Financial Analysis

Acquisitions and Divestitures MidWest One Financial Group, Inc. (MidWest One ) Acquisition : On February 13, 2026, Nicolet completed its acquisition of MidWest One . MidWest One stockholders received 0.3175 shares of Nicolet common stock for each share of MidWest One common stock owned, resulting in the issuance of approximately 6.6 million shares of Nicolet common stock valued at $1.0 billion (based upon the closing stock price of Nicolets common stock on February 13, 2026, of $155.19 per share). With the MidWest One acquisition, Nicolet is one of the largest community banks in the Upper Midwest. A summary of the assets acquired and liabilities assumed in the MidWest One transaction, as of the acquisition date, including the purchase price allocation, was as follows. (In millions, except share data) Acquired from MidWest One Fair Value Adjustments Estimated Fair Value Assets Acquired: Cash and cash equivalents $ 166 $ $ 166 Investment securities 1,117 (2) 1,115 Loans 4,462 (75) 4,387 ACL-Loans (51) (13) (64) Premises and equipment 87 (11) 76 BOLI 100 100 Goodwill 70 (70) Other intangibles 20 103 123 Other assets 132 13 145 Total assets $ 6,103 $ (55) $ 6,048 Liabilities Assumed: Deposits $ 5,323 $ (2) $ 5,321 Borrowings 91 2 93 Other liabilities 74 (4) 70 Total liabilities $ 5,488 $ (4) $ 5,484 Net assets acquired $ 564 Purchase Price: Nicolet common stock issued (in shares) 6,641,428 Value of Nicolet common stock consideration $ 1,031 Goodwill $ 467 The Company purchased lo …

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Commitments and Contingencies The Company is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, financial guarantees, and standby letters of credit. Such commitments may involve, to varying degrees, elements of credit risk in excess of amounts recognized on the consolidated balance sheets. The Companys exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and issuing letters of credit as they do for on-balance sheet financial instruments. See Note 6 for information on the allowance for credit losses-unfunded commitments. A summary of the contract or notional amount of the Companys exposure to off-balance sheet risk was as follows. (in thousands) June 30, 2026 December 31, 2025 Commitments to extend credit $ 3,392,688 $ 2,071,841 Financial standby letters of credit 54,710 20,186 Performance standby letters of credit 21,486 18,822 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract, and predominantly included commercial lines of credit with a term of one year or less. The commitments generally have fixe …

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Short and Long-Term Borrowings Short-Term Borrowings: Short-term borrowings include any borrowing with an original maturity of one year or less. The Company did not have any short-term borrowings outstanding at either June 30, 2026 or December 31, 2025. Long-Term Borrowings: Long-term borrowings include any borrowing with an original maturity greater than one year. The components of long-term borrowings were as follows. (in thousands) June 30, 2026 December 31, 2025 Junior subordinated debentures 42,215 Subordinated notes 92,750 92,645 Total long-term borrowings $ 92,750 $ 134,860 Junior Subordinated Debentures : Each of the junior subordinated debentures was issued to an underlying statutory trust (the statutory trusts), which issued trust preferred securities and common securities and used the proceeds from the issuance of the common and the trust preferred securities to purchase the junior subordinated debentures of the Company. The trust preferred securities ceased to qualify as Tier 1 capital during first quarter 2026 due to Nicolet exceeding $15 billion in total consolidated assets. Accordingly, the Company fully redeemed these debentures, including those acquired with MidWest One , during second quarter 2026 and incurred a loss of $5 million upon extinguishment of this debt (included in other noninterest expense on the consolidated statements of income). At December 31, 2025, approximately $40 million of trust preferred securities qualified as Tier 1 capital. Subordina …

