UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2020 Commission file number: 001-15985 UNION BANKSHARES, INC. VT 03-0283552 20 LOWER MAIN STREET, P.O. BOX 667 MORRISVILLE, VT 05661 Registrant's telephone number: 802-888-6600 Former name, former address ...

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements.) Unaudited interim consolidated financial statements for Union Bankshares, Inc. as of March 31, 2020, detailing financial position and performance [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $883.1 million by March 31, 2020, driven by loans, with equity rising to $73.8 million Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$883,087** | **$872,912** | | Cash and cash equivalents | $41,712 | $51,134 | | Net loans | $671,196 | $665,165 | | **Total Liabilities** | **$809,299** | **$801,069** | | Total deposits | $736,060 | $744,027 | | Borrowed funds | $62,164 | $47,164 | | **Total Stockholders' Equity** | **$73,788** | **$71,843** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Q1 2020 net income decreased to $2.2 million, impacted by higher loan loss provisions and noninterest expenses Q1 Income Statement Summary (in thousands, except per share data) | Metric | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Net Interest Income | $7,506 | $7,365 | | Provision for loan losses | $300 | $50 | | Noninterest Income | $2,518 | $2,232 | | Noninterest Expenses | $7,172 | $6,527 | | **Net Income** | **$2,196** | **$2,621** | | **Earnings per common share** | **$0.49** | **$0.59** | | Dividends per common share | $0.32 | $0.31 | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive income for Q1 2020 was $3.3 million, including net income and unrealized gains on investments Comprehensive Income Summary (in thousands) | Component | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Net Income | $2,196 | $2,621 | | Other Comprehensive Income | $1,075 | $940 | | **Total Comprehensive Income** | **$3,271** | **$3,561** | [Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity increased to $73.8 million by March 31, 2020, driven by net income and comprehensive income - Key drivers for the change in stockholders' equity in Q1 2020 included net income of **$2.2 million**, other comprehensive income of **$1.1 million**, and cash dividends declared of **$1.4 million**[14](index=14&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2020 saw a net decrease of $9.4 million in cash, with $6.9 million used in operations Cash Flow Summary (in thousands) | Cash Flow Category | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(6,932) | $1,046 | | Net cash used in investing activities | $(8,121) | $(13,945) | | Net cash provided by financing activities | $5,631 | $2,202 | | **Net decrease in cash and cash equivalents** | **$(9,422)** | **$(10,697)** | [Notes to Unaudited Interim Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Interim%20Consolidated%20Financial%20Statements) Detailed explanations of accounting policies and financial data, including COVID-19 impacts, CECL delay, and PPP participation - The company has delayed the adoption of the new credit loss standard, **CECL (ASU 2016-13)**, to fiscal years beginning after **December 31, 2022**, as permitted for smaller reporting companies[47](index=47&type=chunk) - Due to the **COVID-19 pandemic**, the company is offering short-term loan modifications (e.g., payment deferrals for up to **180 days**) to affected borrowers. Per interagency guidance, these modifications are not considered Troubled Debt Restructurings (TDRs). As of April 30, 2020, **335** such deferrals were executed on loan balances of **$160.5 million**[42](index=42&type=chunk)[51](index=51&type=chunk)[90](index=90&type=chunk) - Subsequent to the quarter end, the company began participating in the SBA's **Paycheck Protection Program (PPP)**. As of April 30, 2020, it had received approval for **626 applications** totaling over **$66.7 million** in PPP loans, expecting to collect approximately **$2.4 million** in origination fees[113](index=113&type=chunk) - The company is also utilizing the Federal Reserve's **PPP Liquidity Facility (PPPLF)** for funding, with an outstanding advance of **$2.3 million** as of April 30, 2020[114](index=114&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses Q1 2020 financial results, highlighting decreased net income due to higher loan loss provisions and operating expenses [Overview](index=32&type=section&id=Overview) Q1 2020 net income was $2.2 million ($0.49/share), down from $2.6 million, impacted by higher loan loss provisions Key Financial Metrics | Metric | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Return on average assets | 1.03% | 1.32% | | Return on average equity | 12.09% | 16.09% | | Net interest margin | 3.88% | 4.07% | | Efficiency ratio | 70.75% | 67.14% | | Earnings per share | $0.49 | $0.59 | - The reduction in earnings was attributed to a combination of a **flat interest rate environment**, **planned technology spending**, **strategic hiring**, and the initial impacts of the **COVID-19 public health emergency**[133](index=133&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Q1 2020 operating results showed mixed performance with increased net interest income but compressed margin and higher expenses - Tax-equivalent net interest income increased by **$141 thousand** to **$7.5 million**, but the net interest margin decreased by **19 bps** to **3.88%** compared to Q1 2019[146](index=146&type=chunk) - The provision for loan losses was increased to **$300 thousand** from **$50 thousand** in the prior year, reflecting management's adjustment to economic factors due to the **COVID-19 pandemic**[151](index=151&type=chunk) - Noninterest income increased by **$286 thousand (12.8%)**, primarily due to a **$438 thousand (117.1%)** increase in net gains on sales of loans held for sale[152](index=152&type=chunk)[153](index=153&type=chunk) - Noninterest expense rose