111 North Washington Street
Green Bay, Wisconsin 54301
(920) 430-1400

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Approximate Date of Commencement of Proposed Sale of the Securities to the Public:    As soon as practicable after the effective date of this Registration Statement.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, please check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

(1)

The estimated maximum number of shares of Nicolet Bankshares, Inc. (“Nicolet”) common stock to be issuable upon completion of the merger of Nicolet and Baylake Corp. (“Baylake”), as described herein and pursuant to the terms of the Agreement and Plan of Merger by and between Nicolet and Baylake, dated as of September 8, 2015, and attached to the proxy statement-prospectus as Appendix A , and assuming that no cash will be paid by the registrant in connection with the merger. Pursuant to Rule 416, this Registration Statement also covers an indeterminate number of shares of common stock as may become issuable as a result of stock splits, stock dividends or similar transactions.

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(2)

The proposed maximum aggregate offering price of the registrant’s common stock was calculated based upon the market value of shares of Baylake common stock (the securities to be cancelled in the merger) in accordance with Rules 457(c) and 457(f) under the Securities Act as follows: (A) the product of  (i) $14.30, the average of the high and low prices per share of Baylake common stock as reported on the Nasdaq Capital Market on November 20, 2015, and (ii) the estimated maximum number of shares of Baylake common stock that may be exchanged in the merger.

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(3)

Estimated solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act and computed pursuant to Rules 457(f) and 457(c) under the Securities Act, based on a rate of  $100.70 per $1,000,000 of the proposed maximum aggregate offering price.

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The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this joint proxy statement-prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This joint proxy statement-prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Preliminary — Subject to Completion Dated November 24, 2015

PROPOSED MERGER — YOUR VOTE IS VERY IMPORTANT

The boards of directors of Baylake Corp. (“Baylake”) and Nicolet Bankshares, Inc. (“Nicolet”) have each unanimously approved a transaction that will result in the merger of Baylake with and into Nicolet. Nicolet will be the surviving bank holding company in the merger. If the merger is completed, Baylake shareholders will receive 0.4517 shares of Nicolet common stock for each of their Baylake shares. As permitted by the terms of the merger agreement, the Baylake board of directors expects to declare and pay a one-time special cash dividend of up to $0.40 per share to Baylake shareholders immediately prior to the effective time of the merger, subject to the satisfaction of the closing conditions set forth in the merger agreement. After the merger is completed, we expect that current Nicolet shareholders will own approximately [•]% of the outstanding shares of common stock of the combined company, and current Baylake shareholders will own approximately [•]% of the outstanding shares of common stock of the combined company.

Nicolet’s common stock commenced trading on the Nasdaq Capital Market under the symbol “NCBS” on [•], 2016. Prior to that time, Nicolet’s common stock was listed on the OTCBB, also under the symbol “NCBS.” The closing price of Nicolet common stock was $33.25 per share on September 8, 2015, the last trading day before public announcement of the merger. Baylake’s common stock currently trades on the Nasdaq Capital Market under the symbol “BYLK.” The closing price of Baylake common stock was $12.85 per share on September 8, 2015, the last trading day before public announcement of the merger. The shares of Nicolet common stock issued pursuant to the merger will be registered under the Securities Act of 1933, as amended, and will trade on the Nasdaq Capital Market.

We cannot complete the merger unless we obtain the necessary governmental approvals and unless the shareholders of both companies approve the merger agreement and the transactions contemplated thereby. Each of us is asking our shareholders to consider and vote on this merger proposal at our respective companies’ special meetings of shareholders. Whether or not you plan to attend your company’s meeting, please take the time to vote by following the voting instructions included in the enclosed proxy card. If you sign, date and mail your proxy card without indicating how you want to vote, your proxy will be counted as a vote FOR the merger agreement and the transactions contemplated thereby. If you do not vote your shares as instructed in the enclosed proxy card, or if you do not instruct your broker how to vote any shares held for you in “street name,” the effect will be a vote against the merger.

The places, dates and times of the shareholders’ meetings are as follows:

This document contains a more complete description of the shareholders’ meetings and the terms of the merger. We urge you to review this entire document carefully. You may also obtain information about Nicolet and Baylake from documents that each has filed with the Securities and Exchange Commission.

Nicolet and the Baylake boards of directors recommend that the Nicolet and Baylake shareholders, respectively, vote FOR approval of the merger agreement and the transactions contemplated thereby, and FOR the non-binding resolution approving certain merger-related compensation.

You should read this entire joint proxy statement-prospectus carefully because it contains important information about the merger. In particular, you should read carefully the information under the section entitled “Risk Factors,” beginning on page 15 .

Neither the Securities and Exchange Commission nor any state securities regulators have approved or disapproved of the securities to be issued in the merger or determined if this document is truthful or complete. Any representation to the contrary is a criminal offense.

The shares of Nicolet common stock to be issued in the merger are not deposits or savings accounts or other obligations of any bank or savings association and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

This joint proxy statement-prospectus is dated [•], and is first being mailed to Baylake’s and Nicolet’s shareholders on or about [•].

PLEASE NOTE

We have not authorized anyone to provide you with any information other than the information included in this joint proxy statement-prospectus and the documents to which we refer you herein. If someone provides you with other information, please do not rely on it as being authorized by us.

This joint proxy statement–prospectus has been prepared as of the date on the cover page. There may be changes since that date in the affairs of Baylake or Nicolet that are not reflected in this document.

As used in this joint proxy statement-prospectus, the terms “Baylake” and “Nicolet” refer to Baylake Corp. and Nicolet Bankshares, Inc., respectively. Where the context requires, “Baylake” may refer to Baylake Corp. and its subsidiary, Baylake Bank. Similarly, “Nicolet” may refer to Nicolet Bankshares, Inc. and its subsidiary, Nicolet National Bank.

Unless the context indicates otherwise, all references to the “merger agreement” refer to the Agreement and Plan of Merger dated September 8, 2015, between Nicolet and Baylake.

BAYLAKE CORP.
217 North Fourth Avenue
Sturgeon Bay, Wisconsin 54235-2405

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON [•], 2015

To the Shareholders of Baylake Corp.:

Baylake Corp. will hold a special meeting of shareholders at [•], on [•], 2016, at [•][•].m., local time, for the following purposes:

1.    Merger .   To authorize, approve and adopt the Agreement and Plan of Merger by and between Baylake Corp. and Nicolet Bankshares, Inc., pursuant to which Baylake will merge with and into Nicolet, and the transactions contemplated by the merger agreement. A copy of the merger agreement is attached to the accompanying joint proxy statement-prospectus as Appendix A .

2.    Non-Binding Vote on Compensation.    To vote, on a non-binding advisory resolution, to approve compensation that may become payable to Robert J. Cera in connection with the merger.

3.    Adjournment.    To adjourn the special meeting to a later date or dates, if necessary or appropriate, including to solicit additional proxies to approve the merger agreement and the transactions contemplated by the merger agreement.

4.    Other business.    To transact such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting.

Only shareholders of record at the close of business on [•], the record date, are entitled to notice of and to vote at the special meeting or any adjournments or postponements of the special meeting. The approval of the Agreement and Plan of Merger requires the affirmative vote of at least a majority of the shares of Baylake common stock outstanding on the record date.

After careful consideration, your board of directors supports the merger and unanimously recommends that you vote FOR approval of the Agreement and Plan of Merger and the transactions contemplated thereby, FOR approval, in a non-binding resolution, of compensation that may become payable to Robert J. Cera in connection with the merger, and FOR the adjournment proposal.

YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the special meeting, please take the time to vote by following the instructions in the enclosed proxy card. You may revoke your proxy at any time before it is voted by giving written notice of revocation to Baylake’s Corporate Secretary or by filing a properly executed proxy card of a later date with Baylake’s Corporate Secretary at or before the meeting. You may also revoke your proxy by attending the meeting, giving oral notice of your revocation, and voting your shares in person at the meeting.

We do not know of any other matters to be presented at the special meeting, but if other matters are properly presented, the persons named as proxies will vote on such matters at their discretion.

By Order of the Board of Directors

[•]
Robert W. Agnew
Chairman of the Board

Sturgeon Bay, Wisconsin
 [•]

NICOLET BANKSHARES, INC.
111 North Washington Street
Green Bay, Wisconsin 54301

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON [•]

To the Shareholders of Nicolet Bankshares, Inc.:

Nicolet Bankshares, Inc. will hold a special meeting of shareholders at [•], on [•], 2016, at [•][•].m., local time, for the following purposes:

1.    Merger and Share Issuance.    To authorize, approve and adopt the Agreement and Plan of Merger, by and between Nicolet Bankshares, Inc. and Baylake Corp., pursuant to which Baylake will merge with and into Nicolet, and the transactions contemplated by the merger agreement, including the issuance of up to 4,500,000 shares of Nicolet common stock in the merger. A copy of the merger agreement is attached to the accompanying joint proxy statement-prospectus as Appendix A .

2.    Non-Binding Vote on Compensation.    To vote, on a non-binding advisory resolution, to approve compensation that may become payable to Robert J. Cera in connection with the merger.

3.    Adjournment.    To adjourn the special meeting to a later date or dates, if necessary or appropriate, including to solicit additional proxies to approve the merger agreement and the transactions contemplated by the merger agreement.

4.    Other business.    To transact such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting.

Only shareholders of record at the close of business on [•], the record date, are entitled to notice of and to vote at the special meeting or any adjournments or postponements of the special meeting. The approval of the Agreement and Plan of Merger requires the affirmative vote of at least a majority of the shares of Nicolet common stock outstanding on the record date.

After careful consideration, your board of directors supports the merger and unanimously recommends that you vote FOR approval of the Agreement and Plan of Merger and the transactions contemplated thereby, including the share issuance, FOR approval, in a non-binding resolution, of compensation that may become payable to Robert J. Cera in connection with the merger, and FOR the adjournment proposal.

YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the special meeting, please take the time to vote by following the voting instructions included in the enclosed proxy card. You may revoke your proxy at any time before it is voted by giving written notice of revocation to Nicolet’s Corporate Secretary or by filing a properly executed proxy card of a later date with Nicolet’s Corporate Secretary at or before the meeting. You may also revoke your proxy by attending the meeting, giving oral notice of your revocation, and voting your shares in person at the meeting.

We do not know of any other matters to be presented at the special meeting, but if other matters are properly presented, the persons named as proxies will vote on such matters at their discretion.

By Order of the Board of Directors

[•]
Robert B. Atwell
Chairman, President and Chief Executive Officer

Green Bay, Wisconsin
[•]

APPENDIX A

AGREEMENT AND PLAN OF MERGER BY AND BETWEEN NICOLET BANKSHARES, INC. AND BAYLAKE CORP.

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APPENDIX B

OPINION OF KEEFE, BRUYETTE & WOODS, INC.

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APPENDIX C

OPINION OF SANDLER O’NEILL & PARTNERS, L.P.

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QUESTIONS AND ANSWERS

Q:

On what am I being asked to vote?

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A:

You are being asked to approve the Agreement and Plan of Merger by and between Nicolet and Baylake, which we may refer to as the merger agreement, and which provides for the merger of Baylake with and into Nicolet, and the transactions contemplated thereby. As part of their approval of the merger agreement and the merger, Nicolet shareholders are also being asked to approve the issuance of stock in the merger to Baylake shareholders. Shareholders of both Baylake and Nicolet are being asked to vote on non-binding advisory resolutions approving certain merger-related compensation, and to approve a proposal to adjourn their respective special meetings, if necessary or appropriate, including to solicit additional proxies to approve the merger agreement and the transactions contemplated by the merger agreement.

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Q:

Why have Nicolet and Baylake decided to merge?

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A:

Nicolet and Baylake agreed to merge for strategic reasons that benefit both parties. Their boards of directors believe that the merger will provide the combined institution with sufficient opportunities for enhanced revenue growth.

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Q:

How does my board of directors recommend I vote on the merger agreement?

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A:

The boards of directors of Baylake and Nicolet have unanimously approved and adopted the merger agreement and recommend that their respective shareholders vote “FOR” approval of the merger agreement and the transactions contemplated thereby, “FOR” approval, in a non-binding advisory resolution, of the merger-related compensation proposals and “FOR” approval of the respective adjournment proposals.

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Q:

What will happen to Nicolet National Bank and Baylake Bank as a result of the merger?

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A:

If the merger occurs, Baylake Bank, which is a wholly owned subsidiary of Baylake, will be merged with and into Nicolet National Bank, which is a wholly owned subsidiary of Nicolet. We may refer to this transaction as the “bank merger.” Nicolet National Bank will be the surviving entity in the bank merger.

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Q:

What vote is required to approve the merger agreement and the transactions contemplated thereby?

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A:

The merger cannot be completed unless a majority of the outstanding shares of each of Nicolet and Baylake vote to approve the merger agreement and the transactions contemplated thereby.

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Q:

What will I receive in the merger?

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A:

Baylake shareholders will receive 0.4517 shares of Nicolet common stock for each share of Baylake common stock they hold. In lieu of any fractional shares of Nicolet common stock, Baylake shareholders will receive an amount in cash (without interest and rounded to the nearest whole cent) as determined by multiplying the volume weighted average closing price of Nicolet common stock on Nasdaq Capital Market over the 20 trading day period ending on the third trading day prior to the closing date by the fractional share of Nicolet common stock to which such former holder would otherwise be entitled. After the merger is completed, we expect that current Nicolet shareholders will own approximately [•]% of the outstanding shares of common stock of the combined company, and current Baylake shareholders will own approximately [•]% of the outstanding shares of common stock of the combined company. See page [•] for further explanation.

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In addition, the merger agreement allows Baylake to continue paying its regular quarterly dividends of $0.09 per share (the first such dividend having been declared on October 20, 2015 and payable on December 1, 2015 to shareholders of record as of November 12, 2015) and to pay a special cash dividend of up to $0.40 per share immediately prior to consummation of the merger. Though Baylake’s board of directors currently expects to pay both the regular quarterly dividend and the special dividend, the payment of such dividends is not guaranteed, nor is it a condition to the closing of the merger.

i

Q:

What are the federal income tax consequences of the merger to me?

