UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549
                                    FORM 10-Q

(Mark One)
(  x  )   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
          OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2001

                                       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 Number 2-90679

                            UNION BANKSHARES COMPANY
             (Exact name of registrant as specified in its charter)

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

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

                                   (Zip Code)
                                      04605

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

     Indicate by check mark 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 the number of shares outstanding of each of the issue's classes of
common stock, as of the latest practicable date.

          Class                         Outstanding at June 30, 2001
(Common stock, $12.50 Par Value)                 577,495

                            UNION BANKSHARES COMPANY

                               INDEX TO FORM 10-Q

PART I         Financial Information                         Page No.

          Item l:                                      Financial Statements

               Independent Accountants' Report                  3

               Condensed Consolidated Balance Sheets -          4
               June 30, 2001, June 30, 2000, December 31, 2000

               Condensed Consolidated Statements of Income -   5-6
               six months ended June 30, 2001 and June 30, 2000
               three months ended June 30, 2001 and June 30, 2000

               Condensed Consolidated Statements of Cash Flows -7
               six months ended June 30, 2001 and June 30, 2000

               Consolidated Statements of Changes in Shareholders' Equity  9
               six months ended June 30, 2001 and 2000

          Item 2:   Management's Discussion and Analysis of Financial
                    Condition and Results of Operations       12-18

          Item 3:   Quantitative and Qualitative Disclosures About Market
                    Risk                                        18

PART II        Other Information

          Item 1:   Legal Proceedings                           19

          Item 2:   Changes in Securities                       19

          Item 3:   Defaults Upon Senior Securities             19

          Item 4:   Submission of Matters to a Vote of
                    Security Holders                            19

          Item 5:   Other Information                           19

          Item 6:   Exhibits and Reports on Form 8-K            19

INDEPENDENT ACCOUNTANTS' REPORT

The Board of Directors and Shareholders
Union Bankshares Company



We have reviewed the accompanying interim consolidated financial information of
Union Bankshares Company and Subsidiary as of June 30, 2001 and 2000, and for
the three- and six-month periods then ended.  These financial statements are the
responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants.  A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters.  It is substantially less in scope than an audit in
accordance with U. S. generally accepted auditing standards, the objective of
which is to express an opinion regarding the financial statements taken as a
whole.  Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with U. S. generally accepted accounting principles.



Berry Dunn McNeil & Parker
Portland, Maine
August 9, 2001






                     UNION BANKSHARES COMPANY AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                      June 30       June 30     December 31
                                        2001          2000          2000
                                   (Unaudited)    (Unaudited)    (Audited)*

ASSETS
Cash and due from banks           $ 11,085,947    $ 9,827,250  $ 10,309,649
Federal funds sold                      62,267         42,078        43,829
Cash and cash equivalents           11,148,214      9,869,328    10,353,478
Available for sale securities       85,190,037     95,315,872   101,458,470
Held to maturity securities, at cost 3,845,075      4,260,070     3,851,461
Other investment securities, at cost 5,039,950      3,557,700     4,968,350
Loans (net of deferred fees)       213,989,385    138,060,361   204,931,089
Less:  Allowance for loan losses      3,457,812     2,538,331     3,376,395
Net Loans                         $210,531,573   $135,522,030  $201,554,694

Premises, furniture & equip net      6,710,750      3,512,983     6,371,464
Deferred tax asset                   1,490,795      1,418,679       233,749
CSV life insurance                   6,722,353      6,349,919     6,578,657
Core deposit intangible                284,348              0       307,619
Goodwill                             6,371,332              0     6,572,652
Other assets                         4,385,754      5,957,163     5,991,532
Total Assets                      $341,720,181   $265,763,744  $348,242,126

LIABILITIES
Deposits:
  Demand                         $  28,329,572  $  23,008,331 $  28,313,749
  Savings                          109,851,533     88,667,000   109,801,146
  Time                             106,624,757     75,959,820   107,465,822
Total Deposits                     244,805,862    187,635,151   245,580,717
Borrowed funds                      51,680,250     35,411,250    51,123,250
Sweep repurchase                     6,913,518     10,015,393    15,079,311
Accrued expenses & other liabilities  5,351,973     4,862,173     5,339,174
Total Liabilities                 $308,751,603   $237,923,967  $317,122,452
Commitments (Note D)

