HarborOne Bancorp, Inc. Announces 2022 Third Quarter Earnings

HarborOne Bancorp, Inc. (the “Company” or “HarborOne”) (NASDAQ: HONE), the holding company for HarborOne Bank (the “Bank”), announced net income of $13.8 million, or $0.30 per basic and diluted share, for the third quarter of 2022, compared to net income of $10.0 million, or $0.21 per basic and diluted share, for the preceding quarter and $12.3 million, or $0.24 per diluted share, for the same period last year.

Selected Third Quarter Financial Highlights:

  • Net income increased $3.8 million, or 37.8%.
  • Return on average assets was 1.14%, and return on average equity was 8.76%.
  • Loan growth of $285.4 million, or 7.3%.
  • Total deposit growth $35.2 million, or 0.91% and core deposit growth of $22.9 million, or 0.70%.
  • Continued share repurchase program.

“I am proud of our team’s ability to manage the volatile interest rate environment,” said Joseph F. Casey, President and Chief Executive Officer. He added: “The Company continues to drive revenue through expanded margin which was up 30 basis points year-over-year resulting in net interest income expansion of $12.4 million, or 12.7%. Our mortgage segment remains profitable as the increasing value of our servicing rights, coupled with expense reductions, partially offset declining origination volume and gain-on-sale margins.”

Net Interest Income

The Company’s net interest and dividend income was $39.3 million for the quarter ended September 30, 2022, up $2.1 million, or 5.7%, from $37.2 million for the quarter ended June 30, 2022, and up $6.5 million, or 19.9%, from $32.8 million for the quarter ended September 30, 2021. The interest rate spread and net interest margin were 3.30% and 3.47%, respectively, for the quarter ended September 30, 2022, compared to 3.39% and 3.48%, respectively, for the quarter ended June 30, 2022, and 2.97% and 3.08%, respectively, for the quarter ended September 30, 2021. On a linked-quarter basis, the increase in net interest and dividend income primarily reflects an increase in the average loan balance coupled with increased yields on loans and investments primarily due to rate increases, partially offset by decreases in fees recognized in connection with U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans and higher rates on deposits. The cost of funds was 51 basis points for the quarter ended September 30, 2022, compared to 27 basis points in the preceding quarter.

The $4.7 million increase in total interest and dividend income on a linked-quarter basis reflected a 20-basis-point increase in the yield on interest-earning assets. The yield on loans increased 15 basis points, from 3.96% to 4.11%. Interest on loans in the third quarter included $454,000 in prepayment penalties on commercial loans and $188,000 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 $1.1 million and $353,000, respectively. The three months ended September 30, 2022 and June 30, 2022 include the recognition of deferred fees on PPP loans in the amount of $24,000 and $368,000, respectively. The yield on investments increased 8 basis points, from 1.92% to 2.00%.

The increase in net interest and dividend income from the prior year quarter reflects an increase of $8.7 million, or 24.4%, in total interest and dividend income and an increase of $2.2 million, or 73.8%, 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 57 basis points, while the average balance increased $272.3 million, and the cost of interest-bearing liabilities increased 24 basis points, while the average balance increased $271.6 million.

Noninterest Income

Total noninterest income increased $142,000, or 1.0%, to $14.2 million for the quarter ended September 30, 2022, from $14.1 million for the quarter ended June 30, 2022. Mortgage loan closings for the quarter ended September 30, 2022 were $250.5 million with a gain on loan sales of $3.8 million, compared to $297.5 million in mortgage closings and $4.5 million in gain on sales for the preceding quarter. Deposit account fees were $4.9 million for the quarter ended September 30, 2022, flat compared to the quarter ended June 30, 2022. Other income for the quarter ended September 30, 2022 increased $82,000.

Although declining mortgage demand and volume has negatively impacted mortgage banking income, the change in the fair value of mortgage servicing rights has provided a positive offset. The increase in the fair value of mortgage servicing rights for the three months ended September 30, 2022 was $2.6 million, as compared to an increase of $1.6 million in the fair value of mortgage servicing rights for the three months ended June 30, 2022. The 10-year Treasury Constant Maturity rate increased 85 basis points versus the second quarter of 2022. The impact of principal payments on the underlying mortgages on the mortgage servicing rights was consistent at $747,000 and $771,000 for the quarters ended September 30, 2022 and June 30, 2022, respectively. 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.

Total noninterest income decreased $7.8 million, or 35.3%, compared to the quarter ended September 30, 2021, primarily due to a $7.6 million, or 48.4%, decrease in mortgage banking income, driven by the decrease in loan closings and narrowing gain-on-sale margins.

Noninterest Expense

Total noninterest expenses were $34.5 million for the quarter ended September 30, 2022, a decrease of $481,000, or 1.4%, from the quarter ended June 30, 2022. Compensation and benefits decreased $464,000, or 2.2%, and professional fees decreased $223,000, or 13.3%, partially offset by a $254,000 increase in occupancy and equipment expenses. The decrease in compensation expense reflects a $477,000 decrease in commission expense consistent with the decrease in mortgage originations. The increase in occupancy and equipment expense reflects an increase in expenses for utilities and software licenses.

Total noninterest expenses decreased $4.8 million, or 12.2%, from the quarter ended September 30, 2021. Compensation and benefits decreased $3.8 million and loan expenses decreased $968,000, consistent with the decrease in residential mortgage loan closings and corresponding decrease in mortgage origination commissions. The decrease in compensation and benefits also reflects proactive cost reduction measures taken at HarborOne Mortgage beginning in the second quarter of 2021.

Income Tax Provision

The effective tax rate was 25.4% for the quarter ended September 30, 2022, compared to 27.6% for the quarter ended June 30, 2022 and 28.6% for the quarter ended September 30, 2021. The third quarter 2022 effective rate was impacted by a tax benefit recorded for Industrial Revenue Bonds. The 2022 effective tax rate is expected to be approximately 27%.

