GREEN BAY, Wis., Oct. 20, 2020 /PRNewswire/ -- Nicolet Bankshares,
Inc. (NASDAQ: NCBS) ("Nicolet") announced third quarter 2020 net
income of $18.1 million and earnings
per diluted common share of $1.72,
compared to $13.5 million and
$1.28 for second quarter 2020, and
$13.5 million and $1.40 for third quarter 2019, respectively.
Annualized quarterly return on average assets was 1.55%, 1.26% and
1.73%, for third quarter 2020, second quarter 2020 and third
quarter 2019, respectively.
For the nine months ended September 30,
2020, net income was $42.1
million, earnings per common share was $3.97, and annualized return on average assets
was 1.35%. Comparatively, for the first nine months of 2019,
net income was $42.3 million,
earnings per diluted common share was $4.36, and annualized return on average assets
was 1.85%, as 2019 net income included $5.4
million from two nonrecurring items. Second quarter
2019 included a $7.4 million
after-tax gain on the partial sale of our equity interest in a data
processing company, and $2.75 million
($2.0 million after-tax) in personnel
expense for retirement-related compensation declared. Therefore,
2020 year-to-date net income increased $5.2
million or 14% over net income for the nine months ended
September 30, 2019 of $37.0 million, excluding the two nonrecurring
items.
"Third quarter earnings were exceptional, led by continued
strong secondary mortgage income, steadily rising wealth revenues,
and settling expense levels," said Bob
Atwell, Chairman and CEO of Nicolet. "During March and
April, we acted aggressively to prepare our bank and customers for
the substantially negative impact of the COVID crisis. As we
moved through the second and third quarters, we have experienced
the inspiring resilience of our core customer base as well as the
diligence and heart of our colleagues to engage and support
them. Earnings momentum remains strong, while we have
continued to prepare for credit challenges which remain largely
unseen. We maintained the loan loss provision at $3 million for the third quarter."
"Our commercially focused ("C&I") customers as a group have
remained profitable and liquid," Atwell said. "While this is
evident in the financial statements they provide us, it is more
importantly visible in their reduced line of credit usage and high
cash deposits held on our balance sheet," Atwell said. "The
Paycheck Protection Program ("PPP") was a badly needed confidence
boost. This along with other proactive operational changes they
have made, many customers have further strengthened their balance
sheets even while their operations remain profitable."
"One of the most significant leading indicators today of the
level of future problems is the performance of our modified loans,"
Atwell continued. "Since the pandemic, we modified
$462 million of loans, or
approximately 18% of loans excluding PPP loans (predominantly
commercial loans and to interest-only terms). As of
September 30, only $60 million, or 2% of September's non-PPP loans,
remain on modified terms, and we expect approximately $45 million of those to end their modification
periods by November."
"The volume of our PPP loans, the immediate steps we took to
provide payment relief, and our second quarter micro-grants to the
smallest and hardest hit of our borrowers, are a very tangible
expression of the depth of our commitment to the people and the
communities we serve," Atwell stated. "These measures gave
our customers the time and resources to respond to the shock of
COVID. We are seeing both the resourcefulness and
determination of our customers very clearly in our second and third
quarter results. Much like the prior financial crisis of
2008-2012, the COVID crisis has been an opportunity to show the
difference a deeply embedded bank can make."
"The brand loyalty we have earned has also helped us deal with
the impact of rapid rate declines throughout 2019 and 2020," said
Atwell. "We have used strong analytics and a
relationship-based culture of fair but disciplined pricing to slow
core margin erosion."
"Our year-to-date net income is at a record level, despite
absorbing the costs of tough decisions," said Mike Daniels, President and CEO of Nicolet National Bank. "We recorded nearly
$4 million of pre-tax expense related
to the onset of the pandemic, a terminated acquisition and branch
closure decisions (all in the second quarter), and $9 million of loan loss provision against
potential future credit losses that we still cannot specifically
identify given significant volatility in the environment and
uncertainty of the extent of impact on borrowers."
"The contribution from our secondary mortgage business has been
stellar, as refinance activity remains significant," Daniels
said. "Our net mortgage income added $9.7 million in third quarter and $22.0 million year-to-date to pretax
earnings. For retail customers purchasing new homes or
refinancing, we closed over 1,200 loans this quarter and nearly
3,300 year-to-date. We are very proud of our teamwork and use of
automation to process this significant mortgage activity over
several months in an efficient manner, while maintaining a quality
customer experience."
"Our balance sheet continued to increase, in part from our
recent acquisition, but also from rising cash on extraordinary
deposit growth as customers remain focused on liquidity and
safety," Daniels said. "The dynamics of rising cash in this
near-zero rate environment, as well as waning commercial loan
demand, other than PPP loans, continue to squeeze the net interest
margin. In addition to prudent pricing actions on deposits
and loans, we are taking actions to reduce non-deposit
leverage. Along with brokered deposits maturing without
renewal and selected prepayment of FHLB advances, we are in the
process of early redemption of our higher-costing fixed rate
subordinated notes ($12 million at
5%) and the full redemption of one of our issuances of junior
subordinated debentures ($6 million
at 8%) by year end. Prepaying this combined debt of
$18 million will save us
approximately $1.1 million of
interest expense annually," Daniels stated.
