GREEN BAY, Wis.--(BUSINESS WIRE)--Nicolet Bankshares, Inc. (NYSE: NIC) ("Nicolet") announced fourth quarter 2023 net income of $31 million and earnings per diluted common share of $2.02, compared to net income of $17 million and earnings per diluted common share of $1.14 for third quarter 2023, and net income of $28 million and earnings per diluted common share of $1.83 for fourth quarter 2022. Net income for the year ended December 31, 2023 was $62 million and earnings per diluted common share of $4.08, compared to net income of $94 million and earnings per diluted common share of $6.56 for the year ended December 31, 2022.
Net income reflected certain non-core items and the related tax effect of each, including the first quarter U.S. Treasury securities sale loss, the change in Wisconsin state tax law that impacted the third quarter, expected loss (provision expense) on a bank subordinated debt investment, a fourth quarter early contract termination charge, 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 positively impacted earnings per diluted common share $0.17 for fourth quarter 2023, compared to a negative impact of $0.40 for third quarter 2023, and $0.01 for fourth quarter 2022. For the year ended December 31, 2023, these non-core items negatively impacted earnings per diluted common share $2.64, and negatively impacted earnings per diluted common share $0.34 for full year 2022.
"I'm pleased to say Nicolet produced the highest quarterly core net income in our 23-year history," said Mike Daniels, Chairman, President and CEO of Nicolet. "The actions we took this year to position Nicolet for long-term success came to fruition as the year ended. We saw strong loan growth, solid growth in fee income, resilience in our credit quality, and a continued increase in net interest margin."
Daniels continued, "2023 was not the year we thought it would be, but we certainly made the most of the year it became. Our employees continue to shine during macroeconomic uncertainty, which shows in the fact that we grew organically in all three main revenue areas (commercial, retail, and wealth). Our value proposition and entrepreneurial spirit continue to resonate in the communities we serve. The proactive balance sheet repositioning at the beginning of the year produced the results we thought it would, as we have a clean balance sheet and a rising net interest margin. The results we saw at the end of this year give us confidence that we are well positioned to maintain our momentum into 2024. Lastly, I'd be remiss to not thank my co-founder, Bob Atwell, for his contributions to Nicolet over the past 23 years. While his transition from Chairman is complete, we look forward to his ongoing commitment and energy as a Board member to this organization."
Nicolet's 2023 results were impacted by the Wisconsin State Budget signed in July 2023 and 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 of this tax law change 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 also required a valuation allowance to be established for the State-related deferred tax asset as of the effective date of the legislation, and a one-time $9.1 million charge to state income tax expense was recognized in third quarter to establish this valuation allowance.
Nicolet's financial performance and certain balance sheet line items also 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 December 31, 2023, period end assets were $8.5 billion, an increase of $53 million (1%) from September 30, 2023, mostly growth in loans, partly offset by lower cash balances. Total loans increased $115 million (2%) from September 30, 2023, with growth in agricultural, commercial and industrial, and residential real estate loans. Total deposits of $7.2 billion at December 31, 2023, increased slightly ($15 million) from September 30, 2023. Total borrowings declined $31 million due to the early redemption of one subordinated note issuance. Total capital was $1.0 billion at December 31, 2023, an increase of $65 million over September 30, 2023, with earnings and favorable market valuations on available for sale securities, partly offset by the quarterly common stock dividend.
Asset Quality
Nonperforming assets were $28 million and represented 0.33% of total assets at December 31, 2023, compared to $32 million or 0.37% at September 30, 2023, and $40 million or 0.46% at December 31, 2022. The allowance for credit losses-loans was $64 million and represented 1.00% of total loans at December 31, 2023, compared to $63 million (or 1.01% of total loans) at September 30, 2023, and $62 million (or 1.00% of total loans) at December 31, 2022. Asset quality trends remain solid and loan net charge-offs were negligible.
Income Statement Review - Year
Net income was $62 million and adjusted net income (non-GAAP) was $101 million for the year ended December 31, 2023, compared to net income of $94 million and adjusted net income (non-GAAP) was $99 million for the year ended December 31, 2022.
Net interest income was $242 million for the year ended December 31, 2023, up $2 million from the year ended December 31, 2022, the net of $109 million higher interest income and $107 million higher interest expense. The higher interest income was largely attributable to the repricing of new and renewed loans in a rising interest rate environment, as well as the reinvestment of security sales and maturities (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. The net interest margin for 2023 was 3.18%, down 22 bps from 3.40% for 2022. The yield on interest-earning assets increased 114 bps (to 5.02%) due to the rising interest rate environment, as well as the sales and maturities of securities reinvested as investable cash, while the cost of funds increased 194 bps (to 2.65%) for 2023, attributable mainly to the repricing of deposits and funding in the higher interest rate environment.
