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What changed in NICOLET BANKSHARES INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of NICOLET BANKSHARES INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+271 added−286 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-25)

Top changes in NICOLET BANKSHARES INC's 2025 10-K

271 paragraphs added · 286 removed · 202 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

40 edited+18 added−14 removed86 unchanged
Biggest changeIn addition, any capital loans made by Nicolet to the Bank will be repaid only after the Bank’s deposits and various other obligations are repaid in full. Capital Adequacy . Nicolet is subject to capital requirements applied on a consolidated basis, which are substantially similar to those required of the Bank, which are summarized under “Regulation of the Bank” below.
Biggest changeNicolet is subject to capital requirements applied on a consolidated basis, which are substantially similar to those required of the Bank, which are summarized under “Regulation of the Bank” below. Payment of Dividends . The Parent Company is a legal entity separate and distinct from the Bank and other subsidiaries.
National banks are required by the National Bank Act to adhere to branching laws applicable to state banks in the states in which they are located.
Branching. National banks are required by the National Bank Act to adhere to branching laws applicable to state banks in the states in which they are located.
Many of Nicolet’s competitors may enjoy competitive advantages, including greater financial resources, fewer regulatory requirements, broader geographic presence, more accessible branches or more advanced technology to deliver products or services, more favorable pricing alternatives and lower origination or operating costs. We believe our competitive pricing, personalized service and community engagement enable us to effectively compete in our markets.
Many of 6 Nicolet’s competitors may enjoy competitive advantages, including greater financial resources, fewer regulatory requirements, broader geographic presence, more accessible branches or more advanced technology to deliver products or services, more favorable pricing alternatives and lower origination or operating costs. We believe our competitive pricing, personalized service and community engagement enable us to effectively compete in our markets.
A “well-capitalized” bank is one that is not required to meet and maintain a specific capital level for any capital measure pursuant to any written agreement, order, capital directive, or prompt corrective action directive, and has a total risk-based capital ratio of at 9 least 10%, a Tier 1 risk-based capital ratio of at least 8%, a CET1 capital ratio of at least 6.5%, and a Tier 1 leverage ratio of at least 5%.
A “well-capitalized” bank is one that is not required to meet and maintain a specific capital level for any capital measure pursuant to any written agreement, order, capital directive, or prompt corrective action directive, and has a total risk-based capital ratio of at least 10%, a Tier 1 risk-based capital ratio of at least 8%, a CET1 capital ratio of at least 6.5%, and a Tier 1 leverage ratio of at least 5%.
Failure to meet capital guidelines could subject a bank or bank holding company to a variety of enforcement remedies, including issuance of a capital directive, the termination of deposit insurance by the FDIC, a prohibition on accepting brokered deposits, and certain other restrictions on its business. See “Prompt Corrective Action” below. Prompt Corrective Action.
Failure to meet capital guidelines could subject a bank or bank holding company to a variety of enforcement remedies, including issuance of a capital directive, the termination of deposit insurance by the FDIC, a prohibition on accepting brokered deposits, and certain other restrictions on its business. See “Prompt Corrective Action” below. 9 Prompt Corrective Action.
Nicolet conducts its primary operations through its wholly owned subsidiary, Nicolet National Bank, a commercial bank which was organized in 2000 as a national bank under the laws of the United States and opened for business in Green Bay, Wisconsin, on November 1, 2000 (referred to herein as the “Bank”).
Principal Business Nicolet conducts its primary operations through its wholly owned subsidiary, Nicolet National Bank, a commercial bank which was organized in 2000 as a national bank under the laws of the United States and opened for business in Green Bay, Wisconsin, on November 1, 2000 (referred to herein as the “Bank”).
Nicolet believes it further distinguishes itself by providing a range of products and services characteristic of a large financial institution while providing the personalized service and convenience characteristic of a local, community bank. 6 Supervision and Regulation We are extensively regulated, supervised and examined under federal and state law.
Nicolet believes it further distinguishes itself by providing a range of products and services characteristic of a large financial institution while providing the personalized service and convenience characteristic of a local, community bank. Supervision and Regulation We are extensively regulated, supervised and examined under federal and state law.
Under Wisconsin law and the Dodd-Frank Act, and with the prior approval of the OCC, the Bank may 8 open branch offices within or outside of Wisconsin, provided that a state bank chartered by the state in which the branch is to be located would also be permitted to establish a branch.
Under Wisconsin law and the Dodd-Frank Act, and with the prior approval of the OCC, the Bank may open branch offices within or outside of Wisconsin, provided that a state bank chartered by the state in which the branch is to be located would also be permitted to establish a branch.
At December 31, 2024, the Parent Company also wholly owns a registered investment advisory firm, Nicolet Advisory Services, LLC (“Nicolet Advisory”), that provides brokerage and investment advisory services to customers, and Nicolet Insurance Services, LLC (“Nicolet Insurance”), to facilitate the delivery of a crop insurance product associated with Nicolet’s agricultural lending.
At December 31, 2025, the Parent Company also wholly owns a registered investment advisory firm, Nicolet Advisory Services, LLC (“Nicolet Advisory”), that provides brokerage and investment advisory services to customers, and Nicolet Insurance Services, LLC (“Nicolet Insurance”), to facilitate the delivery of a crop insurance product associated with Nicolet’s agricultural lending.
As of December 31, 2024, the Bank satisfied the requirements of “well-capitalized” under the regulatory framework for prompt corrective action. See Note 17, “Regulatory Capital Requirements,” in the Notes to Consolidated Financial Statements, under Part II, Item 8, for regulatory capital ratios of Nicolet and the Bank.
As of December 31, 2025, the Bank satisfied the requirements of “well-capitalized” under the regulatory framework for prompt corrective action. See Note 17, “Regulatory Capital Requirements,” in the Notes to Consolidated Financial Statements, under Part II, Item 8, for regulatory capital ratios of Nicolet and the Bank.
To assist employees reach their goals, Nicolet offers competitive wages and a comprehensive financial benefit package that includes offerings such as (1) a 401(k) plan with a dollar-for-dollar match of employee contributions up to 6%, (2) health savings accounts for employees who elect to participate in high-deductible health plans, (3) flexible spending accounts, (4) profit sharing contributions to the 401(k) plan, (5) paid life insurance, (6) an employee stock purchase plan, and (7) discounted wealth services.
To help employees reach their personal goals, Nicolet offers competitive wages and a comprehensive financial benefit package that includes offerings such as (1) a 401(k) plan with a dollar-for-dollar match of employee contributions up to 6%, (2) health plan coverage, including health savings accounts for employees who elect to participate in high-deductible health plans, (3) flexible spending accounts, (4) profit sharing contributions to the 401(k) plan, (5) paid life insurance, (6) an employee stock purchase plan, and (7) discounted wealth services.
(individually referred to herein as the “Parent Company” and together with all its subsidiaries collectively referred to herein as “Nicolet,” the “Company,” “we,” “us” or “our”) is a registered bank holding company under the Bank Holding Company Act of 1956, as amended, and under the bank holding company laws of the State of Wisconsin.
(individually referred to herein as the “Parent Company” and together with all its subsidiaries collectively referred to herein as “Nicolet,” the “Company,” “we,” “us” or “our”) is a registered bank and financial holding company under the Bank Holding Company Act of 1956, as amended (the “Bank Holding Company Act”), and under the bank holding company laws of the State of Wisconsin.
The cost of premium assessments are impacted by, among other things, a bank’s capital category under the prompt corrective action system. Commercial Real Estate Lending.
The cost of premium assessments is impacted by, among other things, a bank’s capital category under the prompt corrective action system. Commercial Real Estate Lending.
At December 31, 2024, the Bank wholly owns an investment subsidiary based in Nevada and an entity that owns the building in which Nicolet is headquartered.
At December 31, 2025, the Bank wholly owns an investment subsidiary based in Nevada and an entity that owns the building in which Nicolet is headquartered.
At December 31, 2024, the Bank’s commercial real estate lending levels are below the guidance levels noted above. Enforcement Powers .
At December 31, 2025, the Bank’s commercial real estate lending levels are below the guidance levels noted above. Enforcement Powers .
Provisions of the Gramm-Leach-Bliley Act have 7 expanded the permissible activities of a bank holding company that qualifies as a financial holding company to engage in activities that are financial in nature or incidental or complementary to financial activities. Those activities include, among other activities, certain insurance, advisory and security activities.
Provisions of the Bank Holding Company Act have expanded the permissible activities of a bank holding company that qualifies as a financial holding company to engage in activities that are financial in nature or incidental or complementary to financial activities. Those activities include, among other activities, certain insurance, advisory and security activities.
Human Capital Resources To attract and retain top talent, Nicolet is committed to support the well-being and development of each employee in a collaborative and inclusive environment.
Human Capital Resources Nicolet is committed to support the well-being and development of each employee in a collaborative and inclusive environment.
Depository institutions with less than $10 billion in assets, such as the Bank, are subject to rules promulgated by the CFPB but will continue to be examined and supervised by federal banking regulators for consumer compliance purposes. As the Bank approaches the $10 billion asset threshold, the Bank is preparing to be examined by the CFPB. 11 UDAP and UDAAP.
Depository institutions with less than $10 billion in assets are subject to rules promulgated by the CFPB but will continue to be examined and supervised by federal banking regulators for consumer compliance purposes. As the 11 Bank approached the $10 billion asset threshold, the Bank prepared to be examined by the CFPB.
Failure to adequately meet these criteria could impose additional requirements and limitations on the Bank. Additionally, the Bank must publicly disclose the terms of various Community Reinvestment Act-related agreements. The Bank received an “outstanding” CRA rating in its most recent evaluation.
Failure to adequately meet these 10 criteria could impose additional requirements and limitations on the Bank. Additionally, the Bank must publicly disclose the terms of various Community Reinvestment Act-related agreements. The Bank received an “outstanding” CRA rating in its most recent evaluation. Payment of Dividends. Statutory and regulatory limitations apply to the Bank’s payment of dividends to the Parent Company.
During 2024 and 2023, the Parent Company declared quarterly cash dividends on its common stock totaling $1.09 and $0.75 per share, respectively. The Holding Company did not pay cash dividends on its common stock prior to 2023. Stock Buybacks and Other Capital Redemptions.
During 2025, 2024, and 2023, the Parent Company declared quarterly cash dividends on its common stock totaling $1.24, $1.09, and $0.75 per share, respectively. Stock Buybacks and Other Capital Redemptions.
At December 31, 2024, Nicolet had total assets of $8.8 billion, loans of $6.6 billion, deposits of $7.4 billion and total stockholders’ equity of $1.2 billion. For the year ended December 31, 2024, Nicolet earned net income of $124 million, or $8.05 per diluted common share.
At December 31, 2025, Nicolet had total assets of $9.2 billion, loans of $6.8 billion, deposits of $7.7 billion and total stockholders’ equity of $1.3 billion. For the year ended December 31, 2025, Nicolet earned record net income of $151 million, or $9.78 per diluted common share.
Nicolet’s profitability is significantly dependent upon net interest income (interest income earned on loans and other interest-earning assets such as investments, net of interest expense on deposits and other borrowed funds), and noninterest income sources (including but not limited to service charges on deposits, trust and brokerage fees, card interchange income, and mortgage income from sales of residential mortgages into the secondary market), offset by the level of the provision for credit losses, noninterest expense (largely employee compensation and overhead expenses tied to processing and operating the Bank’s business), and income taxes.
Other than the Bank, these subsidiaries are closely related to or incidental to the business of banking and none are individually or collectively significant to Nicolet’s financial position or results as of December 31, 2025. 4 Nicolet’s profitability is significantly dependent upon net interest income (interest income earned on loans and other interest-earning assets such as investments, net of interest expense on deposits and other borrowed funds), and noninterest income sources (including but not limited to service charges on deposits, trust and brokerage fees, card interchange income, and mortgage income from sales of residential mortgages into the secondary market), offset by the level of the provision for credit losses, noninterest expense (largely employee compensation and overhead expenses tied to processing and operating the Bank’s business), and income taxes.
Under the Change in Bank Control Act, a person or company is required to file a notice with the Federal Reserve if it will, as a result of the transaction, own or control 10% or more of any class of voting securities or direct the management or policies of a bank or bank holding company and either if the bank or bank holding company has registered securities or if the acquirer would be the largest holder of that class of voting securities after the acquisition.
Under Federal Reserve regulations, investors can hold up to 24.9% of the voting securities and up to 33% of the total equity of a company without necessarily having a controlling influence. 7 Under the Change in Bank Control Act, a person or company is required to file a notice with the Federal Reserve if it will, as a result of the transaction, own or control 10% or more of any class of voting securities or direct the management or policies of a bank or bank holding company and either if the bank or bank holding company has registered securities or if the acquirer would be the largest holder of that class of voting securities after the acquisition.
There are statutory and regulatory requirements applicable to the payment of dividends and other distributions by the Bank, as well as by the Parent Company to its shareholders. In 2023, we began paying dividends on our common stock. During 2024, 2023, and 2022, the Bank paid dividends to the Parent Company of $100 million, $70 million, and $70 million, respectively.
There are statutory and regulatory requirements applicable to the payment of dividends and other distributions by the Bank, as well as by the Parent Company to its shareholders. During 2025, 2024, and 2023, the Bank paid dividends to the Parent Company of $120 million, $100 million, and $70 million, respectively.
Payment of Dividends . The Parent Company is a legal entity separate and distinct from the Bank and other subsidiaries. The Parent Company’s principal source of cash flow, including cash flow to pay dividends on our stock or to pay principal and interest on debt securities is dividends paid to it by the Bank.
The Parent Company’s principal source of cash flow, including cash flow to pay dividends on our stock or to pay principal and interest on debt securities is dividends paid to it by the Bank.
Statutory and regulatory limitations apply to the Bank’s payment of dividends to the Parent Company. If, in the opinion of the OCC, the Bank were engaged in or about to engage in an unsafe or unsound practice, the OCC could require that the Bank stop or refrain from engaging in the practice.
If, in the opinion of the OCC, the Bank were engaged in or about to engage in an unsafe or unsound practice, the OCC could require that the Bank stop or refrain from engaging in the practice.
We cannot predict the effect that fiscal or monetary policies, or new federal or state legislation or regulation may have on the future business and earnings of Nicolet or the Bank.
We cannot predict the effect that fiscal or monetary policies, or new federal or state legislation or regulation may have on the future business and earnings of Nicolet or the Bank. Regulation of Nicolet Because Nicolet owns all of the capital stock of the Bank, it is a bank holding company under the federal Bank Holding Company Act.
Additionally, trust, brokerage and other investment management services predominantly for individuals and retirement plan services for business customers are offered. Nicolet delivers its products and services principally through 57 bank branch locations, online banking, mobile banking and an interactive website. Nicolet’s call center also services customers.
Additionally, trust, brokerage and other investment management services predominantly for individuals and retirement plan services for business customers are offered. Nicolet delivers its products and services principally through 57 bank branch locations at year-end 2025 (and an additional 57 branch locations following the consummation of the MidWest One acquisition), online banking, mobile banking and an interactive website.
The Financial Institution Reform Recovery and Enforcement Act (“FIRREA”) expanded and increased civil and criminal penalties available for use by the federal regulatory agencies against depository institutions and certain “institution-affiliated parties.” Institution-affiliated parties primarily include management, employees, and agents of a financial institution, as well as independent contractors and consultants such as attorneys, accountants and others who participate in the conduct of the financial institution’s affairs.
The federal regulatory agencies possess a broad array of civil and criminal penalties, including formal and informal enforcement authority with regard to depository institutions and certain “institution-affiliated parties.” Institution-affiliated parties primarily include management, employees, and agents of a financial institution, as well as independent contractors and consultants such as attorneys, accountants and others who participate in the conduct of the financial institution’s affairs.
Our mission is to be the lead community bank within the communities we serve, while our vision is to optimize the long-term return to our customers and communities, employees and shareholders (the “3 Circles”).
Our mission is to be the lead community bank within the communities we serve, while our vision is to optimize the long-term return to our customers and communities, employees and shareholders (the “3 Circles”). Recent Development – Acquisition of MidWest One On February 13, 2026, we completed the merger with MidWest One Financial Group, Inc.
For information on recent transactions, see Note 2, “Acquisition,” of the Notes to Consolidated Financial Statements under Part II, Item 8. 4 Products and Services Overview Nicolet’s principal business is banking, consisting of lending and deposit gathering, as well as ancillary banking-related products and services, to businesses and individuals of the communities it serves, and the operational support to deliver, fund and manage such banking products and services.
Products and Services Overview Nicolet’s principal business is banking, consisting of lending and deposit gathering, as well as ancillary banking-related products and services, to businesses and individuals of the communities it serves, and the operational support to deliver, fund and manage such banking products and services.
In addition, employees donated over $190,000 to the Nicolet Foundation (which was matched by Nicolet) and donated to local non-profits - all of whom are nominated by employees and selected by a committee of employees. Be Entrepreneurial We encourage employees to develop their professional skills and advance in their career.
In addition, through employee monetary donations to the Nicolet Foundation (matched by Nicolet), Nicolet’s employee-run allocations committee awarded more than $180,000 to local non-profits identified by employees and selected by a committee of employees. Be Entrepreneurial We encourage employees to develop their professional skills and advance in their career.
Support of Subsidiary Institutions . Under Federal Reserve policy and the Dodd-Frank Act, Nicolet is expected to act as a source of financial strength for the Bank and to commit resources to support the Bank. This support may be required at times when, without this Federal Reserve policy or the related rules, Nicolet might not be inclined to provide it.
Support of Subsidiary Institutions . Under Federal Reserve policy and the Bank Holding Company Act, Nicolet is expected to act as a source of financial strength for the Bank and to commit resources to support the Bank.
Nicolet markets its services to owner-managed companies, the individual owners of these businesses, and other residents within its market areas. At December 31, 2024, our network consisted of 57 branches located principally within our geographic market areas. The financial services industry is highly competitive. Nicolet competes for loans, deposits and wealth management or financial services in all its principal markets.
Nicolet markets its services to owner-managed companies, the individual owners of these businesses, and other residents within its market areas. At December 31, 2025, our network consisted of 57 branches located principally within our geographic market areas. With the consummation of the MidWest One acquisition, our network consisted of 114 branches located principally within Wisconsin, Michigan, Minnesota, and Iowa.
These practices can include the failure of an institution to timely file required reports or the filing of false or misleading information or the submission of inaccurate reports. Civil penalties may be over $1.9 million per day for such violations. Criminal penalties for some financial institution crimes have been increased to 20 years. Community Reinvestment Act.
These practices can include the failure of an institution to timely file required reports or the filing of false or misleading information or the submission of inaccurate reports. Community Reinvestment Act.
Nicolet continues to offer tuition reimbursement to all employees who wish to pursue their education in a field of study related to their position. Market Area and Competition The Bank is a full-service community bank, providing services ranging from commercial, agricultural, and consumer banking to wealth management and retirement plan services. Nicolet primarily operates in Wisconsin, Michigan, and Minnesota.
Market Area and Competition The Bank is a full-service community bank, providing services ranging from commercial, agricultural, and consumer banking to wealth management and retirement plan services. As of year-end 2025, Nicolet primarily operated in Wisconsin, Michigan, and Minnesota, and with the consummation of the MidWest One acquisition has expanded into Iowa and Denver, Colorado.
