UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10 - Q

             (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
 SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002

                                       OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
       THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
                       ______________ TO ________________

                           Commission File No. 0-21078


                             UNION BANKSHARES, LTD.
             (Exact name of registrant as specified in its charter)

                DELAWARE                              84-0986148
       --------------------------------            ------------------
       (State or other jurisdiction of              (I.R.S Employer
        incorporation or organization)             Identification No.)

                1825 LAWRENCE STREET, SUITE 444, DENVER, CO 80202

                    (Address of principal executive offices)
                                   (Zip Code)

                                 (303) 298-5352

              (Registrant's telephone number, including area code)

        -----------------------------------------------------------------
                                   Not Changed
        -----------------------------------------------------------------
         Former name, former address and former fiscal year, if changed
                               since last report.

   Indicate by check mark whether the registrant (1) has filed all reports
 required to be filed by Section 13 or 15(d) of the Exchange Act during the
 preceding twelve months (or for such shorter period that the registrant was
  required to file such reports), and (2) has been subject to such filing
     requirements for the past 90 days. YES  X   NO    .
                                            ---     ---

             At May 10, 2002, there were 2,410,078 shares of common
                               stock outstanding.


<PAGE>

                             UNION BANKSHARES, LTD.


                                      INDEX


                                                                      PAGE

PART I - FINANCIAL INFORMATION

         Item 1.  Financial Statements.........................         3


         Item 2.  Management's Discussion and Analysis or
                  Plan of Operation............................         9

         Item 3.  Quantitative and Qualitative Disclosures
                  About Market Risk............................        14

PART II - OTHER INFORMATION....................................        16


SIGNATURES.....................................................        17


                                       2

<PAGE>

PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS


UNION BANKSHARES, LTD. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                               March 31,           December 31,
                        ASSETS                                   2002                  2001
                                                             (Unaudited)
                                                        --------------------   -----------------
<S>                                                           <C>                 <C>
Cash and cash equivalents:
    Cash and due from banks                                     $16,771,000         $15,512,000
    Federal funds sold                                            2,600,000                 -
                                                        --------------------   -----------------
       Total cash and cash equivalents                           19,371,000          15,512,000

    Investment securities:
       Available-for-sale securities                            165,784,000         168,742,000
       Securities pledged to repurchase agreement                 5,752,000          12,669,000
       Other  investments                                         2,750,000           2,750,000
                                                        --------------------   -----------------
                 Total investment securities                    174,286,000         184,161,000

    Loans:
       Commercial                                               167,667,000         163,054,000
       Real estate mortgage                                       3,537,000           3,648,000
       Real estate construction                                  34,958,000          36,246,000
       Consumer                                                  32,766,000          33,529,000
                                                        --------------------   -----------------
                 Total loans                                    238,928,000         236,477,000
       Less:  allowance for loan losses                         (3,395,000)         (3,351,000)
                                                        --------------------   -----------------
                                                                235,533,000         233,126,000

       Mortgage loans held for sale                               1,500,000           2,037,000

       Goodwill                                                   5,554,000           5,554,000
       Furniture, equipment and improvements, net                 2,326,000           2,325,000
       Accrued interest receivable                                2,452,000           2,308,000
       Other assets                                               2,994,000           2,363,000
                                                        --------------------   -----------------
    TOTAL ASSETS                                               $444,016,000        $447,386,000
                                                        ====================   =================

       LIABILITIES AND STOCKHOLDERS' EQUITY

    Deposits:
       Demand (noninterest -bearing)                            $97,382,000         $93,911,000
       NOW                                                       37,852,000          38,385,000
       Money Market                                             107,608,000          93,788,000
       Savings                                                   20,353,000          20,002,000
       Time                                                      84,265,000          87,121,000
                                                        --------------------   -----------------
                 Total deposits                                 347,460,000         333,207,000

    Borrowings under securities repurchase agreement              5,752,000          12,669,000
    Advances from FHLB                                           50,000,000          55,000,000
    Guaranteed preferred beneficial interests in
       Company's debentures                                      10,304,000          10,304,000
    Federal funds purchased                                               0           6,500,000
    Accrued interest payable                                        282,000             270,000
    Other liabilities                                             2,230,000           2,014,000
                                                        --------------------   -----------------
                 Total liabilities                              416,028,000         419,964,000