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A:

Bryan Cave LLP has issued an opinion, which it will confirm as of the effective date of the merger, that the merger will qualify as a reorganization under Section 368(a) of the Internal Revenue Code and that Baylake shareholders will not recognize gain for U.S. federal income tax purposes as a result of the surrender of Baylake common stock for receipt of Nicolet common stock. However, shareholders may recognize gain for U.S. federal income tax purposes to the extent of any cash received in lieu of fractional shares and for any dividends, including the special dividend. Your tax treatment will depend on your specific situation and many variables not within our control. You should consult your own tax advisor for a full understanding of the tax consequences of the merger to you.

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Q:

When do you expect the merger to be completed?

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A:

We are working to complete the merger in the second quarter of 2016, shortly after the special shareholders’ meetings, assuming Baylake and Nicolet shareholders and the applicable bank regulatory agencies approve the merger and other conditions to closing are met. We could experience delays in meeting these conditions or be unable to meet them at all. See “Risk Factors” beginning on page [•] for a discussion of these and other risks relating to the merger.

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Q:

Will I be able to sell the Nicolet common stock I receive pursuant to the merger?

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A:

Yes. The Nicolet common stock issued pursuant to the merger will be registered under the Securities Act of 1933, as amended, and Nicolet will cause the shares to be issued in the merger to be listed on the Nasdaq Capital Market. All shares of Nicolet common stock that you receive pursuant to the merger will be freely transferable unless you are deemed an affiliate of Nicolet. Affiliates of Nicolet will, be able to sell the shares they receive pursuant to the merger subject to applicable securities regulations. See “Resale of Nicolet Common Stock” on page [•].

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Q:

What should I do now?

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A:

After carefully reading and considering the information in this joint proxy statement-prospectus, follow the voting instructions included in the enclosed proxy card in order to vote your shares as soon as possible, so that your shares will be represented at your company’s special meeting.

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NOTE: If you sign and send in your proxy card and do not indicate how you want to vote, your proxy will be voted “ FOR ” the proposal to approve the merger agreement and the transactions contemplated thereby, “ FOR ” the non-binding advisory resolution to approve certain merger-related compensation, and “ FOR ” the adjournment proposal.

Q:

What if I do not vote?

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A:

If you do not vote, it will have the same effect as voting your shares against the merger.

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Q:

If my shares are held in “street name” by my broker, will my broker automatically vote my shares for me?

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A:

No. Your broker will vote your shares of stock on the merger agreement only if you provide instructions on how to vote. You should instruct your broker on how to vote your shares, following the directions your broker provides. If you do not provide instructions to your broker, and your broker submits an unvoted proxy, the resulting broker nonvote will not be counted toward a quorum and your shares will not be voted at your company’s special meeting, which will have the same effect as voting your shares against the merger.

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Q:

Can I change my vote after I deliver my proxy?

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A:

Yes. You can change your vote at any time before your proxy is voted at the special meeting. You can do this in three ways. First, you can revoke your proxy by giving written notice of revocation to your company’s Corporate Secretary. Second, you can submit a new properly executed proxy with a later date to your company’s Corporate Secretary at or before your company’s special meeting. The latest proxy actually received before the meeting will be counted, and any earlier proxies will be revoked. Third, you can attend your company’s special meeting, give oral notice of your revocation, and vote

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ii

your shares in person. Any earlier proxy will be thereby revoked. However, simply attending the meeting without voting will not revoke your proxy. If you hold shares in “street name,” you must contact your broker prior to your company’s special meeting if you wish to revoke your proxy or change your vote.

Q:

Should I send in my stock certificates now?

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A:

No. If you are a Baylake shareholder and the merger is completed, Nicolet’s exchange agent will send all Baylake shareholders written instructions for exchanging Baylake common stock certificates for the merger consideration they are entitled to receive. In any event, do not send your stock certificates with your proxy card.

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If you are a Nicolet shareholder, your shares of Nicolet common stock will remain outstanding and unchanged in the merger. Consequently, you will not need to surrender your stock certificates or exchange them for new ones.

Q:

Who can help answer my questions?

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A:

If you would like additional copies of this document, or if you would like to ask any questions about the merger and related matters, you should contact:

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For Baylake shareholders: Robert J. Cera, Baylake Corp., 217 North Fourth Avenue, Sturgeon Bay, Wisconsin 54235-2405, telephone: (920) 746-5418.

For Nicolet shareholders: Robert B. Atwell, Nicolet Bankshares, Inc., 111 North Washington Street, Green Bay, Wisconsin 54301, telephone: (920) 430-1400.

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5

6

7

8

UNAUDITED COMPARATIVE PER SHARE DATA

The following summary presents per share information for Nicolet and Baylake on a historical, pro forma combined and pro forma diluted equivalent basis for the periods and as of the dates indicated below. The pro forma information gives effect to the merger using the purchase method of accounting. This information should be read in conjunction with the companies’ historical financial statements and related notes as well as financial data included elsewhere in or incorporated by reference into this joint proxy statement-prospectus. The pro forma information should not be relied upon as being indicative of the historical results the companies would have had if the merger had occurred before such periods or the future results that the companies will experience after the merger.

The pro forma combined net income per diluted share has been computed based on the diluted average number of outstanding common shares of Nicolet adjusted for the additional shares to be issued in connection with the merger, after giving effect to the acquisition of NEWBI by Baylake. Baylake merger equivalent net income per diluted share is based on the number of shares of Nicolet common stock into which each share of Baylake common stock will be converted in the merger.

Baylake paid per share cash dividends of  $0.25 and $0.30 on its common stock for the nine months ended September 30, 2015 and for the year ended December 31, 2014, respectively. Nicolet does not have a history of paying dividends on its common stock and does not intend to pay common stock dividends following the merger. Therefore, the pro forma dividend information has been omitted from the table below as it is not meaningful.

The pro forma combined net book value per share is based upon the pro forma combined equity of Nicolet divided by the pro forma number of outstanding shares of the combined companies. The Baylake merger equivalent net book value per share is based on the number of shares of Nicolet common stock into which each share of Baylake common stock will be converted in the merger.

The foregoing assumes that the shares of Nicolet common stock to be issued will have a value of $32.87 per share, which represents the volume-weighted average price based on the trading days of August 28, 2015 through September 25, 2015.

(1)

Calculated by multiplying the pro forma combined information by the exchange ratio of 0.4517.

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9

*

NEWBI and Pro Forma Adjustments includes NEWBI’s September 30, 2015 unaudited balance sheet as provided by NEWBI to Baylake’s management, with adjustments as detailed in footnotes 1 – 4 below, made to record the consummation of the pending transaction between Baylake and NEWBI (expected to close in December 2015), assuming NEWBI’s book value approximated its fair value. Also includes impacts of certain pre-merger costs and activities to be incurred by Baylake prior to and related to the merger of Nicolet and Baylake, as detailed in footnotes 5 – 7 below.

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(1)

Adjustments to record the consummation of Baylake’s acquisition of NEWBI, for cash and common stock consideration per terms of that transaction. Equity adjustment consists of elimination of NEWBI’s book equity of  $9,635 at book value and issuance of new equity of  $4,044 (i.e. 286 shares of Baylake common stock for NEWBI common shares, issued at $14.15 per share, Baylake’s closing stock price on September 30, 2015).

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(2)

Beginning NEWBI other liabilities of  $347 are adjusted by recording an additional liability of  $600 net of tax for Baylake’s estimated NEWBI acquisition expenses, which also negatively impacts equity.

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(3)

Adjustments to record goodwill of  $223 associated with the NEWBI transaction, the net result of paying $9,858 in consideration (common stock of  $4,044 and cash of  $5,814), for net assets purchased of  $9,635.

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(4)

Beginning NEWBI cash of  $4,431 and NEWBI holding company debt of  $203 are adjusted for net cash recorded from the new issuance of  $6,000 in Baylake holding company debt and payment of $5,814 of cash consideration by Baylake to NEWBI shareholders.

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(5)

Baylake special cash dividend paid to common shareholders of record as provided for in the merger agreement prior to the merger of Nicolet and Baylake, representing a reduction to Baylake equity and a cash outlay of  $3,842 (i.e. $0.40 per share on 9,606 outstanding common shares).

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(6)

Recording of additional liability of  $3,999 net of taxes for estimated merger expenses incurred by Baylake for the merger, including investment banker fees, severance pay and change of control contracts, accelerated vesting on certain equity awards, legal costs, contract terminations, and other related expenses, which also negatively impacts equity.

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(7)

Total equity impact of Baylake’s pre-merger expenses of  $3,999 net of tax and special dividend of $3,842 resulting in net equity adjustment of  $7,841.

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(8)

Adjustment to mark Baylake’s HTM investments up to fair value, by $1,084.

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(9)

Adjustment to eliminate Baylake’s allowance for loan loss of  $6,510 and mark Baylake’s loans down to estimated fair value, by ($26,600), which includes a credit and an interest rate component.

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(10)

Adjustment to mark Baylake’s fixed assets up to fair value, by $6,000.

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(11)

Adjustment to mark Baylake’s other real estate owned down to fair value, by ($1,500).

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(12)

Eliminate existing Baylake goodwill of ($7,445).

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(13)

Record estimate of new core deposit intangible of  $15,000 based on total non-maturing deposits at a 2% premium.

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(14)

Adjustments to mark acquired assets up (or down) to estimated fair values at September 30, 2015 (a) investment in processing company by $4,000 (b) deferred tax adjustments related to all marks noted in footnotes 8 – 11, 14(a), 15 and 16 at a 40% tax rate, plus additional tax adjustment for life insurance redemption of ($1,800).

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(15)

Adjustment to mark Baylake’s Federal Home Loan Advances to fair value by ($400) and to reflect current market rate of interest on deposits of ($100).

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(16)

Adjustment to mark Baylake’s junior subordinated debentures (trust preferred securities) to estimated fair value by ($7,200).

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(17)

(18)

Issuance of 4,310 shares of Nicolet common stock at a volume weighted average price of  $32.87 based on the trading days of August 28 – September 25, 2015, inclusive, for total consideration of  $141,681, cash paid for fractional shares estimated at $54, expenses related to the transaction of  $675, for total consideration of  $142,410 paid for net assets purchased of  $106,653 resulting in goodwill of  $35,757.

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(19)

Nicolet to write off its investment holding of 122 shares of Baylake common stock (carried at the Baylake market price of  $14.15 on September 30, 2015) for a reduction to investments of  $1,725, an increase of  $690 to the deferred tax liability and a $1,035 net equity reduction.

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(20)

Issuance of 4,310 shares of Nicolet common stock based on exchange ratio of 0.4517 times 9,542 shares of Baylake common stock subject to exchange (i.e. 9,320 common shares outstanding, plus 286 shares for NEWBI, plus 58 common shares for Baylake restricted stock units immediately vesting, less 122 shares of Baylake common stock held by Nicolet pre-merger and not subject to conversion).

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12

*

NEWBI income statement was excluded from this pro forma income statement as it was insignificant to net income (less than 1% of pro forma combined net income).

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13

*

NEWBI income statement was excluded from this pro forma income statement as it was insignificant to net income (less than 1% of pro forma combined net income).

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(1)

Depreciation expense resulting from premises pro forma adjustment using straight-line over 25-year estimated useful life.

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(2)

Fair value adjustment on FHLB advances and fair value adjustment for interest rate on deposits assuming straight-line over 3-year weighted average life.

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(3)

Amortization of core deposit intangible resulting from the fair value pro forma adjustment amortized over 10 years using sum-of-years-digits.

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(4)

Fair value adjustment on junior subordinated debenture (trust preferred securities) using straight line amortization over 30 years.

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(5)

Cost savings as a result of merger offset by additional salary expenses related to employment contract.

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(6)

No adjustment for the provision for loan loss is reflected in the pro forma statement of income.

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(7)

Baylake common stock will be exchanged in the merger at a ratio of 0.4517 shares of Nicolet common stock for each share of Baylake common stock. Basic shares represent those issued in the transaction as of January 1, 2014. Diluted shares give effect to the estimated Baylake equity awards outstanding at September 30, 2015 times the exchange ratio of 0.4517.

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(8)

Baylake 2014 diluted earnings per share included $372 related to earnings from assumed conversion of convertible debentures which was added to net income to arrive at the net income used for diluted earnings per share. This amount was not included in the pro forma combined diluted earnings per share calculation.

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(9)

Accelerated lease expense after tax of  $1 million on two Nicolet branches expected to be closed upon consummation of the merger; however, this one-time expense is not included in the pro forma results for the year ended December 31, 2014 as it is non-recurring (Section 506.02.a.ii of the Codified Financial Reporting Releases).

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consideration, we expect that the Federal Reserve, OCC and WDFI will review the capital position, safety and soundness, and legal and regulatory compliance matters and Community Reinvestment Act (“CRA”) matters. There can be no assurance as to whether other necessary approvals will be received, the timing of those approvals, or whether any conditions will be imposed.

The market price of Nicolet common stock after the merger may be affected by factors different from those affecting the market price of Baylake common stock or the Nicolet common stock currently.

The businesses of Nicolet and Baylake differ in some respects and, accordingly, the results of operations of Nicolet and the market price of Nicolet’s shares of common stock after the merger may be affected by factors different from those currently affecting the independent results of operations of each of Nicolet or Baylake. For a discussion of the businesses of Nicolet and Baylake and of certain factors to consider in connection with those businesses, see “Information About Baylake” at page [•] as well as “Information About Nicolet” at page [•].

The merger agreement limits both parties’ ability to pursue alternatives to the merger.

The merger agreement contains provisions that limit either party’s ability to discuss competing third-party proposals to acquire all or a significant part of either party or any of its subsidiaries. In addition, each party has agreed to pay the other a fee of  $7,000,000 if the other party terminates the agreement after such party’s board of directors withdraws or changes its recommendation of the merger agreement, or if the transaction is terminated to accept an Acquisition Proposal such party deems a Superior Proposal, as each term is defined in the merger agreement. These provisions might discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of Nicolet or Baylake from considering or proposing that acquisition, even if it were prepared to pay consideration with a higher per share price than that proposed in the merger, or might result in a potential competing acquirer proposing to pay a lower per share price to acquire Nicolet or Baylake than it might otherwise have proposed to pay.

Certain directors and executive officers of Nicolet have interests in the merger other than their interests as shareholders.

