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HarborOne Bancorp, Inc. Announces 2022 Second Quarter Earnings

HarborOne Bancorp, Inc. (the “Company” or “HarborOne”) (NASDAQ: HONE), the holding company for HarborOne Bank (the “Bank”), announced net income of $10.0 million, or $0.21 per basic and diluted share, for the second quarter of 2022, compared to net income of $12.3 million, or $0.25 per diluted share, for the preceding quarter and $14.3 million, or $0.27 per diluted share, for the same period last year.

Selected Second Quarter Financial Highlights:

  • Return on average assets was 0.87%, and return on average equity was 6.22%.
  • Loan growth of $174.6 million, or 4.7%.
  • Core deposit growth of $96.3 million, or 3.0%.
  • Net interest margin increased 27 basis points to 3.48%.
  • Continued share repurchase program.

“HarborOne had a solid quarter of growth in loans, deposits, and margin, with a continued focus on strong credit quality in the first half of the year,” said Joseph Casey, President and CEO. He added: “While mortgage banking saw a significant decline in origination volume and gain on sale margin, our mortgage banking team has identified over $1.0 million in expense savings to commence during the third quarter.”

Net Interest Income

The Company’s net interest and dividend income was $37.2 million for the quarter ended June 30, 2022, up $3.9 million, or 11.8%, from $33.3 million for the quarter ended March 31, 2022, and up $4.7 million, or 14.3%, from $32.5 million for the quarter ended June 30, 2021. The tax equivalent interest rate spread and net interest margin were 3.38% and 3.48%, respectively, for the quarter ended June 30, 2022, compared to 3.12% and 3.21%, respectively, for the quarter ended March 31, 2022, and 2.93% and 3.06%, respectively, for the quarter ended June 30, 2021. On a linked-quarter basis, the increase in net interest and dividend income primarily reflects increased yields on loans and investments primarily due to rate increases and prepayment penalties on commercial loan payoffs, partially offset by decreases in fees recognized in connection with U.S. Small Business Administration Paycheck Protection Program (“PPP”) loans and higher rates on deposits. The cost of funds was 27 basis points for the quarter ended June 30, 2022, compared to 25 basis points in the preceding quarter.

The $4.3 million increase in total interest and dividend income on a linked-quarter basis reflected a 30 basis-point increase in the yield on interest-earning assets. The yield on loans increased 21 basis points, from 3.75% to 3.96%. Interest on loans in the second quarter included $1.1 million in prepayment penalties on commercial loans and $353,000 in accretion income from the fair value discount on loans acquired in connection with the merger with Coastway Bancorp, Inc. Prepayment penalties and accretion income in the preceding quarter were $305,000 and $284,000, respectively. The three months ended June 30, 2022 and March 31, 2022 include the recognition of deferred fees on PPP loans in the amount of $368,000 and $487,000, respectively. The yield on investments increased 17 basis points, from, 1.75% to 1.92%.

The increase in net interest and dividend income from the prior year quarter reflects an increase of $4.0 million, or 11.1%, in total interest and dividend income and a decrease of $695,000, or 20.7%, in total interest expense. The changes reflect rate and volume changes in both interest-bearing assets and liabilities. The yield on interest-earning assets increased 35 basis points, while the average balance increased $29.1 million, and the cost of interest-bearing liabilities decreased 11 basis points, while the average balance increased $92.9 million.

Noninterest Income

Total noninterest income decreased $5.0 million, or 26.0%, to $14.1 million for the quarter ended June 30, 2022, from $19.1 million for the quarter ended March 31, 2022. Mortgage loan closings for the quarter ended June 30, 2022 were $297.5 million with a gain on loan sales of $4.5 million, compared to $253.8 million in mortgage closings and $5.3 million in gain on sales for the preceding quarter. The locked residential mortgage pipeline continues to be negatively impacted by decreased mortgage volumes due to rising rates and low for-sale inventory.

The change in the fair value of mortgage servicing rights positively impacted mortgage banking income, however the increase in the fair value of mortgage servicing rights for the three months ended June 30, 2022 was $1.6 million, as compared to an increase of $6.1 million in the fair value of mortgage servicing rights for the three months ended March 31, 2022. The 10-year Treasury Constant Maturity rate increased 66 basis points versus the first quarter of 2022, and prepayments were consistent with the first quarter of 2022. The change in the fair value of the mortgage servicing rights is generally consistent with the change in the 10-year Treasury Constant Maturity rate. As interest rates rise and prepayment speeds slow, mortgage servicing rights values tend to increase; conversely, as interest rates fall and prepayment speeds quicken, mortgage servicing rights values tend to decrease.

Deposit account fees increased $420,000, or 9.4%, to $4.9 million for the quarter ended June 30, 2022, from $4.5 million for the quarter ended March 31, 2022, primarily due to an increase in interchange fees. Other income for the quarter ended June 30, 2022 decreased $241,000. The first quarter of 2022 included a positive credit valuation adjustment of $239,000 on the termination of an interest rate swap and a $189,000 corporate capital distribution from the National Credit Union Association partially offset by a write-down on the final disposition of a branch real estate asset held for sale. No similar transactions were recorded in other income during the second quarter of 2022.

Total noninterest income decreased $7.6 million, or 35.0%, as compared to the quarter ended June 30, 2021, primarily due to a $7.8 million, or 49.2%, decrease in mortgage banking income, driven by the decrease in loan closings and narrowing gain-on-sale margins. The decrease in mortgage banking income was offset by a $346,000 increase in deposit account fees.

Noninterest Expense

Total noninterest expenses were $35.0 million for the quarter ended June 30, 2022, an increase of $119,000, or 0.3%, from the quarter ended March 31, 2022. Compensation and benefits increased $732,000, or 3.5%, and other expenses increased $401,000, or 14.0%, partially offset by an $853,000 decrease in occupancy and equipment expenses. The increase in compensation expense reflects a $924,000 increase in salary expense due to annual salary increases effective at the end of the first quarter and $439,000 in expense related to the benefit accruals and equity award acceleration in connection with the retirement of the Company’s former CEO James W. Blake, partially offset by a decrease in payroll tax expenses. The increase in other expenses reflects increases in cloud computing and employment agency fees. The decrease in occupancy and equipment expense reflects decreases in expenses for utilities, seasonal landscaping, and service maintenance contracts.

Total noninterest expenses decreased $3.6 million, or 9.4%, from the quarter ended June 30, 2021. Compensation and benefits decreased $3.7 million and loan expenses decreased $865,000, consistent with the decrease in residential mortgage loan closings and corresponding decrease in mortgage origination commissions.

Income Tax Provision

The effective tax rate was 27.6% for the quarter ended June 30, 2022, compared to 28.5% for the quarter ended March 31, 2022 and 28.3% for the quarter ended June 30, 2021.

