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Nicolet Bankshares, Inc. Announces Third Quarter 2024 Results

  • Net income $33 million for third quarter 2024, compared to net income of $29 million in prior quarter, and net income of $17 million for third quarter 2023
  • Net income of $90 million or adjusted net income (non-GAAP) of $87 million for the first nine months of 2024, compared to net income of $31 million or adjusted net income (non-GAAP) of $73 million for the first nine months of 2023
  • Tangible common equity to tangible assets increased 64 bps to 9.21% at quarter end due to strong core earnings and a significant reduction in unrealized losses in the securities portfolio from lower expected interest rates
  • Asset quality remains solid, as nonperforming assets declined to 31 bps – the lowest level in more than three years; annualized net charge-offs remain negligible at 2 bps of loans

Nicolet Bankshares, Inc. (NYSE: NIC) (“Nicolet”) announced third quarter 2024 net income of $33 million and earnings per diluted common share of $2.10, compared to net income of $29 million and earnings per diluted common share of $1.92 for second quarter 2024, and net income of $17 million and earnings per diluted common share of $1.14 for third quarter 2023. Net income for the nine months ended September 30, 2024 was $90 million and earnings per diluted common share of $5.84, compared to net income of $31 million and earnings per diluted common share of $2.05 for the nine months ended September 30, 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 nine months ended September 30, 2024, these non-core items positively impacted earnings per diluted common share $0.19, and negatively impacted earnings per diluted common share $2.82 for the nine months ended September 30, 2023.

“The third quarter produced strong results across all revenue lines, and demonstrated what happens when almost 1,000 people show up every day to make a difference,” said Mike Daniels, Chairman, President, and CEO of Nicolet. “Financial results were impressive with quarterly return on average assets of 1.50% and return on average tangible common equity of 17.77%. We saw growth in loans and core deposits. Revenue was up across wealth, mortgage, and all other fee income areas. And our net interest margin continued its upward trajectory as we were able to keep deposit and funding costs relatively stable during the quarter.”

“Furthermore, our credit quality remains exceptional as nonperforming assets fell to their lowest level in years. This not only speaks to the team’s ability to execute within Nicolet’s consistent credit culture, but also to the strength and resilience of our commercial customer base across the Upper Midwest. Despite facing higher interest rates, rising input costs due to inflation, and the challenges of finding qualified workers, our customers have shown their ability to adapt in this economy. Nicolet’s message of shared success is resonating within our walls and in the communities we serve,” Daniels continued.

Balance Sheet Review

At September 30, 2024, period end assets were $8.6 billion, an increase of $80 million (1%) from June 30, 2024, mostly from loan growth and improvements in the fair value of the available for sale securities portfolio. Total loans increased $28 million from June 30, 2024, while the securities portfolio increased $26 million from June 30, 2024, mostly due to the positive fair value movements. Total deposits of $7.3 billion at September 30, 2024, increased $19 million from June 30, 2024, the net of a $75 million increase in noninterest-bearing demand and a $56 million decrease in interest-bearing deposits. Total capital was $1.1 billion at September 30, 2024, an increase of $58 million over June 30, 2024, with solid earnings and improvements in the securities portfolio valuation partly offset by the quarterly common stock dividend.

Asset Quality

Nonperforming assets were $26 million and represented 0.31% of total assets at September 30, 2024, compared to $29 million or 0.34% of total assets at June 30, 2024, and $32 million or 0.37% of total assets at September 30, 2023. The allowance for credit losses-loans was $66 million and represented 1.00% of total loans at September 30, 2024, compared to $65 million (or 1.00% of total loans) at June 30, 2024, and $63 million (or 1.01% of total loans) at September 30, 2023. Asset quality trends remain solid and loan net charge-offs were negligible.

Income Statement Review - Quarter

Net income was $33 million for third quarter 2024, compared to net income of $29 million for second quarter 2024.

Net interest income was $68 million for third quarter 2024, up $3 million from second quarter 2024. Interest income increased $4 million mostly due to the repricing of new and renewed loans in a higher interest rate environment, as well as solid loan growth, while interest expense increased $1 million due to both higher average balances and higher rates. The net interest margin for third quarter 2024 was 3.44%, up 9 bps from 3.35% for second quarter 2024. The yield on interest-earning assets increased 7 bps (to 5.68%) mostly due to higher average rates from the repricing of the loan portfolio, while the cost of funds increased 2 bps (to 3.11%) for third quarter 2024.

