Item 1: Business 4-16 Item 2:
ITEM 2: PROPERTIES
The Bank's principal office is located at 66 Main Street in Ellsworth,
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Maine. The main office building consists of three floors, all of which are utilized by the Bank for banking facilities and administrative offices. The principal office includes a separate drive-up facility and parking lot. In August, 1981, plans were finalized for the construction of an 8,000 square foot addition to our existing building. Completed in November of 1982, it provided new and enlarged customer service/teller area with street level access. During 1982 and 1983, the existing building also received extensive renovation and remodeling, tying it in to the new addition. The project was completed in July of 1983. In April, 1985, the Bank opened the first automated drive-up in Downeast Maine. The automated teller machine is adjacent to its drive-up facility located at 66 Main Street, in Ellsworth, Maine. In October, 1985, our new branch in Somesville, Maine opened. The site is a high traffic area and holds excellent promise for attracting new accounts and servicing existing ones. In 1988, the Main Office began construction of an addition to its existing building that would house loan operations. In September, 1989, construction was completed on the addition. In May, 1992, the bank opened a trust office in Bangor (Penobscot County) to serve trust customers in that city and surrounding areas. In May 1995, the Bank elected not to renew its lease for its Bangor office. In addition, the Bank owns the following properties:
(a) The Bank's Cherryfield office located on Church Street in Cherryfield, Maine. A major renovation was undertaken at Cherryfield in 1983, approximately doubling its size. These alterations were completed in January of 1984.
(b) The Bank's Jonesport office located on Main Street in Jonesport, Maine.
(c) The Bank's Blue Hill office located on Main Street in Blue Hill, Maine. During 1989, the branch was renovated to include an office for the Assistant Manager.
(d) The Bank's Stonington office located on Atlantic Avenue in Stonington, Maine. The Stonington office was renovated and expanded in 1980.
(e) The Bank's Milbridge office located on Main Street in Milbridge, Maine. In 1987, management decided to replace the Milbridge Branch with a larger up-to-date facility, located at the same site. The new branch is now completed and has been open for business since April 1988.
(f) The Bank purchased in 1989 a parcel of land located on Route 3 in Ellsworth with the possible intention of constructing a new branch. There are no plans for construction at this time.
All of the Bank's offices include drive-up facilities.
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In addition to the above properties, which are owned by the bank, the Bank leases the following properties:
(a) The bank leases its branch office at the Ellsworth Shopping Center, High Street Ellsworth, Maine, from Ellsworth Shopping Center, Inc., a Maine Corporation with principal offices in Ellsworth, Maine. The current lease will expire in May of 1997.
(b) The Bank leases its Machias office which is located on Dublin Street in Machias, Maine. The premises are owned by Hannaford Bros., Inc. of South Portland, Maine, and are leased to Gay's Super Markets, Inc., under a lease dated July 26, 1975. The Bank subleased the premises from Gay's Super Markets, Inc., under a sublease which expires in April of 2001. The bank has the right to extend the sublease for three additional five year terms.
(c) The Bank leases its Somesville Branch Office which is located on Route 102 in Somesville, Maine. The land and premises are owned by A.C. Fernald Sons, Inc., Mount Desert, Maine. The current lease expires on March 24, 2005, with an option to renew for an additional 20 years.
(d) The Bank leases it Castine branch office located on Main Street from Michael Tonry, Castine, Maine. The current lease expires on February 1, 1999 with the right to extend the lease for an additional 4 year term.
All premises are considered to be in good condition and currently adequate for the purposes for which they are utilized.
ITEM 3:
ITEM 3: LEGAL PROCEEDINGS
There are no material pending legal proceedings other than ordinary routine litigation incidental to the business.
ITEM 4:
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
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PART II
ITEM 5:
ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
A. MARKET INFORMATION
The common stock, $25 par value of the Company, is not listed on any exchange nor actively traded. Since the Company is not aware of the price of all trades, the price is established by determining what a willing buyer will pay a willing seller. The stock prices shown below are based upon trades that the Bank has knowledge of from Paine Webber and represent a range of the high and low bids for each quarter ended in 1995 and 1996.
1st 2nd 3rd 4th Quarter Quarter Quarter Quarter
1995 $160.00/175.00 $125.00/169.26 $150.00/167.00 $167.00/170.00 1996 $170.00/180.00 $180.00/210.00 $198.00/210.00 $200.00/235.00
B. HOLDER
As of March 1, 1997 there were approximately 665 stockholders of record.
C. DIVIDENDS
1. History
The following table shows the cash dividends declared by Union Bankshares Company on its common stock, $25 par value:
1996 1995 First Quarter $1.00 $ .75 Second Quarter 1.00 1.00 Third Quarter 1.00 1.00 Fourth Quarter 1.00 1.00 Total $4.00 $3.75
Cash dividends declared per common share $4.00 $3.75
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Item 6:
Item 6: Selected FINANCIAL DATA (in thousands)
Set forth below is a Consolidated Summary of Operations for the Company for each of the last five years.
