Exhibit 99.1
May 4, 2023 | ||||||||||||||||||||||||||
Dear Fellow Shareholders: We are pleased to report the financial results of the first quarter of 2023. Consolidated net income for the first quarter was $2.98 million, or $0.66 per share compared to $2.48 million, or $0.55 per share, for the same period in 2022, an increase of $495 thousand, or 20.0%. Total assets were $1.36 billion as of March 31, 2023, compared to $1.23 billion as of March 31, 2022, an increase of $128.5 million, or 10.4%. Asset growth was primarily driven by loans. Total loans outstanding as of March 31, 2023, were $976.6 million, which included $2.8 million in loans held for sale, compared to $831.0 million as of March 31, 2022, with $2.3 million in loans held for sale, and increase of 17.5%. Total deposits were $1.23 billion as of March 31, 2023, and include $108.0 million of purchased brokered deposits compared to $1.31 billion as of March 31, 2022 with no purchased deposits. The utilization of purchased brokered deposits provides an additional source of funds to bridge funding needs as we seek to grow our core deposits. Also, advances from the Federal Home Loan Bank totaling $45.1 million were outstanding as of March 31, 2023, compared to no outstanding advances as of March 31, 2022. Since our last writing, Silicon Valley Bank and Signature Bank failed, with the FDIC guarantying both insured and uninsured deposits. These banks were victims of classic “bank runs” where depositors withdrew large sums anticipating insolvency, exhausting each bank’s short-term liquidity rendering them unable to meet depositor demands. These were large regional niche banks specializing in catering to start up businesses, venture capital clients, and the cryptocurrency industry. These failures spotlighted two separate concerns about the banking industry. The first is the vulnerability of banks with large exposures to uninsured deposits. The two failed banks were carrying 90% or more of deposits not insured | by the FDIC. In contrast, only 28.5% of the deposits held at Union Bank at quarter end were not insured by the FDIC. The second issue illuminated by the bank failures was the status of most bank’s bond portfolios. During the Covid Pandemic, fiscal and monetary policy initiatives expanded the money supply in the US economy. These funds found their way onto bank balance sheets. These surges in deposits outpaced the industry’s ability to identify and fund quality loans. As a result, banks invested excess funds in bonds when interest rates were quite low. With the recent sharp increase in interest rates, the market value of bank’s bond portfolios has declined, resulting in unrealized losses in their bond portfolios. Union is no exception and also has unrealized losses in our bond portfolio, most of which return monthly cash flow over time. We have ample sources of liquidity to fund our current and future cash needs including customer deposits, brokered deposits, and other borrowings. We will use these sources strategically to manage our funding costs, which will be challenging this year. In response to the recent bank failures the Federal Reserve has implemented programs to ensure that US depository institutions have adequate access to liquidity to meet their depositors needs. We continue to evaluate these programs and have not needed to access them. We have managed our company through good times and bad, and are confident in our ability serve our communities into the future. The Board of Directors declared a cash dividend of $0.36 per share for the quarter payable May 4, 2023, to shareholders of record as of April 29, 2023. | |||||||||||||||||||||||||
If you need assistance with a change in registration of certificates, combining your certificates into one, reporting lost certificates, non-receipt or loss of dividend checks, assistance regarding direct deposit of dividends, information about the Company, or to receive copies of financial reports, please contact Kristy Adams Alfieri, Assistant Secretary at 802.888.0982 or contact our Transfer Agent at the address and phone number listed below: | ||||||||||||||||||||||||||
TRANSFER AGENT: | ||||||||||||||||||||||||||
Broadridge Corporate Issuer Solutions, Inc. P.O. Box 1342 Brentwood, NY 11717 866.321.8022 or 720.378.5956 E-mail: shareholder@broadridge.com | ||||||||||||||||||||||||||
NASDAQ STOCK MARKET | ||||||||||||||||||||||||||
Ticker Symbol: UNB Corporate Name: Union Bankshares, Inc. Corporate Address: 20 Lower Main Street P.O. Box 667 Morrisville, VT 05661-0667 Investor Relations: UBLocal.com | ||||||||||||||||||||||||||
Neil J. Van Dyke Chair | David S. Silverman President & Chief Executive Officer | |||||||||||||||||||||||||
About Union Bankshares | ||||||||||||||||||||||||||
Union Bankshares, Inc. operates as the holding company for Union Bank, which provides commercial, retail and municipal banking services and asset management services throughout northern Vermont and New Hampshire. Union Bank was founded in 1891 in Morrisville, Vermont, where the Bank’s and its holding company’s headquarters are located. Union Bank operates 18 banking offices, three loan centers and several ATMs throughout its geographical footprint. Union Bank has been helping people buy homes and local businesses create jobs in area communities since opening its doors over 130 years ago. Union Bank has earned an exceptional reputation for residential lending programs and has been recognized by the US Department of Agriculture, Rural Development for the positive impact made in the lives of first time home buyers. Union Bank is consistently one of the top Vermont Housing Finance Agency mortgage originators. Additionally, Union Bank has also been designated as an SBA Preferred lender for its participation in small business lending. Union Bank has received an "Outstanding" rating for its compliance with the Community Reinvestment Act (CRA). An institution in this group has an excellent record of helping to meet the credit needs of its assessment area, particularly in low-and moderate income neighborhoods, in a manner consistent with its resources and capabilities. | ||||||||||||||||||||||||||