Noninterest income of $22 million for third quarter 2024 increased $3 million over second quarter 2024, with increases in most noninterest income categories. Wealth income increased $0.4 million on growth in assets under management (due to both net new accounts and positive fair value changes), while net mortgage income grew $0.2 million mostly from higher gains on sale. Net asset gains and deferred compensation plan asset market valuations during third quarter 2024 were attributable to positive movements in the market.

Noninterest expense of $49 million for third quarter 2024 increased $2 million over second quarter 2024. Personnel expense increased $3 million over second quarter 2024, including higher incentives commensurate with solid earnings, higher salaries, and the offsetting market value change in the deferred compensation plan liabilities. Non-personnel expenses combined decreased $0.4 million from second quarter 2024 on lower marketing (due to timing of marketing campaigns) and lower other noninterest expense (due to the board equity retainer granted in second quarter), partly offset by higher data processing.

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.

Nicolet Bankshares, Inc.

 

 

 

 

 

 

 

 

 

 

Consolidated Balance Sheets (Unaudited)

 

 

 

 

 

 

 

 

 

 

(In thousands, except share data)

 

9/30/2024

 

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

Assets

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

124,076

 

 

$

109,674

��

 

$

81,677

 

 

$

129,898

 

 

$

109,414

 

Interest-earning deposits

 

 

303,908

 

 

 

298,856

 

 

 

345,747

 

 

 

361,533

 

 

 

436,466

 

Cash and cash equivalents

 

 

427,984

 

 

 

408,530

 

 

 

427,424

 

 

 

491,431

 

 

 

545,880

 

Certificates of deposit in other banks

 

 

3,189

 

 

 

3,924

 

 

 

5,639

 

 

 

6,374

 

 

 

7,598

 

Securities available for sale, at fair value

 

 

825,907

 

 

 

799,937

 

 

 

803,963

 

 

 

802,573

 

 

 

793,826

 

Other investments

 

 

60,443

 

 

 

60,796

 

 

 

60,464

 

 

 

57,560

 

 

 

58,367

 

Loans held for sale

 

 

11,121

 

 

 

9,450

 

 

 

5,022

 

 

 

4,160

 

 

 

6,500

 

Loans

 

 

6,556,840

 

 

 

6,529,134

 

 

 

6,397,617

 

 

 

6,353,942

 

 

 

6,239,257

 

Allowance for credit losses - loans

 

 

(65,785

)

 

 

(65,414

)

 

 

(64,347

)

 

 

(63,610

)

 

 

(63,160

)

Loans, net

 

 

6,491,055

 

 

 

6,463,720

 

 

 

6,333,270

 

 

 

6,290,332

 

 

 

6,176,097

 

Premises and equipment, net

 

 

123,585

 

 

 

120,988

 

 

 

119,962

 

 

 

118,756

 

 

 

117,744

 

Bank owned life insurance (“BOLI”)

 

 

185,011

 

 

 

171,972

 

 

 

170,746

 

 

 

169,392

 

 

 

168,223

 

Goodwill and other intangibles, net

 

 

389,727

 

 

 

391,421

 

 

 

393,183

 

 

 

394,366

 

 

 

396,208

 

Accrued interest receivable and other assets

 

 

119,096

 

 

 

126,279

 

 

 

126,989

 

 

 

133,734

 

 

 

145,719

 

Total assets

 

$

8,637,118

 

 

$

8,557,017

 

 

$

8,446,662

 

 

$

8,468,678

 

 

$

8,416,162

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

 

$

1,839,617

 

 

$

1,764,806

 

 

$

1,665,229

 

 

$

1,958,709

 

 

$

2,020,074

 

Interest-bearing deposits

 

 

5,420,380

 

 

 

5,476,272

 

 

 

5,500,503

 

 

 

5,239,091

 

 

 

5,162,314

 

Total deposits

 

 

7,259,997

 

 

 

7,241,078

 

 

 

7,165,732

 

 

 

7,197,800

 

 

 

7,182,388

 

Short-term borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term borrowings

 

 

161,210

 

 

 

162,433

 

 

 

162,257

 

 

 

166,930

 

 

 

197,754

 

Accrued interest payable and other liabilities

 

 

66,584

 

 

 

62,093

 

 

 

55,018

 

 

 

64,941

 

 

 

61,559

 

Total liabilities

 

 

7,487,791

 

 

 

7,465,604

 

 

 

7,383,007

 

 

 

7,429,671

 

 

 

7,441,701

 

Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

151

 

 

 

150

 

 

 

149

 

 

 

149

 

 

 

147

 

Additional paid-in capital

 

 

647,934

 

 

 

639,159

 

 

 

636,621

 

 

 

633,770

 

 

 

626,348

 

Retained earnings

 

 

535,638

 

 

 

507,366

 

 

 

482,295

 

 

 

458,261

 

