value of Equity Investments (Net of Tax)			69						39						13						90						52
Share and Per Share Data:
Period End Shares Outstanding			16,734						16,723						16,710						16,942						17,049
Basic Average Shares Outstanding			16,710						16,685						16,865						17,002						17,050
Diluted Average Shares Outstanding			16,742						16,709						16,867						17,004						17,050
Basic Earnings Per Share			$	0.54					$	0.52					$	0.45					$	0.46					$	0.46
Diluted Earnings Per Share			0.53						0.52						0.45						0.46						0.46
Cash Dividend Per Share			0.270						0.270						0.270						0.270						0.262
Selected Quarterly Average Balances:
Interest-Bearing Deposits at Banks			$	154,937					$	159,336					$	178,452					$	136,026					$	131,814
Investment Securities			590,352						644,192						671,105						713,144						745,693
Loans			3,329,873						3,280,285						3,235,841						3,170,262						3,096,240
Deposits			3,672,128						3,678,957						3,693,325						3,593,949						3,491,028
Other Borrowed Funds			134,249						131,537						122,033						149,507						208,527
Stockholders' Equity			387,904						378,256						379,446						363,753						362,701
Total Assets			4,245,597						4,237,359						4,245,484						4,159,313						4,109,995
Return on Average Assets, annualized			0.84		%				0.82		%				0.73		%				0.74		%				0.75		%
Return on Average Equity, annualized			9.20		%				9.15		%				8.12		%				8.42		%				8.47		%
Return on Average Tangible Equity, annualized 1			9.79		%				9.74		%				8.64		%				8.99		%				9.05		%
Average Earning Assets			$	4,075,162					$	4,083,813					$	4,085,398					$	4,019,432					$	3,973,747
Average Paying Liabilities			3,085,066						3,127,417						3,108,093						2,985,717						2,920,518
Interest Income			49,443						47,972						46,677						44,324						42,117
Tax-Equivalent Adjustment 2			149						163						176						184						183
Interest Income, Tax-Equivalent 2			49,592						48,135						46,853						44,508						42,117
Interest Expense			21,005						20,820						20,222						18,711						16,764
Net Interest Income			28,438						27,152						26,455						25,613						25,353
Net Interest Income, Tax-Equivalent 2			28,587						27,315						26,631						25,797						25,536
Net Interest Margin, annualized			2.78		%				2.67		%				2.60		%				2.53		%				2.53		%
Net Interest Margin, Tax-Equivalent, annualized 2			2.79		%				2.69		%				2.62		%				2.55		%				2.55		%
Efficiency Ratio Calculation: 3
Non-Interest Expense			$	24,100					$	23,318					$	24,012					$	23,190					$	23,479
Less: Intangible Asset Amortization			78						40						41						43						43
Net Non-Interest Expense			$	24,022					$	23,278					$	23,971					$	23,147					$	23,436
Net Interest Income, Tax-Equivalent			$	28,587					$	27,315					$	26,631					$	25,797					$	25,536
Non-Interest Income			8,133						7,856						7,858						7,484						8,050
Less: Net Gain on Securities			94						54						17						122						71
Net Gross Income			$	36,626					$	35,117					$	34,472					$	33,159					$	33,515
Efficiency Ratio			65.59		%				66.29		%				69.54		%				69.81		%				69.93		%
Period-End Capital Information:
Total Stockholders' Equity (i.e. Book Value)			$	393,311					$	383,018					$	377,986					$	379,772					$	360,014
Book Value per Share			23.50						22.90						22.62						22.42						21.12
Goodwill and Other Intangible Assets, net			25,979						22,800						22,891						22,983						23,078
Tangible Book Value per Share 1			21.95						21.54						21.25						21.06						19.76
Capital Ratios:4
Tier 1 Leverage Ratio			9.78		%				9.74		%				9.63		%				9.84		%				9.94		%
Common Equity Tier 1 Capital Ratio			12.77		%				12.88		%				12.84		%				13.00		%				13.17		%
Tier 1 Risk-Based Capital Ratio			13.41		%				13.53		%				13.50		%				13.66		%				13.84		%
Total Risk-Based Capital Ratio			14.46		%				14.57		%				14.57		%				14.74		%				14.94		%
Assets Under Trust Admin. & Investment Mgmt.			$	1,944,239					$	1,848,349					$	1,829,266					$	1,763,194					$	1,627,522