The timing of Nicolet's acquisitions, Choice Bancorp, Inc.
("Choice") on November 8, 2019, at
12% of pre-merger assets, and Advantage Community Bancshares, Inc.
("Advantage") on August 21, 2020, at
4% of pre-merger assets, impacts financial comparisons.
Certain income statement results, average balances and related
ratios for the three and nine-month periods ended September 30, 2020 include full contribution from
Choice and a partial period of Advantage in third quarter 2020,
while the same periods in 2019 include no contribution from Choice
or Advantage.
Balance Sheet Review
At September 30, 2020, period end assets were $4.7
billion, an increase of $165 million
(4%) over June 30, attributable to the acquisition of
Advantage. The quarter-over-quarter increase in assets included
higher cash and cash equivalents (up $31 million to
$854 million), investment securities
(up $25 million to $535
million), and loans (up $87 million to $2.9 billion at September 30). Excluding
the impact of Advantage at acquisition, period end loans were
unchanged from June 30.
"Loans were growing well organically during 2019 and through
March 2020," Daniels said.
"However, since then, underlying organic loans have been declining
and only recently leveling off, as our borrowing base is choosing
to remain cautious with debt levels, use PPP funds, and stay more
liquid during the uncertain operating climate."
Total deposits of $3.7 billion at September 30, 2020, increased $175 million (5%) over June 30, also largely
due to the Advantage acquisition. Since June 30, transaction accounts combined (i.e.
savings, money markets and interest-bearing checking) increased
$152 million (9%) to $1.9 billion at September
30, and noninterest-bearing demand grew $47 million (4%) to $1.1
billion representing 30% of total deposits, while core time
deposits declined slightly (down $5
million or 1%) to $373 million
and brokered deposits decreased $20
million (6%) to $327
million. Excluding the impact of Advantage at
acquisition, period end deposits increased $34 million (1%) since June 30.
Total capital was $538 million at
September 30, 2020, an increase of
$6 million since June 30, 2020, mostly due to solid earnings,
partly offset by share repurchase activity. Nicolet repurchased
234,914 shares at a total cost of $13.7
million, or an average per share cost of $58.45 during third quarter 2020. On August 18, 2020, Nicolet's board authorized an
increase to the program of $20
million or up to 325,000 shares of common stock. As a
result, at September 30, 2020, there
remained $13.4 million authorized
under the repurchase program, as modified, to be utilized from
time-to-time to repurchase shares in the open market, through block
transactions or in private transactions.
Asset Quality
"Expectations about the extent and duration of current credit
stress on our customers remain extremely difficult to estimate,"
said Daniels. "As a result, this year we have provided
$9 million of loan loss provision,
which significantly exceeds the $0.9
million of year-to-date net charge-offs. While our
traditional asset quality metrics are not showing rising issues, we
feel this provides appropriate consideration for potential future
credit losses that just cannot be accurately quantified today."
Nonperforming assets decreased to $12
million at September 30, to
represent 0.25% of total assets compared to $13 million or 0.29% at June 30. Since
the prior quarter, the allowance for credit losses-loans increased
to $31 million, due to the
$3.0 million provision for credit
losses recognized, less net charge-offs during the quarter of
$0.7 million or 0.10% of average
loans, annualized. On a year-to-date basis, annualized, the
loan loss provision represented 0.44% of average loans (or 0.47%
excluding PPP loans) compared to net charge-offs at 0.04% of
average loans. At September 30, 2020,
the allowance represented 1.08% of total loans, and represented
1.22% of total loans excluding the net carrying value of PPP
loans.
During 2020, we originated 2,725 PPP loans totaling $351 million, bearing a 1% contractual
rate. At September 30,
the net carrying value of PPP loans was $335
million, or 12% of total loans, and $9.6 million of the $12.3
million in related gross fees remain unamortized.
"The PPP program has clearly aided many of our business
customers," Daniels said. "As the terms of forgiveness
continue to be clarified, nearly all of this is likely to convert
to equity for the businesses that remain viable."
Since the pandemic started, approximately 980 loans (88%
commercial and 12% retail) were provided payment modifications,
consistent with guidelines of the CARES Act, on loans totaling
$462 million (65% interest only and
35% full payment deferrals). As of September 30, $384
million (83%) had returned to normal payment structures and
$19 million (4%) were paid off (of
which one was a September charge-off for $0.5 million). The remaining $60 million (in 66 commercial and 6 retail loans)
remained under modification structure, representing only 2% of
September loans excluding PPP loans.
Income Statement Review
Net income for third quarter 2020 was $18.1 million, $4.6
million or 34% stronger than second quarter 2020 on positive
net interest income, continued strong net mortgage income, and
controlled expenses.
Net interest income of $32.6
million was $1.1 million
higher than second quarter 2020, comprised of $0.4 million higher interest income and
$0.7 million lower interest
expense. On a linked quarter basis, average interest-earning
assets increased $299 million (8%), due to growth in average
loans (up $47 million), investments (up $7 million) and
other interest-earning assets, which are predominantly cash, (up
$245 million, to represent 20% of interest-earning assets for
third quarter 2020 versus 15% for second quarter 2020). The
high cash levels are a positive contributor to net interest income
at a very low yield, thus pressuring the related margin
components. Average interest bearing liabilities increased
$193 million (7%) on a linked quarter
basis, comprised of $119 million
higher interest-bearing deposits (with core interest-bearing
deposits up $126 million, while
brokered deposits declined $7 million
on average) and $99 million higher
average PPPLF funding, partly offset by $25
million lower other interest-bearing liabilities (mostly the
early repayment of FHLB advances). Also adding to the heavy
cash position and net free funds was average noninterest-bearing
demand deposits, totaling $1.1
billion for third quarter compared to $1.0 billion in second quarter 2020, reflecting
the continued cautionary spending and increased liquidity of
consumers and businesses.
