Nicolet Bankshares, Inc. (NIC): PESTLE Analysis [Nov-2025 Updated]

You're looking for a clear-eyed view of Nicolet Bankshares, Inc. (NIC), and the direct takeaway is that its success hinges on navigating the 'higher-for-longer' rate environment while defending its community bank model. This PESTLE breakdown maps the terrain, focusing on near-term risks and opportunities, which is crucial for a bank projected to reach total assets nearing $9.5 billion and estimated net income around $115 million for the 2025 fiscal year. We need to defintely map out the political headwinds and economic tailwinds to see how this regional player can maintain its Net Interest Margin (NIM) against larger competitors, so read on for the specific breakdown of macro factors impacting their strategy.

Nicolet Bankshares, Inc. (NIC) - PESTLE Analysis: Political factors

The political landscape for Nicolet Bankshares, Inc. (NIC) in 2025 is dominated by two forces: the looming shadow of federal regulatory thresholds and a highly supportive, localized state government environment in its core markets.

You need to pay close attention to the $10 billion asset mark. While NIC's asset base of $9.0 billion as of September 30, 2025, keeps it officially a 'community bank,' the regulatory complexity that comes with crossing that threshold is a clear and present risk, especially given the company's stated interest in mergers and acquisitions (M&A).

Increased regulatory scrutiny on mid-sized banks (>$10 billion assets) post-2023 failures.

The failures of larger regional banks in 2023 dramatically changed the regulatory focus, pushing the de facto scrutiny threshold lower. Nicolet Bankshares is right on the cusp of becoming a 'regional bank' in the eyes of regulators, which the Federal Reserve defines as having assets between $10 billion and $100 billion.

Management is defintely aware of this, noting earlier in 2025 that they are 'thoughtful in the size of bank we may partner with as the $10 billion asset threshold looms'. The political risk isn't just organic growth; it's M&A. Should NIC complete a deal, such as the one mentioned in late 2025 that could create a pro forma entity with $15.3 billion in total assets, it would immediately trigger new, costly compliance requirements.

The regulatory changes post-2023 failures include the FDIC modifying its approach to resolution planning for large banks. For NIC, the compliance deadline for the final rule on recovery planning is April 1, 2028, for banks in the $3 billion to $10 billion range, but that jumps forward to April 1, 2027, if they cross the $10 billion mark. That's a huge operational lift you'd need to budget for.

Federal Reserve interest rate policy uncertainty impacting loan demand and deposit pricing.

The Federal Reserve's monetary policy in late 2025 is a critical political factor because it directly controls Nicolet Bankshares' profitability through its Net Interest Margin (NIM). The Fed has been in an easing cycle, lowering the federal funds rate by 25 basis points (bps) at its October 2025 meeting, bringing the target range to 3.75%-4.00%. This followed a similar cut in September.

This rate-cut environment creates uncertainty. While lower rates are expected to stimulate loan demand-especially for mortgages and corporate borrowing-they also compress NIMs. Nicolet Bankshares reported a strong Q3 2025 NIM of 3.86%, well above the 3.25% average for all U.S. banks and 3.46% for community banks as of March 31, 2025. To maintain this premium, NIC must quickly lower its cost of deposits faster than its yield on assets, which was 5.85% in Q3 2025.

Here's the quick math on NIM pressure:

State-level political stability in Wisconsin and Michigan supporting local business lending.

The political environments in Nicolet Bankshares' core operating states-Wisconsin and Michigan-are stable and actively supportive of local business, which helps NIC's core relationship-banking model.

State-level agencies are aggressively using federal funds to bolster small business access to capital (SSBCI), which directly de-risks and incentivizes local lending for banks like NIC. This is a huge opportunity.

• Michigan: The state announced a second round of State Small Business Credit Initiative (SSBCI) 2.0 funds in January 2025, making $79,383,856 available for small businesses. The Michigan Department of Transportation (MDOT) also runs a Small Business Lending Program for disadvantaged business enterprises (DBE) and small business enterprises (SBE) for construction projects.
• Wisconsin: The Wisconsin Economic Development Corporation (WEDC) is a key partner, using SSBCI for loan guarantees and direct lending to facilitate capital access. The state government also proactively secured an extension from the SBA for physical damage loan applications in November 2025 for businesses impacted by August severe weather, showing a commitment to local recovery.

Government programs offering incentives for small business lending and community development.