    Stockholders' equity
       Common stock                                                   2,000               2,000
       Additional paid in capital                                10,066,000          10,066,000
       Retained earnings                                         17,812,000          17,166,000
       Unrealized appreciation (depreciation) on
         available for sale securities, net of tax                  108,000             188,000
                                                        --------------------   -----------------
                 Total stockholders' equity                      27,988,000          27,422,000
                                                        --------------------   -----------------
                                                        --------------------   -----------------
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                 $444,016,000        $447,386,000
                                                        ====================   =================
</TABLE>

                 See Notes to Consolidated Financial Statements


                                       3

<PAGE>


     UNION BANKSHARES, LTD. AND SUBSIDIARY
     CONSOLIDATED STATEMENTS OF INCOME
     FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001



<TABLE>
<CAPTION>
                                                                                             MARCH 31,
                                                                                 --------------------------------------
                                                                                             2002                 2001

<S>                                                                                    <C>                  <C>

INTEREST INCOME:
     Interest and fees on loans                                                        $4,299,000           $5,323,000
     Interest on investment securities:
         U.S. government agencies and corporations                                         39,000            1,608,000
         States and other political subdivisions                                        2,385,000              367,000
     Interest on federal funds sold
         and interest bearing deposits at other banks                                       7,000              105,000
                                                                                 -----------------   ------------------
                   Total interest income                                                6,730,000            7,403,000

INTEREST EXPENSE:
     Interest on deposits                                                               1,475,000            2,223,000
     Interest on federal funds purchased                                                   61,000                  -
     Interest on notes payable                                                            673,000              625,000
                                                                                 -----------------   ------------------
                   Total interest expense                                               2,209,000            2,848,000
                                                                                 -----------------   ------------------
NET INTEREST INCOME BEFORE PROVISION FOR
     LOAN LOSS                                                                          4,521,000            4,555,000
PROVISION FOR LOAN LOSS                                                                    75,000               89,000
                                                                                 -----------------   ------------------
NET INTEREST INCOME AFTER PROVISION FOR
     LOAN LOSS                                                                          4,446,000            4,466,000
NONINTEREST INCOME:
     Service charges                                                                      235,000              216,000
     Gain on sale of securities available for sale                                        151,000               13,000
     Other                                                                                188,000              160,000
                                                                                 -----------------   ------------------
                   Total non interest income                                              574,000              389,000
                                                                                 -----------------   ------------------
NONINTEREST EXPENSE:
     Salaries and employee benefits                                                     2,337,000            2,196,000
     Amortization of goodwill                                                                   0              135,000
     Occupancy and equipment                                                              499,000              512,000
     Other                                                                              1,261,000            1,089,000
                                                                                 -----------------   ------------------
                   Total non interest expense                                           4,097,000            3,932,000
                                                                                 -----------------   ------------------

INCOME BEFORE INCOME TAX EXPENSE                                                          923,000              923,000
INCOME TAX EXPENSE                                                                        277,000              295,000
                                                                                 -----------------   ------------------
NET INCOME                                                                               $646,000             $628,000
                                                                                 =================   ==================

EARNINGS PER COMMON SHARE  BASIC
     Net income per share                                                                   $0.27                $0.26
                                                                                 =================   ==================
     Weighted average number of common shares outstanding                               2,410,078            2,399,376
                                                                                 =================   ==================

EARNINGS PER COMMON SHARE DILUTED
     Net income per share                                                                   $0.24                $0.23
                                                                                 =================   ==================
     Weighted average number of common shares outstanding                               2,639,996            2,685,206
                                                                                 =================   ==================
</TABLE>

                 See Notes to Consolidated Financial Statements


                                       4

<PAGE>



UNION  BANKSHARES, LTD. AND SUBSIDIARY
CONSOLIDATED  STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001

 (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                Three Months Ended
                                                                                     March  31,
                                                                   -----------------------------------------
                                                                                2002                   2001
                                                                   ------------------    -------------------

<S>                                                                        <C>                  <C>
NET  INCOME                                                                $646,000               $628,000


