UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                          Washington, DC  20549
                                FORM 10-K
                                    
(Mark One)
( X )     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
     SECURITIES EXCHANGE ACT OF 1934  (FEE REQUIRED)
               For the fiscal year ended December 31, 1997
                                    
                                   OR
                                    
(  ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
     SECURITIES EXCHANGE ACT OF 1934  (NO FEE REQUIRED)
          For the transition period from _________ to _________
                                    
                     Commission File Number 0-12958
                                    
                        UNION BANKSHARES COMPANY
         (Exact name of registrant as specified in its charter)

       MAINE                                  01-0395131
(State or other jurisdiction            (IRS Employer Identification No.)
of incorporation of organization)

66 Main Street, Ellsworth, Maine                04605
(Address of Principal Executive Offices)      (Zip Code)

Registrant's telephone number, including area code:    (207) 667-2504

Securities registered pursuant to Section 12 (b) of the Act:
 Title of each class         Name of each exchange on which registered
         None                                   None

      Securities registered pursuant to Section 12 (g) of the Act:
                     Common Stock   $12.50 Par Value
                                    
Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for 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   XXX
NO _______

Indicate by checkmark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K ( 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this form 10-K   [   ]

The aggregate market value of the voting stock held by non-affiliates of
the registrant as of February 6, 1998, was approximately $54,272,125.

482,767 shares of the Company's Common Stock, $12.50 par value, were
issued and outstanding on February 17, 1998.
                        UNION BANKSHARES COMPANY
                                    
                           INDEX TO FORM 10-K
                                    
PART I                                                  Page No.

Item 1:      Business                                     3-15
Item 2:      Properties                                  15-16
Item 3:      Legal Proceedings                             16
Item 4.      Submission of Matters to a Vote of 
               Security Holders                            16

PART II

Item 5:      Market for Registrant's Common Equity 
               and Related Stockholder Matters             17
Item 6:      Selected Financial Data                       18
Item 7:      Management's Discussion and Analysis 
               of Financial Condition and
               Results of Operations                       19
Item 7A:     Quantitative and Qualitative Disclosures 
               About Market Risk                         19-20
Item 8:      Financial Statements and Supplementary Data   20
Item 9:      Changes in and Disagreements with 
               Accountants on Accounting and
               Financial Disclosure                        20

PART III

Item 10:     Directors and Executive Officers of  
               the Registrant                              20
Item 11:     Executive Compensation                        20
Item 12:     Security Ownership of Certain Beneficial 
               Owners and Management                       20
Item 13:     Certain Relationship and Related 
               Transactions                                20

PART IV

Item 14:     Exhibits, Financial Statement Schedules 
               and Reports on Form 8-K                   21-22

Signatures                                                 23

                                 PART I

ITEM I:  Business

Union Bankshares Company is a one-bank holding company incorporated in
July 1984, organized under the laws of the State of Maine, that has
acquired 99.928% of the common stock of Union Trust Company.  The
Company's only subsidiary is the Bank.  Union Bankshares' holding company
structure can be used to engage in permitted banking related activities,
either directly, through newly formed subsidiaries, or by acquiring
companies already established in those activities.  The Company has no
immediate plans to engage in such activities, but could do so if such
action should appear desirable.

Union Trust is a full-service, independent, community bank that is
locally owned and operated.  Through its eleven offices, Union Trust
serves the financial needs of individuals, businesses, municipalities and
organizations in Hancock and Washington Counties.  Union Trust offers a
full range of consumer, commercial, trust and investment services.  Now
in its 110th year, Union Trust is committed to providing outstanding
personalized service and maintaining and expanding its position as one of
Maine's preeminent community banks.

Union Trust Company supports the people and communities it serves by
contributing to programs that address human needs within the community.
It also supports the volunteerism of the Bank's employees, directors and
retirees.  Reinvesting local money locally builds strong communities.
Through these programs, Union Trust is able to give back to the community
it serves.

On a continual basis, the Bank introduces new services and makes
improvements to current offerings that will add value to customer
relationships.  Some of the service additions and improvements made
during 1997 include:

    Implemented new procedures to handle Federal government electronic
  payment requirements, both making and receiving payments.
    Opened a new branch in Bar Harbor with Saturday hours during the
  summer.
    Introduced BankLine PC, 24-hour computer banking.
    Conducted four seminars and two adult education classes and held
  eight Business Round Table luncheons for area professionals to discuss
  business issues.

Union Trust's deposit services include: regular and basic checking
accounts, small business checking, NOW accounts, money market accounts,
Unlimited Club membership, savings accounts, Christmas Club, certificates
of deposit, IRAs and Simplified Employee Pension (SEP) Plans.  The Bank
also provides the following loan products: personal loans, commercial
loans, municipal loans, real estate loans, home equity loans, VISA and
MasterCard credit cards, student loans, reserve checking and overdraft
protection, and lines of credit.  The following cash management services
are also available at Union Trust: coin and currency exchange, merchant
card services, cash concentration, direct debit, electronic Federal tax
payment services (EFTPS), direct deposit payroll services, ACH and wire
transfers.  Union Trust also provides many convenient banking services:
ATM and Convenience Check Cards, BankLine telephone banking and BankLine
PC computer banking, night deposit and safe deposit boxes.

Trust and Investment Services provides three distinct services: (1)
custody and investment management, (2) retirement accounts and planning
and (3) trust services, including estate planning. Investment services
include investment management and advisory services, MutualPARTNERS (an
asset allocation account using mutual funds), custodial services and
safekeeping.  The following retirement savings vehicles are available:
IRAs, Simplified Employee Pension (SEP) plans, SIMPLE IRAs, profit
sharing and 401(k) plans, and money purchase pension plans.  Trust
services include trust administration, personal representative and
fiduciary services and estate planning.

Union Trust's services are offered through our eleven convenient
locations and Customer Service Call Center.  Customers can also access
their accounts 24 hours a day through our network of eleven ATMs,
BankLine telephone banking and BankLine PC computer banking.

