HarborOne Bancorp, Inc. (the “Company” or “HarborOne”) (NASDAQ:
HONE), the holding company for HarborOne Bank (the “Bank”),
announced net income of $12.3 million, or $0.25 per diluted share,
for the first quarter of 2022, compared to net income of $12.6
million, or $0.25 per diluted share, for the preceding quarter and
$19.4 million, or $0.37 per basic and diluted share, for the same
period last year.
Selected First Quarter Financial Highlights:
- Return on average assets was 1.08% and return on average equity
was 7.35%.
- Commercial loan growth of $123.3 million, or 5.5%.
- Core deposit growth of $109.5 million, or 3.6%.
- Net interest margin increased 2 basis points to 3.21%.
- Strong credit quality with nonperforming assets to total assets
down 22 basis points to 0.57%.
- Announced fourth share repurchase program after completing
third share repurchase program at $14.64 per share.
- Raised quarterly dividend rate 40%, from $0.05 to $0.07 per
quarter.
“We remain focused on the core fundamentals of deposit and loan
growth, as we continue to invest in building out our small business
banking team and tools. The launch of our new BusinessOne lending
platform for small businesses will provide our business banking
customers with quick access to the capital they need to help them
achieve their growth objectives,” said James Blake, CEO. “We
continue to be responsive to the challenges in the residential
mortgage market in this rising rate environment, continuously
assessing our operational costs, and making the necessary staff and
expense adjustments,” added Joseph Casey, President and COO.
Net Interest Income
The Company’s net interest and dividend income was $33.3 million
for the quarter ended March 31, 2022, down $715,000, or 2.1%, from
$34.0 million for the quarter ended December 31, 2021 and up $1.2
million, or 3.8%, from $32.1 million for the quarter ended March
31, 2021. The tax equivalent interest rate spread and net interest
margin were 3.12% and 3.21%, respectively, for the quarter ended
March 31, 2022, compared to 3.10% and 3.19%, respectively, for the
quarter ended December 31, 2021, and 2.99% and 3.14%, respectively,
for the quarter ended March 31, 2021. On a linked-quarter basis,
the decrease in net interest and dividend income primarily reflects
decreases in fees recognized in connection with U.S. Small Business
Administration Paycheck Protection Program (“PPP”) loans, accretion
income and prepayment penalties as compared to the prior quarter,
partially offset by increased rates on investments. The cost of
funds was flat at 25 basis points.
The $751,000 decrease in total interest and dividend income
primarily reflected a decrease in interest income on loans. The
three months ended March 31, 2022 and December 31, 2021 include the
recognition of deferred fees on PPP loans in the amount of $487,000
and $1.2 million, respectively. Interest on loans in the first
quarter included $284,000 in accretion income from the fair value
discount on loans acquired in connection with the merger with
Coastway Bancorp, Inc. and $305,000 in prepayment penalties on
commercial loans. Accretion income and prepayment penalties in the
preceding quarter were $634,000 and $861,000, respectively.
The increase in net interest and dividend income from the prior
year quarter reflected a decrease of $1.5 million, or 38.6%, in
total interest expense, partially offset by a $245,000, or 0.7%,
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 21
basis points, while the average balance increased $60.7 million.
The yield on interest-earning assets decreased 8 basis points,
while the average balance increased $60.4 million.
Noninterest Income
Total noninterest income decreased $103,000, or 0.5%, to $19.1
million for the quarter ended March 31, 2022, from $19.2 million
for the quarter ended December 31, 2021. Softening demand for
mortgage loans resulted in mortgage loan closings of $253.8 million
and a gain on loan sales of $5.3 million for the quarter ended
March 31, 2022, compared to $451.4 million in mortgage closings and
$10.1 million in gain on sales for the preceding quarter. The
change in the fair value of derivatives included in mortgage
banking income was a positive $1.0 million for the three months
ended March 31, 2022, as compared to a negative $2.6 million for
the three months ended December 31, 2021.
The change in the fair value of mortgage servicing rights
positively impacted mortgage banking income; resulting in an
increase of $5.3 million in the fair value of mortgage servicing
rights for the three months ended March 31, 2022; as compared to a
decrease of $245,000 in the fair value of mortgage servicing rights
for the three months ended December 31, 2021. The 10-year Treasury
Constant Maturity rate increased 80 basis points versus the fourth
quarter of 2021, and prepayments slowed. 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 decreased $311,000, or 6.5%, to $4.5
million for the quarter ended March 31, 2022, from $4.8 million for
the quarter ended December 31, 2021. Other income for the quarter
ended March 31, 2022 increased $245,000. The fourth quarter of 2021
included a write-off of $431,000 on a direct interest-rate swap
related to a non-accrual loan, and no such write-off was recorded
in the first quarter of 2022.
