GREEN BAY, Wis., April 21,
2020 /PRNewswire/ -- Nicolet Bankshares, Inc. (NASDAQ: NCBS)
("Nicolet") announced first quarter 2020 net income of $10.6 million and earnings per diluted common
share of $0.98, compared to
$12.3 million and $1.18 for fourth quarter 2019, and $10.3 million and $1.05 for first quarter 2019, respectively.
Annualized quarterly return on average assets was 1.19%, 1.46% and
1.37%, for first quarter 2020, fourth quarter 2019 and first
quarter 2019, respectively.
"Our underlying first quarter earnings were strong, despite
headwinds affecting March results," said Bob Atwell, Chairman and CEO of Nicolet.
"Lacking clear visibility of the impact on credit costs, we
significantly increased our loan loss provision over what we
originally expected for the quarter before the COVID-19 pandemic
(to $3.0 million versus $0.4 million), representing a sincere effort to
make a directionally accurate acknowledgment of dramatically
changed circumstances that continue to evolve. Our
margin has just begun to show the squeeze from the Federal
Reserve's 150 basis points decline in rates and our own actions of
leveraging up to add significant liquidity in March. While we
continue to pay all employees, we also supplemented the pay of our
front-line people working on-site and eliminated senior management
incentive accruals for the quarter."
"The dramatic events surrounding the COVID-19 pandemic will
clearly impact future expectations about credit costs, and margins,
as well as fee income and expenses," said Atwell. "While our focus
is on safely meeting our customers' needs, we are well aware that
this year will not play out as it started or as we expected. We
dramatically strengthened our liquidity as March unfolded and will
evaluate the need to maintain such levels as conditions
develop. We will further adjust the loan loss provision as we
gain more information each quarter. We did not budget for a year
like this, but with the memory of the 2008-2010 period in our
minds, we have regularly asked ourselves if and when the scale of
such events could return. We have therefore intentionally
focused on maintaining strong capital, a stable core deposit base,
and exceptional credit quality for years. We know the uncertainty
our customers are living with day to day, and we also understand
the ingenuity and resilience of the people in our markets. We are
experiencing their difficulties and we will support their
recoveries through the 2020 recession."
"The COVID-19 pandemic has affected each one of our customers
and employees over these past several weeks, and will continue to
do so with uncertainty as we move into the next several months,"
said Mike Daniels, President and CEO
of Nicolet National Bank.
"However, I could not be more proud of how our employees have
responded to this unprecedented crisis. Every day, we are showing
others what Nicolet is all about, and what it truly means to live
our Core Values by taking care of our customers as well as each
other. Hundreds of our customers have been negatively impacted by
the state mandated shut down. Our retail and commercial bankers
have been working tirelessly over the last several weeks with their
borrowers to find creative solutions to help them get through this
period of uncertainty, whether that is with new credit, temporary
loan modifications, or participation in the Paycheck Protection
Program through the recently passed CARES Act," Daniels said.
Through April 16th,
2020 Nicolet has made over 600 modifications on loans totaling
$367 million, mainly to its
commercial borrowers. In addition, it has processed nearly 1,700
applications totaling approximately $309
million for the Paycheck Protection Program. "Our goal is to
make sure each of our commercial customers receive the support
necessary to make it through these challenging times," Daniels
added.
At March 31, 2020, period end assets were $3.7
billion, an increase of $155 million
(4%) over December 31, 2019 balances, with cash and cash
equivalents totaling $242 million at
quarter end. The quarter-over-quarter increase was largely due to
the additional liquidity actions in March, where cash equivalents
and investments combined increased by roughly $200 million over February, largely funded by
brokered deposits and FHLB advances. Total deposits were $3.0
billion as of March 31, 2020, an increase of $69 million over year-end, with non-core deposits
up $124 million. Core deposits were
lower by $55 million, consistent with
customary seasonal trends. Loans were $2.6
billion at March 31, 2020, up $34
million or 5% annualized over year-end 2019, fairly evenly
split between commercial term loans and lines of credit.
