v3.25.2
Fair Values
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Values FAIR VALUES (Dollars In Thousands)
FASB defines fair value, establishes a framework for measuring fair value in GAAP and requires certain disclosures about fair value measurements. There are no nonfinancial assets or liabilities measured at fair value on a recurring basis. The only assets or liabilities that Arrow measured at fair value on a recurring basis at June 30, 2025 and December 31, 2024 were AFS securities, equity securities and derivatives. Arrow held no securities or liabilities for trading on such dates.
The table below presents the financial instrument's fair value and the amounts within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement:
Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis
Fair Value Measurements at Reporting Date Using:
Fair ValueQuoted Prices
In Active Markets for Identical Assets
(Level 1)		Significant Other
Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)
Fair Value of Assets and Liabilities Measured on a Recurring Basis:
June 30, 2025
Assets:
Securities Available-for Sale:
   U.S. Treasuries$100,113 $100,113 $— $— 
   U.S. Government & Agency Obligations24,620 — 24,620 $— 
   State and Municipal Obligations200 — 200 — 
   Mortgage-Backed Securities316,728 — 316,728 — 
   Corporate and Other Debt Securities6,017 — 6,017 — 
Total Securities Available-for-Sale447,678 100,113 347,565 — 
Equity Securities5,332 — 5,332 — 
Total Securities Measured on a Recurring Basis453,010 100,113 352,897 — 
Derivative Assets9,169 — 9,169 — 
Total Measured on a Recurring Basis$462,179 $100,113 $362,066 $— 
Liabilities:
Derivative Liabilities8,908 — 8,908 — 
Total Measured on a Recurring Basis$8,908 $— $8,908 $— 
December 31, 2024
Assets:
Securities Available-for Sale:
   U.S. Treasuries$98,070 $98,070 $— $— 
   U.S. Government & Agency Obligations69,214 — 69,214 — 
   State and Municipal Obligations240 — 240 — 
   Mortgage-Backed Securities294,608 — 294,608 — 
   Corporate and Other Debt Securities979 — 979 — 
Total Securities Available-for-Sale463,111 98,070 365,041 — 
Equity Securities5,055 — 5,055 — 
Total Securities Measured on a Recurring Basis468,166 98,070 370,096 — 
Derivative Assets 12,659 — 12,659 — 
Total Measured on a Recurring Basis$480,825 $98,070 $382,755 $— 
Liabilities:
Derivative Liabilities$8,638 $— $8,638 $— 
Total Measured on a Recurring Basis$8,638 $— $8,638 $— 
Fair ValueQuoted Prices
In Active Markets for Identical Assets
(Level 1)		Significant Other
Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		Gains (Losses) Recognized in Earnings
Fair Value of Assets and Liabilities Measured on a Nonrecurring Basis:
June 30, 2025
Collateral Dependent Evaluated Loans$— $— $— $— 
Other Real Estate Owned and Repossessed Assets, Net590 — — 590 — 
December 31, 2024
Collateral Dependent Impaired Loans$— $— $— $— 
Other Real Estate Owned and Repossessed Assets, Net458 — — 458 — 

The fair value of financial instruments is determined under the following hierarchy:
•Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
•Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and,
•Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Fair Value Methodology for Assets and Liabilities Measured on a Recurring Basis

The fair value of Level 1 AFS securities are based on unadjusted, quoted market prices from exchanges in active markets. The fair value of Level 2 AFS securities are based on an independent bond and equity pricing service for identical assets or significantly similar securities and an independent equity pricing service for equity securities not actively traded.  The pricing services use a variety of techniques to arrive at fair value including market maker bids, quotes and pricing models.  Inputs to the pricing models include recent trades, benchmark interest rates, spreads and actual and projected cash flows. The fair value of Level 2 equities are based on the last observable price in open markets.  The fair value of Level 2 derivatives is determined using inputs that are observable in the market place obtained from third parties including yield curves, publicly available volatilities, and floating indexes.

Fair Value Methodology for Assets and Liabilities Measured on a Nonrecurring Basis

The fair value of collateral dependent individually evaluated loans and other real estate owned is based on the fair value of the underlying collateral which is based on the appraised value less costs to sell. Significant unobservable inputs used in this valuation technique include capitalization rates which ranged from 7% - 10%. The appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. Arrow evaluates each of these assets for impairment at least annually, with no impairment recognized for these assets at June 30, 2025 and December 31, 2024.

