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Loans
 3 Months Ended
Mar. 31, 2026
Receivables [Abstract]  
Loans LOANS (In Thousands)
Loan Categories and Past Due Loans

The following two tables present loan balances outstanding as of March 31, 2026 and December 31, 2025 and an analysis of the recorded investment in loans that are past due at these dates. Generally, Arrow considers a loan past due 30 or more days when the borrower is two payments past due. Loans held-for-sale of $490 thousand and $3.4 million as of March 31, 2026 and December 31, 2025, respectively, are included in the residential real estate balances for current loans.

Schedule of Past Due Loans by Loan Category
Commercial
CommercialReal EstateConsumerResidentialTotal
March 31, 2026
Loans past due 30-59 days$514 $— $13,620 $5,233 $19,367 
Loans past due 60-89 days175 — 4,606 1,059 5,840 
Loans past due 90 or more days304 — 1,290 1,960 3,554 
Total loans past due993 — 19,516 8,252 28,761 
Current loans168,606 811,770 1,052,027 1,377,802 3,410,205 
Total Loans$169,599 $811,770 $1,071,543 $1,386,054 $3,438,966 
December 31, 2025
Loans past due 30-59 days$584 $— $13,476 $808 $14,868 
Loans past due 60-89 days255 2,888 7,495 3,503 14,141 
Loans past due 90 or more days195 — 1,886 3,517 5,598 
Total loans past due1,034 2,888 22,857 7,828 34,607 
Current loans164,695 815,371 1,053,150 1,385,270 3,418,486 
Total loans$165,729 $818,259 $1,076,007 $1,393,098 $3,453,093 

Schedule of Nonaccrual Loans by Category
Commercial
March 31, 2026CommercialReal EstateConsumerResidentialTotal
Loans 90 or more days past due
  and Still Accruing Interest		$— $— $— $621 $621 
Nonaccrual loans304 — 1,355 2,143 3,802 
Nonaccrual with no allowance for credit loss— — — 1,027 1,027 
December 31, 2025
Loans 90 or more days past due
  and Still Accruing Interest		$27 $— $31 $1,983 $2,040 
Nonaccrual loans168 — 1,879 4,368 6,415 
Nonaccrual with no allowance for credit loss168 — 1,879 4,368 6,415 

The Company recognized $0 of interest income on nonaccrual loans during the three months ended March 31, 2026.
Arrow disaggregates its loan portfolio into the following four categories:

Commercial - Arrow offers a variety of loan options to meet the specific needs of our commercial customers including term loans, time notes and lines of credit. Such loans are made available to businesses for working capital needs such as inventory and receivables, business expansion and equipment purchases. Generally, a collateral lien is placed on equipment or other assets owned by the borrower. In the event of default by the borrower, Arrow may be required to liquidate collateral at deeply discounted values. To reduce the risk, management usually obtains personal guarantees to support the borrowing, as permitted by applicable law.

Commercial Real Estate - Arrow offers commercial real estate loans to finance real estate purchases, refinancings, expansions and improvements to commercial properties. Commercial real estate loans are made to finance the purchases of real property which generally consists of real estate with completed structures. These commercial real estate loans are typically secured by first liens on the real estate, which may include apartments, hotels, commercial structures, housing businesses, healthcare facilities, and both owner- and non-owner-occupied facilities. Arrow also offers commercial construction and land development loans to finance projects. Many projects will ultimately be used by the borrowers' businesses, while others are developed for resale. These real estate loans are also typically secured by first liens on the real estate, which may include apartments, hotels, commercial structures, housing businesses, healthcare facilities and both owner-occupied and non-owner-occupied facilities. There is elevated risk during the construction period, since the loan is secured by an incomplete project. Arrow’s commercial real estate loans are primarily located within the footprint of the Company’s branch network, with some loans extending into the greater upstate New York area. Arrow does not provide commercial real estate loans in major metropolitan areas such as New York City, Boston, etc.

Consumer Loans - This category is primarily comprised of automobile loans. Arrow primarily finances the purchases of automobiles indirectly through dealer relationships located throughout upstate New York and Vermont. Most automobile loans carry a fixed rate of interest with principal repayment terms typically ranging from three to seven years. Automobile loans are underwritten on a secured basis using the underlying collateral being financed. Arrow also offers a variety of consumer installment loans to finance personal expenditures. Most of these loans carry a fixed rate of interest with principal repayment terms typically ranging from one to five years, based upon the nature of the collateral and the size of the loan. In addition to installment loans, Arrow also offers personal lines of credit and overdraft protection. Several of these consumer loans are unsecured, which carry a higher risk of loss.

