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HarborOne Bancorp, Inc. Announces 2022 Fourth Quarter Earnings

HarborOne Bancorp, Inc. (the “Company” or “HarborOne”) (NASDAQ: HONE), the holding company for HarborOne Bank (the “Bank”), announced net income of $45.6 million, or $0.97 per diluted share, for the year ended December 31, 2022, a decrease of $12.9 million, or 22.1%, compared to net income of $58.5 million, or $1.14 per diluted share, for the year ended December 31, 2021. For the fourth quarter of 2022, net income was $9.6 million, or $0.21 per diluted share, compared to $13.8 million, or $0.30 per diluted share, for the preceding quarter and $12.6 million, or $0.25 per diluted share, for the quarter ended December 31, 2021.

Selected Financial Highlights:

  • Net interest income up $17.6 million, or 13.4% year over year, driven by higher rates and loan growth.
  • Strong asset quality; nonperforming loans to total loans was 0.32% compared to 1.00% last year.
  • Robust loan growth of $941.9 million, or 26.1%, year over year.
  • Total deposit growth of $506.8 million, or 13.8% and core deposit growth of $335.4 million, or 11.0%.
  • Despite a reduction in mortgage banking income, HarborOne Mortgage posted positive earnings in 2022.
  • Continued share repurchase program.

“I am very proud of our team’s 2022 accomplishments. Despite a challenging rate environment, our focused customer engagement produced loan growth of 26%, deposit growth of 14%, and net interest income growth of 13% ; all while reducing expenses by 13%,” said Joseph F. Casey, President and Chief Executive Officer. He added: “Our mortgage team, in particular, faced the rapidly rising mortgage rates and dramatic reduction in refinance volume head on, implementing significant cost reductions in order to maintain profitability for the year.”

Net Interest Income

The Company’s net interest and dividend income was $39.2 million for the quarter ended December 31, 2022, compared to $39.3 million for the quarter ended September 30, 2022, and up $5.2 million, or 15.3%, from $34.0 million for the quarter ended December 31, 2021. The tax equivalent interest rate spread and net interest margin were 2.88% and 3.23%, respectively, for the quarter ended December 31, 2022, compared to 3.30% and 3.47%, respectively, for the quarter ended September 30, 2022, and 3.10% and 3.19%, respectively, for the quarter ended December 31, 2021. On a linked-quarter basis, the decreases in net interest and dividend income, tax equivalent interest rate spread, and net interest margin primarily reflect higher rates on deposits partially offset by increased loan balances and yields. The cost of funds was 114 basis points for the quarter ended December 31, 2022, compared to 51 basis points for the preceding quarter.

The $7.4 million increase in total interest and dividend income on a linked-quarter basis reflected a 34-basis-point increase in the yield on interest-earning assets and a $333.7 million increase in average earning assets. The yield on loans increased 36 basis points, from 4.11% to 4.47%. The yield on investments increased 9 basis points, from 2.00% to 2.09%.

The increase in net interest and dividend income from the prior year quarter reflects an increase of $15.6 million, or 42.8%, in total interest and dividend income and an increase of $10.4 million, or 437.4%, 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 86 basis points, while the average balance increased $610.8 million, and the cost of interest-bearing liabilities increased 108 basis points, while the average balance increased $620.0 million.

Noninterest Income

Total noninterest income decreased $4.3, or 30.5%, to $9.9 million for the quarter ended December 31, 2022, from $14.2 million for the quarter ended September 30, 2022. Mortgage loan closings for the quarter ended December 31, 2022 were $222.4 million with a gain on loan sales of $2.3 million, compared to $250.5 million in mortgage closings and $3.8 million in gain on sales for the preceding quarter. Deposit account fees were $5.0 million for the quarter ended December 31, 2022, compared to $4.9 million for the quarter ended September 30, 2022. Other income for the quarter ended December 31, 2022 increased $1.6 million, primarily reflecting a $1.2 million increase in swap fee income.

The decrease in the fair value of mortgage servicing rights for the three months ended December 31, 2022 was $2.1 million, as compared to an increase of $2.6 million in the fair value of mortgage servicing rights for the three months ended September 30, 2022. The valuation was negatively impacted by key benchmark mortgage rates used in the valuation that declined, as well as an increase in the discount rate to reflect secondary market servicing conditions. The impact of principal payments on the underlying mortgages on the mortgage servicing rights was $570,000 and $747,000 for the quarters ended December 31, 2022 and September 30, 2022, respectively.

Total noninterest income decreased $9.3 million, or 48.3%, compared to the quarter ended December 31, 2021, primarily due to a $11.2 million, or 84.9%, decrease in mortgage banking income, driven by the decrease in loan closings and narrowing gain-on-sale margins.

Noninterest Expense

Total noninterest expenses were $34.6 million for the quarter ended December 31, 2022, an increase of $171,000, or 0.5%, from the quarter ended September 30, 2022. Other expenses increased $1.1 million, or 31.9% for the quarter ended December 31 2022, primarily as a result of a legal settlement. In the fourth quarter of 2022, the Company reached an agreement-in-principle to settle a purported class action lawsuit concerning overdraft fees on re-presented transactions. The matter was filed in the Massachusetts Superior Court in June 2022, and it is expected to be refiled in federal court for final settlement purposes, where the settlement remains subject to court approval. As of December 31, 2022, the Company estimated the settlement expense, including related costs, to be $950,000. The increase was offset by an $887,000, or 4.2%, decrease in compensation expense, primarily reflecting a $715,000 decrease in salaries and mortgage origination commissions.

Total noninterest expenses decreased $3.5 million, or 9.3%, from the quarter ended December 30, 2021. Compensation and benefits decreased $4.5 million and loan expenses decreased $563,000, consistent with the decrease in residential mortgage loan closings and corresponding decrease in mortgage origination commissions. The decrease in compensation and benefits also reflects the impact of proactive cost reduction measures taken at HarborOne Mortgage, LLC beginning in the second quarter of 2021.

Income Tax Provision

The effective tax rate for the quarter and year ended December 31, 2022 was 22.4% and 26.1%, respectively, compared to 23.2% and 27.3% for the quarter and year ended December 31, 2021. The 2022 effective tax rate was impacted by a tax benefit recorded for Industrial Revenue Bonds and a reserve release upon the expiration of the statute of limitations.

