18.01.2022 22:02:00
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NICOLET BANKSHARES, INC. ANNOUNCES 2021 EARNINGS
GREEN BAY, Wis., Jan. 18, 2022 /PRNewswire/ -- Nicolet Bankshares, Inc. (NASDAQ: NCBS) ("Nicolet") announced fourth quarter 2021 net income of $16 million and earnings per diluted common share of $1.25, compared to $8 million and $0.73 for third quarter 2021, and $18 million and $1.74 for fourth quarter 2020, respectively. Annualized quarterly return on average assets was 0.96%, 0.59% and 1.58%, for fourth quarter 2021, third quarter 2021 and fourth quarter 2020, respectively.
Net income for the year ended December 31, 2021 was $61 million and earnings per diluted common share was $5.44, compared to net income of $60 million and earnings per diluted common share of $5.70 for 2020. Annualized return on average assets was 1.15% and 1.41% for the years ended December 31, 2021 and 2020, respectively.
Non-core items, and the related tax effect of each, in net income included merger and integration related expenses, Day 2 credit provision expense required under the CECL model, branch optimization costs, contract negotiation expenses and gains on other investments. Non-core items negatively impacted earnings per diluted common share $0.58 for fourth quarter 2021, $0.76 for third quarter 2021, and $0.05 for fourth quarter 2020. For the full year, non-core items negatively impacted diluted earnings per common share $1.13 for 2021 and $0.24 for 2020.
"As our fourth quarter numbers show, our financial and operating performance was strong. The successful integration of County showed that our team is adept at turning promises made into promises kept," said Mike Daniels, President and CEO of Nicolet. "We stretched the team with two acquisitions (County and Mackinac) in a short time, and they responded well. The acquisitions brought us more than increased assets and earnings. They helped us add some good people and communities to the Nicolet family. We have great momentum heading into 2022, and our purpose to serve is resonating with our customers, employees, and the communities we serve. We will continue to purposefully serve our 3 Circles - customers, employees, and shareholders, as we move forward. This focus has served us well for over twenty years."
On December 3, 2021, Nicolet completed its merger with County Bancorp, Inc. ("County"), pursuant to the terms of the definitive merger agreement dated June 22, 2021, at which time County merged with and into Nicolet, to become the premier agriculture lender throughout Wisconsin. County shareholders received, at the election of each holder, either $37.18 in cash or 0.48 shares of Nicolet common stock, subject to proration procedures such that 1,237,000 shares of County common stock were exchanged for cash, and the remaining shares were exchanged for Nicolet common stock. As a result, the total purchase price was $223 million, comprised of common stock consideration of $176 million from the issuance of approximately 2.4 million shares of Nicolet common stock and the remainder in cash consideration. Upon consummation, County added total assets of $1.4 billion, loans of $1.0 billion, deposits of $1.0 billion, and preliminary goodwill of $70 million.
On September 3, 2021, Nicolet completed its merger with Mackinac Financial Corporation ("Mackinac"), pursuant to the terms of the definitive merger agreement dated April 12, 2021, at which time Mackinac merged with and into Nicolet, expanding Nicolet prominently into Northern Michigan and the Upper Peninsula of Michigan, and adding to Nicolet's presence in upper northeastern Wisconsin. Mackinac shareholders received fixed consideration of 0.22 shares of Nicolet common stock and $4.64 in cash for each share of Mackinac common stock owned, resulting in the issuance of 2.3 million shares of Nicolet common stock for stock consideration of $180 million and cash consideration of $49 million, or a total purchase price of $229 million. Upon consummation, Mackinac added total assets of $1.5 billion, loans of $0.9 billion, deposits of $1.4 billion, and preliminary goodwill of $84 million.
Evaluation of financial performance and balance sheet line items was impacted by the timing and size of Nicolet's acquisitions of County and Mackinac. Certain income statement results, average balances and related ratios for 2021 include partial contributions from County and Mackinac, each from the respective acquisition date.
"As for the full year numbers, the $61 million in GAAP earnings represents another record year for Nicolet. However, by adjusting the numbers for both the Mackinac and County deals, with $14 million of Day 2 CECL credit provisions required on better than projected asset quality metrics, $1 million related to our branch optimization strategy, and $6 million in integration and merger related expenses, the non-GAAP earnings of $73 million offers a better understanding of the economic value that we created in 2021," CEO Daniels added.
Executive Chairman of Nicolet Bob Atwell commented, "The excitement I observe as our bankers are out with our customers servicing the needs of our communities and all business lines working to fully integrate these last two acquisitions – that is the Nicolet Spirit and Culture fully engaged."
Balance Sheet Review
At December 31, 2021, period end assets were $7.7 billion, an increase of $1.3 billion (20%) from September 30, 2021, largely due to the acquisition of County, which added $1.4 billion of assets at acquisition. Total loans increased $1.1 billion from September 30, 2021, with County adding loans of $1.0 billion at acquisition. Total deposits of $6.5 billion at December 31, 2021, increased $1.0 billion (19%) from September 30, 2021, largely due to the acquisition of County. Total capital was $892 million at December 31, 2021, an increase of $163 million since September 30, 2021, mostly due to the acquisition of County. For the quarter ended December 31, 2021, Nicolet repurchased 345,166 shares at a total cost of $27.8 million, or an average per share cost of $80.49.
