UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-37700 NICOLET BANKSHARES, INC. (Exact Name of Registrant as Specified in its Charter) Wisconsin 47-0871001 (State or ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-37700 NICOLET BANKSHARES, INC. (Exact Name of Registrant as Specified in its Charter) Wisconsin 47-0871001 (State o ...

PART I [Business](index=5&type=section&id=Item%201.%20Business) Nicolet Bankshares, Inc. operates as a bank holding company through Nicolet National Bank, providing commercial, consumer, and wealth management services, with growth driven by organic expansion and strategic acquisitions, under extensive federal and state regulation Key Financial Metrics | Metric | Value (as of Dec 31, 2021) | | :--- | :--- | | Total Assets | $7.7 billion | | Loans | $4.6 billion | | Deposits | $6.5 billion | | Stockholders' Equity | $892 million | | Net Income (FY 2021) | $61 million | | Diluted EPS (FY 2021) | $5.44 | - Nicolet's growth strategy includes supplementing organic growth with merger and acquisition (M&A) activity, having successfully completed nine acquisitions since 2012[18](index=18&type=chunk) - The company offers a wide range of products and services through 52 branch locations, online banking, and mobile platforms, catering to both business customers (small to medium-sized businesses) and consumers[19](index=19&type=chunk)[20](index=20&type=chunk) - As of December 31, 2021, Nicolet employed **856 full-time equivalent employees**. The workforce was composed of **76% women** and **24% men**, with women holding **42% of all officer titles**[23](index=23&type=chunk)[27](index=27&type=chunk) - The company is extensively regulated by federal and state authorities. As a bank holding company, it is primarily supervised by the Federal Reserve, while its subsidiary, Nicolet National Bank, is regulated by the OCC[31](index=31&type=chunk)[33](index=33&type=chunk)[46](index=46&type=chunk) [Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) The company faces key strategic, economic, financial, legal, regulatory, compliance, and operational risks, including challenges in integrating acquisitions, economic downturns, interest rate sensitivity, credit losses, regulatory non-compliance, and cybersecurity threats - The company's growth strategy, which includes frequent mergers and acquisitions, carries risks such as difficulty in integrating operations, potential exposure to unknown liabilities of target companies, and the possibility of not realizing expected benefits[79](index=79&type=chunk)[80](index=80&type=chunk) - The ongoing COVID-19 pandemic poses risks including lower loan demand, increased delinquencies, declines in collateral value, and heightened cybersecurity threats due to increased remote activity[84](index=84&type=chunk)[85](index=85&type=chunk) - Profitability is highly sensitive to changes in interest rates, as net interest income is a primary driver of earnings. The company also faces uncertainty related to the transition away from the LIBOR interest rate index[95](index=95&type=chunk)[98](index=98&type=chunk) - Nicolet operates in a highly regulated industry and is subject to extensive supervision. Noncompliance with regulations like the Bank Secrecy Act and anti-money laundering statutes could result in significant fines and reputational damage[100](index=100&type=chunk)[103](index=103&type=chunk) - The company relies heavily on technology and third-party vendors, exposing it to operational risks such as system failures, interruptions, and security breaches which could damage its reputation and result in financial liability[109](index=109&type=chunk)[110](index=110&type=chunk) [Unresolved Staff Comments](index=24&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved staff comments - None[130](index=130&type=chunk) [Properties](index=24&type=section&id=Item%202.%20Properties) The company's corporate headquarters are in Green Bay, Wisconsin, with the Bank operating 52 branches (40 owned, 12 leased) as of year-end 2021, all considered adequate for current needs - The company's headquarters are at 111 North Washington Street, Green Bay, Wisconsin[131](index=131&type=chunk) - At the end of 2021, the Bank operated **52 branches**, with **40 owned** and **12 leased properties**[131](index=131&type=chunk) [Legal Proceedings](index=24&type=section&id=Item%203.%20Legal%20Proceedings) The company and its subsidiaries may engage in routine legal proceedings, but currently, no proceedings are expected to materially adversely affect its financial results or position - The company is not currently engaged in any legal proceedings that are expected to have a material adverse effect on its financial condition or results of operations[133](index=133&type=chunk)[135](index=135&type=chunk) [Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[136](index=136&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=26&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Nicolet's common stock trades on Nasdaq under "NCBS"; the company has not paid dividends, prioritizing earnings retention for growth, and repurchased **345,166 shares** for approximately **$28 million** in Q4 2021, with its stock performance compared against key indices - The company has not paid dividends on its common stock since its inception and does not intend to declare cash dividends in the foreseeable future, prioritizing the retention of earnings for business growth and strengthening its capital base[139](index=139&type=chunk) Issuer Purchases of Equity Securities (Q4 2021) | Period | Total Shares Purchased | Average Price Paid per Share ($) | | :--- | :--- | :--- | | Oct 1 – Oct 31, 2021 | — | — | | Nov 1 – Nov 30, 2021 | 4,464 | 71.22 | | Dec 1 – Dec 31, 2021 | 340,702 | 80.62 | | **Total Q4 2021** | **345,166** | **80.49** | Cumulative Total Return (2016-2021) | Index | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Nicolet Bankshares, Inc. | $100.00 | $114.78 | $102.33 | $154.85 | $139.13 | $179.81 | | S&P 500 Index | $100.00 | $121.83 | $116.49 | $153.17 | $181.35 | $233.41 | | KBW Nasdaq Bank Index | $100.00 | $118.59 | $97.58 | $132.84 | $119.14 | $164.80 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Nicolet's 2021 performance was significantly impacted by acquisitions, increasing total assets by **69% to $7.7 billion** and driving growth in net interest income, loans, and deposits, while maintaining stable net income and strong capital despite acquisition-related expenses and credit loss provisions [Overview](index=28&type=section&id=Overview) 2021 was transformative for Nicolet, with acquisitions adding **$3.0 billion** in assets, increasing total assets to **$7.7 billion** (a **69% increase**), and net income reaching **$61 million**, with 2022 focusing on integration, organic growth, and leveraging rising interest rates - Completed the acquisition of County Bancorp, adding **$1.4 billion** in assets, and Mackinac Financial Corporation, adding **$1.6 billion** in assets[148](index=148&type=chunk) Key Financial Highlights | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Net Income | $61 million | $60 million | | Diluted EPS | $5.44 | $5.70 | | Total Assets | $7.7 billion | $4.6 billion | | Total Loans | $4.6 billion | $2.8 billion | | Total Deposits | $6.5 billion | $3.9 billion | - Nonperforming assets increased to **$56 million** (**0.73% of total assets**) from **$13 million** in 2020, largely due to nonaccrual agricultural loans acquired with County[151](index=151&type=chunk) - Key objectives for 2022 include the successful cultural integration of acquired entities, achieving solid organic growth, and positioning the asset-sensitive balance sheet to benefit from expected interest rate increases[152](index=152&type=chunk) [Income Statement Analysis](index=32&type=section&id=INCOME%20STATEMENT%20ANALYSIS) Income statement analysis shows **22% growth** in net interest income to **$158 million** driven by acquisitions, a **$14.9 million** provision for credit losses, **8% growth** in noninterest income to **$67 million**, and a **28% rise** in noninterest expense to **$129 million** due to increased personnel and merger costs Income Statement Summary (in millions) | Income Statement Item | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $158.0M | $129.3M | +22% | | Provision for Credit Losses | $14.9M | $10.3M | +45% | | Noninterest Income | $67.4M | $62.6M | +8% | | Noninterest Expense | $129.3M | $100.7M | +28% | | Net Income | $60.7M | $60.5M | +0.3% | - Tax-equivalent net interest income increased by **$29 million** (**22%**) in 2021, primarily due to higher loan volumes from acquisitions and organic growth. The net interest margin remained relatively stable at **3.37%**, down just **1 basis point** from 2020[168](index=168&type=chunk)[173](index=173&type=chunk) - The **$14.9 million** provision for credit losses in 2021 was mostly due to the required Day 2 allowance for credit losses (ACL) increase from the acquisitions of County and Mackinac[175](index=175&type=chunk) - Noninterest income growth was driven by a **23% increase** in combined trust and brokerage fees and a **$4.2 million** net asset gain, which helped offset an **8% decline** in mortgage income from record 2020 levels[177](index=177&type=chunk)[178](index=178&type=chunk) - The **28% rise** in noninterest expense was primarily due to a **$13 million** (**24%**) increase in personnel costs and a **$4.6 million** increase in merger-related expenses, reflecting the expanded operations from acquisitions[179](index=179&type=chunk)[180](index=180&type=chunk) [Balance Sheet Analysis](index=39&type=section&id=BALANCE%20SHEET%20ANALYSIS) The balance sheet expanded significantly in 2021 due to acquisitions, with total loans growing **66% to $4.6 billion**, deposits increasing **65% to $6.5 billion**, and the investment portfolio tripling to **$1.6 billion**, while nonperforming assets rose to **$56 million** due to acquired agricultural loans - Total loans increased by **$1.8 billion** (**66%**) to **$4.6 billion** at year-end 2021, largely due to the acquisitions of Mackinac (**$0.9 billion** in loans) and County (**$1.0 billion** in loans)[183](index=183&type=chunk) - The loan portfolio composition shifted, with agricultural loans increasing from **4% to 17%** of total loans, primarily due to the acquisition of County, a premier agricultural lender[183](index=183&type=chunk)[188](index=188&type=chunk) - The Allowance for Credit Losses (ACL) on loans increased to **$50 million** (**1.07% of loans**) from **$32 million**, with the increase largely attributable to the Day 2 allowance and purchased credit deteriorated (PCD) loans from the 2021 acquisitions[201](index=201&type=chunk) - Nonperforming assets rose to **$56 million** (**0.73% of total assets**) from **$13 million**, with nonaccrual loans increasing to **$44 million**, largely due to nonaccrual agricultural loans acquired with County[206](index=206&type=chunk) - The investment securities portfolio grew to **$1.6 billion**, including **$922 million** in available-for-sale securities and a newly established **$652 million** held-to-maturity portfolio, which includes approximately **$500 million** of U.S. Treasury securities purchased to deploy excess cash[211](index=211&type=chunk) - Total deposits increased by **$2.6 billion** (**65%**) to **$6.5 billion**, driven by acquisitions and strong growth in core customer deposits, which represent **93% of total deposits**[214](index=214&type=chunk)[217](index=217&type=chunk) [Risk Management and Capital](index=48&type=section&id=RISK%20MANAGEMENT%20AND%20CAPITAL) Nicolet maintains strong liquidity and is asset-sensitive, expecting to benefit from rising interest rates, while its capital levels remain robust, with all regulatory ratios well above minimums, and **$61 million** in stock repurchased in 2021 - The company maintains a stable core customer deposit base and has ample liquidity, with available funding sources including **$195 million** in Federal funds lines and **$355 million** in FHLB borrowing capacity at year-end 2021[224](index=224&type=chunk)[226](index=226&type=chunk) - Nicolet is asset-sensitive, and an increase in interest rates is expected to increase net interest income over time. A simulation at December 31, 2021, showed a **200 bps increase** in rates would have a minimal (**-0.3%**) impact on net interest income over one year, a significant change from the **+8.1% impact** projected at year-end 2020[152](index=152&type=chunk)[234](index=234&type=chunk) - The Company and the Bank's regulatory capital ratios remain well above minimum requirements, including the capital conservation buffer. The Bank qualifies as "well-capitalized" under the prompt-corrective action framework[238](index=238&type=chunk) Regulatory Capital Ratios (Company) | Capital Ratio (Company) | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Total risk-based capital | 13.8% | 12.9% | | Tier 1 capital | 10.5% | 12.2% | | Common equity tier 1 | 9.9% | 11.4% | | Tier 1 leverage | 9.4% | 9.0% | - During 2021, the company utilized **$61 million** to repurchase and cancel approximately **793,000 shares** at an average price of **$77.50 per share**[240](index=240&type=chunk) [Critical Accounting Estimates](index=51&type=section&id=Critical%20Accounting%20Estimates) Management identifies Business Combinations, Allowance for Credit Losses (ACL), and Income Taxes as critical accounting estimates, each requiring significant judgment in valuing acquired loans, forecasting credit losses under CECL, and assessing deferred tax asset realizability - The valuation of loans acquired in business combinations is a critical estimate, involving significant judgment regarding factors like remaining life, loss ratios, and the net present value of expected cash flows[247](index=247&type=chunk)[248](index=248&type=chunk) - The Allowance for Credit Losses (ACL) is a critical estimate requiring management to interpret many qualitative and quantitative factors. The CECL model, adopted in 2020, incorporates historical loss rates, qualitative adjustments, and reasonable and supportable economic forecasts[249](index=249&type=chunk)[250](index=250&type=chunk) - The accounting for income taxes is considered