##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the quarterly period ended June 30, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 For the transition period fromto
 Commission File Number: 000-51530
 North Pointe Holdings Corporation
  Michigan
    
    38-3615047(State or Other Jurisdiction of 
Incorporation or Organization)
    
    (I.R.S. Employer
Identification No.)28819 Franklin Road, Southfield, MI
    
    48034(Address of Principal Executive Offices)
    
    (Zip Code)
 (248) 358-1171
 (Registrants Telephone Number, Including Area Code)
  þ o
  o o þ
  o þ




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##### 



NORTH POINTE HOLDINGS CORPORATION
FORM 10-Q
 TABLE OF CONTENTS
 PagePart I. Financial InformationItem 1. Financial Statements (Unaudited)
    
    
    3Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    32Item 4. Controls and Procedures
    
    
    33Part II. Other InformationItem 1. Legal Proceedings
    
    
    34Item 1A. Risk Factors
    
    
    34Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    34Item 3. Defaults Upon Senior Securities
    
    
    34Item 4. Submission of Matters to a Vote of Security Holders
    
    
    34Item 5. Other Information
    
    
    34Item 6. Exhibits
    
    
    35Amendment No.2 to the Second Amendment and Restated Credit Agreement$10,500,000 Revolving Credit Note$10,500,000 Revolving Credit Note$14,000,000 Revolving Credit NoteStock Pledge AgreementSecurity AgreementForm of GuarantyStock Purchase AgreementFirst Amendment to the Stock Purchase AgreementCertification of Chief Executive Officer purusant to Rule 13a-14(a)Certification of Chief Financial Officer pursuant to Rule 13a-14(a)Certification of Chief Executive Officer purusant to 18 U.S.C. Section 1350Certification of Chief Financial Officer purusant to 18 U.S.C. Section 1350
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 North Pointe Holdings Corporation and Subsidiaries
 Condensed Consolidated Balance Sheets
As of June 30, 2007 (Unaudited) and December 31, 2006
 2007
    
    
    2006(Dollars in thousands)ASSETSInvestmentsDebt securities, available for sale, at fair value (amortized cost
of $100,609 and $108,911 in 2007 and 2006, respectively)
    
    $
    98,340
    
    
    $
    107,334Common stocks, available for sale, at fair value (cost of $9,939 and $9,302 in 2007
and 2006, respectively)
    
    
    12,322
    
    
    
    11,376Other investments
    
    
    1,647
    
    
    
    1,088Total investments
    
    
    112,309
    
    
    
    119,798Cash and cash equivalents
    
    
    65,006
    
    
    
    46,039Accrued investment income
    
    
    1,059
    
    
    
    1,236Premiums and agents balances receivable, net
    
    
    18,403
    
    
    
    18,088Reinsurance recoverables onPaid losses
    
    
    4,417
    
    
    
    4,168Unpaid losses
    
    
    22,677
    
    
    
    33,321Prepaid reinsurance premiums
    
    
    6,135
    
    
    
    11,881Deferred policy acquisition costs
    
    
    10,202
    
    
    
    8,848Deferred federal income taxes, net
    
    
    5,450
    
    
    
    5,061Federal income taxes recoverable
    
    
    
    
    
    
    523Fixed assets, net of accumulated depreciation
    
    
    5,808
    
    
    
    5,946Prepaid expenses and other assets
    
    
    2,577
    
    
    
    2,668Total assets
    
    $
    254,043
    
    
    $
    257,577LIABILITIES AND SHAREHOLDERS EQUITYLiabilitiesUnpaid losses and loss adjustment expenses
    
    $
    77,228
    
    
    $
    89,755Unearned premiums
    
    
    53,577
    
    
    
    42,320Debt
    
    
    23,070
    
    
    
    23,131Amounts due to reinsurers
    
    
    1,656
    
    
    
    1,930Federal income taxes payable
    
    
    885
    
    
    
    Accrued expenses and other liabilities
    
    
    7,235
    
    
    
    7,236Premiums in advance
    
    
    481
    
    
    
    4,970Total liabilities
    
    
    164,132
    
    
    
    169,342Commitments and Contingent LiabilitiesShareholders equityCommon stock, no par value; 50,000,000 shares authorized; 8,928,687 and 9,122,687
issued and outstanding in 2007 and 2006, respectively
    
    
    48,842
    
    
    
    50,578Preferred stock, no par value; 5,000,000 shares authorized and 0 issued and
outstanding in 2007 and 2006
    
    
    
    
    
    
    Retained earnings
    
    
    40,994
    
    
    
    37,329Accumulated other comprehensive income:Net unrealized gains on investments, net of deferred federal income
tax expense of $39 and $169 in 2007 and 2006, respectively
    
    
    75
    
    
    
    328Total shareholders equity
    
    
    89,911
    
    
    
    88,235Total liabilities and shareholders equity
    
    $
    254,043
    
    
    $
    257,577
  3




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##### Table of Contents



North Pointe Holdings Corporation and Subsidiaries
 Unaudited Condensed Consolidated Statements of Income
For the Three Months Ended June 30, 2007 and 2006
 2007
    
    
    2006(Dollars in thousands,except share data)RevenuesDirect premiums written
    
    $
    23,140
    
    
    $
    22,182Assumed premiums written
    
    
    
    
    
    
    Gross premiums written
    
    
    23,140
    
    
    
    22,182Premiums ceded
    
    
    (3,712
    )
    
    
    (7,313
    )Net premiums written
    
    
    19,428
    
    
    
    14,869Decrease in net unearned premiums
    
    
    1,978
    
    
    
    6,347Net premiums earned
    
    
    21,406
    
    
    
    21,216Investment income, net of investment expenses
    
    
    1,832
    
    
    
    1,702Net realized capital gains
    
    
    245
    
    
    
    22Fees and other income
    
    
    717
    
    
    
    434Total revenues
    
    
    24,200
    
    
    
    23,374ExpensesLosses and loss adjustment expenses, net
    
    
    9,683
    
    
    
    10,528Policy acquisition costs
    
    
    6,064
    
    
    
