Nicolet Bankshares Reports Strong Second-Quarter 2026 Results as Net Income Reaches $57 Million
Nicolet Bankshares, Inc. (NYSE: NIC) reported a significant improvement in financial performance for the second quarter of 2026, with net income reaching $57 million and diluted earnings per common share totaling $2.62. The results reflect continued progress following the company’s acquisition of MidWestOne Financial Group, Inc., as well as improving net interest margins, stable credit quality, and growth in key banking businesses.
The second-quarter performance represented a substantial increase from the first quarter of 2026, when Nicolet reported net income of $15 million and diluted earnings per common share of $0.81. Compared with the second quarter of 2025, net income increased from $36 million, while diluted earnings per share rose from $2.34.
Nicolet noted that reported earnings for both the second and first quarters of 2026 were affected by certain non-core items, primarily expenses associated with the MidWestOne transaction. These items reduced diluted earnings per common share by $0.37 in the second quarter and $1.94 in the first quarter. After adjusting for these impacts, core diluted earnings per common share, a non-GAAP measure, were $2.99 for the second quarter of 2026 compared with $2.75 for the first quarter.
The results highlight the company’s progress in integrating MidWestOne while continuing to manage its balance sheet, improve profitability, and strengthen its banking franchise across the Midwest.
Management Highlights Continued Operational Progress
Mike Daniels, Chairman, President, and Chief Executive Officer of Nicolet, said the second-quarter results demonstrated the strength of the company’s operating model and the disciplined execution of its management team.
According to Daniels, core earnings remained strong during the quarter, while the company benefited from expansion in its net interest margin and continued solid credit performance. The combination of improved profitability and stable asset quality also enabled Nicolet to continue repurchasing shares during the quarter while increasing tangible book value.
A major focus for the company remains the integration of MidWestOne Financial Group, which Nicolet acquired on February 13, 2026. Daniels said the integration process continued to advance while employees remained focused on maintaining customer service and executing the company’s integration plan.
Nicolet expects to complete its systems conversion later in the summer of 2026. Once the conversion is completed, the company expects to begin realizing the planned cost savings associated with the transaction. Management believes these savings will help strengthen profitability and support a return toward the high levels of earnings and returns that have historically characterized Nicolet’s performance.
The company also continued to focus on improving the composition of its balance sheet. Although total loans and deposits were relatively stable at the end of the second quarter, management said the underlying mix of both portfolios continued to improve.
The company has been seeing a shift toward higher-yielding commercial loans in its core markets, supported by growth in lower-cost core deposits. Management believes that this combination should support additional net interest margin expansion and create a stronger foundation for organic growth.
Nicolet also pointed to continued momentum across its markets, including opportunities created by its expanded presence in Iowa and Minnesota. These markets, together with the company’s existing footprint, are expected to provide additional opportunities for commercial banking, relationship expansion, and long-term balance sheet growth.
MidWestOne Acquisition Continues to Influence Financial Results
The financial results for 2026 reflect the timing and size of Nicolet’s acquisition of MidWestOne Financial Group. Because the transaction closed on February 13, 2026, certain income statement results, average balances, and financial ratios for the year include only partial contributions from MidWestOne during the first quarter and a full quarter of contribution during the second quarter.
At the time of the acquisition, MidWestOne added approximately $6.1 billion in total assets, $4.4 billion in loans, and $5.3 billion in deposits to Nicolet’s balance sheet.
The impact of the transaction was particularly evident in second-quarter average balances. Nicolet benefited from a full quarter of MidWestOne-related assets, loans, securities, deposits, and operating expenses. As a result, comparisons between the first and second quarters include both the effects of a larger combined banking organization and the ongoing integration process.
Management expects the financial impact of the transaction to continue evolving as the company completes the systems conversion and moves toward the full realization of expected operating efficiencies.
Balance Sheet Remains Strong
At June 30, 2026, Nicolet reported total assets of approximately $15.4 billion. This represented a decline of $160 million from the end of the first quarter, primarily due to lower cash and cash equivalents.
Total loans declined by $32 million compared with March 31, 2026, while investment balances increased by $20 million. The relatively stable loan balance reflects the company’s focus on managing portfolio composition and pursuing opportunities in higher-yielding commercial lending markets.
Total deposits stood at $12.5 billion at the end of the second quarter, down $101 million from the prior quarter. The decrease was primarily attributable to a $100 million reduction in brokered deposits, while core deposits declined by approximately $1 million.
The company has continued to emphasize core deposit growth as an important component of its balance sheet strategy. Lower-cost core deposits can help support net interest margin performance and reduce reliance on more expensive wholesale funding sources.
Long-term borrowings declined by $87 million during the quarter. The reduction was primarily related to the early redemption of junior subordinated debentures.
Total capital reached $2.3 billion at June 30, 2026, an increase of $15 million from March 31. Earnings generated during the quarter contributed to capital growth, although the increase was partially offset by common stock repurchases and the quarterly common stock dividend.
Asset Quality Remains Stable
Credit quality remained a key strength for Nicolet during the second quarter. Nonperforming assets totaled $75 million at June 30, 2026, representing 0.49% of total assets. This compared with $79 million, or 0.51% of total assets, at the end of the first quarter.
The decline in nonperforming assets indicates continued stability in the company’s credit portfolio. Nicolet also reported that loan net charge-offs remained negligible during the quarter.
The allowance for credit losses on loans was $134 million at June 30, representing 1.23% of total loans. The allowance was $133 million, also equal to 1.23% of total loans, at March 31, 2026.
