Results of Operations and Financial Condition - Form 8-K

We are pleased to report a summary of financial results for Union Bankshares, Inc. for the three months ended March 31, 2024. Consolidated net income for the first quarter was $2.41 million, compared to $2.98 million for the first quarter of 2023. The $560 thousand decrease in earnings was attributable to a decrease in net interest income of $967 thousand and an increase in noninterest expenses of $492 thousand, partially offset by an increase in noninterest income of $301 thousand and decreases of $304 thousand in credit loss expense and $294 thousand in income tax expense.

Total assets increased 4.1% to $1.42 billion as of March 31, 2024 primarily due to loan growth. Total loans outstanding were $1.04 billion as of March 31, 2024, compared to $976.6 million as of March 31, 2023. Asset quality remains strong with minimal past due loans and no charge-offs for the three months ended March 31, 2024.

Total deposits were $1.17 billion as of March 31, 2024 and include $100.0 million of purchased brokered deposits, compared to deposits of $1.23 billion as of March 31, 2023 with $108.0 million of purchased deposits. Borrowed funds were $150.7 million as of March 31, 2024, compared to $45.1 million outstanding as of March 31, 2023. The Company's capital remains strong and is considered well capitalized by regulatory guidelines as of March 31, 2024.

In late 2023, the Federal Reserve signaled they were finished with interest rate increases and possibly would begin to reduce rates in 2024. The economic data released to date in 2024, as it relates to inflation, unemployment, and other pertinent information, is not supportive of lower rates resulting in no rate cuts by the Federal Reserve as of this writing. The most recent messaging from the Federal Reserve is they are prepared to stay "higher for longer" until the economic data supports a reduction in interest rates.

Despite the earnings pressure created from the prolonged inversion of the yield curve, the Company's financial position remains strong, supported by excellent asset quality, a diverse funding base including customer deposits and wholesale funding sources and a strong liquidity position.

Northern Vermont and New Hampshire experienced a once in a lifetime event on April 8, 2024, with the viewing of the solar eclipse. Several of our towns were in the path of totality which made for an awe-inspiring experience for residents and visitors alike. It was nothing less than amazing if you were fortunate to view it. April is typically a slow tourism time in the northeast being in between ski season and summer and while results have not yet been released, early counts indicated thousands of visitors came to the area to view this event. These visitors provided a boost to the economy with increased spending on accommodations, food, and other tourism related activities. Many towns hosted special events and activities to welcome and entertain the viewers. All in all, it was a spectacular experience.

We would like to take this opportunity to remind you that you are invited to the 133rd Annual Meeting of Union Bankshares, Inc. which will be held on May 15, 2024 at 3:00pm at the Stearns Center Performance Space, Vermont State University - Johnson Campus, 337 College Hill Road, Johnson, VT. A reception will be held immediately after the Annual Meeting.

Lastly, on April 17, 2024, the Board of Directors declared a cash dividend of $0.36 payable May 2, 2024 to shareholders of record as of April 27, 2024.

Neil J. Van Dyke

Chair

David S. Silverman

President & Chief Executive Officer

AboutUnion Bankshares

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 19 banking offices, 2 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 130 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. Union Bank has received an "Outstanding" rating for its compliance with the Community Reinvestment Act (CRA). An institution in this group has an excellent record of helping to meet the credit needs of its assessment area, particularly in low-and moderate income neighborhoods, in a manner consistent with its resources and capabilities.

Consolidated Balance Sheets

(unaudited, in thousands)

Consolidated Statements of Income

(unaudited, in thousands)

DIRECTORS

Neil J. Van Dyke - Chair

Neil J. Van Dyke - Chair

Timothy W. Sargent - Vice Chair

David S. Silverman - President & CEO

Karyn J. Hale - Chief Financial Officer

Timothy W. Sargent - Secretary

Kristy Adams Alfieri - Assistant Secretary

DIRECTORS

Neil J. Van Dyke - Chair

Michael R. Barrett - St. Johnsbury

Timothy W. Sargent - Vice Chair

Steven J. Bourgeois - St. Albans

Andrew A. Dean - Northern NH

Stanley T. Fillion - Northern NH

Rosemary H. Gingue - St. Johnsbury

John M. Goodrich - Northern NH

Christopher M. Knapp - Northern NH

Coleen K. Kohaut - St. Albans

Justin P. Lavely - St. Johnsbury

Daniel J. Luneau - St. Albans

Samuel H. Ruggiano - St. Albans

Christine A. Sheley - Northern NH

David S. Silverman - All

Union Bank Offices

(ATMs at all Branch Locations)