Document

Exhibit 99.1

FOR IMMEDIATE RELEASE

NICOLET BANKSHARES, INC. ANNOUNCES SECOND QUARTER 2023 RESULTS

•Net income of $23 million for second quarter 2023

•Net income of $14 million for first six months of 2023, compared to $48 million for first six months of 2022, significantly impacted by first quarter balance sheet repositioning

•Quarterly net interest margin of 3.14%, an increase of 23 bps over the first quarter

•Improvement in asset quality as nonperforming assets decline to 0.32% of total assets

•First quarterly cash dividend of $0.25 per common share paid during the second quarter

Green Bay, Wisconsin, July 18, 2023 - Nicolet Bankshares, Inc. (NYSE: NIC) (“Nicolet”) announced second quarter 2023 net income of $23 million and earnings per diluted common share of $1.51, compared to a net loss of $9 million and loss per diluted common share of $0.61 for first quarter 2023, and net income of $24 million and earnings per diluted common share of $1.73 for second quarter 2022. Net income for the six months ended June 30, 2023 was $14 million and earnings per diluted common share of $0.91, compared to net income of $48 million and earnings per diluted common share of $3.43 for the first half of 2022.

Results for 2023 were significantly impacted by the March 7 sale of $500 million (par value) U.S. Treasury held to maturity securities for a pre-tax loss of $38 million or an after-tax loss of $28 million. The $500 million portfolio yielded approximately 88 bps with scheduled maturities in 2024 and 2025 (or average duration of 2 years). Proceeds from the sale were used to reduce existing FHLB borrowings with the remainder held in investable cash.

Net income reflected certain non-core items and the related tax effect of each, including U.S. Treasury securities sale loss, expected loss (provision expense) on the Signature Bank sub debt investment (acquired in an acquisition), merger-related expenses, Day 2 credit provision expense required under the CECL model, as well as gains / (losses) on other assets and investments. These non-core items negatively impacted earnings per diluted common share $0.02 for second quarter 2023 and $2.06 for first quarter 2023, and positively impacted earnings per diluted common share $0.06 for second quarter 2022. For the six months ended June 30, 2023, these non-core items negatively impacted earnings per diluted common share $2.07, and positively impacted earnings per diluted common share $0.12 for the first half of 2022.

“First things first, I am impressed at how the entire Nicolet team has responded to our decision to reposition our balance sheet in the first quarter. We have been re-energized by the move and the results are showing up in new relationships across our revenue lines,” said Mike Daniels, President and CEO of Nicolet. “I think this shows the value of putting actions behind our words and trusting our team to continue to deliver on Nicolet’s promise - to serve our customers, communities, and each other. Thus far, they have, and I am confident that this will continue. We anticipated a higher net interest margin, which has happened this quarter. This, combined with an already outstanding asset quality profile and a clean balance sheet, continues to put Nicolet in an enviable position despite the ongoing macroeconomic challenges.”

Daniels continued, “It is important to remember that we are a reflection of the communities we serve. Given the appropriate heightened scrutiny around office commercial real estate, I want to re-emphasize our lending strategy is in the markets we serve. That means any office exposure is limited only to our smaller and mid-size markets, with no exposure in major metro areas. I think people tend to group all office CRE into one bucket, but fail to realize the whole “work from home” movement has had a limited effect in our markets. As a result, our credit quality continues to remain strong. Furthermore, I’ll note the office portfolio is very granular, with the average balance in the portfolio less than $886,000, we believe this speaks to the above point on diversification and limits the loss risk to Nicolet should conditions worsen.”

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

Balance Sheet Review

At June 30, 2023, period end assets were $8.5 billion, an increase of $290 million (4%) from March 31, 2023, mostly higher cash balances, partly offset by maturities and paydowns of investment securities. Total loans were minimally changed from March 31, 2023, as growth in the portfolio was offset by the sale of specific nonaccrual loans (net book value of approximately $13 million) and the payoff of a classified loan relationship ($10 million outstanding). Total deposits of $7.2 billion at June 30, 2023, increased $270 million (4%) from March 31, 2023, with growth in customer and brokered time deposits partly offset by lower transaction account balances. Total capital was $978 million at June 30, 2023, an increase of $16 million since March 31, 2023, on solid earnings, partly offset by payment of the first quarterly cash dividend and unfavorable market valuations on available for sale securities.