OTHER COMPREHENSIVE INCOME (LOSS)
  Unrealized appreciation (depreciation) on
  available-for-sale securities, net of income taxes of
  $8,000 and $400,000, respectively.                                         15,000                779,000


LESS:  reclassification adjustment for realized
  (gain)  losses included in net income, net of
  income  taxes of ($56,000) and ($5,000), respectively.                    (95,000)                (8,000)


                                                                   ------------------    -------------------
COMPREHENSIVE INCOME                                                       $566,000             $1,399,000
                                                                   ==================    ===================
</TABLE>


                 See Notes to Consolidated Financial Statements


                                       5

<PAGE>



UNION BANKSHARES, LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED



(UNAUDITED)
<TABLE>
<CAPTION>
                                                                       MARCH      31,
                                                         ------------------------------------
                                                                    2002                2001
                                                                    ----                ----

<S>                                                          <C>                 <C>
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES                $574,000         ($4,374,000)
                                                               ---------        ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from maturities of available-for-sale
       securities                                             10,979,000           5,773,000
    Proceeds from sale of available-for-sale
       securities                                             17,691,000          58,546,000
    Purchase of available-for-sale securities                (19,372,000)        (73,635,000)
    Net increase in loans                                     (1,743,000)         (2,364,000)
    Purchase of furniture and equipment                         (106,000)            (53,000)
                                                         ------------------------------------
Net cash provided by (used in) investing activities            7,449,000         (11,733,000)
                                                         ------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Increase in deposits                                      14,253,000          11,148,000
    Decrease in fed funds purchased                           (6,500,000)                -
    Proceeds from issuance of notes payable                   20,000,000          80,000,000
    Principal repayments of notes payable                    (25,000,000)        (73,600,000)
    Proceeds from issuance of common stock                           -                 9,000
    Net borrowings under repurchase agreement                 (6,917,000)                -
                                                         ------------------------------------
Net cash (used in) provided by financing activities           (4,164,000)         17,557,000
                                                         ------------------------------------

Net increase in cash and cash equivalents                      3,859,000           1,450,000

Cash and cash equivalents, beginning of year                  15,512,000          19,551,000
                                                         ------------------------------------
Cash and cash equivalents, end of quarter                    $19,371,000         $21,001,000
                                                         ====================================
</TABLE>

                 See Notes to Consolidated Financial Statements


                                       6

<PAGE>



                      UNION BANKSHARES, LTD. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                                 MARCH 31, 2002



NOTE 1.  BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q and do not include all the
information and note disclosures required by generally accepted accounting
principles for complete financial statements. For further information, refer to
the consolidated financial statements and related footnotes included in the
Company's annual report on Form 10-K for the year ended December 31, 2001. In
the opinion of management, the consolidated financial statements presented
herein include all adjustments (consisting of normal recurring accruals)
necessary to present fairly, in all material respects, the consolidated
financial position of Union Bankshares, Ltd. (the "Company") as of March 31,
2002 and the Company's results of operations for the three months ended March
31, 2002 and 2001, statements of comprehensive income for the three months ended
March 31, 2002 and 2001, and statements of cash flows for the three months ended
March 31, 2002 and 2001.

The consolidated balance sheet of the Company as of December 31, 2001, has been
derived from the audited consolidated balance sheet of the Company as of that
date.

Certain reclassifications have been made to the March 31, 2001 Consolidated
Financial Statements to conform to the March 31, 2002 Consolidated Financial
Statements.


NOTE 2.  RESULTS OF OPERATIONS

The results of operations for the three months ended March 31, 2002 and 2001 are
not necessarily indicative of the results to be expected for the full year.



NOTE 3.  EARNINGS PER COMMON SHARE

Earnings per common share are computed by dividing net income available for
common stockholders by the weighted average number of shares of common stock
outstanding during the period plus the equivalent number of shares purchasable
under common stock options, if dilutive. Earnings per common share were affected
by 229,918 shares purchasable pursuant to exercisable options during the three
months ended March 31, 2002. Earnings per common share were affected by 285,830
shares purchasable pursuant to exercisable options during the three months ended
March 31, 2001.


