UNION BANKSHARES INC
For the period ended Dec 31, 2025. Filed Mar 20, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 20, 2026
UNB$22.96+0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-25.
0000706863-25-000044
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-20.
0000706863-26-000029
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 165 previous paragraphs and 166 current paragraphs.
70 unchanged; 80 reworded; 15 added; 13 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 16 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
Despite a persistently challenging operating environment in 2025, characterized by elevated interest rates for much of the year, funding cost pressures, and ongoing economic and geopolitical uncertainty, the Company delivered solid financial performance and continued to strengthen its balance sheet. While the Federal Reserve implemented a series of interest rate reductions during the second half of the year, rates remained relatively high overall, requiring continued discipline in balance sheet management and pricing strategies. Through prudent execution and a sustained focus on core relationship banking, the Company achieved meaningful growth in net income, expanded net interest margin, and improved key profitability and capital metrics year over year. These results underscore the resilience of the Company’s business model and its ability to adapt effectively to evolving monetary policy and market conditions while maintaining strong capital and liquidity positions.
Current report
Net interest income, the largest component of net income, saw an increase due to higher interest earned on average earning assets and an increase in average loan volume. Interest expense increased, primarily driven by increased utilization of wholesale funding and an overall increase in rates on customer deposits. The net interest spread and net interest margin both improved, reflecting the overall positive impact of these changes, despite higher funding costs.
Current report
The current macroeconomic and geopolitical environment is subject to a number of uncertainties, including geopolitical conflicts, tariffs or changes in trade policies, the impact of federal government shutdowns, capital markets volatility, and inflation. These and other factors may contribute to slower or negative economic growth and a challenging business environment for our customers. While we remain confident in the resilience and strength of our business and financial model, the current macroeconomic and geopolitical environment could negatively impact our financial condition and results of operations. For more information about risks the Company faces, please see “Part I, Item 1A. Risk Factors".
Current report
(5)The ratio of total capital to risk weighted assets is a regulatory capital measurement. See Note 23 to the Company's consolidated financial statements for more information.
Current report
Interest income, on a fully tax equivalent basis, on investment securities increased $985 thousand between the comparison periods due to an increase of $2.0 million in the average balance of the portfolio and an increase of 32 bps in the average yield. The improvement in the average yield and interest income was attributable in part to the balance sheet repositioning completed in the third quarter of 2024, in which the Company sold lower-yielding AFS debt securities at a loss and used the proceeds to purchase higher yielding AFS debt securities and fund loans, as well as the strategic decision to position the investment portfolio for improved future cash flows and earnings with the purchase of approximately $75.0 million of investment securities AFS during the fourth quarter of 2025.
Current report
Interest income, on a fully tax equivalent basis, on loans increased $7.2 million between the twelve month comparison periods due to an increase in the average volume of loans outstanding of $90.4 million and an increase of 19 bps in the average yield. Interest income on loans increased $563 thousand and $445 thousand during the year ended December 31, 2025 and 2024, respectively, due to recoveries of interest from the payoff of loans that had previously been in nonaccrual. This resulted in a 5 bps increase in the average loan yield for the years ended December 31, 2025 and 2024.
Current report
Average interest bearing liabilities increased $89.8 million between the twelve month comparison periods due to increases in average borrowed funds of $65.5 million and average interest bearing deposits of $24.2 million. The average rate paid on interest bearing liabilities increased 7 bps to 2.62% for the year ended December 31, 2025 compared to 2.55% for the year ended December 31, 2024 due to continued customer expectation of higher rates on deposit accounts along with utilization of wholesale funding at rates higher than deposit rates. Interest expense increased $3.2 million, to $32.8 million for the year ended December 31, 2025 compared to $29.6 million for the year ended December 31, 2024.
Current report
Net interest income, on a fully tax equivalent basis, increased $4.8 million to $44.0 million for the year ended December 31, 2025 compared to $39.3 million for the year ended December 31, 2024.
Current report
(5)Net interest spread is the tax equivalent average yield on average interest earning assets less the average rate paid on interest bearing liabilities.
Current report
(6)Net interest margin is the ratio of net interest income, on a tax equivalent basis, to average interest earning assets.
Current report
•Occupancy expense, net. The increase in occupancy expense of $141 thousand is primarily due to utilities, repairs and maintenance, and depreciation expenses related to projects completed during 2025 compared to 2024. In addition, real estate tax expense increased $24 thousand between years due to rate increases in the towns with branch locations
Current report
•Donations. Charitable donations are made as part of the Company's on-going commitment to enhancing the economic vitality and social welfare of our communities. Donations decreased between years primarily due to contributions made in 2024 related to a state tax credit program to assist a local affordable housing project and local non-profit rehabilitation projects that did not recur in 2025.
Current report
•Communications. The decrease in communications expense relates primarily to contract changes taking effect during 2025 related to network and ATM communication systems.
Current report
The increase in nonaccrual loans at December 31, 2025 primarily relates to a commercial real estate loan relationship that was placed in nonaccrual during the first quarter of 2025.
