8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report: July 24, 2024

(Date of earliest event reported)

ARROW FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

New York	0-12507	22-2448962
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS 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

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of each exchange on which registered
Common Stock, Par Value $1.00 per share	AROW	NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act	☐

Item 2.02.     Results of Operations and Financial Condition.

On July 25, 2024, Arrow Financial Corporation (the "Company") issued a press release containing unaudited financial information and accompanying discussion for the quarter and year-to-date period ended June 30, 2024.  A copy of this press release is furnished as Exhibit 99.1 to this report on Form 8-K.

Item 7.01.     Regulation FD Disclosure.

On July 25, 2024, the Company made available certain presentation material (the "Second Quarter 2024 Investor Presentation"), which includes among other things, a review of financial results and trends through the period ended June 30, 2024. The furnished Second Quarter 2024 Investor Presentation should be read in conjunction with our Earnings Release for the quarter ended June 30, 2024.

A copy of the presentation material is included as Exhibit 99.2 to this current report on Form 8-K and is incorporated herein by reference.

The information furnished under this Report, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or subject to the liabilities of that section. The information shall not be deemed incorporated by reference into any other filing with the Securities and Exchange Commission made by the Company, regardless of any general incorporation language in such filing.

Item 8.01.     Other Events.

On July 24, 2024, the Board of Directors (the “Board”) of the Company declared a quarterly cash dividend of $0.27 per share payable August 23, 2024 to shareholders of record on August 12, 2024.

Item 9.01.    Financial Statements and Exhibits.

Exhibits:

Exhibit No. Description

Exhibit 99.1 Arrow Financial Corporation Earnings Press Release dated July 25, 2024

Exhibit 99.2 Arrow Financial Corporation Second Quarter 2024 Investor Presentation dated July 25, 2024

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		ARROW FINANCIAL CORPORATION
		Registrant
Date:	July 25, 2024	/s/ Penko Ivanov
		Penko Ivanov
		Chief Financial Officer

EX-99.1

	250 Glen Street Glens Falls, NY 12801
	NASDAQ® Symbol: "AROW" Website: arrowfinancial.com Media Contact: Rachael Murray Tel: (518) 742-6505

Arrow Reports 2nd Quarter Net Income of $8.6 Million, or $0.52 per Share,

Declares Dividend of $0.27 per Share

GLENS FALLS, N.Y. (July 25, 2024) – Arrow Financial Corporation (NasdaqGS® – AROW) ("Arrow" or "the Company") announced financial results for the three-month period ended June 30, 2024. Net income for the second quarter of 2024 was $8.6 million and fully diluted earnings per share ("EPS") was $0.52, versus $6.0 million and EPS of $0.35, for the same period in 2023.

The Board of Directors of Arrow declared a quarterly cash dividend of $0.27 per share payable August 23, 2024 to shareholders of record as of August 12, 2024. This is Arrow's 45th consecutive quarterly cash dividend.

This Earnings Release and related commentary should be read in conjunction with the Company's July 25, 2024 Form 8-K and related Second Quarter 2024 Investor Presentation, which can also be found on Arrow's website: arrowfinancial.com/documents/investor-presentations.

Arrow President and CEO David S. DeMarco:

“We are pleased to report another quarter of solid performance, demonstrating the hard work and dedication of our team. We recently expanded our insurance business with the strategic acquisition of the assets of A&B Agency, Inc. We are also looking forward to the close of our branch acquisition in Whitehall, New York scheduled for early August.

In addition, on July 22nd, we received regulatory approval to combine our banking subsidiaries, Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company, into a single entity renamed Arrow Bank National Association, or Arrow Bank. This positions us to enhance our strategic growth while ensuring stability with the same dedicated leadership team, staff and branch locations. We are confident these initiatives will further strengthen our market position and drive long-term value for our shareholders.”

Second-Quarter Highlights and Key Metrics

•Gross loans grew $57.6 million1, or 7.1% on an annualized basis.

•Net interest margin improved to 2.67% (2.69% FTE2), up from 2.60% (2.62% FTE) in the prior quarter

•Average loan yields increased to 5.17% for 2Q24, up from 5.02% in the prior quarter

•Deposit balances were $3.7 billion

•Tangible Book Value increased to $21.54

•Return on Average Assets (ROA) improved to 0.82%, up from 0.73% in the previous quarter

•Received regulatory approval to acquire a branch in Whitehall, New York with approximately $35 million in deposits; transaction expected to close in August 2024

1Excludes both $0.4 million fair value hedge adjustment at June 30, 2024 and $1.2 million fair value hedge adjustment at March 31, 2024

2FTE Net interest margin is a non-GAAP measure. See reconciliation on Note 3 to the Selected Quarterly Information.

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Income Statement

•Net Income: Net income for the second quarter of 2024 was $8.6 million, increasing from $7.7 million in the first quarter of 2024 and $6.0 million in the second quarter of 2023.

◦As compared to the prior quarter, net income benefited from an increase of $0.7 million in net interest income as well as a decrease in non-interest expense of $0.7 million.

◦As compared to the second quarter of 2023, net interest income increased $1.4 million. Non-interest income increased $1.0 million and non-interest expense decreased $0.8 million.

•Net Interest Income: Net interest income for the second quarter of 2024 was $27.2 million, increasing 2.6% from $26.5 million for the first quarter of 2024 and increasing 5.4% from $25.8 million in the second quarter of 2023.

◦Total interest and dividend income was $48.0 million for the second quarter of 2024, an increase from $46.7 million in the first quarter of 2024 and from $40.0 million for the second quarter of 2023. These increases were primarily driven by loan growth and higher loan rates. Interest expense for the second quarter of 2024 was $20.8 million, an increase from $20.2 million for the first quarter of 2024 and from $14.2 million for the second quarter of 2023. The increases for both comparison periods were driven primarily by higher deposit rates and changes in deposit composition.

•Net Interest Margin: Net interest margin, on an FTE basis, for the second quarter of 2024 was 2.69% compared to 2.62% for the first quarter of 2024 and 2.63% for the second quarter of 2023. The increase in net interest margin compared to the firstquarter in 2024 was primarily the result of continued yield expansion on earning assets combined with moderating increase in the cost of interest-bearing liabilities. As compared to the second quarter of 2023, the increase in net interest margin was primarily the result of yield on average earning assets increasing at a faster pace than costs of interest-bearing liabilities. Net interest margin is affected by deposits continuing to migrate to higher costs products, such as money market savings and time deposits.

	Three Months Ended
	(Dollars in Thousands)
	June 30, 2024			March 31, 2024			June 30, 2023
Interest and Dividend Income	$	47,972		$	46,677		$	40,013
Interest Expense	20,820			20,222			14,241
Net Interest Income	27,152			26,455			25,772
Average Earning Assets(A)	4,083,813			4,085,398			3,953,642
Average Interest-Bearing Liabilities	3,127,417			3,108,093			2,924,743
Yield on Earning Assets(A)	4.72		%	4.60		%	4.06		%
Cost of Interest-Bearing Liabilities	2.68			2.62			1.95
Net Interest Spread	2.04			1.98			2.11
Net Interest Margin	2.67			2.60			2.61
Net Interest Margin - FTE	2.69			2.62			2.63
(A) Includes Nonaccrual Loans.

•Provision for Credit Losses: For the second quarter of 2024, the provision for credit losses was $0.8 million compared to $0.6 million in the first quarter of 2024 and $0.9 million in the secondquarter of 2023. The key drivers for the provision for credit losses in the second quarter of 2024 were loan growth and replenishment of the allowance for charge-offs, partially offset by changes to the economic forecast factors embedded in the credit loss allowance model.

2

•Non-Interest Income: Non-interest income for the three months ended June 30, 2024, was $7.9 million consistent with the first quarter of 2024 and an increase from $6.9 million in the second quarter of 2023 due to the other investment income and a small gain on a sale leaseback transaction.

•Non-Interest Expense: Non-interest expense for the second quarter of 2024 was $23.3 million, a decrease from $24.0 million in the first quarter of 2024 and from $24.1 million for the second quarter of 2023. The decrease from the prior quarter and year was primarily due to elimination of elevated legal and professional expenses related to the delayed filings in 2023.

•Provision for Income Taxes: The provision for income taxes was 21.2%, or $2.3 million, for the second quarter of 2024, 20.9%, or $2.0 million, for the first quarter of 2024 and 20.9%, or $1.6 million, for the second quarter of 2023.

Balance Sheet

•Total Assets: Total assets were $4.2 billion at June 30, 2024, a decrease of $89.2 million, or 2.1%, as compared to March 31, 2024 and an increase of $140.8 million, or 3.4%, as compared to June 30, 2023. For the second quarter of 2024, overall change in balance sheet was attributable to seasonal changes of cash balances offset by growth in the loan portfolio.

