Results

Nicolet Bankshares Inc.

07/16/2024 | Press release | Distributed by Public on 07/16/2024 14:08

Nicolet Bankshares, Inc. Announces Second Quarter 2024 Results

  • Net income $29 million for second quarter 2024, compared to net income of $28 million in prior quarter, and net income of $23 million for second quarter 2023
  • Net income of $57 million or adjusted net income (non-GAAP) of $55 million for first half 2024, compared to net income of $14 million or adjusted net income (non-GAAP) of $45 million for first half 2023
  • Solid quarter-over-quarter loan growth of $132 million (2%) and growth in core deposits after experiencing seasonal lows in first quarter
  • Quarterly cash dividend of $0.28 per common share paid during second quarter, a 12% increase over first quarter

GREEN BAY, Wis.--(BUSINESS WIRE)-- Nicolet Bankshares, Inc. (NYSE: NIC) ("Nicolet") announced second quarter 2024 net income of $29 million and earnings per diluted common share of $1.92, compared to net income of $28 million and earnings per diluted common share of $1.82 for first quarter 2024, and net income of $23 million and earnings per diluted common share of $1.51 for second quarter 2023. Net income for the six months ended June 30, 2024 was $57 million and earnings per diluted common share of $3.74, compared to net income of $14 million and earnings per diluted common share of $0.91 for the first half of 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 detailed in the Reconciliation of Non-GAAP Financial Measures table below), as well as gains / (losses) on other assets and investments in all periods. For the six months ended June 30, 2024, these non-core items positively impacted earnings per diluted common share $0.13, and negatively impacted earnings per diluted common share $2.07 for the six months ended June 30, 2023.

"Our strong second quarter results are a continuation and improvement of our first quarter results," said Mike Daniels, Chairman, President, and CEO of Nicolet. "We witnessed growth in our core deposits after experiencing seasonal lows during tax season; loan growth remained strong for our markets; and our core lines of business are each performing well, despite market headwinds."

Daniels continued, "Our margin continues to improve due to our heavy C&I focus and disciplined deposit pricing. We remain vigilant with credit, see few signs of significant stress in our markets, and unrealized losses are much smaller relative to our balance sheet given the shorter duration of our investment portfolio. Many of the fears the market has about banks, including shrinking margins, tepid loan growth, weakening asset quality due to CRE exposure, and stressed capital levels due to unrealized bond losses, are of limited concern for us at the moment. In short, we remain well positioned to keep producing peer-leading financial metrics for the remainder of the year, which will continue to provide us with strategic optionality going forward."

Balance Sheet Review

At June 30, 2024, period end assets were $8.6 billion, an increase of $110 million (1%) from March 31, 2024, mostly from solid loan growth. Total loans increased $132 million (2%) from March 31, 2024, with growth in agricultural, commercial and industrial, and residential real estate loans. Total deposits of $7.2 billion at June 30, 2024, increased $75 million from March 31, 2024, mostly noninterest-bearing demand and time deposits. Total capital was $1.1 billion at June 30, 2024, an increase of $28 million over March 31, 2024, with earnings partly offset by the quarterly common stock dividend.

Asset Quality

Nonperforming assets were $29 million and represented 0.34% of total assets at June 30, 2024, minimally changed from $28 million or 0.33% of total assets at March 31, 2024, and $27 million or 0.32% of total assets at June 30, 2023. The allowance for credit losses-loans was $65 million and represented 1.00% of total loans at June 30, 2024, compared to $64 million (or 1.01% of total loans) at March 31, 2024, and $63 million (or 1.01% of total loans) at June 30, 2023. Asset quality trends remain solid and loan net charge-offs were negligible.

Income Statement Review - Quarter

Net income and adjusted net income (non-GAAP) was $29 million for second quarter 2024, compared to net income of $28 million or adjusted net income (non-GAAP) of $26 million for first quarter 2024.

Net interest income was $65 million for second quarter 2024, up $3 million from first quarter 2024. Interest income increased $5 million mostly due to the repricing of new and renewed loans in a rising interest rate environment, as well as solid loan growth, while interest expense increased $2 million mainly due to higher average balances. The net interest margin for second quarter 2024 was 3.35%, up 9 bps from 3.26% for first quarter 2024. The yield on interest-earning assets increased 17 bps (to 5.61%) mostly due to higher average rates from the repricing of the loan portfolio and interest recovered upon the payoff of a nonaccrual loan, while the cost of funds increased 8 bps (to 3.09%) for second quarter 2024, attributable mainly to higher cost brokered deposits.

