HARBORONE BANCORP, INC.

(HONE)
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HarborOne Bancorp, Inc. Announces 2021 Fourth Quarter and Year End Earnings

01/27/2022 | 08:46am EDT

HarborOne Bancorp, Inc. (the “Company” or “HarborOne”) (NASDAQ: HONE), the holding company for HarborOne Bank (the “Bank”), announced net income of $58.5 million, or $1.14 per diluted share, for the year ended December 31, 2021, an increase of $13.7 million, or 30.6%, compared to net income of $44.8 million, or $0.82 per diluted share, for the year ended December 31, 2020. For the fourth quarter of 2021, net income was $12.6 million, or $0.25 per diluted share, compared to $12.3 million, or $0.24 per diluted share, for the preceding quarter and $17.6 million, or $0.33 per diluted share, for the quarter ended December 31, 2020.

Selected Financial Highlights:

  • For the year ended December 31, 2021, return on average assets was 1.29% and return on average equity was 8.45%.
  • Commercial loan growth of $240.9 million, or 12.1%, year over year, excluding U.S. Small Business Administration Paycheck Protection Program (“PPP”) loans.
  • Net interest income up $11.3 million, or 9.4%, year over year.
  • Recorded a reversal of provision for loan losses of $1.4 million and $7.3 million, for the quarter and year ended December 31, 2021, respectively.
  • Cost of deposits down 46 basis points year over year, from 70 basis points to 24 basis points.
  • Continued metro Boston expansion, opening three greater Boston branches in the fourth quarter.

“We’re tremendously proud to share our Q4 and 2021 annual performance results with our customers, shareholders, and employees. Our vision for the business, our business strategy, and our execution all came together seamlessly in ’21, despite the challenges. The results are a testament to our teamwork approach, unparalleled commitment to execution excellence, and the benefits of living our values while serving our customers,” said Jim Blake, Chief Executive Officer. “Our performance over the last two years is something we’re all extremely proud of.” “We’re battle tested and resilient, and we look forward to continuing our progress against our strategic plan and bringing our truly unique value proposition to our customers and the communities that we serve in the years ahead,” added Joe Casey, President and Chief Operating Officer.

Net Interest Income

The Company’s net interest and dividend income was $34.0 million for the quarter ended December 31, 2021, up $1.2 million, or 3.6%, from $32.8 million for the quarter ended September 30, 2021 and up $1.2 million, or 3.8%, from $32.8 million for the quarter ended December 31, 2020. The tax equivalent interest rate spread and net interest margin were 3.10% and 3.19%, respectively, for the quarter ended December 31, 2021, compared to 2.97% and 3.08%, respectively, for the quarter ended September 30, 2021, and 3.03% and 3.22%, respectively, for the quarter ended December 31, 2020. Net interest margin and the tax equivalent interest rate spread continue to be impacted by low interest rates, elevated loan prepayments, and the recognition of deferred fees on PPP loan forgiveness. The Federal Home Loan Bank of Boston (“FHLB”) borrowing prepayment on September 30, 2021 of $20.0 million resulted in a 66-basis-point decrease in the cost of those funds. Additionally, the continued favorable repricing of deposits and a 5-basis-point increase in the yield on interest-earning assets positively impacted the spread and margin on a linked quarter basis. Although interest rates may begin to increase in 2022, the positive impact of the recognition of deferred loan fees on PPP loan forgiveness will diminish.

The $545,000 increase in total interest and dividend income primarily reflected a 5-basis-point increase in the yield on average interest-earning assets, as excess funds were invested in mortgage-backed securities. The yield on loans continues to be impacted by the recognition of deferred fees due to PPP loan forgiveness, accretion income and prepayment penalties, although the recent uptick in rates is expected to lessen the impact from these yield adjustments in the future. The three months ended December 31, 2021 and September 30, 2021 include the recognition of deferred fees on PPP loans in the amount of $1.2 million and $1.9 million, respectively. The remaining $949,000 in deferred PPP loan fees are expected to be recognized in the first quarter of 2022 as the loans are forgiven. Interest on loans in the fourth quarter included $634,000 in accretion income from the fair value discount on loans acquired in connection with the merger with Coastway Bancorp, Inc. and $861,000 in prepayment penalties on commercial loans. Accretion income and prepayment penalties in the preceding quarter were $675,000 and $436,000, respectively.

The quarter-over-quarter decrease in total interest expense of $637,000 primarily reflected a decrease in interest rates, resulting in a 6-basis-point decrease in the cost of interest-bearing deposits. The mix of deposits continues to shift as customers move to more liquid options. The average balance of certificate of deposit accounts decreased quarter over quarter by $27.4 million, while the average balance of non-certificate accounts increased $36.1 million from the preceding quarter. Average FHLB advances decreased $28.7 million, and the cost of those funds decreased 66 basis points, resulting in a decrease of $238,000 in interest expense on FHLB advances.

The increase in net interest and dividend income from the prior year quarter reflected a decrease of $2.6 million, or 52.4%, in total interest expense, partially offset by a $1.4 million, or 3.6%, decrease in total interest and dividend income. The decreases reflect rate and volume changes in both interest-bearing assets and liabilities. The cost of interest-bearing liabilities decreased 37 basis points, while the average balance increased $92.6 million. The yield on interest-earning assets decreased 30 basis points, while the average balance increased $178.3 million.

Noninterest Income

Total noninterest income decreased $2.8 million, or 12.9%, to $19.2 million for the quarter ended December 31, 2021, from $22.0 million for the quarter ended September 30, 2021. Softening mortgage loan demand resulted in mortgage loan closings of $451.4 million and a gain on loan sales of $10.1 million for the quarter ended December 31, 2021, as compared to $604.9 million in mortgage closings and $12.8 million in gain on sales for the preceding quarter. The locked residential mortgage pipeline decreased $100.8 million and negatively impacted the fair value of the derivative mortgage commitments recorded through the gain on loan sales. The change in the fair value of derivatives included in mortgage banking income was a negative $2.6 million for the three months ended December 31, 2021, as compared to a negative $833,000 for the three months ended September 30, 2021.

The change in the fair value of mortgage servicing rights positively impacted mortgage banking income; however, it was offset by the impact of residential mortgage loan payoffs, resulting in a net decrease of $245,000 and $992,000 in the fair value of mortgage servicing rights for the three months ended December 31, 2021 and September 30, 2021, respectively. The fair value of the mortgage servicing rights increased $1.1 million for the three months ended December 31, 2021, as compared to a $621,000 increase for the three months ended September 30, 2021. Residential mortgage loan payoffs resulted in a decrease of mortgage servicing rights values in the amount of $1.3 million and $1.6 million for the three months ended December 31, 2021 and September 30, 2021, respectively. The 10-year Treasury Constant Maturity rate was flat versus the third quarter of 2021, and prepayments began to slow. The change in the fair value of the mortgage servicing rights is generally consistent with the change in the 10-year Treasury Constant Maturity rate. As interest rates rise and prepayment speeds slow, mortgage servicing rights values tend to increase; conversely, as interest rates fall and prepayment speeds quicken, mortgage servicing rights values tend to decrease.

