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HarborOne Bancorp, Inc. Announces 2023 Second Quarter Earnings

HarborOne Bancorp, Inc. (the “Company” or “HarborOne”) (NASDAQ: HONE), the holding company for HarborOne Bank (the “Bank”), announced net income of $7.5 million, or $0.17 per diluted share, for the second quarter of 2023, compared to net income of $7.3 million, or $0.16 per diluted share, for the preceding quarter and net income of $10.0 million, or $0.21 per diluted share, for the same period last year.

Selected Financial Highlights:

  • Loan growth of $75.6 million, or 1.6%, and deposit growth of $45.8 million, or 1.1%, on a linked-quarter basis.
  • The closure of one branch and the relocation of another branch were completed, providing long-term expense savings.
  • Completed share repurchase program and received regulatory non-objection for sixth share repurchase program.

“During the second quarter, we completed our fifth share repurchase program and received regulatory approval to commence our sixth program,” said Joseph F. Casey, President and CEO. “Despite continued economic headwinds, our book value per share and tangible book value per share increased for the last three consecutive quarters. Additionally, the pace of deposit cost increases has slowed and we had solid customer deposit growth in Q2, with the average balance increasing at an annualized growth rate of 9.5%.”

Net Interest Income

The Company’s net interest and dividend income was $32.1 million for the quarter ended June 30, 2023, compared to $34.4 million for the quarter ended March 31, 2023, and $37.2 million for the quarter ended June 30, 2022. The tax equivalent interest rate spread and net interest margin were 1.89% and 2.45%, respectively, for the quarter ended June 30, 2023, compared to 2.28% and 2.78%, respectively, for the quarter ended March 31, 2023, and 3.39% and 3.48%, respectively, for the quarter ended June 30, 2022. The Company continues to evaluate and execute strategies to mitigate interest rate risk and manage net interest margin, including designated fair value and cash flow hedges, competitive deposit and loan pricing and brokered certificates of deposit.

On a linked-quarter basis, the decreases in net interest and dividend income, tax equivalent interest rate spread, and net interest margin primarily reflect an increase in interest-bearing liabilities, with higher cost of funding, partially offset by increased loan balances and yields with liability repricing outpacing assets. The cost of funds was 235 basis points for the quarter ended June 30, 2023, compared to 188 basis points for the preceding quarter. Income on other interest-earning assets increased $2.1 million on a linked-quarter basis, primarily reflecting an increase in the average balance invested in federal funds.

The $5.1 million decrease in net interest and dividend income from the prior year quarter reflects an increase of $26.0 million, or 978.1%, in total interest expense, partially offset by an increase of $20.9 million, or 52.5%, in total interest and dividend income. The changes reflect rate and volume changes in both interest-bearing assets and liabilities. The cost of interest-bearing liabilities increased 240 basis points, while the average balance increased $1.08 billion, and the yield on interest-earning assets increased 90 basis points, while the average balance increased $1.00 billion.

Noninterest Income

Total noninterest income increased $4.0 million, or 45.7%, to $12.7 million for the quarter ended June 30, 2023, from $8.7 million for the quarter ended March 31, 2023. Higher gain-on-sale margins and volume provided gain on loan sales of $3.3 million for the quarter ended June 30, 2023 compared to $2.2 million in gain on sales for the preceding quarter, from mortgage loan closings of $172.2 million and $125.6 million, respectively. Deposit account fees were $5.0 million for the quarter ended June 30, 2023, compared to $4.7 million for the quarter ended March 31, 2023.

The increase in the fair value of mortgage servicing rights for the three months ended June 30, 2023 was $915,000 as compared to a decrease of $1.3 million in the fair value of mortgage servicing rights for the three months ended March 31, 2023. The valuation was positively impacted by key benchmark mortgage rates used in the valuation. The impact of principal payments on the underlying mortgages on the mortgage servicing rights was $479,000 and $371,000 for the quarters ended June 30, 2023 and March 31, 2023, respectively.

Total noninterest income decreased $1.4 million, or 10.2%, compared to the quarter ended June 30, 2022, primarily due to a $2.0 million, or 24.5%, decrease in mortgage banking income, driven by the decrease in loan demand as a result of interest rate increases. The prior year quarter also reflected a $1.6 million increase in the fair value of mortgage servicing rights.

Noninterest Expense

Total noninterest expenses were $31.7 million for the quarter ended June 30, 2023, an increase of $216,000, or 0.7%, from the quarter ended March 31, 2023. Deposit insurance expense increased $666,000 and compensation and benefits increased $421,000, primarily reflecting increased mortgage origination commission partially offset by decreased payroll tax expense. There were additional decreases in occupancy and equipment expense of $407,000, reflecting recent cost saving measures.

Total noninterest expenses decreased $3.2 million, or 9.2%, from the quarter ended June 30, 2022. Compensation and benefits decreased $3.2 million, primarily reflecting decreased mortgage origination commission and incentive accruals, and professional fees decreased $566,000, partially offset by a deposit insurance expense increase of $822,000.

During the second quarter of 2023 the Bank took cost-saving and organizational efficiency measures with an estimated annual savings of $2.9 million and recognized severance expense of $452,000. Additionally, the Bank closed one branch and relocated another branch, which will both provide additional long-term expense savings.

Asset Quality and Allowance for Credit Losses

Total nonperforming assets were $20.2 million at June 30, 2023, compared to $12.3 million at March 31, 2023 and $24.4 million at June 30, 2022. Nonperforming assets as a percentage of total assets were 0.36% at June 30, 2023, 0.22% at March 31, 2023, and 0.52% at June 30, 2022. During the quarter ended June 30, 2023, a $2.9 million charge off was recorded on a metro office space commercial real estate credit, and it was placed on nonaccrual. As of June 30, 2023, the carrying value of the credit is $7.0 million.

The provision for credit losses for the quarter ended June 30, 2023 was $3.3 million and primarily reflects replenishment as a result of the charge-off and provisioning for loan growth. Net charge-offs totaled $2.7 million, or 0.23% of average loans outstanding on an annualized basis, for the quarter ended June 30, 2023. Net recoveries totaled $11,000 for the quarter ended March 31, 2023, and $504,000 for the quarter ended June 30, 2022.

The allowance for credit losses (“ACL”) on loans was $47.8 million, or 1.02% of total loans, at June 30, 2023, compared to $47.0 million, or 1.02% of total loans, at March 31, 2023 and $43.6 million, or 1.11% of total loans, at June 30, 2022. The ACL on unfunded commitments, included in other liabilities on the unaudited Consolidated Balance Sheets, amounted to $4.8 million at June 30, 2023 as compared to $5.0 million at March 31, 2023 and $5.1 million at June 30, 2022.