Total noninterest income decreased $18.7 million, or 49.6%, as
compared to the quarter ended March 31, 2021, primarily due to a
$19.6 million, or 59.8%, decrease in mortgage banking income,
driven by the decrease in loan closings and narrowing gain-on-sale
margins. The decrease in mortgage banking income was offset by a
$620,000 increase in deposit account fees.
Noninterest Expense
Total noninterest expenses were $34.8 million for the quarter
ended March 31, 2022, a decrease of $3.4 million, or 8.8%, from the
quarter ended December 31, 2021. The decrease primarily reflects
the decrease in compensation and benefits, consistent with the
decrease in residential mortgage loan closings at HarborOne
Mortgage, LLC (“HarborOne Mortgage”).
Total noninterest expenses decreased $8.0 million, or 18.6%,
from the quarter ended March 31, 2021. Compensation and benefits
decreased $6.7 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 28.5% for the quarter ended March 31,
2022, compared to 23.2% for the quarter ended December 31, 2021 and
28.1% for the quarter ended March 31, 2021. 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 applicable statute of
limitations.
Asset Quality and Allowance for Credit Losses
Effective January 1, 2022, the Company adopted Accounting
Standards Update No. 2016-13, commonly referred to as CECL, which
requires the measurement of expected lifetime credit losses for
financial assets measured at amortized cost, as well as unfunded
commitments that are considered off-balance sheet credit exposures.
CECL requires that the allowance for credit losses (“ACL”) be
calculated based on current expected credit losses over the full
remaining expected life of the financial assets and also consider
expected future changes in macroeconomic conditions. Upon adoption
of CECL on January 1, 2022, the Company’s ACL on loans decreased by
$1.3 million, and the ACL on unfunded commitments increased by $3.9
million for a net increase of $2.6 million. The after-tax impact of
$1.9 million was recognized as a one-time, cumulative-effect
adjustment that decreased retained earnings.
Credit quality performance has remained strong with total
nonperforming assets of $26.1 million at March 31, 2022, compared
to $36.2 million at December 31, 2021 and $32.9 million at March
31, 2021. Nonperforming assets as a percentage of total assets were
0.57% at March 31, 2022, 0.79% at December 31, 2021, and 0.71% at
March 31, 2021. The decrease in nonperforming assets was primarily
due to the resolution of one credit in the amount of $8.8 million,
previously included in the office at-risk sector, for which the
Company also recorded a $2.8 million charge off in the first
quarter of 2022.
Net charges-offs totaled $2.7 million, or 0.30% of average loans
outstanding on an annualized basis, for the quarter ended March 31,
2022. Net charge-offs totaled $1.2 million, or 0.13% of average
loans outstanding on an annualized basis, for the quarter ended
December 31, 2021, and net charge-offs totaled $102,000, or 0.01%
of average loans outstanding on an annualized basis, for the
quarter ended March 31, 2021.
The ACL was $41.8 million, or 1.12% of total loans, at March 31,
2022, compared to $45.4 million, or 1.26% of total loans, at
December 31, 2021 and $55.4 million, or 1.60% of total loans, at
March 31, 2021. The ACL on unfunded commitments, included in other
liabilities on the unaudited Consolidated Balance Sheets, amounted
to $3.8 million at March 31, 2022, and there was no ACL on unfunded
commitments at December 31, 2021.
Although we have not experienced any significant negative trends
in the at-risk sectors previously identified, Management continues
to monitor 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 $835.2 million at
March 31, 2022, which represents 35.1% of the commercial loan
portfolio. The at-risk sectors include $712.7 million in commercial
real estate loans, $73.8 million in commercial and industrial
loans, and $48.7 million in commercial construction loans.
Non-performing loans included in the at-risk sectors amounted to
$10.8 million at March 31, 2022, the majority of which was included
in the hotels sector.
Balance Sheet
Total assets increased $37.9 million, or 0.8%, to $4.59 billion
at March 31, 2022 from $4.55 billion at December 31, 2021. The
increase primarily reflects an increase of $129.6 million in loans,
partially offset by decreases of $55.0 million in cash and cash
equivalents and $32.5 million in securities available for sale.
