Core Viewpoint - Nicolet Bankshares, Inc. has announced the extension of CEO Mike Daniels' leadership through the end of 2030, highlighting the company's commitment to stable leadership and growth [1]. Company Overview - Nicolet Bankshares was founded in 2000 by Mike Daniels and Bob Atwell, achieving one of the largest capital raises for a de novo bank in Wisconsin's history [1]. - The company has grown to approximately $9 billion in assets, positioning itself near the top of its peer group [1].

Core Viewpoint - Delota Corp. reported strong financial results for Q1 2026, achieving $10 million in revenue and positive Adjusted EBITDA of $351,000, marking the ninth consecutive quarter of positive Adjusted EBITDA and reflecting operational efficiencies and strategic growth initiatives [4][6][7]. Financial Highlights - Total revenue for Q1 2026 was $10,043,670, an increase from $9,883,883 in Q1 2025, representing a growth of approximately 1.6% [7][10]. - The gross profit margin for Q1 2026 was 36%, down from 40% in Q1 2025 [6][7]. - Positive Adjusted EBITDA for Q1 2026 was $351,800, compared to $105,366 in Q1 2025, indicating significant improvement [7][14]. - Revenue segmentation for Q1 2026 included: - Vape - B2C: $7.7 million - Vape - B2B: $1.4 million - Cannabis - B2C: $1.0 million [6][7]. Other Highlights - The company completed the early redemption of $900,000 in senior secured convertible debentures, enhancing its balance sheet [4][6]. - Delota has a customer base exceeding 300,000 registered accounts across its online and physical retail platforms [6][15]. - The company is focused on expanding its retail footprint and enhancing its e-commerce platform as part of its growth strategy [15].

Financial Data and Key Metrics Changes - Adjusted EBITDA for the first half of 2025 was $159.3 million, slightly above the $155.7 million recorded in 2024, with profit after tax increasing by 80% to $25.5 million from $14 million in 2024 [3][11][12] - Gross profit rose to $114.8 million, up 19%, and operating profit increased by 12% to $98.7 million [8] - Total liabilities decreased slightly due to amortizing debt, with a focus on refinancing to extend tenor and lower costs [10] Business Line Data and Key Metrics Changes - The Hangzhou mine produced over 11.5 million wet metric tons, with adjusted EBITDA of $70.3 million, a significant improvement from 2024 [4][16] - RKF operations saw lower EBITDA due to higher costs and ore shortages, despite an improving NPI price [9][12] - HPAL operations performed well, with production above 2024 levels and stable cash costs, resulting in EBITDA per ton margins around $5,900 [14][15] Market Data and Key Metrics Changes - NPI price increased from $11,290 to $11,350, while cash costs rose from $9,716 to $10,117 due to higher oil prices [12][13] - The company is experiencing a slight upward trend in nickel prices, which is expected to positively impact future margins [13] Company Strategy and Development Direction - The company is focused on responsible and sustainable mining, with initiatives like the Nickel Industries Foundation and a conservation area within the Hengjai mining concession [2][3] - Development of the Sampala project is progressing well, with expectations to host over 1 billion wet metric tons [6][19] - The company aims to double production at the Hengdai mine and is targeting commissioning of the cathode plant by late 2025 [17][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance despite challenges in nickel prices, highlighting strong growth in the mining sector [42] - The company anticipates further growth with the imminent release of an RKB that requires no CapEx for increased mine sales [42] Other Important Information - The company has deferred payments for E and C totaling $126.5 million to January and April, allowing for additional production and EBITDA [11] - The cathode plant is expected to be commissioned in October or November, with all key equipment fabricated and erected [17][35] Q&A Session Summary Question: Update on debt refinancing and balance sheet management - Management confirmed entering a commitment letter for a $100 million loan facility to support working capital and is evaluating alternative debt funding options [21][23] Question: Dividend withdrawal reasoning - Management stated the withdrawal is a prudent balance sheet management decision, prioritizing financial stability over dividend payouts [26] Question: Update on VAT refunds and timing - Management expects the $110 million VAT refunds within the next six to twelve months and is in dialogue with the Indonesian government [28][29] Question: Timing for environmental study approval and production targets - Management indicated that the RKB approval is expected by September, with Sampala targeting 6 million tonnes per annum by the end of the year [30] Question: Factors influencing commissioning of the cathode plant - Management explained the delay in commissioning is due to high working capital demands and the need to ensure a strong balance sheet [34][36]

Financial Data and Key Metrics Changes - For the first half of 2025, adjusted EBITDA was US$159.3 million, slightly above the US$155.7 million recorded in 2024, with profit after tax increasing by 80% to US$25.5 million from US$14 million in 2024 [3][11][42] - Gross profit reached US$114.8 million, up 19%, and operating profit was US$98.7 million, up 12% [7] Business Line Data and Key Metrics Changes - The Hangzhou mine produced over 11.5 million wet metric tons, with adjusted EBITDA of US$70.3 million, a significant improvement compared to 2024 [4][16] - RKF operations saw lower EBITDA due to higher costs and ore shortages, despite an improving NPI price [8][12] - HPAL operations performed well, with production above 2024 levels and stable cash costs, resulting in EBITDA margins around US$5,900 per ton [14][15] Market Data and Key Metrics Changes - NPI prices increased from US$11,290 to