Union Bankshares Inc: Form 10-Q for the period ended Jun 30, 2026

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

GENERAL

The following discussion and analysis focuses on those factors that, in management's view, had a material effect on the financial position of the Company as of June 30, 2026 and December 31, 2025, and its results of operations for the three and six months ended June 30, 2026 and 2025. This discussion is being presented to provide a narrative explanation of the consolidated financial statements and should be read in conjunction with the consolidated financial statements and related notes and with other financial data appearing elsewhere in this filing and with the Company's 2025 Annual Report. In the opinion of the Company's management, the interim unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments and disclosures necessary to fairly present the Company's consolidated financial position and results of operations for the interim periods presented. Management is not aware of the occurrence of any events after June 30, 2026 which would materially affect the information presented.

Please refer to Note 1 in the Company's unaudited interim consolidated financial statements at Part I, Item 1 of this Report for definitions of acronyms, abbreviations and capitalized terms used throughout the following discussion and analysis.

CAUTIONARY ADVICE ABOUT FORWARD LOOKING STATEMENTS

The Company, "we," "us," "our," may from time to time make written or oral statements that are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include financial projections, statements of plans and objectives for future operations, estimates of future economic performance or conditions and assumptions relating thereto. The Company may include forward-looking statements in its filings with the SEC, in its reports to stockholders, including this quarterly report, in press releases, other written materials, and in statements made by senior management to analysts, rating agencies, institutional investors, representatives of the media and others.

Forward-looking statements are based on the current assumptions underlying the statements and other information with respect to the beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions of management and the financial condition, results of operations, future performance and business are only expectations of future results. Although the Company believes that the expectations reflected in the Company’s forward-looking statements are reasonable when made, the Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in interest rates; competitive pressures from other financial institutions; general economic conditions on a national basis or in the local markets in which the Company operates; downgrades of U.S. government securities; eroding public confidence in the banking system; changes in consumer behavior due to changing political, business and economic conditions, including the impact of inflation, federal tariff and trade policies, legislative or regulatory initiatives and the impact of the federal government shutdown; changes in the value of securities and other assets in the Company’s investment portfolio; increases in loan and lease default and charge-off rates; the adequacy of the ACL; decreases in deposit levels that necessitate increases in borrowing to fund loans and investments; operational risks to the Company and our vendors, including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; changes in regulation, war, terrorism, civil unrest; changes in economic assumptions and adverse economic developments; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Company’s 2025 Annual Report.

When evaluating forward-looking statements to make decisions about the Company and our stock, investors and others are cautioned to consider these and other risks and uncertainties, and are reminded not to place undue reliance on such statements. Investors should not consider the factors referred to above or described in the Company's 2025 Annual Report to be a complete list of the risks or uncertainties that may affect the Company. Forward-looking statements speak only as of the date they are made and the Company undertakes no obligation to update them to reflect new or changed information or events, except as may be required by federal securities laws.

Non-GAAP Financial Measures

Under SEC Regulation G, public companies making disclosures containing financial measures that are not in accordance with GAAP must also disclose, along with each non-GAAP financial measure, certain additional information, including a reconciliation of the non-GAAP financial measure to the closest comparable GAAP financial measure, as well as a statement of the company’s reasons for utilizing the non-GAAP financial measure. The SEC has exempted from the definition of non-GAAP financial measures certain commonly used financial measures that are not based on GAAP. However, two non-GAAP financial measures commonly used by financial institutions, namely tax equivalent net interest income and tax equivalent net interest

Union Bankshares, Inc. Page 26 margin (as presented in the tables in the section labeled Yields Earned and Rates Paid), have not been specifically exempted by the SEC, and may therefore constitute non-GAAP financial measures under Regulation G. We are unable to state with certainty whether the SEC would regard those measures as subject to Regulation G. Management believes that these non-GAAP financial measures are useful in evaluating the Company’s financial performance and facilitate comparisons with the performance of other financial institutions. However, that information should be considered supplemental in nature and not as a substitute for related financial information prepared in accordance with GAAP.

CRITICAL ACCOUNTING POLICIES

The Company has established various accounting policies which govern the application of GAAP in the preparation of the Company's consolidated financial statements. Certain accounting policies involve significant judgments and assumptions by management which have a material impact on the reported amount of assets, liabilities, capital, revenues and expenses and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes. The SEC has defined a company's critical accounting policies as the ones that are most important to the portrayal of the company's financial condition and results of operations, and which require management to make its most difficult and subjective judgments, often as a result of the need to make estimates on matters that are inherently uncertain. Based on this definition, management has identified the accounting policies and judgments most critical to the Company. They include establishing the amount of ACL and valuing our intangible assets. The judgments and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ from estimates and have a material impact on the carrying value of assets, liabilities, or capital, and/or the results of operations of the Company.

Please refer to the Company's 2025 Annual Report on Form 10-K for a more in-depth discussion of the Company's critical accounting policies. There have been no changes to the Company's critical accounting policies since the filing of that report.

OVERVIEW

Net income for the three and six months ended June 30, 2026 increased compared to the same periods in 2025, primarily due to higher net interest income resulting from growth in average earning assets and an improvement in net interest margin and spread. Noninterest income increased modestly, while noninterest expense reflected continued investments in personnel, technology, and operating infrastructure. Asset quality, liquidity, and capital levels remained strong during the period. For further discussion see Results of Operations on page 28.

Consolidated net income increased $529 thousand, or 22.1%, to $2.9 million for the second quarter of 2026 compared to $2.4 million for the second quarter of 2025. The increase in net income was due to the combined effects of an increase in net interest income of $1.2 million, a decrease of $46 thousand in credit loss expense, and an increase of $484 thousand in noninterest income, partially offset by increases of $976 thousand in noninterest expenses and $199 thousand in income tax expense.

Consolidated net income increased $1.0 million, or 21.1%, to $5.9 million for the six months ended June 30, 2026 compared to $4.9 million for the six months ended June 30, 2025. This increase was due to increases in net interest income of $2.2 million, and noninterest income of $538 thousand and a decrease in credit loss expense of $606 thousand, partially offset by increases in noninterest expenses of $1.9 million and income tax expense of $377 thousand.

