Arrow Financial Corp. (AROW, Financial) filed Quarterly Report for the period ended 2010-03-31.
Arrow Financial Corp. has a market cap of $289.8 million; its shares were traded at around $26.3 with a P/E ratio of 14.5 and P/S ratio of 2.7. The dividend yield of Arrow Financial Corp. stocks is 3.8%. Arrow Financial Corp. had an annual average earning growth of 3.7% over the past 10 years. GuruFocus rated Arrow Financial Corp. the business predictability rank of 2.5-star.AROW is in the portfolios of Jim Simons of Renaissance Technologies LLC.
We reported net income for the first quarter of 2010 of $5.4 million, representing diluted earnings per share (EPS) of $.49. As we previously reported, included in our 2009 first quarter results was a net gain of $1.63 million, or $.15 per share, net of tax, recognized on the sale of our merchant bank card processing line of business to TransFirst LLC. Excluding this transaction, adjusted net income for the first quarter of 2009 was $5.1 million, representing adjusted diluted EPS of $.46 for the first quarter of 2009. As a result, adjusted EPS increased $.03 per share or 6.5% from 2009 to the comparable 2010 results. Return on average equity (ROE) for the 2010 quarter continued to be very strong at 15.25%, although down slightly from the adjusted ROE of 15.94% for the quarter ended March 31, 2009. Return on average assets (ROA) for the 2010 quarter continued to be very strong at 1.19%, although down slightly from the adjusted ROA of 1.22% for the quarter ended March 31, 2009. The adjusted net income, adjusted EPS, adjusted ROE and adjusted ROA measures for 2009 are non-GAAP financial measures. We have provided a reconciliation of these non-GAAP measures to the GAAP net income for the 2009 first quarter of $6.7 million, diluted EPS of $.61, ROE of 21.09% and ROA of 1.61% as required under Regulation G in the table on page 36.
Total assets were $1.861 billion at March 31, 2010, which represented an increase of $148.6 million, or 8.7%, above the level at March 31, 2009, and an increase of $19.7 million, or 1.1%, from the December 31, 2009 level.
Stockholders equity was $145.8 million at March 31, 2010, an increase of $13.3 million, or 10.0%, from the year earlier level. Stockholders' equity increased $5.0 million from the December 31, 2009 level of $140.8 million. The components of the change in stockholders equity since year-end 2009 are presented in the Consolidated Statement of Changes in Stockholders Equity on page 5, and are discussed in more detail in the following section entitled, Increase in Stockholder Equity. Our risk-based capital ratios and Tier 1 leverage ratio continued to significantly exceed regulatory minimum requirements at period-end. At March 31, 2010 both of our banks, as well as the holding company, qualified as "well-capitalized" under federal bank regulatory guidelines.
Sale of Merchant Bank Card Processing to TransFirst: As we previously reported during the first quarter of 2009, our bank subsidiaries, Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company, sold their merchant bank card processing businesses during that period for an initial cash payment at closing of $3 million to TransFirst LLC (TransFirst) and a bank designated by TransFirst. In connection with the sale, we entered into a relationship with TransFirst under which TransFirst will provide merchant bank card processing to merchant customers of our subsidiary banks. The gain to us from the transaction was offset, in part, by an estimated $300 thousand cost primarily to terminate certain pre-existing agreements, for a pre-tax net gain at closing of $2.7 million. In the second quarter of 2009, a post-closing adjustment to the purchase price substantially eliminated the termination fees related to the pre-existing agreements such that our net pre-tax gain on the sale of the business as adjusted increased by $266 thousand to approximately $2.97 million.
