Financial Analysis

COMMITMENTS AND CONTINGENCIES (Dollars In Thousands) The following table presents the notional amount and fair value of Arrow's off-balance sheet commitments to extend credit and commitments under standby letters of credit as of December 31, 2025 and 2024: Balance at December 31, 2025 2024 Notional Amount: Commitments to Extend Credit $ 462,855 $ 449,491 Standby Letters of Credit 3,562 4,306 Fair Value: Commitments to Extend Credit $ $ Standby Letters of Credit (2) (7) Arrow is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Commitments to extend credit include home equity lines of credit, commitments for residential and commercial construction loans and other personal and commercial lines of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of the involvement Arrow has in particular classes of financial instruments. Arrow's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. Arrow uses the same credit policies in making com …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"DEBT (Dollars in Thousands) Schedule of Borrowings: 2025 2024 Balances at December 31: FHLBNY Overnight Advances FHLBNY Term Advances 4,265 8,600 Total Borrowings $ 4,265 $ 8,600 Maximum Borrowing Capacity at December 31: Federal Funds Purchased $ 23,000 $ 23,000 Federal Home Loan Bank of New York 756,968 654,890 Federal Reserve Bank of New York 707,839 571,107 Available Borrowing Capacity at December 31: Federal Funds Purchased $ 23,000 $ 23,000 Federal Home Loan Bank of New York 722,703 616,290 Federal Reserve Bank of New York 707,839 571,107 Arrow Bank has in place unsecured federal funds lines of credit with two correspondent banks. As a member of the FHLBNY, Arrow participates in the advance program which allows for overnight and term advances up to the limit of pledged collateral, including FHLBNY stock and any loans secured by real estate such as commercial real estate, residential real estate and home equity loans. Arrow Bank has also established borrowing facilities with the Federal Reserve Bank of New York for potential discount window advances, pledging certain consumer loans as collateral. The maximum borrowing capacities at the FHLBNY and FRB are determined based on the fair value of the collateral pledged, subject to discounts determined by the respective lenders. As of December 31, 2025 and 2024, the carrying cost for the FHLBNY collateral was approximately $1,064 million and $969 million, respectively. As of December 31, 2025 and 2024, the carrying cost for t …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

STOCK-BASED COMPENSATION (Dollars In Thousands, Except Share and Per Share Amounts) Arrow has established three stock-based compensation plans: a Long Term Incentive Plan, an Employee Stock Purchase Plan (ESPP) and an Employee Stock Ownership Plan (ESOP). When applicable, share and per share data have been adjusted for the September 26, 2023 3% stock dividend. Long Term Incentive Plan The Long Term Incentive Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock, restricted stock units, performance units and performance shares. The Compensation Committee of the Board of Directors administers the Long Term Incentive Plan. Shares Available for Grant at December 31, 2025 349,081 Restricted Stock Awards - From time to time, the Company grants restricted stock awards which will generally vest over a four-year period. Unvested restricted stock will generally be forfeited if the recipient ceases to be employed by the Company, with limited exceptions. Grantees of restricted stock awards are entitled to receive all dividends and distributions declared and paid on restricted stock, or cash payments equivalent to such dividends or distributions, including those declared and paid during the vesting period. The following table summarizes information about restricted stock awards for the year ended December 31, 2025: Restricted Stock Awards Weighted Average Grant Date Fair Value Outstanding at January 1, 2025 21,818 24.54 Granted 43,250 27.50 …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

"FAIR VALUES (Dollars In Thousands) FASB ASC Subtopic 820-10 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP) and requires certain disclosures about fair value measurements. There are no nonfinancial assets or liabilities measured at fair value on a recurring basis. The only assets or liabilities that Arrow measured at fair value on a recurring basis at December 31, 2025 and 2024 were securities available-for-sale, equity securities and derivatives. Arrow held no securities or liabilities for trading on such dates. For information on fair value measurements, including descriptions of level 1, 2 and 3 of the fair value hierarchy and the valuation methods employed by Arrow, see Note 2. Summary of Significant Accounting Policies to the Consolidated Financial Statements. The table below presents the financial instrument's fair value and the amounts within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement: Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis Fair Value Measurements at Reporting Date Using: Fair Value of Assets and Liabilities Measured on a Recurring Basis: Fair Value Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2025 Assets: Securities Available-for Sale: U.S. Treasuries $ 80,563 $ 80,563 …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