At June 30, 2026, the Company had total consolidated assets of $1.56 billion, including gross loans and loans held for sale (total loans) of $1.12 billion, deposits of $1.09 billion, borrowed funds of $337.1 million, subordinated notes of $16.3 million and stockholders' equity of $90.4 million.

The current macroeconomic and geopolitical environment is subject to a number of uncertainties, including geopolitical conflicts, tariffs and 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” in our 2025 Annual Report.

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The following unaudited per share information and key ratios depict several measurements of performance or financial condition at or for the three and six months ended June 30, 2026 and 2025:

(1) Annualized.

(2) The ratio of tax equivalent net interest income to average earning assets. See pages 30 and 31 for more information.

(3) The ratio of noninterest expenses to tax equivalent net interest income and noninterest income, excluding securities gains (losses).

(4) The difference between the average yield on earning assets and the average rate paid on interest bearing liabilities. See pages 30 and 31 for more information.

(5) Nonperforming assets are loans or investment securities that are in nonaccrual or 90 or more days past due as well as OREO or OAO.

(6) The ratio of total capital to risk weighted assets is a regulatory capital measurement. See page 43 for more information.

(7) Cash dividends declared and paid per share divided by consolidated net income per share.

RESULTS OF OPERATIONS

Net Interest Income. The largest component of the Company’s operating income is net interest income, which is the difference between interest and dividend income received from earning assets and interest expense paid on interest bearing liabilities. Net interest income is affected by various factors including, but not limited to, changes in interest rates, loan and deposit pricing strategies, funding strategies, the volume and mix of interest earning assets and interest bearing liabilities, and the level of nonperforming assets. Net interest margin is calculated as the net interest income on a fully tax equivalent basis as a percentage of average earning assets.

Interest earned, on a fully tax equivalent basis, on average earning assets for the three months ended June 30, 2026 was $20.3 million compared to $19.0 million for the three months ended June 30, 2025, an increase of $1.3 million, or 6.9%. The average earning asset base increased $93.6 million between periods and the average yield on average earning assets increased 3 bps to 5.13% for the three months ended June 30, 2026 compared to 5.10% for the three months ended June 30, 2025.

Interest income on federal funds sold and overnight deposits increased $68 thousand between the three month comparison periods due to an increase in the average balance maintained in Union's master account at the FRB, partially offset by a decrease of 21 bps in the average yield.

Interest income on investment securities, on a fully tax equivalent basis, increased $999 thousand between the three month comparison periods due to an increase in the average yield of 73 bps and an increase in the average balance of the portfolio of $60.7 million. These increases are attributable in part to the strategic decision to position the investment portfolio for improved

Union Bankshares, Inc. Page 28 future cash flows and earnings with the purchase of approximately $75.0 million of investment securities AFS during the fourth quarter of 2025.

Interest income on loans, on a fully tax equivalent basis, increased $242 thousand between the three month comparison periods due to an increase in the average volume of loans outstanding of $19.5 million, partially offset by an overall decrease of 1 bp in the average yield. Interest income on loans increased $140 thousand during the three months ended June 30, 2025 due to the recovery of interest from the payoff of loans that previously had been in nonaccrual which increased the average loan yield 5 bps for the three months ended June 30, 2025.

Interest expense increased $162 thousand, to $8.4 million for the three months ended June 30, 2026 compared to $8.3 million for the three months ended June 30, 2025. Reflecting funding to support asset growth, average interest bearing liabilities increased $94.9 million between the three month comparison periods primarily due to an increase in average borrowed funds of $69.5 million and a $38.0 million increase in average interest bearing checking deposits related primarily to municipal account balances. These increases were partially offset by lower interest expense on savings and money market accounts and time deposits, as declines in average rates and relatively stable balances mitigated overall funding cost pressures. The average rate paid on total interest bearing liabilities decreased 14 bps to 2.53% for the second quarter of 2026 compared to 2.67% for the second quarter of 2025 primarily due to changes in the funding mix.

Net interest income was $11.9 million, on a fully tax equivalent basis, for the three months ended June 30, 2026 compared to $10.7 million for the three months ended June 30, 2025, an increase of $1.2 million, or 10.8%, primarily attributable to higher average balances and improved yields on interest earning assets, partially offset by higher interest expense associated with increased funding balances. The net interest spread increased 17 bps to 2.60% for the second quarter of 2026, from 2.43% for the same period last year, while the net interest margin increased 12 bps to 3.01% from 2.89% over the same period, reflecting improved asset yields that outpaced increases in funding costs.

Net interest income was $23.4 million, on a fully tax equivalent basis, for the six months ended June 30, 2026 compared to $21.2 million for the six months ended June 30, 2025, an increase of $2.2 million, or 10.2%. The average volume of earning assets increased $86.1 million and the average yield on earning assets increased 4 bps to 5.12% compared to 5.08% for the comparison period. Average loans increased $19.5 million, or 1.7%, to $1.18 billion for the six months ended June 30, 2026. The $549 thousand increase in interest income on loans between periods resulted primarily from the increase in average loan volume. Loan fee income was reduced by $122 thousand from the recognition of the remaining loan premiums originally paid on purchased residential loans that were paid off during the six months ended June 30, 2026, resulting in a reduction of 2 bps in the average yield for the six months ended June 30, 2026.

Between the six month comparison periods, interest income on investment securities, on a fully tax equivalent basis, increased $2.0 million resulting from an increase in the average balance of the investment portfolio of $62.0 million and an increase in average investment portfolio yield of 69 bps. As noted above, these increases are attributable in part to the strategic decision to purchase approximately $75.0 million of investment securities AFS during the fourth quarter of 2025.

The average balance of interest bearing liabilities increased $86.8 million between the six month comparison periods, primarily due to an increase in borrowed funds and interest bearing deposits. The average cost of funds decreased 12 bps to 2.54% for the six months ended June 30, 2026 compared to 2.66% for the six months ended June 30, 2025 primarily due to changes in the funding mix. Interest expense increased $372 thousand, to $16.7 million for the six months ended June 30, 2026, compared to $16.3 million for the six months ended June 30, 2025.

