HarborOne Bancorp, Inc. (the “Company” or “HarborOne”) (NASDAQ:
HONE), the holding company for HarborOne Bank (the “Bank”),
announced net income of $7.3 million, or $0.16 per diluted share,
for the first quarter of 2023, compared to net income of $9.6
million, or $0.21 per diluted share, for the preceding quarter and
net income of $12.3 million, or $0.25 per diluted share, for the
same period last year.
Selected Financial Highlights:
- Recent Company-wide cost savings measures and organizational
efficiencies will provide approximately $4.1 million in annual cost
savings; a branch closure and a branch relocation will provide
additional long-term expense savings.
- Returned $3.3 million of capital to shareholders via dividends
and increased quarterly dividend by 7%.
- Continued share repurchase program returning $26.8 million to
shareholders, representing 2.0 million shares.
- Disciplined underwriting continues to provide strong credit
quality, with nonperforming loans to total loans of 0.27% compared
to 0.32% on a linked-quarter basis.
- Loan growth of $73.0 million, or 1.6%, and deposit growth of
$52.2 million, or 1.2%, on a linked-quarter basis.
“While significant challenges presented themselves in Q1, I have
tremendous confidence in our ability to manage through the current
environment. Our excellent credit quality, strong capital position,
and deposit growth provide the foundation for that confidence,”
said Joseph F. Casey, President and CEO. “Our team remains highly
focused on ensuring stability in our deposit base. The Company has
been proactive in reducing expenses at both HarborOne Mortgage and
the Bank and will continue to look for additional opportunities.
Our resilience and strategic discipline position us well to drive
long-term value for our shareholders.”
Net Interest Income The Company’s net interest and
dividend income was $34.4 million for the quarter ended March 31,
2023, compared to $39.2 million for the quarter ended December 31,
2022, and $33.3 million for the quarter ended March 31, 2022. The
tax equivalent interest rate spread and net interest margin were
2.28% and 2.78%, respectively, for the quarter ended March 31,
2023, compared to 2.88% and 3.23%, respectively, for the quarter
ended December 31, 2022, and 3.12% and 3.21%, respectively, for the
quarter ended March 31, 2022.
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 188 basis points for the
quarter ended March 31, 2023, compared to 114 basis points for the
preceding quarter.
The $1.1 million increase in net interest and dividend income
from the prior year quarter reflects an increase of $20.3 million,
or 57.1%, in total interest and dividend income and an increase of
$19.2 million, or 823.7%, in total interest expense. The changes
reflect rate and volume changes in both interest-bearing assets and
liabilities. The yield on interest-earning assets increased 108
basis points, while the average balance increased $849.7 million,
and the cost of interest-bearing liabilities increased 192 basis
points, while the average balance increased $887.5 million.
Noninterest Income Total noninterest income decreased
$1.2 million, or 12.2%, to $8.7 million for the quarter ended March
31, 2023, from $9.9 million for the quarter ended December 31,
2022. Mortgage loan closings for the quarter ended March 31, 2023
were $125.6 million with a gain on loan sales of $2.2 million,
compared to $222.4 million in mortgage closings and $2.3 million in
gain on sales for the preceding quarter as higher gain-on-sale
margins help offset the seasonal loss in production volume. Deposit
account fees were $4.7 million for the quarter ended March 31,
2023, compared to $5.0 million for the quarter ended December 31,
2022. Other income for the quarter ended March 31, 2023 decreased
$1.7 million, primarily reflecting a $1.1 million decrease in swap
fee income.
The decrease in the fair value of mortgage servicing rights for
the three months ended March 31, 2023 was $1.3 million, as compared
to a decrease of $2.1 million in the fair value of mortgage
servicing rights for the three months ended December 31, 2022. The
valuation was negatively 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 $371,000
and $570,000 for the quarters ended March 31, 2023 and December 31,
2022, respectively.
