Nicolet Bankshares, Inc. Announces Third Quarter 2021 Earnings

Rhea-AI Summary

Nicolet Bankshares reported Q3 2021 net income of $7.8 million ($0.73 per share), down from $18.3 million in Q2 2021 and $18.1 million in Q3 2020. For the first nine months, net income reached $44.3 million, up from $42.1 million YoY. Key merger with Mackinac Financial added $1.5 billion in assets and $229 million total purchase price. Loans increased by $0.7 billion and deposits by $1.5 billion. Noninterest income declined 31% compared to Q2 2021. The merger with County Bancorp was approved, expected to close on December 3, 2021.

Positive

• Net income for 9 months increased to $44.3 million from $42.1 million YoY.
• Organic loan growth pacing at 7.5% annualized.
• Merger with Mackinac expanded market presence significantly, adding $1.5 billion in assets.

Negative

• Net income for Q3 2021 decreased significantly by 57% compared to Q2 2021.
• Noninterest income fell by 31% from Q2 2021.
• Net interest margin decreased to 2.94%, down 51 basis points from Q2 2021.

GREEN BAY, Wis., Oct. 19, 2021 /PRNewswire/ -- Nicolet Bankshares, Inc. (NASDAQ: NCBS) ("Nicolet") announced third quarter 2021 net income of $7.8 million and earnings per diluted common share of $0.73, compared to $18.3 million and $1.77 for second quarter 2021, and $18.1 million and $1.72 for third quarter 2020, respectively.  Annualized quarterly return on average assets was 0.59%, 1.62% and 1.55%, for third quarter 2021, second quarter 2021 and third quarter 2020, respectively.

Net income for the nine months ended September 30, 2021 was $44.3 million and earnings per diluted common share was $4.22, compared to net income of $42.1 million and earnings per diluted common share of $3.97 for the first nine months of 2020.  Annualized return on average assets was 1.24% and 1.35% for the first nine months of 2021 and 2020, respectively.

On September 3, 2021, Nicolet completed its merger with Mackinac Financial Corporation ("Mackinac"), pursuant to the terms of the definitive merger agreement dated April 12, 2021, at which time Mackinac merged with and into Nicolet, expanding Nicolet prominently into Northern Michigan and the Upper Peninsula of Michigan, and adding to Nicolet's presence in upper northeastern Wisconsin.  Mackinac shareholders received fixed consideration of 0.22 shares of Nicolet common stock and $4.64 in cash for each share of Mackinac common stock owned, resulting in the issuance of 2.3 million shares of Nicolet common stock for stock consideration of $180 million and cash consideration of $49 million, or a total purchase price of $229 million.  Upon consummation, Mackinac added total assets of $1.5 billion, loans of $0.9 billion, deposits of $1.4 billion and preliminary goodwill of $92 million. 

"We fully expected this to be a noisy quarter from a financial perspective with the closing of the Mackinac acquisition, and the financial results certainly proved that to be true.  However, we view our acquisitions as long-term investments in the Nicolet franchise, which helps dampen some of the noise. Our integration team delivered another solid performance of combining two banks.  We are especially pleased with the core performance of the bank this quarter.  Our people did a great job of serving our customers without being distracted by the Mackinac integration.  We remain focused on introducing our brand to new communities, introducing our culture to new employees, and operating an outstanding community bank," said Mike Daniels, President and CEO of Nicolet.

"Our organic loan growth is pacing at 7.5% annualized, and continues to stay ahead of our PPP forgiveness activity.  Our credit metrics, including the addition of Mackinac, remain pristine and reflective of our strong credit culture," Daniels said.  "We continue to focus on capital management, and although we were out of the market for about half of the quarter due to our M&A activity and related shareholder meetings, we repurchased $17.1 million or 233,594 of our shares through our repurchase program."

"The merger, while an exciting part of our business model, created some disruption in our reported earnings performance; however, internally we continue to measure and monitor these results to make sure we are remaining true to our commitment to provide superior shareholder return," commented Bob Atwell, Executive Chairman of Nicolet. 

