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| 8-K - BODY OF FORM 8-K - UNION BANKSHARES INC | form8-k1stqtr2020shrpt.htm |
Exhibit 99.1
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May 7, 2020 | |||||||||
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For this quarter's letter we are dispensing with a summary of our first quarter financial performance preferring to outline our responses to the Coronavirus pandemic. A copy of our earnings release for the first quarter is enclosed. As Union Bank is essentially the company's sole operating entity, the following describes the actions of the bank in response to the current health crisis. As we began the first quarter we were unaware of the looming Novel Coronavirus, and the resulting COVID-19 disease. We had come off of a good year of financial performance with solid asset quality metrics. Our expectations for 2020 were positive, though we knew the low interest rate environment and carrying two relatively new branches not yet at breakeven would make it challenging to repeat our record results from 2019. News reached the United States of the COVID-19 problem in Wuhan, China in late January, and on January 31, the President restricted travel to and from China. From there the health care crisis in the United States grew with ferocity and velocity not seen in recent memory. As a result of growing evidence of the spreading health crisis, Union Bank implemented it's Pandemic and Business Continuity Plans to address the risks associated with the global COVID-19 pandemic. Since enacting the Pandemic and Business Continuity Plans, the Company has taken a series of actions to safeguard our employees and customers while continuing to provide banking services to our communities. We developed and executed a plan to decentralize employees, including working remotely, to isolate certain personnel essential to critical business operations, canceled business travel and outside vendor appointments, limited inter-branch visits, and increased the use of video conferencing to avoid large gatherings. Also, social distancing and enhanced hygiene practices were put into place as well as rigorous cleaning of all bank facilities. Throughout these changes, employees and customers have been kept informed with regular communications. On March 17, 2020 branch lobby service was limited to appointment-only, and new capabilities were implemented to execute lobby transactions electronically or via our drive-up facilities. On March 25, 2020, a "Stay-at-Place" order was issued in the State of Vermont resulting in branch lobbies being closed to all customers. Three locations remain closed to customers due to lack of drive-up facilities or staffing challenges. Relying on regulatory guidance, bank personnel have been proactively contacting our business customers in impacted industries to discuss alternative payment arrangements including payment deferments and payment forbearance agreements. Regulatory guidance allows us to “freeze in place” payment histories in a manner that allows borrowers, who had been current on loan payments prior to the COVID 19 pandemic, to receive payment deferments without being considered past due. We have offered payment deferments, as appropriate, to alleviate cash flow concerns of businesses negatively impacted by the pandemic. In addition, we have applied the same principal to our consumer customers following our long-standing policy of working with our borrowers to keep them in their homes. | In addition, Union Bank has fully participated in the Small Business Administration's Paycheck Protection Program. This program is designed to quickly put funds in the hands of small businesses to allow them to continue to pay employees despite a reduction in their operating revenue. We have received hundreds of applications in the program from our customers and been able to get over 400 approved at this writing, totaling approximately $55 million. We are now