Securities available for sale were negatively impacted by
unrealized losses of $30.0 million as March 31, 2022, as compared
to $3.6 million of unrealized losses as of December 31, 2021.
Loans increased $129.6 million, or 3.6%, to $3.74 billion at
March 31, 2022, from $3.61 billion at December 31, 2021. The
increase in loans for the three months ended March 31, 2022 was
primarily due to an increase in total commercial loans of $123.3
million and residential real estate loans of $34.9 million,
partially offset by a decrease in consumer loans of $28.6 million.
As of March 31, 2022, outstanding PPP loans amounted to $13.6
million, and there was $462,000 in deferred processing fee income.
We expect to complete the forgiveness process for the remaining PPP
loans by the end of the second quarter of 2022.
Total deposits were $3.76 billion at March 31, 2022 and $3.68
billion at December 31, 2021. Compared to the prior quarter,
non-certificate accounts increased $109.5 million, and term
certificate accounts decreased $30.2 million. FHLB borrowings were
flat at $55.7 million at March 31, 2022 and December 31, 2021.
Total stockholders’ equity was $649.1 million at March 31, 2022,
compared to $679.3 million at December 31, 2021 and $698.1 million
at March 31, 2021. Stockholders’ equity decreased 4.4% when
compared to the prior quarter, as earnings were offset by share
repurchases and elevated levels of unrealized losses on
available-for-sale investment securities included in other
comprehensive income. The Company completed its third share
repurchase program on March 25, 2022 of 2,668,159 shares at an
average price of $14.64. The Company announced a fourth share
repurchase program on April 12, 2022, under which it may repurchase
up to 2,526,134 shares of the Company’s common stock, or
approximately 5% of the Company’s outstanding shares. The
tangible-common-equity-to-tangible-assets ratio was 12.75% at March
31, 2022, 13.53% at December 31, 2021, and 13.77% at March 31,
2021. At March 31, 2022, the Company and the Bank had strong
capital positions and exceeded all regulatory capital
requirements.
About HarborOne Bancorp, Inc.
HarborOne Bancorp, Inc. is the holding company for HarborOne
Bank, a Massachusetts-chartered savings bank. HarborOne Bank serves
the financial needs of consumers, businesses, and municipalities
throughout Eastern Massachusetts and Rhode Island through a network
of 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, 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 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)
March 31,
December 31,
September 30,
June 30,
March 31,
(in thousands)
2022
2021
2021
2021
2021
Assets
Cash and due from banks
$
41,862
$
35,549
$
42,589
$
41,328
$
37,074
Short-term investments
97,870
159,170
277,050
374,319
281,451
Total cash and cash equivalents
139,732
194,719
319,639
415,647
318,525
Securities available for sale, at fair
value
361,529
394,036
390,552
353,848
304,168
Federal Home Loan Bank stock, at cost
5,931
5,931
6,828
7,241
7,572
Asset held for sale
678
881
881
—
—
Loans held for sale, at fair value
25,690
45,642
77,052
103,886
210,494
Loans:
Commercial real estate
1,816,484
1,699,877
1,573,284
1,561,873
1,559,056
Commercial construction
154,059
136,563
152,685
107,585
112,187
Commercial and industrial
410,787
421,608
414,814
467,479
499,728
Total commercial loans
2,381,330
2,258,048
2,140,783
2,136,937
2,170,971
Residential real estate
1,252,920
1,217,980
1,160,689
1,096,370
1,062,229
Consumer
103,100
131,705
156,272
186,430
228,279
Loans
3,737,350
3,607,733
3,457,744
3,419,737
3,461,479
Less: Allowance for credit losses on
loans
(41,765
)
(45,377
)
(47,988
)
(51,273
)
(55,384
)
Net loans
3,695,585
3,562,356
3,409,756
3,368,464
3,406,095
Mortgage servicing rights, at fair
value
45,043
38,268
36,540
35,955
33,939
Goodwill
69,802
69,802
69,802
69,802
69,802
Other intangible assets
2,930
3,164
3,399
3,723
4,047
Other assets
