NORTHPOINTE BANCSHARES INC
For the period ended Mar 31, 2026. Filed May 14, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 14, 2026
NPB$15.76-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-12.
0001336706-25-000008
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-14.
0001336706-26-000044
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 167 previous paragraphs and 156 current paragraphs.
76 unchanged; 51 reworded; 27 added; 28 removed; 12 previous and 2 current paragraphs rearranged.
Tables are not compared: 35 previous and 27 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
On December 9, 2025, we issued $70.0 million in aggregate principal amount of our 7.50% Fixed-to-Floating Rate Subordinated Notes due 2035. The proceeds of this issue, along with cash reserves, was used to redeem the remaining $77.0 million of our 8.25% Fixed-to-Floating Rate Non-Cumulative Perpetual Series A Preferred Stock (“Series A”) on December 30, 2025. We elected to redeem the Series A preferred stock because its interest rate was scheduled to reset to a higher rate on January 2, 2026. Preferred stock dividends and related costs for the year ended December 31, 2025 included $3.2 million in unamortized deal issuance costs related to the redemption of the Series A preferred stock, and a special one-time dividend of $2.50 per share paid on June 30, 2025 on our Series A preferred stock and our 8.25% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series B (“Series B”).
Current report
On March 12, 2026, the Company issued $20.0 million of subordinated notes due March 15, 2036. The notes become redeemable on March 15, 2031. Interest payments are due on June 15 and December 15 of each year at a fixed rate of 7.50% through March 15, 2031 and convert to a variable rate of three-month SOFR plus 4.15% with payments due quarterly.
Current report
More detail on our subordinated notes and preferred stock is provided in Note 9 and Note 10, respectively, in our Notes to Consolidated Financial Statements.
Current report
•Noninterest income was $22.1 million for the three months ended March 31, 2026, an increase of $728,000 from the three months ended March 31, 2025.
Current report
•Continued to grow the balance sheet, including:
Current report
◦MPP balances increased by $435.7 million at March 31, 2026 compared to December 31, 2025.
Current report
◦AIO loans increased by $28.0 million at March 31, 2026 compared to December 31, 2025.
Current report
◦Total deposits increased by $131.8 million at March 31, 2026 compared to December 31, 2025.
Current report
•We issued an additional $20.0 million of subordinated debt during the three months ended March 31, 2026.
Current report
Provision (Benefit) for Credit Losses
Current report
For the three months ended March 31, 2026, the total provision benefit for credit losses was $445,000, as compared to provision expense of $1.3 million for the same period in 2025.
Current report
The provision benefit for credit losses related to loans was $469,000 for the three months ended March 31, 2026, reflecting net charge-offs of $266,000 and a $735,000 decrease in allowance for credit losses, primarily attributable to lower delinquent loans and continued run-off in the construction loan portfolio. The provision for credit losses related to loans was $1.4 million for the three months ended March 31, 2025, reflecting net charge-offs of $260,000 and a $1.1 million increase in allowance for credit losses primarily attributable to continued growth in the portfolio and credit migration trends.
Current report
For the three months ended March 31, 2026, loan servicing fees increased by $2.6 million compared to the same period in 2025. This increase was driven primarily by the increase in fair value on MSRs, consistent with the increase in market rates, and higher fees on servicing from the increase in volume of loans serviced for others.
Current report
For the three months ended March 31, 2026, salaries and employee benefits increased by $3.9 million, as compared to the same period in 2025. This increase was driven primarily by higher variable compensation on MPP business, which is reflected in salaries and other compensation, and higher variable compensation on mortgage production, along with higher bonus and incentive expense and employee benefits.
Current report
For the three months ended March 31, 2026, other taxes and insurance increased by $450,000, as compared to same period in 2025, driven primarily by higher FDIC assessment expense, which fluctuates with changes in assets, wholesale funding mix and utilization of capital.
Current report
For the three months ended March 31, 2026, other non-interest expense increased by $523,000, as compared to the same period in 2025, driven primarily by additional expenses associated with the Company’s private label outsourcing of its non-specialized mortgage servicing to a scaled sub-servicer.
Current report
For the three months ended March 31, 2026, preferred stock dividends totaled $0.5 million, as compared to $2.2 million for the same period in 2025. This decrease was due to the redemption of the remaining 77,000 shares of our Series A Preferred Stock during the fourth quarter of 2025.
Current report
(1) Noninterest income for MPP only includes MPP related fees. All other noninterest income is reflected in Retail Banking.
Current report
(2) Includes data processing, professional services, office supplies and other miscellaneous expenses.
Current report
For the three months ended March 31, 2026, our Retail Banking segment reported net income before preferred dividends of $8.0 million, a decrease of $2.4 million, or 22.9%, from the $10.4 million reported for the same period in 2025. This decrease was driven primarily by higher noninterest expense, particularly salaries and employee benefits, and lower non-interest income, which more than offset the increase in net interest income.
Current report
(1)AIO and other consumer / home equity are aggregated into home equity lines of credit loans within the tables in our consolidated financial statements.
Current report
(2)Residential mortgage loans consist of closed end first liens, closed end second liens, and land development loans.
Current report
(1)AIO and other Consumer / home equity are aggregated into home equity lines of credit loans within the tables in our consolidated financial statements.
Current report
(2)Residential mortgage loans consist of closed end first liens, closed end second liens, and land development loans.
Current report
(1)AIO and other consumer / home equity are aggregated into home equity lines of credit loans within the tables in our consolidated financial statements.
Current report
(2)Residential Mortgage loans consist of closed end first liens, closed end second liens, and land development loans.
Current report
The allowance for credit losses was 0.15% of total loans at March 31, 2026, as compared to 0.17% as of December 31, 2025. This ratio includes MPP balances, which carry significantly lower reserves given the lack of loss history, and fair value loans, which are reserved for outside of the estimation of the ACL.
Removed paragraphs (28)
Previous report
Unless otherwise stated, all information in this document gives effect to a ten-for-one stock split, whereby each holder of our common stock received nine additional shares of common stock for each share owned as of the record date of December 19, 2024, which was distributed on December 30, 2024. The effect of the stock dividend on outstanding shares and per share figures has been retroactively applied to all periods presented in this document.
Previous report
On October 1, 2025, the United States federal government experienced a partial shutdown that affected certain federal agencies and services. We evaluated the impact of the government shutdown on our operations, financial reporting, and liquidity. While the shutdown resulted in delays in the processing of certain government-backed mortgage loans and temporarily limited or eliminated access to some federal data sources or programs used in underwriting, insurance and compliance, we have been able to continue our core banking and mortgage origination activities without material interruption.
