Edgar Filing: UNION BANKSHARES INC

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

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	Union Bankshares, Inc.

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	APRIL 10, 2017
			AT OR FOR THE YEARS ENDED DECEMBER 31
				2016			2015			2014			2013
			Balance Sheet Data				(Dollars in thousands, except per share data)
We are pleased to invite you to our 126th Annual meeting to be held at 116 Vermont Route 15 West, Morrisville Vermont in the Charlmont Restaurant meeting room on May 17, 2017 at 3:00pm. We hope you will join us for the meeting as well as a reception immediately following. We always enjoy meeting with our long time shareholders as well as meeting newer ones. Included with this “year in review” are the Proxy for the annual meeting as well as our Annual Report on Form 10-K for the year ended 2016. The Proxy and 10-K provide detailed financial information about your Company. For those so inclined we direct your attention to the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the 10-K. Though pretty dense, this section really outlines our financial story and provides context to the absolute numbers we present. For those who may not dig deeply into our 10-K, allow us to provide a summary of our 2016 financial results: • Net income for 2016 was $8.5 million, or $1.91 per share, an 8% improvement over 2015. • Net interest income increased $1.7 million, or 7.2% to $24.8 million. • Return on average common equity of 15.25%. • Return on average assets of 1.30%. • Book value per common share increased 4.9% to $12.61 as of December 31, 2016. • Total shareholders’ equity increased 5.1% to $56.3 million compared to December 31, 2015. • The loan servicing portfolio increased $29.6 million to $452.0 million. • Net loan charge-offs were $104 thousand, or 0.02% of average loans, for the year ended December 31, 2016. • Nonperforming loans were 0.81% of total loans. Overall, the directors and management are pleased with our 2016 financial performance. Our challenge is to continue these positive trends over the next year. It appears that the Federal Reserve is committed to finally tightening monetary policy and has increased the Federal Funds rate in December and March, with more increases to come	throughout 2017. Hopefully “The Fed” is acting timely to prevent high inflation without damping an economy still in recovery mode. Our balance sheet position is “asset sensitive” meaning it is structured to do well in a rising rate environment. Although, much is being said about rolling back regulations on financial firms, we do not hold much hope that this will materially decrease the cost of compliance for your Company. Despite this, we view compliance with regulations as a core competency and will respond to regulatory changes as efficiently as possible. 2016 was the 125th anniversary of our founding. We held a community celebration at Oxbow Park in Morrisville on July 17th . We brought Rick and the Ramblers to the park with their brand of Western Swing, as well as excellent rock band The Eames Brothers to entertain the crowd. Local vendors provided food and refreshments, face painting, balloon art and all sorts of games for entertaining young and old. We had a great turnout from employee volunteers and community members. All told, it was a fitting way to celebrate our founding. We would like to remind you of two shareholder services you may want to take advantage of. The first is our relatively new Dividend Reinvestment Program. With this program you may elect to have some or all of your dividends reinvested to buy additional shares of Union Bankshares, Inc. You may also elect to buy additional shares through this program, avoiding brokerage fees. Also, you have the option of setting up a direct deposit of your dividend, avoiding having to wait for a check to arrive in the mail. Please contact Kristy Adam-Alfieri at 802-888-0982 or KAdamsAlfieri@unionbankvt.com if you would like additional information regarding these services, including a prospectus describing our Dividend Reinvestment Program.		Total assets		$691,381			$628,879			$624,063			$585,443
			Investment securities	66,555			59,327			52,964			45,492
			Loans and loans held for sale	541,093			506,141			490,721			464,953
			Allowance for loan losses	(5,247		)	(5,201		)	(4,694		)	(4,647		)
			Deposits	597,660			560,408			552,064			518,354
			Borrowed funds	31,595			9,564			15,118			13,216
			Stockholders' equity¹	56,279			53,568			51,434			49,820

