Profile: Union Bankshares, Inc. (UNB.O)

Union Bankshares, Inc., incorporated in 1982, is a one-bank holding company whose subsidiary is Union Bank (Union or the Bank). Union was organized and chartered as a state bank and became a wholly owned subsidiary of the Company upon its formation. The Bank is a commercial bank operating in northern Vermont and New Hampshire. Union is a community bank that provides commercial and retail banking services. The Bank primarily provides retail banking services to individuals living within its market area and commercial banking services to small and medium-sized corporations, partnerships, and sole proprietorships, as well as nonprofit organizations, local municipalities, and school districts.

As of December 31, 2008, Union operated 15 community-banking locations in Lamoille, Caledonia, Franklin counties of Vermont, one in Littleton (Grafton County), and New Hampshire. Union also operates 31 automated teller machines (ATMs) in northern Vermont and one in Littleton, New Hampshire. Union owns, free of encumbrances, eleven of its branch locations and its operations center and leases four branch locations, and certain ATM premises from third parties.

Lending Activities

Union works with customers and its business partners and government agencies to design financing that meets customers' needs, which might include involvement of the Vermont Housing Finance Agency, the Small Business Administration (SBA), the United States Department of Agriculture Rural Development Agency or the Federal Home Loan Bank (FHLB) of Boston. The Bank utilizes its lending activities to develop customer relationships in areas served by its network of branches as a means to augment deposits. Union produces loans primarily for its portfolio although it periodically sells or participates out a portion of the loans produced to mitigate interest rate or credit risk.

The Bank's retail loan portfolio consists primarily of mortgage loans, construction (B.U.I.L.D.) loans, home equity loans and lines of credit, traditional installment loans, and personal lines of credit. Its commercial loan portfolio consists of term loans, lines of credit, and commercial real estate loans provided to primarily locally based borrowers. The municipal loan portfolio consists of term loans and construction financing.

Investment Activities

The Banks adequate assets are invested in securities to provide liquidity, diversification of income sources, and safety. The Bank provides asset management services to individuals and organizations.

Source of Funds

The Bank's income is derived principally from interest on loans and earnings on other investments. Its retail depository services include personal checking accounts, negotiable order of withdrawal (NOW) accounts, savings accounts, money market accounts, certificates of deposit, and individual retirement accounts (IRA).