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  4. [8-K/A] ARROW FINANCIAL CORP Amends Material Event Report

Arrow Financial posts $5.55B pro forma after Adirondack

Arrow Financial Corporation (AROW) filed an amended current report to add detailed historical and unaudited pro forma financial information related to its completed acquisition of Adirondack Bancorp, Inc. and Adirondack Bank.

Filing Impact
(Neutral)
Filing Sentiment
(Neutral)
Form Type
8-K/A

Rhea-AI Filing Summary

Arrow Financial Corporation (AROW) filed an amended current report to add detailed historical and unaudited pro forma financial information related to its completed acquisition of Adirondack Bancorp, Inc. and Adirondack Bank. The amendment updates only the financial statement and exhibit section.

Adirondack reported total assets of $1.01 billion and deposits of $922.7 million at March 31, 2026, with first‑quarter 2026 net income of $0.3 million and 2025 net income of $3.5 million. Pro forma, the combined company would have had $5.55 billion in assets at March 31, 2026, including estimated acquisition‑related goodwill of about $46.6 million and core deposit intangibles of about $16.4 million. Under the merger terms, each Adirondack share was exchanged for 1.8610 AROW shares plus $18.72 in cash.

Positive

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Negative

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Filing Explained

The completed acquisition added cash consideration and newly issued Arrow stock, while pro forma figures remain preliminary and exclude $12.8 million of expected costs.

Arrow Financial Corporation filed this Form 8-K/A after the Adirondack merger closed on July 1, 2026. The completed transaction resulted in Arrow issuing $81.2 million of common stock alongside cash consideration; under the disclosed dilution definition, that issuance increases the total share count and reduces existing holders’ percentage ownership absent offsetting changes.

Form 8-K reports specified material events, and this amendment supplements only Item 9.01 with Adirondack financial statements and unaudited pro forma combined information. The pro forma figures are explicitly informational, preliminary, and not a representation of actual historical combined results or a projection of future results.

The filing also identifies $12.8 million of expected severance, contract-termination, system-conversion, and marketing costs that are not reflected in the unaudited pro forma statements.

Actual acquisition-accounting adjustments are to be recorded as of the merger’s effective date and may differ from the preliminary amounts shown here.

Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Adirondack Total Assets $1.01 billion Consolidated assets at March 31, 2026 (in thousands: 1,010,596)
Adirondack Deposits $922.7 million Total deposits at March 31, 2026 (in thousands: 922,716)
Adirondack Net Income Q1 2026 $0.3 million Net income for the three months ended March 31, 2026 (in thousands: 252)
Adirondack Net Income 2025 $3.5 million Net income for the year ended December 31, 2025 (in thousands: 3,504)
Pro Forma Combined Assets $5.55 billion Arrow plus Adirondack pro forma total assets at March 31, 2026 (in thousands: 5,552,646)
Pro Forma Net Income 2025 $47.1 million Unaudited pro forma combined net income for 2025 (in thousands: 47,113)
Acquisition Goodwill $46.6 million Estimated goodwill created in the Adirondack transaction per pro forma note 4
Core Deposit Intangibles $16.4 million Estimated core deposit intangible asset recorded from the acquisition per pro forma note 5
unaudited pro forma condensed combined financial information financial
"The unaudited pro forma condensed combined financial information combines the historical consolidated"
Unaudited pro forma condensed combined financial information is a preliminary set of shortened financial statements that shows how two or more businesses would have performed if they had been operating together, presented without an independent audit. Investors use it as a dress-rehearsal snapshot to gauge the potential size, profitability and cash flow impact of a merger or acquisition, but should treat it as an estimate rather than a final, verified record.
core deposit intangibles financial
"To record the $16.4 million of core deposit intangibles, which is expected to be amortized"
Core deposit intangibles are the recorded value placed on a bank’s customer deposits when one financial institution buys another, reflecting the extra worth of stable, low-cost accounts that are expected to stay after the sale. Investors care because this value is written into the buyer’s books and gradually expensed over time, which affects reported earnings and signals how much the market values the predictability and cost advantage of those customer relationships—similar to paying extra for a neighborhood store because its regular customers keep coming back.
allowance for credit losses financial
"To record the $976 thousand net increase in the allowance for credit losses, which reflects"
Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.
collateral dependent loans financial
"Loans considered collateral-dependent were as follows at March 31, 2026 and December 31, 2025"
accumulated other comprehensive loss financial
"The balances and changes in the components of accumulated other comprehensive income (loss), net of tax"
Accumulated other comprehensive loss is the running negative total of certain gains and losses that companies record outside their regular profit-and-loss statement, such as changes in the value of some investments, pension adjustments, or currency translation effects. It matters to investors because it reduces shareholders’ equity and reveals economic swings that haven’t affected reported net income yet — like a side ledger showing pending ups and downs that could influence future cash flow or balance-sheet strength.
sum-of-the-years’ digits financial
"core deposit intangibles, which is expected to be amortized over the sum-of-years' digits for 10 years"

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What does Arrow Financial (AROW) add in this 8-K/A amendment about the Adirondack acquisition?
The amendment adds Adirondack Bancorp’s March 31, 2026 interim financial statements and detailed unaudited pro forma combined balance sheet and income statements, showing how Arrow and Adirondack would look on a combined basis for 2025 and first-quarter 2026.

How large is Adirondack relative to Arrow Financial (AROW) based on this filing?
As of March 31, 2026, Adirondack reported $1.01 billion in assets versus Arrow’s $4.52 billion. The unaudited pro forma combined balance sheet shows $5.55 billion in total assets for the merged company, highlighting Adirondack as a meaningful addition to Arrow’s size.

What were Adirondack’s recent earnings included in Arrow’s (AROW) filing?
Adirondack generated net income of $0.3 million for the quarter ended March 31, 2026 and $3.5 million for the year ended December 31, 2025. First‑quarter 2026 earnings per share were $0.23, compared with $0.44 for the same quarter in 2025.

What consideration did Arrow Financial (AROW) pay for each Adirondack share?
Each outstanding share of Adirondack common stock was converted into the right to receive 1.8610 shares of Arrow common stock plus $18.72 in cash, according to the merger terms summarized in the notes to the pro forma financial information.

How much goodwill and intangibles arise from the Adirondack deal for AROW?
The pro forma adjustments reflect approximately $46.6 million of goodwill recorded in the acquisition and about $16.4 million of core deposit intangibles, which are expected to be amortized over 10 years using the sum‑of‑the‑years’ digits method.

What do the pro forma results show for Arrow Financial (AROW) after acquiring Adirondack?
For 2025, the unaudited pro forma combined company shows net income of $47.1 million and basic earnings per share of $2.54 on 18.5 million average basic shares, incorporating purchase accounting adjustments and certain merger‑related costs.

How strong is the combined bank’s capital position in the Adirondack financials?
Adirondack’s bank subsidiary reported a Common Equity Tier 1 ratio of 17.17% and a Total risk‑based capital ratio of 18.15% at March 31, 2026, levels regulators categorized as well capitalized under applicable capital rules.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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0000717538FALSE00007175382026-07-012026-07-01


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT

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

Date of Report: July 1, 2026
(Date of earliest event reported)

ARROW FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

New York0-1250722-2448962
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
250 Glen StreetGlens FallsNew York12801
(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 ClassTrading SymbolName of each exchange on which registered
Common Stock, Par Value $1.00 per shareAROWNASDAQ 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☐




Explanatory Note

On July 1, 2026, Arrow Financial Corporation (the “Company”) closed its previously announced acquisition of Adirondack Bancorp, Inc. (“Adirondack”) and its banking subsidiary Adirondack Bank, which was merged with and into Arrow Bank pursuant to the terms of the Agreement and Plan of Merger (the "Agreement") dated February 25, 2026.

On July 1, 2026, the Company filed a Current Report on Form 8-K reporting the completion of the acquisition (the "Original Report"). This Amendment No. 1 to the Original Report is being filed with the Securities and Exchange Commission (the "Commission") solely to amend and supplement item 9.01 of the Original Report, as described in Item 9.01 below. This Amendment No. 1 makes no other amendments to the Original Report.

The pro forma financial information included in this Amendment No. 1 to the Original Report has been presented for informational purposes only and does not purport to represent the actual results that the Company and Adirondack would have achieved had the companies been combined during the periods presented, and is not intended to project any future results of operations for the combined company.


Item 9.01. Financial Statements and Exhibits

(a) Financial statements of businesses or funds acquired.