Noninterest income of $20 million for second quarter 2024 was minimally changed from first quarter 2024. Excluding the net asset gains (losses), noninterest income for second quarter 2024 was $19 million, a $1 million increase from first quarter 2024, mostly due to higher net mortgage income. Net asset gains (losses) of $0.6 million for second quarter 2024 were mostly due to the gain on sale of an other investment, while first quarter 2024 included net gains of $1.9 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.

Noninterest expense of $47 million for second quarter 2024 was also minimally changed from first quarter 2024. Within personnel expense, lower salaries and payroll taxes were substantially offset by higher incentives, while in non-personnel expenses lower snowplowing and equipment maintenance was offset by higher legal and professional fees.

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 and 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 company, 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 our ability to produce peer-leading financial metrics and strategic optionality going forward.

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 general competitive, economic, political, regulatory and market conditions. Additional factors which could affect the forward-looking statements contained in this press release can be found under the headings "Forward-Looking Statements" and "Risk Factors" 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.

Many of these factors are beyond Nicolet's ability to control or predict. If one or more events related to these or other risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, actual results may differ materially from the forward-looking statements. Accordingly, shareholders and investors should not place undue reliance on any such forward-looking statements. 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. New risks and uncertainties may emerge from time to time, and it is not possible for Nicolet to predict their occurrence or how they will affect Nicolet.

Nicolet qualifies all forward-looking statements by these cautionary statements.

Nicolet Bankshares, Inc.

Consolidated Balance Sheets (Unaudited)

(In thousands, except share data)

6/30/2024

3/31/2024

12/31/2023

9/30/2023

6/30/2023

Assets

Cash and due from banks

$

109,674

$

81,677

$

129,898

$

109,414

$

122,021

Interest-earning deposits

298,856

345,747

361,533

436,466

383,185

Cash and cash equivalents

408,530

427,424

491,431

545,880

505,206

Certificates of deposit in other banks

3,924

5,639

6,374

7,598

9,808

Securities available for sale, at fair value

799,937

803,963

802,573

793,826

921,108

Other investments

60,796

60,464

57,560

58,367

57,578

Loans held for sale

9,450

5,022

4,160

6,500

3,849

Loans

6,529,134

6,397,617

6,353,942

6,239,257

6,222,776

Allowance for credit losses - loans

(65,414

)

(64,347

)

(63,610

)

(63,160

)

(62,811

)

Loans, net

6,463,720

6,333,270

6,290,332

6,176,097

6,159,965

Premises and equipment, net

120,988

119,962

118,756

117,744

117,278

Bank owned life insurance ("BOLI")

171,972

170,746

169,392

168,223

167,192

Goodwill and other intangibles, net

391,421

393,183

394,366

396,208

398,194

Accrued interest receivable and other assets

126,279

126,989

133,734

145,719

142,450

Total assets

$

8,557,017

$

8,446,662

$

8,468,678

$

8,416,162

$

8,482,628

Liabilities and Stockholders' Equity

Liabilities:

Noninterest-bearing demand deposits

$

1,764,806

$

1,665,229

$

1,958,709

$

2,020,074

$

2,059,939

Interest-bearing deposits

5,476,272

5,500,503

5,239,091

5,162,314

5,138,665

Total deposits

7,241,078

7,165,732

7,197,800

7,182,388

7,198,604

Short-term borrowings

-

-

-

-

50,000

Long-term borrowings

162,433

162,257

166,930

197,754

197,577

Accrued interest payable and other liabilities

62,093

55,018

64,941

61,559

58,809

Total liabilities

7,465,604

7,383,007

7,429,671

7,441,701

7,504,990

Stockholders' Equity:

Common stock

150

149

149

147

147

Additional paid-in capital

639,159

636,621

633,770

626,348

624,897

Retained earnings

507,366

482,295

458,261

431,317

417,863

Accumulated other comprehensive income (loss)

(55,262

)

(55,410

)

(53,173

)

(83,351

)

(65,269

)

Total stockholders' equity

1,091,413

1,063,655

1,039,007

974,461

977,638

Total liabilities and stockholders' equity

$

8,557,017

$

8,446,662

$

8,468,678

$

8,416,162

$

8,482,628

Common shares outstanding

14,945,598

14,930,549

14,894,209

14,757,565

14,717,938

Nicolet Bankshares, Inc.

