Nicolet Bankshares Inc. · NYSE:NIC
Nicolet Bankshares — Debt Investor Presentation (July 2021)
41 slides from Nicolet Bankshares's debt investor presentation, Jul 7, 2021
Slide 1: Subordinated Debt Offering Investor Presentation
SUBORDINATED DEBT OFFERING INVESTOR PRESENTATION Working with Marketing on new style & color scheme throughout JUNE 2021
Slide 2: Certain Important Information: Securities Legend
Certain Important Information Securities Legend This Subordinated Debt Offering Investor Presentation is confidential and does not constitute or form part of any offer to sell, or a solicitation of an offer to purchase, any securities of Nicolet Bankshares, Inc., or any of its affiliates or subsidia
Slide 3: Forward Looking Statements Safe Harbor
Certain Important Information Forward Looking Statements “Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995 Certain statements contained in this presentation, which are not statements of historical fact, constitute forward-looking statements within the meaning of the
Slide 4: Table of Contents
Table of Contents 4 Section 1 Franchise Overview and Credit Highlights 2 Financial Highlights 3 Securities, Loan & Deposit Portfolios 4 Risk Management & Capital Position 5 Appendix
Slide 5: Offering Term Sheet
Offering Term Sheet 5 Issuer 5 Years Nicolet Bankshares, Inc. (NCBS) BBB- (Kroll Bond Rating Agency) 10 Years Fixed-to-floating Rate Subordinated Debt Due 2031 General corporate purposes, which may include funding additional loan growth, common stock repurchases or acquisitions Keefe, Bruyette & Woo
Slide 6: Franchise Overview & Credit Highlights
6 1 Franchise Overview & Credit Highlights
Slide 7: Management Presenters
Management Presenters 7 Name Role Years with Nicolet Years Experience in Financial Services Bob Atwell (63) Founder & Executive Chairman 20 40+ Mike Daniels (56) Founder, President & CEO 20 35+ Phil Moore (60) Chief Financial Officer < 1 35+ Brad Hutjens (40) EVP, Chief Credit Officer, Compliance &
Slide 8: Overview of Nicolet Bankshares, Inc.
2018 2019 2020 YTD 3/31 3/31 PF (1) Total Assets $3,097 $3,577 $4,552 $4,544 $7,560 Total Loans $2,166 $2,574 $2,789 $2,846 $4,915 Total Deposits $2,614 $2,954 $3,910 $3,901 $6,276 Total Equity $387 $516 $539 $550 $880 ROAA 1.38% 1.75% 1.41% 1.64% ROATCE 16.7% 18.5% 16.8% 20.0% NIM 4.04% 4.19% 3.38%
Slide 9: Northern Wisconsin's Leading Community Bank
Northern Wisconsin’s Leading Community Bank 9 Nicolet is Northeast and Northcentral Wisconsin’s leading community bank, operating in 12 counties through 36 branches with a “Lead Local” market share position in Brown, Door and Winnebago Counties, and a Top 5 position in six additional counties
Slide 10: Commercially-Focused Community Banking Model
$ 1 8 7 $ 2 8 2 $ 2 9 8 $ 3 1 7 $ 2 1 8 $ 2 1 8 33% 39% 40% 40% 27% 27% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% $0 $100 $200 $300 $400 $500 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 31-Mar Li n e U sa ge ( % ) - lin e Li n e U sa ge ( $ M ) - b ar s Commercially-Focused Community Banking Model 10 *Excludes $
Slide 11: Strong Core Deposit Franchise
Demand 31% NOW & Other Transaction 17% Savings 15% Money Market 22% Brokered 7% Core Time 8% Strong Core Deposit Franchise 11 Demonstrated ability over time to rely on core deposits as primary funding source (increase in 2020 was largely the result of strong core deposit growth through various fisca
Slide 12: Experienced & Seasoned M&A Leader in the Upper Midwest
2012 2013 2014 2015 2016 2017 2018 2019 2020 Pro Forma A ss et s Experienced & Seasoned M&A Leader in the Upper Midwest 12 $1.2 B $0.7 B $1.2 B $1.2 B $2.3 B $2.9 B $3.1 B $3.6 B $4.6 B $7.5 B 2013 Mid-Wisconsin Financial Services Bank of Wausau (FDIC assisted) 2016 Baylake Corp 2017 First Menasha B
Slide 13: Acquisition of Mackinac Financial
Acquisition of Mackinac Financial (Nasdaq: MFNC) 13 Establishes Nicolet as the largest community bank in Michigan’s Upper Peninsula(1) Builds additional scale by creating a $6.1 billion community banking franchise (#2 in Wisconsin) with an approximately $1.0 billion market capitalization(2) Co
Slide 14: Mackinac Financial Highlights & Market Overview
Mackinac Financial Highlights & Market Overview 14 Mackinac Financial Branch MapMackinac Market Overview(1) • Creates the #1 community bank in the Upper Peninsula, as ranked by total pro forma deposits • High quality, low cost deposit base throughout MI and WI • Solid market positions in several com
Slide 15: Acquisition of County Bancorp, Inc.