Residential - Residential real estate loans consist primarily of loans secured by first or second mortgages on primary residences. Arrow originates fixed-rate and adjustable-rate one-to-four-family residential real estate loans for the construction, purchase of real estate or refinancing of an existing mortgage. These loans are collateralized primarily by owner-occupied properties generally located in Arrow's market area. Loans on one-to-four-family residential real estate are generally originated in amounts of no more than 80% of the purchase price or appraised value (whichever is lower), or have private mortgage insurance. Arrow’s underwriting analysis for residential mortgage loans typically includes credit verification, independent appraisals, and a review of the borrower’s financial condition. Mortgage title insurance and hazard insurance are normally required. It is Arrow's general practice to underwrite residential real estate loans to secondary market standards. Construction loans have a unique risk, because they are secured by an incomplete dwelling. This risk is reduced through periodic site inspections, including one at each loan draw period. In addition, Arrow offers fixed home equity loans, as well as home equity lines of credit to consumers to finance home improvements, debt consolidation, education and other uses.  Arrow originates home equity lines of credit and second mortgage loans (loans secured by a second junior lien position on one-to-four-family residential real estate).  Risk is generally reduced through underwriting criteria, which include credit verification, appraisals, a review of the borrower's financial condition, and personal cash flows.  A security interest, with title insurance when necessary, is taken in the underlying real estate.

Allowance for Credit Losses

Loan segments were selected by class code and application code to ensure each segment is comprised of loans with homogenous loan characteristics and similar risk profiles. The resulting loan segments are commercial, commercial real estate, consumer and residential real estate loans. Please see Note 2. Accounting Policies to the Consolidated Financial Statements for additional detail on our Allowance for Credit Losses.
The following table details activity in the allowance for credit losses on loans for the three months ended March 31, 2026 and March 31, 2025:

Allowance for Credit Losses
CommercialCommercial Real EstateConsumerResidentialTotal
December 31, 2025$2,954 $15,260 $4,090 $12,018 $34,322 
Charge-offs$— $— $(1,560)$(14)$(1,574)
Recoveries$— $— $759 $— $759 
Provision$(499)$(703)$1,221 $529 $548 
March 31, 2026$2,455 $14,557 $4,510 $12,533 $34,055 
December 31, 2024$1,925 $14,507 $3,882 $13,284 $33,598 
Charge-offs$— $— $(1,519)$(31)$(1,550)
Recoveries$— $— $704 $— $704 
Provision$(124)$3,729 $1,080 $334 $5,019 
March 31, 2025$1,801 $18,236 $4,147 $13,587 $37,771 


Estimated Credit Losses on Off-Balance Sheet Credit Exposures Recognized as Other Liabilities

As of March 31, 2026 and December 31, 2025, estimated credit losses on unfunded off-balance sheet credit exposures were $1.1 million and $1.3 million, respectively, and were included in other liabilities on the consolidated balance sheets.

Individually Evaluated Loans

The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of March 31, 2026 and December 31, 2025:
March 31, 2026Collateral Type -Residential Real EstateCollateral Type - Commercial Real EstateTotal Loans
Commercial$— $— $— 
Commercial Real Estate— — — 
Consumer— — — 
Residential1,027 — 1,027 
Total$1,027 $— $1,027 

December 31, 2025Collateral Type -Residential Real EstateCollateral Type - Commercial Real EstateTotal Loans
Commercial$— $— $— 
Commercial Real Estate— — — 
Consumer— — — 
Residential3,172 — 3,172 
Total$3,172 $— $3,172 



Through the provision for credit losses, an allowance for credit losses is maintained that reflects the best estimate of the calculated expected credit losses in Arrow's loan portfolio as of the balance sheet date. Additions are made to the allowance for credit losses through a periodic provision for credit losses. Actual credit losses are charged against the allowance for credit losses when loans are deemed uncollectible and recoveries of amounts previously charged off are recorded as credits to the allowance for credit losses.
Arrow's loan officers and risk managers meet at least quarterly to discuss and review the conditions and risks associated with certain criticized and classified commercial-related relationships. In addition, the independent internal loan review department performs periodic reviews of the credit quality indicators on individual loans in the commercial loan portfolio.
Arrow considers the need to qualitatively adjust expected credit loss estimates for information not already captured in the loss estimation process. These qualitative factor adjustments may increase or decrease management’s estimate of expected credit losses. Adjustments are not made for information that has already been considered and included in the loss estimation
process.
Arrow considers the qualitative factors that are relevant as of the reporting date, which may include, but are not limited to the following factors:
•The nature and volume of Arrow's financial assets;
•The existence, growth, and effect of any concentrations of credit;
•The volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans;
•The value of the underlying collateral for loans that are not collateral-dependent;
•Arrow's lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries;
•The quality of Arrow's loan review function;
•The experience, ability, and depth of Arrow's lending, investment, collection, and other relevant management/staff;
•The effect of other external factors such as the regulatory, legal and technological environments; competition; and events such as natural disasters;
•Actual and expected changes in international, national, regional, and local economic and business conditions and developments in which the institution operates that affect the collectability of financial assets; and
•Other qualitative factors not reflected in quantitative loss rate calculations.

