Exhibit 99.1
4th Quarter Report UB
December 31, 2006
Union Bankshares, Inc.
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Amex: UNB
[Photo]
4th Quarter Report -- December 31, 2006 Union Bankshares, Inc.
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Consolidated Balance Sheets (unaudited)
December 31, December 31,
ASSETS 2006 2005
Cash and Due from Banks $ 11,694,471 $ 14,018,842
Federal Funds Sold & Overnight Deposits 9,262,770 189,587
Interest Bearing Deposits in Banks 5,416,961 8,597,835
Investment Securities Available for Sale 23,675,261 32,407,973
Loans Held for Sale 3,799,022 6,546,019
Loans, net 313,652,946 300,524,758
Reserve for Loan Losses (3,337,768) (3,071,421)
Premises and Equipment, net 6,079,715 5,898,424
Other Real Estate Owned 399,254 0
Accrued Interest & Other Assets 10,506,572 9,633,646
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Total Assets $381,149,204 $374,745,663
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LIABILITIES AND SHAREHOLDERS' EQUITY
Non-interest Bearing Deposits $ 54,875,163 $ 52,616,902
Interest Bearing Deposits 264,946,885 260,682,192
Borrowed Funds 14,596,130 16,256,274
Accrued Interest & Other Liabilities 4,807,829 3,587,484
Common Stock 9,837,222 9,837,222
Paid in Capital 150,147 139,861
Retained Earnings 35,202,734 33,760,610
Accumulated Other Comprehensive Loss (1,002,725) (97,951)
Treasury Stock at Cost (2,264,181) (2,036,931)
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Total Liabilities and Shareholders' Equity $381,149,204 $374,745,663
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Consolidated Statements of Income (unaudited)
12/31/2006 12/31/2005 12/31/2006 12/31/2005
(3 months ended) (12 months ended)
Interest Income $6,491,585 $5,986,256 $25,197,180 $22,256,135
Interest Expense 1,944,887 1,349,672 6,821,264 4,498,819
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Net Interest Income 4,546,698 4,636,584 18,375,916 17,757,316
Provision for Loan Losses 30,000 60,000 180,000 60,000
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Net Interest Income after
Provision for Loan Losses 4,516,698 4,576,584 18,195,916 17,697,316
Trust Income 85,138 104,945 304,444 300,491
Non-interest Income 1,029,897 1,266,490 3,753,370 3,754,978
Non-interest Expenses:
Salaries & Wages 1,470,574 1,398,046 6,011,727 5,627,296
Pension & Employee Benefits 674,791 513,366 2,344,465 2,044,870
Occupancy Expense, net 208,006 196,619 793,341 788,672
Equipment Expense 261,392 251,749 1,047,095 1,040,797
Other Expenses 927,930 895,055 3,617,463 3,554,249
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Total 3,542,693 3,254,835 13,814,091 13,055,884
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Income before Taxes 2,089,040 2,693,184 8,439,639 8,696,901
Income Tax Expense 502,920 777,325 2,184,364 2,459,532
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Net Income $1,586,120 $1,915,859 $ 6,255,275 $ 6,237,369
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Earnings per Share $0.35 $0.42 $1.38 $1.37
Book Value per Share $9.25 $9.16
Standby letters of credit were $1,045,000 and $944,000 at December 31, 2006 and 2005,
respectively.
Directors UNION BANKSHARES, INC. & UNION BANK
Richard C. Sargent, Chairman Franklin G. Hovey II
Cynthia D. Borck Richard C. Marron
Steven J. Bourgeois Robert P. Rollins
Kenneth D. Gibbons John H. Steel
Officers UNION BANKSHARES, INC.
Richard C. Sargent Chairman
Cynthia D. Borck Vice President
Kenneth D. Gibbons President & CEO
Marsha A. Mongeon Vice President/Treasurer
Robert P. Rollins Secretary
JoAnn A. Tallman Assistant Secretary
ST. JOHNSBURY ADVISORY BOARD
Cynthia D. Borck Kirk Dwyer
J.R. Alexis Clouatre Kenneth D. Gibbons
Dwight A. Davis Franklin G. Hovey II
LITTLETON ADVISORY BOARD
Judy F. Aydelott Schuyler W. Sweet
Stanley T. Fillion Norrine A. Williams
Officers UNION BANK
Stacey M. Belanger Assistant Treasurer Fairfax
Rhonda L. Bennett Vice President Morrisville
John T. Booth, Jr. Finance Officer Morrisville
Cynthia D. Borck Executive Vice President Morrisville
Jennie H. Buchanan Assistant Vice President Morrisville
Stacey L.B. Chase Assistant Treasurer Morrisville
Jeffrey G. Coslett Vice President Morrisville
Michael C. Curtis Vice President St. Albans
Peter J. Eley Senior Vice President Morrisville
Fern C. Farmer Assistant Vice President Morrisville
Kenneth D. Gibbons President & CEO Morrisville
Don D. Goodhue Information Systems Officer Morrisville
Lorraine M. Gordon Assistant Vice President Morrisville
Melissa A. Greene Assistant Treasurer Hardwick
Karyn J. Hale Assistant Treasurer Morrisville
Claire A. Hindes Assistant Vice President Morrisville
Patricia N. Hogan Vice President Morrisville
Tracey D. Holbrook Vice President St. Johnsbury
Lynne P. Jewett Assistant Treasurer Morrisville
Peter R. Jones Vice President Morrisville
Stephen H. Kendall Vice President Morrisville
Officers UNION BANK (continued)
Susan O. Laferriere Vice President St. Johnsbury
Dennis J. Lamothe Vice President St. Johnsbury
Susan F. Lassiter Vice President Jeffersonville
Robert L. Miller Trust Officer St. Johnsbury
Marsha A. Mongeon Senior Vice President-Treasurer Morrisville
Mildred R. Nelson Vice President Littleton
Karen Carlson Noyes Assistant Vice President Morrisville
Barbara A. Olden Vice President St. Johnsbury Ctr.
