Arrow Financial Q1 net income falls on merger costs

Overview

• U.S. regional bank reported Q1 net income and EPS down from prior quarter on merger costs

• Net interest income and margin rose, driven by lower funding costs and higher asset yields

• Loan growth slowed by severe winter weather; credit metrics remained strong

Outlook

• Company expects Adirondack Bancorp acquisition to close early in Q3 2026

Result Drivers

• NET INTEREST MARGIN EXPANSION - Net interest margin rose due to higher yields on earning assets and lower funding costs

• MERGER EXPENSES - Non-core merger expenses related to the pending acquisition of Adirondack Bancorp reduced reported net income

• SLOWER LOAN GROWTH - Severe winter weather slowed indirect auto and residential loan originations

Company press release: ID:nPn1yFY9Ja

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "hold"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for Arrow Financial Corp is $35.50, about 1.6% below its April 29 closing price of $36.06

• The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 9 three months ago

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