244,405
238,606
252,645
257,856
251,316
Total assets
$
4,591,325
$
4,553,405
$
4,567,094
$
4,616,422
$
4,605,958
Liabilities and Stockholders'
Equity
Deposits:
Demand deposit accounts
$
771,172
$
743,051
$
756,917
$
800,118
$
777,959
NOW accounts
310,090
313,733
300,577
250,099
224,869
Regular savings and club accounts
1,218,656
1,138,979
1,144,595
1,123,123
1,113,450
Money market deposit accounts
864,316
858,970
832,441
832,006
861,867
Term certificate accounts
597,746
627,916
659,850
682,594
696,438
Total deposits
3,761,980
3,682,649
3,694,380
3,687,940
3,674,583
Long-term borrowed funds
55,702
55,711
55,720
87,479
97,488
Subordinated debt
34,191
34,159
34,128
34,096
34,064
Other liabilities and accrued expenses
90,387
101,625
102,834
101,436
101,750
Total liabilities
3,942,260
3,874,144
3,887,062
3,910,951
3,907,885
Common stock
591
585
585
585
585
Additional paid-in capital
477,302
469,934
468,526
467,194
465,832
Unearned compensation - ESOP
(29,002
)
(29,461
)
(29,921
)
(30,380
)
(30,840
)
Retained earnings
332,734
325,699
315,683
305,831
294,116
Treasury stock
(113,513
)
(85,859
)
(73,723
)
(38,588
)
(31,460
)
Accumulated other comprehensive income
(loss)
(19,047
)
(1,637
)
(1,118
)
829
(160
)
Total stockholders' equity
649,065
679,261
680,032
705,471
698,073
Total liabilities and stockholders'
equity
$
4,591,325
$
4,553,405
$
4,567,094
$
4,616,422
$
4,605,958
HarborOne Bancorp,
Inc.
Consolidated Statements of Net
Income - Trend
(Unaudited)
Quarters Ended
March 31,
December 31,
September 30,
June 30,
March 31,
(in thousands, except share data)
2022
2021
2021
2021
2021
Interest and dividend income:
Interest and fees on loans
$
33,576
$
34,177
$
33,680
$
34,106
$
33,860
Interest on loans held for sale
264
501
665
852
1,324
Interest on securities
1,701
1,541
1,293
793
585
Other interest and dividend income
61
134
170
136
78
Total interest and dividend income
35,602
36,353
35,808
35,887
35,847
Interest expense:
Interest on deposits
1,621
1,651
2,050
2,302
2,720
Interest on FHLB borrowings
188
193
431
531
552
Interest on subordinated debentures
523
524
524
524
523
Total interest expense
2,332
2,368
3,005
3,357
3,795
Net interest and dividend income
33,270
33,985
32,803
32,530
32,052
Provision for credit losses
338
(1,436
)
(1,627
)
(4,286
)
91
Net interest and dividend income, after
provision for credit losses
32,932
35,421
34,430
36,816
31,961
Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans
5,322
10,063
12,756
14,262
24,802
Changes in mortgage servicing rights fair
value
5,285
(245
)
(992
)
(2,552
)
3,409
Other
2,558
3,359
3,882
4,075
4,515
Total mortgage banking income
13,165
13,177
15,646
15,785
32,726
Deposit account fees
4,472
4,783
4,658
4,546
3,852
Income on retirement plan annuities
107
109
108
106
104
Gain on sale and call of securities,
net
—
—
241
—
—
Bank-owned life insurance income
483
506
515
508
493
Other income
834
589
842
758
634
Total noninterest income
19,061
19,164
22,010
21,703
37,809
Noninterest expenses:
Compensation and benefits
20,723
24,564
24,760
25,146
27,454
Occupancy and equipment
5,428
4,923
4,765
4,702
5,256
Data processing
2,241
2,244
2,205
2,362
2,343
Loan expense
478
732
1,323
1,250
2,435
Marketing
1,218
1,120
880
831
813
Professional fees
1,539
1,443
1,362
1,487
1,583
Deposit insurance
349
345
341
332
320
Prepayment penalties on Federal Home Loan
Bank advances
—
—
1,095
—
—
Other expenses
2,859
2,817
2,543
2,488
2,598
Total noninterest expenses
34,835
38,188
39,274
38,598
42,802
Income before income taxes
17,158
16,397
17,166
19,921
26,968
Income tax provision
4,891
3,807
4,907
5,645
7,576
Net income
$
12,267
$
12,590
$
12,259
$
14,276
$
19,392
Earnings per common share:
Basic
$
0.26
$
0.26
$
0.25
$
0.28
$
0.37
Diluted
$
0.25
$
0.25
$
0.24
$
0.27
$
0.37
Weighted average shares outstanding:
Basic
47,836,410
48,918,539
49,801,123
51,778,293
52,537,409
Diluted
48,690,420
49,828,379
50,663,415
52,650,071
53,000,830
HarborOne Bancorp,
Inc.
