HarborOne Bancorp, Inc. (the “Company” or “HarborOne”) (NASDAQ:
HONE), the holding company for HarborOne Bank (the “Bank”),
announced net income of $7.3 million, or $0.17 per diluted share,
for the first quarter of 2024, compared to a net loss of $7.1
million, or $0.17 per diluted share for the preceding quarter, and
net income of $7.3 million, or $0.16 per diluted share for the same
period last year. Excluding the HarborOne Mortgage, LLC (“HarborOne
Mortgage”) goodwill impairment charge of $10.8 million recorded in
the fourth quarter of 2023, included in noninterest expense, net
income and diluted earnings per share for the quarter ended
December 31, 2023 were $3.7 million and $0.09, respectively.(1)
Selected Financial Highlights:
- Strong asset quality; nonperforming loans as a percentage of
total loans were 0.25% compared to 0.37% last quarter.
- Increased noninterest income 20.6% on a linked-quarter
basis.
- Reduced noninterest expense 2.2% on a linked-quarter basis,
excluding the goodwill impairment recorded in 2023.
- Loan growth of $26.4 million, or 2.2% annualized.
- Continued share repurchase program, repurchasing 558,900 shares
at an average cost of $10.40 per share, totaling $5.8 million.
- Returned $3.4 million of capital to shareholders via dividends
and increased quarterly dividend by 6.7%.
“In this uncertain interest rate environment, our team remains
laser focused on expense management and moderate commercial loan
growth that brings operational deposits to the Bank,” said Joseph
F. Casey, President and CEO. “This quarter was the first quarter
since the second quarter of 2022 where the yield on
interest-earning assets increased more than the cost of
interest-bearing liabilities. I am pleased with our improved
earnings this quarter and with our ability to return $9.2 million
to shareholders through the cash dividend, which increased 6.7%,
and through the continuation of our stock buybacks.”
Net Interest Income
The Company’s net interest and dividend income was $30.6 million
for the quarter ended March 31, 2024, compared to $29.7 million for
the quarter ended December 31, 2023, and $34.4 million for the
quarter ended March 31, 2023. The tax equivalent interest rate
spread and net interest margin were 1.62% and 2.25%, respectively,
for the quarter ended March 31, 2024, compared to 1.56% and 2.23%,
respectively, for the quarter ended December 31, 2023, and 2.28%
and 2.78%, respectively, for the quarter ended March 31, 2023. The
fourth quarter results included interest expense of $620,000 for
the remaining unamortized issuance cost on the Company’s $35
million subordinated notes redeemed in the fourth quarter of
2023.
On a linked-quarter basis, the increase in the margin, spread
and net interest and dividend income reflects average
interest-earning assets increasing $172.8 million and the yield on
interest-earning assets increasing 10 basis points while average
interest-bearing liabilities increased $207.6 million and the cost
of these liabilities increased 4 basis points. The cost of
interest-bearing deposits, excluding brokered, decreased 2 basis
points, driven by disciplined pricing in a competitive deposit
market.
The $3.8 million decrease in net interest and dividend income
from the prior year quarter reflects an increase of $14.8 million,
or 68.6%, in total interest expense, partially offset by an
increase of $11.0 million, or 19.6%, in total interest and dividend
income. The cost of interest-bearing liabilities increased 106
basis points, while the average balance increased $521.3 million,
and the yield on interest-earning assets increased 40 basis points,
while the average balance increased $451.9 million.
