Exhibit 99.1
 
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May 7, 2020
 
 
 
 
 
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For this quarter's letter we are dispensing with a summary of our first quarter financial performance preferring to outline our responses to the Coronavirus pandemic. A copy of our earnings release for the first quarter is enclosed. As Union Bank is essentially the company's sole operating entity, the following describes the actions of the bank in response to the current health crisis.

As we began the first quarter we were unaware of the looming Novel Coronavirus, and the resulting COVID-19 disease. We had come off of a good year of financial performance with solid asset quality metrics. Our expectations for 2020 were positive, though we knew the low interest rate environment and carrying two relatively new branches not yet at breakeven would make it challenging to repeat our record results from 2019.

News reached the United States of the COVID-19 problem in Wuhan, China in late January, and on January 31, the President restricted travel to and from China. From there the health care crisis in the United States grew with ferocity and velocity not seen in recent memory.

As a result of growing evidence of the spreading health crisis, Union Bank implemented it's Pandemic and Business Continuity Plans to address the risks associated with the global COVID-19 pandemic. Since enacting the Pandemic and Business Continuity Plans, the Company has taken a series of actions to safeguard our employees and customers while continuing to provide banking services to our communities. We developed and executed a plan to decentralize employees, including working remotely, to isolate certain personnel essential to critical business operations, canceled business travel and outside vendor appointments, limited inter-branch visits, and increased the use of video conferencing to avoid large gatherings. Also, social distancing and enhanced hygiene practices were put into place as well as rigorous cleaning of all bank facilities. Throughout these changes, employees and customers have been kept informed with regular communications.

On March 17, 2020 branch lobby service was limited to appointment-only, and new capabilities were implemented to execute lobby transactions electronically or via our drive-up facilities. On March 25, 2020, a "Stay-at-Place" order was issued in the State of Vermont resulting in branch lobbies being closed to all customers. Three locations remain closed to customers due to lack of drive-up facilities or staffing challenges.

Relying on regulatory guidance, bank personnel have been proactively contacting our business customers in impacted industries to discuss alternative payment arrangements including payment deferments and payment forbearance agreements. Regulatory guidance allows us to “freeze in place” payment histories in a manner that allows borrowers, who had been current on loan payments prior to the COVID 19 pandemic, to receive payment deferments without being considered past due. We have offered payment deferments, as appropriate, to alleviate cash flow concerns of businesses negatively impacted by the pandemic. In addition, we have applied the same principal to our consumer customers following our long-standing policy of working with our borrowers to keep them in their homes.


In addition, Union Bank has fully participated in the Small Business Administration's Paycheck Protection Program. This program is designed to quickly put funds in the hands of small businesses to allow them to continue to pay employees despite a reduction in their operating revenue. We have received hundreds of applications in the program from our customers and been able to get over 400 approved at this writing, totaling approximately $55 million. We are now in the process of closing these loans and getting monies on the street and in our local economy. We anticipate the second round of funding and working with more business borrowers to facilitate access to this program.

Over days and weeks, we have had to adapt to a new operating reality, while continuing to serve our customers and communities with high quality service combined with kindness and compassion. We have moved to a drive-up-only service model, moved sixty of our work force to work from home using a secure bank managed network, dispersed others throughout our facilities to promote social distancing, and continue to provide new residential and commercial loans at double our normal rate. In addition, our staff has had to field much higher call volumes, agreed to take on additional and or different tasks, at the same time they have been dealing with personal stress of having schools and daycares closed. During all of this our operations have run smoothly, and we have served our customers and communities admirably. We could not be prouder of the way our teammates have stepped up and handled their respective tasks with grace.

You will note in the accompanying press release that we increased our loan loss provision compared to the first quarter of 2019. At this point it is hard to assess how the economic difficulties caused by the health crisis will impact loan asset quality and resulting credit losses. We expect incurred losses to be higher than the past several years, but are not sure of the magnitude. It is our current expectation that we will remain sufficiently profitable to continue to pay the dividend at the current rate, but capital management is an important aspect of operating a sound banking operation over the long term. We cannot rule out altering our dividend payout if conditions warrant.

By now you should have received your proxy and notice of our Annual Meeting to be held virtually on May 22, 2020 at 3:00 pm. We will miss seeing our friends this year and will evaluate having an information session this Fall as government orders and common sense allow.

