10-K: Nicolet Bankshares Reports Record 2025 Earnings, Expands Footprint

Nicolet Bankshares achieved record net income of $151 million in 2025, growing assets to $9.2 billion and completing the MidWest One acquisition.

Summary

• Achieved record net income of $151 million for the year ended December 31, 2025, an increase from $124 million in 2024.
• Reported diluted earnings per common share (EPS) of $9.78 in 2025, up from $8.05 in 2024.
• Total assets grew by 4% to $9.2 billion at December 31, 2025, compared to $8.8 billion at December 31, 2024.
• Total loans increased by 3% to $6.8 billion at December 31, 2025, from $6.6 billion at December 31, 2024.
• Total deposits increased by 4% to $7.7 billion at December 31, 2025, from $7.4 billion at December 31, 2024.
• Stockholders' equity increased by $85 million to $1.3 billion at December 31, 2025.
• Completed the merger with MidWest One Financial Group, Inc. on February 13, 2026, which is expected to increase total assets to approximately $15 billion and double the branch footprint to over 100 locations.
• Net interest income (tax-equivalent basis) increased by 14% to $308 million in 2025, up from $270 million in 2024.
• Net interest margin improved to 3.76% in 2025, compared to 3.47% in 2024.
• Nonperforming assets were $32 million, representing 0.35% of total assets at December 31, 2025, a slight increase from $29 million or 0.33% in 2024.
• The allowance for credit losses-loans (ACL-Loans) was $69 million (1.01% of loans) at December 31, 2025, compared to $66 million (1.00% of loans) at December 31, 2024.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong performance, marked by record earnings, strategic expansion through a significant acquisition, and effective capital management. The anticipated integration "noise" and regulatory adjustments are manageable challenges for a company demonstrating top-tier profitability.

Positives

• Achieved record net income of $151 million and diluted EPS of $9.78 in 2025, demonstrating strong financial performance.
• Experienced robust balance sheet growth with total assets increasing 4%, total loans 3%, and total deposits 4% year-over-year.
• Significantly improved net interest income by 14% and expanded net interest margin by 29 basis points to 3.76% in 2025.
• Successfully completed the strategic acquisition of MidWest One Financial Group, Inc., doubling the branch footprint and expanding into new geographic markets.
• Management successfully executed all four stated priorities for 2025: funding organic growth, share repurchases, increased dividends, and M&A.
• Repurchased over 646,000 shares of common stock in the open market in 2025, reflecting confidence in intrinsic value.
• Increased the quarterly cash dividend by 14% in 2025, benefiting shareholders.
• Maintained solid asset quality trends with negligible net charge-offs across the loan portfolio.
• The Bank is categorized as 'well-capitalized' under the regulatory framework for prompt corrective action.
• Unrealized losses on available-for-sale securities decreased from $66 million in 2024 to $34 million in 2025, indicating favorable market valuation movements.
• Demonstrated commitment to human capital development with employee training hours increasing from 3,997 in 2024 to 8,525 in 2025.
• Achieved almost a 2% reduction in employee turnover compared to the prior year, indicating strong employee retention.
• Received an outstanding Community Reinvestment Act (CRA) rating in its most recent evaluation.

Negatives

• Nonperforming assets slightly increased to $32 million (0.35% of total assets) at year-end 2025 from $29 million (0.33%) in 2024.
• Crossing the $10 billion asset threshold post-MidWest One acquisition will subject the company to increased regulation and compliance costs, including an estimated reduction of over $5 million in card interchange income due to the Durbin amendment.
• Anticipates 'additional noise' in financial results in 2026 due to merger accounting, one-time expenses, and delayed cost savings from the MidWest One systems integration.
• Inflationary pressures and higher interest rates present a potential threat to results of operations and financial condition, potentially affecting borrowers' ability to repay loans and collateral values.
• The loan portfolio is heavily concentrated in Wisconsin, Michigan, and Minnesota, making it vulnerable to adverse regional economic conditions.
• Faces intense competition from traditional banks, internet-based banks, credit unions, and non-bank financial technology providers (FinTech, AI-based services, stablecoins).
• Fraud is identified as a major and increasing operational risk, with evolving sophistication and methods.
• Reliance on information technology and telecommunications systems, including third-party service providers, exposes the company to operational disruptions and cybersecurity risks.
• Competition for management talent is substantial and increasing, potentially leading to higher personnel costs.
• Accounting estimates and risk management processes rely on analytical and forecasting models that may not be accurate, particularly in times of market stress or unforeseen circumstances.
• Political dysfunction and volatility within the federal government create potential for abrupt shifts in policy regarding bank regulation, taxes, and the economy.
• The proportion of uninsured deposits (32% of total deposits at December 31, 2025) may expose the company to enhanced liquidity risk in times of financial distress.

