Arrow Reports 4th Quarter Net Income of $14.0 Million or $0.85 per Share and $44.0 Million or $2.65 per Share for 2025; Declares 1st Quarter Dividend of $0.30 per Share

Rhea-AI Summary

Arrow Financial Corporation (Nasdaq: AROW) reported Q4 2025 net income of $14.0 million or $0.85 EPS and full-year 2025 net income of $44.0 million or $2.65 EPS. The Board declared a $0.30 quarterly dividend payable Feb 25, 2026.

Key performance: record net interest income of $35.1M, quarterly NIM 3.24% (3.25% FTE), 2025 NIM 3.17% (3.19% FTE), tangible book value $24.71 (+10.3% YoY), loans $3.5B, deposits $3.9B, and CET1 ratio 13.10%.

Positive

• EPS +50% in 2025 versus 2024
• Net interest income +19.2% YoY to $133.2M
• Net interest margin improved to 3.17% (3.19% FTE) for 2025
• Tangible book value +10.3% YoY to $24.71 per share
• Quarterly dividend increased 3.4% to $0.30 per share
• Strong regulatory capital with CET1 ratio 13.10%

Negative

• Provision for credit losses rose to $7.3M in 2025
• Net charge-offs increased to 0.19% for 2025 (annualized)
• Non-interest expense +5.8% YoY, driven by salaries and benefits
• Quarterly deposit decline of $160.6M due to seasonal municipal outflows

News Market Reaction

+2.14%

1 alert

+2.14% News Effect

On the day this news was published, AROW gained 2.14%, reflecting a moderate positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Q4 2025 net income: $14.0M Q4 2025 EPS: $0.85 2025 net income: $44.0M +5 more

8 metrics

Q4 2025 net income $14.0M Fourth quarter 2025

Q4 2025 EPS $0.85 Fully diluted EPS, Q4 2025

2025 net income $44.0M Year ended Dec 31, 2025

2025 EPS $2.65 Full-year 2025 diluted EPS

Quarterly dividend $0.30 per share 1Q 2026 dividend, payable Feb 25, 2026

Net interest margin 2025 3.17% (3.19% FTE) Year ended Dec 31, 2025

Tangible book value $24.71 per share At Dec 31, 2025

Total assets $4.4B At Dec 31, 2025

Market Reality Check

Price: $35.39 Vol: Volume 93,839 is at 1.31x...

normal vol

$35.39 Last Close

Volume Volume 93,839 is at 1.31x its 20-day average, indicating elevated trading interest pre-release. normal

Technical Shares at $32.43 are trading above the $28.28 200-day MA and sit 6.19% below the 52-week high.

Peers on Argus

AROW slipped 0.61% with modestly elevated volume while regional peers were mixed...

AROW slipped 0.61% with modestly elevated volume while regional peers were mixed: several names like ACNB (-2.55%) and PFIS (-2.72%) declined, but FFIC rose (+1.32%). The mixed tape suggests today’s action reflects both stock-specific and broader bank-sector factors rather than a clean sector-wide move.

Historical Context

3 past events · Latest: Dec 04 (Neutral)

Pattern 3 events

Date	Event	Sentiment	Move	Catalyst
Dec 04	Board appointment	Neutral	-0.9%	New director with software and technology background joined the board.
Nov 05	Legal settlement	Neutral	-2.7%	Shareholder derivative settlement received preliminary approval with no material impact.
Oct 30	Earnings & dividend	Positive	+2.6%	Q3 2025 results with record net interest income and raised quarterly dividend.

Pattern Detected

Recent news flow (governance, legal, dividends/earnings) has generally seen price moves that align directionally with the qualitative tone of each announcement.

Recent Company History

Over the past few months, Arrow’s news flow has focused on governance, legal resolution, and capital returns. On Oct 30, 2025, Q3 2025 earnings and a $0.29 dividend coincided with a +2.57% move, reflecting positive reception to improved profitability and balance sheet metrics. A preliminary settlement announcement on Nov 5, 2025 with no material financial impact saw a modest decline. A board appointment on Dec 4, 2025 was followed by a small pullback. Today’s stronger 2025 results and dividend increase build on that earnings-driven trajectory.

Market Pulse Summary

This announcement highlights Arrow’s record 2025 performance, with net income of $44.0M, EPS of $2.6...

Analysis

This announcement highlights Arrow’s record 2025 performance, with net income of $44.0M, EPS of $2.65, and a higher quarterly dividend of $0.30 per share. Net interest margin expanded to 3.17% (3.19% FTE), tangible book value per share rose to $24.71, and asset quality metrics such as nonperforming assets at 0.20% of assets remained solid. Investors may focus on credit loss provisions, loan growth, and capital ratios like the 13.10% CET1 level in upcoming filings.

Key Terms

net interest margin, tangible book value, return on average assets, allowance for credit losses, +4 more

8 terms

net interest margin financial

"For the year, Arrow is reporting strong net interest margin expansion, reaching a record 3.19%"

Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.

tangible book value financial

"tangible book value growth of over 10%."

Tangible book value is the accounting measure of a company’s net worth after removing intangible items like goodwill, patents and trademarks, leaving only physical and financial assets minus liabilities. For investors it offers a clearer view of the company’s hard-asset backing per share—like estimating the cash you could get by selling the furniture, machinery and cash in a house—helping gauge downside risk and whether a stock may be cheaply valued.

return on average assets financial

"Return on average assets exceeded 1.20%."

