Nicolet Bankshares, Inc. (NIC): Business Model Canvas [Dec-2025 Updated]

You're looking to map out exactly how Nicolet Bankshares, Inc. makes its money, especially now that they've announced that massive $\sim$\$864 million all-stock merger with MidWestOne Financial Group, Inc. Honestly, this isn't just another regional bank; their model hinges on that community-first approach-local decision-making paired with solid financial footing, like maintaining a net interest margin of 3.86% as of Q3 2025 while sitting on assets near \$9.0 billion. To see the nuts and bolts of how they fund their growth, manage risk (like that low 0.31% nonperforming asset ratio), and structure their revenue from both loans and fees, you need to dig into the full canvas below.

Nicolet Bankshares, Inc. (NIC) - Canvas Business Model: Key Partnerships

You're looking at the structure Nicolet Bankshares, Inc. uses to build its franchise, and right now, the biggest partnership is the acquisition of MidWestOne Financial Group, Inc. This all-stock merger, announced October 23, 2025, is set to create a premier community banking franchise in the Upper Midwest. The deal is expected to close in the first half of 2026, but the pro forma numbers give you a clear picture of the scale this partnership brings.

The terms involve MidWestOne shareholders receiving 0.3175 of a share of Nicolet common stock for each share they own. Based on Nicolet's closing stock price of $130.31 on October 22, 2025, the aggregate value of this exchange was approximately $864 million. Following the system conversion, slated for the third quarter of 2026, MidWestOne shareholders are anticipated to hold about 30% of the combined entity. This transaction is projected to be approximately 37% accretive to 2026 earnings, not counting the charges related to the merger itself.

The execution of this deal required a network of specialized external partners. These firms helped Nicolet Bankshares, Inc. with the due diligence and final closing mechanics of the acquisition.

• Keefe, Bruyette & Woods, A Stifel Company, served as financial advisor and provided a fairness opinion to Nicolet Bankshares, Inc.'s Board of Directors.
• Nelson Mullins Riley & Scarborough LLP served as legal counsel to Nicolet Bankshares, Inc.
• Piper Sandler & Co. served as financial advisor and provided a fairness opinion to MidWestOne Financial Group, Inc.'s Board of Directors.
• Alston & Bird LLP served as legal counsel to MidWestOne Financial Group, Inc.

Nicolet Bankshares, Inc. also relies on key vendors to run its day-to-day operations and support its community-focused model. The bank has incorporated specific technological solutions to maintain operational responsiveness and support its growth trajectory.

• Technological solutions are used in transactional processing.
• Technological solutions are used in risk management frameworks.
• Technological solutions are used in data analytics capabilities.

The emphasis on community banking means Nicolet Bankshares, Inc. actively partners with local organizations. The CEO noted the intent to be great stewards of the legacy of the communities MidWestOne has served for decades. The bank maintains an emphasis on serving regional communities, integrating community-oriented practices into its operational strategies. For instance, in the first quarter of 2025, the bank repurchased 233,207 common shares for $26 million, affirming that the best acquisition it can make is in its own company while continuing to grow core relationships in its markets.

Nicolet Bankshares, Inc. (NIC) - Canvas Business Model: Key Activities

You're looking at the core engine of Nicolet Bankshares, Inc. (NIC) as of late 2025, focusing on what the bank actually does to generate revenue and manage its balance sheet. It's all about disciplined execution in lending and funding.

Commercial and consumer loan origination and servicing.

Nicolet Bankshares, Inc. focuses on growing its loan book across key commercial and consumer segments. Total loans increased by $36 million from June 30, 2025, to September 30, 2025, with growth concentrated in specific areas. The bank emphasizes its commercial-based lending, which drove a $94 million increase in total loans in the second quarter of 2025 over the prior quarter. The core activity involves originating and servicing these assets while maintaining strong asset quality, with nonperforming assets representing only 0.31% of total assets at September 30, 2025.

Here's a look at the loan portfolio composition at the end of the third quarter of 2025:

Core deposit gathering and liability management.

