Exhibit 99.1

UNION BANKSHARES REPORTS INCREASE IN 2nd QUARTER RESULTS

FOR IMMEDIATE RELEASE (Bowling Green, Virginia) — Union Bankshares (NASDAQ: UBSH - News) reports net income for the second quarter ended June 30, 2005 of $6.6 million, up 45% from the same quarter in 2004. Earnings per share, on a diluted basis increased from $.53 to $.75 over the same time period. Return on average equity for the quarter ended June 30, 2005 was 15.85%, while return on average assets for the same period was 1.54%, compared to 12.13% and 1.23 %, respectively, for the quarter a year earlier. Results for the first four months of 2004 do not reflect the May 1, 2004 acquisition of Guaranty Financial Corporation (“Guaranty”).

On a linked quarter basis (current quarter to most recent quarter) net income improved 21.3% from $5.45 million to $6.61 million for the quarter ending June 2005. This represents an earnings per share increase, on a diluted basis, of $.13, or 21%, for the quarter.

For the six months ended June 30, 2005 net income increased to $12.0 million from $8.2 million for the same period a year ago. Over this same period, earnings per share on a diluted basis increased 37% from $1.00 to $1.37. Return on average equity for the six months ended June 30, 2005 was 14.61%, while return on average assets for the same period was 1.43%, compared to 12.05% and 1.20% respectively, for the six months ended June 30, 2004.

As a supplement to Generally Accepted Accounting Principles (“GAAP”), the Company also uses certain non-GAAP financial measures to review its operating performance. Earnings per share on a cash basis for the quarter ended June 30, 2005 was $.77 as compared to $.55 in the same period a year ago and $.64 for the first quarter of 2005. Cash basis return on equity for the quarter ended June 30, 2005 was 21.54% compared to 15.61% in the same period a year ago and 18.34% for the first quarter of 2005.

“It is a pleasure to report second quarter earnings results of $.75 per share which represent a 45% increase over the same quarter a year ago,” said G. William Beale, Union Bankshares President. ”The strength of our markets, the quality of our personnel and our strategic focus have been the primary drivers of this success.

Branch expansion, marketing initiatives, and cost containment are playing out this quarter with continued focus on our customers and shareholders. The sustained penetration into the Richmond market is evidenced by our new full service Sycamore Square branch, opened in June. In addition, our third branch in the Williamsburg market is enjoying its sixth month in operation. The promotion of these customer service locations, in their

respective markets, today will benefit our long-term vision. As always, we will continue to evaluate opportunities for expansion in underserved and growth markets, particularly those contiguous to our existing customer service network.

Our asset sensitive balance sheet position and rising short term interest rates combined to improve our net interest margin by 41 basis points over the last twelve months. Improvement in the net interest margin slowed during the second quarter, but we do expect margin improvement to continue, albeit at a slower pace.

Additionally, our efficiency ratio is down to levels not experienced since the second quarter of 2003 with marked improvements noted following the Guaranty acquisition. We are successfully leveraging the benefits of the holding company structure in providing accounting and finance services, data processing, credit administration and other back office support integral to the accomplishments and profitability of our affiliate banks and nonbank subsidiaries. We are very proud of our culture of ‘helping people find financial solutions.’

As anticipated, our mortgage sector benefited from increased seasonal activity during the second quarter. This, coupled with low mortgage rates helped fuel loan production which increased 50% from the prior quarter.”

Second quarter net income for the community banking segment was $6.2 million, an increase of $2.2 million or 55% from $4.0 million in the second quarter of 2004. Net income for the mortgage banking segment was $446 thousand, a decline of $91 thousand or 17% from $537 thousand in the same quarter of 2004. For the six months ended June 30, 2005, net income for the community bank segment increased to $11.5 million from $7.5 million at June 30, 2004, while the mortgage segment decreased to $555 thousand from $662 thousand for the same period of 2004.

The community banking segment net income, on a linked quarter basis, increased $822 thousand or 15.4% to $6.2 million. Margin expansion of $704 thousand, in addition to $198 thousand improvement in the provision for loan losses, drove the quarterly profit increase. Mortgage segment net income increased $337 thousand to $446 thousand from the prior quarter, primarily as a result of loan production increases and product mix in a low mortgage rate environment.

