NICOLET BANKSHARES INC

Previous wording

Nicolet Bankshares, Inc. (the “Company” or “Nicolet”) is a bank holding company headquartered in Green Bay, Wisconsin. Nicolet provides a diversified range of traditional banking and wealth management services to individuals and businesses in its market area and through the branch offices of its banking subsidiary, Nicolet National Bank (the “Bank”), primarily in Wisconsin, Michigan, Iowa, and Minnesota. The following discussion is management’s analysis of Nicolet’s consolidated financial condition as of March 31, 2026 and December 31, 2025 and results of operations for the three-month periods ended March 31, 2026 and 2025. It should be read in conjunction with our audited consolidated financial statements and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Nicolet’s 2025 Annual Report on Form 10-K.

Current wording

Nicolet Bankshares, Inc. (the “Company” or “Nicolet”) is a bank holding company headquartered in Green Bay, Wisconsin. Nicolet provides a diversified range of traditional banking and wealth management services to individuals and businesses in its market area and through the branch offices of its banking subsidiary, Nicolet National Bank (the “Bank”), primarily in Wisconsin, Michigan, Iowa, and Minnesota. The following discussion is management’s analysis of Nicolet’s consolidated financial condition as of June 30, 2026 and December 31, 2025 and results of operations for the three and six-month periods ended June 30, 2026 and 2025. It should be read in conjunction with our audited consolidated financial statements and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Nicolet’s 2025 Annual Report on Form 10-K.

Previous wording

(2) See “Non-GAAP Financial Measures” below for a reconciliation of these financial measures.

Current wording

(2) The ratios of tangible book value per common share, return on average tangible common equity, core return on average assets, core return on average common equity, core return on average tangible common equity, and tangible common equity to tangible assets are non-GAAP financial measures that exclude goodwill and other intangibles, net. These financial ratios have been included as management considers them to be useful metrics with which to analyze and evaluate financial condition and capital strength. See “Non-GAAP Financial Measures” below for a reconciliation of these financial measures.

Previous wording

We identify “tangible book value per common share,” “return on average tangible common equity,” “tangible common equity to tangible assets” “core net income,” and “core diluted earnings per common share” as “non-GAAP financial measures.” In accordance with the SEC’s rules, we identify certain financial measures as non-GAAP financial measures if such financial measures exclude or include amounts in the most directly comparable measures calculated and presented in accordance with generally accepted accounting principles (“GAAP”) in effect in the United States in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures, ratios or statistical measures calculated using exclusively financial measures calculated in accordance with GAAP.

Current wording

We identify “core net income,” “core diluted earnings per common share,” “core return on average assets,” “core return on average common equity,” “return on average tangible common equity,” “core return on average tangible common equity,” “tangible book value per common share,” and “tangible common equity to tangible assets” as “non-GAAP financial measures.” In accordance with the SEC’s rules, we identify certain financial measures as non-GAAP financial measures if such financial measures exclude or include amounts in the most directly comparable measures calculated and presented in accordance with generally accepted accounting principles (“GAAP”) in effect in the United States in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures, ratios or statistical measures calculated using exclusively financial measures calculated in accordance with GAAP.

Previous wording

Management believes that the presentation of these non-GAAP financial measures (a) are important metrics used to analyze and evaluate our financial condition and capital strength and provide important supplemental information that contributes to a proper understanding of our operating performance and trends, (b) enables a more complete understanding of factors and trends affecting our business, and (c) allows investors to compare our financial performance to the financial performance of our peers and to evaluate our performance in a manner similar to management, the financial services industry, bank stock analysts, and bank regulators. Management uses non-GAAP measures as follows: in the preparation of our operating budgets, monthly financial performance reporting, and in our presentation to investors of our performance. However, we acknowledge that these non-GAAP financial measures have a number of limitations. Limitations associated with non-GAAP financial measures include the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might calculate these measures differently. These disclosures should not be considered an alternative to our GAAP results. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is presented in the following table.

