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Northpointe Bancshares Q3 profit falls on loan revaluations and fraud costs

By Reuters News


Overview

  • U.S. home loans and retail banking provider's Q3 net income to common stockholders and EPS declined yr/yr and qtr/qtr

  • Company results impacted by higher interest rates and deposit fraud-related expenses

  • Northpointe to sell retail and consumer direct mortgage origination channels; expects Q4 restructuring charges


Outlook

  • Northpointe expects to close sale of mortgage origination channels to CMG by end-2026

  • Company estimates restructuring charges of $6 mln-$7 mln, mostly in Q4 2026

  • Northpointe plans to provide further details on restructuring and expense savings on Oct 21, 2026 call


Result Drivers

  • INTEREST RATE IMPACTS - Co said higher long-term interest rates led to $9.3 mln in fair value declines on loans, partly offset by a $5 mln increase in mortgage servicing rights value

  • DEPOSIT FRAUD EXPENSE - Co incurred $3.1 mln in operational losses from an isolated external deposit fraud incident at a retail banking center

  • LOAN GROWTH - Growth in Mortgage Purchase Program and All-in-One loan balances drove increases in average interest-earning assets


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 EPS

$0.39

Q3 Net Income

$14.38 mln

Q3 Net Interest Income

$43.66 mln

Q3 Provision for Credit Losses

$920,000


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the banks peer group is "hold."

  • Wall Street's median 12-month price target for Northpointe Bancshares Inc is $19.00, about 20.4% above its October 20 closing price of $15.78

  • The stock recently traded at 6 times the next 12-month earnings vs. a P/E of 7 three months ago


Reuters Recommended Reads

  • Oct 20 - CSB Bancorp Q3 net income rises 20% on higher net interest income and loan growth

  • Oct 20 - Nicolet Bankshares Q3 net income rises on lower expenses

  • Oct 20 - East West Bancorp Q3 revenue beats estimates on loan and deposit growth


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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