Asset Quality and Allowance for Credit Losses

Effective January 1, 2022, the Company adopted Accounting Standards Update No. 2016-13, commonly referred to as CECL, which requires the measurement of expected lifetime credit losses for financial assets measured at amortized cost, as well as unfunded commitments that are considered off-balance sheet credit exposures. CECL requires that the allowance for credit losses (“ACL”) be calculated based on current expected credit losses over the full remaining expected life of the financial assets and also consider expected future changes in macroeconomic conditions. Upon adoption of CECL on January 1, 2022, the Company’s ACL on loans decreased by $1.3 million, and the ACL on unfunded commitments increased by $3.9 million, for a net increase of $2.6 million. The after-tax impact of $1.9 million was recognized as a one-time, cumulative-effect adjustment that decreased retained earnings.

Credit quality performance has remained strong with total nonperforming assets of $24.4 million at June 30, 2022, compared to $26.1 million at March 31, 2022 and $32.7 million at June 30, 2021. Nonperforming assets as a percentage of total assets were 0.52% at June 30, 2022, 0.57% at March 31, 2022, and 0.71% at June 30, 2021.

The funded loan provision for credit losses for the three and six months ended June 30, 2022 was $1.3 million and $1.7 million, respectively. Net recoveries totaled $504,000, or 0.05% of average loans outstanding on an annualized basis, for the quarter ended June 30, 2022. Net charge-offs totaled $2.7 million, or 0.30% of average loans outstanding on an annualized basis, for the quarter ended March 31, 2022, and net recoveries totaled $175,000, or 0.02% of average loans outstanding on an annualized basis, for the quarter ended June 30, 2021.

The ACL was $43.6 million, or 1.11% of total loans, at June 30, 2022, compared to $41.8 million, or 1.12% of total loans, at March 31, 2022 and an allowance for loss under the incurred loss model of $51.3 million, or 1.50% of total loans, at June 30, 2021. The ACL on unfunded commitments, included in other liabilities on the unaudited Consolidated Balance Sheets, amounted to $5.1 million at June 30, 2022 as compared to $3.8 million at March 31, 2022 and the associated provision was $1.3 million and $1.2 million for the three and six months ended June 30, 2022. There was no ACL on unfunded commitments at December 31, 2021 or June 30, 2021. The increase from the prior quarter reflects $125.2 million in new construction originations in the second quarter, with $98.1 million in unfunded balances as of June 30, 2022.

We have not experienced any significant negative trends in the at-risk sectors identified in response to conditions that developed during the COVID-19 pandemic; however management continues to monitor certain credit types within those sectors that may be susceptible to increased credit risk as a result of trends that were precipitated by the COVID-19 pandemic and may be exacerbated by current economic conditions. Management is focused on business-oriented hotels, non-anchored retail space and metro office space. As of June 30, 2022, business-oriented hotels included 14 loans with a total outstanding balance of $123.3 million, non-anchored retail space included 35 loans with a total outstanding balance of $58.8 million and metro office space included 2 loans with a total outstanding balance of $14.9 million. As of June 30, 2022 there were two business-oriented hotel credits with a carrying value of $10.6 million that were on nonaccrual. The other loans in these groups were performing in accordance with their terms.

Balance Sheet

Total assets increased $112.7 million, or 2.5%, to $4.70 billion at June 30, 2022, from $4.59 billion at March 31, 2022. The increase primarily reflects an increase of $174.6 million in loans, partially offset by decreases of $55.4 million in cash and cash equivalents and $27.1 million in securities available for sale. Securities available for sale were negatively impacted by unrealized losses of $49.9 million as of June 30, 2022 and $30.0 million as March 31, 2022, as compared to $3.6 million of unrealized losses as of December 31, 2021.

Loans increased $174.6 million, or 4.7%, to $3.91 billion at June 30, 2022, from $3.74 billion at March 31, 2022. The increase in loans for the three months ended June 30, 2022 was primarily due to an increase in residential real estate loans of $170.2 million and an increase in commercial real estate loans of $31.1 million, partially offset by a decrease in consumer loans of $27.8 million. As of June 30, 2022, outstanding PPP loans amounted to $2.5 million, and there was $93,000 in deferred processing fee income. We expect to complete the forgiveness process for the remaining PPP loans by the end of the third quarter of 2022.

Total deposits were $3.85 billion at June 30, 2022 and $3.76 billion at March 31, 2022. Compared to the prior quarter, non-certificate accounts increased $96.3 million, and term certificate accounts decreased $10.4 million. FHLB borrowings increased $50.0 million to $105.7 million at June 30, 2022 from $55.7 million at March 31, 2022. At June 30, 2022, FHLB borrowings are were primarily short-term borrowings.

Total stockholders’ equity was $624.5 million at June 30, 2022, compared to $649.1 million at March 31, 2022 and $705.5 million at June 30, 2021. Stockholders’ equity decreased 3.8% when compared to the prior quarter, as earnings were offset by share repurchases and elevated levels of unrealized losses on available-for-sale investment securities included in other comprehensive income. The Company announced a fourth share repurchase program on April 12, 2022, and repurchased 1,337,602 shares at an average price of $13.83 during the three months ended June 30, 2022. The tangible-common-equity-to-tangible-assets ratio was 11.92% at June 30, 2022, 12.75% at March 31, 2022, and 13.91% at June 30, 2021. At June 30, 2022, the Company and the Bank had strong capital positions and exceeded all regulatory capital requirements.

About HarborOne Bancorp, Inc.

HarborOne Bancorp, Inc. is the holding company for HarborOne Bank, a Massachusetts-chartered savings bank. HarborOne Bank serves the financial needs of consumers, businesses, and municipalities throughout Eastern Massachusetts and Rhode Island through a network of 30 full-service branches located in Massachusetts and Rhode Island, and a commercial lending office in each of Boston, Massachusetts and Providence, Rhode Island. The Bank also provides a range of educational services through “HarborOne U,” with classes on small business, financial literacy and personal enrichment at two campuses located adjacent to our Brockton and Mansfield locations. HarborOne Mortgage, LLC, a subsidiary of HarborOne Bank, is a full-service mortgage lender with 27 offices in Massachusetts, Rhode Island, and New Hampshire, and is licensed to lend in seven additional states.

Forward Looking Statements

Certain statements herein constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We may also make forward-looking statements in other documents we file with the Securities and Exchange Commission (“SEC”), in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. Such statements may be identified by words such as “believes,” “will,” “would,” “expects,” “project,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, ongoing disruptions due to the COVID-19 pandemic and the measures taken to contain its spread on our employees, customers, business operations, credit quality, financial position, liquidity and results of operations; changes in general business and economic conditions (including inflation) on a national basis and in the local markets in which the Company operates, including changes that adversely affect borrowers’ ability to service and repay the Company’s loans; changes in customer behavior; ongoing turbulence in the capital and debt markets and the impact of such conditions on the Company’s business activities; changes in interest rates; increases in loan default and charge-off rates; changes related to the discontinuation and replacement of LIBOR; decreases in the value of securities in the Company’s investment portfolio; fluctuations in real estate values; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions, customer behavior or adverse economic developments; the adequacy of loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and investments; competitive pressures from other financial institutions; acquisitions may not produce results at levels or within time frames originally anticipated; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters, war, terrorism, civil unrest and future pandemics; changes in regulation; changes in accounting standards and practices; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; demand for loans in the Company’s market area; the Company’s ability to attract and maintain deposits; risks related to the implementation of acquisitions, dispositions, and restructurings; the risk that the Company may not be successful in the implementation of its business strategy; changes in assumptions used in making such forward-looking statements and the risk factors described in the Annual Report on Form 10‑K and Quarterly Reports on Form 10‑Q as filed with the SEC, which are available at the SEC’s website, www.sec.gov. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, HarborOne’s actual results could differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as required by law.