Risks

• Integration of the respective businesses of MidWest One Financial Group, Inc. and Nicolet may be materially delayed or will be more costly or difficult than expected.
• Strategic, market, operating, legal, and regulatory risks, including the effects of legislative or regulatory developments affecting the financial industry generally or Nicolet specifically.
• Negative economic and political conditions that adversely affect the general economy, the banking sector, housing prices, the real estate market, the job market, consumer confidence, the financial condition of borrowers and consumer spending habits.
• Potential fluctuations or unanticipated changes in the interest rate environment, including interest rate changes made by the Federal Reserve, replacement or reform of interest rate benchmarks, as well as cash flow reassessments may reduce net interest margin and/or the volumes and values of loans made or held as well as the value of other financial assets.
• Lack of geographic diversification and any unanticipated or greater than anticipated adverse conditions in the national or local economies in which we operate.
• Loan concentration in industries or sectors that may experience unanticipated or greater than anticipated adverse conditions than other industries or sectors in the national or local economies in which we operate.
• Potential difficulties in identifying and completing future mergers or acquisitions as well as our ability to successfully expand and integrate those businesses that we acquire.
• The risks of expansion into new geographic or product markets.
• Competition from financial institutions and other financial service providers including non-bank financial technology providers and our ability to attract customers from other financial institutions.
• Losses due to fraudulent and negligent conduct of our customers, third-party service providers or employees.
• Volatility in the allowance for credit losses (ACL) resulting from the Current Expected Credit Losses (CECL) methodology.
• Cybersecurity risks and the vulnerability of our network and online banking portals, and the systems or parties with whom we contract, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches.
• Changes in accounting standards, rules and interpretations (including effects on assumptions underlying purchase accounting) and any resulting impact on Nicolet's financial statements.
• Compliance or operational risks related to new products, services, ventures, or lines of business, if any, that Nicolet may pursue or implement.
• The risk that we may be required to make substantial expenditures to keep pace with regulatory initiatives and the rapid technological changes in the financial services market.
• Changes in monetary and tax policies.
• Our ability to attract and retain key personnel.
• Examinations by our regulatory authorities, including the possibility that the regulatory authorities may require us to increase our allowance for credit losses, write-down assets, or take other actions.
• Adverse results (including judgments, costs, fines, reputational harm, inability to obtain necessary approvals and/or other negative effects) from current or future litigation, regulatory proceedings, examinations, investigations, or similar matters or developments related thereto.
• The potential effects of pandemics or public health conditions on the economic and business environments in which we operate.
• The potential effects of events beyond our control that may have a destabilizing effect on financial markets and the economy, such as inflation or recession, weather events, climate change, natural disasters, war or terrorist activities, disruptions in our customers' supply chains, disruptions in transportation, essential utility outages or trade disputes and related tariffs.
• Limitations on our ability to declare and pay dividends and other distributions from the bank to the holding company, which could affect holding company liquidity.
• The risk that Nicolet's analysis of these risks and forces could be incorrect and/or that the strategies developed to address them could be unsuccessful.
• Failure to keep pace with technological changes could adversely affect our business.
• Failure to keep pace with evolving habits of customers in how they use financial services could hinder ongoing customer acquisition and retention efforts.
• Our risk management framework may not be effective in mitigating risks and/or losses.
• Our accounting estimates and risk management processes rely on analytical and forecasting models that may not be accurate.
• The proportion of our deposit account balances that exceed FDIC insurance limits may expose us to enhanced liquidity risk in times of financial distress.
• Unrealized losses in our securities portfolio could negatively affect our liquidity.
• Maintaining liquidity could increase our interest expense.
• A flat or inverted yield curve may reduce our net interest margin and adversely affect our loan and investment portfolios.
• Changes in tax laws, regulations and interpretations or challenges to our income tax provision.
• Our internal controls and procedures may fail or be circumvented.
• Natural disasters and weather-related events exacerbated by climate change could have a negative impact on our results of operations and financial condition.
• Nicolet's corporate organizational documents and the provisions of Wisconsin law to which we are subject contain certain provisions that could have an anti-takeover effect.
• Our stockholders may suffer dilution if we raise capital through public or private equity financings to fund our operations, to increase our capital, or to expand.
• Nicolet's securities are not FDIC insured.

