A[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, 2021 Commission file number: 001-15985 Yes ☒ No ☐ 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, fo ...

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: March 31, 2021 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 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ 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, 2020 Commission file number 001-15985 UNION BANKSHARES, INC. VT 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 and former ...

PART I FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements.) Union Bankshares, Inc.'s unaudited interim consolidated financial statements detail financial position, performance, and cash flows [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$1,009,135** | **$872,912** | | Net Loans | $757,823 | $665,165 | | **Total Deposits** | **$910,079** | **$744,027** | | Borrowed Funds | $9,497 | $47,164 | | **Total Stockholders' Equity** | **$78,424** | **$71,843** | - Total assets grew by **15.6%** to over **$1 billion** as of September 30, 2020, from December 31, 2019, primarily driven by a significant **22.3%** increase in total deposits and a **13.9%** increase in net loans[8](index=8&type=chunk) [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Key Income Statement Data (in thousands, except per share data) | Metric | Q3 2020 | Q3 2019 | 9 Months 2020 | 9 Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $8,185 | $7,647 | $23,469 | $22,519 | | Provision for Loan Losses | $800 | $150 | $1,600 | $350 | | Noninterest Income | $5,508 | $2,723 | $11,014 | $7,426 | | **Net Income** | **$4,147** | **$2,738** | **$9,011** | **$7,889** | | **Earnings Per Share** | **$0.92** | **$0.62** | **$2.01** | **$1.77** | - Net income for Q3 2020 increased by **51.5%** year-over-year, driven by higher net interest income and a more than doubling of noninterest income, largely from gains on sales of loans, with the provision for loan losses also increasing significantly[10](index=10&type=chunk) [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive Income (in thousands) | Metric | Q3 2020 | Q3 2019 | 9 Months 2020 | 9 Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $4,147 | $2,738 | $9,011 | $7,889 | | Other Comprehensive (Loss) Income | ($124) | $441 | $1,607 | $2,186 | | **Total Comprehensive Income** | **$4,023** | **$3,179** | **$10,618** | **$10,075** | [Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) - Total stockholders' equity increased from **$71.8 million** at the end of 2019 to **$78.4 million** as of September 30, 2020, primarily due to **$9.0 million** in net income and a **$1.6 million** increase in other comprehensive income, partially offset by **$4.3 million** in cash dividends declared[17](index=17&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash (Used in) Provided by Operating Activities | ($11,682) | $1,392 | | Net Cash Used in Investing Activities | ($99,114) | ($33,986) | | Net Cash Provided by Financing Activities | $124,139 | $25,205 | - For the first nine months of 2020, a significant increase in deposits led to strong cash inflows from financing activities (**$124.1 million**), which funded a net increase in loans (reflected in investing activities) and a net decrease in short-term borrowings[19](index=19&type=chunk)[20](index=20&type=chunk) [Notes to Unaudited Interim Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Interim%20Consolidated%20Financial%20Statements) - The company is actively managing risks associated with the COVID-19 pandemic, including offering loan payment deferrals to affected borrowers, with **$39.1 million** in loans remaining under deferral as of September 30, 2020, a significant decrease from **$173.3 million** at June 30, 2020[28](index=28&type=chunk)[41](index=41&type=chunk) - The company participated in the Paycheck Protection Program (PPP), originating **718** loans totaling **$69.8 million**, which are classified as commercial loans and fully guaranteed by the U.S. Government[42](index=42&type=chunk)[63](index=63&type=chunk) - The Allowance for Loan Losses (ALL) increased to **$7.7 million** at September 30, 2020, from **$6.1 million** at year-end 2019, with the provision for loan losses for the first nine months of 2020 at **$1.6 million**, a substantial increase from **$350 thousand** in the prior year, reflecting adjustments for economic disruption from COVID-19[75](index=75&type=chunk)[131](index=131&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses the company's financial performance and condition, highlighting Q3 2020 net income growth and COVID-19 impact [Overview](index=35&type=section&id=Overview) - Consolidated net income for Q3 2020 increased **51.5%** to **$4.1 million** compared to Q3 2019, driven by a **$538 