Use of Non-GAAP Measures

In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures. The Company’s management believes that the supplemental non-GAAP information, which consists of the tax equivalent basis for yields, the efficiency ratio, tangible common equity to tangible assets ratio and tangible book value per share, is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

HarborOne Bancorp, Inc.

Consolidated Balance Sheet Trend

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

(in thousands)

 

2022

 

2022

 

2021

 

2021

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

35,843

 

 

$

41,862

 

 

$

35,549

 

 

$

42,589

 

 

$

41,328

 

Short-term investments

 

 

48,495

 

 

 

97,870

 

 

 

159,170

 

 

 

277,050

 

 

 

374,319

 

Total cash and cash equivalents

 

 

84,338

 

 

 

139,732

 

 

 

194,719

 

 

 

319,639

 

 

 

415,647

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale, at fair value

 

 

334,398

 

 

 

361,529

 

 

 

394,036

 

 

 

390,552

 

 

 

353,848

 

Securities held to maturity, at amortized cost

 

 

10,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank stock, at cost

 

 

5,625

 

 

 

5,931

 

 

 

5,931

 

 

 

6,828

 

 

 

7,241

 

Asset held for sale

 

 

 

 

 

678

 

 

 

881

 

 

 

881

 

 

 

 

Loans held for sale, at fair value

 

 

31,679

 

 

 

25,690

 

 

 

45,642

 

 

 

77,052

 

 

 

103,886

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

 

1,847,619

 

 

 

1,816,484

 

 

 

1,699,877

 

 

 

1,573,284

 

 

 

1,561,873

 

Commercial construction

 

 

158,762

 

 

 

154,059

 

 

 

136,563

 

 

 

152,685

 

 

 

107,585

 

Commercial and industrial

 

 

407,182

 

 

 

410,787

 

 

 

421,608

 

 

 

414,814

 

 

 

467,479

 

Total commercial loans

 

 

2,413,563

 

 

 

2,381,330

 

 

 

2,258,048

 

 

 

2,140,783

 

 

 

2,136,937

 

Residential real estate

 

 

1,423,074

 

 

 

1,252,920

 

 

 

1,217,980

 

 

 

1,160,689

 

 

 

1,096,370

 

Consumer

 

 

75,312

 

 

 

103,100

 

 

 

131,705

 

 

 

156,272

 

 

 

186,430

 

Loans

 

 

3,911,949

 

 

 

3,737,350

 

 

 

3,607,733

 

 

 

3,457,744

 

 

 

3,419,737

 

Less: Allowance for credit losses on loans

 

 

(43,560

)

 

 

(41,765

)

 

 

(45,377

)

 

 

(47,988

)

 

 

(51,273

)

Net loans

 

 

3,868,389

 

 

 

3,695,585

 

 

 

3,562,356

 

 

 

3,409,756

 

 

 

3,368,464

 

Mortgage servicing rights, at fair value

 

 

47,130

 

 

 

45,043

 

 

 

38,268

 

 

 

36,540

 

 

 

35,955

 

Goodwill

 

 

69,802

 

 

 

69,802

 

 

 

69,802

 

 

 

69,802

 

 

 

69,802

 

Other intangible assets

 

 

2,695

 

 

 

2,930

 

 

 

3,164

 

 

 

3,399

 

 

 

3,723

 

Other assets

 

 

249,988

 

 

 

244,405

 

 

 

238,606

 

 

 

252,645

 

 

 

257,856

 

Total assets

 

$

4,704,044

 

 

$

4,591,325

 

 

$

4,553,405

 

 

$

4,567,094

 

 

$

4,616,422

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposit accounts

 

$

775,154

 

 

$

771,172

 

 

$

743,051

 

 

$

756,917

 

 

$

800,118

 

NOW accounts

 

 

316,839

 

 

 

310,090

 

 

 

313,733

 

 

 

300,577

 

 

 

250,099

 

Regular savings and club accounts

 

 

1,282,913

 

 

 

1,218,656

 

 

 

1,138,979

 

 

 

1,144,595

 

 

 

1,123,123

 

Money market deposit accounts

 

 

885,673

 

 

 

864,316

 

 

 

858,970

 

 

 

832,441

 

 

 

832,006

 

Term certificate accounts

 

 

587,354

 

 

 

597,746

 

 

 

627,916

 

 

 

659,850

 

 

 

682,594

 

Total deposits

 

 

3,847,933

 

 

 

3,761,980

 

 

 

3,682,649

 

 

 

3,694,380

 

 

 

3,687,940

 

Short-term borrowed funds

 

 

90,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term borrowed funds

 

 

15,693

 

 

 

55,702

 

 

 

55,711

 

 

 

55,720

 

 

 

87,479

 

Subordinated debt

 

 

34,222

 

 

 

34,191

 

 

 

34,159

 

 

 

34,128

 

 

 

34,096

 

Other liabilities and accrued expenses

 

 

91,718

 

 

 

90,387

 

 

 

101,625

 

 

 

102,834

 

 

 

101,436

 

Total liabilities

 

 

4,079,566

 

 

 

3,942,260

 

 

 

3,874,144

 

 

 

3,887,062

 

 

 

3,910,951

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

593

 

 

 

591

 

 

 

585

 

 

 

585

 

 

 

585

 

Additional paid-in capital

 

 

479,519

 

 

 

477,302

 

 

 

469,934

 

 

 

468,526

 

 

 

467,194

 

Unearned compensation - ESOP

 

 

(28,542

)

 

 

(29,002

)

 

 

(29,461

)

 

 

(29,921

)

 

 

(30,380

)

Retained earnings

 

 

339,471

 

 

 

332,734

 

 

 

325,699

 

 

 

315,683

 

 

 

305,831

 

Treasury stock

 

 

(132,296

)

 

 

(113,513

)

 

 

(85,859

)

 

 

(73,723

)

 

 

(38,588

)

Accumulated other comprehensive income (loss)

 

 

(34,267

)

 

 

(19,047

)

 

 

(1,637

)

 

 

(1,118

)

 

 

829

 

Total stockholders' equity

 

 

624,478

 

 

 

649,065

 

 

 

679,261

 

 

 

680,032

 

 

 

705,471

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

4,704,044

 

 

$

4,591,325

 

 

$

4,553,405

 

 

$

4,567,094

 

 

$

4,616,422

 

