New York
|
|
22-2448962
|
||
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
||
250 GLEN STREET, GLENS FALLS, NEW YORK 12801
|
||||
(Address of principal executive offices) (Zip Code)
|
||||
Registrant’s telephone number, including area code: (518) 745-1000
|
||||
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
|
||||
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
|
||||
Common Stock, Par Value $1.00
|
||||
(Title of Class)
|
Large accelerated filer
|
Accelerated filer
X
|
Non-accelerated filer
|
Smaller reporting company
|
Emerging growth company
|
Class
|
|
Outstanding as of February 28, 2019
|
Common Stock, par value $1.00 per share
|
|
14,465,928
|
|
Page
|
|
Note on Terminology
|
3
|
|
The Company and Its Subsidiaries
|
3
|
|
Forward-Looking Statements
|
3
|
|
Use of Non-GAAP Financial Measures
|
4
|
|
PART I
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
PART II
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
PART III
|
|
|
|
||
|
||
|
||
|
||
|
||
PART IV
|
|
|
|
||
|
||
|
||
|
•
|
rapid and dramatic changes in economic and market conditions;
|
•
|
sharp fluctuations in interest rates, economic activity, or consumer spending patterns;
|
•
|
sudden changes in the market for products we provide, such as real estate loans;
|
•
|
significant changes in banking or other laws and regulations, including both enactment of new legal or regulatory measures (e.g., the Economic Growth, Regulatory Relief and Consumer Protection Act ("Economic Growth Act"), the Tax Cuts and Jobs Act of 2017 ("Tax Act") and the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank")) or the modification or elimination of pre-existing measures;
|
•
|
significant changes in U.S. monetary or fiscal policy, including new or revised monetary programs or targets adopted or announced by the Federal Reserve ("monetary tightening or easing") or significant new federal legislation materially affecting the federal budget ("fiscal tightening or expansion");
|
•
|
competition from other sources (e.g., non-bank entities);
|
•
|
similar uncertainties inherent in banking operations or business generally, including technological developments and changes; and
|
•
|
other risks detailed from time to time within our filings with the Securities and Exchange Commission ("SEC").
|
Subsidiary Banks
(dollars in thousands)
|
|
|
|
||||
|
Glens Falls National
|
|
Saratoga National
|
||||
Total Assets at Year-End
|
$
|
2,444,624
|
|
|
$
|
542,244
|
|
Trust Assets Under Administration and
Investment Management at Year-End
(Not Included in Total Assets)
|
$
|
1,282,364
|
|
|
$
|
103,388
|
|
Date Organized
|
1851
|
|
|
1988
|
|
||
Employees (full-time equivalent)
|
462
|
|
|
54
|
|
||
Offices
|
30
|
|
|
10
|
|
||
Counties of Operation
|
Warren, Washington,
Saratoga, Essex &
Clinton
|
|
Saratoga, Albany,
Rensselaer, & Schenectady
|
||||
Main Office
|
250 Glen Street
Glens Falls, NY
|
|
171 So. Broadway
Saratoga Springs, NY
|
Year, as of January 1
|
2016
|
2017
|
2018
|
2019
|
||||
Minimum CET1 Ratio
|
4.500
|
%
|
4.500
|
%
|
4.500
|
%
|
4.500
|
%
|
Capital Conservation Buffer ("Buffer")
|
0.625
|
%
|
1.250
|
%
|
1.875
|
%
|
2.500
|
%
|
Minimum CET1 Ratio Plus Buffer
|
5.125
|
%
|
5.750
|
%
|
6.375
|
%
|
7.000
|
%
|
Minimum Tier 1 Risk-Based Capital Ratio
|
6.000
|
%
|
6.000
|
%
|
6.000
|
%
|
6.000
|
%
|
Minimum Tier 1 Risk-Based Capital Ratio Plus Buffer
|
6.625
|
%
|
7.250
|
%
|
7.875
|
%
|
8.500
|
%
|
Minimum Total Risk-Based Capital Ratio
|
8.000
|
%
|
8.000
|
%
|
8.000
|
%
|
8.000
|
%
|
Minimum Total Risk-Based Capital Ratio Plus Buffer
|
8.625
|
%
|
9.250
|
%
|
9.875
|
%
|
10.500
|
%
|
Minimum Leverage Ratio
|
4.000
|
%
|
4.000
|
%
|
4.000
|
%
|
4.000
|
%
|
•
|
The federal bank regulatory agencies are directed to establish a "community bank leverage ratio" ("CBLR") of between 8% and 10%, calculated by dividing tangible equity capital by average total consolidated assets of "qualifying community banks" that meet certain requirements to be set by those regulatory agencies. A qualifying community bank is a depository institution or bank holding company with less than $10 billion in total assets that meets other requirements to be established by the regulators. If a qualifying community bank exceeds the community bank leverage ratio, it will be deemed to have met all applicable capital and leverage requirements, including the generally applicable leverage capital requirements and risk-based capital requirements and (if the community bank is a depository institution) the "well capitalized" requirement under the federal "prompt corrective action" capital standards. This new community bank leverage ratio is intended to reduce the burden of compliance with regard to regulatory capital adequacy for qualifying community banks. However, this alternative capital standard will not be effective until the federal bank regulatory authorities adopt rules for its implementation.
|
•
|
The definition of "high volatility commercial real estate" loans that trigger heightened risk-based capital requirements, has been modified and limited to ease the burden of those requirements.
|
•
|
The total asset threshold for qualifying insured financial institutions eligible for an 18-month examination cycle has been increased from $1 billion to $3 billion.
|
•
|
The new law provides that reciprocal deposits of certain institutions shall not be considered "brokered deposits," subject to certain limitations.
|
•
|
Some community banks will be exempt from mortgage escrow requirements, and an expanded "qualified mortgage" exemption for community banks has been implemented to ease the burden of the "ability to repay" requirements in the Truth in Lending Act.
|
•
|
Financial institutions with less than $10 billion in total assets that meet certain requirements will be exempt from the Volcker Rule proprietary trading requirements implemented under the Dodd Frank Act.
|
•
|
Tax Rate. The Tax Act replaced the graduated corporate tax rates applicable under prior law, which imposed a maximum tax rate of 35%, with a reduced 21% tax rate. This reduction will generally result in future increased earnings and capital and reduced our net deferred tax liability. Generally accepted accounting principles ("GAAP") requires that the impact of the provisions of the Tax Act be accounted for in the period of enactment. Accordingly, a benefit of $1.1 million was recorded in the fourth quarter of 2017 which represents the impact of the re-measurement of net deferred tax liabilities.
|
•
|
Employee Compensation. A publicly held corporation is not permitted to deduct compensation in excess of $1 million per year paid to certain employees. The Tax Act eliminates certain exceptions to the $1 million limit applicable under prior law related to performance-based compensation, such as equity grants and cash bonuses that are paid only on the attainment of performance goals. Based on our current compensation plans, we do not expect to be impacted by this limitation.
|
•
|
Interest Expense. The Tax Act limits a taxpayer's annual deduction of business interest expense to the sum of (i) business interest income and (ii) 30% of "adjusted taxable income," defined as business's taxable income without taking into account business interest income or expense, net operating losses, and, for 2018 through 2021, depreciation, amortization and depletion. Because we generate significant amounts of net interest income, we do not expect to be impacted by this limitation.
|
Required Information
|
Location in Report
|
Distribution of Assets, Liabilities and Stockholders' Equity; Interest Rates and Interest Differential
|
Part II, Item 7.B.I.
|
Investment Portfolio
|
Part II, Item 7.C.I.
|
Loan Portfolio
|
Part II, Item 7.C.II.
|
Summary of Loan Loss Experience
|
Part II, Item 7.C.III.
|
Deposits
|
Part II, Item 7.C.IV.
|
Return on Equity and Assets
|
Part II, Item 6.
|
Short-Term Borrowings
|
Part II, Item 7.C.V.
|
Name
|
Age
|
Positions Held and Years from Which Held
|
Thomas J. Murphy
|
60
|
President and Chief Executive Officer of Arrow since January 1, 2013. Mr. Murphy has been a Director of Arrow since July 2012. In addition to his executive leadership role at Arrow, he has been the President of GFNB since July 1, 2011 and Chief Executive Officer of GFNB since January 1, 2013. Prior positions in the Company include: Senior Executive Vice President of Arrow (2011-2012), Vice President of Arrow (2009-2011), Senior Trust Officer of GFNB (2010-2011), Corporate Secretary (2009-2012), Assistant Corporate Secretary of Arrow (2008-2009), Senior Vice President of GFNB (2008-2011) and Manager of the Personal Trust Department of GFNB (2004-2011). Mr. Murphy started with the Company in 2004.
|
Edward J. Campanella
|
51
|
Senior Vice President, Treasurer and Chief Financial Officer of Arrow since September 5, 2017. Mr. Campanella also serves as Executive Vice President, Treasurer and Chief Financial Officer of GFNB. Mr. Campanella joined the Company in 2017. Previously, he served as Chief Financial Officer for National Union Bank of Kinderhook in Kinderhook, NY (2016-2017). He was Senior Vice President, Treasurer and Director of Finance at Opus Bank in Irvine, CA (2013-2016). Prior to that he served as First Vice President and Treasurer of Cambridge Savings Bank in Cambridge, MA (2006-2013).
|
David S. DeMarco
|
57
|
Senior Vice President and Chief Banking Officer of Arrow since February 1, 2018. Mr. DeMarco has been a Senior Vice President of Arrow since May 1, 2009. Additionally, Mr. DeMarco has been President and Chief Executive Officer of SNB since January 1, 2013. He is also Executive Vice President and Chief Banking Officer of GFNB. Previously, Mr. DeMarco served as Executive Vice President and Head of the Branch, Corporate Development, Financial Services & Marketing Division of GFNB (2003-2012). Mr. DeMarco started with the Company as a commercial lender in 1987.
|
David D. Kaiser
|
58
|
Senior Vice President of Arrow since February 1, 2015. Mr. Kaiser has also served as Executive Vice President of GFNB since 2012 and as Chief Credit Officer of GFNB since 2011. Previously, he served as the Corporate Banking Manager for GFNB from 2005 to 2011. Mr. Kaiser started with the Company in 2000.
|
Andrew J. Wise
|
52
|
Senior Vice President and Chief Operating Officer of Arrow Financial Corporation since February 1, 2018. Mr. Wise has also served as Executive Vice President and Chief Operating Officer of GFNB since October 2017. Previously, Mr. Wise served as Chief Administrative Officer of GFNB. He joined GFNB in May 2016 as Senior Vice President of Administration. Prior to that, he worked at Adirondack Trust Company for 12 years where he was Executive Vice President and Chief Operating Officer of the company’s insurance subsidiary.
|
Item 1B.
|
Unresolved Staff Comments
- None
|
Plan Category
|
(a)
Number of Securities to be Issued Upon Exercise of Outstanding Options, Restricted Stock Units, Warrants and Rights
|
|
(b)
Weighted-Average
Exercise Price of Outstanding Options, Restricted Stock Units, Warrants and Rights
|
|
(c)
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
|
|||
Equity Compensation Plans Approved by Security Holders
(1)(2)
|
287,899
|
|
|
25.37
|
|
|
370,102
|
|
Equity Compensation Plans Not Approved by Security Holders
|
—
|
|
|
|
|
—
|
|
|
Total
|
287,899
|
|
|
|
|
370,102
|
|
(1)
|
The total of
287,899
shares listed in column (a) includes
284,522
which are issuable pursuant to outstanding stock options and
3,377
which are issuable pursuant to restricted stock units all granted under the LTIP or its predecessor plans.
|
(2)
|
The total of
370,102
shares listed in column (c) includes (i)
261,614
shares of common stock available for future award grants under the LTIP, (ii) 91,657 shares of common stock available for future issuance under the ESPP, and (iii) 16,831 shares of common stock available for future issuance under the DSP.
|
|
|||||||||||||||||||||||
Index
|
2003
|
|
2004
|
|
2005
|
|
2006
|
|
2007
|
|
2008
|
|
2009
|
|
2010
|
||||||||
Arrow Financial
Corporation |
100.00
|
|
|
118.58
|
|
|
106.58
|
|
|
108.20
|
|
|
101.28
|
|
|
123.94
|
|
|
132.30
|
|
|
156.43
|
|
Russell 2000 Index
|
100.00
|
|
|
118.44
|
|
|
123.78
|
|
|
146.52
|
|
|
144.22
|
|
|
95.49
|
|
|
121.43
|
|
|
154.03
|
|
NASDAQ Banks
Index |
100.00
|
|
|
114.52
|
|
|
111.86
|
|
|
125.60
|
|
|
99.40
|
|
|
72.47
|
|
|
60.30
|
|
|
71.71
|
|
Zacks $1B - $5B Bank
Assets Index |
100.00
|
|
|
116.74
|
|
|
114.01
|
|
|
127.88
|
|
|
107.38
|
|
|
87.68
|
|
|
75.27
|
|
|
85.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
TOTAL RETURN PERFORMANCE (Cont'd.)
Period Ending |
||||||||||||||||||||||
Index
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
||||||||
Arrow Financial
Corporation |
143.40
|
|
|
162.12
|
|
|
182.92
|
|
|
200.46
|
|
|
209.58
|
|
|
332.12
|
|
|
295.27
|
|
|
295.11
|
|
Russell 2000 Index
|
147.60
|
|
|
171.73
|
|
|
238.39
|
|
|
250.05
|
|
|
239.02
|
|
|
289.96
|
|
|
332.44
|
|
|
295.83
|
|
NASDAQ Banks
Index |
64.14
|
|
|
76.73
|
|
|
109.82
|
|
|
115.40
|
|
|
125.69
|
|
|
170.18
|
|
|
181.29
|
|
|
150.53
|
|
Zacks $1B - $5B Bank
Assets Index |
83.73
|
|
|
98.75
|
|
|
128.58
|
|
|
138.91
|
|
|
150.13
|
|
|
207.62
|
|
|
223.83
|
|
|
197.70
|
|
Fourth Quarter 2018
Calendar Month
|
(a) Total Number of
Shares Purchased
1
|
|
(b) Average Price Paid Per Share
1
|
|
(c) Total Number of
Shares Purchased as
Part of Publicly
Announced
Plans or Programs
2
|
|
(d) Maximum
Approximate Dollar
Value of Shares that
May Yet be
Purchased Under the
Plans or Programs
2
|
||||||
October
|
1,991
|
|
|
$
|
36.78
|
|
|
—
|
|
|
$
|
4,404,627
|
|
November
|
10,410
|
|
|
35.03
|
|
|
—
|
|
|
4,404,627
|
|
||
December
|
14,865
|
|
|
33.00
|
|
|
—
|
|
|
4,404,627
|
|
||
Total
|
27,266
|
|
|
34.05
|
|
|
—
|
|
|
|
Consolidated Statements of Income Data
:
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Interest and Dividend Income
|
96,503
|
|
|
$
|
84,657
|
|
|
$
|
76,915
|
|
|
$
|
70,738
|
|
|
$
|
66,861
|
|
|
Interest Expense
|
12,485
|
|
|
7,006
|
|
|
5,356
|
|
|
4,813
|
|
|
5,767
|
|
|||||
Net Interest Income
|
84,018
|
|
|
77,651
|
|
|
71,559
|
|
|
65,925
|
|
|
61,094
|
|
|||||
Provision for Loan Losses
|
2,607
|
|
|
2,736
|
|
|
2,033
|
|
|
1,347
|
|
|
1,848
|
|
|||||
Net Interest Income After Provision
for Loan Losses |
81,411
|
|
|
74,915
|
|
|
69,526
|
|
|
64,578
|
|
|
59,246
|
|
|||||
Noninterest Income
|
28,736
|
|
|
28,093
|
|
|
27,854
|
|
|
27,995
|
|
|
28,206
|
|
|||||
Net Gains (Losses) on Securities Transactions
|
213
|
|
|
(448
|
)
|
|
(22
|
)
|
|
129
|
|
|
110
|
|
|||||
Noninterest Expense
|
(65,055
|
)
|
|
(62,705
|
)
|
|
(59,609
|
)
|
|
(57,430
|
)
|
|
(54,028
|
)
|
|||||
Income Before Provision for Income Taxes
|
45,305
|
|
|
39,855
|
|
|
37,749
|
|
|
35,272
|
|
|
33,534
|
|
|||||
Provision for Income Taxes
|
9,026
|
|
|
10,529
|
|
|
11,215
|
|
|
10,610
|
|
|
10,174
|
|
|||||
Net Income
|
$
|
36,279
|
|
|
$
|
29,326
|
|
|
$
|
26,534
|
|
|
$
|
24,662
|
|
|
$
|
23,360
|
|
Per Common Share:
1
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic Earnings
|
$
|
2.52
|
|
|
$
|
2.05
|
|
|
$
|
1.87
|
|
|
$
|
1.75
|
|
|
$
|
1.66
|
|
Diluted Earnings
|
2.50
|
|
|
2.04
|
|
|
1.86
|
|
|
1.74
|
|
|
1.66
|
|
|||||
Per Common Share:
1
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash Dividends
|
$
|
1.00
|
|
|
$
|
0.95
|
|
|
$
|
0.92
|
|
|
$
|
0.90
|
|
|
$
|
0.88
|
|
Book Value
|
18.63
|
|
|
17.40
|
|
|
16.28
|
|
|
15.13
|
|
|
14.29
|
|
|||||
Tangible Book Value
2
|
16.99
|
|
|
15.71
|
|
|
14.56
|
|
|
13.37
|
|
|
12.46
|
|
|||||
Consolidated Year-End Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Assets
|
$
|
2,988,334
|
|
|
$
|
2,760,465
|
|
|
$
|
2,605,242
|
|
|
$
|
2,446,188
|
|
|
$
|
2,217,420
|
|
Securities Available-for-Sale
|
317,535
|
|
|
300,200
|
|
|
346,996
|
|
|
402,309
|
|
|
366,139
|
|
|||||
Securities Held-to-Maturity
|
283,476
|
|
|
335,907
|
|
|
345,427
|
|
|
320,611
|
|
|
302,024
|
|
|||||
Loans
|
2,196,215
|
|
|
1,950,770
|
|
|
1,753,268
|
|
|
1,573,952
|
|
|
1,413,268
|
|
|||||
Nonperforming Assets
3
|
6,782
|
|
|
7,797
|
|
|
7,186
|
|
|
8,924
|
|
|
8,162
|
|
|||||
Deposits
|
2,345,584
|
|
|
2,245,116
|
|
|
2,116,546
|
|
|
2,030,423
|
|
|
1,902,948
|
|
|||||
Federal Home Loan Bank Advances
|
279,000
|
|
|
160,000
|
|
|
178,000
|
|
|
137,000
|
|
|
51,000
|
|
|||||
Other Borrowed Funds
|
74,659
|
|
|
84,966
|
|
|
55,836
|
|
|
43,173
|
|
|
39,421
|
|
|||||
Stockholders’ Equity
|
269,584
|
|
|
249,603
|
|
|
232,852
|
|
|
213,971
|
|
|
200,926
|
|
|||||
Selected Key Ratios:
|
|
|
|
|
|
|
|
|
|
||||||||||
Return on Average Assets
|
1.27
|
%
|
|
1.09
|
%
|
|
1.06
|
%
|
|
1.05
|
%
|
|
1.07
|
%
|
|||||
Return on Average Equity
|
13.96
|
|
|
12.14
|
|
|
11.79
|
|
|
11.86
|
|
|
11.79
|
|
|||||
Dividend Payout Ratio
4
|
40.00
|
|
|
46.57
|
|
|
49.46
|
|
|
51.72
|
|
|
53.01
|
|
|||||
Average Equity to Average Assets
|
9.10
|
|
|
8.96
|
|
|
8.95
|
|
|
8.88
|
|
|
9.05
|
|
◦
|
Commercial Loans:
These loans comprised approximately
6%
of the total loan portfolio at period-end. The business sector in the Company's service area, including small- and mid-sized businesses with headquarters in the area, continued to be in reasonably good financial condition at
2018
year-end.
|
◦
|
Commercial Real Estate Loans:
These loans comprised approximately
22%
of the total loan portfolio at period-end. Commercial property values in the Company's region have remained stable in recent periods. Appraisals on nonperforming and watched CRE properties are updated as deemed necessary, usually when the loan was downgraded or when there has been significant market deterioration since the last appraisal.
|
◦
|
Residential Real Estate Loans:
These loans, including home equity loans, comprised approximately
39%
of the total loan portfolio at period-end. The residential real estate market in the Company's service area has been stable in recent periods. The Company originated nearly all of the residential real estate loans currently held in the loan portfolio and applied conservative underwriting standards to loan originations. The Company typically sells a portion of residential real estate mortgage originations into the secondary market. The ratio of the sales of originations to total originations tends to fluctuate from period to period, although this ratio has generally declined somewhat in recent periods.
|
◦
|
Consumer Loans (Primarily Indirect Automobile Loans):
These loans comprise approximately
33%
of the total loan portfolio at period-end. Throughout the past three years, the Company did not experience any significant increase in the delinquency rate or in the percentage of nonperforming loans in this segment.