SHAREHOLDERS' EQUITY
Common Stock, $12.50 par value.  Authorized
  1,200,000 shares, issued 582,394 shares
  in 2001 and 2000.             $    7,279,925 $    7,279,925 $   7,279,925
Surplus                              3,963,116      3,963,533     3,963,472
Retained Earnings                   21,436,912     19,712,149    20,682,146
Accumulated Other Comprehensive Income (Loss)
   Net Unrealized Gain/(Loss) on
   Securities Available for Sale       621,022    (2,774,105)     (466,522)
Less:  Treasury Stock (4,899 shares as of
  June 30, 2001, 4,928 shares as of June
  30, 2000 and 4,900 shares as of
  December 31, 2000)                   332,397        341,725       339,347
Total Shareholders' Equity       $  32,968,578  $  27,839,777 $  31,119,674
Total Liabilities & Shareholders'
 Equity                           $341,720,181   $265,763,744  $348,242,126

*Condensed from audited financial statements

See Independent Accountants' review report.  The accompanying notes are an
integral part of these consolidated financial statements.
                            UNION BANKSHARES COMPANY
                   Condensed Consolidated Statements of Income
                                   (UNAUDITED)

                                      Six Months Ended - June 30,
                                            2001        2000
INTEREST INCOME
  Interest and Fees on Loans            $8,584,842  $5,320,814
  Interest and Fees on Municipal Loans and Bonds559,980503,733
  Interest and Dividends on Securities   2,775,835   3,136,412
  Interest on Federal Funds Sold            84,212      18,171
  Amortization & Accretion - Net            96,665         (399)
     Total Interest Earned              12,101,534   8,978,731

INTEREST EXPENSE
  Interest on Deposits                   4,181,811   2,758,002
  Interest on Funds Purchased/Borrowed   1,670,498   1,028,165
    Total Interest Expense               5,852,309   3,786,167

NET INTEREST INCOME                      6,249,225   5,192,564
  Provision for Loan Losses                150,000      75,000

NET INTEREST INCOME AFTER LOAN PROVISION 6,099,225   5,117,564

NONINTEREST INCOME
  Exchange, Commission & Fees              651,204     439,598
  Trust Department                         633,209     543,640
  Safe Deposit Box Rental Fees              41,739      35,328
  Other Income                             891,278     524,523
     Total Noninterest Income            2,217,430   1,543,089

NONINTEREST EXPENSE
  Salaries and Employee Benefits         3,184,443   2,482,288
  Building Maintenance & Operations        439,073     274,678
  FDIC Insurance                            35,164      29,189
  Net Securities Losses                          0      43,914
  Other Expenses                         2,783,556   1,800,569
     Total Noninterest Expense           6,442,236   4,630,638

INCOME BEFORE TAXES                      1,874,419   2,030,015
  Income Taxes                             542,000     577,000

NET INCOME                              $1,332,419  $1,453,015

Per Share Data:
  Net Income                                 $2.31       $2.52
  Dividends Declared                         $1.00       $1.00

See Independent Accountants' review report.  The accompanying notes are an
integral part of these
consolidated financial statements.
                            UNION BANKSHARES COMPANY
                   Condensed Consolidated Statements of Income
                                   (UNAUDITED)

                                     Three Months Ended - June 30,
                                            2001        2000
INTEREST INCOME
  Interest and Fees on Loans            $4,256,216  $2,716,932
  Interest and Fees on Municipal
    Loans and Bonds                        301,020     263,019
  Interest and Dividends on Securities   1,294,268   1,557,055
  Interest on Federal Funds Sold            52,724       6,695
  Amortization & Accretion - Net            10,305        3,396
     Total Interest Earned               5,914,533   4,547,097

INTEREST EXPENSE
  Interest on Deposits                   2,036,576   1,402,123
  Interest on Funds Purchased/Borrowed     758,832     584,128
    Total Interest Expense               2,795,408   1,986,251

NET INTEREST INCOME                      3,119,125   2,560,846
  Provision for Loan Losses                 75,000      45,000

NET INTEREST INCOME AFTER LOAN PROVISION 3,044,125   2,515,846

NONINTEREST INCOME
  Exchange, Commission & Fees              342,018     231,829
  Trust Department                         308,924     291,945
  Safe Deposit Box Rental Fees              19,670      16,899
  Other Income                             473,074     281,567
     Total Noninterest Income            1,143,686     822,240

NONINTEREST EXPENSE
  Salaries and Employee Benefits         1,731,301   1,352,719
  Building Maintenance & Operations        210,081     130,157
  FDIC Insurance                            11,246       9,203
  Net Securities Losses                          0      19,171
  Other Expenses                         1,420,554     953,343
     Total Noninterest Expense           3,373,182   2,464,593

INCOME BEFORE TAXES                        814,629     873,493
  Income Taxes                             242,000     247,000

NET INCOME                              $  572,629  $  626,493

Per Share Data:
  Net Income                                $  .99       $1.08
  Dividends Declared                        $  .50      $  .50