    5,646Other underwriting and operating expenses
    
    
    4,647
    
    
    
    5,985Interest expense
    
    
    501
    
    
    
    462Total expenses
    
    
    20,895
    
    
    
    22,621Income before federal income tax expense
    
    
    3,305
    
    
    
    753Federal income tax expense
    
    
    982
    
    
    
    284Net income
    
    $
    2,323
    
    
    $
    469Earnings Per ShareBasic
    
    $
    0.25
    
    
    $
    0.05Diluted
    
    
    0.25
    
    
    
    0.05Weighted average number of common shares outstandingBasic
    
    
    9,110,292
    
    
    
    9,114,187Diluted
    
    
    9,115,150
    
    
    
    9,114,364
  4




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##### Table of Contents



North Pointe Holdings Corporation and Subsidiaries
 Unaudited Condensed Consolidated Statements of Income
For the Six Months Ended June 30, 2007 and 2006
 2007
    
    
    2006(Dollars in thousands,except share data)RevenuesDirect premiums written
    
    $
    61,996
    
    
    $
    67,746Assumed premiums written
    
    
    2
    
    
    
    4Gross premiums written
    
    
    61,998
    
    
    
    67,750Premiums ceded
    
    
    (5,910
    )
    
    
    (15,725
    )Net premiums written
    
    
    56,088
    
    
    
    52,025Increase in net unearned premiums
    
    
    (14,603
    )
    
    
    (10,618
    )Net premiums earned
    
    
    41,485
    
    
    
    41,407Investment income, net of investment expenses
    
    
    3,873
    
    
    
    3,000Net realized capital gains (losses)
    
    
    492
    
    
    
    (347
    )Fees and other income
    
    
    1,115
    
    
    
    887Total revenues
    
    
    46,965
    
    
    
    44,947ExpensesLosses and loss adjustment expenses, net
    
    
    19,544
    
    
    
    20,022Policy acquisition costs
    
    
    12,055
    
    
    
    11,293Other underwriting and operating expenses
    
    
    9,062
    
    
    
    9,691Interest expense
    
    
    987
    
    
    
    711Total expenses
    
    
    41,648
    
    
    
    41,717Income before federal income tax expense
    
    
    5,317
    
    
    
    3,230Federal income tax expense
    
    
    1,652
    
    
    
    1,134Net income
    
    $
    3,665
    
    
    $
    2,096Earnings Per ShareBasic
    
    $
    0.40
    
    
    $
    0.23Diluted
    
    
    0.40
    
    
    
    0.23Weighted average number of common shares outstandingBasic
    
    
    9,112,477
    
    
    
    9,114,187Diluted
    
    
    9,117,253
    
    
    
    9,114,570
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##### Table of Contents



North Pointe Holdings Corporation and Subsidiaries
 Unaudited Condensed Consolidated Statements of Shareholders Equity and Comprehensive Income (Loss)
For the Three Months Ended June 30, 2007 and 2006
 AccumulatedOtherCommon
    
    
    Retained
    
    
    ComprehensiveStock
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Total(Dollars in thousands)Balances, March 31, 2006
    
    $
    50,315
    
    
    $
    34,280
    
    
    $
    (990
    )
    
    $
    83,605Stock-based employee compensation
    
    
    83
    
    
    
    
    
    
    
    
    
    
    
    83Comprehensive incomeNet income
    
    
    
    
    
    
    469
    
    
    
    
    
    
    
    469Unrealized losses on investments, net of
deferred federal income tax benefit of $368
    
    
    
    
    
    
    
    
    
    
    (717
    )
    
    
    (717
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (248
    )Balances, June 30, 2006
    
    $
    50,398
    
    
    $
    34,749
    
    
    $
    (1,707
    )
    
    $
    83,440Balances, March 31, 2007
    
    $
    50,761
    
    
    $
    38,671
    
    
    $
    631
    
    
    $
    90,063Retirement of common stock
    
    
    (2,042
    )
    
    
    
    
    
    
    
    
    
    
    (2,042
    )Issuance of common stock
    
    
    67
    
    
    
    
    
    
    
    
    
    
    
    67Stock-based employee compensation
    
    
    56
    
    
    
    
    
    
    
    
    
    
    
    56Comprehensive incomeNet income
    
    
    
    
    
    
    2,323
    
    
    
    
    
    
    
    2,323Unrealized losses on investments, net of
deferred federal income tax benefit of $284
    
    
    
    
    
    
    
    
    
    
    (556
    )
    
    
    (556
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,767Balances, June 30, 2007
    
    $
    48,842
    
    
    $
    40,994
    
    
    $
    75
    
    
    $
    89,911
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##### Table of Contents



North Pointe Holdings Corporation and Subsidiaries
 Unaudited Condensed Consolidated Statements of Shareholders Equity and Comprehensive Income
For the Six Months Ended June 30, 2007 and 2006
 AccumulatedOtherCommon
    
    
    Retained
    
    
    ComprehensiveStock
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Total(Dollars in thousands)Balances, December 31, 2005
    
    $
    50,233
    
    
    $
    32,653
    
    
    $
    (659
    )
    
    $
    82,227Stock-based employee compensation
    
    
    165
    
    
    
    
    
    
    
    
    
    
    
    165Comprehensive incomeNet income
    
    
    
    
    
    
    2,096
    
    
    
    
    
    
    
    2,096Unrealized losses on investments, net of
deferred federal income tax benefit of $539
    
    
    
    
    
    
    
    
    
    
    (1,048
    )
    
    
    (1,048
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,048Balances, June 30, 2006
    
    $
    50,398
    
    
    $
    34,749
    
    
    $
    (1,707
    )
    
    $
    83,440Balances, December 31, 2006
    
    $
    50,578
    
    
    $
    37,329
    
    
    $
    328
    
    
    $
    88,235Retirement of common stock
    
    
    (2,042
    )
    
    
    
    
    
    
    
    
    
    
    (2,042
    )Issuance of common stock
    
    
    67
    
    
    
    
    
    
    
    
    
    
    
    67Stock-based employee compensation
    
    
    239
    
    
    