Noninterest income of $36 million for full year 2023 was down $22 million from full year 2022, significantly impacted by the first quarter balance sheet repositioning. Excluding net asset gains (losses), noninterest income for 2023 was $69 million, a $14 million increase over 2022. The year-over-year increase included higher wealth revenue (from growth in accounts and assets under management) and card interchange income, a favorable change in the fair value of nonqualified deferred compensation plan assets, and higher net LSR income, partly offset by lower net mortgage income.
Noninterest expense of $186 million for full year 2023 reflected an increase of $25 million over 2022. Personnel expense increased $10 million due to higher salaries and fringe benefits (mostly health insurance). Non-personnel expenses increased $15 million year-over-year mostly data processing (including a $3 million early contract termination charge and higher volume-based system processing) and office expense.
Income tax expense was $25 million (effective tax rate 28.99%) for the year ended December 31, 2023, compared to $31 million (effective tax rate 25.03%) for the year ended December 31, 2022. The change in income tax expense included a $9.1 million charge to income tax expense to establish a tax valuation allowance for the Wisconsin tax law change noted above.
Income Statement Review - Quarter
Net income was $31 million and adjusted net income (non-GAAP) was $28 million for fourth quarter 2023, compared to net income of $17 million and adjusted net income (non-GAAP) of $23 million for third quarter 2023.
Net interest income was $64 million for fourth quarter 2023, up $3 million from third quarter 2023. Interest income increased $4 million mostly due to the repricing of new and renewed loans in a rising interest rate environment, while interest expense increased $1 million due to both higher average funding balances and higher average rates. The net interest margin for fourth quarter 2023 was 3.30%, up 14 bps from 3.16% for third quarter 2023. The yield on interest-earning assets increased 17 bps (to 5.32%) due to the sale of U.S. Treasury securities reinvested as investable cash, as well as the rising interest rate environment, while the cost of funds increased 7 bps (to 2.90%) for fourth quarter 2023, attributable mainly to the repricing of deposits and funding in the higher interest rate environment.
Noninterest income of $24 million for fourth quarter 2023 increased $8 million over third quarter 2023, mostly due net asset gains of $6 million in fourth quarter 2023, which included a $9 million pre-tax gain on the sale of Nicolet's member interest in UFS, LLC, partly offset by a $3 million loss on the sale of certain securities. Excluding the net asset gains (losses), noninterest income for fourth quarter 2023 was $18 million, a $2 million increase from third quarter 2023, mostly due to favorable changes in the fair value of nonqualified deferred compensation plan assets.
Noninterest expense of $50 million for fourth quarter 2023, increased $5 million over third quarter 2023. Personnel expense increased $3 million on higher health insurance and an increase in the fair value of nonqualified deferred compensation plan liabilities. Non-personnel expenses increased $2 million (7%) between the sequential quarters, mostly higher data processing (from the early contract termination charged noted above).
Income tax expense was $7 million (effective tax rate 18.06%) for fourth quarter 2023, compared to $15 million (effective tax rate 46.09%) for third quarter 2023. Third quarter 2023 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.
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, potential expansion into other jurisdictions that impose different or higher taxes and our ability to generate loans that qualify for the Wisconsin tax reduction / elimination. 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) | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | $ | 129,898 | $ | 109,414 | $ | 122,021 | $ | 93,462 | $ | 121,211 | ||||||||||
Interest-earning deposits | 361,533 | 436,466 | 383,185 | 20,718 | 33,512 | |||||||||||||||
Cash and cash equivalents | 491,431 | 545,880 | 505,206 | 114,180 | 154,723 | |||||||||||||||
Certificates of deposit in other banks | 6,374 | 7,598 | 9,808 | 11,293 | 12,518 | |||||||||||||||
Securities available for sale, at fair value | 802,573 | 793,826 | 921,108 | 1,023,176 | 917,618 | |||||||||||||||
Securities held to maturity, at amortized cost | - | - | - | - | 679,128 | |||||||||||||||
Other investments | 57,560 | 58,367 | 57,578 | 57,482 | 65,286 | |||||||||||||||
Loans held for sale | 4,160 | 6,500 | 3,849 | 4,962 | 1,482 | |||||||||||||||
Loans | 6,353,942 | 6,239,257 | 6,222,776 | 6,223,732 | 6,180,499 | |||||||||||||||
Allowance for credit losses - loans | (63,610 | ) | (63,160 | ) | (62,811 | ) | (62,412 | ) | (61,829 | ) | ||||||||||
Loans, net | 6,290,332 | 6,176,097 | 6,159,965 | 6,161,320 | 6,118,670 | |||||||||||||||
Premises and equipment, net | 118,756 | 117,744 | 117,278 | 112,569 | 108,956 | |||||||||||||||
Bank owned life insurance ("BOLI") | 169,392 | 168,223 | 167,192 | 166,107 | 165,137 | |||||||||||||||
Goodwill and other intangibles, net | 394,366 | 396,208 | 398,194 | 400,277 | 402,438 | |||||||||||||||
Accrued interest receivable and other assets | 133,734 | 145,719 | 142,450 | 140,988 | 138,013 | |||||||||||||||
Total assets | $ | 8,468,678 | $ | 8,416,162 | $ | 8,482,628 | $ | 8,192,354 | $ | 8,763,969 | ||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Noninterest-bearing demand deposits | $ | 1,958,709 | $ | 2,020,074 | $ | 2,059,939 | $ | 2,094,623 | $ | 2,361,816 | ||||||||||
Interest-bearing deposits | 5,239,091 | 5,162,314 | 5,138,665 | 4,833,956 | 4,817,105 | |||||||||||||||
Total deposits | 7,197,800 | 7,182,388 | 7,198,604 | 6,928,579 | 7,178,921 | |||||||||||||||
Short-term borrowings | - | - | 50,000 | 50,000 | 317,000 | |||||||||||||||
Long-term borrowings | 166,930 | 197,754 | 197,577 | 197,448 | 225,342 | |||||||||||||||
Accrued interest payable and other liabilities | 64,941 | 61,559 | 58,809 | 54,535 | 70,177 | |||||||||||||||
Total liabilities | 7,429,671 | 7,441,701 | 7,504,990 | 7,230,562 | 7,791,440 | |||||||||||||||
Stockholders' Equity: | ||||||||||||||||||||
Common stock | 149 | 147 | 147 | 147 | 147 | |||||||||||||||
Additional paid-in capital | 633,770 | 626,348 | 624,897 | 623,746 | 621,988 | |||||||||||||||
Retained earnings | 458,261 | 431,317 | 417,863 | 398,966 | 407,864 | |||||||||||||||
Accumulated other comprehensive income (loss) | (53,173 | ) | (83,351 | ) | (65,269 | ) | (61,067 | ) | (57,470 | ) | ||||||||||
Total stockholders' equity | 1,039,007 | 974,461 | 977,638 | 961,792 | 972,529 | |||||||||||||||
Total liabilities and stockholders' equity | $ | 8,468,678 | $ | 8,416,162 | $ | 8,482,628 | $ | 8,192,354 | $ | 8,763,969 | ||||||||||
Common shares outstanding | 14,894,209 | 14,757,565 | 14,717,938 | 14,698,265 | 14,690,614 | |||||||||||||||
Nicolet Bankshares, Inc. | |||||||||||||||||||||||||||
Consolidated Statements of Income (Loss) (Unaudited) | |||||||||||||||||||||||||||
For the Three Months Ended | For the Years Ended | ||||||||||||||||||||||||||
(In thousands, except per share data) | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||||||||||||||||
Interest income: | |||||||||||||||||||||||||||
Loans, including loan fees | $ | 90,265 | $ | 87,657 | $ | 84,091 | $ | 79,142 | $ | 76,367 | $ | 341,155 | $ | 243,680 | |||||||||||||
Taxable investment securities | 4,737 | 4,351 | 4,133 | 4,961 | 5,771 | 18,182 | 21,383 | ||||||||||||||||||||