Pursuant to General Instruction B.3 of Form 8-K, the audited consolidated financial statements of Adirondack as of and for the year ended December 31, 2025, are not required to be filed again by this Current Report on From 8-K, because substantially the same information was previously filed in the Company's Registration Statement on Form S-4, as originally filed with the Commission on April 22, 2026 (File No. 333-295242) and as thereafter amended. The unaudited consolidated statements of financial condition of Adirondack as of March 31, 2026 and December 31, 2025 and the unaudited consolidated statements of income, unaudited consolidated statement of comprehensive income, unaudited consolidated statements of stockholders' equity and unaudited consolidated statements of stockholders' equity for the three months ended March 31, 2026 and March 31, 2025 are filed herewith as Exhibit 99.1 and are incorporated by reference into this item 9.01(a).

(b) Pro forma financial information.

The unaudited pro forma condensed consolidated combined financial information as of and for the three months ended March 31, 2026 and for the year ended December 31, 2025 is filed herewith as Exhibit 99.2 and is incorporated by reference into this item 9.01(b)

(c)     Exhibits

Exhibit No Description
Exhibit 99.1
Unaudited consolidated statements of financial condition of Adirondack as of March 31, 2026 and December 31, 2025 and the unaudited consolidated statements of income, unaudited consolidated statement of comprehensive income, unaudited consolidated statements of stockholders' equity and unaudited consolidated statements of stockholders' equity for the three months ended March 31, 2026 and March 31, 2025.
Exhibit 99.2
Unaudited Pro Forma Condensed Combined Consolidated Financial Information as of and for the three months ended March 31, 2026 and for the year ended December 31, 2025.
Exhibit 104Cover 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
Date:September 14, 2026/s/ Penko Ivanov
Penko Ivanov
Chief Financial Officer

ADIRONDACK BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION AT MARCH 31, 2026 AND DECEMBER 31, 2025 (UNAUDITED) March 31, December 31, 2026 2025 ASSETS Cash and due from banks 53,512$ 16,484$ Federal funds sold 1,368 1,354 Cash and cash equivalents 54,880 17,838 Investment securities Available-for-sale 289,310 244,444 Held-to-maturity (fair value - 2026: $6,872 ; 2025: $6,007) 6,675 5,780 Other 1,438 1,732 Total investment securities 297,423 251,956 Loans receivable, net of allowance for credit losses - 2026:$4,702; 2025: $4,709 606,222 619,279 Bank owned life insurance 22,007 21,868 Right-of-use assets - operating leases 8,268 8,462 Premises and equipment, net 8,881 8,433 Goodwill 2,023 2,023 Accrued interest receivable and other assets 10,892 11,995 Total assets 1,010,596$ 941,854$ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES: Deposits Interest bearing Time 166,671$ 166,279$ Savings and NOW 419,488 372,585 Noninterest bearing demand 336,557 309,113 Total deposits 922,716 847,977 Federal Home Loan Bank advances - 6,521 Lease liabilities - operating leases 8,473 8,658 Subordinated debentures 8,248 8,248 Accrued interest payable and other liabilities 5,716 3,946 Total liabilities 945,153$ 875,350$ STOCKHOLDERS' EQUITY Preferred stock - - Common stock 5,821 5,821 Paid-in capital 8,084 8,084 Retained earnings 68,970 68,718 Treasury stock (4,267) (4,267) Accumulated other comprehensive loss (12,180) (10,801) Deferred stock-based compensation (985) (1,051) Total stockholders' equity 65,443 66,504 Total liabilities and stockholders' equity 1,010,596$ 941,854$ (In Thousands) The accompanying notes are an integral part of these consolidated statements. 1

 

ADIRONDACK BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED) 2026 2025 INTEREST AND DIVIDEND INCOME Loans receivable, including fees 8,134$ 8,198$ Securities: Taxable 1,950 1,811 Tax Exempt 145 153 Other 249 252 Total interest and dividend income 10,478 10,414 INTEREST EXPENSE Deposits 1,620 1,907 Borrowings 179 187 Total interest expense 1,799 2,094 Net interest income 8,679 8,320 PROVISION FOR CREDIT LOSSES - 210 Net interest income after provision for credit losses 8,679 8,110 NONINTEREST INCOME Service charges and fees 522 475 Interchange income 435 443 Insurance agency income 164 221 Gain on sales of loans 80 74 Increase in cash surrender value of bank owned life insurance 139 135 Other 89 54 Total noninterest income 1,429 1,402 NONINTEREST EXPENSE Salaries and employee benefits 5,141 4,870 Occupancy and equipment 1,135 1,066 Data processing 1,428 1,163 FDIC insurance premiums 173 175 Professional fees 795 230 Marketing 73 132 Business development 161 185 Charitable contributions 150 144 Other 762 973 Total noninterest expenses 9,818 8,938 Income before income tax expense 290 574 INCOME TAX EXPENSE 38 101 Net income 252$ 473$ (In Thousands) The accompanying notes are an integral part of these consolidated statements. 2

 

ADIRONDACK BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED) 2026 2025 NET INCOME 252$ 473$ OTHER COMPREHENSIVE INCOME: Unrealized (losses) gains arising during the year on available-for-sale securities (1,745) 4,499 Income tax benefit (expense) 366 (945) OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX (1,379) 3,554 Comprehensive (Loss) Income (1,127)$ 4,027$ The accompanying notes are an integral part of these consolidated statements. 3

 

ADIRONDACK BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED) Accumulated Other Deferred Stock - Preferred Common Paid-in Retained Treasury Comprehensive based Stock Stock Capital Earnings Stock Income (Loss) Compensation Total Balance - January 1, 2025 -$ 5,751$ 7,292$ 66,691$ (4,241)$ (18,741)$ (333)$ 56,419$ Net income - - - 473 - - - 473 Other comprehensive income - - - - - 3,554 - 3,554 Amortization of restricted stock - - - - - - 45 45 Balance March 31, 2025 - 5,751 7,292 67,164 (4,241) (15,187) (288) 60,491 Balance - January 1, 2026 - 5,821 8,084 68,718 (4,267) (10,801) (1,051) 66,504 Net income - - - 252 - - - 252 Other comprehensive loss - - - - - (1,379) - (1,379) Amortization of restricted stock - - - - - - 66 66 Balance March 31, 2026 -$ 5,821$ 8,084$ 68,970$ (4,267)$ (12,180)$ (985)$ 65,443$ The accompanying notes are an integral part of these consolidated statements. 4

 

ADIRONDACK BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED) March 31, March 31, 2026 2025 CASH FLOW FROM OPERATING ACTIVITIES: Net income 252$ 473$ Adjustments to reconcile net income to net cash flow from operating activities: Net investment (accretion) amortization 131 (19) Provision for credit losses - 210 Capitalization of net deferred loan origination costs 47 98 Originations of residential mortgage loans held for sale (2,662) (1,972) Proceeds from sales of residential mortgage loans held for sale 2,742 2,046 Net gains on sale of loans (80) (74) Increase in cash surrender value of bank owned life insurance (139) (135) Depreciation and amortization of premises and equipment 329 309 Net change in mortgage servicing rights 3 (35) Deferred income taxes (15) (10) Stock-based compensation 66 45 Non-cash lease expense 10 10 (Decrease) Increase in accrued interest receivable and other assets 1,666 (345) Increase (decrease) in accrued interest payable and other liabilities 1,585 (1,055) Net cash flow from operating activities 3,935 (454) CASH FLOW FROM INVESTING ACTIVITIES: Securities available for sale: Proceeds from maturities, calls and principal paydowns 57,957 28,483 Purchases (104,700) (74,621) Securities held to maturity: Proceeds from maturities, calls and principal paydowns 381 1,170 Purchases (1,276) (350) Securities - other: Proceeds from maturities, calls and principal paydowns 2,015 658 Purchases (1,721) (47) Portfolio loan originations and principal collections, net 13,010 409 Purchases of premises and equipment (777) (56) Net cash flow from investing activities (35,111) (44,354) CASH FLOW FROM FINANCING ACTIVITIES: Net increase in deposits 74,739 72,903 Repayment of Federal Home Loan Bank Advances (6,521) (13,580) Net cash flow from financing activities 68,218 59,323 CHANGE IN CASH AND CASH EQUIVALENTS 37,042 14,515 CASH AND CASH EQUIVALENTS - beginning of year 17,838 25,634 CASH AND CASH EQUIVALENTS - end of year 54,880$ 40,149$ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Interest paid 1,380$ 2,267$ Income taxed paid 100$ -$ SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES: Change in right-of-use assets due to decrease in lease obligations (194)$ (191)$ (In Thousands) The accompanying notes are an integral part of these consolidated statements. 5

