The following two tables present loan balances outstanding as of March 31, 2024, December 31, 2023 and March 31, 2023 and an analysis of the recorded investment in loans that are past due at these dates. Generally, Arrow considers a loan past due 30 or more days when the borrower is two payments past due. Loans held-for-sale of $215, $165 and $417 as of March 31, 2024, December 31, 2023 and March 31, 2023, respectively, are included in the residential real estate balances for current loans.


Schedule of Past Due Loans by Loan Category
			Commercial
	Commercial		Real Estate		Consumer		Residential		Total
March 31, 2024
Loans Past Due 30-59 Days	$	419	$	494	$	12,140	$	2,215	$	15,268
Loans Past Due 60-89 Days	24		—		2,600		409		3,033
Loans Past Due 90 or more Days	35		15,148		1,429		3,506		20,118
Total Loans Past Due	478		15,642		16,169		6,130		38,419
Current Loans	161,911		735,327		1,109,585		1,213,516		3,220,339
Total Loans	$	162,389	$	750,969	$	1,125,754	$	1,219,646	$	3,258,758

December 31, 2023
Loans Past Due 30-59 Days	$	298	$	—	$	13,511	$	3,715	$	17,524
Loans Past Due 60-89 Days	21		636		5,579		861		7,097
Loans Past Due 90 or more Days	30		15,308		1,801		3,140		20,279
Total Loans Past Due	349		15,944		20,891		7,716		44,900
Current Loans	155,875		729,543		1,090,776		1,191,814		3,168,008
Total Loans	$	156,224	$	745,487	$	1,111,667	$	1,199,530	$	3,212,908

March 31, 2023
Loans Past Due 30-59 Days	$	62	$	—	$	11,237	$	1,593	$	12,892
Loans Past Due 60-89 Days	47		—		4,439		—		4,486
Loans Past Due 90 or more Days	—		—		3,005		3,143		6,148
Total Loans Past Due	109		—		18,681		4,736		23,526
Current Loans	135,808		715,357		1,054,688		1,075,973		2,981,826
Total Loans	$	135,917	$	715,357	$	1,073,369	$	1,080,709	$	3,005,352


Schedule of Non Accrual Loans by Category
			Commercial
March 31, 2024	Commercial		Real Estate		Consumer		Residential		Total
Loans 90 or More Days Past Due and Still Accruing Interest	$	—	$	—	$	13	$	1,134	$	1,147
Nonaccrual Loans	35		15,148		1,525		3,536		20,244
Nonaccrual With No Allowance for Credit Loss	35		15,148		1,525		3,536		20,244
Interest Income on Nonaccrual Loans	—		—		—		—		—

December 31, 2023
Loans 90 or More Days Past Due and Still Accruing Interest	$	—	$	—	$	6	$	446	$	452
Nonaccrual Loans	30		15,308		1,877		3,430		20,645

March 31, 2023
Loans 90 or More Days Past Due and Still Accruing Interest	$	—	$	—	$	—	$	241	$	241
Nonaccrual Loans	8		3,085		3,123		4,636		10,852

Commercial - Arrow offers a variety of loan options to meet the specific needs of our commercial customers including term loans, time notes and lines of credit. Such loans are made available to businesses for working capital needs such as inventory and receivables, business expansion and equipment purchases. Generally, a collateral lien is placed on equipment or other assets owned by the borrower. Generally, these loans carry a higher risk than commercial real estate loans due to the nature of the underlying collateral, which can be business assets such as equipment and accounts receivable and generally have a lower liquidation value than real estate. In the event of default by the borrower, Arrow may be required to liquidate collateral at deeply discounted values. To reduce the risk, management usually obtains personal guarantees to support the borrowing, as permitted by applicable law.