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Stock-Based Compensation The Company may grant stock options and restricted stock under its stock-based compensation plan to certain officers, employees, and directors. The plan is administered by a committee of the Board of Directors, and at June 30, 2026, approximately 0.3 million shares were available for grant under this plan. Stock options generally will expire ten years after the date of grant, have an exercise price equal to the Companys closing stock price on the date of grant, and will become exercisable based upon vesting terms provided for in the grant. Restricted stock grants include time-based restricted stock awards and performance-based restricted stock units, are generally issued at the Companys closing stock price on the date of grant, and the restrictions lapse based upon the vesting terms provided for in the grant and are contingent upon continued employment. The Companys stock option activity is summarized below. Stock Options Option Shares Outstanding Weighted Average Exercise Price Weighted Average Remaining Life (Years) Aggregate Intrinsic Value (in thousands) Outstanding - December 31, 2025 979,334 $ 71.35 Granted Exercise of stock options * (61,605) 57.32 Forfeited Outstanding - June 30, 2026 917,729 $ 72.29 4.4 $ 85,443 Exercisable - June 30, 2026 800,944 $ 71.46 4.0 $ 75,235 * The terms of the stock option agreements permit having a number of shares of stock withheld, the fair market value of which as of the date of exercise is sufficient to satisfy …

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Fair Value Measurements Fair value represents the estimated price at which an orderly transaction to sell an asset or transfer a liability would take place between market participants at the measurement date under current market conditions (i.e., an exit price concept), and is a market-based measurement versus an entity-specific measurement. The Company records and/or discloses certain financial instruments on a fair value basis. These financial assets and financial liabilities are measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the observability of the assumptions used to determine fair value. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs are inputs that reflect assumptions of the reporting entity about how market participants would price the asset or liability based on the best information available under the circumstances. The three fair value levels are: Level 1 quoted market prices in active markets for identical assets or liabilities that a company has the ability to access at the measurement date Level 2 inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly Level 3 significant unobservable inputs for the asset or liability, which are typically based on an entitys own assumptions, as there is little, if any …

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Goodwill and Other Intangibles and Servicing Rights Management periodically reviews the carrying value of its intangible assets to determine if any impairment has occurred, in which case an impairment charge would be recorded as an expense in the period of impairment, or whether changes in circumstances have occurred that would require a revision to the remaining useful life that would affect expense prospectively. In making such determination, management evaluates whether there are any adverse qualitative factors indicating that an impairment may exist, as well as the performance of the underlying operations or assets which give rise to the intangible. Management concluded no impairment was indicated for the six months ended June 30, 2026 and the year ended December 31, 2025. A summary of goodwill and other intangibles was as follows. (in thousands) June 30, 2026 December 31, 2025 Goodwill $ 834,495 $ 367,387 Core deposit intangibles 117,264 13,655 Customer list intangibles 9,928 1,358 Other intangibles 127,192 15,013 Goodwill and other intangibles, net $ 961,687 $ 382,400 Goodwill : Goodwill is not amortized but, instead, is subject to impairment tests on at least an annual basis or more frequently if certain events or circumstances occur. During 2026, goodwill increased due to the acquisition of MidWest One . See Note 2 for additional information on the acquisition. A summary of goodwill was as follows. Six Months Ended Year Ended (in thousands) June 30, 2026 December 31, …

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Recent Accounting Pronouncements Adopted In November 2025, the FASB issued ASU 2025-08, Financial Instruments - Credit Losses (Topic 326): Purchased Loans . This ASU expands the scope of the gross up method, formerly applicable only to PCD loans, to include non-PCD loans that meet certain criteria, now referred to as purchased seasoned loans (PSLs). Under this model, an allowance for expected credit losses is recognized at acquisition, offsetting the loans amortized cost basis, thereby eliminating the day one credit loss expense previously required for non-PCD loans. PSLs are defined as non-PCD loans acquired (1) through a business combination, or (2) purchased more than 90 days after origination when the acquirer was not involved in the origination. The updated guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company early adopted this standard for the acquisition completed in first quarter 2026, as discussed in Note 2. Future Accounting Pronouncements In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software . The amendments in this ASU make targeted improvements in the guidance for the different methods of software development. Specifically, this update removes all references to prescriptive and sequentia …

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