www.ni co le tb ank .co m
111 N. Washington Street / P.O. Box 23900 / Green Bay, WI 54305 -3900
920-430-1400 / 1 -800-369-0226
Forward-looking Statements
Statements made in this Annual Report which are not purely historical are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. This includes any
statements regarding management’s plans, objectives, or goals for future operations, products or services, and forecasts of its revenues, earnings, or other measures of performance. Such
forward-looking statements may be identified by the use of words such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “prospects,” “potential,”
“plan,” “outlook,” “would”, “should,” “could,” “will,” “may,” or similar expressions. Forward-looking statements speak only as of the date they are made and Nicolet Bankshares, Inc.
(“Nicolet”) has no duty to update forward-looking statements. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and
uncertainties. Actual results may differ materially from those contained in the forward-looking statements. Factors which may cause actual results to differ materially from those contained
in such forward-looking statements include those identified in Nicolet’s most recent Form 10-K and subsequent SEC filings.
2021 ANNUAL REPORT
The sign you see on the cover, which now hangs outside of our boardroom,
takes us back to the genesis of Nicolet Bank. The sign was once a
workbench (left photo) that repaired equipment at Algoma Hardwoods, a door
factory in Algoma, WI. At one point in time, Wendell Ellsworth owned Algoma
Hardwoods. Wendell was one of Nicolet’s early investors, as well as an
original board member and one of our first customers. He believed in
Bob and Mike’s vision that a start-up bank focused on service and relationships
1
could grow into something successful. His belief helped get Nicolet
off the ground.
As an homage to that relationship, we went to the now-closed Algoma
Hardwoods and rescued a few things that were visual reminders of
our beginnings. (All photos were taken at Algoma Hardwoods.)
3
MIKE AND BOB
S H A R E H O L D E R S L E T T E R
Dear shareholders, customers, employees, and the communities we serve:
opportunity for Nicolet in the future. We are excited to grow this line of business and to round out
Every year when we sit down to write this letter, it seems as if our audience has changed. Compared to
relationships with Nicolet’s excellent retail and wealth management platforms.
this time last year, we have a much larger shareholder base, more employees and customers, and a geographic
The Company also positioned itself to maintain its strong earnings and growth trajectory by investing
territory that has moved us solidly into Michigan and throughout much of Wisconsin. We always accept
in existing people, attracting new talent, and implementing its executive succession plan. In May 2021,
the challenge to say something meaningful in this letter, rather than keep it like a standard run-of-the-mill
Mike Daniels assumed the role of CEO. Over the 21 years since he co-founded Nicolet he has led the
shareholder letter. After all, we are shareholders too, and we would want to know what it’s like to have a
Company in many ways. This title change is as much a recognition of his well-established leadership as it
seat at the table. So, that’s what we will try to give you here.
is the assumption of new responsibilities.
In 2021, the Company had an outstanding year financially, strategically, and in the development of our
We recognize the advantage of having the two founders still being active and in the bank on a daily
future. Reported net income of $60.7 million, while strong in its own right, reflects the impact of
basis, however, our executive succession goes well beyond Bob and Mike. In that light, we would like to
merger-related expenses and substantial one-time charges related to the accounting methods required for
introduce you to our Executive Vice Presidents—Phil Moore, Brad Hutjens, and Eric Witczak. Phil joined
5
acquisitions. In 2021, we announced and closed two acquisitions—Mackinac Financial Corporation and
the Company as CFO in May after over 21 years of engagement with Nicolet as a strategic sounding
County Bancorp, Inc. These two acquisitions added roughly $3 billion in assets, or 60% of Nicolet’s
board and an external auditor. Brad, who has been with Nicolet since 2003 leads Credit, Operations, IT,
previous size. We closed and converted these acquisitions while maintaining solid organic growth across
Innovation, and Compliance. And Eric, who has been with Nicolet since the beginning, leads all revenue
our core markets. When we started Nicolet in 2000 with a blank piece of paper, we didn’t anticipate
lines—Commercial, Retail, and Wealth Management. In addition, all three are integral to our acquisition
discussing how to matter to Manistique, Alpena, Marquette, Manitowoc, and other similar communities,
strategy, performing due diligence and working on our integration team. While it looks like a traditional
but we have those discussions now. Back then, we simply believed that having a strong purpose of serving
“inside/outside” division of duties, they are skilled at every area of the bank and work well together.
others and creating shared success for the bank, our employees, and our customers would be welcomed in
For years now, the board assessed Nicolet’s performance based on growth, asset quality, and earnings.
these communities. So far, the results have proven that to be true.