critical due to the use of estimates and judgments concerning accounting pronouncements and tax codes, particularly in assessing the realizability of deferred tax assets[252](index=252&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=54&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to the 'Interest Rate Sensitivity Management and Impact of Inflation' discussion within Item 7 for details on the company's market risk management, particularly interest rate risk - For disclosures about market risk, refer to the section "Interest Rate Sensitivity Management and Impact of Inflation" in Item 7 of this report[254](index=254&type=chunk) [Financial Statements and Supplementary Data](index=55&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for fiscal year 2021, including Balance Sheets, Income Statements, Comprehensive Income, Stockholders' Equity, and Cash Flows, along with detailed notes on accounting policies and independent auditor reports [Consolidated Financial Statements](index=55&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show Nicolet Bankshares, Inc.'s financial position and results, with total assets of **$7.7 billion** and stockholders' equity of **$892 million** as of December 31, 2021, and net income of **$61 million** on net interest income of **$158 million** for the year Consolidated Balance Sheet (in thousands) | Consolidated Balance Sheet (in thousands) | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Total Assets | $7,695,037 | $4,551,789 | | Loans, net | $4,572,164 | $2,756,928 | | Total Deposits | $6,465,916 | $3,910,399 | | Total Stockholders' Equity | $891,891 | $539,189 | Consolidated Statement of Income (in thousands) | Consolidated Statement of Income (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Net Interest Income | $157,955 | $129,338 | | Provision for Credit Losses | $14,900 | $10,300 | | Noninterest Income | $67,364 | $62,626 | | Noninterest Expense | $129,297 | $100,719 | | Net Income | $60,652 | $60,469 | [Notes to Consolidated Financial Statements](index=60&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail significant accounting policies and financial statement items, including 2021 acquisitions (Note 2), loan portfolio and ACL (Note 4), goodwill (Note 6), borrowings (Note 9), stock-based compensation (Note 11), and regulatory capital (Note 17) - Note 2 details the acquisitions of County Bancorp for a total purchase price of **$224 million** and Mackinac Financial Corporation for **$229 million**, which were accounted for using the acquisition method[318](index=318&type=chunk)[319](index=319&type=chunk)[325](index=325&type=chunk) - Note 4 provides a detailed roll-forward of the Allowance for Credit Losses on loans, which increased from **$32.2 million** at the beginning of 2021 to **$49.7 million** at year-end, primarily due to provisions and allowances related to acquired loans[354](index=354&type=chunk) - Note 9 outlines long-term borrowings, which increased to **$217 million** from **$54 million** in 2020. This includes a new **$100 million** subordinated note issuance in July 2021 and debt assumed from the County acquisition[405](index=405&type=chunk)[408](index=408&type=chunk)[409](index=409&type=chunk) - Note 17 confirms that both the Company and the Bank met all capital adequacy requirements as of December 31, 2021, with the Bank being categorized as "well-capitalized"[459](index=459&type=chunk)[460](index=460&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=115&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[530](index=530&type=chunk) [Controls and Procedures](index=115&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2021, with no material changes during the fourth quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of December 31, 2021[531](index=531&type=chunk) - Management assessed the effectiveness of internal control over financial reporting and determined it was effective as of December 31, 2021[535](index=535&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=116&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section incorporates by reference information from the 2022 Proxy Statement concerning the company's directors, executive officers, audit committee, and code of ethics - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2022 Proxy Statement[540](index=540&type=chunk) [Executive Compensation](index=116&type=section&id=Item%2011.%20Executive%20Compensation) This section incorporates by reference information from the 2022 Proxy Statement concerning director and executive officer compensation - Information regarding executive compensation is incorporated by reference from the 2022 Proxy Statement[545](index=545&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=116&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section incorporates by reference information from the 2022 Proxy Statement regarding beneficial ownership by the board and management, and includes a table detailing securities authorized for issuance under equity compensation plans Securities Authorized for Issuance Under Equity Compensation Plans | Plan Category | Securities to be issued upon exercise (a) | Weighted-average exercise price (b) | Securities remaining available for future issuance (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 1,859,047 | $57.69 | 858,287 | [Certain Relationships and Related Transactions, and Director Independence](index=116&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section incorporates by reference information from the 2022 Proxy Statement concerning related party transactions and director independence - Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the 2022 Proxy Statement[549](index=549&type=chunk)[550](index=550&type=chunk) [Principal Accountant Fees and Services](index=118&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This section incorporates by reference information from the 2022 Proxy Statement concerning fees paid to the principal accountant and the Audit Committee's pre-approval policies - Information regarding principal accountant fees and services is incorporated by reference from the 2022 Proxy Statement[551](index=551&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=119&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section provides an index of all exhibits filed as part of the Form 10-K, including merger agreements, articles of incorporation, bylaws, debt indentures, and various management and compensation agreements - Lists exhibits filed with the report, including merger agreements for Choice Bancorp, Commerce Financial, Mackinac Financial, and County Bancorp[555](index=555&type=chunk) [Form 10-K Summary](index=120&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports that there is no Form 10-K summary - None[563](index=563&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-37700 NICOLET BANKSHARES, INC. (Exact Name of Registrant as Specified in its Charter) Wisconsin 47-0871001 (Sta ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-37700 NICOLET BANKSHARES, INC. (Exact Name of Registrant as Specified in its Charter) Wisconsin 47-0871001 (State or ...