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 continued to be strong with total nonperforming assets of $23.4 million at September 30, 2022, compared to $24.4 million at June 30, 2022 and $36.5 million at September 30, 2021. Nonperforming assets as a percentage of total assets were 0.47% at September 30, 2022, 0.52% at June 30, 2022, and 0.80% at September 30, 2021.

The funded loan provision for credit losses for the three and nine months ended September 30, 2022 was $262,000 and $2.0 million, respectively, and reflects provisioning for loan growth partially offset by a reduction in pandemic related uncertainty. Net recoveries totaled $799,000, or 0.08% of average loans outstanding on an annualized basis, for the quarter ended September 30, 2022. Net recoveries totaled $504,000, or 0.05% of average loans outstanding on an annualized basis, for the quarter ended June 30, 2022, and net charge-offs totaled $1.7 million, or 0.19% of average loans outstanding on an annualized basis, for the quarter ended September 30, 2021. The third quarter 2022 recovery reflects the disposition of assets from a SBA guaranteed credit.

The ACL was $44.6 million, or 1.06% of total loans, at September 30, 2022, compared to $43.6 million, or 1.11% of total loans, at June 30, 2022 and an allowance for loss under the incurred loss model of $48.0 million, or 1.39% of total loans, at September 30, 2021. The ACL on unfunded commitments, included in other liabilities on the unaudited Consolidated Balance Sheets, amounted to $5.5 million at September 30, 2022 as compared to $5.1 million at June 30, 2022 and the associated provision was $406,000 and $1.6 million for the three and nine months ended September 30, 2022. There was no ACL on unfunded commitments at December 31, 2021 or September 30, 2021. The increase from the prior quarter reflects $95.3 million in new construction originations in the third quarter, with $72.4 million in unfunded balances as of September 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 September 30, 2022, business-oriented hotels included 13 loans with a total outstanding balance of $93.9 million, non-anchored retail space included 31 loans with a total outstanding balance of $56.3 million and metro office space included 2 loans with a total outstanding balance of $14.9 million. As of September 30, 2022 there were two business-oriented hotel credits with a carrying value of $10.3 million that were rated substandard and on nonaccrual. One of those credits in the amount of $2.0 million was provided a principal deferral that resulted in a troubled-debt restructuring designation in the third quarter. One business-oriented hotel credit in the amount of $9.5 million was downgraded to a watch risk rating during the third quarter of 2022. The other loans in these groups were performing in accordance with their terms.

Balance Sheet

Total assets increased $283.6 million, or 6.0%, to $4.99 billion at September 30, 2022, from $4.70 billion at June 30, 2022. The increase primarily reflects an increase of $285.4 million in loans. Securities available for sale were negatively impacted by unrealized losses of $70.4 million as of September 30, 2022, as compared to $49.9 million of unrealized losses as of June 30, 2022, and $3.6 million of unrealized losses as of December 31, 2021.

Loans increased $285.4 million, or 7.3%, to $4.20 billion at September 30, 2022, from $3.91 billion at June 30, 2022. The increase in loans for the three months ended September 30, 2022 was primarily due to increases in commercial real estate loans of $194.3 million, commercial construction loans of $26.3 million and residential real estate loans of $97.7 million, partially offset by decreases in commercial and industrial loans of $10.1 million and consumer loans of $22.8 million. As of September 30, 2022, outstanding PPP loans amounted to $2.0 million, and there was $24,000 in deferred processing fee income. We expect to complete the forgiveness process for the remaining PPP loans by year-end.

Total deposits were $3.88 billion at September 30, 2022 and $3.85 billion at June 30, 2022. Compared to the prior quarter, non-certificate accounts increased $22.9 million, and term certificate accounts increased $12.3 million. FHLB borrowings increased $240.0 million to $345.7 million at September 30, 2022 from $105.7 million at June 30, 2022. At September 30, 2022, FHLB borrowings were primarily short-term borrowings.

Total stockholders’ equity was $611.4 million at September 30, 2022, compared to $624.5 million at June 30, 2022 and $680.0 million at September 30, 2021. Stockholders’ equity decreased 2.1% 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 repurchased 783,502 shares at an average price of $13.82 during the three months ended September 30, 2022 and announced a fifth share repurchase program on September 21, 2022 to commence at the completion of the share repurchase program announced on April 12, 2022. The tangible-common-equity-to-tangible-assets ratio was 10.97% at September 30, 2022, 11.92% at June 30, 2022, and 13.50% at September 30, 2021. At September 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 31 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 26 offices in Maine, Massachusetts, Rhode Island, and New Hampshire, and is licensed to lend in six 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, 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; cybersecurity incidents, fraud, natural disasters, war, terrorism, civil unrest, the ongoing COVID-19 pandemic, 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 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)

 

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

(in thousands)

 

2022

 

2022

 

2022

 

2021

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

39,910

 

$

35,843

 

$

41,862

 

$

35,549

 

$

42,589

Short-term investments

 

 

46,044

 

 

48,495

 

 

97,870

 

 

159,170

 

 

277,050

Total cash and cash equivalents

 

 

85,954

 

 

84,338

 

 

139,732

 

 

194,719

 

 

319,639

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale, at fair value

 

 

304,852

 

 

334,398

 

 

361,529

 

 

394,036

 

 

390,552

Securities held to maturity, at amortized cost

 

 

15,000

 

 

10,000

 

 

 

 

 

 

Federal Home Loan Bank stock, at cost

 

 

15,973

 

 

5,625

 

 

5,931

 

 

5,931

 

 

6,828

Asset held for sale

 

 

 

 

 

 

678

 

 

881

 

 

881

Loans held for sale, at fair value

 

 

18,805

 

 

31,679

 

 

25,690

 

 

45,642

 

 

77,052

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

 

2,041,905

 

 

1,847,619

 

 

1,816,484

 

 

1,699,877

 

 

1,573,284

Commercial construction

 

 

185,062

 

 

158,762

 

 