GOODWILL AND OTHER INTANGIBLE ASSETS (Dollars In Thousands) The following table presents information on Arrows goodwill as of December 31, 2025, 2024 and 2023: Total Goodwill Balance, December 31, 2022 $ 21,873 Goodwill Acquired Balance, December 31, 2023 21,873 Goodwill acquired related to the acquisition of the assets of A&B Agency, Inc and the Whitehall Branch 1,916 Balance, December 31, 2024 23,789 Goodwill Acquired Balance, December 31, 2025 $ 23,789 The following table presents information on Arrows other intangible assets (other than goodwill) as of December 31, 2025, 2024 and 2023: Depositor Intangibles 1 Mortgage Servicing Rights 2 Customer Intangibles 1 Total Gross Carrying Amount, December 31, 2025 $ 3,202 $ 3,549 $ 4,786 $ 11,537 Accumulated Amortization (2,486) (3,148) (4,162) (9,796) Net Carrying Amount, December 31, 2025 $ 716 $ 401 $ 624 $ 1,741 Gross Carrying Amount, December 31, 2024 $ 3,202 $ 3,340 $ 4,786 $ 11,328 Accumulated Amortization (2,319) (2,933) (4,018) (9,270) Net Carrying Amount, December 31, 2024 $ 883 $ 407 $ 768 $ 2,058 Rollforward of Intangible Assets: Balance, December 31, 2022 $ $ 785 $ 715 $ 1,500 Amortization of Intangible Assets (214) (176) (390) Balance, December 31, 2023 571 539 1,110 Intangible Assets Acquired 955 44 404 1,403 Amortization of Intangible Assets (72) (208) (175) (455) Balance, December 31, 2024 883 407 768 2,058 Intangible Assets Acquired 209 209 Amortization of Intangible Assets (167) (215) (144) (526) Balance, De …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

"INCOME TAXES (Dollars In Thousands) The provision for income taxes is summarized below: Current Tax Expense: 2025 2024 2023 Federal $ 8,903 $ 7,187 $ 4,611 State 2,339 1,251 1,035 Total Current Tax Expense 11,242 8,438 5,646 Deferred Tax Expense (Benefit): Federal 384 (631) 1,825 State (191) (158) (26) Total Deferred Tax Expense (Benefit) 193 (789) 1,799 Total Provision for Income Taxes $ 11,435 $ 7,649 $ 7,445 In December 2023, the FASB issued ASU No. 2023-09Income Taxes (Topic 740)Improvements to Income Tax Disclosures, intended to enhance the transparency of income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. ASU 2023-09 became effective for the Company on January 1, 2025 for annual reporting periods on a prospective basis. The provisions for income taxes differed from the amounts computed by applying the Federal Income Tax Rate of 21% to pre-tax income as a result of the following: 2025 Amount Percent Statutory Federal Tax Rate $ 11,632 21.0 % State Taxes, Net of Federal Income Tax Benefit (1) 1,697 3.1 Nontaxable or Nondeductible Items Tax-Exempt Investment Income (655) (1.2) Bank Owned Life Insurance (349) (0.6) Other Items, Net (2) 189 0.3 Tax Credits Low Income Housing Credits (53) (0.1) Purchased Energy Production Credits (1,026) (1.9) Provision for Income Taxes $ 11,435 20.6 % (1) State taxes in New York made up the majority (greater than 50%) of the tax effect in this category. (2) The ""Nontaxable or Nondeductib …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