Compared to December 31, 2020, period end assets increased $3.1 billion (69%), largely due to the acquisitions of Mackinac and County. Total loans increased $1.8 billion and total deposits increased $2.6 billion from December 31, 2020, also largely due to the acquisitions of Mackinac and County. Total capital was $892 million at December 31, 2021, an increase of $353 million since December 31, 2020, mostly due to the stock issued in the Mackinac and County acquisitions. For the year ended December 31, 2021, Nicolet repurchased 793,064 shares at a total cost of $61.5 million, or an average per share cost of $77.50.
During 2020, we originated 2,725 PPP loans totaling $351 million, bearing a 1% contractual rate, and earned a $12.3 million fee. During 2021, under the latest round of the SBA's program, Nicolet originated 2,205 PPP loans totaling $160 million and earned a $9.3 million fee. Of the total fees, $5.7 million was accreted into interest in 2020 and $15.2 million was accreted in 2021. At December 31, 2021, the net carrying value of all remaining PPP loans was $25 million (1% of total loans), compared to $72 million (2% of total loans) at September 30, 2021, and $186 million (7% of total loans) at December 31, 2020, reflecting continued loan forgiveness.
Asset Quality
Nonperforming assets were $56 million at December 31, 2021 consisting of $44 million of nonaccrual loans (largely comprised of County's previously identified nonaccrual ag loans) and $12 million of other real estate owned (primarily closed bank branch properties yet to be sold), and representing 0.73% of total assets, compared to $21 million or 0.33% at September 30, 2021, and $13 million or 0.29% at December 31, 2020. Since the prior quarter, the allowance for credit losses-loans increased $11 million to $50 million, mostly due to the Day 2 allowance increase from the acquisition of County. Compared to December 31, 2020, the allowance for credit losses-loans increased $17 million, with $14 million attributable to the Day 2 allowance increase from the Mackinac and County acquisitions. At December 31, 2021, the allowance represented 1.07% of total loans.
Income Statement Review - Year
Net income for the year ended December 31, 2021 was $61 million, compared to net income of $60 million for the full year 2020.
Net interest income increased 22% to $158 million for the year ended December 31, 2021, the net of $22 million higher interest income and $6 million lower interest expense. The net interest margin for 2021 was 3.37%, down 1bp from 3.38% for 2020. The yield on interest-earning assets decreased 24bps (to 3.66%), due to the change in mix of interest-earnings assets (including a higher proportion of lower yielding cash assets) and continued PPP loan forgiveness, while the cost of funds decreased 32bps (to 0.43%) for full year 2021, attributable mainly to the change in mix of interest-bearing liabilities.
Average interest-earning assets of $4.7 billion for full year 2021 were up $870 million (23%) from full year 2020. The higher average loans and investment securities were largely due to the timing of the Mackinac and County acquisitions, while the higher balances in other interest-earning assets (up $225 million, mostly cash) were due to the increased liquidity of businesses and consumers, resulting in a shift in the mix of average interest-earning assets. Other interest-earning assets increased to 17% of total interest-earning assets for full year 2021 (compared to 15% for 2020), while the percentage of loans decreased to represent 67% of total interest-earning assets for 2021 (compared to 72% in the prior year) and investment securities increased to represent 16% of total interest-earning assets for 2021 (compared to 13% in 2020). Average interest-bearing liabilities of $3.1 billion increased $480 million from 2020, mostly due to higher average interest-bearing deposits (up $623 million), partly offset by lower wholesale funding (mainly the early repayment of PPPLF in fourth quarter 2020).
Noninterest income was $67 million for full year 2021, up $5 million (8%) over full year 2020. Excluding net asset gains (losses), noninterest income for 2021 was $63 million, down $1 million compared to 2020. Net mortgage income of $22 million remained strong in 2021, though slower than the record levels experienced in 2020. Trust services fee income and brokerage fee income combined increased $4 million (23%) over last year. Card interchange income grew $2 million (31%) to $9 million in 2021 due to higher volume and activity. Net asset gains for full year 2021 were $4 million (comprised primarily of market gains on equity investments), compared to net asset losses of $2 million for full year 2020 (mostly from $1 million market losses on equity investments and $1 million of net losses on branch other real estate owned write-downs).
Noninterest expense of $129 million for full year 2021 increased $29 million (28%) over full year 2020. Personnel expense increased $13 million (24%) year over year, reflecting higher salaries from the larger employee base and merit increases between the years, as well as increased incentive compensation and fringe benefits. Non-personnel expenses increased $15 million (35%) largely due to higher merger-related expense, increased occupancy, equipment and data processing costs for a larger operating base, as well as higher professional fees, director fees, and costs to carry closed bank branches.
Income Statement Review - Quarter
Net income for fourth quarter 2021 was $16 million, compared to net income of $8 million for third quarter 2021 and net income of $18 million for fourth quarter 2020.