154,059

 

 

136,563

 

 

152,685

Commercial and industrial

 

 

397,112

 

 

407,182

 

 

410,787

 

 

421,608

 

 

414,814

Total commercial loans

 

 

2,624,079

 

 

2,413,563

 

 

2,381,330

 

 

2,258,048

 

 

2,140,783

Residential real estate

 

 

1,520,809

 

 

1,423,074

 

 

1,252,920

 

 

1,217,980

 

 

1,160,689

Consumer

 

 

52,466

 

 

75,312

 

 

103,100

 

 

131,705

 

 

156,272

Loans

 

 

4,197,354

 

 

3,911,949

 

 

3,737,350

 

 

3,607,733

 

 

3,457,744

Less: Allowance for credit losses on loans

 

 

(44,621)

 

 

(43,560)

 

 

(41,765)

 

 

(45,377)

 

 

(47,988)

Net loans

 

 

4,152,733

 

 

3,868,389

 

 

3,695,585

 

 

3,562,356

 

 

3,409,756

Mortgage servicing rights, at fair value

 

 

49,861

 

 

47,130

 

 

45,043

 

 

38,268

 

 

36,540

Goodwill

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

Other intangible assets

 

 

2,461

 

 

2,695

 

 

2,930

 

 

3,164

 

 

3,399

Other assets

 

 

272,202

 

 

249,988

 

 

244,405

 

 

238,606

 

 

252,645

Total assets

 

$

4,987,643

 

$

4,704,044

 

$

4,591,325

 

$

4,553,405

 

$

4,567,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposit accounts

 

$

795,945

 

$

775,154

 

$

771,172

 

$

743,051

 

$

756,917

NOW accounts

 

 

308,191

 

 

316,839

 

 

310,090

 

 

313,733

 

 

300,577

Regular savings and club accounts

 

 

1,289,825

 

 

1,282,913

 

 

1,218,656

 

 

1,138,979

 

 

1,144,595

Money market deposit accounts

 

 

889,517

 

 

885,673

 

 

864,316

 

 

858,970

 

 

832,441

Term certificate accounts

 

 

599,632

 

 

587,354

 

 

597,746

 

 

627,916

 

 

659,850

Total deposits

 

 

3,883,110

 

 

3,847,933

 

 

3,761,980

 

 

3,682,649

 

 

3,694,380

Short-term borrowed funds

 

 

330,000

 

 

90,000

 

 

 

 

 

 

Long-term borrowed funds

 

 

15,684

 

 

15,693

 

 

55,702

 

 

55,711

 

 

55,720

Subordinated debt

 

 

34,254

 

 

34,222

 

 

34,191

 

 

34,159

 

 

34,128

Other liabilities and accrued expenses

 

 

113,225

 

 

91,718

 

 

90,387

 

 

101,625

 

 

102,834

Total liabilities

 

 

4,376,273

 

 

4,079,566

 

 

3,942,260

 

 

3,874,144

 

 

3,887,062

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

593

 

 

593

 

 

591

 

 

585

 

 

585

Additional paid-in capital

 

 

480,617

 

 

479,519

 

 

477,302

 

 

469,934

 

 

468,526

Unearned compensation - ESOP

 

 

(28,083)

 

 

(28,542)

 

 

(29,002)

 

 

(29,461)

 

 

(29,921)

Retained earnings

 

 

350,049

 

 

339,471

 

 

332,734

 

 

325,699

 

 

315,683

Treasury stock

 

 

(143,125)

 

 

(132,296)

 

 

(113,513)

 

 

(85,859)

 

 

(73,723)

Accumulated other comprehensive loss

 

 

(48,681)

 

 

(34,267)

 

 

(19,047)

 

 

(1,637)

 

 

(1,118)

Total stockholders' equity

 

 

611,370

 

 

624,478

 

 

649,065

 

 

679,261

 

 

680,032

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

4,987,643

 

$

4,704,044

 

$

4,591,325

 

$

4,553,405

 

$

4,567,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income - Trend

(Unaudited)

 

 

 

Quarters Ended

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

(in thousands, except share data)

 

2022

 

2022

 

2022

 

2021

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

42,065

 

$

37,522

 

$

33,576

 

$

34,177

 

$

33,680

Interest on loans held for sale

 

 

377

 

 

331

 

 

264

 

 

501

 

 

665

Interest on securities

 

 

1,971

 

 

1,873

 

 

1,701

 

 

1,541

 

 

1,293

Other interest and dividend income

 

 

143

 

 

131

 

 

61

 

 

134

 

 

170

Total interest and dividend income

 

 

44,556

 

 

39,857

 

 

35,602

 

 

36,353

 

 

35,808

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

3,491

 

 

2,019

 

 

1,621

 

 

1,651

 

 

2,050

Interest on FHLB borrowings

 

 

1,209

 

 

119

 

 

188

 

 

193

 

 

431

Interest on subordinated debentures

 

 

524

 

 

524

 

 

523

 

 

524

 

 

524

Total interest expense

 

 

5,224

 

 

2,662

 

 

2,332

 

 

2,368

 

 

3,005

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

 

39,332

 

 

37,195

 

 

33,270

 

 

33,985

 

 

32,803

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision (benefit) for credit losses

 

 

668

 

 

2,546

 

 

338

 

 

(1,436)

 

 

(1,627)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

38,664

 

 

34,649

 

 

32,932

 

 

35,421

 

 

34,430

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

3,809

 

 

4,538

 

 

5,322

 

 

10,063

 

 

12,756

Changes in mortgage servicing rights fair value

 

 

1,816

 

 

862

 

 

5,285

 

 

(245)

 

 

(992)

Other

 

 

2,453

 

 

2,612

 

 

2,558

 

 

3,359

 

 

3,882

Total mortgage banking income

 

 

8,078

 

 

8,012

 

 

13,165

 

 

13,177

 

 

15,646

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposit account fees

 

 

4,870

 

 

4,892

 

