Nicolet Bankshares Plans To Buy Mackinac Financial Corporation; Shares Slide 8%

Nicolet Bankshares, Inc. has reached a definitive merger agreement to acquire Mackinac Financial Corporation. The proposed acquisition will result in the holding company assuming control of mBank, Mackinac’s banking subsidiary. Nicolet Bankshares’ stock fell 7.97% on Tuesday following the announcement.

A merger between Nicolet Bankshares (NCBS) and Mackinac will result in a combined company with $6.1 billion in total assets. It will also have about $5.2 billion in deposits and $3.9 billion in loans. Mackinac will account for about 25% of the combined company’s total assets.

The proposed acquisition is an important step as Nicolet Bankshares seeks to accelerate growth. According to Nicolet National Bank’s CEO and President, Mike Daniels, the deal is all about the community’s characteristics that the combined company will serve.

Daniels stated, “Together, we will combine two organizations that understand the positive impact that a strong community bank can make. We look forward to becoming an integral part of the Upper Peninsula and Northern Michigan.”

Mackinac shareholders are entitled to 0.22 shares of Nicolet’s common stock and $4.64 for each Mackinac share held as part of the definitive agreement. The 80% stock and 20% cash deal translates to a share purchase price of $23.21, implying a total transaction value of $248 million.

After losing about 10% in market value in 2020, Nicolet shares are up about 17% year to date. (See Nicolet Bankshares stock analysis on TipRanks)

Buoyed by Nicolet Bancshare’s 4Q20 earnings beat and the raising of 2021 estimates, Maxim Group’s analyst Michael Diana reiterated a Buy rating on the stock in January. The analyst has an $87 price target on the stock implying 11.7% upside potential to current levels.

Diana stated, “We believe that Nicolet deserves a premium based on its superior net interest margin, core deposit funding, and non-interest income contribution, as well as its record of successfully integrating four accretive acquisitions in the past four years.”

Consensus among analysts is that Nicolet Bancshares is a Moderate Buy based on 1 Buy and 2 Holds. The average analyst price target at $78 implies 0.18% upside potential to current levels.

On the TipRanks’ Smart Score rating system, NCBS scores a 4 out of 10, signaling neutral performance.