 

 

431,317

 

Accumulated other comprehensive income (loss)

 

 

(34,396

)

 

 

(55,262

)

 

 

(55,410

)

 

 

(53,173

)

 

 

(83,351

)

Total stockholders' equity

 

 

1,149,327

 

 

 

1,091,413

 

 

 

1,063,655

 

 

 

1,039,007

 

 

 

974,461

 

Total liabilities and stockholders' equity

 

$

8,637,118

 

 

$

8,557,017

 

 

$

8,446,662

 

 

$

8,468,678

 

 

$

8,416,162

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

 

15,104,381

 

 

 

14,945,598

 

 

 

14,930,549

 

 

 

14,894,209

 

 

 

14,757,565

 

Nicolet Bankshares, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Income (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

(In thousands, except per share data)

 

9/30/2024

 

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

9/30/2024

 

9/30/2023

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including loan fees

 

$

100,824

 

$

97,975

 

$

93,648

 

$

90,265

 

$

87,657

 

 

$

292,447

 

$

250,890

 

Taxable investment securities

 

 

5,211

 

 

5,056

 

 

4,557

 

 

4,737

 

 

4,351

 

 

 

14,824

 

 

13,445

 

Tax-exempt investment securities

 

 

1,095

 

 

1,152

 

 

1,238

 

 

1,394

 

 

1,424

 

 

 

3,485

 

 

4,637

 

Other interest income

 

 

5,492

 

 

4,695

 

 

4,588

 

 

7,149

 

 

6,452

 

 

 

14,775

 

 

10,345

 

Total interest income

 

 

112,622

 

 

108,878

 

 

104,031

 

 

103,545

 

 

99,884

 

 

 

325,531

 

 

279,317

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

42,060

 

 

41,386

 

 

38,990

 

 

36,583

 

 

34,964

 

 

 

122,436

 

 

89,241

 

Short-term borrowings

 

 

2

 

 

 

 

 

 

 

 

474

 

 

 

2

 

 

4,794

 

Long-term borrowings

 

 

2,194

 

 

2,150

 

 

2,234

 

 

2,680

 

 

2,972

 

 

 

6,578

 

 

8,048

 

Total interest expense

 

 

44,256

 

 

43,536

 

 

41,224

 

 

39,263

 

 

38,410

 

 

 

129,016

 

 

102,083

 

Net interest income

 

 

68,366

 

 

65,342

 

 

62,807

 

 

64,282

 

 

61,474

 

 

 

196,515

 

 

177,234

 

Provision for credit losses

 

 

750

 

 

1,350

 

 

750

 

 

1,000

 

 

450

 

 

 

2,850

 

 

3,990

 

Net interest income after provision for credit losses

 

 

67,616

 

 

63,992

 

 

62,057

 

 

63,282

 

 

61,024

 

 

 

193,665

 

 

173,244

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wealth management fee income

 

 

7,085

 

 

6,674

 

 

6,485

 

 

6,308

 

 

6,057

 

 

 

20,244

 

 

17,439

 

Mortgage income, net

 

 

2,853

 

 

2,634

 

 

1,364

 

 

1,856

 

 

2,020

 

 

 

6,851

 

 

5,308

 

Service charges on deposit accounts

 

 

1,913

 

 

1,813

 

 

1,581

 

 

1,475

 

 

1,492

 

 

 

5,307

 

 

4,501

 

Card interchange income

 

 

3,564

 

 

3,458

 

 

3,098

 

 

3,306

 

 

3,321

 

 

 

10,120

 

 

9,685

 

BOLI income

 

 

1,455

 

 

1,225

 

 

1,347

 

 

1,161

 

 

1,090

 

 

 

4,027

 

 

3,363

 

Asset gains (losses), net

 

 

1,177

 

 

616

 

 

1,909

 

 

5,947

 

 

31

 

 

 

3,702

 

 

(38,755

)

Deferred compensation plan asset market valuations

 

 

1,162

 

 

169

 

 

59

 

 

949

 

 

(457

)

 

 

1,390

 

 

988

 

LSR income, net

 

 

1,090

 

 

1,117

 

 

1,134

 

 

1,027

 

 

1,108

 

 

 

3,341

 

 

3,398

 

Other noninterest income

 

 

2,079

 

 

1,903

 

 

2,445

 

 

2,405

 

 

1,879

 

 

 

6,427

 

 

5,611

 

Total noninterest income

 

 

22,378

 

 

19,609

 

 

19,422

 

 

24,434

 

 

16,541

 

 

 

61,409

 

 

11,538

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel expense

 

 

28,937

 

 

26,285

 

 

26,510

 

 

26,937

 

 

