Exhibit 99.1

[LOGO APPEARS HERE]

UNION BANKSHARES REPORTS INCREASE IN ANNUAL AND 4th QUARTER EARNINGS

FOR IMMEDIATE RELEASE (Bowling Green, Virginia) — Union Bankshares (Nasdaq: UBSH—News) is pleased to report net income for the year 2003 of $16.7 million up 14.9% from $14.5 million for the same period in 2002. Over this same period, earnings per share on a diluted basis increased 14.2% to $2.17 from $1.90 for the same period in 2002. Return on average equity for the year ended December 31, 2003 was 14.88%, while return on average assets for the same period was 1.42%, compared to 14.91% and 1.41% respectively, for the year ended December 31, 2002.

For the quarter ended December 31, 2003, net income totaled of $4,189,000, an increase of 5.2 % from $3,983,000 a year ago. Earnings per share on a diluted basis increased by 3.8% to $.54 from $.52 for the same quarter in 2002. Return on average equity for the quarter was 14.32%, and return on average assets for the same period was 1.36 %, as compared to 15.28% and 1.45%, respectively, for the fourth quarter of 2002.

Fourth quarter net income for the mortgage banking segment decreased to $182,000, a decline of $472,000 or 72.2% from $654,000 in the same quarter of 2002. For the quarter, net income for the community banking segment was $4.0 million, an increase of $700,000 or 21.2% from $3.3 million for the fourth quarter of 2002. For the year ended December 31, 2003, net income for the community bank segment increased by 10.3% to almost $14.2 million from $12.9 million in 2002 , while the mortgage segment increased by 51.1% to almost $2.5 million from $1.6 million for the same period in 2002.

Net interest income for the quarter ended December 31, 2003 was up $369,000 or 3.5% from the fourth quarter of 2002. Average earning assets grew to $1.15 billion compared to $1.03 billion in the prior year quarter providing the Company with a higher earnings base. This volume growth offset a decrease of 35 basis points in the net interest margin (FTE) which decreased to 3.99% in the fourth quarter of 2003, down from 4.34% in the same quarter of 2002, and down from 4.03% in the third quarter of 2003.

Loans increased 22.9% or $163.5 million from year end 2002 and 4.9% or $41.3 million from September 30, 2003. Yields on loans (FTE) decreased from 7.27% during the fourth quarter of 2002 and from 6.45% in the third quarter 2003 to 6.23% for the fourth quarter of 2003. The cost of funds also declined, from 2.89% in the fourth quarter of 2002 and 2.53% for the third quarter of 2003 to 2.46% in the fourth quarter of 2003. Loan yields declined by 22 basis points during the fourth quarter of 2003 while deposits and other borrowings declined by only 7 basis points which led to the narrowed margin. Deposit levels were up $102.8 million, or 11.5%, from year end 2002 and $11.3 million, or 1.1%, from the third quarter of 2003.

For the quarter ended December 31, 2003, the provision for loan losses was $372,000 down $287,000 from $659,000 a year earlier. This decreased provision is reflective of the general improvement in asset quality and to recoveries of previously charged off credits. At December 31, 2003, nonperforming assets totaled $9.6 million including a single credit relationship comprising $8.1 million. The allowance for loan losses is up slightly at 1.31% of gross loans from 1.28% a year earlier.

Noninterest income for the fourth quarter increased $116,000 or 2.3% from a year ago and included a $727,000 or 23.1% decrease in gains on sales of loans. Service charges on deposit accounts showed an increase of $486,000 or 42.3% for the same period, offsetting much of the loan sale decrease. Securities gains of $127,000 and gains on the sale of bank property of $138,000 helped offset the remainder of the loan sale decrease.

Noninterest expense for the fourth quarter 2003 increased by $665,000 or 7.0% from a year ago while assets grew by 10.7%. With the slowing of the mortgage business in the fourth quarter, this increase is attributable to our expansion efforts. In the fourth quarter in particular, expenses were up due to the loan production office in Richmond, a new branch in Richmond and staff expansions in Rappahannock and Bank of Williamsburg. The Company continues to focus on expense controls to create greater operating efficiencies as it grows, but realizes that infrastructure growth and market expansion in the future will impact expenses before adding meaningful income.