Return on average assets (ROAA) measures how efficiently a company turns its assets into profit by comparing profit after expenses to the average value of its assets over a period (usually the average of beginning and ending assets). It matters to investors because it shows how well management uses the company’s resources to generate returns—think of it as how much profit a baker earns from the oven space they actually used over time.

allowance for credit losses financial

"The allowance for credit losses was $34.3 million at December 31, 2025"

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.

nonperforming assets financial

"Nonperforming assets of $8.7 million at December 31, 2025, represented 0.20% of year end assets"

Nonperforming assets are loans or investments that are not generating expected payments or returns because the borrower has fallen behind on payments or the investment has lost value. They matter to investors because a high level of nonperforming assets can indicate financial trouble for a bank or institution, potentially affecting its stability and profitability.

common equity tier 1 capital ratio regulatory

"Arrow's Common Equity Tier 1 Capital Ratio was 13.10%"

A bank’s common equity tier 1 (CET1) capital ratio measures the size of its strongest loss-absorbing capital—mainly common shares and retained earnings—relative to the bank’s assets after adjusting those assets for how risky they are (riskier loans count more). Think of it as the safety cushion compared with the weight of risky business; investors use it to judge a bank’s ability to survive losses, meet rules, and sustain dividends or growth.

total risk-based capital ratio regulatory

"Total Risk-Based Capital Ratio was 14.86%."

The total risk-based capital ratio measures a financial firm's cushion against losses by comparing its available capital to its assets after those assets are adjusted for how risky they are. Think of it as the size of a safety net relative to the weight of everything being balanced on it: the bigger the ratio, the more able the firm is to absorb bad outcomes without defaulting or needing help. Investors watch this number because it signals regulatory strength, solvency, and how much room the firm has to pay dividends, lend or grow safely.

non-gaap financial measures financial

"this news release contains financial information determined by methods other than GAAP (non-GAAP)."

Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.

AI-generated analysis. Not financial advice.

GLENS FALLS, N.Y., Jan. 29, 2026 /PRNewswire/ -- Arrow Financial Corporation (NasdaqGS^® – AROW) ("Arrow") reported net income of $14.0 million, and fully diluted earnings per share ("EPS") of $0.85 for the fourth quarter of 2025, versus $4.5 million and EPS of $0.27, for the same period in 2024. For the year ended December 31, 2025, net income totaled $44.0 million, with EPS of $2.65, versus $29.7 million, and EPS of $1.77, for the prior year.

The Board of Directors of Arrow declared a quarterly cash dividend of $0.30 per share payable February 25, 2026 to shareholders of record as of February 11, 2026. This represents a 3.4% increase from the fourth quarter cash dividend, of $0.29 per share.

This Earnings Release and related commentary should be read in conjunction with our Form 8-K filed January 29, 2026 and related Fourth Quarter 2025 Investor Presentation, which can be found on our website: arrowfinancial.com/documents/investor-presentations. 

Arrow President and CEO David S. DeMarco: 

"Arrow finished the year by delivering fourth quarter record operating results with record net income of $14 million or $0.85 per share. For the year, Arrow is reporting strong net interest margin expansion, reaching a record 3.19%, and tangible book value growth of over 10%. Return on average assets exceeded 1.20%. Our outstanding team was able to deliver such exceptional results and continue executing on our strategic plan after recently completing the system integration of our former two subsidiary banks transforming Arrow Bank. Our strategy has enabled us to grow EPS 50% in 2025 as we enter 2026 with significant momentum and begin celebrating our 175th anniversary, we look forward to another strong year."

Fourth Quarter Highlights and Key Metrics

• Reported Record Net Income of $14.0 million or $0.85 EPS
• Record Net Interest Income of $35.1 million
• Record Net Interest Margin of 3.24% (3.25% FTE¹) versus 3.22% (3.24% FTE) in the prior quarter
  • Elevated average municipal deposits negatively impacted FTE NIM by 4bps
• Tangible Book Value² per share of $24.71, an increase from $23.85 or 3.6% from the prior quarter
• Return on Average Assets of 1.24%, favorably impacted by 9bps from the successful implementation of tax strategies
• Net Charge-Offs remained low at 0.08% (annualized) for the quarter

Select 2025 Highlights and Key Metrics

• Reported Net Income of $44.0 million or $2.65 EPS
• Record Net Interest Margin improved to 3.17% (3.19% FTE³), up from 2.72% (2.74% FTE) in the prior year
• Tangible Book Value⁴ per share of $24.71, an increase from $22.40 or 10.3% from the prior year
• Return on Average Assets of 1.00%
• Net Charge-Offs were 0.19% for the year

Income Statement

• Net Income: Net income for the fourth quarter of 2025 was $14.0 million, increasing from $12.8 million in the third quarter of 2025. Net income for 2025 was $44.0 million, up from $29.7 million for 2024.
  • Compared to the prior quarter, net income benefited from an increase of $1.0 million in net interest income, as interest expense remained flat to the previous quarter. During the fourth quarter of 2025, the Company successfully implemented tax planning strategies that lowered the effective tax rate versus the prior reported quarter.  
  • Compared to the prior year, the increase in net income was primarily the result of an increase in net interest income of $21.4 million as well as an increase in non-interest income of $4.4 million offset by an increase of non-interest expense of $5.7 million and a $2.1 million increase in the provision for credit losses.
    
    
• Net Interest Income: Net interest income for the fourth quarter of 2025 was $35.1 million, an increase of $1.0 million compared to the third quarter of 2025. Net interest income for the year ended December 31, 2025 was $133.2 million, an increase of $21.4 million, or 19.2%, from the prior year.
  • Compared to the prior quarter, interest income increased $1.0 million while interest expense remained unchanged as a result of seasonally lower deposit balances and continued pricing discipline.
  • Compared to the prior year, the increase was primarily due to the combination of increased interest income and decreased interest expense. Interest and fees on loans were $184.1 million for the year ended December 31, 2025, an increase of 7.4% from the $171.3 million for the year ended December 31, 2024. The increase was primarily driven by loan growth and higher loan rates. Interest expense for the year ended December 31, 2025 was $77.0 million. This represents a decrease of $6.3 million, or 7.5%, from the $83.3 million in interest expense for the prior year. The decrease in the interest expense was driven primarily by lower deposit rates and changes in deposit composition.
    