Net interest income was $54 million for fourth quarter 2021, $18 million (52%) higher than third quarter 2021, the net of $19 million higher interest income and $1 million higher interest expense. Average interest-earning assets of $5.9 billion were up $1.2 billion from third quarter 2021, with higher average loans (up $876 million, mostly due to the timing of the Mackinac and County acquisitions) and higher average investment securities (up $658 million, largely due to the re-investment of approximately $0.5 billion excess cash liquidity into U.S. Treasury securities of varying yields and durations), partly offset by lower balances in other interest-earning assets (down $345 million, mostly cash from the re-investment noted above), resulting in a shift in the mix of average interest-earning assets. Other interest-earning assets decreased to 12% of total interest-earning assets for fourth quarter 2021 (compared to 22% for third quarter 2021), while the percentage of loans increased to represent 67% of total interest-earning assets for fourth quarter 2021 (compared to 65% in the prior quarter) and investment securities increased to represent 21% of total interest-earning assets for fourth quarter 2021 (compared to 13% in the prior quarter). Average interest-bearing liabilities of $4.0 billion increased $913 million from third quarter 2021, mostly due to higher average interest-bearing deposits (up $885 million, mostly due to the timing of the Mackinac and County acquisitions).
The net interest margin for fourth quarter 2021 was 3.57%, up 63bps from 2.94% for third quarter 2021. The yield on interest-earning assets increased 61bps (to 3.85%), due to the change in mix of interest-earnings assets (including a lower proportion of lower yielding cash assets), continued PPP loan forgiveness, and higher yield on all other loans (up 33bps from the prior quarter). The cost of funds decreased 6bps (to 0.40%) for fourth quarter 2021, attributable mainly to the higher amount of low cost deposits.
Noninterest income was $16 million for fourth quarter 2021, up $2 million (15%) compared to third quarter 2021. Excluding net asset gains (losses), noninterest income was up slightly (3%) from third quarter 2021, largely due to higher card interchange volumes and service charges on deposit accounts. Net mortgage income of $5 million remains strong, though continues to slow from the record levels experienced in 2020. Net asset gains were $0.5 million (comprised primarily of gains on asset sales), compared to net asset losses of $1 million in third quarter 2021 (comprised primarily of market losses on an equity investment).
Noninterest expense of $39 million increased $6 million (19%) from third quarter 2021. Personnel expense increased $5 million (27%) from third quarter 2021, reflecting the larger employee base. Non-personnel expenses increased $2 million (11%) largely due to higher occupancy and data processing expense of a larger operating base.
About Nicolet Bankshares, Inc.
Nicolet Bankshares, Inc. is the bank holding company of Nicolet National Bank, a growing, full-service, community bank providing services ranging from commercial, agricultural and consumer banking to wealth management and retirement plan services. Founded in Green Bay in 2000, Nicolet National Bank operates branches in Northeast and Central Wisconsin, Northern Michigan and the upper peninsula of Michigan. More information can be found at www.nicoletbank.com.
Use of Non-GAAP Financial Measures
This communication contains non-GAAP financial measures, such as non-GAAP net income, non-GAAP earnings per diluted common share, tangible book value per common share, return on average tangible common equity, and tangible common equity to tangible assets, where management believes such measures to be helpful to management, investors and others in understanding Nicolet's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measures, as well as the reconciliation of the non-GAAP measures to the GAAP financial measures, are provided. See "Reconciliation of Non-GAAP Financial Measures (Unaudited)" below. The non-GAAP net income measure and related reconciliation provide information useful to investors in understanding the operating performance and trends of Nicolet and also aid investors in comparing Nicolet's financial performance to the financial performance of peer banks. Management considers non-GAAP financial ratios to be critical metrics with which to analyze and evaluate financial condition and capital strengths. While non-GAAP financial measures are frequently used by stakeholders in the evaluation of a corporation, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP.
Forward Looking Statements "Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995
Certain statements contained in this communication, which are not statements of historical fact, constitute forward-looking statements within the meaning of the federal securities law. Such statements include, but are not limited to, statements about Nicolet's business plans, objectives, expectations and intentions, including without limitation Nicolet's momentum heading into 2022 and business focus moving forward, all of which is subject to numerous assumptions, risks and uncertainties. Words or phrases such as "anticipate," "believe," "aim," "can," "conclude," "continue," "could," "estimate," "expect," "foresee," "goal," "intend," "may," "might," "outlook," "possible," "plan," "predict," "project," "potential," "seek," "should," "target," "will," "will likely," "would," or the negative of these terms or other comparable terminology, as well as similar expressions, are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.
Forward-looking statements are not historical facts but instead express only management's beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management's control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements. In addition to factors disclosed in reports filed by Nicolet with the SEC, risks and uncertainties that may cause actual results or outcomes to differ materially from those anticipated include, but are not limited to: (1) the possibility that any of the anticipated benefits of Nicolet's 2021 acquisitions of Mackinac and/or County will not be realized or will not be realized within the expected time period; (2) diversion of management's attention from ongoing business operations and opportunities due to the mergers; (3) the challenges of integrating and retaining key employees of Nicolet, including those who joined Nicolet from Mackinac and County; (4) the effect of the mergers on Nicolet's and/or Mackinac's or County's historic customer and employee relationships and operating results; (5) the magnitude and duration of the COVID pandemic and its impact on the global economy and financial market conditions and Nicolet's business, results of operations and financial condition; (6) changes in consumer demand for financial services; and (7) general competitive, economic, political and market conditions and fluctuations. Please refer to Nicolet's Annual Report on Form 10-K for the year ended December 31, 2020, as well as its other filings with the SEC, for a more detailed discussion of risks, uncertainties and factors that could cause actual results to differ from those discussed in the forward-looking statements.
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 that could affect Nicolet in substantial and unpredictable ways.
