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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion is management’s analysis to assist in the understanding and evaluation of the consolidated financial condition and results of operations of Nicolet. It should be read in conjunction with the consolidated financial statements and footnotes presented elsewhere in this report.

The detailed financial discussion that follows focuses on 2025 results compared to 2024. For a discussion of 2024 results compared to 2023, see the information under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 25, 2025, which information under that caption is incorporated herein by reference. Historical results of operations are not necessarily predictive of future results.

Overview

Economic Outlook and Recent Industry Developments

The U.S. economy continued to demonstrate resilience through 2025, although growth moderated from the unexpectedly strong performance of 2024. Based on all indications, real GDP grew at just under 2% in 2025, reflecting a slight slowdown but still indicating a stable expansionary environment. Heading into 2026, GDP is expected to grow at a slightly slower pace than 2025, which is supported by tax policy, consumer spending, and productivity from advancements in artificial intelligence. Employment conditions softened somewhat in 2025, but the labor market remained fundamentally healthy. Nationwide unemployment is projected to rise only slightly in 2026 and stay below levels historically associated with recessionary conditions. Unemployment in our core markets in the Upper Midwest continue to remain below nationwide levels, which is driven by a strong base in manufacturing and healthcare, as well as a stronger labor participation rate than the rest of the country. Consumer spending in 2025 decelerated from 2024’s robust pace, influenced by higher borrowing costs and pockets of consumer caution, yet remained a key contributor to growth. Business investment continued to benefit from productivity gains—particularly in artificial intelligence and automation—though firms grew more selective amid policy uncertainty and tariff-related cost pressures.

After cutting rates three times in the back half of 2024, the Federal Reserve entered 2025 with a more cautious posture. Market expectations early in the year centered on several additional 25 or 50 bps cuts; however, firmer inflation readings and policy volatility—particularly around trade—led the Federal Reserve to signal a more measured approach, cutting rates by 25 bps three times during the year. At this point, the market is expecting two 25 bps rate cuts in 2026. However, stubbornly high inflation and continued strong consumer spending weigh against potentially higher unemployment and slower GDP growth. Additionally, a new Fed Chairman is expected to be appointed in May, which may also have a significant influence on interest rate policy.

The banking sector entered 2025 with renewed optimism. This bullish sentiment largely carried through 2025, though volatility persisted as policy details evolved. Credit losses did rise in 2025, particularly among institutions with heavy commercial real estate (“CRE”) exposure or concentrations in large urban markets. However, these pressures remained contained and did not pose systemic risk. Banks with diversified portfolios and limited investment CRE exposure, or that operate in non-major metro markets—such as Nicolet—were comparatively unaffected. Regulatory reform discussions gained momentum, with expectations of reduced compliance burdens and lower operating costs across the industry. M&A activity, which had been subdued for several years, began to accelerate as both regulatory signals and market conditions improved. Overall, the banking industry enters 2026 with improved sentiment, healthier balance sheets, robust capital levels, and a more favorable policy backdrop than in the years immediately following the regional banking stresses of years prior.

2025 Highlights

Nicolet announced record net income of $151 million for the year ended December 31, 2025, and earnings per diluted common share of $9.78, compared to net income of $124 million and earnings per diluted common share of $8.05 for 2024.

At December 31, 2025, Nicolet had total assets of $9.2 billion, an increase of $388 million (4%) from December 31, 2024. Total loans of $6.8 billion at December 31, 2025, increased $210 million (3%) from December 31, 2024, while total deposits of $7.7 billion increased $327 million (4%) from December 31, 2024. Total stockholders’ equity was $1.3 billion at December 31, 2025, an increase of $85 million since December 31, 2024, with solid earnings and favorable movements in the securities portfolio market valuation, partly offset by payment of the quarterly common stock dividend and common stock repurchases.

Nonperforming assets were $32 million and represented 0.35% of total assets at December 31, 2025, compared to $29 million or 0.33% at year-end 2024. The allowance for credit losses-loans was $69 million (1.01% of loans) at December 31, 2025, compared to $66 million (1.00% of loans) at December 31, 2024.

As noted last year, Nicolet’s Board and executive management viewed 2025 as a year of optionality for the Company. The financial performance of the core franchise placed Nicolet among the top decile of banks in the country, as measured by return on average

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assets and return on tangible common equity. This consistent performance kept all strategic options on the table throughout the year for Nicolet. The priorities, as laid out a year ago, and in no particular order, included (1) funding organic growth, (2) share repurchases, (3) increased dividends, and (4) M&A. We are pleased to say that all four of those priorities were accomplished in 2025, including (1) growth in our balance sheet by 4%, (2) repurchasing more than 646,000 shares in the open market, (3) increasing the dividend by 14%, and (4) capping off the year with the announced acquisition of MidWestOne.

The MidWestOne acquisition (which closed on February 13, 2026) marked a pivotal moment for Nicolet. It doubled the branch footprint to over 100 locations, as well as expanded our footprint to the state of Iowa, increased our presence in Western Wisconsin, and significantly increased our market share in the greater Twin Cities market. Additionally, MidWestOne answered the “$10 billion question” that management has been asked for the past several years. Following the 2022 Charter acquisition, when we ended the year close to $9 billion in assets, people have questioned if and how we planned to cross the $10 billion threshold. As a result of the 2010 Dodd-Frank Act, any bank with assets more than $10 billion is subject to increased regulation, and to more intense scrutiny by the banking regulators. This typically means that those banks must make substantial additional investments in compliance and risk management resources. Also, those banks become subject to the Durbin amendment, which limits how much banks can charge merchants for debit card transaction fees (or “card interchange income” noted on our income statement). In our case, it would mean our interchange income would be reduced by more than $5 million simply because we crossed this asset threshold. Banks that cross that threshold organically, or with a small acquisition typically are less profitable immediately after due to the increased expense and reduced revenues. MidWestOne, and its size ($6 billion), allows Nicolet to leap over the $10 billion threshold, thus realizing many of the operating efficiencies that may allow Nicolet the ability to retain its top quartile, if not top decile profitability going forward.

As we head into 2026, our primary focus will always remain on running a growing, highly profitable community bank that matters to the communities it serves. But following close behind will be what we expect to be the successful integration of MidWestOne. The legal closing of the merger was February 13, 2026 – only 113 days from the announcement. However, unlike each of the past acquisitions we have completed, the core system integration is purposely delayed by approximately six months. Due to the size of this acquisition, as well as working with Fiserv (our core processor), we made the decision to delay the systems conversion of MidWestOne until late summer 2026. Until then, MidWestOne locations will continue to operate under the same name, but as a division of Nicolet National Bank. Once the systems conversion is complete, all MidWestOne locations will carry the Nicolet Bank name and banner. In the interim, there is still much we can do, and have already done, to begin the cultural integration process with MidWestOne. Dozens of employees of both Nicolet and MidWestOne have been working for months on a number of fronts to prepare for the legal closing of the merger. These same people, as well as many more, will continue these efforts as we welcome the employees, customers, and communities of MidWestOne to Nicolet, and prepare for the systems integration later this year. The Board and executive management understand the importance of ensuring the integration efforts with MidWestOne are successful. One of the primary reasons why Nicolet carries the premium valuation it does is because we have been so successful with our past acquisitions – financially, culturally, and strategically. The MidWestOne merger is easily the largest Nicolet has completed in its 25 year history. In fact, the total assets of MidWestOne are approximately the same as Nicolet’s past nine bank acquisitions combined. Taking our time to ensure a successful integration is paramount to our future growth and success as a company.

Nicolet generates capital through its net income and retained earnings. Since organic growth will likely remain in the mid-single digits, we anticipate building capital very quickly. Additional M&A is unlikely in 2026 as we focus on MidWestOne. However, the Board still needs to decide how to allocate that capital, or to simply let it build. Share repurchases and increased dividends are two considerations for the Board (in fact, Nicolet began repurchasing stock in late January following the approval of the merger by MidWestOne shareholders). The Board and executive management believe that the intrinsic value of Nicolet is higher than the current share price, and as a result, believe repurchasing stock is an effective way of deploying capital to benefit existing shareholders.

The impact of the MidWestOne acquisition will certainly cause some additional noise in our financial results in 2026. The combination of merger accounting, one-time expenses, and some of the cost savings being delayed due to the systems integration mean the reported financial results may vary each quarter. However, we remain optimistic our core results (which remove the M&A noise) will continue to place us in the top quartile of publicly traded banks in the country. No matter which strategic paths Nicolet’s Board and executive team choose in 2026, the Company’s priority will always be to operate a highly profitable business that delivers meaningful value to its core stakeholders—customers, shareholders, and employees.

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Table 1: Earnings Summary and Selected Financial Data

At and for the years ended December 31,

Results of operations:

Earnings per Common Share (“EPS”):

Adjusted Net Income & Diluted EPS (Non-GAAP):

Adjusted diluted EPS (Non-GAAP) (1) $ 9.82 $ 7.83 $ 6.72

Common shares:

Year-End Balances:

Financial Ratios:

Tangible common equity to tangible assets (2) 9.94 9.33 7.98

(1) The adjusted net income and adjusted diluted EPS measures are non-GAAP financial measures that provide information that management believes is useful to investors in understanding our operating performance and trends and also aids investors in the comparison of Nicolet’s financial performance to the financial performance of peer banks. See section “Non-GAAP Financial Measures” below for a reconciliation of these financial measures.

(2) The ratios of tangible book value per common share, return on average tangible common equity, and tangible common equity to tangible assets are non-GAAP financial measures that exclude goodwill and other intangibles, net. These non-GAAP financial ratios have been included as management considers them to be useful metrics to analyze and evaluate financial condition and capital strength. See section “Non-GAAP Financial Measures” below for a reconciliation of these financial measures.

Non-GAAP Financial Measures

We identify “tangible book value per common share,” “return on average tangible common equity,” “tangible common equity to tangible assets” “adjusted net income,” and “adjusted diluted earnings per common share” as “non-GAAP financial measures.” In accordance with the SEC’s rules, we identify certain financial measures as non-GAAP financial measures if such financial measures exclude or include amounts in the most directly comparable measures calculated and presented in accordance with generally accepted accounting principles (“GAAP”) in effect in the United States in our statements of income, balance sheets, or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures, ratios, or statistical measures calculated using exclusively financial measures calculated in accordance with GAAP.

Management believes that the presentation of these non-GAAP financial measures (a) are important metrics used to analyze and evaluate our financial condition and capital strength and provide important supplemental information that contributes to a proper understanding of our operating performance and trends, (b) enables a more complete understanding of factors and trends affecting our business, and (c) allows investors to compare our financial performance to the financial performance of our peers and to evaluate our performance in a manner similar to management, the financial services industry, bank stock analysts, and bank regulators. Management uses non-GAAP measures as follows: in the preparation of our operating budgets, financial performance reporting, and in our presentation to investors of our performance. However, we acknowledge that these non-GAAP financial measures have a number of limitations. Limitations associated with non-GAAP financial measures include the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might calculate these measures differently. These disclosures should not be considered an alternative to our GAAP results. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is presented in the table below.

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Table 1A: Reconciliation of Non-GAAP Financial Measures

At and for the years ended December 31,

Adjusted net income reconciliation:

Adjustments:

Provision expense (1) — — 2,340

Contract termination charge — — 2,689

Tax impact of Wisconsin tax law change (3) — — 9,118

Diluted EPS:

Adjusted Diluted EPS (Non-GAAP) $ 9.82 $ 7.83 $ 6.72

Tangible assets:

Tangible common equity:

Tangible average common equity:

Note: Numbers may not sum due to rounding.

(1) Provision expense for 2023 is attributable to the expected loss on a bank subordinated debt investment.

(2) Includes the gains / (losses) on other assets and investments, as well as the impact of the March 2023 balance sheet repositioning which included the sale of $500 million (par value) U.S. Treasury held to maturity securities for a pre-tax loss of $38 million or an after-tax loss of $28 million, with the net proceeds used to reduce FHLB borrowings and the remainder held in investable cash.