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 $14.8 million at December 31, 2022, compared to $23.4 million at September 30, 2022 and $36.2 million at December 31, 2021. Nonperforming assets as a percentage of total assets were 0.28% at December 31, 2022, 0.47% at September 30, 2022, and 0.79% at December 31, 2021. During 2022, two large commercial credits were resolved, reducing nonperforming assets significantly.

The provision for funded loan credit losses for the quarter and year ended December 31, 2022 was $2.7 million and $4.7 million, respectively, and reflects provisioning for loan growth partially offset by a reduction in pandemic-related uncertainty. Net charge-offs totaled $2.1 million, or 0.19%, and $3.5 million, or 0.09%, of average loans outstanding on an annualized basis, for the quarter and year ended December 31, 2022, respectively. Net recoveries totaled $799,000, or 0.08% of average loans outstanding on an annualized basis, for the quarter ended September 30, 2022, and net charge-offs totaled $1.2 million, or 0.13% of average loans outstanding on an annualized basis, for the quarter ended December 31, 2021.

The ACL was $45.2 million, or 0.99% of total loans, at December 31, 2022, compared to $44.6 million, or 1.06% of total loans, at September 30, 2022 and an allowance for loss under the incurred loss model of $45.4 million, or 1.26% of total loans, at December 31, 2021. The ACL on unfunded commitments, included in other liabilities on the unaudited Consolidated Balance Sheets, amounted to $4.9 million at December 31, 2022 as compared to $5.5 million at September 30, 2022, reflecting a negative provision of $575,000 for the quarter ended December 31, 2022. For the year ended December 31, 2022, the provision for unfunded commitments was $966,000, and there was no ACL on unfunded commitments at December 31, 2021. The decrease from the prior quarter primarily reflects the movement of commercial loans from construction loans to permanent loans.

We have not experienced any significant negative trends in the at-risk sectors previously 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 loans secured by business-oriented hotels, non-anchored retail space and metro office space. As of December 31, 2022, business-oriented hotels loans included 12 loans with a total outstanding balance of $86.0 million, non-anchored retail space loans included 28 loans with a total outstanding balance of $40.5 million, and metro office space loans included two loans with a total outstanding balance of $14.9 million. As of December 31, 2022 there was one business-oriented hotel credit with a carrying value of $2.1 million that was rated substandard and on nonaccrual. This credit was provided a principal deferral that resulted in a troubled debt restructuring designation in the third quarter. The other loans in these groups were performing in accordance with their terms.

Balance Sheet

Total assets increased $371.9 million, or 7.5%, to $5.36 billion at December 31, 2022, from $4.99 billion at September 30, 2022. The increase primarily reflects an increase of $352.3 million in loans. Securities available for sale were negatively impacted by unrealized losses of $68.3 million as of December 31, 2022, as compared to $70.4 million of unrealized losses as of September 30, 2022 and $3.6 million of unrealized losses as of December 31, 2021.

Loans increased $352.3 million, or 8.4%, to $4.55 billion at December 31, 2022, from $4.20 billion at September 30, 2022. The increase in loans for the three months ended December 31, 2022 was primarily due to increases in commercial real estate loans of $208.4 million, commercial and industrial loans of $27.2 million, commercial construction loans of $14.2 million, and residential real estate loans of $113.5 million, partially offset by decreases in consumer loans of $11.0 million.

Total deposits were $4.19 billion at December 31, 2022 and $3.88 billion at September 30, 2022. Compared to the prior quarter, non-certificate accounts increased $106.7 million, and term certificate accounts increased $199.7 million. FHLB borrowings increased $55.0 million to $400.7 million at December 31, 2022 from $345.7 million at September 30, 2022. At December 31, 2022, FHLB borrowings were primarily short-term borrowings.

Total stockholders’ equity was $617.0 million at December 31, 2022, compared to $611.4 million at September 30, 2022 and $679.3 million at December 31, 2021. Stockholders’ equity increased 0.9% when compared to the prior quarter, as earnings were offset by share repurchases. The Company repurchased 349,738 shares at an average price of $13.63 during the three months ended December 31, 2022 and announced a fifth share repurchase program on September 21, 2022 to commence following the completion of the share repurchase program announced on April 12, 2022. The tangible-common-equity-to-tangible-assets ratio was 10.31% at December 31, 2022, 10.97% at September 30, 2022, and 13.53% at December 31, 2021. At December 31, 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. HarborOne 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)

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

(in thousands)

 

2022

 

2022

 

2022

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

39,712

 

 

$

39,910

 

 

$

35,843

 

 

$

41,862

 

 

$

35,549

 

Short-term investments

 

 

58,305

 

 

 

46,044

 

 

 

48,495

 

 

 

97,870

 

 

 

159,170

 

Total cash and cash equivalents

 

 

98,017

 

 

 

85,954

 

 

 

84,338

 

 

 

139,732

 

 

 

194,719

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale, at fair value

 

 

301,149

 

 

 

304,852

 

 

 

334,398

 

 

 

361,529

 

 

 

394,036

 

Securities held to maturity, at amortized cost

 

 

19,949

 

 

 

15,000

 

 

 

10,000

 

 

 

 

 

 

 

Federal Home Loan Bank stock, at cost

 

 

20,071

 

 

 

15,973

 

 

 

5,625

 

 

 

5,931

 

 

 

5,931

 

Asset held for sale

 

 

 

 

 

 

 

 

 

 

 

678

 

 

 

881

 

Loans held for sale, at fair value

 

 

18,544

 

 

 

18,805

 

 

 

31,679

 

 

 

25,690

 

 

 

45,642

 

Loans:

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

 

2,250,344

 

 

 

2,041,905

 

 

 

1,847,619

 

 

 

1,816,484

 

 

 

1,699,877

 

Commercial construction

 

 

199,311

 

 

 

185,062

 

 

 

158,762

 

 

 

154,059

 

 

 

136,563

 

Commercial and industrial

 

 

424,275

 

 

 

397,112

 

 

 

407,182

 

 

 

410,787

 

 

 

421,608

 

Total commercial loans

 

 

2,873,930

 

 

 

2,624,079

 

 

 

2,413,563

 

 

 

2,381,330

 

 

 

2,258,048

 

Residential real estate

 

 

1,634,319

 

 

 

1,520,809

 

 

 

1,423,074

 

 

 

1,252,920

 

 

 

1,217,980

 

Consumer

 

 

41,421

 

 

 

52,466

 

 

 

75,312

 

 

 

103,100

 

 

 

131,705

 