Quarterly average loans increased $405 million or 19% over first quarter 2019
and $146 million or 24% annualized over fourth quarter
2019, both mainly due to the full quarter addition from the Choice
Bancorp, Inc. ("Choice") acquisition which closed in November 2019. Likewise, quarterly average
deposits increased $363 million and
$164 million over the first quarter
2019 and fourth quarter 2019, respectively.
First quarter 2020 net interest income increased $0.8 million (3%) over fourth quarter 2019,
largely due to the growth in average interest-earnings assets
impacted by the timing of the Choice acquisition. The net
interest margin for first quarter 2020 was 3.94%, down from 4.06%
on a linked quarter basis, as the yield on earning assets declined
16bps, partially offset by the cost of funds declining 8bps during
the period. The net interest margin components were impacted by the
150bps decline in short-term rates by the Federal Reserve in March.
First quarter noninterest income excluding net asset losses
decreased $3.2 million (24%) compared
to fourth quarter 2019, predominantly from $2.6 million lower net mortgage income (nearly
equally split between seasonally lower volumes and unfavorable
changes in both the fair value of interest rate locks under
volatile rates and MSR asset impairment from higher refinances) and
$0.8 million negative change in the
value of nonqualified deferred compensation plan assets given the
significant market decline in March. Net asset losses (primarily
stemming from unfavorable market movements on equity securities)
totaled $0.7 million in the first
quarter 2020 versus $0.1 million in
the prior quarter. Noninterest expense decreased $1.6 million (6%) from fourth quarter 2019, with
personnel costs decreasing $0.3
million (of which, nonqualified deferred compensation
expense declined $1.0 million related
to the plan asset decline noted above), and all non-personnel
expenses combined decreasing $1.3
million (as fourth quarter 2019 included a non-recurring
$0.7 million lease termination charge
for the closure of an Oshkosh
branch and an $0.8 million full
write-off of nonbank goodwill). Income tax expense
decreased $2.3 million between the linked quarters on
lower pre-tax income and a normalized effective tax rate, compared
to fourth quarter 2019 which also included salary deduction
limitations that affected the effective tax rate.
Nonperforming assets were minimally changed from year-end 2019,
increasing $1 million to $16 million and representing 0.42% of total
assets at both March 31, 2020 and year-end 2019. The allowance
for loan losses of $26 million
represented 1.00% of total loans at March 31, 2020. The
$12.2 million increase in the
allowance since year-end 2019 was a result of the
$9.3 million increase due to the
adoption of the current expected credit losses ("CECL") model
during the quarter as required, as well as the $3.0 million provision for loan losses during the
quarter discussed above. Net charge-offs remained negligible during
the first quarter at $0.1 million or
0.01% of average loans.
Total capital was $511 million at
March 31, 2020, a decrease of $5
million since December 31,
2019, mostly due to the adoption of CECL, which negatively
impacted equity by $6 million, as
well as $14 million of stock
repurchases during the quarter being mostly offset by earnings and
other equity changes. As a result of the uncertainty
regarding future economic conditions due to the COVID-19 pandemic,
Nicolet temporarily suspended its share repurchase program on
March 21, 2020.
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 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
and the upper peninsula of Michigan. More information can be
found at www.nicoletbank.com.
Forward-Looking Statements
This news release
contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, which Congress
passed in an effort to encourage companies to provide information
about their anticipated future financial performance. This act
protects a company from unwarranted litigation if actual results
are different from management expectations. This report reflects
the current views and estimates of future economic circumstances,
industry conditions, company performance, and financial results of
the management of Nicolet. These forward-looking statements are
subject to a number of factors and uncertainties which could cause
Nicolet's actual results and experience to differ from the
anticipated results and expectations expressed in such
forward-looking statements, and such differences may be material.
Forward-looking statements speak only as of the date they are made
and Nicolet does not assume any duty to update forward-looking
statements. There are a number of factors that could cause our
actual results to differ materially from those projected in such
forward-looking statements.