Since its opening in late 2000, though more prominently since 2013, Nicolet has supplemented its organic growth with several acquisition transactions. Merger and acquisition (“M&A”) activity has continued to be a source of strong growth for Nicolet, including the successful completion of ten acquisitions since 2012.
Merger and acquisition (“M&A”) activity has continued to be a source of strong growth for Nicolet, including the successful completion of ten acquisitions from 2012 through December 31, 2025, with the consummation of the acquisition of MidWest One on February 13, 2026.
Be Memorable We encourage employees to be a memorable part of their communities. In 2024, employees reported almost 18,500 total volunteer hours in their respective communities.
In addition, 45% of all officer-titled employees were women. Be Memorable We encourage employees to be a memorable part of their communities. In 2025, employees reported more than 20,000 total volunteer hours with local organizations of their choice.
Nicolet regularly analyzes its pay practices to ensure fair and equitable pay practice among our diverse employee population. Be Responsive Nicolet conducts an annual employee survey to identify benefits that are most meaningful to employees, which changes with employee demographics and locations of its branches.
Nicolet regularly analyzes its pay practices to ensure fair and equitable pay practices among our diverse employee population. Be Responsive Nicolet’s culture - which embodies our 5 Core Values - is critical to Nicolet’s continued success.
Nicolet also partners with local civic organizations, schools, professional associations, and other organizations to attract, recruit, retain, engage, support, develop, and advance diverse employees. As of December 31, 2024, Nicolet had 978 total employees, of which, approximately 64% were women and 36% were men. In addition, 45% of all officer-titled employees were women.
Nicolet partners with local civic organizations, schools, professional associations, and other organizations to attract, recruit, retain, engage, support, develop, and advance diverse employees. Nicolet believes that having diverse perspectives is key to innovation and success. We also believe that having diverse perspective allows us to best understand, serve, and support our employees, customers, and communities.
Removed
The Parent Company (which adopted its current name in 2002) is a Wisconsin corporation, originally incorporated on April 5, 2000, to serve as the holding company for and the sole shareholder of Nicolet National Bank. Nicolet elected to become a financial holding company in 2008.
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(“MidWest One ”) a bank and financial holding company under the Bank Holding Company Act, and its wholly owned subsidiary, MidWest One Bank, an Iowa state non-member bank headquartered in Iowa City, Iowa.
Removed
Other than the Bank, these subsidiaries are closely related to or incidental to the business of banking and none are individually or collectively significant to Nicolet’s financial position or results as of December 31, 2024.
Added
MidWest One Bank offered a full range of financial services focusing on the needs of individuals, business, governmental units and institutional customers across its footprint in central and eastern Iowa, the Minneapolis/St. Paul metropolitan area, southwestern Wisconsin, and Denver, Colorado.
Removed
For example, in response to the 2024 survey results, Nicolet created a new Employee Engagement Committee to increase employee interaction and support a sense of belonging. In 2024, Nicolet also appointed a new Chief Experience Officer, who conducted listening sessions throughout the year with the focus of prioritizing Nicolet’s culture and core values throughout its footprint.
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At December 31, 2025, MidWest One had total assets of approximately $6 billion, including total loans of approximately $5 billion, and total deposits of approximately $5 billion.
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Be Personal Employees are more than their contributions at work.
Added
Since its opening in late 2000, though more prominently since 2013, Nicolet has supplemented its organic growth with several acquisition transactions.
Removed
In 2024, 20% of all job opportunities were filled by internal mobility. To support the continued training of employees, Nicolet recently opened a new training facility that will be used to expand its learning and development options for all employees, including in person or virtual options.
Added
For information on recent transactions, see Note 2, “Acquisition,” of the Notes to Consolidated Financial Statements under Part II, Item 8.
Removed
The following summary is qualified by reference to the statutory and regulatory provisions discussed. Changes in applicable laws or regulations may have a material effect on the business and prospects of Nicolet or the Bank, and legislative changes and the policies of various regulatory authorities may significantly affect their operations.
Added
Following the appointment of a Chief Experience Officer in 2024, who continues to conduct listening sessions throughout our footprint, Nicolet revamped its annual employee survey to intensify its focus on culture, with 80% participation in our first year. This has enabled Nicolet to provide more targeted training and development opportunities. Be Personal Employees are more than their contributions at work.
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Regulation of Nicolet Because Nicolet owns all of the capital stock of the Bank, it is a bank holding company under the federal Bank Holding Company Act of 1956, as amended (the “Bank Holding Company Act”).
Added
While we value diversity of thought and experience, we do not make employment decisions on the basis of race, color, religion, sex, sexual orientation, gender identity, national origin, age disability, veteran status, or other legally protected characteristics. As of December 31, 2025, Nicolet had 986 total employees, of which, approximately 63% were women and 37% were men.
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Under Federal Reserve regulations, investors can hold up to 24.9% of the voting securities and up to 33% of the total equity of a company without necessarily having a controlling influence.
Added
To support the continued development of employees, we invest in a range of formal and informal development opportunities to cultivate a highly skilled workforce. We provide internally designed development programs and commit resources to external professional education. In 2024, employees completed 3,997 hours of training, and in 2025 that number increased to 8,525.
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On September 17, 2024, the OCC approved a final rule updating its regulations for business combinations involving national banks and a policy statement clarifying its review of applications under the Bank Merger Act.
Added
Through effective coaching and performance management, we continue to provide talented and well-deserving employees internal promotional opportunities that are aligned to their career aspirations. In 2025, 16% of all job opportunities were filled by internal mobility. Nicolet has also experienced almost a 2% reduction in turnover compared to the prior year.
Removed
The rules and policy statement identified general principles for the OCC’s review of applications under the Bank Merger Act, including indicators for applications likely consistent with approval and applications that raise supervisory or regulatory concerns, additional considerations regarding financial stability, managerial and financial resources, and convenience and needs statutory factors, and clarify the OCC’s decision process for extending the public comment period or holding a public meeting under the Bank Merger Act.
Added
The financial services industry is highly competitive. Nicolet competes for loans, deposits and wealth management or financial services in all its principal markets.
Removed
Under the Trump Administration, it is anticipated that these final rules and policy statement may be further modified.
Added
The following summary is qualified by reference to the statutory and regulatory provisions discussed. These statutory and regulatory provisions are subject to change, and additional statutes, regulations, and corresponding guidance may be adopted.
Removed
There are many steps that must be taken by the agencies before any formal changes to the framework for evaluating bank mergers can be finalized and the prospects for such action are uncertain at this time; however, the adoption of more expansive or prescriptive standards may have an impact on our acquisition activities. Branching.
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Additionally, each presidential administration may seek to implement a regulatory reform agenda that differs from those of prior administrations, which will affect the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies.
Removed
On October 24, 2023, the OCC, FDIC, and Federal Reserve adopted a final rule intended to “strengthen and modernize regulations implementing the CRA to better achieve the purposes of the law.” Most of the rule’s requirements will be applicable beginning January 1, 2026.
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This support may be required at times when, without this Federal Reserve policy or the related rules, Nicolet might not be inclined to provide it. In addition, any capital loans made by Nicolet to the Bank will be repaid only after the Bank’s deposits and various other obligations are repaid in full. Capital Adequacy .
Removed
The full effects on the Bank of these changes to the CRA rules will depend on the regulatory interpretation of this 10 federal rulemaking and cannot be predicted at this time. Management will continue to evaluate the changes to the CRA’s regulations and their impact to the Bank. Payment of Dividends.
Added
In evaluating an application for a business combination, the OCC will consider the capital level of the resulting national bank, the conformity of the transaction to applicable law, regulation, and supervisory policies, the transaction’s purpose, the transaction’s impact on the safety and soundness of the national bank, and the effect of the transaction on the national bank’s shareholders, depositors, other creditors, and customers.
Added
Under the Bank Merger 8 Act, the OCC is also required to consider other statutory factors, including the effect of a proposed business combination on competition, the financial and managerial resources of the institutions, the probable effects of the business combination on the convenience and needs of the community served, the effectiveness of the institutions involved in the transaction in combatting money laundering activities, and any risk to the stability of the U.S. banking and financial system.
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In light of the consummation of the MidWest One acquisition, it is anticipated that Nicolet’s trust preferred securities, as well as Midwest One ’s trust preferred securities assumed in the merger, will be excluded from Tier 1 capital going forward and likely will be called for redemption during 2026.
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In connection with the consummation of the MidWest One acquisition, it is anticipated that the Bank will be examined by the CFPB going forward. The current Presidential administration and Congress are considering significant changes in the priorities, scope, practices and/or staffing levels of various regulatory agencies, including the CFPB.
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As a result, state attorneys general and other state regulatory agencies may increase their enforcement activities to fill any actual or perceived “regulatory gap” at the federal level. UDAP and UDAAP.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

59 edited+8 added−16 removed178 unchanged
Biggest changeThese risks include, without limitation, the following: • our inability to attract and retain clients in our banking market areas, particularly as we work to integrate entities that we acquire; • our inability to achieve and maintain growth in our earnings while pursuing new business opportunities; • our inability to maintain a high level of client service while optimizing our physical branch count due to changing client demand, all while expanding our remote banking services and expanding or enhancing our information processing, technology, compliance, and other operational infrastructures effectively and efficiently; • our inability to maintain loan quality while, at the same time, creating loan growth; • our inability to attract sufficient deposits and capital to fund anticipated loan growth; • our inability to maintain adequate common equity and regulatory capital while managing the liquidity and capital requirements associated with growth, especially organic growth and cash-funded acquisitions; • our inability to hire or retain adequate management personnel and systems to oversee and support such growth; • our inability to implement additional policies, procedures and operating systems required to support our growth; • our inability to manage effectively and efficiently the changes and adaptations necessitated by a complex, burdensome, and evolving regulatory environment Although we have in place strategies designed to achieve those elements that are significant to us at present, our challenge is to execute those strategies and adjust them, or adopt new strategies, as conditions change. 13 Industry Disruption Failure to keep pace with technological changes could adversely affect our business.
Biggest changeThese risks include, without limitation, the following: • our inability to attract and retain clients in our banking market areas, particularly as we work to integrate entities that we acquire; • our inability to achieve and maintain growth in our earnings while pursuing new business opportunities; • our inability to maintain a high level of client service while optimizing our physical branch count due to changing client demand, all while expanding our remote banking services and expanding or enhancing our information processing, technology, compliance, and other operational infrastructures effectively and efficiently; • our inability to maintain loan quality while, at the same time, creating loan growth; • our inability to attract sufficient deposits and capital to fund anticipated loan growth; • our inability to maintain adequate common equity and regulatory capital while managing the liquidity and capital requirements associated with growth, especially organic growth and cash-funded acquisitions; • our inability to hire or retain adequate management personnel and systems to oversee and support such growth; • our inability to implement additional policies, procedures and operating systems required to support our growth; • our inability to manage effectively and efficiently the changes and adaptations necessitated by a complex, burdensome, and evolving regulatory environment.
If our risk management framework is not effective, we could suffer unexpected losses and become subject to litigation, negative regulatory consequences, or reputational damage among other adverse consequences, any of which could result in our business, financial condition, results of operations or prospects being materially adversely affected. Competition for talent is substantial and increasing.
If our risk management framework is not effective, we could suffer unexpected losses and become subject to litigation, negative regulatory consequences, or reputational damage among other adverse consequences, any of which could result in our business, financial condition, results of operations or prospects being materially adversely affected. Competition for management talent is substantial and increasing.
Substantial legal liability or significant regulatory action against us could have material adverse financial effects or cause significant reputational harm to us, which in turn could seriously harm our business prospects. Data privacy is becoming a major political concern. The laws governing it are new, and are likely to evolve and expand.
Substantial legal liability or significant regulatory action against us could have material adverse financial effects or cause significant reputational harm to us, which in turn could seriously harm our business prospects. Data privacy is becoming a major business and political concern. The laws governing it are new, and are likely to evolve and expand.
We do have the right to defer distributions on our junior subordinated debentures (and related trust preferred securities) for up to five years, but during that time would not be able to pay dividends on our common stock.
We do have the right to defer distributions on our junior subordinated debentures (and related trust preferred securities) for up to five years, but during that time we would not be able to pay dividends on our common stock.
These risks include, without limitation, the following: • our inability to identify and expand into suitable markets; • our inability to identify and acquire suitable sites for new branches and service locations; • our inability to identify and execute potential acquisition targets; • our inability to develop accurate estimates and judgments to evaluate asset values and credit, operations, management and market risks with respect to an acquired branch or institution, a new branch office or a new market; • our inability to realize certain assumptions and estimates to preserve the expected financial benefits of the transaction; • our inability to avoid the diversion of our management’s attention from existing operations during the negotiation of a transaction; • our inability to manage successful entry into new markets where we have limited or no direct prior experience; • our inability to obtain regulatory and other approvals, or obtain such approvals without restrictive conditions; • our inability to integrate the acquired business’ operations, clients, and properties quickly and cost-effectively; • our inability to manage cultural assimilation risks associated with growth through acquisitions, which can be an often-overlooked and often-critical failure point in mergers; • our inability to combine the franchise values of businesses that we acquire with those of ours without significant loss of employees or customers from re-branding and other similar changes; or • any inability to retain core clients and key associates.
These risks include, without limitation, the following: • our inability to identify and expand into suitable markets; • our inability to identify and acquire suitable sites for new branches and service locations; • our inability to identify and execute potential acquisition targets; • our inability to develop accurate estimates and judgments to evaluate asset values and credit, operations, management and market risks with respect to an acquired branch or institution, a new branch office or a new market; • our inability to realize certain assumptions and estimates necessary to preserve the expected financial benefits of the transaction; • our inability to avoid the diversion of our management’s attention from existing operations during the negotiation of a transaction; • our inability to manage successful entry into new markets where we have limited or no direct prior experience; • our inability to obtain regulatory and other approvals, or obtain such approvals without restrictive conditions; • our inability to integrate the acquired business’ operations, clients, and properties quickly and cost-effectively; • our inability to manage cultural assimilation risks associated with growth through acquisitions, which can be an often-overlooked and often-critical failure point in mergers; • our inability to combine the franchise values of businesses that we acquire with those of ours without significant loss of employees or customers from re-branding and other similar changes; or • any inability to retain core clients and key associates of any business that we acquire.
If the communities in which we operate do not grow or if the prevailing economic conditions locally or nationally are less favorable than we have assumed, this may result in deterioration in the credit quality of our borrowers and the demand for our products and services, an increase in the number of loan delinquencies, defaults and charge-offs, foreclosures, additional provision for credit losses, adverse asset values of the collateral securing our loans, and an overall material adverse effect on the quality of our loan portfolio.
If the communities in which we operate do not grow or if the prevailing economic conditions locally or nationally are less favorable than we have assumed, this may result in deterioration in the credit quality of our borrowers and the demand for our products and 18 services, an increase in the number of loan delinquencies, defaults and charge-offs, foreclosures, additional provision for credit losses, adverse asset values of the collateral securing our loans, and an overall material adverse effect on the quality of our loan portfolio.
This may cause us to incur additional costs and expenses, and dedicate additional resources, to achieve compliance with any changes from the Presidential administration, which can impact our financial condition and the results of our operations. Failure to maintain certain regulatory capital levels and ratios could result in regulatory actions that would be materially adverse to our shareholders.
This may cause us to incur additional costs and expenses, and dedicate additional resources, to achieve compliance with any changes from the administration, which can impact our financial condition and the results of our operations. Failure to maintain certain regulatory capital levels and ratios could result in regulatory actions that would be materially adverse to our shareholders.
Due to the inherent nature of these estimates, it is possible that, at some time in the future, we may significantly increase the allowance for credit losses and/or sustain credit losses that are significantly higher than the provided allowance, or we may recognize a significant provision for impairment of assets, or we may make some other adjustment that will differ materially from the estimates that we make today.
Due to the inherent nature of these estimates, it is possible that, at some time in the future, we may significantly increase the allowance for credit losses and/or sustain 22 credit losses that are significantly higher than the provided allowance, or we may recognize a significant provision for impairment of assets, or we may make some other adjustment that will differ materially from the estimates that we make today.
Any such failure in our analytical or forecasting models could have a material adverse effect on our business, financial condition and results of operations. Risks From Changes in Economic Conditions Weakness in the economy and governmental policies, whether or not adopted in response to economic conditions such as inflation, may adversely affect us.
Any such failure in our analytical or forecasting models could have a material adverse effect on our business, financial condition and results of operations. 16 Risks From Changes in Economic Conditions Weakness in the economy and governmental policies, whether or not adopted in response to economic conditions such as inflation, may adversely affect us.
If funding for these lending programs or federal spending generally is reduced as part of the 20 appropriations process or by administrative decision, demand for our services may be reduced. Any of these developments could have a material adverse effect on our financial condition, results of operations or liquidity.
If funding for these lending programs or federal spending generally is reduced as part of the appropriations process or by administrative decision, demand for our services may be reduced. Any of these developments could have a material adverse effect on our financial condition, results of operations or liquidity.
Such factors include significant economic trends or events as well as significant international monetary policies and events. Such strategies also can affect the U.S. and world-wide financial systems in ways that may be difficult to predict.
Such factors include significant economic trends or events as well as significant international monetary policies and events. Such strategies also 17 can affect the U.S. and world-wide financial systems in ways that may be difficult to predict.
These types of loans are typically larger than 18 residential real estate loans or consumer loans. During periods of lower economic growth or challenging economic periods, small to medium-sized businesses may be impacted more severely and more quickly than larger businesses.
These types of loans are typically larger than residential real estate loans or consumer loans. During periods of lower economic growth or challenging economic periods, small to medium-sized businesses may be impacted more severely and more quickly than larger businesses.
If the models we use to measure the fair value of financial instruments are inadequate, the fair value of such financial instruments may 16 fluctuate unexpectedly or may not accurately reflect what we could realize upon sale or settlement of such financial instruments.
If the models we use to measure the fair value of financial instruments are inadequate, the fair value of such financial instruments may fluctuate unexpectedly or may not accurately reflect what we could realize upon sale or settlement of such financial instruments.
The spread of 19 these diseases may result in quarantines, cancellation of events and travel, business and school shutdowns, reduction in business activity and financial transactions, supply chain interruptions, and overall economic and financial market instability.
The spread of these diseases may result in quarantines, cancellation of events and travel, business and school shutdowns, reduction in business activity and financial transactions, supply chain interruptions, and overall economic and financial market instability.
Our success in the competitive environment in which we operate requires consistent investment of capital and human resources in innovation, particularly in light of the current “FinTech” environment, in which the financial services industry is undergoing rapid technological changes and financial institutions are investing significantly in evaluating new technologies, such as artificial intelligence, machine learning, blockchain and other distributed ledger technologies, and developing potentially industry-changing new products, services and industry standards.
Our success in the competitive environment in which we operate requires consistent investment of capital and human resources in innovation, particularly in light of the current “FinTech” environment, in which the financial services industry is undergoing rapid technological changes and financial institutions are investing significantly in evaluating new technologies, such as artificial intelligence, machine learning, digital assets, blockchain and other distributed ledger technologies, and developing potentially industry-changing new products, services and industry standards.
Expanding in our current markets and selecting attractive new growth markets by opening additional branches and service locations or through acquisitions of all or part of other financial institutions involve risks, any one of which could result in a material and adverse effect upon our results of operation or financial condition.
Expanding in our current markets and selecting attractive new growth markets by opening additional branches and service locations or through acquisitions of all or part of other financial institutions, including MidWest One , involve risks, any one of which could result in a material and adverse effect upon our results of operation or financial condition.
