Arrow Financial (AROW) AI Stock Analysis

• Market Cap: $456.57M
• Dividend Yield: 4%
• Average Volume (3M): 45.70K
• Price to Earnings (P/E): 16.1
• Beta (1Y): 0.81
• Revenue Growth: 11.46%
• EPS Growth: -1.07%
• Country: US
• Employees: 580
• Sector: Financial
• Sector Strength: 81
• Industry: Banks - Regional
• EPS (TTM): 0.38
• Shares Outstanding: 16,675,339
• 10 Day Avg. Volume: 53,979
• 30 Day Avg. Volume: 45,697
• 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: 1.49
• Enterprise Value/Revenue: 0.77
• Enterprise Value/Gross Profit: 5.03
• Enterprise Value/Ebitda: 3.85
• 1Y Price Target: $28.00
• Price Target Upside: 2.26% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 75 Outperform
• Price Target: $29.00 ▲(5.92%Upside)

Arrow Financial demonstrates a solid financial and operational foundation, bolstered by positive corporate events and a fair valuation. The mixed technical indicators suggest a stable but cautious short-term outlook. The company's strategic growth initiatives and consistent dividend payments further enhance its attractiveness.

Arrow Financial Business Overview & Revenue Model

Company Description

Arrow Financial Corporation, a bank holding company, provides commercial and consumer banking, and financial products and services. The company's deposit products include demand deposits, interest-bearing checking accounts, savings deposits, time deposits, and other time deposits. Its lending activities comprise commercial loans, such as term loans, time notes, and lines of credit; and commercial real estate loans to finance real estate purchases, refinancing, expansions, and improvements to commercial properties, as well as commercial construction and land development loans to finance projects. The company's lending activities also include consumer installment loans to finance personal expenditures, personal lines of credit, overdraft protection, and automobile loans; and residential real estate loans, fixed home equity loans, and home equity lines of credit for consumers to finance home improvements, debt consolidation, education, and other uses. In addition, it maintains an indirect lending program; and sells residential real estate loan originations into the secondary market. Further, the company provides retirement planning, trust, and estate administration services for individuals; and pension, profit-sharing, and employee benefit plan administration services for corporations. Additionally, it offers insurance agency services comprising group health care policies and life insurance, and property and casualty insurance products; and investment advisory services to its proprietary mutual funds, as well as holds a real estate investment trust. The company operates in the northeastern region of New York State in Warren, Washington, Saratoga, Essex, Clinton, Rensselaer, Albany, and Schenectady counties, as well as surrounding areas. It owns 26 branch banking offices; and leases 12 branch banking offices, as well as two residential loan origination offices. Arrow Financial Corporation was founded in 1851 and is headquartered in Glens Falls, New York.

How the Company Makes Money

Arrow Financial Corporation generates revenue primarily through its banking operations, which include interest income from loans and investment securities, as well as non-interest income from various banking services. The company earns interest income by extending loans to individuals and businesses, which include residential and commercial real estate loans, consumer loans, and business loans. Additionally, Arrow Financial invests in securities to generate interest income. Non-interest income is derived from service charges on deposit accounts, fees from wealth management and trust services, and other banking-related fees. Key revenue streams include net interest income, which is the difference between the interest earned on loans and investments and the interest paid on deposits and borrowed funds, as well as fee-based income from ancillary financial services.

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
EBITDA	40.98M	42.72M	44.24M	70.46M	72.23M	58.73M
Net Income	28.36M	29.71M	30.07M	48.80M	49.86M	40.83M
Balance Sheet
Total Assets	4.45B	4.31B	4.17B	3.97B	4.03B	3.69B
Cash, Cash Equivalents and Short-Term Investments	747.19M	617.66M	640.30M	638.15M	1.02B	746.28M
Total Debt	33.58M	33.60M	71.57M	106.92M	70.17M	87.70M
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: Positive
• Last Price: 27.38
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AROW, the sentiment is Positive. The current price of 27.38 is above the 20-day moving average (MA) of 26.29, above the 50-day MA of 25.90, and above the 200-day MA of 27.24, indicating a bullish trend. The MACD of 0.51 indicates Negative momentum. The RSI at 62.70 is Neutral, neither overbought nor oversold. The STOCH value of 78.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AROW.

Arrow Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SHBI	76 Outperform	$552.01M	11.14	9.27%	2.89%	15.26%	160.27%
AROW	75 Outperform	$456.57M	16.14	7.25%	4.00%	11.46%	-1.07%
ACNB	67 Neutral	$459.79M	15.10	7.44%	3.04%	22.16%	-15.57%
BCAL	66 Neutral	$532.54M	36.99	4.21%	―	60.34%	-62.91%
ALRS	65 Neutral	$579.35M	18.89	6.27%	3.68%	40.06%	145.33%
HONE	58 Neutral	$521.64M	19.43	4.44%	2.93%	6.65%	67.14%
Sector *	58 Neutral	HK$90.77B	5.06	-3.21%	5.22%	7.36%	-55.21%

Arrow Financial Corporate Events

Arrow Financial’s David Kaiser Retires, Begins Consultancy

Arrow Financial Corporation announced that David D. Kaiser, the former Senior Executive Vice President and Chief Credit Officer, retired from all his positions with the company and its subsidiaries as of June 30, 2025. Following his retirement, Kaiser entered into a six-month Professional Services Agreement with Arrow Financial starting July 1, 2025, where he will provide services as directed by the CEO, with compensation of $2,500 per month plus expenses, and the agreement can be terminated by either party with 30 days’ notice.

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 Hosts Virtual Investor Meetings June 2025

Arrow Financial Corporation is set to engage in virtual investor meetings on June 17 and 18, 2025, where they will present a Mid-2Q Update to current and potential investors. The company has shown strong net interest margin expansion through May 2025, with further growth expected, although at a moderated pace without additional rate cuts. The company’s disciplined pricing strategy has positively impacted core deposit rates, and they anticipate low single-digit loan growth for the fiscal year 2025. Additionally, Arrow Financial has been active in stock repurchases and maintains a strategic focus on mergers and acquisitions in branches, banks, wealth management, and insurance sectors.

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 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.