8

Arrow Financial Corporation

Selected Quarterly Information - Continued

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

Footnotes:
1.			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.
						9/30/2024						6/30/2024						3/31/2024						12/31/2023						9/30/2023
			Total Stockholders' Equity (GAAP)			$	393,311					$	383,018					$	377,986					$	379,772					$	360,014
			Less: Goodwill and Other Intangible assets, net			25,979						22,800						22,891						22,983						23,078
			Tangible Equity (Non-GAAP)			$	367,332					$	360,218					$	355,095					$	356,789					$	336,936
			Period End Shares Outstanding			16,734						16,723						16,710						16,942						17,049
			Tangible Book Value per Share (Non-GAAP)			$	21.95					$	21.54					$	21.25					$	21.06					$	19.76
			Net Income			8,975						8,604						7,660						7,723						7,743
			Return on Tangible Equity (Net Income/Tangible Equity - Annualized)			9.79		%				9.74		%				8.64		%				8.99		%				9.05		%
2.			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.
						9/30/2024						6/30/2024						3/31/2024						12/31/2023						9/30/2023
			Interest Income (GAAP)			$	49,443					$	47,972					$	46,677					$	44,324					$	42,117
			Add: Tax-Equivalent adjustment      (Non-GAAP)			149						163						176						184						183
			Interest Income - Tax Equivalent      (Non-GAAP)			$	49,592					$	48,135					$	46,853					$	44,508					$	42,300
			Net Interest Income (GAAP)			$	28,438					$	27,152					$	26,455					$	25,613					$	25,353
			Add: Tax-Equivalent adjustment      (Non-GAAP)			149						163						176						184						183
			Net Interest Income - Tax Equivalent      (Non-GAAP)			$	28,587					$	27,315					$	26,631					$	25,797					$	25,536
			Average Earning Assets			$	4,075,162					$	4,083,813					$	4,085,398					$	4,019,432					$	3,973,747
			Net Interest Margin (Non-GAAP)*			2.79		%				2.69		%				2.62		%				2.55		%				2.55		%
3.			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).
4.			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 September 30, 2024 CET1 ratio listed in the tables (i.e., 12.77%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%).
						9/30/2024						6/30/2024						3/31/2024						12/31/2023						9/30/2023
			Total Risk Weighted Assets			$	3,110,178					$	3,072,922					$	3,049,525					$	3,032,188					$	2,988,438
			Common Equity Tier 1 Capital			397,122						395,691						391,706						394,166						393,541
			Common Equity Tier 1 Ratio			12.77		%				12.88		%				12.84		%				13.00		%				13.17		%
* Quarterly ratios have been annualized.

9

Arrow Financial Corporation

Average Consolidated Balance Sheets and Net Interest Income Analysis

(Dollars in Thousands - Unaudited)

Quarter Ended:			September 30, 2024																		September 30, 2023
									Interest						Rate												Interest						Rate
			Average						Income/						Earned/						Average						Income/						Earned/
			Balance						Expense						Paid						Balance						Expense						Paid
Interest-Bearing Deposits at Banks			$	154,937					$	2,103					5.40		%				$	131,814					$	1,805					5.43		%
Investment Securities:
Fully Taxable			497,450						2,656						2.12						616,020						2,924						1.88
Exempt from Federal Taxes			92,902						562						2.41						129,673						689						2.11
Loans (1)			3,329,873						44,122						5.27						3,096,240						36,699						4.70
Total Earning Assets (1)			4,075,162						49,443						4.83						3,973,747						42,117						4.20
Allowance for Credit Losses			(31,147)																		(31,386)
Cash and Due From Banks			33,159																		32,874
Other Assets			168,423																		134,760
Total Assets			$	4,245,597																	$	4,109,995
Deposits:
Interest-Bearing Checking Accounts			$	785,134					1,966						1.00						$	795,627					1,156						0.58
Savings Deposits			1,492,888						10,905						2.91						1,505,916						9,729						2.56
Time Deposits of $250,000 or More			174,028						1,803						4.12						152,738						1,466						3.81
Other Time Deposits			498,767						4,934						3.94						257,710						2,051						3.16
Total Interest-Bearing Deposits			2,950,817						19,608						2.64						2,711,991						14,402						2.11
Borrowings			109,230						1,177						4.29						183,452						2,143						4.63
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts			20,000						173						3.44						20,000						173						3.43
Finance Leases			5,019						47						3.73						5,075						46						3.60
Total Interest-Bearing Liabilities			3,085,066						21,005						2.71						2,920,518						16,764						2.28
Noninterest-Bearing Deposits			721,311																		779,037
Other Liabilities			51,316																		47,739
Total Liabilities			3,857,693																		3,747,294
Stockholders’ Equity			387,904																		362,701
Total Liabilities and Stockholders’ Equity			$	4,245,597																	$	4,109,995
Net Interest Income									$	28,438																	$	25,353
Net Interest Spread															2.12		%																1.92		%
Net Interest Margin															2.78		%																2.53		%

