2024 Annual Review

2024

ANNUAL REVIEW

It has been a year of remarkable strides and transformative growth for our company. Our unwavering commitment to serving our shareholders, customers and communities has been the driving force behind our success.

David S. DeMarco

President and CEO

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 outcomesand results may differ, explicitly or by implication. We are not obliged to revise or update these statements to reflectunanticipated events. In conjunction with Arrow's Annual Report on Form 10-K for the year ended December 31, 2024 (the 2024 Form 10-K) and other filings with the Securities and Exchange Commission.

As we reflect on 2024, I'm proud to share theremarkable strides we've made together. Thispast year was transformational for our company,marked by significant achievements that havestrengthened our foundation and brightenedour future.

A landmark moment was the unification of our twosubsidiary banks, Glens Falls National Bank and Trust Company and Saratoga National Bank andTrust Company, under the unified brand ArrowBank National Association™, or Arrow Bank™.

This strategic unification simplifies the bank'sbrand identity, strengthens our market presenceand positions the bank for future growth whilemaintaining the same local, personalized servicethat's been our hallmark. Behind Arrow Bank's newname are the same great people and the sametrusted services our customers have come toknow and expect. The leadership team will remainunchanged, ensuring stability and continuity.

Our growth trajectory continued with the acqui-sition of a new bank branch in Whitehall, New

York, and the assets of a local insurance agencyunder our subsidiary, Upstate Agency, LLC. Theseexpansions widen our service area, enhance ourofferings and provide more value for our share-holders.

Our reported 2024 net income of $29.7 million,a slight decrease from $30.1 million in 2023, and earnings per share of $1.77, consistantwith the prior year, tell only part of the story.

In 2024, we achieved mid-single digit loangrowth, enhanced our net interest margin andtook a proactive approach to balance sheetmanagement. We continued enhancing share-holder value through share repurchases andan increased quarterly cash dividend of $0.28per share. We were named to the prestigious

Piper Sandler Sm-All Stars: Class of 2024 list, and

before unification, our subsidiary banks continuedtheir legacy of financial strength by maintainingour 5-Star "Exceptional Performance" ratingsfrom Bauer Financial for the 70thand 62ndconsec-utive quarters.

We notably appointed longtime board member

TenéeR. Casaccio as our new Board Chair, makingher our first female Board Chair. Additionally, weexpanded the expertise of our Board of Directorsby welcoming four new members: James M.Dawsey, Dr. Kristine D. Duffy, Philip Morris andDaniel J. White. Their local knowledge and profes-sional experience will be invaluable as we navi-gate future opportunities.

Our long-standing commitment to giving backto our communities continued in 2024. As notedtoward the end of this review, we demonstratedan impressive commitment to our communi-ties through financial contributions and volun-teer efforts. Our company and team membersdonated $776,000, supporting 605 communityorganizations across our eight-county servicearea. Our volunteer efforts expanded with 261volunteers logging an impressive 11,902 hoursof service, both reflecting a 5 percent increasefrom 2023.

None of these accomplishments would havebeen possible without the knowledge, passionand dedication of our exceptional team. Theirunwavering commitment to our mission has beenthe driving force behind our continued success.To our shareholders, thank you for your invest-ment in Arrow Financial Corporation. As we moveforward, we will build on this year's momentum, striving for excellence in all we do.

David S. DeMarcoPresident and CEO

IN REVIEW

In 2024,we took significant steps to unify our brand,expand our presence,enhance security and deliver strong financial performance-all while keeping our customers,communities and shareholders at the heart of everything we do. Below,you'll find updates on our progress,followed by some financial highlights.

SOLID RESULTS

This year, we delivered steady financial performance while making strategic moves to position ourselves for future success.

With net income of $29.7 million and earnings per share of $1.77, we maintainedstrength despite a challenging interest rate environment. We grew loans by mid-single digits, expanded our net interest margin and actively managed our balance sheet. Our disciplined capital manage-ment allowed us to enhance shareholder

Additionally, we were named to the Piper Sandler Sm-All Stars: Class of 2024 list, rec-ognizing top-performingsmall-cap banks. Before unification, our subsidiary banks continued their 5-Star "Exceptional Performance" ratings from Bauer Financial for the 70thand 62ndconsecutive quarters, respectively, rein-forcing our stability and reliability.

ARROW BANK:

ONE NAME, ONE VISION

In 2024, we took a historic step forwardby unifying our subsidiary banks, Glens

Falls National Bank and Saratoga National

Bank under our new name, Arrow Bank. While our namehas changed, everything our customers trust and valueremains the same: the samegreat team, the same trusted services and the same longtime commit-ment to our customers and communities.

This unification reflects a long-awaited business goal of unifying the banks to allow us to operate as one company working together to deliver excep-tional banking services. Our unification strengthens our presence in northeasternNew York, providing a seamless expe-rience while honoring the deep-rootedlegacies of Glens Falls National Bank and Saratoga National Bank. With amodernized brand and a continued focus on relationship-driven banking, we are better positioned than ever to serve our customers across the regionthrough Arrow Bank's 38 branches.

Customers will continue to see familiarfaces at their local branches, rely on the products and services they trust and experience the strong community sup-port that defines the Arrow Family of Companies. As Arrow Bank, we are unifiedunder one bank name, strengthening our ability to serve our customers and communities for generations to come.

Our efforts to promote and educate our customers and prospects about the

Arrow Bank rebrand will continue in 2025.