Current report
On May 20, 2025, the Company and Union entered into an Equity Distribution Agreement with Piper Sandler & Co., as sales agent, pursuant to which the Company may sell from time to time shares of the Company's common stock, par value $2.00, having an aggregate gross sale price of up to $40,000,000. Sales of common stock under the Equity Distribution Agreement may be made in any transactions that are deemed to be "at-the-market offerings" as defined in Rule 415(a)(4) under the Securities Act, or subject to the Company's consent, in privately negotiated transactions. The shares offered and sold in the offering have been registered by the Company under the Securities Act. During the year ended December 31, 2025, the Company issued 56,260 shares for aggregate gross sale proceeds of $1.5 million, at an average gross sale price of $26.51 per share, which yielded net proceeds to the Company of $1.2 million, after issuance costs, including sales commissions equal to 3% of gross sale proceeds. As of December 31, 2025, approximately $38.5 million remains available for issuance under the offering.
Removed paragraphs (13)
Previous report
The Company, like other financial institutions, has experienced earnings pressure due to the prolonged and steep yield curve inversion. The sharp increases in short-term rates during 2022 and 2023 have had a significant impact on the Company's funding costs due to higher rates paid on deposit accounts and increased utilization of wholesale funding at higher costs. The Company’s financial position remains strong, supported by a diverse deposit base, a strong liquidity position, excellent asset quality, and regulatory capital in excess of all required levels. The Company continues to focus on gathering deposits, optimization of the net interest margin and maintaining strong asset quality.
Previous report
The Company completed a balance sheet repositioning related to its investment securities portfolio during the third quarter of 2024. The sale of lower-yielding AFS debt securities with a book value of $38.5 million was executed and recorded in August of 2024, resulting in a pre-tax realized loss on the sale of $1.3 million. The proceeds from the sale of these securities were used to purchase $26.0 million of AFS debt securities at higher yields to improve income going forward, and the remainder was used to fund loan growth. The Company estimates the loss on the sale will be recouped within approximately one year.
Previous report
Return on average assets is a financial metric often utilized as an indicator of a financial institution's performance. The Company's return on average assets decreased 22 bps for the year ended December 31, 2024 compared to 2023 due to an increase in average assets of $88.0 million and a decrease in net income of $2.5 million for the year ended December 31, 2024.
Previous report
Interest income on loans increased $10.0 million between the twelve month comparison periods due to an increase in the average volume of loans outstanding of $83.6 million and an increase of 57 bps in the average yield. Loan demand has remained stable during 2024 despite inflationary pressure on construction materials and low housing inventory.
Previous report
Average interest bearing liabilities increased $95.7 million between the twelve month comparison periods due to an increase in average borrowed funds of $125.8 million partially offset by a decrease in average interest bearing deposits of $30.1 million. The average rate paid on interest bearing liabilities increased 74 bps to 2.55% for the year ended December 31, 2024 compared to 1.81% for the year ended December 31, 2023. Interest expense increased $10.3 million, to $29.6 million for the year ended December 31, 2024 compared to $19.3 million for the year ended December 31, 2023. Higher rates paid on customer deposit accounts and utilization of higher cost funding of brokered deposits and advances from the FHLB and the FRB were drivers of the increase in interest expense.
Previous report
During 2024, Union, like many other financial institutions, offered higher rate time deposit specials to attract new deposit dollars and retain existing customer deposits. Although some new money was obtained, a shift of funds from non-maturity deposits to time deposit specials occurred. Interest expense on time deposits increased $2.9 million to $11.6 million for the year ended December 31, 2024 compared to $8.7 million for the year ended December 31, 2023 due to increases in the average volume of $24.7 million and 74 bps in the average rate paid. Despite a decrease of $30.1 million in the average balance of savings/money market accounts, interest expense increased $1.4 million between the twelve month comparison periods due to an increase of 47 bps in the average rate paid on those accounts. Interest expense on interest bearing checking accounts increased $335 thousand between the twelve month comparison periods resulting from an increase of 20 bps in the average rate paid, which more than offset the decrease of $24.7 million in the average balance. The average volume of borrowed funds increased $125.8 million and the average rate paid on borrowed funds increased 39 bps between the twelve month comparison periods, resulting in a $5.6 million increase in interest expense.
Previous report
•Occupancy expense, net. The increase in occupancy expense of $159 thousand is primarily due to increases in depreciation expense related to leasehold improvements to the North Conway location that became a full service branch during the fourth quarter of 2023, as well as increases in repair and maintenance expenses at other locations.
Previous report
•ATM and debit card expense. The $351 thousand increase between years primarily relates to the costs associated with outsourcing Union's core application processing system that was finalized during the fourth quarter of 2023, as well as costs associated with a change in the servicing arrangement in place for the ATM machines.
Previous report
•Vermont franchise tax. The Vermont franchise tax is determined based on a quarterly tax rate applied to the Company's average balance of Vermont customer deposit balances. The tax rate remained unchanged throughout 2024 and 2023; however, the average balances in Vermont deposit account balances decreased for the year ended December 31, 2024, resulting in a decrease in expense.
Previous report
•Training and development. The cost associated with attending conferences and educational events during 2024 decreased $48 thousand compared to events attended in 2023.
Previous report
The Company completed a balance sheet repositioning related to its investment securities portfolio during the third quarter of 2024. This transaction consisted of the sale of lower-yielding AFS debt securities with a book value of $38.5 million, resulting in a pre-tax realized loss on the sale of $1.3 million, which was recorded in August of 2024. $26.0 million of the proceeds from the sale of these securities were used to purchase AFS debt securities at higher yields to improve income going forward, and the remainder was used to fund loan growth.
