Nicolet shareholders will get a dividend
It’s the first dividend in the bank’s 23-year history
GREEN BAY - Nicolet National Bank’s parent company on Monday evening announced it would pay a quarterly cash dividend to shareholders in June, the first dividend in the bank’s 23-year history.
Nicolet Bankshares Inc. on June 15 will pay 25 cents per share to shareholders of record on June 1, Mike Daniels, Nicolet’s president and CEO, announced during the company’s annual meeting. There are about 14.7 million shares outstanding in the bank.
He said the dividend is an “expression of strength” and support for shareholders who have watched the bank’s stock price drop 30% from a 52week high of $86.48 last fall to the $55-$56 range this week. Nicolet’s stock price rose $0.61 in trading on Tuesday to close at $55.65, a 1.1% increase.
Daniels said Nicolet’s finances remain strong, but its share price is at the mercy of macroeconomic forces it cannot control. The broader banking industry has grappled with uncertainty after three banks failed earlier this year, institutional investors (think BlackRock or Fidelity) sold large holdings sending share prices down, and federal interest rate increases put more pressure on banks’ interest margins.
“The ability to reward shareholders while at the same time growing and serving our customers and employees is the essence of shared success,” Daniels said.
About 60% of Nicolet shareholders are “retail” investors, nonprofessional investors saving for retirement, for example. They also include investors in banks Nicolet has bought in recent year using a mix of cash and Nicolet shares.
“In a turbulent time, it’s an expression of confidence in the company and its performance,” Daniels said of the dividend.
The dividend announcement drew the most attention from the Nicolet shareholders, staff and directors who attended Monday evening’s annual meeting at the Meyer Theatre. It was not the only takeaway, though, from a meeting focused on how Nicolet plans to weather a challenging 2023. Here’s what investors, customers and employees will want to know.
Nicolet Bank expects to pause acquisitions, which fueled expansion into Fox Valley, Eau Claire and Michigan
For years, Nicolet has preferred to use its free cash to increase shareholder value through growth and acquisitions rather than dividends.
Since 2017, Nicolet has acquired Fox Valley-based FNB-Fox Valley, Wausau-based Advantage Community Bank, Michigan-based mBank, agriculture lender Investors Community Bank, Oshkosh-based Choice Bank and Eau Claire-based Charter Bank. Along with organic growth, acquisitions have boosted the bank’s total assets from $3.1 billion in 2018 to $8.8 billion in at the end of 2022.
Daniels said opportunities to acquire other banks will likely dwindle until federal interest rates stabilize and institutional investors return to bank stocks. He said Nicolet will look for opportunities that allows the bank to get “better, not just bigger.”
“The macro environment isn’t letting us be anything but average,” Daniels said. “When institutional investors come back to the sector, we’ll be in a great position to take advantage. Meanwhile, we’ll focus on ... organic growth and make sure we’re there for the people and communities we serve.”
Why branch closures, layoffs ‘don’t make sense’ to Nicolet
Nicolet’s quarterly dividend focused on shareholders and the bank’s share price, but Daniels said that won’t come at the expense of its customers, employees and communities it serves.
As Nicolet acquired competitors with overlapping footprints, it consolidated branches in some communities. But Daniels said he doesn’t see a reason to close more branches or downsize the company’s workforce when they will be a key to growth until the broader banking industry calms down. He said successful, vibrant communities depend on community banks like Nicolet.
“We feel good about our footprint,” Daniels said. “We want to matter to our customers and communities.”