US$11,350, while cash costs rose from US$9,716 to US$10,117 due to higher oil prices [13][12] - The combined EBITDA for HNC and Syncreation increased by 20% to 27.7% in 2025 [15] Company Strategy and Development Direction - The company is focused on responsible and sustainable mining, with initiatives like the Nickel Industries Foundation for social and economic development in Indonesia [2] - Development of the Sampala project is progressing well, with expectations to host over 1 billion wet metric tons [6] - The company aims to achieve gold status in responsible mining ratings and is working on increasing production capacity at the Hengjai mine [5][19] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance despite challenges in nickel prices, highlighting strong growth in the mining sector [42] - The company anticipates further growth with the imminent release of an RKB that requires no CapEx for increased mine sales [42] Other Important Information - The company has deferred payments for E and C totaling US$126.5 million to January and April, allowing for further production and EBITDA [11] - The cathode plant is expected to be commissioned in October or November, with all key equipment fabricated and erected [17][34] Q&A Session Summary Question: Update on debt refinancing and other levers - Management confirmed entering a commitment letter for a US$100 million loan facility to support working capital and is evaluating alternative debt funding options [22][23] Question: Dividend withdrawal reasoning - Management stated that the withdrawal of the dividend is a case of prudent balance sheet management [25] Question: Update on VAT refunds - Management expects the US$110 million VAT refunds within the next six to twelve months and is in dialogue with the Indonesian government [27][28] Question: Timing for environmental study approval - Management expects the RKB approval for the Penguja mine by September and for Sampala by the end of the year [29] Question: Factors for commissioning the cathode plant - Management decided to delay commissioning due to high working capital draw and costs associated with MHP, aiming for October or November [34][36]

Financial Performance - Sales revenue decreased by 2% from US$843.3 million in 1H 2024 to US$829.7 million in 1H 2025[10] - Gross profit increased by 19% from US$96.3 million in 1H 2024 to US$114.8 million in 1H 2025[10] - Operating profit increased by 12% from US$87.8 million in 1H 2024 to US$98.7 million in 1H 2025[10] - Profit after tax increased significantly by 81% from US$14.0 million in 1H 2024 to US$25.3 million in 1H 2025[10] - Adjusted EBITDA from RKEF decreased by 28% from US$109.0 million in 1H 2024 to US$78.3 million in 1H 2025[10] - Adjusted EBITDA from the mine increased substantially by 76% from US$39.9 million in 1H 2024 to US$70.3 million in 1H 2025[10] - Attributable EBITDA from HPAL increased by 20% from US$22.6 million in 1H 2024 to US$27.1 million in 1H 2025[10] Operational Highlights - RKEF operations saw a slight decrease of 2% in total nickel production, from 63,814 tonnes in 1H 2024 to 62,257 tonnes in 1H 2025[9, 14] - Hengjaya Mine production and sales increased by 90% and 81% respectively compared to the previous corresponding period (pcp)[10, 19] - Limonite mined increased by 121% from 4,177,937 wmt in 1H 2024 to 9,237,715 wmt in 1H 2025[19] - HPAL operations (HNC) nickel production in MHP increased by 2% from 41,172 tonnes in 1H 2024 to 41,934 tonnes in 1H 2025[9, 17] Balance Sheet and Dividends - The company declared a final dividend of A$0.015 per share for the full year 2024 financial result, a 40% decrease from A$0.025 in the previous period[10]

PART I – FINANCIAL INFORMATION This section presents the company's unaudited consolidated financial statements and management's analysis of financial condition and results of operations [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS:) This section presents the unaudited consolidated financial statements, including balance sheets, statements of income, comprehensive income (loss), stockholders' equity, and cash flows, along with detailed notes explaining the basis of presentation, earnings per share, stock-based compensation, securities, loans, borrowings, commitments, fair value measurements, and segment information [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Details the company's financial position, including assets, liabilities, and equity, at specific reporting dates Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total Assets | $8,930,809 | $8,796,795 | | Loans, net | $6,770,733 | $6,560,262 | | Total Deposits | $7,541,673 | $7,403,684 | | Total Liabilities | $7,740,711 | $7,623,897 | | Total Stockholders' Equity | $1,190,098 | $1,172,898 | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Reports the company's revenues, expenses, and net income over specific periods Consolidated Statements of Income Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Interest Income | $75,109 | $65,342 | $146,315 | $128,149 | | Provision for Credit Losses | $1,050 | $1,350 | $2,550 | $2,100 | | Noninterest Income | $20,633 | $19,609 | $38,856 | $39,031 | | Noninterest Expense | $49,919 | $46,853 | $97,706 | $94,000 | | Net Income | $36,035 | $29,273 | $68,627 | $57,063 | | Basic EPS | $2.40 | $1.96 | $4.53 | $3.82 | | Diluted EPS | $2.34 | $1.92 | $4.42 | $3.74 | [Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Presents net income alongside other comprehensive income or loss components Consolidated Statements of Comprehensive Income (Loss) Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $36,035 | $29,273 | $68,627 | $57,063 | | Total other comprehensive income (loss) | $4,373 | $148 | $11,649 | ($2,089) | | Comprehensive income (loss) | $40,408 | $29,421 | $80,276 | $54,974 | [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Outlines changes in the company's equity accounts, including net income, dividends, and stock transactions - Stockholders' equity increased to **$1,190,098 thousand** at June 30, 2025, from **$1,172,898 thousand** at December 31, 2024, driven by net income and other comprehensive income, partially offset by common stock repurchases and dividends[16](index=16&type=chunk) Key Stockholders' Equity Changes (Six Months Ended June 30, 2025, in thousands) | Item | Amount | | :------------------ | :----- | | Net income | $68,627 | | Other comprehensive income (loss) | $11,649 | | Stock-based compensation expense | $3,587 | | Cash dividends on common stock | ($9,156) | | Purchase and retirement of common stock | ($56,036) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Summarizes the cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :------------------------------------------- | :---------- | :---------- | | Net cash provided by (used in) operating activities | $80,694 | $60,718 | | Net cash provided by (used in) investing activities | ($238,029) | ($176,723) | | Net cash provided by (used in) financing activities | $43,926 | $33,104 | | Net increase (decrease) in cash and cash equivalents | ($113,409) | ($82,901) | | Cash and cash equivalents, Ending | $422,638 | $408,530 | - The decrease in cash and cash equivalents in 2025 was primarily driven by significant net cash used in investing activities, largely for loan growth, and net cash used in financing activities, including common stock repurchases and repayments of long-term borrowings[19](index=19&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Provides detailed explanations and additional information supporting the interim financial statements [Note 1 – Basis of Presentation](index=8&type=section&id=Note%201%20%E2%80%93%20Basis%20of%20Presentation) Explains the accounting principles, critical estimates, and recent accounting pronouncements applied in the financial statements - The interim consolidated financial statements are unaudited and prepared in accordance with SEC rules, with certain GAAP disclosures omitted or abbreviated, and should be read in conjunction with the Company's 2024 Annual Report on Form 10-K[23](index=23&type=chunk) - The determination of the allowance for credit losses is considered a critical accounting estimate due to the significant judgment involved[24](index=24&type=chunk) - ASU 2023-07 (Segment Reporting) was adopted on **January 1, 2024**, expanding segment disclosure requirements[26](index=26&type=chunk) - Future accounting pronouncements include ASU 2024-03 (Income Statement - Expense Disaggregation) and ASU 2023-09 (Income Taxes)[27](index=27&type=chunk)[28](index=28&type=chunk) [Note 2 – Earnings per Common Share](index=9&type=section&id=Note%202%20%E2%80%93%20Earnings%20per%20Common%20Share) Details the calculation of basic and diluted earnings per common share for the reporting periods Earnings Per Common Share (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $36,035 | $29,273 | $68,627 | $57,063 | | Basic earnings per common share | $2.40 | $1.96 | $4.53 | $3.82 | | Diluted earnings per common share | $2.34 | $1.92 | $4.42 | $3.74 | - Options to purchase less than **0.1 million shares** for 2025 and approximately **0.6 million shares** for 2024 were excluded from diluted EPS calculations as their exercise would have been anti-dilutive[32](index=32&type=chunk) [Note 3 – Stock-Based Compensation](index=9&type=section&id=Note%203%20%E2%80%93%20Stock-Based%20Compensation) Describes the company's stock-based compensation plans and related expenses - Approximately **0.5 million shares** were available for grant under stock-based compensation plans at June 30, 2025[33](index=33&type=chunk) - No stock options were granted for the six months ended June 30, 2025[34](index=34&type=chunk) Stock-Based Compensation Expense (Six Months Ended June 30, in thousands) | Item | 2025 | 2024 | | :------------------------------------------- | :------ | :------ | | Stock-based compensation expense (officers/employees) | $2,900 | $2,900 | | Director expense (restricted stock grants) | $700 | $700 | | Tax benefit from stock option exercises/vesting | $1,300 | $200 | [Note 4 – Securities and Other Investments](index=11&type=section&id=Note%204%20%E2%80%93%20Securities%20and%20Other%20Investments) Provides information on the company's investment securities, including fair value and unrealized gains/losses Securities AFS Fair Value and Unrealized Losses (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total Securities AFS (Fair Value) | $849,253 | $806,415 | | Gross Unrealized Gains | $3,193 | $1,217 | | Gross Unrealized Losses | $54,729 | $67,660 | - No allowance for credit losses on AFS securities was recognized, as unrealized losses are attributed to non-credit-related factors such as changes in interest rates, not credit deterioration[47](index=47&type=chunk) - Investment securities with a carrying value of **$434 million** at June 30, 2025, were pledged as collateral to secure public deposits and borrowings, and for liquidity or other regulatory purposes[45](index=45&type=chunk) [Note 5 – Loans, Allowance for Credit Losses - Loans, and Credit Quality](index=13&type=section&id=Note%205%20%E2%80%93%20Loans,%20Allowance%20for%20Credit%20Losses%20-%20Loans,%20and%20Credit%20Quality) Details the composition of the loan portfolio, allowance for credit losses, and credit quality metrics Loan Composition (in thousands) | Loan Type | June 30, 2025 | % of Total | December 31, 2024 | % of Total | | :------------------------ | :------------ | :--------- | :---------------- | :--------- | | Commercial & industrial | $1,412,621 | 20% | $1,319,763 | 20% | | Agricultural | $1,346,924 | 20% | $1,322,038 | 20% | | CRE investment | $1,231,423 | 18% | $1,221,826 | 18% | | Residential first mortgage | $1,205,841 | 18% | $1,196,158 | 18% | | Total Loans | $6,839,141 | 100% | $6,626,584 | 100% | Allowance for Credit Losses - Loans (ACL-Loans, in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | ACL-Loans | $68,408 | $66,322 | | ACL-Loans to loans | 1.00% | 1.00% | Nonaccrual Loans by Portfolio Segment (in thousands) | Loan Type | June 30, 2025 | % of Total Nonaccrual | December 31, 2024 | % of Total Nonaccrual | | :------------------------ | :------------ | :-------------------- | :---------------- | :-------------------- | | Commercial & industrial | $6,317 | 23% | $8,534 | 30% | | Owner-occupied CRE | $7,114 | 26% | $4,547 | 16% | | Agricultural | $11,619 | 42% | $9,969 | 35% | | Total Nonaccrual Loans | $27,735 | 100% | $28,419 | 100% | [Note 6 – Goodwill and Other Intangibles and Servicing Rights](index=24&type=section&id=Note%206%20%E2%80%93%20Goodwill%20and%20Other%20Intangibles%20and%20Servicing%20Rights) Reports the carrying values of goodwill, other intangible assets, and mortgage servicing rights Goodwill and Other Intangibles, Net (in thousands) | Asset Type | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Goodwill | $367,387 | $367,387 | | Core deposit intangibles | $16,072 | $18,815 | | Customer list intangibles | $1,648 | $1,938 | | Total | $385,107 | $388,140 | - No impairment was indicated for goodwill and other intangibles for the six months ended June 30, 2025, or the year ended December 31, 2024[79](index=79&type=chunk) Servicing Rights Asset, Net (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Servicing rights asset, net | $18,042 | $18,834 | | Residential mortgage loans serviced for others | $1,616,737 | $1,644,821 | | Agricultural loans serviced for others | $414,204 | $438,954 | [Note 7 – Short and Long-Term Borrowings](index=26&type=section&id=Note%207%20%E2%80%93%20Short%20and%20Long-Term%20Borrowings) Outlines the company's outstanding short-term and long-term debt obligations - The Company did not have any short-term borrowings outstanding at either **June 30, 2025**, or **December 31, 2024**[88](index=88&type=chunk) Long-Term Borrowings (in thousands) | Borrowing Type | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | FHLB advances | $0 | $5,000 | | Junior subordinated debentures | $41,799 | $41,384 | | Subordinated notes | $92,541 | $115,003 | | Total long-term borrowings | $134,340 | $161,387 | - The County Subordinated Notes due 2030, which were assumed in a December 2021 acquisition, were called and are no longer outstanding at **June 30, 2025**[93](index=93&type=chunk)[96](index=96&type=chunk) [Note 8 – Commitments and Contingencies](index=27&type=section&id=Note%208%20%E2%80%93%20Commitments%20and%20Contingencies) Discloses off-balance sheet commitments and potential contingent liabilities Off-Balance Sheet Risk Exposure (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :------------------------------ | :------------ | :---------------- | | Commitments to extend credit | $2,035,947 | $2,038,871 | | Financial standby letters of credit | $23,163 | $15,683 | | Performance standby letters of credit | $18,839 | $15,503 | - Interest rate lock commitments to originate residential mortgage loans held for sale and forward commitments to sell residential mortgage loans held for sale (mortgage derivatives) increased significantly from **$13 million** and **$12 million**, respectively, at December 31, 2024, to **$41 million** and **$40 million** at June 30, 2025[104](index=104&type=chunk) [Note 9 – Fair Value Measurements](index=28&type=section&id=Note%209%20%E2%80%93%20Fair%20Value%20Measurements) Explains the methodologies and categorization of assets and liabilities measured at fair value - Fair value measurements are categorized into **Level 1** (quoted market prices in active markets), **Level 2** (observable inputs other than Level 1), and **Level 3** (significant unobservable inputs)[108](index=108&type=chunk) Recurring Fair Value Measurements (Securities AFS, in thousands) | Asset Type | June 30, 2025 | Level 1 | Level 2 | Level 3 | | :-------------------------- | :------------ | :------ | :-------- | :------ | | Securities AFS | $849,253 | $0 | $842,688 | $6,565 | | Other investments (equity securities) | $8,456 | $8,456 | $0 | $0 | Nonrecurring Fair Value Measurements (in thousands) | Asset Type | June 30, 2025 | Level 1 | Level 2 | Level 3 | | :-------------------------- | :------------ | :------ | :------ | :-------- | | Collateral dependent loans | $23,290 | $0 | $0 | $23,290 | | MSR asset (disclosure) | $16,274 | $0 | $0 | $16,274 | [Note 10 – Segment Information](index=31&type=section&id=Note%2010%20%E2%80%93%20Segment%20Information) Identifies the company's operating segments and provides financial information for each - The Company adopted ASU 2023-07, Segment Reporting, on **January 1, 2024**[122](index=122&type=chunk) - The Company operates as a single banking segment, providing a broad array of loan and deposit products to businesses, consumers, and government municipalities[122](index=122&type=chunk)[123](index=123&type=chunk) - There were no adjustments or reconciling items between the banking segment's net income and consolidated net income, or between segment total assets and consolidated total assets[123](index=123&type=chunk)[124](index=124&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of Nicolet's consolidated financial condition and results of operations, including an overview, performance summary, detailed income statement and balance sheet analysis, and discussion of critical accounting estimates. It highlights significant growth in net income, net interest income, loans, and deposits, alongside stable asset quality and strong capital ratios [Overview](index=32&type=section&id=Overview) Introduces the company's business, geographic focus, and highlights the forward-looking nature of the report - Nicolet Bankshares, Inc. is a bank holding company headquartered in Green Bay, Wisconsin, providing traditional banking and wealth management services primarily in Wisconsin, Michigan, and Minnesota[125](index=125&type=chunk) - The document contains forward-looking statements that are subject to various risks