 

6 ADIRONDACK BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS INTERIM CONDENSED (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Adirondack Bancorp, Inc. (the “Company”) provides a full range of banking services to retail, commercial and municipal customers through its wholly-owned subsidiary, Adirondack Bank (the “Bank”). The Bank’s operations are conducted in sixteen full service branches, three drive-thru facilities and one loan production office located in the Adirondack, Mohawk Valley and Syracuse regions of New York State. The Company and the Bank are subject to the regulations of certain federal and state agencies and undergo periodic examinations by those regulatory authorities. Use of Estimates The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and such differences, may be significant. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance and provision for credit losses on loans, testing goodwill for impairment, the realizability of deferred taxes and employee benefit obligations. Basis of Consolidation The consolidated financial statements include the accounts of the Company, the Bank and the Bank’s wholly-owned subsidiary, Adirondack Insurance Services, Inc. and have been prepared in accordance with accounting principles generally accepted in the United States of America. All significant intercompany accounts and transactions have been eliminated in consolidation, in accordance with generally accepted accounting principles. Certain information and footnote disclosure normally included in the consolidated financial statements prepared in accordance with GAAP and industry practice have been omitted from interim reporting pursuant to SEC rules. These Interim Condensed Consolidated Financial Statements and the accompanying notes should be read in conjunction with the Company’s audited consolidated financial statements for the years ended December 31, 2025 and 2024. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or any other period. The Company has two wholly-owned subsidiaries, Adirondack Statutory Trust I (Trust I) and Adirondack Statutory Trust II (Trust II) which were formed for the purpose of issuing trust preferred securities. The accounts of Trust I and Trust II are not included in the consolidated financial statements of the Company. The significant accounting policies followed by the Company and used in the preparation of these unaudited Interim Condensed Consolidated Financial Statements are disclosed in the Corporation’s audited financial statements for the year ended December 31, 2025 and are unchanged at March 31, 2026. These policies are in accordance with principles generally accepted in the United States of America and conform to common practices in the banking industry.

 

7 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Consolidation (Continued) All adjustments, consisting of only normal recurring adjustments or accruals, which are necessary for a fair presentation of the consolidated financial statements have been made at and for the three-month periods ended March 31, 2026 and 2025. The results of operations for the three-month periods ended March 31, 2026 and 2025 are not necessarily indicative of results which may be expected for an entire fiscal year or any other period. 2. INVESTMENT SECURITIES The amortized cost and approximate fair values of investment securities are as follows at March 31, 2026 and December 31, 2025: March 31, 2026 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In Thousands) Available-for-sale debt securities: U.S. Government agency and sponsored enterprise $ 107,424 $ 16 $ (2,882) $ 104,558 State and political subdivisions 13,518 11 (267) 13,262 Residential mortgage- backed: U.S. Government sponsored enterprise 137,615 212 (10,787) 127,040 Asset-backed U.S. Small Business Administration 46,170 16 (1,736) 44,450 304,727 255 (15,672) 289,310 Held-to-maturity debt securities: State and political subdivisions 6,675 198 (1) 6,872 6,675 198 (1) 6,872 Other: Federal Home Loan Bank stock 708 - - 708 Federal Reserve Bank stock 730 - - 730 1,438 - - 1,438 $ 312,840 $ 453 $ (15,673) $ 297,620

 

8 2. INVESTMENT SECURITIES (CONTINUED) 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In Thousands) Available-for-sale debt securities: U.S. Government agency and sponsored enterprise $ 52,465 $ 46 $ (2,660) $ 49,851 State and political subdivisions 13,916 17 (250) 13,683 Residential mortgage- backed: U.S. Government sponsored enterprise 142,337 519 (9,699) 133,157 Asset-backed U.S. Small Business Administration 49,398 59 (1,704) 47,753 258,116 641 (14,313) 244,444 Held-to-maturity debt securities: State and political subdivisions 5,780 227 - 6,007 5,780 227 - 6,007 Other: Federal Home Loan Bank stock 1,002 - - 1,002 Federal Reserve Bank stock 730 - - 730 1,732 - - 1,732 $ 265,628 $ 868 $ (14,313) $ 252,183

 

9 2. INVESTMENT SECURITIES (CONTINUED) Gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows at March 31, 2026 and December 31, 2025: March 31, 2026 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In Thousands) Available-for-sale debt securities: U.S. Government sponsored enterprise $ 39,912 $ 31 $ 46,986 $ 2,851 $ 86,898 $ 2,882 State and political subdivision 2,858 23 6,832 244 9,690 267 Residential mortgage-backed: U.S. Government sponsored enterprise 15,533 227 89,353 10,560 104,886 10,787 Asset -backed U.S Small Business Administration 7,726 28 32,480 1,708 40,206 1,736 $ 66,029 $ 309 $ 175,651 $ 15,363 $ 241,680 $ 15,672 December 31, 2025 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In Thousands) Available-for-sale debt securities: U.S. Government sponsored enterprise $ - $ - $ 47,173 $ 2,660 $ 47,173 $ 2,660 State and political subdivision 2,133 7 8,059 243 10,192 250 Residential mortgage-backed: U.S. Government sponsored enterprise 13,258 117 89,646 9,582 102,904 9,699 Asset -backed U.S Small Business Administration 6,200 12 35,051 1,692 41,251 1,704 $ 21,591 $ 136 $ 179,929 $ 14,177 $ 201,520 $ 14,313

 

10 2. INVESTMENT SECURITIES (CONTINUED) At March 31, 2026, there were 52 securities in a continuous loss position for less than 12 months and 412 securities in a continuous loss position for 12 months or more due to higher long-term interest rates resulting in lower market values for investments. At December 31, 2025, there were 37 securities in a continuous loss position for less than 12 months and 415 securities in a continuous loss position for 12 months or more due to higher long-term interest rates resulting in lower market values for investments. Unrealized losses on these securities have not been recognized in income because the securities are generally of high credit quality, management does not intend to sell the securities nor is it more likely than not that management will have to sell the securities in the foreseeable future and the decline in fair value is largely due to the effects of changes in market interest rates. The fair values are expected to recover as the securities approach their maturity or repricing date and/or market interest rates change. The amortized cost and fair values of debt securities at March 31, 2026, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Available-for-sale Held-To-Maturity Amortized Fair Amortized Fair Cost Value Cost Value (In Thousands) Due in one year or less $ 62,118 $ 62,013 $ 4,303 $ 4,334 Due after one year through five years 55,829 53,010 1,799 1,918 Due after five years through ten years 2,994 2,796 573 620 Securities not due at a Single maturity date 183,786 171,491 - - $ 304,727 $ 289,310 $ 6,675 $ 6,872 For the three months ended March 31, 2026 and 2025, respectively, the Bank did not sell any securities available-for-sale. At March 31, 2026 and December 31, 2025, investment securities with a carrying amount of $267,340,000 and $222,265,000, respectively, were pledged to secure certain deposits.

 

11 3. LOANS RECEIVABLE Major classifications of loans at March 31, 2026 and December 31, 2025 were as follows: March 31, 2026 December 31, 2025 (In Thousands) Residential mortgage loans: 1 – 4 family first-lien residential mortgages $ 191,384 $ 194,863 Commercial loans: Real estate 235,046 232,348 Commercial and industrial 85,064 94,961 320,110 327,309 Consumer loans: Home equity and junior liens 92,221 94,090 Other consumer 7,209 7,726 99,430 101,816 Total loans 610,924 623,988 Less allowance for credit losses (4,702) (4,709) Loans receivable, net $ 606,222 $ 619,279 At March 31, 2026 and December 31, 2025, net deferred loan costs totaled $659,000 and $707,000, respectively.

