Nicolet Bankshares, Inc. Announces First Quarter 2018 Earnings

PRNewswire 17-Apr-2018 4:10 PM

Nicolet Bankshares, Inc. Announces First Quarter 2018 Earnings

-- Net income of $9.6 million, 5% above fourth quarter 2017 and 54% above first quarter 2017

-- Earnings per diluted common share of $0.94, 7% higher than fourth quarter 2017 and 36% higher than first quarter 2017

-- Annualized return on average assets of 1.34%, compared to 1.27% for fourth quarter 2017 and 1.11% for first quarter 2017

-- Strong average loan growth of $47 million or 9% annualized over fourth quarter 2017, and up 32% compared to first quarter 2017

PR Newswire

GREEN BAY, Wis., April 17, 2018 /PRNewswire/ -- Nicolet Bankshares, Inc. (NASDAQ:NCBS) ("Nicolet") announced first quarter 2018 net income of $9.6 million and earnings per diluted common share of $0.94, compared to $9.1 million and $0.88 for fourth quarter 2017, and $6.2 million and $0.69 for first quarter 2017, respectively.  Annualized quarterly return on average assets was 1.34%, 1.27% and 1.11%, for first quarter 2018, fourth quarter 2017 and first quarter 2017, respectively.

Nicolet Bankshares, Inc. Logo (PRNewsFoto/Nicolet Bankshares, Inc.)

"We are off to a solid start for the year, with net income of $9.6 million," said Bob Atwell, Chairman and CEO of Nicolet.  "First quarter pre-tax income of $12.5 million was slightly lower than $12.8 million for fourth quarter 2017, as our first quarters accommodate fewer earning days, slower mortgage business, and higher expenses that reset in the new year. Tax expense was $0.8 million lower between the linked quarters, benefiting mainly from the reduced corporate tax rate effective for 2018."  

"For 2018, we articulated our goal to continue strong growth in loans, deposits and wealth management revenues, in a cost-effective, profitable manner to sustain a healthy return on average assets," Atwell said.  "Compared to fourth quarter 2017, average loans were up 2%, trust and brokerage fees combined increased 2%, and earnings per diluted share were up 7%.  Asset quality remains sound."

"As a historically acquisitive bank, we just filed a universal shelf registration as a continued measure of preparedness, allowing us to access public markets more readily to raise common or preferred stock. We continue to be active in assessing targeted acquisition opportunities," said Atwell. 

At March 31, 2018, assets were $3.2 billion and deposits were $2.8 billion, both increasing $0.3 billion over December 31, 2017, attributable to a $0.3 billion short-term transactional deposit of a long-standing commercial customer.  Excluding the impact of this deposit transaction, total assets and deposits were minimally changed compared to year-end 2017.  At March 31, 2018, loans were $2.1 billion, 1% higher than year-end 2017, and quarterly average loans continued on a rising trend, up 2% over fourth quarter 2017, or 9% annualized.

Nonperforming assets declined to $13 million, representing 0.40% of total assets at March 31, 2018, down favorably from 0.49% at December 31, 2017 and 0.70% at March 31, 2017.  For first quarter 2018, the provision for loan losses was $0.5 million compared to net charge-offs of $0.4 million.  The allowance for loan losses increased to $12.8 million, representing 0.61% of total loans at March 31, 2018, unchanged from 0.61% of total loans at year-end 2017. 

Total capital was $364 million at March 31, 2018, unchanged from December 31, 2017, largely due to stock repurchases and net fair value investment changes offsetting first quarter earnings.

During the first quarter of 2018, we utilized $8.0 million to repurchase and cancel approximately 144,600 shares of our common stock pursuant to our 2014 common stock repurchase program, bringing the life-to- cumulative totals to 851,800 shares repurchased for $32.1 million.  On February 20, 2018, our board authorized an increase to the program of $12 million or 200,000 shares.  As a result, there remains $9.9 million authorized under the repurchase program to be utilized from time-to-time to repurchase shares in the open market, through block transactions or in private transactions as an alternative source of capital. 

Net income for the quarter ended March 31, 2018 was $9.6 million, up $0.5 million over $9.1 million for fourth quarter 2017.  Net income was up 5% between the linked quarters, while diluted weighted average shares were down 1%, resulting in a 7% increase in diluted earnings per share of $0.94 for first quarter 2018 compared to $0.88 for fourth quarter 2017.