•Investments: Total investments were $556.4 million as of June 30, 2024, a decrease of $63.6 million, or 10.3%, compared to March 31, 2024 and a decrease of $137.6 million, or 19.8%, compared to June 30, 2023. The decrease from March 31, 2024 was driven primarily by paydowns and maturities. The change from June 30, 2023 was also driven by paydowns and maturities as well as the fourth quarter 2023 repositioning of the investment portfolio, reducing the portfolio by approximately $25 million at the time of the transaction. There were no credit quality issues related to the investment portfolio.

•Loans3: Total loans reached $3.3 billion as of June 30, 2024. Loan growth for the second quarter of 2024 was $57.6 million, and $245.3 million since June 30, 2023. Loan growth was spread across all loan products. Please see the loan detail included in the Consolidated Financial Information table on page 12.

•Allowance for Credit Losses: The allowance for credit losses was $31.0 million as of June 30, 2024, which represented 0.94% of loans outstanding, as compared to $31.6 million, or 0.97%, at March 31, 2024 and $31.2 million, or 1.02%, at June 30, 2023. Net charge-offs, expressed as an annualized percentage of average loans outstanding, were 0.16% for the three-month period ended June 30, 20244, as compared to 0.04% for the three-month period ended March 31, 2024 and 0.07% for the three-month period ended June 30, 2023. Nonperforming assets were $21.3 million as of June 30, 2024, representing 0.50% of period-end assets, compared to 0.50% at March 31, 2024 and 0.17% at June 30, 2023. The increase from the second quarter of 2023 was primarily due to one large, well collateralized loan relationship of approximately $15 million, which moved into non-performing status during the fourth quarter of 2023.

•Deposits: At June 30, 2024, deposit balances were $3.7 billion, a decrease of $95.4 million from March 31, 2024 and an increase of $181.4 million from June 30, 2023. The decrease from the first quarter was primarily attributable to the seasonality of municipal deposits, expected to normalize in the third quarter. The increase from June 30, 2023 was partially attributable to $175 million of brokered CDs, primarily used to reduce borrowings by $160 million. Arrow simultaneously entered

3Excludes both $0.4 million fair value hedge adjustment at June 30, 2024 and $1.2 million fair value hedge adjustment at March 31, 2024

4Charge-offs for 2Q24 included 0.09% related to a previously specifically reserved amount for overdraft balances relating to one customer relationship

3

into three-year interest rate swaps to strategically manage its asset-liability profile and cost of funds. Please refer to page 7 for further details related to deposits.

•Capital: Total stockholders’ equity was $383.0 million at June 30, 2024, an increase of $5.0 million, or 1.3%, from March 31, 2024 and an increase of $21.6 million, or 6.0%, from the June 30, 2023 level of $361.4 million. The increase in capital from June 30, 2023, was primarily attributable to net income of $32 million, other comprehensive income of $16 million offset by dividends and stock repurchases of $27 million. Arrow's regulatory capital ratios remained strong. As of June 30, 2024, Arrow's Common Equity Tier 1 Capital Ratio was 12.88% and Total Risk-Based Capital Ratio was 14.57%. The capital ratios of Arrow's subsidiary banks, Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company, continued to exceed the “well capitalized” regulatory standards.

Additional Commentary

•Bauer Financial Ratings: Both Glens Falls National Bank and Saratoga National Bank continued to maintain their 5-Star Exceptional Performance ratings from Bauer Financial, for the 68th and 60th quarters, respectively.

•Subsidiary Bank Unification: On July 22 2024, Arrow received approval from the Office of the Comptroller of the Currency to combine its two subsidiary banks, Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company, into one bank that will be known as Arrow Bank National Association. The combination will create operational efficiencies, unify branding and enhance Arrow's ability to pursue its strategic growth objectives. The combination of the entities is anticipated to become effective December 31, 2024.

About Arrow

Arrow Financial Corporation is a multi-bank holding company headquartered in Glens Falls, New York, serving the financial needs of northeastern New York. Arrow is the parent of Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company. Other subsidiaries include Upstate Agency, LLC and North Country Investment Advisers, Inc.

Non-GAAP Financial Measures Reconciliation

In addition to presenting information in conformity with accounting principles generally accepted in the United States of America (GAAP), this news release contains financial information determined by methods other than GAAP (non-GAAP). Some measures used in this release, which are commonly utilized by financial institutions, have not been specifically exempted by the Securities and Exchange Commission ("SEC") and may constitute "non-GAAP financial measures" within the meaning of the SEC's rules. These non-GAAP financial measures include: tangible equity, return on tangible equity, tax-equivalent adjustment and related net interest income, tax-equivalent, the efficiency ratio and net interest margin (FTE). Management believes that the non-GAAP financial measures disclosed by Arrow are useful in evaluating Arrow's performance and that such information should be considered as supplemental in nature and not as a substitute for, or superior to, the related financial information prepared in accordance with GAAP. Non-GAAP financial measures may differ from similar measures presented by other companies. See the reconciliation of GAAP to non-GAAP measures in the section "Selected Quarterly Information."

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Safe Harbor Statement

The information in this document may contain statements based on management’s beliefs, assumptions, expectations, estimates and projections about the future. Such "forward-looking statements," as defined in Section 21E of the Securities Exchange Act of 1934, as amended, involve a degree of uncertainty and attendant risk. Actual outcomes and results may differ, explicitly or by implication. We are not obligated to revise or update these statements to reflect unanticipated events. This document should be read in conjunction with Arrow's 2023 Form 10-K and other filings with the SEC.

5

ARROW FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Amounts - Unaudited)

	Three Months Ended June 30				Six Months Ended June 30
	2024		2023		2024		2023
INTEREST AND DIVIDEND INCOME
Interest and Fees on Loans	$	42,141	$	34,618	$	82,517	$	66,504
Interest on Deposits at Banks	2,185		1,674		4,632		2,153
Interest and Dividends on Investment Securities:
Fully Taxable	3,009		2,951		6,195		5,899
Exempt from Federal Taxes	637		770		1,305		1,567
Total Interest and Dividend Income	47,972		40,013		94,649		76,123
INTEREST EXPENSE
Interest-Bearing Checking Accounts	1,903		820		3,544		1,190
Savings Deposits	10,571		8,514		20,801		14,101
Time Deposits over $250,000	1,869		1,119		3,842		1,693
Other Time Deposits	5,074		1,196		10,157		1,670
Borrowings	1,186		2,373		2,262		3,166
Junior Subordinated Obligations Issued to   Unconsolidated Subsidiary Trusts	170		171		341		340
Interest on Financing Leases	47		48		95		97
Total Interest Expense	20,820		14,241		41,042		22,257
NET INTEREST INCOME	27,152		25,772		53,607		53,866
Provision for Credit Losses	775		948		1,392		2,502
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	26,377		24,824		52,215		51,364
NON-INTEREST INCOME
Income From Fiduciary Activities	2,451		2,428		4,908		4,703
Fees for Other Services to Customers	2,706		2,717		5,249		5,312
Insurance Commissions	1,662		1,560		3,344		3,080
Net Gain (Loss) on Securities	54		(181)		71		(285)
Net Gain on Sales of Loans	5		—		9		4
Other Operating Income	978		382		2,133		769
Total Non-Interest Income	7,856		6,906		15,714		13,583
NON-INTEREST EXPENSE
Salaries and Employee Benefits	13,036		12,039		25,929		23,986
Occupancy Expenses, Net	1,774		1,583		3,545		3,211
Technology and Equipment Expense	4,734		4,362		9,554		8,779
FDIC Assessments	698		484		1,413		963
Other Operating Expense	3,076		5,615		6,889		9,440
Total Non-Interest Expense	23,318		24,083		47,330		46,379
INCOME BEFORE PROVISION FOR INCOME TAXES	10,915		7,647		20,599		18,568
Provision for Income Taxes	2,311		1,600		4,335		3,959
NET INCOME	$	8,604	$	6,047	$	16,264	$	14,609
Average Shares Outstanding 1:
Basic	16,685		17,050		16,764		17,050
Diluted	16,709		17,050		16,789		17,050
Per Common Share:
Basic Earnings	$	0.52	$	0.35	$	0.97	$	0.85
Diluted Earnings	0.52		0.35		0.97		0.85
1 June 30, 2023 Share and Per Share Amounts have been restated for the September 26, 2023, 3% stock dividend.