    
• Net Interest Margin: In the fourth quarter of 2025, the net interest margin was 3.24% (3.25% FTE), as compared to 3.22% (3.24% FTE) for the third quarter of 2025. Net interest margin was 3.17% (3.19% FTE) for the year ended December 31, 2025, as compared to 2.72% (2.74% FTE) for the year ended December 31, 2024. The increase in net interest margin compared to the third quarter of 2025 as well as the prior year was primarily the result of continued yield expansion on earning assets combined with the reduced cost of interest-bearing liabilities.

 

	Twelve Months Ended (dollars in thousands)
	December 31, 2025		December 31, 2024
Interest and Dividend Income	$          210,147		$          194,993
Interest Expense	76,983		83,261
Net Interest Income	133,164		111,732
Average Earning Assets(1)	4,197,528		4,102,954
Average Interest-Bearing Liabilities	3,212,900		3,126,495
Yield on Earning Assets(1)	5.01 %		4.75 %
Cost of Interest-Bearing Liabilities	2.40		2.66
Net Interest Spread	2.61		2.09
Net Interest Margin	3.17		2.72
FTE Net Interest Margin(2)	3.19		2.74
(1) Includes Nonaccrual Loans.
(2) FTE Net Interest Margin is a non-GAAP measure. See reconciliation on Note 3 to the Selected Quarterly Information

 

• Provision for Credit Losses: For the year ended December 31, 2025, the provision for credit losses related to the loan portfolio was $7.3 million, compared to $5.2 million in the prior year. The key drivers for the increase in provision for credit losses for 2025 were primarily the charge-off of the previously disclosed commercial loan participation in the second quarter of 2025 and overall loan growth.
  
  
• Non-Interest Income: Non-interest income was $8.3 million for the fourth quarter of 2025, a decrease from $8.7 million for the previous quarter. Non-interest income was $32.4 million for the year ended December 31, 2025, an increase of 15.5%, as compared to $28.1 million for the year ended December 31, 2024. The decrease from the prior quarter was primarily driven by a positive valuation adjustment related to an equity position recorded in the third quarter. The increase in non-interest income from the previous year was primarily driven by a 2024 net loss on securities from the repositioning of the investment portfolio as well as increases in 2025 revenue related to wealth management, insurance and interchange fees.
  
  
• Non-Interest Expense: Non-interest expense was $25.8 million for the fourth quarter of 2025, consistent with the fourth quarter of 2024. Non-interest expense for the year ended December 31, 2025 increased by $5.7 million, or 5.8%, to $102.9 million, as compared to $97.3 million in 2024. The largest component of non-interest expense is salaries and benefits paid to our employees, which totaled $56.3 million in 2025 and increased $3.6 million, or 6.8%, from the prior year. Salaries and benefits were impacted by inflation-driven wage increases and rising benefit costs.
  
  
• Provision for Income Taxes: The provision for income taxes for 2025 was $11.4 million, compared to $7.6 million for 2024. The effective income tax rates for 2025 and 2024 were 20.6% and 20.5%, respectively.

Balance Sheet

• Total Assets: Total assets were $4.4 billion at December 31, 2025, an increase of $139.5 million, or 3.2%, compared to December 31, 2024 and a decrease of $141.3 million, or 3.1%, from September 30, 2025. The increase over the prior year end was primarily driven by loan growth and an overall increase in deposits. The decrease in cash balances in the fourth quarter was primarily driven by the seasonal decrease of municipal deposit balances as of December 31, 2025.
  
  
• Investments: Total investments were $572.8 million at December 31, 2025, an increase of $2.0 million, or 0.4%, compared to December 31, 2024. The increase reflected the reinvestment of the cash generated from paydowns and maturities of investments into higher yielding investments. There were no credit quality issues related to the investment portfolio.
  
  
• Loans: At December 31, 2025, total loan balances reached $3.5 billion. Loan growth for the fourth quarter was $11 million. Loan growth for the year was $59 million or 1.7%. Please see the loan detail included in the Consolidated Financial Information table.
  
  
• Allowance for Credit Losses: The allowance for credit losses was $34.3 million at December 31, 2025, an increase of $0.7 million from December 31, 2024. The allowance for credit losses at December 31, 2025 represented 0.99% of loans outstanding, unchanged from 0.99% at year end 2024. Asset quality remained strong at December 31, 2025. Net loan charge-offs, expressed as an annualized percentage of average loans outstanding, were 0.19% for the year ended December 31, 2025, as compared to 0.09% for the prior year. The increase was the result of a charge-off of a previously reserved commercial loan participation in the second quarter of 2025. Nonperforming assets of $8.7 million at December 31, 2025, represented 0.20% of year end assets, compared to $21.5 million or 0.50% at December 31, 2024.
  
  
• Deposits: At December 31, 2025, total deposit balances were $3.9 billion, an increase of $111.5 million, or 2.9%, from the prior-year end level. Deposits decreased in the fourth quarter by $160.6 million. The decrease in the fourth quarter was primarily driven by the seasonality of municipal deposits. Non-municipal deposits, excluding brokered CDs, increased by $131.6 million and municipal deposits decreased by $20.1 million, each as compared to December 31, 2024. Non-interest bearing deposits increased by $19.4 million, or 2.8%, during 2025. At December 31, 2025, total time deposits, excluding brokered CDs, increased $3.2 million from the prior-year end level.
  