 

4,472

 

 

4,783

 

 

4,658

Income on retirement plan annuities

 

 

119

 

 

112

 

 

107

 

 

109

 

 

108

Gain on sale and call of securities, net

 

 

 

 

 

 

 

 

 

 

241

Bank-owned life insurance income

 

 

503

 

 

494

 

 

483

 

 

506

 

 

515

Other income

 

 

675

 

 

593

 

 

834

 

 

589

 

 

842

Total noninterest income

 

 

14,245

 

 

14,103

 

 

19,061

 

 

19,164

 

 

22,010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

20,991

 

 

21,455

 

 

20,723

 

 

24,564

 

 

24,760

Occupancy and equipment

 

 

4,829

 

 

4,575

 

 

5,428

 

 

4,923

 

 

4,765

Data processing

 

 

2,311

 

 

2,259

 

 

2,241

 

 

2,244

 

 

2,205

Loan expense

 

 

355

 

 

385

 

 

478

 

 

732

 

 

1,323

Marketing

 

 

850

 

 

986

 

 

1,218

 

 

1,120

 

 

880

Professional fees

 

 

1,457

 

 

1,680

 

 

1,539

 

 

1,443

 

 

1,362

Deposit insurance

 

 

357

 

 

354

 

 

349

 

 

345

 

 

341

Prepayment penalties on Federal Home Loan Bank advances

 

 

 

 

 

 

 

 

 

 

1,095

Other expenses

 

 

3,323

 

 

3,260

 

 

2,859

 

 

2,817

 

 

2,543

Total noninterest expenses

 

 

34,473

 

 

34,954

 

 

34,835

 

 

38,188

 

 

39,274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

18,436

 

 

13,798

 

 

17,158

 

 

16,397

 

 

17,166

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

4,678

 

 

3,811

 

 

4,891

 

 

3,807

 

 

4,907

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

13,758

 

$

9,987

 

$

12,267

 

$

12,590

 

$

12,259

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.30

 

$

0.21

 

$

0.26

 

$

0.26

 

$

0.25

Diluted

 

$

0.30

 

$

0.21

 

$

0.25

 

$

0.25

 

$

0.24

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

45,830,737

 

 

46,980,830

 

 

47,836,410

 

 

48,918,539

 

 

49,801,123

Diluted

 

 

46,420,527

 

 

47,536,033

 

 

48,690,420

 

 

49,828,379

 

 

50,663,415

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30,

 

 

 

 

 

(dollars in thousands, except share data)

 

2022

 

2021

 

$ Change

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

113,163

 

$

101,646

 

$

11,517

 

11.3

%

Interest on loans held for sale

 

 

972

 

 

2,841

 

 

(1,869)

 

(65.8)

 

Interest on securities

 

 

5,545

 

 

2,671

 

 

2,874

 

107.6

 

Other interest and dividend income

 

 

335

 

 

384

 

 

(49)

 

(12.8)

 

Total interest and dividend income

 

 

120,015

 

 

107,542

 

 

12,473

 

11.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

7,131

 

 

7,072

 

 

59

 

0.8

 

Interest on FHLB borrowings

 

 

1,516

 

 

1,514

 

 

2

 

0.1

 

Interest on subordinated debentures

 

 

1,571

 

 

1,571

 

 

 

0.0

 

Total interest expense

 

 

10,218

 

 

10,157

 

 

61

 

0.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

 

109,797

 

 

97,385

 

 

12,412

 

12.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision (benefit) for credit losses

 

 

3,552

 

 

(5,822)

 

 

9,374

 

161.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

106,245

 

 

103,207

 

 

3,038

 

2.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

13,669

 

 

51,820

 

 

(38,151)

 

(73.6)

 

Changes in mortgage servicing rights fair value

 

 

7,963

 

 

(135)

 

 

8,098

 

NM

 

Other

 

 

7,623

 

 

12,472

 

 

(4,849)

 

(38.9)

 

Total mortgage banking income

 

 

29,255

 

 

64,157

 

 

(34,902)

 

(54.4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposit account fees

 

 

14,234

 

 

13,056

 

 

1,178

 

9.0

 

Income on retirement plan annuities

 

 

338

 

 

318

 

 

20

 

6.3

 

Gain on sale and call of securities, net

 

 

 

 

241

 

 

(241)

 

(100.0)

 

Bank-owned life insurance income

 

 

1,480

 

 

1,516

 

 

(36)

 

(2.4)

 

Other income

 

 

2,102

 

 

2,234

 

 

(132)

 

(5.9)

 

Total noninterest income

 

 

47,409

 

 

81,522

 

 

(34,113)

 

(41.8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

63,169

 

 

77,360

 

 

(14,191)

 

(18.3)

 

Occupancy and equipment

 

 

14,832

 

 

14,723

 

 

109

 

0.7

 

Data processing

 

 

6,811

 

 

6,910

 

 

(99)

 

(1.4)

 

Loan expense

 

 

1,218

 

 

5,008

 

 

(3,790)

 

(75.7)

 

Marketing

 

 

3,054

 

 

2,524

 

 

530

 

21.0

 

Professional fees

 

 

4,676

 

 

4,432

 

 

244

 

5.5

 

Deposit insurance

 

 

1,060

 

 

993

 

 

67

 

6.7

 

Prepayment penalties on Federal Home Loan Bank advances

 

 

 

 

1,095

 

 

(1,095)

 

(100.0)

 

Other expenses

 

 

9,442

 

 

7,629

 

 

1,813

 

23.8

 

Total noninterest expenses

 

 

104,262

 

 

120,674

 

 

(16,412)

 

(13.6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

49,392

 

 

64,055

 

 

(14,663)

 

(22.9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

13,380

 

 

18,128

 

 

(4,748)

 

(26.2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

36,012

 

$

45,927

 

$

(9,915)

 

(21.6)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.77

 

$

0.89

 

 

 

 

 

 

Diluted

 

$

0.76

 

