(By Balaseshan) Arrow Financial Corp. (NASDAQ: AROW), a multi-bank holding company, reported a 2.2% rise in quarterly earnings on an increase in the average level of interest-earning assets. Earnings came in line with Street's expectations.
Earnings for the fourth quarter were $5.55 million or $0.46 per share, up from $5.43 million or $0.45 per share last year. Analysts had expected a profit of $0.46 per share.
Net interest income rose 0.8% on a tax-equivalent basis to $15.28 million, due to an increase in the average level of interest-earning assets between the periods. Total non-interest income rose 11.3% to $6.90 million.
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The Glens Falls, New York-based company's tax-equivalent net interest margin fell to 3.13% from 3.25% as a result of operating in the historically low interest rate environment. Cost of funds fell by 41 basis points to 0.62%, while yield on earning assets decreased by 47 basis points to 3.64%.
The company said asset quality remained strong at December 31, 2012, as measured by its low level of nonperforming assets and charge-offs. Nonperforming assets of $9.1 million represented only 0.45% of period-end assets, far below industry averages, although up slightly from 0.41% ratio at December 31, 2011.
Net loan losses, expressed as an annualized percentage of average loans outstanding, were 0.04%, a decrease of 3 basis points from the 2011 comparable period. Allowance for loan losses was $15.3 million at December 31, 2012, which represented 1.30% of loans outstanding, a decrease of 3 basis points from last year.
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Total assets at December 31, 2012, rose 3.06% to $2.023 billion, while loan portfolio increased 3.61% to $1.172 billion.
AROW is trading up 0.03% at $24.53 on Tuesday. The stock has been trading between $22.60 and $26.62 for the past 52 weeks.