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income - Trend

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

(in thousands, except share data)

 

2022

 

2022

 

2021

 

2021

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

37,522

 

$

33,576

 

$

34,177

 

 

$

33,680

 

 

$

34,106

 

Interest on loans held for sale

 

 

331

 

 

264

 

 

501

 

 

 

665

 

 

 

852

 

Interest on securities

 

 

1,873

 

 

1,701

 

 

1,541

 

 

 

1,293

 

 

 

793

 

Other interest and dividend income

 

 

131

 

 

61

 

 

134

 

 

 

170

 

 

 

136

 

Total interest and dividend income

 

 

39,857

 

 

35,602

 

 

36,353

 

 

 

35,808

 

 

 

35,887

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

2,019

 

 

1,621

 

 

1,651

 

 

 

2,050

 

 

 

2,302

 

Interest on FHLB borrowings

 

 

119

 

 

188

 

 

193

 

 

 

431

 

 

 

531

 

Interest on subordinated debentures

 

 

524

 

 

523

 

 

524

 

 

 

524

 

 

 

524

 

Total interest expense

 

 

2,662

 

 

2,332

 

 

2,368

 

 

 

3,005

 

 

 

3,357

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

 

37,195

 

 

33,270

 

 

33,985

 

 

 

32,803

 

 

 

32,530

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

 

2,546

 

 

338

 

 

(1,436

)

 

 

(1,627

)

 

 

(4,286

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income, after provision for credit losses

 

 

34,649

 

 

32,932

 

 

35,421

 

 

 

34,430

 

 

 

36,816

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

4,538

 

 

5,322

 

 

10,063

 

 

 

12,756

 

 

 

14,262

 

Changes in mortgage servicing rights fair value

 

 

862

 

 

5,285

 

 

(245

)

 

 

(992

)

 

 

(2,552

)

Other

 

 

2,612

 

 

2,558

 

 

3,359

 

 

 

3,882

 

 

 

4,075

 

Total mortgage banking income

 

 

8,012

 

 

13,165

 

 

13,177

 

 

 

15,646

 

 

 

15,785

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposit account fees

 

 

4,892

 

 

4,472

 

 

4,783

 

 

 

4,658

 

 

 

4,546

 

Income on retirement plan annuities

 

 

112

 

 

107

 

 

109

 

 

 

108

 

 

 

106

 

Gain on sale and call of securities, net

 

 

 

 

 

 

 

 

 

241

 

 

 

 

Bank-owned life insurance income

 

 

494

 

 

483

 

 

506

 

 

 

515

 

 

 

508

 

Other income

 

 

593

 

 

834

 

 

589

 

 

 

842

 

 

 

758

 

Total noninterest income

 

 

14,103

 

 

19,061

 

 

19,164

 

 

 

22,010

 

 

 

21,703

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

21,455

 

 

20,723

 

 

24,564

 

 

 

24,760

 

 

 

25,146

 

Occupancy and equipment

 

 

4,575

 

 

5,428

 

 

4,923

 

 

 

4,765

 

 

 

4,702

 

Data processing

 

 

2,259

 

 

2,241

 

 

2,244

 

 

 

2,205

 

 

 

2,362

 

Loan expense

 

 

385

 

 

478

 

 

732

 

 

 

1,323

 

 

 

1,250

 

Marketing

 

 

986

 

 

1,218

 

 

1,120

 

 

 

880

 

 

 

831

 

Professional fees

 

 

1,680

 

 

1,539

 

 

1,443

 

 

 

1,362

 

 

 

1,487

 

Deposit insurance

 

 

354

 

 

349

 

 

345

 

 

 

341

 

 

 

332

 

Prepayment penalties on Federal Home Loan Bank advances

 

 

 

 

 

 

 

 

 

1,095

 

 

 

 

Other expenses

 

 

3,260

 

 

2,859

 

 

2,817

 

 

 

2,543

 

 

 

2,488

 

Total noninterest expenses

 

 

34,954

 

 

34,835

 

 

38,188

 

 

 

39,274

 

 

 

38,598

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

13,798

 

 

17,158

 

 

16,397

 

 

 

17,166

 

 

 

19,921

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

3,811

 

 

4,891

 

 

3,807

 

 

 

4,907

 

 

 

5,645

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

9,987

 

$

12,267

 

$

12,590

 

 

$

12,259

 

 

$

14,276

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.21

 

$

0.26

 

$

0.26

 

 

$

0.25

 

 

$

0.28

 

Diluted

 

$

0.21

 

$

0.25

 

$

0.25

 

 

$

0.24

 

 

$

0.27

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

46,980,830

 

 

47,836,410

 

 

48,918,539

 

 

 

49,801,123

 

 

 

51,778,293

 

Diluted

 

 

47,536,033

 

 

48,690,420

 

 

49,828,379

 

 

 

50,663,415

 

 

 

52,650,071

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30,

 

 

 

 

 

(dollars in thousands, except share data)

 

2022

 

2021

 

$ Change

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

71,098

 

$

67,966

 

 

$

3,132

 

 

4.6

 

%

Interest on loans held for sale

 

 

595

 

 

2,176

 

 

 

(1,581

)

 

(72.7

)

 

Interest on securities

 

 

3,574

 

 

1,378

 

 

 

2,196

 

 

159.4

 

 

Other interest and dividend income

 

 

192

 

 

214

 

 

 

(22

)

 

(10.3

)

 

Total interest and dividend income

 

 

75,459

 

 

71,734

 

 

 

3,725

 

 

5.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

3,640

 

 

5,022

 

 

 

(1,382

)

 

(27.5

)

 

Interest on FHLB borrowings

 

 

307

 

 

1,083

 

 

 

(776

)

 

(71.7

)

 

Interest on subordinated debentures

 

 

1,047

 

 

1,047

 

 

 

 

 

0.0

 

 

Total interest expense

 

 

4,994

 

 

7,152

 

 

 

(2,158

)

 

(30.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

 

70,465

 

 

64,582

 

 

 

5,883

 

 

9.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

 

2,884

 

 

(4,195

)

 

 

7,079

 

 

168.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income, after provision for credit losses

 

 

67,581

 

 

68,777

 

 

 

(1,196

)

 

(1.7

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

9,860

 

 

39,064

 

 

 

(29,204

)

 

(74.8

)

 

Changes in mortgage servicing rights fair value

 

 

6,147

 

 

857

 

 

 

5,290

 

 

617.3

 

 

Other

 

 

5,170

 

 

8,590

 

 

 

(3,420

)

 

(39.8

)

 

Total mortgage banking income

 

 

21,177

 

 

48,511

 

 

 

(27,334

)

 

(56.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposit account fees

 

 

9,364

 

 

8,398

 

 

 

966

 

 

11.5

 

 

Income on retirement plan annuities

 

 

219

 

 

210

 

 

 

9

 

 

4.3

 

 

Bank-owned life insurance income

 

 

977

 

 

1,001

 

 

 

(24

)

 

(2.4

)

 

Other income

 

 

1,427

 

