HarborOne Bancorp, Inc. (the “Company” or “HarborOne”) (NASDAQ:
HONE), the holding company for HarborOne Bank (the “Bank”),
announced net income of $8.4 million, or $0.20 per diluted share,
for the third quarter of 2023, compared to net income of $7.5
million, or $0.17 per diluted share, for the preceding quarter and
net income of $13.8 million, or $0.30 per diluted share, for the
same period last year.
Selected Financial Highlights:
- Deposit growth, excluding brokered deposits, of $160.5 million,
or 4.0%, on a linked-quarter basis.
- Reduced noninterest expense 7.5% as compared to the prior year
third quarter.
- Loan growth of $24.7 million, or 0.5%, on a linked-quarter
basis.
- Commenced sixth share repurchase program.
“As many of our competitors struggled with deposit contraction,
we grew the average balance of customer deposits at a 14.7%
annualized pace in Q3. This strong deposit growth allowed the
pay-down of over $167 million in wholesale funds during the
quarter,” said Joseph F. Casey, President and CEO. “Additionally,
we expect to redeem $35 million in subordinated debt on December 1,
2023, which carries a current annualized expense rate of 8.45%. And
we continue to return shareholder value, commencing a sixth stock
buyback plan in Q3, purchasing $6.4 million of HarborOne shares at
an average cost of $9.81 per share.”
Net Interest Income
The Company’s net interest and dividend income was $31.1 million
for the quarter ended September 30, 2023, compared to $32.1 million
for the quarter ended June 30, 2023, and $39.3 million for the
quarter ended September 30, 2022. The tax equivalent interest rate
spread and net interest margin were 1.70% and 2.34%, respectively,
for the quarter ended September 30, 2023, compared to 1.89% and
2.45%, respectively, for the quarter ended June 30, 2023, and 3.30%
and 3.47%, respectively, for the quarter ended September 30,
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 a higher cost of funding,
partially offset by increased loan balances and yields, with
liability repricing outpacing assets. While the yield on
interest-earning assets increased 11 basis points from the
preceding quarter, the cost of interest-bearing liabilities
increased 30 basis points, in a competitive deposit pricing
market.
The $8.3 million decrease in net interest and dividend income
from the prior year quarter reflects an increase of $26.9 million,
or 514.2%, in total interest expense, partially offset by an
increase of $18.6 million, or 41.8%, in total interest and dividend
income. The changes reflect rate and volume changes in both
interest-bearing assets and liabilities. The cost of
interest-bearing liabilities increased 241 basis points, while the
average balance increased $880.8 million, and the yield on
interest-earning assets increased 81 basis points, while the
average balance increased $808.0 million.
Noninterest Income
Total noninterest income decreased $1.1 million, or 8.4%, to
$11.6 million for the quarter ended September 30, 2023, from $12.7
million for the quarter ended June 30, 2023. Persistent low
inventory of for-sale residential real estate and rising mortgage
interest rates continued to impact the results of HarborOne
Mortgage, LLC (“HarborOne Mortgage”) with gain on loan sales of
$2.7 million from mortgage loan closings of $157.6 million for the
quarter ended September 30, 2023, compared to $3.3 million in gain
on sales from mortgage loan closings of $172.2 million in the
preceding quarter.
The increase in the fair value of mortgage servicing rights
(“MSR”) for the three months ended September 30, 2023 was $770,000,
as compared to an increase of $915,000 in the fair value of MSR for
the three months ended June 30, 2023. The valuation was positively
impacted by key benchmark mortgage rates, which were partially
offset by the impact of MSR price caps used in the valuation model.
The impact on the MSR of principal payments on the underlying
mortgages was $645,000 and $479,000 for the quarters ended
September 30, 2023 and June 30, 2023, respectively.
Total noninterest income decreased $2.6 million, or 18.6%,
compared to the quarter ended September 30, 2022, primarily due to
a $3.0 million, or 36.9%, decrease in mortgage banking income. The
prior year quarter also reflected a $1.8 million increase in the
fair value of MSR. The impact of rising interest rates on the fair
value of MSR diminishes as the valuations reach multiple caps.
Noninterest Expense
Total noninterest expenses were at $31.9 million for the quarter
ended September 30, 2023, as compared to $31.7 million for the
quarter ended June 30, 2023. Compensation and benefits increased
$479,000, primarily reflecting increased incentive accruals
partially offset by decreased salary and payroll tax expense.
Occupancy and equipment expense decreased $203,000, reflecting
recent cost saving measures. HarborOne Mortgage continues to enact
cost saving measures and executed a reduction in force in the third
quarter with an annual cost savings of $564,000.
Total noninterest expenses decreased $2.6 million, or 7.5%, from
the quarter ended September 30, 2022. Compensation and benefits
decreased $2.3 million, primarily reflecting decreased mortgage
origination commission and incentive accruals, and occupancy and
equipment expense decreased $399,000. These decreases were
partially offset by a $647,000 increase in deposit insurance
expense.
Asset Quality and Allowance for Credit Losses
Total nonperforming assets were $18.8 million at September 30,
2023, compared to $20.2 million at June 30, 2023 and $23.4 million
at September 30, 2022. Nonperforming assets as a percentage of
total assets were 0.33% at September 30, 2023, 0.36% at June 30,
2023, and 0.47% at September 30, 2022.
The Company recorded a reversal of provision for credit losses
of $113,000 for the quarter ended September 30, 2023, reflecting a
$586,000 reversal of provision for unfunded commitments, partially
offset by a $474,000 provision for loan credit losses, primarily
for loan growth. Net recoveries totaled $18,000 and $799,000 for
the quarters ended September 30, 2023 and 2022, respectively. Net
charge-offs totaled $2.7 million, or 0.23% of average loans
outstanding on an annualized basis, for the quarter ended June 30,
2023.
