PARENT ONLY FINANCIAL INFORMATION (Dollars In Thousands)

Condensed financial information for Arrow Financial Corporation is as follows:



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

The Statement of Changes in Stockholders’ Equity is not reported because it is identical to the Consolidated Statement of Changes in Stockholders’ Equity.



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