Noninterest Income
Total noninterest income improved $1.8 million, or 20.6%, to
$10.7 million for the quarter ended March 31, 2024, from $8.9
million for the quarter ended December 31, 2023. The change was
primarily driven by an increase in the mortgage servicing rights
(“MSR”) valuation for the three months ended March 31, 2024 of
$628,000, compared to a decrease of $3.1 million in the MSR
valuation for the three months ended December 31, 2023. The MSR
valuation was positively impacted by key benchmark interest rates
used in the valuation model, which increased from the prior
quarter. The impact on the MSR valuation of principal payments on
the underlying mortgages was $353,000 and $487,000 for the quarters
ended, March 31, 2024 and December 31, 2023, respectively. During
the first quarter of 2024, HarborOne Mortgage executed a hedge to
partially mitigate potential MSR valuation losses in a declining
rate environment. As a result, the MSR valuation gain was partially
offset by a $221,000 hedging loss in the quarter.
Persistent low inventory of for-sale residential real estate and
elevated mortgage interest rates continued to impact the results of
HarborOne Mortgage, with gain on loan sales of $2.0 million from
mortgage loan closings of $102.1 million for the quarter ended
March 31, 2024, compared to $2.2 million from mortgage loan
closings of $124.2 million on a linked-quarter basis. Slightly
higher gain-on-sale margins partially offset seasonally lower
production volume. Mortgage loan closings for the quarter ended
March 31, 2023 were $125.6 million with a gain on loan sales of
$2.2 million.
Total noninterest income for the quarter ended December 31, 2023
included a $305,000 gain on sale of a former bank branch, and
$582,000 recognized on a Bank-owned life insurance (“BOLI”)
surrender and exchange strategy. BOLI income was offset by a
$464,000 corresponding tax impact included in the provision for
income taxes and a modified endowment contract charge included in
noninterest expense. The quarter ended March 31, 2024 had no such
income.
Total noninterest income increased $2.1 million, or 23.6%,
compared to the quarter ended March 31, 2023, primarily due to a
$1.6 million, or 58.0%, increase in mortgage banking income. The
prior year quarter reflected a $1.3 million decrease in the MSR
valuation.
Noninterest Expense
Total noninterest expense decreased $11.5 million, or 26.5%, to
$31.8 million for the quarter ended March 31, 2024, from $43.2
million for the quarter ended December 31, 2023. Excluding the
one-time $10.8 million goodwill impairment charge from the fourth
quarter results, noninterest expenses decreased $704,000 on a
linked-quarter basis. Compensation and benefits expenses decreased
$1.6 million as the fourth quarter of 2023 included catch-up
accrual adjustments for incentives and certain benefits. The fourth
quarter of 2023 also included $118,000 in severance expense for a
reduction in force at HarborOne Mortgage. Loan expense increased
$688,000, as the fourth quarter of 2023 included a $629,000
reversal of repurchase reserve at HarborOne Mortgage based on
updated assumptions used to determine the estimate.
Total noninterest expense increased $241,000, or 0.8%, compared
to the prior year quarter of $31.5 million. Deposit insurance
expense increased $654,000 partially offset by a $365,000 decrease
in marketing expense.
Asset Quality and Allowance for Credit Losses
Total nonperforming assets were $12.2 million at March 31, 2024,
compared to $17.6 million at December 31, 2023 and $12.3 million at
March 31, 2023. Nonperforming assets as a percentage of total
assets were 0.21% at March 31, 2024, 0.31% at December 31, 2023,
and 0.22% at March 31, 2023. During the first quarter of 2024, a
single credit included in the metro office space loan segment with
a carrying value of $5.7 million, considered nonperforming in the
prior quarter, was paid with a partial recovery of $99,000.
The Company recorded a $168,000 negative provision for credit
losses for the quarter ended March 31, 2024. The provision for loan
credit losses was $338,000, offset by a negative provision of
$506,000 for unfunded commitments. The provision for credit losses
for the quarter ended December 31, 2023 was $644,000, a result of a
provision for loan credit losses of $970,000 partially offset by a
$326,000 negative provision for unfunded commitments. The Company
recorded a provision for credit losses of $1.9 million for the
quarter ended March 31, 2023, a result of a provision for loan
credit losses of $1.7 million and a $119,000 provision for unfunded
commitments. Net charge-offs totaled $125,000, or 0.01%, of average
loans outstanding on an annualized basis, for the quarter ended
March 31, 2024. Net charge-offs totaled $1.3 million, or 0.11%, of
average loans outstanding on an annualized basis, for the quarter
ended December 31, 2023, and net recoveries totaled $11,000 for the
quarter ended March 31, 2023. Loan credit loss provisioning
primarily reflects replenishment of the allowance for credit losses
(“ACL”) on loans due to charge-offs and loan growth.
