Yes with the following caveats:
1. If you make reservation by phone, it should happen, but to be safe make sure you verify by checking points used afterward online. Also, when doing by phone, it does not hurt to mention when reserving that you want banked points used first.
2. If you do the reservation online, it will also take banked points first but be careful if you have more than one contract, e.g., an initial purchase and then some add-ons. The online system lets you choose which contracts and order of contracts in which points are taken for the reservation. Don't make the mistake of not listing your contract that has banked points for use in the reservation.