Add as a preferred source on GoogleNorthpointe Projects Up to $55 Million in Annualized Savings From Mortgage Channel Exit
The proposed transfer of its retail and direct-to-consumer mortgage teams to CMG Financial targets a year-end close, subject to due diligence and a final agreement.
Northpointe Bancshares expects a proposed transfer of its retail and consumer-direct mortgage teams to save $50 million to $55 million annually, as the bank shifts its attention to three other business areas.
The savings estimate is annualized: it expresses the projected savings at a yearly rate, not costs the company has already eliminated. Most of the reduction is expected to come from commissions, salaries and benefits. Other expected savings include occupancy, technology, professional fees, marketing and additional expenses.
On Oct. 21, Chief Financial Officer Brad Howes said the expense savings “will be greater than the revenue losses.” Northpointe projects full-year 2027 noninterest expenses of $80 million to $95 million. It also expects gain-on-sale revenue to drop substantially in the fourth quarter of 2026 and be nearly absent the following year.
The proposed arrangement with CMG Financial and its affiliates is centered on transferring and transitioning the teams. Loans, servicing rights and other material assets are excluded. The parties have a nonbinding letter of intent, and Northpointe is aiming to complete the transaction by the end of 2026. Closing depends on due diligence, a definitive agreement and customary conditions.
The boards of Northpointe Bancshares and Northpointe Bank approved the exit plan on Oct. 18. The company estimates restructuring charges of $6 million to $7 million, with most expected in the fourth quarter. The estimate primarily covers cash costs for severance and employee transitions.
After the planned exit, Northpointe has identified its Mortgage Purchase Program, Specialty Servicing and Digital Banking as strategic priorities. The purchase program advances funds to independent mortgage bankers against loans generally sold into the secondary market within a short period, typically less than 30 days. Northpointe also plans to finish loans already in process and support affected employees.
The company disclosed the proposal with its third-quarter results, covered in earlier earnings coverage.
John Kim
John Kim reports on the digital-asset business for TokenPost. Send corrections or tips to info@tokenpost.com.