As we have grown, and as different metrics have come in and out of favor, we find these to be the most accurate
With the acquisition of County Bancorp, Inc., we jumped headfirst into the agriculture banking
measure of what a strong community bank should be. We look at our history in three different phases:
business. We already had this presence with two prior acquisitions, but County was the clear ag banking
• organic growth in our first seven years, where growth was the defining metric
leader in the state of Wisconsin. We look at ag banking like we do other lines of business, where we deliver
• our success through the recession of 2008–10, when all investors wanted to discuss were asset quality metrics
our value through people. Adding County’s ag banking team to our existing team should prove to be a solid
• our growth-through-acquisition phase, where earnings is the lead metric.
As Nicolet continues to evolve, the metrics of growth, asset quality, and earnings remain our key
support good, profitable customer relationships. We know how to assess and price the value of the
indicators, and each have played a role in our strong capital management that has led us to where we are today.
relationships or organizations we acquire. We do that by having great frontline people who put their
Nicolet was a high-quality, high-performance company in the years preceding the pandemic. The pandemic
experience and initiative to work for our customers. As Mike frequently says, “We need to matter to our
economic policy measures (low rates coupled with unprecedented fiscal and monetary stimulus) swelled
customers, matter in our communities, and matter to each other.”
our balance sheet with our customers’ cash. Cash increased to around 20% of our balance sheet distorting
The community banking sector is experiencing sustained pressure from both large national banks and
capital ratios and the traditional profitability metrics. These distortions left our earnings per share (“EPS”)
the growth of non-bank fintech platforms. The national and regional banks have the scale to support higher
momentum unaffected. As we moved through 2020 and 2021, we have focused on growth in our core
tech investment. The fintech platforms benefit from lighter regulation, the absence of an investment in
EPS as the most meaningful metric. Measures such as return on assets and return on equity matter, but
physical locations, and lower earnings expectations from the capital markets. These macro factors are
continued growth in EPS helps our share price, which is what is most impactful to shareholders. Our EPS
accelerating consolidation among community banks with aging management and little succession talent.
showed rapid year-over-year growth through our many acquisitions, as we proved we could negotiate and
Shareholders and boards of smaller banks are experiencing stagnant profitability and an inability to invest
execute profitable acquisitions while maintaining solid asset quality. In addition to the two acquisitions,
in alternative revenue sources and delivery channels. While Nicolet experiences the pressures common to
the complexities of loan loss accounting in acquisitions, and the continued drag of excess cash make
our industry segment, we have effectively become the acquirer of choice for smaller institutions within a
tracking core profitability in 2021 challenging even for industry experts. Our year-end earnings release
relevant footprint. Our size does enable us to continue investing in innovation and digital efficiency. As we
contains an effort to reconcile GAAP accounting with what we believe to be more meaningful non-GAAP
grow, our target acquisition size has increased. The basic value proposition of an engaged community bank
measures. Following the December closing of the County acquisition the board announced an aggressive
with quality people remains attractive in our market, but with our growth comes the responsibility to
stock repurchase plan. This, together with our announced year-end results, caused analysts’ expectations
instill efficiency. As we acquire, we must have—and do have—the operating discipline to implement tough
(and our stock price) to become more closely aligned with both current and future EPS.
decisions on efficiency. When we map out cost savings, we promptly communicate and execute on the
The core profitability of the Company was strong and growing before the pandemic and has accelerated
tough decisions that go with preserving a strong, personal, and responsive community banking culture in
throughout. We are, as the analysts now describe us, a high-performing organic growth story with a potent
both our existing and acquired markets. In the last two years we have closed 24 branches in both our legacy
currency and 10-year track record as the acquirer of choice of companies that enhance our earnings while
and expansion markets. This isn’t always popular, but our customer retention is high because our value
broadening and deepening our geographic impact. Our asset quality resilience during the financial crisis
proposition is more about our people than about place. We have tended to grow in markets we have acquired,
formed the basis of our asset quality throughout the last 10 years. We know how to acquire, enhance, and
because we identify and empower the people who matter to the customers. Acquisitions are never without
emotion and disruption. The drive for efficiency has the same effect. The community banking channel
that wouldn’t be there if people had not invested their money and their trust in us. We have created wealth
must gain efficiency in order to remain viable, profitable, and impactful for the people we serve. The basic
regionally by harnessing local capital and driving accretion through shared success. There is a big difference
strategy of sustained organic growth, innovation in delivery, and highly accretive acquisitions using the
between a long-term, local owner and a passive investment fund that merely buys stock out of mathematical
potent currency of a high-performance company holds rich opportunity in the coming years, and we are
necessity, yet we serve them both passionately.
investing in the right people and making the right decisions to continue this top-tier performance.
