NICOLET BANKSHARES, INC. ANNOUNCES 2021 EARNINGS

Rhea-AI Summary

Nicolet Bankshares reported fourth quarter 2021 net income of $16 million, with earnings per diluted share at $1.25, reflecting a significant increase from $8 million in Q3 2021. For the year, net income reached $61 million, compared to $60 million in 2020. The company completed two major acquisitions, County and Mackinac, significantly boosting total assets to $7.7 billion. Non-GAAP earnings for 2021 were $73 million, adjusted for integration costs. The annualized return on average assets for Q4 2021 was 0.96%, down from 1.58% in Q4 2020.

Positive

• Fourth quarter net income increased to $16 million from $8 million in Q3 2021, indicating strong sequential growth.
• Annualized return on average assets improved to 0.96% in Q4 2021, showcasing effective asset management.
• Successful integrations of County and Mackinac acquisitions resulted in significant asset additions of $2.9 billion combined.

Negative

• Net income of $61 million for 2021 was only marginally higher than $60 million in 2020, suggesting stagnation in profitability.
• Non-core items impacted diluted earnings per share by $1.13 for 2021, indicating significant costs associated with recent acquisitions.
• The annualized return on average assets decreased from 1.41% in 2020 to 1.15% in 2021, reflecting declining efficiency.

GREEN BAY, Wis., Jan. 18, 2022 /PRNewswire/ -- Nicolet Bankshares, Inc. (NASDAQ: NCBS) ("Nicolet") announced fourth quarter 2021 net income of $16 million and earnings per diluted common share of $1.25, compared to $8 million and $0.73 for third quarter 2021, and $18 million and $1.74 for fourth quarter 2020, respectively.  Annualized quarterly return on average assets was 0.96%, 0.59% and 1.58%, for fourth quarter 2021, third quarter 2021 and fourth quarter 2020, respectively.

Net income for the year ended December 31, 2021 was $61 million and earnings per diluted common share was $5.44, compared to net income of $60 million and earnings per diluted common share of $5.70 for 2020.  Annualized return on average assets was 1.15% and 1.41% for the years ended December 31, 2021 and 2020, respectively.

Non-core items, and the related tax effect of each, in net income included merger and integration related expenses, Day 2 credit provision expense required under the CECL model, branch optimization costs, contract negotiation expenses and gains on other investments.  Non-core items negatively impacted earnings per diluted common share $0.58 for fourth quarter 2021, $0.76 for third quarter 2021, and $0.05 for fourth quarter 2020.  For the full year, non-core items negatively impacted diluted earnings per common share $1.13 for 2021 and $0.24 for 2020.

"As our fourth quarter numbers show, our financial and operating performance was strong. The successful integration of County showed that our team is adept at turning promises made into promises kept," said Mike Daniels, President and CEO of Nicolet. "We stretched the team with two acquisitions (County and Mackinac) in a short time, and they responded well. The acquisitions brought us more than increased assets and earnings.  They helped us add some good people and communities to the Nicolet family. We have great momentum heading into 2022, and our purpose to serve is resonating with our customers, employees, and the communities we serve.  We will continue to purposefully serve our 3 Circles - customers, employees, and shareholders, as we move forward. This focus has served us well for over twenty years."

On December 3, 2021, Nicolet completed its merger with County Bancorp, Inc. ("County"), pursuant to the terms of the definitive merger agreement dated June 22, 2021, at which time County merged with and into Nicolet, to become the premier agriculture lender throughout Wisconsin.  County shareholders received, at the election of each holder, either $37.18 in cash or 0.48 shares of Nicolet common stock, subject to proration procedures such that 1,237,000 shares of County common stock were exchanged for cash, and the remaining shares were exchanged for Nicolet common stock.  As a result, the total purchase price was $223 million, comprised of common stock consideration of $176 million from the issuance of approximately 2.4 million shares of Nicolet common stock and the remainder in cash consideration.  Upon consummation, County added total assets of $1.4 billion, loans of $1.0 billion, deposits of $1.0 billion, and preliminary goodwill of $70 million. 

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 $84 million.

Evaluation of financial performance and balance sheet line items was impacted by the timing and size of Nicolet's acquisitions of County and Mackinac.  Certain income statement results, average balances and related ratios for 2021 include partial contributions from County and Mackinac, each from the respective acquisition date.

