We are pleased to report our financial results for the second quarter and the first six months of 2022. Consolidated net income for the three months ended June 30, 2022, was $2.9 million, or $0.65 per share, compared to $3.0 million, or $0.67 cents per share, for the same period in 2021, and $5.4 million, or $1.20 per share, for the six months ended June 30, 2022, compared to $5.9 million, or $1.31 per share for the same period in 2021. Total assets were $1.2 billion as of June 30, 2022, compared to $1.1 billion as of June 30, 2021, an increase of $125.8 million, or 11.8%.

Key variances between the first six months of 2022 compared to the same period in 2021 were lower net gains on loan sales, lower SBA PPP fees, improved interest income,and lower interest expense and provision for loan losses. Net gains on loan sales decreased from $2.0 million in 2021 to $300 thousand in 2022. PPP loan fees decreased from $1.4 million in the first half of 2021 compared to $428 thousand for the same period of 2022. These were partially offset by an increase in interest income of $263 thousand and decreases of $584 thousand in interest expense and $225 thousand in the provision for loan losses. We expect the positive variance in interest income to persist and improve throughout the balance of the year.

Total loans outstanding as of June 30, 2022, were $823.0 million compared to $783.0 million as of June 30, 2021, an increase of $39.9 million, or 5.1%, net of $54 million of PPP loans that were forgiven by the SBA. This means we have been able to replace the $54 million in PPP loans yielding 1% with market rate loans, which was a great effort by our lending teams.

The funding of asset growth continues to be primarily from customer deposits which increased to $1.1 billion as of June 30, 2022, compared to $967.7 million as of June 30, 2021, an increase of $135.4 million, of 14.0%. The

increase in customer deposits allowed for a reduction in wholesale funding of $7.2 million since June 30, 2021.

Much has occurred since the beginning of the year. Sadly, war broke out in Europe destabilizing the global economy. Inflation, caused by increased stimulus and exacerbated by tight labor markets and soaring energy costs, has forced the Federal Reserve to increase interest rates. Despite some predictions of recessionary times ahead, our asset quality metrics remain quite strong. Locally, our business community is seeing continued good demand for products and services. Universally, the biggest challenge our business community faces is attracting and retaining enough employees with which to operate. Our company is not immune to this issue, though we have had some recent success in recruiting, perhaps signaling that the tight labor market is easing.

We are in the middle of our region's important summer/fall tourism season and all reports indicate strong demand, though a bit lower than last year's record setting season. Construction of all types continues to be robust, with many contractors committed to projects spanning over the next few years. Loan demand for both commercial and residential lending remains strong. We remain cautiously optimistic for the balance of the year.

We are pleased to announce that the Board of Directors declared a cash dividend of $0.35 per share for the quarter payable August 4, 2022, to shareholders of record as of July 30, 2022.

Sincerely,

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, three 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)

DIRECTORS

Neil J. Van Dyke - Chair

Neil J. Van Dyke - Chair

Timothy W. Sargent - Vice Chair

David S. Silverman - President & CEO

Karyn J. Hale - Chief Financial Officer

Timothy W. Sargent - Secretary

Kristy Adams Alfieri - Assistant Secretary

DIRECTORS

Neil J. Van Dyke - Chair

Michael R. Barrett - St. Johnsbury

Timothy W. Sargent - Vice Chair

Steven J. Bourgeois - St. Albans

Andrew A. Dean - Northern NH

Stanley T. Fillion - Northern NH

Rosemary H. Gingue - St. Johnsbury

John M. Goodrich - St. Johnsbury

Christopher M. Knapp - Northern NH

Coleen K. Kohaut - St. Albans

Justin P. Lavely - St. Johnsbury

Daniel J. Luneau - St. Albans

Samuel H. Ruggiano - St. Albans

Christine A. Sheley - Northern NH

David S. Silverman - All

Union Bank Offices

(ATMs at all Branch Locations)