Arrow Financial Ranked One of Nation’s Top 10 Community Banks

A national review of more than one thousand community banks rated Arrow Financial Corporation (NasdaqGS® — AROW) as the eighth-best community bank in the United States. The review, conducted by SNL Financial and reported in the June 2010 publication of the US Banker, ranked 1,175 community banks that were actively traded or registered with the U. S. Security and Exchange Commission and having less than $2 billion in assets – by their average return on equity (ROE) over the 3 years ending December 31, 2009.

The US Banker article listed the top 200 performers. Arrow’s 3-year average ROE of 15.70% led to its #8 ranking. The magazine noted “banks with ROEs of 13 percent or better are stars.” No other community bank with assets less than $2 billion in Upstate New York was ranked in the top ten. [The next highest rank received by a community bank headquartered in the greater Albany Capital Region was #86.] The stellar ranking reflects the consistent record of Arrow — which operates both Glens Falls National Bank & Trust Company and Saratoga National Bank & Trust Company — as a high-performing and well-managed banking company. "We are very pleased to be recognized in this elite group, especially when it is based on return-on-equity over a three-year period, not just one year,” said Thomas L. Hoy, Arrow’s Chairman, President and CEO.

Arrow reported record earnings for 2009 of $21.8 million. This achievement was particularly significant as it was attained during a broad, national economic slowdown that created hardships for many banks around the country. 2009 saw the highest failure rate for financial institutions in 15 years, due in large part to the collapse of subprime or poor quality mortgage loans resulting from the sharp decline in home values across the country.

Arrow has built a solid balance sheet based upon prudent lending to customers and businesses, and has not participated in high-risk lending programs. In addition to record earnings, Arrow has continued to serve as a source of “local economic stimulus” in its regional base. During 2009, Arrow’s subsidiary banks actively pursued a program of extending mortgage loans to qualified borrowers for the purchase of new or existing homes in Arrow’s five-county market of Warren, Washington, Saratoga, Clinton and Essex counties. In 2009, Arrow’s subsidiary banks extended more than $91 million in mortgage loan originations. In July, Arrow announced plans to expand its Glens Falls headquarters, and remains committed to “Hometown, USA” in this, its 160th year of operation.

“Despite the negative news about banks reported almost daily in the national media, we have continued to work diligently and our results support our position that adherence to the fundamentals remains important,” Mr. Hoy said. “While we are honored to be recognized as one of the best community banking organizations in the nation, we know that a high level of customer service, in addition to creating strong shareholder value, are important benchmarks of success. Focusing on the fundamentals has served us well over the last century and a half, and we will continue this focus going forward.”

Arrow Financial Corporation, a multi-bank holding company, is the parent of Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company. Other subsidiaries include North Country Investment Advisers, Inc., Capital Financial Group, Inc., and Loomis and LaPann, Inc.