Future Outlook

The U.S. economy is expected to grow at a slightly slower pace in 2026, supported by tax policy, consumer spending, and advancements in artificial intelligence, with unemployment projected to remain low. The Federal Reserve is anticipated to implement two 25 bps rate cuts in 2026. The banking sector enters 2026 with improved sentiment, healthier balance sheets, robust capital, and a more favorable policy backdrop. Nicolet's primary focus for 2026 will be the successful integration of MidWest One, with core system integration delayed until late summer. Additional M&A is unlikely in 2026. The company expects to build capital quickly from mid-single digit organic growth, and the Board will consider further share repurchases and increased dividends. While some 'noise' in financial results is expected in 2026 due to merger accounting and delayed cost savings, core results are anticipated to maintain top quartile profitability.

Management Comments

• "Nicolet announced record net income of $151 million for the year ended December 31, 2025, and earnings per diluted common share of $9.78."
• "Nicolet's Board and executive management viewed 2025 as a year of optionality for the Company."
• "The financial performance of the core franchise placed Nicolet among the top decile of banks in the country, as measured by return on average assets and return on tangible common equity."
• "All four of those priorities [funding organic growth, share repurchases, increased dividends, and M&A] were accomplished in 2025."
• "The MidWest One acquisition... doubled the branch footprint to over 100 locations, as well as expanded our footprint to the state of Iowa, increased our presence in Western Wisconsin, and significantly increased our market share in the greater Twin Cities market."
• "MidWest One answered the $10 billion question that management has been asked for the past several years."
• "Taking our time to ensure a successful integration is paramount to our future growth and success as a company."
• "The Board and executive management believe that the intrinsic value of Nicolet is higher than the current share price, and as a result, believe repurchasing stock is an effective way of deploying capital to benefit existing shareholders."
• "No matter which strategic paths Nicolet's Board and executive team choose in 2026, the Company's priority will always be to operate a highly profitable business that delivers meaningful value to its core stakeholders—customers, shareholders, and employees."

Industry Context

StockSavvy.ai notes that Nicolet's strong 2025 performance, particularly its top decile ranking in ROAA and ROTCE, positions it favorably within a banking sector that is entering 2026 with improved sentiment and robust capital levels. The strategic acquisition of MidWest One, while introducing integration complexities and regulatory adjustments (crossing the $10 billion asset threshold), aligns with the accelerating M&A trend observed in the industry as market conditions improve. The company's focus on organic growth supplemented by strategic acquisitions, alongside its community banking model, contrasts with the increasing competition from larger U.S. banks and FinTech disruptors, which leverage greater resources for technological advancements and digital platforms.