 

12 3. LOANS RECEIVABLE (Continued) The following tables present the classes of the loan portfolio summarized by the pass rating and the classified ratings of special mention, substandard and doubtful within the Bank’s internal risk rating system as of March 31, 2026 and December 31, 2025: March 31, 2026 Pass Special Mention Substandard Doubtful Total (In Thousands) Residential mortgage loans: 1 – 4 family first-lien residential mortgages $ 189,468 $ 344 $ 1,572 $ - $ 191,384 Commercial loans: Real estate 225,129 2,678 7,239 - 235,046 Commercial and industrial 82,173 - 2,891 - 85,064 307,302 2,678 10,130 - 320,110 Consumer loans: Home equity and junior liens 91,686 308 227 - 92,221 Other consumer 7,168 41 - - 7,209 98,854 349 227 - 99,430 Total loans $ 595,624 $ 3,371 $ 11,929 $ - $ 610,924 December 31, 2025 Pass Special Mention Substandard Doubtful Total (In Thousands) Residential mortgage loans: 1 – 4 family first-lien residential mortgages $ 192,282 $ 1,189 $ 1,392 $ - $ 194,863 Commercial loans: Real estate 221,696 2,909 7,743 - 232,348 Commercial and industrial 85,763 3,562 5,636 - 94,961 307,459 6,471 13,379 - 327,309 Consumer loans: Home equity and junior liens 93,604 259 227 - 94,090 Other consumer 7,695 31 - - 7,726 101,299 290 227 - 101,816 Total loans $ 601,040 $ 7,950 $ 14,998 $ - $ 623,988

 

13 3. LOANS RECEIVABLE (Continued) A loan is considered collateral-dependent when the borrower is experiencing financial difficulties and repayment of the loan is expected to be provided substantially through the operation or sale of the collateral. Loans considered collateral-dependent were as follows at March 31, 2026 and December 31, 2025 March 31, 2026 Amortized Cost Collateral Type (In thousands) Real estate: Residential real estate mortgage $ 1,164 Residential real estate Commercial real estate 6,339 Commercial real estate Total real estate $ 7,503 December 31, 2025 Amortized Cost Collateral Type (In thousands) Real estate: Residential real estate mortgage $ 1,164 Residential real estate Commercial real estate 7,014 Commercial real estate Total real estate $ 8,178 As of March 31, 2026 and December 31, 2025 there were no significant modifications made to borrowers experiencing financial difficulty.

 

14 3. LOANS RECEIVABLE (CONTINUED) Changes in the allowance for credit losses three months ended March 31, 2026 and 2025 are summarized as follows (in thousands): For the three months ended March 31, 2026 1-4 family first- lien residential mortgage Commercial real estate Commercial and industrial Home equity and junior liens Other consumer Total Allowance for credit losses: Beginning balance $ 1,438 $ 1,827 $ 1,122 $ 222 $ 100 $ 4,709 Charge-offs - - (4) - (32) (36) Recoveries - - 26 - 3 29 Provision for credit losses - - - - - - Ending balance $ 1,438 $ 1,827 $ 1,144 $ 222 $ 71 $ 4,702 For the three months ended March 31, 2025 1-4 family first- lien residential mortgage Commercial real estate Commercial and industrial Home equity and junior liens Other consumer Total Allowance for credit losses: Beginning balance $ 1,338 $ 1,668 $ 1,146 $ 217 $ 119 $ 4,488 Charge-offs - - - - (29) (29) Recoveries 7 - 12 - 27 46 Provision for credit losses (75) 193 94 - (2) 210 Ending balance $ 1,270 $ 1,861 $ 1,252 $ 217 $ 115 $ 4,715

 

15 3. LOANS RECEIVABLE (CONTINUED) The following table presents the classes of loan portfolio summarized by the aggregate pass rating and classified ratings of non-performing, watch, special mention, substandard and doubtful within the Company’s internal risk rating system as of March 31, 2026 and December 31, 2025 based on calendar year of origination: March 31, 2026 Revolving Loans Revolving Converted to 2026 2025 2024 2023 2022 Prior Loans Term Loans Total (Dollars in thousands) 1-4 family first lien residential mortgages Performing $ 984 $ 19,595 $ 26,250 $ 25,577 $ 30,085 $ 86,977 $ - $ - $ 189,468 Non-performing - - - - - 1,916 - - 1,916 Total 1-4 family first lien residential mortgages $ 984 $ 19,595 $ 26,250 $ 25,577 $ 30,085 $ 88,893 $ - $ - $ 191,384 Commercial real estate Pass $ 496 $ 1,068 $ 2,272 $ 6,880 $ 5,446 $ 29,717 $ - $ - $ 45,879 Watch 4,218 17,612 11,019 18,557 49,639 78,205 - - 179,250 Special Mention - - - 211 890 1,577 - - 2,678 Substandard - - - - - 6,209 - - 6,209 Nonaccrual - - - - - 1,030 - - 1,030 Total commercial real estate $ 4,714 $ 18,680 $ 13,291 $ 25,648 $ 55,975 $ 116,738 $ - $ - $ 235,046 Commercial and industrial Pass $ 944 $ 7,160 $ 10,073 $ 5,674 $ 4,016 $ 8,420 $ 4,673 $ - $ 40,960 Watch 3,564 10,834 4,327 8,102 4,382 4,397 5,607 - 41,213 Special Mention - - - - - - - - - Substandard 2,150 - 10 6 99 284 45 - 2,594 Nonaccrual - - - - - 278 19 - 297 Total commercial and industrial $ 6,658 $ 17,994 $ 14,410 $ 13,782 $ 8,497 $ 13,379 $ 10,344 $ - $ 85,064 Consumer: Home equity & junior liens Performing $ 814 $ 5,377 $ 4,534 $ 11,413 $ 17,083 $ 20,497 $ 32,017 $ - $ 91,735 Non-performing - - - - 40 297 149 - 486 Total Consumer: Home equity & junior liens $ 814 $ 5,377 $ 4,534 $ 11,413 $ 17,123 $ 20,794 $ 32,166 $ - $ 92,221 Consumer: other Performing $ 297 $ 1,684 $ 1,192 $ 1,285 $ 472 $ 1,425 $ 807 $ - $ 7,162 Non-performing - 4 18 16 2 - 7 - 47 Total consumer: other $ 297 $ 1,688 $ 1,210 $ 1,302 $ 473 $ 1,425 $ 814 $ - $ 7,209 Total loans $ 13,467 $ 63,334 $ 59,695 $ 77,722 $ 112,153 $ 241,229 $ 43,324 $ - $ 610,924

 

16 3. LOANS RECEIVABLE (CONTINUED) December 31, 2025 Revolving Loans Revolving Converted to 2025 2024 2023 2022 2021 Prior Loans Term Loans Total (Dollars in thousands) 1-4 family first lien residential mortgages Performing $ 19,689 $ 27,451 $ 26,057 $ 30,516 $ 21,904 $ 66,665 $ - $ - $ 192,282 Non-performing - - - - - 2,581 - - 2,581 Total 1-4 family first lien residential mortgages $ 19,689 $ 27,451 $ 26,057 $ 30,516 $ 21,904 $ 69,246 $ - $ - $ 194,863 Commercial real estate Pass $ 5,000 $ 7,170 $ 3,760 $ 5,518 $ 12,215 $ 14,908 $ - $ - $ 48,571 Watch 13,656 11,401 21,228 51,796 16,500 58,544 - - 173,125 Special Mention - - 213 1,011 - 1,789 - - 3,013 Substandard - - - - 5,093 1,123 - - 6,216 Nonaccrual - - - - - 1,423 - - 1,423 Total commercial real estate $ 18,656 $ 18,571 $ 25,201 $ 58,325 $ 33,808 $ 77,787 $ - $ - $ 232,348 Commercial and industrial Pass $ 7,508 $ 5,631 $ 4,636 $ 3,549 $ 8,727 $ 9,293 $ 4,503 $ - $ 43,847 Watch 10,253 4,505 9,612 3,047 2,955 3,773 7,771 - 41,916 Special Mention - - 1,087 1,086 1,286 104 - - 3,563 Substandard - 12 11 - - 373 4,954 - 5,350 Nonaccrual - - - - - 285 - - 285 Total commercial and industrial $ 17,761 $ 10,148 $ 15,346 $ 7,682 $ 12,968 $ 13,828 $ 17,228 $ - $ 94,961 Consumer: Home equity & junior liens Performing $ 5,443 $ 5,124 $ 11,921 $ 17,623 $ 5,561 $ 15,903 $ 32,029 $ - $ 93,604 Non-performing - - - - 129 208 149 - 486 Total Consumer: Home equity & junior liens $ 5,443 $ 5,124 $ 11,921 $ 17,623 $ 5,690 $ 16,111 $ 32,178 $ - $ 94,090 Consumer: other Performing $ 1,898 $ 1,295 $ 1,532 $ 600 $ 572 $ 967 $ 818 $ 13 $ 7,695 Non-performing - - - 2 - 29 - - 31 Total consumer: other $ 1,898 $ 1,295 $ 1,532 $ 602 $ 572 $ 996 $ 818 $ 13 $ 7,726 Total loans $ 63,447 $ 62,589 $ 80,057 $ 114,748 $ 74,942 $ 177,968 $ 50,224 $ 13 $ 623,988

 