Net interest income on a fully tax equivalent (FTE) basis increased $3.8 million, or 27% to $17.5 million for the quarter as compared to the same quarter in 2004. Average earning assets increased $210.9 million, or $15.4%, funded by interest-bearing liabilities growth of $156.3 million, or 13.7%. Additionally, demand deposits contributed $54.4 million to fund loan demand and represent a 29% increase since the end of 2004. These factors coupled with increased yields on loans of 6.55%, from 6.00%, offset by an increased cost of funds of 2.43%, from 2.18%, moved the net interest margin 41 basis points to 4.44%. Of the $210.9 million in average earning assets growth (primarily in the commercial and construction portfolios), approximately 22% was funded by noninterest bearing deposits, positively contributing to the increased margin. Since June 2004 we have experienced an increase in the Federal funds target at each Federal Reserve Board Open Market Committee (“FOMC”) meeting, benefiting the Company due to its asset sensitivity. The Company continues to be asset sensitive and would benefit from continued increases in interest rates. Management will continue to monitor its interest rate risk, as the FOMC nears the anticipated end of the current tightening cycle, in an effort to protect its improved net interest margin.

On a linked quarter basis (FTE) net interest margin grew by $732 thousand, or 4.4% for the quarter ending June 30, 2005. This translates into a three basis point addition to net interest margin during the quarter, from 4.41% to 4.44%. Increases in demand deposits helped offset a higher cost of funds pace relative to earning asset increases. Loan yields increased by 17 basis points to 6.55% while cost of funds increased by 15 basis points to 2.43%. Large certificate of deposits (those greater than $100 thousand), on average, continued to experience growth of approximately 10%, same as prior quarter, and added to the interest bearing funding base of $1.3 billion.

The Company’s asset quality remains strong as reflected in the $173 thousand decrease in provision for loans losses from $308 for the quarter ended June 30, 2004 to $135 for the quarter ended June 30, 2005. Contributing to the overall decline in the provision for loan losses has been improved credit quality and the payout of low credit quality loans. At June 30, 2005, nonperforming assets totaled $11.3 million, which included a single credit relationship of $11.1 million. The loans in this relationship are secured by real estate, but based on the information currently available management has allocated $1.1 million in reserves. Since the end of the first quarter 2004, the Company has entered into a workout agreement with the borrower. Under the terms of the workout, the Company extended further credit of approximately $1.6 million secured by additional property with significant equity. During the second quarter of 2005, the Company extended additional credit of approximately $315 thousand in order to proceed with the workout agreement. The Company anticipates that this workout has and will continue to result in a reduction of overall exposure to the borrower.

Nonaccrual loans increased $378 thousand from $10.9 million as of March 31, 2005 to $11.3 million as of June 30, 2005. This increase was due primarily to the extension of the additional credit previously mentioned. Net charge-offs were $52 thousand for the quarter compared to $466 thousand in net recoveries the same quarter last year. Recoveries during the quarter were lower than the same quarter last year as the Company completed, in 2004, the recovery of principal on a large loan charged off in prior years. Approximately $196 thousand has been collected in foregone interest on a previously charged off credit and recorded in interest income.

Noninterest income during the second quarter of 2005 increased by $743 thousand to $7 million, or 11.8%, compared to the same quarter in 2004. This change includes an increase of $335 thousand, or 10%, in gains on sales of mortgage loans, $269 thousand in other service charges and $106 thousand in other operating income. Mortgage loan production for the second quarter of 2005 totaled $153.9 million as compared to $148.7 million in the second quarter of 2004. The increase in other service charges was driven primarily by a $125 thousand increase in income related to debit card and ATM transactions. Letter of credit and exchange fees contributed an additional $79 thousand. Other operating income increased primarily due to an increase in income from our investment in Bankers Insurance Group ($54 thousand), incentive rewards from our credit card processor ($38 thousand) and proceeds from the death benefit ($20 thousand) of a retired director related to a deferred compensation plan.