(3) In July 2023, a new Wisconsin tax law change was signed which provided financial institutions with an exemption from state taxable income for interest, fees, and penalties earned on specific loans to existing Wisconsin-based business or agriculture purpose loans. The effective tax rate for periods prior to July 1, 2023, the effective date of this tax law change, assumed an effective tax rate of 25%, and periods subsequent to the effective date assumed an effective tax rate of 19.5%.

INCOME STATEMENT ANALYSIS

Net Interest Income

Net interest income is the primary source of Nicolet’s revenue, and is the difference between interest income on earning assets, such as loans and investment securities, and interest expense on interest-bearing liabilities, such as deposits and wholesale funding. Net interest income is directly impacted by the sensitivity of the balance sheet to changes in interest rates and by the amount, mix and composition of interest-earning assets and interest-bearing liabilities, including characteristics such as the fixed or variable nature of the financial instruments, contractual maturities, and repricing frequencies. Tax-equivalent net interest income is a non-GAAP measure, but is a preferred industry measurement of net interest income (and is used in calculating a net interest margin) as it enhances the comparability of net interest income arising from taxable and tax-exempt sources. Tables 2 and 3 present information to facilitate the review and discussion of selected average balance sheet items, tax-equivalent net interest income, interest rate spread, and net interest margin.

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Table 2: Average Balance Sheet and Net Interest Income Analysis - Tax-Equivalent Basis

Years Ended December 31,

ASSETS

Interest-earning assets

Investment securities:

LIABILITIES AND STOCKHOLDERS’ EQUITY

Interest-bearing liabilities

(1)Nonaccrual loans and loans held for sale are included in the daily average loan balances outstanding.

(2)The yield on tax-exempt loans and tax-exempt investment securities is computed on a tax-equivalent basis using a federal tax rate of 21% and adjusted for the disallowance of interest expense.

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Table 3: Volume/Rate Variance - Tax-Equivalent Basis

Volume Rate Net (1) Volume Rate Net (1)

Interest-earning assets

Investment securities:

Interest-bearing liabilities

(1)The change in interest due to both rate and volume has been allocated in proportion to the relationship of dollar amounts of change in each.

(2)Nonaccrual loans and loans held for sale are included in the daily average loan balances outstanding.

(3)The yield on tax-exempt loans and tax-exempt investment securities is computed on a tax-equivalent basis using a federal tax rate of 21% and adjusted for the disallowance of interest expense.

Comparison of 2025 versus 2024

At the beginning of 2024, the Federal Funds range was 5.25% to 5.50%. The Federal Reserve decreased short-term interest rates a total of 100 bps during the second half of 2024, resulting in a Federal Funds range of 4.25% to 4.50% at December 31, 2024. During the second half of 2025, the Federal Reserve decreased short-term interest rates a total of 75 bps, resulting in a Federal Funds range of 3.50% to 3.75% at December 31, 2025.

Tax-equivalent net interest income was $308 million for 2025, an increase of $38 million (14%) over 2024. The increase in tax-equivalent net interest income was attributable to net favorable volumes (which added $15 million) and net favorable rates (which increased net interest income $23 million).

Average interest-earning assets increased to $8.2 billion for 2025, $419 million (5%) higher than 2024. Average loans increased $307 million (5%) to $6.8 billion, on solid organic loan growth. Average investment securities increased $17 million, while other interest-earning assets increased $95 million, mostly investable cash from strong deposit growth. As a result, the mix of average interest-earning assets shifted to 83% loans, 11% investment securities, and 6% other interest-earning assets (mostly cash) for 2025, compared to 84%, 11%, and 5%, respectively, for 2024.

Average interest-bearing liabilities were $6.0 billion for 2025, an increase of $334 million (6%) from 2024. Average interest-bearing core deposits increased $387 million (8%), while average brokered deposits decreased $37 million, reflecting a shift in funding strategy. Wholesale funding decreased $16 million, mostly due to the early redemption of subordinated notes. The mix of average interest-bearing liabilities was 86% core deposits, 12% brokered deposits, and 2% other funding for 2025, compared to 84% core deposits, 13% brokered deposits, and 3% other funding in 2024.

The interest rate spread increased 37 bps between the years. The loan yield improved 14 bps to 6.19% for 2025, mostly from the repricing of new and renewed loans and the yield on investment securities increased 30 bps to 3.28%, while the yield on other interest-earning assets (mostly cash) decreased 77 bps, consistent with the Federal Reserve interest rate cuts. The cost of interest-bearing liabilities decreased 27 bps to 2.76% for 2025, also reflecting the Federal Reserve interest rate cuts. The contribution from net free funds decreased 8 bps, mostly due to the lower value in the current interest rate environment. As a result, the net interest margin was 3.76% for 2025, up 29 bps compared to 3.47% for 2024.

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Provision for Credit Losses

The provision for credit losses for 2025 was $4.3 million (comprised of $4.3 million related to the ACL-Loans, partly offset by a $0.1 million reduction related to the ACL on unfunded commitments). Comparatively, the 2024 provision for credit losses was $3.9 million (comprised of $3.8 million related to the ACL-Loans and $0.1 million for the ACL on unfunded commitments), and the 2023 provision for credit losses was $5.0 million (comprised of $2.7 million related to the ACL-Loans and $2.3 million for the ACL on securities AFS). Asset quality trends have been solid and net charge-offs were negligible for all years.

The provision for credit losses is predominantly a function of Nicolet’s methodology and judgment as to qualitative and quantitative factors used to determine the appropriateness of the ACL-Loans. The appropriateness of the ACL-Loans is affected by changes in the size and character of the loan portfolio, changes in levels of collateral-dependent and other nonperforming loans, historical losses and delinquencies in each portfolio segment, the risk inherent in specific loans, concentrations of loans to specific borrowers or industries, existing and future economic conditions, the fair value of underlying collateral, and other factors which could affect potential credit losses. For additional information regarding asset quality and the ACL-Loans, see “BALANCE SHEET ANALYSIS — Loans,” and “— Allowance for Credit Losses - Loans” and “—Nonperforming Assets.”

Noninterest Income

Table 4: Noninterest Income

(in thousands) Years Ended December 31, Change From Prior Year

N/M means not meaningful.

Comparison of 2025 versus 2024

Noninterest income was $86 million for 2025, an increase of $3 million from 2024, with growth in most core noninterest income categories, partly offset by lower net asset gains (losses). Excluding net asset gains (losses), noninterest income for 2025 was $84 million, a $6 million (8%) increase over 2024. Notable contributions to the change in noninterest income were:

•Wealth management fee income was $30 million for 2025, up $2 million (8%) from 2024, including favorable market-related changes, as well as growth in accounts and assets under management.

•Mortgage income includes net gains received from the sale of residential real estate loans into the secondary market, capitalized mortgage servicing rights (“MSRs”), servicing fees net of MSR amortization, fair value marks on the mortgage interest rate lock commitments and forward commitments (“mortgage derivatives”), and MSR valuation changes, if any. Net mortgage income was $12 million for 2025, up $2 million (18%) between the years, mostly due to higher secondary market volumes and the related gains on sales. See also “Off-Balance Sheet Arrangements, Lending-Related Commitments and Contractual Obligations” and Note 6, “Goodwill and Other Intangibles and Servicing Rights” in the Notes to Consolidated Financial Statements, under Part II, Item 8.

•Service charges on deposit accounts were $8 million, up $1 million (11%) over 2024, on growth in both accounts and account analysis fees.

•Card interchange income grew $1 million (7%) to $15 million in 2025 largely due to higher volume and activity.

•BOLI income increased $1 million (17%) to $6 million for 2025, attributable to higher average balances from the $11.5 million new BOLI purchased in mid-2024 and improvements in BOLI assets linked to market performance.

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•The Company sponsors a nonqualified deferred compensation (“NQDC”) plan for certain employees, that fluctuates based upon market valuations of the underlying plan assets. See also “Noninterest Expense” for the offsetting fair value change to the NQDC plan liabilities and Note 10, “Employee and Director Benefit Plans” in the Notes to Consolidated Financial Statements, under Part II, Item 8, for additional information on the NQDC plan.

•Other income declined $1 million to $8 million for 2025, largely due to timing of card incentive income, as well as lower swap and broker fees.

•Net asset gains of $1 million in 2025 were primarily attributable to favorable fair value marks on equity securities. Net asset gains of $4 million in 2024 were primarily attributable to gains of $2 million on the sale of available for sale securities and other investments, $1 million of favorable fair value marks on equity securities, and a $1 million gain on the early extinguishment on Nicolet subordinated notes. Additional information on the net gains is also included in Note 16, “Asset Gains (Losses), Net,” in the Notes to Consolidated Financial Statements, under Part II, Item 8.

Noninterest Expense

Table 5: Noninterest Expense

($ in thousands) Years Ended December 31, Change From Prior Year

Average full-time equivalent employees 959 955 953 4 — % 2 — %

N/M means not meaningful.

Comparison of 2025 versus 2024

Noninterest expense was $201 million for 2025, an increase of $9 million (5%) over 2024. Personnel costs increased $7 million (6%), while non-personnel expenses combined increased $3 million (3%) from 2024. Notable contributions to the change in noninterest expense were:

•Personnel expense was $115 million for 2025, an increase of $7 million (6%) over 2024. Salary expense increased $7 million (8%) over 2024, reflecting merit increases between the years and higher incentive compensation commensurate with current year earnings. Fringe benefits were minimally changed with lower health care costs offset by higher 401k expenses. Personnel expense was also impacted by the change in the fair value of the NQDC plan liabilities. See also “Noninterest Income” for the offsetting fair value change to the NQDC plan assets and Note 10, “Employee and Director Benefit Plans” in the Notes to Consolidated Financial Statements, under Part II, Item 8, for additional information on the NQDC plan.

•Occupancy, equipment and office expense was $37 million for 2025, up $1 million (4%) from 2024, due to higher occupancy-related costs (including increases in cleaning, snowplowing, building depreciation), and office expenses (mostly additional costs for software and technology solutions), as well as a $0.4 million lease termination charge.

•Data processing expense was $19 million for 2025, up $1 million (5%) from 2024, mostly due to volume-based increases in core and card processing charges.

•Intangible amortization decreased $1 million (17%) between the years, due to lower amortization from the aging intangibles.

Income Taxes

Income tax expense was $36 million (effective tax rate of 19.4%) for 2025, compared to $31 million (effective tax rate of 20.0%) for 2024. The change in income tax was mostly due to higher pretax earnings.

The accounting for income taxes requires deferred income taxes to be analyzed to determine if a valuation allowance is required. A valuation allowance is required if it is more likely than not that some portion of the deferred tax asset will not be realized. This analysis involves the use of estimates and assumptions concerning accounting pronouncements and federal and state tax codes. The Company had a $18 million valuation allowance at December 31, 2025, compared to a valuation allowance of $16 million at

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December 31, 2024. The Company’s income taxes accounting policy is described in Note 1, “Nature of Business and Significant Accounting Policies,” and additional disclosures relative to income taxes are included in Note 13, “Income Taxes” in the Notes to Consolidated Financial Statements, under Part II, Item 8.

BALANCE SHEET ANALYSIS

Loans

Nicolet services a diverse customer base primarily throughout Wisconsin, Michigan and Minnesota. The Company concentrates on originating loans in its local markets and assisting current loan customers. Nicolet actively utilizes government loan programs such as those provided by the U.S. Small Business Administration (“SBA”) and the U.S. Department of Agriculture’s Farm Service Agency (“FSA”). In addition to the discussion that follows, accounting policies, general loan portfolio characteristics, and credit risk are described in Note 1, “Nature of Business and Significant Accounting Policies,” and additional loan related disclosures are included in Note 4, “Loans, Allowance for Credit Losses - Loans, and Credit Quality,” in the Notes to Consolidated Financial Statements, under Part II, Item 8.

