Arrow Financial Corp 10-Q for FY2025 Q1

Arrow Financial Corp (AROW)

10-Q 2025-05-09 For: 2025-03-31

Added on April 06, 2026

About this 10-Q

Arrow Financial Corp filed this 10-Q on May 9, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).

Headline figures

Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net income: $6.31M; down 17.6% from net income of $7.66M a year earlier
Diluted EPS: $0.38; down 15.6% from $0.45 a year earlier

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New York						22-2448962
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, Par Value $1.00 per share	AROW	NASDAQ Global Select Market


Large accelerated filer	☐	Accelerated filer	☑
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standard provided pursuant to Section 13(a) of the Exchange Act.			☐


Class						Outstanding as of April 30, 2025
Common Stock, par value $1.00 per share						16,675,338


			Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements			3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			39
Item 3. Quantitative and Qualitative Disclosures About Market Risk			62
Item 4. Controls and Procedures			63


PART II - OTHER INFORMATION
Item 1. Legal Proceedings			64
Item 1.A. Risk Factors			64
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			64
Item 3. Defaults Upon Senior Securities			65
Item 4. Mine Safety Disclosures			65
Item 5. Other Information			65
Item 6. Exhibits			66

SIGNATURES			67


	March 31, 2025		December 31, 2024
ASSETS
Cash and Due From Banks	$	32,965	$	27,422
Interest-Bearing Deposits at Banks	268,481		127,124
Investment Securities:
Available-for-Sale at Fair Value	445,744		463,111
Held-to-Maturity (Fair Value of $96,335 at March 31, 2025 and $96,586 at December 31, 2024)	97,492		98,261
Equity Securities	5,372		5,055
Other Investments	4,353		4,353
Loans	3,416,868		3,394,541
Allowance for Credit Losses	(37,771)		(33,598)
Net Loans	3,379,097		3,360,943
Premises and Equipment, Net	59,919		59,717
Goodwill	23,789		23,789
Other Intangible Assets, Net	1,954		2,058
Other Assets	129,719		134,515
Total Assets	$	4,448,885	$	4,306,348
LIABILITIES
Noninterest-Bearing Deposits	$	697,374	$	702,978
Interest-Bearing Checking Accounts	924,200		810,834
Savings Deposits	1,532,385		1,520,024
Time Deposits over $250,000	182,552		191,962
Other Time Deposits	631,654		602,132
Total Deposits	3,968,165		3,827,930
Borrowings	8,600		8,600


Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts	20,000		20,000
Finance Leases	4,979		5,005
Other Liabilities	42,732		43,912
Total Liabilities	4,044,476		3,905,447
STOCKHOLDERS’ EQUITY
Preferred Stock, $1 Par Value and 1,000,000 Shares Authorized at March 31, 2025, December 31, 2024 and March 31, 2024	—		—
Common Stock, $1 Par Value; 30,000,000 Shares Authorized (22,066,559 Shares Issued at March 31, 2025 and December 31, 2024)	22,067		22,067
Additional Paid-in Capital	413,469		413,476
Retained Earnings	78,827		77,215

Accumulated Other Comprehensive Loss	(13,520)		(18,453)
Treasury Stock, at Cost (5,397,029 Shares at March 31, 2025 and 5,323,638 Shares at December 31, 2024)	(96,434)		(93,404)
Total Stockholders’ Equity	404,409		400,901
Total Liabilities and Stockholders’ Equity	$	4,448,885	$	4,306,348


	Three Months Ended March 31
	2025		2024
INTEREST AND DIVIDEND INCOME
Interest and Fees on Loans	$	44,550	$	40,376
Interest on Deposits at Banks	1,621		2,447
Interest and Dividends on Investment Securities:
Fully Taxable	3,608		3,186
Exempt from Federal Taxes	587		668
Total Interest and Dividend Income	50,366		46,677
INTEREST EXPENSE
Interest-Bearing Checking Accounts	1,803		1,641
Savings Deposits	9,483		10,230
Time Deposits over $250,000	1,811		1,973
Other Time Deposits	5,529		5,083

Borrowings	167		1,076
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts	169		171
Interest on Financing Leases	47		48
Total Interest Expense	19,009		20,222
NET INTEREST INCOME	31,357		26,455
Provision for Credit Losses on Loans	5,019		617
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	26,338		25,838
NON-INTEREST INCOME
Income From Fiduciary Activities	2,535		2,457
Fees for Other Services to Customers	2,600		2,543
Insurance Commissions	1,826		1,682
Net Gain on Securities	317		17
Net Gain on Sales of Loans	101		4
Other Operating Income	460		1,155
Total Non-Interest Income	7,839		7,858
NON-INTEREST EXPENSE
Salaries and Employee Benefits	13,555		12,893
Occupancy Expenses, Net	2,022		1,771
Technology and Equipment Expense	5,087		4,820
FDIC Assessments	670		715
Other Operating Expense	4,711		3,813
Total Non-Interest Expense	26,045		24,012
INCOME BEFORE PROVISION FOR INCOME TAXES	8,132		9,684
Provision for Income Taxes	1,822		2,024
NET INCOME	$	6,310	7,660
Average Shares Outstanding:
Basic	16,665		16,865
Diluted	16,673		16,867
Per Common Share:
Basic Earnings	$	0.38	$	0.45
Diluted Earnings	0.38		0.45