thousand** increase in net interest income and a **$2.8 million** increase in noninterest income[126](index=126&type=chunk) - The company originated **$69.8 million** in PPP loans, which contributed **$486 thousand** in interest and fee income for Q3 2020[127](index=127&type=chunk) - Sales of residential loans to the secondary market surged to **$89.8 million** in Q3 2020, generating gains of **$3.3 million**, compared to sales of **$44.7 million** and gains of **$824 thousand** in Q3 2019[128](index=128&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Net Interest Margin and Spread | Metric | Q3 2020 | Q3 2019 | 9 Months 2020 | 9 Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Margin | 3.57% | 4.06% | 3.66% | 4.06% | | Net Interest Spread | 3.42% | 3.87% | 3.49% | 3.88% | - The provision for loan losses increased to **$1.6 million** for the first nine months of 2020, compared to **$350 thousand** for the same period in 2019, due to management's adjustment of economic factors related to the COVID-19 pandemic[153](index=153&type=chunk) - Noninterest income for the first nine months of 2020 grew **48.3%** to **$11.0 million**, primarily due to a **$3.5 million** increase in net gains on sales of residential loans[154](index=154&type=chunk) - Noninterest expense for the first nine months of 2020 increased **9.6%** to **$22.3 million**, driven by higher salaries and wages (including commissions for mortgage originators), employee benefits, and equipment expenses[156](index=156&type=chunk) [Financial Condition](index=43&type=section&id=Financial%20Condition) - Total assets grew **15.6%** to **$1.009 billion** at September 30, 2020, from **$872.9 million** at year-end 2019[162](index=162&type=chunk) - Total deposits increased by **$166.1 million** (**22.3%**) since year-end 2019, driven by increases in both noninterest and interest-bearing accounts, reflecting customer deposits of PPP loan proceeds and government stimulus payments[164](index=164&type=chunk)[185](index=185&type=chunk) Asset Quality Ratios | Ratio | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Nonperforming assets to total assets | 0.34% | 0.40% | | Allowance for loan losses to loans not held for sale | 1.00% | 0.91% | - The company and its subsidiary bank met all capital adequacy requirements and were considered "well capitalized" under regulatory frameworks, with a consolidated total capital to risk-weighted assets ratio of **13.65%** as of September 30, 2020[215](index=215&type=chunk)[217](index=217&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=52&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 omitted this disclosure in accordance with SEC regulatory relief[219](index=219&type=chunk) [Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of September 30, 2020, and concluded they were effective, with no material changes to internal controls over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2020[220](index=220&type=chunk) - There were no material changes in the company's internal control over financial reporting during the most recent fiscal quarter[221](index=221&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings.) The company is involved in various legal proceedings in the normal course of business, but management does not expect any resulting liability to have a material adverse effect on its financial condition or results of operations - In the opinion of management, any liability resulting from ongoing legal proceedings is not expected to have a material adverse effect on the Company's consolidated financial condition or results of operations[222](index=222&type=chunk) [Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors.) This section updates the risk factors from the 2019 Annual Report, adding a specific and material risk related to the ongoing COVID-19 pandemic, highlighting significant uncertainty and potential for material adverse effects on the business - A new risk factor has been added to address the potential material adverse effects of the ongoing COVID-19 pandemic, which is highly uncertain and difficult to predict[223](index=223&type=chunk) - Key risks from the pandemic include potential credit losses from borrower financial stress (particularly in hospitality and retail), declines in collateral values, negative pressure on net interest income, and increased cyber fraud risk[224](index=224&type=chunk)[227](index=227&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The company did not issue any unregistered equity securities or repurchase any of its equity securities during the quarter ended September 30, 2020 - During the quarter ended September 30, 2020, the Company did not issue any unregistered equity securities and did not repurchase any of its equity securities[228](index=228&type=chunk) [Exhibits](index=54&type=section&id=Item%206.%20Exhibits.) This section lists the exhibits filed with the Form 10-Q, including CEO/CFO certifications under the Sarbanes-Oxley Act and the financial statements formatted in iXBRL - The report includes certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[232](index=232&type=chunk) - Financial statements and related notes are provided in Inline eXtensible Business Reporting Language (iXBRL) format[232](index=232&type=chunk)

