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CODE OF ETHICS                                                     Exhibit 14.2

No profession or industry has maintained higher standards of conduct nor
provided greater public service than the banking industry. Banks have
traditionally recognized their duty to act in a manner of public trust and
confidence.

A bank's reputation for integrity is perhaps its most valuable asset and is
determined by the conduct of its Directors, Officers and employees. Each of us
must strive to avoid situations that might cause a conflict of interest between
the bank, its customers, its shareholders and ourselves. The following is the
bank's policy. All Directors and employees are expected to adhere to these
guidelines. Failure to comply with Union Bank's Code of Ethics may result in
disciplinary action, up to and including termination of employment.

The Sarbanes-Oxley Act of 2002 places particular importance on the ethical
behavior of the directors and senior financial executives of Union Bank. This
law requires Union Bankshares, Inc. to provide full, fair, accurate, timely and
understandable disclosure in reports filed with the Securities & Exchange
Commission, and to comply with all applicable government laws, rules and
regulations. Additionally, as Union Bankshares, Inc. stock is traded on the
American Stock Exchange, all Amex rules and regulations will be followed.

A. Confidential Information

      1.    As set forth by the Gramm-Leach-Bliley Act of 1999 as well as by
            state law, confidential information acquired through the course of
            employment about the bank and its customers is to be used solely
            for banking purposes and not as a basis for furthering a private
            interest or as a means of making profit.

      2.    A staff member may not disclose confidential information of one
            customer to another customer or to any other outside party, unless
            allowed by federal or state law. Disclosure to other bank employees
            should be kept to a minimum on a need-to-know basis.

Information, regardless of the form in which it is stored or presented, is an
asset of Union Bank. As such, it is the responsibility of each employee to
protect it from unauthorized use, change, destruction and disclosure. Please
realize that all bank information can be subpoenaed; therefore, the
appropriateness and the professionalism of all bank related information is
paramount.

All employees and directors should be familiar with Union Bank's privacy
policy. If you have questions or are unsure of the procedures, please contact
the Bank's Privacy Officer. Any breach of confidence by an employee will result
in immediate disciplinary action, which may include termination of employment.

B. Conflict of Interest

      1.    A bank employee or Director shall not represent Union Bank in any
            transaction where he or she has any material connection or
            substantial financial interest. Specifically, a material connection
            includes the involvement of any family member. By extension, close
            personal friends also provide the potential for a similar conflict
            of interest. This policy includes, but is not limited to, approval
            of bank overdrafts, authorizing or accepting checks on uncollected
            funds, waiving of bank charges, late charges or other normal fees.
            It also includes making loans, waiving required documentation or
            any similar type of activity.

      2.    A Union Bank employee may not accept a directorship of another
            corporation without approval of the President. Charitable and
            nonprofit organizations are exceptions to this general policy.

      3.    A Union Bank employee who is authorized to purchase investments for
            the Bank may not have a brokerage account with any of the Bank's
            brokerage houses.

      4.    Union Bank will not give preferential treatment to any outside
            interest of our Directors or Employees. Utilization of these
            outside interests will be on the same basis as any independent
            vendor and in accordance with the Related Person Transactions
            Approval Policy.

      5.    No employee involved in purchasing or in investing for Union Bank
            or a member of his/her family will accept any gift, hospitality, or
            entertainment that could potentially influence a bank's purchasing
            decision or appear to have such influence.

C. Fraudulent or Dishonest Activities

Policy Statement:
-----------------

Section 806 of the Sarbanes-Oxley Act of 2002 creates a civil cause of action
protecting employees, termed "whistleblowers" in the Act, who are discharged or
adversely affected in their employment conditions because they lawfully provide
information, cause information to be provided, or otherwise assist in any
investigation of conduct of the employer, officers or other employees of the
Bank, which the employee "reasonably believes" to constitute a violation of the
federal criminal statutes prohibiting mail, wire, bank or securities fraud, any
rule or regulation of the Securities and Exchange Commission, or any provision
of federal law relating to fraud against shareholders.
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Definition of Whistleblower
---------------------------

An employee who informs a manager, supervisor, or the Audit Committee about an
activity which that person believes to be fraudulent or dishonest.

Rights and Responsibilities:
----------------------------

All employees of Union Bank are encouraged to promptly report fraudulent,
dishonest or questionable conduct. To determine if conduct is fraudulent,
dishonest or questionable, consider the following:

      1.    Is the action legal?
      2.    Does it comply with Union Bank's values?
      3.    If you do it, will you feel bad?
      4.    How will it look in the newspaper?
      5.    If you know its wrong, don't do it.
      6.    If you're not sure, ask.
      7.    Keep asking until you get an answer.

An employee should report his or her concerns to a supervisor, manager or other
bank officer. If for any reason an employee finds it difficult to report his or
her concerns to a supervisor, manager or other bank officer, the employee can
confidentially and anonymously report suspected misconduct directly to the
audit committee. To do so, write to: Audit Committee, Union Bank, P. O. Box
1346, Morrisville, VT 05661. Please note "confidential" on the envelope and it
will be delivered to an Audit Committee member. All other mail is opened by the
Bank's internal auditor.

During the investigation process, best efforts will be made to protect the
identification of those who file reports. However, confidentiality during this
process cannot be guaranteed. Union Bank, in accordance with the Sarbanes-Oxley
Act, will protect those who report fraudulent, dishonest or questionable
conduct from retaliation.