	Three Months Ended March 31,
	2025		2024
Net Income	$	6,310	$	7,660
Other Comprehensive Income, Net of Tax:
Net Unrealized Securities Holding Gain (Loss) Arising During the Period	6,416		(1,530)

Net Unrealized (Loss) Gain on Cash Flow Hedge Agreements	(1,154)		2,390
Reclassification of Net Unrealized (Gain) on Cash Flow Hedge Agreements to Interest Expense	(319)		(158)


Amortization of Net Retirement Plan Actuarial (Gain)	(71)		(50)
Amortization of Net Retirement Plan Prior Service Cost	61		50
Other Comprehensive Income	4,933		702
Comprehensive Income	$	11,243	$	8,362


	Three Month Period Ended March 31, 2025
	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumu-lated Other Com- prehensive Loss		Treasury Stock		Total
Balance at December 31, 2024	$	22,067	$	413,476	$	77,215	$	(18,453)	$	(93,404)	$	400,901


Net Income	—		—		6,310		—		—		6,310
Other Comprehensive Income	—		—		—		4,933		—		4,933



Cash Dividends Paid, $.28 per Share	—		—		(4,698)		—		—		(4,698)
Stock Options Exercised, Net (5,144 Shares)	—		62		—		—		40		102
Shares Issued Under the Directors’ Stock Plan (4,989 Shares)	—		92		—		—		40		132
Shares Issued Under the Employee Stock Purchase Plan (3,327 Shares)	—		56		—		—		27		83

Shares Issued Related to Restricted Share Awards (43,250 Shares)	—		(342)		—		—		342		—
Compensation expense related to Employee Stock Purchase Plan	—		9		—		—		—		9
Stock-Based Compensation Expense	—		116		—		—		—		116

Purchase of Treasury Stock (130,101 Shares) 1	—		—		—		—		(3,479)		(3,479)



Balance at March 31, 2025	$	22,067	$	413,469	$	78,827	$	(13,520)	$	(96,434)	$	404,409






























	Three Month Period Ended March, 2024
	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumu-lated Other Com- prehensive Loss		Treasury Stock		Total
Balance at December 31, 2023	$	22,067	$	412,551	$	65,792	$	(33,416)	$	(87,222)	$	379,772


Net Income	—		—		7,660		—		—		7,660
Other Comprehensive Income	—		—		—		702		—		702



Cash Dividends Paid, $.270 per Share	—		—		(4,565)		—		—		(4,565)
Stock Options Exercised, Net (6,060 Shares)	—		67		—		—		49		116
Shares Issued Under the Directors’ Stock Plan (4,887 Shares)	—		89		—		—		39		128
Shares Issued Under the Employee Stock Purchase Plan (2,271 Shares)	—		33		—		—		18		51
Compensation expense related to Employee Stock Purchase Plan	—		5		—		—		—		5
Stock-Based Compensation Expense	—		78		—		—		—		78

Purchase of Treasury Stock (245,480 Shares) 1	—		—		—		—		(5,961)		(5,961)


Balance at March 31, 2024	$	22,067	$	412,823	$	68,887	$	(32,714)	$	(93,077)	$	377,986


	Three Months Ended March 31
Cash Flows from Operating Activities:	2025		2024
Net Income	$	6,310	$	7,660

Provision for Credit Losses	5,019		617
Depreciation and Amortization	1,206		1,394





Net Gain on Equity Securities	(317)		(17)
Loans Originated and Held-for-Sale	(5,591)		(50)
Proceeds from the Sale of Loans Held-for-Sale	4,135		4
Net Gain on the Sale of Loans	(101)		(4)
Net Loss on the Sale of Premises and Equipment, Other Real Estate Owned and Repossessed Assets	37		27
Contributions to Retirement Benefit Plans	(177)		(154)
Deferred Income Tax Benefit	(854)		(259)
Shares Issued Under the Directors’ Stock Plan	132		128
Stock-Based Compensation Expense	125		83
Tax Benefit from Exercise of Stock Options	8		6

Net Decrease (Increase) in Other Assets	3,089		(269)
Net (Decrease) Increase in Other Liabilities	(2,951)		1,183
Net Cash Provided By Operating Activities	10,070		10,349
Cash Flows from Investing Activities:

Proceeds from the Maturities and Calls of Securities Available-for-Sale	26,172		10,083


Proceeds from the Maturities and Calls of Securities Held-to-Maturity	3,629		4,003
Purchases of Securities Held-to-Maturity	(2,899)		(750)