We believe that we are well positioned to withstand a downturn in the credit cycle should one materialize. We continue to closely monitor our loan portfolio for signs of deterioration. Management continues to be focused on commercial real estate in light of speculation that commercial real estate values may deteriorate as the market adjusts to higher vacancies and rates. Our commercial real estate portfolio is centered in New England, with approximately 75% in Massachusetts and Rhode Island. Approximately 60% of commercial real estate loans are fixed-rate loans with limited near-term maturity risk.

Management has also identified certain sectors within the commercial real estate segment that may be particularly 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. This includes business-oriented hotels, non-anchored retail space and metro office space. As of June 30, 2023, business-oriented hotels loans included 13 loans with a total outstanding balance of $114.8 million, non-anchored retail space loans included 28 loans with a total outstanding balance of $41.5 million, and metro office space loans included two loans with a total outstanding balance of $11.9 million. As of June 30, 2023, there was one metro office space loan with a carrying value of $7.0 million, that was rated doubtful and on nonaccrual and one business-oriented hotel credit with a carrying value of $1.8 million that was rated substandard and on nonaccrual. The other loans in these groups were performing in accordance with their terms.

Balance Sheet

Total assets increased $86.4 million, or 1.6%, to $5.66 billion at June 30, 2023, from $5.57 billion at March 31, 2023. The increase primarily reflects an increase of $75.6 million in loans.

Available-for-sale securities were $292.0 million and $303.1 million at June 30, 2023 and March 31, 2023, respectively. The unrealized loss on securities available for sale increased to $66.5 million as of June 30, 2023, as compared to $61.2 million of unrealized losses as of March 31, 2023. Securities held to maturity were $19.8 million, or 0.35% of total assets, with a fair value of $19.0 million.

Loans increased $75.6 million, or 1.6%, to $4.70 billion at June 30, 2023, from $4.62 billion at March 31, 2023. The increase in loans for the three months ended June 30, 2023 was primarily due to increases in commercial and industrial loans of $30.4 million, commercial construction loans of $16.2 million, and residential real estate loans of $33.8 million, partially offset by a decrease in consumer loans of $4.8 million. Management continues to seek prudent commercial lending opportunities to deepen relationships with existing customers and develop new relationships with strong borrowers.

Total deposits were $4.29 billion at June 30, 2023 and $4.24 billion at March 31, 2023. Compared to the prior quarter, non-certificate accounts decreased $35.7 million, brokered deposits decreased $7.9 million, and term certificate accounts increased $89.4 million, primarily due to an 11-month term rate special offered during the quarter. As of June 30, 2023, FDIC-insured deposits were approximately 69% of total deposits, including Bank subsidiary deposits. Including Depositors Insurance Fund (“DIF”), excess insurance coverage that remains available until February 24, 2024, insured deposits are approximately 88% of total deposits, including Bank subsidiary deposits. The Bank exited the DIF as of February 24, 2023; however, insurance remains in place for funds on deposit as of that date for one year or until maturity for term certificates.

FHLB borrowings increased $13.9 million to $604.6 million at June 30, 2023 from $590.7 million at March 31, 2023. At June 30, 2023, FHLB short-term borrowings were $414.0 million as the Bank utilized available credit to enhance liquidity. In the second quarter of 2023, the Bank established access to the Bank Term Funding Program (“BTFP”) with the Federal Reserve to enhance its liquidity position. As of June 30, 2023, there were no outstanding advances under the BTFP and the Bank had $1.0 billion in available borrowing capacity across multiple relationships.

Total stockholders’ equity was $595.5 million at June 30, 2023, compared to $599.8 million at March 31, 2023 and $624.5 million at June 30, 2022. Stockholders’ equity decreased 0.7% when compared to the prior quarter, as earnings were offset by share repurchases. The Company repurchased 472,308 shares at an average price of $12.30, including $0.13 per share of excise tax, during the three months ended June 30, 2023. A share repurchase program that commenced in the first quarter of 2023 was completed in the second quarter of 2023, and the Company plans to commence a sixth share repurchase program during the third quarter of 2023. The tangible-common-equity-to-tangible-assets ratio (1) was 9.38% at June 30, 2023, 9.60% at March 31, 2023, and 11.92% at June 30, 2022. At June 30, 2023, the Company and the Bank had strong capital positions, exceeded all regulatory capital requirements, and are considered well-capitalized.

About HarborOne Bancorp, Inc.

HarborOne Bancorp, Inc. is the holding company for HarborOne Bank, a Massachusetts-chartered trust company. HarborOne Bank serves the financial needs of consumers, businesses, and municipalities throughout Eastern Massachusetts and Rhode Island through a network of 30 full-service banking centers located in Massachusetts and Rhode Island, and commercial lending offices in Boston, Massachusetts and Providence, Rhode Island. HarborOne Bank also provides a range of educational resources through “HarborOne U,” with free digital content, webinars, and recordings for small business and personal financial education. HarborOne Mortgage, LLC, a subsidiary of HarborOne Bank, provides mortgage lending services throughout New England and other states.

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

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 and concerns about 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; 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, 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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

(in thousands)

 

2023

 

2023

 

2022

 

2022

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

43,525

 

 

$

38,989

 

 

$

39,712

 

 

$

39,910

 

 

$

35,843

 

Short-term investments

 

 

209,326

 

 

 

210,765

 

 

 

58,305

 

 

 

46,044

 

 

 

48,495

 

Total cash and cash equivalents

 

 

252,851

 

 

 

249,754

 

 

 

98,017

 

 

 

85,954

 

 

 

84,338

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale, at fair value

 

 

292,012

 

 

 

303,059

 

 

 

301,149

 

 

 

304,852

 

 

 

334,398

 

Securities held to maturity, at amortized cost

 

 

19,839

 

 

 

19,838

 

 

 

19,949

 

 

 

15,000

 

 

 

10,000

 

Federal Home Loan Bank stock, at cost

 

 

27,123

 

 

 

23,589

 

 

 

20,071

 

 

 

15,973

 

 

 

5,625

 

Asset held for sale

 

 

966

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale, at fair value

 

 

20,949

 

 

 

13,956

 

 

 

18,544

 

 

 

18,805

 

 

 

31,679

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

 

2,286,688

 

 

 

2,286,727

 

 

 

2,250,344

 

 

 

2,041,905

 

 

 

1,847,619

 

Commercial construction

 

 

228,902

 

 

 

212,689

 

 

 

199,311

 

 

 

185,062

 

 

 

158,762

 

Commercial and industrial

 

 

453,422

 

 

 

423,036

 

 

 

424,275

 

 

 

397,112

 

 

 

407,182

 

