Content analysis
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Legalese | ||
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H.S. freshman Bad
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New words:
advisory, aging, auto, bifurcated, brokerage, Capacity, chief, closer, disaggregated, disaggregation, drag, examination, extinguishment, fewer, GDP, goal, intensive, jurisdiction, maker, nonbank, order, portion, prudent, pulled, restated, retired, robust, slight, slightly, surprising, surrender, surrendered, tailwind, trend, uptick, wealthiest, wealthy
Removed:
accounted, assistance, August, BOLI, bond, broker, burden, CECL, Charter, closed, combat, confidence, consummation, criteria, dated, deductible, Deferral, development, downgrade, earn, ease, enhanced, enhancement, eroding, expand, experienced, explicitly, Facilitation, faster, grew, hedging, history, implicitly, interchange, January, lag, line, Lost, marketing, media, merged, monitor, negative, optional, outlook, partial, partially, PCD, pursuant, rapidly, recognizing, reducing, reposition, repriced, restructured, Restructuring, resulted, scheduled, September, Signature, slower, sunset, target, team, transition, Troubled, utilize, vintage, Western, wholly, wide, work, yielded, yielding
Financial report summary
?Risks
- We are subject to intense competition for clients and the nature of that competition is rapidly evolving.
- We may be unable to successfully implement our strategy to grow our commercial and consumer banking businesses.
- Failure to keep pace with technological changes could adversely affect our business.
- Through technological innovations and changes in client habits, the manner in which clients use financial services continues to change at a rapid pace.
- Fraud is a major, and increasing, operational risk for us and all banks.
- We rely on information technology and telecommunications systems and certain third-party service providers, the operational functions of which may experience disruptions that could adversely affect us and over which we may have limited or no control.
- Our risk management framework may not be effective in mitigating risks and/or losses.
- Inflationary pressures present a potential threat to our results of operation and financial condition.
- Generally, in periods of economic downturns, including periods of rising interest rates and recessions, our realized credit losses increase, demand for our products and services declines, and the credit quality of our loan portfolio declines.
- The Federal Reserve has implemented significant economic strategies that have affected interest rates, inflation, asset values, and the shape of the yield curve. These strategies have had, and will continue to have, a significant impact on our business and on many of our clients.
- We are exposed to higher credit and concentration risk from our commercial-related lending.
- If our allowance for credit losses was required to be increased because it is not large enough to cover actual losses in our loan portfolio, our results of operations and financial condition could be materially and adversely affected.
- Outbreaks of communicable diseases, such as COVID-19 and its variants, have led to periods of significant volatility in financial, commodities (including oil and gas) and other markets, adversely affected our ability to conduct normal business, adversely affected our clients, and are likely to harm our businesses, financial condition and results of operations.
- Failure to maintain certain regulatory capital levels and ratios could result in regulatory actions that would be materially adverse to our shareholders.
- Political dysfunction and volatility within the federal government, both at the regulatory and Congressional level, creates significant potential for major and abrupt shifts in federal policy regarding bank regulation, taxes, and the economy, any of which could have significant and adverse impacts on our business and financial performance.
- Legal disputes are an unavoidable part of business, and the outcome of pending or threatened litigation cannot be predicted with any certainty.
- Liquidity is essential to our business model and a lack of liquidity, or an increase in the cost of liquidity could materially impair our ability to fund our operations and jeopardize our results of operation, financial condition and cash flows.
- Unrealized Losses in Our Securities Portfolio Could Affect Liquidity.
- Maintaining Liquidity Could Increase Our Interest Expense.
- The preparation of our consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make significant assumptions, estimates and judgments that affect the financial statements.
- In addition, changes in accounting standards or interpretations could negatively impact our reported earnings and financial condition.
- We could be subject to changes in tax laws, regulations and interpretations or challenges to our income tax provision.
- Our internal controls and procedures may fail or be circumvented.
- Natural disasters and weather-related events exacerbated by climate change could have a negative impact on our results of operations and financial condition.
- We have only recently begun to pay dividends; moreover, the inability of our subsidiaries to declare and pay dividends or other distributions to the Holding Company could adversely affect its liquidity and ability to declare and pay dividends.
- Holders of our indebtedness have rights that are senior to those of our common shareholders.
- Our stock price can be volatile.
- Nicolet’s corporate organizational documents and the provisions of Wisconsin law to which we are subject contain certain provisions that could have an anti-takeover effect and may delay, make more difficult or prevent an attempted acquisition of Nicolet that you may favor.
- Nicolet’s securities are not FDIC insured.
Management Discussion
- ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- The Company’s financial performance and certain balance sheet line items were impacted by the timing and size of Nicolet’s 2022 and 2021 acquisitions. Nicolet acquired Charter Bankshares, Inc. (“Charter”) on August 26, 2022, County Bancorp, Inc. (“County”) on December 3, 2021, and Mackinac Financial Corporation (“Mackinac”) on September 3, 2021. Certain income statement results, average balances and related ratios for 2022 include partial contributions from Charter, while 2021 results include partial contributions from County and Mackinac, each from the respective acquisition date. Additional information on Nicolet’s recent acquisition activity is included in Note 2, “Acquisitions” in the Notes to Consolidated Financial Statements, under Part II, Item 8.
- The detailed financial discussion that follows focuses on 2023 results compared to 2022. For a discussion of 2022 results compared to 2021, 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, 2022, filed with the SEC on February 24, 2023, which information under that caption is incorporated herein by reference. Historical results of operations are not necessarily predictive of future results.