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ARROW FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share and Per Share Amounts - Unaudited)

	June 30, 2024		December 31, 2023		June 30, 2023
ASSETS
Cash and Due From Banks	$	30,372	$	36,755	$	33,803
Interest-Bearing Deposits at Banks	169,826		105,781		139,798
Investment Securities:
Available-for-Sale at Fair Value	450,786		497,769		543,708
Held-to-Maturity (Fair Value of $96,454 at June 30, 2024; $128,837 at December 31, 2023; and $139,143 at June 30, 2023)	99,348		131,395		143,460
Equity Securities	1,996		1,925		1,889
Other Investments	4,274		5,049		4,932
Loans	3,315,523		3,212,908		3,069,897
Allowance for Credit Losses	(31,009)		(31,265)		(31,170)
Net Loans	3,284,514		3,181,643		3,038,727
Premises and Equipment, Net	59,243		59,642		59,773
Goodwill	21,873		21,873		21,873
Other Intangible Assets, Net	927		1,110		1,302
Other Assets	121,248		126,926		114,388
Total Assets	$	4,244,407	$	4,169,868	$	4,103,653
LIABILITIES
Noninterest-Bearing Deposits	704,707		758,425		759,495
Interest-Bearing Checking Accounts	856,788		799,785		856,016
Savings Deposits	1,446,821		1,466,280		1,517,937
Time Deposits over $250,000	173,526		179,301		140,694
Other Time Deposits	501,797		483,775		228,082
Total Deposits	3,683,639		3,687,566		3,502,224
Borrowings	106,500		26,500		171,800
Junior Subordinated Obligations Issued to Unconsolidated   Subsidiary Trusts	20,000		20,000		20,000
Finance Leases	5,038		5,066		5,093
Other Liabilities	46,212		50,964		43,093
Total Liabilities	3,861,389		3,790,096		3,742,210
STOCKHOLDERS’ EQUITY
Preferred Stock, $1 Par Value and 1,000,000 Shares Authorized at June 30, 2024, December 31, 2023 and June 30, 2023	—		—		—
Common Stock, $1 Par Value; 30,000,000 Shares Authorized (22,066,559 Shares Issued at June 30, 2024 and December 31, 2023 and 21,423,992 Shares Issued at June 30, 2023)	22,067		22,067		21,424
Additional Paid-in Capital	412,917		412,551		401,069
Retained Earnings	72,980		65,792		71,076
Accumulated Other Comprehensive Loss	(31,632)		(33,416)		(47,613)
Treasury Stock, at Cost (5,343,295 Shares at June 30, 2024; 5,124,073 Shares at December 31, 2023 and 4,870,934 Shares at June 30, 2023)	(93,314)		(87,222)		(84,513)
Total Stockholders’ Equity	383,018		379,772		361,443
Total Liabilities and Stockholders’ Equity	$	4,244,407	$	4,169,868	$	4,103,653

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Arrow Financial Corporation

Selected Quarterly Information

(Dollars In Thousands, Except Per Share Amounts- Unaudited)

Quarter Ended	6/30/2024			3/31/2024			12/31/2023			9/30/2023			6/30/2023
Net Income	$	8,604		$	7,660		$	7,723		$	7,743		$	6,047
Net Changes in Fair Value of Equity Investments (Net of Tax)	39			13			90			52			(133)
Share and Per Share Data:1
Period End Shares Outstanding	16,723			16,710			16,942			17,049			17,050
Basic Average Shares Outstanding	16,685			16,865			17,002			17,050			17,050
Diluted Average Shares Outstanding	16,709			16,867			17,004			17,050			17,050
Basic Earnings Per Share	$	0.52		$	0.45		$	0.46		$	0.46		$	0.35
Diluted Earnings Per Share	0.52			0.45			0.46			0.46			0.35
Cash Dividend Per Share	0.270			0.270			0.270			0.262			0.262
Selected Quarterly Average Balances:
Interest-Bearing Deposits at Banks	$	159,336		$	178,452		$	136,026		$	131,814		$	130,057
Investment Securities	644,192			671,105			713,144			745,693			787,175
Loans	3,280,285			3,235,841			3,170,262			3,096,240			3,036,410
Deposits	3,678,957			3,693,325			3,593,949			3,491,028			3,460,711
Other Borrowed Funds	131,537			122,033			149,507			208,527			220,616
Stockholders' Equity	378,256			379,446			363,753			362,701			365,070
Total Assets	4,237,359			4,245,484			4,159,313			4,109,995			4,087,653
Return on Average Assets, annualized	0.82		%	0.73		%	0.74		%	0.75		%	0.59		%
Return on Average Equity, annualized	9.15		%	8.12		%	8.42		%	8.47		%	6.64		%
Return on Average Tangible Equity, annualized 2	9.74		%	8.64		%	8.99		%	9.05		%	7.10		%
Average Earning Assets	$	4,083,813		$	4,085,398		$	4,019,432		$	3,973,747		$	3,953,642
Average Paying Liabilities	3,127,417			3,108,093			2,985,717			2,920,518			2,924,743
Interest Income	47,972			46,677			44,324			42,117			40,013
Tax-Equivalent Adjustment 3	163			176			184			183			196
Interest Income, Tax-Equivalent 3	48,135			46,853			44,508			42,117			40,013
Interest Expense	20,820			20,222			18,711			16,764			14,241
Net Interest Income	27,152			26,455			25,613			25,353			25,772
Net Interest Income, Tax-Equivalent 3	27,315			26,631			25,797			25,536			25,968
Net Interest Margin, annualized	2.67		%	2.60		%	2.53		%	2.53		%	2.61		%
Net Interest Margin, Tax-Equivalent, annualized 3	2.69		%	2.62		%	2.55		%	2.55		%	2.63		%
Efficiency Ratio Calculation: 4
Non-Interest Expense	$	23,318		$	24,012		$	23,190		$	23,479		$	24,083
Less: Intangible Asset Amortization	40			41			43			43			44
Net Non-Interest Expense	$	23,278		$	23,971		$	23,147		$	23,436		$	24,039
Net Interest Income, Tax-Equivalent	$	27,315		$	26,631		$	25,797		$	25,536		$	25,968
Non-Interest Income	7,856			7,858			7,484			8,050			6,906
Less: Net Gain (Loss) on Securities	54			17			122			71			(181)
Net Gross Income	$	35,117		$	34,472		$	33,159		$	33,515		$	33,055
Efficiency Ratio	66.29		%	69.54		%	69.81		%	69.93		%	72.72		%
Period-End Capital Information:
Total Stockholders' Equity (i.e. Book Value)	$	383,018		$	377,986		$	379,772		$	360,014		$	361,443
Book Value per Share 1	22.90			22.62			22.42			21.12			21.20
Goodwill and Other Intangible Assets, net	22,800			22,891			22,983			23,078			23,175
Tangible Book Value per Share 1,2	21.54			21.25			21.06			19.76			19.84
Capital Ratios:5
Tier 1 Leverage Ratio	9.74		%	9.63		%	9.84		%	9.94		%	9.92		%
Common Equity Tier 1 Capital Ratio	12.88		%	12.84		%	13.00		%	13.17		%	13.27		%
Tier 1 Risk-Based Capital Ratio	13.53		%	13.50		%	13.66		%	13.84		%	13.96		%
Total Risk-Based Capital Ratio	14.57		%	14.57		%	14.74		%	14.94		%	15.08		%
Assets Under Trust Admin. & Investment Mgmt.	$	1,848,349		$	1,829,266		$	1,763,194		$	1,627,522		$	1,711,460

8

Arrow Financial Corporation

Selected Quarterly Information - Continued

(Dollars In Thousands, Except Per Share Amounts- Unaudited)

