Best is Yet to Come Post First Full Quarter w/ MOFG; Bump Up Ests/PT & Reit OW

研报英文原文证据摘录

Best is Yet to Come Post First Full Quarter w/ MOFG; Bump Up Ests/PT & Reit OW

C O M P A NY N O TE

J u l y 2 1 , 2 0 2 6

 Mgmt.’s pipeline commentary was upbeat across Des Moines, Twin Cities, and its metro

Wisconsin markets, particularly given existing production talent capabilities to move up-

market in these larger MSAs with NIC’s larger hold limits post-MOFG deal consummation.

NIC is also continuing to win smaller commercial relationships across its footprint.

Moreover, we understand targeted MOFG-related production talent retention (both

commercial- and wealth management-related) is tracking very positively for NIC.

 We continue to model 2% LQA loan growth during 2H26 and 4% YoY growth in 2027. Our

outlook could prove to be overly conservative as NIC continues to have success on the

new client acquisition front by leveraging high-touch and more relationship-based model

across its legacy markets and with the addition of MOFG’s complementary footprint.

 EOP deposits of $12.5B (-1% LQ) were 1% below PSCe. Mgmt. attributed a ~$220M step-

down (-12% LQ) in interest-bearing DDA largely to municipal rate-related attrition. EOP

core deposits (ex. CDs and brokered) were flat LQ but should resume growing in 2H26.

 The L/D ratio ticked up to 86% (vs. 85% at 3/31) and we model it drifting up toward 88%-

89% during 2H26/2027 as NIC continues to optimize and reduce higher cost funding.

Stable Credit Metrics in 2Q; Benign Asset Quality Expectations Unchanged

 NPAs declined 6% LQ to $75.0M (or -4 bps LQ to 0.69% of loans and OREO) as negative

credit migration at legacy NIC remained negligible. We also understand that

criticized/classified balances (down ~$50M) and watchlist (down ~$50M) have improved

since the MOFG deal closed in mid-February.