Previous report
$19.7 million in saving accounts. The decreases in these categories are attributable to customers spending down deposit balances, the loss of deposit dollars to competing financial institutions and brokerage firms, and customers shifting monies into time deposits as they continue to seek higher yields. In addition, average interest bearing checking accounts decreased due to the maturity and early payoff of purchased nonreciprocal ICS deposits from IntraFi during the first quarter of 2024.
Previous report
In March 2023, the FRB created the BTFP to provide an additional source of liquidity funding to U.S. depository institutions. Advances under this program were secured by qualifying investment assets consisting of eligible U.S. Government-sponsored enterprises and Agency MBS securities valued at par. The Company had no outstanding advances under this program at December 31, 2024 and $10.0 million outstanding under the program at a rate of 4.85% at December 31, 2023. The FRB ceased making new loans under this program on March 11, 2024.
Reworded paragraphs (80)
Previous wording
The Company's earnings have been impacted by the inverted yield curve, as deposit and funding costs have risen at a faster pace than assets have repriced, which has resulted in compression of the net interest margin and spread. The net interest margin was 2.77% for the year ended December 31, 2024 compared to 2.88% for the year ended December 31, 2023, while the net interest spreads for the same periods were 2.30% and 2.50%, respectively. We continue to manage the net interest margin and spread by remaining disciplined on loan and deposit pricing, utilizing FHLB advances and brokered CDs when appropriate to reduce our exposure to high short-term interest rates, and maximizing our balance sheet collateral (i.e. loans and investment securities) to obtain wholesale funding in a cost effective way to fund loan growth.
Current wording
The net interest margin was 2.93% for the year ended December 31, 2025 compared to 2.77% for the year ended December 31, 2024, while the net interest spread for the same periods were 2.47% and 2.30%, respectively. We continue to manage the net interest margin and spread by remaining disciplined on loan and deposit pricing, utilizing FHLB advances and brokered CDs when appropriate to reduce our exposure to high short-term interest rates, and maximizing our balance sheet collateral (i.e. loans and investment securities) to obtain wholesale funding in a cost effective way to fund loan growth.
Previous wording
The Company's consolidated net income was $8.8 million, with basic earnings per share of $1.94 for 2024 compared to consolidated net income of $11.3 million, and basic earnings per share of $2.50 for 2023, while diluted earnings per share for the same periods were $1.92 and $2.48, respectively. The decrease in net income was due to the combined effects of the $1.3 million loss on the sale of AFS debt securities discussed above, increases in noninterest expenses of $2.7 million, or 7.5%, and $1.4 million in credit loss expense, partially offset by increases of $1.1 million in noninterest income, excluding the loss on the sale of AFS debt securities, an increase in net interest income of $521 thousand or 1.4%, and a reduction in the provision for income taxes of $1.3 million, or 77.2%.
Current wording
Consolidated net income was $11.1 million, with basic earnings per share of $2.43 for 2025 compared to consolidated net income of $8.8 million, and basic earnings per share of $1.94 for 2024, while diluted earnings per share for the same periods were $2.41 and $1.92, respectively. The increase in net income was due to the combined effects of the $1.3 million pre-tax realized loss on the sale of AFS debt securities during 2024 that did not recur in 2025, increases in net interest income of $4.7 million and noninterest income of $446 thousand, and a decrease of $156 thousand in credit loss expense, partially offset by increases in noninterest expenses of $3.7 million and the provision for income taxes of $559 thousand.
Previous wording
Sales of qualifying residential loans to the secondary market for the year ended December 31, 2024 were $113.5 million resulting in gain on sales of $1.7 million, compared to sales of $75.6 million and gain on sales of $1.2 million for the year ended December 31, 2023.
Current wording
Sales of qualifying residential loans to the secondary market for the year ended December 31, 2025 were $143.5 million, resulting in gain on sales of $2.1 million, compared to sales of $113.5 million and gain on sales of $1.7 million for the year ended December 31, 2024.
Previous wording
As of December 31, 2024, the Company had total consolidated assets of $1.53 billion, an increase of 4.0% compared to total consolidated assets of $1.47 billion at December 31, 2023. Total investments decreased $13.6 million, or 5.1%, to $252.3 million, or 16.5% of total assets at December 31, 2024 compared to $265.9 million, or 18.1% of total assets, as of December 31, 2023. Net loans and loans held for sale increased $128.9 million or 12.6%, to $1.2 billion, or 75.6% of total assets, at December 31, 2024, compared to $1.0 billion, or 69.9% of total assets, at December 31, 2023. The level of federal funds sold decreased $62.6 million, or 85.4%, to $10.7 million at December 31, 2024 compared to $73.2 million at December 31, 2023.
Current wording
As of December 31, 2025, the Company had total consolidated assets of $1.62 billion, an increase of 5.8% compared to total consolidated assets of $1.53 billion at December 31, 2024. Total investments increased $76.0 million, or 30.1%, to $328.3 million, or 20.3% of total assets at December 31, 2025 compared to $252.3 million, or 16.5% of total assets, as of December 31, 2024. Net loans and loans held for sale increased $17.1 million or 1.5%, to $1.17 billion, or 72.5% of total assets, at December 31, 2025, compared to $1.16 billion, or 75.6% of total assets, at December 31, 2024. The level of federal funds sold decreased $3.0 million, or 28.4%, to $7.6 million at December 31, 2025 compared to $10.7 million at December 31, 2024.
