Q3 EPS Falls to $0.39 as Fraud Loss and Rate-Driven Write-Downs Hit; Mortgage Channels to Be Sold to CMG
NPB is trading near its 52-week low of $14.205 (11% above the low).
Summary
Diluted EPS dropped to $0.39 from $0.60 last quarter and $0.57 a year ago, with net income to common at $13.9 million versus $21.3 million in Q2. Two one-off items did most of the damage: a $9.3 million combined fair value decline on loans held for investment and the lender risk account (partly offset by a $5.0 million MSR gain) as long rates rose, and a $3.1 million operational loss from an isolated external deposit fraud at the retail banking center. Return on equity fell to 9.10% from 14.36% and the efficiency ratio jumped to 64.47% from 54.76%, while noninterest income came in at $12.3 million. Separately, the company signed a non-binding LOI to sell its distributed retail and consumer direct mortgage origination channels to CMG Financial, expecting to close by end of 2026, with $6-7 million of restructuring charges mostly in Q4 2026 plus an ~$800,000 impairment on a prior mortgage team acquisition intangible. This follows the October 6th 8-K raising the dividend 20% to $0.03 and the CEO's two open-market buys totaling roughly $2.75 million in late August and early September. The earnings call on October 21 at 10:00 a.m. ET should detail expense savings and the CMG transaction terms.
Updated with an SEC 8-K filing · What changed
Updates
· SEC 8-K — Northpointe estimates $6-7 million in restructuring charges, mostly in Q4 2026, plus an ~$800,000 impairment on a prior mortgage team acquisition intangible.
At the time of this announcement, NPB was trading at $15.78 on NYSE in the Finance sector, with a market capitalization of approximately $545.7M. The 52-week trading range was $14.21 to $19.71. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: BusinessWire.