Total commercial loans

 

 

2,969,012

 

 

 

2,922,452

 

 

 

2,873,930

 

 

 

2,624,079

 

 

 

2,413,563

 

Residential real estate

 

 

1,701,766

 

 

 

1,667,934

 

 

 

1,634,319

 

 

 

1,520,809

 

 

 

1,423,074

 

Consumer

 

 

27,425

 

 

 

32,246

 

 

 

41,421

 

 

 

52,466

 

 

 

75,312

 

Loans

 

 

4,698,203

 

 

 

4,622,632

 

 

 

4,549,670

 

 

 

4,197,354

 

 

 

3,911,949

 

Less: Allowance for credit losses on loans

 

 

(47,821

)

 

 

(46,994

)

 

 

(45,236

)

 

 

(44,621

)

 

 

(43,560

)

Net loans

 

 

4,650,382

 

 

 

4,575,638

 

 

 

4,504,434

 

 

 

4,152,733

 

 

 

3,868,389

 

Mortgage servicing rights, at fair value

 

 

48,176

 

 

 

47,080

 

 

 

48,138

 

 

 

49,861

 

 

 

47,130

 

Goodwill

 

 

69,802

 

 

 

69,802

 

 

 

69,802

 

 

 

69,802

 

 

 

69,802

 

Other intangible assets

 

 

1,893

 

 

 

2,082

 

 

 

2,272

 

 

 

2,461

 

 

 

2,695

 

Other assets

 

 

275,261

 

 

 

268,060

 

 

 

277,169

 

 

 

272,202

 

 

 

249,988

 

Total assets

 

$

5,659,254

 

 

$

5,572,858

 

 

$

5,359,545

 

 

$

4,987,643

 

 

$

4,704,044

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposit accounts

 

$

717,572

 

 

$

726,548

 

 

$

762,576

 

 

$

795,945

 

 

$

775,154

 

NOW accounts

 

 

286,956

 

 

 

287,376

 

 

 

297,692

 

 

 

308,191

 

 

 

316,839

 

Regular savings and club accounts

 

 

1,390,906

 

 

 

1,455,318

 

 

 

1,468,172

 

 

 

1,289,825

 

 

 

1,282,913

 

Money market deposit accounts

 

 

834,120

 

 

 

796,008

 

 

 

861,704

 

 

 

889,517

 

 

 

885,673

 

Term certificate accounts

 

 

742,931

 

 

 

653,553

 

 

 

497,975

 

 

 

484,936

 

 

 

487,354

 

Brokered deposits

 

 

315,003

 

 

 

322,927

 

 

 

301,380

 

 

 

114,696

 

 

 

100,000

 

Total deposits

 

 

4,287,488

 

 

 

4,241,730

 

 

 

4,189,499

 

 

 

3,883,110

 

 

 

3,847,933

 

FHLB borrowings

 

 

604,568

 

 

 

590,665

 

 

 

400,675

 

 

 

345,684

 

 

 

105,693

 

Subordinated debt

 

 

34,348

 

 

 

34,317

 

 

 

34,285

 

 

 

34,254

 

 

 

34,222

 

Other liabilities and accrued expenses

 

 

137,318

 

 

 

106,352

 

 

 

118,110

 

 

 

113,225

 

 

 

91,718

 

Total liabilities

 

 

5,063,722

 

 

 

4,973,064

 

 

 

4,742,569

 

 

 

4,376,273

 

 

 

4,079,566

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

597

 

 

 

597

 

 

 

596

 

 

 

593

 

 

 

593

 

Additional paid-in capital

 

 

484,544

 

 

 

483,831

 

 

 

483,031

 

 

 

480,617

 

 

 

479,519

 

Unearned compensation - ESOP

 

 

(26,704

)

 

 

(27,164

)

 

 

(27,623

)

 

 

(28,083

)

 

 

(28,542

)

Retained earnings

 

 

364,709

 

 

 

360,454

 

 

 

356,438

 

 

 

350,049

 

 

 

339,471

 

Treasury stock

 

 

(181,324

)

 

 

(175,514

)

 

 

(148,384

)

 

 

(143,125

)

 

 

(132,296

)

Accumulated other comprehensive loss

 

 

(46,290

)

 

 

(42,410

)

 

 

(47,082

)

 

 

(48,681

)

 

 

(34,267

)

Total stockholders' equity

 

 

595,532

 

 

 

599,794

 

 

 

616,976

 

 

 

611,370

 

 

 

624,478

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

5,659,254

 

 

$

5,572,858

 

 

$

5,359,545

 

 

$

4,987,643

 

 

$

4,704,044

 

 

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)

 

2023

 

2023

 

2022

 

2022

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

55,504

 

$

52,771

 

 

$

49,177

 

 

$

42,065

 

$

37,522

Interest on loans held for sale

 

 

326

 

 

286

 

 

 

334

 

 

 

377

 

 

331

Interest on securities

 

 

2,035

 

 

2,079

 

 

 

2,045

 

 

 

1,971

 

 

1,873

Other interest and dividend income

 

 

2,935

 

 

803

 

 

 

359

 

 

 

143

 

 

131

Total interest and dividend income

 

 

60,800

 

 

55,939

 

 

 

51,915

 

 

 

44,556

 

 

39,857

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

20,062

 

 

15,913

 

 

 

8,499

 

 

 

3,491

 

 

2,019

Interest on FHLB and FRB borrowings

 

 

8,114

 

 

5,105

 

 

 

3,703

 

 

 

1,209

 

 

119

Interest on subordinated debentures

 

 

524

 

 

523

 

 

 

524

 

 

 

524

 

 

524

Total interest expense

 

 

28,700

 

 

21,541

 

 

 

12,726

 

 

 

5,224

 

 

2,662

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

 

32,100

 

 

34,398

 

 

 

39,189

 

 

 

39,332

 

 

37,195

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

 

3,283

 

 

1,866

 

 

 

2,108

 

 

 

668

 

 

2,546

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income, after provision for credit losses

 

 

28,817

 

 

32,532

 

 

 

37,081

 

 

 

38,664

 

 

34,649

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

3,300

 

 

2,224

 

 

 

2,301

 

 

 

3,809

 

 

4,538

Changes in mortgage servicing rights fair value

 

 

436

 

 

(1,692

)

 

 

(2,631

)

 

 

1,816

 

 

862

Other

 

 

2,312

 

 

2,216

 

 

 

2,325

 

 

 

2,453

 

 

2,612

Total mortgage banking income

 

 

6,048

 

 

2,748

 

 

 

1,995

 

 

 

8,078

 

 

8,012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposit account fees

 

 

5,012

 

 

4,733

 

 

 

5,031

 

 

 