Net Increase in Loans	(21,168)		(51,352)
Proceeds from the Sales of Premises and Equipment, Other Real Estate Owned and Repossessed Assets	623		637
Purchase of Premises and Equipment	(1,274)		(1,155)

Net Decrease in FHLB and Federal Reserve Bank Stock	—		841


Net Cash Provided (Used) By Investing Activities	5,083		(37,693)
Cash Flows from Financing Activities:
Net Increase in Deposits	140,235		91,455
Net Decrease in Short-Term Federal Home Loan Bank Borrowings	—		(20,000)

Finance Lease Payments	(26)		(13)
Other Borrowings - Advances	—		100,000

Net Cash Collateral Received from Derivative Counterparties	(470)		6,190
Purchase of Treasury Stock	(3,479)		(5,961)
Stock Options Exercised, Net	102		116
Shares Issued Under the Employee Stock Purchase Plan	83		51



Cash Dividends Paid	(4,698)		(4,565)
Net Cash Provided By Financing Activities	131,747		167,273
Net Increase in Cash and Cash Equivalents	146,900		139,929
Cash and Cash Equivalents at Beginning of Period	154,546		142,536
Cash and Cash Equivalents at End of Period	$	301,446	$	282,465

Supplemental Disclosures to Statements of Cash Flow Information:
Interest on Deposits and Borrowings	$	18,718	$	18,513
Income Taxes	507		953

Transfer of Loans to Other Real Estate Owned and Repossessed Assets	624		624


The following table is the schedule of Cash and Cash Equivalents at March 31, 2025 and December 31, 2024:
	March 31, 2025		December 31, 2024
Cash and Due From Banks	$	32,965	$	27,422
Interest-bearing Deposits at Banks	268,481		127,124
Total Cash and Cash Equivalents	$	301,446	154,546


Available-For-Sale Securities
	U.S. Treasuries		U.S. Government & Agency Obligations		State and Municipal Obligations		Mortgage- Backed Securities		Corporate and Other Debt Securities		Total Available- For-Sale Securities
March 31, 2025
Available-For-Sale Securities, at Amortized Cost	$	98,080	$	55,000	$	240	$	319,341	$	1,000	$	473,661
Gross Unrealized Gains	1,419		6		—		59		—		1,484
Gross Unrealized Losses	—		(514)		—		(28,878)		(9)		(29,401)
Available-For-Sale Securities, at Fair Value	99,499		54,492		240		290,522		991		445,744
Available-For-Sale Securities, Pledged as Collateral, at Fair Value											250,625

Maturities of Debt Securities, at Amortized Cost:
Within One Year	$	24,971	$	30,000	$	—	$	1,745	$	—	$	56,716
From 1 - 5 Years	48,694		25,000		—		158,377		1,000		233,071
From 5 - 10 Years	24,415		—		240		159,219		—		183,874
Over 10 Years	—		—		—		—		—		—

Maturities of Debt Securities, at Fair Value:
Within One Year	$	25,050	$	29,978	$	—	$	1,719	$	—	$	56,747
From 1 - 5 Years	49,518		24,514		—		144,602		991		219,625
From 5 - 10 Years	24,931		—		240		144,201		—		169,372
Over 10 Years	—		—		—		—		—		—

Securities in a Continuous Loss Position, at Fair Value:
Less than 12 Months	$	—	$	—	$	—	$	58,143	$	—	$	58,143
12 Months or Longer	—		39,486		—		216,937		991		257,414
Total	$	—	$	39,486	$	—	$	275,080	$	991	$	315,557
Number of Securities in a Continuous Loss Position	—		5		—		96		1		102

Unrealized Losses on Securities in a Continuous Loss Position:
Less than 12 Months	$	—	$	—	$	—	$	358	$	—	$	358
12 Months or Longer	—		514		—		28,520		9		29,043
Total	$	—	$	514	$	—	$	28,878	$	9	$	29,401

Disaggregated Details:
US Treasuries, at Amortized Cost	$	98,080
US Treasuries, at Fair Value	99,499
US Agency Obligations, at Amortized Cost			$	55,000
US Agency Obligations, at Fair Value			54,492
Local Municipal Obligations, at Amortized Cost					$	240
Local Municipal Obligations, at Fair Value					240
US Government Agency Securities, at Amortized Cost							$	6,604


Held-To-Maturity Securities
	State and Municipal Obligations		Mortgage- Backed Securities		Total Held-To Maturity Securities
March 31, 2025
Held-To-Maturity Securities, at Amortized Cost	$	91,704	$	5,788	$	97,492

Gross Unrealized Losses	(989)		(168)		(1,157)
Held-To-Maturity Securities, at Fair Value	90,715		5,620		96,335
Held-To-Maturity Securities, Pledged as Collateral, at Carrying Value					69,937
Held-To-Maturity Securities, Pledged as Collateral, at Fair Value					68,779