Current wording

Management believes that the presentation of these non-GAAP financial measures (a) are important metrics used to analyze and evaluate our financial condition and capital strength and provide important supplemental information that contributes to a proper understanding of our operating performance and trends, (b) enables a more complete understanding of factors and trends affecting our business, and (c) allows investors to compare our financial performance to the financial performance of our peers and to evaluate our performance in a manner similar to management, the financial services industry, bank stock analysts, and bank regulators. Management uses non-GAAP measures as follows: in the preparation of our operating budgets, monthly financial performance reporting, and in our presentation to investors of our performance. However, we acknowledge that these non-GAAP financial measures have a number of limitations. Limitations associated with non-GAAP financial measures include the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might calculate these measures differently. These disclosures should not be considered an alternative to our GAAP results. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is presented in the table below.

Previous wording

Nicolet recognized net income of $15 million (or earnings per diluted common share of $0.81) for first quarter 2026, compared to net income of $40 million (or earnings per diluted common share of $2.65) for fourth quarter 2025, and net income of $33 million (or earnings per diluted common share of $2.08) for first quarter 2025.

Current wording

Net income was $72 million (or earnings per diluted common share of $3.56) for the six months ended June 30, 2026, compared to net income of $69 million (or earnings per diluted common share of $4.42) for the six months ended June 30, 2025. The majority of the year-over-year fluctuations noted below are attributable to the MidWest One acquisition.

Previous wording

$7.1 million increase in interest expense. For additional information regarding net interest income, see “INCOME STATEMENT ANALYSIS — Net Interest Income.”

Current wording

•Net interest income was $251 million for the first six months of 2026, up $105 million (72%) over the first six months of 2025, mostly due to the MidWest One acquisition. Interest income grew $129 million, while interest expense increased $24 million between the comparable six-month periods. Net interest margin was 4.07% for the six months ended June 30, 2026, compared to 3.65% for the six months ended June 30, 2025. For additional information regarding net interest income, see “Income Statement Analysis — Net Interest Income.”

Previous wording

•Noninterest income was $25 million for first quarter 2026, $7 million higher than first quarter 2025, with growth in most core noninterest income categories primarily due to the acquisition of MidWest One. The largest increases in noninterest income were wealth management fee income and net mortgage income, $4 million and $2 million higher than first quarter 2025, respectively. For additional information regarding noninterest income, see “INCOME STATEMENT ANALYSIS — Noninterest Income.”

Current wording

•Noninterest income was $62 million for the six months ended June 30, 2026, $23 million (58%) higher than the comparable period of 2025, with growth in most core noninterest income categories primarily due to the acquisition of MidWest One. For additional information regarding noninterest income, see “Income Statement Analysis — Noninterest Income.”

Previous wording

•At March 31, 2026, loans were $10.9 billion, an increase of $4.0 billion (59%) from December 31, 2025, primarily due to the MidWest One acquisition, which included $4.4 billion in loan balances. For additional information regarding loans, see “BALANCE SHEET ANALYSIS — Loans.”

Current wording

•At June 30, 2026, loans were $10.8 billion, an increase of $4.0 billion from December 31, 2025, primarily due to the MidWest One acquisition. For additional information regarding loans, see “Balance Sheet Analysis — Loans.”

Previous wording

•Total deposits were $12.6 billion at March 31, 2026, an increase of $4.9 billion (63%) from December 31, 2025, primarily due to the MidWest One acquisition, which included deposits of $5.3 billion. For additional information regarding deposits, see “BALANCE SHEET ANALYSIS – Deposits.”

Current wording

•Total deposits of $12.5 billion at June 30, 2026, increased $4.8 billion from December 31, 2025, primarily due to the MidWest One acquisition. For additional information regarding deposits, see “Balance Sheet Analysis – Deposits.”

Previous wording

(2)Nonaccrual loans and loans held for sale are included in the daily average loan balances outstanding.

