Nicolet National Bank to acquire Commerce State Bank

All-stock deal valued at $126.9 million

Commerce State Bank headquarters
Commerce State Bank headquarters in West Bend.

Last updated on February 19th, 2020 at 04:53 pm

The parent company of Green Bay-based Nicolet National Bank will acquire West Bend-based Commerce State Bank in an approximately $126.9 million, all-stock deal, the two banks announced in a joint statement Monday.

While the board of directors at each bank approved the deal, the acquisition, which is expected to close in the third quarter of 2020, still needs regulatory and shareholder approval.

The proposed deal follows Nicolet National Bank’s acquisition of Choice Bank, First National Bank Fox Valley and Baylake Bank over the last five years, positioning Nicolet National Bank as one of the 10 largest banks in the state and the third largest bank headquartered in Wisconsin in terms of market share.

“Both Nicolet and Commerce are entrepreneurial organizations that know what it’s like to build a business from scratch,” Nicolet National Bank president and chief executive officer Mike Daniels said in a statement. “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.”

Following the acquisition, Nicolet National Bank would expand into West Bend, Sheboygan and the Milwaukee suburbs, which is where Commerce State Bank branches are currently located. All Commerce State Bank branches will become Nicolet National Bank branches.

Joe Fazio
Joe Fazio

“We have known Nicolet for a long time and we like their reputation for doing things the right way,” Commerce State Bank chief executive officer Joe Fazio said in a statement. “We are going to leverage the combined strengths of Commerce and Nicolet, which are our people and relationship-focused attitudes, to accelerate our growth.”

Commerce State Bank shareholders will receive 1.15 shares of Nicolet stock for every share of Commerce stock, according to the terms of the acquisition. Nicolet is listed on the Nasdaq at $72.32 per share as of Friday – stock markets are closed for President’s Day.

The acquisition also calls for resetting the exchange ratio should Nicolet stock drop below $62 or rise above $82 per share.

If approved, the deal would bring Nicolet National Bank’s assets to $4.3 billion, deposits to $3.6 billion and loans to $3.2 billion, as Commerce would represent approximately 16% of the combined company’s year-end assets, according to a press release. Nicolet National Bank reported $3.6 billion in assets at the end of the fourth quarter of 2019.

Post-acquisition, Fazio will join the board of directors of Nicolet BankShares, the bank’s parent company, as well as Nicolet National Bank. Tom Hopp and Dave Borchardt, Commerce’s president and chief financial officer/chief operating officer, respectively, will join Nicolet National Bank.

Nicolet National Bank has 610 employees while Commerce State Bank has 77 employees. Daniels expects most employees to stay with the combined bank, but said there would be some “efficiencies and some job eliminations.”

Founded in 2000, Nicolet National Bank has 39 branches through northeast and central Wisconsin as well as the upper peninsula of Michigan.

Commerce State Bank opened its first branch in West Bend in 2005 and has since opened branches in Elm Grove, Sheboygan and Cedarburg. It has a total of $708 million in assets.

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