NORTHPOINTE BANCSHARES INC
For the period ended Jun 30, 2026. Filed Aug 13, 2026.
View on SEC.govAbout this filing
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.
Jun 30, 2026 · Filed Aug 13, 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 2026-03-31; filed 2026-05-14.
0001336706-26-000044
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-13.
0001336706-26-000064
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 156 previous paragraphs and 163 current paragraphs.
97 unchanged; 47 reworded; 6 added; 11 removed; 1 previous and 13 current paragraphs rearranged.
Tables are not compared: 27 previous and 35 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 (6)
Current report
•Noninterest income was $21.9 million for the three months ended June 30, 2026, a decrease of $544,000 from the three months ended June 30, 2025.
Current report
For the three months ended June 30, 2026, net interest income was $42.4 million, an increase of $5.9 million, or 16.2%, from $36.5 million for the same period in 2025. This increase was driven primarily by a $1.30 billion increase in average interest-earning assets partially offset by an 11 basis point decrease in net interest margin.
Current report
For the six months ended June 30, 2026, net interest income increased to $83.7 million, an increase of $16.8 million, or 25.1%, from $66.9 million for the same period in 2025. This increase was driven primarily by a 26.4% increase in average interest-earning assets partially offset by a 3 basis point decrease in net interest margin.
Current report
For the three months ended June 30, 2026, the total provision (including both loans and unfunded commitments) for credit losses was an expense of $210,000, as compared to expense of $583,000 for the same period in 2025. The provision for credit losses for the three months ended June 30, 2026 reflected net charge-offs of $528,000 and a $264,000 decrease in allowance for credit losses, which was primarily attributable to lower levels of non-performing loans and continued change in loan mix, partially offset by slightly higher loss rates from the economic forecasts used in the credit models. The provision for credit losses for the three months ended June 30, 2025 reflected net charge-offs of $488,000 and a $60,000 increase in allowance for credit losses primarily attributable to continued growth.
Current report
For the three months ended June 30, 2026, noninterest expense was $35.2 million, an increase of $3.5 million, compared to the same period in 2025. For the six months ended June 30, 2026, noninterest expense was $69.7 million, an increase of $8.6 million, compared to the same period in 2025. These increase are explained further in the proceeding tables and commentary below.
Current report
For the three months ended June 30, 2026, salaries and employee benefits increased by $2.8 million, compared to the same period in 2025. For the six months ended June 30, 2026, salaries and employee benefits increased by $6.7 million compared to the same period in 2025. The increases from both comparable periods were driven primarily by higher salaries and other compensation as the Company enhanced its compliance, risk and information technology areas after going public early in 2025. Bonus and incentive compensation, and compensation tied to both MPP and mortgage production, are variable expenses, which increased based on the improvement in financial performance over the same relative periods.
Removed paragraphs (11)
Previous 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”).
Previous 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.
Previous 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.
Previous 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.
Previous report
•We issued an additional $20.0 million of subordinated debt during the three months ended March 31, 2026.
Previous report
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 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.
Previous report
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 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.
Previous report
(1) Noninterest income for MPP only includes MPP related fees. All other noninterest income is reflected in Retail Banking.
Previous report
(2) Includes data processing, professional services, office supplies and other miscellaneous expenses.
Reworded paragraphs (47)
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, 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.
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 June 30, 2026, and on our results of operations for the three and six months ended June 30, 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
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.
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 121 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 28 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
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.
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 and six months ended June 30, 2026. We do not expect these changes to have a material impact on future periods.
Previous wording
Highlights of the First Quarter of 2026
Current wording
Highlights of the Second Quarter of 2026
Previous 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.
Current wording
•Net income available to common stockholders was $21.3 million for the three months ended June 30, 2026, an increase of $3.2 million, or 18.0%, from $18.0 million for the three months ended June 30, 2025.
Previous 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.
Current wording
•Earnings per diluted common share was $0.60 for the three months ended June 30, 2026, as compared to $0.51 for the three months ended June 30, 2025.
Previous 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.
Current wording
•Net interest income before provision for credit losses was $42.4 million for the three months ended June 30, 2026, an increase of $5.9 million, or 16.2%, from the three months ended June 30, 2025, reflecting strong growth in MPP and AIO loans partially offset by an 11 basis point decrease in net interest margin.
