Cedar Lake Sales open water

Commerce Financial Holdings, Inc. in West Bend sold to Nicolet Bankshares, Inc.

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February 17, 2020 – West Bend, WI – Nicolet Bankshares, Inc. (NASDAQ: NCBS) (“Nicolet”) and Commerce Financial Holdings, Inc. (“Commerce”) today jointly announce the execution of a definitive merger agreement, pursuant to which Nicolet will acquire Commerce and its wholly-owned banking subsidiary, Commerce State Bank (“Commerce Bank”).

Based on the financial results as of December 31, 2019, the combined company will have pro forma total assets of $4.3 billion, deposits of $3.6 billion and loans of $3.2 billion, as Commerce would represent approximately 16% of the combined company’s year-end assets.

Mike Daniels, President and CEO of Nicolet National Bank said, “We are excited to partner with great people who have a purpose very complementary to ours: to serve our customers, shareholders, and each other. Both Nicolet and Commerce are entrepreneurial organizations that know what it’s like to build a business from scratch. This quality allows us to relate to each other and our customers, and will be a driving force as we move toward integrating our two cultures in the coming quarters.”

Bob Atwell, CEO and Chairman of Nicolet said, “In each merger, we have purposefully found partners who focus on serving customers and the community.  When we combine our resources and cultures, we can positively impact the community banking landscape of Wisconsin.  The geography isn’t as important as the characteristics of the communities and the passion of the people.”

Joe Fazio, CEO of Commerce said, “We have known Nicolet for a long time and we like their reputation for doing things the right way.  We are going to leverage the combined strengths of Commerce and Nicolet, which are our people and relationship-focused attitudes, to accelerate our growth.  The time feels right for the next chapter.”

Jack Enea, Chairman of Commerce said, “This merger creates an opportunity for shareholders to rapidly get to the next level of our strategic plan.  We have created a strong bank that centers on talented and experienced people.  That model will continue and expand through our combination with Nicolet.”

Transaction Information

Under the terms of the merger agreement, Nicolet will acquire Commerce with Nicolet being the surviving corporation. In the merger, Commerce shareholders shall receive 1.15 shares of Nicolet common stock for each share of Commerce stock. Based on Nicolet’s closing price of $72.32 as of February 14, 2020 the merger consideration is valued at approximately $129.6 million, which excludes Nicolet’s pre-existing ownership of Commerce shares.

The merger agreement provides for a cap and collar to potentially re-set the exchange ratio or change the mix of consideration should the Nicolet Common Stock Price, as defined in the merger agreement, rise above $82.00 per share, or fall below $62.00 per share.

The estimated transaction value is a 1.9 multiple of Commerce’s tangible book value as of December 31, 2019 and equates to approximately 18x Commerce’s 2019 after-tax income. Additional assumptions and metrics can be found with the attached Financial Supplement.

Leadership/Employee Information

Post-merger, Joe Fazio will join the Board of Directors of Nicolet Bankshares and Nicolet National Bank. Tom Hopp and Dave Borchardt, Commerce’s President and CFO/COO, respectively, will join Nicolet National Bank.  All customer-facing employees of Commerce are expected to stay on in the same capacity.

Approvals and Closing Date

The transaction has been unanimously approved by the boards of directors of both companies.  It is subject to Commerce shareholder approval, regulatory approvals and other customary closing conditions and is expected to close in the third quarter of 2020.  Upon consummation of the transaction, all branch offices of Commerce Bank are expected to open as Nicolet National Bank branches.

Advisors

Bryan Cave Leighton Paisner LLP served as legal counsel to Nicolet in this transaction. Hillworth Bank Partners served as financial advisor to Commerce, and Reinhart Boerner Van Deuren s.c. served as Commerce’s legal counsel.

About Nicolet Bankshares, Inc.

Nicolet Bankshares, Inc. is the bank holding company of Nicolet National Bank, a growing, full-service, community bank providing services ranging from commercial and consumer banking to wealth management and retirement plan services. Founded in Green Bay in 2000, Nicolet National Bank operates branches in Northeast and Central Wisconsin and the upper peninsula of Michigan.

About Commerce Financial Holdings, Inc.

Commerce Financial Holdings, Inc. is the bank holding company of Commerce State Bank.  Opened in August 2005, Commerce State Bank is a full-service, state-chartered bank headquartered in West Bend with additional offices in Cedarburg, Elm Grove and Sheboygan. Today, the bank has total assets of $708 million, making it the 32nd largest bank in the State of Wisconsin. Commerce State Bank is dedicated to helping communities through its Random Acts of Commerce program.

Important Information for Investors

This communication relates to the proposed merger transaction involving Nicolet and Commerce. In connection with the proposed merger, Nicolet and Commerce will file a proxy statement/prospectus on Form S-4 and other relevant documents concerning the merger with the Securities and Exchange Commission (the “SEC”). BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, COMMERCE INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENT/PROSPECTUS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT NICOLET, COMMERCE AND THE PROPOSED MERGER. When available, the proxy statement/prospectus will be delivered to shareholders of Commerce. Investors may obtain copies of the proxy statement/prospectus and other relevant documents (as they become available) free of charge at the SEC’s website (www.sec.gov). Copies of the documents filed with the SEC by Nicolet will be available free of charge on Nicolet’s website at www.nicoletbank.com.

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