An active credit risk management process is used to ensure that sound and consistent credit decisions are made. The credit management process is regularly reviewed and has been modified over the past several years to further strengthen the controls. Factors that are important to managing overall credit quality are sound loan underwriting and administration, systematic monitoring of existing loans and commitments, effective loan review on an ongoing basis, early problem loan identification and remedial action to minimize losses, an appropriate ACL-Loans, and sound nonaccrual and charge-off policies.

Table 6: Period End Loan Composition

(in thousands) Amount % ofTotal Amount % ofTotal Amount % ofTotal

As noted in Table 6 above, the loan portfolio at December 31, 2025 was 77% commercial-based and 23% retail-based, a slight shift in the underlying loan composition mix compared to December 31, 2024. Commercial-based loans are considered to have more inherent risk of default than retail-based loans, in part because of the broader list of factors that could impact a commercial borrower negatively. In addition, the commercial balance per borrower is typically larger than that for retail-based loans, implying higher potential losses on an individual customer basis. Credit risk on commercial-based loans is largely influenced by general economic conditions and the resulting impact on a borrower’s operations or on the value of underlying collateral, if any.

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Total loans were $6.8 billion at December 31, 2025, an increase of $210 million (3%), compared to total loans of $6.6 billion at December 31, 2024, with growth in agricultural, commercial and industrial, and construction loans. At December 31, 2025, agricultural and commercial and industrial loans represented the largest segments of Nicolet’s loan portfolio, at 21% and 20%, respectively, of the total loan portfolio. The next largest segments were CRE investment and residential first mortgage, with each representing 17% of the total loan portfolio. The loan portfolio is widely diversified and included the following industries: manufacturing, wholesaling, paper, packaging, food production and processing, agriculture, forest products, hospitality, retail, service, and businesses supporting the general building industry. The following chart provides the distribution of our commercial loan portfolio at December 31, 2025.

Commercial Loan Portfolio by Industry Type (based on NAICS codes)

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Table 7: Loan Maturity Distribution

The following table presents the maturity distribution of the loan portfolio at December 31, 2025.

(in thousands) Loan Maturity

Percent by maturity distribution 34 % 37 % 13 % 16 % 100 %

Fixed rate loans:

Floating rate loans:

* The residential construction loans with a loan maturity after five years represent a construction to permanent loan product.

Allowance for Credit Losses - Loans

In addition to the discussion that follows, accounting policies for the allowance for credit losses - loans are described in Note 1, “Nature of Business and Significant Accounting Policies,” and additional ACL-Loans disclosures are included in Note 4, “Loans, Allowance for Credit Losses - Loans, and Credit Quality,” in the Notes to Consolidated Financial Statements, under Part II, Item 8.

Credit risks within the loan portfolio are inherently different for each loan type. Credit risk is controlled and monitored through the use of lending standards, a thorough review of potential borrowers, and ongoing review of loan payment performance. Active asset quality administration, including early problem loan identification and timely resolution of problems, aids in the management of credit risk and minimization of loan losses. Loans charged off are subject to continuous review, and specific efforts are taken to achieve maximum recovery of principal, interest, and related expenses. For additional information regarding nonperforming assets see “BALANCE SHEET ANALYSIS – Nonperforming Assets.”

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The ACL-Loans represents management’s estimate of expected credit losses in the Company’s loan portfolio at the balance sheet date. To assess the overall appropriateness of the ACL-Loans, management applies an allocation methodology which focuses on evaluation of qualitative and environmental factors, including but not limited to: (i) evaluation of facts and issues related to specific loans; (ii) management’s ongoing review and grading of the loan portfolio; (iii) consideration of historical loan loss and delinquency experience on each portfolio segment; (iv) trends in past due and nonaccrual loans; (v) the risk characteristics of the various loan segments; (vi) changes in the size and character of the loan portfolio; (vii) concentrations of loans to specific borrowers or industries; (viii) existing economic conditions; (ix) the fair value of underlying collateral; and (x) other qualitative and quantitative factors which could affect expected credit losses. Assessing these factors involves significant judgment; therefore, management considers the ACL-Loans a critical accounting estimate, as further discussed under “Critical Accounting Estimates – Allowance for Credit Losses - Loans.”

Management performs ongoing intensive analysis of the loan portfolio to allow for early identification of customers experiencing financial difficulties, maintains prudent underwriting standards, understands the economy in its markets, and considers the trend of deterioration in loan quality in establishing the level of the ACL-Loans. In addition, various regulatory agencies periodically review the ACL-Loans, and could require the Company to make additions to the ACL-Loans or require that certain loan balances be charged off or downgraded into classified loan categories when their credit evaluations differ from those of management based on their judgments of collectability from information available to them at the time of their examination.

At December 31, 2025, the ACL-Loans was $69 million (representing 1.01% of period end loans) compared to $66 million (representing 1.00% of period end loans) at December 31, 2024. The increase in the ACL-Loans during both 2025 and 2024 was due to solid organic loan growth. Net charge-offs remain negligible. The components of the ACL-Loans are detailed further in Tables 8 and 9 below.

Table 8: Allowance for Credit Losses - Loans

(in thousands) Years Ended December 31,

Allowance for credit losses - loans:

Net charge-offs:

Agricultural (65) — (63)

CRE investment — — —

Construction & land development — — —

Residential construction — — —

Residential first mortgage (97) 33 (2)

Residential junior mortgage 2 9 (95)

Ratio of net charge-offs to average loans by loan composition:

Commercial & industrial 0.10 % 0.06 % (0.01) %

Owner-occupied CRE — % (0.01) % 0.05 %

Agricultural — % — % 0.01 %

CRE investment — % — % — %

Construction & land development — % — % — %

Residential construction — % — % — %

Residential first mortgage 0.01 % — % — %

Residential junior mortgage — % — % 0.05 %

Total net charge-offs to average loans 0.03 % 0.02 % 0.01 %

The allocation of the ACL-Loans by loan category for each of the past three years is shown in Table 9. The largest portions of the ACL-Loans were allocated to commercial & industrial loans and CRE investment loans, representing 24%, and 22%, respectively, of the ACL-Loans at December 31, 2025, which was unchanged from December 31, 2024. The next largest portion of the ACL-Loans was allocated to agricultural loans, representing 14% and 15%, of the ACL-Loans at December 31, 2025 and December 31, 2024, respectively. This change in ACL-Loans allocation was attributable to changes in current and forecasted risk trends within loan categories, as well as changes in loan portfolio composition.

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Table 9: Allocation of the Allowance for Credit Losses - Loans

Nonperforming Assets

As part of its overall credit risk management process, management is committed to an aggressive problem loan identification philosophy. This philosophy has been implemented through the ongoing monitoring and review of all pools of risk in the loan portfolio to identify problem loans early and minimize the risk of loss. In addition to the discussion that follows, accounting policies for loans and the ACL-Loans are described in Note 1, “Nature of Business and Significant Accounting Policies,” and additional credit quality disclosures are included in Note 4, “Loans, Allowance for Credit Losses - Loans, and Credit Quality,” in the Notes to Consolidated Financial Statements, under Part II, Item 8.

Nonperforming loans are considered one indicator of potential future loan losses. Nonperforming loans are defined as nonaccrual loans and loans 90 days or more past due but still accruing interest. Loans are generally placed on nonaccrual status when contractually past due 90 days or more as to interest or principal payments. Additionally, whenever management becomes aware of facts or circumstances that may adversely impact the collectability of principal or interest on loans, it is management’s practice to place such loans on nonaccrual status immediately. Nonperforming assets include nonperforming loans and other real estate owned. At December 31, 2025, nonperforming assets were $32 million and represented 0.35% of total assets, compared to $29 million or 0.33% of total assets at December 31, 2024.

The level of potential problem loans is another predominant factor in determining the relative level of risk in the loan portfolio and in determining the appropriate level of the ACL-Loans. Potential problem loans are generally defined by management to include loans rated as Substandard by management but that are in performing status; however, there are circumstances present which might adversely affect the ability of the borrower to comply with present repayment terms. The decision of management to include performing loans in potential problem loans does not necessarily mean that Nicolet expects losses to occur, but that management recognizes a higher degree of risk associated with these loans. The loans that have been reported as potential problem loans are predominantly commercial-based loans covering a diverse range of businesses and real estate property types. Potential problem loans were $71 million and $68 million at December 31, 2025 and 2024, respectively. Potential problem loans require heightened management review given the pace at which a credit may deteriorate, the potential duration of asset quality stress, and uncertainty around the magnitude and scope of economic stress that may be felt by Nicolet’s customers and on underlying real estate or collateral values.

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Table 10: Nonperforming Assets

Nonperforming loans:

Construction & land development — — 161

Residential construction — — —

Accruing loans past due 90 days or more — — —

OREO:

Commercial real estate owned $ 70 $ 80 $ 305

Residential real estate owned — 16 154

Nonaccrual loans (included above) covered by guarantees $ 10,483 $ 7,463 $ 5,785

Ratios:

Nonperforming loans to total loans 0.46 % 0.43 % 0.42 %

NPAs to total loans plus OREO 0.47 % 0.44 % 0.44 %

ACL-Loans to nonperforming loans 217 % 233 % 239 %

Investment Securities Portfolio

The investment securities portfolio is intended to provide Nicolet with adequate liquidity, flexible asset/liability management and a source of stable income. The portfolio is structured with minimal credit exposure to Nicolet. All investment securities are classified at the time of purchase as available for sale (“AFS”) or held to maturity (“HTM”). In addition to the discussion that follows, the investment securities portfolio accounting policies are described in Note 1, “Nature of Business and Significant Accounting Policies,” and additional disclosures are included in Note 3, “Securities and Other Investments,” in the Notes to Consolidated Financial Statements, under Part II, Item 8.

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At December 31, 2025, the investment securities portfolio totaled $860 million (representing 9% of total assets), compared to investment securities of $806 million (representing 9% of total assets) at December 31, 2024, all classified as securities AFS. The investment securities portfolio increased $53 million (7%) from December 31, 2024, and included a shift in mix, from corporate debt securities and state, county, and municipals to mortgage-backed securities. The fair value of the total securities AFS portfolio was an unrealized loss of $34 million at December 31, 2025, compared to an unrealized loss of $66 million at December 31, 2024.

Nicolet also had other investments of $63 million and $62 million at December 31, 2025 and 2024, respectively, consisting primarily of capital stock in the Federal Reserve and the Federal Home Loan Bank (“FHLB”) (required as members of the Federal Reserve Bank System and the FHLB System), equity securities with readily determinable fair values, and to a lesser degree equity investments in other private companies. The FHLB and Federal Reserve investments are “restricted” in that they can only be sold back to the respective institutions or another member institution at par, and are thus not liquid, have no ready market or quoted market value, and are carried at cost. The private company equity investments have no quoted market prices, and are carried at cost less impairment charges, if any. The other investments are evaluated periodically for impairment, considering financial condition and other available relevant information.

Table 11: Investment Securities Portfolio Maturity Distribution (1)

(1) The yield on tax-exempt investment securities is computed on a tax-equivalent basis using a federal tax rate of 21% adjusted for the disallowance of interest expense.

Deposits

Deposits represent Nicolet’s largest source of funds, and provide a stable, lower-cost funding source. Deposit levels may be impacted by competition with other bank and nonbank institutions, as well as with a number of non-deposit investment alternatives available to depositors, such as mutual funds, money market funds, annuities, and other brokerage investment products. Deposit challenges include competitive deposit product features, price changes on deposit products given movements in the interest rate environment and other competitive pricing pressures, and customer preferences regarding higher rate deposit products or non-deposit investment alternatives. Additional disclosures on deposits are included in Note 8, “Deposits,” in the Notes to Consolidated Financial Statements, under Part II, Item 8. See Table 2 for information on average deposit balances and deposit rates.

Table 12: Period End Deposit Composition

Amount % ofTotal Amount % ofTotal Amount % ofTotal

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Total deposits were $7.7 billion at December 31, 2025, a $327 million (4%) increase over year-end 2024, including a $497 million (7%) increase in customer deposits (core), partly offset by a $170 million reduction in brokered deposits. On average, deposits grew $349 million (5%) between 2025 and 2024 (as detailed in Table 2). Average customer deposits (core) increased $386 million, while average brokered deposits decreased $37 million from the prior year.

