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Announces First Quarter 2024 Results By: Nicolet Bankshares, Inc. via Business Wire April 16, 2024 at 16:05 PM EDT Well positioned to be opportunistic Net income of $28 million or adjusted net income (non-GAAP) of $26 million for first quarter 2024, compared to net income of $31 million or adjusted net income (non-GAAP) of $28 million in prior quarter, and net loss of $9 million or adjusted net income (non-GAAP) of $22 million for first quarter 2023 Tangible common equity ratio increased to 8.33% for first quarter 2024 Credit quality remains strong with nonperforming assets stable at 0.33% of total assets and negligible net charge-offs Continued strong financial performance metrics for first quarter 2024 17.07% Return on average tangible common equity 1.33% Return on average assets Tangible book value per share increased to $44.91 for first quarter 2024 Nicolet Bankshares, Inc. (NYSE: NIC) (“Nicolet”) announced first quarter 2024 net income of $28 million and earnings per diluted common share of $1.82, compared to net income of $31 million and earnings per diluted common share of $2.02 for fourth quarter 2024, and net loss of $9 million and loss per diluted common share of $0.61 for first quarter 2023. Net income reflected certain non-core items and the related tax effect of each, including the first quarter 2023 balance sheet repositioning and third quarter 2023 change in Wisconsin state tax law, as well as gains / (losses) on other assets and investments in all periods. These non-core items positively impacted earnings per diluted common share $0.10 and $0.17 for first quarter 2024 and fourth quarter 2023, respectively, and negatively impacted earnings per diluted common share $2.06 for first quarter 2023. “Our first quarter results show our focus on execution as we move throughout the year,” said Mike Daniels, Chairman, President, and CEO of Nicolet. “We continue to maintain our relationship-based pricing discipline paired with our credit culture as our team consistently shows the value that we bring. We are encouraged by the results, and we will continue to challenge ourselves to manage both growth and efficiency.” Daniels continued, “Our strong core profitability has allowed us to build capital, which puts us in an enviable position of having significant options going forward. These options include organic growth, M&A, capital return to shareholders through share buybacks and dividends. While the M&A market remains slow, we are reviewing opportunities and participating in high-level discussions with potential partners, as we maintain our high degree of discipline with our M&A strategy. Our goal is always to partner with a franchise that makes Nicolet and the communities we serve better.” Nicolet’s 2023 results were significantly impacted by the first quarter 2023 balance sheet repositioning, which included the sale of $500 million (par value) U.S. Treasury held to maturity securities for a pre-tax loss of $38 million or an after-tax loss of $28 million, with the net proceeds used to reduce FHLB borrowings and the remainder held in investable cash. In addition, in July 2023 a new Wisconsin tax law was signed which provided financial institutions with an exemption from state taxable income for interest, fees, and penalties earned on specific loans to existing Wisconsin-based business or agriculture purpose loans. This tax law change to Nicolet moving forward will be a reduction / elimination of State income taxes being expensed; however, it also required a $9.1 million valuation allowance to be established for the State-related deferred tax asset as of the effective date of the legislation. While both provided a drag to 2023 earnings, each also serve as a tailwind for first quarter 2024 and beyond. Balance Sheet Review At March 31, 2024, period end assets were $8.4 billion, down slightly ($22 million) from December 31, 2023, mostly lower cash balances, partly offset by growth in loans. Total loans increased $44 million (1%) from December 31, 2023, with growth in agricultural, commercial and industrial, and residential real estate loans. Total deposits of $7.2 billion at March 31, 2024, decreased $32 million from December 31, 2023, mostly noninterest-bearing demand deposits. Total capital was $1.1 billion at March 31, 2024, an increase of $25 million over December 31, 2023, with earnings partly offset by the quarterly common stock dividend. Asset Quality Nonperforming assets were $28 million and represented 0.33% of total assets at March 31, 2024, unchanged from December 31, 2023, and down from $41 million or 0.50% at March 31, 2023. The allowance for credit losses-loans was $64 million and represented 1.01% of total loans at March 31, 2024, compared to $64 million (or 1.00% of total loans) at December 31, 2023, and $62 million (or 1.00% of total loans) at March 31, 2023. Asset quality trends remain solid and loan net charge-offs were negligible. Income Statement Review - Quarter Net income was $28 million and adjusted net income (non-GAAP) was $26 million for first quarter 2024, compared to net income of $31 million and adjusted net income (non-GAAP) of $28 million for fourth quarter 2023. Net interest income was $63 million for first quarter 2024, down $1 million from fourth quarter 2023. Interest income increased $1 million mostly due to the repricing of new and renewed loans in a rising interest rate environment, partly offset by lower investable cash balances, while interest expense increased $2 million due to higher average rates on seasonal deposits. The net interest margin for first quarter 2024 was 3.26%, down 4 bps from 3.30% for fourth quarter 2023. The yield on interest-earning assets increased 12 bps (to 5.44%) mostly due to higher average rates from the repricing of the loan portfolio, while the cost of funds increased 11 bps (to 3.01%) for first quarter 2024, attributable mainly to higher cost seasonal deposits. Noninterest income of $19 million for first quarter 2024 decreased $5 million from fourth quarter 2023, mostly due to the change in net asset gains. First quarter 2024 included net gains of $2 million due to a $1 million gain on sale of an investment security and a $1 million gain on the early extinguishment of subordinated debt, while fourth quarter 2023 included net gains of $6 million from the $9 million pre-tax gain on the sale of Nicolet’s member interest in UFS, LLC, partly offset by a $3 million loss on the sale of certain securities. Excluding the net asset gains (losses), noninterest income for first quarter 2024 was $18 million, a $1 million decrease from fourth quarter 2023, mostly due to changes in the fair value of nonqualified deferred compensation plan assets. Noninterest expense of $47 million for first quarter 2024 decreased $3 million from fourth quarter 2023. Personnel expense was minimally changed with higher salaries and incentives substantially offset by lower health insurance and a decrease in the fair value of nonqualified deferred compensation plan liabilities. Non-personnel expenses decreased $3 million (12%) between the sequential quarters, mostly lower data processing from an early contract termination charge in fourth quarter 2023. About Nicolet Bankshares, Inc. Nicolet Bankshares, Inc. is the bank holding company of Nicolet National Bank, a growing, full-service, community bank providing services ranging from commercial, agricultural and consumer banking to wealth management and retirement plan services. Founded in Green Bay in 2000, Nicolet National Bank operates branches primarily in Wisconsin, Michigan, and Minnesota. More information can be found at www.nicoletbank.com. Use of Non-GAAP Financial Measures This communication contains non-GAAP financial measures, such as non-GAAP adjusted net income, non-GAAP adjusted earnings per diluted common share, tangible book value per common share, return on average tangible common equity, and tangible common equity to tangible assets. Management believes such measures to be helpful to management, investors and others in understanding Nicolet’s results of operations or financial position. When non-GAAP financial measures are used, the comparable GAAP financial measures, as well as the reconciliation of the non-GAAP measures to the GAAP financial measures, are provided. See “Reconciliation of Non-GAAP Financial Measures (Unaudited)” below. The non-GAAP net income measure and related reconciliation provide information useful to investors in understanding the operating performance and trends of Nicolet and also aid investors in comparing Nicolet’s financial performance to the financial performance of peer banks. Management considers non-GAAP financial ratios to be critical metrics with which to analyze and evaluate financial condition and capital strengths. While non-GAAP financial measures are frequently used by stakeholders in the evaluation of a corporation, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP. Forward Looking Statements “Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995 Certain statements contained in this communication, which are not statements of historical fact, constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements generally can be identified by words or phrases such as, without limitation, “anticipate,” “believe,” “aim,” “can,” “conclude,” “continue,” “could,” “estimate,” “expect,” “foresee,” “goal,” “intend,” “may,” “might,” “outlook,” “possible,” “plan,” “predict,” “project,” “potential,” “seek,” “should,” “target,” “will,” “will likely,” “would,” or the negative of these terms or other comparable terminology, as well as similar expressions, and in