$

0.88

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

46,875,312

 

 

51,362,252

 

 

 

 

 

 

Diluted

 

 

47,541,647

 

 

52,094,749

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

 

September 30, 2022

 

June 30, 2022

 

September 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)

 

$

390,577

 

$

1,971

 

2.00

%

$

391,448

 

$

1,873

 

1.92

%

$

358,927

 

$

1,293

 

1.43

%

Other interest-earning assets

 

 

27,723

 

 

143

 

2.05

 

 

64,678

 

 

131

 

0.81

 

 

372,892

 

 

170

 

0.18

 

Loans held for sale

 

 

28,046

 

 

377

 

5.33

 

 

29,474

 

 

331

 

4.51

 

 

84,399

 

 

665

 

3.13

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans (2)

 

 

2,522,359

 

 

28,298

 

4.45

 

 

2,384,630

 

 

25,295

 

4.25

 

 

2,121,432

 

 

22,394

 

4.19

 

Residential real estate loans (2)

 

 

1,470,305

 

 

12,972

 

3.50

 

 

1,330,772

 

 

11,182

 

3.37

 

 

1,121,898

 

 

9,352

 

3.31

 

Consumer loans (2)

 

 

63,220

 

 

795

 

4.99

 

 

88,943

 

 

1,045

 

4.71

 

 

170,366

 

 

1,934

 

4.50

 

Total loans

 

 

4,055,884

 

 

42,065

 

4.11

 

 

3,804,345

 

 

37,522

 

3.96

 

 

3,413,696

 

 

33,680

 

3.91

 

Total interest-earning assets

 

 

4,502,230

 

 

44,556

 

3.93

 

 

4,289,945

 

 

39,857

 

3.73

 

 

4,229,914

 

 

35,808

 

3.36

 

Noninterest-earning assets

 

 

308,734

 

 

 

 

 

 

 

311,998

 

 

 

 

 

 

 

347,060

 

 

 

 

 

 

Total assets

 

$

4,810,964

 

 

 

 

 

 

$

4,601,943

 

 

 

 

 

 

$

4,576,974

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

$

1,293,598

 

 

1,211

 

0.37

 

$

1,266,912

 

 

626

 

0.20

 

$

1,136,131

 

 

365

 

0.13

 

NOW accounts

 

 

305,777

 

 

42

 

0.05

 

 

311,241

 

 

38

 

0.05

 

 

283,725

 

 

45

 

0.06

 

Money market accounts

 

 

893,452

 

 

1,382

 

0.61

 

 

885,305

 

 

635

 

0.30

 

 

832,340

 

 

392

 

0.19

 

Certificates of deposit

 

 

486,923

 

 

787

 

0.64

 

 

484,484

 

 

670

 

0.55

 

 

570,570

 

 

1,087

 

0.76

 

Brokered deposits

 

 

102,875

 

 

69

 

0.27

 

 

100,000

 

 

50

 

0.20

 

 

100,000

 

 

161

 

0.64

 

Total interest-bearing deposits

 

 

3,082,625

 

 

3,491

 

0.45

 

 

3,047,942

 

 

2,019

 

0.27

 

 

2,922,766

 

 

2,050

 

0.28

 

FHLB advances

 

 

196,036

 

 

1,209

 

2.45

 

 

34,763

 

 

119

 

1.36

 

 

84,438

 

 

431

 

2.03

 

Subordinated debentures

 

 

34,237

 

 

524

 

6.07

 

 

34,207

 

 

524

 

6.14

 

 

34,111

 

 

524

 

6.09

 

Total borrowings

 

 

230,273

 

 

1,733

 

2.99

 

 

68,970

 

 

643

 

3.74

 

 

118,549

 

 

955

 

3.20

 

Total interest-bearing liabilities

 

 

3,312,898

 

 

5,224

 

0.63

 

 

3,116,912

 

 

2,662

 

0.34

 

 

3,041,315

 

 

3,005

 

0.39

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

789,214

 

 

 

 

 

 

 

768,088

 

 

 

 

 

 

 

756,927

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

80,304

 

 

 

 

 

 

 

75,186

 

 

 

 

 

 

 

90,366

 

 

 

 

 

 

Total liabilities

 

 

4,182,416

 

 

 

 

 

 

 

3,960,186

 

 

 

 

 

 

 

3,888,608

 

 

 

 

 

 

Total stockholders' equity

 

 

628,548

 

 

 

 

 

 

 

641,757

 

 

 

 

 

 

 

688,366

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

4,810,964

 

 

 

 

 

 

$

4,601,943

 

 

 

 

 

 

$

4,576,974

 

 

 

 

 

 

Net interest income as reported

 

 

 

 

 

39,332

 

 

 

 

 

 

 

37,195

 

 

 

 

 

 

 

32,803

 

 

 

Interest rate spread (3)

 

 

 

 

 

 

 

3.30

%

 

 

 

 

 

 

3.39

%

 

 

 

 

 

 

2.97

%

Net interest-earning assets (4)

 

$

1,189,332

 

 

 

 

 

 

$

1,173,033

 

 

 

 

 

 

$

1,188,599

 

 

 

 

 

 

Net interest margin (5)

 

 

 

 

 

 

 

3.47

%

 

 

 

 

 

 

3.48

%

 

 

 

 

 

 

3.08

%

Ratio of interest-earning assets to interest-bearing liabilities

 

 

135.90

%

 

 

 

 

 

 

137.63

%

 

 

 

 

 

 

139.08

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including demand deposits

 

$

3,871,839

 

$

3,491

 

 

 

$

3,816,030

 

$

2,019

 

 

 

$

3,679,693

 

$

2,050

 

 

 

Cost of total deposits

 

 

 

 

 

 

 

0.36

%

 

 

 

 

 

 

0.21

%

 

 

 

 

 

 

0.22

%

Total funding liabilities, including demand deposits

 

$

4,102,112

 

$

5,224

 

 

 