In addition to factors previously disclosed in Nicolet's
reports filed with the SEC and those identified elsewhere in this
news release, these forward-looking statements include, but are not
limited to, statements about (i) Nicolet's expected COVID-19
pandemic response and how its operations and financial condition
may change as a result of the COVID-19 pandemic; (ii) the expected
impact on the broader economy with regard to the effects of the
COVID-19 pandemic and the government's response to the COVID-19
pandemic; and (iii) Nicolet's plans, objectives, expectations and
intentions and other statements contained in this report that are
not historical facts. Other statements identified by words
such as "expects," "anticipates," "intends," "plans," "believes,"
"seeks," "estimates," "targets," "projects" or words of similar
meaning generally are intended to identify forward-looking
statements. These statements are based upon the current beliefs and
expectations of Nicolet's management and are inherently subject to
significant business, economic and competitive risks and
uncertainties, many of which are beyond their control. In addition,
these forward-looking statements are subject to assumptions with
respect to future business strategies and decisions that are
subject to change. Actual results may differ from those indicated
or implied in the forward-looking statements and such differences
may be material.
The COVID-19 pandemic is adversely affecting us, our
customers, counterparties, employees, and third-party service
providers, and the ultimate extent of the impacts on our business,
financial position, results of operations, liquidity, and prospects
is uncertain. Continued deterioration in general business and
economic conditions or turbulence in domestic financial markets
could adversely affect Nicolet's revenues and the values of its
assets and liabilities, lead to a tightening of credit, and
increase stock price volatility. In addition, the COVID-19 pandemic
may result in changes to statutes, regulations, or regulatory
policies or practices resulting from could affect Nicolet in
substantial and unpredictable ways.
Nicolet
Bankshares, Inc.
|
Consolidated
Financial Summary (Unaudited)
|
|
|
|
At or for the
Three Months Ended
|
(In thousands, except
per share data)
|
|
3/31/2020
|
|
12/31/2019
|
|
9/30/2019
|
|
6/30/2019
|
|
3/31/2019
|
Results of
operations:
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
$
|
37,003
|
|
|
$
|
36,192
|
|
|
$
|
34,667
|
|
|
$
|
34,570
|
|
|
$
|
33,159
|
|
Interest
expense
|
|
5,740
|
|
|
5,723
|
|
|
5,477
|
|
|
5,626
|
|
|
5,684
|
|
Net interest
income
|
|
31,263
|
|
|
30,469
|
|
|
29,190
|
|
|
28,944
|
|
|
27,475
|
|
Provision for loan
losses
|
|
3,000
|
|
|
300
|
|
|
400
|
|
|
300
|
|
|
200
|
|
Net interest income
after provision for loan losses
|
|
28,263
|
|
|
30,169
|
|
|
28,790
|
|
|
28,644
|
|
|
27,275
|
|
Noninterest
income
|
|
9,585
|
|
|
13,309
|
|
|
12,312
|
|
|
18,560
|
|
|
9,186
|
|
Noninterest
expense
|
|
23,854
|
|
|
25,426
|
|
|
22,887
|
|
|
25,727
|
|
|
22,759
|
|
Income before income
tax expense
|
|
13,994
|
|
|
18,052
|
|
|
18,215
|
|
|
21,477
|
|
|
13,702
|
|
Income tax
expense
|
|
3,321
|
|
|
5,670
|
|
|
4,603
|
|
|
2,833
|
|
|
3,352
|
|
Net income
|
|
10,673
|
|
|
12,382
|
|
|
13,612
|
|
|
18,644
|
|
|
10,350
|
|
Net income
attributable to noncontrolling interest
|
|
118
|
|
|
87
|
|
|
82
|
|
|
95
|
|
|
83
|
|
Net income
attributable to Nicolet Bankshares, Inc.