A critical activity is securing stable, low-cost funding. Nicolet Bankshares, Inc. saw exceptional quarter-over-quarter core deposit growth of $223 million in the third quarter of 2025, which translates to an annualized growth rate of 13%. This focus on core relationships improved the funding mix, as it partly offset a $153 million decrease in brokered deposits during the same period. Total deposits stood at $7.6 billion at September 30, 2025. Managing the cost of these liabilities is key; the cost of interest-bearing liabilities decreased by 10 basis points sequentially in Q3 2025.

Strategic M&A integration and synergy realization.

While the focus remains on organic growth and taking care of current customers, strategic Mergers and Acquisitions (M&A) remains a stated activity. The leadership team has indicated that they hope to return to the M&A market in 2025, given their proven ability to create shareholder value through past acquisitions. The bank's philosophy is that any deal must make Nicolet Bankshares, Inc. a better bank and enhance long-term shareholder value. The company has also actively managed capital through share repurchases, spending $21 million to repurchase 155,393 common shares in the third quarter of 2025.

Wealth management and trust services delivery.

Delivering specialized services through Nicolet Wealth Management is a growing revenue stream. This activity contributed to noninterest income strength, with wealth management specifically seeing an increase of $0.818 million quarter-over-quarter in Q3 2025. The bank provides services ranging from wealth management to retirement plan services, supporting its full-service community bank model.

Maintaining a net interest margin of 3.86% (Q3 2025).

The primary financial performance metric tied to core activities is the Net Interest Margin (NIM). Nicolet Bankshares, Inc. achieved a NIM of 3.86% for the third quarter of 2025. This represented an increase of 14 basis points over the second quarter of 2025. This expansion was driven by the yield on interest-earning assets increasing by 3 basis points (to 5.85%), while the cost of interest-bearing liabilities decreased by 10 basis points (to 2.76%).

The bank's net interest income for the quarter was $79 million.

Finance: draft 13-week cash view by Friday.

Nicolet Bankshares, Inc. (NIC) - Canvas Business Model: Key Resources

The foundation of Nicolet Bankshares, Inc.'s business model rests on tangible and human capital that supports its community banking focus across the Upper Midwest.

The firm's balance sheet strength provides a significant resource base. As of the third quarter of 2025, Nicolet Bankshares, Inc. reported total assets of approximately $9.0 billion. This scale is underpinned by a strong capital position, with total capital reported at $1.2 billion as of September 30, 2025.

A critical resource is the funding base, which is heavily weighted toward stable customer relationships. The total deposit base stood at $7.6 billion at the end of the third quarter of 2025. This funding supports lending activities, which saw loan growth, particularly in construction and agricultural sectors.

Human capital is emphasized as a differentiator for Nicolet Bankshares, Inc., reflecting its community-centric approach. The team consists of a dedicated workforce and experienced local leadership.

• Team size is reported at 957 employees.
• The branch network provides physical presence across the region, totaling 57 branches.
• Geographic reach covers Northeast and Central Wisconsin, the Upper Peninsula and Northern Michigan, Eastern Minnesota, and includes a branch in Naples, Florida.

Here's a quick snapshot of key financial metrics from the latest reported quarter, Q3 2025, which illustrate the scale of these resources:

The operational capability is further supported by the management philosophy, which the CEO noted is a 25-year case study in creating shared success between customers, communities, and employees. The firm's ability to generate strong profitability metrics, such as a Return on Average Assets and Return on Average Tangible Common Equity, places it in the top decile of banks in the country.

The physical footprint and personnel are deployed to support core services:

• Commercial and consumer banking services.
• Wealth management and retirement plan services.

Nicolet Bankshares, Inc. (NIC) - Canvas Business Model: Value Propositions

You're looking at a bank built on local presence, which means decisions don't get stuck in a distant corporate office. Chairman, President, and CEO Mike Daniels has committed to leading through the end of 2030, signaling long-term stability rooted in that community focus.

