Morrisville, VT – October 15, 2025 – Union Bankshares, Inc. (NASDAQ: UNB), the parent company of Union Bank, today announced a regular quarterly cash dividend of $0.36 per share. This declaration underscores the bank's strong financial health and its unwavering commitment to delivering consistent returns to its shareholders, set against a backdrop of impressive growth in the third quarter of 2025. The dividend is payable on November 6, 2025, to shareholders of record as of October 25, 2025, with an ex-dividend date of October 23, 2025.

This steady payout, maintained at $0.36 per share since the first quarter of 2023, positions Union Bankshares (NASDAQ: UNB) as an attractive option for income-focused investors, offering an annual yield of approximately 5.8%. The announcement comes as the company reports significant increases in net income, loan activity, and overall asset expansion, signaling a period of robust operational success and strategic financial management.

Detailed Coverage: A Dividend Supported by Solid Fundamentals

Union Bankshares' decision to maintain its quarterly dividend is firmly rooted in its exceptional financial performance for the quarter ended September 30, 2025. The company reported a consolidated net income of $3.4 million for Q3 2025, a substantial leap from $1.3 million in the same period last year. Year-to-date, net income through September 30, 2025, reached $8.3 million, up from $5.8 million in the comparable 2024 period.

Key financial metrics driving this positive momentum include:

• Net Interest Income Growth: A significant 18.3% increase in net interest income to $11.2 million in Q3 2025, primarily fueled by higher yields on assets and expanded loan volumes.
• Loan and Asset Expansion: Loans grew by 5.1% year-over-year, reaching $1.18 billion as of September 30, 2025. Total assets also climbed to $1.57 billion, reflecting strategic growth.
• Improved Asset Quality: Despite increased loan activity, the allowance for credit losses on loans rose by 14.0% over the prior year, indicating proactive risk management. Simultaneously, credit loss expense declined to $313,000 in Q3 2025, underscoring sound asset quality.
• Enhanced Shareholder Value: The company's book value per share increased by a healthy 6.1% to $16.95, further reflecting the company's robust financial health.

The dividend declaration was formally made by the Board of Directors of Union Bankshares, Inc. David S. Silverman, President & CEO, lauded the company's strong performance, attributing it to the dedication of the team and the trust of its customers. Initial market reactions have been largely positive, with TipRanks' AI Analyst rating UNB as "Outperform" and at least one analyst issuing a "Buy" rating with a price target of $29.00, affirming confidence in the company's valuation and financial strength, despite some analyst notes on high leverage as a potential risk.

Company Impact: Winners and Losers in the Regional Banking Arena

Union Bankshares' (NASDAQ: UNB) strong financial performance and consistent dividend payout create clear winners and losers within its operational sphere and the broader regional banking sector.

Union Bankshares (NASDAQ: UNB) Itself Stands as a Clear Winner:

• Shareholders and Income Investors: The consistent $0.36 quarterly dividend, translating to an attractive annual yield, makes UNB a compelling investment for those seeking stable income. This sustained payout reinforces investor confidence in the company's financial stability and its ability to generate sustainable earnings.
• Enhanced Valuation and Market Perception: Robust financial results, including rising net income, increased loan activity, and improved stockholder equity, contribute to a positive market perception. Analyst "Buy" ratings and "Outperform" assessments suggest a healthy valuation and strong investor interest.
• Strategic Growth and Market Positioning: UNB's disciplined approach to asset growth and effective expense management positions it well for future expansion. The bank aims to leverage its community connections to expand its market share in northern Vermont and New Hampshire. Strategic investments in digital transformation are also crucial for competing effectively.

Potential Losers Among Direct Competitors:

• Less Stable Regional Banks: UNB's attractive dividend and strong performance may draw investor capital away from regional banks with weaker financial health or inconsistent dividend policies. Competitors struggling with profitability may find it challenging to match UNB's payouts, potentially leading to dividend cuts that negatively impact their market standing.
• Banks with High Commercial Real Estate (CRE) Exposure: While UNB maintains strong asset quality, regional banks with concentrated exposures to vulnerable sectors like office real estate could face increased scrutiny and challenges, especially amidst lingering market fears.
• Those Lagging in Digital Transformation: The regional banking sector is undergoing significant digital transformation. Competitors that fail to invest adequately in technology for customer engagement and operational efficiency may fall behind.

Indirect Winners (if they adapt or are also strong):

• Well-Managed Regional Banks: UNB's success can bolster overall investor confidence in the regional banking sector, benefiting other well-managed institutions.
• Banks Engaged in M&A: The sector is consolidating. UNB's strong position could make it an attractive acquisition target or empower it to acquire smaller banks, leading to shifts in market share.

The mechanisms of impact include investor sentiment, where a "flight to quality" might direct capital towards strong performers like UNB. Competitive pressures will force other banks to improve their performance and dividend policies, while shifts in market share will occur as stronger banks expand and weaker ones consolidate or decline.

