# EDGAR Filing Document

**Accession Number:** 0000706863
**File Stem:** 0000706863-26-000029
**Filing Date:** 2026-3
**Character Count:** 572807
**Document Hash:** 60239a217d9298891c1efd34f02f18e4
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000706863-26-000029.hdr.sgml**: 20260320

**ACCESSION NUMBER**: 0000706863-26-000029

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 154

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260320

**DATE AS OF CHANGE**: 20260320

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** UNION BANKSHARES INC
- **CENTRAL INDEX KEY:** 0000706863
- **STANDARD INDUSTRIAL CLASSIFICATION:** STATE COMMERCIAL BANKS [6022]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 030283552
- **STATE OF INCORPORATION:** VT
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-15985
- **FILM NUMBER:** 26777366

**BUSINESS ADDRESS:**
- **STREET 1:** P O BOX 667
- **STREET 2:** 20 MAIN STREET
- **CITY:** MORRISVILLE
- **STATE:** VT
- **ZIP:** 05661-0667
- **BUSINESS PHONE:** 8028886600

**MAIL ADDRESS:**
- **STREET 1:** P O BOX 667
- **STREET 2:** 20 MAIN STREET
- **CITY:** MORRISVILLE
- **STATE:** VT
- **ZIP:** 05661-0667

?xml version='1.0' encoding='ASCII'? unb-20251231

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-K**

**☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE**

**SECURITIES EXCHANGE ACT OF 1934**

**☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE**

**SECURITIES EXCHANGE ACT OF 1934**

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| | | | |
|:---|:---|:---|:---|
| **For the fiscal year ended** | **December 31, 2025** | **Commission file number** | **001-15985** |

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**UNION BANKSHARES, INC.**

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| | | | |
|:---|:---|:---|:---|
| (State or Other Jurisdiction of Incorporation or Organization) | **VT** | **03-0283552** | (I.R.S. Employer Identification No.) |

---

**P.O. BOX 667**

**20 LOWER MAIN STREET**

**MORRISVILLE, VT 05661-0667**

(Address of Principal Executive Offices)

**Registrant's telephone number: 802-888-6600**

Former name, former address and former fiscal year, if changed since last report: Not applicable

**Securities registered pursuant to section 12(b) of the Act:**

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| | | |
|:---|:---|:---|
| **<u>Common Stock, $2.00 par value</u>** | **<u>&nbsp;&nbsp;&nbsp;&nbsp;UNB</u>** | **<u>The Nasdaq Stock Market LLC</u>** |
| (Title of class) | (Trading Symbol(s)) | (Exchanges registered on) |

---

**Securities registered pursuant to Sections 12(g) of the Act:**

**None**

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐ No ☒

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 such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| | | Emerging growth company | ☐ |

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards proviced pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐ No ☒

The aggregate market value of the common stock held by non-affiliates of the registrant on June 30, 2025 was $107,255,813 based on the closing price on the Nasdaq Stock Market LLC on such date of $26.62 per share. For purposes of this calculation, all directors, executive officers, and named executives of the Registrant are assumed to be affiliates. Such assumption, however, shall not be deemed to be an admission of such status as to any such individual.

On February 28, 2026, there were 4,614,047 shares of common stock, $2.00 par value, outstanding.

**DOCUMENTS INCORPORATED BY REFERENCE**

Specifically designated portions of the following document are incorporated by reference in the indicated Part of this Annual Report on Form 10-K:

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| | |
|:---|:---|
| **<u>Document</u>** | **<u>Part</u>** |
| Portions of the Proxy Statement for the 2025 Annual Meeting of Shareholders | III |

---

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**UNION BANKSHARES, INC.**

**Table of Contents**

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| | | |
|:---|:---|:---|
| **Part I** | **Part I** | **Part I** |
| Item 1 - | Business | [5](#ib142508bf08a4df2a4c88b674284ba9c_16) |
| Item 1A - | Risk Factors | [13](#ib142508bf08a4df2a4c88b674284ba9c_19) |
| Item 1B - | Unresolved Staff Comments | [24](#ib142508bf08a4df2a4c88b674284ba9c_22) |
| Item 1C - | Cybersecurity | [24](#ib142508bf08a4df2a4c88b674284ba9c_25) |
| Item 2 - | Properties | [25](#ib142508bf08a4df2a4c88b674284ba9c_28) |
| Item 3 - | Legal Proceedings | [26](#ib142508bf08a4df2a4c88b674284ba9c_31) |
| Item 4 - | Mine Safety Disclosures | [26](#ib142508bf08a4df2a4c88b674284ba9c_34) |
| **Part II** | **Part II** | **Part II** |
| Item 5 - | Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities | [26](#ib142508bf08a4df2a4c88b674284ba9c_40) |
| Item 6 - | [Reserved] | [27](#ib142508bf08a4df2a4c88b674284ba9c_43) |
| Item 7 - | Management's Discussion and Analysis of Financial Condition and Results of Operations | [28](#ib142508bf08a4df2a4c88b674284ba9c_46) |
| Item 7A - | Quantitative and Qualitative Disclosures about Market Risk | [47](#ib142508bf08a4df2a4c88b674284ba9c_73) |
| Item 8 - | Financial Statements and Supplementary Data | [48](#ib142508bf08a4df2a4c88b674284ba9c_76) |
| Item 9 - | Changes in and Disagreements with Accountants on Accounting and Financial Disclosures | [96](#ib142508bf08a4df2a4c88b674284ba9c_193) |
| Item 9A - | Controls and Procedures | [96](#ib142508bf08a4df2a4c88b674284ba9c_196) |
| Item 9B - | Other Information | [96](#ib142508bf08a4df2a4c88b674284ba9c_202) |
| Item 9C - | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | [96](#ib142508bf08a4df2a4c88b674284ba9c_205) |
| **Part III** | **Part III** | **Part III** |
| Item 10 - | Directors, Executive Officers and Corporate Governance (a) | [96](#ib142508bf08a4df2a4c88b674284ba9c_211) |
| Item 11 - | Executive Compensation (a) | [97](#ib142508bf08a4df2a4c88b674284ba9c_214) |
| Item 12 - | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters (a) | [97](#ib142508bf08a4df2a4c88b674284ba9c_217) |
| Item 13 - | Certain Relationships and Related Transactions, and Director Independence (a) | [97](#ib142508bf08a4df2a4c88b674284ba9c_220) |
| Item 14 - | Principal Accountant Fees and Services (a) | [98](#ib142508bf08a4df2a4c88b674284ba9c_223) |
| **Part IV** | **Part IV** | **Part IV** |
| Item 15 - | Exhibits, Financial Statement Schedules and Reports on Form 8-K | [98](#ib142508bf08a4df2a4c88b674284ba9c_229) |
| Item 16 - | Form 10-K Summary | [99](#ib142508bf08a4df2a4c88b674284ba9c_232) |
| Signatures | | [100](#ib142508bf08a4df2a4c88b674284ba9c_235) |
| Exhibit Index | | [101](#ib142508bf08a4df2a4c88b674284ba9c_238) |

---

____________________

(a)The information required by Part III Items 10, 11, 12, 13 and 14 is incorporated herein by reference, in whole or in part, from the Company's Proxy Statement for the Annual Meeting of Shareholders to be held on May 20, 2026. The incorporation by reference herein of portions of the Proxy Statement shall not be deemed to specifically incorporate by reference the information referred to in Items 407(d)(1)-(3) of Regulation S-K or the information required to be included in the Proxy Statement pursuant to Item 402(v) of Regulation S-K. Incorporation by reference of this report into any registration statement filed by the Company under the Securities Act of 1933, as amended shall not be deemed to incorporate by reference the information referred to in Item 201(e) of Regulation S-K.

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**FORWARD-LOOKING STATEMENTS**

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

Forward-looking statements reflect management's current expectations and are subject to uncertainties, both general and specific, and risk exists that actual results will differ from those predictions, forecasts, projections and other estimates contained in forward-looking statements. These risks cannot be readily quantified. When management uses any of the terms "believes," "expects," "predicts," "anticipates," "intends," "projects," "potential," "plans," "seeks," "estimates," "targets," "goals," "may," "might," "could," "would," "should," or similar expressions, they are making forward-looking statements. Many possible events or factors, including those beyond the control of management, could affect the future financial results and performance of the Company.

Factors that may cause results or performance to differ materially from those expressed in forward-looking statements include, but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• evolving local, regional, national, or international business, economic, or political conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in laws or the regulatory or supervisory environment, including as a result of financial services legislation, regulation, or policies or changes in government officials or other personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• interest rate risk, including the effects of recent and any future rate changes by the FRB;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fluctuations in the values of the securities held in our securities portfolio as the result of higher interest rates, which has resulted in unrealized losses in our securities portfolios;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increased competitive pressures, including those from tax-advantaged credit unions and other financial service providers in the Company's northern Vermont and New Hampshire market area or in the financial services industry generally, from increasing consolidation and integration of financial service providers, and from changes in technology and delivery systems;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in tax or banking laws and regulations that increase our compliance and other costs of doing business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increases in the level of nonperforming assets and charge-offs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in depositor behavior resulting in movement of funds out of Bank deposits and into the stock market, other investment assets, or into deposits at financial institutions offering higher rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• new or revised accounting standards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability to successfully manage liquidity risk, which may increase our dependence on borrowed funds and non-core funding sources such as brokered deposits, and negatively impact our cost of funds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in information technology that require increased capital spending or that result in new or increased risks or competitive pressures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in consumer and business spending, borrowing and savings habits;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• further changes to the regulations governing the calculation of the Company's regulatory capital ratios;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increased competitive pressures affecting the ability of the Company to attract, develop and retain senior management and other employees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increased cybersecurity threats;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• disruptions in financial markets caused by high profile bank failures and actual or proposed responsive measures by federal or state governments or banking regulators, including increases in our deposit insurance assessments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effects of inflation and higher energy costs on our borrowers and other customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in trade, monetary, and fiscal policies and laws, including federal tariff policies and the interest rate policies of the FRB; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adverse impacts on the domestic economy from international conflicts.

When evaluating forward-looking statements to make decisions about the Company and our stock, investors and others are cautioned to consider these and other risks and uncertainties, and are reminded not to place undue reliance on such statements. Investors should not consider the foregoing list of factors to be a complete list of risks or uncertainties. The statements made in this report, including any forward-looking statements, speak only as of the date they are made and the Company undertakes no obligation to update them to reflect new or changed information or events, except as may be required by federal securities laws.

------

**PART I**

**Item 1.&nbsp;&nbsp;&nbsp;&nbsp;Business**

**Certain Definitions:** Capitalized terms used in the following discussion and not otherwise defined below have the meanings assigned to them in Note 1 to the Company's audited consolidated financial statements contained in Part II, item 8, page 55 of this Annual Report.

**General:** Union Bankshares, Inc. ("Company") is a one-bank holding company whose sole subsidiary is Union Bank ("Union"). It was incorporated in the State of Vermont in 1982 to serve as a holding company for Union Bank. The Company's common stock is traded on the Nasdaq Global Market under the symbol "UNB". Union Bank was organized and chartered as a state bank in 1891 and became a wholly owned subsidiary of the Company upon completion of the holding company reorganization in 1982. Both Union Bankshares, Inc. and Union Bank are headquartered in Morrisville, Vermont.

The Company's business is that of a community bank in the financial services industry. The Company has one definable business segment, Union Bank, which provides full retail, commercial, municipal banking, and wealth management and trust services throughout its 18 branch banking locations, three loan centers, and several ATMs covering northern Vermont and northern New Hampshire. Also, many of Union's services are provided via the telephone, mobile devices, and through its website, <u>www.ublocal.com</u>. Union seeks to make a profit for the Company while providing quality retail banking services to individuals and commercial banking services to small and medium sized business corporations, limited liability companies, partnerships, and sole proprietorships, as well as nonprofit organizations, local municipalities and school districts within its market area.

The Company's income is derived principally from interest and fees on loans and earnings on other investments. Its primary expenses arise from interest paid on deposits and borrowings, salaries and wages, health insurance and other employee benefits and other general overhead expenses, including occupancy and equipment expenses. Our profitability depends primarily on net interest income, which is the difference between interest and dividend income on interest-earning assets and interest expense on interest-bearing liabilities. Interest-earning assets include loans, investment securities, and interest-earning deposits in banks. Interest-bearing liabilities primarily include customer deposit accounts, brokered deposits, subordinated notes and other borrowings. Net interest income is dependent upon the level of interest rates and the extent to which such rates change, as well as changes in the volume of various categories of assets and liabilities. Our profitability is also dependent on the level of noninterest income (primarily gains on sale of real estate loans, loan servicing income, and service fees), allowance for credit losses, noninterest expenses and income taxes. Our operations and profitability are subject to changes in interest rates, applicable statutes and regulations, changes in corporate tax rates, general economic conditions, the competitive environment, as well as other factors beyond our control.

*<u>Human Capital</u>*. Our employees play a vital role in our company-wide vision of delivering the best banking experience to all of our customers, employees, communities, and shareholders. As of December 31, 2025, Union employed 195 full time employees. Guided by our core values, we are committed to creating a company culture where everyone is included and respected, and where we support each other in reaching our full potential. To attract, engage, and retain top talent, we strive to create a supportive workplace, with opportunities for our employees to grow and develop in their careers. We provide numerous training and development opportunities, and maintain a tuition reimbursement program. We are also deeply committed to the health and well-being of our employees. This includes market-competitive compensation, medical and dental insurance, paid time off, life insurance, short-term and long-term disability, and a 401(k) plan. We maintain a number of human resources and other policies, including a harassment and retaliation policy, to promote a workplace that is safe for all and supports a culture where people feel they can report incidents that threaten that safety. In addition, we have a confidential whistleblower program that forwards complaints to the Audit Committee and the Board of Directors, and we will work to take necessary action as quickly as possible after a complaint is received. We also prohibit discrimination on the grounds of race, color, religion, sex, sexual orientation (including gender identity and gender expression), national origin, citizenship status, age, disability, genetic information, or veteran status. We employ based on talent and potential for professional growth, and we value a diversity of backgrounds and ideas.

**Description of Services:** Services or products offered to our customers include, but are not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Commercial loans for business purposes to business owners and investors for plant and equipment, working capital, real estate renovation and other business purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Commercial real estate loans on income producing properties, including commercial construction loans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SBA guaranteed loans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Residential construction and mortgage loans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Municipal financing, including loans and excess deposits secured by FHLB letters of credit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Online cash management services, including account reconciliation, credit card depository, Automated Clearing House (ACH) origination, wire transfers, positive pay and night depository;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Merchant credit card services for the deposit and immediate credit of sales drafts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Remote deposit capture for merchants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Online mortgage applications;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Online consumer deposit account opening;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Business checking accounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Standby letters of credit, bank checks or money orders, and safe deposit boxes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ATM services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Debit MasterCard and ATM cards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Telephone, internet, and mobile banking services, including bill pay;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Home improvement loans and overdraft checking privileges against preauthorized lines of credit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Retail depository services including personal checking accounts, checking accounts with interest, savings accounts, money market accounts, certificates of deposit, IRA/SEP/KEOGH accounts and Health Savings accounts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Wealth management and trust services to individuals and organizations.

Consistent with the Company's objective of serving the financial needs of individuals, businesses and others within our market areas, we seek to concentrate our assets in loans. For the year ended December 31, 2025, the Company's rate of average loans to average deposits was 98.4%. To be consistent with the requirements of prudent banking practices, adequate levels of assets are invested in high-grade securities, FDIC insured certificates of deposits, or other prudent investment alternatives such as company-owned life insurance and investments in real estate limited partnerships for affordable housing. Deposits are the primary source of funds for use in lending, investing and for other general operating purposes. In addition we obtain funds from principal repayments, sales and prepayments of loans, securities and FDIC insured certificates of deposit. Other funding sources may include brokered deposits purchased through CDARS, ICS or through other deposit brokers, and borrowings from the FHLB, correspondent banks or FRB loan facilities, including the discount window.

**Competition:** The Company and Union face substantial competition for loans and deposits in northern Vermont and New Hampshire from local and regional commercial banks, savings banks, tax exempt credit unions, mortgage brokers, financial services affiliates of bank holding companies, brokerage houses, insurance companies, consumer finance companies, internet banks and national and regional financial service providers such as mutual funds. Within the Company's market area are branches of several commercial and savings banks that are substantially larger than Union. Union focuses on its community banking niche and on providing convenient locations, hours and modes of delivery to provide superior customer service. We have seen over the last few years, a trend by customers to turn to local community banks to fulfill their financial needs with organizations and people they know and trust. Customers continue to look to perform traditional banking transactions electronically either via the internet or Union's mobile app. The Company seeks to capitalize upon the extensive business and personal contacts and relationships of our directors, advisory board members and officers within our communities to continue to develop our customer base, as well as relying on director and advisory board referrals, officer-originated calling programs and customer and shareholder referrals.

In order to compete with the larger financial institutions in its service area, Union capitalizes on the flexibility and local autonomy which is accorded by our independent status. This includes an emphasis on personal service, timely decision making, local promotional activity, and personal contacts and community service by our officers, directors and employees. We strive to inform the public about the strength of the franchise, the variety and flexibility of the services we offer and the strength of the local economy relative to the national economy. In addition, we provide information on financial topics of interest and strive to educate future generations by helping them to cultivate sound personal financial habits through our "Save for Success" program for children.

We compete for deposit accounts by offering customers competitive products and rates, personal service, local area expertise, convenient locations and access, and an array of financial services and products. Competition for customer deposits remains strong as customers continue to seek maximum earnings on their savings dollars. Union utilizes a combination of rates on non-maturity deposits to retain customer deposits and attract new customers, including in our new market areas.

The competition in originating real estate and other loans comes principally from commercial banks, savings banks, mortgage banking companies and tax exempt credit unions. We compete for loan originations primarily through the interest rates and loan fees we charge, the types of loans we offer, and the efficiency and quality of services we provide. The Company emphasizes residential mortgage lending, commercial real estate and construction lending, as well as municipal loans and both conventional and SBA guaranteed commercial lending. Factors that affect our ability to compete for loans include general and local economic conditions, prevailing interest rates including FHLB rates, the prime rate, and pricing volatility of the secondary loan markets. We promote an increased level of personal service and expertise within the community to position Union as a lender to small to middle market business and residential customers, which tend to be under-served by larger institutions.

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Through Union's Wealth Management Group, we compete for personal and institutional wealth management and trust business with trust companies, commercial banks having trust departments, investment advisory firms, brokerage firms, mutual funds and insurance companies.

**Regulation and Supervision**

**General**

The following discussion addresses elements of the regulatory framework applicable to bank holding companies and their subsidiaries. This regulatory framework is intended primarily for the protection of depositors, the DIF, and the banking system as a whole, rather than the protection of shareholders or non-depository creditors of a bank holding company such as the Company.

As a bank holding company, the Company is subject to regulation, supervision and examination by the FRB under the BHCA. As a state chartered commercial bank, Union Bank is subject to the regulation and supervision by the FDIC and the DFR.

The following is a summary of certain aspects of various statutes and regulations applicable to the Company and its subsidiary. This summary is not a comprehensive analysis of all applicable laws, and you should refer to the applicable statutes and regulations for more information. Changes in applicable laws or regulations, and in their interpretation and application by regulatory agencies and other governmental authorities, cannot be predicted, but may have a material effect on our business, financial condition or results of operations.

This regulatory and supervisory framework establishes the permissible range of activities in which a bank holding company or a bank can engage. The prior approval of the FDIC and DFR is required, among other things, for Union to establish or relocate a branch office, assume deposits or engage in any merger, consolidation, purchase or sale of all or substantially all of the assets of any bank. This regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to classification of assets and establishment of adequate credit loss reserves for regulatory purposes. To the extent that this information describes statutory and regulatory provisions, it is qualified in its entirety by reference to those provisions.

The Company is also under the jurisdiction of the SEC for matters relating to the offer and sale of its securities as well as public disclosure requirements. The Company is subject to restrictions, reporting requirements, and review procedures under federal securities laws and regulations. The Company's common stock is listed on the Nasdaq Global Market under the trading symbol "UNB" and accordingly, the Company is subject to the rules of Nasdaq for listed companies.

**Financial Regulatory Reform Legislation** 

*<u>The Dodd-Frank Act.</u>* The Dodd-Frank Act, enacted in 2010, comprehensively reformed the regulation of financial institutions and the products and services they offer. Among other things, the Dodd-Frank Act:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• granted the FRB increased supervisory authority and codified the source of strength doctrine;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provided new capital standards applicable to the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• modified the scope and costs associated with deposit insurance coverage;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• permitted well capitalized and well managed banks to acquire other banks in any state subject to certain deposit concentration limits and other conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• permitted the payment of interest on business demand deposit accounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• established the CFPB and transferred rulemaking authority to it under various consumer protection laws relating to financial products and services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• established new minimum mortgage underwriting standards for residential mortgages;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• barred banking organizations, such as the Company, from engaging in proprietary trading and from sponsoring and investing in hedge funds and private equity funds, except as permitted under certain circumstances; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• established the Financial Stability Oversight Council to designate certain activities as posing a risk to the United States financial systems and recommended new or heightened standards and safeguards for financial institutions engaging in such activities.

While the Dodd-Frank Act is focused principally on changes to the financial regulatory system, it includes several corporate governance, disclosure and compensation provisions applicable to public companies, such as the Company. Those provisions include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A requirement that public companies solicit an advisory vote on executive compensation ("say-on-pay"), an advisory vote on the frequency of say-on-pay votes and, in the event of a merger or other extraordinary transaction, an advisory vote on certain "golden parachute" payments. The Company's last say-on-pay vote was held at the 2025 annual meeting with shareholders approving the Company's executive compensation program by a wide margin. Our next say-on-pay and say-on-frequency advisory votes are scheduled to occur at the 2028 annual meeting;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Requirements that the SEC adopt rules directing the securities exchanges to adopt listing standards with respect to compensation committee independence and the use of consultants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Provisions calling for the SEC to adopt expanded disclosure requirements for annual proxy statements and other filings, particularly in the area of executive compensation, such as disclosure of pay versus performance, policies with regard to hedging transactions conducted by employees and directors, and, for public companies other than smaller reporting companies, the ratio of CEO pay to the pay of a median employee. The Company included the required pay versus performance disclosures beginning with its 2023 proxy statement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Provisions requiring the adoption or revision of certain other corporate policies, such as compensation "clawback" policies providing for the recovery of executive compensation in the event of a financial restatement. The Company adopted a clawback policy in November 2023; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A provision clarifying the SEC's authority to adopt rules requiring issuers to include in their proxy statements solicitations for shareholder nominations for directors.

Although disclosure requirements for public companies increased under the Dodd-Frank Act, the Company is a "smaller reporting company" and as permitted under the rules and regulations of the SEC, has elected to provide certain scaled disclosures in this Annual Report and in its annual meeting proxy statement, including scaled disclosures regarding executive compensation.

**Bank Holding Company Regulation**

As a bank holding company, the Company is subject to regulation, supervision and examination by the FRB, which has the authority, among other things, to order bank holding companies to cease and desist from unsafe or unsound banking practices; to assess civil money penalties; and to order termination of non-banking activities or termination of ownership and control of a non-banking subsidiary by a bank holding company.

*<u>Source of Strength.</u>* Under long-standing FRB policy and codified in the Dodd-Frank Act, bank holding companies, such as Union Bankshares, are required to act as a source of financial and management strength to their subsidiary banks, such as Union, and to commit resources to support them. This support may be called for at times when a bank holding company may not have the required resources to do so.

*<u>Acquisitions and Activities.</u>* Under the BHCA, the activities of bank holding companies, such as Union Bankshares Inc., and those of companies that they control, such as Union, or in which they hold more than 5% of the voting stock, are limited to banking, managing or controlling banks, furnishing services to or performing services for their subsidiaries, or certain activities that the FRB has determined to be so closely related to banking, managing or controlling banks as to be a proper incident thereto. Satisfactory capital ratios, CRA ratings and anti-money laundering policies are generally prerequisites to obtaining Federal regulatory approval to make acquisitions. Financial holding companies may engage in certain nonbanking activities not permitted for bank holding companies. Union Bankshares Inc. has not elected to become a financial holding company.

*<u>Enforcement Powers.</u>* The FRB has the authority to issue cease and desist orders against bank holding companies to prevent or terminate unsafe or unsound banking practices, violations of law and regulations, or conditions imposed by, or violations of agreements with, or commitments to, the FRB. The FRB is also empowered to assess civil money penalties against companies or individuals who violate the BHCA or orders or regulations thereunder, to order termination of nonbanking activities of nonbanking subsidiaries of bank holding companies, and to order termination of ownership and control of a nonbanking subsidiary by a bank holding company. There are no FRB enforcement actions currently in place against the Company.

The FRB has the power to prohibit the payment of dividends by bank holding companies if their actions constitute unsafe or unsound practices. The FRB has issued a policy statement on the payment of cash dividends by bank holding companies, which expresses the FRB's view that a bank holding company should pay cash dividends only to the extent that the company's net income for the past year is sufficient to cover both the cash dividends and rate of earnings retention that is consistent with the company's capital needs, asset quality and overall financial condition.

**Regulation of Union Bank**

Union is subject to regulation, supervision, and examination by the FDIC and the DFR. Pursuant to the Dodd-Frank Act, the FRB may directly examine the subsidiary of the Company. The enforcement powers available to the federal banking regulators include, among other things, the ability to issue cease and desist or removal orders; to terminate insurance of deposits; to assess civil money penalties; to issue directives to increase capital; to place the Bank into receivership; and to initiate injunctive actions against banking organizations and institution-affiliated parties. The DFR possesses similar enforcement powers under Vermont law. There are no such enforcement actions currently in place against Union.

*<u>Deposit Insurance.</u>* As a member of the FDIC, the deposits of Union are insured under the DIF maintained by the FDIC up to $250,000 per ownership category. Under applicable federal laws and regulations, deposit insurance premium assessments to the DIF are currently based on a supervisory risk rating system, with the most favorably rated institutions paying the lowest

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premiums. Under this assessment system, risk is defined and measured using an institution's supervisory ratings, combined with certain other risk measures, including certain financial ratios and long-term debt issuer ratings. For the year ended December 31, 2025, the Bank's total FDIC insurance assessment expense was $1.5 million.

*<u>Brokered Deposits</u>*<u>.</u> The FDICIA restricts the ability of an FDIC insured bank to accept brokered deposits unless it is a well capitalized institution under FDICIA's prompt corrective action guidelines. Union has established an account with two of its approved investment brokers to accept brokered deposits as an approved liquidity source. Additionally, Union accepts reciprocal time and money market deposits primarily through its membership with the IntraFi Network in CDARS and ICS, respectively. The Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 allows the Company to hold reciprocal deposits up to 20 percent of total liabilities without those deposits being treated as brokered for regulatory purposes.

*<u>Community Reinvestment Act ("CRA").</u>* Union is subject to the federal CRA, which requires banks to demonstrate their commitment to serving the credit needs of communities and residents with low- and moderate-incomes. Union participates in a variety of direct and indirect lending programs and other investments for the benefit of such residents in its local communities. The FDIC conducts examinations of insured banks' compliance with CRA requirements and rates institutions as "Outstanding," "Satisfactory," "Needs to Improve," and "Substantial NonCompliance." Failure of an institution to receive at least a "Satisfactory" CRA rating could adversely affect its ability to undertake certain activities, such as branching and acquisitions of other financial institutions, which require regulatory approval. In addition, failure of a bank subsidiary to receive at least a "Satisfactory" rating would disqualify a bank holding company from eligibility to become or remain a financial holding company under the GLBA. Union has received an "Outstanding" rating from its most recent CRA compliance examination by the FDIC.

In October 2023, the FDIC and other federal bank regulatory agencies jointly issued a final rule substantially revising the CRA compliance framework in effect since 1995. Under the 2023 final rule, banks with $2 billion or more in assets would be evaluated under a Retail Lending Test, a Retail Services and Products Test, a Community Development Financing Test, and a Community Development Services Test. Banks, such as Union, with total assets of $600 million or more and less than $2 billion would be evaluated under the Retail Lending Test and, at the bank's option, either the current Intermediate Bank Community Development Test or the new Community Development Financing Test. Although the final rule took effect on April 1, 2024, it was effectively rescinded on July 17, 2025, when the Federal Reserve, FDIC and OCC issued a joint proposal to rescind the 2023 final rule and to continue to apply the 1995 regulations to banks. Thus, Union remains subject to the 1995 CRA regulations.

*<u>Federal Reserve Board Policies.</u>* The monetary policies and regulations of the FRB have had a significant effect on the operating results of banks in the past and are expected to continue to do so in the future. FRB policies affect the levels of bank earnings on loans and investments and the levels of interest paid on bank deposits and borrowings through the Federal Reserve System's open-market operations in United States government securities, regulation of the discount rate and terms on bank borrowings from Federal Reserve Banks.

**Capital Adequacy and Safety and Soundness** 

*<u>Capital Adequacy Guidelines.</u>* The FDIC and other federal bank regulatory agencies adopted a final rule for leverage and risk-based capital requirements and the method for calculating risk-weighted assets which is consistent with agreements that were reached by the Basel Committee on Banking Supervision under the so-called Basel III framework and certain provisions of the Dodd-Frank Act that became effective on January 1, 2015. Among other things, the rule established a common equity Tier 1 capital ratio with a minimum requirement of 4.5%, increased the minimum Tier 1 risk based ratio from 4.0% to 6.0%, and assigned a higher risk weight of 150% to exposures that are more than 90 days past due or in nonaccrual status as well as certain commercial real estate loans that finance the acquisition, development or construction of real property. The final rule also requires accumulated OCI be included for purposes of calculating regulatory capital unless a one time opt-out election was made. The Company and Union both made the election. The rule limits a banking organization's capital distributions and certain discretionary bonus payments if the banking organization does not hold a "capital conservation buffer" of 2.5% above the minimum capital ratio requirements.

A financial institution's failure to meet minimum regulatory capital standards can lead to other penalties, including termination of deposit insurance or appointment of a conservator or receiver for the financial institution. Risk based capital ratios are the primary measure of regulatory capital presently applicable to bank holding companies. Risk based capital guidelines are designed to make regulatory capital requirements more sensitive to differences in risk profiles among banks and bank holding companies, to account for off-balance-sheet exposure and to minimize disincentives for holding liquid assets.

Federal bank regulatory agencies require banking organizations that engage in significant trading activity to calculate a capital charge for market risk. Significant trading activity means trading activity of at least 10% of total assets or $1 billion, whichever is smaller, calculated on a consolidated basis for bank holding companies. Federal bank regulators may apply the market risk measure to other bank holding companies, as the agency deems necessary or appropriate for safe and sound banking practices.

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Each agency may exclude organizations that it supervises that otherwise meet the criteria under certain circumstances. The market risk charge will be included in the calculation of an organization's risk based capital ratio. Neither the Company nor Union is currently subject to this special capital charge.

*<u>Prompt Corrective Action.</u>* FDICIA, among other things, identifies five capital categories for insured depository institutions (well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized) and requires the respective federal banking agencies to implement systems for "prompt corrective action" for insured depository institutions that do not meet minimum capital requirements. FDICIA imposes progressively more restrictive constraints on operations, management and capital distributions, depending on the category in which an institution is classified. Failure to meet the capital guidelines could also subject an insured depository institution to capital raising requirements. An "undercapitalized" bank must develop a capital restoration plan and its parent holding company must guarantee that bank's compliance with the plan. The liability of the parent holding company under any such guarantee is limited to the lesser of 5% of the bank's assets at the time it became undercapitalized or the amount needed to comply with the plan. Furthermore, in the event of the bankruptcy of the parent holding company, such guarantee would take priority over the parent's general unsecured creditors. In addition, FDICIA requires the various federal banking agencies to prescribe certain noncapital standards for safety and soundness related generally to operations and management, asset quality and executive compensation, and permits regulatory action against a financial institution that does not meet such standards.

The various federal banking agencies have adopted substantially similar regulations that define the five capital categories identified by FDICIA, using the Tier 1 Capital, Common Equity Tier 1 Capital, Total Capital and Leverage Ratios as the relevant capital measures. Such regulations establish various degrees of corrective action to be taken when an insured depository institution is considered undercapitalized. Under the regulations as in effect during 2025, a "well capitalized" institution must have a Tier 1 capital ratio of at least 8.0%, a Common Equity Tier 1 ratio of 6.5%, a total capital ratio of at least 10% and a leverage ratio of at least 5% and not be subject to a capital directive order.

At December 31, 2025, Union's Tier I and Total Risk Based Capital Ratios were 11.87% and 12.81% respectively, and its Leverage Capital Ratio was 7.36%, and it is considered well capitalized under applicable regulatory guidelines in effect as of such date.

*<u>Safety and Soundness Standards.</u>* FDICIA, as amended, directs each Federal banking agency to prescribe safety and soundness standards for insured depository institutions relating to internal controls, information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, compensation, asset quality, earnings and stock valuation. The Community Development and Regulatory Improvement Act of 1994 amended FDICIA by allowing Federal banking regulators to publish guidelines rather than regulations concerning safety and soundness.

FDICIA also contains a variety of other provisions that may affect Union's operations, including reporting requirements, regulatory guidelines for real estate lending, "truth in savings" disclosure provisions, and a requirement to provide 90 days prior notice to customers and regulatory authorities before closing any branch. Union is subject to §112 of FDICIA, which requires an additional annual reporting to the FDIC, FRB, and DFR regarding preparation of the annual financial statements, the maintenance of an internal control structure for financial and regulatory reporting and compliance with certain designated banking laws, as well as imposition of increased responsibilities on the Company's external auditor and Audit Committee.

**Dividend Restrictions**

As a bank holding company, the Company's ability to pay dividends to its stockholders is largely dependent on the ability of its subsidiary to pay dividends to it. Payment of dividends by Vermont-chartered banks, such as Union, is subject to applicable state and federal laws. Under Vermont banking laws, a Vermont-chartered bank may not authorize dividends or other distributions that would reduce the bank's capital below the amount of capital required in the bank's Certificate of General Good or under any capital or surplus standards established by the Commissioner of the DFR. Union does not have any capital restrictions in its Certificate of General Good and, to date, the Commissioner of the DFR has not adopted capital or surplus standards. Nevertheless, the capital standards established by the FDIC, described above under "Prompt Corrective Action" apply to Union, and the capital standards of the FRB apply to the Company on a consolidated basis. In addition, the FRB, the FDIC and the Commissioner of the DFR are authorized under applicable federal and state laws to prohibit payment of dividends that are determined to be an unsafe or unsound practice. Payment of dividends that significantly deplete the capital of a bank or a bank holding company, or render it illiquid, could be found to be an unsafe or unsound practice. Further, the Basel III capital standards limit a financial institution's ability to pay dividends if it does not maintain a required capital conservation buffer.

**Consumer Protection Regulation**

The Company and Union are subject to a number of federal and state laws designed to protect consumers and prohibit unfair or deceptive business practices, including, but not limited to, the Equal Credit Opportunity Act, the Fair Housing Act, the Home

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Ownership Protection Act, the Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act of 2003 (the "FACT Act"), GLBA, the Truth in Lending Act, the CRA, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the National Flood Insurance Act and various state law counterparts. Union is also subject to laws and regulations to protect consumers in connection with their deposit or electronic transactions. These laws include the Truth in Savings Act, the Electronic Funds Transfer Act and the Expedited Funds Availability Act. These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions must interact with customers when taking deposits, making loans, collecting loans and providing other services. Further, the Dodd-Frank Act established the CFPB, which has the responsibility for making rules and regulations under the federal consumer protection laws relating to financial products and services. The CFPB also has a broad mandate to prohibit unfair or deceptive acts and practices and is specifically empowered to require certain disclosures to consumers and draft model disclosure forms under the various federal consumer protection laws. The CFPB is charged with enforcing consumer protection laws against banks with assets in excess of $10 billion, while community banks continue to be subject to the enforcement authority of their primary regulator. This supervisory structure may lead to conflicting regulatory guidance for community banks versus larger banks and increase regulatory costs and burdens. Failure to comply with consumer protection laws and regulations can subject financial institutions to enforcement actions, fines and other penalties.

The Dodd-Frank Act, in addition to requiring a mortgage lender to ascertain a borrower's ability to repay, allows borrowers to assert violations of certain provisions of the Truth-in-Lending Act as a defense to foreclosure proceedings, significantly limits or prohibits prepayment penalties for certain mortgage transactions, and prohibits creditors from financing credit life/disability insurance policies in connection with a residential mortgage loan or home equity line of credit. In addition, the Dodd-Frank Act prohibits mortgage originators from receiving compensation based on the terms of residential mortgage loans and generally limits the ability of a mortgage originator to be compensated by others if compensation is received from a consumer. The Dodd-Frank Act requires mortgage lenders to make additional disclosures prior to the extension of credit, in each billing statement, and for negative amortization loans and hybrid adjustable rate mortgages. Additionally, the CFPB adopted rules and forms that combine certain disclosures that consumers receive in connection with applying for and closing on a residential mortgage loan under the Truth in Lending Act (Regulation Z) and the Real Estate Settlement Procedures Act (Regulation X), also known as the TILA and RESPA Integrated Disclosures, or TRID. TRID established new disclosure timing requirements and applies to most closed-end consumer credit transactions secured by real property.

*<u>Privacy and Customer Information Security.</u>* The GLBA requires financial institutions to implement policies and procedures regarding the disclosure of nonpublic personal information about consumers to nonaffiliated third parties. In general, we must provide our consumer customers with a disclosure that explains our policies and procedures regarding the disclosure of such nonpublic personal information. We must also provide an updated notice if we change our information-sharing practices. Except as otherwise required or permitted by law, we are prohibited from disclosing nonpublic personal information except as provided in such policies and procedures. The GLBA also requires that we develop, implement and maintain a comprehensive written information security program designed to ensure the security and confidentiality of customer information (as defined under the GLBA), to protect against anticipated threats or hazards to the security or integrity of such information; and to protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer. We are also required to send a notice to customers whose "sensitive information" has been compromised if unauthorized use of this information is "reasonably possible." Most of the states, including the states where we operate, have enacted legislation concerning breaches of data security and our duties in response to a data breach. Congress continues to consider federal legislation that would require consumer notice of data security breaches. Pursuant to the FACT Act, we have developed and implemented a written identity theft prevention program to detect, prevent, and mitigate identity theft in connection with the opening of certain accounts or certain existing accounts.

The Bank is also subject to the Vermont Financial Privacy Act, which prohibits financial institutions from disclosing customer information, except in accordance with specified exceptions, and to the Vermont Consumer Protection Act which, among other things, generally requires a consumer's consent to obtain a credit report.

*<u>Home Mortgage Disclosure Act ("HMDA").</u>* HMDA makes information available to the public that helps to show whether financial institutions are serving the housing credit needs of their neighborhoods and communities. The Act requires institutions to gather and compile data about loan applications secured by a lien on a residential dwelling for home purchase, home improvement, refinances and certain other borrowing purposes. The information must be compiled each calendar year on a Loan/Application Register, and submitted to the FFIEC by March 1st of the following year and made available to the public no later than March 31st. The Federal Financial Institutions Examinations Council prepares a series of tables that comprise the disclosure statement for each reporting institution. HMDA applies to financial institutions that have their main office or any branch in a Metropolitan Statistical Area ("MSA"). Union is subject to HMDA as it has branch offices within the Burlington, Vermont MSA.

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**Regulation of Other Activities**

*<u>Transactions with Related Parties.</u>* The Company's and Union's authority to extend credit, purchase or sell an asset from or to their directors, executive officers and 10% or more stockholders, as well as to entities controlled by such persons, is governed by the requirements of the Federal Reserve Act and Regulation O of the FRB thereunder. Among other things, these provisions require that extensions of credit to insiders (i) be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than those prevailing for comparable transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or present other unfavorable features and (ii) not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based in part, on the amount of the bank's capital. Under applicable guidelines, any related party transaction, including a loan, must be reviewed by the Company's Audit Committee. In addition, under the federal SOX Act (discussed below), the Company, itself, may not extend or arrange for any personal loans to its directors and executive officers. The Company has a Related Persons Transactions Approval Policy administered by the Company's Audit Committee which incorporates applicable regulatory guidelines and requirements.

*<u>Interstate Banking.</u>* The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 authorized an adequately capitalized and managed bank holding company to acquire banks based outside its home state, generally without regard to whether the state's law would permit the acquisition, and also authorized banks to merge across state lines thereby creating interstate branches. In addition, this Act authorized banks to acquire existing interstate branches (short of merger) or to establish new interstate branches. States were given the right, exercisable before June 1, 1997, to prohibit altogether or impose certain limitations on interstate mergers and the acquisition or establishment of interstate branches. The Dodd-Frank Act removed remaining state law impediments to de novo interstate branching. Although interstate banking and branching may have resulted in increased competitive pressures in the markets in which the Company operates, interstate branching may also present competitive opportunities for locally-owned and managed banks, such as Union, that are familiar with the local markets and that emphasize personal service and prompt, local decision-making. The ability to branch interstate has also benefited Union, as it permitted the expansion of its banking operations into New Hampshire, including the conversion of its loan production office in Littleton to a full service branch in March of 2006, the May 2011 acquisition of three New Hampshire branches and the opening of full service branches in Lincoln in 2014 and North Conway in 2023.

*<u>Affiliate Restrictions.</u>* Bank holding companies and their affiliates are subject to certain restrictions under the Federal Reserve Act in their dealings with each other, such as in connection with extensions of credit, transfers of assets, and purchase of services among affiliated parties. The Dodd-Frank Act further tightened these restrictions. Generally, loans or extensions of credit, issuances of guarantees or letters of credit, investments or purchases of assets by a subsidiary bank from a bank holding company or its affiliates are limited to 10% of the bank's capital and surplus (as defined by federal regulations) with respect to each affiliate and to 20% in the aggregate for all affiliates, and borrowings are also subject to certain collateral requirements. These transactions, as well as other transactions between a subsidiary bank and its holding company or other affiliates must generally be on arms-length terms, that is, on terms comparable to those involving nonaffiliated companies. Further, under the Federal Reserve Act and FRB regulations, a bank holding company and its subsidiaries are prohibited from engaging in certain tie-in-arrangements in connection with extensions of credit or lease or sale of property, furnishing of property or services to third parties. The Company and Union are subject to these restrictions in their intercompany transactions.

*<u>Bank Secrecy Act</u>*<u>.</u> Union is subject to federal laws establishing record keeping, customer identification and reporting requirements pertaining to large or suspicious cash transactions, purchases of other monetary instruments and the international transfer of cash or monetary instruments that may signify money laundering. Provisions designed to help combat international terrorism, were added to the Bank Secrecy Act by the 2001 USA Patriot Act. These provisions require banks to avoid establishing or maintaining correspondent accounts of foreign off-shore banks and banks in jurisdictions that have been found to fall significantly below international anti-money laundering standards. U.S. banks are also prohibited from opening correspondent accounts for off-shore shell banks, defined as banks that have no physical presence and that are not part of a regulated and recognized banking company. The USA Patriot Act requires all financial institutions to adopt an anti-money laundering program and to establish due diligence policies, procedures and controls that are reasonably designed to detect and report instances of money laundering in United States private banking accounts and correspondent accounts maintained for non-U.S. persons or their representatives. Since 2018, banks have been required to comply with enhanced customer due diligence regulations requiring collection of information on beneficial owners and control persons of legal entity customers.

The due diligence requirements issued by the Department of Treasury require minimum standards to verify customer identity and maintain accurate records, encourage information sharing cooperation among financial institutions, federal banking agencies and law enforcement authorities regarding possible money laundering or terrorist activities, prohibit the anonymous use of "concentration accounts" and require all covered financial institutions to have in place an anti-money laundering compliance program. In addition, the USA Patriot Act amended certain provisions of the federal Right to Financial Privacy Act to facilitate the access of law enforcement to bank customer records in connection with investigating international terrorism. The Bank Secrecy Act/Anti-Money Laundering statutory regime was significantly amended by the Anti-Money Laundering Act

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of 2020 ("AMLA"), which became effective on January 1, 2021. Among other provisions, AMLA establishes a new beneficial ownership database, codifies various information-sharing practices among financial institutions, law enforcement and FinCEN that have developed since enactment of the USA Patriot Act, enhances law enforcement subpoena powers with regard to foreign financial institutions that maintain correspondent accounts in the United States, and emphasizes the use of technology and automation in identifying financial crimes.

The USA Patriot Act also amended the BHC Act and the Bank Merger Act to require the federal banking agencies to consider the effectiveness of a financial institution's anti-money laundering program when reviewing applications under these acts for mergers, acquisitions, and certain other expansion activities.

*<u>SOX Act.</u>* This far reaching federal legislation, enacted in 2002, was generally intended to protect investors by strengthening corporate governance and improving the accuracy and reliability of corporate disclosures made pursuant to federal securities laws. The SOX Act includes provisions addressing, among other matters, the duties, functions and qualifications of Audit Committees for all public companies; certification of financial statements by the chief executive officer and the chief financial officer; the forfeiture of bonuses or other incentive-based compensation and profits from the sale of an issuer's securities by directors and senior officers in the twelve month period following initial publication of any financial statements that later require restatement; disclosure of off-balance sheet transactions; a prohibition on personal loans to directors and officers, except (in the case of banking companies) loans in the normal course of business; expedited filing requirements for reports of beneficial ownership of company stock by insiders; disclosure of a code of ethics for senior officers, and of any change or waiver of such code; the formation of a public accounting oversight board; auditor independence; disclosure of fees paid to the company's auditors for non-audit services and limitations on the provision of such services; attestation requirements for company management and external auditors, relating to internal controls and procedures; and various increased criminal penalties for violations of federal securities laws.

*<u>Nasdaq.</u>* In response to the SOX Act, the Nasdaq Exchange on which the Company's common stock is listed, implemented comprehensive corporate governance listing standards, including rules strengthening director independence requirements for boards and committees of the board, the director nomination process and shareholder communication avenues. These rules require the Company to annually certify to the Nasdaq, after each annual meeting, that the Company is in compliance and will continue to comply with the Nasdaq corporate governance requirements.

*<u>Taxing Authorities</u>*<u>.</u> The Company and Union are subject to income taxes at the Federal level and are individually subject to state taxation based on the laws of each state in which they operate. The Company and Union file a consolidated federal tax return with a calendar year end. The Company and Union have filed separate tax returns for each state jurisdiction affected for 2024 and will do the same for 2025. No tax return is currently being examined or audited by any taxing authority that the Company is aware of. The taxing authorities also regulate the information reporting requirements that Union is subject to, and which continue to increase and require resources to comply with.

**Available Information** 

The Company files annual, quarterly, current reports, proxy statements, and other documents with the SEC under the Securities Exchange Act of 1934 (the "Exchange Act"). These reports, proxy statements, and other documents are available to the public on the internet website maintained by the SEC at <u>www.sec.gov.</u>

Our Internet website address is <u>www.ublocal.com</u>. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, including any amendments to those reports filed or furnished pursuant to section 13(a) or 15(d), proxy statements filed pursuant to Section 14(a) and reports filed pursuant to Section 16, 13(d) and 13(g) of the Exchange Act are available free of charge through the Investor Relations page of our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information on our website is not incorporated by reference into this report.

The Company will also provide copies of this 2025 Annual Report on Form 10-K, free of charge, upon written request to its Treasurer at the Company's main address, PO Box 667, Morrisville, VT 05661-0667. Shareholder meeting materials for our 2026 Annual Meeting, including this Annual Report on Form 10-K, are available at <u>www.materials.proxyvote.com/905400</u> no later than the date on which they are mailed to shareholders.

**Item 1A. Risk Factors**

An investment in the Company involves risk, some of which, including market, liquidity, credit, operational, legal, compliance, reputational and strategic risks, could be substantial and is inherent in our business. The material risks and uncertainties that management believes affect the Company are described below. Any of the following risks could affect the Company's financial condition and results of operations and could be material and/or adverse in nature. You should consider all of the following risks together with all of the other information in this Annual Report on Form 10-K.

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**Credit and Interest Rate Risks**

***Our loans are concentrated in certain areas of Vermont and New Hampshire and adverse conditions in those markets could adversely affect our operations.***

We are exposed to real estate and economic factors throughout Vermont and New Hampshire. Further, because a substantial portion of our loan portfolio is secured by real estate in Vermont and New Hampshire, the value of the associated collateral is subject to real estate market conditions in those states and in the northern New England region more generally. Adverse economic, political and business developments or natural hazards may affect these areas and the ability of property owners in these areas to make payments of principal and interest on the underlying loans. If these areas experience adverse economic, political or business conditions, or significant natural hazards, we would likely experience higher rates of loss and delinquency on our loan portfolio than if the portfolio were more geographically diverse.

***If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings could decrease.***

As a lender, we are exposed to the risk that our loan customers may not repay their loans according to their terms and that the collateral or guarantees securing these loans may be insufficient to assure repayment. The underwriting and credit monitoring policies and procedures that we have adopted to address this risk may not prevent unexpected losses that could have a material adverse effect on our business, financial condition, results of operations and cash flows. We maintain an allowance for credit losses to provide for loan defaults and non-performance, which also includes increases for new loan growth. While we believe that our allowance for credit losses is appropriate to cover expected losses, we cannot provide assurance that we will not increase the allowance for credit losses further or that regulators will not require us to increase the allowance for credit losses, which could have a material adverse effect on our net income and financial condition.