LEASES (Dollars In Thousands) Arrow is a lessee in its leases, which are mainly for financial services locations in addition to leases for corporate vehicles. These leases generally require the Company to pay third-party expenses on behalf of the Lessor, which are referred to as variable payments. Under some leases, the Company pays the variable payments to the lessor, and in other leases, the Company pays the variable payments directly to the applicable third party. None of the Company's current leases include any residual value guarantees or any subleases, and there are no significant rights or obligations of the Company for leases that have not commenced as of the reporting date. Arrow leases three of its branch offices, at market rates, from Stewarts Shops Corp. Additionally, on June 14th, 2024, Arrow entered into a sale-leaseback agreement with Stewart's Shops Corp. for a bank branch location. The sale price of the property was $1.1 million which resulted in a gain of $377 thousand. The lease agreement began in June 2024 and runs through May 2029, with rent totaling $5 thousand per month for the remainder of the lease. Mr. Gary C. Dake, CEO of Stewarts Shops Corp., served as a Director on the Board of Directors for Arrow and Arrow Bank. Mr. Dake retired from the Company's Board at the Annual Meeting on June 4, 2025. The following includes quantitative data related to the Company's leases as of and for the twelve months ended December 31, 2025 and December 31, 2024: Twelv …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

"Newly Adopted accounting Standards in 2025 In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 requires additional disclosures related to rate reconciliation, income taxes paid, and other disclosures. Under ASU 2023-09, for each annual periods presented, public entities are required to (1) disclose specific categories in the tabular rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires all reporting entities to disclose on an annual basis the amount of income taxes paid disaggregated by federal, state, and foreign taxes as well as the amount of income taxes paid by individual jurisdiction. ASU 2023-09 is effective for public companies for annual periods beginning after December 15, 2024, and can be applied on a prospective basis with an option to apply the standard retrospectively. Arrow adopted ASU 2023-09 in its 2025 fiscal year Form 10-K. Adoption impacted disclosures only and had no impact on the consolidated financial statements. See Note 15. Income Taxes to the Consolidated Financial Statements for required disclosures. In November 2025, the FASB issued ASU 2025-08, which amends the guidance in ASC 326 on the accounting for certain purchased loans. Under the ASU, entities must account for acquired loans (excluding credit cards) that meet certain criteria at acq …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

RETIREMENT BENEFIT PLANS (Dollars in Thousands) Arrow sponsors qualified and nonqualified defined benefit pension plans and other postretirement benefit plans for its employees. Arrow maintains a non-contributory pension plan, which covers substantially all employees. Arrow also maintains a supplemental non-qualified unfunded retirement plan to provide eligible employees of Arrow and its subsidiaries with benefits in excess of qualified plan limits imposed by federal tax law. Arrow has multiple non-pension postretirement benefit plans. The health care, dental and life insurance plans are contributory, with participants contributions adjusted annually. Arrows policy is to fund the cost of postretirement benefits based on the current cost of the underlying policies. However, the health care plan provision allows for grandfathered participants to receive automatic increases of Company contributions each year based on the increase in inflation and limited to a maximum of 5%. As of December 31, 2025, Arrow uses the sex-distinct Amount-Weighted Pri-2012 Mortality Tables for employees, healthy retirees and contingent survivors, with mortality improvements projected using Scale MP-2021 on a generational basis for the Pension Plan and the sex-distinct White Collar Amount-Weighted Pri-2012 Mortality Tables for employees, healthy retirees and contingent survivors, with mortality improvements projected using Scale MP-2021 on a generational basis for the Select Executive Retirement Plan. …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

RELATED PARTY TRANSACTIONS (In Thousands) Loans to principal officers, directors and their affiliates during 2025 were as follows: Balance January 1, 2025 $ 4,902 New loans 100 Repayments (656) Other reduction - change in related party status during 2025 (696) Balance December 31, 2025 $ 3,650 Deposits from principal officers, directors and their affiliates at December 31, 2025 and 2024 were approximately $14.0 million and $12.3 million. In addition, during 2025 Arrow leased properties from Director that retired from the Board in June 2025, further discussion of those transactions is included in Note 18. Leases to the Consolidated Financial Statements .

