What happened
Nicolet Bankshares (NIC +0.69%) saw its share price plummet 11% this week, as of noon ET today from last Friday's close, according to S&P Global Market Intelligence. The stock is trading at about $71.40 per share and is down 10.5% year to date today.
Overall, the major market indexes were all down this week, with the S&P 500 falling 1.7%, the Dow Jones Industrial Average dropping 3.4%, and the Nasdaq Composite sinking 0.7% as of the same time.
So what
Green Bay, Wisconsin-based Nicolet Bankshares posted year-end and fourth-quarter earnings on Jan. 17, and the results may partially be the reason for the stock's decline this week. The bank generated record net income in the quarter of $27.6 million, up from $16.3 million a year ago this quarter.
However, adjusted diluted earnings per share was $1.84, up from $1.83 a year ago. This missed consensus earnings estimates of $2.05 per share. But that should not be too concerning as the miss is mostly related to costs associated with the acquisition last August of Charter Bankshares.
NYSE: NIC
Key Data Points
Overall, loans grew 34% year over year to $6.2 billion, including the loans from Charter, while net interest income jumped 26% in the quarter year over year to $68 million. Credit quality improved as the ratio of nonperforming assets to total assets was 0.46%, down from 0.73% a year ago.
In addition to the earnings miss, Nicolet may have been dragged down by the overall market, mainly Goldman Sachs, which had its biggest earnings miss in a decade in the fourth quarter.
Now what
Overall, Nicolet investors should not be too concerned about the earnings miss and negative week. The bank is coming off a record year and has added scale in its market with the acquisition of Charter in 2022 and the purchases of Mackinac Financial Corp. and County Bancorp in 2021.
It has managed expenses well with an efficiency ratio of 52.8%, down from 56.7% a year ago, and has raised its return on tangible common equity to 19.8% from 13.2% a year ago. It should be able to navigate the choppy waters of 2023. It is not a bad stock to consider to add some ballast in the small-cap portion of a portfolio.
