(UNB) Union Bankshares, Inc. Company Overview

What does Union Bankshares, Inc. do?

Union Bankshares, Inc. is a Vermont bank holding company whose sole operating subsidiary is Union Bank. It serves northern Vermont and northern New Hampshire through community banking, mortgages, commercial finance, municipal lending, and wealth services. The company’s investor-relations overview reported 18 branches, three loan centers, about $1.6 billion of assets, $1.2 billion of net loans, and $1.2 billion of deposits at March 31, 2026.

One bank, one reporting segment, two-state community footprint

Union reports one segment because one balance sheet, branch network, risk system, and management team support all products. This simplifies analysis but concentrates results in one regional economy. The 2025 Form 10-K describes retail, commercial, municipal, and wealth services as one community-banking model.

Who are its core customers and products?

Households use deposits, home-equity products, and residential mortgages. Businesses use working-capital lines, equipment loans, commercial mortgages, and construction credit through commercial financing. Municipalities borrow and place collateralized deposits. Customers can also use mortgage origination and wealth management.

How does Union Bankshares make money?

Union gathers deposits and borrowings, invests in loans and securities, and earns the spread between asset yields and funding costs. Fees from deposits, mortgages, servicing, and wealth management diversify revenue, but net interest income remains dominant.

Net interest income is the core engine

In FY2025, interest and dividend income was $75.788 million and interest expense was $32.768 million, producing $43.020 million of net interest income. Net interest margin improved to 2.93% from 2.77% in FY2024. Because that spread applies across a balance sheet above $1.5 billion, small pricing changes can materially affect earnings.

Mortgage sales and service income add fee diversity

Noninterest income was $11.462 million in FY2025: service fees contributed $6.939 million, wealth management $1.187 million, and mortgage-sale gains $2.148 million. Union sold $143.5 million of mortgages, versus $113.5 million in FY2024, and serviced about $1.21 billion of residential mortgages, including $734.8 million for unaffiliated third parties. This creates fees without retaining every loan.

Which loan and funding mix drives Union’s economics?

At December 31, 2025, loans held for investment and sale totaled $1.179 billion. Real-estate-secured credits were about $1.03 billion, or 87.2%. That concentration fits a community bank serving homeowners, builders, municipalities, and local businesses, but increases sensitivity to collateral values and regional employment.

Residential mortgages are largest, while commercial real estate adds risk density

Residential mortgages were 40.3% of loans and commercial real estate plus multifamily was 37.7%; construction added 8.9%. The portfolio combines many household loans with fewer, larger commercial relationships, so one troubled commercial exposure can move risk ratios sharply.

Deposits remain primary funding, but wholesale borrowing is material

Average deposits were $1.187 billion in FY2025. Noninterest-bearing balances were 18.6%, time deposits were 24.4% at an average 3.92% rate, and total average deposit cost was 1.80%. Reciprocal deposits totaled $270.5 million. Uninsured deposits were $437.6 million, or 36.0%, including $22.0 million of collateralized municipal deposits.

What do Union Bankshares’ latest Q2 2026 results show?

Union’s freshest official data is the unaudited quarter and six months ended June 30, 2026, in a July 15, 2026 Form 8-K exhibit. Earnings and book value improved, while wholesale funding and costs remained important.

Earnings improved faster than the balance sheet

Quarterly interest income rose 7.1% to $20.057 million, while interest expense increased 2.0% to $8.437 million, lifting net interest income 11.2%. Noninterest income rose 17.5% to $3.243 million, helped by a $380,000 property-sale gain and $490,000 of mortgage-sale gains. These improvements outweighed a 9.3% increase in noninterest expense to $11.463 million.

Equity strengthened, but funding shifted

At June 30, 2026, assets were $1.559 billion, up 5.3% year over year, and securities rose 27.0% to $307.982 million. Deposits slipped to $1.094 billion from $1.103 billion, while borrowed funds reached $337.075 million, including $316.1 million of FHLB advances and $21.0 million from the Federal Reserve.

Equity rose to about $90.4 million from $71.3 million. Union sold 384,066 shares through June 30 for $8.6 million of net proceeds. The issuance strengthens capital but makes per-share earnings and book value essential.

What turning points shaped Union Bankshares’ current franchise?

Union expanded through measured geographic steps rather than repeated large acquisitions. Each milestone added a market or capability while preserving local management, leaving a franchise broader than a single-town bank but still dependent on community reputation and credit judgment.

1. 1891
   Union Bank was chartered in Vermont, creating the operating history behind local trust.
2. 1982
   Union Bankshares became the holding company, adding a public-company capital structure.
3. 2006
   The Littleton, New Hampshire loan office became a full branch, advancing the two-state footprint.
4. 2011
   Union acquired three New Hampshire branches, adding deposits, customers, and operating scale without changing the community-bank identity.
5. 2015
   The bank began participating in the Mortgage Partnership Finance program. By year-end 2025, it had sold $68.7 million through the program, with $35.5 million outstanding and no reported losses.
6. 2023
   A North Conway, New Hampshire branch opened, extending access in a tourism- and real-estate-influenced market.
7. 2026
   Jeffrey F. Weidley succeeded David Silverman as chief executive officer, while Silverman became board chair, creating both a leadership transition and continuity mechanism.

