Arrow Financial Corporation reported a significant increase in its financial performance for the third quarter of 2025, with net income rising to $12.8 million, a 42.9% increase from $9.0 million in the same quarter of the previous year. This growth was driven by a 20% increase in net interest income, which reached $34.1 million, up from $28.4 million year-over-year. The company's total interest and dividend income also rose to $53.6 million, compared to $49.4 million in the prior year, while interest expense decreased to $19.5 million from $21.0 million, reflecting effective management of deposit rates.
In terms of overall financial health, Arrow's total assets increased to $4.6 billion as of September 30, 2025, marking a 6.5% rise from $4.3 billion at the end of 2024. The growth in assets was primarily attributed to a seasonal surge in deposits, which totaled $4.1 billion, up 7.1% from the previous year. The company also reported a modest increase in its loan portfolio, which reached $3.4 billion, reflecting a 1.4% growth driven by residential real estate and commercial loans.
Arrow's strategic developments included the unification of its former subsidiary banks into a single entity, Arrow Bank National Association, effective December 31, 2024. This consolidation aims to streamline operations and enhance service delivery. Additionally, the company has been actively managing its investment portfolio, with total investments increasing to $558.4 million, up 5.7% from the previous quarter, driven by new purchases and maturities.
Operationally, Arrow reported a decrease in nonperforming loans to $6.3 million, representing 0.18% of total loans, down from 0.62% at the end of 2024. The allowance for credit losses stood at $34.2 million, or 0.99% of loans, consistent with the previous quarter. The company continues to maintain a strong capital position, with stockholders' equity increasing to $417.7 million, a 4.2% rise from the end of 2024, supported by retained earnings and comprehensive income.
Looking ahead, Arrow Financial Corporation remains optimistic about its growth trajectory, supported by a solid capital base and effective risk management strategies. The company is well-positioned to navigate potential market fluctuations and capitalize on opportunities in its core banking operations, while continuing to focus on enhancing shareholder value through prudent financial management and strategic initiatives.
About ARROW FINANCIAL CORP
Arrow Financial Corporation is a New York-based bank holding company focused on providing a range of commercial and consumer banking services through its unified subsidiary, Arrow Bank. With total assets of approximately $4.6 billion, Arrow targets small to mid-sized businesses and consumers in upstate New York and Vermont. The company emphasizes community engagement, financial literacy, and sustainable practices, while also offering investment advisory and insurance services through its subsidiaries.
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