Nicolet Bankshares, Inc. offers a complete set of services, not just basic checking accounts. This means they cover the full spectrum of financial needs for their clients.

• Commercial banking services.
• Consumer banking products.
• Comprehensive wealth management offerings.

The relationship-focused service is supported by tangible growth in key areas. For instance, in the third quarter of 2025, wealth income showed a sequential increase of $0.818 million. Also, net mortgage income grew by $0.661 million over the prior quarter. This shows they are actively growing the relationship-based revenue lines.

Asset quality remains a core value proposition, showing the bank manages risk well. As of September 30, 2025, nonperforming assets stood at 0.31% of total assets. This stability is part of a larger picture of strong recent performance.

Here's a quick look at some key financial metrics from the Q3 2025 report that back up the bank's operational strength:

The improvement in funding mix is also a key value point; core deposits grew by $223 million sequentially, which is a 13% annualized increase. This shift away from brokered deposits toward customer relationships strengthens the balance sheet.

Finance: draft a comparison of core deposit growth versus brokered deposit change for Q3 2025 by Monday.

Nicolet Bankshares, Inc. (NIC) - Canvas Business Model: Customer Relationships

Nicolet Bankshares, Inc. emphasizes a philosophy centered on relationships with customers and communities, which the company views as a core differentiator, even against industry trends. This focus is reflected in its financial performance metrics as of late 2025.

The relationship focus manifests through several key channels:

• Dedicated, high-touch relationship management for commercial clients, evidenced by solid loan growth, including an increase of $36 million in total loans (mostly construction and agricultural) from June 30, 2025, to September 30, 2025.
• Long-term, trust-based relationships with individuals and families, which supports a strong, sticky deposit base. Total deposits reached $7.6 billion at September 30, 2025.
• Community involvement to foster local loyalty, with marketing expenses in Q4 2024 specifically noting 'donations to support capital campaigns within our communities.'
• Self-service options via digital banking platforms, alongside a branch network operating primarily in Wisconsin, Michigan, and Minnesota.

The success of these relationship-driven strategies can be quantified by looking at deposit stability and profitability metrics from the third quarter of 2025:

The growth in core deposits, which increased by $223 million (or 13% annualized) from the prior quarter to reach a total of $7.6 billion in total deposits as of September 30, 2025, is a direct indicator of deepening customer trust and relationships. Furthermore, the company achieved a quarterly net income of $42 million in the third quarter of 2025, demonstrating that this relationship-first approach supports superior shareholder results.

Regarding digital self-service, while Nicolet Bankshares offers electronic banking services, the broader U.S. banking context shows that a significant majority of consumers, approximately 77%, prefer to manage their accounts via a mobile app or computer. For millennials, this preference rises to 80% in 2025.

The company's commitment to its community focus is also seen in its operational expenses; for instance, non-personnel expenses in Q4 2024 included higher marketing costs specifically 'due to donations to support capital campaigns within our communities.'

Here's a quick look at the profitability supporting the business model:

• Return on Average Assets (ROAA) in Q2 2025 was 1.62%.
• Earnings Per Diluted Common Share (EPS) in Q3 2025 was $2.73.

Finance: draft 13-week cash view by Friday.

Nicolet Bankshares, Inc. (NIC) - Canvas Business Model: Channels

You're looking at how Nicolet Bankshares, Inc. gets its value proposition to its customers as of late 2025. The bank is clearly balancing its traditional footprint with digital capabilities, especially following the October 2025 agreement to acquire MidWestOne Financial Group in an $864 million all-stock deal.

The physical presence remains a core channel, though the stated pro forma target of over 110 locations is not explicitly confirmed with a final post-merger count in the latest reports. What we do have is the operational footprint as of the third quarter of 2025, which supports their community banking focus.