Consolidated Statements of Income (Unaudited)

For the Three Months Ended

For the Six Months Ended

(In thousands, except per share data)

6/30/2024

3/31/2024

12/31/2023

9/30/2023

6/30/2023

6/30/2024

6/30/2023

Interest income:

Loans, including loan fees

$

97,975

$

93,648

$

90,265

$

87,657

$

84,091

$

191,623

$

163,233

Taxable investment securities

5,056

4,557

4,737

4,351

4,133

9,613

9,094

Tax-exempt investment securities

1,152

1,238

1,394

1,424

1,476

2,390

3,213

Other interest income

4,695

4,588

7,149

6,452

2,357

9,283

3,893

Total interest income

108,878

104,031

103,545

99,884

92,057

212,909

179,433

Interest expense:

Deposits

41,386

38,990

36,583

34,964

29,340

80,376

54,277

Short-term borrowings

-

-

-

474

1,108

-

4,320

Long-term borrowings

2,150

2,234

2,680

2,972

2,570

4,384

5,076

Total interest expense

43,536

41,224

39,263

38,410

33,018

84,760

63,673

Net interest income

65,342

62,807

64,282

61,474

59,039

128,149

115,760

Provision for credit losses

1,350

750

1,000

450

450

2,100

3,540

Net interest income after provision for credit losses

63,992

62,057

63,282

61,024

58,589

126,049

112,220

Noninterest income:

Wealth management fee income

6,674

6,485

6,308

6,057

5,870

13,159

11,382

Mortgage income, net

2,634

1,364

1,856

2,020

1,822

3,998

3,288

Service charges on deposit accounts

1,813

1,581

1,475

1,492

1,529

3,394

3,009

Card interchange income

3,458

3,098

3,306

3,321

3,331

6,556

6,364

BOLI income

1,225

1,347

1,161

1,090

1,073

2,572

2,273

Asset gains (losses), net

616

1,909

5,947

31

(318

)

2,525

(38,786

)

Deferred compensation plan asset market valuations

169

59

949

(457

)

499

228

1,445

LSR income, net

1,117

1,134

1,027

1,108

1,135

2,251

2,290

Other noninterest income

1,903

2,445

2,405

1,879

1,900

4,348

3,732

Total noninterest income

19,609

19,422

24,434

16,541

16,841

39,031

(5,003

)

Noninterest expense:

Personnel expense

26,285

26,510

26,937

23,944

23,900

52,795

48,228

Occupancy, equipment and office

8,681

8,944

9,567

9,027

8,845

17,625

17,628

Business development and marketing

2,040

2,142

1,854

1,869

1,946

4,182

4,067

Data processing

4,281

4,270

7,043

4,643

4,218

8,551

8,206

Intangibles amortization

1,762

1,833

1,842

1,986

2,083

3,595

4,244

FDIC assessments

990

1,033

950

1,500

1,009

2,023

1,549

Merger-related expense

-

-

-

-

26

-

189

Other noninterest expense

2,814

2,415

2,103

2,769

2,930

5,229

5,721

Total noninterest expense

46,853

47,147

50,296

45,738

44,957

94,000

89,832

Income before income tax expense

36,748

34,332

37,420

31,827

30,473

71,080

17,385

Income tax expense

7,475

6,542

6,759

14,669

7,878

14,017

3,688

Net income

$

29,273

$

27,790

$

30,661

$

17,158

$

22,595

$

57,063

$

13,697

Earnings per common share:

Basic

$

1.96

$

1.86

$

2.07

$

1.16

$

1.54

$

3.82

$

0.93

Diluted

$

1.92

$

1.82

$

2.02

$

1.14

$

1.51

$

3.74

$

0.91

Common shares outstanding:

Basic weighted average

14,937

14,907

14,823

14,740

14,711

14,922

14,703

Diluted weighted average

15,276

15,249

15,142

15,100

14,960

15,263

15,011

Nicolet Bankshares, Inc.