  
• Capital: Total shareholders' equity was $431.9 million at December 31, 2025, an increase of $31.0 million, or 7.7%, from December 31, 2024 and an increase of $14.2 million in the fourth quarter. The increase from the third quarter was primarily attributable to net income of $14.0 million, other comprehensive income of $4.6 million and various capital items of $0.5 million, partially offset by dividends of $4.8 million. The increase in stockholders' equity from December 31, 2024 was primarily attributable to net income of $44.0 million, other comprehensive income of $14.4 million and various capital items of $1.7 million partially offset by dividends of $18.9 million and stock repurchases of $9.9 million. The change to other comprehensive income is primarily attributable to fair value adjustments on the available for sale investment portfolio. Arrow's regulatory capital ratios remained strong in 2025. At December 31, 2025, Arrow's Common Equity Tier 1 Capital Ratio was 13.10% and Total Risk-Based Capital Ratio was 14.86%. The capital ratios of Arrow and its subsidiary bank, Arrow Bank, continued to significantly exceed the "well capitalized" regulatory standards.

Additional Commentary

• BauerFinancial Ratings: Arrow Bank National Association ("Arrow Bank") received a 5-Star Superior rating from BauerFinancial, Inc., the nation's premier bank rating firm. Arrow Bank has earned this designation for 75 consecutive quarters, securing its prominent position as an "Exceptional Performance Bank."

About Arrow: Arrow Financial Corporation is a holding company headquartered in Glens Falls, New York, serving the financial needs of northeastern New York. The Company is the parent of Arrow Bank, a full-service commercial bank, and Upstate Agency, LLC, a comprehensive insurance agency.

Non-GAAP Financial Measures Reconciliation: In addition to presenting information in conformity with accounting principles generally accepted in the United States of America (GAAP), this news release contains financial information determined by methods other than GAAP (non-GAAP). The following measures used in this release, which are commonly utilized by financial institutions, have not been specifically exempted by the Securities and Exchange Commission ("SEC") and may constitute "non-GAAP financial measures" within the meaning of the SEC's rules. Certain non-GAAP financial measures include: tangible book value, tangible equity, return on tangible equity, tax-equivalent adjustment and related net interest income, tax-equivalent net interest margin and the efficiency ratio. Management believes that the non-GAAP financial measures disclosed by Arrow from time to time are useful in evaluating Arrow's performance and that such information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Non-GAAP financial measures may differ from similar measures presented by other companies. See the reconciliation of GAAP to non-GAAP measures in the section titled "Selected Quarterly Information."

Safe Harbor Statement: The information contained in this earnings release may contain statements that are not historical in nature but rather are based on management's beliefs, assumptions, expectations, estimates and projections about the future. These statements can sometimes be identified by Arrow's use of forward-looking words such as "may," "will," "anticipate," "estimate," "expect," or "intend." These statements may be "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, involving a degree of uncertainty and attendant risk. In the case of all forward-looking statements, actual outcomes and results may differ materially from what the statements predict or forecast, explicitly or by implication because of various factors, including changes in economic conditions or interest rates, credit risk, inflation, tariffs, cybersecurity risks, changes in FDIC assessments, bank failures, difficulties in managing the Arrow's growth, competition, changes in law or the regulatory environment, and changes in general business and economic trends. Arrow undertakes no obligation to revise or update these forward-looking statements to reflect the occurrence of unanticipated events. This earnings release should be read in conjunction with Arrow's Annual Report on Form 10-K for the year ended December 31, 2024, and other filings with the SEC.

1 FTE (fully taxable equivalent basis) net interest margin is a non-GAAP measure. See reconciliation on Note 3 to the Selected Quarterly Information.
2 Tangible book value per share is a non-GAAP measure. See reconciliation Note 3 to the Selected Quarterly Information.
3 FTE Net interest margin is a non-GAAP measure. See reconciliation on Note 3 to the Selected Quarterly Information.
4 Tangible book value per share is a non-GAAP measure. See reconciliation Note 3 to the Selected Quarterly Information.

 

ARROW FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts - Unaudited)
	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2025		2024		2025		2024
INTEREST AND DIVIDEND INCOME
Interest and Fees on Loans	$     47,087		$     44,703		$   184,069		$   171,342
Interest on Deposits at Banks	2,598		2,880		8,086		9,615
Interest and Dividends on Investment Securities:
Fully Taxable	4,500		2,728		15,964		11,579
Exempt from Federal Taxes	425		590		2,028		2,457
Total Interest and Dividend Income	54,610		50,901		210,147		194,993
INTEREST EXPENSE
Interest-Bearing Checking Accounts	2,117		1,932		8,021		7,442
Savings Deposits	9,722		11,144		38,106		42,850
Time Deposits over $250,000	1,562		1,815		6,794		7,460
Other Time Deposits	5,846		5,906		23,027		20,997
Borrowings	—		198		167		3,637
Junior Subordinated Obligations Issued to   Unconsolidated Subsidiary Trusts	173		172		686		686
Interest on Financing Leases	47		47		182		189
Total Interest Expense	19,467		21,214		76,983		83,261
NET INTEREST INCOME	35,143		29,687		133,164		111,732
Provision for Credit Losses	846		2,854		7,274		5,180
NET INTEREST INCOME AFTER PROVISION FOR    CREDIT LOSSES	34,297		26,833		125,890		106,552
NONINTEREST INCOME
Income From Fiduciary Activities	2,771		2,615		10,304		9,952
Fees for Other Services to Customers	2,854		2,763		11,098		10,892
Insurance Commissions	2,050		1,848		7,666		7,147
Net (Loss) Gain on Securities	(127)		(3,072)		542		(2,907)
Net Gain on Sales of Loans	246		75		819		209
Other Operating Income	474		—		2,003		2,781
Total Noninterest Income	8,268		4,229		32,432		28,074
NONINTEREST EXPENSE
Salaries and Employee Benefits	14,309		13,332		56,289		52,707
Occupancy Expenses, Net	1,881		1,870		7,762		7,169
Technology and Equipment Expense	5,152		5,119		20,791		19,365
FDIC Assessments	563		664		2,516		2,775
Other Operating Expense	3,899		4,853		15,576		15,252
Total Noninterest Expense	25,804		25,838		102,934		97,268
INCOME BEFORE PROVISION FOR INCOME TAXES	16,761		5,224		55,388		37,358
Provision for Income Taxes	2,748		752		11,435		7,649
NET INCOME	$     14,013		$       4,472		$     43,953		$     29,709
Average Shares Outstanding:
Basic	16,390		16,718		16,503		16,739
Diluted	16,413		16,739		16,514		16,745
Per Common Share:
Basic Earnings	$         0.85		$         0.26		$         2.65		$         1.77
Diluted Earnings	0.85		0.27		2.65		1.77