Total noninterest income decreased $10.4 million, or 54.4%,
compared to the quarter ended March 31, 2022, primarily due to a
$10.4 million, or 79.1%, 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 $6.1 million
increase in the fair value of mortgage servicing rights.
Noninterest Expense Total noninterest expenses were $31.5
million for the quarter ended March 31, 2023, a decrease of $3.1
million, or 9.0%, from the quarter ended December 31, 2022.
Compensation and benefits decreased $2.3 million primarily
reflecting decreased mortgage origination commission and incentive
accruals. Other expenses decreased $1.6 million, or 35.7% for the
quarter ended March 31 2023, primarily as a result of a legal
settlement accrued for in the fourth quarter of 2022.
Total noninterest expenses decreased $3.3 million, or 9.5%, from
the quarter ended March 31, 2022. Compensation and benefits
decreased $2.9 million primarily reflecting decreased mortgage
origination commission and incentive accruals.
During the quarter, management evaluated potential cost saving
measures across the Company. This resulted in a reduction in force
at HarborOne Mortgage, LLC (“HarborOne Mortgage”) during the first
quarter with an expected annual cost savings of $1.2 million and
recognized severance expense of $249,000. During the second quarter
of 2023 the Bank took further cost savings measures and
organizational efficiencies with an estimated annual savings of
$2.9 million and will recognize severance expense of $452,000.
Additionally, the Bank sought and obtained regulatory approval in
2023 to close one branch and relocate another branch that will both
provide additional long-term expense savings.
Income Tax Provision The effective tax rate for the
quarter ended March 31, 2023 was 24.9% compared to 22.4% for the
quarter ended December 31, 2022. 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 Disciplined
underwriting and active loan management continues to result in
strong credit quality performance. Total nonperforming assets
improved to $12.3 million at March 31, 2023, compared to $14.8
million at December 31, 2022 and $26.1 million at March 31, 2022.
Nonperforming assets as a percentage of total assets were 0.22% at
March 31, 2023, 0.28% at December 31, 2022, and 0.57% at March 31,
2022. During 2022, two large commercial credits were resolved,
reducing nonperforming assets significantly.
The provision for funded loan credit losses for the quarter
ended March 31, 2023 was $1.7 million and reflects provisioning for
loan growth and increased economic uncertainty. Net recoveries
totaled $11,000 for the quarter ended March 31, 2023. Net
charge-offs totaled $2.1 million, or 0.19% of average loans
outstanding on an annualized basis, for the quarter ended December
31, 2022, and net charge-offs totaled $2.7 million, or 0.30% of
average loans outstanding on an annualized basis, for the quarter
ended March 31, 2022.
The allowance for credit losses (“ACL”) was $47.0 million, or
1.02% of total loans, at March 31, 2023, compared to $45.2 million,
or 0.99% of total loans, at December 31, 2022 and $41.8 million, or
1.12% of total loans, at March 31, 2022. The ACL on unfunded
commitments, included in other liabilities on the unaudited
Consolidated Balance Sheets, amounted to $5.0 million at March 31,
2023 as compared to $4.9 million at December 31, 2022 and $3.8
million at March 31, 2022.
We believe that we are well positioned to withstand any downturn
in the credit cycle should one materialize. We continue to closely
monitor our loan portfolio for signs of deterioration. Management
is 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
March 31, 2023, business-oriented hotels loans included 12 loans
with a total outstanding balance of $85.3 million, non-anchored
retail space loans included 28 loans with a total outstanding
balance of $40.2 million, and metro office space loans included two
loans with a total outstanding balance of $14.8 million. As of
March 31, 2023, there was one business-oriented hotel credit with a
carrying value of $1.9 million that was rated substandard and on
nonaccrual. This credit was provided a principal deferral in the
third quarter of 2022. The other loans in these groups were
performing in accordance with their terms.