Management makes various assumptions and judgments about the collectability of our loan portfolio, which are regularly reevaluated and are based in part on:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• current and forecasted economic conditions and their estimated effects on specific borrowers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an evaluation of the existing relationships among loans, potential credit losses and the present level of the allowance for credit losses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• results of examinations of our loan portfolios by regulatory agencies; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• management's internal review of the loan portfolio.

In determining the size of the allowance for credit losses, we rely on an analysis of our loan portfolio, our experience and a third-party economic forecast. If our assumptions prove to be incorrect, our current allowance for credit losses may not be sufficient to cover the losses.

In addition, third parties, including our federal and state regulators, periodically evaluate the adequacy of our allowance for credit losses and may communicate with us concerning the methodology or judgments that we have raised in determining the allowance for credit losses. As a result of this input, we may be required to assign different risk ratings to specific credits, increase our provision for credit losses, and/or recognize further loan charge offs which could have a material adverse effect on our net income and financial condition.

***Our commercial, commercial real estate and construction loan portfolio may expose us to increased credit risks.***

At December 31, 2025, approximately 41% of our loan portfolio was comprised of commercial and commercial real estate loans. In general, commercial and commercial real estate loans have historically posed greater credit risks than owner occupied residential mortgage loans. The repayment of commercial real estate loans depends on the business and financial condition of borrowers. Economic events and changes in government regulations, which we and our borrowers cannot control or reliably predict, could have an adverse impact on the cash flows generated by the businesses and properties securing our commercial and commercial real estate loans and on the values of the collateral securing those loans. Repayment of commercial loans depends substantially on the borrowers' underlying business, financial condition and cash flows. Commercial loans are generally collateralized by equipment, inventory, accounts receivable and other fixed assets. Compared to real estate, that type of collateral is more difficult to monitor, its value is harder to ascertain, it may depreciate more rapidly and it may not be as readily saleable if repossessed.

***Changes in interest rates and interest rate volatility may reduce our profitability.***

Our consolidated earnings and financial condition are primarily dependent upon net interest income, which is the difference between interest earned from loans and investments and interest paid on deposits and borrowings. Net interest income can be affected significantly by changes in market interest rates. In particular, changes in relative interest rates may reduce our net interest income as the difference between interest income and interest expense decreases. As a result, we have adopted asset and liability management policies to minimize the potential adverse effects of changes in interest rates on net interest income, primarily by altering the mix and maturity of loans, investments and funding sources. However, despite these measures there can be no assurance that a change in interest rates will not negatively impact our results of operations or financial condition.

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Because market interest rates may change by differing magnitudes and at different times, significant changes in interest rates over an extended period of time could reduce overall net interest income.

***The fair value of our investment securities can fluctuate due to factors outside of our control, and impairment of investment securities could require charges to earnings, which could result in a negative impact on our results of operations.***

As of December 31, 2025, the carrying value of our investment securities portfolio was approximately $326.3 million. Factors beyond our control can significantly influence the fair value of securities in our portfolio and can cause potential adverse changes to the fair value of these securities. These factors include, but are not limited to, rating agency actions in respect to the securities, defaults by the issuer or with respect to the underlying securities and changes in market interest rates and instability in the capital markets. Any of these factors, among others, could cause impairments and realized and/or unrealized losses in future periods and declines in other comprehensive income, which could have an adverse effect on our business, financial condition and results of operations.

AFS debt securities in an unrealized loss position, are evaluated by management for impairment, to determine whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security and the issuer, among other factors. If this assessment indicates that a credit loss exists, management compares the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an ACL is recorded, limited to the amount by which the amortized cost basis of the security exceeds its fair value. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income (loss), net of applicable taxes.

***A lack of liquidity could adversely affect the Company's financial condition and results of operations and result in regulatory restrictions.***

The Company must maintain sufficient funds to respond to the needs of depositors and borrowers and for other liquidity needs. Deposits have traditionally been the Company's primary source of funds for use in lending and investment activities and are emphasized due to the relatively lower cost of these funds. The Company also receives funds from loan repayments, investment maturities and income on other interest-earning assets, as well as borrowings. If the Company is required to rely more heavily on more expensive funding sources to support liquidity and future growth, its revenues may not increase proportionately to cover its increased costs, which would adversely affect its operating margins, profitability and growth prospects. Alternatively, the Company may need to sell a portion of its investment securities portfolio to raise funds, which, as discussed below, could result in a loss. Any decline in funding could adversely impact the Company's ability to originate loans, invest in securities, pay expenses, or fulfill obligations such as repaying its borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on its liquidity, business, financial condition and results of operations. A lack of liquidity could also attract increased regulatory scrutiny and potentially result in restraints imposed by regulators. Depending on the capitalization status and regulatory treatment of depository institutions, including whether an institution is subject to a supervisory prompt corrective action directive, regulatory restrictions and prohibitions may include restrictions on growth, restrictions on interest rates paid on deposits, restrictions or prohibitions on payment of dividends and restrictions on the acceptance of brokered deposits.

***Elevated and volatile interest rates have reduced the value of the Company's securities portfolio, and the Company could realize losses if it is required to sell such securities to meet liquidity needs.***

The Company's securities portfolio consists primarily of fixed income securities whose market values are sensitive to changes in interest rates. Although interest rates have declined somewhat over the past year and a half, rates remain elevated compared to historical levels; and are subject to volatility. As a result, the trading values of previously issued government and other fixed income securities continue to be lower than their historical levels, resulting in unrealized losses embedded in the Company's securities portfolio.

While unrealized losses do not directly affect earnings unless realized, they reduce the market value of securities that may otherwise serve as a source of liquidity. The Company generally intends to hold its investment securities to maturity or recovery of amortized cost and does not currently anticipate selling such securities. However, under certain circumstances—including unanticipated deposit outflows, reduced access to wholesale funding markets, or other liquidity stress events—the Company may be required to sell securities prior to maturity.

If the Company were to sell securities in a period of elevated interest rates or adverse market conditions, it could be required to realize losses that were previously unrealized. Such realized losses could adversely affect the Company's earnings, regulatory capital ratios, financial condition, and results of operations, and could limit financial flexibility or require the Company to raise additional capital or funding on less favorable terms.

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Although the Company has taken, and continues to take, actions to manage interest rate risk and diversify its funding sources, including maintaining contingent liquidity resources and rebalancing its investment portfolio, there can be no assurance that these measures would be sufficient to prevent the need to sell securities at unfavorable prices in the event of significant or sustained liquidity stress.

***Potential deterioration in the performance or financial position of the Federal Home Loan Bank ("FHLB") of Boston might restrict our funding needs and may adversely impact our financial condition and results of operations.***

Significant components of our liquidity needs are met through our access to funding pursuant to our membership in the FHLB. The FHLB is a cooperative that provides services to its member banking institutions. The primary reason for joining the FHLB is to obtain funding. The purchase of stock in the FHLB is a requirement for a member to gain access to funding. Any deterioration in the FHLB's performance or financial condition may affect our ability to access funding and/or require us to deem the required investment in FHLB stock to be impaired. If we are not able to access funding through the FHLB, we may not be able to meet our liquidity needs, which could have an adverse effect on our results of operations or financial condition. Similarly, if we deem all or part of our investment in FHLB stock impaired, such action could have an adverse effect on our financial condition or results of operations.

***Prepayments of loans may negatively impact our business***.

Generally, our customers may prepay the principal amount of their outstanding loans at any time. The speed at which such prepayments occur, as well as the size of such prepayments, are within our customers' discretion and are influenced by the interest rate environment, over which we have no control. If customers prepay the principal amount of their loans, and we are unable to lend those funds to other borrowers or invest the funds at the same or higher interest rates, our interest income will be reduced. A significant reduction in interest income could have a negative impact on our results of operations and financial condition.

***Environmental liability associated with our lending activities could result in losses.***

In the course of business, we may acquire, through foreclosure, properties securing loans we have originated or purchased that are in default. Particularly in commercial real estate lending, there is a risk that material environmental violations could be discovered at these properties. In this event, we might be required to remedy these violations at the affected properties at our sole cost and expense. The cost of remedial action could substantially exceed the value of affected properties. We may not have adequate remedies against the prior owners or other responsible parties and could find it difficult or impossible to sell the affected properties. These events could have an adverse effect on our financial condition and results of operations.

**Risks Relating to Regulation of the Industry**

***We operate in a highly regulated environment and may be adversely affected by changes in laws, regulations and monetary policy.***

We are subject to regulation and supervision by the FRB and Union Bank is subject to regulation and supervision by the FDIC and the DFR. Federal and state laws and regulations govern numerous matters affecting us, including changes in the ownership or control of banks and bank holding companies, maintenance of adequate capital and sound financial condition, branching activities, permissible types, amounts and terms of loans and investments, permissible nonbanking activities, the level of reserves against deposits and restrictions on dividend payments. The FDIC and the DFR possess the power to issue cease and desist orders against banks subject to their jurisdiction to prevent or remedy unsafe or unsound banking practices or violations of law, and the FRB possesses similar powers with respect to bank holding companies. These and other restrictions limit the manner in which we may conduct business and obtain financing.

We are also affected by the monetary policies of the FRB. Changes in monetary or legislative policies may affect the interest rates we offer to attract deposits and the interest rates we charge on our loans in order to remain competitive, as well as the manner in which we offer deposits and make loans. These monetary policies also affect the valuation of our investment securities and have had, and are expected to continue to have, significant effects on the operating results of depository institutions generally, including Union Bank.

The laws, rules, regulations, and supervisory guidance and policies applicable to us are subject to regular modification and change. It is impossible to predict the competitive impact that any such future changes would have on the banking and financial services industry in general or on our business in particular. Such changes may, among other things, increase the cost of doing business, limit permissible activities, or affect the competitive balance between banks and other financial institutions. The Dodd-Frank Act instituted major changes to the regulatory regimes governing banks and other financial institutions, resulting in increased government intervention in the financial services sector. Other changes to statutes, regulations, or regulatory policies, including changes in interpretation or implementation of statutes, regulations, or policies, could affect us in substantial and unpredictable ways. Such changes could subject us to additional costs, limit the types of financial services and products we may offer, and/or increase the ability of non-banks to offer competing financial services and products, among other things. Failure to

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comply with laws, regulations, or policies could result in sanctions by regulatory agencies, civil money penalties, and/or reputational damage, which could have a material adverse effect on our business, financial condition, or results of operations.

***Additional requirements imposed by the Dodd-Frank Act could adversely affect us.***

The Dodd-Frank Act comprehensively reformed the regulation of financial institutions, products and services. Among other things, the Dodd-Frank Act established the CFPB as an independent government bureau which derives its funding from the FRB. The CFPB has the authority to prescribe rules for all depository institutions governing the provision of consumer financial products and services, which may result in rules and regulations that reduce the profitability of such products and services or impose greater costs and restrictions on us and our subsidiaries. The Dodd-Frank Act also established new minimum mortgage underwriting standards for residential mortgages, and the regulatory agencies have focused on the examination and supervision of mortgage lending and servicing activities.

The CFPB's qualified mortgage rule, or "QM Rule," became effective on January 10, 2014. The QM Rule requires mortgage lenders, prior to originating most residential mortgage loans, to make a determination of a borrower's ability to repay the loan and establishes protections from liability under this requirement for so-called "qualified mortgages" that meet certain heightened criteria. If a mortgage lender does not appropriately establish a borrower's ability to repay the loan, the borrower may be able to assert against the originator of the loan or any subsequent transferee, as a defense to foreclosure by way of recoupment or setoff, a violation of the ability-to-repay requirement. Loans that meet the definition of "qualified mortgage" will be presumed to have complied with the ability-to-repay standard. Although amendments to the QM Rule adopted by the CFPB in March 2021 will make it less challenging for a loan to meet the definition, the QM Rule and related ability-to-repay requirements and similar rules could nevertheless still limit Union's ability to make certain types of loans or loans to certain borrowers, or could make it more expensive and time-consuming to make these loans, which could limit the Bank's growth or profitability.

Current and future legal and regulatory requirements, restrictions, and regulations may adversely impact our profitability and may have a material and adverse effect on our business, financial condition, or results of operations; may require us to invest significant management attention and resources to evaluate and make any changes required by the legislation and related regulations; and may make it more difficult for us to attract and retain qualified executive officers and employees.

***We are subject to stringent capital requirements which may adversely impact our return on equity, require additional capital raises, or limit our ability to pay dividends or repurchase shares.***

Federal regulations establish minimum capital requirements for insured depository institutions, including minimum risk-based capital and leverage ratios, and define "capital" for calculating these ratios. The minimum capital requirements are: (i) a common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 to risk-based assets capital ratio of 6%; (iii) a total capital ratio of 8%; and (iv) a Tier 1 leverage ratio of 4%. The regulations also establish a "capital conservation buffer" of 2.5%, which if complied will result in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0%; (ii) a Tier 1 to risk-based assets capital ratio of 8.5%; and (iii) a total capital ratio of 10.5%. An institution will be subject to limitations on paying dividends, engaging in share repurchases and paying discretionary bonuses if its capital level falls below the capital conservation buffer amount. The application of these capital requirements could, among other things, require us to maintain higher capital resulting in lower returns on equity, and we may be required to obtain additional capital to comply or be subject to regulatory actions if we are unable to comply with such requirements.

***We may incur fines, penalties and other negative consequences from regulatory violations, possibly even inadvertent or unintentional violations.*** 

As a financial institution, we are subject to a complex system of laws, regulations and regulatory guidance. We maintain systems and procedures designed to ensure that we comply with applicable laws, regulations and regulatory guidance. However, some legal/regulatory frameworks provide for the imposition of fines or penalties for noncompliance even though the noncompliance was inadvertent or unintentional and even though there was in place at the time systems and procedures designed to ensure compliance. For example, we are subject to regulations issued by the Office of Foreign Assets Control, or "OFAC," that prohibit financial institutions from participating in the transfer of property belonging to the governments of certain foreign countries and designated nationals of those countries and certain other persons or entities whose interest in property is blocked by OFAC-administered sanctions. OFAC may impose penalties for inadvertent or unintentional violations even if reasonable processes are in place to prevent the violations. There may be other negative consequences resulting from a finding of noncompliance, including restrictions on certain activities. Such a finding may also damage our reputation and could restrict the ability of institutional investment managers to invest in our securities.

***We face significant legal risks, both from regulatory investigations and proceedings and from private actions brought against us.***

Our businesses and operations are subject to increasing regulatory oversight and scrutiny, which could lead to regulatory investigations or enforcement actions. These and other initiatives from federal and state officials could result in judgments,

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settlements, fines or penalties, or require us to restructure our operations and activities, all of which could lead to reputational damage, or higher operational costs, or both, thereby reducing our revenue.

From time to time we are named as a defendant or are otherwise involved in various legal proceedings. There is no assurance that litigation with private parties will not increase in the future. Future actions against us may result in judgments, settlements, fines, penalties or other results adverse to us, which could materially adversely affect our business, financial condition or results of operations, or cause serious reputational harm to us. As a participant in the financial services industry, we are exposed to a high level of litigation related to our business and operations. Although we maintain insurance, the scope of this coverage may not provide us with full, or even partial, coverage in any particular case. As a result, a judgment against us in any such litigation could have a material adverse effect on our financial condition and results of operation.

**Accounting and Tax Risks**

***Changes in accounting standards can be difficult to predict and can materially impact how we record and report our financial condition and results of operations.***

Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. From time to time, the FASB changes the financial accounting and reporting standards that govern the preparation of our financial statements. These changes can be hard to anticipate and implement and can materially impact how we record and report our financial condition and results of operations.

***Changes in tax laws and regulations and differences in interpretation of tax laws and regulations may adversely impact our financial statements.***

State or federal tax authorities may interpret tax laws and regulations differently than we do and challenge tax positions that we have taken on tax returns. This may result in differences in the treatment of revenues, deductions, credits and/or differences in the timing of these items. The differences in treatment may result in payment of additional taxes, interest or penalties that could have a material adverse effect on our results. In addition, there may be future changes to tax laws, administrative rulings or court decisions that could adversely affect our financial condition, including an increased provision for income taxes and/or reduced net income. We are not able to predict the timing or impact of any changes in state or federal tax laws. The taxing authorities also regulate the information reporting requirements that Union is subject to, and which continue to increase and require resources to comply with.

***We may be required to write down goodwill and other identifiable intangible assets.***

When we acquire a business, a portion of the purchase price of the acquisition may be allocated to goodwill and other identifiable intangible assets. The excess of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired determines the amount of the purchase price that is allocated to goodwill acquired. At December 31, 2025, there was no remaining unamortized identifiable intangible asset and our goodwill from the 2011 Branch Acquisition was approximately $2.2 million. Under current accounting standards, if we determine that goodwill or intangible assets are impaired, we would be required to write down the value of these assets to fair value. We conduct an annual review, or more frequently if events or circumstances warrant, to determine whether goodwill is impaired. We recently completed our goodwill impairment analysis as of December 31, 2025 and concluded goodwill was not impaired. We conduct a review of our other intangible assets for impairment should events or circumstances warrant. We cannot provide assurance that we will not be required to take an impairment charge in the future. Any impairment charge would have a negative effect on our shareholders' equity and financial results and may cause a decline in our stock price.

***The accuracy of our financial statements and related disclosures could be affected if the judgments, assumptions or estimates used in our critical accounting policies are inaccurate.***

The preparation of financial statements and related disclosure in conformity with GAAP requires us to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. Our critical accounting policies, which are described in Item 7 of this report under "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies", constitute those significant accounting policies and methods used in the preparation of our consolidated financial statements that we consider "critical" because they require judgments, assumptions and estimates that materially affect our consolidated financial statements and related disclosures. As a result, if future events differ significantly from management's judgments, assumptions and estimates in our critical accounting policies, those events or assumptions could have a material impact on our consolidated financial statements and related disclosures.

**Risks Relating to the Company's Stock**

***If we do not maintain net income growth, the market price of our common stock could be adversely affected.***

Our return on stockholders' equity and other measures of profitability, which affect the market price of our common stock,

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depend in part on our continued growth and expansion. Our growth strategy has two principal components: internal growth and external growth. Our ability to generate internal growth is affected by the competitive factors described below as well as by the primarily rural characteristics and related demographic features of the markets we serve.

***We are a holding company and depend on Union Bank for dividends, distributions and other payments.***

We are a legal entity that is separate and distinct from Union Bank. Our revenue (on a parent company only basis) is derived primarily from interest and dividends paid to us by Union Bank. Our right, and consequently the right of our shareholders, to participate in any distribution of the assets or earnings of any subsidiary through the payment of such dividends or otherwise is necessarily subject to the prior claims of creditors including holders of our subordinated notes, and also including depositors, in the case of Union Bank, except to the extent that certain claims of Union in a creditor capacity may be recognized.

***Our stockholders may not receive dividends on our common stock.***

Holders of our common stock are entitled to receive dividends only when, as and if declared by our board of directors. Although we have historically declared regular quarterly cash dividends on our common stock, we are not required to do so and our board of directors may reduce or eliminate our common stock dividend, or change the frequency at which dividends are paid, in the future. The FRB has the authority to prohibit a bank holding company, such as us, from paying dividends if it deems such payment to be an unsafe or unsound practice. The FDIC has the authority to use its enforcement powers to prohibit Union from paying dividends to us if, in its opinion, the payment of dividends would constitute an unsafe or unsound practice. Federal law also prohibits the payment of dividends by a bank that will result in the bank failing to meet its applicable capital requirements on a pro forma basis. Further, our ability to pay dividends would be restricted if we do not maintain a required capital conservation buffer under applicable regulatory capital rules. A reduction or elimination of dividends could adversely affect the market price of our common stock.

***We may need to raise additional capital in the future and such capital may not be available when needed or on acceptable terms.***

As a bank holding company, we are required by the FRB to maintain adequate levels of capital to support our operations. We may need to raise additional capital in the future to provide us with sufficient capital resources and liquidity to meet our commitments and business needs. Our ability to raise additional capital, if needed, will depend on, among other things, conditions in the capital markets at that time, which are outside of our control, and our financial performance. We cannot assure you that such capital will be available to us on acceptable terms or at all. Our inability to raise sufficient additional capital on acceptable terms when needed could subject us to certain activity restrictions or to a variety of enforcement remedies available to the FRB, including limitations on our ability to pay dividends or pursue acquisitions, the issuance by the FRB of a capital directive to increase capital and to the extent the capital of Union Bank is adversely affected, the termination of deposit insurance by the FDIC.

***Market volatility may impact our business and the value of our common stock.***

Our business performance and the trading price of our common stock may be affected by many factors affecting financial institutions, including the interest rate environment, volatility in the credit, mortgage and housing markets, the markets for securities relating to mortgages or housing, and the value of debt and mortgage-backed securities and other securities that we hold in our investment portfolio. Market volatility in financial institution stocks may also result from high profile bank failures. In addition, government action and legislation may impact us and the value of our common stock. We cannot predict what impact, if any, market volatility will have on our business or share price and for these and other reasons our shares of common stock may trade at a price lower than that at which they were purchased.

***Certain provisions of our articles of incorporation may have an anti-takeover effect.***

Provisions of our articles of incorporation and bylaws and regulations and federal banking laws, including regulatory approval requirements, could make it more difficult for a third party to acquire us, even if doing so would be perceived to be beneficial to our shareholders. The combination of these provisions may inhibit a non-negotiated merger or other business combination, which, in turn, could adversely affect the market price of our common stock.

***If we identify any material weakness in our internal controls over financial reporting and fail to correct it, or otherwise fail to maintain effective internal controls over financial reporting, we may not be able to report our financial results accurately and timely, in which case our business may be harmed, investors may lose confidence in the accuracy and completeness of our financial reports, and the price of our common stock may decline.***

Our management is responsible for establishing and maintaining adequate internal controls over financial reporting and for evaluating and reporting on our system of internal controls. Our internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

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We are subject to FDICIA and other rules that govern financial institutions. Recent amendments to FDICIA and its implementing regulations increased the asset-size thresholds and modified certain requirements related to internal control reporting and auditor attestation. Under the revised framework, institutions that meet applicable asset thresholds are required to provide management's assessment of the effectiveness of internal control over financial reporting, and institutions that exceed higher asset thresholds are also required to obtain an attestation report from their independent registered public accounting firm on the effectiveness of those controls. While these changes may affect the scope, timing, and cost of compliance, they do not reduce management's responsibility to maintain effective internal controls over financial reporting or the risk that control deficiencies could arise. As we grow or as regulatory requirements evolve, we may become subject to additional or more stringent FDICIA requirements, including expanded documentation, testing, and governance expectations.

If we identify material weaknesses in our internal controls over financial reporting in the future, if we cannot comply with the requirements of FDICIA in a timely manner or attest that our internal controls over financial reporting are effective, or if our independent registered public accounting firm cannot express an opinion as to the effectiveness of our internal controls over financial reporting when required, we may not be able to report our financial results accurately and timely. As a result, investors, counterparties and customers may lose confidence in the accuracy and completeness of our financial reports; our liquidity, access to capital markets and perceptions of our creditworthiness could be adversely affected; and the market price of our common stock could decline. In addition, we could become subject to investigations by the Nasdaq stock exchange, on which our common stock is listed, the SEC, the FRB, the FDIC, or other regulatory authorities, which could require additional financial and management resources. These events could have an adverse effect on our business, financial condition and results of operations.

***Environmental, social and governance oversight may influence the Company's stock price and increase compliance costs.***

Some investors have begun to consider how corporations, such as the Company, are addressing environmental, social, and governance matters, commonly referred to as "ESG" matters, when making investment decisions. Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions, and human rights. Specific examples of matters being evaluated as part of the investment decision or recommendation by certain investors include the business risks of climate change and the adequacy of companies' responses to climate change, diversity of a company's management and/or board of directors, community involvement and charitable giving, and the inclusion of ESG factors in the determination of the executive compensation. These shifts in investing priorities may result in adverse effects on the trading price of the Company's common stock if investors determine, whether real or perceived, that the Company's ESG actions are not satisfactory.

**Operational Risks**

***We are exposed to losses from fraud, theft, and other financial crimes, which could adversely affect our results of operations and financial condition.***

We face the risk of losses arising from fraudulent or criminal activity, including unauthorized transactions, account takeovers, forged, altered, or counterfeit instruments, and other schemes targeting our customers, employees, or systems. These risks include, among others, check fraud, wire and ACH fraud, debit card fraud, mobile and remote deposit fraud, and other payment-related misconduct. Fraudulent activity may be difficult to detect or prevent, particularly where transactions are initiated through customer channels or where applicable funds availability requirements require us to make funds available before fraudulent activity is identified. Despite the implementation of fraud detection systems, internal controls, customer authentication procedures, and employee training, such measures may not be effective in preventing all losses. Losses resulting from fraud may result in direct financial exposure, customer reimbursement obligations, litigation, regulatory scrutiny, reputational harm, or increased operational and compliance costs. In addition, evolving fraud techniques, including those that exploit remote deposit capture and other electronic delivery channels, may increase the frequency or severity of losses. Any of these factors could adversely affect our business, results of operations, and financial condition.

***A failure in or breach of our operational systems, information systems, or infrastructure, or those of our third party vendors and other service providers, may result in financial losses, loss of customers, or damage to our reputation.***

We rely heavily on communications and information systems to conduct our business. In addition, we rely on third parties to provide key components of our infrastructure, including internet connections, network access and processing services. These types of information and related systems are critical to the operation of our business and essential to our ability to perform day-to-day operations, and, in some cases, are critical to the operations of certain of our customers. These third parties with which we do business or that facilitate our business activities, including exchanges, clearing firms, financial intermediaries or vendors that provide services or security solutions for our operations, could also be sources of operational and information security risk to us, including breakdowns or failures of their own systems or capacity constraints. Although we have safeguards and business continuity plans in place, our business operations may be adversely affected by significant and widespread disruption to our physical infrastructure or operating systems that support our business and our customers, resulting in financial losses, loss of customers, or damage to our reputation.

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***An interruption or breach in security of our information systems or those related to merchants and third party vendors, including as a result of cyber attacks, could disrupt our business, result in the disclosure or misuse of confidential customer or proprietary information, damage our reputation, or result in financial losses.***

Our technologies, systems, networks and software, and those of other financial institutions have been, and are likely to continue to be, the target of cybersecurity threats and attacks, which may range from uncoordinated individual attempts to sophisticated and targeted measures directed at us. These cybersecurity threats and attacks may include, but are not limited to, attempts to access information, including customer and Company information, malicious code, computer viruses and denial of service attacks that could result in unauthorized access, misuse, loss or destruction of data (including confidential customer information), account takeovers, unavailability of service, ransomware attacks or other events. These types of threats may result from human error, fraud or malice on the part of external or internal parties, or from accidental technological failure. Further, to access our products and services our customers may use computers and mobile devices that are beyond our security control systems. The risk of a security breach or disruption, particularly through cyber-attack or cyber intrusion, including by computer hackers, has increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.

Our business requires the collection and retention of large volumes of customer data, including payment card numbers and other personally identifiable information in various information systems that we maintain and in those maintained by third parties with whom we contract to provide data services. We also maintain important internal Company data such as personally identifiable information about our employees and information relating to our operations. The integrity and protection of that customer and Company data is important to us. As customer, public, legislative and regulatory expectations and requirements regarding operational and information security have increased, our operations systems and infrastructure must be continually safeguarded and monitored for potential failures, disruptions and breakdowns.

Our customers and employees have been, and will continue to be, targeted by parties using fraudulent e-mails and other communications in attempts to misappropriate passwords, payment card numbers, bank account information or other personal information or to introduce viruses to our customers' computers. These communications may appear to be legitimate messages sent by Union Bank or other businesses, but direct recipients to fake websites operated by the sender of the e-mail or request that the recipient send a password or other confidential information via e-mail or download a program. Despite our efforts to mitigate these threats through product improvements, use of encryption and authentication technology to secure online transmission of confidential consumer information, and customer and employee education, such attempted frauds against us or our merchants and our third party service providers remain a serious issue. The pervasiveness of cyber security incidents in general and the risks of cyber-crime are complex and will continue to evolve.

Although we make significant efforts to maintain the security and integrity of our information systems and have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging. Even the most well-protected information, networks, systems and facilities remain potentially vulnerable because attempted security breaches, particularly cyber-attacks and intrusions, or disruptions will occur in the future, and because the techniques used in such attempts are constantly evolving and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may not be detected. Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is virtually impossible for us to entirely mitigate this risk. A security breach or other significant disruption could: (i) disrupt the proper functioning of our networks and systems and therefore our operations and/or those of certain of our customers; (ii) result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of confidential, sensitive or otherwise valuable information of ours or our customers, including account numbers and other financial information; (iii) result in a violation of applicable privacy, data breach and other laws, subjecting the Bank to additional regulatory scrutiny and exposing the Company to civil litigation, governmental fines and possible financial liability; (iv) require significant management attention and resources to remedy the damages that result; or (v) harm our reputation or cause a decrease in the number of customers that choose to do business with us or reduce the level of business that our customers do with us. The occurrence of any such failures, disruptions or security breaches could have a negative impact on our results of operations, financial condition, and cash flows as well as damage our brand and reputation.

Although we maintain an insurance policy covering certain cybersecurity risks which we believe provides appropriate coverage for a financial institution of our size and business and technology profile, we cannot provide any assurance that such policy would be sufficient to cover all financial losses or damages we might suffer in the event that we or one of our third party vendors experiences a system failure or suffers a system intrusion or other cyberattack.

***We rely on other companies to provide key components of our business infrastructure.***

Third party vendors provide key components of our business infrastructure such as internet connections, network access and core application processing. While we have selected these third party vendors carefully, we do not control their actions. Any

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problems caused by these third parties, including as a result of their not providing us their services for any reason or their performing their services poorly, could adversely affect our ability to deliver products and services to our customers or otherwise conduct our business efficiently and effectively. Replacing these third party vendors could also entail significant business disruption, delay and expense.

***We are piloting and selectively using artificial intelligence and machine learning technologies in limited, primarily internal functions, which exposes us to operational, regulatory, and reputational risks that could adversely affect our business.***

We have begun piloting artificial intelligence ("AI") and machine learning tools in certain internal and support functions, such as data analysis, fraud monitoring support, compliance processes, and operational efficiency initiatives. These technologies are complex and evolving, and our experience with them remains limited. AI systems may produce inaccurate, incomplete, or misleading outputs, or behave in ways that are difficult to predict or explain. Errors or failures in these tools—whether due to data limitations, model design, third-party technology, or employee misuse—could impair decision-making, reduce the effectiveness of internal controls, or require us to suspend or modify pilot programs.

The legal and regulatory framework governing AI use in banking is developing and uncertain. Banking regulators have increased focus on governance, risk management, and controls related to emerging technologies, including AI. Although our current AI use is limited, our existing policies, procedures, and internal control frameworks may not fully address the risks associated with AI technologies. If regulators determine that our oversight, documentation, or controls are inadequate, we could be required to enhance governance, incur additional compliance costs, or limit future use of AI tools.

In addition, even limited AI use may create reputational risk. Internal system failures, data issues, cybersecurity incidents, or negative perceptions regarding the appropriateness of AI use in banking could adversely affect our relationships with customers, regulators, and other stakeholders. As we evaluate whether to expand AI use over time, these risks may increase and could have a material adverse effect on our business, results of operations, or financial condition.

**Strategic Risks**

***Competition in the local banking industry may impair our ability to attract and retain customers at current levels.***

Competition in the markets in which we operate may limit our ability to attract and retain customers. In particular, we compete for loans, deposits and other financial products and services with local independent banks, thrift institutions, savings institutions, mortgage brokerage firms, credit unions, finance companies, trust companies, mutual funds, insurance companies and brokerage and investment banking firms operating locally as well as nationally. Additionally, we compete with banks and other financial institutions with larger capitalization, as well as financial intermediaries not subject to bank regulatory restrictions, which have larger lending limits and are able to serve the credit and investment needs of larger customers. There is also increased competition by out-of-market competitors through the Internet. If we are unable to attract and retain customers, we may be unable to continue our loan growth and our results of operations and financial condition may otherwise be negatively impacted.

***We may incur significant losses as a result of ineffective risk management processes and strategies.***

We seek to monitor and control our risk exposure through a risk and control framework encompassing a variety of separate but complementary financial, credit, operational, compliance and legal reporting systems, internal controls, management review processes and other mechanisms. While we employ a broad and diversified set of risk monitoring and risk mitigation techniques, those techniques and the judgments that accompany their application may not be effective and may not anticipate every economic and financial outcome in all market environments or the specifics and timing of such outcomes.

***Expansion or contraction of our branch network may adversely affect our financial results.***

The Company cannot assure that the opening of new branches will be accretive to earnings within a reasonable period of time or at all. Numerous factors contribute to the performance of a new branch, such as suitable location, qualified personnel, and an effective marketing strategy. Additionally, it takes time for a new branch to gather sufficient loans and deposits to generate income sufficient to cover its operating expenses. Difficulties we experience in opening new branches may have a material adverse effect on the our financial condition and results of operations. Additionally, we cannot assure that the closing of branches would not adversely affect earnings.

***We must adapt to information technology changes in the financial services industry, which could present operational issues, require significant capital spending, or impact our reputation.***

The financial services industry is constantly undergoing technological changes, with frequent introductions of new technology-driven products and services. We invest significant resources in information technology system enhancements in order to meet customer expectations and provide functionality and security at an appropriate level. The effective use of technology increases efficiency and enables financial institutions to better serve customers and reduce costs. Our future success will depend, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy

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customer demands for convenience, as well as to create additional efficiencies in our operations. We may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our customers. Failure to successfully implement and integrate future system enhancements could adversely impact our ability to provide timely and accurate financial information in compliance with legal and regulatory requirements, which could result in sanctions from regulatory authorities. Such sanctions could include fines and suspension of trading in our stock, among others. In addition, future system enhancements could have higher than expected costs and/or result in operating inefficiencies, which could increase the costs associated with the implementation as well as ongoing operations.

Failure to properly utilize system enhancements that are implemented in the future could result in impairment charges that adversely impact our financial condition and results of operations and could result in significant costs to remediate or replace the defective components. In addition, we may incur significant training, licensing, maintenance, consulting and amortization expenses during and after systems implementations, and any such costs may continue for an extended period of time.

**Economic Risks**

***External economic factors, such as changes in monetary policy and inflation and deflation, may have an adverse effect on our business, financial condition and results of operations.***

Our financial condition and results of operations are affected by credit policies of monetary authorities, particularly the Federal Reserve. Actions by monetary and fiscal authorities, including the Federal Reserve, could lead to inflation, deflation or other economic phenomena that could adversely affect our financial performance. The primary impact of inflation on our operations most likely will be reflected in increased operating costs. Conversely, deflation generally will tend to erode collateral values and diminish loan quality. Virtually all of our assets and liabilities are monetary in nature. As a result, interest rates have a more significant impact on our performance than general levels of inflation or deflation. Inevitably, not all of our interest rate-sensitive assets and liabilities will re-price simultaneously and in equal volume in response to changes in the federal funds rate, and therefore the potential for interest rate exposure exists.

***Our financial condition and results of operations have been adversely affected, and may continue to be adversely affected, by general market and economic conditions.***

We have been, and continue to be, impacted by general business and economic conditions in the United States and, to a lesser extent, abroad. These conditions include short-term and long-term interest rates, inflation, money supply, political issues, legislative and regulatory changes, fluctuations in both debt and equity capital markets, broad trends in industry and finance, unemployment and the condition of the U.S. economy and the local economies in which we operate, all of which are beyond our control. Deterioration or continued weakness in any of these factors could result in increases in loan delinquencies and nonperforming assets, and in decreases in loan collateral values, the value of our investment portfolio and the demand for our products and services.

***Our business and financial results could be adversely affected by the political environment and governmental policies.***

Our business and financial results may also be affected by changes in government policies following the 2024 U.S. election and the new administration. There remains significant market uncertainty as to how the current U.S. administration's corresponding policy changes could impact us or our customers. For example, the current U.S. administration has adopted and may consider trade policies and tariffs, other controls on imports or exports, and other foreign policy initiatives that could affect our business and supply chains. The U.S. federal government, U.S. states and certain other countries and regions have adopted or are considering legislation, regulation or policies that reflect diverse, diverging and, in some cases, potentially conflicting policy goals. Compliance with such laws, regulations or policies, including any that may be adopted in the future, could, among other things, increase the costs of operating our business, reduce the demand for our products and services, impact our ability to meet or maintain current or future goals or targets or continue initiatives and increase our legal, operational and reputational risks, any or all of which could materially adversely affect our results of operations. Failure, or perceived failure, to comply with any legislation, regulation or policy, including as a result of making good faith interpretations that may differ from those taken by enforcement authorities in relevant jurisdictions, could potentially result in substantial fines, criminal sanctions, reputational harm or operational changes.

**General Risks**

***We may be unable to attract and retain key personnel.***

Our success depends, in large part, on our ability to attract and retain key personnel. Competition for qualified personnel in the financial services industry can be intense and we may not be able to hire or retain the key personnel that we depend upon for success. The unexpected loss of services of one or more of our key personnel could have a material adverse impact on our business because of the loss of their skills, knowledge of the markets in which we operate and years of industry experience, and because of the difficulty of promptly finding qualified replacement personnel.

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***We are subject to reputational risk.***

We are dependent on our reputation within our market area, as a trusted and responsible financial service provider, for all aspects of our relationships with customers, employees, vendors, third-party service providers, and others, with whom we conduct business or potential future business. Our actual or perceived failure to (i) identify and address potential conflicts of interest, ethical issues, money-laundering, or privacy issues; (ii) meet legal and regulatory requirements applicable to Union and to the Company; (iii) maintain the privacy of customer and accompanying personal information; (iv) maintain adequate record keeping; or (v) identify the legal, reputational, credit, liquidity and market risks inherent in our products, could give rise to reputational risk that could harm our business prospects and adversely affect our financial condition and results of operations. If we fail to address any of these issues in an appropriate manner, we could be subject to additional legal risks, which, in turn, could increase the size and number of litigation claims and damages asserted or subject us to enforcement actions, fines and penalties and cause us to incur related costs and expenses. Our ability to attract and retain customers and employees could be adversely affected to the extent our reputation is damaged.

***We face significant and increasing competition in the financial services industry.***

We operate in a highly competitive environment that includes financial and non-financial services firms, including traditional banks, online banks, financial technology companies, wealth management companies and others. These companies compete on the basis of, among other factors, size, quality and type of products and services offered, price, technology and reputation. Emerging technologies have the potential to intensify competition and accelerate disruption in the financial services industry. In recent years, non-financial services firms, such as financial technology companies, have begun to offer services traditionally provided by financial institutions. These firms attempt to use technology and mobile platforms to enhance the ability of companies and individuals to make payments, borrow money, save and invest. Our ability to compete successfully depends on a number of factors, including our ability to develop and execute strategic plans and initiatives; to develop competitive products and utilize evolving technologies; and to attract, retain and develop a highly skilled employee workforce. If we are not able to compete successfully, we could be placed at a competitive disadvantage, which could result in the loss of customers and market share, and our business, results of operations and financial condition could suffer.

**Item 1B. Unresolved Staff Comments**

Not applicable.

**Item 1C. Cybersecurity**

Our Company faces a number of cybersecurity risks in connection with the operation of our business which could have a material adverse effect on our business financial condition, results of operations, cash flows, or reputation. As part of the operation of our business, the Company, and our service providers, use, store, and process data for our customers, employees, partners, and suppliers. A cybersecurity incident impacting any of these entities could materially and adversely affect our operations, performance, or results of operations. In addition, as a financial services company we are subject to extensive regulatory compliance requirements, including those established by the FRB, FDIC and the DFR. To address these risks and regulatory requirements, the Company established a robust cybersecurity risk management program. This program safeguards sensitive customer data, financial transactions, and our information systems, serving as a vital component of our broader enterprise risk management strategy.

*Risk Management Oversight and Governance*

The Company's Board of Directors is charged with overseeing and approving Union's risk management framework and monitoring adherence to related policies required by applicable statutes, regulations and principles of safety and soundness. Union's Information Security Officer (ISO) provides periodic updates regarding cybersecurity risks and the cybersecurity program to the Board of Directors. Additionally, awareness and training on cybersecurity topics is provided to the Company's Board of Directors on a regular basis. Consistent with this responsibility the Board has delegated primary oversight responsibility over the risk management framework and oversight of the cybersecurity program, including oversight of cybersecurity risk and cybersecurity risk management, to Union's IT Steering Committee.

Union's IT Steering Committee includes Bank information technology personnel, information security personnel, other department leaders and stakeholders, and Union's senior management team. This Committee receives regular updates on the state of Union's cybersecurity program, including any incidents, and reviews and approves information technology or information security related projects and proposals. These team members are also responsible for the resolution of any findings and implementation of recommendations from internal and external audits and examinations.

Union's ISO is responsible for implementing and maintaining the cybersecurity program with support from Union's Information Security team. The Information Security team consists of Union's ISO, members of the risk and compliance department,

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security staff, and information technology members, all of whom collaboratively work together to manage cybersecurity risks. The ISO reports directly to Union's Senior Risk Officer.

*Cybersecurity Risk Management Program*

The program is designed to identify, assess, manage, mitigate, and respond to cyber threats with the goal of preventing cybersecurity incidents to the extent feasible, while also increasing our system resilience and ability to minimize business disruption in the event we experience a cyber incident. Our program is structured to be nimble and adaptable to changes in cybersecurity threats over time and to respond to emerging threats in a timely and efficient manner.

Our Information Security team, led by our ISO, is responsible for monitoring our information systems for vulnerabilities and mitigating any issues. The Information Security team works collaboratively across the Company to understand the potential impacts of a cybersecurity incident and prioritize mitigation and other measures based on, among other things, the materiality to our business. The Information Security team has established processes designed to monitor threats in the cybersecurity landscape which include interacting with intelligence networks, working with researchers, discussions with peers at other companies, monitoring social media, reviewing government alerts and other news items and attending industry specific security conferences and trainings. The team regularly monitors our internal network and customer-facing network to identify any security issues. In addition, the Company augments the team's monitoring via the engagement of external vendors who provide continuous threat monitoring services of the Company's environment.

As part of our assessment of the risks to our Company, the Information Security team conducts annual cybersecurity risk assessments to evaluate the inherent risk of our applications and the strength of our controls, and identify the residual risk for each application. In addition, we conduct regular reviews and testing of critical network and application systems to assess their security. We have adopted internal Company-wide Information Technology and Information Security policies which are reviewed and updated annually and approved by our Board of Directors. Our employees and the Board of Directors attend annual trainings that are designed to raise awareness about cybersecurity threats, reduce our vulnerability, and encourage consideration of cybersecurity threats across the Company.

We regularly review and update our investments in information technology security to identify and protect critical assets, provide monitoring and alerts, and, as needed, engage third-party experts. To assess the effectiveness of our program, we have engaged consultants to conduct penetration testing and other vulnerability assessments. Additionally, our Internal Audit department and external auditors conduct assessments of different systems to provide the Audit Committee with information on our risk management processes, including cybersecurity risk management. We also test our defenses internally and conduct regular cybersecurity simulations and tabletop exercises with members of senior management present. These tests and assessments provide useful insights into the strengths and weaknesses of our cybersecurity framework.

Our cybersecurity framework is designed to protect our customers, employees, investors, and our intellectual property. Before purchasing third-party technology or other solutions that could expose the Company's assets and electronic information, our Information Security team completes security reviews on the vendors. Contracts are also negotiated to ensure language is included to address cybersecurity risk limitation and remediation. We also conduct ongoing reviews of cybersecurity risks associated with our third-party service providers. As part of the Company's Vendor Management Program, periodic reviews are conducted for certain third-party vendors. Members of our Information Security team work with department managers and application owners to review System and Organization Controls ("SOC") 1 or SOC 2 reports. In the event a third-party vendor is required but unable to provide either a SOC 1 or SOC 2 report, this group conducts additional reviews to assess the cybersecurity preparedness of the specific vendor. This assessment of the risks associated with the use of third-party service providers is part of our overall vendor management and cybersecurity risk management framework.

To date, cybersecurity risks have not materially affected us. We do experience attacks on our data and systems that have been halted by the technical policies and cybersecurity systems in place. For more information about the cybersecurity risks we face, see "Risk Factors - Operational Risks" in Part I, Item 1A of this Annual Report.

**Item 2. Properties**

As of December 31, 2025, Union operated 13 community banking locations in Lamoille, Caledonia, Chittenden, Franklin and Washington counties of Vermont and five in Grafton and Coos counties of New Hampshire. Union also operates three loan centers in St. Johnsbury and Williston, Vermont and Plymouth, New Hampshire. In addition, Union owns a property located in Johnson, VT that was previously a branch location. This property was damaged due to flooding in 2024 and was not re-opened. Union owns, free of encumbrances, 16 of its branch locations and its headquarters and operates several ATMs in northern Vermont and New Hampshire. Union leases three branch locations, one loan production office, land upon which the Williston branch was built, and certain ATM premises from third parties under terms and conditions considered by management to be favorable to Union. Union also owns or leases certain properties contiguous to its branch locations for staff and customer parking convenience.

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Additional information relating to the Company's properties as of December 31, 2025, is set forth in Notes 8 and 9 to the Company's audited consolidated financial statements contained in Part II, Item 8 of this Annual Report.

**Item 3. Legal Proceedings**

There are no known pending legal proceedings to which the Company or its subsidiary is a party, or to which any of their properties is subject, other than ordinary litigation arising in the normal course of business activities. Although the amount of any ultimate liability with respect to such proceedings cannot be determined, in the opinion of management, any such liability would not have a material effect on the consolidated financial position or results of operations of the Company and its subsidiary.

**Item 4. Mine Safety Disclosures**

Not applicable.

**PART II**

**Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities**

**Trading Market for Common Stock**

The common stock of the Company is traded on the Nasdaq Global Market under the trading symbol "UNB."

On February 28, 2026, there were 4,614,047 shares of common stock outstanding held by 468 stockholders of record. The number of stockholders does not reflect the number of beneficial owners, including persons or entities who may hold the stock in nominee or "street name."

**Issuances of Unregistered Shares; Repurchases of Common Stock**

The Company did not issue any unregistered shares during the quarter ended December 31, 2025.

There were no repurchases of the Company's equity securities during the quarter ended December 31, 2025.

**Securities Authorized for Issuance Under Equity Compensation Plans**

Information regarding equity securities authorized for issuance under the Company's equity compensation plan is included in Part III, Item 12 of this Annual Report under the caption "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters", and is incorporated herein by reference.

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**Five Year Performance Graph**

The following graph illustrates the annual percentage change in the cumulative total shareholder return of the Company's common stock for the period December 31, 2019 through December 31, 2025. For purposes of comparison, the graph illustrates comparable shareholder returns of the S&P U.S. SmallCap Banks Index and the Nasdaq Composite Index. The graph assumes a $100 investment on December 31, 2019 in each case and measures the amount by which the market value, assuming reinvestment of dividends, has changed during the five year period ended December 31, 2025.

![1676](unb-20251231_g1.jpg)

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | ***Period Ended*** | ***Period Ended*** | ***Period Ended*** | ***Period Ended*** | ***Period Ended*** | ***Period Ended*** |
|<br>***Index*** | **12/31/2020** | **12/31/2021** | **12/31/2022** | **12/31/2023** | **12/31/2024** | **12/31/2025** |
| Union Bankshares, Inc. | 100.00 | 121.05 | 102.36 | 138.49 | 137.57 | 118.52 |
| Nasdaq Composite Index | 100.00 | 122.18 | 82.43 | 119.22 | 154.48 | 187.14 |
| S&P U.S. SmallCap Banks Index | 100.00 | 139.21 | 122.74 | 123.35 | 145.82 | 160.37 |

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The performance graph and related information furnished under Part II, Item 5 of this Annual Report on Form 10-K shall not be deemed to be "soliciting material" or "filed" with the SEC, nor subject to Exchange Act Regulations 14A or 14C, other than as provided in Item 201 of Regulation S-K, or to the liabilities of Section 18 of the Exchange Act. Such information shall not be deemed to be incorporated by reference into any filing under the Securities Act or Exchange Act except to the extent that the Company specifically incorporates it by reference into such filing.

**Item 6. [Reserved]**

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**Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations**

**GENERAL**

The following discussion and analysis focuses on those factors that, in management's view, had a material effect on the consolidated financial position of Union Bankshares, Inc. ("the Company," "our," "we," "us") and its subsidiary, Union Bank ("Union"), as of December 31, 2025 and 2024, and its consolidated results of operations for the years then ended. The Company is considered a "smaller reporting company" under the disclosure rules of the SEC. Accordingly, the Company has elected to provide its audited statements of income, comprehensive income, cash flows, and changes in stockholders' equity for a two year, rather than a three year, period and intends to provide smaller reporting company scaled disclosures where management deems appropriate.

This discussion is being presented to provide a narrative explanation of the consolidated financial statements and should be read in conjunction with the audited consolidated financial statements and related notes and with other financial data contained in Item 8, Part II of this Annual Report. The purpose of this presentation is to enhance overall financial disclosures and to provide information about historical financial performance and developing trends as a means to assess to what extent past performance can be used to evaluate the prospects for future performance. Management is not aware of the occurrence of any events after December 31, 2025 which would materially affect the information presented.