Deposit account fees increased $125,000, or 2.7%, to $4.8 million for the quarter ended December 31, 2021, from $4.7 million for the quarter ended September 30, 2021. Other income for the quarter ended December 31, 2021 includes a write-off of $431,000 on a direct interest-rate swap related to a non-accrual loan. The quarter ended September 30, 2021 included gain on sale of securities in the amount of $241,000, and no such gain on sale of securities was recorded in the fourth quarter of 2021.

Total noninterest income decreased $17.9 million, or 48.2%, as compared to the quarter ended December 31, 2020, primarily due to an $18.6 million, or 58.5%, decrease in mortgage banking income, driven by the decrease in loan closings and narrowing gain-on-sale margins in 2021. The decrease in mortgage banking income was offset by a $1.1 million increase in deposit account fees as deposit fees were reinstated in 2021.

Noninterest Expense

Total noninterest expenses were $38.2 million for the quarter ended December 31, 2021, a decrease of $1.1 million, or 2.8%, from the quarter ended September 30, 2021. During the third quarter of 2021, the Bank paid a $1.1 million prepayment penalty on Federal Home Loan Bank borrowings, and no such penalty was paid in the fourth quarter of 2021. Loan expense decreased $591,000, reflecting the decrease in residential mortgage loan closings at HarborOne Mortgage, LLC (“HarborOne Mortgage”).

Total noninterest expenses decreased $3.1 million, or 7.5%, from the quarter ended December 31, 2020. Compensation and benefits decreased $2.6 million and loan expenses decreased $2.0 million, consistent with the decrease in residential mortgage loan closings.

Income Tax Provision

The effective tax rate was 23.2% for the quarter ended December 31, 2021, compared to 28.6% for the quarter ended September 30, 2021 and 15.7% for the quarter ended December 31, 2020. The effective tax rate for the quarter ended December 31, 2021 was impacted by the recognition of a net tax benefit in the amount of $754,000 for a reserve release upon the expiration of the statute of limitations. The effective tax rate for the quarter ended December 31, 2020 was impacted by a 2016 federal tax refund of $1.9 million recognized on the expiration of the statute of limitations.

Provision for Loan Losses and Asset Quality

The Company recorded a reversal of provision for loan losses of $1.4 million for the quarter ended December 31, 2021, compared to a reversal of provision of $1.6 million for the quarter ended September 30, 2021 and a provision for loan losses of $7.6 million for the quarter ended December 31, 2020. The allowance for loan losses was $45.4 million, or 1.26% of total loans, at December 31, 2021, compared to $48.0 million, or 1.39% of total loans, at September 30, 2021 and $55.4 million, or 1.59% of total loans, at December 31, 2020. The provision for loan losses is impacted by specific reserves, charge-offs, changes in historical charge-off trends, and adjusted for management’s assessment of certain qualitative factors including, loan portfolio growth and composition changes, ongoing evaluations of credit quality trends and current economic conditions.

Net charges-offs totaled $1.2 million, or 0.13% of average loans outstanding on an annualized basis, for the quarter ended December 31, 2021. During the fourth quarter, there was a $1.4 million charge-off on a single credit previously reserved for in a prior period. Net charge-offs totaled $1.7 million, or 0.19% of average loans outstanding on an annualized basis, for the quarter ended September 30, 2021, and net charge-offs totaled $1.4 million, or 0.16% of average loans outstanding on an annualized basis, for the quarter ended December 31, 2020.

Credit quality performance has remained strong with total nonperforming assets of $36.2 million at December 31, 2021, compared to $36.5 million at September 30, 2021 and $34.7 million at December 31, 2020. Nonperforming assets as a percentage of total assets were 0.79% at December 31, 2021, 0.80% at September 30, 2021, and 0.77% at December 31, 2020.

At the start of the COVID-19 pandemic, management established a COVID-19 pandemic qualitative factor. In estimating the provision for the COVID-19 pandemic, management considers economic factors, including unemployment rates and the interest rate environment, and trends in the pandemic, such as vaccination and case rates. Positive economic trends in the fourth quarter of 2021, were offset by rising COVID-19 cases, despite strong vaccination rates in our market area, and resulted in management increasing the provision related to COVID-19. For the year ended December 31, 2021, the provision for the COVID-19 pandemic has decreased.

We provided payment deferrals and other accommodations to certain of our commercial loan customers whose businesses were impacted by the COVID-19 pandemic and the related mitigation efforts. As of December 31, 2021, all payment deferrals have expired. There are three commercial loans with expired deferrals, amounting to $2.7 million, that are delinquent and on non-accrual status. There is one commercial credit in the amount of $8.8 million whose deferral has expired and is current, but is on non-accrual status.

We had previously provided access to the PPP to both our existing customers and new customers, to ensure that small businesses in the communities we serve had access to this important lifeline for their businesses. As of December 31, 2021, outstanding PPP loans amounted to $27.0 million, and there was $949,000 in deferred processing fee income. We expect to complete the forgiveness process on the remaining PPP loans by the end of the first quarter of 2022.

The residential loan and consumer loan portfolios have not experienced significant credit quality deterioration as of December 31, 2021; however, the continuing impact and uncertain nature of the COVID-19 pandemic may result in increases in delinquencies, charge-offs and loan modifications in these portfolios in 2022. As of December 31, 2021, all payment deferrals on residential mortgage loans had expired. As of December 31, 2021, seven residential real estate loans with expired deferrals and a total outstanding principal balance of $978,000 are delinquent, and four of those loans, amounting to $735,000, are in non-accrual status. We have no active payment deferrals on consumer loans, eight loans with expired deferrals and a total outstanding principal balance of $163,000 that are delinquent. Requests for additional extensions on residential mortgage loans and consumer loans were not significant as of December 31, 2021.

Management continues to assess the impact of the COVID-19 pandemic on our commercial loan portfolio, in light of current economic conditions and the effects of government actions to diminish the spread of new variants of the virus. Our commercial loan portfolio is diversified across many sectors and is largely secured by commercial real estate loans, which make up 75.3% of the total commercial loan portfolio. Management has identified and monitors commercial loan sectors that may be susceptible to increased credit risk as a result of the COVID-19 pandemic: retail, office space, hotels, restaurants, and recreation. The five commercial sectors identified as at- risk totaled $800.2 million at December 31, 2021, which represents 35.4% of the commercial loan portfolio. The at-risk sectors include $671.5 million in commercial real estate loans, $79.4 million in commercial and industrial loans, and $49.2 million in commercial construction loans. Non-performing loans included in the at-risk sectors amounted to $20.4 million at December 31, 2021, the majority of which was $10.9 million included in the hotels sector and $8.8 million included in the office space sector.