RelatedPartyTransactionsDisclosureTextBlock

"Segment Reporting The Company's revenue is primarily derived from community banking. Arrow's Chief Executive Officer (""CEO"") is considered to be the Company's Chief Operating Decision Maker (""CODM""). The CEO manages its operations and monitors Arrow's financial performance on a consolidated basis The Executive Management Team includes the following officers of the Company: President and CEO, Senior Executive Vice President, Chief Financial Officer, Treasurer & Chief Accounting Officer, Senior Executive Vice President, Chief Risk Officer, Senior Executive Vice President, Chief Banking Officer, Executive Vice President, Chief Information Officer and Executive Vice President, Chief Human Resources Officer. Financial performance is reported to the CODM monthly. Net consolidated income and EPS are the primary measures used by the Executive Management team to evaluate Arrow's performance. Secondary measures include metrics like ROA and Net Interest Margin. All measures are reviewed and either affirmed or changed annually by the CODM and the Board of Directors. The presentation of financial performance to the CODM is consistent with the amounts and financial statement captions shown on the Company's consolidated balance sheets and consolidated statements of income. Significant expenses of the Company are adequately segmented in the consolidated statements of income to include all significant items when considering both quantitative and qualitative factors. These significant …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation - The financial statements of Arrow and its wholly owned subsidiaries are consolidated and all material inter-company transactions have been eliminated. In the Parent Company Only financial statements in Note 21, the investment in wholly owned subsidiaries is carried under the equity method of accounting. When necessary, prior years Consolidated Financial Statements have been reclassified to conform to the current-year financial statement presentation. Arrow determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity (VIE) under GAAP. Voting interest entities are entities in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entitys activities. Arrow consolidates voting interest entities in which it has all, or at least a majority of, the voting interest. As defined in applicable accounting standards, VIE are entities that lack one or more of the characteristics of a voting interest entity. A controlling financial interest in a VIE is present when Arrow has both the power and ability to direct the activities of the VIE that most significantly impact the VIE's economic performance and an obligat …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

"SUBSEQUENT EVENTS On February 26 , 2026, Arrow and Adirondack Bancorp, Inc., the parent company of Adirondack Bank, jointly announced that both companies boards of directors have unanimously approved an agreement and plan of merger (the Agreement) pursuant to which Adirondack will merge with and into Arrow Merger Sub, Inc. (""Merger Sub""), a Maryland Corporation and wholly owned subsidiary of Arrow. Upon the terms and subject to the conditions of the Agreement, Adirondack shareholders will receive a combination of stock and cash upon closing of the merger with Arrow. Each outstanding share of Adirondack common stock will be converted into 1.8610 shares of Arrow common stock plus $18.72 in cash. Based on the closing stock price of AROW common stock of $34.43 as of February 25, 2026, the aggregate implied transaction value was approximately $89.1 million. Management expects the closing of the transaction late in the second quarter or early in the third quarter of 2026 following receipt of approvals from regulatory authorities, the approval of Adirondack shareholders, and the satisfaction of other customary closing conditions."

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COMMITMENTS AND CONTINGENCIES (In Thousands) The following table presents the notional amount and fair value of Arrow's off-balance sheet commitments to extend credit and commitments under standby letters of credit as of September 30, 2025 and December 31, 2024: Commitments to Extend Credit and Letters of Credit September 30, 2025 December 31, 2024 Notional Amount: Commitments to Extend Credit $ 462,063 $ 449,491 Standby Letters of Credit 3,968 4,306 Fair Value: Commitments to Extend Credit $ $ Standby Letters of Credit (9) (7) Arrow is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Commitments to extend credit include home equity lines of credit, commitments for residential and commercial construction loans and other personal and commercial lines of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of the involvement Arrow has in particular classes of financial instruments. Arrow's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those in …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"DEBT (Dollars in Thousands) Schedule of Borrowings: September 30, 2025 December 31, 2024 Balance: FHLBNY Overnight Advances FHLBNY Term Advances 4,265 8,600 Total Borrowings $ 4,265 $ 8,600 Maximum Borrowing Capacity: Federal Funds Purchased $ 23,000 $ 23,000 Federal Home Loan Bank of New York 714,007 654,890 Federal Reserve Bank of New York 763,091 571,107 Available Borrowing Capacity: Federal Funds Purchased $ 23,000 $ 23,000 Federal Home Loan Bank of New York 679,741 616,290 Federal Reserve Bank of New York 763,091 571,107 Arrow Bank has in place unsecured federal funds lines of credit with two correspondent banks. As a member of the FHLBNY, Arrow participates in the advance program which allows for overnight and term advances up to the limit of pledged collateral, including FHLBNY stock and any loans secured by real estate such as commercial real estate, residential real estate and home equity loans (see Note 4. Investment Securities, and Note 5. Loans). The maximum borrowing capacities at the FHLBNY and FRB are determined based on the fair value of the collateral pledged, subject to discounts determined by the respective lenders. As of September 30, 2025, the carrying cost for the FHLBNY collateral was approximately $1.0 billion and approximately $1.0 billion for the FRB. As of September 30, 2025, the fair value for the FHLBNY collateral was approximately $890.3 million and approximately $1.0 billion for the FRB. The investment in FHLBNY stock is proportional to the tot …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

