Northpointe Bancshares in Grand Rapids, Mich., has agreed to sell its direct mortgage origination channels to CMG Financial.
The $7.7 billion-asset Northpointe said in a press release that the sale will include its distributed retail and consumer direct mortgage origination channels. The sale is expected to close by the end of this year; pricing wasn’t disclosed.
“Given today’s economic and operating environment, and the continued evolution of the mortgage distribution channels, we are refocusing our strategic priorities where we have the strongest competitive advantages,” Chuck Williams, Northpointe’s chairman and CEO, said in the release. “This allows us to deepen client relationships, generate attractive portfolio assets, and grow relationship-based deposits, which we expect will improve operating leverage, capital efficiency and create a more robust, stable and scalable earnings profile.”
The company said it expects $6 million to $7 million in restructuring tied to the sale, with most realized in the fourth quarter. The Company will continue to close loans in process and will support affected team members.
Northpointe also said its third-quarter earnings fell by 31% from a year earlier, to $13.9 million. The results included $3.1 million in operational losses tied to “an isolated external deposit fraud incident” at the retail banking center. The company said it had notified its insurance carriers and plans to pursue all potential recoveries.
The results “were negatively impacted by fair value declines driven by higher long-term interest rates and expenses associated with an isolated deposit fraud within our retail banking center, which we promptly addressed through strengthened procedures and additional controls,” Williams said.