Summary of Nicolet Bankshares Inc. and MidWestOne Financial Group Inc. Merger Conference Call Company and Industry Overview - **Companies Involved**: Nicolet Bankshares Inc. and MidWestOne Financial Group Inc. - **Industry**: Community Banking - **Transaction Announcement Date**: October 24, 2025 Key Points and Arguments Merger Details - Nicolet Bankshares announced its agreement to acquire MidWestOne Financial Group, enhancing its asset base by adding over $3.4 billion, bringing total assets to approximately $9.6 billion [2][3] - The merger is structured as an all-stock transaction where MidWestOne shareholders will receive 0.3175 shares of Nicolet for each share of MidWestOne, valuing the transaction at approximately $864 million [16][17] Financial Metrics - The implied per-share purchase price for MidWestOne is $41.37, which is about 166% of its tangible book value and 11.5 times the consensus estimated earnings per share for 2026 [16][17] - Expected fully phased-in EPS accretion of approximately 35% to 40% for Nicolet shareholders, with minimal dilution to tangible book value [10][11] - Projected pre-tax cost savings of approximately $38 million, or roughly 25% of MidWestOne's core non-interest expenses, with 50% expected to be realized in 2026 [18] Strategic Rationale - The merger aims to create one of the largest and most profitable community banks in the upper Midwest, leveraging complementary balance sheets and diversified loan portfolios [9][10] - Nicolet's management emphasized the importance of cultural alignment and shared values between the two organizations, which are both focused on relationship banking [22][32] - The merger is seen as a strategic move to enhance market presence in key areas such as the Twin Cities and Denver, where both banks can leverage their strengths [12][13] Market Position and Growth Potential - The combined entity will have a strong deposit share position in markets like Iowa City, Dubuque, and Muscatine, which are similar to Nicolet's existing markets [12] - The merger is expected to facilitate organic growth while also positioning the company for future M&A opportunities [10][11] Integration Plans - Nicolet plans a phased integration approach, targeting a legal closing in the first half of 2026, followed by a systems conversion in summer or early fall [15] - The integration strategy will focus on maintaining cultural integrity and ensuring seamless retention of customers and employees [58] Challenges and Considerations - Both banks faced challenges related to unrealized losses in their investment portfolios, which impacted profitability and stock valuation [4][9] - The management acknowledged the potential negative impact of crossing the $10 billion asset threshold on interchange income, estimated at $8.5 million starting in 2027 [19][20] Other Important Insights - Nicolet's management has a strong focus on maintaining top quartile profitability metrics and shareholder value, emphasizing that growth should not come at the expense of quality [8][68] - The merger is expected to enhance institutional ownership and liquidity for shareholders, with Nicolet shareholders projected to own approximately 70% of the combined company [18] This summary encapsulates the key points discussed during the conference call regarding the merger between Nicolet Bankshares Inc. and MidWestOne Financial Group Inc., highlighting the strategic rationale, financial metrics, and integration plans.

Transaction Overview - Nicolet will acquire MidWestOne in a 100% stock transaction with a fixed exchange ratio of 03175x Nicolet shares for each MidWestOne share[13] - The aggregate consideration is valued at $8641 million, or $4137 per MidWestOne share, representing a 452% market premium[13] - Pro forma ownership will be approximately 691% for Nicolet and 309% for MidWestOne[13] Financial Impact - The transaction is expected to be ~37% accretive to Nicolet's fully-phased 2026E GAAP EPS[9] - Nicolet anticipates a fully-phased 2026E ROATCE of ~23%[9] - The pro forma CET1 ratio at closing is projected to be 106%, requiring no additional capital to support the transaction[9] - The transaction is expected to result in approximately 1% tangible book value per share dilution, with a very short earnback period of ~01 year[9, 25] Strategic Rationale - The acquisition will create a ~$15 billion+ asset bank, enhancing scale and positioning the company for significant growth across the Upper Midwest region[9] - The combined company is expected to enhance existing top quartile/decile financial operating metrics versus peers[9] - Nicolet will immediately solidify its position as a top 5 bank by deposit market share across the state of Iowa and accelerates growth trajectory in Minneapolis-St Paul MSA by adding $1 billion+ of deposits to existing network[9] - The acquisition adds ~$34 billion+ of wealth management AUA across new markets, resulting in $9 billion+ AUA for the combined company[9] Pro Forma Financials - At closing, the pro forma company is expected to have $157 billion in total assets, $113 billion in total loans, $133 billion in total deposits, and $28 billion in market capitalization[12]