See Independent Accountants' review report.  The accompanying notes are an
integral part of these
consolidated financial statements.
                     UNION BANKSHARES COMPANY AND SUBSIDIARY
                      Consolidated Statements of Cash Flows
                 For the Six Months Ended June 30, 2001 and 2000
                                   (Unaudited)

                                                  2001               2000
Net Cash Flows Provided by Operating Activities:
  Net Income                                   $  1,332,419     $  1,453,015
    Adjustments to reconcile net income to net
    cash provided by operating activities:
     Depreciation and amortization                  671,654          229,186
     Provision for loan losses                      150,000           75,000
     (Gain) loss on sale of equipment                                  (684)
33,526
     Net securities losses                                0           43,914
     Net change in other assets                      20,903        (964,502)
     Net change in other liabilities              (382,672)        (669,243)
    Net amortization of premium (accretion
     of discount) on investments                  (188,728)           25,877
    Net change in deferred loan origination fees      6,235            1,291
     Origination of loans held for sale         (8,936,942)      (2,022,065)
     Proceeds from loans held for sale            8,343,744        2,454,329
     Total adjustments                            (316,490)        (792,687)
  Net cash provided by operating activities       1,015,929          660,328
Cash Flows From Investing Activities:
     Purchase of securities available for sale  (4,447,277)      (3,031,053)
     Purchase of securities held to maturity              0         (50,000)
     Proceeds from sales of securities
      available for sale                                  0        2,830,309
     Proceeds from sales of fixed assets              8,000                0
    Proceeds from maturities of securities
      available for sale                         23,099,571        3,720,641
     Proceeds from maturities of securities
      held to maturity                                    0           19,250
     Net change in loans to customers                            (9,133,114)
(10,578,642)
     Increase in other assets                      (24,144)                0
     Capital expenditures                         (769,521)        (788,123)
   Net cash used in investing activities          8,733,515      (7,877,618)
Cash Flows From Financing Activities:
     Net increase/(decrease) in other
      borrowed funds                            (7,608,794)       13,834,970
     Net increase/(decrease) in demand,
      savings and money market accounts              66,210      (6,103,946)
     Net increase/(decrease) in time deposits     (841,065)          891,263
     Purchase of treasury stock                    (40,906)         (85,259)
     Proceeds from sale of treasury stock            47,500           52,705
     Dividends paid                               (577,653)        (577,894)
  Net cash used by financing activities         (8,954,708)        8,011,839

Net increase in cash and cash equivalents           794,736          794,549
Cash and cash equivalents at beginning of year   10,353,478        9,074,779
Cash and cash equivalents at end of period      $11,148,214       $9,869,328

      Supplemental Schedule of Non-Cash Investing and Financing Activities
                                                     2001                  2000
Net increase as a result of adopting Statement
  of Financial Accounting Standards No. 115
     Available for sale securities                1,647,794          969,276
     Deferred income tax liability                (560,250)        (323,495)
Net unrealized gain on available for
  sale securities                                $1,087,544      $   645,781

The Company converted construction in process costs totaling $421,340 to fixed
assets of the same amount.

See Independent Accountants' review report.  The accompanying notes are an
integral part of these consolidated financial statements.



UNION BANKSHARES COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Six months ended June 30, 2001 and 2000
(Unaudited)
                                                    ACCUMULATED
                                                       OTHER       SHARE-
          COMMON               TREASURY   RETAINED COMPREHENSIVE   HOLDERS'
          STOCK     SURPLUS     STOCK     EARNINGS     INCOME      EQUITY
                                                       (LOSS)

Balance at December 31,
1999    $7,279,925 $3,963,533 $(309,171)$18,837,028 ($2,128,324)$27,642,991

Net income, six months
 ended June 30,
 2000            0          0         0   1,453,015           0   1,453,015
Change in net unrealized
 gain (loss) on available
 for sale securities,
 net of tax of
 $(323,495)      0          0         0           0    (645,781)   (645,781)
Net Comprehensive
 Income          0          0         0   1,453,015    (645,781)    807,234
Sale of 488
 shares Treasury
 stock           0          0    52,705           0           0      52,705
Repurchase of 870
 shares Treasury
 stock           0          0   (85,259)          0           0    (85,259)
Cash dividends
 declared        0          0         0    (577,894)          0    (577,894)
Balance at June 30,
 2000   $7,279,925 $3,963,533 $(341,725)$19,712,149 ($2,774,105)$27,839,777

Balance at December 31,
 2000   $7,279,925 $3,963,472 $(339,347)$20,682,146  ($466,522) $31,119,674

