July 14, 2000
Dear Shareholder:
The first six months of 2000 have passed and we are pleased to provide you
this "progress report" on our activities and financial results for the
period. As one might imagine, the details of combining certain backroom and
other functions into one area are many and time consuming, however, good
progress is being made.
Since the conversion of Citizens data processing to Union in February,
certain operational, loan review, audit/compliance and other processes have
also been consolidated. The anticipated downsizing in Citizens' staff
occurred in May with the associated non-recurring cost of severance
payments reflected in personnel expense during the second quarter. The
process of identifying and implementing changes to take advantage of
economies of scale is an ongoing process.
The Audit Committee has been appointed with Directors Hovey, Marron and
Rollins serving. The committee has been reviewing audit procedures and
scope for our upcoming audit this year.
Citizens Savings Bank and Trust Company plans to introduce the NetTeller
Internet banking product early in the fourth quarter. This product was
introduced at Union Bank late in 1999 with more than 1,000 customers now
taking advantage of "24x7 banking hours." Along a similar line, the 22nd
ATM in our system was recently installed at Ben and Jerry's Waterbury
factory/tour facility. Electronic Banking continues to grow in popularity.
Of significant note is recent approval by the American Stock Exchange
(AMEX) for listing of Union Bankshares, Inc. stock under the symbol UNB.
Final listing and "first day" trading should begin during the week of July
10th. AMEX listing should provide better liquidity and help establish a
more consistent trading environment for our shareholders.
On the next page are the unaudited financial statements for your company.
Earnings increased 11.4%, loans 5.9%, and assets 2.2% year to date versus
1999. Our merger plan calls for earnings growth to increase this year as
the effects of consolidating the two companies' operations should improve
performance.
Enclosed is a dividend check or advice of deposit representing a dividend
of $.24 per share to shareholders of record July 7, 2000.
Sincerely,
/s/ W. Arlen Smith /s/ Kenneth D. Gibbons
------------------- -----------------------
W. Arlen Smith Kenneth D. Gibbons
Chairman President
SHAREHOLDER
ASSISTANCE
AND
INVESTOR INFORMATION
If you need assistance with a change in registration of certificates,
reporting lost certificates, nonreceipt or loss of dividend checks,
information about the Company, or to receive copies of financial reports,
please contact us at the address and phone number listed below:
Corporate Name: Union Bankshares, Inc.
Transfer Agent: Union Bank
P.O. Box 667
Morrisville, VT
05661-0667
Phone: 802-888-6600
Fax: 802-888-4921
Email: [email protected]
Website: www.unionbankvt.com
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS (unaudited)
---------------------------------------------------------------------------
June 30, 2000 June 30, 1999
<S> <C> <C>
ASSETS
Cash and Due from Banks $ 11,611,820 $ 10,813,171
Federal Funds Sold 5,090,958 10,176,206
Interest Bearing Deposits 2,045,151 2,379,401
U.S. Government Securities 29,770,488 31,688,062
State and Municipal Securities 4,735,488 4,974,588
Corporate Securities 21,903,676 20,875,112
Loans, net 212,070,757 200,266,230
Less: Reserve for Loan Losses (2,934,253) (2,889,891)
Bank Building and Equipment, net 3,960,199 4,271,770
Other Real Estate Owned 98,705 419,123
Other Assets 6,458,574 5,509,357
----------------------------
Total Assets $294,811,563 $288,483,129
============================
LIABILITIES AND SHAREHOLDERS' EQUITY
Demand Deposits $ 32,990,009 $ 31,207,008
Savings and Time Deposits 215,541,679 215,870,489
Other Liabilities 13,151,083 9,433,687
Common Stock 6,526,978 6,526,378
Paid in Capital 238,353 236,029
Retained Earnings 28,971,740 27,149,031
Accumulated Other Comprehensive Income (1,015,828) (347,042)
Treasury Stock at Cost (1,592,451) (1,592,451)
----------------------------
Total Liabilities and
Shareholders' Equity $294,811,563 $288,483,129
============================
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
---------------------------------------------------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
(3 months ended) (6 months ended)
<S> <C> <C> <C> <C>
Interest Income $5,912,201 $5,616,026 $11,655,699 $11,141,438
Interest Expense 2,379,325 2,248,747 4,645,498 4,496,905
-----------------------------------------------------------
Net Interest Income 3,532,876 3,367,279 7,010,201 6,644,533
Less: Provision for Loan Losses 62,500 87,498 125,000 187,498
-----------------------------------------------------------
Net Interest Income after
Loan Loss Provision 3,470,376 3,279,781 6,885,201 6,457,035
Trust Income 34,474 31,107 76,219 67,716
Other Income 600,020 650,599 1,206,371 1,236,680
Other Operating Expenses:
Salaries 1,211,609 1,054,071 2,310,877 2,087,602
Employee Benefits 297,075 236,949 576,690 498,593
Occupancy 135,270 133,236 292,547 276,902
Equipment 229,861 286,425 530,368 539,497
Other 763,134 718,725 1,434,645 1,452,755
-----------------------------------------------------------
Total 2,618,949 2,429,406 5,145,127 4,855,349
-----------------------------------------------------------
Net Income before Tax 1,485,921 1,532,081 3,022,664 2,906,082
Income Tax Expense 317,844 489,922 776,930 890,504
-----------------------------------------------------------
Net Income $1,168,077 $1,042,159 $ 2,245,734 $ 2,015,578
===========================================================
Earnings per Share $ 0.38 $ 0.34 $ 0.74 $ 0.66
Book value per share $ 10.90 $ 10.53
</TABLE>
DIRECTORS OF
UNION BANKSHARES, INC.