Consolidated Balance Sheets (unaudited, in thousands) | Consolidated Statements of Income (unaudited, in thousands) | Union Bankshares, Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DIRECTORS | OFFICERS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Neil J. Van Dyke - Chair | Neil J. Van Dyke - Chair | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ASSETS | March 31, 2023 | March 31, 2022 | March 31, 2023 | March 31, 2022 | March 31, 2023 | Timothy W. Sargent - Vice Chair | David S. Silverman - President & CEO | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Joel S. Bourassa | Karyn J. Hale - Chief Financial Officer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(3 months ended) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dawn D. Bugbee | Timothy W. Sargent - Secretary | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Due from Banks | $ | 4,340 | $ | 5,047 | Interest Income | $ | 13,044 | $ | 9,726 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Nancy C. Putnam | Kristy Adams Alfieri - Assistant Secretary | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gregory D. Sargent | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Federal Funds Sold & Overnight Deposits | 17,479 | 45,755 | Interest Expense | 3,069 | 763 | David S. Silverman | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Interest Income | 9,975 | 8,963 | Janet P. Spitler | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Bearing Deposits in Banks | 16,428 | 14,192 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Loss Expense | 90 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | 276,767 | 273,424 | Net Interest Income After Credit Loss Expense | 9,885 | 8,963 | Union Bank | REGIONAL ADVISORY BOARD MEMBERS | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Held for Sale | 2,849 | 2,349 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wealth Management Income | 211 | 209 | DIRECTORS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans, net | 973,767 | 828,614 | Noninterest Income | 1,950 | 1,846 | Neil J. Van Dyke - Chair | Michael R. Barrett - St. Johnsbury | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Timothy W. Sargent - Vice Chair | Steven J. Bourgeois - St. Albans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Credit Losses | (6,934) | (8,336) | Noninterest Expenses: | Joel S. Bourassa | Andrew A. Dean - Northern NH | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Salaries & Wages | 3,502 | 3,410 | Dawn D. Bugbee | Stanley T. Fillion - Northern NH | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premises and Equipment, net | 20,256 | 21,320 | Mary K. Parent | Rosemary H. Gingue - St. Johnsbury | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefits | 1,377 | 1,305 | Nancy C. Putnam | John M. Goodrich - St. Johnsbury | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Interest & other Assets | 57,103 | 51,178 | Gregory D. Sargent | Christopher M. Knapp - Northern NH | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
David S. Silverman | Coleen K. Kohaut - St. Albans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Assets | $ | 1,362,055 | $ | 1,233,543 | Occupancy Expense, net | 578 | 527 | Janet P. Spitler | Justin P. Lavely - St. Johnsbury | ||||||||||||||||||||||||||||||||||||||||||||||||||
Daniel J. Luneau - St. Albans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equipment Expense | 897 | 916 | Samuel H. Ruggiano - St. Albans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Christine A. Sheley - Northern NH | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David S. Silverman - All | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LIABILITIES & SHAREHOLDERS' EQUITY | March 31, 2023 | March 31, 2022 | Other Expenses | 2,256 | 1,956 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Union Bank Offices (ATMs at all Branch Locations) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | 8,610 | 8,114 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noninterest Bearing Deposits | $ | 262,488 | $ | 303,077 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Before Taxes | 3,436 | 2,904 | VERMONT | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Bearing Deposits | 709,401 | 726,864 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Berlin | 1028 US Route 302 | 802.476.0061 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Time Deposits | 254,089 | 104,303 | Income Tax Expense | 459 | 422 | Fairfax | Jct. Routes 104 & 128 | 802.849.2600 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Hardwick | 103 VT Route 15 West | 802.472.8100 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowed Funds | 45,106 | — | Net income | $ | 2,977 | $ | 2,482 | Jeffersonville | 5062 VT Route 15 | 802.644.6600 | |||||||||||||||||||||||||||||||||||||||||||||||||
Jericho | 368 VT Route 15 | 802.899.7500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subordinated Notes | 16,213 | 16,179 | Earnings per share | $ | 0.66 | $ | 0.55 | Johnson | 198 Lower Main Street | 802.635.6600 | |||||||||||||||||||||||||||||||||||||||||||||||||
Lyndonville | 183 Depot Street | 802.626.3100 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Interest & Other Liabilities | 14,166 | 13,703 | Book Value Per Share | $ | 13.44 | $ | 15.45 | Morrisville | 20 Lower Main Street | 802.888.6600 | |||||||||||||||||||||||||||||||||||||||||||||||||
65 Northgate Plaza | 802.888.6860 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | 9,965 | 9,937 | Shelburne | 5068 Shelburne Road | 802.985.0250 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
St. Albans | 15 Mapleville Depot | 802.524.9000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Paid-in Capital | 2,353 | 1,878 | St. Johnsbury | Operations and Loan Center | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retained Earnings | 364 Railroad Street | 802.748.3131 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
86,060 | 79,259 | Branch | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive (loss) Income | (33,514) | (17,426) | 325 Portland Street | 802.748.3121 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stowe | 47 Park Street | 802.253.6600 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Williston | Branch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasury Stock at Cost | (4,272) | (4,231) | 31 Market St | 802.878.7900 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan Center | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Liabilities & Shareholders' Equity | $ | 1,362,055 | $ | 1,233,543 | 31 Market St | 802.865.1000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Standby letters of credit were $1,542,000 and $2,143,000 at March 31, 2023 and 2022, respectively. | NEW HAMPSHIRE | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Groveton | 3 State Street | 603.636.1611 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Littleton | 263 Dells Road | 603.444.7136 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
76 Main Street | 603.444.5321 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lincoln | 135 Main Street | 603.745.4000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
North Conway | Commercial Loan Center | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2541 White Mountain Hwy | 603.662.9408 |