Consolidated Financial Summary (Unaudited)

For the Three Months Ended

For the Six Months Ended

(In thousands, except share & per share data)

6/30/2024

3/31/2024

12/31/2023

9/30/2023

6/30/2023

6/30/2024

6/30/2023

Selected Average Balances:

Loans

$

6,496,732

$

6,398,838

$

6,263,971

$

6,230,336

$

6,237,757

$

6,447,785

$

6,219,868

Investment securities

881,190

884,775

897,437

962,607

1,068,144

882,982

1,287,123

Interest-earning assets

7,733,097

7,629,120

7,683,495

7,676,895

7,497,935

7,681,109

7,663,344

Cash and cash equivalents

374,176

364,375

558,473

513,250

203,883

369,276

166,015

Goodwill and other intangibles, net

392,171

393,961

395,158

397,052

399,080

393,066

400,140

Total assets

8,481,186

8,380,595

8,415,169

8,417,456

8,228,600

8,430,891

8,398,667

Deposits

7,183,777

7,112,971

7,189,650

7,156,577

6,941,037

7,148,373

7,000,320

Interest-bearing liabilities

5,658,642

5,509,882

5,358,445

5,385,292

5,212,285

5,584,262

5,301,202

Stockholders' equity (common)

1,070,379

1,048,596

996,745

983,133

967,142

1,059,487

968,617

Selected Ratios: (1)

Book value per common share

$

73.03

$

71.24

$

69.76

$

66.03

$

66.42

$

73.03

$

66.42

Tangible book value per common share (2)

$

46.84

$

44.91

$

43.28

$

39.18

$

39.37

$

46.84

$

39.37

Return on average assets

1.39

%

1.33

%

1.45

%

0.81

%

1.10

%

1.36

%

0.33

%

Return on average common equity

11.00

10.66

12.20

6.92

9.37

10.83

2.85

Return on average tangible common equity (2)

17.36

17.07

20.22

11.62

15.95

17.22

4.86

Average equity to average assets

12.62

12.51

11.84

11.68

11.75

12.57

11.53

Stockholders' equity to assets

12.75

12.59

12.27

11.58

11.53

12.75

11.53

Tangible common equity to tangible assets (2)

8.57

8.33

7.98

7.21

7.17

8.57

7.17

Net interest margin

3.35

3.26

3.30

3.16

3.14

3.31

3.02

Efficiency ratio

55.24

58.34

60.41

58.27

58.60

56.75

59.63

Effective tax rate

20.34

19.06

18.06

46.09

25.85

19.72

21.21

Selected Asset Quality Information:

Nonaccrual loans

$

27,838

$

26,677

$

26,625

$

29,507

$

25,278

$

27,838

$

25,278

Other real estate owned - closed branches

768

808

808

884

958

768

958

Other real estate owned

379

437

459

1,147

520

379

520

Nonperforming assets

$

28,985

$

27,922

$

27,892

$

31,538

$

26,756

$

28,985

$

26,756

Net loan charge-offs (recoveries)

$

283

$

13

$

550

$

101

$

51

$

296

$

218

Allowance for credit losses-loans to loans

1.00

%

1.01

%

1.00

%

1.01

%

1.01

%

1.00

%

1.01

%

Net charge-offs to average loans (1)

0.02

0.00

0.03

0.01

0.01

0.01

0.01

Nonperforming loans to total loans

0.43

0.42

0.42

0.47

0.41

0.43

0.41

Nonperforming assets to total assets

0.34

0.33

0.33

0.37

0.32

0.34

0.32

Stock Repurchase Information:

Common stock repurchased ($) (3)

$

-

$

-

$

-

$

-

$

1,519

$

-

$

1,519

Common stock repurchased (shares) (3)

-

-

-

-

26,853

-

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)

6/30/2024

3/31/2024

12/31/2023

9/30/2023

6/30/2023

Period End Loan Composition

Commercial & industrial

$

1,358,152

$

1,307,490

$

1,284,009

$

1,237,789

$

1,318,567

Owner-occupied commercial real estate ("CRE")