STOCK-BASED COMPENSATION (Dollars In Thousands, Except Share and Per Share Amounts) Arrow has established three stock-based compensation plans: a Long Term Incentive Plan (LTIP), an Employee Stock Purchase Plan (ESPP) and an Employee Stock Ownership Plan (ESOP). Long Term Incentive Plan The LTIP provides for the grant of incentive stock options, non-qualified stock options, restricted stock awards, restricted stock units, performance units and performance shares. The Compensation Committee of the Board of Directors administers the LTIP. Restricted Stock Awards - In the nine months ended September 30, 2025, the Company granted restricted stock awards which will generally vest over a three to four-year period. There were no grants during the three months ended September 30, 2025. Unvested restricted stock will generally be forfeited if the recipient ceases to be employed by the Company, with limited exceptions. Grantees of restricted stock awards are entitled to receive all dividends and distributions declared and paid on restricted stock, or cash payments equivalent to such dividends or distributions, including those declared and paid during the vesting period. The following table summarizes information about restricted stock awards for the year to date period ended September 30, 2025: Restricted Stock Awards Weighted Average Grant Date Fair Value Outstanding at January 1, 2025 21,818 $ 24.54 Granted 43,250 27.50 Vested (11,504) 25.68 Forfeited Outstanding at September 30, 202 …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

"FAIR VALUES (Dollars In Thousands) FASB defines fair value, establishes a framework for measuring fair value in GAAP and requires certain disclosures about fair value measurements. There are no nonfinancial assets or liabilities measured at fair value on a recurring basis. The only assets or liabilities that Arrow measured at fair value on a recurring basis at September 30, 2025 and December 31, 2024 were AFS securities, equity securities and derivatives. Arrow held no securities or liabilities for trading on such dates. The table below presents the financial instrument's fair value and the amounts within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement: Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis Fair Value Measurements at Reporting Date Using: Fair Value Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value of Assets and Liabilities Measured on a Recurring Basis: September 30, 2025 Assets: Securities Available-for-Sale: U.S. Treasuries $ 100,346 $ 100,346 $ $ U.S. Government & Agency Obligations 24,728 24,728 $ State and Municipal Obligations 200 200 Mortgage-Backed Securities 346,120 346,120 Corporate and Other Debt Securities 14,189 14,189 Total Securities Available-for-Sale 485,583 100,346 385,237 Equity Securities 5,724 5,724 Total Securities Measured on a Rec …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

LEASES (Dollars In Thousands) Arrow leases real property, primarily for financial services locations, and corporate vehicles. These leases generally require Arrow to pay third-party expenses on behalf of the Lessor, which are referred to as variable payments. Under some leases, Arrow pays the variable payments to the lessor, and in other leases, Arrow pays the variable payments directly to the applicable third party. None of Arrow's current leases include any residual value guarantees or any subleases, and there are no significant rights and obligations of Arrow for leases that have not commenced as of the reporting date. Arrow leases three of its branch offices, at market rates, from Stewarts Shops Corp. Additionally in June 2024, Arrow entered into a sale-leaseback agreement with Stewarts Shops Corp. for a bank branch location. The sale price of the property was $1.1 million which resulted in a gain of $377 thousand. The lease agreement began in June 2024 and runs through May 2029, with rent totaling $5 thousand per month for the remainder of the lease. Mr. Gary C. Dake, President of Stewarts Shops Corp., served as a Director on the Board of Directors of Arrow and Arrow Bank. Mr. Dake retired from the Board at the Annual Meeting on June 4, 2025. The following includes quantitative data related to Arrow's leases as of and for the nine months ended September 30, 2025 and September 30, 2024: Nine Months Ended Finance Lease Amounts: Classification September 30, 2025 September 3 …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