                                       7

<PAGE>

NOTE 4.  NOTES PAYABLE

During the first three months of 2002, the Company's subsidiary, Union Bank &
Trust (the "Bank") entered into 4 advance agreements totaling $20.0 million with
the Federal Home Loan Bank of Topeka bearing interest rates ranging from 1.82%
to 1.96%. During this same period the Bank repaid $25.0 million of its advances
from the FHLB. As of March 31, 2002, FHLB advances outstanding are $50.0 million
with $5.0 million maturing each on April 22, 2002, May 10, 2002, May 23, 2002,
July 26,2002, October 3, 2002 and December 31, 2002, January 31, 2003, July 22,
2003, October 15, 2003 and January 22, 2004.



NOTE 5.  GOODWILL

The Company, effective January 1, 2002, adopted Statement of Financial
Accounting Standard (SFAS) 142, "Goodwill and Other Intangible Assets." The
impact of adopting SFAS 142 resulted in no longer being required to record
amortization of goodwill. The effect is an increase in net income of $135,000.

Additionally, the Standard requires a transitional evaluation of goodwill
impairment. This evaluation was conducted using standard valuation methodologies
the result of which indicated no impairment of goodwill.


                                       8

<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


The following commentary presents management's discussion and analysis of the
Company's financial performance and financial condition for the first quarter
ended March 31, 2002. The discussion is a supplement to the Consolidated
Financial Statements and should be read in conjunction with those statements and
footnotes.

GENERAL

The Company's profitability, like that of most similar financial institutions,
depends largely on the Bank's net interest income, which is the difference
between its interest income on interest-earning assets, such as loans and
investments, and its interest expense on interest-bearing liabilities, such as
deposits and borrowings. Accordingly, the Company's results of operations and
financial condition are largely dependent on movements in market interest rates
and its ability to manage its assets in response to such movements. The
difference between the amount of the total interest-bearing assets and
interest-bearing liabilities which reprice within a given time period could have
a negative effect on the Bank's net interest income depending on whether such
difference was positive or negative and whether interest rates are rising or
falling.

Results of operations for financial institutions, including the Company, may be
materially and adversely affected by changes in prevailing economic conditions,
including declines in real estate values, rapid changes in interest rates and
the monetary and fiscal policies of the federal government. The profitability of
the Company depends in part on the spread between the interest rates earned on
assets and the interest rates paid on deposits and other interest-bearing
liabilities. Although management believes that the maturities of the Company's
assets are moderately balanced in relation to maturities of liabilities
("asset/liability management"), asset/liability management involves estimates as
to how changes in the general level of interest rates will impact the yields
earned on assets and the rates paid on liabilities. A decrease in interest rate
spreads would have a negative effect on the net interest income and
profitability of the Company, and we cannot give any assurance that this spread
will not decrease. Although economic conditions in the Denver metropolitan area
have been generally strong in recent years, the Denver economy has slowed in
recent months, as has the national economy. Moreover, substantially all of the
loans of the Company are to businesses and individuals in the Denver area, and
any significant decline in the economy of this market area could have an adverse
impact on the Company.


RESULTS OF OPERATIONS

OVERVIEW: Union Bankshares, Ltd. (the "Company") reported net income of $646,000
for the quarter ended March 31, 2002, an increase of 2.9% from net income of
$628,000 for the first quarter of 2001. 2002 first quarter


                                       9

<PAGE>

earnings were positively impacted by a $138,000 increase in gain on sale of
securities available for sale, a $14,000 decrease in provision for loan loss, a
$47,000 increase in other noninterest income, a $135,000 decrease in
amortization of goodwill and an $18,000 decrease in income tax expense. These
improvements were offset by a $34,000 decrease in net interest income and a
$300,000 increase in the other categories of noninterest expense. Net income per
share (diluted) was $.24 for the three months ended March 31, 2002 compared to
$.23 per share (diluted) for the 2001 period. Return on average assets and
average equity were .58% and 9.34%, respectively, for the first quarter of 2002
compared to .66% and 10.18%, respectively, for the first quarter of 2001.

During the first quarter of 2002, the loan portfolio at Union Bank & Trust (the
"Bank") increased $2.5 million, its mortgage loans held for sale decreased $0.5
million, its deposits increased $14.3 million, and its notes payable decreased
$5.0 million.