23,944

 

 

 

81,732

 

 

72,172

 

Occupancy, equipment and office

 

 

8,826

 

 

8,681

 

 

8,944

 

 

9,567

 

 

9,027

 

 

 

26,451

 

 

26,655

 

Business development and marketing

 

 

1,823

 

 

2,040

 

 

2,142

 

 

1,854

 

 

1,869

 

 

 

6,005

 

 

5,936

 

Data processing

 

 

4,535

 

 

4,281

 

 

4,270

 

 

7,043

 

 

4,643

 

 

 

13,086

 

 

12,849

 

Intangibles amortization

 

 

1,694

 

 

1,762

 

 

1,833

 

 

1,842

 

 

1,986

 

 

 

5,289

 

 

6,230

 

FDIC assessments

 

 

990

 

 

990

 

 

1,033

 

 

950

 

 

1,500

 

 

 

3,013

 

 

3,049

 

Merger-related expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

189

 

Other noninterest expense

 

 

2,343

 

 

2,814

 

 

2,415

 

 

2,103

 

 

2,769

 

 

 

7,572

 

 

8,490

 

Total noninterest expense

 

 

49,148

 

 

46,853

 

 

47,147

 

 

50,296

 

 

45,738

 

 

 

143,148

 

 

135,570

 

Income before income tax expense

 

 

40,846

 

 

36,748

 

 

34,332

 

 

37,420

 

 

31,827

 

 

 

111,926

 

 

49,212

 

Income tax expense

 

 

8,330

 

 

7,475

 

 

6,542

 

 

6,759

 

 

14,669

 

 

 

22,347

 

 

18,357

 

Net income

 

$

32,516

 

$

29,273

 

$

27,790

 

$

30,661

 

$

17,158

 

 

$

89,579

 

$

30,855

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

2.16

 

$

1.96

 

$

1.86

 

$

2.07

 

$

1.16

 

 

$

5.99

 

$

2.10

 

Diluted

 

$

2.10

 

$

1.92

 

$

1.82

 

$

2.02

 

$

1.14

 

 

$

5.84

 

$

2.05

 

Common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average

 

 

15,052

 

 

14,937

 

 

14,907

 

 

14,823

 

 

14,740

 

 

 

14,966

 

 

14,716

 

Diluted weighted average

 

 

15,479

 

 

15,276

 

 

15,249

 

 

15,142

 

 

15,100

 

 

 

15,330

 

 

15,044

 

Nicolet Bankshares, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Financial Summary (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

(In thousands, except share & per share data)

 

9/30/2024

 

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

9/30/2024

 

9/30/2023

Selected Average Balances:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

6,542,532

 

 

$

6,496,732

 

 

$

6,398,838

 

 

$

6,263,971

 

 

$

6,230,336

 

 

$

6,479,598

 

 

$

6,223,396

 

Investment securities

 

 

873,212

 

 

 

881,190

 

 

 

884,775

 

 

 

897,437

 

 

 

962,607

 

 

 

879,701

 

 

 

1,177,762

 

Interest-earning assets

 

 

7,824,773

 

 

 

7,733,097

 

 

 

7,629,120

 

 

 

7,683,495

 

 

 

7,676,895

 

 

 

7,729,346

 

 

 

7,667,911

 

Cash and cash equivalents

 

 

431,632

 

 

 

374,176

 

 

 

364,375

 

 

 

558,473

 

 

 

513,250

 

 

 

390,213

 

 

 

283,032

 

Goodwill and other intangibles, net

 

 

390,453

 

 

 

392,171

 

 

 

393,961

 

 

 

395,158

 

 

 

397,052

 

 

 

392,189

 

 

 

399,100

 

Total assets

 

 

8,596,812

 

 

 

8,481,186

 

 

 

8,380,595

 

 

 

8,415,169

 

 

 

8,417,456

 

 

 

8,486,602

 

 

 

8,404,999

 

Deposits

 

 

7,247,321

 

 

 

7,183,777

 

 

 

7,112,971

 

 

 

7,189,650

 

 

 

7,156,577

 

 

 

7,181,597

 

 

 

7,052,978

 

Interest-bearing liabilities

 

 

5,653,259

 

 

 

5,658,642

 

 

 

5,509,882

 

 

 

5,358,445

 

 

 

5,385,292

 

 

 

5,607,430

 

 

 

5,329,540

 

Stockholders’ equity (common)

 

 

1,118,242

 

 

 

1,070,379

 

 

 

1,048,596

 

 

 

996,745

 

 

 

983,133

 

 

 

1,079,215

 

 

 

973,509

 

Selected Ratios: (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per common share

 

$

76.09

 