Net income, six months
 ended June 30,
 2001            0          0         0   1,332,419           0   1,332,419
Change in net
 unrealized gain (loss) on
 available
 for sale securities,
 net of tax of
 $(560,250)      0          0         0           0   1,087,544   1,087,544
Total Comprehensive
 Income          0          0         0   1,332,419   1,087,544   2,419,963
Sale of 563
 shares Treasury
 stock           0       (356)   47,856           0           0      47,500
Repurchase of 562
 shares Treasury
 stock           0          0   (40,906)          0           0     (40,906)
Cash dividends
 declared        0          0         0    (577,653)          0    (577,653)
Balance at June 30,
 2001   $7,279,925 $3,963,116 $(332,397)$21,436,912    $621,022 $32,968,578


See Independent Accountants' review report.  The accompanying notes are an
integral part of these consolidated financial statements.
                   Notes to Consolidated Financial Statements
                                    Unaudited

(A)  Basis of Presentation

The accompanying consolidated financial statements of Union Bankshares Company
(the Company) and its subsidiary, Union Trust Company (the Bank) as of June 30,
2001 and 2000 and for the three- and six month periods then ended are unaudited.
However, in the opinion of the Company, all adjustments consisting of normal,
recurring accruals necessary for a fair presentation have been reflected
therein.

Certain financial information which is normally included in financial statements
prepared in accordance with generally accepted accounting principles, but which
is not required for interim reporting purposes, has been omitted.  The
accompanying consolidated financial statements should be read in conjunction
with the financial statements and notes thereto included in the Company's annual
report on Form 10-K for the fiscal year ended December 31, 2000.

(B)  Earnings Per Share

Earnings per common share are computed by dividing the net income available for
common stock by the weighted average number of common shares outstanding during
this period.  Weighted average shares for the six months ended June 30, 2001 and
2000 were 577,528 and 577,961, respectively.


(C)   Intangible Assets

Goodwill is being amortized using the straight line method over 15 years.  Core
deposit intangible is being amortized using the straight line method over 7
years.  Amortization charged to operations is $248,735 in 2001.

(D)  Off-Balance Sheet Items

In the normal course of business, the Bank is a party to financial instruments
with off balance sheet risk to meet the financing needs of its customers.  These
financial instruments include commitments to extend credit and letters of
credit.  The instruments involve, to varying degrees, elements of credit risk in
excess of the amount recognized in the balance sheet.  The contract amounts of
these instruments reflect the extent of involvement the Bank has in particular
classes of financial instruments.  At June 30, 2001, and June 30, 2000, the
following financial instruments, whose contract amounts represent credit risk,
were outstanding.

                                                   June 30
                                                  (000's omitted)
                                              2001          2000
1.  Unused Commitments:

     A.  Revolving, open-end lines secured by
           1-4 family residential properties,
            e.g., Home Equity lines         $6,917      $6,543
  B.   Credit card lines                       6,372       6,453
  C.   Secured real estate loans              12,333       6,074
  D.   Other                                  17,17018,318

2.   Financial Standby Letters of Credit:       86          82



(E)  Regulatory Agencies

The Bank's primary regulators are the Federal Reserve Bank of Boston and, as a
state chartered bank, the Bureau of Banking of the State of Maine.

(F)  Classified Loans

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
reasonably 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.

(G)  Impact of Inflation and Changing Prices

The Consolidated Financial Statements have been prepared in accordance with
generally accepted accounting principles which require the measurement of
financial position and operating results in terms of historical dollars without
considering changes in the relative purchasing power of money over time due to
inflation.

Unlike many industrial companies, substantially all of the assets and virtually
all of the liabilities of the Company are monetary in nature.  As a result,
interest rates have a more significant impact on the Company's performance than
the general level of inflation.  Over short periods of time, interest rates may
not necessarily move in the same direction or in the same magnitude as
inflation.

(H)  Recent Accounting Developments

The Financial Accounting Standards Board recently issued the following Statement
of Financial Accounting Standards (SFAS):

          SFAS No. 141   Business Combinations
                      SFAS No. 142   Goodwill and Other Intangible Assets


SFAS No. 141 requires that the purchase method be used to account for business
combinations initiated June 30, 2001.

SFAS No. 142 requires that goodwill no longer be amortized to earnings, but
instead be reviewed for impairment.  The amortization of goodwill ceases upon
adoption of the Statement on January 1, 2002.  Management is in the process of
evaluating the effects of this statement on the Company's consolidated financial
condition and results of operations.


               MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATION


Earnings and Performance Overview

The following discussion and analysis focuses on the factors affecting Union
Bankshares Company (The Company) financial condition and results of operation at
June 30, 2001 as compared to June 30, 2000.