 

ARROW FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Amounts - Unaudited)
	December 31, 2025		December 31, 2024
ASSETS
Cash and Due From Banks	$              29,132		$              27,422
Interest-Bearing Deposits at Banks	185,051		127,124
Investment Securities:
Available-for-Sale	495,868		463,111
Held-to-Maturity (Approximate Fair Value of $66,569 at  December 31, 2025, and $96,586 at December 31, 2024)	66,975		98,261
Equity Securities	5,597		5,055
Other Investments	4,372		4,353
Loans	3,453,093		3,394,541
Allowance for Credit Losses	(34,322)		(33,598)
Net Loans	3,418,771		3,360,943
Premises and Equipment, Net	59,433		59,717
Goodwill	23,789		23,789
Other Intangible Assets, Net	1,741		2,058
Other Assets	155,133		134,515
Total Assets	$        4,445,862		$        4,306,348
LIABILITIES
Noninterest-Bearing Deposits	$           722,374		$           702,978
Interest-Bearing Checking Accounts	862,192		810,834
Savings Deposits	1,557,638		1,520,024
Time Deposits over $250,000	155,802		191,962
Other Time Deposits	641,463		602,132
Total Deposits	3,939,469		3,827,930
Borrowings	4,265		8,600
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts	20,000		20,000
Finance Leases	4,929		5,005
Other Liabilities	45,347		43,912
Total Liabilities	4,014,010		3,905,447
STOCKHOLDERS' EQUITY
Preferred Stock, $1 Par Value, 1,000,000 Shares Authorized	—		—
Common Stock, $1 Par Value, 30,000,000 Shares Authorized (22,066,559 Shares Issued at December 31, 2025 and December 31, 2024)	22,067		22,067
Additional Paid-in Capital	414,506		413,476
Retained Earnings	102,271		77,215
Accumulated Other Comprehensive Loss	(4,037)		(18,453)
Treasury Stock, at Cost (5,621,217 Shares at December 31, 2025, and 5,323,638 Shares at December 31, 2024)	(102,955)		(93,404)
Total Stockholders' Equity	431,852		400,901
Total Liabilities and Stockholders' Equity	$        4,445,862		$        4,306,348

 

Arrow Financial Corporation
Selected Quarterly Information
(Dollars In Thousands, Except Per Share Amounts - Unaudited)
Quarter Ended	12/31/2025		9/30/2025		6/30/2025		3/31/2025		12/31/2024
Net Income	$   14,013		$   12,825		$   10,805		$      6,310		$      4,470
Share and Per Share Data:
Period End Shares Outstanding	16,445		16,438		16,484		16,670		16,743
Basic Average Shares Outstanding	16,390		16,402		16,545		16,665		16,718
Diluted Average Shares Outstanding	16,413		16,406		16,551		16,673		16,739
Basic Earnings Per Share	$        0.85		$        0.77		$        0.65		$        0.38		$        0.26
Diluted Earnings Per Share	0.85		0.77		0.65		0.38		0.27
Cash Dividend Per Share	0.290		0.290		0.280		0.280		0.280
Selected Quarterly Average Balances:
Interest-Bearing Deposits at Banks	$ 260,806		$ 200,251		$ 145,473		$ 146,023		$ 233,469
Investment Securities	596,994		574,080		582,380		591,841		579,107
Loans	3,444,505		3,424,784		3,415,140		3,406,075		3,354,463
Deposits	4,002,221		3,913,721		3,849,093		3,825,124		3,847,691
Other Borrowed Funds	29,203		30,539		33,579		48,375		49,090
Shareholders' Equity	425,042		413,058		406,529		404,394		393,696
Total Assets	4,499,195		4,399,815		4,332,339		4,324,917		4,339,833
Return on Average Assets, annualized	1.24 %		1.16 %		1.00 %		0.59 %		0.41 %
Return on Average Equity, annualized	13.08 %		12.32 %		10.66 %		6.33 %		4.52 %
Return on Average Tangible Equity, annualized 1	13.92 %		13.13 %		11.38 %		6.76 %		4.84 %
Average Earning Assets	4,302,305		4,199,115		4,142,993		4,143,939		4,167,039
Average Paying Liabilities	3,280,856		3,193,789		3,191,906		3,184,196		3,185,215
Interest Income	54,610		53,598		51,573		50,366		50,901
Tax-Equivalent Adjustment 2	114		121		148		155		157
Interest Income, Tax-Equivalent 2	54,724		53,719		51,721		50,521		51,058
Interest Expense	19,467		19,467		19,040		19,009		21,214
Net Interest Income	35,143		34,131		32,533		31,357		29,687
Net Interest Income, Tax-Equivalent 2	35,257		34,252		32,681		31,512		29,844
Net Interest Margin, annualized	3.24 %		3.22 %		3.15 %		3.07 %		2.83 %
Net Interest Margin, Tax-Equivalent, annualized 2	3.25 %		3.24 %		3.16 %		3.08 %		2.85 %
Efficiency Ratio Calculation: 3
Noninterest Expense	$   25,804		$   25,433		$   25,652		$   26,045		$   25,838
Less: Intangible Asset Amortization	74		76		80		81		89
Net Noninterest Expense	$   25,730		$   25,357		$   25,572		$   25,964		$   25,749
Net Interest Income, Tax-Equivalent	$   35,257		$   34,252		$   32,681		$   31,512		$   29,844
Noninterest Income	8,268		8,716		7,609		7,839		4,227
Less: Net (Loss) Gain on Securities	(127)		392		(40)		317		(3,072)
Net Gross Income	$   43,652		$   42,576		$   40,330		$   39,034		$   37,143
Efficiency Ratio	58.94 %		59.56 %		63.41 %		66.52 %		69.32 %
Period-End Capital Information:
Total Stockholders' Equity (i.e. Book Value)	$ 431,852		$ 417,687		$ 408,506		$ 404,409		$ 400,901
Book Value per Share	26.26		25.41		24.78		24.26		23.94
Goodwill and Other Intangible Assets, net	25,530		25,594		25,659		25,743		25,847
Tangible Book Value per Share 1	24.71		23.85		23.23		22.72		22.40
Capital Ratios:4
Tier 1 Leverage Ratio	9.68 %		9.66 %		9.64 %		9.61 %		9.60 %
Common Equity Tier 1 Capital Ratio	13.10 %		13.07 %		12.73 %		12.59 %		12.71 %
Tier 1 Risk-Based Capital Ratio	13.74 %		13.71 %		13.37 %		13.23 %		13.35 %
Total Risk-Based Capital Ratio	14.86 %		14.86 %		14.51 %		14.48 %		14.47 %

