Stock Option Plans

12 Months Ended

Dec. 31, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

STOCK BASED COMPENSATION (Dollars In Thousands, Except Share and Per Share Amounts)

Arrow has established two stock based compensation plans: an Incentive and Non-qualified Stock Option Plan (Stock Option Plan) and an Employee Stock Ownership Plan (ESOP).  All share and per share data have been adjusted for the September 2012 2% stock dividend.

Stock Option Plan

Options may be granted at a price no less than the greater of the par value or fair market value of such shares on the date on which such option is granted, and generally expire ten years from the date of grant.  The options usually vest over a four-year period.

Roll Forward Schedule of Stock Option Plan by Shares and Weighted Average Exercise Prices

	Stock Option Plans
Roll Forward of Shares Outstanding:
Outstanding at January 1, 2012	482,765
Granted	75,786
Exercised	(97,804		)
Forfeited	(18,362		)
Outstanding at December 31, 2012	442,385
Exercisable at December 31, 2012	259,150
Vested and Expected to Vest	183,235
Roll Forward of Shares Outstanding - Weighted Average Exercise Price:
Outstanding at January 1, 2012	$	22.46
Granted	24.92
Exercised	21.53
Forfeited	23.93
Outstanding at December 31, 2012	23.03
Exercisable at December 31, 2012	22.46
Vested and Expected to Vest	23.83
Weighted Average Remaining Contractual Life ( in years):
Outstanding at December 31, 2012	5.95
Exercisable at December 31, 2012	4.45
Vested and Expected to Vest	8.08
Aggregate Intrinsic Value:
Outstanding at December 31, 2012	$	849
Exercisable at December 31, 2012	645
Vested and Expected to Vest	204
Shares Available for Grant at Period-End	37,695

Schedule of Shares Authorized Under the Stock Option Plan by Exercise Price Range

	Exercise Price Ranges
	$19.47 to $20.27		$21.63 to $21.66		$22.19 to $22.71		$24.24 to $24.92		$26.29		Total
Outstanding Options at December 31, 2012
Number of Shares Outstanding	103,872		32,719		102,916		148,676		54,202		442,385
Weighted-Average Remaining Contractual Life (in years)	5.66		3.92		5.25		8.55		1.96		5.95
Weighted-Average Exercise Price	$	19.99	$	21.66	$	22.56	$	24.59	$	26.29	$	23.03
Exercisable Options at December 31, 2012
Number of Shares Outstanding	86,021		32,719		66,826		19,382		54,202		259,150
Weighted-Average Remaining Contractual Life (in years)	5.58		3.92		4.26		8.01		1.96		4.45
Weighted-Average Exercise Price	$	19.93	$	21.66	$	22.47	$	24.26	$	26.29	$	22.46

Schedule of Other Stock Option Plan Information

	2012			2011			2010
Shares Granted	75,786			78,425			77,047
Weighted Average Grant Date Information:
Fair Value of Options Granted	$	6.01		$	6.12		$	6.12
Fair Value Assumptions:
Dividend Yield	3.93		%	4.00		%	3.80		%
Expected Volatility	37.43		%	36.50		%	35.40		%
Risk Free Interest Rate	1.22		%	2.54		%	3.14		%
Expected Lives (in years)	6.46			6.40			7.79
Amount Expensed During the Year	$	424		$	354		$	299
Compensation Costs for Non-vested Awards Not Yet Recognized	737			705			579
Weighted Average Expected Vesting Period, In Years	1.71			1.80			1.80
Proceeds From Stock Options Exercised	$	2,105		$	1,413		$	798
Tax Benefits Related to Stock Options Exercised	68			51			105
Intrinsic Value of Stock Options Exercised	2,434			1,740			1,404

Employee Stock Ownership Plan

Arrow maintains an employee stock ownership plan (“ESOP”).  Substantially all employees of Arrow and its subsidiaries are eligible to participate upon satisfaction of applicable service requirements.  The ESOP borrowed funds from one of Arrow’s subsidiary banks to purchase outstanding shares of Arrow’s common stock.  The notes require annual payments of principal and interest through 2018.  As the debt is repaid, shares are released from collateral based on the proportion of debt paid to total debt outstanding for the year and allocated to active employees.  In addition, the Company makes additional cash contributions to the Plan each year.

Schedule of ESOP Compensation Expense

	2012		2011		2010
ESOP Compensation Expense	$	550	$	550	$	500

As the debt is repaid, shares are released from collateral based on the proportion of debt paid to total debt outstanding for the year and allocated to active employees.  

Shares pledged as collateral are reported as unallocated ESOP shares in stockholders’ equity.  As shares are released from collateral, Arrow reports compensation expense equal to the current average market price of the shares, and the shares become outstanding for earnings per share computations.  The ESOP shares as of December 31, 2012 were as follows:

Schedule of Shares in ESOP Plan

ESOP Plan Shares:	2012
Allocated Shares	740,124
Shares Released for Allocation During 2012	16,629
Unallocated Shares	102,890
Total ESOP Shares	859,643
Market Value of Unallocated Shares	$	2,570