    
    
    
    
    
    
    
    
    239Comprehensive incomeNet income
    
    
    
    
    
    
    3,665
    
    
    
    
    
    
    
    3,665Unrealized losses on investments, net of
deferred federal income tax benefit of $130
    
    
    
    
    
    
    
    
    
    
    (253
    )
    
    
    (253
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,412Balances, June 30, 2007
    
    $
    48,842
    
    
    $
    40,994
    
    
    $
    75
    
    
    $
    89,911
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##### Table of Contents



North Pointe Holdings Corporation and Subsidiaries
 Unaudited Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2007 and 2006
 2007
    
    
    2006(Dollars in thousands)Cash flows from operating activitiesNet income
    
    $
    3,665
    
    
    $
    2,096Adjustments to reconcile net income to cash provided by operating activitiesDepreciation and amortization
    
    
    465
    
    
    
    401Net realized (gains) losses on sales and other dispositions of investments
    
    
    (492
    )
    
    
    347Stock compensation expense
    
    
    306
    
    
    
    165Undistributed earnings of equity method investees
    
    
    (272
    )
    
    
    Deferred federal income tax expense
    
    
    (258
    )
    
    
    290Change in assets and liabilities:Premiums and agents balances receivable, net
    
    
    (315
    )
    
    
    1,970Accrued investment income
    
    
    177
    
    
    
    (318
    )Reinsurance recoverable, net
    
    
    10,121
    
    
    
    25,120Prepaid reinsurance premiums
    
    
    5,746
    
    
    
    789Deferred policy acquisition costs
    
    
    (1,354
    )
    
    
    (1,080
    )Federal income tax recoverable
    
    
    1,408
    
    
    
    842Prepaid expenses and other assets
    
    
    79
    
    
    
    136Losses and loss adjustment expenses
    
    
    (12,527
    )
    
    
    (21,349
    )Unearned premiums
    
    
    11,257
    
    
    
    11,648Accrued expenses and other liabilities
    
    
    (1,982
    )
    
    
    (8,025
    )Premiums in advance
    
    
    (4,489
    )
    
    
    (6,562
    )Net cash provided by operating activities
    
    
    11,535
    
    
    
    6,470Cash flows from investing activitiesProceeds from maturities of debt securities
    
    
    3,680
    
    
    
    4,545Proceeds from sales of debt securities
    
    
    8,086
    
    
    
    20,133Proceeds from sales of equity securities
    
    
    2,873
    
    
    
    2,280Purchases of debt securities
    
    
    (3,719
    )
    
    
    (36,439
    )Purchases of equity securities
    
    
    (2,903
    )
    
    
    (2,415
    )Purchase of other assets
    
    
    (287
    )
    
    
    Purchases of fixed assets
    
    
    (237
    )
    
    
    (1,193
    )Capital contribution to NP Capital Trust I
    
    
    
    
    
    
    (620
    )Net cash provided by (used in) investing activities
    
    
    7,493
    
    
    
    (13,709
    )Cash flows from financing activitiesProceeds from issuance of debt (net of $690 of issuance costs paid in 2006)
    
    
    
    
    
    
    20,500Proceeds from borrowings
    
    
    464
    
    
    
    Repayments of debt
    
    
    (525
    )
    
    
    (2,983
    )Net cash (used in) provided by financing activities
    
    
    (61
    )
    
    
    17,517Increase in cash and cash equivalents
    
    
    18,967
    
    
    
    10,278Cash and cash equivalentsBeginning of period
    
    
    46,039
    
    
    
    34,119End of period
    
    $
    65,006
    
    
    $
    44,397Supplemental cash flow informationCash paid during the period for:Interest
    
    $
    960
    
    
    $
    674Federal income taxes
    
    
    500
    
    
    
    1Non-cash transactions during the period:Repurchase of common stock (see Note 4)
    
    
    2,042
    
    
    
    
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North Pointe Holdings Corporation And Subsidiaries
 Notes To Condensed Consolidated Financial Statements
 1. Basis of Financial Presentation and Principles of Consolidation
      Recent Accounting Pronouncements
 SFAS Statement No. 157, Fair Value Measurements
 Fair Value Measurements,
 SFAS Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities
 The Fair Value Option for Financial Assets and
Financial Liabilities
 9




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Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of
Statement of Financial Accounting Standard (SFAS) No. 109
  10




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2. Earnings Per Share
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(Dollars in thousands, except share data)Net income
    
    $
    2,323
    
    
    $
    469
    
    
    $
    3,665
    
    
    $
    2,096Weighted average shares outstanding
    
    
    9,120,006
    
    
    
    9,117,281
    
    
    
    9,121,339
    
    
    
    9,116,986Unvested restricted stock
    
    
    (9,714
    )
    
    
    (3,094
    )
    
    
    (8,862
    )
    
    
    (2,799
    )Weighted average shares outstanding used for Basic EPS
    
    
    9,110,292
    
    
    
    9,114,187
    
    
    
    9,112,477
    
    
    
    9,114,187Dilutive effect of restricted stock
    
    
    4,858
    
    
    
    177
    
    
    
    4,776
    
    
    
    383Weighted average shares outstanding used for Diluted EPS
    
    
    9,115,150
    
    
    
    9,114,364
    
    
    
    9,117,253
    
    
    
    9,114,570Basic earnings per share
    
    $
    0.25
    
    
    $
    0.05
    
    
    $
    0.40
    
    
    $
    0.23Diluted earnings per share
    
    $
    0.25
    
    
    $
    0.05
    
    
    $
    0.40
    
    
    $
    0.23
  3. Income Taxes
   11




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Three
Months Ended
    
    

Six
Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(Dollars in thousands)Current tax expense (benefit)
    
    $
    999
    
    
    $
    (82
    )
    
    $
    1,910
    
    
    $
    844Deferred tax expense relating to
NOL carryforwards
    
    
    
    
    
    
    
    
    
    
    326
    
    
    
    358Other deferred tax (benefit) expense
    
    
    (17
    )
    
    
    366
    
    
    
    (584
    )
    