Loans

 

 

4,549,670

 

 

 

4,197,354

 

 

 

3,911,949

 

 

 

3,737,350

 

 

 

3,607,733

 

Less: Allowance for credit losses on loans

 

 

(45,236

)

 

 

(44,621

)

 

 

(43,560

)

 

 

(41,765

)

 

 

(45,377

)

Net loans

 

 

4,504,434

 

 

 

4,152,733

 

 

 

3,868,389

 

 

 

3,695,585

 

 

 

3,562,356

 

Mortgage servicing rights, at fair value

 

 

48,138

 

 

 

49,861

 

 

 

47,130

 

 

 

45,043

 

 

 

38,268

 

Goodwill

 

 

69,802

 

 

 

69,802

 

 

 

69,802

 

 

 

69,802

 

 

 

69,802

 

Other intangible assets

 

 

2,272

 

 

 

2,461

 

 

 

2,695

 

 

 

2,930

 

 

 

3,164

 

Other assets

 

 

277,169

 

 

 

272,202

 

 

 

249,988

 

 

 

244,405

 

 

 

238,606

 

Total assets

 

$

5,359,545

 

 

$

4,987,643

 

 

$

4,704,044

 

 

$

4,591,325

 

 

$

4,553,405

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

Demand deposit accounts

 

$

762,576

 

 

$

795,945

 

 

$

775,154

 

 

$

771,172

 

 

$

743,051

 

NOW accounts

 

 

297,692

 

 

 

308,191

 

 

 

316,839

 

 

 

310,090

 

 

 

313,733

 

Regular savings and club accounts

 

 

1,468,172

 

 

 

1,289,825

 

 

 

1,282,913

 

 

 

1,218,656

 

 

 

1,138,979

 

Money market deposit accounts

 

 

861,704

 

 

 

889,517

 

 

 

885,673

 

 

 

864,316

 

 

 

858,970

 

Term certificate accounts

 

 

799,355

 

 

 

599,632

 

 

 

587,354

 

 

 

597,746

 

 

 

627,916

 

Total deposits

 

 

4,189,499

 

 

 

3,883,110

 

 

 

3,847,933

 

 

 

3,761,980

 

 

 

3,682,649

 

Short-term borrowed funds

 

 

385,000

 

 

 

330,000

 

 

 

90,000

 

 

 

 

 

 

 

Long-term borrowed funds

 

 

15,675

 

 

 

15,684

 

 

 

15,693

 

 

 

55,702

 

 

 

55,711

 

Subordinated debt

 

 

34,285

 

 

 

34,254

 

 

 

34,222

 

 

 

34,191

 

 

 

34,159

 

Other liabilities and accrued expenses

 

 

118,110

 

 

 

113,225

 

 

 

91,718

 

 

 

90,387

 

 

 

101,625

 

Total liabilities

 

 

4,742,569

 

 

 

4,376,273

 

 

 

4,079,566

 

 

 

3,942,260

 

 

 

3,874,144

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

596

 

 

 

593

 

 

 

593

 

 

 

591

 

 

 

585

 

Additional paid-in capital

 

 

483,031

 

 

 

480,617

 

 

 

479,519

 

 

 

477,302

 

 

 

469,934

 

Unearned compensation - ESOP

 

 

(27,623

)

 

 

(28,083

)

 

 

(28,542

)

 

 

(29,002

)

 

 

(29,461

)

Retained earnings

 

 

356,438

 

 

 

350,049

 

 

 

339,471

 

 

 

332,734

 

 

 

325,699

 

Treasury stock

 

 

(148,384

)

 

 

(143,125

)

 

 

(132,296

)

 

 

(113,513

)

 

 

(85,859

)

Accumulated other comprehensive loss

 

 

(47,082

)

 

 

(48,681

)

 

 

(34,267

)

 

 

(19,047

)

 

 

(1,637

)

Total stockholders' equity

 

 

616,976

 

 

 

611,370

 

 

 

624,478

 

 

 

649,065

 

 

 

679,261

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

5,359,545

 

 

$

4,987,643

 

 

$

4,704,044

 

 

$

4,591,325

 

 

$

4,553,405

 

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income - Trend

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

(in thousands, except share data)

 

2022

 

2022

 

2022

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

49,177

 

 

$

42,065

 

$

37,522

 

$

33,576

 

$

34,177

 

Interest on loans held for sale

 

 

334

 

 

 

377

 

 

331

 

 

264

 

 

501

 

Interest on securities

 

 

2,045

 

 

 

1,971

 

 

1,873

 

 

1,701

 

 

1,541

 

Other interest and dividend income

 

 

359

 

 

 

143

 

 

131

 

 

61

 

 

134

 

Total interest and dividend income

 

 

51,915

 

 

 

44,556

 

 

39,857

 

 

35,602

 

 

36,353

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

8,499

 

 

 

3,491

 

 

2,019

 

 

1,621

 

 

1,651

 

Interest on FHLB borrowings

 

 

3,703

 

 

 

1,209

 

 

119

 

 

188

 

 

193

 

Interest on subordinated debentures

 

 

524

 

 

 

524

 

 

524

 

 

523

 

 

524

 

Total interest expense

 

 

12,726

 

 

 

5,224

 

 

2,662

 

 

2,332

 

 

2,368

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

 

39,189

 

 

 

39,332

 

 

37,195

 

 

33,270

 

 

33,985

 

 

 

 

 

 

 

 

 

 

 

 

Provision (benefit) for credit losses

 

 

2,108

 

 

 

668

 

 

2,546

 

 

338

 

 

(1,436

)

 

 

 

 

 

 

 

 

 

 

 

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

 

 

37,081

 

 

 

38,664

 

 

34,649

 

 

32,932

 

 

35,421

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

2,301

 

 

 

3,809

 

 

4,538

 

 

5,322

 

 

10,063

 

Changes in mortgage servicing rights fair value

 

 

(2,631

)

 

 

1,816

 

 

862

 

 

5,285

 

 

(245

)

Other

 

 

2,325

 

 

 

2,453

 

 

2,612

 

 

2,558

 

 

3,359

 

Total mortgage banking income

 

 

1,995

 

 

 

8,078

 

 

8,012

 

 

13,165

 

 

13,177

 

 

 

 

 

 

 

 

 

 

 

 

Deposit account fees

 

 

5,031

 

 

 

4,870

 

 

4,892

 

 

4,472

 

 

4,783

 