			Income Statement Data
			Total interest and dividend income		$26,836			$25,144			$24,852			$24,481
			Total interest expense	(2,061		)	(2,025		)	(2,155		)	(2,459		)
			Net interest and dividend income	24,775			23,119			22,697			22,022
			Provision for loan losses	(150		)	(550		)	(345		)	(305		)
			Noninterest income	10,140			9,792			8,909			8,509
			Noninterest expenses	(24,221		)	(22,304		)	(21,594		)	(21,229		)
			Income before provision for income taxes	10,544			10,057			9,667			8,997
			Provision for income taxes	(2,033		)	(2,179		)	(1,973		)	(1,862		)
			Net income		$8,511			$7,878			$7,694			$7,135

			Per Common Share Data
			Net income²		$1.91			$1.77			$1.73			$1.60
			Cash dividends paid	1.11			1.08			1.04			1.01
			Book value¹	12.61			12.02			11.54			11.17

			Weighted average number of shares outstanding	4,459,001			4,458,037			4,458,393			4,457,261
	Sincerely,		Number of shares outstanding	4,462,135			4,457,177			4,458,430			4,458,359

			¹Stockholders' equity includes unrealized gains or losses, net of applicable income taxes, on investment securities classified as "available-for-sale" and includes the unfunded liability for pension benefits, net of taxes for the defined benefit pension plan.

	Kenneth D. Gibbons	David S. Silverman	²Computed using the weighted average number of shares outstanding for the period.
	Chairman	President & CEO



2016 Year In Review	1	2	2016 Year In Review






Market for Union Bankshares Common Stock							Stock Performance Graph
	On March 7, 2017, there were 4,462,019 shares of common stock outstanding held by 539 stockholders of record. The number of stockholders does not reflect the number of beneficial owners, including persons or entities who may hold the stock in nominee or “street name.” Union Bankshares’			common stock is listed on the NASDAQ Global Market trading under the symbol UNB. For shareholder assistance please contact Kristy Adams Alfieri at 802.888.0982 or our Transfer Agent, Broadridge Corporate Issuer Solutions, Inc., at 866.321.8022.			The following graph illustrates the annual percentage change in the cumulative total shareholder return of the Company’s common stock for the period of December 31, 2011 through December 31, 2016. For purposes of comparison, the graph illustrates comparable shareholder returns of	the SNL Bank $500M-$1B Index and the NASDAQ Composite Index. The graph assumes a $100 investment on December 31, 2011 in each case and measures the amount by which the market value, assuming reinvestment of dividends, has changed during the five year period ended December 31, 2016.

	UNION BANKSHARES COMMON STOCK						TOTAL RETURN PERFORMANCE


	2016			2015
	HIGH	LOW	DIVIDENDS	HIGH	LOW	DIVIDENDS
	First Quarter			First Quarter
	$29.10	$27.06	$0.27	$26.68	$23.75	$0.27
	Second Quarter			Second Quarter
	$37.18	$28.26	$0.28	$28.06	$25.16	$0.27
	Third Quarter			Third Quarter
	$36.92	$33.69	$0.28	$27.07	$25.50	$0.27
	Fourth Quarter			Fourth Quarter
	$48.80	$32.75	$0.28	$28.05	$26.06	$0.27