4,870

 

 

4,892

Income on retirement plan annuities

 

 

128

 

 

119

 

 

 

118

 

 

 

119

 

 

112

Bank-owned life insurance income

 

 

511

 

 

500

 

 

 

501

 

 

 

503

 

 

494

Other income

 

 

963

 

 

590

 

 

 

2,255

 

 

 

675

 

 

593

Total noninterest income

 

 

12,662

 

 

8,690

 

 

 

9,900

 

 

 

14,245

 

 

14,103

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

18,220

 

 

17,799

 

 

 

20,104

 

 

 

20,991

 

 

21,455

Occupancy and equipment

 

 

4,633

 

 

5,040

 

 

 

4,935

 

 

 

4,829

 

 

4,575

Data processing

 

 

2,403

 

 

2,346

 

 

 

2,359

 

 

 

2,311

 

 

2,259

Loan expense

 

 

417

 

 

313

 

 

 

169

 

 

 

355

 

 

385

Marketing

 

 

925

 

 

1,181

 

 

 

862

 

 

 

850

 

 

986

Professional fees

 

 

1,114

 

 

1,501

 

 

 

1,446

 

 

 

1,457

 

 

1,680

Deposit insurance

 

 

1,176

 

 

510

 

 

 

385

 

 

 

357

 

 

354

Other expenses

 

 

2,837

 

 

2,819

 

 

 

4,384

 

 

 

3,323

 

 

3,260

Total noninterest expenses

 

 

31,725

 

 

31,509

 

 

 

34,644

 

 

 

34,473

 

 

34,954

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

9,754

 

 

9,713

 

 

 

12,337

 

 

 

18,436

 

 

13,798

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

2,275

 

 

2,416

 

 

 

2,760

 

 

 

4,678

 

 

3,811

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

7,479

 

$

7,297

 

 

$

9,577

 

 

$

13,758

 

$

9,987

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.17

 

$

0.16

 

 

$

0.21

 

 

$

0.30

 

$

0.21

Diluted

 

$

0.17

 

$

0.16

 

 

$

0.21

 

 

$

0.30

 

$

0.21

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

43,063,507

 

 

44,857,224

 

 

 

45,321,491

 

 

 

45,830,737

 

 

46,980,830

Diluted

 

 

43,133,455

 

 

45,284,240

 

 

 

45,861,658

 

 

 

46,420,527

 

 

47,536,033

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income - Trend

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30,

 

 

 

 

 

(dollars in thousands, except share data)

 

2023

 

2022

 

$ Change

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

108,275

 

 

$

71,098

 

$

37,177

 

 

52.3

 

%

Interest on loans held for sale

 

 

612

 

 

 

595

 

 

17

 

 

2.9

 

 

Interest on securities

 

 

4,114

 

 

 

3,574

 

 

540

 

 

15.1

 

 

Other interest and dividend income

 

 

3,738

 

 

 

192

 

 

3,546

 

 

1846.9

 

 

Total interest and dividend income

 

 

116,739

 

 

 

75,459

 

 

41,280

 

 

54.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

35,975

 

 

 

3,640

 

 

32,335

 

 

888.3

 

 

Interest on FHLB and FRB borrowings

 

 

13,219

 

 

 

307

 

 

12,912

 

 

4205.9

 

 

Interest on subordinated debentures

 

 

1,047

 

 

 

1,047

 

 

 

 

0.0

 

 

Total interest expense

 

 

50,241

 

 

 

4,994

 

 

45,247

 

 

906.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

 

66,498

 

 

 

70,465

 

 

(3,967

)

 

(5.6

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

 

5,149

 

 

 

2,884

 

 

2,265

 

 

78.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income, after provision for credit losses

 

 

61,349

 

 

 

67,581

 

 

(6,232

)

 

(9.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

5,524

 

 

 

9,860

 

 

(4,336

)

 

(44.0

)

 

Changes in mortgage servicing rights fair value

 

 

(1,256

)

 

 

6,147

 

 

(7,403

)

 

(120.4

)

 

Other

 

 

4,528

 

 

 

5,170

 

 

(642

)

 

(12.4

)

 

Total mortgage banking income

 

 

8,796

 

 

 

21,177

 

 

(12,381

)

 

(58.5

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposit account fees

 

 

9,745

 

 

 

9,364

 

 

381

 

 

4.1

 

 

Income on retirement plan annuities

 

 

247

 

 

 

219

 

 

28

 

 

12.8

 

 

Bank-owned life insurance income

 

 

1,011

 

 

 

977

 

 

34

 

 

3.5

 

 

Other income

 

 

1,553

 

 

 

1,427

 

 

126

 

 

8.8

 

 

Total noninterest income

 

 

21,352

 

 

 

33,164

 

 

(11,812

)

 

(35.6

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

36,019

 

 

 

42,178

 

 

(6,159

)

 

(14.6

)

 

Occupancy and equipment

 

 

9,673

 

 

 

10,003

 

 

(330

)

 

(3.3

)

 

Data processing

 

 

4,749

 

 

 

4,500

 

 

249

 

 

5.5

 

 

Loan expense

 

 

730

 

 

 

863

 

 

(133

)

 

(15.4

)

 

Marketing

 

 

2,106

 

 

 

2,204

 

 

(98

)

 

(4.4

)

 

Professional fees

 

 

2,615

 

 

 

3,219

 

 

(604

)

 

(18.8

)

 

Deposit insurance

 

 

1,686

 

 

 

703

 

 

983

 

 

139.8

 

 

Other expenses

 

 

5,656

 

 

 

6,119

 

 

(463

)

 

(7.6

)

 

Total noninterest expenses

 

 

63,234

 

 

 

69,789

 

 

(6,555

)

 

(9.4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

19,467

 

 

 

30,956

 

 

(11,489

)

 

(37.1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

4,691

 

 

 

8,702

 

 

(4,011

)

 

(46.1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

14,776

 

 

$

22,254

 

$

(7,478

)

 

(33.6

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.34

 

 

$

0.47

 

 

 

 

 

 

Diluted

 

$

0.33

 

 

$

0.46

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

43,955,411

 

 

 

47,406,257

 

 

 

 

 

 

Diluted

 

 

44,203,893

 

 

 

48,110,863

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

 

June 30, 2023

 

March 31, 2023

 

June 30, 2022

 

 

 

Average

 

 

 

 

 

Average

 

 

 

 

 

Average

 

 

 

 

 

 

 

Outstanding

 

 

 

Yield/

 

Outstanding

 

 

 

Yield/

 

Outstanding

 

 

 

Yield/

 

 

 

Balance

 

Interest

 

Cost (8)

 

Balance

 

Interest

 

Cost (7)

 