Asset Quality

Nonperforming assets were $27 million and represented 0.32% of total assets at June 30, 2023, compared to $41 million or 0.50% at March 31, 2023, and $42 million or 0.56% at June 30, 2022. The reduction in nonperforming assets was due to the nonaccrual loan sale (noted above). The allowance for credit losses-loans was $63 million and represented 1.01% of total loans at June 30, 2023, compared to $62 million (or 1.00% of total loans) at March 31, 2023, and $51 million (or 1.02% of total loans) at June 30, 2022. Asset quality trends remain solid and loan net charge-offs were negligible.

Income Statement Review - Quarter

Net income for second quarter 2023 was $23 million, compared to a net loss of $9 million for first quarter 2023.

Net interest income was $59 million for second quarter 2023, up $2 million from first quarter 2023, the net effect of higher interest income and higher interest expense. The higher interest income was largely attributable to the repricing of new and renewed loans in a rising interest rate environment along with increased investable cash balances, partly offset by lower interest income on investment securities from the balance sheet repositioning late in first quarter 2023. The increase in interest expense was mostly due to higher average rates, reflecting the rising interest rate environment as well as some migration of customer deposits to higher rate deposit products. The net interest margin for second quarter 2023 was 3.14%, up 23 bps from 2.91% for first quarter 2023. The yield on interest-earning assets increased 41 bps (to 4.90%) due to a shift in the mix of average interest-earning assets (from the balance sheet repositioning) as well as the rising interest rate environment, while the cost of funds increased 24 bps (to 2.54%) for second quarter 2023, attributable mainly to the repricing of deposits and funding in the higher interest rate environment.

Noninterest income was $17 million for second quarter 2023, a $39 million favorable change compared to first quarter 2023. Excluding net asset gains (losses), noninterest income for second quarter 2023 was $17 million, a $1 million increase over first quarter 2023. The sequential quarter increase included higher wealth revenue, mortgage income, and card interchange income, partly offset by an unfavorable change in the fair value of nonqualified deferred compensation plan assets.

Noninterest expense of $45 million was minimally changed from first quarter 2023. Personnel expense decreased slightly due to a decrease in the fair value of nonqualified deferred compensation plan liabilities. Non-personnel expenses increased 2% between the sequential quarters including higher data processing (mostly volume-based system processing) and FDIC assessments, partly offset by lower marketing expense.

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 or core banking operations, 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 expectations of higher net interest margin in the future and our expectations for potential loss exposure within the loan portfolio due to the current macroeconomic challenges.

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, including, but not limited to: (i) deterioration in the financial condition of Nicolet’s borrowers, including as a result of the negative impact of inflationary pressures on our customers and their businesses, resulting in significant increases in loan losses and provisions for those losses; (ii) fluctuations or differences in interest rates on loans or deposits from those that Nicolet is modeling or anticipating, including as a result of Nicolet’s inability to better match deposit rates with the changes in the short-term rate environment, or that affect the yield curve; (iii) adverse conditions in the national or local economies including in Nicolet’s operating markets; (iv) the inability of Nicolet, or entities in which it has significant investments, to maintain the long-term historical growth rate of its loan portfolio; (v) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits, including during times when Nicolet is seeking to limit the rates it pays on deposits; (vi) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (vii) effectiveness of Nicolet’s asset management activities in improving, resolving or liquidating lower-quality assets; (viii) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on Nicolet’s results, including as a result of the negative impact to net interest margin from rising deposit and other funding costs; (ix) the results of regulatory examinations; (x) Nicolet’s ability to identify potential candidates for, consummate, and achieve synergies from, potential future acquisitions; (xi) difficulties and delays in integrating acquired businesses or fully realizing costs savings and other benefits from acquisitions; (xii) risks of expansion into new geographic or product markets; (xiiii) any matter that would cause Nicolet to conclude that there was impairment of any asset, including goodwill or other intangible assets; (xiv) reduced ability to attract additional financial advisors (or failure of such advisors to cause their clients to switch to Nicolet), to retain financial advisors (including as a result of the competitive environment for associates) or otherwise to attract customers from other financial institutions; (xv) deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xvi) inability to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies, required capital maintenance levels or regulatory requests or directives; (xvii) the vulnerability of Nicolet’s network and online banking portals, and the systems of parties with whom Nicolet contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; (xviii) the possibility of increased compliance and operational costs as a result of increased regulatory oversight, and the

development of additional banking products for Nicolet’s corporate and consumer clients; (xix) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers; (xx) fluctuations in the valuations of Nicolet’s equity investments and the ultimate success of such investments; (xxi) the availability of and access to capital; (xxii) adverse results (including costs, fines, reputational harm, inability to obtain necessary approvals and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of Nicolet’s participation in and execution of government programs related to the COVID-19 pandemic; and (xxiii) general competitive, economic, political and market conditions. 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.