in the process of closing these loans and getting monies on the street and in our local economy. We anticipate the second round of funding and working with more business borrowers to facilitate access to this program. Over days and weeks, we have had to adapt to a new operating reality, while continuing to serve our customers and communities with high quality service combined with kindness and compassion. We have moved to a drive-up-only service model, moved sixty of our work force to work from home using a secure bank managed network, dispersed others throughout our facilities to promote social distancing, and continue to provide new residential and commercial loans at double our normal rate. In addition, our staff has had to field much higher call volumes, agreed to take on additional and or different tasks, at the same time they have been dealing with personal stress of having schools and daycares closed. During all of this our operations have run smoothly, and we have served our customers and communities admirably. We could not be prouder of the way our teammates have stepped up and handled their respective tasks with grace. You will note in the accompanying press release that we increased our loan loss provision compared to the first quarter of 2019. At this point it is hard to assess how the economic difficulties caused by the health crisis will impact loan asset quality and resulting credit losses. We expect incurred losses to be higher than the past several years, but are not sure of the magnitude. It is our current expectation that we will remain sufficiently profitable to continue to pay the dividend at the current rate, but capital management is an important aspect of operating a sound banking operation over the long term. We cannot rule out altering our dividend payout if conditions warrant. By now you should have received your proxy and notice of our Annual Meeting to be held virtually on May 22, 2020 at 3:00 pm. We will miss seeing our friends this year and will evaluate having an information session this Fall as government orders and common sense allow. In conclusion, the Board of Directors of Union Bankshares, Inc. declared a cash dividend of $0.32 per share for the quarter payable May 7, 2020 to shareholders of record as of April 27, 2020. We ask you to stay safe and wish you good health for your family and friends. 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 Kristy Adams Alfieri, 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 | |||||||||
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, two 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 127 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. | |||||||||
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Neil J. Van Dyke Chair | David S. Silverman President & Chief Executive Officer | ||||||||
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 | MAR 31, 2020 | MAR 31, 2019 | MAR 31, 2020 | MAR 31, 2019 | Timothy W. Sargent-Vice Chair | David S. Silverman - President & CEO | ||||||||||||||||||
Joel S. Bourassa | Jeffrey G. Coslett- Vice President | |||||||||||||||||||||||
(3 months ended) | ||||||||||||||||||||||||
Steven J. Bourgeois | Karyn J. Hale - Chief Financial Officer | |||||||||||||||||||||||
Cash and Due from Banks | $ | 6,224 | $ | 3,706 | Interest Income | $ | 8,839 | $ | 8,654 | |||||||||||||||
Dawn D. Bugbee | John H. Steel - Secretary | |||||||||||||||||||||||
John M. Goodrich | Kristy Adams Alfieri - Assistant Secretary | |||||||||||||||||||||||
Federal Funds Sold & Overnight Deposits | 35,488 | 22,886 | Interest Expense | 1,455 | 1,230 | Nancy C. Putnam | ||||||||||||||||||
Net Interest Income | 7,384 | 7,424 | David S. Silverman | |||||||||||||||||||||
Interest Bearing Deposits in Banks | 6,067 | 8,553 | John H. Steel | |||||||||||||||||||||
Provision for Loan Losses | 300 | 50 | Schuyler W. Sweet | |||||||||||||||||||||
