Nicolet earnings increased in the third quarter of 2026 as lower expenses and a wider net interest margin supported profitability. The bank reported net income of $64 million, or $2.96 per diluted share, on October 20, up from $57 million, or $2.62 per share, in the preceding quarter. It also completed the MidWestOne integration and core systems conversion.
Key Takeaways
- Core diluted earnings reached $3.15 per share, excluding non-core items that reduced reported earnings by $0.19 per share.
- Net interest margin widened to 4.19%, while core deposit growth offset a reduction in brokered deposits.
- Management expects a cleaner fourth quarter after completing integration work, but cautioned that non-core costs could continue.
Table of Contents
- Nicolet earnings improve as merger expenses decline
- Margin widens despite a smaller average earning-asset base
- Completed integration changes the fourth-quarter focus
- Conclusion
Nicolet earnings improve as merger expenses decline
Nicolet’s third-quarter earnings announcement showed profit also increased from $42 million, or $2.73 per diluted share, a year earlier. Core net income was $68 million, compared with $65 million in the second quarter.
Core diluted earnings per share, a non-GAAP measure, rose from $2.99 in the second quarter to $3.15. Non-core items, mostly merger-related expenses, reduced reported earnings by $0.19 per share, versus $0.37 in the preceding quarter. The core figures supplement rather than replace reported results.
Noninterest expense fell to $91 million from $104 million. The decline included lower personnel costs, reduced merger expenses and the absence of a second-quarter loss on the early redemption of junior subordinated debentures.
| Item | Details |
|---|---|
| Quarter-end loans | $10.88 billion at September 30, 2026, up $34 million from June 30. |
| Quarter-end assets | $15.1 billion, down $350 million, largely reflecting the Denver branch divestiture. |
| Nonperforming assets | $78 million, or 0.52% of assets, versus $75 million, or 0.49%, at June 30. |
| Loan-loss allowance | $135 million, or 1.24% of loans, versus $134 million, or 1.23%, at June 30. |
Margin widens despite a smaller average earning-asset base
Net interest income increased to $142 million, about $1 million above the second quarter, even as average interest-earning assets declined by $226 million. Net interest margin widened five basis points to 4.19%, with higher loan yields contributing to the improvement.
Noninterest income fell to $32 million from $36 million, largely because of unfavorable market valuations. Excluding net asset gains and losses and deferred compensation plan asset valuations, noninterest income increased by $1 million, primarily reflecting higher wealth management fees.
Core deposits grew by $223 million, partly offset by a $150 million reduction in brokered deposits. Total deposits consequently increased by $73 million to $12.6 billion.
Completed integration changes the fourth-quarter focus
Nicolet acquired MidWestOne on February 13, 2026, adding $6.1 billion in assets, $4.4 billion in loans and $5.3 billion in deposits at acquisition. That transaction materially changed the bank’s scale, limiting straightforward year-over-year comparisons.
During the third quarter, Nicolet completed the systems conversion and integration, closed its Denver branch sale on July 28 and moved both wealth management platforms onto a common operating system.
Chairman, President and CEO Mike Daniels said management expects a cleaner fourth quarter to provide a clearer view of earnings capacity heading into 2027. That remains an expectation, not a reported outcome; the company identified post-conversion retention risks and possible continued non-core items as uncertainties.
Nicolet also repurchased $40 million of common stock during the quarter. Its board declared a $0.36-per-share quarterly dividend on October 19, payable December 15 to shareholders of record on December 1, 2026.
Conclusion
Nicolet’s next results will show how earnings develop after the completed integration and lower merger costs. The company expects to release fourth-quarter and full-year 2026 results on January 19, 2027.
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