"As for the full year numbers, the $61 million in GAAP earnings represents another record year for Nicolet. However, by adjusting the numbers for both the Mackinac and County deals, with $14 million of Day 2 CECL credit provisions required on better than projected asset quality metrics, $1 million related to our branch optimization strategy, and $6 million in integration and merger related expenses, the non-GAAP earnings of $73 million offers a better understanding of the economic value that we created in 2021," CEO Daniels added.

Executive Chairman of Nicolet Bob Atwell commented, "The excitement I observe as our bankers are out with our customers servicing the needs of our communities and all business lines working to fully integrate these last two acquisitions – that is the Nicolet Spirit and Culture fully engaged."  

Balance Sheet Review
At December 31, 2021, period end assets were $7.7 billion, an increase of $1.3 billion (20%) from September 30, 2021, largely due to the acquisition of County, which added $1.4 billion of assets at acquisition.  Total loans increased $1.1 billion from September 30, 2021, with County adding loans of $1.0 billion at acquisition.  Total deposits of $6.5 billion at December 31, 2021, increased $1.0 billion (19%) from September 30, 2021, largely due to the acquisition of County.  Total capital was $892 million at December 31, 2021, an increase of $163 million since September 30, 2021, mostly due to the acquisition of County. For the quarter ended December 31, 2021, Nicolet repurchased 345,166 shares at a total cost of $27.8 million, or an average per share cost of $80.49.

Compared to December 31, 2020, period end assets increased $3.1 billion (69%), largely due to the acquisitions of Mackinac and County.  Total loans increased $1.8 billion and total deposits increased $2.6 billion from December 31, 2020,  also largely due to the acquisitions of Mackinac and County.  Total capital was $892 million at December 31, 2021, an increase of $353 million since December 31, 2020, mostly due to the stock issued in the Mackinac and County acquisitions. For the year ended December 31, 2021, Nicolet repurchased 793,064 shares at a total cost of $61.5 million, or an average per share cost of $77.50.

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 $15.2 million was accreted in 2021.  At December 31, 2021, the net carrying value of all remaining PPP loans was $25 million (1% of total loans), compared to $72 million (2% of total loans) at September 30, 2021, and $186 million (7% of total loans) at December 31, 2020, reflecting continued loan forgiveness.      

Asset Quality
Nonperforming assets were $56 million at December 31, 2021 consisting of $44 million of nonaccrual loans (largely comprised of County's previously identified nonaccrual ag loans) and $12 million of other real estate owned (primarily closed bank branch properties yet to be sold), and representing 0.73% of total assets, compared to $21 million or 0.33% at September 30, 2021, and $13 million or 0.29% at December 31, 2020.  Since the prior quarter, the allowance for credit losses-loans increased $11 million to $50 million, mostly due to the Day 2 allowance increase from the acquisition of County.  Compared to December 31, 2020, the allowance for credit losses-loans increased $17 million, with $14 million attributable to the Day 2 allowance increase from the Mackinac and County acquisitions.  At December 31, 2021, the allowance represented 1.07% of total loans.

Income Statement Review - Year
Net income for the year ended December 31, 2021 was $61 million, compared to net income of $60 million for the full year 2020.

Net interest income increased 22% to $158 million for the year ended December 31, 2021, the net of $22 million higher interest income and $6 million lower interest expense. The net interest margin for 2021 was 3.37%, down 1bp from 3.38% for 2020. The yield on interest-earning assets decreased 24bps (to 3.66%), due to the change in mix of interest-earnings assets (including a higher proportion of lower yielding cash assets) and continued PPP loan forgiveness, while the cost of funds decreased 32bps (to 0.43%) for full year 2021, attributable mainly to the change in mix of interest-bearing liabilities.

Average interest-earning assets of $4.7 billion for full year 2021 were up $870 million (23%) from full year 2020.  The higher average loans and investment securities were largely due to the timing of the Mackinac and County acquisitions, while the higher balances in other interest-earning assets (up $225 million, mostly cash) were due to the increased liquidity of businesses and consumers, resulting in a shift in the mix of average interest-earning assets.  Other interest-earning assets increased to 17% of total interest-earning assets for full year 2021 (compared to 15% for 2020), while the percentage of loans decreased to represent 67% of total interest-earning assets for 2021 (compared to 72% in the prior year) and investment securities increased to represent 16% of total interest-earning assets for 2021 (compared to 13% in 2020).  Average interest-bearing liabilities of $3.1 billion increased $480 million from 2020, mostly due to higher average interest-bearing deposits (up $623 million), partly offset by lower wholesale funding (mainly the early repayment of PPPLF in fourth quarter 2020).

