Nicolet Bankshares, Inc. Announces Second Quarter 2024 Results

• Net income $29 million for second quarter 2024, compared to net income of $28 million in prior quarter, and net income of $23 million for second quarter 2023
• Net income of $57 million or adjusted net income (non-GAAP) of $55 million for first half 2024, compared to net income of $14 million or adjusted net income (non-GAAP) of $45 million for first half 2023
• Solid quarter-over-quarter loan growth of $132 million (2%) and growth in core deposits after experiencing seasonal lows in first quarter
• Quarterly cash dividend of $0.28 per common share paid during second quarter, a 12% increase over first quarter

GREEN BAY, Wis.--(BUSINESS WIRE)--Nicolet Bankshares, Inc. (NYSE: NIC) (“Nicolet”) announced second quarter 2024 net income of $29 million and earnings per diluted common share of $1.92, compared to net income of $28 million and earnings per diluted common share of $1.82 for first quarter 2024, and net income of $23 million and earnings per diluted common share of $1.51 for second quarter 2023. Net income for the six months ended June 30, 2024 was $57 million and earnings per diluted common share of $3.74, compared to net income of $14 million and earnings per diluted common share of $0.91 for the first half of 2023.

Net income reflected certain non-core items and the related tax effect of each, including the first quarter 2023 balance sheet repositioning and third quarter 2023 change in Wisconsin state tax law (as detailed in the Reconciliation of Non-GAAP Financial Measures table below), as well as gains / (losses) on other assets and investments in all periods. For the six months ended June 30, 2024, these non-core items positively impacted earnings per diluted common share $0.13, and negatively impacted earnings per diluted common share $2.07 for the six months ended June 30, 2023.

“Our strong second quarter results are a continuation and improvement of our first quarter results,” said Mike Daniels, Chairman, President, and CEO of Nicolet. “We witnessed growth in our core deposits after experiencing seasonal lows during tax season; loan growth remained strong for our markets; and our core lines of business are each performing well, despite market headwinds.”

Daniels continued, “Our margin continues to improve due to our heavy C&I focus and disciplined deposit pricing. We remain vigilant with credit, see few signs of significant stress in our markets, and unrealized losses are much smaller relative to our balance sheet given the shorter duration of our investment portfolio. Many of the fears the market has about banks, including shrinking margins, tepid loan growth, weakening asset quality due to CRE exposure, and stressed capital levels due to unrealized bond losses, are of limited concern for us at the moment. In short, we remain well positioned to keep producing peer-leading financial metrics for the remainder of the year, which will continue to provide us with strategic optionality going forward.”

Balance Sheet Review

At June 30, 2024, period end assets were $8.6 billion, an increase of $110 million (1%) from March 31, 2024, mostly from solid loan growth. Total loans increased $132 million (2%) from March 31, 2024, with growth in agricultural, commercial and industrial, and residential real estate loans. Total deposits of $7.2 billion at June 30, 2024, increased $75 million from March 31, 2024, mostly noninterest-bearing demand and time deposits. Total capital was $1.1 billion at June 30, 2024, an increase of $28 million over March 31, 2024, with earnings partly offset by the quarterly common stock dividend.

Asset Quality

Nonperforming assets were $29 million and represented 0.34% of total assets at June 30, 2024, minimally changed from $28 million or 0.33% of total assets at March 31, 2024, and $27 million or 0.32% of total assets at June 30, 2023. The allowance for credit losses-loans was $65 million and represented 1.00% of total loans at June 30, 2024, compared to $64 million (or 1.01% of total loans) at March 31, 2024, and $63 million (or 1.01% of total loans) at June 30, 2023. Asset quality trends remain solid and loan net charge-offs were negligible.

Income Statement Review - Quarter

Net income and adjusted net income (non-GAAP) was $29 million for second quarter 2024, compared to net income of $28 million or adjusted net income (non-GAAP) of $26 million for first quarter 2024.