Current wording

(1)Nonaccrual loans and loans held for sale are included in the daily average loan balances outstanding.

Previous wording

(1)The change in interest due to both rate and volume has been allocated in proportion to the relationship of dollar amounts of change in each.

Current wording

(1)The change in interest due to both rate and volume has been allocated in proportion to the relationship of dollar amount of change in each.

Previous wording

At the beginning of 2025, the Federal Funds range was 4.25% to 4.50%. During the second half of 2025, the Federal Reserve decreased short-term interest rates a total of 75 bps, resulting in a Federal Funds range of 3.50% to 3.75% at December 31, 2025. There were no changes to the range in first quarter 2026.

Current wording

At the beginning of 2025, the Federal Funds range was 4.25% to 4.50%. During the second half of 2025, the Federal Reserve decreased short-term interest rates a total of 75 bps, resulting in a Federal Funds range of 3.50% to 3.75% at December 31, 2025. There were no changes to the Federal Funds range during 2026.

Previous wording

Tax-equivalent net interest income was $111 million for the three months ended March 31, 2026, an increase of $39 million (54%) over the three months ended March 31, 2025. The $39 million increase in tax-equivalent net interest income was primarily attributable to increased volumes from the MidWest One acquisition, as well as favorable changes in yield and rate. Favorable volume changes and rate changes added $31 million and $8 million, respectively, to net interest income.

Current wording

Tax-equivalent net interest income was $254 million for the six months ended June 30, 2026, an increase of $106 million (72%) over the six months ended June 30, 2025. The $106 million increase in tax-equivalent net interest income was primarily attributable to increased volumes from the MidWest One acquisition, as well as favorable changes in yield and rate. Favorable volume changes and rate changes added $89 million and $18 million, respectively, to net interest income.

Previous wording

Average interest-earning assets increased $3.2 billion (39%) to $11.2 billion over the comparable 2025 period, primarily due to the MidWest One acquisition. Between the comparable first quarter periods, average loans increased $2.5 billion (37%), due to the MidWest One acquisition and organic loan growth. Average investment securities increased $594 million between the comparable three-month periods, while other interest-earning assets increased $78 million (mostly cash), both primarily due to the MidWest One acquisition. The mix of average interest-earning assets was 82% loans, 13% investments and 5% other interest-earning assets (mostly cash) for first quarter 2026, compared to 83%, 11%, and 6%, respectively, for first quarter 2025 .

Current wording

Average interest-earning assets increased $4.4 billion (55%) to $12.6 billion over the comparable 2025 period, primarily due to the MidWest One acquisition. Between the comparable six-month periods, average loans increased $3.5 billion (51%), mostly due to the MidWest One acquisition. Average investment securities increased $871 million between the comparable six-month periods, while other interest-earning assets increased $112 million (mostly cash), both primarily due to the MidWest One acquisition. The mix of average interest-earning assets was 82% loans, 14% investments and 4% other interest-earning assets (mostly cash) for first half 2026, compared to 84%, 11%, and 5%, respectively, for first half 2025.

Previous wording

Average interest-bearing liabilities were $8.4 billion for the first three months of 2026, an increase of $2.4 billion (40%) over the first three months of 2025, primarily due to the MidWest One acquisition. Average interest-bearing core deposits increased $2.5 billion, while average brokered deposits decreased $110 million between the comparable three-month periods. The mix of average interest-bearing liabilities was comprised of 92% core deposits, 6% brokered deposits and 2% wholesale funding for first quarter 2026, compared to 87%, 10%, and 3% respectively, for first quarter 2025.

Current wording

Average interest-bearing liabilities were $9.4 billion for the first six months of 2026, an increase of $3.4 billion (57%) over the first six months of 2025, primarily due to the MidWest One acquisition. Average interest-bearing core deposits increased $3.5 billion, while average brokered deposits decreased $112 million between the comparable six-month periods. The mix of average interest-bearing liabilities was comprised of 93% core deposits, 5% brokered deposits and 2% wholesale funding for first half 2026, compared to 87%, 10%, and 3% respectively, for first half 2025.