Previous report
We have assessed the potential effects of the shutdown on credit risk, loan origination, and regulatory compliance. As of the date of these financial statements, we have not identified any material adverse impact on our financial condition, results of operations, or cash flows attributable to the government shutdown. We continue to monitor developments and will update our assessment as necessary in future reporting periods.
Previous report
Our allowance for credit losses, liquidity position, and regulatory capital ratios were not materially affected by the government shutdown. We maintain contingency plans to address disruptions in government services and have procedures in place to mitigate risks associated with delays in government-backed loan programs and other federal activities.
Previous report
We believe that the consolidated financial statements as of and for the period ended September 30, 2025, appropriately reflect all known impacts of the government shutdown. Actual results may differ from our current estimates if the effects of future government shutdowns or related disruptions become more significant.
Previous report
Highlights of the Third Quarter of 2025
Previous report
•Loans HFI portfolio was $5.97 billion at September 30, 2025, an increase of $1.54 billion, or 34.8%, from December 31, 2024, reflecting increases of $1.65 billion in MPP balances and $89.5 million in AIO loans over the period.
Previous report
•MPP loans increased to 54.0% of total gross loans at September 30, 2025 from 36.8% at December 31, 2024, and residential mortgage loans decreased to 29.1% of total gross loans at September 30, 2025 from 41.9% at December 31, 2024.
Previous report
For the nine months ended September 30, 2025, net interest income increased to $107.2 million, an increase of $23.0 million, or 27.4%, from $84.2 million for the same period in 2024. This increase was driven primarily by a 20.8% increase in earning assets and a 13 basis point improvement in net interest margin.
Previous report
Net interest margin was 2.47% for the three months ended September 30, 2025, an increase of 27 basis points from 2.20% for the three months ended September 30, 2024. Net interest margin was 2.43% for the nine months ended September 30, 2025, an increase of 13 bps from 2.30% for the nine months ended September 30, 2024.
Previous report
Provision for Credit Losses and Unfunded Commitments
Previous report
For the three months ended September 30, 2025, the total provision for credit losses was $828,000, as compared to $178,000 for the same period in 2024. The provision for credit losses related to loans was an expense of $852,000 for the three months ended September 30, 2025, reflecting net charge-offs of $977,000 and an ending allowance for credit losses of $12.3 million. For the three months ended September 30, 2024, the provision for credit losses related to loans was an expense of $484,000, reflecting $0.6 million in net charge-offs and an ending allowance for credit losses of $12.2 million. The increase in provision for credit losses for the three months ended September 30, 2025, as compared to the same period in 2024, was driven primarily by higher loan charge-offs, largely attributable to two larger mortgage loans.
Previous report
For the nine months ended September 30, 2025, the total provision for credit losses was $2.7 million, as compared to $118,000 for the same period in 2024. The provision for credit losses related to loans was $2.8 million for the nine months ended September 30, 2025, reflecting net charge-offs of $1.7 million and an ending allowance for credit losses of $12.3 million. For the nine months ended September 30, 2024, the provision for credit losses related to loans was $1.2 million, reflecting $1.3 million in net charge-offs and an ending allowance for credit losses of $12.2 million. The increase in provision for credit losses for the nine months ended September 30, 2025, as compared to the same period in 2024, reflects continued growth in the MPP portfolio, credit migration trends, and changes in the economic forecasts used in the credit models, as well as higher net charge-offs, largely attributable to two larger residential mortgage loans.
Previous report
For the three months ended September 30, 2025, noninterest income was $24.0 million, a decrease of $1.7 million compared to the same period in 2024, driven primarily by lower net gains on sales of loans from lower changes in the fair value of loans HFI and LRA, both attributable to changes in market interest rates. These were partially offset by higher loan servicing fees and other noninterest income. For the nine months ended September 30, 2025, noninterest income was $69.3 million, an increase of $10.0 million compared to the same period in 2024, driven primarily by higher net gains on sales of loans and other noninterest income, partially offset by lower loan servicing fees and service charges.
Previous report
(2) Includes proceeds from portfolio loan sales, which are netted against any associated changes in fair value of loans to determine total gain or loss on sale.
Previous report
(2) Includes proceeds from portfolio loan sales, which are netted against any associated changes in fair value of loans to determine total gain or loss on sale.
Previous report
For the three months ended September 30, 2025, net gain on sale of loans decreased by $3.6 million, as compared to the same period in 2024. Net gain on sale of loans in the three months ended September 30, 2025 included a gain of $2.2 million from the combined change in fair value of loans HFI and LRA, both attributable to changes in market interest rates, and a gain of $1.2 million on the sale of portfolio loans. In the three months ended September 30, 2024, the combined change in fair value of loans HFI and LRA totaled $17.8 million and we had net loss on sale of portfolio loans of $8.0 million. Excluding these items, net gain on sale of loans was $17.5 million, up $2.7 million from $14.8 million in the three months ended September 30,
Previous report
For the three months ended September 30, 2025, salaries and employee benefits increased by $3.6 million, as compared to the same period in 2024. This increase was driven primarily by higher bonus and incentive compensation expense attributable to the improvement in financial performance and restricted stock expense, higher variable commission compensation associated with higher mortgage volume, and higher employee benefits from medical insurance costs.
Previous report
For the nine months ended September 30, 2025, salaries and employee benefits increased by $8.2 million, as compared to the same period in 2024. This increase was driven primarily by higher bonus and incentive compensation expense attributable to the improvement in financial performance and restricted stock expense, higher variable commission compensation associated with higher mortgage volume, and higher employee benefits from medical insurance costs, partially offset by a decrease in base salaries and other compensation of $372,000 largely attributable to the Company’s strategic initiative to private label outsource its non-specialized mortgage servicing and a decrease of $136,000 in salary deferrals from loan origination due to lower portfolio originations in the nine months ended September 30, 2025.
Previous report
For the three months ended September 30, 2025, occupancy and equipment expense decreased by $203,000, as compared to the same period in 2024. For the nine months ended September 30, 2025, occupancy and equipment expense decreased by $755,000, as compared to the same period in 2024. The decrease in occupancy and equipment expense in both the three and nine month periods of 2025, as compared to the same periods in 2024, was driven primarily by lower building lease expense.
