# EDGAR Filing Document

**Accession Number:** 0001174850
**File Stem:** 0001174850-23-000004
**Filing Date:** 2023-1
**Character Count:** 43625
**Document Hash:** 7a9a9683913c0d65304c8f5e92c1d42e
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001174850-23-000004.hdr.sgml**: 20230117

**ACCESSION NUMBER**: 0001174850-23-000004

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230117

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230117

**DATE AS OF CHANGE**: 20230117

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NICOLET BANKSHARES INC
- **CENTRAL INDEX KEY:** 0001174850
- **STANDARD INDUSTRIAL CLASSIFICATION:** NATIONAL COMMERCIAL BANKS [6021]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** WI
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-37700
- **FILM NUMBER:** 23531679

**BUSINESS ADDRESS:**
- **STREET 1:** 111 N WASHINGTON ST
- **CITY:** GREEN BAY
- **STATE:** WI
- **ZIP:** 54301
- **BUSINESS PHONE:** 920 430 1400

**MAIL ADDRESS:**
- **STREET 1:** 111 N WASHINGTON ST
- **CITY:** GREEN BAY
- **STATE:** WI
- **ZIP:** 54301

?xml version="1.0" ? nic-20230117

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF**

**THE SECURITIES EXCHANGE ACT OF 1934**

**Date of Report (Date of earliest event reported): January 17, 2023** 

**NICOLET BANKSHARES, INC.**

*(Exact name of registrant as specified in its charter)*

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| | | |
|:---|:---|:---|
| **Wisconsin** | **001-37700** | **47-0871001** |
| *(State or other jurisdiction<br>of incorporation)* | *(Commission<br>File Number)* | *(IRS Employer<br>Identification No.)* |

---

**111 North Washington Street**

**Green Bay, Wisconsin 54301**

*(Address of principal executive offices)*

**(920) 430-1400**

*(Registrant's telephone number, including area code)*

**Not Applicable**

*(Former name or former address, if changed since last report)*

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| <u>Title of each class</u> | <u>Trading Symbol(s)</u> | <u>Name of each exchange on which registered</u> |
| **Common stock, par value $0.01 per share** | **NIC** | **New York Stock Exchange** |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter.)

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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| | |
|:---|:---|
| **Item 2.02** | **Results of Operations and Financial Condition.** |

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On January 17, 2023, Nicolet Bankshares, Inc. ("Nicolet") announced its earnings for the quarter and year ended December 31, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Pursuant to General Instruction B.2 of Form 8-K, the information in this Item 2.02 and Exhibit 99.1, is being furnished to the Securities and Exchange Commission and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that Section. Furthermore, the information in this Item 2.02 and Exhibit 99.1 shall not be deemed to be incorporated by reference into Nicolet's filings under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

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| | |
|:---|:---|
| **Item 9.01** | **Financial Statements and Exhibits.** |

---

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| | |
|:---|:---|
| Exhibit No. | Description of Exhibit |
| 99.1 | <u>[Press Release, dated January 17, 2023](exhibit99_14q2022pressrele.htm)</u> |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document |

---

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**Signatures**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | | |
|:---|:---|:---|:---|
| Date: | January 17, 2023 | NICOLET BANKSHARES, INC. | NICOLET BANKSHARES, INC. |
|  |  | By: | /s/ H. Phillip Moore, Jr. |
|  |  |  | H. Phillip Moore, Jr. |
|  |  |  | Chief Financial Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

![nicoletbanksharesa08.jpg](nicoletbanksharesa08.jpg)

**FOR IMMEDIATE RELEASE**

**NICOLET BANKSHARES, INC. ANNOUNCES 2022 EARNINGS**

***• Net income of $28 million or adjusted net income (non-GAAP) of $28 million, compared to net income of $19 million or adjusted net income (non-GAAP) of $25 million in the prior quarter, and net income of $16 million or adjusted net income (non-GAAP) of $24 million in fourth quarter 2021, impacted by the Charter acquisition in third quarter 2022 and the County acquisition in fourth quarter 2021***

***• Record net income of $94 million or adjusted net income (non-GAAP) of $99 million for 2022, compared to net income of $61 million or adjusted net income (non-GAAP) of $73 million for 2021***

***• Earnings per diluted common share of $1.83 for fourth quarter and $6.56 for 2022, or adjusted earnings per diluted common share (non-GAAP) of $1.84 for fourth quarter and $6.90 for 2022***

***• Return on average assets of 1.26% for fourth quarter and 1.20% for 2022***

**Green Bay, Wisconsin, January 17, 2023 -** Nicolet Bankshares, Inc. (NYSE: NIC) ("Nicolet" or the "Company") announced fourth quarter 2022 net income of $28 million and earnings per diluted common share of $1.83, compared to $19 million and $1.29 for third quarter 2022, and $16 million and $1.25 for fourth quarter 2021, respectively. Annualized quarterly return on average assets was 1.26%, 0.93% and 0.96%, for fourth quarter 2022, third quarter 2022 and fourth quarter 2021, respectively.

Net income for the year ended December 31, 2022 was $94 million and earnings per diluted common share was $6.56, compared to net income of $61 million and earnings per diluted common share of $5.44 for the year ended December 31, 2021. Annualized return on average assets was 1.20% and 1.15% for 2022 and 2021, respectively.

Net income reflected non-core items and the related tax effect of each, including merger and integration related expenses, Day 2 credit provision expense required under the CECL model, branch optimization costs, contract negotiation expenses, and gains on other assets and investments. These non-core items negatively impacted earnings per diluted common share $0.01 for fourth quarter 2022, $0.45 for third quarter 2022, and $0.58 for fourth quarter 2021. For the full year, non-core items negatively impacted diluted earnings per common share $0.34 for 2022 and $1.13 for 2021.

On August 26, 2022, Nicolet completed its acquisition of Charter Bankshares, Inc. ("Charter"). In the merger, Charter shareholders received approximately 1.26 million shares of Nicolet common stock (valued at $98 million) and cash consideration of $39 million, for a total purchase price of $137 million. Upon consummation, Charter added total assets of $1.1 billion, loans of $827 million, deposits of $869 million, and preliminary goodwill of $50 million.

"I know that most people reading this care more about what 2023 looks like; however, it is important to pause and reflect on another record quarter and year at Nicolet in 2022." said Mike Daniels, President and CEO of Nicolet. "We made $94 million in net income and had exceptional loan growth while maintaining excellent credit quality. We also added experience and depth to our management team, and we successfully integrated our acquisition of Charter. All told, we are pleased with our 2022 results."

"We go into 2023 with trust in our people and our operating history; that whatever macroeconomic conditions arise, we will find success. The base of Nicolet has always been relationships, not transactions, which stand strong no matter the economic times. While many of our peers will focus on short-term solutions to gather deposits and sell loans, we will maintain our focus on building long-term relationships. Our people and our customers understand and believe in shared success, and we've shown how this in turn benefits our shareholders. Yes, we expect our deposits will reprice higher and our loan volume will soften. These are the times in which we live, but we learned a long time ago that there has to be

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something that customers and employees can rally around. Nicolet's purpose of serving and creating shared success has shown to be that rallying point. We look forward to proving this out in 2023." Daniels added.

The Company's financial performance and certain balance sheet line items were impacted by the timing and size of Nicolet's 2022 and 2021 acquisitions. In addition to the 2022 Charter acquisition, Nicolet acquired, Mackinac Financial Corporation ("Mackinac") on September 3, 2021 and County Bancorp, Inc. ("County") on December 3, 2021. Certain income statement results, average balances and related ratios for 2022 include partial contributions from Charter, while 2021 results include partial contributions from Mackinac and County, each from the respective acquisition date. At acquisition, Mackinac added assets of $1.5 billion, loans of $0.9 billion, and deposits of $1.4 billion, while at acquisition County added assets of $1.4 billion, loans of $1.0 billion, and deposits of $1.0 billion.

**Balance Sheet Review**

At December 31, 2022, period end assets were $8.8 billion, a decrease of $0.1 billion (1%) from September 30, 2022, mostly in cash and cash equivalents from the net decline in deposits. Total loans increased $0.2 billion (13% annualized) from September 30, 2022, on strong organic loan growth. Total deposits of $7.2 billion at December 31, 2022, decreased $0.2 billion (3%) from September 30, 2022, while total borrowings increased $37 million from September 30, 2022 in short-term FHLB advances. Total capital was $973 million at December 31, 2022, an increase of $34 million since September 30, 2022, mostly from solid earnings.

Compared to December 31, 2021, period end assets increased $1.1 billion (14%), largely due to the Charter acquisition, which added total assets of $1.1 billion at acquisition. Total loans of $6.2 billion at December 31, 2022 increased $1.6 billion (34%) from December 31, 2021, including the Charter acquisition and the repurchase of approximately $100 million previously participated agricultural loans, as well as strong organic loan growth. Excluding the $827 million of loans acquired with Charter and the repurchased agricultural loans, organic loan growth was 14% from December 31, 2021. Total deposits increased $0.7 billion from December 31, 2021, also largely due to the Charter acquisition, while total borrowings increased $325 million, with approximately half acquired with Charter and the remainder related to new FHLB advances. Total capital increased $81 million from December 31, 2021, mostly from the common stock issued for the Charter acquisition, as well as solid earnings, offset by unfavorable changes in the fair value of available for sale securities and common stock repurchases executed early in 2022.

**Asset Quality**

Nonperforming assets were $40 million and represented 0.46% of total assets at December 31, 2022, compared to $40 million or 0.45% at September 30, 2022, and $56 million or 0.73% at December 31, 2021. The decline from year-end 2021 included a $6 million improvement in nonaccrual loans and a $10 million reduction in other real estate owned (primarily sales of closed bank branches). The allowance for credit losses-loans was $62 million and represented 1.00% of total loans at December 31, 2022, compared to $60 million (or 1.01% of total loans) at September 30, 2022, and $50 million (or 1.07% of total loans) at December 31, 2021. The growth in the allowance for credit losses-loans from third quarter was mostly due to strong loan growth, while the growth from year-end 2021 also included the $8 million Day 2 allowance increase from the acquisition of Charter. Asset quality trends have been solid and net charge-offs were negligible.

**Income Statement Review - Year**

Net income for the year ended December 31, 2022 was $94 million, compared to net income of $61 million for the year ended December 31, 2021.

Net interest income was $240 million for the year ended December 31, 2022, up $82 million from the year ended December 31, 2021, the net of $102 million higher interest income and $20 million higher interest expense. The higher interest income was attributable to strong loan growth (both organic and acquired), new and renewed loans repricing higher from the Federal Reserve interest rate increases, and additional investment securities (acquired with Charter), while the higher interest expense was due to both higher average balances and higher rates (also related to the Federal Reserve interest rate increases). Average interest-earning assets of $7.1 billion for full year 2022 grew $2.4 billion over full year 2021, mostly due to a $2.1 billion increase in average loans from solid organic loan growth and timing of the 2022 and 2021 acquisitions. Average interest-bearing liabilities of $4.8 billion increased $1.6 billion from full year 2021, also mostly due to the timing of the 2022 and 2021 acquisitions.

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The net interest margin for full year 2022 was 3.40%, up 3 bps from 3.37% for full year 2021. The yield on interest-earning assets increased 22 bps (to 3.88%) reflecting both the changing mix of interest-earning assets (which shifted to 74% loans and 26% non-loan earning assets for 2022, compared to 68% loans and 32% non-loan earning assets for 2021) and the rising interest rate environment. The cost of funds increased 28 bps (to 0.71%) for 2022, attributable mainly to the repricing of deposits and funding in the higher interest rate environment.

Noninterest income was $58 million for full year 2022, down $9 million (14%) compared to full year 2021, primarily due to lower net mortgage income. Net mortgage income declined $14 million mostly due to slow mortgage volumes from the rising interest rate environment. Total wealth revenue (trust services and brokerage fee income combined) increased $1 million, as growth in accounts and assets under management outpaced unfavorable market-related declines. Service charges on deposit accounts and card interchange income each increased commensurate with the larger operating base, while the increase in BOLI income was mostly attributable to higher average balances from our recent acquisitions. Net asset gains of $3 million for full year 2022 were primarily related to sales of other real estate owned (mostly closed bank branch locations), while net asset gains of $4 million for full year 2021 were primarily attributable to favorable fair value marks on equity securities. Loan servicing rights ("LSR") income, net (comprised of agricultural loan servicing fees net of the related LSR amortization), reflects an unfavorable $1 million as the LSR amortization is currently outpacing the loan servicing fees since new loans are not being added to this servicing portfolio. Other noninterest income was up $3 million, mostly revenue from crop insurance sales (acquired with County) and broker fees.

Noninterest expense of $161 million for full year 2022 increased $31 million (24%) over full year 2021. Personnel expense increased $18 million (26%) over full year 2021, including higher salaries and fringe benefits from the larger employee base (with average full-time equivalent employees up 41%, mostly due to the timing of the 2022 and 2021 acquisitions), merit increases between the years, and investments in our wealth team. Salary expense also reflected increases in hourly pay and base salaries effective at the end of March 2022, which benefited the majority of our employee base. Non-personnel expenses increased $13 million (23%), including $9 million higher occupancy, equipment, and office expense (largely the expanded branch network with our recent acquisitions, as well as additional expense for software and technology solutions), $3 million higher business development (additional marketing donations, promotions, and media to support our expanded branch network and community base), a $3 million increase in data processing (to support the larger operating base), and a $3 million increase in intangible amortization, partly offset by a $4 million reduction in merger-related expenses.

**Income Statement Review - Quarter**

Net income for fourth quarter 2022 was $28 million, compared to net income of $19 million for third quarter 2022.

Net interest income was $68 million for fourth quarter 2022, up $5 million from third quarter 2022, the net of $15 million higher interest income and $10 million higher interest expense. The higher interest income was largely attributable to strong organic loan growth and a full quarter of Charter, as well as the repricing of new and renewed loans in a rising interest rate environment, while the higher interest expense was due to increases in both average balances (reflecting a full quarter of Charter and additional wholesale funding) and rates (also related to the rising interest rate environment). The net interest margin for fourth quarter 2022 was 3.39%, down 9 bps from 3.48% for third quarter 2022. The yield on interest-earning assets increased 36 bps (to 4.27%) mostly due to the rising interest rate environment, while the cost of funds increased 68 bps (to 1.33%) for fourth quarter 2022, attributable mainly to the repricing of deposits and funding in the higher interest rate environment.

Noninterest income was $15 million for fourth quarter 2022, up $2 million (14%) compared to third quarter 2022. The increase in noninterest income between the sequential quarters included higher wealth revenue, an increase in BOLI income (on higher average balances), a favorable change in the fair value of nonqualified deferred compensation plan assets, and an increase in other noninterest income (mostly crop insurance sales and broker fees), partly offset by lower net mortgage income.

Noninterest expense of $44 million increased $1 million (3%) from third quarter 2022. Personnel expense decreased slightly (2%), while non-personnel expenses increased $2 million (10%) from third quarter 2022. The increase in non-personnel expenses between the sequential quarters included higher occupancy, equipment, and office expense (mostly

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software and technology solutions), higher data processing (mostly volume-based core system processing), an increase in intangible amortization (related to the Charter acquisition), and higher other noninterest expense (mostly fraud losses).

**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 <u>www.nicoletbank.com.</u>

**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.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Nicolet Bankshares, Inc.** | | | | | |
| **Consolidated Balance Sheets (Unaudited)** | | | | | |
| (In thousands, except share data) | **12/31/2022** | **09/30/2022** | **06/30/2022** | **03/31/2022** | **12/31/2021** |
| **Assets** |  |  |  |  |  |
| Cash and due from banks | $121211 | $118537 | $96189 | $183705 | $209349 |
| Interest-earning deposits | 33512 | 319745 | 84828 | 212218 | 385943 |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | 154723 | 438282 | 181017 | 395923 | 595292 |
| Certificates of deposit in other banks | 12518 | 13510 | 15502 | 19692 | 21920 |
| Securities available for sale, at fair value | 917618 | 949597 | 813248 | 852331 | 921661 |
| Securities held to maturity, at amortized cost | 679128 | 686424 | 695812 | 684991 | 651803 |
| Other investments | 72911 | 79279 | 53269 | 54257 | 44008 |
| Loans held for sale | 1482 | 3709 | 5084 | 9764 | 6447 |
| Other assets held for sale |  |  |  |  | 199833 |
| Loans | 6180499 | 5984437 | 4978654 | 4683315 | 4621836 |
| Allowance for credit losses - loans | (61829) | (60348) | (50655) | (49906) | (49672) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans, net | 6118670 | 5924089 | 4927999 | 4633409 | 4572164 |
| Premises and equipment, net | 108956 | 106648 | 96656 | 94275 | 94566 |
| Bank owned life insurance ("BOLI") | 165137 | 165166 | 136060 | 135292 | 134476 |
| Goodwill and other intangibles, net | 402438 | 407117 | 336721 | 338068 | 339492 |
| Accrued interest receivable and other assets | 130388 | 122095 | 108884 | 102210 | 113375 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $8763969 | $8895916 | $7370252 | $7320212 | $7695037 |
| **Liabilities and Stockholders' Equity** |  |  |  |  |  |
| Liabilities: |  |  |  |  |  |
| Noninterest-bearing demand deposits | $2361816 | $2477507 | $2045732 | $1912995 | $1975705 |
| Interest-bearing deposits | 4817105 | 4918395 | 4240534 | 4318125 | 4490211 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deposits | 7178921 | 7395902 | 6286266 | 6231120 | 6465916 |
| Short-term borrowings | 317000 | 280000 |  |  |  |
| Long-term borrowings | 225342 | 225236 | 196963 | 206946 | 216915 |
| Other liabilities held for sale |  |  |  |  | 51586 |
| Accrued interest payable and other liabilities | 70177 | 56315 | 47636 | 45836 | 68729 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 7791440 | 7957453 | 6530865 | 6483902 | 6803146 |
| Stockholders' Equity: |  |  |  |  |  |
| Common stock | 147 | 147 | 134 | 135 | 140 |
| Additional paid-in capital | 621988 | 620392 | 520741 | 524478 | 575045 |
| Retained earnings | 407864 | 380263 | 361753 | 337768 | 313604 |
| Accumulated other comprehensive income (loss) | (57470) | (62339) | (43241) | (26071) | 3102 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Nicolet stockholders' equity** | 972529 | 938463 | 839387 | 836310 | 891891 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and stockholders' equity** | $8763969 | $8895916 | $7370252 | $7320212 | $7695037 |
| Common shares outstanding | 14690614 | 14673197 | 13407375 | 13456741 | 13994079 |

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Nicolet Bankshares, Inc.** | | | | | | | |
| **Consolidated Statements of Income (Unaudited)** | **Consolidated Statements of Income (Unaudited)** | **Consolidated Statements of Income (Unaudited)** | | | | | |
| | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Years Ended** | **For the Years Ended** |
| (In thousands, except per share data) | **12/31/2022** | **09/30/2022** | **06/30/2022** | **03/31/2022** | **12/31/2021** | **12/31/2022** | **12/31/2021** |
| Interest income: |  |  |  |  |  |  |  |
| Loans, including loan fees | $76367 | $63060 | $52954 | $51299 | $52292 | $243680 | $156559 |
| Taxable investment securities | 5771 | 5350 | 5135 | 5127 | 3999 | 21383 | 9934 |
| Tax-exempt investment securities | 1915 | 1181 | 647 | 675 | 575 | 4418 | 2157 |
| Other interest income | 1703 | 1127 | 790 | 817 | 769 | 4437 | 2909 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total interest income** | 85756 | 70718 | 59526 | 57918 | 57635 | 273918 | 171559 |
| Interest expense: |  |  |  |  |  |  |  |
| Deposits | 12512 | 4638 | 2410 | 2192 | 2649 | 21752 | 10448 |
| Short-term borrowings | 2624 | 594 | 28 |  | 1 | 3246 | 1 |
| Long-term borrowings | 2528 | 2496 | 2004 | 1931 | 1426 | 8959 | 3155 |
| &nbsp;&nbsp;&nbsp;**Total interest expense** | 17664 | 7728 | 4442 | 4123 | 4076 | 33957 | 13604 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net interest income** | 68092 | 62990 | 55084 | 53795 | 53559 | 239961 | 157955 |
| Provision for credit losses | 1850 | 8600 | 750 | 300 | 8400 | 11500 | 14900 |
| Net interest income after provision for credit losses | 66242 | 54390 | 54334 | 53495 | 45159 | 228461 | 143055 |
| Noninterest income: |  |  |  |  |  |  |  |
| Trust services fee income | 1963 | 1969 | 2004 | 2011 | 2050 | 7947 | 7774 |
| Brokerage fee income | 3207 | 3040 | 2988 | 3688 | 3205 | 12923 | 12143 |
| Mortgage income, net | 1311 | 1728 | 2205 | 3253 | 4518 | 8497 | 22155 |
| Service charges on deposit accounts | 1502 | 1589 | 1536 | 1477 | 1482 | 6104 | 5023 |
| Card interchange income | 3100 | 3012 | 2950 | 2581 | 2671 | 11643 | 9163 |
| BOLI income | 1151 | 966 | 768 | 933 | 722 | 3818 | 2380 |
| Asset gains (losses), net | 260 | (46) | 1603 | 1313 | 465 | 3130 | 4181 |
| Deferred compensation plan asset <br> market valuations | 314 | (571) | (1316) | (467) | 66 | (2040) | 609 |
| LSR income, net | (324) | (517) | (143) | (382) |  | (1366) |  |
| Other noninterest income | 2362 | 1830 | 1536 | 1536 | 885 | 7264 | 3936 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total noninterest income** | 14846 | 13000 | 14131 | 15943 | 16064 | 57920 | 67364 |
| Noninterest expense: |  |  |  |  |  |  |  |
| Personnel expense | 23705 | 24136 | 19681 | 21191 | 21491 | 88713 | 70618 |
| Occupancy, equipment and office | 8246 | 7641 | 6891 | 6944 | 7119 | 29722 | 21058 |
| Business development and marketing | 2303 | 2281 | 2057 | 1831 | 1550 | 8472 | 5403 |
| Data processing | 3871 | 3664 | 3596 | 3387 | 3582 | 14518 | 11990 |
| Intangibles amortization | 2217 | 1628 | 1347 | 1424 | 1094 | 6616 | 3494 |
| FDIC assessments | 480 | 480 | 480 | 480 | 480 | 1920 | 2035 |
| Merger-related expense | 492 | 519 | 555 | 98 | 2202 | 1664 | 5651 |
| Other noninterest expense | 2675 | 2218 | 1931 | 2195 | 1890 | 9019 | 9048 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total noninterest expense** | 43989 | 42567 | 36538 | 37550 | 39408 | 160644 | 129297 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Income before income tax expense** | 37099 | 24823 | 31927 | 31888 | 21815 | 125737 | 81122 |
| Income tax expense | 9498 | 6313 | 7942 | 7724 | 5510 | 31477 | 20470 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net income** | $27601 | $18510 | $23985 | $24164 | $16305 | $94260 | $60652 |
| **Earnings per common share:** |  |  |  |  |  |  |  |
| Basic | $1.88 | $1.33 | $1.79 | $1.77 | $1.29 | $6.78 | $5.65 |
| Diluted | $1.83 | $1.29 | $1.73 | $1.70 | $1.25 | $6.56 | $5.44 |
| **Common shares outstanding:** |  |  |  |  |  |  |  |
| Basic weighted average | 14685 | 13890 | 13402 | 13649 | 12626 | 13909 | 10736 |
| Diluted weighted average | 15110 | 14310 | 13852 | 14215 | 13049 | 14375 | 11145 |

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Nicolet Bankshares, Inc.** | | | | | | | |
| **Consolidated Financial Summary (Unaudited)** | **Consolidated Financial Summary (Unaudited)** | **Consolidated Financial Summary (Unaudited)** | | | | | |
| | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Years Ended** | **For the Years Ended** |
| (In thousands, except share & per share data) | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** | **12/31/2022** | **12/31/2021** |
| **Selected Average Balances:** |  |  |  |  |  |  |  |
| Loans | $6087146 | $5391258 | $4838535 | $4688784 | $3952330 | $5255646 | $3183681 |
| Investment securities | 1701531 | 1625453 | 1573027 | 1575624 | 1269562 | 1619272 | 738540 |
| Interest-earning assets | 7963485 | 7161120 | 6579644 | 6711191 | 5923581 | 7107449 | 4719417 |
| Cash and cash equivalents | 179381 | 167550 | 217553 | 568472 | 839607 | 281849 | 852603 |
| Goodwill and other intangibles, net | 403243 | 363211 | 337289 | 338694 | 294051 | 361471 | 211463 |
| Total assets | 8688741 | 7856131 | 7273219 | 7519636 | 6772363 | 7837695 | 5271463 |
| Deposits | 7222415 | 6643247 | 6188044 | 6392544 | 5754778 | 6613924 | 4499087 |
| Interest-bearing liabilities | 5262278 | 4730209 | 4425450 | 4683915 | 4006307 | 4776924 | 3140393 |
| Stockholders' equity (common) | 954970 | 890205 | 837975 | 861319 | 784666 | 886385 | 622903 |
| **Selected Ratios:** <sup>(1)</sup> |  |  |  |  |  |  |  |
| Book value per common share | $66.20 | $63.96 | $62.61 | $62.15 | $63.73 | $66.20 | $63.73 |
| Tangible book value per common share <sup>(2)</sup> | $38.81 | $36.21 | $37.49 | $37.03 | $39.47 | $38.81 | $39.47 |
| Return on average assets | 1.26% | 0.93% | 1.32% | 1.30% | 0.96% | 1.20% | 1.15% |
| Return on average common equity | 11.47 | 8.25 | 11.48 | 11.38 | 8.24 | 10.63 | 9.74 |
| Return on average tangible common equity <sup>(2)</sup> | 19.85 | 13.93 | 19.21 | 18.75 | 13.19 | 17.96 | 14.74 |
| Average equity to average assets | 10.99 | 11.33 | 11.52 | 11.45 | 11.59 | 11.31 | 11.82 |
| Stockholders' equity to assets | 11.10 | 10.55 | 11.39 | 11.42 | 11.59 | 11.10 | 11.59 |
| Tangible common equity to tangible assets <sup>(2)</sup> | 6.82 | 6.26 | 7.15 | 7.14 | 7.51 | 6.82 | 7.51 |
| Net interest margin | 3.39 | 3.48 | 3.34 | 3.23 | 3.57 | 3.40 | 3.37 |
| Efficiency ratio | 52.79 | 55.62 | 53.74 | 54.56 | 56.73 | 54.15 | 58.20 |
| Effective tax rate | 25.60 | 25.43 | 24.88 | 24.22 | 25.26 | 25.03 | 25.23 |
| **Selected Asset Quality Information:** |  |  |  |  |  |  |  |
| Nonaccrual loans | $38080 | $38326 | $36580 | $39670 | $44154 | $38080 | $44154 |
| Other real estate owned - closed branches | 1347 | 1506 | 4378 | 9019 | 10307 | 1347 | 10307 |
| Other real estate owned | 628 | 628 | 628 | 797 | 1648 | 628 | 1648 |
| Nonperforming assets | $40055 | $40460 | $41586 | $49486 | $56109 | $40055 | $56109 |
| Net loan charge-offs (recoveries) | $597 | $216 | $(149) | $66 | $(10) | $730 | $160 |
| Allowance for credit losses-loans to loans | 1.00% | 1.01% | 1.02% | 1.07% | 1.07% | 1.00% | 1.07% |
| Net loan charge-offs to average loans <sup>(1)</sup> | 0.04 | 0.02 | (0.01) | 0.01 | 0.00 | 0.01 | 0.01 |
| Nonperforming loans to total loans | 0.62 | 0.64 | 0.73 | 0.85 | 0.96 | 0.62 | 0.96 |
| Nonperforming assets to total assets | 0.46 | 0.45 | 0.56 | 0.68 | 0.73 | 0.46 | 0.73 |
| **Stock Repurchase Information:** |  |  |  |  |  |  |  |
| Common stock repurchased (dollars) <sup>(3)</sup> | $786 | $— | $6277 | $54420 | $27784 | $61483 | $61464 |
| Common stock repurchased (full shares) <sup>(3)</sup> | 10000 |  | 67949 | 593713 | 345166 | 671662 | 793064 |

---

(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.

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Nicolet Bankshares, Inc.** | **Nicolet Bankshares, Inc.** | **Nicolet Bankshares, Inc.** | **Nicolet Bankshares, Inc.** | **Nicolet Bankshares, Inc.** | | | | | |
| **Net Interest Income and Net Interest Margin Analysis (Unaudited)** | **Net Interest Income and Net Interest Margin Analysis (Unaudited)** | **Net Interest Income and Net Interest Margin Analysis (Unaudited)** | **Net Interest Income and Net Interest Margin Analysis (Unaudited)** | **Net Interest Income and Net Interest Margin Analysis (Unaudited)** | | | | | |
| | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** |
| | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **September 30, 2022** | **September 30, 2022** | **September 30, 2022** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
| | **Average** | | **Average** | **Average** | | **Average** | **Average** | | **Average** |
| (In thousands) | **Balance** | **Interest** | **Rate** | **Balance** | **Interest** | **Rate** | **Balance** | **Interest** | **Rate** |
| **ASSETS** |  |  |  |  |  |  |  |  |  |
| PPP loans | $239 | $1 | 1.02% | $605 | $1 | 0.93% | $46694 | $5549 | 46.50% |
| All other loans | 6086907 | 76405 | 4.93% | 5390653 | 63094 | 4.60% | 3905636 | 46770 | 4.70% |
| &nbsp;&nbsp;Total loans <sup>(1) (2)</sup> | 6087146 | 76406 | 4.93% | 5391258 | 63095 | 4.60% | 3952330 | 52319 | 5.20% |
| Investment securities <sup>(2)</sup> | 1701531 | 8302 | 1.95% | 1625453 | 6989 | 1.72% | 1269562 | 4860 | 1.53% |
| Other interest-earning assets | 174808 | 1703 | 3.85% | 144409 | 1127 | 3.09% | 701689 | 769 | 0.43% |
| &nbsp;&nbsp;&nbsp;Total interest-earning assets | 7963485 | $86411 | 4.27% | 7161120 | $71211 | 3.91% | 5923581 | $57948 | 3.85% |
| Other assets, net | 725256 |  |  | 695011 |  |  | 848782 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $8688741 |  |  | $7856131 |  |  | $6772363 |  |  |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** | **LIABILITIES AND STOCKHOLDERS' EQUITY** | **LIABILITIES AND STOCKHOLDERS' EQUITY** | **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |  |  |  |  |
| Interest-bearing core deposits | $4175671 | $8477 | 0.81% | $3974448 | $3353 | 0.33% | $3456699 | $1743 | 0.20% |
| Brokered deposits | 611226 | 4035 | 2.62% | 468010 | 1285 | 1.09% | 377390 | 906 | 0.95% |
| &nbsp;&nbsp;&nbsp;Total interest-bearing deposits | 4786897 | 12512 | 1.04% | 4442458 | 4638 | 0.41% | 3834089 | 2649 | 0.27% |
| Wholesale funding | 475381 | 5152 | 4.27% | 287751 | 3090 | 4.25% | 172218 | 1427 | 3.30% |
| &nbsp;&nbsp;&nbsp;Total interest-bearing liabilities | 5262278 | $17664 | 1.33% | 4730209 | $7728 | 0.65% | 4006307 | $4076 | 0.40% |
| Noninterest-bearing demand deposits | 2435518 |  |  | 2200789 |  |  | 1920689 |  |  |
| Other liabilities | 35975 |  |  | 34928 |  |  | 60701 |  |  |
| Stockholders' equity | 954970 |  |  | 890205 |  |  | 784666 |  |  |
| &nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $8688741 |  |  | $7856131 |  |  | $6772363 |  |  |
| Net interest income and rate spread |  | $68747 | 2.94% |  | $63483 | 3.26% |  | $53872 | 3.45% |
| Net interest margin |  |  | 3.39% |  |  | 3.48% |  |  | 3.57% |
| Loan purchase accounting accretion <sup>(3)</sup> |  | $1935 | 0.09% |  | $1075 | 0.05% |  | $465 | 0.03% |
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |  |  |  |
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |  |  |  |
|  | **Average** |  | **Average** | **Average** |  | **Average** |  |  |  |
| (In thousands) | **Balance** | **Interest** | **Rate** | **Balance** | **Interest** | **Rate** |  |  |  |
| **ASSETS** |  |  |  |  |  |  |  |  |  |
| PPP loans | $4872 | $1392 | 28.57% | $141510 | $16672 | 11.78% |  |  |  |
| All other loans | 5250774 | 242427 | 4.62% | 3042171 | 139972 | 4.60% |  |  |  |
| &nbsp;&nbsp;Total loans <sup>(1) (2)</sup> | 5255646 | 243819 | 4.64% | 3183681 | 156644 | 4.92% |  |  |  |
| Investment securities <sup>(2)</sup> | 1619272 | 27575 | 1.70% | 738540 | 13047 | 1.77% |  |  |  |
| Other interest-earning assets | 232531 | 4437 | 1.91% | 797196 | 2909 | 0.36% |  |  |  |
| &nbsp;&nbsp;&nbsp;Total interest-earning assets | 7107449 | $275831 | 3.88% | 4719417 | $172600 | 3.66% |  |  |  |
| Other assets, net | 730246 |  |  | 552046 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $7837695 |  |  | $5271463 |  |  |  |  |  |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** | **LIABILITIES AND STOCKHOLDERS' EQUITY** | **LIABILITIES AND STOCKHOLDERS' EQUITY** | **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |  |  |  |  |
| Interest-bearing core deposits | $3987201 | $15324 | 0.38% | $2729146 | $6657 | 0.24% |  |  |  |
| Brokered deposits | 490871 | 6428 | 1.31% | 308091 | 3791 | 1.23% |  |  |  |
| &nbsp;&nbsp;&nbsp;Total interest-bearing deposits | 4478072 | 21752 | 0.49% | 3037237 | 10448 | 0.34% |  |  |  |
| Wholesale funding | 298852 | 12205 | 4.08% | 103156 | 3156 | 3.06% |  |  |  |
| &nbsp;&nbsp;&nbsp;Total interest-bearing liabilities | 4776924 | $33957 | 0.71% | 3140393 | $13604 | 0.43% |  |  |  |
| Noninterest-bearing demand deposits | 2135852 |  |  | 1461850 |  |  |  |  |  |
| Other liabilities | 38534 |  |  | 46317 |  |  |  |  |  |
| Stockholders' equity | 886385 |  |  | 622903 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $7837695 |  |  | $5271463 |  |  |  |  |  |
| Net interest income and rate spread |  | $241874 | 3.17% |  | $158996 | 3.23% |  |  |  |
| Net interest margin |  |  | 3.40% |  |  | 3.37% |  |  |  |
| Loan purchase accounting accretion <sup>(3)</sup> |  | $4572 | 0.06% |  | $2063 | 0.04% |  |  |  |