Commercial Real Estate - Arrow offers commercial real estate loans to finance real estate purchases, refinancings, expansions and improvements to commercial properties. Commercial real estate loans are made to finance the purchases of real property which generally consists of real estate with completed structures. These commercial real estate loans are typically secured by first liens on the real estate, which may include apartments, commercial structures, housing businesses, healthcare facilities, and both owner- and non-owner-occupied facilities. These loans are typically less risky than commercial loans, since they are secured by real estate and buildings, and are generally originated in amounts of no more than 80% of the appraised value of the property. However, Arrow also offers commercial construction and land development loans to finance projects. Many projects will ultimately be used by the borrowers' businesses, while others are developed for resale. These real estate loans are also typically secured by first liens on the real estate, which may include apartments, commercial structures, housing businesses, healthcare facilities and both owner-occupied and non-owner-occupied facilities. There is enhanced risk during the construction period, since the loan is secured by an incomplete project. Arrow’s Commercial Real Estate loans are primarily located within the footprint of the Company’s branch network, with some loans extending into the greater upstate New York area. Arrow does not provide Commercial Real Estate loans in major metropolitan areas such as New York City, Boston, etc

Consumer Loans - This category is primarily comprised of automobile loans. Arrow primarily finances the purchases of automobiles indirectly through dealer relationships located throughout upstate New York and Vermont. Most automobile loans carry a fixed rate of interest with principal repayment terms typically ranging from three to seven years. Automobile loans are underwritten on a secured basis using the underlying collateral being financed. Arrow also offers a variety of consumer installment loans to finance personal expenditures. Most of these loans carry a fixed rate of interest with principal repayment terms typically ranging from one to five years, based upon the nature of the collateral and the size of the loan. In addition to installment loans, Arrow also offers personal lines of credit and overdraft protection. Several of these consumer loans are unsecured, which carry a higher risk of loss.

Residential - Residential real estate loans consist primarily of loans secured by first or second mortgages on primary residences. Arrow originates fixed-rate and adjustable-rate one-to-four-family residential real estate loans for the construction, purchase of real estate or refinancing of an existing mortgage. These loans are collateralized primarily by owner-occupied properties generally located in Arrow's market area. Loans on one-to-four-family residential real estate are generally originated in amounts of no more than 80% of the purchase price or appraised value (whichever is lower), or have private mortgage insurance. Arrow’s underwriting analysis for residential mortgage loans typically includes credit verification, independent appraisals, and a review of the borrower’s financial condition. Mortgage title insurance and hazard insurance are normally required. It is Arrow's general practice to underwrite residential real estate loans to secondary market standards. Construction loans have a unique risk, because they are secured by an incomplete dwelling. This risk is reduced through periodic site inspections, including one at each loan draw period. In addition, Arrow offers fixed home equity loans, as well as home equity lines of credit to consumers to finance home improvements, debt consolidation, education and other uses. Arrow's policy allows for a maximum loan to value ratio of 80%, although periodically higher advances are allowed. Arrow originates home equity lines of credit and second mortgage loans (loans secured by a second junior lien position on one-to-four-family residential real estate). Risk is generally reduced through underwriting criteria, which include credit verification, appraisals, a review of the borrower's financial condition, and personal cash flows. A security interest, with title insurance when necessary, is taken in the underlying real estate.

Loan segments were selected by class code and application code to ensure each segment is comprised of loans with homogenous loan characteristics and similar risk profiles. The resulting loan segments are commercial, commercial real estate, consumer and residential real estate loans. The consumer segment is mainly comprised of automobile loans, and since they are relatively short-term in nature, with similar dollar amounts and collateral, the vintage analysis method was selected to determine the credit loss reserve. The vintage method utilizes Arrow loan data exclusively as the method calculates a loss rate based on the total origination balance of the loans by year and the charge-off and recovery rate of the same origination year. Arrow maintains, over the life of the loan, the loss curve by vintage year. The discounted cash flow method (DCF) is used to calculate the reserve for credit losses for the commercial, commercial real estate and residential real estate segments.