```markdown PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements%3A) Presents Nicolet Bankshares' unaudited consolidated financial statements and notes for Q1 2021, detailing financial position and performance [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) (In thousands) | (In thousands) | March 31, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $735,854 | $802,859 | | Securities AFS, at fair value | $558,229 | $539,337 | | Loans, net | $2,813,725 | $2,756,928 | | Total assets | $4,543,804 | $4,551,789 | | **Liabilities** | | | | Total deposits | $3,900,594 | $3,910,399 | | Total liabilities | $3,993,758 | $4,012,600 | | **Stockholders' Equity** | | | | Total stockholders' equity | $550,046 | $539,189 | | Total liabilities and stockholders' equity | $4,543,804 | $4,551,789 | - Total assets remained largely unchanged at **$4.54 billion** as of March 31, 2021, compared to December 31, 2020, with a slight shift in composition[10](index=10&type=chunk) - Loans, net increased by **$56.797 million (2.06%)** from **$2.757 billion** at December 31, 2020, to **$2.814 billion** at March 31, 2021[10](index=10&type=chunk) [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) (In thousands) | (In thousands) | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Total interest income | $36,876 | $37,003 | | Total interest expense | $3,235 | $5,740 | | Net interest income | $33,641 | $31,263 | | Provision for credit losses | $500 | $3,000 | | Total noninterest income | $17,126 | $9,585 | | Total noninterest expense | $26,081 | $23,854 | | Net income attributable to Nicolet Bankshares, Inc. | $18,239 | $10,555 | | Basic Earnings per common share | $1.82 | $1.00 | | Diluted Earnings per common share | $1.75 | $0.98 | - Net income attributable to Nicolet Bankshares, Inc. increased by **$7.684 million (72.8%)** from **$10.555 million** in Q1 2020 to **$18.239 million** in Q1 2021[12](index=12&type=chunk) - Diluted EPS increased by **$0.77 (78.6%)** from **$0.98** in Q1 2020 to **$1.75** in Q1 2021[12](index=12&type=chunk) [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) (In thousands) | (In thousands) | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net income | $18,239 | $10,673 | | Other comprehensive income (loss), net of tax | $(5,380) | $3,161 | | Comprehensive income | $12,859 | $13,834 | - Total other comprehensive income (loss) shifted from a gain of **$3.161 million** in Q1 2020 to a loss of **$(5.380) million** in Q1 2021, primarily due to unrealized losses on securities AFS[14](index=14&type=chunk) [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) (In thousands) | (In thousands) | Balances at December 31, 2020 | Balances at March 31, 2021 | | :--- | :--- | :--- | | Common Stock | $100 | $100 | | Additional Paid-In Capital | $273,390 | $271,388 | | Retained Earnings | $252,952 | $271,191 | | Accumulated Other Comprehensive Income (Loss) | $12,747 | $7,367 | | Total Stockholders' Equity | $539,189 | $550,046 | - Total stockholders' equity increased by **$10.857 million (2.01%)** from **$539.189 million** at December 31, 2020, to **$550.046 million** at March 31, 2021, driven by net income, partially offset by stock repurchases and other comprehensive loss[17](index=17&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) (In thousands) | (In thousands) | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $38,213 | $12,165 | | Net cash provided by (used in) investing activities | $(82,165) | $(97,199) | | Net cash provided by (used in) financing activities | $(23,053) | $144,935 | | Net increase (decrease) in cash and cash equivalents | $(67,005) | $59,901 | | Cash and cash equivalents, Ending | $735,854 | $241,960 | - Net cash provided by operating activities significantly increased to **$38.213 million** in Q1 2021 from **$12.165 million** in Q1 2020[20](index=20&type=chunk) - Net cash used in financing activities shifted from a provision of **$144.935 million** in Q1 2020 to a usage of **$(23.053) million** in Q1 2021, primarily due to a decrease in deposits and long-term borrowings, and increased stock repurchases[20](index=20&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) [Note 1 – Basis of Presentation](index=8&type=section&id=Note%201%20%E2%80%93%20Basis%20of%20Presentation) - The unaudited consolidated financial statements include all normal recurring adjustments necessary for fair presentation and should be read with the Company's **2020 Annual Report on Form 10-K**[23](index=23&type=chunk)[24](index=24&type=chunk) - Critical accounting policies and estimates, such as the allowance for credit losses and valuation of acquired loans, remain unchanged from the **2020 Annual Report on Form 10-K**[25](index=25&type=chunk)[26](index=26&type=chunk) [Note 2 – Acquisitions](index=8&type=section&id=Note%202%20%E2%80%93%20Acquisitions) - Nicolet completed its merger with **Advantage Community Bancshares, Inc.** on **August 21, 2020**, expanding its presence in Central Wisconsin[28](index=28&type=chunk) **Advantage Community Bancshares, Inc. Acquisition Impact (August 21, 2020):** | Item | Amount (approximate) | | :--- | :--- | | Total assets | $172 million | | Loans | $88 million | | Deposits | $141 million | | Core deposit intangible | $1 million | | Goodwill | $12 million | [Note 3 – Earnings per Common Share](index=9&type=section&id=Note%203%20%E2%80%93%20Earnings%20per%20Common%20Share) **Earnings Per Common Share (Three Months Ended March 31):** | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Net income attributable to Nicolet Bankshares, Inc. (in thousands) | $18,239 | $10,555 | | Weighted average common shares outstanding (in thousands) | 9,998 | 10,516 | | Effect of dilutive common stock awards (in thousands) | 405 | 285 | | Diluted weighted average common shares outstanding (in thousands) | 10,403 | 10,801 | | Basic earnings per common share | $1.82 | $1.00 | | Diluted earnings per common share | $1.75 | $0.98 | - Options to purchase **less than 0.1 million shares** in 2021 and **approximately 0.1 million shares** in 2020 were excluded from diluted EPS calculations due to their anti-dilutive effect[32](index=32&type=chunk) [Note 4 – Stock-Based Compensation](index=9&type=section&id=Note%204%20%E2%80%93%20Stock-Based%20Compensation) - **Approximately 1.3 million shares** were available for grant under stock-based compensation plans as of March 31, 2021[33](index=33&type=chunk) **Stock Option Activity (Three Months Ended March 31, 2021):** | Metric | Amount | | :--- | :--- | | Outstanding - December 31, 2020 | 1,437,460 shares | | Exercise of stock options | (32,672) shares | | Outstanding - March 31, 2021 | 1,404,788 shares | | Weighted Average Exercise Price (Outstanding) | $50.82 | | Aggregate Intrinsic Value (Outstanding) | $45,872 thousand | | Intrinsic value of options exercised (Q1 2021) | $1.3 million | | Intrinsic value of options exercised (Q1 2020) | $1.8 million | - Stock-based compensation expense recognized was approximately **$1.200 million** in Q1 2021 and **$1.300 million** in Q1 2020. An additional **$100 thousand** director