8-K: Nicolet Bankshares Reports Record Q3 2025 Earnings

Nicolet Bankshares, Inc. announced record net income of $42 million for the third quarter of 2025, marking its 25th anniversary with strong financial performance.

Summary

• Net income reached a record $42 million for the third quarter of 2025, an increase from $36 million in the prior quarter and $33 million in the third quarter of 2024.
• Earnings per diluted common share were $2.73 for Q3 2025, up from $2.34 in Q2 2025 and $2.10 in Q3 2024.
• The quarterly net interest margin improved to 3.86%, an increase of 14 basis points over the prior quarter's 3.72%.
• Core deposits experienced exceptional quarter-over-quarter growth of $223 million, representing a 13% annualized increase.
• The company repurchased 155,393 common shares for $21 million during the third quarter of 2025.
• Period-end assets totaled $9.0 billion at September 30, 2025, an increase of $99 million from June 30, 2025, driven by higher cash balances and loan growth.
• Total loans increased by $36 million from June 30, 2025, primarily in construction and agricultural loan categories.
• Total deposits were $7.6 billion at September 30, 2025, an increase of $70 million from June 30, 2025, with core deposits rising $223 million, partly offset by a $153 million decrease in brokered deposits.
• Total capital stood at $1.2 billion at September 30, 2025, an increase of $25 million over June 30, 2025, supported by record earnings and favorable movements in the securities portfolio market valuation, partially offset by common stock repurchases and dividends.
• Nonperforming assets were $28 million, representing 0.31% of total assets at September 30, 2025, consistent with prior periods.
• The allowance for credit losses-loans was $69 million, representing 1.00% of total loans at September 30, 2025, maintaining consistency with previous quarters.
• Net interest income for Q3 2025 was $79 million, $4 million higher than Q2 2025, mainly due to an additional earning day and reduced noncore funding.
• Noninterest income increased by $3 million to $24 million for Q3 2025, primarily due to a $1.5 million favorable change in net asset gains from equity security market valuations, an $0.8 million increase in wealth income, and $0.7 million higher net mortgage income.
• Noninterest expense was $50 million for Q3 2025, a slight increase from Q2 2025, including a $0.3 million rise in personnel expense partly offset by a $0.2 million decrease in non-personnel related expenses.

Sentiment

Score: 9

Explanation: The company reported record net income, strong growth in core deposits, an improved net interest margin, and robust asset quality. Management expressed significant optimism and highlighted top-decile performance metrics, indicating exceptional financial health and operational success.

Positives

• Achieved record net income of $42 million for the third quarter of 2025.
• Reported increased earnings per diluted common share of $2.73.
• Net interest margin improved significantly by 14 basis points to 3.86%.
• Demonstrated exceptional core deposit growth of $223 million, an annualized rate of 13%.
• Maintained solid asset quality with nonperforming assets at 0.31% of total assets and negligible net loan charge-offs.
• Return on Average Assets of 1.84% and Return on Average Tangible Common Equity of 20.42% are expected to place the company in the top decile of banks nationally.
• Successfully executed a common stock repurchase program, buying back $21 million in shares during the quarter.
• Experienced growth in noninterest income, driven by a $1.5 million favorable change in net asset gains from equity security market valuations, an $0.8 million increase in wealth income, and $0.7 million higher net mortgage income.

Negatives

• Brokered deposits decreased by $153 million, although this was more than offset by growth in core deposits.
• Noninterest expense saw a slight increase, primarily due to higher personnel expense, despite some offsetting reductions in other categories.

Future Outlook

Management expresses significant momentum and continued optimism for Nicolet as a top-tier community bank and for community banking in general, attributing strong results to the hard work of employees, customers, and communities.

Management Comments

• "I must admit, I got a bit nostalgic thinking about what I would say in this press release."
• "Nicolet's 25th anniversary is November 1st, and I still vividly remember sitting in my basement discussing what Nicolet should look like with my co-founder."
• "When we were younger, we learned that banking should be about relationships and mattering to your customers and communities."
• "I think the smartest thing we did was to make Nicolet a reflection of what we believed, and what we knew worked."
• "In a way, Nicolet is a 25-year case study that shows that working hard to create shared success between customers, communities, and employees creates positive if not superior shareholder results."
• "That philosophy ran counter to the industry 25 years ago and still does to a degree today. We didn't set out to be contrarian. We set out to be ourselves."
• "We just produced some of the best quarterly financial metrics in our history, with a Return on Average Assets and Return on Average Tangible Common Equity that should easily put us in the top decile of banks in the country."
• "The off-the-charts results we are reporting today are directly related to the hard work of our employees, customers, and communities, all striving to do the right thing for one another."
• "I feel like we have significant momentum right now, which leads to my continued optimism for Nicolet as a top-tier community bank, as well as community banking in general."

Industry Context

Nicolet Bankshares operates as a community bank, emphasizing relationships and shared success with customers, communities, and employees. This approach, which management notes ran counter to industry trends 25 years ago and still does to a degree, is presented as a successful model for achieving superior shareholder results. The company aims to be a top-tier community bank, suggesting a focus on localized, relationship-driven banking in a broader industry that may be more commoditized or transaction-focused.

Comparison to Industry Standards

• Return on Average Assets (1.84%) and Return on Average Tangible Common Equity (20.42%) are expected to "easily put us in the top decile of banks in the country," indicating superior performance compared to a significant majority of industry peers.
• The company's philosophy of fostering shared success among customers, communities, and employees is highlighted as a "25-year case study" demonstrating "positive if not superior shareholder results," suggesting a differentiated and effective strategy compared to conventional banking models.

Stakeholder Impact

• Shareholders: Positive impact due to record earnings, increased EPS, share repurchases, and strong financial ratios (ROAA, ROATCE), indicating enhanced shareholder value.
• Customers: Positive impact implied by management's philosophy of 'mattering to your customers' and 'shared success,' suggesting a focus on customer satisfaction and beneficial relationships.
• Employees: Positive impact implied by management's philosophy of 'shared success' and recognition of 'hard work of our employees,' suggesting a supportive work environment and alignment of interests.
• Communities: Positive impact implied by management's philosophy of 'mattering to your communities' and 'shared success,' indicating a commitment to local development and engagement.

Key Dates

Recommendation

Nicolet Bankshares delivered an exceptional quarter, reporting record net income and diluted EPS, significant improvement in net interest margin, and robust core deposit growth. The company's asset quality remains solid with negligible charge-offs. Management's commentary highlights top-decile performance metrics (ROAA, ROATCE) and a strong, relationship-based banking philosophy that has consistently yielded superior shareholder results over 25 years. The ongoing share repurchase program further demonstrates confidence and commitment to shareholder value. These strong fundamentals and positive outlook make it a compelling investment.

Keywords

Nicolet Bankshares, NIC, Earnings Report, Q3 2025, Financial Results, Banking, Community Bank, Net Income, EPS, Net Interest Margin, Deposit Growth, Loan Growth, Share Repurchase, Asset Quality, Wealth Management, Mortgage Income