8-K: Nicolet Bankshares Achieves Record 2025 Earnings

Nicolet Bankshares, Inc. reported record net income of $151 million and diluted earnings per share of $9.78 for full year 2025, alongside strong growth in deposits and loans.

Summary

• Achieved record net income of $151 million for full year 2025, a significant increase from $124 million in 2024.
• Reported diluted earnings per share of $9.78 for full year 2025, marking a 21.5% increase over $8.05 in 2024.
• Full year 2025 saw a Return on Average Assets (RoA) of 1.68% and a non-GAAP Return on Average Tangible Common Equity (RoTCE) of 18.53%.
• Net interest margin (NIM) for full year 2025 improved by 29 basis points to 3.76% compared to 2024.
• Experienced exceptional year-over-year core deposit growth of $497 million, or 7%.
• Achieved solid year-over-year loan growth of $210 million, or 3%.
• Fourth quarter 2025 net income was $40 million ($2.65 diluted EPS), a decrease from third quarter 2025's $42 million ($2.73 diluted EPS) but an increase from fourth quarter 2024's $34 million ($2.19 diluted EPS).
• Total assets stood at $9.2 billion at December 31, 2025, an increase of $156 million from September 30, 2025.
• Nonperforming assets were $32 million, representing 0.35% of total assets at December 31, 2025, an increase from 0.31% at September 30, 2025.
• The allowance for credit losses-loans was $69 million, or 1.01% of total loans, at December 31, 2025.
• Declared a quarterly cash dividend of $0.32 per share, payable on March 16, 2026, to shareholders of record as of March 2, 2026.
• The acquisition of MidWestOne is expected to close in the first quarter of 2026, pending regulatory and shareholder approvals.

Sentiment

Score: 8

Explanation: The company delivered record full-year financial results with strong growth in key metrics like net income, EPS, NIM, and core deposits. The outlook for the MidWestOne acquisition is highly positive, indicating strategic growth. While there was a slight sequential dip in Q4 earnings and an increase in nonperforming assets, the overall annual performance and future prospects are very strong.

Positives

• Achieved record net income of $151 million for full year 2025, a 21.8% increase over 2024.
• Reported record diluted earnings per share of $9.78 for full year 2025, a 21.5% increase over 2024.
• Net interest margin improved by 29 basis points to 3.76% for full year 2025.
• Experienced exceptional year-over-year core deposit growth of $497 million (7%).
• Achieved solid year-over-year loan growth of $210 million (3%).
• Maintained solid asset quality trends with negligible loan net charge-offs.
• Interest expense decreased $6 million year-over-year due to lower overall deposit rates, despite deposit growth.
• Noninterest income increased $3 million year-over-year, with growth in most core categories, including $2 million higher wealth management fee income and $2 million higher net mortgage income.
• Favorable movements in the securities portfolio market valuation contributed to an increase in total capital.

Negatives

• Fourth quarter 2025 net income of $40 million and diluted EPS of $2.65 decreased sequentially from third quarter 2025's $42 million and $2.73, respectively.
• Total loans decreased by $38 million from September 30, 2025, to December 31, 2025.
• Nonperforming assets increased to 0.35% of total assets at December 31, 2025, from 0.31% at September 30, 2025, and 0.33% at December 31, 2024.
• Net asset gains (losses) were lower year-over-year and experienced an unfavorable change quarter-over-quarter.
• Non-personnel expenses increased in Q4 2025, primarily due to merger-related expenses.

Risks

• Integration of MidWestOne's and Nicolet's respective businesses may be materially delayed or prove more costly or difficult than expected due to unexpected factors or events.
• Inability to meet expectations regarding the timing of the proposed merger with MidWestOne.
• Failure to obtain the necessary approvals from shareholders of Nicolet or MidWestOne for the merger.
• Inability to obtain required governmental approvals for the proposed transaction on the expected timeline, or at all, with such approvals potentially imposing conditions that could adversely affect the combined company or the expected benefits of the transaction.
• Failure to satisfy other conditions required for the completion of the proposed merger, or any unexpected delay in closing the transaction, or the occurrence of any event that could lead to the termination of the merger agreement.
• The outcome of any legal or regulatory proceedings or governmental inquiries or investigations that may be currently pending or later instituted against Nicolet, MidWestOne, or the combined company.

Future Outlook

The company anticipates closing its acquisition of MidWestOne in the first quarter of 2026, contingent upon receiving all necessary regulatory and shareholder approvals. Management expresses strong excitement and confidence in the successful integration of the two cultures and geographies, expecting a quick melding of the teams to deliver shared success to shareholders, customers, and employees.

Management Comments

• "We delivered record earnings and earnings per share while exceeding our targets across nearly every key performance metric. This performance likely places us among the top performing community banks in the country and reflects disciplined execution and a relentless focus on fundamentals."
• "Delivering record net income while expanding our net interest margin and growing core deposits reflects the strength of our core community bank franchise and the trust our customers place in us."
• "We believe our model—rooted in community banking and long-term thinking—positions us well for the opportunities ahead in 2026, including welcoming the customers and employees of MidWestOne."
• "We expect to close the transaction with MidWestOne in the first quarter, following receipt of regulatory and shareholder approvals... Based on what I’ve seen thus far through the integration planning process, I am more excited by this combination than I ever have been. I have sensed nothing but excitement from the people across MidWestOne, and have little doubt our two teams of employees will come together as one very quickly while we work through the integration process over the next several months to continue to deliver shared success to our three circles shareholders, customers and employees."

Industry Context

The reported record earnings and strong growth in core deposits and net interest margin highlight Nicolet Bankshares' robust performance within the community banking sector. This success, coupled with the pending acquisition of MidWestOne, reflects a broader trend of consolidation among regional banks seeking to enhance scale, market share, and operational efficiencies in a competitive financial landscape. The focus on community banking and disciplined execution positions the company favorably amidst evolving industry dynamics.

Comparison to Industry Standards

• Management believes its performance, including record earnings and exceeding key performance metrics, likely places the company among the top performing community banks in the country.

Stakeholder Impact

• **Shareholders**: Benefited from record earnings, significant EPS growth, and a declared cash dividend. The pending merger with MidWestOne presents potential for future value creation, though it also carries integration risks.
• **Customers**: The company's strong core community bank franchise and deposit growth indicate continued customer trust. The MidWestOne merger is expected to welcome new customers.
• **Employees**: Personnel expenses increased due to higher incentives commensurate with record net income and annual merit increases. The MidWestOne merger will involve integrating new employees, with management expressing excitement about the combined team.

Next Steps

• Close the transaction with MidWestOne in the first quarter of 2026, subject to regulatory and shareholder approvals.
• Integrate the customers and employees of MidWestOne into the Nicolet Bankshares operations.
• Pay a quarterly cash dividend of $0.32 per share on March 16, 2026, to shareholders of record as of March 2, 2026.

Key Dates

Recommendation

Nicolet Bankshares delivered exceptional full-year 2025 results, setting new records for net income and diluted EPS, significantly outperforming the previous year. The company demonstrated robust operational strength with an improved net interest margin, strong core deposit growth, and solid loan growth, all while maintaining sound asset quality. The impending acquisition of MidWestOne is a strategic move poised to expand market presence and is viewed with high confidence by management regarding its integration and future benefits. These factors, combined with a consistent dividend, indicate strong financial health and a clear growth trajectory, making it an attractive investment.

Keywords

Banking, Financial Services, Community Bank, Earnings, Net Income, EPS, Deposits, Loans, Net Interest Margin, Asset Quality, Merger, Acquisition, MidWestOne, Dividend, Wisconsin, Michigan, Minnesota