this press release include our statements about potential M&A, share buyback, and dividend activity. Forward-looking statements are not historical facts but instead express only management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management’s control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements. Risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, include, but are not limited to future legislative changes to the taxes imposed upon Nicolet, potential expansion into other jurisdictions that impose different or higher taxes and our ability to generate loans that qualify for the Wisconsin tax reduction / elimination. Additional factors which could affect the forward looking statements can be found in Nicolet’s 2023 Annual Report on Form 10-K, as well subsequent filings with the SEC and are available on the SEC’s website at www.sec.gov. Any forward-looking statements included in this press release are made as of the date hereof and are based on information available to management at that time. Except as required by law, Nicolet disclaims any obligation to update or revise any forward-looking statement contained in this press release to reflect new information or events or circumstances that occur after the date the forward-looking statements were made. Nicolet Bankshares, Inc. Consolidated Balance Sheets (Unaudited) (In thousands, except share data) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Assets Cash and due from banks $ 81,677 $ 129,898 $ 109,414 $ 122,021 $ 93,462 Interest-earning deposits 345,747 361,533 436,466 383,185 20,718 Cash and cash equivalents 427,424 491,431 545,880 505,206 114,180 Certificates of deposit in other banks 5,639 6,374 7,598 9,808 11,293 Securities available for sale, at fair value 803,963 802,573 793,826 921,108 1,023,176 Other investments 60,464 57,560 58,367 57,578 57,482 Loans held for sale 5,022 4,160 6,500 3,849 4,962 Loans 6,397,617 6,353,942 6,239,257 6,222,776 6,223,732 Allowance for credit losses - loans (64,347 ) (63,610 ) (63,160 ) (62,811 ) (62,412 ) Loans, net 6,333,270 6,290,332 6,176,097 6,159,965 6,161,320 Premises and equipment, net 119,962 118,756 117,744 117,278 112,569 Bank owned life insurance (“BOLI”) 170,746 169,392 168,223 167,192 166,107 Goodwill and other intangibles, net 393,183 394,366 396,208 398,194 400,277 Accrued interest receivable and other assets 126,989 133,734 145,719 142,450 140,988 Total assets $ 8,446,662 $ 8,468,678 $ 8,416,162 $ 8,482,628 $ 8,192,354 Liabilities and Stockholders' Equity Liabilities: Noninterest-bearing demand deposits $ 1,665,229 $ 1,958,709 $ 2,020,074 $ 2,059,939 $ 2,094,623 Interest-bearing deposits 5,500,503 5,239,091 5,162,314 5,138,665 4,833,956 Total deposits 7,165,732 7,197,800 7,182,388 7,198,604 6,928,579 Short-term borrowings — — — 50,000 50,000 Long-term borrowings 162,257 166,930 197,754 197,577 197,448 Accrued interest payable and other liabilities 55,018 64,941 61,559 58,809 54,535 Total liabilities 7,383,007 7,429,671 7,441,701 7,504,990 7,230,562 Stockholders' Equity: Common stock 149 149 147 147 147 Additional paid-in capital 636,621 633,770 626,348 624,897 623,746 Retained earnings 482,295 458,261 431,317 417,863 398,966 Accumulated other comprehensive income (loss) (55,410 ) (53,173 ) (83,351 ) (65,269 ) (61,067 ) Total stockholders' equity 1,063,655 1,039,007 974,461 977,638 961,792 Total liabilities and stockholders' equity $ 8,446,662 $ 8,468,678 $ 8,416,162 $ 8,482,628 $ 8,192,354 Common shares outstanding 14,930,549 14,894,209 14,757,565 14,717,938 14,698,265 Nicolet Bankshares, Inc. Consolidated Statements of Income (Loss) (Unaudited) For the Three Months Ended (In thousands, except per share data) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Interest income: Loans, including loan fees $ 93,648 $ 90,265 $ 87,657 $ 84,091 $ 79,142 Taxable investment securities 4,557 4,737 4,351 4,133 4,961 Tax-exempt investment securities 1,238 1,394 1,424 1,476 1,737 Other interest income 4,588 7,149 6,452 2,357 1,536 Total interest income 104,031 103,545 99,884 92,057 87,376 Interest expense: Deposits 38,990 36,583 34,964 29,340 24,937 Short-term borrowings — — 474 1,108 3,212 Long-term borrowings 2,234 2,680 2,972 2,570 2,506 Total interest expense 41,224 39,263 38,410 33,018 30,655 Net interest income 62,807 64,282 61,474 59,039 56,721 Provision for credit losses 750 1,000 450 450 3,090 Net interest income after provision for credit losses 62,057 63,282 61,024 58,589 53,631 Noninterest income: Wealth management fee income 6,485 6,308 6,057 5,870 5,512 Mortgage income, net 1,364 1,856 2,020 1,822 1,466 Service charges on deposit accounts 1,581 1,475 1,492 1,529 1,480 Card interchange income 3,098 3,306 3,321 3,331 3,033 BOLI income 1,347 1,161 1,090 1,073 1,200 Asset gains (losses), net 1,909 5,947 31 (318 ) (38,468 ) Deferred compensation plan asset market valuations 59 949 (457 ) 499 946 LSR income, net 1,134 1,027 1,108 1,135 1,155 Other noninterest income 2,445 2,405 1,879 1,900 1,832 Total noninterest income 19,422 24,434 16,541 16,841 (21,844 ) Noninterest expense: Personnel expense 26,510 26,937 23,944 23,900 24,328 Occupancy, equipment and office 8,944 9,567 9,027 8,845 8,783 Business development and marketing 2,142 1,854 1,869 1,946 2,121 Data processing 4,270 7,043 4,643 4,218 3,988 Intangibles amortization 1,833 1,842 1,986 2,083 2,161 FDIC assessments 1,033 950 1,500 1,009 540 Merger-related expense — — — 26 163 Other noninterest expense 2,415 2,103 2,769 2,930 2,791 Total noninterest expense 47,147 50,296 45,738 44,957 44,875 Income (loss) before income tax expense 34,332 37,420 31,827 30,473 (13,088 ) Income tax expense (benefit) 6,542 6,759 14,669 7,878 (4,190 ) Net income (loss) $ 27,790 $ 30,661 $ 17,158 $ 22,595 $ (8,898 ) Earnings (loss) per common share: Basic $ 1.86 $ 2.07 $ 1.16 $ 1.54 $ (0.61 ) Diluted $ 1.82 $ 2.02 $ 1.14 $ 1.51 $ (0.61 ) Common shares outstanding: Basic weighted average 14,907 14,823 14,740 14,711 14,694 Diluted weighted average 15,249 15,142 15,100 14,960 14,694 Nicolet Bankshares, Inc. Consolidated Financial Summary (Unaudited) For the Three Months Ended (In thousands, except share & per share data) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Selected Average Balances: Loans $ 6,398,838 $ 6,263,971 $ 6,230,336 $ 6,237,757 $ 6,201,780 Investment securities 884,775 897,437 962,607 1,068,144 1,508,535 Interest-earning assets 7,629,120 7,683,495 7,676,895 7,497,935 7,830,590 Cash and cash equivalents 364,375 558,473 513,250 203,883 127,726 Goodwill and other intangibles, net 393,961 395,158 397,052 399,080 401,212 Total assets 8,380,595 8,415,169 8,417,456 8,228,600 8,570,623 Deposits 7,112,971 7,189,650 7,156,577 6,941,037 7,060,262 Interest-bearing liabilities 5,509,882 5,358,445 5,385,292 5,212,285 5,391,107 Stockholders’ equity (common) 1,048,596 996,745 983,133 967,142 970,108 Selected Ratios: (1) Book value per common share $ 71.24 $ 69.76 $ 66.03 $ 66.42 $ 65.44 Tangible book value per common share (2) $ 44.91 $ 43.28 $ 39.18 $ 39.37 $ 38.20 Return on average assets 1.33 % 1.45 % 0.81 % 1.10 % (0.42 )% Return on average common equity 10.66 12.20 6.92 9.37 (3.72 ) Return on average tangible common equity (2) 17.07 20.22 11.62 15.95 (6.34 ) Average equity to average assets 12.51 11.84 11.68 11.75 11.32 Stockholders’ equity to assets 12.59 12.27 11.58 11.53 11.74 Tangible common equity to tangible assets (2) 8.33 7.98 7.21 7.17 7.21 Net interest margin 3.26 3.30 3.16 3.14 2.91 Efficiency ratio 58.34 60.41 58.27 58.60 60.69 Effective tax rate 19.06 18.06 46.09 25.85 32.01 Selected Asset Quality Information: Nonaccrual loans $ 26,677 $ 26,625 $ 29,507 $ 25,278 $ 38,895 Other real estate owned - closed branches 808 808 884 958 1,347 Other real estate owned 437 459 1,147 520 628 Nonperforming assets $ 27,922 $ 27,892 $ 31,538 $ 26,756 $ 40,870 Net loan charge-offs (recoveries) $ 13 $ 550 $ 101 $ 51 $ 167 Allowance for credit losses-loans to loans 1.01 % 1.00 % 1.01 % 1.01 % 1.00 % Net loan charge-offs to average loans (1) 0.00 0.03 0.01 0.01 0.01 Nonperforming loans to total loans 0.42 0.42 0.47 0.41 0.62 Nonperforming assets to total assets 0.33 0.33 0.37 0.32 0.50 Stock Repurchase Information: Common stock repurchased (dollars) (3) $ — $ — $ — $ 1,519 $ — Common stock repurchased (full shares) (3) — — — 26,853 — (1) Income statement-related ratios for partial-year periods are annualized. (2) See Reconciliation of Non-GAAP Financial Measures below for a reconciliation of these financial measures. (3) Reflects common stock repurchased under board of director authorizations for the common stock repurchase program. Nicolet Bankshares, Inc. Consolidated Loan & Deposit Metrics (Unaudited) (In thousands) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Period End Loan Composition Commercial & industrial $ 1,307,490 $ 1,284,009 $ 1,237,789 $ 1,318,567 $ 1,330,052 Owner-occupied commercial real estate (“CRE”) 955,786 956,594 971,397 969,202 969,064 Agricultural 1,190,371 1,161,531 1,108,261 1,068,999 1,065,909 Commercial 3,453,647 3,402,134 3,317,447 3,356,768 3,365,025 CRE investment 1,188,722 1,142,251 1,130,938 1,108,692 1,146,388 Construction & land development 241,730 310,110 326,747 337,389 333,370 Commercial real estate 1,430,452 1,452,361 1,457,685 1,446,081 1,479,758 Commercial-based loans 4,884,099 4,854,495 4,775,132 4,802,849 4,844,783 Residential construction 84,370 75,726 76,289 108,095 134,782 Residential first mortgage 1,167,069 1,167,109 1,136,748 1,072,609 1,014,166 Residential junior mortgage 206,434 200,884 195,432 184,873 177,026 Residential real estate 1,457,873 1,443,719 1,408,469 1,365,577 1,325,974 Retail & other 55,645 55,728 55,656 