The ACL on loans was $48.2 million, or 1.01% of total loans, at
March 31, 2024, compared to $48.0 million, or 1.01% of total loans,
at December 31, 2023 and $47.0 million, or 1.02% of total loans, at
March 31, 2023. The ACL on unfunded commitments, included in other
liabilities on the unaudited Consolidated Balance Sheets, amounted
to $3.4 million at March 31, 2024, compared to $3.9 million at
December 31, 2023 and $5.0 million at March 31, 2023.
Management continues to closely monitor the loan portfolio for
signs of deterioration in light of speculation that commercial real
estate values may deteriorate as the market adjusts to higher
vacancies and interest rates. The commercial real estate portfolio
is centered in New England, with approximately 75% of the portfolio
secured by property located in Massachusetts and Rhode Island.
Approximately 60% of the commercial real estate loans are
fixed-rate loans with, in the opinion of management, limited
near-term maturity risk. As of March 31, 2024 commercial loans
rated “watch” amounted to $67.9 million, compared to $30.6 million
at December 31, 2023. Loans are rated “watch” at the point when
there are signs of potential weakness. Approximately 41% of the
increase is due to one credit included in the office category.
Management performs comprehensive reviews and works proactively
with creditworthy borrowers facing financial distress and
implements prudent workouts and accommodations to improve the
Bank’s prospects of contractual repayment.
Three sub-sectors that Management identified as potentially more
susceptible to weakness includes business-oriented hotels,
non-anchored retail space, and metro office space. As of March 31,
2024, business-oriented hotels loans included 14 loans with a total
outstanding balance of $122.0 million, non-anchored retail space
loans included 28 loans with a total outstanding balance of $44.6
million, and metro office space loans included one loan with a
total outstanding balance of $5.1 million. There is one
business-oriented hotel credit with a carrying value of $1.8
million that was rated substandard and on nonaccrual. The other
loans in these groups were performing in accordance with their
terms.
Balance Sheet
Total assets increased $194.3 million, or 3.4%, to $5.86 billion
at March 31, 2024, from $5.67 billion at December 31, 2023. The
linked-quarter increase primarily reflects an increase in cash and
cash equivalents.
Available-for-sale securities were $291.0 million and $290.2
million at March 31, 2024 and December 31, 2023, respectively. The
unrealized loss on securities available for sale increased to $66.9
million as of March 31, 2024, as compared to $62.0 million of
unrealized losses as of December 31, 2023. Securities held to
maturity were flat at $19.7 million, or 0.3% of total assets, at
March 31, 2024.
Loans increased $26.4 million, or 0.6%, to $4.78 billion at
March 31, 2024, from $4.75 billion at December 31, 2023. The
linked-quarter increase was primarily due to increases in
commercial construction loans of $26.4 million, commercial real
estate loans of $12.0 million, and commercial and industrial loans
of $4.8 million, partially offset by decreases in residential
mortgage loans of $14.0 million and consumer loans of $2.7
million.
Total deposits were $4.39 billion at March 31, 2024 and December
31, 2023. Compared to the prior quarter, non-certificate accounts
decreased $43.5 million and term certificate accounts decreased
$11.1 million, as a competitive rate environment continued to
pressure deposit growth. Brokered deposits increased $61.3 million.
As of March 31, 2024, FDIC-insured deposits were approximately 73%
of total deposits, including Bank subsidiary deposits.