    
    (68
    )Total federal income tax expense
    
    $
    982
    
    
    $
    284
    
    
    $
    1,652
    
    
    $
    1,134
    June 30,
    
    
    December2007
    
    
    31, 2006(Dollars in thousands)Deferred federal income tax assetsLoss and loss adjustment expenses
    
    $
    2,188
    
    
    $
    2,214Unearned premiums
    
    
    3,476
    
    
    
    2,483NOL carryforwards
    
    
    1,945
    
    
    
    2,271Premiums receivable
    
    
    289
    
    
    
    323Lease obligation
    
    
    98
    
    
    
    120Intangible asset
    
    
    289
    
    
    
    306Other
    
    
    800
    
    
    
    544Total deferred tax assets
    
    
    9,085
    
    
    
    8,261Deferred federal income tax liabilitiesDeferred policy acquisition costs
    
    
    3,469
    
    
    
    3,008Net unrealized gains on investments
    
    
    39
    
    
    
    169Other
    
    
    127
    
    
    
    23Total deferred tax liabilities
    
    
    3,635
    
    
    
    3,200Net deferred federal income tax assets
    
    $
    5,450
    
    
    $
    5,061
 4. Shareholders Equity
   12




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5. Stock-based Compensation
 Stock Options
   June 5, 2007Fair value of the underlying common stock
    
    $11.11/shareWeighted average life of options
    
    6.5 yearsRisk-free interest rate
    
    4.96%Dividend yield
    
    0.00%Weighted average volatility assumption
    
    41.10%
  Restricted Stock
  6. Outstanding Debt
 Senior Credit Facility
      
    
    adjusted capital and surplus will be in excess of 275% of authorized control level
risk-based capital as of each fiscal year end;
    
    there shall be no more than four IRIS calculations that result in unusual values at each
fiscal year end;
 13




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    the ratio of net premiums written to statutory capital and surplus will not exceed more than
4.0 to 1.0 in the case of North Pointe Casualty Insurance Company and Home Pointe Insurance
Company, 2.5 to 1.0 in the case of North Pointe Insurance Company; and 2.5 to 1.0 in the case of
Capital City Insurance Company.    the ratio of gross premiums written to statutory surplus will not exceed more than 10.0 to
1.0 in the case of North Pointe Casualty Insurance Company and Home Pointe Insurance Company, 3.0
to 1.0 in the case of North Pointe Insurance Company and 3.0 to 1.0 in the case of Capital City
Insurance Company.
   (Dollars inYear
    
    thousands)2007
    
    
    612008
    
    
    1302009
    
    
    1382010
    
    
    1462011 and thereafter
    
    
    22,595$
    23,070
 7. Contingencies
  8. Segment Reporting
  14




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##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(Dollars in thousands)Total RevenuesCommercial linesLiability
    
    $
    10,948
    
    
    $
    6,172
    
    
    $
    20,969
    
    
    $
    11,874Property
    
    
    3,050
    
    
    
    1,852
    
    
    
    5,855
    
    
    
    3,526Commercial multi-peril
    
    
    (107
    )
    
    
    6,111
    
    
    
    225
    
    
    
    11,994Commercial automobile
    
    
    1,528
    
    
    
    1,478
    
    
    
    2,951
    
    
    
    3,047Other
    
    
    1,039
    
    
    
    632
    
    
    
    1,918
    
    
    
    1,260Total commercial lines
    
    
    16,458
    
    
    
    16,245
    
    
    
    31,918
    
    
    
    31,701Personal lines-homeowners
    
    
    4,948
    
    
    
    4,971
    
    
    
    9,567
    
    
    
    9,706Administrative servicesAffiliated companies
    
    
    8,148
    
    
    
    7,494
    
    
    
    18,415
    
    
    
    19,200Non-affiliated companies
    
    
    717
    
    
    
    434
    
    
    
    1,115
    
    
    
    887Total administrative services
    
    
    8,865
    
    
    
    7,928
    
    
    
    19,530
    
    
    
    20,087Corporate and eliminationsInvestment activity
    
    
    2,077
    
    
    
    1,724
    
    
    
    4,365
    
    
    
    2,653Eliminations
    
    
    (8,148
    )
    
    
    (7,494
    )
    
    
    (18,415
    )
    
    
    (19,200
    )Total revenues
    
    $
    24,200
    
    
    $
    23,374
    
    
    $
    46,965
    
    
    $
    44,947Income (loss) before federal income tax expenseCommercial linesLiability
    
    $
    259
    
    
    $
    1,539
    
    
    $
    4,334
    
    
    $
    6,280Property
    
    
    (638
    )
    
    
    367
    
    
    
    (2,178
    )
    
    
    (576
    )Commercial multi-peril
    
    
    234
    
    
    
    (1,752
    )
    
    
    (3,488
    )
    
    
    (3,104
    )Commercial automobile
    
    
    (1,265
    )
    
    
    (278
    )
    
    
    (1,844
    )
    
    
    (793
    )Other
    
    
    101
    
    
    
    43
    
    
    
    (325
    )
    
    
    (250
    )Total commercial lines
    
    
    (1,309
    )
    
    
    (81
    )
    
    
    (3,501
    )
    
    
    1,557Personal linesPersonal automobile
    
    
    (13
    )
    
    
    (935
    )
    
    
    (94
    )
    
    
    (2,198
    )Homeowners
    
    
    2,262
    
    
    
    (116
    )
    
    
    3,018
    
    
    
    (1,506
    )Total personal lines
    
    
    2,249
    
    
    
    (1,051
    )
    
    
    2,924
    
    
    
    (3,704
    )Administrative services
    
    
    1,344
    
    
    
    1,308
    
    
    
    3,560
    
    
    
    4,138Corporate and eliminationsInvestment activity
    
    
    2,077
    
    
    
    1,724
    
    
    
    4,365
    
    
    
    2,653Other expense, net
    
    
    (1,056
    )
    
    
    (1,147
    )
    
    
    (2,031
    )
    
