UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ending: June 30, 2000
Commission file number: 000-28449
UNION BANKSHARES, INC.
VERMONT 03-0283552
P.O. BOX 667
MAIN STREET
MORRISVILLE, VT 05661
Registrant's telephone number: 802-888-6600
Former name, former address and former fiscal year, if changed since last
report: Not applicable
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of June 30, 2000:
Common Stock, $2 par value 3,029,529 shares
Union Bankshares, Inc. and Subsidiaries
Statement of Condition
(Unaudited)
<TABLE>
<CAPTION>
June 30 December 31
(Dollars in Thousands) 2000 1999
----------------------
<S> <C> <C>
Assets
Cash and due from banks $ 11,612 $ 11,627
Federal funds sold and overnight deposits 5,183 3,474
----------------------
Total cash and cash equivalents 16,795 15,101
Interest bearing deposits 1,953 1,957
Securities available-for-sale 55,393 60,441
Federal Home Loan Bank stock 1,017 939
Loans held for sale 7,534 8,102
Loans 204,803 201,525
Unearned loan fees (267) (273)
Allowance for loan losses (2,934) (2,870)
----------------------
Loans, net 201,602 198,382
----------------------
Accrued interest receivable 2,222 2,199
Bank premises and equipment, net 3,960 4,040
Other real estate owned, net 99 27
Other assets 4,237 4,288
----------------------
Total assets $294,812 $295,476
======================
Liabilities and Stockholders' equity:
Liabilities:
Deposits:
Non-interest bearing $ 32,990 $ 32,989
Interest bearing 215,542 224,604
----------------------
Total deposits 248,532 257,593
Borrowed funds 10,046 2,872
Accrued interest and other liabilities 3,105 2,791
----------------------
Total liabilities 261,683 263,256
======================
Stockholders' equity:
Common stock, $2 par value; 5,000,000
shares authorized; 3,263,489 shares
issued at 6/30/00 and 12/31/99. 6,527 6,527
Paid-in capital and surplus 238 238
Retained earnings 28,972 28,180
Treasury stock at cost (233,960
shares at 6/30/00 and 12/31/99) (1,592) (1,592)
Accumulated other comprehensive income (1,016) (1,133)
----------------------
Total stockholders' equity 33,129 32,220
----------------------
Total liabilities and
stockholders' equity $294,812 $295,476
======================
</TABLE>
See accompanying notes to unaudited financial statements
Union Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------------------------------
June 30 June 30
(Dollars in Thousands) 2000 1999 2000 1999
------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $ 4,908 $ 4,583 $ 9,649 $ 9,103
Interest and dividends on investment
securities 900 920 1,824 1,822
Interest on federal funds sold 73 81 122 156
Interest on interest bearing deposits 31 33 60 61
------------------------------------------------------
5,912 5,617 11,655 11,142
Interest expense:
Interest on deposits 2,319 2,177 4,546 4,335
Interest on federal funds purchased 3 1 4 1
Interest on borrowed funds 57 71 95 161
------------------------------------------------------
2,379 2,249 4,645 4,497
------------------------------------------------------
Net interest income 3,533 3,368 7,010 6,645
Provision for loan losses 63 88 125 188
------------------------------------------------------
Net interest income after provision for
loan losses 3,470 3,280 6,885 6,457
Noninterest income:
Trust department income 34 31 76 68
Service fees 601 607 1,155 1,170
Security gains (losses) (3) 3 34 3
Gain on sale of loans 0 29 9 45
Other 3 8 9 15
------------------------------------------------------
635 678 1,283 1,301
Noninterest expense:
Salaries and wages 1,212 1,054 2,311 2,088
Pension and other employee benefits 279 237 577 498
Occupancy expense, net 135 133 292 277
Equipment expense 230 264 530 539
Other operating expense 763 738 1,435 1,450
------------------------------------------------------
2,619 2,426 5,145 4,852
------------------------------------------------------