People often ask us whether we can maintain the personalism, the sense of belonging, and the
As 2021 ended, the Company’s market capitalization was over $1.2 billion. It is worth reflecting on
entrepreneurial spirit at the heart of our work. While we have figured out how to be impactful and
where that capital came from and what that means to the areas we serve. While we have been an SEC
meaningful to our customers and communities in several of our northern markets, most larger institutions’
reporting, or “public,” company since 2013, we have never done an open-market equity issuance. Our equity
business models do not have that focus. We need to invest in our future and keep our people growing and
has been sold face-to-face to our initial investors and accepted by those who sell us their banks. The people
developing. Above all, we need to remember the values and commitments that are resulting in better
who believed in us when we were a blank sheet of paper are always close to our hearts, and rewarding those
outcomes to our customers, our people, and our shareholders. High ideals must be made concrete in daily
who entrust their banks to our ownership is always on our minds. Unlike most acquirers, our acquisitions
actions. It is worth believing in, investing in, and communicating with people. It isn’t always easy, but it is
have consistently enhanced the shareholder value of both legacy Nicolet shareholders and those shareholders
worth it. Nicolet has grown and succeeded as an organization because of our values and the manner in
of acquired companies who have become our shareholders through selling us their banks. Much like our
which we work together and hold each other accountable. We have the leadership in place to continue as a
approach to customers and employees, we consistently seek to create shared success through fair pricing
high-impact, high-performing source of strength to the people and places we serve.
and deep and resilient relationships. As we have grown and entered the Russell 2000 index, the major
index funds have needed to acquire our stock. We have many active investment funds we have talked with
Thank you for being a part of our journey.
over the years, but they have tended to not buy our stock in the open market. We care about all of our
shareholders, but we particularly cherish the thousands of long-term individual owners seeded across the
cities and towns throughout Wisconsin and Michigan that we serve. They are strong brand advocates and
have watched us live the values we profess. Much of our market capitalization represents real wealth
accumulated through mutual trust and cooperation in the places we serve. This is how shared success has
played out among our shareholders, and there is a tremendous amount of wealth spread across our footprint
Robert B. Atwell
Michael E. Daniels
Dear shareholders, customers, employees, and the communities we serve:
opportunity for Nicolet in the future. We are excited to grow this line of business and to round out
Every year when we sit down to write this letter, it seems as if our audience has changed. Compared to
relationships with Nicolet’s excellent retail and wealth management platforms.
this time last year, we have a much larger shareholder base, more employees and customers, and a geographic
The Company also positioned itself to maintain its strong earnings and growth trajectory by investing
territory that has moved us solidly into Michigan and throughout much of Wisconsin. We always accept
in existing people, attracting new talent, and implementing its executive succession plan. In May 2021,
the challenge to say something meaningful in this letter, rather than keep it like a standard run-of-the-mill
Mike Daniels assumed the role of CEO. Over the 21 years since he co-founded Nicolet he has led the
shareholder letter. After all, we are shareholders too, and we would want to know what it’s like to have a
Company in many ways. This title change is as much a recognition of his well-established leadership as it
seat at the table. So, that’s what we will try to give you here.
is the assumption of new responsibilities.
In 2021, the Company had an outstanding year financially, strategically, and in the development of our
We recognize the advantage of having the two founders still being active and in the bank on a daily
future. Reported net income of $60.7 million, while strong in its own right, reflects the impact of
basis, however, our executive succession goes well beyond Bob and Mike. In that light, we would like to
merger-related expenses and substantial one-time charges related to the accounting methods required for
introduce you to our Executive Vice Presidents—Phil Moore, Brad Hutjens, and Eric Witczak. Phil joined
acquisitions. In 2021, we announced and closed two acquisitions—Mackinac Financial Corporation and
the Company as CFO in May after over 21 years of engagement with Nicolet as a strategic sounding
County Bancorp, Inc. These two acquisitions added roughly $3 billion in assets, or 60% of Nicolet’s
board and an external auditor. Brad, who has been with Nicolet since 2003 leads Credit, Operations, IT,
previous size. We closed and converted these acquisitions while maintaining solid organic growth across
Innovation, and Compliance. And Eric, who has been with Nicolet since the beginning, leads all revenue
our core markets. When we started Nicolet in 2000 with a blank piece of paper, we didn’t anticipate
lines—Commercial, Retail, and Wealth Management. In addition, all three are integral to our acquisition
discussing how to matter to Manistique, Alpena, Marquette, Manitowoc, and other similar communities,
strategy, performing due diligence and working on our integration team. While it looks like a traditional
but we have those discussions now. Back then, we simply believed that having a strong purpose of serving
“inside/outside” division of duties, they are skilled at every area of the bank and work well together.