    
    (1,414
    )Income before federal income tax expense
    
    $
    3,305
    
    
    $
    753
    
    
    $
    5,317
    
    
    $
    3,230
 15




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##### Table of Contents



9. Subsequent Event
 Capital City Holding Company, Inc
   16




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 The discussion and analysis of our financial condition and results of operations contained
herein should be read in conjunction with our consolidated financial statements and accompanying
notes which appear elsewhere in this report. It contains forward-looking statements that involve
risks and uncertainties. Please see Note on Forward-Looking Statements for more information. Our
actual results could differ materially from those anticipated in these forward-looking statements
as a result of various factors, including those discussed below and elsewhere in this report.
 Note on Forward-Looking Statements
  §
    
    the availability and pricing of reinsurance and the potential for non-payment or delay in payment by reinsurers;§
    
    our ability to accurately price the risks we underwrite;§
    
    the establishment of adequate loss and loss adjustment expense reserves;§
    
    our ability to successfully integrate our acquisition of the Capital City entities;§
    
    possible assessments for guaranty funds, other insurance-related assessments and
mandatory reinsurance arrangements and our ability to recover such assessments through
future surcharges or other rate changes;§
    
    retention and recruiting of independent agents and the potential loss of key personnel;§
    
    failure to pay claims accurately;§
    
    risks associated with high concentration of our business in certain geographic markets;§
    
    inability to implement our growth strategies;§
    
    the occurrence of severe weather conditions and other catastrophes;§
    
    the cyclical and seasonal nature of the industries within which we operate;§
    
    intense competition with other insurance companies;§
    
    our ability to obtain and retain trade association endorsements;§
    
    performance of our various operating subsidiaries and restrictions that may limit the
ability of our subsidiaries to pay dividends to North Pointe Holdings;§
    
    existing and future regulations by local, state, and federal governments;§
    
    the compliance of our insurance company subsidiaries with minimum capital and surplus requirements;§
    
    ratings of our insurance company subsidiaries by A.M. Best;§
    
    the outcome of current industry investigations and potential regulation limiting the use
of undisclosed contingent commission arrangements with independent agents;§
    
    adverse market conditions that could negatively impact our investment portfolio;
 17




---



##### Table of Contents



§
    
    reliance on information technology and telecommunication systems;§
    
    our limited history writing homeowners insurance policies in Florida;§
    
    changes in insurance-related laws and regulations;§
    
    our ability to implement and maintain adequate internal controls in our business;§
    
    other risks that we identify in past and future filings with the Securities and Exchange
Commission, including without limitation the risks described under the caption Risk
Factors in the Prospectus constituting part of our Registration Statement on Form S-1 (Reg.
No. 333-122220) and any past or subsequent filings on Forms 10-K, 10-Q and 8-K.
  Description of Business
   Critical Accounting Estimates
  18




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##### Table of Contents



Results of Operations for the Three and Six Months Ended June 30, 2007 and 2006
 Results of Operations
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(Dollars in thousands)Gross premiums written:Commercial lines
    
    $
    20,212
    
    
    $
    18,559
    
    
    $
    39,479
    
    
    $
    39,550Personal lines
    
    
    2,928
    
    
    
    3,623
    
    
    
    22,519
    
    
    
    28,200Total gross premiums written
    
    
    23,140
    
    
    
    22,182
    
    
    
    61,998
    
    
    
    67,750Net premiums written:Commercial lines
    
    
    18,268
    
    
    
    14,212
    
    
    
    37,538
    
    
    
    29,887Personal lines
    
    
    1,160
    
    
    
    657
    
    
    
    18,550
    
    
    
    22,138Total net premiums written
    
    
    19,428
    
    
    
    14,869
    
    
    
    56,088
    
    
    
    52,025Revenues:Net premiums earned:Commercial lines
    
    
    16,458
    
    
    
    16,245
    
    
    
    31,918
    
    
    
    31,701Personal lines
    
    
    4,948
    
    
    
    4,971
    
    
    
    9,567
    
    
    
    9,706Total net premiums earned
    
    
    21,406
    
    
    
    21,216
    
    
    
    41,485
    
    
    
    41,407Investment income, net
    
    
    1,832
    
    
    
    1,702
    
    
    
    3,873
    
    
    
    3,000Net realized capital gains (losses)
    
    
    245
    
    
    
    22
    
    
    
    492
    
    
    
    (347
    )Other income
    
    
    717
    
    
    
    434
    
    
    
    1,115
    
    
    
    887Total revenues
    
    
    24,200
    
    
    
    23,374
    
    
    
    46,965
    
    
    
    44,947Expenses:Losses and loss adjustment expenses, net
    
    
    9,683
    
    
    
    10,528
    
    
    
    19,544
    
    
    
    20,022Policy acquisition costs
    
    
    6,064
    
    
    
    5,646
    
    
    
    12,055
    
    
    
    11,293Other underwriting and operating expenses
    
    
    4,647
    
    
    
    5,985
    
    
    
    9,062
    
    
    
    9,691Interest expense
    
    
    501
    
    
    
    462
    
    
    
    987
    
    
    
    711Total expenses
    
    
    20,895
    
    
    
    22,621
    
    
    
    41,648
    
    
    
    41,717Income before federal income tax expense
    
    
    3,305
    
    
    
    753
    
    
    
    5,317
    
    
    
    3,230Federal income tax expense
    
    
    982
    
    
    
    284
    
    
    
    1,652
    
    
    
    1,134Net income
    
    $
    2,323
    
    
    $
    469
    
    
    $
    3,665
    
    
    $
    2,096Loss ratio:Commercial lines
    
    
    54.4
    %
    
    
    50.4
    %
    
    
    56.2
    %
    
    
    42.3
    %Personal lines
    
    
    14.9
    %
    
    
    47.0
    %
    
    
    16.9
    %
    
    
    68.0
    %Aggregate
    
    
    43.8
    %
    
    
    48.6
    %
    
    
    45.9
    %
    
    
    47.3
    %Expense ratio
    
    
    48.4
    %
    
    
    53.7
    %
    
    
    49.6
    %
    
    
    49.6
    %Combined ratio
    
    
    92.2
    %
    
    
    102.3
    %
    
    
    95.5
    %
    
    
    96.9
    %
 19




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##### Table of Contents



Overview
  Gross Premiums Written
  Three Months Ended June 30, 2007 as Compared to Three Months Ended June 30, 2006.
   Six Months Ended June 30, 2007 as Compared to Six Months Ended June 30, 2006.
  Net Premiums Written
  20