All forward-looking statements included in this communication are made as of the date hereof and are based on information available to management at that time. Except as required by law, Nicolet does not assume any obligation to update any forward-looking statement to reflect events or circumstances that occur after the date the forward-looking statements were made.
Nicolet Bankshares, Inc. | ||||||||||
Consolidated Balance Sheets (Unaudited) | ||||||||||
(In thousands, except share data) | 12/31/2021 | 09/30/2021 | 06/30/2021 | 03/31/2021 | 12/31/2020 | |||||
Assets: | ||||||||||
Cash and due from banks | $ 209,349 | $ 217,608 | $ 77,634 | $ 61,295 | $ 88,460 | |||||
Interest-earning deposits | 385,943 | 1,132,997 | 714,772 | 674,559 | 714,399 | |||||
Cash and cash equivalents | 595,292 | 1,350,605 | 792,406 | 735,854 | 802,859 | |||||
Certificates of deposit in other banks | 21,920 | 24,079 | 23,387 | 27,296 | 29,521 | |||||
Securities available for sale, at fair value | 921,661 | 715,942 | 562,028 | 558,229 | 539,337 | |||||
Securities held to maturity, at amortized cost | 651,803 | 49,063 | — | — | — | |||||
Other investments | 44,008 | 38,602 | 33,440 | 28,248 | 27,619 | |||||
Loans held for sale | 6,447 | 16,784 | 11,235 | 16,883 | 21,450 | |||||
Other assets held for sale | 199,833 | 177,627 | — | — | — | |||||
Loans | 4,621,836 | 3,533,198 | 2,820,331 | 2,846,351 | 2,789,101 | |||||
Allowance for credit losses - loans | (49,672) | (38,399) | (32,561) | (32,626) | (32,173) | |||||
Loans, net | 4,572,164 | 3,494,799 | 2,787,770 | 2,813,725 | 2,756,928 | |||||
Premises and equipment, net | 94,566 | 83,513 | 61,618 | 59,413 | 59,944 | |||||
Bank owned life insurance ("BOLI") | 134,476 | 100,690 | 84,347 | 83,788 | 83,262 | |||||
Goodwill and other intangibles, net | 339,492 | 269,954 | 173,711 | 174,501 | 175,353 | |||||
Accrued interest receivable and other assets | 113,375 | 86,162 | 57,405 | 45,867 | 55,516 | |||||
Total assets | $ 7,695,037 | $ 6,407,820 | $ 4,587,347 | $ 4,543,804 | $ 4,551,789 | |||||
Liabilities and Stockholders' Equity | ||||||||||
Liabilities: | ||||||||||
Noninterest-bearing demand deposits | $ 1,975,705 | $ 1,852,119 | $ 1,324,994 | $ 1,216,477 | $ 1,212,787 | |||||
Interest-bearing deposits | 4,490,211 | 3,576,655 | 2,614,028 | 2,684,117 | 2,697,612 | |||||
Total deposits | 6,465,916 | 5,428,774 | 3,939,022 | 3,900,594 | 3,910,399 | |||||
Short-term borrowings | — | — | — | — | — | |||||
Long-term borrowings | 216,915 | 144,233 | 45,108 | 43,988 | 53,869 | |||||
Other liabilities held for sale | 51,586 | 47,496 | — | — | — | |||||
Accrued interest payable and other liabilities | 68,729 | 58,039 | 43,822 | 49,176 | 48,332 | |||||
Total liabilities | 6,803,146 | 5,678,542 | 4,027,952 | 3,993,758 | 4,012,600 | |||||
Stockholders' Equity: | ||||||||||
Common stock | 140 | 120 | 98 | 100 | 100 | |||||
Additional paid-in capital | 575,045 | 425,367 | 261,096 | 271,388 | 273,390 | |||||
Retained earnings | 313,604 | 297,299 | 289,475 | 271,191 | 252,952 | |||||
Accumulated other comprehensive income (loss) | 3,102 | 6,492 | 8,726 | 7,367 | 12,747 | |||||
Total Nicolet stockholders' equity | 891,891 | 729,278 | 559,395 | 550,046 | 539,189 | |||||
Total liabilities and stockholders' equity | $ 7,695,037 | $ 6,407,820 | $ 4,587,347 | $ 4,543,804 | $ 4,551,789 | |||||
Common shares outstanding | 13,994,079 | 11,952,438 | 9,843,141 | 9,987,897 | 10,011,342 |
Nicolet Bankshares, Inc. | ||||||||||||||
Consolidated Statements of Income (Unaudited) | ||||||||||||||
At or for the Three Months Ended | At or for the Years Ended | |||||||||||||
(In thousands, except per share data) | 12/31/2021 | 09/30/2021 | 06/30/2021 | 03/31/2021 | 12/31/2020 | 12/31/2021 | 12/31/2020 | |||||||
Interest income: | ||||||||||||||
Loans, including loan fees | $ 52,292 | $ 35,294 | $ 35,111 | $ 33,862 | $ 34,781 | $ 156,559 | $ 136,372 | |||||||
Taxable investment securities | 3,999 | 2,061 | 2,060 | 1,814 | 2,003 | 9,934 | 8,118 | |||||||