54,350 52,975 Retail-based loans 1,513,518 1,499,447 1,464,125 1,419,927 1,378,949 Total loans $ 6,397,617 $ 6,353,942 $ 6,239,257 $ 6,222,776 $ 6,223,732 Period End Deposit Composition Noninterest-bearing demand $ 1,665,229 $ 1,958,709 $ 2,020,074 $ 2,059,939 $ 2,094,623 Interest-bearing demand 1,121,030 1,055,520 955,746 1,030,919 1,138,415 Money market 2,027,559 1,891,287 1,933,227 1,835,523 1,886,879 Savings 765,084 768,401 789,045 821,803 865,824 Time 1,586,830 1,523,883 1,484,296 1,450,420 942,838 Total deposits $ 7,165,732 $ 7,197,800 $ 7,182,388 $ 7,198,604 $ 6,928,579 Brokered transaction accounts $ 265,818 $ 166,861 $ 146,517 $ 173,107 $ 233,393 Brokered time deposits 517,190 448,582 457,433 566,405 289,181 Total brokered deposits $ 783,008 $ 615,443 $ 603,950 $ 739,512 $ 522,574 Customer transaction accounts $ 5,313,085 $ 5,507,056 $ 5,551,575 $ 5,575,077 $ 5,752,348 Customer time deposits 1,069,639 1,075,301 1,026,863 884,015 653,657 Total customer deposits (core) $ 6,382,724 $ 6,582,357 $ 6,578,438 $ 6,459,092 $ 6,406,005 Nicolet Bankshares, Inc. Net Interest Income and Net Interest Margin Analysis (Unaudited) For the Three Months Ended March 31, 2024 December 31, 2023 March 31, 2023 Average Average Average Average Average Average (In thousands) Balance Interest Rate Balance Interest Rate Balance Interest Rate ASSETS Total loans (1) (2) $ 6,398,838 $ 93,744 5.81 % $ 6,263,971 $ 90,313 5.66 % $ 6,201,780 $ 79,186 5.11 % Investment securities (2) 884,775 6,197 2.80 % 897,437 6,567 2.93 % 1,508,535 7,246 1.93 % Other interest-earning assets 345,507 4,588 5.26 % 522,087 7,149 5.37 % 120,275 1,536 5.11 % Total interest-earning assets 7,629,120 $ 104,529 5.44 % 7,683,495 $ 104,029 5.32 % 7,830,590 $ 87,968 4.49 % Other assets, net 751,475 731,674 740,033 Total assets $ 8,380,595 $ 8,415,169 $ 8,570,623 LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing core deposits $ 4,664,670 $ 31,256 2.69 % $ 4,570,493 $ 29,730 2.58 % $ 4,325,340 $ 19,587 1.84 % Brokered deposits 680,124 7,734 4.57 % 601,379 6,853 4.52 % 566,282 5,350 3.83 % Total interest-bearing deposits 5,344,794 38,990 2.93 % 5,171,872 36,583 2.81 % 4,891,622 24,937 2.07 % Wholesale funding 165,088 2,234 5.35 % 186,573 2,680 5.62 % 499,485 5,718 4.58 % Total interest-bearing liabilities 5,509,882 $ 41,224 3.01 % 5,358,445 $ 39,263 2.90 % 5,391,107 $ 30,655 2.30 % Noninterest-bearing demand deposits 1,768,177 2,017,778 2,168,640 Other liabilities 53,940 42,201 40,768 Stockholders' equity 1,048,596 996,745 970,108 Total liabilities and stockholders' equity $ 8,380,595 $ 8,415,169 $ 8,570,623 Net interest income and rate spread $ 63,305 2.43 % $ 64,766 2.42 % $ 57,313 2.19 % Net interest margin 3.26 % 3.30 % 2.91 % Loan purchase accounting accretion (3) $ 1,527 0.09 % $ 1,587 0.10 % $ 1,636 0.11 % (1) Nonaccrual loans and loans held for sale are included in the daily average loan balances outstanding. (2) The yield on tax-exempt loans and tax-exempt investment securities is computed on a tax-equivalent basis using a federal tax rate of 21%, and adjusted for the disallowance of interest expense. (3) Loan purchase accounting accretion included in Total loans above, and the related impact to net interest margin. Nicolet Bankshares, Inc. Reconciliation of Non-GAAP Financial Measures (Unaudited) For the Three Months Ended (In thousands, except per share data) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Adjusted net income (loss) reconciliation: (1) Net income (loss) (GAAP) $ 27,790 $ 30,661 $ 17,158 $ 22,595 $ (8,898 ) Adjustments: Provision expense (2) — — — — 2,340 Assets (gains) losses, net (1,909 ) (5,947 ) (31 ) 318 38,468 Merger-related expense — — — 26 163 Contract termination charge — 2,689 — — — Adjustments subtotal (1,909 ) (3,258 ) (31 ) 344 40,971 Tax on Adjustments (3) (372 ) (635 ) (6 ) 86 10,243 Tax - Wisconsin Tax Law Change (4) — — 6,151 — — Adjusted net income (Non-GAAP) $ 26,253 $ 28,038 $ 23,284 $ 22,853 $ 21,830 Diluted earnings (loss) per common share: Diluted earnings (loss) per common share (GAAP) $ 1.82 $ 2.02 $ 1.14 $ 1.51 $ (0.61 ) Adjusted Diluted earnings per common share (Non-GAAP) $ 1.72 $ 1.85 $ 1.54 $ 1.53 $ 1.45 Tangible assets: (5) Total assets $ 8,446,662 $ 8,468,678 $ 8,416,162 $ 8,482,628 $ 8,192,354 Goodwill and other intangibles, net 393,183 394,366 396,208 398,194 400,277 Tangible assets $ 8,053,479 $ 8,074,312 $ 8,019,954 $ 8,084,434 $ 7,792,077 Tangible common equity: (5) Stockholders’ equity (common) $ 1,063,655 $ 1,039,007 $ 974,461 $ 977,638 $ 961,792 Goodwill and other intangibles, net 393,183 394,366 396,208 398,194 400,277 Tangible common equity $ 670,472 $ 644,641 $ 578,253 $ 579,444 $ 561,515 Tangible average common equity: (5) Average stockholders’ equity (common) $ 1,048,596 $ 996,745 $ 983,133 $ 967,142 $ 970,108 Average goodwill and other intangibles, net 393,961 395,158 397,052 399,080 401,212 Average tangible common equity $ 654,635 $ 601,587 $ 586,081 $ 568,062 $ 568,896 Note: Numbers may not sum due to rounding. (1) The adjusted net income measure and related reconciliation provide information useful to investors in understanding the operating performance and trends of Nicolet and also to aid investors in the comparison of Nicolet’s financial performance to the financial performance of peer banks. (2) Provision expense for 2023 is attributable to the expected loss on a bank subordinated debt investment. (3) The effective tax rate for periods prior to the July 1, 2023, effective date of the Wisconsin tax law change assumed an effective tax rate of 25%, and periods subsequent to the effective date assumed an effective tax rate of 19.5%. (4) The adjusted net income reconciliation for first and second quarter 2023 is as originally reported, and has not been restated to reflect the $3 million excess tax expense of those quarters that was subsequently reversed in third quarter 2023 due to the Wisconsin tax law change. Thus, the adjusted net income reconciliation for the quarters of 2023 will not sum to the full year impact. (5) The ratios of tangible book value per common share, return on average tangible common equity, and tangible common equity to tangible assets exclude goodwill and other intangibles, net. These financial ratios have been included as they are considered to be critical metrics with which to analyze and evaluate financial condition and capital strength. View source version on businesswire.com: https://www.businesswire.com/news/home/20240416543876/en/Contacts ir@nicoletbank.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Nicolet Bankshares, Inc. Announces First Quarter 2024 Results By: Nicolet Bankshares, Inc. via Business Wire April 16, 2024 at 16:05 PM EDT Well positioned to be opportunistic Net income of $28 million or adjusted net income (non-GAAP) of $26 million for first quarter 2024, compared to net income of $31 million or adjusted net income (non-GAAP) of $28 million in prior quarter, and net loss of $9 million or adjusted net income (non-GAAP) of $22 million for first quarter 2023 Tangible common equity ratio increased to 8.33% for first quarter 2024 Credit quality remains strong with nonperforming assets stable at 0.33% of total assets and negligible net charge-offs Continued strong financial performance metrics for first quarter 2024 17.07% Return on average tangible common equity 1.33% Return on average assets Tangible book value per share increased to $44.91 for first quarter 2024 Nicolet Bankshares, Inc. (NYSE: NIC) (“Nicolet”) announced first quarter 2024 net income of $28 million and earnings per diluted common share of $1.82, compared to net income of $31 million and earnings per diluted common share of $2.02 for fourth quarter 2024, and net loss of $9 million and loss per diluted common share of $0.61 for first quarter 2023. Net income reflected certain non-core items and the related tax effect of each, including the first quarter 2023 balance sheet repositioning and third quarter 2023 change in Wisconsin state tax law, as well as gains / (losses) on other assets and investments in all periods. These non-core items positively impacted earnings per diluted common share $0.10 and $0.17 for first quarter 2024 and fourth quarter 2023, respectively, and negatively impacted earnings per diluted common share $2.06 for first quarter 2023. “Our first quarter results show our focus on execution as we move throughout the year,” said Mike Daniels, Chairman, President, and CEO of Nicolet. “We continue to maintain our relationship-based pricing discipline paired with our credit culture as our team consistently shows the value that we bring. We are encouraged by the results, and we will continue to challenge ourselves to manage both growth and efficiency.” Daniels continued, “Our strong core profitability has allowed us to build capital, which puts us in an enviable position of having significant options going forward. These options include organic growth, M&A, capital return to shareholders through share buybacks and dividends. While the M&A market remains slow, we are reviewing opportunities and participating in high-level discussions with potential partners, as we maintain our high degree of discipline with our M&A strategy. Our goal is always to partner with a franchise that makes Nicolet and the communities we serve better.” Nicolet’s 2023 results were significantly impacted by the first quarter 2023 balance sheet repositioning, which included the sale of $500 million (par value) U.S. Treasury held to maturity securities for a pre-tax loss of $38 million or an after-tax loss of $28 million, with the net proceeds used to reduce FHLB borrowings and the remainder held in investable cash. In