Comparison to Industry Standards

• Nicolet's financial performance, as measured by return on average assets (ROAA) and return on tangible common equity (ROTCE), placed it among the top decile of banks in the country in 2025, indicating superior profitability compared to most peers.
• The company's net interest margin of 3.76% in 2025 is strong, especially given the Federal Reserve's rate cuts in the latter half of the year, suggesting effective asset-liability management relative to industry trends.
• The increase in nonperforming assets to 0.35% of total assets, while slight, warrants monitoring, especially in comparison to industry averages for banks with significant commercial real estate exposure, though Nicolet notes its diversified portfolio and non-major metro market operations have comparatively unaffected it.
• The successful completion of ten acquisitions from 2012 through 2025, culminating in the MidWest One merger, demonstrates a consistent and effective M&A strategy, which is a key differentiator in a consolidating banking industry.

Management Changes

Corporate Governance

Legal Proceedings

• No current legal proceedings are expected to have a material adverse effect on results of operations or financial position.
• The company is party to various pending and threatened claims and legal proceedings arising in the normal course of business activities, continuously assessing potential liability.

Related Party Transactions

• Robert B. Atwell, former Executive Chairman, received consulting fees totaling approximately $812,000 in 2025 and $717,000 in 2024 as an advisor following his transition from active employment.
• Loans to directors, executive officers, and their related interests totaled $130,767 thousand at December 31, 2025, made on substantially the same terms as comparable transactions with unrelated persons.
• A lease for a branch location in a facility owned by a Board member was terminated during 2024; annual rent expense was $230,000 in 2024 and $228,000 in 2023.
• A Board member was awarded the contract as general contractor for the construction of a new branch location, completed in 2024, with approximately $9.5 million paid in 2024 and $2.0 million in 2023.
• A lease for an administrative location in a facility owned by an entity with a controlling ownership interest by another Board member was assumed in August 2022 and terminated in April 2024; rent expense was $37,000 in 2024 and $149,000 in 2023.

Stakeholder Impact

• Shareholders: Benefited from record earnings, a 14% increase in quarterly cash dividends, and significant share repurchases. Potential for future dilution from increased authorized shares and M&A.
• Employees: Supported through competitive wages, comprehensive financial and health benefits (including 401(k) match, profit sharing, ESPP), increased training and development opportunities, and a reduction in turnover.
• Customers: Expanded geographic reach and service offerings through the MidWest One acquisition, with a continued emphasis on personalized service and local decision-making.
• Communities: Engaged through employee volunteer hours (over 20,000 in 2025) and monetary donations to local non-profits via the Nicolet Foundation ($180,000 awarded).
• Creditors: Long-term borrowings are current, and the company maintains strong regulatory capital ratios, providing security for debt holders.

Next Steps

• Successfully integrate MidWest One, with core system conversion planned for late summer 2026.
• Transition all MidWest One locations to the Nicolet Bank name and banner after system conversion.
• The Board will decide on capital allocation strategies, including potential further share repurchases and increased dividends.
• Continue to operate a highly profitable community bank that delivers meaningful value to its core stakeholders.
• Monitor and adjust strategies for evolving economic conditions and the regulatory environment.
• Implement new accounting standards (ASU 2025-08, ASU 2025-06, ASU 2024-03) in future periods as they become effective.

Key Dates

Recommendation

Nicolet Bankshares delivered exceptional financial results in 2025, marked by record net income and diluted EPS, demonstrating robust core profitability and effective management. The successful completion of the MidWest One acquisition significantly expands its market footprint and asset base, positioning the company for future growth despite anticipated integration complexities. Management's proactive approach to capital allocation, including increased dividends and substantial share repurchases, signals confidence in intrinsic value. While regulatory adjustments and integration "noise" are expected, the company's strong capital position, top-decile performance, and strategic clarity make it an attractive investment.

Keywords

Banking, Financial Services, SEC Filing, 10-K, Nicolet Bankshares, MidWest One, Acquisition, Mergers & Acquisitions, Financial Performance, Net Income, EPS, Assets, Deposits, Loans, Credit Quality, Risk Management, Cybersecurity, Regulatory Compliance, Capital Adequacy, Dividends, Stock Repurchase, Interest Rates, Economic Outlook, Wealth Management, Commercial Banking, Agricultural Lending, Wisconsin, Michigan, Minnesota, Iowa, Denver