$

3,885,000

 

$

2,662

 

 

 

$

3,798,242

 

$

3,005

 

 

 

Cost of total funding liabilities

 

 

 

 

 

 

 

0.51

%

 

 

 

 

 

 

0.27

%

 

 

 

 

 

 

0.31

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

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

 

(3) 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 Nine Months Ended

 

 

 

September 30, 2022

 

September 30, 2021

 

 

 

Average

 

 

 

 

 

Average

 

 

 

 

 

 

 

Outstanding

 

 

 

Yield/

 

Outstanding

 

 

 

Yield/

 

 

 

Balance

 

Interest

 

Cost

 

Balance

 

Interest

 

Cost

 

 

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

$

391,786

 

$

5,545

 

1.89

%

$

318,817

 

$

2,671

 

1.12

%

Other interest-earning assets

 

 

80,540

 

 

335

 

0.56

 

 

317,837

 

 

384

 

0.16

 

Loans held for sale

 

 

29,114

 

 

972

 

4.46

 

 

130,622

 

 

2,841

 

2.91

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans (2)

 

 

2,400,290

 

 

75,688

 

4.22

 

 

2,144,726

 

 

65,253

 

4.07

 

Residential real estate loans (2)

 

 

1,341,508

 

 

34,296

 

3.42

 

 

1,090,361

 

 

29,439

 

3.61

 

Consumer loans (2)

 

 

89,934

 

 

3,179

 

4.73

 

 

209,443

 

 

6,954

 

4.44

 

Total loans

 

 

3,831,732

 

 

113,163

 

3.95

 

 

3,444,530

 

 

101,646

 

3.95

 

Total interest-earning assets

 

 

4,333,172

 

 

120,015

 

3.70

 

 

4,211,806

 

 

107,542

 

3.41

 

Noninterest-earning assets

 

 

315,781

 

 

 

 

 

 

 

338,980

 

 

 

 

 

 

Total assets

 

$

4,648,953

 

 

 

 

 

 

$

4,550,786

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

$

1,242,533

 

 

2,203

 

0.24

 

$

1,104,765

 

 

1,363

 

0.16

 

NOW accounts

 

 

306,115

 

 

116

 

0.05

 

 

242,623

 

 

123

 

0.07

 

Money market accounts

 

 

879,310

 

 

2,320

 

0.35

 

 

849,041

 

 

1,369

 

0.22

 

Certificates of deposit

 

 

497,744

 

 

2,186

 

0.59

 

 

589,404

 

 

3,760

 

0.85

 

Brokered deposits

 

 

100,969

 

 

306

 

0.41

 

 

100,000

 

 

457

 

0.61

 

Total interest-bearing deposits

 

 

3,026,671

 

 

7,131

 

0.32

 

 

2,885,833

 

 

7,072

 

0.33

 

FHLB advances

 

 

96,015

 

 

1,516

 

2.11

 

 

94,482

 

 

1,514

 

2.14

 

Subordinated debentures

 

 

34,206

 

 

1,571

 

6.14

 

 

34,080

 

 

1,571

 

6.16

 

Total borrowings

 

 

130,221

 

 

3,087

 

3.17

 

 

128,562

 

 

3,085

 

3.21

 

Total interest-bearing liabilities

 

 

3,156,892

 

 

10,218

 

0.43

 

 

3,014,395

 

 

10,157

 

0.45

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

765,479

 

 

 

 

 

 

 

749,426

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

80,727

 

 

 

 

 

 

 

90,763

 

 

 

 

 

 

Total liabilities

 

 

4,003,098

 

 

 

 

 

 

 

3,854,584

 

 

 

 

 

 

Total stockholders' equity

 

 

645,855

 

 

 

 

 

 

 

696,202

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

4,648,953

 

 

 

 

 

 

$

4,550,786

 

 

 

 

 

 

Net interest income as reported

 

 

 

 

 

109,797

 

 

 

 

 

 

 

97,385

 

 

 

Interest rate spread (3)

 

 

 

 

 

 

 

3.27

%

 

 

 

 

 

 

2.96

%

Net interest-earning assets (4)

 

$

1,176,280

 

 

 

 

 

 

$

1,197,411

 

 

 

 

 

 

Net interest margin (5)

 

 

 

 

 

 

 

3.39

%

 

 

 

 

 

 

3.09

%

Ratio of interest-earning assets to interest-bearing liabilities

 

 

137.26

%

 

 

 

 

 

 

139.72

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including demand deposits

 

$

3,792,150

 

$

7,131

 

 

 

$

3,635,259

 

$

7,072

 

 

 

Cost of total deposits

 

 

 

 

 

 

 

0.25

%

 

 

 

 

 

 

0.26

%

Total funding liabilities, including demand deposits

 

$

3,922,371

 

$

10,218

 

 

 

$

3,763,821

 

$

10,157

 

 

 

Cost of total funding liabilities

 

 

 

 

 

 

 

0.35

%

 

 

 

 

 

 

0.36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

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

 

(3) 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

 

 

 

September 30, 2022

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

September 30, 2021

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

$

390,577

 

$

391,448

 

$

393,364

 

$

394,301

 

$

358,927

 

Other interest-earning assets

 

 

27,723

 

 

64,678

 

 

150,569

 

 

286,026

 

 

372,892

 

Loans held for sale

 

 

28,046

 

 

29,474

 

 

29,842

 

 

63,833

 

 

84,399

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans (2)

 

 

2,522,359

 

 

2,384,630

 

 

2,291,343

 

 

2,165,739

 

 

2,121,432

 

Residential real estate loans (2)

 

 

1,470,305

 

 

1,330,772

 

 

1,220,703

 

 

1,171,608

 

 

1,121,898

 

Consumer loans (2)

 

 

63,220

 

 

88,943

 

 

118,242

 

 

143,577

 

 

170,366

 

Total loans

 

 

4,055,884

 

 

3,804,345

 

 

3,630,288

 

 