The Bank competes actively with other commercial banks and other
financial institutions in its service areas.  In the Bank's immediate
market area, there are two other independent community banks, one savings
and loan association, three savings bank branch offices and three
commercial banks owned outside of the state of Maine.  Strong competition
exists among commercial banks in efforts to obtain new deposits, in the
scope and type of services offered, in interest rates on time deposits
and interest rates charged on loans, and in other aspects of banking.  In
Maine, savings banks are major competitors of commercial banks as a
result of broadened powers granted to savings banks.  In addition, the
Bank like other commercial banks, encounters substantial competition from
other financial institutions engaged in the business of either making
loans or accepting deposit accounts, such as savings and loan
associations, insurance companies, certain mutual funds, and certain
governmental agencies.  Furthermore, the large banks located in Boston,
New York and Providence are active in servicing some of the large Maine
based companies.  The Bank has not made any material changes in its
manner of conducting business during the past five years.

As of December 31, 1997, the Bank employed 129 employees of which 16
employees were part time.  The President, Senior Vice President, Vice
President-Treasurer, Vice President-Deposit Services and Vice President-
Trust are employed by the Bank as well as serve as officers of the
Company.   They are not compensated by the Company for their service and
there are no employees of the Company.

The primary regulator of the Company and the Bank is the Federal Reserve
Bank of Boston and the Bureau of Banking of the State of Maine.

Please refer to Footnote #15 on page 37 of the 1997 Annual Report of
Union Bankshares Company, regarding compliance with capital requirements.

Any loans classified for regulatory purposes as loss, doubtful,
substandard, or special mention that were not disclosed under Item III of
Industry Guide 3 do not (1) represent or result from trends or
uncertainties which management reasonable expects will materially impact
future operating results, liquidity, or capital resources or (2)
represent material credits about which management is aware of any
information which causes management to have serious doubts as to the
ability of such borrowers to comply with the loan repayment terms.

The Company and Bank are not aware of any current recommendations by the
regulatory authorities which if they were to be implemented would have or
would be reasonably likely to have a material effect on the Company's
liquidity, capital resources or operations.

Loans, other than credit card loans, are placed on non accrual status
when, in the opinion of management, there are doubts as to the
collectibility of interest or principal, or when principal or interest is
past due 90 days or more, and the loan is not well secured and in the
process of collection.  Interest previously accrued but not collected is
reversed and charged against interest income at the time the related loan
is placed on non-accrual status.  Principal and accrued interest on
credit card loans are charged to the allowance for credit losses when 180
days past due.

Payments received on non-accrual loans are recorded as reductions of
principal if principal payment is doubtful.

Loans are considered to be restructured when the yield on the
restructured assets is reduced below the current market rates by an
agreement with the borrower.  Generally this occurs when the cash flow of
the borrower is insufficient to service the loan under its original
terms.

In the Bank's market area, the banking business is somewhat seasonal due
to an influx of tourists and seasonal residents returning to the area
each spring and summer.  As a result, the Bank has an annual deposit
swing, from a high point in mid October to a low point in June.  The
deposit swing is predictable and does not have a material adverse effect
on the Bank and its operations.

In July 1997, the Company declared a stock split effected in the form of
a 20 percent stock dividend and a two for one stock split.  Common share
amounts, per share earnings and dividends and common stock and retained
earnings for all years presented in this report have been adjusted to
reflect these transactions.

                        STATISTICAL PRESENTATION

The Supplemental Financial Data presented on the following pages contains
information to facilitate analysis and comparison of sources of income
and exposure to risk.

A.   AVERAGE BALANCE SHEETS AND ANALYSIS OF NET INTEREST INCOME

The following table sets forth the information related to changes in net
interest income.  For purposes of the table and the following discussion,
information is presented regarding (1) the total dollar amount of
interest income of the Company from interest earning assets and the
resulting average yields; (2) the total dollar amount of interest expense
on interest bearing liabilities and the resulting average cost; (3) net
interest income; (4) interest rate spread; and (5) net interest margin.
Information is based on average daily balance during the indicated
periods.  For the purposes of the table and the following discussion, (1)
income from interest earning assets and net interest income are presented
on a tax equivalent basis and (2) non accrual loans have been included in
the appropriate average balance loan category, but unpaid interest on non
accrual loans has not been included for purposes of determining interest
income.


           AVERAGE BALANCE SHEETS AND ANALYSIS OF NET INTEREST INCOME
                                 (In Thousands)
                           (On a Tax Equivalent Basis)

                       1997                 1996                  1995
             Average    Int  Yield/ Average  Int   Yield/ Average  Int   Yield/
             Balance  Earned/ Rate Balance  Earned/ Rate Balance  Earned/ Rate
                        Paid                  Paid                 Paid
Assets
Interest Earning Assets:
Securities Available 
 for Sale    $ 72,741 $ 5,182 7.12 $ 80,333 $ 5,256 6.54 $ 65,896 $ 4,231  6.42
Securities Held
 to Maturity   22,689   1,437 6.33    3,772     369 9.78    5,926     635 10.70
Federal Funds
 Sold             598      41 6.86    1,411      76 5.39    7,409     424  5.72
Loans (Net)   100,208   9,660 9.64   94,139   9,192 9.76   88,588   8,781  9.91
Total Interest Earning
 Assets       196,236 $16,320 8.32  179,655 $14,893 8.28  167,819 $14,071  8.38
Other Non Earning
 Assets        18,878                14,926                14,685
             $215,114              $194,581              $182,504