Income before income tax expense 1,486 1,532 3,023 2,906
Income tax expense 318 490 777 890
------------------------------------------------------
Net income $ 1,168 $ 1,042 $ 2,246 $ 2,016
======================================================
Earnings per common share $ .38 $ .34 $ .74 $ .66
======================================================
Weighted average number of common
shares outstanding 3,029,529 3,029,438 3,029,529 3,027,471
======================================================
Dividends declared per share $ 0.24 $ 0.22 $ 0.48 $ 0.44
======================================================
</TABLE>
See accompanying notes to unaudited financial statements
Union Bankshares, Inc. and Subsidiaries
Consolidated Statement of Changes in Stockholders Equity
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
Other Total
Common Paid-in Capital Retained Treasury Comprehensive Stockholders'
Stock & Surplus Earnings Stock Income (Loss) Equity
------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1999 $6,527 $238 $28,180 $(1,592) $(1,133) $32,220
Net income 2,246 2,246
Net unrealized holding gain on securities
available-for-sale, net of tax 117 117
-------
Comprehensive income 2,363
-------
Cash dividends declared (1,454) (1,454)
Treasury stock purchased 0
Exercise of stock option 0
-------
Balance, June 30, 2000 $6,527 $238 $28,972 $(1,592) $(1,016) $33,129
===========================================================================
</TABLE>
Union Bankshares, Inc. and Subsidiaries
Consolidated Statement of Cash Flows
(UNAUDITED)
<TABLE>
<CAPTION>
Year To Date
------------------------
June 30 June 30
(Dollars in Thousands) 2000 1999
------------------------
<S> <C> <C>
Cash Flows From Operating Activities
Net Income $ 2,246 $ 2,016
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation 428 426
Provision for loan losses 125 188
Credit for deferred income taxes (25) (18)
Amortization, net Securities 30 2
Amortization, net Limited Partnerships 17 0
Write-downs of Other Real Estate Owned 8 4
Increase (decrease) in unamortized
loan fees (6) 25
(Increase) decrease in loans held
for sale 577 (4,108)
(Increase) decrease in accrued interest
receivable (23) 111
Decrease in other assets 201 56
(Increase) decrease in income taxes
receivable (128) 133
Decrease in accrued interest payable (80) (196)
Increase in other liabilities 394 130
Gain sold on securities sold (34) (3)
Gain on sale of loans (9) (45)
(Gain) loss on sale of OREO (2) 10
-----------------------
Net cash (used) provided by operating
activities 3,719 (1,269)
Cash Flows From Investing Activities
Interest bearing deposits
Maturities and redemptions 694 689
Purchases (690) (1,169)
Securities available for sale
Maturities and redemptions 8,399 13,728
Purchases (3,170) (13,164)
Purchase of Federal Home Loan Bank Stock (78) (35)
(Increase) decrease in loans, net (3,527) 6,065
Recoveries of loans charged off 79 40
Purchases of premises and equipment, net (348) (124)
Proceeds from sale of OREO 0 130
Investment in Ltd Partnerships (54) (373)
Proceeds from sale of repossessed property 11 56
-----------------------
Net cash used by investing activities 1,316 5,843
Cash Flows From Financing Activities
Borrowings, net of repayments 7,174 275
Proceeds from exercise of stock options 0 37
Net increase (decrease) in demand, NOW,
savings, and money market accounts (9,555) 2,736
Net increase (decrease) in time deposits 494 (4,576)
Dividends paid (1,454) (1,238)
-----------------------
Net cash provided by financing activities (3,341) (2,766)
Increase in cash and cash equivalents 1,694 1,808
Cash and cash equivalents
Beginning 15,101 19,196
Ending 16,795 21,004
Supplemental Disclosure of Cash Flow Information:
Interest Paid $ 4,725 $ 4,683
-----------------------
Income Taxes Paid $ 930 $ 745
-----------------------
</TABLE>
UNION BANKSHARES, INC.