Federal government programs, particularly those from the Small Business Administration (SBA), are seeing high demand in 2025, which gives NIC a strong channel for community-focused, government-guaranteed lending.

SBA 7(a) loan approvals remain at near-record volumes, with Q2 of Fiscal Year 2025 (January through March) recording over $10 billion in approvals. The surge is concentrated in smaller loans, which fits NIC's community bank profile: more than half of all 7(a) loans in early FY2025 were under $150,000, and over 80% were under $500,000.

Key program shifts in 2025 include the SBA launching the Manufacturing and Advanced Research Capital (MARC) program in September 2025, a new loan program for small manufacturers. However, the political benefit of the government guarantee now comes with a cost: the SBA reinstated upfront guaranty fees for most loans approved after March 27, 2025.

Nicolet Bankshares, Inc. (NIC) - PESTLE Analysis: Economic factors

Net Interest Margin (NIM) compression due to high cost of deposits in the 'higher-for-longer' rate cycle.

You've seen the headlines: the higher-for-longer interest rate environment was supposed to crush bank profitability, specifically through Net Interest Margin (NIM) compression. For Nicolet Bankshares, Inc., the initial pressure was real, with the NIM dipping to 3.58% in the first quarter of 2025, down 3 basis points (bps) from the prior quarter.

But the story quickly changed. The bank successfully managed its funding mix, leading to a significant NIM expansion through the rest of 2025. By the third quarter of 2025, the NIM had risen to a strong 3.86%, a 14 bps increase over the second quarter. This improvement was driven by a reduction in the cost of interest-bearing liabilities (deposits and borrowings), which decreased to 2.76% in Q3 2025 from 2.86% in Q2 2025. This shows that while the risk of NIM compression was high, the bank's operational focus on core deposit growth-which increased by an exceptional $223 million in Q3 2025-helped mitigate the cost pressure.

The NIM is defintely a key indicator of a bank's core profitability.

Strong, but slowing, regional economic growth in the Midwest manufacturing and agricultural sectors.

Nicolet Bankshares operates in the Upper Midwest, a region heavily reliant on manufacturing and agriculture. While this historically provides a stable, diversified loan base, the economic outlook for 2025 is more accurately described as struggling rather than strong. Surveys from mid-2025 show both manufacturing and agriculture sectors are below the 'growth neutral' indicator.

The agricultural sector is under particular stress. Global clashes and trade wars hammered farm economies in early 2025. The U.S. Department of Agriculture (USDA) projects the U.S. agricultural trade deficit will hit a record $45.5 billion in 2025, a significant headwind for the bank's core customer base. This weak economic backdrop directly impacts loan demand and credit quality for the bank's substantial agricultural loan portfolio, which totaled $1.378 billion as of September 30, 2025.

• Low commodity prices are the biggest threat to Midwest farmers.
• Higher tariffs are pushing up input costs for the manufacturing industry.
• More farms filed for Chapter 12 bankruptcy in Q1 2025 than in any full year since 2021.

Potential valuation risks in the Commercial Real Estate (CRE) loan portfolio, especially office space.

The broader market is understandably nervous about Commercial Real Estate (CRE), especially non-owner-occupied office properties. Nicolet Bankshares has significant exposure here, with total CRE loans at $1.537 billion as of September 30, 2025. This is a substantial portion of the bank's total loan portfolio.

Specifically, the CRE Investment portfolio-which includes multi-family, retail, and the higher-risk office segment-stood at $1.213 billion in Q3 2025. However, the good news for the bank is that its asset quality metrics remain solid. Nonperforming assets were only $28 million at September 30, 2025, representing a minimal 0.31% of total assets. The Allowance for Credit Losses (ACL) was maintained at 1.00% of total loans ($69 million). The risk is not in current defaults, but in future valuation declines, particularly as older CRE loans mature and need refinancing in a higher-rate environment.

Higher capital expenditure costs for technology and compliance reducing operating leverage.

The cost of keeping up with technology and compliance (RegTech) is a non-stop drain on operating leverage for all banks. Nicolet Bankshares reported a Noninterest Expense of $50 million for the third quarter of 2025. Industry data suggests banks typically allocate between 2.9% and 8.7% of non-interest expenses to compliance, and up to 40% of that compliance budget goes to technology. Here's the quick math: on a quarterly basis, the bank's compliance-related non-interest expense is likely between $1.45 million and $4.35 million. This is a recurring, non-negotiable cost.

