Arrow Financial (AROW) - 2024 Q4 - Annual Results

Financial Performance - Arrow reported a net income of $4.5 million, or$0.27 per share, for Q4 2024, down from $7.7 million and$0.46 per share in Q4 2023[2] - For the full year 2024, net income totaled $29.7 million, with EPS of$1.77, compared to $30.1 million and EPS of$1.77 in 2023[2] - The company reported a net income of $29.7 million for the year, with diluted earnings per share of$1.77[21] - Net income for the quarter ended December 31, 2024, was $4,470 million, a decrease of 50.2$8,975 million in the previous quarter[25] - Basic earnings per share (EPS) for the quarter was $0.27, down from$0.54 in the previous quarter, reflecting a decline of 50%[25] Loan and Asset Growth - Loan growth for Q4 2024 was $59 million, representing a 7.0$3.4 billion[4] - Total assets increased by $136.5 million, or 3.3$4.3 billion at year-end 2024, driven primarily by loan growth[12] - Total assets increased to $4.3 billion, up from$4.2 billion in the previous year, reflecting growth in loans and deposits[23] - Total loans increased to $3,394,541 million in Q4 2024, up from$3,212,908 million in Q4 2023, representing a growth of 5.66%[40] - Total assets reached $4,339,833 thousand as of December 31, 2024, compared to$4,159,313 thousand a year earlier, indicating a growth of 4.3%[32] Interest Income and Margin - The net interest margin improved to 2.83% in Q4 2024, compared to 2.78% in the prior quarter, and 2.72% for the full year, up from 2.65% in 2023[4][9] - Net interest income for the year was $111.7 million, an increase from$104.8 million in 2023, with a net interest margin reflecting competitive rate pressures[21] - Net interest income for the quarter ended December 31, 2024, was $29,687 thousand, an increase from$25,613 thousand in the same quarter of 2023, reflecting a year-over-year growth of 15.3%[32] - The net interest margin (tax-equivalent) for the quarter was 2.85%, up from 2.79% in the previous quarter, indicating improved efficiency in earning assets[29] - The Net Interest Spread was 2.21% for the quarter ended December 31, 2024, compared to 1.89% in the same quarter of 2023[32] Non-Interest Income and Expenses - Non-interest income for Q4 2024 was $4.2 million, a decrease from$8.1 million in the previous quarter, and total non-interest income for the year was $28.1 million, down 3.6$28.1 million for the year, slightly down from $29.1 million in 2023, impacted by a net loss on securities[21] - Non-interest expense for the year was$97.3 million, compared to $93.0 million in 2023, primarily due to increased salaries and technology expenses[21] Credit Quality and Losses - The provision for credit losses was$5.2 million for the year, an increase from $3.4 million in the prior year, with net charge-offs at 0.09$33.6 million at year-end 2024, representing 0.99% of loans outstanding, up from 0.97% at year-end 2023[12] - The allowance for credit losses at the end of the quarter was $33,598 million, compared to$31,265 million a year earlier, reflecting an increase of 7.43%[40] - The provision for credit losses for the quarter was $2,854 million, significantly higher than$525 million in Q4 2023, marking a substantial increase of 443.81%[40] - The net loans charged-off to average loans ratio for the quarter was 0.06%, up from 0.05% in the same quarter last year, suggesting a slight deterioration in loan performance[40] Shareholder Equity and Dividends - Total shareholders' equity rose to $400.9 million, an increase of$21.1 million or 5.6% from December 31, 2023, driven by net income of $29.7 million for the year[17] - Arrow declared a quarterly cash dividend of$0.28 per share, an increase of 3.7% from the previous dividend[4] - Total stockholders' equity increased to $400,901 million from$393,311 million in the previous quarter, a rise of 2.0%[28] - Stockholders' Equity increased to $393,696 thousand as of December 31, 2024, from$363,753 thousand a year earlier, representing an increase of 8.2%[32] Regulatory and Recognition - The Common Equity Tier 1 Capital Ratio was 12.71% and the Total Risk-Based Capital Ratio was 14.47%, significantly exceeding regulatory standards[17] - Arrow was named to the Piper Sandler Sm-All Stars: Class of 2024, recognizing it as one of the top 30 small-cap banks in the U.S.[17] - Common Equity Tier 1 Ratio decreased to 12.71% from 13.00% year-over-year, remaining above the required minimum of 7.00%[30] Operational Developments - The company completed the unification of its two subsidiary banks under the Arrow Bank brand and acquired a bank branch in Whitehall, New York, along with a local insurance agency[3] - Arrow's subsidiary banks maintained 5-Star Exceptional Performance ratings from Bauer Financial for multiple quarters[17]