others and creating shared success for the bank, our employees, and our customers would be welcomed in
For years now, the board assessed Nicolet’s performance based on growth, asset quality, and earnings.
these communities. So far, the results have proven that to be true.
As we have grown, and as different metrics have come in and out of favor, we find these to be the most accurate
With the acquisition of County Bancorp, Inc., we jumped headfirst into the agriculture banking
measure of what a strong community bank should be. We look at our history in three different phases:
business. We already had this presence with two prior acquisitions, but County was the clear ag banking
• organic growth in our first seven years, where growth was the defining metric
leader in the state of Wisconsin. We look at ag banking like we do other lines of business, where we deliver
• our success through the recession of 2008–10, when all investors wanted to discuss were asset quality metrics
our value through people. Adding County’s ag banking team to our existing team should prove to be a solid
• our growth-through-acquisition phase, where earnings is the lead metric.
As Nicolet continues to evolve, the metrics of growth, asset quality, and earnings remain our key
support good, profitable customer relationships. We know how to assess and price the value of the
indicators, and each have played a role in our strong capital management that has led us to where we are today.
relationships or organizations we acquire. We do that by having great frontline people who put their
Nicolet was a high-quality, high-performance company in the years preceding the pandemic. The pandemic
experience and initiative to work for our customers. As Mike frequently says, “We need to matter to our
economic policy measures (low rates coupled with unprecedented fiscal and monetary stimulus) swelled
customers, matter in our communities, and matter to each other.”
our balance sheet with our customers’ cash. Cash increased to around 20% of our balance sheet distorting
The community banking sector is experiencing sustained pressure from both large national banks and
capital ratios and the traditional profitability metrics. These distortions left our earnings per share (“EPS”)
the growth of non-bank fintech platforms. The national and regional banks have the scale to support higher
momentum unaffected. As we moved through 2020 and 2021, we have focused on growth in our core
tech investment. The fintech platforms benefit from lighter regulation, the absence of an investment in
EPS as the most meaningful metric. Measures such as return on assets and return on equity matter, but
physical locations, and lower earnings expectations from the capital markets. These macro factors are
continued growth in EPS helps our share price, which is what is most impactful to shareholders. Our EPS
accelerating consolidation among community banks with aging management and little succession talent.
showed rapid year-over-year growth through our many acquisitions, as we proved we could negotiate and
Shareholders and boards of smaller banks are experiencing stagnant profitability and an inability to invest
7
execute profitable acquisitions while maintaining solid asset quality. In addition to the two acquisitions,
in alternative revenue sources and delivery channels. While Nicolet experiences the pressures common to
the complexities of loan loss accounting in acquisitions, and the continued drag of excess cash make
our industry segment, we have effectively become the acquirer of choice for smaller institutions within a
tracking core profitability in 2021 challenging even for industry experts. Our year-end earnings release
relevant footprint. Our size does enable us to continue investing in innovation and digital efficiency. As we
contains an effort to reconcile GAAP accounting with what we believe to be more meaningful non-GAAP
grow, our target acquisition size has increased. The basic value proposition of an engaged community bank
measures. Following the December closing of the County acquisition the board announced an aggressive
with quality people remains attractive in our market, but with our growth comes the responsibility to
stock repurchase plan. This, together with our announced year-end results, caused analysts’ expectations
instill efficiency. As we acquire, we must have—and do have—the operating discipline to implement tough
(and our stock price) to become more closely aligned with both current and future EPS.
