📜 What This Document Is 📢

This document is an S-4 Registration Statement, which acts as a detailed prospectus for shareholders of Adirondack Bancorp, Inc. 📄. Think of it as the ultimate informational guide leading up to a massive corporate merger. The filing was submitted on April 22, 2026.

The main purpose is to inform the shareholders of Adirondack Bancorp, Inc. (Adirondack) about a complex, three-stage merger proposal between Adirondack and Arrow Financial Corporation (Arrow). Shareholders must vote on whether to approve this merger at an upcoming Special Meeting.

👉 Key Takeaway: This is not the deal itself, but the official legal paperwork outlining all the terms, conditions, and risks associated with combining the two companies.

🏦 Who the Companies Are 🏢

To understand the merger, it's essential to know the players. Arrow Financial Corporation is the larger entity and a bank holding company. Adirondack Bancorp, Inc. is the company whose shares are being bought out.

Arrow Financial Corporation (Arrow):

Arrow was incorporated on March 21, 1983.
As of December 31, 2025, Arrow had total consolidated assets of approximately $4.4 billion, total loans of approximately $3.5 billion, and total deposits of approximately $3.9 billion.
Arrow's business is centered on owning, supervising, and controlling Arrow Bank, a national bank.
It offers a broad range of commercial and consumer banking products and focuses on lending to consumers and small-to-mid-sized companies in its regional geographic area.

Adirondack Bancorp, Inc. (Adirondack):

Adirondack Bancorp is the bank whose shareholders are being addressed. The merger fundamentally changes the corporate identity of the parent company.

🤝 The Multi-Stage Merger Plan 🔄

The merger is not a single event; it is a structured, three-step process. Understanding this sequence is critical to knowing what happens to the companies and the shareholders.

The Merger: Arrow Merger Sub, Inc. merges into Adirondack, making Adirondack the surviving entity.
The Holdco Merger: Adirondack merges into Arrow, making Arrow the surviving entity.
The Bank Merger: Adirondack Bank merges into Arrow Bank, making Arrow Bank the surviving bank.

The entire process is subject to regulatory approvals (like from the Federal Reserve Board and the NYDFS) and shareholder votes.

👉 Ownership Shift: After the mergers, former Adirondack shareholders are expected to own approximately 11% of Arrow’s common stock, while existing Arrow shareholders are expected to retain about 89%.

💵 How Shareholders Get Paid 💵

The core financial element is determining what value each share of Adirondack is exchanging for. The merger consideration combines a fixed amount of cash and a proportional number of Arrow’s common stock.

The Formula: Each share of Adirondack common stock will be converted into the right to receive:
- (i) 1.8610 shares of Arrow common stock (the "exchange ratio").
- (ii) $18.72 in cash (the "cash consideration").
Valuation Benchmark: Based on Arrow's common stock closing price of $34.43 on February 25, 2026, the total implied value of the consideration for one share of Adirondack was approximately $82.79.
Cash-in-Lieu: If a shareholder is entitled to a fraction of a share of Arrow common stock, they will receive that value in cash, which is calculated based on the "Arrow closing share value."

🗳️ What Shareholders Must Vote On 📢

The process hinges entirely on the voters. Adirondack shareholders must attend a special meeting and vote on two key proposals:

The Adirondack Merger Proposal: This is the primary proposal to approve the terms of the merger agreement.
The Adirondack Adjournment Proposal: This allows the company to delay the special meeting if not enough votes are cast to approve the merger proposal.

👉 Vote Requirement: The merger cannot proceed unless it receives the affirmative vote of a majority of all votes entitled to be cast by the holders of outstanding Adirondack common stock.

✅ Board Recommendations and Expert Opinions 👨‍🏫

The Board of Directors for both companies has weighed in, providing strong recommendations to shareholders and providing third-party validation.

Adirondack Board Recommendation: The board unanimously determined that the merger agreement is "fair and in the best interests of Adirondack and its shareholders" and strongly recommends that shareholders vote “FOR” the merger proposal.
Financial Advisor Opinion: Adirondack's financial advisor, Keefe, Bruyette & Woods, Inc. (KBW), delivered a written opinion on February 25, 2026. This opinion was directed to the Adirondack Board and confirmed the fairness of the merger consideration (cash and stock combined) to the minority shareholders.