**CERTAIN DEFINITIONS**

Capitalized terms used in the following discussion and not otherwise defined below have the meanings assigned to them in Note 1 to the Company's audited consolidated financial statements contained in Part II, item 8, page 55 of this Annual Report.

**NON-GAAP FINANCIAL MEASURES**

Under SEC Regulation G, public companies making disclosures containing financial measures that are not in accordance with GAAP must also disclose, along with each non-GAAP financial measure, certain additional information, including a reconciliation of the non-GAAP financial measure to the closest comparable GAAP financial measure, as well as a statement of the company's reasons for utilizing the non-GAAP financial measure.

The SEC has exempted from the definition of non-GAAP financial measures certain commonly used financial measures that are not based on GAAP. However, two non-GAAP financial measures commonly used by financial institutions, namely tax-equivalent net interest income and tax-equivalent net interest margin (as presented in the tables in the section labeled Yields Earned and Rates Paid), have not been specifically exempted by the SEC, and may therefore constitute non-GAAP financial measures under Regulation G. We are unable to state with certainty whether the SEC would regard those measures as subject to Regulation G. Management believes that these non-GAAP financial measures are useful in evaluating the Company's financial performance and facilitate comparisons with the performance of other financial institutions. However, that information should be considered supplemental in nature and not as a substitute for related financial information prepared in accordance with GAAP.

**CRITICAL ACCOUNTING POLICIES**

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

***Allowance for credit losses on loans and on off-balance sheet credit exposures***

ASU No. 2016-13, *Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments*, which is more commonly referred to as Current Expected Credit Losses (CECL), requires that expected credit losses for

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financial assets held at the reporting date that are accounted for at amortized cost be measured and recognized based on historical experience and current and reasonably supportable forecasted conditions to reflect the full amount of expected credit losses over the expected life of the asset. CECL also applies to certain off-balance sheet credit exposures, such as loan commitments, standby letters of credit, financial guarantees and other similar investments. The Company believes the allowance for credit losses (ACL) on loans and off-balance sheet credit exposures is a critical accounting policy that requires the most significant judgments and estimates used in the preparation of its consolidated financial statements. CECL may create volatility in the level of the ACL from quarter to quarter as the ACL is dependent upon macroeconomic forecasts and conditions, loan portfolio volumes and credit quality, among other things.

***Allowance for credit losses on AFS debt securities***

CECL also impacts the accounting for AFS debt securities. AFS debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. The Company believes the ACL on AFS debt securities is a critical accounting policy due to the level of judgment involved to determine if credit-related impairment exists. If the impairment analysis indicates that a credit loss exists, management compares the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an ACL is recorded, limited to the amount by which the amortized cost basis of the security exceeds its fair value.

***Mortgage servicing rights***

MSRs associated with loans originated and sold, where servicing is retained, are required to be capitalized and initially recorded at fair value on the acquisition date and are subsequently accounted for using the "amortization method". Mortgage servicing rights are amortized against non-interest income in proportion to, and over the period of, estimated future net servicing income of the underlying financial assets. The value of capitalized servicing rights represents the estimated present value of the future servicing fees arising from the right to service loans for third parties. The carrying value of the mortgage servicing rights is periodically reviewed for impairment based on a determination of estimated fair value compared to amortized cost, and impairment, if any, is recognized through a valuation allowance and is recorded as a reduction of non-interest income. Subsequent improvement (if any) in the estimated fair value of impaired mortgage servicing rights is reflected in a positive valuation adjustment and is recognized in non-interest income up to (but not in excess of) the amount of the prior impairment. Critical accounting policies for mortgage servicing rights relate to the initial valuation and subsequent impairment tests. The methodology used to determine the valuation of mortgage servicing rights requires the development and use of a number of estimates, including anticipated principal amortization and prepayments. Factors that may significantly affect the estimates used are changes in interest rates and the payment performance of the underlying loans. The Company analyzes and accounts for the value of its servicing rights with the assistance of a third party consultant.

***Intangible assets***

The Company's intangible assets include goodwill, which represents the excess of the purchase price over the fair value of net assets acquired in the 2011 Branch Acquisition. In accordance with current authoritative guidance, the Company assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of the Company is less than its carrying amount, which could result in goodwill impairment.

***Other***

The Company also has other key accounting policies, which involve the use of estimates, judgments and assumptions, that are significant to understanding the Company's financial condition and results of operations, including investment securities. The most significant accounting policies followed by the Company are presented in Note 1 of the consolidated financial statements and in the section below under the caption "FINANCIAL CONDITION" and the subcaptions "Asset Quality", "Allowance for Credit Losses" and "Investment Activities." Although management believes that its estimates, assumptions and judgments are reasonable, they are based upon information available when such estimates, assumptions and judgments are made and can be impacted by future events and events outside the control of the Company. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.

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**OVERVIEW**

Despite a persistently challenging operating environment in 2025, characterized by elevated interest rates for much of the year, funding cost pressures, and ongoing economic and geopolitical uncertainty, the Company delivered solid financial performance and continued to strengthen its balance sheet. While the Federal Reserve implemented a series of interest rate reductions during the second half of the year, rates remained relatively high overall, requiring continued discipline in balance sheet management and pricing strategies. Through prudent execution and a sustained focus on core relationship banking, the Company achieved meaningful growth in net income, expanded net interest margin, and improved key profitability and capital metrics year over year. These results underscore the resilience of the Company's business model and its ability to adapt effectively to evolving monetary policy and market conditions while maintaining strong capital and liquidity positions.

Net interest income, the largest component of net income, saw an increase due to higher interest earned on average earning assets and an increase in average loan volume. Interest expense increased, primarily driven by increased utilization of wholesale funding and an overall increase in rates on customer deposits. The net interest spread and net interest margin both improved, reflecting the overall positive impact of these changes, despite higher funding costs.

The net interest margin was 2.93% for the year ended December 31, 2025 compared to 2.77% for the year ended December 31, 2024, while the net interest spread for the same periods were 2.47% and 2.30%, respectively. We continue to manage the net interest margin and spread by remaining disciplined on loan and deposit pricing, utilizing FHLB advances and brokered CDs when appropriate to reduce our exposure to high short-term interest rates, and maximizing our balance sheet collateral (i.e. loans and investment securities) to obtain wholesale funding in a cost effective way to fund loan growth.

Consolidated net income was $11.1 million, with basic earnings per share of $2.43 for 2025 compared to consolidated net income of $8.8 million, and basic earnings per share of $1.94 for 2024, while diluted earnings per share for the same periods were $2.41 and $1.92, respectively. The increase in net income was due to the combined effects of the $1.3 million pre-tax realized loss on the sale of AFS debt securities during 2024 that did not recur in 2025, increases in net interest income of $4.7 million and noninterest income of $446 thousand, and a decrease of $156 thousand in credit loss expense, partially offset by increases in noninterest expenses of $3.7 million and the provision for income taxes of $559 thousand.

Sales of qualifying residential loans to the secondary market for the year ended December 31, 2025 were $143.5 million, resulting in gain on sales of $2.1 million, compared to sales of $113.5 million and gain on sales of $1.7 million for the year ended December 31, 2024.

As of December 31, 2025, the Company had total consolidated assets of $1.62 billion, an increase of 5.8% compared to total consolidated assets of $1.53 billion at December 31, 2024. Total investments increased $76.0 million, or 30.1%, to $328.3 million, or 20.3% of total assets at December 31, 2025 compared to $252.3 million, or 16.5% of total assets, as of December 31, 2024. Net loans and loans held for sale increased $17.1 million or 1.5%, to $1.17 billion, or 72.5% of total assets, at December 31, 2025, compared to $1.16 billion, or 75.6% of total assets, at December 31, 2024. The level of federal funds sold decreased $3.0 million, or 28.4%, to $7.6 million at December 31, 2025 compared to $10.7 million at December 31, 2024.

Total deposits were $1.21 billion at December 31, 2025 compared to $1.17 billion at December 31, 2024, an increase of $46.1 million, or 3.9%. There were $10.0 million of retail brokered deposits and $248 thousand of purchased CDARS deposits at December 31, 2025 and no retail brokered deposits or purchased CDARS deposits at December 31, 2024. Borrowed funds were $286.5 million at December 31, 2025 compared to $259.7 million at December 31, 2024.

The Company's total capital increased from $66.5 million at December 31, 2024 to $80.9 million at December 31, 2025. This increase primarily reflects net income of $11.1 million for 2025 and a decrease of $8.1 million in accumulated other comprehensive loss, partially offset by regular cash dividends paid of $6.6 million. (See *Capital Resources* on pages 46 to 47.) These changes also resulted in an increase in the Company's book value per share to $17.53 at December 31, 2025 from $14.65 as of December 31, 2024.

The current macroeconomic and geopolitical environment is subject to a number of uncertainties, including geopolitical conflicts, tariffs or changes in trade policies, the impact of federal government shutdowns, capital markets volatility, and inflation. These and other factors may contribute to slower or negative economic growth and a challenging business environment for our customers. While we remain confident in the resilience and strength of our business and financial model, the current macroeconomic and geopolitical environment could negatively impact our financial condition and results of operations. For more information about risks the Company faces, please see "Part I, Item 1A. Risk Factors".

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The following per share information and key ratios presented in the table below depict several measurements of performance or financial condition at or for the years ended December 31, 2025 and 2024:

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| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| Return on average assets | 0.71% | 0.60% |
| Return on average equity | 15.29% | 13.38% |
| Net interest margin (1) | 2.93% | 2.77% |
| Efficiency ratio (2) | 75.14% | 77.62% |
| Net interest spread (3) | 2.47% | 2.30% |
| Loan to deposit ratio | 97.03% | 99.32% |
| Net charge-offs (recoveries) to total average loans | —% | —% |
| ACL on loans to loans not held for sale | 0.72% | 0.66% |
| Nonperforming assets to total assets (4) | 0.85% | 0.12% |
| Equity to assets | 5.00% | 4.35% |
| Total capital to risk weighted assets (5) | 12.80% | 12.53% |
| Book value per share | $17.53 | $14.65 |
| Basic earnings per share | $2.43 | $1.94 |
| Diluted earnings per share | $2.41 | $1.92 |
| Dividends paid per share | $1.44 | $1.44 |
| Dividend payout ratio (6) | 59.26% | 74.23% |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(1)The ratio of tax equivalent net interest income to average earning assets. See page 33 for more information.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(2)The ratio of noninterest expenses to tax equivalent net interest income and noninterest income, excluding securities gains (losses).*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(3)The difference between the average yield on earning assets and the average rate paid on interest bearing liabilities. See page 33 for more information.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(4)Nonperforming assets are loans or investment securities that are in nonaccrual or 90 or more days past due as well as OREO or OAO.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(5)The ratio of total capital to risk weighted assets is a regulatory capital measurement. See Note 23 to the Company's consolidated financial statements for more information.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(6)Cash dividends declared and paid per share divided by consolidated net income per share.*

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**RESULTS OF OPERATIONS**

For the year ended December 31, 2025, net income was $11.1 million compared to $8.8 million for the year ended December 31, 2024. The primary components of these results, which include net interest income, credit loss expense, noninterest income, noninterest expenses, and provision for income taxes, are discussed below:

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

Interest earned, on a fully tax equivalent basis, on average earning assets for the year ended December 31, 2025 was $76.8 million compared to $68.9 million for the year ended December 31, 2024, an increase of $7.9 million, or 11.5%. The average earning asset base increased $87.3 million between periods and the average yield on average earning assets increased 24 bps to 5.09% for the year ended December 31, 2025 compared to 4.85% for the year ended December 31, 2024.

The average yield on federal funds sold and overnight deposits decreased 103 bps between the twelve month comparison periods due to a decrease in the average balance maintained in Union's master account at the FRB and the average rate paid on these balances.

Interest income, on a fully tax equivalent basis, on investment securities increased $985 thousand between the comparison periods due to an increase of $2.0 million in the average balance of the portfolio and an increase of 32 bps in the average yield. The improvement in the average yield and interest income was attributable in part to the balance sheet repositioning completed in the third quarter of 2024, in which the Company sold lower-yielding AFS debt securities at a loss and used the proceeds to purchase higher yielding AFS debt securities and fund loans, as well as the strategic decision to position the investment portfolio for improved future cash flows and earnings with the purchase of approximately $75.0 million of investment securities AFS during the fourth quarter of 2025.

Interest income, on a fully tax equivalent basis, on loans increased $7.2 million between the twelve month comparison periods due to an increase in the average volume of loans outstanding of $90.4 million and an increase of 19 bps in the average yield. Interest income on loans increased $563 thousand and $445 thousand during the year ended December 31, 2025 and 2024, respectively, due to recoveries of interest from the payoff of loans that had previously been in nonaccrual. This resulted in a 5 bps increase in the average loan yield for the years ended December 31, 2025 and 2024.

Average interest bearing liabilities increased $89.8 million between the twelve month comparison periods due to increases in average borrowed funds of $65.5 million and average interest bearing deposits of $24.2 million. The average rate paid on interest bearing liabilities increased 7 bps to 2.62% for the year ended December 31, 2025 compared to 2.55% for the year ended December 31, 2024 due to continued customer expectation of higher rates on deposit accounts along with utilization of wholesale funding at rates higher than deposit rates. Interest expense increased $3.2 million, to $32.8 million for the year ended December 31, 2025 compared to $29.6 million for the year ended December 31, 2024.

The net interest spread increased 17 bps to 2.47% for the year ended December 31, 2025, from 2.30% for the same period last year, reflecting the net effect of the 24 bps increase in the average yield earned on interest earning assets, partially offset by the 7 bps increase in the average rate paid on interest bearing liabilities between periods. The net interest margin increased 16 bps for the year ended December 31, 2025 compared to the year ended December 31, 2024 as a result of the changes discussed above.

Net interest income, on a fully tax equivalent basis, increased $4.8 million to $44.0 million for the year ended December 31, 2025 compared to $39.3 million for the year ended December 31, 2024.

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

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** |
| | **Average<br>Balance (1)** | **Interest<br>Earned/<br>Paid** | **Average<br>Yield/<br>Rate** | **Average<br>Balance (1)** | **Interest<br>Earned/<br>Paid** | **Average<br>Yield/<br>Rate** |
| | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Average Assets: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Federal funds sold and overnight deposits | $23095 | $740 | 3.16% | $26576 | $1132 | 4.19% |
| &nbsp;&nbsp;&nbsp;Interest bearing deposits in banks | 8108 | 342 | 4.22% | 13242 | 480 | 3.63% |
| &nbsp;&nbsp;&nbsp;Investment securities (2), (3) | 296683 | 7674 | 2.59% | 294669 | 6689 | 2.27% |
| &nbsp;&nbsp;&nbsp;Loans, net (2), (4) | 1167901 | 67215 | 5.76% | 1077543 | 60018 | 5.57% |
| &nbsp;&nbsp;&nbsp;Nonmarketable equity securities | 11733 | 831 | 7.09% | 8207 | 541 | 6.58% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest earning assets (2) | 1507520 | 76802 | 5.09% | 1420237 | 68860 | 4.85% |
| &nbsp;&nbsp;&nbsp;Cash and due from banks | 4769 |  |  | 4560 |  |  |
| &nbsp;&nbsp;&nbsp;Premises and equipment | 20115 |  |  | 20657 |  |  |
| &nbsp;&nbsp;&nbsp;Other assets | 26084 |  |  | 19972 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $1558488 |  |  | $1465426 |  |  |
| Average Liabilities and Stockholders' Equity: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest bearing checking accounts | $305321 | $4259 | 1.39% | $295088 | $3605 | 1.22% |
| &nbsp;&nbsp;&nbsp;Savings/money market accounts | 371935 | 5821 | 1.57% | 367620 | 5418 | 1.47% |
| &nbsp;&nbsp;&nbsp;Time deposits | 288878 | 11332 | 3.92% | 279180 | 11551 | 4.14% |
| &nbsp;&nbsp;&nbsp;Borrowed funds and other liabilities | 264263 | 10786 | 4.03% | 198745 | 8446 | 4.18% |
| &nbsp;&nbsp;&nbsp;Subordinated notes | 16289 | 570 | 3.50% | 16255 | 570 | 3.51% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest bearing liabilities | 1246686 | 32768 | 2.62% | 1156888 | 29590 | 2.55% |
| &nbsp;&nbsp;&nbsp;Noninterest bearing deposits | 220993 |  |  | 226388 |  |  |
| &nbsp;&nbsp;&nbsp;Other liabilities | 18352 |  |  | 16688 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 1486031 |  |  | 1399964 |  |  |
| &nbsp;&nbsp;&nbsp;Stockholders' equity | 72457 |  |  | 65462 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $1558488 |  |  | $1465426 |  |  |
| Net interest income |  | $44034 |  |  | $39270 |  |
| Net interest spread (2) (5) |  |  | 2.47% |  |  | 2.30% |
| Net interest margin (2) (6) |  |  | 2.93% |  |  | 2.77% |

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____________________

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(1)Average balances are calculated based on a daily averaging method.*

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

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

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

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

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

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Tax exempt interest income amounted to $6.7 million and $5.8 million for the years ended December 31, 2025 and 2024, respectively. The following table presents the effect of tax exempt income on the calculation of net interest income, using a marginal federal corporate income tax rate of 21% for the years ended December 31, 2025 and 2024:

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| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Net interest income as presented | $43020 | $38364 |
| Effect of tax-exempt interest |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment securities | 139 | 201 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans | 875 | 705 |
| Net interest income, tax equivalent | $44034 | $39270 |

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in volume (change in volume multiplied by prior rate);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in rate (change in rate multiplied by prior volume); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• total change in rate and volume.

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

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2025<br>Compared to Year Ended<br>December 31, 2024<br>Increase/(Decrease) Due to Change In** | **Year Ended December 31, 2025<br>Compared to Year Ended<br>December 31, 2024<br>Increase/(Decrease) Due to Change In** | **Year Ended December 31, 2025<br>Compared to Year Ended<br>December 31, 2024<br>Increase/(Decrease) Due to Change In** | **Year Ended December 31, 2024<br>Compared to Year Ended<br>December 31, 2023<br>Increase/(Decrease) Due to Change In** | **Year Ended December 31, 2024<br>Compared to Year Ended<br>December 31, 2023<br>Increase/(Decrease) Due to Change In** | **Year Ended December 31, 2024<br>Compared to Year Ended<br>December 31, 2023<br>Increase/(Decrease) Due to Change In** |
| | **Volume** | **Rate** | **Net** | **Volume** | **Rate** | **Net** |
| Interest earning assets: | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| &nbsp;&nbsp;&nbsp;&nbsp;Federal funds sold and overnight deposits | $(136) | $(256) | $(392) | $339 | $163 | $502 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest bearing deposits in banks | (208) | 70 | (138) | (65) | 144 | 79 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment securities | 40 | 945 | 985 | (303) | 258 | (45) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans, net | 5154 | 2043 | 7197 | 4255 | 5775 | 10030 |
| &nbsp;&nbsp;&nbsp;&nbsp;Nonmarketable equity securities | 246 | 44 | 290 | 291 | (13) | 278 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest earning assets | $5096 | $2846 | $7942 | $4517 | $6327 | $10844 |
| Interest bearing liabilities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest bearing checking accounts | $129 | $525 | $654 | $(267) | $602 | $335 |
| &nbsp;&nbsp;&nbsp;&nbsp;Savings/money market accounts | 64 | 339 | 403 | (320) | 1767 | 1447 |
| &nbsp;&nbsp;&nbsp;&nbsp;Time deposits | 393 | (612) | (219) | 895 | 2004 | 2899 |
| &nbsp;&nbsp;&nbsp;&nbsp;Borrowed funds | 2651 | (311) | 2340 | 5282 | 360 | 5642 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest bearing liabilities | $3237 | $(59) | $3178 | $5590 | $4733 | $10323 |
| Net change in net interest income | $1859 | $2905 | $4764 | $(1073) | $1594 | $521 |

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**Credit Loss Expense.** Credit loss expense or benefit is made up of credit loss expense on loans and credit loss expense on off-balance sheet credit exposures. Credit loss expense on loans results from net charge-offs, changes to the projected loss drivers, prepayment speeds, curtailments and time to recovery that the Company forecasted over the reasonable and supportable forecast periods and changes in the volume and mix of the loan portfolio. Credit loss expense on off-balance sheet credit exposures results from changes in outstanding commitments and changes in funding rates and assumed loss rates period over period. For further details, see FINANCIAL CONDITION - *Allowance for Credit Losses on Loans* and *Commitments, Contingent Liabilities, and Off-Balance-Sheet Arrangements* below.

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

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| | | |
|:---|:---|:---|
| | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Credit loss expense for loans | $755 | $1092 |
| Credit loss expense (benefit) for off-balance sheet credit exposures | 19 | (162) |
| &nbsp;&nbsp;Credit loss expense, net | $774 | $930 |

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***Noninterest Income.*** The following table sets forth the components of noninterest income for the years ended December 31, 2025 and 2024 :

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
| | **2025** | **2024** | **$ Variance** | **% Variance** |
| | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Wealth management income | $1187 | $1067 | $120 | 11.2 |
| Service fees | 6939 | 7040 | (101) | (1.4) |
| Net gains on sales of loans held for sale | 2148 | 1697 | 451 | 26.6 |
| Income from Company-owned life insurance | 696 | 716 | (20) | (2.8) |
| Income from MSRs, net | 128 |  | 128 | 100.0 |
| Other income | 161 | 280 | (119) | (42.5) |
| Net gains on other investments | 203 | 216 | (13) | (6.0) |
| Net losses on sales of investment securities AFS |  | (1293) | 1293 | (100.0) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest income | $11462 | $9723 | $1739 | 17.9 |

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The significant changes in noninterest income for the year ended December 31, 2025 compared to the year ended December 31, 2024 are described below:

***•*** <u>Wealth management income.</u> Wealth management income increased as managed fiduciary accounts grew between December 31, 2024 and 2025, as did the value of assets within those accounts.

• <u>Service fees.</u> Service fee income decreased $101 thousand for the year ended December 31, 2025 compared to the same period in 2024, primarily due to decreases in ATM and debit card network fees, merchant program fees, overdraft fees, and other loan related fees, partially offset by an increase in loan servicing fees.

• <u>Net gains on sales of loans held for sale.</u> Residential loans totaling $143.5 million were sold to the secondary market during 2025, compared to residential loan sales of $113.5 million during 2024. The increase of $451 thousand in net gains on sales of loans reflects the higher sales volume and higher premiums obtained on sales in 2025.

***•*** <u>Income from Company-owned life insurance.</u> Death benefit proceeds of $197 thousand were received in 2025 compared to death benefit proceeds of $235 thousand received in 2024.

• <u>Income of MSRs, net</u>. Income from MSRs is derived from servicing rights acquired through the sale of loans on which servicing is retained. Capitalized servicing rights are initially recorded at fair value and amortized in proportion to, and over the period of, the estimated future servicing period of the underlying loans. The increase in the volume of residential loan sales discussed above resulted in new capitalized MSRs that exceeded the amortization of MSRs by $128 thousand for the year ended December 31, 2025. The amortization of MSRs exceeded the new capitalized MSRs for the 2024 comparison period and the amortization is included in Other expenses in the consolidated statements of income.

***•*** <u>Other income.</u> The Company received $25 thousand of prepayment penalties from the early payoff of loans during 2025 compared to $117 thousand of prepayment penalties received during 2024.

• <u>Net gains on other investments.</u> Participants in the 2020 Amended and Restated Nonqualified Excess Plan (the "2020 Deferred Compensation Plan") elect to defer receipt of current compensation from the Company or its subsidiary and select designated reference investments consisting of investment funds. The performance of those funds, over which the Company has no control, resulted in net gains of $203 thousand and $216 thousand for the years ended December 31, 2025 and 2024, respectively.

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• <u>Net losses on sales of investment securities AFS.</u> During the third quarter of 2024, the Company completed a balance sheet repositioning related to its investment securities portfolio in which the sale of lower-yielding AFS debt securities resulted in a pre-tax realized loss on the sale of $1.3 million.

***Noninterest Expenses.*** The following table sets forth the components of noninterest expenses for the years ended December 31, 2025 and 2024:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
| | **2025** | **2024** | **$ Variance** | **% Variance** |
| | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Salaries and wages | $17452 | $15678 | $1774 | 11.3 |
| Employee benefits | 6479 | 5716 | 763 | 13.3 |
| Occupancy expense, net | 2335 | 2194 | 141 | 6.4 |
| Equipment expense | 4381 | 3992 | 389 | 9.7 |
| FDIC insurance assessment | 1477 | 1167 | 310 | 26.6 |
| Donations | 211 | 344 | (133) | (38.7) |
| Electronic banking expense | 640 | 504 | 136 | 27.0 |
| Communications | 287 | 343 | (56) | (16.3) |
| Wealth management expenses | 544 | 491 | 53 | 10.8 |
| Professional fees | 1147 | 1062 | 85 | 8.0 |
| Advertising and public relations | 860 | 704 | 156 | 22.2 |
| Other expenses | 5887 | 5832 | 55 | 0.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest expense | $41700 | $38027 | $3673 | 9.7 |

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The significant changes in noninterest expenses for the year ended December 31, 2025 compared to the year ended December 31, 2024 are described below:

**•** <u>Salaries and wages.</u> Salaries and wages increased $1.8 million primarily due to annual salary adjustments and new positions for the 2025 fiscal year, a $408 thousand increase in the accrual amount for the annual incentive plan payments to select officers of Union for 2025 compared to 2024, and a change in the paid time off (PTO) policy during 2025 resulting in an increase of $392 thousand from an accrual adjustment for the carryover of unused PTO outstanding as of December 31, 2025. Salaries and wages are reduced by deferred loan origination costs at the time of origination. Deferred loan origination costs reduced salaries and wages by $13 thousand and $257 thousand for the years ended December 31, 2025 and 2024, respectively. The lower deferred loan origination cost for 2025 compared to 2024 is primarily attributable to loan origination levels. These increases were partially offset by a $397 thousand decrease related to a cash bonus payment to employees in December 2024 in lieu of a 401k profit sharing contribution that was included in employee benefits expense in 2025.

**•** <u>Employee benefits.</u> Employee benefit expense increased $763 thousand due to increases of $598 thousand in 401k plan contribution expense, $119 thousand in payroll tax expense and $81 thousand in premium expense for the Company's medical and dental plans. The increase in the 401k plan contribution expense resulted primarily from there being no profit sharing contribution in 2024 as discussed above compared to a $466 thousand profit sharing accrual in 2025.

• <u>Occupancy expense, net.</u> The increase in occupancy expense of $141 thousand is primarily due to utilities, repairs and maintenance, and depreciation expenses related to projects completed during 2025 compared to 2024. In addition, real estate tax expense increased $24 thousand between years due to rate increases in the towns with branch locations

**•** <u>Equipment expense.</u> Equipment expense increased between years primarily due to an increase in software license and maintenance costs.

• <u>FDIC insurance assessment.</u> The FDIC insurance assessment increased by $310 thousand due to an increase in the assessment rate as well as overall growth in net average assets.

• <u>Donations</u>. Charitable donations are made as part of the Company's on-going commitment to enhancing the economic vitality and social welfare of our communities. Donations decreased between years primarily due to contributions made in 2024 related to a state tax credit program to assist a local affordable housing project and local non-profit rehabilitation projects that did not recur in 2025.

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**•** <u>Electronic banking expense.</u> Electronic banking expense increased $136 thousand primarily due to software initiatives that were implemented to the online banking platform in the fourth quarter of 2024.

**•** <u>Communications.</u> The decrease in communications expense relates primarily to contract changes taking effect during 2025 related to network and ATM communication systems.

• <u>Wealth management expenses.</u> The $53 thousand increase was primarily attributable to the growth in managed fiduciary accounts and the associated data processing and professional services.

**•** <u>Professional fees.</u> Professional fees increased $85 thousand due to increases in engagement fees and additional consultants that were engaged to assist with employment searches and other consulting services in 2025.

• <u>Advertising and public relations.</u> Advertising and public relations costs increased $156 thousand primarily related to a focus on advertising campaigns and business development activities in 2025 and the increased costs of these campaigns and activities compared to 2024.

***Provision for Income Taxes.*** The Company has provided for current and deferred federal income taxes for the current and prior period presented. The Company's net provision for income taxes was $928 thousand and $369 thousand for 2025 and 2024, respectively, reflecting higher net income, the impact of tax-exempt income, as well as the impact of limited partnership investments and related tax credits, discussed below. The Company's effective federal corporate income tax rate was 7.0% and 4.6% for 2025 and 2024, respectively.

Amortization expense related to limited partnership investments included as a component of income tax expense amounted to $1.8 million and $1.7 million for the years ended December 31, 2025 and 2024, respectively. These investments provide tax benefits, including tax credits. Low income housing tax credits with respect to limited partnership investments are also included as a component of income tax expense and amounted to $1.9 million and $1.8 million for the years ended December 31, 2025 and 2024, respectively. See Note 10 to the Company's consolidated financial statements.

**FINANCIAL CONDITION**

At December 31, 2025, the Company had total consolidated assets of $1.62 billion, including gross loans and loans held for sale (total loans) of $1.18 billion, investment securities AFS of $326.3 million, deposits of $1.21 billion, borrowed funds of $286.5 million, subordinated notes of $16.3 million and stockholders' equity of $80.9 million. The Company's total assets increased $88.8 million, or 5.8%, from $1.53 billion at December 31, 2024.

Net loans and loans held for sale increased $17.1 million, or 1.5%, to $1.17 billion, or 72.5% of total assets, at December 31, 2025, compared to $1.16 billion, or 75.6% of total assets, at December 31, 2024. (See *Loan Portfolio* below.)

Total deposits increased $46.1 million, or 3.9% to $1.21 billion at December 31, 2025, from $1.17 billion at December 31, 2024. There were increases in noninterest bearing deposits of $891 thousand, or 0.4%, interest bearing deposits of $11.1 million, or 1.6%, and in time deposits of $34.1 million, or 14.9% .

Borrowed funds consisted of FHLB advances of $286.5 million and $259.7 million at December 31, 2025 and 2024, respectively. (See *Borrowings* on page 44.)

Total stockholders' equity increased $14.4 million, or 21.6%, from $66.5 million at December 31, 2024 to $80.9 million at December 31, 2025. (See *Capital Resources* on pages 46 to 47.)

***Loans Held for Sale and Loan Portfolio***. Total loans (including loans held for sale) increased $18.0 million, or 1.5%, to $1.18 billion, representing 72.9% of assets at December 31, 2025, from $1.16 billion, representing 76.0% of assets at December 31, 2024. The Company's loans consist primarily of adjustable-rate and fixed-rate mortgage loans secured by one-to-four family, multi-family residential or commercial real estate. Real estate secured loans represented $1.03 billion, or 87.2% of total loans, at December 31, 2025 compared to $1.01 billion, or 87.3% of total loans, at December 31, 2024. The net change in the Company's loan portfolio from December 31, 2024 (see table below) resulted primarily from an increase in the volume of revolving residential, commercial real estate and municipal loans. There was no material change in the Company's lending programs or terms during 2025.

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

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| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** |
| **Loan Class** | **Amount** | **Percent** | **Amount** | **Percent** |
| Residential real estate | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| &nbsp;&nbsp;Non-revolving residential real estate | $445199 | 37.8 | $445425 | 38.4 |
| &nbsp;&nbsp;Revolving residential real estate | 29075 | 2.5 | 21884 | 1.9 |
| Construction real estate |  |  |  |  |
| &nbsp;&nbsp;Commercial construction real estate | 51347 | 4.4 | 54985 | 4.7 |
| &nbsp;&nbsp;Residential construction real estate | 52478 | 4.5 | 51202 | 4.4 |
| Commercial real estate |  |  |  |  |
| &nbsp;&nbsp;Non-residential commercial real estate | 345900 | 29.3 | 330010 | 28.4 |
| &nbsp;&nbsp;Multi-family residential real estate | 99269 | 8.4 | 104328 | 9.0 |
| Commercial | 31159 | 2.6 | 35175 | 3.0 |
| Consumer | 2414 | 0.1 | 2523 | 0.3 |
| Municipal | 117893 | 10.0 | 110204 | 9.5 |
| Loans held for sale | 4172 | 0.4 | 5204 | 0.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total loans | 1178906 | 100.0 | 1160940 | 100.0 |
| ACL on loans | (8407) |  | (7680) |  |
| Unamortized net loan costs | 2066 |  | 2162 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loans and loans held for sale | $1172565 |  | $1155422 |  |

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The Company originates and sells qualified residential mortgage loans in various secondary market avenues, with a majority of sales made to the FHLMC/Freddie Mac, generally with servicing rights retained. At December 31, 2025, the Company serviced a $1.21 billion residential real estate mortgage portfolio, of which $4.2 million was held for sale and approximately $734.8 million was serviced for unaffiliated third parties. This compares to a residential real estate mortgage servicing portfolio of $1.16 billion at December 31, 2024, of which $5.2 million was held for sale and approximately $684.8 million was serviced for unaffiliated third parties. Loans held for sale are accounted for at the lower of cost or fair value and are reviewed by management at least quarterly based on current market pricing.

The Company sold $143.5 million of qualified residential real estate loans originated during 2025 to the secondary market compared to sales of $113.5 million during 2024. Residential mortgage loan origination activity was strong throughout 2025. Despite low housing inventory and higher interest rates, purchase activity in the Company's markets is stable, with continued construction loan activity. The Company originates and sells FHA, VA, and RD residential mortgage loans, and also has an Unconditional Direct Endorsement Approval from HUD which allows the Company to approve FHA loans originated in any of its Vermont or New Hampshire locations without needing prior HUD underwriting approval. The Company sells FHA, VA and RD loans as originated with servicing released. Some of the government backed loans qualify for zero down payments without geographic or income restrictions. These loan products increase the Company's ability to serve the borrowing needs of residents in the communities served, including low and moderate income borrowers, while the loan sales and government guaranty mitigates the Company's exposure to credit risk.

The Company also originates commercial real estate and commercial loans under various SBA, USDA and State sponsored programs which provide a government agency guaranty for a portion of the loan amount. There was $1.7 million and $2.0 million guaranteed under these various programs at December 31, 2025 and 2024, respectively, on aggregate balances of $2.2 million and $2.6 million in subject loans as of such dates, respectively. The Company occasionally sells the guaranteed portion of a loan to other financial concerns and retains servicing rights, which generates fee income. There were no commercial real estate or commercial loans sold during 2025 or 2024. The Company recognizes gains and losses on the sale of the principal portion of these loans at the time of sale.

The Company serviced $38.1 million and $37.3 million of commercial and commercial real estate loans for unaffiliated third parties as of December 31, 2025 and 2024, respectively. This includes $33.6 million and $36.3 million of commercial or commercial real estate loans the Company had participated out to other financial institutions at December 31, 2025 and 2024, respectively. These loans were participated in the ordinary course of business on a nonrecourse basis, for liquidity or credit concentration management purposes.

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As of December 31, 2025, total loans serviced had grown to $1.95 billion, which includes total loans on the balance sheet of $1.18 billion as well as total loans sold with servicing retained of $773.0 million, compared to total loans serviced of $1.88 billion as of December 31, 2024.

The Company capitalizes MSRs for all loans sold with servicing retained. The unamortized balance of MSRs on loans sold with servicing retained was $1.8 million and $1.7 million at December 31, 2025 and 2024, respectively, with an estimated market value in excess of the carrying value at both year ends. Management periodically evaluates and measures the servicing assets for impairment.

Qualifying residential first lien mortgage loans and certain commercial real estate loans with a carrying value of $492.9 million and $394.5 million were pledged as collateral for borrowings from the FHLB under a blanket lien at December 31, 2025 and 2024, respectively.

The following table breaks down by classification the contractual maturities of the gross loans held in portfolio and for sale as of December 31, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Within 1 Year** | **2-5 Years** | **6-15 Years** | **Over 15 Years** | **Total** |
| Fixed rate | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential real estate |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-revolving residential real estate | $11 | $1588 | $67682 | $298722 | $368003 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revolving residential real estate | 8 |  |  |  | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Construction real estate |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial construction real estate |  | 282 | 7342 |  | 7624 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential construction real estate | 46249 | 3657 |  |  | 49906 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial real estate |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-residential commercial real estate | 24 | 3241 | 19835 |  | 23100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Multi-family residential real estate |  | 32 | 15735 |  | 15767 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial | 234 | 7714 | 11716 |  | 19664 |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer | 1881 | 519 |  |  | 2400 |
| &nbsp;&nbsp;&nbsp;&nbsp;Municipal | 92015 | 7773 | 16805 |  | 116593 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total fixed rate | 140422 | 24806 | 139115 | 298722 | 603065 |
| Variable rate |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential real estate |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-revolving residential real estate | 1981 | 851 | 46481 | 32055 | 81368 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revolving residential real estate | 1 | 58 | 29000 | 8 | 29067 |
| &nbsp;&nbsp;&nbsp;&nbsp;Construction real estate |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial construction real estate | 5163 | 283 | 6556 | 31721 | 43723 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential construction real estate | 1464 | 613 |  | 495 | 2572 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial real estate |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-residential commercial real estate | 20721 | 2666 | 215158 | 84255 | 322800 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Multi-family residential real estate | 1721 | 2310 | 53012 | 26459 | 83502 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial | 4839 | 1523 | 5133 |  | 11495 |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer | 14 |  |  |  | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;Municipal |  | 1300 |  |  | 1300 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total variable rate | 35904 | 9604 | 355340 | 174993 | 575841 |
|  | $176326 | $34410 | $494455 | $473715 | $1178906 |

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***Asset Quality.*** The Company, like all financial institutions, is exposed to certain credit risks, including those related to the value of the collateral that secures its loans and the ability of borrowers to repay their loans. Consistent application of the Company's conservative loan policies has helped to mitigate this risk and has been prudent for both the Company and its customers. The Company's Board has set forth well-defined lending policies (which are periodically reviewed and revised as appropriate) that include conservative individual lending limits for officers, aggregate and Executive Loan Committee approval levels, Board approval for large credit relationships, a quality control program, a loan review program and other limits or standards deemed necessary and prudent. The Company's loan review program encompasses a review process for loan documentation and

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underwriting for select loans as well as a monitoring process for credit extensions to assess the credit quality and degree of risk in the loan portfolio. Management performs, and shares with the Board, periodic concentration analyses based on various factors such as industries, collateral types, location, large credit sizes and officer portfolio loads. Board approved policies set forth portfolio diversification levels to mitigate concentration risk and the Company participates a portion of significant loan balances to other financial institutions to further mitigate that risk. The Company has established underwriting guidelines to be followed by its officers; material exceptions are required to be approved by a senior loan officer, the President or the Board.

The Company does not make loans that are interest only, have teaser rates or that result in negative amortization of the principal, except for construction, lines of credit and other short-term loans for either commercial or consumer purposes where the credit risk is evaluated on a borrower-by-borrower basis. The Company evaluates the borrower's ability to pay on variable-rate loans over a variety of interest rate scenarios, not only the rate at origination.

The majority of the Company's loan portfolio is secured by real estate located throughout the Company's primary market area of northern Vermont and New Hampshire. For residential loans, the Company generally does not lend more than 80% of the appraised value of the home without a government guaranty or the borrower purchasing private mortgage insurance. The Company may lend up to 80% of the collateral value on commercial real estate loans to strong borrowers. Rarely, the loan to value may go up to 100% on loans with government guarantees or other mitigating circumstances. Although the Company's loan portfolio consists of different business segments, there is a portion of the loan portfolio centered in leisure travel tourism related loans. The Company has implemented risk management strategies to mitigate exposure to this industry through utilizing government guaranty programs as well as participations with other financial institutions as discussed above. Additionally, the loan portfolio contains many loans to seasoned and well established businesses and/or well secured loans which further reduce the Company's risk. Management closely follows the local and national economies and their impact on the local businesses, especially on the tourism industry, as part of the Company's risk management program.

The region's economic environment displays continued resilience. There has been consistent demand for leisure travel and dining out which is supporting the region's tourist and restaurant industries; however, the industries also continue to face some challenges due to staffing and inflation. The Company's management is focused on the economy and the related impact on its borrowers and closely monitors industry and geographic concentrations, specifically the region's tourist and restaurant industries. The Vermont unemployment rate was reported at 2.6% for December 2025 compared to 2.4% for December 2024 and the New Hampshire unemployment rate was 3.1% for December 2025 compared to 2.6% for December 2024. These rates compare favorably with the nationwide unemployment rate of 4.4% and 4.1%, respectively, for the comparable periods.

The Company also monitors its delinquency levels for any adverse trends. Management closely monitors the Company's loan and investment portfolios, OREO and OAO; if any, for potential problems and reports to the Boards of the Company and Union at regularly scheduled meetings.

Repossessed assets, nonaccrual loans, and loans that are 90 days or more past due are considered to be nonperforming assets. The following table details the composition of the Company's nonperforming assets and amounts utilized to calculate certain asset quality ratios monitored by Company's management as of or for the years ended December 31:

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| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Nonaccrual loans | $13562 | $1652 |
| Loans past due 90 days or more and still accruing interest | 241 | 241 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total nonperforming loans and assets | $13803 | $1893 |
| ACL on loans | $8407 | $7680 |
| Net charge-offs (recoveries) | $28 | $(22) |
| Total loans outstanding | $1178906 | $1160940 |
| Total average loans outstanding | $1167901 | $1077543 |

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The increase in nonaccrual loans at December 31, 2025 primarily relates to a commercial real estate loan relationship that was placed in nonaccrual during the first quarter of 2025.

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The following table shows trends of certain asset quality ratios monitored by Company's management at or for the years ended December 31:

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| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| ACL on loans to total loans outstanding | 0.71% | 0.66% |
| ACL on loans to nonperforming loans | 60.91% | 405.71% |
| ACL on loans to nonaccrual loans | 61.99% | 464.89% |
| Nonperforming loans to total loans | 1.17% | 0.16% |
| Nonperforming assets to total assets | 0.85% | 0.12% |
| Nonaccrual loans to total loans | 1.15% | 0.14% |
| Delinquent loans (30 days to nonaccruing) to total loans | 1.49% | 0.43% |
| Net charge-offs (recoveries) to total average loans | —% | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential real estate | —% | (0.01)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net recoveries | $(16) | $(24) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total average loans | $473743 | $441561 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial | 0.12% | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net charge-offs (recoveries) | $39 | $(1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total average loans | $33246 | $38949 |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer | 0.19% | 0.12% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net charge-offs | $5 | $3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total average loans | $2676 | $2499 |

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

There were no loans in process of foreclosure at December 31, 2025 and one residential real estate loan totaling $8 thousand in process of foreclosure at December 31, 2024. The aggregate interest on nonaccrual loans not recognized was $791 thousand and $235 thousand for the years ended December 31, 2025 and 2024, respectively.

The Company had loans rated substandard that were on a performing status totaling $531 thousand and $768 thousand at December 31, 2025 and 2024, respectively. In management's view, such loans represent a higher degree of risk of becoming nonperforming loans in the future. While still on a performing status, in accordance with the Company's credit policy, loans are internally classified when a review indicates the existence of any of the following conditions, making the likelihood of collection questionable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the financial condition of the borrower is unsatisfactory;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• repayment terms have not been met;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the borrower has sustained losses that are sizable, either in absolute terms or relative to net worth;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• confidence in the borrower's ability to repay is diminished;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• loan covenants have been violated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• collateral is inadequate; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other unfavorable factors are present.

On occasion, the Company acquires residential or commercial real estate properties through or in lieu of loan foreclosure. These properties are held for sale and are initially recorded as OREO at fair value less estimated selling costs at the date of the Company's acquisition of the property, with fair value based on an appraisal for more significant properties and on a broker's price opinion for less significant properties. Holding costs and declines in fair value of properties acquired are expensed as incurred. Declines in the fair value after acquisition of the property result in charges against income before tax. The Company evaluates each OREO property at least quarterly for changes in the fair value. The Company had no properties classified as OREO at December 31, 2025 or 2024.

***Allowance for Credit Losses on Loans*.** Some of the Company's loan customers ultimately do not make all of their contractually scheduled payments, requiring the Company to charge off a portion or all of the remaining principal balance due. The Company maintains an ACL to absorb such losses. The level of the ACL on loans at December 31, 2025 represents management's estimate of expected credit losses over the expected life of the loans at the balance sheet date. The Company's policy and methodologies related to establishing the ACL on loans are described in Note 1, Significant Accounting Policies and Note 7, Allowance for Credit Losses on Loans and Off-Balance Sheet Credit Exposures, to the Company's consolidated

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financial statements. The Company's ACL on loans was $8.4 million and $7.7 million at December 31, 2025 and 2024, respectively.

The following table reflects activity in the ACL on loans for the years ended December 31:

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| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Balance at beginning of period | $7680 | $6566 |
| &nbsp;&nbsp;Charge-offs | (47) | (3) |
| &nbsp;&nbsp;&nbsp;Recoveries | 19 | 25 |
| Net (charge-offs) recoveries | (28) | 22 |
| Credit loss expense | 755 | 1092 |
| Balance at end of period | $8407 | $7680 |

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The following table (net of loans held for sale) shows the internal breakdown by risk component of the Company's ACL on loans and the percentage of loans in each category to total loans in the respective portfolios at December 31:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2024** | **2024** |
| | **Amount** | **Percent** | **Amount** | **Percent** |
| Residential real estate | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| &nbsp;&nbsp;Non-revolving residential real estate | $2913 | 34.6 | $3212 | 38.5 |
| &nbsp;&nbsp;Revolving residential real estate | 263 | 3.1 | 280 | 1.9 |
| Construction real estate |  |  |  |  |
| &nbsp;&nbsp;Commercial construction real estate | 654 | 7.8 | 651 | 4.8 |
| &nbsp;&nbsp;Residential construction real estate | 186 | 2.2 | 102 | 4.4 |
| Commercial real estate |  |  |  |  |
| &nbsp;&nbsp;Non-residential commercial real estate | 3755 | 44.7 | 2766 | 28.6 |
| &nbsp;&nbsp;Multi-family residential real estate | 239 | 2.8 | 212 | 9.0 |
| Commercial | 292 | 3.5 | 377 | 3.0 |
| Consumer | 5 | 0.1 | 6 | 0.2 |
| Municipal | 100 | 1.2 | 74 | 9.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $8407 | 100.0 | $7680 | 100.0 |

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

Management believes, in its best estimate, that the ACL on loans at December 31, 2025 is appropriate to cover expected credit losses over the expected life of the Company's loan portfolio as of such date. However, there can be no assurance that the Company will not sustain losses in future periods which could be greater than the size of the ACL on loans at December 31, 2025. In addition, our banking regulators, as an integral part of their examination process, periodically review our ACL. Such agencies may require us to recognize adjustments to the ACL based on their judgments about information available to them at the time of their examination. A large adjustment to the ACL on loans for losses in future periods could require increased credit loss expense to replenish the ACL on loans, which could negatively affect earnings.

***Investment Activities***. The investment portfolio is used to generate interest and dividend income, manage liquidity and mitigate interest rate sensitivity. During the fourth quarter of 2025, the Company made a strategic decision to position the investment portfolio for improved future cash flows and earnings with the purchase of approximately $75.0 million of investment securities AFS.

At December 31, 2025, investment securities classified as AFS, which are carried at fair value, increased $75.8 million to $326.3 million, or 20.2% of total assets, compared to $250.5 million, or 16.4% of total assets, at December 31, 2024. The increase between periods is primarily due to purchases of $97.0 million in AFS debt securities, and improvement in unrealized losses of $10.4 million, partially offset by returns of principal of $31.2 million.

Net unrealized losses in the Company's AFS investment securities portfolio were $33.1 million at December 31, 2025 compared to net unrealized losses of $43.6 million at December 31, 2024. The Company's accumulated OCI component of stockholders' equity at December 31, 2025 and 2024 reflected cumulative net unrealized losses on investment securities of $25.9 million and $34.0 million, respectively. There were no investment securities classified as HTM or as trading at December 31, 2025 or 2024.

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Investment securities classified as AFS are marked-to-market, with any unrealized gain or loss after estimated taxes charged to the equity portion of the balance sheet through the accumulated OCI component of stockholders' equity. The unrealized losses are primarily attributable to changes in long-term interest rates which are tied to the pricing indexes for the securities. No declines in value were deemed by management to be impairment related to credit losses at December 31, 2025 and 2024. Deterioration in credit quality and/or imbalances in liquidity that may result from changes in financial market conditions might adversely affect the fair values of the Company's investment portfolio and the amount of gains or losses ultimately realized on the sale of such securities and may also increase the potential that credit losses may be identified in future periods, resulting in credit loss expense recorded in earnings.

Investment securities AFS with a fair value of $87.8 million and $96.0 million were pledged as collateral for FHLB borrowings and other credit subject to collateralization, for public unit deposits or for other purposes as required or permitted by law at December 31, 2025 and 2024, respectively. Investment securities AFS pledged as collateral for the discount window at the FRB consisted of mortgage-backed securities with a fair value of $9.4 million and $9.7 million at December 31, 2025 and 2024, respectively.