Balance Sheet Total assets increased $213.3 million, or
4.0%, to $5.57 billion at March 31, 2023, from $5.36 billion at
December 31, 2022. The increase primarily reflects an increase of
$152.5 million in short-term investments and a $73.0 million
increase in loans. The increase in short-term investments reflects
management’s pro-active liquidity-enhancing measures in response to
financial industry concerns.
Available for sale securities were $303.1 million and $301.1
million at March 31, 2023 and December 31, 2022, respectively. The
unrealized loss on securities available for sale decreased to $61.2
million as of March 31, 2023, as compared to $68.3 million of
unrealized losses as of December 31, 2022. Securities held to
maturity were $19.8 million, or 0.4% of total assets, with a fair
value of $19.3 million.
Loans increased $73.0 million, or 1.6%, to $4.62 billion at
March 31, 2023, from $4.55 billion at December 31, 2022. The
increase in loans for the three months ended March 31, 2023 was
primarily due to increases in commercial real estate loans of $36.4
million, commercial construction loans of $13.4 million, and
residential real estate loans of $33.6 million, partially offset by
decreases in commercial and industrial loans of $1.2 million and
consumer loans of $9.2 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 $4.24 billion at March 31, 2023 and $4.19
billion at December 31, 2022. Compared to the prior quarter,
non-certificate accounts decreased $124.9 million, term certificate
accounts increased $155.6 million, and brokered deposits increased
$21.5 million. As of March 31, 2023, FDIC-insured deposits exceeded
70% of total deposits. Including Depositors Insurance Fund (“DIF”)
excess insurance coverage that remains available until February 24,
2024, insured deposits are approximately 100% of total 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, if that is a later
date.
FHLB borrowings increased $190.0 million to $590.7 million at
March 31, 2023 from $400.7 million at December 31, 2022. At March
31, 2023, FHLB borrowings were primarily short-term borrowings as
the Bank utilized available credit to enhance liquidity. As of
March 31, 2023, the Bank had $677.6 million in available borrowing
capacity across multiple relationships.
Total stockholders’ equity was $599.8 million at March 31, 2023,
compared to $617.0 million at December 31, 2022 and $649.1 million
at March 31, 2022. Stockholders’ equity decreased 2.8% when
compared to the prior quarter, as earnings were offset by share
repurchases. The Company repurchased 2,033,192 shares at an average
price of $13.19, including $0.13 per share of excise tax, during
the three months ended March 31, 2023. A share repurchase program
that commenced in the first quarter of 2023 is expected to be
completed in the second quarter of 2023. Due to recent market
volatility and increased economic uncertainty, share repurchase
activity is expected to be reduced in the second quarter of 2023
compared to recent prior quarters. The
tangible-common-equity-to-tangible-assets ratio was 9.60% at March
31, 2023, 10.31% at December 31, 2022, and 12.75% at March 31,
2022. At March 31, 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 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 24 offices in Maine,