Tax-exempt investment securities | 575 | 517 | 520 | 545 | 559 | 2,157 | 2,101 | |||||||
Other interest income | 769 | 869 | 616 | 655 | 694 | 2,909 | 2,611 | |||||||
Total interest income | 57,635 | 38,741 | 38,307 | 36,876 | 38,037 | 171,559 | 149,202 | |||||||
Interest expense: | ||||||||||||||
Deposits | 2,649 | 2,444 | 2,433 | 2,922 | 3,445 | 10,448 | 16,641 | |||||||
Short-term borrowings | 1 | — | — | — | 1 | 1 | 66 | |||||||
Long-term borrowings | 1,426 | 1,113 | 303 | 313 | 573 | 3,155 | 3,157 | |||||||
Total interest expense | 4,076 | 3,557 | 2,736 | 3,235 | 4,019 | 13,604 | 19,864 | |||||||
Net interest income | 53,559 | 35,184 | 35,571 | 33,641 | 34,018 | 157,955 | 129,338 | |||||||
Provision for credit losses | 8,400 | 6,000 | — | 500 | 1,300 | 14,900 | 10,300 | |||||||
Net interest income after provision for credit losses | 45,159 | 29,184 | 35,571 | 33,141 | 32,718 | 143,055 | 119,038 | |||||||
Noninterest income: | ||||||||||||||
Trust services fee income | 2,050 | 2,043 | 1,906 | 1,775 | 1,746 | 7,774 | 6,463 | |||||||
Brokerage fee income | 3,205 | 3,154 | 2,991 | 2,793 | 2,673 | 12,143 | 9,753 | |||||||
Mortgage income, net | 4,518 | 4,808 | 5,599 | 7,230 | 7,842 | 22,155 | 29,807 | |||||||
Service charges on deposit accounts | 1,482 | 1,314 | 1,136 | 1,091 | 1,133 | 5,023 | 4,208 | |||||||
Card interchange income | 2,671 | 2,299 | 2,266 | 1,927 | 1,922 | 9,163 | 6,998 | |||||||
BOLI income | 722 | 572 | 559 | 527 | 936 | 2,380 | 2,710 | |||||||
Asset gains (losses), net | 465 | (1,187) | 4,192 | 711 | (620) | 4,181 | (1,805) | |||||||
Other noninterest income | 951 | 993 | 1,529 | 1,072 | 1,247 | 4,545 | 4,492 | |||||||
Total noninterest income | 16,064 | 13,996 | 20,178 | 17,126 | 16,879 | 67,364 | 62,626 | |||||||
Noninterest expense: | ||||||||||||||
Personnel expense | 21,491 | 16,927 | 17,084 | 15,116 | 15,244 | 70,618 | 57,121 | |||||||
Occupancy, equipment and office | 7,119 | 5,749 | 4,053 | 4,137 | 4,102 | 21,058 | 16,718 | |||||||
Business development and marketing | 1,550 | 1,654 | 1,210 | 989 | 713 | 5,403 | 5,396 | |||||||
Data processing | 3,582 | 2,939 | 2,811 | 2,658 | 2,921 | 11,990 | 10,495 | |||||||
Intangibles amortization | 1,094 | 758 | 790 | 852 | 860 | 3,494 | 3,567 | |||||||
FDIC assessments | 480 | 480 | 480 | 595 | 360 | 2,035 | 707 | |||||||
Merger-related expense | 2,202 | 2,793 | 656 | — | 167 | 5,651 | 1,020 | |||||||
Other noninterest expense | 1,890 | 1,761 | 3,663 | 1,734 | 1,000 | 9,048 | 5,695 | |||||||
Total noninterest expense | 39,408 | 33,061 | 30,747 | 26,081 | 25,367 | 129,297 | 100,719 | |||||||
Income before income tax expense | 21,815 | 10,119 | 25,002 | 24,186 | 24,230 | 81,122 | 80,945 | |||||||
Income tax expense | 5,510 | 2,295 | 6,718 | 5,947 | 6,145 | 20,470 | 20,476 | |||||||
Net income | 16,305 | 7,824 | 18,284 | 18,239 | 18,085 | 60,652 | 60,469 | |||||||
Net income attributable to noncontrolling interest | — | — | — | — | 98 | — | 347 | |||||||
Net income attributable to Nicolet | $ 16,305 | $ 7,824 | $ 18,284 | $ 18,239 | $ 17,987 | $ 60,652 | $ 60,122 | |||||||
Earnings per common share: | ||||||||||||||
Basic | $ 1.29 | $ 0.75 | $ 1.85 | $ 1.82 | $ 1.79 | $ 5.65 | $ 5.82 | |||||||
Diluted | $ 1.25 | $ 0.73 | $ 1.77 | $ 1.75 | $ 1.74 | $ 5.44 | $ 5.70 | |||||||
Common shares outstanding: | ||||||||||||||
Basic weighted average | 12,626 | 10,392 | 9,902 | 9,998 | 10,074 | 10,736 | 10,337 | |||||||
Diluted weighted average | 13,049 | 10,776 | 10,326 | 10,403 | 10,350 | 11,145 | 10,541 |
Nicolet Bankshares, Inc. | ||||||||||||||
Consolidated Financial Summary (Unaudited) | ||||||||||||||
At or for the Three Months Ended | At or for the Years Ended | |||||||||||||
(In thousands, except share & per share data) | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | 12/31/2021 | 12/31/2020 | |||||||
Selected Average Balances: | ||||||||||||||
Loans | $ 3,952,330 | $ 3,076,422 | $ 2,869,105 | $ 2,825,664 | $ 2,868,827 | $ 3,183,681 | $ 2,787,587 | |||||||