NOTES TO FINANCIAL STATEMENTS:
Note 1. The accompanying interim consolidated financial statements of
Union Bankshares, Inc. (the Company) for the interim period ended June 30,
2000 and 1999 and for the quarters then ended have been prepared in
accordance with the accounting policies described in the company's annual
report to shareholders and Form 10K which are unaudited. In the opinion of
management, all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the information contained
herein have been made. Certain amounts reported in prior periods have been
reclassified for comparative purposes. This information should be read in
conjunction with the Company's 1999 Annual report, Form S-4, and Form 8K.
Note 2. Acquisition
Effective November 30, 1999, following the receipt of all required
stockholder, state and federal regulatory approvals, Union Bankshares, Inc.
acquired Citizens Saving Bank and Trust Co. This makes Union a two bank
holding company. The accompanying consolidated financial statements reflect
the merger accounted for in a tax-free transaction as a pooling of interests
and are presented as if the companies were combined as of the earliest
period presented. However, the financial information is not necessarily
indicative of the results of operations, financial position or cash flows
that would have occurred had the acquisition been consumated for the periods
for which it is given effect, nor is it necessarily indicative of future
results of operations, financial position, or cash flows. The financial
statements reflect the conversion of each outstanding share of Citizens
common stock into 6.5217 shares of Union common stock, with the exchange of
991,089 shares (net of 196 fractional shares redeemed for approximately
$4,516) of newly-issued Company common stock.
Note 3. Commitments and Contingencies
In the normal course of business, the Company is involved in various legal
proceedings. In the opinion of management, after consulting with the
Company's legal counsel, any liability resulting from such proceedings would
not have a material adverse effect on the Company's financial statements.
Note 4 Earnings Per Share
Earnings per common share amounts are computed based on the weighted average
number of shares of common stock outstanding during the period
(retroactively adjusted for stock dividends) and reduced for shares held in
Treasury. The assumed conversion of available stock options does not result
in material dilution.
Note 5 Reportable Segments
The company has two reportable operating segments, Union Bank (Union) and
Citizens Savings Bank and Trust Company (Citizens). Management regularly
evaluates separate financial information for each segment in deciding how to
allocate resources and in assessing performance.
The Company accounts for intersegment sales and transfers as if the sales or
transfers were to third parties, that is, at current market prices.
Information about reportable segments, and reconciliation of such
information to the consolidated financial statements as of and for the
period ended June 30, follows:
<TABLE>
<CAPTION>
Intersegment Consolidated
2000 Union Citizens Elimination Other Totals
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income $ 7,814 $ 3,841 $ 0 $ 0 $ 11,655
Interest expense 2,967 1,677 0 1 4,645
Provision for loan loss 0 125 0 0 125
Service fee income 906 249 0 0 1,155
Income tax expense (benefit) 622 199 0 (44) 777
Net income (loss) 1,943 392 0 (89) 2,246
Assets 194,963 99,432 (47) 464 294,812
<CAPTION>
Intersegment Consolidated
1999 Union Citizens Elimination Other Totals
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income $ 7,303 $ 3,839 $ 0 $ 0 $ 11,142
Interest expense 2,822 1,674 0 1 4,497
Provision for loan loss 63 125 0 0 188
Service fee income 867 303 0 0 1,170
Income tax expense (benefit) 293 602 0 (5) 890
Net income (loss) 1,664 487 0 (135) 2,016
Assets 184,126 103,992 0 365 288,483
</TABLE>
Amounts in the "Other" column encompass activity in Union Bankshares, Inc.,
the "parent company." Holding company assets are stated after intercompany
eliminations.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Union Bankshares, Inc.
Dated: August 23, 2000
/s/ Kenneth D. Gibbons
-------------------------------------
Kenneth D. Gibbons
Director and Chief Executive Officer
/s/ Marsha A. Mongeon
-------------------------------------
Marsha A. Mongeon
Chief Financial Officer and Treasurer
