Arrow Financial's Earnings Jump 10% on Higher Loan Demand

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.

For reprint and licensing requests for this article, click here.
Community banking Consumer banking New York New York
MORE FROM AMERICAN BANKER