Although we have identified certain sectors that have the potential to be more susceptible to negative impacts of the COVID-19 pandemic, as trends largely continue to improve, we continue to make prudent lending decisions that include these sectors. For the year ended December 31, 2021, we originated $214.6 million loans in the at-risk sectors, including $101.9 million in the hotel sector. These hotel sector credits are generally secured by low to moderately leveraged real estate with solid operating metrics and strong sponsorship, and are typically to existing customers that have a track record of performance with the bank.

Balance Sheet

Total assets decreased $13.7 million, or 0.3%, to $4.55 billion at December 31, 2021 from $4.57 billion at September 30, 2021. The decrease primarily reflects a decrease of $117.9 million in short-term investments and a $31.4 million decrease in loans held for sale, partially offset by increases of $152.6 million in net loans and $3.5 million in securities available for sale. Short-term investments were primarily used to fund the loan growth.

Net loans increased $152.6 million, or 4.5%, to $3.56 billion at December 31, 2021 from $3.41 billion at September 30, 2021. The net increase in loans for the three months ended December 31, 2021 was primarily due to increases in commercial real estate loans of $126.6 million, residential mortgage loans of $57.3 million, and commercial and industrial loans of $6.8 million, partially offset by decreases in commercial construction loans of $16.1 million and consumer loans of $24.6 million. The decrease in commercial and industrial loans is primarily due to forgiveness of PPP loans during the quarter. Excluding the change in PPP loans, total commercial loans increased $143.4 million, primarily due to an increase in commercial real loans. The allowance for loan losses was $45.4 million at December 31, 2021 and $48.0 million at September 30, 2021, the change primarily reflecting a negative $1.4 million provision for loan losses and $1.2 million in net loan charge-offs recorded in the fourth quarter.

Total deposits were $3.68 billion at December 31, 2021 and $3.69 billion at September 30, 2021. Compared to the prior quarter, non-certificate accounts increased $20.2 million, and term certificate accounts decreased $31.9 million. FHLB borrowings were flat at $55.7 million at December 31, 2021 and September 30, 2021. Three branches acquired from East Boston Savings Bank in Brighton, Cambridge and Brookline were opened during the quarter. The opening of an additional Brighton branch has been delayed due to a permitting issue.

Total stockholders’ equity was $679.3 million at December 31, 2021, compared to $680.0 million at September 30, 2021 and $696.3 million at December 31, 2020. The Company adopted a third share repurchase program on September 17, 2021 to repurchase up to 2,668,159 shares of the Company’s common stock, or approximately 5% of the Company’s outstanding shares. The Company had repurchased 800,364 shares at an average price of $14.55 under the third share repurchase program as of December 31, 2021. The tangible common equity-to-tangible-assets ratio was 13.53% at December 31, 2021, 13.50% at September 30, 2021, and 14.11% at December 31, 2020. At December 31, 2021, 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 30 full-service branches located in Massachusetts and Rhode Island, and a commercial lending office in each of Boston, Massachusetts and Providence, Rhode Island. The Bank also provides a range of educational services through “HarborOne U,” with classes on small business, financial literacy and personal enrichment at two campuses located adjacent to our Brockton and Mansfield locations. HarborOne Mortgage, LLC, a subsidiary of HarborOne Bank, is a full-service mortgage lender with more than 30 offices in Massachusetts, Rhode Island, and New Hampshire, and is licensed to lend in seven 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, ongoing disruptions due to the COVID-19 pandemic and the measures taken to contain its spread on our employees, customers, business operations, credit quality, financial position, liquidity and results of operations; changes in general business and economic conditions 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; 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; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters, and future pandemics; changes in regulation; reputational risk relating to the Company’s participation in the Paycheck Protection Program and other pandemic-related legislative and regulatory initiatives and programs; 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 tax equivalent basis for yields, 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.

Category: Earnings

HarborOne Bancorp, Inc.

Consolidated Balance Sheet Trend

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

(in thousands)

 

2021

 

2021

 

2021

 

2021

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

35,549

 

 

$

42,589

 

 

$

41,328

 

 

$

37,074

 

 

$

31,777

 

Short-term investments

 

 

159,170

 

 

 

277,050

 

 

 

374,319

 

 

 

281,451

 

 

 

174,093

 

Total cash and cash equivalents

 

 

194,719

 

 

 

319,639

 

 

 

415,647

 

 

 

318,525

 

 

 

205,870

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale, at fair value

 

 

394,036

 

 

 

390,552

 

 

 

353,848

 

 

 

304,168

 

 

 

276,498

 

Federal Home Loan Bank stock, at cost

 

 

5,931

 

 

 

6,828

 

 

 

7,241

 

 

 

7,572

 

 

 

8,738

 

Asset held for sale

 

 

881

 

 

 

881

 

 

 

 

 

 

 

 

 

 

Loans held for sale, at fair value

 

 

45,642

 

 

 

77,052

 

 

 

103,886

 

 

 

210,494

 

 

 

208,612

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

 

1,699,877

 

 

 

1,573,284

 

 

 

1,561,873

 

 

 

1,559,056

 

 

 

1,551,265

 

Commercial construction

 

 

136,563

 

 

 

152,685

 

 

 

107,585

 

 

 

112,187

 

 

 

99,331

 

Commercial and industrial

 

 

421,608

 

 

 

414,814

 

 

 

467,479

 

 

 

499,728

 

 

 

464,393

 

Total commercial loans

 

 

2,258,048

 

 

 

2,140,783

 

 

 

2,136,937

 

 

 

2,170,971

 

 

 

2,114,989

 

Residential real estate

 

 

1,217,980

 

 

 

1,160,689

 

 

 

1,096,370

 

 

 

1,062,229

 

 

 

1,105,823

 

Consumer

 

 

131,705

 

 

 

156,272

 

 

 

186,430

 

 

 

228,279

 

 

 

273,830

 

Loans

 

 

3,607,733

 

 

 

3,457,744

 

 

 

3,419,737

 

 

 

3,461,479

 

 

 

3,494,642

 

Less: Allowance for loan losses

 

 

(45,377

)

 

 

(47,988

)

 

 

(51,273

)

 

 

(55,384

)

 

 

(55,395

)

Net loans

 

 

3,562,356

 

 

 

3,409,756

 

 

 

3,368,464

 

 

 

3,406,095

 

 

 

3,439,247

 

Mortgage servicing rights, at fair value

 

 

38,268

 

 

 

36,540

 

 

 

35,955

 

 

 

33,939

 

 

 

24,833

 

Goodwill

 

 

69,802

 

 

 

69,802

 

 

 

69,802

 

 

 

69,802

 

 

 

69,802

 

Other intangible assets

 

 

3,164

 

 

 

3,399

 

 

 

3,723

 

 

 

4,047

 

 

 

4,370

 

Other assets

 

 

238,606

 

 

 

252,645

 

 

 

257,856

 

 

 

251,316

 

 

 

245,645

 

