Arrow Financial (AROW) risk factors, FY2025 10-K

Arrow Financial's FY2025 10-K, filed Mar 06, 2026, lists 25 risk factors in 7 groups. Against the prior year's 20: 9 new, 4 dropped, 2 substantially reworded.

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Risk factors listed
257 groups
New this year
9vs 20 last year
Dropped
4since the prior 10-K
Substantially reworded
2of those kept
Section length
6k wordsItem 1A

What the changes say

  • Merger-related execution, regulatory approval, integration, and shareholder-value risks are prominent this year.
  • Commercial and consumer lending exposures are quantified at 29% and 33% of total loans, respectively.
  • Fraud, geopolitical disruption, dividends, and banking-regulation risks are newly emphasized.
  • Arrow’s liquidity risk now includes dependence on payments from Arrow Bank as its holding-company funding source.

What changed since the prior 10-K

New

  • NewMACROECONOMIC AND INDUSTRY RISKS

    Geopolitical and other external events, such as severe weather, natural disasters, public health emergencies and pandemics, acts of war or terrorism, and other external events could impact Arrow Bank’s ability to conduct business

    War, terrorism, severe weather, pandemics, and other external events could disrupt operations, damage collateral, impair borrowers, and reduce revenue.

  • NewRISKS RELATED TO MERGER WITH ADIRONDACK

    The market price of Arrow’s common stock may decline as a result of the Merger

    Arrow’s stock price could fall if the Merger disappoints analysts or shareholders sell shares after the transaction.

  • NewRISKS RELATED TO MERGER WITH ADIRONDACK

    Combining Arrow and Adirondack may be more difficult, costly or time-consuming than expected, and Arrow may fail to realize the anticipated benefits of the Merger

    Difficulties integrating Adirondack could delay or eliminate expected cost savings and operating efficiencies.

  • NewRISKS RELATED TO MERGER WITH ADIRONDACK

    The Agreement may be terminated in accordance with its terms and the Merger may not be completed

    The Merger could fail because shareholder, Nasdaq, regulatory, registration, or legal conditions are not satisfied.

  • NewOPERATIONAL RISKS

    Arrow Bank is subject to risks and losses resulting from fraudulent activities that could adversely impact its financial performance and results of operations

    Fraud involving loans, ACH, wires, ATMs, checks, debit cards, or online banking could cause losses, privacy breaches, litigation, and reputational damage.

  • NewLOAN PORTFOLIO RISKS

    Arrow Bank’s commercial and commercial real estate loans increase its exposure to credit risks

    The $984 million commercial and commercial real estate portfolio, 29% of loans, faces elevated losses if borrowers or industries weaken.

  • NewLOAN PORTFOLIO RISKS

    Arrow Bank’s indirect and consumer lending involves risk elements in addition to normal credit risk

    The $1.076 billion consumer portfolio, 33% of loans, includes indirect auto loans secured by depreciating vehicles that may not cover defaults.

  • NewRISKS RELATED TO OWNING OUR COMMON STOCK

    Arrow may not pay or may reduce the dividends paid on shares of its common stock, and its ability to pay dividends is subject to certain restrictions

    Arrow may reduce or eliminate dividends because payments require board approval, legally available funds, and compliance with Federal Reserve requirements.

  • NewLEGAL, TAX, REGULATORY AND COMPLIANCE RISKS

    Arrow operates in a highly regulated industry and face risks associated with noncompliance. Federal banking statutes and regulations could change in the future, which may adversely affect Arrow

    Banking regulation can restrict lending, require costly compliance and capital, and permit supervisors to limit operations or classify assets adversely.

Dropped

  • DroppedOPERATIONAL RISKS

    Health emergencies may adversely affect Arrow’s business activities, financial condition and results of operations

  • DroppedOPERATIONAL RISKS

    Arrow may not realize the anticipated benefits of unifying its two former subsidiary banks into one bank

  • DroppedRISKS RELATED TO OWNING OUR COMMON STOCK

    The Company relies on the operations of its subsidiaries to provide liquidity, which, if limited, could impact Arrow's ability to pay dividends to its shareholders or to repurchase its common stock

  • DroppedLEGAL, TAX, REGULATORY AND COMPLIANCE RISKS

    Federal banking statutes and regulations could change in the future, which may adversely affect Arrow

Reworded

  • 61% rewrittenMACROECONOMIC AND INDUSTRY RISKS

    The financial services industry is faced with technological advances and changes on a continuing basis, and failure to adapt to these advances and changes could have a material adverse impact on Arrow's business

    No substantive change; the technology-adaptation risk is unchanged from the prior year.