(1) Includes Nonaccrual Loans.

10

Arrow Financial Corporation

Average Consolidated Balance Sheets and Net Interest Income Analysis

(Dollars in Thousands - Unaudited)

Quarter Ended:			September 30, 2024																		June 30, 2024
									Interest						Rate												Interest						Rate
			Average						Income/						Earned/						Average						Income/						Earned/
			Balance						Expense						Paid						Balance						Expense						Paid
Interest-Bearing Deposits at Banks			$	154,937					$	2,103					5.40		%				$	159,336					$	2,185					5.52		%
Investment Securities:
Fully Taxable			497,450						2,656						2.12						530,869						3,009						2.28
Exempt from Federal Taxes			92,902						562						2.41						113,323						637						2.26
Loans (1)			3,329,873						44,122						5.27						3,280,285						42,141						5.17
Total Earning Assets (1)			4,075,162						49,443						4.83						4,083,813						47,972						4.72
Allowance for Credit Losses			(31,147)																		(31,459)
Cash and Due From Banks			33,159																		28,611
Other Assets			168,423																		156,394
Total Assets			$	4,245,597																	$	4,237,359
Deposits:
Interest-Bearing Checking Accounts			$	785,134					1,966						1.00						$	832,087					1,903						0.92
Savings Deposits			1,492,888						10,905						2.91						1,487,062						10,571						2.86
Time Deposits of $250,000 or More			174,028						1,803						4.12						172,655						1,869						4.35
Other Time Deposits			498,767						4,934						3.94						504,076						5,074						4.05
Total Interest-Bearing Deposits			2,950,817						19,608						2.64						2,995,880						19,417						2.61
Borrowings			109,230						1,177						4.29						106,502						1,186						4.48
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts			20,000						173						3.44						20,000						170						3.42
Finance Leases			5,019						47						3.73						5,035						47						3.75
Total Interest-Bearing Liabilities			3,085,066						21,005						2.71						3,127,417						20,820						2.68
Noninterest-Bearing Deposits			721,311																		683,077
Other Liabilities			51,316																		48,609
Total Liabilities			3,857,693																		3,859,103
Stockholders’ Equity			387,904																		378,256
Total Liabilities and Stockholders’ Equity			$	4,245,597																	$	4,237,359
Net Interest Income									$	28,438																	$	27,152
Net Interest Spread															2.12		%																2.04		%
Net Interest Margin															2.78		%																2.67		%

(1) Includes Nonaccrual Loans.