Balance

 

Interest

 

Cost (7)

 

 

 

(dollars in thousands)

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

$

381,762

 

$

2,035

 

2.14

%

$

387,303

 

$

2,079

 

2.18

%

$

391,448

 

$

1,873

 

1.92

%

Other interest-earning assets

 

 

238,891

 

 

2,935

 

4.93

 

 

63,426

 

 

803

 

5.13

 

 

64,678

 

 

131

 

0.81

 

Loans held for sale

 

 

19,614

 

 

326

 

6.67

 

 

18,108

 

 

286

 

6.41

 

 

29,474

 

 

331

 

4.51

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans (2)(3)

 

 

2,938,292

 

 

38,842

 

5.30

 

 

2,901,464

 

 

36,837

 

5.15

 

 

2,384,630

 

 

25,295

 

4.25

 

Residential real estate loans (3)(4)

 

 

1,682,860

 

 

16,456

 

3.92

 

 

1,647,109

 

 

15,616

 

3.85

 

 

1,330,772

 

 

11,182

 

3.37

 

Consumer loans (3)

 

 

29,025

 

 

419

 

5.79

 

 

36,310

 

 

519

 

5.80

 

 

88,943

 

 

1,045

 

4.71

 

Total loans

 

 

4,650,177

 

 

55,717

 

4.81

 

 

4,584,883

 

 

52,972

 

4.69

 

 

3,804,345

 

 

37,522

 

3.96

 

Total interest-earning assets

 

 

5,290,444

 

 

61,013

 

4.63

 

 

5,053,720

 

 

56,140

 

4.51

 

 

4,289,945

 

 

39,857

 

3.73

 

Noninterest-earning assets

 

 

305,132

 

 

 

 

 

 

 

313,309

 

 

 

 

 

 

 

311,998

 

 

 

 

 

 

Total assets

 

$

5,595,576

 

 

 

 

 

 

$

5,367,029

 

 

 

 

 

 

$

4,601,943

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

$

1,421,622

 

 

6,165

 

1.74

 

$

1,459,392

 

 

5,445

 

1.51

 

$

1,266,912

 

 

626

 

0.20

 

NOW accounts

 

 

280,501

 

 

59

 

0.08

 

 

275,801

 

 

36

 

0.05

 

 

311,241

 

 

38

 

0.05

 

Money market accounts

 

 

802,373

 

 

6,256

 

3.13

 

 

824,694

 

 

5,238

 

2.58

 

 

885,305

 

 

635

 

0.30

 

Certificates of deposit

 

 

708,087

 

 

5,273

 

2.99

 

 

552,636

 

 

2,685

 

1.97

 

 

484,484

 

 

670

 

0.55

 

Brokered deposits

 

 

281,614

 

 

2,309

 

3.29

 

 

330,426

 

 

2,509

 

3.08

 

 

100,000

 

 

50

 

0.20

 

Total interest-bearing deposits

 

 

3,494,197

 

 

20,062

 

2.30

 

 

3,442,949

 

 

15,913

 

1.87

 

 

3,047,942

 

 

2,019

 

0.27

 

FHLB and FRB borrowings

 

 

666,345

 

 

8,114

 

4.88

 

 

448,096

 

 

5,105

 

4.62

 

 

34,763

 

 

119

 

1.36

 

Subordinated debentures

 

 

34,331

 

 

524

 

6.12

 

 

34,298

 

 

523

 

6.18

 

 

34,207

 

 

524

 

6.14

 

Total borrowings

 

 

700,676

 

 

8,638

 

4.94

 

 

482,394

 

 

5,628

 

4.73

 

 

68,970

 

 

643

 

3.74

 

Total interest-bearing liabilities

 

 

4,194,873

 

 

28,700

 

2.74

 

 

3,925,343

 

 

21,541

 

2.23

 

 

3,116,912

 

 

2,662

 

0.34

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

712,081

 

 

 

 

 

 

 

721,536

 

 

 

 

 

 

 

768,088

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

88,363

 

 

 

 

 

 

 

101,820

 

 

 

 

 

 

 

75,186

 

 

 

 

 

 

Total liabilities

 

 

4,995,317

 

 

 

 

 

 

 

4,748,699

 

 

 

 

 

 

 

3,960,186

 

 

 

 

 

 

Total stockholders' equity

 

 

600,259

 

 

 

 

 

 

 

618,330

 

 

 

 

 

 

 

641,757

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

5,595,576

 

 

 

 

 

 

$

5,367,029

 

 

 

 

 

 

$

4,601,943

 

 

 

 

 

 

Tax equivalent net interest income

 

 

 

 

 

32,313

 

 

 

 

 

 

 

34,599

 

 

 

 

 

 

 

37,195

 

 

 

Tax equivalent interest rate spread (5)

 

 

 

 

 

 

 

1.89

%

 

 

 

 

 

 

2.28

%

 

 

 

 

 

 

3.39

%

Less: tax equivalent adjustment

 

 

 

 

 

213

 

 

 

 

 

 

 

201

 

 

 

 

 

 

 

 

 

 

Net interest income as reported

 

 

 

 

$

32,100

 

 

 

 

 

 

$

34,398

 

 

 

 

 

 

$

37,195

 

 

 

Net interest-earning assets (6)

 

$

1,095,571

 

 

 

 

 

 

$

1,128,377

 

 

 

 

 

 

$

1,173,033

 

 

 

 

 

 

Net interest margin (7)

 

 

 

 

 

 

 

2.43

%

 

 

 

 

 

 

2.76

%

 

 

 

 

 

 

3.48

%

Tax equivalent effect

 

 

 

 

 

 

 

0.02

 

 

 

 

 

 

 

0.02

 

 

 

 

 

 

 

 

Net interest margin on a fully tax equivalent basis

 

 

 

 

 

 

 

2.45

%

 

 

 

 

 

 

2.78

%

 

 

 

 

 

 

3.48

%

Ratio of interest-earning assets to interest-bearing liabilities

 

 

126.12

%

 

 

 

 

 

 

128.75

%

 

 

 

 

 

 

137.63

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including demand deposits

 

$

4,206,278

 

$

20,062

 

 

 

$

4,164,485

 

$

15,913

 

 

 

$

3,816,030

 

$

2,019

 

 

 

Cost of total deposits

 

 

 

 

 

 

 

1.91

%

 

 

 

 

 

 

1.55

%

 

 

 

 

 

 

0.21

%

Total funding liabilities, including demand deposits

 

$

4,906,954

 

$

28,700

 

 

 

$

4,646,879

 

$

21,541

 

 

 

$

3,885,000

 

$

2,662

 

 

 

Cost of total funding liabilities

 

 

 

 

 

 

 

2.35

%

 

 

 

 

 

 

1.88

%

 

 

 

 

 

 

0.27

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

(2) Includes industrial revenue bonds for the six months ended June 30, 2023. Interest income from tax exempt loans is computed on a taxable equivalent basis using a rate of 21%. The yield on commercial loans before tax equivalent adjustment at June 30, 2023 was 5.20%.

