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NICOLET BANKSHARES, INC. ANNOUNCES THIRD QUARTER 2023 RESULTS
Press Releases

NICOLET BANKSHARES, INC. ANNOUNCES THIRD QUARTER 2023 RESULTS

  • Net income of $17 million or adjusted net income (non-GAAP) of $23 million for third quarter 2023, compared to net income of $23 million in prior quarter, and net income of $19 million or adjusted net income (non-GAAP) of $25 million for third quarter 2022
  • Net income of $31 million and adjusted net income (non-GAAP) of $73 million for first nine months of 2023, compared to $67 million and adjusted net income (non-GAAP) of $71 million for first nine months of 2022, significantly impacted by first quarter balance sheet repositioning
  • Change in Wisconsin tax law resulted in one-time $9.1 million charge to state income tax expense in current quarter with expected lower effective tax rate in future periods
  • Quarterly net interest margin of 3.16%, an increase of 2 bps over second quarter
  • Wealth assets under management increased 24% from year-end 2022

GREEN BAY, Wis., Oct. 24, 2023 /PRNewswire/ — Nicolet Bankshares, Inc. (NYSE: NIC) (“Nicolet”) announced third quarter 2023 net income of $17 million and earnings per diluted common share of $1.14, compared to net income of $23 million and earnings per diluted common share of $1.51 for second quarter 2023, and net income of $19 million and earnings per diluted common share of $1.29 for third quarter 2022.  Net income for the nine months ended September 30, 2023 was $31 million and earnings per diluted common share of $2.05, compared to net income of $67 million and earnings per diluted common share of $4.72 for the nine months ended September 30, 2022.

On July 1, 2023, Wisconsin’s Governor signed the State Budget, retroactive to January 1, 2023, which included language that provides financial institutions with an exemption from state taxable income for interest, fees, and penalties earned on loans to existing Wisconsin-based business or agriculture purpose loans that are $5 million or less in balance on January 1, 2023, and to new loans that meet the criteria. The impact to Nicolet moving forward will be a reduction / elimination of State income taxes being expensed, resulting in an estimated effective tax rate of 19.5% (compared to a 25% effective tax rate previously). However, the elimination of State income tax expense will also cause a valuation allowance to be set up for the State-related deferred tax asset as of the effective date of the legislation, requiring a one-time $9.1 million charge to state income tax expense in the third quarter.

Net income reflected certain non-core items and the related tax effect of each, including the first quarter U.S. Treasury securities sale loss, change in Wisconsin tax law, expected loss (provision expense) on the Signature Bank sub debt investment (acquired in an acquisition), merger-related expenses, Day 2 credit provision expense required under the CECL model, as well as gains / (losses) on other assets and investments.  These non-core items negatively impacted earnings per diluted common share $0.40 for third quarter 2023, $0.02 for second quarter 2023, and $0.45 for third quarter 2022.  For the nine months ended September 30, 2023, these non-core items negatively impacted earnings per diluted common share $2.82, and negatively impacted earnings per diluted common share $0.33 for the comparable nine-month period of 2022.

“Our recent quarterly results continue to show Nicolet’s resilience in a challenging operating environment,” said Mike Daniels, President and CEO of Nicolet. “We have a saying at Nicolet – ‘control what you can control.’ This quarter, our core operations, which we can control, are solid and driven by top-line revenue growth, an increase in core deposits, and another positive movement in our net interest margin.  Our customers continue to perform remarkably well despite the macroeconomic headwinds of a tight labor market and higher costs due to inflation.  We are encouraged by the momentum we have heading into the final quarter of the year.”

Daniels continued, “The passage of the 2024 Wisconsin State Budget with the state tax exemption for community banks will have a meaningful impact on the earnings for Wisconsin banks this year and going forward.  I want to thank our state lawmakers for recognizing the value and importance of Wisconsin community banks and for putting positive actions behind their words.”

Nicolet’s financial performance and certain balance sheet line items were impacted by the timing and size of Nicolet’s August 2022 acquisition of Charter Bankshares, Inc. (“Charter”). Certain income statement results, average balances, and related ratios for 2022 include contributions from Charter from the acquisition date.  At acquisition, Charter added assets of $1.1 billion, loans of $827 million, and deposits of $869 million.