Liabilities
Interest Bearing Liabilities:
Savings 
 Deposits    $ 65,432 $ 1,119 1.71 $ 65,770 $ 1,172 1.78 $ 65,690 $ 1,302  1.98
Time Deposits  73,419   4,298 5.85   67,294   3,752 5.57   59,544   3,187  5.35
Money Market
 Accounts      12,271     482 3.93   14,107     478 3.39   15,142     552  3.65
Borrowings     14,007     835 5.96    4,012     229 5.71       96      11 11.40
Total Interest Bearing
 Liabilities  165,129 $ 6,734 4.08  151,183 $ 5,631 3.67  140,472 $ 5,052  3.59
Other Non Interest Bearing 
 Liabilities & Shareholders'
 Equity        49,985                43,398                42,032
             $215,114              $194,581              $182,504

Net Interest Income     9,586                 9,262                 9,019

Net Interest Rate Spread      4.24                 4.61                    4.79

Net Interest Margin           4.88                 5.16                    5.37

The following table presents certain information regarding changes in
interest income and interest expense of the Company for the periods
indicated.  For each category of interest earning assets and interest
bearing liabilities, information is provided with respect to changes
attributable to (1) changes in rate (change in rate multiplied by old
volume), (2) changes in volume (change in volume multiplied by old
rate), and (3) changes in rate/volume (change in rate multiplied by
change in volume).

           ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE
          For the years ended December 31, 1997, 1996 and 1995
                             (In Thousands)

                             Year Ended December 31, 1997 vs. 1996
                                      Increase (Decrease)
                                        Due to Change In

                               Volume      Rate   Rate/Volume*  Total
Interest Earning Assets:
 Assets Available for Sale      (499)      463        (38)       (74)
 Securities Held to Maturity   1,223       (27)      (136)     1,060
 Federal Funds Sold              (44)       21        (12)       (35)
 Loans, Net                      588      (118)        (2)       468
Total Interest Earning Assets  1,268       339       (188)     1,419

Interest Bearing Liabilities:
 Savings Deposits                 (7)      (47)         1        (53)
 Time Deposits                   337       185         24        546
 Money Market Accounts           (62)       76        (10)         4
 Borrowed Funds                  571        10         25        606
Total Interest Bearing
 Liabilities                     839        224        40      1,103
Change in Net Interest Income    429        115      (148)       316


                             Year Ended December 31, 1996 vs. 1995
                                      Increase (Decrease)
                                        Due to Change In

                                Volume      Rate   Rate/Volume*  Total
Interest Earning Assets:
 Assets Available for Sale       926        78        21       1,025
 Securities Held to Maturity    (152)      (36)       13        (175)
 Federal Funds Sold             (343)      (25)       20        (348)
 Loans, Net                      548       135      (272)        411
Total Interest Earning Assets    979       152      (218)        913

Interest Bearing Liabilities:
 Savings Deposits                  0      (133)        3        (130)
 Time Deposit                    416       327      (178)        565
 Money Market Accounts           (37)      (39)        2         (74)
 Borrowed Funds                  446        (6)     (222)        218
Total Interest Bearing
 Liabilities                     825       149      (395)        579
Change in Net Interest Income    154         3       177         334

*Represents the change not solely attributable to change in rate or
change in volume but a combination of these two factors.


B.    INVESTMENT PORTFOLIO

HELD TO MATURITY SECURITIES

The following table shows the book value of the Company's held to
maturity securities at the end of each of the last three years.  (In
Thousands)

                                                   December 31

                                                   1997     1996      1995

U.S. Treasury Securities & 
 Other Government Agencies                       $25,814    $  995   $    0
Obligations of States & Political Subdivisions     6,985     3,792    4,120
TOTAL                                            $32,799    $4,787   $4,120

The table below shows the relative maturities of investment and held to
maturity securities as of December 31, 1997.

                       Held to Maturity Securities
                       Maturity Distribution as of
                            December 31, 1997

Security Category             Due 1 Yr   Due 1-     Due 5-  Due After
                              or less    5 Yrs      10 yrs    10 Yrs

State and Municipal Bonds    $   297    $3,066     $1,865   $ 1,757
Average Weighted Yield         8.07%     9.22%      7.74%     7.69%

U.S. Government Agencies     $     0    $    0     $1,384   $24,430
Average Weighted Yield            0%        0%      7.00%     7.26%

TOTAL                        $   297    $3,066     $3,249   $26,187
Percent of Total Portfolio       .9%      9.4%       9.9%     79.8%

NOTE:  Average Weighted Yields on tax exempt obligations have been
computed on a tax equivalent basis

 AVAILABLE FOR SALE SECURITIES

The following table shows the carrying value of the Company's Available
for Sale Securities and other investment securities at the end of each
of the last three years.  (In Thousands)


                                                 December 31

                                          1997       1996      1995

US Treasury Notes and Other
 Government Agencies                   $60,105    $73,322   $71,799
Other Corporate Securities                 541      1,513         0
Other Securities                         2,619      1,946       659
TOTAL                                  $63,265    $76,781   $72,458

The table below shows the relative maturities and carrying value of
available for sale debt securities as of December 31, 1997.
                      Securities Available for Sale
                       Maturity Distribution as of
                            December 31, 1997

Security Category           Due 1 Yr     Due 1-     Due 5-  Due After
                            or less      5 Yrs      10 Yrs    10 yrs

US Treasury Notes and Other
   Government Agencies      $   502    $10,246    $48,806   $   551
Average Weighted Yield        5.88%      6.29%      6.67%     7.06%

TOTAL                       $   502    $10,246    $48,806   $   551

Percent of Total Portfolio:     .8%      17.0%      81.3%       .9%

C.    LOANS

The following table reflects the composition of the Company's
consolidated loan portfolio at the end of each of the last five years.
                             1997     1996    1995     1994    1993
                                          (In Thousands)

Real Estate Loans
A.   Construction & Land
   Development                 $ 5,925  $ 4,073  $ 2,023  $ 2,168  $ 1,568
B.   Secured by 1-4 Family
   Residential Properties       33,528   30,457   27,402   25,528   26,129
C.   Secured by Multi Family
   (5 or more) Residential
   Properties                        0        0        2        4        7
D.   Secured by Non-Farm,
   Non-Residential
   Properties                   28,386   30,134   28,273   26,500   24,553

Commercial & Industrial Loans   18,566   16,582   13,778   12,975   12,834
Loans to Individuals for Household,
  Family & Other Consumer
   Expenditures                 15,806   15,133   14,335   12,844   12,463
All Other Loans                  4,852    4,664    7,430    4,189    3,439
Total Gross Loans             $107,063 $101,043  $93,243  $84,208  $80,993

The above data is gathered from loan classifications established by the
Federal Reserve Call Report 033.