Economic recession and loan quality: As the economic recession got underway in late 2008, our market area of northeastern New York was relatively sheltered from falling real estate values and increasing unemployment, partially due to the fact that our market area had been less affected by the preceding real estate bubble than other areas of the U.S. As the recession became stronger and deeper in late 2009, even northeastern New York began to feel the impact of the worsening national economy reflected in a slow-down in real estate sales and increasing unemployment rates. By year-end 2009, we had experienced a decline in the credit quality of our loan portfolio, although by standard measures our portfolio continued to appear stronger than the average for our peer group. In the first quarter of 2010 our loan quality held steady and in some ways actually improved. Nonperforming loans amounted to $3.6 million at March 31, 2010, a decrease of $1.1 million from the prior year-end. The ratio of nonperforming loans to period-end loans was .32% at March 31, 2010, a decrease from .35% one year earlier. By way of comparison, this ratio for our peer group increased by 107 basis points, from 2.39% at December 31, 2008 to 3.46% at December 31, 2009. Our loans charged-off (net of recoveries) against our allow
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Arrow Financial Corp. has a market cap of $289.8 million; its shares were traded at around $26.3 with a P/E ratio of 14.5 and P/S ratio of 2.7. The dividend yield of Arrow Financial Corp. stocks is 3.8%. Arrow Financial Corp. had an annual average earning growth of 3.7% over the past 10 years. GuruFocus rated Arrow Financial Corp. the business predictability rank of 2.5-star.AROW is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
At certain points in this Report, our performance is compared with that of our peer group of financial institutions. Unless otherwise specifically stated, this peer group is comprised of the group of 296 domestic bank holding companies with $1 to $3 billion in total consolidated assets as identified in the Federal Reserve Boards Bank Holding Company Performance Report for December 31, 2009 (the most recent such Report currently available), and peer group data has been derived from such Report.We reported net income for the first quarter of 2010 of $5.4 million, representing diluted earnings per share (EPS) of $.49. As we previously reported, included in our 2009 first quarter results was a net gain of $1.63 million, or $.15 per share, net of tax, recognized on the sale of our merchant bank card processing line of business to TransFirst LLC. Excluding this transaction, adjusted net income for the first quarter of 2009 was $5.1 million, representing adjusted diluted EPS of $.46 for the first quarter of 2009. As a result, adjusted EPS increased $.03 per share or 6.5% from 2009 to the comparable 2010 results. Return on average equity (ROE) for the 2010 quarter continued to be very strong at 15.25%, although down slightly from the adjusted ROE of 15.94% for the quarter ended March 31, 2009. Return on average assets (ROA) for the 2010 quarter continued to be very strong at 1.19%, although down slightly from the adjusted ROA of 1.22% for the quarter ended March 31, 2009. The adjusted net income, adjusted EPS, adjusted ROE and adjusted ROA measures for 2009 are non-GAAP financial measures. We have provided a reconciliation of these non-GAAP measures to the GAAP net income for the 2009 first quarter of $6.7 million, diluted EPS of $.61, ROE of 21.09% and ROA of 1.61% as required under Regulation G in the table on page 36.
Total assets were $1.861 billion at March 31, 2010, which represented an increase of $148.6 million, or 8.7%, above the level at March 31, 2009, and an increase of $19.7 million, or 1.1%, from the December 31, 2009 level.
Stockholders equity was $145.8 million at March 31, 2010, an increase of $13.3 million, or 10.0%, from the year earlier level. Stockholders' equity increased $5.0 million from the December 31, 2009 level of $140.8 million. The components of the change in stockholders equity since year-end 2009 are presented in the Consolidated Statement of Changes in Stockholders Equity on page 5, and are discussed in more detail in the following section entitled, Increase in Stockholder Equity. Our risk-based capital ratios and Tier 1 leverage ratio continued to significantly exceed regulatory minimum requirements at period-end. At March 31, 2010 both of our banks, as well as the holding company, qualified as "well-capitalized" under federal bank regulatory guidelines.
Sale of Merchant Bank Card Processing to TransFirst: As we previously reported during the first quarter of 2009, our bank subsidiaries, Glens Falls National Bank and Trust Company and Saratoga National Bank and Trust Company, sold their merchant bank card processing businesses during that period for an initial cash payment at closing of $3 million to TransFirst LLC (TransFirst) and a bank designated by TransFirst. In connection with the sale, we entered into a relationship with TransFirst under which TransFirst will provide merchant bank card processing to merchant customers of our subsidiary banks. The gain to us from the transaction was offset, in part, by an estimated $300 thousand cost primarily to terminate certain pre-existing agreements, for a pre-tax net gain at closing of $2.7 million. In the second quarter of 2009, a post-closing adjustment to the purchase price substantially eliminated the termination fees related to the pre-existing agreements such that our net pre-tax gain on the sale of the business as adjusted increased by $266 thousand to approximately $2.97 million.
Economic recession and loan quality: As the economic recession got underway in late 2008, our market area of northeastern New York was relatively sheltered from falling real estate values and increasing unemployment, partially due to the fact that our market area had been less affected by the preceding real estate bubble than other areas of the U.S. As the recession became stronger and deeper in late 2009, even northeastern New York began to feel the impact of the worsening national economy reflected in a slow-down in real estate sales and increasing unemployment rates. By year-end 2009, we had experienced a decline in the credit quality of our loan portfolio, although by standard measures our portfolio continued to appear stronger than the average for our peer group. In the first quarter of 2010 our loan quality held steady and in some ways actually improved. Nonperforming loans amounted to $3.6 million at March 31, 2010, a decrease of $1.1 million from the prior year-end. The ratio of nonperforming loans to period-end loans was .32% at March 31, 2010, a decrease from .35% one year earlier. By way of comparison, this ratio for our peer group increased by 107 basis points, from 2.39% at December 31, 2008 to 3.46% at December 31, 2009. Our loans charged-off (net of recoveries) against our allow
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