decisions on efficiency. When we map out cost savings, we promptly communicate and execute on the
The core profitability of the Company was strong and growing before the pandemic and has accelerated
tough decisions that go with preserving a strong, personal, and responsive community banking culture in
throughout. We are, as the analysts now describe us, a high-performing organic growth story with a potent
both our existing and acquired markets. In the last two years we have closed 24 branches in both our legacy
currency and 10-year track record as the acquirer of choice of companies that enhance our earnings while
and expansion markets. This isn’t always popular, but our customer retention is high because our value
broadening and deepening our geographic impact. Our asset quality resilience during the financial crisis
proposition is more about our people than about place. We have tended to grow in markets we have acquired,
formed the basis of our asset quality throughout the last 10 years. We know how to acquire, enhance, and
because we identify and empower the people who matter to the customers. Acquisitions are never without
emotion and disruption. The drive for efficiency has the same effect. The community banking channel
that wouldn’t be there if people had not invested their money and their trust in us. We have created wealth
must gain efficiency in order to remain viable, profitable, and impactful for the people we serve. The basic
regionally by harnessing local capital and driving accretion through shared success. There is a big difference
strategy of sustained organic growth, innovation in delivery, and highly accretive acquisitions using the
between a long-term, local owner and a passive investment fund that merely buys stock out of mathematical
potent currency of a high-performance company holds rich opportunity in the coming years, and we are
necessity, yet we serve them both passionately.
investing in the right people and making the right decisions to continue this top-tier performance.
People often ask us whether we can maintain the personalism, the sense of belonging, and the
As 2021 ended, the Company’s market capitalization was over $1.2 billion. It is worth reflecting on
entrepreneurial spirit at the heart of our work. While we have figured out how to be impactful and
where that capital came from and what that means to the areas we serve. While we have been an SEC
meaningful to our customers and communities in several of our northern markets, most larger institutions’
reporting, or “public,” company since 2013, we have never done an open-market equity issuance. Our equity
business models do not have that focus. We need to invest in our future and keep our people growing and
has been sold face-to-face to our initial investors and accepted by those who sell us their banks. The people
developing. Above all, we need to remember the values and commitments that are resulting in better
who believed in us when we were a blank sheet of paper are always close to our hearts, and rewarding those
outcomes to our customers, our people, and our shareholders. High ideals must be made concrete in daily
who entrust their banks to our ownership is always on our minds. Unlike most acquirers, our acquisitions
actions. It is worth believing in, investing in, and communicating with people. It isn’t always easy, but it is
have consistently enhanced the shareholder value of both legacy Nicolet shareholders and those shareholders
worth it. Nicolet has grown and succeeded as an organization because of our values and the manner in
of acquired companies who have become our shareholders through selling us their banks. Much like our
which we work together and hold each other accountable. We have the leadership in place to continue as a
approach to customers and employees, we consistently seek to create shared success through fair pricing
high-impact, high-performing source of strength to the people and places we serve.
and deep and resilient relationships. As we have grown and entered the Russell 2000 index, the major
index funds have needed to acquire our stock. We have many active investment funds we have talked with
Thank you for being a part of our journey.
over the years, but they have tended to not buy our stock in the open market. We care about all of our
shareholders, but we particularly cherish the thousands of long-term individual owners seeded across the
cities and towns throughout Wisconsin and Michigan that we serve. They are strong brand advocates and
have watched us live the values we profess. Much of our market capitalization represents real wealth
accumulated through mutual trust and cooperation in the places we serve. This is how shared success has
played out among our shareholders, and there is a tremendous amount of wealth spread across our footprint
Robert B. Atwell
Michael E. Daniels
Dear shareholders, customers, employees, and the communities we serve:
opportunity for Nicolet in the future. We are excited to grow this line of business and to round out
Every year when we sit down to write this letter, it seems as if our audience has changed. Compared to
relationships with Nicolet’s excellent retail and wealth management platforms.
this time last year, we have a much larger shareholder base, more employees and customers, and a geographic
The Company also positioned itself to maintain its strong earnings and growth trajectory by investing
territory that has moved us solidly into Michigan and throughout much of Wisconsin. We always accept
in existing people, attracting new talent, and implementing its executive succession plan. In May 2021,
the challenge to say something meaningful in this letter, rather than keep it like a standard run-of-the-mill
Mike Daniels assumed the role of CEO. Over the 21 years since he co-founded Nicolet he has led the
shareholder letter. After all, we are shareholders too, and we would want to know what it’s like to have a
Company in many ways. This title change is as much a recognition of his well-established leadership as it
seat at the table. So, that’s what we will try to give you here.
is the assumption of new responsibilities.
