Union Bankshares (UNB -0.04%), a community-focused bank serving Northern Vermont and New Hampshire, announced its earnings results for the second quarter of fiscal 2025 on August 7, 2025. The company reported net income of $2.4 million (GAAP). Net income showed a meaningful year-over-year increase. No consensus analyst estimates were available, but the company’s results compared favorably to its performance in Q2 2024, with notable improvements in earnings per share and asset growth. The quarter demonstrated continued expansion in key banking metrics and operational stability amid a competitive landscape.
| Metric | Q2 2025 | Q2 2024 | Y/Y Change |
|---|---|---|---|
| EPS (GAAP) | $0.53 | $0.45 | 17.8% |
| Revenue (GAAP) | N/A | N/A | N/A |
| Net Interest Income | $10.4 million | $9.5 million | 9.5% |
| Net Income | $2.4 million | $2.0 million | 20.0% |
| Total Assets | $1.48 billion | $1.40 billion | 5.9% |
| Book Value Per Share | $15.66 | $14.16 | 10.6% |
Business Overview and Strategic Focus
Union Bankshares (UNB -0.04%) is a bank holding company with operations centered in local, relationship-driven community banking. Its core business includes traditional lending, deposit services, and wealth management, primarily within small-town markets in Vermont and New Hampshire. The bank makes community development and customer service its central focus, using local expertise and personal relationships to compete against larger regional and national institutions.
In recent years, the company has emphasized responsible growth, risk discipline, and investment in employee development. Central to its strategy are five themes: managing net interest income, maintaining regulatory compliance, bolstering human capital, reinforcing community relationships, and sustaining competitive positioning. Success depends on the bank’s ability to balance interest rate sensitivity, expense control, and targeted product offerings that reflect the needs of its local customer base.
Key Developments in the Second Quarter
Net income (GAAP) increased 18.6%. Earnings per share grew 17.8% compared to Q2 2024. Total assets rose to $1.48 billion, driven by loan growth of 9.8% from June 30, 2024 to June 30, 2025 and a steady rise in deposit balances. Net interest income, which represents the difference between interest earned on loans and paid on deposits and borrowings, climbed 10.1% (GAAP), reflecting continued disciplined loan expansion and slightly higher yields on earning assets.
Interest income expanded to $18.7 million compared to Q2 2024, up 13.1%, but interest expense also grew, reflecting a competitive market for deposits and an increased reliance on wholesale funding. The company’s wholesale funding, such as advances from other financial institutions, rose by 7.7% to $336.0 million as of June 30, 2025, compared to June 30, 2024.
Noninterest income, which includes revenue from wealth management and bank service charges, remained steady at $2.8 million. While this provided stability, no growth in this area was observed. Expense control remained a challenge: noninterest expenses increased 7.2%, largely from higher salaries and employee benefits. Other operating expenses, including equipment and occupancy, also ticked up moderately.
Asset quality stayed strong. The company reported minimal net credit losses and highlighted continued low levels of past-due loans. It also completed $31.0 million in residential loan sales to the secondary market. Management noted an improvement in its investment securities portfolio, with a reduction in accumulated other comprehensive loss to $31.2 million as of June 30, 2025 (down from $35.2 million as of June 30, 2024). The company’s Community Reinvestment Act rating remained at the highest level, “Outstanding.”
Product and Service Highlights
Union Bankshares’ primary products include traditional residential mortgages, commercial lending, and business service packages. These are supplemented by wealth management services and specialized programs such as United States Small Business Administration (SBA) loans. The company remains a top originator of mortgages for the Vermont Housing Finance Agency, helping customers access affordable home loan options. Union Bankshares is designated as an SBA Preferred Lender for its participation in small business lending.
The quarter saw robust activity in residential mortgage originations, helping drive loan growth. Wealth management income increased slightly, but noninterest income as a whole did not rise. The company maintained a wide range of deposit products, including time deposits, which rose 13.2% from June 30, 2024, to June 30, 2025. Management addressed headwinds in the local tourism sector caused by weaker Canadian currency, but does not expect a substantial effect on operating results.
Looking Forward
Management did not provide detailed quantitative forward guidance for either the rest of fiscal 2025 or the coming quarters. The company continues to monitor rising costs tied to funding, particularly from increased interest expense and greater reliance on wholesale sources. Asset quality remains strong with minimal past due loans and net recoveries for the three and six months ended June 30, 2025. Management expressed confidence in sustaining its core strategies, but cautioned about ongoing uncertainties in tourism and the broader economy.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