|
|
$
|
10,555
|
|
|
$
|
12,295
|
|
|
$
|
13,530
|
|
|
$
|
18,549
|
|
|
$
|
10,267
|
|
Earnings per
common share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.00
|
|
|
$
|
1.22
|
|
|
$
|
1.45
|
|
|
$
|
1.98
|
|
|
$
|
1.09
|
|
Diluted
|
|
$
|
0.98
|
|
|
$
|
1.18
|
|
|
$
|
1.40
|
|
|
$
|
1.91
|
|
|
$
|
1.05
|
|
Common
Shares:
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average
|
|
10,516
|
|
|
10,061
|
|
|
9,347
|
|
|
9,374
|
|
|
9,461
|
|
Diluted weighted
average
|
|
10,801
|
|
|
10,452
|
|
|
9,697
|
|
|
9,692
|
|
|
9,758
|
|
Outstanding
|
|
10,408
|
|
|
10,588
|
|
|
9,363
|
|
|
9,327
|
|
|
9,431
|
|
Noninterest
Income:
|
|
|
|
|
|
|
|
|
|
|
Trust services fee
income
|
|
$
|
1,579
|
|
|
$
|
1,596
|
|
|
$
|
1,594
|
|
|
$
|
1,569
|
|
|
$
|
1,468
|
|
Brokerage fee
income
|
|
2,322
|
|
|
2,190
|
|
|
2,113
|
|
|
2,002
|
|
|
1,810
|
|
Mortgage income,
net
|
|
2,327
|
|
|
4,916
|
|
|
3,700
|
|
|
2,059
|
|
|
1,203
|
|
Service charges on
deposit accounts
|
|
1,225
|
|
|
1,237
|
|
|
1,223
|
|
|
1,194
|
|
|
1,170
|
|
Card interchange
income
|
|
1,562
|
|
|
1,683
|
|
|
1,735
|
|
|
1,660
|
|
|
1,420
|
|
BOLI
income
|
|
703
|
|
|
535
|
|
|
495
|
|
|
880
|
|
|
459
|
|
Other noninterest
income
|
|
521
|
|
|
1,285
|
|
|
1,166
|
|
|
1,624
|
|
|
1,484
|
|
Noninterest income
without net gains
|
|
10,239
|
|
|
13,442
|
|
|
12,026
|
|
|
10,988
|
|
|
9,014
|
|
Asset gains (losses),
net
|
|
(654)
|
|
|
(133)
|
|
|
286
|
|
|
7,572
|
|
|
172
|
|
Total noninterest
income
|
|
$
|
9,585
|
|
|
$
|
13,309
|
|
|
$
|
12,312
|
|
|
$
|
18,560
|
|
|
$
|
9,186
|
|
Noninterest
Expense:
|
|
|
|
|
|
|
|
|
|
|
Personnel
expense
|
|
$
|
13,323
|
|
|
$
|
13,628
|
|
|
$
|
12,914
|
|
|
$
|
15,358
|
|
|
$
|
12,537
|
|
Occupancy, equipment
and office
|
|
4,204
|
|
|
3,827
|
|
|
3,454
|
|
|
3,757
|
|
|
3,750
|
|
Business development
and marketing
|
|
1,359
|
|
|
1,397
|
|
|
1,428
|
|
|
1,579
|
|
|
1,281
|
|
Data
processing
|
|
2,563
|
|
|
2,730
|
|
|
2,515
|
|
|
2,350
|
|
|
2,355
|
|
Intangibles
amortization
|
|
993
|
|
|
936
|
|
|
914
|
|
|
969
|
|
|
1,053
|
|
Other noninterest
expense
|
|
1,412
|
|
|
2,908
|
|
|
1,662
|
|
|
1,714
|
|
|
1,783
|
|
Total noninterest
expense
|
|
$
|
23,854
|
|
|
$
|
25,426
|
|
|
$
|
22,887
|
|
|
$
|
25,727
|
|
|
$
|
22,759
|
|
Period-End
Balances:
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
2,607,424
|
|
|
$
|
2,573,751
|
|
|
$
|
2,242,931
|
|
|
$
|
2,203,273
|
|
|
$
|
2,189,688
|
|
Allowance for loan