Maturities of Debt Securities, at Amortized Cost:
Within One Year	$	53,879	$	646	$	54,525
From 1 - 5 Years	35,758		5,142		40,900
From 5 - 10 Years	2,061		—		2,061
Over 10 Years	6		—		6

Maturities of Debt Securities, at Fair Value:
Within One Year	$	53,736	$	639	$	54,375
From 1 - 5 Years	34,949		4,981		39,930
From 5 - 10 Years	2,024		—		2,024
Over 10 Years	6		—		6

Securities in a Continuous Loss Position, at Fair Value:
Less than 12 Months	$	204	$	—	$	204
12 Months or Longer	65,623		5,620		71,243
Total	$	65,827	$	5,620	$	71,447

Number of Securities in a Continuous Loss Position	209		16		225

Unrealized Losses on Securities in a Continuous Loss Position:
Less than 12 Months	$	1	$	—	$	1
12 Months or Longer	988		168		1,156
Total	$	989	$	168	$	1,157


	For the Three Months Ended March 31,
	2025		2024
Net Gain on Equity Securities	$	317	$	17
Less: Net gain recognized during the reporting period on equity securities sold during the period	—		—
Unrealized net gain recognized during the reporting period on equity securities still held at the reporting date	$	317	$	17


Schedule of Past Due Loans by Loan Category
			Commercial
	Commercial		Real Estate		Consumer		Residential		Total
March 31, 2025
Loans Past Due 30-59 Days	$	528	$	146	$	10,480	$	3,397	$	14,551
Loans Past Due 60-89 Days	147		—		3,320		239		3,706
Loans Past Due 90 or more Days	17		15,008		1,039		2,037		18,101
Total Loans Past Due	692		15,154		14,839		5,673		36,358
Current Loans	153,583		788,861		1,103,896		1,334,170		3,380,510
Total Loans	$	154,275	$	804,015	$	1,118,735	$	1,339,843	$	3,416,868

December 31, 2024
Loans Past Due 30-59 Days	$	355	$	—	$	11,211	$	391	$	11,957
Loans Past Due 60-89 Days	156		318		5,417		2,685		8,576
Loans Past Due 90 or more Days	102		14,902		2,225		2,239		19,468
Total Loans Past Due	613		15,220		18,853		5,315		40,001
Current Loans	158,378		781,145		1,100,128		1,314,889		3,354,540
Total Loans	$	158,991	$	796,365	$	1,118,981	$	1,320,204	$	3,394,541


Allowance for Credit Losses
	Commercial		Commercial Real Estate		Consumer		Residential		Total















December 31, 2024	$	1,925	$	14,507	$	3,882	$	13,284	$	33,598
Charge-offs	$	—	$	—	$	(1,519)	$	(31)	$	(1,550)
Recoveries	$	—	$	—	$	704	$	—	$	704
Provision	$	(124)	$	3,729	$	1,080	$	334	$	5,019
March 31, 2025	$	1,801	$	18,236	$	4,147	$	13,587	$	37,771
















December 31, 2023	$	1,958	$	15,521	$	2,566	$	11,220	$	31,265


	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis		Revolving Loan Converted to Term		Total
March 31, 2025	2025		2024		2023		2022		2021		Prior
Commercial:
Risk rating
Satisfactory	$	7,720	$	41,090	$	26,444	$	21,475	$	15,801	$	23,978	$	9,801	$	—	$	146,309
Special mention	96		—		70		189		—		—		483		—		838
Substandard	—		—		501		1,118		—		2,997		2,512		—		7,128
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Loans	$	7,816	$	41,090	$	27,015	$	22,782	$	15,801	$	26,975	$	12,796	$	—	$	154,275

Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial Real Estate:
Risk rating
Satisfactory	$	9,712	$	103,985	$	96,978	$	136,141	$	107,903	$	296,123	$	2,578	$	—	$	753,420
Special mention	—		2,988		—		12,593		—		3,033		—		—		18,614
Substandard	—		—		346		169		322		14,765		1,371		—		16,973
Doubtful	—		—		—		—		1,656		13,352		—		—		15,008
Total Commercial Real Estate Loans	$	9,712	$	106,973	$	97,324	$	148,903	$	109,881	$	327,273	$	3,949	$	—	$	804,015

Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Consumer:
Risk rating
Performing	$	105,293	$	368,022	$	269,633	$	216,799	$	105,322	$	52,138	$	475	$	—	$	1,117,682
Nonperforming	—		206		162		297		291		97		—		—		1,053
Total Consumer Loans	$	105,293	$	368,228	$	269,795	$	217,096	$	105,613	$	52,235	$	475	$	—	$	1,118,735

Current-period gross charge-offs	$	—	$	363	$	392	$	357	$	317	$	90	$	—	$	—	$	1,519