17 3. LOANS RECEIVABLE (CONTINUED) Loans are considered past due if the required principal and interest payments have not been received within thirty days of the payment due date. An age analysis of past due loans, segregated by class of loans, as of March 31, 2026 and December 31, 2025 was as follows: March 31, 2026 30-59 Days Past Due 60-89 Days Past Due Over 90 Days Past Due Total Past Due Current Total Loans Receivable Loans Receivable >90 Days and Still Accruing (In Thousands) Residential mortgage loans: 1 – 4 family first- lien residential mortgages $ 2,012 $ - $ 1,882 $ 3,894 $ 187,490 $ 191,384 $ - Commercial loans: Real estate 156 - 843 999 234,047 235,046 - Commercial and industrial 274 45 23 342 84,722 85,064 - 430 45 866 1,341 318,769 320,110 - Consumer loans: Home equity and junior liens 877 149 370 1,396 90,825 92,221 - Other consumer 60 11 30 101 7,108 7,209 - 937 160 400 1,497 97,933 99,430 - Total loans $ 3,379 $ 205 $ 3,148 $ 6,732 $ 604,192 $ 610,924 $ -

 

18 3. LOANS RECEIVABLE (CONTINUED) December 31, 2025 30-59 Days Past Due 60-89 Days Past Due Over 90 Days Past Due Total Past Due Current Total Loans Receivable Loans Receivable >90 Days and Still Accruing (In Thousands) Residential mortgage loans: 1 – 4 family first- lien residential mortgages $ 1,650 $ 876 $ 1,675 $ 4,201 $ 190,662 $ 194,863 $ - Commercial loans: Real estate - 137 1,152 1,289 231,059 232,348 - Commercial and industrial 23 - 4 27 94,934 94,961 - 23 137 1,156 1,316 325,993 327,309 - Consumer loans: Home equity and junior liens 532 171 299 1,002 93,088 94,090 - Other consumer 71 50 - 121 7,605 7,726 - 603 221 299 1,123 100,693 101,816 - Total loans $ 2,276 $ 1,234 $ 3,130 $ 6,640 $ 617,348 $ 623,988 $ - Nonaccrual loans, segregated by class of loan at March 31, 2026 and December 31, 2025, were as follows (in thousands) Nonaccrual Loans Without Related Allowance for Credit Losses Recognized Interest Income Nonaccrual Loans March 31, 2026 1-4 family first lien residential mortgages $ 2,410 $ - $ - Commercial real estate 1,030 559 - Other commercial and industrial 297 297 - Home equity and junior liens 391 - - Other consumer 47 - - Total $ 4,175 $ 856 $ - December 31, 2025 1-4 family first lien residential mortgages $ 2,362 $ - $ - Commercial real estate 1,423 696 - Other commercial and industrial 285 - - Home equity and junior liens 354 - - Other consumer - - - Total $ 4,424 $ 696 $ -

 

19 4. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The balances and changes in the components of accumulated other comprehensive income (loss), net of tax, are as follows (in thousands): Unrealized Losses on Available- For-Sale securities Accumulated other comprehensive loss as of January 1, 2025 $ (18,741) Other comprehensive income 3,554 Accumulated other comprehensive loss as of March 31, 2025 $ (15,187) Accumulated other comprehensive loss as of January 1, 2026 $ (10,801) Other comprehensive loss (1,379) Accumulated other comprehensive loss as of March 31, 2026 $ (12,180) The amounts of income tax expense allocated to each component of other comprehensive (income) loss are as follows for the three months ended March 31, 2026 and March 31, 2025: March 31, 2026 March 31, 2025 (In Thousands) Unrealized (loss) gain arising during the period $ 366 $ (945) Income tax benefit (expense) $ 366 $ (945) 5. STOCKHOLDERS’ EQUITY Preferred Stock The Company is authorized to issue 1,600 shares of Series A preferred stock, $5,000 par value per share. There were no shares issued or outstanding at March 31, 2026 and December 31, 2025. Series A preferred stockholders have no voting rights. Dividends on the Series A preferred stock are non-cumulative and payable quarterly from the date of issue, when declared by the Board of Directors. The Series A preferred stock is perpetual, non-cumulative and redeemable at the option of the Company, in whole or in part, at $5,000 per share. The dividend, when declared, is equal to the Wall Street Journal Prime Rate in effect at the beginning of the quarter preceding the dividend payment date, plus 0.50% with a maximum rate of 11%. Effective August 20, 2018, the Company redeemed all outstanding shares of Series A preferred stock.

 

20 5. STOCKHOLDERS’ EQUITY (Continued) Common Stock The Company is authorized to issue 2,000,000 shares of common stock, $5 par value per share. There were 1,164,163 shares issued and 1,076,246 shares outstanding, with 87,917 shares held in treasury at March 31, 2026. There were 1,164,163 shares issued and 1,076,246 shares outstanding, with 87,917 shares held in treasury at December 31, 2025. The Company did not repurchase any shares of common stock during the three months ended March 31, 2026 and 2025, respectively. There were no special dividends paid for the three months ended March 31, 2026 and 2025, respectively. Stock -based Compensation The 2022 Restricted Stock Plan (“2022 Plan”) was approved by the Human Resources Committee of the Board of Directors of the Company authorizing the issuance of 15,714 common shares of stock on December 19, 2022. The purpose of the 2022 Plan is to promote the growth and profitability of the Company and its affiliated companies; to attract and retain key officers and employees of outstanding competence; to provide certain key officers and employees of the Company and its affiliated companies with an incentive to achieve corporate objectives; and to provide such officers and employees with an equity interest in the Company. Awards granted under this plan generally vest ratably over a five-year period. Restricted stock awards are recorded as deferred compensation, a component of shareholders’ equity, at fair value at the date of the grant and amortized to compensation expense over the specified vesting periods.

 

21 5. STOCKHOLDERS’ EQUITY (CONTINUED) Compensation expense associated with the amortization of restricted stock was $66,000 and $45,000 for the three months ended March 31, 2026 and 2025, respectively. The following is a summary of the Company’s restricted stock activity for the three months ended March 31, 2026 and 2025: Non-Vested Weighted Average Grant Shares Date Fair Value Balance – January 1, 2025 7,526 $ 44.30 Granted - - Forfeited - - Vested - - Balance – March 31, 2025 7,526 $ 44.30 Balance – January 1, 2026 Granted 18,432 $ 58.70 Forfeited - - Vested - - Balance – March 31, 2026 18,432 $ 58.70 As of March 31, 2026, there was approximately $985,000 of total unrecognized compensation cost related to nonvested restricted stock shares granted under the Plans. The cost is expected to be recognized over a weighted-average period of 4 years. Earnings Per Share Basic earnings per share is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Net income available to common stockholders is net income to the Company. Unallocated common shares of unvested restricted stock are not included in the weighted- average number of common shares outstanding for purposes of calculating earnings per common share until they are committed to be released. The Company had no potentially dilutive common stock equivalents at March 31, 2026 and 2025. The following table sets forth the calculation of basic and diluted earnings per share for the three months ended March 31: 2026 2025 (Dollars in Thousands) Net income available to common stockholders $ 252 $ 473 Weighted average common shares outstanding basic and diluted 1,076,246 1,062,788 Earnings per share, basic and diluted $ 0.23 $ 0.44

 

22 6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated statements of financial condition. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments summarized as follows at March 31, 2026 and December 31, 2025: 2026 2025 (In Thousands) Commitments to extend credit: Residential real estate mortgage loans $ 2,634 $ 2,255 Commercial loans 67,733 69,258 Consumer loans 32,640 33,286 Standby letters of credit 6,864 6,514 $ 109,871 $ 111,313 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount and type of collateral obtained, if deemed necessary by the Bank upon extension of credit, varies and is based on management’s credit evaluation of the counterparty. Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third-party. Standby letters of credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank’s policy for obtaining collateral, and the nature of such collateral, is essentially the same as that involved in making commitments to extend credit. The Bank utilized a correspondent bank to assist in the confirmation of three unsecured standby letters for credit for three commercial customers. The letters of credit totaled $182,000 at March 31, 2026 and $273,000 at December 31, 2025 and in the event of default the Bank would be obligated to secure the letters of credit with cash equal to 100% of the outstanding letter of credit or investment grade securities equal in value to 125% of the outstanding amount, however, the commercial customers have established lines of credit with the Bank which would be drawn upon in the event of default to secure the letter of credit.