Total assets

 

$

4,553,405

 

 

$

4,567,094

 

 

$

4,616,422

 

 

$

4,605,958

 

 

$

4,483,615

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposit accounts

 

$

743,051

 

 

$

756,917

 

 

$

800,118

 

 

$

777,959

 

 

$

689,672

 

NOW accounts

 

 

313,733

 

 

 

300,577

 

 

 

250,099

 

 

 

224,869

 

 

 

218,584

 

Regular savings and club accounts

 

 

1,138,979

 

 

 

1,144,595

 

 

 

1,123,123

 

 

 

1,113,450

 

 

 

998,994

 

Money market deposit accounts

 

 

858,970

 

 

 

832,441

 

 

 

832,006

 

 

 

861,867

 

 

 

866,661

 

Term certificate accounts

 

 

627,916

 

 

 

659,850

 

 

 

682,594

 

 

 

696,438

 

 

 

732,298

 

Total deposits

 

 

3,682,649

 

 

 

3,694,380

 

 

 

3,687,940

 

 

 

3,674,583

 

 

 

3,506,209

 

Short-term borrowed funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35,000

 

Long-term borrowed funds

 

 

55,711

 

 

 

55,720

 

 

 

87,479

 

 

 

97,488

 

 

 

114,097

 

Subordinated debt

 

 

34,159

 

 

 

34,128

 

 

 

34,096

 

 

 

34,064

 

 

 

34,033

 

Other liabilities and accrued expenses

 

 

101,625

 

 

 

102,834

 

 

 

101,436

 

 

 

101,750

 

 

 

97,962

 

Total liabilities

 

 

3,874,144

 

 

 

3,887,062

 

 

 

3,910,951

 

 

 

3,907,885

 

 

 

3,787,301

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

585

 

 

 

585

 

 

 

585

 

 

 

585

 

 

 

584

 

Additional paid-in capital

 

 

469,934

 

 

 

468,526

 

 

 

467,194

 

 

 

465,832

 

 

 

464,176

 

Unearned compensation - ESOP

 

 

(29,461

)

 

 

(29,921

)

 

 

(30,380

)

 

 

(30,840

)

 

 

(31,299

)

Retained earnings

 

 

325,699

 

 

 

315,683

 

 

 

305,831

 

 

 

294,116

 

 

 

277,312

 

Treasury stock

 

 

(85,859

)

 

 

(73,723

)

 

 

(38,588

)

 

 

(31,460

)

 

 

(16,644

)

Accumulated other comprehensive income (loss)

 

 

(1,637

)

 

 

(1,118

)

 

 

829

 

 

 

(160

)

 

 

2,185

 

Total stockholders' equity

 

 

679,261

 

 

 

680,032

 

 

 

705,471

 

 

 

698,073

 

 

 

696,314

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

4,553,405

 

 

$

4,567,094

 

 

$

4,616,422

 

 

$

4,605,958

 

 

$

4,483,615

 

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)

 

2021

 

2021

 

2021

 

2021

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

34,177

 

 

$

33,680

 

 

$

34,106

 

 

$

33,860

 

$

35,274

 

Interest on loans held for sale

 

 

501

 

 

 

665

 

 

 

852

 

 

 

1,324

 

 

1,267

 

Interest on securities

 

 

1,541

 

 

 

1,293

 

 

 

793

 

 

 

585

 

 

1,064

 

Other interest and dividend income

 

 

134

 

 

 

170

 

 

 

136

 

 

 

78

 

 

115

 

Total interest and dividend income

 

 

36,353

 

 

 

35,808

 

 

 

35,887

 

 

 

35,847

 

 

37,720

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

1,651

 

 

 

2,050

 

 

 

2,302

 

 

 

2,720

 

 

3,775

 

Interest on FHLB borrowings

 

 

193

 

 

 

431

 

 

 

531

 

 

 

552

 

 

671

 

Interest on subordinated debentures

 

 

524

 

 

 

524

 

 

 

524

 

 

 

523

 

 

524

 

Total interest expense

 

 

2,368

 

 

 

3,005

 

 

 

3,357

 

 

 

3,795

 

 

4,970

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

 

33,985

 

 

 

32,803

 

 

 

32,530

 

 

 

32,052

 

 

32,750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Credit) provision for loan losses

 

 

(1,436

)

 

 

(1,627

)

 

 

(4,286

)

 

 

91

 

 

7,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

35,421

 

 

 

34,430

 

 

 

36,816

 

 

 

31,961

 

 

25,142

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

10,063

 

 

 

12,756

 

 

 

14,262

 

 

 

24,802

 

 

28,274

 

Changes in mortgage servicing rights fair value

 

 

(245

)

 

 

(992

)

 

 

(2,552

)

 

 

3,409

 

 

(1,041

)

Other

 

 

3,359

 

 

 

3,882

 

 

 

4,075

 

 

 

4,515

 

 

4,522

 

Total mortgage banking income

 

 

13,177

 

 

 

15,646

 

 

 

15,785

 

 

 

32,726

 

 

31,755

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposit account fees

 

 

4,783

 

 

 

4,658

 

 

 

4,546

 

 

 

3,852

 

 

3,667

 

Income on retirement plan annuities

 

 

109

 

 

 

108

 

 

 

106

 

 

 

104

 

 

106

 

Gain on sale and call of securities, net

 

 

 

 

 

241

 

 

 

 

 

 

 

 

 

Bank-owned life insurance income

 

 

506

 

 

 

515

 

 

 

508

 

 

 

493

 

 

550

 

Other income

 

 

589

 

 

 

842

 

 

 

758

 

 

 

634

 

 

949

 

Total noninterest income

 

 

19,164

 

 

 

22,010

 

 

 

21,703

 

 

 

37,809

 

 

37,027

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

24,564

 

 

 

24,760

 

 

 

25,146

 

 

 

27,454

 

 

27,122

 

Occupancy and equipment

 

 

4,923

 

 

 

4,765

 

 

 

4,702

 

 

 

5,256

 

 

4,545

 

Data processing

 

 

2,244

 

 

 

2,205

 

 

 

2,362

 

 

 

2,343

 

 

2,235

 

Loan expense

 

 

732

 

 

 

1,323

 

 

 

1,250

 

 

 

2,435

 

 

2,689

 

Marketing

 

 

1,120

 

 

 

880

 

 

 

831

 

 

 

813

 

 

640

 

Professional fees

 

 

1,443

 

 

 

1,362

 

 

 

1,487

 

 

 

1,583

 

 

1,252

 

Deposit insurance

 

 

345

 

 

 

341

 

 

 

332

 

 

 

320

 

 

320

 

Prepayment penalties on Federal Home Loan Bank advances

 

 

 

 

 

1,095

 

 

 

 

 

 

 

 

 

Other expenses

 

 

2,817

 

 

 

2,543

 

 

 

2,488

 

 

 

2,598

 

 

2,483

 

Total noninterest expenses

 