Massachusetts, New Jersey, 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 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)
March 31,
December 31,
September 30,
June 30,
March 31,
(in thousands)
2023
2022
2022
2022
2022
Assets
Cash and due from banks
$
38,989
$
39,712
$
39,910
$
35,843
$
41,862
Short-term investments
210,765
58,305
46,044
48,495
97,870
Total cash and cash equivalents
249,754
98,017
85,954
84,338
139,732
Securities available for sale, at fair
value
303,059
301,149
304,852
334,398
361,529
Securities held to maturity, at amortized
cost
19,838
19,949
15,000
10,000
—
Federal Home Loan Bank stock, at cost
23,589
20,071
15,973
5,625
5,931
Asset held for sale
—
—
—
—
678
Loans held for sale, at fair value
13,956
18,544
18,805
31,679
25,690
Loans:
Commercial real estate
2,286,727
2,250,344
2,041,905
1,847,619
1,816,484
Commercial construction
212,689
199,311
185,062
158,762
154,059
Commercial and industrial
423,036
424,275
397,112
407,182
410,787
Total commercial loans
2,922,452
2,873,930
2,624,079
2,413,563
2,381,330
Residential real estate
1,667,934
1,634,319
1,520,809
1,423,074
1,252,920
Consumer
32,246
41,421
52,466
75,312
103,100
Loans
4,622,632
4,549,670
4,197,354
3,911,949
3,737,350
Less: Allowance for credit losses on
loans
(46,994
)
(45,236
)
(44,621
)
(43,560
)
(41,765
)
Net loans
4,575,638
4,504,434
4,152,733
3,868,389
3,695,585
Mortgage servicing rights, at fair
value
47,080
48,138
49,861
47,130
45,043
Goodwill
69,802
69,802
69,802
69,802
69,802
Other intangible assets
2,082
2,272
2,461
2,695
2,930
Other assets
268,060
277,169
272,202
249,988
244,405
Total assets
$
5,572,858
$
5,359,545
$
4,987,643
$
4,704,044
$
4,591,325
Liabilities and Stockholders'
Equity
Deposits:
Demand deposit accounts
$
726,548
$
762,576
$
795,945
$
775,154
$
771,172
NOW accounts
287,376
297,692
308,191
316,839
310,090
Regular savings and club accounts
1,455,318
1,468,172
1,289,825
1,282,913
1,218,656
Money market deposit accounts
796,008
861,704
889,517
885,673
864,316
Term certificate accounts
653,553
497,975
484,936
487,354
497,746
Brokered deposits
322,927
301,380
114,696
100,000
100,000
Total deposits
4,241,730
4,189,499
3,883,110
3,847,933
3,761,980
Short-term borrowed funds
425,000
385,000
330,000
90,000
—
Long-term borrowed funds
165,665
15,675
15,684
15,693
55,702
Subordinated debt
34,317
34,285
34,254
34,222
34,191
Other liabilities and accrued expenses
106,352
118,110
113,225
91,718
90,387
Total liabilities
4,973,064
4,742,569
4,376,273
4,079,566
3,942,260
Common stock
597
596
593
593
591
Additional paid-in capital
483,831
483,031
480,617
479,519
477,302
Unearned compensation - ESOP
(27,164
)
(27,623
)
(28,083
)
(28,542
)
(29,002
)
Retained earnings
360,454
356,438
350,049
339,471
332,734
Treasury stock
(175,514
)
(148,384
)
(143,125
)
(132,296
)
(113,513
)
Accumulated other comprehensive loss
(42,410
)
(47,082
)
(48,681
)
(34,267
)
(19,047
)
Total stockholders' equity
599,794
616,976
611,370
624,478
649,065
Total liabilities and stockholders'
equity
$
5,572,858
$
5,359,545
$
4,987,643
$
4,704,044
$
4,591,325
HarborOne Bancorp,
Inc.
Consolidated Statements of Net
Income - Trend
(Unaudited)
Quarters Ended
March 31,
December 31,
September 30,
June 30,
March 31,
(in thousands, except share data)
2023
2022
2022
2022
2022
Interest and dividend income:
Interest and fees on loans
$
52,771
$
49,177
$
42,065
$
37,522
$
33,576
Interest on loans held for sale
286
334
377