Plus, the regulatory landscape is constantly shifting, which drives up tech spend. For example, the proposed rescission of the 2023 Community Reinvestment Act (CRA) Final Rule in Q3 2025 creates regulatory uncertainty, forcing banks to keep their compliance systems flexible and expensive. This high, fixed cost of compliance and technology acts as a headwind against improving the bank's efficiency ratio.

Finance: Track the quarterly compliance and technology non-interest expense against the industry's 40% tech allocation benchmark by the end of the year.

Nicolet Bankshares, Inc. (NIC) - PESTLE Analysis: Social factors

As a seasoned financial analyst, I see the social landscape for Nicolet Bankshares, Inc. (NIC) as a classic community banking story facing a two-sided demographic challenge: an aging, highly loyal core customer base, and a younger segment demanding a seamless digital experience. Your strategy must be to monetize the first group's wealth transfer while aggressively courting the second with technology that still feels personal. It's a high-wire act, but the opportunity is clear.

Strong community bank brand loyalty and local trust in core Wisconsin/Michigan markets.

Nicolet Bankshares operates in a region where local relationships still matter deeply, and this is a significant competitive moat. The bank's ability to generate core deposit growth is a direct reflection of this trust. For the third quarter of 2025, Nicolet reported exceptional core deposit growth of $223 million, representing a 13% annualized increase. This kind of sticky, local funding base is less volatile than wholesale funding and is a key advantage over national megabanks.

Here's the quick math: Community banks thrive because customers are approximately 2.4x more likely to remain loyal when a business quickly resolves customer experience issues. This loyalty is built on a high-touch model. Maintaining this local connection while expanding digitally is the core challenge. You can't defintely sacrifice the personal touch for the app.

Aging demographic in key service areas increasing demand for wealth management and trust services.

The demographic shift in your core market is a massive, near-term revenue opportunity. In Wisconsin, the population aged 60 and older totaled 1.45 million in 2020, comprising 25% of the state's total population, and this cohort grew by 32% between 2010 and 2020. This aging population controls a disproportionate amount of capital; U.S. adults aged 55 and older control about three-quarters of all wealth. This means a significant wealth transfer is underway.

Nicolet is already seeing this opportunity materialize. In the third quarter of 2025, the bank reported a $0.8 million increase in wealth income, excluding net asset gains, demonstrating that the demand for trust and wealth management services is translating into tangible revenue growth. This trend is a strategic tailwind, but it also highlights the need to staff and scale your advisory services.

Growing customer expectation for seamless digital and in-person hybrid banking experiences.

The market no longer distinguishes between a community bank and a digital bank; they expect both. Over 83% of U.S. adults used digital banking services in 2025, with 77% of consumers preferring to manage their accounts via a mobile app or computer. This is the new baseline. However, the hybrid model is non-negotiable for a community bank like Nicolet, as 45% of customers who don't bank online cite a preference for access to a physical branch.

The need for investment is evident in your operating expenses. Nicolet's Q1 2025 results showed an increase of $0.6 million in occupancy, equipment, and office expense, which was partly attributed to higher software costs. This signals necessary investment in technology to meet the rising bar for digital convenience. You need to be 'Digital-Forward,' a segment that represents about 38% of surveyed financial institutions who actively leverage modern technology.

• Digital Demand: 80% of millennials prefer digital banking.
• Hybrid Necessity: 45% of non-online customers value the physical branch.
• Industry Investment: 94% of financial institutions plan to embed fintech into their digital experiences.

Talent shortage in specialized areas like cybersecurity and data analytics affecting hiring.

The tight labor market for specialized tech skills is a major headwind, especially for a regional bank competing with major financial centers and tech companies. The U.S. has a cybersecurity workforce gap of over half a million positions. Financial Services is one of the top four industries that account for 64% of the overall shortage.

The challenge extends beyond headcount to specific skills, particularly in data. The unemployment rate for financial analysts is a razor-thin 1.9%. Furthermore, 63% of employers cite skills gaps in analytics, AI, and big data as a top barrier to business transformation. The demand for AI and machine learning specialists in the U.S. financial sector is projected to increase by a staggering 142% by 2030. You are not just hiring for today's needs; you are competing for the talent that will drive future automation and risk management.

Nicolet Bankshares, Inc. (NIC) - PESTLE Analysis: Technological factors

Significant investment required for core system modernization and cloud migration.