and uncertainties, including strategic, market, operating, legal, regulatory, economic, and cybersecurity risks[126](index=126&type=chunk)[128](index=128&type=chunk) [Performance Summary](index=35&type=section&id=Performance%20Summary) Provides a high-level review of key financial results and operational achievements for the period Key Performance Metrics (Six Months Ended June 30, in thousands, except per share data) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :------------------------------------------- | :---------- | :---------- | :--------- | :--------- | | Net Income (GAAP) | $68,627 | $57,063 | +$11,564 | +20.3% | | Diluted EPS (GAAP) | $4.42 | $3.74 | +$0.68 | +18.2% | | Net Interest Income | $146,315 | $128,149 | +$18,166 | +14.2% | | Net Interest Margin | 3.65% | 3.37% | +0.28% | | | Loans (period end) | $6,839,141 | $6,529,134 | +$310,007 | +4.7% | | Total Deposits (period end) | $7,541,673 | $7,241,078 | +$300,595 | +4.1% | - Noninterest income was minimally changed from the first six months of 2024, while noninterest expense increased by **$4 million** (**4%**) due to higher personnel costs and non-personnel expenses[141](index=141&type=chunk) [Income Statement Analysis](index=36&type=section&id=Income%20Statement%20Analysis) Analyzes the components of the income statement, including net interest income, noninterest income, and expenses [Net Interest Income](index=36&type=section&id=Net%20Interest%20Income) Examines the primary source of bank revenue, detailing changes in interest income and expense - Tax-equivalent net interest income increased by **$18 million** (**14%**) to **$147 million** for the first six months of 2025, attributable to both favorable rates (**$6 million**) and favorable volumes (**$12 million**)[152](index=152&type=chunk) - The tax-equivalent net interest margin improved by **28 bps** to **3.65%** for the first half of 2025, compared to **3.37%** for the first half of 2024[155](index=155&type=chunk) Average Balance Sheet and Net Interest Income Analysis (Six Months Ended June 30, in thousands) | Metric | 2025 Average Balance | 2025 Yield/Rate | 2024 Average Balance | 2024 Yield/Rate | | :-------------------- | :------------------- | :-------------- | :------------------- | :-------------- | | Total loans | $6,772,060 | 6.15% | $6,447,785 | 5.98% | | Total interest-earning assets | $8,109,756 | 5.74% | $7,681,109 | 5.59% | | Total interest-bearing liabilities | $5,962,651 | 2.84% | $5,584,262 | 3.05% | | Tax-equivalent net interest income and net interest margin | $147,249 | 3.65% | $129,129 | 3.37% | [Provision for Credit Losses](index=40&type=section&id=Provision%20for%20Credit%20Losses) Discusses the expense recognized for potential loan losses and its drivers - The provision for credit losses was **$2.6 million** for the six months ended June 30, 2025, an increase from **$2.1 million** in the comparable 2024 period, primarily due to growth and changes in the underlying loan portfolio[157](index=157&type=chunk) - The provision for credit losses is predominantly a function of management's methodology and judgment regarding qualitative and quantitative factors used to determine the appropriateness of the Allowance for Credit Losses (ACL)[158](index=158&type=chunk) [Noninterest Income](index=40&type=section&id=Noninterest%20Income) Reviews income generated from sources other than interest, such as fees and service charges - Total noninterest income was **$38.9 million** for the first half of 2025, a slight decrease of **$0.2 million** from the first half of 2024, largely due to changes in asset gains (losses)[160](index=160&type=chunk) Noninterest Income Highlights (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :------------------------------------------- | :------ | :------ | :--------- | :--------- | | Wealth management fee income | $13,786 | $13,159 | +$627 | +5% | | Mortgage income, net | $4,833 | $3,998 | +$835 | +21% | | Service charges on deposit accounts | $3,987 | $3,394 | +$593 | +17% | | Deferred compensation plan asset market valuations | $1,482 | $228 | +$1,254 | N/M | | Asset gains (losses), net | ($553) | $2,525 | ($3,078) | N/M | [Noninterest Expense](index=41&type=section&id=Noninterest%20Expense) Analyzes operational costs, including personnel, occupancy, and data processing expenses - Total noninterest expense increased by **$3.7 million** (**4%**) to **$97.7 million** for the first half of 2025 compared to the first half of 2024[166](index=166&type=chunk) Noninterest Expense Highlights (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :------------------------------------------- | :------ | :------ | :--------- | :--------- | | Personnel | $55,635 | $52,795 | +$2,840 | +5% | | Occupancy, equipment and office | $18,434 | $17,625 | +$809 | +5% | | Data processing | $9,207 | $8,551 | +$656 | +8% | | Intangibles amortization | $3,033 | $3,595 | ($562) | (16%) | [Income Taxes](index=41&type=section&id=Income%20Taxes) Details the company's income tax expense and effective tax rate for the reporting periods Income Tax Expense and Effective Rate (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------- | :---------- | :---------- | | Income tax expense | $16,288 | $14,017 | | Effective tax rate | 19.2% | 19.7% | - The change in income tax expense was mostly due to higher pretax earnings in 2025[170](index=170&type=chunk) [Income Statement Analysis – Three Months Ended June 30, 2025 versus Three Months Ended June 30, 2024](index=42&type=section&id=Income%20Statement%20Analysis%20%E2%80%93%20Three%20Months%20Ended%20June%2030,%202025%20versus%20Three%20Months%20Ended%20June%2030,%202024) Compares the company's financial performance for the second quarter of 2025 against the same period in 2024 Q2 2025 vs Q2 2024 Income Statement Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :------------------------------------------- | :---------- | :---------- | :--------- | :--------- | | Net Income | $36,035 | $29,273 | +$6,762 | +23.1% | | Diluted EPS | $2.34 | $1.92 | +$0.42 | +21.9% | | Tax-equivalent net interest income | $75,600 | $65,800 | +$9,800 | +14.9% | | Net interest margin | 3.72% | 3.42% | +0.30% | | | Noninterest income | $20,600 | $19,600 | +$1,000 | +5.1% | | Noninterest expense | $49,900 | $46,900 | +$3,000 | +6.4% | [Balance Sheet Analysis](index=42&type=section&id=Balance%20Sheet%20Analysis) Provides a detailed review of the company's assets, liabilities, and equity [Loans](index=43&type=section&id=Loans) Analyzes the composition and growth of the company's loan portfolio - Total loans increased by **$213 million** (**3%**) to **$6.8 billion** at June 30, 2025, from December 31, 2024, primarily in commercial and industrial loans[179](index=179&type=chunk) - The loan portfolio at June 30, 2025, was **76% commercial-based** and **24% retail-based**, with commercial and industrial and agricultural loans each representing **20%** of the total portfolio[178](index=178&type=chunk)[179](index=179&type=chunk) - Nicolet utilizes an active credit risk management process, including sound underwriting, systematic monitoring, and early problem loan identification, to manage overall credit quality[176](index=176&type=chunk) [Allowance for Credit Losses - Loans](index=45&type=section&id=Allowance%20for%20Credit%20Losses%20-%20Loans) Discusses the reserve set aside for potential loan defaults and its adequacy - The ACL-Loans was **$68 million**, representing **1.00%** of total loans at June 30, 2025, consistent with December 31, 2024, and June 30, 2024[188](index=188&type=chunk)[190](index=190&type=chunk) - The ACL-Loans is a critical accounting estimate, determined by evaluating qualitative and environmental factors such as loan portfolio characteristics, nonperforming loan levels, historical losses, and economic conditions[186](index=186&type=chunk) Net Loan (Charge-offs) Recoveries (Six Months Ended June 30, in thousands) | Loan Type | 2025 | 2024 | | :------------------------ | :------ | :------ | | Commercial & industrial | ($444) | ($240) | | Owner-occupied CRE | ($154) | $180 | | Agricultural | ($65) | $0 | | Retail & other | ($37) | ($273) | | Total net (charge-offs) recoveries | ($714) | ($296) | [Nonperforming Assets](index=46&type=section&id=Nonperforming%20Assets) Reports on assets that are not generating income due to borrower default or other issues - Nonperforming assets were **$29 million**, representing **0.32%** of total assets at June 30, 2025, a slight decrease from **0.33%** at December 31, 2024[191](index=191&type=chunk) - Nonperforming loans are defined as nonaccrual loans and loans **90 days or more** past due but still accruing interest[191](index=191&type=chunk) - Potential problem loans (loans rated Substandard but performing) increased to **$77 million** (**1%** of loans) at June 30, 2025, from **$68 million** at December 31, 2024, requiring heightened management review[192](index=192&type=chunk) [Deposits](index=48&type=section&id=Deposits) Examines the sources and composition of the company's deposit base - Total deposits increased by **$138 million** (**2%**) to **$7.5 billion** at June 30, 2025, from December 31, 2024, with core deposits increasing by **$130 million**[195](index=195&type=chunk) Period End Deposit Composition (in thousands) | Deposit Type | June 30, 2025 | % of Total | December 31, 2024 | % of Total | | :------------------------ | :------------ | :--------- | :---------------- | :--------- | | Noninterest-bearing demand | $1,800,335 | 24% | $1,791,228 | 24% | | Interest-bearing demand | $1,266,507 | 17% | $1,168,560 | 16% | | Money market | $1,900,639 | 25% | $1,942,367 | 26% | | Savings | $805,300 | 11% | $774,707 | 11% | | Time | $1,768,892 | 23% | $1,726,822 | 23% | | Total deposits | $7,541,673 | 100% | $7,403,684 | 100% | - Total estimated uninsured deposits were **$2.3 billion**, representing **31%** of total deposits at June 30, 2025[197](index=197&type=chunk) [Liquidity Management](index=48&type=section&id=Liquidity%20Management) Describes the company's strategies and resources for managing short-term cash needs - Cash and cash equivalents decreased by **$113 million** since year-end 2024, primarily due to **$238 million** net cash used in investing activities, mostly to fund loan growth[199](index=199&type=chunk) Liquidity Sources (in millions) | Source | June 30, 2025 | | :---------------------------- | :------------ | | Fed Funds Lines | $175 | | Brokered Capacity | $1,127 | | FHLB Borrowing Availability | $627 | | Fed Discount Window | $12 | | Total Liquidity Funding Availability | $1,941 | - The Parent Company had **$136 million** in cash at June 30, 2025, and regularly evaluates capital and liquidity positions to support the Bank and its other subsidiaries[201](index=201&type=chunk) [Interest Rate Sensitivity Management and Impact of Inflation](index=49&type=section&id=Interest%20Rate%20Sensitivity%20Management%20and%20Impact%20of%20Inflation) Assesses the company's exposure to interest rate fluctuations and inflation - The Company measures its overall interest rate sensitivity through a net interest income analysis, calculating the change in net interest income under hypothetical interest rate changes[204](index=204&type=chunk) Interest Rate Sensitivity (Projected Change in Net Interest Income over One Year) | Interest Rate Change | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | 200 bps decrease | (3.5)% | (2.5)% | | 100 bps decrease | (1.7)% | (1.3)% | | 100 bps increase | 1.7 % | 1.3 % | | 200 bps increase | 3.4 % | 2.6 % | - Changes in interest rates have a more significant impact on a financial institution's performance than general inflation[208](index=208&type=chunk) [Capital](index=50&type=section&id=Capital) Reviews the company's regulatory capital ratios and capital management strategies - The Company's and the Bank's regulatory capital ratios remain above minimum requirements, with the Bank