expense was recognized in Q1 2021 for immediately vested restricted stock[40](index=40&type=chunk) [Note 5 – Securities Available for Sale](index=10&type=section&id=Note%205%20%E2%80%93%20Securities%20Available%20for%20Sale) **Securities Available for Sale (AFS) - Fair Value (in thousands):** | Category | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | U.S. government agency securities | $79,115 | $63,451 | | State, county and municipals | $227,672 | $231,868 | | Mortgage-backed securities | $166,900 | $162,495 | | Corporate debt securities | $84,542 | $81,523 | | Total | $558,229 | $539,337 | **Gross Unrealized Losses on Securities AFS (in thousands):** | Category | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | U.S. government agency securities | $256 | $0 | | State, county and municipals | $1,935 | $11 | | Mortgage-backed securities | $1,040 | $78 | | Corporate debt securities | $84 | $0 | | Total | $3,315 | $89 | - **No allowance for credit losses** on securities AFS was recognized as unrealized losses are attributed to noncredit-related factors (e.g., interest rate changes), and the Company does not intend to sell these securities before recovery of cost[46](index=46&type=chunk) [Note 6 – Loans, Allowance for Credit Losses - Loans, and Credit Quality](index=12&type=section&id=Note%206%20%E2%80%93%20Loans%2C%20Allowance%20for%20Credit%20Losses%20-%20Loans%2C%20and%20Credit%20Quality) **Loan Composition (in thousands):** | Category | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Commercial & industrial | $728,498 | $750,718 | | Paycheck Protection Program ("PPP") loans | $229,403 | $186,016 | | Owner-occupied commercial real estate ("CRE") | $520,274 | $521,300 | | CRE investment | $490,053 | $460,721 | | Total Loans | $2,846,351 | $2,789,101 | | Allowance for credit losses - loans ("ACL-Loans") | $32,626 | $32,173 | | Loans, net | $2,813,725 | $2,756,928 | | ACL-Loans to loans | 1.15% | 1.15% | **Allowance for Credit Losses - Loans Roll Forward (in thousands):** | Item | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Beginning balance | $32,173 | $13,972 | | Provision for credit losses | $500 | $3,000 | | Net (charge-offs) recoveries | $(47) | $(55) | | Ending balance | $32,626 | $26,202 | **Past Due and Nonaccrual Loans (in thousands) - March 31, 2021:** | Category | 30-89 Days Past Due (accruing) | 90 Days & Over or nonaccrual | Current | Total | | :--- | :--- | :--- | :--- | :--- | | Commercial & industrial | $58 | $2,842 | $725,598 | $728,498 | | PPP loans | $0 | $0 | $229,403 | $229,403 | | Owner-occupied CRE | $76 | $1,563 | $518,635 | $520,274 | | Total loans | $2,227 | $8,965 | $2,835,159 | $2,846,351 | | Percent of total loans | 0.1% | 0.3% | 99.6% | 100.0% | - Nonaccrual loans decreased from **$9.455 million** at December 31, 2020, to **$8.965 million** at March 31, 2021[64](index=64&type=chunk) [Note 7 – Goodwill and Other Intangibles and Mortgage Servicing Rights](index=19&type=section&id=Note%207%20%E2%80%93%20Goodwill%20and%20Other%20Intangibles%20and%20Mortgage%20Servicing%20Rights) **Goodwill and Other Intangibles, Net (in thousands):** | Category | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Goodwill | $163,151 | $163,151 | | Core deposit intangibles | $8,112 | $8,837 | | Customer list intangibles | $3,238 | $3,365 | | Total | $174,501 | $175,353 | **Mortgage Servicing Rights (MSR) Asset (in thousands):** | Item | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | MSR asset at end of period | $10,851 | $10,230 | | Valuation allowance at end of period | $(1,500) | $(1,000) | | MSR asset, net | $9,351 | $9,230 | | Fair value of MSR asset at end of period | $10,550 | $9,276 | | Residential mortgage loans serviced for others | $1,293,845 | $1,250,206 | - Management determined **no impairment** was indicated for goodwill and other intangibles, considering the ongoing impacts of the COVID-19 pandemic[76](index=76&type=chunk) [Note 8 – Short and Long-Term Borrowings](index=20&type=section&id=Note%208%20%E2%80%93%20Short%20and%20Long-Term%20Borrowings) - The Company had **no outstanding short-term borrowings** at March 31, 2021, or December 31, 2020[84](index=84&type=chunk) **Long-Term Borrowings (in thousands):** | Category | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | FHLB advances | $19,000 | $29,000 | | Junior subordinated debentures | $24,988 | $24,869 | | Total long-term borrowings | $43,988 | $53,869 | - FHLB advances decreased by **$10.000 million**, with a weighted average rate of **0.78%** at March 31, 2021[86](index=86&type=chunk) [Note 9 – Fair Value Measurements](index=21&type=section&id=Note%209%20%E2%80%93%20Fair%20Value%20Measurements) - Financial instruments are measured at fair value using a **three-level hierarchy** based on input observability: **Level 1** (quoted prices in active markets), **Level 2** (observable inputs other than Level 1), and **Level 3** (significant unobservable inputs)[91](index=91&type=chunk)[92](index=92&type=chunk) **Assets Measured at Fair Value on a Recurring Basis (in thousands) - March 31, 2021:** | Category | Total | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | :--- | | Securities AFS | $558,229 | $0 | $555,099 | $3,130 | | Other investments (equity securities) | $4,190 | $4,190 | $0 | $0 | **Assets Measured at Fair Value on a Nonrecurring Basis (in thousands) - March 31, 2021:** | Category | Total | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | :--- | | Collateral dependent loans | $8,399 | $0 | $0 | $8,399 | | Other real estate owned ("OREO") | $3,797 | $0 | $0 | $3,797 | | MSR asset | $10,550 | $0 | $0 | $10,550 | [Note 10 – Subsequent Event](index=24&type=section&id=Note%2010%20%E2%80%93%20Subsequent%20Event) - On **April 12, 2021**, Nicolet entered a definitive merger agreement with **Mackinac Financial Corporation**, expanding into Northern Michigan and the Upper Peninsula[109](index=109&type=chunk) - Mackinac shareholders will receive **0.22 shares** of Nicolet common stock and **$4.64** in cash for each share of Mackinac common stock, approximating an **80% stock and 20% cash split**[109](index=109&type=chunk) **Mackinac Financial Corporation Financials (December 31, 2020):** | Item | Amount | | :--- | :--- | | Total assets | $1.5 billion | | Loans | $1.1 billion | | Deposits | $1.3 billion | | Equity | $168 million | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q1 2021 financial condition and operations, highlighting acquisition and pandemic impacts on key financial metrics [Overview](index=25&type=section&id=Overview) - Nicolet Bankshares, Inc. is a bank holding company providing banking and wealth management services in **Wisconsin and Menominee, Michigan**[111](index=111&type=chunk) - The **COVID-19 pandemic** significantly impacted the business environment in 2020, leading to increased liquidity, higher credit loss provisions, and a focus on customer support through loan modifications and the **Paycheck Protection Program (PPP)**[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - Net income for Q1 2021 was **$18.200 million**, a **73% increase** over