Exhibit 99.1
[Union Bankshares, Inc. Logo]
2nd Quarter Report
[Photo]
Union Bankshares, Inc.
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NASDAQ: UNB June 30, 2009
2nd Quarter Report - June 30, 2009 Union Bankshares, Inc.
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Consolidated Balance Sheets (unaudited)
ASSETS June 30, 2009 June 30, 2008
Cash and Due from Banks $ 5,452,758 $ 12,147,011
Federal Funds Sold & Overnight Deposits 5,456,844 11,778,245
Interest Bearing Deposits in Banks 9,778,545 7,985,389
Investment Securities Available-for-Sale 22,810,186 27,462,506
Loans Held for Sale 16,722,388 2,486,303
Loans, net 346,738,464 316,884,407
Reserve for Loan Losses (3,565,449) (3,424,068)
Premises and Equipment, net 7,602,158 7,068,334
Other Real Estate Owned, net 622,131 796,571
Accrued Interest & Other Assets 13,261,721 12,373,141
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Total Assets $424,879,746 $395,557,839
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LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest Bearing Deposits $ 54,019,105 $ 55,203,221
Interest Bearing deposits 293,868,560 265,562,389
Borrowed Funds 28,513,795 27,854,994
Accrued Interest & Other Liabilities 8,942,447 5,175,512
Common Stock 9,843,572 9,843,572
Paid in Capital 213,507 205,610
Retained Earnings 36,001,088 35,869,724
Accumulated Other Comprehensive Loss (2,914,729) (937,213)
Treasury Stock at Cost (3,607,599) (3,219,970)
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Total Liabilities and Shareholders' Equity $424,879,746 $395,557,839
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Consolidated Statements of Income (unaudited)
6/30/2009 6/30/2008 6/30/2009 6/30/2008
(3 months ended) (6 months ended)
Interest Income $5,813,681 $6,094,654 $11,663,340 $12,358,753
Interest Expense 1,357,999 1,776,995 2,846,257 3,700,873
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Net Interest Income 4,455,682 4,317,659 8,817,083 8,657,880
Provision for Loan Losses 75,000 90,000 170,000 140,000
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Net Interest Income after
Provision for Loan Losses 4,380,682 4,227,659 8,647,083 8,517,880
Trust Income 91,130 100,222 181,709 192,782
Noninterest Income 1,181,437 1,078,975 2,441,754 2,120,776
Noninterest Expenses:
Salaries & Wages 1,482,604 1,603,833 2,979,553 3,188,719
Pension & Employee Benefits 715,144 705,941 1,415,212 1,374,551
Occupancy Expense, net 224,665 222,615 517,472 490,439
Equipment Expense 281,797 317,126 580,267 609,050
Other Expenses 1,453,759 1,089,239 2,654,523 2,118,900
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Total 4,157,969 3,938,754 8,147,027 7,781,659
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Income before Taxes 1,495,280 1,468,102 3,123,519 3,049,779
Income Tax Expense 260,992 278,832 621,631 454,336
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Net Income $1,234,288 $1,189,270 $ 2,501,888 $ 2,595,443
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Earnings per Share $0.28 $0.27 $0.56 $0.58
Book Value per Share $8.85 $9.30
Standby letters of credit were $2,014,000 and $1,430,000 at June 30, 2009
and 2008, respectively.
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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 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)
Carrie R. Locklin Assistant Treasurer Morrisville
Robyn A. Masi Assistant Vice President Stowe
Thomas J. Meshako Senior Vice President Morrisville
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 Lyndonville
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 St. Johnsbury
Robert P. Rollins Secretary Morrisville
Ruth P. Schwartz Vice President Morrisville
David S. Silverman Senior Vice President Morrisville
Curtis C. Swan Assistant Vice President Fairfax
JoAnn A. Tallman Assistant Secretary Morrisville
Francis E. Welch Assistant Vice President Morrisville
Lorraine Gordon Willett Assistant Vice President Morrisville
cover photo: Summer in Fairfax, looking east to Mount Mansfield
Union Bankshares, Inc. Logo
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Dear Shareholder: August 6, 2009
During the second quarter of this year we experienced solid growth in assets,
loans and deposits. In particular, the loan portfolio grew 13.8%, fueled by
residential mortgage refinancing by existing as well as new customers and also
growth in commercial real estate loans.
Unfortunately, the continuation of historically low interest rates hindered a
corresponding increase in net interest income. The Federal Reserve has taken a
position of holding rates down with a targeted Fed Funds rate of 0% to 0.25%,
thereby maintaining the prime rate at 3.25%. While loans outstanding increased
13.8%, the net interest income increased a modest 3.6%.
As mentioned above, residential mortgage refinancing has been very strong this
year. In the first six months, we refinanced and sold into the secondary market
(with servicing rights retained by us) $30.1 million in residential mortgages.
This has yielded us some good gains on the sale of these loans and is part of
the reason for the increase in non-interest income.
One of the few positive results of the financial industry problems is the
renewed realization by the general public that community banks are overall a
safe place to deposit their money and to borrow for housing, business or other
needs and your company has benefited. Unfortunately, a small percentage of banks
have been allowed to fail and been acquired by stronger institutions or assumed
by the FDIC. Some other large financial conglomerates have received federal aid
as they were deemed "too big to fail." All these rescue and bailout missions
cost money and the taxpayer, as well as the remaining financial institutions
have been tasked to fund these costs.
The FDIC has substantially increased its regular assessment and levied an
additional assessment for deposit insurance. In the second quarter, our FDIC
deposit insurance was $333,000 versus $14,000 in the same period last year. Year
to date our assessment is $465,000 versus $23,000 last year and accounts for the
majority of the increase in Other Expenses. Fortunately, the FDIC has extended
the $250,000 deposit insurance coverage per depositor to December 31, 2013.
Union Bank, as has almost everyone, has been impacted by the current recession.
However, we have remained well capitalized, maintained earnings in the 80th
percentile of banks in our peer group, and have controlled our costs. In
recognition of these results, "US Banker Magazine" recently identified Union
Bankshares, Inc. as one of the top 200 community banks as ranked by our three
year average return on equity of 13.63%. Union Bankshares was ranked 62nd
nationwide and third in New England.
Enclosed is your dividend check or advice of deposit, representing a dividend of
$0.25 per share to shareholders of record July 25, 2009, and payable August 6,
2009.
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, 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
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
Union Bank Offices
Danville Littleton NH St. Johnsbury
421 Route 2 East* 263 Dells Road* 364 Railroad St.*
802.684.2211 603.444.7136 802.748.3131
Fairfax Lyndonville 325 Portland St.*
Jct. Rtes. 104 & 128* 183 Depot St.* 802.748.3121
802.849.2600 802.626.3100
Hardwick Morrisville Green Mtn. Mall*
103 VT Rte. 15* 20 Lower Main St.* 1998 Memorial Dr.
802.472.8100 802.888.6600 802.748.2454
Jeffersonville 65 Northgate Plaza* Stowe
44 Main St.* Route 100 47 Park St.*
802.644.6600 802.888.6860 802.253.6600
Johnson St. Albans *24Hr ATM on site
198 Lower Main St.* 15 Mapleville Depot*
802.635.6600 802.524.9000