331
264
Interest on securities
2,079
2,045
1,971
1,873
1,701
Other interest and dividend income
803
359
143
131
61
Total interest and dividend income
55,939
51,915
44,556
39,857
35,602
Interest expense:
Interest on deposits
15,913
8,499
3,491
2,019
1,621
Interest on FHLB borrowings
5,105
3,703
1,209
119
188
Interest on subordinated debentures
523
524
524
524
523
Total interest expense
21,541
12,726
5,224
2,662
2,332
Net interest and dividend income
34,398
39,189
39,332
37,195
33,270
Provision for credit losses
1,866
2,108
668
2,546
338
Net interest and dividend income,
after provision for credit losses
32,532
37,081
38,664
34,649
32,932
Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans
2,224
2,301
3,809
4,538
5,322
Changes in mortgage servicing rights fair
value
(1,692
)
(2,631
)
1,816
862
5,285
Other
2,216
2,325
2,453
2,612
2,558
Total mortgage banking income
2,748
1,995
8,078
8,012
13,165
Deposit account fees
4,733
5,031
4,870
4,892
4,472
Income on retirement plan annuities
119
118
119
112
107
Bank-owned life insurance income
500
501
503
494
483
Other income
590
2,255
675
593
834
Total noninterest income
8,690
9,900
14,245
14,103
19,061
Noninterest expenses:
Compensation and benefits
17,799
20,104
20,991
21,455
20,723
Occupancy and equipment
5,040
4,935
4,829
4,575
5,428
Data processing
2,346
2,359
2,311
2,259
2,241
Loan expense
313
169
355
385
478
Marketing
1,181
862
850
986
1,218
Professional fees
1,501
1,446
1,457
1,680
1,539
Deposit insurance
510
385
357
354
349
Other expenses
2,819
4,384
3,323
3,260
2,859
Total noninterest expenses
31,509
34,644
34,473
34,954
34,835
Income before income taxes
9,713
12,337
18,436
13,798
17,158
Income tax provision
2,416
2,760
4,678
3,811
4,891
Net income
$
7,297
$
9,577
$
13,758
$
9,987
$
12,267
Earnings per common share:
Basic
$
0.16
$
0.21
$
0.30
$
0.21
$
0.26
Diluted
$
0.16
$
0.21
$
0.30
$
0.21
$
0.25
Weighted average shares outstanding:
Basic
44,857,224
45,321,491
45,830,737
46,980,830
47,836,410
Diluted
45,284,240
45,861,658
46,420,527
47,536,033
48,690,420
HarborOne Bancorp,
Inc.
Average Balances /
Yields
(Unaudited)
Quarters Ended
March 31, 2023
December 31, 2022
March 31, 2022
Average
Average
Average
Outstanding
Yield/
Outstanding
Yield/
Outstanding
Yield/
Balance
Interest
Cost (7)
Balance
Interest
Cost (7)
Balance
Interest
Cost (7)
(dollars in thousands)
Interest-earning assets:
Investment securities (1)
$
387,303
$
2,079
2.18
%
$
388,247
$
2,045
2.09
%
$
393,364
$
1,701
1.75
%
Other interest-earning assets
63,426
803
5.13
42,640
359
3.34
150,569
61
0.16
Loans held for sale
18,108
286
6.41
22,350
334
5.93
29,842
264
3.59
Loans
Commercial loans (2)(3)
2,901,464
36,837
5.15
2,770,667
34,351
4.92
2,291,343
22,095
3.91
Residential real estate loans (3)
1,647,109
15,616
3.85
1,566,389
14,352
3.64
1,220,703
10,142
3.37
Consumer loans (3)
36,310
519
5.80
45,629
632
5.50
118,242
1,339
4.59
Total loans
4,584,883
52,972
4.69
4,382,685
49,335
4.47
3,630,288
33,576
3.75
Total interest-earning assets
5,053,720
56,140
4.51
4,835,922
52,073
4.27
4,204,063
35,602
3.43
Noninterest-earning assets
313,309
311,372
326,811
Total assets
$
5,367,029
$
5,147,294
$
4,530,874
Interest-bearing liabilities:
Savings accounts
$
1,459,392
5,445
1.51
$
1,408,493
3,591
1.01
$
1,165,683
366
0.13
NOW accounts
275,801
36
0.05
291,890
40
0.05
301,279
36
0.05
Money market accounts
824,694
5,238