Balance Sheet Review

At September 30, 2023, period end assets were $8.4 billion, a decrease of $66 million (1%) from June 30, 2023, mostly maturities and paydowns of investment securities, partly offset by higher cash balances.  Total loans increased slightly ($16 million) from June 30, 2023, with growth in residential real estate and agriculture loans, offset by slowing commercial loan demand.  Total deposits of $7.2 billion at September 30, 2023, decreased $16 million from June 30, 2023, with lower customer transaction account balances and a reduction in noncore deposits, offset by growth in customer time deposits.  Total borrowings declined $50 million due to the maturity of a short-term FHLB advance.  Total capital was $974 million at September 30, 2023, a decrease of $3 million since June 30, 2023, with earnings more than offset by unfavorable market valuations on available for sale securities. 

Asset Quality

Nonperforming assets were $32 million and represented 0.37% of total assets at September 30, 2023, compared to $27 million or 0.32% at June 30, 2023, and $40 million or 0.45% at September 30, 2022.  The allowance for credit losses-loans was $63 million and represented 1.01% of total loans at September 30, 2023, compared to $63 million (or 1.01% of total loans) at June 30, 2023, and $60 million (or 1.01% of total loans) at September 30, 2022.  Asset quality trends remain solid and loan net charge-offs were negligible.

Income Statement Review – Quarter

Net income was $17 million and adjusted net income (non-GAAP) was $23 million for third quarter 2023, compared to net income of $23 million for second quarter 2023.

Net interest income was $61 million for third quarter 2023, up $2 million from second quarter 2023, the net effect of higher interest income and higher interest expense. The higher interest income was largely attributable to the repricing of new and renewed loans in a rising interest rate environment along with a shift of maturing investments (mostly U.S. Treasury securities) into investable cash balances at higher rates. The increase in interest expense was due to both higher average balances and higher average rates, reflecting the rising interest rate environment as well as a shift to higher rate deposit products (mostly time deposits). The net interest margin for third quarter 2023 was 3.16%, up 2 bps from 3.14% for second quarter 2023. The yield on interest-earning assets increased 25 bps (to 5.15%) due to the maturity of U.S. Treasury securities reinvested as investable cash, as well as the rising interest rate environment, while the cost of funds increased 29 bps (to 2.83%) for third quarter 2023, attributable mainly to the repricing of deposits and funding in the higher interest rate environment.

Noninterest income of $17 million for third quarter 2023 was minimally changed from second quarter 2023. Excluding net asset gains (losses), noninterest income for third quarter 2023 was $17 million, a $1 million decrease from second quarter 2023. The sequential quarter decrease included an unfavorable change in the fair value of nonqualified deferred compensation plan assets, partly offset by higher wealth revenue (from growth in accounts and assets under management, though tempered by unfavorable market-related changes) and net mortgage income. 

Noninterest expense of $46 million for third quarter 2023, increased $1 million compared to second quarter 2023. Personnel expense was minimally changed with higher salaries, incentives, and health insurance substantially offset by a decrease in the fair value of nonqualified deferred compensation plan liabilities.  Non-personnel expenses increased 4% between the sequential quarters, mostly higher data processing (volume-based system processing) and office expense. 

Income tax expense was $15 million (effective tax rate 46.09%) for third quarter 2023, compared to $8 million (effective tax rate 25.85%) for second quarter 2023.  The change in income tax expense included a $9.1 million charge to income tax expense to establish a tax valuation allowance, partly offset by a $3.0 million reduction to income tax expense to reverse amounts recorded in the first half of 2023, both related to the Wisconsin tax law change noted above.

Subsequent Event

On October 2, 2023, Nicolet sold its member interest in UFS, LLC for proceeds of $10 million and a pre-tax gain of approximately $9 million.  This gain on sale will be realized during fourth quarter 2023.

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 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 or 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 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 Private Securities Litigation Reform Act.  Forward-looking statements generally can be identified by words or phrases such as, without limitation, “anticipate,” “believe,” “aim,” “can,” “conclude,” “continue,” “could,” “estimate,” “expect,” “foresee,” “goal,” “intend,” “may,” “might,” “outlook,” “possible,” “plan,” “predict,” “project,” “potential,” “seek,” “should,” “target,” “will,” “will likely,” “would,” or the negative of these terms or other comparable terminology, as well as similar expressions, and in this press release include our statements about our expected future effective tax rate.