Our investment is directed at generating new products and services, and adapting existing products and services to the evolving standards and demands of the marketplace. Among other things, investing in innovation helps us maintain a mix of products and services that keeps pace with our competitors and achieve acceptable margins.
Our investment is directed at generating new products and services, and adapting existing products and services to the evolving standards and demands of the marketplace. Among other things, investing in innovation helps us maintain a mix of products and services that keeps pace with our competitors and achieves acceptable margins.
Natural disasters and weather-related events exacerbated by climate change could have a negative impact on our results of operations and financial condition. We operate in markets in which natural disasters, including tornadoes, severe storms, fires, floods, hurricanes and earthquakes have occurred.
Geographic and Climate Risks Natural disasters and weather-related events exacerbated by climate change could have a negative impact on our results of operations and financial condition. We operate in markets in which natural disasters, including tornadoes, severe storms, fires, floods, hurricanes and earthquakes have occurred.
Efforts to make systems more robust may make them less adaptable, and vice-versa . Also, our efforts to control expenses, which is a significant priority for us, increases our operational challenges as we strive to maintain high quality client service and compliance.
Efforts to make systems more robust may make them less adaptable, and vice-versa . Also, our efforts to control expenses, which is a significant priority for us, increase our operational challenges as we strive to maintain high quality client service and compliance.
These provisions include: • a provision allowing the Board to consider the interests of our employees, customers, suppliers and creditors when considering an acquisition proposal; • a provision that all amendments to the articles and bylaws must be approved by a majority of the outstanding shares of our capital stock entitled to vote; • a provision requiring that any merger or share exchange involving Nicolet be approved by either: (i) two-thirds of the Nicolet directors then in office and a majority of Nicolet’s outstanding shares of common stock; or (ii) a majority of the Nicolet directors then in office and two-thirds of Nicolet’s outstanding shares of common stock; • a provision restricting removal of directors except for cause and upon the approval of a majority of the outstanding shares of our capital stock entitled to vote; • a provision that any special meeting of shareholders may be called only by the chief executive officer pursuant to a resolution adopted by a majority of the Board or the holders of 10% of the outstanding shares of Nicolet’s capital stock entitled to vote; and • a provision establishing certain advance notice procedures for matters to be considered at an annual meeting of shareholders.
These provisions include: • a provision allowing the Board to consider the interests of our employees, customers, suppliers and creditors when considering an acquisition proposal; • a provision requiring that any merger or share exchange involving Nicolet be approved by either: (i) two-thirds of the Nicolet directors then in office and a majority of Nicolet’s outstanding shares of common stock; or (ii) a majority of the Nicolet directors then in office and two-thirds of Nicolet’s outstanding shares of common stock; • a provision restricting removal of directors except for cause and upon the approval of a majority of the outstanding shares of our capital stock entitled to vote; • a provision that any special meeting of shareholders may be called only by the chief executive officer pursuant to a resolution adopted by a majority of the Board or the holders of 10% of the outstanding shares of Nicolet’s capital stock entitled to vote; and • a provision establishing certain advance notice procedures for matters to be considered at an annual meeting of shareholders.
Although our current strategy is expected to evolve as business conditions change, our current strategy is to continue to invest resources in our banking businesses and operations as we continue the integration of the businesses and operations of recent 12 acquisitions, and seek to exploit opportunities for cost and revenue synergies.
Although our current strategy is expected to evolve as business conditions change, our current strategy is to continue to invest resources in expanding our banking businesses and operations as we continue the integration of the businesses and operations of recent acquisitions, and seek to exploit opportunities for cost and revenue synergies.
The new Presidential administration has stated its intention to scrutinize the United States’ trade relationships with its economic partners, indicated an interest in renegotiating trade agreements, and stated a willingness to implement tariffs with some of the United States’ trade partners which could lead to trade wars.
The current Presidential administration has stated its intention to scrutinize the United States’ trade relationships with its economic partners, indicated an interest in renegotiating trade agreements, and stated a willingness to implement tariffs with some of the United States’ trade partners which could lead to trade wars.
Moreover, obtaining adequate funding to meet our deposit obligations may be more challenging during periods of elevated prevailing interest rates, such as the present period. Our ability to attract depositors during a time of actual or perceived distress or instability in the marketplace may be limited. Further, interest rates paid for borrowings generally exceed the interest rates paid on deposits.
Moreover, obtaining adequate funding to meet our deposit obligations may be more challenging during periods of elevated prevailing interest rates. Our ability to attract depositors during a time of actual or perceived distress or instability in the marketplace may be limited. Further, interest rates paid for borrowings generally exceed the interest rates paid on deposits.
As of December 31, 2024, approximately 76% of our loan portfolio consisted of commercial-related loans, including commercial and industrial loans, owner-occupied CRE, AG production and AG real estate, CRE investment, and construction and land-development loans. Our borrowers under these loans tend to be small to medium-sized businesses.
As of December 31, 2025, approximately 77% of our loan portfolio consisted of commercial-related loans, including commercial and industrial loans, owner-occupied CRE, AG production and AG real estate, CRE investment, and construction and land-development loans. Our borrowers under these loans tend to be small to medium-sized businesses.
See Risks Associated With Monetary Events and Interest Rate and Yield Curve Risks in this Item 1A of this report. Generally, in periods of economic downturns, including periods of rising interest rates and recessions, our realized credit losses increase, demand for our products and services declines, and the credit quality of our loan portfolio declines.
See Risks Associated with Monetary Events and Interest Rate and Yield Curve Risks in this Item 1A of this report. Generally, in periods of economic downturns, our realized credit losses increase, demand for our products and services declines, and the credit quality of our loan portfolio declines.
Inflationary pressures present a potential threat to our results of operations and financial condition. The United States generally and the regions in which we operate specifically have recently experienced, for the first time in decades, significant inflationary pressures, evidenced by higher gas prices, higher food prices and other consumer items.
Inflationary pressures present a potential threat to our results of operations and financial condition. The United States generally and the regions in which we operate specifically have within the past few years experienced, for the first time in decades, significant inflationary pressures, evidenced by higher gas prices, higher food prices and other consumer items.
As a result, in the event of financial distress, uninsured depositors historically have been more likely to withdraw their deposits. As of December 31, 2024, approximately 30% of our deposits were uninsured and we rely on these deposits for liquidity.
As a result, in the event of financial distress, uninsured depositors historically have been more likely to withdraw their deposits. As of December 31, 2025, approximately 32% of our deposits were uninsured and we rely on these deposits for liquidity.
Unlike banks that are more geographically diversified, we are a regional bank that provides services to customers primarily in Wisconsin, Michigan and Minnesota. The market conditions in these markets may be different from, and could be worse than, the economic conditions in the United States as a whole.
Unlike banks that are more geographically diversified, we are a regional bank that provides services to customers primarily in Wisconsin, Michigan and Minnesota (and, following the acquisition of MidWest One , Iowa). The market conditions in these markets may be different from, and could be worse than, the economic conditions in the United States as a whole.
While we do not specifically know what these changes will be, we may be required to implement different compliance procedures and modify our policies and activities to comply with changes set forth by the administration.
While we do not specifically know what these changes will be, or what future administrations may seek to reverse, we may be required to implement different compliance procedures and modify our policies and activities to comply with changes set forth by the administration.
Under such circumstances, we may be required to access funding from sources such as the Federal Reserve’s discount window or the Bank Term Funding Program in order to manage our liquidity risk. Unrealized losses in our securities portfolio could negatively affect our liquidity.
Under such circumstances, we may be required to access funding from sources such as the Federal Reserve’s discount window or the Bank Term Funding Program in order to manage our liquidity risk. Unrealized losses in our securities portfolio could negatively affect our liquidity. We invest a portion of our assets in investment securities.
However, other estimates can be highly significant at discrete times or during periods of varying length, for example the valuation (or impairment) of our deferred tax assets. Estimates are made at specific points in time. As actual events unfold, estimates are adjusted accordingly.
However, other estimates can be highly significant at discrete times or during periods of varying length, for example the valuation (or impairment) of our deferred tax assets. Estimates are made at specific points in time.
We could also issue additional equity securities directly as consideration in acquisitions of other financial institutions or other investments that we may make that would be dilutive to stockholders in terms of voting power and share-of-ownership, and could be dilutive financially or economically. Nicolet’s securities are not FDIC insured.
We could also issue additional equity securities directly as consideration in acquisitions of other financial institutions (such as we have done in the recent MidWest One acquisition) or other investments that we may make that would be dilutive to stockholders in terms of voting power and share-of-ownership, and could be dilutive financially or economically. Nicolet’s securities are not FDIC insured.
Replacing these third-party vendors could also create significant delay and expense. Because our information technology and telecommunications systems interface with and depend on third-party systems, we could experience service denials if demand for such services exceeds capacity or such third-party systems fail or experience interruptions.
Because our information technology and telecommunications systems interface with and depend on third-party systems, we could experience service denials if demand for such services exceeds capacity or such third-party systems fail or experience interruptions.
Additionally, competitor pricing and the resulting negotiations that occur with our customers also impact the rates we collect on loans and pay on deposits. 22 If short-term interest rates rise, our results of operations may be negatively impacted if we are unable to increase the rates we charge on loans or earn on our investment securities in excess of the increases we must pay on deposits and our other funding sources.
If short-term interest rates rise, our results of operations may be negatively impacted if we are unable to increase the rates we charge on loans or earn on our investment securities in excess of the increases we must pay on deposits and our other funding sources.
Certain of our operations and customers are dependent on the regular operation of the federal or state government or programs they administer For example, our SBA lending program depends on interaction with the SBA, an independent agency of the federal government.
Certain of our operations and customers are dependent on the regular operation of the federal or state government or programs they administer. For example, our SBA lending program depends on interaction with the SBA, an independent agency of the federal government. During a lapse in funding, the SBA may not be able to engage in such interaction.
Failure to perform in any of these areas could significantly weaken our competitive position, which could adversely affect our growth and profitability which, in turn, could have a material adverse effect on our business, financial condition and results of operations. We may also be affected by the marketplace loosening of credit underwriting standards and structures.
Failure to perform in any of these areas could significantly weaken our competitive position, which could adversely affect our growth and profitability which, in turn, could have a material adverse effect on our business, financial condition and results of operations.
As of December 31, 2024, we had outstanding subordinated notes of approximately $115.2 million and outstanding trust preferred securities and associated junior subordinated debentures with an aggregate par principal amount of approximately $1.8 million and $48.0 million, respectively. The subordinated notes are senior to our common stock.
As of December 31, 2025, we had outstanding subordinated notes of approximately $92.8 million and outstanding trust preferred securities and associated junior subordinated debentures with an aggregate par principal amount of approximately $1.8 million and $48.0 million, respectively.
Failure to implement effective controls and procedures or circumvention of our controls and procedures could harm our business, results of operations and financial condition or cause us to fail to meet our public reporting obligations. 23 Geographic and Climate Risks We are subject to risks of operating in various jurisdictions.
Failure to implement effective controls and procedures or circumvention of our controls and procedures could harm our business, results of operations and financial condition or cause us to fail to meet our public reporting obligations.
As market interest rates have increased, we have experienced significant unrealized losses on our available for sale securities portfolio. Unrealized losses related to available for sale securities are reflected in accumulated other comprehensive income in our consolidated balance sheets and reduce the level of our book capital and tangible common equity.
Interest rate increases have recently resulted in, and could in the future result in unrealized losses on our available for sale securities portfolio. Unrealized losses related to available for sale securities are 21 reflected in accumulated other comprehensive income in our consolidated balance sheets and reduce the level of our book capital and tangible common equity.
Liquidity and Funding Risk Liquidity is essential to our business model and a lack of liquidity, or an increase in the cost of liquidity could materially impair our ability to fund our operations and jeopardize our results of operation, financial condition and cash flows.
Further general regulation to protect data privacy appears likely, and banking industry regulations might be enlarged as well. 20 Liquidity and Funding Risk Liquidity is essential to our business model and a lack of liquidity, or an increase in the cost of liquidity could materially impair our ability to fund our operations and jeopardize our results of operation, financial condition and cash flows.
Any 24 determination relating to the continuation or any change in dividend policy will be made at the discretion of the Board and will depend on a number of factors, including the Company’s future earnings, capital requirements, financial condition, future prospects, regulatory restrictions and other factors that the Board may deem relevant.
Future dividends, if any, will be declared and paid at the Board’s discretion and will depend on a number of factors, including the Company’s future earnings, capital requirements, financial condition, future prospects, regulatory restrictions and other factors that the Board may deem relevant.
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 and may delay, make more difficult or prevent an attempted acquisition of Nicolet that you may favor. 25 Nicolet’s amended and restated articles of incorporation, as amended (our “articles”), and bylaws, as amended (our “bylaws”), contain various provisions that could have an anti-takeover effect and may delay, discourage or prevent an attempted acquisition or change of control of Nicolet.
Nicolet’s amended and restated articles of incorporation, as amended (our “articles”), and bylaws, as amended (our “bylaws”), contain various provisions that could have an anti-takeover effect and may delay, discourage or prevent an attempted acquisition or change of control of Nicolet.
Inflation represents a loss in purchasing power because the value of investments often does not keep up with inflation and erodes the purchasing power of money and the potential value of investments over time.
While inflationary pressures lessened during 2025, the effects of inflation continue to present a risk to our borrowers and our customers. Inflation represents a loss in purchasing power because the value of investments often does not keep up with inflation and erodes the purchasing power of money and the potential value of investments over time.
Fluctuations in interest rates have had and can continue to have significant and sometimes adverse effects upon our business as well as the business of many of our customers. Federal Reserve strategies can, and often are intended to, affect the domestic money supply, inflation, interest rates, and the shape of the yield curve.
Risks Associated with Monetary Events Federal Reserve strategies can, and often are intended to, affect the domestic money supply, inflation, interest rates, and the shape of the yield curve. These strategies have had, and will continue to have, a significant impact on our business and on many of our customers.
Actions could be taken that would further limit the amount of interest or fees we can charge, further restrict our ability to collect loans or realize on collateral, affect the terms or profitability of the products and services we offer, or materially and adversely affect us in other ways.
Actions could be taken that would further limit the amount of interest or fees we can charge, further restrict our ability to collect loans or realize on collateral, affect the terms or profitability of the products and services we offer, or materially and adversely affect us in other ways. 19 Each Presidential administration seeks to implement a regulatory reform agenda that is potentially significantly different than that of the prior administration, impacting the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies.
Strategic and Macro Risks We may be unable to successfully implement our strategy to grow our commercial and consumer banking businesses.
We may also be affected by the marketplace loosening of credit underwriting standards and structures. 12 Strategic and Macro Risks We may be unable to successfully implement our strategy to grow our commercial and consumer banking businesses.
General market fluctuations, including real or anticipated changes in the strength of the local economy; industry factors and general economic and political conditions and events, such as economic slowdowns or recessions; interest rate changes, oil price volatility or credit loss trends could also cause our stock price to decrease regardless of our operating results.
General market fluctuations, including real or anticipated changes in the strength of the local economy; industry factors and general economic and political conditions and events, such as economic slowdowns or recessions; interest rate changes, oil price volatility or credit loss trends could also cause our stock price to decrease regardless of our operating results. 24 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 and may delay, make it more difficult or prevent an attempted acquisition of Nicolet that you may favor.
Effects on the yield curve often are most pronounced at the short end of the curve, which is of particular importance to us and other banks.
Fluctuations in interest rates have had and may continue to have significant and sometimes adverse effects upon our business as well as the business of many of our customers. Effects on the yield curve often are most pronounced at the short end of the curve, which is of particular importance to us and other banks.
The holders of our common stock receive dividends only if and when declared by the Nicolet board of directors (the “Board”) out of legally available funds. Prior to 2023, the Board had not declared a dividend on the common stock since our inception in 2000.
The holders of our common stock receive dividends only if and when declared by the Nicolet board of directors (the “Board”) out of legally available funds. While our Board, since 2023, has approved the payment of a quarterly cash dividend on our common stock, there can be no assurance whether or when we may pay dividends in the future.
Our anti-fraud measures are both preventive and, when necessary, responsive; however, some level of fraud loss is unavoidable, and the risk of a major loss cannot be eliminated. 14 Our ability to conduct and grow our businesses depend in part upon our ability to create, maintain, expand, and evolve an appropriate operational and organizational infrastructure, manage expenses, and recruit and retain personnel with the ability to manage a complex business.
Our ability to conduct and grow our businesses depends in part upon our ability to create, maintain, expand, and evolve an appropriate operational and organizational infrastructure, manage expenses, and recruit and retain personnel with the ability to manage a complex business.
During a lapse in funding, such as has occurred during previous federal government “shutdowns”, the SBA may not be able to engage in such interaction. Similarly, loans we make through USDA lending programs may be delayed or adversely affected by lapses in funding for the USDA.
Similarly, loans we make through USDA lending programs may be delayed or adversely affected by lapses in funding for the USDA.
Neither is a banking industry regulation, but both apply to banks in relation to certain clients. Further general regulation to protect data privacy appears likely, and banking industry regulations might be enlarged as well.
Neither is a banking industry regulation, but both apply to banks in relation to certain clients.
For example, national monetary policy implemented by the Federal Reserve plays a significant role in the determination of interest rates.
For example, national monetary policy implemented by the Federal Reserve plays a significant role in the determination of interest rates. Additionally, competitor pricing and the resulting negotiations that occur with our customers also impact the rates we collect on loans and pay on deposits.
The ACL reflects our assessment of the current expected losses over the life of the loan using historical experience, current conditions and reasonable and supportable forecasts. CECL has created more volatility in the level of our ACL because it relies on macroeconomic forecasts.
The ACL reflects our assessment of the current expected losses over the life of the loan using historical experience, current conditions and reasonable and supportable forecasts. The level of the allowance reflects our continuing evaluation of factors including current economic forecasts, historical loss experience, the volume and types of loans, and specific credit risks.
The low-cost, high-speed nature of these “robo-advisor” services can be especially attractive to younger, less-affluent clients and potential clients, as well as persons interested in “self-service” investment management. Other industry changes, such as zero-commission trading offered by certain large firms able to use trading as a loss-leader, may amplify this trend.
The low-cost, high-speed nature of these “robo-advisor” services can be especially attractive to younger, less-affluent clients and potential clients, as well as persons interested in “self-service” investment management. The rapid growth of stablecoins, accelerated by regulatory frameworks like the Genius Act, has raised important questions about their impact on traditional banking.
Stock Holding and Governance Risks We have only recently begun to pay dividends; moreover, the inability of our subsidiaries to declare and pay dividends or other distributions to the Holding Company could adversely affect its liquidity and ability to declare and pay dividends.
For example, our corporate credit exposures include industries that may experience reduced demand for carbon-intensive products due to the transition to a low-carbon economy. 23 Stock Holding and Governance Risks The inability of our bank subsidiary to declare and pay dividends or other distributions to the Holding Company could adversely affect its liquidity and ability to declare and pay dividends.
A flat or inverted yield curve, which tends to decrease net interest margin, adversely impacts our lending businesses and investment portfolio. From October 2022 through December 2024, the yield curve was inverted. See Risks Associated with Monetary Events within this section of the Report for additional information.
A flat or inverted yield curve, which tends to decrease net interest margin, adversely impacts our lending businesses and investment portfolio. In recent years, the yield curve was inverted, but as of the end of 2025 it had returned to a positively sloped yield curve, reflecting favorable economic signs.