The March 31, 2024 allowance for credit losses calculation incorporated a reasonable and supportable forecast period to account for economic conditions utilized in the measurement. The quantitative model utilized an economic forecast sourced from reputable third-parties that reflects the economic conditions with a slight improvement in the national unemployment rate of approximately 0.32% during the six-quarter forecast period and forecasted gross domestic product projected to improve by approximately 0.65%. The home price index (HPI) forecast increased approximately 0.03% from the previous quarter level. The overall change in the allowance from December 31, 2023 was primarily driven by the following factors: net loan growth contributed $0.4 million, changes in macro economic conditions reduced the allowance by $1.8 million, qualitative factors increased the allowance by $0.9 million, and a specific reserve of $0.7 million tied to overdraft balances from an instance of check fraud related to one customer relationship. The first quarter provision


Allowance for Credit Losses
	Commercial		Commercial Real Estate		Consumer		Residential		Total
Rollforward of the Allowance for Credit Losses for the Quarterly Period:








December 31, 2023	$	1,958	$	15,521	$	2,566	$	11,220	$	31,265
Charge-offs	$	(9)	$	—	$	(1,274)	$	—	$	(1,283)
Recoveries	$	—	$	—	$	962	$	—	$	962
Provision	$	893	$	(1,353)	$	502	$	575	$	617
March 31, 2024	$	2,842	$	14,168	$	2,756	$	11,795	$	31,561











December 31, 2022	$	1,961	$	15,213	$	2,585	$	10,193	$	29,952
Charge-offs	$	—	$	—	$	(1,328)	$	—	$	(1,328)
Recoveries	$	—	$	—	$	606	$	—	$	606
Provision	$	(224)	$	289	$	1,000	$	489	$	1,554
March 31, 2023	$	1,737	$	15,502	$	2,863	$	10,682	$	30,784

Financial instrument credit losses apply to off-balance sheet credit exposures such as unfunded loan commitments and standby letters of credit. A liability for expected credit losses for off-balance sheet exposures is recognized if the entity has a present contractual obligation to extend the credit and the obligation is not unconditionally cancellable by the entity. Changes in this allowance are reflected in other operating expenses within the non-interest expense category. As of March 31, 2024, the total unfunded commitment off-balance sheet credit exposure was $1.1 million.

All loans not included in the vintage analysis method that exceed $250,000, which are on nonaccrual status, are evaluated on an individual basis. Arrow made the policy election to apply a practical expedient for collateral dependent financial assets when the borrower is experiencing financial difficulty and the repayment is expected through the sale of the collateral. This allows Arrow to use fair value of the collateral at the reporting date adjusted for estimated cost to sell when recording the net carrying amount of the asset and determining the allowance for credit losses for a financial asset. In the event where the repayment of a collateral dependent financial asset is expected to be provided substantially through the operating of the collateral, Arrow will use fair value of the collateral at the reporting date when recording the net carrying amount of the asset and determining the allowance for credit losses. As of March 31, 2024, there were five total relationships identified to be evaluated for loss on an individual basis which had an amortized cost basis of $17.1 million and none had an allowance for credit loss.


Allowance for Credit Losses - Collectively and Individually Evaluated
	Commercial		Commercial Real Estate		Consumer		Residential		Total
March 31, 2024
Ending Loan Balance - Collectively Evaluated	$	160,894	$	735,821	$	1,125,754	$	1,217,758	$	3,240,227
Allowance for Credit Losses - Loans Collectively Evaluated	2,110		14,168		2,756		11,795		30,829

Ending Loan Balance - Individually Evaluated	1,495		15,148		—		1,888		18,531
Allowance for Credit Losses - Loans Individually Evaluated	732		—		—		—		732

December 31, 2023
Ending Loan Balance - Collectively Evaluated	$	156,224	$	730,179	$	1,111,667	$	1,198,084	$	3,196,154
Allowance for Credit Losses - Loans Collectively Evaluated	1,958		15,521		2,566		11,220		31,265
Ending Loan Balance - Individually Evaluated	—		15,308		—		1,446		16,754
Allowance for Credit Losses - Loans Individually Evaluated	—		—		—		—		—

March 31, 2023
Ending Loan Balance - Collectively Evaluated	$	135,917	$	712,330	$	1,073,369	$	1,078,760	$	3,000,376
Allowance for Credit Losses - Loans Collectively Evaluated	1,737		15,502		2,863		10,682		30,784
Ending Loan Balance - Individually Evaluated	—		3,027		—		1,949		4,976
Allowance for Credit Losses - Loans Individually Evaluated	—		—		—		—		—

Through the provision for credit losses, an allowance for credit losses is maintained that reflects the best estimate of the calculated expected credit losses in Arrow's loan portfolio as of the balance sheet date. Additions are made to the allowance for credit losses through a periodic provision for credit losses. Actual credit losses are charged against the allowance for credit losses when loans are deemed uncollectible and recoveries of amounts previously charged off are recorded as credits to the allowance for credit losses.