All 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)	6/30/2023		3/31/2023		12/31/2022		9/30/2022		6/30/2022
Assets
Cash and due from banks	$	122,021	$	93,462	$	121,211	$	118,537	$	96,189
Interest-earning deposits	383,185		20,718		33,512		319,745		84,828
Cash and cash equivalents	505,206		114,180		154,723		438,282		181,017
Certificates of deposit in other banks	9,808		11,293		12,518		13,510		15,502
Securities available for sale, at fair value	921,108		1,023,176		917,618		949,597		813,248
Securities held to maturity, at amortized cost	—		—		679,128		686,424		695,812
Other investments	57,578		57,482		65,286		79,279		53,269
Loans held for sale	3,849		4,962		1,482		3,709		5,084

Loans	6,222,776		6,223,732		6,180,499		5,984,437		4,978,654
Allowance for credit losses - loans	(62,811)		(62,412)		(61,829)		(60,348)		(50,655)
Loans, net	6,159,965		6,161,320		6,118,670		5,924,089		4,927,999
Premises and equipment, net	117,278		112,569		108,956		106,648		96,656
Bank owned life insurance (“BOLI”)	167,192		166,107		165,137		165,166		136,060
Goodwill and other intangibles, net	398,194		400,277		402,438		407,117		336,721
Accrued interest receivable and other assets	142,450		140,988		138,013		122,095		108,884
Total assets	$	8,482,628	$	8,192,354	$	8,763,969	$	8,895,916	$	7,370,252

Liabilities and Stockholders' Equity
Liabilities:
Noninterest-bearing demand deposits	$	2,059,939	$	2,094,623	$	2,361,816	$	2,477,507	$	2,045,732
Interest-bearing deposits	5,138,665		4,833,956		4,817,105		4,918,395		4,240,534
Total deposits	7,198,604		6,928,579		7,178,921		7,395,902		6,286,266
Short-term borrowings	50,000		50,000		317,000		280,000		—
Long-term borrowings	197,577		197,448		225,342		225,236		196,963

Accrued interest payable and other liabilities	58,809		54,535		70,177		56,315		47,636
Total liabilities	7,504,990		7,230,562		7,791,440		7,957,453		6,530,865
Stockholders' Equity:
Common stock	147		147		147		147		134
Additional paid-in capital	624,897		623,746		621,988		620,392		520,741
Retained earnings	417,863		398,966		407,864		380,263		361,753
Accumulated other comprehensive income (loss)	(65,269)		(61,067)		(57,470)		(62,339)		(43,241)
Total stockholders' equity	977,638		961,792		972,529		938,463		839,387
Total liabilities and stockholders' equity	$	8,482,628	$	8,192,354	$	8,763,969	$	8,895,916	$	7,370,252

Common shares outstanding	14,717,938		14,698,265		14,690,614		14,673,197		13,407,375