Consolidated Statements of Net
Income
(Unaudited)
For the Three Months Ended
March 31,
(dollars in thousands, except share
data)
2022
2021
$ Change
% Change
Interest and dividend income:
Interest and fees on loans
$
33,576
$
33,860
$
(284
)
(0.8
)%
Interest on loans held for sale
264
1,324
(1,060
)
(80.1
)
Interest on securities
1,701
585
1,116
190.8
Other interest and dividend income
61
78
(17
)
(21.8
)
Total interest and dividend income
35,602
35,847
(245
)
(0.7
)
Interest expense:
Interest on deposits
1,621
2,720
(1,099
)
(40.4
)
Interest on FHLB borrowings
188
552
(364
)
(65.9
)
Interest on subordinated debentures
523
523
—
0.0
Total interest expense
2,332
3,795
(1,463
)
(38.6
)
Net interest and dividend income
33,270
32,052
1,218
3.8
Provision for credit losses
338
91
247
271.4
Net interest and dividend income, after
provision for credit losses
32,932
31,961
971
3.0
Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans
5,322
24,802
(19,480
)
(78.5
)
Changes in mortgage servicing rights fair
value
5,285
3,409
1,876
55.0
Other
2,558
4,515
(1,957
)
(43.3
)
Total mortgage banking income
13,165
32,726
(19,561
)
(59.8
)
Deposit account fees
4,472
3,852
620
16.1
Income on retirement plan annuities
107
104
3
2.9
Bank-owned life insurance income
483
493
(10
)
(2.0
)
Other income
834
634
200
31.5
Total noninterest income
19,061
37,809
(18,748
)
(49.6
)
Noninterest expenses:
Compensation and benefits
20,723
27,454
(6,731
)
(24.5
)
Occupancy and equipment
5,428
5,256
172
3.3
Data processing
2,241
2,343
(102
)
(4.4
)
Loan expense
478
2,435
(1,957
)
(80.4
)
Marketing
1,218
813
405
49.8
Professional fees
1,539
1,583
(44
)
(2.8
)
Deposit insurance
349
320
29
9.1
Other expenses
2,859
2,598
261
10.0
Total noninterest expenses
34,835
42,802
(7,967
)
(18.6
)
Income before income taxes
17,158
26,968
(9,810
)
(36.4
)
Income tax provision
4,891
7,576
(2,685
)
(35.4
)
Net income
$
12,267
$
19,392
$
(7,125
)
(36.7
)%
Earnings per common share:
Basic
$
0.26
$
0.37
Diluted
$
0.25
$
0.37
Weighted average shares outstanding:
Basic
47,836,410
52,537,409
Diluted
48,690,420
53,000,830
HarborOne Bancorp,
Inc.
Average Balances /
Yields
(Unaudited)
Quarters Ended
March 31, 2022
December 31, 2021
March 31, 2021
Average
Average
Average
Outstanding
Yield/
Outstanding
Yield/
Outstanding
Yield/
Balance
Interest
Cost (6)
Balance
Interest
Cost (6)
Balance
Interest
Cost (6)
(dollars in thousands)
Interest-earning assets:
Investment securities (1)
$
393,364
$
1,701
1.75
%
$
394,301
$
1,541
1.55
%
$
271,357
$
585
0.87
%
Other interest-earning assets
150,569
61
0.16
286,026
134
0.19
180,526
78
0.18
Loans held for sale
29,842
264
3.59
63,833
501
3.11
193,426
1,324
2.78
Loans
Commercial loans (2)
2,291,343
22,095
3.91
2,165,739
22,658
4.15
2,161,076
20,780
3.90
Residential real estate loans (2)
1,220,703
10,142
3.37
1,171,608
9,870
3.34
1,084,292
10,340
3.87
Consumer loans (2)
118,242
1,339
4.59
143,577
1,649
4.56
253,014
2,740
4.39
Total loans
3,630,288
33,576
3.75
3,480,924
34,177
3.90
3,498,382
33,860
3.93
Total interest-earning assets
4,204,063
35,602
3.43
4,225,084
36,353
3.41
4,143,691
35,847
3.51
Noninterest-earning assets
326,811
337,310
330,257
Total assets
$
4,530,874
$
4,562,394
$
4,473,948
Interest-bearing liabilities:
Savings accounts
$
1,165,683
366
0.13
$
1,147,855
247
0.09
$
1,058,820
537
0.21
NOW accounts
301,279
36
0.05
300,459
