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Arrow Financial Corporation: Fourth Quarter Report 2025

Arrow Financial Corporation (NasdaqGS® – AROW) has delivered an impressive financial performance for the fourth quarter of 2025, announcing a net income of $14 million or $0.85 per share. This represents a substantial increase from the $4.5 million or $0.27 per share recorded during the same period in 2024. The highlight of the year ended December 31, 2025, is a total net income of $44 million, which translates to $2.65 per share, compared to $29.7 million and $1.77 per share in the previous year.

The board has also declared a progressive quarterly cash dividend of $0.30 per share, marking a 3.4% increase from the prior fourth quarter dividend, which stood at $0.29 per share. This dividend is set to be paid on February 25, 2026, to shareholders on record by February 11, 2026.

Comments from Leadership

David S. DeMarco, President and CEO of Arrow, remarked, "We concluded 2025 with record operating results, driven by a record net interest income of $35.1 million and achieving a net interest margin of 3.24%—an increase from 3.22% in the previous quarter. Our tangible book value per share experienced remarkable growth, rising to $24.71, reflecting a 3.6% increase from the last quarter."

DeMarco emphasized the successful execution of the bank's strategic plans, primarily following the system integration of its former subsidiary banks, marking a pivotal transformation for Arrow Bank. He proudly noted, "Our EPS growth of 50% in 2025 demonstrates our strong momentum as we approach our 175th anniversary. We are optimistic about maintaining this trajectory in 2026."

Quarterly Highlights

Some key metrics from the latest earnings release include:

• - Record net interest income of $35.1 million.
• - Elevating net interest margin to 3.24%, up from 3.22%.
• - A substantial return on average assets at 1.24%.
• - Low net charge-offs maintained at 0.08% (annualized) for the quarter.

Annual Performance and Earnings Breakdown

For the fiscal year of 2025, Arrow Financial Corporation highlighted several crucial achievements:

• - Net income reached $44 million with an EPS of $2.65.
• - Net interest margin improved significantly to 3.17%, reflecting strong income strategies compared to 2.72% in 2024.
• - The tangible book value increased by 10.3% from $22.40 in 2024 to $24.71 in 2025.

Total assets reached $4.4 billion, marking a 3.2% increase from the previous year, primarily driven by loan growth and increased deposits.

Cost Management and Efficiency

On a cost basis, Arrow Financial reported non-interest expenses for the fourth quarter totaling $25.8 million, consistent with the previous year's performance. However, over the entire year, these expenses increased by 5.8% to reach $102.9 million, primarily due to rising salaries and benefits, reflective of inflationary pressures and increased employee costs.

Despite these expenses, the efficiency ratio improved notably, illustrating effective management and operational strategies as Arrow strives for sustainable growth. DeMarco added, "Through strategic planning and exceptional team execution, we are committed to maximizing shareholder value while delivering outstanding service to our customers."

Future Outlook

As Arrow Financial gears up for another year, its strategic initiatives, financial health, and clear commitment to returning value to shareholders through dividends and growth initiatives signal a conducive environment for continued success. Arrow's leadership remains optimistic about navigating the evolving financial landscape and building upon their impressive foundation.

For more information or to view their detailed quarterly and annual financial statements, visit Arrow Financial’s Investor Relations.