|
|
Years Ended December 31,
|
|
Change From Prior Year
|
||||||||||||||||||||||
|
|
|
|
|
|
|
2017 to 2018
|
|
2016 to 2017
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
||||||||||||
Interest and Dividend Income
|
96,503
|
|
|
84,657
|
|
|
76,915
|
|
|
$
|
11,846
|
|
|
14.0
|
%
|
|
$
|
7,742
|
|
|
10.1
|
%
|
|||
Interest Expense
|
12,485
|
|
|
7,006
|
|
|
5,356
|
|
|
5,479
|
|
|
78.2
|
|
|
1,650
|
|
|
30.8
|
|
|||||
Net Interest Income
|
$
|
84,018
|
|
|
$
|
77,651
|
|
|
$
|
71,559
|
|
|
$
|
6,367
|
|
|
8.2
|
%
|
|
$
|
6,092
|
|
|
8.5
|
%
|
|
Years Ended December 31,
|
|
Change From Prior Year
|
||||||||||||||||||||||
|
|
|
|
|
|
|
2017 to 2018
|
|
2016 to 2017
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
||||||||||||
Interest and Dividend Income
|
98,214
|
|
|
88,501
|
|
|
80,636
|
|
|
$
|
9,713
|
|
|
11.0
|
%
|
|
$
|
7,865
|
|
|
9.8
|
%
|
|||
Interest Expense
|
12,485
|
|
|
7,006
|
|
|
5,356
|
|
|
5,479
|
|
|
78.2
|
|
|
1,650
|
|
|
30.8
|
|
|||||
Net Interest Income
|
$
|
85,729
|
|
|
$
|
81,495
|
|
|
$
|
75,280
|
|
|
$
|
4,234
|
|
|
5.2
|
%
|
|
$
|
6,215
|
|
|
8.3
|
%
|
Years Ended:
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||||||||||||||
|
|
|
Interest
|
|
Rate
|
|
|
|
Interest
|
|
Rate
|
|
|
|
Interest
|
|
Rate
|
|||||||||||||||
|
Average
|
|
Income/
|
|
Earned/
|
|
Average
|
|
Income/
|
|
Earned/
|
|
Average
|
|
Income/
|
|
Earned/
|
|||||||||||||||
|
Balance
|
|
Expense
|
|
Paid
|
|
Balance
|
|
Expense
|
|
Paid
|
|
Balance
|
|
Expense
|
|
Paid
|
|||||||||||||||
Interest-Bearing Deposits at Banks
|
$
|
30,475
|
|
|
$
|
711
|
|
|
2.33
|
%
|
|
$
|
25,573
|
|
|
$
|
348
|
|
|
1.36
|
%
|
|
$
|
24,950
|
|
|
$
|
152
|
|
|
0.61
|
%
|
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fully Taxable
|
382,703
|
|
|
8,582
|
|
|
2.24
|
%
|
|
390,641
|
|
|
7,884
|
|
|
2.02
|
%
|
|
420,885
|
|
|
7,934
|
|
|
1.89
|
%
|
||||||
Exempt from Federal
Taxes |
258,407
|
|
|
5,563
|
|
|
2.15
|
%
|
|
288,655
|
|
|
6,223
|
|
|
2.16
|
%
|
|
278,982
|
|
|
6,006
|
|
|
2.15
|
%
|
||||||
Loans
|
2,062,575
|
|
|
81,647
|
|
|
3.96
|
%
|
|
1,862,247
|
|
|
70,202
|
|
|
3.77
|
%
|
|
1,663,225
|
|
|
62,823
|
|
|
3.78
|
%
|
||||||
Total Earning Assets
|
2,734,160
|
|
|
96,503
|
|
|
3.53
|
%
|
|
2,567,116
|
|
|
84,657
|
|
|
3.30
|
%
|
|
2,388,042
|
|
|
76,915
|
|
|
3.22
|
%
|
||||||
Allowance for Loan Losses
|
(19,278
|
)
|
|
|
|
|
|
(17,303
|
)
|
|
|
|
|
|
(16,449
|
)
|
|
|
|
|
||||||||||||
Cash and Due From Banks
|
36,360
|
|
|
|
|
|
|
36,175
|
|
|
|
|
|
|
33,207
|
|
|
|
|
|
||||||||||||
Other Assets
|
104,511
|
|
|
|
|
|
|
107,958
|
|
|
|
|
|
|
108,845
|
|
|
|
|
|
||||||||||||
Total Assets
|
$
|
2,855,753
|
|
|
|
|
|
|
$
|
2,693,946
|
|
|
|
|
|
|
$
|
2,513,645
|
|
|
|
|
|
|||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-Bearing Checking
Accounts |
$
|
849,626
|
|
|
1,618
|
|
|
0.19
|
%
|
|
$
|
907,113
|
|
|
1,510
|
|
|
0.17
|
%
|
|
$
|
912,461
|
|
|
1,279
|
|
|
0.14
|
%
|
|||
Savings Deposits
|
753,198
|
|
|
3,457
|
|
|
0.46
|
%
|
|
685,782
|
|
|
1,371
|
|
|
0.20
|
%
|
|
616,208
|
|
|
931
|
|
|
0.15
|
%
|
||||||
Time Deposits of $250,000
Or More |
78,159
|
|
|
1,183
|
|
|
1.51
|
%
|
|
32,089
|
|
|
282
|
|
|
0.88
|
%
|
|
69,489
|
|
|
453
|
|
|
0.65
|
%
|
||||||
Other Time Deposits
|
173,151
|
|
|
1,420
|
|
|
0.82
|
%
|
|
165,778
|
|
|
950
|
|
|
0.57
|
%
|
|
129,084
|
|
|
658
|
|
|
0.51
|
%
|
||||||
Total Interest-Bearing
Deposits |
1,854,134
|
|
|
7,678
|
|
|
0.41
|
%
|
|
1,790,762
|
|
|
4,113
|
|
|
0.23
|
%
|
|
1,727,242
|
|
|
3,321
|
|
|
0.19
|
%
|
||||||
Short-Term Borrowings
|
192,050
|
|
|
2,980
|
|
|
1.55
|
%
|
|
140,813
|
|
|
1,148
|
|
|
0.82
|
%
|
|
94,109
|
|
|
393
|
|
|
0.42
|
%
|
||||||
FHLBNY Term Advances
and Other Long-Term Debt |
66,918
|
|
|
1,827
|
|
|
2.73
|
%
|
|
75,000
|
|
|
1,745
|
|
|
2.33
|
%
|
|
75,000
|
|
|
1,642
|
|
|
2.19
|
%
|
||||||
Total Interest-
Bearing Liabilities |
2,113,102
|
|
|
12,485
|
|
|
0.59
|
%
|
|
2,006,575
|
|
|
7,006
|
|
|
0.35
|
%
|
|
1,896,351
|
|
|
5,356
|
|
|
0.28
|
%
|
||||||
Demand Deposits
|
460,355
|
|
|
|
|
|
|
421,061
|
|
|
|
|
|
|
366,956
|
|
|
|
|
|
||||||||||||
Other Liabilities
|
22,461
|
|
|
|
|
|
|
24,844
|
|
|
|
|
|
|
25,369
|
|
|
|
|
|
||||||||||||
Total Liabilities
|
2,595,918
|
|
|
|
|
|
|
2,452,480
|
|
|
|
|
|
|
2,288,676
|
|
|
|
|
|
||||||||||||
Stockholders’ Equity
|
259,835
|
|
|
|
|
|
|
241,466
|
|
|
|
|
|
|
224,969
|
|
|
|
|
|
||||||||||||
Total Liabilities and
Stockholders’ Equity |
$
|
2,855,753
|
|
|
|
|
|
|
$
|
2,693,946
|
|
|
|
|
|
|
$
|
2,513,645
|
|
|
|
|
|
|||||||||
Net Interest Income
|
|
|
$
|
84,018
|
|
|
|
|
|
|
$
|
77,651
|
|
|
|
|
|
|
$71,559
|
|
|
|||||||||||
Net Interest Spread
|
|
|
|
|
2.94
|
%
|
|
|
|
|
|
2.95
|
%
|
|
|
|
|
|
2.94
|
%
|
||||||||||||
Net Interest Margin
|
|
|
|
|
3.07
|
%
|
|
|
|
|
|
3.02
|
%
|
|
|
|
|
|
3.00
|
%
|
Years Ended:
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||||||||||||||
|
|
|
Interest
|
|
Rate
|
|
|
|
Interest
|
|
Rate
|
|
|
|
Interest
|
|
Rate
|
|||||||||||||||
|
Average
|
|
Income/
|
|
Earned/
|
|
Average
|
|
Income/
|
|
Earned/
|
|
Average
|
|
Income/
|
|
Earned/
|
|||||||||||||||
|
Balance
|
|
Expense
|
|
Paid
|
|
Balance
|
|
Expense
|
|
Paid
|
|
Balance
|
|
Expense
|
|
Paid
|
|||||||||||||||
Interest-Bearing Deposits at Banks
|
$
|
30,475
|
|
|
$
|
711
|
|
|
2.33
|
%
|
|
$
|
25,573
|
|
|
$
|
348
|
|
|
1.36
|
%
|
|
$
|
24,950
|
|
|
$
|
153
|
|
|
0.61
|
%
|
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fully Taxable
|
382,703
|
|
|
8,591
|
|
|
2.24
|
%
|
|
390,641
|
|
|
7,900
|
|
|
2.02
|
%
|
|
420,885
|
|
|
7,950
|
|
|
1.89
|
%
|
||||||
Exempt from Federal
Taxes |
258,407
|
|
|
6,948
|
|
|
2.69
|
%
|
|
288,655
|
|
|
9,507
|
|
|
3.29
|
%
|
|
278,982
|
|
|
9,187
|
|
|
3.29
|
%
|
||||||
Loans
|
2,062,575
|
|
|
81,964
|
|
|
3.97
|
%
|
|
1,862,247
|
|
|
70,746
|
|
|
3.80
|
%
|
|
1,663,225
|
|
|
63,346
|
|
|
3.81
|
%
|
||||||
Total Earning Assets
|
2,734,160
|
|
|
98,214
|
|
|
3.59
|
%
|
|
2,567,116
|
|
|
88,501
|
|
|
3.45
|
%
|
|
2,388,042
|
|
|
80,636
|
|
|
3.38
|
%
|
||||||
Allowance for Loan Losses
|
(19,278
|
)
|
|
|
|
|
|
(17,303
|
)
|
|
|
|
|
|
(16,449
|
)
|
|
|
|
|
||||||||||||
Cash and Due From Banks
|
36,360
|
|
|
|
|
|
|
36,175
|
|
|
|
|
|
|
33,207
|
|
|
|
|
|
||||||||||||
Other Assets
|
104,511
|
|
|
|
|
|
|
107,958
|
|
|
|
|
|
|
108,845
|
|
|
|
|
|
||||||||||||
Total Assets
|
$
|
2,855,753
|
|
|
|
|
|
|
$
|
2,693,946
|
|
|
|
|
|
|
$
|
2,513,645
|
|
|
|
|
|
|||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-Bearing Checking
Accounts |
$
|
849,626
|
|
|
1,618
|
|
|
0.19
|
%
|
|
$
|
907,113
|
|
|
1,510
|
|
|
0.17
|
%
|
|
$
|
912,461
|
|
|
1,279
|
|
|
0.14
|
%
|
|||
Savings Deposits
|
753,198
|
|
|
3,457
|
|
|
0.46
|
%
|
|
685,782
|
|
|
1,371
|
|
|
0.20
|
%
|
|
616,208
|
|
|
931
|
|
|
0.15
|
%
|
||||||
Time Deposits of $250,000
Or More |
78,159
|
|
|
1,183
|
|
|
1.51
|
%
|
|
32,089
|
|
|
282
|
|
|
0.88
|
%
|
|
69,489
|
|
|
453
|
|
|
0.65
|
%
|
||||||
Other Time Deposits
|
173,151
|
|
|
1,420
|
|
|
0.82
|
%
|
|
165,778
|
|
|
950
|
|
|
0.57
|
%
|
|
129,084
|
|
|
658
|
|
|
0.51
|
%
|
||||||
Total Interest-Bearing
Deposits |
1,854,134
|
|
|
7,678
|
|
|
0.41
|
%
|
|
1,790,762
|
|
|
4,113
|
|
|
0.23
|
%
|
|
1,727,242
|
|
|
3,321
|
|
|
0.19
|
%
|
||||||
Short-Term Borrowings
|
192,050
|
|
|
2,980
|
|
|
1.55
|
%
|
|
140,813
|
|
|
1,148
|
|
|
0.82
|
%
|
|
94,109
|
|
|
393
|
|
|
0.42
|
%
|
||||||
FHLBNY Term Advances
and Other Long-Term Debt |
66,918
|
|
|
1,827
|
|
|
2.73
|
%
|
|
75,000
|
|
|
1,745
|
|
|
2.33
|
%
|
|
75,000
|
|
|
1,642
|
|
|
2.19
|
%
|
||||||
Total Interest-
Bearing Liabilities |
2,113,102
|
|
|
12,485
|
|
|
0.59
|
%
|
|
2,006,575
|
|
|
7,006
|
|
|
0.35
|
%
|
|
1,896,351
|
|
|
5,356
|
|
|
0.28
|
%
|
||||||
Demand Deposits
|
460,355
|
|
|
|
|
|
|
421,061
|
|
|
|
|
|
|
366,956
|
|
|
|
|
|
||||||||||||
Other Liabilities
|
22,461
|
|
|
|
|
|
|
24,844
|
|
|
|
|
|
|
25,369
|
|
|
|
|
|
||||||||||||
Total Liabilities
|
2,595,918
|
|
|
|
|
|
|
2,452,480
|
|
|
|
|
|
|
2,288,676
|
|
|
|
|
|
||||||||||||
Stockholders’ Equity
|
259,835
|
|
|
|
|
|
|
241,466
|
|
|
|
|
|
|
224,969
|
|
|
|
|
|
||||||||||||
Total Liabilities and
Stockholders’ Equity |
$
|
2,855,753
|
|
|
|
|
|
|
$
|
2,693,946
|
|
|
|
|
|
|
$
|
2,513,645
|
|
|
|
|
|
|||||||||
Net Interest Income
|
|
|
85,729
|
|
|
|
|
|
|
81,495
|
|
|
|
|
|
|
75,280
|
|
|
|
||||||||||||
Net Interest Spread
|
|
|
|
|
3.00
|
%
|
|
|
|
|
|
3.10
|
%
|
|
|
|
|
|
3.10
|
%
|
||||||||||||
Net Interest Margin
|
|
|
|
|
3.14
|
%
|
|
|
|
|
|
3.17
|
%
|
|
|
|
|
|
3.15
|
%
|
|
2018 Compared to 2017 Change in Net Interest Income Due to:
|
|
2017 Compared to 2016 Change in Net Interest Income Due to:
|
||||||||||||||||||||
Interest and Dividend Income:
|
Volume
|
|
Rate
|
|
Total
|
|
Volume
|
|
Rate
|
|
Total
|
||||||||||||
Interest-Bearing Bank Balances
|
$
|
118
|
|
|
$
|
245
|
|
|
$
|
363
|
|
|
$
|
4
|
|
|
$
|
191
|
|
|
$
|
195
|
|
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fully Taxable
|
(161
|
)
|
|
859
|
|
|
698
|
|
|
(597
|
)
|
|
548
|
|
|
(49
|
)
|
||||||
Exempt from Federal Taxes
|
(631
|
)
|
|
(29
|
)
|
|
(660
|
)
|
|
189
|
|
|
28
|
|
|
217
|
|
||||||
Loans
|
7,659
|
|
|
3,786
|
|
|
11,445
|
|
|
7,545
|
|
|
(166
|
)
|
|
7,379
|
|
||||||
Total Interest and Dividend Income
|
6,985
|
|
|
4,861
|
|
|
11,846
|
|
|
7,141
|
|
|
601
|
|
|
7,742
|
|
||||||
Interest Expense:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-Bearing Checking Accounts
|
(102
|
)
|
|
210
|
|
|
108
|
|
|
(8
|
)
|
|
239
|
|
|
231
|
|
||||||
Savings Deposits
|
147
|
|
|
1,939
|
|
|
2,086
|
|
|
113
|
|
|
327
|
|
|
440
|
|
||||||
Time Deposits of $250,000 or More
|
599
|
|
|
302
|
|
|
901
|
|
|
(295
|
)
|
|
124
|
|
|
(171
|
)
|
||||||
Other Time Deposits
|
44
|
|
|
426
|
|
|
470
|
|
|
203
|
|
|
89
|
|
|
292
|
|
||||||
Total Deposits
|
688
|
|
|
2,877
|
|
|
3,565
|
|
|
13
|
|
|
779
|
|
|
792
|
|
||||||
Short-Term Borrowings
|
529
|
|
|
1,303
|
|
|
1,832
|
|
|
260
|
|
|
495
|
|
|
755
|
|
||||||
Long-Term Debt
|
(201
|
)
|
|
283
|
|
|
82
|
|
|
—
|
|
|
103
|
|
|
103
|
|
||||||
Total Interest Expense
|
1,016
|
|
|
4,463
|
|
|
5,479
|
|
|
273
|
|
|
1,377
|
|
|
1,650
|
|
||||||
Net Interest Income
|
$
|
5,969
|
|
|
$
|
398
|
|
|
$
|
6,367
|
|
|
$
|
6,868
|
|
|
$
|
(776
|
)
|
|
$
|
6,092
|
|
|
2018 Compared to 2017 Change in Net Interest Income Due to:
|
|
2017 Compared to 2016 Change in Net Interest Income Due to:
|
||||||||||||||||||||
Interest and Dividend Income:
|
Volume
|
|
Rate
|
|
Total
|
|
Volume
|
|
Rate
|
|
Total
|
||||||||||||
Interest-Bearing Bank Balances
|
$
|
77
|
|
|
$
|
286
|
|
|
$
|
363
|
|
|
$
|
4
|
|
|
$
|
191
|
|
|
$
|
195
|
|
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fully Taxable
|
(163
|
)
|
|
854
|
|
|
691
|
|
|
(592
|
)
|
|
542
|
|
|
(50
|
)
|
||||||
Exempt from Federal Taxes
|
(929
|
)
|
|
(1,630
|
)
|
|
(2,559
|
)
|
|
318
|
|
|
2
|
|
|
320
|
|
||||||
Loans
|
7,853
|
|
|
3,365
|
|
|
11,218
|
|
|
7,563
|
|
|
(163
|
)
|
|
7,400
|
|
||||||
Total Interest and Dividend Income
|
6,838
|
|
|
2,875
|
|
|
9,713
|
|
|
7,293
|
|
|
572
|
|
|
7,865
|
|
||||||
Interest Expense:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-Bearing Checking Accounts
|
(102
|
)
|
|
210
|
|
|
108
|
|
|
(8
|
)
|
|
239
|
|
|
231
|
|
||||||
Savings Deposits
|
147
|
|
|
1,939
|
|
|
2,086
|
|
|
113
|
|
|
327
|
|
|
440
|
|
||||||
Time Deposits of $250,000 or More
|
599
|
|
|
302
|
|
|
901
|
|
|
(295
|
)
|
|
124
|
|
|
(171
|
)
|
||||||
Other Time Deposits
|
44
|
|
|
426
|
|
|
470
|
|
|
203
|
|
|
89
|
|
|
292
|
|
||||||
Total Deposits
|
688
|
|
|
2,877
|
|
|
3,565
|
|
|
13
|
|
|
779
|
|
|
792
|
|
||||||
Short-Term Borrowings
|
529
|
|
|
1,303
|
|
|
1,832
|
|
|
260
|
|
|
495
|
|
|
755
|
|
||||||
Long-Term Debt
|
(201
|
)
|
|
283
|
|
|
82
|
|
|
—
|
|
|
103
|
|
|
103
|
|
||||||
Total Interest Expense
|
1,016
|
|
|
4,463
|
|
|
5,479
|
|
|
273
|
|
|
1,377
|
|
|
1,650
|
|
||||||
Net Interest Income
|
$
|
5,822
|
|
|
$
|
(1,588
|
)
|
|
$
|
4,234
|
|
|
$
|
7,020
|
|
|
$
|
(805
|
)
|
|
$
|
6,215
|
|
YIELD ANALYSIS (GAAP Basis)
|
December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Yield on Earning Assets
|
3.53
|
%
|
|
3.30
|
%
|
|
3.22
|
%
|
Cost of Interest-Bearing Liabilities
|
0.59
|
|
|
0.35
|
|
|
0.28
|
|
Net Interest Spread
|
2.94
|
%
|
|
2.95
|
%
|
|
2.94
|
%
|
Net Interest Margin
|
3.07
|
%
|
|
3.02
|
%
|
|
3.00
|
%
|
YIELD ANALYSIS (Tax-equivalent basis)
|
December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Yield on Earning Assets
|
3.59
|
%
|
|
3.45
|
%
|
|
3.38
|
%
|
Cost of Interest-Bearing Liabilities
|
0.59
|
|
|
0.35
|
|
|
0.28
|
|
Net Interest Spread
|
3.00
|
%
|
|
3.10
|
%
|
|
3.10
|
%
|
Net Interest Margin
|
3.14
|
%
|
|
3.17
|
%
|
|
3.15
|
%
|
Years-Ended December 31,
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Period-End Loans
|
$
|
2,196,215
|
|
|
$
|
1,950,770
|
|
|
$
|
1,753,268
|
|
|
$
|
1,573,952
|
|
|
$
|
1,413,268
|
|
Average Loans
|
2,062,575
|
|
|
1,862,247
|
|
|
1,663,225
|
|
|
1,484,766
|
|
|
1,344,427
|
|
|||||
Period-End Assets
|
2,988,334
|
|
|
2,760,465
|
|
|
2,605,242
|
|
|
2,446,188
|
|
|
2,217,420
|
|
|||||
Nonperforming Assets, at Period-End:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonaccrual Loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial Loans
|
403
|
|
|
588
|
|
|
155
|
|
|
387
|
|
|
473
|
|
|||||
Commercial Real Estate
|
789
|
|
|
1,530
|
|
|
875
|
|
|
2,402
|
|
|
2,071
|
|
|||||
Consumer Loans
|
658
|
|
|
653
|
|
|
589
|
|
|
449
|
|
|
415
|
|
|||||
Residential Real Estate Loans
|
2,309
|
|
|
2,755
|
|
|
2,574
|
|
|
3,195
|
|
|
3,940
|
|
|||||
Total Nonaccrual Loans
|
4,159
|
|
|
5,526
|
|
|
4,193
|
|
|
6,433
|
|
|
6,899
|
|
|||||
Loans Past Due 90 or More Days and
|
|
|
|
|
|
|
|
|
|
||||||||||
Still Accruing Interest
|
1,225
|
|
|
319
|
|
|
1,201
|
|
|
187
|
|
|
537
|
|
|||||
Restructured
|
138
|
|
|
105
|
|
|
106
|
|
|
286
|
|
|
333
|
|
|||||
Total Nonperforming Loans
|
5,522
|
|
|
5,950
|
|
|
5,500
|
|
|
6,906
|
|
|
7,769
|
|
|||||
Repossessed Assets
|
130
|
|
|
109
|
|
|
101
|
|
|
140
|
|
|
81
|
|
|||||
Other Real Estate Owned
|
1,130
|
|
|
1,738
|
|
|
1,585
|
|
|
1,878
|
|
|
312
|
|
|||||
Total Nonperforming Assets
|
$
|
6,782
|
|
|
$
|
7,797
|
|
|
$
|
7,186
|
|
|
$
|
8,924
|
|
|
$
|
8,162
|
|
Allowance for Loan Losses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at Beginning of Period
|
$
|
18,586
|
|
|
$
|
17,012
|
|
|
$
|
16,038
|
|
|
$
|
15,570
|
|
|
$
|
14,434
|
|
Loans Charged-off:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial Loans
|
(153
|
)
|
|
(2
|
)
|
|
(97
|
)
|
|
(62
|
)
|
|
(212
|
)
|
|||||
Commercial Real Estate
|
(17
|
)
|
|
(380
|
)
|
|
(195
|
)
|
|
(7
|
)
|
|
—
|
|
|||||
Consumer Loans
|
(1,246
|
)
|
|
(1,101
|
)
|
|
(871
|
)
|
|
(711
|
)
|
|
(718
|
)
|
|||||
Residential Real Estate Loans
|
(116
|
)
|
|
(76
|
)
|
|
(107
|
)
|
|
(326
|
)
|
|
(91
|
)
|
|||||
Total Loans Charged-off
|
(1,532
|
)
|
|
(1,559
|
)
|
|
(1,270
|
)
|
|
(1,106
|
)
|
|
(1,021
|
)
|
|||||
Recoveries of Loans Previously Charged-off:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial Loans
|
3
|
|
|
8
|
|
|
23
|
|
|
33
|
|
|
86
|
|
|||||
Commercial Real Estate
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Consumer Loans
|
520
|
|
|
389
|
|
|
182
|
|
|
194
|
|
|
223
|
|
|||||
Residential Real Estate Loans
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|||||
Total Recoveries of Loans Previously Charged-off
|
535
|
|
|
397
|
|
|
211
|
|
|
227
|
|
|
309
|
|
|||||
Net Loans Charged-off
|
(997
|
)
|
|
(1,162
|
)
|
|
(1,059
|
)
|
|
(879
|
)
|
|
(712
|
)
|
|||||
Provision for Loan Losses
|
|
|
|
|
|
|
|
|
|
||||||||||
Charged to Expense
|
2,607
|
|
|
2,736
|
|
|
2,033
|
|
|
1,347
|
|
|
1,848
|
|
|||||
Balance at End of Period
|
$
|
20,196
|
|
|
$
|
18,586
|
|
|
$
|
17,012
|
|
|
$
|
16,038
|
|
|
$
|
15,570
|
|
Asset Quality Ratios:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Charge-offs to Average Loans
|
0.05
|
%
|
|
0.06
|
%
|
|
0.06
|
%
|
|
0.06
|
%
|
|
0.05
|
%
|
|||||
Provision for Loan Losses to Average Loans
|
0.13
|
%
|
|
0.15
|
%
|
|
0.12
|
%
|
|
0.09
|
%
|
|
0.14
|
%
|
|||||
Allowance for Loan Losses to Period-end Loans
|
0.92
|
%
|
|
0.95
|
%
|
|
0.97
|
%
|
|
1.02
|
%
|
|
1.10
|
%
|
|||||
Allowance for Loan Losses to Nonperforming Loans
|
365.74
|
%
|
|
312.37
|
%
|
|
309.31
|
%
|
|
232.24
|
%
|
|
200.41
|
%
|
|||||
Nonperforming Loans to Period-end Loans
|
0.25
|
%
|
|
0.31
|
%
|
|
0.31
|
%
|
|
0.44
|
%
|
|
0.55
|
%
|
|||||
Nonperforming Assets to Period-end Assets
|
0.23
|
%
|
|
0.28
|
%
|
|
0.28
|
%
|
|
0.36
|
%
|
|
0.37
|
%
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Commercial Loans
|
$
|
1,218
|
|
|
$
|
1,873
|
|
|
$
|
1,017
|
|
|
$
|
1,827
|
|
|
$
|
2,382
|
|
Commercial Real Estate
|
5,644
|
|
|
4,504
|
|
|
5,677
|
|
|
4,520
|
|
|
3,846
|
|
|||||
Consumer Loans
|
8,882
|
|
|
7,604
|
|
|
6,120
|
|
|
5,554
|
|
|
5,210
|
|
|||||
Residential Real Estate Loans
|
4,452
|
|
|
4,605
|
|
|
4,198
|
|
|
3,790
|
|
|
3,369
|
|
|||||
Unallocated
|
—
|
|
|
—
|
|
|
—
|
|
|
347
|
|
|
763
|
|
|||||
Total
|
$
|
20,196
|
|
|
$
|
18,586
|
|
|
$
|
17,012
|
|
|
$
|
16,038
|
|
|
$
|
15,570
|
|
•
|
Loan growth in all portfolio segments
|
•
|
An increase in classified commercial and commercial real estate loans
|
•
|
A slight decrease in the qualitative loss factor for consumer loans
|
•
|
A decrease in the qualitative and historical loss factors for residential real estate loans
|
|
Years Ended December 31,
|
|
Change From Prior Year
|
||||||||||||||||||||||
|
|
|
|
|
|
|
2017 to 2018
|
|
2016 to 2017
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
||||||||||||
Income from Fiduciary Activities
|
$
|
9,255
|
|
|
$
|
8,417
|
|
|
$
|
7,783
|
|
|
$
|
838
|
|
|
10.0
|
%
|
|
$
|
634
|
|
|
8.1
|
%
|
Fees for Other Services to Customers
|
10,134
|
|
|
9,591
|
|
|
9,469
|
|
|
543
|
|
|
5.7
|
|
|
122
|
|
|
1.3
|
|
|||||
Insurance Commissions
|
7,888
|
|
|
8,612
|
|
|
8,668
|
|
|
(724
|
)
|
|
(8.4
|
)
|
|
(56
|
)
|
|
(0.6
|
)
|
|||||
Net Gain (Loss) on Securities
|
213
|
|
|
(448
|
)
|
|
(22
|
)
|
|
661
|
|
|
(147.5
|
)
|
|
(426
|
)
|
|
1,936.4
|
|
|||||
Net Gain on Sales of Loans
|
135
|
|
|
546
|
|
|
821
|
|
|
(411
|
)
|
|
(75.3