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

(4) Includes the basis adjustments of certain loans included in fair value hedging relationships.

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

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

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

(8) Annualized.

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended

 

 

 

June 30, 2023

 

June 30, 2022

 

 

 

Average

 

 

 

 

 

Average

 

 

 

 

 

 

 

Outstanding

 

 

 

Yield/

 

Outstanding

 

 

 

Yield/

 

 

 

Balance

 

Interest

 

Cost (8)

 

Balance

 

Interest

 

Cost (8)

 

 

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

$

384,517

 

$

4,114

 

2.16

%

$

392,401

 

$

3,574

 

1.84

%

Other interest-earning assets

 

 

151,644

 

 

3,738

 

4.97

 

 

107,386

 

 

192

 

0.36

 

Loans held for sale

 

 

18,865

 

 

612

 

6.54

 

 

29,657

 

 

595

 

4.05

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans (2)(3)

 

 

2,919,980

 

 

75,679

 

5.23

 

 

2,338,245

 

 

47,390

 

4.09

 

Residential real estate loans (3)(4)

 

 

1,665,083

 

 

32,072

 

3.88

 

 

1,276,041

 

 

21,324

 

3.37

 

Consumer loans (3)

 

 

32,647

 

 

938

 

5.79

 

 

103,512

 

 

2,384

 

4.64

 

Total loans

 

 

4,617,710

 

 

108,689

 

4.75

 

 

3,717,798

 

 

71,098

 

3.86

 

Total interest-earning assets

 

 

5,172,736

 

 

117,153

 

4.57

 

 

4,247,242

 

 

75,459

 

3.58

 

Noninterest-earning assets

 

 

309,198

 

 

 

 

 

 

 

319,362

 

 

 

 

 

 

Total assets

 

$

5,481,934

 

 

 

 

 

 

$

4,566,604

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

$

1,440,403

 

 

11,610

 

1.63

 

$

1,216,578

 

 

992

 

0.16

 

NOW accounts

 

 

278,164

 

 

95

 

0.07

 

 

306,287

 

 

74

 

0.05

 

Money market accounts

 

 

813,472

 

 

11,494

 

2.85

 

 

872,122

 

 

938

 

0.22

 

Certificates of deposit

 

 

630,791

 

 

7,958

 

2.54

 

 

503,243

 

 

1,399

 

0.56

 

Brokered deposits

 

 

305,885

 

 

4,818

 

3.18

 

 

100,000

 

 

237

 

0.48

 

Total interest-bearing deposits

 

 

3,468,715

 

 

35,975

 

2.09

 

 

2,998,230

 

 

3,640

 

0.24

 

FHLB and FRB borrowings

 

 

557,823

 

 

13,219

 

4.78

 

 

45,176

 

 

307

 

1.37

 

Subordinated debentures

 

 

34,315

 

 

1,047

 

6.15

 

 

34,190

 

 

1,047

 

6.18

 

Total borrowings

 

 

592,138

 

 

14,266

 

4.86

 

 

79,366

 

 

1,354

 

3.44

 

Total interest-bearing liabilities

 

 

4,060,853

 

 

50,241

 

2.49

 

 

3,077,596

 

 

4,994

 

0.33

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

716,782

 

 

 

 

 

 

 

753,414

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

95,054

 

 

 

 

 

 

 

80,943

 

 

 

 

 

 

Total liabilities

 

 

4,872,689

 

 

 

 

 

 

 

3,911,953

 

 

 

 

 

 

Total stockholders' equity

 

 

609,245

 

 

 

 

 

 

 

654,651

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

5,481,934

 

 

 

 

 

 

$

4,566,604

 

 

 

 

 

 

Tax equivalent net interest income

 

 

 

 

 

66,912

 

 

 

 

 

 

 

70,465

 

 

 

Tax equivalent interest rate spread (5)

 

 

 

 

 

 

 

2.08

%

 

 

 

 

 

 

3.25

%

Less: tax equivalent adjustment

 

 

 

 

 

414

 

 

 

 

 

 

 

 

 

 

Net interest income as reported

 

 

 

 

$

66,498

 

 

 

 

 

 

$

70,465

 

 

 

Net interest-earning assets (6)

 

$

1,111,883

 

 

 

 

 

 

$

1,169,646

 

 

 

 

 

 

Net interest margin (7)

 

 

 

 

 

 

 

2.59

%

 

 

 

 

 

 

3.35

%

Tax equivalent effect

 

 

 

 

 

 

 

0.02

 

 

 

 

 

 

 

 

Net interest margin on a fully tax equivalent basis

 

 

 

 

 

 

 

2.61

%

 

 

 

 

 

 

3.35

%

Ratio of interest-earning assets to interest-bearing liabilities

 

 

127.38

%

 

 

 

 

 

 

138.01

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including demand deposits

 

$

4,185,497

 

$

35,975

 

 

 

$

3,751,644

 

$

3,640

 

 

 

Cost of total deposits

 

 

 

 

 

 

 

1.73

%

 

 

 

 

 

 

0.20

%

Total funding liabilities, including demand deposits

 

$

4,777,635

 

$

50,241

 

 

 

$

3,831,010

 

$

4,994

 

 

 

Cost of total funding liabilities

 

 

 

 

 

 

 

2.12

%

 

 

 

 

 

 

0.26

%

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

(2) Includes industrial revenue bonds for the six months ended June 30, 2023. Interest income from tax exempt loans is computed on a taxable equivalent basis using a rate of 21%. The yield on commercial loans before tax equivalent adjustment at June 30, 2023 was 5.20%.

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

(4) Includes the basis adjustments of certain loans included in fair value hedging relationships.

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

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

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

(8) Annualized.

HarborOne Bancorp, Inc.

