Nicolet Bankshares, Inc. Announces First Quarter 2019 Earnings

GREEN BAY, Wis., April 16, 2019 /PRNewswire/ -- Nicolet Bankshares, Inc. (NASDAQ: NCBS) ("Nicolet") announced first quarter 2019 net income of $10.3 million and earnings per diluted common share of $1.05, compared to $10.9 million and $1.11 for fourth quarter 2018, and $9.6 million and $0.94 for first quarter 2018, respectively.  Annualized quarterly return on average assets was 1.37%, 1.44% and 1.34%, for first quarter 2019, fourth quarter 2018 and first quarter 2018, respectively.

Nicolet Bankshares, Inc. Logo (PRNewsFoto/Nicolet Bankshares, Inc.)

"We continued to post top tier results in the first quarter," said Bob Atwell, Chairman and CEO of Nicolet.  "There remains room for further improvement, but we will maintain our focus on the long term vision that has been the engine of our remarkable shareholder results."

"Our performance was recently recognized by S&P Global," said Mike Daniels, President and CEO of Nicolet National Bank. "Nicolet was ranked in the top 20 of best-performing banks of 2018 out of all banks with $3-10 billion in assets. While we are proud of such a ranking," Daniels said, "we are still working to get better."

At March 31, 2019, assets were $3.0 billion and deposits were $2.5 billion, each down $0.2 billion compared to a year ago, with March 31, 2018 assets and deposits carrying a $0.3 billion short-term transaction deposit of a long-standing commercial customer.  Assets and deposits were both down slightly from December 31, 2018, reflecting a usual cyclical decline.  Loans were $2.2 billion at March 31, 2019, $89 million or 4% higher than a year ago and $24 million or 4% annualized over year-end 2018.

Quarterly average loans continued on a rising trend, up $65 million or 3% over first quarter 2018 and $37 million or 7% annualized over fourth quarter 2018, while quarterly average deposits funded the growth, increasing $121 million or 5% over the comparable quarter and $39 million or 6% annualized over the linked quarter.

Net income was $10.3 million for the three months ended March 31, 2019, up $0.7 million or 7% higher than the first quarter of 2018.

Net interest income increased $0.6 million or 2%, despite $1.6 million lower aggregate discount income, predominantly attributable to a favorably resolved impaired commercial credit in first quarter 2018. Net interest income and margin improvements, excluding the aggregate discount income between the first quarter periods, benefited from higher average earning assets, improving yields from new and repricing assets in the rising rate environment, and pricing discipline on deposits.  Noninterest income increased $0.4 million (4%), provision for loan losses declined $0.3 million on stronger asset quality, and noninterest expense increased $0.1 million (under 1%) between the first quarter periods.

Net income for first quarter 2019 was down $0.6 million or 5% compared to fourth quarter 2018, largely due to the first quarter having fewer earning days, as well as slower mortgage business and higher expenses that reset in the new year.

Compared to fourth quarter 2018, net interest income increased $0.4 million (2%), with fewer earning days reducing net interest income $0.4 million, though more than offset by favorable volumes and rates, as well as $0.2 million higher aggregate discount income between the linked quarters.  Noninterest income was down $0.6 million or 6% from fourth quarter, led by seasonally lower mortgage volumes.  Noninterest expense increased $1.1 million or 5%, due principally to a $1.2 million (or 11%) increase in personnel expense, slightly offset by a $0.1 million decrease in all other noninterest expenses combined (which included fraud contingency expenses of $0.3 million in first quarter 2019 and $0.5 million in fourth quarter 2018).  The linked quarter increase in personnel expense was mostly due to salary merit increases of $0.2 million (3%), a $0.6 million increase in cash and equity incentives expense (largely resets, compared to adjustments in fourth quarter that lowered incentive amounts), and a $0.4 million increase in 401(k) expense. Income tax expense decreased $0.7 million between the linked quarters, on lower pre-tax income and a lower effective tax rate.

Asset quality remains exceptional. The allowance for loan losses remained at 0.61% of total loans at March 31, 2019.  The provision for loan losses was $0.2 million for first quarter 2019 (with negligible net recoveries), compared to $0.2 million (covering $0.1 million net charge-offs) and $0.5 million (covering $0.4 million net charge-offs) for the fourth and first quarters of 2018, respectively.  Nonperforming assets were $9 million, representing 0.30% of total assets at March 31, 2019.