The allowance for credit losses (“ACL”) on loans was $48.3
million, or 1.02% of total loans, at September 30, 2023, compared
to $47.8 million, or 1.02% of total loans, at June 30, 2023 and
$44.6 million, or 1.06% of total loans, at September 30, 2022. The
ACL on unfunded commitments, included in other liabilities on the
unaudited Consolidated Balance Sheets, amounted to $4.2 million at
September 30, 2023 as compared to $4.8 million at June 30, 2023 and
$5.5 million at September 30, 2022.
Management continues to closely monitor the loan portfolio for
signs of deterioration in light of speculation that commercial real
estate values may deteriorate as the market adjusts to higher
vacancies and interest rates. The commercial real estate portfolio
is centered in New England, with approximately 75% of the portfolio
secured by property located in Massachusetts and Rhode Island.
Approximately 60% of the commercial real estate loans are
fixed-rate loans with, in the opinion of management, limited
near-term maturity risk.
Management also continues to monitor 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
September 30, 2023, business-oriented hotels loans included 13
loans with a total outstanding balance of $114.4 million,
non-anchored retail space loans included 30 loans with a total
outstanding balance of $40.4 million, and metro office space loans
included two loans with a total outstanding balance of $12.0
million. As of September 30, 2023, there was one metro office space
loan with a carrying value of $7.0 million that was rated doubtful
and on nonaccrual and one business-oriented hotel credit with a
carrying value of $1.7 million that was rated substandard and on
nonaccrual. The other loans in these groups were performing in
accordance with their terms.
Balance Sheet
Total assets were flat, at $5.66 billion as of September 30,
2023 and June 30, 2023, as an increase of $24.7 million in total
loans was offset by decreases in investments and Federal Home Loan
Bank (“FHLB”) stock.
Available-for-sale securities were $271.1 million and $292.0
million at September 30, 2023 and June 30, 2023, respectively. The
unrealized loss on securities available for sale increased to $81.3
million as of September 30, 2023, as compared to $66.5 million of
unrealized losses as of June 30, 2023. Securities held to maturity
were $19.8 million, or 0.3%, of total assets, with a fair value of
$18.7 million.
Loans increased $24.7 million, or 0.5%, to $4.72 billion at
September 30, 2023, from $4.70 billion at June 30, 2023. The
increase in loans for the three months ended September 30, 2023 was
primarily due to increases in commercial real estate loans of $63.2
million and residential real estate loans of $5.2 million,
partially offset by decreases in commercial construction loans of
$37.7 million, commercial and industrial loans of $2.9 million, and
consumer loans of $3.2 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 $4.41 billion at September 30, 2023 and
$4.29 billion at June 30, 2023. Compared to the prior quarter,
non-certificate accounts increased $44.2 million and term
certificate accounts increased $116.3 million, as competitive rate
specials attracted deposits during the quarter. Brokered deposits
decreased $38.1 million. As of September 30, 2023, FDIC-insured
deposits were approximately 66% of total deposits, including Bank
subsidiary deposits. Including Depositors Insurance Fund (“DIF”),
excess insurance coverage that remains available until February 24,
2024, insured deposits are approximately 85% of total deposits,
including Bank subsidiary deposits. Although the Bank exited the
DIF as of February 24, 2023, insurance remains in place for funds
on deposit as of that date for one year or until maturity for term
certificates.
FHLB borrowings decreased $129.1 million to $475.5 million at
September 30, 2023 from $604.6 million at June 30, 2023. As of
September 30, 2023, the Bank had $1.28 billion in available
borrowing capacity across multiple relationships. Additionally, on
October 19, 2023, the Company notified holders of its subordinated
debt that the Company had exercised its option to redeem the debt
effective December 1, 2023. The current interest rate on the $35.0
million outstanding subordinated notes is 8.45%.
Total stockholders’ equity was $584.6 million at September 30,
2023, compared to $595.5 million at June 30, 2023 and $611.4
million at September 30, 2022. Stockholders’ equity decreased 1.8%
when compared to the prior quarter, as earnings were offset by
share repurchases. The Company commenced a sixth share repurchase
program during the third quarter of 2023, repurchasing 652,523
shares at an average price of $9.93, including $0.10 per share of
excise tax, during the three months ended September 30, 2023. The
tangible-common-equity-to-tangible-assets ratio(1) was 9.17% at
September 30, 2023, 9.38% at June 30, 2023, and 10.97% at September
30, 2022. At September 30, 2023, the Company and the Bank had
strong capital positions, exceeded all regulatory capital
requirements, and are considered well-capitalized.
About HarborOne Bancorp, Inc.
HarborOne Bancorp, Inc. is the holding company for HarborOne
Bank, a Massachusetts-chartered trust company. HarborOne Bank
serves the financial needs of consumers, businesses, and
municipalities throughout Eastern Massachusetts and Rhode Island
through a network of 30 full-service banking centers located in
Massachusetts and Rhode Island, and commercial lending offices in
Boston, Massachusetts and Providence, Rhode Island. HarborOne Bank
also provides a range of educational resources through “HarborOne
U,” with free digital content, webinars, and recordings for small
business and personal financial education. HarborOne Mortgage, LLC,
a subsidiary of HarborOne Bank, provides mortgage lending services
throughout New England and other states.
(1) This non-GAAP ratio is total stockholders equity less
goodwill and intangible assets to total assets less goodwill and
intangible assets.