The stable allowance coverage ratio, combined with low net charge-offs and a modest decline in nonperforming assets, reflects the company’s continued focus on credit discipline and risk management.
Management has emphasized the importance of maintaining strong underwriting standards while pursuing growth opportunities. The company’s credit performance remains an important factor supporting its ability to expand its loan portfolio while protecting long-term shareholder value.
Net Interest Income Rises 29%
Net interest income was $141 million in the second quarter of 2026, an increase of $32 million, or 29%, from $109 million in the first quarter.
The increase was driven by a $43 million rise in interest income, partially offset by an $11 million increase in interest expense.
Average interest-earning assets reached $13.9 billion during the quarter, an increase of $2.6 billion from the first quarter. Average loans increased by $2.1 billion, while average securities rose by $567 million. Much of the increase was related to the inclusion of a full quarter of MidWestOne balances.
Average interest-bearing liabilities also increased, rising to $10.4 billion, an increase of $2.0 billion from the first quarter. This increase similarly reflected the inclusion of MidWestOne’s funding base.
Nicolet’s net interest margin expanded to 4.14% in the second quarter, compared with 3.98% in the first quarter. Loan purchase accounting accretion contributed to the margin in both periods, adding approximately 23 basis points in the second quarter and 18 basis points in the first quarter.
The yield on interest-earning assets increased by 13 basis points to 5.86%. Loan yields increased by eight basis points to 6.26%. The improvement reflected a combination of loan portfolio performance, purchase accounting accretion, and higher investment yields.
The cost of interest-bearing liabilities declined by seven basis points to 2.29%. Nicolet benefited from a full quarter of lower core deposit funding costs associated with the MidWestOne franchise.
The combination of higher asset yields and lower funding costs helped drive the expansion in net interest margin.
Noninterest Income Benefits from Broader Franchise
Noninterest income totaled $36 million during the second quarter, an increase of $11 million from the first quarter.
Excluding net asset gains and losses, noninterest income increased by approximately $8 million. The improvement included a $1 million increase in wealth management fee income, a $1 million increase in service charges on deposit accounts, and a $2 million increase in card interchange income.
The majority of these increases were associated with the MidWestOne acquisition and the broader customer and business base now included in Nicolet’s operations.
Nicolet also reported net asset gains of approximately $2 million during the second quarter. The gains were primarily related to favorable market valuations on an equity investment.
This compared with net asset losses of approximately $1 million in the first quarter, which were primarily related to a write-down on an equity investment.
Noninterest Expense Declines as Merger Costs Fall
Noninterest expense totaled $104 million in the second quarter, a decrease of $6 million from the first quarter.
The decline was primarily driven by a $33 million reduction in merger-related expenses. This reduction was partially offset by the inclusion of a full quarter of operating expenses associated with MidWestOne.
Personnel expenses increased by $12 million from the first quarter, reflecting the larger employee base following the acquisition.
Non-personnel expenses declined by $18 million. The reduction primarily reflected the significant decrease in merger-related expenses, although overall operating expenses increased as the company continued to operate a larger combined organization.
The second-quarter expense base also included a $5 million loss related to the early redemption of junior subordinated debentures.
As integration activities progress and the company completes its systems conversion, Nicolet expects to continue focusing on cost management and the realization of planned transaction-related efficiencies.
Denver Branch Sale Expected to Close in Third Quarter
Nicolet is also taking steps to further optimize its geographic footprint following the MidWestOne acquisition.
On April 21, 2026, Nicolet National Bank entered into a definitive purchase and assumption agreement to sell its Denver, Colorado banking branches to Sunwest Bank.
The Denver locations were acquired as part of the MidWestOne transaction. The all-cash transaction has received regulatory approval and has been approved by the respective boards of directors.
The sale is expected to close during the third quarter of 2026, subject to customary closing conditions.
As of June 30, 2026, the Denver branches had approximately $402 million in loans and approximately $388 million in deposits.
The planned transaction reflects Nicolet’s broader approach to managing its franchise following the MidWestOne acquisition. By selling the Denver branches, the company can focus resources on markets where it has stronger strategic alignment and greater opportunities for long-term growth.
Nicolet’s second-quarter performance reflects a period of significant transition and expansion following the MidWestOne acquisition. Despite the substantial operational demands associated with integrating a large banking organization, the company delivered stronger net income, expanded its net interest margin, maintained stable credit quality, and continued to strengthen its balance sheet.
Management expects the completion of the systems conversion later this summer to mark an important milestone in the integration process. The company believes that the realization of planned cost savings, combined with improving loan and deposit mix, could provide additional support for future profitability.
Nicolet also continues to benefit from opportunities in its expanded markets, particularly in Iowa and Minnesota. Growth in higher-yielding commercial loans, combined with efforts to expand lower-cost core deposits, is expected to remain an important component of the company’s organic growth strategy.
With total assets of approximately $15.4 billion, deposits of $12.5 billion, and capital of $2.3 billion at the end of the second quarter, Nicolet enters the second half of 2026 with a significantly larger platform than it had a year earlier.
The company’s focus will now shift increasingly toward completing the MidWestOne integration, capturing anticipated cost savings, improving operating efficiency, and strengthening customer relationships across its expanded footprint. Management believes these efforts, combined with stable asset quality and continued net interest margin expansion, position Nicolet to pursue further growth and improve returns over the remainder of 2026.
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