Results of Operations

The operating results of the Company depend primarily on its net interest
income, which is the difference between interest income on earning assets
(primarily loans and investments) and interest expense (primarily deposits and
borrowings).  The Company's results are also affected by the provision for loan
losses; noninterest income, including gains and losses on the sales of loans and
securities; noninterest expenses (in particular, acquisition related expenses
increased during 2000); and income tax expense.  Each of these major components
of the Company's operating results is highlighted below.

Net Income

The Company reported net income for the three months ended June 30, 2001 of
$572,629 versus $626,493 for the same period in 2000, and net income for the
first six months of 2001 of $1,332,419 versus $1,453,015 for the same period in
2000.

The following table summarizes the status of the Company's earnings and
performance for the periods stated:

                                                      June 30,
                                                  2001        2000
Earnings Per Share                              $2.31       $2.52
Return on Average Shareholders Equity                        4.16%A   4.90%B
Return on Average Assets                         0.38%A      0.57%B
Return on Average Earning Assets                 0.42%A      0.59%B

A=annualized returns are:    8.32%, .76%, and .84%, respectively.
B=annualized returns are:    9.80%, 1.14%, and 1.18%, respectively.

The decrease in net income for the three and six months ended June 30, 2001
versus the same periods in 2000 is due to margin compression (primarily the
result of declining interest rates) and 2001 results reflecting the amortization
of goodwill related to the acquisition of The Waldoboro Bank, FSB.

As a result of narrowing margins, (offset in part by loan growth attributable to
the acquisition and a strong sales effort), net interest income for the second
quarter of 2001 and for the first six months of 2001 was up only $558,279 or
21.8% and $1,056,661 or 20.3%, respectively, from the same periods last year.
Overall margin compression, increased competition and pricing pressures continue
to be a significant factor in the Bank's ability to grow net interest income at
a faster pace.

The increase in noninterest income results from improvements in all categories,
including loan department fees, bankcard fees, trust fees and customer account
fees.

Noninterest expenses, consisting primarily of employee compensation and
benefits, occupancy and equipment expense and other general operating expenses,
for the second quarter of 2001 and the six months ended June 30, 2001 increased
$908,589 and $1,811,598, respectively, from the same periods in 2000 due to
increased staffing and the expenses related to upgrading equipment and
facilities and the acquisition of The Waldoboro Bank, FSB.  2001 results reflect
a 15 branch organization whereas 2000 numbers reflect an 11 branch organization.

During 2001, the Company continues to implement specific strategic priorities
that focus on increasing fee based revenues and controlling overall expense.
With the ever changing environment of interest rate risk, fee income has
developed into a significant component in the Bank's total revenue generation
goals.  While revenue generation is a top priority, the Company also focuses on
productivity and maximizing the returns of its financial and human resources and
exploring new fee generation opportunities.

The Bank is constantly monitoring the economy and its effect on the banking
industry in New England, and in particular, in Maine, in Hancock and Washington
Counties, in addition to our newest market area in the Mid-Coast region - Knox,
Lincoln and Waldo counties.  While the economy of Hancock and Washington
counties continues to lag the national trend, our newest market area has been
named as one of the fastest growing areas in the state.  The Bank continues to
operate in a conservative planned manner.  We are growing according to our
strategic plan and remain within the parameters we have set forth for ourselves,
with the goals of improved earnings and productivity.

NET INTEREST INCOME

Net interest income, the difference between interest income on earning assets
such as loans and investment securities and interest expense on interest bearing
liabilities such as funds on deposit and borrowed funds continues to be the most
significant determinant of the Company's earnings performance.  Because of the
significance of net interest income, the management of interest rate risk has
become increasingly important to ensure the continued profitability of the Bank.
Interest rate risk results from volatile interest rates, increased competition,
and changes in the regulatory environment.  As a banking company, our exposure
to interest rate movements is controlled by matching the interest rates as well
as the maturities of assets and liabilities.

Net interest income for the second quarter of 2001 was $3,119,125, up $558,279
or 21.8% and for the first six months of 2001 was $6,249,225, up $1,056,661 or
20.3% over the same periods in 2000.

The following table illustrates the bank's net interest spread position:

                                            Six Months Ended June 30,
                                                 2001        2000

Yield on Earning Assets                         7.79%       7.84%
Cost of all Funds                               3.40%       3.21%
Net Interest Margin                             4.39%       4.63%

The Bank continues to monitor short and long-term interest rates, balance sheet
volumes and maturities in order to evaluate the potential impact on its net
interest spreads and capital.