Footnotes:
1.	Share and per share data have been restated for the September 26, 2023, 3% stock dividend.
2.	Non-GAAP Financial Measure Reconciliation: Tangible Book Value, Tangible Equity, and Return on Tangible Equity exclude goodwill and other intangible assets, net from total equity.  These are non-GAAP financial measures which Arrow believes provide investors with information that is useful in understanding its financial performance.
		6/30/2024			3/31/2024			12/31/2023			9/30/2023			6/30/2023
	Total Stockholders' Equity (GAAP)	$	383,018		$	377,986		$	379,772		$	360,014		$	361,443
	Less: Goodwill and Other Intangible assets, net	22,800			22,891			22,983			23,078			23,175
	Tangible Equity (Non-GAAP)	$	360,218		$	355,095		$	356,789		$	336,936		$	338,268
	Period End Shares Outstanding	16,723			16,710			16,942			17,049			17,050
	Tangible Book Value per Share (Non-GAAP)	$	21.54		$	21.25		$	21.06		$	19.76		$	19.84
	Net Income	8,604			7,660			7,723			7,743			6,047
	Return on Tangible Equity (Net Income/Tangible Equity - Annualized)	9.74		%	8.64		%	8.99		%	9.05		%	7.10		%
3.	Non-GAAP Financial Measure Reconciliation: Net Interest Margin is the ratio of annualized tax-equivalent net interest income to average earning assets. This is also a non-GAAP financial measure which Arrow believes provides investors with information that is useful in understanding its financial performance.
		6/30/2024			3/31/2024			12/31/2023			9/30/2023			6/30/2023
	Interest Income (GAAP)	$	47,972		$	46,677		$	44,324		$	42,117		$	40,013
	Add: Tax-Equivalent adjustment      (Non-GAAP)	163			176			184			183			196
	Interest Income - Tax Equivalent      (Non-GAAP)	$	48,135		$	46,853		$	44,508		$	42,300		$	40,209
	Net Interest Income (GAAP)	$	27,152		$	26,455		$	25,613		$	25,353		$	25,772
	Add: Tax-Equivalent adjustment      (Non-GAAP)	163			176			184			183			196
	Net Interest Income - Tax Equivalent      (Non-GAAP)	$	27,315		$	26,631		$	25,797		$	25,536		$	25,968
	Average Earning Assets	$	4,083,813		$	4,085,398		$	4,019,432		$	3,973,747		$	3,953,642
	Net Interest Margin (Non-GAAP)*	2.69		%	2.62		%	2.55		%	2.55		%	2.63		%
4.	Non-GAAP Financial Measure Reconciliation: Financial Institutions often use the "efficiency ratio", a non-GAAP ratio, as a measure of expense control. Arrow believes the efficiency ratio provides investors with information that is useful in understanding its financial performance. Arrow defines efficiency ratio as the ratio of non-interest expense to net gross income (which equals tax-equivalent net interest income plus non-interest income, as adjusted).
5.	For the current quarter, all of the regulatory capital ratios as well as the Total Risk-Weighted Assets are calculated in accordance with bank regulatory capital rules. The June 30, 2024 CET1 ratio listed in the tables (i.e., 12.88%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%).
		6/30/2024			3/31/2024			12/31/2023			9/30/2023			6/30/2023
	Total Risk Weighted Assets	$	3,072,922		$	3,049,525		$	3,032,188		$	2,988,438		$	2,937,837
	Common Equity Tier 1 Capital	395,691			391,706			394,166			393,541			389,966
	Common Equity Tier 1 Ratio	12.88		%	12.84		%	13.00		%	13.17		%	13.27		%
* Quarterly ratios have been annualized.

9

Arrow Financial Corporation

Average Consolidated Balance Sheets and Net Interest Income Analysis

(Dollars in Thousands - Unaudited)

Quarter Ended:	June 30, 2024						June 30, 2023
			Interest		Rate				Interest		Rate
	Average		Income/		Earned/		Average		Income/		Earned/
	Balance		Expense		Paid		Balance		Expense		Paid
Interest-Bearing Deposits at Banks	$	159,336	$	2,185	5.52	%	$	130,057	$	1,674	5.16	%
Investment Securities:
Fully Taxable	530,869		3,009		2.28		637,018		2,951		1.86
Exempt from Federal Taxes	113,323		637		2.26		150,157		770		2.06
Loans	3,280,285		42,141		5.17		3,036,410		34,618		4.57
Total Earning Assets	4,083,813		47,972		4.72		3,953,642		40,013		4.06
Allowance for Credit Losses	(31,459)						(30,577)
Cash and Due From Banks	28,611						28,742
Other Assets	156,394						135,846
Total Assets	$	4,237,359					$	4,087,653
Deposits:
Interest-Bearing Checking Accounts	$	832,087	1,903		0.92		$	863,892	820		0.38
Savings Deposits	1,487,062		10,571		2.86		1,504,412		8,514		2.27
Time Deposits of $250,000 or More	172,655		1,869		4.35		133,897		1,119		3.35
Other Time Deposits	504,076		5,074		4.05		201,926		1,196		2.38
Total Interest-Bearing Deposits	2,995,880		19,417		2.61		2,704,127		11,649		1.73
Borrowings	106,502		1,186		4.48		195,527		2,373		4.87
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts	20,000		170		3.42		20,000		171		3.43
Finance Leases	5,035		47		3.75		5,089		48		3.78
Total Interest-Bearing Liabilities	3,127,417		20,820		2.68		2,924,743		14,241		1.95
Noninterest-Bearing Deposits	683,077						756,584
Other Liabilities	48,609						41,256
Total Liabilities	3,859,103						3,722,583
Stockholders’ Equity	378,256						365,070
Total Liabilities and Stockholders’ Equity	$	4,237,359					$	4,087,653
Net Interest Income			$	27,152					$	25,772
Net Interest Spread					2.04	%					2.11	%
Net Interest Margin					2.67	%					2.61	%

10

Arrow Financial Corporation

Average Consolidated Balance Sheets and Net Interest Income Analysis

(Dollars in Thousands - Unaudited)

Quarter Ended:	June 30, 2024						March 31, 2024
			Interest		Rate				Interest		Rate
	Average		Income/		Earned/		Average		Income/		Earned/
	Balance		Expense		Paid		Balance		Expense		Paid
Interest-Bearing Deposits at Banks	$	159,336	$	2,185	5.52	%	$	178,452	$	2,447	5.52	%
Investment Securities:
Fully Taxable	530,869		3,009		2.28		550,538		3,186		2.33
Exempt from Federal Taxes	113,323		637		2.26		120,567		668		2.23
Loans	3,280,285		42,141		5.17		3,235,841		40,376		5.02
Total Earning Assets	4,083,813		47,972		4.72		4,085,398		46,677		4.60
Allowance for Credit Losses	(31,459)						(31,416)
Cash and Due From Banks	28,611						29,804
Other Assets	156,394						161,698
Total Assets	$	4,237,359					$	4,245,484
Deposits:
Interest-Bearing Checking Accounts	$	832,087	1,903		0.92		$	830,918	1,641		0.79
Savings Deposits	1,487,062		10,571		2.86		1,481,001		10,230		2.78
Time Deposits of $250,000 or More	172,655		1,869		4.35		177,328		1,973		4.47
Other Time Deposits	504,076		5,074		4.05		496,813		5,083		4.11
Total Interest-Bearing Deposits	2,995,880		19,417		2.61		2,986,060		18,927		2.55
Borrowings	106,502		1,186		4.48		96,984		1,076		4.46
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts	20,000		170		3.42		20,000		171		3.44
Finance Leases	5,035		47		3.75		5,049		48		3.82
Total Interest-Bearing Liabilities	3,127,417		20,820		2.68		3,108,093		20,222		2.62
Noninterest-bearing deposits	683,077						707,265
Other Liabilities	48,609						50,680
Total Liabilities	3,859,103						3,866,038
Stockholders’ Equity	378,256						379,446
Total Liabilities and Stockholders’ Equity	$	4,237,359					$	4,245,484
Net Interest Income			$	27,152					$	26,455
Net Interest Spread					2.04	%					1.98	%
Net Interest Margin					2.67	%					2.60	%

11

Arrow Financial Corporation

Consolidated Financial Information

(Dollars in Thousands - Unaudited)

Quarter Ended:	6/30/2024			12/31/2023			6/30/2023
Loan Portfolio
Commercial Loans	$	163,832		$	156,224		$	147,518
Commercial Real Estate Loans	757,478			745,487			723,948
Subtotal Commercial Loan Portfolio	921,310			901,711			871,466
Consumer Loans	1,138,813			1,111,667			1,087,765
Residential Real Estate Loans	1,255,400			1,199,530			1,110,666
Total Loans	$	3,315,523		$	3,212,908		$	3,069,897
Allowance for Credit Losses
Allowance for Credit Losses, Beginning of Quarter	$	31,561		$	31,112		$	30,784
Loans Charged-off	(1,850)			(1,366)			(1,280)
Less Recoveries of Loans Previously Charged-off	523			994			718
Net Loans Charged-off	(1,327)			(372)			(562)
Provision for Credit Losses	775			525			948
Allowance for Credit Losses, End of Quarter	$	31,009		$	31,265		$	31,170
Nonperforming Assets
Nonaccrual Loans	$	20,118		$	20,645		$	5,997
Loans Past Due 90 or More Days and Accruing	915			452			467
Loans Restructured and in Compliance with Modified Terms	36			54			67
Total Nonperforming Loans	21,069			21,151			6,531
Repossessed Assets	239			312			342
Other Real Estate Owned	34			—			182
Total Nonperforming Assets	$	21,342		$	21,463		$	7,055
Key Asset Quality Ratios
Net Loans Charged-off to Average Loans,    Quarter-to-date Annualized	0.16		%	0.05		%	0.07		%
Provision for Credit Losses to Average Loans,   Quarter-to-date Annualized	0.10		%	0.07		%	0.13		%
Allowance for Credit Losses to Period-End Loans	0.94		%	0.97		%	1.02		%
Allowance for Credit Losses to Period-End Nonperforming Loans	147.18		%	147.82		%	477.26		%
Nonperforming Loans to Period-End Loans	0.64		%	0.66		%	0.21		%
Nonperforming Assets to Period-End Assets	0.50		%	0.51		%	0.17		%
Year-to-Date Period Ended:	6/30/2024			12/31/2023			6/30/2023
Allowance for Credit Losses
Allowance for Credit Losses, Beginning of Year	$	31,265		$	29,952		$	29,952
Loans Charged-off	(3,133)			(5,177)			(2,608)
Less Recoveries of Loans Previously Charged-off	1,485			3,109			1,324
Net Loans Charged-off	(1,648)			(2,068)			(1,284)
Provision for Credit Losses	1,392			3,381			2,502
Allowance for Credit Losses, End of Period	$	31,009		$	31,265		$	31,170
Key Asset Quality Ratios
Net Loans Charged-off to Average Loans, Annualized	0.10		%	0.07		%	0.09		%
Provision for Loan Losses to Average Loans, Annualized	0.09		%	0.11		%	0.17		%