 

38,188

 

 

 

39,274

 

 

 

38,598

 

 

 

42,802

 

 

41,286

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

16,397

 

 

 

17,166

 

 

 

19,921

 

 

 

26,968

 

 

20,883

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

3,807

 

 

 

4,907

 

 

 

5,645

 

 

 

7,576

 

 

3,283

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

12,590

 

 

$

12,259

 

 

$

14,276

 

 

$

19,392

 

$

17,600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.26

 

 

$

0.25

 

 

$

0.28

 

 

$

0.37

 

$

0.33

 

Diluted

 

$

0.25

 

 

$

0.24

 

 

$

0.27

 

 

$

0.37

 

$

0.33

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

48,918,539

 

 

 

49,801,123

 

 

 

51,778,293

 

 

 

52,537,409

 

 

53,947,868

 

Diluted

 

 

49,828,379

 

 

 

50,663,415

 

 

 

52,650,071

 

 

 

53,000,830

 

 

53,973,737

 

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Years Ended December 31,

 

 

 

 

(dollars in thousands, except share data)

 

2021

 

2020

 

$ Change

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

135,823

 

 

$

137,765

 

 

$

(1,942

)

 

(1.4

)%

Interest on loans held for sale

 

 

3,342

 

 

 

3,892

 

 

 

(550

)

 

(14.1

)

Interest on securities

 

 

4,212

 

 

 

5,613

 

 

 

(1,401

)

 

(25.0

)

Other interest and dividend income

 

 

518

 

 

 

1,288

 

 

 

(770

)

 

(59.8

)

Total interest and dividend income

 

 

143,895

 

 

 

148,558

 

 

 

(4,663

)

 

(3.1

)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

8,723

 

 

 

22,793

 

 

 

(14,070

)

 

(61.7

)

Interest on FHLB borrowings

 

 

1,707

 

 

 

3,604

 

 

 

(1,897

)

 

(52.6

)

Interest on subordinated debentures

 

 

2,095

 

 

 

2,095

 

 

 

 

 

0.0

 

Total interest expense

 

 

12,525

 

 

 

28,492

 

 

 

(15,967

)

 

(56.0

)

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

 

131,370

 

 

 

120,066

 

 

 

11,304

 

 

9.4

 

 

 

 

 

 

 

 

 

 

 

 

 

(Credit) provision for loan losses

 

 

(7,258

)

 

 

34,815

 

 

 

(42,073

)

 

(120.8

)

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

138,628

 

 

 

85,251

 

 

 

53,377

 

 

62.6

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

61,883

 

 

 

105,469

 

 

 

(43,586

)

 

(41.3

)

Changes in mortgage servicing rights fair value

 

 

(380

)

 

 

(6,732

)

 

 

6,352

 

 

94.4

 

Other

 

 

15,831

 

 

 

15,172

 

 

 

659

 

 

4.3

 

Total mortgage banking income

 

 

77,334

 

 

 

113,909

 

 

 

(36,575

)

 

(32.1

)

 

 

 

 

 

 

 

 

 

 

 

 

Deposit account fees

 

 

17,839

 

 

 

14,018

 

 

 

3,821

 

 

27.3

 

Income on retirement plan annuities

 

 

427

 

 

 

414

 

 

 

13

 

 

3.1

 

Gain on sale and call of securities, net

 

 

241

 

 

 

2,533

 

 

 

(2,292

)

 

(90.5

)

Bank-owned life insurance income

 

 

2,022

 

 

 

2,215

 

 

 

(193

)

 

(8.7

)

Other income

 

 

2,823

 

 

 

5,591

 

 

 

(2,768

)

 

(49.5

)

Total noninterest income

 

 

100,686

 

 

 

138,680

 

 

 

(37,994

)

 

(27.4

)

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expenses:

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

101,924

 

 

 

105,615

 

 

 

(3,691

)

 

(3.5

)

Occupancy and equipment

 

 

19,646

 

 

 

17,841

 

 

 

1,805

 

 

10.1

 

Data processing

 

 

9,154

 

 

 

8,811

 

 

 

343

 

 

3.9

 

Loan expense

 

 

5,740

 

 

 

9,810

 

 

 

(4,070

)

 

(41.5

)

Marketing

 

 

3,644

 

 

 

3,390

 

 

 

254

 

 

7.5

 

Professional fees

 

 

5,875

 

 

 

5,456

 

 

 

419

 

 

7.7

 

Deposit insurance

 

 

1,338

 

 

 

1,180

 

 

 

158

 

 

13.4

 

Prepayment penalties on Federal Home Loan Bank advances

 

 

1,095

 

 

 

 

 

 

1,095

 

 

100.0

 

Other expenses

 

 

10,446

 

 

 

13,819

 

 

 

(3,373

)

 

(24.4

)

Total noninterest expenses

 

 

158,862

 

 

 

165,922

 

 

 

(7,060

)

 

(4.3

)

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

80,452

 

 

 

58,009

 

 

 

22,443

 

 

38.7

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

21,935

 

 

 

13,217

 

 

 

8,718

 

 

66.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

58,517

 

 

$

44,792

 

 

$

13,725

 

 

30.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.15

 

 

$

0.82

 

 

 

 

 

 

Diluted

 

$

1.14

 

 

$

0.82

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

50,746,302

 

 

 

54,313,368

 

 

 

 

 

 

Diluted

 

 

51,523,135

 

 

 

54,319,835

 

 

 

 

 

 

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

 

December 31, 2021

 

September 30, 2021

 

December 31, 2020

 

 

 

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)

 

$

394,301

 

$

1,541

 

1.55

%

$

358,927

 

$

1,293

 

1.43

%

$

271,511

 

$

1,064

 

1.56

%

Other interest-earning assets

 

 

286,026

 

 

134

 

0.19

 

 

372,892

 

 

170

 

0.18

 

 

84,969

 

 

115

 

0.54

 

Loans held for sale

 

 

63,833

 

 

501

 

3.11

 

 

84,399

 

 

665

 

3.13

 

 

178,980

 

 

1,267

 

2.82

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans (2)

 

 

2,165,739

 

 

22,658

 

4.15

 

 

2,121,432

 

 

22,394

 

4.19

 

 

2,112,377

 

 

20,823

 

3.92

 

Residential real estate loans (2)

 

 

1,171,608

 

 

9,870

 

3.34

 

 

1,121,898

 

 

9,352

 

3.31

 

 

1,106,286

 

 

11,242

 

4.04

 

Consumer loans (2)

 

 

143,577

 

 

1,649

 

4.56

 

 

170,366

 

 

1,934

 

4.50

 

 

292,665

 

 

3,209

 

4.36

 

Total loans

 

 

3,480,924

 

 

34,177

 

3.90

 

 

3,413,696

 

 

33,680

 

3.91

 

 

3,511,328

 

 

35,274

 

4.00

 

Total interest-earning assets

 

 

4,225,084

 

 