2016 Year In Review	3	4	2016 Year In Review




	125th Anniversary 1891-2016
	125th Anniversary 1891-2016	and municipal deposit originations and outstanding asset quality, the Commercial Lending Team continued to help drive the Bank’s financial results. With good asset quality, and strong capital and liquidity, we look forward to continuing to meet the needs of our customers and communities that we serve.	DIRECTORS	OFFICERS
	2016 marked a major		Kenneth D. Gibbons - Chairman	Kristy Adams Alfieri - Administrative Officer
	milestone for Union Bank:		Neil J. Van Dyke - Vice Chairman	Diana M. Ashley - Assistant Vice President
our 125th anniversary. Much has changed since July 27, 1891—when Union Savings Bank and Trust Company opened for business with $50 thousand in capital, one branch, and a few employees. For instance, the bank now has over $56 million in capital, 17 branch locations, 3 loan production offices and 200 employees. Still, at its core, the business of community banking remains the same: keeping deposits safe, giving customers convenient financial choices and making loans to help people in our local communities buy homes, grow businesses and create jobs.			Steven J. Bourgeois	Stacey M. Belanger - Asset Management Officer
			Dawn D. Bugbee	Rhonda L. Bennett - Vice President
			John M. Goodrich	Karen L. Blanchard Smith - Assistant Vice President
			Timothy W. Sargent	Sherrie A. Bull - Vice President
			David S. Silverman	Karen R. Carlson - Vice President
		Mortgage Lending	John H. Steel	Stacey L.B. Chase - Assistant Vice President
		Mortgage Lending	Schuyler W. Sweet	Barbara J. Churchill - Assistant Vice President
		2016 was another outstanding year for mortgage loan originations. In fact we had record performance in the ongoing revenue earned from servicing mortgage loans and in the volume of construction and mortgage loans originated. Repeat customers, client referrals, strong relationships with builders and realtors, attractive products and outstanding customer service helped drive this successful performance. The positive impact that Union Bank has made in the lives of first time home buyers has been consistently recognized by the US Department of Agriculture as its Rural Development (RD) Home Loan Lender of the Year for Vermont. In addition, Union Bank is consistently one of the top Vermont Housing Finance Agency (VHFA) mortgage originators.	OFFICERS	Everett C. Comstock - Collections Officer
			OFFICERS	Jeffrey G. Coslett - Senior Vice President
			Kenneth D. Gibbons - Chairman	Michael C. Curtis - Vice President
			David S. Silverman - President & CEO	Jennifer M. Degree - Assistant Vice President
			Karyn J. Hale - Chief Financial Officer	Ronald C. Dion - Assistant Vice President
			John H. Steel - Secretary	Jessica M. Eastman - Vice President
Stay Local. Go Far.			Kristy Adams Alfieri - Assistant Secretary	Charles W. Goldstein - Assistant Vice President
Stay Local. Go Far.			Jeffrey G. Coslett - Vice President	Don D. Goodhue - Vice President
In celebration of our anniversary and to highlight our Stay Local. Go Far. branding message Union Bank conducted a contest to pit our Customer Care Team against the Call Centers of other banks. On location in our communities, we selected pairs of random people and asked one to call Union Bank and the other to call another local bank. Neither our staff nor the staff of the other bank knew that this was happening. With an average answering time of eight seconds, our Customer Care Team won each competition and reinforced the reality that in an era of impersonal mega- banks, Union Bank offers a more effective and less frustrating way to meet your banking needs. You can see the results for yourself on our YouTube Channel. Stay Local Go Far.				Jonathan J. Gould - Senior Vice President
				Melissa A. Greene - Vice President
				Paul E. Grogan - Facilities Officer
				Karyn J. Hale - Senior Vice President & CFO
				Randy L. Hannett - Information Technology Officer
				Claire A. Hindes - Vice President
			DIRECTORS	Robert D. Hofmann - Senior Vice President
			DIRECTORS	Patricia N. Hogan - Senior Vice President