12

EX-99.2

2Q 2024 Investor Presentation July 25, 2024

2 Safe Harbor This presentation may contain certain forward-looking statements about Arrow Financial Corporation (“Arrow” or the “Company”). Forward-looking statements, as defined in Section 21E of the Securities Exchange Act of 1934, as amended, include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the banking industry or securities markets, and legislative and regulatory changes that could adversely affect the business in which the Company and its subsidiaries are engaged. We are not obligated to revise or update these statements to reflect unanticipated events. This document should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 10-K”), other filings with the SEC, and the second quarter 2024 earnings release issued July 25, 2024.

3 Table of Contents • 2Q 2024 Results and Performance Metrics • Non-Interest Income/Expense • Loans • Deposits/Funding Sources • Credit Quality • Capital Actions & Strategy • Liquidity and Investments • Arrow Overview and History

2Q 2024 Results 4

5 Takeaways & Themes • Rebound in Earnings & Performance Metrics • Robust Loan Growth • Expanding Net Interest Margin • Excellent Credit Profile • Strong Capital Base • Diversified Revenue Sources  Core Banking  Wealth Management  Insurance • Ample Liquidity & Moderating Deposit Costs

6 2Q 2024 Highlights • Net income of $8.6 million; Earnings per share (EPS) of $0.52 • Gross loans grew approximately $57.6 million or 7.1% on an annualized basis • Net interest margin improved to 2.67% (2.69% FTE), up from 2.60% (2.62% FTE) from the prior quarter • Average loan yields increased to 5.17% for 2Q24, up from 5.02% for 1Q24 • Loan portfolio exit rate at end of 2Q24 reached 5.25% • Cost of deposits increased to 2.12% for 2Q24, up from 2.06% for 1Q24 • Cost of deposits exit rate at end of 2Q24 was 2.10%, 2 bps lower than the average rate for the quarter • Tangible Book Value increased to $21.54 • ROA improved to 0.82%, up from 0.73% in the previous quarter • Strong credit quality; Annualized net charge-offs (excluding for specifically reserved items) were 0.07% • Opex moderating in 2Q24 with resolution of audit/reporting and legal matters during past 12 months • YTD ~$6.4 million of stock repurchases (~263K shares) • Declared 3Q24 dividend of $0.27 per share • Acquisition of Whitehall, NY branch with ~$35 million in deposits – expected to close in August Subsequent to 2Q24 • The Company received OCC approval to combine its two banking subsidiaries1 into a single entity renamed Arrow Bank National Association, or Arrow Bank. The combination will create operational efficiencies, unify branding and enhance Arrow's ability to pursue its strategic growth objectives. The combination is anticipated to become effective December 31, 2024. Financial information provided in this document is unaudited. Please refer to the 2Q24 Earnings Release for a reconciliation of any non-GAAP measures. 1 Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company

7 2Q 2024 Consolidated Financial Statements 1 Variances are rounded based on actual whole dollar amounts 2 Pre-tax, pre-provision net revenue per share is a non-GAAP metric and excludes provision for loan losses and income tax expense UNAUDITED Dollars in millions, except per share data Comparative Quarter Income Statement 2Q24 1Q24 Fav/(Unfav) Var1 Total Interest Income $ 48.0 $ 46.7 1.3 Total Interest Expense 20.8 20.2 (0.6) Net Interest Income 27.2 26.5 0.7 Non-Interest Income 7.9 7.9 (0.0) Non-Interest Expense 23.3 24.0 0.7 Pre-Tax, Pre-Provision Net Revenue2 $ 11.7 $ 10.3 1.4 Provision for Credit Losses $ 0.8 $ 0.6 (0.2) Pre-Tax Income $ 10.9 $ 9.7 1.2 Income Tax Expense $ 2.3 $ 2.0 (0.3) Reported Net Income $ 8.6 $ 7.7 0.9 EPS $ 0.52 $ 0.45 0.07 Income Statement YTD 2Q24 YTD 2Q23 Fav/(Unfav) Var1 Total Interest Income $ 94.6 $ 76.1 18.5 Total Interest Expense 41.0 22.3 (18.7) Net Interest Income 53.6 53.8 (0.2) Non-Interest Income 15.7 13.6 2.1 Non-Interest Expense 47.3 46.4 (0.9) Pre-Tax, Pre-Provision Net Revenue2 $ 22.0 $ 21.0 1.0 Provision for Credit Losses $ 1.4 $ 2.5 1.1 Pre-Tax Income $ 20.6 $ 18.5 2.1 Income Tax Expense $ 4.3 $ 3.9 (0.4) Reported Net Income $ 16.3 $ 14.6 1.7 EPS $ 0.97 $ 0.86 0.11

8 2Q 2024 Consolidated Financial Statements 1 Variances rounded based on actual whole dollar amounts 2 Pre-tax, pre-provision net revenue per share is a non-GAAP metric and excludes provision for loan losses and income tax expense UNAUDITED Dollars in millions, except per share data Linked Quarter Balance Sheet 2Q24 1Q24 4Q23 2Q24 vs 1Q241 2Q24 vs 4Q231 Cash & Cash Equivalents $ 200.2 $ 282.5 $ 142.5 (82.3) 57.7 Investment Securities 556.4 620.0 636.1 (63.6) (79.7) Loans Receivable, net 3,284.5 3,227.2 3,181.6 57.3 102.9 All Other Assets 203.3 203.9 209.6 (0.6) (6.3) Total Assets $ 4,244.4 $ 4,333.6 $ 4,169.9 (89.2) 74.5 Total Deposits $ 3,683.6 $ 3,779.0 $ 3,687.6 (95.4) (3.9) Total Borrowings 131.5 131.6 51.6 (0.0) 80.0 Other Liabilities 46.2 45.1 51.0 1.1 (4.8) Total Liabilities $ 3,861.4 $ 3,955.6 $ 3,790.1 (94.2) 71.3 Equity $ 383.0 $ 378.0 $ 379.8 5.0 3.2 Total Liabilities & Equity $ 4,244.4 $ 4,333.6 $ 4,169.9 (89.2) 74.5

9 2Q24 YTD 2Q24 Earnings per Share $ 0.52 $ 0.97 Net Interest Margin* 2.67% 2.64% Profitability Net Revenue $35.0 million $69.3 million Return on Average Assets (ROA) 0.82% 0.77% Return on Average Equity (ROE) 9.15% 8.63% $3.32 billion of gross loans 90.0% loan-to-deposit ratio Balance Sheet $3.68 billion of deposits 6.63% wholesale funding ratio 0.94% Allowance for Credit Losses (ACL) 0% digital deposits $21.54 Fully Diluted Tangible Book Value per Share Capital Well Capitalized YTD 2024 Results *FTE for 2Q24 is 2.69%; 1Q’24 is 2.62%; FY 2023 is 2.67% Arrow GFNB SNB Tier 1 Leverage Ratio 9.74% 8.79% 9.38% CET 1 Capital Ratio 12.88% 13.13% 12.21% Tier 1 Risk-Based Capital Ratio 13.53% 13.14% 12.21%

10 Performance Trends $2.41 $2.92 $2.86 $1.77 $0.45 $0.52 2020 2021 2022 2023 1Q24 2Q24 Diluted EPS $18.32 $20.42 $19.37 $21.06 $21.25 $21.54 2020 2021 2022 2023 1Q24 2Q24 Fully Diluted Tangible Book Value 12.77% 14.09% 13.55% 8.29% 8.12% 9.15% 2020 2021 2022 2023 1Q24 2Q24 Return on Average Equity 1.17% 1.28% 1.21% 0.74% 0.73% 0.82% 2020 2021 2022 2023 1Q24 2Q24 Return on Average Assets After a challenging 2023, EPS and profitability metrics continue to rebound History of strong earnings and performance metrics