Q1 2020, driven by higher net interest income, lower credit provision, and strong noninterest income, particularly from mortgages[121](index=121&type=chunk) [Performance Summary](index=27&type=section&id=Performance%20Summary) **Earnings Summary and Selected Financial Data (in thousands, except per share data):** | Metric | 3/31/2021 | 3/31/2020 | | :--- | :--- | :--- | | Net interest income | $33,641 | $31,263 | | Provision for credit losses | $500 | $3,000 | | Noninterest income | $17,126 | $9,585 | | Noninterest expense | $26,081 | $23,854 | | Net income attributable to Nicolet Bankshares, Inc. | $18,239 | $10,555 | | Diluted EPS | $1.75 | $0.98 | | Return on average assets | 1.64% | 1.19% | | Net interest margin | 3.31% | 3.94% | | Nonperforming loans to total loans | 0.31% | 0.57% | - Total assets at March 31, 2021, were **$4.5 billion**, unchanged from December 31, 2020, but **$811.000 million (22%)** higher than March 31, 2020, primarily due to growth in core deposits from government stimulus[127](index=127&type=chunk) - Loans increased by **$57.000 million (2%)** over December 31, 2020, and **$239.000 million (9%)** over March 31, 2020, partly due to PPP loans and the Advantage acquisition[127](index=127&type=chunk) [Income Statement Analysis](index=29&type=section&id=INCOME%20STATEMENT%20ANALYSIS) [Net Interest Income](index=29&type=section&id=Net%20Interest%20Income) **Tax-Equivalent Net Interest Income and Margin:** | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Tax-equivalent net interest income (in thousands) | $33,893 | $31,494 | | Net interest margin | 3.31% | 3.94% | | Interest-earning asset yield | 3.63% | 4.66% | | Cost of funds | 0.47% | 1.04% | - Tax-equivalent net interest income increased by **$2.400 million (8%)** over Q1 2020, driven by favorable volumes (especially PPP loans and Advantage acquisition assets) despite unfavorable rates[135](index=135&type=chunk) - The net interest margin decreased by **63 bps** to **3.31%** in Q1 2021, primarily due to a **103 bps decline** in earning asset yield and a **17 bps decrease** in net free funds contribution, partially offset by a **57 bps favorable decline** in the cost of funds[137](index=137&type=chunk) [Provision for Credit Losses](index=32&type=section&id=Provision%20for%20Credit%20Losses) - The provision for credit losses decreased significantly to **$500 thousand** in Q1 2021 from **$3.000 million** in Q1 2020[142](index=142&type=chunk) - The reduction reflects **improved asset quality** and **better visibility on credit concerns** compared to the initial onset of the COVID-19 pandemic in Q1 2020[142](index=142&type=chunk) [Noninterest Income](index=33&type=section&id=Noninterest%20Income) **Noninterest Income (in thousands):** | Category | Q1 2021 | Q1 2020 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trust services fee income | $1,775 | $1,579 | $196 | 12% | | Brokerage fee income | $2,793 | $2,322 | $471 | 20% | | Mortgage income, net | $7,230 | $2,327 | $4,903 | 211% | | Card interchange income | $1,927 | $1,562 | $365 | 23% | | Other income | $1,072 | $521 | $551 | 106% | | Total noninterest income | $17,126 | $9,585 | $7,541 | 79% | - Net mortgage income saw a substantial increase of **$4.900 million (211%)**, primarily due to **higher sale gains** and **capitalized gains** from increased refinance activity and better pricing[147](index=147&type=chunk) - Other income increased by **$600 thousand**, largely due to a **favorable change in the fair value of nonqualified deferred compensation plan assets**, recovering from a significant market decline in March 2020[150](index=150&type=chunk) [Noninterest Expense](index=34&type=section&id=Noninterest%20Expense) **Noninterest Expense (in thousands):** | Category | Q1 2021 | Q1 2020 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Personnel | $15,116 | $13,323 | $1,793 | 13% | | Occupancy, equipment and office | $4,137 | $4,204 | $(67) | (2)% | | Business development and marketing | $989 | $1,359 | $(370) | (27)% | | Data processing | $2,658 | $2,563 | $95 | 4% | | FDIC assessments | $595 | $0 | $595 | N/M | | Other expense | $1,734 | $1,412 | $322 | 23% | | Total noninterest expense | $26,081 | $23,854 | $2,227 | 9% | - Personnel expense increased by **$1.800 million (13%)**, partly due to the **change in fair value of nonqualified deferred compensation plan liabilities** and **higher health insurance, benefits, and incentives**[153](index=153&type=chunk) - FDIC assessments increased to **$600 thousand** in Q1 2021 as small bank assessment credits were **fully utilized in Q3 2020**[157](index=157&type=chunk) [Income Taxes](index=34&type=section&id=Income%20Taxes) **Income Tax Expense and Effective Tax Rate:** | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Income tax expense (in thousands) | $5,947 | $3,321 | | Effective tax rate | 24.59% | 23.73% | - The effective tax rate increased to **24.59%** in Q1 2021 from **23.73%** in Q1 2020, as the prior year benefited from favorable tax treatment of BOLI death benefits and higher stock-based compensation tax benefits[158](index=158&type=chunk) [Balance Sheet Analysis](index=35&type=section&id=BALANCE%20SHEET%20ANALYSIS) [Overall Balance Sheet Changes](index=35&type=section&id=Overall%20Balance%20Sheet%20Changes) - Total assets at March 31, 2021, were **$4.5 billion**, unchanged from December 31, 2020, but up **$800.000 million (22%)** from March 31, 2020, primarily due to increased liquidity[159](index=159&type=chunk)[160](index=160&type=chunk) - Cash and cash equivalents increased by **$494.000 million (204%)** to **$736.000 million** at March 31, 2021, representing **16%** of total assets[160](index=160&type=chunk) - Total deposits increased by **$900.000 million (29%)** over March 31, 2020, driven by customer core deposits and the Advantage acquisition, while borrowings decreased by **$114.000 million**[160](index=160&type=chunk) [Loans](index=35&type=section&id=Loans) **Period End Loan Composition (in thousands):** | Category | March 31, 2021 | % of Total | December 31, 2020 | % of Total | March 31, 2020 | % of Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Commercial-based loans | $2,212,907 | 78% | $2,159,667 | 78% | $1,971,766 | 75% | | Retail-based loans | $633,444 | 22% | $629,434 | 22% | $635,658 | 25% | | Total loans | $2,846,351 | 100% | $2,789,101 | 100% | $2,607,424 | 100% | | Total loans ex. PPP loans | $2,616,948 | 92% | $2,603,085 | 93% | $2,607,424 | 100% | - Commercial-based loans increased by **$53.000 million (2%)** since December 31, 2020, primarily due to a **$43.000 million increase** in net PPP loans and **$10.000 million growth** in other commercial loans[165](index=165&type=chunk) - Residential real estate loans grew by **$6.000 million (1%)** from year-end 2020, representing **21%** of total loans[166](index=166&type=chunk) [Allowance for Credit Losses - Loans](index=36&type=section&id=Allowance%20for%20Credit%20Losses%20-%20Loans) - The ACL-Loans was **$32.600 million** at March 31, 2021, representing **1.15%** of total loans and **1.25%** of loans excluding PPP