Previous report
For the three months ended September 30, 2025, data processing fees decreased by $17,000, as compared to the same period in 2024. For the nine months ended September 30, 2025, data processing fees decreased by $596,000, as compared to the same period in 2024. These decreases from 2024 are a result of our outsourcing of mortgage servicing as much of our data processing costs are unit based, with lower volume resulting in lower data processing costs.
Previous report
For the three months ended September 30, 2025, professional fees increased by $561,000, as compared to same period in 2024, and increased by $1.4 million for the nine months ended September 30, 2025, as compared to the same period in 2024. The increase in professional fees in both the three and nine month periods of 2025, as compared to the same periods in 2024, was driven primarily by higher ongoing public company compliance costs.
Previous report
For the three months ended September 30, 2025, other taxes and insurance increased by $396,000, as compared to same period in 2024, and increased by $80,000 for the nine months ended September 30, 2025, as compared to the same period in
Previous report
The increase in other taxes and insurance in both periods was driven primarily by higher FDIC assessment expense resulting from the growth in assets and continued utilization of capital.
Previous report
For the three months ended September 30, 2025, all other categories of non-interest expenses increased by $694,000, as compared to the same period in 2024. For the nine months ended September 30, 2025, other expenses increased by $2.0 million, as compared to the same period in 2024. Other expenses include several categories of expenses including sub-servicing expense, marketing, loan collection, credit reporting fees, loan repurchase reserve and other variable expenses tied to mortgage volume. The largest driver of the increase in other expenses in both the three and nine month periods of 2025, as compared to the same periods in 2024, was from higher sub-servicer expenses resulting from the Company’s strategic initiative to private label outsource its non-specialized mortgage servicing. This incremental sub-servicer expense was more than offset by the savings in salaries and benefits expense achieved as a result of the strategic initiative. The remainder of the increase in other expenses in both the three and nine month periods of 2025, as compared to the same periods in 2024, was driven primarily by lower levels of loan repurchase reserve net benefit, partially offset by lower expenses across a number of categories.
Previous report
For the three months ended September 30, 2025, our preferred stock dividend expense was $2.0 million, as compared to $1.6 million for the same period in 2024. For the nine months ended September 30, 2025, our preferred stock dividend expense was $6.5 million, as compared to $5.9 million for the same period in 2024. Preferred stock dividend expense for the nine month period ended September 30, 2025 include an additional special one-time dividend of $2.50 per share paid on June 30, 2025 on the Company’s 8.25% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A (“Series A”), and the Company’s 7.25% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series B (“Series B”). This dividend was paid in connection with amendments made to the Company’s Series A and Series B preferred stock to extend the registration rights agreements deadlines to January 2, 2026 for Series A and to January 2, 2027 for Series B. Preferred stock dividend expense for the three and nine month periods ended September 30, 2024 include gains related to the repurchase of preferred stock.
Previous report
For the three months ended September 30, 2025, our Retail Banking segment reported net income before preferred dividends of $10.1 million, a decrease of $1.6 million, or 13.4%, from the $11.6 million reported for the same period in 2024. For the nine months ended September 30, 2025, our Retail Banking segment reported net income before preferred dividends of $30.9 million, an increase of $4.5 million, or 17.1%, over the $26.4 million reported for the same period in 2024. The decrease in the three months ended September 30, 2025 compared to the same period in 2024 was primarily due to higher noninterest expense, particularly salaries and employee benefits, more than offsetting the increase in net interest income. The increase in the nine month period was driven primarily by higher interest income and noninterest income, which outpaced the increase in noninterest expense. The increase in noninterest expense in both periods reflects higher variable mortgage commissions and higher professional fees and overhead associated with being a public company.
Previous report
At September 30, 2025, we had a total of $98.7 million of preferred stock outstanding, as compared to $103.6 million at December 31, 2024. On March 31, 2025, we redeemed 5,000 shares of our 8.25% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A for $4.9 million. In 2024, we redeemed 13,000 shares of the Series A Preferred Stock for $11.6 million.
Reworded paragraphs (51)
Previous wording
The following section presents additional information and highlights significant changes in the financial condition of Northpointe Bancshares, Inc. (the “Company”) and our wholly owned subsidiary, Northpointe Bank (the “Bank”), from December 31, 2024 through September 30, 2025, and on our results of operations for the three and nine months ended September 30, 2025 and 2024. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements that involve risk, uncertainties and assumptions. Certain risks, uncertainties and other factors, including but not limited to those set forth under “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors,” and elsewhere in this Quarterly Report on Form 10-Q, may cause actual results to differ materially from those projected in the forward looking statements. We assume no obligation to update any of these forward-looking statements.
Current wording
The following section presents additional information and highlights significant changes in the financial condition of Northpointe Bancshares, Inc. (the “Company”) and our wholly owned subsidiary, Northpointe Bank (the “Bank”), from December 31, 2025 through March 31, 2026, and on our results of operations for the three months ended March 31, 2026 and 2025. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements that involve risk, uncertainties and assumptions. Certain risks, uncertainties and other factors, including but not limited to those set forth under “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors,” and elsewhere in this Quarterly Report on Form 10-Q, may cause actual results to differ materially from those projected in the forward looking statements. We assume no obligation to update any of these forward-looking statements.
Previous wording
Headquartered in Grand Rapids, Michigan, we are a bank holding company that focuses on (1) providing a best-in-class platform for independent mortgage bankers nationwide to utilize as an alternative to traditional mortgage warehouse lending (we refer to this business as our Mortgage Purchase Program, or “MPP”) and (2) offering attractive products and services to our residential mortgage and digital banking retail customers. Our residential lending business provides a comprehensive range of financing options nationwide through two main channels: consumer direct and traditional retail. We have a total of 129 mortgage originators across 26 states. These channels combine the convenience of online, self-service platforms with the personalized service of an experienced residential mortgage loan officer. Both residential mortgage loan origination channels are supported by our proprietary point-of-service digital platform that streamlines the loan application and closing processes. Our consumer direct and traditional retail channels primarily originate mortgage loans which are saleable through an end investor. In addition, our traditional retail channel selectively originates first-lien home equity lines which are tied seamlessly to a demand deposit sweep account (we refer to the loans we originate as “All-in-One” or “AIO” loans). We have one bank branch located in Grand Rapids, Michigan and physical loan production offices located in 25 cities in 16 states across the country, which are supported by our centralized operations and back-office support teams based in Grand Rapids, Michigan.