Expansion added scale without eliminating geographic concentration

New Hampshire expansion diversified deposits and opened mortgage and commercial markets, but Union remains tied to northern New England. Tourism, second homes, small businesses, municipal budgets, housing, and weather can affect several product lines at once. Local density improves relationships; it does not provide multistate diversification.

What gives Union a competitive advantage, and who pressures it?

Union’s advantage is local decision-making, long relationships, mortgage servicing, municipal familiarity, and bundled deposits, credit, and wealth services. These capabilities take time to reproduce because they depend on trust and borrower knowledge. Yet digital banks can compete on rates, credit unions on pricing, and larger banks on technology and compliance scale.

Local underwriting and niche programs create differentiation

Union reported an “Outstanding” Community Reinvestment Act rating and highlighted USDA recognition and SBA Preferred Lender status in Q2 2026. Such credentials support distribution because many community borrowers value responsiveness and program expertise alongside price.

Competition is broad, rate-sensitive, and increasingly digital

The 10-K identifies regional banks, savings banks, tax-exempt credit unions, mortgage brokers, internet banks, and national firms as competitors. Union competes for deposits, loans, payments, talent, and wealth relationships. Pressure intensifies when customers can compare online deposit rates or mortgage pricing instantly.

How strong are Union’s capital, liquidity, and credit quality?

Bank earnings can improve while capital, liquidity, or credit weakens. Union’s FY2025 filings show well-capitalized regulatory ratios and multiple liquidity sources, but also a sharp rise in nonaccrual loans. The bank had buffers, yet one commercial relationship materially changed its risk profile.

Regulatory capital and contingent liquidity provide buffers

At December 31, 2025, Tier 1 risk-based capital was 11.87%, total risk-based capital 12.81%, and leverage capital 7.36%, qualifying the bank as well capitalized. Union also had $48.3 million of unused FHLB capacity and a $15.0 million correspondent line. These sources help liquidity but can be costlier and collateral-dependent.

One commercial relationship changed the credit picture

Nonaccrual loans rose to $13.562 million at December 31, 2025 from $1.652 million, mainly because one commercial real-estate relationship moved to nonaccrual. Nonperforming assets were $13.803 million, or 0.85% of assets; the allowance was $8.407 million and net charge-offs only $28,000. Resolution value therefore matters more than the low current charge-off rate.

Who owns Union Bankshares, and how is it governed?

Union has one-vote common stock but a relatively concentrated owner base. The 2026 proxy reported 4,614,050 shares outstanding on March 27, 2026. Several individuals held meaningful stakes, and a May 2026 Schedule 13D disclosed another concentrated holder.

Ownership concentration can influence voting and capital allocation

Leadership succession preserves continuity while changing accountability

A February 2026 Form 8-K said Jeffrey F. Weidley would become CEO after David Silverman’s July 3 retirement. A May 2026 filing reported Silverman as board chair and Timothy W. Sargent as lead independent director, combining continuity with independent oversight.

Union also promoted Carrie Locklin to chief financial officer and confirmed Karyn Hale as chief operating officer in July 2026. Senior officers directly influence deposit pricing, credit, securities, branches, and regulatory execution.

What opportunities and risks should researchers monitor?

Union can improve returns through wider spreads, disciplined lending, mortgage activity, wealth relationships, and efficiency. Key risks are concentrated credits, deposit repricing, securities duration, wholesale funding, cyber threats, regulation, and narrow geography.

Growth opportunities come from margin repair, mortgages, and relationship expansion

The most material risks connect directly to financial-statement lines

Commercial real-estate weakness can raise provisions and charge-offs. Deposit competition can increase interest expense faster than asset yields. Securities marks can reduce tangible equity. Cyber incidents can create losses and remediation costs, while regulation imposes fixed expenses that are harder for a $1.6 billion bank to absorb.

What is the key takeaway for Union Bankshares valuation?

Union’s valuation depends on net interest margin, deposit durability, credit losses, efficiency, capital, securities marks, dividends, and dilution. Enterprise free cash flow is a poor fit because deposits and borrowings are operating inputs and capital rules constrain distributions. A bank DCF should estimate earnings distributable to common shareholders after required capital for growth and risk.

Which variables should a DCF or comparable-company model emphasize?

Comparable analysis should emphasize tangible book, normalized earnings, returns, margin, efficiency, asset quality, reserves, and capital. Union may merit a premium when deposits, credit, and per-share book growth outperform, or a discount when wholesale funding and problem loans dominate. Q2 2026 improved, but borrowing reliance and expense growth remain counterweights.