These strategies have had, and will continue to have, a significant impact on our business and on many of our clients. In 2022 and much of 2023, in response to inflationary pressures, the Federal Reserve increased interest rates substantially. In 2024, in response to decreasing rates of inflation, the Federal Reserve decreased interest rates.
After substantially increasing interest rates in 2022 and much of 2023, in response to inflationary pressures, beginning with third quarter 2024, the Federal Reserve began to decrease interest rates.
Additionally, the use of artificial intelligence and quantum computing could exacerbate many of these risks.
Additionally, the use of artificial intelligence and quantum computing could exacerbate many of these risks. Our anti- 14 fraud measures are both preventive and, when necessary, responsive; however, some level of fraud loss is unavoidable, and the risk of a major loss cannot be eliminated.
Removed
As discussed elsewhere in this Item 1A, inflationary pressures have lessened, which has caused the Federal Reserve to recently decrease interest rates. Decreases in interest rates in the past have led to increased consumer spending, which could lower consumer deposit amounts.
Added
Although we have in place strategies designed to achieve those elements that are significant to us at present, our challenge is to execute those strategies and adjust them, or adopt new strategies, as conditions change. 13 Industry Disruption Failure to keep pace with technological changes could adversely affect our business.
Removed
Such a decrease in consumer deposits could cause one or more of the following negative developments: • an increase in rates on deposits in an attempt to attract new customers and to persuade existing customers to leave their deposits in their accounts; • a decrease in the value of our pre-existing variable rate loans; • a comparative increase in our pre-existing fixed rate debt; or • an increase in the number of customers or other counterparties who default on their loans or other obligations to us, which could result in a higher level of nonperforming assets (“NPAs”), net charge-offs and provision for credit losses. 17 Risks Associated with Monetary Events The Federal Reserve has implemented significant economic strategies that have affected interest rates, inflation, asset values, and the shape of the yield curve.
Added
As these digital tokens gain mainstream acceptance, they could fundamentally reshape the structure and functions of banking and influence the established intermediation role of banks. Other industry changes, such as zero-commission trading offered by certain large firms able to use trading as a loss-leader, may amplify this trend.
Removed
It is possible that CECL may increase the cost of lending in the industry and result in slower loan growth and lower levels of net income. The level of the allowance reflects our continuing evaluation of factors including current economic forecasts, historical loss experience, the volume and types of loans, and specific credit risks.
Added
Expected changes in the composition of the Federal Reserve Board, including its chairman, and continuing volatility in the economy, increases the uncertainty of future Federal Reserve actions with respect to interest rates.
Removed
The following paragraphs highlight certain specific important risk areas related to regulatory matters currently. These paragraphs do not describe these risks exhaustively, and they do not describe all such risks that we face currently. Moreover, the importance of specific risks will grow or diminish as circumstances change.
Added
In addition, the current Presidential administration and Congress are expected to significantly change the priorities, scope, practices and/or staffing levels of various regulatory agencies, including the CFPB.
Removed
We anticipate that the Presidential administration will seek to implement a regulatory reform agenda that is significantly different than that of the prior administration, impacting the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies.
Added
As a result, state attorneys general and other state regulators may increase their enforcement activities to fill any actual or perceived “regulatory gap” at the federal level and seek to obtain remedies such as regulatory sanctions, customer rescission rights and civil money penalties.
Removed
Our access to liquidity could also be impaired by factors that are not specific to us, such as general business conditions, interest rate fluctuations, severe volatility or disruption of the financial markets or negative views and expectations about the prospects for the financial services industry as a whole, or legal, regulatory, accounting, and tax environments governing our funding transactions.
Added
Such uncertainties may make it more difficult for us to comply with consumer protection laws, which may result in increased compliance costs and potential non-compliance and associated regulatory actions. Any regulatory actions against us could have a material adverse effect on our business, financial condition or results of operations.
Removed
In addition, our ability to raise funds is strongly affected by the general state of the U.S. and world economies and financial markets as well as the policies and 21 capabilities of the U.S. government and its agencies, and may remain or become increasingly difficult due to economic and other factors beyond our control.
Added
However, the yield curve has not returned to historic norms and remains relatively flat. See Risks Associated with Monetary Events within this section of the Report for additional information.
Removed
Our success is also influenced heavily by population growth, income levels, loans and deposits and on stability in real estate values in our markets. To a significant degree our banking business is exposed to economic, regulatory, natural disaster, and other risks that primarily impact the mid-western U.S. states where we do most of our traditional banking business.
Added
In connection with the consummation of the MidWest One acquisition, we assumed additional outstanding trust preferred securities and associated junior subordinated debentures with an aggregate par principal amount of approximately $1.3 million and $44.8 million, respectively. The subordinated notes are senior to our common stock.
Removed
If those regions of the U.S. did not grow or were to experience adversity not shared by other parts of the country, we are likely to experience adversity to a degree not shared by those competitors which have a broader or different regional footprint.
Removed
If market and economic conditions deteriorate, this may lead to valuation adjustments on our loan portfolio and losses on defaulted loans and on the sale of other real estate owned.
Removed
Additionally, such adverse economic conditions in our market areas, specifically decreases in real estate property values due to the nature of our loan portfolio, the majority of which is secured by real estate, could reduce our growth rate, affect the ability of our customers to repay their loans and generally affect our financial condition and results of operations.
Removed
As of December 31, 2024, approximately 36% of our loans were secured by commercial-based real estate, 14% of loans were secured by agriculture-based real estate, and 23% of our loans were secured by residential real estate. We are less able than larger institutions to spread the risks of unfavorable local economic conditions across a larger number of more diverse economies.
Removed
For example, our corporate credit exposures include industries that may experience reduced demand for carbon-intensive products due to the transition to a low-carbon economy. Moreover, banking regulators and others are increasingly focusing on the issue of climate risk at financial institutions, both directly and with respect to their clients.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe underlying controls of this security program are based on the guidelines and frameworks provided by the Office of the 26 Comptroller of the Currency (the “OCC”), the Federal Financial Institutions Examination Council (the “FFIEC”), and the National Institute of Standards and Technology (“NIST”), as well as industry best practices and standards.
Biggest changeThe underlying controls of this security program are based on the guidelines and frameworks provided by the OCC, the Federal 25 Financial Institutions Examination Council (the “FFIEC”), and the National Institute of Standards and Technology (“NIST”), as well as industry best practices and standards.
This establishes the foundation for secure resilient systems that can withstand and mitigate cyber risks effectively. • Security Operations – We use various tools to assess, monitor, and analyze the vulnerability of our operating systems, and have established an incident response plan for addressing identified threats and incidents. • Resiliency, Safety & Security – We have established policies and procedures to withstand and recover from disruption, protect our people and environment, as well as protect our systems and information from threats and unauthorized access. • Vendor Risk Management – We use a risk-based approach to assess and monitor cybersecurity risks presented by our vendors, third-party service providers, and other third-party users that we partner with. • Security Awareness Education – We use current cybersecurity and information security threats to develop our education program.
This establishes the foundation for secure resilient systems that can withstand and mitigate cyber risks effectively. • Security Operations – We use various tools to assess, monitor, and analyze the vulnerability of our environment, and have established an incident response plan for addressing identified threats and incidents. • Resiliency, Safety & Security – We have established policies and procedures to withstand and recover from disruption, protect our people and environment, as well as protect our systems and information from threats and unauthorized access. • Vendor Risk Management – We use a risk-based approach to assess and monitor cybersecurity risks presented by our vendors, third-party service providers, and other third-party users that we partner with. • Security Awareness Education – We use current cybersecurity and information security threats to develop our education program.
The team includes information security professionals with varying degrees of education and experience, and many team members are subject to professional education and certification requirements. In particular, our information security team has substantial relevant experience in the areas of information security and cybersecurity risk management. The management Info Sec Steering Committee provides oversight and governance of the Information Security Program.
The team includes information security professionals with varying degrees of education and experience, and some team members are subject to professional education and certification requirements. In particular, our information security team has substantial relevant experience in the areas of information security and cybersecurity risk management. The management Info Sec Steering Committee provides oversight and governance of the Information Security Program.
The committee generally meets monthly to review and provide oversight of our risk management strategy; audit reports related to our cyber and information security processes; third-party risk assessments; periodic testing of systems and infrastructure; status of employee and customer training; and updates on security incidents.
The committee maintains monthly meetings to review and provide oversight of our risk management strategy; audit reports related to our cyber and information security processes; third-party risk assessments; periodic testing of systems and infrastructure; status of employee and customer training; and updates on security incidents.
For additional discussion of cybersecurity risks, see Item 1A, “Risk Factors – Operational Risks.” Governance Our Chief Information Security Officer (“CISO”) is responsible for managing our information security team and implementing the Information Security Program, in conjunction with our CIO and Director of IT.
For additional discussion of cybersecurity risks, see Item 1A, “Risk Factors – Operational Risks.” Governance Our Chief Information Security Officer (“CISO”) is responsible for managing our information security team and implementing the Information Security Program, in conjunction with our Chief Innovation Officer (“CIO”).

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition, Nicolet owns or leases other real property that, when considered in aggregate, is not significant to its financial position. Most of the offices are free-standing, newer buildings that provide adequate access, customer parking, and drive-through and/or ATM services. The properties are in good condition and considered adequate for present and near term requirements.
Biggest changeMost of the offices are free-standing, newer buildings that provide adequate access, customer parking, and drive-through and/or ATM services. The properties are in good condition and considered adequate for present and near term requirements. None of the owned properties are subject to a mortgage or similar encumbrance.
ITEM 2. PROPERTIES The corporate headquarters of both the Parent Company and the Bank are located at 111 North Washington Street, Green Bay, Wisconsin. At year-end 2024, including the main office, the Bank operated 57 bank branch locations, 46 of which are owned and 11 27 that are leased.
ITEM 2. PROPERTIES The corporate headquarters of both the Parent Company and the Bank are located at 111 North Washington Street, Green Bay, Wisconsin. At year-end 2025, including the main office, the Bank operated 57 bank branch locations, 47 of which are owned and 10 that are leased.
Removed
None of the owned properties are subject to a mortgage or similar encumbrance. Two formerly leased locations involved directors, with lease terms that management considers arms-length. Both of these leases were terminated during 2024. For additional disclosure, see Note 15, “Related Party Transactions,” of the Notes to Consolidated Financial Statements under Part II, Item 8.
Added
In connection with the MidWest One acquisition, the Bank acquired an additional 57 bank branch locations, 45 of 26 which are owned and 12 that are leased. In addition, Nicolet owns or leases other real property that, when considered in aggregate, is not significant to its financial position.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAt December 31, 2024, approximately $36 million remained available under this common stock repurchase program, or approximately 341,600 shares of common stock (based on the closing stock price of $104.91 on December 31, 2024). 28 Performance Graph The following graph shows the cumulative stockholder return on our common stock compared with the S&P 500 Index and the S&P U.S.
Biggest changeAt December 31, 2025, approximately $19 million remained available under this common stock repurchase program, or approximately 158,900 shares of common stock (based on the closing stock price of $121.30 on December 31, 2025).
These are not considered “repurchases” and, therefore, do not count against the maximum number of shares that may yet be purchased under the Board authorization. (b) The Board approved a common stock repurchase program which authorized, with subsequent modifications, the use of up to $276 million to repurchase outstanding shares of common stock.
These are not considered “repurchases” and, therefore, do not count against the maximum number of shares that may yet be purchased under the Board authorization. (b) The Board approved a common stock repurchase program which authorized, with subsequent modifications, the use of up to $336 million to repurchase outstanding shares of common stock.
Stock Repurchases . The following table contains information regarding purchases of Nicolet’s common stock made during fourth quarter 2024 by or on behalf of the Company or any “affiliated purchaser,” as defined by Rule 10b-18(a)(3) of the Exchange Act.
Stock Repurchases . The following table contains information regarding purchases of Nicolet’s common stock made during fourth quarter 2025 by or on behalf of the Company or any “affiliated purchaser,” as defined by Rule 10b-18(a)(3) of the Exchange Act.
The graph assumes the value of the investment in the Company’s common stock and in each index was $100 on December 31, 2019. Historical stock price performance shown on the graph is not necessarily indicative of the future price performance.
The graph assumes the value of the investment in the Company’s common stock and in each index was $100 on December 31, 2020. Historical stock price performance shown on the graph is not necessarily indicative of the future price performance.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stock. Nicolet’s common stock trades on the New York Stock Exchange under the symbol “NIC”. As of February 25, 2025, Nicolet had approximately 3,100 shareholders of record. Dividends . In 2023, we began paying dividends on our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stock. Nicolet’s common stock trades on the New York Stock Exchange under the symbol “NIC”. As of February 25, 2026, Nicolet had approximately 3,500 shareholders of record. Dividends . In 2023, we began paying dividends on our common stock.
Our Board declared quarterly cash dividends totaling $1.09 per share on our common stock in 2024. We currently intend to continue to pay comparable quarterly cash dividends on our common stock, subject to approval by our Board, although we may elect not to pay dividends or to change the amount of such dividends.
Our Board declared quarterly cash dividends totaling $1.24 per share on our common stock in 2025. We currently intend to continue to pay comparable quarterly cash dividends on our common stock, subject to approval by our Board, although we may elect not to pay dividends or to change the amount of such dividends.
BMI Banks Index for the period of December 31, 2019 to December 31, 2024. The S&P U.S. BMI Banks Index tracks the performance of all U.S. domiciled bank companies with float-adjusted market capitalization of at least $100 million.
BMI Banks Index for the period of December 31, 2020 to December 31, 2025. The S&P U.S. BMI Banks Index tracks the performance of all U.S. domiciled bank companies with float-adjusted market capitalization of at least $100 million.
Period: Total Number of Shares Purchased (#) (a) Average Price Paid per Share ($) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (#) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (#) (b) October 1 – October 31, 2024 932 $ 104.99 — November 1– November 30, 2024 11,901 $ 112.52 1,451 December 1 – December 31, 2024 91,080 $ 109.77 90,989 Total 103,913 $ 110.04 92,440 341,600 (a) During fourth quarter 2024, the Company withheld 2,347 common shares for minimum tax withholding settlements on restricted stock and the Company withheld 9,126 common shares to satisfy the exercise price and tax withholding requirements on stock option exercises.
Period: Total Number of Shares Purchased (#) (a) Average Price Paid per Share ($) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (#) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (#) (b) October 1 – October 31, 2025 25 $ 134.49 — November 1– November 30, 2025 4,706 $ 121.13 — December 1 – December 31, 2025 6,031 $ 129.87 — Total 10,762 $ 126.06 — 158,900 (a) During fourth quarter 2025, the Company withheld 3,878 common shares for minimum tax withholding settlements on restricted stock and the Company withheld 6,884 common shares to satisfy the exercise price and tax withholding requirements on stock option exercises.
Removed
This common stock repurchase program was last modified on April 19, 2022, and has no expiration date.
Added
On January 20, 2026, Nicolet’s board increased the amount authorized under the program by $60 million and the program has no expiration date. 27 Performance Graph The following graph shows the cumulative stockholder return on our common stock compared with the S&P 500 Index and the S&P U.S.
Removed
Period Ending Index 2019 2020 2021 2022 2023 2024 Nicolet Bankshares, Inc. $ 100.00 $ 89.84 $ 116.11 $ 108.04 $ 110.13 $ 145.27 S&P 500 Index 100.00 118.40 152.39 124.79 157.59 197.02 S&P U.S. BMI Bank Index 100.00 87.24 118.61 98.38 107.32 143.68 Source: S&P Global Market Intelligence ITEM 6. [RESERVED] 29
Added
The following performance graph does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that we specifically incorporate the performance graphs by reference therein.
Added
Period Ending Index 2020 2021 2022 2023 2024 2025 Nicolet Bankshares, Inc. $ 100.00 $ 129.24 $ 120.26 $ 122.57 $ 161.69 $ 188.80 S&P 500 Index 100.00 128.71 105.40 133.10 166.40 196.16 S&P U.S. BMI Bank Index 100.00 135.97 112.77 123.02 164.70 211.47 Source: S&P Global Market Intelligence ITEM 6. [RESERVED] 28

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeTables 2 and 3 present information to facilitate the review and discussion of selected average balance sheet items, tax-equivalent net interest income, interest rate spread, and net interest margin. 33 Table 2: Average Balance Sheet and Net Interest Income Analysis - Tax-Equivalent Basis Years Ended December 31, (in thousands) 2024 2023 2022 Average Balance Interest Average Yield/Rate Average Balance Interest Average Yield/Rate Average Balance Interest Average Yield/Rate ASSETS Interest-earning assets Total loans, including loan fees (1)(2) $ 6,505,103 $ 393,551 6.05 % $ 6,233,623 $ 341,332 5.48 % $ 5,255,646 $ 243,819 4.64 % Investment securities: Taxable 703,907 20,193 2.87 % 863,864 18,182 2.10 % 1,389,956 21,383 1.54 % Tax-exempt (2) 176,969 6,044 3.42 % 243,241 7,960 3.27 % 229,316 6,192 2.70 % Total investment securities 880,876 26,237 2.98 % 1,107,105 26,142 2.36 % 1,619,272 27,575 1.70 % Other interest-earning assets 397,905 20,562 5.17 % 331,111 17,494 5.28 % 232,531 4,437 1.91 % Total non-loan earning assets 1,278,781 46,799 3.66 % 1,438,216 43,636 3.03 % 1,851,803 32,012 1.73 % Total interest-earning assets 7,783,884 $ 440,350 5.66 % 7,671,839 $ 384,968 5.02 % 7,107,449 $ 275,831 3.88 % Other assets, net 760,535 735,723 730,246 Total assets $ 8,544,419 $ 8,407,562 $ 7,837,695 LIABILITIES AND STOCKHOLDERS’ EQUITY Interest-bearing liabilities Savings $ 763,097 $ 9,973 1.31 % $ 828,141 $ 9,891 1.19 % $ 875,530 $ 2,075 0.24 % Interest-bearing demand 880,823 14,931 1.70 % 877,832 12,627 1.44 % 999,700 4,382 0.44 % Money market accounts (“MMA”) 1,959,879 54,570 2.78 % 1,868,867 49,937 2.67 % 1,553,131 6,696 0.43 % Core time deposits 1,105,695 47,201 4.27 % 842,586 27,218 3.23 % 558,840 2,171 0.39 % Total interest-bearing core deposits 4,709,494 126,675 2.69 % 4,417,426 99,673 2.26 % 3,987,201 15,324 0.38 % Brokered deposits 750,499 34,899 4.65 % 615,209 26,151 4.25 % 490,871 6,428 1.31 % Total interest-bearing deposits 5,459,993 161,574 2.96 % 5,032,635 125,824 2.50 % 4,478,072 21,752 0.49 % Wholesale funding 162,612 8,726 5.37 % 304,190 15,522 5.10 % 298,852 12,205 4.08 % Total interest-bearing liabilities 5,622,605 170,300 3.03 % 5,336,825 141,346 2.65 % 4,776,924 33,957 0.71 % Noninterest-bearing demand deposits 1,755,045 2,054,792 2,135,852 Other liabilities 66,373 36,579 38,534 Stockholders’ equity 1,100,396 979,366 886,385 Total liabilities and stockholders’ equity $ 8,544,419 $ 8,407,562 $ 7,837,695 Tax-equivalent net interest income and rate spread $ 270,050 2.63 % $ 243,622 2.37 % $ 241,874 3.17 % Tax-equivalent adjustment and net free funds 1,985 0.84 % 2,106 0.81 % 1,913 0.23 % Net interest income and net interest margin $ 268,065 3.47 % $ 241,516 3.18 % $ 239,961 3.40 % (1) Nonaccrual loans and loans held for sale are included in the daily average loan balances outstanding.