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential trading opportunities before the market opens [1] Premarket Gainers - Qualigen Therapeutics, Inc. (QLGN) increased by 69% to $6.00 - Inhibrx Biosciences, Inc. (INBX) rose by 62% to $46.04 - MidWestOne Financial Group, Inc. (MOFG) gained 33% to $37.87 - Neuphoria Therapeutics Inc. (NEUP) up by 31% to $5.32 - Nextracker Inc. (NXT) increased by 13% to $102.44 - Avalon Holdings Corporation (AWX) rose by 11% to $2.98 - Beyond Meat, Inc. (BYND) up by 9% to $3.12 - SLM Corporation (SLM) increased by 8% to $29.00 - Reborn Coffee, Inc. (REBN) rose by 7% to $2.40 - Oriental Culture Holding LTD (OCG) increased by 5% to $3.55 [3] Premarket Losers - Picard Medical, Inc. (PMI) decreased by 70% to $3.89 - Fusemachines Inc. Common stock (FUSE) down by 17% to $3.29 - American Rebel Holdings, Inc. (AREB) fell by 16% to $3.14 - Armata Pharmaceuticals, Inc. (ARMP) down by 13% to $6.16 - Coya Therapeutics, Inc. (COYA) decreased by 13% to $6.01 - Deckers Outdoor Corporation (DECK) down by 12% to $90.00 - Safe & Green Holdings Corp. (SGBX) fell by 12% to $2.58 - Beasley Broadcast Group, Inc. (BBGI) decreased by 8% to $5.55 - Booz Allen Hamilton Holding Corporation (BAH) down by 7% to $92.73 - Brera Holdings PLC (SLMT) decreased by 6% to $10.67 [4]

Core Viewpoint - Halper Sadeh LLC is investigating the fairness of the merger between Nicolet Bankshares, Inc. and MidWestOne Financial Group, Inc. for Nicolet shareholders [1][3]. Group 1: Investigation Details - The investigation focuses on whether Nicolet and its board violated federal securities laws and breached fiduciary duties by not obtaining the best possible consideration for shareholders and failing to disclose all material information necessary for assessing the merger [3]. - Halper Sadeh LLC may seek increased consideration for shareholders, additional disclosures, and other relief related to the proposed transaction [3]. Group 2: Legal Rights and Contact Information - Nicolet shareholders are encouraged to contact Halper Sadeh LLC to learn more about their legal rights and options regarding the merger [2]. - The firm operates on a contingent fee basis, meaning shareholders would not be responsible for out-of-pocket legal fees or expenses [3].

Core Viewpoint - Halper Sadeh LLC is investigating the fairness of the proposed sale of MidWestOne Financial Group, Inc. to Nicolet Bankshares, Inc. for 0.3175 of a share of Nicolet common stock for each share of MidWestOne common stock, focusing on potential violations of federal securities laws and fiduciary duties to shareholders [1][3]. Group 1 - The investigation aims to determine if MidWestOne and its board of directors failed to obtain the best possible consideration for shareholders [3]. - Concerns have been raised regarding whether Nicolet is underpaying for MidWestOne [3]. - The investigation also seeks to ensure that all material information necessary for shareholders to assess the merger consideration has been disclosed [3]. Group 2 - Halper Sadeh LLC may pursue increased consideration for shareholders, additional disclosures, and other forms of relief related to the proposed transaction [4]. - The firm operates on a contingent fee basis, meaning shareholders would not incur out-of-pocket legal fees or expenses [4].

Core Viewpoint - The Ademi Firm is investigating MidWestOne for potential breaches of fiduciary duty and other legal violations related to its transaction with Nicolet Bancshares, which involves a share exchange that may not be in the best interest of shareholders [1][3]. Transaction Details - MidWestOne shareholders will receive 0.3175 shares of Nicolet common stock for each share of MidWestOne, equating to approximately $41.37 per share based on Nicolet's closing stock price of $130.31 as of October 22, 2025 [2]. - The transaction agreement includes provisions that significantly limit competing offers for MidWestOne, imposing a substantial penalty if a competing bid is accepted [3]. Board Conduct - The investigation focuses on the actions of the MidWestOne board of directors to determine if they are adequately fulfilling their fiduciary duties to all shareholders amidst the transaction [3].