Wider Significance: A Bellwether for Regional Banking Resilience

Union Bankshares' (NASDAQ: UNB) sustained growth and consistent dividend declaration in 2025 carry significant weight beyond its immediate financial statements, serving as a bellwether for the broader regional banking sector. This performance aligns with and reinforces several key industry trends while highlighting critical areas of focus for the future.

Broader Industry Trends: UNB's success is indicative of a potentially favorable environment for regional banks in 2025. This includes:

• Favorable Interest Rate Environment: Anticipated Federal Reserve rate cuts and a re-steepening yield curve are expected to improve net interest margins (NIMs) and stimulate loan demand, particularly for mortgages, reducing borrowing costs for banks.
• Accelerated M&A Activity: After a period of slowdown, consolidation through mergers and acquisitions is projected to increase, driven by a more accommodating regulatory landscape and banks seeking scale and efficiency.
• Attractive Valuations: Many regional bank stocks continue to trade at attractive valuations, presenting opportunities for investors.
• Technological Adoption: Regional banks are increasingly investing in AI, automation, and digital platforms to enhance efficiency, customer experience, and fraud detection.

Despite these tailwinds, challenges persist, including cybersecurity threats, intense competition for deposits, and potential exposures to distressed commercial real estate (CRE).

Ripple Effects on Competitors and Partners: UNB's strong performance generates competitive pressure on its peers, compelling them to maintain or improve their own financial health and dividend policies to attract investors. This stability also boosts overall sector confidence, attracting broader investment into regional banking. As a community bank in Morrisville, Vermont, Union Bankshares (NASDAQ: UNB) plays a vital role in its local communities, and its robust performance ensures continued access to credit for local businesses and support for community development. This commitment to local lending benefits regional economies where larger institutions might not have the same focus. Furthermore, strong regional banks may seek fintech partnerships to leverage innovations in digital platforms and data analytics.

Regulatory or Policy Implications: The performance of banks like UNB interacts with the regulatory landscape. While there's an expectation of potential easing in the regulatory environment for regional banks in 2025, particularly concerning capital requirements and M&A approvals, regulators remain focused on operational resilience, cybersecurity, and data privacy. The lessons from the 2023 bank failures continue to emphasize robust resolution plans and liquidity management. UNB's disciplined approach and strong asset quality position it well to meet these evolving standards. Banks are also increasingly expected to integrate ESG disclosures, monitoring risks within loan portfolios and aligning funding strategies with sustainability goals.

Historical Precedents and Comparisons: The current environment for regional banks echoes post-crisis recovery periods where strong regional players often outperform larger institutions due to their localized focus and conservative lending. The anticipated re-steepening of the yield curve marks a return to a "normal-for-longer" interest rate environment, historically supportive of bank revenue and earnings growth. The recovery and strong performance from institutions like UNB after the regional banking turmoil of 2023 demonstrate the sector's resilience and the ability of well-managed banks to rebound and capitalize on attractive valuations. This also highlights that, unlike larger banks, regional banks have generally avoided the "too-big-to-fail" issues.

What Comes Next: Navigating Growth and Challenges

The path forward for Union Bankshares (NASDAQ: UNB) and the regional banking sector is characterized by both promising opportunities and persistent challenges. As of October 15, 2025, UNB's strong position offers insights into potential short-term and long-term trajectories.

Short-Term Possibilities (next 6-12 months): UNB is well-positioned for continued growth in net interest income due to favorable interest rate dynamics and anticipated increases in loan demand across the U.S. banking industry. Its Q3 2025 loan growth of 5.1% already surpasses the 2024 industry average, indicating a strong ability to capitalize on market opportunities. Regional bank stocks, including UNB, are currently trading at attractive valuations, suggesting potential for multiple expansion as earnings grow. UNB's consistent dividend payout is expected to continue, providing stability for investors. However, challenges such as high deposit costs for midsize banks and geopolitical uncertainties could temper growth.

Long-Term Possibilities (beyond 12 months): Longer-term, the regional banking sector is poised for accelerated M&A activity, offering UNB opportunities for strategic acquisitions to expand its footprint and capabilities. Digital transformation will remain a critical focus, with UNB investing in advanced online and mobile platforms, AI, and potential fintech partnerships. Revenue diversification beyond traditional interest income, including wealth management and investment banking fees, will become increasingly important. UNB's commitment to environmental sustainability could also attract environmentally conscious customers and investors.

Potential Strategic Pivots or Adaptations:

• Enhanced Digital Offerings: Continuous improvement in digital banking services is crucial for UNB and its peers to compete with larger institutions and fintechs.
• Targeted Growth: UNB's focus on organic growth, deepening client relationships, and expanding its presence in Vermont and New Hampshire through new branches and complementary acquisitions is a prudent strategy.
• Proactive Risk Management: Robust risk management, especially concerning commercial real estate (CRE) exposure and potential increases in loan delinquencies, will be critical.
• Navigating Regulatory Changes: Adapting to potential deregulation under a new U.S. presidential administration, while still meeting evolving compliance requirements (e.g., ISO 20022, KYC/AML), will be essential.