Residential:
Risk rating
Performing	$	29,806	$	174,585	$	174,559	$	221,058	$	179,359	$	431,930	$	125,606	$	—	$	1,336,903
Nonperforming	—		—		201		344		201		1,937		257		—		2,940
Total Residential Loans	$	29,806	$	174,585	$	174,760	$	221,402	$	179,560	$	433,867	$	125,863	$	—	$	1,339,843

Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	31	$	—	$	—	$	31

Total Loans	$	152,627	$	690,876	$	568,894	$	610,183	$	410,855	$	840,350	$	143,083	$	—	$	3,416,868


	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis		Revolving Loan Converted to Term		Total
December 31, 2024	2024		2023		2022		2021		2020		Prior
Commercial:
Risk rating
Satisfactory	$	42,767	$	28,988	$	23,808	$	16,941	$	6,183	$	19,211	$	15,686	$	—	$	153,584
Special mention	107		229		930		—		72		—		483		—		1,821
Substandard	—		280		264		—		—		3,030		12		—		3,586
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Loans	$	42,874	$	29,497	$	25,002	$	16,941	$	6,255	$	22,241	$	16,181	$	—	$	158,991

Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	9	$	—	$	—	$	—	$	9

Commercial Real Estate:
Risk rating
Satisfactory	$	90,049	$	96,783	$	137,146	$	109,086	$	115,576	$	187,202	$	2,799	$	—	$	738,641
Special mention	3,002		200		12,680		—		—		9,506		—		—		25,388
Substandard	—		146		172		1,985		2,309		26,853		871		—		32,336
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Real Estate Loans	$	93,051	$	97,129	$	149,998	$	111,071	$	117,885	$	223,561	$	3,670	$	—	$	796,365

Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Consumer:
Risk rating
Performing	$	386,004	$	297,698	$	243,484	$	121,803	$	48,268	$	18,994	$	473	$	—	$	1,116,724
Nonperforming	345		424		602		593		178		115		—		—		2,257
Total Consumer Loans	$	386,349	$	298,122	$	244,086	$	122,396	$	48,446	$	19,109	$	473	$	—	$	1,118,981

Current-period gross charge-offs	$	1,272	$	949	$	1,669	$	1,270	$	434	$	243	$	—	$	—	$	5,837

Residential:
Risk rating
Performing	$	162,087	$	177,071	$	225,398	$	181,934	$	106,695	$	334,576	$	128,687	$	—	$	1,316,448
Nonperforming	—		201		254		201		464		2,386		250		—		3,756
Total Residential Loans	$	162,087	$	177,272	$	225,652	$	182,135	$	107,159	$	336,962	$	128,937	$	—	$	1,320,204

Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	49	$	—	$	—	$	49

Total Loans	$	684,361	$	602,020	$	644,738	$	432,543	$	279,745	$	601,873	$	149,261	$	—	$	3,394,541


	Balances				Weighted Average Rate 1

Final Maturity	3/31/2025		12/31/2024			3/31/2025		12/31/2024
First Year	$	6,900	$	6,900		5.34	%	5.34	%
Second Year	—		—			—	%	—	%
Third Year	1,700		1,700			4.85	%	4.85	%
Fourth Year	—		—			—	%	—	%
Total	$	8,600	$	8,600		5.24	%	5.24	%

1. The effective rate on the FHLBNY Advances is 0% due to subsidized funding in the form of interest rate credits.


Schedule of Non Accrual Loans by Category
			Commercial
March 31, 2025	Commercial		Real Estate		Consumer		Residential		Total
Loans 90 or More Days Past Due and Still Accruing Interest	$	—	$	—	$	8	$	397	$	405
Nonaccrual Loans	17		15,008		1,045		2,542		18,612
Nonaccrual With No Allowance for Credit Loss	17		—		1,045		2,542		3,604
Interest Income on Nonaccrual Loans	—		—		—		—		—

December 31, 2024
Loans 90 or More Days Past Due and Still Accruing Interest	$	—	$	—	$	19	$	379	$	398
Nonaccrual Loans	102		14,902		2,241		3,376		20,621


March 31, 2025	Collateral Type -Residential Real Estate		Collateral Type - Commercial Real Estate		Total Loans
Commercial	$	—	$	—	$	—
Commercial Real Estate	—		15,008		15,008
Consumer	—		—		—
Residential	772		—		772
Total	$	772	$	15,008	$	15,780


Allowance for Credit Losses - Collectively and Individually Evaluated
	Commercial		Commercial Real Estate		Consumer		Residential		Total
March 31, 2025
Ending Loan Balance - Collectively Evaluated	$	154,275	$	789,007	$	1,118,735	$	1,339,071	$	3,401,088
Allowance for Credit Losses - Loans Collectively Evaluated	1,801		14,486		4,147		13,587		34,021

Ending Loan Balance - Individually Evaluated	—		15,008		—		772		15,780
Allowance for Credit Losses - Loans Individually Evaluated	—		3,750		—		—		3,750