Net interest income was $65 million for second quarter 2024, up $3 million from first quarter 2024. Interest income increased $5 million mostly due to the repricing of new and renewed loans in a rising interest rate environment, as well as solid loan growth, while interest expense increased $2 million mainly due to higher average balances. The net interest margin for second quarter 2024 was 3.35%, up 9 bps from 3.26% for first quarter 2024. The yield on interest-earning assets increased 17 bps (to 5.61%) mostly due to higher average rates from the repricing of the loan portfolio and interest recovered upon the payoff of a nonaccrual loan, while the cost of funds increased 8 bps (to 3.09%) for second quarter 2024, attributable mainly to higher cost brokered deposits.

Noninterest income of $20 million for second quarter 2024 was minimally changed from first quarter 2024. Excluding the net asset gains (losses), noninterest income for second quarter 2024 was $19 million, a $1 million increase from first quarter 2024, mostly due to higher net mortgage income. Net asset gains (losses) of $0.6 million for second quarter 2024 were mostly due to the gain on sale of an other investment, while first quarter 2024 included net gains of $1.9 million due to a $1 million gain on sale of an investment security and a $1 million gain on the early extinguishment of subordinated debt.

Noninterest expense of $47 million for second quarter 2024 was also minimally changed from first quarter 2024. Within personnel expense, lower salaries and payroll taxes were substantially offset by higher incentives, while in non-personnel expenses lower snowplowing and equipment maintenance was offset by higher legal and professional fees.

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 primarily 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, 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 and 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 company, 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 ability to produce peer-leading financial metrics and strategic optionality going forward.

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, include, but are not limited to general competitive, economic, political, regulatory and market conditions. Additional factors which could affect the forward-looking statements contained in this press release can be found under the headings “Forward-Looking Statements” and “Risk Factors” in Nicolet’s 2023 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.

Many of these factors are beyond Nicolet’s ability to control or predict. If one or more events related to these or other risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, actual results may differ materially from the forward-looking statements. Accordingly, shareholders and investors should not place undue reliance on any such forward-looking statements. Any 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. New risks and uncertainties may emerge from time to time, and it is not possible for Nicolet to predict their occurrence or how they will affect Nicolet.

Nicolet qualifies all forward-looking statements by these cautionary statements.

Nicolet Bankshares, Inc.
Consolidated Balance Sheets (Unaudited)
(In thousands, except share data)	6/30/2024			3/31/2024			12/31/2023			9/30/2023			6/30/2023
Assets
Cash and due from banks	$	109,674		$	81,677		$	129,898		$	109,414		$	122,021
Interest-earning deposits		298,856			345,747			361,533			436,466			383,185
Cash and cash equivalents		408,530			427,424			491,431			545,880			505,206
Certificates of deposit in other banks		3,924			5,639			6,374			7,598			9,808
Securities available for sale, at fair value		799,937			803,963			802,573			793,826			921,108
Other investments		60,796			60,464			57,560			58,367			57,578
Loans held for sale		9,450			5,022			4,160			6,500			3,849
Loans		6,529,134			6,397,617			6,353,942			6,239,257			6,222,776
Allowance for credit losses - loans		(65,414	)		(64,347	)		(63,610	)		(63,160	)		(62,811	)
Loans, net		6,463,720			6,333,270			6,290,332			6,176,097			6,159,965
Premises and equipment, net		120,988			119,962			118,756			117,744			117,278
Bank owned life insurance (“BOLI”)		171,972			170,746			169,392			168,223			167,192
Goodwill and other intangibles, net		391,421			393,183			394,366			396,208			398,194
Accrued interest receivable and other assets		126,279			126,989			133,734			145,719			142,450
Total assets	$	8,557,017		$	8,446,662		$	8,468,678		$	8,416,162		$	8,482,628
Liabilities and Stockholders' Equity
Liabilities:
Noninterest-bearing demand deposits	$	1,764,806		$	1,665,229		$	1,958,709		$	2,020,074		$	2,059,939
Interest-bearing deposits		5,476,272			5,500,503			5,239,091			5,162,314			5,138,665
Total deposits		7,241,078			7,165,732			7,197,800			7,182,388			7,198,604
Short-term borrowings		—			—			—			—			50,000
Long-term borrowings		162,433			162,257			166,930			197,754			197,577
Accrued interest payable and other liabilities		62,093			55,018			64,941			61,559			58,809
Total liabilities		7,465,604			7,383,007			7,429,671			7,441,701			7,504,990
Stockholders' Equity:
Common stock		150			149			149			147			147
Additional paid-in capital		639,159			636,621			633,770			626,348			624,897
Retained earnings		507,366			482,295			458,261			431,317			417,863
Accumulated other comprehensive income (loss)		(55,262	)		(55,410	)		(53,173	)		(83,351	)		(65,269	)
Total stockholders' equity		1,091,413			1,063,655			1,039,007			974,461			977,638
Total liabilities and stockholders' equity	$	8,557,017		$	8,446,662		$	8,468,678		$	8,416,162		$	8,482,628
Common shares outstanding		14,945,598			14,930,549			14,894,209			14,757,565			14,717,938