 

23 7. CONCENTRATIONS OF CREDIT Most of the Bank’s business activity is with customers in the Bank’s market area. Investments in state and political subdivisions also involve governmental entities within the Bank’s market area. The concentrations of credit by type of loan are set forth in Note 3. The distribution of commitments to extend credit is set forth in Note 6. The Bank, as a matter of policy, does not extend credit to any single borrower, or group of related borrowers in excess of its regulatory lending limit. The Bank has concentrations of credit with respect to certain groups of loans receivable. At March 31, 2026, and December 31, 2025, management has identified loan concentrations as follows: 2026 2025 (In Thousands) Secured by: Restaurants/bars $ 700 $ 707 Non-owner occupied rental properties 147,458 173,067 Hotels/motels 16,423 16,906 Unsecured 28,893 28,781 Not-for-profit 7,902 8,307 $ 201,376 $ 227,768 8. CAPITAL REQUIREMENTS The Bank is subject to various regulatory capital requirements administered by their regulators. The final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (Basel III rules) became effective on January 1, 2015 with full compliance with all requirements being phased in over a multi-year schedule and were phased in on January 1, 2019. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines, the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of common equity Tier 1, total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to average assets (as defined). Management believes that the Bank met all capital adequacy requirements to which they are subject as of March 31, 2026 and December 31, 2025. As of March 31, 2026, the most recent notification from the Bank’s regulators categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum common equity Tier 1, total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank’s category.

 

24 8. CAPITAL REQUIREMENTS (CONTINUED) The Bank’s actual capital amounts and ratios are summarized in the tables below at March 31, 2026 and December 31, 2025: March 31, 2026 (In Thousands) Actual Bank Minimum for Capital Adequacy Purposes Bank Minimum to be Well Capitalized Under Prompt Corrective Action Provisions Bank Well Capitalized With Buffer Amount Ratio Amount Ratio Amount Ratio Amount Ratio Tier I Common Equity (to Risk-Weighted Assets) $ 83,621 17.17 % $ 21,917 4.50 % $ 31,658 6.50 % $ 34,093 7.00 % Total Risk-Based Capital (to Risk-Weighted Assets) $ 88,421 18.15 % $ 38,964 8.00 % $ 48,705 10.00 % $ 51,140 10.50 % Tier I Capital (to Risk-Weighted Assets) $ 83,621 17.17 % $ 29,223 6.00 % $ 38,964 8.00 % $ 41,399 8.50 % Tier I Capital (to Average Assets) $ 83,621 8.52 % $ 39,262 4.00 % $ 49,078 5.00 % $ 49,078 5.00 %

 

25 8. CAPITAL REQUIREMENTS (CONTINUED) December 31, 2025 (In Thousands) Actual Bank Minimum for Capital Adequacy Purposes Bank Minimum to be Well Capitalized Under Prompt Corrective Action Provisions Bank Well Capitalized With Buffer Amount Ratio Amount Ratio Amount Ratio Amount Ratio Tier I Common Equity (to Risk-Weighted Assets) $ 83,303 16.96 % $ 22,107 4.50 % $ 31,932 6.50 % $ 34,389 7.00 % Total Risk-Based Capital (to Risk-Weighted Assets) $ 88,110 17.94 % $ 39,301 8.00 % $ 49,127 10.00 % $ 51,583 10.50 % Tier I Capital (to Risk-Weighted Assets) $ 83,303 16.96 % $ 29,476 6.00 % $ 39,301 8.00 % $ 41,758 8.50 % Tier I Capital (to Average Assets) $ 83,303 8.54 % $ 39,301 4.00 % $ 48,766 5.00 % $ 48,766 5.00 %

 

26 9. FAIR VALUE OF ASSETS AND LIABILITIES Management uses its best judgment in estimating the fair values of the Company’s assets and liabilities; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all assets and liabilities, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction on the dates indicated. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The estimated fair value amounts have been measured as of their respective year-ends and have not been re-evaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these assets and liabilities subsequent to the respective reporting dates may be different than the amounts reported at each year-end. A fair value hierarchy that prioritizes the inputs to valuation methods is used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 - Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability. Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity). An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

 

27 9. FAIR VALUE OF ASSETS AND LIABILITIES For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at March 31, 2026 and December 31, 2025 are as follows: March 31, 2026 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In Thousands) Available -for-sale debt securities: U.S. Government agency and sponsored enterprise $ 104,558 $ - $ 104,558 $ - State and political subdivisions 13,262 - 13,262 - Residential mortgage- backed: U.S. Government sponsored enterprise 127,040 - 127,040 - Asset-backed U.S. Small Business Administration 44,450 - 44,450 - $ 289,310 $ - $ 289,310 $ -

 

28 9. FAIR VALUE OF ASSETS AND LIABILITIES (CONTINUED) December 31, 2025 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In Thousands) Available -for-sale debt securities: U.S. Government agency and sponsored enterprise $ 49,851 $ - $ 49,851 $ - State and political subdivisions 13,683 - 13,683 - Residential mortgage- backed: U.S. Government sponsored enterprise 133,157 - 133,157 - Asset-backed U.S. Small Business Administration 47,753 - 47,753 - $ 244,444 $ - $ 244,444 $ - The Bank had the following assets measured at fair value on a nonrecurring basis as of March 31, 2026 and December 31, 2025: March 31, 2026 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) (In Thousands) Collateral dependent loans $ 873 $ $ $ 873

 

29 9. FAIR VALUE OF ASSETS AND LIABILITIES (CONTINUED) December 31, 2025 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) (In Thousands) Collateral dependent loans $ 871 $ $ $ 871 The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Level 3 inputs were utilized to determine fair value at March 31, 2026 and December 31, 2025: (1) Appraisals are adjusted downwards by management for qualitative factors such as the estimated costs to liquidate the collateral Foreclosed real estate measured at fair value as of March 31, 2026 and December 31, 2025 was not significant. The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful. The following methods and assumptions were used to estimate the fair values of certain of the Company’s assets and liabilities at March 31, 2026 and December 31, 2025: Cash and Cash Equivalents The carrying amounts of cash, due from banks and federal funds sold approximate fair values. Fair Value Valuation Technique Unobservable Input Range Weighted Average (In Thousands) 2026: Collateral Dependent loans $ 873 Appraisal of collateral Liquidation expenses (1) 10.0% - 10.0% 10.0% 2025: Collateral Dependent loans $ 871 Appraisal of collateral Liquidation expenses (1) 10.0% - 10.0% 10.0%

 

30 9. FAIR VALUE OF ASSETS AND LIABILITIES (CONTINUED) Investment Securities The fair values of securities available-for-sale and held-to-maturity are determined primarily by matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. For certain securities which are not traded in active markets or are subject to transfer restrictions, valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments are generally based on available market evidence (Level 3). In the absence of such evidence, management’s best estimate is used. Management’s best estimate consists of both internal and external support on certain Level 3 investments. Internal cash flow models using a present value formula that includes assumptions market participants would use along with indicative exit pricing obtained from broker/dealers (where available) are used to support fair values of certain Level 3 investments. The carrying value of Federal Home Loan Bank and Federal Reserve Bank stock approximates fair value and considers the limited marketability of such securities. Loans Held for Sale Mortgage loans held for sale are carried at the aggregate lower of cost or fair value and are measured on a nonrecurring basis. Fair value is based on independent quoted market prices, where applicable, or the prices for other whole mortgage loans with similar characteristics. Loans Receivable The fair values of loans receivable, excluding collateral dependent loans, are estimated using discounted cash flow analyses, using market rates at the consolidated statements of financial condition date that reflect the credit and interest rate-risk inherent in the loans. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal. Generally, for variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. Collateral dependent loans are those for which the Company has calculated the allowance for credit losses, individually, generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. Mortgage Servicing Rights The carrying value of mortgage servicing rights approximates fair value. Deposits The fair values for demand, savings and NOW deposits are equal to their carrying amounts. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities. Federal Home Loan Bank Advances The carrying amounts of short-term FHLB advances approximate their fair values. Fair values of long-term FHLB advances are estimated using discounted cash flow analysis, based on quoted prices for new FHLB advances with similar credit risk characteristics, terms and remaining maturities. These prices obtained from this active market represent a market value that is deemed to represent the transfer price if the liability were assumed by a third-party.