PROVISION FOR LOAN LOSSES

The provision for loan losses for the six month period ended June 30, 2001
increased $75,000 to $150,000 from the same period last year, resulting from
management's ongoing evaluation of the allowance for loan losses.  The process
to evaluate the adequacy of the allowance for loan losses involves a high degree
of management judgement.  Such judgement is based, in part, on systematic
methods.  These methods, which are generally quantitative measures, are
employed, not so the allowance will be the result of routine mathematical
exercises, but to help ensure that all relevant matters affecting loan
collectability will consistently be identified.  Such methods at June 30, 2001
included a loan-by-loan analysis of all larger commercial loans and commercial
real estate loans which were non-performing or which were being closely
monitored by management for potential problems, and a quantitive analysis of
residential real estate and consumer loans.  Based on these analyses, including
consideration of loans placed on non-accrual status during the first two
quarters and increased loan growth, an estimation of potential loss exposure was
made and an allowance allocated.  The estimation of potential loss exposure
reflects declining real estate values, as evidenced by appraisals and other
available information.

The Bank has a Loan Review Program whereby an independent loan review service
firm conducted a review of the commercial loan portfolio.  The review included
updates to comments on all criticized and classified assets over $100,000, all
loans delinquent over 30 days and over $100,000, non accruals over $100,000, new
(closed) and renewed loans over $100,000 as well as the adequacy of the loan
loss reserve.

Although management utilized its best judgement in providing for possible
losses, there can be no assurance that the Company will not have to increase its
provision for possible loan losses in the future as a result of increased loan
demand in the Company's primary market areas, future increases in non-performing
assets or otherwise which would adversely affect the Company's results of
operations.

The following table reflects the quality of the Bank's loan portfolio and the
emphasis placed upon the management of credit risk:

                                                               (000's Omitted)
                                                               Six Months Ended
                                                                   June 30,
                                                                2001     2000
1.      Nonaccrual Loans                                       2,967   1,467
2.      Loans past due 90 days & accruing    42   351
3.      Restructured loans         0    0
4.      Other real estate owned (including
       insubstance foreclosure)                                    0       0
5.      Total nonperforming assets                             3,009   1,818
6.      Ratio of total nonperforming loans to capital and the
     allowance for loan losses (Texas ratio)                   8.38    5.48
7.      Ratio of net chargeoffs to loans                         .032    .0012
8.      Ratio of allowance for loan losses to loans    1.62 1.84
9.      Coverage ratio (allowance for loan losses divided by
     nonperforming assets)                                   114.92  139.60
10.   Ratio of nonperforming assets to total assets              .88     .68
11.   Ratio of nonperforming loans to total loans               1.41     .68

NONINTEREST INCOME

The Company receives noninterest income from trust fees, service charges on
deposit accounts and other income comprised of fees earned from a variety of
other services.

Noninterest income, excluding one time gains/(losses), increased $321,446 or
39.1% and $674,341 or 43.7% for the three and six months ended June 30, 2001
over the same periods in 2000.

This increase is primarily due to an increase in loan department income of
$207,926 or 115.0%, in trust income of $89,569 or 16.5% and credit card income
of $64,776 or 23.9%.

Net security losses amounted to $0 for the three and six months ended June 30,
2001 compared to $19,171 and $43,914 for the same periods in 2000.

NONINTEREST EXPENSES

Noninterest expenses consist of employee compensation and benefits, occupancy
and equipment expenses and miscellaneous expenses.  Management is continually
reviewing expenses to control them and develop more efficient delivery systems
for all Bank services.

A generally flat economy in Maine and in particular in Downeast Maine, has
compelled or should compel banking institutions of our size to manage their
institutions prudently and conservatively.  This we are committed to do.

Noninterest expenses increased $908,589 or 36.9% and $1,811,598 or 39.1% for the
three and six months ended June 30, 2001 over the same periods in 2000.  The
increase was primarily attributable to increased staffing and the expenses
related to upgrading equipment and facilities and the acquisition of The
Waldoboro Bank, FSB.

INCOME TAXES

Income taxes are provided in accordance with the comprehensive income tax
allocation method which recognizes the tax effects of all income and expense
transactions in each year's statement of income, regardless of the year the
transactions are reported for tax purposes.  The tax effects of these timing
differences are reflected in deferred income tax accounts in the consolidated
financial statements.

Deferred income taxes are recognized for income and expense items that are
reported in different years for financial reporting purposes and income tax
purposes using the tax rate applicable for the year of the calculation.

