8-K - UNB - Equibles

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 2, 2023

(Exact name of registrant as specified in its charter)

UNION BANKSHARES, INC.

(State or other jurisdiction		(Commission	(IRS Employer
of incorporation)		File Number)	Identification Number)
VT		001-15985	03-0283552
(Address of principal executive offices)			(Zip Code)
20 Lower Main St., P.O. Box 667			05661-0667
Morrisville	,	VT

Registrant's telephone number, including area code: (802) 888-6600

(Former name or former address, if changed since last report)

Not applicable

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting materials pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to section 12(b) of the Act:

Common Stock, $2.00 par value	UNB	Nasdaq Stock Market
(Title of class)	(Trading Symbol)	(Exchanges registered on)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02: Results of Operations and Financial Condition

As provided in General Instruction B.2 to Form 8-K, the information furnished in this Item 2.02 and in Exhibits 99.1 hereto shall not be deemed filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing with the Securities and Exchange Commission, except as shall be expressly provided by specific reference in such filing.

On February 2, 2023, Union Bankshares, Inc (the "Company") distributed its Fourth Quarter 2022 unaudited Report to Shareholders (the "Quarterly Report") presenting information concerning the Company's results of operations and financial condition for the three and twelve months ended December 31, 2022 and declaration of a regular quarterly dividend. A copy of the Quarterly Report is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01: Financial Statements and Exhibits

d) Exhibits:

99.1	Union Bankshares, Inc. Fourth Quarter 2022 Report to Shareholders distributed February 2, 2023 referred to in Item 2.02 of the Report as furnished, not filed; herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Union Bankshares, Inc.
February 2, 2023	/s/ Karyn J. Hale
	Karyn J. Hale
	Chief Financial Officer

EXHIBIT INDEX

Exhibit 99.1	Union Bankshares, Inc. Fourth Quarter 2022 Report to Shareholders distributed February 2, 2023.

Document

Exhibit 99.1

February 2, 2023
We are pleased to report financial results for the three months and year ended December 31, 2022. Consolidated net income was 12.6 million, or 2.81 per share, compared to 13.2 million, or 2.94 per share, for the year ended December 31, 2022, and 2021, respectively. The decrease in earnings was due to a decrease of 4.0 million in noninterest income, a 309 thousand increase in noninterest expenses, partially offset by an increase in net interest income of 3.7 million.Total assets at year-end 2022 were 1.3 billion compared to total assets at year-end 2021 of 1.2 billion, a 10.9% increase year over year. Total loans outstanding as of December 31, 2022, were 960.7 million compared to 801.6 million as of December 31, 2021, an increase of 159.1 million, or 19.8%. Loan growth in 2022 was due to retaining more residential loans on the balance sheet and increases in residential construction and commercial real estate loans. These increases were partially offset by a reduction of 13.4 million of PPP loans forgiven during 2022.Funding of asset growth continues to be primarily from customer deposits which increased to 1.2 billion as of December 31, 2022, compared to 1.1 billion as of December 31, 2021, an increase of 106.8 million, or 9.8%. Brokered deposits of 33.0 million were included in total deposits as of December 31, 2022, and none were outstanding as of December 31, 2021. Also, 50.0 million of Federal Home Loan Bank advances were outstanding as of December 31, 2022, to bridge funding gaps.Our net income results for 2022 were close to budgeted expectations for the year, however the economic environment changed compared to 2021. Inflation soared in late 2021, prompting the Federal Reserve to embark on a monetary tightening cycle beginning in early 2022 and continuing to this day. This caused interest rates to climb, dampening real estate markets and convincing many that a recession				is likely in 2023. The real estate market has cooled as loan rates have risen, reducing the purchasing power of consumers and businesses in our region. This has been a test of our long-term balance sheet strategy, staying asset sensitive throughout economic cycles, and counting on net interest income to increase in rising rate environments and allowing gains on real estate loans from our mortgage loan business line to bolster net income during declining rate cycles. This strategy has worked well for us over the past decade, despite the volatility during those years.<br><br>We believe we are going into 2023 on solid footing. Loan demand remains sound, and asset quality is showing no signs of deterioration. Funding asset growth will be both a challenge and an area of focus during 2023.<br><br>Travel and tourism remain strong despite the lack of snow. This speaks to the quality experience our tourism community offers, as well as the general strength of the traveling consumer. Primary economic challenges in our region include the lack of affordable workforce housing, high construction costs, and a dismal labor market. We are closely monitoring economic conditions and asset quality but are guardedly optimistic about 2023.<br><br>At our recent Board of Directors meeting, we decided to return to an in person Annual Meeting in 2023, which is scheduled for May 17th. In addition, the Board declared a cash dividend of $0.36 per share for the quarter, an increase of 2.9% from the cash dividend of $0.35 paid in recent prior quarters, payable February 2, 2023 to shareholders of record as of January 28, 2023.
	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:
TRANSFER AGENT:
Broadridge Corporate Issuer Solutions, Inc. P.O. Box 1342 Brentwood, NY 11717866.321.8022 or720.378.5956E-mail: shareholder@broadridge.com
NASDAQ STOCK MARKET
Ticker Symbol: UNBCorporate Name: Union Bankshares, Inc.Corporate Address:20 Lower Main StreetP.O. Box 667Morrisville, VT 05661-0667Investor Relations: UBLocal.com
		David S. Silverman<br><br>President & Chief Executive Officer
			About Union 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 18 banking offices, three 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.

All values are in US Dollars.