 

31 9. FAIR VALUE OF ASSETS AND LIABILITIES (CONTINUED) Subordinated Debentures Fair values of subordinated debentures are estimated using discounted cash flow analysis, based on a risk adjusted discount rate reflecting management’s estimate of the assumptions that market participants would use to estimate the fair value of such debt with similar credit risk characteristics, terms and remaining maturities. Accrued Interest The carrying amounts of accrued interest receivable and payable approximate fair value. The estimated fair values and related carrying amounts of the Company’s financial instruments are as follows at March 31, 2026 and December 31, 2025: March 31, 2026 December 31, 2025 Carrying Amount Fair Value Carrying Amount Fair Value (In Thousands) Financial assets: Cash and cash equivalents $ 54,880 $ 54,880 $ 17,838 $ 17,838 Investment securities 297,423 297,620 251,956 252,183 Loans receivable, net 606,222 602,860 619,279 615,188 Accrued interest receivable 3,122 3,122 3,137 3,137 Mortgage servicing rights 288 288 291 291 Financial liabilities: Deposits 922,716 934,171 847,977 871,418 Federal Home Loan Bank advances - - 6,521 6,521 Subordinated debentures 8,248 8,198 8,248 8,198 Accrued interest payable 893 893 758 758

 

32 10. OPERATING LEASES The Company Leases certain branch properties and autos under long-term, operating lease agreements. Th Company’s lease agreements do not contain any residual value guarantees. The following includes quantitative data to the Company’s operating leases as of March 31, 2026 and December 31, 2025: March 31, 2026 December 31, 2025 Operating Lease amounts: Right-of-use assets $ 8,268 $ 8,462 Lease liabilities $ 8,473 $ 8,658 The following includes quantitative data to the Company’s operating leases for the three months ended March 31: Operative lease amounts: 2026 2025 Operating outgoing cash flows from operating leases $ 227 $ 227 Lease costs: Operating lease cost $ 237 $ 237 Variable lease cost $ 4 $ 4 Weighted-average remaining lease term (years) 18.8 18.9 Weighted-average discount rate 2.24% 2.21% The following is a schedule by year of the undiscounted cash flows of the operating lease liabilities, excluding common area maintenance charges and real estate taxes, as of March 31, 2026 April 1, 2026 – March 31, 2027 $ 904 April 1, 2027 – March 31, 2028 818 April 1, 2028 – March 31, 2029 774 April 1, 2029 – March 31, 2030 781 April 1, 2030 – March 31, 2031 788 Thereafter 6,465 Total undiscounted cash flow 10,530 Less net present value adjustment (2,057) Lease liability $ 8.473

 

33 11. REVENUE FROM CONTRACTS WITH CUSTOMERS All of the Company’s revenue from contracts with customers is recognized within non-interest income as the Company satisfies its obligation to the customer. The following table presents these revenues for the three months ended March 31, 2026 and 2025: 2026 2025 (In Thousands) Service charges and fees: Deposit related fees $ 60 $ 61 Loan related fees 71 62 Overdraft and chargeback fees 314 290 ATM/Point of sale fees 25 33 Wire transfer fees 21 16 Total service charges 491 462 Bank card income: Debit card interchange fees $ 435 $ 443 Credit card commission 3 2 Total bank card income 438 445 Insurance agency income: Insurance agency services $ 164 $ 221 Total insurance agency income 164 221 Sales of assets income: Net gain on sale of foreclosed real estate $ - $ - Total gain on sale of foreclosed real estate - - Service Charges and fees: The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, wire transfer and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Bank fulfills the customer’s request. Accounting maintenance fees, which relate primarily to monthly maintenance, are recognized at the time maintenance occurs. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer’s account balance. The Bank also earns fees from the servicing of retain and commercial loans Bank Card Income: The Company earns interchange fees from debit cardholder transactions conducted through the Fiserv EFT payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to cardholder. The Company also earns fees for merchant transaction processing services provided to its business customers by a third party service provider. The fees represent a percentage of the monthly transaction activity net of related costs and are received from the service provider on a monthly basis.

 

34 11. REVENUE FROM CONTRACTS WITH CUSTOMERS (Continued) Insurance Agency Income The Company earns fees from insurance services provided to its customers by third-party service providers. The Company received commissions from the third-party service providers monthly, based upon customer activity for the month. The Company (i) acts as an agent in arranging the relationship between the customer and the third-party service provider and (ii) does not control the services rendered to the customers. Net Gains/Losses on Sales of Foreclosed Real Estate The Company records a gain or loss from the sale of foreclosed real estate when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of foreclosed real estate to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the foreclosed real estate asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. Revenue included in non-interest income on the consolidated statements of income that was not related to contracts with customers was $336,000 and $274,000 for the three-months ended March 31, 2026 and 2025, respectively. 12. SUBSEQUENT EVENTS Subsequent events have been evaluated through September 14, 2026, which is the date the financial statements were available to be issued. Arrow Financial Corporation (“Arrow”) and the Company entered into an Agreement and Plan of Merger dated February 25, 2026, and announced the transaction on February 26, 2026. The transaction closed on July 1, 2026. Under the terms of the merger agreement, Arrow acquired 100% of the outstanding voting equity interests of the Company. At the effective time of the merger, each share of the Company’s common stock outstanding was converted into the right to receive 1.8610 shares of Arrow common stock and $18.72 in cash.

 


EXHIBIT 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial information is based on the historical financial statements of Arrow and Adirondack, and has been prepared to illustrate the financial effect of the Merger. The following unaudited pro forma condensed combined financial information combines the historical consolidated financial position and results of operations of Arrow and its subsidiaries and of Adirondack and its subsidiaries, as an acquisition by Arrow of Adirondack using the acquisition method of accounting (Accounting Standards Codification (ASC) 805 “Business Combinations”) and giving effect to the related pro forma adjustments described in the accompanying notes. Under the acquisition method of accounting, the assets and liabilities of Adirondack will be recorded by Arrow at their respective fair values as of the date the Merger was completed. The pro forma financial information should be read in conjunction with Arrow’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2026 and Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which are incorporated by reference herein, and Adirondack’s quarterly results for the fiscal quarter ended March 31, 2026 and annual results for the fiscal year ended December 31, 2025, which are included herein.

The unaudited pro forma condensed combined financial information set forth below assumes that the Merger was consummated on January 1, 2025 for purposes of the unaudited pro forma condensed combined statements of income and March 31, 2026 for purposes of the unaudited pro forma condensed combined balance sheet and gives effect to the Merger, for purposes of the unaudited pro forma condensed combined statements of income, as if it had been effective during the entire period presented.

These unaudited pro forma condensed combined financial statements reflect the Merger based upon estimated preliminary acquisition accounting adjustments. Actual adjustments will be made as of the effective date of the Merger and, therefore, may differ from those reflected in the unaudited pro forma condensed combined financial information.

The unaudited pro forma condensed combined financial statements included herein are presented for informational purposes only and do not necessarily reflect the financial results of the combined company had the companies actually been combined at the beginning of each period presented. The adjustments included in these unaudited pro forma condensed financial statements are preliminary and may be revised. This information also does not reflect the benefits of the expected cost savings, expense efficiencies or any potential balance sheet restructuring, opportunities to earn additional revenue, potential impacts of current market conditions on revenues, or asset dispositions, among other factors, and includes various preliminary estimates and may not necessarily be indicative of the financial position or results of operations that would have occurred if the Merger had been consummated on the date or at the beginning of the period indicated or which may be attained in the future. The unaudited pro forma condensed combined financial statements and accompanying notes should be read in conjunction with and are qualified in their entirety by reference to the historical consolidated financial statements and related notes thereto of Arrow and its subsidiaries and of Adirondack and its subsidiaries. Such information and notes thereto are incorporated by reference herein.









March 31, 2026
(Dollars In Thousands)
Arrow Financial CorporationAdirondack Bancorp, Inc.Proforma AdjustmentsFoot-notesPro Forma Combined
ASSETS
Cash and Cash Equivalents$285,606 $54,880 $(28,993)1$311,493 
Investments594,566 297,423 — 891,989 
Loans3,438,966 610,924 (21,706)24,028,184 
Allowance for Credit Losses(34,055)(4,702)(976)3(39,733)
Net Loans3,404,911 606,222 (22,682)3,988,451 
Goodwill23,789 2,023 44,585 470,397 
Core Deposit Intangibles677 — 16,387 517,064 
Other Assets212,470 50,048 10,734 6273,252 
Total Assets$4,522,019 1,010,596 20,031 $5,552,646 
LIABILITIES
Noninterest-Bearing Deposits$721,734 336,557 — $1,058,291 
Interest-Bearing Deposits3,292,205 586,159 (396)73,877,968 
Total Deposits4,013,939 922,716 (396)4,936,259 
Borrowings4,265 — — 4,265 
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts20,000 8,248 — 28,248 
Other liabilities43,672 14,189 7,786 865,647 
Total Liabilities4,081,876 945,153 7,390 5,034,419 
STOCKHOLDERS’ EQUITY
Preferred Stock— — — — 
Common Stock and Additional Paid-in Capital436,498 12,920 68,266 9517,684 
Retained Earnings110,804 68,970 (72,072)10107,702 
Treasury Stock(102,395)(4,267)4,267 11(102,395)
Accumulated Other Comprehensive Loss(4,764)(12,180)12,180 11(4,764)
Total Stockholders’ Equity440,143 65,443 12,641 518,227 
Total Liabilities and Stockholders’ Equity$4,522,019 1,010,596 20,031 $5,552,646 


