Investment Securities

6 Months Ended

Jun. 30, 2024

Investments, Debt and Equity Securities [Abstract]

INVESTMENT SECURITIES (In Thousands)

The following table is the schedule of Available-For-Sale Securities at June 30, 2024, December 31, 2023 and June 30, 2023:


Available-For-Sale Securities
	U.S. Treasuries		U.S. Government & Agency Obligations		State and Municipal Obligations		Mortgage- Backed Securities		Corporate and Other Debt Securities		Total Available- For-Sale Securities
June 30, 2024
Available-For-Sale Securities, at Amortized Cost	$	49,559	$	160,000	$	240	$	283,468	$	1,000	$	494,267
Gross Unrealized Gains	—		—		—		17		—		17
Gross Unrealized Losses	(103)		(6,647)		—		(36,695)		(53)		(43,498)
Available-For-Sale Securities, at Fair Value	49,456		153,353		240		246,790		947		450,786
Available-For-Sale Securities, Pledged as Collateral, at Fair Value											299,368

Maturities of Debt Securities, at Amortized Cost:
Within One Year	$	24,621	$	60,000	$	—	$	2,058	$	—	$	86,679
From 1 - 5 Years	24,938		100,000		—		179,619		—		304,557
From 5 - 10 Years	—		—		240		101,791		1,000		103,031
Over 10 Years	—		—		—		—		—		—

Maturities of Debt Securities, at Fair Value:
Within One Year	$	24,608	$	59,355	$	—	$	2,011	$	—	$	85,974
From 1 - 5 Years	24,848		93,998		—		160,000		—		278,846
From 5 - 10 Years	—		—		240		84,779		947		85,966
Over 10 Years	—		—		—		—		—		—

Securities in a Continuous Loss Position, at Fair Value:
Less than 12 Months	$	49,456	$	14,978	$	—	$	3,922	$	—	$	68,356
12 Months or Longer	—		138,375		—		241,405		947		380,727
Total	$	49,456	$	153,353	$	—	$	245,327	$	947	$	449,083
Number of Securities in a Continuous Loss Position	2		21		—		98		1		122

Unrealized Losses on Securities in a Continuous Loss Position:
Less than 12 Months	$	103	$	22	$	—	$	6	$	—	$	131
12 Months or Longer	—		6,625		—		36,689		53		43,367
Total	$	103	$	6,647	$	—	$	36,695	$	53	$	43,498

Disaggregated Details:
US Treasuries, at Amortized Cost	$	49,559
US Treasuries, at Fair Value	49,456
US Agency Obligations, at Amortized Cost			$	160,000
US Agency Obligations, at Fair Value			153,353
Local Municipal Obligations, at Amortized Cost					$	240
Local Municipal Obligations, at Fair Value					240
US Government Agency Securities, at Amortized Cost							$	7,051


Available-For-Sale Securities
	U.S. Treasuries		U.S. Government & Agency Obligations		State and Municipal Obligations		Mortgage- Backed Securities		Corporate and Other Debt Securities		Total Available- For-Sale Securities
US Government Agency Securities, at Fair Value							6,714
Government Sponsored Entity Securities, at Amortized Cost							276,417
Government Sponsored Entity Securities, at Fair Value							240,076
Corporate Trust Preferred Securities, at Amortized Cost									$	1,000
Corporate Trust Preferred Securities, at Fair Value									947

December 31, 2023
Available-For-Sale Securities, at Amortized Cost	$	73,761	$	160,000	$	280	$	305,161	$	1,000	$	540,202
Gross Unrealized Gains	243		51		—		6		—		300
Gross Unrealized Losses	—		(7,126)		—		(35,407)		(200)		(42,733)
Available-For-Sale Securities, at Fair Value	74,004		152,925		280		269,760		800		497,769
Available-For-Sale Securities, Pledged as Collateral, at Fair Value											242,938

Securities in a Continuous Loss Position, at Fair Value:
Less than 12 Months	$	—	$	—	$	—	$	—	$	—	$	—
12 Months or Longer	—		137,874		—		269,286		800		407,960
Total	$	—	$	137,874	$	—	$	269,286	$	800	$	407,960
Number of Securities in a Continuous Loss Position	—		19		—		97		1		117

Unrealized Losses on Securities in a Continuous Loss Position:
Less than 12 Months	$	—	$	—	$	—	$	—	$	—	$	—
12 Months or Longer	—		7,126		—		35,407		200		42,733
Total	$	—	$	7,126	$	—	$	35,407	$	200	$	42,733

Disaggregated Details:


US Treasuries, at Amortized Cost	$	73,761
US Treasuries, at Fair Value	74,004
US Agency Obligations, at Amortized Cost			$	160,000
US Agency Obligations, at Fair Value			152,925
Local Municipal Obligations, at Amortized Cost					$	280
Local Municipal Obligations, at Fair Value					280
US Government Agency Securities, at Amortized Cost							$	7,291
US Government Agency Securities, at Fair Value							6,864
Government Sponsored Entity Securities, at Amortized Cost							297,870
Government Sponsored Entity Securities, at Fair Value							262,896
Corporate Trust Preferred Securities, at Amortized Cost									$	1,000


