Despite substantial gains in fee income, Arrow Financial Corp. in Glens Falls, N.Y., said Tuesday that its third-quarter profit fell slightly from a year earlier due to weakening demand for home and auto loans and a penalty it incurred for prepaying Federal Home Loan Bank advances.
The $2 billion-asset, two-bank holding company reported net income of $5.4 million in the quarter that ended Sept. 30, down 3.6% from the same period last year. Earnings per share fell 4.2%, to 46 cents, but still beat an analyst’s estimates by a penny.
Fee income jumped by nearly 50% year over year, to $7.9 million, thanks largely to two insurance agency acquisitions that more than doubled its insurance commissions. That increase was offset, however, by a 2% drop in net interest income and a $1.6 million penalty it took for prepaying $40 million of Home Loan bank advances.
Though it was a down quarter overall, Arrow continues to rank among the best performing banking companies in its peer group. At Sept. 30, its return on equity was 12.8% and just 0.31% of its assets were nonperforming.