Noninterest income was $67 million for full year 2021, up $5 million (8%) over full year 2020. Excluding net asset gains (losses), noninterest income for 2021 was $63 million, down $1 million compared to 2020.  Net mortgage income of $22 million remained strong in 2021, though slower than the record levels experienced in 2020. Trust services fee income and brokerage fee income combined increased $4 million (23%) over last year. Card interchange income grew $2 million (31%) to $9 million in 2021 due to higher volume and activity. Net asset gains for full year 2021 were $4 million (comprised primarily of market gains on equity investments), compared to net asset losses of $2 million for full year 2020 (mostly from $1 million market losses on equity investments and $1 million of net losses on branch other real estate owned write-downs).  

Noninterest expense of $129 million for full year 2021 increased $29 million (28%) over full year 2020. Personnel expense increased $13 million (24%) year over year, reflecting higher salaries from the larger employee base and merit increases between the years, as well as increased incentive compensation and fringe benefits.  Non-personnel expenses increased $15 million (35%) largely due to higher merger-related expense, increased occupancy, equipment and data processing costs for a larger operating base, as well as higher professional fees, director fees, and costs to carry closed bank branches.

Income Statement Review - Quarter
Net income for fourth quarter 2021 was $16 million, compared to net income of $8 million for third quarter 2021 and net income of $18 million for fourth quarter 2020.

Net interest income was $54 million for fourth quarter 2021, $18 million (52%) higher than third quarter 2021, the net of $19 million higher interest income and $1 million higher interest expense.  Average interest-earning assets of $5.9 billion were up $1.2 billion from third quarter 2021, with higher average loans (up $876 million, mostly due to the timing of the Mackinac and County acquisitions) and higher average investment securities (up $658 million, largely due to the re-investment of approximately $0.5 billion excess cash liquidity into U.S. Treasury securities of varying yields and durations), partly offset by lower balances in other interest-earning assets (down $345 million, mostly cash from the re-investment noted above), resulting in a shift in the mix of average interest-earning assets.  Other interest-earning assets decreased to 12% of total interest-earning assets for fourth quarter 2021 (compared to 22% for third quarter 2021), while the percentage of loans increased to represent 67% of total interest-earning assets for fourth quarter 2021 (compared to 65% in the prior quarter) and investment securities increased to represent 21% of total interest-earning assets for fourth quarter 2021 (compared to 13% in the prior quarter).  Average interest-bearing liabilities of $4.0 billion increased $913 million from third quarter 2021, mostly due to higher average interest-bearing deposits (up $885 million, mostly due to the timing of the Mackinac and County acquisitions). 

The net interest margin for fourth quarter 2021 was 3.57%, up 63bps from 2.94% for third quarter 2021. The yield on interest-earning assets increased 61bps (to 3.85%), due to the change in mix of interest-earnings assets (including a lower proportion of lower yielding cash assets), continued PPP loan forgiveness, and higher yield on all other loans (up 33bps from the prior quarter).  The cost of funds decreased 6bps (to 0.40%) for fourth quarter 2021, attributable mainly to the higher amount of low cost deposits.

Noninterest income was $16 million for fourth quarter 2021, up $2 million (15%) compared to third quarter 2021. Excluding net asset gains (losses), noninterest income was up slightly (3%) from third quarter 2021, largely due to higher card interchange volumes and service charges on deposit accounts.  Net mortgage income of $5 million remains strong, though continues to slow from the record levels experienced in 2020. Net asset gains were $0.5 million (comprised primarily of gains on asset sales), compared to net asset losses of $1 million in third quarter 2021 (comprised primarily of market losses on an equity investment).  

Noninterest expense of $39 million increased $6 million (19%) from third quarter 2021. Personnel expense increased $5 million (27%) from third quarter 2021, reflecting the larger employee base.  Non-personnel expenses increased $2 million (11%) largely due to higher occupancy and data processing expense of a larger operating base. 