Forward Looking Statements
Certain statements herein constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Exchange Act and are intended to be
covered by the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. We may also make forward-looking
statements in other documents we file with the Securities and
Exchange Commission (“SEC”), in our annual reports to shareholders,
in press releases and other written materials, and in oral
statements made by our officers, directors or employees. Such
statements may be identified by words such as “believes,” “will,”
“would,” “expects,” “project,” “may,” “could,” “developments,”
“strategic,” “launching,” “opportunities,” “anticipates,”
“estimates,” “intends,” “plans,” “targets” and similar expressions.
These statements are based upon the current beliefs and
expectations of the Company’s management and are subject to
significant risks and uncertainties. Actual results may differ
materially from those set forth in the forward-looking statements
as a result of numerous factors. Factors that could cause such
differences to exist include, but are not limited to, changes in
general business and economic conditions (including inflation and
concerns about inflation) on a national basis and in the local
markets in which the Company operates, including changes that
adversely affect borrowers’ ability to service and repay the
Company’s loans; changes in customer behavior; ongoing turbulence
in the capital and debt markets and the impact of such conditions
on the Company’s business activities; changes in interest rates;
increases in loan default and charge-off rates; decreases in the
value of securities in the Company’s investment portfolio;
fluctuations in real estate values; the possibility that future
credit losses may be higher than currently expected due to changes
in economic assumptions, customer behavior or adverse economic
developments; the adequacy of loan loss reserves; decreases in
deposit levels necessitating increased borrowing to fund loans and
investments; competitive pressures from other financial
institutions; acquisitions may not produce results at levels or
within time frames originally anticipated; cybersecurity incidents,
fraud, natural disasters, war, terrorism, civil unrest, and future
pandemics; changes in regulation; changes in accounting standards
and practices; the risk that goodwill and intangibles recorded in
the Company’s financial statements will become impaired; demand for
loans in the Company’s market area; the Company’s ability to
attract and maintain deposits; risks related to the implementation
of acquisitions, dispositions, and restructurings; the risk that
the Company may not be successful in the implementation of its
business strategy; changes in assumptions used in making such
forward-looking statements and the risk factors described in the
Annual Report on Form 10‑K and Quarterly Reports on Form 10‑Q as
filed with the SEC, which are available at the SEC’s website,
www.sec.gov. Should one or more of these risks materialize or
should underlying beliefs or assumptions prove incorrect,
HarborOne’s actual results could differ materially from those
discussed. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
of this release. The Company disclaims any obligation to publicly
update or revise any forward-looking statements to reflect changes
in underlying assumptions or factors, new information, future
events or other changes, except as required by law.
Use of Non-GAAP Measures
In addition to results presented in accordance with generally
accepted accounting principles (“GAAP”), this press release
contains certain non-GAAP financial measures. The Company’s
management believes that the supplemental non-GAAP information,
which consists of the efficiency ratio, tangible common equity to
tangible assets ratio and tangible book value per share, is
utilized by regulators and market analysts to evaluate a company’s
financial condition and therefore, such information is useful to
investors. These disclosures should not be viewed as a substitute
for financial results determined in accordance with GAAP, nor are
they necessarily comparable to non-GAAP performance measures which
may be presented by other companies. Because non-GAAP financial
measures are not standardized, it may not be possible to compare
these financial measures with other companies’ non-GAAP financial
measures having the same or similar names.
HarborOne Bancorp, Inc.
Consolidated Balance Sheet Trend (Unaudited)
September 30,
June 30,
March 31,
December 31,
September 30,
(in thousands)
2023
2023
2023
2022
2022
Assets
Cash and due from banks
$
38,573
$
43,525
$
38,989
$
39,712
$
39,910
Short-term investments
208,211
209,326
210,765
58,305
46,044
Total cash and cash equivalents
246,784
252,851
249,754
98,017
85,954
Securities available for sale, at fair
value
271,078
292,012
303,059
301,149
304,852
Securities held to maturity, at amortized
cost
19,795
19,839
19,838
19,949
15,000
Federal Home Loan Bank stock, at cost
23,378
27,123
23,589
20,071
15,973
Asset held for sale
966
966
—
—
—
Loans held for sale, at fair value
17,796
20,949
13,956
18,544
18,805
Loans:
Commercial real estate
2,349,886
2,286,688
2,286,727
2,250,344
2,041,905
Commercial construction
191,224
228,902
212,689
199,311
185,062
Commercial and industrial
450,547
453,422
423,036
424,275
397,112
Total commercial loans
2,991,657
2,969,012
2,922,452
2,873,930
2,624,079
Residential real estate
1,706,950
1,701,766
1,667,934
1,634,319
1,520,809
Consumer
24,247
27,425
32,246
41,421
52,466
Loans
4,722,854
4,698,203
4,622,632
4,549,670
4,197,354
Less: Allowance for credit losses on
loans
(48,312)
(47,821)
(46,994)
(45,236)
(44,621)
Net loans
4,674,542
4,650,382
4,575,638
4,504,434
4,152,733
Mortgage servicing rights, at fair
value
49,201
48,176
47,080
48,138
49,861
Goodwill
69,802
69,802
69,802
69,802
69,802
Other intangible assets
1,704
1,893
2,082
2,272
2,461
Other assets
289,341
275,261
268,060
277,169
272,202
Total assets
$
5,664,387
$
5,659,254
$
5,572,858
$
5,359,545
$
4,987,643
Liabilities and Stockholders'
Equity
Deposits:
Demand deposit accounts
$
708,847
$
717,572
$
726,548
$
762,576
$
795,945
NOW accounts
289,141
286,956
287,376
297,692
308,191
Regular savings and club accounts
1,324,635
1,390,906
1,455,318
1,468,172
1,289,825
Money market deposit accounts
951,128
834,120
796,008
861,704
889,517
Term certificate accounts
859,266
742,931
653,553
497,975
484,936
Brokered deposits
276,941
315,003
322,927
301,380
114,696
Total deposits
4,409,958
4,287,488
4,241,730
4,189,499
3,883,110
FHLB borrowings
475,470
604,568
590,665
400,675
345,684
Subordinated debt
34,380
34,348
34,317
34,285
34,254
Other liabilities and accrued expenses
159,945
137,318
106,352
118,110
113,225
Total liabilities
5,079,753
5,063,722
4,973,064
4,742,569
4,376,273
Common stock
597
597
597
596
593
Additional paid-in capital
485,144
484,544
483,831
483,031
480,617
Unearned compensation - ESOP
(26,245)
(26,704)
(27,164)
(27,623)
(28,083)
Retained earnings
369,930
364,709
360,454
356,438
350,049
Treasury stock
(187,803)
(181,324)
(175,514)
(148,384)
(143,125)
Accumulated other comprehensive loss
(56,989)
(46,290)
(42,410)
(47,082)
(48,681)
Total stockholders' equity
584,634
595,532
599,794
616,976
611,370
Total liabilities and stockholders'
equity
$
5,664,387
$
5,659,254
$
5,572,858
$
5,359,545
$
4,987,643
HarborOne Bancorp, Inc.