  • 50% rewrittenFINANCIAL RISKS

    Arrow’s financial condition and the results of its operations could be negatively impacted by changes in its liquidity position

    The risk now emphasizes Arrow’s reliance on Arrow Bank payments for dividends and obligations, replacing discussion of deposit competition and higher rates.

All 25 risk factors

Headings as the filing states them, in filing order.

MACROECONOMIC AND INDUSTRY RISKS

  1. 01Arrow remains subject to inflationary risk which could adversely impact our business and our customers
  2. 02Market conditions could present significant challenges to the U.S. commercial banking industry and its core business of making and servicing loans. Any substantial downturn in the regional markets in which Arrow operates or in the U.S. economy generally could adversely affect Arrow's ability to maintain and/or grow earnings
  3. 03Any future economic or financial downturn, including any significant correction in the equity markets, could adversely affect Arrow's volume of income attributable to, and demand for, fee-based services of Arrow Bank, including the Company's fiduciary business, which could negatively impact Arrow's financial condition and results of operations
  4. 04Arrow operates in a highly competitive industry and market areas that could negatively affect growth and profitability
  5. 05The financial services industry is faced with technological advances and changes on a continuing basis, and failure to adapt to these advances and changes could have a material adverse impact on Arrow's business61% rewritten
  6. 06Problems encountered by other financial institutions could adversely affect Arrow
  7. 07Geopolitical and other external events, such as severe weather, natural disasters, public health emergencies and pandemics, acts of war or terrorism, and other external events could impact Arrow Bank’s ability to conduct businessNew

RISKS RELATED TO MERGER WITH ADIRONDACK

  1. 08The market price of Arrow’s common stock may decline as a result of the MergerNew
  2. 09Combining Arrow and Adirondack may be more difficult, costly or time-consuming than expected, and Arrow may fail to realize the anticipated benefits of the MergerNew
  3. 10The Agreement may be terminated in accordance with its terms and the Merger may not be completedNew

OPERATIONAL RISKS

  1. 11Arrow faces continuing and growing security risks to its information base including the information maintained relating to customers, and any breaches in the security systems implemented to protect this information could have a material negative effect on Arrow's business operations and financial condition
  2. 12Arrow Bank is subject to risks and losses resulting from fraudulent activities that could adversely impact its financial performance and results of operationsNew
  3. 13Business could suffer if Arrow loses key personnel unexpectedly

FINANCIAL RISKS

  1. 14Arrow is subject to interest rate risk, which could adversely affect profitability
  2. 15Arrow Bank's allowance for expected credit losses may be insufficient, and an increase in the allowance would reduce earnings
  3. 16The increasing complexity of Arrow's operations presents varied risks that could affect earnings and financial condition
  4. 17Arrow’s financial condition and the results of its operations could be negatively impacted by changes in its liquidity position50% rewritten
  5. 18Arrow could recognize losses on securities held in its securities portfolio, particularly if interest rates increase or economic and market conditions deteriorate

LOAN PORTFOLIO RISKS

  1. 19Arrow Bank’s commercial and commercial real estate loans increase its exposure to credit risksNew
  2. 20Arrow Bank’s indirect and consumer lending involves risk elements in addition to normal credit riskNew

RISKS RELATED TO OWNING OUR COMMON STOCK

  1. 21Arrow may not pay or may reduce the dividends paid on shares of its common stock, and its ability to pay dividends is subject to certain restrictionsNew

LEGAL, TAX, REGULATORY AND COMPLIANCE RISKS

  1. 22Arrow operates in a highly regulated industry and face risks associated with noncompliance. Federal banking statutes and regulations could change in the future, which may adversely affect ArrowNew
  2. 23Capital and liquidity standards require banks and bank holding companies to maintain more and higher quality capital and greater liquidity than has historically been the case
  3. 24Non-compliance with the Patriot Act, Bank Secrecy Act, or other anti-money laundering laws and regulations could result in fines or sanctions and restrictions on conducting acquisitions or establishing new branches
  4. 25Arrow, through Arrow Bank, is subject to the CRA and fair lending laws, and failure to comply with these laws could lead to material penalties

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.