Average Balances and Yield Trend

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Balances - Trend - Quarters Ended

 

 

 

June 30, 2023

 

March 31, 2023

 

December 31, 2022

 

September 30, 2022

 

June 30, 2022

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

$

381,762

 

$

387,303

 

$

388,247

 

$

390,577

 

$

391,448

 

Other interest-earning assets

 

 

238,891

 

 

63,426

 

 

42,640

 

 

27,723

 

 

64,678

 

Loans held for sale

 

 

19,614

 

 

18,108

 

 

22,350

 

 

28,046

 

 

29,474

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans (2)(3)

 

 

2,938,292

 

 

2,901,464

 

 

2,770,667

 

 

2,522,359

 

 

2,384,630

 

Residential real estate loans (3)(4)

 

 

1,682,860

 

 

1,647,109

 

 

1,566,389

 

 

1,470,305

 

 

1,330,772

 

Consumer loans (3)

 

 

29,025

 

 

36,310

 

 

45,629

 

 

63,220

 

 

88,943

 

Total loans

 

 

4,650,177

 

 

4,584,883

 

 

4,382,685

 

 

4,055,884

 

 

3,804,345

 

Total interest-earning assets

 

 

5,290,444

 

 

5,053,720

 

 

4,835,922

 

 

4,502,230

 

 

4,289,945

 

Noninterest-earning assets

 

 

305,132

 

 

313,309

 

 

311,372

 

 

308,734

 

 

311,998

 

Total assets

 

$

5,595,576

 

$

5,367,029

 

$

5,147,294

 

$

4,810,964

 

$

4,601,943

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

$

1,421,622

 

$

1,459,392

 

$

1,408,493

 

$

1,293,598

 

$

1,266,912

 

NOW accounts

 

 

280,501

 

 

275,801

 

 

291,890

 

 

305,777

 

 

311,241

 

Money market accounts

 

 

802,373

 

 

824,694

 

 

878,609

 

 

893,452

 

 

885,305

 

Certificates of deposit

 

 

708,087

 

 

552,636

 

 

487,121

 

 

486,923

 

 

484,484

 

Brokered deposits

 

 

281,614

 

 

330,426

 

 

148,460

 

 

102,875

 

 

100,000

 

Total interest-bearing deposits

 

 

3,494,197

 

 

3,442,949

 

 

3,214,573

 

 

3,082,625

 

 

3,047,942

 

FHLB and FRB borrowings

 

 

666,345

 

 

448,096

 

 

392,508

 

 

196,036

 

 

34,763

 

Subordinated debentures

 

 

34,331

 

 

34,298

 

 

34,268

 

 

34,237

 

 

34,207

 

Total borrowings

 

 

700,676

 

 

482,394

 

 

426,776

 

 

230,273

 

 

68,970

 

Total interest-bearing liabilities

 

 

4,194,873

 

 

3,925,343

 

 

3,641,349

 

 

3,312,898

 

 

3,116,912

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

712,081

 

 

721,536

 

 

788,572

 

 

789,214

 

 

768,088

 

Other noninterest-bearing liabilities

 

 

88,363

 

 

101,820

 

 

101,621

 

 

80,304

 

 

75,186

 

Total liabilities

 

 

4,995,317

 

 

4,748,699

 

 

4,531,542

 

 

4,182,416

 

 

3,960,186

 

Total stockholders' equity

 

 

600,259

 

 

618,330

 

 

615,752

 

 

628,548

 

 

641,757

 

Total liabilities and stockholders' equity

 

$

5,595,576

 

$

5,367,029

 

$

5,147,294

 

$

4,810,964

 

$

4,601,943

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized Yield Trend - Quarters Ended

 

 

 

June 30, 2023

 

March 31, 2023

 

December 31, 2022

 

September 30, 2022

 

June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

 

2.14

%

 

2.18

%

 

2.09

%

 

2.00

%

 

1.92

%

Other interest-earning assets

 

 

4.93

%

 

5.13

%

 

3.34

%

 

2.05

%

 

0.81

%

Loans held for sale

 

 

6.67

%

 

6.41

%

 

5.93

%

 

5.33

%

 

4.51

%

Commercial loans (2)(3)

 

 

5.30

%

 

5.15

%

 

4.92

%

 

4.45

%

 

4.25

%

Residential real estate loans (3)(4)

 

 

3.92

%

 

3.85

%

 

3.64

%

 

3.50

%

 

3.37

%

Consumer loans (3)

 

 

5.79

%

 

5.80

%

 

5.50

%

 

4.99

%

 

4.71

%

Total loans

 

 

4.81

%

 

4.69

%

 

4.47

%

 

4.11

%

 

3.96

%

Total interest-earning assets

 

 

4.63

%

 

4.51

%

 

4.27

%

 

3.93

%

 

3.73

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

 

1.74

%

 

1.51

%

 

1.01

%

 

0.37

%

 

0.20

%

NOW accounts

 

 

0.08

%

 

0.05

%

 

0.05

%

 

0.05

%

 

0.05

%

Money market accounts

 

 

3.13

%

 

2.58

%

 

1.50

%

 

0.61

%

 

0.30

%

Certificates of deposit

 

 

2.99

%

 

1.97

%

 

0.86

%

 

0.64

%

 

0.55

%

Brokered deposits

 

 

3.29

%

 

3.08

%

 

1.32

%

 

0.27

%

 

0.20

%

Total interest-bearing deposits

 

 

2.30

%

 

1.87

%

 

1.05

%

 

0.45

%

 

0.27

%

FHLB and FRB borrowings

 

 

4.88

%

 

4.62

%

 

3.74

%

 

2.45

%

 

1.36

%

Subordinated debentures

 

 

6.12

%

 

6.18

%

 

6.07

%

 

6.07

%

 

6.14

%

Total borrowings

 

 

4.94

%

 

4.73

%

 

3.93

%

 

2.99

%

 

3.74

%

Total interest-bearing liabilities

 

 

2.74

%

 

2.23

%

 

1.39

%

 

0.63

%

 

0.34

%

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

(2) Includes industrial revenue bonds for the quarters ended March 31, 2023 and December 31, 2022. Interest income from tax exempt loans is computed on a taxable equivalent basis using a rate of 21% for the quarters presented. The yield on commercial loans before tax equivalent adjustment at March 31, 2023 and December 31, 2022 was 5.12% and 4.90%, respectively.

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

(4) Includes the basis adjustments of certain loans included in fair value hedging relationships.