addition, in July 2023 a new Wisconsin tax law was signed which provided financial institutions with an exemption from state taxable income for interest, fees, and penalties earned on specific loans to existing Wisconsin-based business or agriculture purpose loans. This tax law change to Nicolet moving forward will be a reduction / elimination of State income taxes being expensed; however, it also required a $9.1 million valuation allowance to be established for the State-related deferred tax asset as of the effective date of the legislation. While both provided a drag to 2023 earnings, each also serve as a tailwind for first quarter 2024 and beyond. Balance Sheet Review At March 31, 2024, period end assets were $8.4 billion, down slightly ($22 million) from December 31, 2023, mostly lower cash balances, partly offset by growth in loans. Total loans increased $44 million (1%) from December 31, 2023, with growth in agricultural, commercial and industrial, and residential real estate loans. Total deposits of $7.2 billion at March 31, 2024, decreased $32 million from December 31, 2023, mostly noninterest-bearing demand deposits. Total capital was $1.1 billion at March 31, 2024, an increase of $25 million over December 31, 2023, with earnings partly offset by the quarterly common stock dividend. Asset Quality Nonperforming assets were $28 million and represented 0.33% of total assets at March 31, 2024, unchanged from December 31, 2023, and down from $41 million or 0.50% at March 31, 2023. The allowance for credit losses-loans was $64 million and represented 1.01% of total loans at March 31, 2024, compared to $64 million (or 1.00% of total loans) at December 31, 2023, and $62 million (or 1.00% of total loans) at March 31, 2023. Asset quality trends remain solid and loan net charge-offs were negligible. Income Statement Review - Quarter Net income was $28 million and adjusted net income (non-GAAP) was $26 million for first quarter 2024, compared to net income of $31 million and adjusted net income (non-GAAP) of $28 million for fourth quarter 2023. Net interest income was $63 million for first quarter 2024, down $1 million from fourth quarter 2023. Interest income increased $1 million mostly due to the repricing of new and renewed loans in a rising interest rate environment, partly offset by lower investable cash balances, while interest expense increased $2 million due to higher average rates on seasonal deposits. The net interest margin for first quarter 2024 was 3.26%, down 4 bps from 3.30% for fourth quarter 2023. The yield on interest-earning assets increased 12 bps (to 5.44%) mostly due to higher average rates from the repricing of the loan portfolio, while the cost of funds increased 11 bps (to 3.01%) for first quarter 2024, attributable mainly to higher cost seasonal deposits. Noninterest income of $19 million for first quarter 2024 decreased $5 million from fourth quarter 2023, mostly due to the change in net asset gains. First quarter 2024 included net gains of $2 million due to a $1 million gain on sale of an investment security and a $1 million gain on the early extinguishment of subordinated debt, while fourth quarter 2023 included net gains of $6 million from the $9 million pre-tax gain on the sale of Nicolet’s member interest in UFS, LLC, partly offset by a $3 million loss on the sale of certain securities. Excluding the net asset gains (losses), noninterest income for first quarter 2024 was $18 million, a $1 million decrease from fourth quarter 2023, mostly due to changes in the fair value of nonqualified deferred compensation plan assets. Noninterest expense of $47 million for first quarter 2024 decreased $3 million from fourth quarter 2023. Personnel expense was minimally changed with higher salaries and incentives substantially offset by lower health insurance and a decrease in the fair value of nonqualified deferred compensation plan liabilities. Non-personnel expenses decreased $3 million (12%) between the sequential quarters, mostly lower data processing from an early contract termination charge in fourth quarter 2023. About Nicolet Bankshares, Inc. Nicolet Bankshares, Inc. is the bank holding company of Nicolet National Bank, a growing, full-service, community bank providing services ranging from commercial, agricultural and consumer banking to wealth management and retirement plan services. Founded in Green Bay in 2000, Nicolet National Bank operates branches primarily in Wisconsin, Michigan, and Minnesota. More information can be found at www.nicoletbank.com. Use of Non-GAAP Financial Measures This communication contains non-GAAP financial measures, such as non-GAAP adjusted net income, non-GAAP adjusted earnings per diluted common share, tangible book value per common share, return on average tangible common equity, and tangible common equity to tangible assets. Management believes such measures to be helpful to management, investors and others in understanding Nicolet’s results of operations or financial position. When non-GAAP financial measures are used, the comparable GAAP financial measures, as well as the reconciliation of the non-GAAP measures to the GAAP financial measures, are provided. See “Reconciliation of Non-GAAP Financial Measures (Unaudited)” below. The non-GAAP net income measure and related reconciliation provide information useful to investors in understanding the operating performance and trends of Nicolet and also aid investors in comparing Nicolet’s financial performance to the financial performance of peer banks. Management considers non-GAAP financial ratios to be critical metrics with which to analyze and evaluate financial condition and capital strengths. While non-GAAP financial measures are frequently used by stakeholders in the evaluation of a corporation, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP. Forward Looking Statements “Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995 Certain statements contained in this communication, which are not statements of historical fact, constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements generally can be identified by words or phrases such as, without limitation, “anticipate,” “believe,” “aim,” “can,” “conclude,” “continue,” “could,” “estimate,” “expect,” “foresee,” “goal,” “intend,” “may,” “might,” “outlook,” “possible,” “plan,” “predict,” “project,” “potential,” “seek,” “should,” “target,” “will,” “will likely,” “would,” or the negative of these terms or other comparable terminology, as well as similar expressions, and in this press release include our statements about potential M&A, share buyback, and dividend activity. Forward-looking statements are not historical facts but instead express only management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management’s control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements. Risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, include, but are not limited to future legislative changes to the taxes imposed upon Nicolet, potential expansion into other jurisdictions that impose different or higher taxes and our ability to generate loans that qualify for the Wisconsin tax reduction / elimination. Additional factors which could affect the forward looking statements can be found in Nicolet’s 2023 Annual Report on Form 10-K, as well subsequent filings with the SEC and are available on the SEC’s website at www.sec.gov. Any forward-looking statements included in this press release are made as of the date hereof and are based on information available to management at that time. Except as required by law, Nicolet disclaims any obligation to update or revise any forward-looking statement contained in this press release to reflect new information or events or circumstances that occur after the date the forward-looking statements were made. Nicolet Bankshares, Inc. Consolidated Balance Sheets (Unaudited) (In thousands, except share data) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Assets Cash and due from banks $ 81,677 $ 129,898 $ 109,414 $ 122,021 $ 93,462 Interest-earning deposits 345,747 361,533 436,466 383,185 20,718 Cash and cash equivalents 427,424 491,431 545,880 505,206 114,180 Certificates of deposit in other banks 5,639 6,374 7,598 9,808 11,293 Securities available for sale, at fair value 803,963 802,573 793,826 921,108 1,023,176 Other investments 60,464 57,560 58,367 57,578 57,482 Loans held for sale 5,022 4,160 6,500 3,849 4,962 Loans 6,397,617 6,353,942 6,239,257 6,222,776 6,223,732 Allowance for credit losses - loans (64,347 ) (63,610 ) (63,160 ) (62,811 ) (62,412 ) Loans, net 6,333,270 6,290,332 6,176,097 6,159,965 6,161,320 Premises and equipment, net 119,962 118,756 117,744 117,278 112,569 Bank owned life insurance (“BOLI”) 170,746 169,392 168,223 167,192 166,107 Goodwill and other intangibles, net 393,183 394,366 396,208 398,194 400,277 Accrued interest receivable and other assets 126,989 133,734 145,719 142,450 140,988 Total assets $ 8,446,662 $ 8,468,678 $ 8,416,162 $ 8,482,628 $ 8,192,354 Liabilities and Stockholders' Equity Liabilities: Noninterest-bearing demand deposits $ 1,665,229 $ 1,958,709 $ 2,020,074 $ 2,059,939 $ 2,094,623 Interest-bearing deposits 5,500,503 5,239,091 5,162,314 5,138,665 4,833,956 Total deposits 7,165,732 7,197,800 7,182,388 7,198,604 6,928,579 Short-term borrowings — — — 50,000 50,000 Long-term borrowings 162,257 166,930 197,754 197,577 197,448 Accrued interest payable and other liabilities 55,018 64,941 61,559 58,809 54,535 Total liabilities 7,383,007 7,429,671 7,441,701 7,504,990 7,230,562 Stockholders' Equity: Common stock 149 149 147 147 147 Additional paid-in capital 636,621 633,770 626,348 624,897 623,746 