The net interest spread increased 16 bps to 2.58% for the six months ended June 30, 2026, from 2.42% for the same period last year, reflecting the net effect of the 4 bps increase in the average yield earned on interest earning assets and the 12 bps decrease in the average rate paid on interest bearing liabilities between periods. The net interest margin increased 12 bps for the six months ended June 30, 2026 compared to the same period last year as a result of the changes discussed above.

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The following tables show for the periods indicated the total amount of tax equivalent interest income recorded from average interest earning assets, the related average tax equivalent yields, the tax equivalent interest expense associated with average interest bearing liabilities, the related tax equivalent average rates paid, and the resulting tax equivalent net interest spread and margin.

(Dollars in thousands)

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(Dollars in thousands)

(1) Average balances are calculated based on a daily averaging method.

(2) Average yields reported on a tax equivalent basis using a marginal federal corporate income tax rate of 21%.

(3) Average balances of investment securities are calculated on the amortized cost basis and include nonaccrual securities, if applicable.

(4) Includes loans held for sale as well as nonaccrual loans, unamortized costs and unamortized premiums and is net of the ACL on loans.

(5) Net interest spread is the tax equivalent average yield on average interest earning assets less the average rate paid on interest bearing liabilities.

(6) Net interest margin is the ratio of net interest income, on a tax equivalent basis, to average interest earning assets.

Union Bankshares, Inc. Page 31

Tax exempt interest income amounted to $1.6 million and $1.7 million for the three months ended June 30, 2026 and 2025, respectively, and $3.1 million and $3.5 million for the six months ended June 30, 2026 and 2025, 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 three and six month comparison periods of 2026 and 2025:

(Dollars in thousands)

Rate/Volume Analysis. The following table describes the extent to which changes in average interest rates earned and paid (on a fully tax equivalent basis) and changes in volume of average interest earning assets and interest bearing liabilities have affected the Company's interest income and interest expense during the periods indicated. For each category of interest earning assets and interest bearing liabilities, information is provided on changes attributable to:

• changes in volume (change in volume multiplied by prior rate);
• changes in rate (change in rate multiplied by prior volume); and
• total change in rate and volume.

Changes attributable to both rate and volume have been allocated proportionately to the change due to volume and the change due to rate.

(Dollars in thousands)

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

Union Bankshares, Inc. Page 32 further details, see FINANCIAL CONDITION - Allowance for Credit Losses on Loans on page 38 and Commitments, Contingent Liabilities, and Off-Balance-Sheet Arrangements on page 41.

Credit loss expense (benefit) was made up of the following components for the following periods:

(Dollars in thousands)

Noninterest Income. The following table sets forth the components of noninterest income and changes between the three and six month comparison periods of 2026 and 2025:

(Dollars in thousands)

(Dollars in thousands)

The significant changes in noninterest income for the three and six months ended June 30, 2026 compared to the same periods of 2025 are described below:

• Wealth management income. Wealth management income increased as managed fiduciary accounts grew between June 30, 2026 and 2025, as did the value of assets within those accounts.
• Net gains on sales of loans held for sale. Residential mortgage loans sold totaled $32.8 million and $56.9 million during the three and six months ended June 30, 2026, respectively, compared to sales of $31.0 million and $56.8 million during the corresponding periods of 2025. Net gains on residential loan sales increased $10 thousand for the three months ended June 30, 2026 compared to 2025, reflecting the slightly higher volume of loans sold. For the six month comparison period, net gains on residential loan sales decreased $29 thousand, primarily due to lower market premiums on loans sold during 2026 compared to 2025.
• Net gains on disposals of premises and equipment. A $381 thousand gain was recognized on the sale of previously closed branch property during the second quarter of 2026. No similar gain was recognized during the same period in 2025.
• Other income. The Company received $19 thousand in prepayment penalties from the early payoff of loans during the first quarter of 2026 and a $15 thousand one-time payment during the second quarter of 2026 that were not received during the same periods of 2025.
• Net gains on other investments. Participants in the 2020 Amended and Restated Nonqualified Excess 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 $151 thousand and $125 thousand for the three and six months ended June 30, 2026, respectively, and net gains of $119 thousand and $84 thousand for the three and six months ended June 30, 2025, respectively.

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Noninterest Expenses. The following table sets forth the components of noninterest expenses and changes between the three and six month comparison periods of 2026 and 2025:

(Dollars in thousands)

(Dollars in thousands)

The significant changes in noninterest expenses for the three and six months ended June 30, 2026 compared to the same periods in 2025 are described below:

• Salaries and wages. Salaries and wages increased $831 thousand and $1.3 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The increases were primarily attributable to annual salary adjustments for the fiscal year 2026 and overlap associated with succession planning for retiring employees. Also contributing to the increases were retirement related compensation costs of $362 thousand, including accelerated vesting of long-term incentive awards and a retirement bonus payment, increases of $105 thousand and $224 thousand, respectively, in the accrual related to incentive plan payments to select officers of Union, and increases of $70 thousand and $192 thousand, respectively, from the accrual for unused paid time off (PTO) outstanding as of June 30, 2026 related to a fourth quarter 2025 change in the PTO policy.
• Employee benefits. Employee benefit expense decreased $74 thousand for the three months ended June 30, 2026 compared to the same period in 2025 primarily reflecting lower premium expense for the Company's medical and dental insurance plans, partially offset by increases in 401k plan contribution expense, payroll taxes and expense related to the Company's deferred compensation plans. Employee benefit expenses increased $110 thousand for the six months ended June 30, 2026 compared to the same period in 2025, as increased 401k plan contribution expense, payroll taxes, and expense related to the Company's deferred compensation plans more than offset the lower premium expense for the Company's medical and dental insurance plans.
• Equipment expense. Equipment expense increased during the three and six month comparison periods primarily due to increases in software license and maintenance costs and depreciation expense related to equipment replacement purchases.
• FDIC insurance assessment. The FDIC insurance assessment decreased by $59 thousand and $54 thousand during the three and six month comparison periods, respectively, due to a lower assessment rate, partially offset by the overall growth in net average assets.
• ATM and debit card expense. The increases of $45 thousand and $90 thousand for the three and six month comparison periods, respectively, are primarily related to increased costs associated with debit card processing during the three and six month comparison periods.
• Travel and entertainment. The increases of $24 thousand and $30 thousand during the three and six month comparison periods, respectively, relate to an increase in business related meeting costs and intercompany travel between locations.