|
)
|
|
(275
|
)
|
|
(33.5
|
)
|
|||||
Other Operating Income
|
1,324
|
|
|
927
|
|
|
1,113
|
|
|
397
|
|
|
42.8
|
|
|
(186
|
)
|
|
(16.7
|
)
|
|||||
Total Noninterest Income
|
$
|
28,949
|
|
|
$
|
27,645
|
|
|
$
|
27,832
|
|
|
$
|
1,304
|
|
|
4.7
|
|
|
$
|
(187
|
)
|
|
(0.7
|
)
|
|
Years Ended December 31,
|
|
Change From Prior Year
|
||||||||||||||||||||||
|
|
|
|
|
|
|
2017 to 2018
|
|
2016 to 2017
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
||||||||||||
Salaries and Employee Benefits
|
$
|
38,788
|
|
|
$
|
37,677
|
|
|
$
|
34,637
|
|
|
$
|
1,111
|
|
|
2.9
|
%
|
|
$
|
3,040
|
|
|
8.8
|
%
|
Occupancy Expense of Premises, Net
|
5,026
|
|
|
4,911
|
|
|
4,983
|
|
|
115
|
|
|
2.3
|
|
|
(72
|
)
|
|
(1.4
|
)
|
|||||
Furniture and Equipment Expense
|
4,761
|
|
|
4,649
|
|
|
4,419
|
|
|
112
|
|
|
2.4
|
|
|
230
|
|
|
5.2
|
|
|||||
FDIC Regular Assessment
|
881
|
|
|
891
|
|
|
1,076
|
|
|
(10
|
)
|
|
(1.1
|
)
|
|
(185
|
)
|
|
(17.2
|
)
|
|||||
Amortization of Intangible Assets
|
262
|
|
|
279
|
|
|
297
|
|
|
(17
|
)
|
|
(6.1
|
)
|
|
(18
|
)
|
|
(6.1
|
)
|
|||||
Other Operating Expense
|
15,337
|
|
|
14,298
|
|
|
14,197
|
|
|
1,039
|
|
|
7.3
|
|
|
101
|
|
|
0.7
|
|
|||||
Total Noninterest Expense
|
$
|
65,055
|
|
|
$
|
62,705
|
|
|
$
|
59,609
|
|
|
$
|
2,350
|
|
|
3.7
|
|
|
$
|
3,096
|
|
|
5.2
|
|
Efficiency Ratio
|
56.60
|
%
|
|
56.96
|
%
|
|
57.51
|
%
|
|
(0.36
|
)%
|
|
(0.6
|
)
|
|
(0.55
|
)%
|
|
(1.0
|
)
|
|
Years Ended December 31,
|
|
Change From Prior Year
|
||||||||||||||||||||||
|
|
|
|
|
|
|
2017 to 2018
|
|
2016 to 2017
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
||||||||||||
Provision for Income Taxes
|
$
|
9,026
|
|
|
$
|
10,529
|
|
|
$
|
11,215
|
|
|
$
|
(1,503
|
)
|
|
(14.3
|
)%
|
|
$
|
(686
|
)
|
|
(6.1
|
)%
|
Effective Tax Rate
|
19.9
|
%
|
|
26.4
|
%
|
|
29.7
|
%
|
|
(6.5
|
)%
|
|
(24.6
|
)%
|
|
(3.3
|
)%
|
|
(11.1
|
)%
|
|
December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
U.S. Government & Agency Obligations
|
$
|
46,765
|
|
|
$
|
59,894
|
|
|
$
|
147,377
|
|
State and Municipal Obligations
|
1,195
|
|
|
10,349
|
|
|
27,690
|
|
|||
Mortgage-Backed Securities
|
268,775
|
|
|
227,596
|
|
|
167,239
|
|
|||
Corporate and Other Debt Securities
|
800
|
|
|
800
|
|
|
3,308
|
|
|||
Mutual Funds and Equity Securities
|
—
|
|
|
1,561
|
|
|
1,382
|
|
|||
Total
|
$
|
317,535
|
|
|
$
|
300,200
|
|
|
$
|
346,996
|
|
|
Within
One
Year
|
|
After
1 But
Within
5 Years
|
|
After
5 But
Within
10 Years
|
|
After
10 Years
|
|
Total
|
|||||
U.S. Government & Agency Obligations
|
41,864
|
|
|
4,901
|
|
|
—
|
|
|
—
|
|
|
46,765
|
|
State and Municipal Obligations
|
204
|
|
|
511
|
|
|
—
|
|
|
480
|
|
|
1,195
|
|
Mortgage-Backed Securities
|
743
|
|
|
142,091
|
|
|
105,902
|
|
|
20,039
|
|
|
268,775
|
|
Corporate and Other Debt Securities
|
—
|
|
|
—
|
|
|
—
|
|
|
800
|
|
|
800
|
|
Total
|
42,811
|
|
|
147,503
|
|
|
105,902
|
|
|
21,319
|
|
|
317,535
|
|
|
Within
One
Year
|
|
After
1 But
Within
5 Years
|
|
After
5 But
Within
10 Years
|
|
After
10 Years
|
|
Total
|
|||||
U.S. Government & Agency Obligations
|
1.38
|
%
|
|
1.98
|
%
|
|
—
|
%
|
|
—
|
%
|
|
1.44
|
%
|
State and Municipal Obligations
|
4.28
|
|
|
6.20
|
|
|
—
|
|
|
6.77
|
|
|
6.11
|
|
Mortgage-Backed Securities
|
3.75
|
|
|
2.29
|
|
|
2.74
|
|
|
2.74
|
|
|
2.50
|
|
Corporate and Other Debt Securities
|
—
|
|
|
—
|
|
|
—
|
|
|
5.55
|
|
|
5.55
|
|
Total
|
1.43
|
|
|
2.29
|
|
|
2.74
|
|
|
2.96
|
|
|
2.37
|
|
|
December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
State and Municipal Obligations
|
$
|
235,782
|
|
|
$
|
275,530
|
|
|
$
|
268,892
|
|
Mortgage Backed Securities - Residential
|
47,694
|
|
|
60,377
|
|
|
75,535
|
|
|||
Corporate and Other Debt Securities
|
—
|
|
|
—
|
|
|
1,000
|
|
|||
Total
|
$
|
283,476
|
|
|
$
|
335,907
|
|
|
$
|
345,427
|
|
|
Within
One Year
|
|
After 1 But
Within 5 Years
|
|
After 5 But
Within 10 Years
|
|
After
10 Years
|
|
Total
|
||||||||||
State and Municipal Obligations
|
$
|
27,426
|
|
|
$
|
93,495
|
|
|
$
|
112,499
|
|
|
$
|
2,362
|
|
|
$
|
235,782
|
|
Mortgage Backed Securities - Residential
|
—
|
|
|
47,694
|
|
|
—
|
|
|
—
|
|
|
47,694
|
|
|||||
Total
|
$
|
27,426
|
|
|
$
|
141,189
|
|
|
$
|
112,499
|
|
|
$
|
2,362
|
|
|
$
|
283,476
|
|
|
Within
One Year
|
|
After 1 But
Within 5 Years
|
|
After 5 But
Within 10 Years
|
|
After
10 Years
|
|
Total
|
|||||
State and Municipal Obligations
|
3.13
|
%
|
|
2.70
|
%
|
|
2.40
|
%
|
|
3.60
|
%
|
|
2.62
|
%
|
Mortgage Backed Securities - Residential
|
—
|
|
|
2.39
|
|
|
—
|
|
|
—
|
|
|
2.39
|
%
|
Total
|
3.13
|
%
|
|
2.60
|
%
|
|
2.40
|
%
|
|
3.60
|
%
|
|
2.58
|
%
|
Equity Securities
|
||||
|
|
|
||
December 31, 2018
|
|
|
||
Equity Securities, at Fair Value
|
|
$
|
1,774
|
|
|
|
|
|
December 31,
|
||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||||
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
||||||||||
Commercial
|
$
|
136,890
|
|
|
6
|
|
$
|
129,249
|
|
|
7
|
|
$
|
105,155
|
|
|
6
|
|
$
|
102,587
|
|
|
7
|
|
$
|
99,511
|
|
|
7
|
Commercial Real Estate
|
484,562
|
|
|
22
|
|
444,248
|
|
|
23
|
|
431,646
|
|
|
25
|
|
384,939
|
|
|
24
|
|
340,112
|
|
|
24
|
|||||
Consumer
|
719,510
|
|
|
33
|
|
602,827
|
|
|
31
|
|
537,361
|
|
|
30
|
|
464,523
|
|
|
31
|
|
437,041
|
|
|
31
|
|||||
Residential Real Estate
|
855,253
|
|
|
39
|
|
774,446
|
|
|
39
|
|
679,106
|
|
|
39
|
|
621,903
|
|
|
38
|
|
536,604
|
|
|
38
|
|||||
Total Loans
|
2,196,215
|
|
|
100
|
|
1,950,770
|
|
|
100
|
|
1,753,268
|
|
|
100
|
|
1,573,952
|
|
|
100
|
|
1,413,268
|
|
|
100
|
|||||
Allowance for Loan Losses
|
(20,196
|
)
|
|
|
|
(18,586
|
)
|
|
|
|
(17,012
|
)
|
|
|
|
(16,038
|
)
|
|
|
|
(15,570
|
)
|
|
|
|||||
Total Loans, Net
|
$
|
2,176,019
|
|
|
|
|
$
|
1,932,184
|
|
|
|
|
$
|
1,736,256
|
|
|
|
|
$
|
1,557,914
|
|
|
|
|
$
|
1,397,698
|
|
|
|
|
Quarters Ended
|
||||||||||||||||||
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
3/31/2018
|
|
12/31/2017
|
||||||||||
Commercial and Commercial Real Estate
|
$
|
595,359
|
|
|
$
|
577,793
|
|
|
$
|
576,311
|
|
|
$
|
569,126
|
|
|
$
|
564,073
|
|
Consumer Loans
1
|
771,683
|
|
|
736,937
|
|
|
696,585
|
|
|
662,929
|
|
|
643,562
|
|
|||||
Residential Real Estate
|
661,423
|
|
|
640,277
|
|
|
616,519
|
|
|
600,076
|
|
|
584,981
|
|
|||||
Home Equity
|
131,969
|
|
|
134,644
|
|
|
137,182
|
|
|
139,109
|
|
|
137,975
|
|
|||||
Total Loans
|
$
|
2,160,434
|
|
|
$
|
2,089,651
|
|
|
$
|
2,026,597
|
|
|
$
|
1,971,240
|
|
|
$
|
1,930,591
|
|
|
Quarters Ended
|
|||||||||||||
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
3/31/2018
|
|
12/31/2017
|
|||||
Commercial and Commercial Real Estate
|
27.6
|
%
|
|
27.7
|
%
|
|
28.4
|
%
|
|
28.9
|
%
|
|
29.2
|
%
|
Consumer Loans
1
|
35.7
|
|
|
35.2
|
|
|
34.3
|
|
|
33.5
|
|
|
33.4
|
|
Residential Real Estate
|
30.6
|
|
|
30.7
|
|
|
30.5
|
|
|
30.5
|
|
|
30.3
|
|
Home Equity
|
6.1
|
|
|
6.4
|
|
|
6.8
|
|
|
7.1
|
|
|
7.1
|
|
Total Loans
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Quarters Ended
|
|||||||||||||
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
3/31/2018
|
|
12/31/2017
|
|||||
Commercial and Commercial Real Estate
|
4.50
|
%
|
|
4.42
|
%
|
|
4.47
|
%
|
|
4.38
|
%
|
|
4.36
|
%
|
Consumer Loans
1
|
3.64
|
|
|
3.52
|
|
|
3.44
|
|
|
3.34
|
|
|
3.29
|
|
Residential Real Estate
|
4.09
|
|
|
4.05
|
|
|
4.06
|
|
|
4.09
|
|
|
3.99
|
|
Home Equity
|
4.43
|
|
|
4.13
|
|
|
3.93
|
|
|
3.70
|
|
|
3.57
|
|
Total Loans
|
4.05
|
%
|
|
3.97
|
%
|
|
3.96
|
%
|
|
3.90
|
%
|
|
3.83
|
%
|
|
Within
1 Year
|
|
After 1
But Within
5 Years
|
|
After
5 Years
|
|
Total
|
||||||||
Commercial
|
$
|
22,615
|
|
|
$
|
74,614
|
|
|
$
|
39,661
|
|
|
$
|
136,890
|
|
Commercial Real Estate - Construction
|
2,019
|
|
|
27,633
|
|
|
9,091
|
|
|
38,743
|
|
||||
Total
|
$
|
24,634
|
|
|
$
|
102,247
|
|
|
$
|
48,752
|
|
|
$
|
175,633
|
|
Fixed Interest Rates
|
$
|
3,840
|
|
|
$
|
43,941
|
|
|
$
|
27,219
|
|
|
$
|
75,000
|
|
Variable Interest Rates
|
20,794
|
|
|
58,306
|
|
|
21,533
|
|
|
100,633
|
|
||||
Total
|
$
|
24,634
|
|
|
$
|
102,247
|
|
|
$
|
48,752
|
|
|
$
|
175,633
|
|
Schedule of Changes in OREO
(Dollars In Thousands)
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Balance at Beginning of Year
|
$
|
1,738
|
|
|
$
|
1,585
|
|
|
$
|
1,878
|
|
|
$
|
312
|
|
|
$
|
81
|
|
Properties Acquired Through Foreclosure
|
47
|
|
|
778
|
|
|
1,009
|
|
|
1,889
|
|
|
469
|
|
|||||
Transfer of Bank Property
|
—
|
|
|
—
|
|
|
—
|
|
|
270
|
|
|
—
|
|
|||||
Subsequent Write-downs to Fair Value
|
(195
|
)
|
|
(160
|
)
|
|
(162
|
)
|
|
(9
|
)
|
|
—
|
|
|||||
Sales
|
(460
|
)
|
|
(465
|
)
|
|
(1,140
|
)
|
|
(584
|
)
|
|
(238
|
)
|
|||||
Balance at End of Year
|
$
|
1,130
|
|
|
$
|
1,738
|
|
|
$
|
1,585
|
|
|
$
|
1,878
|
|
|
$
|
312
|
|
Number of Properties, Beginning of Year
|
6
|
|
|
5
|
|
|
6
|
|
|
1
|
|
|
2
|
|
|||||
Properties Acquired During the Year
|
1
|
|
|
4
|
|
|
3
|
|
|
8
|
|
|
2
|
|
|||||
Properties Sold During the Year
|
(4
|
)
|
|
(3
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|||||
Number of Properties, End of Year
|
3
|
|
|
6
|
|
|
5
|
|
|
6
|
|
|
1
|
|
•
|
Charge-offs and Recoveries by loan type
|
•
|
Factors that led to the amount of the Provision for Loan Losses
|
•
|
Allocation of the Allowance for Loan Losses by loan type
|
|
Years Ended December 31,
|
|||||||||||||||||||
|
12/31/2018
|
|
12/31/2017
|
|
12/31/2016
|
|||||||||||||||
|
Average
Balance
|
|
Rate
|
|
Average
Balance
|
|
Rate
|
|
Average
Balance
|
|
Rate
|
|||||||||
Demand Deposits
|
$
|
460,355
|
|
|
—
|
%
|
|
$
|
421,061
|
|
|
—
|
%
|
|
$
|
366,956
|
|
|
—
|
%
|
Interest-Bearing Checking Accounts
|
849,626
|
|
|
0.19
|
%
|
|
907,113
|
|
|
0.17
|
|
|
912,461
|
|
|
0.14
|
|
|||
Savings Deposits
|
753,198
|
|
|
0.46
|
%
|
|
685,782
|
|
|
0.20
|
|
|
616,208
|
|
|
0.15
|
|
|||
Time Deposits of $250,000 or More
|
78,159
|
|
|
1.51
|
%
|
|
32,089
|
|
|
0.88
|
|
|
69,489
|
|
|
0.65
|
|
|||
Other Time Deposits
|
173,151
|
|
|
0.82
|
%
|
|
165,778
|
|
|
0.57
|
|
|
129,084
|
|
|
0.51
|
|
|||
Total Deposits
|
$
|
2,314,489
|
|
|
0.33
|
%
|
|
$
|
2,211,823
|
|
|
0.19
|
|
|
$
|
2,094,198
|
|
|
0.16
|
|
|
Quarters Ended
|
||||||||||||||||||
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
3/31/2018
|
|
12/31/2017
|
||||||||||
Demand Deposits
|
$
|
473,170
|
|
|
$
|
483,089
|
|
|
$
|
444,854
|
|
|
$
|
439,688
|
|
|
$
|
441,761
|
|
Interest-Bearing Checking Accounts
|
817,788
|
|
|
801,193
|
|
|
866,996
|
|
|
914,116
|
|
|
945,414
|
|
|||||
Savings Deposits
|
793,299
|
|
|
744,808
|
|
|
750,352
|
|
|
723,660
|
|
|
701,694
|
|
|||||
Time Deposits of $250,000 or More
|
76,640
|
|
|
75,888
|
|
|
96,580
|
|
|
63,406
|
|
|
32,430
|
|
|||||
Other Time Deposits
|
186,334
|
|
|
174,731
|
|
|
166,420
|
|
|
164,866
|
|
|
162,907
|
|
|||||
Total Deposits
|
$
|
2,347,231
|
|
|
$
|
2,279,709
|
|
|
$
|
2,325,202
|
|
|
$
|
2,305,736
|
|
|
$
|
2,284,206
|
|
Percentage of Total Quarterly Average Deposits
|
Quarters Ended
|
|||||||||||||
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
3/31/2018
|
|
12/31/2017
|
|||||
Demand Deposits
|
20.2
|
%
|
|
21.2
|
%
|
|
19.1
|
%
|
|
19.1
|
%
|
|
19.3
|
%
|
Interest-Bearing Checking Accounts
|
34.8
|
|
|
35.1
|
|
|
37.3
|
|
|
39.6
|
|
|
41.5
|
|
Savings Deposits
|
33.8
|
|
|
32.7
|
|
|
32.2
|
|
|
31.4
|
|
|
30.7
|
|
Time Deposits of $250,000 or More
|
3.3
|
|
|
3.3
|
|
|
4.2
|
|
|
2.7
|
|
|
1.4
|
|
Other Time Deposits
|
7.9
|
|
|
7.7
|
|
|
7.2
|
|
|
7.2
|
|
|
7.1
|
|
Total Deposits
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Quarterly Cost of Deposits
|
Quarters Ended
|
|||||||||||||
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
3/31/2018
|
|
12/31/2017
|
|||||
Demand Deposits
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Interest-Bearing Checking Accounts
|
0.22
|
%
|
|
0.19
|
|
|
0.18
|
|
|
0.17
|
|
|
0.18
|
|
Savings Deposits
|
0.66
|
%
|
|
0.48
|
|
|
0.38
|
|
|
0.29
|
|
|
0.23
|
|
Time Deposits of $250,000 or More
|
1.81
|
%
|
|
1.57
|
|
|
1.36
|
|
|
1.30
|
|
|
1.17
|
|
Other Time Deposits
|
1.08
|
%
|
|
0.84
|
|
|
0.68
|
|
|
0.64
|
|
|
0.60
|
|
Total Deposits
|
0.45
|
%
|
|
0.34
|
|
|
0.29
|
|
|
0.24
|
|
|
0.20
|
|
Maturing in:
|
|
||
Under Three Months
|
$
|
27,307
|
|
Three to Six Months
|
15,781
|
|
|
Six to Twelve Months
|
15,929
|
|
|
2020
|
11,609
|
|
|
2021
|
2,685
|
|
|
2022
|
—
|
|
|
2023
|
272
|
|
|
Later
|
—
|
|
|
Total
|
$
|
73,583
|
|
|
12/31/2018
|
|
12/31/2017
|
|
12/31/2016
|
||||||
Overnight Advances from the FHLBNY, Federal Funds Purchased
and Securities Sold Under Agreements to Repurchase:
|
|
|
|
|
|
||||||
Balance at December 31
|
$
|
288,659
|
|
|
$
|
169,966
|
|
|
$
|
158,836
|
|
Maximum Month-End Balance
|
288,659
|
|
|
198,382
|
|
|
158,836
|
|
|||
Average Balance During the Year
|
192,047
|
|
|
140,808
|
|
|
94,103
|
|
|||
Average Rate During the Year
|
1.55
|
%
|
|
0.81
|
%
|
|
0.42
|
%
|
|||
Rate at December 31
|
2.13
|
%
|
|
0.98
|
%
|
|
0.59
|
%
|
Capital Ratios
:
|
Arrow
|
|
GFNB
|
|
SNB
|
Minimum
Required
Ratio
|
Tier 1 Leverage Ratio
|
9.6%
|
|
9.1%
|
|
9.6%
|
4.0%
|
Common Equity Tier 1 Capital Ratio
|
12.9%
|
|
13.4%
|
|
13.2%
|
4.5%
|
Tier 1 Risk-Based Capital Ratio
|
13.9%
|
|
13.4%
|
|
13.2%
|
6.0%
|
Total Risk-Based Capital Ratio
|
14.9%
|
|
14.4%
|
|
14.2%
|
8.0%
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligation
|
Total
|
|
Less Than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than
5 Years
|
||||||||||
Long-Term Debt Obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Federal Home Loan Bank Advances
1
|
$
|
45,000
|
|
|
$
|
20,000
|
|
|
$
|
25,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Junior Subordinated Obligations
Issued to Unconsolidated
Subsidiary Trusts
2
|
20,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,000
|
|
|||||
Operating Lease Obligations
3
|
5,399
|
|
|
857
|
|
|
1,123
|
|
|
643
|
|
|
2,776
|
|
|||||
Obligations under Retirement Plans
4
|
39,250
|
|
|
3,250
|
|
|
7,386
|
|
|
7,557
|
|
|
21,057
|
|
|||||
Total
|
$
|
109,649
|
|
|
$
|
24,107
|
|
|
$
|
33,509
|
|
|
$
|
8,200
|
|
|
$
|
43,833
|
|
|
For the Quarters Ended
December 31,
|
||||||
|
12/31/2018
|
|
12/31/2017
|
||||
Interest and Dividend Income
|
$
|
26,000
|
|
|
$
|
22,135
|
|
Interest Expense
|
4,343
|
|
|
1,821
|
|
||
Net Interest Income
|
21,657
|
|
|
20,314
|
|
||
Provision for Loan Losses
|
646
|
|
|
1,157
|
|
||
Net Interest Income after Provision for Loan Losses
|
21,011
|
|
|
19,157
|
|
||
Noninterest Income
|
6,799
|
|
|
6,752
|
|
||
Noninterest Expense
|
16,881
|
|
|
16,043
|
|
||
Income Before Provision for Income Taxes
|
10,929
|
|
|
9,866
|
|
||
Provision for Income Taxes
|
2,171
|
|
|
1,795
|
|
||
Net Income
|
$
|
8,758
|
|
|
$
|
8,071
|
|
SHARE AND PER SHARE DATA:
|
|
|
|
||||
Weighted Average Number of Shares Outstanding:
|
|
|
|
||||
Basic
|
14,451
|
|
|
14,322
|
|
||
Diluted
|
14,514
|
|
|
14,426
|
|
||
Basic Earnings Per Common Share
|
$
|
0.61
|
|
|
0.56
|
|
|
Diluted Earnings Per Common Share
|
0.60
|
|
|
0.56
|
|
||
Cash Dividends Per Common Share
|
0.260
|
|
|
0.243
|
|
||
AVERAGE BALANCES:
|
|
|
|
||||
Assets
|
$
|
2,954,031
|
|
|
$
|
2,744,180
|
|
Earning Assets
|
2,831,438
|
|
|
2,617,680
|
|
||
Loans
|
2,160,435
|
|
|
1,930,590
|
|
||
Deposits
|
2,347,231
|
|
|
2,284,206
|
|
||
Stockholders’ Equity
|
268,503
|
|
|
247,253
|
|
||
SELECTED RATIOS (Annualized):
|
|
|
|
||||
Return on Average Assets
|
1.18
|
%
|
|
1.17
|
%
|
||
Return on Average Equity
|
12.94
|
%
|
|
12.95
|
%
|
||
Net Interest Margin
|
3.03
|
%
|
|
3.08
|
%
|
||
Net Charge-offs to Average Loans
|
0.08
|
%
|
|
0.05
|
%
|
||
Provision for Loan Losses to Average Loans
|
0.12
|
%
|
|
0.24
|
%
|
|
2018
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Total Interest and Dividend Income
|
$
|
22,418
|
|
|
$
|
23,590
|
|
|
$
|
24,495
|
|
|
$
|
26,000
|
|
Net Interest Income
|
20,402
|
|
|
20,962
|
|
|
20,997
|
|
|
21,657
|
|
||||
Provision for Loan Losses
|
746
|
|
|
629
|
|
|
586
|
|
|
646
|
|
||||
Net Securities Gains (Losses)
|
18
|
|
|
223
|
|
|
114
|
|
|
(142
|
)
|
||||
Income Before Provision for Income Taxes
|
10,589
|
|
|
12,052
|
|
|
11,735
|
|
|
10,929
|
|
||||
Net Income
|
8,531
|
|
|
9,730
|
|
|
9,260
|
|
|
8,758
|
|
||||
Basic Earnings Per Common Share
|
0.59
|
|
|
0.68
|
|
|
0.64
|
|
|
0.61
|
|
||||
Diluted Earnings Per Common Share
|
0.59
|
|
|
0.67
|
|
|
0.64
|
|
|
0.60
|
|
|
2017
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Total Interest and Dividend Income
|
$
|
19,997
|
|
|
$
|
20,926
|
|
|
$
|
21,599
|
|
|
$
|
22,135
|
|
Net Interest Income
|
18,461
|
|
|
19,227
|
|
|
19,650
|
|
|
20,314
|
|
||||
Provision for Loan Losses
|
358
|
|
|
422
|
|
|
800
|
|
|
1,157
|
|
||||
Net Securities Gains (Losses)
|
—
|
|
|
—
|
|
|
10
|
|
|
(458
|
)
|
||||
Income Before Provision for Income Taxes
|
9,323
|
|
|
10,225
|
|
|
10,443
|
|
|
9,864
|
|
||||
Net Income
|
6,631
|
|
|
7,208
|
|
|
7,416
|
|
|
8,071
|
|
||||
Basic Earnings Per Common Share
|
0.48
|
|
|
0.50
|
|
|
0.51
|
|
|
0.56
|
|
||||
Diluted Earnings Per Common Share
|
0.47
|
|
|
0.50
|
|
|
0.51
|
|
|
0.56
|
|
|
Change in Interest Rate
|
|
Policy Limit
|
||
|
+ 200 basis points
|
|
- 100 basis points
|
|
|
Calculated change in Net Interest Income - Year 1
|
(3.29)%
|
|
0.70%
|
|
(10.00)%
|
Calculated change in Net Interest Income - Year 2
|
2.81%
|
|
0.40%
|
|
(15.00)%
|
ARROW FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands, Except Share and Per Share Amounts)
|
|||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||
ASSETS
|
|
|
|
||||
Cash and Due From Banks
|
$
|
56,529
|
|
|
$
|
42,562
|
|
Interest-Bearing Deposits at Banks
|
27,710
|
|
|
30,276
|
|
||
Investment Securities:
|
|
|
|
||||
Available-for-Sale
|
317,535
|
|
|
300,200
|
|
||
Held-to-Maturity (Approximate Fair Value of $280,338 at
December 31, 2018, and $335,901 at December 31, 2017) |
283,476
|
|
|
335,907
|
|
||
Equity Securities
|
1,774
|
|
|
—
|
|
||
Other Investments
|
15,506
|
|
|
9,949
|
|
||
Loans
|
2,196,215
|
|
|
1,950,770
|
|
||
Allowance for Loan Losses
|
(20,196
|
)
|
|
(18,586
|
)
|
||
Net Loans
|
2,176,019
|
|
|
1,932,184
|
|
||
Premises and Equipment, Net
|
30,446
|
|
|
27,619
|
|
||
Goodwill
|
21,873
|
|
|
21,873
|
|
||
Other Intangible Assets, Net
|