Retained earnings 482,295 458,261 431,317 417,863 398,966 Accumulated other comprehensive income (loss) (55,410 ) (53,173 ) (83,351 ) (65,269 ) (61,067 ) Total stockholders' equity 1,063,655 1,039,007 974,461 977,638 961,792 Total liabilities and stockholders' equity $ 8,446,662 $ 8,468,678 $ 8,416,162 $ 8,482,628 $ 8,192,354 Common shares outstanding 14,930,549 14,894,209 14,757,565 14,717,938 14,698,265 Nicolet Bankshares, Inc. Consolidated Statements of Income (Loss) (Unaudited) For the Three Months Ended (In thousands, except per share data) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Interest income: Loans, including loan fees $ 93,648 $ 90,265 $ 87,657 $ 84,091 $ 79,142 Taxable investment securities 4,557 4,737 4,351 4,133 4,961 Tax-exempt investment securities 1,238 1,394 1,424 1,476 1,737 Other interest income 4,588 7,149 6,452 2,357 1,536 Total interest income 104,031 103,545 99,884 92,057 87,376 Interest expense: Deposits 38,990 36,583 34,964 29,340 24,937 Short-term borrowings — — 474 1,108 3,212 Long-term borrowings 2,234 2,680 2,972 2,570 2,506 Total interest expense 41,224 39,263 38,410 33,018 30,655 Net interest income 62,807 64,282 61,474 59,039 56,721 Provision for credit losses 750 1,000 450 450 3,090 Net interest income after provision for credit losses 62,057 63,282 61,024 58,589 53,631 Noninterest income: Wealth management fee income 6,485 6,308 6,057 5,870 5,512 Mortgage income, net 1,364 1,856 2,020 1,822 1,466 Service charges on deposit accounts 1,581 1,475 1,492 1,529 1,480 Card interchange income 3,098 3,306 3,321 3,331 3,033 BOLI income 1,347 1,161 1,090 1,073 1,200 Asset gains (losses), net 1,909 5,947 31 (318 ) (38,468 ) Deferred compensation plan asset market valuations 59 949 (457 ) 499 946 LSR income, net 1,134 1,027 1,108 1,135 1,155 Other noninterest income 2,445 2,405 1,879 1,900 1,832 Total noninterest income 19,422 24,434 16,541 16,841 (21,844 ) Noninterest expense: Personnel expense 26,510 26,937 23,944 23,900 24,328 Occupancy, equipment and office 8,944 9,567 9,027 8,845 8,783 Business development and marketing 2,142 1,854 1,869 1,946 2,121 Data processing 4,270 7,043 4,643 4,218 3,988 Intangibles amortization 1,833 1,842 1,986 2,083 2,161 FDIC assessments 1,033 950 1,500 1,009 540 Merger-related expense — — — 26 163 Other noninterest expense 2,415 2,103 2,769 2,930 2,791 Total noninterest expense 47,147 50,296 45,738 44,957 44,875 Income (loss) before income tax expense 34,332 37,420 31,827 30,473 (13,088 ) Income tax expense (benefit) 6,542 6,759 14,669 7,878 (4,190 ) Net income (loss) $ 27,790 $ 30,661 $ 17,158 $ 22,595 $ (8,898 ) Earnings (loss) per common share: Basic $ 1.86 $ 2.07 $ 1.16 $ 1.54 $ (0.61 ) Diluted $ 1.82 $ 2.02 $ 1.14 $ 1.51 $ (0.61 ) Common shares outstanding: Basic weighted average 14,907 14,823 14,740 14,711 14,694 Diluted weighted average 15,249 15,142 15,100 14,960 14,694 Nicolet Bankshares, Inc. Consolidated Financial Summary (Unaudited) For the Three Months Ended (In thousands, except share & per share data) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Selected Average Balances: Loans $ 6,398,838 $ 6,263,971 $ 6,230,336 $ 6,237,757 $ 6,201,780 Investment securities 884,775 897,437 962,607 1,068,144 1,508,535 Interest-earning assets 7,629,120 7,683,495 7,676,895 7,497,935 7,830,590 Cash and cash equivalents 364,375 558,473 513,250 203,883 127,726 Goodwill and other intangibles, net 393,961 395,158 397,052 399,080 401,212 Total assets 8,380,595 8,415,169 8,417,456 8,228,600 8,570,623 Deposits 7,112,971 7,189,650 7,156,577 6,941,037 7,060,262 Interest-bearing liabilities 5,509,882 5,358,445 5,385,292 5,212,285 5,391,107 Stockholders’ equity (common) 1,048,596 996,745 983,133 967,142 970,108 Selected Ratios: (1) Book value per common share $ 71.24 $ 69.76 $ 66.03 $ 66.42 $ 65.44 Tangible book value per common share (2) $ 44.91 $ 43.28 $ 39.18 $ 39.37 $ 38.20 Return on average assets 1.33 % 1.45 % 0.81 % 1.10 % (0.42 )% Return on average common equity 10.66 12.20 6.92 9.37 (3.72 ) Return on average tangible common equity (2) 17.07 20.22 11.62 15.95 (6.34 ) Average equity to average assets 12.51 11.84 11.68 11.75 11.32 Stockholders’ equity to assets 12.59 12.27 11.58 11.53 11.74 Tangible common equity to tangible assets (2) 8.33 7.98 7.21 7.17 7.21 Net interest margin 3.26 3.30 3.16 3.14 2.91 Efficiency ratio 58.34 60.41 58.27 58.60 60.69 Effective tax rate 19.06 18.06 46.09 25.85 32.01 Selected Asset Quality Information: Nonaccrual loans $ 26,677 $ 26,625 $ 29,507 $ 25,278 $ 38,895 Other real estate owned - closed branches 808 808 884 958 1,347 Other real estate owned 437 459 1,147 520 628 Nonperforming assets $ 27,922 $ 27,892 $ 31,538 $ 26,756 $ 40,870 Net loan charge-offs (recoveries) $ 13 $ 550 $ 101 $ 51 $ 167 Allowance for credit losses-loans to loans 1.01 % 1.00 % 1.01 % 1.01 % 1.00 % Net loan charge-offs to average loans (1) 0.00 0.03 0.01 0.01 0.01 Nonperforming loans to total loans 0.42 0.42 0.47 0.41 0.62 Nonperforming assets to total assets 0.33 0.33 0.37 0.32 0.50 Stock Repurchase Information: Common stock repurchased (dollars) (3) $ — $ — $ — $ 1,519 $ — Common stock repurchased (full shares) (3) — — — 26,853 — (1) Income statement-related ratios for partial-year periods are annualized. (2) See Reconciliation of Non-GAAP Financial Measures below for a reconciliation of these financial measures. (3) Reflects common stock repurchased under board of director authorizations for the common stock repurchase program. Nicolet Bankshares, Inc. Consolidated Loan & Deposit Metrics (Unaudited) (In thousands) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Period End Loan Composition Commercial & industrial $ 1,307,490 $ 1,284,009 $ 1,237,789 $ 1,318,567 $ 1,330,052 Owner-occupied commercial real estate (“CRE”) 955,786 956,594 971,397 969,202 969,064 Agricultural 1,190,371 1,161,531 1,108,261 1,068,999 1,065,909 Commercial 3,453,647 3,402,134 3,317,447 3,356,768 3,365,025 CRE investment 1,188,722 1,142,251 1,130,938 1,108,692 1,146,388 Construction & land development 241,730 310,110 326,747 337,389 333,370 Commercial real estate 1,430,452 1,452,361 1,457,685 1,446,081 1,479,758 Commercial-based loans 4,884,099 4,854,495 4,775,132 4,802,849 4,844,783 Residential construction 84,370 75,726 76,289 108,095 134,782 Residential first mortgage 1,167,069 1,167,109 1,136,748 1,072,609 1,014,166 Residential junior mortgage 206,434 200,884 195,432 184,873 177,026 Residential real estate 1,457,873 1,443,719 1,408,469 1,365,577 1,325,974 Retail & other 55,645 55,728 55,656 54,350 52,975 Retail-based loans 1,513,518 1,499,447 1,464,125 1,419,927 1,378,949 Total loans $ 6,397,617 $ 6,353,942 $ 6,239,257 $ 6,222,776 $ 6,223,732 Period End Deposit Composition Noninterest-bearing demand $ 1,665,229 $ 1,958,709 $ 2,020,074 $ 2,059,939 $ 2,094,623 Interest-bearing demand 1,121,030 1,055,520 955,746 1,030,919 1,138,415 Money market 2,027,559 1,891,287 1,933,227 1,835,523 1,886,879 Savings 765,084 768,401 789,045 821,803 865,824 Time 1,586,830 1,523,883 1,484,296 1,450,420 942,838 Total deposits $ 7,165,732 $ 7,197,800 $ 7,182,388 $ 7,198,604 $ 6,928,579 Brokered transaction accounts $ 265,818 $ 166,861 $ 146,517 $ 173,107 $ 233,393 Brokered time deposits 517,190 448,582 457,433 566,405 289,181 Total brokered deposits $ 783,008 $ 615,443 $ 603,950 $ 739,512 $ 522,574 Customer transaction accounts $ 5,313,085 $ 5,507,056 $ 5,551,575 $ 5,575,077 $ 5,752,348 Customer time deposits 1,069,639 1,075,301 1,026,863 884,015 653,657 Total customer deposits (core) $ 6,382,724 $ 6,582,357 $ 6,578,438 $ 6,459,092 $ 6,406,005 Nicolet Bankshares, Inc. Net Interest Income and Net Interest Margin Analysis (Unaudited) For the Three Months Ended March 31, 2024 December 31, 2023 March 31, 2023 Average Average Average Average Average Average (In thousands) Balance Interest Rate Balance Interest Rate Balance Interest Rate ASSETS Total loans (1) (2) $ 6,398,838 $ 93,744 5.81 % $ 6,263,971 $ 90,313 5.66 % $ 6,201,780 $ 79,186 5.11 % Investment securities (2) 884,775 6,197 2.80 % 897,437 6,567 2.93 % 1,508,535 7,246 1.93 % Other interest-earning assets 345,507 4,588 5.26 % 522,087 7,149 5.37 % 120,275 1,536 5.11 % Total interest-earning assets 7,629,120 $ 104,529 5.44 % 7,683,495 $ 104,029 5.32 % 7,830,590 $ 87,968 4.49 % Other assets, net 751,475 731,674 740,033 Total assets $ 8,380,595 $ 8,415,169 $ 8,570,623 LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing core deposits $ 4,664,670 $ 31,256 2.69 % $ 4,570,493 $ 29,730 2.58 % $ 4,325,340 $ 19,587 1.84 % Brokered deposits 680,124 7,734 4.57 % 601,379 6,853 4.52 % 566,282 5,350 3.83 % Total interest-bearing deposits 5,344,794 38,990 2.93 % 5,171,872 36,583 2.81 % 4,891,622 24,937 2.07 % Wholesale funding 165,088 2,234 5.35 % 186,573 2,680 5.62 % 499,485 5,718 4.58 % Total interest-bearing liabilities 5,509,882 $ 41,224 3.01 % 5,358,445 $ 39,263 2.90 % 5,391,107 $ 30,655 2.30 % Noninterest-bearing demand deposits 1,768,177 2,017,778 2,168,640 Other liabilities 53,940 42,201 40,768 Stockholders' equity 1,048,596 996,745 970,108 Total liabilities and stockholders' equity $ 8,380,595 $ 8,415,169 $ 8,570,623 Net interest income and rate spread $ 63,305 2.43 % $ 64,766 2.42 % $ 57,313 2.19 % Net interest margin 3.26 % 3.30 % 2.91 % Loan purchase accounting accretion (3) $ 1,527 0.09 % $ 1,587 0.10 % $ 1,636 0.11 % (1) Nonaccrual loans and loans held for sale are included in the daily average loan balances outstanding. (2) The yield on tax-exempt loans and tax-exempt investment securities is computed on a tax-equivalent basis using a federal tax rate of 21%, and adjusted for the disallowance of interest expense. (3) Loan purchase accounting accretion