Regulatory Matters

12 Months Ended

Dec. 31, 2011

Regulatory Matters [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

REGULATORY MATTERS (Dollars in Thousands)

In the normal course of business, Arrow and its subsidiaries operate under certain regulatory restrictions, such as the extent and structure of covered inter-company borrowings and maintenance of reserve requirement balances.

The principal source of the funds for the payment of stockholder dividends by Arrow has been from dividends declared and paid to Arrow by its bank subsidiaries.  As of December 31, 2011, the maximum amount that could have been paid by subsidiary banks to Arrow, without prior regulatory approval, was approximately $28,291.

Under current Federal Reserve regulations, Arrow is prohibited from borrowing from the subsidiary banks unless such borrowings are secured by specific obligations.  Additionally, the maximum of any such borrowing is limited to 10% of an affiliate’s capital and surplus.

Arrow and its subsidiary banks are subject to various regulatory capital requirements administered by the federal banking agencies.  Failure to meet minimum capital requirements can initiate certain mandatory--and possibly additional discretionary--actions by regulators that, if undertaken, could have a direct material effect on an institution’s financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, Arrow and its subsidiary banks must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.  Capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require Arrow and its subsidiary banks to maintain minimum capital amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital (as defined) to average assets (as defined).  Management believes, as of December 31, 2011 and 2010, that Arrow and both subsidiary banks meet all capital adequacy requirements to which they are subject.

As of December 31, 2011, Arrow and both subsidiary banks qualified as well-capitalized under the regulatory framework for prompt corrective action.  To be categorized as “well-capitalized,” Arrow and its subsidiary banks must maintain minimum total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the table below.  There are no conditions or events that management believes have changed Arrow’s or its subsidiary banks’ categories.

Arrow’s and its subsidiary banks’, Glens Falls National Bank and Trust Company (“Glens Falls National”) and Saratoga National Bank and Trust Company (“Saratoga National”), actual capital amounts and ratios are presented in the table below as of December 31, 2011 and 2010:

	Actual				Minimum Amounts For Capital Adequacy Purposes				Minimum Amounts To Be Well-Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2011:
Total Capital  (to Risk Weighted Assets):
Arrow	$	187,681	16.0	%	$	93,841	8.0	%	$	117,301	10.0	%
Glens Falls National	155,209		15.9	%	78,093		8.0	%	97,616		10.0	%
Saratoga National	29,853		15.0	%	15,922		8.0	%	19,902		10.0	%
Tier I Capital  (to Risk Weighted Assets):
Arrow	172,956		14.7	%	47,063		4.0	%	70,594		6.0	%
Glens Falls National	142,998		14.6	%	39,178		4.0	%	58,766		6.0	%
Saratoga National	27,365		13.8	%	7,932		4.0	%	11,898		6.0	%
Tier I Capital  (to Average Assets):
Arrow	172,956		9.0	%	76,869		4.0	%	76,869		4.0	%
Glens Falls National	142,998		8.6	%	66,511		4.0	%	83,138		5.0	%
Saratoga National	27,365		9.3	%	11,770		4.0	%	14,712		5.0	%

	Actual				Minimum Amounts For Capital Adequacy Purposes				Minimum Amounts To Be Well-Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2010:
Total Capital  (to Risk Weighted Assets):
Arrow	$	180,322	15.7	%	$	91,884	8.0	%	$	114,855	10.0	%
Glens Falls National	150,959		15.5		77,914		8.0		97,393		10.0
Saratoga National	28,369		15.5		14,642		8.0		18,303		10.0
Tier I Capital  (to Risk Weighted Assets):
Arrow	165,944		14.4		46,096		4.0		69,143		6.0
Glens Falls National	138,936		14.3		38,863		4.0		58,295		6.0
Saratoga National	26,078		14.3		7,295		4.0		10,942		6.0
Tier I Capital  (to Average Assets):
Arrow	165,944		8.5		78,091		4.0		78,091		4.0
Glens Falls National	138,944		8.3		66,957		4.0		83,696		5.0
Saratoga National	26,078		8.9		11,720		4.0		14,651		5.0