40
0.05
212,282
37
0.07
Money market accounts
858,792
303
0.14
839,977
307
0.15
861,518
560
0.26
Certificates of deposit
522,211
729
0.57
543,208
878
0.64
608,089
1,444
0.96
Brokered deposits
100,000
187
0.76
100,000
179
0.71
100,000
142
0.58
Total interest-bearing deposits
2,947,965
1,621
0.22
2,931,499
1,651
0.22
2,840,709
2,720
0.39
FHLB advances
55,706
188
1.37
55,714
193
1.37
102,383
552
2.19
Subordinated debentures
34,173
523
6.21
34,144
524
6.09
34,048
523
6.23
Total borrowings
89,879
711
3.21
89,858
717
3.17
136,431
1,075
3.20
Total interest-bearing liabilities
3,037,844
2,332
0.31
3,021,357
2,368
0.31
2,977,140
3,795
0.52
Noninterest-bearing
liabilities:
Noninterest-bearing deposits
738,578
768,361
706,274
Other noninterest-bearing liabilities
86,763
92,034
93,380
Total liabilities
3,863,185
3,881,752
3,776,794
Total stockholders' equity
667,689
680,642
697,154
Total liabilities and stockholders'
equity
$
4,530,874
$
4,562,394
$
4,473,948
Tax equivalent net interest income
33,270
33,985
32,052
Tax equivalent interest rate spread
(3)
3.12
%
3.10
%
2.99
%
Less: tax equivalent adjustment
—
—
—
Net interest income as reported
$
33,270
$
33,985
$
32,052
Net interest-earning assets (4)
$
1,166,219
$
1,203,727
$
1,166,551
Net interest margin (5)
3.21
%
3.19
%
3.14
%
Tax equivalent effect
—
—
—
Net interest margin on a fully tax
equivalent basis
3.21
%
3.19
%
3.14
%
Average interest-earning assets to average
interest-bearing liabilities
138.39
%
139.84
%
139.18
%
Supplemental information:
Total deposits, including demand
deposits
$
3,686,543
$
1,621
$
3,699,860
$
1,651
$
3,546,983
$
2,720
Cost of total deposits
0.18
%
0.18
%
0.31
%
Total funding liabilities, including
demand deposits
$
3,776,422
$
2,332
$
3,789,718
$
2,368
$
3,683,414
$
3,795
Cost of total funding liabilities
0.25
%
0.25
%
0.42
%
(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 and Yield
Trend
(Unaudited)
Average Balances - Trend -
Quarters Ended
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
March 31, 2021
(in thousands)
Interest-earning assets:
Investment securities (1)
$
393,364
$
394,301
$
358,927
$
325,205
$
271,357
Other interest-earning assets
150,569
286,026
372,892
397,979
180,526
Loans held for sale
29,842
63,833
84,399
115,240
193,426
Loans
Commercial loans (2)
2,291,343
2,165,739
2,121,432
2,152,105
2,161,076
Residential real estate loans (2)
1,220,703
1,171,608
1,121,898
1,064,481
1,084,292
Consumer loans (2)
118,242
143,577
170,366
205,856
253,014
Total loans
3,630,288
3,480,924
3,413,696
3,422,442
3,498,382
Total interest-earning assets
4,204,063
4,225,084
4,229,914
4,260,866
4,143,691
Noninterest-earning assets
326,811
337,310
347,060
339,438
330,257
Total assets
$
4,530,874
$
4,562,394
$
4,576,974
$
4,600,304
$
4,473,948
Interest-bearing liabilities:
Savings accounts
$
1,165,683
$
1,147,855
$
1,136,131
$
1,118,494
$
1,058,820
NOW accounts
301,279
300,459
283,725
231,075
212,282
Money market accounts
858,792
839,977
832,340
853,586
861,518
Certificates of deposit
522,211
543,208
570,570
589,964
608,089
Brokered deposits
100,000
100,000
100,000
100,000
100,000
Total interest-bearing deposits
2,947,965
2,931,499
2,922,766
2,893,119
2,840,709
FHLB advances
55,706
55,714
84,438
96,823
102,383
Subordinated debentures
34,173
34,144
34,111
34,080
34,048
Total borrowings
89,879
89,858
118,549
130,903
136,431