Previous wording
Deposits decreased $136.7 million, or 10.5%, primarily due to a decrease in wholesale deposit funding. Total deposits were $1.17 billion at December 31, 2024 compared to $1.31 billion at December 31, 2023. There were $103.0 million of retail brokered deposits and $50.2 million of purchased ICS deposits at December 31, 2023, and no retail brokered deposits or purchased ICS deposits at December 31, 2024. Borrowed funds were $259.7 million at December 31, 2024 compared to $65.7 million at December 31, 2023.
Current wording
Total deposits were $1.21 billion at December 31, 2025 compared to $1.17 billion at December 31, 2024, an increase of $46.1 million, or 3.9%. There were $10.0 million of retail brokered deposits and $248 thousand of purchased CDARS deposits at December 31, 2025 and no retail brokered deposits or purchased CDARS deposits at December 31, 2024. Borrowed funds were $286.5 million at December 31, 2025 compared to $259.7 million at December 31, 2024.
Previous wording
The Company's total capital increased from $65.8 million at December 31, 2023 to $66.5 million at December 31, 2024. This increase primarily reflects net income of $8.8 million for 2024, partially offset by an increase of $2.0 million in accumulated other comprehensive loss and regular cash dividends paid of $6.5 million. (See Capital Resources on pages 45 to 46.) These changes also resulted in an increase in the Company's book value per share to $14.65 at December 31, 2024 from $14.56 as of December 31, 2023.
Current wording
The Company's total capital increased from $66.5 million at December 31, 2024 to $80.9 million at December 31, 2025. This increase primarily reflects net income of $11.1 million for 2025 and a decrease of $8.1 million in accumulated other comprehensive loss, partially offset by regular cash dividends paid of $6.6 million. (See Capital Resources on pages 46 to 47.) These changes also resulted in an increase in the Company's book value per share to $17.53 at December 31, 2025 from $14.65 as of December 31, 2024.
Previous wording
(5)Cash dividends declared and paid per share divided by consolidated net income per share.
Current wording
(6)Cash dividends declared and paid per share divided by consolidated net income per share.
Previous wording
For the year ended December 31, 2024, net income was $8.8 million compared to $11.3 million for the year ended December 31, 2023. The primary components of these results, which include net interest income, noninterest income, noninterest expenses, and provision for income taxes, are discussed below:
Current wording
For the year ended December 31, 2025, net income was $11.1 million compared to $8.8 million for the year ended December 31, 2024. The primary components of these results, which include net interest income, credit loss expense, noninterest income, noninterest expenses, and provision for income taxes, are discussed below:
Previous wording
Interest earned on average earning assets for the year ended December 31, 2024 was $68.0 million compared to $57.1 million for the year ended December 31, 2023, an increase of $10.8 million, or 19.0%. The average earning asset base increased $77.2 million between periods and the average yield on average earning assets increased 54 bps to 4.85% for the year ended December 31, 2024 compared to 4.31% for the year ended December 31, 2023.
Current wording
Interest earned, on a fully tax equivalent basis, on average earning assets for the year ended December 31, 2025 was $76.8 million compared to $68.9 million for the year ended December 31, 2024, an increase of $7.9 million, or 11.5%. The average earning asset base increased $87.3 million between periods and the average yield on average earning assets increased 24 bps to 5.09% for the year ended December 31, 2025 compared to 4.85% for the year ended December 31, 2024.
Previous wording
The average yield on federal funds sold and overnight deposits increased 76 bps between the twelve month comparison periods due to an increase in the average balance maintained in Union's master account at the FRB and an increase in the average rate paid on these balances. Interest income on investment securities decreased $45 thousand between the comparison periods due to a decrease of $17.0 million in the average balance of the portfolio, partially offset by an increase of 5 bps in the average yield.
Current wording
The average yield on federal funds sold and overnight deposits decreased 103 bps between the twelve month comparison periods due to a decrease in the average balance maintained in Union's master account at the FRB and the average rate paid on these balances.
Previous wording
The net interest spread decreased 20 bps to 2.30% for the year ended December 31, 2024, from 2.50% for the same period last year, reflecting the net effect of the 74 bps increase in the average rate paid on interest bearing liabilities, which was only partially offset by the 54 bps increase in the average yield earned on interest earning assets between periods. The net interest margin decreased 11 bps for the year ended December 31, 2024 compared to the year ended December 31, 2023 as a result of the changes discussed above. Despite the decreases in the net interest spread and net interest margin, net interest income increased $521 thousand to $38.4 million for the year ended December 31, 2024 compared to $37.8 million for the year ended December 31, 2023.
Current wording
The net interest spread increased 17 bps to 2.47% for the year ended December 31, 2025, from 2.30% for the same period last year, reflecting the net effect of the 24 bps increase in the average yield earned on interest earning assets, partially offset by the 7 bps increase in the average rate paid on interest bearing liabilities between periods. The net interest margin increased 16 bps for the year ended December 31, 2025 compared to the year ended December 31, 2024 as a result of the changes discussed above.