941,137

955,786

956,594

971,397

969,202

Agricultural

1,224,885

1,190,371

1,161,531

1,108,261

1,068,999

Commercial

3,524,174

3,453,647

3,402,134

3,317,447

3,356,768

CRE investment

1,198,020

1,188,722

1,142,251

1,130,938

1,108,692

Construction & land development

247,565

241,730

310,110

326,747

337,389

Commercial real estate

1,445,585

1,430,452

1,452,361

1,457,685

1,446,081

Commercial-based loans

4,969,759

4,884,099

4,854,495

4,775,132

4,802,849

Residential construction

90,904

84,370

75,726

76,289

108,095

Residential first mortgage

1,190,790

1,167,069

1,167,109

1,136,748

1,072,609

Residential junior mortgage

218,512

206,434

200,884

195,432

184,873

Residential real estate

1,500,206

1,457,873

1,443,719

1,408,469

1,365,577

Retail & other

59,169

55,645

55,728

55,656

54,350

Retail-based loans

1,559,375

1,513,518

1,499,447

1,464,125

1,419,927

Total loans

$

6,529,134

$

6,397,617

$

6,353,942

$

6,239,257

$

6,222,776

Period End Deposit Composition

Noninterest-bearing demand

$

1,764,806

$

1,665,229

$

1,958,709

$

2,020,074

$

2,059,939

Interest-bearing demand

1,093,621

1,121,030

1,055,520

955,746

1,030,919

Money market

1,963,559

2,027,559

1,891,287

1,933,227

1,835,523

Savings

762,529

765,084

768,401

789,045

821,803

Time

1,656,563

1,586,830

1,523,883

1,484,296

1,450,420

Total deposits

$

7,241,078

$

7,165,732

$

7,197,800

$

7,182,388

$

7,198,604

Brokered transaction accounts

$

250,109

$

265,818

$

166,861

$

146,517

$

173,107

Brokered time deposits

557,657

517,190

448,582

457,433

566,405

Total brokered deposits

$

807,766

$

783,008

$

615,443

$

603,950

$

739,512

Customer transaction accounts

$

5,334,406

$

5,313,085

$

5,507,056

$

5,551,575

$

5,575,077

Customer time deposits

1,098,906

1,069,639

1,075,301

1,026,863

884,015

Total customer deposits (core)

$

6,433,312

$

6,382,724

$

6,582,357

$

6,578,438

$

6,459,092

Nicolet Bankshares, Inc.

Net Interest Income and Net Interest Margin Analysis (Unaudited)

For the Three Months Ended

June 30, 2024

March 31, 2024

June 30, 2023

Average

Average

Average

Average

Average

Average

(In thousands)

Balance

Interest

Rate

Balance

Interest

Rate

Balance

Interest

Rate

ASSETS

Total loans (1) (2)

$

6,496,732

$

98,086

5.99

%

$

6,398,838

$

93,744

5.81

%

$

6,237,757

$

84,132

5.35

%

Investment securities (2)

881,190

6,579

2.99

%

884,775

6,197

2.80

%

1,068,144

6,094

2.28

%

Other interest-earning assets

355,175

4,695

5.24

%

345,507

4,588

5.26

%

192,034

2,357

4.87

%

Total interest-earning assets

7,733,097

$

109,360

5.61

%

7,629,120

$

104,529

5.44

%

7,497,935

$

92,583

4.90

%

Other assets, net

748,089

751,475

730,665

Total assets

$

8,481,186

$

8,380,595

$

8,228,600

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest-bearing core deposits

$

4,665,195

$

31,713

2.73

%

$

4,664,670

$

31,256

2.69

%

$

4,278,502

$

22,728

2.13

%

Brokered deposits

831,100

9,673

4.68

%

680,124

7,734

4.57

%

640,643

6,612

4.14

%

Total interest-bearing deposits

5,496,295

41,386

3.03

%

5,344,794

38,990

2.93

%

4,919,145

29,340

2.39

%

Wholesale funding

162,347

2,150

5.24

%

165,088

2,234

5.35

%

293,140

3,678

4.96

%

Total interest-bearing liabilities

5,658,642

$

43,536

3.09

%

5,509,882

$

41,224

3.01

%

5,212,285

$

33,018

2.54

%

Noninterest-bearing demand deposits

1,687,482

1,768,177

2,021,892

Other liabilities

64,683

53,940

27,281

Stockholders' equity

1,070,379

1,048,596

967,142

Total liabilities and stockholders' equity

$

8,481,186

$

8,380,595

$

8,228,600

Net interest income and rate spread

$

65,824

2.52

%

$

63,305

2.43

%

$

59,565

2.36

%

Net interest margin

3.35

%

3.26

%

3.14

%

Loan purchase accounting accretion (3)

$

1,527

0.08

%

$

1,527

0.08

%

$

1,636

0.10

%

Loan nonaccrual interest (4)

$

329

0.02

%

$

(241

)

(0.01

)%

$

341

0.02

%

For the Six Months Ended

June 30, 2024

June 30, 2023

Average

Average

Average

Average

(In thousands)

Balance

Interest

Rate

Balance

Interest

Rate

ASSETS

Total loans (1) (2)

$

6,447,785

$

191,830

5.90

%

$

6,219,868

$

163,318

5.23

%

Investment securities (2)