Biggest changeTables 2 and 3 present information to facilitate the review and discussion of selected average balance sheet items, tax-equivalent net interest income, interest rate spread, and net interest margin. 32 Table 2: Average Balance Sheet and Net Interest Income Analysis - Tax-Equivalent Basis Years Ended December 31, (in thousands) 2025 2024 2023 Average Balance Interest Average Yield/Rate Average Balance Interest Average Yield/Rate Average Balance Interest Average Yield/Rate ASSETS Interest-earning assets Total loans, including loan fees (1)(2) $ 6,811,763 $ 421,645 6.19 % $ 6,505,103 $ 393,551 6.05 % $ 6,233,623 $ 341,332 5.48 % Investment securities: Taxable 750,134 24,082 3.21 % 703,907 20,193 2.87 % 863,864 18,182 2.10 % Tax-exempt (2) 148,042 5,337 3.61 % 176,969 6,044 3.42 % 243,241 7,960 3.27 % Total investment securities 898,176 29,419 3.28 % 880,876 26,237 2.98 % 1,107,105 26,142 2.36 % Other interest-earning assets 492,617 21,681 4.40 % 397,905 20,562 5.17 % 331,111 17,494 5.28 % Total non-loan earning assets 1,390,793 51,100 3.67 % 1,278,781 46,799 3.66 % 1,438,216 43,636 3.03 % Total interest-earning assets 8,202,556 $ 472,745 5.76 % 7,783,884 $ 440,350 5.66 % 7,671,839 $ 384,968 5.02 % Other assets, net 774,958 760,535 735,723 Total assets $ 8,977,514 $ 8,544,419 $ 8,407,562 LIABILITIES AND STOCKHOLDERS’ EQUITY Interest-bearing liabilities Savings $ 807,977 $ 10,000 1.24 % $ 763,097 $ 9,973 1.31 % $ 828,141 $ 9,891 1.19 % Interest-bearing demand 990,660 17,288 1.75 % 880,823 14,931 1.70 % 877,832 12,627 1.44 % Money market accounts (“MMA”) 1,998,831 47,511 2.38 % 1,959,879 54,570 2.78 % 1,868,867 49,937 2.67 % Core time deposits 1,299,481 51,373 3.95 % 1,105,695 47,201 4.27 % 842,586 27,218 3.23 % Total interest-bearing core deposits 5,096,949 126,172 2.48 % 4,709,494 126,675 2.69 % 4,417,426 99,673 2.26 % Brokered deposits 713,188 30,699 4.30 % 750,499 34,899 4.65 % 615,209 26,151 4.25 % Total interest-bearing deposits 5,810,137 156,871 2.70 % 5,459,993 161,574 2.96 % 5,032,635 125,824 2.50 % Wholesale funding 146,401 7,606 5.20 % 162,612 8,726 5.37 % 304,190 15,522 5.10 % Total interest-bearing liabilities 5,956,538 164,477 2.76 % 5,622,605 170,300 3.03 % 5,336,825 141,346 2.65 % Noninterest-bearing demand deposits 1,753,573 1,755,045 2,054,792 Other liabilities 69,314 66,373 36,579 Stockholders’ equity 1,198,089 1,100,396 979,366 Total liabilities and stockholders’ equity $ 8,977,514 $ 8,544,419 $ 8,407,562 Tax-equivalent net interest income and rate spread $ 308,268 3.00 % $ 270,050 2.63 % $ 243,622 2.37 % Tax-equivalent adjustment and net free funds 1,795 0.76 % 1,985 0.84 % 2,106 0.81 % Net interest income and net interest margin $ 306,473 3.76 % $ 268,065 3.47 % $ 241,516 3.18 % (1) Nonaccrual loans and loans held for sale are included in the daily average loan balances outstanding.
The effective tax rate for periods prior to July 1, 2023,effective date of this tax law change, assumed an effective tax rate of 25%, and periods subsequent to the effective date assumed an effective tax rate of 19.5%.
The effective tax rate for periods prior to July 1, 2023, the effective date of this tax law change, assumed an effective tax rate of 25%, and periods subsequent to the effective date assumed an effective tax rate of 19.5%.
Potential problem loans are generally defined to include loans rated as Substandard by management but that are in performing status; however, there are circumstances present which might adversely affect the ability of the borrower to comply with present repayment terms.
Potential problem loans are generally defined by management to include loans rated as Substandard by management but that are in performing status; however, there are circumstances present which might adversely affect the ability of the borrower to comply with present repayment terms.
Monetary items, such as cash, investments, loans, deposits and other borrowings, are those assets and liabilities which are or will be converted into a fixed number of dollars regardless of changes in prices. As a result, changes in interest rates have a more significant impact on a financial institution’s performance than does general inflation.
Monetary items, such as cash, investments, loans, deposits and borrowings, are those assets and liabilities which are or will be converted into a fixed number of dollars regardless of changes in prices. As a result, changes in interest rates have a more significant impact on a financial institution’s performance than does general inflation.
Nicolet considers accounting estimates to be critical to reported financial results if the accounting estimate requires management to make assumptions about matters that are highly uncertain and different estimates that management reasonably could have used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on the financial statements.
Nicolet considers accounting estimates to be critical to reported financial results if the accounting estimate requires management to make assumptions 47 about matters that are highly uncertain and different estimates that management reasonably could have used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on the financial statements.
Asset-liability management policies establish guidelines for acceptable limits on the sensitivity to changes in interest rates on earnings and market value of assets and liabilities. Such policies are set and monitored by management and the Board Asset and Liability Committee.
Asset-liability management policies establish guidelines for acceptable limits on the sensitivity to changes in interest rates on earnings and market value of assets and liabilities. Such policies are set and monitored by management and the Asset and Liability Committee.
The interest rate scenarios are used for analytical purposes only and do not necessarily represent management’s view of future market interest rate movements. Based on financial data at December 31, 2024 and 2023, the projected changes in net interest income over a one-year time horizon, versus the baseline, are presented in Table 15 below.
The interest rate scenarios are used for analytical purposes only and do not necessarily represent management’s view of future market interest rate movements. Based on financial data at December 31, 2025 and 2024, the projected changes in net interest income over a one-year time horizon, versus the baseline, are presented in Table 15 below.
As of December 31, 2024, management believed that adequate liquidity existed to meet all projected cash flow obligations. Nicolet’s primary sources of funds include the core deposit base, repayment and maturity of loans, investment securities calls, maturities, and sales, and procurement of brokered deposits or other wholesale funding.
As of December 31, 2025, management believed that adequate liquidity existed to meet all projected cash flow obligations. Nicolet’s primary sources of funds include the core deposit base, repayment and maturity of loans, investment securities calls, maturities, and sales, and procurement of brokered deposits or other wholesale funding.
The Company’s and the Bank’s regulatory capital ratios remain above minimum regulatory ratios, including the capital conservation buffer. At December 31, 2024, the Bank’s regulatory capital ratios qualify the Bank as well-capitalized under the prompt-corrective action framework. This strong base of capital has allowed Nicolet to be opportunistic in strategic growth.
The Company’s and the Bank’s regulatory capital ratios remain above minimum regulatory ratios, including the capital conservation buffer. At December 31, 2025, the Bank’s regulatory capital ratios qualify the Bank as well-capitalized under the prompt-corrective action framework. This strong base of capital has allowed Nicolet to be opportunistic in strategic growth.
See Note 9, “Short and Long-Term Borrowings,” of the Notes to Consolidated Financial Statements under Part II, Item 8 for additional disclosures and see section “Liquidity Management,” for information on available funding sources at December 31, 2024.
See Note 9, “Short and Long-Term Borrowings,” of the Notes to Consolidated Financial Statements under Part II, Item 8 for additional disclosures and see section “Liquidity Management,” for information on available funding sources at December 31, 2025.
Table 11: Investment Securities Portfolio Maturity Distribution (1) Securities AFS at December 31, 2024 Within One Year After One but Within Five Years After Five but Within Ten Years After Ten Years Mortgage- backed Securities Total Amortized Cost Total Fair Value (in thousands) Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Amount U.S.
Table 11: Investment Securities Portfolio Maturity Distribution (1) Securities AFS at December 31, 2025 Within One Year After One but Within Five Years After Five but Within Ten Years After Ten Years Mortgage- backed Securities Total Amortized Cost Total Fair Value (in thousands) Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Amount U.S.
Such financial instruments have varying levels of sensitivity to changes in market rates of interest. Market rates are highly sensitive to many factors beyond our control, including but not limited to general economic conditions and policies of governmental and regulatory authorities.
Such financial instruments have varying levels of sensitivity to changes in market rates of interest. Market rates are highly sensitive to many factors beyond our control, including but not limited to general economic conditions and policies of government and regulatory authorities.
Because interpretation and analysis involves judgment, current economic or business conditions can change, and future events are inherently difficult to predict, the anticipated amount of estimated credit losses and therefore the appropriateness of the ACL-Loans could change significantly.
Because interpretation and analysis involve judgment, current economic or business conditions can change, and future events are inherently difficult to predict, the anticipated amount of estimated credit losses and therefore the appropriateness of the ACL-Loans could change significantly.
The amounts presented below exclude amounts due for interest, if applicable, and include any unamortized premiums / discounts or other similar carrying value adjustments. As of December 31, 2024, Nicolet had the following contractual obligations.
The amounts presented below exclude amounts due for interest, if applicable, and include any unamortized premiums / discounts or other similar carrying value adjustments. As of December 31, 2025, Nicolet had the following contractual obligations.
Our operating income and net income depends, to a substantial extent, on “rate spread” (i.e., the difference between the income earned on loans, investments and other earning assets and the interest expense paid to obtain deposits and other funding liabilities).
Our operating income and net income depend, to a substantial extent, on “rate spread” (i.e., the difference between the income earned on loans, investments and other earning assets and the interest expense paid to obtain deposits and other funding liabilities).
For additional information regarding nonperforming assets see “BALANCE SHEET ANALYSIS – Nonperforming Assets.” 40 The ACL-Loans represents management’s estimate of expected credit losses in the Company’s loan portfolio at the balance sheet date.
For additional information regarding nonperforming assets see “BALANCE SHEET ANALYSIS – Nonperforming Assets.” 39 The ACL-Loans represents management’s estimate of expected credit losses in the Company’s loan portfolio at the balance sheet date.
The following table provides information on the maturity distribution of those time deposits, including the portion of those time deposits in excess of the FDIC insurance limits (over $250,000) as of December 31, 2024.
The following table provides information on the maturity distribution of those time deposits, including the portion of those time deposits in excess of the FDIC insurance limits (over $250,000) as of December 31, 2025.
The loan portfolio is widely diversified and included the following industries: 38 manufacturing, wholesaling, paper, packaging, food production and processing, agriculture, forest products, hospitality, retail, service, and businesses supporting the general building industry. The following chart provides the distribution of our commercial loan portfolio at December 31, 2024.
The loan portfolio is widely diversified and included the following industries: manufacturing, wholesaling, paper, packaging, food production and processing, agriculture, forest products, hospitality, retail, service, and businesses supporting the general building industry. The following chart provides the distribution of our commercial loan portfolio at December 31, 2025.
For a discussion of 2023 results compared to 2022, see the information under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 28, 2024, which information under that caption is incorporated herein by reference.
For a discussion of 2024 results compared to 2023, see the information under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 25, 2025, which information under that caption is incorporated herein by reference.
The Company’s most liquid assets are cash and due from banks and interest-earning deposits, which totaled $536 million and $491 million at December 31, 2024 and 2023, respectively. Balances of these liquid assets are dependent on our operating, investing, and financing activities during any given period.
The Company’s most liquid assets are cash and due from banks and interest-earning deposits, which totaled $660 million and $536 million at December 31, 2025 and 2024, respectively. Balances of these liquid assets are dependent on our operating, investing, and financing activities during any given period.
See also “Off-Balance Sheet Arrangements, Lending-Related Commitments and Contractual Obligations” and Note 6, “Goodwill and Other Intangibles and Servicing Rights” in the Notes to Consolidated Financial Statements, under Part II, Item 8. • Service charges on deposit accounts were $7 million, up $1 million (20%) over 2023, on growth in both accounts and account analysis fees. • Card interchange income grew $1 million (5%) to $14 million in 2024 largely due to higher volume and activity. • BOLI income increased $1 million (20%) to $5 million for 2024, attributable to higher average balances from the $11.5 million new BOLI purchased in mid-2024 and improvements in BOLI assets linked to market performance. 36 • The Company sponsors a nonqualifed deferred compensation (“NQDC”) plan for certain employees, that fluctuates based upon market valuations of the underlying plan assets.
See also “Off-Balance Sheet Arrangements, Lending-Related Commitments and Contractual Obligations” and Note 6, “Goodwill and Other Intangibles and Servicing Rights” in the Notes to Consolidated Financial Statements, under Part II, Item 8. • Service charges on deposit accounts were $8 million, up $1 million (11%) over 2024, on growth in both accounts and account analysis fees. • Card interchange income grew $1 million (7%) to $15 million in 2025 largely due to higher volume and activity. • BOLI income increased $1 million (17%) to $6 million for 2025, attributable to higher average balances from the $11.5 million new BOLI purchased in mid-2024 and improvements in BOLI assets linked to market performance. 35 • The Company sponsors a nonqualified deferred compensation (“NQDC”) plan for certain employees, that fluctuates based upon market valuations of the underlying plan assets.
In addition to the discussion that follows, the investment securities portfolio accounting policies are described in Note 1, “Nature of Business and Significant Accounting Policies,” and additional disclosures are included in Note 3, “Securities and Other Investments,” in the Notes to Consolidated Financial Statements, under Part II, Item 8. 43 At December 31, 2024, the investment securities portfolio totaled $806 million (representing 9% of total assets), compared to investment securities of $803 million (representing 9% of total assets) at December 31, 2023, all classified as securities AFS.
In addition to the discussion that follows, the investment securities portfolio accounting policies are described in Note 1, “Nature of Business and Significant Accounting Policies,” and additional disclosures are included in Note 3, “Securities and Other Investments,” in the Notes to Consolidated Financial Statements, under Part II, Item 8. 42 At December 31, 2025, the investment securities portfolio totaled $860 million (representing 9% of total assets), compared to investment securities of $806 million (representing 9% of total assets) at December 31, 2024, all classified as securities AFS.
Management believes the ACL-Loans is 48 appropriate at December 31, 2024. The allowance analysis is reviewed by the Board on a quarterly basis in compliance with regulatory requirements.
Management believes the ACL-Loans is appropriate at December 31, 2025. The allowance analysis is reviewed by the Board on a quarterly basis in compliance with regulatory requirements.
Through an ongoing repurchase program, the Board has authorized the repurchase of Nicolet’s common stock as an alternative use of capital. At December 31, 2024, there remained $36 million authorized under this 47 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.
Through an ongoing repurchase program, the Board has authorized the repurchase of Nicolet’s common stock as an alternative use of capital. At December 31, 2025, there remained $19 million authorized under this 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.
At December 31, 2024, nonperforming assets were $29 million and represented 0.33% of total assets, compared to $28 million or 0.33% of total assets at December 31, 2023. The level of potential problem loans is another predominant factor in determining the relative level of risk in the loan portfolio and in determining the appropriate level of the ACL-Loans.
At December 31, 2025, nonperforming assets were $32 million and represented 0.35% of total assets, compared to $29 million or 0.33% of total assets at December 31, 2024. The level of potential problem loans is another predominant factor in determining the relative level of risk in the loan portfolio and in determining the appropriate level of the ACL-Loans.
At December 31, 2024, approximately 44% of the investment securities portfolio was pledged as collateral to secure public deposits and borrowings, as applicable, and for liquidity or other purposes as required by regulation.
At December 31, 2025, approximately 58% of the investment securities portfolio was pledged as collateral to secure public deposits and borrowings, as applicable, and for liquidity or other purposes as required by regulation.
At December 31, 2024, the ACL-Loans was $66 million (representing 1.00% of period end loans) compared to $64 million (representing 1.00% of period end loans) at December 31, 2023. The increase in the ACL-Loans during both 2024 and 2023 was due to solid organic loan growth. Net charge-offs remain negligible.
At December 31, 2025, the ACL-Loans was $69 million (representing 1.01% of period end loans) compared to $66 million (representing 1.00% of period end loans) at December 31, 2024. The increase in the ACL-Loans during both 2025 and 2024 was due to solid organic loan growth. Net charge-offs remain negligible.
Nicolet also had other investments of $61 million and $58 million at December 31, 2024 and 2023, respectively, consisting of capital stock in the Federal Reserve and the Federal Home Loan Bank (“FHLB”) (required as members of the Federal Reserve Bank System and the FHLB System), equity securities with readily determinable fair values, and to a lesser degree equity investments in other private companies.
Nicolet also had other investments of $63 million and $62 million at December 31, 2025 and 2024, respectively, consisting primarily of capital stock in the Federal Reserve and the Federal Home Loan Bank (“FHLB”) (required as members of the Federal Reserve Bank System and the FHLB System), equity securities with readily determinable fair values, and to a lesser degree equity investments in other private companies.
The interest on all long-term borrowings is current. There were no short-term borrowings outstanding at either December 31, 2024 or December 31, 2023. Long-term borrowings were $161 million and $167 million at December 31, 2024 and 2023, respectively.
The interest on all long-term borrowings is current. There were no short-term borrowings outstanding at either December 31, 2025 or December 31, 2024. Long-term borrowings were $135 million and $161 million at December 31, 2025 and 2024, respectively.
Commercial Loan Portfolio by Industry Type (based on NAICS codes) 39 Table 7: Loan Maturity Distribution The following table presents the maturity distribution of the loan portfolio at December 31, 2024.
Commercial Loan Portfolio by Industry Type (based on NAICS codes) 38 Table 7: Loan Maturity Distribution The following table presents the maturity distribution of the loan portfolio at December 31, 2025.
A valuation allowance is required if it is more likely than not that some portion of the deferred tax asset will not be realized. This analysis involves the use of estimates and assumptions concerning accounting pronouncements and federal and state tax codes; therefore, income taxes are considered a critical accounting estimate.
A valuation allowance is required if it is more likely than not that some portion of the deferred tax asset will not be realized. This analysis involves the use of estimates and assumptions concerning accounting pronouncements and federal and state tax codes.
At December 31, 2024, interest rate lock commitments to originate residential mortgage loans held for sale of $13 million (included in the commitments to extend credit) and forward commitments to sell residential mortgage loans held for sale of $12 million are considered derivative instruments.
At December 31, 2025, interest rate lock commitments to originate residential mortgage loans held for sale of $28 million (included in the commitments to extend credit) and forward commitments to sell residential mortgage loans held for sale of $24 million are considered derivative instruments.
At December 31, 2024, agricultural and commercial and industrial loans represented the largest segments of Nicolet’s loan portfolio, with each at 20% of the total loan portfolio. The next largest segments were CRE investment and residential first mortgage, with each representing 18% of the total loan portfolio.