In conclusion, the Board of Directors of Union Bankshares, Inc. declared a cash dividend of $0.32 per share for the quarter payable May 7, 2020 to shareholders of record as of April 27, 2020. We ask you to stay safe and wish you good health for your family and friends.



Sincerely,
 
 
 
 
 
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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, Assistant Secretary at 802.888.0982 or contact our Transfer Agent at the address and phone number listed below:
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TRANSFER AGENT:
 
Broadridge Corporate Issuer Solutions, Inc.
P.O. Box 1342
Brentwood, NY 11717
866.321.8022 or
720.378.5956
E-mail: shareholder@broadridge.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
Investor Relations: UBLocal.com
 
 
 
 
 
 
 
 
 
 
About Union Bankshares
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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 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 18 banking offices, two loan centers and several ATMs throughout its geographical footprint.

Union Bank has been helping people buy homes and local businesses create jobs in area communities since opening its doors over 127 years ago. Union Bank has earned an exceptional reputation for residential lending programs and has been recognized by the US Department of Agriculture, Rural Development for the positive impact made in the lives of first time home buyers. Union Bank is consistently one of the top Vermont Housing Finance Agency mortgage originators. Additionally, Union Bank has also been designated as an SBA Preferred lender for its participation in small business lending.
 
 
 
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Neil J. Van Dyke
Chair
David S. Silverman
President & Chief Executive Officer






 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Balance Sheets
(unaudited, in thousands)
 
Consolidated Statements of Income
(unaudited, in thousands)
 
Union Bankshares, Inc.
 
 
 
 
 
 
 
 
DIRECTORS
OFFICERS
 
 
 
Neil J. Van Dyke -Chair
Neil J. Van Dyke - Chair
 
ASSETS
MAR 31, 2020
 
MAR 31, 2019
 
 
 
MAR 31, 2020
 
MAR 31, 2019
 
 
Timothy W. Sargent-Vice Chair
David S. Silverman - President & CEO
 
 
 
 
 
 
Joel S. Bourassa
 
Jeffrey G. Coslett- Vice President
 
 
 
 
 
 
 
(3 months ended)
 
 
 
 
 
 
 
 
 
 
 
 
Steven J. Bourgeois
 
Karyn J. Hale - Chief Financial Officer
 
Cash and Due from Banks
 
$
6,224

 
$
3,706

 
Interest Income
 
$
8,839

 
$
8,654

 
 
 
 
 
 
 
 
 
Dawn D. Bugbee
 
John H. Steel - Secretary
 
 
 
 
 
 
 
John M. Goodrich
 
Kristy Adams Alfieri - Assistant Secretary
 
Federal Funds Sold & Overnight Deposits
 
35,488

 
22,886

 
Interest Expense
 
1,455

 
1,230

 
Nancy C. Putnam
 
 
 
 
 
 
 
 
 
Net Interest Income
 
7,384

 
7,424

 
David S. Silverman
 
 
 
 
Interest Bearing Deposits in Banks
 
6,067

 
8,553

 
 
 
 
John H. Steel
 
 
 
 
 
 
 
Provision for Loan Losses
 
300

 
50

 
Schuyler W. Sweet
 
 
 
 
Investment Securities
 
90,028

 
80,135

 
Net Interest Income After
Provision for Loan Losses
 
7,084

 
7,374

 
Union Bank
REGIONAL
ADVISORY BOARD
MEMBERS
 
Loans Held for Sale
 
16,456

 
5,647

 
 
 
 
 
 
 
 
Trust Income
 
173

 
168

 
DIRECTORS
 
 
Loans, net
 
677,587

 
650,769

 
Noninterest Income
 
2,469

 
2,002

 
Neil J. Van Dyke -Chair
Michael R. Barrett - St. Johnsbury
 
 
 
 
 
 
 
 
 
 
Timothy W. Sargent -Vice Chair
Steven J. Bourgeois - St. Albans
 
Reserve for Loan Losses
 
(6,391
)
 
(5,572
)
 
Noninterest Expenses:
 
 
 
 
 
Joel S. Bourassa
 
Stanley T. Fillion - Northern NH
 
 
 
 
 
 
 
Salaries & Wages
 
3,121

 
2,798

 
Steven J. Bourgeois
 
Rosemary H. Gingue - St. Johnsbury
 
Premises and Equipment, net
 
20,528

 
18,767

 
 
 
 
 
 
 
Dawn D. Bugbee
 
John M. Goodrich - St. Johnsbury
 
 
 
 
 
 
 