Acquisition of County Bancorp, Inc. (Nasdaq: ICBK) 15 Establishes Nicolet as #1 Banking Dairy Lender in the state of Wisconsin Creates an additional niche business line that further diversifies Nicolet’s existing loan portfolio and can be scaled and fully funded using Nicolet’s excess liquidity
Slide 16: County Bancorp Financial Highlights & Market Overview
County Bancorp Financial Highlights & Market Overview 16 County Financial Branch MapCounty Bancorp Market Overview • #1 Banking dairy lender in the state of Wisconsin with lending relationships in 55 of the state’s 72 counties • Strong local presence in home market of Manitowoc and lead local commun
Slide 17: The Upper Midwest's Premier Community Bank
The Upper Midwest’s Premier Community Bank 17 Nicolet County Mackinac 2nd Largest Bank headquartered in Wisconsin(2) #1 Bank Lender to the dairy industry in Wisconsin #1 Market Share in Michigan’s Upper Peninsula(3) #9 Ranked among S&P Global’s “Best Performing Community Banks of 2020”(4) + Addition
Slide 18: Investment Considerations
Investment Considerations 18 • Northern Wisconsin’s (and soon to be Michigan’s Upper Peninsula’s) predominant community banking franchise • Became the second largest Wisconsin-based bank in less than 20 years(1) • Since inception, proven ability to grow both organically and through M&A • Commerciall
Slide 19: Financial Highlights
Financial Highlights Nicolet 19 BANKSHARES, INC.
Slide 20: Demonstrated Track Record of Consistent Growth
$365 $387 $517 $539 $550 $884 2017 2018 2019 2020 Q1 2021 Q1'21 PF $2,471 $2,614 $2,954 $3,910 $3,901 $6,276 2017 2018 2019 2020 Q1 2021 Q1'21 PF $2,088 $2,166 $2,574 $2,789 $2,846 $4,915 2017 2018 2019 2020 Q1 2021 Q1'21 PF $2,932 $3,097 $3,577 $4,552 $4,544 $7,556 2017 2018 2019 2020 Q1 2021 Q1'21
Slide 21: Focus on Shareholder Results
Focus on Shareholder Results 21 Diluted Earnings per Share Book Value per Share *Source: Company reports; YTD period through March 31st 2021 $2.37 $3.33 $4.12 $5.52 $5.70 $1.75 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 2016 2017 2018 2019 2020 YTD 2021 $ 2 1 .9 8 $ 2 4 .0 1 $ 2 7 .6 2 $ 3 3 .0 8 $ 3
Slide 22: Industry-Leading Profitability
Industry-Leading Profitability 22 Core Return on Average Assets (%) Consensus ROAA Outlook (%) Consensus ROATCE Outlook (%) Core Return on Average TCE (%) Sources: S&P Global Market Intelligence, FactSet Research Systems, SEC and Company reports Note: Core Income excludes extraordinary items, non-re
Slide 23: Net Interest Margin and Cost of Funds
23 Net Interest Margin Cost of Funds / Deposits Yield on Loans & Interest Earning Assets • Nicolet has remained commercially focused since inception, typically leading to higher yielding loans than peers • Prior to the adoption of CECL in the 1Q’2020, the net interest margin had benefited from aggre
Slide 24: Growing and Diversified Fee Income Base
21% 18% 17% 14% 10% 15% 11% 14% 18% 18% 18% 15% 23% 17% 20% 16% 17% 26% 46% 23% 44% 13% 14% 13% 11% 7% 12% 7% 12% 14% 15% 14% 11% 15% 12% 20% 19% 21% 17% 11% 12% 10% $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 2016 2017 2018 2019 2020 YTD 2020 YTD 2021 ($ 0 0 0 ) Trust Brokerage Mortg
Slide 25: Key Drivers to Fee Income Growth
Key Drivers to Fee Income Growth 25 • Total AUM (trust/brokerage/retirement plan services) of approximately $3.6 billion as of March 31, 2021. • Established RIA (Nicolet Advisory Services) in 4Q 2016 to house brokerage business and further enhance gross revenue after purchasing brokerage books of bu
Slide 26: Stock Performance
(40.0%) 0.0% 40.0% 80.0% 120.0% 160.0% 200.0% Fe b -1 6 Ju n -1 6 O ct -1 6 Fe b -1 7 Ju n -1 7 O ct -1 7 Fe b -1 8 Ju n -1 8 O ct -1 8 Fe b -1 9 Ju n -1 9 O ct -1 9 Fe b -2 0 Ju n -2 0 O ct -2 0 Fe b -2 1 NCBS: 121% S&P: 119% SNL US Bank: 94% (200.0%) 0.0% 200.0% 400.0% 600.0% 800.0% 1000.0% N o v-
Slide 27: Recent Updates and 1st Quarter Highlights
Recent Updates and 1st Quarter 2020 Highlights 27 • Quarterly earnings of $18.2 million, EPS of $1.75, ROAA of 1.64%, and ROATCE of 20.0% • Originated $145 million of loans during the quarter for over 1,900 business customers through the latest round of the Paycheck Protection Program • Fourth strai