 

$

73.03

 

 

$

71.24

 

 

$

69.76

 

 

$

66.03

 

 

$

76.09

 

 

$

66.03

 

Tangible book value per common share (2)

 

$

50.29

 

 

$

46.84

 

 

$

44.91

 

 

$

43.28

 

 

$

39.18

 

 

$

50.29

 

 

$

39.18

 

Return on average assets

 

 

1.50

%

 

 

1.39

%

 

 

1.33

%

 

 

1.45

%

 

 

0.81

%

 

 

1.41

%

 

 

0.49

%

Return on average common equity

 

 

11.57

 

 

 

11.00

 

 

 

10.66

 

 

 

12.20

 

 

 

6.92

 

 

 

11.09

 

 

 

4.24

 

Return on average tangible common equity (2)

 

 

17.77

 

 

 

17.36

 

 

 

17.07

 

 

 

20.22

 

 

 

11.62

 

 

 

17.42

 

 

 

7.18

 

Average equity to average assets

 

 

13.01

 

 

 

12.62

 

 

 

12.51

 

 

 

11.84

 

 

 

11.68

 

 

 

12.72

 

 

 

11.58

 

Stockholders’ equity to assets

 

 

13.31

 

 

 

12.75

 

 

 

12.59

 

 

 

12.27

 

 

 

11.58

 

 

 

13.31

 

 

 

11.58

 

Tangible common equity to tangible assets (2)

 

 

9.21

 

 

 

8.57

 

 

 

8.33

 

 

 

7.98

 

 

 

7.21

 

 

 

9.21

 

 

 

7.21

 

Net interest margin

 

 

3.44

 

 

 

3.35

 

 

 

3.26

 

 

 

3.30

 

 

 

3.16

 

 

 

3.35

 

 

 

3.07

 

Efficiency ratio

 

 

54.57

 

 

 

55.24

 

 

 

58.34

 

 

 

60.41

 

 

 

58.27

 

 

 

55.98

 

 

 

59.16

 

Effective tax rate

 

 

20.39

 

 

 

20.34

 

 

 

19.06

 

 

 

18.06

 

 

 

46.09

 

 

 

19.97

 

 

 

37.30

 

Selected Asset Quality Information:

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

25,565

 

 

$

27,838

 

 

$

26,677

 

 

$

26,625

 

 

$

29,507

 

 

$

25,565

 

 

$

29,507

 

Other real estate owned

 

 

859

 

 

 

1,147

 

 

 

1,245

 

 

 

1,267

 

 

 

2,031

 

 

 

859

 

 

 

2,031

 

Nonperforming assets

 

$

26,424

 

 

$

28,985

 

 

$

27,922

 

 

$

27,892

 

 

$

31,538

 

 

$

26,424

 

 

$

31,538

 

Net loan charge-offs (recoveries)

 

$

379

 

 

$

283

 

 

$

13

 

 

$

550

 

 

$

101

 

 

$

675

 

 

$

319

 

Allowance for credit losses-loans to loans

 

 

1.00

%

 

 

1.00

%

 

 

1.01

%

 

 

1.00

%

 

 

1.01

%

 

 

1.00

%

 

 

1.01

%

Net charge-offs to average loans (1)

 

 

0.02

 

 

 

0.02

 

 

 

0.00

 

 

 

0.03

 

 

 

0.01

 

 

 

0.01

 

 

 

0.01

 

Nonperforming loans to total loans

 

 

0.39

 

 

 

0.43

 

 

 

0.42

 

 

 

0.42

 

 

 

0.47

 

 

 

0.39

 

 

 

0.47

 

Nonperforming assets to total assets

 

 

0.31

 

 

 

0.34

 

 

 

0.33

 

 

 

0.33

 

 

 

0.37

 

 

 

0.31

 

 

 

0.37

 

Stock Repurchase Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock repurchased ($) (3)

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

1,519

 

Common stock repurchased (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)

 

9/30/2024

 

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

Period End Loan Composition

 

 

 

 

 

 

 

 

 

 

Commercial & industrial

 

$

1,351,516

 

$

1,358,152

 

$

1,307,490

 

$

1,284,009

 

$

1,237,789

Owner-occupied commercial real estate (“CRE”)

 

 

920,533

 

 

941,137

 

 

955,786

 

 

956,594

 

 

971,397

Agricultural

 

 

1,261,152

 

 

1,224,885

 

 

1,190,371

 

 

1,161,531

 

 

1,108,261

Commercial

 

 

3,533,201

 

 

3,524,174

 

 

3,453,647

 

 

3,402,134

 

 

3,317,447

CRE investment

 

 

1,226,982

 