Balance Sheet Review
At September 30, 2021, period end assets were $6.4 billion, an increase of $1.8 billion (40%) from June 30, 2021, largely due to the acquisition of Mackinac, which added $1.5 billion of assets at acquisition.  Total loans increased $0.7 billion from June 30, 2021, with Mackinac adding loans of $0.9 billion at acquisition, partly offset by the transfer of $0.2 billion of loans to other assets held for sale in anticipation of the previously announced sale of the Birmingham, Michigan branch.  Total deposits of $5.4 billion at September 30, 2021, increased $1.5 billion (38%) from June 30, 2021, largely due to the acquisition of Mackinac.  Total capital was $729 million at September 30, 2021, an increase of $170 million since June 30, 2021, mostly due to the acquisition of Mackinac. For the quarter ended September 30, 2021, Nicolet repurchased 233,594 shares at a total cost of $17.1 million, or an average per share cost of $73.31.

During 2020, we originated 2,725 PPP loans totaling $351 million, bearing a 1% contractual rate, and earned a $12.3 million fee. During 2021, under the latest round of the SBA's program, Nicolet originated 2,205 PPP loans totaling $160 million and earned a $9.3 million fee. Of the total fees, $5.7 million was accreted into interest in 2020 and $9.8 million was accreted in the first nine months of 2021.  At September 30, 2021, the net carrying value of all remaining PPP loans was $72 million (2% of total loans), a $78 million decrease from June 30, 2021, with the $28 million added from the Mackinac acquisition more than offset by continued loan forgiveness.      

Asset Quality
Nonperforming assets were $21 million at September 30, consisting of $17 million of nonaccrual loans and $4 million of other real estate owned (primarily closed bank branch properties yet to be sold), and representing 0.33% of total assets, compared to $10 million or 0.21% at June 30, 2021, and $12 million or 0.25% at September 30, 2020.  Since the prior quarter, the allowance for credit losses-loans increased $6 million to $38 million, mostly due to the Day 2 allowance increase from the acquisition of Mackinac.  At September 30, 2021, the allowance represented 1.09% of total loans.

Income Statement Review
Net income for third quarter 2021 was $7.8 million, compared to net income of $18.3 million for second quarter 2021 and net income of $18.1 million for third quarter 2020.

Net interest income was $35.2 million for third quarter 2021, $0.4 million (1%) lower than $35.6 million for second quarter 2021, comprised of $0.4 million higher interest income more than offset by $0.8 million higher interest expense.  Between the sequential quarters, the lower net interest income included favorable volume variances (up $1.8 million) and one additional earning day (up $0.3 million), offset by unfavorable rate changes (down $2.5 million).   

Average interest-earning assets of $4.7 billion were up $625 million from second quarter 2021, with higher average loans (up $207 million, mostly timing of the Mackinac acquisition) and continued growth in other interest-earning assets (up $344 million, mostly cash), resulting in a shift in the mix of average interest-earning assets to lower yielding assets.  Other interest-earning assets increased to 22% of total interest-earning assets for third quarter 2021 (compared to 17% for second quarter 2021), while the percentage of loans declined to represent 65% of total interest-earning assets for third quarter 2021 (compared to 70% in the prior quarter).  Average interest-bearing liabilities of $3.1 billion increased $408 million from second quarter 2021, with higher average interest-bearing deposits (up $308 million, mostly timing of the Mackinac acquisition) and an increase in other interest-bearing liabilities (up $100 million due to the subordinated notes issuance in July). 

The net interest margin for third quarter 2021 was 2.94%, down 51bps from 3.45% for second quarter 2021. The yield on interest-earning assets decreased 48bps (to 3.24%), mostly due to the change in mix of interest-earnings assets, including a higher proportion of lower yielding cash assets, continued PPP loan forgiveness, and lower yield on all other loans (down 13bps from the prior quarter, pressured by new or renewed loans in the low rate environment).  The cost of funds increased 5bps (to 0.46%) for third quarter 2021, attributable mainly to the $100 million subordinated notes issued in July.

