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Risks

• Our loans are concentrated in certain areas of Vermont and New Hampshire and adverse conditions in those markets could adversely affect our operations.
• If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings could decrease.
• Our commercial, commercial real estate and construction loan portfolio may expose us to increased credit risks.
• Changes in interest rates and interest rate volatility may reduce our profitability.
• Our cost of funds for banking operations may increase as a result of loss of deposits or a change in deposit mix.
• Wholesale funding sources may prove insufficient to replace deposits at maturity and support our operations and future growth.
• Environmental liability associated with our lending activities could result in losses.
• We operate in a highly regulated environment and may be adversely affected by changes in laws, regulations and monetary policy.
• Additional requirements imposed by the Dodd-Frank Act could adversely affect us.
• We may become subject to more stringent capital requirements.
• We face significant legal risks, both from regulatory investigations and proceedings and from private actions brought against us.
• 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 financial statements are based in part on assumptions and estimates, which, if wrong, could cause unexpected losses in the future.
• If we do not maintain net income growth, the market price of our common stock could be adversely affected.
• We are a holding company and depend on Union Bank for dividends, distributions and other payments.
• Our stockholders may not receive dividends on our common stock.
• We may need to raise additional capital in the future and such capital may not be available when needed.
• Market volatility may impact our business and the value of our common stock.
• Certain provisions of our articles of incorporation may have an anti-takeover effect.
• 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.
• 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 or proprietary information, damage our reputation, or result in financial losses.
• We may suffer losses as a result of operational risk or technical system failures.
• We rely on other companies to provide key components of our business infrastructure.
• Competition in the local banking industry may impair our ability to attract and retain customers at current levels.
• We may incur significant losses as a result of ineffective risk management processes and strategies.
• 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.
• 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 may be unable to attract and retain key personnel.
• We are subject to reputational risk.
• We may be required to write down goodwill and other identifiable intangible assets.
• The ongoing COVID-19 pandemic and measures intended to prevent its spread could have a material adverse effect on our business, results of operations and financial condition, and such effects will depend on future developments, which are highly uncertain and are difficult to predict.