NIC Nicolet Bankshares Inc

• 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

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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240716206759/en/

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