Arrow Financial Corporation (NASDAQ:AROW) Accelerates Growth After Adirondack Closing; Near-Term Momentum Expected

Regional-bank scale expands materially following the Adirondack acquisition, with mixed technical signals suggesting short-term momentum while fundamental valuation remains stretched. Near-term price action should track integration updates and cash-flow metrics.

Recent News

On July 1, 2026 the company announced completion of its acquisition of Adirondack Bancorp, Inc., merging Adirondack Bank into Arrow Bank and reporting combined pro-forma totals of roughly $5.4 billion in assets, $4.8 billion in deposits and $4.1 billion in loans; management flagged a banking system conversion and integration to finish later in 2026. The July investor presentation noted subsequent balance-sheet actions, including the sale of about $74 million of low-yielding securities. Separate July 23, 2026 filings confirmed second-quarter results and the declaration of a $0.30 third-quarter dividend.

Technical Analysis

Directional indicators read bullish despite weak trend strength: ADX registers 17.21, indicating no established trend; DI+ at 21.08 trends higher (bullish) while DI- at 24.69 trends lower (bullish). Together this pattern signals directional bias without trend conviction, which dampens follow-through risk for short-term momentum.

MACD stands at -0.08 and trends higher with the MACD above its signal line (-0.20), a bullish momentum crossover that supports continued upside in the coming weeks if momentum holds.

MRO sits at 6.54 and trends upward, indicating the price sits modestly above the modeled target and therefore carries some downside pressure if momentum stalls; the magnitude suggests only a modest reversion risk at present.

RSI reads 49.36 and trends up, placing the stock near neutral momentum with room to move either direction before hitting typical overbought/oversold thresholds.

Price sits at $39.15, above the 20-day average ($38.57) and 200-day average ($35.43) but just below the 50-day average ($39.49). The 12-day EMA at $38.83 trends up and the ichimoku cloud shows Senkou A at $39.80 and Senkou B at $38.62, leaving price inside the cloud band near its upper boundary—supportive of consolidation with a bullish tilt if the cloud holds.

 


Fundamental Analysis

Earnings: Reported EPS of $0.71 missed the $0.85 estimate, producing an EPS surprise of -16.47%. Forward EPS sits at $1.0769, producing a forward P/E of 34.08 versus a trailing P/E of 54.36. The EPS miss reduces near-term earnings momentum despite a lower forward multiple that partially reflects expected earnings growth.

Growth: Revenue expanded year-over-year by 28.54% and quarter-over-quarter by 135.79%, reflecting acquisition-related top-line lift. Reported net income of $10.962 million and headline revenue of $44.187 million show material scale pickup tied to completed transaction activity and subsequent balance-sheet actions.

Profitability & returns: Return on equity reads 2.456% (below the industry peer mean of 2.777%) while return on assets reads 0.243% (below the industry peer mean of 0.311%). Net interest income totaled $35.931 million and interest expense registered $17.686 million, producing a narrower net-interest spread that the company will need to manage as acquired funding and securities rebalancing complete.

Capital structure & liquidity: Total assets approximate $4.482 billion with total equity at $446.306 million. Debt-to-assets stands at 7.475%, above the industry peer mean of 5.766%, while debt-to-equity registers 0.75078. Cash on hand reads $186.788 million and free cash flow registers $11.587 million with a free-cash-flow yield of 1.814% (below the industry peer mean of 2.621%).

Dividends and payout: Quarterly dividend per share at $0.30 yields about 0.78% with a dividend payout ratio near 45.25% and dividend coverage around 2.21, signaling the company keeps a conservative coverage buffer.

Valuation: Price-to-book stands at 1.4309, modestly above the industry peer mean book multiple of 1.2996 and near the industry peer median of 1.2752. Trailing P/E at 54.36 exceeds the industry peer mean of 46.08, while forward P/E at 34.08 sits below that trailing level but above the industry peer mean forward P/E of 40.34 (note: forward P/E here reflects company guidance and WMDST forward EPS). The current valuation, as determined by WMDST, classifies the stock as over-valued; enterprise-value-to-revenue ratio reads 22.04 and the mean analyst price target sits near $40.94 against a last close of $39.15, implying limited upside relative to present price without improved earnings visibility.

MOST-RECENT QUARTERLY REPORT
REPORT PERIOD ENDING: 2026-06-30
REPORT DATE: 2026-07-23
NEXT REPORT DATE: 2026-10-22
CASH FLOW  Begin Period Cash Flow $ 285.6 M
 Operating Cash Flow $ 15.8 M
 Capital Expenditures $ -4.21 M
 Change In Working Capital $ 3.4 M
 Dividends Paid $ -4.96 M
 Cash Flow Delta $ -98.82 M
 End Period Cash Flow $ 186.8 M
 