Total capital was $399 million at March 31, 2019, an increase of $12 million or 3% since December 31, 2018, with first quarter earnings and net fair value investment changes partly offset by stock repurchases.  During first quarter 2019, we utilized $5.6 million to repurchase and cancel approximately 102,700 shares of our common stock pursuant to our common stock repurchase program, compared to full year 2018 repurchase activity of approximately 408,100 common shares for $22.2 million.  On February 19, 2019, our board authorized an increase to the program of $12 million.  As a result, at March 31, 2019, there remained $14.1 million authorized under the repurchase program, as modified, to be utilized from time-to-time to repurchase shares in the open market, through block transactions or in private transactions.

About Nicolet Bankshares, Inc.
Nicolet Bankshares, Inc. is the bank holding company of Nicolet National Bank, a growing, full-service, community bank providing services ranging from commercial and consumer banking to wealth management and retirement plan services.  Founded in Green Bay in 2000, Nicolet National Bank operates branches in Northeast and Central Wisconsin and the upper peninsula of Michigan.  More information can be found at www.nicoletbank.com.

Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities law.  Statements in this release that are not strictly historical are forward-looking and based upon current expectations that may differ materially from actual results.  These forward-looking statements, identified by words such as "will", "expect", "believe" and "prospects", involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statement made herein.  These risks and uncertainties include, but are not limited to, general economic trends and changes in interest rates, increased competition, regulatory or legislative developments affecting the financial industry generally or Nicolet specifically, the interpretation of tax legislation, changes in consumer demand for financial services, the possibility of unforeseen events affecting the industry generally or Nicolet specifically, the uncertainties associated with newly developed or acquired operations and market disruptions.  Nicolet undertakes no obligation to release revisions to these forward-looking statements publicly to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.

 

Nicolet Bankshares, Inc.






Consolidated Financial Summary (Unaudited)








At or for the Three Months Ended

(In thousands, except per share data)


3/31/2019


12/31/2018


9/30/2018


6/30/2018


3/31/2018

Results of operations:











Interest income


$

33,159



$

32,327



$

31,880



$

30,545



$

30,785


Interest expense


5,684



5,298



4,938



4,742



3,911


Net interest income


27,475



27,029



26,942



25,803



26,874


Provision for loan losses


200



240



340



510



510


Net interest income after provision for loan losses


27,275



26,789



26,602



25,293



26,364


Noninterest income


9,186



9,797



10,649



10,239



8,824


Noninterest expense


22,759



21,621



23,044



22,451



22,642


Income before income tax expense


13,702



14,965



14,207



13,081



12,546


Income tax expense


3,352



4,015



3,268



3,255



2,908


Net income


10,350



10,950



10,939



9,826



9,638


Net income attributable to noncontrolling interest


83



87



80



89



61


Net income attributable to Nicolet Bankshares, Inc.


$

10,267



$

10,863



$

10,859



$

9,737



$

9,577


Earnings per common share:











Basic


$

1.09



$

1.14



$

1.13



$

1.01



$

0.98


Diluted


$

1.05



$

1.11



$

1.09



$

0.98



$

0.94


Common Shares:











Basic weighted average


9,461



9,526



9,633



9,639



9,765


Diluted weighted average


9,758



9,814



9,949



9,970



10,225


Outstanding


9,431



9,495



9,577



9,643



9,699


Noninterest Income:











Trust services fee income


$

1,468



$

1,583



$

1,638



$

1,671



$

1,606


Brokerage fee income


1,810



1,968



1,732



1,738



1,604


Mortgage income, net


1,203



1,834



1,902



1,528



1,080


Service charges on deposit accounts


1,170



1,208



1,247



1,200



1,190


Card interchange income


1,420



1,583



1,481



1,358



1,243


Other noninterest income


1,943



1,774



2,503



1,772



1,897


Noninterest income without net gains


9,014



9,950



10,503



9,267



8,620


Asset gains (losses), net


172



(153)