“2003 ended much the way it started for our Company…with pride in our recent successes and optimism for the potential of the coming year”, said President G. William Beale. “We are very pleased with the record levels of profitability for the Company and for the community banking and mortgage banking segment, particularly in a challenging economic environment.

Our mortgage segment closed out a year that saw its profits increase 50% despite a fourth quarter that brought higher long-term rates and a slowing in mortgage activity that the industry has been anticipating for some time. We expect this reduced level of mortgage activity to continue into 2004, with production levels budgeted at 60% of the prior year. Refinance activity accounted for 32% of our $91 million in mortgage originations during the quarter, down from 59% a year earlier and 48% in the third quarter. These refinance levels are less than industry averages and reflect a greater focus by our lenders on recurring business with builders and realtors which we hope will translate to continued strong levels of non-refinance originations .

“The community banking sector continued to perform well, amid numerous growth initiatives. The net interest margin continued to stabilize during the fourth quarter despite competitive loan pricing. Our balance sheet is currently asset sensitive, indicating the margin should improve in a rising rate environment, but interest rate forecasts suggest such improvement is unlikely until late 2004.

“During the fourth quarter, we continued to invest in people and additional locations to take advantage of opportunities in existing and adjacent markets. This culminated in our recent announcement of a definitive agreement to acquire Guaranty Financial Corporation in Charlottesville. We are excited about the potential of this combination and the synergies it creates in a strong growth market. We anticipate beginning this venture mid-second quarter 2004, after regulatory and shareholder approvals. Other initiatives expected to begin in 2004 include a new full-service branch at Parham and Three Chopt in Richmond which is expected to open in March 2004 adjacent to our Loan Production Office and previously announced branch additions on Pole Green Road and on Rt 360 in Mechanicsville . Our fifth convenience store branch opened in a Fas Mart convenience store located on Pouncey Tract Road in the West End of Richmond in November 2003. While we expect these initiatives will contribute greatly to the long term growth and profitability of our Company, we anticipate they will create some short-term drag on earnings in 2004.

At December 31, 2003 total assets were $1.23 billion, up 10.7% from $1.12 billion at December 31, 2002. Deposits increased to $1.0 billion, up $102.8 million or 11.5% over $897.6 million at the end of the year 2002 while loans totaled $878.3 million, up $163.5 million or 22.9% over year end 2002 levels. Securities declined to $240.1 million at December 31, 2003 compared to $272.8 million a year earlier. The Company’s capital position remains strong with an equity-to-assets ratio of 9.6 %.

Union Bankshares is one of the largest community banking organizations based in Virginia, providing full service banking to the Central, Rappahannock, Williamsburg and Northern Neck regions of Virginia through its bank subsidiaries, Union Bank & Trust (20 locations in the counties of Caroline, Hanover, Henrico, King George, King William, Spotsylvania, Stafford, Westmoreland and the City of Fredericksburg), Northern Neck State Bank (9 locations in the counties of Richmond, Westmoreland, Essex, Northumberland and Lancaster), Rappahannock National Bank in Washington, Virginia and Bank of Williamsburg in Williamsburg and Newport News. Union Bank & Trust also operates loan production offices in Manassas and Richmond, Virginia. In addition to banking services, Union Investment Services, Inc. provides full brokerage services and Mortgage Capital Investors provides a full line of mortgage products.

The Company recently announced it had signed a definitive agreement pursuant to which Union will acquire Guaranty Financial Corporation, a nearly $200 million in assets company operating sales offices in the Greater Charlottesville area of Virginia. It is anticipated that, subject to regulatory and shareholder approvals, the transaction will close in the second quarter of 2004 at which time Union would become the second largest banking company headquartered in Virginia based on the most recent data available.

This press release may contain “forward-looking statements,” within the meaning of federal securities laws that involve significant risks and uncertainties. Statements herein are based on certain assumptions and analyses by the Company and are factors it believes are appropriate in the circumstances. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: changes in interest rates; changes in accounting principles, policies, or guidelines; significant changes in economic conditions; significant changes in regulatory requirements; and significant changes in securities markets. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in the Company’s most recent Form 10-K report and other documents filed with the Securities and Exchange Commission. Union Bankshares Corporation does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

UNION BANKSHARES CORPORATION

Comparative Balance Sheets

6

Union Bankshares Corporation

Comparative Income Statements

This Quarter vs. Same Quarter Last Year

Union Bankshares Corporation

AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)