Fair Value Methodology for Financial Instruments Not Measured on a Recurring or Nonrecurring Basis

The fair value for securities held-to-maturity is determined utilizing an independent bond pricing service for identical assets or significantly similar securities.  The pricing service uses a variety of techniques to arrive at fair value including market maker bids, quotes and pricing models.  Inputs to the pricing models include recent trades, benchmark interest rates, spreads and actual and projected cash flows.
Local municipal held-to-maturity securities are recorded at cost on the financial statements. That determination is due to several factors including that there is no reliable external pricing available, the vast majority of maturities are under 1-year, and each are guaranteed by their respective municipalities, who are in turn guaranteed by the State of New York.
ASU 2016-01 "Recognition and Measurement of Financial Assets and Financial Liabilities" requires that the fair value for loans must be disclosed using the "exit price" notion which is a reasonable estimate of what another party might pay in an orderly transaction. Fair values for loans are calculated for portfolios of loans with similar financial characteristics.  Loans are segregated by type such as commercial, commercial real estate, residential mortgage, indirect auto and other consumer loans.  Each loan category is further segmented into fixed and adjustable interest rate terms and by performing and nonperforming categories.  The fair value of performing loans is calculated by determining the estimated future cash flow, which is the contractual cash flow adjusted for estimated prepayments. The discount rate is determined by starting with current market yields, and first adjusting for a liquidity premium. This premium is separately determined for each loan type. Then a credit loss component is determined utilizing the credit loss assumptions used in the allowance for credit loss model. Finally, a discount spread is applied separately for consumer loans vs. commercial loans based on market information and utilization of the swap curve. 
The fair value of time deposits is based on the discounted value of contractual cash flows. The discount rates are estimated using the FHLBNY yield curve, which is considered representative of Arrow’s time deposit rates.
The fair value of FHLBNY advances is calculated by the FHLBNY.
The carrying amount of FHLBNY and FRB stock approximates fair value. If the stock was redeemed, Arrow will receive an amount equal to the par value of the stock.

Fair Value by Balance Sheet Grouping

The following table presents a summary of the carrying amount, the fair value (exit price) or an amount approximating fair value and the fair value hierarchy of Arrow’s financial instruments:
Schedule of Fair Values by Balance Sheet Grouping
Fair Value Hierarchy
Carrying ValueFair ValueLevel 1Level 2Level 3
June 30, 2025
Cash and Cash Equivalents$268,448 $268,448 $268,448 $— $— 
Securities Available-for-Sale447,678 447,678 100,113 347,565 — 
Securities Held-to-Maturity70,828 70,027 — 45,620 24,407 
Equity Securities5,332 5,332 — 5,332 — 
Federal Home Loan Bank and Federal
  Reserve Bank Stock		4,557 4,557 — 4,557 — 
Net Loans3,390,563 3,213,929 — — 3,213,929 
Accrued Interest Receivable15,009 15,009 — 15,009 — 
Derivative Assets9,169 9,169 9,169 
Deposits3,929,330 3,926,424 — 3,926,424 — 
Borrowings8,600 8,576 — 8,576 — 
Junior Subordinated Obligations Issued
  to Unconsolidated Subsidiary Trusts		20,000 19,563 — 19,563 — 
Accrued Interest Payable5,418 5,418 — 5,418 — 
Derivative Liabilities8,908 8,908 — 8,908 — 
December 31, 2024
Cash and Cash Equivalents$154,546 $154,546 $154,546 $— $— 
Securities Available-for-Sale463,111 463,111 98,070 365,041 — 
Securities Held-to-Maturity98,261 96,586 — 75,262 21,324 
Equity Securities5,055 5,055 5,055 
Federal Home Loan Bank and Federal
  Reserve Bank Stock		4,353 4,353 — 4,353 — 
Net Loans3,360,943 3,137,721 — — 3,137,721 
Accrued Interest Receivable13,229 13,229 — 13,229 — 
Derivative Assets12,659 12,659 — 12,659 — 
Deposits3,827,930 3,824,699 — 3,824,699 — 
Borrowings8,600 8,386 — 8,386 — 
Junior Subordinated Obligations Issued
  to Unconsolidated Subsidiary Trusts		20,000 20,000 — 20,000 — 
Accrued Interest Payable5,099 5,099 — 5,099 — 
Derivative Liabilities8,638 8,638 — 8,638 —