11

Average Consolidated Balance Sheets and Net Interest Income Analysis
(GAAP Basis)
(Dollars In Thousands)
Nine Months Ended September 30:			2024																		2023
									Interest						Rate												Interest						Rate
			Average						Income/						Earned/						Average						Income/						Earned/
			Balance						Expense						Paid						Balance						Expense						Paid
Interest-Bearing Deposits at Banks			$	164,208					$	6,735					5.48		%				$	101,104					$	3,958					5.23		%
Investment Securities:
Fully Taxable			526,181						8,851						2.25						635,126						8,823						1.86
Exempt from Federal Taxes			108,872						1,867						2.29						146,736						2,256						2.06
Loans (1)			3,282,175						126,639						5.15						3,041,909						103,203						4.54
Total Earning Assets (1)			4,081,436						144,092						4.72						3,924,875						118,240						4.03
Allowance for Credit Losses			(31,340)																		(30,591)
Cash and Due From Banks			30,534																		30,720
Other Assets			162,194																		134,310
Total Assets			$	4,242,824																	$	4,059,314
Deposits:
Interest-Bearing Checking Accounts			$	815,933					5,510						0.90						$	874,132					2,346						0.36
Savings Deposits			1,487,005						31,706						2.85						1,494,976						23,830						2.13
Time Deposits of $250,000 or More			174,668						5,645						4.32						127,230						3,159						3.32
Other Time Deposits			499,881						15,091						4.03						203,047						3,721						2.45
Total Interest-Bearing Deposits			2,977,487						57,952						2.60						2,699,385						33,056						1.64
Borrowings			104,257						3,439						4.41						151,887						5,309						4.67
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts			20,000						514						3.43						20,000						513						3.43
Finance Leases			5,034						142						3.77						5,088						143						3.76
Total Interest-Bearing Liabilities			3,106,778						62,047						2.67						2,876,360						39,021						1.81
Noninterest-Bearing Deposits			703,948																		777,994
Other Liabilities			50,207																		42,506
Total Liabilities			3,860,933																		3,696,860
Stockholders’ Equity			381,891																		362,454
Total Liabilities and Stockholders’ Equity			$	4,242,824																	$	4,059,314
Net Interest Income									$	82,045																	$	79,219
Net Interest Spread															2.05		%																2.22		%
Net Interest Margin															2.69		%																2.70		%

(1) Includes Nonaccrual Loans.

12

Arrow Financial Corporation

Consolidated Financial Information

(Dollars in Thousands - Unaudited)

Quarter Ended:			9/30/2024						12/31/2023						9/30/2023
Loan Portfolio
Commercial Loans			$	169,884					$	156,224					$	148,066
Commercial Real Estate Loans			756,420						745,487						734,604
Subtotal Commercial Loan Portfolio			926,304						901,711						882,670
Consumer Loans			1,120,241						1,111,667						1,107,638
Residential Real Estate Loans			1,293,392						1,199,530						1,148,309
Total Loans			$	3,339,937					$	3,212,908					$	3,138,617
Allowance for Credit Losses
Allowance for Credit Losses, Beginning of Quarter			$	31,009					$	31,112					$	31,170
Loans Charged-off			(1,429)						(1,366)						(1,204)
Less Recoveries of Loans Previously Charged-off			748						994						792
Net Loans Charged-off			(681)						(372)						(412)
Provision for Credit Losses			934						525						354
Allowance for Credit Losses, End of Quarter			$	31,262					$	31,265					$	31,112
Nonperforming Assets
Nonaccrual Loans			$	21,047					$	20,645					$	6,023
Loans Past Due 90 or More Days and Accruing			816						452						251
Loans Restructured and in Compliance with Modified Terms			30						54						60
Total Nonperforming Loans			21,893						21,151						6,334
Repossessed Assets			322						312						344
Other Real Estate Owned			76						—						182
Total Nonperforming Assets			$	22,291					$	21,463					$	6,860
Key Asset Quality Ratios
Net Loans Charged-off to Average Loans,    Quarter-to-date Annualized			0.08		%				0.05		%				0.05		%
Provision for Credit Losses to Average Loans,   Quarter-to-date Annualized			0.11		%				0.07		%				0.05		%
Allowance for Credit Losses to Period-End Loans			0.94		%				0.97		%				0.99		%
Allowance for Credit Losses to Period-End Nonperforming Loans			142.79		%				147.82		%				491.19		%
Nonperforming Loans to Period-End Loans			0.66		%				0.66		%				0.20		%
Nonperforming Assets to Period-End Assets			0.51		%				0.51		%				0.16		%
Year-to-Date Period Ended:			9/30/2024						12/31/2023						9/30/2023
Allowance for Credit Losses
Allowance for Credit Losses, Beginning of Year			$	31,265					$	29,952					$	29,952
Loans Charged-off			(4,562)						(5,177)						(3,812)
Less Recoveries of Loans Previously Charged-off			2,233						3,109						2,116
Net Loans Charged-off			(2,329)						(2,068)						(1,696)
Provision for Credit Losses			2,326						3,381						2,856
Allowance for Credit Losses, End of Period			$	31,262					$	31,265					$	31,112
Key Asset Quality Ratios
Net Loans Charged-off to Average Loans, Annualized			0.09		%				0.07		%				0.07		%
Provision for Loan Losses to Average Loans, Annualized			0.09		%				0.11		%				0.13		%

13