"Recently Issued Accounting Standards In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (""ASU"") No. 2024-03 Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40) to improve disclosures about a public business entitys expenses, by providing more detailed information about the types of expenses in commonly presented expense captions. As amended by ASU 2025-01 issued in January 2025, the amendment is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendment may be applied prospectively or retrospectively. The Company is currently evaluating the impact of this accounting standard on its condensed consolidated financial statements. Other ASUs issued but not effective until after September 30, 2025, are not expected to have a material effect on the Companys consolidated financial position, annual results of operations and/or cash flows. Recently Adopted Accounting Standards In December 2023, FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 requires additional disclosures related to rate reconciliation, income taxes paid, and other disclosures. Under ASU 2023-09, for each annual period presented, public entities are required to (1) disclose specific categories in the tabular rate …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

RETIREMENT BENEFIT PLANS (Dollars in Thousands) Arrow sponsors qualified and non-qualified defined benefit pension plans and other postretirement benefit plans for its employees. Arrow maintains a non-contributory pension plan, which covers substantially all employees. Arrow also maintains a supplemental non-qualified unfunded retirement plan to provide eligible employees of Arrow and its subsidiaries with benefits in excess of qualified plan limits imposed by federal tax law. Arrow has multiple non-pension postretirement benefit plans. The health care, dental and life insurance plans are contributory, with participants contributions adjusted annually. Arrows policy is to fund the cost of postretirement benefits based on the current cost of the underlying policies. However, the health care plan provision allows for grandfathered participants to receive automatic increases of Company contributions each year based on the increase in inflation, limited to a maximum of 5%. The following tables provide the components of net periodic benefit costs for the three and nine-month periods ended September 30, 2025 and 2024: Employees' Select Executive Postretirement Pension Retirement Benefit Plan Plan Plans Net Periodic Benefit Cost (Benefit) For the Three Months Ended September 30, 2025: Service Cost 1 $ 400 $ 23 $ 7 Interest Cost 2 582 76 71 Expected Return on Plan Assets 2 (992) Amortization of Prior Service Cost 2 47 9 26 Amortization of Net (Gain) 2 (128) Net Periodic Cost (Benefit …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

"Segment Reporting The Company's revenue is primarily derived from community banking. Arrow's Chief Executive Officer (""CEO"") is considered to be the Company's Chief Operating Decision Maker (""CODM""). The CEO manages its operations and monitors its financial performance on a consolidated basis. The Executive Management Team includes the following officers of the Company: President and CEO, Senior Executive Vice President, Chief Financial Officer, Treasurer & Chief Accounting Officer, Senior Executive Vice President, Chief Risk Officer, Senior Executive Vice President, Chief Banking Officer, Executive Vice President, Chief Information Officer and Executive Vice President, Chief Human Resources Officer. Financial performance is reported to the CODM monthly. Net consolidated income and EPS are the primary measures used by the Executive Management Team to evaluate Arrow's performance. Secondary measures include metrics like return on average assets and Net Interest Margin. All measures are reviewed and either affirmed or changed annually by the CODM and the Board of Directors. The presentation of financial performance to the CODM is consistent with the amounts and financial statement captions shown on the Company's consolidated balance sheets and consolidated statements of income. Significant expenses of the Company are adequately segmented in the consolidated statements of income to include all significant items when considering both quantitative and qualitative factors. …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"ACCOUNTING POLICIES The accompanying unaudited interim consolidated financial statements contain all of the adjustments necessary to present fairly the financial position as of September 30, 2025 and December 31, 2024; the results of operations for the three and nine month periods ended September 30, 2025 and 2024; the consolidated statements of comprehensive income for the three and nine month periods ended September 30, 2025 and 2024; the changes in stockholders' equity for the three and nine month periods ended September 30, 2025 and 2024; and the cash flows for the nine month periods ended September 30, 2025 and 2024. All such adjustments are of a normal recurring nature. 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, 2024 included in Arrow's Annual Report on Form 10-K for the year ended December 31, 2024 (the ""2024 Form 10-K""). Recently Issued Accounting Standards In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (""ASU"") No. 2024-03 Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40) to improve disclosures about a public business entitys expenses, by providing more detailed information about the types of expenses in commonly presented expense captions. As amended by ASU 2025-01 issued in January 2025, the amendment is effective for …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing