8-K

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): July 19, 2022

NICOLET BANKSHARES, INC.

(Exact name of registrant as specified in its charter)

Wisconsin	001-37700	47-0871001
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer 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:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	NIC	New York Stock Exchange

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.  ☐

Item 2.02 Results of Operations and Financial Condition.

On July 19, 2022, Nicolet Bankshares, Inc. (“Nicolet”) announced its earnings for the quarter ended June 30, 2022. A copy of the press release is attached 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 the filings of the Registrant 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.

Item 9.01 Financial Statements and Exhibits.

Exhibit No.	Description of Exhibit
99.1	Press Release, dated July 19, 2022
104	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document

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:	July 19, 2022	NICOLET BANKSHARES, INC.
		By:	/s/ H. Phillip Moore, Jr.
			H. Phillip Moore, Jr.
			Chief Financial Officer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

NICOLET BANKSHARES, INC. ANNOUNCES SECOND QUARTER 2022 EARNINGS

•Net income of $24 million, consistent with prior quarter and 31% higher than second quarter 2021

•Net income of $48 million for first six months of 2022, compared to $37 million for first six months of 2021

•Earnings per diluted common share of $1.73 and $3.43 for the three and six months ended June 30

•Return on average assets of 1.32% and 1.31% for the three and six months ended June 30

•Return on average common equity and return on average tangible common equity of 11.48% and 19.21%, respectively, for second quarter 2022

•Regulatory approvals for Charter merger received

Green Bay, Wisconsin, July 19, 2022 - Nicolet Bankshares, Inc. (NYSE: NIC) (“Nicolet” or the “Company”) announced second quarter 2022 net income of $24 million and earnings per diluted common share of $1.73, compared to $24 million and $1.70 for first quarter 2022, and $18 million and $1.77 for second quarter 2021, respectively. Annualized quarterly return on average assets was 1.32%, 1.30% and 1.62%, for second quarter 2022, first quarter 2022 and second quarter 2021, respectively.

Net income for the six months ended June 30, 2022 was $48 million and earnings per diluted common share was $3.43, compared to net income of $37 million and earnings per diluted common share of $3.52 for the first half of 2021. Annualized return on average assets was 1.31% and 1.63% for the first six months of 2022 and 2021, respectively.

On March 29, 2022, the Company entered into a definitive merger agreement with Charter Bankshares, Inc. (“Charter”) pursuant to which Charter will merge with and into Nicolet. Nicolet expects to issue approximately 1.26 million shares of Nicolet common stock and $38.8 million in cash for the acquisition of Charter. At March 31, 2022, Charter had total assets of $1.1 billion. As of July 12, 2022, all regulatory approvals for the Charter merger had been received. The merger is expected to close in the third quarter of 2022, subject to customary closing conditions.

“Despite the potential distractions of rate hikes and inflationary pressures, our team has remained focused on serving our customers. This focus has resulted in strong fundamental performance, including good loan growth, across our core customer base,” said Mike Daniels, President and CEO of Nicolet. “Our customers continue to show that they are smart and resilient as they have kept their balance sheets strong and remain on solid ground. The partnership between our bankers and customers continues to create the shared success upon which Nicolet was founded.”

“Our focus on asset quality and bringing back Ag loan participations have been executed well by our team. Our credit quality remains very strong, and nonperforming assets and charge-offs have declined for the second consecutive quarter. We also repurchased approximately $100 million in previously participated Ag loans this quarter which has helped us deliver on our strategies in the Ag sector. The team has done a good job in a short time,” Daniels added.

Executive Vice President Eric Witczak commented, “As with all our merger integrations, we remain as focused on the people side as we do the systems side. We believe that we found some wonderful community-focused people, led by Paul Kohler, that will bring the Nicolet story to life in Western Wisconsin and Minnesota.”

The Company’s financial performance and certain balance sheet line items were impacted by the timing and size of Nicolet’s 2021 acquisitions, 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 2021 include partial contributions from Mackinac and County, each from the respective acquisition date. At acquisition,

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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 June 30, 2022, period end assets were $7.4 billion, an increase of $50 million (1%) from March 31, 2022, including strong loan growth, partly offset by lower cash and cash equivalents. Total loans increased $295 million (6%) from March 31, 2022, with solid organic loan growth in agricultural, commercial and industrial, and residential first mortgage loans, as well as the repurchase of approximately $100 million previously participated agricultural loans. Excluding the purchased agricultural loans, organic loan growth was 4% from March 31, 2022. Total deposits of $6.3 billion at June 30, 2022, increased $55 million (1%) from March 31, 2022, primarily noninterest-bearing deposits. Total capital was $839 million at June 30, 2022, an increase of $3 million since March 31, 2022, with current quarter earnings partly offset by unfavorable changes in the fair value of available for sale securities and common stock repurchases.

Asset Quality

Nonperforming assets were $42 million and represented 0.56% of total assets at June 30, 2022, compared to $49 million or 0.68% at March 31, 2022. The allowance for credit losses-loans was $51 million and represented 1.02% of total loans at June 30, 2022, compared to $50 million and 1.07% at March 31, 2022, reflecting strong loan growth, solid asset quality trends, and negligible net charge-offs.

Income Statement Review - Quarter

Net income for second quarter 2022 was $24 million, consistent with net income of $24 million for first quarter 2022.

Net interest income was $55 million for second quarter 2022, up slightly ($1 million) from first quarter 2022, reflecting strong loan volumes and one additional day in the quarter, though still pressured on rates from competitive pricing and the lag in repricing to current market interest rates. Average interest-earning assets of $6.6 billion were down $132 million from first quarter 2022. Average loans of $4.8 billion grew $150 million over first quarter 2022, including both organic loan growth and the repurchase of previously participated agricultural loans, while other interest-earning assets were down $279 million, mostly cash, and average investments were minimally changed. Average interest-bearing liabilities of $4.4 billion decreased $258 million from first quarter 2022, primarily average interest-bearing deposits due to a reduction in retail deposits.

The net interest margin for second quarter 2022 was 3.34%, up 11bps from 3.23% for first quarter 2022. The yield on interest-earning assets increased 13bps (to 3.61%) largely due to the change in mix of interest-earning assets, which shifted to 73% loans, 24% investments, and 3% other interest-earning assets (mostly cash) for second quarter 2022 compared to 70% loans, 23% investments, and 7% other interest-earning assets for first quarter 2022. The cost of funds increased 5bps (to 0.40%) for second quarter 2022, attributable mainly to the repricing of deposits and funding in the higher interest rate environment.

Noninterest income was $14 million for second quarter 2022, down $2 million (11%) compared to first quarter 2022. Net mortgage income of $2 million was down $1 million from first quarter 2022, primarily due to lower gains on sales from declining secondary market volumes. Trust services fee income and brokerage fee income combined decreased $0.7 million (12%) from first quarter 2022, mostly from unfavorable market-related declines. Card interchange income grew $0.4 million (14%) over first quarter 2022 on higher volume and activity. Other noninterest income was down $0.6 million between the sequential quarters mostly due to an $0.8 million unfavorable change in the fair value of nonqualified deferred compensation plan assets from recent market declines, partly offset by $0.2 million higher net loan servicing revenue. Both quarters also included net asset gains primarily related to sales of other real estate owned (mostly closed bank branch locations).

Noninterest expense of $37 million decreased $1 million (3%) from first quarter 2022. Personnel expense decreased $1.5 million (7%) from first quarter 2022, largely due to the offsetting change to the nonqualified deferred compensation plan liabilities and lower health claim experience, partly offset by higher salary expense from the increase in hourly pay or base salary effective at the end of March 2022, which benefitted 67% of our employee base. Non-personnel expenses increased $0.5 million (3%), largely due to $0.5 million higher merger-related expense, $0.2 million higher marketing (timing of marketing campaigns and community support), and $0.2 million higher data processing (volume-based), partly

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offset by a $0.3 million decline in other noninterest expense from lower costs to carry closed bank branches given the recent sales.

About Nicolet Bankshares, Inc.

Nicolet Bankshares, Inc. is the bank holding company of Nicolet National Bank, a growing, full-service, community bank providing services ranging from commercial, agricultural and consumer banking to wealth management and retirement plan services. Founded in Green Bay in 2000, Nicolet National Bank operates branches in Northeast and Central Wisconsin, Northern Michigan and the upper peninsula of Michigan. More information can be found at www.nicoletbank.com.

Use of Non-GAAP Financial Measures

This communication contains non-GAAP financial measures, such as non-GAAP net income, non-GAAP earnings per diluted common share, tangible book value per common share, return on average tangible common equity, and tangible common equity to tangible assets, where management believes such measures to be helpful to management, investors and others in understanding Nicolet’s results of operations or financial position. 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 federal securities law. Such statements include, but are not limited to, statements about Nicolet’s business plans, objectives, expectations and intentions, including without limitation Nicolet’s prospects and pipelines looking strong and business focus moving forward, as well as certain plans, expectations, goals, the expected closing date of the Charter merger as well as the projections and benefits relating to the proposed merger between Nicolet and Charter, all of which are subject to numerous assumptions, risks and uncertainties. Words or phrases such as “anticipate,” “believe,” “aim,” “can,” “conclude,” “continue,” “could,” “estimate,” “expect,” “foresee,” “goal,” “intend,” “may,” “might,” “outlook,” “possible,” “plan,” “predict,” “project,” “potential,” “seek,” “should,” “target,” “will,” “will likely,” “would,” or the negative of these terms or other comparable terminology, as well as similar expressions, are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements are not historical facts but instead express only management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management’s control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements. In addition to factors disclosed in reports filed by Nicolet with the SEC, risks and uncertainties, including but not limited to risks and uncertainties for Nicolet with respect to its proposed merger with Charter, that may cause actual results or outcomes to differ materially from those anticipated include, but are not limited to: (1) the possibility that the proposed merger will not be completed due to the failure to satisfy one or more of the closing conditions of the merger; (2) the possibility that any of the anticipated benefits of the proposed merger will not be realized or will not be realized within the expected time period; (3) the risk that integration of Charter’s operations with those of Nicolet will be materially delayed or will be more costly or difficult than expected; (4) the parties’ inability to meet expectations regarding the timing of the proposed merger; (5) changes to tax legislation and their potential effects on the accounting for the proposed merger; (6) diversion of management’s attention from ongoing business operations and opportunities due to the proposed merger; (7) the challenges of integrating and retaining key employees; (8) the effect of the announcement of the proposed merger on Nicolet’s, Charter’s or the combined company’s respective customer and employee relationships and operating results; (9) the possibility that the proposed merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (10) dilution caused by Nicolet’s issuance of additional shares of Nicolet common stock in connection with the proposed merger; (11) the magnitude and duration of

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the COVID pandemic and its impact on the global economy and financial market conditions and Nicolet’s business, results of operations and financial condition; (12) changes in consumer demand for financial services; (13) general competitive, economic, political and market conditions and fluctuations; and additional risks that are discussed in Nicolet’s SEC filings. Please refer to Nicolet’s 2021 Annual Report on Form 10-K, as well as its other filings with the SEC, for a more detailed discussion of risks, uncertainties and factors that could cause actual results to differ from those discussed in the forward-looking statements.

All forward-looking statements included in this communication are made as of the date hereof and are based on information available to management at that time. Except as required by law, Nicolet does not assume any obligation to update any forward-looking statement to reflect events or circumstances that occur after the date the forward-looking statements were made.

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Nicolet Bankshares, Inc.
Consolidated Balance Sheets (Unaudited)
(In thousands, except share data)	06/30/2022		03/31/2022		12/31/2021		09/30/2021		06/30/2021
Assets
Cash and due from banks	$	96,189	$	183,705	$	209,349	$	217,608	$	77,634
Interest-earning deposits	84,828		212,218		385,943		1,132,997		714,772
Cash and cash equivalents	181,017		395,923		595,292		1,350,605		792,406
Certificates of deposit in other banks	15,502		19,692		21,920		24,079		23,387
Securities available for sale, at fair value	813,248		852,331		921,661		715,942		562,028
Securities held to maturity, at amortized cost	695,812		684,991		651,803		49,063		—
Other investments	53,269		54,257		44,008		38,602		33,440
Loans held for sale	5,084		9,764		6,447		16,784		11,235
Other assets held for sale	—		—		199,833		177,627		—
Loans	4,978,654		4,683,315		4,621,836		3,533,198		2,820,331
Allowance for credit losses - loans	(50,655)		(49,906)		(49,672)		(38,399)		(32,561)
Loans, net	4,927,999		4,633,409		4,572,164		3,494,799		2,787,770
Premises and equipment, net	96,656		94,275		94,566		83,513		61,618
Bank owned life insurance ("BOLI")	136,060		135,292		134,476		100,690		84,347
Goodwill and other intangibles, net	336,721		338,068		339,492		269,954		173,711
Accrued interest receivable and other assets	108,884		102,210		113,375		86,162		57,405
Total assets	$	7,370,252	$	7,320,212	$	7,695,037	$	6,407,820	$	4,587,347
Liabilities and Stockholders' Equity
Liabilities:
Noninterest-bearing demand deposits	$	2,045,732	$	1,912,995	$	1,975,705	$	1,852,119	$	1,324,994
Interest-bearing deposits	4,240,534		4,318,125		4,490,211		3,576,655		2,614,028
Total deposits	6,286,266		6,231,120		6,465,916		5,428,774		3,939,022
Short-term borrowings	—		—		—		—		—
Long-term borrowings	196,963		206,946		216,915		144,233		45,108
Other liabilities held for sale	—		—		51,586		47,496		—
Accrued interest payable and other liabilities	47,636		45,836		68,729		58,039		43,822
Total liabilities	6,530,865		6,483,902		6,803,146		5,678,542		4,027,952
Stockholders' Equity:
Common stock	134		135		140		120		98
Additional paid-in capital	520,741		524,478		575,045		425,367		261,096
Retained earnings	361,753		337,768		313,604		297,299		289,475
Accumulated other comprehensive income (loss)	(43,241)		(26,071)		3,102		6,492		8,726
Total Nicolet stockholders' equity	839,387		836,310		891,891		729,278		559,395
Total liabilities and stockholders' equity	$	7,370,252	$	7,320,212	$	7,695,037	$	6,407,820	$	4,587,347
Common shares outstanding	13,407,375		13,456,741		13,994,079		11,952,438		9,843,141

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Nicolet Bankshares, Inc.
Consolidated Statements of Income (Unaudited)
	For the Three Months Ended										For the Six Months Ended
(In thousands, except per share data)	06/30/2022		03/31/2022		12/31/2021		09/30/2021		06/30/2021		6/30/2022		6/30/2021
Interest income:
Loans, including loan fees	$	52,954	$	51,299	$	52,292	$	35,294	$	35,111	$	104,253	$	68,973
Taxable investment securities	5,135		5,127		3,999		2,061		2,060		10,262		3,874
Tax-exempt investment securities	647		675		575		517		520		1,322		1,065
Other interest income	790		817		769		869		616		1,607		1,271
Total interest income	59,526		57,918		57,635		38,741		38,307		117,444		75,183
Interest expense:
Deposits	2,410		2,192		2,649		2,444		2,433		4,602		5,355
Short-term borrowings	28		—		1		—		—		28		—
Long-term borrowings	2,004		1,931		1,426		1,113		303		3,935		616
Total interest expense	4,442		4,123		4,076		3,557		2,736		8,565		5,971
Net interest income	55,084		53,795		53,559		35,184		35,571		108,879		69,212
Provision for credit losses	750		300		8,400		6,000		—		1,050		500
Net interest income after provision for credit losses	54,334		53,495		45,159		29,184		35,571		107,829		68,712
Noninterest income:
Trust services fee income	2,004		2,011		2,050		2,043		1,906		4,015		3,681
Brokerage fee income	2,988		3,688		3,205		3,154		2,991		6,676		5,784
Mortgage income, net	2,205		3,253		4,518		4,808		5,599		5,458		12,829
Service charges on deposit accounts	1,536		1,477		1,482		1,314		1,136		3,013		2,227
Card interchange income	2,950		2,581		2,671		2,299		2,266		5,531		4,193
BOLI income	768		933		722		572		559		1,701		1,086
Asset gains (losses), net	1,603		1,313		465		(1,187)		4,192		2,916		4,903
Other noninterest income	77		687		951		993		1,529		764		2,601
Total noninterest income	14,131		15,943		16,064		13,996		20,178		30,074		37,304
Noninterest expense:
Personnel expense	19,681		21,191		21,491		16,927		17,084		40,872		32,200
Occupancy, equipment and office	6,891		6,944		7,119		5,749		4,053		13,835		8,190
Business development and marketing	2,057		1,831		1,550		1,654		1,210		3,888		2,199
Data processing	3,596		3,387		3,582		2,939		2,811		6,983		5,469
Intangibles amortization	1,347		1,424		1,094		758		790		2,771		1,642
FDIC assessments	480		480		480		480		480		960		1,075
Merger-related expense	555		98		2,202		2,793		656		653		656
Other noninterest expense	1,931		2,195		1,890		1,761		3,663		4,126		5,397
Total noninterest expense	36,538		37,550		39,408		33,061		30,747		74,088		56,828
Income before income tax expense	31,927		31,888		21,815		10,119		25,002		63,815		49,188
Income tax expense	7,942		7,724		5,510		2,295		6,718		15,666		12,665
Net income	$	23,985	$	24,164	$	16,305	$	7,824	$	18,284	$	48,149	$	36,523
Earnings per common share:
Basic	$	1.79	$	1.77	$	1.29	$	0.75	$	1.85	$	3.56	$	3.67
Diluted	$	1.73	$	1.70	$	1.25	$	0.73	$	1.77	$	3.43	$	3.52
Common shares outstanding:
Basic weighted average	13,402		13,649		12,626		10,392		9,902		13,525		9,949
Diluted weighted average	13,852		14,215		13,049		10,776		10,326		14,035		10,365

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Nicolet Bankshares, Inc.
Consolidated Financial Summary (Unaudited)
	For the Three Months Ended															For the Six Months Ended
(In thousands, except share & per share data)	06/30/2022			3/31/2022			12/31/2021			9/30/2021			6/30/2021			6/30/2022			6/30/2021
Selected Average Balances:
Loans	$	4,838,535		$	4,688,784		$	3,952,330		$	3,076,422		$	2,869,105		$	4,764,073		$	2,847,504
Investment securities	1,573,027			1,575,624			1,269,562			611,870			537,632			1,574,319			533,013
Interest-earning assets	6,579,644			6,711,191			5,923,581			4,734,768			4,109,394			6,645,054			4,099,553
Cash and cash equivalents	217,553			568,472			839,607			1,100,153			716,873			392,043			733,383
Goodwill and other intangibles, net	337,289			338,694			294,051			201,748			174,026			337,988			174,424
Total assets	7,273,219			7,519,636			6,772,363			5,246,193			4,527,839			7,395,747			4,521,419
Deposits	6,188,044			6,392,544			5,754,778			4,448,468			3,897,797			6,289,729			3,886,563
Interest-bearing liabilities	4,425,450			4,683,915			4,006,307			3,093,031			2,684,871			4,553,968			2,724,332
Stockholders’ equity (common)	837,975			861,319			784,666			608,946			550,974			849,582			547,775
Selected Ratios: (1)
Book value per common share	$	62.61		$	62.15		$	63.73		$	61.01		$	56.83		$	62.61		$	56.83
Tangible book value per common share (2)	$	37.49		$	37.03		$	39.47		$	38.43		$	39.18		$	37.49		$	39.18
Return on average assets	1.32		%	1.30		%	0.96		%	0.59		%	1.62		%	1.31		%	1.63		%
Return on average common equity	11.48			11.38			8.24			5.10			13.31			11.43			13.45
Return on average tangible common equity (2)	19.21			18.75			13.19			7.62			19.46			18.98			19.73
Average equity to average assets	11.52			11.45			11.59			11.61			12.17			11.49			12.12
Stockholders’ equity to assets	11.39			11.42			11.59			11.38			12.19			11.39			12.19
Tangible common equity to tangible assets (2)	7.15			7.14			7.51			7.48			8.74			7.15			8.74
Net interest margin	3.34			3.23			3.57			2.94			3.45			3.29			3.38
Efficiency ratio	53.74			54.56			56.73			65.32			59.37			54.16			55.66
Effective tax rate	24.88			24.22			25.26			22.68			26.87			24.55			25.75
Selected Asset Quality Information:
Nonaccrual loans	$	36,580		$	39,670		$	44,154		$	16,715		$	6,932		$	36,580		$	6,932
Other real estate owned - closed branches	4,378			9,019			10,307			2,895			2,895			4,378			2,895
Other real estate owned	628			797			1,648			1,574			—			628			—
Nonperforming assets	$	41,586		$	49,486		$	56,109		$	21,184		$	9,827		$	41,586		$	9,827
Net loan charge-offs (recoveries)	$	(149)		$	66		$	(10)		$	58		$	65		$	(83)		$	112
Allowance for credit losses-loans to loans	1.02		%	1.07		%	1.07		%	1.09		%	1.15		%	1.02		%	1.15		%
Net loan charge-offs to average loans (1)	(0.01)			0.01			0.00			0.01			0.01			0.00			0.01
Nonperforming loans to total loans	0.73			0.85			0.96			0.47			0.25			0.73			0.25
Nonperforming assets to total assets	0.56			0.68			0.73			0.33			0.21			0.56			0.21
Stock Repurchase Information:
Common stock repurchased (dollars) (3)	$	6,277		$	54,420		$	27,784		$	17,125		$	12,453		$	60,697		$	16,555
Common stock repurchased (full shares) (3)	67,949			593,713			345,166			233,594			157,418			661,662			214,304

(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.