Loan Credit Quality Indicators and Modifications

Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay or interest rate reduction. In some cases, the Company provides multiple types of concession on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, may be granted. The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The Company did not modify loans to borrowers experiencing financial difficulty during the three months ended March 31, 2026 and 2025.
The following table presents the amortized cost basis of loans at March 31, 2026 that were both experiencing financial difficulty and modified during the trailing 12 months ended March 31, 2026, by class and by type of modification.
March 31, 2026
CurrentLoans Past Due 30-59 DaysLoans Past Due 60-89 DaysLoans Past Due 90 or more DaysTotal Loans Past Due
Commercial$— $— $— $— $— 
Commercial Real Estate— — — — — 
Consumer— — — — — 
Residential348 — — — — 
Total$348 $— $— $— $— 
There were no defaults during the three months ended March 31, 2026.
The following tables present credit quality indicators by total loans amortized cost basis by origination year as of March 31, 2026 and December 31, 2025:
Term Loans Amortized Cost Basis by Origination YearRevolving Loans Amortized Cost BasisRevolving Loan Converted to TermTotal
March 31, 202620262025202420232022Prior
Commercial:
Risk rating
Satisfactory$12,197 $39,452 $39,302 $18,748 $15,402 $28,085 $11,114 $— $164,300 
Special mention— 132 — 25 — — — — 157 
Substandard— — 88 293 745 2,861 1,155 — 5,142 
Doubtful— — — — — — — — — 
Total Commercial Loans$12,197 $39,584 $39,390 $19,066 $16,147 $30,946 $12,269 $— $169,599 
Current-period gross charge-offs$— $— $— $— $— $— $— $— $— 
Commercial Real Estate:
Risk rating
Satisfactory$8,157 $93,054 $113,161 $77,881 $133,042 $345,620 $3,286 $— $774,201 
Special mention— 301 6,317 778 7,449 7,653 — — 22,498 
Substandard— 2,527 — 141 2,960 9,179 264 — 15,071 
Doubtful— — — — — — — — — 
Total Commercial Real Estate Loans$8,157 $95,882 $119,478 $78,800 $143,451 $362,452 $3,550 $— $811,770 
Current-period gross charge-offs$— $— $— $— $— $— $— $— $— 
Consumer:
Risk rating
Performing$114,168 $349,748 $250,442 $169,275 $122,322 $63,771 $462 $— $1,070,188 
Nonperforming— 264 342 214 331 204 — — 1,355 
Total Consumer Loans$114,168 $350,012 $250,784 $169,489 $122,653 $63,975 $462 $— $1,071,543 
Current-period gross charge-offs$— $135 $469 $341 $293 $322 $— $— $1,560 
Residential:
Risk rating
Performing$17,463 $151,890 $166,240 $156,001 $201,232 $554,780 $135,684 $— $1,383,290 
Nonperforming— 204 475 285 — 1,548 252 — 2,764 
Total Residential Loans$17,463 $152,094 $166,715 $156,286 $201,232 $556,328 $135,936 $— $1,386,054 
Current-period gross charge-offs$— $— $— $— $— $14 $— $— $14 
Total Loans$151,985 $637,572 $576,367 $423,641 $483,483 $1,013,701 $152,217 $— $3,438,966 
Total gross
charge-offs		$— $135 $469 $341 $293 $336 $— $— $1,574 
Term Loans Amortized Cost Basis by Origination YearRevolving Loans Amortized Cost BasisRevolving Loan Converted to TermTotal
December 31, 202520252024202320222021Prior
Commercial:
Risk rating
Satisfactory$40,855 $41,908 $20,671 $15,915 $12,070 $19,917 $9,765 $— $161,101 
Special mention196 — 25 — — — — — 221 
Substandard— — 410 92 — 2,896 1,009 — 4,407 
Doubtful— — — — — — — — — 
Total Commercial Loans$41,051 $41,908 $21,106 $16,007 $12,070 $22,813 $10,774 $— $165,729 
Current-period gross charge-offs$— $— $— $— $— $— $— $— $— 
Commercial Real Estate:
Risk rating
Satisfactory$90,358 $113,616 $78,723 $128,103 $96,305 $264,374 $2,112 $— $773,591 
Special mention302 6,348 275 7,504 4,749 3,808 473 — 23,459 
Substandard2,127 — 341 4,104 304 14,069 264 — 21,209 
Doubtful— — — — — — — — — 
Total Commercial Real Estate Loans$92,787 $119,964 $79,339 $139,711 $101,358 $282,251 $2,849 $— $818,259 
Current-period gross charge-offs$— $— $— $— $1,656 $2,162 $— $— $3,818 
Consumer:
Risk rating
Performing$370,436 $281,349 $194,467 $144,210 $62,395 $20,796 $444 $— $1,074,097 
Nonperforming121 502 363 421 375 128 — — 1,910 
Total Consumer Loans$370,557 $281,851 $194,830 $144,631 $62,770 $20,924 $444 $— $1,076,007 
Current-period gross charge-offs$291 $1,472 $1,380 $1,367 $904 $271 $— $— $5,685 
Residential:
Risk rating
Performing$144,618 $172,965 $160,802 $206,858 $170,889 $395,132 $135,483 $— $1,386,747 
Nonperforming204 1,041 337 1,966 342 2,291 170 — 6,351 
Total Residential Loans$144,822 $174,006 $161,139 $208,824 $171,231 $397,423 $135,653 $— $1,393,098 
Current-period gross charge-offs$— $— $— $20 $— $31 $— $— $51 
Total Loans$649,217 $617,729 $456,414 $509,173 $347,429 $723,411 $149,720 $— $3,453,093 
Total gross
charge-offs		$291 $1,472 $1,380 $1,387 $2,560 $2,464 $— $— $9,554 