Previous wording

The interest rate spread increased 53 bps between the comparable three-month periods. The loan yield improved 10 bps to 6.18% between the comparable three-month periods, mostly from the repricing of new and renewed loans. The yield on investment securities increased 57 bps to 3.71%, while the yield on other interest-earning assets (mostly cash) decreased 89 bps to 3.69%, consistent with Federal Reserve interest rate cuts. The cost of interest-bearing liabilities decreased 47 bps to 2.36% for the first three months of 2026, mostly due to lower deposit costs. As a result, the tax-equivalent net interest margin was 3.98% for the first three months of 2026, a 40 bps increase over 3.58% for the first three months of 2025.

Current wording

The interest rate spread increased 58 bps between the comparable six-month periods. The loan yield improved 8 bps to 6.23% between the comparable six-month periods, and included the impact of loan purchase accounting accretion as well as the repricing of new and renewed loans. The yield on investment securities increased 77 bps to 3.98%, also impacted by purchase accounting accretion as well as the discount accretion on the early call of a municipal bond, while the yield on other interest-earning assets (mostly cash) decreased 83 bps to 3.74%, consistent with Federal Reserve interest rate cuts. The cost of interest-bearing liabilities decreased 52 bps to 2.32% for the first six months of 2026, mostly due to lower deposit costs. As a result, the tax-equivalent net interest margin was 4.07% for the first six months of 2026, a 42 bps increase over 3.65% for the first six months of 2025.

Previous wording

The provision for credit losses was $6.1 million for the three months ended March 31, 2026, compared to $1.5 million for the three months ended March 31, 2025. The increase was primarily driven by provision expense of $4.7 million for the ACL on unfunded commitments related to the MidWest One merger.

Current wording

The provision for credit losses was $7.6 million for the six months ended June 30, 2026, compared to $2.6 million for the six months ended June 30, 2025. The increase was primarily driven by provision expense of $4.7 million for the ACL on unfunded commitments related to the MidWest Oneacquisition.

Previous wording

Noninterest income was $25 million for the three months ended March 31, 2026, $7 million (39%) higher than the comparable period of 2025, with growth in most core noninterest income categories primarily due to the acquisition of MidWest One. Noninterest income excluding net asset gains (losses) for the first three months of 2026 was $26 million, an $8 million (41%) increase over the first three months of 2025.

Current wording

Noninterest income was $62 million for the six months ended June 30, 2026, $23 million (58%) higher than the comparable period of 2025, with growth in most core noninterest income categories primarily due to the acquisition of MidWest One. Noninterest income excluding net asset gains (losses) for the first half of 2026 was $60 million, a $21 million (52%) increase over the first half of 2025.

Previous wording

Wealth management fee income was $11 million, up $4 million (53%) from the first three months of 2025, including favorable market-related changes, as well as growth in accounts and assets under management.

Current wording

Wealth management fee income was $22 million, up $9 million (62%) from the first six months of 2025, including growth in accounts and assets under management primarily from the MidWest One acquisition, as well as favorable market-related changes.

Previous wording

Mortgage income includes net gains received from the sale of residential real estate loans into the secondary market, capitalized mortgage servicing rights (“MSR”), servicing fees net of MSR amortization, fair value marks on the mortgage interest rate lock commitments and forward commitments (“mortgage derivatives”), and MSR valuation changes, if any. Net mortgage income of $4 million increased $2 million (84%) between the comparable three-month periods, mostly due to higher secondary market volumes and the related gains on sales. See also Note 7, “Goodwill and Other Intangibles and Servicing Rights” of the Notes to Unaudited Consolidated Financial Statements under Part I, Item 1, for additional disclosures on the MSR asset.