Certain directors and executive officers of Nicolet have interests in the merger other than their interests as shareholders. The board of directors of Nicolet was aware of these interests at the time it approved the merger. These interests may cause Nicolet’s directors and executive officers to view the merger proposal differently than you may view it. See “The Merger — Interests of Certain Persons in the Merger” at page [•].

Certain directors and executive officers of Baylake have interests in the merger other than their interests as shareholders.

Certain directors and executive officers of Baylake have interests in the merger other than their interests as shareholders. The board of directors of Baylake was aware of these interests at the time it approved the merger. These interests may cause Baylake’s directors and executive officers to view the merger proposal differently than you may view it. See “The Merger — Interests of Certain Persons in the Merger” at page [•].

Failure to complete the merger could negatively impact the stock price and future business and financial results of Baylake and/or Nicolet.

If the merger is not completed for any reason, including as a result of shareholders failing to approve the merger agreement and the merger, the ongoing business of Baylake and/or Nicolet may be adversely affected and, without realizing any of the benefits of having completed the merger, Baylake and/or Nicolet could be subject to a number of possible consequences, including the following:

•

either Baylake or Nicolet may be required, under certain circumstances, to pay a termination fee to the other;

​

16

•

both Baylake and Nicolet are subject to certain restrictions on the conduct of business prior to completing the merger, which may adversely affect their abilities to execute certain business strategies;

​

•

Baylake and/or Nicolet may experience negative impacts on their stock prices or from customers, regulators and employees;

​

•

the parties have incurred and will continue to incur certain costs and fees associated with the merger; and

​

•

matters related to the merger (including integration planning) may require substantial commitments of time and resources by the management and employees of Baylake and Nicolet, which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to Baylake and Nicolet as independent companies.

​

You will experience a substantial reduction in percentage ownership and voting power with respect to your shares as a result of the merger.

Shareholders will experience a substantial reduction in their respective percentage ownership interests and effective voting power through their stock ownership in Nicolet after the merger relative to their percentage ownership interest in Nicolet or Baylake prior to the merger. If the merger is consummated, current Baylake shareholders, including former NEWBI shareholders, would own approximately [•]% of Nicolet’s outstanding common stock, while current Nicolet shareholders would own the remaining [•]% (in each case, assuming the vesting and exercise of all outstanding options, restricted stock units and other equity awards). Consequently, all existing groups of shareholders will have less voting power per share in Nicolet following the merger than they currently have in Baylake or Nicolet prior to the merger. See “The Merger Agreement — What Baylake Shareholders will Receive in the Merger” at page [•].

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The cautionary statements in the “Risk Factors” section and elsewhere in this joint proxy statement-prospectus, and other risks detailed in the parties’ press releases, shareholder communications and other SEC filings, including the Form 10-Ks filed by Baylake and Nicolet for the year ended December 31, 2014, identify important factors and possible events that involve risk and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. Nicolet and Baylake do not intend to, and undertake no obligation to, update or revise any forward-looking statements, whether as a result of differences in actual results, changes in assumptions or changes in other factors affecting such statements.

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THE BAYLAKE SPECIAL SHAREHOLDERS’ MEETING

Purpose

Baylake shareholders are receiving this joint proxy statement-prospectus because on [•], 2015, the record date for a special meeting of shareholders to be held on [•], 2016, at [•] at [•][•].m., they owned shares of the common stock of Baylake Corp., and the board of directors of Baylake is soliciting proxies for the matters to be voted on at this special meeting, as described in more detail below. Each copy of this joint proxy statement-prospectus was mailed to holders of Baylake common stock on [•], and is accompanied by a proxy card for use at the meeting and at any adjournment(s) of the meeting.

At the meeting, Baylake shareholders will consider and vote upon the merger agreement and the transactions contemplated thereby and any other matters that are properly brought before the meeting, or any adjournments(s) of the meeting.

When you sign the enclosed proxy card or otherwise vote pursuant to the instructions set forth on the proxy card, you appoint the proxy holder as your representative at the meeting. The proxy holder will vote your shares as you have instructed in the proxy card, thereby ensuring that your shares will be voted whether or not you attend the meeting. Even if you plan to attend the meeting, we ask that you instruct the proxies how to vote your shares in advance of the meeting just in case your plans change. In the event that other matters arise at the special meeting, the proxy holder will vote your shares according to his or her discretion.

If you have not already done so, please complete, date and sign the accompanying proxy card and return it promptly in the enclosed, postage paid envelope or otherwise vote pursuant to the instructions set forth on the proxy card. If you do not vote your shares as instructed on the proxy card, or if you do not attend and cast your vote at the special meeting, the effect will be a vote against the merger agreement.

Record Date; Quorum and Vote Required

The record date for the Baylake special meeting is [•]. Baylake’s shareholders of record as of the close of business on that day will receive notice of and will be entitled to vote at the special meeting. As of the record date, there were [•] shares of Baylake common stock outstanding and entitled to vote at the meeting. The outstanding shares are held by approximately [•] holders of record.

The presence, in person or by proxy, of a majority of the shares of Baylake common stock entitled to vote on the merger agreement is necessary to constitute a quorum at the meeting. Each share of Baylake common stock outstanding on the record date entitles its holder to one vote on the merger agreement and any other proposal that may properly come before the meeting.

To determine the presence of a quorum at the meeting, Baylake will also count as present at the meeting the shares of Baylake common stock present in person but not voting, and the shares of common stock for which Baylake has received proxies but with respect to which the holders of such shares have abstained or signed without providing instructions as described in “Solicitation and Revocation of Proxies” below. Based on the number of shares of Baylake common stock outstanding as of the record date, at least [•] shares need to be present at the special meeting, whether in person or by proxy, to constitute a quorum.

Approval of the merger proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Baylake common stock as of the record date for the special meeting. Abstentions, shares not voted, and broker nonvotes will have the same effect as a vote against the merger proposal. Approval of the non-binding advisory resolution approving certain merger-related compensation and approval of the adjournment proposal each require that more votes be cast in favor of the proposal than against it; abstentions, shares not voted, and broker nonvotes will have no effect on these proposals.

As of the record date for the meeting, Baylake’s directors and executive officers beneficially owned a total of  [•] shares, or approximately [•]% of the outstanding shares, of Baylake common stock. We anticipate that these individuals will vote their shares in favor of the merger agreement. Certain of these individuals have entered into a written agreement with Nicolet that they will vote their shares in favor of the merger agreement, except as may be limited by their fiduciary obligations.

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Solicitation and Revocation of Proxies

If you have delivered a signed proxy card for the Baylake special meeting, you may revoke it at any time before it is voted by:

•

attending the meeting and voting in person;

​

•

giving written notice revoking your proxy to Baylake’s Corporate Secretary prior to the date of the meeting; or

​

•

submitting a signed proxy card that is dated later than your initial proxy card to Baylake’s Corporate Secretary.

​

The proxy holders will vote as directed on all valid proxies that are received at or prior to the meeting and that are not subsequently revoked. If you complete, date and sign your proxy card but do not provide instructions as to your vote, the proxy holders will vote your shares FOR approval of the merger proposal, FOR the merger-related compensation proposal, and FOR the adjournment proposal. If any other matters are properly presented at the meeting for consideration, the persons named in the proxy card will have discretionary authority to vote your shares on those matters. Baylake’s board of directors is not aware of any matter to be presented at the meeting other than the merger proposal, the merger-related compensation proposal, and the adjournment proposal.

If you hold shares in “street name” with a broker, bank, or other fiduciary, you will receive voting instructions from the holder of record of your shares. Under the rules of various national and regional securities exchanges, brokers, banks and other fiduciaries may generally vote your shares on routine matters, such as the ratification of an independent registered public accounting firm, even if you provide no instructions, but may not vote on non-routine matters, such as the matters being brought before the special meeting, unless you provide voting instructions. Shares for which a broker does not have the authority to vote are recorded as “broker nonvotes” and are not counted in the vote by shareholders, but will count for purposes of a quorum. As a result, any broker nonvotes will have the practical effect of a vote against the merger proposal but will not affect the merger-related compensation proposal or the adjournment proposal. We therefore encourage you to provide directions to your broker as to how you want your shares voted on all matters to be brought before the special meeting. You should do this by carefully following the instructions your broker gives you concerning its procedures. If you hold shares in “street name” and wish to change your vote at any time, you must contact your broker.

Baylake will bear the cost of soliciting proxies from its shareholders. Baylake will solicit shareholder votes by mail and may also solicit certain shareholders by other means of communication, including telephone or in person. If anyone solicits your vote in person, by telephone, or by other means of communication, they will receive no additional compensation for doing so. Baylake will reimburse brokerage firms and other persons representing beneficial owners of shares for their reasonable expenses in forwarding solicitation material to those beneficial owners.

How to Vote Your Shares

Shareholders of record (i.e., those who own shares in their own name) can vote by telephone, on the internet, or by mail as follows:

•

Voting by Telephone .   Call the toll-free number listed on the proxy card and follow the instructions. You will need to have your proxy card with you when you call.

​

•

Voting on the Internet.    Go to www.[•].com and follow the instructions. You will need to have your proxy card with you when you link to the website.

​

•

Voting by Mail.    Complete, sign, date, and return the enclosed proxy card in the envelope provided.

​

•

Voting at the Baylake Special Meeting.    If you decide to attend the special meeting and vote in person, you may deposit your proxy card with a representative of Baylake at the special meeting

​

21

registration desk. You may also complete a ballot that will be distributed at the meeting. Whether or not you plan to attend the special meeting, please submit your proxy promptly in the enclosed envelope or vote telephonically or through the Internet by following the instructions on the proxy card.

“Street name” shareholders (i.e., those who own their shares in the name of a broker, bank, or other fiduciary) should refer to the information you receive from your broker to see which voting methods are available to you. Please note, if you are a street name shareholder and wish to vote in person at the special meeting, you must obtain a proxy executed in your favor from your broker to be able to vote at the special meeting.

You should not send any stock certificates with your proxy card. If the merger is approved, you will receive instructions for exchanging your stock certificates after the merger has been completed.

Dissenters’ Rights

Baylake’s shareholders do not have dissenters’ rights with respect to the merger under Wisconsin law.

Recommendation of the Board of Directors of Baylake

Baylake’s board of directors has unanimously approved the merger agreement and the transactions contemplated thereby, believes that the merger is in the best interests of Baylake and its shareholders, and recommends that you vote FOR approval of the merger agreement and the transactions contemplated thereby, FOR the merger-related compensation proposal and FOR the adjournment proposal.

For a discussion of the factors considered by the board of directors in reaching its conclusion, see “The Merger — Background of the Merger” at page [•] and “The Merger — Reasons for the Merger” at page [•].

Shareholders should note that Baylake’s directors have certain interests in, and may derive benefits as a result of, the merger that are in addition to their interests as shareholders of Baylake. See “The Merger — Interests of Certain Persons in the Merger” at page [•].

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THE BAYLAKE PROPOSALS

Proposal 1 — Approval of the Merger Agreement and the Merger

At the Baylake special meeting, shareholders of Baylake will be asked to approve the Baylake merger proposal providing for the merger of Baylake with and into Nicolet. Shareholders of Baylake should read this joint proxy statement-prospectus carefully and in its entirety, including the appendices, for more detailed information concerning the merger agreement and the merger. A copy of the merger agreement is attached to this joint proxy statement-prospectus as Appendix A .

After careful consideration, the Baylake board of directors, by a unanimous vote of all directors, approved the merger agreement and the merger, to be advisable and in the best interests of Baylake and its shareholders. See “The Merger — Background of the Merger” and “The Merger — Reasons for the Merger” included elsewhere in this joint proxy statement-prospectus for a more detailed discussion of the Baylake board’s recommendation.

THE BAYLAKE BOARD UNANIMOUSLY RECOMMENDS THAT BAYLAKE
SHAREHOLDERS VOTE “FOR” THE BAYLAKE MERGER PROPOSAL.

Proposal 2 — Merger-Related Compensation

As required by Section 14A of the Exchange Act, Baylake is providing its shareholders with the opportunity to approve, in a non-binding advisory vote, the compensation proposal, by voting on the following resolution:

“RESOLVED, that the compensation that may be paid to Robert J. Cera in connection with or as a result of the merger, as disclosed in the section entitled “The Merger — Interests of Certain Persons in the Merger” and the related tables and narrative, is hereby APPROVED.”

Approval of this proposal is not a condition to completion of the merger. The vote on this proposal is a vote separate and apart from the vote on the Baylake merger proposal. Because the compensation proposal is advisory in nature only, a vote for or against approval will not be binding on either Baylake or Nicolet.

The compensation that is subject to this proposal is a contractual obligation of Nicolet and Nicolet National Bank. If the merger is approved and completed, such compensation may be paid, subject only to the conditions applicable thereto, even if shareholders fail to approve this proposal. If the merger is not completed, the Baylake board of directors will consider the results of the vote in making future executive compensation decisions.

See “The Merger — Interests of Certain Persons in the Merger” elsewhere in this joint proxy statement-prospectus for additional information regarding the merger-related compensation to be paid as a result of this merger.

THE BAYLAKE BOARD UNANIMOUSLY RECOMMENDS THAT BAYLAKE
SHAREHOLDERS VOTE “FOR” THE MERGER-RELATED COMPENSATION PROPOSAL.

Proposal 3 — Adjournment of the Special Meeting

If Baylake does not receive a sufficient number of votes to constitute a quorum of the common stock or approve the merger agreement and the transactions contemplated thereby, it may propose to adjourn the special meeting for the purpose of soliciting additional proxies to establish such quorum or approve the merger proposal. Baylake does not currently intend to propose adjournment of the special meeting if there are sufficient votes to approve the merger agreement and the transactions contemplated thereby. If approval of the proposal to adjourn the special meeting for the purpose of soliciting additional proxies is submitted to the Baylake shareholders for approval, the approval requires the affirmative vote of the holders of a majority of the shares of common stock present, in person or by proxy, at the special meeting, whether or not a quorum is present.

THE BAYLAKE BOARD UNANIMOUSLY RECOMMENDS THAT BAYLAKE
SHAREHOLDERS VOTE “FOR” THE ADJOURNMENT PROPOSAL.