The percentages of loans by lending classification to total loans
outstanding at December 31 was as follows:

                                      1997     1996    1995     1994    1993

Real Estate                           63.4%    64.0%    61.9%    64.4%  64.5%
Commercial & Industrial - Including single
   payment loans to individuals       17.3%    16.4%    14.8%    15.4%  15.9%
Consumer Loans                        14.8%    15.0%    15.4%    15.3%  15.4%
All Other Loans                        4.5%     4.6%     7.9%     4.9%   4.2%
Total Loans                          100.0%   100.0%   100.0%   100.0% 100.0%

                  Maturities and Sensitivities of Loans
                      To Changes in Interest Rates
                         As of December 31, 1997

                           Due 1 Year or Less   Due 1-5 Years   Due 5 Years +
                                    
Real Estate                     $8,809               $6,828       $52,201
Commercial & Industrial          3,089                1,895        13,582
Consumer                         1,616                5,829         8,361
Municipal                        2,331                1,507         1,014
Total                          $15,845              $16,059       $75,158

Note:Real estate loans in the 1-5 category have $2,662,712 at a fixed
     interest rate and $4,165,288 at a variable interest rate.
     Commercial loans in the 1-5 year category have $67,688 at a fixed
     interest rate and $1,827,312 at a variable interest rate.

     Real estate loans in the 5+ category have $13,607,403 at a fixed
     interest rate and $38,593,597 at a variable interest rate.
     Commercial loans in the 5+ category have $1,448,041 at a fixed
     interest rate and $12,133,959 at a variable rate.

Delinquent Loans

The following schedule is a summary of loans with principal and/or
interest payments over 30 days past due:

                              December 31,

                  1997         1996        1995       1994        1993
               Amt     %     Amt   %    Amt     %    Amt     %     Amt    %

Real Estate  $3,003  2.8  $2,649  2.6  $  867  0.9  $  479  0.6  $1,659  2.0
Installment  $  128   .1  $  197  0.2  $   95  0.1  $   95  0.1  $   96  0.1
All Others   $  151   .1  $  220  0.2  $   35  0.0  $  189  0.2  $  102  0.2
TOTAL        $3,282  3.0  $3,066  3.0  $  997  1.0  $  763  0.9  $1,857  2.3

It is the policy of the Company to discontinue the accrual of interest
on loans when, in the opinion of the management, the ultimate
collectibility of principal or interest becomes doubtful.  The
principal amount of loans which have been placed on non-accrual status
were comprised primarily of certain installment loans.  For each of
these loans, management has evaluated the collectibility of the
principal based on its best estimate of the realizable collateral value
of the loans and does not anticipate that any losses from liquidation
of these loans will have a material effect on future operations.  There
were approximately $503,000, $491,000 and $614,000 as of December 31,
1997, 1996 and 1995, respectively, of loans on a non-accrual status.

                           LOAN CONCENTRATIONS

As of December 31, 1997 and 1996, the Company did not have any
concentration of loans in one particular industry that exceeded 10% of
its total loan portfolio.

The Bank grants residential, commercial and consumer loans to customers
principally located in Hancock and Washington Counties of the State of
Maine.  Although the loan portfolio is diversified, a substantial
portion of its debtor's ability to honor their contracts is dependent
upon the economic conditions in the area, especially in the real estate
sector.  There are currently no borrowers whose total indebtedness to
the Bank exceeds 10% of the Bank's shareholders' equity at December 31,
1997.

                ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

Analysis of the allowance for loan losses for the past five years were
as follows:
(Dollars in thousands)

                                            December 31,

                                   1997      1996     1995      1994      1993

Balance at beginning of period: $  2,084  $  1,878  $  1,929  $  1,802  $  2,325
Charge-offs:
   Commercial & Industrial Loans       5        15        44        30        62
   Real Estate Loans                 123         0        48       256       837
   Loans to Individuals               97        73       104        34        87
                                     225        88       196       320       986

Recoveries:
   Commercial & Industrial Loans     118       138        43         5        84
   Real Estate Loans                  67        12         1       390        47
   Loans to Individuals               49        24        71        52       302
                                     234       174       115       447       433
   Net Charge-offs (recoveries)       (9)      (86)       81      (127)      553
   Provision for loan losses         120       120        30         0        30
Balance at end of period        $  2,213  $  2,084  $  1,878  $  1,929  $  1,802

Average Loans Outstanding       $102,321  $ 97,143  $ 88,725  $ 82,600  $ 83,104

Ratio of Net Charge-offs (Recoveries) to
average loans outstanding         (.009%)    (.09%)     .09%     (.15%)     .67%

               ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES


                                      December 31,

                 1997       1996           1995         1994         1993
             Amt   % of  Amt    % of    Amt   % of   Amt   % of   Amt   % of
                   Loan         Loan          Loan         Loan         Loan
               Categories    Categories    Categories   Categories  Categories
                 To Total      To Total      To Total     To Total     To Total
                   Loans         Loans         Loans        Loans         Loans

Balance At End of Period:
Applicable To:
Real Estate $ 413  63.4% $  418  64.0% $  647  61.9% $  665  64.4% $  621  64.5%
Commercial &
Industrial  1,473  17.0%  1,312  16.4%  1,024  14.8%  1,051  15.4%    983  15.9%
Consumer      211  14.7%    194  15.0%    207  15.4%    213  15.3%    198  15.4%
Municipal      49   4.5%     60   4.5%      0   7.9%      0   4.9%      0   4.2%
Identified     67    .4%    100    .1%      0     0       0     0       0     0

TOTAL      $2,213 100.0% $2,084 100.0% $1,878 100.0% $1,929 100.0% $1,802 100.0%

The allowance for loan losses is a general allowance established by
management to absorb possible loan losses as they may exist in the loan
portfolio.  This allowance is increased by provisions charged to
operating expenses and by recoveries on loans previously charged-off.
Management determines the adequacy of the allowance from continuous
reviews of the quality of new and existing loans, from the results of
independent reviews of the loan portfolio by regulatory agency
examiners, evaluation of past and anticipated loan loss experience, the
character and size of the loan portfolio and anticipated economic
conditions.