In 2021, the Company had an outstanding year financially, strategically, and in the development of our
We recognize the advantage of having the two founders still being active and in the bank on a daily
future. Reported net income of $60.7 million, while strong in its own right, reflects the impact of
basis, however, our executive succession goes well beyond Bob and Mike. In that light, we would like to
merger-related expenses and substantial one-time charges related to the accounting methods required for
introduce you to our Executive Vice Presidents—Phil Moore, Brad Hutjens, and Eric Witczak. Phil joined
acquisitions. In 2021, we announced and closed two acquisitions—Mackinac Financial Corporation and
the Company as CFO in May after over 21 years of engagement with Nicolet as a strategic sounding
County Bancorp, Inc. These two acquisitions added roughly $3 billion in assets, or 60% of Nicolet’s
board and an external auditor. Brad, who has been with Nicolet since 2003 leads Credit, Operations, IT,
previous size. We closed and converted these acquisitions while maintaining solid organic growth across
Innovation, and Compliance. And Eric, who has been with Nicolet since the beginning, leads all revenue
our core markets. When we started Nicolet in 2000 with a blank piece of paper, we didn’t anticipate
lines—Commercial, Retail, and Wealth Management. In addition, all three are integral to our acquisition
discussing how to matter to Manistique, Alpena, Marquette, Manitowoc, and other similar communities,
strategy, performing due diligence and working on our integration team. While it looks like a traditional
but we have those discussions now. Back then, we simply believed that having a strong purpose of serving
“inside/outside” division of duties, they are skilled at every area of the bank and work well together.
others and creating shared success for the bank, our employees, and our customers would be welcomed in
For years now, the board assessed Nicolet’s performance based on growth, asset quality, and earnings.
these communities. So far, the results have proven that to be true.
As we have grown, and as different metrics have come in and out of favor, we find these to be the most accurate
With the acquisition of County Bancorp, Inc., we jumped headfirst into the agriculture banking
measure of what a strong community bank should be. We look at our history in three different phases:
business. We already had this presence with two prior acquisitions, but County was the clear ag banking
• organic growth in our first seven years, where growth was the defining metric
leader in the state of Wisconsin. We look at ag banking like we do other lines of business, where we deliver
• our success through the recession of 2008–10, when all investors wanted to discuss were asset quality metrics
our value through people. Adding County’s ag banking team to our existing team should prove to be a solid
• our growth-through-acquisition phase, where earnings is the lead metric.
As Nicolet continues to evolve, the metrics of growth, asset quality, and earnings remain our key
support good, profitable customer relationships. We know how to assess and price the value of the
indicators, and each have played a role in our strong capital management that has led us to where we are today.
relationships or organizations we acquire. We do that by having great frontline people who put their
Nicolet was a high-quality, high-performance company in the years preceding the pandemic. The pandemic
experience and initiative to work for our customers. As Mike frequently says, “We need to matter to our
economic policy measures (low rates coupled with unprecedented fiscal and monetary stimulus) swelled
customers, matter in our communities, and matter to each other.”
our balance sheet with our customers’ cash. Cash increased to around 20% of our balance sheet distorting
The community banking sector is experiencing sustained pressure from both large national banks and
capital ratios and the traditional profitability metrics. These distortions left our earnings per share (“EPS”)
the growth of non-bank fintech platforms. The national and regional banks have the scale to support higher
momentum unaffected. As we moved through 2020 and 2021, we have focused on growth in our core
tech investment. The fintech platforms benefit from lighter regulation, the absence of an investment in
EPS as the most meaningful metric. Measures such as return on assets and return on equity matter, but
physical locations, and lower earnings expectations from the capital markets. These macro factors are
continued growth in EPS helps our share price, which is what is most impactful to shareholders. Our EPS
accelerating consolidation among community banks with aging management and little succession talent.
showed rapid year-over-year growth through our many acquisitions, as we proved we could negotiate and
Shareholders and boards of smaller banks are experiencing stagnant profitability and an inability to invest
execute profitable acquisitions while maintaining solid asset quality. In addition to the two acquisitions,
in alternative revenue sources and delivery channels. While Nicolet experiences the pressures common to
the complexities of loan loss accounting in acquisitions, and the continued drag of excess cash make
our industry segment, we have effectively become the acquirer of choice for smaller institutions within a
tracking core profitability in 2021 challenging even for industry experts. Our year-end earnings release
relevant footprint. Our size does enable us to continue investing in innovation and digital efficiency. As we
contains an effort to reconcile GAAP accounting with what we believe to be more meaningful non-GAAP
grow, our target acquisition size has increased. The basic value proposition of an engaged community bank
measures. Following the December closing of the County acquisition the board announced an aggressive
with quality people remains attractive in our market, but with our growth comes the responsibility to
stock repurchase plan. This, together with our announced year-end results, caused analysts’ expectations
instill efficiency. As we acquire, we must have—and do have—the operating discipline to implement tough
(and our stock price) to become more closely aligned with both current and future EPS.