1,852
|
|
|
2,289
|
|
||
Other Assets
|
55,614
|
|
|
57,606
|
|
||
Total Assets
|
$
|
2,988,334
|
|
|
$
|
2,760,465
|
|
LIABILITIES
|
|
|
|
||||
Noninterest-Bearing Deposits
|
$
|
472,768
|
|
|
$
|
441,945
|
|
Interest-Bearing Checking Accounts
|
790,781
|
|
|
907,315
|
|
||
Savings Deposits
|
818,048
|
|
|
694,573
|
|
||
Time Deposits over $250,000
|
73,583
|
|
|
38,147
|
|
||
Other Time Deposits
|
190,404
|
|
|
163,136
|
|
||
Total Deposits
|
2,345,584
|
|
|
2,245,116
|
|
||
Federal Funds Purchased and
Securities Sold Under Agreements to Repurchase |
54,659
|
|
|
64,966
|
|
||
Federal Home Loan Bank Overnight Advances
|
234,000
|
|
|
105,000
|
|
||
Federal Home Loan Bank Term Advances
|
45,000
|
|
|
55,000
|
|
||
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts
|
20,000
|
|
|
20,000
|
|
||
Other Liabilities
|
19,507
|
|
|
20,780
|
|
||
Total Liabilities
|
2,718,750
|
|
|
2,510,862
|
|
||
STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Preferred Stock, $5 Par Value; 1,000,000 Shares Authorized
|
—
|
|
|
—
|
|
||
Common Stock, $1 Par Value; 20,000,000 Shares Authorized
(19,035,565 Shares Issued at December 31, 2018, and 18,481,301 Shares Issued at December 31, 2017) |
19,035
|
|
|
18,481
|
|
||
Additional Paid-in Capital
|
314,533
|
|
|
290,219
|
|
||
Retained Earnings
|
29,257
|
|
|
28,818
|
|
||
Unallocated ESOP Shares (5,001 Shares at December 31, 2018, and
9,643 Shares at December 31, 2017) |
(100
|
)
|
|
(200
|
)
|
||
Accumulated Other Comprehensive Loss
|
(13,810
|
)
|
|
(8,514
|
)
|
||
Treasury Stock, at Cost (4,558,207 Shares at December 31, 2018, and
4,541,524 Shares at December 31, 2017) |
(79,331
|
)
|
|
(79,201
|
)
|
||
Total Stockholders’ Equity
|
269,584
|
|
|
249,603
|
|
||
Total Liabilities and Stockholders’ Equity
|
$
|
2,988,334
|
|
|
$
|
2,760,465
|
|
ARROW FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)
|
||||||||||||
|
|
Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
INTEREST AND DIVIDEND INCOME
|
|
|
|
|
|
|
||||||
Interest and Fees on Loans
|
|
$
|
81,647
|
|
|
$
|
70,202
|
|
|
$
|
62,823
|
|
Interest on Deposits at Banks
|
|
711
|
|
|
348
|
|
|
152
|
|
|||
Interest and Dividends on Investment Securities:
|
|
|
|
|
|
|
||||||
Fully Taxable
|
|
8,582
|
|
|
7,884
|
|
|
7,934
|
|
|||
Exempt from Federal Taxes
|
|
5,563
|
|
|
6,223
|
|
|
6,006
|
|
|||
Total Interest and Dividend Income
|
|
96,503
|
|
|
84,657
|
|
|
76,915
|
|
|||
INTEREST EXPENSE
|
|
|
|
|
|
|
||||||
Interest-Bearing Checking Accounts
|
|
1,618
|
|
|
1,510
|
|
|
1,280
|
|
|||
Savings Deposits
|
|
3,457
|
|
|
1,371
|
|
|
932
|
|
|||
Time Deposits over $250,000
|
|
1,183
|
|
|
282
|
|
|
187
|
|
|||
Other Time Deposits
|
|
1,420
|
|
|
950
|
|
|
924
|
|
|||
Federal Funds Purchased and
Securities Sold Under Agreements to Repurchase
|
|
62
|
|
|
44
|
|
|
33
|
|
|||
Federal Home Loan Bank Advances
|
|
3,779
|
|
|
2,083
|
|
|
1,340
|
|
|||
Junior Subordinated Obligations Issued to
Unconsolidated Subsidiary Trusts
|
|
966
|
|
|
766
|
|
|
660
|
|
|||
Total Interest Expense
|
|
12,485
|
|
|
7,006
|
|
|
5,356
|
|
|||
NET INTEREST INCOME
|
|
84,018
|
|
|
77,651
|
|
|
71,559
|
|
|||
Provision for Loan Losses
|
|
2,607
|
|
|
2,736
|
|
|
2,033
|
|
|||
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES
|
|
81,411
|
|
|
74,915
|
|
|
69,526
|
|
|||
NONINTEREST INCOME
|
|
|
|
|
|
|
||||||
Income From Fiduciary Activities
|
|
9,255
|
|
|
8,417
|
|
|
7,783
|
|
|||
Fees for Other Services to Customers
|
|
10,134
|
|
|
9,591
|
|
|
9,469
|
|
|||
Net (Loss) Gain on Securities Transactions
|
|
213
|
|
|
(448
|
)
|
|
(22
|
)
|
|||
Insurance Commissions
|
|
7,888
|
|
|
8,612
|
|
|
8,668
|
|
|||
Net Gain on Sales of Loans
|
|
135
|
|
|
546
|
|
|
821
|
|
|||
Other Operating Income
|
|
1,324
|
|
|
927
|
|
|
1,113
|
|
|||
Total Noninterest Income
|
|
28,949
|
|
|
27,645
|
|
|
27,832
|
|
|||
NONINTEREST EXPENSE
|
|
|
|
|
|
|
||||||
Salaries and Employee Benefits
|
|
38,788
|
|
|
37,677
|
|
|
34,637
|
|
|||
Occupancy Expenses, Net
|
|
9,787
|
|
|
9,560
|
|
|
9,402
|
|
|||
FDIC Assessments
|
|
881
|
|
|
891
|
|
|
1,076
|
|
|||
Other Operating Expense
|
|
15,599
|
|
|
14,577
|
|
|
14,494
|
|
|||
Total Noninterest Expense
|
|
65,055
|
|
|
62,705
|
|
|
59,609
|
|
|||
INCOME BEFORE PROVISION FOR INCOME TAXES
|
|
45,305
|
|
|
39,855
|
|
|
37,749
|
|
|||
Provision for Income Taxes
|
|
9,026
|
|
|
10,529
|
|
|
11,215
|
|
|||
NET INCOME
|
|
$
|
36,279
|
|
|
$
|
29,326
|
|
|
$
|
26,534
|
|
Average Shares Outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
14,408
|
|
|
14,310
|
|
|
14,206
|
|
|||
Diluted
|
|
14,488
|
|
|
14,406
|
|
|
14,297
|
|
|||
Per Common Share:
|
|
|
|
|
|
|
||||||
Basic Earnings
|
|
$
|
2.52
|
|
|
$
|
2.05
|
|
|
$
|
1.87
|
|
Diluted Earnings
|
|
2.50
|
|
|
2.04
|
|
|
1.86
|
|
ARROW FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars In Thousands)
|
|||||||||||
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net Income
|
$
|
36,279
|
|
|
$
|
29,326
|
|
|
$
|
26,534
|
|
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
||||||
Unrealized Net Securities Holding Losses Arising During the Year
|
(2,116
|
)
|
|
(940
|
)
|
|
(1,024
|
)
|
|||
Reclassification Adjustment for Net Securities Losses Included in Net Income
|
—
|
|
|
337
|
|
|
13
|
|
|||
Net Retirement Plan (Loss) Gain
|
(2,833
|
)
|
|
214
|
|
|
1,721
|
|
|||
Net Retirement Plan Prior Service (Cost) Credit
|
(338
|
)
|
|
—
|
|
|
—
|
|
|||
Amortization of Net Retirement Plan Actuarial Loss
|
242
|
|
|
362
|
|
|
435
|
|
|||
Amortization of Net Retirement Plan Prior Service (Credit) Cost
|
80
|
|
|
(8
|
)
|
|
(7
|
)
|
|||
Other Comprehensive Income (Loss)
|
(4,965
|
)
|
|
(35
|
)
|
|
1,138
|
|
|||
Comprehensive Income
|
$
|
31,314
|
|
|
$
|
29,291
|
|
|
$
|
27,672
|
|
|
|||||||||||||||||||||||||||
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Unallocated ESOP
Shares
|
|
Accumul
ated
Other Com
prehensive
Income
(Loss)
|
|
Treasury
Stock
|
|
Total
|
||||||||||||||
Balance at December 31, 2015
|
$
|
17,421
|
|
|
$
|
250,680
|
|
|
$
|
32,139
|
|
|
$
|
(1,100
|
)
|
|
$
|
(7,972
|
)
|
|
$
|
(77,197
|
)
|
|
$
|
213,971
|
|
Net Income
|
—
|
|
|
—
|
|
|
26,534
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,534
|
|
|||||||
Other Comprehensive Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,138
|
|
|
—
|
|
|
1,138
|
|
|||||||
3% Stock Dividend (522,425 Shares)
|
522
|
|
|
16,415
|
|
|
(16,937
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Cash Dividends Paid, $.92 per Share
1
|
—
|
|
|
—
|
|
|
(13,092
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,092
|
)
|
|||||||
Shares Issued for Stock Option Exercises, net
(109,651 Shares) |
—
|
|
|
1,265
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,139
|
|
|
2,404
|
|
|||||||
Shares Issued Under the Directors’ Stock
Plan (6,005 Shares) |
—
|
|
|
138
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
67
|
|
|
205
|
|
|||||||
Shares Issued Under the Employee Stock
Purchase Plan (17,113 Shares) |
—
|
|
|
318
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
175
|
|
|
493
|
|
|||||||
Shares Issued for Dividend Reinvestment
Plans (55,432 Shares) |
—
|
|
|
1,167
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
576
|
|
|
1,743
|
|
|||||||
Stock-Based Compensation Expense
|
—
|
|
|
287
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
287
|
|
|||||||
Tax Benefit for Exercises of
Stock Options |
—
|
|
|
188
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
188
|
|
|||||||
Purchase of Treasury Stock
(72,723 Shares) |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,141
|
)
|
|
(2,141
|
)
|
|||||||
Allocation of ESOP Stock (36,927 Shares)
|
—
|
|
|
422
|
|
|
—
|
|
|
700
|
|
|
—
|
|
|
—
|
|
|
1,122
|
|
|||||||
Balance at December 31, 2016
|
$
|
17,943
|
|
|
$
|
270,880
|
|
|
$
|
28,644
|
|
|
$
|
(400
|
)
|
|
$
|
(6,834
|
)
|
|
$
|
(77,381
|
)
|
|
$
|
232,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 31, 2016
|
$
|
17,943
|
|
|
$
|
270,880
|
|
|
$
|
28,644
|
|
|
$
|
(400
|
)
|
|
$
|
(6,834
|
)
|
|
$
|
(77,381
|
)
|
|
$
|
232,852
|
|
Net Income
|
—
|
|
|
—
|
|
|
29,326
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,326
|
|
|||||||
Other Comprehensive (Loss) Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
(35
|
)
|
|||||||
Reclassification due to the adoption of ASU
No. 2018-02
|
—
|
|
|
—
|
|
|
1,645
|
|
|
—
|
|
|
(1,645
|
)
|
|
—
|
|
|
—
|
|
|||||||
3% Stock Dividend (538,100 Shares)
|
538
|
|
|
16,660
|
|
|
(17,198
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Cash Dividends Paid, $.95 per Share
1
|
—
|
|
|
—
|
|
|
(13,599
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,599
|
)
|
|||||||
Shares Issued for Stock Option Exercises, net
(57,756 Shares)
|
—
|
|
|
544
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
646
|
|
|
1,190
|
|
|||||||
Shares Issued Under the Directors’ Stock
Plan (6,828 Shares)
|
—
|
|
|
160
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|
233
|
|
|||||||
Shares Issued Under the Employee Stock
Purchase Plan (15,028 Shares)
|
—
|
|
|
331
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
165
|
|
|
496
|
|
|||||||
Shares Issued for Dividend Reinvestment
Plans (49,605 Shares) |
—
|
|
|
1,140
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
544
|
|
|
1,684
|
|
|||||||
Stock-Based Compensation Expense
|
—
|
|
|
351
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
351
|
|
|||||||
Purchase of Treasury Stock
(96,496 Shares)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,248
|
)
|
|
(3,248
|
)
|
|||||||
Allocation of ESOP Stock (10,407 Shares)
|
—
|
|
|
153
|
|
|
—
|
|
|
200
|
|
|
—
|
|
|
—
|
|
|
353
|
|
|||||||
Balance at December 31, 2017
|
$
|
18,481
|
|
|
$
|
290,219
|
|
|
$
|
28,818
|
|
|
$
|
(200
|
)
|
|
$
|
(8,514
|
)
|
|
$
|
(79,201
|
)
|
|
$
|
249,603
|
|
ARROW FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY, Continued
(Dollars In Thousands, Except Share and Per Share Amounts)
|
|||||||||||||||||||||||||||
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Unallocated ESOP
Shares
|
|
Accumul
ated
Other Com
prehensive
Income
(Loss)
|
|
Treasury
Stock
|
|
Total
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 31, 2017
|
$
|
18,481
|
|
|
$
|
290,219
|
|
|
$
|
28,818
|
|
|
$
|
(200
|
)
|
|
$
|
(8,514
|
)
|
|
$
|
(79,201
|
)
|
|
$
|
249,603
|
|
Net Income
|
—
|
|
|
—
|
|
|
36,279
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,279
|
|
|||||||
Other Comprehensive Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,965
|
)
|
|
—
|
|
|
(4,965
|
)
|
|||||||
Impact of the Adoption of ASU 2014-09
|
—
|
|
|
—
|
|
|
(102
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(102
|
)
|
|||||||
Impact of the Adoption of ASU 2016-01
|
—
|
|
|
—
|
|
|
331
|
|
|
—
|
|
|
(331
|
)
|
|
—
|
|
|
—
|
|
|||||||
3% Stock Dividend (554,264 Shares)
2
|
554
|
|
|
21,126
|
|
|
(21,680
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Cash Dividends Paid, $1.00 per Share
1
|
—
|
|
|
—
|
|
|
(14,389
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,389
|
)
|
|||||||
Shares Issued for Stock Option Exercises, net
(105,055 Shares) |
—
|
|
|
1,079
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,176
|
|
|
2,255
|
|
|||||||
Shares Issued Under the Directors’ Stock
Plan (5,601 Shares) |
—
|
|
|
142
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63
|
|
|
205
|
|
|||||||
Shares Issued Under the Employee Stock
Purchase Plan (14,832 Shares) |
—
|
|
|
340
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
165
|
|
|
505
|
|
|||||||
Shares Issued for Dividend Reinvestment
Plans (49,714 Shares) |
—
|
|
|
1,197
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
564
|
|
|
1,761
|
|
|||||||
Stock-Based Compensation Expense
|
—
|
|
|
356
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
356
|
|
|||||||
Purchase of Treasury Stock
(58,527 Shares) |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,098
|
)
|
|
(2,098
|
)
|
|||||||
Allocation of ESOP Stock (4,931 Shares)
|
—
|
|
|
74
|
|
|
—
|
|
|
100
|
|
|
—
|
|
|
—
|
|
|
174
|
|
|||||||
Balance at December 31, 2018
|
$
|
19,035
|
|
|
$
|
314,533
|
|
|
$
|
29,257
|
|
|
$
|
(100
|
)
|
|
$
|
(13,810
|
)
|
|
$
|
(79,331
|
)
|
|
$
|
269,584
|
|
|
December 31,
|
||||||||||
Cash Flows from Operating Activities:
|
2018
|
|
2017
|
|
2016
|
||||||
Net Income
|
$
|
36,279
|
|
|
$
|
29,326
|
|
|
$
|
26,534
|
|
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
|
|
|
|
|
|
||||||
Provision for Loan Losses
|
2,607
|
|
|
2,736
|
|
|
2,033
|
|
|||
Depreciation and Amortization
|
4,751
|
|
|
5,398
|
|
|
5,940
|
|
|||
Allocation of ESOP Stock
|
174
|
|
|
353
|
|
|
1,122
|
|
|||
Gains on the Sale of Securities Available-for-Sale
|
—
|
|
|
(134
|
)
|
|
(317
|
)
|
|||
Losses on the Sale of Securities Available-for-Sale
|
—
|
|
|
582
|
|
|
339
|
|
|||
Net Gain on Equity Securities
|
(213
|
)
|
|
—
|
|
|
—
|
|
|||
Loans Originated and Held-for-Sale
|
(4,179
|
)
|
|
(17,468
|
)
|
|
(23,787
|
)
|
|||
Proceeds from the Sale of Loans Held-for-Sale
|
4,426
|
|
|
18,171
|
|
|
24,422
|
|
|||
Net Gains on the Sale of Loans
|
(135
|
)
|
|
(546
|
)
|
|
(821
|
)
|
|||
Net Losses on the Sale or Write-down of Premises and Equipment,
Other Real Estate Owned and Repossessed Assets
|
159
|
|
|
210
|
|
|
232
|
|
|||
Contributions to Pension & Postretirement Plans
|
(744
|
)
|
|
(792
|
)
|
|
(690
|
)
|
|||
Deferred Income Tax Benefit
|
(92
|
)
|
|
(1,530
|
)
|
|
(283
|
)
|
|||
Shares Issued Under the Directors
’
Stock Plan
|
205
|
|
|
233
|
|
|
205
|
|
|||
Stock-Based Compensation Expense
|
356
|
|
|
351
|
|
|
287
|
|
|||
Tax Benefit from Exercise of Stock Options
|
240
|
|
|
112
|
|
|
—
|
|
|||
Net (Increase) in Other Assets
|
(1,182
|
)
|
|
(157
|
)
|
|
(1,598
|
)
|
|||
Net Increase (Decrease) in Other Liabilities
|
(676
|
)
|
|
982
|
|
|
1,077
|
|
|||
Net Cash Provided By Operating Activities
|
41,976
|
|
|
37,827
|
|
|
34,695
|
|
|||
Cash Flows from Investing Activities:
|
|
|
|
|
|
||||||
Proceeds from the Sale of Securities Available-for-Sale
|
—
|
|
|
107,175
|
|
|
97,930
|
|
|||
Proceeds from the Maturities and Calls of Securities Available-for-Sale
|
61,807
|
|
|
53,863
|
|
|
88,719
|
|
|||
Purchases of Securities Available-for-Sale
|
(84,746
|
)
|
|
(117,262
|
)
|
|
(134,950
|
)
|
|||
Proceeds from the Maturities and Calls of Securities Held-to-Maturity
|
58,978
|
|
|
49,244
|
|
|
56,461
|
|
|||
Purchases of Securities Held-to-Maturity
|
(7,506
|
)
|
|
(40,851
|
)
|
|
(82,433
|
)
|
|||
Net Increase in Loans
|
(247,569
|
)
|
|
(200,600
|
)
|
|
(182,065
|
)
|
|||
Proceeds from the Sales of Premises and Equipment, Other
Real Estate Owned and Repossessed Assets
|
1,828
|
|
|
1,408
|
|
|
1,991
|
|
|||
Purchase of Premises and Equipment
|
(5,103
|
)
|
|
(2,602
|
)
|
|
(1,441
|
)
|
|||
Proceeds from the Sale of a Subsidiary, Net
|
98
|
|
|
96
|
|
|
72
|
|
|||
Net (Increase) Decrease in Federal Home Loan Bank Stock
|
(5,557
|
)
|
|
963
|
|
|
(2,073
|
)
|
|||
Net Cash Used In Investing Activities
|
(227,770
|
)
|
|
(148,566
|
)
|
|
(157,789
|
)
|
|||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||||||
Net Increase in Deposits
|
100,468
|
|
|
128,569
|
|
|
86,123
|
|
|||
Net Increase (Decrease) in Short-Term Federal Home Loan Bank Borrowings
|
129,000
|
|
|
(18,000
|
)
|
|
41,000
|
|
|||
Net Increase (Decrease) in Short-Term Borrowings
|
(10,307
|
)
|
|
29,130
|
|
|
12,663
|
|
|||
Repayments of Federal Home Loan Bank Advances
|
(10,000
|
)
|
|
—
|
|
|
—
|
|
|||
Purchase of Treasury Stock
|
(2,098
|
)
|
|
(3,248
|
)
|
|
(2,141
|
)
|
|||
Shares Issued for Stock Option Exercises, net
|
2,255
|
|
|
1,190
|
|
|
2,404
|
|
|||
Shares Issued Under the Employee Stock Purchase Plan
|
505
|
|
|
496
|
|
|
493
|
|
|||
Tax Benefit for Exercises of Stock Options
|
—
|
|
|
—
|
|
|
188
|
|
|||
Shares Issued for Dividend Reinvestment Plans
|
1,761
|
|
|
1,684
|
|
|
1,743
|
|
|||
Cash Dividends Paid
|
(14,389
|
)
|
|
(13,599
|
)
|
|
(13,092
|
)
|
|||
Net Cash Provided By Financing Activities
|
197,195
|
|
|
126,222
|
|
|
129,381
|
|
|||
Net Increase in Cash and Cash Equivalents
|
11,401
|
|
|
15,483
|
|
|
6,287
|
|
|||
Cash and Cash Equivalents at Beginning of Year
|
72,838
|
|
|
57,355
|
|
|
51,068
|
|
|||
Cash and Cash Equivalents at End of Year
|
$
|
84,239
|
|
|
$
|
72,838
|
|
|
$
|
57,355
|
|
|
|
|
|
|
|
||||||
Supplemental Disclosures to Statements of Cash Flow Information:
|
|
|
|
|
|
||||||
Interest on Deposits and Borrowings
|
$
|
12,212
|
|
|
$
|
6,957
|
|
|
$
|
5,341
|
|
Income Taxes
|
10,037
|
|
|
11,454
|
|
|
11,961
|
|
|||
Non-cash Investing and Financing Activity:
|
|
|
|
|
|
||||||
Transfer of Loans to Other Real Estate Owned and Repossessed Assets
|
1,015
|
|
|
1,779
|
|
|
1,876
|
|
Note 1:
|
RISKS AND UNCERTAINTIES
|
Note 2:
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
•
|
Changes in the volume and severity of past due, nonaccrual and adversely classified loans
|
•
|
Changes in the nature and volume of the portfolio and in the terms of loans
|
•
|
Changes in the value of the underlying collateral for collateral dependent loans
|
•
|
Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses
|
•
|
Changes in the quality of the loan review system
|
•
|
Changes in the experience, ability, and depth of lending management and other relevant staff
|
•
|
Changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio
|
•
|
The existence and effect of any concentrations of credit, and changes in the level of such concentrations
|
•
|
The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the existing portfolio or pool
|
•
|
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
|
•
|
Level 2 – Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;
|
•
|
Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
|
Note 3:
|
CASH AND CASH EQUIVALENTS (Dollars In Thousands)
(at
December 31, 2018
and
2017
)
|
|
2018
|
|
2017
|
||||
Cash and Due From Banks
|
$
|
56,529
|
|
|
$
|
42,562
|
|
Interest-Bearing Deposits at Banks
|
27,710
|
|
|
30,276
|
|
||
Total Cash and Cash Equivalents
|
$
|
84,239
|
|
|
$
|
72,838
|
|
Supplemental Information:
|
|
|
|
||||
Total required reserves, including vault cash and Federal Reserve Bank deposits
|
$
|
40,677
|
|
|
$
|
30,771
|
|
Note 4.