December 31, 2024
Ending Loan Balance - Collectively Evaluated	$	158,991	$	781,463	$	1,118,981	$	1,318,787	$	3,378,222
Allowance for Credit Losses - Loans Collectively Evaluated	1,925		14,507		3,882		13,284		33,598
Ending Loan Balance - Individually Evaluated	—		14,902		—		1,417		16,319
Allowance for Credit Losses - Loans Individually Evaluated	—		—		—		—		—


	March 31, 2025		December 31, 2024
Balance:
BTFP Advances	$	—	$	—
FHLBNY Overnight Advances	—		—
FHLBNY Term Advances	8,600		8,600

Total Borrowings	$	8,600	$	8,600

Maximum Borrowing Capacity:
Federal Funds Purchased	$	23,000	$	23,000
Federal Home Loan Bank of New York	715,164		654,890
Federal Reserve Bank of New York	776,063		571,107

Available Borrowing Capacity:
Federal Funds Purchased	$	23,000	$	23,000
Federal Home Loan Bank of New York	676,564		616,290
Federal Reserve Bank of New York	776,063		571,107


	March 31, 2025			December 31, 2024
ACST II
Balance	$	10,000		$	10,000
Period End:
Variable Interest Rate	7.71		%	7.74		%
Fixed Interest Rate resulting from cash flow hedge agreement	4.00		%	4.00		%

ACST III
Balance	$	10,000		$	10,000
Period End:
Variable Interest Rate	6.56		%	6.59		%
Fixed Interest Rate resulting from cash flow hedge agreement	2.86		%	2.86		%


Commitments to Extend Credit and Letters of Credit
	March 31, 2025		December 31, 2024
Notional Amount:
Commitments to Extend Credit	$	454,882	$	449,491
Standby Letters of Credit	4,011		4,306
Fair Value:
Commitments to Extend Credit	$	—	$	—
Standby Letters of Credit	—		(7)


Schedule of Comprehensive Income (Loss)
	Three Months Ended March 31
			Tax
	Before-Tax		(Expense)		Net-of-Tax
	Amount		Benefit		Amount
2025
Net Unrealized Securities Holding Gain on Securities Available-for-Sale Arising During the Period	$	8,645	$	(2,229)	$	6,416
Net Unrealized (Loss) on Cash Flow Swap	(1,554)		400		(1,154)



Reclassification of Net Unrealized (Gain) on Cash Flow Hedge Agreements to Interest Expense	(430)		111		(319)
Amortization of Net Retirement Plan Actuarial (Gain)	(96)		25		(71)
Amortization of Net Retirement Plan Prior Service Cost	83		(22)		61
Other Comprehensive Income	$	6,648	$	(1,715)	$	4,933

2024
Net Unrealized Securities Holding (Loss) on Securities Available-for-Sale Arising During the Period	$	(2,062)	$	532	$	(1,530)
Net Unrealized Gain on Cash Flow Swap	3,221		(831)		2,390
Reclassification of Net Unrealized (Gain) on Cash Flow Hedge Agreements to Interest Expense	(213)		55		(158)


Amortization of Net Retirement Plan Actuarial (Gain)	(66)		16		(50)
Amortization of Net Retirement Plan Prior Service Cost	69		(19)		50
Other Comprehensive Income	$	949	$	(247)	$	702


Changes in Accumulated Other Comprehensive (Loss) Income by Component (1)

	Unrealized Loss on Available-for-Sale Securities		Unrealized Gain on Cash Flow Swap		Defined Benefit Plan Items				Total
					Net Actuarial Loss		Net Prior Service Cost


For the quarter-to-date periods ended:
December 31, 2024	$	(27,292)	$	4,677	$	4,927	$	(765)	$	(18,453)
Other comprehensive income or loss before reclassifications	6,416		(1,154)		—		—		5,262
Amounts reclassified from accumulated other comprehensive income or loss	—		(319)		(71)		61		(329)
Net current-period other comprehensive income or loss	6,416		(1,473)		(71)		61		4,933

March 31, 2025	$	(20,876)	$	3,204	$	4,856	$	(704)	$	(13,520)

December 31, 2023	$	(31,648)	$	1,711	$	(2,839)	$	(640)	$	(33,416)
Other comprehensive income or loss before reclassifications	(1,530)		2,390		—		—		860
Amounts reclassified from accumulated other comprehensive income or loss	—		(158)		(50)		50		(158)
Net current-period other comprehensive income or loss	(1,530)		2,232		(50)		50		702

March 31, 2024	$	(33,178)	$	3,943	$	(2,889)	$	(590)	$	(32,714)


Reclassifications Out of Accumulated Other Comprehensive Income or Loss

Details about Accumulated Other Comprehensive Income or Loss Components	Amounts Reclassified from Accumulated Other Comprehensive Income or Loss			Affected Line Item in the Statement Where Net Income Is Presented

For the quarter-to-date periods ended:

March 31, 2025





Reclassification of Net Unrealized Loss on Cash Flow Hedge Agreements to Interest Expense	$	430		Interest expense
Amortization of defined benefit pension items:
Prior-service costs	(83)		(1)	Salaries and Employee Benefits
Actuarial gain	96		(1)	Salaries and Employee Benefits
	443			Total before Tax
	(114)			Provision for Income Taxes
Total reclassifications for the period	$	329		Net of Tax



March 31, 2024
Reclassification of Net Unrealized Gain on Cash Flow Hedge Agreements to Interest Expense	$	213		Interest expense
Amortization of defined benefit pension items:
Prior-service costs	$	(69)	(1)	Salaries and Employee Benefits
Actuarial gain	66		(1)	Salaries and Employee Benefits
	210			Total before Tax
	(52)			Provision for Income Taxes
Total reclassifications for the period	$	158		Net of Tax



































(1) These accumulated other comprehensive gain or loss components are included in the computation of net periodic pension cost.


	Restricted Stock Awards	Weighted Average Grant Date Fair Value

Outstanding at January 1, 2025	21,818	24.54

Granted	43,250	27.50
Vested	—	—
Forfeited	—	—
Outstanding at March 31, 2025	65,068	26.51


	Shares	Weighted Average Exercise Price

Outstanding at January 1, 2025	246,453	$	29.50

Exercised	(5,144)	20.09
Forfeited	(2,584)	19.99
Outstanding at March 31, 2025	238,725	29.80

Vested at Period-End	209,504	29.47
Expected to Vest	29,221	32.17


	Employees'		Select Executive		Postretirement
	Pension		Retirement		Benefit
	Plan		Plan		Plans
Net Periodic Benefit Cost
For the Three Months Ended March 31, 2025:
Service Cost 1	$	400	$	26	$	11
Interest Cost (Benefit) 2	584		72		79
Expected Return on Plan Assets 2	(1,009)		—		—
Amortization of Prior Service Cost 2	47		10		26
Amortization of Net (Gain) 2	—		—		(96)
Net Periodic Cost	$	22	$	108	$	20

Plan Contributions During the Period	$	—	$	120	$	57

For the Three Months Ended March 31, 2024:
Service Cost 1	$	466	$	17	$	15
Interest Cost 2	525		158		81
Expected Return on Plan Assets 2	(932)		—		—
Amortization of Prior Service Cost 2	33		10		26
Amortization of Net Loss (Gain) 2	—		21		(87)
Net Periodic Cost	$	92	$	206	$	35

Plan Contributions During the Period	$	—	$	127	$	27












Estimated Future Contributions in the Current Fiscal Year	$	—	$	360	$	172


Earnings Per Share
	Three Months Ended
	March 31, 2025		March 31, 2024
Earnings Per Share - Basic:
Net Income	$	6,310	$	7,660
Weighted Average Shares - Basic	16,665		16,865
Earnings Per Share - Basic	$	0.38	$	0.45

Earnings Per Share - Diluted:
Net Income	$	6,310	$	7,660
Weighted Average Shares - Basic	16,665		16,865
Dilutive Average Shares Attributable to Stock Options	8		2
Weighted Average Shares - Diluted	16,673		16,867
Earnings Per Share - Diluted	$	0.38	$	0.45


Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis
			Fair Value Measurements at Reporting Date Using:
	Fair Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Fair Value of Assets and Liabilities Measured on a Recurring Basis:
March 31, 2025
Assets:
Securities Available-for Sale:
U.S. Treasuries	$	99,499	$	99,499	$	—	$	—
U.S. Government & Agency Obligations	54,492		—		54,492		$	—
State and Municipal Obligations	240		—		240		—
Mortgage-Backed Securities	290,522		—		290,522		—
Corporate and Other Debt Securities	991		—		991		—
Total Securities Available-for-Sale	445,744		99,499		346,245		—
Equity Securities	5,372		—		5,372		—
Total Securities Measured on a Recurring Basis	451,116		99,499		351,617		—
Derivative Assets	10,418		—		10,418		—
Total Measured on a Recurring Basis	$	461,534	$	99,499	$	362,035	$	—
Liabilities:
Derivative Liabilities	9,450		—		9,450		—
Total Measured on a Recurring Basis	$	9,450	$	—	$	9,450	$	—
December 31, 2024
Assets:
Securities Available-for Sale:
U.S. Treasuries	$	98,070	$	98,070	$	—	$	—
U.S. Government & Agency Obligations	69,214		—		69,214		—
State and Municipal Obligations	240		—		240		—
Mortgage-Backed Securities	294,608		—		294,608		—
Corporate and Other Debt Securities	979		—		979		—
Total Securities Available-for-Sale	463,111		98,070		365,041		—
Equity Securities	5,055		—		5,055		—
Total Securities Measured on a Recurring Basis	468,166		98,070		370,096		—
Derivative Assets	12,659		—		12,659		—
Total Measured on a Recurring Basis	$	480,825	$	98,070	$	382,755	$	—
Liabilities:
Derivative Liabilities	$	8,638	$	—	$	8,638	$	—
Total Measured on a Recurring Basis	$	8,638	$	—	$	8,638	$	—