***Federal Home Loan Bank of Boston Stock.*** Union is a member of the FHLB and is required to invest in $100 par value stock of the FHLB in an amount tied to the unpaid principal balances on qualifying loans, plus an amount to satisfy an activity based requirement. The stock is nonmarketable, and is redeemable by the FHLB at par value. With the increase in FHLB advances outstanding of $26.8 million, the investment in FHLB Class B common stock has increased to $12.2 million at December 31, 2025 compared to $11.2 million at December 31, 2024. Although the FHLB was in compliance with all regulatory capital ratios as of December 31, 2025 and 2024, there is the possibility of future capital calls by the FHLB on member banks to ensure compliance with its capital plan. Union's investment in FHLB stock is classified as restricted and carried at cost in Other assets on the consolidated balance sheets. Similar to evaluating investment securities for potential credit losses, the Company periodically evaluates its investment in the FHLB. Management's most recent evaluation of the Company's holdings of FHLB common stock concluded that the investment was not impaired at December 31, 2025.

***Deposits.*** The following table shows information concerning the Company's average deposits by account type and the weighted average nominal rates at which interest was paid on such deposits for the years ended December 31:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** |
| | **Average<br>Balance** | **Percent<br>of Total<br>Deposits** | **Average<br>Rate Paid** | **Average<br>Balance** | **Percent<br>of Total<br>Deposits** | **Average<br>Rate Paid** |
| | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Nontime deposits: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Noninterest bearing deposits | $220993 | 18.6 |  | $226388 | 19.4 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest bearing checking accounts | 305321 | 25.7 | 1.39% | 295088 | 25.3 | 1.22% |
| &nbsp;&nbsp;&nbsp;&nbsp;Money market accounts | 227936 | 19.2 | 2.53% | 222871 | 19.0 | 2.40% |
| &nbsp;&nbsp;&nbsp;&nbsp;Savings accounts | 143999 | 12.1 | 0.04% | 144749 | 12.4 | 0.05% |
| Total nontime deposits | 898249 | 75.6 | 1.12% | 889096 | 76.1 | 1.01% |
| Total time deposits | 288878 | 24.4 | 3.92% | 279180 | 23.9 | 4.14% |
| Total deposits | $1187127 | 100.0 | 1.80% | $1168276 | 100.0 | 1.76% |

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Total average deposits increased by $18.9 million, or 1.6%, between years, with average time deposits increasing $9.7 million, or 3.5%, and average nontime deposits increasing $9.2 million, or 1.0%. The deposit mix has remained consistent between periods. The increase in the average balance of total time deposits consisted of increases of $37.1 million in average customer time deposits as customers took advantage of higher rate paying CDs, and $13.5 million in average purchased CDARS deposits, partially offset by a $40.9 million decrease in average retail brokered deposits. The increase in the average balance of total nontime deposits reflected increases of $10.2 million in interest bearing checking accounts and $5.1 million in money market accounts, partially offset by decreases of $5.4 million in noninterest bearing deposits and $750 thousand in saving accounts.

The Company participates in CDARS, which permits the Company to offer full deposit insurance coverage to its customers by exchanging deposit balances with other CDARS participants. CDARS also provides the Company with an additional source of funding and liquidity through the purchase of deposits. There were $248 thousand in purchased CDARS deposits at December 31, 2025 and none at December 31, 2024. There were $11.3 million and $13.3 million of time deposits of $250,000 or less on the balance sheets at December 31, 2025 and 2024, respectively, which were exchanged with other CDARS participants.

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The Company also participates in the ICS program, a service through which Union can offer its customers demand or savings products with access to unlimited FDIC insurance, while receiving reciprocal deposits from other FDIC-insured banks. Like the exchange of certificate of deposit accounts through CDARS, exchange of demand or savings deposits through ICS provides a depositor with full deposit insurance coverage of excess balances, thereby helping the Company retain the full amount of the deposit on its balance sheet. As with the CDARS program, in addition to reciprocal deposits, participating banks may also purchase one-way ICS deposits. There were $270.5 million and $256.5 million in exchanged ICS demand and money market deposits on the balance sheets at December 31, 2025 and 2024, respectively. There were no purchased ICS deposits at December 31, 2025 or December 31, 2024.

At December 31, 2025, there were $10.0 million of retail brokered deposits at a weighted average rate of 3.85% issued under a master certificate of deposit program with a deposit broker for a twelve month term, which provided a supplemental source of funding and liquidity. There were no retail brokered deposits at December 31, 2024.

Uninsured deposits have been estimated to include deposits with balances greater than the FDIC insurance coverage limit of $250 thousand. This estimate is based on the same methodologies and assumptions used for regulatory reporting requirements. At December 31, 2025, the Company had estimated uninsured deposit accounts totaling $437.6 million, or 36.0% of total deposits. Uninsured deposits include $22.0 million of municipal deposits that were collateralized under applicable state regulations by investment securities or letters of credit issued by the FHLB at December 31, 2025, as described below under *Borrowings.*

The following table provides a maturity distribution of the Company's time deposits in amounts in excess of the $250 thousand FDIC insurance limit at December 31:

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| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Three months or less | $29593 | $24544 |
| Over three months through six months | 17267 | 16004 |
| Over six months through twelve months | 21713 | 20257 |
| Over twelve months | 523 | 918 |
|  | $69096 | $61723 |

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***Borrowings.*** Advances from the FHLB are another key source of funds to support earning assets. These funds are also used to manage the Bank's interest rate and liquidity risk exposures. Borrowed funds included FHLB advances of $286.5 million with a weighted average rate of 4.05% at December 31, 2025 and $259.7 million with a weighted average rate of 4.17% at December 31, 2024.

The Company has the authority, up to its available borrowing capacity with the FHLB, to collateralize public unit deposits with letters of credit issued by the FHLB. FHLB letters of credit in the amount of $42.9 million and $47.3 million were utilized as collateral for these deposits at December 31, 2025 and 2024, respectively. Total fees paid by the Company in connection with the issuance of these letters of credit were $50 thousand and $44 thousand for the years ended December 31, 2025 and 2024, respectively.

In August 2021, the Company completed the private placement of $16.5 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2031 (the "Notes") to certain qualified institutional buyers and accredited investors. The Notes initially bear interest, payable semi-annually, at the rate of 3.25% per annum, until September 1, 2026. From and including September 1, 2026, the interest rate applicable to the outstanding principal amount due will reset quarterly to the then current three-month secured overnight financing rate (SOFR) plus 263 basis points. The Notes are presented in the consolidated balance sheets net of unamortized issuance costs of $193 thousand and $227 thousand at December 31, 2025 and 2024, respectively. See Note 13 to the Company's consolidated financial statements.

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

The Company's maximum exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those

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

The following table details the contractual or notional amount of financial instruments that represented credit risk at December 31, 2025:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Contract or Notional Amount** | **Contract or Notional Amount** | **Contract or Notional Amount** | **Contract or Notional Amount** | **Contract or Notional Amount** | **Contract or Notional Amount** | **Contract or Notional Amount** |
| | **2026** | **2027** | **2028** | **2029** | **2030** | **Thereafter** | **Total** |
| | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Commitments to originate loans | $65558 | $— | $— | $— | $— | $— | $65558 |
| Unused lines of credit | 137083 | 26879 | 2984 | 20 | 1823 | 5242 | 174031 |
| Standby and commercial letters of credit | 440 | 309 | 10 |  | 28 | 786 | 1573 |
| Credit card arrangements | 125 |  |  |  |  |  | 125 |
| MPF credit enhancement obligation, net | 1233 |  |  |  |  |  | 1233 |
| Commitment to purchase investment in<br>a real estate limited partnership | 1000 |  |  |  |  |  | 1000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $205439 | $27188 | $2994 | $20 | $1851 | $6028 | $243520 |

---

Commitments to originate loans are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have a fixed expiration date or other termination clause and may require payment of a fee. The unused lines of credit total includes $14.6 million of lines available under the overdraft privilege program and is included in the 2026 funding period. Approximately $43.6 million of the unused lines of credit relate to real estate construction loans that are expected to fund within the next twelve months. The remaining lines primarily relate to revolving lines of credit for other real estate or commercial loans. Since many of the loan commitments are expected to expire without being drawn upon and not all credit lines will be utilized, the total commitment amounts do not necessarily represent future cash requirements. Lines of credit incur seasonal volume fluctuations due to the nature of some customers' businesses, such as tourism.

The Company may, from time-to-time, enter into commitments to purchase, participate or sell loans, securities, certificates of deposit, or other investment instruments which involve market and interest rate risk. At December 31, 2025, the Company had binding commitments to sell residential mortgage loans at fixed rates totaling $4.2 million.

The Company sells 1-4 family residential mortgage loans under the MPF loss-sharing program with FHLB, when management believes it is economically advantageous to do so. Under this program the Company shares in the credit risk of each mortgage, while receiving fee income in return. The Company is responsible for a Credit Enhancement Obligation based on the credit quality of these loans. FHLB funds a first loss account based on the Company's outstanding MPF mortgage balances. This creates a laddered approach to sharing in any losses. In the event of default, homeowner's equity and private mortgage insurance, if any, are the first sources of repayment; the FHLB first loss account funds are then utilized, followed by the member's Credit Enhancement Obligation, with the balance the responsibility of FHLB. These loans must meet specific underwriting standards of the FHLB. As of December 31, 2025, the Company had sold loans through the MPF program totaling $68.7 million with an outstanding balance of $35.5 million. The volume of loans sold to the MPF program and the corresponding Credit Enhancement Obligation are closely monitored by management. As of December 31, 2025, the notional amount of the maximum contingent contractual liability related to this program was $1.3 million, of which $19 thousand was recorded as a reserve through Accrued interest and other liabilities. Since inception of the Company's MPF participation in 2015, the Company has not experienced any losses under this program.

The Company records an ACL on off-balance sheet credit exposures through a charge or credit to Credit loss expense on the consolidated statements of income to account for the change in the ACL on off-balance sheet credit exposures between reporting periods. The ACL on off-balance sheet credit exposures totaled $1.1 million at December 31, 2025 and 2024 and was included in Accrued interest and other liabilities on the consolidated balance sheets. There was $19 thousand of credit loss expense and $162 thousand of credit loss benefit for off-balance sheet credit exposures recorded for the years ended December 31, 2025 and 2024, respectively.

***Liquidity*.** Liquidity is a measurement of the Company's ability to meet potential cash requirements, including ongoing commitments to fund deposit withdrawals, repay borrowings, fund investment and lending activities, purchase and lease commitments, and for other general business purposes. The primary objective of liquidity management is to maintain a balance between sources and uses of funds to meet cash flow needs in the most economical and expedient manner. The Company's

------

principal sources of funds are deposits; wholesale funding options including purchased deposits, amortization, prepayment and maturity of loans, investment securities, interest bearing deposits and other short-term investments; sales of securities AFS and loans; earnings; and funds provided from operations. Contractual principal repayments on loans are a relatively predictable source of funds; however, deposit flows and loan and investment prepayments are less predictable and can be significantly influenced by market interest rates, economic conditions, and rates offered by our competitors. Managing liquidity risk is essential to maintaining both depositor confidence and earnings stability.

At December 31, 2025, Union, as a member of FHLB, had access to unused lines of credit up to $48.3 million, over and above the $332.2 million in combined outstanding borrowings and other credit subject to collateralization and to the purchase of required FHLB Class B common stock and evaluation by the FHLB of the underlying collateral available. This line of credit can be used for either short-term or long-term liquidity or other funding needs.

Union also maintains an IDEAL Way Line of Credit with the FHLB. The total line available was $551 thousand as of December 31, 2025 and 2024. There were no borrowings against this line of credit as of such date. Interest on this line is chargeable at a rate determined by the FHLB and payable monthly. Should Union utilize this line of credit, qualified portions of the loan and investment portfolios would collateralize these borrowings.

In addition to its borrowing arrangements with the FHLB, Union maintains a pre-approved federal funds line of credit totaling $15.0 million with an upstream correspondent bank, a master brokered deposit agreement with a brokerage firm, and one-way buy options with CDARS and ICS. There were $10.0 million of retail brokered deposits issued under a master certificate of deposit program with a broker, $248 thousand in purchased CDARS deposits, and no purchased ICS deposits or outstanding advances on the Union correspondent line as of December 31, 2025.

Union's investment and residential loan portfolios provide a significant amount of contingent liquidity that could be accessed in a reasonable time period through sales of those portfolios. Additional contingent liquidity sources are available with further access to the brokered deposit market and the FRB discount window. These sources are considered as liquidity alternatives in our contingent liquidity plan. Management believes the Company has sufficient liquidity to meet all reasonable borrower, depositor, and creditor needs in the present economic environment. However, any projections of future cash needs and flows are subject to substantial uncertainty, including factors outside the Company's control.

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

On May 20, 2025, the Company and Union entered into an Equity Distribution Agreement with Piper Sandler & Co., as sales agent, pursuant to which the Company may sell from time to time shares of the Company's common stock, par value $2.00, having an aggregate gross sale price of up to $40,000,000. Sales of common stock under the Equity Distribution Agreement may be made in any transactions that are deemed to be "at-the-market offerings" as defined in Rule 415(a)(4) under the Securities Act, or subject to the Company's consent, in privately negotiated transactions. The shares offered and sold in the offering have been registered by the Company under the Securities Act. During the year ended December 31, 2025, the Company issued 56,260 shares for aggregate gross sale proceeds of $1.5 million, at an average gross sale price of $26.51 per share, which yielded net proceeds to the Company of $1.2 million, after issuance costs, including sales commissions equal to 3% of gross sale proceeds. As of December 31, 2025, approximately $38.5 million remains available for issuance under the offering.

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

Stockholders' equity increased from $66.5 million at December 31, 2024 to $80.9 million at December 31, 2025, reflecting net income of $11.1 million for 2025, a decrease of $8.1 million in accumulated other comprehensive loss due to an increase in the fair market value of the Company's AFS securities, an increase of $1.2 million due to net proceeds from the issuance of common stock under the Company's at-the-market offering, an increase of $494 thousand in common stock and additional paid in capital from the vesting of stock based compensation, and a $74 thousand increase due to the issuance of common stock under the DRIP. These increases were partially offset by cash dividends declared of $6.6 million during 2025.

------

The Company has 7,500,000 shares of $2.00 par value common stock authorized. As of December 31, 2025, the Company had 5,084,635 shares issued, of which 4,613,205 were outstanding and 471,430 were held in treasury. As of December 31, 2025, there were outstanding unvested RSUs under the Company's 2024 Equity Plan with respect to 12,090 shares under RSU grants in 2025, and outstanding unvested RSUs under the Company's 2014 Equity Plan with respect to 2,658 shares under RSU grants in 2024.

In December 2024, the Company's Board reauthorized for 2025 and 2026 the limited stock repurchase plan that was initially established in May of 2010. The limited stock repurchase plan allows the repurchase of up to a fixed number of shares of the Company's common stock each calendar quarter in open market purchases or privately negotiated transactions, as management may deem advisable and as market conditions may warrant. The repurchase authorization for a calendar quarter (currently 2,500 shares) expires at the end of that quarter to the extent it has not been exercised, and is not carried forward into future quarters. The Company had no repurchases under this program during 2025. Since inception, as of December 31, 2025, the Company had repurchased 26,140 shares under the program, for a total cost of $682 thousand. The quarterly repurchase authorization expires on December 31, 2026, unless reauthorized.

The Company maintains a DRIP whereby registered stockholders may elect to reinvest cash dividends and optional cash contributions to purchase additional shares of the Company's common stock. The Company has reserved 200,000 shares of its common stock for issuance and sale under the DRIP. As of December 31, 2025, 15,819 shares of stock had been issued from treasury stock since inception of the DRIP, including 2,645 shares in 2025.

The Company's total capital to risk weighted assets increased to 12.8% at December 31, 2025, from 12.5% at December 31, 2024. Tier I capital to risk weighted assets increased to 10.3% at December 31, 2025, from 10.0% at December 31, 2024, and Tier I capital to average assets increased to 6.4% at December 31, 2025 from 6.3% at December 31, 2024. At December 31, 2025 and 2024, Union was categorized as well capitalized under the Prompt Corrective Action regulatory framework and the Company exceeded applicable minimum capital adequacy requirements. There were no conditions or events between December 31, 2025 and the date of this report that management believes have changed either the Company's or Union's regulatory capital category. See Note 23 to the Company's consolidated financial statements for additional discussion of the Company's and Union's regulatory capital ratios.

***Impact of Inflation and Changing Prices.*** The Company's consolidated financial statements have been prepared in accordance with GAAP, which allows for the measurement of financial position and results of operations in terms of historical dollars, without considering changes in the relative purchasing power of money over time due to inflation. Banks have asset and liability structures that are essentially monetary in nature, and their general and administrative costs constitute relatively small percentages of total expenses. Thus, increases in the general price levels for goods and services have a relatively minor effect on the Company's total expenses but could have an impact on our loan customers' financial condition and on the savings rate and deposit balances of our deposit customers. Interest rates have a more significant impact on the Company's financial performance than the effect of general inflation.

Inevitably, not all of our interest rate-sensitive assets and liabilities will re-price simultaneously and in equal volume in response to changes in the federal funds rate, and therefore the potential for interest rate exposure exists. Management believes that several factors will affect the actual impact of interest rate changes on our balance sheet and operating results, including, but not limited to, actual changes in interest rates or expectations of future changes, the degree of volatility in the securities markets, inflation rates or expectations of inflation, and the slope of the interest rate yield curve. The Company is aware of and evaluates interest rate risk along with others in making business decisions. The levels of deficit spending by federal, state and local governments and control of the money supply by the FRB, including further changes to monetary or fiscal policies, may have unanticipated effects on interest rates or inflation in future periods that could have an unfavorable impact on the future operating results of the Company.

The federal funds rate, and greater industry-wide competition for deposits have had a significant impact on our cost of interest-bearing liabilities. To assist in meeting our loan-growth needs, we have placed additional reliance on wholesale funding in the form of borrowings and purchased brokered deposits. These funding sources generally have a higher cost than deposits originating within the markets we serve and are not our preferred sources of funding.

The cost of funds, which is primarily tied to rates paid on customer deposits, increased 7 bps during 2025. Management is projecting some relief in the cost of funds for 2026 as interest rates on customer deposits decline in 2026 due to the cumulative 75 bps decrease in the Federal Funds target range during 2025. Market rates are out of the Company's control but can have a significant impact on net interest income.

**Item 7A. Quantitative and Qualitative Disclosures About Market Risk**

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

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**Item 8. Financial Statements and Supplementary Data**

**UNION BANKSHARES, INC. AND SUBSIDIARY**

**CONSOLIDATED BALANCE SHEETS**

**December 31, 2025 and 2024** 

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| ***Assets*** | (Dollars in thousands) | (Dollars in thousands) |
| Cash and due from banks | $4658 | $5168 |
| Federal funds sold and overnight deposits | 7642 | 10670 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 12300 | 15838 |
| Interest bearing deposits in banks | 8955 | 9462 |
| Investment securities available-for-sale | 326255 | 250504 |
| Other investments | 2038 | 1754 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total investments | 328293 | 252258 |
| Loans held for sale | 4172 | 5204 |
| Loans | 1174734 | 1155736 |
| Allowance for credit losses on loans | (8407) | (7680) |
| Net deferred loan costs | 2066 | 2162 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loans | 1168393 | 1150218 |
| Premises and equipment, net | 19847 | 20225 |
| Other assets | 75231 | 75153 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***Total assets*** | $1617191 | $1528358 |
| **Liabilities and Stockholders' Equity** |  |  |
| ***Liabilities*** |  |  |
| Deposits |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Noninterest bearing | $226939 | $226048 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest bearing | 725996 | 714862 |
| &nbsp;&nbsp;&nbsp;&nbsp;Time | 262047 | 227984 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deposits | 1214982 | 1168894 |
| Borrowed funds | 286481 | 259696 |
| Subordinated notes | 16307 | 16273 |
| Accrued interest and other liabilities | 18557 | 17015 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***Total liabilities*** | 1536327 | 1461878 |
| **Commitments and Contingencies (Notes 9, 15, 16, 19, 20 and 23)** |  |  |
| **Stockholders' Equity** |  |  |
| Common stock, $2.00 par value; 7,500,000 shares authorized; 5,084,635 shares<br> issued at December 31, 2025 and 5,012,084 shares issued at December 31, 2024 | 10169 | 10024 |
| Additional-paid-in capital | 4607 | 3031 |
| Retained earnings | 96247 | 91722 |
| Treasury stock at cost; 471,430 shares at December 31, 2025 and 474,075 shares<br> at December 31, 2024 | (4276) | (4300) |
| Accumulated other comprehensive loss | (25883) | (33997) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***Total stockholders' equity*** | 80864 | 66480 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***Total liabilities and stockholders' equity*** | $1617191 | $1528358 |

---

See accompanying notes to consolidated financial statements.

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**UNION BANKSHARES, INC. AND SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF INCOME**

**Years Ended December 31, 2025 and 2024** 

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| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) |
| ***Interest and dividend income*** | (Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) |
| &nbsp;&nbsp;&nbsp;Interest and fees on loans | $66340 | $59313 |
| &nbsp;&nbsp;&nbsp;Interest on debt securities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Taxable | 5983 | 4587 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax exempt | 1552 | 1901 |
| &nbsp;&nbsp;&nbsp;Dividends | 831 | 541 |
| &nbsp;&nbsp;&nbsp;Interest on federal funds sold and overnight deposits | 740 | 1132 |
| &nbsp;&nbsp;&nbsp;Interest on interest bearing deposits in banks | 342 | 480 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest and dividend income | 75788 | 67954 |
| ***Interest expense*** |  |  |
| &nbsp;&nbsp;&nbsp;Interest on deposits | 21412 | 20574 |
| &nbsp;&nbsp;&nbsp;Interest on short-term borrowed funds | 459 | 1275 |
| &nbsp;&nbsp;&nbsp;Interest on long-term borrowed funds | 10327 | 7171 |
| &nbsp;&nbsp;&nbsp;Interest on subordinated notes | 570 | 570 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest expense | 32768 | 29590 |
| ***&nbsp;&nbsp;&nbsp;&nbsp;Net interest income*** | 43020 | 38364 |
| ***Credit loss expense, net*** | 774 | 930 |
| ***&nbsp;&nbsp;&nbsp;&nbsp;Net interest income after credit loss expense*** | 42246 | 37434 |
| ***Noninterest income*** |  |  |
| &nbsp;&nbsp;&nbsp;Wealth management income | 1187 | 1067 |
| &nbsp;&nbsp;&nbsp;Service fees | 6939 | 7040 |
| &nbsp;&nbsp;&nbsp;Net losses on sales of investment securities available-for-sale |  | (1293) |
| &nbsp;&nbsp;Net gains on sales of loans held for sale | 2148 | 1697 |
| &nbsp;&nbsp;Net gains on other investments | 203 | 216 |
| &nbsp;&nbsp;Other income | 985 | 996 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest income | 11462 | 9723 |
| ***Noninterest expenses*** |  |  |
| &nbsp;&nbsp;&nbsp;Salaries and wages | 17452 | 15678 |
| &nbsp;&nbsp;&nbsp;Employee benefits | 6479 | 5716 |
| &nbsp;&nbsp;&nbsp;Occupancy expense, net | 2335 | 2194 |
| &nbsp;&nbsp;&nbsp;Equipment expense | 4381 | 3992 |
| &nbsp;&nbsp;&nbsp;Other expenses | 11053 | 10447 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest expenses | 41700 | 38027 |
| ***&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income before provision for income taxes*** | 12008 | 9130 |
| ***Provision for income taxes*** | 928 | 369 |
| ***&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income*** | $11080 | $8761 |
| ***Basic earnings per common share*** | $2.43 | $1.94 |
| ***Diluted earnings per common share*** | $2.41 | $1.92 |
| ***Dividends per common share*** | $1.44 | $1.44 |

---

See accompanying notes to consolidated financial statements.

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**UNION BANKSHARES, INC. AND SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**

**Years Ended December 31, 2025 and 2024**

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| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Net income | $11080 | $8761 |
| Other comprehensive income (loss), net of tax: |  |  |
| &nbsp;&nbsp;&nbsp;Investment securities available-for-sale: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized holding gains (losses) arising during the year on investment securities available-for-sale | 8114 | (3051) |
| &nbsp;&nbsp;&nbsp;&nbsp;Reclassification adjustment for net losses on investment securities available-for-sale realized in net income |  | 1009 |
| Total other comprehensive income (loss) | 8114 | (2042) |
| Total comprehensive income | $19194 | $6719 |

---

See accompanying notes to consolidated financial statements.

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**UNION BANKSHARES, INC. AND SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

**Years Ended December 31, 2025 and 2024**

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Common Stock** | **Common Stock** | | | | | |
| | **Shares,<br>net of<br>treasury** | **Amount** |<br>**Additional<br>paid-in<br>capital** |<br>**Retained<br>earnings** |<br>**Treasury<br>stock** |<br>**Accumulated<br>other<br>comprehensive<br>income (loss)** |<br>**Total<br>stockholders'<br>equity** |
| | (Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) |
| Balances, December 31, 2023 | 4518848 | $9991 | $2621 | $89472 | $(4322) | $(31955) | $65807 |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  | 8761 |  |  | 8761 |
| &nbsp;&nbsp;&nbsp;Other comprehensive loss |  |  |  |  |  | (2042) | (2042) |
| &nbsp;&nbsp;&nbsp;Dividend reinvestment plan | 2425 |  | 45 |  | 22 |  | 67 |
| &nbsp;&nbsp;Cash dividends declared<br> ($1.44 per share) |  |  |  | (6511) |  |  | (6511) |
| &nbsp;&nbsp;&nbsp;Stock based compensation<br> expense | 16736 | 33 | 365 |  |  |  | 398 |
| Balances, December 31, 2024 | 4538009 | 10024 | 3031 | 91722 | (4300) | (33997) | 66480 |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  | 11080 |  |  | 11080 |
| &nbsp;&nbsp;&nbsp;Other comprehensive income |  |  |  |  |  | 8114 | 8114 |
| &nbsp;&nbsp;&nbsp;Dividend reinvestment plan | 2645 |  | 50 |  | 24 |  | 74 |
| &nbsp;&nbsp;Cash dividends declared<br> ($1.44 per share) |  |  |  | (6555) |  |  | (6555) |
| &nbsp;&nbsp;&nbsp;Stock based compensation<br> expense | 16291 | 32 | 462 |  |  |  | 494 |
| &nbsp;&nbsp;&nbsp;Common stock issuance, net<br> of issuance costs | 56260 | 113 | 1064 |  |  |  | 1177 |
| Balances, December 31, 2025 | 4613205 | $10169 | $4607 | $96247 | $(4276) | $(25883) | $80864 |

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See accompanying notes to consolidated financial statements.

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**UNION BANKSHARES, INC. AND SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**Years Ended December 31, 2025 and 2024**

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| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| ***Cash Flows From Operating Activities*** |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $11080 | $8761 |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 1631 | 1593 |
| &nbsp;&nbsp;&nbsp;&nbsp;Credit loss expense | 774 | 930 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred income tax benefit | (1245) | (1829) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net amortization of premiums on investment securities | 513 | 547 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity in losses of limited partnerships | 1823 | 1703 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock based compensation expense | 494 | 398 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net decrease (increase) in unamortized loan costs | 96 | (410) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sales of loans held for sale | 145675 | 115155 |
| &nbsp;&nbsp;&nbsp;&nbsp;Origination of loans held for sale | (142495) | (115592) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net gains on sales of loans held for sale | (2148) | (1697) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net gains on disposals of premises and equipment |  | (22) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net losses on sales of investment securities available-for-sale |  | 1293 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net gains on other investments | (203) | (216) |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in accrued interest receivable | (517) | (1061) |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt issuance costs | 34 | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;Decrease (increase) in other assets | 281 | (131) |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in other liabilities | 1432 | 2695 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 17225 | 12151 |
| ***Cash Flows From Investing Activities*** |  |  |
| &nbsp;&nbsp;&nbsp;Interest bearing deposits in banks |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from maturities and redemptions | 10458 | 8963 |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases | (9951) | (3735) |
| &nbsp;&nbsp;&nbsp;Investment securities available-for-sale |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sales |  | 37218 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from maturities, calls and paydowns | 31175 | 19288 |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases | (97011) | (47084) |
| &nbsp;&nbsp;&nbsp;Net purchases of other investments | (81) | (38) |
| &nbsp;&nbsp;&nbsp;Net increase in nonmarketable stock | (931) | (8152) |
| &nbsp;&nbsp;&nbsp;Net increase in loans | (19045) | (127469) |
| &nbsp;&nbsp;&nbsp;Recoveries of loans charged off | 19 | 25 |
| &nbsp;&nbsp;&nbsp;Net purchases of premises and equipment | (1253) | (1071) |
| &nbsp;&nbsp;&nbsp;Investments in limited partnerships | (1909) | (3052) |
| &nbsp;&nbsp;&nbsp;Proceeds of Company-owned life insurance death benefit | 197 | 235 |
| &nbsp;&nbsp;&nbsp;Proceeds from sales of premises and equipment |  | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (88332) | (124826) |

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| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| ***Cash Flows From Financing Activities*** |  |  |
| &nbsp;&nbsp;&nbsp;Advances on long-term borrowings | 70285 | 285000 |
| &nbsp;&nbsp;&nbsp;Repayment of long-term borrowings | (30000) | (110000) |
| &nbsp;&nbsp;&nbsp;Net (decrease) increase in short-term borrowings outstanding | (13500) | 19000 |
| &nbsp;&nbsp;&nbsp;Net increase (decrease) in noninterest bearing deposits | 891 | (24944) |
| &nbsp;&nbsp;&nbsp;Net increase (decrease) in interest bearing deposits | 11134 | (50827) |
| &nbsp;&nbsp;&nbsp;Net increase (decrease) in time deposits | 34063 | (60938) |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of common stock, net of issuance costs | 1177 |  |
| &nbsp;&nbsp;&nbsp;Dividends paid | (6481) | (6444) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 67569 | 50847 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net decrease in cash and cash equivalents | (3538) | (61828) |
| ***Cash and cash equivalents*** |  |  |
| &nbsp;&nbsp;&nbsp;*Beginning of year* | 15838 | 77666 |
| &nbsp;&nbsp;&nbsp;*End of year* | $12300 | $15838 |
| **Supplemental Disclosures of Cash Flow Information** |  |  |
| &nbsp;&nbsp;&nbsp;Interest paid | $33107 | $27937 |
| &nbsp;&nbsp;&nbsp;Income taxes paid | $280 | $— |
| **Supplemental Schedule of Noncash Investing and Financing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;Investment in limited partnerships acquired by capital contributions payable | $1901 | $1712 |
| **Dividends paid on Common Stock:** |  |  |
| &nbsp;&nbsp;&nbsp;Dividends declared | $6555 | $6511 |
| &nbsp;&nbsp;&nbsp;Dividends reinvested | (74) | (67) |
|  | $6481 | $6444 |

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See accompanying notes to consolidated financial statements.

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**UNION BANKSHARES, INC. AND SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**Note 1. Significant Accounting Policies**

*Basis of financial statement presentation*

The accounting and reporting policies of Union Bankshares, Inc. and its Subsidiary (together, the Company) are in conformity with GAAP and general practices within the banking industry. The following is a description of the more significant policies.

The consolidated financial statements include the accounts of Union Bankshares, Inc., and its wholly owned subsidiary, Union Bank, headquartered in Morrisville, Vermont. All significant intercompany transactions and balances have been eliminated. The Company utilizes the accrual method of accounting for financial reporting purposes.

The Company is a "smaller reporting company" and as permitted under the rules and regulations of the SEC, has elected to provide its audited consolidated statements of income, comprehensive income, cash flows and changes in stockholders' equity for a two year, rather than three year, period. The Company has also elected to provide certain other scaled disclosures in this Annual Report on Form 10-K, as permitted for smaller reporting companies.

Certain amounts in the 2024 consolidated financial statements have been reclassified to conform to the current year presentation.

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The acronyms, abbreviations and capitalized terms identified below are used throughout this Annual Report on Form 10-K, including Parts I, II and III. The following is provided to aid the reader and provide a reference page when reviewing this Annual Report:

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| | | | |
|:---|:---|:---|:---|
| ACL: | Allowance for credit losses | FOMC: | Federal Open Market Committee |
| AFS: | Available-for-sale | GAAP: | Generally accepted accounting principles in the United States |
| ASC: | Accounting Standards Codification | GLBA: | Gramm-Leach-Bliley Financial Modernization Act of 1999 |
| ASU: | Accounting Standards Update | HTM: | Held-to-maturity |
| BHCA: | Bank Holding Company Act of 1956, as amended | HUD: | U.S. Department of Housing and Urban Development |
| Board: | Board of Directors | ICS: | Insured Cash Sweeps of the IntraFi Network |
| bp or bps: | Basis point(s) | IRS: | Internal Revenue Service |
| Branch Acquisition: | The acquisition of three New Hampshire branches in May 2011 | MBS: | Mortgage-backed security |
| BTFP: | Bank Term Funding Program | MPF: | Mortgage Partnership Finance Program |
| CDARS: | Certificate of Deposit Accounts Registry Service of the IntraFi Network | MSRs: | Mortgage servicing rights |
| CECL: | Current expected credit loss | Nasdaq: | Nasdaq Global Security Market |
| CFPB: | Consumer Financial Protection Bureau | OAO: | Other assets owned |
| COLI: | Company-owned life insurance | OCI: | Other comprehensive income (loss) |
| Company: | Union Bankshares, Inc. and Subsidiary | OFAC: | U.S. Office of Foreign Assets Control |
| DCF: | Discounted cash flow | OREO: | Other real estate owned |
| DFR: | Vermont Department of Financial Regulation | RD: | USDA Rural Development |
| DIF: | Federal Deposit Insurance Fund | RSU: | Restricted stock unit |
| Dodd-Frank Act: | The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 | SBA: | U.S. Small Business Administration |
| DRIP: | Dividend Reinvestment and Stock Purchase Plan | SEC: | U.S. Securities and Exchange Commission |
| EPS: | Earnings per share | SOX Act: | Sarbanes Oxley Act of 2002 |
| FASB: | Financial Accounting Standards Board | Union: | Union Bank, the sole subsidiary of Union Bankshares, Inc |
| FDIC: | Federal Deposit Insurance Corporation | USDA: | U.S. Department of Agriculture |
| FDICIA: | The Federal Deposit Insurance Corporation Improvement Act of 1991 | VA: | U.S. Veterans Administration |
| FHA: | U.S. Federal Housing Administration | 2008 Plan: | 2008 Amended and Restated Nonqualified Deferred Compensation Plan |
| FHLB: | Federal Home Loan Bank of Boston | 2014 Equity Plan: | 2014 Equity Incentive Plan, as amended |
| FRB: | Federal Reserve Board | 2020 Plan: | 2020 Amended and Restated Nonqualified Excess Plan |
| FHLMC/Freddie Mac: | Federal Home Loan Mortgage Corporation | 2024 Equity Plan: | 2024 Equity Incentive Plan |

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*Nature of operations*

The Company provides a variety of financial services to individuals, municipalities, commercial businesses and nonprofit customers through its branches, ATMs, telebanking, mobile and internet banking systems in northern Vermont and New Hampshire. This market area encompasses primarily retail consumers, small businesses, municipalities, agricultural producers and the tourism industry. The Company's primary deposit products are checking accounts, savings accounts, money market accounts, certificates of deposit and individual retirement accounts and its primary lending products are commercial, real estate, municipal and consumer loans. The Company also offers fiduciary and asset management services through its Wealth Management Group, an unincorporated division of Union.

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*Significant concentration of credit risk*

The Company grants loans primarily to customers in Vermont and New Hampshire. Although it has a diversified loan portfolio, a large portion of the Company's loans are secured by commercial or residential real estate located in Vermont and New Hampshire, resulting in exposure to volatility with each state's real estate market. Additionally, the ability of borrowers to repay loans is highly dependent upon other economic factors throughout Vermont and New Hampshire. The Company typically requires the principals of any commercial borrower to obligate themselves personally on the loan.

*Use of estimates in preparation of consolidated financial statements*

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Material estimates that are particularly susceptible to significant change in the near term and involve inherent uncertainties relate to the determination of the ACL on loans, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, valuation of deferred tax assets, and asset impairment judgments, including the ACL on AFS debt securities. These estimates involve a significant degree of complexity and subjectivity and the amount of the change that is reasonably possible, should any of these estimates prove inaccurate, cannot be estimated.

*Presentation of cash flows*

For purposes of presentation in the consolidated statements of cash flows, cash and cash equivalents includes cash on hand, amounts due from banks (including cash items in process of clearing), federal funds sold (generally purchased and sold for one day periods) and overnight deposits.

*Wealth management operations*

Assets held by Union's Wealth Management Group in a fiduciary or agency capacity, other than trust cash on deposit with Union, are not included in these consolidated financial statements because they are not assets of Union or the Company.

*Fair value measurement*

The Company utilizes FASB ASC Topic 820, *Fair Value Measurement*, as guidance for accounting for assets and liabilities carried at fair value. This standard defines fair value as the price that would be received, without adjustment for transaction costs, to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The guidance in FASB ASC Topic 820 establishes a three-level fair value hierarchy, which prioritizes the inputs used in measuring fair value. A financial instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The three levels of the fair value hierarchy are:

• Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

• Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

• Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

*Investment securities*

Debt securities the Company has the positive intent and ability to hold to maturity are classified as HTM and reported at amortized cost. Debt securities not classified as either HTM or trading are classified as AFS and reported at fair value. Debt securities purchased and held primarily for resale in the near future are classified as trading securities and are reported at fair value, with unrealized gains and losses included in earnings. The Company does not generally hold any securities classified as trading.

Accretion of discounts and amortization of premiums arising at acquisition on investment securities are included in income using the effective interest method over the life of the securities to the call date. Unrealized gains and losses on investment

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securities AFS are excluded from earnings and reported in Accumulated OCI, net of tax and reclassification adjustment, as a separate component of stockholders' equity. The specific identification method is used to determine realized gains and losses on sales of AFS or trading securities.

*Allowance for credit losses on AFS debt securities*

AFS debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. For AFS debt securities in an unrealized loss position, management first assesses whether it intends to sell, or if it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value through earnings. For AFS debt securities that do not meet the above criteria, management evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security and the issuer, among other factors. If this assessment indicates that a credit loss exists, management compares the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an ACL is recorded, limited to the amount by which the amortized cost basis of the security exceeds its fair value. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income (loss), net of applicable taxes.

A change in the ACL on AFS debt securities is recorded as expense (credit) within the Credit loss expense on the consolidated statement of income. Losses are charged against the ACL when management believes the uncollectibility of an AFS debt security is confirmed based on the above described analysis. As of December 31, 2025 and 2024, there was no ACL carried on the Company's AFS debt securities. (See Note 4.)

*Loans held for sale*

Loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value in the aggregate. The estimated fair value of loans held for sale is based on current price quotes that determine the amount that the loans could be sold for in the secondary market. Loans transferred from held for sale to portfolio are transferred at the lower of cost or fair value in the aggregate. Sales are normally made without recourse. Gains and losses on the disposition of loans held for sale are determined on the specific identification basis. Net unrealized losses are recognized through a valuation allowance and charged to income.

*Loans*

Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their unpaid principal balances, adjusted for any charge-offs, the ACL, and any deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans.

Loan interest income is accrued daily on outstanding balances. The following accounting policies, related to accrual and nonaccrual loans, apply to all portfolio segments and loan classes, which the Company considers to be the same. The accrual of interest is normally discontinued when management believes, after considering collection efforts and other factors, that the borrower's financial condition is such that collection of interest is doubtful. In general, loans that are 90 days or more past due are placed in nonaccrual, unless there are circumstances that cause management to believe the collection of interest is not doubtful. Generally, any unpaid interest previously accrued on those loans is reversed against current period interest income. A loan may be restored to accrual status when its financial status has significantly improved and there is no principal or interest past due. A loan may also be restored to accrual status if the borrower makes six consecutive monthly payments or the lump sum equivalent. Income on nonaccrual loans is generally not recognized unless a loan is returned to accrual status or after all principal has been collected. Interest payments received on such loans are generally applied as a reduction of the loan principal balance. Delinquency status is determined based on contractual terms for all portfolio segments and loan classes. Loans past due 30 days or more are considered delinquent. Loans are considered in process of foreclosure when a judgment of foreclosure has been issued by the court.

Loan origination fees and direct loan origination costs are deferred and amortized as an adjustment of the related loan's yield using methods that approximate the interest method. The Company generally amortizes these amounts over the estimated average life of the related loans.

The Company evaluates the risk characteristics of its loans based on regulatory call report code categories with segmentation based on the underlying collateral or purpose for certain loan types.

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*Allowance for credit losses on loans*

The ACL on loans is a significant accounting estimate used in the preparation of the Company's consolidated financial statements. The level of the ACL on loans represents management's estimate of expected credit losses over the expected life of the loans at the balance sheet date. The expected life of the loans is based on the contractual term of the loans adjusted for estimated prepayments. The contractual life is calculated based on the maturity date and excludes expected extensions, renewals, and modifications.

The ACL on loans is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the ACL on loans when they are deemed uncollectible. The ACL on loans is comprised of reserves measured on a collective (pool) basis based on a lifetime loss-rate model when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated on an individual basis, generally larger non-accruing commercial loans.

The Company uses the DCF method to estimate expected credit losses for all loan pools. For each of the loan segments, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, curtailments, time to recovery, and loss rates. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical benchmark data.

The Company uses regression analysis of historical internal and peer data to determine suitable loss drivers to utilize when modeling lifetime loss rates. This analysis also determines how expected loss rates will react to forecasted levels of the loss drivers. For all loan pools utilizing the DCF method, management utilizes and forecasts national unemployment as a loss driver.

For all DCF models, management has determined that four quarters represents a reasonable and supportable forecast period and reverts back to a historical loss rate over four quarters on a straight-line basis. Management leverages economic projections from a reputable and independent third party to inform its loss driver forecasts over the four-quarter forecast period.

The combination of adjustments for credit expectations (default and loss) and timing expectations (prepayment, curtailment, and time to recovery) produces an expected cash flow stream at the instrument level that represents the sum of expected losses to determine the estimated ACL on loans.

The ACL on loans evaluation also considers various qualitative factors, including changes in policy and/or underwriting standards, actual or expected changes in economic trends and conditions, changes in the nature and volume of the portfolio, changes in credit and lending staff/administration, problem loan trends, credit risk concentrations, loan review results, changes in the value of underlying collateral for loans, and changes in the regulatory and business environment.

Certain loans are individually evaluated for estimated credit losses, including those greater than $500 thousand that are classified as substandard or doubtful and are on nonaccrual or that have other unique characteristics differing from the segment. Specific reserves are established when appropriate for such loans based on the present value of expected future cash flows of the loan or the estimated realizable value of the collateral, if any.

Management may also adjust its assumptions to account for differences between expected and actual losses from period-to-period. The variability of management's assumptions could alter the ACL on loans materially and impact future results of operations and financial condition. The loss estimation models and methods used to determine the ACL are continually refined and enhanced.

The level of the ACL on loans represents management's estimate of expected credit losses over the expected life of the loans at the balance sheet date. For all loan classes, loan losses are charged against the ACL on loans when management believes the loan balance is uncollectible or in accordance with federal guidelines. Subsequent recoveries, if any, are credited to the ACL on loans.

Risk characteristics relevant to each portfolio segment are as follows:

• *Residential real estate* - Loans in this segment are collateralized by owner-occupied 1-4 family residential real estate, second and vacation homes, 1-4 family investment properties, home equity and second mortgage loans. Repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, could have an effect on the credit quality of this segment.

• *Construction real estate* - Loans in this segment include residential and commercial construction properties, commercial real estate development loans (while in the construction phase of the projects), land and land development loans. Repayment is dependent on the credit quality of the individual borrower and/or the underlying cash flows generated by the properties being constructed. The overall health of the economy, including unemployment rates, housing prices, vacancy rates and material costs, could have an effect on the credit quality of this segment.

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• *Commercial real estate* - Loans in this segment are primarily properties occupied by businesses or income-producing properties. The underlying cash flows generated by the properties may be adversely impacted by a downturn in the economy as evidenced by a general slowdown in business or increased vacancy rates which, in turn, could have an effect on the credit quality of this segment. Management requests business financial statements at least annually and monitors the cash flows of these loans.

• *Commercial* - Loans in this segment are made to businesses and are generally secured by non-real estate assets of the business. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer or business spending, could have an effect on the credit quality of this segment.

• *Consumer* - Loans in this segment are made to individuals for personal expenditures, such as an automobile purchase, and include unsecured loans. Repayment is primarily dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment, could have an effect on the credit quality of this segment.

• *Municipal* - Loans in this segment are made to municipalities located within the Company's service area. Repayment is primarily dependent on taxes or other funds collected by the municipalities. Management considers there to be minimal risk surrounding the credit quality of this segment.

*Mortgage banking*

Residential real estate mortgages are originated by the Company both for its portfolio and for sale into the secondary market. The transfer of these financial assets is accounted for as a sale when control over the asset has been surrendered. Control is deemed to be surrendered when (i) the asset has been isolated from the Company, (ii) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred asset, and (iii) the Company does not maintain effective control over the transferred asset through an agreement to repurchase it before its maturity. The Company records the gain on sale of the financial asset within net gains on sales of loans held for sale, net in the consolidated statements of income.

Servicing assets are recognized as separate assets when servicing rights are acquired through the sale of residential mortgage loans with servicing rights retained. Capitalized servicing rights, which are reported in other assets on the consolidated balance sheets, are initially recorded at fair value and are amortized in proportion to, and over the period of, the estimated future servicing of the underlying mortgages (typically, the contractual life of the mortgage). The amortization of mortgage servicing rights is recorded as a reduction of loan servicing fee income within noninterest income on the consolidated statements of income.

Servicing assets are evaluated for impairment regularly based upon the fair value of the rights as compared to amortized cost. Impairment is determined by stratifying rights by predominant characteristics, such as interest rates and terms. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Impairment of the servicing assets is recognized through a valuation allowance to the extent that fair value is less than the capitalized amount. If it is later determined that all or a portion of the impairment no longer exists, a reduction of the allowance may be recorded as noninterest income up to, but not in excess of, the prior impairment.

Servicing fee income is recorded for fees earned for servicing loans for investors. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income within noninterest income in the consolidated statements of income when earned.

*Premises and equipment*

Premises and equipment are stated at cost, less accumulated depreciation. Depreciation is computed principally by the straight line method over the estimated useful lives of the assets. The cost of assets sold or otherwise disposed of and the related accumulated depreciation are eliminated from the accounts and the resulting gains or losses are reflected in the consolidated statements of income. Maintenance and repairs are charged to current expense as incurred and the costs of major renovations and betterments are capitalized. Construction in progress is stated at cost, which includes the cost of construction and other direct costs attributable to the construction. No provision for depreciation is made on construction in progress until such time as the relevant assets are completed and put into use.

*Accrued interest*

Accrued interest receivable balances are presented in Other assets on the consolidated balance sheets. Accrued interest is excluded from the measurement of the ACL on loans and AFS debt securities. The Company will continue to write-off accrued interest receivable by reversing interest income when a security or loan is placed in nonaccrual, which is generally when payments on a security or loan are 90 days or more past due.

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*Intangible assets*

Intangible assets consist of goodwill amounting to $2.2 million, which represents the excess of the purchase price over the fair value of net assets acquired in the 2011 Branch Acquisition, and is reported in Other assets on the consolidated balance sheets. Goodwill is evaluated for impairment annually, in accordance with current authoritative accounting guidance. Management assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of the Company, in total, is less than its carrying amount. Management is not aware of any such events or circumstances that would cause it to conclude that the fair value of the Company is less than its carrying amount.

*Federal Home Loan Bank stock*

As a member of the FHLB, Union is required to invest in $100 par value stock of the FHLB in an amount to satisfy unpaid principal balances on qualifying loans, plus an amount to satisfy an activity based requirement. The stock is nonmarketable, and is redeemable by the FHLB at par value. Also, there is the possibility of future capital calls by the FHLB on member banks to ensure compliance with its capital plan. FHLB stock is reported in Other assets at its par value of $12.2 million and $11.2 million at December 31, 2025 and 2024, respectively.

*Company-owned life insurance*

COLI represents life insurance on the lives of certain current or former directors or employees who have provided positive consent allowing the Company to be the beneficiary of such policies. The Company utilizes COLI as tax-efficient funding for certain benefit obligations to its employees and directors, including obligations under one of the Company's nonqualified deferred compensation plans. (See Note 15.) The Company is the primary beneficiary of the insurance policies. Increases in the cash value of the policies, as well as any gain on insurance proceeds received, are recorded in Other income, and are not currently subject to income taxes. COLI is recorded at the cash value of the policies, less any applicable cash surrender charges (of which there are currently none). The Company reviews the financial strength of the insurance carriers prior to the purchase of COLI to ensure minimum credit ratings of at least investment grade. The financial strength of the carriers is reviewed annually and COLI with any individual carrier is limited by Company policy to 15% of the sum of Tier 1 Capital and allowable Tier 2 capital.