Pre-tax income was down $0.3 million between the linked quarters, largely due to the first quarter having fewer earning days, slower mortgage business, and higher expenses that reset in the new year.  First quarter tax expense benefited from the lower corporate tax rate effective in 2018 and a $0.2 million credit for the tax impact of stock option exercises.  Tax expense for the fourth quarter was impacted first by the December 2017 passage of the Tax Cuts and Jobs Act, which required companies to evaluate deferred tax positions under the lower corporate tax rate, resulting in $0.9 million of additional tax expense for the net impact of this legislation, and second by a $1.7 million credit for the tax impact of large stock option exercises in that quarter.  As a result, the effective tax rate was 23.2% for first quarter 2018 compared to 28.6% for fourth quarter 2017.

Net interest income increased $0.4 million or 1% over fourth quarter 2017, despite fewer earning days, comprised of a $0.9 million increase in interest income (attributable to $0.3 million higher aggregate discount income and higher earning asset volumes) and a $0.5 million increase in interest expense (driven mostly by rising rates). 

Between the linked quarters, noninterest income increased $0.2 million or 2%, most notably due to $0.2 million of net gains on the sale of fixed assets, $0.3 million of annual card contract incentives included in other noninterest income, offset by $0.3 million lower net mortgage income on slower seasonal volumes. 

Noninterest expense increased $0.8 million or 4% over fourth quarter 2017, as expenses reset with the new year, including increases of $0.4 million or 4% in personnel expense, $0.1 million in occupancy (largely elevated utilities and snowplowing), and $0.3 million or 4% across other line items combined.  The increase in personnel was attributable to annual merit increases in pay, in addition to competitive market-based wage changes made more broadly across staff positions at the start of the year, while higher health costs for 2018 were offset by lower incentive expense for 2018 compared to the fourth quarter of 2017.      

The timing of Nicolet's April 2017 First Menasha Bancshares, Inc. ("First Menasha") acquisition, at approximately 20% of pre-merger assets at the time of acquisition, impacts financial comparisons.  Certain income statement results, average balances and related ratios for 2018 include three months of First Menasha operations, versus no contribution of First Menasha in the comparable first quarter 2017 period and two months of contribution in the second quarter 2017.  Quarterly results included non-recurring other direct merger and integration pre-tax expenses of $0.2 million and $0.3 million in the first and second quarters of 2017, respectively.      

About Nicolet Bankshares, Inc.
Nicolet Bankshares, Inc. is the bank holding company of Nicolet National Bank, a growing, full-service, community bank providing services ranging from commercial and consumer banking to wealth management and retirement plan services.  Founded in Green Bay in 2000, Nicolet National Bank operates branches in Northeast and Central Wisconsin and the upper peninsula of Michigan.  More information can be found at www.nicoletbank.com.

Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities law.  Statements in this release that are not strictly historical are forward-looking and based upon current expectations that may differ materially from actual results.  These forward-looking statements, identified by words such as "will", "expect", "believe," "prospects" or other words of similar meaning, involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein.  These risks and uncertainties include, but are not limited to, general economic trends and changes in interest rates, increased competition, regulatory or legislative developments affecting the financial industry generally or Nicolet specifically, the interpretations and impact of the recently enacted tax legislation, changes in consumer demand for financial services, the possibility of unforeseen events affecting the industry generally or Nicolet specifically, the uncertainties associated with newly developed or acquired operations and market disruptions.  Nicolet undertakes no obligation to release revisions to these forward-looking statements publicly to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.

 

Nicolet Bankshares, Inc.

Consolidated Financial Summary (Unaudited)



At or for the Quarter Ended

(In thousands, except per share data)


3/31/2018



12/31/2017



9/30/2017



6/30/2017



3/31/2017

Results of operations:















Interest income

$

30,785


$

29,836


$

29,454


$

26,880


$

23,083

Interest expense


3,911



3,329



3,063



2,353



1,766

Net interest income


26,874



26,507



26,391



24,527



21,317

Provision for loan losses


510



450



975



450



450

Net interest income after provision for loan losses


26,364



26,057



25,416



24,077



20,867

Noninterest income


8,824



8,621



10,164



9,085



6,769

Noninterest expense


22,642



21,858



20,862



20,313



18,323

Income before income tax expense


12,546



12,820



14,718



12,849



9,313

Income tax expense


2,908



3,662



5,133



4,440



3,032

Net income


9,638



9,158



9,585



8,409



6,281

Net income attributable to noncontrolling interest


61



55



74



81



73

Net income attributable to Nicolet Bankshares, Inc.