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• Professional fees. Professional fees increased $17 thousand and $33 thousand for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025 due to increases in engagement fees and additional consultants engaged to assist with other consulting services in 2026.
• Advertising and public relations. Advertising and public relations costs increased $29 thousand and $105 thousand during the three and six month comparison periods, respectively, compared to the same periods in 2025 due to a continued focus on advertising campaigns and business development activities during the first half of 2026 that did not occur in the same period in 2025.
• Loan related expenses. The increases of $28 thousand and $53 thousand for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025 are primarily due to higher credit report fees and real estate loan closing costs associated with loan origination activity. The six month comparison period also included a $33 thousand increase in the amortization of MSRs.
• Training and development. Training and development expense increased $26 thousand and $30 thousand for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, reflecting increased investment in employee training and professional development initiatives.
• Electronic banking expenses. The increase in electronic banking expenses during the three and six month comparison periods is related primarily to increased costs associated with functionality improvements to the online banking platform during 2026.
• Other expenses. Other expenses increased $59 thousand and $104 thousand during the three and six month comparison periods, respectively, compared to the same periods in 2025 primarily due to increases in wealth management expenses, deposit related fee expenses, and employee related costs, largely attributable to employee relocation costs.

Provision for Income Taxes. The Company has provided for current and deferred federal income taxes for the three and six months ended June 30, 2026 and 2025. The Company's net provision for income taxes was $301 thousand and $629 thousand for the three and six months ended June 30, 2026, respectively, compared to $102 thousand and $252 thousand for the same periods in 2025, respectively, reflecting higher net income year over year. The effective federal corporate income tax rate was 9.0% for the three and six months ended June 30, 2026 compared to 4.5% and 5.1% for the same periods in 2025, respectively.

Amortization expense related to limited partnership investments is included as a component of income tax expense and amounted to $475 thousand and $939 thousand for the three and six months ended June 30, 2026, respectively, compared to $457 thousand and $909 thousand for the same periods in 2025, respectively. These investments provide tax benefits, including tax credits. Low income housing and rehabilitation tax credits with respect to limited partnership investments are also included as a component of income tax expense and amounted to $514 thousand and $1.0 million for the three and six months ended June 30, 2026, respectively, and $483 thousand and $966 thousand for the three and six months ended June 30, 2025, respectively.

FINANCIAL CONDITION

At June 30, 2026, the Company had total consolidated assets of $1.56 billion, including gross loans and loans held for sale (total loans) of $1.12 billion, investment securities AFS of $305.8 million, deposits of $1.09 billion, borrowed funds of $337.1 million, subordinated notes of $16.3 million and stockholders' equity of $90.4 million. The Company’s total assets at June 30, 2026 decreased $58.4 million, or 3.6%, from $1.62 billion at December 31, 2025, and increased $78.4 million, or 5.3%, compared to June 30, 2025.

June 30th marks the end of the fiscal year for the majority of the Company's municipal customers, including school districts, and several customers are required to reduce their outstanding short term debts to zero for at least one day during their fiscal year. The one day requirement traditionally occurs annually on June 30th and as a result the Company experiences a decrease in outstanding municipal loan balances. In many cases monies are transferred from corresponding deposit accounts to pay off these debts so the Company experiences a corresponding decrease in deposit balances as well. These cyclical decreases are short term in nature as the loans and deposits for the next municipal fiscal year are recorded within the first few days of July. The Company recorded $74.5 million in new municipal loans during the first few days of July 2026.

Federal funds sold and overnight deposits increased $16.8 million, or 220.1%, to $24.5 million as of June 30, 2026, from $7.6 million at December 31, 2025.

Net loans and loans held for sale decreased $56.9 million, or 4.9%, to $1.12 billion, representing 71.6% of total assets at June 30, 2026, compared to $1.17 billion, or 72.5% of total assets at December 31, 2025. (See Loans Held for Sale and Loan Portfolio on page 36.)

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Total deposits decreased $120.9 million, or 10.0%, to $1.09 billion at June 30, 2026, from $1.21 billion at December 31, 2025. Noninterest bearing deposits decreased by $10.1 million, or 4.4%, interest bearing deposits decreased by $140.7 million, or 19.4%, while time deposits increased by $29.8 million, or 11.4%. (See Deposits on page 40.)

Borrowed funds at June 30, 2026 were $337.1 million and consisted of $316.1 million of FHLB advances and $21.0 million of borrowings from the FRB. Borrowed funds consisted of $286.5 million of FHLB advances at December 31, 2025. (See Borrowings on page 41.)

Stockholders’ equity increased from $80.9 million at December 31, 2025 to $90.4 million at June 30, 2026, reflecting an increase of $7.4 million due to net proceeds from the issuance of common stock under the Company's at-the-market offering, net income of $5.9 million for the first six months of 2026, an increase of $571 thousand from the vesting of stock-based compensation, and a $42 thousand increase due to the issuance of common stock under the DRIP, partially offset by cash dividends declared of $3.3 million and an increase of $1.1 million in accumulated other comprehensive loss due to a decrease in the fair market value of the Company's AFS investment securities. (See Capital Resources on page 43.)

