Arrow Financial (AROW) AI Stock Analysis

• Market Cap: $422.22M
• Dividend Yield: 4.42%
• Average Volume (3M): 41.05K
• Price to Earnings (P/E): 14.9
• Beta (1Y): 0.73
• Revenue Growth: 11.46%
• EPS Growth: -1.07%
• Country: US
• Employees: 580
• Sector: Financial
• Sector Strength: 73
• Industry: Banks - Regional
• EPS (TTM): 0.38
• Shares Outstanding: 16,675,339
• 10 Day Avg. Volume: 41,087
• 30 Day Avg. Volume: 41,049
• PEG Ratio: -33.75
• Price to Book (P/B): 1.87
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.62
• Enterprise Value/Market Cap: 1.61
• Enterprise Value/Revenue: 0.77
• Enterprise Value/Gross Profit: 5.03
• Enterprise Value/Ebitda: 3.85
• 1Y Price Target: $28.00
• Price Target Upside: 10.58% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 76 Outperform
• Price Target: $29.00 ▲(14.53%Upside)

Arrow Financial's overall stock score of 76 reflects its solid financial performance and positive corporate events. While technical analysis presents a stable outlook, the stock's valuation is attractive due to its reasonable P/E ratio and high dividend yield. The recent corporate events, including strong earnings and strategic initiatives, significantly bolster the score.

Arrow Financial Business Overview & Revenue Model

Company Description

Arrow Financial Corporation (AROW) is a multi-bank holding company headquartered in Glens Falls, New York. It operates in the financial services sector, primarily through its two banking subsidiaries, Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company. The company offers a range of financial products and services, including commercial and consumer banking, wealth management, and trust services, catering to individual, business, and municipal clients in northeastern New York.

How the Company Makes Money

Arrow Financial Corporation generates revenue primarily through the interest income from its loan portfolio and investments. The company's key revenue streams include interest earned on commercial and consumer loans, residential mortgages, and investment securities. Additionally, it earns non-interest income from service charges on deposit accounts, wealth management and trust services, and other banking-related fees. Arrow Financial benefits from its strategic geographical presence and community banking model, which fosters strong customer relationships and contributes to a stable deposit base. The company's performance is also influenced by its prudent risk management practices and its ability to adapt to changing market conditions.

Arrow Financial Financial Statement Overview

Summary

Arrow Financial demonstrates a strong financial foundation with consistent revenue growth and prudent debt management. The income statement, balance sheet, and cash flow indicate stable operations, though there are minor declines in some profitability ratios and cash flow growth fluctuations.

Income Statement

Arrow Financial shows a generally positive income statement performance. The company has maintained a consistent gross profit margin, with slight improvements in total revenue over recent years. The net profit margin is healthy, although it slightly decreased in the TTM period. Revenue growth is evident with a steady upward trajectory, indicating robust market presence and operational efficiency. However, a notable decline in EBIT margin from its 2022 levels suggests increased operational costs or other pressures impacting profitability.

Balance Sheet

The balance sheet of Arrow Financial reflects a stable financial position. The debt-to-equity ratio is low, indicating prudent leverage management and a solid equity base. The equity ratio remains strong, showing a healthy proportion of equity financing relative to total assets. Return on equity is positive, though it has seen a slight decline in the TTM period, suggesting room for improvement in generating returns on shareholder investments.

Cash Flow

Arrow Financial's cash flow analysis reveals a stable operating cash flow with positive free cash flow, demonstrating effective cash management. However, the free cash flow growth rate shows fluctuations, indicating potential volatility in cash generation. The operating cash flow to net income ratio remains robust, underscoring efficient conversion of earnings into cash. Despite these strengths, the lower free cash flow to net income ratio in the latest period highlights potential challenges in maintaining cash reserves.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
226.74M	223.07M	162.56M	160.55M	147.92M	144.55M
	Gross Profit
135.11M	134.63M	130.57M	144.44M	142.45M	122.54M
	EBIT
40.07M	37.36M	37.52M	62.91M	64.40M	51.86M
	EBITDA
40.98M	42.72M	44.24M	70.46M	72.23M	58.73M
	Net Income Common Stockholders
28.36M	29.71M	30.07M	48.80M	49.86M	40.83M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
747.19M	617.66M	640.30M	638.15M	1.02B	746.28M
	Total Assets
4.45B	4.31B	4.17B	3.97B	4.03B	3.69B
	Total Debt
33.58M	33.60M	71.57M	106.92M	70.17M	87.70M
	Net Debt
-267.87M	-120.94M	-70.97M	42.26M	-387.53M	-293.29M
	Total Liabilities
4.04B	3.91B	3.79B	3.62B	3.66B	3.35B
	Stockholders Equity
404.41M	400.90M	379.77M	353.54M	371.19M	334.39M
Cash Flow		Free Cash Flow
28.47M	28.87M	13.50M	45.46M	61.07M	37.18M
	Operating Cash Flow
34.19M	34.47M	20.58M	59.71M	68.21M	42.31M
	Investing Cash Flow
-46.17M	-88.95M	-82.65M	-393.06M	-274.60M	-187.32M
	Financing Cash Flow
30.96M	66.49M	139.95M	-59.69M	283.10M	455.77M