Forward-looking statements are not historical facts but instead express only management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management’s control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements. Risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, include, but are not limited to future legislative changes to the taxes imposed upon Nicolet. Additional factors which could affect the forward looking statements can be found in Nicolet’s 2022 Annual Report on Form 10-K, as well subsequent filings with the SEC and are available on the SEC’s website at www.sec.gov.

Any forward-looking statements included in this press release are made as of the date hereof and are based on information available to management at that time. Except as required by law, Nicolet disclaims any obligation to update or revise any forward-looking statement contained in this press release to reflect new information or events or circumstances that occur after the date the forward-looking statements were made.

 

Nicolet Bankshares, Inc.











Consolidated Balance Sheets (Unaudited)











(In thousands, except share data)


9/30/2023


6/30/2023


3/31/2023


12/31/2022


9/30/2022

Assets











Cash and due from banks


$            109,414


$            122,021


$              93,462


$            121,211


$            118,537

Interest-earning deposits


436,466


383,185


20,718


33,512


319,745

Cash and cash equivalents


545,880


505,206


114,180


154,723


438,282

Certificates of deposit in other banks


7,598


9,808


11,293


12,518


13,510

Securities available for sale, at fair value


793,826


921,108


1,023,176


917,618


949,597

Securities held to maturity, at amortized cost





679,128


686,424

Other investments


58,367


57,578


57,482


65,286


79,279

Loans held for sale


6,500


3,849


4,962


1,482


3,709

Loans


6,239,257


6,222,776


6,223,732


6,180,499


5,984,437

Allowance for credit losses – loans


(63,160)


(62,811)


(62,412)


(61,829)


(60,348)

Loans, net


6,176,097


6,159,965


6,161,320


6,118,670


5,924,089

Premises and equipment, net


117,744


117,278


112,569


108,956


106,648

Bank owned life insurance (“BOLI”)


168,223


167,192


166,107


165,137


165,166

Goodwill and other intangibles, net


396,208


398,194


400,277


402,438


407,117

Accrued interest receivable and other assets


145,719


142,450


140,988


138,013


122,095

Total assets


$         8,416,162


$         8,482,628


$         8,192,354


$         8,763,969


$         8,895,916












Liabilities and Stockholders’ Equity











Liabilities:











Noninterest-bearing demand deposits


$         2,020,074


$         2,059,939


$         2,094,623


$         2,361,816


$         2,477,507

Interest-bearing deposits


5,162,314


5,138,665


4,833,956


4,817,105


4,918,395

Total deposits


7,182,388


7,198,604


6,928,579


7,178,921


7,395,902

Short-term borrowings



50,000


50,000


317,000


280,000

Long-term borrowings


197,754


197,577


197,448


225,342


225,236

Accrued interest payable and other liabilities


61,559


58,809


54,535


70,177


56,315

Total liabilities


7,441,701


7,504,990


7,230,562


7,791,440


7,957,453

Stockholders’ Equity:











Common stock


147


147


147


147


147

Additional paid-in capital


626,348


624,897


623,746


621,988


620,392

Retained earnings


431,317


417,863


398,966


407,864


380,263

Accumulated other comprehensive income (loss)


(83,351)


(65,269)


(61,067)


(57,470)


(62,339)

Total stockholders’ equity


974,461


977,638


961,792


972,529


938,463

  Total liabilities and  stockholders’ equity


$         8,416,162


$         8,482,628


$         8,192,354


$         8,763,969


$         8,895,916












Common shares outstanding


14,757,565


14,717,938


14,698,265


14,690,614


14,673,197

 

Nicolet Bankshares, Inc.















Consolidated Statements of Income (Loss) (Unaudited)













For the Three Months Ended


For the Nine Months Ended

(In thousands, except per share data)


9/30/2023


6/30/2023


3/31/2023


12/31/2022


9/30/2022


9/30/2023


9/30/2022

Interest income:















Loans, including loan fees


$          87,657


$          84,091


$          79,142


$          76,367


$          63,060


$         250,890


$         167,313

Taxable investment securities


4,351


4,133


4,961


5,771


5,350


13,445


15,612

Tax-exempt investment securities


1,424


1,476


1,737


1,915


1,181


4,637


2,503

Other interest income


6,452


2,357


1,536


1,703


1,127


10,345


2,734

Total interest income


99,884


92,057


87,376


85,756


70,718


279,317


188,162

Interest expense:















Deposits


34,964


29,340


24,937


12,512


4,638


89,241


9,240

Short-term borrowings


474


1,108


3,212


2,624


594


4,794


622

Long-term borrowings


2,972


2,570


2,506


2,528


2,496


8,048


6,431

Total interest expense


38,410


33,018


30,655


17,664


7,728


102,083


16,293

Net interest income


61,474


59,039


56,721


68,092


62,990


177,234


171,869

Provision for credit losses


450


450


3,090


1,850


8,600


3,990


9,650

Net interest income after provision for credit losses


61,024


58,589


53,631


66,242


54,390


173,244


162,219

Noninterest income:















Wealth management fee income


6,057


5,870


5,512


5,170


5,009


17,439


15,700

Mortgage income, net


2,020


1,822


1,466


1,311


1,728


5,308


7,186

Service charges on deposit accounts


1,492


1,529


1,480


1,502


1,589


4,501


4,602

Card interchange income


3,321


3,331


3,033


3,100


3,012


9,685


8,543

BOLI income


1,090


1,073


1,200


1,151


966


3,363


2,667

Asset gains (losses), net


31


(318)


(38,468)


260


(46)


(38,755)


2,870

Deferred compensation plan asset market valuations


(457)


499


946


314


(571)


988


(2,354)

LSR income, net


1,108


1,135


1,155


(324)


(517)


3,398


(1,042)

Other noninterest income


1,879


1,900


1,832


2,362


1,830


5,611


4,902

Total noninterest income


16,541


16,841


(21,844)


14,846


13,000


11,538


43,074

Noninterest expense:















Personnel expense


23,944


23,900


24,328


23,705


24,136


72,172


65,008

Occupancy, equipment and office


9,027


8,845


8,783


8,246


7,641


26,655


21,476

Business development and marketing


1,869


1,946


2,121


2,303


2,281


5,936


6,169

Data processing


4,643


4,218


3,988


3,871


3,664


12,849


10,647

Intangibles amortization


1,986


2,083


2,161


2,217


1,628


6,230


4,399

FDIC assessments


1,500


1,009


540


480


480


3,049


1,440

Merger-related expense



26


163


492


519


189


1,172

Other noninterest expense


2,769


2,930


2,791


2,675


2,218


8,490


6,344

Total noninterest expense


45,738


44,957


44,875


43,989


42,567


135,570


116,655

Income (loss) before income tax expense


31,827


30,473


(13,088)


37,099


24,823


49,212


88,638

Income tax expense (benefit)


14,669


7,878


(4,190)


9,498


6,313


18,357


21,979

Net income (loss)


$          17,158


$          22,595


$          (8,898)


$          27,601


$          18,510


$           30,855


$           66,659

Earnings (loss) per common share:















Basic


$             1.16


$             1.54


$            (0.61)


$             1.88


$             1.33


$               2.10


$               4.88

Diluted


$             1.14


$             1.51


$            (0.61)


$             1.83


$             1.29


$               2.05


$               4.72

Common shares outstanding:















Basic weighted average


14,740


14,711


14,694


14,685


13,890


14,716


13,648

Diluted weighted average


15,100


14,960


14,694


15,110


14,310


15,044


14,127

 

Nicolet Bankshares, Inc.















Consolidated Financial Summary (Unaudited)













For the Three Months Ended


For the Nine Months Ended

(In thousands, except share & per share data)


9/30/2023


6/30/2023


3/31/2023


12/31/2022


9/30/2022


9/30/2023


9/30/2022

Selected Average Balances:















Loans


$  6,230,336


$  6,237,757


$  6,201,780


$  6,087,146


$  5,391,258


$    6,223,396


$    4,975,432

Investment securities


962,607


1,068,144


1,508,535


1,701,531


1,625,453


1,177,762


1,591,551

Interest-earning assets


7,676,895


7,497,935


7,830,590


7,963,485


7,161,120


7,667,911


6,818,966

Cash and cash equivalents


513,250


203,883


127,726


179,381


167,550


283,032


316,381

Goodwill and other intangibles, net


397,052


399,080


401,212


403,243


363,211


399,100


346,488

Total assets


8,417,456


8,228,600


8,570,623


8,688,741


7,856,131


8,404,999


7,550,894

Deposits


7,156,577


6,941,037


7,060,262


7,222,415


6,643,247


7,052,978


6,408,863

Interest-bearing liabilities


5,385,292


5,212,285


5,391,107


5,262,278


4,730,209


5,329,540


4,613,360

Stockholders’ equity (common)