Income on retirement plan annuities

 

 

118

 

 

 

119

 

 

112

 

 

107

 

 

109

 

Gain on sale and call of securities, net

 

 

 

 

 

 

 

 

 

 

 

 

Bank-owned life insurance income

 

 

501

 

 

 

503

 

 

494

 

 

483

 

 

506

 

Other income

 

 

2,255

 

 

 

675

 

 

593

 

 

834

 

 

589

 

Total noninterest income

 

 

9,900

 

 

 

14,245

 

 

14,103

 

 

19,061

 

 

19,164

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expenses:

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

20,104

 

 

 

20,991

 

 

21,455

 

 

20,723

 

 

24,564

 

Occupancy and equipment

 

 

4,935

 

 

 

4,829

 

 

4,575

 

 

5,428

 

 

4,923

 

Data processing

 

 

2,359

 

 

 

2,311

 

 

2,259

 

 

2,241

 

 

2,244

 

Loan expense

 

 

169

 

 

 

355

 

 

385

 

 

478

 

 

732

 

Marketing

 

 

862

 

 

 

850

 

 

986

 

 

1,218

 

 

1,120

 

Professional fees

 

 

1,446

 

 

 

1,457

 

 

1,680

 

 

1,539

 

 

1,443

 

Deposit insurance

 

 

385

 

 

 

357

 

 

354

 

 

349

 

 

345

 

Prepayment penalties on Federal Home Loan Bank advances

 

 

 

 

 

 

 

 

 

 

 

 

Other expenses

 

 

4,384

 

 

 

3,323

 

 

3,260

 

 

2,859

 

 

2,817

 

Total noninterest expenses

 

 

34,644

 

 

 

34,473

 

 

34,954

 

 

34,835

 

 

38,188

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

12,337

 

 

 

18,436

 

 

13,798

 

 

17,158

 

 

16,397

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

2,760

 

 

 

4,678

 

 

3,811

 

 

4,891

 

 

3,807

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

9,577

 

 

$

13,758

 

$

9,987

 

$

12,267

 

$

12,590

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.21

 

 

$

0.30

 

$

0.21

 

$

0.26

 

$

0.26

 

Diluted

 

$

0.21

 

 

$

0.30

 

$

0.21

 

$

0.25

 

$

0.25

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

45,321,491

 

 

 

45,830,737

 

 

46,980,830

 

 

47,836,410

 

 

48,918,539

 

Diluted

 

 

45,861,658

 

 

 

46,420,527

 

 

47,536,033

 

 

48,690,420

 

 

49,828,379

 

 

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

For the Years Ended December 31,

 

 

 

 

(dollars in thousands, except share data)

 

2022

 

2021

 

$ Change

 

% Change

 

 

 

 

 

 

 

 

 

Interest and dividend income:

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

162,340

 

$

135,823

 

 

$

26,517

 

 

19.5

%

Interest on loans held for sale

 

 

1,306

 

 

3,342

 

 

 

(2,036

)

 

(60.9

)

Interest on securities

 

 

7,590

 

 

4,212

 

 

 

3,378

 

 

80.2

 

Other interest and dividend income

 

 

694

 

 

518

 

 

 

176

 

 

34.0

 

Total interest and dividend income

 

 

171,930

 

 

143,895

 

 

 

28,035

 

 

19.5

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

Interest on deposits

 

 

15,630

 

 

8,723

 

 

 

6,907

 

 

79.2

 

Interest on FHLB borrowings

 

 

5,219

 

 

1,707

 

 

 

3,512

 

 

205.7

 

Interest on subordinated debentures

 

 

2,095

 

 

2,095

 

 

 

 

 

0.0

 

Total interest expense

 

 

22,944

 

 

12,525

 

 

 

10,419

 

 

83.2

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

 

148,986

 

 

131,370

 

 

 

17,616

 

 

13.4

 

 

 

 

 

 

 

 

 

 

Provision (benefit) for credit losses

 

 

5,660

 

 

(7,258

)

 

 

12,918

 

 

178.0

 

 

 

 

 

 

 

 

 

 

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

 

 

143,326

 

 

138,628

 

 

 

4,698

 

 

3.4

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

Mortgage banking income:

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

15,970

 

 

61,883

 

 

 

(45,913

)

 

(74.2

)

Changes in mortgage servicing rights fair value

 

 

5,332

 

 

(380

)

 

 

5,712

 

 

NM

 

Other

 

 

9,948

 

 

15,831

 

 

 

(5,883

)

 

(37.2

)

Total mortgage banking income

 

 

31,250

 

 

77,334

 

 

 

(46,084

)

 

(59.6

)

 

 

 

 

 

 

 

 

 

Deposit account fees

 

 

19,265

 

 

17,839

 

 

 

1,426

 

 

8.0

 

Income on retirement plan annuities

 

 

456

 

 

427

 

 

 

29

 

 

6.8

 

Gain on sale and call of securities, net

 

 

 

 

241

 

 

 

(241

)

 

(100.0

)

Bank-owned life insurance income

 

 

1,981

 

 

2,022

 

 

 

(41

)

 

(2.0

)

Other income

 

 

4,357

 

 

2,823

 

 

 

1,534

 

 

54.3

 

Total noninterest income

 

 

57,309

 

 

100,686

 

 

 

(43,377

)

 

(43.1

)

 

 

 

 

 

 

 

 

 

Noninterest expenses:

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

83,273

 

 

101,924

 

 

 

(18,651

)

 

(18.3

)

Occupancy and equipment

 

 

19,767

 

 

19,646

 

 

 

121

 

 

0.6

 

Data processing

 

 

9,170

 

 

9,154

 

 

 

16

 

 

0.2

 

Loan expense

 

 

1,387

 

 

5,740

 

 

 

(4,353

)

 

(75.8

)

Marketing

 

 

3,916

 

 

3,644

 

 

 

272

 

 

7.5

 

Professional fees

 

 

6,122

 

 

5,875

 

 

 

247

 

 

4.2

 

Deposit insurance

 

 

1,445

 

 

1,338

 

 

 

107

 

 

8.0

 

Prepayment penalties on Federal Home Loan Bank advances

 

 

 

 

1,095

 

 

 

(1,095

)

 

(100.0

)

Other expenses

 

 

13,826

 

 

10,446

 

 

 

3,380

 

 

32.4

 

Total noninterest expenses

 

 

138,906

 

 

158,862

 

 

 