For the Year Ended December 31, 2025
(Dollars In Thousands, Except Per Share Amounts)
Arrow Financial Corporation
Adirondack Bancorp, Inc.
Proforma AdjustmentsFoot-
notes		Pro Forma Combined
Interest income
Interest and fees on loans$184,069 $33,234 $4,770 12$222,073 
Other interest income26,078 9,077 2,198 1337,353 
Total interest income210,147 42,311 6,968 259,426 
Interest expense
Deposits75,948 7,452 (310)1483,090 
Borrowings1,035 700 — 1,735 
Total interest expense76,983 8,152 (310)84,825 
Net interest income133,164 34,159 6,658 173,981 
Provision for credit losses7,274 294 — 7,568 
Net interest income after provision for credit losses
125,890 33,865 6,658 166,413 
Noninterest income32,432 5,829 — 38,261 
Noninterest expense
Salaries and employee benefits56,289 20,141 — 76,430 
Amortization of core deposit intangibles167 — 2,979 153,146 
Other expenses46,478 15,334 3,528 1665,340 
Total noninterest expense
102,934 35,475 6,507 144,916 
Income before income tax expense55,388 4,219 151 59,758 
Income tax expense (benefit)11,435 715 495 1712,645 
Net income$43,953 3,504 (344)$47,113 
Average Shares Outstanding
Basic
16,503 1,063 949 1818,515 
Diluted
16,505 1,063 949 1818,517 
Per Common Share
Basic
$2.65 $3.30 $2.54 
Diluted
$2.65 $3.30 $2.54 



For the Three Months Ended March 31, 2026
(Dollars In Thousands, Except Per Share Amounts)
Arrow Financial Corporation
Adirondack Bancorp, Inc.
Proforma AdjustmentsFoot-
notes		Pro Forma Combined
Interest income
Interest and fees on loans$47,126 $8,134 $1,099 12$56,359 
Other interest income6,668 2,344 549 139,561 
Total interest income53,794 10,478 1,648 65,920 
Interest expense
Deposits17,448 1,620 (11)1419,057 
Borrowings216 179 — 395 
Total interest expense17,664 1,799 (11)19,452 
Net interest income36,130 8,679 1,637 46,446 
Provision for credit losses548 — — 548 
Net interest income after provision for credit losses
35,582 8,679 1,637 45,898 
Noninterest income8,628 1,429 — 10,057 
Noninterest expense
Salaries and employee benefits14,922 5,141 — 20,063 
Amortization of core deposit intangibles39 — 670 15709 
Other expenses11,904 4,677 — 16,581 
Total noninterest expense
26,865 9,818 670 37,353 
Income before income tax expense17,345 290 967 18,602 
Income tax expense3,860 38 242 174,140 
Net income$13,485 252 725 $14,462 
Average Shares Outstanding
Basic
16,382 1,076 949 1818,407 
Diluted
16,403 1,076 949 1818,428 
Per Common Share
Basic
$0.82 $0.23 $0.79 
Diluted
$0.82 $0.23 $0.78 



NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.Represents the cash consideration of the deal, approximately $19.9 million, or $18.72 per share, and one-time merger-related charges to be paid by Adirondack prior to the transaction closing of approximately $9.1 million.

2.To record the $21.0 million fair value adjustment for Adirondack's loans, which is expected to be accreted based on the expected average life of the loan portfolio and eliminate net deferred loan costs of $660 thousand.

3.To record the $976 thousand net increase in the allowance for credit losses, which reflects reversal of the Adirondack allowance for credit losses of $4.7 million partially offset by the $5.7 million day-1 allowance for credit losses. Arrow adopted Accounting Standards Update (“ASU”) 2025-08, Financial Instruments—Credit Losses (Topic 326) in its historical financial statements and therefore, the effects of this standard are reflected in the unaudited pro forma condensed combined financial information.

4.To record estimated goodwill created in the transaction of $46.6 million and eliminate Adirondack goodwill of $2.0 million. The following table sets forth a preliminary allocation of estimated merger considerations to the fair value of the identifiable assets acquired and liabilities assumed of Adirondack’s consolidated statement of financial condition as of March 31, 2026, based on Arrow's common stock price as of July 1, 2026.

Total consideration transferred$101,081 
Assets acquired:
   Cash and cash equivalents45,780 
   Investment Securities297,423 
   Net Loans583,540 
   Core Deposit Intangibles16,387 
   Other assets60,358 
      Total assets$1,003,488 
Liabilities assumed:
   Deposits922,320 
   Junior Subordinated Obligations8,248 
   Other liabilities18,447 
      Total liabilities$949,015 
Fair value of net assets acquired$54,473 
Goodwill recorded in acquisition$46,608 

5.    To record the $16.4 million of core deposit intangibles, which is expected to be amortized over the sum-of-years' digits for 10 years.

6.    Accounting adjustments to other assets consist of $4.7 million to record fair value adjustments for Adirondack's premises and equipment, $0.9 million to record write-down of Adirondack's other assets, $7.0 million to record net deferred tax assets related to the estimated fair value purchase accounting adjustments, tax benefits related to one-time merger charges, and the net tax impact related to the recording of the core deposit intangible.

7.    To record the $396 thousand fair value adjustment of acquired certificates of deposit.

8.    Accounting adjustment to other liabilities consists of the accrual of one-time merger-related charges for Adirondack and Arrow: (a) Adirondack pre-tax charges are estimated at $4.3 million ($3.3 million after-tax) and are included as a pro forma fair value liability accrual, and (b) Arrow pre-tax charges are estimated at $3.5 million ($3.1 million after-tax) and are included as a pro forma liability accrual with the after-tax cost as reduction to retained earnings In addition and not reflected in the unaudited proforma condensed combined financial statements, Arrow expects to incur $12.8 million of estimated costs relating to severance, contract termination fees, system conversion costs, and marketing.



9.    Accounting adjustments to common stock and paid-in capital consist of issuance of $81.2 million of common stock issued by Arrow and elimination of $12.9 million of Adirondack's common stock and additional paid-in capital.

10.    Accounting adjustments to retained earnings consist of elimination of $69.0 million of Adirondack's retained earnings and $3.1 million in after-tax one-time merger-related charges as described in Note 8.

11.    Accounting adjustments to eliminate Adirondack's historical stockholders' equity.

12.    To record loan discount accretion of the non-credit fair value adjustment, based on the expected average life of the portfolio. The adjustment reflects the accretion of the $21.0 million fair value adjustment resulting in an increase in interest income from loans of $4.8 million and $1.1 million for the year ended December 31, 2025 and the quarter ended March 31, 2026, respectively.

13.    To record accretion of the available-for-sale securities fair value adjustment, which will be amortized into income based on the expected life of securities. The adjustment reflects an increase in interest income from investment securities of $2.2 million and $549 thousand for the year ended December 31, 2025 and the quarter ended March 31, 2026, respectively. Securities available-for-sale were recorded at fair value and therefore, no balance sheet adjustment is necessary.

14.    To record certificates of deposit discount accretion of $310 thousand and $11 thousand for the year ended December 31, 2025 and the quarter ended March 31, 2026, respectively.

15.    To record $3.0 million and $0.7 million of amortization of core deposit intangible for the year ended December 31, 2025 and the quarter ended March 31, 2026, respectively. The adjustment reflects the amortization of the $16.4 million core deposit intangible over 10 years using the sum-of-the-years’ digits method.

16.    Reflects estimated one-time merger-related charges of $3.5 million for the year ended December 31, 2025 to be incurred by Arrow.

17. Reflects tax impact associated with the transaction adjustments recorded above at an estimated effective tax rate of 25%, further adjusted by the treatment of merger-related charges based on their estimated deductibility for tax purposes.

18. Reflects the number of basic and diluted common shares to be issued by Arrow in its purchase consideration for Adirondack, which is comprised of Adirondack common stock and the contractual acceleration of unvested restricted stock units being exchanged for Arrow common stock at an exchange ratio of 1.8610, less the elimination of the Adirondack common shares outstanding.





Source: View Original Filing on SEC EDGAR

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