 

1,392

 

 

 

35

 

 

2.5

 

 

Total noninterest income

 

 

33,164

 

 

59,512

 

 

 

(26,348

)

 

(44.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

42,178

 

 

52,600

 

 

 

(10,422

)

 

(19.8

)

 

Occupancy and equipment

 

 

10,003

 

 

9,958

 

 

 

45

 

 

0.5

 

 

Data processing

 

 

4,500

 

 

4,705

 

 

 

(205

)

 

(4.4

)

 

Loan expense

 

 

863

 

 

3,685

 

 

 

(2,822

)

 

(76.6

)

 

Marketing

 

 

2,204

 

 

1,644

 

 

 

560

 

 

34.1

 

 

Professional fees

 

 

3,219

 

 

3,070

 

 

 

149

 

 

4.9

 

 

Deposit insurance

 

 

703

 

 

652

 

 

 

51

 

 

7.8

 

 

Other expenses

 

 

6,119

 

 

5,086

 

 

 

1,033

 

 

20.3

 

 

Total noninterest expenses

 

 

69,789

 

 

81,400

 

 

 

(11,611

)

 

(14.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

30,956

 

 

46,889

 

 

 

(15,933

)

 

(34.0

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

8,702

 

 

13,221

 

 

 

(4,519

)

 

(34.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

22,254

 

$

33,668

 

 

$

(11,414

)

 

(33.9

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.47

 

$

0.65

 

 

 

 

 

 

 

Diluted

 

$

0.46

 

$

0.64

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

47,406,257

 

 

52,155,754

 

 

 

 

 

 

 

Diluted

 

 

48,110,863

 

 

52,823,354

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

 

 

 

Average

 

 

 

 

 

Average

 

 

 

 

 

Average

 

 

 

 

 

 

 

Outstanding

 

 

 

Yield/

 

Outstanding

 

 

 

Yield/

 

Outstanding

 

 

 

Yield/

 

 

 

Balance

 

Interest

 

Cost (6)

 

Balance

 

Interest

 

Cost (6)

 

Balance

 

Interest

 

Cost (6)

 

 

 

(dollars in thousands)

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

$

391,448

 

$

1,873

 

1.92

%

$

393,364

 

$

1,701

 

1.75

%

$

325,205

 

$

793

 

0.98

%

Other interest-earning assets

 

 

64,678

 

 

131

 

0.81

 

 

150,569

 

 

61

 

0.16

 

 

397,979

 

 

136

 

0.14

 

Loans held for sale

 

 

29,474

 

 

331

 

4.51

 

 

29,842

 

 

264

 

3.59

 

 

115,240

 

 

852

 

2.97

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans (2)

 

 

2,384,630

 

 

25,295

 

4.25

 

 

2,291,343

 

 

22,095

 

3.91

 

 

2,152,105

 

 

22,079

 

4.11

 

Residential real estate loans (2)

 

 

1,330,772

 

 

11,182

 

3.37

 

 

1,220,703

 

 

10,142

 

3.37

 

 

1,064,481

 

 

9,747

 

3.67

 

Consumer loans (2)

 

 

88,943

 

 

1,045

 

4.71

 

 

118,242

 

 

1,339

 

4.59

 

 

205,856

 

 

2,280

 

4.44

 

Total loans

 

 

3,804,345

 

 

37,522

 

3.96

 

 

3,630,288

 

 

33,576

 

3.75

 

 

3,422,442

 

 

34,106

 

4.00

 

Total interest-earning assets

 

 

4,289,945

 

 

39,857

 

3.73

 

 

4,204,063

 

 

35,602

 

3.43

 

 

4,260,866

 

 

35,887

 

3.38

 

Noninterest-earning assets

 

 

311,998

 

 

 

 

 

 

 

326,811

 

 

 

 

 

 

 

339,438

 

 

 

 

 

 

Total assets

 

$

4,601,943

 

 

 

 

 

 

$

4,530,874

 

 

 

 

 

 

$

4,600,304

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

$

1,266,912

 

 

626

 

0.20

 

$

1,165,683

 

 

366

 

0.13

 

$

1,118,494

 

 

461

 

0.17

 

NOW accounts

 

 

311,241

 

 

38

 

0.05

 

 

301,279

 

 

36

 

0.05

 

 

231,075

 

 

41

 

0.07

 

Money market accounts

 

 

885,305

 

 

635

 

0.30

 

 

858,792

 

 

303

 

0.14

 

 

853,586

 

 

417

 

0.20

 

Certificates of deposit

 

 

484,484

 

 

670

 

0.55

 

 

522,211

 

 

729

 

0.57

 

 

589,964

 

 

1,229

 

0.84

 

Brokered deposits

 

 

100,000

 

 

50

 

0.20

 

 

100,000

 

 

187

 

0.76

 

 

100,000

 

 

154

 

0.62

 

Total interest-bearing deposits

 

 

3,047,942

 

 

2,019

 

0.27

 

 

2,947,965

 

 

1,621

 

0.22

 

 

2,893,119

 

 

2,302

 

0.32

 

FHLB advances

 

 

34,763

 

 

119

 

1.36

 

 

55,706

 

 

188

 

1.37

 

 

96,823

 

 

531

 

2.20

 

Subordinated debentures

 

 

34,207

 

 

524

 

6.14

 

 

34,173

 

 

523

 

6.21

 

 

34,080

 

 

524

 

6.17

 

Total borrowings

 

 

68,970

 

 

643

 

3.74

 

 

89,879

 

 

711

 

3.21

 

 

130,903

 

 

1,055

 

3.23

 

Total interest-bearing liabilities

 

 

3,116,912

 

 

2,662

 

0.34

 

 

3,037,844

 

 

2,332

 

0.31

 

 

3,024,022

 

 

3,357

 

0.45

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

768,088

 

 

 

 

 

 

 

738,578

 

 

 

 

 

 

 

784,521

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

75,186

 

 

 

 

 

 

 

86,763

 

 

 

 

 

 

 

88,577

 

 

 

 

 

 

Total liabilities

 

 

3,960,186

 

 

 

 

 

 

 

3,863,185

 

 

 

 

 

 

 

3,897,120

 

 

 

 

 

 

Total stockholders' equity

 

 

641,757

 

 

 

 

 

 

 

667,689

 

 

 

 

 

 

 

703,184

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

4,601,943

 

 

 

 

 

 

$

4,530,874

 

 

 

 

 

 

$

4,600,304

 

 

 

 

 

 

Tax equivalent net interest income

 

 

 

 

 

37,195

 

 

 

 

 

 

 

33,270

 

 

 

 

 

 

 

32,530

 

 

 

Tax equivalent interest rate spread (3)

 

 

 

 

 

 

 

3.38

%

 

 

 

 

 

 

3.12

%

 

 

 

 

 

 

2.93

%

Less: tax equivalent adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income as reported

 

 

 

 

$

37,195

 

 

 

 

 

 

$

33,270

 

 

 

 

 

 

$

32,530

 

 

 