Schedule of Fair Values by Balance Sheet Grouping
					Fair Value Hierarchy
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
March 31, 2025
Cash and Cash Equivalents	$	301,446	$	301,446	$	301,446	$	—	$	—
Securities Available-for-Sale	445,744		445,744		99,499		346,245		—
Securities Held-to-Maturity	97,492		96,335		—		72,542		23,793
Equity Securities	5,372		5,372		—		5,372		—
Federal Home Loan Bank and Federal Reserve Bank Stock	4,353		4,353		—		4,353		—
Net Loans	3,379,097		3,188,360		—		—		3,188,360
Accrued Interest Receivable	14,773		14,773		—		14,773		—
Derivative Assets	10,418		10,418				10,418
Deposits	3,968,165		3,965,110		—		3,965,110		—


Borrowings	8,600		8,482		—		8,482		—
Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts	20,000		19,710		—		19,710		—
Accrued Interest Payable	5,418		5,418		—		5,418		—
Derivative Liabilities	9,450		9,450		—		9,450		—

December 31, 2024
Cash and Cash Equivalents	$	154,546	$	154,546	$	154,546	$	—	$	—
Securities Available-for-Sale	463,111		463,111		98,070		365,041		—
Securities Held-to-Maturity	98,261		96,586		—		75,262		21,324
Equity Securities	5,055		5,055				5,055
Federal Home Loan Bank and Federal Reserve Bank Stock	4,353		4,353		—		4,353		—
Net Loans	3,360,943		3,137,721		—		—		3,137,721
Accrued Interest Receivable	13,229		13,229		—		13,229		—
Derivative Assets	12,659		12,659		—		12,659		—
Deposits	3,827,930		3,824,699		—		3,824,699		—

Borrowings	8,600		8,386		—		8,386		—

Junior Subordinated Obligations Issued to Unconsolidated Subsidiary Trusts	20,000		20,000		—		20,000		—
Accrued Interest Payable	5,099		5,099		—		5,099		—
Derivative Liabilities	8,638		8,638		—		8,638		—


		Three Months Ended
Finance Lease Amounts:	Classification	March 31, 2025			March 31, 2024
Right-of-Use Assets	Premises and Equipment, Net	$	4,239		$	4,416
Lease Liabilities	Finance Leases	4,979			5,053

Operating Lease Amounts:
Right-of-Use Assets	Other Assets	$	4,834		$	4,790
Lease Liabilities	Other Liabilities	5,029			4,997

Other Information:

Cash Paid For Amounts Included In The Measurement Of Lease Liabilities:
Operating Outgoing Cash Flows From Finance Leases		$	47		$	48
Operating Outgoing Cash Flows From Operating Leases		188			155
Financing Outgoing Cash Flows From Finance Leases		26			13
Right-of-Use Assets Obtained In Exchange For New Finance Lease Liabilities		—			—
Right-of-Use Assets Obtained In Exchange For New Operating Lease Liabilities		376			—
Weighted-average Remaining Lease Term - Finance Leases (Yrs.)		25.09			26.04
Weighted-average Remaining Lease Term - Operating Leases (Yrs.)		9.86			11.06
Weighted-average Discount Rate—Finance Leases		3.75		%	3.75		%
Weighted-average Discount Rate—Operating Leases		3.45		%	3.10		%


Lease cost information for Arrow's leases is as follows:
	Three Months Ended
	March 31, 2025		March 31, 2024
Lease Cost:
Finance Lease Cost:
Reduction of Right-of-Use Assets	$	44	$	44
Interest on Lease Liabilities	47		48
Operating Lease Cost	215		195
Short-term Lease Cost	9		10
Variable Lease Cost	37		75
Total Lease Cost	$	352	$	372


Future Lease Payments at March 31, 2025 are as follows:
	Operating Leases		Financing Leases
Twelve Months Ended:
3/31/2026	$	819	$	256
3/31/2027	760		268
3/31/2028	691		268
3/31/2029	642		268
3/31/2030	576		280
Thereafter	2,495		6,649
Total Undiscounted Cash Flows	$	5,983	$	7,989
Less: Net Present Value Adjustment	954		3,010
Lease Liability	$	5,029	$	4,979


Derivatives Not Designated as Hedging Instruments - Interest Rate Swap Agreements
	March 31, 2025		December 31, 2024
Fair value adjustment included in other assets	$	4,538	$	5,520
Fair value adjustment included in other liabilities	4,538		5,520
Notional amount	103,846		104,897


Derivatives Designated as Hedging Instruments - Fair Value Agreements
	March 31, 2025		December 31, 2024
Fair value adjustment included in other assets	$	—	$	—
Fair value adjustment included in other liabilities	3,332		2,263
Notional amount	300,000		300,000