Summary of Nicolet Bankshares and MidWestOne Financial Group Merger Conference Call Company and Industry Overview - **Company**: Nicolet Bankshares Inc. (NYSE:NIC) - **Acquisition Target**: MidWestOne Financial Group - **Industry**: Community Banking Key Points and Arguments 1. **Acquisition Announcement**: Nicolet Bankshares announced the acquisition of MidWestOne Financial Group, which adds $3.4 billion in assets to Nicolet's existing $6.2 billion, resulting in a combined asset base of approximately $9.6 billion [2][3] 2. **Market Presence**: MidWestOne operates 57 locations across Eastern and Central Iowa, the Twin Cities, parts of Wisconsin, and Denver, enhancing Nicolet's footprint in these markets [3] 3. **Financial Metrics**: The acquisition 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] 4. **EPS Accretion**: The deal is expected to provide full-year, fully phased-in EPS accretion of approximately 35% to 40% and is only slightly dilutive to Nicolet's tangible book value per share [10][11] 5. **Cost Savings**: 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] 6. **Cultural Integration**: Both companies share similar values and a focus on community banking, which is expected to facilitate a smooth cultural integration [22][31] 7. **Market Strategy**: The acquisition allows Nicolet to enter larger metropolitan markets like the Twin Cities, which they had previously avoided, and to expand in Denver, a rapidly growing market [12][13] 8. **Credit Diligence**: Nicolet conducted extensive credit diligence, reviewing over 70% of commercial and agricultural credits from MidWestOne, ensuring a solid understanding of the credit quality being acquired [14] 9. **Future Growth**: The combined entity is expected to maintain top quartile profitability metrics and continue to focus on organic growth while integrating the two banks [11][12] Additional Important Insights 1. **Balance Sheet Positioning**: Nicolet repositioned its balance sheet in early 2023 by selling $500 million of U.S. Treasuries, which helped improve its net interest margin and profitability metrics [4][5] 2. **Market Challenges**: Both banks faced challenges related to unrealized losses in their investment portfolios, which impacted profitability and stock valuation [9] 3. **Long-term Vision**: Nicolet's management emphasized a long-term approach to growth and profitability, focusing on maintaining a strong community banking presence [8][24] 4. **Integration Timeline**: The legal closing of the merger is targeted for the first half of 2026, with a systems conversion planned for summer or early fall [15] 5. **Shareholder Value**: Nicolet's management reassured shareholders of their commitment to delivering exceptional returns and maintaining a focus on customer, employee, and shareholder success [58][59] This summary encapsulates the key points discussed during the conference call regarding the merger between Nicolet Bankshares and MidWestOne Financial Group, highlighting the strategic rationale, financial implications, and future outlook for the combined entity.

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 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 Insights - Nicolet Bankshares (NIC) reported quarterly earnings of $2.66 per share, exceeding the Zacks Consensus Estimate of $2.34 per share, and showing an increase from $2.04 per share a year ago, resulting in an earnings surprise of +13.68% [1] - The company achieved revenues of $103.32 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 7.62%, compared to $91.24 million in the same quarter last year [2] - Nicolet Bankshares has outperformed the S&P 500, with shares increasing by approximately 24.2% since the beginning of the year, compared to the S&P 500's gain of 13.9% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.31 on revenues of $96.4 million, and for the current fiscal year, it is $9.08 on revenues of $377.5 million [7] - The estimate revisions trend for Nicolet Bankshares was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Zacks Industry Rank for Banks - Northeast places it in the top 24% of over 250 Zacks industries, suggesting that stocks in the top 50% of Zacks-ranked industries outperform those in the bottom 50% by more than 2 to 1 [8] - Another company in the same industry, Princeton Bancorp (BPRN), is expected to report quarterly earnings of $1.00 per share, reflecting a year-over-year change of +58.7%, with revenues projected at $22.5 million, up 17.4% from the previous year [9]