(19,956

)

 

(12.6

)

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

61,729

 

 

80,452

 

 

 

(18,723

)

 

(23.3

)

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

16,140

 

 

21,935

 

 

 

(5,795

)

 

(26.4

)

 

 

 

 

 

 

 

 

 

Net income

 

$

45,589

 

$

58,517

 

 

$

(12,928

)

 

(22.1

)%

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

Basic

 

$

0.98

 

$

1.15

 

 

 

 

 

Diluted

 

$

0.97

 

$

1.14

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

46,483,664

 

 

50,746,302

 

 

 

 

 

Diluted

 

 

47,118,457

 

 

51,523,135

 

 

 

 

 

 

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

 

December 31, 2022

 

September 30, 2022

 

December 31, 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)

 

$

388,247

 

$

2,045

 

2.09

%

$

390,577

 

$

1,971

 

2.00

%

$

394,301

 

$

1,541

 

1.55

%

Other interest-earning assets

 

 

42,640

 

 

359

 

3.34

 

 

27,723

 

 

143

 

2.05

 

 

286,026

 

 

134

 

0.19

 

Loans held for sale

 

 

22,350

 

 

334

 

5.93

 

 

28,046

 

 

377

 

5.33

 

 

63,833

 

 

501

 

3.11

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans (2)(3)

 

 

2,770,667

 

 

34,351

 

4.92

 

 

2,522,359

 

 

28,298

 

4.45

 

 

2,165,739

 

 

22,658

 

4.15

 

Residential real estate loans (3)

 

 

1,566,389

 

 

14,352

 

3.64

 

 

1,470,305

 

 

12,972

 

3.50

 

 

1,171,608

 

 

9,870

 

3.34

 

Consumer loans (3)

 

 

45,629

 

 

632

 

5.50

 

 

63,220

 

 

795

 

4.99

 

 

143,577

 

 

1,649

 

4.56

 

Total loans

 

 

4,382,685

 

 

49,335

 

4.47

 

 

4,055,884

 

 

42,065

 

4.11

 

 

3,480,924

 

 

34,177

 

3.90

 

Total interest-earning assets

 

 

4,835,922

 

 

52,073

 

4.27

 

 

4,502,230

 

 

44,556

 

3.93

 

 

4,225,084

 

 

36,353

 

3.41

 

Noninterest-earning assets

 

 

311,372

 

 

 

 

 

 

 

308,734

 

 

 

 

 

 

 

337,310

 

 

 

 

 

 

Total assets

 

$

5,147,294

 

 

 

 

 

 

$

4,810,964

 

 

 

 

 

 

$

4,562,394

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

$

1,408,493

 

 

3,591

 

1.01

 

$

1,293,598

 

 

1,211

 

0.37

 

$

1,147,855

 

 

247

 

0.09

 

NOW accounts

 

 

291,890

 

 

40

 

0.05

 

 

305,777

 

 

42

 

0.05

 

 

300,459

 

 

40

 

0.05

 

Money market accounts

 

 

878,609

 

 

3,312

 

1.50

 

 

893,452

 

 

1,382

 

0.61

 

 

839,977

 

 

307

 

0.15

 

Certificates of deposit

 

 

487,121

 

 

1,062

 

0.86

 

 

486,923

 

 

787

 

0.64

 

 

543,208

 

 

878

 

0.64

 

Brokered deposits

 

 

148,460

 

 

494

 

1.32

 

 

102,875

 

 

69

 

0.27

 

 

100,000

 

 

179

 

0.71

 

Total interest-bearing deposits

 

 

3,214,573

 

 

8,499

 

1.05

 

 

3,082,625

 

 

3,491

 

0.45

 

 

2,931,499

 

 

1,651

 

0.22

 

FHLB advances

 

 

392,508

 

 

3,703

 

3.74

 

 

196,036

 

 

1,209

 

2.45

 

 

55,714

 

 

193

 

1.37

 

Subordinated debentures

 

 

34,268

 

 

524

 

6.07

 

 

34,237

 

 

524

 

6.07

 

 

34,144

 

 

524

 

6.09

 

Total borrowings

 

 

426,776

 

 

4,227

 

3.93

 

 

230,273

 

 

1,733

 

2.99

 

 

89,858

 

 

717

 

3.17

 

Total interest-bearing liabilities

 

 

3,641,349

 

 

12,726

 

1.39

 

 

3,312,898

 

 

5,224

 

0.63

 

 

3,021,357

 

 

2,368

 

0.31

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

788,572

 

 

 

 

 

 

 

789,214

 

 

 

 

 

 

 

768,361

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

101,621

 

 

 

 

 

 

 

80,304

 

 

 

 

 

 

 

92,034

 

 

 

 

 

 

Total liabilities

 

 

4,531,542

 

 

 

 

 

 

 

4,182,416

 

 

 

 

 

 

 

3,881,752

 

 

 

 

 

 

Total stockholders' equity

 

 

615,752

 

 

 

 

 

 

 

628,548

 

 

 

 

 

 

 

680,642

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

5,147,294

 

 

 

 

 

 

$

4,810,964

 

 

 

 

 

 

$

4,562,394

 

 

 

 

 

 

Tax equivalent net interest income

 

 

 

 

 

39,347

 

 

 

 

 

 

 

39,332

 

 

 

 

 

 

 

33,985

 

 

 

Tax equivalent interest rate spread (4)

 

 

 

 

 

 

 

2.88

%

 

 

 

 

 

 

3.30

%

 

 

 

 

 

 

3.10

%

Less: tax equivalent adjustment

 

 

 

 

 

158

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income as reported

 

 

 

 

$

39,189

 

 

 

 

 

 

$

39,332

 

 

 

 

 

 

$

33,985

 

 

 

Net interest-earning assets (5)

 

$

1,194,573

 

 

 

 

 

 

$

1,189,332

 

 

 

 

 

 

$

1,203,727

 

 

 

 

 

 

Net interest margin (6)

 

 

 

 

 

 

 

3.22

%

 

 

 

 

 

 

3.47

%

 

 

 

 

 

 

3.19

%

Tax equivalent effect

 

 

 

 

 

 

 

0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin on a fully tax equivalent basis

 

 

 

 

 

 

 

3.23

%

 

 

 

 

 

 

3.47

%

 

 

 

 

 

 

3.19

%

Ratio of interest-earning assets to interest-bearing liabilities

 

 

132.81

%

 

 

 

 

 

 

135.90

%

 

 

 

 

 

 

139.84

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including demand deposits

 

$

4,003,145

 

$

8,499

 

 

 

$

3,871,839

 

$

3,491

 

 

 

$

3,699,860

 

$

1,651

 

 

 

Cost of total deposits

 

 

 

 

 

 

 

0.84

%

 

 

 

 

 

 

0.36

%

 

 

 

 

 

 

0.18

%

Total funding liabilities, including demand deposits

 

$

4,429,921

 

$

12,726

 

 

 

$

4,102,112

 

$

5,224

 

 

 

$

3,789,718

 

$

2,368

 

 

 

Cost of total funding liabilities

 

 

 

 

 

 

 

1.14

%

 

 

 

 

 

 

0.51

%

 

 

 

 

 

 

0.25

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

(2) Includes industrial revenue bonds for the quarter ended 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 December 31, 2022 was 4.90%.