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THE NICOLET SPECIAL SHAREHOLDERS’ MEETING

Purpose

Nicolet shareholders have received this joint proxy statement-prospectus because on [•], the record date for a special meeting of shareholders to be held on [•], 2016, at [•] at [•] [•].m., they owned shares of the common stock of Nicolet Bankshares, Inc., and the board of directors of Nicolet is soliciting proxies for the matter to be voted on at this special meeting, as described in more detail below. Each copy of this joint proxy statement-prospectus was mailed to holders of Nicolet common stock on [•], and is accompanied by a proxy card for use at the meeting and at any adjournment(s) of the meeting.

At the meeting, Nicolet shareholders will consider and vote upon the merger agreement and the transactions contemplated thereby, including the issuance of up to 4,500,000 shares of Nicolet common stock in the merger, and any other matters that are properly brought before the meeting or any adjournment(s) of the meeting.

When you sign the enclosed proxy card or otherwise vote pursuant to the instructions set forth on the proxy card, you appoint the proxy holder as your representative at the meeting. The proxy holder will vote your shares as you have instructed in the proxy card, thereby ensuring that your shares will be voted whether or not you attend the meeting. Even if you plan to attend the meeting, we ask that you instruct the proxies how to vote your shares in advance of the meeting just in case your plans change. In the event that other matters arise at the special meeting, the proxy holder will vote your shares according to his or her discretion.

If you have not already done so, please complete, date and sign the accompanying proxy card and return it promptly in the enclosed, postage paid envelope or otherwise vote pursuant to the instructions set forth on the proxy card. If you do not vote your shares as instructed on the proxy card, or if you do not attend and cast your vote at the special meeting, the effect will be a vote against the merger agreement.

Record Date; Quorum and Vote Required

The record date for the Nicolet special meeting is [•]. Nicolet’s shareholders of record as of the close of business on that day will receive notice of and will be entitled to vote at the special meeting. As of the record date, there were [•] shares of Nicolet common stock outstanding and entitled to vote at the meeting. The outstanding shares were held by approximately [•] holders of record as of the record date.

The presence, in person or by proxy, of a majority of the shares of Nicolet common stock entitled to vote on the merger agreement is necessary to constitute a quorum at the meeting. Each share of Nicolet common stock outstanding on the record date, entitles its holder to one vote on the merger agreement and any other proposal that may properly come before the meeting.

To determine the presence of a quorum at the meeting, Nicolet will also count as present at the meeting the shares of Nicolet common stock present in person but not voting, and the shares of common stock for which Nicolet has received proxies but with respect to which the holders of such shares have abstained or signed without providing instructions as described in “Solicitation and Revocation of Proxies” below. Based on the number of shares of Nicolet common stock outstanding as of the record date, at least [•] shares need to be present at the special meeting, whether in person or by proxy, to constitute a quorum.

Approval of the merger proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Nicolet common stock as of the record date for the special meeting. Abstentions, shares not voted, and broker nonvotes will have the same effect as a vote against the merger proposal. Approval of the non-binding resolution approving certain merger-related compensation and approval of the adjournment proposal each require that more votes be cast in favor of the proposal than against it; abstentions, shares not voted, and broker nonvotes will have no effect on these proposals.

As of the record date for the meeting, Nicolet’s directors and executive officers beneficially owned a total of  [•] shares, or approximately [•]% of the outstanding shares, of Nicolet common stock. We anticipate that these individuals will vote their shares in favor of the merger agreement. Certain of these individuals have entered into a written agreement with Baylake that they will vote their shares in favor of the merger agreement, except as may be limited by their fiduciary obligations.

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Solicitation and Revocation of Proxies

If you have delivered a signed proxy card for the Nicolet special meeting or otherwise voted pursuant to the instructions set forth on the proxy card, you may revoke it at any time before it is voted by:

•

attending the meeting and voting in person;

​

•

giving written notice revoking your proxy to Nicolet’s Corporate Secretary prior to the date of the meeting; or

​

•

submitting a signed proxy card that is dated later than your initial proxy card to Nicolet’s Corporate Secretary.

​

The proxy holders will vote as directed on all valid proxies that are received at or prior to the meeting and that are not subsequently revoked. If you complete, date and sign your proxy card but do not provide instructions as to your vote, the proxy holders will vote your shares FOR approval of the merger proposal, FOR the merger-related compensation proposal, and FOR the adjournment proposal. If any other matters are properly presented at the meeting for consideration, the persons named in the proxy card will have discretionary authority to vote your shares on those matters. Nicolet’s board of directors is not aware of any matter to be presented at the meeting other than the merger proposal and the adjournment proposal.

If you hold shares in “street name” with a broker, bank, or other fiduciary, you will receive voting instructions from the holder of record of your shares. Under the rules of various national and regional securities exchanges, brokers, banks and other fiduciaries may generally vote your shares on routine matters, such as the ratification of an independent registered public accounting firm, even if you provide no instructions, but may not vote on non-routine matters, such as the matters being brought before the special meeting, unless you provide voting instructions. Shares for which a broker does not have the authority to vote are recorded as “broker nonvotes” and are not counted in the vote by shareholders, but will count for purposes of a quorum. As a result, any broker nonvotes will have the practical effect of a vote against the merger proposal but will not affect the adjournment proposal. We therefore encourage you to provide directions to your broker as to how you want your shares voted on all matters to be brought before the special meeting. You should do this by carefully following the instructions your broker gives you concerning its procedures. If you hold shares in “street name” and wish to change your vote at any time, you must contact your broker.

Nicolet will bear the cost of soliciting proxies from its shareholders. Nicolet will solicit shareholder votes by mail and may also solicit certain shareholders by other means of communication, including telephone or in person. If anyone solicits your vote in person, by telephone, or by other means of communication, they will receive no additional compensation for doing so. Nicolet will reimburse brokerage firms and other persons representing beneficial owners of shares for their reasonable expenses in forwarding solicitation material to those beneficial owners.

How to Vote Your Shares

Shareholders of record (i.e., those who own shares in their own name) can vote by telephone, on the Internet, or by mail as follows:

•

Voting by Telephone.    Call the toll-free number listed on the proxy card and follow the instructions. You will need to have your proxy card with you when you call.

​

•

Voting on the Internet.    Go to www.[•].com and follow the instructions. You will need to have your proxy card with you when you link to the website.

​

•

Voting by Mail.    Complete, sign, date, and return the enclosed proxy card in the envelope provided.

​

•

Voting at the Nicolet Special Meeting.    If you decide to attend the special meeting and vote in person, you may deposit your proxy card with a representative of Nicolet at the special meeting

​

25

registration desk. You may also complete a ballot that will be distributed at the meeting. Whether or not you plan to attend the special meeting, please submit your proxy promptly in the enclosed envelope or vote telephonically or through the internet by following the instructions on the proxy card.

“Street name” shareholders (i.e., those who own their shares in the name of a broker, bank, or other fiduciary) should refer to the information you receive from your broker to see which voting methods are available to you. Please note, if you are a street name shareholder, and wish to vote in person at the special meeting, you must obtain a proxy executed in your favor from your broker to be able to vote at the special meeting.

Dissenters’ Rights

Nicolet’s shareholders do not have dissenters’ rights with respect to the merger under Wisconsin law.

Recommendation of the Board of Directors of Nicolet

Nicolet’s board of directors has unanimously approved the merger agreement and the transactions contemplated thereby, including the issuance of up to 4,500,000 shares of Nicolet common stock in the merger, believes that the merger is in the best interests of Nicolet and its shareholders, and recommends that you vote FOR approval of the merger agreement and the transactions contemplated thereby, FOR the merger-related compensation proposal and FOR the adjournment proposal.

For a discussion of the factors considered by the board of directors in reaching its conclusion, see “The Merger — Background of the Merger” at page [•] and “The Merger — Reasons for the Merger” at page [•].

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THE NICOLET PROPOSALS

Proposal 1 — Approval of the Merger Agreement, the Merger and the Stock Issuance

At the Nicolet special meeting, shareholders of Nicolet will be asked to approve the Nicolet merger proposal providing for the merger of Baylake with and into Nicolet and the issuance of up to 4,500,000 shares of Nicolet common stock to Baylake shareholders. Shareholders of Nicolet should read this joint proxy statement-prospectus carefully and in its entirety, including the appendices, for more detailed information concerning the merger agreement and the merger. A copy of the merger agreement is attached to this joint proxy statement-prospectus as Appendix A .

After careful consideration, the Nicolet board of directors, by a unanimous vote of all directors, approved the merger agreement and the merger, to be advisable and in the best interests of Nicolet and its shareholders. See “The Merger — Background of the Merger” and “The Merger — Reasons for the Merger” included elsewhere in this joint proxy statement-prospectus for a more detailed discussion of the Nicolet board’s recommendation.

THE NICOLET BOARD UNANIMOUSLY RECOMMENDS THAT NICOLET
SHAREHOLDERS VOTE “FOR” THE NICOLET MERGER PROPOSAL.

Proposal 2 — Merger-Related Compensation

As required by Section 14A of the Exchange Act, Nicolet is providing its shareholders with the opportunity to approve, in a non-binding advisory vote, the compensation proposal, by voting on the following resolution:

“RESOLVED, that the compensation that may be paid to Robert J. Cera in connection with or as a result of the merger, as disclosed in the section entitled “The Merger — Interests of Certain Persons in the Merger” and the related tables and narrative, is hereby APPROVED.”

Approval of this proposal is not a condition to completion of the merger. The vote on this proposal is a vote separate and apart from the vote on the Nicolet merger proposal. Because the compensation proposal is advisory in nature only, a vote for or against approval will not be binding on Nicolet.

The compensation that is subject to this proposal is a contractual obligation of Nicolet and/or Nicolet National Bank. If the merger is approved and completed, such compensation may be paid, subject only to the conditions applicable thereto, even if shareholders fail to approve this proposal. The Nicolet board of directors will consider the results of the vote in making future executive compensation decisions.

See “The Merger — Interests of Certain Persons in the Merger” elsewhere in this joint proxy statement-prospectus for additional information regarding the merger-related compensation to be paid as a result of this merger.

THE NICOLET BOARD UNANIMOUSLY RECOMMENDS THAT NICOLET
SHAREHOLDERS VOTE “FOR” THE MERGER-RELATED COMPENSATION PROPOSAL.

Proposal 3 — Adjournment of the Special Meeting

If Nicolet does not receive a sufficient number of votes to constitute a quorum of the common stock or approve the merger agreement and the transactions contemplated thereby, it may propose to adjourn the special meeting for the purpose of soliciting additional proxies to establish such quorum or approve the merger proposal. Nicolet does not currently intend to propose adjournment of the special meeting if there are sufficient votes to approve the merger agreement and the transactions contemplated thereby. If approval of the proposal to adjourn the special meeting for the purpose of soliciting additional proxies is submitted to the Nicolet shareholders for approval, the approval requires the affirmative vote of the holders of a majority of the shares of common stock present, in person or by proxy, at the special meeting, whether or not a quorum is present.

THE NICOLET BOARD UNANIMOUSLY RECOMMENDS THAT NICOLET
SHAREHOLDERS VOTE “FOR” THE ADJOURNMENT PROPOSAL.

27

had informal conversations with members of Nicolet’s board and senior management team regarding a potential combination of the two companies. However, in each instance, continued discussions were never pursued for a variety of reasons as both companies believed remaining as an independent community bank offered the greatest reward for their respective shareholders.

In January 2015, members of both Baylake’s and Nicolet’s senior management and board of directors attended an industry conference that focused on community bank mergers and acquisitions. During that conference, Baylake’s Chief Executive Officer, Robert J. Cera, and Robert Weyers, a director of Nicolet, had an informal conversation regarding a potential combination of the companies. During the following months, Baylake held meetings with two investment banking firms to assess a potential combination with Nicolet, as well as other potential viable alternatives. These alternatives included (1) remaining independent and continuing the pursuit of an organic growth strategy, (2) acquiring other community banks, and (3) merging with or being acquired by another depository institution. Like most similarly-situated bank holding companies, Baylake held periodic discussions with a limited number of candidates regarding the alternatives identified in (2) and (3) above. With the exception of its acquisition of NEWBI, which was evidenced by the execution of a revised non-binding letter of intent on January 30, 2015, and a merger agreement on May 5, 2015, all of the strategic discussions were exploratory in nature and none of them progressed beyond preliminary calls and meetings. After assessing these alternatives, the Executive Committee of Baylake’s board of directors determined that Mr. Cera should have future conversations with Nicolet to determine if a potential merger was feasible and strategically viable.

On May 6, 2015, Mr. Cera and Mr. Weyers had a meeting to continue discussions from their previous meeting several months prior. Following that discussion, over the next 45 days, Mr. Cera had additional follow up meetings with Robert B. Atwell, Chairman, President and Chief Executive Officer of Nicolet, and Michael E. Daniels, President and Chief Operating Officer of Nicolet National Bank. In addition, Baylake requested that principals from the investment banking firm of Sandler O’Neill & Partners L.P. (“Sandler O’Neill”) provide detailed analysis regarding a potential merger with Nicolet. Sandler O’Neill has acted as advisor to Baylake during the past eight years relating to both capital raise alternative strategies, as well as potential merger and acquisition opportunities, and as such, Sandler O’Neill was selected to represent Baylake based upon its deep knowledge of Baylake and its operations, as well as its strong reputation as a trusted advisor to financial services companies throughout the country. Sandler O’Neill provided initial information and analysis to Mr. Cera and certain members of Baylake’s directors on June 9, 2015, and followed up with additional analysis on June 15, 2015. During an executive session of the Baylake board of directors meeting on June 16, 2015, the board reviewed the information provided by Sandler O’Neill and determined that Mr. Cera should continue more in-depth conversations with Nicolet. A formal engagement letter with Sandler O’Neill was executed on August 11, 2015.