Loans Held for Sale and Loan Portfolio. Total loans (including loans held for sale) decreased $57.0 million, or 4.8%, to $1.12 billion, representing 72.0% of assets at June 30, 2026, from $1.18 billion, representing 72.9% of assets at December 31, 2025. The total loan portfolio at June 30, 2026 increased $10.1 million compared to the June 30, 2025 level of $1.11 billion, which represented 75.1% of assets. The Company’s loans consist primarily of adjustable-rate and fixed-rate mortgage loans secured by 1-to-4 family, multi-family residential or commercial real estate. Real estate secured loans represented $1.06 billion, or 94.2% of total loans at June 30, 2026 and $1.03 billion, or 87.2% of total loans at December 31, 2025. The net change in the Company's loan portfolio from December 31, 2025 (see table below) resulted primarily from the seasonal decrease in the municipal portfolio discussed above and a reduction in commercial construction loans, partially offset by an increase in the volume of residential and commercial real estate loans.

The composition of the Company's loan portfolio, including loans held for sale, as of June 30, 2026 and December 31, 2025 was as follows:

(Dollars in thousands)

The Company originates and sells qualified residential mortgage loans in various secondary market avenues to mitigate long-term interest rate risk and generate fee income, with a majority of sales made to the FHLMC/Freddie Mac, generally with servicing rights retained. At June 30, 2026, the Company serviced a $1.23 billion residential real estate mortgage portfolio, of which $5.1 million was held for sale and approximately $740.9 million of which was serviced for unaffiliated third parties. The Company sold $56.9 million of qualified residential real estate loans to the secondary market during the first six months of 2026 compared to sales of $56.8 million during the first six months of 2025.

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The Company also originates commercial real estate and commercial loans under various SBA, USDA and State sponsored programs which provide a government agency guaranty for a portion of the loan amount. There was $1.6 million guaranteed under these various programs at June 30, 2026 on an aggregate balance of $2.1 million in subject loans.

The Company serviced $41.8 million of commercial and commercial real estate loans for unaffiliated third parties as of June 30, 2026. This included $40.6 million of commercial and commercial real estate loans the Company originated and participated out to other financial institutions. These loans were participated in the ordinary course of business on a nonrecourse basis, for liquidity or credit concentration management purposes.

The Company capitalizes MSRs for all loans sold with servicing retained. The unamortized balance of MSRs on loans sold with servicing retained was $1.8 million at June 30, 2026, with an estimated market value in excess of the carrying value as of such date. Management periodically evaluates and measures the servicing assets for impairment.

Qualifying residential first lien mortgage loans and certain commercial real estate loans with a combined carrying value of $480.0 million were pledged as collateral for borrowings from the FHLB under a blanket lien at June 30, 2026.

Asset Quality. The Company, like all financial institutions, is exposed to certain credit risks, including those related to the value of the collateral that secures its loans and the ability of borrowers to repay their loans. Consistent application of the Company’s conservative loan policies has helped to mitigate these risks and has been prudent for both the Company and its customers. Management closely monitors the Company’s loan and investment portfolios, OREO and OAO for potential problems and reports to the Company’s and Union’s Board at regularly scheduled meetings. Board approved policies set forth portfolio diversification levels to mitigate concentration risk and the Company participates large credits out to other financial institutions to further mitigate that risk.

Repossessed assets, nonaccrual loans, and loans that are 90 days or more past due are considered to be nonperforming assets. The following table details the composition of the Company's nonperforming assets and amounts utilized to calculate certain asset quality ratios monitored by the Company's management as of the balance sheet dates and June 30, 2025:

(Dollars in thousands)

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The following table shows trends in certain asset quality ratios monitored by the Company's management as of the balance sheet dates and June 30, 2025:

(Dollars in thousands)

All other loan categories did not have charge-offs or recoveries for any of the periods presented above.

There were no loans in process of foreclosure at June 30, 2026 or December 31, 2025. The aggregate interest income not recognized on nonaccrual loans approximated $1.2 million and $791 thousand as of June 30, 2026 and December 31, 2025, respectively.

The Company had loans rated substandard that were on performing status totaling $508 thousand and $531 thousand at June 30, 2026 and December 31, 2025, respectively. In management's view, substandard loans represent a higher degree of risk of becoming nonperforming loans in the future.

Allowance for Credit Losses on Loans. Some of the Company’s loan customers ultimately do not make all of their contractually scheduled payments, requiring the Company to charge off a portion or all of the remaining principal balance due. The Company maintains an ACL to absorb such losses. The level of the ACL on loans at June 30, 2026 represents management's estimate of expected credit losses over the expected life of the loans at the balance sheet date. The Company's policy and methodologies for establishing the ACL on loans, described in the Company's 2025 Annual Report, did not change during the first six months of 2026. The Company's ACL on loans was $8.4 million at June 30, 2026 and December 31, 2025.

The following table reflects activity in the ACL on loans for the three and six months ended June 30, 2026 and 2025:

(Dollars in thousands)

Union Bankshares, Inc. Page 38

The following table (net of loans held for sale) shows the internal breakdown by risk component of the Company's ACL on loans and the percentage of loans in each category to total loans in the respective portfolios at the dates indicated:

(Dollars in thousands)

Notwithstanding the categories shown in the table above or any specific allocation under the Company's ACL methodology, all funds in the ACL on loans are available to absorb loan losses in the portfolio, regardless of loan category or specific allocation.

Management believes, in its best estimate, that the ACL on loans at June 30, 2026 is appropriate to cover expected credit losses over the expected life of the Company’s loan portfolio as of such date. However, there can be no assurance that the Company will not sustain losses in future periods which could be greater than the size of the ACL on loans at June 30, 2026. In addition, our banking regulators, as an integral part of their examination process, periodically review our ACL. Such agencies may require us to recognize adjustments to the ACL based on their judgments about information available to them at the time of their examination. A large adjustment to the ACL on loans for losses in future periods could require increased credit loss expense to replenish the ACL on loans, which could negatively affect earnings.

Investment Activities. The Company's investment securities classified as AFS, which are carried at fair value, decreased $20.5 million to $305.8 million, comprising 19.6% of total assets at June 30, 2026, compared to $326.3 million, or 20.2% of total assets at December 31, 2025. The decrease between periods is due to returns of principal of $18.9 million and an increase in net unrealized losses of $1.6 million.