 

1,198,020

 

 

1,188,722

 

 

1,142,251

 

 

1,130,938

Construction & land development

 

 

231,694

 

 

247,565

 

 

241,730

 

 

310,110

 

 

326,747

Commercial real estate

 

 

1,458,676

 

 

1,445,585

 

 

1,430,452

 

 

1,452,361

 

 

1,457,685

Commercial-based loans

 

 

4,991,877

 

 

4,969,759

 

 

4,884,099

 

 

4,854,495

 

 

4,775,132

Residential construction

 

 

85,811

 

 

90,904

 

 

84,370

 

 

75,726

 

 

76,289

Residential first mortgage

 

 

1,194,574

 

 

1,190,790

 

 

1,167,069

 

 

1,167,109

 

 

1,136,748

Residential junior mortgage

 

 

223,456

 

 

218,512

 

 

206,434

 

 

200,884

 

 

195,432

Residential real estate

 

 

1,503,841

 

 

1,500,206

 

 

1,457,873

 

 

1,443,719

 

 

1,408,469

Retail & other

 

 

61,122

 

 

59,169

 

 

55,645

 

 

55,728

 

 

55,656

Retail-based loans

 

 

1,564,963

 

 

1,559,375

 

 

1,513,518

 

 

1,499,447

 

 

1,464,125

Total loans

 

$

6,556,840

 

$

6,529,134

 

$

6,397,617

 

$

6,353,942

 

$

6,239,257

 

 

 

 

 

 

 

 

 

 

 

Period End Deposit Composition

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

1,839,617

 

$

1,764,806

 

$

1,665,229

 

$

1,958,709

 

$

2,020,074

Interest-bearing demand

 

 

1,035,593

 

 

1,093,621

 

 

1,121,030

 

 

1,055,520

 

 

955,746

Money market

 

 

1,928,977

 

 

1,963,559

 

 

2,027,559

 

 

1,891,287

 

 

1,933,227

Savings

 

 

763,024

 

 

762,529

 

 

765,084

 

 

768,401

 

 

789,045

Time

 

 

1,692,786

 

 

1,656,563

 

 

1,586,830

 

 

1,523,883

 

 

1,484,296

Total deposits

 

$

7,259,997

 

$

7,241,078

 

$

7,165,732

 

$

7,197,800

 

$

7,182,388

Brokered transaction accounts

 

$

159,547

 

$

250,109

 

$

265,818

 

$

166,861

 

$

146,517

Brokered time deposits

 

 

549,907

 

 

557,657

 

 

517,190

 

 

448,582

 

 

457,433

Total brokered deposits

 

$

709,454

 

$

807,766

 

$

783,008

 

$

615,443

 

$

603,950

Customer transaction accounts

 

$

5,407,664

 

$

5,334,406

 

$

5,313,085

 

$

5,507,056

 

$

5,551,575

Customer time deposits

 

 

1,142,879

 

 

1,098,906

 

 

1,069,639

 

 

1,075,301

 

 

1,026,863

Total customer deposits (core)

 

$

6,550,543

 

$

6,433,312

 

$

6,382,724

 

$

6,582,357

 

$

6,578,438

Nicolet Bankshares, Inc.

 

 

 

 

 

 

 

 

 

 

Net Interest Income and Net Interest Margin Analysis (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

September 30, 2024

 

June 30, 2024

 

September 30, 2023

 

 

Average

 

 

 

Average

 

Average

 

 

 

Average

 

Average

 

 

 

Average

(In thousands)

 

Balance

 

Interest

 

Rate

 

Balance

 

Interest

 

Rate

 

Balance

 

Interest

 

Rate

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans (1) (2)

 

$

6,542,532

 

$

100,962

 

 

6.06

%

 

$

6,496,732

 

$

98,086

 

5.99

%

 

$

6,230,336

 

$

87,701

 

 

5.54

%

Investment securities (2)

 

 

873,212

 

 

6,666

 

 

3.05

%

 

 

881,190

 

 

6,579

 

2.99

%

 

 

962,607

 

 

6,235

 

 

2.59

%

Other interest-earning assets

 

 

409,029

 

 

5,492

 

 

5.27

%

 

 

355,175

 

 

4,695

 

5.24

%

 

 

483,952

 

 

6,452

 

 

5.23

%

Total interest-earning assets

 

 

7,824,773

 

$

113,120

 

 

5.68

%

 

 

7,733,097

 

$

109,360

 

5.61

%

 

 

7,676,895

 

$

100,388

 

 

5.15

%

Other assets, net

 

 

772,039

 

 

 

 

 

 

748,089

 

 

 

 

 

 

740,561

 