The net interest margin for third quarter 2020 was 3.06%, down
from 3.21% for second quarter 2020, heavily influenced by the
changing balance sheet mix to low-earning cash. The yield on
earning assets of 3.50% declined 26bps from second quarter 2020,
mostly due to the increase in cash that generally earns 10bps since
March 2020, as well as the low rate
on the PPP loans. The yield on loans excluding PPP loans was
4.89%, 7bps lower than second quarter 2020 mostly attributable to
the impact of the lower rate environment on variable loans and new
loans. The cost of funds of 0.64% declined 15bps during the same
period, attributable mainly to the timing of pricing changes
implemented on interest-bearing deposits (down 15bps to 0.60%) and
a higher proportion of PPPLF funds costing 35bps versus other
funding.
Third quarter noninterest income of $18.7
million increased $1.2 million (7%) compared to second quarter
2020. Excluding net asset gains, noninterest income grew
$0.3 million or 1% over second
quarter 2020. Net mortgage income remains strong, though down
slightly ($0.3 million) from the
prior quarter, including higher sale gains and capitalized gains
combined (up $0.8 million or 8%),
more than offset by an unfavorable change in the fair value marks
on the mortgage servicing asset and mortgage derivatives combined
(down $1.1 million). Trust services
fee income and brokerage fee income combined increased $0.3 million over second quarter 2020, consistent
with growth in accounts and assets under management. Service
charges on deposit accounts increased $0.2 million (28%), and card interchange
income increased $0.2 million
(15%) between the sequential quarters, as activity and volumes
returned to more normalized levels. Other noninterest income
decreased $0.3 million from
second quarter largely due to market losses since June on the value
of nonqualified deferred compensation plan assets.
Noninterest expense of $23.7
million decreased $4.1 million
(15%) from second quarter 2020. Personnel expense decreased
$0.4 million largely due to
$0.6 million lower salary and
overtime expense (reflecting branch closure savings, as well as
$0.4 million of on-site bonus pay and
$0.2 million of severance costs
incurred in second quarter), $0.3
million lower nonqualified deferred compensation expense
(related to the plan asset declines noted above), and $0.2 million lower fringe expense, partly offset
by $0.7 million higher incentive
accruals between the sequential quarters. All non-personnel
expenses combined decreased $3.7 million from the prior quarter, as
second quarter 2020 included expense of $1.5
million related to the branch closures (mostly lease
termination charges), $1.25 million
for the micro-grant program, $0.2
million pandemic-based testing and protective equipment and
$0.5 million to terminate the
Commerce Financial Holdings, Inc. merger agreement.
Acquisition and Branches Update
On August 21, Nicolet consummated
its all-cash purchase of Advantage. Upon consummation,
Advantage added $172 million in
assets (4% of pre-merger assets), including $88 million in loans, $1
million in core deposit intangible, $12 million in goodwill, and $141 million in deposits. The system
integration was completed and the four branches of Advantage opened
as Nicolet National Bank branches on
August 24, expanding our presence in
Central Wisconsin and the
Wausau area. The inclusion
of Advantage's balance sheet and operational results for roughly
one month in the third quarter explains a modest portion of the
increases in certain period end balances, average balances and
income statement line items.
Nicolet started the year with 39 branches. As of today, Nicolet
operates 36 branches, which includes the acquired 4 locations less
the 7 branch closures (as announced in the prior quarter).
During fourth quarter, Nicolet plans to close its Rib Mountain
location (near Wausau) and open an
additional Appleton location that
is currently under construction.
Nicolet continues to explore potential acquisitions in existing
and adjacent markets. "Margin headwinds, credit quality issues and
the general trauma of COVID will accelerate the pressure of smaller
banks to sell. Much like the financial crisis 12 years ago,
we see a great opportunity for highly accretive consolidation,"
concluded Atwell.