Noninterest income was $14.0 million for third quarter 2021, down $6.2 million (31%) compared to second quarter 2021. Excluding net asset gains (losses), noninterest income was $15.2 million, down $0.8 million (5%) from second quarter 2021.  Net mortgage income of $4.8 million remains strong, though continues to slow from the record levels experienced in 2020. Trust services fee income and brokerage fee income combined increased $0.3 million (6%) over second quarter 2021.  Net asset losses were $1.2 million (comprised primarily of market losses on an equity investment), compared to net asset gains of $4.2 million in second quarter 2021 (comprised primarily of market gains on the same equity investment's initial public offering during the quarter). All remaining noninterest income categories combined decreased $0.3 million from second quarter 2021 largely due to the favorable resolution of an early lease termination in the prior quarter. 

Noninterest expense of $33.1 million increased $2.3 million (8%) from second quarter 2021. Personnel expense decreased $0.2 million (1%) from second quarter 2021, while all non-personnel expenses combined increased $2.5 million (18%) over second quarter 2021.  The increase in non-personnel expenses was largely due to higher merger-related expense, a $0.9 million impairment charge for the previously announced closure of five legacy Nicolet branches, and a larger operating base, partly offset by a $2 million contract termination charge incurred in second quarter. 

On June 22, 2021, we entered into a definitive merger agreement with County Bancorp, Inc. ("County" (NASDAQ: ICBK)) pursuant to which County will merge with and into Nicolet, to become the premier agriculture lender throughout Wisconsin.  Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, County shareholders will have the right to receive for each share of County common stock, at the election of each holder and subject to proration, either $37.18 in cash or 0.48 shares of Nicolet common stock.  County shareholder elections will be prorated to ensure the total consideration will consist of approximately 20% cash and approximately 80% common stock.  At June 30, 2021, County had total assets of $1.5 billion, loans of $1.0 billion, deposits of $1.1 billion and equity of $175 million.  As of September 7, 2021, Nicolet had received all regulatory approvals for the County merger.  On October 5, 2021, the shareholders of both County and Nicolet approved the merger at special meetings of their respective shareholders held on that date. Nicolet expects to close the merger on December 3, 2021, subject to customary closing conditions.

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 and consumer banking to wealth management and retirement plan services.  Founded in Green Bay in 2000, Nicolet National Bank operates branches in Northeast and Central Wisconsin, Northern Michigan and the upper peninsula of Michigan.  More information can be found at www.nicoletbank.com.

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 federal securities law. Such statements include, but are not limited to, statements about Nicolet's business plans, objectives, expectations and intentions, including without limitation our continuing organic loan growth, as well as certain plans, expectations, goals, projections and benefits relating to the September 2021 merger of Mackinac into Nicolet and the proposed merger between Nicolet and County, all of which are subject to numerous assumptions, risks and uncertainties. Words or phrases such as "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, are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