included in Total loans above, and the related impact to net interest margin. Nicolet Bankshares, Inc. Reconciliation of Non-GAAP Financial Measures (Unaudited) For the Three Months Ended (In thousands, except per share data) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Adjusted net income (loss) reconciliation: (1) Net income (loss) (GAAP) $ 27,790 $ 30,661 $ 17,158 $ 22,595 $ (8,898 ) Adjustments: Provision expense (2) — — — — 2,340 Assets (gains) losses, net (1,909 ) (5,947 ) (31 ) 318 38,468 Merger-related expense — — — 26 163 Contract termination charge — 2,689 — — — Adjustments subtotal (1,909 ) (3,258 ) (31 ) 344 40,971 Tax on Adjustments (3) (372 ) (635 ) (6 ) 86 10,243 Tax - Wisconsin Tax Law Change (4) — — 6,151 — — Adjusted net income (Non-GAAP) $ 26,253 $ 28,038 $ 23,284 $ 22,853 $ 21,830 Diluted earnings (loss) per common share: Diluted earnings (loss) per common share (GAAP) $ 1.82 $ 2.02 $ 1.14 $ 1.51 $ (0.61 ) Adjusted Diluted earnings per common share (Non-GAAP) $ 1.72 $ 1.85 $ 1.54 $ 1.53 $ 1.45 Tangible assets: (5) Total assets $ 8,446,662 $ 8,468,678 $ 8,416,162 $ 8,482,628 $ 8,192,354 Goodwill and other intangibles, net 393,183 394,366 396,208 398,194 400,277 Tangible assets $ 8,053,479 $ 8,074,312 $ 8,019,954 $ 8,084,434 $ 7,792,077 Tangible common equity: (5) Stockholders’ equity (common) $ 1,063,655 $ 1,039,007 $ 974,461 $ 977,638 $ 961,792 Goodwill and other intangibles, net 393,183 394,366 396,208 398,194 400,277 Tangible common equity $ 670,472 $ 644,641 $ 578,253 $ 579,444 $ 561,515 Tangible average common equity: (5) Average stockholders’ equity (common) $ 1,048,596 $ 996,745 $ 983,133 $ 967,142 $ 970,108 Average goodwill and other intangibles, net 393,961 395,158 397,052 399,080 401,212 Average tangible common equity $ 654,635 $ 601,587 $ 586,081 $ 568,062 $ 568,896 Note: Numbers may not sum due to rounding. (1) The adjusted net income measure and related reconciliation provide information useful to investors in understanding the operating performance and trends of Nicolet and also to aid investors in the comparison of Nicolet’s financial performance to the financial performance of peer banks. (2) Provision expense for 2023 is attributable to the expected loss on a bank subordinated debt investment. (3) The effective tax rate for periods prior to the July 1, 2023, effective date of the Wisconsin tax law change assumed an effective tax rate of 25%, and periods subsequent to the effective date assumed an effective tax rate of 19.5%. (4) The adjusted net income reconciliation for first and second quarter 2023 is as originally reported, and has not been restated to reflect the $3 million excess tax expense of those quarters that was subsequently reversed in third quarter 2023 due to the Wisconsin tax law change. Thus, the adjusted net income reconciliation for the quarters of 2023 will not sum to the full year impact. (5) The ratios of tangible book value per common share, return on average tangible common equity, and tangible common equity to tangible assets exclude goodwill and other intangibles, net. These financial ratios have been included as they are considered to be critical metrics with which to analyze and evaluate financial condition and capital strength. View source version on businesswire.com: https://www.businesswire.com/news/home/20240416543876/en/Contacts ir@nicoletbank.com
Well positioned to be opportunistic Net income of $28 million or adjusted net income (non-GAAP) of $26 million for first quarter 2024, compared to net income of $31 million or adjusted net income (non-GAAP) of $28 million in prior quarter, and net loss of $9 million or adjusted net income (non-GAAP) of $22 million for first quarter 2023 Tangible common equity ratio increased to 8.33% for first quarter 2024 Credit quality remains strong with nonperforming assets stable at 0.33% of total assets and negligible net charge-offs Continued strong financial performance metrics for first quarter 2024 17.07% Return on average tangible common equity 1.33% Return on average assets Tangible book value per share increased to $44.91 for first quarter 2024
Nicolet Bankshares, Inc. (NYSE: NIC) (“Nicolet”) announced first quarter 2024 net income of $28 million and earnings per diluted common share of $1.82, compared to net income of $31 million and earnings per diluted common share of $2.02 for fourth quarter 2024, and net loss of $9 million and loss per diluted common share of $0.61 for first quarter 2023. Net income reflected certain non-core items and the related tax effect of each, including the first quarter 2023 balance sheet repositioning and third quarter 2023 change in Wisconsin state tax law, as well as gains / (losses) on other assets and investments in all periods. These non-core items positively impacted earnings per diluted common share $0.10 and $0.17 for first quarter 2024 and fourth quarter 2023, respectively, and negatively impacted earnings per diluted common share $2.06 for first quarter 2023. “Our first quarter results show our focus on execution as we move throughout the year,” said Mike Daniels, Chairman, President, and CEO of Nicolet. “We continue to maintain our relationship-based pricing discipline paired with our credit culture as our team consistently shows the value that we bring. We are encouraged by the results, and we will continue to challenge ourselves to manage both growth and efficiency.” Daniels continued, “Our strong core profitability has allowed us to build capital, which puts us in an enviable position of having significant options going forward. These options include organic growth, M&A, capital return to shareholders through share buybacks and dividends. While the M&A market remains slow, we are reviewing opportunities and participating in high-level discussions with potential partners, as we maintain our high degree of discipline with our M&A strategy. Our goal is always to partner with a franchise that makes Nicolet and the communities we serve better.” Nicolet’s 2023 results were significantly impacted by the first quarter 2023 balance sheet repositioning, which included the sale of $500 million (par value) U.S. Treasury held to maturity securities for a pre-tax loss of $38 million or an after-tax loss of $28 million, with the net proceeds used to reduce FHLB borrowings and the remainder held in investable cash. In addition, in July 2023 a new Wisconsin tax law was signed which provided financial institutions with an exemption from state taxable income for interest, fees, and penalties earned on specific loans to existing Wisconsin-based business or agriculture purpose loans. This tax law change to Nicolet moving forward will be a reduction / elimination of State income taxes being expensed; however, it also required a $9.1 million valuation allowance to be established for the State-related deferred tax asset as of the effective date of the legislation. While both provided a drag to 2023 earnings, each also serve as a tailwind for first quarter 2024 and beyond. Balance Sheet Review At March 31, 2024, period end assets were $8.4 billion, down slightly ($22 million) from December 31, 2023, mostly lower cash balances, partly offset by growth in loans. Total loans increased $44 million (1%) from December 31, 2023, with growth in agricultural, commercial and industrial, and residential real estate loans. Total deposits of $7.2 billion at March 31, 2024, decreased $32 million from December 31, 2023, mostly noninterest-bearing demand deposits. Total capital was $1.1 billion at March 31, 2024, an increase of $25 million over December 31, 2023, with earnings partly offset by the quarterly common stock dividend. Asset Quality Nonperforming assets were $28 million and represented 0.33% of total assets at March 31, 2024, unchanged from December 31, 2023, and down from $41 million or 0.50% at March 31, 2023. The allowance for credit losses-loans was $64 million and represented 1.01% of total loans at March 31, 2024, compared to $64 million (or 1.00% of total loans) at December 31, 2023, and $62 million (or 1.00% of total loans) at March 31, 2023. Asset quality trends remain solid and loan net charge-offs were negligible. Income Statement Review - Quarter Net income was $28 million and adjusted net income (non-GAAP) was $26 million for first quarter 2024, compared to net income of $31 million and adjusted net income (non-GAAP) of $28 million for fourth quarter 2023. Net interest income was $63 million for first quarter 2024, down $1 million from fourth quarter 2023. Interest income increased $1 million mostly due to the repricing of new and renewed loans in a rising interest rate environment, partly offset by lower investable cash balances, while interest expense increased $2 million due to higher average rates on seasonal deposits. The net interest margin for first quarter 2024 was 3.26%, down 4 bps from 3.30% for fourth quarter 2023. The yield on interest-earning assets increased 12 bps (to 5.44%) mostly due to higher average rates from the repricing of the loan portfolio, while the cost of funds increased 11 bps (to 3.01%) for first quarter 2024, attributable mainly to higher cost seasonal deposits. Noninterest income of $19 million for first quarter 2024 decreased $5 million from fourth quarter 2023, mostly due to the change in net asset gains. First quarter 2024 included net gains of $2 million due to a $1 million gain on sale of an investment security and a $1 million gain on the early extinguishment of subordinated debt, while fourth quarter 2023 included net gains of $6 million from the $9 million pre-tax gain on the sale of Nicolet’s member interest in UFS, LLC, partly offset by a $3 million loss on the