ELLSWORTH – Union Bankshares Co. has reported a 9 percent increase in net income for the first quarter of 2003 compared to the same period last year.

Growth was driven largely by gains in noninterest income, more specifically in consumer mortgages and financial services business.

Declining interest rates continue to encourage record numbers of mortgage financing applications putting severe pressure on net interest margins. Loan department fee income grew 69 percent or $203,161 while net interest income declined by $99,755 for the same period. The decline in net interest income occurred despite growth of $31.6 million in assets.

Despite a difficult stock market, there was an increase of 26 percent in financial services income. Financial services encompass trust and investment, financial planning and cornerstone businesses.

On the balance sheet, the loan portfolio grew by $9.5 million or 4.5 percent over first quarter 2002 while deposits were up $17.5 million or 6.9 percent year on year.

The board of directors also has approved a 12-month extension of the stock repurchase program instituted last year. Under that plan the corporation is authorized to purchase up to 5 percent or 28,850 shares of the outstanding common stock.

Union Bankshares Co. is the holding company for Union Trust Co., an independent, community bank with 16 offices along the coast of Maine from Waldoboro to Machias. As of Dec. 31, 2002, Union Trust had assets in excess of $380 million.