At December 31, 2025, Nicolet had $433 million of time deposits that exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $250,000. The following table provides information on the maturity distribution of those time deposits, including the portion of those time deposits in excess of the FDIC insurance limits (over $250,000) as of December 31, 2025.

Table 13: Maturity Distribution of Uninsured Time Deposits

Estimated total uninsured deposits were $2.5 billion (representing 32% of total deposits) and $2.2 billion (representing 30% of total deposits) as of December 31, 2025 and 2024, respectively.

Other Funding Sources

Other funding sources include short-term and long-term borrowings. Short-term borrowings (with an original contractual maturity of one year or less) generally may consist of short-term FHLB advances, customer repurchase agreements or federal funds purchased. Long-term borrowings (with an original contractual maturity of over one year) include FHLB advances, junior subordinated debentures, and subordinated notes. The interest on all long-term borrowings is current.

There were no short-term borrowings outstanding at either December 31, 2025 or December 31, 2024. Long-term borrowings were $135 million and $161 million at December 31, 2025 and 2024, respectively. See Note 9, “Short and Long-Term Borrowings,” of the Notes to Consolidated Financial Statements under Part II, Item 8 for additional disclosures and see section “Liquidity Management,” for information on available funding sources at December 31, 2025.

RISK MANAGEMENT AND CAPITAL

Liquidity Management

Liquidity management refers to the ability to ensure that adequate liquid funds are available to meet the current and future cash flow obligations arising in the daily operations of the Company. These cash flow obligations include the ability to meet the commitments to borrowers for extensions of credit, accommodate deposit cycles and trends, fund capital expenditures, pay dividends to stockholders (if any), and satisfy other operating expenses. The Company’s most liquid assets are cash and due from banks and interest-earning deposits, which totaled $660 million and $536 million at December 31, 2025 and 2024, respectively. Balances of these liquid assets are dependent on our operating, investing, and financing activities during any given period.

The $124 million increase in cash and cash equivalents since year-end 2024 included $154 million net cash provided by operating activities (mostly earnings) and $201 million net cash provided by financing activities (mostly strong deposit growth partly offset by repayments of borrowings, common stock repurchases and cash dividends), partially offset by $231 million net cash used in investing activities (mostly to fund loan growth and investment purchases). As of December 31, 2025, management believed that adequate liquidity existed to meet all projected cash flow obligations.

Nicolet’s primary sources of funds include the core deposit base, repayment and maturity of loans, investment securities calls, maturities, and sales, and procurement of brokered deposits or other wholesale funding. At December 31, 2025, approximately 58% of the investment securities portfolio was pledged as collateral to secure public deposits and borrowings, as applicable, and for liquidity or other purposes as required by regulation. Liquidity sources available to the Company at December 31, 2025, are presented in Table 14 below.

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Table 14: Liquidity Sources

(in millions) December 31, 2025

Fed Funds Lines $ 175

Brokered Capacity 1,352

Total Uncollateralized Lines 1,527

Securities Collateral Available 512

FHLB Borrowing Availability 624

Fed Discount Window 12

Total Collateralized Lines 1,148

Total Liquidity Funding Availability $ 2,675

Management is committed to the Parent Company being a source of strength to the Bank and its other subsidiaries, and therefore, regularly evaluates capital and liquidity positions of the Parent Company in light of current and projected needs, growth or strategies. The Parent Company uses cash for normal expenses, dividend payments, debt service requirements and, when opportune, for common stock repurchases, repayment of debt, or investment in other strategic actions such as mergers or acquisitions. At December 31, 2025, the Parent Company had $188 million in cash. Additional cash sources available to the Parent Company include access to the public or private markets to issue new equity, subordinated notes or other debt. Dividends from the Bank and, to a lesser extent, stock option exercises, represent significant sources of cash flows for the Parent Company. The Bank is required by federal law to obtain prior approval of the OCC for payments of dividends if the total of all dividends declared by the Bank in any year will exceed certain thresholds, as more fully described in “Business—Regulation of the Bank – Payment of Dividends” under Part I, Item 1, and in Note 17, “Regulatory Capital Requirements,” in the Notes to the Consolidated Financial Statements under Part II, Item 8. Management does not believe that regulatory restrictions on dividends from the Bank will adversely affect its ability to meet its cash obligations.

Interest Rate Sensitivity Management and Impact of Inflation

A reasonable balance between interest rate risk, credit risk, liquidity risk and maintenance of yield, is highly important to Nicolet’s business success and profitability. As an ongoing part of its financial strategy and risk management, Nicolet attempts to understand and manage the impact of fluctuations in market interest rates on its net interest income. The consolidated balance sheet consists mainly of interest-earning assets (loans, investments, and cash) which are primarily funded by interest-bearing liabilities (deposits and other borrowings). Such financial instruments have varying levels of sensitivity to changes in market rates of interest. Market rates are highly sensitive to many factors beyond our control, including but not limited to general economic conditions and policies of government and regulatory authorities. Our operating income and net income depend, to a substantial extent, on “rate spread” (i.e., the difference between the income earned on loans, investments and other earning assets and the interest expense paid to obtain deposits and other funding liabilities).

Asset-liability management policies establish guidelines for acceptable limits on the sensitivity to changes in interest rates on earnings and market value of assets and liabilities. Such policies are set and monitored by management and the Asset and Liability Committee.

To understand and manage the impact of fluctuations in market interest rates on net interest income, Nicolet measures its overall interest rate sensitivity through a net interest income analysis, which calculates the change in net interest income in the event of hypothetical changes in interest rates under different scenarios versus a baseline scenario. Such scenarios can involve static balance sheets, balance sheets with projected growth, parallel (or non-parallel) yield curve slope changes, immediate or gradual changes in market interest rates, and one-year or longer time horizons. The simulation modeling uses assumptions involving market spreads, prepayments of rate-sensitive instruments, renewal rates on maturing or new loans, deposit retention rates, and other assumptions.

Among other scenarios, Nicolet assessed the impact on net interest income in the event of a gradual +/-100 bps and +/-200 bps change in market rates (parallel to the change in prime rate) over a one-year time horizon to a static (flat) balance sheet. The results provided include the liquidity measures mentioned above and reflect the current interest rate environment. The interest rate scenarios are used for analytical purposes only and do not necessarily represent management’s view of future market interest rate movements. Based on financial data at December 31, 2025 and 2024, the projected changes in net interest income over a one-year time horizon, versus the baseline, are presented in Table 15 below. The results were in compliance with Nicolet’s policy guidelines.

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Table 15: Interest Rate Sensitivity

200 bps decrease in interest rates (3.8) % (2.5) %

100 bps decrease in interest rates (2.0) % (1.3) %

100 bps increase in interest rates 2.1 % 1.3 %

200 bps increase in interest rates 4.2 % 2.6 %

Actual results may differ from these simulated results due to timing, magnitude and frequency of interest rate changes, as well as changes in market conditions and their impact on customer behavior and management strategies.

The effect of inflation on a financial institution differs significantly from the effect on an industrial company. While a financial institution’s operating expenses, particularly salary and employee benefits, are affected by general inflation, the asset and liability structure of a financial institution consists largely of monetary items. Monetary items, such as cash, investments, loans, deposits and borrowings, are those assets and liabilities which are or will be converted into a fixed number of dollars regardless of changes in prices. As a result, changes in interest rates have a more significant impact on a financial institution’s performance than does general inflation. Inflation may also have impacts on the Bank’s customers, on businesses and consumers and their ability or willingness to invest, save or spend, and perhaps on their ability to repay loans. As such, there would likely be impacts on the general appetite of banking products and the credit health of the Bank’s customer base.

Capital

Management regularly reviews the adequacy of its capital to ensure that sufficient capital is available for current and future needs and is in compliance with regulatory guidelines. The capital position and strategies are actively reviewed in light of perceived business risks associated with current and prospective earning levels, liquidity, asset quality, economic conditions in the markets served, and level of returns available to shareholders. Management intends to maintain an optimal capital and leverage mix for growth and for shareholder return.

Capital balances and changes in capital are presented in the Consolidated Statements of Changes in Stockholders’ Equity in Part II, Item 8. Further discussion of capital components is included in Note 12, “Stockholders’ Equity,” and a summary of dividend restrictions, as well as regulatory capital amounts and ratios for Nicolet and the Bank is presented in Note 17, “Regulatory Capital Requirements,” of the Notes to Consolidated Financial Statements under Part II, Item 8.

The Company’s and the Bank’s regulatory capital ratios remain above minimum regulatory ratios, including the capital conservation buffer. At December 31, 2025, the Bank’s regulatory capital ratios qualify the Bank as well-capitalized under the prompt-corrective action framework. This strong base of capital has allowed Nicolet to be opportunistic in strategic growth. For a discussion of the regulatory restrictions applicable to the Company and the Bank, see section “Business-Regulation of Nicolet” and “Business-Regulation of the Bank,” included within Part I, Item 1. A summary of Nicolet’s and the Bank’s regulatory capital amounts and ratios, as well as selected capital metrics are presented in Table 16.

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Table 16: Capital

Company Stock Repurchases: *

Common stock repurchased during the year (dollars) $ 76,561 $ 10,134

Common stock repurchased during the year (shares) 646,002 92,440

Company Risk-Based Capital:

Total capital ratio 14.8 % 14.3 %

Common equity tier 1 capital ratio 12.0 % 11.4 %

Bank Risk-Based Capital:

Total capital ratio 12.1 % 11.7 %

Common equity tier 1 capital ratio 11.2 % 10.8 %

Tier 1 leverage ratio 9.5 % 9.5 %

* Reflects only the common stock repurchased under Board authorizations.

In managing capital for optimal return, we evaluate capital sources and uses, pricing and availability of our stock in the market, and alternative uses of capital (such as the level of organic growth or acquisition opportunities, dividends, or repayment of equity-equivalent debt) in light of strategic plans. Through an ongoing repurchase program, the Board has authorized the repurchase of Nicolet’s common stock as an alternative use of capital. At December 31, 2025, there remained $19 million authorized under this repurchase program, as modified, to be utilized from time to time to repurchase shares in the open market, through block transactions or in private transactions. Subsequently, on January 20, 2026, the Board approved a $60 million increase to the common stock repurchase authorization.

Off-Balance Sheet Arrangements, Lending-Related Commitments and Contractual Obligations

Nicolet is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. 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. At December 31, 2025, interest rate lock commitments to originate residential mortgage loans held for sale of $28 million (included in the commitments to extend credit) and forward commitments to sell residential mortgage loans held for sale of $24 million are considered derivative instruments. Further information and discussion of these commitments is included in Note 14, “Commitments and Contingencies” of the Notes to Consolidated Financial Statements, under Part II, Item 8.

The table below outlines the principal amounts and timing of Nicolet’s contractual obligations. The amounts presented below exclude amounts due for interest, if applicable, and include any unamortized premiums / discounts or other similar carrying value adjustments. As of December 31, 2025, Nicolet had the following contractual obligations. Further discussion of the nature of each obligation is included in the referenced note of the Notes to Consolidated Financial Statements, under Part II, Item 8.

Table 17: Contractual Obligations

(in thousands) Note Maturity by Years

Reference Total 1 or less 1-3 3-5 Over 5

Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates, assumptions or judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions are based on historical experience, current information, and other factors deemed to be relevant; accordingly, as this information changes, actual results could differ from those estimates. Nicolet considers accounting estimates to be critical to reported financial results if the accounting estimate requires management to make assumptions

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about matters that are highly uncertain and different estimates that management reasonably could have used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on the financial statements. The accounting estimate we consider to be critical is the determination of the allowance for credit losses. In addition to the discussion that follows, the accounting policies related to this critical estimate is included in Note 1, “Nature of Business and Significant Accounting Policies,” in the Notes to Consolidated Financial Statements, under Part II, Item 8.