Net unrealized losses in the Company’s AFS investment securities portfolio were $34.7 million as of June 30, 2026, compared to net unrealized losses of $33.1 million as of December 31, 2025. The Company’s Accumulated OCI component of stockholders’ equity at June 30, 2026 reflected cumulative net unrealized losses on investment securities of $27.0 million. There were no securities classified as HTM at June 30, 2026 or December 31, 2025. The unrealized losses in the Company's AFS investment securities portfolio are primarily attributable to changes in long-term interest rates which are tied to the pricing indexes for the securities. No declines in value were deemed by management to be impairment related to credit losses at June 30, 2026. Deterioration in credit quality and/or imbalances in liquidity that may result from changes in financial market conditions might adversely affect the fair values of the Company’s investment portfolio and the amount of gains or losses ultimately realized on the sale of such securities and may also increase the potential that credit losses may be identified in future periods, resulting in credit loss expense recorded in earnings.

Investment securities AFS with a fair value of $90.4 million and $87.8 million were pledged as collateral for FHLB borrowings and other credit subject to collateralization, public unit deposits or for other purposes as required or permitted by law at June 30, 2026 and December 31, 2025, respectively. Investment securities AFS pledged as collateral for the discount window at the FRB consisted of mortgage-backed securities with a fair value of $28.9 million and $9.4 million at June 30, 2026 and December 31, 2025, respectively.

Union Bankshares, Inc. Page 39

Deposits. The following table shows information concerning the Company's average deposits by account type and weighted average nominal rates at which interest was paid on such deposits for the six months ended June 30, 2026 and 2025:

(Dollars in thousands)

During the first six months of 2026, average total deposits increased by $19.3 million, or 1.6%, compared to the six months ended June 30, 2025. The deposit mix has remained consistent between periods. The average balance of total nontime deposits increased $19.1 million between periods primarily due to municipal customers retaining deposit funds for longer periods in the first six months of 2026 compared to the first six months of 2025, resulting in increases of $33.7 million in interest bearing checking accounts and $3.6 million in savings accounts, partially offset by decreases of $9.8 million in noninterest bearing deposits and $8.4 million in money market accounts. Average total time deposits were relatively unchanged between periods as a $10.3 million increase in average customer time deposits was largely offset by decreases of $7.1 million in average purchased CDARS deposits and $3.0 million in average retail brokered deposits, reflecting a shift in composition from purchase sourced to customer-generated balances.

The Company participates in CDARS, which permits it to offer full deposit insurance coverage to its customers by exchanging deposit balances with other CDARS participants. CDARS also provides the Company with an additional source of funding and liquidity through the purchase of deposits. There were no purchased CDARS deposits at June 30, 2026 and there were $248 thousand at December 31, 2025. There were $13.6 million and $11.3 million of time deposits of $250,000 or less on the balance sheet at June 30, 2026 and December 31, 2025, respectively, which were exchanged with other CDARS participants.

The Company also participates in the ICS program, a service through which it can offer its customers demand or savings deposit products with access to unlimited FDIC insurance, while receiving reciprocal deposits from other FDIC-insured banks. Like the exchange of certificate of deposit accounts through CDARS, exchange of demand or savings deposits through ICS provides a depositor with full deposit insurance coverage of excess balances, thereby helping the Company retain the full amount of the deposit on its balance sheet. As with the CDARS program, in addition to reciprocal deposits, participating banks may also purchase one-way ICS deposits. There were no purchased ICS deposits at June 30, 2026 or December 31, 2025. There were $139.9 million and $270.5 million in exchanged ICS demand and money market deposits on the balance sheet at June 30, 2026 and December 31, 2025, respectively.

At June 30, 2026 there were $43.8 million of retail brokered deposits at a weighted average rate of 3.94% issued under a master certificate of deposit program with a deposit broker for twelve month terms, which provided a supplemental source of funding and liquidity. There were $10.0 million of retail brokered deposits at a weighted average rate of 3.85% issued at December 31, 2025.

Uninsured deposits have been estimated to include deposits with balances greater than the FDIC insurance coverage limit of $250 thousand. This estimate by management is based on the same methodologies and assumptions used for regulatory reporting requirements. At June 30, 2026, the Company had total estimated uninsured deposit accounts totaling $434.3 million, or 39.7% of total deposits. Uninsured deposits include $21.1 million of municipal deposits that were collateralized under applicable state regulations by letters of credit issued by the FHLB at June 30, 2026, as described under Borrowings on page 41.

Union Bankshares, Inc. Page 40

The following table provides a maturity distribution of the Company’s time deposits in amounts in excess of the $250 thousand FDIC insurance limit at June 30, 2026 and December 31, 2025:

(Dollars in thousands)

Borrowings. Advances from the FHLB are another key source of funds to support earning assets. These funds are also used to manage the Bank's interest rate and liquidity risk exposures. Borrowed funds included FHLB advances of $316.1 million with a weighted average rate of 3.94% at June 30, 2026 and $286.5 million with a weighted average rate of 4.05% at December 31, 2025. Union is required to invest in $100 par value stock of the FHLB in an amount to satisfy unpaid principal balances on qualifying loans, plus an amount to satisfy an activity based requirement. The stock is nonmarketable, and is redeemable by the FHLB at par value. With the increase in FHLB advances outstanding at June 30, 2026, the investment in FHLB Class B common stock has increased to $13.6 million at June 30, 2026 compared to $12.2 million at December 31, 2025. Union's investment in FHLB stock is carried at cost in Other assets on the consolidated balance sheets.

The Company has the authority, up to its available borrowing capacity with the FHLB, to collateralize public unit deposits with letters of credit issued by the FHLB. FHLB letters of credit in the amount of $44.5 million and $42.9 million were utilized as collateral for these deposits at June 30, 2026 and December 31, 2025, respectively. The Company's reimbursement obligations to the FHLB relating to these letters of credit are secured by pledged collateral, which reduces the Company's available borrowing capacity with the FHLB. Total fees paid by the Company in connection with the issuance of these letters of credit were $10 thousand and $21 thousand for the three and six months ended June 30, 2026, respectively, and $16 thousand and $28 thousand for the three and six months ended June 30, 2025, respectively.