Nicolet Bankshares, Inc.
Consolidated Statements of Income (Loss) (Unaudited)
	For the Three Months Ended										For the Six Months Ended
(In thousands, except per share data)	6/30/2023		3/31/2023		12/31/2022		9/30/2022		6/30/2022		6/30/2023		6/30/2022
Interest income:
Loans, including loan fees	$	84,091	$	79,142	$	76,367	$	63,060	$	52,954	$	163,233	$	104,253
Taxable investment securities	4,133		4,961		5,771		5,350		5,135		9,094		10,262
Tax-exempt investment securities	1,476		1,737		1,915		1,181		647		3,213		1,322
Other interest income	2,357		1,536		1,703		1,127		790		3,893		1,607
Total interest income	92,057		87,376		85,756		70,718		59,526		179,433		117,444
Interest expense:
Deposits	29,340		24,937		12,512		4,638		2,410		54,277		4,602
Short-term borrowings	1,108		3,212		2,624		594		28		4,320		28
Long-term borrowings	2,570		2,506		2,528		2,496		2,004		5,076		3,935
Total interest expense	33,018		30,655		17,664		7,728		4,442		63,673		8,565
Net interest income	59,039		56,721		68,092		62,990		55,084		115,760		108,879
Provision for credit losses	450		3,090		1,850		8,600		750		3,540		1,050
Net interest income after provision for credit losses	58,589		53,631		66,242		54,390		54,334		112,220		107,829
Noninterest income:
Wealth management fee income	5,870		5,512		5,170		5,009		4,992		11,382		10,691
Mortgage income, net	1,822		1,466		1,311		1,728		2,205		3,288		5,458
Service charges on deposit accounts	1,529		1,480		1,502		1,589		1,536		3,009		3,013
Card interchange income	3,331		3,033		3,100		3,012		2,950		6,364		5,531
BOLI income	1,073		1,200		1,151		966		768		2,273		1,701
Asset gains (losses), net	(318)		(38,468)		260		(46)		1,603		(38,786)		2,916
Deferred compensation plan asset market valuations	499		946		314		(571)		(1,316)		1,445		(1,783)
LSR income, net	1,135		1,155		(324)		(517)		(143)		2,290		(525)
Other noninterest income	1,900		1,832		2,362		1,830		1,536		3,732		3,072
Total noninterest income	16,841		(21,844)		14,846		13,000		14,131		(5,003)		30,074
Noninterest expense:
Personnel expense	23,900		24,328		23,705		24,136		19,681		48,228		40,872
Occupancy, equipment and office	8,845		8,783		8,246		7,641		6,891		17,628		13,835
Business development and marketing	1,946		2,121		2,303		2,281		2,057		4,067		3,888
Data processing	4,218		3,988		3,871		3,664		3,596		8,206		6,983
Intangibles amortization	2,083		2,161		2,217		1,628		1,347		4,244		2,771
FDIC assessments	1,009		540		480		480		480		1,549		960
Merger-related expense	26		163		492		519		555		189		653
Other noninterest expense	2,930		2,791		2,675		2,218		1,931		5,721		4,126
Total noninterest expense	44,957		44,875		43,989		42,567		36,538		89,832		74,088
Income (loss) before income tax expense	30,473		(13,088)		37,099		24,823		31,927		17,385		63,815
Income tax expense (benefit)	7,878		(4,190)		9,498		6,313		7,942		3,688		15,666
Net income (loss)	$	22,595	$	(8,898)	$	27,601	$	18,510	$	23,985	$	13,697	$	48,149
Earnings (loss) per common share:
Basic	$	1.54	$	(0.61)	$	1.88	$	1.33	$	1.79	$	0.93	$	3.56
Diluted	$	1.51	$	(0.61)	$	1.83	$	1.29	$	1.73	$	0.91	$	3.43
Common shares outstanding:
Basic weighted average	14,711		14,694		14,685		13,890		13,402		14,703		13,525
Diluted weighted average	14,960		14,694		15,110		14,310		13,852		15,011		14,035


