Exhibit 99.1

Dear Shareholder,

February 10, 2011

 

Union Bankshares, Inc.

 

[ex991002.gif]

We are pleased to report the financial results of your company for 2010 were solid in a number of areas. Net income increased by 6.9%, return on average assets was 1.26%, and return on average equity was 13.37%, all strong performance indicators.

Contributing to the performance improvement were increases in net interest income–$868,000, non interest income–$413,000, and decreases in employee benefits, occupancy, equipment and FDIC insurance expenses combined of $354,000. Partially offsetting the above gains were increases in income taxes–$283,000, salaries–$462,000, and the provision for loan losses–$120,000.

Of particular significance to 2010’s results were lending related activities. Interest rates remained at historically low levels contributing to the continued refinancing of residential mortgages. Over $51 million in residential loans were originated and sold, with the vast majority servicing retained, into the secondary mortgage market generating $1 million in premium income.

Our portfolio of sold and serviced loans now exceeds $165 million, placing us in the top 5% of banks in our peer group. Service fees generated by these sold loans generated $549,000 in revenue during 2010 and will provide a continuing stream of fees in the years to come.

As mentioned earlier, we increased our provision for bad debts for 2010 to $520,000. Although we charged off $316,000 in loans, the main reason for the increase in the provision was the composition of and growth in the loan portfolio of 6.7%. We have continued to experience good demand for commercial real estate as well as residential loans. In addition, we just received notice of our acceptance as an approved lender for the Federal Housing Administration (FHA) loan programs.

In mid 2010, Congress passed the Wall Street Reform and Consumer Protection Act (Dodd-Frank bill). This legislation makes sweeping changes in the banking industry, consumer protection, and implements price controls on certain banking fees. Although community banks are exempted from some of these new rules, you can be assured the costs of regulatory compliance will increase for all financial institutions while revenue sources are being reduced.

This past November we announced that David Silverman, Senior Vice President and Senior Loan Officer of Union Bank, had been selected the successor to Ken Gibbons. In accordance with the management succession plan adopted by the Board last July, Mr. Silverman will become President of both companies on April 1, 2011, and CEO in May 2012. Mr. Gibbons will become Board Chair upon the retirement of current Board Chair, Richard C. Sargent, at the annual meeting of shareholders in May 2011, and will remain as CEO during the management transition year of May 2011 to May 2012. Mr. Silverman was elected a director of Union Bank on November 17, 2010, and it is also expected that Mr. Silverman will stand for election to the Company’s Board of Directors at the 2011 annual meeting. The transition process has begun and we are all looking forward to the changes it will bring.

Enclosed is your dividend check or advice of deposit, representing a dividend of $0.25 per share to shareholders of record January 29, 2011, and payable February 10, 2011.


Sincerely,

 

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

(ATMs at all Branch Locations)

 

 

 

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

 

 

 

Green Mtn. Mall

HARDWICK

MORRISVILLE

1998 Memorial Dr.

103 VT Rte. 15

20 Lower Main St.

802-748-2454

802-472-8100

802-888-6600

 

 

 

SO. BURLINGTON

JEFFERSONVILLE

65 Northgate Plaza

Loan Center

44 Main St.

Route 100

30 Kimball Ave.

802-644-6600

802-888-6860

802-865-1000

 

 

 

JOHNSON

ST. ALBANS

STOWE

198 Lower Main St.

15 Mapleville Depot

47 Park St.

802-635-6600

802-524-9000

802-253-6600

[ex991003.jpg]

[ex991004.jpg]

 

 

 

Richard C. Sargent
Chairman

Kenneth D. Gibbons
President & CEO

 

 

 




Fourth Quarter Report

December 31, 2010


CONSOLIDATED BALANCE SHEETS  (unaudited)

 

CONSOLIDATED STATEMENTS OF INCOME  (unaudited)

 

December 31, 2010

December 31, 2009

 

 

12/31/2010

12/31/2009

12/31/2010

12/31/2009

ASSETS

 

 

 

 

(3 months ended)

(12 months ended)

Cash and due from banks

$5,447,386 

$4,941,612 

 

Interest income

$5,814,504

$5,705,281

$22,907,235

$23,216,587

Federal funds sold & overnight deposits

8,844,889 

17,190,525 

 

Interest expense

995,679

1,171,194

4,117,246

5,294,210

Interest bearing deposits in banks

14,041,101 

22,974,800 

 

    Net interest income

4,818,825

4,534,087

18,789,989

17,922,377

Investment securities

24,279,845 

24,648,589 

 

    Provision for loan losses

140,000

155,000

520,000

400,000

Loans held for sale

5,610,436 

9,262,352 

 

    Net interest income after

 

 

 

 

Loans, net

376,460,215 

348,904,624 

 

      provision for loan losses

4,678,825

4,379,087

18,269,989

17,522,377

Reserve for loan losses

(3,754,618)

(3,492,783)

 

 

 

 

 

 

Premises and equipment, net

7,842,281 

7,613,319 

 

Trust income

138,291

101,047

481,301

379,042

Accrued interest & other assets

15,095,578 

15,479,058 

 

Noninterest income

1,371,509

1,288,801

5,452,949

5,142,265

Total Assets

$453,867,113 

$447,522,096 

 

Noninterest expenses:

 

 

 

 

 

 

 

 

    Salaries & wages

1,719,509

1,555,542

6,558,759

6,097,064

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

    Pension & employee benefits

695,449

749,135

2,828,401

2,923,803

Noninterest bearing deposits

$64,526,154 

$60,128,845 

 

    Occupancy expense, net

236,602

215,531

937,040

956,966

Interest bearing deposits

312,134,328 

308,698,292 

 