sale of certain securities. Excluding the net asset gains (losses), noninterest income for first quarter 2024 was $18 million, a $1 million decrease from fourth quarter 2023, mostly due to changes in the fair value of nonqualified deferred compensation plan assets. Noninterest expense of $47 million for first quarter 2024 decreased $3 million from fourth quarter 2023. Personnel expense was minimally changed with higher salaries and incentives substantially offset by lower health insurance and a decrease in the fair value of nonqualified deferred compensation plan liabilities. Non-personnel expenses decreased $3 million (12%) between the sequential quarters, mostly lower data processing from an early contract termination charge in fourth quarter 2023. About Nicolet Bankshares, Inc. Nicolet Bankshares, Inc. is the bank holding company of Nicolet National Bank, a growing, full-service, community bank providing services ranging from commercial, agricultural and consumer banking to wealth management and retirement plan services. Founded in Green Bay in 2000, Nicolet National Bank operates branches primarily in Wisconsin, Michigan, and Minnesota. More information can be found at www.nicoletbank.com. Use of Non-GAAP Financial Measures This communication contains non-GAAP financial measures, such as non-GAAP adjusted net income, non-GAAP adjusted earnings per diluted common share, tangible book value per common share, return on average tangible common equity, and tangible common equity to tangible assets. Management believes such measures to be helpful to management, investors and others in understanding Nicolet’s results of operations or financial position. When non-GAAP financial measures are used, the comparable GAAP financial measures, as well as the reconciliation of the non-GAAP measures to the GAAP financial measures, are provided. See “Reconciliation of Non-GAAP Financial Measures (Unaudited)” below. The non-GAAP net income measure and related reconciliation provide information useful to investors in understanding the operating performance and trends of Nicolet and also aid investors in comparing Nicolet’s financial performance to the financial performance of peer banks. Management considers non-GAAP financial ratios to be critical metrics with which to analyze and evaluate financial condition and capital strengths. While non-GAAP financial measures are frequently used by stakeholders in the evaluation of a corporation, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP. Forward Looking Statements “Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995 Certain statements contained in this communication, which are not statements of historical fact, constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements generally can be identified by words or phrases such as, without limitation, “anticipate,” “believe,” “aim,” “can,” “conclude,” “continue,” “could,” “estimate,” “expect,” “foresee,” “goal,” “intend,” “may,” “might,” “outlook,” “possible,” “plan,” “predict,” “project,” “potential,” “seek,” “should,” “target,” “will,” “will likely,” “would,” or the negative of these terms or other comparable terminology, as well as similar expressions, and in this press release include our statements about potential M&A, share buyback, and dividend activity. Forward-looking statements are not historical facts but instead express only management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management’s control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements. Risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, include, but are not limited to future legislative changes to the taxes imposed upon Nicolet, potential expansion into other jurisdictions that impose different or higher taxes and our ability to generate loans that qualify for the Wisconsin tax reduction / elimination. Additional factors which could affect the forward looking statements can be found in Nicolet’s 2023 Annual Report on Form 10-K, as well subsequent filings with the SEC and are available on the SEC’s website at www.sec.gov. Any forward-looking statements included in this press release are made as of the date hereof and are based on information available to management at that time. Except as required by law, Nicolet disclaims any obligation to update or revise any forward-looking statement contained in this press release to reflect new information or events or circumstances that occur after the date the forward-looking statements were made. Nicolet Bankshares, Inc. Consolidated Balance Sheets (Unaudited) (In thousands, except share data) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Assets Cash and due from banks $ 81,677 $ 129,898 $ 109,414 $ 122,021 $ 93,462 Interest-earning deposits 345,747 361,533 436,466 383,185 20,718 Cash and cash equivalents 427,424 491,431 545,880 505,206 114,180 Certificates of deposit in other banks 5,639 6,374 7,598 9,808 11,293 Securities available for sale, at fair value 803,963 802,573 793,826 921,108 1,023,176 Other investments 60,464 57,560 58,367 57,578 57,482 Loans held for sale 5,022 4,160 6,500 3,849 4,962 Loans 6,397,617 6,353,942 6,239,257 6,222,776 6,223,732 Allowance for credit losses - loans (64,347 ) (63,610 ) (63,160 ) (62,811 ) (62,412 ) Loans, net 6,333,270 6,290,332 6,176,097 6,159,965 6,161,320 Premises and equipment, net 119,962 118,756 117,744 117,278 112,569 Bank owned life insurance (“BOLI”) 170,746 169,392 168,223 167,192 166,107 Goodwill and other intangibles, net 393,183 394,366 396,208 398,194 400,277 Accrued interest receivable and other assets 126,989 133,734 145,719 142,450 140,988 Total assets $ 8,446,662 $ 8,468,678 $ 8,416,162 $ 8,482,628 $ 8,192,354 Liabilities and Stockholders' Equity Liabilities: Noninterest-bearing demand deposits $ 1,665,229 $ 1,958,709 $ 2,020,074 $ 2,059,939 $ 2,094,623 Interest-bearing deposits 5,500,503 5,239,091 5,162,314 5,138,665 4,833,956 Total deposits 7,165,732 7,197,800 7,182,388 7,198,604 6,928,579 Short-term borrowings — — — 50,000 50,000 Long-term borrowings 162,257 166,930 197,754 197,577 197,448 Accrued interest payable and other liabilities 55,018 64,941 61,559 58,809 54,535 Total liabilities 7,383,007 7,429,671 7,441,701 7,504,990 7,230,562 Stockholders' Equity: Common stock 149 149 147 147 147 Additional paid-in capital 636,621 633,770 626,348 624,897 623,746 Retained earnings 482,295 458,261 431,317 417,863 398,966 Accumulated other comprehensive income (loss) (55,410 ) (53,173 ) (83,351 ) (65,269 ) (61,067 ) Total stockholders' equity 1,063,655 1,039,007 974,461 977,638 961,792 Total liabilities and stockholders' equity $ 8,446,662 $ 8,468,678 $ 8,416,162 $ 8,482,628 $ 8,192,354 Common shares outstanding 14,930,549 14,894,209 14,757,565 14,717,938 14,698,265 Nicolet Bankshares, Inc. Consolidated Statements of Income (Loss) (Unaudited) For the Three Months Ended (In thousands, except per share data) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Interest income: Loans, including loan fees $ 93,648 $ 90,265 $ 87,657 $ 84,091 $ 79,142 Taxable investment securities 4,557 4,737 4,351 4,133 4,961 Tax-exempt investment securities 1,238 1,394 1,424 1,476 1,737 Other interest income 4,588 7,149 6,452 2,357 1,536 Total interest income 104,031 103,545 99,884 92,057 87,376 Interest expense: Deposits 38,990 36,583 34,964 29,340 24,937 Short-term borrowings — — 474 1,108 3,212 Long-term borrowings 2,234 2,680 2,972 2,570 2,506 Total interest expense 41,224 39,263 38,410 33,018 30,655 Net interest income 62,807 64,282 61,474 59,039 56,721 Provision for credit losses 750 1,000 450 450 3,090 Net interest income after provision for credit losses 62,057 63,282 61,024 58,589 53,631 Noninterest income: Wealth management fee income 6,485 6,308 6,057 5,870 5,512 Mortgage income, net 1,364 1,856 2,020 1,822 1,466 Service charges on deposit accounts 1,581 1,475 1,492 1,529 1,480 Card interchange income 3,098 3,306 3,321 3,331 3,033 BOLI income 1,347 1,161 1,090 1,073 1,200 Asset gains (losses), net 1,909 5,947 31 (318 ) (38,468 ) Deferred compensation plan asset market valuations 59 949 (457 ) 499 946 LSR income, net 1,134 1,027 1,108 1,135 1,155 Other noninterest income 2,445 2,405 1,879 1,900 1,832 Total noninterest income 19,422 24,434 16,541 16,841 (21,844 ) Noninterest expense: Personnel expense 26,510 26,937 23,944 23,900 24,328 Occupancy, equipment and office 8,944 9,567 9,027 8,845 8,783 Business development and marketing 2,142 1,854 1,869 1,946 2,121 Data processing 4,270 7,043 4,643 4,218 3,988 Intangibles amortization 1,833 1,842 1,986 2,083 2,161 FDIC assessments 1,033 950 1,500 1,009 540 Merger-related expense — — — 26 163 Other noninterest expense 2,415 2,103 2,769 2,930 2,791 Total noninterest expense 47,147 50,296 45,738 44,957 44,875 Income (loss) before income tax expense 34,332 37,420 31,827 30,473 (13,088 ) Income tax expense (benefit) 6,542 6,759 14,669 7,878 (4,190 ) Net income (loss) $ 27,790 $ 30,661 $ 17,158 $ 22,595 $ (8,898 ) Earnings (loss) per common share: Basic $ 1.86 $ 2.07 $ 1.16 $ 1.54 $ (0.61 ) Diluted $ 1.82 $ 2.02 $ 1.14 $ 1.51 $ (0.61 ) Common shares outstanding: Basic weighted average 14,907 14,823 14,740 14,711 14,694 Diluted weighted average 15,249 15,142 15,100 14,960 14,694 Nicolet Bankshares, Inc. Consolidated Financial Summary (Unaudited) For the Three Months Ended (In thousands, except share & per share data) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Selected Average Balances: Loans $ 6,398,838 $ 6,263,971 $ 6,230,336 $ 6,237,757 $ 6,201,780 Investment securities 884,775 897,437 962,607 1,068,144 1,508,535 Interest-earning assets 7,629,120 7,683,495 7,676,895 7,497,935 7,830,590 Cash and cash equivalents 364,375 