Northpointe Bancshares (NYSE:NPB) reported second-quarter 2026 net income to common stockholders of $21.3 million, or $0.60 per diluted share, as management pointed to continued growth in its Mortgage Purchase Program, stable credit quality and higher average earning assets.
On the company’s earnings call, Chairman and CEO Chuck Williams said Northpointe has increased year-to-date diluted earnings per share by 21% over the past 12 months and grown tangible book value by more than $2.25 per share. Williams said new loans and deposits each grew 17% over that period, while the company lowered its wholesale funding ratio from 71% to 63% by adding new funding sources.
“From my seat, the economy seems to be pretty resilient despite the current geopolitical and macroeconomic risks,” Williams said. He added that consumer spending remains healthy, credit quality is stable and Northpointe continues to see loan demand across its footprint.
Mortgage Purchase Program Remains Key Growth Driver
Williams said Northpointe’s Mortgage Purchase Program, or MPP, remains “one of the largest catalysts” of the company’s financial performance. MPP balances ended the quarter at $3.9 billion, up more than $1 billion, or 36%, from the second quarter of 2025.
Total loans funded through the MPP channel reached $12.8 billion during the quarter, compared with $11.2 billion in the prior quarter and $9 billion in the second quarter of 2025. Williams said demand remains strong, with a healthy pipeline of additional business.
President Kevin Comps said period-end MPP balances increased by $77.3 million from the prior quarter, while average balances rose by $477.5 million, helping drive higher interest income. During the quarter, Northpointe added 11 new clients representing $380 million in additional capacity and increased facility sizes for six existing clients by $265 million. Utilization among existing clients averaged 61%, up from 57% in the prior quarter.
Comps said MPP balances are reported net of balances participated out to partner banks. At June 30, 2026, Northpointe had participated out $489.0 million, up from $412.7 million at March 31.
Average MPP yields were 6.35% in the quarter, while fee-adjusted yields were 6.59%. Comps said the average yield declined 24 basis points from the prior quarter, reflecting a decrease in SOFR, tighter spreads, competitive pricing, thinner pricing on new deals and a larger proportional mix of bigger clients with lower risk-adjusted pricing.
Mortgage Originations Shift Toward Purchase Activity
In residential lending, Comps said Northpointe closed $670.6 million in mortgages during the second quarter, down slightly from $693.7 million in the prior quarter. Saleable volume was $572.5 million, down from $626.6 million in the first quarter.
Comps said refinance activity made up 27% of saleable volume in the second quarter, compared with 59% in the first quarter, when a temporary drop in mortgage rates supported refinancing. Purchase volume increased 61% from the prior quarter, driven by the company’s traditional retail channel.
About 81% of saleable mortgage originations came from traditional retail and 19% from consumer direct in the second quarter, compared with 61% and 39%, respectively, in the first quarter. Northpointe sold approximately 61% of total saleable mortgages on a servicing-released basis, down from 68% in the prior quarter. Comps said the company hired four mortgage professionals in existing markets during the quarter.
Deposits and Servicing Portfolio Expand
Comps said total deposits were $5.2 billion at quarter-end, increasing from the prior quarter, with most of the sequential growth driven by brokered deposits. Over the past year, he said Northpointe has added funding partner relationships to support core deposits and fund planned growth.
Compared with the second quarter of 2025, non-interest-bearing demand deposits increased 30%, interest-bearing demand deposits increased 81%, and savings and money market deposits increased 45%.
Northpointe also reported growth in its specialty mortgage servicing channel, which focuses on servicing first-lien home equity lines tied to demand deposit sweep accounts, including AIO loans. Comps said the specialty servicing portfolio increased 35% over the past year. Excluding the change in fair value of mortgage servicing rights, Northpointe earned $2.4 million in loan servicing fees for the quarter, up from the prior quarter. Including loans outsourced to a sub-servicer, the company serviced 16,200 loans for others with total unpaid principal balance of $5.5 billion.
Margin Pressure and Full-Year Guidance
Executive Vice President and CFO Brad Howes said net interest income increased $1.1 million from the prior quarter, reflecting a $389.5 million increase in average interest-earning assets, partly offset by a nine-basis-point decrease in net interest margin. Northpointe’s second-quarter net interest margin was 2.33%, and year-to-date net interest margin was 2.37%.
Howes guided to a full-year 2026 net interest margin range of 2.3% to 2.4%, assuming no additional Federal Reserve rate moves for the rest of the year, continued increases in yields based on held-for-investment loan mix and funding costs near current levels.
For 2026, Howes said he expects:
- MPP balances of $4.1 billion to $4.3 billion by year-end.
- Average MPP participations of $300 million to $500 million.
- AIO balances of $900 million to $1.0 billion by year-end.
- Total saleable mortgage originations of $2.2 billion to $2.4 billion.
- All-in mortgage origination margins of 2.75% to 3.25%.
- Full-year non-interest expense of $138 million to $142 million.
Howes maintained full-year provision expense guidance of $2 million to $3 million, driven by net charge-off replenishment and growth in MPP and AIO loans. He said credit migration trends, changes in economic forecasts or model changes were not included in the guidance.
Credit Quality Remains Stable
Comps said Northpointe recorded net charge-offs of $528,000 in the second quarter, representing an annualized net charge-off ratio to average loans of three basis points. He said the figure remains well below long-term historical averages and that the company is not seeing “any systemic borrower issues” in its portfolios.
During the question-and-answer portion of the call, analysts asked about MPP margin compression, growth prospects and funding strategy. Howes said competitive pressures in the warehouse lending market were the biggest driver of lower MPP yields, while Williams said more entrants and limited industry volume have contributed to pricing pressure. Williams added that Northpointe remains confident in the channel despite the margin compression.
Asked about deposit strategy, Comps said Northpointe continues to pursue relationships that can lower reliance on wholesale funding and potentially reduce FDIC insurance costs. Howes said lowering the wholesale funding ratio can create a 15- to 20-basis-point improvement in FDIC insurance costs, though it may not directly improve net interest margin if replacement funding carries similar rates.
About Northpointe Bancshares (NYSE:NPB)
Northpointe Bancshares, Inc is the bank holding company for Northpointe Bank, an FDIC-insured community bank based in Michigan. The company offers a full range of commercial and consumer banking solutions, serving retail, small business and corporate clients through both a physical branch network and digital platforms.
Northpointe Bank’s product suite includes interest-bearing checking and savings accounts, money market and certificate of deposit offerings, as well as residential mortgage lending, home equity financing and unsecured consumer loans.