Previous 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.
Current wording
•Noninterest expense was $35.2 million for the three months ended June 30, 2026, an increase of $3.5 million from the three months ended June 30, 2025, driven primarily by higher incentive compensation expense consistent with the improvement in financial performance.
Previous wording
◦MPP balances increased by $435.7 million at March 31, 2026 compared to December 31, 2025.
Current wording
◦MPP balances increased by $513.0 million at June 30, 2026 compared to December 31, 2025.
Previous wording
◦AIO loans increased by $28.0 million at March 31, 2026 compared to December 31, 2025.
Current wording
◦AIO loans increased by $64.6 million at June 30, 2026 compared to December 31, 2025.
Previous wording
◦Total deposits increased by $131.8 million at March 31, 2026 compared to December 31, 2025.
Current wording
◦Total deposits increased by $363.6 million at June 30, 2026 compared to December 31, 2025.
Previous 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.
Current wording
•Wholesale funding ratio decreased and liquidity remained stable, with total cash and cash equivalents of $538.4 million at June 30, 2026, as compared to $496.5 million at December 31, 2025.
Previous 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.
Current wording
(2)Net loan fees of $51,000 and $30,000 for the three months ended June 30, 2026 and 2025, respectively, are included in interest income.
Previous 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.
Current wording
The increase in average interest-earning assets for the three and six month periods ending June 30, 2026, as compared to the same periods 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
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.
Current wording
Net interest margin was 2.33% for the three months ended June 30, 2026, a decrease of 11 basis points from 2.44% for the three months ended June 30, 2025. The decrease was driven primarily by lower average yields on interest-earning assets, reflecting a decrease in the federal funds rate, along with tighter margins on the MPP business and a larger decrease in the Secured Overnight Financing Rate (“SOFR”). These were partially offset by a decrease in the average rate paid on interest-bearing deposits and an improvement in the mix of interest-earning assets, with virtually all 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 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 wording
For the six months ended June 30, 2026, the total provision (including both loans and unfunded commitments) for credit losses was a benefit of $235,000, as compared to expense of $1.9 million for the same period in 2025. The provision for credit losses for the six months ended June 30, 2026 reflected net charge-offs of $794,000 and a $1.0 million 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 for the six months ended June 30, 2025, reflected net charge-offs of $747,000 and a $1.2 million increase in allowance for credit losses primarily attributable to continued growth in the portfolio and credit migration trends.
Previous wording
The following table presents the major components of our noninterest income for the three month periods ended March 31, 2026 and 2025:
Current wording
The following table presents the major components of our noninterest income for the three and six month periods ended June 30, 2026 and 2025:
Previous 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.
Current wording
For the three months ended June 30, 2026, noninterest income was $21.9 million, a decrease of $544,000 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 and MPP fees. For the six months ended June 30, 2026, noninterest income was $44.0 million, a decrease of
Previous 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:
Current wording
The following tables present the major components of our loan servicing fees and net gain on sale of loans for the three and six month periods ended June 30, 2026 and 2025:
Previous wording
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 wording
For the three months ended June 30, 2026, loan servicing fees increased by $743,000 compared to the same period in 2025. For the six months ended June 30, 2026, loan servicing fees increased by $3.3 million compared to the same period in 2025. The increase from both comparable periods was driven primarily by changes 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.
Previous 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.
Current wording
For the three months ended June 30, 2026, MPP fees increased by $951,000 compared to the same period in 2025. For the six months ended June 30, 2026, MPP fees increased by $1.8 million compared to the same period in 2025. The increase from both comparable periods reflects both higher levels of funded loans and participations in the MPP business.
Previous 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.
Current wording
For the six months ended June 30, 2026, net gain on sale of loans decreased by $4.3 million, as compared to the same period in 2025. Net gain on sale of loans in the six months ended June 30, 2026 included a loss totaling $564,000 from the combined change in fair value of loans HFI and LRA, both attributable to the change in market interest rates. For the six months ended June 30, 2025, the combined change in fair value of loans HFI and LRA was a gain totaling $5.5 million, attributable to the change in market interest rates. Excluding these items, net gain on sale of loans was $34.2 million for the six months ended June 30, 2026, up $1.7 million from $32.4 million for the six months ended June 30, 2025. This increase was driven primarily by higher saleable residential mortgage rate lock commitments.
