Dive Brief:

• Glens Falls, New York-based Arrow Bank will merge with Utica, New York-based Adirondack Bank in an $89.1 million deal set to close by June, the companies said Thursday.
• The combination will create a $5.4 billion-asset bank and expand Arrow’s footprint westward into the Mohawk Valley and north to mountain resort towns such as Lake Placid and Saranac Lake.
• The merger will add 19 branches to Arrow’s existing 39-location network and boost the company’s profile with $942 million in added assets, $848 million in deposits and $624 million in loans.

Dive Insight:

If the latter half of 2025 was dominated by a spate of multibillion-dollar acquisitions such as Fifth Third’s $10.9 billion absorption of Comerica and Huntington’s $7.4 billion purchase of Cadence, the Arrow-Adirondack deal may herald a trend that analysts had flagged as a possibility.

While regional lenders may scoop up banks with $10 billion to $100 billion in assets, observers told Banking Dive in January, banks like Adirondack, in the sub-$1 billion-asset range, may find a slimmer pool of potential buyers.

“As upstream asset-size banks are consolidating, downstream banks are saying, ‘Hey, here was my likely buyer that I used to think would be interested in me, and they’ve now doubled in size over the last few years. Don’t know if they’re still going to be interested in me. So maybe I should do something sooner than later, before my buyer universe disappears or changes drastically,’” Kirk Hovde, managing principal and head of investment banking at Hovde Group, said in December.

There’s no indication whether that was the case with Arrow and Adirondack. Arrow CEO David DeMarco said the deal demonstrates his bank’s “commitment to accelerating our growth and expanding our market presence.”

“Bringing together these two institutions allows us to complement Adirondack's current product offerings with our wealth management and insurance services and deliver meaningful value for our shareholders,” DeMarco said in a statement Thursday.

Adirondack CEO Rocco Arcuri Sr. will remain with Arrow as regional president after the transaction closes. He’ll also join Arrow’s board of directors.

"In Arrow, we have found a partner that shares our own culture and values and, like Adirondack, has a history of providing excellent customer service while supporting the communities it serves,” Arcuri said Thursday. “Aligning our two community banks will create a more robust organization equipped for the future while benefitting our customers who will have the local support they expect with access to more products, services and locations.”

Each outstanding Adirondack share will be converted into 1.8610 shares of Arrow plus $18.72 in cash, the companies said Thursday. The deal’s $89.1 million value stems from a per-share implied consideration value of $82.79, based on Arrow’s closing stock price from Wednesday of $34.43 per share, the banks said.

Arrow estimates earnings-per-share accretion of roughly 18% by 2027 and an earn-back period of 2.9 years for tangible book value per share.

Upstate New York is not without its share of acquisition-minded local and regional banks. NBT Bank, based in Norwich, roughly an hour’s drive from Adirondack’s Utica headquarters, bought Evans Bank in 2024 – a deal that helped push its asset total to around $16 billion, and push its footprint west toward Buffalo.

Buffalo-based M&T, considerably larger at $212.9 billion in assets, has eschewed the idea of expanding to a national presence, contrary to what some of its peers are doing.

“As you get further and further away from home and [add] more geographies, I think the management challenge goes up,” M&T CEO Rene Jones said at a conference in November. “Because you’re really an organization that is built around culture, and cultural norms, some of which are documented, many of which are not.”

M&T has not sworn off acquisitions. Jones, for one, said, “If we had the right transaction to do, we would do it.”

“There could be something out there that really is maybe not that meaningful to the bank, but really meaningful to the region,” he said in November.

It is unclear whether Adirondack would have warranted interest from larger upstate New York lenders.

But DeMarco framed Thursday’s deal as a melding on a cultural level.

“Arrow Bank and Adirondack Bank are two deeply rooted and culturally aligned community banks that share a long-standing commitment to building strong relationships, understanding the important role we play in local economic growth and community support,” he said.