Arrow Financial Reports $10.8 Million Q2 Income, Announces Dividend
Arrow Financial Corporation has reported a net income of $10.8 million for the second quarter ending June 30, 2025. This translates to earnings of $0.65 per share, a notable increase from the $6.3 million and $0.38 per share recorded in the previous quarter. Additionally, the company declared a quarterly cash dividend of $0.29 per share, reflecting a 3.6% increase from the prior quarter. This dividend is set to be paid on August 25, 2025, to shareholders on record as of August 11, 2025.
The second quarter results include approximately $1.1 million in non-core unification costs associated with the ongoing operational merger of its banking subsidiaries. This merger, which culminated in July 2025, aimed to streamline operations and improve customer service by consolidating multiple banking systems into a single platform.
Arrow’s President and CEO, David S. DeMarco, expressed satisfaction with the quarter’s performance, highlighting a return on average assets of 1.00% and improvements in net interest margin. He emphasized the significance of the bank’s unification process, stating, “We delivered strong second-quarter results… This was an important step on our path toward improving customer experience and gaining operational efficiencies.”
Financial Highlights and Performance Metrics
Arrow’s second quarter was marked by several key financial metrics. Net interest income reached a record $32.5 million, up 3.8% from the previous quarter. The net interest margin improved to 3.15%, with a 3.16% margin on a fully taxable equivalent basis, reflecting a positive trend in asset yields and interest-bearing liabilities.
The provision for credit losses experienced a significant decline, dropping to $0.6 million from $5.0 million in the first quarter. This reduction is attributed to the recognition of a specific reserve on a large commercial loan participation in the prior quarter.
Non-interest income for the quarter totaled $7.6 million, marking a slight decrease from $7.8 million in the first quarter, largely due to fluctuations in wealth management revenue amid varying market conditions.
Balance Sheet Overview
As of June 30, 2025, Arrow reported total assets of $4.4 billion, a decrease of $34.2 million, or 0.8%, from the previous quarter. This change was primarily driven by variations in cash balances and the maturation of investments, alongside growth in the loan portfolio.
Total loans stood at $3.4 billion, with a modest growth of $7.9 million during the quarter. The allowance for credit losses decreased to $34.2 million, representing 1.00% of outstanding loans, down from $37.8 million or 1.11% in March 2025.
Arrow’s capital position remains robust, with total stockholders’ equity at $408.5 million. This represents a 1.0% increase from the previous quarter, driven by net income and other comprehensive income, despite dividends and share repurchases totaling $9.8 million.
Arrow continues to maintain strong regulatory capital ratios, with a Common Equity Tier 1 Capital Ratio of 12.73% and a Total Risk-Based Capital Ratio of 14.51%, exceeding the “well capitalized” benchmarks set by regulatory authorities.
In conclusion, Arrow Financial Corporation is positioned well for future growth as it advances its strategic priorities while delivering value to stakeholders. The successful unification of its banking operations marks a significant milestone in enhancing customer service and operational efficiency.