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 in Northeast and Central Wisconsin, Northern Michigan and the upper peninsula of Michigan. 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 net income, non-GAAP earnings per  diluted common share, tangible book value per common share, return on average tangible common equity, and tangible common equity to tangible assets, where management believes such measures to be helpful to management, investors and others in understanding Nicolet's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measures, as well as the reconciliation of the non-GAAP measures to the GAAP financial measures, are provided.  See "Reconciliation of Non-GAAP Financial Measures (Unaudited)" below. The non-GAAP net income measure and related reconciliation provide information useful to investors in understanding the operating performance and trends of Nicolet and also aid investors in comparing Nicolet's financial performance to the financial performance of peer banks.  Management considers non-GAAP financial ratios to be critical metrics with which to analyze and evaluate financial condition and capital strengths. While non-GAAP financial measures are frequently used by stakeholders in the evaluation of a corporation, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP.

Forward Looking Statements "Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995
Certain statements contained in this communication, which are not statements of historical fact, constitute forward-looking statements within the meaning of the federal securities law. Such statements include, but are not limited to, statements about Nicolet's business plans, objectives, expectations and intentions, including without limitation Nicolet's momentum heading into 2022 and business focus moving forward, all of which is 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 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 Nicolet's 2021 acquisitions of Mackinac and/or County will not be realized or will not be realized within the expected time period; (2) diversion of management's attention from ongoing business operations and opportunities due to the mergers; (3) the challenges of integrating and retaining key employees of Nicolet, including those who joined Nicolet from Mackinac and County; (4) the effect of the mergers on Nicolet's and/or Mackinac's or County's historic customer and employee relationships and operating results; (5) the magnitude and duration of the COVID pandemic and its impact on the global economy and financial market conditions and Nicolet's business, results of operations and financial condition; (6) changes in consumer demand for financial services; and (7) general competitive, economic, political and market conditions and fluctuations.  Please refer to Nicolet's Annual Report on Form 10-K for the year ended December 31, 2020, as well as its 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.

 

Nicolet Bankshares, Inc.
Consolidated Balance Sheets (Unaudited)
(In thousands, except share data)		12/31/2021		09/30/2021		06/30/2021		03/31/2021		12/31/2020
Assets:
Cash and due from banks		$            209,349		$            217,608		$              77,634		$              61,295		$              88,460
Interest-earning deposits		385,943		1,132,997		714,772		674,559		714,399
Cash and cash equivalents		595,292		1,350,605		792,406		735,854		802,859
Certificates of deposit in other banks		21,920		24,079		23,387		27,296		29,521
Securities available for sale, at fair value		921,661		715,942		562,028		558,229		539,337
Securities held to maturity, at amortized cost		651,803		49,063		—		—		—
Other investments		44,008		38,602		33,440		28,248		27,619
Loans held for sale		6,447		16,784		11,235		16,883		21,450
Other assets held for sale		199,833		177,627		—		—		—
Loans		4,621,836		3,533,198		2,820,331		2,846,351		2,789,101
Allowance for credit losses - loans		(49,672)		(38,399)		(32,561)		(32,626)		(32,173)
Loans, net		4,572,164		3,494,799		2,787,770		2,813,725		2,756,928
Premises and equipment, net		94,566		83,513		61,618		59,413		59,944
Bank owned life insurance ("BOLI")		134,476		100,690		84,347		83,788		83,262
Goodwill and other intangibles, net		339,492		269,954		173,711		174,501		175,353
Accrued interest receivable and other assets		113,375		86,162		57,405		45,867		55,516
Total assets		$         7,695,037		$         6,407,820		$         4,587,347		$         4,543,804		$         4,551,789
Liabilities and Stockholders' Equity
Liabilities:
Noninterest-bearing demand deposits		$         1,975,705		$         1,852,119		$         1,324,994		$         1,216,477		$         1,212,787
Interest-bearing deposits		4,490,211		3,576,655		2,614,028		2,684,117		2,697,612
Total deposits		6,465,916		5,428,774		3,939,022		3,900,594		3,910,399
Short-term borrowings		—		—		—		—		—
Long-term borrowings		216,915		144,233		45,108		43,988		53,869
Other liabilities held for sale		51,586		47,496		—		—		—
Accrued interest payable and other liabilities		68,729		58,039		43,822		49,176		48,332
Total liabilities		6,803,146		5,678,542		4,027,952		3,993,758		4,012,600
Stockholders' Equity:
Common stock		140		120		98		100		100
Additional paid-in capital		575,045		425,367		261,096		271,388		273,390
Retained earnings		313,604		297,299		289,475		271,191		252,952
Accumulated other comprehensive income (loss)		3,102		6,492		8,726		7,367		12,747
Total Nicolet stockholders' equity		891,891		729,278		559,395		550,046		539,189
Total liabilities and  stockholders' equity		$         7,695,037		$         6,407,820		$         4,587,347		$         4,543,804		$         4,551,789
Common shares outstanding		13,994,079		11,952,438		9,843,141		9,987,897		10,011,342