36,353

 

3.41

 

 

4,229,914

 

 

35,808

 

3.36

 

 

4,046,788

 

 

37,720

 

3.71

 

Noninterest-earning assets

 

 

337,310

 

 

 

 

 

 

 

347,060

 

 

 

 

 

 

 

317,663

 

 

 

 

 

 

Total assets

 

$

4,562,394

 

 

 

 

 

 

$

4,576,974

 

 

 

 

 

 

$

4,364,451

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

$

1,147,855

 

 

247

 

0.09

 

$

1,136,131

 

 

365

 

0.13

 

$

968,766

 

 

621

 

0.26

 

NOW accounts

 

 

300,459

 

 

40

 

0.05

 

 

283,725

 

 

45

 

0.06

 

 

205,845

 

 

40

 

0.08

 

Money market accounts

 

 

839,977

 

 

307

 

0.15

 

 

832,340

 

 

392

 

0.19

 

 

840,674

 

 

710

 

0.34

 

Certificates of deposit

 

 

543,208

 

 

878

 

0.64

 

 

570,570

 

 

1,087

 

0.76

 

 

649,919

 

 

2,206

 

1.35

 

Brokered deposits

 

 

100,000

 

 

179

 

0.71

 

 

100,000

 

 

161

 

0.64

 

 

109,788

 

 

198

 

0.72

 

Total interest-bearing deposits

 

 

2,931,499

 

 

1,651

 

0.22

 

 

2,922,766

 

 

2,050

 

0.28

 

 

2,774,992

 

 

3,775

 

0.54

 

FHLB advances

 

 

55,714

 

 

193

 

1.37

 

 

84,438

 

 

431

 

2.03

 

 

119,763

 

 

671

 

2.23

 

Subordinated debentures

 

 

34,144

 

 

524

 

6.09

 

 

34,111

 

 

524

 

6.09

 

 

34,015

 

 

524

 

6.13

 

Total borrowings

 

 

89,858

 

 

717

 

3.17

 

 

118,549

 

 

955

 

3.20

 

 

153,778

 

 

1,195

 

3.09

 

Total interest-bearing liabilities

 

 

3,021,357

 

 

2,368

 

0.31

 

 

3,041,315

 

 

3,005

 

0.39

 

 

2,928,770

 

 

4,970

 

0.68

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

768,361

 

 

 

 

 

 

 

756,927

 

 

 

 

 

 

 

656,227

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

92,034

 

 

 

 

 

 

 

90,366

 

 

 

 

 

 

 

84,387

 

 

 

 

 

 

Total liabilities

 

 

3,881,752

 

 

 

 

 

 

 

3,888,608

 

 

 

 

 

 

 

3,669,384

 

 

 

 

 

 

Total stockholders' equity

 

 

680,642

 

 

 

 

 

 

 

688,366

 

 

 

 

 

 

 

695,067

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

4,562,394

 

 

 

 

 

 

$

4,576,974

 

 

 

 

 

 

$

4,364,451

 

 

 

 

 

 

Tax equivalent net interest income

 

 

 

 

 

33,985

 

 

 

 

 

 

 

32,803

 

 

 

 

 

 

 

32,750

 

 

 

Tax equivalent interest rate spread (3)

 

 

 

 

 

 

 

3.10

%

 

 

 

 

 

 

2.97

%

 

 

 

 

 

 

3.03

%

Less: tax equivalent adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

Net interest income as reported

 

 

 

 

$

33,985

 

 

 

 

 

 

$

32,803

 

 

 

 

 

 

$

32,750

 

 

 

Net interest-earning assets (4)

 

$

1,203,727

 

 

 

 

 

 

$

1,188,599

 

 

 

 

 

 

$

1,118,018

 

 

 

 

 

 

Net interest margin (5)

 

 

 

 

 

 

 

3.19

%

 

 

 

 

 

 

3.08

%

 

 

 

 

 

 

3.22

%

Tax equivalent effect

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin on a fully tax equivalent basis

 

 

 

 

 

 

 

3.19

%

 

 

 

 

 

 

3.08

%

 

 

 

 

 

 

3.22

%

Average interest-earning assets to average interest-bearing liabilities

 

 

139.84

%

 

 

 

 

 

 

139.08

%

 

 

 

 

 

 

138.17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including demand deposits

 

$

3,699,860

 

$

1,651

 

 

 

$

3,679,693

 

$

2,050

 

 

 

$

3,431,219

 

$

3,775

 

 

 

Cost of total deposits

 

 

 

 

 

 

 

0.18

%

 

 

 

 

 

 

0.22

%

 

 

 

 

 

 

0.44

%

Total funding liabilities, including demand deposits

 

$

3,789,718

 

$

2,368

 

 

 

$

3,798,242

 

$

3,005

 

 

 

$

3,584,997

 

$

4,970

 

 

 

Cost of total funding liabilities

 

 

 

 

 

 

 

0.25

%

 

 

 

 

 

 

0.31

%

 

 

 

 

 

 

0.55

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes securities available for sale. Interest income from tax exempt securities is computed on a tax equivalent basis using a tax rate of 21%. There were no tax exempt securities in the quarters presented.

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

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

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

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

(6) Annualized.

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

 

 

December 31, 2021

 

December 31, 2020

 

 

 

Average

 

 

 

 

 

Average

 

 

 

 

 

 

 

Outstanding

 

 

 

Yield/

 

Outstanding

 

 

 

Yield/

 

 

 

Balance

 

Interest

 

Cost

 

Balance

 

Interest

 

Cost

 

 

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

$

337,843

 

$

4,212

 

1.25

%

$

264,196

 

$

5,635

 

2.13

%

Other interest-earning assets

 

 

309,819

 

 

518

 

0.17

 

 

153,676

 

 

1,288

 

0.84

 

Loans held for sale

 

 

113,788

 

 

3,342

 

2.94

 

 

124,936

 

 

3,892

 

3.12

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans (2)

 

 

2,150,022

 

 

87,911

 

4.09

 

 

1,913,304

 

 

76,208

 

3.98

 

Residential real estate loans (2)

 

 

1,110,840

 

 

39,309

 

3.54

 

 

1,116,601

 

 

46,430

 

4.16

 

Consumer loans (2)

 

 

192,841

 

 

8,603

 

4.46

 

 

353,412

 

 

15,127

 

4.28

 

Total loans

 

 

3,453,703

 

 

135,823

 

3.93

 

 

3,383,317

 

 

137,765

 

4.07

 

Total interest-earning assets

 

 

4,215,153

 

 

143,895

 

3.41

 

 

3,926,125

 

 

148,580

 

3.78

 

Noninterest-earning assets

 

 

338,559

 

 

 

 

 

 

 

324,942

 

 

 

 

 

 

Total assets

 

$

4,553,712

 

 

 

 

 

 

$

4,251,067

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

$

1,115,626

 

 

1,610

 

0.14

 

$

849,239

 

 