*Investment in real estate limited partnerships*

The Company has purchased various limited partnership interests in affordable housing partnerships. These partnerships were established to acquire, own and rent residential housing for elderly, low or moderate income residents in Vermont or in New Hampshire. GAAP permits an entity to amortize the initial cost of the investment in proportion to the amount of the tax credits and other tax benefits received and recognize the net investment performance in the statements of income as a component of income tax expense. There were no impairment losses during the year resulting from the forfeiture or ineligibility of tax credits related to qualified affordable housing project investments. (See Note 10.)

*Advertising costs*

The Company expenses advertising costs as incurred and they are included in Other expenses in the Company's consolidated statements of income.

*Earnings per common share*

Basic EPS is calculated based on the weighted average number of shares of common stock issued during the period, including DRIP shares issuable upon reinvestment of dividends, retroactively adjusted for stock splits and stock dividends, if any, and reduced for shares held in treasury. Diluted EPS is calculated after adjusting the denominator of the basic EPS calculation for the effect of the potential issuance of dilutive common shares under outstanding equity compensation grants during the period. (See Note 18.)

*Income taxes*

The Company prepares its federal income tax return on a consolidated basis. Federal income taxes are allocated to members of the consolidated group based on taxable income. The Company recognizes income taxes under the asset and liability method. This involves estimating the Company's actual current tax exposure as well as assessing temporary differences resulting from

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differing treatment of items, such as timing of the deduction of expenses, for tax and GAAP purposes. These differences result in deferred tax assets and liabilities, which are netted and included in Other assets. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company must also assess the likelihood that any deferred tax assets will be recovered from future taxable income and to the extent that recovery is not likely, a valuation allowance must be established. A change in enacted federal income tax rates for future periods requires revaluation of deferred taxes. (See Note 14.)

*Off-balance-sheet financial instruments*

In the ordinary course of business, the Company is a party to off-balance-sheet financial instruments consisting of commitments to originate credit, unused lines of credit including commitments under credit card arrangements, commitments to purchase investment securities, commitments to invest in real estate limited partnerships, commercial letters of credit, standby letters of credit and risk-sharing commitments on certain sold loans. (See Notes 19 and 20.) Such financial instruments are recorded in the financial statements when they become fixed and certain.

*Allowance for credit losses on off-balance sheet credit exposures*

The ACL on off-balance sheet credit exposures is a component of Accrued interest and other liabilities on the Company's consolidated balance sheets and represents the estimate of probable credit losses inherent in unfunded commitments to extend credit as of the balance sheet date. Unfunded commitments to extend credit include unused portions of lines of credit, commitments to originate loans and standby and commercial letters of credit. The process used to determine the ACL for these exposures is consistent with the process for determining the ACL on loans, as adjusted for estimated funding probabilities. A charge or credit to Credit loss expense on the consolidated statements of income is made to account for the change in the ACL on off-balance sheet exposures between reporting periods.

*Comprehensive income (loss)*

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income or loss. Certain changes in assets and liabilities, such as the after tax effect of unrealized gains and losses on debt securities AFS that do not exhibit credit related impairment, are not reflected in the consolidated statements of income. The cumulative effect of such items, net of tax effect, is reported as a separate component of the equity section of the consolidated balance sheets (Accumulated OCI) (See Note 25). OCI, along with net income, comprises the Company's total comprehensive income or loss.

*Transfers of financial assets*

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

*Stock based compensation*

Under the Company's 2014 Equity Plan, as amended, 150,000 shares of the Company's common stock were authorized for equity awards of incentive stock options, nonqualified stock options, restricted stock and restricted stock units to eligible officers and (except for awards of incentive stock options) nonemployee directors. The 2014 Equity Plan has been replaced with the substantially similar 2024 Equity Plan, pursuant to which 250,000 shares of common stock have been reserved for issuance of equity compensation awards to eligible officers and nonemployee directors. Stock based compensation awards are measured at the fair value of the stock at the grant date and recognized as expense over the period in which they vest. (See Note 16.)

*Segment reporting*

Operating segments are the components of an entity for which separate financial information is available and evaluated regularly by management in order to allocate resources and assess performance. Management assesses consolidated financial results to make operating and strategic decisions, assess performance, and allocate resources. Therefore, the Company has determined that its business is conducted in one reportable segment and represents the consolidated financial statements of the Company.

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The Company's reportable segment is determined by management based upon information provided about the Company's products and services offered, primarily banking operations. The segment is also distinguished by the level of information provided by management, who uses such information to review performance of various components of the business, which are then aggregated if operating performance, products/services, and customers are similar. Management will evaluate the financial performance of the Company's business components such as by evaluating revenue streams, significant expenses, and budget to actual results in assessing the Company's segment and in the determination of allocating resources. Management uses revenue streams to evaluate product pricing and significant expenses to assess performance and evaluate return on assets. Management uses consolidated net income to benchmark the Company against its competitors. The benchmarking analysis coupled with monitoring of budget to actual results are used in assessing performance and in establishing compensation. Loans, investments, and deposit product service fees provide the revenues in the banking operation. Interest expense, credit loss expense, and salaries and employee benefits, as reported on the consolidated statements of income, provide the significant expenses in the banking operation. All operations are domestic.

Accounting policies for segments are the same as those described herein. Segment performance is evaluated using consolidated net income. The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets. Noncash items, such as depreciation and amortization, as well as expenditures for premises and equipment, are reported on the consolidated statements of cash flows.

*Recent accounting pronouncements*

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740), *Improvements to Income Tax Disclosures.* This ASU most notably requires public business entities, such as the Company, to provide enhanced disclosures on the amount of income taxes paid, disaggregated by type and jurisdiction. The ASU is effective for the Company for 2025 and subsequent annual periods, including interim periods within those annual periods. The Company adopted this ASU on January 1, 2025 and it did not have a material impact on the Company's consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03, *Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses*. Under ASU No. 2024-03, public business entities, such as the Company, will be required to disclose in the notes to their financial statements disaggregated information about certain costs and expenses in both annual and interim filings. ASU No. 2024-03 is effective for the Company for annual reporting periods beginning after December 15, 2026, including interim periods within annual reporting periods beginning after December 15, 2027. It is not expected to have a material impact on the Company's consolidated financial statements.

In September 2025, the FASB issued ASU No. 2025-06, *Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)*. This ASU updated guidance on accounting for internal-use software. ASU No. 2025-06 is effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted. The amendments modernize guidance to consider different methods of software development by updating the requirements for capitalization of software costs. The Company is currently assessing the updated guidance; however, it is not expected to have a material impact on the Company's consolidated financial statements.

**Note 2. Restrictions on Cash and Cash Equivalents**

The nature of the Company's business requires that it maintain amounts due from correspondent banks, which at times, may exceed federally insured limits. The balances in these accounts at December 31, were as follows:

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| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Noninterest bearing accounts | $413 | $500 |
| Federal Reserve Bank of Boston | 7498 | 10624 |
| FHLB of Boston | 447 | 347 |

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No losses have been experienced in these accounts and the Company believes it is not exposed to any significant risk with respect to the accounts.

The Company had no reserve requirement and was not required to maintain contracted clearing balances at December 31, 2025 or 2024. Balances at the Federal Reserve Bank of Boston and a portion of the funds at the FHLB are classified as overnight deposits as they earn interest.

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**Note 3. Interest Bearing Deposits in Banks**

Interest bearing deposits in banks consist of certificates of deposit purchased from various financial institutions. Deposits at each institution are generally maintained at or below the FDIC insurable limit of $250 thousand. As of December 31, 2025, the Company held $9.0 million in certificates of deposit with rates ranging from 1.00% to 4.46% and various maturity dates through 2027, with $8.5 million scheduled to mature in 2026. There were $9.5 million in certificates at December 31, 2024.

**Note 4. Investment Securities**

Debt securities AFS as of the balance sheet dates consisted of the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **December 31, 2025** | **Amortized<br>Cost** | **Gross<br>Unrealized<br>Gains** | **Gross<br>Unrealized<br>Losses** | **Fair<br>Value** |
|  | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. Government-sponsored enterprises | $28143 | $— | $(2049) | $26094 |
| &nbsp;&nbsp;&nbsp;&nbsp;Agency mortgage-backed | 264317 | 274 | (24027) | 240564 |
| &nbsp;&nbsp;&nbsp;&nbsp;State and political subdivisions | 55434 | 10 | (7224) | 48220 |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate | 11500 |  | (123) | 11377 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $359394 | $284 | $(33423) | $326255 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **December 31, 2024** | **Amortized<br>Cost** | **Gross<br>Unrealized<br>Gains** | **Gross<br>Unrealized<br>Losses** | **Fair<br>Value** |
|  | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. Government-sponsored enterprises | $29664 | $— | $(3449) | $26215 |
| &nbsp;&nbsp;&nbsp;&nbsp;Agency mortgage-backed | 206170 |  | (32895) | 173275 |
| &nbsp;&nbsp;&nbsp;&nbsp;State and political subdivisions | 55737 | 14 | (7201) | 48550 |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate | 2500 | 2 | (38) | 2464 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $294071 | $16 | $(43583) | $250504 |

---

There were no investment securities classified as HTM or trading at December 31, 2025 or 2024. Investment securities AFS with a fair value of $87.8 million and $96.0 million were pledged as collateral for FHLB borrowings and other credit subject to collateralization, for public unit deposits or for other purposes as required or permitted by law at December 31, 2025 and 2024, respectively. Investment securities AFS pledged as collateral for the discount window at the FRB consisted of mortgage-backed securities with a fair value of $9.4 million and $9.7 million at December 31, 2025 and 2024, respectively.

Information pertaining to AFS debt securities with gross unrealized losses, for which an ACL has not been recorded, as of the balance sheet dates, aggregated by investment category and length of time that individual securities have been in a continuous loss position, is as follows:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **December 31, 2025** | **Less Than 12 Months** | **Less Than 12 Months** | **Less Than 12 Months** | **12 Months and Over** | **12 Months and Over** | **12 Months and Over** | **Total** | **Total** | **Total** |
| | **Number of Securities** | **Fair<br>Value** | **Gross<br>Unrealized<br>Loss** | **Number of Securities** | **Fair<br>Value** | **Gross<br>Unrealized<br>Loss** | **Number of Securities** | **Fair<br>Value** | **Gross<br>Unrealized<br>Loss** |
|  |  | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| &nbsp;&nbsp;&nbsp;U.S. Government-<br> sponsored enterprises |  | $— | $— | 23 | $26052 | $(2049) | 23 | $26052 | $(2049) |
| &nbsp;&nbsp;&nbsp;Agency mortgage-backed | 18 | 80477 | (487) | 92 | 139315 | (23540) | 110 | 219792 | (24027) |
| &nbsp;&nbsp;&nbsp;State and political<br> subdivisions | 1 | 1554 | (18) | 52 | 46157 | (7206) | 53 | 47711 | (7224) |
| &nbsp;&nbsp;&nbsp;Corporate | 2 | 2884 | (116) | 2 | 993 | (7) | 4 | 3877 | (123) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 21 | $84915 | $(621) | 169 | $212517 | $(32802) | 190 | $297432 | $(33423) |

---

------

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **December 31, 2024** | **Less Than 12 Months** | **Less Than 12 Months** | **Less Than 12 Months** | **12 Months and Over** | **12 Months and Over** | **12 Months and Over** | **Total** | **Total** | **Total** |
| | **Number of Securities** | **Fair<br>Value** | **Gross<br>Unrealized<br>Loss** | **Number of Securities** | **Fair<br>Value** | **Gross<br>Unrealized<br>Loss** | **Number of Securities** | **Fair<br>Value** | **Gross<br>Unrealized<br>Loss** |
|  |  | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| &nbsp;&nbsp;&nbsp;U.S. Government-<br> sponsored enterprises | 1 | $2012 | $(69) | 26 | $24203 | $(3380) | 27 | $26215 | $(3449) |
| &nbsp;&nbsp;&nbsp;Agency mortgage-backed | 11 | 43367 | (784) | 87 | 129908 | (32111) | 98 | 173275 | (32895) |
| &nbsp;&nbsp;&nbsp;State and political<br> subdivisions | 1 | 1564 | (8) | 52 | 46470 | (7193) | 53 | 48034 | (7201) |
| &nbsp;&nbsp;&nbsp;Corporate | 1 | 499 | (1) | 3 | 1463 | (37) | 4 | 1962 | (38) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 14 | $47442 | $(862) | 168 | $202044 | $(42721) | 182 | $249486 | $(43583) |

---

AFS debt securities in unrealized loss positions are evaluated for impairment related to credit losses and an ACL is recorded for any credit loss identified. No ACL for AFS debt securities was recorded at December 31, 2025 or December 31, 2024. Accrued interest receivable on AFS debt securities totaled $1.5 million and $1.2 million at December 31, 2025 and 2024, respectively, and is excluded from the estimate of credit losses.

There were no dispositions of AFS debt securities for the year ended December 31, 2025. The following table presents the proceeds from sales resulting in gross realized gains and gross realized losses from the disposition of AFS debt securities for the year ended December 31, 2024:

---

| | |
|:---|:---|
| | **2024** |
| | (Dollars in thousands) |
| Proceeds from sales | $37218 |
| Gross gains | 218 |
| Gross losses | (1511) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net losses on sales of investment securities AFS | $(1293) |

---

The Company completed a balance sheet repositioning related to its investment securities portfolio during the three months ended September 30, 2024. The sale of lower-yielding AFS debt securities with a book value of $38.5 million was executed and recorded in August of 2024. The proceeds from the sale of these securities were used to purchase $26.0 million of AFS debt securities at higher yields to improve income going forward, and the remainder was used to fund loan growth.

The amortized cost and estimated fair value of AFS debt securities by contractual scheduled maturity as of December 31, 2025, were as follows:

---

| | | |
|:---|:---|:---|
| | **Amortized<br>Cost** | **Fair<br>Value** |
| **Available-for-sale** | (Dollars in thousands) | (Dollars in thousands) |
| &nbsp;&nbsp;&nbsp;&nbsp;Due in one year or less | $1014 | $1020 |
| &nbsp;&nbsp;&nbsp;&nbsp;Due from one to five years | 13293 | 12602 |
| &nbsp;&nbsp;&nbsp;&nbsp;Due from five to ten years | 11825 | 10928 |
| &nbsp;&nbsp;&nbsp;&nbsp;Due after ten years | 68945 | 61141 |
|  | 95077 | 85691 |
| &nbsp;&nbsp;&nbsp;&nbsp;Agency mortgage-backed | 264317 | 240564 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total debt securities available-for-sale | $359394 | $326255 |

---

Actual maturities may differ for certain AFS debt securities that may be called by the issuer prior to the contractual maturity. Actual maturities may differ from contractual maturities on agency mortgage-backed securities because the mortgages underlying the securities may be prepaid, usually without any penalties. Therefore, these agency mortgage-backed securities are shown separately and not included in the contractual maturity categories in the above maturity summary.

------

**Note 5. Loans Held for Sale and Loan Servicing**

At December 31, 2025 and 2024, loans held for sale consisted of conventional residential mortgages originated for subsequent sale, with an estimated fair value in excess of their carrying value. Therefore, no valuation reserve was necessary for loans held for sale as of the balance sheet dates.

Commercial and residential mortgage loans serviced for others are not included in the accompanying balance sheets. The unpaid principal balance of commercial and residential mortgage loans serviced for others was $773.0 million and $722.1 million at December 31, 2025 and 2024, respectively.

Loans sold consisted of the following during the years ended December 31:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2024** | **2024** |
| | **Loans Sold** | **Net Gains on Sale** | **Loans Sold** | **Net Gains on Sale** |
| | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Residential loans | $143527 | $2148 | $113458 | $1697 |

---

There were no obligations to repurchase loans for any amount at December 31, 2025, but there were contractual risk sharing commitments on certain sold loans totaling $1.3 million as of such date. (See Note 20.)

The Company generally retains the servicing rights on loans sold. The unamortized balance of servicing rights on loans sold with servicing retained was $1.8 million and $1.7 million at December 31, 2025 and 2024, respectively, and is included in Other assets. The estimated fair value of these servicing rights was in excess of their carrying value at December 31, 2025 and 2024, and therefore no impairment reserve was necessary. The capitalization and amortization of MSRs is included in Other expenses.

The following table presents the capitalization and amortization of loan servicing rights during the periods indicated:

---

| | | |
|:---|:---|:---|
| | **For The Years Ended December 31,** | **For The Years Ended December 31,** |
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Capitalization of servicing rights | $962 | $762 |
| Amortization of servicing rights | 834 | 777 |
| &nbsp;&nbsp;&nbsp;Net capitalization (amortization) of servicing rights | $128 | $(15) |

---

------

**Note 6. Loans**

The composition of Net loans at December 31, by regulatory call report code segmentation based on underlying collateral or purpose for certain loan types, was as follows:

---

| | | |
|:---|:---|:---|
| | **December 31,<br>2025** | **December 31,<br>2024** |
| Residential real estate | (Dollars in thousands) | (Dollars in thousands) |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-revolving residential real estate | $445199 | $445425 |
| &nbsp;&nbsp;&nbsp;&nbsp;Revolving residential real estate | 29075 | 21884 |
| Construction real estate |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial construction real estate | 51347 | 54985 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential construction real estate | 52478 | 51202 |
| Commercial real estate |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-residential commercial real estate | 345900 | 330010 |
| &nbsp;&nbsp;&nbsp;&nbsp;Multi-family residential real estate | 99269 | 104328 |
| Commercial | 31159 | 35175 |
| Consumer | 2414 | 2523 |
| Municipal | 117893 | 110204 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross loans | 1174734 | 1155736 |
| Allowance for credit losses on loans | (8407) | (7680) |
| Net deferred loan costs | 2066 | 2162 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loans | $1168393 | $1150218 |

---

Qualifying residential first mortgage loans and certain commercial real estate loans with a carrying value of $492.9 million and $394.5 million were pledged as collateral for borrowings from the FHLB under a blanket lien at December 31, 2025 and 2024, respectively.

Accrued interest receivable on loans totaled $5.5 million and $5.2 million at December 31, 2025 and December 31, 2024, respectively, and is excluded from the estimate of credit losses described in Note 7.

------

**Note 7. Allowance for Credit Losses on Loans and Off-Balance Sheet Credit Exposures**

Changes in the ACL on loans, by class of loans, for the years ended December 31, 2025 and 2024 were as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **December 31, 2025** | **Balance, December 31, 2024** | **Charge-Offs** | **Recoveries** | **Credit Loss Expense (Benefit)** | **Balance,<br>December 31, 2025** |
|  | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Non-revolving residential real estate | $3212 | $— | $16 | $(315) | $2913 |
| Revolving residential real estate | 280 |  |  | (17) | 263 |
| &nbsp;&nbsp;Residential real estate | 3492 |  | 16 | (332) | 3176 |
| Commercial construction real estate | 651 |  |  | 3 | 654 |
| Residential construction real estate | 102 |  |  | 84 | 186 |
| &nbsp;&nbsp;Construction real estate | 753 |  |  | 87 | 840 |
| Non-residential commercial real estate | 2766 |  |  | 989 | 3755 |
| Multi-family residential real estate | 212 |  |  | 27 | 239 |
| &nbsp;&nbsp;Commercial real estate | 2978 |  |  | 1016 | 3994 |
| Commercial | 377 | (41) | 2 | (46) | 292 |
| Consumer | 6 | (6) | 1 | 4 | 5 |
| Municipal | 74 |  |  | 26 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $7680 | $(47) | $19 | $755 | $8407 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **December 31, 2024** | **Balance, December 31, 2023** | **Charge-Offs** | **Recoveries** | **Credit Loss Expense (Benefit)** | **Balance, December 31, 2024** |
|  | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Non-revolving residential real estate | $2361 | $— | $24 | $827 | $3212 |
| Revolving residential real estate | 159 |  |  | 121 | 280 |
| &nbsp;&nbsp;Residential real estate | 2520 |  | 24 | 948 | 3492 |
| Commercial construction real estate | 1035 |  |  | (384) | 651 |
| Residential construction real estate | 163 |  |  | (61) | 102 |
| &nbsp;&nbsp;Construction real estate | 1198 |  |  | (445) | 753 |
| Non-residential commercial real estate | 2182 |  |  | 584 | 2766 |
| Multi-family residential real estate | 244 |  |  | (32) | 212 |
| &nbsp;&nbsp;Commercial real estate | 2426 |  |  | 552 | 2978 |
| Commercial | 352 |  | 1 | 24 | 377 |
| Consumer | 5 | (3) |  | 4 | 6 |
| Municipal | 65 |  |  | 9 | 74 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $6566 | $(3) | $25 | $1092 | $7680 |

---

------

The Company's ACL on off-balance sheet credit exposures is recognized as a liability within Accrued interest and other liabilities on the consolidated balance sheets, with adjustments to the ACL recognized in Credit loss expense (benefit) in the consolidated statements of income. The Company's activity in the ACL on off-balance sheet credit exposures for the years ended December 31, 2025 and 2024 was as follows:

---

| | | |
|:---|:---|:---|
| | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
| | **2025** | **2024** |
| **ACL on Off-Balance Sheet Credit Exposures** | (Dollars in thousands) | (Dollars in thousands) |
| Balance at beginning of period | $1071 | $1233 |
| Credit loss expense (benefit) | 19 | (162) |
| Balance at end of period | $1090 | $1071 |

---

Risk and collateral ratings are assigned to loans and are subject to ongoing monitoring by lending and credit personnel, with such ratings updated annually or more frequently if warranted. The following is an overview of the Company's loan rating system:

**<u>1-3 Rating - Pass</u>**

Risk-rating grades "1" through "3" comprise those loans ranging from those with lower than average credit risk, defined as borrowers with high liquidity, excellent financial condition, strong management, favorable industry trends or loans secured by highly liquid assets, through those with marginal credit risk, defined as borrowers that, while creditworthy, exhibit some characteristics requiring special attention by the account officer.

**<u>4-4.5 Rating - Satisfactory/Monitor</u>**

Borrowers exhibit potential credit weaknesses or downward trends warranting management's attention. While potentially weak, these borrowers are currently marginally acceptable; no loss of principal or interest is envisioned. When warranted, these credits may be monitored on the watch list.

**<u>5-7 Rating - Substandard</u>**

Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt. The loan may be inadequately protected by the net worth and paying capacity of the obligor and/or the underlying collateral is inadequate.

The following table summarizes the Company's loans by year of origination and by loan ratings applied by management to the Company's loans by segment as well as gross charge-offs by year of origination and segment as of and for the year ended December 31, 2025:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **December 31, 2025** | **2025** | **2024** | **2023** | **2022** | **2021** | **Prior** | **Revolving** | **Total** |
|  | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| **Non-revolving residential real estate** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $52182 | $67718 | $53671 | $90305 | $71858 | $69511 | $— | $405245 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor | 5955 | 6865 | 5160 | 9346 | 5114 | 6648 |  | 39088 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  | 629 |  | 237 |  | 866 |
| **Total non-revolving residential real estate** | 58137 | 74583 | 58831 | 100280 | 76972 | 76396 |  | 445199 |
| Gross charge-offs for the year ended |  |  |  |  |  |  |  |  |
| **Revolving residential real estate** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass |  |  |  |  |  |  | 27284 | 27284 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor |  |  |  |  |  |  | 1771 | 1771 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  |  | 20 | 20 |
| **Total revolving residential real estate** |  |  |  |  |  |  | 29075 | 29075 |
| Gross charge-offs for the year ended |  |  |  |  |  |  |  |  |
| **Commercial construction real estate** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | 5464 | 6170 | 1265 | 1493 | 1108 | 887 |  | 16387 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor | 3999 | 29181 | 959 |  | 739 | 79 |  | 34957 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  | 3 |  | 3 |
| **Total commercial construction real estate** | 9463 | 35351 | 2224 | 1493 | 1847 | 969 |  | 51347 |
| Gross charge-offs for the year ended |  |  |  |  |  |  |  |  |

---

------

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **December 31, 2025** | **2025** | **2024** | **2023** | **2022** | **2021** | **Prior** | **Revolving** | **Total** |
|  | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| **Residential construction real estate** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | 32317 | 11714 | 989 | 783 |  |  |  | 45803 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor | 1714 | 1591 |  |  | 3357 | 13 |  | 6675 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  |  |  |  |
| **Total Residential construction real estate** | 34031 | 13305 | 989 | 783 | 3357 | 13 |  | 52478 |
| Gross charge-offs for the year ended |  |  |  |  |  |  |  |  |
| **Non-residential commercial real estate** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | 8114 | 4897 | 10954 | 51325 | 27871 | 63526 | 4729 | 171416 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor | 10839 | 60589 | 14690 | 12398 | 15742 | 27512 | 17049 | 158819 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  | 12933 |  |  | 2732 |  | 15665 |
| **Total non-residential commercial real estate** | 18953 | 65486 | 38577 | 63723 | 43613 | 93770 | 21778 | 345900 |
| Gross charge-offs for the year ended |  |  |  |  |  |  |  |  |
| **Multi-family residential real estate** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | 846 | 449 | 39 | 4025 | 4709 | 44467 |  | 54535 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor | 2202 | 1763 | 5665 | 12857 | 14801 | 7208 |  | 44496 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  | 238 |  | 238 |
| **Total multi-family residential real estate** | 3048 | 2212 | 5704 | 16882 | 19510 | 51913 |  | 99269 |
| Gross charge-offs for the year ended |  |  |  |  |  |  |  |  |
| **Commercial** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | 2104 | 2115 | 2015 | 1653 | 990 | 4539 | 4879 | 18295 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor | 885 | 2153 | 1554 | 2093 | 1670 | 3771 | 538 | 12664 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  | 200 |  | 200 |
| **Total commercial** | 2989 | 4268 | 3569 | 3746 | 2660 | 8510 | 5417 | 31159 |
| Gross charge-offs for the year ended | 41 |  |  |  |  |  |  | 41 |
| **Consumer** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | 1152 | 564 | 434 | 40 | 8 | 192 | 24 | 2414 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  |  |  |  |
| **Total consumer** | 1152 | 564 | 434 | 40 | 8 | 192 | 24 | 2414 |
| Gross charge-offs for the year ended |  | 1 | 4 | 1 |  |  |  | 6 |
| **Municipal** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | 94572 | 8416 | 9277 | 384 | 311 | 3397 |  | 116357 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor | 1536 |  |  |  |  |  |  | 1536 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  |  |  |  |
| **Total municipal** | 96108 | 8416 | 9277 | 384 | 311 | 3397 |  | 117893 |
| Gross charge-offs for the year ended |  |  |  |  |  |  |  |  |
| **Total Loans** | $223881 | $204185 | $119605 | $187331 | $148278 | $235160 | $56294 | $1174734 |
| Gross charge-offs for the year ended | $41 | $1 | $4 | $1 | $— | $— | $— | $47 |

---

------

The following table summarizes the Company's loans by year of origination and by loan ratings applied by management to the Company's loans by segment as well as gross charge-offs by year of origination and segment as of and for the year ended December 31, 2024:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **December 31, 2024** | **2024** | **2023** | **2022** | **2021** | **2020** | **Prior** | **Revolving** | **Total** |
|  | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| **Non-revolving residential real estate** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $83371 | $70515 | $100168 | $79234 | $27326 | $51661 | $— | $412275 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor | 5381 | 5065 | 10744 | 3642 | 2450 | 5627 |  | 32909 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  | 158 | 83 |  | 241 |
| **Total non-revolving residential real estate** | 88752 | 75580 | 110912 | 82876 | 29934 | 57371 |  | 445425 |
| Gross charge-offs for the year ended |  |  |  |  |  |  |  |  |
| **Revolving residential real estate** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass |  |  |  |  |  |  | 20516 | 20516 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor |  |  |  |  |  |  | 1344 | 1344 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  |  | 24 | 24 |
| **Total revolving residential real estate** |  |  |  |  |  |  | 21884 | 21884 |
| Gross charge-offs for the year ended |  |  |  |  |  |  |  |  |
| **Commercial construction real estate** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | 8968 | 2216 | 4514 | 1460 | 559 | 714 |  | 18431 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor | 13524 | 15276 | 1760 | 5800 | 53 | 141 |  | 36554 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  |  |  |  |
| **Total commercial construction real estate** | 22492 | 17492 | 6274 | 7260 | 612 | 855 |  | 54985 |
| Gross charge-offs for the year ended |  |  |  |  |  |  |  |  |
| **Residential construction real estate** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | 34189 | 8725 | 960 |  |  |  |  | 43874 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor | 2199 | 1547 | 136 | 2307 | 1139 |  |  | 7328 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  |  |  |  |
| **Total residential construction real estate** | 36388 | 10272 | 1096 | 2307 | 1139 |  |  | 51202 |
| Gross charge-offs for the year ended |  |  |  |  |  |  |  |  |
| **Non-residential commercial real estate** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | 3427 | 10481 | 49645 | 31969 | 17227 | 64073 | 5431 | 182253 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor | 48068 | 17365 | 15874 | 13967 | 5297 | 27610 | 14954 | 143135 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  | 1606 | 2969 | 47 | 4622 |
| **Total non-residential commercial real estate** | 51495 | 27846 | 65519 | 45936 | 24130 | 94652 | 20432 | 330010 |
| Gross charge-offs for the year ended |  |  |  |  |  |  |  |  |
| **Multi-family residential real estate** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | 1720 | 283 | 4329 | 10115 | 1853 | 31787 |  | 50087 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor | 563 | 2484 | 14980 | 10291 | 5535 | 20132 |  | 53985 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  | 256 |  | 256 |
| **Total multi-family residential real estate** | 2283 | 2767 | 19309 | 20406 | 7388 | 52175 |  | 104328 |
| Gross charge-offs for the year ended |  |  |  |  |  |  |  |  |
| **Commercial** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | 3224 | 2583 | 4417 | 1517 | 370 | 7492 | 3483 | 23086 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor | 1958 | 2438 | 899 | 1977 | 203 | 2595 | 1295 | 11365 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  |  | 724 | 724 |
| **Total commercial** | 5182 | 5021 | 5316 | 3494 | 573 | 10087 | 5502 | 35175 |
| Gross charge-offs for the year ended |  |  |  |  |  |  |  |  |

---

------

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **December 31, 2024** | **2024** | **2023** | **2022** | **2021** | **2020** | **Prior** | **Revolving** | **Total** |
|  | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| **Consumer** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | 1253 | 777 | 105 | 53 | 66 | 188 | 24 | 2466 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor | 57 |  |  |  |  |  |  | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  |  |  |  |
| **Total consumer** | 1310 | 777 | 105 | 53 | 66 | 188 | 24 | 2523 |
| Gross charge-offs for the year ended | 2 |  |  | 1 |  |  |  | 3 |
| **Municipal** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | 93280 | 10482 | 1363 | 606 | 1272 | 3201 |  | 110204 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satisfactory/Monitor |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  |  |  |  |
| **Total municipal** | 93280 | 10482 | 1363 | 606 | 1272 | 3201 |  | 110204 |
| Gross charge-offs for the year ended |  |  |  |  |  |  |  |  |
| **Total Loans** | $301182 | $150237 | $209894 | $162938 | $65114 | $218529 | $47842 | $1155736 |
| Gross charge-offs for the year ended | $2 | $— | $— | $1 | $— | $— | $— | $3 |

---

A summary of current and past due loans as of December 31, 2025 and December 31, 2024 follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **December 31, 2025** | **30-59 Days** | **60-89 Days** | **90 Days and Over** | **Total Past Due** | **Current** | **Total** |
|  | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Residential real estate |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-revolving residential real estate | $2984 | $479 | $867 | $4330 | $440869 | $445199 |
| &nbsp;&nbsp;&nbsp;&nbsp;Revolving residential real estate | 10 |  |  | 10 | 29065 | 29075 |
| Construction real estate |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial construction real estate | 74 |  | 3 | 77 | 51270 | 51347 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential construction real estate |  |  |  |  | 52478 | 52478 |
| Commercial real estate |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-residential commercial real estate | 233 |  |  | 233 | 345667 | 345900 |
| &nbsp;&nbsp;&nbsp;&nbsp;Multi-family residential real estate |  |  |  |  | 99269 | 99269 |
| Commercial |  |  |  |  | 31159 | 31159 |
| Consumer |  |  |  |  | 2414 | 2414 |
| Municipal |  |  |  |  | 117893 | 117893 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $3301 | $479 | $870 | $4650 | $1170084 | $1174734 |

---

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **December 31, 2024** | **30-59 Days** | **60-89 Days** | **90 Days and Over** | **Total Past Due** | **Current** | **Total** |
|  | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Residential real estate |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-revolving residential real estate | $1560 | $1158 | $241 | $2959 | $442466 | $445425 |
| &nbsp;&nbsp;&nbsp;&nbsp;Revolving residential real estate |  |  |  |  | 21884 | 21884 |
| Construction real estate |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial construction real estate |  |  |  |  | 54985 | 54985 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential construction real estate |  |  |  |  | 51202 | 51202 |
| Commercial real estate |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-residential commercial real estate | 355 | 46 |  | 401 | 329609 | 330010 |
| &nbsp;&nbsp;&nbsp;&nbsp;Multi-family residential real estate |  |  |  |  | 104328 | 104328 |
| Commercial | 45 |  |  | 45 | 35130 | 35175 |
| Consumer |  | 4 |  | 4 | 2519 | 2523 |
| Municipal |  |  |  |  | 110204 | 110204 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $1960 | $1208 | $241 | $3409 | $1152327 | $1155736 |

---

A summary of nonaccrual loans as of December 31, 2025 and 2024 follows:

---

| | | | |
|:---|:---|:---|:---|
| **December 31, 2025** | **Nonaccrual** | **Nonaccrual With No Allowance for Credit Losses** | **90 Days and Over and Accruing** |
| Residential real estate | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-revolving residential real estate | $629 | $629 | $238 |
| Construction real estate |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial construction real estate |  |  | 3 |
| Commercial real estate |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-residential commercial real estate | 12933 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $13562 | $629 | $241 |

---

---

| | | | |
|:---|:---|:---|:---|
| **December 31, 2024** | **Nonaccrual** | **Nonaccrual With No Allowance for Credit Losses** | **90 Days and Over and Accruing** |
| Residential real estate | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-revolving residential real estate | $— | $— | $241 |
| Commercial real estate |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-residential commercial real estate | 1652 | 1652 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $1652 | $1652 | $241 |

---

There were no loans in process of foreclosure at December 31, 2025 and one residential real estate loan totaling $8 thousand in process of foreclosure at December 31, 2024. Aggregate interest on nonaccrual loans not recognized was $791 thousand as of December 31, 2025 and $235 thousand as of December 31, 2024.

Loans that do not share risk characteristics are evaluated on an individual basis. Loans that are individually evaluated and collateral dependent represent loans that the Company has determined foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loan to be provided substantially through the sale of the collateral. For these loans, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan at the measurement date.

------

The following table presents collateral dependent loans to borrowers experiencing financial difficulty by loan class and collateral type as of the balance sheet dates:

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| | **Real Estate** | **Real Estate** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Residential real estate | $629 | $— |
| Non-residential commercial real estate | 15492 | 4246 |
| Commercial |  | 500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $16121 | $4746 |

---

Collateral dependent loans are loans for which the repayment is expected to be provided substantially by the underlying collateral and there are no other available and reliable sources of repayment.

Occasionally, the Company modifies loans to borrowers experiencing financial difficulty by providing interest rate reductions, term extensions, payment deferrals or principal forgiveness. When principal forgiveness is provided, the amount of forgiveness is charged off against the ACL on loans. The following tables summarize loan modifications to borrowers experiencing financial difficulty by loan class, type of modification and the financial effect of the modifications as of and for the years ended December 31, 2025 and 2024:

---

| | | | |
|:---|:---|:---|:---|
| | **Payment Delay and Term Extension** | **Payment Delay and Term Extension** | **Payment Delay and Term Extension** |
| | **December 31, 2025** | **December 31, 2025** | |
| | **Amortized Cost Basis** | **% of Loan Class** | **Financial Effect** |
| | (Dollars in thousands) | (Dollars in thousands) | |
| Non-residential commercial real estate | $12933 | 3.74% | Modification extended loan draw period 6 months, extended interest only payments by 18 months and extended maturity date by 18 months. |

---

---

| | | | |
|:---|:---|:---|:---|
| | **Payment Delay** | **Payment Delay** | **Payment Delay** |
| | **December 31, 2024** | **December 31, 2024** | |
| | **Amortized Cost Basis** | **% of Loan Class** | **Financial Effect** |
| | (Dollars in thousands) | (Dollars in thousands) | |
| Non-revolving residential real estate | $14 | —% | Modification deferred 3 months of principal and interest payments. |
| Non-residential commercial real estate | 2594 | 0.79% | Modification allowed for 6 months of interest only payments with remaining balances re-amortized to maturity. |
| Non-residential commercial real estate | 257 | 0.08% | Modification deferred 3 months of principal and interest payments. |
| Commercial | 45 | 0.13% | Modification deferred 3 months of principal and interest payments. |

---

The following tables present the performance of loans as of December 31, 2025 and 2024 that had been modified in the last twelve months:

---

| | | | |
|:---|:---|:---|:---|
| **December 31, 2025** | **Current** | **Past Due<br>30-89 Days** | **Past Due 90 Days and Over** |
|  | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Non-residential commercial real estate | $12933 | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $12933 | $— | $— |

---

------

---

| | | | |
|:---|:---|:---|:---|
| **December 31, 2024** | **Current** | **Past Due<br>30-89 Days** | **Past Due 90 Days and Over** |
|  | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Non-revolving residential real estate | $14 | $— | $— |
| Non-residential commercial real estate | 2851 |  |  |
| Commercial |  | 45 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $2865 | $45 | $— |

---

There were no loans to borrowers experiencing financial difficulty that were modified within the previous twelve months that had subsequently defaulted during the years ended December 31, 2025 and 2024. Loans are considered defaulted at 90 days past due.

At December 31, 2025 and 2024, the Company was not committed to lend any additional funds to borrowers experiencing financial difficulty for which the Company modified the terms of the loans in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension.

**Note 8. Premises and Equipment**

The major classes of premises and equipment and accumulated depreciation at December 31, were as follows:

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Land and land improvements | $4497 | $4472 |
| Building and improvements | 22109 | 21714 |
| Furniture and equipment | 12699 | 12703 |
| Construction in progress and deposits on equipment | 324 | 633 |
|  | 39629 | 39522 |
| Less accumulated depreciation | (19782) | (19297) |
|  | $19847 | $20225 |

---

Depreciation included in Occupancy and equipment expenses amounted to $1.6 million for the years ended December 31, 2025 and 2024.

**Note 9. Leases**

As of December 31, 2025, the Company had operating real estate leases for three branch locations, a parking lot, and land upon which a branch location was constructed. The lease agreements have maturity dates ranging from June 2028 to September 2047. As of December 31, 2025, the weighted average remaining life of the lease term for the operating leases was 16.91 years.

The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate as of the date the lease became effective or as of January 2019 for leases in effect at adoption of ASU No. 2016-02. As of December 31, 2025 and 2024, the weighted average discount rate for operating leases was 3.64% and 3.63%, respectively.

The right-of-use assets and lease liabilities related to operating leases were as follows at December 31:

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Right-of-use assets included in Other assets | $2194 | $2310 |
| Lease liabilities included in Accrued interest and other liabilities | 2385 | 2484 |

---

------

Total estimated rental commitments for operating leases were as follows as of December 31, 2025:

---

| | |
|:---|:---|
| | (Dollars in thousands) |
| 2026 | $219 |
| 2027 | 225 |
| 2028 | 212 |
| 2029 | 186 |
| 2030 | 188 |
| Thereafter | 2289 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $3319 |

---

A reconciliation of the operating lease undiscounted cash flows in the maturity analysis above and the operating lease liability recognized in the consolidated balance sheets is shown below:

---

| | |
|:---|:---|
| | **December 31, 2025** |
| | (Dollars in thousands) |
| Undiscounted cash flows | $3319 |
| Discount effect of cash flows | (934) |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities | $2385 |

---

Operating lease costs, included in Occupancy expense, net in the consolidated statements of income amounted to $233 thousand for the years ended December 31, 2025 and 2024. Occupancy expense is shown in the consolidated statements of income, net of rental income of $270 thousand and $266 thousand for the years ended December 31, 2025 and 2024, respectively.

**Note 10. Investment in Real Estate Limited Partnerships**

The Company has purchased from time to time various interests in limited partnerships established to acquire, own and rent residential housing for elderly, low or moderate income individuals in Vermont and New Hampshire. The following is a summary of investments in real estate limited partnerships at December 31:

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Carrying values of investments carried at equity included in Other assets | $13095 | $12918 |
| Capital contribution payable included in Accrued interest and other liabilities | 2193 | 2102 |

---

The following table presents the net impact on the Provision for income taxes related to investments carried at equity:

---

| | | |
|:---|:---|:---|
| | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Provision for undistributed net losses of limited partnership investments | $1823 | $1703 |
| Federal income tax credits related to limited partnership investments | (1880) | (1832) |
| Net effect on provision for income taxes | $(57) | $(129) |

---

------

**Note 11. Deposits**

The following is a summary of interest bearing deposits at December 31:

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Interest bearing checking accounts | $324199 | $307540 |
| Savings and money market accounts | 401797 | 407322 |
| Time deposits, $250,000 and over | 69096 | 61723 |
| Other time deposits | 192951 | 166261 |
|  | $988043 | $942846 |

---

Included in other time deposits are brokered deposits of $10.0 million and purchased one-way CDARS deposits of $248 thousand at December 31, 2025. There were no brokered deposits or purchased one-way CDARS deposits at December 31, 2024. Reciprocal deposits of $281.8 million and $269.8 million were included in deposit balances in the consolidated balance sheets at December 31, 2025 and 2024, respectively.

The following is a summary of time deposits by maturity at December 31, 2025:

---

| | |
|:---|:---|
| | (Dollars in thousands) |
| 2026 | $248620 |
| 2027 | 6526 |
| 2028 | 2586 |
| 2029 | 1983 |
| 2030 | 2332 |
|  | $262047 |

---

**Note 12. Borrowed Funds**

The Company's borrowed funds consisted of borrowings from the FHLB of $286.5 million at a weighted average rate of 4.05% at December 31, 2025. Borrowed funds at December 31, 2024 consisted of borrowings from the FHLB of $259.7 million at a weighted average rate of 4.17%.

The Company has established both overnight and longer term lines of credit with the FHLB. These borrowings are secured by investment securities AFS, a blanket lien on qualified collateral consisting of loans with first mortgages secured by one-to-four family properties and certain commercial real estate loans. At December 31, 2025, pledged loans and investment securities AFS with a carrying value of $527.0 million provided a gross borrowing capacity of $380.5 million at the FHLB, less outstanding borrowings and other credit subject to collateralization of $332.2 million, resulting in remaining year-end available borrowing capacity of $48.3 million. At December 31, 2024, pledged loans and investment securities AFS with a carrying value of $438.2 million provided a gross borrowing capacity of $322.5 million at the FHLB, less outstanding borrowings and other credit subject to collateralization of $309.3 million, resulting in remaining year-end available borrowing capacity of $13.2 million.

Under a separate agreement with the FHLB, the Company has the authority, up to its available borrowing capacity, to collateralize public unit deposits with letters of credit issued by the FHLB. FHLB letters of credit in the amount of $42.9 million and $47.3 million were utilized as collateral for these deposits at December 31, 2025 and 2024, respectively. Total fees paid by the Company in connection with the issuance of these letters of credit were $50 thousand and $44 thousand for the years ended December 31, 2025 and 2024, respectively. Union also maintains an IDEAL Way Line of Credit with the FHLB. The total line available was $551 thousand as of December 31, 2025 and 2024. There were no outstanding borrowings against this line of credit at December 31, 2025 and 2024.

In addition to its borrowing arrangements with the FHLB, Union maintains a preapproved Federal Funds line of credit with a correspondent bank totaling $15.0 million. Interest on advances under this line is payable daily and charged at the Federal Funds rate at the time of the borrowing. There were no outstanding borrowings on the line of credit at December 31, 2025 or 2024.

------

**Note 13. Subordinated Notes**

In August 2021, the Company completed the private placement of $16.5 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2031 (the "Notes") to certain qualified institutional buyers and accredited investors. The Notes initially bear interest, payable semi-annually, at the rate of 3.25% per annum, until September 1, 2026. From and including September 1, 2026, the interest rate applicable to the outstanding principal amount due will reset quarterly to the then current three-month secured overnight financing rate (SOFR) plus 263 basis points. The Company may, at its option, beginning with the interest payment date of September 1, 2026, but not generally prior thereto, and on any scheduled interest payment date thereafter, redeem the Notes, in whole or in part. The Notes have been structured to qualify as Tier 2 capital instruments for the Company under bank regulatory guidelines for the five year period after initial issuance. Thereafter, Tier 2 capital treatment will decline by 20% per year.

The Company used the proceeds to provide additional capital support to the Company's wholly-owned subsidiary, Union Bank, to support growth and for other general corporate purposes.

The unamortized issuance costs of the Notes were $193 thousand and $227 thousand at December 31, 2025 and 2024, respectively. The Company recorded $34 thousand of issuance costs in interest expense for the year ended December 31, 2025 and 2024. The Notes are presented net of unamortized issuance costs in the consolidated balance sheets.

**Note 14. Income Taxes**

The components of the provision for income taxes for the years ended December 31, were as follows:

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Current federal tax provision | $2120 | $2251 |
| Current state tax provision (benefit) | 53 | (53) |
| Deferred tax benefit | (1245) | (1829) |
|  | $928 | $369 |

---

The total provision for income taxes differs from the amounts computed at the statutory federal income tax rate of 21% primarily due to the following for the years ended December 31:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2024** | **2024** |
| | **Amount** | **Percent** | **Amount** | **Percent** |
| | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Computed "expected" tax expense | $2522 | 21.00% | $1917 | 21.00% |
| State tax expense (benefit), net of federal benefit (1) | 42 | 0.35% | (42) | (0.46)% |
| Non-taxable or non-deductible items |  |  |  |  |
| &nbsp;&nbsp;Tax exempt interest | (1406) | (11.71)% | (1222) | (13.38)% |
| &nbsp;&nbsp;Increase in cash surrender value of COLI | (146) | (1.21)% | (150) | (1.65)% |
| &nbsp;&nbsp;Disallowed interest expense | 292 | 2.43% | 283 | 3.10% |
| &nbsp;&nbsp;Other non-deductible expenses | 12 | 0.10% | 11 | 0.12% |
| Tax credits |  |  |  |  |
| &nbsp;&nbsp;Low-income housing | (1856) | (15.45)% | (1720) | (18.84)% |
| &nbsp;&nbsp;Rehabilitation and energy | (77) | (0.64)% | (112) | (1.23)% |
| &nbsp;&nbsp;Other | (15) | (0.13)% | (17) | (0.19)% |
| Equity in losses of limited partnerships | 1559 | 12.98% | 1436 | 15.73% |
| Other, net | 1 | 0.01% | (15) | (0.16)% |
|  | $928 | 7.73% | $369 | 4.04% |

---

____________________

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(1)State taxes in New Hampshire made up the majority (greater than 50 percent) of the tax effect in this category.*

------

Income taxes paid were as follows for the years ended December 31:

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Federal taxes paid | $200 | $— |
| New Hampshire taxes paid | 80 |  |
| Net payment | $280 | $— |

---

Listed below are the significant components of the net deferred tax asset at December 31:

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Components of the deferred tax asset |  |  |
| &nbsp;&nbsp;Allowance for credit losses | $2117 | $1942 |
| &nbsp;&nbsp;&nbsp;Tax credit carryover | 2444 | 1478 |
| &nbsp;&nbsp;&nbsp;Deferred compensation | 481 | 426 |
| &nbsp;&nbsp;&nbsp;Loans held for sale | 13 | 22 |
| &nbsp;&nbsp;&nbsp;Core deposit intangible | 11 | 36 |
| &nbsp;&nbsp;&nbsp;Unrealized loss on investment securities available-for-sale | 7257 | 9571 |
| &nbsp;&nbsp;&nbsp;Other | 49 | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax asset | 12372 | 13521 |
| Components of the deferred tax liability |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation | (988) | (1131) |
| &nbsp;&nbsp;&nbsp;Mortgage servicing rights | (407) | (377) |
| &nbsp;&nbsp;&nbsp;Limited partnership investments | (86) | (46) |
| &nbsp;&nbsp;&nbsp;Goodwill | (482) | (447) |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | (172) | (214) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax liability | (2135) | (2215) |
| Net deferred tax asset | $10237 | $11306 |

---

Deferred tax assets are recognized subject to management's judgment that it is more likely than not that the deferred tax asset will be realized. Based on the temporary taxable items, historical taxable income and estimates of future taxable income, the Company believes that it is more likely than not that the deferred tax assets at December 31, 2025 will be realized and therefore no valuation allowance is warranted.

The net deferred income tax asset is included in Other assets in the consolidated balance sheets at December 31, 2025 and 2024.

Based on management's evaluation, management has concluded that there were no significant uncertain tax positions requiring recognition in the Company's financial statements at December 31, 2025 or 2024. The Company is subject to income tax at the federal level and in the state of New Hampshire. Although the Company is not currently the subject of an examination by any taxing authority, the Company's tax years ended December 31, 2022 through 2024 are open to examination under applicable statutes of limitation. The 2025 tax return has not yet been filed.