Tax-exempt investment securities | 1,394 | 1,424 | 1,476 | 1,737 | 1,915 | 6,031 | 4,418 | ||||||||||||||||||||
Other interest income | 7,149 | 6,452 | 2,357 | 1,536 | 1,703 | 17,494 | 4,437 | ||||||||||||||||||||
Total interest income | 103,545 | 99,884 | 92,057 | 87,376 | 85,756 | 382,862 | 273,918 | ||||||||||||||||||||
Interest expense: | |||||||||||||||||||||||||||
Deposits | 36,583 | 34,964 | 29,340 | 24,937 | 12,512 | 125,824 | 21,752 | ||||||||||||||||||||
Short-term borrowings | - | 474 | 1,108 | 3,212 | 2,624 | 4,794 | 3,246 | ||||||||||||||||||||
Long-term borrowings | 2,680 | 2,972 | 2,570 | 2,506 | 2,528 | 10,728 | 8,959 | ||||||||||||||||||||
Total interest expense | 39,263 | 38,410 | 33,018 | 30,655 | 17,664 | 141,346 | 33,957 | ||||||||||||||||||||
Net interest income | 64,282 | 61,474 | 59,039 | 56,721 | 68,092 | 241,516 | 239,961 | ||||||||||||||||||||
Provision for credit losses | 1,000 | 450 | 450 | 3,090 | 1,850 | 4,990 | 11,500 | ||||||||||||||||||||
Net interest income after provision for credit losses | 63,282 | 61,024 | 58,589 | 53,631 | 66,242 | 236,526 | 228,461 | ||||||||||||||||||||
Noninterest income: | |||||||||||||||||||||||||||
Wealth management fee income | 6,308 | 6,057 | 5,870 | 5,512 | 5,170 | 23,747 | 20,870 | ||||||||||||||||||||
Mortgage income, net | 1,856 | 2,020 | 1,822 | 1,466 | 1,311 | 7,164 | 8,497 | ||||||||||||||||||||
Service charges on deposit accounts | 1,475 | 1,492 | 1,529 | 1,480 | 1,502 | 5,976 | 6,104 | ||||||||||||||||||||
Card interchange income | 3,306 | 3,321 | 3,331 | 3,033 | 3,100 | 12,991 | 11,643 | ||||||||||||||||||||
BOLI income | 1,161 | 1,090 | 1,073 | 1,200 | 1,151 | 4,524 | 3,818 | ||||||||||||||||||||
Asset gains (losses), net | 5,947 | 31 | (318 | ) | (38,468 | ) | 260 | (32,808 | ) | 3,130 | |||||||||||||||||
Deferred compensation plan asset market valuations | 949 | (457 | ) | 499 | 946 | 314 | 1,937 | (2,040 | ) | ||||||||||||||||||
LSR income, net | 1,027 | 1,108 | 1,135 | 1,155 | (324 | ) | 4,425 | (1,366 | ) | ||||||||||||||||||
Other noninterest income | 2,405 | 1,879 | 1,900 | 1,832 | 2,362 | 8,016 | 7,264 | ||||||||||||||||||||
Total noninterest income | 24,434 | 16,541 | 16,841 | (21,844 | ) | 14,846 | 35,972 | 57,920 | |||||||||||||||||||
Noninterest expense: | |||||||||||||||||||||||||||
Personnel expense | 26,937 | 23,944 | 23,900 | 24,328 | 23,705 | 99,109 | 88,713 | ||||||||||||||||||||
Occupancy, equipment and office | 9,567 | 9,027 | 8,845 | 8,783 | 8,246 | 36,222 | 29,722 | ||||||||||||||||||||
Business development and marketing | 1,854 | 1,869 | 1,946 | 2,121 | 2,303 | 7,790 | 8,472 | ||||||||||||||||||||
Data processing | 7,043 | 4,643 | 4,218 | 3,988 | 3,871 | 19,892 | 14,518 | ||||||||||||||||||||
Intangibles amortization | 1,842 | 1,986 | 2,083 | 2,161 | 2,217 | 8,072 | 6,616 | ||||||||||||||||||||
FDIC assessments | 950 | 1,500 | 1,009 | 540 | 480 | 3,999 | 1,920 | ||||||||||||||||||||
Merger-related expense | - | - | 26 | 163 | 492 | 189 | 1,664 | ||||||||||||||||||||
Other noninterest expense | 2,103 | 2,769 | 2,930 | 2,791 | 2,675 | 10,593 | 9,019 | ||||||||||||||||||||
Total noninterest expense | 50,296 | 45,738 | 44,957 | 44,875 | 43,989 | 185,866 | 160,644 | ||||||||||||||||||||
Income (loss) before income tax expense | 37,420 | 31,827 | 30,473 | (13,088 | ) | 37,099 | 86,632 | 125,737 | |||||||||||||||||||
Income tax expense (benefit) | 6,759 | 14,669 | 7,878 | (4,190 | ) | 9,498 | 25,116 | 31,477 | |||||||||||||||||||
Net income (loss) | $ | 30,661 | $ | 17,158 | $ | 22,595 | $ | (8,898 | ) | $ | 27,601 | $ | 61,516 | $ | 94,260 | ||||||||||||
Earnings (loss) per common share: | |||||||||||||||||||||||||||
Basic | $ | 2.07 | $ | 1.16 | $ | 1.54 | $ | (0.61 | ) | $ | 1.88 | $ | 4.17 | $ | 6.78 | ||||||||||||
Diluted | $ | 2.02 | $ | 1.14 | $ | 1.51 | $ | (0.61 | ) | $ | 1.83 | $ | 4.08 | $ | 6.56 | ||||||||||||
Common shares outstanding: | |||||||||||||||||||||||||||
Basic weighted average | 14,823 | 14,740 | 14,711 | 14,694 | 14,685 | 14,743 | 13,909 | ||||||||||||||||||||
Diluted weighted average | 15,142 | 15,100 | 14,960 | 14,694 | 15,110 | 15,071 | 14,375 | ||||||||||||||||||||
Nicolet Bankshares, Inc. | ||||||||||||||||||||||||||||
Consolidated Financial Summary (Unaudited) | ||||||||||||||||||||||||||||
For the Three Months Ended | For the Years Ended | |||||||||||||||||||||||||||
(In thousands, except share & per share data) | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | |||||||||||||||||||||
Selected Average Balances: | ||||||||||||||||||||||||||||
Loans | $ | 6,263,971 | $ | 6,230,336 | $ | 6,237,757 | $ | 6,201,780 | $ | 6,087,146 | $ | 6,233,623 | $ | 5,255,646 | ||||||||||||||
Investment securities | 897,437 | 962,607 | 1,068,144 | 1,508,535 | 1,701,531 | 1,107,105 | 1,619,272 | |||||||||||||||||||||
Interest-earning assets | 7,683,495 | 7,676,895 | 7,497,935 | 7,830,590 | 7,963,485 | 7,671,839 | 7,107,449 | |||||||||||||||||||||
Cash and cash equivalents | 558,473 | 513,250 | 203,883 | 127,726 | 179,381 | 352,458 | 281,849 | |||||||||||||||||||||
Goodwill and other intangibles, net | 395,158 | 397,052 | 399,080 | 401,212 | 403,243 | 398,106 | 361,471 | |||||||||||||||||||||
Total assets | 8,415,169 | 8,417,456 | 8,228,600 | 8,570,623 | 8,688,741 | 8,407,562 | 7,837,695 | |||||||||||||||||||||
Deposits | 7,189,650 | 7,156,577 | 6,941,037 | 7,060,262 | 7,222,415 | 7,087,427 | 6,613,924 | |||||||||||||||||||||
Interest-bearing liabilities | 5,358,445 | 5,385,292 | 5,212,285 | 5,391,107 | 5,262,278 | 5,336,825 | 4,776,924 | |||||||||||||||||||||
Stockholders' equity (common) | 996,745 | 983,133 | 967,142 | 970,108 | 954,970 | 979,366 | 886,385 | |||||||||||||||||||||
Selected Ratios: (1) | ||||||||||||||||||||||||||||
Book value per common share | $ | 69.76 | $ | 66.03 | $ | 66.42 | $ | 65.44 | $ | 66.20 | $ | 69.76 | $ | 66.20 | ||||||||||||||
Tangible book value per common share (2) | $ | 43.28 | $ | 39.18 | $ | 39.37 | $ | 38.20 | $ | 38.81 | $ | 43.28 | $ | 38.81 | ||||||||||||||
Return on average assets | 1.45 | % | 0.81 | % | 1.10 | % | (0.42 | ) % | 1.26 | % | 0.73 | % | 1.20 | % | ||||||||||||||
Return on average common equity | 12.20 | 6.92 | 9.37 | (3.72 | ) | 11.47 | 6.28 | 10.63 | ||||||||||||||||||||
Return on average tangible common equity (2) | 20.22 | 11.62 | 15.95 | (6.34 | ) | 19.85 | 10.58 | 17.96 | ||||||||||||||||||||
Average equity to average assets | 11.84 | 11.68 | 11.75 | 11.32 | 10.99 | 11.65 | 11.31 | |||||||||||||||||||||
Stockholders' equity to assets | 12.27 | 11.58 | 11.53 | 11.74 | 11.10 | 12.27 | 11.10 | |||||||||||||||||||||
Tangible common equity to tangible assets (2) | 7.98 | 7.21 | 7.17 | 7.21 | 6.82 | 7.98 | 6.82 | |||||||||||||||||||||
Net interest margin | 3.30 | 3.16 | 3.14 | 2.91 | 3.39 | 3.18 | 3.40 | |||||||||||||||||||||
Efficiency ratio | 60.41 | 58.27 | 58.60 | 60.69 | 52.79 | 59.50 | 54.15 | |||||||||||||||||||||
Effective tax rate | 18.06 | 46.09 | 25.85 | 32.01 | 25.60 | 28.99 | 25.03 | |||||||||||||||||||||
Selected Asset Quality Information: | ||||||||||||||||||||||||||||
Nonaccrual loans | $ | 26,625 | $ | 29,507 | $ | 25,278 | $ | 38,895 | $ | 38,080 | $ | 26,625 | $ | 38,080 | ||||||||||||||
Other real estate owned - closed branches | 808 | 884 | 958 | 1,347 | 1,347 | 808 | 1,347 | |||||||||||||||||||||
Other real estate owned | 459 | 1,147 | 520 | 628 | 628 | 459 | 628 | |||||||||||||||||||||
Nonperforming assets | $ | 27,892 | $ | 31,538 | $ | 26,756 | $ | 40,870 | $ | 40,055 | $ | 27,892 | $ | 40,055 | ||||||||||||||
Net loan charge-offs (recoveries) | $ | 550 | $ | 101 | $ | 51 | $ | 167 | $ | 597 | $ | 869 | $ | 730 | ||||||||||||||