Investment securities | 1,269,562 | 611,870 | 537,632 | 528,342 | 520,867 | 738,540 | 490,209 | |||||||
Interest-earning assets | 5,923,581 | 4,734,768 | 4,109,394 | 4,089,603 | 4,091,460 | 4,719,417 | 3,849,812 | |||||||
Cash and cash equivalents | 839,607 | 1,100,153 | 716,873 | 750,075 | 714,031 | 852,603 | 584,159 | |||||||
Goodwill and other intangibles, net | 294,051 | 201,748 | 174,026 | 174,825 | 175,678 | 211,463 | 168,802 | |||||||
Total assets | 6,772,363 | 5,246,193 | 4,527,839 | 4,514,927 | 4,515,226 | 5,271,463 | 4,255,207 | |||||||
Deposits | 5,754,778 | 4,448,468 | 3,897,797 | 3,875,205 | 3,793,430 | 4,499,087 | 3,439,748 | |||||||
Interest-bearing liabilities | 4,006,307 | 3,093,031 | 2,684,871 | 2,764,232 | 2,744,578 | 3,140,393 | 2,660,508 | |||||||
Stockholders' equity (common) | 784,666 | 608,946 | 550,974 | 544,541 | 537,920 | 622,903 | 527,428 | |||||||
Selected Ratios: (1) | ||||||||||||||
Book value per common share | $ 63.73 | $ 61.01 | $ 56.83 | $ 55.07 | $ 53.86 | $ 63.73 | $ 53.86 | |||||||
Tangible book value per common share (2) | $ 39.47 | $ 38.43 | $ 39.18 | $ 37.60 | $ 36.34 | $ 39.47 | $ 36.34 | |||||||
Return on average assets | 0.96 % | 0.59 % | 1.62 % | 1.64 % | 1.58 % | 1.15 % | 1.41 % | |||||||
Return on average common equity | 8.24 | 5.10 | 13.31 | 13.58 | 13.30 | 9.74 | 11.40 | |||||||
Return on average tangible common equity (2) | 13.19 | 7.62 | 19.46 | 20.01 | 19.75 | 14.74 | 16.76 | |||||||
Average equity to average assets | 11.59 | 11.61 | 12.17 | 12.06 | 11.91 | 11.82 | 12.39 | |||||||
Stockholders' equity to assets | 11.59 | 11.38 | 12.19 | 12.11 | 11.85 | 11.59 | 11.85 | |||||||
Tangible common equity to tangible assets (2) | 7.51 | 7.48 | 8.74 | 8.60 | 8.31 | 7.51 | 8.31 | |||||||
Net interest margin | 3.57 | 2.94 | 3.45 | 3.31 | 3.29 | 3.37 | 3.38 | |||||||
Efficiency ratio | 56.73 | 65.32 | 59.37 | 51.84 | 48.99 | 58.20 | 51.72 | |||||||
Effective tax rate | 25.26 | 22.68 | 26.87 | 24.59 | 25.36 | 25.23 | 25.30 | |||||||
Selected Asset Quality Information: | ||||||||||||||
Nonaccrual loans | $ 44,154 | $ 16,715 | $ 6,932 | $ 8,965 | $ 9,455 | $ 44,154 | $ 9,455 | |||||||
Other real estate owned - closed branches | 10,307 | 2,895 | 2,895 | 3,495 | 3,608 | 10,307 | 3,608 | |||||||
Other real estate owned | 1,648 | 1,574 | — | 302 | — | 1,648 | — | |||||||
Nonperforming assets | $ 56,109 | $ 21,184 | $ 9,827 | $ 12,762 | $ 13,063 | $ 56,109 | $ 13,063 | |||||||
Net loan charge-offs (recoveries) | $ (10) | $ 58 | $ 65 | $ 47 | $ 515 | $ 160 | $ 1,384 | |||||||
Allowance for credit losses-loans to loans | 1.07 % | 1.09 % | 1.15 % | 1.15 % | 1.15 % | 1.07 % | 1.15 % | |||||||
Net loan charge-offs to average loans (1) | 0.00 | 0.01 | 0.01 | 0.01 | 0.07 | 0.01 | 0.05 | |||||||
Nonperforming loans to total loans | 0.96 | 0.47 | 0.25 | 0.31 | 0.34 | 0.96 | 0.34 | |||||||
Nonperforming assets to total assets | 0.73 | 0.33 | 0.21 | 0.28 | 0.29 | 0.73 | 0.29 | |||||||
Stock Repurchase Information: | ||||||||||||||
Common stock repurchased (dollars) (3) | $ 27,784 | $ 17,125 | $ 12,453 | $ 4,102 | $ 12,909 | $ 61,464 | $ 40,544 | |||||||
Common stock repurchased (full shares) (3) | 345,166 | 233,594 | 157,418 | 56,886 | 205,001 | 793,064 | 646,748 |
(1) | Income statement-related ratios for partial-year periods are annualized. |
(2) | See Reconcilation 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. | |||||||||||||||||||
Net Interest Income and Net Interest Margin Analysis (Unaudited) | |||||||||||||||||||
At or for the Three Months Ended | |||||||||||||||||||
December 31, 2021 | September 30, 2021 | December 31, 2020 | |||||||||||||||||
Average | Average | Average | Average | Average | Average | ||||||||||||||
(In thousands) | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||
ASSETS | |||||||||||||||||||
PPP loans | $ 46,694 | $ 5,549 | 46.50 % | $ 109,318 | $ 2,310 | 8.27 % | $ 282,736 | $ 3,799 | 5.26 % | ||||||||||