7

Nicolet Bankshares, Inc.
Net Interest Income and Net Interest Margin Analysis (Unaudited)
	For the Three Months Ended
	June 30, 2022						March 31, 2022						June 30, 2021
	Average				Average		Average				Average		Average				Average
(In thousands)	Balance		Interest		Rate		Balance		Interest		Rate		Balance		Interest		Rate
ASSETS
PPP loans	$	5,333	$	13	0.93	%	$	13,503	$	1,377	40.79	%	$	205,639	$	4,862	9.35	%
All other loans	4,833,202		52,971		4.34	%	4,675,281		49,957		4.27	%	2,663,466		30,267		4.50	%
Total loans (1) (2)	4,838,535		52,984		4.34	%	4,688,784		51,334		4.38	%	2,869,105		35,129		4.85	%
Investment securities (2)	1,573,027		6,126		1.56	%	1,575,624		6,158		1.57	%	537,632		2,794		2.08	%
Other interest-earning assets	168,082		790		1.87	%	446,783		817		0.73	%	702,657		616		0.35	%
Total interest-earning assets	6,579,644		$	59,900	3.61	%	6,711,191		$	58,309	3.48	%	4,109,394		$	38,539	3.72	%
Other assets, net	693,575						808,445						418,445
Total assets	$	7,273,219					$	7,519,636					$	4,527,839
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing core deposits	$	3,787,103	$	1,857	0.20	%	$	4,009,898	$	1,637	0.17	%	$	2,387,730	$	1,523	0.26	%
Brokered deposits	423,372		553		0.52	%	459,460		555		0.49	%	253,816		910		1.44	%
Total interest-bearing deposits	4,210,475		2,410		0.23	%	4,469,358		2,192		0.20	%	2,641,546		2,433		0.37	%
Wholesale funding	214,975		2,032		3.77	%	214,557		1,931		3.60	%	43,325		303		2.76	%
Total interest-bearing liabilities	4,425,450		$	4,442	0.40	%	4,683,915		$	4,123	0.35	%	2,684,871		$	2,736	0.41	%
Noninterest-bearing demand deposits	1,977,569						1,923,186						1,256,251
Other liabilities	32,225						51,216						35,743
Stockholders' equity	837,975						861,319						550,974
Total liabilities and stockholders' equity	$	7,273,219					$	7,519,636					$	4,527,839
Net interest income and rate spread			$	55,458	3.21	%			$	54,186	3.13	%			$	35,803	3.31	%
Net interest margin					3.34	%					3.23	%					3.45	%
	For the Six Months Ended
	June 30, 2022						June 30, 2021
	Average				Average		Average				Average
(In thousands)	Balance		Interest		Rate		Balance		Interest		Rate
ASSETS
PPP loans	$	9,395	$	1,390	29.41	%	$	206,066	$	8,813	8.51	%
All other loans	4,754,678		102,928		4.31	%	2,641,438		60,200		4.54	%
Total loans (1) (2)	4,764,073		104,318		4.36	%	2,847,504		69,013		4.83	%
Investment securities (2)	1,574,319		12,284		1.56	%	533,013		5,383		2.02	%
Other interest-earning assets	306,662		1,607		1.05	%	719,036		1,271		0.35	%
Total interest-earning assets	6,645,054		$	118,209	3.54	%	4,099,553		$	75,667	3.68	%
Other assets, net	750,693						421,866
Total assets	$	7,395,747					$	4,521,419
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing core deposits	$	3,897,885	$	3,494	0.18	%	$	2,391,816	$	3,364	0.28	%
Brokered deposits	441,316		1,108		0.51	%	285,029		1,991		1.41	%
Total interest-bearing deposits	4,339,201		4,602		0.21	%	2,676,845		5,355		0.40	%
Wholessale funding	214,767		3,963		3.69	%	47,487		616		2.58	%
Total interest-bearing liabilities	4,553,968		$	8,565	0.38	%	2,724,332		$	5,971	0.44	%
Noninterest-bearing demand deposits	1,950,528						1,209,718
Other liabilities	41,669						39,594
Stockholders' equity	849,582						547,775
Total liabilities and stockholders' equity	$	7,395,747					$	4,521,419
Net interest income and rate spread			$	109,644	3.16	%			$	69,696	3.24	%
Net interest margin					3.29	%					3.38	%