	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis		Revolving Loan Converted to Term		Total
March 31, 2024	2024		2023		2022		2021		2020		Prior
Commercial:
Risk rating
Satisfactory	$	8,925	$	25,424	$	18,661	$	17,276	$	5,645	$	69,588	$	9,915	$	—	$	155,434
Special mention	—		—		—		—		106		—		—		—		106
Substandard	—		—		—		—		—		3,129		3,720		—		6,849
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Loans	$	8,925	$	25,424	$	18,661	$	17,276	$	5,751	$	72,717	$	13,635	$	—	$	162,389

Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	9	$	—	$	—	$	—	$	9

Commercial Real Estate:
Risk rating
Satisfactory	$	9,548	$	50,480	$	109,750	$	60,070	$	84,319	$	368,036	$	1,885	$	—	$	684,088
Special mention	—		—		3,092		—		—		15,380		—		—		18,472
Substandard	—		149		9,038		1,670		2,328		35,102		122		—		48,409
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Real Estate Loans	$	9,548	$	50,629	$	121,880	$	61,740	$	86,647	$	418,518	$	2,007	$	—	$	750,969

Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Consumer:
Risk rating
Performing	$	83,515	$	261,853	$	208,788	$	110,546	$	50,713	$	407,586	$	459	$	—	$	1,123,460
Nonperforming	—		136		291		182		64		1,611		10		—		2,294
Total Consumer Loans	$	83,515	$	261,989	$	209,079	$	110,728	$	50,777	$	409,197	$	469	$	—	$	1,125,754

Current-period gross charge-offs	$	583	$	150	$	248	$	177	$	104	$	12	$	—	$	—	$	1,274

Residential:
Risk rating
Performing	$	12,555	$	82,726	$	185,667	$	166,141	$	86,843	$	564,901	$	115,104	$	—	$	1,213,937
Nonperforming	—		189		442		1,654		—		3,094		330		—		5,709
Total Residential Loans	$	12,555	$	82,915	$	186,109	$	167,795	$	86,843	$	567,995	$	115,434	$	—	$	1,219,646

Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total Loans	$	114,543	$	420,957	$	535,729	$	357,539	$	230,018	$	1,468,427	$	131,545	$	—	$	3,258,758


	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis		Revolving Loan Converted to Term		Total
December 31, 2023	2023		2022		2021		2020		2019		Prior
Commercial:
Risk rating
Satisfactory	$	54,584	$	34,047	$	23,470	$	9,655	$	4,107	$	13,360	$	8,586	$	—	$	147,809
Special mention	—		—		—		117		—		—		—		—		117
Substandard	—		—		—		—		—		3,199		5,099		—		8,298
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Loans	$	54,584	$	34,047	$	23,470	$	9,772	$	4,107	$	16,559	$	13,685	$	—	$	156,224

Commercial Real Estate:
Risk rating
Satisfactory	$	81,582	$	151,818	$	105,365	$	120,845	$	41,406	$	174,516	$	1,667	$	—	$	677,199
Special mention	—		10,439		—		—		—		4,084		—		—		14,523
Substandard	150		9,169		1,670		2,533		791		38,955		497		—		53,765
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Real Estate Loans	$	81,732	$	171,426	$	107,035	$	123,378	$	42,197	$	217,555	$	2,164	$	—	$	745,487

Consumer:
Risk rating
Performing	$	405,099	$	355,217	$	195,799	$	93,708	$	44,206	$	15,252	$	—	$	—	$	1,109,281
Nonperforming	208		783		551		210		81		85		468		—		2,386
Total Consumer Loans	$	405,307	$	356,000	$	196,350	$	93,918	$	44,287	$	15,337	$	468	$	—	$	1,111,667