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

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

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

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

(7) Annualized.

 

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

 

 

December 31, 2022

 

December 31, 2021

 

 

 

Average

 

 

 

 

 

Average

 

 

 

 

 

 

 

Outstanding

 

 

 

Yield/

 

Outstanding

 

 

 

Yield/

 

 

 

Balance

 

Interest

 

Cost

 

Balance

 

Interest

 

Cost

 

 

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

$

390,894

 

$

7,590

 

1.94

%

$

337,843

 

$

4,212

 

1.25

%

Other interest-earning assets

 

 

70,987

 

 

694

 

0.98

 

 

309,819

 

 

518

 

0.17

 

Loans held for sale

 

 

27,409

 

 

1,306

 

4.76

 

 

113,788

 

 

3,342

 

2.94

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans (2)(3)

 

 

2,493,646

 

 

110,305

 

4.42

 

 

2,150,022

 

 

87,911

 

4.09

 

Residential real estate loans (3)

 

 

1,398,190

 

 

48,645

 

3.48

 

 

1,110,840

 

 

39,309

 

3.54

 

Consumer loans (3)

 

 

78,766

 

 

3,811

 

4.84

 

 

192,841

 

 

8,603

 

4.46

 

Total loans

 

 

3,970,602

 

 

162,761

 

4.10

 

 

3,453,703

 

 

135,823

 

3.93

 

Total interest-earning assets

 

 

4,459,892

 

 

172,351

 

3.86

 

 

4,215,153

 

 

143,895

 

3.41

 

Noninterest-earning assets

 

 

314,670

 

 

 

 

 

 

 

338,559

 

 

 

 

 

 

Total assets

 

$

4,774,562

 

 

 

 

 

 

$

4,553,712

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

$

1,284,364

 

 

5,794

 

0.45

 

$

1,115,626

 

 

1,610

 

0.14

 

NOW accounts

 

 

302,530

 

 

156

 

0.05

 

 

257,201

 

 

163

 

0.06

 

Money market accounts

 

 

879,133

 

 

5,632

 

0.64

 

 

846,756

 

 

1,676

 

0.20

 

Certificates of deposit

 

 

495,066

 

 

3,248

 

0.66

 

 

577,760

 

 

4,638

 

0.80

 

Brokered deposits

 

 

112,939

 

 

800

 

0.71

 

 

100,000

 

 

636

 

0.64

 

Total interest-bearing deposits

 

 

3,074,032

 

 

15,630

 

0.51

 

 

2,897,343

 

 

8,723

 

0.30

 

FHLB advances

 

 

170,748

 

 

5,219

 

3.06

 

 

84,711

 

 

1,707

 

2.02

 

Subordinated debentures

 

 

34,221

 

 

2,095

 

6.12

 

 

34,096

 

 

2,095

 

6.14

 

Total borrowings

 

 

204,969

 

 

7,314

 

3.57

 

 

118,807

 

 

3,802

 

3.20

 

Total interest-bearing liabilities

 

 

3,279,001

 

 

22,944

 

0.70

 

 

3,016,150

 

 

12,525

 

0.42

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

771,299

 

 

 

 

 

 

 

754,198

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

85,995

 

 

 

 

 

 

 

91,084

 

 

 

 

 

 

Total liabilities

 

 

4,136,295

 

 

 

 

 

 

 

3,861,432

 

 

 

 

 

 

Total stockholders' equity

 

 

638,267

 

 

 

 

 

 

 

692,280

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

4,774,562

 

 

 

 

 

 

$

4,553,712

 

 

 

 

 

 

Tax equivalent net interest income

 

 

 

 

 

149,407

 

 

 

 

 

 

 

131,370

 

 

 

Tax equivalent interest rate spread (4)

 

 

 

 

 

 

 

3.16

%

 

 

 

 

 

 

2.99

%

Less: tax equivalent adjustment

 

 

 

 

 

421

 

 

 

 

 

 

 

 

 

 

Net interest income as reported

 

 

 

 

$

148,986

 

 

 

 

 

 

$

131,370

 

 

 

Net interest-earning assets (5)

 

$

1,180,891

 

 

 

 

 

 

$

1,199,003

 

 

 

 

 

 

Net interest margin (6)

 

 

 

 

 

 

 

3.34

%

 

 

 

 

 

 

3.12

%

Tax equivalent effect

 

 

 

 

 

 

 

0.01

 

 

 

 

 

 

 

 

Net interest margin on a fully tax equivalent basis

 

 

 

 

 

 

 

3.35

%

 

 

 

 

 

 

3.12

%

Ratio of interest-earning assets to interest-bearing liabilities

 

 

136.01

%

 

 

 

 

 

 

139.75

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including demand deposits

 

$

3,845,331

 

$

15,630

 

 

 

$

3,651,541

 

$

8,723

 

 

 

Cost of total deposits

 

 

 

 

 

 

 

0.41

%

 

 

 

 

 

 

0.24

%

Total funding liabilities, including demand deposits

 

$

4,050,300

 

$

22,944

 

 

 

$

3,770,348

 

$

12,525

 

 

 

Cost of total funding liabilities

 

 

 

 

 

 

 

0.57

%

 

 

 

 

 

 

0.33

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

(2) Includes industrial revenue bonds for the year ended December 31, 2022. 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 December 31, 2022 was 4.41%.

