Northpointe Bancshares Reports Strong Q3 2025 Results, Driven by Growth in Mortgage Purchase Program and Loan Portfolio Expansion
Northpointe Bancshares, Inc. , the holding company for Northpointe Bank, reported another solid quarter of growth and profitability, showcasing strength across its lending and deposit businesses despite a complex interest rate environment. For the third quarter ended September 30, 2025, the company posted net income to common stockholders of $20.1 million, or $0.57 per diluted share, marking an improvement from $18.0 million ($0.51 per share) in the second quarter and $17.1 million ($0.67 per share) in the third quarter of 2024.
While earnings per share were slightly lower compared to the prior year, this decline reflected the additional shares issued during Northpointe’s successful initial public offering (IPO) completed on February 13, 2025. The bank’s financial performance reflected momentum across business lines, steady profitability, and balance sheet growth amid robust loan origination and funding activity.
“Our strong third-quarter results demonstrate the continued success of our strategic focus on mortgage and deposit growth,” said Chuck Williams, Chairman and CEO of Northpointe Bancshares. “We’ve seen exceptional performance in our Mortgage Purchase Program and All-in-One lending products, both of which continue to attract new customers and drive portfolio growth. Additionally, our team successfully onboarded new custodial deposit relationships, further strengthening our funding base and supporting future expansion.”
Financial Highlights
Northpointe’s third-quarter financial metrics underscored both operational discipline and strategic growth.
- Net income: $20.1 million, up $2.1 million from Q2 2025.
- Return on average equity (ROAE): 14.23%, compared to 13.60% in the prior quarter.
- Return on average tangible common equity (ROATCE): 15.41%, up from 14.49% in Q2.
- Return on average assets (ROAA): 1.34%, unchanged from the prior quarter.
- Efficiency ratio: 53.38%, a modest improvement from 53.80% in Q2, signaling cost control efficiency.
Net interest income after provision rose by $3.6 million compared with the prior quarter, reflecting a combination of asset growth and margin expansion. Non-interest income also climbed by $1.6 million, supported by favorable market rate movements impacting the fair value of loans and related accounts.
Non-interest expense increased by $2.6 million, primarily from higher compensation costs and FDIC insurance premiums, but this was offset by stronger overall revenue growth.
Mortgage and Loan Growth Power Results
The company’s Mortgage Purchase Program (MPP) continued to be a cornerstone of growth. Loan balances within the program surged by $1.7 billion over the prior year, while total funded loans for the quarter reached an impressive $9.8 billion.
Additionally, the bank’s All-in-One (AIO) loan balances—first-lien home equity lines seamlessly linked to demand deposit sweep accounts—expanded by 23% on an annualized basis.
Total loans held for investment climbed $470.4 million, or 34% annualized, from the second quarter, signaling continued loan demand and origination momentum.
On the funding side, deposits increased by $295.6 million from Q2, boosted by new custodial deposits added during the quarter. Northpointe’s wholesale funding ratio improved to 67.58% from 70.71% in the prior quarter, reflecting stronger organic funding through customer deposits.
Net Interest Income and Margin Expansion
Net interest income before provision reached $40.3 million in Q3 2025, up $3.8 million from the previous quarter. The increase reflected a 3-basis-point rise in net interest margin (to 2.47%) and a $465.6 million boost in average interest-earning assets.
Compared to the same quarter last year, net interest income jumped $11.9 million, driven by a 27-basis-point improvement in margin and a $1.33 billion increase in average interest-earning assets.
The margin improvement was primarily due to stronger loan yields and a more favorable mix of interest-earning assets, while funding costs remained largely stable. Northpointe’s focus on growing its MPP and AIO loan portfolios contributed significantly to this performance.
Credit Quality and Provisions
The company recorded a provision for credit losses of $828,000, up from $583,000 in Q2 and $178,000 in the same period last year. The increase reflected higher loan charge-offs, mostly from two larger mortgage loans, as well as portfolio growth and shifts in credit mix.
Despite this modest uptick in provisioning, overall asset quality remained strong. Total delinquent loans declined by $4.6 million from the prior quarter. The allowance for credit losses stood at $12.3 million, representing 0.21% of total loans held for investment, compared to 0.23% in Q2 and 0.28% a year ago.