Residential:
Risk rating
Performing	$	161,878	$	231,365	$	192,588	$	116,451	$	73,875	$	296,935	$	122,573	$	—	$	1,195,665
Nonperforming	—		—		444		666		127		2,268		360		—		3,865
Total Residential Loans	$	161,878	$	231,365	$	193,032	$	117,117	$	74,002	$	299,203	$	122,933	$	—	$	1,199,530

Total Loans	$	703,501	$	792,838	$	519,887	$	344,185	$	164,593	$	548,654	$	139,250	$	—	$	3,212,908


	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis		Revolving Loan Converted to Term		Total
March 31, 2023	2023		2022		2021		2020		2019		Prior
Commercial:
Risk rating
Satisfactory	$	4,727	$	35,164	$	26,254	$	12,765	$	6,830	$	35,014	$	8,095	$	—	$	128,849
Special mention	—		—		—		150		—		26		26		—		202
Substandard	—		—		—		230		420		3,420		2,796		—		6,866
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Loans	$	4,727	$	35,164	$	26,254	$	13,145	$	7,250	$	38,460	$	10,917	$	—	$	135,917

Commercial Real Estate:
Risk rating
Satisfactory	$	12,605	$	157,534	$	115,019	$	122,364	$	42,710	$	212,115	$	1,679	$	—	$	664,026
Special mention	—		—		—		—		—		5,043		—		—		5,043
Substandard	—		10,150		—		5,472		806		29,832		28		—		46,288
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Real Estate Loans	$	12,605	$	167,684	$	115,019	$	127,836	$	43,516	$	246,990	$	1,707	$	—	$	715,357

Consumer:
Risk rating
Performing	$	71,838	$	379,339	$	261,675	$	138,034	$	75,650	$	143,190	$	—	$	—	$	1,069,726
Nonperforming	—		1,030		1,090		434		261		371		457		—		3,643
Total Consumer Loans	$	71,838	$	380,369	$	262,765	$	138,468	$	75,911	$	143,561	$	457	$	—	$	1,073,369

Residential:
Risk rating
Performing	$	15,565	$	219,336	$	197,436	$	124,992	$	80,986	$	323,945	$	113,220	$	—	$	1,075,480
Nonperforming	—		550		435		939		636		2,462		207		—		5,229
Total Residential Loans	$	15,565	$	219,886	$	197,871	$	125,931	$	81,622	$	326,407	$	113,427	$	—	$	1,080,709

Total Loans	$	104,735	$	803,103	$	601,909	$	405,380	$	208,299	$	755,418	$	126,508	$	—	$	3,005,352

2) Special Mention - Loans in this category have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. "Special mention" assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. Loans which might be assigned this credit quality indicator include loans to borrowers with deteriorating financial strength and/or earnings record and loans with potential for problems due to weakening economic or market conditions;

3) Substandard - Loans classified as “substandard” are inadequately protected by the current sound net worth or paying capacity of the borrower or the collateral pledged, if any. Loans in this category have well defined weaknesses that jeopardize the repayment. They are characterized by the distinct possibility that Arrow will sustain some loss if the deficiencies are not corrected. “Substandard” loans may include loans which are likely to require liquidation of collateral to effect repayment, and other loans where character or ability to repay has become suspect. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified substandard;

4) Doubtful - Loans classified as “doubtful” have all of the weaknesses inherent in those classified as “substandard” with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of current existing facts, conditions, and values, highly questionable and improbable. Although possibility of loss is extremely high, classification of these loans as “loss” has been deferred due to specific pending factors or events which may strengthen the value (e.g. possibility of additional collateral, injection of

Commercial loans are generally evaluated on an annual basis depending on the size and complexity of the loan relationship, unless the credit related quality indicator falls to a level of "special mention" or below, when the loan is evaluated quarterly. The credit quality indicator is one of the factors used in assessing the level of incurred risk of loss in our commercial related loan portfolios.