Consolidated Statements of Net Income - Trend
(Unaudited)
Quarters Ended
September 30,
June 30,
March 31,
December 31,
September 30,
(in thousands, except share data)
2023
2023
2023
2022
2022
Interest and dividend income:
Interest and fees on loans
$
58,124
$
55,504
$
52,771
$
49,177
$
42,065
Interest on loans held for sale
370
326
286
334
377
Interest on securities
2,003
2,035
2,079
2,045
1,971
Other interest and dividend income
2,667
2,935
803
359
143
Total interest and dividend income
63,164
60,800
55,939
51,915
44,556
Interest expense:
Interest on deposits
25,039
20,062
15,913
8,499
3,491
Interest on FHLB and FRB borrowings
6,439
8,114
5,105
3,703
1,209
Interest on subordinated debentures
606
524
523
524
524
Total interest expense
32,084
28,700
21,541
12,726
5,224
Net interest and dividend income
31,080
32,100
34,398
39,189
39,332
Provision (benefit) for credit losses
(113)
3,283
1,866
2,108
668
Net interest and dividend income, after
provision for credit losses
31,193
28,817
32,532
37,081
38,664
Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans
2,704
3,300
2,224
2,301
3,809
Changes in mortgage servicing rights fair
value
125
436
(1,692)
(2,631)
1,816
Other
2,270
2,312
2,216
2,325
2,453
Total mortgage banking income
5,099
6,048
2,748
1,995
8,078
Deposit account fees
5,133
5,012
4,733
5,031
4,870
Income on retirement plan annuities
146
128
119
118
119
Bank-owned life insurance income
531
511
500
501
503
Other income
689
963
590
2,255
675
Total noninterest income
11,598
12,662
8,690
9,900
14,245
Noninterest expenses:
Compensation and benefits
18,699
18,220
17,799
20,104
20,991
Occupancy and equipment
4,430
4,633
5,040
4,935
4,829
Data processing
2,548
2,403
2,346
2,359
2,311
Loan expense
385
417
313
169
355
Marketing
794
925
1,181
862
850
Professional fees
1,374
1,114
1,501
1,446
1,457
Deposit insurance
1,004
1,176
510
385
357
Other expenses
2,638
2,837
2,819
4,384
3,323
Total noninterest expenses
31,872
31,725
31,509
34,644
34,473
Income before income taxes
10,919
9,754
9,713
12,337
18,436
Income tax provision
2,507
2,275
2,416
2,760
4,678
Net income
$
8,412
$
7,479
$
7,297
$
9,577
$
13,758
Earnings per common share:
Basic
$
0.20
$
0.17
$
0.16
$
0.21
$
0.30
Diluted
$
0.20
$
0.17
$
0.16
$
0.21
$
0.30
Weighted average shares outstanding:
Basic
42,876,893
43,063,507
44,857,224
45,321,491
45,830,737
Diluted
42,983,477
43,133,455
45,284,240
45,861,658
46,420,527
HarborOne Bancorp, Inc.
Consolidated Statements of Net Income - Trend
(Unaudited)
For the Nine Months Ended
September 30,
(dollars in thousands, except share
data)
2023
2022
$ Change
% Change
Interest and dividend income:
Interest and fees on loans
$
166,399
$
113,163
$
53,236
47.0
%
Interest on loans held for sale
982
972
10
1.0
Interest on securities
6,117
5,545
572
10.3
Other interest and dividend income
6,405
335
6,070
1811.9
Total interest and dividend income
179,903
120,015
59,888
49.9
Interest expense:
Interest on deposits
61,014
7,131
53,883
755.6
Interest on FHLB and FRB borrowings
19,658
1,516
18,142
1196.7
Interest on subordinated debentures
1,653
1,571
82
5.2
Total interest expense
82,325
10,218
72,107
705.7
Net interest and dividend income
97,578
109,797
(12,219)
(11.1)
Provision for credit losses
5,036
3,552
1,484
41.8
Net interest and dividend income, after
provision for credit losses
92,542
106,245
(13,703)
(12.9)
Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans
8,228
13,669
(5,441)
(39.8)
Changes in mortgage servicing rights fair
value
(1,131)
7,963
(9,094)
(114.2)
Other
6,798
7,623
(825)
(10.8)
Total mortgage banking income
13,895
29,255
(15,360)
(52.5)
Deposit account fees
14,878
14,234
644
4.5
Income on retirement plan annuities
393
338
55
16.3
Bank-owned life insurance income
1,542
1,480
62
4.2
Other income
2,242
2,102
140
6.7
Total noninterest income
32,950
47,409
(14,459)
(30.5)
Noninterest expenses:
Compensation and benefits
54,718
63,169
(8,451)
(13.4)
Occupancy and equipment
14,103
14,832
(729)
(4.9)
Data processing
7,297
6,811
486
7.1
Loan expense
1,115
1,218
(103)
(8.5)
Marketing
2,900
3,054
(154)
(5.0)
Professional fees
3,989
4,676
(687)
(14.7)
Deposit insurance
2,690
1,060
1,630
153.8
Other expenses
8,294
9,442
(1,148)
(12.2)
Total noninterest expenses
95,106
104,262
(9,156)
(8.8)
Income before income taxes
30,386
49,392
(19,006)
(38.5)
Income tax provision
7,198
13,380
(6,182)
(46.2)
Net income
$
23,188
$
36,012
$
(12,824)
(35.6)
%
Earnings per common share:
Basic
$
0.53
$
0.77
Diluted
$
0.53
$
0.76
Weighted average shares outstanding:
Basic
43,591,954
46,875,312
Diluted
43,793,137
47,541,647
HarborOne Bancorp, Inc.