 

Nicolet Bankshares, Inc.
Consolidated Statements of Income (Unaudited)
		At or for the Three Months Ended										At or for the Years Ended
(In thousands, except per share data)		12/31/2021		09/30/2021		06/30/2021		03/31/2021		12/31/2020		12/31/2021		12/31/2020
Interest income:
Loans, including loan fees		$       52,292		$       35,294		$       35,111		$       33,862		$       34,781		$         156,559		$         136,372
Taxable investment securities		3,999		2,061		2,060		1,814		2,003		9,934		8,118
Tax-exempt investment securities		575		517		520		545		559		2,157		2,101
Other interest income		769		869		616		655		694		2,909		2,611
Total interest income		57,635		38,741		38,307		36,876		38,037		171,559		149,202
Interest expense:
Deposits		2,649		2,444		2,433		2,922		3,445		10,448		16,641
Short-term borrowings		1		—		—		—		1		1		66
Long-term borrowings		1,426		1,113		303		313		573		3,155		3,157
Total interest expense		4,076		3,557		2,736		3,235		4,019		13,604		19,864
Net interest income		53,559		35,184		35,571		33,641		34,018		157,955		129,338
Provision for credit losses		8,400		6,000		—		500		1,300		14,900		10,300
Net interest income after provision for credit losses		45,159		29,184		35,571		33,141		32,718		143,055		119,038
Noninterest income:
Trust services fee income		2,050		2,043		1,906		1,775		1,746		7,774		6,463
Brokerage fee income		3,205		3,154		2,991		2,793		2,673		12,143		9,753
Mortgage income, net		4,518		4,808		5,599		7,230		7,842		22,155		29,807
Service charges on deposit accounts		1,482		1,314		1,136		1,091		1,133		5,023		4,208
Card interchange income		2,671		2,299		2,266		1,927		1,922		9,163		6,998
BOLI income		722		572		559		527		936		2,380		2,710
Asset gains (losses), net		465		(1,187)		4,192		711		(620)		4,181		(1,805)
Other noninterest income		951		993		1,529		1,072		1,247		4,545		4,492
Total noninterest income		16,064		13,996		20,178		17,126		16,879		67,364		62,626
Noninterest expense:
Personnel expense		21,491		16,927		17,084		15,116		15,244		70,618		57,121
Occupancy, equipment and office		7,119		5,749		4,053		4,137		4,102		21,058		16,718
Business development and marketing		1,550		1,654		1,210		989		713		5,403		5,396
Data processing		3,582		2,939		2,811		2,658		2,921		11,990		10,495
Intangibles amortization		1,094		758		790		852		860		3,494		3,567
FDIC assessments		480		480		480		595		360		2,035		707
Merger-related expense		2,202		2,793		656		—		167		5,651		1,020
Other noninterest expense		1,890		1,761		3,663		1,734		1,000		9,048		5,695
Total noninterest expense		39,408		33,061		30,747		26,081		25,367		129,297		100,719
Income before income tax expense		21,815		10,119		25,002		24,186		24,230		81,122		80,945
Income tax expense		5,510		2,295		6,718		5,947		6,145		20,470		20,476
Net income		16,305		7,824		18,284		18,239		18,085		60,652		60,469
Net income attributable to noncontrolling interest		—		—		—		—		98		—		347
Net income attributable to Nicolet		$       16,305		$         7,824		$       18,284		$       18,239		$       17,987		$           60,652		$           60,122
Earnings per common share:
Basic		$           1.29		$           0.75		$           1.85		$           1.82		$           1.79		$               5.65		$               5.82
Diluted		$           1.25		$           0.73		$           1.77		$           1.75		$           1.74		$               5.44		$               5.70
Common shares outstanding:
Basic weighted average		12,626		10,392		9,902		9,998		10,074		10,736		10,337
Diluted weighted average		13,049		10,776		10,326		10,403		10,350		11,145		10,541

