SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 5, 2008
(Exact name of registrant as specified in its charter)
UNION BANKSHARES, INC.
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
Vermont 001-15985 03-0283552
(Address of principal executive offices)
20 Main St., P.O. Box 667 (Zip Code)
Morrisville, VT 05661-0667
Registrant's telephone number, including area code: (802) 888-6600
(Former name or former address, if changed since last report)
Not applicable
Check the appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting materials pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02: Results of Operations and Financial Condition
As provided in General Instruction B.2 to Form 8-K, the information
furnished in this Item 2.02 and in Exhibit 99.1 hereto shall not be deemed
filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as
amended, nor shall it be deemed incorporated by reference in any filing with
the Securities and Exchange Commission, except as shall be expressly provided
by specific reference in such filing.
On November 6, 2008, Union Bankshares, Inc. mailed its Third Quarter 2008
unaudited Report to Shareholders, a copy of which is furnished with this
Form 8-K as Exhibit 99.1, presenting information concerning our results
of operations and financial condition for our third quarter and nine
months ended September 30, 2008 and the declaration of a regular
quarterly dividend.
Item 8.01: Other Events
The U.S. and global economies have experienced and are experiencing significant
stress and disruptions in the financial sector. Dramatic slowdowns in the
housing industry with falling home prices and increasing foreclosures and
unemployment have resulted in major issues for some financial institutions,
including government-sponsored entities and investment banks. These issues have
caused many financial institutions to seek additional capital, to merge with
larger and stronger institutions and, in some cases, to fail.
Despite the volatile economy, Vermont has the lowest residential foreclosure
rate in the country. Also, as northern New England had not experienced the
dramatic run up in housing prices, likewise, we have not seen the values drop
as far as other parts of the country.
In response to the financial crisis affecting the banking and financial
markets, in October 2008, the Emergency Economic Stabilization Act of 2008 (the
"EESA") was signed into law. Pursuant to the EESA, the Federal Deposit
Insurance Corporation temporarily increased the deposit insurance coverage
limits to $250,000 per ownership category at each insured financial institution
until December 31, 2009. Also, the U.S. Treasury ("the Treasury") will have the
authority to, among other things, purchase up to $700 billion of mortgages,
mortgage-backed securities and certain other financial instruments from
financial institutions for the purpose of stabilizing and providing liquidity
to the U.S. financial markets under the Troubled Asset Purchase Program (the
"TARP").
In addition, the Treasury announced that it has been authorized to purchase
equity stakes in U.S. financial institutions. Under this program, known as the
Troubled Asset Relief Program Capital Purchase Program (the "TARP Capital
Purchase Program"), from the $700 billion authorized by the EESA, the Treasury
will make $250 billion of capital available to U.S. financial institutions in
the form of preferred stock. The purchase of preferred stock investments will
be accompanied by the issuance to the Treasury of warrants to purchase common
stock with an aggregate market price equal to 15% of the total amount of the
preferred stock. Participating financial institutions will be required to adopt
the Treasury's standards for executive compensation and corporate governance
for the period during which the Treasury holds equity issued under the TARP
Capital Purchase Program and be restricted from increasing dividends to common
shareholders or repurchasing common stock for three years without the consent
of the Treasury.
Further, after receiving a recommendation from the boards of the Federal
Deposit Insurance Corporation ("the FDIC") and the Federal Reserve System (the
"Federal Reserve"), the Treasury signed the systemic risk exception to the FDIC
Act, enabling the FDIC to temporarily provide a 100% guarantee of the senior
unsecured debt of all FDIC-insured institutions and their holding companies, as
well as 100% of deposits in noninterest bearing transaction deposit accounts
under a Temporary Liquidity Guarantee Program. Coverage under the Temporary
Liquidity Guarantee Program is available for 30 days without charge and
thereafter at a cost of 75 basis points per annum for senior unsecured debt and
10 basis points per annum for noninterest bearing transaction deposits in
excess of the $250,000 insured deposit limit.
On November 5, 2008 the Company's Board of Directors approved the Company's
participation in the Temporary Liquidity Guarantee Program regarding the
Noninterest Bearing Deposit Account Guarantee but decided to opt out of the
Senior Unsecured Debt Guaranty portion of that program. The Board also
determined that it is not in the best interest of the Company or its
shareholders to participate in either the Troubled Asset Purchase Program or
the Capital Purchase Program available under TARP given the strength of the
Company's capital position, government restrictions and the fact that the
Company did not target sub-prime borrowers.
It is not clear at this time what impact the EESA, the TARP Capital Purchase
Program, the Temporary Liquidity Guarantee Program, other liquidity and funding
initiatives of the Federal Reserve and other agencies that have been previously
announced, and any additional programs that may be initiated in the future will
have on the Company and the U.S. and global financial markets.
Item 9.01: Financial Statements and Exhibits
d) Exhibit:
99.1 Union Bankshares, Inc. Third Quarter Report to Shareholders
mailed November 6, 2008 referred to in Item 2.02 of the Report, is
furnished, not filed, herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Union Bankshares, Inc.
November 12, 2008 /s/ Marsha A. Mongeon
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Marsha A. Mongeon, Chief Financial Officer
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EXHIBIT INDEX
99.1 Union Bankshares, Inc., Third Quarter Report to Shareholders
mailed November 6, 2008.