At December 31, 2025, agricultural and commercial and industrial loans represented the largest segments of Nicolet’s loan portfolio, at 21% and 20%, respectively, of the total loan portfolio. The next largest segments were CRE investment and residential first mortgage, with each representing 17% of the total loan portfolio.
Notable contributions to the change in noninterest income were: • Wealth management fee income was $27 million for 2024, up $4 million (16%) from 2023, on growth in accounts and assets under management. • Mortgage income includes net gains received from the sale of residential real estate loans into the secondary market, capitalized mortgage servicing rights (“MSRs”), servicing fees net of MSR amortization, fair value marks on the mortgage interest rate lock commitments and forward commitments (“mortgage derivatives”), and MSR valuation changes, if any.
Notable contributions to the change in noninterest income were: • Wealth management fee income was $30 million for 2025, up $2 million (8%) from 2024, including favorable market-related changes, as well as growth in accounts and assets under management. • Mortgage income includes net gains received from the sale of residential real estate loans into the secondary market, capitalized mortgage servicing rights (“MSRs”), servicing fees net of MSR amortization, fair value marks on the mortgage interest rate lock commitments and forward commitments (“mortgage derivatives”), and MSR valuation changes, if any.
The largest portions of the ACL-Loans were allocated to commercial & industrial loans and CRE investment loans, representing 24%, and 22%, respectively, of the ACL-Loans at December 31, 2024.
The largest portions of the ACL-Loans were allocated to commercial & industrial loans and CRE investment loans, representing 24%, and 22%, respectively, of the ACL-Loans at December 31, 2025, which was unchanged from December 31, 2024.
The accounting estimates we consider to be critical include the determination of the allowance for credit losses and income taxes. In addition to the discussion that follows, the accounting policies related to these critical estimates are included in Note 1, “Nature of Business and Significant Accounting Policies,” in the Notes to Consolidated Financial Statements, under Part II, Item 8.
The accounting estimate we consider to be critical is the determination of the allowance for credit losses. In addition to the discussion that follows, the accounting policies related to this critical estimate is included in Note 1, “Nature of Business and Significant Accounting Policies,” in the Notes to Consolidated Financial Statements, under Part II, Item 8.
These agencies may require the Company to make additions to the ACL-Loans or may require that certain loan balances be charged off or downgraded into classified loan categories when their credit evaluations differ from those of management based on their judgments of collectability from information available to them at the time of their examination.
In addition, various regulatory agencies periodically review the ACL-Loans, and could require the Company to make additions to the ACL-Loans or require that certain loan balances be charged off or downgraded into classified loan categories when their credit evaluations differ from those of management based on their judgments of collectability from information available to them at the time of their examination.
The Parent Company uses cash for normal expenses, debt service requirements and, when opportune, for common stock repurchases or investment in other strategic actions such as mergers or acquisitions. At December 31, 2024, the Parent Company had $189 million in cash.
The Parent Company uses cash for normal expenses, dividend payments, debt service requirements and, when opportune, for common stock repurchases, repayment of debt, or investment in other strategic actions such as mergers or acquisitions. At December 31, 2025, the Parent Company had $188 million in cash.
Nonperforming assets were $29 million and represented 0.33% of total assets at December 31, 2024, compared to $28 million or 0.33% at year-end 2023. The allowance for credit losses-loans was $66 million (1.00% of loans) at December 31, 2024, compared to $64 million (1.00% of loans) at December 31, 2023.
Nonperforming assets were $32 million and represented 0.35% of total assets at December 31, 2025, compared to $29 million or 0.33% at year-end 2024. The allowance for credit losses-loans was $69 million (1.01% of loans) at December 31, 2025, compared to $66 million (1.00% of loans) at December 31, 2024.
Table 15: Interest Rate Sensitivity December 31, 2024 December 31, 2023 200 bps decrease in interest rates (2.5) % (1.1) % 100 bps decrease in interest rates (1.3) % (0.6) % 100 bps increase in interest rates 1.3 % 0.6 % 200 bps increase in interest rates 2.6 % 1.2 % 46 Actual results may differ from these simulated results due to timing, magnitude and frequency of interest rate changes, as well as changes in market conditions and their impact on customer behavior and management strategies.
The results were in compliance with Nicolet’s policy guidelines. 45 Table 15: Interest Rate Sensitivity December 31, 2025 December 31, 2024 200 bps decrease in interest rates (3.8) % (2.5) % 100 bps decrease in interest rates (2.0) % (1.3) % 100 bps increase in interest rates 2.1 % 1.3 % 200 bps increase in interest rates 4.2 % 2.6 % Actual results may differ from these simulated results due to timing, magnitude and frequency of interest rate changes, as well as changes in market conditions and their impact on customer behavior and management strategies.
The Company had a $16 million valuation allowance at December 31, 2024, compared to a valuation allowance of $9 million at December 31, 2023.
The Company had a $18 million valuation allowance at December 31, 2025, compared to a valuation allowance of $16 million at 36 December 31, 2024.
BALANCE SHEET ANALYSIS Loans Nicolet services a diverse customer base primarily throughout Wisconsin, Michigan and Minnesota. The Company concentrates on originating loans in its local markets and assisting current loan customers. Nicolet actively utilizes government loan programs such as those provided by the U.S. Small Business Administration (“SBA”) and the U.S. Department of Agriculture’s Farm Service Agency (“FSA”).
The Company concentrates on originating loans in its local markets and assisting current loan customers. Nicolet actively utilizes government loan programs such as those provided by the U.S. Small Business Administration (“SBA”) and the U.S. Department of Agriculture’s Farm Service Agency (“FSA”).
Total stockholders’ equity was $1.2 billion at December 31, 2024, an 30 increase of $134 million since December 31, 2023, with solid earnings, stock option exercises, and improvement in the securities portfolio market valuation, partly offset by payment of the quarterly common stock dividend and common stock repurchases.
Total stockholders’ equity was $1.3 billion at December 31, 2025, an increase of $85 million since December 31, 2024, with solid earnings and favorable movements in the securities portfolio market valuation, partly offset by payment of the quarterly common stock dividend and common stock repurchases.
The increase in tax-equivalent net interest income was attributable to net favorable volumes (which added $22 million) and net favorable rates (which increased net interest income $5 million). Average interest-earning assets increased to $7.8 billion for 2024, $112 million (1%) higher than 2023. Average loans increased $271 million (4%) to $6.5 billion, on solid organic loan growth.
The increase in tax-equivalent net interest income was attributable to net favorable volumes (which added $15 million) and net favorable rates (which increased net interest income $23 million). Average interest-earning assets increased to $8.2 billion for 2025, $419 million (5%) higher than 2024. Average loans increased $307 million (5%) to $6.8 billion, on solid organic loan growth.
Net mortgage income was $10 million for 2024, up $3 million (42%) between the years, mostly due to higher secondary market volumes and the related gains on sales.
Net mortgage income was $12 million for 2025, up $2 million (18%) between the years, mostly due to higher secondary market volumes and the related gains on sales.
A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is presented in the table below. 32 Table 1A: Reconciliation of Non-GAAP Financial Measures At and for the years ended December 31, (in thousands, except per share data) 2024 2023 2022 Adjusted net income reconciliation: Net income (GAAP) $ 124,059 $ 61,516 $ 94,260 Adjustments: Provision expense (1) — 2,340 8,000 Assets (gains) losses, net (2) (4,212) 32,808 (3,130) Merger-related expense — 189 1,664 Contract termination charge — 2,689 — Adjustments subtotal (4,212) 38,026 6,534 Tax on Adjustments (3) (821) 7,415 1,634 Tax impact of Wisconsin tax law change (3) — 9,118 — Adjusted net income (Non-GAAP) $ 120,668 $ 101,245 $ 99,161 Diluted EPS: Diluted EPS (GAAP) $ 8.05 $ 4.08 $ 6.56 Adjusted Diluted EPS (Non-GAAP) $ 7.83 $ 6.72 $ 6.90 Tangible assets: Total assets $ 8,796,795 $ 8,468,678 $ 8,763,969 Goodwill and other intangibles, net 388,140 394,366 402,438 Tangible assets $ 8,408,655 $ 8,074,312 $ 8,361,531 Tangible common equity: Stockholders’ equity (common) $ 1,172,898 $ 1,039,007 $ 972,529 Goodwill and other intangibles, net 388,140 394,366 402,438 Tangible common equity $ 784,758 $ 644,641 $ 570,091 Tangible average common equity: Average stockholders’ equity (common) $ 1,100,396 $ 979,366 $ 886,385 Average goodwill and other intangibles, net 391,343 398,106 361,471 Average tangible common equity $ 709,053 $ 581,260 $ 524,914 Note: Numbers may not sum due to rounding.
A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is presented in the table below. 31 Table 1A: Reconciliation of Non-GAAP Financial Measures At and for the years ended December 31, (in thousands, except per share data) 2025 2024 2023 Adjusted net income reconciliation: Net income (GAAP) $ 150,686 $ 124,059 $ 61,516 Adjustments: Provision expense (1) — — 2,340 Assets (gains) losses, net (2) (1,163) (4,212) 32,808 Merger-related expense 1,956 — 189 Contract termination charge — — 2,689 Adjustments subtotal 793 (4,212) 38,026 Tax on Adjustments (3) 155 (821) 7,415 Tax impact of Wisconsin tax law change (3) — — 9,118 Adjusted net income (Non-GAAP) $ 151,324 $ 120,668 $ 101,245 Diluted EPS: Diluted EPS (GAAP) $ 9.78 $ 8.05 $ 4.08 Adjusted Diluted EPS (Non-GAAP) $ 9.82 $ 7.83 $ 6.72 Tangible assets: Total assets $ 9,185,107 $ 8,796,795 $ 8,468,678 Goodwill and other intangibles, net 382,400 388,140 394,366 Tangible assets $ 8,802,707 $ 8,408,655 $ 8,074,312 Tangible common equity: Stockholders’ equity (common) $ 1,257,662 $ 1,172,898 $ 1,039,007 Goodwill and other intangibles, net 382,400 388,140 394,366 Tangible common equity $ 875,262 $ 784,758 $ 644,641 Tangible average common equity: Average stockholders’ equity (common) $ 1,198,089 $ 1,100,396 $ 979,366 Average goodwill and other intangibles, net 385,048 391,343 398,106 Average tangible common equity $ 813,041 $ 709,053 $ 581,260 Note: Numbers may not sum due to rounding.
The components of the ACL-Loans are detailed further in Tables 8 and 9 below. 41 Table 8: Allowance for Credit Losses - Loans (in thousands) Years Ended December 31, 2024 2023 2022 Allowance for credit losses - loans: Beginning balance $ 63,610 $ 61,829 $ 49,672 ACL on PCD loans acquired — — 1,937 Net charge-offs: Commercial & industrial (867) 80 (86) Owner-occupied CRE 124 (526) (555) Agricultural — (63) — CRE investment — — 169 Construction & land development — — — Residential construction — — — Residential first mortgage 33 (2) (57) Residential junior mortgage 9 (95) 1 Retail & other (337) (263) (202) Total net charge-offs (1,038) (869) (730) Provision for credit losses 3,750 2,650 10,950 Ending balance of ACL-Loans $ 66,322 $ 63,610 $ 61,829 Ratio of net charge-offs to average loans by loan composition: Commercial & industrial 0.06 % (0.01) % 0.01 % Owner-occupied CRE (0.01) % 0.05 % 0.06 % Agricultural — % 0.01 % — % CRE investment — % — % (0.02) % Construction & land development — % — % — % Residential construction — % — % — % Residential first mortgage — % — % 0.01 % Residential junior mortgage — % 0.05 % — % Retail & other 0.60 % 0.48 % 0.38 % Total net charge-offs to average loans 0.02 % 0.01 % 0.01 % The allocation of the ACL-Loans by loan category for each of the past three years is shown in Table 9.
Table 8: Allowance for Credit Losses - Loans (in thousands) Years Ended December 31, 2025 2024 2023 Allowance for credit losses - loans: Beginning balance $ 66,322 $ 63,610 $ 61,829 Net charge-offs: Commercial & industrial (1,396) (867) 80 Owner-occupied CRE 6 124 (526) Agricultural (65) — (63) CRE investment — — — Construction & land development — — — Residential construction — — — Residential first mortgage (97) 33 (2) Residential junior mortgage 2 9 (95) Retail & other (266) (337) (263) Total net charge-offs (1,816) (1,038) (869) Provision for credit losses 4,300 3,750 2,650 Ending balance of ACL-Loans $ 68,806 $ 66,322 $ 63,610 Ratio of net charge-offs to average loans by loan composition: Commercial & industrial 0.10 % 0.06 % (0.01) % Owner-occupied CRE — % (0.01) % 0.05 % Agricultural — % — % 0.01 % CRE investment — % — % — % Construction & land development — % — % — % Residential construction — % — % — % Residential first mortgage 0.01 % — % — % Residential junior mortgage — % — % 0.05 % Retail & other 0.62 % 0.60 % 0.48 % Total net charge-offs to average loans 0.03 % 0.02 % 0.01 % The allocation of the ACL-Loans by loan category for each of the past three years is shown in Table 9.
For additional information regarding asset quality and the ACL-Loans, see “BALANCE SHEET ANALYSIS — Loans,” and “— Allowance for Credit Losses - Loans” and “—Nonperforming Assets.” Noninterest Income Table 4: Noninterest Income (in thousands) Years Ended December 31, Change From Prior Year 2024 2023 2022 $ Change 2024 % Change 2024 $ Change 2023 % Change 2023 Trust services fee income $ 10,085 $ 8,614 $ 7,947 $ 1,471 17 % $ 667 8 % Brokerage fee income 17,367 15,133 12,923 2,234 15 % 2,210 17 % Wealth management fee income 27,452 23,747 20,870 3,705 16 % 2,877 14 % Mortgage income, net 10,177 7,164 8,497 3,013 42 % (1,333) (16) % Service charges on deposit accounts 7,184 5,976 6,104 1,208 20 % (128) (2) % Card interchange income 13,661 12,991 11,643 670 5 % 1,348 12 % Bank owned life insurance (“BOLI”) income 5,448 4,524 3,818 924 20 % 706 18 % Deferred compensation plan asset market valuations 1,198 1,937 (2,040) (739) (38) % 3,977 N/M LSR income, net 4,405 4,425 (1,366) (20) — % 5,791 N/M Other income 8,530 8,016 7,264 514 6 % 752 10 % Noninterest income without net gains 78,055 68,780 54,790 9,275 13 % 13,990 26 % Asset gains (losses), net 4,212 (32,808) 3,130 37,020 N/M (35,938) N/M Total noninterest income $ 82,267 $ 35,972 $ 57,920 $ 46,295 129 % $ (21,948) (38) % N/M means not meaningful.
For additional information regarding asset quality and the ACL-Loans, see “BALANCE SHEET ANALYSIS — Loans,” and “— Allowance for Credit Losses - Loans” and “—Nonperforming Assets.” Noninterest Income Table 4: Noninterest Income (in thousands) Years Ended December 31, Change From Prior Year 2025 2024 2023 $ Change 2025 % Change 2025 $ Change 2024 % Change 2024 Trust services fee income $ 11,221 $ 10,085 $ 8,614 $ 1,136 11 % $ 1,471 17 % Brokerage fee income 18,390 17,367 15,133 1,023 6 % 2,234 15 % Wealth management fee income 29,611 27,452 23,747 2,159 8 % 3,705 16 % Mortgage income, net 12,054 10,177 7,164 1,877 18 % 3,013 42 % Service charges on deposit accounts 8,003 7,184 5,976 819 11 % 1,208 20 % Card interchange income 14,560 13,661 12,991 899 7 % 670 5 % Bank owned life insurance (“BOLI”) income 6,360 5,448 4,524 912 17 % 924 20 % Deferred compensation plan asset market valuations 2,919 1,198 1,937 1,721 144 % (739) (38) % LSR income, net 3,319 4,405 4,425 (1,086) (25) % (20) — % Other income 7,578 8,530 8,016 (952) (11) % 514 6 % Noninterest income without net gains 84,404 78,055 68,780 6,349 8 % 9,275 13 % Asset gains (losses), net 1,163 4,212 (32,808) (3,049) N/M 37,020 N/M Total noninterest income $ 85,567 $ 82,267 $ 35,972 $ 3,300 4 % $ 46,295 129 % N/M means not meaningful.
Table 9: Allocation of the Allowance for Credit Losses - Loans December 31, 2024 December 31, 2023 December 31, 2022 (in thousands) Allocated Allowance % of Loan Portfolio ACL Category as a % of Total ACL Allocated Allowance % of Loan Portfolio ACL Category as a % of Total ACL Allocated Allowance % of Loan Portfolio ACL Category as a % of Total ACL Commercial & industrial $ 16,147 20 % 24 % $ 15,225 20 % 24 % $ 16,350 21 % 26 % Owner-occupied CRE 5,362 14 % 8 % 9,082 15 % 14 % 9,138 15 % 15 % Agricultural 9,957 20 % 15 % 12,629 18 % 20 % 9,762 18 % 16 % CRE investment 14,616 18 % 22 % 12,693 18 % 20 % 12,744 19 % 21 % Construction & land development 2,658 4 % 4 % 2,440 5 % 4 % 2,572 5 % 4 % Residential construction 1,234 1 % 2 % 916 1 % — % 1,412 2 % 2 % Residential first mortgage 12,590 18 % 19 % 7,320 19 % 12 % 6,976 16 % 11 % Residential junior mortgage 2,827 4 % 4 % 2,098 3 % 4 % 1,846 3 % 3 % Retail & other 931 1 % 2 % 1,207 1 % 2 % 1,029 1 % 2 % Total ACL-Loans $ 66,322 100 % 100 % $ 63,610 100 % 100 % $ 61,829 100 % 100 % Nonperforming Assets As part of its overall credit risk management process, management is committed to an aggressive problem loan identification philosophy.
This change in ACL-Loans allocation was attributable to changes in current and forecasted risk trends within loan categories, as well as changes in loan portfolio composition. 40 Table 9: Allocation of the Allowance for Credit Losses - Loans December 31, 2025 December 31, 2024 December 31, 2023 (in thousands) Allocated Allowance % of Loan Portfolio ACL Category as a % of Total ACL Allocated Allowance % of Loan Portfolio ACL Category as a % of Total ACL Allocated Allowance % of Loan Portfolio ACL Category as a % of Total ACL Commercial & industrial $ 16,905 20 % 24 % $ 16,147 20 % 24 % $ 15,225 20 % 24 % Owner-occupied CRE 5,289 14 % 8 % 5,362 14 % 8 % 9,082 15 % 14 % Agricultural 9,434 21 % 14 % 9,957 20 % 15 % 12,629 18 % 20 % CRE investment 15,038 17 % 22 % 14,616 18 % 22 % 12,693 18 % 20 % Construction & land development 3,611 5 % 5 % 2,658 4 % 4 % 2,440 5 % 4 % Residential construction 1,250 1 % 2 % 1,234 1 % 2 % 916 1 % — % Residential first mortgage 13,310 17 % 19 % 12,590 18 % 19 % 7,320 19 % 12 % Residential junior mortgage 3,351 4 % 5 % 2,827 4 % 4 % 2,098 3 % 4 % Retail & other 618 1 % 1 % 931 1 % 2 % 1,207 1 % 2 % Total ACL-Loans $ 68,806 100 % 100 % $ 66,322 100 % 100 % $ 63,610 100 % 100 % Nonperforming Assets As part of its overall credit risk management process, management is committed to an aggressive problem loan identification philosophy.