W. Arlen Smith, Chairman
Cynthia D. Borck
William T. Costa, Jr.
Kenneth D. Gibbons
Peter M. Haslam
Franklin G. Hovey II
William F. Kinney
Richard C. Marron
Robert P. Rollins
Jerry S. Rowe
Richard C. Sargent
Walter M. Sargent
OFFICERS OF
UNION BANKSHARES, INC.
W. Arlen Smith Chairman
Cynthia D. Borck Vice President
Kenneth D. Gibbons President
Peter M. Haslam Secretary
Marsha A. Mongeon Vice President/Treasurer
Jerry S. Rowe Vice President
DIRECTORS OF CITIZENS SAVINGS
BANK AND TRUST COMPANY
Cynthia D. Borck
J.R. Alexis Clouatre
William T. Costa, Jr.
Dwight A. Davis
Kenneth D. Gibbons
Franklin G. Hovey II
Jerry S. Rowe
Joseph M. Sherman
OFFICERS OF CITIZENS SAVINGS
BANK AND TRUST COMPANY
Michelle Brochu Vice President
Patricia G. Coffin Auditor/Compliance Officer
John Dinsmore Assistant Treasurer
Tracey D. Holbrook Assistant Vice President
Susan O. Laferriere Vice President
Dennis J. Lamothe Treasurer
Barbara A. Olden Assistant Vice President
Jerry S. Rowe President
Wendy L. Somers Trust Officer
David A. Weed Vice President
DIRECTORS OF UNION BANK
W. Arlen Smith, Chairman
Cynthia D. Borck
Kenneth D. Gibbons
Peter M. Haslam
William F. Kinney
Richard C. Marron
Robert P. Rollins
Richard C. Sargent
Walter M. Sargent
OFFICERS OF UNION BANK
Wanda L. Allaire Assistant Vice President
Ethan A. Allen, Jr. Vice President
Rhonda L. Bennett Vice President
Cynthia D. Borck Senior Vice President
Fern C. Farmer Assistant Vice President
Patsy S. French Assistant Vice President
Kenneth D. Gibbons President
Nathaniel M. Hayward Commercial Loan Officer
Claire A. Hindes Assistant Treasurer
Patricia N. Hogan Vice President
Peter R. Jones Vice President
Margaret S. Lambert Assistant Vice President
Marsha A. Mongeon Senior Vice President/
Treasurer
Freda T. Moody Assistant Vice President
Karen Carlson Noyes Assistant Vice President
Colleen D. Putvain Assistant Treasurer
Judith A. Schraven Human Resource Officer
Ruth P. Schwartz Vice President
David S. Silverman Senior Vice President
JoAnn A. Tallman Assistant Secretary
Francis E. Welch Assistant Vice President
Craig S. Wiltshire Vice President
UNION BANK OFFICES
Morrisville Jeffersonville
20 Lower Main Street* 80 Main Street*
(802) 888-6600 (802) 644-6600
Northgate Plaza* Hyde Park
Route 100 250 Main Street
(802) 888-6860 (802) 888-6880
Stowe Remote ATM's at:
Stowe Village* Smugglers' Notch Resort (2)
Park and Pond Streets Johnson State College
(802) 253-6600 Copley Hospital
Cold Hollow Cider Mill
1857 Mountain Road Trapp Family Lodge
Route 108 Stowe Mountain Resort (3)
(802) 253-6642 Big John's Riverside Store
Ben and Jerry's
Hardwick Express
103 VT Route 15* Telebanking
(802) 472-8100 (802) 888-6448
(800) 583-2869
Johnson
198 Lower Main Street*
(802) 635-6600
www.unionbankvt.com
* ATM's at these branches
CITIZENS SAVINGS BANK AND TRUST COMPANY OFFICES
St. Johnsbury Remote ATM's at:
364 Railroad Street* East Burke, Route 114
(802) 748-3131 Danville, Route 2
325 Portland Street Express Phone
(802) 748-3121 Banking
(802) 748-0815
(800) 748-1018
Lyndonville
183 Depot Street*
(802) 626-3100
St. Johnsbury
Center
Green Mountain Mall*
1998 Memorial Drive
(802) 748-2454
www.csbtc.com
* ATM's at these branches