Emerging Market Opportunities and Challenges: A "normal-for-longer" or slightly declining interest rate environment could benefit regional banks, but persistent high deposit costs might still pressure net interest margins. Modest U.S. economic growth is anticipated, impacting loan demand and credit quality. Fintech competition continues to demand innovation, and cybersecurity remains a paramount challenge. A potential shift towards deregulation could create a more favorable environment for banks, but also regulatory fragmentation.

Potential Scenarios and Outcomes for Investors:

• Base Case (Moderate Growth and Stability): Continued stable performance and shareholder returns, with UNB's stock price experiencing moderate appreciation, potentially reaching price targets around $24.30-$25.60 in 2025-2026.
• Optimistic Scenario (Accelerated Growth): Significant acceleration in M&A and loan growth, coupled with a favorable economic environment, could drive faster-than-expected growth for UNB, potentially reaching $33.25 by 2030.
• Challenging Scenario (Headwinds Intensify): A sharper economic deceleration, delayed interest rate cuts, or significant loan losses could create headwinds, impacting profitability and stock performance. However, the industry's strong fundamentals are expected to provide resilience.

UNB's attractive valuation, consistent dividend yield, and domestic-focused business model make it a compelling investment, positioning it for potential long-term success despite short-term market fluctuations.

Wrap-Up: Stability in a Dynamic Market

Union Bankshares' (NASDAQ: UNB) recent declaration of a $0.36 quarterly cash dividend, underpinned by its robust financial performance in Q3 2025, serves as a powerful testament to its stability and strategic effectiveness in a continually evolving financial landscape. This event is not merely a corporate announcement but a significant indicator of resilience within the regional banking sector.

Key Takeaways: The core message from UNB's performance is one of disciplined growth and shareholder commitment. The substantial increase in net income, driven by expanded loan activity and net interest income, demonstrates the bank's ability to thrive even amidst economic uncertainties. The consistent dividend payout, maintained since early 2023, reinforces investor confidence in the company's reliable earnings power and prudent management. UNB's improved asset quality and rising book value per share further solidify its strong financial foundation.

Market Moving Forward for Regional Banks: As of October 2025, the regional banking sector is poised for a period of both opportunity and careful navigation. Anticipated lower interest rates from the Federal Reserve are expected to ease funding costs and stimulate loan demand, creating a more favorable operating environment. Attractive valuations and a projected acceleration in M&A activity also present compelling opportunities for growth and consolidation. However, challenges persist, including the ever-present threat of cybersecurity, the need for continuous technological investment, and the complexities of an evolving regulatory landscape. Credit quality normalization and potential exposures to certain commercial real estate segments remain areas of vigilance.

Lasting Impact of Such Stability: The lasting impact of a bank like Union Bankshares (NASDAQ: UNB) demonstrating consistent stability and shareholder returns is profound. It not only enhances investor confidence in UNB itself, potentially lowering its cost of capital and facilitating future growth, but also acts as a positive signal for the broader regional banking sector. Such stability can encourage a "flight to quality" among investors, favoring well-managed institutions with predictable income streams. It also creates competitive pressure, subtly compelling other regional banks to bolster their own financial health and dividend policies to remain attractive. UNB's role as a community bank further ensures continued local economic support and access to vital financial services.

What Investors Should Watch For in Coming Months: Investors should maintain a close watch on several key factors:

1. Federal Reserve's Interest Rate Policy: The pace and magnitude of future interest rate adjustments will directly impact net interest margins and loan demand across the banking sector.
2. Loan Growth and Credit Quality Trends: Monitoring UNB's and its peers' loan growth rates, credit loss provisions, and non-performing loan ratios will provide insights into asset health.
3. Regulatory Shifts: Any changes in banking regulations, particularly concerning capital requirements or M&A, could significantly alter the operating environment for regional banks.
4. Technological Investment and Innovation: Observe how banks continue to invest in digital platforms, AI, and automation to enhance efficiency and customer experience—a critical differentiator in today's market.
5. M&A Activity: The regional banking sector is ripe for consolidation; any announcements could lead to significant shifts in market dynamics.
6. Broader Economic Indicators: GDP growth, inflation, and employment figures will continue to influence consumer and business sentiment, directly affecting loan demand and credit performance.
7. Upcoming Earnings Reports: Beyond Q3, subsequent earnings releases will offer crucial updates on the sustainability of UNB's performance and the sector's trajectory.

By closely tracking these elements, investors can better understand the ongoing health and future potential of Union Bankshares (NASDAQ: UNB) and the dynamic regional banking sector.

This content is intended for informational purposes only and is not financial advice