INTEREST INCOME: Interest income decreased $673,000, or 9.1%, to $6,730,000 for
the first quarter of 2002 from $7,403,000 for the comparable 2001 period. This
decrease was primarily a result of the decrease in interest rates which
reflected the Federal Reserve's aggressive reductions in the federal funds rate
during 2001, in response to general economic conditions, partially offset by the
increase in total interest earning assets and the rate-related decline in
interest expense. The Company's net yield on interest earning assets on a fully
tax equivalent basis was 6.74% for the first quarter of 2002, which reflects a
decrease of 196 basis points (each basis point equals 1/100 of 1%) from the
comparable 2001 period. The average yield on loans decreased from 9.83% in the
2001 period to 7.34% in the 2002 period, and the average yield on securities
held by the Company decreased from 6.91% in the 2001 period to 5.99% in the 2002
period. Interest income on loans was $1,024,000 lower in the 2002 period,
interest income on securities increased $449,000 in the 2002 period, and
interest income on federal funds sold decreased $98,000 in the 2002 period.

INTEREST EXPENSE: Interest expense decreased $639,000, or 22.4%, to $2,209,000
for the quarter ended March 31, 2002 from $2,848,000 for the quarter ended March
31, 2001. This decrease is primarily due to a decrease of $748,000 in interest
expense on deposits offset by an increase of $48,000 in interest expense on
notes payable to the Federal Home Loan Bank of Topeka ("FHLB") and a increase of
$61,000 in interest expense on federal funds purchased. Average rates paid on
interest bearing deposits decreased 150 basis points to 2.45% in the first
quarter of 2002 from 3.95% in the first quarter of 2001.

NET INTEREST INCOME: Net interest income before provision for loan loss was
$4,521,000 for the quarter ended March 31, 2002, a decrease of $34,000, or 0.7%,
over the first quarter of 2001. Net interest margin decreased 84 basis points
from 5.43% in the 2001 period to 4.59% in the 2002 period. The decrease in net
interest income is primarily due to a $1,024,000 decrease in interest income on
loans, a $98,000 decrease in interest income on federal funds sold and a
$639,000 decrease in interest expense, partially offset by a $449,000 increase
in interest income on investment securities. The Company's average cost of funds
decreased 155


                                       10

<PAGE>

basis points to 2.80% in the first quarter of 2002 from 4.35% in the first
quarter of 2001. The Company's average yield on interest earning assets
decreased 196 basis points in the 2002 period from 8.70% in the 2001 period to
6.74%.

NONINTEREST INCOME: Noninterest income increased $185,000, or 47.6%, for the
quarter ended March 31, 2002 to $574,000 from $389,000 for the quarter ended
March 31, 2001. This increase was primarily due to a $138,000 increase in the
gain on sale of securities available for sale, a $19,000 increase in service
charges and an increase of $28,000 in other noninterest income.

NONINTEREST EXPENSE: Noninterest expense increased $165,000, or 4.2%, for the
first quarter of 2002 to $4,097,000 compared to $3,932,000 in the first quarter
of 2001. This increase was primarily due to increases in salaries and benefits
relating primarily to annual merit increases and small increases in several
other operating expenses, partially offset by a decrease in amortization of
goodwill.


LIQUIDITY AND SOURCES OF FUNDS

The Company's total assets decreased to $444.0 million at March 31, 2002 from
$447.4 million at December 31, 2001. During the quarter ended March 31, 2002
deposits increased $14.3 million to $347.5 million at March 31, 2002 from $333.2
million at December 31, 2001. None of the Company's deposits at March 31, 2002
were brokered deposits.

The Company has established a revolving line of credit with Gold Banc in an
amount not to exceed $3.0 million. Any monies advanced under this line will be
used solely for the capital needs of the Company or to purchase the stock of
banks or bank holding companies. This line of credit will be available for one
year only, with renewals to be negotiated each year. There is currently no
amount outstanding under this line of credit.

During the first quarter of 2002, the Bank borrowed $20.0 million from the FHLB
with rates ranging from 1.82% to 1.96% and maturities ranging from one month to
three months. The purpose for these loans was to use an alternative source of
funding to fund current loan growth at a time when liquidation of a portion of
the Bank's investment portfolio was not believed to be prudent. The Company
expects that these loans will be repaid with liquidity from normal increases in
deposits coupled with liquidity from the Bank's investment portfolio.