You can't compete in modern banking with yesterday's technology. Nicolet Bankshares recognized this, which is why they made a strategic move to overhaul their digital infrastructure. This isn't a small expense; it's a massive, necessary capital outlay. In March 2024, the bank, with assets around $8.5 billion at the time, partnered with NCR Voyix to transform its digital banking experience, signaling a significant investment to stay ahead of the curve.

The new 'Nicolet Bank Digital' platform went live in February 2025, but the real cost isn't just the launch; it's the core system modernization (moving off legacy mainframe systems) and cloud migration. Industry data for 2025 shows that banks often underestimate the true cost of ownership (TCO) of legacy systems by 70% to 80%, with some institutions finding their actual IT costs are 3.4 times higher than budgeted when all factors are included. Plus, legacy systems still consume about 70% of the average bank's IT budget, which is a huge drain.

Here's the quick math on the modernization challenge:

The goal is to move from capital expenditure (CapEx) to a more flexible operational expenditure (OpEx) model, but that transition is defintely expensive upfront.

Competition from large national banks and FinTech companies for digital-savvy customers.

The banking battleground has shifted entirely to the digital experience. You're not just competing with Chase or Bank of America anymore; you're up against FinTechs that were 'born in the cloud' and offer a frictionless user experience. As a regional bank with $9.0 billion in assets as of March 31, 2025, Nicolet Bankshares must deliver a digital experience that rivals institutions 100 times its size.

The new digital platform, launched in February 2025, is a direct strategic countermeasure. The competition is fierce because FinTechs are focused on accelerating sales, while traditional banks are still primarily focused on driving operational efficiency (84% of banks cite this as their primary cloud objective). This difference in focus means FinTechs are often faster to market with new, customer-facing features like advanced money management tools. The future of banking competition will be won on experience, not just rates.

Use of Artificial Intelligence (AI) and Machine Learning (ML) to enhance fraud detection and customer service.

AI and Machine Learning (ML) are no longer optional; they are the core defense and efficiency engine for banks. Nicolet Bankshares already uses a best-in-class fraud monitoring tool, Guardian Analytics, which is a clear application of ML. This system works by detecting anomalous behavior based on device, geo-location, time, and transaction details, which is exactly how ML models flag suspicious activity in real-time.

The benefits are quantifiable and critical to the bottom line:

• Cloud-enabled banks using AI-powered risk management tools reduced financial risk exposure by an average of 27% in 2025.
• AI-driven financial models on the cloud now manage $2.4 trillion in assets, streamlining investment strategies across the industry.
• AI assistants provide real-time monitoring and instant alerts for fraud, which is essential when manual detection is impractical due to the volume of daily transactions.

Using these tools helps balance the difficult trade-off between keeping out fraud and keeping the user experience smooth. That's the real value proposition of good AI.

Rising cost of maintaining robust cybersecurity defenses against sophisticated attacks.

Cybersecurity is a non-negotiable, escalating cost center. Nicolet Bankshares' 10-K filing in February 2025 explicitly stated that cybersecurity risks are expected to remain 'heightened' as digital capabilities evolve. This is a universal trend: sophisticated threats are blurring the security perimeter, and the cost of defense is rising faster than inflation.

For US banks with assets in the $3 million to $20 billion range-which includes Nicolet Bankshares-the data is clear: 86% of executives surveyed in late 2024 said cybersecurity was their biggest area of budget increase for 2025. Furthermore, 88% of these banks plan to increase their overall IT spending by at least 10% in 2025. This increase is driven by the need to shift from traditional Security Information and Event Management (SIEM) to more advanced Extended Detection and Response (XDR) systems, which use AI to analyze threats in depth.

The cost of not investing is far higher. While Nicolet Bankshares has not reported a material impact from a cybersecurity incident, the average cost of a breach for a smaller business can reach $120,000, and a proactive approach, though requiring higher upfront commitment, can reduce three-year total costs by 25% compared to a reactive one. The bank's commitment to following frameworks from the OCC, FFIEC, and NIST shows they are prioritizing a proactive, compliance-driven defense.

Nicolet Bankshares, Inc. (NIC) - PESTLE Analysis: Legal factors

Increased compliance burden and cost related to Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) regulations

You're facing a constantly escalating compliance cost related to the Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) regulations, and that trend is defintely not slowing down. The financial services sector's total annual AML compliance costs are estimated to exceed $60 billion per year, a staggering figure that highlights the sheer resource drain. For a regional bank like Nicolet Bankshares, Inc., this means dedicating more personnel and technology to transaction monitoring and reporting, a necessary but expensive overhead.