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. In addition to factors disclosed in reports filed by Nicolet with the SEC, risks and uncertainties, including but not limited to risks and uncertainties for Nicolet with respect to its completed merger with Mackinac and its proposed merger with County, that may cause actual results or outcomes to differ materially from those anticipated include, but are not limited to: (1) the possibility that any of the anticipated benefits of either or both of the mergers will not be realized or will not be realized within the expected time period; (2) the risk that integration of Mackinac's operations and/or County's operations with those of Nicolet will be materially delayed or will be more costly or difficult than expected; (3) the inability of Nicolet and/or County to meet expectations regarding the timing of their proposed merger; (4) changes to tax legislation and their potential effects on the accounting for the mergers; (5) the failure of Nicolet and/or County to satisfy any remaining conditions to completion of their proposed merger; (6) the failure of the proposed merger with County to close for any other reason; (7) diversion of management's attention from ongoing business operations and opportunities due to the completed merger with Mackinac and the proposed merger with County; (8) the challenges of integrating and retaining key employees of Nicolet, including those who joined Nicolet from Mackinac, as well as key employees of County; (9) the effect of the announcements and completion of the mergers on Nicolet's, Mackinac's, County's, and/or the combined companies' respective customer and employee relationships and operating results; (10) the possibility that the Mackinac integration, as well as the proposed merger with and integration of County, may be more expensive and time-consuming to complete than anticipated, including as a result of unexpected factors or events; (11) dilution caused by Nicolet's issuance of additional shares of Nicolet common stock in connection with the completed merger with Mackinac and the proposed merger with County; (12) the magnitude and duration of the COVID pandemic and its impact on the global economy and financial market conditions and the business, results of operations and financial condition of Nicolet, County, and the combined company; (13) changes in consumer demand for financial services; and (14) general competitive, economic, political and market conditions and fluctuations.  Please refer to each of Nicolet's, Mackinac's, and County's Annual Report on Form 10-K for the year ended December 31, 2020, as well as their other filings with the SEC, for a more detailed discussion of risks, uncertainties and factors that could cause actual results to differ from those discussed in the forward-looking statements.

The COVID pandemic is adversely affecting us, our customers, counterparties, employees, and third-party service providers, and the ultimate extent of the impacts on our business, financial position, results of operations, liquidity, and prospects is uncertain. Continued deterioration in general business and economic conditions or turbulence in domestic financial markets could adversely affect Nicolet's revenues and the values of its assets and liabilities, lead to a tightening of credit, and increase stock price volatility. In addition, the COVID pandemic may result in changes to statutes, regulations, or regulatory policies or practices that could affect Nicolet in substantial and unpredictable ways.

All forward-looking statements included in this communication are made as of the date hereof and are based on information available to management at that time. Except as required by law, Nicolet does not assume any obligation to update any forward-looking statement to reflect events or circumstances that occur after the date the forward-looking statements were made.

Important Information for Investors
This communication relates to the proposed merger transaction involving Nicolet and County. In connection with the proposed merger, Nicolet has filed a joint proxy statement-prospectus on Form S-4 and other relevant documents concerning the merger with the Securities and Exchange Commission (the "SEC"). BEFORE MAKING ANY INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT-PROSPECTUS AND ANY OTHER DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE IN THE JOINT PROXY STATEMENT-PROSPECTUS BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT NICOLET, COUNTY, AND THE PROPOSED MERGER. Investors may obtain copies of the joint proxy statement-prospectus and other relevant documents free of charge at the SEC's website (www.sec.gov). Copies of the documents filed with the SEC by Nicolet are available free of charge on Nicolet's website at www.nicoletbank.com. Copies of the documents filed with the SEC by County are available free of charge on County's website at Investors.ICBK.com/documents.