Slide 28: Securities, Loan & Deposit Portfolios
28 3 Securities, Loan & Deposit Portfolios
Slide 29: Liquidity Position and Securities Portfolio
29 *Source: SEC reports & Internal company reports as of March 31, 2021. Excludes pending acquisitions (1) Does not include brokered CDs Liquidity Position at the Bank Securities Portfolio Available Unused Liquidity ($millions) FHLB Advances $185.0 Fed Funds Lines $175.0 Total Available Unused Liqui
Slide 30: Diverse Loan Portfolio & Disciplined Pricing
Real Estate and Rental (1-4 family), $133.1 , 6% Real Estate and Rental (Commercial), $218.4 , 10% Real Estate and Rental (Other), $238.3 , 11% Manufacturing, $295.6 , 14% Construction, $164.4 , 8%Health Care and Social Assistance, $162.5 , 8% Retail Trade, $155.4 , 7% Accommodation and Food Service
Slide 31: A Leading Business Bank in its Markets
Const & Land 4.9% Ag 14.6% Consumer 1.0% Residential RE 16.8% Commercial RE - Owner Occ 16.4% Commercial RE - Investment 18.9% C&I 27.4% Const & Land 1.3% Ag 60.0% Residential RE 3.7% Commercial RE - Owner Occ 8.4% Commercial RE - Investment 14.8% C&I 11.7% Noninterest Bearing 12.7% MMA & Interest-b
Slide 32: Risk Management & Capital Position
32 4 Risk Management & Capital Position
Slide 33: Strong Asset Quality
0.75% 0.61% 0.61% 0.54% 1.15% 1.15% 2016 2017 2018 2019 2020 3/31/21 Nonperforming Assets / Assets Net Charge-Offs / Average Loans Reserves / Loans • Nicolet’s conservative credit culture maintained NPAs well below peers during the last financial crisis through recent periods. Periodic spikes have l
Slide 34: Asset Quality Exceeds Peers
0.08 0.05 0.02 0.05 0.01 0.13 0.11 0.09 0.08 0.02 2017 2018 2019 2020 Q1 2021 NCBS Peer Median 0.49 0.19 0.42 0.29 0.28 0.59 0.53 0.50 0.61 0.51 2017 2018 2019 2020 Q1 2021 NCBS Peer Median 0.61 0.61 0.54 1.15 1.15 1.03 0.96 0.89 1.41 1.48 2017 2018 2019 2020 Q1 2021 NCBS Peer Median 5.79 2.14 4.28
Slide 35: Current Capital Position
10.5 10.7 11.6 11.4 12.0 9.7 2017 2018 2019 2020 3/31/21 Q1'21 Pro Forma 12.8 12.9 13.4 12.9 13.4 12.3 13.5 2017 2018 2019 2020 3/31/21 Q1'21 Pro Forma +$75mm Sub. Debt 10.0 10.4 11.9 9.0 9.3 8.0 2017 2018 2019 2020 3/31/21 Q1'21 Pro Forma Tier 1 Common Capital, $378.4 Trust Preferred Securities, $2
Slide 36: Strong Pro Forma Capital Ratios
*Source: SEC reports & Internal company reports Note: Assumes a $75.0mm subordinated debt raise at the BHC level, with no spread or offering expenses. Incremental gross proceeds to be risk weighted at 20%; Ratios calculated based on current phase-in schedule for Basel III • The table below illustrat
Slide 37: Double Leverage and Historical Interest Coverage
*Source: SEC reports & Internal company reports (1) Annualized. (2) Pro forma subordinate debt only. NCBS intends to hold all proceeds at the holding company. If NCBS were to downstream the proceeds (less two years of interest coverage), double leverage would increase to 106%. (3) Excluded items rep
Slide 38: Appendix
Nicolet 38 BANKSHARES, INC.
Slide 39: MFNC Detailed Transaction Overview and Assumptions
MFNC Detailed Transaction Overview and Assumptions 39 (1) Deal value equals a NCBS price of $84.40 (4/9 closing price) multiplied by the exchange ratio plus $4.64 in cash consideration, and then by outstanding shares of approximately 10.7 million as of 3/31/21 (inclusive of Mackinac’s restricted sto
Slide 40: ICBK Detailed Transaction Overview and Assumptions
ICBK Detailed Transaction Overview and Assumptions 40 (1) Market data as of June 21, 2021. Based on approximately 6.1 million County common shares outstanding (inclusive of County’s unvested restricted stock units) as of June 17, 2021. Inclusive of approximately $3.7 million for the cash-out value o
Slide 41: Subordinated Debt Offering Investor Presentation
SUBORDINATED DEBT OFFERING INVESTOR PRESENTATION Working with Marketing on new style & color scheme throughout JUNE 2021
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