Net interest-earning assets (4)

 

$

1,173,033

 

 

 

 

 

 

$

1,166,219

 

 

 

 

 

 

$

1,236,844

 

 

 

 

 

 

Net interest margin (5)

 

 

 

 

 

 

 

3.48

%

 

 

 

 

 

 

3.21

%

 

 

 

 

 

 

3.06

%

Tax equivalent effect

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin on a fully tax equivalent basis

 

 

 

 

 

 

 

3.48

%

 

 

 

 

 

 

3.21

%

 

 

 

 

 

 

3.06

%

Average interest-earning assets to average interest-bearing liabilities

 

 

137.63

%

 

 

 

 

 

 

138.39

%

 

 

 

 

 

 

140.90

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including demand deposits

 

$

3,816,030

 

$

2,019

 

 

 

$

3,686,543

 

$

1,621

 

 

 

$

3,677,640

 

$

2,302

 

 

 

Cost of total deposits

 

 

 

 

 

 

 

0.21

%

 

 

 

 

 

 

0.18

%

 

 

 

 

 

 

0.25

%

Total funding liabilities, including demand deposits

 

$

3,885,000

 

$

2,662

 

 

 

$

3,776,422

 

$

2,332

 

 

 

$

3,808,543

 

$

3,357

 

 

 

Cost of total funding liabilities

 

 

 

 

 

 

 

0.27

%

 

 

 

 

 

 

0.25

%

 

 

 

 

 

 

0.35

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes securities available for sale and securities held to maturity.

 

(2) Includes nonaccruing loan balances and interest received on such loans.

 

(3) Tax equivalent interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

 

(4) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

 

(5) Net interest margin represents net interest income divided by average total interest-earning assets.

 

(6) Annualized.

 

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended

 

 

 

June 30, 2022

 

June 30, 2021

 

 

 

Average

 

 

 

 

 

Average

 

 

 

 

 

 

 

Outstanding

 

 

 

Yield/

 

Outstanding

 

 

 

Yield/

 

 

 

Balance

 

Interest

 

Cost

 

Balance

 

Interest

 

Cost

 

 

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

$

392,401

 

$

3,574

 

1.84

%

$

298,430

 

$

1,378

 

0.93

%

Other interest-earning assets

 

 

107,386

 

 

192

 

0.36

 

 

289,853

 

 

214

 

0.15

 

Loans held for sale

 

 

29,657

 

 

595

 

4.05

 

 

154,117

 

 

2,176

 

2.85

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans (2)

 

 

2,338,245

 

 

47,390

 

4.09

 

 

2,156,566

 

 

42,859

 

4.01

 

Residential real estate loans (2)

 

 

1,276,041

 

 

21,324

 

3.37

 

 

1,074,332

 

 

20,087

 

3.77

 

Consumer loans (2)

 

 

103,512

 

 

2,384

 

4.64

 

 

229,304

 

 

5,020

 

4.41

 

Total loans

 

 

3,717,798

 

 

71,098

 

3.86

 

 

3,460,202

 

 

67,966

 

3.96

 

Total interest-earning assets

 

 

4,247,242

 

 

75,459

 

3.58

 

 

4,202,602

 

 

71,734

 

3.44

 

Noninterest-earning assets

 

 

319,362

 

 

 

 

 

 

 

403,990

 

 

 

 

 

 

Total assets

 

$

4,566,604

 

 

 

 

 

 

$

4,606,592

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

$

1,216,578

 

 

992

 

0.16

 

$

1,088,822

 

 

998

 

0.18

 

NOW accounts

 

 

306,287

 

 

74

 

0.05

 

 

221,731

 

 

78

 

0.07

 

Money market accounts

 

 

872,122

 

 

938

 

0.22

 

 

857,530

 

 

977

 

0.23

 

Certificates of deposit

 

 

503,243

 

 

1,399

 

0.56

 

 

598,977

 

 

2,673

 

0.90

 

Brokered deposits

 

 

100,000

 

 

237

 

0.48

 

 

100,000

 

 

296

 

0.60

 

Total interest-bearing deposits

 

 

2,998,230

 

 

3,640

 

0.24

 

 

2,867,060

 

 

5,022

 

0.35

 

FHLB advances

 

 

45,176

 

 

307

 

1.37

 

 

99,588

 

 

1,083

 

2.19

 

Subordinated debentures

 

 

34,190

 

 

1,047

 

6.18

 

 

34,063

 

 

1,047

 

6.20

 

Total borrowings

 

 

79,366

 

 

1,354

 

3.44

 

 

133,651

 

 

2,130

 

3.21

 

Total interest-bearing liabilities

 

 

3,077,596

 

 

4,994

 

0.33

 

 

3,000,711

 

 

7,152

 

0.48

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

753,414

 

 

 

 

 

 

 

745,613

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

80,943

 

 

 

 

 

 

 

155,640

 

 

 

 

 

 

Total liabilities

 

 

3,911,953

 

 

 

 

 

 

 

3,901,964

 

 

 

 

 

 

Total stockholders' equity

 

 

654,651

 

 

 

 

 

 

 

704,628

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

4,566,604

 

 

 

 

 

 

$

4,606,592

 

 

 

 

 

 

Tax equivalent net interest income

 

 

 

 

 

70,465

 

 

 

 

 

 

 

64,582

 

 

 

Tax equivalent interest rate spread (3)

 

 

 

 

 

 

 

3.25

%

 

 

 

 

 

 

2.96

%

Less: tax equivalent adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income as reported

 

 

 

 

$

70,465

 

 

 

 

 

 

$

64,582

 

 

 

Net interest-earning assets (4)

 

$

1,169,646

 

 

 

 

 

 

$

1,201,891

 

 

 

 

 

 

Net interest margin (5)

 

 

 

 

 

 

 

3.35

%

 

 

 

 

 

 

3.10

%

Tax equivalent effect

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin on a fully tax equivalent basis

 

 

 

 

 

 

 

3.35

%

 

 

 

 

 

 

3.10

%

Average interest-earning assets to average interest-bearing liabilities

 

 

138.01

%

 

 

 

 

 

 

140.05

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including demand deposits

 

$

3,751,644

 

$

3,640

 

 

 

$

3,612,673

 

$

5,022

 

 

 

Cost of total deposits

 

 

 

 

 

 

 

0.20

%

 

 

 

 

 

 

0.28

%

Total funding liabilities, including demand deposits

 

$

3,831,010

 

$

4,994

 

 

 

$

3,746,324

 

$

7,152

 

 

 

Cost of total funding liabilities

 

 

 

 

 

 

 

0.26

%

 

 

 

 

 

 

0.38

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes securities available for sale and securities held to maturity.

 

(2) Includes nonaccruing loan balances and interest received on such loans.

 

(3) Tax equivalent interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

 

(4) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

 

(5) Net interest margin represents net interest income divided by average total interest-earning assets.

 

 

 

HarborOne Bancorp, Inc.