Financial Performance - Consolidated net income increased by $138 thousand, or 5.5%, to $2.7 million for Q2 2020 compared to $2.5 million for Q2 2019, driven by increases in net interest income and noninterest income [139]. - Consolidated net income for the six months ended June 30, 2020, was $4.9 million, or $1.09 per share, down from $5.2 million, or $1.15 per share, for the same period in 2019 [142]. - Earnings per share for Q2 2020 was $0.60, compared to $0.56 for Q2 2019 [149]. - Return on average assets decreased to 1.11% for Q2 2020 from 1.25% in Q2 2019 [149]. - Total stockholders' equity increased by $3.9 million to $75.8 million at June 30, 2020, from $71.8 million at December 31, 2019 [176]. Income and Expenses - Net interest income increased by $412 thousand, or 2.8%, to $15.3 million for the six months ended June 30, 2020, despite a 150 basis point reduction in short-term interest rates [143]. - Total noninterest income amounted to $5.5 million for the six months ended June 30, 2020, an increase of $803 thousand, or 17.1%, primarily due to gains on the sale of residential loans [145]. - Total noninterest expenses were $14.3 million for the six months ended June 30, 2020, compared to $13.3 million for the same period in 2019, driven by planned technology spending and hiring [146]. - Noninterest expense increased by $311 thousand, or 4.6%, for the three months ended June 30, 2020, compared to the same period in 2019 [169]. Loan and Asset Management - Union originated $68.5 million in PPP loans during Q2 2020, generating interest income and origination fees of $368 thousand [140]. - Sales of qualifying residential loans for Q2 2020 were $55.4 million, resulting in a gain on sales of $1.2 million, compared to $35.2 million and a gain of $683 thousand in Q2 2019 [141]. - Average loans increased by $65.5 million, or 10.12%, to $713.2 million for the six months ended June 30, 2020 [157]. - The Company originated $72.8 million in loans guaranteed under various government programs, including $68.5 million in PPP loans, as of June 30, 2020 [179]. - As of June 30, 2020, the total loan portfolio amounted to $736.2 million, an increase from $677.7 million as of December 31, 2019, representing an 8.6% growth [177]. Asset Quality - The provision for loan losses was $800 thousand for the six months ended June 30, 2020, compared to $200 thousand for the same period in 2019, reflecting adjustments due to economic disruptions [144]. - Nonperforming assets to total assets increased to 0.35% in Q2 2020 from 0.20% in Q2 2019 [149]. - Nonperforming assets totaled $3.2 million as of June 30, 2020, a decrease from $3.5 million at December 31, 2019, indicating improved asset quality [186]. - The allowance for loan losses (ALL) was $6.9 million as of June 30, 2020, compared to $6.1 million at December 31, 2019, reflecting a proactive approach to potential credit losses [195]. Capital and Liquidity - The Company's total capital increased from $71.8 million at December 31, 2019, to $75.8 million at June 30, 2020, primarily due to net income and an increase in accumulated other comprehensive income [148]. - Total capital to risk-weighted assets increased to 13.44% for Q2 2020 from 13.06% in Q2 2019 [149]. - The Company maintained access to unused lines of credit up to $108.7 million as of June 30, 2020, in addition to $32.3 million in outstanding borrowings [215]. - Management believes the Company has sufficient liquidity to meet all reasonable borrower, depositor, and creditor needs in the current economic environment [219]. Deposits and Borrowings - Total deposits increased by $75.5 million, or 10.1%, to $819.5 million at June 30, 2020, from $744.0 million at December 31, 2019 [175]. - The Company had $593.0 million, or 72.4%, of total deposits below the FDIC insurance limit of $250,000 as of June 30, 2020 [206]. - Total borrowed funds decreased by $37.7 million, or 79.9%, from $47.2 million at December 31, 2019, to $9.5 million at June 30, 2020, primarily due to the maturity of $40.0 million in advances [207]. Market Conditions - The unemployment rate in Vermont was reported at 9.4% for June 2020, significantly higher than 2.1% in June 2019, highlighting the economic impact of COVID-19 [185]. - The Company continues to evaluate growth opportunities through internal growth or potential acquisitions [220].

