Exhibit 99.1
[Union Bankshares, Inc. Logo]
2nd Quarter Report
[Photo]
Union Bankshares, Inc.
- ---------------------------------
Amex: UNB June 30, 2008
2nd Quarter Report - June 30, 2008 Union Bankshares, Inc.
- -------------------------------------------------------------------------------
Consolidated Balance Sheets (unaudited)
ASSETS June 30, 2008 June 30, 2007
Cash and Due from Banks $ 12,147,011 $ 12,199,707
Federal Funds Sold & Overnight Deposits 11,778,245 5,064,146
Interest Bearing Deposits in Banks 7,985,389 10,438,538
Investment Securities Available-for-Sale 27,462,506 26,682,008
Loans Held for Sale 2,486,303 3,165,872
Loans, net 316,884,407 303,274,447
Reserve for Loan Losses (3,424,068) (3,326,059)
Premises and Equipment, net 7,068,334 6,073,165
Other Real Estate Owned 796,571 437,546
Accrued Interest & Other Assets 12,373,141 11,690,403
------------ ------------
Total Assets $395,557,839 $375,699,773
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest Bearing Deposits $ 55,203,221 $ 46,943,665
Interest Bearing Deposits 265,562,389 261,921,576
Borrowed Funds 27,854,994 18,921,691
Accrued Interest & Other Liabilities 5,175,512 6,216,885
Common Stock 9,843,572 9,837,222
Paid in Capital 205,610 154,663
Retained Earnings 35,869,724 35,385,803
Accumulated Other Comprehensive Loss (937,213) (1,174,902)
Treasury Stock at Cost (3,219,970) (2,506,830)
------------ ------------
Total Liabilities and Shareholders' Equity $395,557,839 $375,699,773
============ ============
Consolidated Statements of Income (unaudited)
6/30/2008 6/30/2007 6/30/2008 6/30/2007
(3 months ended) (6 months ended)
Interest Income $6,094,654 $6,475,764 $12,358,753 $12,863,758
Interest Expense 1,776,995 2,059,004 3,700,873 4,033,618
---------- ---------- ----------- -----------
Net Interest Income 4,317,659 4,416,760 8,657,880 8,830,140
Provision for Loan Losses 90,000 0 140,000 45,000
---------- ---------- ----------- -----------
Net Interest Income after
Provision for Loan Losses 4,227,659 4,416,760 8,517,880 8,785,140
Trust Income 100,222 83,230 192,782 167,025
Noninterest Income 1,084,793 1,044,910 2,092,193 1,903,271
Noninterest Expenses:
Salaries & Wages 1,603,833 1,549,397 3,188,719 3,126,971
Pension & Employee Benefits 705,941 520,144 1,374,551 1,180,357
Occupancy Expense, net 222,615 214,038 490,439 434,505
Equipment Expense 339,965 281,724 609,050 543,459
Other Expenses 1,072,218 988,961 2,090,317 1,936,969
---------- ---------- ----------- -----------
Total 3,944,572 3,554,264 7,753,076 7,222,261
---------- ---------- ----------- -----------
Income before Taxes 1,468,102 1,990,636 3,049,779 3,633,175
Income Tax Expense 278,832 504,747 454,336 912,660
---------- ---------- ----------- -----------
Net Income $1,189,270 $1,485,889 $ 2,595,443 $ 2,720,515
========== ========== =========== ===========
Earnings per Share $0.27 $0.33 $0.58 $0.60
Book Value per Share $9.30 $9.22
Standby letters of credit were $1,430,000 and $960,000 at June 30, 2008 and
2007, 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
Schuyler W. Sweet
Officers -- UNION BANKSHARES, INC.
Richard C. Sargent Chairman
Kenneth D. Gibbons President & CEO
Marsha A. Mongeon Vice President/Treasurer
Robert P. Rollins Secretary
David S. Silverman Vice President
JoAnn A. Tallman Assistant Secretary
Regional Advisory Board Members
Judy F. Aydelott - Littleton Stanley T. Fillion - Littleton
Steven J. Bourgeois - St. Albans Kenneth D. Gibbons - All
J.R. Alexis Clouatre - St. Johnsbury Franklin G. Hovey II - St. Johnsbury
Coleen K. Condon - St. Albans Samuel H. Ruggiano - St. Albans
Dwight A. Davis - St. Johnsbury Schuyler W. Sweet - Littleton
Kirk Dwyer - St. Johnsbury Norrine A. Williams - Littleton
Officers UNION BANK
Rhonda L. Bennett Vice President Morrisville
Therese H. Butler Assistant Treasurer Morrisville
Stacey L.B. Chase Assistant Treasurer Morrisville
Jeffrey G. Coslett Senior Vice President Morrisville
Michael C. Curtis Vice President St. Albans
Peter J. Eley Senior Vice President Morrisville
Kenneth D. Gibbons President & CEO Morrisville
Don D. Goodhue Information Systems Officer Morrisville
Melissa A. Greene Assistant Vice President Hardwick
Karyn J. Hale Assistant Vice President Morrisville
Claire A. Hindes Assistant Vice President Morrisville
Patricia N. Hogan Vice President Morrisville
Tracey D. Holbrook Regional Vice President St. Johnsbury
Lura L. Jacque Asst. V.P., Trust Officer St. Albans
Lynne P. Jewett Assistant Vice President Morrisville
Peter R. Jones Vice President Morrisville
Stephen H. Kendall Vice President Morrisville
Susan O. Laferriere Vice President St. Johnsbury
Dennis J. Lamothe Vice President St. Johnsbury
Susan F. Lassiter Vice President Jeffersonville
Officers UNION BANK (continued)
Robyn A. Masi Assistant Vice President Stowe
Robert L. Miller Trust Officer St. Johnsbury
Marsha A. Mongeon Senior Vice President & CFO Morrisville
Mildred R. Nelson Vice President Littleton
Karen Carlson Noyes Assistant Vice President Morrisville
Barbara A. Olden Vice President St. Johnsbury
Deborah J. Partlow Asst. V.P., Senior Trust Officer Morrisville
Lois J. Pigeon Branch Manager St. Albans
Bradley S. Prior Assistant Treasurer Morrisville
Craig S. Provost Vice President Stowe
Colleen D. Putvain Assistant Treasurer Morrisville
Suzanne L. Roberts Vice President Lyndonville
Robert P. Rollins Secretary Morrisville
Ruth P. Schwartz Vice President Morrisville
David S. Silverman Senior Vice President Morrisville
Curt Swan Assistant Vice President Fairfax
JoAnn A. Tallman Assistant Secretary Morrisville
Alycia R. Vosinek Commercial Loan Officer Littleton
Francis E. Welch Assistant Vice President Morrisville
Lorraine Gordon Willett Assistant Vice President Morrisville
Union Bankshares, Inc.
