Northpointe Bancshares' 2026 NIM Stability Claims Clash With Prior Growth Hopes, Mortgage Rate Assumptions Shift

Date of Call: Jan 21, 2026

Financials Results

• EPS: $0.52 per diluted share for Q4 2025; $2.20 for full year 2025 excluding preferred stock expense

Guidance:

• Net interest margin expected to range between 2.45% and 2.55% for 2026.
• MPP loan balances expected to increase to between $4.1 and $4.3 billion by year-end 2026; an additional $300 to $500 million on average will be participated out.
• AIO period-ending balances expected to increase between $900 million and $1.0 billion by year-end 2026.
• Total saleable mortgage originations forecast to be $2.2-$2.4 billion with all-in margins of 2.75%-3.25%.
• Total non-interest expense expected to be $138 to $142 million for 2026.
• Provision expense expected to be $3-$4 million for 2026.
• Effective tax rate expected to be similar to 2025 level of 24.44% for 2026.

Business Commentary:

Asset Growth and Mortgage Purchase Program:

• Northpointe Bancshares grew its total assets from $5.2 billion at the end of 2024 to over $7 billion as of the Fourth Quarter 2025 earnings call.
• This growth was primarily driven by the expansion of the Mortgage Purchase Program (MPP) business, with MPP balances increasing by over $1.7 billion from the prior year.

Earnings and Profitability Improvement:

• The company increased its earnings per diluted share by 15% from $1.83 in 2024 to $2.11 in 2025, alongside an improvement in profitability metrics, with a return on average assets rising to 1.33% and return on average tangible common equity to 14.43%.
• This improvement was due to robust balance sheet growth, consistent earnings, and operational efficiencies, particularly in the MPP business.

Residential Mortgage Origination and Non-Interest Income:

• Residential mortgage originations for 2025 increased by 20% to $2.5 billion, contributing to a $18 million increase in non-interest income from 2024.
• The increase was largely due to the success of new lenders added to the retail channel and higher refinancing activity, especially in the consumer direct channel.

Deposit Growth and Funding Strategy:

• Total deposits ended the fourth quarter at $4.9 billion, with a significant $234.2 million increase in savings and money market deposits from a new digital deposit relationship.
• This growth was part of a strategy to bolster core deposits and reduce reliance on wholesale funding, with an aim to explore additional non-brokered deposit sources.

Credit Quality and Asset Management:

• The company reported net charge-offs of $1.2 million in the fourth quarter, with an annualized net charge-off ratio of eight basis points, indicating well-managed credit risk.
• Asset quality remains strong, with no systemic issues, and the company continues to focus on managing its loan portfolio, especially with the continued growth of high-quality MPP loans.

Sentiment Analysis:

Overall Tone: Positive

• "This was driven by sustained momentum and strengthened results across each of our key business lines, while maintaining a strong credit and compliance culture..." "I’m pleased to report that we did exactly what we said we would do, and I’m proud of how well our team has executed on Northpointe’s strategic direction." "We’ve delivered robust balance sheet growth and consistent earnings throughout 2025."

Q&A:

• Question from Crispin Love (Piper Sandler): How did the recent mortgage environment, with rates down to multi-year lows, impact your 2026 guidance for saleable mortgage originations and MPP loan balances?
  Response: Minimal impact; guidance assumes rates dip to below 6% by year-end but a sustained decline is needed for significant P&L benefit. Q1 2026 volume should be higher year-over-year based on current rates.

• Question from Crispin Love (Piper Sandler): What are you assuming for mortgage rates for full year 2026?
  Response: Rates dipping to below 6% towards the end of the year, with a slow decline throughout the year as per consensus economic forecasts; any further declines would be upside to guidance.

• Question from Crispin Love (Piper Sandler): What is implied in your 2026 net interest margin guidance (2.45%-2.55%) for the trajectory throughout the year?
  Response: Margin should be consistent across the year with slight improvement from loan mix changes offset by expected Fed rate cuts; depends on deposit betas and yield curve.

• Question from Damon Del Monte (KBW): Can you provide color on your comfort with the loan loss reserve level and the expected provision for 2026?
  Response: Provision guidance of $3-$4 million covers nominal growth in MPP and AIO and potential charge-off trends; reserve is comfortable at ~37 bps coverage to HFI book excluding MPP, with asset quality trends and economic forecasts providing support.

• Question from Damon Del Monte (KBW): Do you expect the 'taxes and insurance' line to continue rising, and what drives that?
  Response: Yes, expected to increase due to higher FDIC insurance charges driven by capital levels and the percentage of wholesale brokered funding; seeking non-brokered deposits to mitigate.

• Question from Damon Del Monte (KBW): What is the strategy for adding retail hires going forward?
  Response: Continuing with a formalized recruiting strategy; there is a pipeline of new originators being pursued.