558,473 513,250 203,883 127,726 Goodwill and other intangibles, net 393,961 395,158 397,052 399,080 401,212 Total assets 8,380,595 8,415,169 8,417,456 8,228,600 8,570,623 Deposits 7,112,971 7,189,650 7,156,577 6,941,037 7,060,262 Interest-bearing liabilities 5,509,882 5,358,445 5,385,292 5,212,285 5,391,107 Stockholders’ equity (common) 1,048,596 996,745 983,133 967,142 970,108 Selected Ratios: (1) Book value per common share $ 71.24 $ 69.76 $ 66.03 $ 66.42 $ 65.44 Tangible book value per common share (2) $ 44.91 $ 43.28 $ 39.18 $ 39.37 $ 38.20 Return on average assets 1.33 % 1.45 % 0.81 % 1.10 % (0.42 )% Return on average common equity 10.66 12.20 6.92 9.37 (3.72 ) Return on average tangible common equity (2) 17.07 20.22 11.62 15.95 (6.34 ) Average equity to average assets 12.51 11.84 11.68 11.75 11.32 Stockholders’ equity to assets 12.59 12.27 11.58 11.53 11.74 Tangible common equity to tangible assets (2) 8.33 7.98 7.21 7.17 7.21 Net interest margin 3.26 3.30 3.16 3.14 2.91 Efficiency ratio 58.34 60.41 58.27 58.60 60.69 Effective tax rate 19.06 18.06 46.09 25.85 32.01 Selected Asset Quality Information: Nonaccrual loans $ 26,677 $ 26,625 $ 29,507 $ 25,278 $ 38,895 Other real estate owned - closed branches 808 808 884 958 1,347 Other real estate owned 437 459 1,147 520 628 Nonperforming assets $ 27,922 $ 27,892 $ 31,538 $ 26,756 $ 40,870 Net loan charge-offs (recoveries) $ 13 $ 550 $ 101 $ 51 $ 167 Allowance for credit losses-loans to loans 1.01 % 1.00 % 1.01 % 1.01 % 1.00 % Net loan charge-offs to average loans (1) 0.00 0.03 0.01 0.01 0.01 Nonperforming loans to total loans 0.42 0.42 0.47 0.41 0.62 Nonperforming assets to total assets 0.33 0.33 0.37 0.32 0.50 Stock Repurchase Information: Common stock repurchased (dollars) (3) $ — $ — $ — $ 1,519 $ — Common stock repurchased (full shares) (3) — — — 26,853 — (1) Income statement-related ratios for partial-year periods are annualized. (2) See Reconciliation of Non-GAAP Financial Measures below for a reconciliation of these financial measures. (3) Reflects common stock repurchased under board of director authorizations for the common stock repurchase program. Nicolet Bankshares, Inc. Consolidated Loan & Deposit Metrics (Unaudited) (In thousands) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Period End Loan Composition Commercial & industrial $ 1,307,490 $ 1,284,009 $ 1,237,789 $ 1,318,567 $ 1,330,052 Owner-occupied commercial real estate (“CRE”) 955,786 956,594 971,397 969,202 969,064 Agricultural 1,190,371 1,161,531 1,108,261 1,068,999 1,065,909 Commercial 3,453,647 3,402,134 3,317,447 3,356,768 3,365,025 CRE investment 1,188,722 1,142,251 1,130,938 1,108,692 1,146,388 Construction & land development 241,730 310,110 326,747 337,389 333,370 Commercial real estate 1,430,452 1,452,361 1,457,685 1,446,081 1,479,758 Commercial-based loans 4,884,099 4,854,495 4,775,132 4,802,849 4,844,783 Residential construction 84,370 75,726 76,289 108,095 134,782 Residential first mortgage 1,167,069 1,167,109 1,136,748 1,072,609 1,014,166 Residential junior mortgage 206,434 200,884 195,432 184,873 177,026 Residential real estate 1,457,873 1,443,719 1,408,469 1,365,577 1,325,974 Retail & other 55,645 55,728 55,656 54,350 52,975 Retail-based loans 1,513,518 1,499,447 1,464,125 1,419,927 1,378,949 Total loans $ 6,397,617 $ 6,353,942 $ 6,239,257 $ 6,222,776 $ 6,223,732 Period End Deposit Composition Noninterest-bearing demand $ 1,665,229 $ 1,958,709 $ 2,020,074 $ 2,059,939 $ 2,094,623 Interest-bearing demand 1,121,030 1,055,520 955,746 1,030,919 1,138,415 Money market 2,027,559 1,891,287 1,933,227 1,835,523 1,886,879 Savings 765,084 768,401 789,045 821,803 865,824 Time 1,586,830 1,523,883 1,484,296 1,450,420 942,838 Total deposits $ 7,165,732 $ 7,197,800 $ 7,182,388 $ 7,198,604 $ 6,928,579 Brokered transaction accounts $ 265,818 $ 166,861 $ 146,517 $ 173,107 $ 233,393 Brokered time deposits 517,190 448,582 457,433 566,405 289,181 Total brokered deposits $ 783,008 $ 615,443 $ 603,950 $ 739,512 $ 522,574 Customer transaction accounts $ 5,313,085 $ 5,507,056 $ 5,551,575 $ 5,575,077 $ 5,752,348 Customer time deposits 1,069,639 1,075,301 1,026,863 884,015 653,657 Total customer deposits (core) $ 6,382,724 $ 6,582,357 $ 6,578,438 $ 6,459,092 $ 6,406,005 Nicolet Bankshares, Inc. Net Interest Income and Net Interest Margin Analysis (Unaudited) For the Three Months Ended March 31, 2024 December 31, 2023 March 31, 2023 Average Average Average Average Average Average (In thousands) Balance Interest Rate Balance Interest Rate Balance Interest Rate ASSETS Total loans (1) (2) $ 6,398,838 $ 93,744 5.81 % $ 6,263,971 $ 90,313 5.66 % $ 6,201,780 $ 79,186 5.11 % Investment securities (2) 884,775 6,197 2.80 % 897,437 6,567 2.93 % 1,508,535 7,246 1.93 % Other interest-earning assets 345,507 4,588 5.26 % 522,087 7,149 5.37 % 120,275 1,536 5.11 % Total interest-earning assets 7,629,120 $ 104,529 5.44 % 7,683,495 $ 104,029 5.32 % 7,830,590 $ 87,968 4.49 % Other assets, net 751,475 731,674 740,033 Total assets $ 8,380,595 $ 8,415,169 $ 8,570,623 LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing core deposits $ 4,664,670 $ 31,256 2.69 % $ 4,570,493 $ 29,730 2.58 % $ 4,325,340 $ 19,587 1.84 % Brokered deposits 680,124 7,734 4.57 % 601,379 6,853 4.52 % 566,282 5,350 3.83 % Total interest-bearing deposits 5,344,794 38,990 2.93 % 5,171,872 36,583 2.81 % 4,891,622 24,937 2.07 % Wholesale funding 165,088 2,234 5.35 % 186,573 2,680 5.62 % 499,485 5,718 4.58 % Total interest-bearing liabilities 5,509,882 $ 41,224 3.01 % 5,358,445 $ 39,263 2.90 % 5,391,107 $ 30,655 2.30 % Noninterest-bearing demand deposits 1,768,177 2,017,778 2,168,640 Other liabilities 53,940 42,201 40,768 Stockholders' equity 1,048,596 996,745 970,108 Total liabilities and stockholders' equity $ 8,380,595 $ 8,415,169 $ 8,570,623 Net interest income and rate spread $ 63,305 2.43 % $ 64,766 2.42 % $ 57,313 2.19 % Net interest margin 3.26 % 3.30 % 2.91 % Loan purchase accounting accretion (3) $ 1,527 0.09 % $ 1,587 0.10 % $ 1,636 0.11 % (1) Nonaccrual loans and loans held for sale are included in the daily average loan balances outstanding. (2) The yield on tax-exempt loans and tax-exempt investment securities is computed on a tax-equivalent basis using a federal tax rate of 21%, and adjusted for the disallowance of interest expense. (3) Loan purchase accounting accretion included in Total loans above, and the related impact to net interest margin. Nicolet Bankshares, Inc. Reconciliation of Non-GAAP Financial Measures (Unaudited) For the Three Months Ended (In thousands, except per share data) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Adjusted net income (loss) reconciliation: (1) Net income (loss) (GAAP) $ 27,790 $ 30,661 $ 17,158 $ 22,595 $ (8,898 ) Adjustments: Provision expense (2) — — — — 2,340 Assets (gains) losses, net (1,909 ) (5,947 ) (31 ) 318 38,468 Merger-related expense — — — 26 163 Contract termination charge — 2,689 — — — Adjustments subtotal (1,909 ) (3,258 ) (31 ) 344 40,971 Tax on Adjustments (3) (372 ) (635 ) (6 ) 86 10,243 Tax - Wisconsin Tax Law Change (4) — — 6,151 — — Adjusted net income (Non-GAAP) $ 26,253 $ 28,038 $ 23,284 $ 22,853 $ 21,830 Diluted earnings (loss) per common share: Diluted earnings (loss) per common share (GAAP) $ 1.82 $ 2.02 $ 1.14 $ 1.51 $ (0.61 ) Adjusted Diluted earnings per common share (Non-GAAP) $ 1.72 $ 1.85 $ 1.54 $ 1.53 $ 1.45 Tangible assets: (5) Total assets $ 8,446,662 $ 8,468,678 $ 8,416,162 $ 8,482,628 $ 8,192,354 Goodwill and other intangibles, net 393,183 394,366 396,208 398,194 400,277 Tangible assets $ 8,053,479 $ 8,074,312 $ 8,019,954 $ 8,084,434 $ 7,792,077 Tangible common equity: (5) Stockholders’ equity (common) $ 1,063,655 $ 1,039,007 $ 974,461 $ 977,638 $ 961,792 Goodwill and other intangibles, net 393,183 394,366 396,208 398,194 400,277 Tangible common equity $ 670,472 $ 644,641 $ 578,253 $ 579,444 $ 561,515 Tangible average common equity: (5) Average stockholders’ equity (common) $ 1,048,596 $ 996,745 $ 983,133 $ 967,142 $ 970,108 Average goodwill and other intangibles, net 393,961 395,158 397,052 399,080 401,212 Average tangible common equity $ 654,635 $ 601,587 $ 586,081 $ 568,062 $ 568,896 Note: Numbers may not sum due to rounding. (1) The adjusted net income measure and related reconciliation provide information useful to investors in understanding the operating performance and trends of Nicolet and also to aid investors in the comparison of Nicolet’s financial performance to the financial performance of peer banks. (2) Provision expense for 2023 is attributable to the expected loss on a bank subordinated debt investment. (3) The effective tax rate for periods prior to the July 1, 2023, effective date of the Wisconsin tax law change assumed an effective tax rate of 25%, and periods subsequent to the effective date assumed an effective tax rate of 19.5%. (4) The adjusted net income reconciliation for first and second quarter 2023 is as originally reported, and has not been restated to reflect the $3 million excess tax expense of those quarters that was subsequently reversed in third quarter 2023 due to the Wisconsin tax law change. Thus, the adjusted net income reconciliation for the quarters of 2023 will not sum to the full year impact. (5) The ratios of tangible book value per common share, return on average tangible common equity, and tangible common equity to tangible assets exclude goodwill and other intangibles, net. These financial ratios have been included as they are considered to be critical metrics with which to analyze and evaluate financial condition and capital strength. View source version on businesswire.com: https://www.businesswire.com/news/home/20240416543876/en/