decisions on efficiency. When we map out cost savings, we promptly communicate and execute on the
The core profitability of the Company was strong and growing before the pandemic and has accelerated
tough decisions that go with preserving a strong, personal, and responsive community banking culture in
throughout. We are, as the analysts now describe us, a high-performing organic growth story with a potent
both our existing and acquired markets. In the last two years we have closed 24 branches in both our legacy
currency and 10-year track record as the acquirer of choice of companies that enhance our earnings while
and expansion markets. This isn’t always popular, but our customer retention is high because our value
broadening and deepening our geographic impact. Our asset quality resilience during the financial crisis
proposition is more about our people than about place. We have tended to grow in markets we have acquired,
formed the basis of our asset quality throughout the last 10 years. We know how to acquire, enhance, and
because we identify and empower the people who matter to the customers. Acquisitions are never without
emotion and disruption. The drive for efficiency has the same effect. The community banking channel
that wouldn’t be there if people had not invested their money and their trust in us. We have created wealth
must gain efficiency in order to remain viable, profitable, and impactful for the people we serve. The basic
regionally by harnessing local capital and driving accretion through shared success. There is a big difference
strategy of sustained organic growth, innovation in delivery, and highly accretive acquisitions using the
between a long-term, local owner and a passive investment fund that merely buys stock out of mathematical
potent currency of a high-performance company holds rich opportunity in the coming years, and we are
necessity, yet we serve them both passionately.
investing in the right people and making the right decisions to continue this top-tier performance.
People often ask us whether we can maintain the personalism, the sense of belonging, and the
As 2021 ended, the Company’s market capitalization was over $1.2 billion. It is worth reflecting on
entrepreneurial spirit at the heart of our work. While we have figured out how to be impactful and
where that capital came from and what that means to the areas we serve. While we have been an SEC
meaningful to our customers and communities in several of our northern markets, most larger institutions’
reporting, or “public,” company since 2013, we have never done an open-market equity issuance. Our equity
business models do not have that focus. We need to invest in our future and keep our people growing and
has been sold face-to-face to our initial investors and accepted by those who sell us their banks. The people
developing. Above all, we need to remember the values and commitments that are resulting in better
who believed in us when we were a blank sheet of paper are always close to our hearts, and rewarding those
outcomes to our customers, our people, and our shareholders. High ideals must be made concrete in daily
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who entrust their banks to our ownership is always on our minds. Unlike most acquirers, our acquisitions
actions. It is worth believing in, investing in, and communicating with people. It isn’t always easy, but it is
have consistently enhanced the shareholder value of both legacy Nicolet shareholders and those shareholders
worth it. Nicolet has grown and succeeded as an organization because of our values and the manner in
of acquired companies who have become our shareholders through selling us their banks. Much like our
which we work together and hold each other accountable. We have the leadership in place to continue as a
approach to customers and employees, we consistently seek to create shared success through fair pricing
high-impact, high-performing source of strength to the people and places we serve.
and deep and resilient relationships. As we have grown and entered the Russell 2000 index, the major
index funds have needed to acquire our stock. We have many active investment funds we have talked with
Thank you for being a part of our journey.
over the years, but they have tended to not buy our stock in the open market. We care about all of our
shareholders, but we particularly cherish the thousands of long-term individual owners seeded across the
cities and towns throughout Wisconsin and Michigan that we serve. They are strong brand advocates and
have watched us live the values we profess. Much of our market capitalization represents real wealth
accumulated through mutual trust and cooperation in the places we serve. This is how shared success has
played out among our shareholders, and there is a tremendous amount of wealth spread across our footprint
Robert B. Atwell
Michael E. Daniels
B O A R D O F D I R E C T O R S
N I C O L E T B A N K S H A R E S , I N C . O F F I C E R S
Robert Atwell
Executive Chairman, Nicolet Bankshares, Inc.
Michael Daniels
President and Chief Executive Officer, Nicolet Bankshares, Inc.
Héctor Colón
President & CEO, Lutheran Social Services of Wisconsin & Upper Michigan, Inc.
Lynn Davis, Ph.D.