$

9,577


$

9,103


$

9,511


$

8,328


$

6,208

Earnings per common share:















Basic

$

0.98


$

0.93


$

0.97


$

0.88


$

0.72

Diluted

$

0.94


$

0.88


$

0.91


$

0.83


$

0.69

Common Shares:















Basic weighted average


9,765



9,805



9,837



9,516



8,584

Diluted weighted average


10,225



10,368



10,409



9,992



8,958

Outstanding


9,699



9,818



9,799



9,863



8,605

Noninterest Income/Noninterest Expense:















Service charges on deposit accounts

$

1,190


$

1,237


$

1,238


$

1,121


$

1,008

Mortgage income, net


1,080



1,339



1,774



1,406



842

Trust services fee income


1,606



1,600



1,479



1,485



1,467

Brokerage fee income


1,604



1,544



1,500



1,433



1,259

Card interchange income


1,243



1,268



1,225



1,173



980

Other noninterest income


1,897



1,675



1,643



1,695



1,219

Noninterest income without net gains

$

8,620


$

8,663


$

8,859


$

8,313


$

6,775

Gain (loss) on sale, disposal or writedown of assets, net


204



(42)



1,305



772



(6)

Total noninterest income

$

8,824


$

8,621


$

10,164


$

9,085


$

6,769
















Personnel expense

$

12,492


$

12,054


$

11,488


$

10,983


$

9,933

Occupancy, equipment and office


3,787



3,695



3,559



3,223



2,831

Business development and marketing


1,342



1,341



1,113



1,317



929

Data processing


2,320



2,287



2,238



2,207



1,983

FDIC assessments


273



205



205



145



232

Intangibles amortization


1,182



1,181



1,173



1,178



1,163

Other noninterest expense


1,246



1,095



1,086



1,260



1,252

Total noninterest expense

$

22,642


$

21,858


$

20,862


$

20,313


$

18,323

 

Nicolet Bankshares, Inc.

Consolidated Financial Summary (Unaudited)



At or for the Quarter Ended

(In thousands, except per share data)


3/31/2018



12/31/2017



9/30/2017



6/30/2017



3/31/2017

Period-End Balances:















Loans

$

2,100,597


$

2,087,925


$

2,051,122


$

2,009,964


$

1,618,279

Allowance for loan losses


12,765



12,653



12,610



12,591



12,189

Securities available-for-sale, at fair value


401,130



405,153



408,217



418,286



404,358

Goodwill and other intangibles, net


127,224



128,406



129,588



128,871



86,776

Total assets


3,223,935



2,932,433



2,845,730



2,825,917



2,292,644

Deposits


2,765,090



2,471,064



2,366,951



2,389,971



1,946,271

Stockholders' equity


363,988



364,178



360,426



352,384



285,022

Book value per common share


37.53



37.09



36.78



35.73



33.12

Tangible book value per common share


24.41



24.01



23.56



22.66



23.04

Average Balances:















Loans

$

2,114,345


$

2,066,974


$

2,035,277


$

1,888,320


$

1,599,701

Interest-earning assets


2,584,070



2,531,066



2,505,073



2,336,124



2,028,291

Total assets


2,896,533



2,852,400



2,825,542



2,635,925



2,272,836

Deposits


2,436,103



2,385,821



2,377,229



2,214,865



1,929,062

Interest-bearing liabilities


1,925,443



1,835,375



1,854,340



1,779,366



1,526,779

Goodwill and other intangibles, net


127,801



128,980



129,158



115,698



87,344

Stockholders' equity


366,002



361,455



358,227



329,201



280,188

Financial Ratios*:















Return on average assets


1.34

%


1.27

%


1.34

%


1.27

%


1.11

Return on average common equity


10.61



9.99



10.53



10.15



8.99

Return on average tangible common equity


16.31



15.53



16.47



15.64



13.06

Average equity to average assets


12.64



12.67



12.68



12.49



12.33

Earning asset yield


4.81



4.73



4.72



4.67



4.67

Cost of funds


0.82



0.72



0.65



0.53



0.47

Net interest margin


4.20



4.21



4.24



4.27



4.32

Stockholders' equity to assets


11.29



12.42



12.67



12.47



12.43

Net loan charge-offs to average loans


0.08



0.08



0.19



0.01



0.02

Nonperforming loans to total loans


0.56



0.63



0.70



0.84



0.85

Nonperforming assets to total assets


0.40



0.49



0.55



0.66



0.70

Allowance for loan losses to loans


0.61



0.61



0.61



0.63



0.75

Effective tax rate


23.18



28.56



34.88



34.56



32.56

Selected Tax Items:















Tax expense (benefit) on stock-based compensation

$

(159)


$

(1,678)


$

(15)


$

(64)


$

(97)

Tax expense (benefit) of tax reform items


-



896



-



-



-

















*Income statement-related ratios for partial-year periods are annualized.

 

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SOURCE Nicolet Bankshares, Inc.

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