40.8% is the oddest number in Nicolet’s 10-Q: diluted shares rose from 15.4 million to 21.7 million in a year.
That jump is why the headline and the per‑share story don't line up. Net income climbed 57.9% to $56.9 million, yet diluted EPS only increased 12% to $2.62. The filing ties almost all of the scale change to one source: the MidWest One acquisition.
Management points to the deal for the big interest-income lift.
"Interest income increased $84 million over second quarter 2025, while interest expense increased $17 million from second quarter 2025, primarily due to the MidWest One acquisition."
Nicolet Bankshares / 10-Q / 2026-07-31
That is the mechanics: $84 million more interest income and only $17 million more interest expense, which pushed net income higher in absolute dollars. Diluted shares rose 40.8%, which helps explain why EPS lagged net-income growth.
The filing also shows the acquisition dramatically changed the balance sheet.
"Total deposits were $12.5 billion at June 30, 2026, an increase of $4.8 billion (62%) from December 31, 2025, including a $4.7 billion increase in customer (core) deposits and a $78 million increase in brokered deposits, primarily due to the MidWest One acquisition."
Nicolet Bankshares / 10-Q / 2026-07-31
Assets grew to $15.4 billion, up $6.2 billion, and noninterest income rose $23 million, or 58%, largely for the same reason. In short: the company is a materially different, larger bank this quarter because of the deal.
That scale change carries two practical tensions. First, earnings improvements are skewed toward aggregated-dollar measures, net income and total interest income, rather than clean, organic per‑share lift. Second, credit and asset mix shifted enough that nonperforming assets rose to $75 million, or 0.49% of total assets, from 0.32% a year earlier. The filing says the increase is "primarily due to the acquisition of MidWest One," which leaves the integration and loan mix questions front and center.
Other accounting notes are small by comparison: net asset gains of $1.5 million for the first half of 2026 versus losses last year, and a $42 million decrease in long‑term borrowings after redeeming junior subordinated debentures.
Put another way: the quarter looks bigger because Nicolet bought a bigger bank. That increased top‑line and total profit, while diluting per‑share metrics and affecting credit metrics.
Watch the share count and credit-readouts next. The clearest single number to check in the next quarter is the diluted share count, which the filing reports at 21.7 million: any meaningful change there will show whether this quarter’s per‑share math was a one‑time financing effect or the start of sustained EPS lift.
Diluted shares outstanding: 21.7 million at June 30, 2026 (Nicolet Bankshares 10-Q filed 2026-07-31).