 

Nicolet Bankshares, Inc.
Consolidated Financial Summary (Unaudited)
		At or for the Three Months Ended										At or for the Years Ended
(In thousands, except share & per share data)		12/31/2021		9/30/2021		6/30/2021		3/31/2021		12/31/2020		12/31/2021		12/31/2020
Selected Average Balances:
Loans		$ 3,952,330		$ 3,076,422		$ 2,869,105		$ 2,825,664		$ 2,868,827		$    3,183,681		$    2,787,587
Investment securities		1,269,562		611,870		537,632		528,342		520,867		738,540		490,209
Interest-earning assets		5,923,581		4,734,768		4,109,394		4,089,603		4,091,460		4,719,417		3,849,812
Cash and cash equivalents		839,607		1,100,153		716,873		750,075		714,031		852,603		584,159
Goodwill and other intangibles, net		294,051		201,748		174,026		174,825		175,678		211,463		168,802
Total assets		6,772,363		5,246,193		4,527,839		4,514,927		4,515,226		5,271,463		4,255,207
Deposits		5,754,778		4,448,468		3,897,797		3,875,205		3,793,430		4,499,087		3,439,748
Interest-bearing liabilities		4,006,307		3,093,031		2,684,871		2,764,232		2,744,578		3,140,393		2,660,508
Stockholders' equity (common)		784,666		608,946		550,974		544,541		537,920		622,903		527,428
Selected Ratios: (1)
Book value per common share		$      63.73		$      61.01		$      56.83		$      55.07		$      53.86		$          63.73		$          53.86
Tangible book value per common share (2)		$      39.47		$      38.43		$      39.18		$      37.60		$      36.34		$          39.47		$          36.34
Return on average assets		0.96 %		0.59 %		1.62 %		1.64 %		1.58 %		1.15 %		1.41 %
Return on average common equity		8.24		5.10		13.31		13.58		13.30		9.74		11.40
Return on average tangible common equity (2)		13.19		7.62		19.46		20.01		19.75		14.74		16.76
Average equity to average assets		11.59		11.61		12.17		12.06		11.91		11.82		12.39
Stockholders' equity to assets		11.59		11.38		12.19		12.11		11.85		11.59		11.85
Tangible common equity to tangible assets (2)		7.51		7.48		8.74		8.60		8.31		7.51		8.31
Net interest margin		3.57		2.94		3.45		3.31		3.29		3.37		3.38
Efficiency ratio		56.73		65.32		59.37		51.84		48.99		58.20		51.72
Effective tax rate		25.26		22.68		26.87		24.59		25.36		25.23		25.30
Selected Asset Quality Information:
Nonaccrual loans		$    44,154		$    16,715		$      6,932		$      8,965		$      9,455		$        44,154		$          9,455
Other real estate owned - closed branches		10,307		2,895		2,895		3,495		3,608		10,307		3,608
Other real estate owned		1,648		1,574		—		302		—		1,648		—
Nonperforming assets		$    56,109		$    21,184		$      9,827		$    12,762		$    13,063		$        56,109		$        13,063
Net loan charge-offs (recoveries)		$         (10)		$          58		$          65		$          47		$         515		$             160		$          1,384
Allowance for credit losses-loans to loans		1.07 %		1.09 %		1.15 %		1.15 %		1.15 %		1.07 %		1.15 %
Net loan charge-offs to average loans (1)		0.00		0.01		0.01		0.01		0.07		0.01		0.05
Nonperforming loans to total loans		0.96		0.47		0.25		0.31		0.34		0.96		0.34
Nonperforming assets to total assets		0.73		0.33		0.21		0.28		0.29		0.73		0.29
Stock Repurchase Information:
Common stock repurchased (dollars) (3)		$    27,784		$    17,125		$    12,453		$      4,102		$    12,909		$        61,464		$        40,544
Common stock repurchased (full shares) (3)		345,166		233,594		157,418		56,886		205,001		793,064		646,748