- -------------------------------------------------------------------------------
Dear Shareholder: August 7, 2008
Second quarter results are mixed with good growth in assets and loans while net
income for the period decreased almost 20% over the same quarter last year and
year-to-date net income is down 4.6%. There are three main reasons for this
quarter's decline in income.
The Prime Rate, now at 5%, decreased a record 325 basis points from September
2007 to April 2008, placing downward pressure on net interest income. At this
juncture we believe the Federal Reserve will hold rates at their current level,
which will allow us to "reprice" deposits to improve net interest income in the
third and fourth quarters.
Secondly, we have been pleased with the growth in our loan portfolio of $13
million in the past year and without this growth the decrease in net interest
income would have been greater. However, as loans outstanding increase, we must
add to our provision for loan losses. This year, mainly due to the increase in
new loans, we added $90,000 in the second quarter, while there was no addition
last year.
The third major item is the increase in health care costs. This year our staff
or their dependents have experienced a greater number of serious illnesses or
procedures. This past quarter health insurance costs exceeded the same period
last year by $152,000 or a 74% increase. We self-insure our health care costs
to a certain level and carry "excess" coverage for major claims.
As mentioned above, loan growth has been quite good, especially in light of
some national trends being reported. With the growth of the loan portfolio and
the Federal Reserve, in adopting what appears to be a neutral position in its
rate policy, we anticipate an improvement in net interest margin for the
balance of 2008. Interest rates are still at relatively reasonable levels for
borrowers desiring to expand their business, acquire other assets or build a
home, and we are glad to be able to say that we have had deposit growth year to
year of $12 million which has supported our loan growth.
On July 28th we opened our newest branch office at Marty's 1st Stop on Route 2
in Danville, VT. This location should prove to be a busy branch as more than
8,000 vehicles per day use this stretch of highway with many 'locals' stopping
for gas and other staples.
Another major expansion is the new branch office in St. Albans, VT.
Construction is progressing nicely with an opening planned for the latter part
of September. Franklin County continues to prosper and is one of the fastest
growing counties in Vermont.
Recently, we introduced our GreenLend(tm) program to fund energy efficiency
renovations and purchases. Borrowers work with our lenders as well as
Efficiency Vermont and USDA Rural Development (our partners) to fund insulation
upgrades, renewable energy heating plants, solar arrays and more. GreenLend(tm)
has been warmly received by the community and the press.
Enclosed is your dividend check or advice of deposit, representing a dividend
of $.28 to shareholders of record on July 28, 2008.
Sincerely,
/s/ Richard C. Sargent /s/ Kenneth D. Gibbons
Richard C. Sargent Kenneth D. Gibbons
Chairman President & CEO
Union Bankshares, Inc.
- -------------------------------------------------------------------------------
Shareholder Assistance
and Investor Information
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
JoAnn Tallman, Assistant Secretary at (802) 888-6600 or contact our Transfer
Agent at the address and phone number listed below:
Transfer Agent: Registrar & Transfer Company
Attn: Stock Transfer Department
10 Commerce Drive
Cranford NJ 07016
Phone: 800.368.5948
Fax: 908.497.2318
E-mail: info@rtco.com
American Stock Exchange
Ticker Symbol: UNB
Corporate Name: Union Bankshares, Inc.
Corporate Address: 20 Lower Main Street
P.O. Box 667
Morrisville VT 05661-0667
Union Bank Offices
Danville Johnson Stowe Johnson Stowe
421 Route 2 East* 198 Lower Main St.* 47 Park St.*
802.684.2211 802.635.6600 802.253.6600
Fairfax Littleton, NH St. Albans
Jct. Rtes. 104 & 128* 263 Dells Road* Union Bank Loan Ctr.
802.849.2600 603.444.7136 120 Main St.
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
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
*ATMs at
these branches