Document

November 6, 2025

I am pleased to present Union Bankshares Inc.’s financial results for the third quarter ended September 30, 2025. Our net interest margin continues to strengthen quarter over quarter, driven by the increase in higher-yielding assets and the runoff of lower-yielding ones. This, coupled with a focus on growing core deposits to replace wholesale funding, is helping our financial performance. We are fortunate to have a dedicated team of bankers executing our game plan and the trust of our growing customer base.

Consolidated net income reached $3.4 million for the third quarter and $8.3 million for the nine months ended September 30, 2025, compared to $1.3 million and $5.8 million for the same periods in 2024. Last year’s results were impacted by the strategic balance sheet repositioning which included the sale of $38.8 million in lower-yielding debt securities for a pre-tax realized loss of $1.3 million.

Total assets grew to $1.57 billion, up from $1.52 billion a year ago. Loan growth was a key driver, with loans increasing 5.1% to $1.18 billion. Investment securities rose 6.4% to $262.4 million, while federal funds sold and overnight deposits declined 28.6%, reflecting strategic liquidity management.

Asset quality remains strong. The allowance for credit losses on loans increased 14.0% over the comparison period, driven by loan growth and proactive risk management. Management continues to monitor macroeconomic indicators and adjust reserves as needed.

We originated and sold $46.0 million in qualifying residential loans to the secondary market this quarter, and $102.8 million year-to-date, compared to $35.2 million and $76.1 million for the same periods last year.

Total deposits were $1.19 billion, including purchased brokered deposits of $65.3 million. Federal Home Loan Bank advances totaled $270.8 million, up from $230.7 million last year.

Shareholders equity strengthened, with book value per share rising 6.1% to $16.95 and retained earnings increasing 5.3% to $95.1 million.

Net interest income was $11.2 million, up 18.3% from last year. Interest income increased 11.7% to $19.2 million, while interest expense rose 3.7% to $8.1 million. Noninterest income was $3.4 million, and noninterest expenses increased 9.9% to $10.3 million

As autumn transitions to winter in northern Vermont and New Hampshire, our region continues to benefit from robust tourism, with local businesses, inns, and restaurants seeing excellent traffic. While locals may consider this year’s foliage viewing average, it has done little to dampen the enthusiasm of visitors from near and far.

This coupled with a beautiful sunshine filled autumn has led to a banner Fall Foliage tourism season. The nearly constant sunny days from midsummer through fall have caused a localized drought worrying residents about their water wells and springs. This has also greatly impacted local agriculture, particularly those involved in the dairy industry. As always, we are dependent on weather in so many ways. Generally, despite some economic uncertainty, our region’s economy remains sound and our asset quality is evidence of this.

We are pleased to inform you that your Board of Directors declared a cash dividend of $0.36 per share, payable November 6, 2025, to shareholders of record as of October 25, 2025.

Thank you for your continued trust and support.

Sincerely,

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 Bethany Moore, 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 11717
866.321.8022 or
720.378.5956
E-mail: shareholder@broadridge.com

NASDAQ STOCK MARKET

Ticker Symbol: UNB
Corporate Name: Union Bankshares, Inc.
Corporate Address:
20 Lower Main Street
P.O. Box 667
Morrisville, VT 05661-0667
Investor Relations: UBLocal.com

Neil J. Van Dyke

Chair

David S. Silverman

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, 3 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)												Union Bankshares, Inc.

																			DIRECTORS		OFFICERS
																			Neil J. Van Dyke - Chair		Neil J. Van Dyke - Chair
ASSETS	SEPT 30, 2025			SEPT 30, 2024			SEPT 30, 2025			SEPT 30, 2024			SEPT 30, 2025			SEPT 30, 2024			Timothy W. Sargent - Vice Chair		David S. Silverman - President & CEO

																			Dawn D. Bugbee		Karyn J. Hale - Chief Financial Officer
								(3 months ended)						(9 months ended)
																			Mary K. Parent		Timothy W. Sargent - Secretary
Cash and Due from Banks		$	4,923		$	4,468	Interest Income	$	19,207		$	17,191		$	56,223		$	49,364
																			Nancy C. Putnam		Bethany Moore - Assistant Secretary

