We are pleased to report the financial results for Union Bankshares, Inc. for the three and six months ending June 30, 2023. Consolidated net income for the three months ending June 30, 2023, was $2.7 million, or $0.60 per share, compared to $2.9 million, or $0.65 cents per share, for the same period in 2022, and $5.7 million, or $1.26 per share, for the six months ending June 30, 2023, compared to $5.4 million, or $1.20 per share for the same period in 2022.

Total assets were $1.3 billion as of June 30, 2023, compared to $1.2 billion as of June 30, 2022, an increase of $142.8 million, or 12.0%. Asset growth was primarily driven by loans. Total loans outstanding as of June 30, 2023, were $940.2 million, which included $3.1 million in loans held for sale, compared to $823.0 million as of June 30, 2022, with $3.8 million in loans held for sale. Total deposits were $1.1 billion as of June 30, 2023, and include $138.0 million of purchased brokered deposits compared to deposits of $1.1 billion as of June 30, 2022, with no purchased deposits. Also, advances from the Federal Home Loan Bank totaling $120.5 million were outstanding as of June 30, 2023, compared to no outstanding advances as of June 30, 2022.

Second quarter results were impacted by significantly higher funding costs compared to the first quarter and the several prior years. While new loans are being originated at higher interest rates than previously, it has not entirely made up for the increases in funding costs. We expect this pressure on funding costs to continue for the near term and perhaps longer.

As most are aware, the State of Vermont suffered a devastating flooding event from July 7-12, 2023. Many towns and cities were impacted. Union’s home market, including Lamoille County and the Hardwick area were especially hard hit as the Lamoille River breeched its banks at levels

exceeding that of Hurricane Irene. Two of our branches, Johnson and Jeffersonville, suffered water damage. Both properties are covered by two layers of flood insurance and as a result, we do not expect repair efforts to have a material impact on our financial performance. The Jeffersonville branch is back in business at this writing, and we are hoping we will be able to re-open Johnson around July 31st. We believe getting re-opened as soon as possible is important to these now fragile communities. As during past crises large and small, we are communicating with our customers, assessing their situations, and working with them case by case to keep people in their homes and remain in business. Many of our local towns and villages suffered substantial infrastructure damage. We are working with local governments to expedite funding for the repair of vital services such as roads, bridge, water, and sewer.

The most unfortunate among us are also the most impacted by the current natural disaster. Federal and State assistance will hopefully become available in due course. Until then, there are immediate needs such as food and housing that community members are at risk of doing without. We are working with local non-profit organizations including the United Way of Lamoille County and the Vermont Community Foundation to assist impacted community members with their immediate financial needs

The Board of Directors declared a cash dividend of $0.36 per share for the quarter payable August 3, 2023, to shareholders of record as of July 29, 2023.

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 - Northern NH

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)