3,342

 

0.39

 

NOW accounts

 

 

257,201

 

 

163

 

0.06

 

 

188,103

 

 

143

 

0.08

 

Money market accounts

 

 

846,756

 

 

1,676

 

0.20

 

 

832,131

 

 

5,245

 

0.63

 

Certificates of deposit

 

 

577,760

 

 

4,638

 

0.80

 

 

714,628

 

 

12,930

 

1.81

 

Brokered deposits

 

 

100,000

 

 

636

 

0.64

 

 

102,265

 

 

1,133

 

1.11

 

Total interest-bearing deposits

 

 

2,897,343

 

 

8,723

 

0.30

 

 

2,686,366

 

 

22,793

 

0.85

 

FHLB advances

 

 

84,711

 

 

1,707

 

2.02

 

 

192,059

 

 

3,604

 

1.88

 

Subordinated debentures

 

 

34,096

 

 

2,095

 

6.14

 

 

33,967

 

 

2,095

 

6.17

 

Total borrowings

 

 

118,807

 

 

3,802

 

3.20

 

 

226,026

 

 

5,699

 

2.52

 

Total interest-bearing liabilities

 

 

3,016,150

 

 

12,525

 

0.42

 

 

2,912,392

 

 

28,492

 

0.98

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

754,198

 

 

 

 

 

 

 

576,128

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

91,084

 

 

 

 

 

 

 

78,602

 

 

 

 

 

 

Total liabilities

 

 

3,861,432

 

 

 

 

 

 

 

3,567,122

 

 

 

 

 

 

Total stockholders' equity

 

 

692,280

 

 

 

 

 

 

 

683,945

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

4,553,712

 

 

 

 

 

 

$

4,251,067

 

 

 

 

 

 

Tax equivalent net interest income

 

 

 

 

 

131,370

 

 

 

 

 

 

 

120,088

 

 

 

Tax equivalent interest rate spread (3)

 

 

 

 

 

 

 

2.99

%

 

 

 

 

 

 

2.80

%

Less: tax equivalent adjustment

 

 

 

 

 

 

 

 

 

 

 

 

22

 

 

 

Net interest income as reported

 

 

 

 

$

131,370

 

 

 

 

 

 

$

120,066

 

 

 

Net interest-earning assets (4)

 

$

1,199,003

 

 

 

 

 

 

$

1,013,733

 

 

 

 

 

 

Net interest margin (5)

 

 

 

 

 

 

 

3.12

%

 

 

 

 

 

 

3.06

%

Tax equivalent effect

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin on a fully tax equivalent basis

 

 

 

 

 

 

 

3.12

%

 

 

 

 

 

 

3.06

%

Average interest-earning assets to average interest-bearing liabilities

 

 

139.75

%

 

 

 

 

 

 

134.81

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including demand deposits

 

$

3,651,541

 

$

8,723

 

 

 

$

3,262,494

 

$

22,793

 

 

 

Cost of total deposits

 

 

 

 

 

 

 

0.24

%

 

 

 

 

 

 

0.70

%

Total funding liabilities, including demand deposits

 

$

3,770,348

 

$

12,525

 

 

 

$

3,488,520

 

$

28,492

 

 

 

Cost of total funding liabilities

 

 

 

 

 

 

 

0.33

%

 

 

 

 

 

 

0.82

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Interest income from tax exempt securities is computed on a tax equivalent basis using a tax rate of 21%. The yield on investments before tax equivalent adjustments was 2.12% for the year ended December 31, 2020.

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

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

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

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

 

HarborOne Bancorp, Inc.

Average Balances and Yield Trend

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Balances - Trend - Quarters Ended

 

 

 

December 31, 2021

 

September 30, 2021

 

June 30, 2021

 

March 31, 2021

 

December 31, 2020

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

$

394,301

 

$

358,927

 

$

325,205

 

$

271,357

 

$

271,511

 

Other interest-earning assets

 

 

286,026

 

 

372,892

 

 

397,979

 

 

180,526

 

 

84,969

 

Loans held for sale

 

 

63,833

 

 

84,399

 

 

115,240

 

 

193,426

 

 

178,980

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans (2)

 

 

2,165,739

 

 

2,121,432

 

 

2,152,105

 

 

2,161,076

 

 

2,112,377

 

Residential real estate loans (2)

 

 

1,171,608

 

 

1,121,898

 

 

1,064,481

 

 

1,084,292

 

 

1,106,286

 

Consumer loans (2)

 

 

143,577

 

 

170,366

 

 

205,856

 

 

253,014

 

 

292,665

 

Total loans

 

 

3,480,924

 

 

3,413,696

 

 

3,422,442

 

 

3,498,382

 

 

3,511,328

 

Total interest-earning assets

 

 

4,225,084

 

 

4,229,914

 

 

4,260,866

 

 

4,143,691

 

 

4,046,788

 

Noninterest-earning assets

 

 

337,310

 

 

347,060

 

 

339,438

 

 

330,257

 

 

317,663

 

Total assets

 

$

4,562,394

 

$

4,576,974

 

$

4,600,304

 

$

4,473,948

 

$

4,364,451

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

$

1,147,855

 

$

1,136,131

 

$

1,118,494

 

$

1,058,820

 

$

968,766

 

NOW accounts

 

 

300,459

 

 

283,725

 

 

231,075

 

 

212,282

 

 

205,845

 

Money market accounts

 

 

839,977

 

 

832,340

 

 

853,586

 

 

861,518

 

 

840,674

 

Certificates of deposit

 

 

543,208

 

 

570,570

 

 

589,964

 

 

608,089

 

 

649,919

 

Brokered deposits

 

 

100,000

 

 

100,000

 

 

100,000

 

 

100,000

 

 

109,788

 

Total interest-bearing deposits

 

 

2,931,499

 

 

2,922,766

 

 

2,893,119

 

 

2,840,709

 

 

2,774,992

 

FHLB advances

 

 

55,714

 

 

84,438

 

 

96,823

 

 

102,383

 

 

119,763

 

Subordinated debentures

 

 

34,144

 

 

34,111

 

 

34,080

 

 

34,048

 

 

34,015

 

Total borrowings

 

 

89,858

 

 

118,549

 

 

130,903

 

 

136,431

 

 

153,778

 

Total interest-bearing liabilities

 

 

3,021,357

 

 

3,041,315

 

 

3,024,022

 

 

2,977,140

 

 

2,928,770

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

768,361

 

 

756,927

 

 

784,521

 

 

706,274

 

 

656,227

 

Other noninterest-bearing liabilities

 

 

92,034

 

 

90,366

 

 

88,577

 

 

93,380

 

 

84,387

 

Total liabilities

 

 

3,881,752

 

 

3,888,608

 

 

3,897,120

 

 

3,776,794

 

 

3,669,384

 

Total stockholders' equity

 

 

680,642

 

 

688,366

 

 

703,184

 

 

697,154

 

 

695,067

 