Total loans ex PPP | 3,905,636 | 46,770 | 4.70 % | 2,967,104 | 33,001 | 4.37 % | 2,586,091 | 31,005 | 4.71 % | ||||||||||
Total loans (1) (2) | 3,952,330 | 52,319 | 5.20 % | 3,076,422 | 35,311 | 4.51 % | 2,868,827 | 34,804 | 4.76 % | ||||||||||
Investment securities (2) | 1,269,562 | 4,860 | 1.53 % | 611,870 | 2,805 | 1.83 % | 520,867 | 2,799 | 2.15 % | ||||||||||
Other interest-earning assets | 701,689 | 769 | 0.43 % | 1,046,476 | 869 | 0.33 % | 701,766 | 694 | 0.39 % | ||||||||||
Total interest-earning assets | 5,923,581 | $ 57,948 | 3.85 % | 4,734,768 | $ 38,985 | 3.24 % | 4,091,460 | $ 38,297 | 3.68 % | ||||||||||
Other assets, net | 848,782 | 511,425 | 423,766 | ||||||||||||||||
Total assets | $ 6,772,363 | $ 5,246,193 | $ 4,515,226 | ||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||
Interest-bearing core deposits | $ 3,456,699 | $ 1,743 | 0.20 % | $ 2,665,252 | $ 1,550 | 0.23 % | $ 2,285,858 | $ 2,269 | 0.39 % | ||||||||||
Brokered deposits | 377,390 | 906 | 0.95 % | 284,164 | 894 | 1.25 % | 320,237 | 1,176 | 1.46 % | ||||||||||
Total interest-bearing deposits | 3,834,089 | 2,649 | 0.27 % | 2,949,416 | 2,444 | 0.33 % | 2,606,095 | 3,445 | 0.53 % | ||||||||||
PPPLF | — | — | 0.00 % | — | — | 0.00 % | 72,582 | 64 | 0.35 % | ||||||||||
Other interest-bearing liabilities | 172,218 | 1,427 | 3.30 % | 143,615 | 1,113 | 3.08 % | 65,901 | 510 | 3.04 % | ||||||||||
Total interest-bearing liabilities | 4,006,307 | $ 4,076 | 0.40 % | 3,093,031 | $ 3,557 | 0.46 % | 2,744,578 | $ 4,019 | 0.58 % | ||||||||||
Noninterest-bearing demand deposits | 1,920,689 | 1,499,052 | 1,187,335 | ||||||||||||||||
Other liabilities | 60,701 | 45,164 | 45,393 | ||||||||||||||||
Stockholders' equity | 784,666 | 608,946 | 537,920 | ||||||||||||||||
Total liabilities and stockholders' equity | $ 6,772,363 | $ 5,246,193 | $ 4,515,226 | ||||||||||||||||
Net interest income and rate spread | $ 53,872 | 3.45 % | $ 35,428 | 2.78 % | $ 34,278 | 3.10 % | |||||||||||||
Net interest margin | 3.57 % | 2.94 % | 3.29 % | ||||||||||||||||
At or for the Years Ended | |||||||||||||||||||
December 31, 2021 | December 31, 2020 | ||||||||||||||||||
Average | Average | Average | Average | ||||||||||||||||
(In thousands) | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||
ASSETS | |||||||||||||||||||
PPP loans | $ 141,510 | $ 16,672 | 11.78 % | $ 220,544 | $ 8,062 | 3.66 % | |||||||||||||
Total loans ex PPP | 3,042,171 | 139,972 | 4.60 % | 2,567,043 | 128,419 | 5.00 % | |||||||||||||
Total loans (1) (2) | 3,183,681 | 156,644 | 4.92 % | 2,787,587 | 136,481 | 4.90 % | |||||||||||||
Investment securities (2) | 738,540 | 13,047 | 1.77 % | 490,209 | 11,079 | 2.26 % | |||||||||||||
Other interest-earning assets | 797,196 | 2,909 | 0.36 % | 572,016 | 2,611 | 0.46 % | |||||||||||||
Total interest-earning assets | 4,719,417 | $ 172,600 | 3.66 % | 3,849,812 | $ 150,171 | 3.90 % | |||||||||||||
Other assets, net | 552,046 | 405,395 | |||||||||||||||||
Total assets | $ 5,271,463 | $ 4,255,207 | |||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||
Interest-bearing core deposits | $ 2,729,146 | $ 6,657 | 0.24 % | $ 2,124,634 | $ 12,163 | 0.57 % | |||||||||||||
Brokered deposits | 308,091 | 3,791 | 1.23 % | 289,489 | 4,478 | 1.55 % | |||||||||||||
Total interest-bearing deposits | 3,037,237 | 10,448 | 0.34 % | 2,414,123 | 16,641 | 0.69 % | |||||||||||||
PPPLF | — | — | 0.00 % | 161,634 | 571 | 0.35 % | |||||||||||||
Other interest-bearing liabilities | 103,156 | 3,156 | 3.06 % | 84,751 | 2,652 | 3.13 % | |||||||||||||
Total interest-bearing liabilities | 3,140,393 | $ 13,604 | 0.43 % | 2,660,508 | $ 19,864 | 0.75 % | |||||||||||||
Noninterest-bearing demand deposits | 1,461,850 | 1,025,625 | |||||||||||||||||
Other liabilities | 46,317 | 41,646 | |||||||||||||||||
Stockholders' equity | 622,903 | 527,428 | |||||||||||||||||
Total liabilities and stockholders' equity | $ 5,271,463 | $ 4,255,207 | |||||||||||||||||
Net interest income and rate spread | $ 158,996 | 3.23 % | $ 130,307 | 3.15 % | |||||||||||||||