Nicolet Bankshares, Inc.
Consolidated Financial Summary (Unaudited)
	For the Three Months Ended															For the Six Months Ended
(In thousands, except share & per share data)	6/30/2023			3/31/2023			12/31/2022			9/30/2022			6/30/2022			6/30/2023			6/30/2022
Selected Average Balances:
Loans	$	6,237,757		$	6,201,780		$	6,087,146		$	5,391,258		$	4,838,535		$	6,219,868		$	4,764,073
Investment securities	1,068,144			1,508,535			1,701,531			1,625,453			1,573,027			1,287,123			1,574,319
Interest-earning assets	7,497,935			7,830,590			7,963,485			7,161,120			6,579,644			7,663,344			6,645,054
Cash and cash equivalents	203,883			127,726			179,381			167,550			217,553			166,015			392,043
Goodwill and other intangibles, net	399,080			401,212			403,243			363,211			337,289			400,140			337,988
Total assets	8,228,600			8,570,623			8,688,741			7,856,131			7,273,219			8,398,667			7,395,747
Deposits	6,941,037			7,060,262			7,222,415			6,643,247			6,188,044			7,000,320			6,289,729
Interest-bearing liabilities	5,212,285			5,391,107			5,262,278			4,730,209			4,425,450			5,301,202			4,553,968
Stockholders’ equity (common)	967,142			970,108			954,970			890,205			837,975			968,617			849,582
Selected Ratios: (1)
Book value per common share	$	66.42		$	65.44		$	66.20		$	63.96		$	62.61		$	66.42		$	62.61
Tangible book value per common share (2)	$	39.37		$	38.20		$	38.81		$	36.21		$	37.49		$	39.37		$	37.49
Return on average assets	1.10		%	(0.42)		%	1.26		%	0.93		%	1.32		%	0.33		%	1.31		%
Return on average common equity	9.37			(3.72)			11.47			8.25			11.48			2.85			11.43
Return on average tangible common equity (2)	15.95			(6.34)			19.85			13.93			19.21			4.86			18.98
Average equity to average assets	11.75			11.32			10.99			11.33			11.52			11.53			11.49
Stockholders’ equity to assets	11.53			11.74			11.10			10.55			11.39			11.53			11.39
Tangible common equity to tangible assets (2)	7.17			7.21			6.82			6.26			7.15			7.17			7.15
Net interest margin	3.14			2.91			3.39			3.48			3.34			3.02			3.29
Efficiency ratio	58.60			60.69			52.79			55.62			53.74			59.63			54.16
Effective tax rate	25.85			32.01			25.60			25.43			24.88			21.21			24.55
Selected Asset Quality Information:
Nonaccrual loans	$	25,278		$	38,895		$	38,080		$	38,326		$	36,580		$	25,278		$	36,580
Other real estate owned - closed branches	958			1,347			1,347			1,506			4,378			958			4,378
Other real estate owned	520			628			628			628			628			520			628
Nonperforming assets	$	26,756		$	40,870		$	40,055		$	40,460		$	41,586		$	26,756		$	41,586
Net loan charge-offs (recoveries)	$	51		$	167		$	597		$	216		$	(149)		$	218		$	(83)
Allowance for credit losses-loans to loans	1.01		%	1.00		%	1.00		%	1.01		%	1.02		%	1.01		%	1.02		%
Net loan charge-offs to average loans (1)	0.01			0.01			0.04			0.02			(0.01)			0.01			0.00
Nonperforming loans to total loans	0.41			0.62			0.62			0.64			0.73			0.41			0.73
Nonperforming assets to total assets	0.32			0.50			0.46			0.45			0.56			0.32			0.56
Stock Repurchase Information:
Common stock repurchased (dollars) (3)	$	1,519		$	—		$	786		$	—		$	6,277		$	1,519		$	60,697
Common stock repurchased (full shares) (3)	26,853			—			10,000			—			67,949			26,853			661,662

(1)Income statement-related ratios for partial-year periods are annualized.

(2)See Reconciliation of Non-GAAP Financial Measures below for a reconciliation of these financial measures.

(3)Reflects common stock repurchased under board of director authorizations for the common stock repurchase program.


Nicolet Bankshares, Inc.
Consolidated Loan & Deposit Metrics (Unaudited)
(In thousands)	6/30/2023		3/31/2023		12/31/2022		9/30/2022		6/30/2022
Period End Loan Composition
Commercial & industrial	$	1,318,567	$	1,330,052	$	1,304,819	$	1,268,252	$	1,118,360
Owner-occupied commercial real estate (“CRE”)	969,202		969,064		954,599		954,933		790,680
Agricultural	1,068,999		1,065,909		1,088,607		1,017,498		967,192
Commercial	3,356,768		3,365,025		3,348,025		3,240,683		2,876,232
CRE investment	1,108,692		1,146,388		1,149,949		1,132,951		818,562
Construction & land development	337,389		333,370		318,600		306,446		228,575
Commercial real estate	1,446,081		1,479,758		1,468,549		1,439,397		1,047,137
Commercial-based loans	4,802,849		4,844,783		4,816,574		4,680,080		3,923,369
Residential construction	108,095		134,782		114,392		101,286		69,423
Residential first mortgage	1,072,609		1,014,166		1,016,935		970,384		785,591
Residential junior mortgage	184,873		177,026		177,332		176,428		148,732
Residential real estate	1,365,577		1,325,974		1,308,659		1,248,098		1,003,746
Retail & other	54,350		52,975		55,266		56,259		51,539
Retail-based loans	1,419,927		1,378,949		1,363,925		1,304,357		1,055,285
Total loans	$	6,222,776	$	6,223,732	$	6,180,499	$	5,984,437	$	4,978,654