(1) Nonaccrual loans and loans held for sale are included in the daily average loan balances outstanding.

(2) The yield on tax-exempt loans and tax-exempt investment securities is computed on a tax-equivalent basis using a federal tax rate of 21%, and adjusted for the disallowance of interest expense.

8

Nicolet Bankshares, Inc.
Reconciliation of Non-GAAP Financial Measures (Unaudited)
	At or for the Three Months Ended										At or for the Six Months Ended
(In thousands, except per share data)	06/30/2022		3/31/2022		12/31/2021		9/30/2021		6/30/2021		6/30/2022		6/30/2021
Adjusted net income reconciliation: (1)
Net income (GAAP)	$	23,985	$	24,164	$	16,305	$	7,824	$	18,284	$	48,149	$	36,523
Adjustments:
Provision expense related to merger	—		—		8,400		6,000		—		—		—
Assets (gains) losses, net	(1,603)		(1,313)		(465)		1,187		(4,192)		(2,916)		(4,903)
Merger-related expense	555		98		2,202		2,793		656		653		656
Branch closure expense	—		—		—		944		—		—		—
Adjustments subtotal	(1,048)		(1,215)		10,137		10,924		(3,536)		(2,263)		(4,247)
Tax on Adjustments (25%)	(262)		(304)		2,534		2,731		(884)		(566)		(1,062)
Adjustments, net of tax	(786)		(911)		7,603		8,193		(2,652)		(1,697)		(3,185)
Adjusted net income (Non-GAAP)	$	23,199	$	23,253	$	23,908	$	16,017	$	15,632	$	46,452	$	33,338
Common shares outstanding:
Weighted average diluted common shares	13,852		14,215		13,049		10,776		10,326		14,035		10,365
Diluted earnings per common share:
Diluted earnings per common share (GAAP)	$	1.73	$	1.70	$	1.25	$	0.73	$	1.77	$	3.43	$	3.52
Adjusted Diluted earnings per common share (Non-GAAP)	$	1.67	$	1.64	$	1.83	$	1.49	$	1.51	$	3.31	$	3.22
Tangible assets: (2)
Total assets	$	7,370,252	$	7,320,212	$	7,695,037	$	6,407,820	$	4,587,347
Goodwill and other intangibles, net	336,721		338,068		339,492		269,954		173,711
Tangible assets	$	7,033,531	$	6,982,144	$	7,355,545	$	6,137,866	$	4,413,636
Tangible common equity: (2)
Stockholders’ equity	$	839,387	$	836,310	$	891,891	$	729,278	$	559,395
Goodwill and other intangibles, net	336,721		338,068		339,492		269,954		173,711
Tangible common equity	$	502,666	$	498,242	$	552,399	$	459,324	$	385,684
Tangible average common equity: (2)
Average stockholders’ equity (common)	$	837,975	$	861,319	$	784,666	$	608,946	$	550,974	$	849,582	$	547,775
Average goodwill and other intangibles, net	337,289		338,694		294,051		201,748		174,026		337,988		174,424
Average tangible common equity	$	500,686	$	522,625	$	490,615	$	407,198	$	376,948	$	511,594	$	373,351

(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.

9

XML

Cover	Jul. 19, 2022
Cover [Abstract]
Document Type	8-K
Entity Registrant Name	NICOLET BANKSHARES, INC.
Entity Incorporation, State or Country Code	WI
Entity File Number	001-37700
Entity Tax Identification Number	47-0871001
Entity Address, Address Line One	111 North Washington Street
Entity Address, City or Town	Green Bay
Entity Address, State or Province	WI
Entity Address, Postal Zip Code	54301
City Area Code	920
Local Phone Number	430-1400
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	NIC
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0001174850
Amendment Flag	false
Document Period End Date	Jul. 19, 2022