loans[172](index=172&type=chunk) - The increase in ACL-Loans from year-end 2020 was due to a **$500 thousand provision for credit losses** and negligible net charge-offs (**0.01%** of average loans, annualized)[172](index=172&type=chunk) - The ACL-Loans methodology involves **specific reserves for credit-deteriorated loans**, historical loss rates by loan segment, qualitative factors, and reasonable and supportable forecasts[171](index=171&type=chunk) [Nonperforming Assets](index=38&type=section&id=Nonperforming%20Assets) **Nonperforming Assets (in thousands):** | Category | March 31, 2021 | December 31, 2020 | March 31, 2020 | | :--- | :--- | :--- | :--- | | Total nonaccrual loans | $8,965 | $9,455 | $14,769 | | Total OREO | $3,797 | $3,608 | $1,000 | | Total nonperforming assets | $12,762 | $13,063 | $15,769 | | Nonperforming assets to total assets | 0.28% | 0.29% | 0.42% | | ACL-Loans to nonperforming loans | 364% | 340% | 177% | - Nonperforming assets were **$13.000 million** at March 31, 2021, representing **0.28%** of total assets, a slight decrease from December 31, 2020[176](index=176&type=chunk) - Potential problem loans, defined as performing loans rated Substandard, decreased to **$13.000 million (0.4% of loans)** at March 31, 2021, from **$21.000 million (0.7% of loans)** at December 31, 2020[177](index=177&type=chunk) [Deposits](index=39&type=section&id=Deposits) **Period End Deposit Composition (in thousands):** | Category | March 31, 2021 | % of Total | December 31, 2020 | % of Total | March 31, 2020 | % of Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Noninterest-bearing demand | $1,216,477 | 31% | $1,212,787 | 31% | $791,563 | 26% | | Money market and interest-bearing demand | $1,576,041 | 40% | $1,551,325 | 40% | $1,208,024 | 40% | | Savings | $572,225 | 15% | $521,814 | 13% | $361,829 | 12% | | Time | $535,851 | 14% | $624,473 | 16% | $662,050 | 22% | | Total deposits | $3,900,594 | 100% | $3,910,399 | 100% | $3,023,466 | 100% | | Total customer deposits (core) | $3,639,577 | 93% | $3,585,538 | 92% | $2,741,883 | 91% | | Total brokered deposits | $261,017 | 7% | $324,861 | 8% | $281,583 | 9% | - Total deposits were **$3.900 billion** at March 31, 2021, minimally changed from December 31, 2020, with a **$54.000 million increase** in customer core deposits offsetting a **$64.000 million decrease** in brokered deposits[181](index=181&type=chunk) - Compared to March 31, 2020, total deposits increased by **$900.000 million (29%)**, largely due to increased customer core deposits from government stimulus and the Advantage acquisition[182](index=182&type=chunk) [Lending-Related Commitments](index=40&type=section&id=Lending-Related%20Commitments) **Off-Balance Sheet Lending-Related Commitments (in thousands):** | Category | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Commitments to extend credit | $960,788 | $950,287 | | Financial standby letters of credit | $7,868 | $8,241 | | Performance standby letters of credit | $7,757 | $8,366 | - Mortgage derivatives (interest rate lock commitments and forward commitments) represented **$82.000 million** and **$3.000 million**, respectively, at March 31, 2021, with a combined net fair value loss of **$211 thousand**[185](index=185&type=chunk) [Liquidity Management](index=40&type=section&id=Liquidity%20Management) - Nicolet's liquidity levels are **sufficient**, supported by a **stable core customer deposit base** and minimal use of non-core funding sources[187](index=187&type=chunk) - Available funding sources at March 31, 2021, included **$175.000 million** in unused Federal funds lines and **$185.000 million** in FHLB borrowing capacity[188](index=188&type=chunk) - Cash and cash equivalents decreased by **$67.000 million** from year-end 2020 to **$736.000 million** at March 31, 2021, due to investing and financing activities, partially offset by operating cash flows[191](index=191&type=chunk) [Interest Rate Sensitivity Management and Impact of Inflation](index=41&type=section&id=Interest%20Rate%20Sensitivity%20Management%20and%20Impact%20of%20Inflation) - Nicolet manages interest rate sensitivity through a **net interest income analysis**, simulating the impact of hypothetical interest rate changes on net interest income[194](index=194&type=chunk) **Projected Changes in Net Interest Income Over One-Year Horizon:** | Scenario | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | 200 bps decrease in interest rates | (0.4)% | (0.8)% | | 100 bps decrease in interest rates | (0.4)% | (0.8)% | | 100 bps increase in interest rates | 2.0% | 4.0% | | 200 bps increase in interest rates | 4.1% | 8.1% | - The Company's interest rate sensitivity results are within its guidelines of **not greater than -10% for +/- 100 bps** and **not greater than -15% for +/- 200 bps**[195](index=195&type=chunk) [Capital](index=42&type=section&id=Capital) - The Company's and the Bank's regulatory capital ratios remain above minimum regulatory requirements, qualifying the Bank as **well-capitalized**[199](index=199&type=chunk) **Company Risk-Based Capital Ratios (March 31, 2021):** | Ratio | Value | | :--- | :--- | | Total capital ratio | 13.4% | | Tier 1 capital ratio | 12.7% | | Common equity tier 1 capital ratio | 12.0% | | Tier 1 leverage ratio | 9.3% | - During Q1 2021, **$4.100 million** was used to repurchase and cancel **56,886 shares** of common stock, with **$16.300 million** remaining authorized under the repurchase program[200](index=200&type=chunk) [Critical Accounting Policies](index=43&type=section&id=Critical%20Accounting%20Policies) - **No changes** in critical accounting policies have occurred since December 31, 2020, as discussed in the **2020 Annual Report on Form 10-K**[202](index=202&type=chunk) [Future Accounting Pronouncements](index=43&type=section&id=Future%20Accounting%20Pronouncements) - The Company is evaluating the impact of **ASU 2020-04, Reference Rate Reform (Topic 848)**, which provides optional guidance to ease accounting burdens related to reference rate reform, effective through **December 31, 2022**[203](index=203&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Refers to Item 2 for quantitative and qualitative disclosures on market risk, specifically interest rate sensitivity - Quantitative and qualitative disclosures about market risk are addressed in the **'Interest Rate Sensitivity Management and Impact of Inflation' section of Item 2**[204](index=204&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed effective disclosure controls and procedures with no material changes to internal controls in Q1 2021 - Management, under the supervision of the CEO and CFO, concluded that **disclosure controls and procedures were effective** as of March 31, 2021[205](index=205&type=chunk) - **No material changes** in internal controls over financial reporting occurred during the quarter[206](index=206&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) No legal proceedings are expected to materially affect the Company's operations or financial position - **No legal proceedings** are currently underway that are expected to