Nicolet Bankshares, Inc.
Consolidated Statements of Income (Unaudited)
	For the Three Months Ended												For the Six Months Ended
(In thousands, except per share data)	6/30/2024		3/31/2024		12/31/2023		9/30/2023			6/30/2023			6/30/2024		6/30/2023
Interest income:
Loans, including loan fees	$	97,975	$	93,648	$	90,265	$	87,657		$	84,091		$	191,623	$	163,233
Taxable investment securities		5,056		4,557		4,737		4,351			4,133			9,613		9,094
Tax-exempt investment securities		1,152		1,238		1,394		1,424			1,476			2,390		3,213
Other interest income		4,695		4,588		7,149		6,452			2,357			9,283		3,893
Total interest income		108,878		104,031		103,545		99,884			92,057			212,909		179,433
Interest expense:
Deposits		41,386		38,990		36,583		34,964			29,340			80,376		54,277
Short-term borrowings		—		—		—		474			1,108			—		4,320
Long-term borrowings		2,150		2,234		2,680		2,972			2,570			4,384		5,076
Total interest expense		43,536		41,224		39,263		38,410			33,018			84,760		63,673
Net interest income		65,342		62,807		64,282		61,474			59,039			128,149		115,760
Provision for credit losses		1,350		750		1,000		450			450			2,100		3,540
Net interest income after provision for credit losses		63,992		62,057		63,282		61,024			58,589			126,049		112,220
Noninterest income:
Wealth management fee income		6,674		6,485		6,308		6,057			5,870			13,159		11,382
Mortgage income, net		2,634		1,364		1,856		2,020			1,822			3,998		3,288
Service charges on deposit accounts		1,813		1,581		1,475		1,492			1,529			3,394		3,009
Card interchange income		3,458		3,098		3,306		3,321			3,331			6,556		6,364
BOLI income		1,225		1,347		1,161		1,090			1,073			2,572		2,273
Asset gains (losses), net		616		1,909		5,947		31			(318	)		2,525		(38,786	)
Deferred compensation plan asset market valuations		169		59		949		(457	)		499			228		1,445
LSR income, net		1,117		1,134		1,027		1,108			1,135			2,251		2,290
Other noninterest income		1,903		2,445		2,405		1,879			1,900			4,348		3,732
Total noninterest income		19,609		19,422		24,434		16,541			16,841			39,031		(5,003	)
Noninterest expense:
Personnel expense		26,285		26,510		26,937		23,944			23,900			52,795		48,228
Occupancy, equipment and office		8,681		8,944		9,567		9,027			8,845			17,625		17,628
Business development and marketing		2,040		2,142		1,854		1,869			1,946			4,182		4,067
Data processing		4,281		4,270		7,043		4,643			4,218			8,551		8,206
Intangibles amortization		1,762		1,833		1,842		1,986			2,083			3,595		4,244
FDIC assessments		990		1,033		950		1,500			1,009			2,023		1,549
Merger-related expense		—		—		—		—			26			—		189
Other noninterest expense		2,814		2,415		2,103		2,769			2,930			5,229		5,721
Total noninterest expense		46,853		47,147		50,296		45,738			44,957			94,000		89,832
Income before income tax expense		36,748		34,332		37,420		31,827			30,473			71,080		17,385
Income tax expense		7,475		6,542		6,759		14,669			7,878			14,017		3,688
Net income	$	29,273	$	27,790	$	30,661	$	17,158		$	22,595		$	57,063	$	13,697
Earnings per common share:
Basic	$	1.96	$	1.86	$	2.07	$	1.16		$	1.54		$	3.82	$	0.93
Diluted	$	1.92	$	1.82	$	2.02	$	1.14		$	1.51		$	3.74	$	0.91
Common shares outstanding:
Basic weighted average		14,937		14,907		14,823		14,740			14,711			14,922		14,703
Diluted weighted average		15,276		15,249		15,142		15,100			14,960			15,263		15,011