Average Balances / Yields (Unaudited)
Quarters Ended
September 30, 2023
June 30, 2023
September 30, 2022
Average
Average
Average
Outstanding
Yield/
Outstanding
Yield/
Outstanding
Yield/
Balance
Interest
Cost (8)
Balance
Interest
Cost (8)
Balance
Interest
Cost (8)
(dollars in thousands)
Interest-earning assets:
Investment securities (1)
$
375,779
$
2,003
2.11
%
$
381,762
$
2,035
2.14
%
$
390,577
$
1,971
2.00
%
Other interest-earning assets
207,234
2,667
5.11
238,891
2,935
4.93
27,723
143
2.05
Loans held for sale
20,919
370
7.02
19,614
326
6.67
28,046
377
5.33
Loans
Commercial loans (2)(3)
2,980,817
40,438
5.38
2,938,292
38,842
5.30
2,522,359
28,298
4.45
Residential real estate loans (3)(4)
1,700,383
17,525
4.09
1,682,860
16,456
3.92
1,470,305
12,972
3.50
Consumer loans (3)
25,126
412
6.51
29,025
419
5.79
63,220
795
4.99
Total loans
4,706,326
58,375
4.92
4,650,177
55,717
4.81
4,055,884
42,065
4.11
Total interest-earning assets
5,310,258
63,415
4.74
5,290,444
61,013
4.63
4,502,230
44,556
3.93
Noninterest-earning assets
314,030
305,132
308,734
Total assets
$
5,624,288
$
5,595,576
$
4,810,964
Interest-bearing liabilities:
Savings accounts
$
1,360,728
6,787
1.98
$
1,421,622
6,165
1.74
$
1,293,598
1,211
0.37
NOW accounts
274,329
75
0.11
280,501
59
0.08
305,777
42
0.05
Money market accounts
910,694
8,355
3.64
802,373
6,256
3.13
893,452
1,382
0.61
Certificates of deposit
818,182
7,212
3.50
708,087
5,273
2.99
486,923
787
0.64
Brokered deposits
287,428
2,610
3.60
281,614
2,309
3.29
102,875
69
0.27
Total interest-bearing deposits
3,651,361
25,039
2.72
3,494,197
20,062
2.30
3,082,625
3,491
0.45
FHLB and FRB borrowings
508,001
6,439
5.03
666,345
8,114
4.88
196,036
1,209
2.45
Subordinated debentures
34,364
606
7.00
34,331
524
6.12
34,237
524
6.07
Total borrowings
542,365
7,045
5.15
700,676
8,638
4.94
230,273
1,733
2.99
Total interest-bearing liabilities
4,193,726
32,084
3.04
4,194,873
28,700
2.74
3,312,898
5,224
0.63
Noninterest-bearing
liabilities:
Noninterest-bearing deposits
705,009
712,081
789,214
Other noninterest-bearing liabilities
126,742
88,363
80,304
Total liabilities
5,025,477
4,995,317
4,182,416
Total stockholders' equity
598,811
600,259
628,548
Total liabilities and stockholders'
equity
$
5,624,288
$
5,595,576
$
4,810,964
Tax equivalent net interest income
31,331
32,313
39,332
Tax equivalent interest rate spread
(5)
1.70
%
1.89
%
3.30
%
Less: tax equivalent adjustment
251
213
—
Net interest income as reported
$
31,080
$
32,100
$
39,332
Net interest-earning assets (6)
$
1,116,532
$
1,095,571
$
1,189,332
Net interest margin (7)
2.32
%
2.43
%
3.47
%
Tax equivalent effect
0.02
0.02
—
Net interest margin on a fully tax
equivalent basis
2.34
%
2.45
%
3.47
%
Ratio of interest-earning assets to
interest-bearing liabilities
126.62
%
126.12
%
135.90
%
Supplemental information:
Total deposits, including demand
deposits
$
4,356,370
$
25,039
$
4,206,278
$
20,062
$
3,871,839
$
3,491
Cost of total deposits
2.28
%
1.91
%
0.36
%
Total funding liabilities, including
demand deposits
$
4,898,735
$
32,084
$
4,906,954
$
28,700
$
4,102,112
$
5,224
Cost of total funding liabilities
2.60
%
2.35
%
0.51
%
(1) Includes securities available for sale
and securities held to maturity.
(2) Tax-exempt income on industrial
revenue bonds is included in commercial loans on a tax-equivalent
basis.
(3) Includes nonaccruing loan balances and
interest received on such loans.
(4) Includes the basis adjustments of
certain loans included in fair value hedging relationships.
(5) Net interest rate spread represents
the difference between the yield on average interest-earning assets
and the cost of average interest-bearing liabilities.