Period End Deposit Composition
Noninterest-bearing demand	$	2,059,939	$	2,094,623	$	2,361,816	$	2,477,507	$	2,045,732
Interest-bearing demand	1,030,919		1,138,415		1,279,850		1,242,961		1,230,822
Money market	1,835,523		1,886,879		1,707,619		1,769,444		1,411,688
Savings	821,803		865,824		931,417		939,832		858,160
Time	1,450,420		942,838		898,219		966,158		739,864
Total deposits	$	7,198,604	$	6,928,579	$	7,178,921	$	7,395,902	$	6,286,266
Brokered transaction accounts	$	173,107	$	233,393	$	252,829	$	252,891	$	265,240
Brokered time deposits	566,405		289,181		339,066		386,101		218,198
Total brokered deposits	$	739,512	$	522,574	$	591,895	$	638,992	$	483,438
Customer transaction accounts	$	5,575,077	$	5,752,348	$	6,027,873	$	6,176,853	$	5,281,162
Customer time deposits	884,015		653,657		559,153		580,057		521,666
Total customer deposits (core)	$	6,459,092	$	6,406,005	$	6,587,026	$	6,756,910	$	5,802,828


Nicolet Bankshares, Inc.
Net Interest Income and Net Interest Margin Analysis (Unaudited)

	For the Three Months Ended
	June 30, 2023						March 31, 2023						June 30, 2022
	Average				Average		Average				Average		Average				Average
(In thousands)	Balance		Interest		Rate		Balance		Interest		Rate		Balance		Interest		Rate
ASSETS


Total loans (1) (2)	$	6,237,757	$	84,132	5.35	%	$	6,201,780	$	79,186	5.11	%	$	4,838,535	$	52,984	4.34	%
Investment securities (2)	1,068,144		6,094		2.28	%	1,508,535		7,246		1.93	%	1,573,027		6,126		1.56	%
Other interest-earning assets	192,034		2,357		4.87	%	120,275		1,536		5.11	%	168,082		790		1.87	%
Total interest-earning assets	7,497,935		$	92,583	4.90	%	7,830,590		$	87,968	4.49	%	6,579,644		$	59,900	3.61	%
Other assets, net	730,665						740,033						693,575
Total assets	$	8,228,600					$	8,570,623					$	7,273,219
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing core deposits	$	4,278,502	$	22,728	2.13	%	$	4,325,340	$	19,587	1.84	%	$	3,787,103	$	1,857	0.20	%
Brokered deposits	640,643		6,612		4.14	%	566,282		5,350		3.83	%	423,372		553		0.52	%
Total interest-bearing deposits	4,919,145		29,340		2.39	%	4,891,622		24,937		2.07	%	4,210,475		2,410		0.23	%
Wholesale funding	293,140		3,678		4.96	%	499,485		5,718		4.58	%	214,975		2,032		3.77	%
Total interest-bearing liabilities	5,212,285		$	33,018	2.54	%	5,391,107		$	30,655	2.30	%	4,425,450		$	4,442	0.40	%
Noninterest-bearing demand deposits	2,021,892						2,168,640						1,977,569
Other liabilities	27,281						40,768						32,225
Stockholders' equity	967,142						970,108						837,975
Total liabilities and stockholders' equity	$	8,228,600					$	8,570,623					$	7,273,219
Net interest income and rate spread			$	59,565	2.36	%			$	57,313	2.19	%			$	55,458	3.21	%
Net interest margin					3.14	%					2.91	%					3.34	%
Loan purchase accounting accretion (3)			$	1,636	0.10	%			$	1,636	0.11	%			$	987	0.08	%

	For the Six Months Ended
	June 30, 2023						June 30, 2022
	Average				Average		Average				Average
(In thousands)	Balance		Interest		Rate		Balance		Interest		Rate
ASSETS