Allowance for credit losses-loans to loans | 1.00 | % | 1.01 | % | 1.01 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||||||
Net loan charge-offs to average loans (1) | 0.03 | 0.01 | 0.01 | 0.01 | 0.04 | 0.01 | 0.01 | |||||||||||||||||||||
Nonperforming loans to total loans | 0.42 | 0.47 | 0.41 | 0.62 | 0.62 | 0.42 | 0.62 | |||||||||||||||||||||
Nonperforming assets to total assets | 0.33 | 0.37 | 0.32 | 0.50 | 0.46 | 0.33 | 0.46 | |||||||||||||||||||||
Stock Repurchase Information: | ||||||||||||||||||||||||||||
Common stock repurchased (dollars) (3) | $ | - | $ | - | $ | 1,519 | $ | - | $ | 786 | $ | 1,519 | $ | 61,483 | ||||||||||||||
Common stock repurchased (full shares) (3) | - | - | 26,853 | - | 10,000 | 26,853 | 671,662 | |||||||||||||||||||||
| (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) | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | ||||||||||
Period End Loan Composition | |||||||||||||||
Commercial & industrial | $ | 1,284,009 | $ | 1,237,789 | $ | 1,318,567 | $ | 1,330,052 | $ | 1,304,819 | |||||
Owner-occupied commercial real estate ("CRE") | 956,594 | 971,397 | 969,202 | 969,064 | 954,599 | ||||||||||
Agricultural | 1,161,531 | 1,108,261 | 1,068,999 | 1,065,909 | 1,088,607 | ||||||||||
Commercial | 3,402,134 | 3,317,447 | 3,356,768 | 3,365,025 | 3,348,025 | ||||||||||
CRE investment | 1,142,251 | 1,130,938 | 1,108,692 | 1,146,388 | 1,149,949 | ||||||||||
Construction & land development | 310,110 | 326,747 | 337,389 | 333,370 | 318,600 | ||||||||||
Commercial real estate | 1,452,361 | 1,457,685 | 1,446,081 | 1,479,758 | 1,468,549 | ||||||||||
Commercial-based loans | 4,854,495 | 4,775,132 | 4,802,849 | 4,844,783 | 4,816,574 | ||||||||||
Residential construction | 75,726 | 76,289 | 108,095 | 134,782 | 114,392 | ||||||||||
Residential first mortgage | 1,167,109 | 1,136,748 | 1,072,609 | 1,014,166 | 1,016,935 | ||||||||||
Residential junior mortgage | 200,884 | 195,432 | 184,873 | 177,026 | 177,332 | ||||||||||
Residential real estate | 1,443,719 | 1,408,469 | 1,365,577 | 1,325,974 | 1,308,659 | ||||||||||
Retail & other | 55,728 | 55,656 | 54,350 | 52,975 | 55,266 | ||||||||||
Retail-based loans | 1,499,447 | 1,464,125 | 1,419,927 | 1,378,949 | 1,363,925 | ||||||||||
Total loans | $ | 6,353,942 | $ | 6,239,257 | $ | 6,222,776 | $ | 6,223,732 | $ | 6,180,499 | |||||
Period End Deposit Composition | |||||||||||||||
Noninterest-bearing demand | $ | 1,958,709 | $ | 2,020,074 | $ | 2,059,939 | $ | 2,094,623 | $ | 2,361,816 | |||||
Interest-bearing demand | 1,055,520 | 955,746 | 1,030,919 | 1,138,415 | 1,279,850 | ||||||||||
Money market | 1,891,287 | 1,933,227 | 1,835,523 | 1,886,879 | 1,707,619 | ||||||||||
Savings | 768,401 | 789,045 | 821,803 | 865,824 | 931,417 | ||||||||||
Time | 1,523,883 | 1,484,296 | 1,450,420 | 942,838 | 898,219 | ||||||||||
Total deposits | $ | 7,197,800 | $ | 7,182,388 | $ | 7,198,604 | $ | 6,928,579 | $ | 7,178,921 | |||||
Brokered transaction accounts | $ | 166,861 | $ | 146,517 | $ | 173,107 | $ | 233,393 | $ | 252,829 | |||||
Brokered time deposits | 448,582 | 457,433 | 566,405 | 289,181 | 339,066 | ||||||||||
Total brokered deposits | $ | 615,443 | $ | 603,950 | $ | 739,512 | $ | 522,574 | $ | 591,895 | |||||
Customer transaction accounts | $ | 5,507,056 | $ | 5,551,575 | $ | 5,575,077 | $ | 5,752,348 | $ | 6,027,873 | |||||
Customer time deposits | 1,075,301 | 1,026,863 | 884,015 | 653,657 | 559,153 | ||||||||||
Total customer deposits (core) | $ | 6,582,357 | $ | 6,578,438 | $ | 6,459,092 | $ | 6,406,005 | $ | 6,587,026 | |||||
Nicolet Bankshares, Inc. | |||||||||||||||||||||||||||
Net Interest Income and Net Interest Margin Analysis (Unaudited) | |||||||||||||||||||||||||||
For the Three Months Ended | |||||||||||||||||||||||||||