Current wording

Mortgage income includes net gains received from the sale of residential real estate loans into the secondary market, capitalized mortgage servicing rights (“MSR”), servicing fees net of MSR amortization, fair value marks on the mortgage interest rate lock commitments and forward commitments (“mortgage derivatives”), and MSR valuation changes, if any. Net mortgage income of $7 million increased $2 million (48%) between the comparable six-month periods, mostly due to higher secondary market volumes and the related gains on sales. See also Note 7, “Goodwill and Other Intangibles and Servicing Rights” of the Notes to Unaudited Consolidated Financial Statements under Part I, Item 1, for additional disclosures on the MSR asset.

Previous wording

Services charges on deposit accounts were $3 million, up $1 million (56%) from the first three months of 2025, on growth in both accounts and account analysis fees, partially driven by the MidWest One acquisition.

Current wording

Services charges on deposit accounts were $7 million, up $3 million (83%) from the first six months of 2025, on growth in both accounts and account analysis fees, mostly driven by the MidWest One acquisition.

Previous wording

Other income of $2 million for the three months ended March 31, 2026 increased $0.5 million (27%) from the comparable 2025 period, primarily due to the acquisition of MidWest One.

Current wording

Other income of $5 million for the six months ended June 30, 2026 increased $2 million (55%) from the comparable 2025 period, primarily due to the acquisition of MidWest One.

Previous wording

Net asset losses of $0.9 million for the first three months of 2026 were primarily due to the write-down of an other investment, while net asset losses of $0.4 million for the first three months of 2025 were mostly due to unfavorable fair value marks on equity securities.

Current wording

Net asset gains of $1.5 million for the first six months of 2026 were primarily due to favorable fair value marks on an equity security partly offset by the write-down of an other investment, while net asset losses of $0.6 million for the first six months of 2025 were mostly due to unfavorable fair value marks on equity securities.

Previous wording

Noninterest expense was $110 million for the three months ended March 31, 2026, an increase of $62 million (130%) over the comparable period of 2025. Personnel costs increased $12 million (44%), while non-personnel expenses combined increased $50 million (237%), primarily driven by merger-related expenses.

Current wording

Noninterest expense was $214 million for the six months ended June 30, 2026, an increase of $116 million (119%) over the comparable period of 2025. Personnel costs increased $33 million (60%), while non-personnel expenses combined increased $83 million (197%), primarily due to the acquisition of MidWest One.

Previous wording

Personnel expense was $38 million for the three months ended March 31, 2026, an increase of $12 million (44%) from the comparable period in 2025, reflecting a larger employee base due to the acquisition of MidWest One, as well as merit increases between the years.

Current wording

Personnel expense was $89 million for the six months ended June 30, 2026, an increase of $33 million (60%) from the comparable period in 2025, reflecting a larger employee base due to the acquisition of MidWest One, as well as merit increases between the years.

Previous wording

Occupancy, equipment and office expense was $12 million for the three months ended March 31, 2026, up $3 million (33%) from the comparable period in 2025, mostly due to an expanded footprint resulting from the acquisition of MidWest One.

Current wording

Occupancy, equipment and office expense was $29 million for the six months ended June 30, 2026, up $10 million (56%) from the comparable period in 2025, mostly due to an expanded footprint resulting from the acquisition of MidWest One.

Previous wording

Data processing expense was $6 million, up $2 million (37%) between the comparable three-month periods, mostly due to the MidWest One acquisition.

Current wording

Data processing expense was $14 million, up $5 million (51%) between the comparable six-month periods, mostly due to the MidWest One acquisition.

Previous wording

Intangibles amortization increased $3 million between the comparable three-month periods due to increased amortization on newly established intangibles from the MidWest One acquisition.

Current wording

Intangibles amortization increased $7 million between the comparable six-month periods due to increased amortization on newly established intangibles from the MidWest One acquisition.