11 Net Interest Margin 2.97% 3.03% 2.65% 2.60% 2.67% 3.97% 4.00% 4.62% 5.01% 5.17% 0.10% 0.27% 1.43% 2.06% 2.12% 2021 2022 2023 1Q24 2Q24 NIM Average Loan Yield for the Period Shown Cost of Deposits 1 1Yield includes the impact of deferred fees and loan origination costs amortization 2.90% 3.02% 3.14% 3.08% 2.96% 2.61% 2.53% 2.53% 2.60% 2.67% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 NIM Trend 2Q24 Full Tax Equivalent NIM 2.69% 2Q2024 1Q2024 Loan Origination Avg. Rate 7.46% 7.53% Loan Portfolio Exit Rate at Quarter End 5.25% 5.14% Deposit Exit Rate at Quarter End 2.10% 2.09% 2Q24 Exit Rate for Deposits below the average for the quarter

Non-Interest Income/Expense 12

13 June 30, 2024 March 31, 2024 June 30, 2023 Fees for Other Services to Customers $ 2,706 $ 2,543 $ 2,717 Fiduciary Activities/Wealth Management 2,451 2,457 2,428 Insurance Commissions 1,662 1,682 1,560 Other Operating Income 1,037 1,176 201 Total Noninterest Income $ 7,856 $ 7,858 $ 6,906 Three Months Ended 2Q24 Non-Interest Income Steady, broad based non-interest income sources: • Wealth Management • Insurance • Banking Fees Dollars in thousands

14 2Q24 Non-Interest Expense • Increase in Compensation & Benefits - Overall growth in organization and inflation-driven wage increases • Fraud Expenses for 2Q24 benefitted from recoveries related to Prior Year and 1Q24 events • Legal & Professional expenses normalizing, as prior year filing delays and related matters are resolved • All Other Expenses impacted by reserves for unfunded commitments, increased customer outreach activities and misc. expenses Dollars in thousands June 30, 2024 March 31, 2024 June 30, 2023 Compensation & Benefits $ 13,036 $ 12,893 $ 12,039 Occupancy & Equipment 1,774 1,771 1,583 Data Processing & Technology 4,734 4,820 4,362 Advertising & Contributions 278 205 294 Legal & Professional 926 2,210 2,876 FDIC Assessment 698 715 484 Fraud Expenses (362) 50 111 All Other Expenses 2,234 1,348 2,334 Total Noninterest Income $ 23,318 $ 24,012 $ 24,083 Three Months Ended

15 Operating Expenses - Efficiency Trends 57.1% 52.8% 54.2% 54.3% 68.8% 2.22% 2.02% 2.00% 2.01% 2.28% 2019 2020 2021 2022 2023 Efficiency Ratio Net Non-interest Expense / Average Assets 2023 impacted by margin compression and elevated expenses (audit, professional, legal) due to regulatory filing delays 63.4% 72.7% 69.9% 69.8% 69.5% 66.3% 2.27% 2.36% 2.26% 2.21% 2.27% 2.21% 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Efficiency Ratio Net Non-interest Expense / Average Assets 2Q24 expenses moderating/efficiency measures improving: • Sustainable reduction in audit, professional and legal expenses • Impact of Salary and Benefit adjustments from increased staffing levels and wage inflation primarily absorbed in 1Q24

Loans 16

17 Loan Portfolio Composition Commercial (C&I)1 11.0% Commercial Real Estate 16.9% Consumer 34.3% Residential Real Estate 37.9% • No single relationship represents more than ~1.75% of total loans as of June 30, 2024 • CRE concentration ratio of ~130% of risk-based capital • CRE loans not in major metropolitan areas • C&I portfolio can be a source of deposit growth Total Loan Portfolio ~ $3.32 billion 1Commercial (C&I) includes owner-occupied real estate loans

18 $316 $350 $357 $358 $360 $442 $497 $544 $555 $561 $921 $1,065 $1,112 $1,126 $1,139 $946 $1,071 $1,194 $1,218 $1,255 2021 2022 2023 1Q24 2Q24 Residential Real Estate (RRE) Consumer Commercial Real Estate (CRE) Commercial (C&I) $2,668 $2,983 $3,207 $3,257 $3,315 Loan Balances Dollars in millions Consistent Loan Growth Across Multiple Portfolios Excludes all Paycheck Protection Plan Loans CRE excludes owner-occupied real estate loans Owner-occupied real estate loans shown as part of the C&I portfolio RRE and total loans do not include FV hedge mark of $5.8M, $1.2M, and $0.4M in 2023, 1Q24, and 2Q24, respectively • 2Q24 loan growth > $57 million or 7.1% (annualized) • YTD loan growth of 6.7% (annualized) ~9.6% CAGR

19 Loan Yields Steadily Increasing $2.60 $2.64 $2.64 $2.66 $2.67 $2.74 $2.85 $2.93 $2.98 $3.01 $3.07 $3.14 $3.21 $3.26 $3.32 3.94% 3.90% 4.04% 4.08% 3.82% 3.90% 3.85% 4.09% 4.13% 4.32% 4.57% 4.70% 4.86% 5.06% 5.17% 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Loan Portfolio Yields experiencing meaningful increase during 2024, continuing trend from 2023 Loan Balance Average Loan Portfolio Yield for the Periods Shown Dollars in billions Pre 2020 5.00% 2020 4.31% 2021 3.84%2022 4.66% 2023 6.73% 2024 7.49% Rate by Vintage • ~54% of balances are 2022-2024 vintages • Portfolio exit rate was 5.25% as of June 30, 2024 1Yield includes the impact of deferred fees and loan origination costs amortization 1 …

20 Consumer Loan Portfolio $860 $861 $893 $921 $921 $977 $1,031 $1,056 $1,065 $1,073 $1,088 $1,108 $1,112 $1,126 $1,139 3.95% 3.94% 3.92% 3.93% 3.87% 3.84% 3.83% 4.10% 4.02% 4.26% 4.61% 4.83% 5.11% 5.36% 5.61% 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Period-End Loan Balance Average Loan Portfolio Yield for the Period Shown Dollars in millions • 99.6% of the portfolio, or $1.13 billion are collateralized auto loans; only $4 million in unsecured personal loans • Auto loans sourced through a network of >485 dealers in New York and Vermont with customers extending beyond those states • Loans are underwritten/credit scored by Arrow • Essentially 100% of auto loans are fully amortizing, fixed rate loans • > 73% of auto loan balances have customers with FICO scores >700 • Average portfolio FICO score is 740; Average debt to income ratio ~31%; average LTV is 87% • Less than 3% of indirect loans have FICO scores < 620 • Annual losses over last 5 years were 9-20 bps • ~28% new, ~72% used vehicles exposure 2 1Yield includes the impact of deferred fees and loan origination costs amortization 2 Based on MSRP or used National Automobile Dealers Association (NADA) retail value at time of origination 1 Portfolio rates at June 30, 2024 - 5.99% Average origination rate for 2024 - 7.91% Rate excludes the impact of deferred fees/loan origination costs

21 Commercial Real Estate Portfolio $393 $407 $412 $431 $442 $441 $455 $468 $497 $507 $519 $529 $543 $555 $561 3.66% 4.90%5.08%5.19% 4.88%5.07%5.18% 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Period-End Loan Balance Average Loan Portfolio Yield for the Period Shown Dollars in millions • CRE loans extended to businesses / borrowers primarily located in our regional market area • No CRE exposure to large metropolitan areas – e.g., no NYC exposure • As of June 30, 2024: – ~$127 million, or ~23%, of CRE loans are variable- rate loans or are fixed-rate loans that reprice within 12 months – Non-owner occupied Office exposure accounted for ~10% of CRE and ~2% of total loans – Non-owner occupied Retail exposure accounted for ~14% of CRE and ~2% of total loans outstanding – Total Hotels and Motels exposure accounted for ~24% of CRE and ~4% of total loans outstanding – The majority of the remaining CRE exposure is comprised of multi-family and other residential investment properties 1 Yield includes the impact of deferred fees and loan origination costs amortization Commercial real estate excludes owner-occupied real estate loans 1 Portfolio rates trending upward June 30, 2024 - 5.38% Rate excludes the impact of deferred fees/loan origination costs

22 Commercial (C&I) Portfolio $305 $301 $312 $312 $316 $334 $346 $350 $350 $344 $352 $354 $359 $358 $360 4.17% 4.35% 4.57% 4.89% 5.38% 5.53% 5.66% $200 $250 $300 $350 $400 $450 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Period-End Loan Balance Average Loan Portfolio Yield for the Period Shown Dollars in millions • C&I loans extended to businesses/ borrowers primarily located in our regional market area • C&I portfolio a potential source for deposit acquisition • As of June 30, 2024: – ~$62 million, or ~17%, of C&I loans are either variable-rate loans or fixed-rate loans that reprice within 12 months 1Yield includes the impact of deferred fees and loan origination costs amortization Commercial (C&I) includes owner-occupied real estate loans 1 Portfolio rates trending upward 2Q24 “exit” rates at 5.27% vs 1Q24 at 5.14% Rate excludes the impact of deferred fees/loan origination costs