As a result, the net interest margin was 3.47% for 2024, up 29 bps compared to 3.18% for 2023. 35 Provision for Credit Losses The provision for credit losses for 2024 was $3.9 million (comprised of $3.8 million related to the ACL-Loans and $0.1 million for the ACL on unfunded commitments).
As a result, the net interest margin was 3.76% for 2025, up 29 bps compared to 3.47% for 2024. 34 Provision for Credit Losses The provision for credit losses for 2025 was $4.3 million (comprised of $4.3 million related to the ACL-Loans, partly offset by a $0.1 million reduction related to the ACL on unfunded commitments).
In contrast, the Federal Reserve decreased short-term interest rates a total of 100 bps during the second half of 2024, resulting in a Federal Funds range of 4.25% to 4.50% as of December 31, 2024. Tax-equivalent net interest income was $270 million for 2024, an increase of $26 million (11%) over 2023.
During the second half of 2025, the Federal Reserve decreased short-term interest rates a total of 75 bps, resulting in a Federal Funds range of 3.50% to 3.75% at December 31, 2025. Tax-equivalent net interest income was $308 million for 2025, an increase of $38 million (14%) over 2024.
This philosophy has been implemented through the ongoing monitoring and review of all pools of risk in the loan portfolio to identify problem loans early and minimize the risk of loss. Management continues to actively work with customers and 42 monitor credit risk from the ongoing macroeconomic challenges.
This philosophy has been implemented through the ongoing monitoring and review of all pools of risk in the loan portfolio to identify problem loans early and minimize the risk of loss.
(2) Includes the gains / (losses) on other assets and investments, as well as the impact of the March 2023 balance sheet repositioning which included the sale of $500 million (par value) U.S.
(1) Provision expense for 2023 is attributable to the expected loss on a bank subordinated debt investment. (2) Includes the gains / (losses) on other assets and investments, as well as the impact of the March 2023 balance sheet repositioning which included the sale of $500 million (par value) U.S.
See also “Noninterest Expense” for the offsetting fair value change to the NQDC plan liabilities and Note 10, “Employee and Director Benefit Plans” in the Notes to Consolidated Financial Statements, under Part II, Item 8, for additional information on the NQDC plan. • Other income grew $1 million to $9 million for 2024, and included increases in card incentives income and swap fees. • Net asset gains of $4 million in 2024 were primarily attributable to gains of $2 million on the sale of available for sale securities and other investments, $1 million of favorable fair value marks on equity securities, and a $1 million gain on the early extinguishment on Nicolet subordinated notes.
See also “Noninterest Expense” for the offsetting fair value change to the NQDC plan liabilities and Note 10, “Employee and Director Benefit Plans” in the Notes to Consolidated Financial Statements, under Part II, Item 8, for additional information on the NQDC plan. • Other income declined $1 million to $8 million for 2025, largely due to timing of card incentive income, as well as lower swap and broker fees. • Net asset gains of $1 million in 2025 were primarily attributable to favorable fair value marks on equity securities.
Table 6: Period End Loan Composition December 31, 2024 December 31, 2023 December 31, 2022 (in thousands) Amount % of Total Amount % of Total Amount % of Total Commercial & industrial $ 1,319,763 20 % $ 1,284,009 20 % $ 1,304,819 21 % Owner-occupied CRE 940,367 14 % 956,594 15 % 954,599 15 % Agricultural 1,322,038 20 % 1,161,531 18 % 1,088,607 18 % Commercial 3,582,168 54 % 3,402,134 53 % 3,348,025 54 % CRE investment 1,221,826 18 % 1,142,251 18 % 1,149,949 19 % Construction & land development 239,694 4 % 310,110 5 % 318,600 5 % Commercial real estate 1,461,520 22 % 1,452,361 23 % 1,468,549 24 % Commercial-based loans 5,043,688 76 % 4,854,495 76 % 4,816,574 78 % Residential construction 96,110 1 % 75,726 1 % 114,392 2 % Residential first mortgage 1,196,158 18 % 1,167,109 19 % 1,016,935 16 % Residential junior mortgage 234,634 4 % 200,884 3 % 177,332 3 % Residential real estate 1,526,902 23 % 1,443,719 23 % 1,308,659 21 % Retail & other 55,994 1 % 55,728 1 % 55,266 1 % Retail-based loans 1,582,896 24 % 1,499,447 24 % 1,363,925 22 % Total loans $ 6,626,584 100 % $ 6,353,942 100 % $ 6,180,499 100 % As noted in Table 6 above, the loan portfolio at December 31, 2024 was 76% commercial-based and 24% retail-based, unchanged from December 31, 2023, with a slight shift in the underlying mix of each.
Table 6: Period End Loan Composition December 31, 2025 December 31, 2024 December 31, 2023 (in thousands) Amount % of Total Amount % of Total Amount % of Total Commercial & industrial $ 1,367,522 20 % $ 1,319,763 20 % $ 1,284,009 20 % Owner-occupied CRE 939,587 14 % 940,367 14 % 956,594 15 % Agricultural 1,415,425 21 % 1,322,038 20 % 1,161,531 18 % Commercial 3,722,534 55 % 3,582,168 54 % 3,402,134 53 % CRE investment 1,188,351 17 % 1,221,826 18 % 1,142,251 18 % Construction & land development 326,638 5 % 239,694 4 % 310,110 5 % Commercial real estate 1,514,989 22 % 1,461,520 22 % 1,452,361 23 % Commercial-based loans 5,237,523 77 % 5,043,688 76 % 4,854,495 76 % Residential construction 95,268 1 % 96,110 1 % 75,726 1 % Residential first mortgage 1,193,683 17 % 1,196,158 18 % 1,167,109 19 % Residential junior mortgage 268,188 4 % 234,634 4 % 200,884 3 % Residential real estate 1,557,139 22 % 1,526,902 23 % 1,443,719 23 % Retail & other 41,683 1 % 55,994 1 % 55,728 1 % Retail-based loans 1,598,822 23 % 1,582,896 24 % 1,499,447 24 % Total loans $ 6,836,345 100 % $ 6,626,584 100 % $ 6,353,942 100 % As noted in Table 6 above, the loan portfolio at December 31, 2025 was 77% commercial-based and 23% retail-based, a slight shift in the underlying loan composition mix compared to December 31, 2024.
Table 12: Period End Deposit Composition (in thousands) December 31, 2024 December 31, 2023 December 31, 2022 Amount % of Total Amount % of Total Amount % of Total Noninterest-bearing demand $ 1,791,228 24 % $ 1,958,709 27 % $ 2,361,816 33 % Interest-bearing demand 1,168,560 16 % 1,055,520 15 % 1,279,850 18 % Money market 1,942,367 26 % 1,891,287 26 % 1,707,619 24 % Savings 774,707 11 % 768,401 11 % 931,417 13 % Time 1,726,822 23 % 1,523,883 21 % 898,219 12 % Total deposits $ 7,403,684 100 % $ 7,197,800 100 % $ 7,178,921 100 % Brokered transaction accounts $ 163,580 2 % $ 166,861 2 % $ 252,829 3 % Brokered time deposits 586,852 8 % 448,582 6 % 339,066 5 % Total brokered deposits $ 750,432 10 % $ 615,443 8 % $ 591,895 8 % Customer transaction accounts $ 5,513,282 75 % $ 5,507,056 77 % $ 6,027,873 84 % Customer time deposits 1,139,970 15 % 1,075,301 15 % 559,153 8 % Total customer deposits (core) $ 6,653,252 90 % $ 6,582,357 92 % $ 6,587,026 92 % 44 Total deposits were $7.4 billion at December 31, 2024, a $206 million (3%) increase over year-end 2023, with growth in money market and time deposits, partly offset by lower noninterest-bearing demand deposits.
Table 12: Period End Deposit Composition (in thousands) December 31, 2025 December 31, 2024 December 31, 2023 Amount % of Total Amount % of Total Amount % of Total Noninterest-bearing demand $ 1,828,928 24 % $ 1,791,228 24 % $ 1,958,709 27 % Interest-bearing demand 1,263,276 16 % 1,168,560 16 % 1,055,520 15 % Money market 2,056,550 26 % 1,942,367 26 % 1,891,287 26 % Savings 834,520 11 % 774,707 11 % 768,401 11 % Time 1,747,497 23 % 1,726,822 23 % 1,523,883 21 % Total deposits $ 7,730,771 100 % $ 7,403,684 100 % $ 7,197,800 100 % Brokered transaction accounts $ 175,776 2 % $ 163,580 2 % $ 166,861 2 % Brokered time deposits 405,050 5 % 586,852 8 % 448,582 6 % Total brokered deposits $ 580,826 7 % $ 750,432 10 % $ 615,443 8 % Customer transaction accounts $ 5,807,498 75 % $ 5,513,282 75 % $ 5,507,056 77 % Customer time deposits 1,342,447 18 % 1,139,970 15 % 1,075,301 15 % Total customer deposits (core) $ 7,149,945 93 % $ 6,653,252 90 % $ 6,582,357 92 % 43 Total deposits were $7.7 billion at December 31, 2025, a $327 million (4%) increase over year-end 2024, including a $497 million (7%) increase in customer deposits (core), partly offset by a $170 million reduction in brokered deposits.
Table 10: Nonperforming Assets (in thousands) December 31, 2024 December 31, 2023 December 31, 2022 Nonperforming loans: Commercial & industrial $ 8,534 $ 4,046 $ 3,328 Owner-occupied CRE 4,547 4,399 5,647 Agricultural 9,969 12,185 20,416 CRE investment 1,688 1,453 3,832 Construction & land development — 161 771 Residential construction — — — Residential first mortgage 3,370 4,059 3,780 Residential junior mortgage 185 150 224 Retail & other 126 172 82 Total nonaccrual loans 28,419 26,625 38,080 Accruing loans past due 90 days or more — — — Total nonperforming loans $ 28,419 $ 26,625 $ 38,080 OREO: Commercial real estate owned $ 80 $ 305 $ 628 Residential real estate owned 16 154 — Bank property real estate owned 597 808 1,347 Total OREO 693 1,267 1,975 Total nonperforming assets (NPAs) $ 29,112 $ 27,892 $ 40,055 Nonaccrual loans (included above) covered by guarantees $ 7,463 $ 5,785 $ 5,459 Ratios: Nonperforming loans to total loans 0.43 % 0.42 % 0.62 % NPAs to total loans plus OREO 0.44 % 0.44 % 0.65 % NPAs to total assets 0.33 % 0.33 % 0.46 % ACL-Loans to nonperforming loans 233 % 239 % 162 % ACL-Loans to total loans 1.00 % 1.00 % 1.00 % Investment Securities Portfolio The investment securities portfolio is intended to provide Nicolet with adequate liquidity, flexible asset/liability management and a source of stable income.
Potential problem loans require heightened management review given the pace at which a credit may deteriorate, the potential duration of asset quality stress, and uncertainty around the magnitude and scope of economic stress that may be felt by Nicolet’s customers and on underlying real estate or collateral values. 41 Table 10: Nonperforming Assets (in thousands) December 31, 2025 December 31, 2024 December 31, 2023 Nonperforming loans: Commercial & industrial $ 10,314 $ 8,534 $ 4,046 Owner-occupied CRE 6,938 4,547 4,399 Agricultural 10,476 9,969 12,185 CRE investment 497 1,688 1,453 Construction & land development — — 161 Residential construction — — — Residential first mortgage 3,022 3,370 4,059 Residential junior mortgage 311 185 150 Retail & other 121 126 172 Total nonaccrual loans 31,679 28,419 26,625 Accruing loans past due 90 days or more — — — Total nonperforming loans $ 31,679 $ 28,419 $ 26,625 OREO: Commercial real estate owned $ 70 $ 80 $ 305 Residential real estate owned — 16 154 Bank property real estate owned 597 597 808 Total OREO 667 693 1,267 Total nonperforming assets (NPAs) $ 32,346 $ 29,112 $ 27,892 Nonaccrual loans (included above) covered by guarantees $ 10,483 $ 7,463 $ 5,785 Ratios: Nonperforming loans to total loans 0.46 % 0.43 % 0.42 % NPAs to total loans plus OREO 0.47 % 0.44 % 0.44 % NPAs to total assets 0.35 % 0.33 % 0.33 % ACL-Loans to nonperforming loans 217 % 233 % 239 % ACL-Loans to total loans 1.01 % 1.00 % 1.00 % Investment Securities Portfolio The investment securities portfolio is intended to provide Nicolet with adequate liquidity, flexible asset/liability management and a source of stable income.
Additional information on the subjectivity of income taxes is discussed further under “Critical Accounting Estimates-Income Taxes.” The Company’s income taxes accounting policy is described in Note 1, “Nature of Business and Significant Accounting Policies,” and additional disclosures relative to income taxes are included in Note 13, “Income Taxes” in the Notes to Consolidated Financial Statements, under Part II, Item 8.
The Company’s income taxes accounting policy is described in Note 1, “Nature of Business and Significant Accounting Policies,” and additional disclosures relative to income taxes are included in Note 13, “Income Taxes” in the Notes to Consolidated Financial Statements, under Part II, Item 8. BALANCE SHEET ANALYSIS Loans Nicolet services a diverse customer base primarily throughout Wisconsin, Michigan and Minnesota.
While Nicolet accomplished that in 2024, management understands the slate is wiped clean each year, and that it takes the efforts of our more than 950 employees to reproduce those results each year. 31 Table 1: Earnings Summary and Selected Financial Data At and for the years ended December 31, (in thousands, except per share data) 2024 2023 2022 Results of operations: Net interest income $ 268,065 $ 241,516 $ 239,961 Provision for credit losses 3,850 4,990 11,500 Noninterest income 82,267 35,972 57,920 Noninterest expense 191,353 185,866 160,644 Income before income tax expense 155,129 86,632 125,737 Income tax expense 31,070 25,116 31,477 Net income (GAAP) $ 124,059 $ 61,516 $ 94,260 Earnings per Common Share (“EPS”): Basic EPS $ 8.24 $ 4.17 $ 6.78 Diluted EPS (GAAP) $ 8.05 $ 4.08 $ 6.56 Adjusted Net Income & Diluted EPS (Non-GAAP): Adjusted net income (Non-GAAP) (1) $ 120,668 $ 101,245 $ 99,161 Adjusted diluted EPS (Non-GAAP) (1) $ 7.83 $ 6.72 $ 6.90 Common shares: Basic weighted average 15,049 14,743 13,909 Diluted weighted average 15,416 15,071 14,375 Year-End Balances: Loans $ 6,626,584 $ 6,353,942 $ 6,180,499 Allowance for credit losses - loans (“ACL-Loans”) 66,322 63,610 61,829 Total assets 8,796,795 8,468,678 8,763,969 Deposits 7,403,684 7,197,800 7,178,921 Stockholders’ equity (common) 1,172,898 1,039,007 972,529 Book value per common share $ 76.38 $ 69.76 $ 66.20 Tangible book value per common share (2) $ 51.10 $ 43.28 $ 38.81 Financial Ratios: Return on average assets 1.45 % 0.73 % 1.20 % Return on average common equity 11.27 6.28 10.63 Return on average tangible common equity (2) 17.50 10.58 17.96 Stockholders’ equity to assets 13.33 12.27 11.10 Tangible common equity to tangible assets (2) 9.33 7.98 6.82 (1) The adjusted net income and diluted EPS measures are non-GAAP financial measures that provide information that management believes is useful to investors in understanding our operating performance and trends and also aids investors in the comparison of Nicolet’s financial performance to the financial performance of peer banks.
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. 30 Table 1: Earnings Summary and Selected Financial Data At and for the years ended December 31, (in thousands, except per share data) 2025 2024 2023 Results of operations: Net interest income $ 306,473 $ 268,065 $ 241,516 Provision for credit losses 4,250 3,850 4,990 Noninterest income 85,567 82,267 35,972 Noninterest expense 200,833 191,353 185,866 Income before income tax expense 186,957 155,129 86,632 Income tax expense 36,271 31,070 25,116 Net income (GAAP) $ 150,686 $ 124,059 $ 61,516 Earnings per Common Share (“EPS”): Basic EPS $ 10.06 $ 8.24 $ 4.17 Diluted EPS (GAAP) $ 9.78 $ 8.05 $ 4.08 Adjusted Net Income & Diluted EPS (Non-GAAP): Adjusted net income (Non-GAAP) (1) $ 151,324 $ 120,668 $ 101,245 Adjusted diluted EPS (Non-GAAP) (1) $ 9.82 $ 7.83 $ 6.72 Common shares: Basic weighted average 14,980 15,049 14,743 Diluted weighted average 15,404 15,416 15,071 Year-End Balances: Loans $ 6,836,345 $ 6,626,584 $ 6,353,942 Allowance for credit losses - loans (“ACL-Loans”) 68,806 66,322 63,610 Total assets 9,185,107 8,796,795 8,468,678 Deposits 7,730,771 7,403,684 7,197,800 Stockholders’ equity (common) 1,257,662 1,172,898 1,039,007 Book value per common share $ 84.91 $ 76.38 $ 69.76 Tangible book value per common share (2) $ 59.09 $ 51.10 $ 43.28 Financial Ratios: Return on average assets 1.68 % 1.45 % 0.73 % Return on average common equity 12.58 11.27 6.28 Return on average tangible common equity (2) 18.53 17.50 10.58 Stockholders’ equity to assets 13.69 13.33 12.27 Tangible common equity to tangible assets (2) 9.94 9.33 7.98 (1) The adjusted net income and adjusted diluted EPS measures are non-GAAP financial measures that provide information that management believes is useful to investors in understanding our operating performance and trends and also aids investors in the comparison of Nicolet’s financial performance to the financial performance of peer banks.
For a discussion of the regulatory restrictions applicable to the Company and the Bank, see section “Business-Regulation of Nicolet” and “Business-Regulation of the Bank,” included within Part I, Item 1. A summary of Nicolet’s and the Bank’s regulatory capital amounts and ratios, as well as selected capital metrics are presented in Table 16.
For a discussion of the regulatory restrictions applicable to the Company and the Bank, see section “Business-Regulation of Nicolet” and “Business-Regulation of the Bank,” included within Part I, Item 1.
Average investment securities decreased $226 million largely from the first quarter 2023 balance sheet repositioning, while other interest-earning assets increased $67 million, mostly investable cash. As a result, the mix of average interest-earning assets shifted to 84% loans, 11% investment securities, and 5% other interest-earning assets (mostly cash) for 2024, compared to 81%, 15%, and 4%, respectively, for 2023.
Average investment securities increased $17 million, while other interest-earning assets increased $95 million, mostly investable cash from strong deposit growth. As a result, the mix of average interest-earning assets shifted to 83% loans, 11% investment securities, and 6% other interest-earning assets (mostly cash) for 2025, compared to 84%, 11%, and 5%, respectively, for 2024.
Average customer deposits (core) decreased $8 million, while average brokered deposits increased $135 million (22%) over the prior year. At December 31, 2024, Nicolet had $325 million of time deposits that exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $250,000.
On average, deposits grew $349 million (5%) between 2025 and 2024 (as detailed in Table 2). Average customer deposits (core) increased $386 million, while average brokered deposits decreased $37 million from the prior year. At December 31, 2025, Nicolet had $433 million of time deposits that exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $250,000.