December 31, 2023 | September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Average | Average | Average | Average | Average | Average | ||||||||||||||||||||||
(In thousands) | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||
Total loans (1) (2) | $ | 6,263,971 | $ | 90,313 | 5.66 | % | $ | 6,230,336 | $ | 87,701 | 5.54 | % | $ | 6,087,146 | $ | 76,406 | 4.93 | % | |||||||||
Investment securities (2) | 897,437 | 6,567 | 2.93 | % | 962,607 | 6,235 | 2.59 | % | 1,701,531 | 8,302 | 1.95 | % | |||||||||||||||
Other interest-earning assets | 522,087 | 7,149 | 5.37 | % | 483,952 | 6,452 | 5.23 | % | 174,808 | 1,703 | 3.85 | % | |||||||||||||||
Total interest-earning assets | 7,683,495 | $ | 104,029 | 5.32 | % | 7,676,895 | $ | 100,388 | 5.15 | % | 7,963,485 | $ | 86,411 | 4.27 | % | ||||||||||||
Other assets, net | 731,674 | 740,561 | 725,256 | ||||||||||||||||||||||||
Total assets | $ | 8,415,169 | $ | 8,417,456 | $ | 8,688,741 | |||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||||||||||
Interest-bearing core deposits | $ | 4,570,493 | $ | 29,730 | 2.58 | % | $ | 4,491,858 | $ | 27,628 | 2.44 | % | $ | 4,175,671 | $ | 8,477 | 0.81 | % | |||||||||
Brokered deposits | 601,379 | 6,853 | 4.52 | % | 651,745 | 7,336 | 4.47 | % | 611,226 | 4,035 | 2.62 | % | |||||||||||||||
Total interest-bearing deposits | 5,171,872 | 36,583 | 2.81 | % | 5,143,603 | 34,964 | 2.70 | % | 4,786,897 | 12,512 | 1.04 | % | |||||||||||||||
Wholesale funding | 186,573 | 2,680 | 5.62 | % | 241,689 | 3,446 | 5.58 | % | 475,381 | 5,152 | 4.27 | % | |||||||||||||||
Total interest-bearing liabilities | 5,358,445 | $ | 39,263 | 2.90 | % | 5,385,292 | $ | 38,410 | 2.83 | % | 5,262,278 | $ | 17,664 | 1.33 | % | ||||||||||||
Noninterest-bearing demand deposits | 2,017,778 | 2,012,974 | 2,435,518 | ||||||||||||||||||||||||
Other liabilities | 42,201 | 36,057 | 35,975 | ||||||||||||||||||||||||
Stockholders' equity | 996,745 | 983,133 | 954,970 | ||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 8,415,169 | $ | 8,417,456 | $ | 8,688,741 | |||||||||||||||||||||
Net interest income and rate spread | $ | 64,766 | 2.42 | % | $ | 61,978 | 2.32 | % | $ | 68,747 | 2.94 | % | |||||||||||||||
Net interest margin | 3.30 | % | 3.16 | % | 3.39 | % | |||||||||||||||||||||
Loan purchase accounting accretion (3) | $ | 1,587 | 0.10 | % | $ | 1,637 | 0.10 | % | $ | 1,935 | 0.09 | % | |||||||||||||||
For the Years Ended | |||||||||||||||||||||||||||
December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||
Average | Average | Average | Average | ||||||||||||||||||||||||
(In thousands) | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||
Total loans (1) (2) | $ | 6,233,623 | $ | 341,332 | 5.48 | % | $ | 5,255,646 | $ | 243,819 | 4.64 | % | |||||||||||||||
Investment securities (2) | 1,107,105 | 26,142 | 2.36 | % | 1,619,272 | 27,575 | 1.70 | % | |||||||||||||||||||
Other interest-earning assets | 331,111 | 17,494 | 5.28 | % | 232,531 | 4,437 | 1.91 | % | |||||||||||||||||||
Total interest-earning assets | 7,671,839 | $ | 384,968 | 5.02 | % | 7,107,449 | $ | 275,831 | 3.88 | % | |||||||||||||||||
Other assets, net | 735,723 | 730,246 | |||||||||||||||||||||||||
Total assets | $ | 8,407,562 | $ | 7,837,695 | |||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||||||||||
Interest-bearing core deposits | $ | 4,417,426 | $ | 99,673 | 2.26 | % | $ | 3,987,201 | $ | 15,324 | 0.38 | % | |||||||||||||||
Brokered deposits | 615,209 | 26,151 | 4.25 | % | 490,871 | 6,428 | 1.31 | % | |||||||||||||||||||
Total interest-bearing deposits | 5,032,635 | 125,824 | 2.50 | % | 4,478,072 | 21,752 | 0.49 | % | |||||||||||||||||||
Wholesale funding | 304,190 | 15,522 | 5.10 | % | 298,852 | 12,205 | 4.08 | % | |||||||||||||||||||
Total interest-bearing liabilities | 5,336,825 | $ | 141,346 | 2.65 | % | 4,776,924 | $ | 33,957 | 0.71 | % | |||||||||||||||||