On June 17, 2015, the day after the Baylake board of directors meeting, Mr. Cera met with certain members of Nicolet’s senior management, including, among others, Mr. Atwell and Mr. Daniels. At the beginning of the meeting, both parties executed nondisclosure agreements with one another. At that time, Nicolet presented a summary draft term sheet that outlined certain terms and conditions that had been discussed between Baylake and Nicolet up to that point. The draft term sheet did not offer any financial terms and left certain items open ended as they had yet to be discussed by both parties. During that meeting, both parties discussed a number of topics related to the draft term sheet, including: organizational structure, name and branding, senior management roles, board composition, location of the corporate headquarters, and other operational and social issues. At the conclusion of the meeting, the principals of Nicolet shared and discussed the term sheet with certain members of Nicolet’s senior management team and board of directors, including Nicolet’s Executive Committee, while Mr. Cera discussed the term sheet with certain members of Baylake’s board of directors, including Robert W. Agnew and Louis (Rick) J. Jeanquart, Baylake’s Chairman and Vice-Chairman, respectively.

On June 18, 2015, Mr. Cera provided a modified version of the nonbinding term sheet that proposed the following: Nicolet Bankshares, Inc. as the name of the holding company and Baylake Bank as the name of the operating bank; Mr. Atwell as Executive Chairman of the company, Mr. Cera as Chief Executive Officer of the company and bank, and Mr. Daniels as President of the company and bank; and that Baylake be allowed to declare a special one-time cash dividend to its shareholders of  $1.10 per share (or approximately $10 million in aggregate) concurrently with the closing of a transaction. Baylake did not provide any proposal for possible financial terms (i.e. exchange ratio) of a transaction.

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On June 22, 2015, the Baylake board of directors voted to form a subcommittee of the board to continue potential negotiations regarding a combination. Baylake’s subcommittee included: Mr. Cera, Robert W. Agnew, Roger Ferris, Louis (Rick) J. Jeanquart, and Dean J. Nolden. Similarly, on June 19, 2015, the Executive Committee of Nicolet’s board of directors, which included Mr. Atwell, Mr. Daniels, John N. Dykema, Donald (DJ) J. Long, Randy J. Rose, and Robert J. Weyers, voted to form a subcommittee to consider a combination. The Nicolet subcommittee consisted of Messrs. Atwell, Daniel, Dykema and Rose. Both subcommittees met independently, Baylake’s on June 26 and Nicolet’s on June 19, to discuss the nonbinding term sheet. During this period, members of Nicolet senior management and the Nicolet subcommittee revised the term sheet to include potential financial terms of a transaction. The revised term sheet proposed by Nicolet included an exchange ratio whereby shareholders of Baylake would receive 0.41935 share of Nicolet stock for each share of Baylake stock owned. Nicolet also proposed that the surviving bank be nationally chartered, that each company elect a respective chairman to serve as co-chairman in the combined company, that Baylake not be allowed to make any special dividend, and that Mr. Atwell serve as Chief Executive Officer of the company, Mr. Cera serve as President of the company, and that Mr. Daniels serve as Chief Executive Officer and President of the bank.

On June 30, 2015, both subcommittees met jointly in Sturgeon Bay, Wisconsin to mutually review the revised term sheet and continue discussions regarding a potential merger of equals. At that meeting, members of Baylake’s subcommittee communicated that the proposed exchange ratio was not sufficient. Both subcommittees agreed that members of Nicolet’s senior management team, Mr. Cera, and Sandler O’Neill should independently assess additional exchange ratios and special dividends to determine if a different structure could be mutually agreeable by both parties. The subcommittees also agreed on the need to address the senior management issue and asked Messrs. Cera, Atwell, and Daniels to attempt to resolve the issue. The subcommittees scheduled a follow up meeting between the same parties for July 9, 2015.

After additional communication and exchange of information between Mr. Cera, Sandler O’Neill, and members of Nicolet’s senior management team on July 1, 2015, the Nicolet subcommittee met on July 2, 2015 to discuss the issue of senior management. During that meeting, the subcommittee discussed the possibility of Messrs. Atwell and Cera becoming Co-Chairmen, Co-Presidents, and Co-Chief Executive Officers of the company with Mr. Daniels serving as President and Chief Executive Officer of the bank. A lengthy discussion followed that addressed the roles and responsibilities of Co-Presidents and Co-Chief Executive Officers and general reporting dynamics of the combined organization with this shared role. After deliberations, it was determined that Nicolet would offer the new shared role structure to Baylake, which was then communicated to Mr. Cera through Sandler O’Neill.

Concurrently with the negotiation of the term sheet, the Baylake subcommittee, Mr. Cera and Nicolet management and the parties’ respective outside counsel negotiated the terms of Mr. Cera’s employment arrangement with Nicolet following the merger. The final terms of the employment agreement between Mr. Cera and Nicolet is summarized under “The Merger — Interests of Certain Persons in the Merger.”

Following independent analysis by all parties in the days after the June 30, 2015 meeting, Mr. Cera, members of Nicolet’s senior management team, including Messrs. Atwell and Daniels, and principals of Sandler O’Neill met on the afternoon of July 7, 2015 to discuss updated financial terms of a transaction. At that time, Nicolet proposed an increased exchange ratio of 0.4517, but with no special dividend to Baylake shareholders. Mr. Cera subsequently held discussions with members of the Baylake subcommittee regarding Nicolet’s updated proposal. At the July 9 joint meeting of the subcommittees, Baylake’s subcommittee agreed to accept the revised exchange ratio of 0.4517 proposed by Nicolet; however, they requested that a special dividend of  $5 million in aggregate (or approximately $0.54 per share) be considered as part of a merger. On July 11, 2015, Nicolet made a counter proposal for a special dividend of  $2.5 million in aggregate (or approximately $0.27 per share). In the following days, both parties continued negotiations and, on July 14, 2015, the parties agreed in principle that Baylake be allowed to make a special, one-time dividend of up to $0.40 per share (or approximately $3.8 million in aggregate) to its shareholders concurrently with the closing of the merger. The nonbinding term sheet was updated to reflect the new terms agreed upon by both subcommittees. Both Baylake and Nicolet agreed to present the revised term sheet to their respective board of directors on July 21, 2015—the date of each company’s regularly scheduled board meeting.

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On July 21, 2015, Baylake’s board of directors discussed the revised term sheet. Sandler O’Neill made a presentation to the board that reviewed the financial terms of the transaction including an analysis of the pro forma company. Sandler O’Neill also provided an analysis of other strategic alternatives, including the prospects and likelihood of receiving a term sheet that offered superior terms and conditions as what Nicolet had provided. Other potential merger partners were discussed, but none were deemed as viable or presented a superior long-term benefit to Baylake’s shareholders. After a prolonged discussion among the directors regarding Baylake’s strategic alternatives, the board approved moving forward with a potential merger of equals with Nicolet under the terms and conditions outlined in the nonbinding term sheet. Nicolet’s board of directors also held a board meeting on the same day. During the meeting, Nicolet’s board held a lengthy discussion regarding the terms and conditions of the proposed merger with Baylake, assessed the consideration it was offering as part of the transaction against other strategic alternatives, reviewed other strategic opportunities it was currently considering and the likelihood of such opportunities closing, and considered its growth projections as a stand-alone company. After further conversation, Nicolet’s board believed it was in the best interest of its shareholders to continue to pursue a merger of equals with Baylake. After these meetings, both boards of directors decided to proceed with continued discussions, and Chairman Agnew from Baylake and Chairman Atwell from Nicolet each executed the term sheet.

During the next 30 days, members of both Baylake’s and Nicolet’s senior management team held a variety of meetings with each other to discuss the due diligence process, including which items would be reviewed and the conditions governing such review. On July 31, it was determined that, since the transaction was structured as a merger of equals, each party would provide the same due diligence information to the other. Both parties began to populate diligence information via a secure, third party virtual dataroom. Due to the physical nature of Baylake’s credit files, Nicolet had to review such information onsite, which it did at Baylake’s headquarters on August 6 – 9, 2015. Baylake performed a similar review of Nicolet’s credit files, but Baylake’s review was conducted virtually. Mutual review of all diligence information continued over the next several weeks. Messrs. Cera, Atwell, and Daniels met on August 17, 2015 to discuss initial diligence findings as well as request additional items needed as part of the review by both companies.

Also during the month of August 2015, both Baylake and Nicolet and their respective legal advisors began drafting a definitive agreement in connection with the merger. Baylake and its counsel, Reinhart Boerner van Deuren s.c. (“Reinhart”), were provided with an initial draft of a definitive agreement by Nicolet’s counsel, Bryan Cave LLP (“Bryan Cave”) on August 3, 2015. Baylake and Reinhart provided initial comments to Nicolet and Bryan Cave on August 10, 2015. Several follow up discussions were held between members of both company’s senior management teams, directors, and respective legal counsels over the weeks that followed.

Also in the month of August, members of Nicolet’s senior management team met with representatives of Keefe, Bruyette & Woods, Inc. (“KBW”) and a second investment banking firm to discuss the potential transaction and a potential engagement to render a fairness opinion to the Nicolet board of directors. Nicolet ultimately engaged KBW due to its historical relationship with the company, its strong reputation in the community bank M&A sector, and its knowledge of the history between Nicolet and Baylake.

On August 18, 2015, each of the boards of directors of Baylake and Nicolet independently held a regulatory scheduled meeting. At an executive session of the Baylake board, Reinhart discussed the fiduciary responsibilities and other issues as it related to the current draft of the definitive agreement. The senior management of Nicolet updated the board of directors of Nicolet on the status of the potential merger, including initial due diligence findings. Representatives of KBW also attended this meeting of the Nicolet board to discuss KBW’s engagement.

Over the next two weeks, both companies continued to share due diligence information. On September 1, 2015, the senior management team of Baylake presented their due diligence findings on Nicolet to the board of directors. After that meeting, it became apparent that a merger with Nicolet looked highly probable, and Mr. Cera met with Messrs. Atwell and Daniels to discuss a communication plan with employees, shareholders, and the media.

Baylake’s board of directors met on September 3, 2015 to discuss the final terms and conditions of a transaction with Nicolet, which had not materially changed since the term sheet that was initially approved on July 21, 2015. At that time, representatives of Reinhart and Sandler O’Neill discussed the course of

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negotiations thus far and next steps. Representatives of Sandler O’Neill provided a financial analysis to the board regarding the proposed merger with Nicolet. Representatives of Reinhart reviewed in detail with the board the terms of the current draft of the merger agreement, including the scope of the representations and warranties, the nature of the operating covenants prior to closing, the proposed closing conditions, and the termination provisions. A discussion was held regarding the few remaining open items under the definitive agreement. At that time, Sandler O’Neill delivered to the board its oral opinion, which was subsequently confirmed in writing, that, as of such date, the merger consideration was fair, from a financial point of view, to the holders of Baylake common stock.

Nicolet’s board of directors had a special meeting on September 4, 2015, with representatives of Bryan Cave and KBW also in attendance, to discuss the final terms and conditions of a transaction with Baylake. At that time, representatives of Bryan Cave reviewed with the board the process leading to the proposed merger and the course of negotiations with Baylake. Representatives of Bryan Cave reviewed in detail with the board the terms of the current draft of the merger agreement, including the scope of the representations and warranties, the nature of the operating covenants prior to closing, the proposed closing conditions, and the termination provisions. Nicolet’s board of directors reviewed the results of Nicolet’s due diligence process regarding a review of the combined company’ loan portfolio and credit marks. A discussion was held regarding the few remaining open items under the definitive agreement.

On September 8, 2015, Baylake’s board of directors met again to discuss the final definitive agreement. At that time, Sandler O’Neill reiterated its oral opinion to the board, which was subsequently confirmed in writing, that as of such date, the merger consideration was fair, from a financial point of view, to the holders of Baylake common stock. The Baylake board engaged in a long discussion with Baylake’s advisors regarding the proposed draft of the merger agreement, including the final business terms of the transaction. After the conclusion of the presentations and discussions at the September 8 meeting, the Baylake board unanimously approved the merger agreement and resolved to recommend that Baylake shareholders approve the merger and authorized Mr. Cera to execute the merger agreement on behalf of Baylake in substantially the form reviewed by the board subject to such changes agreed to by Mr. Cera, and approved the Form of Voting and Support Agreement, a copy of which is attached hereto as Exhibit C to the merger agreement.

Likewise, on September 8, 2015, Nicolet held a special meeting of the board of directors to discuss the final version of the definitive agreement. At this meeting, KBW reviewed the financial aspects of the proposed merger and rendered an opinion to the Nicolet board of directors to the effect that, as of that date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW as set forth in such opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to Nicolet. The Nicolet board of directors then considered the information presented to them at the meeting, together with the information presented at prior meetings of the board, and after deliberations, voted unanimously to determine that the merger with Baylake is fair to and in the best interests of Nicolet and its shareholders, adopt the plan of merger, recommend that the shareholders approve the merger, and authorize Mr. Atwell to execute the merger agreement.

Nicolet and Baylake executed the merger agreement on September 8, 2015 and issued a joint press release announcing the execution of the merger agreement and the terms of the merger.

Reasons for the Merger

General

The financial and other terms of the merger agreement resulted from arm’s-length negotiations between Nicolet’s and Baylake’s representatives. The following discussion of the information and factors considered by the Nicolet and Baylake boards of directors is not intended to be exhaustive, but includes all of the material factors the respective boards considered in determining whether to enter into the merger agreement. In reaching their determinations to approve the merger and to recommend that their respective shareholders approve the merger, neither the Nicolet board of directors nor the Baylake board of directors assigned any relative or specific weight to the following factors, and individual directors may have assigned different weight to different factors.