FHLB borrowings increased $10.9 million to $579.4 million at
March 31, 2024 from $568.5 million at December 31, 2023. The Bank
borrowed $175.0 million under the Bank Term Funding Program during
the first quarter of 2024. As of March 31, 2024, the Bank had
$921.1 million in available borrowing capacity across multiple
relationships.
Total stockholders’ equity was $577.7 million at March 31, 2024,
compared to $583.8 million at December 31, 2023. Stockholders’
equity decreased 1.0% when compared to the prior quarter, as net
income was offset by share repurchases and an increase in
unrealized loss on available-for-sale securities. As of March 31,
2024, the Company’s sixth share repurchase program, commenced in
the third quarter of 2023, is ongoing with 1,781,950 shares
repurchased since commencement, at an average price of $10.15,
including $0.10 per share of excise tax. The
tangible-common-equity-to-tangible-assets ratio(2) was 8.92% at
March 31, 2024, 9.33% at December 31, 2023, and 9.60% at March 31,
2023. At March 31, 2024, the Company and the Bank had strong
capital positions, exceeding all regulatory capital requirements,
and are considered well-capitalized.
(1) These non-GAAP measures are net loss less goodwill
impairment and net loss less goodwill impairment to weighted
average shares outstanding on a diluted basis. (2) This non-GAAP
ratio is total stockholders’ equity less goodwill and intangible
assets to total assets less goodwill and intangible assets.
About HarborOne Bancorp, Inc.
HarborOne Bancorp, Inc. is the holding company for HarborOne
Bank, a Massachusetts-chartered trust company. HarborOne Bank
serves the financial needs of consumers, businesses, and
municipalities throughout Eastern Massachusetts and Rhode Island
through a network of 30 full-service banking centers located in
Massachusetts and Rhode Island, and commercial lending offices in
Boston, Massachusetts and Providence, Rhode Island. HarborOne Bank
also provides a range of educational resources through “HarborOne
U,” with free digital content, webinars, and recordings for small
business and personal financial education. HarborOne Mortgage, LLC,
a subsidiary of HarborOne Bank, provides mortgage lending services
throughout New England and other states.
Forward Looking Statements
Certain statements herein constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Exchange Act and are intended to be
covered by the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. We may also make forward-looking
statements in other documents we file with the Securities and
Exchange Commission (“SEC”), in our annual reports to shareholders,
in press releases and other written materials, and in oral
statements made by our officers, directors or employees. Such
statements may be identified by words such as “believes,” “will,”
“would,” “expects,” “project,” “may,” “could,” “developments,”
“strategic,” “launching,” “opportunities,” “anticipates,”
“estimates,” “intends,” “plans,” “targets” and similar expressions.
These statements are based upon the current beliefs and
expectations of the Company’s management and are subject to
significant risks and uncertainties. Actual results may differ
materially from those set forth in the forward-looking statements
as a result of numerous factors. Factors that could cause such
differences to exist include, but are not limited to, changes in
general business and economic conditions (including inflation and
concerns about inflation) on a national basis and in the local
markets in which the Company operates, including changes that
adversely affect borrowers’ ability to service and repay the
Company’s loans; changes in interest rates; changes in customer
behavior; ongoing turbulence in the capital and debt markets and
the impact of such conditions on the Company’s business activities;
increases in loan default and charge-off rates; decreases in the
value of securities in the Company’s investment portfolio;
fluctuations in real estate values; the possibility that future
credit losses may be higher than currently expected due to changes
in economic assumptions, customer behavior or adverse economic
developments; the adequacy of loan loss reserves; decreases in
deposit levels necessitating increased borrowing to fund loans and
investments; competitive pressures from other financial
institutions; acquisitions may not produce results at levels or
within time frames originally anticipated; cybersecurity incidents,
fraud, natural disasters, war, terrorism, civil unrest, and
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 income statement results excluding the goodwill
impairment charge, total adjusted noninterest expense excluding the
goodwill impairment charge, diluted earnings per share excluding
the goodwill impairment charge, Return on average assets (ROAA),
excluding the goodwill impairment charge, Return on average equity
(ROAE), excluding goodwill impairment charge, the efficiency ratio,
efficiency ratio excluding the goodwill impairment charge, tangible
common equity to tangible assets ratio and tangible book value per
share, is utilized by regulators and market analysts to evaluate a
company’s financial condition and therefore, such information is
useful to investors. These disclosures should not be viewed as a
substitute for financial results determined in accordance with
GAAP, nor are they necessarily comparable to non-GAAP performance
measures which may be presented by other companies. Because
non-GAAP financial measures are not standardized, it may not be
possible to compare these financial measures with other companies’
non-GAAP financial measures having the same or similar names.