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

Performance Ratios (annualized):

 

2023

 

2023

 

2022

 

2022

 

2022

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (ROAA)

 

 

0.54

%

 

0.54

%

 

0.74

%

 

1.14

%

 

0.87

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average equity (ROAE)

 

 

4.98

%

 

4.72

%

 

6.22

%

 

8.76

%

 

6.22

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest expense

 

$

31,725

 

$

31,509

 

$

34,644

 

$

34,473

 

$

34,954

 

Less: Amortization of other intangible assets

 

 

189

 

 

189

 

 

189

 

 

235

 

 

235

 

Total adjusted noninterest expense

 

$

31,536

 

$

31,320

 

$

34,455

 

$

34,238

 

$

34,719

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

$

32,100

 

$

34,398

 

$

39,189

 

$

39,332

 

$

37,195

 

Total noninterest income

 

 

12,662

 

 

8,690

 

 

9,900

 

 

14,245

 

 

14,103

 

Total revenue

 

$

44,762

 

$

43,088

 

$

49,089

 

$

53,577

 

$

51,298

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (1)

 

 

70.45

%

 

72.69

%

 

70.19

%

 

63.90

%

 

67.68

%

(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

 

2023

 

2023

 

2022

 

2022

 

2022

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total nonperforming assets

 

$

20,210

 

$

12,300

 

 

$

14,840

 

$

23,367

 

 

$

24,441

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

 

0.36

%

 

0.22

 

%

 

0.28

%

 

0.47

 

%

 

0.52

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses on loans to total loans

 

 

1.02

%

 

1.02

 

%

 

0.99

%

 

1.06

 

%

 

1.11

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs (recoveries)

 

$

2,671

 

$

(11

)

 

$

2,067

 

$

(799

)

 

$

(504

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized net charge-offs (recoveries)/average loans

 

 

0.23

%

 

 

%

 

0.19

%

 

(0.08

)

%

 

(0.05

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses on loans to nonperforming loans

 

 

236.62

%

 

383.50

 

%

 

305.93

%

 

191.60

 

%

 

178.41

 

%

 

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

Capital and Share Related

 

2023

 

2023

 

2022

 

2022

 

2022

 

(dollars in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock outstanding

 

 

46,575,478

 

 

47,063,087

 

 

48,961,452

 

 

49,202,660

 

 

49,989,007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

12.79

 

$

12.74

 

$

12.60

 

$

12.43

 

$

12.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

$

595,532

 

$

599,794

 

$

616,976

 

$

611,370

 

$

624,478

 

Less: Goodwill

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

Less: Other intangible assets (1)

 

 

1,893

 

 

2,082

 

 

2,272

 

 

2,461

 

 

2,695

 

Tangible common equity

 

$

523,837

 

$

527,910

 

$

544,902

 

$

539,107

 

$

551,981

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible book value per share (2)

 

$

11.25

 

$

11.22

 

$

11.13

 

$

10.96

 

$

11.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

5,659,254

 

$

5,572,858

 

$

5,359,545

 

$

4,987,643

 

$

4,704,044

 

Less: Goodwill

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

Less: Other intangible assets

 

 

1,893

 

 

2,082

 

 

2,272

 

 

2,461

 

 

2,695

 

Tangible assets

 

$

5,587,559

 

$

5,500,974

 

$

5,287,471

 

$

4,915,380

 

$

4,631,547

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity / tangible assets (3)

 

 

9.38

%

 

9.60

%

 

10.31

%

 

10.97

%

 

11.92

%

(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,

 

 

2023

 

2023

 

2022

 

2023

 

2023

 

2022

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

$

120

 

$

327

 

 

$

411

 

$

32,490

 

 

$

34,562

 

 

$

37,246

 

Provision for credit losses

 

 

 

 

 

 

 

 

 

3,283

 

 

 

1,866

 

 

 

2,546

 

Net interest and dividend income, after provision for credit losses

 

 

120

 

 

327

 

 

 

411

 

 

29,207

 

 

 

32,696

 

 

 

34,700

 

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

3,300

 

 

2,224

 

 

 

4,538

 

 

 

 

 

 

 

 

 

Intersegment gain (loss)

 

 

90

 

 

454

 

 

 

1,097

 

 

(358

)

 

 

(348

)

 

 

(1,095

)

Changes in mortgage servicing rights fair value

 

 

407

 

 

(1,556

)

 

 

735

 

 

29

 

 

 

(136

)

 

 

127

 

Other

 

 

2,117

 

 

2,015

 

 

 

2,393

 

 

195

 

 

 

201

 

 

 

219

 

Total mortgage banking income (loss)

 

 

5,914

 

 

3,137

 

 

 

8,763

 

 

(134

)

 

 

(283

)

 

 

(749

)

Other noninterest income

 

 

 

 

 

 

 

7

 

 

6,614

 

 

 

5,942

 

 

 

6,084

 

Total noninterest income

 

 

5,914

 

 

3,137

 

 

 

8,770

 

 

6,480

 

 

 

5,659

 

 

 

5,335

 

Noninterest expense

 

 

5,493

 

 

5,322

 

 

 

7,242

 

 

26,193

 

 

 

26,190

 

 

 

27,131

 

Income (loss) before income taxes

 

 

541

 

 

(1,858

)

 

 

1,939

 

 

9,494

 

 

 

12,165

 

 

 

12,904

 

Provision (benefit) for income taxes

 

 

232

 

 

(565

)

 

 

549

 

 

2,193

 

 

 

3,115

 

 

 

3,550

 

Net income (loss)

 

$

309

 

$

(1,293

)

 

$

1,390

 

$

7,301

 

 

$

9,050

 

 

$

9,354

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HarborOne Mortgage

 

HarborOne Bank

 

 

For the Six Months Ended

 

For the Six Months Ended

 

 

June 30,

 

June 30,

 

June 30,

 

June 30,

 

 

2023

 

2022

 

2023

 

2022

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

$

447

 

 

$

761

 

$

67,052

 

 

$

70,670

 

Provision for credit losses

 

 

 

 

 

 

 

5,149

 

 

 

2,884

 

Net interest and dividend income, after provision for credit losses

 

 

447

 

 

 

761

 

 

61,903

 

 

 

67,786

 

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

5,524

 

 

 

9,860

 

 

 

 

 

 

Intersegment gain (loss)

 

 

544

 

 

 

1,934

 

 

(706

)

 

 

(1,703

)

Changes in mortgage servicing rights fair value

 

 

(1,149

)

 

 

5,430

 

 

(107

)

 

 

717

 

Other

 

 

4,132

 

 

 

4,718

 

 

396

 

 

 

452

 

Total mortgage banking income (loss)

 

 

9,051

 

 

 

21,942

 

 

(417

)

 

 

(534

)

Other noninterest income

 

 

 

 

 

16

 

 

12,556

 

 

 

11,971

 

Total noninterest income

 

 

9,051

 

 

 

21,958

 

 

12,139

 

 

 

11,437

 

Noninterest expense

 

 

10,815

 

 

 

15,003

 

 

52,383

 

 

 

53,956

 

(Loss) income before income taxes

 

 

(1,317

)

 

 

7,716

 

 

21,659

 

 

 

25,267

 

(Benefit) provision for income taxes

 

 

(333

)

 

 

2,090

 

 

5,308

 

 

 

7,107

 

Net (loss) income

 

$

(984

)

 

$

5,626

 

$

16,351

 

 

$

18,160

 

Category: Earnings Release

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