3,480,924

 

 

3,413,696

 

Total interest-earning assets

 

 

4,502,230

 

 

4,289,945

 

 

4,204,063

 

 

4,225,084

 

 

4,229,914

 

Noninterest-earning assets

 

 

308,734

 

 

311,998

 

 

326,811

 

 

337,310

 

 

347,060

 

Total assets

 

$

4,810,964

 

$

4,601,943

 

$

4,530,874

 

$

4,562,394

 

$

4,576,974

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

$

1,293,598

 

$

1,266,912

 

$

1,165,683

 

$

1,147,855

 

$

1,136,131

 

NOW accounts

 

 

305,777

 

 

311,241

 

 

301,279

 

 

300,459

 

 

283,725

 

Money market accounts

 

 

893,452

 

 

885,305

 

 

858,792

 

 

839,977

 

 

832,340

 

Certificates of deposit

 

 

486,923

 

 

484,484

 

 

522,211

 

 

543,208

 

 

570,570

 

Brokered deposits

 

 

102,875

 

 

100,000

 

 

100,000

 

 

100,000

 

 

100,000

 

Total interest-bearing deposits

 

 

3,082,625

 

 

3,047,942

 

 

2,947,965

 

 

2,931,499

 

 

2,922,766

 

FHLB advances

 

 

196,036

 

 

34,763

 

 

55,706

 

 

55,714

 

 

84,438

 

Subordinated debentures

 

 

34,237

 

 

34,207

 

 

34,173

 

 

34,144

 

 

34,111

 

Total borrowings

 

 

230,273

 

 

68,970

 

 

89,879

 

 

89,858

 

 

118,549

 

Total interest-bearing liabilities

 

 

3,312,898

 

 

3,116,912

 

 

3,037,844

 

 

3,021,357

 

 

3,041,315

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

789,214

 

 

768,088

 

 

738,578

 

 

768,361

 

 

756,927

 

Other noninterest-bearing liabilities

 

 

80,304

 

 

75,186

 

 

86,763

 

 

92,034

 

 

90,366

 

Total liabilities

 

 

4,182,416

 

 

3,960,186

 

 

3,863,185

 

 

3,881,752

 

 

3,888,608

 

Total stockholders' equity

 

 

628,548

 

 

641,757

 

 

667,689

 

 

680,642

 

 

688,366

 

Total liabilities and stockholders' equity

 

$

4,810,964

 

$

4,601,943

 

$

4,530,874

 

$

4,562,394

 

$

4,576,974

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized Yield Trend - Quarters Ended

 

 

 

September 30, 2022

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

 

2.00

%

 

1.92

%

 

1.75

%

 

1.55

%

 

1.43

%

Other interest-earning assets

 

 

2.05

%

 

0.81

%

 

0.16

%

 

0.19

%

 

0.18

%

Loans held for sale

 

 

5.33

%

 

4.51

%

 

3.59

%

 

3.11

%

 

3.13

%

Commercial loans (2)

 

 

4.45

%

 

4.25

%

 

3.91

%

 

4.15

%

 

4.19

%

Residential real estate loans (2)

 

 

3.50

%

 

3.37

%

 

3.37

%

 

3.34

%

 

3.31

%

Consumer loans (2)

 

 

4.99

%

 

4.71

%

 

4.59

%

 

4.56

%

 

4.50

%

Total loans

 

 

4.11

%

 

3.96

%

 

3.75

%

 

3.90

%

 

3.91

%

Total interest-earning assets

 

 

3.93

%

 

3.73

%

 

3.43

%

 

3.41

%

 

3.36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

 

0.37

%

 

0.20

%

 

0.13

%

 

0.09

%

 

0.13

%

NOW accounts

 

 

0.05

%

 

0.05

%

 

0.05

%

 

0.05

%

 

0.06

%

Money market accounts

 

 

0.61

%

 

0.30

%

 

0.14

%

 

0.15

%

 

0.19

%

Certificates of deposit

 

 

0.64

%

 

0.55

%

 

0.57

%

 

0.64

%

 

0.76

%

Brokered deposits

 

 

0.27

%

 

0.20

%

 

0.76

%

 

0.71

%

 

0.64

%

Total interest-bearing deposits

 

 

0.45

%

 

0.27

%

 

0.22

%

 

0.22

%

 

0.28

%

FHLB advances

 

 

2.45

%

 

1.36

%

 

1.37

%

 

1.37

%

 

2.03

%

Subordinated debentures

 

 

6.07

%

 

6.14

%

 

6.21

%

 

6.09

%

 

6.09

%

Total borrowings

 

 

2.99

%

 

3.74

%

 

3.21

%

 

3.17

%

 

3.20

%

Total interest-bearing liabilities

 

 

0.63

%

 

0.34

%

 

0.31

%

 

0.31

%

 

0.39

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

Performance Ratios (annualized):

 

2022

 

2022

 

2022

 

2021

 

2021

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (ROAA)

 

 

1.14

%

 

0.87

%

 

1.08

%

 

1.10

%

 

1.07

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average equity (ROAE)

 

 

8.76

%

 

6.22

%

 

7.35

%

 

7.40

%

 

7.12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest expense

 

$

34,473

 

$

34,954

 

$

34,835

 

$

38,188

 

$

39,274

 

Less: Amortization of other intangible assets

 

 

235

 

 

235

 

 

235

 

 

235

 

 

324

 

Total adjusted noninterest expense

 

$

34,238

 

$

34,719

 

$

34,600

 

$

37,953

 

$

38,950

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

$

39,332

 

$

37,195

 

$

33,270

 

$

33,985

 

$

32,803

 

Total noninterest income

 

 

14,245

 

 

14,103

 

 

19,061

 

 

19,164

 

 

22,010

 

Total revenue

 

$

53,577

 

$

51,298

 

$

52,331

 

$

53,149

 

$

54,813

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (1)

 

 

63.90

%

 

67.68

%

 

66.12

%

 