Total interest-bearing liabilities
3,037,844
3,021,357
3,041,315
3,024,022
2,977,140
Noninterest-bearing
liabilities:
Noninterest-bearing deposits
738,578
768,361
756,927
784,521
706,274
Other noninterest-bearing liabilities
86,763
92,034
90,366
88,577
93,380
Total liabilities
3,863,185
3,881,752
3,888,608
3,897,120
3,776,794
Total stockholders' equity
667,689
680,642
688,366
703,184
697,154
Total liabilities and stockholders'
equity
$
4,530,874
$
4,562,394
$
4,576,974
$
4,600,304
$
4,473,948
Annualized Yield Trend -
Quarters Ended
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
March 31, 2021
Interest-earning assets:
Investment securities (1)
1.75
%
1.55
%
1.43
%
0.98
%
0.87
%
Other interest-earning assets
0.16
%
0.19
%
0.18
%
0.14
%
0.18
%
Loans held for sale
3.59
%
3.11
%
3.13
%
2.97
%
2.78
%
Commercial loans (2)
3.91
%
4.15
%
4.19
%
4.11
%
3.90
%
Residential real estate loans (2)
3.37
%
3.34
%
3.31
%
3.67
%
3.87
%
Consumer loans (2)
4.59
%
4.56
%
4.50
%
4.44
%
4.39
%
Total loans
3.75
%
3.90
%
3.91
%
4.00
%
3.93
%
Total interest-earning assets
3.43
%
3.41
%
3.36
%
3.38
%
3.51
%
Interest-bearing liabilities:
Savings accounts
0.13
%
0.09
%
0.13
%
0.17
%
0.21
%
NOW accounts
0.05
%
0.05
%
0.06
%
0.07
%
0.07
%
Money market accounts
0.14
%
0.15
%
0.19
%
0.20
%
0.26
%
Certificates of deposit
0.57
%
0.64
%
0.76
%
0.84
%
0.96
%
Brokered deposits
0.76
%
0.71
%
0.64
%
0.62
%
0.58
%
Total interest-bearing deposits
0.22
%
0.22
%
0.28
%
0.32
%
0.39
%
FHLB advances
1.37
%
1.37
%
2.03
%
2.20
%
2.19
%
Subordinated debentures
6.21
%
6.09
%
6.09
%
6.17
%
6.23
%
Total borrowings
3.21
%
3.17
%
3.20
%
3.23
%
3.20
%
Total interest-bearing liabilities
0.31
%
0.31
%
0.39
%
0.45
%
0.52
%
(1) Includes securities available for
sale.
(2) Includes nonaccruing loan balances and
interest received on such loans.
HarborOne Bancorp,
Inc.
Selected Financial
Highlights
(Unaudited)
Quarters Ended
March 31,
December 31,
September 30,
June 30,
March 31,
Performance Ratios
(annualized):
2022
2021
2021
2021
2021
(dollars in thousands)
Return on average assets (ROAA)
1.08
%
1.10
%
1.07
%
1.24
%
1.73
%
Return on average equity (ROAE)
7.35
%
7.40
%
7.12
%
8.12
%
11.13
%
Total noninterest expense
$
34,835
$
38,188
$
39,274
$
38,598
$
42,802
Less: Amortization of other intangible
assets
235
235
324
324
324
Total adjusted noninterest expense
$
34,600
$
37,953
$
38,950
$
38,274
$
42,478
Net interest and dividend income
$
33,270
$
33,985
$
32,803
$
32,530
$
32,052
Total noninterest income
19,061
19,164
22,010
21,703
37,809
Total revenue
$
52,331
$
53,149
$
54,813
$
54,233
$
69,861
Efficiency ratio (1)
66.12
%
71.41
%
71.06
%
70.57
%
60.80
%
(1) This non-GAAP measure represents
adjusted noninterest expense divided by total revenue
At or for the Quarters
Ended
March 31,
December 31,
September 30,
June 30,
March 31,
Asset Quality
2022
2021
2021
2021
2021
(dollars in thousands)
Total nonperforming assets
$
26,109
$
36,186
$
36,514
$
32,731
$
32,886
Nonperforming assets to total assets
0.57
%
0.79
%
0.80
%
0.71
%
0.71
%
Allowance for credit losses on loans to
total loans
1.12
%
1.26
%
1.39
%
1.50
%
1.60
%
Net charge-offs
$
2,730
$
1,174
$
1,658
$
(175)
$
102
Annualized net charge-offs/average
loans
0.30
%
0.13
%
0.19
%
(0.02)
%
0.01
%
Allowance for credit losses on loans to
nonperforming loans
159.96
%
125.60
%
131.52
%
158.08
%
171.18
%
HarborOne Bancorp,
Inc.