Net interest margin | 3.37 % | 3.38 % |
(1) | Nonaccrual loans and loans held for sale are included in the daily average loan balances outstanding. |
(2) | The yield on tax-exempt loans and tax-exempt investment securities is computed on a tax-equivalent basis using a federal tax rate of 21%, and adjusted for the disallowance of interest expense. |
Nicolet Bankshares, Inc. | ||||||||||||||
Reconciliation of Non-GAAP Financial Measures (Unaudited) | ||||||||||||||
At or for the Three Months Ended | At or for the Years Ended | |||||||||||||
(In thousands, except per share data) | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | 12/31/2021 | 12/31/2020 | |||||||
Adjusted net income reconciliation: (1) | ||||||||||||||
Net income attributable to Nicolet (GAAP) | $ 16,305 | $ 7,824 | $ 18,284 | $ 18,239 | $ 17,987 | $ 60,652 | $ 60,122 | |||||||
Adjustments: | ||||||||||||||
Provision expense related to merger | 8,400 | 6,000 | — | — | — | 14,400 | — | |||||||
Assets (gains) losses, net | (465) | 1,187 | (4,192) | (711) | 620 | (4,181) | 1,805 | |||||||
Merger-related expense | 2,202 | 2,793 | 656 | — | 167 | 5,651 | 1,020 | |||||||
Branch closure expense | — | 944 | — | — | — | 944 | 500 | |||||||
Adjustments subtotal | 10,137 | 10,924 | (3,536) | (711) | 787 | 16,814 | 3,325 | |||||||
Tax on Adjustments (25%) | 2,534 | 2,731 | (884) | (178) | 197 | 4,204 | 831 | |||||||
Adjustments, net of tax | 7,603 | 8,193 | (2,652) | (533) | 590 | 12,611 | 2,494 | |||||||
Adjusted net income attributable to Nicolet (Non-GAAP) | $ 23,908 | $ 16,017 | $ 15,632 | $ 17,706 | $ 18,577 | $ 73,263 | $ 62,616 | |||||||
Common shares outstanding: | ||||||||||||||
Weighted average diluted common shares | 13,049 | 10,776 | 10,326 | 10,403 | 10,350 | 11,145 | 10,541 | |||||||
Diluted earnings per common share: | ||||||||||||||
Diluted earnings per common share (GAAP) | $ 1.25 | $ 0.73 | $ 1.77 | $ 1.75 | $ 1.74 | $ 5.44 | $ 5.70 | |||||||
Adjusted Diluted earnings per common share (Non-GAAP) | $ 1.83 | $ 1.49 | $ 1.51 | $ 1.70 | $ 1.79 | $ 6.57 | $ 5.94 | |||||||
Tangible assets: (2) | ||||||||||||||
Total assets | $ 7,695,037 | $ 6,407,820 | $ 4,587,347 | $ 4,543,804 | $ 4,551,789 | |||||||||
Goodwill and other intangibles, net | 339,492 | 269,954 | 173,711 | 174,501 | 175,353 | |||||||||
Tangible assets | $ 7,355,545 | $ 6,137,866 | $ 4,413,636 | $ 4,369,303 | $ 4,376,436 | |||||||||
Tangible common equity: (2) | ||||||||||||||
Stockholders' equity | $ 891,891 | $ 729,278 | $ 559,395 | $ 550,046 | $ 539,189 | |||||||||
Goodwill and other intangibles, net | 339,492 | 269,954 | 173,711 | 174,501 | 175,353 | |||||||||
Tangible common equity | $ 552,399 | $ 459,324 | $ 385,684 | $ 375,545 | $ 363,836 | |||||||||
Tangible average common equity: (2) | ||||||||||||||
Average stockholders' equity (common) | $ 784,666 | $ 608,946 | $ 550,974 | $ 544,541 | $ 537,920 | $ 622,903 | $ 527,428 | |||||||
Average goodwill and other intangibles, net | 294,051 | 201,748 | 174,026 | 174,825 | 175,678 | 211,463 | 168,802 | |||||||
Average tangible common equity | $ 490,615 | $ 407,198 | $ 376,948 | $ 369,716 | $ 362,242 | $ 411,440 | $ 358,626 |
(1) | The adjusted net income measure and related reconciliation provide information useful to investors in understanding the operating performance and trends of Nicolet and also to aid investors in the comparison of Nicolet's financial performance to the financial performance of peer banks. |
(2) | The ratios of tangible book value per common share, return on average tangible common equity, and tangible common equity to tangible assets exclude goodwill and other intangibles, net. These financial ratios have been included as they are considered to be critical metrics with which to analyze and evaluate financial condition and capital strength. |
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SOURCE Nicolet Bankshares, Inc.
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