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##### Table of Contents



Three Months Ended June 30, 2007 as Compared to Three Months Ended June 30, 2006.
 Six Months Ended June 30, 2007 as Compared to Six Months Ended June 30, 2006.
 Net Premiums Earned
  Three Months Ended June 30, 2007 as Compared to Three Months Ended June 30, 2006.
 Six Months Ended June 30, 2007 as Compared to Six Months Ended June 30, 2006.
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(Dollars in thousands)Gross premiums earned:Commercial lines
    
    $
    18,681
    
    
    $
    20,656
    
    
    $
    36,985
    
    
    $
    40,374Personal lines
    
    
    6,727
    
    
    
    7,918
    
    
    
    13,757
    
    
    
    15,728Total
    
    
    25,408
    
    
    
    28,574
    
    
    
    50,742
    
    
    
    56,102Ceded premiums earned:Commercial lines
    
    
    2,223
    
    
    
    4,411
    
    
    
    5,067
    
    
    
    8,673Personal lines
    
    
    1,779
    
    
    
    2,947
    
    
    
    4,190
    
    
    
    6,022Total
    
    
    4,002
    
    
    
    7,358
    
    
    
    9,257
    
    
    
    14,695Net premiums earned:Commercial lines
    
    
    16,458
    
    
    
    16,245
    
    
    
    31,918
    
    
    
    31,701Personal lines
    
    
    4,948
    
    
    
    4,971
    
    
    
    9,567
    
    
    
    9,706Total
    
    $
    21,406
    
    
    $
    21,216
    
    
    $
    41,485
    
    
    $
    41,407
 21




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##### Table of Contents



Net Investment Income
  Three Months Ended June 30, 2007 as Compared to Three Months Ended June 30, 2006.
 Six Months Ended June 30, 2007 as Compared to Six Months Ended June 30, 2006.
  Net Realized Gains and Losses on Investments
 Three Months Ended June 30, 2007 as Compared to Three Months Ended June 30, 2006.
 Six Months Ended June 30, 2007 as Compared to Six Months Ended June 30, 2006.
 Other Income
  Three Months Ended June 30, 2007 as Compared to Three Months Ended June 30, 2006.
 Six Months Ended June 30, 2007 as Compared to Six Months Ended June 30, 2006.
 22




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##### Table of Contents



Losses and Loss Adjustment Expenses
  Three Months Ended June 30, 2007 as Compared to Three Months Ended June 30, 2006.
   Six Months Ended June 30, 2007 as Compared to Six Months Ended June 30, 2006.
  All Lines
    
    2007
    
    
    2006Loss ratios before effects of reserve development
    
    
    50.1
    %
    
    
    50.8
    %Decrease in loss ratios attributable to reserve development
    
    
    (4.2
    )
    
    
    (3.5
    )Total lines loss ratios
    
    
    45.9
    %
    
    
    47.3
    %
   23




---



##### Table of Contents



Commercial Lines
    
    2007
    
    
    2006Loss ratios before effects of reserve
development
    
    
    58.2
    %
    
    
    51.6
    %Decrease in loss ratios attributable to reserve
development
    
    
    (2.0
    )
    
    
    (9.3
    )Total
commercial lines loss ratios
    
    
    56.2
    %
    
    
    42.3
    %
     Personal Lines
    
    2007
    
    
    2006Loss ratios before effects of reserve
development
    
    
    28.8
    %
    
    
    52.9
    %(Decrease) increase in loss ratios attributable to
reserve development
    
    
    (11.9
    )
    
    
    15.1
    %Total personal lines loss
ratios
    
    
    16.9
    %
    
    
    68.0
    %
 Policy Acquisition Costs
  Three Months Ended June 30, 2007 as Compared to Three Months Ended June 30, 2006.
 Six Months Ended June 30, 2007 as Compared to Six Months Ended June 30, 2006.
 Other Underwriting and Operating Expenses
  24




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##### Table of Contents



Three Months Ended June 30, 2007 as Compared to Three Months Ended June 30, 2006.
 Six Months Ended June 30, 2007 as Compared to Six Months Ended June 30, 2006.
 Interest Expense
 Three Months Ended June 30, 2007 as Compared to Three Months Ended June 30, 2006.
 Six Months Ended June 30, 2007 as Compared to Six Months Ended June 30, 2006.
 Federal Income Tax Expense
 Three Months Ended June 30, 2007 as Compared to Three Months Ended June 30, 2006.
 Six Months Ended June 30, 2007 as Compared to Six Months Ended June 30, 2006.
 Liquidity and Capital Resources
 Sources and Uses of Funds
    25




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##### Table of Contents



Cash Flows
     Contractual Obligations and Commitments
  Investments
   26




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##### Table of Contents



As of June 30, 2007
    
    
    As of December 31, 2006Percent of
    
    
    
    
    
    
    Percent ofAmount
    
    
    portfolio
    
    
    Amount
    
    
    portfolio(Dollars in thousands)Fixed Income:U.S. governmental and agency securities
    
    $
    24,995
    
    
    
    14.1
    %
    
    $
    30,526
    
    
    
    18.4
    %Foreign governmental
    
    
    297
    
    
    
    0.2
    %
    
    
    300
    
    
    
    0.1
    %Corporate securities
    
    
    27,363
    
    
    
    15.4
    %
    
    
    29,421
    
    
    
    17.7
    %Municipal securities
    
    
    6,877
    
    
    
    3.9
    %
    
    
    7,035
    
    
    
    4.2
    %Mortgage-backed securities
    
    
    30,601
    
    
    
    17.3
    %
    
    
    32,360
    
    
    
    19.5
    %Asset-backed
    
    
    8,207
    
    
    