Available-For-Sale Securities
	U.S. Treasuries		U.S. Government & Agency Obligations		State and Municipal Obligations		Mortgage- Backed Securities		Corporate and Other Debt Securities		Total Available- For-Sale Securities
Corporate Trust Preferred Securities, at Fair Value									800



June 30, 2023
Available-For-Sale Securities, at Amortized Cost	$	—	$	190,000	$	280	$	414,995	$	1,000	$	606,275
Gross Unrealized Gains	—		—		—		3		—		3
Gross Unrealized Losses	—		(13,984)		—		(48,386)		(200)		(62,570)
Available-For-Sale Securities, at Fair Value	—		176,016		280		366,612		800		543,708
Available-For-Sale Securities, Pledged as Collateral, at Fair Value											362,707

Securities in a Continuous Loss Position, at Fair Value:
Less than 12 Months	$	—	$	29,509	$	—	$	24,851	$	—	$	54,360
12 Months or Longer	—		146,505		—		341,648		800		488,953
Total	$	—	$	176,014	$	—	$	366,499	$	800	$	543,313
Number of Securities in a Continuous Loss Position	—		25		—		154		1		180

Unrealized Losses on Securities in a Continuous Loss Position:
Less than 12 Months	$	—	$	490	$	—	$	551	$	—	$	1,041
12 Months or Longer	—		13,494		—		47,835		200		61,529
Total	$	—	$	13,984	$	—	$	48,386	$	200	$	62,570

Disaggregated Details:
US Treasury Obligations, at Amortized Cost	$	—
US Treasury Obligations, at Fair Value	—
US Agency Obligations, at Amortized Cost			$	190,000
US Agency Obligations, at Fair Value			176,016
Local Municipal Obligations, at Amortized Cost					$	280
Local Municipal Obligations, at Fair Value					280
US Government Agency Securities, at Amortized Cost							$	7,573
US Government Agency Securities, at Fair Value							7,048
Government Sponsored Entity Securities, at Amortized Cost							407,422
Government Sponsored Entity Securities, at Fair Value							359,564
Corporate Trust Preferred Securities, at Amortized Cost									$	1,000
Corporate Trust Preferred Securities, at Fair Value									800

At June 30, 2024, there was no allowance for credit losses for the AFS debt securities portfolio.

The following table is the schedule of Held-To-Maturity Securities at June 30, 2024, December 31, 2023 and June 30, 2023:


Held-To-Maturity Securities
	State and Municipal Obligations		Mortgage- Backed Securities		Total Held-To Maturity Securities
June 30, 2024
Held-To-Maturity Securities, at Amortized Cost	$	91,659	$	7,689	$	99,348

Gross Unrealized Losses	(2,530)		(364)		(2,894)
Held-To-Maturity Securities, at Fair Value	89,129		7,325		96,454
Held-To-Maturity Securities, Pledged as Collateral, at Carrying Value					79,625
Held-To-Maturity Securities, Pledged as Collateral, at Fair Value					76,732

Maturities of Debt Securities, at Amortized Cost:
Within One Year	$	46,357	$	—	$	46,357
From 1 - 5 Years	43,785		7,689		51,474
From 5 - 10 Years	1,511		—		1,511
Over 10 Years	6		—		6

Maturities of Debt Securities, at Fair Value:
Within One Year	$	45,702	$	—	$	45,702
From 1 - 5 Years	41,956		7,325		49,281
From 5 - 10 Years	1,465		—		1,465
Over 10 Years	6		—		6

Securities in a Continuous Loss Position, at Fair Value:
Less than 12 Months	$	236	$	—	$	236
12 Months or Longer	73,733		7,325		81,058
Total	$	73,969	$	7,325	$	81,294

Number of Securities in a Continuous Loss Position	237		16		253

Unrealized Losses on Securities in a Continuous Loss Position:
Less than 12 Months	$	4	$	—	$	4
12 Months or Longer	2,526		364		2,890
Total	$	2,530	$	364	$	2,894

Disaggregated Details:
Municipal Obligations, at Amortized Cost	$	91,659
Municipal Obligations, at Fair Value	89,129
US Government Agency Securities, at Amortized Cost			$	2,722


Held-To-Maturity Securities
	State and Municipal Obligations		Mortgage- Backed Securities		Total Held-To Maturity Securities
US Government Agency Securities, at Fair Value			2,583
Government Sponsored Entity Securities, at Amortized Cost			4,967
Government Sponsored Entity Securities, at Fair Value			4,742

December 31, 2023
Held-To-Maturity Securities, at Amortized Cost	$	122,450	$	8,945	$	131,395