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 pandemic
response and how its operations and financial condition may change
as a result of the COVID pandemic; (ii) the expected impact on the
broader economy with regard to the effects of the COVID pandemic
and the government's response to the COVID 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 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 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
|
|
At or for the Nine
Months Ended
|
(In thousands, except
per share data)
|
|
09/30/2020
|
|
06/30/2020
|
|
03/31/2020
|
|
12/31/2019
|
|
09/30/2019
|
|
9/30/2020
|
|
9/30/2019
|
Results of
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
$
|
37,270
|
|
|
$
|
36,892
|
|
|
$
|
37,003
|
|
|
$
|
36,192
|
|
|
$
|
34,667
|
|
|
$
|
111,165
|
|
|
$
|
102,396
|
|
Interest
expense
|
|
4,710
|
|
|
5,395
|
|
|
5,740
|
|
|
5,723
|
|
|
5,477
|
|
|
15,845
|
|
|
16,787
|
|
Net interest
income
|
|
32,560
|
|
|
31,497
|
|
|
31,263
|
|
|
30,469
|
|
|
29,190
|
|
|
95,320
|
|
|
85,609
|
|
Provision for credit
losses
|
|
3,000
|
|
|
3,000
|
|
|
3,000
|
|
|
300
|
|
|
400
|
|
|
9,000
|
|
|
900
|
|
Net interest income
after provision for credit losses
|
|
29,560
|
|
|
28,497
|
|
|
28,263
|
|
|
30,169
|
|
|
28,790
|
|
|
86,320
|
|
|
84,709
|
|
Noninterest
income
|
|
18,691
|
|
|
17,471
|
|
|
9,585
|
|
|
13,309
|
|
|
12,312
|
|
|
45,747
|
|
|
40,058
|
|
Noninterest
expense
|
|
23,685
|
|
|
27,813
|
|
|
23,854
|
|
|
25,426
|
|
|
22,887
|
|
|
75,352
|
|
|
71,373
|
|
Income before income
tax expense
|
|
24,566
|
|
|
18,155
|
|
|
13,994
|
|
|
18,052
|
|
|
18,215
|
|
|
56,715
|
|
|
53,394
|
|
Income tax
expense
|
|
6,434
|
|
|
4,576
|
|
|
3,321
|
|
|
5,670
|
|
|
4,603
|
|
|
14,331
|
|
|
10,788
|
|
Net income
|
|
18,132
|
|
|
13,579
|
|
|
10,673
|
|
|
12,382
|
|
|
13,612
|
|
|
42,384
|
|
|
42,606
|
|
Net income
attributable to noncontrolling interest
|
|
30
|
|
|
101
|
|
|
118
|
|
|
87
|
|
|
82
|
|
|
249
|
|
|
260
|
|
Net income
attributable to Nicolet Bankshares, Inc.
|
|
$
|
18,102
|
|
|
$
|
13,478
|
|
|
$
|
10,555
|
|
|
$
|
12,295
|
|
|
$
|
13,530
|
|
|
$
|
42,135
|
|
|
$
|
42,346
|
|
Earnings per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.75
|
|
|
$
|
1.29
|
|
|
$
|
1.00
|
|
|
$
|
1.22
|
|
|
$
|
1.45
|
|
|
$
|
4.04
|
|
|
$
|
4.51
|
|
Diluted
|
|
$
|
1.72
|
|
|
$
|
1.28
|
|
|
$
|
0.98
|
|
|
$
|
1.18
|
|
|
$
|
1.40
|
|
|
$
|
3.97
|
|
|
$
|
4.36
|
|
Common
Shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average
|
|
10,349
|
|
|
10,417
|
|
|
10,516
|
|
|
10,061
|
|
|
9,347
|
|
|
10,426
|
|
|
9,394
|
Diluted weighted
average
|
|
10,499
|
|
|
10,520
|
|
|
10,801
|
|
|
10,452
|
|
|
9,697
|
|
|
10,605
|
|
|
9,707
|
Outstanding
|
|
10,196
|
|
|
10,424
|
|
|
10,408
|
|
|
10,588
|
|
|
9,363
|
|
|
10,196
|
|
|
9,363
|
Noninterest
Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust services fee
income
|
|
$
|
1,628
|
|
|
$
|
1,510
|
|
|
$
|
1,579
|
|
|
$
|
1,596
|
|
|
$
|
1,594
|
|
|
$
|
4,717
|
|
|
$
|
4,631
|
|
Brokerage fee
income
|
|
2,489
|
|
|
2,269
|
|
|
2,322
|
|
|
2,190
|
|
|
2,113
|
|
|
7,080
|
|
|
5,925
|
|
Mortgage income,
net
|
|
9,675
|
|
|
9,963
|
|
|
2,327
|
|
|
4,916
|
|
|
3,700
|
|
|
21,965
|
|
|
6,962
|
|
Service charges on
deposit accounts
|
|
1,037
|
|
|
813
|