No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Nicolet Bankshares, Inc.
Consolidated Balance Sheets (Unaudited)
		At or for the Three Months Ended
		09/30/2021				06/30/2021				03/31/2021				12/31/2020				09/30/2020
(In thousands, except share data)
Assets:
Cash and due from banks		$	217,608			$	77,634			$	61,295			$	88,460			$	67,922
Interest-earning deposits		1,132,997				714,772				674,559				714,399				785,642
Cash and cash equivalents		1,350,605				792,406				735,854				802,859				853,564
Certificates of deposit in other banks		24,079				23,387				27,296				29,521				32,969
Securities available for sale, at fair value		715,942				562,028				558,229				539,337				535,351
Securities held to maturity, at amortized cost		49,063				—				—				—				—
Other investments		38,602				33,440				28,248				27,619				26,636
Loans held for sale		16,784				11,235				16,883				21,450				8,384
Other assets held for sale		177,627				—				—				—				—
Loans		3,533,198				2,820,331				2,846,351				2,789,101				2,908,793
Allowance for credit losses - loans		(38,399)				(32,561)				(32,626)				(32,173)				(31,388)
Loans, net		3,494,799				2,787,770				2,813,725				2,756,928				2,877,405
Premises and equipment, net		83,513				61,618				59,413				59,944				64,184
Bank owned life insurance ("BOLI")		100,690				84,347				83,788				83,262				82,905
Goodwill and other intangibles, net		269,954				173,711				174,501				175,353				176,213
Accrued interest receivable and other assets		86,162				57,405				45,867				55,516				48,764
Total assets		$	6,407,820			$	4,587,347			$	4,543,804			$	4,551,789			$	4,706,375
Liabilities and Stockholders' Equity
Liabilities:
Noninterest-bearing demand deposits		$	1,852,119			$	1,324,994			$	1,216,477			$	1,212,787			$	1,135,384
Interest-bearing deposits		3,576,655				2,614,028				2,684,117				2,697,612				2,577,424
Total deposits		5,428,774				3,939,022				3,900,594				3,910,399				3,712,808
Short-term borrowings		—				—				—				—				—
Long-term borrowings		144,233				45,108				43,988				53,869				405,826
Other liabilities held for sale		47,496				—				—				—				—
Accrued interest payable and other liabilities		58,039				43,822				49,176				48,332				48,872
Total liabilities		5,678,542				4,027,952				3,993,758				4,012,600				4,167,506
Stockholders' Equity:
Common stock		120				98				100				100				102
Additional paid-in capital		425,367				261,096				271,388				273,390				289,536
Retained earnings		297,299				289,475				271,191				252,952				234,965
Accumulated other comprehensive income (loss)		6,492				8,726				7,367				12,747				13,465
Total Nicolet stockholders' equity		729,278				559,395				550,046				539,189				538,068
Noncontrolling interest		—				—				—				—				801
Total liabilities, noncontrolling interest, and  stockholders' equity		$	6,407,820			$	4,587,347			$	4,543,804			$	4,551,789			$	4,706,375
Common shares outstanding		11,952,438				9,843,141				9,987,897				10,011,342				10,196,228

Nicolet Bankshares, Inc.
Consolidated Statements of Income (Unaudited)
		At or for the Three Months Ended																				At or for the Nine Months Ended
		09/30/2021				06/30/2021				03/31/2021				12/31/2020				09/30/2020				9/30/2021				9/30/2020
(In thousands, except per share data)
Interest income:
Loans, including loan fees		$	35,294			$	35,111			$	33,862			$	34,781			$	34,047			$	104,267			$	101,591