HarborOne Bancorp,
Inc.
Consolidated Balance Sheet
Trend
(Unaudited)
March 31,
December 31,
September 30,
June 30,
March 31,
(in thousands)
2024
2023
2023
2023
2023
Assets
Cash and due from banks
$
36,340
$
38,876
$
38,573
$
43,525
$
38,989
Short-term investments
357,101
188,474
208,211
209,326
210,765
Total cash and cash equivalents
393,441
227,350
246,784
252,851
249,754
Securities available for sale, at fair
value
291,008
290,151
271,078
292,012
303,059
Securities held to maturity, at amortized
cost
19,724
19,796
19,795
19,839
19,838
Federal Home Loan Bank stock, at cost
26,565
27,098
23,378
27,123
23,589
Asset held for sale
348
348
966
966
—
Loans held for sale, at fair value
16,434
19,686
17,796
20,949
13,956
Loans:
Commercial real estate
2,355,672
2,343,675
2,349,886
2,286,688
2,286,727
Commercial construction
234,811
208,443
191,224
228,902
212,689
Commercial and industrial
471,215
466,443
450,547
453,422
423,036
Total commercial loans
3,061,698
3,018,561
2,991,657
2,969,012
2,922,452
Residential real estate
1,695,686
1,709,714
1,706,950
1,701,766
1,667,934
Consumer
19,301
22,036
24,247
27,425
32,246
Loans
4,776,685
4,750,311
4,722,854
4,698,203
4,622,632
Less: Allowance for credit losses on
loans
(48,185
)
(47,972
)
(48,312
)
(47,821
)
(46,994
)
Net loans
4,728,500
4,702,339
4,674,542
4,650,382
4,575,638
Mortgage servicing rights, at fair
value
46,597
46,111
49,201
48,176
47,080
Goodwill
59,042
59,042
69,802
69,802
69,802
Other intangible assets
1,326
1,515
1,704
1,893
2,082
Other assets
279,237
274,460
289,341
275,261
268,060
Total assets
$
5,862,222
$
5,667,896
$
5,664,387
$
5,659,254
$
5,572,858
Liabilities and Stockholders'
Equity
Deposits:
Demand deposit accounts
$
677,152
$
659,973
$
708,847
$
717,572
$
726,548
NOW accounts
305,071
305,825
289,141
286,956
287,376
Regular savings and club accounts
1,110,404
1,265,315
1,324,635
1,390,906
1,455,318
Money market deposit accounts
1,061,145
966,201
951,128
834,120
796,008
Term certificate accounts
852,326
863,457
859,266
742,931
653,553
Brokered deposits
387,926
326,638
276,941
315,003
322,927
Total deposits
4,394,024
4,387,409
4,409,958
4,287,488
4,241,730
Borrowings
754,380
568,462
475,470
604,568
590,665
Subordinated debt
—
—
34,380
34,348
34,317
Other liabilities and accrued expenses
136,135
128,266
159,945
137,318
106,352
Total liabilities
5,284,539
5,084,137
5,079,753
5,063,722
4,973,064
Common stock
598
598
597
597
597
Additional paid-in capital
487,277
486,502
485,144
484,544
483,831
Unearned compensation - ESOP
(25,326
)
(25,785
)
(26,245
)
(26,704
)
(27,164
)
Retained earnings
363,591
359,656
369,930
364,709
360,454
Treasury stock
(199,853
)
(193,590
)
(187,803