146



972



204


Total noninterest income


$

9,186



$

9,797



$

10,649



$

10,239



$

8,824


Noninterest Expense:











Personnel expense


$

12,537



$

11,327



$

12,983



$

12,674



$

12,492


Occupancy, equipment and office


3,750



3,673



3,660



3,454



3,787


Business development and marketing


1,281



1,185



1,334



1,463



1,342


Data processing


2,355



2,420



2,375



2,399



2,320


Intangibles amortization


1,053



1,053



1,054



1,100



1,182


Other noninterest expense


1,783



1,963



1,638



1,361



1,519


Total noninterest expense


$

22,759



$

21,621



$

23,044



$

22,451



$

22,642


 

Nicolet Bankshares, Inc.







Consolidated Financial Summary (Unaudited) - Continued









At or for the Three Months Ended

(In thousands, except per share data)


3/31/2019


12/31/2018


9/30/2018


6/30/2018


3/31/2018

Period-End Balances:











Loans


$

2,189,688



$

2,166,181



$

2,143,457



$

2,128,624



$

2,100,597


Allowance for loan losses


13,370



13,153



12,992



12,875



12,765


Investment securities available-for-sale, at fair value


407,693



400,144



410,911



401,975



401,130


Goodwill and other intangibles, net


123,254



124,307



125,360



126,124



127,224


Total assets


3,041,091



3,096,535



3,000,902



2,922,151



3,223,935


Deposits


2,538,486



2,614,138



2,522,156



2,455,536



2,765,090


Stockholders' equity


398,767



386,609



377,171



370,584



363,988


Book value per common share


42.28



40.72



39.38



38.43



37.53


Tangible book value per common share (1)


29.21



27.62



26.29



25.35



24.41


Average Balances:











Loans


$

2,179,420



$

2,142,870



$

2,134,448



$

2,117,828



$

2,114,345


Interest-earning assets


2,734,936



2,693,752



2,664,316



2,742,976



2,584,070


Total assets


3,047,068



2,996,553



2,971,247



3,044,466



2,896,533


Deposits


2,556,927



2,518,378



2,497,439



2,583,112



2,436,103


Interest-bearing liabilities


1,946,210



1,867,327



1,931,119



2,084,361



1,925,443


Goodwill and other intangibles, net


123,892



124,930



125,798



126,646



127,801


Stockholders' equity


391,027



379,846



375,507



364,988



366,002


Financial Ratios: (2)











Return on average assets


1.37

%


1.44

%


1.45

%


1.28

%


1.34

%

Return on average common equity


10.65



11.35



11.47



10.70



10.61


Return on average tangible common equity (1)


15.59



16.91



17.25



16.39



16.31


Average equity to average assets


12.83



12.68



12.64



11.99



12.64


Stockholders' equity to assets


13.11



12.49



12.57



12.68



11.29


Tangible common equity to tangible assets (1)


9.44



8.83



8.76



8.74



7.65


Loan yield


5.51



5.38



5.35



5.10



5.39


Earning asset yield


4.89



4.76



4.75



4.46



4.81


Cost of interest-bearing deposits


1.04



0.98



0.87



0.77



0.68


Cost of funds


1.18



1.12



1.01



0.91



0.82


Net interest margin


4.05



3.98



4.02



3.77



4.20


Net loan charge-offs to average loans


(0.00)



0.01



0.04



0.08



0.08


Nonperforming loans to total loans


0.40



0.25



0.48



0.51



0.56


Nonperforming assets to total assets


0.30



0.19



0.38



0.41



0.40


Allowance for loan losses to loans


0.61



0.61



0.61



0.60



0.61


Effective tax rate


24.46



26.83



23.00



24.88



23.18


Selected Items:











Interest income from resolving PCI loans (rounded)


$

200



$

100



$

300



$

100



$

1,500


Tax-equivalent adjustment on net interest income


272



278



285



289



298




1

The ratios of tangible book value per common share, return on average tangible common equity, and tangible common equity to tangible assets exclude goodwill and other intangibles, net.  These financial ratios have been included as they are considered to be critical metrics with which to analyze and evaluate financial condition and capital strength.

2

Income statement-related ratios for partial-year periods are annualized.

 

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SOURCE Nicolet Bankshares, Inc.

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