Arrow Financial in Glens Falls, N.Y., reported a double-digit profit increase in the first quarter as strong loan growth in its three major business lines helped to offset flat noninterest income and higher expenses.
The $2.3 billion-asset company said Tuesday that net income rose 10.1% from the same period last year, to nearly $5.9 million. Earnings per share of 46 cents beat the estimate of a Sandler O'Neill analyst by 2 cents.
Loan balances jumped 9.5% year over year amid increased demand for residential, commercial and automobile loans. In turn, net interest income increased 8%, to $15.9 million, while the net interest margin climbed 12 basis points, to 3.24%. The rise in the net interest margin can be attributed to an increase in the yield on investments and a decrease in deposit costs, which was offset by the decreasing yield on Arrow's loan portfolio.
Noninterest income of $6.9 million was essentially unchanged from the year prior, but assets under trust administration and investment management did jump 6%, to a record $1.3 billion. The positive movement stemmed from a rise in the equity markets and the addition of new accounts. Income from fiduciary activities also increased, but was counterbalanced by declining income from insurance commissions.
Noninterest expenses went up 4%, to nearly $14 million, largely on increases in net occupancy and other expenses.