)
(181,324
)
(175,514
)
Accumulated other comprehensive loss
(48,604
)
(43,622
)
(56,989
)
(46,290
)
(42,410
)
Total stockholders' equity
577,683
583,759
584,634
595,532
599,794
Total liabilities and stockholders'
equity
$
5,862,222
$
5,667,896
$
5,664,387
$
5,659,254
$
5,572,858
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)
2024
2023
2023
2023
2023
Interest and dividend income:
Interest and fees on loans
$
59,937
$
59,499
$
58,124
$
55,504
$
52,771
Interest on loans held for sale
243
369
370
326
286
Interest on securities
2,065
2,001
2,003
2,035
2,079
Other interest and dividend income
4,659
2,516
2,667
2,935
803
Total interest and dividend income
66,904
64,385
63,164
60,800
55,939
Interest expense:
Interest on deposits
26,899
27,310
25,039
20,062
15,913
Interest on borrowings
9,423
6,260
6,439
8,114
5,105
Interest on subordinated debentures
—
1,122
606
524
523
Total interest expense
36,322
34,692
32,084
28,700
21,541
Net interest and dividend income
30,582
29,693
31,080
32,100
34,398
Provision (benefit) for credit losses
(168
)
644
(113
)
3,283
1,866
Net interest and dividend income, after
provision for credit losses
30,750
29,049
31,193
28,817
32,532
Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans
2,013
2,176
2,704
3,300
2,224
Changes in mortgage servicing rights fair
value
54
(3,553
)
125
436
(1,692
)
Other
2,276
2,301
2,270
2,312
2,216
Total mortgage banking income
4,343
924
5,099
6,048
2,748
Deposit account fees
4,983
5,178
5,133
5,012
4,733
Income on retirement plan annuities
145
147
146
128
119
Bank-owned life insurance income
746
1,207
531
511
500
Other income
524
1,448
689
963
590
Total noninterest income
10,741
8,904
11,598
12,662
8,690
Noninterest expenses:
Compensation and benefits
17,636
19,199
18,699
18,220
17,799
Occupancy and equipment
4,781
4,670
4,430
4,633
5,040
Data processing
2,479
2,474
2,548
2,403
2,346
Loan (income) expense
371
(317
)
385
417
313
Marketing
816
811
794
925
1,181
Professional fees
1,457
1,690
1,374
1,114
1,501
Deposit insurance
1,164
795
1,004
1,176
510
Goodwill impairment
—
10,760
—
—
—
Other expenses
3,046
3,132
2,638
2,837
2,819
Total noninterest expenses
31,750
43,214
31,872
31,725
31,509
Income (loss) before income taxes
9,741
(5,261
)
10,919
9,754
9,713
Income tax provision
2,441
1,850
2,507
2,275
2,416
Net income (loss)
$
7,300
$
(7,111
)
$
8,412
$
7,479
$
7,297
Earnings (losses) per common share:
Basic
$
0.17
$
(0.17
)
$
0.20
$
0.17
$
0.16
Diluted
$
0.17
$
(0.17
)
$
0.20
$
0.17
$
0.16
Weighted average shares outstanding:
Basic
41,912,421
42,111,872
42,876,893
43,063,507
44,857,224
Diluted
42,127,037
42,299,858
42,983,477
43,133,455
45,284,240
HarborOne Bancorp,
Inc.