Founding Partner at Nutrition Professionals, Inc., Quality Roasting, Inc.
and Breeze Dairy Group, LLC
Rachel Campos-Duffy
Media & Communications Consultant, FOX News Contributor
John Dykema
President and Owner, Campbell Wrapper Corp and Circle Packaging Machinery, Inc.
Terrence Fulwiler
Retired CEO, WS Packaging Group
Chris Ghidorzi
President of Property Development, Ghidorzi Companies
Andrew Hetzel, Jr.
CEO, FyterTech Nonwovens LLC
Ann Lawson
Retired CFO, Nicolet Bankshares, Inc.
Donald Long, Jr.
Former Owner and CEO, Century Drill and Tool Co., Inc.
Dustin McClone
President and CEO, McClone Insurance Group
Susan Merkatoris
Certified Public Accountant, Owner and Managing Member, Larboard Enterprises, LLC
Pierce Smith
Board of Directors of Menasha Corporation
Paul Tobias
Former Chairman and Chief Executive Officer of Mackinac Financial Corporation
and Former Executive Chairman of mBank
Robert Weyers
Owner, Commercial Horizons, Inc.
Robert Atwell
Executive Chairman
Michael Daniels
President and Chief Executive Officer
H. Phillip Moore, Jr.
Chief Financial Officer
Eric Witczak
Executive Vice President and Secretary
N I C O L E T N A T I O N A L B A N K E X E C U T I V E O F F I C E R S
11
Robert Atwell
Executive Chairman
Michael Daniels
President and Chief Executive Officer
Brad Hutjens
Executive Vice President, Chief Credit Officer, Compliance and Risk Manager
Patrick Madson
Senior Vice President, Wealth Management
H. Phillip Moore, Jr.
Chief Financial Officer
Eric Witczak
Executive Vice President
F I N A N C I A L S
F I N A N C I A L S
Nicolet Bankshares, Inc.
(In thousands, except per share data)
Nicolet Bankshares, Inc.
(In thousands)
Years Ended December 31,
At December 31,
Condensed Consolidated Statements of Income
2021
2020 % Change
Condensed Consolidated Balance Sheets
2021
2020 % Change
Interest income
Interest expense
Net interest income
Provision for credit losses
Noninterest income
Noninterest expense
Income before income tax expense
Income tax expense
Net income
$171,559
$149,202
15%
13,604
19,864
-32%
157,955
129,338
14,900
10,300
67,364
62,626
22%
45%
8%
129,297
100,719
28%
81,122
80,945
20,470
20,476
60,652
60,469
0%
0%
0%
Net income attributable to noncontrolling interest
-
347
-100%
Net income attributable to Nicolet Bankshares, Inc.
$60,652
$60,122
1%
Basic earnings per common share
Diluted earnings per common share
Basic weighted average common shares
Diluted weighted average common shares
$5.65
$5.44
$5.82
$5.70
10,736
10,337
11,145
10,541
-3%
-5%
4%
6%
Cash and cash equivalents
Securities available for sale
Securities held to maturity
Loans
Allowance for credit losses
Goodwill and other intangibles
All other assets
Total assets
Deposits
Wholesale funding
Other liabilities
Common equity
$595,292
$802,859
-26%
921,661
539,337
71%
651,803
-
100%
4,621,836
2,789,101
(49,672)
(32,173)
339,492
175,353
66%
54%
94%
614,625
277,312
122%
$7,695,037
$4,551,789
69%
$6,465,916
$3,910,399
65%
216,915
53,869
303%
120,315
48,332
149%
13
Total liabilities and stockholders' equity
$7,695,037
$4,551,789
891,891
539,189
65%
69%
Outstanding common shares
13,994
10,011
40%
S H A R E H O L D E R I N F O
Annual Meeting
Shareholders’ Meeting – Monday, May 9, 2022 (5:00 p.m.)
Meyer Theatre
117 South Washington Street / Green Bay, WI 54301
Independent Auditor
BKD LLP
910 E. St. Louis Street / Suite 200 / Springf ield, MO 65801
Transfer Agent
Computershare
C/O Shareholder Services
P.O. Box 505000 / Louisville, KY 40233-5000, United States
Overnight Delivery
Computershare
C/O Shareholder Services
462 South 4th Street / Suite 1600 / Louisville, KY 40202
Shareholder website:
www.computershare.com/investor
Shareholder online inquiries:
https://www-us.computershare.com/investor/Contact
Toll free in the US: 800.962.4284 / Outside the US: 781.575.3120
Fax: 312.604.2312
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