Northpointe Proposes Sale of Mortgage Channels to CMG, Estimates Restructuring Costs at $7 Million
Key Facts
Northpointe Bancshares announced that it had signed a nonbinding letter of intent with CMG Financial and its affiliates to sell the bank’s distributed retail and direct-to-consumer origination channels. The deal remains a proposal, as the parties have not yet reached a definitive agreement, according to the company’s filing with the U.S. Securities and Exchange Commission. The boards of the company and the bank approved a plan to exit the mortgage channels on October 18, 2026. Northpointe says it expects to complete the deal by the end of 2026, subject to completing due diligence, reaching a definitive agreement and meeting customary closing conditions. The shift comes as residential mortgage origination volume declines, while the company intends to focus on other financing-related activities and digital banking.
The company estimated restructuring costs at between $6 million and $7 million, with most of the amount expected to be recognized in the fourth quarter of 2026. The costs primarily include severance and employee transition expenses, along with a write-off of about $800,000 for an intangible asset related to a previous mortgage team acquisition. The company said loans in process will continue through closing and that it will support affected employees. In its third-quarter results statement, Chief Executive Chuck Williams said the company views CMG as “a suitable home for the origination team and a constructive path for customers, referral partners and affected employees.” Press coverage of the earnings call reported that management expected annual expense savings of between $50 million and $55 million, saying production volumes were no longer sufficient to support the costs of the existing operating infrastructure.
Residential mortgage originations totaled $493.316 million in the third quarter of 2026, down from $670.607 million in the second quarter and $636.600 million in the third quarter of 2025. Locked residential mortgage loan commitments also fell to $570.386 million, compared with $719.118 million in the prior quarter and $823.261 million a year earlier. The company linked lower gains on loan sales, compared with both periods, to the decline in these commitments. By contrast, balances in the mortgage purchase program rose by $262.7 million, or 27% at an annualized rate, from the prior quarter. The net increase excludes $368.3 million in balances participated with other institutions at period-end.
Net income available to common shareholders was $13.9 million, or $0.39 per diluted share, in the third quarter of 2026. Net income was $21.3 million, or $0.60 per share, in the second quarter, and $20.1 million, or $0.57, in the third quarter of 2025. The company attributed the third-quarter decline partly to a combined $9.3 million decrease in the fair value of loans held for investment and the lender risk account, driven by higher long-term interest rates. This was partly offset by a $5 million increase in the fair value of mortgage servicing rights. The company also recorded $3.1 million in operating losses related to an external deposit fraud incident at a retail banking center.
Williams explained that third-quarter results were affected by fair-value declines caused by higher long-term interest rates and expenses from a separate deposit fraud incident, adding that the company had strengthened its procedures and controls to address the incident. Alongside the proposed exit, Northpointe said its priorities would focus on the mortgage purchase program, specialty mortgage services and digital banking. Williams said the company is redirecting resources toward areas where it sees its strongest competitive advantages, with the aim of deepening customer relationships, growing relationship-based deposits and improving capital efficiency and operating leverage. The company had $7.67 billion in assets on September 30, 2026, an increase of $136.7 million from June 30 and $827 million from September 30, 2025, which it attributed mainly to loan growth. Deposits reached $5.44 billion, up $210.4 million, or 16% at an annualized rate, from the end of June, and $674.1 million, or 14%, year over year; the company linked the annual increase to growth in its digital platform and the opening of new deposit relationships.
Northpointe shares, listed under the ticker NPB, closed at $15.76 on October 27, 2026, compared with a close of $15.23 on October 26, according to EL7 data. Available data show the closing price rose from $15.13 on October 21 to $15.76 on October 27, without establishing a causal link between the share movement and the earnings results or proposed deal. On October 27, the company also announced a share repurchase program of up to $30 million, according to the article published on EL7. The next step in the proposed deal is to complete due diligence and negotiate a definitive agreement. If customary conditions are met, the company expects to complete it by the end of 2026.