983,133


967,142


970,108


954,970


890,205


973,509


863,272

Selected Ratios: (1)















Book value per common share


$         66.03


$         66.42


$         65.44


$         66.20


$         63.96


$          66.03


$          63.96

Tangible book value per common share (2)


$         39.18


$         39.37


$         38.20


$         38.81


$         36.21


$          39.18


$          36.21

Return on average assets


0.81 %


1.10 %


(0.42) %


1.26 %


0.93 %


0.49 %


1.18 %

Return on average common equity


6.92


9.37


(3.72)


11.47


8.25


4.24


10.32

Return on average tangible common equity (2)


11.62


15.95


(6.34)


19.85


13.93


7.18


17.25

Average equity to average assets


11.68


11.75


11.32


10.99


11.33


11.58


11.43

Stockholders’ equity to assets


11.58


11.53


11.74


11.10


10.55


11.58


10.55

Tangible common equity to tangible assets (2)


7.21


7.17


7.21


6.82


6.26


7.21


6.26

Net interest margin


3.16


3.14


2.91


3.39


3.48


3.07


3.36

Efficiency ratio


58.27


58.60


60.69


52.79


55.62


59.16


54.68

Effective tax rate


46.09


25.85


32.01


25.60


25.43


37.30


24.80

Selected Asset Quality Information:















Nonaccrual loans


$       29,507


$       25,278


$       38,895


$       38,080


$       38,326


$        29,507


$        38,326

Other real estate owned – closed branches


884


958


1,347


1,347


1,506


884


1,506

Other real estate owned


1,147


520


628


628


628


1,147


628

Nonperforming assets


$       31,538


$       26,756


$       40,870


$       40,055


$       40,460


$        31,538


$        40,460

Net loan charge-offs (recoveries)


$           101


$             51


$           167


$           597


$           216


$             319


$             133

Allowance for credit losses-loans to loans


1.01 %


1.01 %


1.00 %


1.00 %


1.01 %


1.01 %


1.01 %

Net loan charge-offs to average loans (1)


0.01


0.01


0.01


0.04


0.02


0.01


0.00

Nonperforming loans to total loans


0.47


0.41


0.62


0.62


0.64


0.47


0.64

Nonperforming assets to total assets


0.37


0.32


0.50


0.46


0.45


0.37


0.45

Stock Repurchase Information:















Common stock repurchased (dollars) (3)


$             —


$         1,519


$             —


$           786


$             —


$          1,519


$        60,697

Common stock repurchased (full shares) (3)



26,853



10,000



26,853


661,662



(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)


9/30/2023


6/30/2023


3/31/2023


12/31/2022


9/30/2022

Period End Loan Composition











Commercial & industrial


$         1,237,789


$         1,318,567


$         1,330,052


$         1,304,819


$         1,268,252

Owner-occupied commercial real estate (“CRE”)