Consolidated Balance Sheets(unaudited, in thousands)													Consolidated Statements of Income<br><br>(unaudited, in thousands)																							Union Bankshares, Inc.
				DIRECTORS
				Neil J. Van Dyke - Chair
ASSETS	Dec 31, 2022					Dec 31, 2021							Dec 31, 2022					Dec 31, 2021				Dec 31, 2022					Dec 31, 2021									Timothy W. Sargent - Vice Chair					David S. Silverman - President & CEO
					Joel S. Bourassa					Karyn J. Hale - Chief Financial Officer
																	(3 months ended)									(12 months ended)
																									Timothy W. Sargent - Secretary
Cash and Due from Banks			$	4,504									Interest Income		$	12,355					10,023					$	43,948					$	39,273
																													Nancy C. Putnam									Kristy Adams Alfieri - Assistant Secretary
																													Gregory D. Sargent
Federal Funds Sold & Overnight Deposits			33,381					61,263					Interest Expense		2,005					779				4,524						3,565						David S. Silverman
													Net Interest Income		10,350					9,244				39,424						35,708						Janet P. Spitler
Interest Bearing Deposits in Banks			16,428					13,196
												—					(225)				—					—
Investment Securities			251,531					268,951					Net Interest Income After<br>Credit for Loan Losses		10,350					9,469				39,424						35,708						Union Bank					REGIONAL<br>ADVISORY BOARD<br>MEMBERS
Loans Held for Sale			1,178					13,829
												209					209				838					808						DIRECTORS
Loans, net			959,493					787,755					Noninterest Income		2,091					2,793				8,149						12,155						Neil J. Van Dyke - Chair					Michael R. Barrett - St. Johnsbury
																												Timothy W. Sargent - Vice Chair								Steven J. Bourgeois - St. Albans
Reserve for Loan Losses			(8,339)					(8,336)					Noninterest Expenses:																							Joel S. Bourassa					Andrew A. Dean - Northern NH
													Salaries & Wages		3,578					3,894				14,083						14,448						Dawn D. Bugbee					Stanley T. Fillion - Northern NH
Premises and Equipment, net			20,479					21,615																												Mary K. Parent					Rosemary H. Gingue - St. Johnsbury
													Employee Benefits		1,269					1,029				5,023						4,593						Nancy C. Putnam					John M. Goodrich - St. Johnsbury
Accrued Interest & other Assets			57,740					42,441																				Gregory D. Sargent								Christopher M. Knapp - Northern NH
																																				David S. Silverman					Coleen K. Kohaut - St. Albans
Total Assets			$	1,336,395									Occupancy Expense, net		476					461				1,913						1,890						Janet P. Spitler					Justin P. Lavely - St. Johnsbury
																																									Daniel J. Luneau - St. Albans
													Equipment Expense		894					905				3,692						3,447											Samuel H. Ruggiano - St. Albans
																																				Christine A. Sheley - Northern NH
																																									David S. Silverman - All
LIABILITIES & SHAREHOLDERS' EQUITY	Dec 31, 2022					Dec 31, 2021							Other Expenses		2,172					2,176				8,453						8,477
																								Union Bank Offices<br><br>(ATMs at all Branch Locations)
													Total		8,389					8,465					33,164						32,855
Noninterest Bearing Deposits			$	286,145
											Income Before Taxes			4,261					4,006				15,247					15,816						VERMONT
Interest Bearing Deposits			762,722					723,479
																																Berlin			1028 US Route 302					802.476.0061
Time Deposits			153,045					106,715					Income Tax Expense		817					628				2,632						2,646						Fairfax			Jct. Routes 104 & 128			802.849.2600
																																				Hardwick			103 VT Route 15 West			802.472.8100
Borrowed Funds			50,000					—					Net income		$	3,444								$	12,615					$	13,170					Jeffersonville			5062 VT Route 15			802.644.6600
																																				Jericho			368 VT Route 15			802.899.7500
Subordinated Notes			16,205					16,171					Earnings per share		$	0.77								$	2.81					$	2.94					Johnson			198 Lower Main Street			802.635.6600
																																				Lyndonville			183 Depot Street			802.626.3100
Accrued Interest & Other Liabilities			13,058					9,779					Book Value Per Share											$	12.25					$	18.77					Morrisville			20 Lower Main Street			802.888.6600
																																							65 Northgate Plaza			802.888.6860
Common Stock			9,965					9,934																												Shelburne			5068 Shelburne Road			802.985.0250
																																				St. Albans			15 Mapleville Depot			802.524.9000
Additional Paid-in Capital			2,225					1,769																												St. Johnsbury			Operations and Loan Center
Retained Earnings																																							364 Railroad Street			802.748.3131
		84,669					78,350																														Branch
Accumulated OtherComprehensive (loss) Income			(37,419)					(1,552)																															325 Portland Street			802.748.3121
																																Stowe			47 Park Street					802.253.6600
													Williston		Branch
Treasury Stock at Cost			(4,220)					(4,160)											31 Market St				802.878.7900
																			Loan Center
Total Liabilities & Shareholders' Equity			$	1,336,395					1,205,373										31 Market St				802.865.1000
Standby letters of credit were 1,762,000 and 2,158,000 at December 31, 2022 and 2021, respectively.																NEW HAMPSHIRE
				Groveton			3 State Street					603.636.1611
																Littleton			263 Dells Road				603.444.7136
		76 Main Street					603.444.5321
		135 Main Street					603.745.4000
		Commercial Loan Center
		2541 White Mountain Hwy					603.662.9408

All values are in US Dollars.