23 Residential Real Estate Loans $923 $908 $911 $930 $946 $967 $1,012 $1,051 $1,071 $1,081 $1,111 $1,148 $1,194 $1,218 $1,255 3.83% 3.79% 3.77% 3.76% 3.73% 3.71% 3.70% 3.78% 3.80% 4.10% 4.17% 4.25% 4.52% 4.57% 4.67% 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Period-End Loan Balance Average Loan Portfolio Yield for the Period Shown Dollars in millions • 2Q24 yields include ~22bps related to FV balance sheet hedge • One-to-four family residential real estate secured by first or second mortgages on residences and home equity lines located in our market area • LTV generally does not exceed 80% at time of origination (lower of purchase price or appraised value) • Loans exceeding 80% LTV at origination require private mortgage insurance or other guarantees • ~ $50MM, or 4%, of residential loan portfolio is for construction purposes • ~10% of the portfolio are home equity lines • As of June 30, 2024: • ~29% of portfolio subject to adjustable rates • ~71% of portfolio is fixed rate 1Yield includes the impact of deferred fees and loan origination costs amortization RRE loan balances exclude FV hedge mark 1 As of June 30, 2024, the average rate in the Residential Mortgage portfolio was ~4.22% and the Home Equity Line portfolio rate was ~7.25%, resulting in overall portfolio rate of ~4.51% Rates exclude the impact of deferred fees/loan origination costs

Deposits/Funding Sources 24

25 Deposit Balances – Excl. Brokered CDs 26.5% 25.8% 27.5% 27.0% 25.5% 26.5% 26.6% 27.2% 25.2% 26.2% 26.5% 24.6% 26.3% 24.3% 27.1% 25.2% 26.8% 23.3% 26.5% 24.3% 47.0% 49.8% 46.2% 48.7% 47.4% 48.3% 46.7% 49.5% 48.3% 49.5% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Axis Title Non-Municipal Municipal Business Dollars in billions $3.72 $3.55 $3.80 $3.50 $3.55 $3.50 $3.67 $3.51 $3.60 $3.51 • Decrease in 2Q24 balances driven by seasonal fluctuation in municipal deposits • Municipal deposits are from county and local governments, including school, water, fire, sewer districts and housing authorities • $175M in brokered CDs obtained in 4Q23, excluded from chart  Subject to three-year swap arrangement

26 Deposit Balances – Excl. Brokered CDs 21.8% 23.3% 24.1% 23.9% 22.3% 21.8% 21.8% 21.5% 19.3% 20.1% 31.1% 29.5% 29.3% 28.5% 27.0% 24.4% 25.1% 22.8% 25.2% 24.4% 42.4% 42.5% 41.8% 41.7% 42.3% 43.4% 40.9% 41.9% 41.6% 41.3% 4.8% 4.8% 4.9% 6.0% 8.5% 10.5% 12.3% 13.9% 13.9% 14.2% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Axis Title Deposit Balances Time Deposits Savings Deposits Interest-Bearing Checking Noninterest-Bearing Dollars in billions $3.72 $3.55 $3.80 $3.50 $3.55 $3.50 $3.67 $3.51 $3.60 $3.51 • Migration from low to high-cost products impacting pace of NIM expansion • Shifting deposit mix contributing to elevated interest expense/cost of deposits

27 Funding Sources and 2Q24 Exit Rates • Retail CD pricing currently at 4.60% for six months – lower than the average maturing CD specials for the next six months Dollars in millions Balance Rate Balance Rate Balance Rate Balance Rate Demand (Non-Interest Bearing) $ 297 0.00% $ 399 0.00% $ 8 0.00% $ 705 0.00% Interest Bearing Checking 307 0.06% 267 3.16% 283 0.15% 857 1.06% Savings and Money Market 695 1.17% 229 3.30% 522 4.86% 1,447 2.84% Time Deposits 436 4.00% 24 3.84% 40 2.84% 500 3.90% Core Deposits $ 1,735 1.48% $ 920 1.84% $ 853 3.16% $ 3,509 1.98% Brokered CD's - Net of Swap Effect 175 4.45% Total Deposits $ 1,735 1.48% $ 920 1.84% $ 853 3.16% $ 3,684 2.10% Other Borrowings 112 4.45% Junior Subordinated Obligations - TRUPS 20 3.43% Total Deposits and Borrowings $ 1,735 1.48% $ 920 1.84% $ 853 3.16% $ 3,815 2.17% Consumer Business Municipal Total

28 Deposit Rate Analysis Balance Exit Rate1 Balance Exit Rate1 Balance Exit Rate1 Demand (Non-Interest Bearing) $705 0.00% $697 0.00% $8 0.00% Interest Bearing Checking $857 1.06% $908 0.97% -$52 0.09% Savings and Money Market $1,447 2.84% $1,497 2.81% -$51 0.03% Time Deposits $500 3.90% $502 4.06% -$1 -0.16% Total $3,509 1.98% $3,604 1.98% -$95 0.02% 2Q 2024 1Q 2024 Variance Deposit pricing discipline challenged by changes in deposit mix Exit Rate is the rate as of the end of the quarter1

Credit Quality 29

30 Credit Quality 0.25% 0.44% 0.40% 0.37% 0.21% 0.20% 0.66% 0.66% 0.64% 2020 2021 2022 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Non-Performing Loans (NPL) / Gross Loans Dollars in millions $6.4 $11.7 $12.0 $11.2 $6.5 $6.3 $21.2 $21.4 $21.1 • Increase in 4Q23 related to ~$15.3M Commercial Loan relationship going on non-accrual  Strong collateral position; account closely monitored and in active work-out discussions • Charge-offs for 2Q24 included a previously specifically reserved amount ($0.7 million) for overdraft balances relating to one customer relationship • Excluding the above item, annualized charge-offs were 7bps in 2Q24 and 6bps on a YTD basis • ACL Coverage Ratio of 147%; 535% excluding the ~$15.3M Commercial Loan Well reserved and collateralized portfolio • One NPL relationship • Well collateralized • No specific reserve required 0.46% 0.18%

31 Allowance for Credit Losses Provision for Credit Losses $775K

32 Allowance for Credit Losses Provision for Credit Losses $1.4M

Capital Actions and Strategy 33

34 Equity and Ownership Dividends and Return of Capital • Declared 3rd Quarter Dividend of $0.27 payable August 23, 2024 • 45th consecutive quarter of dividends • YTD ~$6.4 million of stock repurchases (263K shares)  Equivalent of additional $0.37 per share dividend Capital Strategy • Evaluating potential Q4 dividend increase vs. stock dividend • $5M stock buyback authorization in place for opportunistic use Ownership • Directors, Management and Employees (through employee ownership plans) currently own ~6% of Arrow

35 Fully Diluted Tangible Book Value (TBV) TBV growth despite challenging economic environment and aggressive share repurchase activity

36 Capital Position 9.74% 12.88% 13.53% 14.57% 8.53% 9.63% 12.84% 13.50% 14.57% 8.24% 4.00% 4.50% 6.00% 8.00% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% Tier 1 Leverage Ratio Common Equity Tier 1 Capital Tier 1 Risk-Based Capital Total Risk-Based Capital Tangible Common Equity Capital Ratios – Arrow Minimum Regulatory Capital Ratios 1Q24 2Q24 Building Capital amidst share buy-backs and strong loan growth

Liquidity and Investments 37

38 Liquidity FDIC Insured Deposits ~70% Uninsured Deposits ~30% Total Deposits = $3.68 billion • ~ $2.5 billion in deposits are insured • ~ 9% on-balance sheet liquidity (cash and unencumbered AFS securities) at June 30, 2024 • ~$166 million of unencumbered securities at June 30, 2024 • Available Borrowing Capacity: Brokered Deposits $1.1 billion Borrowing Capacity1 $1.3 billion $2.4 billion • Liquidity and borrowing capacity provide in excess of 2X coverage of uninsured deposits • National Listing Services also available as additional sources of liquidity • Securities, Mortgage and Auto Loan Portfolios provide steady source of cash flow 1 FHLB, FRB and other bank lines Ample coverage of uninsured deposits Uninsured deposit accounts consist of municipal, business and high net worth individuals – many of which have a broad and deep banking relationship with Arrow