 

 

 

Total assets

 

$

8,596,812

 

 

 

 

 

$

8,481,186

 

 

 

 

 

$

8,417,456

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing core deposits

 

$

4,723,464

 

$

32,952

 

 

2.78

%

 

$

4,665,195

 

$

31,713

 

2.73

%

 

$

4,491,858

 

$

27,628

 

 

2.44

%

Brokered deposits

 

 

768,058

 

 

9,108

 

 

4.72

%

 

 

831,100

 

 

9,673

 

4.68

%

 

 

651,745

 

 

7,336

 

 

4.47

%

Total interest-bearing deposits

 

 

5,491,522

 

 

42,060

 

 

3.05

%

 

 

5,496,295

 

 

41,386

 

3.03

%

 

 

5,143,603

 

 

34,964

 

 

2.70

%

Wholesale funding

 

 

161,737

 

 

2,196

 

 

5.31

%

 

 

162,347

 

 

2,150

 

5.24

%

 

 

241,689

 

 

3,446

 

 

5.58

%

Total interest-bearing liabilities

 

 

5,653,259

 

$

44,256

 

 

3.11

%

 

 

5,658,642

 

$

43,536

 

3.09

%

 

 

5,385,292

 

$

38,410

 

 

2.83

%

Noninterest-bearing demand deposits

 

 

1,755,799

 

 

 

 

 

 

1,687,482

 

 

 

 

 

 

2,012,974

 

 

 

 

Other liabilities

 

 

69,512

 

 

 

 

 

 

64,683

 

 

 

 

 

 

36,057

 

 

 

 

Stockholders' equity

 

 

1,118,242

 

 

 

 

 

 

1,070,379

 

 

 

 

 

 

983,133

 

 

 

 

Total liabilities and stockholders' equity

 

$

8,596,812

 

 

 

 

 

$

8,481,186

 

 

 

 

 

$

8,417,456

 

 

 

 

Net interest income and rate spread

 

 

 

$

68,864

 

 

2.57

%

 

 

 

$

65,824

 

2.52

%

 

 

 

$

61,978

 

 

2.32

%

Net interest margin

 

 

 

 

 

3.44

%

 

 

 

 

 

3.35

%

 

 

 

 

 

3.16

%

Loan purchase accounting accretion (3)

 

 

 

$

1,527

 

 

0.09

%

 

 

 

$

1,527

 

0.08

%

 

 

 

$

1,637

 

 

0.10

%

Loan nonaccrual interest (4)

 

 

 

$

(48

)

 

0.00

%

 

 

 

$

329

 

0.02

%

 

 

 

$

(257

)

 

(0.02

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended

 

 

 

 

 

 

 

 

September 30, 2024

 

September 30, 2023

 

 

 

 

 

 

 

 

Average

 

 

 

Average

 

Average

 

 

 

Average

 

 

 

 

 

 

(In thousands)

 

Balance

 

Interest

 

Rate

 

Balance

 

Interest

 

Rate

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans (1) (2)

 

$

6,479,598

 

$

292,792

 

 

5.95

%

 

$

6,223,396

 

$

251,019

 

5.33

%

 

 

 

 

 

 

Investment securities (2)

 

 

879,701

 

 

19,442

 

 

2.95

%

 

 

1,177,762

 

 

19,575

 

2.22

%

 

 

 

 

 

 

Other interest-earning assets

 

 

370,047

 

 

14,775

 

 

5.26

%

 

 

266,753

 

 

10,345

 

5.13

%

 

 

 

 

 

 

Total interest-earning assets

 

 

7,729,346

 

$

327,009

 

 

5.58

%

 

 

7,667,911

 

$

280,939

 

4.85

%

 

 

 

 

 

 

Other assets, net

 

 

757,256

 

 

 

 

 

 

737,088

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

8,486,602

 

 

 

 

 

$

8,404,999

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing core deposits

 

$

4,684,586

 

$

95,921

 

 

2.74

%

 

$

4,365,843

 

$

69,943

 

2.14

%

 

 

 

 

 

 

Brokered deposits

 

 

759,791

 

 

26,515

 

 

4.66

%

 

 

619,870

 

 

19,298

 

4.16

%

 

 

 

 

 

 

Total interest-bearing deposits

 

 

5,444,377

 

 

122,436

 

 

3.00

%

 

 

4,985,713

 

 

89,241

 

2.39

%

 

 

 

 

 

 

Wholesale funding

 

 

163,053

 

 

6,580

 

 

5.30

%

 

 

343,827

 

 

12,842

 

4.93

%

 

 

 

 

 

 

Total interest-bearing liabilities

 

 

5,607,430

 