During the first quarter of 2002, the Bank repaid $25.0 million of the FHLB
loans.

Management anticipates that the Company will continue to rely primarily on
customer deposits, sales and maturities of investment securities, loan sales and
loan repayments, as well as retained earnings to provide liquidity. These funds
are used to make loans, to acquire investment securities and other assets and to
fund continuing operations. The Company believes that its customer deposits will
continue to provide a


                                       11

<PAGE>

strong source of liquidity because of the high percentage of core deposits, many
of which are held as compensating balances under long-standing loan
relationships. As a secondary source of funds, management uses federal funds and
its membership in the FHLB.


PROVISION FOR LOAN LOSS

The Company charged $75,000 to Provision for Loan Loss in the first quarter of
2002 and $89,000 for the comparable period in 2001. The ratio of loan loss
reserve to total loans was 1.42% at March 31, 2002 and 1.42% at December 31,
2001. The Company sets its loan loss reserve at a level considered adequate to
provide for anticipated loan losses based on management's assessment of various
factors affecting the loan portfolio. These factors include a review of problem
loans, business conditions, loan loss experience and an overall evaluation of
the quality of the collateral, holding and disposal costs and costs of capital.
Provision for loan loss is a direct charge against income and is determined by
management based on the adequacy of the loan loss reserve.

Inability of borrowers to repay loans can erode earnings and capital of banks.
Like all banks, the Company maintains an allowance for loan losses to provide
for loan defaults and nonperformance, The allowance is based on prior experience
with loan losses, as well as an evaluation of the risks in the current
portfolio, and is maintained at a level considered adequate by management to
absorb anticipated losses. The amount of future losses is susceptible to changes
in economic, operating and other conditions, including changes in interest
rates, that may be beyond management's control, and such losses may exceed
current estimates. We cannot give any assurance that the Company's allowance for
loan losses will be adequate to cover actual losses. Future provisions for loan
losses could materially and adversely affect results of operations of the
Company. In addition, various regulatory agencies, as an integral part of their
examination process, periodically review the Bank's allowance for loan losses.
An increase in the Bank's provision for loan losses would negatively affect the
Company's earnings.

ASSET QUALITY

The Company's lending activities are guided by its Statement of Lending Policies
and Procedures. These policies are annually reviewed and approved by the Bank's
Board of Directors. The Company supplements its internal supervision and audits
of its lending operation with independent examinations performed by professional
experienced consultants and auditors. The Company monitors concentrations of
loans by collateral, purpose and industry. The Company has no significant
exposure to highly leveraged transactions and has no foreign credits in its loan
portfolio.

Total nonperforming assets were $1,709,000 and $2,557,000 at March 31, 2002 and
December 31, 2001, respectively. Other Real Estate Owned (OREO) was $0 and $0 at
both March 31, 2002 and December 31, 2001. At March 31, 2002 securities
available for sale totaled $165.8 million, or 95.1% of the total portfolio.
Securities pledged to repurchase agreements totaled


                                       12

<PAGE>

$5.8 million, or 3.3% of the total portfolio. Other securities (investment in
FHLB stock) totaled $2.8 million, or 1.6% of the total portfolio. Securities
available for sale are those securities which may be sold in response to changes
in interest rates, changes in the Company's short term liquidity needs or
changes in prepayment risk, and are stated at estimated market value. At March
31, 2002, the market value of investments available for sale exceeded amortized
cost by approximately $172,000.


MARKET RISK

Market risk arises from changes in interest rates. The Company has risk
management policies to monitor and limit exposure to market risk as discussed in
the Company's Form 10-K for the year ended December 31, 2001.

As noted in the Company's Form 10-K for the year ended December 31, 2001,
management has generally sought to control the exposure of the Company's
securities portfolio to rising interest rates by maintaining a position within a
narrow range around an "earnings neutral position" (i.e. the mix of assets and
liabilities that generate a net interest margin that is least affected by
interest rate changes).

