Nicolet Bankshares Inc. Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. Nicolet Bankshares, Inc. is a bank holding company headquartered in Green Bay, Wisconsin, operating primarily in Wisconsin, Michigan, Iowa, and Minnesota. The reporting period is significantly impacted by the completion of the acquisition of MidWest One Financial Group, Inc. on February 13, 2026. This transaction involved the issuance of approximately 6.6 million shares of Nicolet common stock valued at roughly $1.0 billion, expanding Nicolet to one of the largest community banks in the Upper Midwest.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 | Dec 31, 2025 (YoY) |
|---|---|---|---|
| Total Assets | $15.57 billion | $8.98 billion | $9.19 billion |
| Total Loans | $10.88 billion | $6.75 billion | $6.84 billion |
| Total Deposits | $12.62 billion | $7.57 billion | $7.73 billion |
| Net Interest Income | $109.6 million | $71.2 million | $80.9 million |
| Net Income (GAAP) | $15.2 million | $32.6 million | $40.3 million |
| Diluted EPS (GAAP) | $0.81 | $2.08 | $2.65 |
| Core Net Income (Non-GAAP) | $51.5 million | $32.9 million | $41.6 million |
| Core Diluted EPS (Non-GAAP) | $2.75 | $2.10 | $2.73 |
| Net Interest Margin | 3.98% | 3.58% | 3.98% (Q4 2025) |
| Allowance for Credit Losses (Loans) | $133.4 million (1.23% of loans) | $67.5 million (1.00% of loans) | $68.8 million (1.01% of loans) |
| Stockholders' Equity | $2.26 billion | $1.18 billion | $1.26 billion |
Material Changes vs. Prior Period
- Balance Sheet Expansion: Total assets increased 70% year-over-year and 70% from the prior quarter, driven almost entirely by the MidWest One acquisition. Loans grew 59% and deposits grew 63% compared to Q1 2025.
- Earnings Volatility: GAAP Net Income decreased 53% compared to Q1 2025 ($15.2M vs. $32.6M) and 62% compared to Q4 2025. This decline is primarily due to $40.7 million in merger-related expenses and a $4.7 million provision for credit losses on unfunded commitments related to the acquisition.
- Non-GAAP Performance: Excluding merger costs and other adjustments, Core Net Income increased 57% year-over-year to $51.5 million, reflecting strong underlying operational growth.
- Expense Growth: Total noninterest expense rose 130% year-over-year to $110 million. Personnel costs increased 44% due to the expanded workforce, while intangible amortization increased 164% due to new assets from the acquisition.
- Asset Quality: Nonperforming assets increased to $79.5 million (0.51% of total assets) from $29.3 million in Q1 2025, largely attributable to the acquired portfolio. The allowance for credit losses increased to 1.23% of total loans.
Guidance, Outlook, and Risks
- Subsequent Event: On April 21, 2026, Nicolet entered into an agreement to sell its Denver, Colorado banking branches (acquired from MidWest One) to Sunwest Bank. The transaction is expected to close in Q3 2026. These branches held approximately $390 million in loans and $380 million in deposits, currently classified as held for sale.
- Capital Management: The company remains well-capitalized. As of March 31, 2026, the Bank's regulatory capital ratios qualify it as "well-capitalized." Approximately $57 million remains authorized under the common stock repurchase program.
- Accounting Changes: In Q1 2026, the company transitioned its Allowance for Credit Losses (ACL) methodology from a historical loss rate method to a discounted cash flow (DCF) method for segmented loan pools. The company also early-adopted ASU 2025-08 regarding purchased seasoned loans.
- Risks: Key risks include the successful integration of MidWest One, potential fluctuations in interest rates impacting net interest income, and general economic conditions affecting credit quality. The company notes that forward-looking statements are subject to uncertainties regarding regulatory approvals and market conditions.
Investor Verification Checklist
- Merger Integration Costs: Verify the run-rate of merger-related expenses and the timeline for realizing anticipated cost synergies.
- Denver Branch Divestiture: Monitor the closing of the Sunwest Bank transaction and the impact on the balance sheet and revenue streams.
- Asset Quality Trends: Track the performance of the acquired MidWest One loan portfolio, specifically nonperforming assets and charge-offs, to ensure they align with purchase accounting assumptions.
- Core Earnings Sustainability: Assess whether the growth in Core Net Income (Non-GAAP) is sustainable once the one-time acquisition impacts are fully integrated.
- Deposit Composition: Review the stability of the new deposit base, particularly the mix of core versus brokered deposits, to evaluate funding cost stability.