Previous wording

Other expense was $5 million, up $2 million (66%) between the comparable three-month periods, primarily due to increased legal and professional expense, as well as higher deposit earnings credit expense.

Current wording

Other expense was $15 million, up $9 million (164%) between the comparable six-month periods, including a $5 million loss on the early redemption of junior subordinated debentures, as well as higher legal and professional expense and higher deposit earnings credit expense.

Previous wording

Income tax expense was $4 million (effective tax rate of 20.1%) for the first three months of 2026, compared to income tax expense of $8 million (effective tax rate of 18.8%) for the comparable period of 2025.

Current wording

Income tax expense was $19 million (effective tax rate of 21.2%) for the first six months of 2026, compared to income tax expense of $16 million (effective tax rate of 19.2%) for the comparable period of 2025.

Previous wording

•Noninterest expense was $110 million for first quarter 2026, an increase of $62 million over first quarter 2025. Personnel costs increased $12 million (44%), while non-personnel expenses combined increased $50 million, primarily driven by merger-related expenses and higher overall expense for a larger operating base. For additional information regarding noninterest expense, see “INCOME STATEMENT ANALYSIS — Noninterest Expense.”

Current wording

Noninterest expense was $104 million for second quarter 2026, an increase of $54 million (108%) from second quarter 2025. Personnel expense increased $21 million, reflecting the larger employee base post-acquisition. Non-personnel expenses increased $32 million, including merger-related expenses of $7 million and a $5 million loss on the early redemption of junior subordinated debentures, as well as higher overall expense for the larger operating base post-acquisition. For additional information regarding noninterest expense, see “INCOME STATEMENT ANALYSIS — Noninterest Expense.”

Previous wording

At March 31, 2026, period end assets were $15.6 billion, an increase of $6.4 billion (70%) from December 31, 2025, primarily due to the MidWest One acquisition. Total loans increased $4.0 billion (59%) from December 31, 2025, across various loan categories primarily due to the MidWest One acquisition. Total deposits were $12.6 billion at March 31, 2026, an increase of $4.9 billion (63%) from December 31, 2025, primarily due to the MidWest One acquisition, which included growth in customer (core) deposits and brokered deposits of $4.7 billion and $178 million, respectively. Total stockholders’ equity was $2.3 billion at March 31, 2026, an increase of $1.0 billion over December 31, 2025, primarily due to the issuance of common stock in the MidWest One acquisition.

Current wording

At June 30, 2026, period end assets were $15.4 billion, an increase of $6.2 billion (68%) from December 31, 2025, primarily due to the MidWest One acquisition. Total loans increased $4.0 billion (59%) from December 31, 2025, across various loan categories primarily due to the MidWest One acquisition. Total deposits were $12.5 billion at June 30, 2026, an increase of $4.8 billion (62%) from December 31, 2025, including a $4.7 billion increase in customer (core) deposits and a $78 million increase in brokered deposits, primarily due to the MidWest One acquisition. Long-term borrowings decreased $42 million from December 31, 2025 due to the early redemption of junior subordinated debentures. Total stockholders’ equity was $2.3 billion at June 30, 2026, an increase of $1.0 billion over December 31, 2025, primarily due to the issuance of common stock in the MidWest One acquisition.

Previous wording

Total loans of $10.9 billion at March 31, 2026, increased $4.0 billion (59%) from December 31, 2025, across various loan categories. At March 31, 2026, commercial and industrial loans and CRE investment loans represented the largest segments of Nicolet’s loan portfolio, with each at 22% of the total portfolio. The next largest segments were agricultural and residential first mortgage, representing 16% and 15% of the total loan portfolio, respectively. The loan portfolio is widely diversified and included the following industries: manufacturing, wholesaling, paper, packaging, food production and processing, agriculture, forest products, hospitality, retail, service, and businesses supporting the general building industry.

