Union Bankshares, Inc
Annual Report 2015

Plain-text annual report

‘15 Year in reviewMarket for Union Bankshares Common Stock On March 8, 2016, there were 4,458,372 shares of common stock outstanding held by 544 stockholders of record. The number of stockholders does not reflect the number of beneficial owners, including persons or entities who may hold the stock in nominee or “street name.” Union Bankshares’ common stock is listed on the NASDAQ Global Market trading under the symbol UNB. For shareholder assistance please contact Kristy Adams Alfieri at 802.888.0982 or our Transfer Agent, Broadridge Corporate Issuer Solutions, Inc., at 866.321.8022. UNION BANKSHARES COMMON STOCK 2015 2014 HIGH LOW DIVIDENDS HIGH LOW DIVIDENDS First Quarter First Quarter $26.68 $23.75 $0.27 $24.75 $22.12 $0.26 Second Quarter Second Quarter $28.06 $25.16 $0.27 $24.97 $22.93 $0.26 Third Quarter Third Quarter $27.07 $25.50 $0.27 $25.88 $23.97 $0.26 Fourth Quarter Fourth Quarter $28.05 $26.06 $0.27 $24.77 $23.00 $0.26 to our SHAREHOLDERS ApRIl 7, 2016 We are pleased to report our earnings for the year ended December 31, 2015. Net income for the year was $7.9 million, or $1.77 per share, compared to $7.7 million, or $1.73 per share for 2014. This represents the fourth year in a row we have been able to report record earnings. During 2015 total assets grew modestly to $628.9 million from $624.1 million at the end of 2014. Total loans increased 3.2% to $506.7 million as of December 31, 2015, while we finished 2015 with $560.4 million in deposits. While we tend to shy away from hyperbole, we do think it appropriate to remind our shareholders of their company’s relative performance compared to its peers. For banks in New England with assets between $300 Million and $1 Billion our three year average Return on Equity (years ended 2015, 2014, and 2013) surpassed all of our peers. We are proud of this accomplishment and thank our staff for their efforts in generating sound financial performance. 2015 was another year of working and completing large projects. Our IT team with much assistance replaced all of the bank’s desktop computers and servers, some 300 units all told. We also completed three initiatives related to our re-branding project; redesigning all of our brochures, business cards, and letterhead; replacing our branch signage featuring our new logo; and unveiling our redesigned website. Finally, during 2015 we established our Customer Care Team, where we answer customer phone calls, diagnose their needs, solve most of their concerns, and route their calls to topic experts if necessary, all with a personal touch. The beginning of 2015 brought much snow and with it a strong tourism season. Spring brought us a late but productive Maple Sugar season, followed by a summer with excellent weather and an autumn with one of the most vivid foliage displays in memory. Old-timers around here might not have predicted the winter of 2015/2016, but they knew too much of a good thing might lead to bad times. Christmas Eve brought 60 degree temperatures, melting the best efforts of our local, world class snowmakers. Winter was pretty much downhill from there, with cross country ski areas and snowmobile related businesses taking the worst of it. The winter season that began in 2015 will go down as one of the worst snow seasons on record. Early indications are that while businesses have struggled, most will survive, and all of us are looking forward to a speedy end to mud season. Many observers opine that 2016 will be even more difficult for the banking industry as the Fed waffles on tighten- ing monetary policy and more of Dodd Frank regulations are implemented. Despite these challenges we remain confident that the culture and team we have built over the years will enable us to continue to provide sound returns to our shareholders while maintaining our community banking mission. Sincerely, Kenneth D. Gibbons Chairman David S. Silverman President & CEO 2015 Year In Review 1 2 2015 Year In Review AT OR fOR THE yEARS ENDED DECEMBER 31 2015 2014 2013 2012 FINANCIAl HIGHlIGHTS Balance Sheet Data Total assets (Dollars in thousands, except per share data) $628,879 $624,063 $585,443 $577,256 Investment securities 59,327 52,964 45,492 26,126 Loans, net of unearned income Allowance for loan losses Deposits Borrowed funds Stockholders’ equity1 506,656 491,076 465,123 455,298 (5,201) 560,408 9,564 53,568 (4,694) 552,064 15,118 51,434 (4,647) 518,354 13,216 49,820 (4,657) 509,993 15,747 45,046 Income Statement Data Total interest and dividend income Total interest expense Net interest and dividend income Provision for loan losses Noninterest income $25,144 $24,852 $24,481 $25,028 (2,025) 23,119 (550) 9,792 (2,155) 22,697 (345) 8,909 (2,459) 22,022 (305) 8,509 (3,351) 21,677 (660) 10,525 Noninterest expenses (22,304) (21,594) (21,229) (23,035) Income before provision for income taxes provision for income taxes Net income 10,057 9,667 8,997 8,507 (2,179) $7,878 (1,973) $7,694 (1,862) $7,135 (1,663) $6,844 Per Common Share Data Net income2 Cash dividends paid Book value1 Weighted average number of shares outstanding Number of shares outstanding $1.77 1.08 12.02 $1.73 1.04 11.54 $1.60 1.01 11.17 $1.54 1.00 10.11 4,458,037 4,458,393 4,457,261 4,457,029 RETURN ON AvERAgE EqUITy SOURCE: SNl FINANCIAl lC pEER BANKS $500M - $1B (SNl) 20% 15% 10% 5% 0% -5% 2010 Year Ended December 31, 2012 2013 2011 2014 2015 RETURN ON AvERAgE ASSETS SOURCE: SNl FINANCIAl lC 1.5% pEER BANKS $500M - $1B (SNl) 1.0% .5% 0% -.5% -1% 4,457,177 4,458,430 4,458,359 4,456,081 2010 Year Ended December 31, 2012 2013 2011 2014 2015 1 Stockholders’ equity includes unrealized gains or losses, net of applicable income taxes, on investment securities classified as “available-for-sale” and includes the unfunded liability for pension benefits, net of taxes for the defined benefit pension plan. 2 Computed using the weighted average number of shares outstanding for the period. 2015 Year In Review 3 4 2015 Year In Review Commercial and Municipal Services For years, Union Bank has been providing commercial and municipal loans, along with a full array of cash management services, to businesses, municipalities and non-profit organizations located in northern Vermont and New Hampshire. Our experienced Commercial lending Team offers one of the best assets available to our customers; banking locally, where lending decisions are made at the local branch level and each customer receives personalized, individual help. We offer a wide variety of loan products and deposit services to help businesses succeed. Mortgage Lending 2015 was another outstanding year for mortgage loan originations. In fact we had record performance in the ongoing revenue earned from servicing mortgage loans and near-record performance in the volume of mortgage loans originated. Repeat customers, client referrals, strong relationships with builders and realtors, attractive products and outstanding customer service helped drive this successful performance. The positive impact that Union Bank has made in the lives of such first time home buyers has been consistently recognized by the FDIC which rated Union Bank as Outstanding for our Community Reinvestment activities. In addition, Union Bank was once again recognized by the US Department of Agriculture as its Rural Development (RD) Home loan lender of the Year for Vermont. Consumer Deposit Accounts Union Bank offers a range of deposit options from our school-based Save for Success program to a program for our larger depositors. All customers can benefit from our recently upgraded ATM network, our mobile check deposit feature and our arrangement with the Allpoint ATM network where Union Bank customers have totally fee-free access to over 55,000 ATM’s in the US, Canada and other countries. For those customers who bring larger deposit balances to the bank, we offer Advantage Banking. This package of services rewards and helps to retain these important depositors who contribute substantially to our ability to fund our extensive community lending activities. participating customers earn special popular bank services such as complementary checks, ATM surcharge refunds, and higher CD rates. For more information, please contact our Customer Care Team at 1.800.753.4343. Customer Service Investments Union Bank’s ongoing strong financial performance allows us to make regular strategic investments in our systems. Sometimes the benefits of these investments are readily apparent to customers, but often the improvements entail behind-the-scenes work to strengthen the integrity and performance of our banking network. In 2015 we made substantial investments in our computer systems and software to accelerate processing, enhance reliability, bolster security and reduce risk. A visible representation of this was the establishment of our Customer Care Team to better handle phone support. When we installed a new phone system, we consciously elected to not institute an automated greeting to route customer calls based on touch tone responses. Instead customers reach lisa, Jenn, Heather or our other service team members directly after an average wait time of just under nine seconds. Stay Local. Go Far. In 2015 we introduced a freshened version of the Union Bank brand, a brand that has been synonymous with