The regulatory focus is sharpening, too. The Financial Crimes Enforcement Network (FinCEN) is actively reviewing the cost-benefit of these rules, issuing a request for information (AML Survey) in September 2025, with submissions due by December 1, 2025. This signals that while the burden is high, regulators are at least trying to understand the impact. Plus, the scope is expanding to include Countering the Financing of Terrorism (CFT), requiring a more complex and integrated compliance program beyond just the traditional BSA requirements.

Here's the quick math on the legal expense line item for Nicolet Bankshares, Inc. in early 2025:

What this estimate hides is the internal technology and human capital investment that doesn't show up directly as an external legal fee, which is the real compliance cost driver for BSA/AML.

Evolving consumer data privacy laws (e.g., state-level equivalents to CCPA) requiring system updates

The biggest headache in data privacy for any US bank is the 'patchwork' of state laws, not just California's CCPA, but a growing list of others. This lack of a national standard forces you to build compliance systems for the strictest state, which is costly. A study showed that small banks, on average, increased their IT spending by more than a third in the year following a state's announcement of a stronger data privacy law. That's a massive, non-revenue generating tech investment.

The regulatory pressure is also coming from the federal level on data access, a critical legal factor in 2025. The Consumer Financial Protection Bureau (CFPB) finalized rules on Personal Financial Data Rights (Dodd-Frank Section 1033) in October 2024. This rule mandates that banks must make consumer financial data available to consumers and authorized third parties at no cost.

This means immediate, required actions:

• Design compliant Application Programming Interfaces (APIs) for data sharing.
• Establish robust third-party risk management protocols for data aggregators.
• Ensure data security and accuracy under new, stricter standards.

The compliance date for another significant data collection rule (HMDA for Tier 1 filers) is also set for July 18, 2025, adding to the immediate system update pressure.

Potential for stricter capital and liquidity requirements from the Basel III endgame framework

The Basel III endgame framework is the elephant in the room for the entire US banking system, but for Nicolet Bankshares, Inc., the immediate risk is lower. The proposed rules, which were expected to begin implementation on July 1, 2025, with a three-year phase-in, primarily target larger banks with $100 billion or more in total consolidated assets.

Since Nicolet Bankshares, Inc.'s total assets were approximately $9.0 billion at March 31, 2025, and even after the announced acquisition of MidWestOne Financial, the pro forma total assets will be around $15.3 billion, you fall well below the main threshold. This exemption is a competitive advantage, freeing up capital and resources that larger competitors must dedicate to compliance.

Still, you can't ignore it. The market is pricing in the impact on competitors, and the regulators' general push for higher capital standards creates a shadow risk. The proposal does include a phase-in for Category III and IV banking organizations to eliminate the Accumulated Other Comprehensive Income (AOCI) opt-out, which is a structural change for many regional banks, even if NIC is not in those categories yet.

Litigation risks associated with mortgage servicing and loan origination practices

Litigation is a constant operational risk, and in 2025, the focus remains sharp on consumer protection laws related to lending and servicing. The volume of new lawsuits under certain consumer statutes is rising, which directly impacts loan origination and servicing departments.

Recent litigation trends show a significant increase in consumer-facing lawsuits:

• Fair Credit Reporting Act (FCRA) cases were up 12.6 percent from January through May 2025 compared to the prior year.
• Telephone Consumer Protection Act (TCPA) cases were up substantially by 39.4 percent over the same period, often targeting communication practices.

Furthermore, the CFPB is actively overhauling mortgage servicing rules for distressed borrowers, with a final rule expected by December 2025. This will require immediate updates to servicing policies and technology. A specific, high-cost risk is the resurfacing of 'zombie second mortgages,' where servicers attempt to collect on old, dormant debt. This has already led to a Massachusetts settlement wiping out over $10 million of such debt. Finally, the Supreme Court's 2024 Cantero ruling and subsequent decisions in 2025 are chipping away at National Bank Act preemption, meaning state laws-like New York's 2% interest requirement on mortgage escrow accounts-are increasingly applying to national banks, complicating multi-state operations.

Nicolet Bankshares, Inc. (NIC) - PESTLE Analysis: Environmental factors

Growing pressure from institutional investors for transparent Environmental, Social, and Governance (ESG) reporting.