Nicolet Bankshares, Inc.
Consolidated Financial Summary (Unaudited)
	For the Three Months Ended															For the Six Months Ended
(In thousands, except share & per share data)	6/30/2024			3/31/2024			12/31/2023			9/30/2023			6/30/2023			6/30/2024			6/30/2023
Selected Average Balances:
Loans	$	6,496,732		$	6,398,838		$	6,263,971		$	6,230,336		$	6,237,757		$	6,447,785		$	6,219,868
Investment securities		881,190			884,775			897,437			962,607			1,068,144			882,982			1,287,123
Interest-earning assets		7,733,097			7,629,120			7,683,495			7,676,895			7,497,935			7,681,109			7,663,344
Cash and cash equivalents		374,176			364,375			558,473			513,250			203,883			369,276			166,015
Goodwill and other intangibles, net		392,171			393,961			395,158			397,052			399,080			393,066			400,140
Total assets		8,481,186			8,380,595			8,415,169			8,417,456			8,228,600			8,430,891			8,398,667
Deposits		7,183,777			7,112,971			7,189,650			7,156,577			6,941,037			7,148,373			7,000,320
Interest-bearing liabilities		5,658,642			5,509,882			5,358,445			5,385,292			5,212,285			5,584,262			5,301,202
Stockholders’ equity (common)		1,070,379			1,048,596			996,745			983,133			967,142			1,059,487			968,617
Selected Ratios: ^(1)
Book value per common share	$	73.03		$	71.24		$	69.76		$	66.03		$	66.42		$	73.03		$	66.42
Tangible book value per common share^(2)	$	46.84		$	44.91		$	43.28		$	39.18		$	39.37		$	46.84		$	39.37
Return on average assets		1.39	%		1.33	%		1.45	%		0.81	%		1.10	%		1.36	%		0.33	%
Return on average common equity		11.00			10.66			12.20			6.92			9.37			10.83			2.85
Return on average tangible common equity ^(2)		17.36			17.07			20.22			11.62			15.95			17.22			4.86
Average equity to average assets		12.62			12.51			11.84			11.68			11.75			12.57			11.53
Stockholders’ equity to assets		12.75			12.59			12.27			11.58			11.53			12.75			11.53
Tangible common equity to tangible assets^(2)		8.57			8.33			7.98			7.21			7.17			8.57			7.17
Net interest margin		3.35			3.26			3.30			3.16			3.14			3.31			3.02
Efficiency ratio		55.24			58.34			60.41			58.27			58.60			56.75			59.63
Effective tax rate		20.34			19.06			18.06			46.09			25.85			19.72			21.21
Selected Asset Quality Information:
Nonaccrual loans	$	27,838		$	26,677		$	26,625		$	29,507		$	25,278		$	27,838		$	25,278
Other real estate owned - closed branches		768			808			808			884			958			768			958
Other real estate owned		379			437			459			1,147			520			379			520
Nonperforming assets	$	28,985		$	27,922		$	27,892		$	31,538		$	26,756		$	28,985		$	26,756
Net loan charge-offs (recoveries)	$	283		$	13		$	550		$	101		$	51		$	296		$	218
Allowance for credit losses-loans to loans		1.00	%		1.01	%		1.00	%		1.01	%		1.01	%		1.00	%		1.01	%
Net charge-offs to average loans ^(1)		0.02			0.00			0.03			0.01			0.01			0.01			0.01
Nonperforming loans to total loans		0.43			0.42			0.42			0.47			0.41			0.43			0.41
Nonperforming assets to total assets		0.34			0.33			0.33			0.37			0.32			0.34			0.32
Stock Repurchase Information:
Common stock repurchased ($) ^(3)	$	—		$	—		$	—		$	—		$	1,519		$	—		$	1,519
Common stock repurchased (shares) ^(3)		—			—			—			—			26,853			—			26,853