Total loans (1) (2)	$	6,219,868	$	163,318	5.23	%	$	4,764,073	$	104,318	4.36	%
Investment securities (2)	1,287,123		13,340		2.07	%	1,574,319		12,284		1.56	%
Other interest-earning assets	156,353		3,893		4.96	%	306,662		1,607		1.05	%
Total interest-earning assets	7,663,344		$	180,551	4.69	%	6,645,054		$	118,209	3.54	%
Other assets, net	735,323						750,693
Total assets	$	8,398,667					$	7,395,747
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing core deposits	$	4,301,792	$	42,315	1.98	%	$	3,897,885	$	3,494	0.18	%
Brokered deposits	603,668		11,962		4.00	%	441,316		1,108		0.51	%
Total interest-bearing deposits	4,905,460		54,277		2.23	%	4,339,201		4,602		0.21	%
Wholesale funding	395,742		9,396		4.72	%	214,767		3,963		3.69	%
Total interest-bearing liabilities	5,301,202		$	63,673	2.42	%	4,553,968		$	8,565	0.38	%
Noninterest-bearing demand deposits	2,094,860						1,950,528
Other liabilities	33,988						41,669
Stockholders' equity	968,617						849,582
Total liabilities and stockholders' equity	$	8,398,667					$	7,395,747
Net interest income and rate spread			$	116,878	2.27	%			$	109,644	3.16	%
Net interest margin					3.02	%					3.29	%
Loan purchase accounting accretion (3)			$	3,272	0.10	%			$	1,561	0.07	%

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

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

(3) Loan purchase accounting accretion included in Total loans above, and the related impact to net interest margin.


Nicolet Bankshares, Inc.
Reconciliation of Non-GAAP Financial Measures (Unaudited)
	At or for the Three Months Ended										At or for the Six Months Ended
(In thousands, except per share data)	6/30/2023		3/31/2023		12/31/2022		9/30/2022		6/30/2022		6/30/2023		6/30/2022
Adjusted net income (loss) reconciliation: (1)
Net income (loss) (GAAP)	$	22,595	$	(8,898)	$	27,601	$	18,510	$	23,985	$	13,697	$	48,149
Adjustments:
Provision expense (2)	—		2,340		—		8,000		—		2,340		—
Assets (gains) losses, net	318		38,468		(260)		46		(1,603)		38,786		(2,916)
Merger-related expense	26		163		492		519		555		189		653

Adjustments subtotal	344		40,971		232		8,565		(1,048)		41,315		(2,263)
Tax on Adjustments (25%)	86		10,243		58		2,141		(262)		10,329		(566)
Adjustments, net of tax	258		30,728		174		6,424		(786)		30,986		(1,697)
Core banking operations / Adjusted net income (Non-GAAP)	$	22,853	$	21,830	$	27,775	$	24,934	$	23,199	$	44,683	$	46,452


Diluted earnings (loss) per common share:
Diluted earnings (loss) per common share (GAAP)	$	1.51	$	(0.61)	$	1.83	$	1.29	$	1.73	$	0.91	$	3.43
Adjusted Diluted earnings per common share (Non-GAAP)	$	1.53	$	1.45	$	1.84	$	1.74	$	1.67	$	2.98	$	3.31
Tangible assets: (3)
Total assets	$	8,482,628	$	8,192,354	$	8,763,969	$	8,895,916	$	7,370,252
Goodwill and other intangibles, net	398,194		400,277		402,438		407,117		336,721
Tangible assets	$	8,084,434	$	7,792,077	$	8,361,531	$	8,488,799	$	7,033,531
Tangible common equity: (3)
Stockholders’ equity (common)	$	977,638	$	961,792	$	972,529	$	938,463	$	839,387
Goodwill and other intangibles, net	398,194		400,277		402,438		407,117		336,721
Tangible common equity	$	579,444	$	561,515	$	570,091	$	531,346	$	502,666
Tangible average common equity: (3)
Average stockholders’ equity (common)	$	967,142	$	970,108	$	954,970	$	890,205	$	837,975	$	968,617	$	849,582
Average goodwill and other intangibles, net	399,080		401,212		403,243		363,211		337,289		400,140		337,988
Average tangible common equity	$	568,062	$	568,896	$	551,727	$	526,994	$	500,686	$	568,477	$	511,594

Note: Numbers may not sum due to rounding.

(1)The adjusted net income or core banking operations measure and related reconciliation provide information useful to investors in understanding the operating performance and trends of Nicolet and also to aid investors in the comparison of Nicolet’s financial performance to the financial performance of peer banks.

(2)Provision expense for 2023 is attributable to the expected loss on our investment in Signature Bank sub debt, and the provision expense for 2022 is attributable to the Day 2 allowance from the acquisition of Charter Bankshares, Inc.

(3)The 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.