reliable, responsive community-focused banking services for 125 years. The revised branding was reflected in a range of traditional advertisements as well as online videos and social media initiatives. Our message of Stay local Go Far reinforces the reality that in an era of impersonal mega-banks, a capable community bank is likely a more effective and less frustrating way to meet your banking needs. While the number of Vermont and New Hampshire community banks continues to shrink, we remain a vibrant community bank serving the financial needs of our local communities. DIRECTORS Kenneth D. Gibbons - Chairman Steven J. Bourgeois John M. Goodrich Timothy W. Sargent David S. Silverman John H. Steel Schuyler W. Sweet Neil J. Van Dyke OFFICERS Kenneth D. Gibbons - Chairman David S. Silverman - President & CEO Karyn J. Hale - Vice President/Treasurer/CFO John H. Steel - Secretary Kristy Adams Alfieri - Assistant Secretary Jeffrey G. Coslett - Vice President DIRECTORS Kenneth D. Gibbons - Chairman Dawn D. Bugbee Steven J. Bourgeois John M. Goodrich Timothy W. Sargent David S. Silverman John H. Steel Schuyler W. Sweet Neil J. Van Dyke REGIONAl ADVISORY BOARD MEMBERS Michael R. Barrett – St. Johnsbury Joel S. Bourassa - Northern New Hampshire Steven J. Bourgeois - St. Albans Stanley T. Fillion - Northern New Hampshire Rosemary H. Gingue - St. Johnsbury John M. Goodrich - St. Johnsbury Richard Isabelle - St. Johnsbury Christopher M. Knapp - Northern New Hampshire Coleen K. Kohaut - St. Albans Justin p. lavely - St. Johnsbury Daniel J. luneau - St. Albans Mary K. parent – St. Johnsbury Samuel H. Ruggiano - St. Albans David S. Silverman - All Schuyler W. Sweet - Northern New Hampshire OFFICERS Kristy Adams Alfieri - Assistant Secretary Diana M. Ashley - Assistant Treasurer Stacey M. Belanger - Assistant Treasurer Rhonda l. Bennett - Vice President Karen l. Blanchard Smith - Assistant Vice President Sherrie A. Bull - Vice President Stacey l. B. Chase - Assistant Vice President Barbara J. Churchill - Assistant Treasurer Everett C. Comstock - Assistant Treasurer Jeffrey G. Coslett - Senior Vice President Michael C. Curtis - Vice President Jennifer M. Degree - Assistant Vice President Ronald C. Dion - Assistant Vice President Jessica M. Eastman - Vice President Charles W. Goldstein - Assistant Vice President Don D. Goodhue - Vice President Jonathan J. Gould - Senior Vice President Melissa A. Greene - Vice President paul E. Grogan - Facilities Officer Karyn J. Hale - Senior Vice President & CFO Randy l. Hannett - Assistant Treasurer Claire A. Hindes - Vice President Robert D. Hofmann - Senior Vice President patricia N. Hogan - Senior Vice President lura l. Jacques - Vice President lynne p. Jewett - Vice President Therese H. Johansson - Vice President Stephen H. Kendall - Senior Vice President Susan F. lassiter - Vice President Edward l. levite - Senior Loan Originator Carrie R. locklin - Vice President Bonnie J. losty - Vice President Jessica l. Machia - Assistant Treasurer John l. Malm - Vice President Grace E. Maniatty - Assistant Treasurer Melynda J. Miller - Assistant Treasurer Samantha A. Norrie - Assistant Treasurer Tina l. Norton - Assistant Vice President Karen Carlson Noyes - Vice President Bradley S. prior - Assistant Vice President Craig S. provost - Vice President Robert J. Richardson - Vice President Christine A. Sheley - Regional Vice President David S. Silverman - President & CEO Abbie l. Small - Assistant Treasurer Judy R. Smith - Vice President Curtis C. Swan - Vice President Carrie W. Tallman - Assistant Treasurer linda M. Watson - Assistant Treasurer Melyssa S. Whitcomb - Assistant Vice President Suzanne M. Whitney - Assistant Treasurer lorraine MG Willett - Vice President 2015 Year In Review 5 6 2015 Year In Review VERMONT Danville Fairfax 421 Route 2 East Jct. Routes 104 & 128 802.684.2211 802.849.2600 Hardwick 103 VT Route 15 West 802.472.8100 Jeffersonville 44 Main Street 802.644.6600 Johnson 198 lower Main Street 802.635.6600 lyndonville 183 Depot Street 802.626.3100 Newport loan Center Morrisville 325 East Main Street 802.334.0750 20 lower Main Street 65 Northgate plaza 802.888.6600 802.888.6860 St. Albans 15 Mapleville Depot 802.524.9000 St. Johnsbury 364 Railroad Street 802.748.3131 325 portland Street 802.748.3121 S. Burlington loan Center 30 Kimball Avenue Stowe 47 park Street 802.865.1000 802.253.6600 NEW HAMpSHIRE Groveton lincoln littleton 3 State Street 135 Main Street 263 Dells Road 76 Main Street N. Woodstock 155 Main Street 603.636.1611 603.745.4000 603.444.7136 603.444.5321 603.745.2488 UBlOCAl.com 1.800.753.4343 (toll free) 

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