Taxable investment securities		2,061				2,060				1,814				2,003				2,001				5,935				6,115
Tax-exempt investment securities		517				520				545				559				542				1,582				1,542
Other interest income		869				616				655				694				680				2,140				1,917
Total interest income		38,741				38,307				36,876				38,037				37,270				113,924				111,165
Interest expense:
Deposits		2,444				2,433				2,922				3,445				3,784				7,799				13,196
Short-term borrowings		—				—				—				1				—				—				65
Long-term borrowings		1,113				303				313				573				926				1,729				2,584
Total interest expense		3,557				2,736				3,235				4,019				4,710				9,528				15,845
Net interest income		35,184				35,571				33,641				34,018				32,560				104,396				95,320
Provision for credit losses		6,000				—				500				1,300				3,000				6,500				9,000
Net interest income after provision for credit losses		29,184				35,571				33,141				32,718				29,560				97,896				86,320
Noninterest income:
Trust services fee income		2,043				1,906				1,775				1,746				1,628				5,724				4,717
Brokerage fee income		3,154				2,991				2,793				2,673				2,489				8,938				7,080
Mortgage income, net		4,808				5,599				7,230				7,842				9,675				17,637				21,965
Service charges on deposit accounts		1,314				1,136				1,091				1,133				1,037				3,541				3,075
Card interchange income		2,299				2,266				1,927				1,922				1,877				6,492				5,076
BOLI income		572				559				527				936				531				1,658				1,774
Asset gains (losses), net		(1,187)				4,192				711				(620)				217				3,716				(1,185)
Other noninterest income		993				1,529				1,072				1,247				1,237				3,594				3,245
Total noninterest income		13,996				20,178				17,126				16,879				18,691				51,300				45,747
Noninterest expense:
Personnel expense		16,927				17,084				15,116				15,244				14,072				49,127				41,877
Occupancy, equipment and office		5,749				4,053				4,137				4,102				4,051				13,939				12,616
Business development and marketing		1,654				1,210				989				713				810				3,853				4,683
Data processing		2,939				2,811				2,658				2,921				2,612				8,408				7,574
Intangibles amortization		758				790				852				860				834				2,400				2,707
FDIC assessments		480				480				595				360				347				1,555				347
Merger-related expense		2,793				656				—				167				151				3,449				853
Other noninterest expense		1,761				3,663				1,734				1,000				808				7,158				4,695
Total noninterest expense		33,061				30,747				26,081				25,367				23,685				89,889				75,352
Income before income tax expense		10,119				25,002				24,186				24,230				24,566				59,307				56,715
Income tax expense		2,295				6,718				5,947				6,145				6,434				14,960				14,331
Net income		7,824				18,284				18,239				18,085				18,132				44,347				42,384
Net income attributable to noncontrolling interest		—				—				—				98				30				—				249
Net income attributable to Nicolet		$	7,824			$	18,284			$	18,239			$	17,987			$	18,102			$	44,347			$	42,135
Earnings per common share:
Basic		$	0.75			$	1.85			$	1.82			$	1.79			$	1.75			$	4.39			$	4.04
Diluted		$	0.73			$	1.77			$	1.75			$	1.74			$	1.72			$	4.22			$	3.97
Common shares outstanding:
Basic weighted average		10,392				9,902				9,998				10,074				10,349				10,098				10,426
Diluted weighted average		10,776				10,326				10,403				10,350				10,499				10,503				10,605