At June 30, 2026, borrowed funds also included a $21.0 million overnight advance from the discount window at the FRB at a weighted average rate of 3.75%. Advances under this program are secured by mortgage-backed securities AFS that have been pledged as collateral at the FRB. There were no outstanding advances from the FRB at December 31, 2025.

In August 2021, the Company completed the private placement of $16.5 million in aggregate principal amount of fixed-to-floating rate subordinated notes due in 2031 to certain qualified institutional buyers and accredited investors. The Notes initially bear interest, payable semi-annually, at the rate of 3.25% per annum, until September 1, 2026. From and including September 1, 2026, the interest rate applicable to the outstanding principal amount due will reset quarterly to the then current three-month SOFR plus 263 basis points. The Notes are presented in the consolidated balance sheets net of unamortized issuance costs of $176 thousand and $193 thousand at June 30, 2026 and December 31, 2025, respectively.

Commitments, Contingent Liabilities, and Off-Balance-Sheet Arrangements. The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers, to reduce its own exposure to fluctuations in interest rates and to implement its strategic objectives. These financial instruments include commitments to extend credit, standby letters of credit, interest rate caps and floors written on adjustable-rate loans, commitments to participate in or sell loans, commitments to buy or sell securities, certificates of deposit or other investment instruments and risk-sharing commitments or guarantees on certain sold loans. Such instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized on the balance sheet. The contractual or notional amounts of these instruments reflect the extent of involvement the Company has in a particular class of financial instruments.

The Company's maximum exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. For interest rate caps and floors written on adjustable-rate loans, the contractual or notional amounts do not represent the Company’s exposure to credit loss. The Company controls the risk of interest rate cap agreements through credit approvals, borrowing limits, and monitoring procedures. The Company generally requires collateral or other security to support financial instruments with credit risk.

Union Bankshares, Inc. Page 41

The following table details the contractual or notional amount of financial instruments that represented credit risk at the balance sheet dates:

(Dollars in thousands)

Commitments to originate loans are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Loan commitments generally have a fixed expiration date or other termination clause and may require payment of a fee. Since many of the loan commitments are expected to expire without being drawn upon and not all credit lines will be utilized, the total commitment amounts do not necessarily represent future cash requirements. Lines of credit incur seasonal volume fluctuations due to the nature of some customers' businesses, such as tourism. The increase in commitments to originate loans at June 30, 2026 from December 31, 2025 is primarily the result of the fiscal cycle of local municipalities and school districts, with $74.5 million committed to them on June 30, 2026 for their fiscal year beginning July 1, 2026.

The Company did not hold any derivative or hedging instruments at June 30, 2026 or December 31, 2025.

In addition to commitments with credit risk arising from the Company’s financial instruments, in the normal course of business the Company enters into other types of contractual arrangements from time to time that represent off-balance sheet commitments such as contracts for the purchase or lease of property, including real property for its banking premises.

The Company records an ACL on off-balance sheet credit exposures through a charge or credit to Credit loss expense (benefit) on the consolidated statements of income to account for the change in the ACL on off-balance sheet exposures between reporting periods. The ACL on off-balance sheet credit exposures totaled $965 thousand and $1.1 million at June 30, 2026 and December 31, 2025, respectively, and was included in Accrued interest and other liabilities on the consolidated balance sheets. There was $140 thousand and $125 thousand of credit loss benefit recorded on off-balance sheet credit exposures for the three and six months ended June 30, 2026, respectively, and $29 thousand of credit loss expense and $165 thousand of credit loss benefit recorded for the three and six months ended June 30, 2025, respectively.

Liquidity. Liquidity is a measurement of the Company’s ability to meet potential cash requirements, including ongoing commitments to fund deposit withdrawals, repay borrowings, fund investment and lending activities, purchase and lease commitments, and for other general business purposes. The primary objective of liquidity management is to maintain a balance between sources and uses of funds to meet our cash flow needs in the most economical and expedient manner. The Company’s principal sources of funds are deposits; whole-sale funding options including purchased deposits, amortization, prepayment and maturity of loans, investment securities, interest bearing deposits and other short-term investments; sales of securities and loans AFS; earnings; and funds provided from operations. Contractual principal repayments on loans have been a relatively predictable source of funds. Deposit flows and loan and investment prepayments are less predictable and can be significantly influenced by market interest rates, economic conditions, and rates offered by our competitors. Managing liquidity risk is essential to maintaining both depositor confidence and earnings stability.

As of June 30, 2026, Union, as a member of FHLB, had access to unused lines of credit up to $4.8 million over and above the $363.6 million in combined outstanding FHLB borrowings and other credit subject to collateralization and to the purchase of required FHLB Class B common stock and evaluation by the FHLB of the underlying collateral available. This line of credit can be used for either short-term or long-term liquidity or other funding needs.

Union also maintains an IDEAL Way Line of Credit with the FHLB. The total line available was $551 thousand at June 30, 2026. There were no borrowings against this line of credit as of such date. Interest on this line is chargeable at a rate determined by the FHLB and payable monthly. Should Union utilize this line of credit, qualified portions of the loan and investment portfolios would collateralize these borrowings.

In addition to its borrowing arrangements with the FHLB, Union maintains a pre-approved federal funds line of credit totaling $15.0 million with an upstream correspondent bank, a master brokered deposit agreement with a brokerage firm, and one-way buy options with CDARS and ICS. At June 30, 2026, there were $43.8 million in retail brokered deposits issued under a master

Union Bankshares, Inc. Page 42 certificate of deposit program with a broker, no purchased CDARS or ICS deposits, and no outstanding advances on the correspondent line.