Average Balances and Yield
Trend
(Unaudited)
Quarters Ended
March 31, 2024
December 31, 2023
March 31, 2023
Average
Average
Average
Outstanding
Yield/
Outstanding
Yield/
Outstanding
Yield/
Balance
Interest
Cost (8)
Balance
Interest
Cost (8)
Balance
Interest
Cost (8)
(dollars in thousands)
Interest-earning assets:
Investment securities (1)
$
372,787
$
2,065
2.23
%
$
370,683
$
2,001
2.14
%
$
387,303
$
2,079
2.18
%
Other interest-earning assets
356,470
4,659
5.26
205,929
2,516
4.85
63,426
803
5.13
Loans held for sale
14,260
243
6.85
20,010
369
7.32
18,108
286
6.41
Loans
Commercial loans (2)(3)
3,040,835
41,653
5.51
3,005,840
41,263
5.45
2,901,464
36,837
5.15
Residential real estate loans (3)(4)
1,700,694
18,175
4.30
1,707,978
18,103
4.21
1,647,109
15,616
3.85
Consumer loans (3)
20,539
358
7.01
22,324
384
6.82
36,310
519
5.80
Total loans
4,762,068
60,186
5.08
4,736,142
59,750
5.01
4,584,883
52,972
4.69
Total interest-earning assets
5,505,585
67,153
4.91
5,332,764
64,636
4.81
5,053,720
56,140
4.51
Noninterest-earning assets
299,153
313,729
313,309
Total assets
$
5,804,738
$
5,646,493
$
5,367,029
Interest-bearing liabilities:
Savings accounts
$
1,186,201
5,523
1.87
$
1,307,774
6,875
2.09
$
1,459,392
5,445
1.51
NOW accounts
289,902
75
0.10
290,147
122
0.17
275,801
36
0.05
Money market accounts
994,353
9,313
3.77
963,223
9,288
3.83
824,694
5,238
2.58
Certificates of deposit
855,070
8,554
4.02
859,274
8,329
3.85
552,636
2,685
1.97
Brokered deposits
356,459
3,434
3.87
288,449
2,696
3.71
330,426
2,509
3.08
Total interest-bearing deposits
3,681,985
26,899
2.94
3,708,867
27,310
2.92
3,442,949
15,913
1.87
Borrowings
764,623
9,423
4.96
507,520
6,260
4.89
448,096
5,105
4.62
Subordinated debentures
—
—
-
22,614
1,122
19.68
34,298
523
6.18
Total borrowings
764,623
9,423
4.96
530,134
7,382
5.52
482,394
5,628
4.73
Total interest-bearing liabilities
4,446,608
36,322
3.29
4,239,001
34,692
3.25
3,925,343
21,541
2.23
Noninterest-bearing
liabilities:
Noninterest-bearing deposits
654,436
683,548
721,536
Other noninterest-bearing liabilities
119,289
137,239
101,820
Total liabilities
5,220,333
5,059,788
4,748,699
Total stockholders' equity
584,405
586,705
618,330
Total liabilities and stockholders'
equity
$
5,804,738
$
5,646,493
$
5,367,029
Tax equivalent net interest income
30,831
29,944
34,599
Tax equivalent interest rate spread
(5)
1.62
%
1.56
%
2.28
%
Less: tax equivalent adjustment
249
251
201
Net interest income as reported
$
30,582
$
29,693
$
34,398
Net interest-earning assets (6)
$
1,058,977
$
1,093,763
$
1,128,377
Net interest margin (7)
2.23
%
2.21
%
2.76
%
Tax equivalent effect
0.02
0.02
0.02
Net interest margin on a fully tax
equivalent basis
2.25
%
2.23
%
2.78
%
Ratio of interest-earning assets to
interest-bearing liabilities
123.82
%
125.80
%
128.75
%
Supplemental information:
Total deposits, including demand
deposits
$
4,336,421
$
26,899
$
4,392,415
$
27,310
$
4,164,485
$
15,913
Cost of total deposits
2.49
%
2.47
%
1.55
%
Total funding liabilities, including
demand deposits
$
5,101,044
$
36,322
$
4,922,549
$
34,692
$
4,646,879
$
21,541
Cost of total funding liabilities
2.86
%
2.80
%
1.88
%
(1) Includes securities available for sale
and securities held to maturity.