1996 1995 1994 1993 1992
INTEREST AND DIVIDEND INCOME Int and Fees on Loans $ 9,192 $ 8,781 $ 7,501 $ 7,324 $ 8,824 Int on Fed Funds Sold 76 424 209 263 176 Int on AFS Securities 5,256 4,230 4,447 0 0 Int on HFS Securities 0 0 0 4,199 4,025 Int on HTM Securities 244 420 520 607 674
Total Interest Earned $14,768 $13,855 $12,677 $12,393 $13,699
INTEREST EXPENSE Interest on Deposits 5,174 4,767 4,084 4,556 5,876 Interest on C/D's $100,000 and Over 227 274 101 169 273 Interest on Short-term Borrowings 229 11 2 1 1
Total Interest Expense 5,630 5,052 4,187 4,726 6,150
NET INTEREST INCOME 9,138 8,803 8,490 7,667 7,549 Provision for loan losses 120 30 0 30 1,075
Net Interest Income after Loan Provision 9,018 8,773 8,490 7,637 6,474
NONINTEREST INCOME Net Securities Gains 3 3 98 267 1,098 Trust Department 488 444 400 413 381 Service Charges on Deposit Accounts 338 310 311 324 331 Other Income 1,378 1,232 1,271 1,255 1,189
Total Noninterest Income 2,207 1,989 2,080 2,259 2,999
Income Before Non-Interest Expenses 11,225 10,762 10,570 9,896 9,473
NONINTEREST EXPENSE Salaries and Employee Benefits 4,010 4,019 3,967 3,497 3,239 Net Occupancy Expense 845 777 767 780 712 Equipment Expense 233 201 180 173 190 FDIC Insurance 2 185 345 349 387 Other Expenses 2,633 2,277 2,161 2,235 2,430
Total Noninterest Expense 7,723 7,459 7,420 7,034 6,958
INCOME BEFORE TAXES 3,502 3,303 3,150 2,862 2,515
Income Taxes 1,050 885 796 797 595
Income Before Cumulative Effect of Change in Accounting Principle 2,452 2,418 2,354 2,065 1,920
Cumulative Effect of Change in Accounting for Income Taxes 0 0 0 68 0
NET INCOME $2,452 $2,418 $2,354 $2,133 $1,920
Net Income Per Common Share $12.14 $11.98 $11.66 $10.55 $ 9.51
Cash Dividends Declared Per Common Share $ 4.00 $ 3.75 $ 3.00 $ 3.00 $ 2.26
The above summary should be read in conjunction with the related consolidated financial statements and notes thereto for the years ended December 31, 1996, 1995, 1994, 1993 and 1992, and with Management's discussion and analysis of financial condition.
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ITEM 7:
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information contained in the section captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 1996 Annual Report is incorporated herein by reference.
ITEM 8:
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
(a) The financial statements required are contained in the Company's 1996 Annual Report and are incorporated herein by reference.
ITEM 9:
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Previously reported in 8K filing in 1995.
PART III
ITEM 10:
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information called for by this Item (and Items 11, 12, and 13 below) is incorporated by reference from the registrant's definitive Proxy Statement dated March 28, 1997 for its regular annual meeting of stockholders to be held April 17, 1997, where it appears under the headings "VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF AND ELECTION OF DIRECTORS."
ITEM 11:
ITEM 11: EXECUTIVE COMPENSATION
See Item 10.
ITEM 12:
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
See Item 10.
ITEM 13:
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See Item 10.
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PART IV
ITEM 14:
ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Financial Statements and Exhibits
(1) The financial statements listed below are filed as part of this report; such financial statements (including report thereon and notes thereto) are included in the registrant's Annual Report to stockholders for its fiscal year ended December 31, 1996 (a copy of which is being filed as Exhibit 13 hereto), and are incorporated herein by reference.
Exhibit 13 Page Number Consolidated Balance Sheets December 31, 1996 and 1995 34 Consolidated Statements of Income For the years ended December 31, 1996, 1995, 1994 35 Consolidated Statements of Changes in Stockholders' Equity For the years ended December 31, 1996, 1995, 1994 36 Consolidated Statements of Cash Flow For the years ended December 31, 1996, 1995, 1994 37 - 38 Notes to Consolidated Financial Statements 39 - 50 Independent Auditors Opinion 51
Supplementary schedules are omitted as they are not required or included in the Annual Report to shareholders.
(2) Exhibits required by Item 601 - see Item 14(c)
(b) Reports on Form 8-K
During the registrant's fiscal quarter ended December 31, 1996, the registrant was not required to and did not file any Reports on Form 8-K.
(c) Exhibits Exhibit # Description
* 3 Articles of Incorporation and By-laws of Union Bankshares Company
* 10.1 Employee benefit plan for the employees of Union Trust Company
Pension Plan for the employees of Union Trust Company
401(k) Profit Sharing Plan for the employees of Union Trust Company
Stock Purchase Plan for the employees of Union Trust Company
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11 Computation of earnings per share, is incorporated herein by reference to Note 1 to the Consolidated Financial Statements on page 39 of the 1996 Annual Report to Stockholders attached hereto as Exhibit 13.
12 Statement for computation of ratios is incorporated herein by reference to "Part I, Item 1 - Five Year Summary."
13 The registrant's Annual Report to Stockholders for its fiscal year ended December 31, 1996. This exhibit, except for those portions thereof expressly incorporated by reference into the Form 10-K annual report, is furnished for the information of the Commission only and is not to be "filed" as part of the report.
*21 Subsidiary information is incorporated herein by reference to "Part I, Item 1 - Business".
99.1 Report of Berry, Dunn, McNeil & Parker.
99.2 Report of Baker, Newman and Noyes
*Incorporated herein by reference into this document from the Exhibits to Form S-1, Registration Statement, initially filed on June 15, 1984, Registration No. 2-90679.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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 COMPANY UNION BANKSHARES COMPANY
Peter A. Blyberg, President Sally J. Hutchins and Chief Executive Officer Vice President, Treasurer and Controller
March 27, 1997
Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
Arthur J Billings, Director Peter A Blyberg, Director Robert S Boit, Director Richard C Carver, Director Peter A Clapp, Director Sandra H Collier, Director Robert B Fernald, Director Douglas A Gott, Director David E Honey, Director Delmont N Merrill, Director Thomas R Perkins, Director Casper G Sargent, Director John V Sawyer, II, Director Stephen C Shea, Director Richard W Teele, Director Paul L Tracy, Director Richard W Whitney, Director