(6) Net interest-earning assets represents
total interest-earning assets less total interest-bearing
liabilities.
(7) Net interest margin represents net
interest income divided by average total interest-earning
assets.
(8) Annualized.
HarborOne Bancorp, Inc.
Average Balances / Yields (Unaudited)
For the Nine Months
Ended
September 30, 2023
September 30, 2022
Average
Average
Outstanding
Yield/
Outstanding
Yield/
Balance
Interest
Cost (8)
Balance
Interest
Cost (8)
(dollars in thousands)
Interest-earning assets:
Investment securities (1)
$
381,572
$
6,117
2.14
%
$
391,786
$
5,545
1.89
%
Other interest-earning assets
170,377
6,405
5.03
80,540
335
0.56
Loans held for sale
19,557
982
6.71
29,114
972
4.46
Loans
Commercial loans (2)(3)
2,940,483
116,116
5.28
2,400,290
75,688
4.22
Residential real estate loans (3)(4)
1,676,979
49,598
3.95
1,341,508
34,296
3.42
Consumer loans (3)
30,112
1,350
5.99
89,934
3,179
4.73
Total loans
4,647,574
167,064
4.81
3,831,732
113,163
3.95
Total interest-earning assets
5,219,080
180,568
4.63
4,333,172
120,015
3.70
Noninterest-earning assets
310,826
315,781
Total assets
$
5,529,906
$
4,648,953
Interest-bearing liabilities:
Savings accounts
$
1,413,553
18,397
1.74
$
1,242,533
2,203
0.24
NOW accounts
276,872
170
0.08
306,115
116
0.05
Money market accounts
846,235
19,849
3.14
879,310
2,320
0.35
Certificates of deposit
693,941
15,170
2.92
497,744
2,186
0.59
Brokered deposits
299,665
7,428
3.31
100,969
306
0.41
Total interest-bearing deposits
3,530,266
61,014
2.31
3,026,671
7,131
0.32
FHLB and FRB borrowings
541,034
19,658
4.86
96,015
1,516
2.11
Subordinated debentures
34,331
1,653
6.44
34,206
1,571
6.14
Total borrowings
575,365
21,311
4.95
130,221
3,087
3.17
Total interest-bearing liabilities
4,105,631
82,325
2.68
3,156,892
10,218
0.43
Noninterest-bearing
liabilities:
Noninterest-bearing deposits
712,815
765,479
Other noninterest-bearing liabilities
105,732
80,727
Total liabilities
4,924,178
4,003,098
Total stockholders' equity
605,728
645,855
Total liabilities and stockholders'
equity
$
5,529,906
$
4,648,953
Tax equivalent net interest income
98,243
109,797
Tax equivalent interest rate spread
(5)
1.95
%
3.27
%
Less: tax equivalent adjustment
665
—
Net interest income as reported
$
97,578
$
109,797
Net interest-earning assets (6)
$
1,113,449
$
1,176,280
Net interest margin (7)
2.50
%
3.39
%
Tax equivalent effect
0.02
—
Net interest margin on a fully tax
equivalent basis
2.52
%
3.39
%
Ratio of interest-earning assets to
interest-bearing liabilities
127.12
%
137.26
%
Supplemental information:
Total deposits, including demand
deposits
$
4,243,081
$
61,014
$
3,792,150
$
7,131
Cost of total deposits
1.92
%
0.25
%
Total funding liabilities, including
demand deposits
$
4,818,446
$
82,325
$
3,922,371
$
10,218
Cost of total funding liabilities
2.28
%
0.35
%
(1) Includes securities available for sale
and securities held to maturity.
(2) Tax-exempt income on industrial
revenue bonds is included in commercial loans on a tax-equivalent
basis.
(3) Includes nonaccruing loan balances and
interest received on such loans.
(4) Includes the basis adjustments of
certain loans included in fair value hedging relationships.
(5) Net interest rate spread represents
the difference between the yield on average interest-earning assets
and the cost of average interest-bearing liabilities.
(6) Net interest-earning assets represents
total interest-earning assets less total interest-bearing
liabilities.
(7) Net interest margin represents net
interest income divided by average total interest-earning
assets.
(8) Annualized.
HarborOne Bancorp, Inc.