|
|
1,225
|
|
|
1,237
|
|
|
1,223
|
|
|
3,075
|
|
|
3,587
|
|
Card interchange
income
|
|
1,877
|
|
|
1,637
|
|
|
1,562
|
|
|
1,683
|
|
|
1,735
|
|
|
5,076
|
|
|
4,815
|
|
BOLI
income
|
|
531
|
|
|
540
|
|
|
703
|
|
|
535
|
|
|
495
|
|
|
1,774
|
|
|
1,834
|
|
Other noninterest
income
|
|
1,237
|
|
|
1,487
|
|
|
521
|
|
|
1,285
|
|
|
1,166
|
|
|
3,245
|
|
|
4,274
|
|
Noninterest income
without net gains
|
|
18,474
|
|
|
18,219
|
|
|
10,239
|
|
|
13,442
|
|
|
12,026
|
|
|
46,932
|
|
|
32,028
|
|
Asset gains (losses),
net
|
|
217
|
|
|
(748)
|
|
|
(654)
|
|
|
(133)
|
|
|
286
|
|
|
(1,185)
|
|
|
8,030
|
|
Total noninterest
income
|
|
$
|
18,691
|
|
|
$
|
17,471
|
|
|
$
|
9,585
|
|
|
$
|
13,309
|
|
|
$
|
12,312
|
|
|
$
|
45,747
|
|
|
$
|
40,058
|
|
Noninterest
Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel
expense
|
|
$
|
14,072
|
|
|
$
|
14,482
|
|
|
$
|
13,323
|
|
|
$
|
13,628
|
|
|
$
|
12,914
|
|
|
$
|
41,877
|
|
|
$
|
40,809
|
|
Occupancy, equipment
and office
|
|
4,051
|
|
|
4,361
|
|
|
4,204
|
|
|
3,827
|
|
|
3,454
|
|
|
12,616
|
|
|
10,961
|
|
Business development
and marketing
|
|
810
|
|
|
2,514
|
|
|
1,359
|
|
|
1,397
|
|
|
1,428
|
|
|
4,683
|
|
|
4,288
|
|
Data
processing
|
|
2,658
|
|
|
2,399
|
|
|
2,563
|
|
|
2,730
|
|
|
2,515
|
|
|
7,620
|
|
|
7,220
|
|
Intangibles
amortization
|
|
834
|
|
|
880
|
|
|
993
|
|
|
936
|
|
|
914
|
|
|
2,707
|
|
|
2,936
|
|
Other noninterest
expense
|
|
1,260
|
|
|
3,177
|
|
|
1,412
|
|
|
2,908
|
|
|
1,662
|
|
|
5,849
|
|
|
5,159
|
|
Total noninterest
expense
|
|
$
|
23,685
|
|
|
$
|
27,813
|
|
|
$
|
23,854
|
|
|
$
|
25,426
|
|
|
$
|
22,887
|
|
|
$
|
75,352
|
|
|
$
|
71,373
|
|
Period-End
Balances:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
loans
|
|
$
|
2,908,793
|
|
|
$
|
2,821,501
|
|
|
$
|
2,607,424
|
|
|
$
|
2,573,751
|
|
|
$
|
2,242,931
|
|
|
$
|
2,908,793
|
|
|
$
|
2,242,931
|
|
PPP loans
|
|
335,236
|
|
|
329,157
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
335,236
|
|
|
—
|
|
Total loans, ex. PPP
loans
|
|
2,573,557
|
|
|
2,492,344
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,573,557
|
|
|
—
|
|
Allowance for credit
losses - loans
|
|
31,388
|
|
|
29,130
|
|
|
26,202
|
|
|
13,972
|
|
|
13,620
|
|
|
31,388
|
|
|
13,620
|
|
Securities available
for sale, at fair value
|
|
535,351
|
|
|
510,809
|
|
|
511,860
|
|
|
449,302
|
|
|
419,300
|
|
|
535,351
|
|
|
419,300
|
|
Cash and cash
equivalents
|
|
853,564
|
|
|
822,684
|
|
|
241,960
|
|
|
182,059
|
|
|
143,969
|
|
|
853,564
|
|
|
143,969
|
|
Goodwill and other
intangibles, net
|
|
176,213
|
|
|
164,094
|
|
|
164,974
|
|
|
165,967
|
|
|
121,371
|
|
|
176,213
|
|
|
121,371
|
|
Total
assets
|
|
4,706,375
|
|
|
4,541,228
|
|
|
3,732,554
|
|
|
3,577,260
|
|
|
3,105,671
|
|
|
4,706,375
|
|
|
3,105,671
|
|
Deposits
|
|
3,712,808
|
|
|
3,537,805
|
|
|
3,023,466
|
|
|
2,954,453
|
|
|
2,584,447
|
|
|
3,712,808
|
|
|
2,584,447
|
|
Stockholders'
equity
|
|
538,068
|
|
|
532,033
|
|
|
510,971
|
|
|
516,262
|
|
|
428,014
|
|
|
538,068
|
|
|
428,014
|
|
Book value per common
share
|
|
52.77
|
|
|
51.04
|
|
|
49.09
|
|
|
48.76
|
|
|
45.71
|
|
|
52.77
|
|
|
45.71
|
|
Tangible book value
per common share (1)
|
|
35.49
|
|
|
35.30
|
|
|
33.24
|
|
|
33.08
|
|
|
32.75
|
|
|
35.49
|
|
|
32.75
|
|
Nicolet
Bankshares, Inc.