Allowance for Credit Losses - Loans

Management’s evaluation process used to determine the appropriateness of the ACL-Loans is inherently subjective as it requires material estimates and assumptions. This evaluation process involves gathering and interpreting many qualitative and quantitative factors which could affect our estimate of lifetime expected credit losses. Because interpretation and analysis involve judgment, current economic or business conditions can change, and future events are inherently difficult to predict, the anticipated amount of estimated credit losses and therefore the appropriateness of the ACL-Loans could change significantly.

The allowance methodology applied by Nicolet is designed to assess the appropriateness of the ACL-Loans and includes allocations for individually evaluated credit-deteriorated loans and loss factor allocations for all remaining loans, with a component primarily based on historical loss rates and a component primarily based on other qualitative and environmental factors. The methodology includes evaluation and consideration of several factors, including but not limited to: management’s ongoing review and grading of the loan portfolio, evaluation of facts and issues related to specific loans, consideration of historical loan loss and delinquency experience on each portfolio segment, trends in past due and nonaccrual loans, the risk characteristics of specific loans or various loan segments, changes in the size and character of the loan portfolio, concentrations of loans to specific borrowers or industries, the fair value of underlying collateral, existing economic conditions, and other qualitative and quantitative factors which could affect expected credit losses. In addition, the model considers reasonable and supportable economic forecasts to assess the collectability of future cash flows. While management uses the best information available to make its evaluation, future adjustments to the ACL-Loans may be necessary if there are significant changes in economic conditions (both current and forecast) or circumstances underlying the collectability of loans. Because each of the criteria used is subject to change, the allocation of the ACL-Loans is made for analytical purposes and is not necessarily indicative of the trend of future credit losses in any particular loan category. The ACL-Loans is available to absorb losses from any segment of the loan portfolio. Management believes the ACL-Loans is appropriate at December 31, 2025. The allowance analysis is reviewed by the Board on a quarterly basis in compliance with regulatory requirements.

Consolidated net income and stockholders’ equity could be affected if management’s estimate of the ACL-Loans necessary to cover expected credit losses is subsequently materially different, requiring a change in the level of provision for credit losses to be recorded. While management uses currently available information to recognize expected credit losses on loans, future adjustments to the ACL-Loans may be necessary based on newly received appraisals, updated commercial customer financial statements, rapidly deteriorating customer cash flows, and changes in economic conditions or forecasts that affect Nicolet’s customers. As an integral part of their examination process, federal regulatory agencies also review the ACL-Loans. Such agencies may require additions to the ACL-Loans or may require that certain loan balances be charged-off or downgraded into classified loan categories when their credit evaluations differ from those of management based on their judgments about information available to them at the time of their examination.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For additional disclosure, see section, “Interest Rate Sensitivity Management and Impact of Inflation,” within Management’s Discussion and Analysis of Financial Condition and Results of Operation under Part II, Item 7.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

NICOLET BANKSHARES, INC.Consolidated Balance Sheets

Assets

Securities available for sale (“AFS”), at fair value 859,834 806,415

Allowance for credit losses - loans (“ACL-Loans”) (68,806) (66,322)

Liabilities and Stockholders’ Equity

Liabilities:

Accrued interest payable and other liabilities 61,814 58,826

Stockholders’ Equity:

Accumulated other comprehensive income (loss) (23,542) (48,568)

Preferred shares issued and outstanding — —

See accompanying Notes to Consolidated Financial Statements.

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(In thousands, except share and per share data) 2025 2024 2023

Interest income:

Investment securities:

Interest expense:

Short-term borrowings 1 2 4,794

Noninterest income:

Deferred compensation plan asset market valuations 2,919 1,198 1,937

Noninterest expense:

Earnings per common share:

Weighted average common shares outstanding:

See accompanying Notes to Consolidated Financial Statements.

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Other comprehensive income (loss), net of tax:

Unrealized gains (losses) on securities AFS:

Net realized (gains) losses included in income (126) (968) 3,313

Total other comprehensive income (loss), net of tax 25,026 4,605 4,297

See accompanying Notes to Consolidated Financial Statements.

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Comprehensive income:

Other comprehensive income (loss) — — — 4,297 4,297

Stock-based compensation expense — 6,438 — — 6,438

Cash dividends on common stock, $0.75 per share — — (11,119) — (11,119)

Issuance of common stock in stock-based compensation plans 3 10,529 — — 10,532

Purchase of common stock in stock-based compensation plans — (4,509) — — (4,509)

Issuance of common stock — 844 — — 844

Purchase and retirement of common stock (1) (1,520) — — (1,521)

Comprehensive income:

Other comprehensive income (loss) — — — 4,605 4,605

Stock-based compensation expense — 6,635 — — 6,635

Cash dividends on common stock, $1.09 per share — — (16,548) — (16,548)

Issuance of common stock in stock-based compensation plans 6 26,661 — — 26,667

Purchase of common stock in stock-based compensation plans — (1,975) — — (1,975)

Issuance of common stock — 585 — — 585

Purchase and retirement of common stock (1) (10,136) — — (10,137)

Comprehensive income:

Other comprehensive income (loss) — — — 25,026 25,026

Stock-based compensation expense — 7,340 — — 7,340

Cash dividends on common stock, $1.24 per share — — (18,659) — (18,659)

Issuance of common stock in stock-based compensation plans 2 9,558 — — 9,560

Purchase of common stock in stock-based compensation plans (1) (12,728) (12,729)

Issuance of common stock — 101 — — 101

Purchase and retirement of common stock (7) (76,554) — — (76,561)

See accompanying Notes to Consolidated Financial Statements.

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Cash Flows From Operating Activities:

Increase in cash surrender value of life insurance (6,014) (5,448) (4,411)

Cash Flows From Investing Activities:

Proceeds from sales of securities HTM — — 460,051

Proceeds from calls, paydowns, and maturities of securities HTM — — 2,915

Proceeds from sales of premises and equipment 2,324 399 365

Net (increase) decrease in other real estate 406 37 12,151

Purchase of BOLI — (11,500) —

Proceeds from redemption of BOLI — — 306

Cash Flows From Financing Activities:

Net increase (decrease) in short-term borrowings — — (317,000)

Proceeds from issuance of common stock, net 101 585 844

Supplemental Disclosures of Cash Flow Information:

Transfer of securities from HTM to AFS — — 178,391

Transfer of loans and bank premises to other real estate owned 395 125 985

* Cash and cash equivalents at December 31, 2025 included restricted cash totaling $0.5 million, while cash and cash equivalents at December 31, 2024, and December 31, 2023, did not include any restricted cash.

See accompanying Notes to Consolidated Financial Statements.

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NICOLET BANKSHARES, INC.

Notes to Consolidated Financial Statements

NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Banking Activities and Subsidiaries: Nicolet Bankshares, Inc. (the “Company” or “Nicolet”) was incorporated on April 5, 2000, to serve as the holding company and sole shareholder of Nicolet National Bank (the “Bank”). The Bank opened for business on November 1, 2000. Since its opening in late 2000, Nicolet has supplemented its organic growth with several acquisition transactions.

At December 31, 2025, the Company had three wholly owned subsidiaries, the Bank, Nicolet Advisory Services, LLC (“Nicolet Advisory”), and Nicolet Insurance Services, LLC (“Nicolet Insurance”). The consolidated income of the Company is derived principally from the Bank, which provides loan (primarily commercial and agricultural-based loans, as well as residential and consumer loans) and deposit products (including other banking- and deposit-related products and services, such as ATMs, safe deposit boxes, check cashing, wires, and debit cards) to businesses, consumers and municipalities principally in its trade area of Wisconsin, Michigan and Minnesota, trust services, brokerage services (delivered through the Bank and Nicolet Advisory), and the support to deliver, fund and manage all such banking and wealth management services to its customer base.

At December 31, 2025, the Bank wholly owns an investment subsidiary based in Nevada and an entity that owns the building in which Nicolet is headquartered. Nicolet Advisory is a registered investment advisor subsidiary that provides brokerage and investment advisory services to customers. Nicolet Insurance, acquired in 2021, was formed to facilitate the delivery of a crop insurance product associated with Nicolet’s agricultural lending.

Principles of Consolidation: The consolidated financial statements of the Company include the accounts of its subsidiaries. The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and conform to general practices within the banking industry. All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements. Results of operations of companies purchased, if any, are included from the date of acquisition.

Because the Company is not the primary beneficiary, the consolidated financial statements exclude the following wholly-owned variable interest entities: Mid-Wisconsin Statutory Trust, Baylake Capital Trust II, First Menasha Bancshares Statutory Trust I, First Menasha Bancshares Statutory Trust II, County Bancorp Statutory Trust II, County Bancorp Statutory Trust III, and Fox River Valley Trust I.

Operating Segment: The Bank represents the primary operating segment (as discussed above). While the chief operating decision maker monitors the revenue streams of the various products and services, and evaluates costs, balance sheet positions and quality, all such products, services and activities are directly or indirectly related to the business of community banking, with no regular, formal or material segment delineations. Operations are managed and financial performance is evaluated on a company-wide basis, and accordingly, all the financial service operations are considered to be aggregated in one reportable operating segment. See Note 21 for additional segment disclosures.

Use of Estimates: In preparing the accompanying consolidated financial statements in conformity with U.S. GAAP, the Company’s management is required to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the disclosures provided. Actual results may differ from these estimates. Material estimates that are particularly susceptible to significant change in the near-term include the fair value of securities available for sale, the determination of the allowance for credit losses, acquisitions accounting, goodwill, and income taxes.

Business Combinations: The Company accounts for business combinations under the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”). The Company recognizes the full fair value of the assets acquired and liabilities assumed and immediately expenses transaction costs. If the amount of consideration exceeds the fair value of assets purchased less the fair value of liabilities assumed, goodwill is recorded. Alternatively, if the amount by which the fair value of assets purchased exceeds the fair value of liabilities assumed and consideration paid, a gain (“bargain purchase gain”) is recorded. Fair values are subject to refinement for up to one year after the closing date of an acquisition as information relative to closing date fair values becomes available. Results of operations of the acquired business are included in the statements of income from the effective date of the acquisition.

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NICOLET BANKSHARES, INC.

Notes to Consolidated Financial Statements

Cash and Cash Equivalents: For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash and due from banks, interest-earning deposits with no stated maturity, and federal funds sold. The Bank maintains amounts in due from banks which, at times, may exceed federally insured limits. Management monitors these correspondent relationships, and the Bank has not experienced any losses in such accounts.

Securities Available for Sale: Securities are classified as AFS on the consolidated balance sheets at the time of purchase and include those securities that the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as AFS would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors. Securities classified as AFS are carried at fair value, with unrealized gains or losses, net of related deferred income taxes, reported as increases or decreases in accumulated other comprehensive income (loss). Realized gains or losses on sales of securities AFS (using the specific identification method) are included in the consolidated statements of income under asset gains (losses), net. Premiums and discounts are amortized or accreted into interest income over the estimated life of the related securities using the effective interest method.

Management evaluates securities AFS in unrealized loss positions on a quarterly basis to determine whether the decline in fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors. In making this evaluation, management considers the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. Any impairment that is not credit-related is recognized in other comprehensive income (loss), net of related deferred income taxes. Credit-related impairment is recognized as an allowance for credit losses (“ACL”) on the balance sheet based on the amount by which the amortized cost basis exceeds the fair value, with a corresponding charge to net income. Both the ACL and charge to net income may be reversed if conditions change. However, if the Company intends to sell an impaired AFS security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment must be recognized in net income with a corresponding adjustment to the security’s amortized cost basis rather than through the establishment of an ACL.

Other Investments: Other investments include equity securities with readily determinable fair values, “restricted” equity securities, private company securities, and certificates of deposit in other banks. As a member of the Federal Reserve Bank System and the Federal Home Loan Bank (“FHLB”) System, the Bank is required to maintain an investment in the capital stock of these entities. These equity securities are “restricted” in that they can only be sold back to the respective institutions or another member institution at par. Therefore, they are less liquid than other exchange traded equity securities. As no ready market exists for these stocks, and they have no quoted market value, these investments are carried at cost. Also included are investments in other private companies that do not have quoted market prices, which are carried at cost less impairment charges, if any. Management’s evaluation of these other investments for impairment includes consideration of the financial condition and other available relevant information of the issuer.

