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Dear Shareholder: | May 13, 2010 |
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Union Bankshares had reasonable growth in assets, loans and deposits during the first quarter of 2010, while earnings decreased slightly from last year but are ahead of budget. The most significant items accounting for the earnings decrease between the first quarters of 2010 and 2009 were a reduction in gain on loans sold of $198,000 in 2010 and a $129,000 credit for a recovery in accrued costs for the termination of our self-insured health plan in 2009. These two alone account for a $327,000 pre-tax “swing” between years in the first quarter. Interest rates have remained relatively stable for the past 15 months and although still at historic lows, net interest income improved $226,000. We anticipate this trend to continue through the year. In the event interest rates do trend upward, we anticipate a further improvement in the net interest income. The local economies appear to be holding their own and this is typically the time of year when we experience an increase in construction loan requests. Although slightly less than last year we are pleased with the activity and interest in new construction and renovation requests. We will continue to actively promote our BUILD program as it is a vital piece of the construction trades economy in our markets. For those who have been following the “legislative process” in Washington, you have realized the proposed Consumer Financial Protection Agency and regulatory reform legislation have taken the spotlight. There are numerous views, opinions and no lack of lobbyists attempting to influence the proposed legislation. In all the furor, our legislators cannot lose sight of the fact community banks, like Union Bank, did not precipitate or exacerbate this “financial crisis.” It was the larger complex financial and nonfinancial institutions that did. We are already highly regulated, answering to numerous federal and state agencies, and another new agency is not needed. And finally, legislation should promote community banks growth as we are the ones in the “trenches” working with millions of small businesses, promoting jobs and economic growth. Strategically one of our goals this year is to increase growth in all the markets we serve. In particular, we are focusing on Franklin County and Littleton, NH as well as Lamoille and Caledonia Counties. As the economy improves demand will increase. We have the products, technology and staff in place to benefit as this improvement gains momentum and as opportunities present themselves. Our 119th annual meeting is May 19th at 3:00 PM in Morrisville. We remind everyone to vote their shares by proxy or to attend the meeting in person. We look forward to seeing you. Enclosed is your dividend check or advice of deposit, representing a dividend of $0.25 per share to shareholders of record May 1, 2010, and payable May 13, 2010. Sincerely, |
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Richard C. Sargent Chairman | Kenneth D. Gibbons President & CEO |
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1stQuarter Report - March 31, 2010 |
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Consolidated Balance Sheets (unaudited) |
| Consolidated Statements of Income (unaudited) |
ASSETS | March 31, 2010 | March 31, 2009 |
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| 3/31/2010 | 3/31/2009 | ||||||||
Cash and Due from Banks | $ 5,397,607 | $ 5,578,784 |
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| (3 months ended) | ||||||||||
Federal Funds Sold & Overnight Deposits | 10,164,066 | 11,366,417 |
| Interest Income |
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| $5,643,453 | $5,849,659 | ||||||||
Interest Bearing Deposits in Banks | 22,030,655 | 12,868,348 |
| Interest Expense |
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| 1,055,564 | 1,488,258 | ||||||||
Investment Securities Available-for-Sale | 25,316,426 | 25,346,217 |
| Net Interest Income |
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| 4,587,889 | 4,361,401 | ||||||||
Loans Held for Sale | 8,058,754 | 3,449,278 |
| Provision for Loan Losses |
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| 90,000 | 95,000 | ||||||||
Loans, net | 349,655,707 | 345,391,453 |
| Net Interest Income after |
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Allowance for Loan Losses | (3,455,515) | (3,523,929) |
| Provision for Loan Losses |
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| 4,497,889 | 4,266,401 | ||||||||
Premises and Equipment, net | 7,950,146 | 7,315,560 |
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Other Real Estate Owned, net | 1,337,695 | 796,673 |
| Trust Income |
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| 108,752 | 90,579 | ||||||||
Accrued Interest & Other Assets | 13,833,567 | 13,175,911 |
| Noninterest Income |
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| 1,110,526 | 1,260,317 | ||||||||
Total Assets |
| $440,289,108 |
| $421,764,712 |
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| Noninterest Expenses: |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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| Salaries & Wages |
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| 1,565,084 | 1,548,272 | ||||||||
Noninterest Bearing Deposits | $ 53,978,595 | $ 47,385,304 |
| Pension & Employee Benefits |
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| 760,126 | 648,745 | ||||||||
Interest Bearing Deposits | 311,352,919 | 299,139,673 |
| Occupancy Expense, net |
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| 254,518 | 292,807 | ||||||||
Borrowed Funds | 27,343,647 | 27,193,064 |
| Equipment Expense |
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| 243,245 | 284,699 | ||||||||
Accrued Interest & Other Liabilities | 6,196,899 | 9,062,327 |
| Other Expenses |
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| 1,309,590 | 1,214,535 | ||||||||
Common Stock | 9,843,572 | 9,843,572 |
| Total |
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| 4,132,563 | 3,989,058 | ||||||||
Paid-in Capital | 225,589 | 210,595 |
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Retained Earnings | 36,597,909 | 35,884,217 |
| Income before Taxes |
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| 1,584,604 | 1,628,239 | ||||||||
Accumulated Other Comprehensive Loss | (1,516,971) | (3,367,221) |
| Income Tax Expense |
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| 365,627 | 360,639 | ||||||||
Treasury Stock at Cost | (3,733,051) | (3,586,819) |
| Net Income |
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| $1,218,977 |
| $1,267,600 | ||||
Total Liabilities and Shareholders’ Equity |
| $440,289,108 |
| $412,764,712 |
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| Earnings per Share |
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| $0.27 | $0.28 | ||||||||
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| Book Value per Share |
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| $9.28 | $8.72 |
Standby letters of credit were $2,300,000 and $1,959,000 at March 31, 2010 and 2009, respectively.
