Arrow Announces Acquisition of Whitehall, N.Y. Branch

Rhea-AI Summary

Arrow Financial Corporation announces the acquisition of a branch office in Whitehall, New York, from Berkshire Bank, aiming to expand market presence and enhance shareholder value. The sale includes deposit accounts with an approximate balance of $39 million and loans with an approximate balance of $3 million, set to be completed by the end of the third quarter of 2024.

Insights

Financial Analyst

Arrow Financial Corporation's acquisition of the Berkshire Bank branch represents a strategic expansion that could have a positive effect on Arrow's market share and regional presence. The addition of $39 million in deposit accounts and $3 million in loans is a relatively modest increase in assets, but it can lead to enhanced revenue streams through cross-selling opportunities and improved customer service capabilities. The acquisition aligns with Arrow's growth strategy and could signal to investors a proactive approach to scaling operations and diversifying assets.

From a financial perspective, the key metrics to watch post-acquisition will include the cost of integration, the retention rate of the newly acquired customers and the ability of Arrow Financial to leverage the new branch to increase its loan and deposit base. Investors should also monitor how the acquisition impacts Arrow's overall financial health, particularly its capital adequacy ratios, return on assets (ROA) and return on equity (ROE). These indicators will provide insights into the efficiency and profitability of the acquisition in the longer term.

Market Research Analyst

Given the local nature of community banking, the acquisition of the Whitehall branch by Glens Falls National Bank could strengthen Arrow Financial's competitive position in Washington County. The move may be viewed favorably by existing and potential customers due to the bank's commitment to the community and its emphasis on local expertise. Customer retention and satisfaction are critical in the banking sector and a smooth transition for new customers will be essential for realizing the full value of the acquisition.

It is also important to assess the competitive dynamics of the region. If Berkshire Bank's presence in the area was significant, Arrow's acquisition could reduce competition, potentially allowing for better pricing power. However, if the market is still competitive, Arrow will need to differentiate itself through superior customer service or product offerings to capitalize on its expanded footprint.

Legal Expert

The acquisition's success is contingent upon receiving customary regulatory approvals, which is a standard procedure in the banking industry. These approvals are critical to ensure that the transaction meets all legal and regulatory requirements, including antitrust laws and banking regulations. The legal process involves scrutiny of the acquisition's impact on competition and the local economy, as well as the financial stability of the combined entity.

Moreover, the promise of employment for all employees associated with the Whitehall branch is not only a positive community relations move but also helps mitigate potential legal and regulatory concerns related to labor. Ensuring a smooth transition for employees can prevent disruptions in service during the integration phase and aligns with regulatory expectations for fair employment practices during mergers and acquisitions.

GLENS FALLS, N.Y., March 4, 2024 /PRNewswire/ -- Arrow Financial Corporation (NasdaqGS^® - AROW) today announced that its bank subsidiary, Glens Falls National Bank and Trust Company, has entered into a definitive agreement with Berkshire Bank, a subsidiary of Berkshire Hills Bancorp, Inc. (NYSE: BHLB), under which Glens Falls National Bank will acquire the branch office at 184 Broadway, Whitehall, New York.

The sale is targeted for completion by the end of the third quarter of 2024, subject to customary regulatory approvals. Following the anticipated completion of the sale, Glens Falls National Bank will operate a total of nine branches in Washington County.

"We are thrilled to announce the acquisition of the Whitehall location from Berkshire Bank, and we are eager to welcome its customers to our Arrow Family of Companies," said Dave DeMarco, President and CEO of Arrow Financial Corporation and Glens Falls National Bank. "This strategic move marks a milestone in our growth and underscores our commitment to expanding our market presence, allowing us to further enhance our offerings and drive value for our shareholders. We have a long history of meeting diverse financial needs in Washington County and communities like Whitehall. With our commitment to the area and our local expertise, we are confident this will be a smooth transition for our new customers." 

The Whitehall branch includes deposit accounts with an aggregate approximate balance of $39 million and loans with an aggregate approximate balance of $3 million. The sale includes the branch premises and substantially all of the personal property and equipment used in the business. All employees associated with the Whitehall branch will be offered employment with the Arrow Family of Companies. Arrow's advisor for the purchase was Piper Sandler & Co. and legal counsel was provided by Thompson Coburn LLP.

Arrow Financial Corporation (NasdaqGS® - AROW) is a multi-bank holding company headquartered in Glens Falls, New York, serving the financial needs of northeastern New York. The Company is the parent of Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company. Other subsidiaries include North Country Investment Advisers, Inc., and Upstate Agency, LLC, specializing in property and casualty insurance and group health and employee benefits.

The information in this document may contain statements based on management's beliefs, assumptions, expectations, estimates and projections about the future. Such "forward-looking statements," as defined in Section 21E of the Securities Exchange Act of 1934, as amended, involve a degree of uncertainty and attendant risk. Actual outcomes and results may differ, explicitly or by implication. We are not obligated to revise or update these statements to reflect unanticipated events. This document should be read in conjunction with Arrow's Annual Report on Form 10-K for the year ended December 31, 2022 and other filings with the Securities and Exchange Commission.

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SOURCE Arrow Financial Corporation

FAQ

When will Glens Falls National Bank acquire the branch office in Whitehall, New York?

Glens Falls National Bank is set to acquire the branch office in Whitehall, New York, by the end of the third quarter of 2024.

What is the approximate balance of deposit accounts included in the sale?

The sale includes deposit accounts with an aggregate approximate balance of $39 million.

Which companies are involved in the acquisition agreement?

Arrow Financial Corporation's Glens Falls National Bank will acquire the branch office from Berkshire Bank.

Who is the President and CEO of Arrow Financial Corporation and Glens Falls National Bank?

Dave DeMarco serves as the President and CEO of Arrow Financial Corporation and Glens Falls National Bank.

What services do Arrow Financial Corporation subsidiaries provide?

Arrow Financial Corporation subsidiaries offer financial services, property and casualty insurance, and group health and employee benefits.