INCOME STATEMENT REVENUE
 Total Revenue $ 44.2 M
 Forward Revenue $ 18.0 M
COSTS
 Cost Of Revenue —
 Depreciation $ 1.3 M
 Depreciation and Amortization $ 1.3 M
 Research and Development —
 Total Operating Expenses —
PROFITABILITY
 Gross Profit —
 EBITDA —
 EBIT —
 Operating Income —
 Interest Income $ 53.6 M
 Interest Expense $ 17.7 M
 Net Interest Income $ 35.9 M
 Income Before Tax $ 13.9 M
 Tax Provision $ 2.9 M
 Tax Rate 21.1 %
 Net Income $ 11.0 M
 Net Income From Continuing Operations $ 11.0 M
EARNINGS
 EPS Estimate $ 0.85
 EPS Actual $ 0.71
 EPS Difference $ -0.14
 EPS Surprise -16.471 %
 Forward EPS $ 1.08
 
BALANCE SHEET ASSETS
 Total Assets $ 4.5 B
 Intangible Assets $ 25.4 M
 Net Tangible Assets $ 420.9 M
 Total Current Assets —
 Cash and Short-Term Investments —
 Cash $ 186.8 M
 Net Receivables —
 Inventory —
 Long-Term Investments —
LIABILITIES
 Accounts Payable —
 Short-Term Debt —
 Total Current Liabilities —
 Net Debt $ 143.4 M
 Total Debt $ 335.1 M
 Total Liabilities $ 4.0 B
EQUITY
 Total Equity $ 446.3 M
 Retained Earnings $ 116.8 M
VALUATION & PER-SHARE METRICS EQUITY & PER-SHARE METRICS
 Book Value Per-Share $ 26.98
 Shares Outstanding 16.545 M
 Revenue Per-Share $ 2.67
VALUATION
 Market Capitalization $ 638.6 M
 Enterprise Value $ 973.7 M
 Enterprise Multiple —
Enterprise Multiple QoQ —
Enterprise Multiple YoY —
Enterprise Multiple IPRWA —
 EV/R 22.036
CAPITAL STRUCTURE
 Asset To Equity 10.043
 Asset To Liability 1.111
 Debt To Capital 0.429
 Debt To Assets 0.075
Debt To Assets QoQ 1058.915 %
Debt To Assets YoY 883.553 %
Debt To Assets IPRWA high: 0.137
AROW: 0.075
median: 0.07
mean: 0.058
low: -0.0
 Debt To Equity 0.751
Debt To Equity QoQ 1032.74 %
Debt To Equity YoY 813.58 %
Debt To Equity IPRWA high: 1.606
AROW: 0.751
median: 0.672
mean: 0.549
low: -0.002
PRICE-BASED VALUATION
 Price To Book (P/B) 1.431
Price To Book QoQ 10.676 %
Price To Book YoY 30.078 %
Price To Book IPRWA high: 2.227
AROW: 1.431
mean: 1.3
median: 1.275
low: 0.269
 Price To Earnings (P/E) 54.363
Price To Earnings QoQ 29.469 %
Price To Earnings YoY 44.448 %
Price To Earnings IPRWA high: 69.021
AROW: 54.363
mean: 46.078
median: 43.576
low: 21.512
 PE/G Ratio -4.052
 Price To Sales (P/S) 14.452
Price To Sales QoQ 13.675 %
Price To Sales YoY 29.104 %
Price To Sales IPRWA high: 27.743
AROW: 14.452
mean: 14.02
median: 13.585
low: 0.098
FORWARD MULTIPLES
Forward P/E 34.084
Forward PE/G -2.541
Forward P/S 35.685
EFFICIENCY OPERATIONAL
 Operating Leverage —
ASSET & SALES
 Asset Turnover Ratio 0.01
Asset Turnover Ratio QoQ -1.703 %
Asset Turnover Ratio YoY 8.278 %
Asset Turnover Ratio IPRWA high: 0.016
mean: 0.01
median: 0.01
AROW: 0.01
low: 0.006
 Receivables Turnover —
Receivables Turnover Ratio QoQ —
Receivables Turnover Ratio YoY —
Receivables Turnover Ratio IPRWA —
 Inventory Turnover —
Inventory Turnover Ratio QoQ —
Inventory Turnover Ratio YoY —
Inventory Turnover Ratio IPRWA —
 Days Sales Outstanding (DSO) —
CASH CYCLE
 Cash Conversion Cycle Days (CCC) —
Cash Conversion Cycle Days QoQ —
Cash Conversion Cycle Days YoY —
Cash Conversion Cycle Days IPRWA —
CAPITAL DEPLOYMENT
 Cash Conversion Ratio —
 CapEx To Revenue -0.095
 CapEx To Depreciation -3.342
 