Nicolet Bankshares, Inc.
Consolidated Financial Summary (Unaudited)
		At or for the Three Months Ended																				At or for the Nine Months Ended
		09/30/2021				6/30/2021				3/31/2021				12/31/2020				9/30/2020				9/30/2021				9/30/2020
(In thousands, except share & per share data)
Selected Average Balances:
Loans		$	3,076,422			$	2,869,105			$	2,825,664			$	2,868,827			$	2,871,256			$	2,924,648			$	2,760,309
Investment securities		611,870				537,632				528,342				520,867				496,153				559,588				479,916
Interest-earning assets		4,734,768				4,109,394				4,089,603				4,091,460				4,216,106				4,313,618				3,768,676
Cash and cash equivalents		1,100,153				716,873				750,075				714,031				864,295				856,983				540,552
Goodwill and other intangibles, net		201,748				174,026				174,825				175,678				169,353				183,632				166,493
Total assets		5,246,193				4,527,839				4,514,927				4,515,226				4,633,359				4,765,665				4,167,902
Deposits		4,448,468				3,897,797				3,875,205				3,793,430				3,636,260				4,075,923				3,320,994
Interest-bearing liabilities		3,093,031				2,684,871				2,764,232				2,744,578				2,933,737				2,848,583				2,632,280
Stockholders' equity (common)		608,946				550,974				544,541				537,920				537,826				568,390				523,904
Selected Ratios: (1)
Book value per common share		$	61.01			$	56.83			$	55.07			$	53.86			$	52.77			$	61.01			$	52.77
Tangible book value per common share (2)		$	38.43			$	39.18			$	37.60			$	36.34			$	35.49			$	38.43			$	35.49
Return on average assets		0.59		%		1.62		%		1.64		%		1.58		%		1.55		%		1.24		%		1.35		%
Return on average common equity		5.10				13.31				13.58				13.30				13.39				10.43				10.74
Return on average tangible common equity (2)		7.62				19.46				20.01				19.75				19.54				15.41				15.75
Average equity to average assets		11.61				12.17				12.06				11.91				11.61				11.93				12.57
Stockholders' equity to assets		11.38				12.19				12.11				11.85				11.43				11.38				11.43
Tangible common equity to tangible assets (2)		7.48				8.74				8.60				8.31				7.99				7.48				7.99
Net interest margin		2.94				3.45				3.31				3.29				3.06				3.22				3.35
Efficiency ratio		65.32				59.37				51.84				48.99				46.18				58.86				52.71
Effective tax rate		22.68				26.87				24.59				25.36				26.19				25.22				25.27
Selected Asset Quality Information:
Nonaccrual loans		$	16,715			$	6,932			$	8,965			$	9,455			$	10,997			$	16,715			$	10,997
Other real estate owned		4,469				2,895				3,797				3,608				1,000				4,469				1,000
Nonperforming assets		$	21,184			$	9,827			$	12,762			$	13,063			$	11,997			$	21,184			$	11,997
Net loan charge-offs (recoveries)		$	58			$	65			$	47			$	515			$	743			$	170			$	869
Allowance for credit losses-loans to loans		1.09		%		1.15		%		1.15		%		1.15		%		1.08		%		1.09		%		1.08		%
Net loan charge-offs to average loans (1)		0.01				0.01				0.01				0.07				0.10				0.01				0.04
Nonperforming loans to total loans		0.47				0.25				0.31				0.34				0.38				0.47				0.38
Nonperforming assets to total assets		0.33				0.21				0.28				0.29				0.25				0.33				0.25
Stock Repurchase Information:
Common stock repurchased (dollars) (3)		$	17,125			$	12,453			$	4,102			$	12,909			$	13,732			$	33,680			$	27,635
Common stock repurchased (full shares) (3)		233,594				157,418				56,886				205,001				234.914				447,898				441,747
Non-GAAP Financial Measures: (2)
Total assets		$	6,407,820			$	4,587,347			$	4,543,804			$	4,551,789			$	4,706,375
Goodwill and other intangibles, net		269,954				173,711				174,501				175,353				176,213
Tangible assets		$	6,137,866			$	4,413,636			$	4,369,303			$	4,376,436			$	4,530,162
Stockholders' equity		$	729,278			$	559,395			$	550,046			$	539,189			$	538,068
Goodwill and other intangibles, net		269,954				173,711				174,501				175,353				176,213
Tangible common equity		$	459,324			$	385,684			$	375,545			$	363,836			$	361,855
Average stockholders' equity (common)		$	608,946			$	550,974			$	544,541			$	537,920			$	537,826			$	568,390			$	523,904
Average goodwill and other intangibles, net		201,748				174,026				174,825				175,678				169,353				183,632				166,493
Average tangible common equity		$	407,198			$	376,948			$	369,716			$	362,242			$	368,473			$	384,758			$	357,411

