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Overview
Arrow Financial Corporation (AROW) is a diversified bank holding company that has established a robust presence in northeastern New York through its comprehensive commercial banking, consumer lending, and financial products offering. The company leverages decades of banking expertise to provide secure and reliable financial services that meet the diverse needs of both individual consumers and businesses. Its integrated approach covers a wide spectrum of financial products, including demand deposits, interest-bearing checking, savings and time deposit accounts, and a range of lending services.
Business Model and Financial Services
At its core, Arrow Financial Corporation operates as a holding company that is strategically positioned to oversee and manage a collection of banking entities and financial service subsidiaries. The company earns its revenue primarily through interest income, fees, commissions, and advisory services, which are generated from its extensive suite of deposit and lending products. Its lending portfolio includes:
- Commercial Loans: Tailored for businesses to finance equipment purchases, expansions, and real estate projects with term loans, time notes, and lines of credit.
- Consumer Loans: Designed to cater to personal expenditures such as auto loans, installment loans, and lines of credit including overdraft protection.
- Real Estate Financing: Encompassing both residential and commercial mortgages, along with home equity products that enable customers to finance home improvements or consolidate debt.
Moreover, the company complements its traditional banking services with modern financial solutions, including online and mobile banking platforms, which facilitate seamless digital transactions and enhance customer engagement.
Subsidiaries and Operational Structure
Arrow Financial Corporation orchestrates its business through multiple subsidiaries. Among them is the recently unified entity now operating as Arrow Bank National Association, which was formed by merging Glens Falls National Bank and Trust Company with Saratoga National Bank and Trust Company. This strategic unification not only streamlines operations but also reinforces the company's brand identity while maintaining its commitment to personalized local service. In addition, Arrow’s portfolio is diversified with subsidiaries providing insurance services and investment advisory, which broaden its scope beyond traditional banking products.
Market Position and Competitive Environment
Operating in a highly competitive regional market, Arrow Financial Corporation distinguishes itself by combining personalized service with a broad product offering. The company's focus on risk management, strong credit metrics, and stable funding practices allows it to secure a resilient operating model even in fluctuating market conditions. The integration of digital banking technologies ensures that it remains accessible to a diverse customer base, positioning it as a credible option for both traditional financial transactions and modern digital interactions.
Operational Excellence and Strategic Approach
Arrow emphasizes strategic operational efficiency through disciplined expense management and stabilizing funding costs. By prioritizing core profitability and maintaining consistent credit standards, the company demonstrates its ability to navigate complex financial landscapes while safeguarding stakeholder interests. Its business practices are built upon a foundation of regulatory compliance and prudent financial management, ensuring that both its operational and strategic decisions are rooted in long-standing expertise and trust within the financial community.
Comprehensive Financial Product Suite
The company provides a full range of financial products designed to cater to varying needs. These include:
- Deposit Services: A variety of accounts such as demand deposits, interest-bearing checking, savings, and time deposits that provide accessible and secure financial options for customers.
- Lending Solutions: From commercial and industrial financing to consumer installment loans and residential real estate lending, the company’s loan products are engineered to support economic growth and personal financial stability.
- Digital and Advisory Services: Investment advisory, insurance products, and the latest in digital banking platforms ensure that customers have access to a comprehensive suite of financial services that cater to modern banking requirements.
Expertise and Trustworthiness
Drawing on a history rooted in local community engagement and decades of banking experience, Arrow Financial Corporation reinforces its market position through meticulous risk management and a commitment to customer service excellence. The company’s transparent practices and adherence to regulatory standards bolster its reputation as an authoritative and trustworthy institution. Its blend of time-tested banking practices with innovative technology solutions manifests a deep understanding of the financial services environment, ensuring its clients receive both safety and convenience in their banking experience.
Conclusion
In summary, Arrow Financial Corporation (AROW) represents a well-rounded financial institution characterized by an expansive product suite, a strategic focus on operational efficiency, and a commitment to quality service. Its combined emphasis on traditional banking principles and digital innovation positions the company as an integral part of the regional financial landscape. Whether through its comprehensive lending solutions, robust deposit products, or its digitally enabled services, Arrow remains dedicated to meeting the diverse financial needs of its customers with both expertise and reliable local support.
Arrow Financial (AROW) reported Q4 2024 net income of $4.5 million ($0.27 EPS), down from $7.7 million ($0.46 EPS) in Q4 2023. Full-year 2024 net income was $29.7 million ($1.77 EPS), compared to $30.1 million ($1.77 EPS) in 2023.
The Q4 results included several non-core items: a $3.0 million loss on securities portfolio repositioning, $0.7 million write-off for legacy branding, and $0.5 million in bank unification expenses. The company declared a quarterly dividend of $0.28 per share, payable February 24, 2025.
Key highlights include: loan growth of $185 million (5.8%) for 2024, improved net interest margin to 2.72%, and record loan balances reaching $3.4 billion. Total assets were $4.3 billion at year-end 2024, up 3.3% from 2023. The company maintained strong asset quality with net charge-offs at 0.09% for the year.
Arrow Financial (AROW) has announced the unification of its banking subsidiaries, Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company, under a new unified brand: Arrow Bank National Association. The strategic move aims to simplify brand identity and strengthen market presence while maintaining local, personalized service.