2.58
878,609
3,312
1.50
858,792
303
0.14
Certificates of deposit
552,636
2,685
1.97
487,121
1,062
0.86
522,211
729
0.57
Brokered deposits
330,426
2,509
3.08
148,460
494
1.32
100,000
187
0.76
Total interest-bearing deposits
3,442,949
15,913
1.87
3,214,573
8,499
1.05
2,947,965
1,621
0.22
FHLB advances
448,096
5,105
4.62
392,508
3,703
3.74
55,706
188
1.37
Subordinated debentures
34,298
523
6.18
34,268
524
6.07
34,173
523
6.21
Total borrowings
482,394
5,628
4.73
426,776
4,227
3.93
89,879
711
3.21
Total interest-bearing liabilities
3,925,343
21,541
2.23
3,641,349
12,726
1.39
3,037,844
2,332
0.31
Noninterest-bearing
liabilities:
Noninterest-bearing deposits
721,536
788,572
738,578
Other noninterest-bearing liabilities
101,820
101,621
86,763
Total liabilities
4,748,699
4,531,542
3,863,185
Total stockholders' equity
618,330
615,752
667,689
Total liabilities and stockholders'
equity
$
5,367,029
$
5,147,294
$
4,530,874
Tax equivalent net interest income
34,599
39,347
33,270
Tax equivalent interest rate spread
(4)
2.28
%
2.88
%
3.12
%
Less: tax equivalent adjustment
201
158
—
Net interest income as reported
$
34,398
$
39,189
$
33,270
Net interest-earning assets (5)
$
1,128,377
$
1,194,573
$
1,166,219
Net interest margin (6)
2.76
%
3.22
%
3.21
%
Tax equivalent effect
0.02
0.01
—
Net interest margin on a fully tax
equivalent basis
2.78
%
3.23
%
3.21
%
Ratio of interest-earning assets to
interest-bearing liabilities
128.75
%
132.81
%
138.39
%
Supplemental information:
Total deposits, including demand
deposits
$
4,164,485
$
15,913
$
4,003,145
$
8,499
$
3,686,543
$
1,621
Cost of total deposits
1.55
%
0.84
%
0.18
%
Total funding liabilities, including
demand deposits
$
4,646,879
$
21,541
$
4,429,921
$
12,726
$
3,776,422
$
2,332
Cost of total funding liabilities
1.88
%
1.14
%
0.25
%
(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) 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 and Yield
Trend
(Unaudited)
Average Balances - Trend -
Quarters Ended
March 31, 2023
December 31, 2022
September 30, 2022
June 30, 2022
March 31, 2022
(in thousands)
Interest-earning assets:
Investment securities (1)
$
387,303
$
388,247
$
390,577
$
391,448
$
393,364
Other interest-earning assets
63,426
42,640
27,723
64,678
150,569
Loans held for sale
18,108
22,350
28,046
29,474
29,842
Loans
Commercial loans (2)(3)
2,901,464
2,770,667
2,522,359
2,384,630
2,291,343
Residential real estate loans (3)
1,647,109
1,566,389
1,470,305
1,330,772
1,220,703
Consumer loans (3)
36,310
45,629
63,220
88,943
118,242
Total loans
4,584,883
4,382,685
4,055,884
3,804,345
3,630,288
Total interest-earning assets
5,053,720
4,835,922
4,502,230
4,289,945
4,204,063
Noninterest-earning assets
313,309
311,372
308,734
311,998
326,811
Total assets
$
5,367,029
$
5,147,294
$
4,810,964
$
4,601,943
$
4,530,874
Interest-bearing liabilities:
Savings accounts
$
1,459,392
$
1,408,493
$
1,293,598
$
1,266,912
$
1,165,683
NOW accounts
275,801
291,890
305,777
311,241
301,279
Money market accounts
824,694
878,609
893,452
885,305
858,792
Certificates of deposit
552,636
487,121
486,923
484,484
522,211
Brokered deposits
330,426
148,460
102,875
100,000
100,000
Total interest-bearing deposits
3,442,949
3,214,573
3,082,625
3,047,942
2,947,965
FHLB advances
448,096
392,508
196,036
34,763
55,706
Subordinated debentures
34,298
34,268
34,237
34,207
34,173
Total borrowings
482,394
426,776
230,273