(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)	6/30/2024		3/31/2024		12/31/2023		9/30/2023		6/30/2023
Period End Loan Composition
Commercial & industrial	$	1,358,152	$	1,307,490	$	1,284,009	$	1,237,789	$	1,318,567
Owner-occupied commercial real estate (“CRE”)		941,137		955,786		956,594		971,397		969,202
Agricultural		1,224,885		1,190,371		1,161,531		1,108,261		1,068,999
Commercial		3,524,174		3,453,647		3,402,134		3,317,447		3,356,768
CRE investment		1,198,020		1,188,722		1,142,251		1,130,938		1,108,692
Construction & land development		247,565		241,730		310,110		326,747		337,389
Commercial real estate		1,445,585		1,430,452		1,452,361		1,457,685		1,446,081
Commercial-based loans		4,969,759		4,884,099		4,854,495		4,775,132		4,802,849
Residential construction		90,904		84,370		75,726		76,289		108,095
Residential first mortgage		1,190,790		1,167,069		1,167,109		1,136,748		1,072,609
Residential junior mortgage		218,512		206,434		200,884		195,432		184,873
Residential real estate		1,500,206		1,457,873		1,443,719		1,408,469		1,365,577
Retail & other		59,169		55,645		55,728		55,656		54,350
Retail-based loans		1,559,375		1,513,518		1,499,447		1,464,125		1,419,927
Total loans	$	6,529,134	$	6,397,617	$	6,353,942	$	6,239,257	$	6,222,776
Period End Deposit Composition
Noninterest-bearing demand	$	1,764,806	$	1,665,229	$	1,958,709	$	2,020,074	$	2,059,939
Interest-bearing demand		1,093,621		1,121,030		1,055,520		955,746		1,030,919
Money market		1,963,559		2,027,559		1,891,287		1,933,227		1,835,523
Savings		762,529		765,084		768,401		789,045		821,803
Time		1,656,563		1,586,830		1,523,883		1,484,296		1,450,420
Total deposits	$	7,241,078	$	7,165,732	$	7,197,800	$	7,182,388	$	7,198,604
Brokered transaction accounts	$	250,109	$	265,818	$	166,861	$	146,517	$	173,107
Brokered time deposits		557,657		517,190		448,582		457,433		566,405
Total brokered deposits	$	807,766	$	783,008	$	615,443	$	603,950	$	739,512
Customer transaction accounts	$	5,334,406	$	5,313,085	$	5,507,056	$	5,551,575	$	5,575,077
Customer time deposits		1,098,906		1,069,639		1,075,301		1,026,863		884,015
Total customer deposits (core)	$	6,433,312	$	6,382,724	$	6,582,357	$	6,578,438	$	6,459,092