 

Arrow Financial Corporation
Selected Quarterly Information - Continued
(Dollars In Thousands, Except Per Share Amounts - Unaudited)
Footnotes:
1.	Non-GAAP Financial Measure Reconciliation: Tangible Book Value, Tangible Equity, and Return on Average Tangible Equity exclude goodwill and other intangible assets, net from total equity.  These are non-GAAP financial measures which we believe provide investors with information that is useful in understanding our financial performance.
		12/31/2025		9/30/2025		6/30/2025		3/31/2025		12/31/2024
	Total Stockholders' Equity (GAAP)	$   431,852		$   417,687		$   408,506		$   404,409		$   400,901
	Less:  Goodwill and Other Intangible assets, net	25,530		25,594		25,659		25,743		25,847
	Tangible Equity (Non-GAAP)	$   406,322		$   392,093		$   382,847		$   378,666		$   375,054
	Period End Shares Outstanding	16,445		16,438		16,484		16,670		16,743
	Tangible Book Value per Share (Non-GAAP)	$        24.71		$        23.85		$        23.23		$        22.72		$        22.40
	Net Income	14,013		12,825		10,805		6,310		4,470
	Return on Average Tangible Equity (Net Income/Average Tangible Equity - Annualized)	13.92 %		13.13 %		11.38 %		6.76 %		4.84 %
2.	Non-GAAP Financial Measure Reconciliation: Net Interest Margin is the ratio of our annualized tax-equivalent net interest income to average earning assets.  This is also a non-GAAP financial measure which we believe provides investors with information that is useful in understanding our financial performance.
		12/31/2025		9/30/2025		6/30/2025		3/31/2025		12/31/2024
	Interest Income (GAAP)	$     54,610		$     53,598		$     51,573		$     50,366		$     50,901
	Add: Tax Equivalent Adjustment (Non-GAAP)	114		121		148		155		157
	Interest Income - Tax Equivalent (Non-GAAP)	$     54,724		$     53,719		$     51,721		$     50,521		$     51,058
	Net Interest Income (GAAP)	$     35,143		$     34,131		$     32,533		$     31,357		$     29,687
	Add:  Tax-Equivalent adjustment (Non-GAAP)	114		121		148		155		157
	Net Interest Income - Tax Equivalent (Non-GAAP)	$     35,257		$     34,252		$     32,681		$     31,512		$     29,844
	Average Earning Assets	4,302,305		4,199,115		4,142,993		4,143,939		4,167,039
	Net Interest Margin (Non-GAAP)*	3.25 %		3.24 %		3.16 %		3.08 %		2.85 %
3.	Non-GAAP Financial Measure Reconciliation: Financial Institutions often use the "efficiency ratio", a non-GAAP ratio, as a measure of expense control.  We believe the efficiency ratio provides investors with information that is useful in understanding our financial performance.  We define our efficiency ratio as the ratio of our noninterest expense to our net gross income (which equals our tax-equivalent net interest income plus noninterest income, as adjusted).
4.	For the current quarter, all of the regulatory capital ratios in the table above, as well as the Total Risk-Weighted Assets and Common Equity Tier 1 Capital amounts listed in the table below, are estimates based on, and calculated in accordance with bank regulatory capital rules.  All prior quarters reflect actual results.  The December 31, 2025 CET1 ratio listed in the tables (i.e., 13.10%) exceeds the sum of the required minimum CET1 ratio plus the fully phased-in Capital Conservation Buffer (i.e., 7.00%).
		12/31/2025		9/30/2025		6/30/2025		3/31/2025		12/31/2024
	Total Risk Weighted Assets	3,160,095		3,095,225		3,121,451		3,143,547		3,126,364
	Common Equity Tier 1 Capital	414,050		404,426		397,432		395,900		397,285
	Common Equity Tier 1 Ratio	13.10 %		13.07 %		12.73 %		12.59 %		12.71 %
* Quarterly ratios have been annualized