The status of the Bank's income tax expense is as follows:

                                Tax Expense           Effective Rate
                               2001      2000          2001    2000
Six Months Ended June 30,   $542,000  $577,000         28.9%   28.4%

INTEREST RATE GAP ANALYSIS

Attention should be directed to the interest rate gap analysis as of December
31, 2000 as provided on page 10 in the Bank's 2000 Annual Report.  Data as of
June 30, 2001 is essentially identical to that reported in the Annual Report.

SHAREHOLDERS' EQUITY AND CAPITAL RESOURCES

Shareholders' Equity before accumulated other comprehensive income, was as
follows for the following periods:

                                      SHAREHOLDERS' EQUITY
                                    Amount          Book Value
                                                   Per Share

June 30, 2001                   $32,347,556          $56.01
June 30, 2000                   $30,613,882          $53.01
December 31, 2000               $31,586,196          $54.70

The Federal Reserve Board guidelines for a risk-based approach to measuring the
capital adequacy of bank holding companies and state-chartered banks that are
members of the Federal Reserve System generally call for an 8% total capital
ratio of which 3% must be comprised of Tier 1 capital.  Risk-based capital
ratios are calculated by weighing assets and off-balance sheet instruments
according to their relative credit risks.  At June 30, 2001, the Company had met
the minimum capital ratios.  In fact, the Bank's strong capital position at June
30, 2001 exceeded the minimums established by the Federal Reserve Board as
follows:

                                                    Minimum Regulatory
                                      June 30, 2001    Requirements

Leverage Capital Ratio                     7.54            4.0%
Risk Based Ratio                          13.39            8.0%
Tier I Ratio                              12.13            4.0%

DIVIDENDS

The common stock is not actively traded and therefore, we are not aware of the
price of all trades.  The price is established by determining what a willing
buyer will pay a willing seller.

Cash dividends per share declared on common stock were $.50 for the second
quarter of 2000 and 1999.

LIQUIDITY MANAGEMENT

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

Liquidity is provided from both assets and liabilities.  The asset side of the
balance sheet provides liquidity through the regular maturities on our
securities portfolio, as well as the interest received on these assets.  In
addition, US Government securities may be readily converted to cash by sale in
the open market.  On the liability side, liquidity comes from deposit growth and
the Bank's accessibility 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 resource and strategies to reduce and
manage the vulnerability of its operation to changes in interest rates.

When a Company's ability to reprice interest-bearing liabilities exceeds its
ability to reprice interest-earning assets within shorter time periods, material
and prolonged increases in interest rates generally adversely affect net
interest income, while material and prolonged decreases in interest rates
generally have the opposite effect.

A principal objective of the Company is to reduce and manage the vulnerability
of its operations 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 June 30, 2001, Union Trust Company is liability sensitive.  The Bank
becomes asset sensitive between 37 and 60 month horizons.  Bank earnings may be
negatively affected, should interest rates rise.

As of June 30, 2001, the Bank's ratio of rate sensitive assets to rate sensitive
liabilities at the one year horizon was 84%, its one year GAP (measurement of
interest sensitivity of interest earning assets and interest bearing liabilities
at a point in time) was 8% or 92% matched, and $133,701,000 in assets and
$159,173,000 in liabilities will be repriceable in one year.

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

                                                             June 30,
                                                        2001         2000
Net cash from operations                           $ 1,015,929 $    660,328
Net cash from (used by) investing activities       $ 8,733,515   $(7,877,618)
Net cash from (used by) financing activities      $(8,954,708)   $ 8,011,839
Net increase                                       $   794,736  $   794,549

BALANCE SHEET ANALYSIS

Total assets at June 30, 2001 were $341,720,181, a decrease of $6,521,945 or
1.9% from December 31, 2000.  The change in assets consisted primarily of a
$16,268,433 or 16.0% decrease in securities offset by an increase in loans of
$8,976,879 or 4.5%.  On the liability side, there was a decrease of $774,855 or
 .32% in deposits and $7,608,793 or 11.4% in borrowings and sweep repurchase
agreements.

The following financial statistics give a general overview and profile of the
Company:

                                          As of June 30,           Increase
                                       2001            2000       (Decrease)

Total Assets                      $341,720,181     $265,763,744 $ 75,956,437
Total Earnings Assets             $304,668,899     $238,697,750 $ 65,971,149
Loans, Net                        $210,531,573     $135,522,030 $ 75,009,543
Assets AFS at Market              $ 90,229,987     $ 98,873,572$ (8,643,585)
Assets Held to Maturity           $  3,845,075     $  4,260,070$   (414,995)
Deposits                          $244,805,862     $187,635,151 $ 57,170,711
Borrowings and Sweep
 Repurchase Agreements            $ 58,593,768     $ 45,426,643  $13,167,125
Capital                           $ 32,968,578     $ 27,839,777  $ 5,128,801

SECURITIES PORTFOLIO

The objective of the securities portfolio is to provide for a stable earnings
base and the investment of excess liquidity.  The securities portfolio decreased
$9,058,580 to $94,075,062 or 27.5% of total assets as of June 30, 2001, as
compared to 38.8% at June 30, 2000.  A portion of this decrease is due to the
normal course of maturities, principal payments and security sales.