On a linked quarter basis, noninterest income increased $1.7 million or 31%. This change includes an increase of $1.1 million, or 42%, in gains on sales of mortgage loans, $304 thousand in service charges on deposit accounts and $151 thousand in other operating income. Mortgage loan production increased $38 million, or 33%, from the prior quarter representing most of the increase in the gain on sale of mortgages. A slight shift from brokered loans to correspondent

loans also contributed to this increase. The increase in service charges on deposit accounts was driven primarily by an increase in overdraft and return check charges. This improvement was primarily a result of the extension of the overdraft protection service to the Charlottesville market and additional marketing efforts to current customers. The increase in other operating income was due largely to an increase in income from our investment in JMC. Additional sources of increased income were incentive rewards from our credit card processor as well as our investment in Bankers Insurance Group.

Noninterest expense during the second quarter of 2005 increased $1.7 million from the same quarter in the prior year. This includes an increase of $1.1 million in salaries and benefits, $184 thousand increase in occupancy expense, $106 thousand increase in furniture and equipment expense and $392 thousand increase in other operating expenses. The increase in salary and benefits is due to the opening of additional branches, hiring additional support staff, increased commissions in the mortgage segment as loan production has increased and compensation adjustments. The increase in occupancy and furniture and equipment expense is also due primarily to new branch openings. Other operating expense results are related to an increase of $305 thousand in telephone and internet, courier and armored car, stationary and supplies. Other increases include marketing, franchise tax, training, directors’ fees, and ATM expenses. Lastly, the conversion of Guaranty’s data processing to the Company’s data processing platform represents an approximate cost savings of $174 thousand when compared to last year’s same quarter.

On a linked quarter basis noninterest expense increased $1 million or 7.6%. This change includes an increase of $523 thousand in salaries representing increased commissions paid as a result of increased mortgage loan production in the mortgage segment. Other operating expenses increased $437 thousand. Professional services increased $81 thousand largely as a result of additional Sarbanes Oxley audit and accounting fees. Marketing and advertising increased $69 thousand. The remaining increase included training, employee travel and meals, directors’ retreat, charged off overdrafts and other loan processing related expenses, software and courier expense.

Net loans were $1.3 billion and $1.2 billion for the second quarters ending 2005 and 2004, respectively. Quarter to quarter growth represents approximately $15.8 million or an increase of 1.23% predominately within the construction and equity line portfolios. The rising interest rate environment has improved the Company’s yield on earning assets. In particular, the 225 basis point increase in the Federal funds target rate since the FOMC began raising rates in June 2004, from 1%, has helped with improving yields (FTE) on loans, and for the quarter represents an increase from 6.38% to 6.55%. During that same period the Company’s cost of funds increased from 2.28% to 2.43%. Total deposits increased $38.9 million during the second quarter of 2005 to $1.4 billion. Growth of $20.3 million and $19.0 million was experienced in large certificates of deposits (those greater than $100 thousand) and demand deposits, respectively, offset by a decline in money market accounts of $8.2 million. Moreover, the rate and volume of deposit growth to loan growth for the quarter has allowed for less reliance on purchased funds as evidenced by the decline in short term borrowings from $14.1 million to $7.6 million.

At June 30, 2005 total assets were $1.74 billion, up 8%, or $132 million from $1.60 billion a year earlier. Securities decreased to $224.6 million compared to $244.9 million for the same period. Total assets have increased $41.0 million from $1.70 billion at March 2005 to $1.74 billion at June 2005. Securities increased $1.8 million from $222.8 million to $224.6 million. The Company’s capital position remains strong with an equity-to-assets ratio of 9.83 %.

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 (32 locations in the counties of Albemarle, Caroline, Chesterfield, Fluvanna, Hanover, Henrico, King George, King William, Nelson, Spotsylvania, Stafford, Westmoreland and the Cities of Charlottesville and 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 (3 locations in Williamsburg and Newport News). Union Bank & Trust also operates a loan production office in Manassas. 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 Bank of Williamsburg also owns a non-controlling interest in Johnson Mortgage Company, LLC. Additional information is available on our website at www.ubsh.com. The shares of Union Bankshares Corporation are traded on the NASDAQ National Market under the symbol “UBSH”.

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.

Key Financial Data

In management’s opinion, cash basis earnings are useful to investors because by excluding non-operating adjustments stemming from the consolidation of our organization, they allow investors to see clearly the combined economic results of our multi-bank company. These non-GAAP disclosures should not, however, be viewed in direct comparison with non-GAAP measures of other companies.

UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except share information)

See accompanying notes to condensed consolidated financial statements.

UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(dollars in thousands, except per share amounts)