The Company may from time to time be assessed interest and/or penalties by federal or state tax jurisdictions, although any such assessments historically have been minimal and immaterial to the Company's financial results. In the event that the Company receives an assessment for interest and/or penalties, it will be classified in the financial statements as Other expenses.

**Note 15. Employee Benefit Plans**

*401(k) Plan:* Union maintains a tax-qualified defined contribution 401(k) plan under which employees may elect to make tax deferred contributions of up to the IRS maximum from their annual salary, which are matched by Union equal to 50% of the first 6% of the compensation contributed. All employees meeting service requirements are eligible to participate in the 401(k) plan. Union may make employer matching and profit-sharing contributions to the 401(k) plan at the discretion of the Board. Company contributions are fully vested after three years of service. The 401(k) plan includes "Safe Harbor" provisions requiring annual nondiscretionary minimum contributions to the 401(k) plan for all eligible participants in an amount equal to

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3% of eligible earnings of each eligible participant. Additionally, in 2025 a discretionary profit-sharing contribution was made to the 401(k) plan in an amount equal to 3% percent of each employee's eligible earnings, as defined by the 401(k) plan.

The following table summarizes employer contributions for the years ended December 31, 2025 and 2024:

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| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Employer matching | $425 | $358 |
| Profit sharing | 466 |  |
| Safe harbor | 477 | 412 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $1368 | $770 |

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*Nonqualified Deferred Compensation Plans:* The Company and Union have two nonqualified deferred compensation plans for directors and certain key officers, referred to in this Note as the 2008 Plan and the 2020 Plan. The Company accrued an expense of $7 thousand in 2025 and 2024 under the 2008 Plan. The benefit obligations under the 2008 Plan represent general unsecured obligations of the Company and no assets are segregated for such payments. However, the Company and Union have purchased life insurance contracts on the lives of each participant in order to recoup the funding costs of these benefits. The benefits accrued under the 2008 Plan aggregated $114 thousand and $165 thousand at December 31, 2025 and 2024, respectively, and are included in Accrued interest and other liabilities. The cash surrender value of the life insurance policies purchased to recoup the funding costs under the 2008 Plan aggregated $491 thousand and $467 thousand at December 31, 2025 and 2024, respectively, and are included in Company-owned life insurance in the Company's consolidated balance sheets.

The 2020 Plan, which amended and restated an earlier plan adopted in 2006, provides a means by which participants may elect to defer receipt of current compensation from the Company or its subsidiary in order to provide retirement or other benefits as selected in the individual adoption agreements. Although the Plan did not originally allow for employer contributions, the Board subsequently determined that employer contributions may be appropriate in certain circumstances and accordingly amended and restated the plan effective February 1, 2020 to permit such contributions. Participants may select among designated reference investments consisting of investment funds, with the performance of the participant's account mirroring the selected reference investment. Distributions are made only upon a qualifying distribution event, which may include a separation from service, death, disability or unforeseeable emergency, or upon a date specified in the participant's deferral election form. The 2020 Plan is unfunded, representing general unsecured obligations of the Company of $2.0 million and $1.8 million as of December 31, 2025 and 2024, respectively, and are included in Accrued interest and other liabilities in the consolidated balance sheets, including employer contributions of $2 thousand and $22 thousand accrued as of December 31, 2025 and 2024, respectively.

**Note 16. Stock Based Compensation**

The Company's stock based compensation plan is the Union Bankshares, Inc. 2024 Equity Incentive Plan, approved by the Company's shareholders in May 2024, which replaces and is substantially similar to the Company's 2014 Equity Plan. Subject to typical anti-dilution adjustments, up to 250,000 shares of the Company's common stock are available for equity awards of incentive stock options, nonqualified stock options, restricted stock and RSUs to eligible officers and (except for awards of incentive stock options) nonemployee directors. Shares available for issuance of awards under the 2024 Equity Plan consist of unissued shares of the Company's common stock and/or shares held in treasury.

*RSUs.* Each RSU represents the right to receive one share of the Company's common stock upon satisfaction of applicable vesting conditions. For each of the awards granted in 2025, 50% of the RSUs awarded were in the form of Time-Based RSUs, and 50% were in the form of Performance-Based RSUs, which are subject to both performance and time based vesting conditions. Both the Time-Based and Performance-Based RSUs vest over three years, approximately one-third per year, on the anniversary of the earned date. Prior to vesting, the RSUs do not earn dividends or dividend equivalents, nor do they bear any voting rights.

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The following table summarizes the RSUs awarded to Company executives in 2025 under the 2024 Equity Plan, and the number of such RSUs remaining unvested as of December 31, 2025:

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| | | | |
|:---|:---|:---|:---|
| | Number of RSUs Granted | Weighted Average Grant Date Fair Value | Number of Unvested RSUs |
| 2025 Award | 18139 | $32.70 | 12090 |
| &nbsp;&nbsp;&nbsp;Total | 18139 |  | 12090 |

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For each of the awards granted in 2024, 50% of the RSUs awarded were in the form of Time-Based RSUs, which vest over three years, approximately one-third per year on the anniversary of the earned date, and 50% of the RSUs awarded were in the form of Performance-Based RSUs, which are subject to both performance and time based vesting conditions, with vesting of awards over two years, approximately one-half per year on the anniversary of the earned date.

The following table summarizes the RSUs awarded to Company executives in 2024 under the 2014 Equity Plan, and the number of such RSUs remaining unvested as of December 31, 2025:

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| | | | |
|:---|:---|:---|:---|
| | Number of RSUs Granted | Weighted-Average Grant Date Fair Value | Number of Unvested RSUs |
| 2024 Award | 19910 | $28.87 | 2658 |
| &nbsp;&nbsp;&nbsp;Total | 19910 |  | 2658 |

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No new grants will be made under the 2014 Equity Plan.

Unrecognized compensation expense related to the unvested RSUs was $472 thousand and $393 thousand, as of December 31, 2025 and 2024, respectively.

On May 21, 2025, the Company's board of directors, as a component of total director compensation, granted an aggregate of 3,616 RSUs to the Company's non-employee directors. Each RSU represents the right to receive one share of the Company's common stock upon satisfaction of applicable vesting conditions. The RSUs will vest in May 2026, subject to continued board service through the vesting date, other than in the case of the director's death or disability. Prior to vesting, the RSUs do not earn dividends or dividend equivalents, nor do they bear any voting rights. Director compensation expense related to this award is estimated to be $112 thousand of which $65 thousand has been recorded for the year ended December 31, 2025.

**Note 17. Stockholders' Equity**

*Equity Distribution Agreement*

On May 20, 2025, the Company and Union entered into an Equity Distribution Agreement with Piper Sandler & Co., as sales agent, pursuant to which the Company may sell from time to time shares of the Company's common stock, par value $2.00, having an aggregate gross sale price of up to $40,000,000. Sales of common stock under the Equity Distribution Agreement may be made in any transactions that are deemed to be "at-the-market offerings" as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the "Securities Act") or, subject to the Company's consent, in privately negotiated transactions. The shares offered and sold in the offering have been registered by the Company under the Securities Act.

During the year ended December 31, 2025, the Company issued 56,260 shares for aggregate gross sale proceeds of $1.5 million, at an average gross sale price of $26.51 per share, which yielded net proceeds to the Company of $1.2 million after issuance costs, including sales commissions equal to 3% of gross sale proceeds. As of December 31, 2025, approximately $38.5 million remains available for issuance under the offering.

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**Note 18. Earnings Per Share**

The following table presents the reconciliation between the calculation of basic EPS and diluted EPS for the years ended December 31, 2025 and 2024:

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| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) |
| Net income | $11080 | $8761 |
| Weighted average common shares outstanding for basic EPS | 4558767 | 4523140 |
| Dilutive effect of stock-based awards (1) | 33086 | 30909 |
| Weighted-average common and potential common shares for diluted EPS | 4591853 | 4554049 |
| **Earnings per common share:** |  |  |
| &nbsp;&nbsp;Basic EPS | $2.43 | $1.94 |
| &nbsp;&nbsp;Diluted EPS | $2.41 | $1.92 |

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____________________

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(1)Dilutive effect of stock based awards represents the effect of the assumed vesting of restricted stock units. Unvested awards do not have dividend or dividend equivalent rights.*

**Note 19. Financial Instruments With Off-Balance-Sheet Risk**

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit, standby letters of credit, interest rate caps and floors written on adjustable-rate loans, commitments to participate in or sell loans, commitments to buy or sell securities, guarantees on certain sold loans and risk-sharing commitments on certain sold loans under the MPF program with the FHLB. At December 31, 2025 and 2024, the Company had binding loan commitments to sell residential mortgage loans at fixed rates totaling $4.2 million and $3.9 million, respectively. The fair value adjustment of these commitments is not material to the Company's financial statements.

Such instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments and the potential impact on the Company's future financial position, financial performance and cash flow.

The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. For interest rate caps and floors embedded in adjustable-rate loans, the contract or notional amounts do not represent exposure to credit loss. The Company controls the risk of interest rate cap agreements through credit approvals, limits and monitoring procedures. Interest rate caps and floors on adjustable rate loans permit the Company to manage its interest rate risk and cash flow risk on these loans within parameters established by Company policy.

The Company generally requires collateral or other security to support financial instruments with credit risk. The following table shows financial instruments outstanding whose contract amount represents credit risk at December 31:

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| | | |
|:---|:---|:---|
| | **Contract or<br>Notional Amount** | **Contract or<br>Notional Amount** |
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Commitments to originate loans | $65558 | $47696 |
| Unused lines of credit | 174031 | 191392 |
| Standby and commercial letters of credit | 1573 | 1640 |
| Credit card arrangements | 125 | 154 |
| MPF credit enhancement obligation, net (See Note 20) | 1233 | 865 |
| Commitment to purchase investment in a real estate limited partnership | 1000 | 2000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $243520 | $243747 |

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Commitments to extend credit are agreements to lend to a customer at either a fixed or variable interest rate as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates within 90 days of

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the commitment. Unused lines of credit are generally renewable at least annually except for home equity lines which usually have a specified draw period followed by a specified repayment period. Unused lines may have other termination clauses and may require payment of a fee.

Since many of the commitments and lines are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company, upon issuance of a commitment to extend credit is based on management's credit evaluation of the customer. Collateral held varies but may include real estate, accounts receivable, inventory, property, plant and equipment and income-producing commercial properties.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are issued to support the customer's private borrowing arrangements or guarantee the customer's contractual performance on behalf of a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers and the Company evaluates each customer's creditworthiness on a case-by-case basis. The fair value of standby letters of credit has not been included in the Company's consolidated balance sheet for either year as the fair value is immaterial.

The Company did not hold or issue derivative instruments or hedging instruments during the years ended December 31, 2025 and 2024.

**Note 20. Commitments and Contingencies**

*Contingent Liabilities:* The Company sells 1-4 family residential mortgage loans under the MPF program with FHLB (See Note 19). Under this program, the Company shares in the credit risk of each mortgage loan, while receiving fee income in return. The Company is responsible for a Credit Enhancement Obligation based on the credit quality of these loans. FHLB funds a First Loss Account based on the Company's outstanding MPF mortgage loan balances. This creates a laddered approach to sharing in any losses. In the event of default, homeowner's equity and private mortgage insurance, if any, are the first sources of repayment; the FHLB First Loss Account funds are then utilized, followed by the member's Credit Enhancement Obligation, with the balance the responsibility of FHLB. These loans meet specific underwriting standards of the FHLB. The Company had sold $68.7 million and $53.2 million in loans through the MPF program since inception of its participation in the program, with an outstanding principal balance of $35.5 million and $25.3 million as of December 31, 2025 and 2024, respectively.

The volume of loans sold to the MPF program and the corresponding Credit Enhancement Obligation are closely monitored by management. As of December 31, 2025 and 2024, the notional amount of the maximum contingent contractual liability related to this program was $1.3 million and $884 thousand, respectively, of which $25 thousand and $19 thousand had been recorded as a reserve through Accrued interest and other liabilities at December 31, 2025 and 2024, respectively.

*Legal Contingencies:* In the normal course of business, the Company is involved in various legal and other proceedings. In the opinion of management, any liability resulting from such proceedings is not expected to have a material adverse effect on the Company's consolidated financial statements.

**Note 21. Fair Value Measurement**

The following is a description of the valuation methodologies used for the Company's assets that are measured on a recurring basis at estimated fair value:

*Investment securities AFS*: Certain U.S. Treasury notes have been valued using unadjusted quoted prices from active markets and therefore have been classified as Level 1. However, the majority of the Company's AFS investment securities have been valued utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include market maker bids, quotes and pricing models. Inputs to the pricing models include recent trades, benchmark interest rates, spreads and actual and projected cash flows.

*Mutual funds*: Mutual funds have been valued using unadjusted quoted prices from active markets and therefore have been classified as Level 1.

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Assets measured at fair value on a recurring basis at December 31, 2025 and 2024, segregated by fair value hierarchy level, are summarized below:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Fair Value Measurement** | **Fair Value Measurement** | **Fair Value Measurement** | **Fair Value Measurement** |
| | **Fair<br>Value** | **Quoted Prices in Active Markets for<br>Identical Assets<br>(Level 1)** | **Significant Other Observable Inputs<br>(Level 2)** | **Significant<br>Unobservable<br>Inputs<br>(Level 3)** |
| **December 31, 2025:** | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Investment securities available-for-sale |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Debt securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. Government-sponsored enterprises | $26094 | $2843 | $23251 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Agency mortgage-backed | 240564 |  | 240564 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;State and political subdivisions | 48220 |  | 48220 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate | 11377 |  | 11377 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total debt securities | $326255 | $2843 | $323412 | $— |
| Other investments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mutual funds | $2038 | $2038 | $— | $— |
| **December 31, 2024:** |  |  |  |  |
| Investment securities available-for-sale |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Debt securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. Government-sponsored enterprises | $26215 | $2702 | $23513 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Agency mortgage-backed | 173275 |  | 173275 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;State and political subdivisions | 48550 |  | 48550 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate | 2464 |  | 2464 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total debt securities | $250504 | $2702 | $247802 | $— |
| Other investments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mutual funds | $1754 | $1754 | $— | $— |

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There were no transfers in or out of Levels 1 and 2 during the years ended December 31, 2025 and 2024, nor were there any Level 3 assets at any time during those periods. Certain other assets and liabilities are measured at fair value on a nonrecurring basis, that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Assets and liabilities measured at fair value on a nonrecurring basis in periods after initial recognition, such as collateral dependent individually evaluated loans and MSRs, were not considered material at December 31, 2025 or 2024. The Company has not elected to apply the fair value method to any financial assets or liabilities other than those situations where other accounting pronouncements require fair value measurements.

FASB ASC Topic 825*, Financial Instruments,* requires disclosure of the estimated fair value of financial instruments. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company's various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Management's estimates and assumptions are inherently subjective and involve uncertainties and matters of significant judgment. Changes in assumptions could dramatically affect the estimated fair values.

Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Certain financial instruments and all nonfinancial instruments may be excluded from disclosure requirements. Thus, the aggregate fair value amounts presented may not necessarily represent the actual underlying fair value of such instruments of the Company.

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As of the balance sheet dates, the estimated fair values and related carrying amounts of the Company's significant financial instruments were as follows:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
| | **Fair Value Measurement** | **Fair Value Measurement** | **Fair Value Measurement** | **Fair Value Measurement** | **Fair Value Measurement** |
| | **Carrying<br>Amount** | **Estimated Fair<br>Value** | **Quoted Prices<br>in Active<br>Markets for<br>Identical<br>Assets<br>(Level 1)** | **Significant<br>Other<br>Observable<br>Inputs<br>(Level 2)** | **Significant<br>Unobservable<br>Inputs<br>(Level 3)** |
| | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Financial assets |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $12300 | $12300 | $12300 | $— | $— |
| &nbsp;&nbsp;&nbsp;Interest bearing deposits in banks | 8955 | 8955 |  | 8955 |  |
| &nbsp;&nbsp;&nbsp;Investment securities | 328293 | 328293 | 4881 | 323412 |  |
| &nbsp;&nbsp;&nbsp;Loans held for sale | 4172 | 4232 |  | 4232 |  |
| &nbsp;&nbsp;&nbsp;Loans, net |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential real estate | 471932 | 451963 |  |  | 451963 |
| &nbsp;&nbsp;&nbsp;&nbsp;Construction real estate | 103168 | 102183 |  |  | 102183 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial real estate | 441958 | 430962 |  |  | 430962 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial | 30922 | 30119 |  |  | 30119 |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer | 2413 | 2379 |  |  | 2379 |
| &nbsp;&nbsp;&nbsp;&nbsp;Municipal | 118000 | 115749 |  |  | 115749 |
| &nbsp;&nbsp;&nbsp;Accrued interest receivable | 6987 | 6987 |  | 1488 | 5499 |
| &nbsp;&nbsp;&nbsp;Nonmarketable equity securities | 12283 | N/A | N/A | N/A | N/A |
| Financial liabilities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Deposits |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Noninterest bearing | 226939 | 226939 | 226939 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest bearing | 725996 | 725996 | 725996 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Time | 262047 | 261693 |  | 261693 |  |
| &nbsp;&nbsp;&nbsp;Borrowed funds |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Short-term | 15500 | 15364 |  | 15364 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Long-term | 270981 | 273014 |  | 273014 |  |
| &nbsp;&nbsp;Subordinated notes | 16307 | 16799 |  | 16799 |  |
| &nbsp;&nbsp;Accrued interest payable | 2981 | 2981 |  | 2981 |  |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| | **Fair Value Measurement** | **Fair Value Measurement** | **Fair Value Measurement** | **Fair Value Measurement** | **Fair Value Measurement** |
| | **Carrying<br>Amount** | **Estimated Fair<br>Value** | **Quoted Prices<br>in Active<br>Markets for<br>Identical<br>Assets<br>(Level 1)** | **Significant<br>Other<br>Observable<br>Inputs<br>(Level 2)** | **Significant<br>Unobservable<br>Inputs<br>(Level 3)** |
| | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Financial assets |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $15838 | $15838 | $15838 | $— | $— |
| &nbsp;&nbsp;&nbsp;Interest bearing deposits in banks | 9462 | 9449 |  | 9449 |  |
| &nbsp;&nbsp;&nbsp;Investment securities | 252258 | 252258 | 4456 | 247802 |  |
| &nbsp;&nbsp;&nbsp;Loans held for sale | 5204 | 5303 |  | 5303 |  |
| &nbsp;&nbsp;&nbsp;Loans, net |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential real estate | 464691 | 425103 |  |  | 425103 |
| &nbsp;&nbsp;&nbsp;&nbsp;Construction real estate | 105633 | 103672 |  |  | 103672 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial real estate | 432173 | 395713 |  |  | 395713 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial | 34863 | 33096 |  |  | 33096 |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer | 2522 | 2477 |  |  | 2477 |
| &nbsp;&nbsp;&nbsp;&nbsp;Municipal | 110336 | 108163 |  |  | 108163 |
| &nbsp;&nbsp;&nbsp;Accrued interest receivable | 6470 | 6470 |  | 1226 | 5244 |
| &nbsp;&nbsp;&nbsp;Nonmarketable equity securities | 11352 | N/A | N/A | N/A | N/A |
| Financial liabilities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Deposits |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Noninterest bearing | 226048 | 226048 | 226048 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest bearing | 714862 | 714862 | 714862 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Time | 227984 | 226890 |  | 226890 |  |
| &nbsp;&nbsp;&nbsp;Borrowed funds |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Short-term | 29000 | 28946 |  | 28946 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Long-term | 230696 | 229613 |  | 229613 |  |
| &nbsp;&nbsp;Subordinated notes | 16273 | 16128 |  | 16128 |  |
| &nbsp;&nbsp;&nbsp;Accrued interest payable | 3319 | 3319 |  | 3319 |  |

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The carrying amounts in the preceding tables are included in the consolidated balance sheets under the applicable captions. Accrued interest receivable and nonmarketable equity securities are included in Other assets in the consolidated balance sheets.

**Note 22. Transactions with Related Parties**

The Company has had, and is expected to have in the future, banking transactions in the ordinary course of business with principal stockholders, directors, principal officers, their immediate families and affiliated companies in which they are principal stockholders (commonly referred to as related parties). In the opinion of management, these transactions were made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated parties and do not represent more than the normal risk of collectability or present other unfavorable features.

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Aggregate loan transactions with related parties for the years ended December 31 were as follows:

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| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Balance, January 1, | $127 | $265 |
| New loans and advances on lines | 70 | 5 |
| Repayments | (27) | (143) |
| Other, net | 16450 |  |
| Balance, December 31, | $16620 | $127 |
| Balance available on lines of credit or loan commitments | $2050 | $223 |

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There were no loans to related parties that were past due, in nonaccrual status or that had been restructured to provide a reduction or deferral of interest or principal because of deterioration in the financial position of the borrower, or that were considered classified at December 31, 2025 or 2024. The $16.5 million included in Other above represents the December 31, 2025 balances on existing loans associated with a new director at the time of his appointment to the Union board of directors during the fourth quarter of 2025.

Deposit accounts of related parties were $8.8 million and $1.5 million at December 31, 2025 and 2024, respectively. Union's Wealth Management Group had no funds invested in certificates of deposit with Union at December 31, 2025 or December 31, 2024.

**Note 23. Regulatory Capital Requirements**

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

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

The Company and Union's risk-based capital ratios exceeded regulatory guidelines at December 31, 2025 and 2024, and, specifically, Union was "well capitalized" under Prompt Corrective Action provisions for each period. There were no conditions or events known to management that occurred subsequent to December 31, 2025 and prior to the publication of these financial statements that would change the Company's or Union's regulatory capital categorization.

------

Union's and the Company's regulatory capital amounts and ratios as of the balance sheet dates are presented in the following tables:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Actual** | **Actual** | **For Capital<br>Adequacy<br>Purposes** | **For Capital<br>Adequacy<br>Purposes** | **To Be Well<br>Capitalized Under<br>Prompt Corrective<br>Action Provisions** | **To Be Well<br>Capitalized Under<br>Prompt Corrective<br>Action Provisions** |
| **As of December 31, 2025** | **Amount** | **Ratio** | **Amount** | **Ratio** | **Amount** | **Ratio** |
| Company: | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| &nbsp;&nbsp;&nbsp;Total capital to risk weighted assets | $130149 | 12.80% | $81343 | 8.00% | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Tier 1 capital to risk weighted assets | 104344 | 10.26% | 61020 | 6.00% | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Common Equity Tier 1 to risk weighted assets | 104344 | 10.26% | 45765 | 4.50% | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Tier 1 capital to average assets | 104344 | 6.36% | 65625 | 4.00% | N/A | N/A |
| Union: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Total capital to risk weighted assets | $130179 | 12.81% | $81298 | 8.00% | $101623 | 10.00% |
| &nbsp;&nbsp;&nbsp;Tier 1 capital to risk weighted assets | 120681 | 11.87% | 61001 | 6.00% | 81335 | 8.00% |
| &nbsp;&nbsp;&nbsp;Common Equity Tier 1 to risk weighted assets | 120681 | 11.87% | 45751 | 4.50% | 66085 | 6.50% |
| &nbsp;&nbsp;&nbsp;Tier 1 capital to average assets | 120681 | 7.36% | 65588 | 4.00% | 81984 | 5.00% |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Actual** | **Actual** | **For Capital<br>Adequacy<br>Purposes** | **For Capital<br>Adequacy<br>Purposes** | **To Be Well<br>Capitalized Under<br>Prompt Corrective<br>Action Provisions** | **To Be Well<br>Capitalized Under<br>Prompt Corrective<br>Action Provisions** |
| **As of December 31, 2024** | **Amount** | **Ratio** | **Amount** | **Ratio** | **Amount** | **Ratio** |
| Company: | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| &nbsp;&nbsp;&nbsp;Total capital to risk weighted assets | $123278 | 12.53% | $78709 | 8.00% | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Tier 1 capital to risk weighted assets | 98254 | 9.99% | 59011 | 6.00% | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Common Equity Tier 1 to risk weighted assets | 98254 | 9.99% | 44259 | 4.50% | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Tier 1 capital to average assets | 98254 | 6.29% | 62483 | 4.00% | N/A | N/A |
| Union: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Total capital to risk weighted assets | $122962 | 12.51% | $78633 | 8.00% | $98291 | 10.00% |
| &nbsp;&nbsp;&nbsp;Tier 1 capital to risk weighted assets | 114211 | 11.62% | 58973 | 6.00% | 78631 | 8.00% |
| &nbsp;&nbsp;&nbsp;Common Equity Tier 1 to risk weighted assets | 114211 | 11.62% | 44230 | 4.50% | 63887 | 6.50% |
| &nbsp;&nbsp;&nbsp;Tier 1 capital to average assets | 114211 | 7.31% | 62496 | 4.00% | 78120 | 5.00% |

---

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

**Note 24. Treasury Stock**

The basis for the carrying value of the Company's treasury stock is the purchase price of the shares at the time of purchase. The Company maintains a limited stock repurchase plan which authorizes the repurchase of up to 2,500 shares of its common stock each calendar quarter in open market purchases or privately negotiated transactions, as management may deem advisable and as market conditions may warrant. The repurchase authorization for a calendar quarter expires at the end of that quarter to the extent it has not been exercised, and is not carried forward into future quarters. The quarterly repurchase program, which was initially adopted in 2010, was most recently reauthorized in December 2024 and will expire on December 31, 2026 unless reauthorized. The Company did not repurchase any shares under this program during the years ended December 31, 2025 and 2024. Since inception, the Company had repurchased 26,140 shares of its common stock as of December 31, 2025, at prices ranging from $17.86 to $48.82 per share and at a total cost of $682 thousand.

The Company maintains a Dividend Reinvestment and Stock Purchase Plan (DRIP) whereby registered stockholders may elect to reinvest cash dividends and optional cash contributions to purchase additional shares of the Company's common stock. The Company has reserved 200,000 shares of its common stock for issuance and sale under the DRIP. As of December 31, 2025, 15,819 shares of stock had been issued from treasury stock under the DRIP, since inception of the Plan in 2016.

------

**Note 25. Other Comprehensive Income (Loss)**

The components of Accumulated OCI, net of tax, at December 31 were:

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| Net unrealized losses on investment securities AFS | $(25883) | $(33997) |

---

The following table discloses the tax effects allocated to each component of OCI for the years ended:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| | Before-Tax Amount | Tax Expense | Net-of-Tax Amount | Before-Tax Amount | Tax Benefit | Net-of-Tax Amount |
| | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Investment securities AFS: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net unrealized holding gains (losses) arising during the year on investment securities AFS | $10428 | $(2314) | $8114 | $(3910) | $859 | $(3051) |
| &nbsp;&nbsp;&nbsp;Reclassification adjustment for net losses on investment securities AFS realized in net income |  |  |  | 1293 | (284) | 1009 |
| Total other comprehensive income (loss) | $10428 | $(2314) | $8114 | $(2617) | $575 | $(2042) |

---

The following table discloses information concerning the reclassification adjustments from OCI for the years ended December 31:

---

| | | | |
|:---|:---|:---|:---|
| Reclassification Adjustment Description | **2025** | **2024** | Affected Line Item in<br>Consolidated Statements of Income |
|  | (Dollars in thousands) | (Dollars in thousands) |  |
| Investment securities AFS: |  |  |  |
| &nbsp;&nbsp;&nbsp;Net losses on investment securities AFS | $— | $1293 | Net losses on sales of investment securities AFS |
| &nbsp;&nbsp;&nbsp;Tax benefit |  | (284) | Provision for income taxes |
| Total reclassifications | $— | $1009 | Net income |

---

**Note 26. Subsequent Events**

Events occurring subsequent to December 31, 2025 have been evaluated as to their potential impact on the consolidated financial statements.

On January 21, 2026, the Company declared a regular quarterly cash dividend of $0.36 per share, payable February 5, 2026 to shareholders of record on January 31, 2026.

------

**Note 27. Condensed Financial Information (Parent Company Only)**

The following condensed financial statements are for Union Bankshares, Inc. (Parent Company Only), and should be read in conjunction with the consolidated financial statements of Union Bankshares, Inc. and Subsidiary.

**UNION BANKSHARES, INC. (PARENT COMPANY ONLY)**

**CONDENSED BALANCE SHEETS**

 **December 31, 2025 and 2024** 

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| | (Dollars in thousands) | (Dollars in thousands) |
| ASSETS |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $54 | $44 |
| &nbsp;&nbsp;&nbsp;Other investments | 161 | 120 |
| &nbsp;&nbsp;&nbsp;Investment in subsidiary - Union | 97021 | 82437 |
| &nbsp;&nbsp;&nbsp;Other assets | 416 | 660 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $97652 | $83261 |
| LIABILITIES AND STOCKHOLDERS' EQUITY |  |  |
| LIABILITIES |  |  |
| &nbsp;&nbsp;&nbsp;Subordinated notes | $16307 | $16273 |
| &nbsp;&nbsp;&nbsp;Accrued interest and other liabilities | 481 | 508 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 16788 | 16781 |
| STOCKHOLDERS' EQUITY |  |  |
| &nbsp;&nbsp;Common stock, $2.00 par value; 7,500,000 shares authorized; 5,084,635 shares<br> issued at December 31, 2025 and 5,012,084 shares issued at December 31, 2024 | 10169 | 10024 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 4607 | 3031 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 96247 | 91722 |
| &nbsp;&nbsp;Treasury stock at cost; 471,430 shares at December 31, 2025 and 474,075 shares<br> at December 31, 2024 | (4276) | (4300) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (25883) | (33997) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 80864 | 66480 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $97652 | $83261 |

---

The investment in subsidiary is carried under the equity method of accounting. The investment in subsidiary and cash, which is on deposit with Union, have been eliminated in consolidation.

------

**UNION BANKSHARES, INC. (PARENT COMPANY ONLY)**

**CONDENSED STATEMENTS OF INCOME**

**Years Ended December 31, 2025 and 2024** 

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| Revenues | (Dollars in thousands) | (Dollars in thousands) |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends - bank subsidiary - Union | $7500 | $7900 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income | 29 | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 7529 | 7921 |
| Expenses |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest on subordinated notes | 570 | 570 |
| &nbsp;&nbsp;&nbsp;&nbsp;Administrative and other | 590 | 598 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total expenses | 1160 | 1168 |
| Income before applicable income tax benefit and equity in undistributed<br> net income of subsidiary | 6369 | 6753 |
| Applicable income tax benefit | (267) | (242) |
| Income before equity in undistributed net income of subsidiary | 6636 | 6995 |
| Equity in undistributed net income - Union | 4444 | 1766 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income | $11080 | $8761 |

---

------

**UNION BANKSHARES, INC. (PARENT COMPANY ONLY)**

**CONDENSED STATEMENTS OF CASH FLOWS**

**Years Ended December 31, 2025 and 2024** 

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| CASH FLOWS FROM OPERATING ACTIVITIES | (Dollars in thousands) | (Dollars in thousands) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income | $11080 | $8761 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity in undistributed net income of Union | (4444) | (1766) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net gains on other investments | (16) | (10) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt issuance costs | 34 | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease (increase) in other assets | 244 | (141) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease in other liabilities | (134) | (382) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 6764 | 6496 |
| CASH FLOWS FROM INVESTING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment in Union | (1425) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of other investments | (25) | (12) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (1450) | (12) |
| CASH FLOWS FROM FINANCING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends paid | (6481) | (6444) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of common stock, net of issuance costs | 1177 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities | (5304) | (6444) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net increase in cash | 10 | 40 |
| &nbsp;&nbsp;Cash, beginning of year | 44 | 4 |
| &nbsp;&nbsp;Cash, end of year | $54 | $44 |
| **Supplemental Disclosures of Cash Flow Information** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest paid | $570 | $571 |
| **Dividends paid on Common Stock:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends declared | $6555 | $6511 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends reinvested | (74) | (67) |
|  | $6481 | $6444 |

---

**Note 28. Quarterly Financial Data (Unaudited)**

A summary of consolidated financial data for each of the four quarters of 2025 and 2024 is presented below:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Quarters in 2025 Ended** | **Quarters in 2025 Ended** | **Quarters in 2025 Ended** | **Quarters in 2025 Ended** |
| | March 31, | June 30, | Sept. 30, | Dec 31, |
| | (Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) |
| Interest and dividend income | $18295 | $18721 | $19207 | $19565 |
| Interest expense | 8025 | 8275 | 8051 | 8417 |
| Net interest income | 10270 | 10446 | 11156 | 11148 |
| Credit loss expense | 235 | 221 | 313 | 5 |
| Noninterest income | 2440 | 2759 | 3350 | 2913 |
| Noninterest expenses | 9824 | 10487 | 10343 | 11046 |
| Net income | 2501 | 2395 | 3436 | 2748 |
| Basic earnings per common share | $0.55 | $0.53 | $0.75 | $0.60 |
| Diluted earnings per common share | $0.55 | $0.52 | $0.75 | $0.59 |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Quarters in 2024 Ended** | **Quarters in 2024 Ended** | **Quarters in 2024 Ended** | **Quarters in 2024 Ended** |
| | March 31, | June 30, | Sept. 30, | Dec 31, |
| | (Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) |
| Interest and dividend income | $15621 | $16552 | $17191 | $18590 |
| Interest expense | 6613 | 7068 | 7761 | 8148 |
| Net interest income | 9008 | 9484 | 9430 | 10442 |
| Credit loss (benefit) expense | (230) | 388 | 425 | 347 |
| Noninterest income | 2567 | 2765 | 1605 | 2786 |
| Noninterest expenses | 9223 | 9781 | 9409 | 9614 |
| Net income | 2417 | 2019 | 1324 | 3001 |
| Basic earnings per common share | $0.53 | $0.45 | $0.29 | $0.67 |
| Diluted earnings per common share | $0.53 | $0.45 | $0.29 | $0.65 |

---

**Note 29. Other Noninterest Income and Other Noninterest Expenses**

There are no components of other noninterest income that were in excess of one percent of total revenues for the years ended December 31, 2025 and 2024. The components of other noninterest expenses which are in excess of one percent of total revenues for the years ended December 31, 2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| Expenses | (Dollars in thousands) | (Dollars in thousands) |
| &nbsp;&nbsp;&nbsp;&nbsp;FDIC insurance assessment | $1477 | $1167 |
| &nbsp;&nbsp;&nbsp;&nbsp;Vermont franchise tax | 1093 | 1069 |
| &nbsp;&nbsp;&nbsp;&nbsp;ATM and debit card expense | 1252 | 1259 |
| &nbsp;&nbsp;&nbsp;&nbsp;Professional fees | 1147 | 1062 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other expenses | 6084 | 5890 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other expenses | $11053 | $10447 |

---

------

![BDMP logo.jpg](unb-20251231_g2.jpg)<br>

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

Board of Directors and Stockholders

Union Bankshares, Inc. and Subsidiary

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheet of Union Bankshares, Inc. and Subsidiary (the Company) as of December 31, 2025, and the related consolidated statements of income, comprehensive income, changes in stockholders' equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025, and the consolidated results of their operations and their cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.

We have also audited, in accordance with U.S. generally accepted auditing standards, the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in the Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 20, 2026, expressed an unmodified opinion.

The financial statements of the Company as of December 31, 2024 were audited by Berry, Dunn, McNeil & Parker, LLC whose report dated March 25, 2025 expressed an unmodified opinion on those statements.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**berrydunn.com**

------

Board of Directors and Stockholders

Union Bankshares, Inc. and Subsidiary

**Critical Audit Matter**

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements, and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

***<u>Allowance for Credit Losses on Loans and Off-Balance Sheet Credit Exposures</u>***

As described in Notes 1, 6, and 7 to the Company's consolidated financial statements, the Company has a gross loan portfolio of $1.2 billion, related allowance for credit losses on loans of $8.4 million and an allowance for credit losses on off-balance sheet credit exposures of $1.1 million as of December 31, 2025. The Company's allowance for credit losses on loans and off-balance sheet credit exposures are material and complex estimates requiring significant management judgment in the evaluation of the credit quality and the estimation of inherent losses within the loan portfolio and off-balance sheet credit exposures.

The allowance for credit losses on loans represents the Company's estimate of expected credit losses over the expected life of the loans at the balance sheet date. The allowance for credit losses on loans is comprised of reserves measured on a collective (pool) basis based on a lifetime loss-rate model when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated on an individual basis.

For reserves measured on a collective (pool) basis, the Company uses the discounted cash flow method to estimate expected credit losses for all loan pools. For each of the loan segments, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, curtailments, time to recovery, and loss rates. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical benchmark data. The Company uses regression analysis of historical internal and peer data to determine suitable loss drivers to utilize when modeling lifetime loss rates. The Company also incorporates a reasonable and supportable forecast period, which reverts back to a historical loss rate. The combination of adjustments for credit expectations (default and loss) and timing expectations (prepayment, curtailment, and time to recovery) produces an expected cash flow stream at the instrument level that represents the sum of expected losses to determine the estimated allowance for credit losses on loans. The allowance for credit losses on loans evaluation also considers various qualitative factors, including changes in policy and/or underwriting standards, actual or expected changes in economic trends and conditions, changes in the nature and volume of the portfolio, changes in credit and lending staff/administration, problem loan trends, credit risk concentrations, loan review results, changes in the value of underlying collateral for loans, and changes in the regulatory and business environment.

The allowance for credit losses on off-balance sheet credit exposures represents the estimate of probable credit losses inherent in unfunded commitments to extend credit as of the balance sheet date. Unfunded commitments to extend credit include unused portions of lines of credit, commitments to originate loans, and standby and commercial letters of credit. The process used to determine the allowance for credit losses for these exposures is consistent with the process for determining the allowance for credit losses on loans, as adjusted for estimated funding probabilities.

------

Board of Directors and Stockholders

Union Bankshares, Inc. and Subsidiary

Changes in these judgments and assumptions could have a material effect on the Company's financial results. Auditing these complex judgments and assumptions involves especially challenging auditor judgment due to the nature and extent of audit evidence and effort required to address these matters, including the extent of specialized skill or knowledge needed. The primary procedures we performed to address this critical audit matter included:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Testing the design of controls relating to management's review of loans, assignment of risk ratings, and consistency of application of accounting policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Evaluating the reasonableness of judgments, assumptions, and sources of data used by management in forming its expected cash flow streams by analyzing data used in developing the judgments and assumptions, including assessment of whether there were additional sources of data relevant to the loan portfolio not used by management.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Comparing the judgments and assumptions documented by management to the allowance for credit loss model for consistency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Evaluating the appropriateness of inputs and factors that the Company used in forming the qualitative loss factors and assessing whether such inputs and factors were relevant, reliable, and reasonable for the purpose used.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Evaluating the appropriateness of estimated funding probabilities used in the calculation of the allowance for credit losses on off-balance sheet credit exposures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Evaluating the appropriateness of the Company's loan risk rating policy and testing the consistency of its application.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Evaluating the appropriateness of specific reserves for individually evaluated loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Verifying the mathematical accuracy and computation of the allowance for credit losses on loans and off-balance sheet credit exposures by re-performing or independently calculating significant elements of the allowance for credit losses on loans and off-balance sheet credit exposures based on relevant source documents.

We have served as the Company's auditor since 2025.

---

| |
|:---|
| ![BDMP signature.jpg](unb-20251231_g3.jpg) |
| BDMP Assurance, LLP |

---

Manchester, New Hampshire

March 20, 2026

Vermont Registration No. 92-0000278

PCAOB registration No. 7293

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**Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure**

None.

**Item 9A. Controls and Procedures**

**Evaluation of Disclosure Controls and Procedures.** The Company's Chief Executive Officer and Chief Financial Officer, with the assistance of the Disclosure Control Committee, evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of December 31, 2025. Based on this evaluation they concluded that those disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files with the Commission is accumulated and communicated to the Company's management, including its principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required information.

**Management's Report on Internal Control Over Financial Reporting.** The Company's management is responsible for establishing and maintaining adequate internal controls over financial reporting, as such term is defined in the Securities Exchange Act Rule 13a-15(f). The Company's management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the Company's internal control over financial reporting based on the *Internal Control - Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on the evaluation, the Company's management concluded that the Company's internal control over financial reporting was effective as of December 31, 2025.

BDMP Assurance, LLP, an independent registered public accounting firm, which has audited and reported on the consolidated financial statements contained in this Annual Report on Form 10-K, has issued its written audit report on the Company's internal control over financial reporting. This report can be found on page 93.

There were no changes in the Company's internal controls over financial reporting during the fourth quarter of 2025 that have materially affected, or that are reasonably likely to materially affect, the Company's internal controls over financial reporting. While the Company believes that its existing disclosure controls and procedures have been effective to accomplish these objectives, the Company intends to continue to examine, refine and formalize its disclosure controls and procedures and to monitor ongoing developments in this area.

**Item 9B. Other Information**

None

**Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections**

Not applicable.

**PART III**

**Item 10. Directors, Executive Officers and Corporate Governance** 

The following information from the Company's Proxy Statement for the 2026 Annual Meeting of Shareholders is hereby incorporated by reference:

Listing of the names, ages, principal occupations, business experience and specific qualifications of the directors and nominees under the caption "PROPOSAL 1: TO ELECT DIRECTORS".

Listing of the names, ages, titles and business experience of the executive officers and named executives under the caption "EXECUTIVE OFFICERS" and, with respect to the named executive officers who are also directors, under the caption "PROPOSAL 1: TO ELECT DIRECTORS".

Information regarding compliance with Section 16(a) of the Securities Exchange Act of 1934 under the caption "SHARE OWNERSHIP INFORMATION - Delinquent Section 16(a) Reports".

Information regarding the composition and meetings of the Audit Committee, and the Audit Committee financial expert, under the caption "PROPOSAL 1: TO ELECT DIRECTORS - Board Committees and Corporate Governance - Audit Committee."

Information regarding the Company's Insider Trading Policy under the caption "PROPOSAL 1: TO ELECT DIRECTORS - Board Committees and Corporate Governance - Insider Trading Policy."

------

The Company has adopted a Code of Ethics for Senior Financial Officers and the Chief Executive Officer and a Code of Ethics for all directors, officers and employees. A request for a copy of either of the Company's Codes of Ethics can be made either in writing to Bethany Moore, Assistant Corporate Secretary, Union Bankshares, Inc., PO Box 667, Morrisville, VT 05661, or by email at <u>ubexec@ublocal.com.</u> A copy can also be found on the Company's investor relations page accessed via Union Bank's website at <u>www.ublocal.com</u>. The Company will make any legally required disclosures regarding amendments to, or waivers of provisions of its Codes of Ethics in accordance with the rules and regulations of the SEC including posting the codes on the Company's investor relations page accessed via Union Bank's website at <u>www.ublocal.com</u>.

**Item 11. Executive Compensation**

The following information from the Company's Proxy Statement for the 2026 Annual Meeting of Shareholders is hereby incorporated by reference:

Information regarding compensation of directors under the caption "PROPOSAL 1: TO ELECT DIRECTORS - Directors' Compensation."

Information regarding executive officer and named executive compensation and benefit plans under the captions - "EXECUTIVE COMPENSATION" and "COMPENSATION COMMITTEE REPORT."

Information regarding management interlocks and certain transactions is omitted, in accordance with the regulatory relief available to smaller reporting companies in Release Nos. 33-10513 and 34-83550.

**Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters**

The following information from the Company's Proxy Statement for the 2026 Annual Meeting of Shareholders is hereby incorporated by reference:

Information regarding the share ownership of management and principal shareholders under the caption "SHARE OWNERSHIP INFORMATION - Share Ownership of Management and Principal Holders."

The following table summarizes certain information regarding securities available for issuance under the Company's equity compensation plan as of December 31, 2025:

**Equity Compensation Plan Information as of December 31, 2025:**

---

| | | | |
|:---|:---|:---|:---|
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
|  | (a)(2) | (b)(3) | (c)(4) |
| Equity compensation plans approved by security holders |  |  |  |
| &nbsp;&nbsp;2014 Equity Incentive Plan (1) |  | $— |  |
| &nbsp;&nbsp;2024 Equity Incentive Plan | 15706 |  | 228245 |
| Equity compensation plans not approved by security holders |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | 15706 | $— | 228245 |

---

____________________

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(1)The only outstanding grants under the 2014 Equity Plan as of December 31, 2025 were RSUs with respect to 2,658 shares of common stock, which are subject to time and/or performance vesting conditions, and which do not have any exercise features. No further grants have been made under that plan, which has been replaced by the 2024 Equity Plan. Please refer to Note 16 of the Company's audited consolidated financial statements in Part II, Item 8 of this Annual Report for information on outstanding RSU grants under the 2014 Equity Plan.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(2)Represents shares issuable upon vesting of outstanding RSUs granted under the 2024 Equity Plan for which performance conditions have been satisfied but which are also subject to time and/or performance vesting conditions.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(3)There were no outstanding stock options; RSUs not included as they do not include an exercise price.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(4)All of such shares are available for issuance pursuant to future awards under the 2024 Equity Plan.*

**Item 13. Certain Relationships and Related Party Transactions, and Director Independence**

The following information from the Company's Proxy Statement for the 2026 Annual Meeting of Shareholders is hereby incorporated by reference:

------

Information regarding transactions with management and directors under the caption "PROPOSAL 1: TO ELECT DIRECTORS - Transactions with Management and Directors."

Information regarding Director independence under the caption "PROPOSAL 1: TO ELECT DIRECTORS - Director Independence."

**Item 14. Principal Accountant Fees and Services**

The following information from the Company's Proxy Statement for the 2026 Annual Meeting of Shareholders is hereby incorporated by reference:

Information on fees paid to the Independent Auditors set forth under the caption "PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS - Audit Fees."

Description of Audit Committee pre-approval guidelines set forth under the caption "PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS - Audit Committee Preapproval Guidelines."

**PART IV**

**Item 15. Exhibits, Financial Statement Schedules**

(a)Documents Filed as Part of this Report:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The following consolidated financial statements are included:

1)Consolidated Balance Sheets at December 31, 2025 and 2024

2)Consolidated Statements of Income for the years ended December 31, 2025 and 2024

3)Consolidated Statements of Comprehensive Income for the years ended December 31, 2025 and 2024

4)Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2025 and 2024

5)Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024

6)Notes to the Consolidated Financial Statements

7)Report of Independent Registered Public Accounting Firm

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)All Financial Statement Schedules are omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.

