Nicolet Completes MidWestOne Conversion and Cuts Merger Costs

The Tip Desk · November 8, 2026 · 3 min read

Core diluted earnings were $3.15 a share and the net interest margin reached 4.19% as merger-related drag on GAAP profit narrowed.

Nicolet Bankshares, Inc. (NIC), the Green Bay community bank holding company, reported net income of $64 million and diluted earnings of $2.96 a share for the third quarter of 2026, compared with $57 million and $2.62 a share in the second quarter. Core diluted earnings, a non-GAAP measure, rose to $3.15 a share from $2.99, and core net income was $68 million versus $65 million.

Merger-related items still reduced GAAP earnings per share by $0.19, down from a $0.37 drag in the second quarter. Chairman, President and Chief Executive Officer Mike Daniels said the results were beginning to show what the combined company can produce, citing higher core earnings, another expansion in net interest margin, and a core return on average tangible common equity of 22%.

The bank completed the MidWestOne systems conversion and integration, closed the sale of the Denver branches on July 28, and moved both wealth-management platforms to a common operating system. Period-end assets were $15.1 billion at September 30, down $350 million from June 30, largely because of the Denver divestiture. Total loans were $10.88 billion, up $34 million from June 30.

Net interest income was $142 million, $1 million, or 1%, higher than the second quarter, even as average interest-earning assets of $13.6 billion fell $226 million, mostly from $263 million lower average loans after the Denver sale. The net interest margin expanded to 4.19% from 4.14% in the second quarter, after a 16 basis-point expansion from 3.98% in the first quarter. The yield on interest-earning assets rose 2 basis points to 5.88%, including a 6 basis-point increase in loan yield to 6.32%, partly offset by a 4 basis-point decline in investment yield after lower discount accretion following an early municipal-bond call in the second quarter. The cost of interest-bearing liabilities increased 1 basis point to 2.30%.

Noninterest expense fell to $91 million from $104 million, including a $3 million reduction in merger-related expense and a $5 million reduction in other noninterest expense after a second-quarter loss on early redemption of junior subordinated debentures. The efficiency ratio improved to 51.72% from 58.62%. Personnel expense declined $4 million, reflecting lower salaries from fewer average full-time equivalent employees and a $2 million offsetting market valuation on deferred-compensation liabilities.

Noninterest income was $32 million, down $4 million from the second quarter, largely because of unfavorable market valuations. Excluding net asset gains and losses and deferred-compensation market valuations, noninterest income increased $1 million, primarily from higher wealth-management fee income of $12.6 million versus $11.7 million.

Total deposits were $12.6 billion at September 30, up $73 million from June 30, including a $223 million increase in core deposits partly offset by a $150 million decrease in brokered deposits. Noninterest-bearing demand deposits were $2.82 billion versus $2.72 billion at June 30. Total capital was $2.2 billion, down $37 million from June 30, with earnings more than offset by unfavorable market valuations on the investment portfolio after recent interest-rate increases, common-stock repurchases, and the quarterly dividend.

Nonperforming assets were $78 million, or 0.52% of total assets, compared with $75 million, or 0.49%, at June 30. The allowance for credit losses on loans was $135 million, or 1.24% of loans, and loan net charge-offs were negligible.

Nicolet repurchased $40 million of common stock in the third quarter, 236,296 shares, similar to $40 million in the second quarter. On October 19 the board declared a quarterly cash dividend of $0.36 a share, payable December 15 to holders of record December 1. Daniels said the company expects a cleaner fourth quarter giving a clearer view of what the company can earn as it heads into 2027.