Nicolet Bankshares, Inc.
Net Interest Income and Net Interest Margin Analysis (Unaudited)
	For the Three Months Ended
	June 30, 2024						March 31, 2024							June 30, 2023
	Average				Average		Average					Average		Average				Average
(In thousands)	Balance		Interest		Rate		Balance		Interest			Rate		Balance		Interest		Rate
ASSETS
Total loans ^(1) (2)	$	6,496,732	$	98,086	5.99	%	$	6,398,838	$	93,744		5.81	%	$	6,237,757	$	84,132	5.35	%
Investment securities ^(2)		881,190		6,579	2.99	%		884,775		6,197		2.80	%		1,068,144		6,094	2.28	%
Other interest-earning assets		355,175		4,695	5.24	%		345,507		4,588		5.26	%		192,034		2,357	4.87	%
Total interest-earning assets		7,733,097	$	109,360	5.61	%		7,629,120	$	104,529		5.44	%		7,497,935	$	92,583	4.90	%
Other assets, net		748,089						751,475							730,665
Total assets	$	8,481,186					$	8,380,595						$	8,228,600
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing core deposits	$	4,665,195	$	31,713	2.73	%	$	4,664,670	$	31,256		2.69	%	$	4,278,502	$	22,728	2.13	%
Brokered deposits		831,100		9,673	4.68	%		680,124		7,734		4.57	%		640,643		6,612	4.14	%
Total interest-bearing deposits		5,496,295		41,386	3.03	%		5,344,794		38,990		2.93	%		4,919,145		29,340	2.39	%
Wholesale funding		162,347		2,150	5.24	%		165,088		2,234		5.35	%		293,140		3,678	4.96	%
Total interest-bearing liabilities		5,658,642	$	43,536	3.09	%		5,509,882	$	41,224		3.01	%		5,212,285	$	33,018	2.54	%
Noninterest-bearing demand deposits		1,687,482						1,768,177							2,021,892
Other liabilities		64,683						53,940							27,281
Stockholders' equity		1,070,379						1,048,596							967,142
Total liabilities and stockholders' equity	$	8,481,186					$	8,380,595						$	8,228,600
Net interest income and rate spread			$	65,824	2.52	%			$	63,305		2.43	%			$	59,565	2.36	%
Net interest margin					3.35	%						3.26	%					3.14	%
Loan purchase accounting accretion^(3)			$	1,527	0.08	%			$	1,527		0.08	%			$	1,636	0.10	%
Loan nonaccrual interest ^(4)			$	329	0.02	%			$	(241	)	(0.01	)%			$	341	0.02	%
	For the Six Months Ended
	June 30, 2024						June 30, 2023
	Average				Average		Average					Average
(In thousands)	Balance		Interest		Rate		Balance		Interest			Rate
ASSETS
Total loans ^(1) (2)	$	6,447,785	$	191,830	5.90	%	$	6,219,868	$	163,318		5.23	%
Investment securities ^(2)		882,982		12,776	2.89	%		1,287,123		13,340		2.07	%
Other interest-earning assets		350,342		9,283	5.25	%		156,353		3,893		4.96	%
Total interest-earning assets		7,681,109	$	213,889	5.52	%		7,663,344	$	180,551		4.69	%
Other assets, net		749,782						735,323
Total assets	$	8,430,891					$	8,398,667
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing core deposits	$	4,664,932	$	62,969	2.71	%	$	4,301,792	$	42,315		1.98	%
Brokered deposits		755,612		17,407	4.63	%		603,668		11,962		4.00	%
Total interest-bearing deposits		5,420,544		80,376	2.98	%		4,905,460		54,277		2.23	%
Wholesale funding		163,718		4,384	5.30	%		395,742		9,396		4.72	%
Total interest-bearing liabilities		5,584,262	$	84,760	3.05	%		5,301,202	$	63,673		2.42	%
Noninterest-bearing demand deposits		1,727,829						2,094,860
Other liabilities		59,313						33,988
Stockholders' equity		1,059,487						968,617
Total liabilities and stockholders' equity	$	8,430,891					$	8,398,667
Net interest income and rate spread			$	129,129	2.47	%			$	116,878		2.27	%
Net interest margin					3.31	%						3.02	%
Loan purchase accounting accretion^(3)			$	3,055	0.08	%			$	3,272		0.10	%

(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 interest above, and the related impact to net interest margin.
(4)	Loan nonaccrual interest included in Total loans interest above, and the related impact to net interest margin.