(b)The following exhibits are either filed herewith as part of this report, or are incorporated herein by reference:

---

| | |
|:---|:---|
| **Item No:** | **Item No:** |
| <u>[3.1](https://www.sec.gov/Archives/edgar/data/706863/000095015607000506/ex3_67922.txt)</u> | Amended and Restated Articles of Incorporation of Union Bankshares, Inc. (as of August 1, 2007), previously filed with the Commission as Exhibit 3.1 to the Company's June 30, 2007 Form 10-Q and incorporated herein by reference. |
| <u>[3.2](https://www.sec.gov/Archives/edgar/data/706863/000070686324000075/exhibit31bylaws2024.htm)</u> | Bylaws of Union Bankshares, Inc., as amended and restated, previously filed with the Commission on November 21, 2024 as Exhibit 3.1 to Form 8-K and incorporated herein by reference. |
| <u>[4.1](https://www.sec.gov/Archives/edgar/data/706863/000070686320000044/a123119exhibit41.htm)</u> | Description of Common Stock, previously filed as Exhibit 4.1 to the Company's 2019 Form 10-K and incorporated herein by reference. |
| <u>[4.2](https://www.sec.gov/Archives/edgar/data/706863/000070686321000119/exhibit41-subdebt08x2021.htm)</u> | Form of 3.25% Fixed-to-Floating Rate Subordinated Debentures Due 2031 (Qualified Institutional Buyers), previously filed with the Commission on August 27, 2021 as Exhibit 4.1 to Form 8-K and incorporated herein by reference. |
| <u>[4.3](https://www.sec.gov/Archives/edgar/data/706863/000070686321000119/exhibit42-subdebt08x2021.htm)</u> | Form of 3.25% Fixed-to-Floating Rate Subordinated Debentures Due 2031 (Accredited Investors), previously filed with the Commission on August 27, 2021 as Exhibit 4.2 to Form 8-K and incorporated herein by reference. |
| <u>[10.1](https://www.sec.gov/Archives/edgar/data/706863/000095015609000063/x103.htm)</u> | 2008 Amended and Restated Nonqualified Deferred Compensation Plan of Union Bankshares, previously filed with the Commission as Exhibit 10.3 to the Company's 2008 Form 10-K and incorporated herein by reference.\* |
| <u>[10.2](https://www.sec.gov/Archives/edgar/data/706863/000070686321000047/a123120exhibit102.htm)</u> | 2020 Amended and Restated Executive Nonqualified Excess Plan of Union Bankshares Inc. and Subsidiary, previously filed with the Commission as Exhibit 10.2 to the Company's 2020 Form 10-K and incorporated herein by reference.\* |
| <u>[10.3](https://www.sec.gov/Archives/edgar/data/706863/000095015609000063/ex105.htm)</u> | First Amendment to the Union Bankshares, Inc. Executive Nonqualified Excess Plan, previously filed with the Commission as Exhibit 10.5 to the Company's 2008 Form 10-K and incorporated herein by reference.\* |
| <u>[10.4](https://www.sec.gov/Archives/edgar/data/706863/000070686312000005/exhibit101stipp.htm)</u> | Short Term Incentive Performance Plan, previously filed with the Commission on February 9, 2012 as Exhibit 10.1 to Form 8-K and incorporated herein by reference.\* |
| <u>[10.5](https://www.sec.gov/Archives/edgar/data/706863/000070686324000030/proxy2023.htm#i30c46be95efd42f390ff073976d0feeb_460)</u> | Union Bankshares, Inc. 2024 Equity Incentive Plan, previously filed with the Commission on April 2, 2024 at pages A-1 through A-17 of the definitive proxy statement for the 2024 Annual Meeting of the Company's Shareholders, and incorporated herein by reference.\* |
| <u>[10.6](a123125ex106-employagree.htm)</u> | Employment Agreement dated February 26, 2026, between Union Bankshares, Inc. and its wholly-owned subidiary, Union Bank, and Jeffery F. Weidley.\* |
| <u>[10.7](a123125exhibit107-cic.htm)</u> | Change in Control Agreement dated February 26, 2026, between Union Bank and Jeffery F. Weidley, and joined in by the Company.\* |

---

------

---

| | |
|:---|:---|
| **Item No:** | **Item No:** |
| <u>[10.8](https://www.sec.gov/Archives/edgar/data/706863/000070686321000117/exhibit101-cicagreement08x.htm)</u> | Amended and Restated Change in Control Agreement dated August 18, 2021, between Union Bank and David S. Silverman, and joined in by the Company, previously filed with the Commission on August 24, 2021 as Exhibit 10.1 to Form 8-K and incorporated herein by reference.\* |
| <u>[10.9](https://www.sec.gov/Archives/edgar/data/706863/000070686321000117/exhibit102-cicagreement08x.htm)</u> | Form of Amended and Restated Change in Control Agreement dated August 18, 2021, between Union Bank and Karyn J. Hale, and joined in by the Company, previously filed with the Commission on August 24, 2021 as Exhibit 10.2 to Form 8-K and incorporated herein by reference.\* |
| <u>[10.10](https://www.sec.gov/Archives/edgar/data/706863/000070686321000117/exhibit103-cicagreement08x.htm)</u> | Form of Change in Control Agreement dated August 18, 2021, between Union Bank and each of four senior managers of Union Bank, and joined in by the Company, previously filed with the Commission on August 24, 2021 as Exhibit 10.3 to Form 8-K and incorporated herein by reference.\* |
| <u>[10.11](https://www.sec.gov/Archives/edgar/data/706863/000070686324000081/exhibit10rsuawardcertifica.htm)</u> | Form of Restricted Stock Unit Award Certificate under the Company's 2024 Equity Incentive Plan, previously filed with the Commission as Exhibit 10 to the Company's registration statement on Form S-8 (File No. 333-283389) and incorporated herein by reference.\* |
| <u>[10.12](https://www.sec.gov/Archives/edgar/data/706863/000070686321000047/a123120exhibit1013.htm)</u> | Supplemental Executive Retirement Agreement dated March 1, 2020 between David S. Silverman and Union Bank, previously filed with the Commission as Exhibit 10.13 to the Company's 2020 Form 10-K and incorporated herein by reference.\* |
| <u>[10.13](https://www.sec.gov/Archives/edgar/data/706863/000070686321000119/exhibit101-subdebt08x2021.htm)</u> | Form of Subordinated Note Purchase Agreement dated as of August 26, 2021 between the Company and the several Note Purchasers, previously filed with the Commission on August 27, 2021 as Exhibit 10.1 to Form 8-K and incorporated herein by reference. |
| <u>[19.1](https://www.sec.gov/Archives/edgar/data/706863/000070686324000028/a123123exhibit191.htm)</u> | Union Bankshares, Inc. Insider Trading Policy, previously filed with the Commission on March 26, 2024 as Exhibit 19.1 to the Company's 2023 Form 10-K and incorporated herein by reference. |
| <u>[21.1](a123125exhibit211.htm)</u> | Subsidiaries of the Company. |
| <u>[23.1](a123125exhibit231.htm)</u> | Consent of BDMP Assurance, LLP. |
| <u>[31.1](a123125exhibit311.htm)</u> | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| <u>[31.2](a123125exhibit312.htm)</u> | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| <u>[32.1](a123125exhibit321.htm)</u> | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\*\* |
| <u>[32.2](a123125exhibit322.htm)</u> | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\*\* |
| <u>[97](https://www.sec.gov/Archives/edgar/data/706863/000070686324000028/a123123exhibit97.htm)</u> | Union Bankshares, Inc. Clawback Policy, previously filed with the Commission on March 26, 2024 as Exhibit 97 to the Company's 2023 Form 10-K and incorporated herein by reference. |
| 101 | The following materials from the Company's Annual Report on Form 10-K for the year ended December 31, 2025 formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) the audited consolidated balance sheets, (ii) the audited consolidated statements of income for the years ended December 31, 2025 and 2024, (iii) the audited consolidated statements of comprehensive income, (iv) the audited consolidated statements of changes in stockholders' equity, (v) the audited consolidated statements of cash flows and (vi) related notes. |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |

---

____________________

\*&nbsp;&nbsp;&nbsp;&nbsp;denotes compensatory plan or agreement

\*\*&nbsp;&nbsp;&nbsp;&nbsp;This exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

(c)Not applicable.

**Item 16. Form 10-K Summary**

Not applicable.

------

**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, as of March 20, 2026.

Union Bankshares, Inc.

---

| | | |
|:---|:---|:---|
| By: | /s/ David S. Silverman | /s/ Karyn J. Hale |
|  | David S. Silverman | Karyn J. Hale |
|  | Chief Executive Officer and President | Chief Financial Officer |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated as of March 20, 2026.

---

| | |
|:---|:---|
| **Name** | **Title** |
| /s/ David S. Silverman | Director, Chief Executive Officer and President |
| David S. Silverman | (Principal Executive Officer) |
| /s/ Karyn J. Hale | Chief Financial Officer |
| Karyn J. Hale | (Principal Financial/Accounting Officer) |
| /s/ Cornelius J. Van Dyke | Director, Chairman of the Board |
| Cornelius J. Van Dyke | |
| /s/ Timothy W. Sargent | Director, Vice Chairman of the Board |
| Timothy W. Sargent | |
| /s/ Dawn D. Bugbee | Director |
| Dawn D. Bugbee | |
| /s/ Mary K. Parent | Director |
| Mary K. Parent | |
| /s/ Nancy C. Putnam | Director |
| Nancy C. Putnam | |
| /s/ Gregory D. Sargent | Director |
| Gregory D. Sargent | |
| /s/ Janet P. Spitler | Director |
| Janet P. Spitler | |

---

------

**EXHIBIT INDEX \*\*\***

---

| | |
|:---|:---|
| <u>[10.6](a123125ex106-employagree.htm)</u> | Employment Agreement dated February 26, 2026, between Union Bankshares, Inc. and its wholly-owned subidiary, Union Bank, and Jeffery F. Weidley.\* |
| <u>[10.7](a123125exhibit107-cic.htm)</u> | Change in Control Agreement dated February 26, 2026, between Union Bank and Jeffery F. Weidley, and joined in by the Company.\* |
| <u>[21.1](a123125exhibit211.htm)</u> | Subsidiaries of the Company. |
| <u>[23.1](a123125exhibit231.htm)</u> | Consent of BDMP Assurance, LLP. |
| <u>[31.1](a123125exhibit311.htm)</u> | Certifications of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| <u>[31.2](a123125exhibit312.htm)</u> | Certifications of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| <u>[32.1](a123125exhibit321.htm)</u> | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\*\* |
| <u>[32.2](a123125exhibit322.htm)</u> | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\*\* |
| 101 | The following materials from the Company's Annual Report on Form 10-K for the year ended December 31, 2025 formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) the audited consolidated balance sheets, (ii) the audited consolidated statements of income for the years ended December 31, 2025 and 2024, (iii) the audited consolidated statements of comprehensive income, (iv) the audited consolidated statements of changes in stockholders' equity, (v) the audited consolidated statements of cash flows and (vi) related notes. |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |

---

____________________

\*&nbsp;&nbsp;&nbsp;&nbsp;denotes compensatory plan or agreement

\*\*&nbsp;&nbsp;&nbsp;&nbsp;This exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

\*\*\*&nbsp;&nbsp;&nbsp;&nbsp;other than exhibits incorporated by reference to prior filings.

## Exhibit 10.6

**Exhibit 10.6**

**EMPLOYMENT AGREEMENT**

**THIS EMPLOYMENT AGREEMENT** (the "**Agreement**") is made and entered into this 26th day of February, 2026, by and between Union Bankshares, Inc., a Vermont corporation with offices in Morrisville, Vermont (the "**Company**"), Union Bank, a Vermont-chartered Bank and wholly-owned subsidiary of the Company (the "**Bank**" and together with the Company, the "**Employer**"), and Jeffrey F. Weidley (the "**Executive**" and together with the Employer, the "**Parties**" and individually, a "**Party**").

**WHEREAS**, the Employer desires to employ the Executive, and the Executive desires to accept such employment, upon the terms and conditions set forth herein,

**NOW, THEREFORE,** in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

**Section 1.DEFINITIONS** 

Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms as set forth in ***Exhibit A*** hereto.

**Section 2.EMPLOYMENT**

As of the Effective Date, the Employer hereby employs the Executive, and the Executive hereby accepts employment with the Employer, on the terms and conditions set forth in this Agreement.

**Section 3.TITLES, DUTIES AND BOARD SERVICE** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)Titles and Transition.*** As of the Effective Date, the Executive shall be employed full-time as the President of the Company and the Bank. During a transition period beginning on the Effective Date and ending at the close of business on July 3, 2026 (the "**Transition Period**"), the Executive shall work with the current Chief Executive Officer ("**CEO**") of the Company and the Bank to familiarize himself with the Employer's management, operations, policies and procedures in order to facilitate a smooth and efficient transition of the Employer's executive management. During the Transition Period, the Executive shall report jointly to the Boards of Directors of the Company and the Bank (together, the "**Boards**") and the CEO. Effective as of the close of business on July 3, 2026, the Executive shall assume the additional title and duties of the CEO of the Company and the Bank and thereafter shall report solely to the Boards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)Duties.*** In his roles as President and Chief Executive Officer of the Company and the Bank following the Transition Period, the Executive shall undertake the overall management of the Company and the Bank, subject to supervision of the Boards, and shall have such duties, responsibilities and authority as customarily attend such positions and as may be assigned to him by the Boards from time to time. The Executive shall faithfully perform the duties and responsibilities of his positions; shall devote substantially all of his business time and energies to the business and affairs of the Employer; and shall use his best efforts, skills and abilities to promote the Employer's interests. The Executive may not engage in any business activities or render any services of a business, commercial, or professional nature (whether or not for compensation) that, in the judgment of the Board of Directors of the Company or the Bank, would

------

adversely affect the Executive's performance of his responsibilities and duties hereunder or would be inconsistent or conflict with the business interests of the Employer, unless the Executive receives the prior written consent of the Employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(c)Board Service.*** The Executive will also serve as a member of the Boards of Directors of the Company and the Bank, subject to any required approval by shareholders. The Executive shall be appointed to the Board of Directors of the Bank, effective as of the Effective Date, and shall be nominated to stand for election to the Board of Directors of the Company at the 2026 annual meeting of shareholders. No additional compensation shall be paid to the Executive for his service on the Boards.

**Section 4.TERM OF EMPLOYMENT**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)Initial Term.*** The Executive's employment shall be for an initial term of three (3) years commencing on the Effective Date and ending on the third anniversary of the Effective Date, unless terminated sooner pursuant to this Agreement. The Employer shall notify the Executive in writing (a "**Notice of Non-Renewal**") not less than ninety (90) days prior to the third anniversary of the Effective Date if the Employer does not intend to extend the Executive's employment in accordance with Section 4(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)Extension of Term.*** Unless this Agreement is not renewed by the Employer in accordance with Section 4(a), this Agreement shall be deemed automatically extended after the initial term for an additional one (1) year term commencing on the third anniversary of the Effective Date. After the initial one year extension of the Term, this Agreement shall renew for successive one year periods, unless and until the Employer provides a Notice of Non-Renewal to the Executive at least ninety (90) days prior to the end of the then current one year renewal term. During any extension of the term of this Agreement under this Section 4(b), all other provisions of this Agreement shall remain in effect. References in this Agreement to the "**Term**" of the Agreement, shall include the initial term and any extension under this Section 4(b) or under Section 4(c), as the context may require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(c)Extension of Term upon Change in Control.*** The parties shall enter into a Change in Control Agreement on or about the date hereof containing mutually agreeable terms. Notwithstanding anything to the contrary contained herein, upon a Change in Control, if the then remaining term of the Executive's employment hereunder is less than two (2) years, the term of this Agreement shall be extended automatically to a date that is two (2) years following such Change in Control. During any such extension, all other provisions of this Agreement shall remain in effect, except as otherwise provided in Section 9(f).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(d)Effect of Expiration of Term.*** Upon expiration of this Agreement pursuant to a timely Notice of Non-Renewal in accordance with Section 4(a) or 4(b), the Executive's employment with the Employer shall cease, and this Agreement shall terminate without further obligations to the Executive, except as provided under Section 9(a). In addition, the Executive's service on the Boards of Directors of the Company and the Bank shall terminate, in accordance with Section 8(g) hereof.

**Section 5.COMPENSATION AND RELATED MATTERS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)Base Salary***. Beginning on the Effective Date, the Employer shall pay the Executive a base salary at the annual rate of Five Hundred Thousand Dollars ($500,000.00) ("**Base Compensation**"). The Base Compensation shall be paid in substantially equal installments in accordance with the Bank's compensation policies and procedures on the payroll dates established

------

by the Bank for its senior executive officers. The Base Compensation shall be reviewed annually by the Compensation Committee of the Company's Board of Directors and may be adjusted in the Company's sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)Other Executive Compensation***.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(i)Short-Term Incentive Plan ("STIPP")****.* The Executive shall be eligible to participate in the Company's annual Short Term Incentive Performance Plan, as such plan may be amended from time to time in the Company's sole discretion. Awards, if any, to the Executive under the STIPP attributable to the 2026 performance period shall be prorated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(ii)Long-Term Incentive Plan ("LTIP"); Initial Award.*** The Executive shall be eligible to participate in the Company's 2024 Equity Incentive Plan. Awards, if any, under the LTIP shall be in such form and amount and subject to such terms and conditions (including vesting) as the Company's Board may determine from time to time in the Company's sole discretion. In addition, as of the Effective Date, the Executive shall receive an initial grant of 3,000 Restricted Stock Units ("**RSUs**"), to be settled solely in common stock of the Company on a one-for-one basis, with one-third of the grant vesting on December 15, 2026, and one-third vesting on each of the first and second anniversaries of December 15, 2026, subject to the Executive's continued employment through the applicable vesting date(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(iii)Split Dollar Insurance.*** In addition to the $300,000 life insurance policy provided to the Employer's senior executives under its group life insurance plan, within one year following the Effective Date, the Bank shall purchase a $700,000 split dollar Bank-owned policy on the Executive's life, under the same terms (other than policy face amount) applicable to the Employer's other senior executives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(iv)Other Executive Benefit Plans.*** The Executive shall be eligible to participate in such other executive benefit plans as the Employer may make available to its executives from time to time, in the Employer's sole discretion, including the Employer's Executive Nonqualified Excess Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(c)Copies of Executive Benefit Plans.*** The Employer has provided to the Executive, or otherwise made available to him, copies of the executive benefit plans referenced in section 5(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(d)Clawback.*** The Executive agrees that incentive compensation that Employer pays or awards to the Executive is subject to recoupment (i.e., clawback) by the Employer to the extent required under the Company's Clawback Policy, as it may be amended from time to time, or as otherwise required by law.

**Section 6. OTHER BENEFITS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)Benefits.*** The Executive shall be eligible to participate in such broad-based medical, dental, disability, retirement, life insurance, and other employee benefits on the same basis as may be provided to the Employer's full-time employees. All such broad-based benefits may be created, changed, suspended or terminated from time to time in the Employer's sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)Paid Time Off.*** The Executive shall be entitled to reasonable paid time off ("**PTO**"), which shall encompass and include vacations and sick leave, consistent with the Employer's current or established PTO policies. For purposes of calculating the PTO to which the Executive is entitled as of the Effective Date, the Employer shall consider the Executive as having fifteen (15) years of service.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(c)Automobile.*** The Employer shall provide the Executive a Company owned automobile for his exclusive use and shall pay the associated fuel, maintenance and insurance costs and expenses. The Executive shall be responsible for any income tax liability for personal use of the vehicle.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(d)Expense Reimbursement***. The Employer shall reimburse the Executive for all ordinary and necessary business expenses which are incurred by the Executive in the performance of his duties hereunder and which are subject to reimbursement in accordance with the Employer's expense reimbursement policy, as in effect from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(e)Relocation Assistance.*** In order to help defray expenses incurred or to be incurred by the Executive in connection with the relocation of his primary residence required by Section 7(b), the Employer shall reimburse the Executive for the reasonable, documented cost of packing, moving and unpacking the contents of his current residence to his new residence in Vermont. In addition, the Employer will provide a lump sum relocation assistance benefit to the Executive in the amount of $25,000, to be used at the Executive's sole discretion to help defray other ancillary expenses associated with his relocation to Vermont.

**Section 7.PRIMARY WORK LOCATION; RELOCATION OF RESIDENCE**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)Work Location.*** The Executive's primary work location shall be at the Employer's main office at 20 Lower Main Street in Morrisville, Vermont, and the Executive shall be expected to be present at such office on business days, unless otherwise engaged in out-of-office work-related activities or occasional travel to the Bank's branches or non-branch offices.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)Relocation of Residence.*** The Executive agrees to relocate his primary residence to within 50 road miles of Morrisville, Vermont on or before May 20, 2026.

**Section 8.TERMINATION**

This Agreement may terminate prior to expiration of the Term in accordance with the provisions of this Section 8. For the avoidance of doubt, (i) the provisions of this Section 8 and of Section 9 shall apply only in respect of a termination of employment not in connection with a Change in Control and termination of the Executive's employment in connection with a Change in Control shall be governed instead by the provisions of the Change in Control Agreement; and (ii) expiration of the Term of this Agreement pursuant to the Employer's non-renewal of this Agreement under Section 4(a) or 4(b) shall not be considered a termination of the Executive's employment by the Employer within the meaning of Sections 8(a) or 8(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)By the Employer for Cause.*** The Employer may elect to terminate this Agreement and to terminate the Executive's employment at any time for Cause. Such termination shall be effective immediately upon Notice of Termination to the Executive. If the Employer terminates the Executive's employment for Cause during the Term, this Agreement shall terminate without further obligations to the Executive, except as provided under Section 9(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)By the Employer without Cause.*** The Employer may elect to terminate this Agreement and to terminate the Executive's employment at any time and for any reason during the Term by giving the Executive forty-five (45) days' prior written notice of his termination of employment. The Executive's termination of employment shall occur on the date specified in such written notice. If the Employer terminates the Executive's employment without Cause during the Term, this Agreement shall terminate without further obligations to the Executive, except as provided under Section 9(c).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(c)By the Executive without Good Reason.*** The Executive may elect to terminate this Agreement and to voluntarily resign his employment at any time for any reason under circumstances other than those in Section 8(d) by giving the Employer not less than ninety (90) days' prior written notice of his termination of employment. The Executive's termination of employment shall occur on the date specified in such written notice, unless the Employer elects, in its sole discretion, to terminate the Executive's employment as of a date prior thereto. If the Executive terminates this Agreement pursuant to this Section 8(c) during the Term, this Agreement shall terminate without further obligations to the Executive, except as provided under Section 9(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(d)By the Executive for Good Reason.*** The Executive may elect to terminate this Agreement and his employment for Good Reason. Before the Executive may terminate this Agreement for Good Reason, the Executive must provide the Employer with a Notice of Termination describing the existence of the condition or conditions giving rise to Good Reason no later than ninety (90) days after the date of the initial occurrence of such condition or conditions, and the Employer must have failed to remedy such condition or conditions within the thirty (30)-day period following such Notice of Termination. If the Executive terminates this Agreement for Good Reason during the Term, this Agreement shall terminate without further obligations to the Executive, except as provided under Sections 9(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(e)Death.*** The Executive's employment shall terminate on account of the Executive's death. If the Executive's employment is terminated on account of the Executive's death during the Term, this Agreement shall terminate without further obligations to the Executive's estate or other legal representatives under this Agreement, except as provided under Section 9(d).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(f)Disability.*** The Employer may elect to terminate this Agreement and to terminate the Executive's employment on account of the Executive's Disability. Such termination shall be effective immediately upon Notice of Termination to the Executive. If the Executive's employment is terminated on account of the Executive's Disability during the Term, this Agreement shall terminate without further obligations to the Executive, except as provided under Section 9(d).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(g)Resignation from Boards of Directors.*** In the event of (i) termination of the Executive's employment for any reason (including, without limitation, termination by the Employer without Cause), or (ii) expiration of the Term of this Agreement pursuant to Section 4, the Executive's service as a Director of the Company and the Bank, and any of their affiliates, shall immediately terminate. The Executive hereby acknowledges and agrees that this Section 8(g) shall constitute the Executive's notice of resignation from the Boards of Directors of the Company and the Bank and any of their affiliates, effective upon Expiration of the Term or termination of the Executive's employment with the Employer for any reason, and without need of any further writing.

**Section 9.PAYMENTS TO EXECUTIVE UPON TERMINATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a) Generally.*** Subject to this Section 9, the Executive (or the Executive's estate or other legal representatives if the Agreement terminates on account of the Executive's death) shall be entitled to receive the following (together, "**Accrued Benefits**") upon termination of the Executive's employment upon (A) expiration of this Agreement due to non-renewal or (B) termination under any of the circumstances contemplated in Sections 8(a) through 8(f):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Payment of the Executive's earned but unpaid Base Compensation (including, without limitation, all items which constitute wages under applicable law) as of the effective date of the Executive's termination of employment, with such payment to be

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made in accordance with the Employer's compensation policies and procedures but in no event later than the date required by applicable law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Payment of the Executive's earned but unused PTO as of the effective date of the Executive's termination of employment, with such payment to be made in accordance with the Employer's PTO policy, subject, however, to the special calculation rule in Section 6(b); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)All accrued or vested rights and benefits (if any) to which the Executive is entitled due to or upon his termination of employment as required, independent of this Agreement, by the terms of any employee benefit plans and programs of the Employer in existence as of the date of the Executive's termination of employment, including the plans and benefit programs referenced in Sections 5(b) and 6, and the terms of any grants or awards thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)Termination by the Employer for Cause or by the Executive without Good Reason.*** If the Employer terminates the Executive's employment for Cause pursuant to Section 8(a) or the Executive terminates his employment without Good Reason pursuant to Section 8(c), the Executive shall be entitled to receive payment of his Accrued Benefits and no other compensation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(c)Termination by the Employer without Cause or by the Executive for Good Reason; Severance Compensation.*** If the Employer terminates the Executive's employment without Cause or the Executive terminates his employment for Good Reason, the Executive shall be entitled to receive the following: (i) his Accrued Benefits and (ii) subject to Executive's compliance with Section 9(e), a lump sum payment equal to eighteen (18) months of Base Compensation, calculated at the annual rate in effect on the date of termination, plus one and one-half (1.5) times the amount of the Executive's target-level award under the STIPP for the year in which the termination occurs, expressed as percentage of the Executive's Base Compensation.

Such payment shall be made as soon as reasonably practicable following the date as of which all requirements for payment have been satisfied (including, but not limited to, the execution and delivery of a Release, as described and defined in Section 9(e), and the passage of any applicable revocation period); *provided, however,* that, if payable, payment shall be made no later than the end of the "applicable 2 <sup>1</sup>⁄2 month period" (as that phrase is used for purposes of the short-term deferral exemption to Code Section 409A set forth in Treasury Regulation Section 1.409A-1(b)(4).

If the Executive shall die prior to the receipt of all such payments under this Section 9(c), the remainder of such payments shall be paid to his surviving spouse or, if she has no surviving spouse, to his estate.

Notwithstanding the above, any amounts payable by reason of the Executive's termination of employment under this Agreement that are subject to Code Section 409A that would, but for this paragraph, be payable during the six (6) month period following the Executive's termination of employment, shall not be paid during such six (6) month period, but shall instead be paid on the first day of the seventh (7<sup>th</sup>) month following the Executive's termination of employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(d)Termination Due to Death or Disability.*** In the event of termination of the Executive's employment on account of the Executive's death or on account of the Executive's Disability, the Executive or the Executive's estate or other legal representatives shall be entitled to receive payment of the Executive's Accrued Benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(e)Release and other Conditions.*** Payment and provision of the benefits described in clause (ii) of Section 9(c) hereof (the "**Severance Payment**") are subject to and expressly conditioned upon the Executive's execution and delivery to the Employer of a separation agreement and

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general release in favor of the Employer in form and substance satisfactory to the Employer (the "**Release**"), within forty-five (45) days after the Executive's termination of employment, which (after the expiration of any and all revocation periods and rights, if any) has become fully effective and irrevocable, releasing the Company, the Bank and their affiliates, and their respective directors, officers, employees, and agents from any and all claims or potential claims arising from or related to the Executive's employment with the Employer or the termination of that employment. In no event shall any Severance Payment be due or payable unless and until such Release becomes effective and all statutory rights to rescind, revoke or terminate the same have expired unexercised; and further provided that in no event may the Executive designate the calendar year in which a Severance Payment shall be paid. In the event (i) any of the Severance Payment may be considered nonqualified deferred compensation under Code Section 409A and (ii) the forty-five day period and applicable revocation period referenced herein span two calendar years, the Severance Payment shall be made in all events in the second of the two calendar years.

The Executive's entitlement to the Severance Payment shall be subject to and expressly conditioned upon the Executive's continuing compliance with his obligations under Sections 12, 13 and 14 of this Agreement. Anything in this Agreement to the contrary notwithstanding, if the Executive is determined by a court or arbitrator to have breached any of the provisions of Sections 12, 13 or 14 of this Agreement, then the Employer shall be entitled to obtain reimbursement from the Executive, and the Executive shall be obligated to reimburse the Company, for any Severance Payment previously paid to the Executive, in addition to exercising any and all other rights or remedies available to the Employer under this Agreement or applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(f)Payments in Connection with a Change in Control.*** Notwithstanding anything to the contrary in this Agreement, payments to which the Executive is entitled upon termination of his employment constituting a Qualifying Termination under the Change in Control Agreement shall be governed by the Change in Control Agreement and not this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(g)Return of Employer Property.*** Upon termination of this Agreement for any reason, the Executive shall return all property of the Employer, whether tangible or intangible and including, without limitation, the Confidential Information referenced in Section 13(b).

**Section 10.CODE SECTION 409A**

This Agreement is intended to comply with the requirements of Section 409A of the Code (including the exceptions thereto), to the extent applicable, and the Employer shall administer and interpret this Agreement in accordance with such requirements. If any provision contained in the Agreement conflicts with the requirements of Section 409A of the Code (or the exemptions intended to apply under the Agreement), the Agreement shall be deemed to be reformed to comply with the requirements of Section 409A of the Code (or the applicable exemptions thereto). Notwithstanding anything to the contrary herein, if a payment or benefit under this Agreement is due to a "separation from service" for purposes of the rules under Treas. Reg. § 1.409A-3(i)(2) (payments to specified employees upon a separation from service) and the Executive is determined to be a "specified employee" (as determined under Treas. Reg. § 1.409A-1(i) and related Company procedures), such payment shall, to the extent necessary to comply with the requirements of Section 409A of the Code, be made on the later of (i) the date specified by the provisions of this Agreement or (ii) the date that is six (6) months after the date of the Executive's separation from service (or, if earlier, the date of the Executive's death). Any payments that are delayed pursuant to this Section shall be accumulated and paid in a lump sum on the first day of the seventh month following Executive's separation from service (or, if earlier, upon the Executive's death) and the remaining payments (if any) shall begin on such date in accordance with their original schedule.

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Any severance benefits payable hereunder are intended not to constitute nonqualified deferred compensation subject to Section 409A of the Code pursuant to the (i) the "short-term deferral exception" set forth in Treas. Reg. § 1.409A-1(b)(4), (ii) the "two times severance exception" set forth in Treas. Reg. § 1.409A-1(b)(9)(iii), or (iii) the "limited payments exception" set forth in Treas. Reg. § 1.409A-1(b)(9)(v)(D). The short-term deferral exception, the two times severance exception and the limited payments exception shall be applied to any severance benefits payable hereunder, as applicable, in order of payment in such manner as results in the maximum exclusion of such severance benefits from treatment as nonqualified deferred compensation under Section 409A of the Code.

Notwithstanding any other provision of this Agreement, the Executive shall be solely liable, and the Employer shall not be liable in any way to the Executive, if any payment or benefit which is to be provided pursuant to this Agreement and which is considered nonqualified deferred compensation subject to Code Section 409A otherwise fails to comply with, or be exempt from, the requirements of Code Section 409A.

**Section 11.COMPLIANCE WITH FDI ACT**

Notwithstanding anything contained herein to the contrary, any payments to the Executive by the Employer, whether pursuant to this Agreement, the Change in Control Agreement, or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. §1828(k), and any regulations promulgated thereunder codified at 12 CFR Part 359.

**Section 12.NON-DISPARAGEMENT COVENANT** 

In consideration of the covenants of the Employer contained herein, during the Term and following expiration of this Agreement under Section 4 or termination of the Executive's employment for any reason under Section 8, the Executive shall not, in writing or orally, or through conduct, disparage, deprecate, discredit or vilify the Company or the Bank or any of their affiliates, or the Employer's services, products, customers, or employees or those of its affiliates. These prohibitions include, without limitation, any such statements made through use of social media sites, such as Facebook or X, or through postings on internet websites, chat rooms or other social media.

**Section 13.CONFIDENTIALITY**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)Protection of Confidential Information.*** In consideration of the covenants of the Employer contained herein, during the Term and for a period of two (2) years following expiration of this Agreement under Section 4 or termination of the Executive's employment for any reason under Section 8, the Executive shall not, without the prior written consent of the Company, the Bank, or any of their affiliates, use or disclose, or negligently permit any unauthorized person to use, disclose, or gain access to, any Confidential Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)Return of Confidential Information.*** Upon termination of employment, the Executive hereby agrees to deliver promptly to the Company, the Bank, or any of their affiliates all memoranda, notes, records, manuals, other documents, or access codes or access devices, including all copies of such materials in whatever form maintained, containing Confidential Information, whether made or compiled by the Executive or furnished to him from any source by virtue of the Executive's relationship with the Company, the Bank, or any of their affiliates.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)***Cooperation.*** Regardless of the reason for the Executive's cessation of employment, the Executive shall furnish such information as may be in the Executive's possession and will cooperate with the Company, the Bank, or any of their affiliates as may reasonably be requested in connection with any claims or legal actions in which the Company, the Bank, or any of their affiliates are or thereafter may become a party. The Employer shall reimburse the Executive for any reasonable out-of-pocket expenses the Executive incurs in order to satisfy his obligations under this Section 13(c).

**Section 14.NON-COMPETITION AND NON-SOLICITATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)Non-Competition Covenant.*** In consideration of the covenants of the Employer contained herein, the Executive covenants and agrees with the Employer that, during the Restricted Period and within a fifty (50) "air" mile radius from any location at which the Company, Bank, or any Subsidiary or affiliate maintains an office (the "**Geographic Restricted Area**"), the Executive shall not, without specific written approval of the Employer, directly or indirectly, whether on behalf of or in conjunction with any entity or person, and whether for the Executive's own benefit or account or for the benefit or account of any person or entity other than the Company, the Bank or any of their affiliates, engage in any banking, trust, wealth management, lending or other financial services as an owner, employee, independent contractor, consultant, director, representative, agent, or in any other capacity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)Non-Solicitation Covenants.*** In consideration of the covenants of the Employer contained herein, the Executive covenants and agrees with the Employer that, during the Restricted Period and within the Geographic Restricted Area, the Executive shall not, without specific written approval of the Employer, directly or indirectly, whether on behalf of or in conjunction with any entity or person, and whether for the Executive's own benefit or account or for the benefit or account of any person or entity other than the Company, the Bank or any of their affiliates:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(i)Interference with Business Relationships.*** Directly or indirectly request, advise or otherwise cause any past, present, or future client or customer of the Company, the Bank, or any of their affiliates to withdraw, curtail, or cancel his or her or its business with the Company, the Bank, or any of their affiliates; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(ii)Solicitation of Clients and Customers***. Directly or indirectly (A) cause, suggest, or induce others to call on any past, present, or future client or customer of the Company, the Bank, or any of their affiliates, for the purpose of (x) selling or providing to any such client or customer any products or services offered by (or that compete with the products or services offered by) the Company, the Bank, or any of their affiliates, (y) causing such client or customer to withdraw, curtail, or cancel his or her or its business with the Company, the Bank, or any of their affiliates, or (z) enticing, diverting, or taking away any such client or customer from the Company, the Bank, or any of their affiliates; or (B) solicit, canvas or accept any business on behalf of any other bank, insurance agency, trust, or other financial services business, other than the Company, the Bank, or any of their affiliates, from any past or present client or customer of the Company, the Bank, or any of their affiliates; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(iii)Solicitation of Employees and Others.*** During the Restricted Period, the Executive shall not, whether personally or in association with others, and whether on behalf of or in conjunction with any entity or person, directly or indirectly, by any means or device whatsoever, (A) solicit, aid in the solicitation of, induce, encourage, persuade or recruit, or attempt to solicit, induce, encourage, persuade or recruit, any person who is an

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employee, consultant, agent, or independent contractor of the Company, the Bank, or any of their affiliates, to terminate or alter such employment, retention or engagement or to apply for or accept employment or retention with any other person or entity, (b) hire or employ or attempt to hire or employ, or solicit for employment or any other engagement, or cause any other person, firm, corporation or other entity to hire or employ or attempt to hire or employ or solicit for employment or any other engagement, any person who is an employee, consultant, agent, or independent contractor of the Company, the Bank, or any of their affiliates, or (c) solicit, encourage or induce any person or entity known by him to have a contractual relationship with the Company, the Bank, or any of their affiliates to discontinue, terminate, cancel or refrain from entering into or expanding such contractual relationship.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(c)No Conflict with Executive's Other Agreements.*** The Executive represents and warrants that neither the Executive's employment with the Employer nor the Executive's performance of his obligations hereunder will conflict with or violate the Executive's obligations under the terms of any agreement with a previous employer or other party, including agreements to refrain from competing, directly or indirectly, with the business of such previous employer or other party. Prior to the Effective Date hereof, the Executive has provided to the Employer copies of all restrictive covenants (e.g., non-solicitation and non-competition agreements) to which he is a party in order to ensure Executive's compliance with this Section 14(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(d)Effect of Change in Control Agreement.*** Notwithstanding anything to the contrary herein, if the Executive experiences a Qualifying Termination of employment under the Change in Control Agreement, the non-disparagement, confidentiality, non-competition and non-solicitation covenants in Sections 12, 13 and 14 shall be superseded by the non-disparagement, confidentiality, non-competition and non-solicitation covenants contained in the Change in Control Agreement.

**Section 15.REFORMATION AND INJUNCTIVE RELIEF**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)Intended Reformation of Covenants.*** All the Parties hereto acknowledge that the Parties have carefully considered the nature and scope of this Agreement. The activities, period, and area covered by Sections 13 and 14 are expressly acknowledged and agreed to be fair, reasonable, and necessary. To the extent that any covenant contained in Sections 12, 13 or 14 is held to be invalid, illegal, or unenforceable because of the extent of activities, duration of such covenant, the geographic area covered thereby, or otherwise, the Parties agree that the court making such determination shall reform such covenant to include as much of its nature and scope as will render it enforceable and, in its reduced form, said covenant shall be valid, legal, and enforceable to the fullest extent of the law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)Injunctive Relief.*** The Executive acknowledges and agrees that, upon any breach by the Executive of his obligations under Sections 12, 13 or 14 hereof, the Employer will have no adequate remedy at law, and accordingly will be entitled to specific performance and other appropriate injunctive and equitable relief via a court of law of competent jurisdiction, notwithstanding the provisions of Section 17 of this Agreement. Nothing in this Section 15(b) shall be construed as prohibiting the Employer from pursuing any other remedies available to it, including the recovery of damages from the Executive.

**Section 16. NOTICES**

All notices, requests, demands, waivers, and other communications required or permitted to be given under this Agreement will be in writing and will be deemed to have been duly given: (a) if

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delivered personally or sent by facsimile or electronic mail, on the date received; (b) if delivered by overnight courier, on the day after mailing; and (c) if mailed, five days after mailing with postage prepaid. Any such notice will be sent as follows:

*If to the Employer:*

Union Bankshares, Inc. and Union Bank

Attn: Board Chair

20 Lower Main Street

Morrisville, VT 05661

and

*If to the Executive:*

At the address on file with the Employer.

**Section17.MEDIATION AND ARBITRATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)Generally.*** If the Executive and the Employer have any dispute whatsoever relating to the interpretation, validity, or performance of this Agreement, or any other dispute arising out of this Agreement, every reasonable attempt will be made to resolve any differences or dispute within thirty (30) days of an issuance of written notice by either Party to the other Party. If a successful resolution of any differences or dispute has not been achieved to the satisfaction of both arties at the end of the thirty (30)-day period, the steps outlined in the following Sections 17(b), 17(c) and 17(d) shall apply.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)Alternative Dispute Resolution.*** Except as otherwise expressly provided hereunder, the Parties agree that any and all disputes arising out of the Executive's employment, or cessation of employment, including but not limited to any dispute, controversy, or claim arising under any federal, state, or local statute, law, ordinance, or regulation or under this Agreement, shall be resolved exclusively by Alternative Dispute Resolution described in this Agreement ("**ADR**"). The initiation of ADR shall first require mediation, and the Parties agree to first try to settle any dispute through mediation. Mediation shall be initiated by either Party by the serving of a written notice of intent to mediate (a "**Mediation Notice**") by one Party upon the other in accordance with Section 17(c). If no resolution has been mutually agreed through mediation within ninety (90) days of service of a Mediation Notice, then and only then may the dispute be submitted to arbitration. Arbitration shall be initiated by the serving of a written notice of intent to arbitrate (an "**Arbitration Notice**") by one Party upon the other.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(c)Mediation Notice.*** If a Party wishes to initiate ADR with respect to a claim, a Mediation Notice must be served on the other Party within six (6) months from the date on which the claim arose. If the Parties cannot mutually agree on a mediator, then a mediator shall be selected in accordance with the Employment Mediation Rules of the American Arbitration Association.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(d)Arbitration.*** If mediation is unsuccessful and arbitration is initiated, it shall be conducted under the National Rules for the Resolution of Employment Disputes of the American Arbitration Association, as modified by this Agreement. There shall be a single arbitrator to be agreed upon by the Parties; provided that, if the Parties are unable to agree upon a single arbitrator, the Executive and the Employer shall each name an arbitrator, and the two (2) arbitrators so named shall name a third (3<sup>rd</sup>) arbitrator. The arbitration proceedings shall be heard by the arbitrator(s), and the decision of the arbitrator, or of a majority of the panel if one has been selected, shall be final and binding on the Parties. All arbitration proceedings shall be confidential. The arbitration award shall be accompanied by a written statement containing a summary of the issues in controversy, a

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description of the award, and an explanation of the reasons for the award. Judgment upon the arbitration award may be entered in any court of competent jurisdiction. An Arbitration Notice must be served on the other Party within one (1) year from the date on which the claim arose, and failure to bring such a claim within such one (1)-year period shall constitute a waiver of such claim and an absolute bar to any further proceedings in any forum with respect to it. All mediation and arbitration proceedings shall be conducted in Burlington, Vermont, unless the Parties otherwise agree in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(e)Costs.*** The cost of any mediation proceeding and any arbitration proceeding shall be shared equally by the Parties to the dispute; *provided, however,* that if the dispute is resolved in an arbitration proceeding substantially in favor of a Party, the cost of such arbitration proceeding shall be paid in full by the other Party. Each Party shall be responsible for its own cost of representation and counsel in any mediation or arbitration proceeding.

**Section 18.SUCCESSORS AND ASSIGNS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)No Assignment by Executive.*** The rights and obligations of the Executive hereunder are not assignable or delegable, and any such assignment or delegation will be null and void, provided, however, that in the event of his death any and all amounts due the Executive hereunder shall be paid to his surviving spouse, or if she has no surviving spouse, to his estate, including without limitation any amounts due the Executive under Section 8 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)Binding Effect.*** This Agreement shall be binding upon, and inure to the benefit of, the Parties hereto and their respective successors, beneficiaries, heirs, and personal representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(c)Employer's Successors.*** The Employer shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business and/or assets of the Employer to expressly assume and agree to perform its obligations under this Agreement in the same manner and to the same extent that the Employer would be required to perform them if no such succession had taken place.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(d)Interpretation.*** As used in this Section 18, the Employer shall include the Company, the Bank, and any successor to all or substantially all of the business and/or assets of any of them (whether direct or indirect, by purchase, merger, consolidation, or otherwise) which executes and delivers the written agreement described in Section 18(c) or which otherwise becomes bound by all the terms and provisions of this Agreement.

**Section 19.GENERAL PROVISIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)Entire Agreement.*** This Agreement, including the Exhibits hereto, and the Change in Control Agreement constitute the entire understanding and agreement between the Parties hereto with respect to the Employer's employment of the Executive, and supersede and revoke any and all prior agreements and understandings, whether oral or written, between the Parties relating to the subject matter of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)Withholding.*** The Employer may withhold from any payments to be made hereunder such amounts as it may be required or permitted to withhold under applicable federal, state, or other law, and may transmit such withheld amounts, as appropriate, to the appropriate taxing authorities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(c)Survival of Provisions.*** Notwithstanding anything contained herein to the contrary, the provisions of this Agreement which by their terms are to be performed subsequent to termination, including, without limitation, Sections 9, 12, 13, 14, 15, and 17 and this Section 19, shall survive the termination of this Agreement and shall remain fully enforceable.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(d)Governing Law.*** This Agreement shall be interpreted under, subject to, and governed by the substantive laws of the State of Vermont, without giving effect to provisions thereof regarding conflict of laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(e)Modification and Waiver.*** This Agreement may not be modified or amended, except by an instrument in writing signed by the Parties hereto. Notwithstanding the preceding sentence, this Agreement shall be construed and administered in such manner as shall be necessary to effect compliance with Code Section 409A and shall be subject to amendment in the future, in such manner as the Employer, in consultation with the Executive, may deem necessary or appropriate to effect such compliance; provided, that any such amendment shall preserve for the Executive the benefit originally afforded pursuant to this Agreement. No term or condition of this Agreement shall be deemed to have been waived, except by written instrument of the Party charged with such waiver. Except as otherwise expressly provided in a written waiver, a waiver shall operate only as to the specific term or condition waived and will not constitute a waiver of any other term or condition of this Agreement or as to any subsequent occurrence of the term or condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(f)Cooperation and Further Assurances.*** Each of the Parties agrees to execute all further instruments and documents and to take all further action as the other Party may reasonably request in order to effectuate the terms and purposes of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(g)Section Headings.*** The section headings appearing in this Agreement are for convenience of reference only and in no way define, limit, or affect the scope, substance or interpretation of any section of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(h) Severability.*** The invalidity or unenforceability of any provision of this Agreement shall not affect any other provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(i)Counterparts.*** This Agreement may be executed in any number of counterparts with the same effect as if all Parties hereto had signed the same document. All counterparts shall be construed together and shall constitute one Agreement. This Agreement, to the extent signed and delivered by means of a facsimile machine or PDF, shall be treated in all manner and respects as an original signed agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.

**EXECUTIVE'S ACKNOWLEDGEMENT**

The Executive acknowledges that he was presented with this Agreement at least three days prior to executing the Agreement, has had a full and complete opportunity to review the terms, enforceability, and implications of this Agreement; that he has had a full and complete opportunity to present it to competent legal counsel for review; and that the Employer has not made any representations and warranties to the Executive concerning the terms, enforceability, or effect of this Agreement other than as set forth in this Agreement.

***[signature page follows]***

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**IN WITNESS WHEREOF,** the parties have executed this Agreement as of the date and year first written above

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| | |
|:---|:---|
| **UNION BANKSHARES, INC.** | **UNION BANKSHARES, INC.** |
| By: | /s/ David S. Silverman |
| Name: David S. Silverman | Name: David S. Silverman |
| Title: President & CEO | Title: President & CEO |
| **UNION BANK** | **UNION BANK** |
| By: | /s/ David S. Silverman |
| Name: David S. Silverman | Name: David S. Silverman |
| Title: President & CEO | Title: President & CEO |
| **EXECUTIVE** | **EXECUTIVE** |
| /s/ Jeffrey F. Weidley | /s/ Jeffrey F. Weidley |
| Jeffrey F. Weidley | Jeffrey F. Weidley |

---

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**EXHIBIT A**

**DEFINITIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Cause**" shall mean any one or more of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)the Executive's willful, material and continued failure to perform the Executive's reasonable and customary duties with the Company, the Bank or an of their affiliates, *provided that* (A) the Board has delivered to the Executive a written demand for substantial performance which specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive's duties and provides the Executive with at least thirty (30) consecutive calendar days to correct such failure; (B) if requested by the Executive, the Executive shall have been provided the opportunity to be heard in person by the Board of the Bank or the Company (with the assistance of the Executive's legal counsel if the Executive so desires); and (C) the Executive has failed to correct such failure(s) within such 30 day period to the reasonable satisfaction of the Board of the Company or the Bank (as applicable), as evidenced by a resolution duly adopted in good faith by a majority of the members of such Board; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)the Executive willfully engages in dishonesty, illegal conduct or gross misconduct which is demonstrably and materially injurious to the Company or the Bank or any of their affiliates; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)the Executive is convicted of, or enters a plea of no contest to, a felony; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)the Executive willfully engages in misconduct that would justify immediate dismissal under any Code of Conduct applicable to the Bank's employees generally or any special Code of Conduct expressly applicable to the Executive by virtue of his officer title with the Company, the Bank or any of their affiliates; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)the Executive is the subject of a formal written sanction or order by any bank regulatory agency having jurisdiction over the Bank or any affiliate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• For purposes of this definition, no act or failure to act by the Executive shall be considered "**willful**" unless done or omitted to be done by the Executive in bad faith and without reasonable belief that the Executive's action or omission was in the best interests of the Bank and its affiliates. Any act or failure to act based upon authority given pursuant to a resolution duly adopted by the Board of the Bank or of an affiliate, based upon the advice of counsel for the Bank or an affiliate, or based upon the instructions of another officer (if any) having seniority of title over the Executive, shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Bank and its Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Change in Control**" shall mean the occurrence of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)one person (or more than one person acting as a group) acquires beneficial ownership of stock of the Company or the Bank that, together with the stock already held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company or the Bank; *provided, however,* that a Change in Control shall not occur if any person (or more than one person acting as a group) owns more than 50% of the total fair market value or total voting power of the Company's stock and acquires additional stock, or the percentage of ownership increases due to the repurchase of shares by the issuer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)one Person (or more than one person acting as a group) acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition) beneficial ownership of the

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Company's stock possessing more than 50% of the total voting power of the stock of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)a majority of the members of the Company's Board of Directors are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)one person (or more than one person acting as a group), acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition) assets from the Bank or the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Bank or the Company, as the case may be, immediately before such acquisition(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Change in Control Agreement**" shall mean the Change in Control Agreement between the Executive and the Bank, and joined in by the Company, of even date with this Employment Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Code**" shall mean the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Confidential Information**" shall mean any and all information and compilations of information, in whatever form or medium (including any copies thereof), relating to any part of the business of the Company, the Bank, or any of their affiliates, or the business of their customers, provided to the Executive, or which the Executive obtained, compiled or had access to, or had obtained or compiled on his behalf, which information or compilations of information are not a matter of public record or generally known or available to the public, including, without limitation, but subject to the foregoing, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Financial information regarding the Company, the Bank, or any of their affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Subject to applicable law, personnel data, including compensation arrangements relating to any employees of the Company, the Bank, or any of their affiliates (excluding data regarding the Executive that is part of his personnel file);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Internal plans, practices, and procedures of the Company, the Bank, or any of their affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)The names, personal identifying information, portfolio information, investment strategies, requirements, lending, deposit or other account information, or any similar information, of any customers, clients, or prospects of the Company, the Bank, or any of their affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)Business methods and marketing strategies of the Company, the Bank, or any of their affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)The terms and conditions of this Agreement and any documents or instruments executed in connection herewith that are not of public record.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Disability**" shall mean a condition: (a) which causes the Executive to be unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve (12) months; or (b) which results in his receiving, by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve (12) months, income

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replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Employer. Disability shall be deemed to exist only when the disability has been certified to the Board of Directors of the Company by a licensed physician approved by the Board of Directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Effective Date**" shall mean Monday, May 4, 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Good Reason**" shall mean the occurrence of any of the following events during the Term without the Executive's express written consent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)a material diminution in the Executive's authority, duties or responsibilities (other than temporarily while the Executive is physically or mentally incapacitated);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)a material reduction in the Executive's annual rate of Base Compensation or Executive's target annual bonus opportunity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)a relocation of Executive's assigned principal place of employment by more than fifty (50) "driving" miles; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)following an initial six (6) month transition period at the beginning of the Term, a requirement that the Executive report to a corporate officer or employee rather than directly to the Employer's Board of Directors; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)the failure to nominate or appoint the Executive to the Employer's Board of Directors, as provide in this Agreement; *provided, however*, that any of the foregoing events or conditions shall be deemed to constitute Good Reason only if (A) the Executive provides written notice to the Bank of the event or condition alleged to constitute Good Reason within ninety (90) days following the Executive's first knowledge of such event or condition constituting Good Reason, and (B) such event or condition shall remain uncured for a period of thirty (30) days after such notice is given. The Parties intend that a termination of the Executive's employment for Good Reason shall constitute an involuntary Separation from Service for purposes of Section 409A, and this provision shall be interpreted in a manner consistent with such intention.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Notice of Termination**" shall mean the written communication provided to the other party in the event of the Executive's termination of employment (i) by the Employer for Cause or on account of the Executive's Disability or (ii) by the Executive for Good Reason. A Notice of Termination must indicate the specific provisions in this Agreement upon which the applicable party relies as the basis for the Executive's termination of employment and must also set forth in reasonable detail the facts and circumstances claimed to provide the basis for such termination of employment under the provisions so indicated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Restricted Period**" shall mean the period commencing on the Effective Date and terminating on the first (1<sup>st</sup>) anniversary of the expiration of the Term under Section 4 or the termination of the Executive's employment with the Employer for any reason under Section 8.