qualifying as well-capitalized under the prompt-corrective action framework[209](index=209&type=chunk) Company Risk-Based Capital Ratios | Ratio | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Total capital ratio | 14.0 % | 14.3 % | | Tier 1 capital ratio | 11.8 % | 11.9 % | | Common equity Tier 1 capital ratio | 11.3 % | 11.4 % | | Tier 1 leverage ratio | 10.3 % | 10.5 % | - At June 30, 2025, **$40 million** remained authorized under the common stock repurchase program, representing an alternative use of capital[211](index=211&type=chunk) [Critical Accounting Estimates](index=51&type=section&id=Critical%20Accounting%20Estimates) Reaffirms the most significant accounting judgments and assumptions impacting financial reporting - The determination of the allowance for credit losses remains the critical accounting estimate for the Company[212](index=212&type=chunk) - There have been no changes in the Company's critical accounting policies and estimates since December 31, 2024[212](index=212&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section confirms that there have been no material changes in the company's market risk profile since the previous annual report, referring to the detailed discussion on interest rate sensitivity within the Management's Discussion and Analysis - No material changes in market risk were reported at June 30, 2025, from that presented in the Company's 2024 Annual Report on Form 10-K[213](index=213&type=chunk) [Item 4. Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the principal executive and financial officers, concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period, and no material changes in internal control over financial reporting occurred during the quarter - Management, under the supervision of the principal executive officer and principal financial officer, evaluated and concluded that disclosure controls and procedures were effective as of June 30, 2025[214](index=214&type=chunk) - There were no changes in the Company's internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[215](index=215&type=chunk) PART II – OTHER INFORMATION Contains additional disclosures not directly related to the financial statements, such as equity sales and exhibits [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides details on the company's common stock repurchases during the second quarter of 2025 under its authorized repurchase program, noting the number of shares purchased and the remaining authorization Common Stock Repurchases (Q2 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share ($) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs () | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs () | | :---------------------- | :------------------------------- | :------------------------------- | :------------------------------------------------------------------------------- | :--------------------------------------------------------------------------------- | | April 1 – April 30, 2025 | 107,667 | 109.60 | 93,219 | | | May 1 – May 31, 2025 | 89,481 | 122.47 | 82,689 | | | June 1 – June 30, 2025 | 89,008 | 119.69 | 81,494 | | | Total | 286,156 | 116.77 | 257,402 | 322,000 | - At June 30, 2025, approximately **$40 million**, or **322,000 shares** of common stock (based on the closing stock price of **$123.48**), remained available under the common stock repurchase program[219](index=219&type=chunk) [Item 5. Other Information](index=52&type=section&id=Item%205.%20Other%20Information) This section states that there are no Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements to report for the period - No Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements were reported[220](index=220&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including various certifications and interactive data files in Inline XBRL format - The report includes certifications from the CEO and CFO (Exhibits **31.1**, **31.2**, **32.1**, **32.2**) and interactive data files for the financial statements in Inline XBRL format (Exhibit **101**)[221](index=221&type=chunk) [Signatures](index=53&type=section&id=Signatures) This section contains the official signatures of the company's Chairman, President, and Chief Executive Officer, and the Chief Financial Officer, certifying the report - The report is signed by Michael E. Daniels (Chairman, President, and Chief Executive Officer) and H. Phillip Moore, Jr. (Chief Financial Officer) on **August 1, 2025**[225](index=225&type=chunk)

Core Viewpoint - Delota Corp. reported strong financial performance for the fourteen months ended March 31, 2025, with significant revenue growth and strategic initiatives aimed at expanding its market presence and profitability [4][5]. Financial Highlights - Total revenue reached $46.5 million for the fourteen months ended March 31, 2025, representing an increase from $34.1 million for the twelve months ended January 31, 2024 [10]. - The company achieved a gross profit margin of 38% during the same period [6]. - Adjusted EBITDA was approximately $1.2 million, a significant improvement from a loss of $2.0 million in the previous year [10][14]. - Revenue segmentation included $36.4 million from B2C vape sales, $6.0 million from B2B vape sales, and $4.1 million from B2C cannabis sales [11]. Operational Developments - The customer base expanded to over 300,000 registered accounts across online and brick-and-mortar platforms [4][6]. - The company completed the early redemption of $900,000 in senior secured convertible debentures, enhancing its balance sheet [4][11]. - Delota entered into a licensing agreement with 180 Global to expand its retail presence in Eastern Canada [11]. Strategic Initiatives - The company is focused on optimizing its omni-channel strategy and pursuing strategic mergers and acquisitions to accelerate growth [4][15]. - Delota aims to strengthen its flagship brand, 180 Smoke Vape Store, and enhance its national e-commerce platform [15].