You're operating in a 2025 market where institutional investors, including BlackRock and others, are defintely not letting up on their demand for clear ESG disclosures, even if the public rhetoric in the US is quieter. The BNP Paribas 2025 ESG survey shows nearly 90% of global institutional investors are maintaining their commitment to sustainable investing, which means they're still scrutinizing your disclosures. For a regional bank like Nicolet Bankshares, the pressure point is the lack of a standalone, public ESG report, which makes it hard for a portfolio manager to benchmark your risk profile against peers.

The Securities and Exchange Commission (SEC) is pushing for more standardized climate-related financial disclosures, and while the largest banks are moving toward the Task Force on Climate-related Financial Disclosures (TCFD) framework, smaller regional players often lag. This lack of transparency creates an information vacuum for investors. Nicolet Bankshares' institutional ownership is substantial, at approximately 51.77% as of late 2025, meaning a significant portion of your capital base is sensitive to these non-financial risks.

Here's the quick math: if a major fund can't easily quantify your climate-related loan exposure, they must price that uncertainty as a higher risk premium, which hurts your stock multiple. You need to start treating this as a core financial disclosure, not just a marketing exercise.

Need to assess climate-related risks within the agricultural and commercial real estate loan portfolios.

The most material environmental risk for Nicolet Bankshares is embedded directly in your loan book, given your concentration in the Midwest and Upper Peninsula regions. Your total loan portfolio, which was growing by $119 million in Q1 2025, contains two highly climate-sensitive segments:

• Agricultural Loans: Approximately $1.32 billion as of year-end 2024.
• Owner-Occupied Commercial Real Estate (CRE): Approximately $940 million as of year-end 2024.

The industry consensus is clear: 94% of agricultural finance institutions see climate change as a material risk in 2025. For your agricultural portfolio, this means physical risks like drought, extreme heat, and heavy precipitation in Wisconsin and Michigan can directly impair a farmer's ability to repay their loan. For the CRE portfolio, a 2024 analysis found that 95% of banks surpassing the 'material financial risk' threshold from climate impacts were small regional or community banks, due to their concentrated geographic footprint. You need to move beyond general credit risk models and integrate climate scenario analysis (like a 2°C warming scenario) to stress-test your collateral values and borrower repayment capacity in specific, high-risk zip codes.

Operational goals to reduce energy consumption and carbon footprint in branch network.

While Nicolet Bankshares has not publicly disclosed specific, quantifiable targets for operational environmental efficiency in 2025, the industry trend is toward aggressive reduction. You operate a network of over 57 branches across Wisconsin, Michigan, Minnesota, and Florida.

The lack of a public goal for your branch network is a missed opportunity to show capital discipline. For perspective, a peer like RBC is investing $35 million over three years in the first phase of retrofitting its 1,200-branch network, aiming to cut 10,000 tonnes of onsite carbon emissions. Your focus should be on practical, cost-saving measures:

• Implement a formal energy consumption baseline across all 57 branches.
• Set a near-term goal, say a 10% reduction in absolute energy use by 2027, focusing on HVAC and lighting upgrades.
• Explore Power Purchase Agreements (PPAs) or Renewable Energy Credits (RECs) to offset the carbon footprint of your purchased electricity.

Reducing your carbon footprint is just good facility management, honestly, because it cuts your long-term operational costs.

Opportunities to finance green infrastructure and sustainable business projects in the region.

The flip side of risk is opportunity, and your community bank model is perfectly positioned to capitalize on the transition to a low-carbon economy in your service area. Nicolet Bankshares already has the infrastructure to support this, serving as a preferred guaranteed lender for several key federal and state programs.

You can leverage these existing partnerships to actively market sustainable finance products:

• USDA Farm Service Agency (FSA) Loans: Use your preferred lender status to focus on FSA-guaranteed loans for on-farm renewable energy (solar, anaerobic digesters) and conservation practices, which directly reduce risk in your $1.32 billion ag portfolio.
• WHEDA Loans: Utilize Wisconsin Housing and Economic Development Authority (WHEDA) programs to finance energy-efficient commercial real estate upgrades or affordable housing projects that incorporate green building standards.

This is a tangible way to turn an ESG threat into a revenue stream, plus it stabilizes your collateral. Your next step is to assign a team to quantify the potential annual loan volume for 'green' projects under these existing programs, and then market specifically to that segment.