 

Arrow Financial Corporation
Average Consolidated Balance Sheets and Net Interest Income Analysis
(Dollars in Thousands - Unaudited)
Quarter Ended:	December 31, 2025						December 31, 2024
			Interest		Rate				Interest		Rate
	Average		Income/		Earned/		Average		Income/		Earned/
	Balance		Expense		Paid		Balance		Expense		Paid
Interest-Bearing Deposits at Banks	$   260,806		$       2,598		3.95 %		$   233,469		$       2,880		4.91 %
Investment Securities:
Fully Taxable	537,088		4,500		3.32 %		484,860		2,728		2.24 %
Exempt from Federal Taxes	59,906		425		2.81 %		94,247		590		2.49 %
Loans (1)	3,444,505		47,087		5.42 %		3,354,463		44,703		5.30 %
Total Earning Assets (1)	4,302,305		54,610		5.04 %		4,167,039		50,901		4.86 %
Allowance for Credit Losses	(34,288)						(31,529)
Cash and Due From Banks	25,827						30,706
Other Assets	205,351						173,617
Total Assets	$ 4,499,195						$ 4,339,833
Deposits:
Interest-Bearing Checking Accounts	$   850,602		2,117		0.99 %		$   802,808		1,932		0.96 %
Savings Deposits	1,584,844		9,721		2.43 %		1,567,455		11,144		2.83 %
Time Deposits of $250,000 or More	173,996		1,562		3.56 %		183,325		1,815		3.94 %
Other Time Deposits	642,211		5,847		3.61 %		582,537		5,906		4.03 %
Total Interest-Bearing Deposits	3,251,653		19,247		2.35 %		3,136,125		20,797		2.64 %
Borrowings	4,266		—		— %		24,089		198		3.27 %
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts	20,000		173		3.43 %		20,000		172		3.42 %
Finance Leases	4,937		47		3.78 %		5,001		47		3.74 %
Total Interest-Bearing Liabilities	3,280,856		19,467		2.35 %		3,185,215		21,214		2.65 %
Noninterest-Bearing Deposits	750,568						711,566
Other Liabilities	42,729						49,356
Total Liabilities	4,074,153						3,946,137
Stockholders' Equity	425,042						393,696
Total Liabilities and Stockholders' Equity	$ 4,499,195						$ 4,339,833
Net Interest Income			$     35,143						$     29,687
Net Interest Spread					2.69 %						2.21 %
Net Interest Margin					3.24 %						2.83 %

(1) Includes Nonaccrual Loans

 

Arrow Financial Corporation
Average Consolidated Balance Sheets and Net Interest Income Analysis
(Dollars in Thousands - Unaudited)
Quarter Ended:	December 31, 2025						September 30, 2025
			Interest		Rate				Interest		Rate
	Average		Income/		Earned/		Average		Income/		Earned/
	Balance		Expense		Paid		Balance		Expense		Paid
Interest-Bearing Deposits at Banks	$   260,806		$       2,598		3.95 %		$   200,251		$       2,245		4.45 %
Investment Securities:
Fully Taxable	537,088		4,500		3.32 %		509,599		4,066		3.17 %
Exempt from Federal Taxes	59,906		425		2.81 %		64,481		455		2.80 %
Loans (1)	3,444,505		47,087		5.42 %		3,424,784		46,832		5.43 %
Total Earning Assets (1)	4,302,305		54,610		5.04 %		4,199,115		53,598		5.06 %
Allowance for Credit Losses	(34,288)						(34,143)
Cash and Due From Banks	25,827						33,984
Other Assets	205,351						200,859
Total Assets	$ 4,499,195						$ 4,399,815
Deposits:
Interest-Bearing Checking Accounts	$   850,602		2,117		0.99 %		$   848,622		2,160		1.01 %
Savings Deposits	1,584,844		9,721		2.43 %		1,492,204		9,534		2.53 %
Time Deposits of $250,000 or More	173,996		1,562		3.56 %		177,826		1,695		3.78 %
Other Time Deposits	642,211		5,847		3.61 %		644,598		5,859		3.61 %
Total Interest-Bearing Deposits	3,251,653		19,247		2.35 %		3,163,250		19,248		2.41 %
Borrowings	4,266		—		— %		5,583		—		— %
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts	20,000		173		3.43 %		20,000		173		3.43 %
Finance Leases	4,937		47		3.78 %		4,956		46		3.68 %
Total Interest-Bearing Liabilities	3,280,856		19,467		2.35 %		3,193,789		19,467		2.42 %
Noninterest-Bearing Deposits	750,568						750,471
Other Liabilities	42,729						42,497
Total Liabilities	4,074,153						3,986,757
Stockholders' Equity	425,042						413,058
Total Liabilities and Stockholders' Equity	$ 4,499,195						$ 4,399,815
Net Interest Income			$     35,143						$     34,131
Net Interest Spread					2.69 %						2.64 %
Net Interest Margin					3.24 %						3.22 %

 