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

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Nicolet Bankshares, Inc.** | | | | | | | |
| **Reconciliation of Non-GAAP Financial Measures (Unaudited)** | **Reconciliation of Non-GAAP Financial Measures (Unaudited)** | **Reconciliation of Non-GAAP Financial Measures (Unaudited)** | | | | | |
| | **At or for the Three Months Ended** | **At or for the Three Months Ended** | **At or for the Three Months Ended** | **At or for the Three Months Ended** | **At or for the Three Months Ended** | **At or for the Years Ended** | **At or for the Years Ended** |
| (In thousands, except per share data) | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** | **12/31/2022** | **12/31/2021** |
| **Adjusted net income reconciliation:** <sup>(1)</sup> |  |  |  |  |  |  |  |
| Net income (GAAP) | $27601 | $18510 | $23985 | $24164 | $16305 | $94260 | $60652 |
| *Adjustments:* |  |  |  |  |  |  |  |
| Provision expense related to merger |  | 8000 |  |  | 8400 | 8000 | 14400 |
| Assets (gains) losses, net | (260) | 46 | (1603) | (1313) | (465) | (3130) | (4181) |
| Merger-related expense | 492 | 519 | 555 | 98 | 2202 | 1664 | 5651 |
| Branch closure expense |  |  |  |  |  |  | 944 |
| &nbsp;&nbsp;&nbsp;Adjustments subtotal | 232 | 8565 | (1048) | (1215) | 10137 | 6534 | 16814 |
| Tax on Adjustments (25%) | 58 | 2141 | (262) | (304) | 2534 | 1634 | 4204 |
| &nbsp;&nbsp;&nbsp;Adjustments, net of tax | 174 | 6424 | (786) | (911) | 7603 | 4901 | 12611 |
| Adjusted net income (Non-GAAP) | $27775 | $24934 | $23199 | $23253 | $23908 | $99161 | $73263 |
| *Common shares outstanding:* |  |  |  |  |  |  |  |
| Weighted average diluted common shares | 15110 | 14310 | 13852 | 14215 | 13049 | 14375 | 11145 |
| *Diluted earnings per common share:* |  |  |  |  |  |  |  |
| Diluted earnings per common share (GAAP) | $1.83 | $1.29 | $1.73 | $1.70 | $1.25 | $6.56 | $5.44 |
| Adjusted Diluted earnings per common share (Non-GAAP) | $1.84 | $1.74 | $1.67 | $1.64 | $1.83 | $6.90 | $6.57 |
| **Tangible assets:** <sup>(2)</sup> |  |  |  |  |  |  |  |
| Total assets | $8763969 | $8895916 | $7370252 | $7320212 | $7695037 |  |  |
| Goodwill and other intangibles, net | 402438 | 407117 | 336721 | 338068 | 339492 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Tangible assets | $8361531 | $8488799 | $7033531 | $6982144 | $7355545 |  |  |
| **Tangible common equity:** <sup>(2)</sup> |  |  |  |  |  |  |  |
| Stockholders' equity | $972529 | $938463 | $839387 | $836310 | $891891 |  |  |
| Goodwill and other intangibles, net | 402438 | 407117 | 336721 | 338068 | 339492 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Tangible common equity | $570091 | $531346 | $502666 | $498242 | $552399 |  |  |
| **Tangible average common equity:** <sup>(2)</sup> |  |  |  |  |  |  |  |
| Average stockholders' equity (common) | $954970 | $890205 | $837975 | $861319 | $784666 | $886385 | $622903 |
| Average goodwill and other intangibles, net | 403243 | 363211 | 337289 | 338694 | 294051 | 361471 | 211463 |
| &nbsp;&nbsp;&nbsp;&nbsp;Average tangible common equity | $551727 | $526994 | $500686 | $522625 | $490615 | $524914 | $411440 |

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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)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.