by **$645 thousand (9.9%)**, driven by increases in salaries and wages (**$323 thousand**) and equipment expense (**$175 thousand**) related to branch expansion and technology upgrades[154](index=154&type=chunk)[157](index=157&type=chunk) [Financial Condition](index=38&type=section&id=Financial%20Condition) Total assets reached $883.1 million, with increased loans, higher loan loss allowance, and strong capital levels - Total loans, including loans held for sale, increased by **$15.3 million (2.3%)** to **$693.0 million** at March 31, 2020, from year-end 2019. Real estate secured loans represented **81.6%** of the total loan portfolio[160](index=160&type=chunk)[161](index=161&type=chunk) Asset Quality Trends | Metric | March 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Nonperforming assets to total assets | 0.45% | 0.40% | | ALL to loans not held for sale | 0.94% | 0.91% | | Net charge-offs (annualized) | 0.02% | 0.06% | - The allowance for loan losses (ALL) was increased during the quarter, with the economic qualitative reserve factor for each loan portfolio raised by **5 bps** to incorporate the economic implications of the **COVID-19 pandemic**[176](index=176&type=chunk) - Borrowed funds from the FHLB increased by **$15.0 million (31.8%)** to **$62.2 million** to fund loan demand and prepare for potential cash flow needs resulting from **COVID-19 disruptions**[190](index=190&type=chunk) - Both the Company and its subsidiary bank, Union, met all capital adequacy requirements and were considered **'well capitalized'** under regulatory frameworks as of March 31, 2020[212](index=212&type=chunk)[214](index=214&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This section is omitted as permitted for smaller reporting companies under SEC regulations - The company, as a **smaller reporting company**, has elected to **omit** the **Quantitative and Qualitative Disclosures About Market Risk** section in accordance with available regulatory relief[216](index=216&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures.) Disclosure controls and procedures were effective as of March 31, 2020, with no material changes in internal control - Management concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by this report[217](index=217&type=chunk) - **No changes** in internal control over financial reporting occurred during the most recent fiscal quarter that have **materially affected**, or are reasonably likely to materially affect, these controls[218](index=218&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings.) No pending legal proceedings are expected to have a material adverse effect on the company's financials - There are no known pending legal proceedings, outside of ordinary business litigation, expected to have a **material adverse effect** on the company[220](index=220&type=chunk) [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors.) No material changes to risk factors except for a new one concerning the COVID-19 pandemic's potential adverse effects - A new material risk factor has been added regarding the **COVID-19 pandemic** and its potential **adverse effects** on the business, results of operations, and financial condition[221](index=221&type=chunk) - Specific pandemic-related risks include **increased credit losses** from borrower financial stress, **declines in collateral values**, **pressure on net interest income**, and **increased cyber fraud risk**[226](index=226&type=chunk) - The ultimate impact of the outbreak is highly uncertain and could heighten many of the known risks previously disclosed in the **2019 Annual Report on Form 10-K**[227](index=227&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The company issued 1,000 shares of common stock via incentive stock options; no equity repurchases occurred - **1,000 shares** of common stock were issued via the exercise of incentive stock options in an unregistered transaction[228](index=228&type=chunk) - There were **no repurchases** of the Company's equity securities during the quarter ended March 31, 2020[229](index=229&type=chunk) [Exhibits](index=48&type=section&id=Item%206.%20Exhibits.) This section lists filed exhibits, including CEO/CFO certifications and financial statements in XBRL format - The report includes required **CEO and CFO certifications** under the Sarbanes-Oxley Act[231](index=231&type=chunk) - Financial data is also provided in **eXtensible Business Reporting Language (XBRL)** format as an exhibit[231](index=231&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 ( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 Commission file number 001-15985 UNION BANKSHARES, INC. VERMONT 03-0283552 P.O. BOX 667 20 LOWER MAIN STREET MORRISVILLE, VT 05661-0667 Registrant's telephone number: 802-888-6600 Former name, former address a ...

Commission file number: 001-15985 UNION BANKSHARES, INC. VERMONT 03-0283552 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 2019 P.O. BOX 667 20 LOWER MAIN STREET MORRISVILLE, VT 05661 Registrant's telephone number: 802-888-6600 Former name, fo ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNION BANKSHARES, INC. VERMONT 03-0283552 P.O. BOX 667 20 LOWER MAIN STREET MORRISVILLE, VT 05661 Registrant's telephone number: 802-888-6600 Former name, former address and former fiscal year, if changed since last report: Not applicable Washington, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: March 31, 2019 Commission file number: 001-15985 UNION BANKSHARES, INC. VERMONT 03-0283552 Registrant's telephone number: 802-888-6600 Former name, former address and former fiscal year, if changed since last r ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 ( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 Commission file number 001-15985 UNION BANKSHARES, INC. VERMONT 03-0283552 P.O. BOX 667 20 LOWER MAIN STREET MORRISVILLE, VT 05661-0667 Registrant's telephone number: 802-888-6600 Former name, former address a ...