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

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

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

(6) 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

 

 

 

December 31, 2022

 

September 30, 2022

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

$

388,247

 

$

390,577

 

$

391,448

 

$

393,364

 

$

394,301

 

Other interest-earning assets

 

 

42,640

 

 

27,723

 

 

64,678

 

 

150,569

 

 

286,026

 

Loans held for sale

 

 

22,350

 

 

28,046

 

 

29,474

 

 

29,842

 

 

63,833

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans (2)

 

 

2,770,667

 

 

2,522,359

 

 

2,384,630

 

 

2,291,343

 

 

2,165,739

 

Residential real estate loans (2)

 

 

1,566,389

 

 

1,470,305

 

 

1,330,772

 

 

1,220,703

 

 

1,171,608

 

Consumer loans (2)

 

 

45,629

 

 

63,220

 

 

88,943

 

 

118,242

 

 

143,577

 

Total loans

 

 

4,382,685

 

 

4,055,884

 

 

3,804,345

 

 

3,630,288

 

 

3,480,924

 

Total interest-earning assets

 

 

4,835,922

 

 

4,502,230

 

 

4,289,945

 

 

4,204,063

 

 

4,225,084

 

Noninterest-earning assets

 

 

311,372

 

 

308,734

 

 

311,998

 

 

326,811

 

 

337,310

 

Total assets

 

$

5,147,294

 

$

4,810,964

 

$

4,601,943

 

$

4,530,874

 

$

4,562,394

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

$

1,408,493

 

$

1,293,598

 

$

1,266,912

 

$

1,165,683

 

$

1,147,855

 

NOW accounts

 

 

291,890

 

 

305,777

 

 

311,241

 

 

301,279

 

 

300,459

 

Money market accounts

 

 

878,609

 

 

893,452

 

 

885,305

 

 

858,792

 

 

839,977

 

Certificates of deposit

 

 

487,121

 

 

486,923

 

 

484,484

 

 

522,211

 

 

543,208

 

Brokered deposits

 

 

148,460

 

 

102,875

 

 

100,000

 

 

100,000

 

 

100,000

 

Total interest-bearing deposits

 

 

3,214,573

 

 

3,082,625

 

 

3,047,942

 

 

2,947,965

 

 

2,931,499

 

FHLB advances

 

 

392,508

 

 

196,036

 

 

34,763

 

 

55,706

 

 

55,714

 

Subordinated debentures

 

 

34,268

 

 

34,237

 

 

34,207

 

 

34,173

 

 

34,144

 

Total borrowings

 

 

426,776

 

 

230,273

 

 

68,970

 

 

89,879

 

 

89,858

 

Total interest-bearing liabilities

 

 

3,641,349

 

 

3,312,898

 

 

3,116,912

 

 

3,037,844

 

 

3,021,357

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

788,572

 

 

789,214

 

 

768,088

 

 

738,578

 

 

768,361

 

Other noninterest-bearing liabilities

 

 

101,621

 

 

80,304

 

 

75,186

 

 

86,763

 

 

92,034

 

Total liabilities

 

 

4,531,542

 

 

4,182,416

 

 

3,960,186

 

 

3,863,185

 

 

3,881,752

 

Total stockholders' equity

 

 

615,752

 

 

628,548

 

 

641,757

 

 

667,689

 

 

680,642

 

Total liabilities and stockholders' equity

 

$

5,147,294

 

$

4,810,964

 

$

4,601,943

 

$

4,530,874

 

$

4,562,394

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized Yield Trend - Quarters Ended

 

 

 

December 31, 2022

 

September 30, 2022

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

 

2.09

%

 

2.00

%

 

1.92

%

 

1.75

%

 

1.55

%

Other interest-earning assets

 

 

3.34

%

 

2.05

%

 

0.81

%

 

0.16

%

 

0.19

%

Loans held for sale

 

 

5.93

%

 

5.33

%

 

4.51

%

 

3.59

%

 

3.11

%

Commercial loans (2)(3)

 

 

4.92

%

 

4.45

%

 

4.25

%

 

3.91

%

 

4.15

%

Residential real estate loans (3)

 

 

3.64

%

 

3.50

%

 

3.37

%

 

3.37

%

 

3.34

%

Consumer loans (3)

 

 

5.50

%

 

4.99

%

 

4.71

%

 

4.59

%

 

4.56

%

Total loans

 

 

4.47

%

 

4.11

%

 

3.96

%

 

3.75

%

 

3.90

%

Total interest-earning assets

 

 

4.27

%

 

3.93

%

 

3.73

%

 

3.43

%

 

3.41

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

 

1.01

%

 

0.37

%

 

0.20

%

 

0.13

%

 

0.09

%

NOW accounts

 

 

0.05

%

 

0.05

%

 

0.05

%

 

0.05

%

 

0.05

%

Money market accounts

 

 

1.50

%

 

0.61

%

 

0.30

%

 

0.14

%

 

0.15

%

Certificates of deposit

 

 

0.86

%

 

0.64

%

 

0.55

%

 

0.57

%

 

0.64

%

Brokered deposits

 

 

1.32

%

 

0.27

%

 

0.20

%

 

0.76

%

 

0.71

%

Total interest-bearing deposits

 

 

1.05

%

 

0.45

%

 

0.27

%

 

0.22

%

 

0.22

%

FHLB advances

 

 

3.74

%

 

2.45

%

 

1.36

%

 

1.37

%

 

1.37

%

Subordinated debentures

 

 

6.07

%

 

6.07

%

 

6.14

%

 

6.21

%

 

6.09

%

Total borrowings

 

 

3.93

%

 

2.99

%

 

3.74

%

 

3.21

%

 

3.17

%

Total interest-bearing liabilities

 

 

1.39

%

 

0.63

%

 

0.34

%

 

0.31

%

 

0.31

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

(2) Includes industrial revenue bonds for the quarter ended 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 December 31, 2022 was 4.90%.