(1)	Income statement-related ratios for partial-year periods are annualized.
(2)	See Reconcilation 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.
Net Interest Income and Net Interest Margin Analysis (Unaudited)
		At or for the Three Months Ended
		December 31, 2021						September 30, 2021						December 31, 2020
		Average				Average		Average				Average		Average				Average
(In thousands)		Balance		Interest		Rate		Balance		Interest		Rate		Balance		Interest		Rate
ASSETS
PPP loans		$      46,694		$     5,549		46.50         %		$    109,318		$     2,310		8.27       %		$    282,736		$     3,799		5.26       %
Total loans ex PPP		3,905,636		46,770		4.70       %		2,967,104		33,001		4.37       %		2,586,091		31,005		4.71       %
Total loans (1) (2)		3,952,330		52,319		5.20       %		3,076,422		35,311		4.51       %		2,868,827		34,804		4.76       %
Investment securities (2)		1,269,562		4,860		1.53       %		611,870		2,805		1.83       %		520,867		2,799		2.15       %
Other interest-earning assets		701,689		769		0.43       %		1,046,476		869		0.33       %		701,766		694		0.39       %
Total interest-earning assets		5,923,581		$   57,948		3.85       %		4,734,768		$   38,985		3.24       %		4,091,460		$   38,297		3.68       %
Other assets, net		848,782						511,425						423,766
Total assets		$ 6,772,363						$ 5,246,193						$ 4,515,226
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing core deposits		$ 3,456,699		$     1,743		0.20       %		$ 2,665,252		$     1,550		0.23       %		$ 2,285,858		$     2,269		0.39       %
Brokered deposits		377,390		906		0.95       %		284,164		894		1.25       %		320,237		1,176		1.46       %
Total interest-bearing deposits		3,834,089		2,649		0.27       %		2,949,416		2,444		0.33       %		2,606,095		3,445		0.53       %
PPPLF		—		—		0.00       %		—		—		0.00       %		72,582		64		0.35       %
Other interest-bearing liabilities		172,218		1,427		3.30       %		143,615		1,113		3.08       %		65,901		510		3.04       %
Total interest-bearing liabilities		4,006,307		$     4,076		0.40       %		3,093,031		$     3,557		0.46       %		2,744,578		$     4,019		0.58       %
Noninterest-bearing demand deposits		1,920,689						1,499,052						1,187,335
Other liabilities		60,701						45,164						45,393
Stockholders' equity		784,666						608,946						537,920
Total liabilities and stockholders' equity		$ 6,772,363						$ 5,246,193						$ 4,515,226
Net interest income and rate spread				$   53,872		3.45       %				$   35,428		2.78       %				$   34,278		3.10       %
Net interest margin						3.57       %						2.94       %						3.29       %
		At or for the Years Ended
		December 31, 2021						December 31, 2020
		Average				Average		Average				Average
(In thousands)		Balance		Interest		Rate		Balance		Interest		Rate
ASSETS
PPP loans		$    141,510		$   16,672		11.78         %		$    220,544		$     8,062		3.66       %
Total loans ex PPP		3,042,171		139,972		4.60       %		2,567,043		128,419		5.00       %
Total loans (1) (2)		3,183,681		156,644		4.92       %		2,787,587		136,481		4.90       %
Investment securities (2)		738,540		13,047		1.77       %		490,209		11,079		2.26       %
Other interest-earning assets		797,196		2,909		0.36       %		572,016		2,611		0.46       %
Total interest-earning assets		4,719,417		$ 172,600		3.66       %		3,849,812		$ 150,171		3.90       %
Other assets, net		552,046						405,395
Total assets		$ 5,271,463						$ 4,255,207
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing core deposits		$ 2,729,146		$     6,657		0.24       %		$ 2,124,634		$   12,163		0.57       %
Brokered deposits		308,091		3,791		1.23       %		289,489		4,478		1.55       %
Total interest-bearing deposits		3,037,237		10,448		0.34       %		2,414,123		16,641		0.69       %
PPPLF		—		—		0.00       %		161,634		571		0.35       %
Other interest-bearing liabilities		103,156		3,156		3.06       %		84,751		2,652		3.13       %
Total interest-bearing liabilities		3,140,393		$   13,604		0.43       %		2,660,508		$   19,864		0.75       %
Noninterest-bearing demand deposits		1,461,850						1,025,625
Other liabilities		46,317						41,646
Stockholders' equity		622,903						527,428
Total liabilities and stockholders' equity		$ 5,271,463						$ 4,255,207
Net interest income and rate spread				$ 158,996		3.23       %				$ 130,307		3.15       %
Net interest margin						3.37       %						3.38       %

(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.