Selected Financial
Highlights
(Unaudited)
March 31,
December 31,
September 30,
June 30,
March 31,
Capital and Share Related
2022
2021
2021
2021
2021
(dollars in thousands, except share
data)
Common stock outstanding
51,257,696
52,390,478
53,232,110
55,735,623
56,228,762
Book value per share
$
12.66
$
12.97
$
12.77
$
12.66
$
12.41
Tangible common equity:
Total stockholders' equity
$
649,065
$
679,261
$
680,032
$
705,471
$
698,073
Less: Goodwill
69,802
69,802
69,802
69,802
69,802
Less: Other intangible assets (1)
2,930
3,164
3,399
3,723
4,047
Tangible common equity
$
576,333
$
606,295
$
606,831
$
631,946
$
624,224
Tangible book value per share (2)
$
11.24
$
11.57
$
11.40
$
11.34
$
11.10
Tangible assets:
Total assets
$
4,591,325
$
4,553,405
$
4,567,094
$
4,616,422
$
4,605,958
Less: Goodwill
69,802
69,802
69,802
69,802
69,802
Less: Other intangible assets
2,930
3,164
3,399
3,723
4,047
Tangible assets
$
4,518,593
$
4,480,439
$
4,493,893
$
4,542,897
$
4,532,109
Tangible common equity / tangible assets
(3)
12.75
%
13.53
%
13.50
%
13.91
%
13.77
%
(1) Other intangible assets are core
deposit intangibles.
(2) This non-GAAP ratio is total
stockholders' equity less goodwill and intangible assets divided by
common stock outstanding.
(3) This non-GAAP ratio is total
stockholders' equity less goodwill and intangible assets to total
assets less goodwill and intangible assets.
HarborOne Bancorp,
Inc.
Segments Statements of Net
Income
(Unaudited)
HarborOne Mortgage
HarborOne Bank
For the Quarter Ended
For the Quarter Ended
March 31,
December 31,
March 31,
March 31,
December 31,
March 31,
2022
2021
2021
2022
2021
2021
(in thousands)
Net interest and dividend income
$
350
$
571
$
1,250
$
33,424
$
33,909
$
31,248
Provision for credit losses
—
—
—
338
(1,436
)
91
Net interest and dividend income, after
provision for loan losses
350
571
1,250
33,086
35,345
31,157
Mortgage banking income:
Gain on sale of mortgage loans
5,322
10,063
24,802
—
—
—
Intersegment gain (loss)
837
496
662
(608
)
(720
)
(662
)
Changes in mortgage servicing rights fair
value
4,695
(315
)
3,123
590
70
286
Other
2,325
3,108
4,215
233
251
300
Total mortgage banking income (loss)
13,179
13,352
32,802
215
(399
)
(76
)
Other noninterest income (loss)
9
7
(8
)
5,887
5,980
5,091
Total noninterest income
13,188
13,359
32,794
6,102
5,581
5,015
Noninterest expense
7,761
10,467
18,057
26,825
27,396
24,463
Income before income taxes
5,777
3,463
15,987
12,363
13,530
11,709
Provision for income taxes
1,541
664
4,333
3,557
3,060
3,435
Net income
$
4,236
$
2,799
$
11,654
$
8,806
$
10,470
$
8,274
HarborOne Bancorp,
Inc.
COVID Loans at Risk as of
March 31, 2022
(Unaudited)
At Risk Sectors
Percent
Total
at risk
at risk
Total
sector
Retail
Office Space
Hotels
Restaurants
Recreation
sectors
loans
to total
(dollars in thousands)
Commercial real estate
$
249,010
$
182,041
$
251,081
$
16,183
$
14,351
$
712,666
$
1,816,484
39.2
%
Commercial and industrial
31,811
12,858
3,134
21,786
4,193
73,782
410,787
18.0
Commercial construction
19,076
1,028
9,342
18,575
696
48,717
154,059
31.6
Total
$
299,897
$
195,927
$
263,557
$
56,544
$
19,240
$
835,165
$
2,381,330
35.1
%
PPP loans, net of fees
$
522
$
—
$
1,252
$
1,706
$
1,251
$
4,731
$
13,155
36.0
%
Nonaccrual loans
$
49
$
—
$
10,752
$
—
$
—
$
10,801
$
26,109
41.4
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220427006182/en/
Linda Simmons, EVP, CFO (508) 895-1379
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