Nicolet Bankshares, Inc. Announces Third Quarter 2024 Results

Rhea-AI Summary

Nicolet Bankshares, Inc. (NYSE: NIC) reported strong third quarter 2024 results with net income of $33 million and earnings per diluted common share of $2.10. This represents an increase from the previous quarter's net income of $29 million and the third quarter 2023's $17 million. For the first nine months of 2024, net income reached $90 million.

Key highlights include:

• Tangible common equity to tangible assets increased 64 bps to 9.21%
• Asset quality improved with nonperforming assets declining to 0.31% of total assets
• Net interest margin rose to 3.44%, up 9 bps from the previous quarter
• Total loans increased by $28 million and total deposits grew by $19 million
• Noninterest income increased by $3 million over the previous quarter

Positive

• Net income increased to $33 million in Q3 2024, up from $29 million in Q2 2024 and $17 million in Q3 2023
• Earnings per diluted common share rose to $2.10 in Q3 2024
• Tangible common equity to tangible assets increased 64 bps to 9.21%
• Net interest margin improved to 3.44%, up 9 bps from the previous quarter
• Nonperforming assets declined to 0.31% of total assets, the lowest level in more than three years
• Total loans increased by $28 million and total deposits grew by $19 million
• Noninterest income increased by $3 million over the previous quarter

Negative

• Interest expense increased $1 million due to higher average balances and rates
• Noninterest expense increased by $2 million over the previous quarter

Insights

Financial Analyst

Nicolet Bankshares has delivered a strong third quarter performance, with net income rising to $33 million, up from $29 million in Q2 2024 and $17 million in Q3 2023. This represents a significant year-over-year growth of 94%. The earnings per diluted share of $2.10 show a robust 84% increase from the same quarter last year.

Key financial metrics are impressive:

• Return on average assets: 1.50%
• Return on average tangible common equity: 17.77%
• Net interest margin improved to 3.44%, up 9 basis points from Q2

The bank's asset quality remains exceptionally strong, with nonperforming assets at just 0.31% of total assets, the lowest in over three years. The allowance for credit losses stands at 1.00% of total loans, indicating conservative risk management.

The balance sheet shows modest growth, with total assets increasing 1% to $8.6 billion. The tangible common equity to tangible assets ratio improved by 64 basis points to 9.21%, reflecting strong core earnings and reduced unrealized losses in the securities portfolio.

Overall, Nicolet Bankshares demonstrates solid financial health, efficient operations and strong earnings growth, positioning it well in the current economic environment.

Market Research Analyst

Nicolet Bankshares' Q3 results reveal several positive trends for investors:

• Revenue Diversification: Growth across multiple income streams, including wealth management, mortgage and other fee-based services, indicates a well-balanced business model less susceptible to interest rate fluctuations.
• Margin Expansion: The net interest margin increase to 3.44% in a challenging rate environment showcases effective asset-liability management.
• Credit Quality: Declining nonperforming assets and negligible net charge-offs reflect a high-quality loan portfolio, reducing risk for investors.
• Capital Strength: The improved tangible common equity ratio provides a solid buffer against potential economic headwinds.

The bank's performance amidst higher interest rates and inflationary pressures demonstrates its resilience and the strength of its customer base. This adaptability could be particularly attractive to investors seeking stability in uncertain economic conditions.

The consistent growth in earnings and key performance metrics may lead to increased investor confidence and potentially support the stock price. However, investors should monitor the broader economic trends and their potential impact on the banking sector, particularly regarding interest rates and credit quality.

• 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

GREEN BAY, Wis.--(BUSINESS WIRE)-- 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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241015801637/en/

ir@nicoletbank.com

Source: Nicolet Bankshares, Inc.

FAQ

What was Nicolet Bankshares' (NIC) net income for Q3 2024?

Nicolet Bankshares reported a net income of $33 million for the third quarter of 2024.

How did Nicolet Bankshares' (NIC) Q3 2024 earnings compare to the previous quarter?

Nicolet Bankshares' Q3 2024 net income of $33 million was higher than the previous quarter's net income of $29 million.

What was Nicolet Bankshares' (NIC) earnings per diluted common share for Q3 2024?

Nicolet Bankshares reported earnings per diluted common share of $2.10 for the third quarter of 2024.

How did Nicolet Bankshares' (NIC) asset quality change in Q3 2024?

Nicolet Bankshares' asset quality improved, with nonperforming assets declining to 0.31% of total assets, the lowest level in more than three years.

What was Nicolet Bankshares' (NIC) net interest margin for Q3 2024?

Nicolet Bankshares reported a net interest margin of 3.44% for the third quarter of 2024, up 9 basis points from the previous quarter.