Previous wording
Tax exempt interest income amounted to $5.8 million and $4.3 million for the years ended December 31, 2024 and 2023, respectively. The following table presents the effect of tax exempt income on the calculation of net interest income, using a marginal federal corporate income tax rate of 21% for the years ended December 31, 2024 and 2023:
Current wording
Tax exempt interest income amounted to $6.7 million and $5.8 million for the years ended December 31, 2025 and 2024, respectively. The following table presents the effect of tax exempt income on the calculation of net interest income, using a marginal federal corporate income tax rate of 21% for the years ended December 31, 2025 and 2024:
Previous wording
Credit Loss Expense (Benefit). Credit loss expense or benefit is made up of credit loss expense on loans and credit loss expense on off-balance sheet credit exposures. Credit loss expense on loans results from net charge-offs, changes to the projected loss drivers, prepayment speeds, curtailments and time to recovery that the Company forecasted over the reasonable and supportable forecast periods and changes in the volume and mix of the loan portfolio. Credit loss expense on off-balance sheet credit exposures results from changes in outstanding commitments and changes in funding rates and assumed loss rates period over period. For further details, see FINANCIAL CONDITION -Allowance for Credit Losses on Loans and Commitments, Contingent Liabilities, and Off-Balance-Sheet Arrangements below.
Current wording
Credit Loss Expense. Credit loss expense or benefit is made up of credit loss expense on loans and credit loss expense on off-balance sheet credit exposures. Credit loss expense on loans results from net charge-offs, changes to the projected loss drivers, prepayment speeds, curtailments and time to recovery that the Company forecasted over the reasonable and supportable forecast periods and changes in the volume and mix of the loan portfolio. Credit loss expense on off-balance sheet credit exposures results from changes in outstanding commitments and changes in funding rates and assumed loss rates period over period. For further details, see FINANCIAL CONDITION -Allowance for Credit Losses on Loans and Commitments, Contingent Liabilities, and Off-Balance-Sheet Arrangements below.
Previous wording
Credit loss expense (benefit) was made up of the following components for the following periods:
Current wording
Credit loss expense was made up of the following components for the following periods:
Previous wording
•Service fees. Service fee income increased $38 thousand for the year ended December 31, 2024 compared to the same period in 2023 due to increases in loan servicing and service charge income, partially offset by decreases in ATM and debit card network fees, and merchant program fees.
Current wording
•Service fees. Service fee income decreased $101 thousand for the year ended December 31, 2025 compared to the same period in 2024, primarily due to decreases in ATM and debit card network fees, merchant program fees, overdraft fees, and other loan related fees, partially offset by an increase in loan servicing fees.
Previous wording
•Net gains on sales of loans held for sale. Residential loans totaling $113.5 million were sold to the secondary market during 2024, compared to residential loan sales of $75.6 million during 2023. The increase of $534 thousand in net gains on sales of loans reflects the higher sales volume and higher premiums obtained on sales in 2024.
Current wording
•Net gains on sales of loans held for sale. Residential loans totaling $143.5 million were sold to the secondary market during 2025, compared to residential loan sales of $113.5 million during 2024. The increase of $451 thousand in net gains on sales of loans reflects the higher sales volume and higher premiums obtained on sales in 2025.
Previous wording
•Income from Company-owned life insurance. Death benefit proceeds of $235 thousand were received in 2024, while no such proceeds were received in 2023. Income also increased in 2024 due to a higher yield earned on the underlying life insurance policies.
Current wording
•Income from Company-owned life insurance. Death benefit proceeds of $197 thousand were received in 2025 compared to death benefit proceeds of $235 thousand received in 2024.
Previous wording
•Amortization of MSRs, net. Income from MSRs is derived from servicing rights acquired through the sale of loans on which servicing is retained. Capitalized servicing rights are initially recorded at fair value and amortized in proportion to, and over the period of, the estimated future servicing period of the underlying loans. Amortization of MSRs exceeded new capitalized MSRs resulting in net expense of $15 thousand and $316 thousand for the years ended December 31, 2024 and 2023, respectively.
Current wording
•Income of MSRs, net. Income from MSRs is derived from servicing rights acquired through the sale of loans on which servicing is retained. Capitalized servicing rights are initially recorded at fair value and amortized in proportion to, and over the period of, the estimated future servicing period of the underlying loans. The increase in the volume of residential loan sales discussed above resulted in new capitalized MSRs that exceeded the amortization of MSRs by $128 thousand for the year ended December 31, 2025. The amortization of MSRs exceeded the new capitalized MSRs for the 2024 comparison period and the amortization is included in Other expenses in the consolidated statements of income.
Previous wording
•Other income. The Company received $117 thousand in prepayment penalties from the early payoff of loans during 2024 that were not received in 2023.
Current wording
•Other income. The Company received $25 thousand of prepayment penalties from the early payoff of loans during 2025 compared to $117 thousand of prepayment penalties received during 2024.
Previous wording
•Net gains on other investments. Participants in the 2020 Amended and Restated Nonqualified Excess Plan (the "2020 Deferred Compensation Plan") elect to defer receipt of current compensation from the Company or its subsidiary and select designated reference investments consisting of investment funds. The performance of those funds, over which the Company has no control, resulted in net gains of $216 thousand and $189 thousand for the years ended December 31, 2024 and 2023, respectively.