Current wording
Our residential lending business provides a comprehensive range of financing options nationwide through two main channels: consumer direct and traditional retail. We are a nationwide mortgage lender, with 122 mortgage originators across 25 states. These channels combine the convenience of online, self-service platforms with the personalized service of an experienced residential mortgage loan officer. Both residential mortgage loan origination channels are supported by our proprietary point-of-service digital platform that streamlines the loan application and closing processes. Our consumer direct and traditional retail channels primarily originate mortgage loans which are saleable through an end investor. In addition, our traditional retail channel selectively originates first-lien home equity lines which are tied seamlessly to a demand deposit sweep account (we refer to the loans we originate as “All-in-One” or “AIO” loans). We have one bank branch located in Grand Rapids, Michigan and physical loan production offices located in 24 cities in 15 states across the country, which are supported by our centralized operations and back-office support teams based in Grand Rapids, Michigan.
Previous wording
Our results of operations are driven by a combination of net interest income, which is the difference between interest income from interest-earning assets and interest expense on interest-bearing liabilities, as well as fee income from a variety of sources. Key components of noninterest income include gains from the sale of newly originated loans, loan servicing fees, MPP fees, service charges from our deposit services, and other fees. Our principal operating expense, aside from interest expense, consists of salaries and employee benefits, including commissions paid to loan originators, occupancy and equipment costs, data processing expense, professional fees, and provisions for credit losses. Our income is affected by regulatory, economic, and competitive factors that influence interest rates, residential loan demand and deposits costs. In addition, we are subject to interest rate risk to the degree that our interest-earnings assets mature or reprice at different times or at different speeds than our interest-bearing liabilities.
Current wording
Our results of operations are driven by a combination of net interest income, which is the difference between interest income from interest-earning assets and interest expense on interest-bearing liabilities, as well as fee income from a variety of sources. Key components of noninterest income include gains from the sale loans, loan servicing fees, MPP fees, service charges from our deposit services, and other fees. Our principal operating expense, aside from interest expense, consists of salaries and employee benefits, including commissions paid to loan originators, occupancy and equipment costs, data processing expense, professional fees, and provisions for credit losses. Our income is affected by regulatory, economic, and competitive factors that influence interest rates, residential loan demand and deposits costs. In addition, we are subject to interest rate risk to the degree that our interest-earnings assets mature or reprice at different times or at different speeds than our interest-bearing liabilities.
Previous wording
Our consolidated financial statements are prepared in accordance with GAAP and follow general practices within the banking industry. Application of these principles requires management to make estimates, assumptions and complex judgments that affect amounts presented in our consolidated financial statements. These estimates, assumptions and judgments are based on information available as of the date of the financial statements; accordingly, as this information changes, the consolidated financial statements could reflect different estimates, assumptions, and judgments. Our critical accounting policies are described in detail in our 2024 Form 10-K.
Current wording
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and follow general practices within the banking industry. Application of these principles requires management to make estimates, assumptions and complex judgments that affect amounts presented in our consolidated financial statements. These estimates, assumptions and judgments are based on information available as of the date of the financial statements; accordingly, as this information changes, the consolidated financial statements could reflect different estimates, assumptions, and judgments.
Previous wording
Our methodology for determining the ACL and related provision for credit losses is described later in this section under “Provision for Credit Losses” and “Loan Portfolio”. In particular, this area of accounting requires a significant amount of judgment because a multitude of factors can influence the ultimate collection of a loan or other type of credit. It is extremely difficult to precisely measure the amount of expected credit losses in our loans held for investment (“HFI”) portfolio. We use a rigorous process to attempt to accurately quantify the necessary ACL and related provision for credit losses, but there can be no assurance that our modeling process will successfully identify all of the expected credit losses in our loan portfolio. The assumptions around establishing reasonable and supportable economic forecasts are particularly subjective. As a result, we could record future provisions for credit losses that may be significantly different than the levels that we recorded in prior periods.
Current wording
Our methodology for determining the ACL and related provision for credit losses is described later in this section under “Provision for Credit Losses” and “Loan Portfolio”. In particular, this area of accounting requires a significant amount of judgment because a multitude of factors can influence the ultimate collection of a loan or other type of credit. It is extremely difficult to precisely measure the amount of expected credit losses in our loans held for investment (“HFI”) portfolio. We use a rigorous process to attempt to estimate the necessary ACL and related provision for credit losses, but there can be no assurance that our modeling process will successfully identify all of the expected credit losses in our loan portfolio. The assumptions around establishing reasonable and supportable economic forecasts are particularly subjective. We believe the assumptions we utilize in estimating our ACL are reasonable based upon accepted industry practices and represent neither the most conservative nor aggressive assumptions.
Previous wording
We have established an LRA for loans sold to the FHLB. The LRA is funded and maintained by the FHLB at 1.20% of the loan balance and is used to offset credit losses over the life of the loans sold to the FHLB. If the LRA has not been depleted by losses, funds are returned to the Company over time, beginning after five years and continuing through 25 years. We carry the asset at estimated fair value. Fair value is determined using an income approach with various assumptions including expected cash flows, market discount rates, prepayment speeds, and other factors. These assumptions are particularly subjective and can have a material effect on the estimated LRA balance and income. We believe the assumptions that we utilize in estimating fair value are reasonable based upon accepted industry practices and represent neither the most conservative nor aggressive assumptions.
Current wording
We have established an LRA for loans sold to the FHLB. The LRA is initially funded through a reduction in the purchase price of 1.20% of the loan balance, maintained by the FHLB and is used to offset credit losses over the life of the loans sold to the FHLB. If the LRA has not been depleted by losses, funds are returned to the Company over time, beginning after five years and continuing through 25 years. We carry the asset at estimated fair value. The fair value of the LRA is determined based on a valuation model used by an independent third party, which is determined using an income approach with various assumptions including expected cash flows, market discount rates, prepayment speeds, expected loss rates and other factors. These assumptions are particularly subjective and can have a material effect on the estimated LRA balance and income. We believe the assumptions that we utilize in estimating fair value are reasonable based upon accepted industry practices and represent neither the most conservative nor aggressive assumptions.
Previous wording
We establish MSR assets when we sell loans with servicing retained and when we purchase mortgage servicing. The fair value of our mortgage loan servicing rights has been determined based on a valuation model used by an independent third party. There are several critical assumptions involved in establishing the value of this asset including estimated future prepayment speeds on the underlying mortgage loans, the interest rate used to discount the net cash flows from the mortgage loan servicing, the estimated amount of ancillary income that will be received in the future (such as late fees) and the estimated cost to service the mortgage loans. We believe the assumptions that we utilize in our valuation are reasonable based upon accepted industry practices for valuing mortgage loan servicing rights and represent neither the most conservative nor aggressive assumptions.