|
INVESTMENT SECURITIES (Dollars In Thousands)
|
Available-For-Sale Securities
|
||||||||||||||||||||
|
|
U.S. Government & Agency
Obligations
|
|
State and
Municipal
Obligations
|
|
Mortgage-
Backed
Securities
|
|
Corporate
and Other
Debt
Securities
|
|
Total
Available-
For-Sale
Securities
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-For-Sale Securities,
at Amortized Cost
|
|
$
|
47,071
|
|
|
$
|
1,193
|
|
|
$
|
273,227
|
|
|
$
|
1,000
|
|
|
$
|
322,491
|
|
Available-For-Sale Securities,
at Fair Value
|
|
46,765
|
|
|
1,195
|
|
|
268,775
|
|
|
800
|
|
|
317,535
|
|
|||||
Gross Unrealized Gains
|
|
—
|
|
|
2
|
|
|
288
|
|
|
—
|
|
|
290
|
|
|||||
Gross Unrealized Losses
|
|
306
|
|
|
—
|
|
|
4,740
|
|
|
200
|
|
|
5,246
|
|
|||||
Available-For-Sale Securities,
Pledged as Collateral,
at Fair Value
|
|
|
|
|
|
|
|
|
|
236,163
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Maturities of Debt Securities,
at Amortized Cost:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Within One Year
|
|
42,068
|
|
|
201
|
|
|
738
|
|
|
—
|
|
|
43,007
|
|
|||||
From 1 - 5 Years
|
|
5,003
|
|
|
512
|
|
|
145,554
|
|
|
—
|
|
|
151,069
|
|
|||||
From 5 - 10 Years
|
|
—
|
|
|
—
|
|
|
106,777
|
|
|
—
|
|
|
106,777
|
|
|||||
Over 10 Years
|
|
—
|
|
|
480
|
|
|
20,158
|
|
|
1,000
|
|
|
21,638
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Maturities of Debt Securities,
at Fair Value:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Within One Year
|
|
41,864
|
|
|
204
|
|
|
743
|
|
|
—
|
|
|
42,811
|
|
|||||
From 1 - 5 Years
|
|
4,901
|
|
|
511
|
|
|
142,091
|
|
|
—
|
|
|
147,503
|
|
|||||
From 5 - 10 Years
|
|
—
|
|
|
—
|
|
|
105,902
|
|
|
—
|
|
|
105,902
|
|
|||||
Over 10 Years
|
|
—
|
|
|
480
|
|
|
20,039
|
|
|
800
|
|
|
21,319
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities in a Continuous
Loss Position, at Fair Value:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Less than 12 Months
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
107,550
|
|
|
$
|
—
|
|
|
$
|
107,550
|
|
12 Months or Longer
|
|
46,765
|
|
|
—
|
|
|
124,627
|
|
|
800
|
|
|
172,192
|
|
|||||
Total
|
|
$
|
46,765
|
|
|
$
|
—
|
|
|
$
|
232,177
|
|
|
$
|
800
|
|
|
$
|
279,742
|
|
Number of Securities in a
Continuous Loss Position
|
|
10
|
|
|
—
|
|
|
86
|
|
|
1
|
|
|
97
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized Losses on
Securities in a Continuous
Loss Position:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Less than 12 Months
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
841
|
|
|
$
|
—
|
|
|
$
|
841
|
|
12 Months or Longer
|
|
306
|
|
|
—
|
|
|
3,899
|
|
|
200
|
|
|
4,405
|
|
|||||
Total
|
|
$
|
306
|
|
|
$
|
—
|
|
|
$
|
4,740
|
|
|
$
|
200
|
|
|
$
|
5,246
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Disaggregated Details:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
US Treasury Obligations,
at Amortized Cost
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
US Treasury Obligations,
at Fair Value |
|
—
|
|
|
|
|
|
|
|
|
|
|||||||||
US Agency Obligations,
at Amortized Cost |
|
47,071
|
|
|
|
|
|
|
|
|
|
|||||||||
US Agency Obligations,
at Fair Value |
|
46,765
|
|
|
|
|
|
|
|
|
|
|||||||||
US Government Agency
Securities, at Amortized Cost
|
|
|
|
|
|
$
|
72,095
|
|
|
|
|
|
||||||||
US Government Agency
Securities, at Fair Value
|
|
|
|
|
|
71,800
|
|
|
|
|
|
|||||||||
Government Sponsored Entity
Securities, at Amortized Cost
|
|
|
|
|
|
201,132
|
|
|
|
|
|
|||||||||
Government Sponsored Entity
Securities, at Fair Value |
|
|
|
|
|
196,975
|
|
|
|
|
|
Available-For-Sale Securities
|
||||||||||||||||||||||||
|
|
U.S. Government & Agency
Obligations
|
|
State and
Municipal
Obligations
|
|
Mortgage-
Backed
Securities
|
|
Corporate
and Other
Debt
Securities
|
|
Mutual Funds
and Equity
Securities
|
|
Total
Available-
For-Sale
Securities
|
||||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Available-For-Sale Securities,
at Amortized Cost
|
|
$
|
60,328
|
|
|
$
|
10,351
|
|
|
$
|
229,077
|
|
|
$
|
1,000
|
|
|
$
|
1,120
|
|
|
$
|
301,876
|
|
Available-For-Sale Securities,
at Fair Value
|
|
59,894
|
|
|
10,349
|
|
|
227,596
|
|
|
800
|
|
|
1,561
|
|
|
300,200
|
|
||||||
Gross Unrealized Gains
|
|
—
|
|
|
9
|
|
|
485
|
|
|
—
|
|
|
441
|
|
|
935
|
|
||||||
Gross Unrealized Losses
|
|
434
|
|
|
11
|
|
|
1,966
|
|
|
200
|
|
|
—
|
|
|
2,611
|
|
||||||
Available-For-Sale Securities,
Pledged as Collateral,
at Fair Value
|
|
|
|
|
|
|
|
|
|
|
|
183,052
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Securities in a Continuous
Loss Position, at Fair Value:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Less than 12 Months
|
|
$
|
20,348
|
|
|
$
|
8,498
|
|
|
$
|
70,930
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
99,776
|
|
12 Months or Longer
|
|
39,546
|
|
|
—
|
|
|
80,759
|
|
|
800
|
|
|
—
|
|
|
121,105
|
|
||||||
Total
|
|
$
|
59,894
|
|
|
$
|
8,498
|
|
|
$
|
151,689
|
|
|
$
|
800
|
|
|
$
|
—
|
|
|
$
|
220,881
|
|
Number of Securities in a
Continuous Loss Position
|
|
14
|
|
|
36
|
|
|
55
|
|
|
1
|
|
|
—
|
|
|
106
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized Losses on
Securities in a Continuous
Loss Position:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Less than 12 Months
|
|
$
|
172
|
|
|
$
|
11
|
|
|
$
|
363
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
546
|
|
12 Months or Longer
|
|
262
|
|
|
—
|
|
|
1,603
|
|
|
200
|
|
|
—
|
|
|
2,065
|
|
||||||
Total
|
|
$
|
434
|
|
|
$
|
11
|
|
|
$
|
1,966
|
|
|
$
|
200
|
|
|
$
|
—
|
|
|
$
|
2,611
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Disaggregated Details:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
US Treasury Obligations,
at Amortized Cost |
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
US Treasury Obligations,
at Fair Value |
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
US Agency Obligations,
at Amortized Cost |
|
60,328
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
US Agency Obligations,
at Fair Value |
|
59,894
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
US Government Agency
Securities, at Amortized Cost |
|
|
|
|
|
$
|
40,832
|
|
|
|
|
|
|
|
||||||||||
US Government Agency
Securities, at Fair Value |
|
|
|
|
|
40,832
|
|
|
|
|
|
|
|
|||||||||||
Government Sponsored Entity
Securities, at Amortized Cost |
|
|
|
|
|
188,245
|
|
|
|
|
|
|
|
|||||||||||
Government Sponsored Entity
Securities, at Fair Value |
|
|
|
|
|
186,764
|
|
|
|
|
|
|
|
Held-To-Maturity Securities
|
||||||||||||
|
|
State and
Municipal
Obligations
|
|
Mortgage-
Backed
Securities
|
|
Total
Held-To
Maturity
Securities
|
||||||
December 31, 2018
|
|
|
|
|
|
|
||||||
Held-To-Maturity Securities,
at Amortized Cost
|
|
$
|
235,782
|
|
|
$
|
47,694
|
|
|
$
|
283,476
|
|
Held-To-Maturity Securities,
at Fair Value
|
|
233,359
|
|
|
46,979
|
|
|
280,338
|
|
|||
Gross Unrealized Gains
|
|
486
|
|
|
—
|
|
|
486
|
|
|||
Gross Unrealized Losses
|
|
2,909
|
|
|
715
|
|
|
3,624
|
|
|||
Held-To-Maturity Securities,
Pledged as Collateral, at Fair Value
|
|
|
|
|
|
266,341
|
|
|||||
|
|
|
|
|
|
|
||||||
Maturities of Debt Securities,
at Amortized Cost:
|
|
|
|
|
|
|
||||||
Within One Year
|
|
27,426
|
|
|
—
|
|
|
27,426
|
|
|||
From 1 - 5 Years
|
|
93,495
|
|
|
47,694
|
|
|
141,189
|
|
|||
From 5 - 10 Years
|
|
112,499
|
|
|
—
|
|
|
112,499
|
|
|||
Over 10 Years
|
|
2,362
|
|
|
—
|
|
|
2,362
|
|
|||
|
|
|
|
|
|
|
||||||
Maturities of Debt Securities,
at Fair Value:
|
|
|
|
|
|
|
||||||
Within One Year
|
|
27,464
|
|
|
—
|
|
|
27,464
|
|
|||
From 1 - 5 Years
|
|
93,130
|
|
|
46,979
|
|
|
140,109
|
|
|||
From 5 - 10 Years
|
|
110,396
|
|
|
—
|
|
|
110,396
|
|
|||
Over 10 Years
|
|
2,369
|
|
|
—
|
|
|
2,369
|
|
|||
|
|
|
|
|
|
|
||||||
Securities in a Continuous
Loss Position, at Fair Value:
|
|
|
|
|
|
|
||||||
Less than 12 Months
|
|
$
|
32,093
|
|
|
$
|
33,309
|
|
|
$
|
65,402
|
|
12 Months or Longer
|
|
110,947
|
|
|
13,670
|
|
|
124,617
|
|
|||
Total
|
|
$
|
143,040
|
|
|
$
|
46,979
|
|
|
$
|
190,019
|
|
Number of Securities in a
Continuous Loss Position
|
|
411
|
|
|
47
|
|
|
458
|
|
|||
|
|
|
|
|
|
|
||||||
Unrealized Losses on Securities
in a Continuous Loss Position:
|
|
|
|
|
|
|
||||||
Less than 12 Months
|
|
$
|
162
|
|
|
$
|
456
|
|
|
$
|
618
|
|
12 Months or Longer
|
|
2,747
|
|
|
259
|
|
|
3,006
|
|
|||
Total
|
|
$
|
2,909
|
|
|
$
|
715
|
|
|
$
|
3,624
|
|
|
|
|
|
|
|
|
||||||
Disaggregated Details:
|
|
|
|
|
|
|
||||||
US Government Agency
Securities, at Amortized Cost |
|
|
|
$
|
2,180
|
|
|
|
||||
US Government Agency
Securities, at Fair Value |
|
|
|
2,143
|
|
|
|
|||||
Government Sponsored Entity
Securities, at Amortized Cost |
|
|
|
45,514
|
|
|
|
|||||
Government Sponsored Entity
Securities, at Fair Value |
|
|
|
44,836
|
|
|
|
Held-To-Maturity Securities
|
||||||||||||
|
|
State and
Municipal
Obligations
|
|
Mortgage-
Backed
Securities
|
|
Total
Held-To
Maturity
Securities
|
||||||
December 31, 2017
|
|
|
|
|
|
|
||||||
Held-To-Maturity Securities,
at Amortized Cost
|
|
$
|
275,530
|
|
|
$
|
60,377
|
|
|
$
|
335,907
|
|
Held-To-Maturity Securities,
at Fair Value
|
|
275,353
|
|
|
60,548
|
|
|
335,901
|
|
|||
Gross Unrealized Gains
|
|
1,691
|
|
|
269
|
|
|
1,960
|
|
|||
Gross Unrealized Losses
|
|
1,868
|
|
|
98
|
|
|
1,966
|
|
|||
Held-To-Maturity Securities,
Pledged as Collateral, at Fair Value
|
|
|
|
|
|
318,622
|
|
|||||
|
|
|
|
|
|
|
||||||
Securities in a Continuous
Loss Position, at Fair Value:
|
|
|
|
|
|
|
||||||
Less than 12 Months
|
|
$
|
55,648
|
|
|
$
|
13,764
|
|
|
$
|
69,412
|
|
12 Months or Longer
|
|
65,152
|
|
|
3,257
|
|
|
68,409
|
|
|||
Total
|
|
$
|
120,800
|
|
|
$
|
17,021
|
|
|
$
|
137,821
|
|
Number of Securities in a
Continuous Loss Position
|
|
352
|
|
|
14
|
|
|
366
|
|
|||
|
|
|
|
|
|
|
||||||
Unrealized Losses on Securities
in a Continuous Loss Position:
|
|
|
|
|
|
|
||||||
Less than 12 Months
|
|
$
|
442
|
|
|
$
|
56
|
|
|
$
|
498
|
|
12 Months or Longer
|
|
1,425
|
|
|
43
|
|
|
1,468
|
|
|||
Total
|
|
$
|
1,867
|
|
|
$
|
99
|
|
|
$
|
1,966
|
|
|
|
|
|
|
|
|
||||||
Disaggregated Details:
|
|
|
|
|
|
|
||||||
US Government Agency
Securities, at Amortized Cost |
|
|
|
$
|
2,680
|
|
|
|
||||
US Government Agency
Securities, at Fair Value |
|
|
|
2,661
|
|
|
|
|||||
Government Sponsored Entity
Securities, at Amortized Cost |
|
|
|
57,697
|
|
|
|
|||||
Government Sponsored Entity
Securities, at Fair Value |
|
|
|
57,887
|
|
|
|
Equity Securities
|
||||
|
|
|
||
December 31, 2018
|
|
|
||
Equity Securities, at Fair Value
|
|
$
|
1,774
|
|
|
|
|
|
Twelve months ended December 31, 2018
|
||
Net Gain on Equity Securities
|
$
|
213
|
|
Less: Net gain (loss) recognized during the reporting period on equity securities sold during the period
|
—
|
|
|
Unrealized net gain recognized during the reporting period on equity securities still held at the reporting date
|
$
|
213
|
|
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Federal Reserve Bank Stock
|
$
|
1,132
|
|
|
$
|
1,120
|
|
Federal Home Loan Bank Stock
|
14,374
|
|
|
8,829
|
|
||
Total Federal Reserve Bank and Federal Home Loan Bank Stock
|
$
|
15,506
|
|
|
$
|
9,949
|
|
Note 5:
|
LOANS (Dollars In Thousands)
|
Schedule of Past Due Loans by Loan Category
|
|||||||||||||||||||
|
|
|
Commercial
|
|
|
|
|
|
|
||||||||||
|
Commercial
|
|
Real Estate
|
|
Consumer
|
|
Residential
|
|
Total
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans Past Due 30-59 Days
|
$
|
121
|
|
|
$
|
108
|
|
|
$
|
5,369
|
|
|
$
|
281
|
|
|
$
|
5,879
|
|
Loans Past Due 60-89 Days
|
49
|
|
|
—
|
|
|
2,136
|
|
|
1,908
|
|
|
4,093
|
|
|||||
Loans Past Due 90 or More Days
|
—
|
|
|
789
|
|
|
572
|
|
|
1,844
|
|
|
3,205
|
|
|||||
Total Loans Past Due
|
170
|
|
|
897
|
|
|
8,077
|
|
|
4,033
|
|
|
13,177
|
|
|||||
Current Loans
|
136,720
|
|
|
483,665
|
|
|
711,433
|
|
|
851,220
|
|
|
2,183,038
|
|
|||||
Total Loans
|
$
|
136,890
|
|
|
$
|
484,562
|
|
|
$
|
719,510
|
|
|
$
|
855,253
|
|
|
$
|
2,196,215
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans 90 or More Days Past Due and Still Accruing Interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
144
|
|
|
$
|
1,081
|
|
|
$
|
1,225
|
|
Nonaccrual Loans
|
403
|
|
|
789
|
|
|
658
|
|
|
2,309
|
|
|
4,159
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans Past Due 30-59 Days
|
$
|
139
|
|
|
$
|
—
|
|
|
$
|
5,891
|
|
|
$
|
2,094
|
|
|
$
|
8,124
|
|
Loans Past Due 60-89 Days
|
19
|
|
|
—
|
|
|
1,215
|
|
|
509
|
|
|
1,743
|
|
|||||
Loans Past Due 90 or more Days
|
99
|
|
|
807
|
|
|
513
|
|
|
1,422
|
|
|
2,841
|
|
|||||
Total Loans Past Due
|
257
|
|
|
807
|
|
|
7,619
|
|
|
4,025
|
|
|
12,708
|
|
|||||
Current Loans
|
128,992
|
|
|
443,441
|
|
|
595,208
|
|
|
770,421
|
|
|
1,938,062
|
|
|||||
Total Loans
|
$
|
129,249
|
|
|
$
|
444,248
|
|
|
$
|
602,827
|
|
|
$
|
774,446
|
|
|
$
|
1,950,770
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans 90 or More Days Past Due and Still Accruing Interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
313
|
|
|
$
|
319
|
|
Nonaccrual Loans
|
$
|
588
|
|
|
$
|
1,530
|
|
|
$
|
653
|
|
|
$
|
2,755
|
|
|
$
|
5,526
|
|
|
2018
|
|
2017
|
||||
Supplemental Information
:
|
|
|
|
||||
Unamortized deferred loan origination costs, net of deferred loan
origination fees, included in the above balances
|
$
|
4,494
|
|
|
$
|
4,055
|
|
Overdrawn deposit accounts, included in the above balances
|
572
|
|
|
473
|
|
||
Pledged loans secured by one-to-four family residential mortgages
under a blanket collateral agreement to secure borrowings from
the Federal Home Loan Bank of New York
|
550,750
|
|
|
511,301
|
|
||
Residential real estate loans serviced for Freddie Mac, not included
in the balances above
|
133,747
|
|
|
149,377
|
|
||
Loans held for sale at period-end, included in the above balances
|
215
|
|
|
327
|
|
Allowance for Loan Losses
|
|||||||||||||||||||||||
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
||||||||||||
|
Commercial
|
|
Real Estate
|
|
Consumer
|
|
Residential
|
|
Unallocated
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Rollfoward of the Allowance for Loan Losses for the Year Ended:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2017
|
$
|
1,873
|
|
|
$
|
4,504
|
|
|
$
|
7,604
|
|
|
$
|
4,605
|
|
|
$
|
—
|
|
|
$
|
18,586
|
|
Charge-offs
|
(153
|
)
|
|
(17
|
)
|
|
(1,246
|
)
|
|
(116
|
)
|
|
—
|
|
|
(1,532
|
)
|
||||||
Recoveries
|
3
|
|
|
12
|
|
|
520
|
|
|
—
|
|
|
—
|
|
|
535
|
|
||||||
Provision
|
(505
|
)
|
|
1,145
|
|
|
2,004
|
|
|
(37
|
)
|
|
—
|
|
|
2,607
|
|
||||||
December 31, 2018
|
$
|
1,218
|
|
|
$
|
5,644
|
|
|
$
|
8,882
|
|
|
$
|
4,452
|
|
|
$
|
—
|
|
|
$
|
20,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2016
|
$
|
1,017
|
|
|
$
|
5,677
|
|
|
$
|
6,120
|
|
|
$
|
4,198
|
|
|
$
|
—
|
|
|
$
|
17,012
|
|
Charge-offs
|
(2
|
)
|
|
(380
|
)
|
|
(1,101
|
)
|
|
(76
|
)
|
|
—
|
|
|
(1,559
|
)
|
||||||
Recoveries
|
9
|
|
|
—
|
|
|
388
|
|
|
—
|
|
|
—
|
|
|
397
|
|
||||||
Provision
|
849
|
|
|
(793
|
)
|
|
2,197
|
|
|
483
|
|
|
—
|
|
|
2,736
|
|
||||||
December 31, 2017
|
$
|
1,873
|
|
|
$
|
4,504
|
|
|
$
|
7,604
|
|
|
$
|
4,605
|
|
|
$
|
—
|
|
|
$
|
18,586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Loan Losses
|
|||||||||||||||||||||||
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
||||||||||||
|
Commercial
|
|
Real Estate
|
|
Consumer
|
|
Residential
|
|
Unallocated
|
|
Total
|
||||||||||||
December 31, 2015
|
$
|
1,827
|
|
|
$
|
4,520
|
|
|
$
|
5,554
|
|
|
$
|
3,790
|
|
|
$
|
347
|
|
|
$
|
16,038
|
|
Charge-offs
|
(97
|
)
|
|
(195
|
)
|
|
(871
|
)
|
|
(107
|
)
|
|
—
|
|
|
(1,270
|
)
|
||||||
Recoveries
|
23
|
|
|
—
|
|
|
182
|
|
|
6
|
|
|
—
|
|
|
211
|
|
||||||
Provision
|
(736
|
)
|
|
1,352
|
|
|
1,255
|
|
|
509
|
|
|
(347
|
)
|
|
2,033
|
|
||||||
December 31, 2016
|
$
|
1,017
|
|
|
$
|
5,677
|
|
|
$
|
6,120
|
|
|
$
|
4,198
|
|
|
$
|
—
|
|
|
$
|
17,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Allowance for loan losses - Loans Individually Evaluated for Impairment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
Allowance for loan losses - Loans Collectively Evaluated for Impairment
|
$
|
1,218
|
|
|
$
|
5,644
|
|
|
$
|
8,882
|
|
|
$
|
4,448
|
|
|
$
|
—
|
|
|
$
|
20,192
|
|
Ending Loan Balance - Individually Evaluated for Impairment
|
$
|
430
|
|
|
$
|
793
|
|
|
$
|
101
|
|
|
$
|
1,899
|
|
|
$
|
—
|
|
|
$
|
3,223
|
|
Ending Loan Balance - Collectively Evaluated for Impairment
|
$
|
136,460
|
|
|
$
|
483,769
|
|
|
$
|
719,409
|
|
|
$
|
853,354
|
|
|
$
|
—
|
|
|
$
|
2,192,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Allowance for loan losses - Loans Individually Evaluated for Impairment
|
$
|
94
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
106
|
|
Allowance for loan losses - Loans Collectively Evaluated for Impairment
|
$
|
1,779
|
|
|
$
|
4,502
|
|
|
$
|
7,604
|
|
|
$
|
4,595
|
|
|
$
|
—
|
|
|
$
|
18,480
|
|
Ending Loan Balance - Individually Evaluated for Impairment
|
$
|
489
|
|
|
$
|
1,537
|
|
|
$
|
95
|
|
|
$
|
1,562
|
|
|
$
|
—
|
|
|
$
|
3,683
|
|
Ending Loan Balance - Collectively Evaluated for Impairment
|
$
|
128,760
|
|
|
$
|
442,711
|
|
|
$
|
602,732
|
|
|
$
|
772,884
|
|
|
$
|
—
|
|
|
$
|
1,947,087
|
|
•
|
Changes in the volume and severity of past due, nonaccrual and adversely classified loans
|
•
|
Changes in the nature and volume of the portfolio and in the terms of loans
|
•
|
Changes in the value of the underlying collateral for collateral dependent loans
|
•
|
Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses
|
•
|
Changes in the quality of the loan review system
|
•
|
Changes in the experience, ability, and depth of lending management and other relevant staff
|
•
|
Changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio
|
•
|
The existence and effect of any concentrations of credit, and changes in the level of such concentrations
|
•
|
The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the existing portfolio or pool
|
Loan Credit Quality Indicators
|
|||||||||||||||||||
|
|
|
Commercial
|
|
|
|
|
|
|
||||||||||
|
Commercial
|
|
Real Estate
|
|
Consumer
|
|
Residential
|
|
Total
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Credit Risk Profile by Creditworthiness Category:
|
|
|
|
|
|
|
|
|
|
||||||||||
Satisfactory
|
$
|
129,584
|
|
|
$
|
456,868
|
|
|
|
|
|
|
$
|
586,452
|
|
||||
Special Mention
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|||||||
Substandard
|
7,306