    Equipment expense

285,373

264,716

1,056,687

1,109,626

Borrowed funds

28,985,907 

30,992,604 

 

    Other expenses

1,479,126

1,332,031

5,533,858

5,309,714

Accrued interest & other liabilities

6,072,296 

6,522,745 

 

        Total

4,416,059

4,116,955

16,914,745

16,397,173

Common stock

9,843,572 

9,843,572 

 

 

 

 

 

 

Additional paid-in capital

244,363 

219,331 

 

Income before taxes

1,772,566

1,651,980

7,289,494

6,646,511

Retained earnings

37,622,575 

36,494,110 

 

Income tax expense

390,944

372,062

1,702,707

1,419,943

Accumulated other comprehensive loss

(1,739,244)

(1,653,077)

 

 

 

 

 

 

Treasury stock at cost

(3,822,838)

(3,724,326)

 

Net income

$1,381,622

$1,279,918

$5,586,787

$5,226,568

Total Liabilities and Shareholders' Equity

$453,867,113 

$447,522,096 

 

 

 

 

 

 

 

 

 

 

Earnings per Share

$0.31

$0.29

$1.25

$1.17

 

 

 

 

Book value per Share

 

 

$9.46

$9.23

Standby letters of credit were $1,494,000 and $2,438,000 at December 31, 2010 and 2009, respectively.

 


DIRECTORS – UNION BANKSHARES, INC.

 

OFFICERS – UNION BANK

Richard C. Sargent (chairman)

Kenneth D. Gibbons

Schuyler W. Sweet

 

Rhonda L. Bennett - Vice President

Morrisville

Edward L. Levite - Senior Loan Originator

So Burlington

Cynthia D. Borck

Robert P. Rollins

Neil J. Van Dyke

 

Therese H. Butler - Assistant Treasurer

Morrisville

Carrie R. Locklin - Assistant Treasurer

Morrisville

Steven J. Bourgeois

John H. Steel

 

 

Stacey L.B. Chase - Assistant Treasurer

Morrisville

Robyn A. Masi - Vice President

Stowe

 

 

Jeffrey G. Coslett - Senior Vice President

Morrisville

Thomas J. Meshako - Senior Vice President

Morrisville

DIRECTORS – UNION BANK

 

Michael C. Curtis - Vice President

St. Albans

Marsha A. Mongeon - Sr. Vice President, CFO

Morrisville

Richard C. Sargent (chairman)

Robert P. Rollins

John H. Steel

 

Peter J. Eley - SVP, Managing Trust Officer

Morrisville

Karen Carlson Noyes - Vice President

Morrisville

Cynthia D. Borck

Timothy W. Sargent

Schuyler W. Sweet

 

Kenneth D. Gibbons - President, CEO

Morrisville

Barbara A. Olden - Vice President

St. Johnsbury

Steven J. Bourgeois

David S. Silverman

Neil J. Van Dyke

 

Don D. Goodhue - Vice President

Morrisville

Deborah J. Partlow - Asst. VP, Sr. Trust Officer

Morrisville

Kenneth D. Gibbons

 

 

 

Melissa A. Greene - Asst. Vice President

Hardwick

Bradley S. Prior - Assistant Treasurer

Morrisville

 

 

 

 

Karyn J. Hale - Vice President

Morrisville

Craig S. Provost - Vice President

Stowe

OFFICERS – UNION BANKSHARES, INC.

 

Claire A. Hindes - Asst. Vice President

Morrisville

Colleen D. Putvain - Assistant Treasurer

Morrisville

Richard C. Sargent - Chairman

David S. Silverman - Vice President

 

Patricia N. Hogan - Vice President

Morrisville

Robert J. Richardson - Vice President

Morrisville

Kenneth D. Gibbons - President & CEO

John H. Steel - Secretary

 

Tracey D. Holbrook - Regional Vice Pres.

St. Johnsbury

David S. Silverman - Senior Vice President

Morrisville

Marsha A. Mongeon - Vice President/Treasurer

JoAnn A. Tallman - Asst. Secretary

 

Lura L. Jacques - Asst. VP, Trust Officer

St. Albans

Judy R. Smith - Assistant Vice President

St. Albans

 

 

 

Lynne P. Jewett - Asst. Vice President

Morrisville

John H. Steel - Secretary

Stowe

REGIONAL ADVISORY BOARD MEMBERS

 

Stephen H. Kendall - Vice President

Morrisville

Curtis C. Swan - Assistant Vice President

Fairfax

Judy F. Aydelott - Littleton

Kenneth D. Gibbons - All

 

Susan O. Laferriere - Vice President

St. Johnsbury

JoAnn A. Tallman - Assistant Secretary

Morrisville

Steven J. Bourgeois - St. Albans

Coleen Kohaut - St. Albans

 

Dennis J. Lamothe - Vice President

St. Johnsbury

Francis E. Welch - Assistant Vice President

Morrisville

J.R. Alexis Clouatre - St. Johnsbury

Daniel J. Luneau - St. Albans

 

Susan F. Lassiter - Vice President

Jeffersonville

Martha J. Wilkins - Assistant Treasurer

Lyndonville

Dwight A. Davis - St. Johnsbury

Samuel H. Ruggiano - St. Albans

 

Christine S. Latulip - Vice President

Littleton

Lorraine G. Willett - Assistant Vice President

Morrisville

Kirk Dwyer - St. Johnsbury

Schuyler W. Sweet - Littleton

 

 

 

 

 

Stanley T. Fillion - Littleton

Norrine A. Williams – Littleton

 

 

 

 

 





The following information was filed by Union Bankshares Inc (UNB) on Wednesday, February 9, 2011 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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