Loans Held for Sale: Loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value as determined on an aggregate basis and generally consist of current production of certain fixed-rate residential first lien mortgages. The amount by which cost exceeds fair value is recorded as a valuation allowance and charged to earnings. Changes, if any, in the valuation allowance are included in earnings in the period in which the change occurs. As of December 31, 2025 and 2024, no valuation allowance was necessary. Loans held for sale may be sold servicing retained or servicing released, and are generally sold without recourse. Gains and losses on sales of mortgage loans held for sale are included in earnings in mortgage income, net.

Loans – Originated: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are carried at their amortized cost basis, which is the unpaid principal amount outstanding, net of deferred loan fees and costs, and any direct principal charge-off. The Company made an accounting policy election to exclude accrued interest from the amortized cost basis of loans and report such accrued interest as part of accrued interest receivable and other assets on the consolidated balance sheets.

Interest income is accrued on the unpaid principal balance using the simple interest method. The accrual of interest income on loans is discontinued when, in the opinion of management, there is reasonable doubt as to the borrower’s ability to meet payment of interest or principal when due. Loans are generally placed on nonaccrual status when contractually past due 90 days or more as to interest or principal, though may be placed in such status earlier based on the circumstances. Loans past due 90 days or more may

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Notes to Consolidated Financial Statements

continue on accrual only when they are well secured and / or in process of collection or renewal. When interest accrual is discontinued, all previously accrued but uncollected interest is reversed against current period interest income. Except in very limited circumstances, cash collections on nonaccrual loans are credited to the loan receivable balance and no interest income is recognized on those loans until the principal balance is paid in full. Accrual of interest may be resumed when the customer is current on all principal and interest payments and has been paying on a timely basis for a sustained period of time.

A description of each segment of the loan portfolio, including the corresponding credit risk, is included below.

Commercial and industrial loans consist primarily of commercial loans to small and mid-sized businesses within a diverse range of industries (manufacturing, wholesaling, paper, packaging, food production and processing, retail, service, and businesses supporting the general building industry). These loans are made for a wide variety of general corporate purposes, including working capital, equipment, and business expansion loans, with varying terms based upon the underlying purpose of the loan. Commercial and industrial loans are based primarily on the historical and projected cash flow of the underlying borrower, and secondarily on any underlying assets pledged by the borrower. The credit risk related to commercial and industrial loans is largely influenced by general economic conditions and the resulting impact on a borrower’s operations, or on the value of underlying collateral, if any. Credit risk is managed by employing sound underwriting guidelines, lending primarily to borrowers in local markets, formally reviewing the borrower’s financial condition on an ongoing basis, and generally require a guarantee (in full or part) from the primary business owners. Commercial bankers utilize SBA programs, where appropriate, as Nicolet is a preferred SBA lender.

Owner-occupied CRE loans primarily consist of loans within a diverse range of industries secured by business real estate that is occupied by borrowers who operate their businesses out of the underlying collateral and who may also have commercial and industrial loans. The credit risk related to owner-occupied CRE loans is largely influenced by general economic conditions and the resulting impact on a borrower’s operations, or on the value of underlying collateral. Credit risk is managed by employing sound underwriting guidelines, lending primarily to borrowers in local markets, periodically evaluating the underlying collateral, formally reviewing the borrower’s financial performance on an ongoing basis, and generally require a guarantee (in full or part) from the primary business owners.

Agricultural loans consist of loans secured by farmland and the related farming operations, primarily within the dairy industry. These loans support short-term needs (planting crops or buying feed), as well as longer term needs (fund cattle, equipment or real estate purchases and improvements) of our agricultural customers. The credit risk related to agricultural loans is largely influenced by the agricultural economy, including market prices for the cost of feed and the price of milk, and / or the underlying value of the farmland. Credit risk is managed by employing sound underwriting guidelines, regular personal contact with our agricultural customers, formally reviewing the borrower’s financial condition on an ongoing basis, and generally require a guarantee (in full or part) from the primary business owners. Agricultural bankers utilize FSA programs, where appropriate, as Nicolet is a preferred FSA lender.

The CRE investment loan classification primarily includes commercial-based mortgage loans that are secured by non-owner occupied, nonfarm / nonresidential real estate properties, and multi-family residential properties. Lending in this segment is focused on loans that are secured by commercial income-producing properties as opposed to speculative real estate development. The credit risk related to CRE investment loans is influenced by the cash flows of the properties, including vacancy experience, credit capacity of the tenants occupying the real estate, and general economic conditions, all of which may impact the borrower’s operations or the value of underlying collateral. Credit risk is managed by employing sound underwriting guidelines, lending primarily to borrowers in local markets, periodically evaluating the underlying collateral, regularly reviewing the borrower’s financial condition, and generally require a guarantee (in full or part) from the principals.

Construction and land development loans provide financing for the development of commercial income properties, multi-family residential development, and land designated for future development. The credit risk on construction loans depends largely upon the accuracy of the initial estimate of the property’s value at completion of construction and the estimated cost of construction. Nicolet controls the credit risk on these types of loans by making loans in familiar markets, reviewing the merits of individual projects, controlling loan structure, and monitoring the progress of projects through the analysis of construction advances. Credit risk is managed by employing sound underwriting guidelines, lending primarily to borrowers in local markets, periodically evaluating the underlying collateral, formally reviewing the borrower’s financial soundness and relationships on an ongoing basis, and generally require a guarantee (in full or part) from the principals.

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Notes to Consolidated Financial Statements

Residential real estate includes residential first mortgage loans and residential junior mortgage loans (home equity lines and term loans secured by junior mortgage liens). Residential real estate also includes residential construction loans. As part of its management of originating residential mortgage loans, Nicolet generally sells the majority of its long-term, fixed-rate residential first mortgage loans in the secondary market with the servicing rights retained, and retains the adjustable-rate mortgage loans in its loan portfolio. The Company may also retain a portion of the long-term, fixed rate residential mortgage loans that do not conform with secondary market standards, but do meet other specific underwriting guidelines. Credit risk for residential real estate loans largely depends upon factors affecting the borrower’s ability to repay as well as general economic trends. Residential real estate loan underwriting is subject to specific regulations, and Nicolet typically underwrites these loans to conform with those widely accepted standards. Residential real estate loans typically have longer terms and higher balances with lower yields, but generally carry lower risks of default.

Retail loans include predominantly credit cards and other personal installment loans to individuals within Nicolet’s market areas. Retail loans are centrally underwritten utilizing the borrower’s financial history and information on the underlying collateral. Retail loans typically have shorter terms and lower balances with higher yields, but generally carry higher risks of default. Collection of these loans depends on the borrower’s financial stability, and is more likely to be affected by adverse personal circumstances.

Loans – Acquired: Loans purchased in acquisition transactions are acquired loans, and are recorded at their estimated fair value on the acquisition date.

Acquired loans that have evidence of more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”) loans. At acquisition, an estimate of expected credit losses is made for PCD loans. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair value to establish the initial amortized cost basis of the PCD loans. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors, resulting in a discount or premium that is amortized to interest income. For acquired loans not deemed PCD loans at acquisition, the difference between the initial fair value mark and the unpaid principal balance are recognized in interest income over the estimated life of the loans. In addition, an initial allowance for expected credit losses is estimated and recorded as provision expense at the acquisition date. The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans.

Allowance for Credit Losses - Loans: The ACL-Loans represents management’s estimate of expected credit losses over the lifetime of the loan based on loans in the Company’s loan portfolio at the balance sheet date. The Company estimates the ACL-Loans based on the amortized cost basis of the underlying loan and has made an accounting policy election to exclude accrued interest from the loan’s amortized cost basis and the related measurement of the ACL-Loans. Estimating the amount of the ACL-Loans is a function of a number of factors, including but not limited to changes in the loan portfolio, net charge-offs, trends in past due and nonaccrual loans, and the level of potential problem loans, all of which may be susceptible to significant change. Actual credit losses, net of recoveries, are deducted from the ACL-Loans. Loans are charged-off when management believes that the collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the ACL-Loans. A provision for credit losses, which is a charge against income, is recorded to bring the ACL-Loans to a level that, in management’s judgment, is appropriate to absorb expected credit losses in the loan portfolio.

The Company uses the current expected credit loss model (“CECL”) to estimate the ACL-Loans. This model considers historical loss rates and other qualitative adjustments, as well as a forward-looking component that considers reasonable and supportable forecasts over the expected life of each loan. To develop the ACL-Loans estimate under the CECL model, the Company segments the loan portfolio into loan pools based on loan type and similar credit risk elements; performs an individual evaluation of PCD and other credit-deteriorated loans; calculates the historical loss rates for the segmented loan pools; applies the loss rates over the calculated life of the pooled loans; adjusts for forecasted macro-level economic conditions; and determines qualitative adjustments based on factors and conditions unique to Nicolet’s portfolio.

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Notes to Consolidated Financial Statements

To assess the overall appropriateness of the ACL-Loans, management applies an allocation methodology which focuses on evaluation of qualitative and environmental factors, including but not limited to: evaluation of facts and issues related to specific loans; management’s ongoing review and grading of the loan portfolio; consideration of historical loan loss and delinquency experience on each portfolio segment; trends in past due and nonaccrual loans; the risk characteristics of the various loan segments; changes in the size and character of the loan portfolio; concentrations of loans to specific borrowers or industries; existing economic conditions; the fair value of underlying collateral; and other qualitative and quantitative factors which could affect expected credit losses. Assessing these numerous factors involves significant judgment.

Management allocates the ACL-Loans by pools of risk within each loan portfolio segment. The allocation methodology consists of the following components. First, a specific reserve is established for individually evaluated PCD and other credit-deteriorated loans, which management defines as nonaccrual credit relationships over $250,000, collateral dependent loans, and other loans with evidence of credit deterioration. The specific reserve in the ACL-Loans for these credit deteriorated loans is equal to the aggregate collateral or discounted cash flow shortfall. Next, management allocates the ACL-Loans with historical loss rates by loan segment. The loss factors are measured on a quarterly basis and applied to each loan segment based on current loan balances and projected for their expected remaining life. Management also allocates the ACL-Loans using the qualitative and environmental factors mentioned above. Consideration is given to those current qualitative or environmental factors that are likely to cause estimated credit losses at the evaluation date to differ from the historical loss experience of each loan segment. Lastly, management considers reasonable and supportable forecasts to assess the collectability of future cash flows.

Allocations to the ACL-Loans may be made for specific loans but the entire ACL-Loans is available for any loan that, in management’s judgment, should be charged-off or for which an actual loss is realized. The allowance analysis is reviewed by the board of directors (the “Board”) on a quarterly basis in compliance with internal and regulatory requirements.

Credit-Related Financial Instruments: In the ordinary course of business, the Company has entered into financial instruments consisting of commitments to extend credit, financial standby letters of credit, and performance standby letters of credit. Financial standby letters of credit are issued specifically to facilitate commerce and typically result in the commitment being drawn on when the underlying transaction is consummated between the customer and the third party, while performance standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party. Such financial instruments are recorded in the consolidated financial statements when they are funded.

Allowance for Credit Losses - Unfunded Commitments: In addition to the ACL-Loans, the Company has established an allowance for unfunded commitments, included in accrued interest payable and other liabilities on the consolidated balance sheets, representing expected credit losses over the contractual period for which the Company is exposed to credit risk resulting from a contractual obligation to extend credit. The ACL-Unfunded Commitments is maintained at a level that management believes is sufficient to absorb losses arising from unfunded loan commitments, and is determined quarterly based on methodology similar to the methodology for determining the ACL-Loans.

Transfers of Financial Assets: Transfers of financial assets, primarily in loan participation activities, are accounted for as sales only when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of the right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return assets.