Current wording

Total loans of $10.8 billion at June 30, 2026, increased $4.0 billion (59%) from December 31, 2025, across various loan categories. At June 30, 2026, commercial and industrial loans and CRE investment loans represented the largest segments of Nicolet’s loan portfolio, with each at 22% of the total portfolio. The next largest segments were agricultural and residential first mortgage, representing 16% and 15% of the total loan portfolio, respectively. The loan portfolio is widely diversified and included the following industries: manufacturing, wholesaling, paper, packaging, food production and processing, agriculture, forest products, hospitality, retail, service, and businesses supporting the general building industry.

Previous wording

At March 31, 2026, the ACL-Loans was $133 million and represented 1.23% of period end loans, compared to $69 million (or 1.01% of period end loans) at December 31, 2025 and $67 million (or 1.00% of period end loans) at March 31, 2025. The increase in the ACL-Loans was primarily due to the acquisition of MidWest One. The components of the ACL-Loans are detailed further in Table 8 below.

Current wording

At June 30, 2026, the ACL-Loans was $134 million and represented 1.23% of period end loans, compared to $69 million (or 1.01% of period end loans) at December 31, 2025 and $68 million (or 1.00% of period end loans) at June 30, 2025. The increase in the ACL-Loans was primarily due to the acquisition of MidWest One. The components of the ACL-Loans are detailed further in Table 8 below.

Previous wording

Nonperforming loans are considered one indicator of potential future loan losses. Nonperforming loans are defined as nonaccrual loans and loans 90 days or more past due but still accruing interest. Loans are generally placed on nonaccrual status when contractually past due 90 days or more as to interest or principal payments. Additionally, whenever management becomes aware of facts or circumstances that may adversely impact the collectability of principal or interest on loans, it is management’s practice to place such loans on nonaccrual status immediately. Nonperforming assets include nonperforming loans and other real estate owned (“OREO”). At March 31, 2026, nonperforming assets were $79 million and represented 0.51% of total assets, compared to 0.35% of total assets at December 31, 2025, and 0.33% of total assets at March 31, 2025, with the increase primarily due to the acquisition of MidWest One.

Current wording

Nonperforming loans are considered one indicator of potential future loan losses. Nonperforming loans are defined as nonaccrual loans and loans 90 days or more past due but still accruing interest. Loans are generally placed on nonaccrual status when contractually past due 90 days or more as to interest or principal payments. Additionally, whenever management becomes aware of facts or circumstances that may adversely impact the collectability of principal or interest on loans, it is management’s practice to place such loans on nonaccrual status immediately. Nonperforming assets include nonperforming loans and other real estate owned (“OREO”). At June 30, 2026, nonperforming assets were $75 million and represented 0.49% of total assets, compared to 0.35% of total assets at December 31, 2025, and 0.32% of total assets at June 30, 2025, with the increase primarily due to the acquisition of MidWest One.

Previous wording

Substandard by management but that are in performing status; however, there are circumstances present which might adversely affect the ability of the borrower to comply with present repayment terms. The decision of management to include performing loans in potential problem loans does not necessarily mean that Nicolet expects losses to occur, but that management recognizes a higher degree of risk associated with these loans. The loans that have been reported as potential problem loans are predominantly commercial-based loans covering a diverse range of businesses and real estate property types. Potential problem loans were $184 million (2% of loans) and $71 million (1% of loans) at March 31, 2026 and December 31, 2025, respectively, with the increase primarily due to the acquisition of MidWest One. Potential problem loans require heightened management review given the pace at which a credit may deteriorate, the potential duration of asset quality stress, and uncertainty around the magnitude and scope of economic stress that may be felt by Nicolet’s customers and on the underlying real estate or collateral values.