⚖️ Financial and Legal Details 🛡️

Several complex issues related to shareholder rights, tax consequences, and executive compensation were outlined in the filing.

Directors' Interests:

The filing explicitly notes that the directors and officers of Adirondack have personal financial interests in the merger that are different from those of the general shareholders.
These interests include the automatic vesting of restricted stock awards, settlement agreements, and employment agreements for key personnel like Rocco F. Arcuri, Sr., John F. Buffa, and J. Daniel Mohr.
Governance Role: Following the merger, Arrow will appoint Rocco F. Arcuri, Sr., to the Board of Directors of both Arrow and Arrow Bank.

Tax Implications:

The merger and holdco merger are structured to qualify as a reorganization for U.S. federal income tax purposes.
For U.S. Holders: Shareholders will generally recognize gain, but not loss, for U.S. federal income tax purposes. This gain is measured by the lesser of the cash received and the value of the stock received, compared to the shareholder’s adjusted tax basis.
Warning: Shareholders are strongly urged to consult their own tax advisor, as tax consequences are dependent on individual personal tax situations.

🚧 Regulatory and Closing Conditions ⚙️

The merger cannot happen automatically; it is highly conditional. The completion of all three mergers (the merger, the holdco merger, and the bank merger) is subject to multiple closing conditions.

Required Approvals: The companies must obtain formal approvals and consents from major governmental bodies, including the Federal Reserve Board, the Office of the Comptroller of the Currency (OCC), and the New York State Department of Financial Services (NYDFS).
Completion Contingencies: Key conditions include:
- Receiving the requisite affirmative vote from the Adirondack shareholders.
- Obtaining all necessary regulatory approvals (or waivers).
- The absence of legal restraints or court injunctions.
Expected Timing: Neither company can predict the actual completion date; it depends on obtaining approvals and satisfying all other conditions.

⚠️ Critical Risks and Warning Notices 🛑

This section contains crucial warnings about potential risks and the limitations of the information provided.

General Risk: Shareholders must read and consider the detailed "Risk Factors" section. Risks include the potential that anticipated benefits (like expected cost savings) may not be realized.
Economic/Market Risk: Volatility in interest rates could increase "purchase accounting marks" upon closing, potentially diluting the combined company’s capital ratios.
Behavioral Risk (No Shop): The merger agreement includes "no shop" covenants that restrict Adirondack’s ability to pursue other acquisition proposals, and if the merger ends, Adirondack must pay a $3.6 million termination fee to Arrow.
Shareholder Influence Loss: The filing warns that Adirondack shareholders will have reduced ownership and voting influence in the combined company compared to what they held before the merger.
Dissenters' Rights: Adirondack shareholders are protected under the NYBCL and are entitled to exercise dissenters’ rights if they do not approve the merger.

ℹ️ Next Steps and Contacts 📞

If you have questions about the merger or how to submit your proxy vote, you should contact Adirondack Bancorp, Inc. or follow the detailed instructions within the filing regarding the Special Meeting.

Investor Relations Contact (Arrow): 250 Glen Street Glens Falls, New York 12801 | Tel: (518) 745-1000, Ext. 4307.
Adirondack Contact: (Address and specific contact details are provided within the original document).

🧠 The Analogy

Think of this merger like two separate, successful local businesses—Adirondack and Arrow—deciding to build a giant, modern regional bank. 🏦🗺️ They can't just fuse instantly; they have to go through a highly structured corporate pipeline. This pipeline first legally dissolves Adirondack into a temporary holding company, then the holding company merges into Arrow, and finally, the actual bank divisions (Adirondack Bank $\to$ Arrow Bank) merge. The shareholder's role is like being a homeowner who must vote to sell their house to a developer (Arrow) for a specific price, even if that price is determined by the fluctuating real-estate market.

🧩 Final Takeaway

This is a highly complex, three-stage corporate merger designed to combine two banks. While the board strongly recommends the deal, the actual completion depends entirely on the positive vote of Adirondack shareholders, regulatory approvals, and satisfying numerous contractual conditions.

AROW details complex three-stage merger of Adirondack Bancorp to shareholders