Current wording
•Net gains on other investments. Participants in the 2020 Amended and Restated Nonqualified Excess Plan (the "2020 Deferred Compensation Plan") elect to defer receipt of current compensation from the Company or its subsidiary and select designated reference investments consisting of investment funds. The performance of those funds, over which the Company has no control, resulted in net gains of $203 thousand and $216 thousand for the years ended December 31, 2025 and 2024, respectively.
Previous wording
•Net losses on sales of investment securities AFS. As discussed above, the Company completed a balance sheet repositioning related to its investment securities portfolio during 2024. The sale of lower-yielding AFS debt securities with a book value of $38.5 million was executed and recorded in August of 2024, resulting in a pre-tax realized loss on the sale of $1.3 million.
Current wording
•Net losses on sales of investment securities AFS. During the third quarter of 2024, the Company completed a balance sheet repositioning related to its investment securities portfolio in which the sale of lower-yielding AFS debt securities resulted in a pre-tax realized loss on the sale of $1.3 million.
Previous wording
•Salaries and wages. Salaries and wages increased $1.4 million due to annual salary adjustments for the 2024 fiscal year and a $380 thousand increase in the accrual amount for the annual incentive plan payments to select officers of Union for 2024 compared to 2023. In addition, $397 thousand of the increase related to a cash bonus payment to employees in December 2024 in lieu of a 401k profit sharing contribution that was included in employee benefits expense in 2023. The increase is also attributable to a separation of service agreement with an employee and the inclusion of salaries and wages for employees at our North Conway location, which became a full service branch during the fourth quarter of 2023.
Current wording
•Salaries and wages. Salaries and wages increased $1.8 million primarily due to annual salary adjustments and new positions for the 2025 fiscal year, a $408 thousand increase in the accrual amount for the annual incentive plan payments to select officers of Union for 2025 compared to 2024, and a change in the paid time off (PTO) policy during 2025 resulting in an increase of $392 thousand from an accrual adjustment for the carryover of unused PTO outstanding as of December 31, 2025. Salaries and wages are reduced by deferred loan origination costs at the time of origination. Deferred loan origination costs reduced salaries and wages by $13 thousand and $257 thousand for the years ended December 31, 2025 and 2024, respectively. The lower deferred loan origination cost for 2025 compared to 2024 is primarily attributable to loan origination levels. These increases were partially offset by a $397 thousand decrease related to a cash bonus payment to employees in December 2024 in lieu of a 401k profit sharing contribution that was included in employee benefits expense in 2025.
Previous wording
•Employee benefits. Employee benefit expense increased $351 thousand due to increases of $496 thousand in premium expense for the Company's medical and dental plans, $132 thousand in payroll tax expense, and $15 thousand in employee benefits related to the Company's deferred compensation plans. These increases were partially offset by a decrease of $292 thousand in 401k contributions primarily due to no profit sharing contribution in 2024 compared to 2023 as discussed above.
Current wording
•Employee benefits. Employee benefit expense increased $763 thousand due to increases of $598 thousand in 401k plan contribution expense, $119 thousand in payroll tax expense and $81 thousand in premium expense for the Company's medical and dental plans. The increase in the 401k plan contribution expense resulted primarily from there being no profit sharing contribution in 2024 as discussed above compared to a $466 thousand profit sharing accrual in 2025.
Previous wording
•Equipment expense. Equipment expense increased primarily due to an increase in software license and maintenance costs associated with outsourcing Union's core application processing system that was finalized during the fourth quarter of 2023.
Current wording
•Equipment expense. Equipment expense increased between years primarily due to an increase in software license and maintenance costs.
Previous wording
•FDIC insurance assessment. The FDIC insurance assessment increased by $169 thousand due to an increase in the assessment rate as well as overall growth in net assets.
Current wording
•FDIC insurance assessment. The FDIC insurance assessment increased by $310 thousand due to an increase in the assessment rate as well as overall growth in net average assets.
Previous wording
•Electronic banking expense. The increase in electronic banking expense related to software initiatives that were implemented to the online banking platform in the fourth quarter of 2024.
Current wording
•Electronic banking expense. Electronic banking expense increased $136 thousand primarily due to software initiatives that were implemented to the online banking platform in the fourth quarter of 2024.
Previous wording
•Wealth management expenses. The $52 thousand increase was primarily attributable to the growth in managed fiduciary accounts and the associated data processing and professional services.
Current wording
•Wealth management expenses. The $53 thousand increase was primarily attributable to the growth in managed fiduciary accounts and the associated data processing and professional services.
Previous wording
•Professional fees. Professional fees increased by $46 thousand due to annual increases in engagement fees and additional consultants that were engaged to assist with employment searches and other consulting services in 2024 that were not utilized in 2023.
Current wording
•Professional fees. Professional fees increased $85 thousand due to increases in engagement fees and additional consultants that were engaged to assist with employment searches and other consulting services in 2025.
Previous wording
•Advertising and public relations. The increase in advertising and public relations costs is primarily related to advertising campaigns and business development activities during 2024 that did not occur in 2023.
Current wording
•Advertising and public relations. Advertising and public relations costs increased $156 thousand primarily related to a focus on advertising campaigns and business development activities in 2025 and the increased costs of these campaigns and activities compared to 2024.