Current wording
We establish MSR assets when we sell loans with servicing retained and when we purchase mortgage servicing. MSRs are measured at fair value, with new capitalization reported in net gain on sale of loans and any subsequent changes reported in loan serving fees. The fair value of our MSRs are determined based on a valuation model used by an independent third party. There are several critical assumptions involved in establishing the value of this asset including estimated future prepayment speeds on the underlying mortgage loans, the interest rate used to discount the net cash flows from the mortgage loan servicing, the estimated amount of ancillary income that will be received in the future (such as late fees) and the estimated cost to service the mortgage loans. These assumptions are particularly subjective and can have a material effect on the estimated MSR balances and income. We believe the assumptions that we utilize in our valuation are reasonable based upon accepted industry practices for valuing mortgage loan servicing rights and represent neither the most conservative nor aggressive assumptions.
Previous wording
On July 4, 2025, “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14,” more commonly referred to as the “One Big Beautiful Bill Act” (“OBBBA”) was signed into law. OBBBA enacted broad changes to the domestic and international taxation arena by extending many expiring Tax Cuts and Jobs Act tax provisions among other individual and business tax relief measures, along with funding national defense and border security, cutting certain federal spending programs, phasing out certain renewable energy credits created by the Inflation Reduction Act, and raising the national debt ceiling, among other things. Management has evaluated the potential impacts of the provisions of the OBBBA to the Company, however, based on information available to date, we do not anticipate the OBBBA will have a material impact on the Company’s consolidated financial position or results of operations, absent any further changes in law.
Current wording
On July 4, 2025, “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14,” more commonly referred to as the “One Big Beautiful Bill Act” (“OBBBA”) was signed into law. OBBBA enacted broad changes to the domestic and international taxation arena by extending many expiring Tax Cuts and Jobs Act tax provisions among other individual and business tax relief measures, along with funding national defense and border security, cutting certain federal spending programs, phasing out certain renewable energy credits created by the Inflation Reduction Act, and raising the national debt ceiling, among other things. These changes did not have a material impact on our federal income tax expense or liability for the year ended December 31, 2025 or for the three months ended March 31, 2026. We do not expect these changes to have a material impact on future periods.
Previous wording
For the three months ended September 30, 2025, loan servicing fees increased by $1.4 million compared to the same period in 2024. For the nine months ended September 30, 2025, loan servicing fees decreased by $2.3 million compared to the same period in 2024. The increase in loan servicing fees in the three months ended September 30, 2025, as compared to the same period in 2024, was due to a lower negative fair value change on MSRs and an increase in fees on servicing from higher levels of loans serviced for others. The decrease in loan servicing fees in the nine months ended 2025, as compared to the same period in 2024, was driven primarily by lower revenues associated with a large bulk sale of serviced loans in the first quarter of 2024.
Current wording
Highlights of the First Quarter of 2026
Previous wording
•Net income available to common stockholders was $20.1 million for the three months ended September 30, 2025, an increase of $3.0 million, or 17.7%, from $17.1 million for the three months ended September 30, 2024.
Current wording
•Net income available to common stockholders was $21.7 million for the three months ended March 31, 2026, an increase of $6.7 million, or 44.3%, from $15.0 million for the three months ended March 31, 2025.
Previous wording
•Earnings per diluted common share was $0.57 for the three months ended September 30, 2025, as compared to $0.66 for the three months ended September 30, 2024.
Current wording
•Earnings per diluted common share was $0.62 for the three months ended March 31, 2026, as compared to $0.49 for the three months ended March 31, 2025.
Previous wording
•Net interest income before provision for credit losses was $40.3 million for the three months ended September 30, 2025, an increase of $11.9 million, or 42.0%, from the three months ended September 30, 2024, reflecting strong growth in MPP and AIO loans and a 27 basis point increase in net interest margin.
Current wording
•Net interest income before provision for credit losses was $41.3 million for the three months ended March 31, 2026, an increase of $10.9 million, or 35.8%, from the three months ended March 31, 2025, reflecting strong growth in MPP and AIO loans and a 7 basis point increase in net interest margin.
Previous wording
•Noninterest expense was $34.4 million for the three months ended September 30, 2025, an increase of $5.0 million from the three months ended September 30, 2024, driven primarily by higher bonus and incentive compensation, mortgage-related variable compensation and benefits expense.
Current wording
•Noninterest expense was $34.4 million for the three months ended March 31, 2026, an increase of $5.1 million from the three months ended March 31, 2025, driven primarily by higher incentive compensation expense consistent with the improvement in financial performance.
Previous wording
•Liquidity remained stable, and total cash and cash equivalents increased to $419.2 million at September 30, 2025, as compared to $376.3 million at December 31, 2024.
Current wording
•Liquidity remained stable, and total cash and cash equivalents decreased to $487.6 million at March 31, 2026, as compared to $496.5 million at December 31, 2025.
Previous wording
(1)Loan balance includes loans HFI and held for sale. Nonaccrual loans are included in total loan balances and no adjustment has been made for these loans in the yield calculation. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.
Current wording
(1)Loan balances include loans HFI and held for sale. Nonaccrual loans are included in total loan balances and no adjustment has been made for these loans in the yield calculation. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.
Previous wording
(2)Net loan fees of $44,000 and $83,000 for the three months ended September 30, 2025 and 2024, respectively, are included in interest income.
Current wording
(2)Net loan fees of $74,000 and $40,000 for the three months ended March 31, 2026 and 2025, respectively, are included in interest income.
Previous wording
(4)Noninterest earning assets includes the allowance for credit losses.
Current wording
(4)Noninterest earning assets include the allowance for credit losses.
Previous wording
For the three months ended September 30, 2025, net interest income was $40.3 million, an increase of $11.9 million, or 42.0%, from $28.4 million for the same period in 2024. This increase was driven primarily by a 25.8% increase in earning assets and a 27 basis point improvement in net interest margin.
Current wording
For the three months ended March 31, 2026, net interest income was $41.3 million, an increase of $10.9 million, or 35.8%, from $30.4 million for the same period in 2025. This increase was driven primarily by a $1.67 billion increase in average interest-earning assets and a 7 basis point improvement in net interest margin.
Previous wording
The increase in average interest-earning assets in both the three and nine month periods ending September 30, 2025, as compared to the same periods in 2024, reflect the strong growth within the MPP and AIO portfolios, partially offset by the continued run-off from the remainder of the loans HFI portfolio.