The Company has reviewed its investment policy regarding securities.  In
recognition of current economic conditions and the attendant responsibility of
management to consider known liquidity requirements and to provide for capital
planning, securities may be sold as part of prudent asset/liability management.

LOANS

Loan demand continues to show signs of moderate growth in most of the Bank's
market area, in particular the mid-coast region.  Net loans as of June 20, 2001
were $210,531,573, an increase of $75,009,543 or 55.3% from June 30, 2000.  This
resulted primarily from the merger of The Waldoboro Bank, FSB and Union Trust
Company and a continuation of the strong loan growth experienced by the Company
during 2001.

Residential real estate mortgage loans as of June 30, 2001 increased by
$56,446,542 or 99.9% over June 30, 2000 results.  Residential real estate loans
consist of loans secured by one-to-four family residences.  The Company
generally retains adjustable rate mortgages in its portfolio but will, from time
to time, retain fixed rate mortgages in its portfolio.  It should be noted that
the Bank has sold and serviced $76,873,798 of real estate loans and $2,772,942
of commercial mortgages and has $913,324 of loans held for sale at June 30,
2001.

Commercial loans increased at June 30, 2001 by $12,669,968 or 26.8% over the
same period in 2000.  Commercial loans consist of loans secured by various
corporate assets, as well as loans to provide working capital in the form of
lines of credit, which may be secured or unsecured. Union Trust Company focuses
on lending to the wide array of financially sound small to medium-sized
businesses within its service area.

Consumer loans increased at June 30, 2001 by $6,230,256 or 27.6% over June 30,
2000.  Consumer loans are originated by the Bank for a wide variety of purposes
to meet our customers' needs, and include personal notes, reserve checking,
installment and VISA loans.

The section of management's discussion and analysis entitled "Provision for Loan
Losses" discusses the quality of the loan portfolio at June 30, 2001.

The Bank's loan to deposit ratio was 87.4% and the allowance for loan losses
1.62% of total loans at June 30, 2001.

Management's approach to loan growth is to seek out and work with borrowers
whose financial condition, credit history, and performance would warrant
extensions of credit.

In brief, the Company's loan portfolio is driven by a desire to maintain our
credit standards while meeting the financial needs of qualified borrowers in the
community.

DEPOSITS

Total deposits as of June 30, 2001 increased $57,170,711 or 30.5% over June 30,
2000, primarily due to the acquisition of The Waldoboro Bank, FSB.  The Company
continues to offer competitive interest rates on its products offered and
maintains an active calling program.  The proportion of interest-bearing funds
continues to place emphasis on the need for properly matching our assets and
liabilities to maintain stable net interest margins.

The Company has continued its overall asset and liability management strategy
which is to maintain flexibility in its interest sensitivity gap in order to
take advantage of both short term and long term changes in market rates while
minimizing the risk of adverse effects on operations.

The Bank is not reliant on volatile liabilities as evidenced by such comprising
only 6.63% of its deposit base.

BORROWINGS AND SWEEP REPURCHASE AGREEMENTS

Total advances from the Federal Home Loan Bank (FHLB) as of June 30, 2001
increased $16,269,000 or 45.9% over June 30, 2000.  A portion of this increase
was to fund new loan originations for 2001, but primarily it was due to Union
Trust Company assuming The Waldoboro Bank, FSB's FHLB advances.

Sweep repurchase agreements totaling $6,913,518 as of June 30, 2001 versus
$10,015,393 as of June 30, 2000 decreased $3,101,875 or 31.0%.  The decrease was
primarily due to a classification change which moved some sweep repurchase
accounts into the municipal NOW account category.

Item 3:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

There have been no material changes in the reported market risks since December
31, 2000.

                                     PART II

Item 1:                           N/A

Item 2:                           N/A

Item 3:                           N/A

Item 4:                           N/A

Item 5:                           N/A

Item 6:Exhibits and Reports on Form 8-K

      A.   Non-Applicable

      B.   Reports on Form 8-K

During the Registrant's fiscal quarter ended June 30, 2001, the Registrant was
not required to and did not file any reports on Form 8-K.




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 COMPANY


                              Peter A. Blyberg, President


     Date

                              Sally J. Hutchins, Sr. Vice President /Treasurer