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Nicolet

In deciding to pursue a merger with Baylake, Nicolet’s management and board of directors considered, among other things, the following:

•

the complementary strengths of Nicolet and Baylake, with Nicolet as a leader in commercial lending and Baylake having a superior retail and commercial banking presence in Door and Kewaunee Counties;

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•

the expected strengthened competitive positioning of the combined company throughout Northeast Wisconsin, which Nicolet expects will meaningfully enhance its ability to serve its customers;

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•

the board of directors’ belief that the merger represents a superior opportunity for increasing shareholder value compared to the other strategic alternatives available to Nicolet;

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•

the expectation that Nicolet shareholders will experience opportunities for share price growth driven by a more liquid publicly traded stock;

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•

information concerning the business, operations, earnings, asset quality, capitalization, and financial condition of Baylake and Baylake Bank;

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•

the financial terms of the merger, including the relationship of the value of the consideration issuable in the merger to the market value, tangible book value, and earnings per share of Baylake’s common stock;

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•

the ability of Baylake’s operations to meaningfully contribute to Nicolet’s earnings after the merger;

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the recent comparative earnings and financial performance of Baylake and Nicolet;

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•

the financial terms of recent business combinations in the banking industry and a comparison of the multiples of selected combinations with the terms of the proposed merger;

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•

the expectation that combined company will have an attractive and increasingly diversified loan portfolio;

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•

the increased lending limit that the organizations will enjoy once Nicolet National Bank and Baylake Bank are combined;

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the compatibility of Baylake’s management team, strategic objectives and geographic footprint with those of Nicolet;

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the compatibility of the business cultures of the two organizations and their shared focus on small and middle-market customers throughout Northeast and North Central Wisconsin;

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•

the opportunity to leverage the existing infrastructure of Nicolet;

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the nonfinancial terms of the merger, including the treatment of the merger as a tax-free reorganization for U.S. federal income tax purposes;

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•

the opinion, dated September 8, 2015, of KBW to the Nicolet board of directors as to the fairness, from a financial point of view and as of the date of the opinion, to Nicolet of the exchange ratio in the proposed merger, as more fully described below under “The Merger —  Opinion of Keefe, Bruyette & Woods, Inc.”; and

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•

the likelihood of the merger being approved by applicable regulatory authorities without undue conditions or delay.

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Baylake

In deciding to pursue the merger transaction with Nicolet, Baylake’s board of directors consulted with its management, as well as its legal counsel and financial advisor, and considered numerous factors, including the following:

•

the complementary strengths of Nicolet and Baylake and the expected strengthened competitive positioning of the combined company throughout Northeast Wisconsin, which Baylake expects will meaningfully enhance its ability to serve its customers;

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•

the board of directors’ belief that the merger represents a superior opportunity for increasing shareholder value compared to the other strategic alternatives available to Baylake;

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•

the financial terms of the merger, including the relationship of the value of the consideration issuable in the merger to the market value, tangible book value, and earnings per share of Baylake’s common stock;

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•

the recent comparative earnings and financial performance of Baylake and Nicolet;

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•

the financial terms of recent business combinations in the banking industry and a comparison of the multiples of selected combinations with the terms of the proposed merger;

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•

the expectation that combined company will have an attractive and increasingly diversified loan portfolio;

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•

the increased lending limit that the organizations will enjoy once Nicolet National Bank and Baylake Bank are combined;

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•

the compatibility of the business cultures of the two organizations and their shared focus on small and middle-market customers throughout Northeast and North Central Wisconsin;

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•

the opportunity to leverage the existing infrastructure of Nicolet and Baylake;

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•

the value of the consideration to be received by Baylake’s shareholders compared to shareholder value for Baylake as an independent entity;

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•

information concerning business, operations, earnings, asset quality, and financial condition, prospects, and capital levels of Baylake and Nicolet, both individually and as a combined entity;

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•

the perceived risks and uncertainties attendant to Baylake’s operation as an independent banking organization, the continuing low-interest rate environment, operating under enhanced regulatory scrutiny, and increased capital requirements;

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•

the financial terms of recent business combinations in the financial services industry and a comparison of the multiples of selected combinations with the terms of the proposed merger;

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the receipt of the stock consideration by Baylake’s shareholders on a tax-free basis;

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•

the opinion of Sandler O’Neill that the consideration to be received by Baylake’s common shareholders in the merger is fair from a financial point of view, as more fully described below under “The Merger  — Opinion of Sandler O’Neill & Partners, L.P.”; and

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•

the likelihood of the merger being approved by applicable regulatory authorities without undue conditions or delay.

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Opinion of Keefe, Bruyette & Woods, Inc.

Nicolet engaged Keefe, Bruyette & Woods, Inc. (“KBW”) to provide an opinion to the Nicolet board of directors as to the fairness, from a financial point of view, to Nicolet of the exchange ratio in the proposed merger. Nicolet selected KBW because KBW is a nationally recognized investment banking firm with substantial experience in transactions similar to the merger. As part of its investment banking business, KBW is continually engaged in the valuation of financial services businesses and their securities in connection with mergers and acquisitions.

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As part of its engagement, representatives of KBW participated via teleconference in the Nicolet board meeting held on September 8, 2015 at which the Nicolet board evaluated the proposed merger. At this meeting, KBW reviewed the financial aspects of the proposed merger and rendered an opinion to the effect that, as of such date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW as set forth in such opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to Nicolet. The Nicolet board approved the merger agreement at this meeting.

The description of the opinion set forth herein is qualified in its entirety by reference to the full text of the opinion, which is attached as Appendix B to this document and is incorporated herein by reference, and describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW in preparing the opinion.

KBW’s opinion speaks only as of the date of the opinion. The opinion was for the information of, and was directed to, the Nicolet board (in its capacity as such) in connection with its consideration of the financial terms of the merger. The opinion addressed only the fairness, from a financial point of view, of the exchange ratio in the merger to Nicolet. It did not address the underlying business decision of Nicolet to engage in the merger or enter into the merger agreement or constitute a recommendation to the Nicolet board in connection with the merger, and it does not constitute a recommendation to any holder of Nicolet common stock or any shareholder of any other entity as to how to vote in connection with the merger or any other matter, nor does it constitute a recommendation as to whether or not any such shareholder should enter into a voting, shareholders’, or affiliates’ agreement with respect to the merger or exercise any dissenters’ or appraisal rights that may be available to such shareholder.

KBW’s opinion was reviewed and approved by KBW’s Fairness Opinion Committee in conformity with its policies and procedures established under the requirements of Rule 5150 of the Financial Industry Regulatory Authority.

In connection with the opinion, KBW reviewed, analyzed and relied upon material bearing upon the merger and the financial and operating condition of Nicolet and Baylake, including, among other things:

•

a draft of the merger agreement, dated September 7, 2015 (the most recent draft then made available to KBW);

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•

the audited financial statements and Annual Reports on Form 10-K of Nicolet for the three fiscal years ended December 31, 2014;

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•

the unaudited quarterly financial statements and Quarterly Reports on Form 10-Q of Nicolet for the fiscal quarters ended March 31, 2015 and June 30, 2015;

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the audited financial statements and Annual Reports on Form 10-K of Baylake for the three fiscal years ended December 31, 2014;

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•

the unaudited quarterly financial statements and Quarterly Reports on Form 10-Q of Baylake for the fiscal quarters ended March 31, 2015 and June 30, 2015;

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•

certain regulatory filings of Nicolet and Baylake, including the quarterly Call Reports on Form FRY-9C filed with respect to each quarter during the three year period ended June 30, 2015;

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certain other interim reports and other communications of Nicolet and Baylake to their respective shareholders; and

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•

other financial information concerning the businesses and operations of Nicolet and Baylake furnished to KBW by Nicolet and Baylake or which KBW was otherwise directed to use for purposes of its opinion and analyses.

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KBW’s consideration of financial information and other factors that it deemed appropriate under the circumstances or relevant to its analyses included, among others, the following:

•

the historical and current financial position and results of operations of Nicolet and Baylake;

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•

the assets and liabilities of Nicolet and Baylake;

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•

the nature and terms of certain other merger transactions and business combinations in the banking industry;

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•

a comparison of certain financial and stock market information of Nicolet and Baylake with similar information for certain other companies the securities of which are publicly traded;

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•

financial and operating forecasts and projections of Nicolet that were prepared by Nicolet management, provided to and discussed with KBW by such management, and used and relied upon by KBW at the direction of such management with the consent of the Nicolet board;

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•

the publicly available consensus “street estimates” of Baylake for 2015 and 2016 (which estimates reflect the pro forma impact of Baylake’s pending acquisition of NEW Bancshares, Inc. that was publicly announced on May 8, 2015 (the “NEWBI Acquisition”)) as well as assumed long term earnings and asset growth rates of Baylake that were provided to KBW by Nicolet management, all of which information was discussed with KBW by Nicolet management and used and relied upon by KBW at the direction of such management with the consent of the Nicolet board; and

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•

estimates regarding certain pro forma financial effects of the merger on Nicolet (including but not limited to the cost savings and related expenses expected to result or be derived from the merger) that were prepared by Nicolet management, provided to and discussed with KBW by such management, and used and relied upon by KBW at the direction of such management with the consent of the Nicolet board.

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KBW also performed such other studies and analyses as it considered appropriate and took into account its assessment of general economic, market and financial conditions and its experience in other transactions, as well as its experience in securities valuation and knowledge of the banking industry generally. KBW also held discussions with senior management of Nicolet and Baylake regarding the past and current business operations, regulatory relations, financial condition and future prospects of their respective companies (including, in the case of Baylake, matters pertaining to the NEWBI Acquisition) and such other matters as KBW deemed relevant to its inquiry.

In conducting its review and arriving at its opinion, KBW relied upon and assumed the accuracy and completeness of all of the financial and other information provided to it or publicly available and did not independently verify the accuracy or completeness of any such information or assume any responsibility or liability for such verification, accuracy or completeness. KBW relied upon the management of Nicolet as to the reasonableness and achievability of the financial and operating forecasts and projections of Nicolet and the estimates regarding certain pro forma financial effects of the merger on Nicolet (and the assumptions and bases for such forecasts, projections and estimates) which were prepared by, and provided to and discussed with KBW by, such management, and further relied on such management as to the reasonableness and achievability of the publicly available consensus “street estimates” of Baylake and long term growth rates referred to above that were discussed with KBW by Nicolet management and that KBW was directed by such management to use. KBW assumed, at the direction of Nicolet, that all of the foregoing forecasts, projections and estimates reflected, or in the case of the Baylake publicly available “street estimates” referred to above, were consistent with, the best currently available estimates and judgments of Nicolet management, and that such forecasts, projections and estimates would be realized in the amounts and in the time periods estimated. KBW expressed no view or opinion as to the NEWBI Acquisition (or any terms, aspects or implications thereof) and assumed, at the direction of Nicolet, that the NEWBI Acquisition would be consummated as described to KBW by Baylake management in the fourth quarter of 2015.

It is understood that the forecasts, projections and estimates of Nicolet and Baylake that were provided to and discussed with KBW were not prepared with the expectation of public disclosure, that all such forecasts, projections and estimates, together with the publicly available consensus “street estimates” of Baylake referred to above, were based on numerous variables and assumptions that are inherently uncertain, including, without limitation, factors related to general economic and competitive conditions and that, accordingly, actual results could vary significantly from those set forth in such information. KBW assumed, based on discussions with management of Nicolet and with the consent of the Nicolet board, that all such

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information provided a reasonable basis upon which KBW could form its opinion and KBW expressed no view as to any such information or the assumptions or bases therefor. KBW relied on all such information without independent verification or analysis and did not in any respect assume any responsibility or liability for the accuracy or completeness thereof.

KBW assumed that there were no material changes in the assets, liabilities, financial condition, results of operations, business or prospects of either Nicolet or Baylake since the date of the last financial statements of each such entity that were made available to KBW. KBW is not an expert in the independent verification of the adequacy of allowances for loan and lease losses and KBW assumed, without independent verification and with Nicolet’s consent, that the aggregate allowances for loan and lease losses for Nicolet and Baylake were adequate to cover such losses. In rendering its opinion, KBW did not make or obtain any evaluations or appraisals or physical inspection of the property, assets or liabilities (contingent or otherwise) of Nicolet or Baylake, the collateral securing any of such assets or liabilities, or the collectability of any such assets, nor did KBW examine any individual loan or credit files, nor did KBW evaluate the solvency, financial capability or fair value of Nicolet or Baylake under any state or federal laws, including those relating to bankruptcy, insolvency or other matters. Estimates of values of companies and assets do not purport to be appraisals or necessarily reflect the prices at which companies or assets may actually be sold. Because such estimates are inherently subject to uncertainty, KBW assumed no responsibility or liability for their accuracy.

KBW assumed that, in all respects material to its analyses:

•

the merger would be completed substantially in accordance with the terms set forth in the merger agreement (the final terms of which KBW assumed would not differ in any respect material to its analyses from the latest draft version of the merger agreement that had been reviewed) with no adjustments to the exchange ratio and with no other consideration or payments in respect of the Baylake common stock;

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•

that any related transactions (including the bank merger, the $0.40 special dividend that may be paid to Baylake shareholders (the “Baylake Special Dividend”) and the redemption of at least 50% of Nicolet’s Non-Cumulative Perpetual Preferred Stock, Series C (the “Nicolet Preferred Stock Redemption”)) would be completed as contemplated by the merger agreement and as described to KBW by representatives of Nicolet;

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•

the representations and warranties of each party in the merger agreement and in all related documents and instruments referred to in the merger agreement were true and correct;

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•

each party to the merger agreement and all related documents would perform all of the covenants and agreements required to be performed by such party under such documents;

​

•

there are no factors that would delay, or subject to any adverse conditions, any necessary regulatory or governmental approval for the merger and any related transactions and that all conditions to the completion of the merger and any related transactions would be satisfied without any waivers or modifications to the merger agreement; and

​

•

in the course of obtaining the necessary regulatory, contractual, or other consents or approvals for the merger and any related transactions, no restrictions, including any divestiture requirements, termination or other payments or amendments or modifications, would be imposed that would have a material adverse effect on the future results of operations or financial condition of Nicolet, Baylake or the pro forma entity or the contemplated benefits of the merger, including the cost savings and related expenses expected to result or be derived from the merger.

​

KBW assumed that the merger would be consummated in a manner that complied with the applicable provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all other applicable federal and state statutes, rules and regulations. KBW was further advised by representatives of Nicolet that Nicolet relied upon advice from its advisors (other than KBW) or other appropriate sources as to all legal, financial reporting, tax, accounting and regulatory matters with respect to Nicolet, Baylake, the merger and any related transaction (including the bank merger, the Baylake Special Dividend and the Nicolet Preferred Stock Redemption), the NEWBI Acquisition, and the merger

37

agreement. KBW did not provide advice with respect to any such matters. In addition, for purposes of its analyses and at the direction of Nicolet management, KBW assumed, in all respects material to its analyses, the occurrence of the Baylake Special Dividend and the Nicolet Preferred Stock Redemption.