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)

Financial Performance - The net income for the year ended December 31, 2019, was $10,648 thousand, compared to $7,072 thousand in 2018, reflecting an increase of 50.6%[141]. - The Company's net income for 2019 was $10.6 million, or $2.38 per share, representing an increase of 49.3% compared to $7.1 million, or $1.58 per share in 2018[168]. - The return on average assets improved to 1.30% in 2019 from 0.94% in 2018, showing a significant enhancement in asset efficiency[141]. - The efficiency ratio improved to 66.65% in 2019 from 76.22% in 2018, indicating better cost management[141]. - Noninterest income rose to $10.323 million in 2019, up from $9.473 million in 2018, marking an increase of 9.0%[184]. - Total noninterest expense decreased to $27.456 million in 2019 from $29.277 million in 2018, a reduction of 6.2%[186]. - The effective tax rate decreased to 14.7% in 2019 from 15.3% in 2018, attributed to increases in tax-exempt income and federal income tax credits[188]. Loan and Deposit Growth - The company's loans and loans held for sale reached $677,686 thousand in 2019, up from $645,360 thousand in 2018, indicating a growth of 5.1%[141]. - Customer deposits increased by $37.3 million, or 5.3%, to $744.0 million at December 31, 2019, supported by branch network expansion and enhanced products[172]. - Net loans and loans held for sale rose by $32.0 million, or 5.0%, to $672.6 million, accounting for 77.1% of total assets[171]. - The Company sold $158.0 million of qualified residential real estate loans in 2019, compared to $116.7 million in 2018, to mitigate long-term interest rate risk[195]. - The Company’s gross loan portfolio increased by $32.3 million, or 5.0%, to $677.7 million, representing 77.6% of total assets at year-end 2019[194]. Capital and Regulatory Compliance - Union's Tier I and Total Risk Based Capital Ratios were 11.9% and 13.0% respectively as of December 31, 2019, indicating it is considered well capitalized[55]. - The capital conservation buffer requirement of 2.5% became fully effective for the Company and Union on January 1, 2019[48]. - The FRB requires a minimum common equity Tier 1 capital ratio of 4.5% and a minimum Tier 1 risk-based ratio of 6.0%[48]. - The Company and Union are subject to various federal and state consumer protection laws, which mandate compliance and can lead to enforcement actions if violated[59]. - The company is subject to the Gramm-Leach-Bliley Act (GLBA), which mandates the implementation of policies to protect nonpublic personal information and requires a comprehensive written information security program[62]. Risk Management - The company has adopted asset and liability management policies to mitigate the adverse effects of interest rate changes on net interest income, which is crucial for profitability[85]. - The company is required to maintain an allowance for loan losses, which is reviewed quarterly by the Board of Directors, to cover potential losses in the loan portfolio[82]. - The provision for loan losses increased by $325 thousand, or 72.2%, reflecting a cautious approach to credit quality[168]. - The allowance for loan losses (ALL) to nonperforming loans ratio decreased from 293.40% in 2018 to 174.81% in 2019, indicating a reduction in coverage for nonperforming loans[207]. - The Company has implemented risk management strategies to mitigate exposure to the tourism industry, which is a significant segment of its loan portfolio[203]. Operational and Competitive Environment - The Company faces increased competitive pressures from tax-advantaged credit unions and other financial service providers in its market area[15]. - The Company competes for loans primarily through interest rates, loan fees, and the quality of services provided[26]. - The Company emphasizes personal service and local autonomy to compete with larger financial institutions[24]. - Competition in the banking industry may limit the company's ability to attract and retain customers, negatively affecting loan growth and overall financial performance[101]. - The company relies heavily on third-party vendors for key components of its infrastructure, which poses operational and information security risks[109]. Asset Quality and Nonperforming Loans - The Company reported a total of $3.502 million in nonperforming loans as of December 31, 2019, an increase of $1.546 million, or 79.0%, from the previous year[207]. - The nonperforming loans to total loans ratio increased from 0.30% in 2018 to 0.52% in 2019, reflecting a deterioration in asset quality[207]. - The total nonperforming assets, including nonaccrual loans and loans past due 90 days or more, amounted to $3.502 million as of December 31, 2019[207]. - The Company does not engage in interest-only loans or loans with teaser rates, maintaining a conservative lending approach[202]. Employment and Operations - As of December 31, 2019, Union employed 201 full-time equivalent employees[19]. - The Company operates 20 banking offices and two loan centers across northern Vermont and northern New Hampshire[17]. - As of December 31, 2019, the company operated 15 community banking locations and several ATMs in Vermont and New Hampshire[129]. - The Company has expanded its banking operations into New Hampshire, including the acquisition of three branches in May 2011 and the opening of a full-service branch in Lincoln in 2014[68].

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 ...