losses
|
|
26,202
|
|
|
13,972
|
|
|
13,620
|
|
|
13,571
|
|
|
13,370
|
|
Securities available
for sale, at fair value
|
|
511,860
|
|
|
449,302
|
|
|
419,300
|
|
|
403,989
|
|
|
407,693
|
|
Goodwill and other
intangibles, net
|
|
164,974
|
|
|
165,967
|
|
|
121,371
|
|
|
122,285
|
|
|
123,254
|
|
Total
assets
|
|
3,732,554
|
|
|
3,577,260
|
|
|
3,105,671
|
|
|
3,054,813
|
|
|
3,041,091
|
|
Deposits
|
|
3,023,466
|
|
|
2,954,453
|
|
|
2,584,447
|
|
|
2,536,639
|
|
|
2,538,486
|
|
Stockholders'
equity
|
|
510,971
|
|
|
516,262
|
|
|
428,014
|
|
|
411,415
|
|
|
398,767
|
|
Book value per common
share
|
|
49.09
|
|
|
48.76
|
|
|
45.71
|
|
|
44.11
|
|
|
42.28
|
|
Tangible book value
per common share (1)
|
|
33.24
|
|
|
33.08
|
|
|
32.75
|
|
|
31.00
|
|
|
29.21
|
|
Nicolet
Bankshares, Inc.
|
Consolidated
Financial Summary (Unaudited) - Continued
|
|
|
|
At or for the
Three Months Ended
|
(In thousands, except
per share data)
|
|
3/31/2020
|
|
12/31/2019
|
|
9/30/2019
|
|
6/30/2019
|
|
3/31/2019
|
Average
Balances:
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
2,584,584
|
|
|
$
|
2,438,908
|
|
|
$
|
2,218,307
|
|
|
$
|
2,189,070
|
|
|
$
|
2,179,420
|
|
Securities available
for sale, at fair value
|
|
453,820
|
|
|
424,981
|
|
|
399,090
|
|
|
402,934
|
|
|
409,580
|
|
Interest-earning
assets
|
|
3,167,505
|
|
|
2,974,974
|
|
|
2,763,997
|
|
|
2,702,357
|
|
|
2,734,936
|
|
Total
assets
|
|
3,555,144
|
|
|
3,339,283
|
|
|
3,094,546
|
|
|
3,022,383
|
|
|
3,047,068
|
|
Deposits
|
|
2,920,071
|
|
|
2,756,295
|
|
|
2,563,821
|
|
|
2,514,226
|
|
|
2,556,927
|
|
Interest-bearing
liabilities
|
|
2,218,592
|
|
|
2,023,448
|
|
|
1,895,754
|
|
|
1,892,775
|
|
|
1,946,210
|
|
Goodwill and other
intangibles, net
|
|
165,532
|
|
|
147,636
|
|
|
121,895
|
|
|
122,841
|
|
|
123,892
|
|
Stockholders'
equity
|
|
513,558
|
|
|
478,645
|
|
|
420,864
|
|
|
404,345
|
|
|
391,027
|
|
Selected Financial
Ratios: (2)
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.19
|
%
|
|
1.46
|
%
|
|
1.73
|
%
|
|
2.46
|
%
|
|
1.37
|
%
|
Return on average
common equity
|
|
8.27
|
|
|
10.19
|
|
|
12.75
|
|
|
18.40
|
|
|
10.65
|
|
Return on average
tangible common equity (1)
|
|
12.20
|
|
|
14.74
|
|
|
17.95
|
|
|
26.43
|
|
|
15.59
|
|
Average equity to
average assets
|
|
14.45
|
|
|
14.33
|
|
|
13.60
|
|
|
13.38
|
|
|
12.83
|
|
Stockholders' equity
to assets
|
|
13.69
|
|
|
14.43
|
|
|
13.78
|
|
|
13.47
|
|
|
13.11
|
|
Tangible common