Current wording
The increase in average interest-earning assets in the three month period ending March 31, 2026, as compared to the same period in 2025, reflected the strong growth within the MPP and AIO portfolios, partially offset by the continued run-off from the remainder of the loans HFI portfolio.
Previous wording
The increase in net interest margin in both the three and nine month periods ended September 30, 2025, as compared to the same periods in 2024, was driven primarily by a decrease in the average rate paid on interest-bearing liabilities, which was partially offset by a smaller decrease in the average yield earned on interest-earning assets, both attributable to decreases in the federal funds rate. The net interest margin also continued to benefit from an improvement in the mix of interest-earning assets, with virtually all of the growth in loans coming from MPP and AIO, both of which carry higher average yields than the rest of the loan portfolio.
Current wording
Net interest margin was 2.42% for the three months ended March 31, 2026, an increase of 7 basis points from 2.35% for the three months ended March 31, 2025. This increase was driven primarily by a decrease in the average rate paid on interest-bearing deposits, consistent with the decrease in the federal funds rate, which outpaced the decrease in the yield earned on interest-earning assets. The net interest margin also continued to benefit from an improvement in the mix of interest-earning assets, with virtually all of the growth in loans coming from MPP and AIO, both of which carry higher average yields than the rest of the loan portfolio.
Previous wording
The provision for credit losses represents a charge to earnings necessary to establish an allowance for credit losses that, in management’s evaluation, is adequate to provide coverage for all expected future credit losses. The provision for credit losses is impacted by inherent risk characteristics in our loan portfolio, the level of nonperforming loans and net charge-offs, both current and historic, recent historical and projected future economic conditions, loan growth, loan mix, the direction of the change in collateral values, and the level of actual net charge-offs incurred. Our provision for credit losses reflects risks in the loans HFI portfolio, which is comprised predominately of collateralized single-family mortgage loans, with very low historical loss experience. Our provision for credit losses reflects both our loans HFI portfolio and the unfunded commitments on that portfolio.
Current wording
The provision (benefit) for credit losses represents a charge (gain) to earnings necessary to establish an allowance for credit losses that, in management’s evaluation, is adequate to provide coverage for all expected future credit losses. The provision (benefit) for credit losses is impacted by inherent risk characteristics in our loan portfolio, the level of nonperforming loans and net charge-offs, both current and historic, recent historical and projected future economic conditions, loan growth, the direction of the change in collateral values, and the level of actual net charge-offs incurred. Our provision (benefit) for credit losses reflects risks in the HFI loan portfolio, as well as the unfunded commitments on that portfolio. The HFI loan portfolio is comprised predominately of collateralized single-family mortgage loans with very low historical loss experience.
Previous wording
The provision for unfunded loan commitments was a benefit of $24,000 for the three months ended September 30, 2025, as compared to a benefit of $306,000 for the three months ended September 30, 2024. The benefit in both periods reflects lower levels of unfunded commitments driven primarily by continued run-off in the construction loan portfolio.
Current wording
The provision for unfunded loan commitments was $24,000 for the three months ended March 31, 2026, as compared to a benefit of $90,000 for the three months ended March 31, 2025. The benefit in the three months ended March 31, 2025 reflects lower levels of unfunded commitments driven primarily by continued run-off in the construction loan portfolio.
Previous wording
The following table presents the major components of our noninterest income for the three and nine month periods ended September 30, 2025 and 2024:
Current wording
The following table presents the major components of our noninterest income for the three month periods ended March 31, 2026 and 2025:
Previous wording
•Noninterest income was $24.0 million for the three months ended September 30, 2025, a decrease of $1.7 million from the three months ended September 30, 2024, driven primarily by lower gain on sale of loans, MPP fees and service charges, partially offset by higher loan servicing fees and other noninterest income.
Current wording
For the three months ended March 31, 2026, noninterest income was $22.1 million, a decrease of $728,000 compared to the same period in 2025, driven primarily by lower net gain on sale of loans and other noninterest income, partially offset by higher loan servicing fees and MPP fees.
Previous wording
The following tables present the major components of our loan servicing fees and net gain on sale of loans for the three and nine month periods ended September 30, 2025 and 2024:
Current wording
The following tables present the major components of our loan servicing fees and net gain on sale of loans for the three month periods ended March 31, 2026 and 2025:
Previous wording
For the three months ended September 30, 2025, MPP fees decreased by $81,000, as compared to the same period in 2024. For the nine months ended September 30, 2025, MPP fees increased by $129,000 compared to the same period in 2024. The decrease in MPP fees in the three months ended September 30, 2025 as compared to the same period in 2024 reflects lower levels of participations during 2025. The increase in MPP fees in the nine month period of 2025, as compared to the same period in 2024, was driven primarily by higher levels of funded loans in the MPP business.
Current wording
For the three months ended March 31, 2026, MPP fees increased by $829,000, as compared to the same period in 2025. This increase reflects both higher levels of funded loans and participations in the MPP business.
Previous wording
For the nine months ended September 30, 2025, net gain on sale of loans increased by $9.2 million, as compared to the same period in 2024. Net gain on sale of loans in the nine months ended September 30, 2025 included a gain of $7.7 million from the combined change in fair value of loans HFI and LRA, both attributable to changes in market interest rates, and a gain of $1.2 million on the sale of portfolio loans. In the nine months ended September 30, 2024, the combined change in fair value of loans HFI and LRA totaled $16.8 million and we experienced net loss on sale of portfolio loans of $8.0 million. Excluding these items, net gain on sale of loans was $49.9 million, up $9.1 million from $40.8 million in the nine months ended September 30, 2024. The increase from the nine months ended September 30, 2024 was driven primarily by higher saleable residential mortgage rate lock commitments and originations.
Current wording
For the three months ended March 31, 2026, net gain on sale of loans decreased by $2.0 million, as compared to the same period in 2025. Net gain on sale of loans in the three months ended March 31, 2026 included a loss of $1.2 million from the combined change in fair value of loans HFI and LRA, both attributable to the increase in market interest rates. For the three months ended March 31, 2025, the combined change in fair value of loans HFI and LRA was a gain totaling $3.7 million, attributable to the decrease in market interest rates. Excluding these items, net gain on sale of loans was $17.8 million for the three months ended March 31, 2026, up $2.9 million from $14.9 million for the three months ended March 31, 2025. This increase was driven primarily by higher saleable residential mortgage rate lock commitments and originations.