Previous wording
Provision for Income Taxes. The Company has provided for current and deferred federal income taxes for the current and prior period presented. The Company's net provision for income taxes was $369 thousand and $1.6 million for 2024 and 2023, respectively, reflecting lower net income and a higher proportion of tax-exempt income year over year, as well as the impact of limited partnership investments and related tax credits, discussed below. The Company’s effective federal corporate income tax rate was 4.6% and 12.5% for 2024 and 2023, respectively.
Current wording
Provision for Income Taxes. The Company has provided for current and deferred federal income taxes for the current and prior period presented. The Company's net provision for income taxes was $928 thousand and $369 thousand for 2025 and 2024, respectively, reflecting higher net income, the impact of tax-exempt income, as well as the impact of limited partnership investments and related tax credits, discussed below. The Company’s effective federal corporate income tax rate was 7.0% and 4.6% for 2025 and 2024, respectively.
Previous wording
Amortization expense related to limited partnership investments included as a component of income tax expense amounted to $1.7 million and $1.4 million for the years ended December 31, 2024 and 2023, respectively. These investments provide tax benefits, including tax credits. Low income housing tax credits with respect to limited partnership investments are also included as a component of income tax expense and amounted to $1.8 million and $1.4 million for the years ended December 31, 2024 and 2023, respectively. See Note 10 to the Company's consolidated financial statements.
Current wording
Amortization expense related to limited partnership investments included as a component of income tax expense amounted to $1.8 million and $1.7 million for the years ended December 31, 2025 and 2024, respectively. These investments provide tax benefits, including tax credits. Low income housing tax credits with respect to limited partnership investments are also included as a component of income tax expense and amounted to $1.9 million and $1.8 million for the years ended December 31, 2025 and 2024, respectively. See Note 10 to the Company's consolidated financial statements.
Previous wording
At December 31, 2024, the Company had total consolidated assets of $1.53 billion, including gross loans and loans held for sale (total loans) of $1.16 billion, deposits of $1.17 billion and stockholders' equity of $66.5 million. The Company’s total assets increased $59.5 million, or 4.0%, from $1.47 billion at December 31, 2023.
Current wording
At December 31, 2025, the Company had total consolidated assets of $1.62 billion, including gross loans and loans held for sale (total loans) of $1.18 billion, investment securities AFS of $326.3 million, deposits of $1.21 billion, borrowed funds of $286.5 million, subordinated notes of $16.3 million and stockholders' equity of $80.9 million. The Company’s total assets increased $88.8 million, or 5.8%, from $1.53 billion at December 31, 2024.
Previous wording
Net loans and loans held for sale increased $128.9 million, or 12.6%, to $1.16 billion, or 75.6% of total assets, at December 31, 2024, compared to $1.03 billion, or 69.9% of total assets, at December 31, 2023. (See Loan Portfolio below.)
Current wording
Net loans and loans held for sale increased $17.1 million, or 1.5%, to $1.17 billion, or 72.5% of total assets, at December 31, 2025, compared to $1.16 billion, or 75.6% of total assets, at December 31, 2024. (See Loan Portfolio below.)
Previous wording
Total deposits decreased $136.7 million, or 10.5% to $1.17 billion at December 31, 2024, from $1.31 billion at December 31, 2023. There were decreases in noninterest bearing deposits of $24.9 million, or 9.9%, interest bearing deposits of $50.8 million, or 6.6%, and in time deposits of $60.9 million, or 21.1% .
Current wording
Total deposits increased $46.1 million, or 3.9% to $1.21 billion at December 31, 2025, from $1.17 billion at December 31, 2024. There were increases in noninterest bearing deposits of $891 thousand, or 0.4%, interest bearing deposits of $11.1 million, or 1.6%, and in time deposits of $34.1 million, or 14.9% .
Previous wording
Borrowed funds at December 31, 2024 consisted of FHLB advances of $259.7 million. Borrowed funds at December 31, 2023 were $65.7 million and consisted of $55.7 million of FHLB advances and $10.0 million of borrowings from the FRB. (See Borrowings on page 43.)
Current wording
Borrowed funds consisted of FHLB advances of $286.5 million and $259.7 million at December 31, 2025 and 2024, respectively. (See Borrowings on page 44.)
Previous wording
Total stockholders’ equity increased $673 thousand, or 1.0%, from $65.8 million at December 31, 2023 to $66.5 million at December 31, 2024. (See Capital Resources on pages 45 to 46.)
Current wording
Total stockholders’ equity increased $14.4 million, or 21.6%, from $66.5 million at December 31, 2024 to $80.9 million at December 31, 2025. (See Capital Resources on pages 46 to 47.)
Previous wording
Loans Held for Sale and Loan Portfolio. The Company's gross loan portfolio (including loans held for sale) increased $129.6 million, or 12.6%, to $1.16 billion, representing 76.0% of assets at December 31, 2024, from $1.03 billion, representing 70.2% of assets at December 31, 2023. The Company's loans consist primarily of adjustable-rate and fixed-rate mortgage loans secured by one-to-four family, multi-family residential or commercial real estate. Real estate secured loans represented $1.01 billion, or 87.3% of total loans, at December 31, 2024 compared to $911.5 million, or 88.4% of total loans, at December 31, 2023. The net change in the Company's loan portfolio from December 31, 2023 (see table below) resulted primarily from an increase in the volume of residential, commercial real estate, commercial construction, and municipal loans originated. There was no material change in the Company's lending programs or terms during 2024.
