— Acquisition of County Bancorp, Inc. closed on December 3, adding approximately $1.4 billion in assets
— Net income of $16 million, compared to $8 million in prior quarter and $18 million in fourth quarter 2020, significantly impacted by our recent acquisitions
— Net income of $61 million and adjusted net income (non-GAAP) of $73 million for 2021, compared to net income of $60 million for 2020
— Earnings per diluted common share of $1.25 for fourth quarter and $5.44 for 2021
— Adjusted earnings per diluted common share (non-GAAP) of $1.83 for fourth quarter and $6.57 for 2021
— Return on average assets of 0.96% for fourth quarter and 1.15% for 2021
— Enhanced shareholder value with $61 million in stock repurchases for the year
— Better than projected year-end asset quality metrics
Nicolet Bankshares, Inc. (“Nicolet”) announced fourth quarter 2021 net income of $16 million and earnings per diluted common share of $1.25, compared to $8 million and $0.73 for third quarter 2021, and $18 million and $1.74 for fourth quarter 2020, respectively. Annualized quarterly return on average assets was 0.96%, 0.59% and 1.58%, for fourth quarter 2021, third quarter 2021 and fourth quarter 2020, respectively.
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Net income for the year ended December 31, 2021 was $61 million and earnings per diluted common share was $5.44, compared to net income of $60 million and earnings per diluted common share of $5.70 for 2020. Annualized return on average assets was 1.15% and 1.41% for the years ended December 31, 2021 and 2020, respectively.
Non-core items, and the related tax effect of each, in net income included merger and integration related expenses, Day 2 credit provision expense required under the CECL model, branch optimization costs, contract negotiation expenses and gains on other investments. Non-core items negatively impacted earnings per diluted common share $0.58 for fourth quarter 2021, $0.76 for third quarter 2021, and $0.05 for fourth quarter 2020. For the full year, non-core items negatively impacted diluted earnings per common share $1.13 for 2021 and $0.24 for 2020.
“As our fourth quarter numbers show, our financial and operating performance was strong. The successful integration of County showed that our team is adept at turning promises made into promises kept,” said Mike Daniels, President and CEO of Nicolet. “We stretched the team with two acquisitions (County and Mackinac) in a short time, and they responded well. The acquisitions brought us more than increased assets and earnings. They helped us add some good people and communities to the Nicolet family. We have great momentum heading into 2022, and our purpose to serve is resonating with our customers, employees, and the communities we serve. We will continue to purposefully serve our 3 Circles – customers, employees, and shareholders, as we move forward. This focus has served us well for over twenty years.”
On December 3, 2021, Nicolet completed its merger with County Bancorp, Inc. (“County”), pursuant to the terms of the definitive merger agreement dated June 22, 2021, at which time County merged with and into Nicolet, to become the premier agriculture lender throughout Wisconsin. County shareholders received, at the election of each holder, either $37.18 in cash or 0.48 shares of Nicolet common stock, subject to proration procedures such that 1,237,000 shares of County common stock were exchanged for cash, and the remaining shares were exchanged for Nicolet common stock. As a result, the total purchase price was $223 million, comprised of common stock consideration of $176 million from the issuance of approximately 2.4 million shares of Nicolet common stock and the remainder in cash consideration. Upon consummation, County added total assets of $1.4 billion, loans of $1.0 billion, deposits of $1.0 billion, and preliminary goodwill of $70 million.
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On September 3, 2021, Nicolet completed its merger with Mackinac Financial Corporation (“Mackinac“), pursuant to the terms of the definitive merger agreement dated April 12, 2021, at which time Mackinac merged with and into Nicolet, expanding Nicolet prominently into Northern Michigan and the Upper Peninsula of Michigan, and adding to Nicolet’s presence in upper northeastern Wisconsin. Mackinac shareholders received fixed consideration of 0.22 shares of Nicolet common stock and $4.64 in cash for each share of Mackinac common stock owned, resulting in the issuance of 2.3 million shares of Nicolet common stock for stock consideration of $180 million and cash consideration of $49 million, or a total purchase price of $229 million. Upon consummation, Mackinac added total assets of $1.5 billion, loans of $0.9 billion, deposits of $1.4 billion, and preliminary goodwill of $84 million.
Evaluation of financial performance and balance sheet line items was impacted by the timing and size of Nicolet’s acquisitions of County and Mackinac. Certain income statement results, average balances and related ratios for 2021 include partial contributions from County and Mackinac, each from the respective acquisition date.
“As for the full year numbers, the $61 million in GAAP earnings represents another record year for Nicolet. However, by adjusting the numbers for both the Mackinac and County deals, with $14 million of Day 2 CECL credit provisions required on better than projected asset quality metrics, $1 million related to our branch optimization strategy, and $6 million in integration and merger related expenses, the non-GAAP earnings of $73 million offers a better understanding of the economic value that we created in 2021,” CEO Daniels added.
Executive Chairman of Nicolet Bob Atwell commented, “The excitement I observe as our bankers are out with our customers servicing the needs of our communities and all business lines working to fully integrate these last two acquisitions – that is the Nicolet Spirit and Culture fully engaged.”
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