Average Balances and Yield Trend (Unaudited)
Average Balances - Trend -
Quarters Ended
September 30, 2023
June 30, 2023
March 31, 2023
December 31, 2022
September 30, 2022
(in thousands)
Interest-earning assets:
Investment securities (1)
$
375,779
$
381,762
$
387,303
$
388,247
$
390,577
Other interest-earning assets
207,234
238,891
63,426
42,640
27,723
Loans held for sale
20,919
19,614
18,108
22,350
28,046
Loans
Commercial loans (2)(3)
2,980,817
2,938,292
2,901,464
2,770,667
2,522,359
Residential real estate loans (3)(4)
1,700,383
1,682,860
1,647,109
1,566,389
1,470,305
Consumer loans (3)
25,126
29,025
36,310
45,629
63,220
Total loans
4,706,326
4,650,177
4,584,883
4,382,685
4,055,884
Total interest-earning assets
5,310,258
5,290,444
5,053,720
4,835,922
4,502,230
Noninterest-earning assets
314,030
305,132
313,309
311,372
308,734
Total assets
$
5,624,288
$
5,595,576
$
5,367,029
$
5,147,294
$
4,810,964
Interest-bearing liabilities:
Savings accounts
$
1,360,728
$
1,421,622
$
1,459,392
$
1,408,493
$
1,293,598
NOW accounts
274,329
280,501
275,801
291,890
305,777
Money market accounts
910,694
802,373
824,694
878,609
893,452
Certificates of deposit
818,182
708,087
552,636
487,121
486,923
Brokered deposits
287,428
281,614
330,426
148,460
102,875
Total interest-bearing deposits
3,651,361
3,494,197
3,442,949
3,214,573
3,082,625
FHLB and FRB borrowings
508,001
666,345
448,096
392,508
196,036
Subordinated debentures
34,364
34,331
34,298
34,268
34,237
Total borrowings
542,365
700,676
482,394
426,776
230,273
Total interest-bearing liabilities
4,193,726
4,194,873
3,925,343
3,641,349
3,312,898
Noninterest-bearing
liabilities:
Noninterest-bearing deposits
705,009
712,081
721,536
788,572
789,214
Other noninterest-bearing liabilities
126,742
88,363
101,820
101,621
80,304
Total liabilities
5,025,477
4,995,317
4,748,699
4,531,542
4,182,416
Total stockholders' equity
598,811
600,259
618,330
615,752
628,548
Total liabilities and stockholders'
equity
$
5,624,288
$
5,595,576
$
5,367,029
$
5,147,294
$
4,810,964
Annualized Yield Trend -
Quarters Ended
September 30, 2023
June 30, 2023
March 31, 2023
December 31, 2022
September 30, 2022
Interest-earning assets:
Investment securities (1)
2.11
%
2.14
%
2.18
%
2.09
%
2.00
%
Other interest-earning assets
5.11
%
4.93
%
5.13
%
3.34
%
2.05
%
Loans held for sale
7.02
%
6.67
%
6.41
%
5.93
%
5.33
%
Commercial loans (2)(3)
5.38
%
5.30
%
5.15
%
4.92
%
4.45
%
Residential real estate loans (3)(4)
4.09
%
3.92
%
3.85
%
3.64
%
3.50
%
Consumer loans (3)
6.51
%
5.79
%
5.80
%
5.50
%
4.99
%
Total loans
4.92
%
4.81
%
4.69
%
4.47
%
4.11
%
Total interest-earning assets
4.74
%
4.63
%
4.51
%
4.27
%
3.93
%
Interest-bearing liabilities:
Savings accounts
1.98
%
1.74
%
1.51
%
1.01
%
0.37
%
NOW accounts
0.11
%
0.08
%
0.05
%
0.05
%
0.05
%
Money market accounts
3.64
%
3.13
%
2.58
%
1.50
%
0.61
%
Certificates of deposit
3.50
%
2.99
%
1.97
%
0.86
%
0.64
%
Brokered deposits
3.60
%
3.29
%
3.08
%
1.32
%
0.27
%
Total interest-bearing deposits
2.72
%
2.30
%
1.87
%
1.05
%
0.45
%
FHLB and FRB borrowings
5.03
%
4.88
%
4.62
%
3.74
%
2.45
%
Subordinated debentures
7.00
%
6.12
%
6.18
%
6.07
%
6.07
%
Total borrowings
5.15
%
4.94
%
4.73
%
3.93
%
2.99
%
Total interest-bearing liabilities
3.04
%
2.74
%
2.23
%
1.39
%
0.63
%
(1) Includes securities available for sale
and securities held to maturity.
(2) Tax-exempt income on industrial
revenue bonds is included in commercial loans on a tax-equivalent
basis.
(3) Includes nonaccruing loan balances and
interest received on such loans.
(4) Includes the basis adjustments of
certain loans included in fair value hedging relationships.
HarborOne Bancorp, Inc.
Selected Financial Highlights (Unaudited)
Quarters Ended
September 30,
June 30,
March 31,
December 31,
September 30,
Performance Ratios
(annualized):
2023
2023
2023
2022
2022
(dollars in thousands)
Return on average assets (ROAA)
0.60
%
0.54
%
0.54
%
0.74
%
1.14
%
Return on average equity (ROAE)
5.62
%
4.98
%
4.72
%
6.22
%
8.76
%
Total noninterest expense
$
31,872
$
31,725
$
31,509
$
34,644
$
34,473
Less: Amortization of other intangible
assets
189
189
189
189
235
Total adjusted noninterest expense
$
31,683
$
31,536
$
31,320
$
34,455
$
34,238
Net interest and dividend income
$
31,080
$
32,100
$
34,398
$
39,189
$
39,332
Total noninterest income
11,598
12,662
8,690
9,900
14,245
Total revenue
$
42,678
$
44,762
$
43,088
$
49,089
$
53,577
Efficiency ratio (1)
74.24
%
70.45
%
72.69
%
70.19
%
63.90
%
(1) This non-GAAP measure represents
adjusted noninterest expense divided by total revenue
At or for the Quarters
Ended
September 30,
June 30,
March 31,
December 31,
September 30,
Asset Quality
2023
2023
2023
2022
2022
(dollars in thousands)
Total nonperforming assets
$
18,795
$
20,234
$
12,300
$
14,840
$
23,367
Nonperforming assets to total assets
0.33
%
0.36
%
0.22
%
0.28
%
0.47
%
Allowance for credit losses on loans to
total loans
1.02
%
1.02
%
1.02
%
0.99
%
1.06
%
Net charge-offs (recoveries)
$
(18)
$
2,671
$
(11)
$
2,067
$
(799)
Annualized net charge-offs
(recoveries)/average loans
—
%
0.23
%
—
%
0.19
%
(0.08)
%
Allowance for credit losses on loans to
nonperforming loans
257.21
%
236.62
%
383.50
%
305.93
%
191.60
%
HarborOne Bancorp, Inc.