 

Nicolet Bankshares, Inc.
Reconciliation of Non-GAAP Financial Measures (Unaudited)
		At or for the Three Months Ended										At or for the Years Ended
(In thousands, except per share data)		12/31/2021		9/30/2021		6/30/2021		3/31/2021		12/31/2020		12/31/2021		12/31/2020
Adjusted net income reconciliation: (1)
Net income attributable to Nicolet (GAAP)		$       16,305		$         7,824		$       18,284		$       18,239		$       17,987		$           60,652		$           60,122
Adjustments:
Provision expense related to merger		8,400		6,000		—		—		—		14,400		—
Assets (gains) losses, net		(465)		1,187		(4,192)		(711)		620		(4,181)		1,805
Merger-related expense		2,202		2,793		656		—		167		5,651		1,020
Branch closure expense		—		944		—		—		—		944		500
Adjustments subtotal		10,137		10,924		(3,536)		(711)		787		16,814		3,325
Tax on Adjustments (25%)		2,534		2,731		(884)		(178)		197		4,204		831
Adjustments, net of tax		7,603		8,193		(2,652)		(533)		590		12,611		2,494
Adjusted net income attributable to Nicolet (Non-GAAP)		$       23,908		$       16,017		$       15,632		$       17,706		$       18,577		$           73,263		$           62,616
Common shares outstanding:
Weighted average diluted common shares		13,049		10,776		10,326		10,403		10,350		11,145		10,541
Diluted earnings per common share:
Diluted earnings per common share (GAAP)		$           1.25		$           0.73		$           1.77		$          1.75		$           1.74		$               5.44		$               5.70
Adjusted Diluted earnings per common share (Non-GAAP)		$           1.83		$           1.49		$           1.51		$          1.70		$           1.79		$               6.57		$               5.94
Tangible assets: (2)
Total assets		$   7,695,037		$   6,407,820		$   4,587,347		$  4,543,804		$   4,551,789
Goodwill and other intangibles, net		339,492		269,954		173,711		174,501		175,353
Tangible assets		$   7,355,545		$   6,137,866		$   4,413,636		$  4,369,303		$   4,376,436
Tangible common equity: (2)
Stockholders' equity		$     891,891		$     729,278		$     559,395		$     550,046		$     539,189
Goodwill and other intangibles, net		339,492		269,954		173,711		174,501		175,353
Tangible common equity		$     552,399		$     459,324		$     385,684		$     375,545		$     363,836
Tangible average common equity: (2)
Average stockholders' equity (common)		$     784,666		$     608,946		$     550,974		$     544,541		$     537,920		$         622,903		$         527,428
Average goodwill and other intangibles, net		294,051		201,748		174,026		174,825		175,678		211,463		168,802
Average tangible common equity		$     490,615		$     407,198		$     376,948		$     369,716		$     362,242		$         411,440		$         358,626

(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)	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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SOURCE Nicolet Bankshares, Inc.

FAQ

What were Nicolet Bankshares' net income and EPS for Q4 2021?

Nicolet Bankshares reported net income of $16 million and earnings per diluted share of $1.25 for Q4 2021.

How did the acquisitions impact Nicolet Bankshares' asset size?

The acquisitions of County and Mackinac added total assets of approximately $2.9 billion, increasing total assets to $7.7 billion.

What was Nicolet Bankshares' annualized return on average assets for Q4 2021?

The annualized return on average assets for Q4 2021 was 0.96%.

How did Nicolet Bankshares' 2021 non-GAAP earnings compare to 2020?

Nicolet's non-GAAP earnings for 2021 were $73 million, slightly higher than the adjusted earnings of $60 million for 2020.

What were the major costs affecting Nicolet Bankshares' earnings in 2021?

Non-core items negatively impacted earnings per diluted common share by $1.13 in 2021, mainly due to merger-related expenses.