Gross Unrealized Losses	(2,157)		(401)		(2,558)
Held-To-Maturity Securities, at Fair Value	120,293		8,544		128,837
Held-To-Maturity Securities, Pledged as Collateral, at Carrying Value					115,030
Held-To-Maturity Securities, Pledged as Collateral, at Fair Value					112,472

Securities in a Continuous Loss Position, at Fair Value:
Less than 12 Months	$	1,472	$	—	$	1,472
12 Months or Longer	102,839		8,544		111,383
Total	$	104,311	$	8,544	$	112,855
Number of Securities in a Continuous Loss Position	319		16		335

Unrealized Losses on Securities in a Continuous Loss Position:
Less than 12 Months	$	14	$	—	$	14
12 Months or Longer	2,143		402		2,545
Total	$	2,157	$	402	$	2,559

Disaggregated Details:
Municipal Obligations, at Amortized Cost	$	122,450
Municipal Obligations, at Fair Value	120,293
US Government Agency Securities, at Amortized Cost			$	3,114
US Government Agency Securities, at Fair Value			2,954
Government Sponsored Entity Securities, at Amortized Cost			5,831
Government Sponsored Entity Securities, at Fair Value			5,589


Held-To-Maturity Securities
	State and Municipal Obligations		Mortgage- Backed Securities		Total Held-To Maturity Securities
June 30, 2023
Held-To-Maturity Securities, at Amortized Cost	$	133,176	$	10,284	$	143,460
Gross Unrealized Gains	—		—		—
Gross Unrealized Losses	(3,717)		(600)		(4,317)
Held-To-Maturity Securities, at Fair Value	129,459		9,684		139,143
Held-To-Maturity Securities, Pledged as Collateral, at Carrying Value					120,449
Held-To-Maturity Securities, Pledged as Collateral, at Fair Value					115,674

Securities in a Continuous Loss Position, at Fair Value:
Less than 12 Months	$	19,210	$	—	$	19,210
12 Months or Longer	94,163		9,684		103,847
Total	$	113,373	$	9,684	$	123,057
Number of Securities in a Continuous Loss Position	343		16		359

Unrealized Losses on Securities in a Continuous Loss Position:
Less than 12 Months	$	292	$	—	$	292
12 Months or Longer	3,425		600		4,025
Total	$	3,717	$	600	$	4,317


Disaggregated Details:
Municipal Obligations, at Amortized Cost	$	133,176
Municipal Obligations, at Fair Value	129,459
US Government Agency Securities, at Amortized Cost			$	3,516
US Government Agency Securities, at Fair Value			3,295
Government Sponsored Entity Securities, at Amortized Cost			6,768
Government Sponsored Entity Securities, at Fair Value			6,389

In the tables above, maturities of mortgage-backed securities are included based on their contractual lives. Actual maturities will differ because issuers may have the right to call or prepay obligations with or without prepayment penalties.

Arrow's investment policy requires that investments held in our portfolio be investment grade or better at the time of purchase. Arrow performs an analysis of the creditworthiness of municipal obligations to determine if a security is of investment grade. The analysis may include but may not solely rely upon credit analysis conducted by external credit rating agencies.

Arrow evaluates AFS debt securities in unrealized loss positions at each measurement date to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or non-credit-related factors. Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized within the allowance for credit losses on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings via credit loss expense. Arrow determined that at June 30, 2024, gross unrealized losses were attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. Arrow does not intend to sell, nor is it more likely than not that Arrow will be required to sell any securities before recovery of its amortized cost basis, which may be at maturity. Therefore, Arrow carried no allowance for credit loss at June 30, 2024 and there was no credit loss expense recognized by Arrow with respect to the securities portfolio during the three months ended June 30, 2024.

Arrow's HTM debt securities are comprised of U.S. government-sponsored enterprises (GSEs) or state and municipal obligations. GSE securities carry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as “risk free,” and have a long history of zero credit loss. Arrow determined that the expected credit loss on its HTM debt portfolio was immaterial and therefore no allowance for credit loss was recorded as of June 30, 2024.

The following table is the schedule of Equity Securities at June 30, 2024, December 31, 2023 and June 30, 2023:

Equity Securities

June 30, 2024

December 31, 2023

June 30, 2023

Equity Securities, at Fair Value

$1,996

$1,925

$1,889

The following is a summary of realized and unrealized gains and losses recognized in net income on equity securities during the three and six month periods ended June 30, 2024 and 2023:


	For the Three Months Ended June 30,		For the Six Months Ended June 30,
	2024		2023		2024		2023
Net Gain (Loss) on Equity Securities	$	54	$	(181)	$	71	$	(285)
Less: Net gain recognized during the reporting period on equity securities sold during the period	—		—		—		—
Unrealized net gain (loss) recognized during the reporting period on equity securities still held at the reporting date	$	54	$	(181)	$	71	$	(285)