Current wording

The level of potential problem loans is another consideration in evaluating the relative level of risk in the loan portfolio and the appropriate level of the ACL-Loans. Potential problem loans are generally defined by management to include loans rated as Substandard by management but that are in performing status; however, there are circumstances present which might adversely affect the ability of the borrower to comply with present repayment terms. The decision of management to include performing loans in potential problem loans does not necessarily mean that Nicolet expects losses to occur, but that management recognizes a higher degree of risk associated with these loans. The loans that have been reported as potential problem loans are predominantly commercial-based loans covering a diverse range of businesses and real estate property types. Potential problem loans were $190 million (2% of loans) and $71 million (1% of loans) at June 30, 2026 and December 31, 2025, respectively, with the increase primarily due to the acquisition of MidWest One. Potential problem loans require heightened management review given the pace at which a credit may deteriorate, the potential duration of asset quality stress, and uncertainty around the magnitude and scope of economic stress that may be felt by Nicolet’s customers and on the underlying real estate or collateral values.

Previous wording

Total deposits of $12.6 billion at March 31, 2026, increased $4.9 billion (63%) from December 31, 2025, due to the MidWest One acquisition. Core deposit balances of $12.0 billion at March 31, 2026, increased $4.7 billion from December 31, 2025, while brokered deposits increased $178 million. The deposit composition is presented in Table 10 below.

Current wording

Total deposits of $12.5 billion at June 30, 2026, increased $4.8 billion (62%) from December 31, 2025, due to the MidWest One acquisition. Core deposit balances of $12.0 billion at June 30, 2026, increased $4.7 billion from December 31, 2025, while brokered deposits increased $78 million. The deposit composition is presented in Table 10 below.

Previous wording

Total estimated uninsured deposits were $4.4 billion (representing 35% of total deposits) at March 31, 2026, compared to $2.5 billion (representing 32% of total deposits) at December 31, 2025.

Current wording

Total estimated uninsured deposits were $4.3 billion (representing 34% of total deposits) at June 30, 2026, compared to $2.5 billion (representing 32% of total deposits) at December 31, 2025.

Previous wording

Liquidity management refers to the ability to ensure that adequate liquid funds are available to meet the current and future cash flow obligations arising in the daily operations of the Company. These cash flow obligations include the ability to meet the commitments to borrowers for extensions of credit, accommodate deposit cycles and trends, fund capital expenditures, pay dividends to stockholders (if any), and satisfy other operating expenses. The Company’s most liquid assets are cash and due from banks and interest-earning deposits, which totaled $615 million and $660 million at March 31, 2026 and December 31, 2025, respectively. Balances of these liquid assets are dependent on our operating, investing, and financing activities during any given period.

Current wording

Liquidity management refers to the ability to ensure that adequate liquid funds are available to meet the current and future cash flow obligations arising in the daily operations of the Company. These cash flow obligations include the ability to meet the commitments to borrowers for extensions of credit, accommodate deposit cycles and trends, fund capital expenditures, pay dividends to stockholders (if any), and satisfy other operating expenses. The Company’s most liquid assets are cash and due from banks and interest-earning deposits, which totaled $465 million and $660 million at June 30, 2026 and December 31, 2025, respectively. Balances of these liquid assets are dependent on our operating, investing, and financing activities during any given period.

Previous wording

The $45 million decrease in cash and cash equivalents since year-end 2025 included $16 million net cash provided by operating activities (mostly earnings), $66 million net cash provided by investing activities (with net cash acquired from MidWest One used to fund loan growth), and $127 million net cash used in financing activities (mostly deposit declines, repayments of borrowings, and common stock repurchases). As of March 31, 2026, management believed that adequate liquidity existed to meet all projected cash flow obligations.

Current wording

The $195 million decrease in cash and cash equivalents since year-end 2025 included $110 million net cash provided by operating activities (mostly earnings), $63 million net cash provided by investing activities (with net cash acquired from MidWest One and proceeds from investment sales, calls and maturities used to fund loan growth and new investment purchases), and $368 million net cash used in financing activities (mostly deposit declines, repayments of borrowings, and common stock repurchases). As of June 30, 2026, management believed that adequate liquidity existed to meet all projected cash flow obligations.