NasdaqGS:AROW

Stock Analysis Report

Executive Summary

Arrow Financial Corporation, a bank holding company, provides commercial and consumer banking, and financial products and services.


Snowflake Analysis

Flawless balance sheet established dividend payer.


Similar Companies

Share Price & News

How has Arrow Financial's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AROW has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.09%

AROW

-1.2%

US Banks

-1.1%

US Market


1 Year Return

1.3%

AROW

9.8%

US Banks

17.8%

US Market

Return vs Industry: AROW underperformed the US Banks industry which returned 9.8% over the past year.

Return vs Market: AROW underperformed the US Market which returned 17.8% over the past year.


Shareholder returns

AROWIndustryMarket
7 Day-0.09%-1.2%-1.1%
30 Day-3.7%0.4%1.5%
90 Day-3.3%-0.8%6.6%
1 Year4.5%1.3%13.0%9.8%20.2%17.8%
3 Year16.2%7.1%23.4%14.5%47.5%38.1%
5 Year74.0%50.0%72.2%52.7%71.2%52.4%

Price Volatility Vs. Market

How volatile is Arrow Financial's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Arrow Financial undervalued compared to its fair value and its price relative to the market?

13.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AROW ($34.89) is trading below our estimate of fair value ($40.31)

Significantly Below Fair Value: AROW is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: AROW is poor value based on its PE Ratio (13.9x) compared to the Banks industry average (12.6x).

PE vs Market: AROW is good value based on its PE Ratio (13.9x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: AROW is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: AROW is overvalued based on its PB Ratio (1.7x) compared to the US Banks industry average (1.2x).


Next Steps

Future Growth

How is Arrow Financial forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

7.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AROW's forecast earnings growth (7.6% per year) is above the savings rate (1.7%).

Earnings vs Market: AROW's earnings (7.6% per year) are forecast to grow slower than the US market (14.1% per year).

High Growth Earnings: AROW's earnings are forecast to grow, but not significantly.

Revenue vs Market: AROW's revenue (6.3% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: AROW's revenue (6.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AROW's Return on Equity is forecast to be low in 3 years time (12.8%).


Next Steps

Past Performance

How has Arrow Financial performed over the past 5 years?

10.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AROW has high quality earnings.

Growing Profit Margin: AROW's current net profit margins (32.7%) are lower than last year (32.9%).


Past Earnings Growth Analysis

Earnings Trend: AROW's earnings have grown by 10.6% per year over the past 5 years.

Accelerating Growth: AROW's earnings growth over the past year (3.3%) is below its 5-year average (10.6% per year).

Earnings vs Industry: AROW earnings growth over the past year (3.3%) underperformed the Banks industry 12%.


Return on Equity

High ROE: AROW's Return on Equity (12.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Arrow Financial's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: AROW has a low level of unsold assets or inventory.

Debt Coverage by Assets: AROW's debt is not covered by short term assets (assets are 0.3x debt).


Financial Institutions Analysis

Asset Level: AROW's level of assets compared to its equity is moderate.

Allowance for Bad Loans: AROW has a sufficient allowance for bad loans.

Low Risk Liabilities: AROW's liabilities are made up of primarily low risk sources of funding.

Loan Level: AROW has an acceptable proportion of non-loan assets held.

Low Risk Deposits: AROW's loans are broadly funded by customer deposits.

Level of Bad Loans: AROW has an appropriate level of bad loans (0.18%)


Next Steps

Dividend

What is Arrow Financial's current dividend yield, its reliability and sustainability?

2.98%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Arrow Financial before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.0%marketbottom25%1.4%markettop25%3.7%industryaverage2.9%forecastin3Years3.1%

Current dividend yield vs market & industry

Notable Dividend: AROW's dividend (2.98%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: AROW's dividend (2.98%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: AROW's dividends per share have been stable in the past 10 years.