Nicolet Bankshares, Inc.
Reconciliation of Non-GAAP Financial Measures (Unaudited)
	For the Three Months Ended														For the Six Months Ended
(In thousands, except per share data)	6/30/2024			3/31/2024			12/31/2023			9/30/2023			6/30/2023		6/30/2024			6/30/2023
Adjusted net income reconciliation: ^(1)
Net income (GAAP)	$	29,273		$	27,790		$	30,661		$	17,158		$	22,595	$	57,063		$	13,697
Adjustments:
Provision expense ^(2)		—			—			—			—			—		—			2,340
Assets (gains) losses, net ^(3)		(616	)		(1,909	)		(5,947	)		(31	)		318		(2,525	)		38,786
Merger-related expense		—			—			—			—			26		—			189
Contract termination charge		—			—			2,689			—			—		—			—
Adjustments subtotal		(616	)		(1,909	)		(3,258	)		(31	)		344		(2,525	)		41,315
Tax on Adjustments ^(4)		(120	)		(372	)		(635	)		(6	)		86		(492	)		10,329
Tax - Wisconsin Tax Law Change ^(4)		—			—			—			6,151			—		—			—
Adjusted net income (Non-GAAP)	$	28,777		$	26,253		$	28,038		$	23,284		$	22,853	$	55,030		$	44,683
Diluted earnings per common share:
Diluted earnings per common share (GAAP)	$	1.92		$	1.82		$	2.02		$	1.14		$	1.51	$	3.74		$	0.91
Adjusted Diluted earnings per common share (Non-GAAP)	$	1.88		$	1.72		$	1.85		$	1.54		$	1.53	$	3.61		$	2.98
Tangible assets: ^(5)
Total assets	$	8,557,017		$	8,446,662		$	8,468,678		$	8,416,162		$	8,482,628
Goodwill and other intangibles, net		391,421			393,183			394,366			396,208			398,194
Tangible assets	$	8,165,596		$	8,053,479		$	8,074,312		$	8,019,954		$	8,084,434
Tangible common equity: ^(5)
Stockholders’ equity (common)	$	1,091,413		$	1,063,655		$	1,039,007		$	974,461		$	977,638
Goodwill and other intangibles, net		391,421			393,183			394,366			396,208			398,194
Tangible common equity	$	699,992		$	670,472		$	644,641		$	578,253		$	579,444
Tangible average common equity: ^(5)
Average stockholders’ equity (common)	$	1,070,379		$	1,048,596		$	996,745		$	983,133		$	967,142	$	1,059,487		$	968,617
Average goodwill and other intangibles, net		392,171			393,961			395,158			397,052			399,080		393,066			400,140
Average tangible common equity	$	678,208		$	654,635		$	601,587		$	586,081		$	568,062	$	666,421		$	568,477

Note: Numbers may not sum due to rounding.
(1)	The adjusted net income measure and related reconciliation provide information useful to investors in understanding the operating performance and trends of Nicolet and also to aid investors in the comparison of Nicolet’s financial performance to the financial performance of peer banks.
(2)	Provision expense for 2023 is attributable to the expected loss on a bank subordinated debt investment.
(3)	Includes the gains / (losses) on other assets and investments, as well as the impact of the March 2023 balance sheet repositioning which included the 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, with the net proceeds used to reduce FHLB borrowings and the remainder held in investable cash.
(4)	In July 2023, a new Wisconsin tax law change was signed which provided financial institutions with an exemption from state taxable income for interest, fees, and penalties earned on specific loans to existing Wisconsin-based business or agriculture purpose loans. The effective tax rate for periods prior to the July 1, 2023, effective date of this tax law change assumed an effective tax rate of 25%, and periods subsequent to the effective date assumed an effective tax rate of 19.5%. The adjusted net income reconciliation for first and second quarter 2023 is as originally reported, and has not been restated to reflect the $3 million excess tax expense of those quarters that was subsequently reversed in third quarter 2023 due to the Wisconsin tax law change. Thus, the adjusted net income reconciliation for the quarters of 2023 will not sum to the full year impact.
(5)	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.