Premises and Equipment: Premises and equipment are stated at cost less accumulated depreciation and amortization. Premises and equipment from acquisitions were recorded at estimated fair value on the respective dates of acquisition. Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful lives of the improvements or the terms of the related leases. Maintenance and repairs are expensed as incurred.

Estimated useful lives of new premises and equipment generally range as follows:

Building and improvements 25 – 40 years

Leasehold improvements 5 – 15 years

Furniture and equipment 3 – 10 years

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Notes to Consolidated Financial Statements

Operating Leases: The Company accounts for its operating leases in accordance with ASC 842, Leases, which requires lessees to record almost all leases on the balance sheet as a right-of-use (“ROU”) asset and lease liability. The operating lease ROU asset represents the right to use an underlying asset during the lease term (included in accrued interest receivable and other assets on the consolidated balance sheets), while the operating lease liability represents the obligation to make lease payments arising from the lease (included in accrued interest payable and other liabilities on the consolidated balance sheets). The ROU asset and lease liability are recognized at lease commencement based on the present value of the remaining lease payments, considering a discount rate that represents Nicolet’s incremental borrowing rate. Operating lease expense is recognized on a straight-line basis over the lease term and is recognized in occupancy, equipment, and office on the consolidated statements of income.

Other Real Estate Owned (“OREO”): OREO acquired through partial or total satisfaction of loans or bank facilities no longer in use are carried at fair value less estimated costs to sell. Any write-down in the carrying value of loans or vacated bank premises at the time of transfer to OREO is charged to the ACL-Loans or to write-down of assets, respectively. OREO properties acquired in conjunction with acquisition transactions were recorded at fair value on the date of acquisition. Any subsequent write-downs to reflect current fair value, as well as gains or losses on disposition and revenues and expenses incurred to hold and maintain such properties, are treated as period costs.

Goodwill and Other Intangibles: Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired. 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. Other intangibles include core deposit intangibles (which represent the value of acquired customer core deposit bases) and customer list intangibles. The core deposit intangibles have an estimated finite life, are amortized on an accelerated basis over a 10-year period, and are subject to periodic impairment evaluation. The customer list intangibles have finite lives, are amortized on a straight-line basis to expense over their estimated average life, and are subject to periodic impairment evaluation.

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 which would impact 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, on an undiscounted basis, of the underlying operations or assets which give rise to the intangible.

Mortgage Servicing Rights (“MSRs”): The Company sells originated residential mortgages into the secondary market and retains the right to service the loans sold. A mortgage servicing right asset (liability) is capitalized upon sale of such loans with the offsetting effect recorded as a gain (loss) on sale of loans in earnings (included in mortgage income, net), representing the then-current estimated fair value of future net cash flows expected to be realized for performing the servicing activities. MSRs when purchased (including MSRs purchased in acquisitions) are initially recorded at their then-estimated fair value. As the Company has not elected to measure any class of servicing assets under the fair value method, the Company utilizes the amortization method. MSRs are amortized in proportion to and over the period of estimated net servicing income, with the amortization charged to earnings (included in mortgage income, net). MSRs are carried at the lower of initial capitalized amount, net of accumulated amortization, or estimated fair value, and are included in other assets in the consolidated balance sheets. Mortgage loan servicing fee income is typically based on a contractual percentage of the outstanding principal and is recorded as income when earned (included in mortgage income, net with less material late fees and ancillary fees related to loan servicing).

At each reporting date, the MSR asset is assessed for impairment based on the estimated fair value, which considers the estimated prepayment speeds and stratifications based on the risk characteristics of the underlying loans serviced (predominantly loan type and note interest rate). The value of MSRs is adversely affected when mortgage interest rates decline and mortgage loan prepayments increase. A valuation allowance is established through a charge to earnings (included in mortgage income, net) to the extent the amortized cost of the MSRs exceeds the estimated fair value by stratification. If it is later determined that all or a portion of the temporary impairment no longer exists for a stratification, the valuation is reduced through a recovery to earnings, though not beyond the net amortized cost. An other-than-temporary impairment (i.e., recoverability is considered remote when considering interest rates and loan payoff activity) is recognized as a write-down of the MSRs and the related valuation allowance (to the extent a valuation allowance is available) and then against earnings. A direct write-down permanently reduces the carrying value of the MSRs and valuation allowance, precluding subsequent recoveries.

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Notes to Consolidated Financial Statements

Loan Servicing Rights (“LSRs”): The Company acquired agricultural loan servicing rights in connection with a bank acquisition in 2021. These LSRs were recorded at estimated fair value upon acquisition, and are subsequently accounted for utilizing the amortization method (included in other assets in the consolidated balance sheets); thus, the LSRs are amortized in proportion to and over the period of estimated net servicing income, with the amortization charged to earnings. The LSRs are assessed for impairment at each reporting date based on estimated fair value. Impairment is determined by stratifying the rights into tranches based on predominant characteristics, such as interest rate, loan type, and investor type. A valuation allowance is established through a charge to earnings to the extent that estimated fair value is less than the carrying amount of the servicing assets for an individual tranche. The valuation allowance is adjusted to reflect changes in the measurement of impairment through either recovery or additions to the valuation allowance, with such changes reported as a component of loan servicing fees on the consolidated statements of income. Fair value in excess of the carrying amount of servicing assets is not recognized. The amortization of loan servicing rights is reflected net of loan servicing fee income. Loan servicing fee income is based on a contractual percentage of the outstanding principal and is recorded as income when earned.

Bank-owned Life Insurance (“BOLI”): The Company owns BOLI on certain executives and employees. BOLI balances are recorded at their cash surrender values. Changes in the cash surrender values and death proceeds exceeding carrying values are included in BOLI income.

Stock-based Compensation: Stock-based payments to employees, including grants of restricted stock awards, restricted stock units, or stock options, are valued at fair value of the award on the date of grant and expensed on a straight-line basis as compensation expense over the applicable vesting period. In addition, certain restricted stock units vest upon the satisfaction of specific performance-based metrics over a defined performance period. A Black-Scholes model is utilized to estimate the fair value of stock options and the quoted market price of the Company’s stock at the date of grant is used to estimate the fair value of restricted stock.

Income Taxes: The Company files a consolidated federal income tax return with its wholly owned subsidiaries and files state income tax returns with the various taxing jurisdictions based on its taxable presence. Amounts equal to tax benefits of those subsidiaries having taxable federal or state losses or credits are reimbursed by the entities that incur federal or state tax liabilities.

Amounts provided for income tax expense are based on income reported for financial statement purposes and do not necessarily represent amounts currently payable under tax laws. Deferred income tax assets and liabilities are computed quarterly for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax rates applicable to the periods in which the differences are expected to affect taxable income. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through income tax expense. Valuation allowances are established when it is more likely than not that a portion of the full amount of the deferred tax asset will not be realized. In assessing the ability to realize deferred tax assets, management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies.

At acquisition, deferred taxes were evaluated in respect to the acquired assets and assumed liabilities (including the acquired net operating losses), and a net deferred tax asset was recorded. Certain limitations within the provisions of the tax code are placed on the amount of net operating losses which can be utilized as part of acquisition accounting rules and were incorporated into the calculation of the deferred tax asset. In addition, a portion of the fair value discounts on PCD loans which resolved in the first twelve months after the acquisition were disallowed under provisions of the tax code.

The Company may also recognize a liability for unrecognized tax benefits from uncertainty in income tax positions. Unrecognized tax benefits represent the differences between a tax position taken or expected to be taken in a tax return and the benefit recognized and measured in the consolidated financial statements. At December 31, 2025, the Company determined it had no significant uncertainty in income tax positions. Interest and penalties related to unrecognized tax benefits are classified as income tax expense.

At December 31, 2025, the Company was not under examination by any taxing authority.

Earnings per Common Share: Basic earnings per common share are calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common share includes the dilutive effect of outstanding common stock awards unless the impact is anti-dilutive, by application of the treasury stock method.

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Notes to Consolidated Financial Statements

Treasury Stock: Treasury stock is accounted for at cost on a first-in-first-out basis. It is the Company’s general practice to cancel treasury stock shares in the same quarter as purchased, and thus, not carry a treasury stock balance.

Comprehensive Income: Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on securities AFS, are reported in accumulated other comprehensive income (loss), as a separate component of the equity section of the balance sheet. Realized gains or losses are reclassified to current period income. Changes in these items, along with net income, are components of comprehensive income (loss). The Company presents comprehensive income in a separate consolidated statement of comprehensive income.

Revenue Recognition: Accounting principles (ASC 606, Revenue from Contracts with Customers) require that an entity recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance includes a five-step model to apply to revenue recognition, consisting of the following: (1) identify the contract; (2) identify the performance obligation in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and (5) recognize revenue when or as the performance obligation is satisfied. ASC 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities, as well as certain noninterest income categories, such as gains or losses associated with mortgage servicing rights and income from BOLI. Descriptions of the Company’s primary revenue contracts within the scope of this revenue recognition guidance are discussed in detail below.

Trust services and brokerage fee income: A contract between the Company and its customers to provide fiduciary and / or investment administration services on trust accounts and brokerage accounts in exchange for a fee. Trust services and brokerage fee income is generally based upon the month-end market value of the assets under management and the applicable fee rate, which is recognized over the period the underlying trust or brokerage account is serviced (generally on a monthly basis). Such contracts are generally cancellable at any time, with the customer subject to a pro-rated fee in the month of termination.

Service charges on deposit accounts: The deposit contract obligates the Company to serve as a custodian of the customer’s deposited funds and generally can be terminated at will by either party. This contract permits the customer to access the funds on deposit and request additional services related to the deposit account. Service charges on deposit accounts consist of account analysis fees (net fees earned on analyzed business and public checking accounts), monthly service charges, nonsufficient fund (“NSF”) charges, and other deposit account related charges. The Company’s performance obligation for account analysis fees and monthly service charges is generally satisfied, and the related revenue recognized, over the period in which the service is provided (typically on a monthly basis); while NSF charges and other deposit account related charges are largely transactional based and the related revenue is recognized at the time the service is provided.

Card interchange income: A contract between the Company, as a card-issuing bank, and its customers whereby the Company receives a transaction fee from the merchant’s bank whenever a customer uses a debit or credit card to make a purchase. The performance obligation is completed and the fees are recognized as the service is provided (i.e., when the customer uses a debit or credit card).

Recent Accounting Pronouncements Adopted: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this ASU improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation table, as well as income taxes paid disaggregated by jurisdiction. These expanded disclosures allow investors to better assess how an entity’s overall operations, including the related tax risks, tax planning, and operational opportunities, affect its income tax rate and prospects for future cash flows. The updated guidance is effective for annual periods beginning after December 15, 2024, and did not have a material impact on the consolidated financial statements. See Note 13 for the new income tax disclosures.

Future Accounting Pronouncements: 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 loan’s 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.

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Notes to Consolidated Financial Statements

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.

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 to improve the operability of the guidance in consideration of the different methods of software development. Specifically, this update removes all references to prescriptive and sequential software development stages; rather, an entity is required to start capitalizing software costs when both of the following occur: management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. The updated guidance is effective for annual reporting periods beginning after December 15, 2027.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this ASU require disclosure in the notes to financial statements of specified information about certain expenses, such as employee compensation, depreciation, and intangible asset amortization. The updated guidance is effective for annual reporting periods beginning after December 15, 2026.

Reclassifications: Certain amounts in the 2024 and 2023 financial statements have been reclassified to conform to the 2025 presentation, namely Certificates of deposit in other banks has been consolidated into Other investments on the consolidated balance sheets. This reclassification was not material and did not impact any other previously reported financial statement line items.