Average Balances and Yield Trend

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Balances - Trend - Quarters Ended

 

 

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

September 30, 2021

 

June 30, 2021

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

$

391,448

 

$

393,364

 

$

394,301

 

$

358,927

 

$

325,205

 

Other interest-earning assets

 

 

64,678

 

 

150,569

 

 

286,026

 

 

372,892

 

 

397,979

 

Loans held for sale

 

 

29,474

 

 

29,842

 

 

63,833

 

 

84,399

 

 

115,240

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans (2)

 

 

2,384,630

 

 

2,291,343

 

 

2,165,739

 

 

2,121,432

 

 

2,152,105

 

Residential real estate loans (2)

 

 

1,330,772

 

 

1,220,703

 

 

1,171,608

 

 

1,121,898

 

 

1,064,481

 

Consumer loans (2)

 

 

88,943

 

 

118,242

 

 

143,577

 

 

170,366

 

 

205,856

 

Total loans

 

 

3,804,345

 

 

3,630,288

 

 

3,480,924

 

 

3,413,696

 

 

3,422,442

 

Total interest-earning assets

 

 

4,289,945

 

 

4,204,063

 

 

4,225,084

 

 

4,229,914

 

 

4,260,866

 

Noninterest-earning assets

 

 

311,998

 

 

326,811

 

 

337,310

 

 

347,060

 

 

339,438

 

Total assets

 

$

4,601,943

 

$

4,530,874

 

$

4,562,394

 

$

4,576,974

 

$

4,600,304

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

$

1,266,912

 

$

1,165,683

 

$

1,147,855

 

$

1,136,131

 

$

1,118,494

 

NOW accounts

 

 

311,241

 

 

301,279

 

 

300,459

 

 

283,725

 

 

231,075

 

Money market accounts

 

 

885,305

 

 

858,792

 

 

839,977

 

 

832,340

 

 

853,586

 

Certificates of deposit

 

 

484,484

 

 

522,211

 

 

543,208

 

 

570,570

 

 

589,964

 

Brokered deposits

 

 

100,000

 

 

100,000

 

 

100,000

 

 

100,000

 

 

100,000

 

Total interest-bearing deposits

 

 

3,047,942

 

 

2,947,965

 

 

2,931,499

 

 

2,922,766

 

 

2,893,119

 

FHLB advances

 

 

34,763

 

 

55,706

 

 

55,714

 

 

84,438

 

 

96,823

 

Subordinated debentures

 

 

34,207

 

 

34,173

 

 

34,144

 

 

34,111

 

 

34,080

 

Total borrowings

 

 

68,970

 

 

89,879

 

 

89,858

 

 

118,549

 

 

130,903

 

Total interest-bearing liabilities

 

 

3,116,912

 

 

3,037,844

 

 

3,021,357

 

 

3,041,315

 

 

3,024,022

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

768,088

 

 

738,578

 

 

768,361

 

 

756,927

 

 

784,521

 

Other noninterest-bearing liabilities

 

 

75,186

 

 

86,763

 

 

92,034

 

 

90,366

 

 

88,577

 

Total liabilities

 

 

3,960,186

 

 

3,863,185

 

 

3,881,752

 

 

3,888,608

 

 

3,897,120

 

Total stockholders' equity

 

 

641,757

 

 

667,689

 

 

680,642

 

 

688,366

 

 

703,184

 

Total liabilities and stockholders' equity

 

$

4,601,943

 

$

4,530,874

 

$

4,562,394

 

$

4,576,974

 

$

4,600,304

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized Yield Trend - Quarters Ended

 

 

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

September 30, 2021

 

June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

 

1.92

%

 

1.75

%

 

1.55

%

 

1.43

%

 

0.98

%

Other interest-earning assets

 

 

0.81

%

 

0.16

%

 

0.19

%

 

0.18

%

 

0.14

%

Loans held for sale

 

 

4.51

%

 

3.59

%

 

3.11

%

 

3.13

%

 

2.97

%

Commercial loans (2)

 

 

4.25

%

 

3.91

%

 

4.15

%

 

4.19

%

 

4.11

%

Residential real estate loans (2)

 

 

3.37

%

 

3.37

%

 

3.34

%

 

3.31

%

 

3.67

%

Consumer loans (2)

 

 

4.71

%

 

4.59

%

 

4.56

%

 

4.50

%

 

4.44

%

Total loans

 

 

3.96

%

 

3.75

%

 

3.90

%

 

3.91

%

 

4.00

%

Total interest-earning assets

 

 

3.73

%

 

3.43

%

 

3.41

%

 

3.36

%

 

3.38

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

 

0.20

%

 

0.13

%

 

0.09

%

 

0.13

%

 

0.17

%

NOW accounts

 

 

0.05

%

 

0.05

%

 

0.05

%

 

0.06

%

 

0.07

%

Money market accounts

 

 

0.30

%

 

0.14

%

 

0.15

%

 

0.19

%

 

0.20

%

Certificates of deposit

 

 

0.55

%

 

0.57

%

 

0.64

%

 

0.76

%

 

0.84

%

Brokered deposits

 

 

0.20

%

 

0.76

%

 

0.71

%

 

0.64

%

 

0.62

%

Total interest-bearing deposits

 

 

0.27

%

 

0.22

%

 

0.22

%

 

0.28

%

 

0.32

%

FHLB advances

 

 

1.36

%

 

1.37

%

 

1.37

%

 

2.03

%

 

2.20

%

Subordinated debentures

 

 

6.14

%

 

6.21

%

 

6.09

%

 

6.09

%

 

6.17

%

Total borrowings

 

 

3.74

%

 

3.21

%

 

3.17

%

 

3.20

%

 

3.23

%

Total interest-bearing liabilities

 

 

0.34

%

 

0.31

%

 

0.31

%

 

0.39

%

 

0.45

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes securities available for sale and securities held to maturity.

 

(2) Includes nonaccruing loan balances and interest received on such loans.

 

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

Performance Ratios (annualized):

 

2022

 

2022

 

2021

 

2021

 

2021

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (ROAA)

 

 

0.87

%

 

1.08

%

 

1.10

%

 

1.07

%

 

1.24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average equity (ROAE)

 

 

6.22

%

 

7.35

%

 

7.40

%

 

7.12

%

 

8.12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest expense

 

$

34,954

 

$

34,835

 

$

38,188

 

$

39,274

 

$

38,598

 

Less: Amortization of other intangible assets

 

 

235

 

 

235

 

 

235

 

 

324

 

 

324

 

Total adjusted noninterest expense

 

$

34,719

 

$

34,600

 

$

37,953

 

$

38,950

 

$

38,274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

$

37,195

 

$

33,270

 

$

33,985

 

$

32,803

 

$

32,530

 

Total noninterest income

 

 

14,103

 

 

19,061

 

 

19,164

 

 

22,010

 

 

21,703

 

Total revenue

 

$

51,298

 

$

52,331

 

$

53,149

 

$

54,813

 

$

54,233

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (1)

 

 

67.68

%

 

66.12

%

 

