📊 AROW Key Takeaways
Is Arrow Financial Corp. (AROW) a Good Investment?
Arrow Financial exhibits strong top-line growth (+15.5% revenue, +47.5% net income YoY) and fortress-like balance sheet strength, but is severely hampered by an interest coverage ratio of 0.9x, indicating insufficient operating income to cover debt obligations. Critically poor returns on equity (3.1%) and assets (0.3%) reveal deeply inefficient capital deployment despite revenue expansion, signaling structural profitability challenges that growth alone cannot overcome.
Arrow Financial shows solid core fundamentals for a community bank, with healthy profitability, a strong capital base, very low long-term debt, and positive free cash flow generation. However, earnings quality looks mixed because revenue grew strongly while net income was essentially flat, and several reported ratios appear distorted for a bank balance sheet, which lowers conviction. The fundamentals support stability more than a clear acceleration story.
Arrow Financial Corp. Key Strengths (AROW)
- Exceptional net income and EPS growth trajectory (+47.5% and +49.7% YoY respectively)
- Fortress balance sheet with minimal leverage (Debt/Equity 0.01x) and $285.6M cash reserves
- Strong free cash flow generation ($13.9M FCF with 161.6% FCF margin) provides liquidity buffer
- Revenue growth of 15.5% YoY demonstrates market demand expansion
- ROA of 1.0% and ROE of 10.2% indicate respectable bank-level profitability
- Balance sheet leverage appears conservative with only $4.26M of long-term debt against $431.85M of equity
- Operating cash flow of $41.28M and free cash flow of $36.19M suggest good internal capital generation
AROW Stock Risks: Arrow Financial Corp. Investment Risks
- Interest coverage of 0.9x critically signals inability to cover debt obligations from operating income, creating refinancing risk
- Extremely poor returns on equity (3.1%) and assets (0.3%) indicate severe capital inefficiency and suboptimal strategic deployment
- Profitability gains are not translating to shareholder value creation, suggesting operational/structural headwinds beneath surface growth
- Q1 2026 data point may mask cyclical weakness or one-time charges typical of banking sector
- Net income growth of only 0.3% despite 15.5% revenue growth suggests margin pressure or weaker earnings conversion
- Reported net margin of 135.5% and interest coverage of 0.2x indicate data distortion or non-recurring accounting effects, reducing clarity on true earnings quality
- As a commercial bank, future results remain sensitive to credit quality deterioration, deposit costs, and net interest margin compression
Key Metrics to Watch
- Interest coverage ratio trending toward 1.5x+ (critical for debt sustainability)
- ROE and ROA inflection toward industry averages (8-10% ROE, 0.8-1.0% ROA for regional banks)
- Net interest margin trends and deposit stability amid rate environment changes
- Loan loss provisions and credit quality deterioration indicators
- Net interest margin and provision for credit losses
- Deposit mix, nonperforming assets, and tangible common equity ratio
Arrow Financial Corp. (AROW) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 161.6% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. The current ratio below 1.0x warrants monitoring of short-term liquidity.
AROW Profit Margin, ROE & Profitability Analysis
AROW vs Finance Sector: How Arrow Financial Corp. Compares
How Arrow Financial Corp. compares to Finance sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Arrow Financial Corp. Stock Overvalued? AROW Valuation Analysis 2026
Based on fundamental analysis, Arrow Financial Corp. has mixed fundamental signals relative to the Finance sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Arrow Financial Corp. Balance Sheet: AROW Debt, Cash & Liquidity
AROW Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Arrow Financial Corp.'s revenue has remained relatively flat over the 5-year period, with a 0% decline. The most recent EPS of $1.77 reflects profitable operations.
AROW Revenue Growth, EPS Growth & YoY Performance
Arrow Financial Corp. Dividends, Buybacks & Capital Allocation
AROW SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Arrow Financial Corp. (CIK: 0000717538)
📋 Recent SEC Filings
❓ Frequently Asked Questions about AROW
What is the AI rating for AROW?
Arrow Financial Corp. (AROW) has a Combined AI Grade of C from Claude (C) and ChatGPT (B) with 73% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are AROW's key strengths?
Claude: Exceptional net income and EPS growth trajectory (+47.5% and +49.7% YoY respectively). Fortress balance sheet with minimal leverage (Debt/Equity 0.01x) and $285.6M cash reserves. ChatGPT: ROA of 1.0% and ROE of 10.2% indicate respectable bank-level profitability. Balance sheet leverage appears conservative with only $4.26M of long-term debt against $431.85M of equity.
What are the risks of investing in AROW?
Claude: Interest coverage of 0.9x critically signals inability to cover debt obligations from operating income, creating refinancing risk. Extremely poor returns on equity (3.1%) and assets (0.3%) indicate severe capital inefficiency and suboptimal strategic deployment. ChatGPT: Net income growth of only 0.3% despite 15.5% revenue growth suggests margin pressure or weaker earnings conversion. Reported net margin of 135.5% and interest coverage of 0.2x indicate data distortion or non-recurring accounting effects, reducing clarity on true earnings quality.
What is AROW's revenue and growth?
Arrow Financial Corp. reported revenue of $8.6M.
Does AROW pay dividends?
Arrow Financial Corp. pays dividends, with $17.4M distributed to shareholders in the trailing twelve months.
Where can I find AROW SEC filings?
Official SEC filings for Arrow Financial Corp. (CIK: 0000717538) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is AROW's EPS?
Arrow Financial Corp. has a diluted EPS of $0.82.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is AROW's fundamental grade?
Based on our AI fundamental analysis in June 2026, Arrow Financial Corp. has a C grade with 73% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is AROW stock overvalued or undervalued?
Valuation metrics for AROW: ROE of 3.1% (sector avg: 12%), net margin of 156.3% (sector avg: 25%). Compare these metrics with sector averages to assess valuation.
What is AROW's AI grade for 2026?
Our dual AI analysis gives Arrow Financial Corp. a combined C grade for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is AROW's free cash flow?
Arrow Financial Corp.'s operating cash flow is $15.2M, with capital expenditures of $1.3M. FCF margin is 161.6%.
How does AROW compare to other Finance stocks?
Vs Finance sector averages: Net margin 156.3% (avg: 25%), ROE 3.1% (avg: 12%), current ratio N/A (avg: 1.2).