1	Income statement-related ratios for partial-year periods are annualized.
2	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. See section Non-GAAP Financial Measures 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.
Net Interest Income and Net Interest Margin Analysis (Unaudited)
		At or for the Three Months Ended
		September 30, 2021											June 30, 2021											September 30, 2020
		Average								Average			Average								Average			Average								Average
		Balance				Interest				Rate			Balance				Interest				Rate			Balance				Interest				Rate
(In thousands)
ASSETS
PPP loans		$	109,318			$	2,310			8.27	%		$	205,639			$	4,862			9.35	%		$	332,816			$	2,477			2.91	%
Total loans ex PPP		2,967,104				33,001				4.37	%		2,663,466				30,267				4.50	%		2,538,440				31,598				4.89	%
Total loans (1) (2)		3,076,422				35,311				4.51	%		2,869,105				35,129				4.85	%		2,871,256				34,075				4.66	%
Investment securities (2)		611,870				2,805				1.83	%		537,632				2,794				2.08	%		496,153				2,764				2.23	%
Other interest-earning assets		1,046,476				869				0.33	%		702,657				616				0.35	%		848,697				680				0.32	%
Total interest-earning assets		4,734,768				$	38,985			3.24	%		4,109,394				$	38,539			3.72	%		4,216,106				$	37,519			3.50	%
Other assets, net		511,425											418,445											417,253
Total assets		$	5,246,193										$	4,527,839										$	4,633,359
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing core deposits		$	2,665,252			$	1,550			0.23	%		$	2,387,730			$	1,523			0.26	%		$	2,180,575			$	2,541			0.46	%
Brokered deposits		284,164				894				1.25	%		253,816				910				1.44	%		336,026				1,243				1.47	%
Total interest-bearing deposits		2,949,416				2,444				0.33	%		2,641,546				2,433				0.37	%		2,516,601				3,784				0.60	%
PPPLF		—				—				0.00	%		—				—				0.00	%		335,865				297				0.35	%
Other interest-bearing liabilities		143,615				1,113				3.08	%		43,325				303				2.76	%		81,271				629				3.05	%
Total interest-bearing liabilities		3,093,031				$	3,557			0.46	%		2,684,871				$	2,736			0.41	%		2,933,737				$	4,710			0.64	%
Noninterest-bearing demand deposits		1,499,052											1,256,251											1,119,659
Other liabilities		45,164											35,743											42,137
Stockholders' equity		608,946											550,974											537,826
Total liabilities and stockholders' equity		$	5,246,193										$	4,527,839										$	4,633,359
Net interest income and rate spread						$	35,428			2.78	%						$	35,803			3.31	%						$	32,809			2.86	%
Net interest margin										2.94	%										3.45	%										3.06	%
		At or for the Nine Months Ended
		September 30, 2021											September 30, 2020
		Average								Average			Average								Average
		Balance				Interest				Rate			Balance				Interest				Rate
(In thousands)
ASSETS
PPP loans		$	173,463			$	11,123			8.46	%		$	199,662			$	4,263			2.80	%
Total loans ex PPP		2,751,185				93,202				4.48	%		2,560,647				97,414				5.01	%
Total loans (1) (2)		2,924,648				104,325				4.71	%		2,760,309				101,677				4.85	%
Investment securities (2)		559,588				8,187				1.95	%		479,916				8,280				2.30	%
Other interest-earning assets		829,382				2,140				0.34	%		528,451				1,917				0.48	%
Total interest-earning assets		4,313,618				$	114,652			3.51	%		3,768,676				$	111,874			3.91	%
Other assets, net		452,047											399,226
Total assets		$	4,765,665										$	4,167,902
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing core deposits		$	2,483,963			$	4,914			0.26	%		$	2,070,500			$	9,894			0.64	%
Brokered deposits		284,738				2,885				1.35	%		279,165				3,302				1.58	%
Total interest-bearing deposits		2,768,701				7,799				0.38	%		2,349,665				13,196				0.75	%
PPPLF		—				—				0.00	%		191,535				507				0.35	%
Other interest-bearing liabilities		79,882				1,729				2.87	%		91,080				2,142				3.10	%
Total interest-bearing liabilities		2,848,583				$	9,528			0.45	%		2,632,280				$	15,845			0.80	%
Noninterest-bearing demand deposits		1,307,222											971,329
Other liabilities		41,470											40,389
Stockholders' equity		568,390											523,904
Total liabilities and stockholders' equity		$	4,765,665										$	4,167,902
Net interest income and rate spread						$	105,124			3.06	%						$	96,029			3.11	%
Net interest margin										3.22	%										3.35	%

(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.

 

 

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SOURCE Nicolet Bankshares, Inc.

FAQ

What were Nicolet Bankshares' earnings for Q3 2021?

Nicolet Bankshares reported Q3 2021 net income of $7.8 million, equating to $0.73 earnings per share.

How did the merger with Mackinac Financial affect Nicolet's financials?

The merger added $1.5 billion in assets and increased total deposits by $1.5 billion.

What is the outlook for Nicolet Bankshares after the merger with County Bancorp?

Nicolet expects to close the County Bancorp merger on December 3, 2021, enhancing its position as a premier agriculture lender in Wisconsin.

How has Nicolet Bankshares' net interest margin changed in Q3 2021?

Nicolet's net interest margin decreased to 2.94%, down 51 basis points from the previous quarter.