As of December 31, 1997, the Company had impaired loans totaling
$21,728, which consisted of a real estate loan.  The fair value of the
loan's collateral was used to evaluate the adequacy of the Allowance
for Loans Losses allocated to this loan.

A loan is considered impaired by management when it is probable that
the creditor will be unable to collect all amounts due under the
contractual terms of the loan, including principal and interest.  Loans
on a non-accrual status that are deemed collectable are not classified
as impaired.  Based upon management's periodic review of loans on non-
accrual status, impairment is based on a loan by loan analysis and not
set by a defined period of delinquency before a loan is considered
impaired.

                              Risk Elements
                                    
                                  1997    1996    1995     1994   1993
Loans accounted for on a
 non accrual basis                $503    $491    $614     $151   $486
Accruing loans contractually
 past due 90 days or more         $209    $196    $388     $ 86   $237

In accordance with Industry Guide 3 Item III. C (2), the gross interest
income that would have been recorded in 1997 if non accrual and
restructured loans had been current in accordance with their original
terms and had been outstanding throughout the period or since
origination approximates $39,000.  There was approximately $1,900
included in the gross interest income on non-accrual and restructured
loans for 1997.

D.   DEPOSITS

The following schedule summarizes the time remaining to maturity of
Certificates of Deposit $100,000 or greater at December 31, 1997.

                                 Amount
                              (In Thousands)

                    3 Months or Less                        $5,819
                    Over 3 Through 6                        $4,195
                    Over 6 Through 12 Months                $  535
                    Over One Year                           $  209

E.   CAPITAL RATIOS

The following table presents, for the last three years, the Company's
average capital expressed as a percentage of average deposits, loans,
total assets, and earning assets.

                                  *1997     *1996     *1995

Deposits                           14.9%     14.4%     13.7%
Loans                              24.6%     24.6%     25.1%
Total Assets                       12.0%     12.1%     11.9%
Earning Assets                     13.0%     13.3%     12.9%

*Excluding net unrealized gain (loss) on available for sale securities
of $437,749, ($171,460), and $567,810 at December 31, 1997, 1996 and
1995, respectively.

F.   RETURN ON SHAREHOLDERS' EQUITY

The following table presents, for each of the last three years, the
Company's return on shareholders' equity, return on assets, and return
on average earning assets.

                                              1997      1996      1995

Return on Average Shareholders' Equity       10.9%     10.6%     11.4%
Return on Average Assets                      1.3%      1.2%      1.3%
Return on Average Earning Assets              1.4%      1.4%      1.4%

G.   LIQUIDITY MANAGEMENT

Liquidity management is the process by which the Bank structures its
cash flow to meet the requirements of its customers as well as day to
day operating expenses.

Liquidity comes from both assets and liabilities.  The asset side of
the balance sheet provides liquidity through the regular maturities on
our securities and loan portfolios, as well as interest received on
these assets.  In addition, U.S. government securities may be readily
converted to cash by sale on the open market.  On the liability side,
liquidity comes from deposit growth and the Bank's access to other
sources of borrowed funds.  In this respect, liquidity is enhanced by a
significant amount of core demand and savings deposits from a broad
customer base.

As a part of the Bank's asset and liability management and liquidity
needs, management actively evaluates its funding resources and
strategies to manage and reduce its vulnerability to changes in
interest rates.

A principal objective of the Company is to manage and reduce its
vulnerability to changes in interest rates by managing the ratio of
interest rate sensitive assets to interest rate sensitive liabilities
within specified maturities or repricing dates.

As of December 31, 1997, the Bank's ratio of rate sensitive assets to
rate sensitive liabilities at the one year horizon was 106%, its one
year GAP (measurement of interest sensitivity of interest earning
assets and interest bearing liabilities at a given point in time) was
3%, and $102,233,000 in assets and $98,338,000 in liabilities will be
repriceable in one year.  The Bank becomes asset sensitive between 25
and 36 months.  Bank earnings may be negatively affected, should
interest rates fall.

In addition to the "traditional" GAP calculation, the Company analyzes
future net interest income based on budget projections including
anticipated business activity, anticipated changes in interest rates
and other variables, which are adjusted periodically by management to
take into account current economic conditions, the current interest
rate environment, and other factors.

The following table presents, as of December 31, 1997, the Company's
interest rate GAP analysis:

                                  Interest Rate GAP Analysis
                           As of December 31, 1997 (000's omitted)
                              0-3     4-12       1-5         Over
                            Months   Months      Years       Years     Total
Interest earning assets
Loans:
   Real estate
     Fixed rate           $    567   $  1,982    $  7,753  $  6,110 $  16,412
     Variable rate          19,991     24,177       7,259         0    51,427
Commercial                  10,614      4,465       3,487         0    18,566
Municipal                      437      1,795       1,516     1,104     4,852
Consumer                    11,692        751       3,363         0    15,806
Securities available
 for sale                    9,855      5,500      44,628         0    59,983
Held to maturity securities  1,247      3,771      15,904    11,878    32,800
Loans held for sale          3,138          0           0         0     3,138
Other earning assets         2,251          0       2,619         0     4,870
TOTAL                      $59,792    $42,441     $86,529   $19,092  $207,854