Financial Performance - Record net income of $42 million for Q3 2025, up from $36 million in Q2 2025 and $33 million in Q3 2024[1] - Earnings per diluted common share increased to $2.73 in Q3 2025, compared to $2.34 in Q2 2025 and $2.10 in Q3 2024[1] - Net income for Q3 2025 was $41,735,000, a 28.5% increase from $32,516,000 in Q3 2024[14] - Basic earnings per share for Q3 2025 were $2.81, up from $2.16 in Q3 2024, representing a 30.1% increase[14] - Adjusted net income (Non-GAAP) for the same period was $40,693,000, compared to $36,195,000 in the prior quarter, reflecting a growth of approximately 4.1%[20] - The diluted earnings per common share (GAAP) for Q3 2025 was $2.73, up from $2.34 in Q2 2025, representing an increase of 16.7%[20] - The adjusted diluted earnings per common share (Non-GAAP) for Q3 2025 was $2.66, compared to $2.35 in Q2 2025, reflecting a growth of 13.2%[20] Asset and Loan Growth - Total assets reached $9.0 billion at September 30, 2025, an increase of $99 million from June 30, 2025[3] - Total assets as of September 30, 2025, were $8,984,344,000, an increase from $8,596,812,000 a year earlier, reflecting a growth of 4.5%[15] - Loans outstanding increased to $6,843,189,000 in Q3 2025, compared to $6,542,532,000 in Q3 2024, indicating a growth of 4.6%[15] - Total loans increased by $36 million from June 30, 2025, primarily in construction and agricultural loans[3] - Total loans as of September 30, 2025, reached $6,874,711,000, an increase from $6,839,141,000 in the previous quarter[17] Deposits and Capital - Core deposits grew by $223 million (13% annualized) during Q3 2025[5] - Total deposits increased to $7,611,465,000 as of September 30, 2025, compared to $7,541,673,000 in the prior quarter, reflecting a growth of 0.92%[17] - Total capital increased to $1.2 billion at September 30, 2025, up $25 million from June 30, 2025[3] Income and Interest Metrics - Total interest income for Q3 2025 reached $120,333,000, an increase of 6.9% compared to $112,622,000 in Q3 2024[14] - Net interest income after provision for credit losses was $78,314,000 for Q3 2025, up from $67,616,000 in Q3 2024, reflecting a year-over-year increase of 15.8%[14] - Net interest income for the three months ended September 30, 2025, was $79,696,000, with a net interest margin of 3.86%[18] - Net interest margin improved to 3.86%, up 14 basis points from Q2 2025[5] - The average interest rate on interest-bearing core deposits was 2.51% for the nine months ended September 30, 2025[18] Noninterest Income and Efficiency - Noninterest income for Q3 2025 was $24 million, an increase of $3 million from Q2 2025[8] - Noninterest income totaled $23,619,000 in Q3 2025, compared to $22,378,000 in Q3 2024, marking a 5.5% increase[14] - The efficiency ratio improved to 49.10% in Q3 2025, down from 54.57% in Q3 2024, indicating better cost management[15] Share Repurchase and Stock Metrics - The company repurchased 155,393 common shares for $21 million during Q3 2025[5] - Common stock repurchased in Q3 2025 amounted to $20,525,000, with 155,393 shares repurchased[15] Nonperforming Assets - Nonperforming assets were $28 million, representing 0.31% of total assets at September 30, 2025[4] Tax and Equity Metrics - The effective tax rate assumed for adjustments was 19.5%, which is critical for understanding the adjusted net income calculations[21] - Tangible common equity stood at $831,267,000 as of September 30, 2025, an increase from $804,991,000 in the previous quarter, reflecting a growth of 3.3%[20] - Average tangible common equity for the nine months ended September 30, 2025, was $800,025,000, compared to $687,026,000 for the same period last year, showing a significant increase of 16.4%[20]

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 - 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]