Selected Financial Highlights (Unaudited)
Quarters Ended
September 30,
June 30,
March 31,
December 31,
September 30,
Capital and Share Related
2023
2023
2023
2022
2022
(dollars in thousands, except share
data)
Common stock outstanding
45,915,364
46,575,478
47,063,087
48,961,452
49,202,660
Book value per share
$
12.73
$
12.79
$
12.74
$
12.60
$
12.43
Tangible common equity:
Total stockholders' equity
$
584,634
$
595,532
$
599,794
$
616,976
$
611,370
Less: Goodwill
69,802
69,802
69,802
69,802
69,802
Less: Other intangible assets (1)
1,704
1,893
2,082
2,272
2,461
Tangible common equity
$
513,128
$
523,837
$
527,910
$
544,902
$
539,107
Tangible book value per share (2)
$
11.18
$
11.25
$
11.22
$
11.13
$
10.96
Tangible assets:
Total assets
$
5,664,387
$
5,659,254
$
5,572,858
$
5,359,545
$
4,987,643
Less: Goodwill
69,802
69,802
69,802
69,802
69,802
Less: Other intangible assets
1,704
1,893
2,082
2,272
2,461
Tangible assets
$
5,592,881
$
5,587,559
$
5,500,974
$
5,287,471
$
4,915,380
Tangible common equity / tangible assets
(3)
9.17
%
9.38
%
9.60
%
10.31
%
10.97
%
(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 Key Financial Data (Unaudited)
Quarters Ended
September 30,
June 30,
March 31,
December 31,
September 30,
Statements of Net Income for HarborOne
Bank Segment:
2023
2023
2023
2022
2022
(Dollars in thousands)
Net interest and dividend income
$
31,468
$
32,490
$
34,562
$
39,258
$
39,373
Provision (benefit) for credit losses
(113)
3,283
1,866
2,108
668
Net interest and dividend income, after
provision for credit losses
31,581
29,207
32,696
37,150
38,705
Mortgage banking income:
Intersegment loss
(198)
(358)
(348)
(997)
(904)
Changes in mortgage servicing rights fair
value
18
29
(136)
(263)
164
Other
188
195
201
203
218
Total mortgage banking income (loss)
8
(134)
(283)
(1,057)
(522)
Other noninterest income:
Deposit account fees
5,132
5,013
4,733
5,031
4,870
Income on retirement plan annuities
146
128
119
118
119
Bank-owned life insurance income
531
511
500
501
503
Other income
694
962
590
2,129
688
Total noninterest income
6,511
6,480
5,659
6,722
5,658
Noninterest expenses:
Compensation and benefits
15,238
15,067
14,764
16,531
16,455
Occupancy and equipment
3,828
3,910
4,295
4,236
4,096
Data processing
2,527
2,355
2,305
2,285
2,219
Loan expense
128
96
87
55
68
Marketing
709
787
1,063
747
728
Professional fees
914
699
996
1,027
1,258
Deposit insurance
1,004
1,176
510
385
357
Other expenses
1,924
2,103
2,170
3,478
2,526
Total noninterest expenses
26,272
26,193
26,190
28,744
27,707
Less: Amortization of other intangible
assets
190
189
189
189
234
Total adjusted noninterest expense
26,082
26,004
26,001
28,555
27,473
Income before income taxes
11,820
9,494
12,165
15,128
16,656
Provision for income taxes
2,716
2,193
3,115
2,817
4,166
Net income
$
9,104
$
7,301
$
9,050
$
12,311
$
12,490
Efficiency ratio (1) - QTD
68.67
%
66.73
%
64.65
%
62.10
%
61.01
%
Efficiency ratio (1) - YTD
66.64
%
65.67
%
64.65
%
64.25
%
65.07
%
(1) This non-GAAP measure represents
adjusted noninterest expense divided by total revenue
HarborOne Bancorp, Inc.
Segments Key Financial Data (Unaudited)
Quarters Ended
September 30,
June 30,
March 31,
December 31,
September 30,
Statements of Net Income for HarborOne
Mortgage Segment:
2023
2023
2023
2022
2022
(Dollars in thousands)
Net interest and dividend income
$
199
$
120
$
327
$
419
$
437
Mortgage banking income:
Gain on sale of mortgage loans
2,704
3,300
2,224
2,301
3,809
Intersegment gain
249
90
454
553
698
Changes in mortgage servicing rights fair
value
107
407
(1,556)
(2,368)
1,652
Other
2,082
2,117
2,015
2,122
2,235
Total mortgage banking income
5,142
5,914
3,137
2,608
8,394
Other noninterest income (loss)
(4)
—
—
126
(13)
Total noninterest income
5,138
5,914
3,137
2,734
8,381
Noninterest expenses:
Compensation and benefits
4,014
3,700
3,575
3,825
4,788
Occupancy and equipment
567
688
701
663
691
Data processing
21
48
41
74
92
Loan expense
258
321
226
114
287
Marketing
85
138
118
115
122
Professional fees
155
180
257
115
108
Other expenses
390
418
404
546
522
Total noninterest expenses
5,490
5,493
5,322
5,452
6,610
Income (loss) before income taxes
(153)
541
(1,858)
(2,299)
2,208
Income tax provision (benefit)
(15)
232
(565)
—
687
Net income
$
(138)
$
309
$
(1,293)
$
(2,299)
$
1,521
Efficiency ratio (1) - QTD
102.87
%
91.03
%
153.64
%
172.91
%
74.96
%
Efficiency ratio (1) - YTD
109.91
%
113.87
%
153.64
%
77.92
%
68.42
%
(1) This non-GAAP measure represents
noninterest expense divided by total revenue
Category: Earnings Release
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231023895296/en/
Joseph F. Casey, President and Chief Executive Officer (508)
895-1312 jcasey@harborone.com
HarborOne Bancorp (NASDAQ:HONE)
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Von Dez 2024 bis Jan 2025
HarborOne Bancorp (NASDAQ:HONE)
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Von Jan 2024 bis Jan 2025
