GRAND RAPIDS — The pending acquisition of 13 offices from an Ann Arbor mortgage company would extend Northpointe Bancshares Inc.’s reach into new markets.
Through the deal with Home Point Financial, a subsidiary of Home Point Capital LP, the Grand Rapids-based Northpointe Bank expands to about 50 residential mortgage lending offices in 20 states. The mortgage offices it plans to acquire are primarily in Ohio, New Jersey, Pennsylvania, Rhode Island and Connecticut.
“What Northpointe’s looking for is just expanding our markets in the northeast,” said Michael Winks, the bank’s executive vice president and chief lending officer. “As the industry consolidates, Northpointe has been successful in growing its market share. This helps us do that. It helps us gain a bigger share of the market. The mortgage banking industry is very much a scalable industry, so as we grow our scale, we keep our costs under control.”
The acquisition should close by the end of October, according to Winks. Terms of the deal were undisclosed.
Founded in 1999, Northpointe has a single full-service bank office near East Beltline Avenue and I-96. The bank operates primarily as a residential mortgage lender with loan offices in 18 states.
The privately-owned Northpointe Bank originates more than $4 billion annually in residential mortgages and $9 billion in its warehouse business that lends to other independent mortgage bankers, Winks said.
As of June 30, the bank had $1.03 billion in assets — more than double that of four years earlier — and $724.2 million in deposits, according to a quarterly financial statement filed with the FDIC. Northpointe had $898.3 million in net loans, nearly 90 percent of which are for real estate.
Northpointe recorded $7.5 million in net income for the first half of 2018, and $12.7 million for all of 2017, according to FDIC filings.
The deal with Home Point Financial came together when Home Point Capital decided to divest its consumer mortgage business. Executives at Home Point Capital, a previous warehouse lending client of Northpointe Bank’s, reached out to their colleagues in Grand Rapids, who agreed to work out a deal during a time of consolidation in the mortgage industry.
“Our strategy has been to look for opportunity, and acquisition is a part of that,” Winks said. “They’ve built a terrific group over there, so it just was a natural fit.”
In seeking to sell its consumer-focused mortgage business, Home Point Financial will focus on other business lines.
“Home Point has been focused on simplifying activities to enable a greater focus on segments where we see the greatest opportunity for growth,” President and CEO Willie Newman said. “At the same time, it was important for us to find the right partnership that would provide the support and structure our retail sales teams deserve to be successful. Over the next few months, we will be working with Northpointe to ensure a smooth transfer.”
Northpointe Bank employs about 525 people, 230 of whom work in West Michigan where the company has a full-service bank at its Grand Rapids headquarters and residential mortgage lending offices in Holland and Grand Haven.