CAPITAL, LIQUIDITY & COVERAGE CAPITAL STRUCTURE
 Total Capital $ 776.5 M
 Net Invested Capital $ 776.5 M
 Invested Capital $ 776.5 M
 Net Tangible Assets $ 420.9 M
 Net Working Capital —
LIQUIDITY
 Cash Ratio —
 Current Ratio —
Current Ratio QoQ —
Current Ratio YoY —
Current Ratio IPRWA —
 Quick Ratio —
Quick Ratio QoQ —
Quick Ratio YoY —
Quick Ratio IPRWA —
COVERAGE & LEVERAGE
 Debt To EBITDA —
 Cost Of Debt 47.057 %
 Interest Coverage Ratio —
Interest Coverage Ratio QoQ —
Interest Coverage Ratio YoY —
Interest Coverage Ratio IPRWA —
 Operating Cash Flow Ratio —
TIMING / LIQUIDITY
 Days Payables Outstanding (DPO) —
DIVIDENDS
 Dividend Coverage Ratio 2.21
 Dividend Payout Ratio 0.452
 Dividend Rate $ 0.30
 Dividend Yield 0.008
PERFORMANCE GROWTH
 Asset Growth Rate -0.877 %
 Revenue Growth 3.103 %
Revenue Growth QoQ 135.79 %
Revenue Growth YoY 28.542 %
Revenue Growth IPRWA high: 29.736 %
mean: 5.007 %
AROW: 3.103 %
median: 1.242 %
low: -25.101 %
 Earnings Growth -13.415 %
Earnings Growth QoQ 280.136 %
Earnings Growth YoY -115.93 %
Earnings Growth IPRWA high: 43.333 %
mean: 9.918 %
median: 6.557 %
AROW: -13.415 %
low: -30.303 %
MARGINS
 Gross Margin —
Gross Margin QoQ —
Gross Margin YoY —
Gross Margin IPRWA —
 EBIT Margin —
EBIT Margin QoQ —
EBIT Margin YoY —
EBIT Margin IPRWA —
 Return On Sales (ROS) —
Return On Sales QoQ —
Return On Sales YoY —
Return On Sales IPRWA —
CASH FLOW
 Free Cash Flow (FCF) $ 11.6 M
 Free Cash Flow Yield 1.814 %
Free Cash Flow Yield QoQ -25.959 %
Free Cash Flow Yield YoY -1.52 %
Free Cash Flow Yield IPRWA high: 6.857 %
mean: 2.621 %
median: 2.521 %
AROW: 1.814 %
low: -2.092 %
 Free Cash Growth -16.885 %
Free Cash Growth QoQ -108.965 %
Free Cash Growth YoY 185.606 %
Free Cash Growth IPRWA high: 491.918 %
median: -2.261 %
mean: -10.381 %
AROW: -16.885 %
low: -414.865 %
 Free Cash To Net Income 1.057
 Cash Flow Margin 27.818 %
 Cash Flow To Earnings 1.121
VALUE & RETURNS
 Economic Value Added $ 0.16
 Return On Assets (ROA) 0.243 %
Return On Assets QoQ -19.269 %
Return On Assets YoY -0.41 %
Return On Assets IPRWA high: 0.621 %
mean: 0.311 %
median: 0.284 %
AROW: 0.243 %
low: 0.071 %
 Return On Capital Employed (ROCE) —
 Return On Equity (ROE) 0.025
Return On Equity QoQ -19.843 %
Return On Equity YoY -7.146 %
Return On Equity IPRWA high: 0.046
mean: 0.028
median: 0.025
AROW: 0.025
low: 0.006
 DuPont ROE 2.472 %
 Return On Invested Capital (ROIC) —
Return On Invested Capital QoQ —
Return On Invested Capital YoY —
Return On Invested Capital IPRWA —

Six-Week Outlook

Technical momentum presents a cautious bullish bias: the MACD crossover and rising DI+ support near-term upside, while ADX under 20 limits conviction and MRO signals modest over-extension. Expect price to oscillate between the 20–50 day moving-average band, with intra-swing moves guided by integration updates and any additional balance-sheet actions tied to the Adirondack acquisition.

Fundamentals will anchor sentiment: sequential revenue lift and announced securities sales support liquidity and funding-cost management, yet the trailing earnings miss and stretched valuation keep a cap on upside absent clear forward-earnings acceleration. Watch for post-integration earnings cadence and free-cash-flow improvement; such developments provide the clearest path to re-rating within the next six weeks.

About Arrow Financial Corporation

Arrow Financial Corporation (NASDAQ:AROW), founded in 1851 and based in Glens Falls, New York, operates as a bank holding company with a focus on delivering a broad spectrum of financial services. Serving the northeastern region of New York State, Arrow Financial conducts its operations through its subsidiaries, providing both commercial and consumer banking solutions. The company offers an array of deposit products, including demand deposits, interest-bearing checking accounts, and savings and time deposits. Arrow Financial’s lending portfolio includes commercial loans, real estate financing, and consumer credit options such as personal lines of credit and automobile loans. The company supports businesses and individuals with tailored financial solutions, including residential real estate loans and home equity lines of credit. In addition to traditional banking services, Arrow Financial extends its capabilities to retirement planning, trust, and estate administration. It provides insurance agency services, offering policies ranging from group health care to property and casualty insurance. The company also offers investment advisory services and manages proprietary mutual funds, positioning itself as a comprehensive financial partner in the communities it serves.



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