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the regulators intend to rescue. Regulatory compliance is a requirement of our business, and we strive to manage our compliance process as accurately and efficiently as we are able.
As we write this letter, temperatures are subzero after a prolonged warm spell that has not been helpful to our winter sports based economy. Despite the warm temperatures and rain, our ski area based communities seem to be fairing pretty well compared to 2008 through 2011. Building construction, always an important part of the local economy, appears to be improving and in some areas booming. Home sales are up in most of our communities, with the expectation of continued improvement throughout 2014. Specialty foods and beverages are a bright spot in our region, with maple, cheese, beer, and spirits leading the way. Perhaps the best way to characterize the local economy is by way of comparison. In 2012 the local economy was slightly better than in 2011, and 2013 was slightly better than 2012. We expect 2014 to be more of the same, with modest improvement over 2013.
Enclosed is a check or advice of deposit representing a cash dividend of $0.26 per share payable to shareholders of record January 25, 2014. We thank you for your continued support of your Company.
February 6, 2014
ABOUT UNION BANKSHARES
We are pleased to report the financial results for your Company for the year ended December 31, 2013. Net Income for the year was $7.1 million compared to Net Income for the year ended December 31, 2012 of $6.8 million. Earnings per share as of December 31, 2013 increased to $1.60 per share, compared to $1.54 per share for 2012. Results for 2013 reflect a year to year increase in net interest income of $345 thousand, or 1.6%; a decrease in the provision for loan losses of $355 thousand, or 53.8%; and a decrease in noninterest expenses of $1.8 million, or 7.9%. These positive changes were partially offset by a decrease in noninterest income year over year of $2.0 million, or 19.2%; and an increase in income tax expense of $199 thousand, or 12.0%. Noninterest income declined in 2013 compared to 2012 primarily due to a reduction in gain on sale of real estate loans of $1.2 million and a decrease in gain on sale of securities of $673 thousand. Noninterest expenses decreased year over year due to a reduction of $1.1 million, or 28.9%, in Pension and employee benefits as a result of freezing the defined benefit pension plan as of October 5, 2012 partially offset by an increase in 401(k) contribution expense due to the January 1, 2013 implementation of a safe harbor provision in the 401(k) plan.
Total assets grew to $584.9 million as of December 31, 2013 compared to $577.3 million as of December 31, 2012, or a 1.3% increase. Total loans increased $9.8 million to $465.1 million, or 2.2%, as of December 31, 2013 compared to $455.3 million as of December 31, 2012. Total deposits reached $518.4 million compared to the prior year of $510.0 million, an increase of $8.4 million, or 1.6%. The Company had total capital of $46.8 million with a book value per share of $10.50 as of December 31, 2013 compared to $45.0 million with a book value of $10.11 as of December 31, 2012.
Earnings for the fourth quarter of 2013 were $1.5 million, or $0.34 per share, compared to $2.2 million, or $0.50 per share, for 2012. Net interest income improved $125 thousand, the provision for loan losses decreased $75 thousand, noninterest expenses decreased $462 thousand, and the provision for income taxes decreased $195 thousand. These positive changes were offset by a decrease in noninterest income of $1.5 million for the fourth quarter of 2013 compared to 2012, most of which was a reduction in gain on sale of real estate loans despite selling a similar volume year over year.
2013 was a year of modest growth in loans, deposits, and assets. While we wish to expand our market share in the communities we serve, our overall growth is a reflection of the economy of our region and the rate of inflation. Inflation has been very low and the local economy has been tepid, though slowly improving. We would like to grow our assets at a brisker pace but we resist growth for growth’s sake. We are hopeful that 2014 will bring us continued and accelerated improvement in the economy with accompanying business opportunities attendant to an improved business climate.
We continue to face headwinds that dampen our performance. The prolonged low interest rate environment punishes savers in favor of borrowers while continuing to squeeze interest margins in our industry. Likewise, the Federal regulatory environment requires us to spend more staff time and money complying with new mandates from on high, with little tangible benefit for those
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 northwestern 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 16 banking offices, a loan center and 33 ATMs.
Union Bank is committed to the communities it serves, and encourages employee participation in community events and charitable services. The growing asset base of over $584 million provides the financial strength to successfully serve its constituents.
Union Bank has consistently been recognized for our Community Reinvestment efforts and for our performance in residential lending to borrowers of all income levels. The US Small Business Administration has designated Union Bank as a Preferred Lender.
AND INVESTOR INFORMATION
Kenneth D. Gibbons
David S. Silverman
President & CEO
UNION BANK OFFICES
(ATMS AT ALL BRANCH LOCATIONS)
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 at 802-888-6600 or contact our Transfer Agent at the address and phone number listed below:
20 Lower Main St.
47 Park St.
421 Route 2 East
65 Northgate Plaza
Jct. Rtes. 104&128
3 State Street
Registrar & Transfer Company
Attn: Stock Transfer Department
10 Commerce Drive
Cranford, NJ 07016
15 Mapleville Depot
103 VT Rte. 15
263 Dells Road
364 Railroad St.
76 Main Street
NASDAQ Stock Market
44 Main Street
325 Portland St.
Union Bankshares, Inc.
155 Main Street
20 Lower Main Street
PO Box 667
Morrisville, VT 05661-0667
198 Lower Main St.
30 Kimball Ave.
183 Depot St.
The following information was filed by Union Bankshares Inc (UNB) on Tuesday, February 4, 2014 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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