Union's investment and residential loan portfolios also provide a significant amount of contingent liquidity that could be accessed in a reasonable time period through sales of those portfolios. Additional contingent liquidity sources are available with further access to the brokered deposit market and the FRB discount window. As of June 30, 2026, there was a $21.0 million overnight advance outstanding from the FRB discount window, which was utilized based on prevailing pricing and liquidity considerations at that date. These sources are incorporated into our contingent liquidity planning. Management believes the Company has sufficient liquidity to meet all reasonable borrower, depositor, and creditor needs in the present economic environment. However, any projections of future cash needs and flows are subject to substantial uncertainty, including factors outside the Company's control.

Capital Resources. Capital management is designed to maintain an optimum level of capital in a cost-effective structure that meets target regulatory ratios, supports management’s internal assessment of economic capital, funds the Company’s business strategies and builds long-term stockholder value. Dividends are generally in line with long-term trends in earnings per share and conservative earnings projections, while sufficient profits are retained to support anticipated business growth, fund strategic investments, maintain required regulatory capital levels and provide continued support for deposits. The Company continues to evaluate growth opportunities both through internal growth or potential acquisitions.

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 three and six months ended June 30, 2026, the Company issued 327,806 shares for aggregate gross sale proceeds of $7.7 million, at an average gross sales price of $23.51 per share, which yielded net proceeds to the Company of $7.4 million, after issuance costs, including sales commissions equal to 3% of gross sales proceeds. From the inception of the Equity Distribution Agreement though June 30, 2026, 384,066 shares of the Company's common stock were issued under the offering. As of June 30, 2026, approximately $30.8 million remains available for issuance under the offering.

In August 2021, the Company completed the private placement of $16.5 million in aggregate principal amount of fixed-to-floating rate subordinated notes due in 2031 to certain qualified institutional buyers and accredited investors. The Notes are structured to qualify as Tier 2 capital for the Company under regulatory capital guidelines for bank holding companies during the first five years after issuance, with Tier 2 capital treatment thereafter declining by 20% per year. Proceeds from the sale of the Notes were utilized primarily to provide additional Tier 1 capital to Union to support its growth and for other general corporate purposes.

Stockholders’ equity increased from $80.9 million at December 31, 2025 to $90.4 million at June 30, 2026, reflecting an increase of $7.4 million due to net proceeds from the issuance of common stock under the Company's at-the-market offering, net income of $5.9 million for the first six months of 2026, an increase of $571 thousand from the vesting of stock-based compensation, and a $42 thousand increase due to the issuance of common stock under the DRIP, partially offset by cash dividends declared of $3.3 million and an increase of $1.1 million in accumulated other comprehensive loss due to a decrease in the fair market value of the Company's AFS investment securities. The components of other comprehensive income are illustrated in Note 10 of the unaudited consolidated financial statements.

The Company has 7,500,000 shares of $2.00 par value common stock authorized. As of June 30, 2026, the Company had 5,415,605 shares issued, of which 4,945,865 were outstanding and 469,740 were held in treasury.

In December 2024, the Company's Board reauthorized for 2025 and 2026 a limited stock repurchase plan that was initially established in May of 2010. The limited stock repurchase plan allows the repurchase of up to a fixed number of shares of the Company's common stock each calendar quarter in open market purchases or privately negotiated transactions, as management deems advisable and as market conditions may warrant. The repurchase authorization for a calendar quarter (currently 2,500 shares) expires at the end of that quarter to the extent it has not been exercised, and is not carried forward into future quarters. The quarterly repurchase authorization expires on December 31, 2026, unless reauthorized. The Company had no repurchases under this program during the first six months of 2026.

The Company maintains a DRIP whereby registered stockholders may elect to reinvest cash dividends and make optional cash contributions to purchase additional shares of the Company's common stock. The Company has reserved 200,000 shares of its common stock for issuance and sale under the DRIP. As of June 30, 2026, 17,509 shares of stock had been issued from treasury stock under the DRIP.

Union Bankshares, Inc. Page 43

The Company (on a consolidated basis) and Union are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company's and Union's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Union must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company's and Union's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Under the standard regulatory capital guidelines, banking organizations must have a minimum total risk-based capital ratio of 8.0%, a minimum Tier I risk-based capital ratio of 6.0%, a minimum common equity Tier I risk-based capital ratio of 4.5%, and a minimum leverage ratio of 4.0% in order to be "adequately capitalized." In addition to these requirements, banking organizations must maintain a 2.5% capital conservation buffer consisting of common Tier I equity, increasing the minimum required total risk-based capital, Tier I risk-based and common equity Tier I capital to risk-weighted assets they must maintain to avoid limits on capital distributions and certain bonus payments to executive officers and similar employees.

As shown in the table below, as of June 30, 2026, both the Company and Union met all capital adequacy requirements to which they are subject and Union exceeded the requirements for a "well capitalized" bank under the FDIC's Prompt Corrective Action framework. There were no conditions or events between June 30, 2026 and the date of this report that management believes have changed either company’s regulatory capital category.

(Dollars in thousands)

Dividends paid by Union are the primary source of funds available to the Company for payment of dividends to its stockholders. Union is subject to certain requirements imposed by federal banking laws and regulations, which among other things, establish minimum levels of capital and restrict the amount of dividends that may be distributed by Union to the Company.

Quarterly cash dividends of $0.36 per share were paid during the second quarter of 2026 and were declared in July for the third quarter, payable on August 6, 2026 to stockholders of record on July 27, 2026.

Omitted, in accordance with the regulatory relief available to smaller reporting companies in SEC Release Nos. 33-10513 (effective September 10, 2018).

Evaluation of Disclosure Controls and Procedures. The Company’s Chief Executive Officer and Chief Financial Officer, with the assistance of the Disclosure Control Committee, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of June 30, 2026. Based on this evaluation they concluded that those disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files with the Commission is accumulated and communicated to

Union Bankshares, Inc. Page 44 the Company’s management, including its principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required information.

Changes in Internal Controls over Financial Reporting. There was no change in the Company's internal control over financial reporting, as defined in Rule 13a-15(f) of the Exchange Act, during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

There have been no material changes in the risk factors discussed in Part I-Item 1A, "Risk Factors" in the Company’s 2025 Annual Report since the date of the filing of that report.