Investment Securities | 90,028 | 80,135 | Net Interest Income After Provision for Loan Losses | 7,084 | 7,374 | Union Bank | REGIONAL ADVISORY BOARD MEMBERS | |||||||||||||||||
Loans Held for Sale | 16,456 | 5,647 | ||||||||||||||||||||||
Trust Income | 173 | 168 | DIRECTORS | |||||||||||||||||||||
Loans, net | 677,587 | 650,769 | Noninterest Income | 2,469 | 2,002 | Neil J. Van Dyke -Chair | Michael R. Barrett - St. Johnsbury | |||||||||||||||||
Timothy W. Sargent -Vice Chair | Steven J. Bourgeois - St. Albans | |||||||||||||||||||||||
Reserve for Loan Losses | (6,391 | ) | (5,572 | ) | Noninterest Expenses: | Joel S. Bourassa | Stanley T. Fillion - Northern NH | |||||||||||||||||
Salaries & Wages | 3,121 | 2,798 | Steven J. Bourgeois | Rosemary H. Gingue - St. Johnsbury | ||||||||||||||||||||
Premises and Equipment, net | 20,528 | 18,767 | Dawn D. Bugbee | John M. Goodrich - St. Johnsbury | ||||||||||||||||||||
Employee Benefits | 984 | 996 | John M. Goodrich | Christopher M. Knapp - Northern NH | ||||||||||||||||||||
Accrued Interest & other Assets | 37,100 | 28,441 | Nancy C. Putnam | Coleen K. Kohaut - St. Albans | ||||||||||||||||||||
David S. Silverman | Justin P. Lavely - St. Johnsbury | |||||||||||||||||||||||
Total Assets | $ | 883,087 | $ | 813,332 | Occupancy Expense, net | 514 | 438 | John H. Steel | Daniel J. Luneau - St. Albans | |||||||||||||||
Schuyler W. Sweet | Mary K. Parent - St. Johnsbury | |||||||||||||||||||||||
Equipment Expense | 740 | 565 | Samuel H. Ruggiano - St. Albans | |||||||||||||||||||||
David S. Silverman - All | ||||||||||||||||||||||||
Schuyler W. Sweet - Northern NH | ||||||||||||||||||||||||
Other Expenses | 1,815 | 1,727 | ||||||||||||||||||||||
Union Bank Offices (ATMs at all Branch Locations) | ||||||||||||||||||||||||
LIABILITIES & SHAREHOLDERS' EQUITY | MAR 31, 2020 | MAR 31, 2019 | Total | 7,174 | 6,524 | |||||||||||||||||||
Income Before Taxes | 2,552 | 3,020 | VERMONT | |||||||||||||||||||||
Noninterest Bearing Deposits | $ | 139,963 | $ | 127,838 | ||||||||||||||||||||
Berlin | 1028 US Route 302 | 802.476.0061 | ||||||||||||||||||||||
Interest Bearing Deposits | 449,943 | 425,897 | Income Tax Expense | 356 | 399 | Fairfax | Jct. Routes 104 & 128 | 802.849.2600 | ||||||||||||||||
Hardwick | 103 VT Route 15 West | 802.472.8100 | ||||||||||||||||||||||
Time Deposits | 146,154 | 146,638 | Net income | $ | 2,196 | $ | 2,621 | Jeffersonville | 5062 VT Route 15 | 802.644.6600 | ||||||||||||||
Jericho | 368 VT Route 15 | 802.899.7500 | ||||||||||||||||||||||
Borrowed Funds | 62,164 | 37,784 | Earnings per share | $ | 0.49 | $ | 0.59 | Johnson | 198 Lower Main Street | 802.635.6600 | ||||||||||||||
Lyndonville | 183 Depot Street | 802.626.3100 | ||||||||||||||||||||||
Accrued Interest & Other Liabilities | 11,075 | 8,444 | Book Value Per Share | $ | 16.50 | $ | 14.94 | Morrisville | 20 Lower Main Street | 802.888.6600 | ||||||||||||||
65 Northgate Plaza | 802.888.6860 | |||||||||||||||||||||||
Common Stock | 9,899 | 9,890 | St. Albans | 15 Mapleville Depot | 802.524.9000 | |||||||||||||||||||
St. Johnsbury | 364 Railroad Street | 802.748.3131 | ||||||||||||||||||||||
Additional Paid-in Capital | 1,226 | 967 | 325 Portland Street | 802.748.3121 | ||||||||||||||||||||
Retained Earnings | Stowe | 47 Park Street | 802.253.6600 | |||||||||||||||||||||
64,783 | 60,147 | Williston | Branch | |||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | 2,061 | (83 | ) | 31 Market St | 802.878.7900 | |||||||||||||||||||
 | Loan Center | |||||||||||||||||||||||
31 Market St | 802.865.1000 | |||||||||||||||||||||||
Treasury Stock at Cost | (4,181 | ) | (4,190 | ) | ||||||||||||||||||||
Total Liabilities & Shareholders' Equity | $ | 883,087 | $ | 813,332 | NEW HAMPSHIRE | |||||||||||||||||||
Standby letters of credit were $2,306,000 and $2,065,000 at March 31, 2020 and 2019, respectively. | 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 | Commercial Loan Center | |||||||||||||||||||||||
2541 White Mountain Hwy | 603.662.9408 | |||||||||||||||||||||||