Accordingly, in addition to performing gap analysis, management also evaluates
the impact of differing interest rates on net interest income using an earnings
simulation model. The model incorporates the factors not captured by gap
analysis by projecting income under a variety of interest rate scenarios. The
following table shows the anticipated effect on net interest income with a 100
and 200 basis point parallel shift up or down interest rate scenario.

                              Change in  Net Interest      Percent Change in Net
         Change in Rate               Income                   Interest Income
         --------------           --------------           -------------------

          +200 bp                  $ (22,000)                      (.1)%
          +100 bp                  $  44,000                        .2 %
          -100 bp                  $ (69,000)                      (.4)%
          -200 bp                  $(173,000)                      (.9)%


The Company uses a measurement tool known as dollar duration to help maintain an
earnings neutral position. As of March 31, 2002, the dollar duration of the
investment portfolio was 4.98 compared to 5.34 at December 31, 2001. This
decrease in dollar duration resulted from the replacement of securities which
were sold, matured or called during the first quarter of 2002 with securities
with slightly higher yields and similar maturities. The Company may also engage
in hedging transactions to control interest rate risk. The effect of these
efforts in any given period may be to negatively impact reported net
non-interest income and the interest earned on the securities.


                                       13

<PAGE>

CAPITAL RESOURCES

The Company's capital adequacy is a direct measurement of the overall financial
strength of the Company and its ability to absorb adverse market conditions. In
addition, the capital position of the Company provides a mechanism to promote
public confidence in the Company and the Bank.

The Company's total stockholders' equity increased $566,000 to $28.0 million at
March 31, 2002 from $27.4 million at December 31, 2001. This increase in
stockholders' equity was due to the retention of earnings in the current year
offset by the net effect of FAS 115 which requires financial institutions to
mark their available for sale securities portfolio to market.

The Federal Reserve Board and FDIC guidelines require a minimum of a 4% Tier 1
core capital to risk-weighted assets ratio and an 8% total qualifying capital to
risk-weighted assets ratio. Due to the Company's high level of capital and the
level of risk in its current asset mix, the Company's risk based capital ratios
exceed the regulatory minimum ratios. The Company's core capital to risk
weighted assets was 12.01% at March 31, 2002 and its total qualifying capital to
risk weighted assets was 13.64%. As of March 31, 2002 the Bank also exceeded the
minimum regulatory risk based capital ratios.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See Market Risk beginning on page 13.


"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995.

Statements which are not historical facts contained in this document are forward
looking statements that involve risks and uncertainties that could cause actual
results to differ from projected results. Factors that could cause actual
results to differ materially include, among others: continued success of the
Bank's branching strategy, general economic conditions, economic conditions in
the Denver metropolitan area, the monetary policy of the Federal Reserve Board,
changes in interest rates, inflation, instability in the financial markets
relating to terrorist activities and the response thereto, competition in the
banking business, changes in the state and federal regulatory regime applicable
to the Company's and the Bank's operations, the results of financing efforts and
other risk factors detailed in the Company's Forms 10-K,10-Q, and 8-K filed with
the Securities and Exchange Commission.

Information included in this document includes "forward-looking statements"
which can be identified by the use of forward-looking terminology such as "may,"
"will," "anticipate," "believe," "estimate," or "continue," or the negative
thereof or other variations thereon or comparable terminology. The statements in
"risk factors" and other


                                       14

<PAGE>

statements and disclaimers in the Company's Annual Report on Form 10-KSB
constitute cautionary statements identifying important factors, including
certain risks and uncertainties, with respect to such forward-looking statements
that could cause actual results to differ materially from those reflected in
such forward-looking statements.


                                       15

<PAGE>


                             UNION BANKSHARES, LTD.

                           PART II - OTHER INFORMATION



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K


  Exhibit
  Number                            Description of Exhibit
-------------        ----------------------------------------------------------

   10.1              Second Amended and Restated Shareholders' Agreement of
                     Union Bankshares, Ltd.




                                       16

<PAGE>


                                   SIGNATURES


Pursuant to the requirements 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, LTD.
                                  (Registrant)




May 10, 2002                      /S/ BRUCE E. HALL
                                  -------------------------------------

                                  Bruce E. Hall
                                  Vice President, Treasurer and
                                     Secretary
                                  (Authorized Officer and Principal
                                  Financial Officer of the Registrant)


                                       17