|
|
|
26,905
|
|
|
|
|
|
|
34,211
|
|
|||||||
Doubtful
|
—
|
|
|
789
|
|
|
|
|
|
|
789
|
|
|||||||
Credit Risk Profile Based on Payment Activity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Performing
|
|
|
|
|
$
|
718,708
|
|
|
$
|
851,863
|
|
|
1,570,571
|
|
|||||
Nonperforming
|
|
|
|
|
802
|
|
|
3,390
|
|
|
4,192
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Credit Risk Profile by Creditworthiness Category:
|
|
|
|
|
|
|
|
|
|
||||||||||
Satisfactory
|
$
|
124,961
|
|
|
$
|
417,362
|
|
|
|
|
|
|
$
|
542,323
|
|
||||
Special Mention
|
1,341
|
|
|
177
|
|
|
|
|
|
|
1,518
|
|
|||||||
Substandard
|
2,947
|
|
|
25,902
|
|
|
|
|
|
|
28,849
|
|
|||||||
Doubtful
|
—
|
|
|
807
|
|
|
|
|
|
|
807
|
|
|||||||
Credit Risk Profile Based on Payment Activity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Performing
|
|
|
|
|
$
|
602,168
|
|
|
$
|
771,584
|
|
|
1,373,752
|
|
|||||
Nonperforming
|
|
|
|
|
659
|
|
|
3,068
|
|
|
3,727
|
|
Impaired Loans
|
|||||||||||||||||||
|
|
|
Commercial
|
|
|
|
|
|
|
||||||||||
|
Commercial
|
|
Real Estate
|
|
Consumer
|
|
Residential
|
|
Total
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Recorded Investment:
|
|
|
|
|
|
|
|
|
|
||||||||||
With No Related Allowance
|
$
|
430
|
|
|
$
|
793
|
|
|
$
|
101
|
|
|
$
|
1,605
|
|
|
$
|
2,929
|
|
With a Related Allowance
|
—
|
|
|
—
|
|
|
—
|
|
|
294
|
|
|
294
|
|
|||||
Unpaid Principal Balance:
|
|
|
|
|
|
|
|
|
|
||||||||||
With No Related Allowance
|
$
|
429
|
|
|
$
|
793
|
|
|
$
|
100
|
|
|
$
|
1,606
|
|
|
$
|
2,928
|
|
With a Related Allowance
|
—
|
|
|
—
|
|
|
—
|
|
|
293
|
|
|
293
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Recorded Investment:
|
|
|
|
|
|
|
|
|
|
||||||||||
With No Related Allowance
|
$
|
—
|
|
|
$
|
781
|
|
|
$
|
94
|
|
|
$
|
1,269
|
|
|
$
|
2,144
|
|
With a Related Allowance
|
485
|
|
|
725
|
|
|
—
|
|
|
333
|
|
|
1,543
|
|
|||||
Unpaid Principal Balance:
|
|
|
|
|
|
|
|
|
|
||||||||||
With No Related Allowance
|
$
|
—
|
|
|
$
|
816
|
|
|
$
|
95
|
|
|
$
|
1,274
|
|
|
$
|
2,185
|
|
With a Related Allowance
|
489
|
|
|
721
|
|
|
—
|
|
|
288
|
|
|
1,498
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
For the Year-To-Date Period Ended:
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Average Recorded Balance:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
With No Related Allowance
|
$
|
215
|
|
|
$
|
787
|
|
|
$
|
98
|
|
|
$
|
1,437
|
|
|
$
|
2,537
|
|
With a Related Allowance
|
243
|
|
|
363
|
|
|
—
|
|
|
314
|
|
|
920
|
|
|||||
Interest Income Recognized:
|
|
|
|
|
|
|
|
|
|
||||||||||
With No Related Allowance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
18
|
|
|
$
|
19
|
|
With a Related Allowance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cash Basis Income:
|
|
|
|
|
|
|
|
|
|
||||||||||
With No Related Allowance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
With a Related Allowance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Average Recorded Balance:
|
|
|
|
|
|
|
|
|
|
||||||||||
With No Related Allowance
|
$
|
—
|
|
|
$
|
836
|
|
|
$
|
93
|
|
|
$
|
1,184
|
|
|
$
|
2,113
|
|
With a Related Allowance
|
243
|
|
|
363
|
|
|
—
|
|
|
167
|
|
|
$
|
773
|
|
||||
Interest Income Recognized:
|
|
|
|
|
|
|
|
|
|
||||||||||
With No Related Allowance
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
57
|
|
With a Related Allowance
|
1
|
|
|
2
|
|
|
—
|
|
|
23
|
|
|
26
|
|
|||||
Cash Basis Income:
|
|
|
|
|
|
|
|
|
|
||||||||||
With No Related Allowance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
With a Related Allowance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Average Recorded Balance:
|
|
|
|
|
|
|
|
|
|
||||||||||
With No Related Allowance
|
$
|
78
|
|
|
$
|
1,631
|
|
|
$
|
103
|
|
|
$
|
872
|
|
|
$
|
2,684
|
|
With a Related Allowance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
||||
Interest Income Recognized:
|
|
|
|
|
|
|
|
|
|
||||||||||
With No Related Allowance
|
$
|
—
|
|
|
$
|
29
|
|
|
$
|
6
|
|
|
$
|
1
|
|
|
$
|
36
|
|
With a Related Allowance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cash Basis Income:
|
|
|
|
|
|
|
|
|
|
||||||||||
With No Related Allowance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
With a Related Allowance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Loans Modified in Trouble Debt Restructurings During the Period
|
|||||||||||||||||||
|
|
|
Commercial
|
|
|
|
|
|
|
||||||||||
|
Commercial
|
|
Real Estate
|
|
Consumer
|
|
Residential
|
|
Total
|
||||||||||
For the Year Ended:
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of Loans
|
1
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
6
|
|
|||||
Pre-Modification Outstanding Recorded Investment
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
82
|
|
Post-Modification Outstanding Recorded Investment
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
82
|
|
Subsequent Default, Number of Contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Subsequent Default, Recorded Investment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Commitments to lend additional funds to modified loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of Loans
|
1
|
|
|
1
|
|
|
6
|
|
|
—
|
|
|
8
|
|
|||||
Pre-Modification Outstanding Recorded Investment
|
$
|
503
|
|
|
$
|
725
|
|
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
1,279
|
|
Post-Modification Outstanding Recorded Investment
|
$
|
503
|
|
|
$
|
725
|
|
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
1,279
|
|
Subsequent Default, Number of Contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Subsequent Default, Recorded Investment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Commitments to lend additional funds to modified loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of Loans
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Pre-Modification Outstanding Recorded Investment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
39
|
|
Post-Modification Outstanding Recorded Investment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
39
|
|
Subsequent Default, Number of Contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Subsequent Default, Recorded Investment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Commitments to lend additional funds to modified loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Note 6:
|
PREMISES AND EQUIPMENT (Dollars In Thousands)
|
|
2018
|
|
2017
|
||||
Land and Bank Premises
|
$
|
35,010
|
|
|
$
|
35,254
|
|
Equipment, Furniture and Fixtures
|
30,192
|
|
|
25,662
|
|
||
Leasehold Improvements
|
1,921
|
|
|
1,901
|
|
||
Total Cost
|
67,123
|
|
|
62,817
|
|
||
Accumulated Depreciation and Amortization
|
(36,677
|
)
|
|
(35,198
|
)
|
||
Net Premises and Equipment
|
$
|
30,446
|
|
|
$
|
27,619
|
|
Note 7:
|
OTHER INTANGIBLE ASSETS (Dollars In Thousands)
|
|
Depositor
Intangibles
1
|
|
Mortgage
Servicing
Rights
2
|
|
Customer Intangibles
1
|
|
Total
|
||||||||
Gross Carrying Amount, December 31, 2018
|
$
|
2,247
|
|
|
$
|
2,061
|
|
|
$
|
4,382
|
|
|
$
|
8,690
|
|
Accumulated Amortization
|
(2,247
|
)
|
|
(1,799
|
)
|
|
(2,792
|
)
|
|
(6,838
|
)
|
||||
Net Carrying Amount, December 31, 2018
|
$
|
—
|
|
|
$
|
262
|
|
|
$
|
1,590
|
|
|
$
|
1,852
|
|
Gross Carrying Amount, December 31, 2017
|
$
|
2,247
|
|
|
$
|
2,061
|
|
|
$
|
4,382
|
|
|
$
|
8,690
|
|
Accumulated Amortization
|
(2,247
|
)
|
|
(1,624
|
)
|
|
(2,530
|
)
|
|
(6,401
|
)
|
||||
Net Carrying Amount, December 31, 2017
|
$
|
—
|
|
|
$
|
437
|
|
|
$
|
1,852
|
|
|
$
|
2,289
|
|
|
|
|
|
|
|
|
|
||||||||
Rollforward of Intangible Assets:
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2015
|
$
|
—
|
|
|
$
|
679
|
|
|
$
|
2,428
|
|
|
$
|
3,107
|
|
Intangible Assets Acquired
|
—
|
|
|
146
|
|
|
—
|
|
|
146
|
|
||||
Intangible Assets Disposed
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amortization of Intangible Assets
|
—
|
|
|
(260
|
)
|
|
(297
|
)
|
|
(557
|
)
|
||||
Balance, December 31, 2016
|
—
|
|
|
565
|
|
|
2,131
|
|
|
2,696
|
|
||||
Intangible Assets Acquired
|
—
|
|
|
93
|
|
|
—
|
|
|
93
|
|
||||
Intangible Assets Disposed
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amortization of Intangible Assets
|
—
|
|
|
(221
|
)
|
|
(279
|
)
|
|
(500
|
)
|
||||
Balance, December 31, 2017
|
—
|
|
|
437
|
|
|
1,852
|
|
|
2,289
|
|
||||
Intangible Assets Acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Intangible Assets Disposed
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amortization of Intangible Assets
|
—
|
|
|
(175
|
)
|
|
(262
|
)
|
|
(437
|
)
|
||||
Balance, December 31, 2018
|
$
|
—
|
|
|
$
|
262
|
|
|
$
|
1,590
|
|
|
$
|
1,852
|
|
|
|
Mortgage
Servicing Rights
|
|
Customer Intangibles
|
|
Total
|
||||||
Estimated Annual Amortization Expense:
|
|
|
|
|
|
|
||||||
2019
|
|
$
|
103
|
|
|
$
|
245
|
|
|
$
|
348
|
|
2020
|
|
71
|
|
|
227
|
|
|
298
|
|
|||
2021
|
|
50
|
|
|
210
|
|
|
260
|
|
|||
2022
|
|
29
|
|
|
193
|
|
|
222
|
|
|||
2023
|
|
9
|
|
|
176
|
|
|
185
|
|
|||
2024 and beyond
|
|
—
|
|
|
539
|
|
|
539
|
|
|||
Total
|
|
$
|
262
|
|
|
$
|
1,590
|
|
|
$
|
1,852
|
|
Note 8:
|
GUARANTEES (Dollars In Thousands)
|
Balance at December 31,
|
2018
|
|
2017
|
||||
Notional Amount:
|
|
|
|
||||
Commitments to Extend Credit
|
$
|
321,143
|
|
|
$
|
315,256
|
|
Standby Letters of Credit
|
4,466
|
|
|
3,526
|
|
||
Fair Value:
|
|
|
|
||||
Commitments to Extend Credit
|
$
|
—
|
|
|
$
|
—
|
|
Standby Letters of Credit
|
12
|
|
|
23
|
|
Note 9:
|
TIME DEPOSITS (Dollars In Thousands)
|
Year of Maturity
|
Total Time
Deposits
|
||
2019
|
$
|
168,464
|
|
2020
|
49,965
|
|
|
2021
|
18,989
|
|
|
2022
|
9,208
|
|
|
2023
|
4,713
|
|
|
2024 and beyond
|
12,648
|
|
|
Total
|
$
|
263,987
|
|
Note 10:
|
DEBT (Dollars in Thousands)
|
|
2018
|
|
2017
|
||||
Balances at December 31:
|
|
|
|
||||
Overnight Advances from the Federal Home Loan Bank of New York
|
$
|
234,000
|
|
|
$
|
105,000
|
|
Securities Sold Under Agreements to Repurchase
|
54,659
|
|
|
64,966
|
|
||
Total Short-Term Borrowings
|
$
|
288,659
|
|
|
$
|
169,966
|
|
|
|
|
|
||||
Maximum Borrowing Capacity at December 31:
|
|
|
|
||||
Federal Funds Purchased
|
$
|
57,000
|
|
|
$
|
35,000
|
|
Federal Home Loan Bank of New York
|
550,750
|
|
|
511,301
|
|
||
Federal Reserve Bank of New York
|
489,809
|
|
|
424,724
|
|
|
2018
|
|
2017
|
||||
Balances at December 31:
|
|
|
|
||||
U.S. Government & Agency Obligations
|
$
|
22,314
|
|
|
$
|
37,329
|
|
Mortgage-Backed Securities
|
43,155
|
|
|
29,284
|
|
||
Total Pledged Collateral for Repo Accounts
|
$
|
65,469
|
|
|
$
|
66,613
|
|
|
|
|
|
|
|
Balances
|
|
Weighted Average Rate
|
||||||||||
|
|
|
|
|
|
|
|
|
||||||
Final Maturity
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||
First Year
|
|
$
|
20,000
|
|
|
$
|
10,000
|
|
|
1.70
|
%
|
|
1.50
|
%
|
Second Year
|
|
25,000
|
|
|
20,000
|
|
|
2.02
|
%
|
|
1.70
|
%
|
||
Third Year
|
|
—
|
|
|
25,000
|
|
|
—
|
%
|
|
2.02
|
%
|
||
Fourth Year
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Fifth Year
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Total
|
|
$
|
45,000
|
|
|
$
|
55,000
|
|
|
1.88
|
%
|
|
1.81
|
%
|
|
2018
|
|
2017
|
||||
ACST II
|
|
|
|
||||
Balance at December 31,
|
$
|
10,000
|
|
|
$
|
10,000
|
|
Period-End Interest Rate
|
5.55
|
%
|
|
4.49
|
%
|
||
|
|
|
|
||||
ACST III
|
|
|
|
||||
Balance at December 31,
|
$
|
10,000
|
|
|
$
|
10,000
|
|
Period-End Interest Rate
|
4.40
|
%
|
|
3.34
|
%
|
Note 11:
|
COMPREHENSIVE INCOME (Dollars In Thousands)
|
Schedule of Comprehensive Income
|
|||||||||||
|
Before-Tax
Amount
|
|
Tax
Expense
(Benefit)
|
|
Net-of-Tax
Amount
|
||||||
2018
|
|
|
|
|
|
||||||
Net Unrealized Securities Holding Losses Arising During the Period
|
$
|
(2,839
|
)
|
|
$
|
723
|
|
|
$
|
(2,116
|
)
|
Net Retirement Plan Loss
|
(3,798
|
)
|
|
965
|
|
|
(2,833
|
)
|
|||
Net Retirement Plan Prior Service Credit
|
(453
|
)
|
|
115
|
|
|
(338
|
)
|
|||
Amortization of Net Retirement Plan Actuarial Loss
|
325
|
|
|
(83
|
)
|
|
242
|
|
|||
Accretion of Net Retirement Plan Prior Service Credit
|
108
|
|
|
(28
|
)
|
|
80
|
|
|||
Other Comprehensive Income (Loss)
|
$
|
(6,657
|
)
|
|
$
|
1,692
|
|
|
$
|
(4,965
|
)
|
|
|
|
|
|
|
||||||
2017
|
|
|
|
|
|
||||||
Net Unrealized Securities Holding Losses Arising During the Period
|
$
|
(1,505
|
)
|
|
$
|
565
|
|
|
$
|
(940
|
)
|
Reclassification Adjustment for Securities Losses Included in Net Income
|
448
|
|
|
(111
|
)
|
|
337
|
|
|||
Net Retirement Plan Loss
|
287
|
|
|
(73
|
)
|
|
214
|
|
|||
Amortization of Net Retirement Plan Actuarial Loss
|
411
|
|
|
(49
|
)
|
|
362
|
|
|||
Accretion of Net Retirement Plan Prior Service Credit
|
(11
|
)
|
|
3
|
|
|
(8
|
)
|
|||
Other Comprehensive Income
|
$
|
(370
|
)
|
|
$
|
335
|
|
|
$
|
(35
|
)
|
|
|
|
|
|
|
||||||
2016
|
|
|
|
|
|
||||||
Net Unrealized Securities Holding Losses Arising During the Period
|
$
|
(1,672
|
)
|
|
$
|
648
|
|
|
$
|
(1,024
|
)
|
Reclassification Adjustment for Securities Gains Included in Net Income
|
22
|
|
|
(9
|
)
|
|
13
|
|
|||
Net Retirement Plan Losses
|
3,017
|
|
|
(1,296
|
)
|
|
1,721
|
|
|||
Amortization of Net Retirement Plan Actuarial Loss
|
716
|
|
|
(281
|
)
|
|
435
|
|
|||
Accretion of Net Retirement Plan Prior Service Credit
|
(12
|
)
|
|
5
|
|
|
(7
|
)
|
|||
Other Comprehensive Loss
|
$
|
2,071
|
|
|
$
|
(933
|
)
|
|
$
|
1,138
|
|
Changes in Accumulated Other Comprehensive Income (Loss) by Component
(1)
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Unrealized
|
|
Defined Benefit Plan Items
|
|
|
||||||||||
|
Gains and
|
|
|
|
|
|
|
||||||||
|
Losses on
|
|
|
|
Net Prior
|
|
|
||||||||
|
Available-for-
|
|
Net Gain
|
|
Service
|
|
|
||||||||
|
Sale Securities
|
|
(Loss)
|
|
(Cost ) Credit
|
|
Total
|
||||||||
For the Year-To-Date periods ended:
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
$
|
(1,250
|
)
|
|
$
|
(6,380
|
)
|
|
$
|
(884
|
)
|
|
$
|
(8,514
|
)
|
Other comprehensive loss before reclassifications
|
(2,116
|
)
|
|
(2,833
|
)
|
|
(338
|
)
|
|
(5,287
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
|
|
242
|
|
|
80
|
|
|
322
|
|
|||||
Net current-period other comprehensive loss
|
(2,116
|
)
|
|
(2,591
|
)
|
|
(258
|
)
|
|
(4,965
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
(331
|
)
|
|
|
|
|
|
(331
|
)
|
||||||
December 31, 2018
|
$
|
(3,697
|
)
|
|
$
|
(8,971
|
)
|
|
$
|
(1,142
|
)
|
|
$
|
(13,810
|
)
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
$
|
(382
|
)
|
|
$
|
(5,737
|
)
|
|
$
|
(715
|
)
|
|
$
|
(6,834
|
)
|
Other comprehensive income (loss) before reclassifications
|
(940
|
)
|
|
214
|
|
|
—
|
|
|
(726
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
337
|
|
|
362
|
|
|
(8
|
)
|
|
691
|
|
||||
Net current-period other comprehensive income
|
(603
|
)
|
|
576
|
|
|
(8
|
)
|
|
(35
|
)
|
||||
Reclassification due to the adoption of ASU No. 2018-02
|
$
|
(265
|
)
|
|
$
|
(1,219
|
)
|
|
$
|
(161
|
)
|
|
$
|
(1,645
|
)
|
December 31, 2017
|
$
|
(1,250
|
)
|
|
$
|
(6,380
|
)
|
|
$
|
(884
|
)
|
|
$
|
(8,514
|
)
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
$
|
629
|
|
|
$
|
(7,893
|
)
|
|
$
|
(708
|
)
|
|
$
|
(7,972
|
)
|
Other comprehensive income (loss) before reclassifications
|
(1,024
|
)
|
|
1,721
|
|
|
—
|
|
|
697
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
13
|
|
|
435
|
|
|
(7
|
)
|
|
441
|
|
||||
Net current-period other comprehensive income (loss)
|
(1,011
|
)
|
|
2,156
|
|
|
(7
|
)
|
|
1,138
|
|
||||
December 31, 2016
|
$
|
(382
|
)
|
|
$
|
(5,737
|
)
|
|
$
|
(715
|
)
|
|
$
|
(6,834
|
)
|
|
|
|
|
|
|
|
|
Reclassifications Out of Accumulated Other Comprehensive Income
(1)
|
||||||
|
||||||
|
|
Amounts Reclassified
|
|
|
||
Details about Accumulated Other
|
|
from Accumulated Other
|
|
Affected Line Item in the Statement
|
||
Comprehensive Income Components
|
|
Comprehensive Income
|
|
Where Net Income Is Presented
|
||
|
|
|
|
|
||
December 31, 2016
|
|
|
|
|
||
|
|
|
|
|
||
Unrealized gains and losses on available-for-sale securities
|
|
|
|
|
||
|
|
$
|
(22
|
)
|
|
Gain on Securities Transactions, Net
|
|
|
(22
|
)
|
|
Total before tax
|
|
|
|
9
|
|
|
Provision for Income Taxes
|
|
|
|
$
|
(13
|
)
|
|
Net of tax
|
|
|
|
|
|
||
Amortization of defined benefit pension items
|
|
|
|
|
||
Prior-service costs
|
|
12
|
|
(2)
|
Salaries and Employee Benefits
|
|
Actuarial gains/(losses)
|
|
$
|
(716
|
)
|
(2)
|
Salaries and Employee Benefits
|
|
|
(704
|
)
|
|
Total before tax
|
|
|
|
276
|
|
|
Provision for Income Taxes
|
|
|
|
$
|
(428
|
)
|
|
Net of tax
|
|
|
|
|
|
||
Total reclassifications for the period
|
|
$
|
(441
|
)
|
|
Net of tax
|
|
|
|
|
|
Note 12:
|
STOCK BASED COMPENSATION (Dollars In Thousands, Except Share and Per Share Amounts)
|
Shares Available for Grant at Period-End
|
|
|
|
261,614
|
|
|
Shares
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual Life (in years)
|
Aggregate Intrinsic Value
|
|||
Outstanding at January 1, 2018
|
356,540
|
|
23.42
|
|
|
|
|
Granted
|
53,466
|
|
31.84
|
|
|
|
|
Exercised
|
(107,818
|
)
|
20.92
|
|
|
|
|
Forfeited
|
(17,666
|
)
|
27.06
|
|
|
|
|
Outstanding at December 31, 2018
|
284,522
|
|
25.67
|
|
5.44
|
1,807
|
|
Vested at Period-End
|
172,410
|
|
22.56
|
|
3.68
|
1,631
|
|
Expected to Vest
|
112,112
|
|
30.46
|
|
8.16
|
176
|
|
|
Exercise Price Ranges
|
|
||||||||||||
|
$17.48
|
$19.58 to $20.93
|
$21.50 to $21.99
|
$23.19 to $23.66
|
$31.84
|
$35.07
|
Total
|
|||||||
Outstanding at December 31, 2018
|
|
|
|
|
|
|
|
|||||||
Number of Stock Options Outstanding
|
5,763
|
|
61,569
|
|
52,683
|
|
69,175
|
|
50,376
|
|
44,956
|
|
284,522
|
|
Weighted-Average Remaining Contractual Life (in years)
|
0.06
|
|
1.65
|
|
3.75
|
|
6.34
|
|
9.09
|
|
7.86
|
|
5.44
|
|
Weighted-Average Exercise Price
|
17.48
|
|
20.32
|
|
21.81
|
|
23.45
|
|
31.84
|
|
35.07
|
|
25.67
|
|
|
|
|
|
|
|
|
|
|||||||
Vested at December 31, 2018
|
|
|
|
|
|
|
|
|||||||
Number of Stock Options Outstanding
|
5,763
|
|
61,569
|
|
52,683
|
|
38,243
|
|
1,030
|
|
13,122
|
|
172,410
|
|
Weighted-Average Remaining Contractual Life (in years)
|
0.06
|
|
1.65
|
|
3.75
|
|
6.00
|
|
9.09
|
|
7.36
|
|
3.68
|
|
Weighted-Average Exercise Price
|
17.48
|
|
20.32
|
|
21.81
|
|
23.40
|
|
31.84
|
|
35.07
|
|
22.55
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Stock Options Granted
|
|
53,466
|
|
|
57,290
|
|
|
60,101
|
|
|||
Weighted Average Grant Date Information:
|
|
|
|
|
|
|
||||||
Fair Value of Options Granted