    4.6
    %
    
    
    7,692
    
    
    
    4.7
    %Total fixed-income
    
    
    98,340
    
    
    
    55.5
    %
    
    
    107,334
    
    
    
    64.6
    %Cash, cash equivalents and restricted cash
    
    
    65,006
    
    
    
    36.7
    %
    
    
    46,039
    
    
    
    27.8
    %Equity securities  common shares
    
    
    12,322
    
    
    
    6.9
    %
    
    
    11,376
    
    
    
    6.9
    %Other investments
    
    
    1,647
    
    
    
    0.9
    %
    
    
    1,088
    
    
    
    0.7
    %Total
    
    $
    177,315
    
    
    
    100.0
    %
    
    $
    165,837
    
    
    
    100.0
    %
   As of June 30, 2007Less than 12 months
    
    
    12 months or More
    
    
    TotalGros
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedFair Value
    
    
    Loss
    
    
    Fair Value
    
    
    Loss
    
    
    Fair Value
    
    
    Loss(Dollars in thousands)U.S. governmental and agency
securities
    
    $
    7,379
    
    
    $
    50
    
    
    $
    10,351
    
    
    $
    191
    
    
    $
    17,730
    
    
    $
    241Foreign governmental
    
    
    
    
    
    
    
    
    
    
    297
    
    
    
    8
    
    
    
    297
    
    
    
    8Corporate securities
    
    
    5,304
    
    
    
    97
    
    
    
    20,553
    
    
    
    792
    
    
    
    25,857
    
    
    
    889Municipal securities
    
    
    6,877
    
    
    
    92
    
    
    
    
    
    
    
    
    
    
    
    6,877
    
    
    
    92Mortgage-backed securities
    
    
    2,576
    
    
    
    31
    
    
    
    24,276
    
    
    
    1,008
    
    
    
    26,852
    
    
    
    1,039Asset-backed
    
    
    2,504
    
    
    
    10
    
    
    
    3,906
    
    
    
    77
    
    
    
    6,410
    
    
    
    87Total debt securities
    
    $
    24,640
    
    
    $
    280
    
    
    $
    59,383
    
    
    $
    2,076
    
    
    $
    84,023
    
    
    $
    2,356Equity securities
    
    $
    1,333
    
    
    $
    69
    
    
    $
    42
    
    
    $
    3
    
    
    $
    1,375
    
    
    $
    72
 27




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##### Table of Contents



Unpaid Losses and Loss Adjustment Expenses
      Net Reserves at June 30, 2007
    
    Total NetPersonal
    
    Commercial
    
    
    
    
    
    Reserves atLines
    
    Lines
    
    
    
    
    
    December 31,Segment
    
    Segment
    
    Total
    
    2006(Dollars in thousands)High end of range
    
    $
    3,614
    
    
    $
    55,224
    
    
    $
    58,838
    
    
    $
    60,715Carried reserves
    
    
    3,486
    
    
    
    51,065
    
    
    
    54,551
    
    
    
    56,434Low end of range
    
    
    3,381
    
    
    
    48,456
    
    
    
    51,837
    
    
    
    53,672
 28




---



##### Table of Contents



June 30,
    
    
    December 31,2007
    
    
    2006(Dollars in thousands)Case:Commercial lines productsLiability
    
    $
    12,343
    
    
    $
    12,061Property
    
    
    5,744
    
    
    
    9,643Commercial multi-peril
    
    
    11,766
    
    
    
    14,483Commercial automobile
    
    
    3,737
    
    
    
    3,705Other
    
    
    1,215
    
    
    
    1,063Total commercial lines
    
    
    34,805
    
    
    
    40,955Personal lines productsPersonal automobile
    
    
    3,995
    
    
    
    4,758Homeowners
    
    
    2,106
    
    
    
    2,713Total personal lines
    
    
    6,101
    
    
    
    7,471Total case reserves
    
    $
    40,906
    
    
    $
    48,426IBNR:Commercial lines productsLiability
    
    $
    18,624
    
    
    $
    12,042Property
    
    
    841
    
    
    
    786Commercial multi-peril
    
    
    9,050
    
    
    
    18,628Commercial automobile
    
    
    3,117
    
    
    
    2,851Other
    
    
    977
    
    
    
    511Total commercial lines
    
    
    32,609
    
    
    
    34,818Personal lines productsPersonal automobile
    
    
    3,046
    
    
    
    4,015Homeowners
    
    
    667
    
    
    
    2,496Total personal lines
    
    
    3,713
    
    
    
    6,511Total IBNR reserves
    
    $
    36,322
    
    
    $
    41,329Total:Commercial lines productsLiability
    
    $
    30,967
    
    
    $
    24,103Property
    
    
    6,585
    
    
    
    10,429Commercial multi-peril
    
    
    20,816
    
    
    
    33,111Commercial automobile
    
    
    6,854
    
    
    
    6,556Other
    
    
    2,192
    
    
    
    1,574Total commercial lines
    
    
    67,414
    
    
    
    75,773Personal lines productsPersonal automobile
    
    
    7,041
    
    
    
    8,773Homeowners
    
    
    2,773
    
    
    
    5,209Total personal lines
    
    
    9,814
    
    
    
    13,982Total gross reserves
    
    $
    77,228
    
    
    $
    89,755
   29




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##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(Dollars in thousands)Gross reserves,
beginning of
period
    
    $
    83,758
    
    
    $
    107,809
    
    
    $
    89,755
    
    
    $
    117,778Less reinsurance
recoverables,
excluding Citizens
assessment (1)
    
    
    27,337
    
    
    
    49,898
    
    
    
    33,321
    
    
    
    60,034Net
balance
    
    
    56,421
    
    
    
    57,911
    
    
    
    56,434
    
    
    
    57,744Incurred related toCurrent
year
    
    
    10,073
    
    
    
    9,681
    
    
    
    21,314
    
    
    
    21,518Prior
years
    
    
    (390
    )
    
    
    847
    
    
    
    (1,770
    )
    
    
    (1,496
    )Total
incurred
    
    
    9,683
    
    
    