|
|
|
|
|
|
|
|
|
Consolidated
Financial Summary (Unaudited) - Continued
|
|
|
|
|
|
|
|
|
|
|
At or for the
Three Months Ended
|
|
At or for the Nine
Months Ended
|
(In thousands, except
per share data)
|
|
09/30/2020
|
|
6/30/2020
|
|
3/31/2020
|
|
12/31/2019
|
|
9/30/2019
|
|
9/30/2020
|
|
9/30/2019
|
Average
Balances:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
2,871,256
|
|
|
$
|
2,823,866
|
|
|
$
|
2,584,584
|
|
|
$
|
2,438,908
|
|
|
$
|
2,218,307
|
|
|
$
|
2,760,309
|
|
|
$
|
2,195,742
|
|
Investment
securities
|
|
496,153
|
|
|
489,597
|
|
|
453,820
|
|
|
424,981
|
|
|
399,090
|
|
|
479,916
|
|
|
403,829
|
|
Interest-earning
assets
|
|
4,216,106
|
|
|
3,917,499
|
|
|
3,167,505
|
|
|
2,974,974
|
|
|
2,763,997
|
|
|
3,768,676
|
|
|
2,733,870
|
|
Goodwill and other
intangibles, net
|
|
169,353
|
|
|
164,564
|
|
|
165,532
|
|
|
147,636
|
|
|
121,895
|
|
|
166,493
|
|
|
122,869
|
|
Total
assets
|
|
4,633,359
|
|
|
4,310,088
|
|
|
3,555,144
|
|
|
3,339,283
|
|
|
3,094,546
|
|
|
4,167,902
|
|
|
3,054,840
|
|
Deposits
|
|
3,636,260
|
|
|
3,403,188
|
|
|
2,920,071
|
|
|
2,756,295
|
|
|
2,563,821
|
|
|
3,320,994
|
|
|
2,545,017
|
|
Interest-bearing
liabilities
|
|
2,933,737
|
|
|
2,741,199
|
|
|
2,218,592
|
|
|
2,023,448
|
|
|
1,895,754
|
|
|
2,632,280
|
|
|
1,911,395
|
|
Stockholders'
equity
|
|
537,826
|
|
|
520,177
|
|
|
513,558
|
|
|
478,645
|
|
|
420,864
|
|
|
523,904
|
|
|
405,521
|
|
Selected Financial
Ratios: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.55
|
%
|
|
1.26
|
%
|
|
1.19
|
%
|
|
1.46
|
%
|
|
1.73
|
%
|
|
1.35
|
%
|
|
1.85
|
%
|
Return on average
common equity
|
|
13.39
|
|
|
10.42
|
|
|
8.27
|
|
|
10.19
|
|
|
12.75
|
|
|
10.74
|
|
|
13.96
|
|
Return on average
tangible common equity
(1)
|
|
19.54
|
|
|
15.24
|
|
|
12.20
|
|
|
14.74
|
|
|
17.95
|
|
|
15.75
|
|
|
20.03
|
|
Average equity to
average assets
|
|
11.61
|
|
|
12.07
|
|
|
14.45
|
|
|
14.33
|
|
|
13.60
|
|
|
12.57
|
|
|
13.27
|
|
Stockholders' equity
to assets
|
|
11.43
|
|
|
11.72
|
|
|
13.69
|
|
|
14.43
|
|
|
13.78
|
|
|
11.43
|
|
|
13.78
|
|
Tangible common
equity to tangible assets (1)
|
|
7.99
|
|
|
8.41
|
|
|
9.70
|
|
|
10.27
|
|
|
10.28
|
|
|
7.99
|
|
|
10.28
|
|
Net interest
margin
|
|
3.06
|
|
|
3.21
|
|
|
3.94
|
|
|
4.06
|
|
|
4.19
|
|
|
3.35
|
|
|
4.17
|
|
Efficiency
ratio
|
|
46.18
|
|
|
55.69
|
|
|
57.16
|
|
|
57.57
|
|
|
55.19
|
|
|
52.71
|
|
|
60.27
|
|
Effective tax
rate
|
|
26.19
|
|
|
25.21
|
|
|
23.73
|
|
|
31.41
|
|
|
25.27
|
|
|
25.27
|
|
|
20.20
|
|
Selected Asset
Quality Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans
|
|
$
|
10,997
|
|
|
$
|
11,998
|
|
|
14,769
|
|
|
$
|
14,122
|
|
|
$
|
9,238
|
|
|
$
|
10,997
|
|
|
$
|
9,238
|
|
Other real estate
owned
|
|
1,000
|
|
|
1,000
|
|
|
1,000
|
|
|
1,000
|
|
|
1,325
|
|
|
1,000
|
|
|
1,325
|
|
Nonperforming
assets
|
|
$
|
11,997
|
|
|
$
|
12,998
|
|
|
$
|
15,769
|
|
|
$
|
15,122
|
|
|
$
|
10,563
|
|
|
$
|
11,997
|
|
|
$
|
10,563
|
|
Net loan charge-offs
(recoveries)
|
|
$
|
743
|
|
|
$
|
71
|
|
|
$
|
55
|
|
|
$
|
(52)
|
|
|
$
|
351
|
|
|
$
|
869
|
|
|
$
|
433
|
|
Allowance for credit
losses-loans to loans
|
|
1.08
|
%
|
|
1.03
|
%
|
|
1.00
|
%
|
|
0.54
|
%
|
|
0.61
|
%
|
|
1.08
|
%
|
|
0.61
|
%
|
Net loan charge-offs
to average loans (2)
|
|
0.10
|
|
|
0.01
|
|
|
0.01
|
|
|
(0.01)
|
|
|
0.06
|
|
|
0.04
|
|
|
0.03
|
|
Nonperforming loans
to total loans
|
|
0.38
|
|
|
0.43
|
|
|
0.57
|
|
|
0.55
|
|
|
0.41
|
|
|
0.38
|
|
|
0.41
|
|
Nonperforming assets
to total assets
|
|
0.25
|
|
|
0.29
|
|
|
0.42
|
|
|
0.42
|
|
|
0.34
|
|
|
0.25
|
|
|
0.34
|
|
Selected Other
Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
resolved PCI loans (rounded)
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
$
|
1,400
|
|
|
$
|
1,800
|
|
|
N/A
|
|
|
$
|
3,300
|
|
Tax-equivalent
adjustment net interest income
|
|
$
|
249
|
|
|
$
|
229
|
|
|
$
|
231
|
|
|
$
|
257
|
|
|
$
|
251
|
|
|
$
|
709
|
|
|
$
|
786
|
|
Tax benefit on
stock-based compensation
|
|
$
|
(14)
|
|
|
$
|
(24)
|
|
|
$
|
(323)
|
|
|
$
|
(1,275)
|
|
|
$
|
(128)
|
|
|
$
|
(361)
|
|
|
$
|
(1,011)
|
|
Common stock
repurchased (dollars) (3)
|
|
$
|
13,732
|
|
|
$
|
—
|
|
|
$
|
13,903
|
|
|
$
|
3,383
|
|
|
$
|
576
|
|
|
$
|
27,635
|
|
|
$
|
15,318
|
|
Common stock
repurchased (full shares) (3)
|
|
234,914
|
|
|
—
|
|
|
206,833
|
|
|
47,728
|
|
|
9,300
|
|
|
441,747
|
|
|
263,053
|
|
|
|
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.