Financial Performance - Net income for Q3 2025 was $17.0 million, or $0.82 per diluted common share, with adjusted earnings of $18.1 million, or $0.87 per share [7]. - The company reported a net income of $17,015,000 for the three months ended September 30, 2025, compared to a net income of $9,980,000 in the previous quarter, an increase of 70.4% [36]. - Earnings per share for the three months ended September 30, 2025, was $0.73, compared to $0.48 in the previous quarter, reflecting a growth of 52.1% [36]. - Adjusted earnings for the three months ended September 30, 2025, were $18,054 thousand, compared to $10,176 thousand in the previous quarter, indicating a significant increase of 77.5% [59]. - The return on average assets improved to 1.09% from 0.65% in the previous quarter, while the return on average equity rose to 11.34% from 6.81% [37]. Asset and Deposit Growth - Total assets increased to $6.25 billion as of September 30, 2025, up from $6.16 billion at June 30, 2025, but down from $6.55 billion at September 30, 2024 [18]. - Total deposits increased to $5.478 billion, an increase of 1.68% from $5.388 billion in the prior quarter [35]. - Total deposits reached $5.48 billion, increasing by $90.9 million, or 1.7%, from $5.39 billion at June 30, 2025, and up $110.3 million, or 2.1%, from $5.37 billion at September 30, 2024 [22]. - Noninterest bearing deposits increased to $958.1 million, up $47.4 million from June 30, 2025, and up $40.4 million from September 30, 2024 [22]. Loan Performance - Loans held for investment rose to $4.42 billion, an increase of $38.4 million, or 0.9%, from $4.38 billion at June 30, 2025, and up $90.9 million, or 2.1%, from $4.33 billion at September 30, 2024 [19]. - Nonperforming loans decreased by $7.2 million to $29.992 million compared to the previous quarter, while nonperforming assets decreased by $6.7 million to $33.944 million [27]. - The ratio of nonperforming loans to total loans was 0.68%, down from 0.85% in the previous quarter [27]. - The net charge-off ratio increased to 1.38%, up 136 basis points from the linked quarter and 122 basis points from the same period last year, primarily due to a $14.6 million charge-off on a single commercial real estate credit [27]. Income and Expense Analysis - Total interest income for the three months ended September 30, 2025, was $74,739,000, compared to $78,267,000 for the previous quarter, reflecting a decrease of 2.5% [36]. - Net interest income after credit loss expense for the three months ended September 30, 2025, was $45,752,000, down from $47,647,000 in the previous quarter, a decline of 4.0% [36]. - Total noninterest expense for the three months ended September 30, 2025, was $37,637,000, up from $35,767,000 in the previous quarter, representing a rise of 5.2% [36]. - Noninterest expense for Q3 2025 was $37.6 million, reflecting a 5% increase from the previous quarter [14]. Equity and Capital Management - Total shareholders' equity increased to $606.1 million as of September 30, 2025, up $17.0 million from June 30, 2025, and up $43.8 million from September 30, 2024 [24]. - Tangible book value per share rose to $24.96, an increase of 4.3% [7]. - The company repurchased 203,802 shares at an average price of $27.44 per share, totaling $5.6 million, with $9.4 million remaining under the share repurchase program [25]. Strategic Initiatives - The company announced a partnership with Nicolet Bankshares, Inc. to create a leading midsize bank in the Upper Midwest [5]. - The company plans to expand its market presence through strategic partnerships and new product offerings in the upcoming quarters [36]. - The management team, including the CEO and CFO, is committed to maintaining transparency and providing regular updates on financial performance and strategic initiatives [62].