equity to tangible assets (1)
|
|
9.70
|
|
|
10.27
|
|
|
10.28
|
|
|
9.86
|
|
|
9.44
|
|
Loan yield
|
|
5.19
|
|
|
5.33
|
|
|
5.56
|
|
|
5.66
|
|
|
5.51
|
|
Earning asset
yield
|
|
4.66
|
|
|
4.82
|
|
|
4.97
|
|
|
5.11
|
|
|
4.89
|
|
Cost of
interest-bearing deposits
|
|
0.93
|
|
|
0.99
|
|
|
1.00
|
|
|
1.05
|
|
|
1.04
|
|
Cost of
funds
|
|
1.04
|
|
|
1.12
|
|
|
1.14
|
|
|
1.19
|
|
|
1.18
|
|
Net interest
margin
|
|
3.94
|
|
|
4.06
|
|
|
4.19
|
|
|
4.28
|
|
|
4.05
|
|
Efficiency
ratio
|
|
57.16
|
|
|
57.57
|
|
|
55.19
|
|
|
64.01
|
|
|
61.91
|
|
Effective tax
rate
|
|
23.73
|
|
|
31.41
|
|
|
25.27
|
|
|
13.19
|
|
|
24.46
|
|
Selected Asset
Quality Information:
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans
|
|
$
|
14,769
|
|
|
$
|
14,122
|
|
|
9,238
|
|
|
$
|
7,650
|
|
|
8,732
|
|
Other real estate
owned
|
|
1,000
|
|
|
1,000
|
|
|
1,325
|
|
|
300
|
|
|
420
|
|
Nonperforming
assets
|
|
$
|
15,769
|
|
|
$
|
15,122
|
|
|
$
|
10,563
|
|
|
$
|
7,950
|
|
|
$
|
9,152
|
|
Net loan
charge-offs
|
|
$
|
55
|
|
|
$
|
(52)
|
|
|
$
|
351
|
|
|
$
|
99
|
|
|
$
|
(17)
|
|
Allowance for loan
losses to loans
|
|
1.00
|
%
|
|
0.54
|
%
|
|
0.61
|
%
|
|
0.62
|
%
|
|
0.61
|
%
|
Net loan charge-offs
to average loans (2)
|
|
0.01
|
|
|
(0.01)
|
|
|
0.06
|
|
|
0.02
|
|
|
(0.00)
|
|
Nonperforming loans
to total loans
|
|
0.57
|
|
|
0.55
|
|
|
0.41
|
|
|
0.35
|
|
|
0.40
|
|
Nonperforming assets
to total assets
|
|
0.42
|
|
|
0.42
|
|
|
0.34
|
|
|
0.26
|
|
|
0.30
|
|
Selected Other
Information:
|
|
|
|
|
|
|
|
|
|
|
Interest income
resolved PCI loans (rounded)
|
|
N/A
|
|
$
|
1,400
|
|
|
$
|
1,800
|
|
|
$
|
1,300
|
|
|
$
|
200
|
|
Tax-equivalent
adjustment net interest income
|
|
$
|
231
|
|
|
$
|
257
|
|
|
$
|
251
|
|
|
$
|
263
|
|
|
$
|
272
|
|
Tax benefit on
stock-based compensation
|
|
$
|
(323)
|
|
|
$
|
(1,275)
|
|
|
$
|
(128)
|
|
|
$
|
(739)
|
|
|
$
|
(144)
|
|
Common stock
repurchased (dollars) (3)
|
|
$
|
13,903
|
|
|
$
|
3,383
|
|
|
$
|
576
|
|
|
$
|
9,142
|
|
|
$
|
5,600
|
|
Common stock
repurchased (full shares) (3)
|
|
206,833
|
|
|
47,728
|
|
|
9,300
|
|
|
151,098
|
|
|
102,655
|
|
|
|
1
|
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.
|
2
|
Income
statement-related ratios for partial-year periods are
annualized.
|
3
|
Reflects common stock
repurchased under board of director authorizations for the common
stock repurchase program.
|
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SOURCE Nicolet Bankshares, Inc.