Current wording
Loans Held for Sale and Loan Portfolio. Total loans (including loans held for sale) increased $18.0 million, or 1.5%, to $1.18 billion, representing 72.9% of assets at December 31, 2025, from $1.16 billion, representing 76.0% of assets at December 31, 2024. The Company's loans consist primarily of adjustable-rate and fixed-rate mortgage loans secured by one-to-four family, multi-family residential or commercial real estate. Real estate secured loans represented $1.03 billion, or 87.2% of total loans, at December 31, 2025 compared to $1.01 billion, or 87.3% of total loans, at December 31, 2024. The net change in the Company's loan portfolio from December 31, 2024 (see table below) resulted primarily from an increase in the volume of revolving residential, commercial real estate and municipal loans. There was no material change in the Company's lending programs or terms during 2025.
Previous wording
The composition of the Company's loan portfolio, including loans held for sale, were as follows as of December 31:
Current wording
The composition of the Company's loan portfolio, including loans held for sale, was as follows as of December 31:
Previous wording
The Company originates and sells qualified residential mortgage loans in various secondary market avenues, with a majority of sales made to the FHLMC/Freddie Mac, generally with servicing rights retained. At December 31, 2024, the Company serviced a $1.16 billion residential real estate mortgage portfolio, of which $5.2 million was held for sale and approximately $684.8 million was serviced for unaffiliated third parties. This compares to a residential real estate mortgage servicing portfolio of $1.07 billion at December 31, 2023, of which $3.1 million was held for sale and approximately $646.5 million was serviced for unaffiliated third parties. Loans held for sale are accounted for at the lower of cost or fair value and are reviewed by management at least quarterly based on current market pricing.
Current wording
The Company originates and sells qualified residential mortgage loans in various secondary market avenues, with a majority of sales made to the FHLMC/Freddie Mac, generally with servicing rights retained. At December 31, 2025, the Company serviced a $1.21 billion residential real estate mortgage portfolio, of which $4.2 million was held for sale and approximately $734.8 million was serviced for unaffiliated third parties. This compares to a residential real estate mortgage servicing portfolio of $1.16 billion at December 31, 2024, of which $5.2 million was held for sale and approximately $684.8 million was serviced for unaffiliated third parties. Loans held for sale are accounted for at the lower of cost or fair value and are reviewed by management at least quarterly based on current market pricing.
Previous wording
The Company sold $113.5 million of qualified residential real estate loans originated during 2024 to the secondary market compared to sales of $75.6 million during 2023. Residential mortgage loan origination activity was strong throughout 2024. Despite the low housing inventory and higher interest rates, purchase activity in the Company's markets is stable with continued construction loan activity. The Company originates and sells FHA, VA, and RD residential mortgage loans, and also has an Unconditional Direct Endorsement Approval from HUD which allows the Company to approve FHA loans originated in any of its Vermont or New Hampshire locations without needing prior HUD underwriting approval. The Company sells FHA, VA and RD loans as originated with servicing released. Some of the government backed loans qualify for zero down payments without geographic or income restrictions. These loan products increase the Company's ability to serve the borrowing needs of residents in the communities served, including low and moderate income borrowers, while the loan sales and government guaranty mitigates the Company's exposure to credit risk.
Current wording
The Company sold $143.5 million of qualified residential real estate loans originated during 2025 to the secondary market compared to sales of $113.5 million during 2024. Residential mortgage loan origination activity was strong throughout 2025. Despite low housing inventory and higher interest rates, purchase activity in the Company's markets is stable, with continued construction loan activity. The Company originates and sells FHA, VA, and RD residential mortgage loans, and also has an Unconditional Direct Endorsement Approval from HUD which allows the Company to approve FHA loans originated in any of its Vermont or New Hampshire locations without needing prior HUD underwriting approval. The Company sells FHA, VA and RD loans as originated with servicing released. Some of the government backed loans qualify for zero down payments without geographic or income restrictions. These loan products increase the Company's ability to serve the borrowing needs of residents in the communities served, including low and moderate income borrowers, while the loan sales and government guaranty mitigates the Company's exposure to credit risk.
Showing the first 40 of 80 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Net unrealized losses in the Company's AFS investment securities portfolio were $33.1 million at December 31, 2025 compared to net unrealized losses of $43.6 million at December 31, 2024. The Company's accumulated OCI component of stockholders' equity at December 31, 2025 and 2024 reflected cumulative net unrealized losses on investment securities of $25.9 million and $34.0 million, respectively. There were no investment securities classified as HTM or as trading at December 31, 2025 or 2024.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Note 7, Allowance for Credit Losses on Loans and Off-Balance Sheet Credit Exposures to the Company's financial statements. The Company's ACL on loans was $7.7 million and $6.6 million at December 31, 2024 and December 31, 2023, respectively.
Previous report — wording carried elsewhere
There were no investment securities classified as HTM or as trading at December 31, 2024 or 2023. Investment securities classified as AFS are marked-to-market, with any unrealized gain or loss after estimated taxes charged to the equity portion of the balance sheet through the accumulated OCI component of stockholders' equity.