## Exhibit 10.7

**Exhibit 10.7**

**CHANGE IN CONTROL AGREEMENT**

**THIS CHANGE IN CONTROL AGREEMENT** (this "**Agreement**"), is entered into as of this 26th day of February, 2026, by and between Union Bank (the "**Bank**"), a Vermont-chartered financial institution and wholly-owned subsidiary of Union Bankshares, Inc. (the "**Parent**"), and Jeffrey F. Weidley (the "**Executive**") and is joined in by the Parent for purposes of making the undertakings in Sections 1.02, 6.02 and 6.03.

**BACKGROUND**

The Boards of Directors of the Bank and the Parent consider the establishment and maintenance of a sound and vital management team to be essential to protecting and enhancing the best interests of the Bank, the Parent and the Parent's shareholders;

Pursuant to an Employment Agreement between the Executive, the Bank and the Parent dated as of the date hereof (the "**Employment Agreement**"), (i) effective on May 4, 2026 (the "**Effective Date**") the Executive shall become an executive employee of the Bank and shall serve as the President of the Bank and the Parent and (ii) as of the close of business on July 3, 2026, the Executive shall also serve as the Chief Executive Officer of the Bank and the Parent;

The Boards of Directors of the Bank and the Parent (the "**Boards**") expect the Executive to make significant contributions to the Bank's and the Parent's short-term and long-term profitability, growth and financial strength;

The Boards have determined that it is in the best interests of the Bank, the Parent and the Parent's shareholders to ensure that the Bank and the Parent will have the continued dedication and impartial service and advice of the Executive, in the event of the possibility, threat or occurrence of a Change in Control (as defined); and

**NOW, THEREFORE**, for and in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, intending to be legally bound hereby, the parties hereby agree as follows:

**ARTICLE I**

**DEFINITIONS AND RULES OF INTERPRETATION**

**Section 1.01.<u>Definitions</u>.** Capitalized terms used but not otherwise defined in this Agreement shall have the respective meanings contained in the attached Appendix of Defined Terms.

**Section 1.02. <u>Employment with Affiliates</u>**. The parties acknowledge that as of the date hereof, pursuant to the Employment Agreement, the Executive shall be employed as the President and

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Chief Executive Officer of the Bank and shall also serve as the President and Chief Executive Officer of the Parent. If during the term of this Agreement the Executive becomes employed instead directly by the Parent or any other Affiliate, either (i) the Parent shall assume, or cause such Affiliate to assume, in writing, all of the obligations of the Bank under this Agreement; or (ii) the Parent shall enter into, or cause such Affiliate to enter into, a new Change in Control Agreement with the Executive on substantially the same terms as set forth in this Agreement.

**Section 1.03.<u>No Offsets or Required Mitigation</u>**. The obligations of the Bank and the Parent to make the payments required under this Agreement and otherwise to perform their obligations hereunder shall be absolute and unconditional and shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action that the Bank, the Parent or any other Affiliate may have against the Executive or any third party. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment, except as otherwise expressly provided in the last sentence of Section 3.02(i).

**ARTICLE 2**

**TERM OF AGREEMENT**

**Section 2.01. <u>Term of Agreement.</u>** This Agreement shall take effect between the parties on the date hereof and shall remain in effect throughout the term of the Employment Agreement, including and extension or renewal of the term, as provided therein.

**ARTICLE 3**

**BENEFITS UPON QUALIFYING TERMINATION OF EMPLOYMENT**

**Section 3.01.<u>Change in Control Cash Payment</u>**. If the Executive experiences a Qualifying Termination, then the Bank shall pay to the Executive a lump sum cash amount equal to *the sum of the following:*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)*the higher of* 200% of (A) the Executive's Base Salary at the annual rate in effect immediately prior to the Change in Control, or (B) the Executive's Base Salary at the annual rate in effect immediately prior to the date of the Executive's Qualifying Termination; plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)two hundred percent (200%) of the Executive's Bonus Amount; plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)an amount equal to the employer contributions made by the Bank or its Affiliates under the Bank's 401(k) and profit sharing plan for the account of the Executive with respect to the last completed plan year immediately prior to the Change in Control, including any employer matching contributions, "safe harbor" contributions and profit sharing contributions.

**Section 3.02. <u>Continued Health Insurance Coverage</u>**.

(i.)If the Executive experiences a Qualifying Termination, the Bank shall continue the medical and dental insurance coverages of the Executive and Executive's dependents, as well as vision and prescription drug coverages (if any) at no cost to the Executive for a period of eighteen (18) months following the date of the Executive's Qualifying Termination; *provided, however*, that, if such continued coverage (A) is not permitted under the terms of the applicable benefit plan or program for all or any portion of such period, or (B) would result in the imposition of additional taxes or penalties on the Executive or the Bank (including, without limitation, under Section

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105(h) of the Code), or (C) would otherwise violate any applicable law, then the Bank shall instead pay the Executive an additional cash amount per month during the period when such continuation would be so prohibited or subject to additional taxes or penalties, in an amount equal to the total premium that would have been required to so continue the Executive's (and the Executive's dependents') participation in such medical, dental, vision, and prescription drug programs. In the event the Executive becomes re-employed with another employer during such 18 month period and becomes eligible to receive medical, dental, vision or prescription drug coverages from such employer that are substantially equivalent to the benefits provided under this Section, the Bank's obligation to provide the applicable benefits or payments described in this Section shall terminate.

(ii.)Notwithstanding anything to the contrary herein, the foregoing provisions are intended to provide a minimum standard for provision of health insurance benefits for the Executive following a Qualifying Termination and, accordingly, such provisions shall supplement, but shall not replace or supersede, any additional or more generous health insurance benefits the Bank, or the Parent, as the case may be, is otherwise required to provide under any other contract, plan or arrangement, or under applicable law.

**Section 3.03.<u>Outplacement Services</u>.** In addition to the other benefits provided to the Executive upon a Qualifying Termination, during the ninety (90) day period following expiration of the Revocation Period, the Bank shall provide to the Executive appropriate outplacement services from a service provider mutually agreed upon by the Bank and the Executive; *provided, however*, that the Bank's obligation under this Section shall be limited to the expenditure of $5,000 for such outplacement services.

**Section 3.04.<u>Equity-Based Compensation and Other Compensation and Benefits</u>.** Any equity-based awards (whether to be settled in cash or stock) held by the Executive under any equity-based compensation plan of the Parent, including any outstanding awards under the Parent's 2024 Equity Incentive Plan, or any successor equity-based plans, will be governed by the provisions of the respective plan.

**Section 3.05.<u>Withholding Taxes</u>.** The Bank shall withhold from all payments due to the Executive hereunder all taxes which, by applicable federal, state, local or other law, the Bank is required to withhold from such payments.

**Section 3.06.<u>Reduction of Benefits in Certain Cases</u>**. Notwithstanding any contrary provision set forth in this Agreement, the payments and benefits to the Executive under this Article 3 shall be reduced if and to the extent required under Article 4 of this Agreement.

**Section 3.07.<u>Payment to Beneficiaries</u>**. If the Executive dies after the occurrence of a Qualifying Termination, but prior to the payment of all of the severance payments required by this Article, then all remaining severance payments shall be paid and benefits provided to the Executive's designated beneficiary or beneficiaries, or if none, to the Executive's estate.

**Section 3.08. <u>Waiver and Release; Timing of Payment</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Notwithstanding anything in this Agreement to the contrary, as a condition to receiving any payments or benefits under this Article 3 by reason of a Qualifying Termination, (A) the Executive (or in the case of the Executive's death after a Qualifying Termination, the Executive's designated beneficiary or beneficiaries, or if none, the Executive's estate) must execute a Waiver and Release of claims, in the form set forth on **<u>Exhibit A</u>** attached hereto, and (B) such waiver and release must be delivered to the Bank no later than the Waiver and Release Due Date, and (C) such waiver and release must not have been revoked within the Revocation Period.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Subject to compliance with the foregoing requirements and (if applicable) to delay if required under Section 4.02(ii), the Bank shall make the cash payment to the Executive hereunder, and the other benefits hereunder shall commence, on the first business day following expiration of the Revocation Period; *provided, however*, that if the period between the date of the Executive's Qualifying Termination and the Latest Possible Revocation Period Expiration Date spans two (2) calendar years, the payment shall be made, and the other benefits shall commence, no earlier than the first business day of the second calendar year, regardless of the earlier expiration of the Revocation Period.

**Section 3.09.<u>Right to Other Compensation and Benefits not Affected</u>.** The Change in Control payment and benefits provided under this Article 3 are in addition to, and not in lieu of, any other vested or accrued compensation, benefits and expense reimbursement to which the Executive may otherwise be entitled as a result of his Separation from Service, including, without limitation, (i) any base salary and bonuses which have been earned and are otherwise payable; (ii) the dollar value of any accrued, unused vacation time; (iii) any vested benefits under the terms of any annual incentive, retirement, pension, deferred compensation, supplemental retirement, 401(k), profit sharing or other employee benefit plan or arrangement of the Bank or any Affiliate; and (iv) reimbursement for the Executive's reasonable business expenses incurred prior to the Executive's Qualifying Termination, in accordance with the Bank's ordinary reimbursement policies.

**ARTICLE 4**

**LIMITATIONS ON PAYMENT OF BENEFITS**

**Section 4.01.<u>Golden Parachute Excise Tax</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Notwithstanding anything to the contrary in this Agreement, or in any other agreement, arrangement or plan, if the Tax Consultant (as defined below) determines that any of the payments or benefits provided or to be provided to the Executive or for the Executive's benefit pursuant to the terms of this Agreement or otherwise ("**Covered Payments**") constitute parachute payments ("**Parachute Payments**") within the meaning of Code Section 280G and would, but for this Section 4.01, be subject to the excise tax imposed under Code Section 4999 (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the "**Excise Tax**"), then either (A) the Covered Payments shall be reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax (that amount, the "**Reduced Amount**"); or (B) the Covered Payments due under this Agreement shall be paid in full to Executive, but only if the Executive receipt's on an after-tax basis of the full amount of such Covered Payments (after taking into account applicable federal, state and local income, employment and excise taxes, including the Excise Tax) would result in the Executive receiving an amount at least ten percent (10%) greater than the Reduced Amount.

Any reduction in the Covered Payments made pursuant to this Section 4.01 shall be made in accordance with Code Section 409A and the following: (A) the Covered Payments which do not constitute nonqualified deferred compensation subject to Code Section 409A shall be reduced first; and (B) all other Covered Payments shall then be reduced as follows: (1) cash payments shall be reduced before non-cash payments; and (2) payments to be made on a later payment date shall be reduced before payments to be made on an earlier payment date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)The Tax Consultant shall provide to the Bank and the Executive a copy of its calculations. All determinations made by the Tax Consultant under this Section 4.01 shall be binding upon the

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Bank and the Executive and shall be made within thirty (30) days following the date of the Executive's Qualifying Termination. The Bank and the Executive shall provide to the Tax Consultant such information and documents as the Tax Consultant may reasonably request in order to perform the calculations and make the determinations required under this Section 4.01. For purposes of making such calculations and determinations, the Tax Consultant may rely on reasonable, good faith assumptions and approximations concerning the application of Code Sections 280G and 4999. All fees and expenses of the Tax Consultant pursuant to this Section 4.01 shall be borne solely by the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)For purposes of this Section 4.01, the term "**Tax Consultant**" shall mean an independent accounting firm or independent tax counsel designated by the Bank promptly following the Executive's Qualifying Termination and reasonably acceptable to the Executive.

**Section 4.02.<u>409A Compliance</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)This Agreement is intended to comply with Code Section 409A or one or more exemptions thereunder and shall be construed and administered in accordance with Section 409A. Notwithstanding any other provision of this Agreement, payments provided hereunder may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption therefrom. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral, or otherwise, shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, any installment payment provided under this Agreement shall be treated as a separate payment. Any payments to be made under this Agreement upon a Qualifying Termination shall only be made following a "Separation from Service" within the meaning of Section 409A. Notwithstanding the foregoing, neither the Bank nor any Affiliate makes any representations or provides any warranties that the payments and benefits provided under this Agreement comply with Code Section 409A and in no event shall the Bank, the Parent or any of their Affiliates be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Executive on account of non-compliance with Code Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Notwithstanding any other provision of this Agreement, if (A) any payment or benefit provided in connection with the Executive's Qualifying Termination is determined to constitute "nonqualified deferred compensation" within the meaning of Code Section 409A and (B) the Executive is determined to be a "**specified employee**" as defined in Code Section 409A(a)(2)(b)(i), then such payment or benefit shall not be paid until the first payroll date to occur following the six-month anniversary of the Qualifying Termination or, if earlier, on the Executive's death (the "**Specified Employee Payment Date**"). The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date, and interest on such amounts calculated based on the applicable federal rate published by the Internal Revenue Service for the month in which the Executive's separation from service occurs, shall be paid to the Executive in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)To the extent required by Code Section 409A, each reimbursement or in-kind benefit provided under this Agreement shall be provided in accordance with the following: (A) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during each calendar year cannot affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; and (B) any right to reimbursements or in-kind benefits under the Plan shall not be subject to liquidation or exchange for another benefit.

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**Section 4.03. <u>Certain Regulatory Prohibitions</u>**. Notwithstanding anything to the contrary herein, this Agreement and the Executive's entitlement to payments and benefits hereunder is subject to all the laws, rules and regulations governing FDIC-insured, Vermont-chartered nonmember banks, and, in particular, the provisions of 12 U.S.C. Section 1828(k) and 12 C.F.R. Part 359, and any successor provisions. To the extent that any provision of this Agreement or any payment or benefit hereunder is inconsistent with any such federal or state laws, rules or regulations, such laws, rules or regulations shall control. In such case, such provision of this Agreement shall be deemed invalid and unenforceable and such payment shall not be made or benefit provided, but only to the extent necessary for this Agreement to comply with applicable federal or state laws, rules and regulations.

**ARTICLE 5**

**CERTAIN COVENANTS OF THE EXECUTIVE**

**Section 5.01.<u>Non-Disparagement</u>**. Following a Qualifying Termination and subject to satisfaction of the Bank's payment obligations under Article 3 of this Agreement, the Executive will not, in writing or orally, or through conduct, disparage, deprecate, discredit or vilify the Bank, the Parent or any of their Affiliates, or the services, products, customers, or employees of the Bank, the Parent or any of their Affiliates. These prohibitions include, without limitation, any such statements made through use of social media sites, such as Facebook or X, or through postings on internet websites, chat rooms or other social media.

**Section 5.02.<u>Non-Disclosure of Confidential Information</u>**. Subject to satisfaction of the Bank's payment obligations under Article 3 of this Agreement, for a period of two (2) years following the Executive's Qualifying Termination, the Executive agrees (i) not to communicate, divulge or make available to any Person (other than the Bank, the Parent or their Affiliates) any Confidential Information, except upon the prior written authorization of the Bank or as may be required by law or legal process; and (ii) to deliver promptly to the Bank any Confidential Information in the Executive's possession, including any duplicates thereof and any notes or other records the Executive has prepared or been provided with access to, containing or derived from Confidential Information, in whatever form maintained. In the event that the provisions of any applicable law or the order of any court would require the Executive to disclose or otherwise make available any Confidential Information, prior to making any such disclosure the Executive shall give the Bank prompt written notice of such required disclosure and an opportunity to contest the disclosure requirement or to apply for a protective order with respect to such Confidential Information by appropriate proceedings.

**Section 5.03.<u>Non-Competition and Non-Solicitation Obligations</u>.** Subject to satisfaction of the Bank's payment obligations under Article 3 of this Agreement, for a period of one (1) year following the Executive's Qualifying Termination, the Executive will not, directly or indirectly,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)accept employment from, or act as a consultant or advisor to, any other financial institution, financial institution holding company, lender, trust company or other financial service provider entity, directly or indirectly engaged in deposit-taking or lending activities (a "**Competitor**") that maintains a Competing Business Office. For purposes of this Section 5.03, the term "**Competing Business Office**" means any business office of a Competitor, including without limitation any bank branch, loan production office, trust office or operations center), that is located within a fifty (50) "air" mile radius from the Bank office that is the Executive's assigned principal place of employment with the Bank immediately prior to the Qualifying Termination; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)suggest to or advise any customer of the Bank to withdraw, curtail, or cancel the customer's business with the Bank; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)call on, or cause, suggest, or induce others to call on, any customer of the Bank or otherwise solicit their business; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)solicit, entice, hire, or attempt to hire or employ any employee of the Bank or the Parent.

During the one (1) year period following the Executive's Qualifying Termination, the Executive shall inform any prospective employer that the Executive is bound by the restrictions in this Section 5.03.

**Section 5.04.<u>Acknowledgment and Intent of the Parties</u>.** The parties acknowledge that they have carefully considered the nature and scope of this Agreement. The activities, period and area covered by Section 5.03 are expressly acknowledged and agreed to be fair, reasonable and necessary. To the extent that any covenant contained in Section 5.03 is held to be invalid, illegal or unenforceable because of the extent of activities, duration of such covenant, the geographic area covered thereby, or otherwise, the parties agree that the court making such determination shall reform such covenant to include as much of its nature and scope as will render it enforceable and, in its reduced form, said covenant shall be valid, legal and enforceable to the fullest extent of the law. The parties further acknowledge that any Successor Corporation shall have the benefit of, and be entitled to enforce, the covenants of the Executive contained in this Article 5 to the same extent as the Bank and its Affiliates.

**ARTICLE 6**

**SUCCESSORS; BINDING AGREEMENTS**

**Section 6.01.<u>Successors Bound</u>**. The provisions of this Agreement shall be binding upon any Successor Corporation.

**Section 6.02.<u>Written Assumption of Successor</u>**. The Bank and the Parent shall require any Successor Corporation (whether such succession is direct or indirect, by purchase, merger, consolidation or otherwise) expressly to assume and agree to perform this Agreement to the same extent that the Bank or the Parent would be required to perform it if no succession had taken place. Failure of the Bank and the Parent to obtain an assumption of this Agreement at or prior to the effectiveness of any succession shall constitute a material breach of this Agreement, except under circumstances in which the Successor Corporation succeeds by operation of law to the Bank's obligations hereunder.

**Section 6.03.<u>Guaranty by Parent</u>.** The Parent hereby irrevocably and unconditionally guarantees to the Executive the payment of all amounts, and the performance of all other obligations, due from the Bank under this Agreement as and when due and without any requirement of presentment, demand of payment, protest or notice of dishonor or nonpayment.

**Section 6.04.<u>Binding Effect; Rights of Executive's Successors</u>**. This Agreement shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive dies while any amounts would be payable to the Executive hereunder if the Executive had continued to live, all such amounts (unless otherwise provided herein) shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by the Executive to receive such amounts or, if no person is so appointed, to the Executive's estate.

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**ARTICLE 7**

**MISCELLANEOUS**

**Section 7.01.<u>Notices</u>**. All notices, requests, demands, waivers, instructions or other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given only if mailed or hand delivered to a party at the following address:

*If to Bank:*

Union Bank

PO Box 667

20 Lower Main Street

Morrisville, VT 05661

Attn: Chair, Board of Directors

*If to Executive*, to the address on file from time to time with the Human Resources Office of the Bank or the Surviving Corporation, as the case may be, or to such other address or to the attention of such other Person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement will be deemed to have been given when hand delivered to a party in person or by commercial courier service, or, if mailed, upon the earlier of written confirmation of receipt, or three (3) days after deposit in the U.S. Mail, postage prepaid.

**Section 7.02.<u>Severability</u>**. Any term or provision of this Agreement that is found by a court of competent jurisdiction to be invalid or unenforceable shall not affect the validity or enforceability of the remaining terms and provisions hereof. Any invalid or unenforceable provision shall be modified to the extent necessary to allow for enforceability and to give effect to the original intent of the parties to the extent possible.

**Section 7.03.<u>Complete Agreement</u>**. This Agreement and any documents expressly referred to herein embody the complete agreement and understanding among the parties and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.

**Section 7.04.<u>Reimbursement of Executive's Enforcement Expenses</u>.** If any contest or dispute shall arise under this Agreement involving the alleged failure or refusal of the Bank or the Parent to perform fully in accordance with the terms hereof, the Bank shall reimburse the Executive for all reasonable legal fees and expenses, if any, incurred by the Executive with respect to such contest or dispute, together with interest in an amount equal to the Wall Street Journal prime rate from time to time in effect (but in no event higher than the legal rate permissible under applicable law), such interest to accrue from the date the Bank becomes obligated to pay such fees and expenses through the date of payment thereof; *provided, however*, that this Section 7.04 shall apply only if (and to the extent that) the Bank is held by a court of competent jurisdiction to have breached or violated its duties and obligations hereunder to the Executive.

**Section 7.05.<u>Source of Payments</u>.** All payments provided under this Agreement shall be paid in cash from the general funds of the Bank, and no special or separate fund shall be established, and no other segregation of assets made, to assure payment. To the extent that the Executive or the Executive's estate acquires a right to receive payments from the Bank hereunder, such right shall be that of an unsecured creditor of the Bank.

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**Section 7.06.<u>Survival</u>.** Articles 3, 4 5, 6 (to the extent that payments or benefits are owed as a result of a Qualifying Termination that occurs during the Protection Period) and Section 7.04 shall survive the termination of this Agreement.

**Section 7.07. <u>Governing Law; Venue</u>.** The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Vermont without regard to its principles of conflicts of laws. The parties hereby agree that exclusive venue for all litigation arising hereunder lies solely with the state courts of Vermont and each party hereby submits and agrees to the personal jurisdiction of such Vermont state courts.

**Section 7.08.<u>Counterparts; Delivery by Email</u>.** This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument. Any executed counterpart may be delivered by PDF attachment email and such counterpart delivered by fax or by attachment to an email shall be deemed an original. Alternatively, the parties may execute this Agreement by use of a secure electronic signature platform.

**Section 7.09. <u>Amendment; Waiver</u>.** No provision of this Agreement may be modified or waived unless such modification or waiver is agreed to in writing and signed by the Executive and by a duly authorized officer of the Bank and the Parent. No waiver by a party (at any time) of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Except as otherwise expressly set forth in this Agreement, the failure by the Executive or the Bank to insist upon strict compliance with any provision of this Agreement or to assert any right the Executive or the Bank may have hereunder shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

*[signature page follows]*

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**IN WITNESS WHEREOF,** the parties have executed this Change in Control Agreement, intending it to be legally effective between them, as of the 26th day of February, 2026.

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| | |
|:---|:---|
| **EXECUTIVE** | |
| /s/ Jeffrey F. Weidley | |
| Jeffrey F. Weidley | |
| **UNION BANK** | **UNION BANKSHARES, INC.\*** |
| /s/ David S. Silverman | /s/ David S. Silverman |
| David S. Silverman | David S. Silverman |
| President & CEO | President & CEO |

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**\*** *For purposes of making the undertakings of the Parent in Sections 1.02, 6.02 and 6.03*

**Attachments:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Appendix of Defined Terms

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Exhibit A – Form of Waiver and Release

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**APPENDIX OF DEFINED TERMS**

Unless otherwise defined in this Agreement, the following definitions shall apply, unless the context clearly indicates otherwise:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Affiliate**" of any Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person. For purposes of this definition, "**control**" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of voting securities or otherwise; and the terms "**controlling**" and "**controlled**" shall have correlative meanings. Without limiting the generality of the foregoing, the Affiliates of the Bank include the Parent and any other direct or indirect subsidiaries (if any) of the Parent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Base Salary**" means the Executive's annual base salary at the rate as from time to time in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"Beneficial Owner**" has the meaning ascribed to it in Rule 13d-3 and Rule 13d-5 under the Exchange Act; except that, in calculating the beneficial ownership of any particular Person, such Person shall be deemed to have beneficial ownership of all securities that such Person has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The term "**Beneficial Ownership**" has a corresponding meaning.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **"Board"** means the Board of Directors of the Bank or the Parent, as the context may require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Bonus Amount**" means *the higher of* (i) the amount of the Executive's target annual cash bonus opportunity (but not the Executive's maximum possible cash bonus) under the Incentive Plan for the year in which the Executive's Qualifying Termination occurs, on the assumptions that (A) the Bank achieves (but does not exceed) its performance target, (B) the Executive achieves (but does not exceed) all individual performance criteria, and (C) assumed full year end results will be calculated based on annualized year-to-date results as of the most recent quarter end prior to the Qualifying Termination; or (ii) the amount of Executive's cash bonus under the Incentive Plan with respect to the annual performance period for the calendar year prior to the year in which the Change in Control occurs; or (iii) the amount of Executive's cash bonus under the Incentive Plan with respect to the performance period for the calendar year prior to the year in which the Executive's Qualifying Termination occurs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Cause**" means any one or more of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)the Executive's willful, material and continued failure to perform the Executive's reasonable and customary duties with the Bank or its Affiliates, *provided that* (A) the Board of the Bank or the Parent has delivered to the Executive a written demand for substantial performance which specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive's duties and provides the Executive with at least thirty (30) consecutive calendar days to correct such failure; (B) if requested by the Executive, the Executive shall have been provided the opportunity to be heard in person by the Board of the Bank or the Parent (with the assistance of the Executive's legal counsel if the Executive so desires); and (C) the Executive has failed to correct such failure(s) within such 30 day period to the reasonable satisfaction of the Board of the Bank or the Parent, as evidenced by a resolution duly adopted in good faith by a majority of the members of such Board; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)the Executive willfully engages in dishonesty, illegal conduct or gross misconduct which is demonstrably and materially injurious to the Bank, the Parent or any of their Affiliates; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)the Executive is convicted of, or enters a plea of <u>no contest</u> to, a felony; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)the Executive willfully engages in misconduct that would justify immediate dismissal under any Code of Conduct applicable to the Bank's employees generally or any special Code of Conduct expressly applicable to the Executive by virtue of his officer title with the Parent, the Bank or any of their Affiliates; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)the Executive is the subject of a formal written sanction or order by any bank regulatory agency having jurisdiction over the Bank, the Parent or any of their Affiliates.

For purposes of this definition, no act or failure to act by the Executive shall be considered "**willful**" unless done or omitted to be done by the Executive in bad faith and without reasonable belief that the Executive's action or omission was in the best interests of the Bank, the Parent and their Affiliates. Any act or failure to act based upon authority given pursuant to a resolution duly adopted by the Board of the Bank, the Parent or any of their Affiliates, based upon the advice of counsel for the Bank, the Parent or an Affiliate, or based upon the instructions of another officer (if any) having seniority of title over the Executive, shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Bank and its Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Change in Control**" means the occurrence of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)one Person (or more than one Person acting as a group) acquires Beneficial Ownership of stock of the Parent or the Bank that, together with the stock already held by such Person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Parent or the Bank;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)one Person (or more than one Person acting as a group) acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition) Beneficial Ownership of the Parent's stock possessing more than 50% of the total voting power of the stock of the Parent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)a majority of the members of the Parent's Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)one Person (or more than one Person acting as a group), acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition) assets from the Bank or the Parent that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Bank or the Parent, as the case may be, immediately before such acquisition(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Code**" means the Internal Revenue Code of 1986, as amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Confidential Information"** means any and all information and compilations of information, in whatever form or medium (including any copies thereof), relating to any part of the business of the Parent, the Bank, or any of their Affiliates, or the business of their customers, provided to the Executive, or which the Executive obtained, compiled or had access to, or had obtained or compiled on his behalf, which information or compilations of information are not a matter of public record or generally known or available to the public, including, without limitation, but subject to the foregoing, the following:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Financial information regarding the Parent, the Bank, or any of their Affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Subject to applicable law, personnel data, including compensation arrangements relating to any employees of the Parent, the Bank, or any of their Affiliates (excluding data regarding the Executive that is part of his personnel file);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Internal plans, practices, and procedures of the Parent, the Bank, or any of their Affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)The names, personal identifying information, portfolio information, investment strategies, requirements, lending, deposit or other account information, or any similar information, of any customers, clients, or prospects of the Parent, the Bank, or any of their Affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)Business methods and marketing strategies of the Parent, the Bank, or any of their Affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)Any other information expressly identified to Executive as confidential by the officers or directors of the Parent, the Bank, or any of their Affiliates; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)The terms and conditions of this Agreement, the Employment Agreement and any documents or instruments executed in connection herewith that are not of public record.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Exchange Act**" means the Securities Exchange Act of 1934, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Good Reason**" means the occurrence of any of the following events during the Protection Period without the Executive's express written consent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)a material diminution in the Executive's authority, duties or responsibilities as in effect immediately prior to the Change in Control (other than temporarily while the Executive is physically or mentally incapacitated);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)a material reduction in the Executive's annual rate of Base Salary or Executive's target annual bonus opportunity as in effect immediately prior to the Change in Control;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)a relocation of Executive's assigned principal place of employment as in effect immediately prior to the Change in Control by more than fifty (50) "driving" miles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)the failure of the Bank or its Affiliates to continue in effect any material employee benefit plan, compensation plan, welfare benefit plan or other material fringe benefit plan in which the Executive is participating immediately prior to such Change in Control or the taking of any action by the Bank or its Affiliates which would materially and adversely affect the Executive's participation in or materially reduce the Executive's benefits under any such plan, unless (A) the Executive is permitted to participate in other plans providing the Executive with substantially equivalent benefits in the aggregate or (B) the Executive's benefits are reasonably commensurate with those paid to other officers of the Bank or Successor Corporation holding similar job responsibilities and officer titles; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)the failure of the Parent or the Bank to obtain the written assumption of this Agreement from any Successor Corporation if required under Section 6.02;

*provided, however*, that any of the foregoing events or conditions shall be deemed to constitute Good Reason only if (A) the Executive provides written notice to the Bank of the event or condition alleged to constitute Good Reason within ninety (90) days following the Executive's first knowledge of such event or condition constituting Good Reason, and (B) such event or condition shall remain uncured for a period of thirty (30) days after such notice is given. The parties intend that a termination by the Executive of his employment for Good Reason shall constitute an

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involuntary Separation from Service for purposes of Section 409A, and this provision shall be interpreted in a manner consistent with such intention.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Incentive Plan**" means the Union Bank Short-Term Incentive Performance Plan, and shall include any successor or comparable short-term incentive plan adopted by the Bank, the Parent or any Successor Corporation, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Latest Possible Revocation Period Expiration Date**" means the latest expiration date of the Revocation Period, assuming that the executed Waiver and Release is delivered to the Bank on the Waiver and Release Due Date and no earlier.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Person**" means a natural person, company, limited partnership, general partnership, limited liability company or partnership, joint venture, association, trust, bank, trust company, land trust, business trust or other organization, whether or not a legal entity, and a government or agency or political subdivision thereof; *provided, however,* that for purposes of the definitions of "Change in Control" and "Affiliate," "Person" shall be as defined in Section 3(a)(9) of the Exchange Act and as used in Section 13(d)(3) of the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Protection Period**" means the two (2) year period beginning with a Change in Control and ending two (2) years following such Change in Control; *provided, however,* that the Protection Period shall also include the six-month period before the occurrence of the Change in Control if, (i) during such six (6) month period, (A) the Executive's employment is terminated without Cause in anticipation of the Change in Control (other than as a result of expiration of the Executive's Employment Agreement in accordance with its terms) or (B) the Executive's employment is terminated by the Executive with Good Reason, and (ii) the Change in Control in fact occurs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Qualifying Termination**" means a termination of the Executive's employment during the Protection Period in a manner that constitutes a Separation from Service under Section 409A (i) by the Bank without Cause, or (ii) by the Executive with Good Reason. For the avoidance of doubt, expiration of the Executive's Employment Agreement according to its terms during the six (6) month period immediately preceding a Change in Control shall not constitute a Qualifying Termination under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Revocation Period**" means the period during which the Executive may revoke an executed Waiver and Release following a Qualifying Termination, as provided in Section 6 of the Waiver and Release.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Section 409A**" means Section 409A of the Code, and the regulations and other guidance promulgated thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Separation from Service**" has the meaning ascribed to such term under Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Successor Corporation**" means any corporation or other Person that acquires control of the Bank or the Parent, directly or indirectly, in a transaction or series of transactions constituting a Change in Control, whether by merger, share exchange or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Waiver and Release"** means the a written waiver and release of certain claims by Executive in the form set forth in **<u>Exhibit A</u>** to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "**Waiver and Release Due Date**" means forty-fifth (45th) calendar day following the Executive's Qualifying Termination, or if later, the forty-fifth (45<sup>th</sup>) day following the date on which the Bank delivered the execution copy of the Waiver and Release to the Executive for his consideration and signature.

------

**EXHIBIT A**

**WAIVER AND RELEASE**

**THIS WAIVER AND RELEASE** (this "**Waiver and Release**") is executed and delivered by Jeffrey F. Weidley (the "**Executive**") pursuant to Section 3.08 of a Change in Control Agreement dated February 26, 2026 between the Executive and Union Bank (the "**Bank**") and joined in by Union Bankshares, Inc. (the "**Parent**") for certain purposes (the "**CIC Agreement**");

**Section 1.<u>Termination of Employment; Effective Date of Release; Timing of Payment</u>**. The Executive acknowledges that the Executive's employment has been or will be terminated on _______________, 20__ in accordance with the CIC Agreement and that the Executive is required to timely execute and deliver this Waiver and Release in order to receive the payment of certain severance benefits under the CIC Agreement following a Qualifying Termination of employment (as defined in the CIC Agreement). To be considered timely, this executed Waiver and Release must be delivered to the Bank no later than the forty-fifth (45th) calendar day following the Executive's Qualifying Termination, or if later, the forty-fifth (45<sup>th</sup>) day following the date on which the Bank delivered the execution copy of the Waiver and Release to the Executive for his consideration and signature. Subject to Section 6 of this Waiver and Release, this Waiver and Release is effective on the date of execution shown on the signature page and will continue in effect thereafter. If the beginning of the foregoing 45 day period and the end of the revocation period referenced in Section 6 below span two calendar years, the payment due to the Executive shall in all events be made in the second of such calendar years.

**Section 2.<u>Released Parties; Release and Waiver of Claims, Actions, Etc.</u>** In consideration of the payments to be made and the benefits to be received by the Executive pursuant to Article 3 of the CIC Agreement (the "**Severance Benefits**") which the Executive acknowledges includes payments and benefits *in addition to* payments and benefits the Executive otherwise would be entitled to receive, the Executive, on behalf of himself/herself, his heirs, representatives, agents and assigns hereby COVENANTS AND AGREES NOT TO SUE OR OTHERWISE VOLUNTARILY PARTICIPATE IN ANY LAWSUIT AGAINST, AND FULLY RELEASES, INDEMNIFIES, HOLDS HARMLESS AND OTHERWISE FOREVER DISCHARGES

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)the Bank,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)the Parent,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)any other companies controlled by, controlling or under common control with the Bank, and any predecessors, successors or assigns to the foregoing (together with the Bank and the Parent, the "**Union Affiliates**"),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)the Union Affiliates' compensation, benefit, incentive (including, but not limited to, individual incentive, annual incentive, long-term incentive and annual bonus), retirement, supplemental retirement, welfare, equity compensation and other plans and arrangements, and any predecessor or successor to any such plans and arrangements (including the sponsors, administrators, fiduciaries and advisors of any such plan and/or arrangements), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)any of the Union Affiliates' current or former officers (other than the Executive), directors, agents, executives, employees, attorneys, insurers, shareholders, predecessors, successors or assigns (the parties referred to in this clause (v) or in any of the foregoing clauses (i) through (iv) are referred to herein collectively as the "**Released Parties**")

------

from any and all actions, charges, claims, demands, damages or liabilities of any kind or character whatsoever, whether known or unknown, which the Executive now has or may have had, directly or indirectly based on or arising out of the Executive's employment relationship with the Union Affiliates or the termination of that employment relationship, through the date of execution of this Waiver and Release, whether arising under statute or common law, including the laws governing torts and contracts.

**Section 3.<u>Specific Laws and Categories of Claims Waived and Released</u>**. Without limiting the generality of the scope of the waiver and release contained in Section 2 above, but subject to Section 4 below, (i) the Executive understands and agrees that in the event the Executive files a charge or complaint with the federal Equal Employment Opportunity Commission, or any similar state agency, the federal Occupational Safety and Health Administration, or any similar state agency or the federal Department of Labor or any state department of labor, the Executive shall not be entitled to any monetary relief, reinstatement, remuneration, damages, back pay, front pay, or compensation whatsoever from the Union Affiliates as a result of such charge or complaint; and (ii) the Executive understands and agrees that by executing and delivering this Waiver and Release he is waiving and releasing any and all actions and causes of action, suits, debts, claims, complaints and demands of any kind whatsoever, in law or in equity, relating directly or indirectly to Executive employment with the Union Affiliates or the termination of that employment, including, but not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)(A) Any claims relating to the Executive's hiring, employment or termination; (B) any claims relating to any alleged discrimination, harassment or retaliation on any basis; (C) any claims arising from any legal restrictions on an employer's right to separate its employees; (D) any claims for compensation and benefits; (E) any claim on account of, arising out of or in any way connected with the alleged termination of the Executive's employment without "cause" or for "good reason"; (F) any claim on account of, arising out of or in any way connected with any medical, dental, life insurance or other welfare benefit plan or any pension or equity compensation plan; (G) any claim of breach of employee handbooks, manuals or other policies; and (H) any claim of wrongful or constructive discharge; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Those arising under any law relating to sex, age, race, color, religion, handicap or disability, harassment, veteran status, sexual orientation, retaliation, or national origin discrimination including, without limitation, any rights or claims arising under Title VII of the Civil Rights Act of 1866 and 1964, as amended, 42 U.S.C.§§ 1981 and 2000(e),et seq.; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967 (the "**ADEA**"), as amended, 29 U.S.C. §§ 621, et seq., as amended by the Older Workers Benefit Protection Act (the "**OWBPA**"); the Employee Retirement Income Security Act of 1974; the Family and Medical Leave Act, 29 U.S.C. §§ 2601 et seq.; the Americans with Disabilities Act of 1990, as amended, 42 U.S.C. §§12,101, et seq.; Sections 806 and 1107 of the Sarbanes-Oxley Act of 2002; the Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201, et seq.; the National Labor Relations Act, 29 U.S.C. §§151, et seq.; the Occupational Safety and Health Act, 29 U.S.C. §§ 651, et seq.; the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101, et seq.; and any similar state or local laws, as any such federal or state or local laws may be amended from time to time; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Any claim for reinstatement, compensatory damages, back pay, front pay, interest, punitive damages, special damages, legal and/or attorneys' fees, expenses and litigation costs including expert fees.

------

**Section 4.<u>Limited Matters Excluded from Waiver and Release</u>**. Notwithstanding anything herein to the contrary, excluded from this Waiver and Release are the following: (i) the Executive's rights of indemnification and directors and officers liability insurance coverage, if any, to which the Executive was entitled immediately prior to the date of the Executive's termination of employment with the Union Affiliates, in connection with his service as an officer or director of any of the Union Affiliates; (ii) the Executive's rights under Articles 3 and 6 of the CIC Agreement which are intended to survive termination of employment; (iii) the Executive's right under the ADEA to challenge the validity of this Waiver and Release in a court of law; (iv) any claims arising after the Executive signs this Waiver and Release; and (v) any other claims that cannot be waived by law.

**Section 5.<u>OWBPA Compliance</u>**. The Executive acknowledges that this Waiver and Release is intended to comply fully with the requirements of the Older Workers Benefit Protection Act (29 U.S.C. § 626) and any similar federal or state law governing the release of claims. Accordingly, the Executive hereby acknowledges, represents and agrees that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)The Bank has advised the Executive to consult with his own attorney regarding the execution of this Waiver and Release and the Executive has read and fully understands all of the provisions of this Waiver and Release.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)The Executive has at least forty-five (45) days in which to review and consider this Waiver and Release.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)The Executive waives any right to assert any claim or demand for reemployment with the Union Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)(If applicable) The Executive acknowledges receipt of the attached OWBPA Notice containing the titles and ages of employees who are eligible and ineligible for this program in the Executive's decisional unit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)The Executive is voluntarily signing this Waiver and Release.

**Section 6.<u>Seven Day Revocation Period</u>**. Executive has a period of seven (7) calendar days following the execution and delivery to the Bank of this Waiver and Release (the "**Revocation Period**") during which Executive may revoke this Waiver and Release by delivering timely notice of revocation to the Bank. To be effective, any such revocation must be in writing, signed by the Executive and received by the Bank prior to 5:00 p.m. (Eastern) on the last day of the Revocation Period at the following address:

Union Bank

PO Box 667

Morrisville, VT 05661

Attn: Chair, Board of Directors

*provided, however,* that if the seventh calendar day is not a business day, the Revocation Period shall extend to 5:00 p.m. (Eastern) on the next business day.

**Once the Revocation Period has expired, this Waiver and Release shall become effective and irrevocable**. The Executive understands that if he/she revokes this Waiver and Release during the seven day Revocation Period, it will be null and void in its entirety, and Executive shall not be entitled to any payment under the CIC Agreement.

**Section 7.<u>Enforcement Rights and Remedies of the Union Affiliates</u>**. In addition to the provisions of this Waiver and Release, the Executive acknowledges and affirms that he is bound by the covenants contained in Article 5 of the CIC Agreement (the "**Covenants**"). In the event that

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the Executive breaches or threatens to breach any provision of the Covenants or of this Waiver and Release, he agrees that the Union Affiliates shall be entitled to seek any and all equitable and legal relief provided by law, specifically including immediate and permanent injunctive relief and contractual reimbursement of payments made and benefits provided. The Executive hereby waives any claim that any of the Union Affiliates has an adequate remedy at law. In addition, and to the extent not prohibited by law, the Executive agrees that the Union Affiliates shall be entitled to an award of all costs and attorneys' fees incurred by the Union Affiliates in any successful effort to enforce the terms of this Waiver and Release and/or the Covenants. The Executive agrees that the foregoing relief shall not be construed to limit or otherwise restrict the Union Affiliates' ability to pursue any other remedy provided by law, including the recovery of any actual, compensatory or punitive damages. Moreover, if the Executive pursues any claims against the Union Affiliates subject to the foregoing Waiver and Release, Executive agrees to immediately reimburse the Union Affiliates for the value of all Severance Benefits received to the fullest extent permitted by law.

**Section 8.<u>No Admission of Liability or Wrongdoing</u>**. The Executive acknowledges that this Waiver and Release is entered into solely for the purpose of ending his employment relationship with the Union Affiliates on an amicable basis and shall not be construed as an admission of liability or wrongdoing by the Executive or the Bank or other Union Affiliate.

**Section 9.<u>Binding Effect</u>**. Each of the promises and obligations contained in this Waiver and Release shall be binding upon and shall inure to the benefit of the heirs, executors, administrators, assigns and successors in interest of the Executive. The benefits of this Waiver and Release shall inure to the Union Affiliates and the other Released Parties and to their respective heirs, executors, administrators, assigns and successors in interest. Further, the Executive acknowledges that each of the Union Affiliates and other Released Parties is an intended beneficiary of this Waiver and Release.

**Section 10.<u>Provisions Severable</u>**. The Executive agrees that each and every paragraph, sentence, clause, term and provision of this Waiver and Release is severable and that, if any portion of this Waiver and Release should be deemed not enforceable for any reason, such portion shall be stricken and the remaining portion or portions thereof should continue to be enforced to the fullest extent permitted by applicable law.

**Section 11.<u>Governing Law</u>**. This Waiver and Release shall be interpreted, enforced and governed under the laws of the State of Vermont, without regard to any applicable state's choice of law provisions.

**Section 12.<u>No Reliance</u>**. The Executive represents and acknowledges that in signing this Waiver and Release he does not rely, and has not relied, upon any representation or statement made by the Union Affiliates or by any of the Union Affiliates' employees, officers, agents, shareholders, directors or attorneys with regard to the subject matter, basis or effect of this Waiver and Release other than those specifically contained herein.

**BY SIGNING BELOW, I ACKNOWLEDGE THAT**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **I HAVE READ THIS WAIVER AND RELEASE CAREFULLY;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY CONCERNING THIS DOCUMENT AND ITS LEGAL CONSEQUENCES; AND**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **I UNDERSTAND THAT THIS WAIVER AND RELEASE INCLUDES A COMPLETE RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS AGAINST EACH OF THE RELEASED PARTIES EXCEPT AS EXPRESSLY EXCLUDED IN SECTION 4 ABOVE.**

------

**IN WITNESS WHEREOF**, the Executive has signed this Waiver and Release and hereby acknowledges his intent to be bound by its terms and conditions, on this __ day of _________, 20__.

---

| |
|:---|
| **EXECUTIVE** |
| Signature |
| Jeffrey F. Weidley |

---

## Exhibit 21.1

**Exhibit 21.1**

**SUBSIDIARIES OF THE COMPANY**

Wholly-owned subsidiary of Union Bankshares, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Union Bank, incorporated in the State of Vermont.

## Exhibit 23.1

**Exhibit 23.1**

![bdmplogo.jpg](bdmplogo.jpg)<br>

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the inclusion in this Annual Report (Form 10-K) of Union Bankshares, Inc. of our report dated March 20, 2026 with respect to the consolidated financial statements for the year ended December 31, 2025, included in the 2025 Annual Report to Shareholders of Union Bankshares, Inc.

We also consent to the incorporation by reference in the Registration Statement (Form S-3 No. 333-209815) pertaining to the Union Bankshares, Inc. Dividend Reinvestment and Stock Purchase Plan, in the Registration Statement (Form S-3 No. 333-285164) pertaining to Union Bankshares, Inc. common stock offering, and in the Registration Statement (Form S-8 No. 333-283389) pertaining to the Union Bankshares, Inc. 2024 Equity Incentive Plan, of our report dated March 20, 2026, with respect to the consolidated financial statements, incorporated therein by reference, of Union Bankshares, Inc. included in the Annual Report (Form 10-K) for the year ended December 31, 2025.

![bdmpsignature.jpg](bdmpsignature.jpg)<br>

Manchester, New Hampshire

March 20, 2026

Vermont Registration No. 92-0000278

**berrydunn.com**

## Exhibit 31.1

 **Exhibit 31.1**

**CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER**

I, David S. Silverman, certify that:

1.&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this annual report on Form 10-K of Union Bankshares, Inc.;

2.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. &nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. &nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect the registrant's internal control over financial reporting; and

5. &nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date: March 20, 2026

---

| |
|:---|
| /s/ David S. Silverman |
| David S. Silverman<br>Director, President and Chief Executive Officer<br>(Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF THE CHIEF FINANCIAL OFFICER**

I, Karyn J. Hale, certify that:

1.&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this annual report on Form 10-K of Union Bankshares, Inc.;

2.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. &nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. &nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect the registrant's internal control over financial reporting; and

5. &nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date: March 20, 2026

---

| |
|:---|
| /s/ Karyn J. Hale |
| Karyn J. Hale<br>Chief Financial Officer<br>(Principal Financial Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED**

**PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report of Union Bankshares, Inc. (the "Company") on Form 10-K for the period ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned Chief Executive Officer of the Company hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002 that to the best of his knowledge: 1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and 2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

A signed original of this written statement required by Section 906 has been provided to Union Bankshares, Inc. and will be retained by Union Bankshares, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

---

| |
|:---|
| /s/ David S. Silverman |
| David S. Silverman<br>Chief Executive Officer |

---

March 20, 2026

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED**

**PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report of Union Bankshares, Inc. (the "Company") on Form 10-K for the period ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned Chief Financial Officer of the Company hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002 that to the best of his knowledge: 1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and 2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

A signed original of this written statement required by Section 906 has been provided to Union Bankshares, Inc. and will be retained by Union Bankshares, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

---

| |
|:---|
| /s/ Karyn J. Hale |
| Karyn J. Hale<br>Chief Financial Officer |

---

March 20, 2026

<br>