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of USD 86 million for the June quarter, bringing the first half unaudited adjusted EBITDA to USD 183.6 million, which is a material outperformance compared to the previous year [4][17] - The twelve-month rolling Total Recordable Injury Frequency Rate (TRIFR) was 1.29, with a Lost Time Injury Frequency Rate (LTIFR) of 0.05 for June, indicating strong safety performance [2][3] Business Line Data and Key Metrics Changes - RKF nickel metal production was 30,463 tonnes, slightly lower than the previous quarter, impacted by kiln realignment and maintenance [4][7] - HPAL production from HNC was 2,075 tonnes of nickel, continuing to operate above nameplate capacity [4] - The Hangjai mine achieved record ore sales of over 3 million wet metric tonnes, with an EBITDA of USD 41.4 million, a 33% increase from the previous quarter [6][12] Market Data and Key Metrics Changes - MHP pricing remained stable at USD 11,449, slightly higher than the previous quarter, with payabilities for MHP close to 90% [9][10] - The EBITDA margin for HNC remained strong at USD 6,219 per tonne, with an increase in EBITDA per tonne margins from USD 4,297 to USD 4,819 [10] Company Strategy and Development Direction - The company is focusing on the completion of the E and C project, with the integrated nickel refinery for cathode expected to commence commissioning after aligning working capital requirements [11][17] - The feasibility study to increase the Anglia mine RKB from 9 million tonnes to 19 million tonnes has been approved, with optimism for receiving environmental impact study approval in August [13] - The Sampala project is progressing well, with a feasibility study lodged for an initial operation of 6 million wet metric tonnes per annum [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving RKAB approval in August and expects to ramp up production from the Hangjai mine significantly in the second half of the year [40] - The company is actively managing working capital and exploring various financing sources to support operations, given the tight cash flow situation [33][34] Other Important Information - The company is targeting completion of the first 8 kilometers of the haul road for the Sampala project by early Q4, with first ore delivery expected in the second half of next year [44][45] - Current margins from the Sampala project are projected to be significant, with an exploration target of over 1 billion wet metric tonnes of ore [16] Q&A Session Summary Question: Cash flow neutrality despite good EBITDA - Management explained that the neutral cash flow was primarily due to a significant working capital build, particularly in RKF operations, which is expected to unwind [20][21] Question: MHP realizations increase - Management noted market tightness contributing to improved MHP payabilities, offsetting a decrease in LME prices [22][23] Question: Delaying commissioning of E and C - Management confirmed that delaying commissioning was a strategic decision to save on working capital, particularly for limonite inventory build [29][30] Question: Debt service requirements - Management outlined that USD 33 million in interest amortization was paid in July, with an additional USD 100 million due in Q4 across bank loans and bonds [32][33] Question: Production ramp-up from Hangjai mine - Management remains optimistic about receiving the RCAB permit in August and plans to ramp up production significantly for the remainder of the year [40]

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of $86 million for the June quarter, bringing the first half unaudited adjusted EBITDA to $183.6 million, which is a material outperformance compared to the previous year [4][16] - The twelve-month rolling Total Recordable Injury Frequency Rate (TRIFR) was 1.29, with a Lost Time Injury Frequency Rate (LTIFR) of 0.05 for June, indicating strong safety performance [2][3] Business Line Data and Key Metrics Changes - RKF nickel metal production was 30,463 tonnes, slightly lower than the previous quarter, impacted by kiln realignment and maintenance [4][7] - HPAL production from HNC was 2,075 tonnes of nickel, continuing to operate above nameplate capacity [4] - The Hangjai mine achieved record ore sales of over 3 million wet metric tonnes, with an EBITDA of $41.4 million, a 33% increase from the previous quarter [6][12] Market Data and Key Metrics Changes - MHP pricing remained stable at $11,449, slightly higher than the previous quarter, with payabilities for MHP close to 90% [8][9] - The Hengjia mine's EBITDA increased by CAD10.4 million, highlighting the benefits of integrated operations [8] Company Strategy and Development Direction - The company is focusing on the completion of the E and C project, with commissioning deferred to align working capital requirements [10][11] - The feasibility study to increase the Anglia mine RKB from 9 million tonnes to 19 million tonnes has been approved, indicating growth plans [13] - The Sampala project is progressing well, with a feasibility study lodged for an initial operation of 6 million wet metric tonnes per annum [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving RKAB approval in August and expects to ramp up production from the Hangjai mine significantly [37] - The company remains confident in the exploration target of over 1 billion wet metric tonnes of ore at the Sao Paulo project, with strong margins expected [16][40] Other Important Information - The company is actively managing working capital due to a significant build-up, particularly in RKF operations [20][30] - There are discussions regarding various financing sources, excluding equity raises, to manage cash flow and debt obligations [32][33] Q&A Session Summary Question: Cash flow neutrality despite good EBITDA - Management explained that the neutral cash flow was due to a large working capital build, particularly in RKF operations, which is expected to unwind [20][21] Question: MHP realizations increase - Management noted market tightness leading to improved MHP payabilities, offsetting a decrease in LME prices [22][23] Question: Delaying commissioning of E and C - The decision to delay was significant enough to avoid building up working capital ahead of the sales license [28][30] Question: Debt service requirements - Management confirmed $33 million in interest amortization was paid in July, with another $100 million due in the remainder of the year [31][34] Question: Production ramp-up from Hangjai mine - Management remains optimistic about receiving the RCAB permit in August and targets significantly above 12 million tonnes for the year [37] Question: Development timing for Sao Paulo - The company is targeting completion of the haul road by early Q4, with first ore delivery expected in early H2 next year [40]

Safety and Sustainability - The company's 12-month lost time injury frequency rate (LTIFR) was 0.05 as of the end of June 2025 [4] - There were 186 million work hours registered in the twelve months to 30 June 2025, with one lost time injury (LTI) occurring [4] - The company's 12-month rolling total recordable injury frequency rate (TRIFR) was 129 as of the end of June 2025 [4] Production and Sales - RKEF nickel metal production reached 30,463 tonnes [7] - HPAL attributable production included 2,075 tonnes of nickel and 188 tonnes of cobalt in MHP, exceeding nameplate capacity by 38% [7] - Mining operations achieved record ore sales of 3,021,678 wmt, a 6% increase compared to the previous quarter [7] Financial Performance - HPAL attributable EBITDA was US$108 million, a 51% decrease from the March quarter [7] - Mining EBITDA amounted to US$414 million, a 33% increase from the March quarter [7] - RKEF Adjusted EBITDA was US$337 million, a 24% decrease from the March quarter [7]