|
Nicolet
Bankshares, Inc.
|
|
|
|
|
|
|
|
|
Net Interest
Income and Net Interest Margin Analysis (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or for the
Three Months Ended
|
|
|
|
September 30,
2020
|
|
June 30,
2020
|
|
September 30,
2019
|
|
|
|
Average
|
|
|
|
Average
|
|
Average
|
|
|
|
Average
|
|
Average
|
|
|
|
Average
|
|
(In
thousands)
|
|
Balance
|
|
Interest
|
|
Rate
|
|
Balance
|
|
Interest
|
|
Rate
|
|
Balance
|
|
Interest
|
|
Rate
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PPP loans
|
|
$
|
332,816
|
|
|
$
|
2,477
|
|
|
2.91
|
%
|
|
$
|
264,705
|
|
|
$
|
1,786
|
|
|
2.67
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
|
Total loans ex
PPP
|
|
2,538,440
|
|
|
31,598
|
|
|
4.89
|
%
|
|
2,559,161
|
|
|
32,008
|
|
|
4.96
|
%
|
|
2,218,307
|
|
|
31,380
|
|
|
5.56
|
%
|
|
Total loans (1)
(2)
|
|
2,871,256
|
|
|
34,075
|
|
|
4.66
|
%
|
|
2,823,866
|
|
|
33,794
|
|
|
4.74
|
%
|
|
2,218,307
|
|
|
31,380
|
|
|
5.56
|
%
|
|
Investment securities
(2)
|
|
496,153
|
|
|
2,764
|
|
|
2.23
|
%
|
|
489,597
|
|
|
2,752
|
|
|
2.25
|
%
|
|
399,090
|
|
|
2,612
|
|
|
2.62
|
%
|
|
Other
interest-earning assets
|
|
848,697
|
|
|
680
|
|
|
0.32
|
%
|
|
604,036
|
|
|
575
|
|
|
0.38
|
%
|
|
146,600
|
|
|
926
|
|
|
2.49
|
%
|
|
Total interest-earning
assets
|
|
4,216,106
|
|
|
37,519
|
|
|
3.50
|
%
|
|
3,917,499
|
|
|
37,121
|
|
|
3.76
|
%
|
|
2,763,997
|
|
|
34,918
|
|
|
4.97
|
%
|
|
Other assets,
net
|
|
417,253
|
|
|
|
|
|
|
392,589
|
|
|
|
|
|
|
330,549
|
|
|
|
|
|
|
Total
assets
|
|
$4,633,359
|
|
|
|
|
|
$4,310,088
|
|
|
|
|
|
$3,094,546
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing core
deposits
|
|
$
|
2,180,575
|
|
|
$
|
2,541
|
|
|
0.46
|
%
|
|
$
|
2,054,574
|
|
|
$
|
3,170
|
|
|
0.62
|
%
|
|
$
|
1,763,844
|
|
|
$
|
4,466
|
|
|
1.00
|
%
|
|
Brokered
deposits
|
|
336,026
|
|
|
1,243
|
|
|
1.47
|
%
|
|
342,776
|
|
|
1,285
|
|
|
1.51
|
%
|
|
54,661
|
|
|
130
|
|
|
0.94
|
%
|
|
Total interest-bearing
deposits
|
|
2,516,601
|
|
|
3,784
|
|
|
0.60
|
%
|
|
2,397,350
|
|
|
4,455
|
|
|
0.75
|
%
|
|
1,818,505
|
|
|
4,596
|
|
|
1.00
|
%
|
|
PPPLF
|
|
335,865
|
|
|
297
|
|
|
0.35
|
%
|
|
237,153
|
|
|
210
|
|
|
0.35
|
%
|
|
—
|
|
|
—
|
|
|
0.00
|
%
|
|
Other
interest-bearing liabilities
|
|
81,271
|
|
|
629
|
|
|
3.05
|
%
|
|
106,696
|
|
|
730
|
|
|
2.71
|
%
|
|
77,249
|
|
|
881
|
|
|
4.48
|
%
|
|
Total interest-bearing
liabilities
|
|
2,933,737
|
|
|
4,710
|
|
|
0.64
|
%
|
|
2,741,199
|
|
|
5,395
|
|
|
0.79
|
%
|
|
1,895,754
|
|
|
5,477
|
|
|
1.14
|
%
|
|
Noninterest-bearing
demand deposits
|
|
1,119,659
|
|
|
|
|
|
|
1,005,838
|
|
|
|
|
|
|
745,316
|
|
|
|
|
|
|
Other
liabilities
|
|
42,137
|
|
|
|
|
|
|
42,874
|
|
|
|
|
|
|
32,612
|
|
|
|
|
|
|
Stockholders'
equity
|
|
537,826
|
|
|
|
|
|
|
520,177
|
|
|
|
|
|
|
420,864
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
4,633,359
|
|
|
|
|
|
|
$
|
4,310,088
|
|
|
|
|
|
|
$
|
3,094,546
|
|
|
|
|
|
|
Net interest income
and rate spread
|
|
|
|
$
|
32,809
|
|
|
2.86
|
%
|
|