Previous 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.
Current wording
For the six months ended June 30, 2026, other noninterest income decreased by $2.2 million, as compared to the same period in 2025, as the Company recognized a $2.0 million gain on debt extinguishment of $102.5 million in FHLB advances during the six months ended June 30, 2025, 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 month periods ended March 31, 2026 and 2025:
Current wording
The following tables present the major components of our noninterest expense for the three and six month periods ended June 30, 2026 and 2025:
Previous 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:
Current wording
The tables below identifies the primary components of salaries and benefits expense for the three and six month periods ended June 30, 2026 and 2025:
Previous wording
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 wording
For the three months ended June 30, 2026, other taxes and insurance increased by $797,000 compared to same period in 2025. For the six months ended June 30, 2026, other taxes and insurance increased by $1.2 million compared to same period in 2025. The increases from both comparable periods were driven primarily by higher FDIC assessment expense, which fluctuates with changes in assets, wholesale funding mix and utilization of capital.
Previous wording
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 wording
For the six months ended June 30, 2026, other non-interest expense increased by $670,000 compared to the same period in 2025. This increase was driven primarily by additional expenses associated with the Company’s private label outsourcing of its non-specialized mortgage servicing to a scaled sub-servicer.
Previous 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.
Current wording
For the three months ended June 30, 2026, total income tax expense was $7.1 million, as compared to $6.3 million for the same period in 2025. For the six months ended June 30, 2026, total income tax expense was $14.4 million, as compared to $11.7 million for the same period in 2025. The effective tax rate was 24.72% for both the three and six months ended June 30, 2026, as compared to 23.67% for both the three and six months ended June 30, 2025, reflecting additional income tax expense related to non-deductible compensation tax rules for publicly traded companies. On its second quarter 2026 earnings call, the Company discussed it was exploring opportunities to purchase investment tax credits, which could help lower the overall effective tax rate in 2026.
Previous wording
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 wording
For the three months ended June 30, 2026, preferred stock dividends totaled $453,000, as compared to $2.3 million for the same period in 2025. For the six months ended June 30, 2026, preferred stock dividends totaled $906,000, as compared to $4.5 million for the same period in 2025. This decrease from both comparable periods was due to the redemption of the remaining 77,000 shares of our Series A Preferred Stock which occurred during the fourth quarter of 2025.
Previous wording
The following tables present our reported segment results for the three month periods ended March 31, 2026 and 2025:
Current wording
The following tables present our reported segment results for the three and six month periods ended June 30, 2026 and 2025:
Previous 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.
Current wording
For the three months ended June 30, 2026, our MPP segment reported net income before preferred dividends of $15.0 million, an increase of $5.1 million, or 51.3%, over the $9.9 million reported for the same period in 2025. This increase was driven primarily by a 50.7% increase in average balances which drove higher net interest income and fees. For the six months ended June 30, 2026, our MPP segment reported net income before preferred dividends of $29.1 million, an increase of $12.4 million, or 73.9%, over the $16.7 million reported for the same period in 2025. This increase was driven primarily by a 67.3% increase in average balances which drove higher net interest income and fees. The increase in average balances in both comparable periods reflects strong growth in MPP facilities from new customer acquisition and market share gains, along with increased balances from existing customers.
Previous wording
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 wording
For the three months ended June 30, 2026, our Retail Banking segment reported net income before preferred dividends of $6.8 million, a decrease of $3.7 million, or 35.3%, 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, along with a decrease in net interest income. For the six months ended June 30, 2026, our Retail Banking segment reported net income before preferred dividends of $14.8 million, a decrease of $6.1 million, or 29.1%, from the $20.8 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.
Previous 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.
Current wording
Total assets were $7.53 billion at June 30, 2026 compared to $7.02 billion at December 31, 2025. This $507.1 million increase in total assets was driven primarily by higher loan balances, including loans HFI and loans held for sale, which increased by $462.4 million over the prior year end period.