68,970
89,879
Total interest-bearing liabilities
3,925,343
3,641,349
3,312,898
3,116,912
3,037,844
Noninterest-bearing
liabilities:
Noninterest-bearing deposits
721,536
788,572
789,214
768,088
738,578
Other noninterest-bearing liabilities
101,820
101,621
80,304
75,186
86,763
Total liabilities
4,748,699
4,531,542
4,182,416
3,960,186
3,863,185
Total stockholders' equity
618,330
615,752
628,548
641,757
667,689
Total liabilities and stockholders'
equity
$
5,367,029
$
5,147,294
$
4,810,964
$
4,601,943
$
4,530,874
Annualized Yield Trend -
Quarters Ended
March 31, 2023
December 31, 2022
September 30, 2022
June 30, 2022
March 31, 2022
Interest-earning assets:
Investment securities (1)
2.18
%
2.09
%
2.00
%
1.92
%
1.75
%
Other interest-earning assets
5.13
%
3.34
%
2.05
%
0.81
%
0.16
%
Loans held for sale
6.41
%
5.93
%
5.33
%
4.51
%
3.59
%
Commercial loans (2)(3)
5.15
%
4.92
%
4.45
%
4.25
%
3.91
%
Residential real estate loans (3)
3.85
%
3.64
%
3.50
%
3.37
%
3.37
%
Consumer loans (3)
5.80
%
5.50
%
4.99
%
4.71
%
4.59
%
Total loans
4.69
%
4.47
%
4.11
%
3.96
%
3.75
%
Total interest-earning assets
4.51
%
4.27
%
3.93
%
3.73
%
3.43
%
Interest-bearing liabilities:
Savings accounts
1.51
%
1.01
%
0.37
%
0.20
%
0.13
%
NOW accounts
0.05
%
0.05
%
0.05
%
0.05
%
0.05
%
Money market accounts
2.58
%
1.50
%
0.61
%
0.30
%
0.14
%
Certificates of deposit
1.97
%
0.86
%
0.64
%
0.55
%
0.57
%
Brokered deposits
3.08
%
1.32
%
0.27
%
0.20
%
0.76
%
Total interest-bearing deposits
1.87
%
1.05
%
0.45
%
0.27
%
0.22
%
FHLB advances
4.62
%
3.74
%
2.45
%
1.36
%
1.37
%
Subordinated debentures
6.18
%
6.07
%
6.07
%
6.14
%
6.21
%
Total borrowings
4.73
%
3.93
%
2.99
%
3.74
%
3.21
%
Total interest-bearing liabilities
2.23
%
1.39
%
0.63
%
0.34
%
0.31
%
(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.
HarborOne Bancorp,
Inc.
Selected Financial
Highlights
(Unaudited)
Quarters Ended
March 31,
December 31,
September 30,
June 30,
March 31,
Performance Ratios
(annualized):
2023
2022
2022
2022
2022
(dollars in thousands)
Return on average assets (ROAA)
0.54
%
0.74
%
1.14
%
0.87
%
1.08
%
Return on average equity (ROAE)
4.72
%
6.22
%
8.76
%
6.22
%
7.35
%
Total noninterest expense
$
31,509
$
34,644
$
34,473
$
34,954
$
34,835
Less: Amortization of other intangible
assets
189
189
235
235
235
Total adjusted noninterest expense
$
31,320
$
34,455
$
34,238
$
34,719
$
34,600
Net interest and dividend income
$
34,398
$
39,189
$
39,332
$
37,195
$
33,270
Total noninterest income
8,690
9,900
14,245
14,103
19,061
Total revenue
$
43,088
$
49,089
$
53,577
$
51,298
$
52,331
Efficiency ratio (1)
72.69
%
70.19
%
63.90
%
67.68
%
66.12
%
(1) This non-GAAP measure represents
adjusted noninterest expense divided by total revenue
At or for the Quarters
Ended
March 31,
December 31,
September 30,
June 30,
March 31,
Asset Quality
2023
2022
2022
2022
2022
(dollars in thousands)
Total nonperforming assets
$
12,300
$
14,840
$
23,367
$
24,441
$
26,109
Nonperforming assets to total assets
0.22
%
0.28
%
0.47
%
0.52
%
0.57
%
Allowance for credit losses on loans to
total loans
1.02
%
0.99
%
1.06
%
1.11
%
1.12
%
Net charge-offs (recoveries)
$
(11
)
$
2,067
$
(799
)
$
(504
)
$
2,730
Annualized net charge-offs
(recoveries)/average loans
—
%
0.19
%
(0.08
)
%
(0.05
)
%
0.30
%
Allowance for credit losses on loans to
nonperforming loans
383.50
%
305.93
%
191.60
%
178.41
%
159.96
%
HarborOne Bancorp,
Inc.