GROWING OUR BUSINESS

Strategic growth remained a key focusin 2024. We expanded our presence in Washington County with the acquisition of a Whitehall, New York branch, adding $37.5 million in deposits and $3 million in loans. Thisstrengthens our commit-ment to the community, where we now operate nine branches. We also grew our insurance business by acquiring selectassets of A&B Agency, Inc., strengthening Upstate Agency's position as a leading insur-ance provider. These acquisitions expand our reach while maintaining the personalized, consultative approach that sets us apart. With these strategic moves, we are well-positioned for continued growth and to meet evolving customer and community needs.

ADVANCING TECHNOLOGY

Throughout our company, we are always researching and implementing ways to enhance our technology. This year, we were pleased to offer our customers access tomore than 50,000

ATMs across the United

States and interna-tionally through the

Allpoint ATM Network.

With this partnership, customers no longer need to rely solely onbank branch ATMs to make simple with-drawals or deposits without incurring fees.

Additionally, after years of behind-the -scenes planning, our Wealth Management

Team converted to a new enhanced customer platform, that offers a personalized experience and a user-friendly design with intuitive navigation. We'll continue our efforts to offer best-in-class digital services to ourcustomers in 2025.

SAFER BANKING, TOGETHER

Fraud threats continue to evolve, andwe remain committed to protecting ourcustomers. In 2024, we expanded fraudprevention tools, enhanced security measures and continued educating customers on how to detect and prevent scams. To further strengthen these efforts, we established a dedicated fraud department solely focused on monitoring, preventing and addressing fraud-related issues for our customers and our communities. Our team works tirelessly behind the scenes to safeguard accounts, help customers one-on-one and ensure safer banking for everyone.

SOCIALLY CONSCIOUS PERFORMANCE

At Arrow, responsible business practicesare at the core of everything we do. We foster an inclusive workplace that sup-ports employee growth and well-being while remaining deeply committed to strengthening our communities through financial literacy, volunteer-ism and local partnerships.

Sustainability is also a priority, with investments in energy-efficient infra-structure and digital banking solutions that reduce our environmental impact. With a strong governance framework and sound risk management, we uphold high standards of accountability, data security and ethical business practices.

At Arrow, doing what's right isn't just acommitment, it's how we do business.

EXPANDING THE ARROW BOARD

We are pleased to welcome Tenée R. Casaccio, as our new Board Chair, along with four new board members, James M. Dawsey, Dr. Kristine D. Duffy, Philip Morris and Daniel J. White. Their diverseexpertise in financial and operational management, strategic planning, board

governance, community engagement, bank auditing and financial oversight will help guide our continued growth and strategic direction. We look forwardto the contributions of our new Board Chair and Board members as we build on Arrow's legacy of strength, stabilityand innovation. The members of our full

Board of Directors are listed on page 12.

GREAT TEAM,

GREAT RESULTS

Our success in 2024 is a direct result ofthe incredible talent and dedication within our team. Their hard work and commit-ment to our goals have been essential in achiev-ing the milestones we've celebrated this year. It is their continuous effort and shared vision that has propelled us forward, enabling us to reach new heights.

As we look to the future, we are excitedto continue building on this foundation, knowing that our team will remain at the heart of everything we do. Thank you toeveryone at Arrow for your invaluablecontributions to our sustained success.

IN MEMORY OF

MICHAEL F. MASSIANO, JR.

We honor the memory of Michael F. Massiano, Jr., former Chairman, President and CEO of Arrow Financial Corporation and Glens Falls National Bank and Trust Company. Mike dedicated more than 50years to our organization, beginning asa teller in 1956 and advancing to lead our company from 1979 to 1989. Hisvision helped shape our success, andhe continued to serve on the Board for a decade after retiring in 1997. A lifelong Glens Falls, New York resident, Mike wasdeeply committed to his community, contributing to numerous charitableorganizations. His leadership and integ-rity leave a lasting impact on Arrow. We are grateful for Mike's legacy and hisunwavering dedication to our mission.

Our new name, brand and look are an investment in the future of our customers, our employees and our communities.

The debut of our new Arrow Bank branding and signage at the Main Office branch at 250 Glen Street in downtown Glens Falls, New York. Photos: Best Frame Forward.

2024 Financial Highlights

Arrow delivered steady financialperformance by growing loans, expanding our net interest margin and actively managing our balance sheet.

For a full view of our 2024 financial performance, visitarrowfinancial.com

Our 2024 results contained several one-time, non-core items, which impacted results. Non-core items included acquisition-related expenses, residual expenses related to the 2022 Form 10-K and 1Q 2023 Form 10-Q filing delays, bank unification costs and the repositioning of the securities portfolio. For detailed financial results, please refer to our Form 10K for December 31, 2024 as well as our earnings release and investor presentations for 2024 at arrowfinancial.com.

Performance Comparisons

As of December 31

($ in Millions)

As of December 31

($ in Millions)

Our 2024 results contained several one-time, non-core items, which impacted results. Non-core items included acquisition-related expenses, residual expenses related to the 2022 Form 10-K and 1Q 2023 Form 10-Q filing delays, bank unification costs, bank unification costs and the repositioning of the securities portfolio. For detailed financial results, please refer to our Form 10K for December 31, 2024 as well as our earnings release and investor presentations for 2024 at arrowfinancial.com.

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Arrow Financial Corporation published this content on March 27, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 27, 2025 at 17:43:20.710.