Directors -UNION BANKSHARES, INC | OfficersUNION BANK | OfficersUNION BANK (continued) | |||||
Richard C. Sargent,Chairman | Richard C. Marron | Rhonda L. Bennett | Vice President | Morrisville | Carrie R. Locklin | Assistant Treasurer | Morrisville |
Cynthia D. Borck | Robert P. Rollins | Therese H. Butler | Assistant Treasurer | Morrisville | Robyn A. Masi | Assistant Vice President | Stowe |
Steven J. Bourgeois | John H. Steel | Stacey L.B. Chase | Assistant Treasurer | Morrisville | Thomas J. Meshako | Senior Vice President | Morrisville |
Kenneth D. Gibbons | Schuyler W. Sweet | Jeffrey G. Coslett | Senior Vice President | Morrisville | Marsha A. Mongeon | Senior Vice President & CFO | Morrisville |
Franklin G. Hovey II |
| Michael C. Curtis | Vice President | St. Albans | Mildred R. Nelson | Vice President | Littleton |
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| Peter J. Eley | SVP, Managing Trust Officer | Morrisville | Karen Carlson Noyes | Assistant Vice President | Morrisville |
Directors -UNION BANK | Kenneth D. Gibbons | President & CEO | Morrisville | Barbara A. Olden | Vice President | Lyndonville | |
Richard C. Sargent,Chairman | Richard C. Marron | Don D. Goodhue | Information Systems Officer | Morrisville | Deborah J. Partlow | Asst. V.P., Senior Trust Officer | Morrisville |
Cynthia D. Borck | Robert P. Rollins | Melissa A. Greene | Assistant Vice President | Hardwick | Bradley S. Prior | Assistant Treasurer | Morrisville |
Steven J. Bourgeois | John H. Steel | Karyn J. Hale | Vice President | Morrisville | Craig S. Provost | Vice President | Stowe |
Kenneth D. Gibbons | Schuyler W. Sweet | Claire A. Hindes | Assistant Vice President | Morrisville | Colleen D. Putvain | Assistant Treasurer | Morrisville |
Franklin G. Hovey II | Neil Van Dyke | Patricia N. Hogan | Vice President | Morrisville | Suzanne L. Roberts | Vice President | St. Johnsbury |
| Tracey D. Holbrook | Regional Vice President | St. Johnsbury | Robert P. Rollins | Secretary | Morrisville | |
Officers -UNION BANKSHARES, INC. | Lura L. Jacques | Asst. V.P., Trust Officer | St. Albans | David S. Silverman | Senior Vice President | Morrisville | |
Richard C. Sargent | Chairman | Lynne P. Jewett | Assistant Vice President | Morrisville | Judy R. Smith | Assistant Vice President | St. Albans |
Kenneth D. Gibbons | President & CEO | Stephen H. Kendall | Vice President | Morrisville | Curtis C. Swan | Assistant Vice President | Fairfax |
Marsha A. Mongeon | Vice President/Treasurer | Susan O. Laferriere | Vice President | St. Johnsbury | JoAnn A. Tallman | Assistant Secretary | Morrisville |
Robert P. Rollins | Secretary | Dennis J. Lamothe | Vice President | St. Johnsbury | Francis E. Welch | Assistant Vice President | Morrisville |
David S. Silverman | Vice President | Susan F. Lassiter | Vice President | Jeffersonville | Lorraine G. Willett | Assistant Vice President | Morrisville |
JoAnn A. Tallman | Assistant Secretary |
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Regional Advisory Board Members |
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Judy F. Aydelott-Littleton | Kenneth D. Gibbons-All |
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Steven J. Bourgeois-St. Albans | Franklin G. Hovey II-St. Johnsbury |
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J. R. Alexis Clouatre-St. Johnsbury | Daniel J. Luneau-St. Albans |
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Coleen K. Condon-St. Albans | Samuel H. Ruggiano-St. Albans |
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Dwight A. Davis-St. Johnsbury | Schuyler W. Sweet-Littleton |
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Kirk Dwyer-St. Johnsbury | Norrine A. Williams-Littleton |
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Stanley T. Fillion-Littleton |
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