971,397


969,202


969,064


954,599


954,933

Agricultural


1,108,261


1,068,999


1,065,909


1,088,607


1,017,498

Commercial


3,317,447


3,356,768


3,365,025


3,348,025


3,240,683

CRE investment


1,130,938


1,108,692


1,146,388


1,149,949


1,132,951

Construction & land development


326,747


337,389


333,370


318,600


306,446

Commercial real estate


1,457,685


1,446,081


1,479,758


1,468,549


1,439,397

Commercial-based loans


4,775,132


4,802,849


4,844,783


4,816,574


4,680,080

Residential construction


76,289


108,095


134,782


114,392


101,286

Residential first mortgage


1,136,748


1,072,609


1,014,166


1,016,935


970,384

Residential junior mortgage


195,432


184,873


177,026


177,332


176,428

Residential real estate


1,408,469


1,365,577


1,325,974


1,308,659


1,248,098

Retail & other


55,656


54,350


52,975


55,266


56,259

Retail-based loans


1,464,125


1,419,927


1,378,949


1,363,925


1,304,357

Total loans


$         6,239,257


$         6,222,776


$         6,223,732


$         6,180,499


$         5,984,437












Period End Deposit Composition











Noninterest-bearing demand


$         2,020,074


$         2,059,939


$         2,094,623


$         2,361,816


$         2,477,507

Interest-bearing demand


955,746


1,030,919


1,138,415


1,279,850


1,242,961

Money market


1,933,227


1,835,523


1,886,879


1,707,619


1,769,444

Savings


789,045


821,803


865,824


931,417


939,832

Time


1,484,296


1,450,420


942,838


898,219


966,158

Total deposits


$         7,182,388


$         7,198,604


$         6,928,579


$         7,178,921


$         7,395,902

Brokered transaction accounts


$            146,517


$            173,107


$            233,393


$            252,829


$            252,891

Brokered time deposits


457,433


566,405


289,181


339,066


386,101

Total brokered deposits


$            603,950


$            739,512


$            522,574


$            591,895


$            638,992

Customer transaction accounts


$         5,551,575


$         5,575,077


$         5,752,348


$         6,027,873


$         6,176,853

Customer time deposits


1,026,863


884,015


653,657


559,153


580,057

Total customer deposits (core)


$         6,578,438


$         6,459,092


$         6,406,005


$         6,587,026


$         6,756,910

 

Nicolet Bankshares, Inc.












Net Interest Income and Net Interest Margin Analysis (Unaudited)


































For the Three Months Ended




September 30, 2023


June 30, 2023


September 30, 2022




Average




Average


Average




Average


Average




Average


(In thousands)


Balance


Interest


Rate


Balance


Interest


Rate


Balance


Interest


Rate


ASSETS




















Total loans (1) (2)


$ 6,230,336


$   87,701


5.54 %


$ 6,237,757


$   84,132


5.35 %


$ 5,391,258


$   63,095


4.60 %


Investment securities (2)


962,607


6,235


2.59 %


1,068,144


6,094


2.28 %


1,625,453


6,989


1.72 %


Other interest-earning assets


483,952


6,452


5.23 %


192,034


2,357


4.87 %


144,409


1,127


3.09 %


Total interest-earning assets


7,676,895


$ 100,388


5.15 %


7,497,935


$   92,583


4.90 %


7,161,120


$   71,211


3.91 %


Other assets, net


740,561






730,665






695,011






  Total assets


$ 8,417,456






$ 8,228,600






$ 7,856,131






LIABILITIES AND STOCKHOLDERS’ EQUITY














Interest-bearing core deposits


$ 4,491,858


$   27,628


2.44 %


$ 4,278,502


$   22,728


2.13 %


$ 3,974,448


$     3,353


0.33 %


Brokered deposits


651,745


7,336


4.47 %


640,643


6,612


4.14 %


468,010


1,285


1.09 %


Total interest-bearing deposits


5,143,603


34,964


2.70 %


4,919,145


29,340


2.39 %


4,442,458


4,638


0.41 %


Wholesale funding


241,689


3,446


5.58 %


293,140


3,678


4.96 %


287,751


3,090


4.25 %


Total interest-bearing liabilities


5,385,292


$   38,410


2.83 %


5,212,285


$   33,018


2.54 %


4,730,209


$     7,728


0.65 %


Noninterest-bearing demand deposits


2,012,974






2,021,892






2,200,789






Other liabilities


36,057






27,281






34,928






Stockholders’ equity


983,133






967,142






890,205






Total liabilities and stockholders’ equity


$ 8,417,456






$ 8,228,600






$ 7,856,131






Net interest income and rate spread




$   61,978


2.32 %




$   59,565


2.36 %




$   63,483


3.26 %


Net interest margin






3.16 %






3.14 %






3.48 %


Loan purchase accounting accretion (3)




$     1,637


0.10 %




$     1,636


0.10 %




$     1,075


0.05 %
























For the Nine Months Ended










September 30, 2023


September 30, 2022










Average




Average


Average




Average








(In thousands)


Balance


Interest


Rate


Balance


Interest


Rate








ASSETS




















Total loans (1) (2)


$ 6,223,396


$ 251,019


5.33 %


$ 4,975,432


$ 167,413


4.45 %








Investment securities (2)