The employer or it's employees may not retaliate against a whistleblower with
the intent or effect of adversely affecting the terms or conditions of
employment (including but not limited to, threats of physical harm, loss of
job, punitive work assignments, or impact on salary or wages). Whistleblowers
who believe that they have been retaliated against may file a written complaint
with the Audit Committee. A proven complaint of retaliation shall result in a
proper remedy for the person harmed and the initiation of disciplinary action,
up to and including dismissal, against the retaliating person. This protection
from retaliation is not intended to prohibit managers or supervisors from
taking action, including disciplinary action, in the usual scope of their
duties and based on valid performance-related factors.

The Audit Committee needs the extended "eyes and ears" of the employee
community in order to help make its accounting oversight effective and well
focused. The Audit Committee shall conduct or direct the investigations of all
suspected fraudulent or dishonest conduct in consultations with such bank
officials as may be necessary or appropriate. After an investigation is
complete, the Audit Committee will take the appropriate steps in resolving the
conduct. If you are not satisfied with the Audit Committee's findings, you have
the right to report the conduct to the Department of Labor.

D. Gifts, Fees, Legacies and Loans

      1.    A Union Bank employee may not accept a loan from a bank customer or
            supplier. This prohibition does not apply to loans from banks or
            other financial institutions on customary terms to finance proper
            credit needs such as home mortgage and consumer credit loans, or if
            the customer is a close relative.

      2.    Union Bank follows "Regulation O" guidelines when lending to
            Executive Officers and Directors of the bank. Executive Officers
            and Directors must adhere to the following general provisions of
            "Regulation O".

            a.    No Executive Officer may become indebted to the bank in
                  excess of $100,000 unless the borrowings are for their
                  primary residence, to finance their children's education or
                  are secured by acceptable liquid assets.

            b.    All loans made to Executive Officers and Directors must be
                  approved by the Board of Directors in compliance with the
                  Related Person Transactions Approval Policy prior to
                  disbursement and be granted on the same terms and
                  creditworthiness as any other borrower, or through a bank
                  wide loan discount plan as long as the plan does not give
                  preference to any insiders.

                  All loans to executive officers must be made subject to the
                  condition that the loan be written "due and payable upon
                  demand."

            c.    When contemplating borrowings of any nature, Executive
                  Officers and Directors must be aware of the credit
                  limitations and guidelines provided in "Regulation O".
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      3.    A Director, or Employee may not solicit or receive anything of
            value for making a loan.

      4.    A Director or Employee may not accept a fee for performance of any
            act that the bank could have performed.

      5.    It is improper for an Employee to solicit or accept a gift from a
            customer, supplier or from any other person or business seeking a
            business or supplier relationship with Union Bank. This prohibition
            does not apply to gifts from relatives, food or entertainment at a
            luncheon or business meeting, advertising or promotional materials
            of nominal value on special occasions such as holidays. Nominal
            value is a value that would be within the ability of the officer to
            reciprocate on a personal basis or with legitimate claim for
            reimbursement under similar circumstances. An employee of Union
            Bank should decline any gift where there would be even the
            slightest implication of influence on future business dealings.

      6.    Any Director, Officer or Employee will refuse to serve personally
            as executor, trustee, or guardian of an estate or trust of a bank
            customer unless approved by the Board of Directors except where the
            customer is a close relative.

      7.    A staff member may not do indirectly what he or she is prohibited
            from doing directly, to include, but not limited to arranging to
            have a member of his or her family accept a gift from a customer.

E. Outside Interests

All outside business interests or employment for non-officers must be approved
by the immediate supervisor; for Officers, approval must come from the
President. Union Bank management will be liberal in granting approvals unless
there is a potential appearance of a conflict of interest. Specific types of
outside activities which could raise questions of conflict might include:

      1.    Employment by a firm that competes with Union Bank.
      2.    Preparation of material that will be presented to Union Bank by
            anyone seeking a loan.
      3.    Delivering investment counsel.
      4.    Rendering accounting services.
      5.    Drafting wills or practicing law.
      6.    Performing any service that Union Bank could perform.
      7.    Use of Union Bank equipment, supplies, or facilities.
      8.    Data processing/consulting services.

All employees should disclose to the Internal Audit Officer all potential
conflicts of interest, including those in which they have been inadvertently
placed due to either business or personal relationships with customers,
suppliers, business associates or competitors of Union Bank.

In general, it is the policy of the Bank not to hire an individual who is
employed by the registered independent accounting firm and was part of the
engagement team that audited the Bank's financial statements in any of the
previous three years.

F. Investments

      1.    It is improper for a Union Bank Director, Officer, or Employee to
            invest in, or enable other to invest in, a bank customer's business
            unless the interest is acquired through an organized exchange, and
            the individual has no access to confidential or material inside
            information.

      2.    It is improper for a Union Bank Officer or employee to subscribe to
            new issues of stock in the bank customer's business.

      3.    Major NASD (National Association of Securities Dealers) exchanges
            require that members avoid handling the speculative accounts of
            bank-employed persons without the written consent of the employer.
            Speculative investments such as margin buying, short accounts,
            puts, calls, or combinations are discouraged.

      4.    There are no restrictions on investing in U.S. government
            securities, municipal bonds, or mutual funds.