• Question from Christopher Marinac (Janney Montgomery Scott): Could you elaborate on the digital deposit relationship mentioned and how many more opportunities like that exist for the new year?
  Response: Partnered with an online platform to gather digital deposits; brought in over $230 million in Q4. Continuing to explore similar opportunities, but no specifics for 2026 yet.

• Question from Christopher Marinac (Janney Montgomery Scott): Are these digital deposit relationships more attractive today given lower rates, and is there risk of them leaving?
  Response: Deposits are sensitive; they are paid competitive rates and monitored closely to retain them.

• Question from Christopher Marinac (Janney Montgomery Scott): How significant is the growth in custodial deposits from specialized mortgage servicing over the past six months?
  Response: An important part of funding strategy; additional custodial relationships are being explored, and these funds will remain as more MSRs are retained.

• Question from Christopher Marinac (Janney Montgomery Scott): Could new deposits like these drive the margin to the upper end of the guidance range?
  Response: Not embedded in margin guidance; would be upside. Better-than-expected deposit betas could help reach the top end.

• Question from Christopher Marinac (Janney Montgomery Scott): What could drive gain on sale margins to the upper end of the 2.75%-3.25% range for 2026?
  Response: Driven by competition and loan mix; lower competition and a higher proportion of retail channel loans (which have lower margins but lower expenses) could push margins up.

Contradiction Point 1

Net Interest Margin (NIM) Trajectory

Contradiction on NIM expected trajectory consistency vs. improvement into 2026.

What does your 2026 net interest margin (NIM) guidance of 2.45%-2.55% suggest about the expected trajectory for the year? - Crispin Love (Piper Sandler)

2025Q4: The NIM trajectory for 2026 is expected to be pretty consistent across the year. - Bradley Howes(CFO)

How will repricing dynamics and anticipated Fed rate cuts affect the near-term and early 2026 NIM trends? - Crispin Love (Piper Sandler & Co.)

2025Q3: Going into 2026, the NIM is expected to improve due to a favorable shift in loan mix. - Bradley Howes(CFO)

Contradiction Point 2

Impact of Mortgage Rate Changes on Volumes

Contradiction on the magnitude of impact of lower mortgage rates on refinance volume.

How has the recent low mortgage rate environment impacted your 2026 guidance for saleable mortgage originations and MPP loan balances, and what assumptions are you making for mortgage rates in 2026? - Crispin Love (Piper Sandler)

2025Q4: The recent mortgage rate decline has had a minimal impact on 2026 guidance. - Bradley Howes(CFO)

How are residential lending volumes and AIO volumes responding to recent mortgage rate changes, and how will they trend if rates decline further? - Crispin Love (Piper Sandler & Co.)

2025Q3: Lower mortgage rates significantly boosted refinance activity. Closed refinance volume in September increased almost 67% month-over-month. - Kevin Comps(CEO)

Contradiction Point 3

Future Deposit Growth Strategy

Contradiction on the expected size and nature of new custodial deposit relationships.

Can you elaborate on the digital deposit relationship's opportunities and its attractiveness/risk profile with lower rates? - Christopher Marinac (Janney Montgomery Scott)

2025Q4: The bank is continuously exploring similar opportunities [for digital deposits]. - Kevin Kamps(COO)

Will new custodial deposit relationships be similar in size to the Q3 $300M+ increase or smaller? - Damon Del Monte (Keefe, Bruyette, & Woods, Inc.)

2025Q3: The Q3 deposit relationship was likely an outsized, one-time addition. - Kevin Comps(CEO)

Contradiction Point 4

Mortgage Rate Environment and Guidance Assumptions

Contradiction on the assumed mortgage rate environment for 2026 guidance.

How have recent low mortgage rates impacted your 2026 guidance for saleable mortgage originations and MPP loan balances, and what rate assumptions are you making for 2026? - Crispin Love (Piper Sandler)

2025Q4: For 2026 guidance, we're assuming mortgage rates around 5.5% to 6.0%. - Bradley Howes(CFO)

How are recent mortgage rate changes affecting residential lending volumes, and how might AIO product volumes trend with further rate declines? - Crispin Love (Piper Sandler & Co.)

2025Q3: Our 2026 guidance assumes lower mortgage rates continuing to stimulate demand. - Bradley Howes(CFO)

Contradiction Point 5

Digital Deposit Relationship Sustainability

Contradiction on whether digital deposit opportunities are a ongoing strategy or a one-time event.

Can you elaborate on the digital deposit relationship, potential opportunities, and their attractiveness/risk at lower rates? - Christopher Marinac (Janney Montgomery Scott)

2025Q4: The bank is continuously exploring similar opportunities [for digital deposits]. - Kevin Kamps(COO)

Will new custodial deposit relationships match the $300M+ Q3 increase or be smaller? - Damon Del Monte (Keefe, Bruyette, & Woods, Inc.)

2025Q3: The Q3 deposit relationship was likely an outsized, one-time addition. - Kevin Comps(CEO)