The bank will maintain its current leadership team, branch locations, and staffing levels. New branding will be rolled out starting January 2025. Arrow Bank operates 38 branches across northeastern New York, from Albany to Clinton counties. The institution, with roots dating back to 1851, is part of Arrow Financial , which has approximately $4.4 billion in assets and employs over 550 people.
Arrow Financial (AROW) has appointed four new members to its Board of Directors, effective November 5, 2024. The new appointees are: James M. Dawsey, President of MLB Construction Services with 45 years of construction management experience; Dr. Kristine D. Duffy, President of SUNY Adirondack with 35 years of higher education experience; Philip Morris, CEO of Proctors Collaborative with expertise in cultural facilities development; and Daniel J. White, former Managing Partner at KPMG LLP with 37 years in community bank auditing.
Each director brings unique expertise: Dawsey in financial operations, Duffy in strategic planning and fundraising, Morris in project management and community engagement, and White in banking and accounting.
Arrow Financial (AROW) has announced that its banking subsidiaries, Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company, have joined the Allpoint ATM Network. This partnership provides customers with access to over 50,000 ATMs worldwide, including locations in popular retail stores and pharmacy chains. Customers can make surcharge-free withdrawals and cash deposits up to $200 at select Allpoint ATMs without any additional registration required. The move aims to enhance customer convenience by expanding ATM accessibility beyond traditional bank branches.
Arrow Financial reported net income of $9.0 million and EPS of $0.53 for Q3 2024, up from $7.7 million and $0.46 in Q3 2023. Key highlights include improved net interest margin to 2.78%, total deposits of $3.8 billion, and year-to-date loan growth of $126.3 million (5.2% annualized). The company completed two acquisitions: A&B Agency assets and a Whitehall branch. Arrow plans to unify its banking subsidiaries into Arrow Bank National Association by December 31, 2024. The company was named to Piper Sandler's Sm-All Stars: Class of 2024, among 30 top-performing small-cap banks.
Arrow Financial (NasdaqGS® – AROW) has been named to the Piper Sandler Sm-All Stars: Class of 2024, a prestigious list of 30 top-performing small-cap banks and thrifts in the country. To qualify, institutions needed a market cap below $2.5 billion and had to outperform industry medians in earnings per share growth, loan growth, deposit growth, and return on average equity, while meeting specific benchmarks for nonperforming assets, net charge-offs, and tangible common equity ratio.
Arrow is one of only three New York financial institutions on the list and the sole bank from Upstate New York. Piper Sandler, an independent investment bank and research firm, evaluated over 300 institutions trading on major exchanges to select the top 30. President and CEO Dave DeMarco expressed pride in the recognition, attributing it to the team's hard work and dedication.
Arrow Financial (NasdaqGS® - AROW) has declared a quarterly cash dividend of $0.28 per share, payable on October 29, 2024, to shareholders of record on October 15, 2024. This represents a 3.7% increase to the quarterly dividend and replaces the 3% stock dividend previously declared in recent years. The announcement marks Arrow's 46th consecutive quarterly cash dividend.
CEO David S. DeMarco highlighted that Arrow has returned over $6.4 million of capital to shareholders through share repurchases this year, in addition to $13.6 million in regular quarterly cash dividends paid to date in 2024. The company's continued success enables it to offer increased returns to shareholders.
Arrow Financial (NasdaqGS® - AROW) has completed the acquisition of the Whitehall, New York branch from Berkshire Bank. The transaction, which closed on August 2, 2024, included:
- Deposit accounts with an approximate balance of $37.5 million
- Loans with an approximate balance of $3 million
- The branch premises and substantially all related property and equipment
This strategic move expands Glens Falls National Bank's presence in Washington County to nine branches. All on-site employees of the Whitehall branch have been retained. The acquisition aligns with Arrow's commitment to broadening its presence, enhancing offerings, and increasing shareholder value.
Arrow Financial (NasdaqGS: AROW) reported Q2 2024 net income of $8.6 million, with an EPS of $0.52, up from $6.0 million and $0.35 EPS in Q2 2023. The Board declared a quarterly dividend of $0.27 per share, payable on August 23, 2024, to shareholders of record on August 12, 2024.
Key highlights: Gross loans grew by $57.6 million, net interest margin improved to 2.67%, and the average loan yield increased to 5.17%. Deposits were $3.7 billion, while tangible book value rose to $21.54. ROA improved to 0.82%.
Recent developments include regulatory approval to combine its banking subsidiaries into Arrow Bank and an acquisition of a branch in Whitehall, NY. The company also expanded its insurance business by acquiring assets from A&B Agency, Inc.
Arrow Financial (NasdaqGS® - AROW) has announced plans to unify its banking subsidiaries, Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company, into a single entity named Arrow Bank National Association. This decision follows regulatory approval and aims to enhance strategic growth opportunities and customer experience. Key points include:
- Arrow Bank will remain part of Arrow Financial
- Leadership team and staffing will remain unchanged
- 37 branches will continue to operate in northeastern New York
- Current asset size is approximately $4.2 billion
- Over 550 employees
The unification process will include a gradual rollout of new branding while maintaining the bank's commitment to community-based banking and charitable contributions.
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