|
|
$
|
5.59
|
|
|
$
|
6.07
|
|
|
$
|
5.28
|
|
Fair Value Assumptions:
|
|
|
|
|
|
|
||||||
Dividend Yield
|
|
2.98
|
%
|
|
2.72
|
%
|
|
3.88
|
%
|
|||
Expected Volatility
|
|
21.55
|
%
|
|
21.40
|
%
|
|
32.95
|
%
|
|||
Risk Free Interest Rate
|
|
2.68
|
%
|
|
2.25
|
%
|
|
1.80
|
%
|
|||
Expected Lives (in years)
|
|
6.98
|
|
|
6.88
|
|
|
7.56
|
|
|||
|
|
|
|
|
|
|
||||||
Amount Expensed During the Year
|
|
$
|
322
|
|
|
$
|
351
|
|
|
$
|
287
|
|
Compensation Costs for Non-vested Awards Not Yet Recognized
|
|
504
|
|
|
528
|
|
|
521
|
|
|||
Weighted Average Expected Vesting Period, In Years
|
|
2.74
|
|
|
2.59
|
|
|
2.71
|
|
|||
Proceeds From Stock Options Exercised
|
|
2,255
|
|
|
$
|
1,190
|
|
|
$
|
2,404
|
|
|
Tax Benefits Related to Stock Options Exercised
|
|
240
|
|
|
168
|
|
|
188
|
|
|||
Intrinsic Value of Stock Options Exercised
|
|
1,552
|
|
|
825
|
|
|
1,010
|
|
|
Restricted Stock Units
|
Weighted Average Grant Date Fair Value
|
|||
Non-vested at January 1, 2018
|
—
|
|
$
|
—
|
|
Granted
|
3,377
|
|
$
|
32.57
|
|
Vested
|
—
|
|
$
|
—
|
|
Canceled
|
—
|
|
$
|
—
|
|
Non-vested at December 31, 2018
|
3,377
|
|
$
|
32.57
|
|
|
|
2018
|
|
|
Amount Expensed During the Year
|
|
34
|
|
|
Compensation Costs for Non-vested Awards Not Yet Recognized
|
|
76
|
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
ESOP Compensation Expense
|
|
$
|
1,400
|
|
|
$
|
1,400
|
|
|
$
|
1,200
|
|
ESOP Plan Shares:
|
2018
|
||
Allocated Shares
|
758,101
|
|
|
Shares Released for Allocation During 2018
|
4,931
|
|
|
Unallocated Shares
|
5,001
|
|
|
Total ESOP Shares
|
768,033
|
|
|
|
|
||
Market Value of Unallocated Shares
|
$
|
160
|
|
Note 13:
|
RETIREMENT BENEFIT PLANS (Dollars in Thousands)
|
Schedule of Defined Benefit Plan Disclosures
|
|||||||||||
|
Employees'
Pension
Plan
|
|
Select
Executive
Retirement
Plan
|
|
Postretirement
Benefit
Plans
|
||||||
Defined Benefit Plan Funded Status
|
|
|
|
|
|
||||||
December 31, 2018
|
|
|
|
|
|
||||||
Fair Value of Plan Assets
|
$
|
48,445
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Benefit Obligation
|
38,069
|
|
|
4,710
|
|
|
7,706
|
|
|||
Funded Status of Plan
|
$
|
10,376
|
|
|
$
|
(4,710
|
)
|
|
$
|
(7,706
|
)
|
|
|
|
|
|
|
||||||
December 31, 2017
|
|
|
|
|
|
||||||
Fair Value of Plan Assets
|
$
|
53,571
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Benefit Obligation
|
38,921
|
|
|
4,586
|
|
|
7,727
|
|
|||
Funded Status of Plan
|
$
|
14,650
|
|
|
$
|
(4,586
|
)
|
|
$
|
(7,727
|
)
|
|
|
|
|
|
|
||||||
Change in Benefit Obligation
|
|
|
|
|
|
||||||
Benefit Obligation, at January 1, 2018
|
$
|
38,921
|
|
|
$
|
4,586
|
|
|
$
|
7,727
|
|
Service Cost
1
|
1,557
|
|
|
414
|
|
|
136
|
|
|||
Interest Cost
2
|
1,598
|
|
|
192
|
|
|
333
|
|
|||
Plan Participants' Contributions
|
—
|
|
|
—
|
|
|
416
|
|
|||
Amendments
|
—
|
|
|
—
|
|
|
453
|
|
|||
Actuarial (Gain) Loss
|
(795
|
)
|
|
(17
|
)
|
|
(664
|
)
|
|||
Benefits Paid
|
(3,212
|
)
|
|
(465
|
)
|
|
(695
|
)
|
|||
Benefit Obligation, at December 31, 2018
|
$
|
38,069
|
|
|
$
|
4,710
|
|
|
$
|
7,706
|
|
|
|
|
|
|
|
||||||
Benefit Obligation, at January 1, 2017
|
$
|
36,154
|
|
|
$
|
4,547
|
|
|
$
|
7,623
|
|
Service Cost
1
|
1,392
|
|
|
45
|
|
|
130
|
|
|||
Interest Cost
2
|
1,682
|
|
|
209
|
|
|
339
|
|
|||
Plan Participants' Contributions
|
—
|
|
|
—
|
|
|
492
|
|
|||
Amendments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Actuarial (Gain) Loss
|
2,440
|
|
|
245
|
|
|
(14
|
)
|
|||
Benefits Paid
|
(2,747
|
)
|
|
(460
|
)
|
|
(843
|
)
|
|||
Benefit Obligation, at December 31, 2017
|
$
|
38,921
|
|
|
$
|
4,586
|
|
|
$
|
7,727
|
|
|
|
|
|
|
|
||||||
Change in Fair Value of Plan Assets
|
|
|
|
|
|
||||||
Fair Value of Plan Assets, at January 1, 2018
|
$
|
53,571
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual Return on Plan Assets
|
(1,914
|
)
|
|
—
|
|
|
—
|
|
|||
Employer Contributions
|
—
|
|
|
465
|
|
|
279
|
|
|||
Plan Participants' Contributions
|
—
|
|
|
—
|
|
|
416
|
|
|||
Benefits Paid
|
(3,212
|
)
|
|
(465
|
)
|
|
(695
|
)
|
|||
Fair Value of Plan Assets, at December 31, 2017
|
$
|
48,445
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Fair Value of Plan Assets, at January 1, 2017
|
$
|
50,220
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual Return on Plan Assets
|
6,098
|
|
|
—
|
|
|
—
|
|
|||
Employer Contributions
|
—
|
|
|
460
|
|
|
351
|
|
|||
Plan Participants' Contributions
|
—
|
|
|
—
|
|
|
492
|
|
|||
Benefits Paid
|
(2,747
|
)
|
|
(460
|
)
|
|
(843
|
)
|
|||
Fair Value of Plan Assets, at December 31, 2017
|
$
|
53,571
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Accumulated Benefit Obligation at December 31, 2018
|
$
|
37,749
|
|
|
$
|
4,672
|
|
|
$
|
7,706
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
Schedule of Defined Benefit Plan Disclosures
|
|||||||||||
|
Employees'
Pension
Plan
|
|
Select
Executive
Retirement
Plan
|
|
Postretirement
Benefit
Plans
|
||||||
Amounts Recognized in the Consolidated Balance Sheets
|
|
|
|
|
|
||||||
December 31, 2018
|
|
|
|
|
|
||||||
Prepaid Pension Asset
|
$
|
10,376
|
|
|
$
|
—
|
|
|
—
|
|
|
Accrued Benefit Liability
|
—
|
|
|
(4,710
|
)
|
|
(7,706
|
)
|
|||
Net Benefit Recognized
|
$
|
10,376
|
|
|
$
|
(4,710
|
)
|
|
$
|
(7,706
|
)
|
|
|
|
|
|
|
||||||
December 31, 2017
|
|
|
|
|
|
||||||
Prepaid Pension Asset
|
$
|
14,650
|
|
|
$
|
—
|
|
|
—
|
|
|
Accrued Benefit Liability
|
—
|
|
|
(4,586
|
)
|
|
(7,727
|
)
|
|||
Net Benefit Recognized
|
$
|
14,650
|
|
|
$
|
(4,586
|
)
|
|
$
|
(7,727
|
)
|
|
|
|
|
|
|
||||||
Amounts Recognized in Other Comprehensive Income (Loss)
|
|
|
|
|
|
||||||
For the Year Ended December 31, 2018
|
|
|
|
|
|
||||||
Net Unamortized Loss (Gain) Arising During the Period
|
$
|
4,480
|
|
|
$
|
(17
|
)
|
|
$
|
(665
|
)
|
Net Prior Service Cost Arising During the Period
|
—
|
|
|
—
|
|
|
453
|
|
|||
Amortization of Net Loss
|
(194
|
)
|
|
(131
|
)
|
|
—
|
|
|||
Amortization of Prior Service Credit (Cost)
|
49
|
|
|
(57
|
)
|
|
(100
|
)
|
|||
Total Other Comprehensive (Loss) for Pension and
Other Postretirement Benefit Plans
|
$
|
4,335
|
|
|
$
|
(205
|
)
|
|
$
|
(312
|
)
|
|
|
|
|
|
|
||||||
For the Year Ended December 31, 2017
|
|
|
|
|
|
||||||
Net Unamortized (Gains) Loss Arising During the Period
|
$
|
(517
|
)
|
|
$
|
244
|
|
|
$
|
(14
|
)
|
Net Prior Service Cost Arising During the Period
|
—
|
|
|
—
|
|
|
—
|
|
|||
Amortization of Net (Gains) Loss
|
(306
|
)
|
|
(129
|
)
|
|
24
|
|
|||
Amortization of Prior Service Credit (Cost)
|
57
|
|
|
(57
|
)
|
|
11
|
|
|||
Total Other Comprehensive Income (Loss) for Pension and
Other Postretirement Benefit Plans
|
$
|
(766
|
)
|
|
$
|
58
|
|
|
$
|
21
|
|
|
|
|
|
|
|
||||||
For the Year Ended December 31, 2016
|
|
|
|
|
|
||||||
Net Unamortized Loss Arising During the Period
|
$
|
(2,657
|
)
|
|
$
|
(32
|
)
|
|
$
|
(328
|
)
|
Net Prior Service Cost Arising During the Period
|
—
|
|
|
—
|
|
|
—
|
|
|||
Amortization of Net Loss
|
(591
|
)
|
|
(125
|
)
|
|
—
|
|
|||
Amortization of Prior Service (Cost) Credit
|
57
|
|
|
(57
|
)
|
|
12
|
|
|||
Total Other Comprehensive (Loss) Income for Pension and
Other Postretirement Benefit Plans
|
$
|
(3,191
|
)
|
|
$
|
(214
|
)
|
|
$
|
(316
|
)
|
|
|
|
|
|
|
||||||
Accumulated Other Comprehensive Income
|
|
|
|
|
|
||||||
December 31, 2018
|
|
|
|
|
|
||||||
Net Actuarial Loss (Gains)
|
$
|
10,942
|
|
|
$
|
1,979
|
|
|
$
|
(893
|
)
|
Prior Service (Credit) Cost
|
313
|
|
|
432
|
|
|
786
|
|
|||
Total Accumulated Other Comprehensive Income, Before Tax
|
$
|
11,255
|
|
|
$
|
2,411
|
|
|
$
|
(107
|
)
|
|
|
|
|
|
|
||||||
December 31, 2017
|
|
|
|
|
|
||||||
Net Actuarial Loss (Gains)
|
$
|
6,656
|
|
|
$
|
2,127
|
|
|
$
|
(228
|
)
|
Prior Service (Credit) Cost
|
264
|
|
|
489
|
|
|
433
|
|
|||
Total Accumulated Other Comprehensive Income, Before Tax
|
$
|
6,920
|
|
|
$
|
2,616
|
|
|
$
|
205
|
|
Amounts that will be Amortized from Accumulated
Other Comprehensive Income the Next Year
|
|
|
|
|
|
||||||
Net Actuarial Loss (Gain)
|
$
|
612
|
|
|
$
|
106
|
|
|
$
|
(70
|
)
|
Prior Service Cost
|
$
|
69
|
|
|
$
|
54
|
|
|
$
|
101
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
Schedule of Defined Benefit Plan Disclosures
|
|||||||||||
|
Employees'
Pension
Plan
|
|
Select
Executive
Retirement
Plan
|
|
Postretirement
Benefit
Plans
|
||||||
Net Periodic Benefit Cost
|
|
|
|
|
|
||||||
For the Year Ended December 31, 2018
|
|
|
|
|
|
||||||
Service Cost
1
|
$
|
1,557
|
|
|
$
|
414
|
|
|
$
|
136
|
|
Interest Cost
2
|
1,598
|
|
|
192
|
|
|
333
|
|
|||
Expected Return on Plan Assets
2
|
(3,362
|
)
|
|
—
|
|
|
—
|
|
|||
Amortization of Prior Service (Credit) Cost
2
|
(49
|
)
|
|
57
|
|
|
100
|
|
|||
Amortization of Net Loss
2
|
194
|
|
|
131
|
|
|
—
|
|
|||
Net Periodic Benefit Cost
|
$
|
(62
|
)
|
|
$
|
794
|
|
|
$
|
569
|
|
|
|
|
|
|
|
||||||
For the Year Ended December 31, 2017
|
|
|
|
|
|
||||||
Service Cost
1
|
$
|
1,392
|
|
|
$
|
45
|
|
|
$
|
130
|
|
Interest Cost
2
|
1,682
|
|
|
209
|
|
|
339
|
|
|||
Expected Return on Plan Assets
2
|
(3,141
|
)
|
|
—
|
|
|
—
|
|
|||
Amortization of Prior Service (Credit) Cost
2
|
(57
|
)
|
|
57
|
|
|
(11
|
)
|
|||
Amortization of Net Loss
2
|
306
|
|
|
129
|
|
|
(24
|
)
|
|||
Net Periodic Benefit Cost
|
$
|
182
|
|
|
$
|
440
|
|
|
$
|
434
|
|
|
|
|
|
|
|
||||||
For the Year Ended December 31, 2016
|
|
|
|
|
|
||||||
Service Cost
1
|
$
|
1,400
|
|
|
$
|
40
|
|
|
$
|
147
|
|
Interest Cost
2
|
1,641
|
|
|
206
|
|
|
340
|
|
|||
Expected Return on Plan Assets
2
|
(3,198
|
)
|
|
—
|
|
|
—
|
|
|||
Amortization of Prior Service (Credit) Cost
2
|
(57
|
)
|
|
57
|
|
|
(12
|
)
|
|||
Amortization of Net Loss
2
|
591
|
|
|
125
|
|
|
—
|
|
|||
Net Periodic Benefit Cost
|
$
|
377
|
|
|
$
|
428
|
|
|
$
|
475
|
|
|
|
|
|
|
|
||||||
Weighted-Average Assumptions Used in
Calculating Benefit Obligation
|
|
|
|
|
|
||||||
December 31, 2018
|
|
|
|
|
|
||||||
Discount Rate
|
4.81
|
%
|
|
4.80
|
%
|
|
4.81
|
%
|
|||
Rate of Compensation Increase
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|||
Interest Rate Credit for Determining
Projected Cash Balance Account
|
3.36
|
%
|
|
3.36
|
%
|
|
|
||||
|
|
|
|
|
|
||||||
December 31, 2017
|
|
|
|
|
|
||||||
Discount Rate
|
4.24
|
%
|
|
4.18
|
%
|
|
4.22
|
%
|
|||
Rate of Compensation Increase
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|||
Interest Rate Credit for Determining
Projected Cash Balance Account
|
3.00
|
%
|
|
3.00
|
%
|
|
|
||||
Interest Rate to Annuitize Cash
Balance Account
|
4.25
|
%
|
|
4.25
|
%
|
|
|
||||
Interest Rate to Convert Annuities to Actuarially
Equivalent Lump Sum Amounts
|
4.25
|
%
|
|
4.25
|
%
|
|
|
||||
|
|
|
|
|
|
||||||
Weighted-Average Assumptions Used in
Calculating Net Periodic Benefit Cost
|
|
|
|
|
|
||||||
December 31, 2018
|
|
|
|
|
|
||||||
Discount Rate
|
4.24
|
%
|
|
4.18
|
%
|
|
4.22
|
%
|
|||
Expected Long-Term Return on Plan Assets
|
6.50
|
%
|
|
|
|
|
|
||||
Rate of Compensation Increase
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|||
Interest Rate Credit for Determining
Projected Cash Balance Account
|
3.00
|
%
|
|
3.00
|
%
|
|
|
||||
|
|
|
|
|
|
Schedule of Defined Benefit Plan Disclosures
|
|||||||||||
|
Employees'
Pension
Plan
|
|
Select
Executive
Retirement
Plan
|
|
Postretirement
Benefit
Plans
|
||||||
December 31, 2017
|
|
|
|
|
|
||||||
Discount Rate
|
4.83
|
%
|
|
4.73
|
%
|
|
4.80
|
%
|
|||
Expected Long-Term Return on Plan Assets
|
6.50
|
%
|
|
|
|
|
|
||||
Rate of Compensation Increase
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|||
Interest Rate Credit for Determining
Projected Cash Balance Account
|
3.00
|
%
|
|
3.00
|
%
|
|
|
||||
Interest Rate to Annuitize Cash
Balance Account
|
4.50
|
%
|
|
4.50
|
%
|
|
|
||||
Interest Rate to Convert Annuities to Actuarially
Equivalent Lump Sum Amounts
|
4.50
|
%
|
|
4.50
|
%
|
|
|
||||
|
|
|
|
|
|
||||||
December 31, 2016
|
|
|
|
|
|
||||||
Discount Rate
|
4.73
|
%
|
|
4.61
|
%
|
|
4.69
|
%
|
|||
Expected Long-Term Return on Plan Assets
|
7.00
|
%
|
|
|
|
|
|
||||
Rate of Compensation Increase
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|||
Interest Rate Credit for Determining
Projected Cash Balance Account
|
3.03
|
%
|
|
3.03
|
%
|
|
|
||||
Interest Rate to Annuitize Cash
Balance Account
|
5.00
|
%
|
|
5.00
|
%
|
|
|
||||
Interest Rate to Convert Annuities to Actuarially
Equivalent Lump Sum Amounts
|
5.00
|
%
|
|
5.00
|
%
|
|
|
1.
|
Included in Salaries and Employee Benefits on the Consolidated Statements of Income
|
2.
|
Included in Other Operating Expense on the Consolidated Statements of Income
|
Schedule of Defined Benefit Plan Disclosures
Information about Defined Benefit Plan Assets - Employees' Pension Plan
|
||||||||||||||||||||||||
Fair Value Measurements Using:
|
||||||||||||||||||||||||
Asset Category
|
Quoted Prices
in Active Markets
for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Total
|
|
Percent of Total
|
|
Target Allocation Minimum
|
|
Target Allocation Maximum
|
|||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
|
—
|
%
|
|
15.0
|
%
|
Interest-Bearing Money Market Fund
|
3,310
|
|
|
—
|
|
|
—
|
|
|
3,310
|
|
|
6.8
|
%
|
|
—
|
%
|
|
15.0
|
%
|
||||
Arrow Common Stock
1
|
5,381
|
|
|
—
|
|
|
—
|
|
|
5,381
|
|
|
11.1
|
%
|
|
—
|
%
|
|
10.0
|
%
|
||||
North Country Funds - Equity
2
|
16,629
|
|
|
—
|
|
|
—
|
|
|
16,629
|
|
|
34.3
|
%
|
|
|
|
|
|
|
||||
Other Mutual Funds - Equity
|
13,081
|
|
|
—
|
|
|
—
|
|
|
13,081
|
|
|
27.0
|
%
|
|
|
|
|
|
|
||||
Total Equity Funds
|
29,710
|
|
|
—
|
|
|
—
|
|
|
29,710
|
|
|
61.3
|
%
|
|
55.0
|
%
|
|
85.0
|
%
|
||||
North Country Funds - Fixed income
2
|
8,124
|
|
|
—
|
|
|
—
|
|
|
8,124
|
|
|
16.8
|
%
|
|
|
|
|
|
|
||||
Other Mutual Funds - Fixed Income
|
1,920
|
|
|
—
|
|
|
—
|
|
|
1,920
|
|
|
4.0
|
%
|
|
|
|
|
|
|
||||
Total Fixed Income Funds
|
10,044
|
|
|
—
|
|
|
—
|
|
|
10,044
|
|
|
20.8
|
%
|
|
10.0
|
%
|
|
30.0
|
%
|
||||
Total
|
$
|
48,445
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48,445
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
—
|
%
|
|
—
|
%
|
|
15.0
|
%
|
Interest-Bearing Money Market Fund
|
2,682
|
|
|
—
|
|
|
—
|
|
|
2,682
|
|
|
5.0
|
%
|
|
—
|
%
|
|
15.0
|
%
|
||||
Arrow Common Stock
1
|
5,657
|
|
|
—
|
|
|
—
|
|
|
5,657
|
|
|
10.6
|
%
|
|
—
|
%
|
|
10.0
|
%
|
||||
North Country Funds - Equity
2
|
19,680
|
|
|
—
|
|
|
—
|
|
|
19,680
|
|
|
36.7
|
%
|
|
|
|
|
|
|
||||
Other Mutual Funds - Equity
|
15,168
|
|
|
—
|
|
|
—
|
|
|
15,168
|
|
|
28.3
|
%
|
|
|
|
|
|
|
||||
Total Equity Funds
|
34,848
|
|
|
—
|
|
|
—
|
|
|
34,848
|
|
|
65.0
|
%
|
|
55.0
|
%
|
|
85.0
|
%
|
||||
North Country Funds - Fixed income
2
|
8,388
|
|
|
—
|
|
|
—
|
|
|
8,388
|
|
|
15.7
|
%
|
|
|
|
|
|
|
||||
Other Mutual Funds - Fixed Income
|
1,974
|
|
|
—
|
|
|
—
|
|
|
1,974
|
|
|
3.7
|
%
|
|
|
|
|
|
|
||||
Total Fixed Income Funds
|
10,362
|
|
|
—
|
|
|
—
|
|
|
10,362
|
|
|
19.4
|
%
|
|
10.0
|
%
|
|
30.0
|
%
|
||||
Total
|
$
|
53,571
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
53,571
|
|
|
100.0
|
%
|
|
|
|
|
|
Schedule of Defined Benefit Plan Disclosures
|
|||||||||||
|
Employees'
Pension
Plan
|
|
Select
Executive
Retirement
Plan
|
|
Postretirement
Benefit
Plans
|
||||||
Expected Future Benefit Payments
|
|
|
|
|
|
||||||
2019
|
$
|
2,223
|
|
|
$
|
447
|
|
|
$
|
580
|
|
2020
|
2,792
|
|
|
432
|
|
|
594
|
|
|||
2021
|
2,513
|
|
|
416
|
|
|
639
|
|
|||
2022
|
2,756
|
|
|
399
|
|
|
626
|
|
|||
2023
|
2,781
|
|
|
381
|
|
|
614
|
|
|||
2024 - 2028
|
15,162
|
|
|
2,683
|
|
|
3,212
|
|
|||
|
|
|
|
|
|
|
|||||
Estimated Contributions During 2019
|
$
|
—
|
|
|
$
|
447
|
|
|
$
|
580
|
|
|
|
|
|
|
|
||||||
Assumed Health Care Cost Trend Rates
|
|
|
|
|
|
||||||
December 31, 2018
|
|
|
|
|
|
||||||
Health Care Cost Trend
Rate Assumed for Next Year
|
|
|
|
|
7.00
|
%
|
|||||
Rate to which the Cost Trend
Rate is Assumed to Decline
(the Ultimate Trend Rate)
|
|
|
|
|
3.78
|
%
|
|||||
Year that the Rate Reaches
the Ultimate Trend Rate
|
|
|
|
|
2075
|
|
|||||
|
|
|
|
|
|
||||||
December 31, 2017
|
|
|
|
|
|
||||||
Health Care Cost Trend
Rate Assumed for Next Year
|
|
|
|
|
7.25
|
%
|
|||||
Rate to which the Cost Trend
Rate is Assumed to Decline
(the Ultimate Trend Rate)
|
|
|
|
|
3.89
|
%
|
|||||
Year that the Rate Reaches
the Ultimate Trend Rate
|
|
|
|
|
2075
|
|
|||||
|
|
|
|
|
|
||||||
Effect of a One-Percentage Point Change in Assumed
Health Care Cost Trend Rates
|
|
|
|
|
|
||||||
Effect of a One Percentage Point Increase on
Service and Interest Cost Components
|
|
|
|
|
$
|
42
|
|
||||
Effect of a One Percentage Point Decrease on
Service and Interest Cost Components
|
|
|
|
|
(36
|
)
|
|||||
Effect of a One Percentage Point Increase on
Accumulated Postretirement Benefit Obligation
|
|
|
|
|
478
|
|
|||||
Effect of a One Percentage Point Decrease on
Accumulated Postretirement Benefit Obligation
|
|
|
|
|
(417
|
)
|
Note 14:
|
OTHER EXPENSES (Dollars In Thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Information Technology Services
|
$
|
5,670
|
|
|
$
|
5,028
|
|
|
$
|
4,706
|
|
Legal and Other Professional Fees
|
2,460
|
|
|
2,194
|
|
|
2,119
|
|
|||
Postage and Courier
|
982
|
|
|
947
|
|
|
1,087
|
|
|||
Advertising and Promotion
|
1,083
|
|
|
1,035
|
|
|
1,084
|
|
|||
Stationery and Printing
|
782
|
|
|
841
|
|
|
892
|
|
|||
Telephone and Communications
|
853
|
|
|
797
|
|
|
840
|
|
|||
Intangible Asset Amortization
|
262
|
|
|
279
|
|
|
297
|
|
|||
All Other
|
3,507
|
|
|
3,456
|
|
|
3,469
|
|
|||
Total Other Operating Expense
|
$
|
15,599
|
|
|
$
|
14,577
|
|
|
$
|
14,494
|
|
Note 15:
|
INCOME TAXES (Dollars In Thousands)
|
Current Tax Expense:
|
2018
|
|
2017
|
|
2016
|
||||||
Federal
|
$
|
7,668
|
|
|
$
|
11,142
|
|
|
$
|
10,496
|
|
State
|
1,450
|
|
|
917
|
|
|
1,002
|
|
|||
Total Current Tax Expense
|
9,118
|
|
|
12,059
|
|
|
11,498
|
|
|||
Deferred Tax Expense (Benefit):
|
|
|
|
|
|
||||||
Federal
|
(40
|
)
|
|
(1,453
|
)
|
|
(69
|
)
|
|||
State
|
(52
|
)
|
|
(77
|
)
|
|
(214
|
)
|
|||
Total Deferred Tax Expense (Benefit)
|
(92
|
)
|
|
(1,530
|
)
|
|
(283
|
)
|
|||
|
|
|
|
|
|
||||||
Total Provision for Income Taxes
|
$
|
9,026
|
|
|
$
|
10,529
|
|
|
$
|
11,215
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Computed Tax Expense at Statutory Rate
|
$
|
9,514
|
|
|
$
|
13,949
|
|
|
$
|
13,212
|
|
Increase (Decrease) in Income Taxes Resulting From:
|
|
|
|
|
|
||||||
Tax Cuts and Jobs Act impact on deferred remeasurement