Arrow Financial Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 25.32
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AROW, the sentiment is Negative. The current price of 25.32 is below the 20-day moving average (MA) of 25.93, above the 50-day MA of 25.22, and below the 200-day MA of 27.38, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 44.89 is Neutral, neither overbought nor oversold. The STOCH value of 63.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AROW.

Arrow Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AROW	76 Outperform	$422.22M	14.92	7.25%	4.42%	11.46%	-1.07%
ACNB	74 Outperform	$430.57M	14.14	7.44%	3.31%	22.17%	-15.57%
SHBI	74 Outperform	$487.93M	9.85	9.27%	3.28%	15.26%	160.27%
ALRS	71 Outperform	$531.41M	17.33	6.27%	3.82%	40.06%	145.33%
BCAL	70 Outperform	$466.75M	32.42	4.21%	―	60.34%	-62.91%
HONE	66 Neutral	$483.48M	18.00	4.44%	3.21%	5.42%	67.14%
Sector *	64 Neutral	$12.77B	9.71	7.85%	78.05%	12.07%	-7.97%

Arrow Financial Corporate Events

Arrow Financial Holds 2025 Annual Shareholders Meeting

Arrow Financial Corporation held its 2025 Annual Meeting of Shareholders on June 4, 2025, where key decisions were made regarding the company’s governance and financial oversight. Shareholders elected new directors for various terms, approved the 2024 executive compensation, and ratified Crowe LLP as the independent auditor for the fiscal year ending December 31, 2025, with a quorum representing 77.06% of outstanding shares.

The most recent analyst rating on (AROW) stock is a Hold with a $32.00 price target. To see the full list of analyst forecasts on Arrow Financial stock, see the AROW Stock Forecast page.

Arrow Financial Reports Strong Q1 2025 Performance

Arrow Financial Corporation held its annual meeting on June 4, 2025, where it presented its financial performance and strategic initiatives to shareholders. The company reported solid financial results for 2024, including loan growth and an expanded net interest margin, despite challenges such as unification expenses and repositioning of the securities portfolio. In the first quarter of 2025, Arrow Financial achieved record net interest income and improved return on average assets, while continuing to focus on growth through strategic share repurchases and strengthening its management team.

The most recent analyst rating on (AROW) stock is a Hold with a $32.00 price target. To see the full list of analyst forecasts on Arrow Financial stock, see the AROW Stock Forecast page.

Arrow Financial Reports Strong Q1 2025 Earnings

Arrow Financial Corporation reported a net income of $6.3 million for the first quarter of 2025, an increase from $4.5 million in the previous quarter, with earnings per share rising to $0.38. The company declared a quarterly cash dividend of $0.28 per share and authorized a $5 million increase in its share repurchase program. Despite a $3.75 million reserve related to a commercial real estate loan, Arrow’s core profitability improved, supported by strong margin expansion and loan growth. The company is progressing with its strategic initiatives, including expanding its Corporate Banking Team and finalizing the unification of its banking subsidiaries.

Arrow Financial Announces Upcoming CCO Retirement

Arrow Financial Corporation announced the retirement of David D. Kaiser, Chief Credit Officer, effective June 30, 2025. Mr. Kaiser, who has been instrumental in building Arrow’s strong credit culture, will have his responsibilities reassigned to experienced executives within the company, ensuring continuity in its credit and lending operations.

Arrow Financial to Present at 2025 Investor Day

Arrow Financial Corporation is set to participate in an Investor Day on March 20, 2025, in Chicago, Illinois, where it will present a mid-quarter update for the first quarter of 2025. This update includes select financial information and is intended for meetings with bank stock analysts and investors. The company has shown a solid start to 2025 with continued net interest margin expansion, strong loan origination rates, and a tangible book value of $22.72 per share as of February 28, 2025. Additionally, Arrow has repurchased approximately $3.4 million of stock and resolved a previously disclosed material weakness.