Arrow Financial (US:AROW)2025-11-06 17:33Financial Performance - Net income for the third quarter of 2025 was $12.825 million, a significant increase of 18.68% compared to $10.805 million in the previous quarter[182]. - Net income for Q3 2025 was $12.8 million, up from $10.8 million in Q2 2025, driven by a $1.6 million increase in net interest income and a $1.1 million increase in non-interest income[188]. - Net income for the three months ended September 30, 2025, was $12,825 thousand, a 42.9% increase from $8,975 thousand in the same period of 2024[270]. - For the nine months ended September 30, 2025, net income was $29,940 thousand, an 18.6% increase from $25,239 thousand in the same period of 2024[278]. Earnings and Income Metrics - Diluted earnings per share rose to $0.77, up 45.3% from $0.53 year-over-year[270]. - Year-to-date Net Interest Income for the period ended September 30, 2025, was $98,021,000, compared to $82,045,000 for the same period in 2024[211]. - Net interest income for the quarter ended September 30, 2025, was $34,131,000, an increase from $32,533,000 in the previous quarter[209]. - Total non-interest income for the third quarter of 2025 was $8,716 thousand, reflecting a 7.2% increase from $8,133 thousand in the prior year[273]. Asset and Equity Growth - Total stockholders' equity increased to $417.687 million as of September 30, 2025, up from $408.506 million at June 30, 2025, representing a growth of 0.29%[182]. - Stockholders' equity increased to $417.7 million at September 30, 2025, a 4.2% rise from $400.9 million at December 31, 2024[199]. - Total assets reached $4.6 billion as of September 30, 2025, reflecting a $172.4 million increase, or 3.9%, from June 30, 2025[194]. - As of September 30, 2025, total assets increased to $4.59 billion, up by $280.8 million or 6.5% from December 31, 2024[213]. Loan and Deposit Information - Total loans were $3.4 billion as of September 30, 2025, with loan growth of $17.3 million primarily in residential real estate loans[196]. - Total deposits rose to $4.10 billion, an increase of $272.1 million or 7.1% from December 31, 2024, driven by a $125 million addition of brokered CDs[214]. - Noninterest-bearing deposits accounted for 18.8% of total deposits as of September 30, 2025, compared to 18.4% at the end of 2024[214]. - The total loans as of September 30, 2025, reached $3,424,784,000, an increase from $3,394,541,000 as of December 31, 2024[228]. Interest Income and Margins - Net interest income on a GAAP basis was $34.131 million for Q3 2025, an increase of 4.91% from $32.533 million in Q2 2025[183]. - The net interest margin improved to 3.24% for Q3 2025, compared to 3.16% in Q2 2025, indicating a positive trend in interest income generation[183]. - The Net Interest Margin improved to 3.22% for the quarter ended September 30, 2025, up from 3.15% in the previous quarter[209]. - The annualized yield on total loans improved to 5.43% for the quarter ended September 30, 2025, compared to 5.30% for the quarter ended December 31, 2024[230]. Risk Management and Credit Quality - The allowance for credit losses was $34.2 million, representing 0.99% of loans outstanding, stable compared to previous periods[204]. - Nonperforming loans decreased to $6.3 million, or 0.18% of period-end loans, down from 0.62% at December 31, 2024[205]. - The provision for credit losses for Q3 2025 was $0.8 million, up from $0.6 million in Q2 2025, influenced by charge-offs and loan balance growth[243]. - Nonperforming assets decreased to $6.7 million as of September 30, 2025, down from $21.5 million at December 31, 2024, and $22.3 million at September 30, 2024[245]. Operational Efficiency - The efficiency ratio improved to 59.56% from 65.59%, indicating better cost management[276]. - The efficiency ratio improved to 63.06% in 2025 from 67.10% in 2024, reflecting a decrease of 4.04% or 6.0%[283]. - The average balance of loans was $3,424,784 thousand with an interest rate of 5.43% for the quarter ended September 30, 2025, compared to $3,329,873 thousand at 5.27% in the same quarter of 2024[210]. Regulatory Capital and Compliance - Arrow Bank's Common Equity Tier 1 (CET1) capital ratio was 13.07% as of September 30, 2025, significantly above the minimum requirement of 4.5%[253]. - Arrow Bank qualified as "well-capitalized" under the federal banking regulatory standards as of September 30, 2025[253]. - Arrow issued $20 million of Junior Subordinated Obligations, which will continue to qualify as Tier 1 regulatory capital until maturity or redemption[241].