For the purposes of the table above, nonperforming consumer and residential loans were those loans on nonaccrual status or were 90 days or more past due and still accruing interest.
As of March 31, 2026 and December 31, 2025, the amortized cost of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process was $776 thousand and $795 thousand, respectively.
For the allowance calculation, an internally developed system of five credit quality indicators is used to rate the credit worthiness of each commercial loan defined as follows:
1) Satisfactory - "Satisfactory" borrowers have acceptable financial condition with satisfactory record of earnings and sufficient historical and projected cash flow to service the debt.  Borrowers have satisfactory repayment histories and primary and secondary sources of repayment can be clearly identified;
2) Special Mention - Loans in this category have potential weaknesses that deserve management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit
position at some future date.  "Special mention" assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.  Loans which might be assigned this credit quality indicator include loans to borrowers with deteriorating financial strength and/or earnings record and loans with potential for problems due to weakening economic or market conditions;
3) Substandard - Loans classified as “substandard” are inadequately protected by the current net worth or paying capacity of the borrower or the collateral pledged, if any.  Loans in this category have well defined weaknesses that jeopardize the repayment. They are characterized by the distinct possibility that Arrow will sustain some loss if the deficiencies are not corrected. “Substandard” loans may include loans which are likely to require liquidation of collateral to effect repayment, and other loans where character or ability to repay has become suspect. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified substandard;
4) Doubtful - Loans classified as “doubtful” have all of the weaknesses inherent in those classified as “substandard” with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of current existing facts, conditions, and values, highly questionable and improbable.  Although possibility of loss is extremely high, classification of these loans as “loss” has been deferred due to specific pending factors or events which may strengthen the value (e.g. possibility of additional collateral, injection of capital, collateral liquidation, debt restructure, economic recovery, etc.).  Loans classified as “doubtful” need to be placed on nonaccrual; and
5) Loss - Loans classified as “loss” are considered uncollectible with collateral of such little value that their continuance as bankable assets is not warranted.  As of the date of the balance sheet, all loans in this category have been charged-off to the allowance for loan losses.  
Commercial loans are generally evaluated on an annual basis depending on the size and complexity of the loan relationship, unless the credit related quality indicator falls to a level of "special mention" or below, when the loan is evaluated quarterly.  The credit quality indicator is one of the factors used in assessing the level of incurred risk of loss in our commercial related loan portfolios.