71.41

%

 

71.06

%

 

70.57

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) This non-GAAP measure represents adjusted noninterest expense divided by total revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At or for the Quarters Ended

 

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

Asset Quality

 

2022

 

2022

 

2021

 

2021

 

2021

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total nonperforming assets

 

$

24,441

 

 

$

26,109

 

$

36,186

 

$

36,514

 

$

32,731

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

 

0.52

 

%

 

0.57

%

 

0.79

%

 

0.80

%

 

0.71

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses on loans to total loans

 

 

1.11

 

%

 

1.12

%

 

1.26

%

 

1.39

%

 

1.50

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (recoveries) charge-offs

 

$

(504

)

 

$

2,730

 

$

1,174

 

$

1,658

 

$

(175

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized net (recoveries) charge-offs/average loans

 

 

(0.05

)

%

 

0.30

%

 

0.13

%

 

0.19

%

 

(0.02

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses on loans to nonperforming loans

 

 

166.81

 

%

 

159.96

%

 

125.60

%

 

131.52

%

 

158.08

 

%

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

Capital and Share Related

 

2022

 

2022

 

2021

 

2021

 

2021

 

(dollars in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock outstanding

 

 

49,989,007

 

 

51,257,696

 

 

52,390,478

 

 

53,232,110

 

 

55,735,623

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

12.49

 

$

12.66

 

$

12.97

 

$

12.77

 

$

12.66

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

$

624,478

 

$

649,065

 

$

679,261

 

$

680,032

 

$

705,471

 

Less: Goodwill

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

Less: Other intangible assets (1)

 

 

2,695

 

 

2,930

 

 

3,164

 

 

3,399

 

 

3,723

 

Tangible common equity

 

$

551,981

 

$

576,333

 

$

606,295

 

$

606,831

 

$

631,946

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible book value per share (2)

 

$

11.04

 

$

11.24

 

$

11.57

 

$

11.40

 

$

11.34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

4,704,044

 

$

4,591,325

 

$

4,553,405

 

$

4,567,094

 

$

4,616,422

 

Less: Goodwill

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

Less: Other intangible assets

 

 

2,695

 

 

2,930

 

 

3,164

 

 

3,399

 

 

3,723

 

Tangible assets

 

$

4,631,547

 

$

4,518,593

 

$

4,480,439

 

$

4,493,893

 

$

4,542,897

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity / tangible assets (3)

 

 

11.92

%

 

12.75

%

 

13.53

%

 

13.50

%

 

13.91

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Other intangible assets are core deposit intangibles.

(2) This non-GAAP ratio is total stockholders' equity less goodwill and intangible assets divided by common stock outstanding.

(3) This non-GAAP ratio is total stockholders' equity less goodwill and intangible assets to total assets less goodwill and intangible assets.

HarborOne Bancorp, Inc.

Segments Statements of Net Income

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HarborOne Mortgage

 

HarborOne Bank

 

 

For the Quarter Ended

 

For the Quarter Ended

 

 

June 30,

 

March 31,

 

June 30,

 

June 30,

 

March 31,

 

June 30,

 

 

2022

 

2022

 

2021

 

2022

 

2022

 

2021

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

$

411

 

$

350

 

$

855

 

 

$

37,246

 

 

$

33,424

 

 

$

32,134

 

Provision for credit losses

 

 

 

 

 

 

 

 

 

2,546

 

 

 

338

 

 

 

(4,286

)

Net interest and dividend income, after provision for loan losses

 

 

411

 

 

350

 

 

855

 

 

 

34,700

 

 

 

33,086

 

 

 

36,420

 

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

4,538

 

 

5,322

 

 

14,262

 

 

 

 

 

 

 

 

 

 

Intersegment gain (loss)

 

 

1,097

 

 

837

 

 

910

 

 

 

(1,095

)

 

 

(608

)

 

 

(910

)

Changes in mortgage servicing rights fair value

 

 

735

 

 

4,695

 

 

(2,133

)

 

 

127

 

 

 

590

 

 

 

(419

)

Other

 

 

2,393

 

 

2,325

 

 

3,799

 

 

 

219

 

 

 

233

 

 

 

276

 

Total mortgage banking income (loss)

 

 

8,763

 

 

13,179

 

 

16,838

 

 

 

(749

)

 

 

215

 

 

 

(1,053

)

Other noninterest income

 

 

7

 

 

9

 

 

20

 

 

 

6,084

 

 

 

5,887

 

 

 

5,898

 

Total noninterest income

 

 

8,770

 

 

13,188

 

 

16,858

 

 

 

5,335

 

 

 

6,102

 

 

 

4,845

 

Noninterest expense

 

 

7,242

 

 

7,761

 

 

14,101

 

 

 

27,131

 

 

 

26,825

 

 

 

24,128

 

Income before income taxes

 

 

1,939

 

 

5,777

 

 

3,612

 

 

 

12,904

 

 

 

12,363

 

 

 

17,137

 

Provision for income taxes

 

 

549

 

 

1,541

 

 

1,013

 

 

 

3,550

 

 

 

3,557

 

 

 

4,863

 

Net income

 

$

1,390

 

$

4,236

 

$

2,599

 

 

$

9,354

 

 

$

8,806

 

 

$

12,274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HarborOne Mortgage

 

HarborOne Bank

 

 

For the Six Months Ended

 

For the Six Months Ended

 

 

June 30,

 

June 30,

 

June 30,

 

June 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

$

761

 

$

2,105

 

$

70,670

 

 

$

63,382

 

Provision (benefit) for credit losses

 

 

 

 

 

 

2,884

 

 

 

(4,195

)

Net interest and dividend income, after provision (benefit) for credit losses

 

 

761

 

 

2,105

 

 

67,786

 

 

 

67,577

 

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

9,860

 

 

39,064

 

 

 

 

 

 

Intersegment gain (loss)

 

 

1,934

 

 

1,572

 

 

(1,703

)

 

 

(1,572

)

Changes in mortgage servicing rights fair value

 

 

5,430

 

 

990

 

 

717

 

 

 

(133

)

Other

 

 

4,718

 

 

8,014

 

 

452

 

 

 

576

 

Total mortgage banking income (loss)

 

 

21,942

 

 

49,640

 

 

(534

)

 

 

(1,129

)

Other noninterest income

 

 

16

 

 

12

 

 

11,971

 

 

 

10,989

 

Total noninterest income

 

 

21,958

 

 

49,652

 

 

11,437

 

 

 

9,860

 

Noninterest expense

 

 

15,003

 

 

32,158

 

 

53,956

 

 

 

48,591

 

Income before income taxes

 

 

7,716

 

 

19,599

 

 

25,267

 

 

 

28,846

 

Provision for income taxes

 

 

2,090

 

 

5,346

 

 

7,107

 

 

 

8,298

 

Net income

 

$

5,626

 

$

14,253

 

$

18,160

 

 

$

20,548

 

Category: Earnings

Contacts

Linda Simmons, EVP, CFO (508) 895-1379

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