Core Insights - MidWestOne Financial Group, Inc. reported strong third-quarter results for 2025, highlighting a partnership with Nicolet Bankshares, Inc. aimed at creating a leading midsize bank in the Upper Midwest [3][4] - The company achieved a return on average assets of 1.09%, driven by solid loan and deposit growth, increased noninterest income, and disciplined expense management [3][6] - Year-over-year growth in Commercial & Industrial (C&I) loans was 10.9%, with noninterest-bearing deposits up 4.4% and treasury management revenues increasing at low double-digit rates [3][6] Financial Performance - Total revenue for Q3 2025 was $61.3 million, a 2% increase from Q2 2025 and a significant increase from the prior year [8][9] - Net interest income was $51.0 million, up 2% from Q2 2025 and 36% from Q3 2024, attributed to higher earning asset volumes [9][11] - Noninterest income was stable at $10.3 million, with notable increases in investment services and trust activities revenue [12][14] Expense Management - Noninterest expense for Q3 2025 was $37.6 million, a 5% increase from Q2 2025, primarily due to higher compensation and employee benefits [15][16] - The efficiency ratio was 58.21%, reflecting effective cost management despite rising expenses [6][7] Balance Sheet Highlights - Total assets increased to $6.25 billion as of September 30, 2025, driven by higher cash and loan volumes [18] - Loans held for investment reached $4.42 billion, a 0.9% increase from Q2 2025 [19] - Total deposits were $5.48 billion, up 1.7% from Q2 2025, with noninterest-bearing deposits increasing significantly [22] Credit Quality - The criticized loans ratio improved to 4.99%, and the nonperforming loans ratio decreased to 0.68% [6][27] - The allowance for credit losses was $51.9 million, with a ratio of 1.17% as of September 30, 2025 [31][32] Capital and Shareholder Returns - Total shareholders' equity increased to $606.1 million, reflecting a decrease in accumulated other comprehensive loss [24] - The company repurchased 203,802 shares at an average price of $27.44 per share, with $9.4 million remaining under the share repurchase program [25]

Core Viewpoint - The merger between Nicolet Bankshares, Inc. and MidWestOne Financial Group, Inc. aims to create a leading community banking franchise in the Upper Midwest, enhancing their market presence and operational efficiencies [1][4]. Financial Overview - The combined entity will have pro forma total assets of $15.3 billion, deposits of $13.1 billion, and loans of $11.3 billion as of September 30, 2025 [2]. - The merger consideration is valued at approximately $864 million, translating to $41.37 per share for MidWestOne shareholders, based on Nicolet's stock price of $130.31 as of October 22, 2025 [3]. Transaction Structure - The merger will be executed as an all-stock transaction, with MidWestOne shareholders receiving 0.3175 shares of Nicolet common stock for each share they own [3]. - Upon completion, MidWestOne shareholders are expected to hold 30% of the combined company's outstanding shares [3]. Leadership and Strategic Intent - Leadership from both companies expressed enthusiasm about the merger, emphasizing a shared commitment to community service and customer relationships [4]. - The merger is described as transformational for Nicolet, with a focus on not just growth but also improving banking services [4]. Market Position and Synergies - The merger will create one of the largest community banks in the Upper Midwest, with significant economies of scale and strong profitability metrics [4]. - The combined bank will have a complementary geographic footprint, enhancing market share in Wisconsin, Iowa, Eastern Minnesota, and Northern Michigan [4]. Earnings Impact - Excluding certain merger-related charges, the transaction is anticipated to be approximately 37% accretive to 2026 earnings, with a negligible earnback period for tangible book value per share [5]. - The merger is subject to customary conditions, including regulatory approvals and shareholder votes, expected to close in the first half of 2026 [5]. Governance - The Board of Directors of the combined company will consist of eight members from Nicolet and four from MidWestOne [5]. - All directors and named executive officers from both companies have agreed to support the merger [6]. Advisory and Legal Support - Keefe, Bruyette & Woods served as financial advisor for Nicolet, while Piper Sandler & Co. provided similar services for MidWestOne [7].

Core Viewpoint - MidWestOne Financial Group, Inc. is set to release its third quarter 2025 financial results on October 23, 2025, followed by a conference call on October 24, 2025 to discuss these results [1] Financial Results Announcement - The financial results will be announced after market closes on October 23, 2025 [1] - A conference call to discuss the results is scheduled for 11:00 a.m. Central Time on October 24, 2025 [1] Participation Details - Investors and analysts can pre-register for the call via a provided link [2] - Access details will be sent via email after pre-registration [2] - Callers can dial in approximately 15 minutes before the call starts using a specific access code [2] Replay Information - A replay of the conference call will be available within four hours after the call concludes [3] - The replay can be accessed online and via a specific phone number with a pin [3] - The replay will be available until January 22, 2026 [3] Company Overview - MidWestOne Financial Group, Inc. is headquartered in Iowa City, Iowa, and is the parent company of MidWestOne Bank [4] - The bank operates in Iowa, Minnesota, Wisconsin, and Colorado, providing electronic financial services through its website [4] - The company trades on the Nasdaq Global Select Market under the symbol "MOFG" [4]