Growing Dividend: AROW's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (40.5%), AROW's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AROW's dividends in 3 years are forecast to be well covered by earnings (37.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.0yrs

Average management tenure


CEO

Tom Murphy (60yo)

7.1yrs

Tenure

US$1,335,544

Compensation

Mr. Thomas J. Murphy, also known as Tom, CPA has been the Chief Executive Officer and President of Glens Falls National Bank and Trust Company since January 1, 2013. Mr. Murphy serves as the President of C ...


CEO Compensation Analysis

Compensation vs Market: Tom's total compensation ($USD1.34M) is about average for companies of similar size in the US market ($USD1.67M).

Compensation vs Earnings: Tom's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Thomas Murphy
President7.1yrsUS$1.34m0.35% $1.8m
Edward Campanella
Senior VP2.4yrsUS$343.35k0.00011% $575.6
Andrew Wise
Senior VP & COO2yrsUS$313.18k0.0021% $10.7k
David DeMarco
Senior VP & Chief Banking Officer10.8yrsUS$524.32k0.17% $907.7k
David Kaiser
Senior Vice President5yrsUS$426.69k0.087% $457.0k
Peter Lareau
Corporate Secretary0yrsno datano data

5.0yrs

Average Tenure

57yo

Average Age

Experienced Management: AROW's management team is seasoned and experienced (5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Thomas Murphy
President7.1yrsUS$1.34m0.35% $1.8m
Michael Massiano
Chairman Emeritus15.8yrsUS$20.10kno data
Thomas Hoy
Chairman of the Board15.8yrsUS$104.46k1.33% $7.0m
David Kruczlnicki
Independent Director31.1yrsUS$59.65k0.27% $1.4m
Richard Reisman
Independent Director21.1yrsUS$65.45k0.10% $540.9k
William Owens
Lead Director2.8yrsUS$52.69k0.049% $255.4k
Gary Dake
Independent Director17.1yrsUS$56.21k0.21% $1.1m
Michael Clarke
Independent Director14yrsUS$60.76k0.088% $462.3k
Raymond O'Conor
Independent Director3.1yrsUS$59.06k0.30% $1.5m
Colin Read
Independent Director6.8yrsUS$54.31k0.059% $308.3k

14.9yrs

Average Tenure

68yo

Average Age

Experienced Board: AROW's board of directors are seasoned and experienced ( 14.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: AROW insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Arrow Financial Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Arrow Financial Corporation
  • Ticker: AROW
  • Exchange: NasdaqGS
  • Founded: 1851
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$523.287m
  • Shares outstanding: 15.00m
  • Website: https://www.arrowfinancial.com

Number of Employees


Location

  • Arrow Financial Corporation
  • 250 Glen Street
  • Glens Falls
  • New York
  • 12801
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AROWNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJan 1975

Biography

Arrow Financial Corporation, a bank holding company, provides commercial and consumer banking, and financial products and services. The company’s deposit products include demand deposits, interest-bearing checking accounts, savings deposits, time deposits, and other time deposits. Its lending activities comprise commercial loans, such as term loans, time notes, and lines of credit; and commercial real estate loans to finance real estate purchases, refinancing, expansions, and improvements to commercial properties, as well as commercial construction and land development loans to finance projects. The company’s lending activities also include consumer installment loans to finance personal expenditures, personal lines of credit, overdraft protection, and automobile loans; and residential real estate loans, as well as fixed home equity loans and home equity lines of credit for consumers to finance home improvements, debt consolidation, education, and other uses. In addition, it maintains an indirect lending program; and sells residential real estate loan originations into the secondary market. Further, the company provides retirement planning, trust, and estate administration services for individuals; and pension, profit-sharing, and employee benefit plan administration services for corporations. Additionally, it offers insurance agency services comprising group health care policies and life insurance, and property and casualty insurance products; and investment advisory services to its proprietary mutual funds, as well as holds a real estate investment trust. The company operates in the northeastern region of New York State in Warren, Washington, Saratoga, Essex, Clinton, Rensselaer, Albany, and Schenectady counties, as well as surrounding areas. It owns 28 branch banking offices; and leases 12 branch banking offices, as well as 2 residential loan origination offices. The company was founded in 1851 and is headquartered in Glens Falls, New York. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/24 01:28
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.