Previous wording
For the three months ended September 30, 2025, other noninterest income increased by $730,000, as compared to the same period in 2024. Noninterest income for the three months ended September 30, 2025 included net gains on sale of other real estate owned of $282,000 compared to net losses of $445,000 for the same period in 2024. Other noninterest income in the three months ended September 30, 2024 also included $312,000 in losses on lease termination and sale of assets. For the nine months ended September 30, 2025, other noninterest income increased by $3.8 million compared to the same period in 2024. For the nine months ended September 30, 2025, we recognized a $2.0 million gain on debt extinguishment of $102.5 million in FHLB advances, and we did not have any such debt extinguishment gain or loss for the same period in 2024. Additionally, in the nine months ended September 30, 2024 we recognized a loss of $1.1 million on the sale of MSRs. We had no such loss in the 2025 period.
Current wording
For the three months ended March 31, 2026, other noninterest income decreased by $2.2 million, as compared to the same period in 2025. For the three months ended March 31, 2026, other noninterest income included valuation writedowns on other real estate owned of $171,000 compared to $76,000 for the same period in 2025. For the three months ended March 31, 2025, the Company recognized a $2.0 million gain on debt extinguishment of $102.5 million in FHLB advances, and did not have any such debt extinguishment gain or loss for the same period in 2026.
Previous wording
The following tables present the major components of our noninterest expense for the three and nine month periods ended September 30, 2025 and 2024:
Current wording
The following tables present the major components of our noninterest expense for the three month periods ended March 31, 2026 and 2025:
Previous wording
For the three months ended September 30, 2025, noninterest expense was $34.4 million, an increase of $5.0 million, compared to the same period in 2024. For the nine months ended September 30, 2025, noninterest expense was $95.5 million, an increase of $10.3 million, compared to the same period in 2024. Salaries and employee benefits expense represent the largest component of our noninterest expense, which are broken out in the below tables for the three and nine month periods ended September 30, 2025 and 2024:
Current wording
For the three months ended March 31, 2026, noninterest expense was $34.4 million, an increase of $5.1 million, compared to the same period in 2025. This increase was driven primarily by higher salaries and benefit expense. The table below identifies the primary components of salaries and benefits expense for the three month periods ended March 31, 2026 and 2025:
Previous wording
For the three months ended September 30, 2025, total income tax expense was $7.0 million, as compared to $5.9 million for the same period in 2024. For the nine months ended September 30, 2025, total income tax expense was $18.7 million, as compared to $14.1 million for the same period in 2024. The effective tax rate was 24.00% and 23.79% for the three and nine months ended September 30, 2025, respectively, as compared to 24.02% and 24.15%, respectively, for the same periods in 2024.
Current wording
For the three months ended March 31, 2026, total income tax expense was $7.3 million, as compared to $5.3 million for the same period in 2025. The effective tax rate was 24.72% for the three months ended March 31, 2026, as compared to 23.67% for the same period in 2025, reflecting additional income tax expense related to non-deductible compensation tax rules for publicly traded companies.
Previous wording
The following tables present our reported segment results for the three and nine month periods ended September 30, 2025 and 2024:
Current wording
The following tables present our reported segment results for the three month periods ended March 31, 2026 and 2025:
Previous wording
For the three months ended September 30, 2025, our MPP segment reported net income before preferred dividends of $12.1 million, an increase of $5.0 million, or 71.4%, over the $7.1 million reported for the same period in 2024. This increase was driven primarily by a 97.8% increase in average balances which drove higher net interest income and fees. For the nine months ended September 30, 2025, our MPP segment reported net income before preferred dividends of $28.8 million, an increase of $11.1 million, or 62.4%, over the $17.8 million reported for the same period in 2024. This increase was driven primarily by a 72.0% increase in average balances which drove higher net interest income and fees. The increase in average balances in both periods reflects strong loan growth from new customer acquisition and market share gains.
Current wording
For the three months ended March 31, 2026, our MPP segment reported net income before preferred dividends of $14.1 million, an increase of $7.3 million, or 106.6%, over the $6.8 million reported for the same period in 2025. This increase was driven primarily by a 91.2% increase in average balances which drove higher net interest income and fees. The increase in average balances reflects strong loan growth from new customer acquisition and market share gains.
Previous wording
Total assets were $6.84 billion at September 30, 2025, as compared to $5.22 billion at December 31, 2024. This $1.62 billion increase in total assets was driven primarily by higher balances of loans HFI (particularly MPP loans) and loans held for sale, along with higher cash and cash equivalents.
Current wording
Total assets were $7.40 billion at March 31, 2026, as compared to $7.02 billion at December 31, 2025. This $373.1 million increase in total assets was driven primarily by higher loan balances, including loans HFI and loans held for sale, which increased by $378.4 million over the prior year end period.
Previous wording
We also have a smaller portfolio of construction loans, second lien home equity lines of credit, and commercial loans, which combined represented less than 2% of the overall loan portfolio as of September 30, 2025.
Current wording
We also have a smaller portfolio of construction loans, home equity lines of credit (non-AIO), and commercial loans, which combined represented less than 1% of the overall loan portfolio as of March 31, 2026.
Previous wording
At September 30, 2025, our total loans net of allowance for credit losses including loans held for sale was $6.21 billion, as compared to $4.64 billion on December 31, 2024. This increase of $1.58 billion since year end 2024 was driven primarily by the strong growth in MPP and AIO balances, which increased by $1.65 billion and $89.5 million, respectively. Growing the MPP business remains one of our top strategic priorities, and reflects the strength of our scalable technology, long-standing strong relationships, as well as our ability to capitalize on recent market disruption within the business line. We also remain focused on prudently growing the portfolio of first-lien home equity lines, which includes AIO loans.
Current wording
At March 31, 2026, our total loans net of allowance for credit losses including loans held for sale was $6.70 billion, as compared to $6.33 billion on December 31, 2025. This increase of $378.4 million since year end 2025 was driven primarily by the strong growth in MPP balances, which increased by $435.7 million, reflecting the strength of scalable technology, long-standing strong relationships built by account executives since inception, as well as our ability to capitalize on recent market disruption within the business line. Another key driver of our overall loan growth is growth in our AIO loans, which increased by $28.0 million to $760.6 million at March 31, 2026 from $732.6 million at December 31, 2025.
Previous wording
As of September 30, 2025, residential mortgage comprised 29.1% of our total loan portfolio compared to 54.0% for MPP and 11.3% for AIO loans. As of December 31, 2024, residential mortgage comprised 41.9% of our total loan portfolio compared to 36.8% for MPP and 13.2% for AIO loans. The reduction in residential mortgages reflects normal amortization and pay-offs, as we are not strategically growing this portfolio.