			Kenneth D. Gibbons - Chairman	Lura L. Jacques - Vice President
			Neil J. Van Dyke - Vice Chairman	Lynne P. Jewett - Vice President
		Deposit Accounts	Steven J. Bourgeois	Therese H. Johansson - Vice President
		Deposit Accounts	Dawn D. Bugbee	Stephen H. Kendall - Senior Vice President
		Union Bank offers a range of deposit options to serve our biggest and smallest customers. In collaboration with other banks, we enable businesses, municipalities, non-profits and individuals to conveniently access multi-million-dollar FDIC insurance coverage for CD’s and Money Market Sweep accounts. Our school-based Save for Success Program helps student depositors develop sound financial habits at a young age. For those customers who bring larger deposit balances to the bank, we offer Advantage Banking. This package of services rewards and help retain these important depositors who contribute substantially to our ability to fund our extensive community lending activities. For more information, please contact our Customer Care Team at 1.800.753.4343.	John M. Goodrich	Susan F. Lassiter - Vice President
			Nancy C. Putnam	Edward L. Levite - Senior Loan Originator
			Timothy W. Sargent	Carrie R. Locklin - Vice President
			David S. Silverman	Adam A. Lory - Assistant Vice President
			John H. Steel	John L. Malm - Vice President
Commercial and Municipal Services			Schuyler W. Sweet	Grace E. Maniatty - Assistant Vice President
			REGIONAL ADVISORY BOARD MEMBERS	Debra J. Marcoux - Loan Servicing Officer
				Jessica L. Miller - Loan Servicing Officer
We continued to grow our commercial real estate, commercial, and municipal loan portfolios organically. Total growth in these portfolios for 2016 was $34 million or 11.8%. We have an experienced Commercial Lending Team and we were recognized last year by the US Small Business Administration (SBA) for increasing our small business loan originations. Combined with new business				Melynda J. Miller - Mortgage Loan Officer
			Michael R. Barrett - St. Johnsbury	Shane D. Mispel - Assistant Vice President
			Joel S. Bourassa - Northern New Hampshire	Samantha A. Norrie - Assistant Vice President
			Steven J. Bourgeois - St. Albans	Tina L. Norton - Assistant Vice President
			Stanley T. Fillion - Northern New Hampshire	Bradley S. Prior - Assistant Vice President
			Rosemary H. Gingue - St. Johnsbury	Craig S. Provost - Vice President
			John M. Goodrich - St. Johnsbury	Timothy M. Ross - Vice President
			Richard L. Isabelle - St. Johnsbury	Christine A. Sheley - Regional Vice President
			Christopher M. Knapp - Northern New Hampshire	David S. Silverman - President & CEO
			Coleen K. Kohaut - St. Albans	Abbie L. Small - Assistant Vice President
			Justin P. Lavely - St. Johnsbury	Judy R. Smith - Vice President
			Daniel J. Luneau - St. Albans	Curtis C. Swan - Vice President
			Mary K. Parent - St. Johnsbury	Carrie W. Tallman - Retail Loan Processing Supervisor
			Samuel H. Ruggiano - St. Albans	Linda M. Watson - Retail Credit Administrative Officer
			David S. Silverman - All	Melyssa S. Whitcomb - Assistant Vice President
			Schuyler W. Sweet - Northern New Hampshire	Suzanne M. Whitney - Marketing Officer
				Lorraine MG Willett - Vice President



2016 Year In Review	5	6	2016 Year In Review







VERMONT

Barre	Loan Center
	14 North Main Street	802.476.0062
Danville	421 Route 2 East	802-684-2211
Fairfax	Jct. Routes 104 & 128	802-849-2600
Hardwick	103 VT Route 15 West	802-472-8100
Jeffersonville	5062 VT Route15	802-644-6600
Johnson	198 Lower Main Street	802-635-6600
Lyndonville	183 Depot Street	802-626-3100
Newport	Loan Center
	325 East Main Street	802-334-0750
Morrisville	20 Lower Main Street	802-888-6600
	65 Northgate Plaza	802-888-6860
St. Albans	15 Mapleville Depot	802-524-9000
St. Johnsbury	364 Railroad Street	802-748-3131
	325 Portland Street	802-748-3121
S. Burlington	Loan Center
	30 Kimball Avenue	802-865-1000
Stowe	47 Park Street	802-253-6600

NEW HAMPSHIRE
Groveton	3 State Street	603-636-1611
Lincoln	135 Main Street	603-745-4000
Littleton	263 Dells Road	603-444-7136
	76 Main Street	603-444-5321
N. Woodstock	155 Main Street	603-745-2488

UBLOCAL.com
1-800-753-4343 (toll free)