#United States #Arrow Financial #Glens Falls #AROW

Arrow Financial Corporation Reports Fourth Quarter 2024 Results

Arrow Financial Corporation, trading under the symbol AROW, recently disclosed its financial results for the fourth quarter of 2024. For this period, the company recorded a net income of $4.5 million or $0.27 per diluted share, showing a decrease from the $7.7 million or $0.46 per share reported in the same quarter of the previous year. Overall, the total net income for the year reached $29.7 million, maintaining its earnings per share at $1.77 for 2024 compared to $30.1 million in 2023.

Dividend Declaration and Non-Core Items

The Board of Directors has announced a cash dividend of $0.28 per share, which will be payable on February 24, 2025, to all shareholders recorded by February 10, 2025. While the reported figures reflect certain non-core charges, significant one-time items in the fourth quarter included $3.0 million relating to the repositioning of its securities portfolio, $0.7 million for write-offs involving legacy branding, and $0.5 million related to legal and compliance activities during its bank unification process.

Prior to this quarter, Arrow also recorded additional non-recurring expenses of $0.4 million associated with the acquisition of its Whitehall branch.

Overview from the CEO

David S. DeMarco, Arrow's President and CEO, characterized 2024 as a transformational year, noting the successful unification of its subsidiary banks under the Arrow Bank branding. Emphasizing the commitment to community service, he mentioned that the company's team has been diligently serving customers and supporting their communities. He highlighted a mid-single-digit growth in loans and an expansion in the net interest margin, laying the groundwork for better profitability in 2025.

Key Performance Metrics

Fourth Quarter Highlights:

• - Reported Net Income: $4.5 million, equating to $0.27 EPS
• - Core Net Income: $7.8 million, or $0.47 EPS
• - Non-Core Charges: Approximately $4.2 million impacting results
• - Net Interest Margin: Improved to 2.83% from 2.78% in the previous quarter
• - Loan Growth: $59 million, marking a 7.0% annualized growth rate

2024 Annual Highlights:

• - Total Net Income: $29.7 million or $1.77 EPS
• - Core Net Income: $34.4 million, resulting in a $2.05 EPS
• - Loan Growth: Increased by $185 million or 5.8% year-over-year
• - Return on Average Assets: Recorded at 0.70%, slightly affected by non-core items
• - Arrow was honored as one of the Piper Sandler Sm-All Stars Class of 2024, recognizing its remarkable performance among small-cap financial institutions.

Financial Statements Summary

The financial data reported for the fourth quarter indicates:

• - A deterioration in net income from $9.0 million in the preceding quarter.
• - A notable increase in net interest income, now reported at $29.7 million for Q4, a $1.2 million increase from the prior quarter.
• - The provision for credit losses arrived at $2.9 million, driven by robust loan growth and changes in portfolio composition, maintaining low net charge-offs at 0.06% for the quarter.

Year-End Financial Position

At year-end 2024, total assets for Arrow reached $4.3 billion, indicating a growth attributed to increasing loan amounts. Meanwhile, total deposits surged to $3.8 billion, showing significant resilience amid competitive pressure on rates.

Despite the challenges, Arrow Financial Corporation is positioned strongly for future growth, with plans to leverage its recent unification and acquisitions to enhance operational efficiencies and shareholder value.