71.41

%

 

71.06

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At or for the Quarters Ended

 

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

Asset Quality

 

2022

 

2022

 

2022

 

2021

 

2021

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total nonperforming assets

 

$

23,367

 

$

24,441

 

$

26,109

 

$

36,186

 

$

36,514

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

 

0.47

%

 

0.52

%

 

0.57

%

 

0.79

%

 

0.80

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses on loans to total loans

 

 

1.06

%

 

1.11

%

 

1.12

%

 

1.26

%

 

1.39

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (recoveries) charge-offs

 

$

(799)

 

$

(504)

 

$

2,730

 

$

1,174

 

$

1,658

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized net (recoveries) charge-offs/average loans

 

 

(0.08)

%

 

(0.05)

%

 

0.30

%

 

0.13

%

 

0.19

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses on loans to nonperforming loans

 

 

191.60

%

 

178.41

%

 

159.96

%

 

125.60

%

 

131.52

%

 

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

Capital and Share Related

 

2022

 

2022

 

2022

 

2021

 

2021

 

(dollars in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock outstanding

 

 

49,202,660

 

 

49,989,007

 

 

51,257,696

 

 

52,390,478

 

 

53,232,110

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

12.43

 

$

12.49

 

$

12.66

 

$

12.97

 

$

12.77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

$

611,370

 

$

624,478

 

$

649,065

 

$

679,261

 

$

680,032

 

Less: Goodwill

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

Less: Other intangible assets (1)

 

 

2,461

 

 

2,695

 

 

2,930

 

 

3,164

 

 

3,399

 

Tangible common equity

 

$

539,107

 

$

551,981

 

$

576,333

 

$

606,295

 

$

606,831

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible book value per share (2)

 

$

10.96

 

$

11.04

 

$

11.24

 

$

11.57

 

$

11.40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

4,987,643

 

$

4,704,044

 

$

4,591,325

 

$

4,553,405

 

$

4,567,094

 

Less: Goodwill

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

Less: Other intangible assets

 

 

2,461

 

 

2,695

 

 

2,930

 

 

3,164

 

 

3,399

 

Tangible assets

 

$

4,915,380

 

$

4,631,547

 

$

4,518,593

 

$

4,480,439

 

$

4,493,893

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity / tangible assets (3)

 

 

10.97

%

 

11.92

%

 

12.75

%

 

13.53

%

 

13.50

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

June 30,

 

September 30,

 

 

2022

 

2022

 

2021

 

2022

 

2022

 

2021

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

$

437

 

$

411

 

$

792

 

$

39,373

 

$

37,246

 

$

32,494

Provision (benefit) for credit losses

 

 

 

 

 

 

 

 

668

 

 

2,546

 

 

(1,627)

Net interest and dividend income, after provision for loan losses

 

 

437

 

 

411

 

 

792

 

 

38,705

 

 

34,700

 

 

34,121

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

3,809

 

 

4,538

 

 

12,756

 

 

 

 

 

 

Intersegment gain (loss)

 

 

698

 

 

1,097

 

 

2,366

 

 

(904)

 

 

(1,095)

 

 

(1,373)

Changes in mortgage servicing rights fair value

 

 

1,652

 

 

735

 

 

(918)

 

 

164

 

 

127

 

 

(74)

Other

 

 

2,235

 

 

2,393

 

 

3,619

 

 

218

 

 

219

 

 

263

Total mortgage banking income (loss)

 

 

8,394

 

 

8,763

 

 

17,823

 

 

(522)

 

 

(749)

 

 

(1,184)

Other noninterest income (loss)

 

 

(13)

 

 

7

 

 

25

 

 

6,180

 

 

6,084

 

 

6,339

Total noninterest income

 

 

8,381

 

 

8,770

 

 

17,848

 

 

5,658

 

 

5,335

 

 

5,155

Noninterest expense

 

 

6,610

 

 

7,242

 

 

12,387

 

 

27,707

 

 

27,131

 

 

26,570

Income before income taxes

 

 

2,208

 

 

1,939

 

 

6,253

 

 

16,656

 

 

12,904

 

 

12,706

Provision for income taxes

 

 

687

 

 

549

 

 

1,559

 

 

4,166

 

 

3,550

 

 

3,575

Net income

 

$

1,521

 

$

1,390

 

$

4,694

 

$

12,490

 

$

9,354

 

$

9,131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HarborOne Mortgage

 

HarborOne Bank

 

 

For the Nine Months Ended

 

For the Nine Months Ended

 

 

September 30,

 

September 30,

 

September 30,

 

September 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

$

1,198

 

$

2,897

 

$

110,043

 

$

95,876

Provision (benefit) for credit losses

 

 

 

 

 

 

3,552

 

 

(5,822)

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

 

 

1,198

 

 

2,897

 

 

106,491

 

 

101,698

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

13,669

 

 

51,820

 

 

 

 

Intersegment gain (loss)

 

 

2,632

 

 

3,938

 

 

(2,607)

 

 

(2,945)

Changes in mortgage servicing rights fair value

 

 

7,082

 

 

72

 

 

881

 

 

(207)

Other

 

 

6,953

 

 

11,633

 

 

670

 

 

839

Total mortgage banking income (loss)

 

 

30,336

 

 

67,463

 

 

(1,056)

 

 

(2,313)

Other noninterest income

 

 

3

 

 

37

 

 

18,151

 

 

17,328

Total noninterest income

 

 

30,339

 

 

67,500

 

 

17,095

 

 

15,015

Noninterest expense

 

 

21,613

 

 

44,545

 

 

81,663

 

 

75,161

Income before income taxes

 

 

9,924

 

 

25,852

 

 

41,923

 

 

41,552

Provision for income taxes

 

 

2,777

 

 

6,905

 

 

11,273

 

 

11,873

Net income

 

$

7,147

 

$

18,947

 

$

30,650

 

$

29,679

Category: Earnings Release

Contacts

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

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