The physical network is anchored by a specific number of locations serving key regions:

• - Physical branch network: 57 branches reported across Northeast and Central Wisconsin, the Upper Peninsula and Northern Michigan, Eastern Minnesota, and a single branch in Naples, Florida, as of late 2025.
• - Commercial lending centers for business clients: These centers support the commercial banking segment, where the process starts with a conversation about business goals.
• - Loan production offices (LPOs) in strategic growth markets: The Naples, Florida branch is explicitly mentioned as part of the operating footprint, serving as a key location in a growth market.

The digital channel is critical for modern convenience, supporting the bank's stated intent to find the right balance between traditional and non-branch channels. The success in deposit gathering suggests active digital engagement:

• - Digital banking platform (mobile and online): This channel supports electronic banking services, including treasury management and payment processing.
• - Core deposit growth: Nicolet Bankshares reported exceptional quarter-over-quarter core deposit growth of $223 million, representing a 13% annualized rate for the third quarter of 2025.

To give you a snapshot of the scale across these channels as of September 30, 2025, here's a look at some related metrics:

The commercial lending centers and LPOs are designed to facilitate business banking relationships, which is a key focus area, alongside consumer and wealth management services. The emphasis on local decision-making suggests that while digital is present, the physical and relationship-focused centers are where complex business solutions start.

Nicolet Bankshares, Inc. (NIC) - Canvas Business Model: Customer Segments

You're looking at the customer base for Nicolet Bankshares, Inc. as of late 2025, right after they announced the definitive merger agreement with MidWestOne Financial Group, Inc. in October 2025.

The core customer base is geographically concentrated, operating branches primarily across Wisconsin, Michigan, and Minnesota. As of September 30, 2025, Nicolet Bankshares, Inc. reported total assets of $9.0 billion, with a pro forma total asset projection of $15.3 billion following the announced merger.

The business focuses heavily on commercial relationships, which you can see reflected in the loan growth trends:

• Small to mid-sized businesses drive significant loan activity.
• Commercial & Industrial loans were the primary driver of loan growth in the first quarter of 2025.
• Loan growth in the third quarter of 2025 was noted as being mostly in construction and agricultural loans.

For the high-net-worth segment, wealth management is a key revenue driver. For the first half of 2025, wealth management fee income reached $13.8 million, marking a 5% increase over the first six months of 2024.

Retail consumers and households are served through deposit gathering, which is a critical component of their funding base. Core deposits showed exceptional growth, increasing $223 million quarter-over-quarter in the third quarter of 2025, which is a 13% annualized rate.

The bank's stated philosophy centers on community banking, which naturally encompasses nonprofit organizations and municipalities within its operating footprint. The company provides services ranging from commercial, agricultural, and consumer banking to wealth management and retirement plan services.

Here's a quick look at some key financial metrics that underpin the scale of these customer relationships as of the third quarter of 2025:

The focus on core relationships is evident in the deposit growth, showing that the retail and local business segments are actively growing their primary banking relationships with Nicolet Bankshares, Inc. The loan portfolio mix clearly favors commercial activity, especially C&I and real estate-related lending, including agriculture.

Finance: draft 13-week cash view by Friday.

Nicolet Bankshares, Inc. (NIC) - Canvas Business Model: Cost Structure

You're looking at the core expenses that drive the operations for Nicolet Bankshares, Inc. as of late 2025. For a bank, the cost of money-interest expense-is usually the biggest factor, followed closely by the people who manage the relationships and the technology that supports them.

The cost structure is heavily influenced by funding costs. For the third quarter of 2025, the cost of interest-bearing liabilities settled at 2.76%. This was an improvement, as interest expense decreased by $1 million between the second quarter of 2025 and the third quarter of 2025, even as net interest income rose to $79 million.

Personnel is a significant, ongoing cost. As of December 1, 2025, Nicolet Bankshares, Inc. reported 952 employees. Personnel expense for the third quarter of 2025 saw an increase of $0.323 million compared to the second quarter of 2025. This reflects the investment in the team delivering services across their footprint.

Total noninterest expense for the third quarter of 2025 was reported at $50.088 million. This figure bundles the costs of running the physical and digital infrastructure, including the branch network, technology, and compliance requirements.