Selected Financial
Highlights
(Unaudited)
Quarters Ended
March 31,
December 31,
September 30,
June 30,
March 31,
Capital and Share Related
2023
2022
2022
2022
2022
(dollars in thousands, except share
data)
Common stock outstanding
47,063,087
48,961,452
49,202,660
49,989,007
51,257,696
Book value per share
$
12.74
$
12.60
$
12.43
$
12.49
$
12.66
Tangible common equity:
Total stockholders' equity
$
599,794
$
616,976
$
611,370
$
624,478
$
649,065
Less: Goodwill
69,802
69,802
69,802
69,802
69,802
Less: Other intangible assets (1)
2,082
2,272
2,461
2,695
2,930
Tangible common equity
$
527,910
$
544,902
$
539,107
$
551,981
$
576,333
Tangible book value per share (2)
$
11.22
$
11.13
$
10.96
$
11.04
$
11.24
Tangible assets:
Total assets
$
5,572,858
$
5,359,545
$
4,987,643
$
4,704,044
$
4,591,325
Less: Goodwill
69,802
69,802
69,802
69,802
69,802
Less: Other intangible assets
2,082
2,272
2,461
2,695
2,930
Tangible assets
$
5,500,974
$
5,287,471
$
4,915,380
$
4,631,547
$
4,518,593
Tangible common equity / tangible assets
(3)
9.60
%
10.31
%
10.97
%
11.92
%
12.75
%
(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
March 31,
December 31,
March 31,
March 31,
December 31,
March 31,
2023
2022
2022
2023
2022
2022
(in thousands)
Net interest and dividend income
$
327
$
419
$
350
$
34,562
$
39,258
$
33,424
Provision (benefit) for credit losses
—
—
—
1,866
2,108
338
Net interest and dividend income, after
provision for loan losses
327
419
350
32,696
37,150
33,086
Mortgage banking income:
Gain on sale of mortgage loans
2,224
2,301
5,322
—
—
—
Intersegment gain (loss)
454
553
837
(348
)
(997
)
(608
)
Changes in mortgage servicing rights fair
value
(1,556
)
(2,368
)
4,695
(136
)
(263
)
590
Other
2,015
2,122
2,325
201
203
233
Total mortgage banking income (loss)
3,137
2,608
13,179
(283
)
(1,057
)
215
Other noninterest income (loss)
—
126
9
5,942
7,779
5,887
Total noninterest income
3,137
2,734
13,188
5,659
6,722
6,102
Noninterest expense
5,322
5,452
7,761
26,190
28,744
26,825
(Loss) income before income taxes
(1,858
)
(2,299
)
5,777
12,165
15,128
12,363
Provision for income taxes
(565
)
—
1,541
3,115
2,817
3,557
Net (loss) income
$
(1,293
)
$
(2,299
)
$
4,236
$
9,050
$
12,311
$
8,806
Category: Earnings
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230427005228/en/
Linda Simmons, EVP, CFO (508) 895-1379
HarborOne Bancorp (NASDAQ:HONE)
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