Regulatory Matters

12 Months Ended

Dec. 31, 2014

Banking and Thrift [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, 2014, the maximum amount that could have been paid by subsidiary banks to Arrow, without prior regulatory approval, was approximately $29.2.

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, 2014 and 2013, that Arrow and both subsidiary banks meet all capital adequacy requirements to which they are subject.

As of December 31, 2014, 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, 2014 and 2013:

	Actual				Minimum Amounts For Capital Adequacy Purposes				Minimum Amounts To Be Well-Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2014:
Total Capital  (to Risk Weighted Assets):
Arrow	$	225,766	15.5	%	$	116,524	8.0	%	$	145,655	10.0	%
Glens Falls National	183,446		15.5	%	94,682		8.0	%	118,352		10.0	%
Saratoga National	35,217		13.3	%	21,183		8.0	%	26,479		10.0	%
Tier I Capital  (to Risk Weighted Assets):
Arrow	210,136		14.5	%	57,969		4.0	%	86,953		6.0	%
Glens Falls National	170,497		14.4	%	47,360		4.0	%	71,040		6.0	%
Saratoga National	32,596		12.3	%	10,600		4.0	%	15,900		6.0	%
Tier I Capital  (to Average Assets):
Arrow	210,136		9.4	%	89,420		4.0	%	89,420		4.0	%
Glens Falls National	170,497		9.1	%	74,944		4.0	%	93,680		5.0	%
Saratoga National	32,596		9.4	%	13,871		4.0	%	17,338		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, 2013:
Total Capital  (to Risk Weighted Assets):
Arrow	$	212,360	15.8	%	107,524	8.0	%	134,405	10.0	%
Glens Falls National	172,720		15.4	%	89,725	8.0	%	112,156	10.0	%
Saratoga National	33,396		14.8	%	18,052	8.0	%	22,565	10.0	%
Tier I Capital  (to Risk Weighted Assets):
Arrow	197,906		14.7	%	53,852	4.0	%	80,778	6.0	%
Glens Falls National	160,849		14.4	%	44,680	4.0	%	67,020	6.0	%
Saratoga National	30,833		13.7	%	9,002	4.0	%	13,504	6.0	%
Tier I Capital  (to Average Assets):
Arrow	197,906		9.2	%	86,046	4.0	%	86,046	4.0	%
Glens Falls National	160,849		8.8	%	73,113	4.0	%	91,391	5.0	%
Saratoga National	30,833		9.7	%	12,715	4.0	%	15,893	5.0	%