Arrow Financial Corporation
Average Consolidated Balance Sheets and Net Interest Income Analysis
(Dollars in Thousands - Unaudited)
Years Ended December 31:	2025						2024
			Interest		Rate				Interest		Rate
	Average		Income/		Earned/		Average		Income/		Earned/
	Balance		Expense		Paid		Balance		Expense		Paid
Interest-Bearing Deposits at Banks	$   188,486		$       8,086		4.29 %		$   181,618		$       9,615		5.29 %
Investment Securities:
Fully Taxable	510,900		15,964		3.12 %		515,794		11,579		2.24 %
Exempt from Federal Taxes	75,405		2,028		2.69 %		105,196		2,457		2.34 %
Loans	3,422,737		184,069		5.38 %		3,300,346		171,342		5.19 %
Total Earning Assets	4,197,528		210,147		5.01 %		4,102,954		194,993		4.75 %
Allowance for Credit Losses	(34,341)						(31,387)
Cash and Due From Banks	30,143						30,577
Other Assets	196,243						164,577
Total Assets	$ 4,389,573						$ 4,266,721
Deposits:
Interest-Bearing Checking Accounts	$   846,243		8,021		0.95 %		$   812,634		7,442		0.92 %
Savings Deposits	1,522,092		38,106		2.50 %		1,507,227		42,850		2.84 %
Time Deposits of $250,000 or More	179,453		6,794		3.79 %		176,844		7,460		4.22 %
Other Time Deposits	629,754		23,027		3.66 %		520,658		20,997		4.03 %
Total Interest-Bearing Deposits	3,177,542		75,948		2.39 %		3,017,363		78,749		2.61 %
Borrowings	10,391		167		1.61 %		84,106		3,637		4.32 %
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts	20,000		686		3.43 %		20,000		686		3.43 %
Finance Leases	4,967		182		3.66 %		5,026		189		3.76 %
Total Interest-Bearing Liabilities	3,212,900		76,983		2.40 %		3,126,495		83,261		2.66 %
Demand Deposits	720,528						705,863
Other Liabilities	43,830						49,505
Total Liabilities	3,977,258						3,881,863
Stockholders' Equity	412,315						384,858
Total Liabilities and Stockholders' Equity	$ 4,389,573						$ 4,266,721
Net Interest Income			$   133,164						$   111,732
Net Interest Spread					2.61 %						2.09 %
Net Interest Margin					3.17 %						2.72 %

 

Arrow Financial Corporation
Consolidated Financial Information
(Dollars in Thousands - Unaudited)
Quarter Ended:	12/31/2025		12/31/2024
Loan Portfolio
Commercial Loans	$      165,729		$      158,991
Commercial Real Estate Loans	818,259		796,365
Subtotal Commercial Loan Portfolio	983,988		955,356
Consumer Loans	1,076,007		1,118,981
Residential Real Estate Loans	1,393,098		1,320,204
Total Loans	$   3,453,093		$   3,394,541
Allowance for Credit Losses
Allowance for Credit Losses, Beginning of Quarter	$        34,176		$        31,262
Loans Charged-off	(1,477)		(1,333)
Recoveries of Loans Previously Charged-off	777		815
Net Loans Charged-off	(700)		(518)
Provision for Credit Losses	846		2,854
Allowance for Credit Losses, End of Quarter	$        34,322		$        33,598
Nonperforming Assets
Nonaccrual Loans	$          6,415		$        20,621
Loans Past Due 90 or More Days and Accruing	2,040		398
Total Nonperforming Loans	8,455		21,019
Repossessed Assets	280		382
Other Real Estate Owned	—		76
Total Nonperforming Assets	$          8,735		$        21,477
Key Asset Quality Ratios
Net Loans Charged-off to Average Loans, Quarter-to-date   Annualized	0.08 %		0.06 %
Provision for Credit Losses to Average Loans, Quarter-to-date   Annualized	0.10 %		0.34 %
Allowance for Credit Losses to Period-End Loans	0.99 %		0.99 %
Allowance for Credit Losses to Period-End Nonperforming Loans	405.94 %		159.69 %
Nonperforming Loans to Period-End Loans	0.24 %		0.62 %
Nonperforming Assets to Period-End Assets	0.20 %		0.50 %
Twelve-Month Period Ended:
Allowance for Credit Losses
Allowance for Credit Losses, Beginning of Year	33,598		31,265
Loans Charged-off	(9,554)		(5,895)
Recoveries of Loans Previously Charged-off	3,004		3,048
Net Loans Charged-off	(6,550)		(2,847)
Provision for Credit Losses	7,274		5,180
Allowance for Credit Losses, End of Year	$        34,322		$        33,598
Key Asset Quality Ratios
Net Loans Charged-off to Average Loans	0.19 %		0.09 %
Provision for Credit Losses to Average Loans	0.21 %		0.16 %

 

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SOURCE Arrow Financial Corporation

FAQ

What did Arrow (AROW) report for Q4 2025 net income and EPS?

Arrow reported Q4 2025 net income of $14.0 million, or $0.85 EPS. According to the company, this was a record quarterly operating result and improved from $4.5 million and $0.27 EPS in Q4 2024.

How much did Arrow (AROW) earn for full-year 2025 and how does EPS compare to 2024?

Arrow reported 2025 net income of $44.0 million, or $2.65 EPS. According to the company, EPS increased about 50% from $1.77 in 2024 driven by higher net interest income and non-interest revenue.

What dividend did Arrow (AROW) declare and when is it payable?

Arrow declared a quarterly cash dividend of $0.30 per share payable on February 25, 2026. According to the company, shareholders of record as of February 11, 2026 will receive the payment.

How did Arrow's net interest margin and net interest income perform in 2025?

Arrow reported a 2025 net interest margin of 3.17% (3.19% FTE) and net interest income of $133.2 million. According to the company, margin and income rose due to yield expansion on earning assets and lower cost of liabilities.

What asset quality and credit reserve changes did Arrow (AROW) report for 2025?

Arrow's allowance for credit losses was $34.3 million (0.99% of loans) and net charge-offs were 0.19% for 2025. According to the company, the increase reflected a previously disclosed commercial loan participation charge-off and loan growth.