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

 

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

Performance Ratios (annualized):

 

2022

 

2022

 

2022

 

2022

 

2021

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (ROAA)

 

 

0.74

%

 

1.14

%

 

0.87

%

 

1.08

%

 

1.10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average equity (ROAE)

 

 

6.22

%

 

8.76

%

 

6.22

%

 

7.35

%

 

7.40

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest expense

 

$

34,644

 

$

34,473

 

$

34,954

 

$

34,835

 

$

38,188

 

Less: Amortization of other intangible assets

 

 

189

 

 

235

 

 

235

 

 

235

 

 

235

 

Total adjusted noninterest expense

 

$

34,455

 

$

34,238

 

$

34,719

 

$

34,600

 

$

37,953

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

$

39,189

 

$

39,332

 

$

37,195

 

$

33,270

 

$

33,985

 

Total noninterest income

 

 

9,900

 

 

14,245

 

 

14,103

 

 

19,061

 

 

19,164

 

Total revenue

 

$

49,089

 

$

53,577

 

$

51,298

 

$

52,331

 

$

53,149

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (1)

 

 

70.19

%

 

63.90

%

 

67.68

%

 

66.12

%

 

71.41

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At or for the Quarters Ended

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

Asset Quality

 

2022

 

2022

 

2022

 

2022

 

2021

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total nonperforming assets

 

$

14,840

 

$

23,367

 

$

24,441

 

$

26,109

 

$

36,186

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

 

0.28

%

 

0.47

%

 

0.52

%

 

0.57

%

 

0.79

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses on loans to total loans

 

 

0.99

%

 

1.06

%

 

1.11

%

 

1.12

%

 

1.26

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs (recoveries)

 

$

2,067

 

$

(799)

 

$

(504)

 

$

2,730

 

$

1,174

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized net charge-offs (recoveries)/average loans

 

 

0.19

%

 

(0.08)

%

 

(0.05)

%

 

0.30

%

 

0.13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses on loans to nonperforming loans

 

 

305.93

%

 

191.60

%

 

178.41

%

 

159.96

%

 

125.60

%

 

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

Capital and Share Related

 

2022

 

2022

 

2022

 

2022

 

2021

 

(dollars in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock outstanding

 

 

48,961,452

 

 

49,202,660

 

 

49,989,007

 

 

51,257,696

 

 

52,390,478

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

12.60

 

$

12.43

 

$

12.49

 

$

12.66

 

$

12.97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

$

616,976

 

$

611,370

 

$

624,478

 

$

649,065

 

$

679,261

 

Less: Goodwill

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

Less: Other intangible assets (1)

 

 

2,272

 

 

2,461

 

 

2,695

 

 

2,930

 

 

3,164

 

Tangible common equity

 

$

544,902

 

$

539,107

 

$

551,981

 

$

576,333

 

$

606,295

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible book value per share (2)

 

$

11.13

 

$

10.96

 

$

11.04

 

$

11.24

 

$

11.57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

5,359,545

 

$

4,987,643

 

$

4,704,044

 

$

4,591,325

 

$

4,553,405

 

Less: Goodwill

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

Less: Other intangible assets

 

 

2,272

 

 

2,461

 

 

2,695

 

 

2,930

 

 

3,164

 

Tangible assets

 

$

5,287,471

 

$

4,915,380

 

$

4,631,547

 

$

4,518,593

 

$

4,480,439

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity / tangible assets (3)

 

 

10.31

%

 

10.97

%

 

11.92

%

 

12.75

%

 

13.53

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

September 30,

 

December 31,

 

 

2022

 

2022

 

2021

 

2022

 

2022

 

2021

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

$

419

 

$

437

 

$

571

 

$

39,258

 

$

39,373

 

$

33,909

Provision (benefit) for credit losses

 

 

 

 

 

 

 

 

2,108

 

 

668

 

 

(1,436)

Net interest and dividend income, after provision for loan losses

 

 

419

 

 

437

 

 

571

 

 

37,150

 

 

38,705

 

 

35,345

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

2,301

 

 

3,809

 

 

10,063

 

 

 

 

 

 

Intersegment gain (loss)

 

 

553

 

 

698

 

 

496

 

 

(997)

 

 

(904)

 

 

(720)

Changes in mortgage servicing rights fair value

 

 

(2,368)

 

 

1,652

 

 

(315)

 

 

(263)

 

 

164

 

 

70

Other

 

 

2,122

 

 

2,235

 

 

3,108

 

 

203

 

 

218

 

 

251

Total mortgage banking income (loss)

 

 

2,608

 

 

8,394

 

 

13,352

 

 

(1,057)

 

 

(522)

 

 

(399)

Other noninterest income (loss)

 

 

126

 

 

(13)

 

 

7

 

 

7,779

 

 

6,180

 

 

5,980

Total noninterest income

 

 

2,734

 

 

8,381

 

 

13,359

 

 

6,722

 

 

5,658

 

 

5,581

Noninterest expense

 

 

5,452

 

 

6,610

 

 

10,467

 

 

28,744

 

 

27,707

 

 

27,396

(Loss) income before income taxes

 

 

(2,299)

 

 

2,208

 

 

3,463

 

 

15,128

 

 

16,656

 

 

13,530

Provision for income taxes

 

 

 

 

687

 

 

664

 

 

2,817

 

 

4,166

 

 

3,060

Net (loss) income

 

$

(2,299)

 

$

1,521

 

$

2,799

 

$

12,311

 

$

12,490

 

$

10,470

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HarborOne Mortgage

 

HarborOne Bank

 

 

For the Years Ended

 

For the Years Ended

 

 

December 31,

 

December 31,

 

December 31,

 

December 31,

 

 

2022

 

2021

 

2022

 

2021

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

$

1,617

 

$

3,468

 

$

149,301

 

$

129,785

Provision (benefit) for credit losses

 

 

 

 

 

 

5,660

 

 

(7,258)

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

 

 

1,617

 

 

3,468

 

 

143,641

 

 

137,043

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

15,970

 

 

61,883

 

 

 

 

Intersegment gain (loss)

 

 

3,185

 

 

4,434

 

 

(3,604)

 

 

(3,665)

Changes in mortgage servicing rights fair value

 

 

4,714

 

 

(243)

 

 

618

 

 

(137)

Other

 

 

9,075

 

 

14,741

 

 

873

 

 

1,090

Total mortgage banking income (loss)

 

 

32,944

 

 

80,815

 

 

(2,113)

 

 

(2,712)

Other noninterest income

 

 

129

 

 

44

 

 

25,930

 

 

23,308

Total noninterest income

 

 

33,073

 

 

80,859

 

 

23,817

 

 

20,596

Noninterest expense

 

 

27,065

 

 

55,012

 

 

110,407

 

 

102,557

Income before income taxes

 

 

7,625

 

 

29,315

 

 

57,051

 

 

55,082

Provision for income taxes

 

 

2,777

 

 

7,569

 

 

14,090

 

 

14,933

Net income

 

$

4,848

 

$

21,746

 

$

42,961

 

$

40,149

Category: Earnings Release

Contacts

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

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