Interest bearing liabilities
Deposits:
   Savings                 $ 3,117    $ 9,918     $15,902   $20,613   $49,550
   NOW                           0          0      36,186         0    36,186
   Money market              2,280      6,840       5,888         0    15,008
   Time                     31,126     34,354      11,162         0    76,642
Borrowings                  10,694          9       4,065       196    14,964
TOTAL                      $47,217    $51,121     $73,203   $20,809  $192,350

Rate sensitivity GAP       $12,575    $(8,680)    $13,32 6  $(1,717)
Rate sensitivity GAP as a
  percentage of total assets 5.65%     (3.90%)     5.99%       .77%
Cumulative GAP             $12,575    $ 3,895   $17,221     $15,504
Cumulative GAP as a
  percentage of total assets 5.65%      1.75%     7.74%       6.97%


The distribution in the Interest Rate GAP Analysis is based on a
combination of maturities, call provisions, repricing frequencies,
prepayment patterns, historical data and management judgment.  Variable
rate assets and liabilities are distributed based on the repricing
frequency of the investment.  Management has estimated the rate
sensitivity of money market and savings deposits based on a historical
analysis of the Bank and industry data.

The status of the Bank's sources of cash to fund its operations are as
follows:

As of December 31,                                 1997               1996

Net cash provided from operations            $  3,106,220        $    840,840
Net cash used by investing activities         (19,134,989)        (13,645,724)
Net cash provided from financing activities    16,327,780           8,740,804
Net (decrease) increase in cash and
 cash equivalents                            $    299,011        $ (4,064,080)

                                    
                            BANK'S PROPERTIES

ITEM 2:  PROPERTIES

The Bank's principal office is located at 66 Main Street in Ellsworth,
Maine.  The main office building consists of three floors, all of which
are utilized by the Bank for banking facilities and administrative
offices.  The principal office includes a separate drive-up facility
and parking lot.  In August 1981, plans were finalized for the
construction of an 8,000 square foot addition to our existing building.
Completed in November of 1982, it provided new and enlarged customer
service/teller area with street level access.  During 1982 and 1983,
the existing building also received extensive renovation and
remodeling, tying it in to the new addition.  The project was completed
in July of 1983.  In April 1985, the Bank opened the first automated
drive-up in Downeast Maine.  The automated teller machine is adjacent
to its drive-up facility located at 66 Main Street, in Ellsworth,
Maine.  In 1988, the Main Office began construction of an addition to
its existing building that would house loan operations.  In September
1989, construction was completed on the addition.  In May 1992, the
Bank opened a trust office in Bangor (Penobscot County) to serve trust
customers in that city and surrounding areas.  In May 1995, the Bank
elected not to renew its lease for its Bangor office.  In addition, the
Bank owns the following properties:

     (a)  The Bank's Cherryfield office located on Church Street in
          Cherryfield, Maine.  A major renovation was undertaken at Cherryfield
          in 1983, approximately doubling its size.  These alterations were
          completed in January of 1984.

     (b)  The Bank's Jonesport office located on Main Street in Jonesport,
          Maine.

     (c)  The Bank's Blue Hill office located on Main Street in Blue Hill,
          Maine.  During 1989, the branch was renovated to include an office for
          the Assistant Manager.

     (d)  The Bank's Stonington office located on Atlantic Avenue in
          Stonington, Maine.  The Stonington office was renovated and 
          expanded in 1980.

     (e)  The Bank's Milbridge office located on Main Street in Milbridge,
          Maine.  In 1987, management decided to replace the Milbridge Branch
          with a larger up to date facility, located at the same site.  The new
          branch is now completed and has been open for business since April
          1988.

     (f)  The Bank purchased in 1989 a parcel of land located on Route 3 in
          Ellsworth with the possible intention of constructing a new branch.
          This property is currently unoccupied and is available for sale.

All of the Bank's offices include drive-up facilities.

In addition to the above properties, which are owned by the Bank, the
Bank leases the following properties:

     (a)  The Bank leases its branch office at the
          Ellsworth Shopping Center, High Street, Ellsworth, Maine,
          from Ellsworth Shopping Center, Inc., a Maine Corporation
          with principal offices in Ellsworth, Maine.  The current
          lease will expire in March of 1998.

     (b)  The Bank leases its Machias office which is located on Dublin
          Street in Machias, Maine.  The premises are owned by Hannaford Bros.,
          Inc. of South Portland, Maine, and are leased to Gay's Super Markets,
          Inc., under a lease dated July 26, 1975.  The Bank subleased the
          premises from Gay's Super Markets, Inc., under a sublease which 
          expires in April of 2001.  The Bank has the right to extend the 
          sublease for three additional five year terms.

     (c)  The Bank leases its Somesville branch office which is located on
          Route 102 in Somesville, Maine.  The land and premises are owned by A.
          C. Fernald Sons, Inc., Mount Desert, Maine.  The current lease expires
          on March 24, 2005, with an option to renew for an additional 20 years.

     (d)  The Bank leases its Castine branch office located on Main Street
          from Michael Tonry, Castine, Maine.  The current lease expires on
          February 1, 1999 with the right to extend the lease for an additional
          4 year term.

     (e)  The Bank leases its Bar Harbor branch office located on Cottage
          Street from the Swan Agency, a Maine Corporation with a principal
          office in Bar Harbor, Maine.  The current lease will expire in April
          of 2002.

All premises are considered to be in good condition and currently
adequate for the purposes for which they are utilized.

ITEM 3:  LEGAL PROCEEDINGS

There are no material pending legal proceedings other than ordinary
routine litigation incidental to the business.

ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.
                                 PART II
ITEM 5:  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS

A.   MARKET INFORMATION

Union Bankshares stock, $12.50 par value, is not listed on any national
exchange, nor is it actively traded.  Since the Company is not aware of
all trades, the market price is established by determining what a
willing buyer will pay a willing seller.  Based upon the trades that
the Company had knowledge of (per quotes from local brokerages), high
and low bids for each quarter for 1997 and 1996 are listed in the
following table.  Prices have been adjusted to reflect a two for one
stock split distributed in August 1997.