$

129,016

 

 

3.07

%

 

 

5,329,540

 

$

102,083

 

2.56

%

 

 

 

 

 

 

Noninterest-bearing demand deposits

 

 

1,737,220

 

 

 

 

 

 

2,067,265

 

 

 

 

 

 

 

 

 

 

Other liabilities

 

 

62,737

 

 

 

 

 

 

34,685

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

1,079,215

 

 

 

 

 

 

973,509

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

8,486,602

 

 

 

 

 

$

8,404,999

 

 

 

 

 

 

 

 

 

 

Net interest income and rate spread

 

 

 

$

197,993

 

 

2.51

%

 

 

 

$

178,856

 

2.29

%

 

 

 

 

 

 

Net interest margin

 

 

 

 

 

3.35

%

 

 

 

 

 

3.07

%

 

 

 

 

 

 

Loan purchase accounting accretion (3)

 

 

 

$

4,582

 

 

0.09

%

 

 

 

$

4,908

 

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 Nine Months Ended

(In thousands, except per share data)

 

9/30/2024

 

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

9/30/2024

 

9/30/2023

Adjusted net income reconciliation: (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

 

$

32,516

 

 

$

29,273

 

 

$

27,790

 

 

$

30,661

 

 

$

17,158

 

 

$

89,579

 

 

$

30,855

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision expense (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,340

Assets (gains) losses, net (3)

 

 

(1,177

)

 

 

(616

)

 

 

(1,909

)

 

 

(5,947

)

 

 

(31

)

 

 

(3,702

)

 

 

38,755

Merger-related expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

189

Contract termination charge

 

 

 

 

 

 

 

 

 

 

 

2,689

 

 

 

 

 

 

 

 

 

Adjustments subtotal

 

 

(1,177

)

 

 

(616

)

 

 

(1,909

)

 

 

(3,258

)

 

 

(31

)

 

 

(3,702

)

 

 

41,284

Tax on Adjustments (4)

 

 

(230

)

 

 

(120

)

 

 

(372

)

 

 

(635

)

 

 

(6

)

 

 

(722

)

 

 

8,050

Tax - Wisconsin Tax Law Change (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,151

 

 

 

 

 

 

9,118

Adjusted net income (Non-GAAP)

 

$

31,569

 

 

$

28,777

 

 

$

26,253

 

 

$

28,038

 

 

$

23,284

 

 

$

86,599

 

 

$

73,207

Diluted earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share (GAAP)

 

$

2.10

 

 

$

1.92

 

 

$

1.82

 

 

$

2.02

 

 

$

1.14

 

 

$

5.84

 

 

$

2.05

Adjusted Diluted earnings per common share (Non-GAAP)

 

$

2.04

 

 

$

1.88

 

 

$

1.72

 

 

$

1.85

 

 

$

1.54

 

 

$

5.65

 

 

$

4.87

Tangible assets: (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

8,637,118

 

 

$

8,557,017

 

 

$

8,446,662

 

 

$

8,468,678

 

 

$

8,416,162

 

 

 

 

 

Goodwill and other intangibles, net

 

 

389,727

 

 

 

391,421

 

 

 

393,183

 

 

 

394,366

 

 

 

396,208

 

 

 

 

 

Tangible assets

 

$

8,247,391

 

 

$

8,165,596

 

 

$

8,053,479

 

 

$

8,074,312

 

 

$

8,019,954

 

 

 

 

 

Tangible common equity: (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity (common)

 

$

1,149,327

 

 

$

1,091,413

 

 

$

1,063,655

 

 

$

1,039,007

 

 

$

974,461

 

 

 

 

 

Goodwill and other intangibles, net

 

 

389,727

 

 

 

391,421

 

 

 

393,183

 

 

 

394,366

 

 

 

396,208

 

 

 

 

 

Tangible common equity

 

$

759,600

 

 

$

699,992

 

 

$

670,472

 

 

$

644,641

 

 

$

578,253

 

 

 

 

 

Tangible average common equity: (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average stockholders’ equity (common)

 

$

1,118,242

 

 

$

1,070,379

 

 

$

1,048,596

 

 

$

996,745

 

 

$

983,133

 

 

$

1,079,215

 

 

$

973,509

Average goodwill and other intangibles, net

 

 

390,453

 

 

 

392,171

 

 

 

393,961

 

 

 

395,158

 

 

 

397,052

 

 

 

392,189

 

 

 

399,100

Average tangible common equity

 

$

727,789

 

 

$

678,208

 

 

$

654,635

 

 

$

601,587

 

 

$

586,081

 

 

$

687,026

 

 

$

574,409

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.

 

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