|
|
$
|
31,726
|
|
|
2.97
|
%
|
|
|
|
$
|
29,441
|
|
|
3.83
|
%
|
|
Net interest
margin
|
|
|
|
|
|
3.06
|
%
|
|
|
|
|
|
3.21
|
%
|
|
|
|
|
|
4.19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or for the Nine
Months Ended
|
|
|
|
|
|
|
|
|
|
September 30,
2020
|
|
September 30,
2019
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
Average
|
|
Average
|
|
|
|
Average
|
|
|
|
|
|
|
|
(In
thousands)
|
|
Balance
|
|
Interest
|
|
Rate
|
|
Balance
|
|
Interest
|
|
Rate
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PPP loans
|
|
$
|
199,662
|
|
|
$
|
4,263
|
|
|
2.80
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
|
|
|
|
|
|
|
Total loans ex
PPP
|
|
2,560,647
|
|
|
97,414
|
|
|
5.01
|
%
|
|
2,195,742
|
|
|
92,650
|
|
|
5.58
|
%
|
|
|
|
|
|
|
|
Total loans (1)
(2)
|
|
2,760,309
|
|
|
101,677
|
|
|
4.85
|
%
|
|
2,195,742
|
|
|
92,650
|
|
|
5.58
|
%
|
|
|
|
|
|
|
|
Investment securities
(2)
|
|
479,916
|
|
|
8,280
|
|
|
2.30
|
%
|
|
403,829
|
|
|
7,799
|
|
|
2.57
|
%
|
|
|
|
|
|
|
|
Other
interest-earning assets
|
|
528,451
|
|
|
1,917
|
|
|
0.48
|
%
|
|
134,299
|
|
|
2,733
|
|
|
2.69
|
%
|
|
|
|
|
|
|
|
Total interest-earning
assets
|
|
3,768,676
|
|
|
111,874
|
|
|
3.91
|
%
|
|
2,733,870
|
|
|
103,182
|
|
|
4.99
|
%
|
|
|
|
|
|
|
|
Other assets,
net
|
|
399,226
|
|
|
|
|
|
|
320,970
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
4,167,902
|
|
|
|
|
|
|
$
|
3,054,840
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing core
deposits
|
|
$
|
2,070,500
|
|
|
$
|
9,894
|
|
|
0.64
|
%
|
|
$
|
1,769,479
|
|
|
$
|
13,812
|
|
|
1.04
|
%
|
|
|
|
|
|
|
|
Brokered
deposits
|
|
279,165
|
|
|
3,302
|
|
|
1.58
|
%
|
|
64,588
|
|
|
291
|
|
|
0.60
|
%
|
|
|
|
|
|
|
|
Total interest-bearing
deposits
|
|
2,349,665
|
|
|
13,196
|
|
|
0.75
|
%
|
|
1,834,067
|
|
|
14,103
|
|
|
1.03
|
%
|
|
|
|
|
|
|
|
PPPLF
|
|
191,535
|
|
|
507
|
|
|
0.35
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
|
|
|
|
|
|
Other
interest-bearing liabilities
|
|
91,080
|
|
|
2,142
|
|
|
3.10
|
%
|
|
77,328
|
|
|
2,684
|
|
|
4.59
|
%
|
|
|
|
|
|
|
|
Total interest-bearing
liabilities
|
|
2,632,280
|
|
|
15,845
|
|
|
0.80
|
%
|
|
1,911,395
|
|
|
16,787
|
|
|
1.17
|
%
|
|
|
|
|
|
|
|
Noninterest-bearing
demand deposits
|
|
971,329
|
|
|
|
|
|
|
710,950
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
liabilities
|
|
40,389
|
|
|
|
|
|
|
26,974
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
523,904
|
|
|
|
|
|
|
405,521
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
4,167,902
|
|
|
|
|
|
|
$
|
3,054,840
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
and rate spread
|
|
|
|
$
|
96,029
|
|
|
3.11
|
%
|
|
|
|
$
|
86,395
|
|
|
3.82
|
%
|
|
|
|
|
|
|
|
Net interest
margin
|
|
|
|
|
|
3.35
|
%
|
|
|
|
|
|
4.17
|
%
|
|
|
|
|
|
|
|
|
|
(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.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/nicolet-bankshares-inc-announces-third-quarter-2020-earnings-301156174.html
SOURCE Nicolet Bankshares, Inc.