           1st Quarter       2nd Quarter      3rd Quarter      4th Quarter
1997     93.00 to 104.00   93.00 to 97.00   88.00 to 100.00  100.00 to 110.00
1996     75.00 to 80.00    80.00 to 93.00   88.00 to 93.00   88.00 to 104.00

B.  HOLDER

As of March 1, 1998 there were approximately 679 stockholders of
record.

C.  DIVIDENDS

     1.   History

The following table shows the cash dividends per share (adjusted for
the stock split) declared by Union Bankshares Company on its common
stock, $12.50 par value:

                              1997           1996
                              
       1st Quarter          $  .41          $  .42
       2nd Quarter          $  .42          $  .42
       3rd Quarter          $  .50          $  .42
       4th Quarter          $  .50          $  .41

Cash dividends declared
  per common share          $1.83            $1.67

Item 6:  SELECTED FINANCIAL DATA (in thousands, except for per share
amounts)

                                 Years Ended December 31,
                           1997     1996      1995      1994      1993
SUMMARY OF OPERATIONS
Operating Income       $  2,608  $  2,207  $  1,989  $  2,080   $  2,259
Operating Expense         8,016     7,723     7,459     7,420      7,034
Net Interest Income       9,452     9,137     8,803     8,490      7,667
Provision for Loan Losses   120       120        30         0         30
Net Income                2,700     2,452     2,418     2,354      2,065

PER COMMON SHARE DATA (1)
Net Income              $  5.59   $  5.07   $  5.00   $  4.86    $  4.41
Cash Dividends Declared    1.83      1.67      1.56      1.25       1.25
Book Value (3)            52.93     49.34     45.87     42.45      38.93
Market Value             110.00    104.00     75.00     71.00      68.00

FINANCIAL RATIOS
Return on Average
 Equity (3)               10.9%     10.6%     11.4%      11.9%     11.8%
Return on Average Assets   1.3%      1.2%      1.3%       1.3%      1.2%
Return on Average Earning
 Assets                    1.4%      1.4%      1.4%       1.4%      1.3%
Net Interest Margin       4.88%     5.16%     5.37%      5.46%     4.79%
Dividend Payout Ratio (1) 32.8%     32.9%     31.3%      25.8%     28.4%
Allowance for Loan
 Losses/Total Loans        .02%      .02%      .02%       .02%      .02%
Non Performing Loans
 to Total Loans           .007%     .007%     .007%      .003%     .009%
Non Performing Assets
 to Total Assets          .005%     .008%     .010%      .006%     .009%
Efficiency Ratio          66.5%     67.2%     67.2%      69.1%     71.2%
Loan to Deposit Ratio     60.4%     60.7%     56.7%      52.5%     50.2%

BALANCE SHEET
Deposits               $177,386  $166,445  $164,481   $160,249  $161,236
Loans                   107,062   101,044    93,242     84,208    80,993
Securities (2)           96,065    81,568    76,578     83,391    73,821
Shareholder's Equity (3) 25,565    23,885    22,227     20,570    18,875
Total Assets            222,560   202,066   191,353    181,597   182,129

(1)  Restated for effect of a 20% stock dividend effected in the form
  of a stock split and a two for one stock split declared in 1997.

(2)  Carrying value.  Includes available for sale securities with cost
  of $59,983, $75,095 and $70,938 at December 31, 1997, 1996 and
  1995, respectively.  Includes securities held for sale with cost of
  $65,816 at December 31, 1993.

(3)  Excluding net unrealized gain (loss) on available for sale
   securities of $437,749, ($171,460), $567,810  and ($1,389,168) at
   December 31, 1997, 1996, 1995 and 1994, respectively.

The above summary should be read in conjunction with the related
consolidated financial statements and notes thereto for the years ended
December 31, 1997, 1996, 1995, 1994 and 1993, and with Management's
discussion and analysis of financial conditions.


ITEM 7:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND
          RESULTS OF OPERATIONS

The information contained in the section captioned "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in the Company's 1997 annual Report is incorporated herein
by reference.

ITEM 7A: QUANTATIVE AND QUALATIVE DISCLOSURES ABOUT  MARKET RISK

Market risk is the risk of loss in a financial instrument arising from
adverse changes in market rates/prices such as interest rates, foreign
currency exchange rates, commodity prices, and equity prices.  The
Company's primary market risk exposure is interest rate risk.  The
ongoing monitoring and management of this risk is an important
component of the Company's asset/liability management process which is
governed by policies established by its Board of Directors that are
reviewed and approved annually.  The Board of Directors delegates
responsibility for carrying out the asset/liability management policies
to the Asset/Liability Committee (ALCO).  In this capacity ALCO
develops guidelines and strategies impacting the Company's
asset/liability management related activities based upon estimated
market risk sensitivity, policy limits and overall market interest rate
levels/trends.

INTEREST RATE RISK

Interest rate risk represents the sensitivity of earnings to changes in
market interest rates.  As interest rates change the interest income
and expense streams associated with the Company's financial instruments
also change thereby impacting net interest income (NII), the primary
component of the Company's earnings.  ALCO utilizes the results of a
detailed and dynamic simulation model to quantify the estimated
exposure of NII to sustained interest rate changes.  While ALCO
routinely monitors simulated NII sensitivity over a rolling two year
horizon, it also utilizes additional tools to monitor potential longer
term interest rate risk.

The simulation model captures the impact of changing interest rates on
the interest income received and interest expense paid on all assets
and liabilities reflected on the Company's balance sheet.  This
sensitivity analysis is compared to ALCO policy limits which specify a
maximum tolerance level for NII exposure over a one year horizon,
assuming no balance sheet growth, given both a 200 point basis point
(bp) upward and downward shift in interest rates.  A parallel and pro
rata shift in rates over a 12 month period is assumed.  The following
reflects the Company's NII sensitivity analysis as of December 31,
1997.