Deborah J. Partlow Trust Officer Morrisville
Bradley S. Prior Assistant Treasurer Morrisville
Colleen D. Putvain Assistant Treasurer Morrisville
Craig S. Provost Assitant Vice President Stowe
Suzanne L. Roberts Vice President Lyndonville
Robert P. Rollins Secretary Morrisville
Ruth P. Schwartz Vice President Morrisville
Robyn A. Sheltra Assistant Treasurer Stowe
David S. Silverman Senior Vice President Morrisville
Karen C. Sylvester Assistant Treasurer Lyndonville
JoAnn A. Tallman Assistant Secretary Morrisville
Alycia R. Vosinek Commercial Loan Officer Littleton
Francis E. Welch Assistant Vice President Morrisville
For more Company information, please visit Union Bank's
web pages at www.unionbankvt.com.
Union Bankshares, Inc.
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Dear Shareholder: January 25, 2007
We are pleased to report to you the financial results and other highlights of
2006 as well as some initiatives planned for 2007.
Net income showed a modest increase in 2006 due in part to a narrowing of the
interest margin in the fourth quarter. Also, the loan loss provision was
increased and our Littleton branch opened in March, which added some one time
startup as well as ongoing overhead costs. We are quite pleased with the
reception by the community and growth of this office.
Performance indicators for 2006 remained strong with a return on equity of
14.95%, efficiency ratio of 60%, return on assets of 1.67%, and stockholders
equity of 11.15%.
Asset growth continues to be an area of focus for us and most community banks.
With renewed interest in the stock market and aggressive mutual funds, brokerage
houses and credit unions, deposit growth is a challenge. We continue to offer
innovative competitive deposit products and have implemented an officer call
program focusing on deposit, loan, trust and merchant services.
We have a number of other initiatives and projects planned for 2007, which
include new "platform" software and equipment to streamline account opening and
product "sales." "Check 21" electronic image processing of checks will enable us
to capture digital images of checks for clearing through the Federal Reserve
System. We will also be upgrading our document imaging system, allowing for
quick retrieval as well as permanent record storage for loan and other internal
documents. These improvements and many others are part of the Information
Technology Plan adopted in November.
In December we purchased the Morristown Town Clerk's office building, which had
served as the original Union Bank headquarters until 1940 when we moved next
door to our "new office." Interior renovations have begun, with commercial
services, credit administration, marketing and training facilities to relocate
there by April.
As part of the overall plan to effectively utilize our home office quarters, the
exterior of the Green Mountain Block, purchased in 2002 and next door, will
undergo a major renovation this summer. This effort will substantially improve
the appearance and functionality of this building located at a key village
intersection.
Typically we comment on seasonal and economic conditions in these letters and
this year is quite worthy of comment. The months of November and December either
set or tied records for high temperatures and lack of snow. Many businesses
closely tied to winter activities are experiencing a decrease in revenue. It is
too early to accurately gauge the overall impact of the current weather pattern;
however we will monitor the situation and work closely with our customers to
help them through this temporary situation.
Despite an array of challenges, 2006 was another strong year for your company
and it is appropriate to thank our shareholders, customers and employees for all
being a part of this success.
Enclosed is your dividend check or advice of deposit, representing a dividend of
$.28 to shareholders of record on January 22, 2007. If you would like to have
your dividends deposited directly into an account with us, or another financial
institution, and have not already signed up, please contact JoAnn Tallman at
(802) 888-6600 to receive an authorization form.
Sincerely,
/s/ Richard C. Sargent /s/ Kenneth D. Gibbons
Richard C. Sargent Kenneth D. Gibbons
Chairman President & CEO
Union Bankshares, Inc.
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Shareholder Assistance
and Investor Information
If you need assistance with a change in registration of certificates, 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 us at the address and phone number
listed below:
Corporate Name: Union Bankshares, Inc.
Transfer Agent: Union Bank
P.O. Box 667
Morrisville, VT 05661-0667
Phone: 802.888.6600
Fax: 802.888.4921
E-mail: ubexec@unionbankvt.com
American Stock Exchange
Ticker Symbol: UNB
Union Bank Offices
Fairfax Littleton, NH St. Albans Loan Ctr
Jct. Rtes. 104 & 128* 263 Dells Road* 120 North Main St.
802.849.2600 603.444.7136 802.524.9000
Hardwick Lyndonville St. Johnsbury
103 VT Rte. 15* 183 Depot St.* 364 Railroad St.*
802.472.8100 802.626.3100 802.748.3131
Hyde Park Morrisville St. Johnsbury
250 Main St. 20 Lower Main St.* 325 Portland St.*
802.888.6880 802.888.6600 802.748.3121
Jeffersonville 65 Northgate Plaza* St. Johnsbury Ctr.
44 Main St.* Route 100 Green Mtn. Mall*
802.644.6600 802.888.6860 1998 Memorial Dr.
802.748.2454
Johnson Stowe
198 Lower Main St.* 47 Park St.* *ATMs at
802.635.6600 802.253.6600 these branches