Fri, May 9, 2:15 PM (4 days ago)
**Arrow Financial Corporation (AROW) - Q1 2025 Financial Health and Performance Summary** **Revenue and Profit Margins:** - **Net Income:** $6.31 million, a decrease from $7.66 million in Q1 2024. - **Earnings per Share (EPS):** $0.38, down from $0.45 in Q1 2024. - **Return on Average Assets (ROA):** 0.59%, down from 0.73% in Q1 2024. - **Return on Average Equity (ROE):** 6.33%, down from 8.12% in Q1 2024. **Cash Flow:** - **Net Interest Income:** $31.36 million, up 18.5% from Q1 2024. - **Non-Interest Income:** $7.84 million, consistent with Q1 2024. - **Non-Interest Expense:** $26.05 million, up 8.5% from Q1 2024. **Quarterly Performance Discussion:** - **Net Income:** Decreased due to higher provision for credit losses and slight increase in non-interest expense. - **Net Interest Income:** Increased due to higher interest and dividend income, partially offset by higher interest expense. - **Non-Interest Income:** Consistent with Q1 2024, with increases in insurance commissions and net gain on securities. - **Non-Interest Expense:** Increased due to higher salaries, technology, and other operating expenses. **Trends and Uncertainties:** - **Loan Growth:** Moderate growth in commercial and residential real estate loans, with consumer loans remaining stable. - **Deposit Trends:** Increase in deposits due to seasonal municipal deposits and additional brokered CDs. - **Liquidity:** Strong liquidity position with significant borrowing capacity and cash balances. - **Credit Quality:** Stable credit quality with non-performing loans at 0.56% of total loans. **Future Operations Impact:** - **Economic Uncertainties:** Inflation and economic conditions may impact loan demand and credit quality. - **Interest Rate Sensitivity:** Arrow's balance sheet shows an inverse relationship between changes in prevailing rates and net interest income in the near term. - **Regulatory Capital:** Arrow continues to exceed all required minimum capital ratios, maintaining a strong capital position. **Summary:** Arrow Financial Corporation reported a decrease in net income for Q1 2025, primarily due to higher provision for credit losses and increased expenses. However, the company maintained strong liquidity and capital positions, with moderate loan growth and stable credit quality. Economic uncertainties and interest rate sensitivity remain key factors to monitor for future operations.