                                                Estimated
                 Rate Change                 NII Sensitivity

                    +200 bp                       +2.0%
                   - 200 bp                       -3.0%

The preceding sensitivity analysis does not represent a Company
forecast and should not be relied upon as being indicative of expected
operating results.  These hypothetical estimates are based upon
numerous assumptions including: the nature and timing of interest rate
levels including yield curve shape, prepayments on loans and
securities, deposit decay rates, pricing decisions on loans and
deposits, reinvestment/replacement of asset and liability cashflows,
and others.  While assumptions are developed based upon current
economic and local market conditions, the Company cannot make any
assurances as to the predictive nature of these assumptions including
how customer preferences or competitor influences might change.

Also, as market conditions vary from those assumed in the sensitivity
analysis, actual results will also differ due to:
prepayment/refinancing levels likely deviating from those assumed, the
potential effect of changing debt service levels on customers with
adjustable rate loans, depositor early withdrawals and product
preference changes, and other internal/external variables.
Furthermore, the sensitivity analysis does not reflect actions that
ALCO might take in responding to or anticipating changes in interest
rates.


ITEM 8:  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     (A)  The financial statements required are contained in the Company's
          1997 Annual Report and are incorporated herein by reference.
          (See item 14 (a) )

ITEM 9:  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
          AND FINANCIAL DISCLOSURE

Previously reported in 8K filing in 1995.

                                PART III

ITEM 10:  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information called for by this Item (and Items 11, 12, and 13
below) is incorporated by reference from the registrant's definitive
Proxy Statement dated March 27, 1998 for its regular annual meeting of
shareholders to be held April 16, 1998, where it appears under the
headings "VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF AND ELECTION
OF DIRECTORS."

ITEM 11:  EXECUTIVE COMPENSATION

See Item 10.

ITEM 12:  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

See Item 10.

ITEM 13:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

See Item 10.
                                 PART IV
                                    
ITEM 14:  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

     (a)  Financial Statements and Exhibits

        (1)  The financial statements listed below are filed as part of this
             report; such financial statements (including report thereon and 
             notes thereto) are included in the registrant's Annual Report to
             shareholders for its fiscal year ended December 31, 1997 (a
             copy of which is being filed as Exhibit 13 hereto), and are
             incorporated herein by reference.

  Consolidated Balance Sheets
    December 31, 1997 and 1996                                    21
  Consolidated Statements of Income
    For the years ended December 31, 1997, 1996 and 1995          22
  Consolidated Statements of Changes in Shareholders' Equity
    For the years ended December 31, 1997, 1996 and 1995          23
  Consolidated Statements of Cash Flow
    For the years ended December 31, 1997, 1996 and 1995        24-25
  Notes to Consolidated Financial Statements                      27
  Independent Auditors Opinion                                    43

        (2)  Financial statement schedules are omitted as they are not
        required or included in the Annual Report to shareholders.

        (3)  Exhibits required by Item 601 - see Item 14(c)

     (b)  Reports on Form 8-K

       During the registrant's fiscal quarter ended December 31, 1997,
       the registrant was not required to and did not file any reports
       on Form 8-K.

     (c)  Exhibits


                    *  3                Articles of Incorporation and By-laws of
                                        Union Bankshares Company

                    *  10.1             Employee Benefit Plan for the employees
                                        of Union Trust Company

                                        Pension Plan for the employees of Union
                                        Trust Company

                                        401 (k) Profit Sharing Plan for the
                                        employees of Union Trust Company

                                        Stock Purchase Plan for the employees of
                                        Union Trust Company


                    11                  Computation of earnings per share, is
                                        incorporated herein by reference to 
                                        Note 1 to the Consolidated Financial 
                                        Statements on page 21 of the 1997
                                        Annual Report to Shareholders'
                                        attached hereto as Exhibit 13.

                    12                  Statement for computation of ratios is
                                        incorporated herein by reference to
                                        "Part II, Item 6 - Selected Financial 
                                        Data."

                    13                  The registrant's Annual Report to 
                                        Shareholders' for its fiscal year 
                                        ended December 31, 1997. This exhibit,
                                        except for those portions thereof
                                        expressly incorporated by reference 
                                        into the Form 10 K annual report, is 
                                        furnished for the information of the
                                        Commission only and is not to be 
                                        "filed" as part of the report.
          
                    *21                 Subsidiary information is incorporated
                                        herein by reference to "Part I, Item 1 -
                                        Business".
          
                     27                 Financial Data Schedule
          
                   99.1                 Report of Berry, Dunn, McNeil & Parker.

                   99.2                 Report of Baker, Newman and Noyes

*Incorporated herein by reference into this document from the Exhibits
to Form S-1, Registration Statement, initially filed on June 15, 1984,
Registration No. 2-90679.
                               SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

UNION BANKSHARES COMPANY                UNION BANKSHARES COMPANY


By:  ___________________________        By:____________________________
     Peter A. Blyberg, President             Sally J. Hutchins
     and Chief Executive Officer             Vice President, Treasurer
                                             and Controller

March 25, 1998

Pursuant to the requirements of the Securities and Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the date
indicated.

                                     Arthur J. Billings, Director
                                     Peter A. Blyberg, Director
                                     Robert S. Boit, Director
                                     Richard C. Carver, Director
                                     Peter A. Clapp, Director
                                     Sandra H. Collier, Director
                                     Robert B. Fernald, Director
                                     Douglas A. Gott, Director
                                     David E. Honey, Director
                                     Thomas R. Perkins, Director
                                     Casper G. Sargent, Director
                                     John V. Sawyer, II, Director
                                     Stephen C. Shea, Director
                                     Richard W. Teele, Director
                                     Paul L. Tracy, Director
                                     Richard W. Whitney, Director