    10,528
    
    
    
    19,544
    
    
    
    20,022Paid related toCurrent
year
    
    
    4,815
    
    
    
    3,951
    
    
    
    6,700
    
    
    
    6,087Prior
years
    
    
    6,738
    
    
    
    5,069
    
    
    
    14,727
    
    
    
    12,260Total
paid
    
    
    11,553
    
    
    
    9,020
    
    
    
    21,427
    
    
    
    18,347Net balance, end of
period
    
    
    54,551
    
    
    
    59,419
    
    
    
    54,551
    
    
    
    59,419Plus reinsurance
recoverables,
excluding Citizens
assessment (1)
    
    
    22,677
    
    
    
    37,010
    
    
    
    22,677
    
    
    
    37,010Gross reserves, end
of
period
    
    $
    77,228
    
    
    $
    96,429
    
    
    $
    77,228
    
    
    $
    96,429
 
 (1)
    
    For the purpose of comparability at June 30, 2006, the Citizens assessment of $671,000 is
excluded from the reinsurance recoverable amounts in the above summary. Reinsurance
     30




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Contingencies
  31




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  Interest Rate Risk
   Hypothetical PercentageEstimated
    
    Increase (Decrease) inHypothetical Change in Interest Rates
    
    Estimated
    
    Change in
    
    
    
    
    
    ShareholdersAs of June 30, 2007
    
    Fair Value
    
    Fair Value
    
    Fair Value
    
    Equity(Dollars in thousands)200 basis point
increase
    
    $
    91,219
    
    
    $
    (7,121
    )
    
    
    (7.2)
    %
    
    
    (1.9)
    %100 basis point increase
    
    
    94,763
    
    
    
    (3,577
    )
    
    
    (3.6
    )
    
    
    (0.9
    )No Change
    
    
    98,340
    
    
    
    
    
    
    
    
    
    
    
    100 basis point decrease
    
    
    101,830
    
    
    
    3,490
    
    
    
    3.5
    
    
    
    0.9200 basis point decrease
    
    
    105,029
    
    
    
    6,689
    
    
    
    6.8
    
    
    
    1.7
 Credit Risk
    Effects of Inflation
  32




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##### Table of Contents



Item 4. Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Controls over Financial Reporting
  33




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  Name
    
    Votes For
    

Votes WithheldB. Matthew Petcoff
    
    
    8,787,019
    
    
    
    96,440Dr. Joon S. Moon
    
    
    8,787,519
    
    
    
    95,940Joseph D. Sarafa
    
    
    8,883,459
    
    
    
    
    Votes For
    
    
    8,802,191Votes Against
    
    
    79,600Abstentions
    
    
    1,668Total
    
    
    8,883,459
 
 Item 5. Other Information.
  34




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##### Table of Contents



Item 6. Exhibits.
 ExhibitNumber
    
    Exhibit4.1
    
    Amendment No. 2 to the Second Amendment and Restated Credit Agreement, dated as of July 2, 2007, by and among
the lenders, Comerica Bank, as agent, and North Pointe Holdings Corporation.4.2
    
    $10,500,000 Revolving Credit Note, dated as of July 2, 2007, made by North Pointe Holdings Corporation in
favor of Fifth Third Bank.4.3
    
    $10,500,000 Revolving Credit Note, dated July 2, 2007, made by North Pointe Holdings Corporation in favor of
JPMorgan Chase Bank, N.A.4.4
    
    $14,000,000 Revolving Credit Note, dated July 2, 2007, made by North Pointe Holdings Corporation in favor of
Comerica Bank.4.5
    
    Stock Pledge Agreement, dated July 2, 2007, by and among Capital City Acquisition Corp. and Comerica Bank, as
agent.4.6
    
    Security Agreement, dated July 2, 2007, by and among Capital City Acquisition Corp., Capital Collection
Services, Inc., Capital City Holding Company, Inc., Davis-Garvin Holdings, Inc., Capital Excess & Surplus
Brokers, Inc., Southeastern Claims Services, Inc., Safeco Products, Inc., and Charter Premium Audits, Inc.
and Comerica Bank, as agent.4.7
    
    Form of Guaranty.10.1
    
    Stock Purchase Agreement by and among Hinton G. Davis, HGD Investment LP, First Venture Holdings, L.L.C.,
Mary Teresa Davis Tanner, Hinton G. Davis III Grantor Trust, Susan Cheri Davis McMillan, Capital City
Acquisition Corp., and North Pointe Holdings Corporation Relating to the Purchase and Sale of 100% of the
Capital Stock of Capital City Holding Company, Inc., Davis-Garvin Holdings, Inc., Capital Excess & Surplus
Brokers, Inc., Southeastern Claims Services, Inc., Safeco Products, Inc., and Charter Premium Audits, Inc.
Dated as of May 11, 2007.10.2
    
    First Amendment to the Stock Purchase Agreement by and among Hinton G. Davis, HGD Investment LP, First
Venture Holdings, L.L.C., Mary Teresa Davis Tanner, Hinton G. Davis III Grantor Trust, Susan Cheri Davis
McMillan, Capital City Acquisition Corp., and North Pointe Holdings Corporation Relating to the Purchase and
Sale of 100% of the Capital Stock of Capital City Holding Company, Inc., Davis-Garvin Holdings, Inc., Capital
Excess & Surplus Brokers, Inc., Southeastern Claims Services, Inc., Safeco Products, Inc., and Charter
Premium Audits, Inc. Dated as of July 2, 2007.31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.32.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 and Rule 13a-14(b) under the
Securities Exchange Act of 1934.32.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C Section 1350 and Rule 13a-14(b) under the
Securities Exchange Act of 1934.
 35




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##### Table of Contents



NORTH POINTE HOLDINGS CORPORATIONDate: August 10, 2007
    By:
    /s/ James G. PetcoffJames G. PetcoffChief Executive Officer, President & Chairman
of the BoardDate: August 10, 2007
    By:
    /s/ Brian J. RoneyBrian J. RoneyChief Financial Officer & Vice President  Finance (Principal
Accounting Officer) 36