Net charge-offs were just $977,000, or 7 basis points annualized, indicating limited credit deterioration. Importantly, a significant portion of non-performing loans remains guaranteed by U.S. government agencies, reducing actual credit exposure.
Non-Interest Income Trends
Non-interest income totaled $24.0 million, up $1.6 million from Q2 but down $1.7 million from the prior year. The quarter’s results benefited from favorable fair value adjustments on loans held for investment and lender risk accounts tied to market rate changes.
- Mortgage Purchase Program fees: $1.5 million, slightly higher sequentially but modestly lower year-over-year.
- Loan servicing fees: $1.1 million, down $408,000 from Q2 due to market rate-driven MSR revaluations but up $1.4 million year-over-year.
- Net gain on sale of loans: $21.0 million, compared with $19.4 million in Q2 and $24.6 million in Q3 2024.
- Other non-interest income: $285,000, reflecting gains on sale of other real estate and improved asset disposition outcomes.
Excluding one-time items, adjusted gain on sale of loans stood at $17.5 million, consistent with the prior quarter but up from $14.8 million a year earlier, reflecting improved mortgage rate lock commitments and higher origination volumes.
Expense Management
Total non-interest expense reached $34.4 million, rising from both Q2 2025 and Q3 2024. Salaries and benefits accounted for the bulk of the increase, rising to $24.3 million. The uptick included a $935,000 increase in stock appreciation rights (SARs) expense tied to stock price gains, as well as higher incentive compensation from stronger performance.
Professional fees decreased slightly from the prior quarter but were higher year-over-year due to public company compliance costs following Northpointe’s IPO. FDIC insurance premiums and other taxes rose as a result of balance sheet growth, while other operating expenses declined modestly quarter-over-quarter.
Income Taxes and Profitability Metrics
Income tax expense for the quarter was $7.0 million, representing an effective tax rate of 24.0%, roughly in line with prior periods. After taxes, Northpointe achieved consistent profitability growth, supported by solid returns on assets and equity and a continued focus on efficient operations.
Balance Sheet and Capital Strength
Northpointe’s total assets stood at $6.84 billion as of September 30, 2025, up $408.7 million from Q2 and $1.45 billion from a year earlier. The increase primarily reflected growth in MPP and AIO loan balances.
Gross loans held for investment reached $5.97 billion, a 35% year-over-year increase, underscoring the company’s continued success in expanding its mortgage-driven lending platforms. Loans held for sale totaled $259.8 million, reflecting the timing of loan sales and mortgage originations.
Deposits grew to $4.77 billion, marking an increase of $295.6 million from the prior quarter and $1.24 billion year-over-year, driven largely by custodial and digital banking accounts. Borrowings increased modestly to $1.37 billion, mainly due to utilization of short-term credit facilities.
The company’s capital ratios remain well above regulatory minimums, and its banking subsidiary continues to be classified as “well-capitalized.”
Dividend and Shareholder Return
Northpointe’s Board of Directors declared a quarterly cash dividend of $0.025 per share, payable on November 3, 2025, to shareholders of record as of October 15, 2025. The dividend underscores management’s confidence in the company’s financial strength and long-term growth trajectory.
Outlook and Management Commentary
Looking ahead, CEO Chuck Williams emphasized Northpointe’s focus on leveraging its expanding customer base and technology-driven platforms to sustain momentum. “Our growth in mortgage production, combined with disciplined risk management and diversified funding, positions Northpointe well for continued success into 2026,” he said. “We remain committed to balancing growth with stability, ensuring value creation for our shareholders, customers, and communities.”
Northpointe will host its third-quarter 2025 earnings conference call on October 22, 2025, at 10:00 a.m. ET. Interested participants can join by dialing 1-877-413-2414 and requesting the “Northpointe Bancshares, Inc. Conference Call.” The event will also be webcast live on the company’s investor relations website at ir.northpointe.com, with a replay available afterward.
About Northpointe Bancshares, Inc.
Northpointe Bancshares, Inc. (NYSE: NPB) is the holding company for Northpointe Bank, a customer-focused financial institution offering a full range of retail and commercial banking services, mortgage lending, and wealth management products. Headquartered in Grand Rapids, Michigan, Northpointe serves clients nationwide through innovative lending and deposit solutions designed to foster sustainable growth and long-term value.