|
—
|
|
|
(1,116
|
)
|
|
—
|
|
|||
Tax-Exempt Income
|
(1,407
|
)
|
|
(2,537
|
)
|
|
(2,437
|
)
|
|||
Nondeductible Interest Expense
|
50
|
|
|
52
|
|
|
40
|
|
|||
State Taxes, Net of Federal Income Tax Benefit
|
1,093
|
|
|
698
|
|
|
554
|
|
|||
Tax benefit from stock based compensation
|
(175
|
)
|
|
(134
|
)
|
|
—
|
|
|||
Other Items, Net
|
(49
|
)
|
|
(383
|
)
|
|
(154
|
)
|
|||
Total Provision for Income Taxes
|
$
|
9,026
|
|
|
$
|
10,529
|
|
|
$
|
11,215
|
|
|
2018
|
|
2017
|
||||
Deferred Tax Assets:
|
|
|
|
||||
Allowance for Loan Losses
|
$
|
5,131
|
|
|
$
|
4,730
|
|
Pension and Deferred Compensation Plans
|
2,764
|
|
|
2,595
|
|
||
Pension Liability Included in Accumulated Other Comprehensive Income
|
3,450
|
|
|
2,475
|
|
||
Other
|
342
|
|
|
357
|
|
||
Net Unrealized Losses on Securities Available-for-Sale Included in
Accumulated Other Comprehensive Income
|
1,259
|
|
|
426
|
|
||
Total Gross Deferred Tax Assets
|
12,946
|
|
|
10,583
|
|
||
Valuation Allowance for Deferred Tax Assets
|
—
|
|
|
—
|
|
||
Total Gross Deferred Tax Assets, Net of Valuation Allowance
|
$
|
12,946
|
|
|
$
|
10,583
|
|
Deferred Tax Liabilities:
|
|
|
|
||||
Pension Plans
|
$
|
5,502
|
|
|
$
|
5,487
|
|
Depreciation
|
1,149
|
|
|
955
|
|
||
Deferred Income
|
3,003
|
|
|
2,779
|
|
||
Net Unrealized Gains on Equity Securities
|
166
|
|
|
—
|
|
||
Goodwill
|
3,546
|
|
|
3,566
|
|
||
Total Gross Deferred Tax Liabilities
|
$
|
13,366
|
|
|
$
|
12,787
|
|
Note 16:
|
EARNINGS PER SHARE (Dollars In Thousands, Except Per Share Amounts)
|
Earnings Per Share
|
|||||||||||
|
Year-to-Date Period Ended:
|
||||||||||
|
12/31/2018
|
|
12/31/2017
|
|
12/31/2016
|
||||||
Earnings Per Share - Basic:
|
|
|
|
|
|
||||||
Net Income
|
$
|
36,279
|
|
|
$
|
29,326
|
|
|
$
|
26,534
|
|
Weighted Average Shares - Basic
|
14,408
|
|
|
14,310
|
|
|
14,206
|
|
|||
Earnings Per Share - Basic
|
$
|
2.52
|
|
|
$
|
2.05
|
|
|
$
|
1.87
|
|
|
|
|
|
|
|
||||||
Earnings Per Share - Diluted:
|
|
|
|
|
|
|
|
||||
Net Income
|
$
|
36,279
|
|
|
$
|
29,326
|
|
|
$
|
26,534
|
|
Weighted Average Shares - Basic
|
14,408
|
|
|
14,310
|
|
|
14,206
|
|
|||
Dilutive Average Shares Attributable to Stock Options
|
80
|
|
|
96
|
|
|
91
|
|
|||
Weighted Average Shares - Diluted
|
14,488
|
|
|
14,406
|
|
|
14,297
|
|
|||
Earnings Per Share - Diluted
|
$
|
2.50
|
|
|
$
|
2.04
|
|
|
$
|
1.86
|
|
Note 17:
|
FAIR VALUES (Dollars In Thousands)
|
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)
|
|
Total Gains (Losses)
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities Available-for Sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government & Agency Obligations
|
$
|
46,765
|
|
|
$
|
—
|
|
|
$
|
46,765
|
|
|
$
|
—
|
|
|
|
||
State and Municipal Obligations
|
1,195
|
|
|
—
|
|
|
1,195
|
|
|
—
|
|
|
|
||||||
Mortgage-Backed Securities
|
268,775
|
|
|
—
|
|
|
268,775
|
|
|
—
|
|
|
|
||||||
Corporate and Other Debt Securities
|
800
|
|
|
—
|
|
|
800
|
|
|
—
|
|
|
|
||||||
Total Securities Available-for-Sale
|
317,535
|
|
|
$
|
—
|
|
|
$
|
317,535
|
|
|
$
|
—
|
|
|
|
|
||
Equity Securities
|
1,774
|
|
|
|
|
1,774
|
|
|
|
|
|
||||||||
Total Securities Measured on a Recurring Basis
|
$
|
319,309
|
|
|
|
|
319,309
|
|
|
|
|
|
|||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities Available-for Sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government & Agency Obligations
|
$
|
59,894
|
|
|
$
|
—
|
|
|
$
|
59,894
|
|
|
$
|
—
|
|
|
|
||
State and Municipal Obligations
|
10,349
|
|
|
—
|
|
|
10,349
|
|
|
—
|
|
|
|
||||||
Mortgage-Backed Securities
|
227,596
|
|
|
—
|
|
|
227,596
|
|
|
—
|
|
|
|
||||||
Corporate and Other Debt Securities
|
800
|
|
|
—
|
|
|
800
|
|
|
—
|
|
|
|
||||||
Equity Securities
|
1,561
|
|
|
—
|
|
|
1,561
|
|
|
—
|
|
|
|
||||||
Total Securities Available-for Sale
|
$
|
300,200
|
|
|
$
|
—
|
|
|
$
|
300,200
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair Value of Assets and Liabilities Measured on a Nonrecurring Basis:
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Collateral Dependent Impaired Loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other Real Estate Owned and Repossessed Assets, Net
|
$
|
1,260
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,260
|
|
|
$
|
(669
|
)
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Collateral Dependent Impaired Loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other Real Estate Owned and Repossessed Assets, Net
|
$
|
1,847
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,847
|
|
|
$
|
(569
|
)
|
•
|
Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
|
•
|
Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;
|
•
|
Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
|
Schedule of Fair Values by Balance Sheet Grouping
|
|||||||||||||||||||
|
|
|
|
|
Fair Value Hierarchy
|
||||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and Cash Equivalents
|
$
|
84,239
|
|
|
$
|
84,239
|
|
|
$
|
84,239
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Securities Available-for-Sale
|
317,535
|
|
|
317,535
|
|
|
—
|
|
|
317,535
|
|
|
—
|
|
|||||
Securities Held-to-Maturity
|
283,476
|
|
|
280,338
|
|
|
—
|
|
|
280,338
|
|
|
—
|
|
|||||
Equity Securities
|
1,774
|
|
|
1,774
|
|
|
|
|
1,774
|
|
|
|
|||||||
FHLBNY and Federal Reserve Bank Stock
|
15,506
|
|
|
15,506
|
|
|
—
|
|
|
15,506
|
|
|
—
|
|
|||||
Net Loans
|
2,176,019
|
|
|
2,114,372
|
|
|
—
|
|
|
—
|
|
|
2,114,372
|
|
|||||
Accrued Interest Receivable
|
7,035
|
|
|
7,035
|
|
|
—
|
|
|
7,035
|
|
|
—
|
|
|||||
Deposits
|
2,345,584
|
|
|
2,338,410
|
|
|
—
|
|
|
2,338,410
|
|
|
—
|
|
|||||
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase
|
54,659
|
|
|
54,659
|
|
|
—
|
|
|
54,659
|
|
|
—
|
|
|||||
FHLBNY Overnight Advances
|
234,000
|
|
|
234,000
|
|
|
—
|
|
|
234,000
|
|
|
—
|
|
|||||
Federal Home Loan Bank Term Advances
|
45,000
|
|
|
44,652
|
|
|
—
|
|
|
44,652
|
|
|
—
|
|
|||||
Junior Subordinated Obligations Issued
to Unconsolidated Subsidiary Trusts
|
20,000
|
|
|
20,000
|
|
|
—
|
|
|
20,000
|
|
|
—
|
|
|||||
Accrued Interest Payable
|
570
|
|
|
570
|
|
|
—
|
|
|
570
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and Cash Equivalents
|
$
|
72,838
|
|
|
$
|
72,838
|
|
|
$
|
72,838
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Securities Available-for-Sale
|
300,200
|
|
|
300,200
|
|
|
—
|
|
|
300,200
|
|
|
—
|
|
|||||
Securities Held-to-Maturity
|
335,907
|
|
|
335,901
|
|
|
—
|
|
|
335,901
|
|
|
—
|
|
|||||
Federal Home Loan Bank and Federal Reserve Bank Stock
|
9,949
|
|
|
9,949
|
|
|
—
|
|
|
9,949
|
|
|
—
|
|
|||||
Net Loans
|
1,932,184
|
|
|
1,901,046
|
|
|
—
|
|
|
—
|
|
|
1,901,046
|
|
|||||
Accrued Interest Receivable
|
6,753
|
|
|
6,753
|
|
|
—
|
|
|
6,753
|
|
|
—
|
|
|||||
Deposits
|
2,245,116
|
|
|
2,236,548
|
|
|
—
|
|
|
2,236,548
|
|
|
—
|
|
|||||
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase
|
64,966
|
|
|
64,966
|
|
|
—
|
|
|
64,966
|
|
|
—
|
|
|||||
Federal Home Loan Bank Overnight Advances
|
105,000
|
|
|
105,000
|
|
|
—
|
|
|
105,000
|
|
|
—
|
|
|||||
Federal Home Loan Bank Term Advances
|
55,000
|
|
|
54,781
|
|
|
—
|
|
|
54,781
|
|
|
—
|
|
|||||
Junior Subordinated Obligations Issued
to Unconsolidated Subsidiary Trusts
|
20,000
|
|
|
20,000
|
|
|
—
|
|
|
20,000
|
|
|
—
|
|
|||||
Accrued Interest Payable
|
410
|
|
|
410
|
|
|
—
|
|
|
410
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
Note 18:
|
LEASES (Dollars In Thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
|||
Net Rental Expense
|
$
|
844
|
|
$
|
746
|
|
$
|
822
|
|
|
Operating
Leases
|
|
|
2019
|
$
|
857
|
|
2020
|
626
|
|
|
2021
|
497
|
|
|
2022
|
357
|
|
|
2023
|
286
|
|
|
2024 and beyond
|
2,776
|
|
|
Total Minimum Lease Payments
|
$
|
5,399
|
|
Note 19:
|
REGULATORY MATTERS (Dollars in Thousands)
|
|
Actual
|
|
Minimum Amounts For Capital Adequacy Purposes (including "capital conservation buffer")
|
|
Minimum Amounts To Be Well-Capitalized
|
|||||||||||||||
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
As of December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Capital
(to Risk Weighted Assets):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Arrow
|
$
|
304,109
|
|
|
14.9
|
%
|
|
$
|
202,059
|
|
|
9.9
|
%
|
|
$
|
204,100
|
|
|
10.0
|
%
|
Glens Falls National
|
237,238
|
|
|
14.4
|
%
|
|
163,101
|
|
|
9.9
|
%
|
|
164,749
|
|
|
10.0
|
%
|
|||
Saratoga National
|
56,483
|
|
|
14.2
|
%
|
|
39,379
|
|
|
9.9
|
%
|
|
39,777
|
|
|
10.0
|
%
|
|||
Tier I Capital
(to Risk Weighted Assets):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Arrow
|
283,913
|
|
|
13.9
|
%
|
|
161,361
|
|
|
7.9
|
%
|
|
163,403
|
|
|
8.0
|
%
|
|||
Glens Falls National
|
220,844
|
|
|
13.4
|
%
|
|
130,199
|
|
|
7.9
|
%
|
|
131,847
|
|
|
8.0
|
%
|
|||
Saratoga National
|
52,681
|
|
|
13.2
|
%
|
|
31,529
|
|
|
7.9
|
%
|
|
31,928
|
|
|
8.0
|
%
|
|||
Tier I Capital
(to Average Assets):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Arrow
|
283,913
|
|
|
9.6
|
%
|
|
118,297
|
|
|
4.0
|
%
|
|
147,871
|
|
|
5.0
|
%
|
|||
Glens Falls National
|
220,844
|
|
|
9.1
|
%
|
|
97,074
|
|
|
4.0
|
%
|
|
121,343
|
|
|
5.0
|
%
|
|||
Saratoga National
|
52,681
|
|
|
9.6
|
%
|
|
21,950
|
|
|
4.0
|
%
|
|
27,438
|
|
|
5.0
|
%
|
|||
Common Equity Tier 1 Capital
(to Risk Weighted Assets):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Arrow
|
263,863
|
|
|
12.9
|
%
|
|
130,909
|
|
|
6.4
|
%
|
|
132,954
|
|
|
6.5
|
%
|
|||
Glens Falls National
|
220,794
|
|
|
13.4
|
%
|
|
105,454
|
|
|
6.4
|
%
|
|
107,102
|
|
|
6.5
|
%
|
|||
Saratoga National
|
52,681
|
|
|
13.2
|
%
|
|
25,542
|
|
|
6.4
|
%
|
|
25,941
|
|
|
6.5
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
As of December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Capital
(to Risk Weighted Assets):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Arrow
|
278,163
|
|
|
15.0
|
%
|
|
172,461
|
|
|
9.3
|
%
|
|
185,442
|
|
|
10.0
|
%
|
|||
Glens Falls National
|
220,275
|
|
|
14.6
|
%
|
|
140,312
|
|
|
9.3
|
%
|
|
150,873
|
|
|
10.0
|
%
|
|||
Saratoga National
|
48,822
|
|
|
14.0
|
%
|
|
32,432
|
|
|
9.3
|
%
|
|
34,873
|
|
|
10.0
|
%
|
|||
Tier I Capital
(to Risk Weighted Assets):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Arrow
|
259,378
|
|
|
14.0
|
%
|
|
135,247
|
|
|
7.3
|
%
|
|
148,216
|
|
|
8.0
|
%
|
|||
Glens Falls National
|
205,200
|
|
|
13.6
|
%
|
|
110,144
|
|
|
7.3
|
%
|
|
120,706
|
|
|
8.0
|
%
|
|||
Saratoga National
|
45,311
|
|
|
13.0
|
%
|
|
25,444
|
|
|
7.3
|
%
|
|
27,884
|
|
|
8.0
|
%
|
|||
Tier I Capital
(to Average Assets):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Arrow
|
259,378
|
|
|
9.5
|
%
|
|
109,212
|
|
|
4.0
|
%
|
|
136,515
|
|
|
5.0
|
%
|
|||
Glens Falls National
|
205,200
|
|
|
9.1
|
%
|
|
90,198
|
|
|
4.0
|
%
|
|
112,747
|
|
|
5.0
|
%
|
|||
Saratoga National
|
45,311
|
|
|
9.4
|
%
|
|
19,281
|
|
|
4.0
|
%
|
|
24,102
|
|
|
5.0
|
%
|
|||
Common Equity Tier 1 Capital
(to Risk Weighted Assets):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Arrow
|
239,326
|
|
|
12.9
|
%
|
|
107,604
|
|
|
5.8
|
%
|
|
120,591
|
|
|
6.5
|
%
|
|||
Glens Falls National
|
205,148
|
|
|
13.6
|
%
|
|
87,490
|
|
|
5.8
|
%
|
|
98,049
|
|
|
6.5
|
%
|
|||
Saratoga National
|
45,311
|
|
|
13.0
|
%
|
|
20,216
|
|
|
5.8
|
%
|
|
22,656
|
|
|
6.5
|
%
|
Note 20:
|
PARENT ONLY FINANCIAL INFORMATION (Dollars In Thousands)
|
BALANCE SHEETS
|
December 31,
|
||||||
ASSETS
|
2018
|
|
2017
|
||||
Interest-Bearing Deposits with Subsidiary Banks
|
$
|
2,298
|
|
|
$
|
2,186
|
|
Available-for-Sale Securities
|
—
|
|
|
1,562
|
|
||
Equity Securities
|
1,774
|
|
|
—
|
|
||
Investment in Subsidiaries at Equity
|
280,408
|
|
|
261,622
|
|
||
Other Assets
|
8,626
|
|
|
7,987
|
|
||
Total Assets
|
$
|
293,106
|
|
|
$
|
273,357
|
|
LIABILITIES
|
|
|
|
||||
Junior Subordinated Obligations Issued to
Unconsolidated Subsidiary Trusts
|
$
|
20,000
|
|
|
$
|
20,000
|
|
Other Liabilities
|
3,522
|
|
|
3,754
|
|
||
Total Liabilities
|
23,522
|
|
|
23,754
|
|
||
STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Total Stockholders’ Equity
|
269,584
|
|
|
249,603
|
|
||
Total Liabilities and Stockholders’ Equity
|
$
|
293,106
|
|
|
$
|
273,357
|
|
STATEMENTS OF INCOME
|
Years Ended December 31,
|
||||||||||
Income:
|
2018
|
|
2017
|
|
2016
|
||||||
Dividends from Bank Subsidiaries
|
$
|
13,300
|
|
|
$
|
12,800
|
|
|
$
|
11,650
|
|
Interest and Dividends on Investments
|
48
|
|
|
53
|
|
|
117
|
|
|||
Other Income (Including Management Fees)
|
907
|
|
|
677
|
|
|
635
|
|
|||
Total Income
|
14,255
|
|
|
13,530
|
|
|
12,402
|
|
|||
Expense:
|
|
|
|
|
|
||||||
Interest Expense
|
976
|
|
|
781
|
|
|
691
|
|
|||
Other Expense
|
1,175
|
|
|
958
|
|
|
942
|
|
|||
Total Expense
|
2,151
|
|
|
1,739
|
|
|
1,633
|
|
|||
Income Before Income Tax Benefit and Equity
|
|
|
|
|
|
||||||
in Undistributed Net Income of Subsidiaries
|
12,104
|
|
|
11,791
|
|
|
10,769
|
|
|||
Income Tax Benefit
|
686
|
|
|
225
|
|
|
482
|
|
|||
Equity in Undistributed Net Income of Subsidiaries
|
23,489
|
|
|
17,310
|
|
|
15,283
|
|
|||
Net Income
|
$
|
36,279
|
|
|
$
|
29,326
|
|
|
$
|
26,534
|
|
STATEMENTS OF CASH FLOWS
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net Income
|
$
|
36,279
|
|
|
$
|
29,326
|
|
|
$
|
26,534
|
|
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
|
|
|
|
|
|
||||||
Undistributed Net Income of Subsidiaries
|
(23,489
|
)
|
|
(17,310
|
)
|
|
(15,283
|
)
|
|||
Shares Issued Under the Directors’ Stock Plan
|
205
|
|
|
233
|
|
|
205
|
|
|||
Changes in Other Assets and Other Liabilities
|
(918
|
)
|
|
(1,179
|
)
|
|
(899
|
)
|
|||
Net Cash Provided by Operating Activities
|
12,077
|
|
|
11,070
|
|
|
10,557
|
|
|||
Cash Flows from Investing Activities:
|
|
|
|
|
|
||||||
Proceeds of Securities Held-to-Maturity
|
—
|
|
|
1,000
|
|
|
—
|
|
|||
Net Cash Provided by Investing Activities
|
—
|
|
|
1,000
|
|
|
—
|
|
|||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||||||
Stock Options Exercised
|
2,255
|
|
|
1,190
|
|
|
2,404
|
|
|||
Shares Issued Under the Employee Stock Purchase Plan
|
505
|
|
|
496
|
|
|
493
|
|
|||
Shares Issued for Dividend Reinvestment Plans
|
1,761
|
|
|
1,684
|
|
|
1,743
|
|
|||
Tax Benefit for Exercises of Stock Options
|
—
|
|
|
—
|
|
|
188
|
|
|||
Purchase of Treasury Stock
|
(2,097
|
)
|
|
(3,248
|
)
|
|
(2,141
|
)
|
|||
Cash Dividends Paid
|
(14,389
|
)
|
|
(13,599
|
)
|
|
(13,092
|
)
|
|||
Net Cash Used in Financing Activities
|
(11,965
|
)
|
|
(13,477
|
)
|
|
(10,405
|
)
|
|||
Net Increase (Decrease) in Cash and Cash Equivalents
|
112
|
|
|
(1,407
|
)
|
|
152
|
|
|||
Cash and Cash Equivalents at Beginning of the Year
|
2,186
|
|
|
3,593
|
|
|
3,441
|
|
|||
Cash and Cash Equivalents at End of the Year
|
$
|
2,298
|
|
|
$
|
2,186
|
|
|
$
|
3,593
|
|
Supplemental Disclosures to Statements of
Cash Flow Information:
|
|
|
|
|
|
||||||
Interest Paid
|
$
|
976
|
|
|
$
|
781
|
|
|
$
|
691
|
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
–
None.
|
Exhibit
Number
|
Exhibit
|
3.(i)
|
|
3.(ii)
|
|
4.1
|
|
4.2
|
|
4.3
|
|
4.4
|
|
4.5
|
|
4.6
|
|
4.7
|
|
4.8
|
|
10.1
|
|
10.2
|
|
10.3
|
|
10.4
|
|
10.5
|
Exhibit
Number
|
Exhibit
|
10.6
|
|
10.7
|
|
10.8
|
|
10.9
|
|
10.10
|
|
10.11
|
|
10.12
|
|
10.13
|
|
10.14
|
|
10.15
|
|
10.16
|
|
10.17
|
|
10.18
|
|
10.19
|
|
10.20
|
|
10.21
|
|
10.22
|
|
14
|
Date: March 08, 2019
|
By:
/s/ Thomas J. Murphy
Thomas J. Murphy
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
Date: March 08, 2019
|
By:
/s/ Edward J. Campanella
Edward J. Campanella
Senior Vice President, Treasurer and
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
/s/ Mark L. Behan
Mark L. Behan
Director
|
/s/ Elizabeth A. Miller
Elizabeth A. Miller
Director
|
|
|
/s/ Tenée R. Casaccio
Tenée R. Casaccio
Director
|
/s/ Thomas J. Murphy
Thomas J. Murphy
Director
|
|
|
/s/ Michael B. Clarke
Michael B. Clarke
Director
|
/s/ Raymond F. O'Conor
Raymond F. O'Conor
Director
|
|
|
/s/ Gary C. Dake
Gary C. Dake
Director
|
/s/ William L. Owens
William L. Owens
Director
|
|
|
/s/ Thomas L. Hoy
Thomas L. Hoy
Director and Chairman
|
/s/ Colin L. Read
Colin L. Read
Director
|
|
|
/s/ David G. Kruczlnicki
David G. Kruczlnicki
Director
|
/s/ Richard J. Reisman, D.M.D.
Richard J. Reisman, D.M.D.
Director
|
|
|
|
|
Vesting Date
|
Number of Restricted Stock Units That Vest
|
January 31, 2021
|
100% of Restricted Stock Units
|
|
ARROW FINANCIAL CORPORATION
|
|
/s/ Thomas L. Hoy
Thomas L. Hoy
Chairman of the Board of Directors
Arrow Financial Corporation
|
|
THOMAS J. MURPHY
|
|
_____________________
Thomas J. Murphy
President and CEO Arrow Financial Corporation
|
Subsidiary
|
Percent of Common Stock Owned
|
Subsidiaries of Arrow Financial Corporation
:
|
|
Glens Falls National Bank and Trust Company
A Nationally Chartered Commercial Bank
Headquarters: Glens Falls, NY
|
100
|
Saratoga National Bank and Trust Company
A Nationally Chartered Commercial Bank
Headquarters: Saratoga Springs, NY
|
100
|
Arrow Capital Statutory Trust II
A Non-deposit Trust Company
Headquarters: Glens Falls, NY
|
100
|
Arrow Capital Statutory Trust III
A Non-deposit Trust Company
Headquarters: Glens Falls, NY
|
100
|
Subsidiaries of Glens Falls National Bank and Trust Company:
|
|
Arrow Properties, Inc.
A Real Estate Investment Trust
(Glens Falls National Bank also holds approximately 82%
of non-voting preferred stock)
Headquarters: Glens Falls, NY
|
100
|
North Country Investment Advisers, Inc.
A New York Corporation
Headquarters: Glens Falls, NY
|
100
|
NC Financial Services, Inc.
A New York Corporation
Headquarters: Warrensburg, NY
|
90
|
Glens Falls National Community Development Corporation
A New York Corporation
Headquarters: Glens Falls, NY
|
100
|
Upstate Agency, LLC
A New York Corporation
Headquarters: Warrensburg, NY
|
100
|
Subsidiaries of Saratoga National Bank and Trust Company:
|
|
NC Financial Services, Inc.
A New York Corporation
Headquarters: Warrensburg, NY
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10
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
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5.
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The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
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5.
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The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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