Total liabilities and stockholders' equity

 

$

4,562,394

 

$

4,576,974

 

$

4,600,304

 

$

4,473,948

 

$

4,364,451

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized Yield Trend - Quarters Ended

 

 

 

December 31, 2021

 

September 30, 2021

 

June 30, 2021

 

March 31, 2021

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

 

1.55

%

 

1.43

%

 

0.98

%

 

0.87

%

 

1.56

%

Other interest-earning assets

 

 

0.19

%

 

0.18

%

 

0.14

%

 

0.18

%

 

0.54

%

Loans held for sale

 

 

3.11

%

 

3.13

%

 

2.97

%

 

2.78

%

 

2.82

%

Commercial loans (2)

 

 

4.15

%

 

4.19

%

 

4.11

%

 

3.90

%

 

3.92

%

Residential real estate loans (2)

 

 

3.34

%

 

3.31

%

 

3.67

%

 

3.87

%

 

4.04

%

Consumer loans (2)

 

 

4.56

%

 

4.50

%

 

4.44

%

 

4.39

%

 

4.36

%

Total loans

 

 

3.90

%

 

3.91

%

 

4.00

%

 

3.93

%

 

4.00

%

Total interest-earning assets

 

 

3.41

%

 

3.36

%

 

3.38

%

 

3.51

%

 

3.71

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

 

0.09

%

 

0.13

%

 

0.17

%

 

0.21

%

 

0.26

%

NOW accounts

 

 

0.05

%

 

0.06

%

 

0.07

%

 

0.07

%

 

0.08

%

Money market accounts

 

 

0.15

%

 

0.19

%

 

0.20

%

 

0.26

%

 

0.34

%

Certificates of deposit

 

 

0.64

%

 

0.76

%

 

0.84

%

 

0.96

%

 

1.35

%

Brokered deposits

 

 

0.71

%

 

0.64

%

 

0.62

%

 

0.58

%

 

0.72

%

Total interest-bearing deposits

 

 

0.22

%

 

0.28

%

 

0.32

%

 

0.39

%

 

0.54

%

FHLB advances

 

 

1.37

%

 

2.03

%

 

2.20

%

 

2.19

%

 

2.23

%

Subordinated debentures

 

 

6.09

%

 

6.09

%

 

6.17

%

 

6.23

%

 

6.13

%

Total borrowings

 

 

3.17

%

 

3.20

%

 

3.23

%

 

3.20

%

 

3.09

%

Total interest-bearing liabilities

 

 

0.31

%

 

0.39

%

 

0.45

%

 

0.52

%

 

0.68

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

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

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

Performance Ratios (annualized):

 

2021

 

2021

 

2021

 

2021

 

2020

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (ROAA)

 

 

1.10

%

 

1.07

%

 

1.24

%

 

1.73

%

 

1.61

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average equity (ROAE)

 

 

7.40

%

 

7.12

%

 

8.12

%

 

11.13

%

 

10.13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest expense

 

$

38,188

 

$

39,274

 

$

38,598

 

$

42,802

 

$

41,286

 

Less: Amortization of other intangible assets

 

 

235

 

 

324

 

 

324

 

 

324

 

 

324

 

Total adjusted noninterest expense

 

$

37,953

 

$

38,950

 

$

38,274

 

$

42,478

 

$

40,962

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

$

33,985

 

$

32,803

 

$

32,530

 

$

32,052

 

$

32,750

 

Total noninterest income

 

 

19,164

 

 

22,010

 

 

21,703

 

 

37,809

 

 

37,027

 

Total revenue

 

$

53,149

 

$

54,813

 

$

54,233

 

$

69,861

 

$

69,777

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (1)

 

 

71.41

%

 

71.06

%

 

70.57

%

 

60.80

%

 

58.70

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

2021

 

2021

 

2021

 

2021

 

2020

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total nonperforming assets

 

$

36,186

 

$

36,514

 

$

32,732

 

$

32,886

 

$

34,696

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

 

0.79

%

 

0.80

%

 

0.71

%

 

0.71

%

 

0.77

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses to total loans

 

 

1.26

%

 

1.39

%

 

1.50

%

 

1.60

%

 

1.59

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs

 

$

1,174

 

$

1,658

 

$

(175)

 

$

102

 

$

1,436

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized net charge-offs/average loans

 

 

0.13

%

 

0.19

%

 

(0.02)

%

 

0.01

%

 

0.16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses to nonperforming loans

 

 

125.60

%

 

131.50

%

 

158.10

%

 

171.20

%

 

162.40

%

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

Capital and Share Related

 

2021

 

2021

 

2021

 

2021

 

2020

 

(dollars in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock outstanding

 

 

52,390,478

 

 

53,232,110

 

 

55,735,623

 

 

56,228,762

 

 

57,205,458

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

12.97

 

$

12.77

 

$

12.66

 

$

12.41

 

$

12.17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

$

679,261

 

$

680,032

 

$

705,471

 

$

698,073

 

$

696,314

 

Less: Goodwill

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

Less: Other intangible assets (1)

 

 

3,164

 

 

3,399

 

 

3,723

 

 

4,047

 

 

4,370

 

Tangible common equity

 

$

606,295

 

$

606,831

 

$

631,946

 

$

624,224

 

$

622,142

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible book value per share (2)

 

$

11.57

 

$

11.40

 

$

11.34

 

$

11.10

 

$

10.88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

4,553,405

 

$

4,567,094

 

$

4,616,422

 

$

4,605,958

 

$

4,483,615

 

Less: Goodwill

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

 

69,802

 

Less: Other intangible assets

 

 

3,164

 

 

3,399

 

 

3,723

 

 

4,047

 

 

4,370

 

Tangible assets

 

$

4,480,439

 

$

4,493,893

 

$

4,542,897

 

$

4,532,109

 

$

4,409,443

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity / tangible assets (3)

 

 

13.53

%

 

13.50

%

 

13.91

%

 

13.77

%

 

14.11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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,

 

 

2021

 

2021

 

2020

 

2021

 

2021

 

2020

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

$

571

 

 

$

792

 

 

$

1,215

 

 

$

33,909

 

 

$

32,494

 

 

$

31,969

 

Provision for loan losses

 

 

 

 

 

 

 

 

 

 

 

(1,436

)

 

 

(1,627

)

 

 

7,608

 

Net interest and dividend income, after provision for loan losses

 

 

571

 

 

 

792

 

 

 

1,215

 

 

 

35,345

 

 

 

34,121

 

 

 

24,361

 

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of mortgage loans

 

 

10,063

 

 

 

12,756

 

 

 

28,274

 

 

 

 

 

 

 

 

 

 

Intersegment gain (loss)

 

 

496

 

 

 

2,366

 

 

 

704

 

 

 

(720

)

 

 

(1,373

)

 

 

(704

)

Changes in mortgage servicing rights fair value

 

 

(315

)

 

 

(918

)

 

  </