							Interest Expense	8,051			7,761			24,351			21,442		Gregory D. Sargent
Federal Funds Sold & Overnight Deposits		30,550			42,793														David S. Silverman
							Net Interest Income	11,156			9,430			31,872			27,922		Janet P. Spitler
Interest Bearing Deposits in Banks		8,457			13,445
							Credit Loss Expense	313			425			769			583
Investment Securities		262,371			246,658		Net Interest Income After Credit Loss Expense	10,843			9,005			31,103			27,339		Union Bank		REGIONAL ADVISORY BOARD MEMBERS
Loans Held for Sale		4,529			8,449
																			DIRECTORS
Loans, net		1,176,380			1,119,480		Wealth Management Income	297			265			868			793		Neil J. Van Dyke - Chair		Michael R. Barrett - St. Johnsbury
																			Timothy W. Sargent - Vice Chair		Steven J. Bourgeois - St. Albans
Allowance for Credit Losses		(8,397)			(7,366)		Net losses on Sales of Investment Securities	—			(1,293)			—			(1,293)		Dawn D. Bugbee		Andrew A. Dean - Northern NH
																			Mary K. Parent		Stanley T. Fillion - Northern NH
							Noninterest Income	3,053			2,633			7,681			7,437		Nancy C. Putnam		Rosemary H. Gingue - St. Johnsbury
Premises and Equipment, net		19,980			20,460														Gregory D. Sargent		John M. Goodrich - Northern NH
							Noninterest Expenses:												David S. Silverman		Christopher M. Knapp - Northern NH
Accrued Interest & Other Assets		75,124			71,107		Salaries & Wages	4,436			4,015			12,432			11,342		Janet P. Spitler		Coleen K. Kohaut - St. Albans
																					Justin P. Lavely - St. Johnsbury
Total Assets		$	1,573,917		$	1,519,494	Employee Benefits	1,406			1,522			4,958			4,642				Daniel J. Luneau - St. Albans
																					Samuel H. Ruggiano - St. Albans
							Occupancy Expense, net	537			505			1,736			1,618				Christine A. Sheley - Northern NH
																					David S. Silverman - All
LIABILITIES & SHAREHOLDERS' EQUITY	SEPT 30, 2025			SEPT 30, 2024			Equipment Expense	1,095			1,006			3,244			2,966
																			Union Bank Offices (ATMs at all Branch Locations)
							Other Expenses	2,869			2,361			8,284			7,845
Noninterest Bearing Deposits		$	227,202		$	233,770
							Total	10,343			9,409			30,654			28,413		VERMONT
Interest Bearing Deposits		651,261			643,593		Income Before Taxes	3,850			1,201			8,998			5,863
																			Berlin	1028 US Route 302		802.476.0061
Time Deposits		311,123			295,900		Income Tax Expense (Benefit)	414			(123)			666			103		Fairfax	Jct. Routes 104 & 128		802.849.2600
																			Hardwick	103 VT Route 15 West		802.472.8100
Borrowed Funds		270,841			240,696		Net income	$	3,436		$	1,324		$	8,332		$	5,760	Jeffersonville	5062 VT Route 15		802.644.6600
																			Jericho	368 VT Route 15		802.899.7500
Subordinated Notes		16,299			16,264		Earnings Per Share	$	0.75		$	0.29		$	1.83		$	1.27	Lyndonville	183 Depot Street		802.626.3100
																			Morrisville	20 Lower Main Street		802.888.6600
Accrued Interest & Other Liabilities		19,512			16,970		Book Value Per Share							$	16.95		$	15.98		65 Northgate Plaza		802.888.6860
																			Shelburne	5068 Shelburne Road		802.985.0227
Common Stock		10,110			9,999														St. Albans	15 Mapleville Depot		802.524.9000
																			St. Johnsbury	Operations and Loan Center
Additional Paid-in Capital		4,234			3,089															364 Railroad Street		802.748.3131
Retained Earnings																				Branch
		95,148			90,350															325 Portland Street		802.748.3121
Accumulated Other Comprehensive Loss		(27,530)			(26,831)														Stowe	47 Park Street		802.253.6600
																			Williston	Branch
																				31 Market St		802.878.7900
Treasury Stock at Cost		(4,283)			(4,306)															Loan Center
																				31 Market St		802.865.1000
Total Liabilities & Shareholders' Equity		$	1,573,917		$	1,519,494
Standby letters of credit were $1,635,000 and $1,509,000 at September 30, 2025 and 2024, respectively.																			NEW HAMPSHIRE
																			Groveton	3 State Street		603.636.1611
																			Littleton	263 Dells Road		603.444.7136
																				76 Main Street		603.444.5321
																			Lincoln	135 Main Street		603.745.4000
																			North Conway	120 North-South Road		603.356.4010