KBW’s opinion addressed only the fairness, from a financial point of view, as of the date of the opinion, of the exchange ratio in the merger to Nicolet. KBW expressed no view or opinion as to any other terms or aspects of the merger or any term or aspect of any related transaction (including the bank merger, the Baylake Special Dividend and the Nicolet Preferred Stock Redemption), including without limitation, the form or structure of the merger or any related transaction, any consequences of the merger to Nicolet, its shareholders, creditors or otherwise, or any terms, aspects or implications of any employment, voting, support, shareholder, or other agreements, arrangements or understandings contemplated or entered into in connection with the merger, any related transaction, or otherwise. KBW’s opinion was necessarily based upon conditions as they existed and could be evaluated on the date of the opinion and the information made available to KBW through such date. It is understood that subsequent developments may affect the conclusion reached in KBW’s opinion and that KBW does not have an obligation to update, revise or reaffirm its opinion. KBW’s opinion did not address, and KBW expressed no view or opinion with respect to:

•

the underlying business decision of Nicolet to engage in the merger or enter into the merger agreement;

​

•

the relative merits of the merger as compared to any strategic alternatives that are, have been or may be available to or contemplated by Nicolet or the Nicolet board;

​

•

the fairness of the amount or nature of any compensation to any of Nicolet’s officers, directors or employees, or any class of such persons, relative to any compensation to the holders of Nicolet common stock or Baylake common stock or relative to the exchange ratio;

​

•

the effect of the merger or any related transaction on, or the fairness of the consideration to be received by, holders of any class of securities of Nicolet or Baylake or any other party to any other transaction contemplated by the merger agreement;

​

•

the actual value of Nicolet common stock to be issued in the merger;

​

•

the prices, trading range or volume at which Nicolet common stock or Baylake common stock may trade following the public announcement of the merger or the prices, trading range or volume at which Nicolet common stock may trade following the consummation of the merger;

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•

whether Nicolet has sufficient cash, available lines of credit or other sources of funds to enable it to complete the Nicolet Preferred Stock Redemption;

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•

any advice or opinions provided by any other advisor to any of the parties to the merger or any other transaction contemplated by the merger agreement; or

​

•

any legal, regulatory, accounting, tax or similar matters relating to Nicolet, Baylake, any of their respective shareholders, or relating to or arising out of or as a consequence of the merger or any other related transaction (including the bank merger, the Baylake Special Dividend and the Nicolet Preferred Stock Redemption), or the NEWBI Acquisition, including whether or not the merger would qualify as a tax-free reorganization for United States federal income tax purposes.

​

In performing its analyses, KBW made numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, which are beyond the control of KBW, Nicolet and Baylake. Any estimates contained in the analyses performed by KBW are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by these analyses. Additionally, estimates of the value of businesses or securities do not purport to be appraisals or to reflect the prices at which such businesses or securities might actually be sold. Accordingly, these analyses and estimates are inherently subject to substantial uncertainty. In addition, the KBW opinion was among several factors taken into consideration by the Nicolet board in making its determination to approve the merger agreement and the merger. Consequently, the analyses described below

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should not be viewed as determinative of the decision of the Nicolet board with respect to the fairness of the merger consideration. The type and amount of consideration payable in the merger were determined through negotiation between Nicolet and Baylake and the decision to enter into the merger agreement was solely that of the Nicolet board.

The following is a summary of the material financial analyses presented by KBW to the Nicolet board in connection with its opinion. The summary is not a complete description of the financial analyses underlying the opinion or the presentation made by KBW to the Nicolet board, but summarizes the material analyses performed and presented in connection with such opinion. The financial analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex analytic process involving various determinations as to appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. Therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In arriving at its opinion, KBW did not attribute any particular weight to any analysis or factor that it considered, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, KBW believes that its analyses and the summary of its analyses must be considered as a whole and that selecting portions of its analyses and factors or focusing on the information presented below in tabular format, without considering all analyses and factors or the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the process underlying its analyses and opinion.

For purposes of the financial analyses described below, KBW utilized an implied transaction value per share of Baylake common stock in the proposed merger of  $15.02 based on the 0.4517x exchange ratio in the proposed merger and the closing price of Nicolet common stock on September 4, 2015. In addition to the financial analyses described below, KBW reviewed with the Nicolet board for informational purposes, among other things, the implied transaction multiples for the proposed merger of 14.7x Baylake’s estimated 2015 earnings per share (“EPS”) and 12.2x Baylake’s estimated 2016 EPS using publicly available consensus “street estimates” for Baylake (which estimates reflect the pro forma impact of the NEWBI Acquisition) and based on the implied transaction value per share of Baylake common stock in the proposed merger of $15.02.

Selected Companies Analysis.    Using publicly available information, KBW compared the financial performance, financial condition and market performance of Nicolet and Baylake to 16 selected banks and thrifts that were listed on NASDAQ, the New York Stock Exchange or NYSE MKT and headquartered in the Midwest region (defined as Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin) and that had total assets between $750 million and $1.5 billion and a ratio of nonperforming assets to loans plus other real estate owned (“OREO”) of less than 7.0%. Merger targets were excluded from the selected companies.

To perform this analysis, KBW used profitability and other financial information as of, or for, the latest 12 months (“LTM”) or most recent completed fiscal quarter ended (June 30, 2015) and market price information as of September 4, 2015. KBW also used 2015 and 2016 EPS estimates taken from Nicolet management’s forecasts and projections for Nicolet and from publicly available consensus “street estimates”

39

for Baylake (which estimates reflect the pro forma impact of the NEWBI Acquisition) and publicly available consensus “street estimates” for the selected companies. Using publicly available information, applicable historical financial data for Nicolet and Baylake reflected pro forma adjustments for two branch divestitures completed in August 2015 in the case of Nicolet and the NEWBI Acquisition in the case of Baylake. Certain financial data prepared by KBW, and as referenced in the tables presented below, may not correspond to the data presented in Nicolet’s or Baylake’s historical financial statements, or the data prepared by Sandler O’Neill presented under the section “The Merger — Opinion of Sandler O’Neill & Partners, L.P.,” as a result of the different periods, assumptions and methods used by KBW to compute the financial data presented.

KBW’s analysis showed the following concerning the financial performance and financial condition of Nicolet, Baylake and the selected companies:

(1)

Core income excludes extraordinary items, nonrecurring revenue/expenses and gain/loss on sale of securities.

​

(2)

BankFinancial Corporation Core Return on Average Assets and Core Return on Average Equity exclude a tax benefit related to the reversal of a valuation allowance on its deferred tax asset during the fourth quarter of 2014.

​

(3)

Excludes gain/loss on sale of securities.

​

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KBW’s analysis showed the following concerning the market performance of Nicolet and Baylake and, to the extent publicly available, the selected companies (excluding the impact of certain selected company LTM and 2015 estimated EPS multiples considered to be not meaningful because they were greater than 30.0x and excluding the impact of price change and total return data for County Bancorp, Inc., which completed its IPO in January 2015):

(1)

BankFinancial Corporation Price/LTM EPS excludes a tax benefit related to the reversal of a valuation allowance on its deferred tax asset during the fourth quarter of 2014.

​

(2)

Nicolet income projections per Nicolet management on a standalone basis.

​

(3)

Dividend yield reflects most recent quarterly dividend, annualized, as a percentage of stock price. LTM dividend payout reflects most recent quarterly dividend, annualized, as a percentage of LTM EPS.

​

No company used as a comparison in the above selected companies analysis is identical to Baylake or Nicolet. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.

Selected Transactions Analysis.     KBW reviewed publicly available information related to 16 selected U.S. bank and thrift transactions announced after January 1, 2013 that had announced transaction values between $50 million and $300 million and in which the ratio of target assets to combined assets was greater than 35%. Terminated transactions, transactions where the acquired company was a mutual holding company and transactions where the acquiror was not a depository were excluded from the selected transactions. The selected transactions included in the group were:

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For each selected transaction, KBW derived the following implied transaction statistics (based on publicly reported values or, in the case of the selected transactions involving stock consideration, SNL Financial-calculated deal values) in each case based on the transaction consideration value paid for the acquired company and using financial data based on the acquired company’s then latest publicly available financial statements prior to the announcement of the acquisition:

•

Price per common share to tangible book value per share of the acquired company (in the case of selected transactions involving an acquired company that was privately held, this transaction statistic was calculated as total transaction consideration divided by total tangible common equity); and

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•

Price per common share to LTM EPS of the acquired company (in the case of selected transactions involving an acquired company that was privately held, this transaction statistic was calculated as total transaction consideration divided by LTM net income).

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KBW also reviewed the price per common share paid for the acquired company for each selected transaction in which the acquired company was publicly traded as a premium to the closing price of the acquired company one day prior to the announcement of the acquisition (expressed as a percentage and referred to as the one-day market premium). The above transaction statistics for the selected transactions were compared with the corresponding transaction statistics for the proposed merger based on the implied transaction value per share of Baylake common stock in the proposed merger of  $15.02 and using historical financial information for Baylake as of or for the twelve month period ended June 30, 2015.

The results of the analysis are set forth in the following table (excluding the impact of LTM EPS multiples for certain selected transactions, which multiples were not considered to be meaningful because they were either negative or greater than 60.0x):

(1)

Baylake tangible book value per share is pro forma for the pending NEWBI Acquisition announced May 8, 2015; implied transaction price to tangible book value multiple of Baylake as adjusted for the Baylake Special Dividend would be 1.45x.

​

No company or transaction used as a comparison in the above analysis is identical to Baylake or the proposed merger. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.

Relative Contribution Analysis.     KBW analyzed the relative standalone contribution of Nicolet and Baylake to various pro forma balance sheet and income statement items and the pro forma market capitalization of the combined entity. This analysis did not include purchase accounting adjustments or cost savings. To perform this analysis, KBW used balance sheet data for Nicolet and Baylake as of June 30, 2015 (in each case pro forma for two branch divestitures completed in August 2015 in the case of Nicolet and the NEWBI Acquisition in the case of Baylake based on publicly available information), historical LTM ended

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June 30, 2015 earnings data for Nicolet and Baylake, earnings estimates for 2015 and 2016 for Nicolet provided by Nicolet management, publicly available consensus “street estimates” of Baylake for 2015 and 2016 (which estimates reflect the pro forma impact of the NEWBI Acquisition) and market price data as of September 4, 2015. The results of KBW’s analysis are set forth in the following table, which also compares the results of KBW’s analysis with the implied pro forma ownership percentages of Nicolet and Baylake shareholders in the combined company based on the 0.4517x exchange ratio in the proposed merger and also on a fully diluted basis assuming all Nicolet options and Baylake options (as adjusted to reflect the 0.4517x exchange ratio in the proposed merger) are exercised for illustrative purposes:

(1)

Based on Baylake tangible common equity as adjusted for the Baylake Special Dividend.

​

Pro Forma Financial Impact Analysis.    KBW performed a pro forma financial impact analysis that combined projected income statement and balance sheet information of Nicolet and Baylake. Using closing balance sheet estimates as of March 31, 2016 for Nicolet (giving effect to the Nicolet Preferred Stock Redemption) and Baylake (giving effect to the Baylake Special Dividend and the NEWBI Acquisition) extrapolated from the financial forecasts, projections and estimates utilized for Nicolet and Baylake, financial forecasts and projections relating to the earnings of Nicolet provided by Nicolet management, publicly available consensus “street estimates” of Baylake (which estimates reflect the pro forma impact of the NEWBI Acquisition) and pro forma assumptions (including, without limitation, the cost savings and related expenses expected to result from the merger as well as certain accounting adjustments assumed with respect thereto) provided by Nicolet management, KBW analyzed the estimated financial impact of the merger on certain projected financial results. This analysis indicated that the merger could be accretive to Nicolet’s 2016 and 2017 estimated EPS and dilutive to Nicolet’s estimated tangible book value per share as of March 31, 2016. Furthermore, the analysis indicated that, pro forma for the merger, Nicolet’s tangible common equity to tangible assets ratio could be higher and each of Nicolet’s leverage ratio, Tier 1 Risk-Based Capital Ratio and Total Risk Based Capital Ratio as of March 31, 2016 could be lower. For all of the above analysis, the actual results achieved by Nicolet following the merger may vary from the projected results, and the variations may be material.

Discounted Cash Flow Analyses.    KBW performed separate discounted cash flow analyses to estimate a range for the implied equity value of Nicolet and a range for the implied equity value of Baylake. KBW used financial forecasts and projections relating to the earnings and assets of Nicolet that were prepared by Nicolet management and publicly available consensus “street estimates” of Baylake for 2015 and 2016 (which estimates reflect the pro forma impact the NEWBI Acquisition) as well as assumed long term

43

earnings and asset growth rates of Baylake that were provided to KBW by Nicolet management and assumed discount rates ranging from 11.0% to 15.0%. The ranges of values were derived by adding (i) the present value of the estimated free cash flows that Nicolet or Baylake, as the case may be, could generate over the five-year period from 2016 to 2021 and (ii) the present value of implied terminal values of Nicolet or Baylake, as the case may be, at the end of such period. KBW assumed that both Nicolet and Baylake would maintain a tangible common equity to tangible assets ratio of 8.00% and would retain sufficient earnings to maintain that level based on these assumptions. In calculating the terminal values of Nicolet and Baylake, KBW applied a range of 12.0x to 16.0x estimated 2021 net income. The discounted cash flow analysis of Nicolet resulted in a range of implied equity value of Nicolet of  $25.37 per share to $35.04 per share. The discounted cash flow analysis of Baylake resulted in a range of implied equity value of Baylake of  $14.31 per share to $19.94 per share. For illustrative purposes, KBW also calculated an implied exchange ratio of 0.5674x based on the midpoints of the above ranges of  $29.84 for Nicolet and $16.93 for Baylake.

The discounted cash flow analysis is a widely used valuation methodology, but the results of such methodology are highly dependent on the assumptions that must be made, including asset and earnings growth rates, terminal values, dividend payout rates, and discount rates. The analysis did not purport to be indicative of the actual values or expected values of Nicolet or Baylake.