39 Duration Wtd Avg Remaining LifeCurrent Book Value Market ValueCategoy Unrealized Gain / (Loss) Book Yield • Decrease of $1.3M in unrealized losses from March 31, 2024 • Book yield decreased from 2.35% to 2.25% and duration decreased from 2.58 to 2.53 in 2Q2024 Investment Portfolio – AFS and HTM 1 1 Unrealized Gain/(Loss) on HTM for informational purposes only – not reflected in OCI Dollars in thousands June 30, 2024 1.84 593,615$ 547,240$ 2.56% 5.15% 2.94% 2.25% (2,530) 0 (2,894)$ Duration 1.36 3.88 3.76 2.89 Wtd Avg Remaining Life 1.41 4.58 4.40 1.53 0.60 1.40 2.89 5.25 3.18 1.65 2.02 1.61 0.60 1.47 2.89 4.17 2.76 1.532.40% 2.60% 96,454$ Agency MBS Agency CMO Municipal Municipal - Local Total HTM 74,148 99,348$ (225)$ (139) Category 2.53 7,051 6,714 (337) 3.97% 276,417 240,076 (36,341) 1.61% Unrealized Gain / (Loss)1 Book Yield 1.99% Current Book Value 160,000 Total Investments US Agencies 240 1,000 494,267$ 4,967$ Agency MBS (46,375)$ Market Value 153,353 76,678 14,981 2,722 2,583 14,981 240 947 450,786$ 4,742$ 49,559$ 49,456$ (103)$ 4.94% 0.90 0.86 (6,647) Agency CMO Municipal - Local Other Total AFS US Treasuries 7.12% 8.32% 2.12% 0 (53) (43,481)$

Overview and History 40

41 Our Profile Insurance Offices Bank Branches 937 • Multi-Bank Holding company • Glens Falls National Bank and Trust Company • Saratoga National Bank and Trust Company • Upstate Agency, LLC • Wealth Management Services • $4.2 billion in assets • 550 plus employees • Primary service area population of more than 1.1 million

42 Financial Snapshot 2019 2020 2021 2022 2023 2Q24 YTD Total assets $3,184,275 $3,688,636 $4,027,952 $3,969,509 $4,169,868 $4,244,407 Loans $2,386,120 $2,595,030 $2,667,941 $2,983,207 $3,212,908 $3,315,524 Loan-to-deposit ratio 91.2% 80.2% 75.1% 85.3% 87.1% 90.0% Return on average assets 1.24% 1.17% 1.28% 1.21% 0.74% 0.77% Efficiency ratio 57.08% 52.80% 54.16% 54.26% 68.81% 67.90% Net interest margin 3.05% 2.99% 2.97% 3.03% 2.65% 2.64% Tier 1 Leverage Ratio 9.98% 9.07% 9.20% 9.80% 9.84% 9.74% Return on average equity 13.17% 12.77% 14.09% 13.55% 8.29% 8.63% Tangible book value per share $16.48 $18.32 $20.41 $19.37 $21.06 $21.56 Net interest income $88,049 $99,202 $110,355 $118,343 $104,832 $53,607 Net income $37,475 $40,827 $49,857 $48,799 $30,075 $16,264 EPS (fully diluted) $2.23 $2.41 $2.92 $2.86 $1.77 $0.97 Dollars in thousands, except per share amounts

43 Our History 1851 Glens Falls Bank opened for business in a newly constructed building on Ridge Street. 1932 1912 > 1949 Changed name to Glens Falls National Bank and Trust Company. Broke ground at 250 Glen Street — our current headquarters. > 1965 addition 1981 Glens Falls National Bank (GFNB) went public on NASDAQ as GFAL. 1983 Formed Arrow Bank Corporation (now Arrow Financial Corporation) and trading began on NASDAQ as AROW.

44 Our History 1988 Formed Saratoga National Bank and Trust Company (SNB) and expanded footprint 1999 Surpassed $1 billion in assets 2004 2021 Bought first insurance agency Topped $4 billion in assets. 2018 Consolidated our insurance business into the Upstate Agency brand. 2012 Reached $2 billion in assets. 2001 Added to the Russell 2000 Index

45 President and Chief Executive Officer Mr. DeMarco joined the Company in 1987 as a commercial lender and since that time has served in positions of increasing responsibility within the organization. In 2012, he was named President and CEO of Saratoga National Bank. In May 2023, he was named President and CEO of Arrow Financial Corporation and Glens Falls National Bank. He holds a bachelor’s degree in finance from the University of Texas at Austin. Mr. DeMarco is a graduate of the Adirondack Regional Chamber of Commerce’s Leadership Program and the Stonier Graduate School of Banking. He serves as a Director of the Company and its subsidiary banks and sits on the boards of various non-profits dedicated to healthcare and economic development. David S. DeMarco, President and CEO

46 Experienced Leadership Team Mr. Kaiser joined the Company in 2001 as Vice President and Commercial Loan Officer. He served as Corporate Banking Manager and was later promoted to Senior Vice President, before being named Chief Credit Officer in 2011, followed by promotions to Executive Vice President and Senior Executive Vice President. Prior to joining the Company, he spent 15 years in the Capital Region as a Commercial Loan Officer. Mr. Kaiser has a bachelor’s degree in business administration from Siena College. Mr. Kaiser actively serves on boards of numerous community organizations. David D. Kaiser, Senior Executive Vice President and CCO Mr. Ivanov joined the Company in 2023 with more than 30 years of experience in Financial Planning & Analysis, Controllership, SOX, Financial Reporting and Treasury. Mr. Ivanov previously served as CFO for Bankwell Financial Group, helping it almost double in size over six-plus years to $3.3 billion. He has held CFO positions at Darien Rowayton Bank and for Doral Bank’s U.S. Operations. He began his career with Ernst & Young and held accounting/ finance positions at PepsiCo, GE Capital and Bridgewater Associates. Mr. Ivanov holds an MBA and bachelor’s degree in accounting and finance from the University of South Florida. He is also Six Sigma Black Belt certified. Penko Ivanov, Senior Executive Vice President, CFO, Treasurer and CAO Mr. Wise joined the Company in 2016 as Senior Vice President of Administration for Glens Falls National Bank. He has since been promoted to Senior Executive Vice President and Chief Risk Officer of the Company. He has more than 30 years of experience building and leading both community banks and bank-owned insurance agencies. Mr. Wise previously served as Vice President and CISO for The Adirondack Trust Company and acted as Executive Vice President, COO for Wise Insurance Brokers, Inc. He has extensive experience in designing, implementing and managing workflows and delivering operational efficiency. He holds a bachelor’s degree from Boston University’s School of Management. Andrew J. Wise, Senior Executive Vice President and CRO

47 Experienced Leadership Team Ms. Pancoe joined the Company in 2018 as Director of Human Resources. In her current role as Chief Human Resources Officer, she has executive oversight of the Company’s human resource strategies, which includes organizational design and succession planning, talent acquisition and retention, performance management, professional development and compensation and benefits. Prior to joining the Company, Ms. Pancoe held various human resource management roles within the power generation and engineering services industry. Ms. Pancoe holds a bachelor’s degree in psychology from Clark University in Worcester, MA, and an MBA from the University at Albany. In addition, she maintains a certified professional human resources designation. Brooke Pancoe, Executive Vice President, Chief Human Resources Officer Mr. Yrsha joined the Company in 2015. He currently is the Chief Banking Officer and oversees the strategic direction of the Retail Banking unit, which includes retail deposits and lending, business development, consumer payments, business services, municipal banking, as well as small business and retail lending. In addition, Marc oversees the Wealth Management division and Marketing. Prior to joining our Company, Mr. Yrsha spent time in retail leadership, retail and commercial lending at large regional and community banks within the Arrow footprint. Mr. Yrsha is active in the community serving in leadership roles on a variety of boards. He is a graduate of Castleton University in Vermont and the Adirondack Regional Chamber of Commerce’s Leadership Adirondack Program. Marc Yrsha, Senior Executive Vice President, Chief Banking Officer Mr. Jacobs joined Glens Falls National Bank in 2003 as Information Systems Manager. He was later promoted to Senior Vice President and then Executive Vice President. As Chief Information Officer, Mr. Jacobs guides the Company’s strategic technology plans. He has more than 30 years of experience in the community banking industry, having previously served as Operations Manager at Cohoes Savings Bank and Item Processing Manager at Hudson River Bank and Trust. Mr. Jacobs earned a bachelor’s degree in finance from Siena College and an associate degree in business administration from Hudson Valley Community College. Michael Jacobs, Executive Vice President, Chief Information Officer

Thank You

XML

Cover Page	Jul. 24, 2024
Cover [Abstract]
Document Type	8-K
Entity Registrant Name	ARROW FINANCIAL CORPORATION
Entity Incorporation, State or Country Code	NY
Entity File Number	0-12507
Entity Tax Identification Number	22-2448962
Entity Address, Address Line One	250 Glen Street
Entity Address, City or Town	Glens Falls
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	12801
City Area Code	518
Local Phone Number	745-1000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, Par Value $1.00 per share
Trading Symbol	AROW
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0000717538
Amendment Flag	false
Document Period End Date	Jul. 24, 2024