882,982

12,776

2.89

%

1,287,123

13,340

2.07

%

Other interest-earning assets

350,342

9,283

5.25

%

156,353

3,893

4.96

%

Total interest-earning assets

7,681,109

$

213,889

5.52

%

7,663,344

$

180,551

4.69

%

Other assets, net

749,782

735,323

Total assets

$

8,430,891

$

8,398,667

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest-bearing core deposits

$

4,664,932

$

62,969

2.71

%

$

4,301,792

$

42,315

1.98

%

Brokered deposits

755,612

17,407

4.63

%

603,668

11,962

4.00

%

Total interest-bearing deposits

5,420,544

80,376

2.98

%

4,905,460

54,277

2.23

%

Wholesale funding

163,718

4,384

5.30

%

395,742

9,396

4.72

%

Total interest-bearing liabilities

5,584,262

$

84,760

3.05

%

5,301,202

$

63,673

2.42

%

Noninterest-bearing demand deposits

1,727,829

2,094,860

Other liabilities

59,313

33,988

Stockholders' equity

1,059,487

968,617

Total liabilities and stockholders' equity

$

8,430,891

$

8,398,667

Net interest income and rate spread

$

129,129

2.47

%

$

116,878

2.27

%

Net interest margin

3.31

%

3.02

%

Loan purchase accounting accretion (3)

$

3,055

0.08

%

$

3,272

0.10

%

(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 interest above, and the related impact to net interest margin.

(4)

Loan nonaccrual interest included in Total loans interest above, and the related impact to net interest margin.

Nicolet Bankshares, Inc.

Reconciliation of Non-GAAP Financial Measures (Unaudited)

For the Three Months Ended

For the Six Months Ended

(In thousands, except per share data)

6/30/2024

3/31/2024

12/31/2023

9/30/2023

6/30/2023

6/30/2024

6/30/2023

Adjusted net income reconciliation: (1)

Net income (GAAP)

$

29,273

$

27,790

$

30,661

$

17,158

$

22,595

$

57,063

$

13,697

Adjustments:

Provision expense (2)

-

-

-

-

-

-

2,340

Assets (gains) losses, net (3)

(616

)

(1,909

)

(5,947

)

(31

)

318

(2,525

)

38,786

Merger-related expense

-

-

-

-

26

-

189

Contract termination charge

-

-

2,689

-

-

-

-

Adjustments subtotal

(616

)

(1,909

)

(3,258

)

(31

)

344

(2,525

)

41,315

Tax on Adjustments (4)

(120

)

(372

)

(635

)

(6

)

86

(492

)

10,329

Tax - Wisconsin Tax Law Change (4)

-

-

-

6,151

-

-

-

Adjusted net income (Non-GAAP)

$

28,777

$

26,253

$

28,038

$

23,284

$

22,853

$

55,030

$

44,683


Diluted earnings per common share:

Diluted earnings per common share (GAAP)

$

1.92

$

1.82

$

2.02

$

1.14

$

1.51

$

3.74

$

0.91

Adjusted Diluted earnings per common share (Non-GAAP)

$

1.88

$

1.72

$

1.85

$

1.54

$

1.53

$

3.61

$

2.98

Tangible assets: (5)

Total assets

$

8,557,017

$

8,446,662

$

8,468,678

$

8,416,162

$

8,482,628

Goodwill and other intangibles, net

391,421

393,183

394,366

396,208

398,194

Tangible assets

$

8,165,596

$

8,053,479

$

8,074,312

$

8,019,954

$

8,084,434

Tangible common equity: (5)

Stockholders' equity (common)

$

1,091,413

$

1,063,655

$

1,039,007

$

974,461

$

977,638

Goodwill and other intangibles, net

391,421

393,183

394,366

396,208

398,194

Tangible common equity

$

699,992

$

670,472

$

644,641

$

578,253

$

579,444

Tangible average common equity: (5)

Average stockholders' equity (common)

$

1,070,379

$

1,048,596

$

996,745

$

983,133

$

967,142

$

1,059,487

$

968,617

Average goodwill and other intangibles, net

392,171

393,961

395,158

397,052

399,080

393,066

400,140

Average tangible common equity

$

678,208

$

654,635

$

601,587

$

586,081

$

568,062

$

666,421

$

568,477

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)

Includes the gains / (losses) on other assets and investments, as well as the impact of the March 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.

(4)

In July 2023, a new Wisconsin tax law change 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. The effective tax rate for periods prior to the July 1, 2023, effective date of this 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%. 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.

Source: Nicolet Bankshares, Inc.