Miscellaneous.    KBW was retained by Nicolet solely to render its opinion to the Nicolet board and did not act as a financial advisor to or as an agent of Nicolet in connection with the proposed merger, nor did KBW act as an advisor to or agent of any other person. As part of its investment banking business, KBW is continually engaged in the valuation of bank and bank holding company securities in connection with acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for various other purposes. As specialists in the securities of banking companies, KBW has experience in, and knowledge of, the valuation of banking enterprises. In the ordinary course of KBW’s business as a broker dealer, KBW and its affiliates may from time to time purchase securities from, and sell securities to, Nicolet and Baylake, and as a market maker in securities, KBW may from time to time have a long or short position in, and buy or sell, debt or equity securities of Nicolet and Baylake for its own account and for the accounts of KBW’s customers.

Pursuant to the KBW engagement agreement, Nicolet agreed to pay KBW a non-refundable cash fee equal to $300,000, which became payable concurrently with the rendering of KBW’s opinion and has been paid. Nicolet also agreed to reimburse KBW for reasonable out-of-pocket expenses and disbursements incurred in connection with its engagement and to indemnify KBW against certain liabilities relating to or arising out of KBW’s engagement or KBW’s role in connection therewith. Other than in connection with this present engagement, in the two years preceding the date of its opinion, KBW did not provide investment banking and financial advisory services to Nicolet. In the two years preceding the date of its opinion, KBW did not provide investment banking and financial advisory services to Baylake. KBW may in the future provide investment banking and financial advisory services to Nicolet or Baylake and receive compensation for such services.

Opinion of Sandler O’Neill & Partners, L.P.

By letter dated August 11, 2015, Baylake retained Sandler O’Neill to act as financial advisor to Baylake’s Board of Directors in connection with Baylake’s consideration of a possible business combination. Sandler O’Neill is a nationally recognized investment banking firm whose principal business specialty is financial institutions. In the ordinary course of its investment banking business, Sandler O’Neill is regularly engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions.

Sandler O’Neill acted as financial advisor in connection with the proposed merger and participated in certain of the negotiations leading to the execution of the merger agreement. At the September 3, 2015 meeting at which Baylake’s Board of Directors considered and discussed the terms of the merger agreement and the merger, Sandler O’Neill delivered to the Baylake board its oral opinion, which was subsequently confirmed in writing, that, as of such date, the merger consideration was fair to the holders of Baylake common stock from a financial point of view . The full text of Sandler O’Neill’s opinion is attached as Appendix C to this joint proxy statement-prospectus. The opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Sandler

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O’Neill in rendering its opinion. The description of the opinion set forth below is qualified in its entirety by reference to the full text of the opinion. Holders of Baylake common stock are urged to read the entire opinion carefully in connection with their consideration of the proposed merger.

Sandler O’Neill’s opinion speaks only as of the date of the opinion. The opinion was directed to Baylake’s board of directors in connection with its consideration of the merger and is directed only to the fairness, from a financial point of view, of the merger consideration to the holders of Baylake common stock. Sandler O’Neill’s opinion does not constitute a recommendation to any holder of Baylake common stock as to how such holder of Baylake common stock should vote with respect to the merger or any other matter. It does not address the underlying business decision of Baylake to engage in the merger, the relative merits of the merger as compared to any other alternative business strategies that might exist for Baylake or the effect of any other transaction in which Baylake might engage. Sandler O’Neill did not express any opinion as to the fairness of the amount or nature of the compensation to be received in the merger by Baylake’s officers, directors, or employees, or class of such persons, relative to the merger consideration to be received by Baylake’s common shareholders. Sandler O’Neill’s opinion was approved by Sandler O’Neill’s fairness opinion committee.

In connection with rendering its opinion, Sandler O’Neill reviewed and considered, among other things:

•

the merger agreement;

​

•

certain publicly available financial statements and other historical financial information of Baylake that Sandler O’Neill deemed relevant;

​

•

certain publicly available financial statements and other historical financial information of Nicolet that Sandler O’Neill deemed relevant;

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•

publicly available mean and median analyst earnings per share estimates for Baylake for the years ending December 31, 2015 and December 31, 2016, and an estimated long-term annual growth rate for the years thereafter, as reviewed with and confirmed by the senior management of Baylake;

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•

certain internal financial projections for Nicolet for the years ending December 31, 2015 through December 31, 2017, as reviewed with and confirmed by the senior management of Nicolet, and an estimated long-term annual growth rate for the years thereafter;

​

•

the relative contributions of assets, liabilities, equity and earnings of Baylake and Nicolet to the combined entity;

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•

the pro forma financial impact of the merger on Nicolet based on certain assumptions relating to transaction expenses, the Baylake Special Dividend of  $0.40 per share to be paid to the holders of Baylake common stock immediately prior to the closing of the merger, as well as certain cost savings, as provided by the senior management of Baylake, as well as certain assumptions relating to purchase accounting adjustments and the Nicolet Preferred Stock Redemption, as provided by the senior management of Nicolet;

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•

a comparison of certain stock trading, financial and other information for Baylake and Nicolet with similar publicly available information for certain other banking institutions, the securities of which are publicly traded;

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•

a comparison of certain pro forma financial information for the combined entity, as discussed with the senior management of Baylake and Nicolet, with similar publicly available information for certain bank and thrift institutions, the securities of which are publicly traded;

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•

the publicly disclosed financial terms of certain other recent merger and acquisition transactions in the banking sector;

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•

the current market environment generally and the banking environment in particular; and

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•

such other information, financial studies, analyses and investigations and financial, economic and market criteria as Sandler O’Neill considered relevant.

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Sandler O’Neill also discussed with certain members of senior management of Baylake the business, financial condition, results of operations and prospects of Baylake and held similar discussions with the senior management of Nicolet regarding the business, financial condition, results of operations and prospects of Nicolet.

In performing its review, Sandler O’Neill relied upon the accuracy and completeness of all of the financial and other information that was available to it from public sources, that was provided to it by Baylake and Nicolet or that was otherwise reviewed by it and Sandler O’Neill assumed such accuracy and completeness for purposes of preparing its opinion. Sandler O’Neill further relied on the assurances of the respective managements of Baylake and Nicolet that they were not aware of any facts or circumstances that would have made any of such information inaccurate or misleading in any material respect. Sandler O’Neill was not asked to undertake, and has not undertaken, an independent verification of any such information and does not assume any responsibility or liability for the accuracy and completeness thereof. Sandler O’Neill did not make an independent evaluation or appraisal of the specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of Baylake or Nicolet, nor did Sandler O’Neill review any individual credit files of Baylake or Nicolet. Sandler O’Neill did not make an independent evaluation of the adequacy of the allowance for loan losses of Baylake or Nicolet and Sandler O’Neill assumed, with Baylake’s consent, that the respective allowances for loan losses for both Baylake and Nicolet were adequate to cover such losses and would be adequate on a pro forma basis for the combined entity.

In preparing its analyses, Sandler O’Neill used publicly available analyst earnings per share estimates for Baylake for the years ending December 31, 2015 and December 31, 2016, and an estimated long-term annual growth rate for the years thereafter as reviewed with and confirmed by the senior management of Baylake as well as certain internal financial projections for Nicolet for the years ending December 31, 2015 through December 31, 2017, as reviewed with and confirmed by the senior management of Nicolet, and an estimated long-term annual growth rate for the years thereafter. Sandler O’Neill also received and used in its analyses certain assumptions related to transaction expenses, purchase accounting adjustments, the Nicolet Preferred Stock Redemption, the Baylake Special Dividend and certain cost savings and other synergies as discussed with the senior management of Baylake and Nicolet. With respect to those projections and estimates, the senior managements of Baylake and Nicolet confirmed to Sandler O’Neill that they reflected the best currently available estimates of the managements of Baylake and Nicolet, respectively, and Sandler O’Neill assumed that such estimates would be achieved. Sandler O’Neill expressed no opinion as to such estimates or the assumptions on which they were based. Sandler O’Neill assumed that there was no material change in the respective assets, financial condition, results of operations, business or prospects of Baylake or Nicolet since the date of the most recent financial statements made available to Sandler O’Neill. Sandler O’Neill also assumed in all respects material to its analysis that Baylake and Nicolet would remain as going concerns for all periods relevant to its analyses. Sandler O’Neill expressed no opinion as to any of the legal, accounting and tax matters relating to the merger and any other transactions contemplated in connection therewith.

Sandler O’Neill also assumed, with Baylake’s consent, that (i) each of the parties to the merger agreement would comply in all material respects with all material terms of the merger agreement, that all of the representations and warranties contained in the merger agreement were true and correct in all material respects, that each of the parties to the merger agreement would perform in all material respects all of the covenants required to be performed by such party under the merger agreement and that the conditions precedent in the merger agreement were not waived, (ii) in the course of obtaining the necessary regulatory or third party approvals, consents and releases with respect to the merger, no material delay, limitation, restriction or condition would be imposed that would have an adverse effect on Baylake, Nicolet or the merger, and (iii) the merger and any related transaction would be consummated in accordance with the terms of the merger agreement without any waiver, modification or amendment of any material term, condition or agreement thereof and in compliance with all applicable laws and other requirements. Sandler O’Neill also assumed, with Baylake’s consent, that the pending NEWBI Acquisition would be consummated in accordance with the terms of the applicable merger agreement without any waiver, modification or amendment of any material term, condition or agreement thereof and in compliance with all applicable laws and other requirements.

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Sandler O’Neill’s analyses and the views expressed therein were necessarily based on financial, economic, regulatory, market and other conditions as in effect on, and the information made available to Sandler O’Neill as of, the date of its opinion. Events occurring after the date of the opinion could materially affect Sandler O’Neill’s views. Sandler O’Neill has not undertaken to update, revise, reaffirm or withdraw its opinion or otherwise comment upon events occurring after the date thereof.

In rendering its opinion, Sandler O’Neill performed a variety of financial analyses. The summary below is not a complete description of all the analyses underlying Sandler O’Neill’s opinion or the presentation made by Sandler O’Neill to Baylake’s board of directors, but is a summary of the material analyses performed and presented by Sandler O’Neill. The summary includes information presented in tabular format. In order to fully understand the financial analyses, these tables must be read together with the accompanying text. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex process involving subjective judgments as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. The process, therefore, is not necessarily susceptible to a partial analysis or summary description. Sandler O’Neill believes that its analyses must be considered as a whole and that selecting portions of the factors and analyses to be considered without considering all factors and analyses, or attempting to ascribe relative weights to some or all such factors and analyses, could create an incomplete view of the evaluation process underlying its opinion. Also, no company included in Sandler O’Neill’s comparative analyses described below is identical to Baylake or Nicolet and no transaction is identical to the merger. Accordingly, an analysis of comparable companies or transactions involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading values or merger transaction values, as the case may be, of Baylake and Nicolet and the companies to which they are being compared. In arriving at its opinion, Sandler O’Neill did not attribute any particular weight to any analysis or factor that it considered. Rather, Sandler O’Neill made qualitative judgments as to the significance and relevance of each analysis and factor. Sandler O’Neill did not form an opinion as to whether any individual analysis or factor (positive or negative) considered in isolation supported or failed to support its opinion, rather, Sandler O’Neill made its determination as to the fairness of the merger consideration on the basis of its experience and professional judgment after considering the results of all its analyses taken as a whole.

In performing its analyses, Sandler O’Neill also made numerous assumptions with respect to industry performance, business and economic conditions and various other matters, many of which cannot be predicted and are beyond the control of Baylake, Nicolet and Sandler O’Neill. The analyses performed by Sandler O’Neill are not necessarily indicative of actual values or future results, both of which may be significantly more or less favorable than suggested by such analyses. Sandler O’Neill prepared its analyses solely for purposes of rendering its opinion and provided such analyses to Baylake’s board of directors at its September 3, 2015 meeting. Estimates of the values of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold. Such estimates are inherently subject to uncertainty and actual values may be materially different. Accordingly, Sandler O’Neill’s analyses do not necessarily reflect the value of Baylake common stock or the prices at which Baylake or Nicolet common stock may be sold at any time. The analyses of Sandler O’Neill and its opinion were among a number of factors taken into consideration by Baylake’s board of directors in making its determination to approve the merger agreement and the analyses described below should not be viewed as determinative of the decision of Baylake’s board of directors or management with respect to the fairness of the merger.

Summary of Proposed Merger Consideration and Implied Transaction Metrics.    Sandler O’Neill reviewed the financial terms of the proposed merger. As described in the merger agreement, each share of Baylake common stock outstanding immediately prior to the effective time of the merger¹, other than certain shares described in the merger agreement, will be converted into the right to receive 0.4517 shares of common stock of Nicolet, inclusive of the Baylake Special Dividend to be paid to the holders of Baylake common stock immediately prior to closing of the merger, Sandler O’Neill calculated an aggregate implied transaction value of approximately $149.9 million. Based upon financial information for Baylake as of or for the twelve months ended June 30, 2015 (unless otherwise indicated), Sandler O’Neill calculated the following implied transaction metrics (1)(2) :

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(1)

Pro forma for pending NEWBI Acquisition.

​

(2)

Includes the $0.40 per share Baylake Special Dividend common shareholders.

​

(3)

Tangible book value and book value per share includes impact of the Baylake Special Dividend of $0.40 per share.

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(4)

Tangible book premium to core deposits calculated as (deal value – tangible equity) / (core deposits); Core Deposits defined as deposits, less time deposit accounts with balances over $100,000, foreign deposits and unclassified deposits. Includes impact of the Baylake Special Dividend of  $0.40 per share.

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(5)

Based upon the closing price for Baylake common stock on September 2, 2015.

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Stock Trading History.    Sandler O’Neill reviewed the historical publicly reported trading prices of Baylake common stock and Nicolet common stock for the one-year period ended September 2, 2015. Sandler O’Neill then compared the relationship between the movements in the price of Baylake and Nicolet common stock, respectively, to movements in their respective Peer Group (as described on page [•]) as well as certain stock indices.

One-Year Stock Performance

Comparable Company Analysis.    Sandler O’Neill used publicly available information to compare selected financial information for Baylake and Nicolet with a group of financial institutions selected by Sandler O’Neill. The peer group consisted of public banks headquartered in the Midwest with assets between $850 million and $1.3 billion, TCE/TA greater than 7.00%, non-performing assets/total assets less than 3.00% and last-twelve-months return on average assets greater than 0.70% (the “Peer Group”). The Peer Group excluded announced merger targets and internet-only banks. The Peer Group consisted of the following companies:

(1)

48

Comparable Company Analysis