Arrow Financial Reports Q3 Net Income of $5.7M, Declares $0.30 Quarterly Dividend

Arrow Financial Corporation (NasdaqGS: AROW) reported unaudited financial results for the three-month period ended September 30, 2026. The company reported net income of $5.7 million for the third quarter, which translates to fully diluted earnings per share (EPS) of $0.31. This figure represents a decrease from the second quarter of 2026, when net income was $11.0 million and EPS was $0.66.

The decline in GAAP earnings was attributed to approximately $15.6 million in merger-related expenses ($0.66 per share) associated with the company's acquisition of Adirondack Bancorp, Inc. and Adirondack Bank, which closed on July 1, 2026. Excluding these one-time costs, the company reported a core EPS of $0.97 for the quarter.

Despite the GAAP dip, the company highlighted several operational metrics that improved following the acquisition. Net interest income increased by 35.6% to $48.7 million compared to the prior quarter. The net interest margin, on a fully taxable equivalent basis, expanded to 3.81%, up from 3.43% in the second quarter. Total assets grew to $5.5 billion as of September 30, 2026, an increase of $1.1 billion driven by the acquisition and higher cash balances.

On October 28, 2026, the Board of Directors declared a quarterly cash dividend of $0.30 per share. This dividend is payable on November 23, 2026, to shareholders of record as of November 11, 2026.

Regarding the acquisition, the company noted that it added approximately $600 million in loans and $900 million in deposits. Key purchase accounting items included a $26.7 million loan fair value discount, an allowance for credit losses of $5.7 million on acquired loans, and a core deposit intangible of $16.4 million. The company also purchased Skene Valley Agency, Inc., an independent insurance agency in Washington County, New York.

Arrow’s regulatory capital ratios remain strong. As of September 30, 2026, the Common Equity Tier 1 Capital Ratio was 11.63% and the Total Risk-Based Capital Ratio was 13.46%, both exceeding the regulatory “well capitalized” standards.