Noninterest-bearing demand deposits | 2,054,792 | 2,135,852 | |||||||||||||||||||||||||
Other liabilities | 36,579 | 38,534 | |||||||||||||||||||||||||
Stockholders' equity | 979,366 | 886,385 | |||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 8,407,562 | $ | 7,837,695 | |||||||||||||||||||||||
Net interest income and rate spread | $ | 243,622 | 2.37 | % | $ | 241,874 | 3.17 | % | |||||||||||||||||||
Net interest margin | 3.18 | % | 3.40 | % | |||||||||||||||||||||||
Loan purchase accounting accretion (3) | $ | 6,496 | 0.10 | % | $ | 4,572 | 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) | ||||||||||||||||||||||||||
For the Three Months Ended | For the Years Ended | |||||||||||||||||||||||||
(In thousands, except per share data) | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | |||||||||||||||||||
Adjusted net income (loss) reconciliation: (1) | ||||||||||||||||||||||||||
Net income (loss) (GAAP) | $ | 30,661 | $ | 17,158 | $ | 22,595 | $ | (8,898 | ) | $ | 27,601 | $ | 61,516 | $ | 94,260 | |||||||||||
Adjustments: | ||||||||||||||||||||||||||
Provision expense (2) | - | - | - | 2,340 | - | 2,340 | 8,000 | |||||||||||||||||||
Assets (gains) losses, net | (5,947 | ) | (31 | ) | 318 | 38,468 | (260 | ) | 32,808 | (3,130 | ) | |||||||||||||||
Merger-related expense | - | - | 26 | 163 | 492 | 189 | 1,664 | |||||||||||||||||||
Contract termination charge | 2,689 | - | - | - | - | 2,689 | - | |||||||||||||||||||
Adjustments subtotal | (3,258 | ) | (31 | ) | 344 | 40,971 | 232 | 38,026 | 6,534 | |||||||||||||||||
Tax on Adjustments (3) | (635 | ) | (6 | ) | 86 | 10,243 | 58 | 7,415 | 1,634 | |||||||||||||||||
Tax - Wisconsin Tax Law Change (4) | - | 6,151 | - | - | - | 9,118 | - | |||||||||||||||||||
Adjusted net income (Non-GAAP) | $ | 28,038 | $ | 23,284 | $ | 22,853 | $ | 21,830 | $ | 27,775 | $ | 101,245 | $ | 99,161 | ||||||||||||
Diluted earnings (loss) per common share: | ||||||||||||||||||||||||||
Diluted earnings (loss) per common share (GAAP) | $ | 2.02 | $ | 1.14 | $ | 1.51 | $ | (0.61 | ) | $ | 1.83 | $ | 4.08 | $ | 6.56 | |||||||||||
Adjusted Diluted earnings per common share (Non-GAAP) | $ | 1.85 | $ | 1.54 | $ | 1.53 | $ | 1.45 | $ | 1.84 | $ | 6.72 | $ | 6.90 | ||||||||||||
Tangible assets: (5) | ||||||||||||||||||||||||||
Total assets | $ | 8,468,678 | $ | 8,416,162 | $ | 8,482,628 | $ | 8,192,354 | $ | 8,763,969 | ||||||||||||||||
Goodwill and other intangibles, net | 394,366 | 396,208 | 398,194 | 400,277 | 402,438 | |||||||||||||||||||||
Tangible assets | $ | 8,074,312 | $ | 8,019,954 | $ | 8,084,434 | $ | 7,792,077 | $ | 8,361,531 | ||||||||||||||||
Tangible common equity: (5) | ||||||||||||||||||||||||||
Stockholders' equity (common) | $ | 1,039,007 | $ | 974,461 | $ | 977,638 | $ | 961,792 | $ | 972,529 | ||||||||||||||||
Goodwill and other intangibles, net | 394,366 | 396,208 | 398,194 | 400,277 | 402,438 | |||||||||||||||||||||
Tangible common equity | $ | 644,641 | $ | 578,253 | $ | 579,444 | $ | 561,515 | $ | 570,091 | ||||||||||||||||
Tangible average common equity: (5) | ||||||||||||||||||||||||||
Average stockholders' equity (common) | $ | 996,745 | $ | 983,133 | $ | 967,142 | $ | 970,108 | $ | 954,970 | $ | 979,366 | $ | 886,385 | ||||||||||||
Average goodwill and other intangibles, net | 395,158 | 397,052 | 399,080 | 401,212 | 403,243 | 398,106 | 361,471 | |||||||||||||||||||
Average tangible common equity | $ | 601,587 | $ | 586,081 | $ | 568,062 | $ | 568,896 | $ | 551,727 | $ | 581,260 | $ | 524,914 | ||||||||||||
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, 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 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. |
Contacts
Investor Relations
Eric Radzak
ir@nicoletbank.com
920.617.4540
Media Inquiries
Jeff Gahnz
voice@nicoletbank.com
920.430.7344