Employee Benefits
 
984

 
996

 
John M. Goodrich
 
Christopher M. Knapp - Northern NH
 
Accrued Interest & other Assets
 
37,100

 
28,441

 
 
 
 
Nancy C. Putnam
 
Coleen K. Kohaut - St. Albans
 
 
 

 

 

 
 
 
 
 
David S. Silverman
 
Justin P. Lavely - St. Johnsbury
 
Total Assets
 
$
883,087

 
$
813,332

 
Occupancy Expense, net
 
514

 
438

 
John H. Steel
 
Daniel J. Luneau - St. Albans
 
 
 
 
 
 
 
 
 
 
 
 
 
Schuyler W. Sweet
 
Mary K. Parent - St. Johnsbury
 
 
 

 

 
Equipment Expense
 
740

 
565

 
 
 
Samuel H. Ruggiano - St. Albans
 
 
 
 
 
 
 
 
 
 
 
 
David S. Silverman - All
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Schuyler W. Sweet - Northern NH
 
 
 
Other Expenses
 
1,815

 
1,727

 
 
 
 
 
 
 
 
 
 
 
 
Union Bank Offices
(ATMs at all Branch Locations)
 
 
LIABILITIES & SHAREHOLDERS' EQUITY
MAR 31, 2020
 
MAR 31, 2019
 
 
Total
 
7,174

 
6,524

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income Before Taxes
 
2,552

 
3,020

 
VERMONT
 
 
 
 
Noninterest Bearing Deposits
 
$
139,963

 
$
127,838

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Berlin
1028 US Route 302
802.476.0061
 
Interest Bearing Deposits
 
449,943

 
425,897

 
Income Tax Expense
 
356

 
399

 
Fairfax
Jct. Routes 104 & 128
802.849.2600
 
 
 
 
 
 
 
 
 
 
Hardwick
103 VT Route 15 West
802.472.8100
 
Time Deposits
 
146,154

 
146,638

 
Net income
 
$
2,196

 
$
2,621

 
Jeffersonville
5062 VT Route 15
802.644.6600
 
 
 
 
 
 
 
 
 
 
 
 
 
Jericho
368 VT Route 15
802.899.7500
 
Borrowed Funds
 
62,164

 
37,784

 
Earnings per share
 
$
0.49

 
$
0.59

 
Johnson
198 Lower Main Street
802.635.6600
 
 
 
 
 
 
 
 
 
 
 
 
 
Lyndonville
183 Depot Street
802.626.3100
 
Accrued Interest & Other Liabilities
 
11,075

 
8,444

 
Book Value Per Share
 
$
16.50

 
$
14.94

 
Morrisville
20 Lower Main Street
802.888.6600
 
 
 
 
 
 
 
 
 
 
 
 
 
 
65 Northgate Plaza
802.888.6860
 
Common Stock
 
9,899

 
9,890

 
 
 
 
 
 
 
St. Albans
15 Mapleville Depot
802.524.9000
 
 
 
 
 
 
 
 
 
 
 
 
 
St. Johnsbury
364 Railroad Street
802.748.3131
 
Additional Paid-in Capital
 
1,226

 
967

 
 
 
 
 
 
 
 
325 Portland Street
802.748.3121
 
Retained Earnings
 
 
 
 
 
 
 
 
 
 
 
Stowe
47 Park Street
802.253.6600
 
 
64,783

 
60,147

 
 
 
 
 
 
 
Williston
Branch
 
 
Accumulated Other
Comprehensive Income (Loss)
 
2,061

 
(83
)
 
 
 
 
 
 
 
 
31 Market St
802.878.7900
 
 
 
 
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Loan Center
 
 
 
 
 
 
 
31 Market St
802.865.1000
 
Treasury Stock at Cost
 
(4,181
)
 
(4,190
)
 
 
 
 
 
 
 
 

 

 
 
 
 
 
 
Total Liabilities & Shareholders' Equity
$
883,087

 
$
813,332

 
 
NEW HAMPSHIRE
 
 
Standby letters of credit were $2,306,000 and $2,065,000 at March 31, 2020 and 2019, respectively.
 
 
Groveton
3 State Street
603.636.1611
 
 
 
Littleton
263 Dells Road
603.444.7136
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76 Main Street
603.444.5321
 
Lincoln
135 Main Street
603.745.4000
 
North Conway
Commercial Loan Center
 
 
 
2541 White Mountain Hwy
603.662.9408
 
 
 
 


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