1,177,762


19,575


2.22 %


1,591,551


19,273


1.62 %








Other interest-earning assets


266,753


10,345


5.13 %


251,983


2,734


1.44 %








Total interest-earning assets


7,667,911


$ 280,939


4.85 %


6,818,966


$ 189,420


3.67 %








Other assets, net


737,088






731,928












  Total assets


$ 8,404,999






$ 7,550,894












LIABILITIES AND STOCKHOLDERS’ EQUITY














Interest-bearing core deposits


$ 4,365,843


$   69,943


2.14 %


$ 3,923,687


$     6,846


0.23 %








Brokered deposits


619,870


19,298


4.16 %


450,311


2,394


0.71 %








Total interest-bearing deposits


4,985,713


89,241


2.39 %


4,373,998


9,240


0.28 %








Wholesale funding


343,827


12,842


4.93 %


239,362


7,053


3.91 %








Total interest-bearing liabilities


5,329,540


$ 102,083


2.56 %


4,613,360


$   16,293


0.47 %








Noninterest-bearing demand deposits


2,067,265






2,034,865












Other liabilities


34,685






39,397












Stockholders’ equity


973,509






863,272












Total liabilities and stockholders’ equity


$ 8,404,999






$ 7,550,894












Net interest income and rate spread




$ 178,856


2.29 %




$ 173,127


3.20 %








Net interest margin






3.07 %






3.36 %








Loan purchase accounting accretion (3)




$     4,908


0.10 %




$     2,636


0.06 %










(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 above, and the related impact to net interest margin.

 

Nicolet Bankshares, Inc.















Reconciliation of Non-GAAP Financial Measures (Unaudited)













At or for the Three Months Ended


At or for the Nine Months Ended

(In thousands, except per share data)


9/30/2023


6/30/2023


3/31/2023


12/31/2022


9/30/2022


9/30/2023


9/30/2022

Adjusted net income (loss) reconciliation: (1)















Net income (loss) (GAAP)


$          17,158


$          22,595


$          (8,898)


$          27,601


$          18,510


$           30,855


$           66,659

Adjustments:















Provision expense (2)




2,340



8,000


2,340


8,000

Assets (gains) losses, net


(31)


318


38,468


(260)


46


38,755


(2,870)

Merger-related expense



26


163


492


519


189


1,172

Adjustments subtotal


(31)


344


40,971


232


8,565


41,284


6,302

Tax on Adjustments (3)


(6)


86


10,243


58


2,141


8,050


1,576

Tax – Wisconsin Tax  Law Change


6,151






9,118


Adjusted net income (Non-GAAP)


$          23,284


$          22,853


$          21,830


$          27,775


$          24,934


$           73,207


$           71,386

Diluted earnings (loss) per common share:















Diluted earnings (loss) per common share (GAAP)


$             1.14


$             1.51


$            (0.61)


$             1.83


$             1.29


$               2.05


$               4.72

Adjusted Diluted earnings per common share (Non-GAAP)


$             1.54


$             1.53


$             1.45


$             1.84


$             1.74


$               4.87


$               5.05

Tangible assets: (4)















Total assets


$     8,416,162


$     8,482,628


$     8,192,354


$     8,763,969


$     8,895,916





Goodwill and other intangibles, net


396,208


398,194


400,277


402,438


407,117





Tangible assets


$     8,019,954


$     8,084,434


$     7,792,077


$     8,361,531


$     8,488,799





Tangible common equity: (4)















Stockholders’ equity (common)


$        974,461


$        977,638


$        961,792


$        972,529


$        938,463





Goodwill and other intangibles, net


396,208


398,194


400,277


402,438


407,117





Tangible common equity


$        578,253


$        579,444


$        561,515


$        570,091


$        531,346





Tangible average common equity: (4)















Average stockholders’ equity (common)


$        983,133


$        967,142


$        970,108


$        954,970


$        890,205


$         973,509


$         863,272

Average goodwill and other intangibles, net


397,052


399,080


401,212


403,243


363,211


399,100


346,488

Average tangible common equity


$        586,081


$        568,062


$        568,896


$        551,727


$        526,994


$         574,409


$         516,784


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 our investment in Signature Bank sub debt, and the provision expense for 2022 is attributable to  the Day 2 allowance from the acquisition of  Charter Bankshares, Inc.

(3)

The effective tax rate for periods prior to the July 1, 2023, effective date of the Wisconsin 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%.

(4)

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.

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/nicolet-bankshares-inc-announces-third-quarter-2023-results-301966430.html

SOURCE Nicolet Bankshares, Inc.

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