have a material adverse effect on the Company's results or financial position[209](index=209&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors since the 2020 Annual Report on Form 10-K - **No material changes** to risk factors have occurred since the Annual Report on Form 10-K for December 31, 2020[210](index=210&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Nicolet repurchased 63,793 common shares for $4.1 million in Q1 2021, with $16.3 million remaining in the program **Common Stock Purchases (Q1 2021):** | Period | Total Number of Shares Purchased | Average Price Paid per Share ($) | 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 | | :--- | :--- | :--- | :--- | :--- | | January 1 – January 31, 2021 | 9,688 | $68.41 | 9,688 | 542,500 | | February 1 – February 28, 2021 | 50,389 | $72.94 | 43,698 | 498,800 | | March 1 – March 31, 2021 | 3,716 | $76.80 | 3,500 | 495,300 | | Total | 63,793 | $72.48 | 56,886 | 495,300 | - During Q1 2021, **$4.100 million** was utilized to repurchase and cancel approximately **56,900 shares** of common stock under the repurchase program[212](index=212&type=chunk) - As of March 31, 2021, approximately **$16.300 million** remained available under the common stock repurchase program[212](index=212&type=chunk) [Item 3. Defaults Upon Senior Securities](index=44&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults on senior securities occurred during the reporting period - **No defaults** upon senior securities occurred[213](index=213&type=chunk) [Item 4. Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Mine Safety Disclosures are **not applicable**[214](index=214&type=chunk) [Item 5. Other Information](index=44&type=section&id=Item%205.%20Other%20Information) No other information is reported under this item - **No other information** is reported[215](index=215&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) Lists exhibits including merger agreement, CEO/CFO certifications, and XBRL documents - Exhibits include the **Agreement and Plan of Merger with Mackinac Financial Corporation**, CEO and CFO certifications under Sarbanes-Oxley Act, and various XBRL documents[216](index=216&type=chunk) [Signatures](index=46&type=section&id=Signatures) Report signed by President and CEO Michael E. Daniels and CFO Ann K. Lawson on April 30, 2021 - The report was signed by **Michael E. Daniels, President and CEO**, and **Ann K. Lawson, CFO**, on **April 30, 2021**[220](index=220&type=chunk) ```

The ICBK Story Q1 2021 NASDAQ: ICBK investors.icbk.com COUNTY bancorp, inc. Parent company of Investors Community Bank Forward Looking Statements EXCEPT AS OTHERWISE INDICATED, THIS PRESENTATION SPEAKS AS OF THE DATE HEREOF.THE DELIVERY OF THIS PRESENTATION SHALL NOT, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF COUNTY BANCORP, INC. ("THE COMPANY") AFTER THE DATE HEREOF. THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS. IN SOME CASES, FORWARD-LOOKING S ...

Financial Data and Key Metrics Changes - The company reported a net income of $3.9 million or $0.62 per diluted share for Q1 2021, with net interest income decreasing to $10.8 million due to lower loan fees from PPP forgiveness compared to the previous quarter [4][5] - The loan loss provision was $0.2 million, indicating improving credit quality metrics, with a stable adversely classified asset ratio at 39.61% [5][7] - The company repurchased 109,862 common shares during the quarter [5][33] Business Line Data and Key Metrics Changes - Loans sold and serviced increased by $29.3 million, contributing to higher loan servicing and origination rate income [5][31] - The adverse classified ratio remained stable, with watch credits decreasing by $24.2 million due to upgrades in the dairy portfolio [7][11] Market Data and Key Metrics Changes - Class III milk prices averaged $15.98 for Q1 2021, with expectations for an average of $18.16 for the remaining nine months, which is above most dairy producers' breakeven projections [13][14] - The outlook for U.S. dairy exports is strong, with expectations for significant demand from Asia and a weaker dollar aiding export activity [18][19] Company Strategy and Development Direction - The company is focused on enhancing its deposit growth and effective cost of funds management, with a strategy to alter the composition of the right side of its balance sheet [21][26] - The company is investing in technology and infrastructure to improve service offerings and client relationships, including a new full-service location in Appleton [24][76] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding credit quality improvement and anticipated continued positive credit migration throughout 2021 [5][11] - The company expects to see a strong pipeline for loan growth, particularly in the Ag sector, despite potential payoffs on the commercial side [42][83] Other Important Information - The company completed a technology project in Q1 2021 that was initially budgeted for the entire year, resulting in non-recurring expenses for the remainder of 2021 [32][62] - The company has a robust strategy for managing its Ag deposit portfolio, with the addition of a dedicated treasury management expert [80] Q&A Session Summary Question: Thoughts on leverage strategy and potential growth - The company plans to evaluate its leverage strategy quarterly, with an initial target of $200 million over a year [38] Question: Loan growth and impact of PPP on Ag customers - Loan growth is expected to continue, with strong pipelines on both commercial and Ag sides, despite some unexpected payoffs [40][42] Question: Progress on dairy reviews and credit migration - Approximately 20% of Ag reviews are completed, with expectations for continued positive credit migration [48][50] Question: Liquidity management and margin outlook - The company anticipates some downward pressure on margins but expects to offset this with interest recovery [52][54] Question: Technology strategy and expense run rate - The technology strategy is being developed to align with the overall strategic plan, with expenses expected to remain on track [62] Question: Crop insurance commission structure and growth - The crop insurance business has shown steady growth, with a focus on federal programs and margin insurance for dairy producers [66][70] Question: Funding opportunities in the Ag space - The new Appleton location is expected to enhance visibility and brand recognition, translating into deposit growth [76][78] Question: Share buyback strategy - The company plans to take advantage of market conditions for share buybacks, especially during Russell reconstitution [108][110]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from…………to…………. Commission file number 001-37700 NICOLET BANKSHARES, INC. (Exact name of registrant as specified in its charter) Wisconsin 47-0871001 (State or other jurisdiction of ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-37700 NICOLET BANKSHARES, INC. (Exact Name of Registrant as Specified in its Charter) Wisconsin 47-0871001 Washington, D.C. 20549 _________________________ (State or Othe ...