Here's a breakdown of the key noninterest expense components for Q3 2025 and related context:

• Total Noninterest Expense (Q3 2025): $50.088 million.
• Personnel Expense Change (QoQ): Increased by $0.323 million.
• Non-personnel Related Expenses Change (QoQ): Decreased by $0.2 million.
• Full Year 2024 Personnel Expense Increase (YoY): Up $9 million over 2023.
• Full Year 2024 Non-personnel Expenses Change (YoY): Decreased by a combined $4 million from 2023.

The non-personnel component covers everything from the physical footprint to the digital backbone. Occupancy and equipment costs are part of this, supporting the branch network that serves communities across northeastern Wisconsin and the Upper Peninsula of Michigan. Technology maintenance and regulatory compliance expenses are embedded here, though specific line items aren't detailed for Q3 2025 outside of the aggregate noninterest expense.

For perspective on the non-personnel costs, the decrease in Q3 2025 non-personnel expenses was driven by declines in most categories, despite seasonally higher business development and marketing expenses. In the prior full year (2024), the decrease in non-personnel expenses was mostly due to lower data processing costs, as 2023 included a $3 million early contract termination charge. Legal and professional fees were noted as a driver for higher non-personnel expenses in Q4 2024.

You can see the main cost drivers in the table below:

The bank is actively managing its funding mix, which directly impacts the interest expense line. The reduction in brokered deposits by $153 million, offset by core deposit growth of $223 million in Q3 2025, suggests a strategic shift to lower-cost funding sources, which helps control the cost of interest-bearing liabilities.

Finance: draft 13-week cash view by Friday.

Nicolet Bankshares, Inc. (NIC) - Canvas Business Model: Revenue Streams

You're looking at how Nicolet Bankshares, Inc. actually brings in its money as of late 2025. It's pretty standard for a community-focused bank, relying heavily on the difference between what it earns on loans and what it pays out on deposits, plus a healthy dose of fees for services.

The core of the revenue machine is Net Interest Income (NII). For the third quarter of 2025, NII totaled $79 million. This number reflects the spread between interest earned on assets and interest paid on liabilities, which was helped by a net interest margin of 3.86% for that quarter. The yield on interest-earning assets was 5.85%, while the cost of interest-bearing liabilities settled at 2.76% in Q3 2025.

Beyond the interest spread, Noninterest Income is a significant contributor. In Q3 2025, this segment brought in $24 million. This was up $3 million from the second quarter of 2025, though a $1.5 million favorable change in net asset gains from equity security market valuations played a part. Still, excluding those gains, the underlying fee and service income grew by $1.5 million sequentially.

Here's a quick look at the primary revenue components for that period:

The interest income component is driven by the loan book. Nicolet Bankshares, Inc. focuses on interest earned from commercial, real estate, and consumer loans. Total loans grew by $36 million from June 30, 2025, with growth concentrated mostly in construction and agricultural loans. This lending activity is the engine for the NII.

For the fee-based revenue, you see direct contributions from wealth management, trust, and treasury management services. For instance, looking at the first half of 2025, wealth management fee income grew from $13.2 million in the first half of 2024 to $13.8 million in the first half of 2025. Similarly, mortgage income for the first half of 2025 was $4.8 million, up from $4 million the prior year. You also see revenue from service charges on deposit accounts and card interchange income contributing to that Noninterest Income bucket.

So, the revenue streams are clearly segmented:

• - Net Interest Income (NII): The primary driver, totaling $79 million in Q3 2025.
• - Interest from Loans: Derived from commercial, real estate, and consumer lending, with recent growth in construction and agricultural loans.
• - Noninterest Income: Reached $24 million in Q3 2025.
• - Wealth and Trust Fees: Saw an increase of $0.8 million quarter-over-quarter in Q3 2025, with H1 2025 income at $13.8 million.
• - Mortgage Income: Contributed to the noninterest growth, with H1 2025 income at $4.8 million.

Finance: draft the Q4 2025 NII projection based on current margin trends by next Tuesday.