Current wording
As of March 31, 2026, residential mortgage comprised 25.76% of our total loan portfolio compared to 57.55% for MPP and 11.34% for AIO loans. As of December 31, 2025, residential mortgage comprised 28.05% of our total loan portfolio compared to 54.10% for MPP and 11.57% for AIO loans. The reduction in residential mortgage loans as a percentage of total loans reflects normal amortization and pay-offs, as we continue to focus on growing our two main portfolios, AIO and MPP. Outside of these two portfolios, no other significant loans are being added to the loans HFI portfolio. While MPP represents a significant and growing portion of our loan portfolio, management actively monitors concentration risk, liquidity characteristics, and counterparty exposure associated with this business line.
Previous wording
As of September 30, 2025, 54.3% of our total loan portfolio had a contractual maturity of less than one year, up from 37.3% at December 31, 2024. The increase was primarily due to growth in our MPP business over this period. Our MPP facilities are floating rate and generally have terms of 30 days or less given that is the time period that a funded mortgage stays in our mortgage banking client’s facility prior to the sale of the mortgage in the secondary market. Very few of our loans have intermediate contractual maturities of between one and fifteen years. As of September 30, 2025, 45.2% of total loans had contractual maturities of longer than 15 years, compared to 62.1% at December 31, 2024. For our two largest categories of long duration loans as of September 30, 2025, 75.2% of residential mortgage and 100% of our AIO Loans were floating rate.
Current wording
As of March 31, 2026, 57.6% of our total loan portfolio had a contractual maturity of less than one year, up from 54.4% at December 31, 2025. The increase was primarily due to growth in our MPP business over this period. Our MPP facilities are floating rate and generally have terms of 30 days or less given that is the time period that a funded mortgage stays in our mortgage banking client’s facility prior to the sale of the mortgage in the secondary market. Very few of our loans have intermediate contractual maturities of between one and fifteen years. As of March 31, 2026, 41.8% of total loans had contractual maturities of longer than 15 years, compared to 45.1% at December 31, 2025. Within our two largest categories of long duration loans as of March 31, 2026, 76.9% of residential mortgage and 100% of our AIO Loans were floating rate.
Previous wording
At September 30, 2025, nonperforming assets were $85.2 million compared to $82.0 million at December 31, 2024. Nonperforming assets as a percent of total assets was 1.25% at September 30, 2025 compared to 1.57% at December 31, 2024.
Current wording
At March 31, 2026, nonperforming assets were $90.7 million compared to $92.7 million at December 31, 2025. Nonperforming assets as a percent of total assets decreased to 1.23% at March 31, 2026, compared to 1.32% at December 31, 2025, reflecting the decrease in nonperforming assets and the growth in our MPP portfolio which does not have any non-performing assets.
Previous wording
A substantial portion of the Company's non-performing loans are wholly or partially guaranteed by the U.S. Government, so asset quality metrics within this Quarterly Report on Form 10-Q are shown with and without these guaranteed loans. Excluding the portion of our loans that are wholly or partially guaranteed by the U.S. Government, nonperforming assets to total assets decreased to 0.84% at September 30, 2025, compared to 0.95% at December 31, 2024. At September 30, 2025, approximately 33% of our nonperforming loans have a form of government guarantee.
Current wording
Excluding the portion of our loans that are wholly or partially guaranteed by the U.S. Government, nonperforming assets to total assets decreased to 0.86% at March 31, 2026, compared to 0.92% at December 31, 2025. At March 31, 2026, approximately 31% of our nonperforming loans have a form of government guarantee.
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Current report — wording carried from elsewhere
We are a bank holding company headquartered in Grand Rapids, Michigan. Our common stock is traded on the New York Stock Exchange under the ticker symbol NPB. Through our Bank, we focus on (1) providing a best-in-class platform for independent mortgage bankers nationwide to utilize as an alternative to traditional mortgage warehouse lending (we refer to this business as our Mortgage Purchase Program, or “MPP”) and (2) offering attractive products and services to our residential mortgage and digital banking retail customers.
Current report — wording carried from elsewhere
A substantial portion of the Company's non-performing loans are wholly or partially guaranteed by the U.S. Government, so asset quality metrics within this Quarterly Report on Form 10-Q are shown with and without these guaranteed loans.
Rearranged previous paragraphs (12)
Previous report — wording carried elsewhere
The following table presents average balance sheet information, interest income, interest expense and the corresponding average yield earned and rates paid for the nine months ended September 30, 2025 and 2024:
Previous report — wording carried elsewhere
(1)Loan balance includes loans HFI and held for sale. Nonaccrual loans are included in total loan balances and no adjustment has been made for these loans in the yield calculation. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.
Previous report — wording carried elsewhere
(2)Net loan fees of $114,000 and $216,000 for the nine months ended September 30, 2025 and 2024, respectively, are included in interest income.
Previous report — wording carried elsewhere
(3)Average yield based on carrying value and there are no tax-exempt securities in the portfolio.
Previous report — wording carried elsewhere
(4)Noninterest earning assets includes the allowance for credit losses.
Previous report — wording carried elsewhere
(5)Net interest spread is the average yield on total interest-earning assets minus the average rate on total interest-bearing liabilities.
Previous report — wording carried elsewhere
(6)Net interest margin is annualized net interest income divided by total average interest-earning assets.
Previous report — wording carried elsewhere
The provision for unfunded loan commitments was a benefit of $79,000 for the nine months ended September 30, 2025, as compared to a benefit of $1.1 million for the nine months ended September 30, 2024. The benefits in both the periods reflects lower levels of unfunded commitments driven primarily by continued run-off in the construction loan portfolio.
Previous report — wording carried elsewhere
(1) Includes the change in fair value of interest rate locks, loans held for sale, and loans HFI.
Previous report — wording carried elsewhere
(3) Includes (a) net gain on sale of loans, (b) loan origination fees, points and costs, (c) provision from investor reserves, (d) gain or loss from forward commitments from hedging, and (e) fair value of lender risk account.
Previous report — wording carried elsewhere
The increase from the prior year quarter was driven primarily by higher saleable residential mortgage rate lock commitments and originations.
Previous report — wording carried elsewhere
(3) Reflects corporate overhead expense allocations used by both business segments; primarily consisting of corporate admin, finance, technology, human resources, risk, marketing and occupancy related allocations.