Previous wording
Our loan portfolio includes both loans HFI and loans held for sale. Our loans HFI portfolio comprises 96% of our total gross loans.
Current wording
Our loan portfolio includes both loans HFI and loans held for sale. Our loans HFI portfolio comprises 95% of our total gross loans.
Previous wording
Residential mortgage loans include fixed or adjustable-rate residential real estate loans collateralized by one-to-four family properties. Our portfolio is geographically diversified across the United States. To mitigate interest rate risk, most of the loans we choose to hold in our portfolio are floating rate loans. The majority of our residential mortgage loans at March 31, 2026 are first liens.
Current wording
Residential mortgage loans include fixed or adjustable-rate residential real estate loans collateralized by one-to-four family properties. Our portfolio is geographically diversified across the United States. To mitigate interest rate risk, most of the loans we choose to hold in our portfolio are floating rate loans. The majority of our residential mortgage loans at June 30, 2026 were first liens.
Previous 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.
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 approximately 1% of the overall loan portfolio as of June 30, 2026.
Previous 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.
Current wording
At June 30, 2026, our total loans net of allowance for credit losses including loans held for sale was $6.78 billion, as compared to $6.33 billion on December 31, 2025. This increase of $462.4 million since year end 2025 was driven primarily by the strong growth in MPP balances, which increased by $513.0 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 $64.6 million to $797.2 million at June 30, 2026 from $732.6 million at December 31, 2025.
Previous 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.
Current wording
As of June 30, 2026, residential mortgage comprised 24.56% of our total loan portfolio compared to 57.98% for MPP and 11.74% 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 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.
Current wording
As of June 30, 2026, 58.3% 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 June 30, 2026, 41.3% 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 June 30, 2026, 77.0% of residential mortgage and 100% of our AIO loans were floating rate.
Previous 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.
Current wording
At June 30, 2026, nonperforming assets were $86.7 million compared to $92.7 million at December 31, 2025. Nonperforming assets as a percent of total assets decreased to 1.15% at June 30, 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.
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Current report — wording carried from elsewhere
The following table presents average balance sheet information, interest income, interest expense and the corresponding average yield earned and rates paid for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
(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.
Current report — wording carried from elsewhere
(2)Net loan fees of $110,000 and $70,000 for the six months ended June 30, 2026 and 2025, respectively, are included in interest income.
Current report — wording carried from elsewhere
(3)Average yield based on carrying value and there are no tax-exempt securities in the portfolio.
Current report — wording carried from elsewhere
(4)Noninterest earning assets include the allowance for credit losses.
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(5)Net interest spread is the average yield on total interest-earning assets minus the average rate on total interest-bearing liabilities.
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(6)Net interest margin is annualized net interest income divided by total average interest-earning assets.
Current report — wording carried from elsewhere
Net interest margin was 2.37% for the six months ended June 30, 2026, a decrease of 3 basis points from 2.40% for the six months ended June 30, 2025. This decrease was driven primarily by a decrease in the yield earned on interest-earning assets, which outpaced the decrease in the average rate paid on interest-bearing deposits, consistent with the decrease in the federal funds rate and the continued improvement in the mix of interest-earning assets.
Current report — wording carried from elsewhere
$1.3 million 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 and MPP fees.
Current report — wording carried from elsewhere
(1) Includes the change in fair value of interest rate locks, loans held for sale, and loans HFI.
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(2) 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.
Current report — wording carried from elsewhere
For the three months ended June 30, 2026, net gain on sale of loans decreased by $2.3 million, as compared to the same period in 2025. Net gain on sale of loans in the three months ended June 30, 2026 included a gain totaling $657,000 from the combined change in fair value of loans HFI and LRA, both attributable to the change in market interest rates. For the three months ended June 30, 2025, the combined change in fair value of loans HFI and LRA was a gain totaling $1.8 million, attributable to the change in market interest rates. Excluding these items, net gain on sale of loans was $16.4 million for the three months ended June 30, 2026, down $1.1 million from $17.5 million for the three months ended June 30, 2025. This decrease was driven primarily by lower gain on sale margins, partially offset by higher saleable residential mortgage rate lock commitments.
Current report — wording carried from 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.
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Previous report — wording carried 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.