The investment securities portfolio increased slightly from December 31, 2023, and included a shift in mix, from corporate debt securities and state, county, and municipals to mortgage-backed securities. The fair value of the total securities AFS portfolio was an unrealized loss of $66 million at December 31, 2024, compared to an unrealized loss of $73 million at December 31, 2023.
The investment securities portfolio increased $53 million (7%) from December 31, 2024, and included a shift in mix, from corporate debt securities and state, county, and municipals to mortgage-backed securities.
Comparison of 2024 versus 2023 The Federal Reserve raised short-term interest rates a total of 425 bps during 2022, and additional increases totaling 100 bps were made during 2023, resulting in a Federal Funds range of 5.25% to 5.50% as of December 31, 2023.
Comparison of 2025 versus 2024 At the beginning of 2024, the Federal Funds range was 5.25% to 5.50%. The Federal Reserve decreased short-term interest rates a total of 100 bps during the second half of 2024, resulting in a Federal Funds range of 4.25% to 4.50% at December 31, 2024.
Noninterest Expense Table 5: Noninterest Expense ($ in thousands) Years Ended December 31, Change From Prior Year 2024 2023 2022 Change 2024 % Change 2024 Change 2023 % Change 2023 Personnel $ 108,414 $ 99,109 $ 88,713 $ 9,305 9 % $ 10,396 12 % Occupancy, equipment and office 35,136 36,222 29,722 (1,086) (3) % 6,500 22 % Business development and marketing 8,330 7,790 8,472 540 7 % (682) (8) % Data processing 17,754 19,892 14,518 (2,138) (11) % 5,374 37 % Intangibles amortization 6,876 8,072 6,616 (1,196) (15) % 1,456 22 % FDIC assessments 4,003 3,999 1,920 4 — % 2,079 108 % Merger-related expense — 189 1,664 (189) (100) % (1,475) (89) % Other expense 10,840 10,593 9,019 247 2 % 1,574 17 % Total noninterest expense $ 191,353 $ 185,866 $ 160,644 $ 5,487 3 % $ 25,222 16 % Non-personnel expenses $ 82,939 $ 86,757 $ 71,931 $ (3,818) (4) % $ 14,826 21 % Average full-time equivalent employees 955 953 881 2 — % 72 8 % Comparison of 2024 versus 2023 Noninterest expense was $191 million, an increase of $5 million (3%) over 2023.
Noninterest Expense Table 5: Noninterest Expense ($ in thousands) Years Ended December 31, Change From Prior Year 2025 2024 2023 Change 2025 % Change 2025 Change 2024 % Change 2024 Personnel $ 115,305 $ 108,414 $ 99,109 $ 6,891 6 % $ 9,305 9 % Occupancy, equipment and office 36,631 35,136 36,222 1,495 4 % (1,086) (3) % Business development and marketing 8,009 8,330 7,790 (321) (4) % 540 7 % Data processing 18,569 17,754 19,892 815 5 % (2,138) (11) % Intangibles amortization 5,740 6,876 8,072 (1,136) (17) % (1,196) (15) % FDIC assessments 4,007 4,003 3,999 4 — % 4 — % Merger-related expense 1,956 — 189 1,956 N/M (189) N/M Other expense 10,616 10,840 10,593 (224) (2) % 247 2 % Total noninterest expense $ 200,833 $ 191,353 $ 185,866 $ 9,480 5 % $ 5,487 3 % Non-personnel expenses $ 85,528 $ 82,939 $ 86,757 $ 2,589 3 % $ (3,818) (4) % Average full-time equivalent employees 959 955 953 4 — % 2 — % N/M means not meaningful.
Management performs ongoing intensive analysis of its loan portfolio to allow for early identification of customers experiencing financial difficulties, maintains prudent underwriting standards, understands the economy in its markets, and considers the trend of deterioration in loan quality in establishing the level of the ACL-Loans. In addition, various regulatory agencies periodically review the ACL-Loans.
Assessing these factors involves significant judgment; therefore, management considers the ACL-Loans a critical accounting estimate, as further discussed under “Critical Accounting Estimates – Allowance for Credit Losses - Loans.” Management performs ongoing intensive analysis of the loan portfolio to allow for early identification of customers experiencing financial difficulties, maintains prudent underwriting standards, understands the economy in its markets, and considers the trend of deterioration in loan quality in establishing the level of the ACL-Loans.
(2) The yield on tax-exempt loans and tax-exempt investment securities is computed on a tax-equivalent basis using a federal tax rate of 21% and adjusted for the disallowance of interest expense. 34 Table 3: Volume/Rate Variance - Tax-Equivalent Basis (in thousands) 2024 Compared to 2023 Increase (Decrease) Due to Changes in 2023 Compared to 2022 Increase (Decrease) Due to Changes in Volume Rate Net (1) Volume Rate Net (1) Interest-earning assets Total loans, including loan fees (2) (3) $ 29,966 $ 22,253 $ 52,219 $ 49,407 $ 48,106 $ 97,513 Investment securities: Taxable (1,401) 3,412 2,011 (4,715) 1,514 (3,201) Tax-exempt (3) (2,250) 334 (1,916) 371 1,397 1,768 Total investment securities (3,651) 3,746 95 (4,344) 2,911 (1,433) Other interest-earning assets 3,653 (585) 3,068 1,428 11,629 13,057 Total non-loan earning assets 2 3,161 3,163 (2,916) 14,540 11,624 Total interest-earning assets $ 29,968 $ 25,414 $ 55,382 $ 46,491 $ 62,646 $ 109,137 Interest-bearing liabilities Savings $ (810) $ 892 $ 82 $ (118) $ 7,934 $ 7,816 Interest-bearing demand 43 2,261 2,304 (596) 8,841 8,245 MMA 2,487 2,146 4,633 1,628 41,613 43,241 Core time deposits 9,845 10,138 19,983 1,625 23,422 25,047 Total interest-bearing core deposits 11,565 15,437 27,002 2,539 81,810 84,349 Brokered deposits 6,130 2,618 8,748 1,999 17,724 19,723 Total interest-bearing deposits 17,695 18,055 35,750 4,538 99,534 104,072 Wholesale funding (9,401) 2,605 (6,796) 618 2,699 3,317 Total interest-bearing liabilities 8,294 20,660 28,954 5,156 102,233 107,389 Net interest income $ 21,674 $ 4,754 $ 26,428 $ 41,335 $ (39,587) $ 1,748 (1) The change in interest due to both rate and volume has been allocated in proportion to the relationship of dollar amounts of change in each.
(2) The yield on tax-exempt loans and tax-exempt investment securities is computed on a tax-equivalent basis using a federal tax rate of 21% and adjusted for the disallowance of interest expense. 33 Table 3: Volume/Rate Variance - Tax-Equivalent Basis (in thousands) 2025 Compared to 2024 Increase (Decrease) Due to Changes in 2024 Compared to 2023 Increase (Decrease) Due to Changes in Volume Rate Net (1) Volume Rate Net (1) Interest-earning assets Total loans, including loan fees (2) (3) $ 19,617 $ 8,477 $ 28,094 $ 29,966 $ 22,253 $ 52,219 Investment securities: Taxable 1,302 2,587 3,889 (1,401) 3,412 2,011 Tax-exempt (3) (1,043) 336 (707) (2,250) 334 (1,916) Total investment securities 259 2,923 3,182 (3,651) 3,746 95 Other interest-earning assets 4,127 (3,008) 1,119 3,653 (585) 3,068 Total non-loan earning assets 4,386 (85) 4,301 2 3,161 3,163 Total interest-earning assets $ 24,003 $ 8,392 $ 32,395 $ 29,968 $ 25,414 $ 55,382 Interest-bearing liabilities Savings $ 556 $ (529) $ 27 $ (810) $ 892 $ 82 Interest-bearing demand 1,916 441 2,357 43 2,261 2,304 MMA 926 (7,985) (7,059) 2,487 2,146 4,633 Core time deposits 7,661 (3,489) 4,172 9,845 10,138 19,983 Total interest-bearing core deposits 11,059 (11,562) (503) 11,565 15,437 27,002 Brokered deposits (1,606) (2,594) (4,200) 6,130 2,618 8,748 Total interest-bearing deposits 9,453 (14,156) (4,703) 17,695 18,055 35,750 Wholesale funding (843) (277) (1,120) (9,401) 2,605 (6,796) Total interest-bearing liabilities 8,610 (14,433) (5,823) 8,294 20,660 28,954 Net interest income $ 15,393 $ 22,825 $ 38,218 $ 21,674 $ 4,754 $ 26,428 (1) The change in interest due to both rate and volume has been allocated in proportion to the relationship of dollar amounts of change in each.
Table 16: Capital ($ in thousands) December 31, 2024 December 31, 2023 Company Stock Repurchases: * Common stock repurchased during the year (dollars) $ 10,134 $ 1,519 Common stock repurchased during the year (shares) 92,440 26,853 Company Risk-Based Capital: Total risk-based capital $ 1,062,458 $ 930,804 Tier 1 risk-based capital 882,056 750,811 Common equity Tier 1 capital 842,453 712,040 Total capital ratio 14.3 % 13.0 % Tier 1 capital ratio 11.9 % 10.5 % Common equity tier 1 capital ratio 11.4 % 9.9 % Tier 1 leverage ratio 10.5 % 9.2 % Bank Risk-Based Capital: Total risk-based capital $ 864,090 $ 827,341 Tier 1 risk-based capital 798,691 768,726 Common equity Tier 1 capital 798,691 768,726 Total capital ratio 11.7 % 11.5 % Tier 1 capital ratio 10.8 % 10.7 % Common equity tier 1 capital ratio 10.8 % 10.7 % Tier 1 leverage ratio 9.5 % 9.4 % * Reflects only the common stock repurchased under board of director authorizations.
A summary of Nicolet’s and the Bank’s regulatory capital amounts and ratios, as well as selected capital metrics are presented in Table 16. 46 Table 16: Capital ($ in thousands) December 31, 2025 December 31, 2024 Company Stock Repurchases: * Common stock repurchased during the year (dollars) $ 76,561 $ 10,134 Common stock repurchased during the year (shares) 646,002 92,440 Company Risk-Based Capital: Total risk-based capital $ 1,107,849 $ 1,062,458 Tier 1 risk-based capital 943,398 882,056 Common equity Tier 1 capital 902,964 842,453 Total capital ratio 14.8 % 14.3 % Tier 1 capital ratio 12.6 % 11.9 % Common equity tier 1 capital ratio 12.0 % 11.4 % Tier 1 leverage ratio 10.7 % 10.5 % Bank Risk-Based Capital: Total risk-based capital $ 907,726 $ 864,090 Tier 1 risk-based capital 835,920 798,691 Common equity Tier 1 capital 835,920 798,691 Total capital ratio 12.1 % 11.7 % Tier 1 capital ratio 11.2 % 10.8 % Common equity tier 1 capital ratio 11.2 % 10.8 % Tier 1 leverage ratio 9.5 % 9.5 % * Reflects only the common stock repurchased under Board authorizations.
The 2023 provision for credit losses was $5.0 million (comprised of $2.7 million related to the ACL-Loans and $2.3 million for the ACL on securities AFS). Comparatively, the 2022 provision for credit losses of $11.5 million was largely due to the required Day 2 ACL increase of $8 million from the acquisition of Charter, as well as solid loan growth.
Comparatively, the 2024 provision for credit losses was $3.9 million (comprised of $3.8 million related to the ACL-Loans and $0.1 million for the ACL on unfunded commitments), and the 2023 provision for credit losses was $5.0 million (comprised of $2.7 million related to the ACL-Loans and $2.3 million for the ACL on securities AFS).
The change in income tax was mostly due to higher pretax earnings in 2024, as well as the $9 million charge to income tax expense during 2023 to establish a tax valuation allowance related to the Wisconsin tax law change noted in the “Overview” section. 37 The accounting for income taxes requires deferred income taxes to be analyzed to determine if a valuation allowance is required.
Income Taxes Income tax expense was $36 million (effective tax rate of 19.4%) for 2025, compared to $31 million (effective tax rate of 20.0%) for 2024. The change in income tax was mostly due to higher pretax earnings. The accounting for income taxes requires deferred income taxes to be analyzed to determine if a valuation allowance is required.
Total loans of $6.6 billion at December 31, 2024 increased $273 million (4%) from December 31, 2023, while total deposits of $7.4 billion increased $206 million (3%) from December 31, 2023.
At December 31, 2025, Nicolet had total assets of $9.2 billion, an increase of $388 million (4%) from December 31, 2024. Total loans of $6.8 billion at December 31, 2025, increased $210 million (3%) from December 31, 2024, while total deposits of $7.7 billion increased $327 million (4%) from December 31, 2024.
See also “Noninterest Income” for the offsetting fair value change to the NQDC plan assets and Note 10, “Employee and Director Benefit Plans” in the Notes to Consolidated Financial Statements, under Part II, Item 8, for additional information on the NQDC plan. • Occupancy, equipment and office expense was $35 million for 2024, down $1 million (3%) from 2023, due to lower occupancy expense and timing of supply purchases. • Business development and marketing expense was $8 million for 2024, up $1 million (7%) from 2023, on higher marketing (due to donations to support capital campaigns within our communities). • Data processing expense was $18 million for 2024, down $2 million (11%) from 2023, mostly due to a $3 million early contract termination charge incurred in 2023. • Intangible amortization decreased $1 million (15%) between the years, due to lower amortization from the aging intangibles.
See also “Noninterest Income” for the offsetting fair value change to the NQDC plan assets and Note 10, “Employee and Director Benefit Plans” in the Notes to Consolidated Financial Statements, under Part II, Item 8, for additional information on the NQDC plan. • Occupancy, equipment and office expense was $37 million for 2025, up $1 million (4%) from 2024, due to higher occupancy-related costs (including increases in cleaning, snowplowing, building depreciation), and office expenses (mostly additional costs for software and technology solutions), as well as a $0.4 million lease termination charge. • Data processing expense was $19 million for 2025, up $1 million (5%) from 2024, mostly due to volume-based increases in core and card processing charges. • Intangible amortization decreased $1 million (17%) between the years, due to lower amortization from the aging intangibles.
The $45 million increase in cash and cash equivalents since year-end 2023 included $134 million net cash provided by operating activities (mostly earnings) and $199 million net cash provided by financing activities (mostly deposit growth), partially offset by $288 million net cash used in investing activities (mostly loan growth).
The $124 million increase in cash and cash equivalents since year-end 2024 included $154 million net cash provided by operating activities (mostly earnings) and $201 million net cash provided by financing activities (mostly strong deposit growth partly offset by repayments of borrowings, common stock repurchases and cash dividends), partially offset by $231 million net cash used in investing activities (mostly to fund loan growth and investment purchases).
Credit risk on commercial-based loans is largely influenced by general economic conditions and the resulting impact on a borrower’s operations or on the value of underlying collateral, if any.
Credit risk on commercial-based loans is largely influenced by general economic conditions and the resulting impact on a borrower’s operations or on the value of underlying collateral, if any. 37 Total loans were $6.8 billion at December 31, 2025, an increase of $210 million (3%), compared to total loans of $6.6 billion at December 31, 2024, with growth in agricultural, commercial and industrial, and construction loans.
Table 17: Contractual Obligations (in thousands) Note Maturity by Years Reference Total 1 or less 1-3 3-5 Over 5 Time deposits 8 $ 1,726,822 $ 1,285,671 $ 248,972 $ 192,141 $ 38 Long-term borrowings 9 161,387 5,000 — — 156,387 Operating leases 5 9,562 2,233 4,034 2,188 1,107 Total long-term contractual obligations $ 1,897,771 $ 1,292,904 $ 253,006 $ 194,329 $ 157,532 Critical Accounting Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates, assumptions or judgments that affect the amounts reported in the financial statements and accompanying notes.
Table 17: Contractual Obligations (in thousands) Note Maturity by Years Reference Total 1 or less 1-3 3-5 Over 5 Time deposits 8 $ 1,747,497 $ 1,194,056 $ 371,764 $ 181,667 $ 10 Long-term borrowings 9 134,860 — — — 134,860 Operating leases 5 5,494 1,465 2,496 963 570 Total long-term contractual obligations $ 1,887,851 $ 1,195,521 $ 374,260 $ 182,630 $ 135,440 Critical Accounting Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates, assumptions or judgments that affect the amounts reported in the financial statements and accompanying notes.
Off-Balance Sheet Arrangements, Lending-Related Commitments and Contractual Obligations Nicolet is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.
Subsequently, on January 20, 2026, the Board approved a $60 million increase to the common stock repurchase authorization. Off-Balance Sheet Arrangements, Lending-Related Commitments and Contractual Obligations Nicolet is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers.
Personnel costs increased $9 million (9%), while non-personnel expenses combined decreased $4 million (4%) from 2023. Notable contributions to the change in noninterest expense were: • Personnel expense was $108 million for 2024, an increase of $9 million (9%) over 2023.
Comparison of 2025 versus 2024 Noninterest expense was $201 million for 2025, an increase of $9 million (5%) over 2024. Personnel costs increased $7 million (6%), while non-personnel expenses combined increased $3 million (3%) from 2024.
Table 13: Maturity Distribution of Uninsured Time Deposits (in thousands) Time Deposits Over FDIC Insurance Limits Portion of Time Deposits in Excess of FDIC Insurance Limits 3 months or less $ 63,169 $ 31,420 Over 3 months through 6 months 103,186 52,936 Over 6 months through 12 months 136,715 76,465 Over 12 months 21,936 10,436 Total $ 325,006 $ 171,257 Estimated total uninsured deposits were $2.2 billion (representing 30% of total deposits) and $2.1 billion (representing 29% of total deposits) as of December 31, 2024 and 2023, respectively.
Table 13: Maturity Distribution of Uninsured Time Deposits (in thousands) Time Deposits Over FDIC Insurance Limits Portion of Time Deposits in Excess of FDIC Insurance Limits 3 months or less $ 125,375 $ 65,624 Over 3 months through 6 months 111,930 66,430 Over 6 months through 12 months 128,706 71,206 Over 12 months 67,416 29,666 Total $ 433,427 $ 232,926 Estimated total uninsured deposits were $2.5 billion (representing 32% of total deposits) and $2.2 billion (representing 30% of total deposits) as of December 31, 2025 and 2024, respectively.
Average interest-bearing liabilities were $5.6 billion for 2024, an increase of $286 million (5%) from 2023. Average interest-bearing core deposits increased $292 million and average brokered deposits grew $135 million, reflecting growth in higher cost deposit products and a shift in funding strategy.
Average interest-bearing liabilities were $6.0 billion for 2025, an increase of $334 million (6%) from 2024. Average interest-bearing core deposits increased $387 million (8%), while average brokered deposits decreased $37 million, reflecting a shift in funding strategy. Wholesale funding decreased $16 million, mostly due to the early redemption of subordinated notes.
The contribution from net free funds increased 3 bps, mostly due to the higher value in the current interest rate environment.
The cost of interest-bearing liabilities decreased 27 bps to 2.76% for 2025, also reflecting the Federal Reserve interest rate cuts. The contribution from net free funds decreased 8 bps, mostly due to the lower value in the current interest rate environment.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK For additional disclosure, see section, “Interest Rate Sensitivity Management and Impact of Inflation,” within Management’s Discussion and Analysis of Financial Condition and Results of Operation under Part II, Item 7. 49
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK For additional disclosure, see section, “Interest Rate Sensitivity Management and Impact of Inflation,” within Management’s Discussion and Analysis of Financial Condition and Results of Operation under Part II, Item 7. 48

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