NOTE 2. ACQUISITION

MidWestOne Financial Group, Inc. (“MidWestOne”): On February 13, 2026, Nicolet completed its merger with MidWestOne, at which time MidWestOne merged with and into Nicolet, and MidWestOne Bank, the wholly owned bank subsidiary of MidWestOne, was merged with and into Nicolet National Bank. MidWestOne Bank will operate as a division of Nicolet National Bank until the planned system conversion in August 2026. At that time, all MidWestOne locations will transition to the Nicolet brand and digital banking platform, expanding Nicolet’s presence in Iowa, the Twin Cities, Western Wisconsin, and Denver.

Based on initial financial data, the addition of MidWestOne added approximately $6 billion in assets to increase Nicolet’s total assets to approximately $15 billion. Total loans of the combined company will increase to approximately $11 billion and total deposits will increase to approximately $13 billion. As a result of the merger, Nicolet issued approximately 6.6 million shares of common stock for stock consideration valued at approximately $1.0 billion, based upon the closing stock price of $155.19 for Nicolet’s common stock on February 13, 2026.

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Notes to Consolidated Financial Statements

NOTE 3. SECURITIES AND OTHER INVESTMENTS

Securities

Securities are classified as AFS or HTM on the consolidated balance sheets at the time of purchase. AFS securities include those securities that the Company intends to hold for an indefinite period of time, but not necessarily to maturity, and are carried at fair value on the consolidated balance sheets. HTM securities include those securities which the Company has both the positive intent and ability to hold to maturity, and are carried at amortized cost on the consolidated balance sheets.

The amortized cost and fair value of securities available for sale are summarized as follows.

Securities AFS:

Securities AFS:

Proceeds and realized gains / losses from the sale of securities were as follows.

Years Ended December 31,

Securities AFS:

Gains (losses) on sales of securities AFS, net $ 126 $ 968 $ (3,313)

Securities HTM:

Gross gains $ — $ — $ —

Gains (losses) on sales of securities HTM, net $ — $ — $ (37,723)

Proceeds from sales of securities HTM $ — $ — $ 460,051

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NICOLET BANKSHARES, INC.

Notes to Consolidated Financial Statements

During first quarter 2023, Nicolet executed the sale of $500 million (par value) U.S. Treasury HTM securities for a pre-tax loss of $38 million or an after-tax loss of $28 million. As a result of the sale of securities previously classified as HTM, the remaining unsold portfolio of HTM securities was reclassified to AFS with a carrying value of approximately $157 million (at the time of reclassification), and the unrealized loss on this portfolio of $20 million (at the time of reclassification) increased the balance of accumulated other comprehensive loss $15 million, net of the deferred tax effect.

All mortgage-backed securities included in the securities portfolio were issued by U.S. government agencies and corporations. Securities with a fair value of $497 million and $355 million as of December 31, 2025 and 2024, respectively, were pledged as collateral to secure public deposits and borrowings, as applicable, and for liquidity or other purposes as required by regulation. Accrued interest on securities totaled $5 million at both December 31, 2025 and 2024, respectively, and is included in accrued interest receivable and other assets on the consolidated balance sheets.

The following tables present gross unrealized losses and the related estimated fair value of investment securities for which an allowance for credit losses has not been recorded, aggregated by investment category and the length of time the individual securities have been in a continuous unrealized loss position.

Less than 12 months 12 months or more Total

Securities AFS:

Less than 12 months 12 months or more Total

Securities AFS:

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NICOLET BANKSHARES, INC.

Notes to Consolidated Financial Statements

During first quarter 2023, the Company recognized provision expense of $2.3 million related to the expected credit loss on a bank subordinated debt investment (acquired in an acquisition), and immediately charged-off the full investment. The Company does not consider its remaining securities AFS with unrealized losses to be attributable to credit-related factors, as the unrealized losses in each category have occurred as a result of changes in noncredit-related factors such as changes in interest rates, market spreads and market conditions subsequent to purchase, not credit deterioration. Furthermore, the Company does not have the intent to sell any of these securities AFS and believes that it is more likely than not that we will not have to sell any such securities before a recovery of cost. For the years ended December 31, 2025, 2024, and 2023, no allowance for credit losses on securities AFS was recognized.

The amortized cost and fair value of investment securities by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties; as this is particularly inherent in mortgage-backed securities, these securities are not included in the maturity categories below.

As of December 31, 2025 Securities AFS

(in thousands) Amortized Cost Fair Value

Due after five years through ten years 97,170 91,830

Other Investments

Other investments include “restricted” equity securities, equity securities with readily determinable fair values, and private company securities. The carrying value of other investments are summarized as follows.

Equity securities with readily determinable fair values 9,505 8,610

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NICOLET BANKSHARES, INC.

Notes to Consolidated Financial Statements

NOTE 4. LOANS, ALLOWANCE FOR CREDIT LOSSES - LOANS, AND CREDIT QUALITY

Loans:

The loan composition was as follows.

(in thousands) Amount % of Total Amount % of Total

ACL-Loans to loans 1.01 % 1.00 %

Accrued interest on loans totaled $21 million and $20 million at December 31, 2025 and December 31, 2024, respectively, and is included in accrued interest receivable and other assets on the consolidated balance sheets.

Allowance for Credit Losses-Loans:

The majority of the Company’s loans, commitments, and letters of credit have been granted to customers in the Company’s market area. Although the Company has a diversified loan portfolio, the credit risk in the loan portfolio is largely influenced by general economic conditions and trends of the counties and markets in which the debtors operate, and the resulting impact on the operations of borrowers or on the value of underlying collateral, if any.

A roll forward of the allowance for credit losses - loans was as follows.

Years Ended December 31,

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NICOLET BANKSHARES, INC.

Notes to Consolidated Financial Statements

The following table presents the balance and activity in the ACL-Loans by portfolio segment.

ACL-Loans

For comparison purposes, the following table presents the balance and activity in the ACL-Loans by portfolio segment for the prior year-end period.

ACL-Loans

Allowance for Credit Losses-Unfunded Commitments:

In addition to the ACL-Loans, the Company has established an ACL-Unfunded Commitments of $3.0 million and $3.1 million at December 31, 2025 and December 31, 2024, respectively, classified in accrued interest payable and other liabilities on the consolidated balance sheets.

Provision for Credit Losses:

The provision for credit losses is determined by the Company as the amount to be added to the ACL loss accounts for various types of financial instruments (including loans, investment securities, and off-balance sheet credit exposures) after net charge-offs have been deducted to bring the ACL to a level that, in management’s judgment, is necessary to absorb expected credit losses over the lives of the respective financial instruments. The following table presents the components of the provision for credit losses.

Years Ended December 31,

Provision for credit losses on:

Unfunded commitments (50) 100 —

Investment securities — — 2,340

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NICOLET BANKSHARES, INC.

Notes to Consolidated Financial Statements

Collateral Dependent Loans:

A loan is considered to be collateral dependent when, based upon management’s assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. For collateral dependent loans, expected credit losses are based on the fair value of the collateral at the balance sheet date, with consideration for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. The following table presents collateral dependent loans by portfolio segment and collateral type, including those loans with and without a related allowance allocation.

December 31, 2025 Collateral Type

Construction & land development — — — — — —

Residential construction — — — — — —

Retail & other — — — — — —

December 31, 2024 Collateral Type

Construction & land development — — — — — —

Residential construction — — — — — —

Residential junior mortgage — — — — — —

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NICOLET BANKSHARES, INC.

Notes to Consolidated Financial Statements

Past Due and Nonaccrual Loans:

The following tables present past due loans by portfolio segment.

The following table presents nonaccrual loans by portfolio segment. The nonaccrual loans without a related allowance for credit losses have been reflected in the collateral dependent loans table above.

Total Nonaccrual Loans

(in thousands) December 31, 2025 % to Total December 31, 2024 % to Total

Construction & land development — — — —

Residential construction — — — —

Percent of total loans 0.5 % 0.4 %

69

NICOLET BANKSHARES, INC.

Notes to Consolidated Financial Statements

Credit Quality Information:

The following tables present total loans by risk categories and year of origination. Acquired loans have been included based upon the actual origination date.

December 31, 2025 Amortized Cost Basis by Origination Year

Commercial & industrial

Owner-occupied CRE

Current period gross charge-offs $ — $ — $ — $ — $ — $ (189) $ — $ — $ (189)

Agricultural

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ (65) $ — $ (65)

CRE investment

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Construction & land development

Grade 7 * — — — 60 — — — — 60

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Residential construction

Grade 7 * — — — — — — — — —

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Residential first mortgage

Current period gross charge-offs $ — $ (85) $ — $ — $ — $ (13) $ — $ — $ (98)

Residential junior mortgage

Current period gross charge-offs $ — $ — $ — $ — $ — $ (2) $ — $ — $ (2)

Retail & other

* The total Grade 7 loans at December 31, 2025, included $15 million of loans covered by government loan program guarantees.

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NICOLET BANKSHARES, INC.

Notes to Consolidated Financial Statements

December 31, 2024 Amortized Cost Basis by Origination Year

Commercial & industrial

Owner-occupied CRE

Current period gross charge-offs $ — $ — $ (90) $ — $ — $ (30) $ — $ — $ (120)

Agricultural

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

CRE investment

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Construction & land development

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Residential construction

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Residential first mortgage

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Residential junior mortgage

Grade 6 — — — — — — — — —

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Retail & other

Grade 5 — — — — — — — — —

* The total Grade 7 loans at December 31, 2024, included $15 million of loans covered by government loan program guarantees.

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NICOLET BANKSHARES, INC.

Notes to Consolidated Financial Statements

An internal loan review function rates loans using a grading system based on different risk categories. Loans with a Substandard grade are considered to have a greater risk of loss and may be assigned allocations for loss based on specific review of the weaknesses observed in the individual credits. Such loans are monitored by the loan review function to help ensure early identification of any deterioration. A description of the loan risk categories used by the Company follows.

Grades 1-4, Pass: Credits exhibit adequate cash flows, appropriate management and financial ratios within industry norms and/or are supported by sufficient collateral. Some credits in these rating categories may require a need for monitoring but elements of concern are not severe enough to warrant an elevated rating.

Grade 5, Watch: Credits with this rating are adequately secured and performing but are being monitored due to the presence of various short-term weaknesses which may include unexpected, short-term adverse financial performance, managerial problems, potential impact of a decline in the entire industry or local economy and delinquency issues. Loans to individuals or loans supported by guarantors with marginal net worth or collateral may be included in this rating category.

Grade 6, Special Mention: Credits with this rating have potential weaknesses that, without the Company’s attention and correction may result in deterioration of repayment prospects. These assets are considered Criticized Assets. Potential weaknesses may include adverse financial trends for the borrower or industry, repeated lack of compliance with Company requests, increasing debt to net worth, serious management conditions and decreasing cash flow.

Grade 7, Substandard: Assets with this rating are characterized by the distinct possibility the Company will sustain some loss if deficiencies are not corrected. All foreclosures, liquidations, and nonaccrual loans are considered to be categorized in this rating, regardless of collateral sufficiency.

Modifications to Borrowers Experiencing Financial Difficulty:

The following table presents the amortized cost of loans that were both experiencing financial difficulty and were modified during the years presented, aggregated by portfolio segment and type of modification.

Commercial & industrial $ 2,339 $ — $ — $ — $ 2,339 0.17 %

Owner-occupied CRE — — — — — — %

Agricultural — — — — — — %

CRE investment — — — — — — %

Construction & land development — — — — — — %

Residential first mortgage 173 — — — 173 0.01 %

Commercial & industrial $ — $ — $ — $ — $ — — %

Agricultural — — — — — — %

CRE investment — — — — — — %

Construction & land development — — — — — — %

Residential first mortgage — — — — — — %

The loans presented in the tables above have had more than insignificant payment delays (which the Company has defined as payment delays in excess of three months). The Company closely monitors these loans to understand the effectiveness of its modification efforts, and such loans generally remain in nonaccrual status pending a sustained period of performance in accordance with the modified terms.

As of December 31, 2025 and 2024, there were no loans made to borrowers experiencing financial difficulty that were modified during the current period and subsequently defaulted, and there were no commitments to lend additional funds to such debtors.

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NICOLET BANKSHARES, INC.

Notes to Consolidated Financial Statements