(2) Tax-exempt income on industrial
revenue bonds is included in commercial loans on a tax-equivalent
basis.
(3) Includes nonaccruing loan balances and
interest received on such loans.
(4) Includes the basis adjustments of
certain loans included in fair value hedging relationships.
(5) Net interest rate spread represents
the difference between the yield on average interest-earning assets
and the cost of average interest-bearing liabilities.
(6) Net interest-earning assets represents
total interest-earning assets less total interest-bearing
liabilities.
(7) Net interest margin represents net
interest income divided by average total interest-earning
assets.
(8) Annualized.
Average Balances - Trend -
Quarters Ended
March 31,
December 31,
September 30,
June 30,
March 31
2024
2023
2023
2023
2023
(in thousands)
Interest-earning assets:
Investment securities (1)
$
372,787
$
370,683
$
375,779
$
381,762
$
387,303
Other interest-earning assets
356,470
205,929
207,234
238,891
63,426
Loans held for sale
14,260
20,010
20,919
19,614
18,108
Loans
Commercial loans (2)(3)
3,040,835
3,005,840
2,980,817
2,938,292
2,901,464
Residential real estate loans (3)(4)
1,700,694
1,707,978
1,700,383
1,682,860
1,647,109
Consumer loans (3)
20,539
22,324
25,126
29,025
36,310
Total loans
4,762,068
4,736,142
4,706,326
4,650,177
4,584,883
Total interest-earning assets
5,505,585
5,332,764
5,310,258
5,290,444
5,053,720
Noninterest-earning assets
299,153
313,729
314,030
305,132
313,309
Total assets
$
5,804,738
$
5,646,493
$
5,624,288
$
5,595,576
$
5,367,029
Interest-bearing liabilities:
Savings accounts
$
1,186,201
$
1,307,774
$
1,360,728
$
1,421,622
$
1,459,392
NOW accounts
289,902
290,147
274,329
280,501
275,801
Money market accounts
994,353
963,223
910,694
802,373
824,694
Certificates of deposit
855,070
859,274
818,182
708,087
552,636
Brokered deposits
356,459
288,449
287,428
281,614
330,426
Total interest-bearing deposits
3,681,985
3,708,867
3,651,361
3,494,197
3,442,949
Borrowings
764,623
507,520
508,001
666,345
448,096
Subordinated debentures
—
22,614
34,364
34,331
34,298
Total borrowings
764,623
530,134
542,365
700,676
482,394
Total interest-bearing liabilities
4,446,608
4,239,001
4,193,726
4,194,873
3,925,343
Noninterest-bearing
liabilities:
Noninterest-bearing deposits
654,436
683,548
705,009
712,081
721,536
Other noninterest-bearing liabilities
119,289
137,239
126,742
88,363
101,820
Total liabilities
5,220,333
5,059,788
5,025,477
4,995,317
4,748,699
Total stockholders' equity
584,405
586,705
598,811
600,259
618,330
Total liabilities and stockholders'
equity
$
5,804,738
$
5,646,493
$
5,624,288
$
5,595,576
$
5,367,029
Annualized Yield Trend -
Quarters Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2024
2023
2023
2023
2023
Interest-earning assets:
Investment securities (1)
2.23
%
2.14
%
2.11
%
2.14
%
2.18
%
Other interest-earning assets
5.26
%
4.85
%
5.11
%
4.93
%
5.13
%
Loans held for sale
6.85
%
7.32
%
7.02
%
6.67
%
6.41
%
Commercial loans (2)(3)
5.51
%
5.45
%
5.38
%
5.30
%
5.15
%
Residential real estate loans (3)(4)
4.30
%
4.21
%
4.09
%
3.92
%
3.85
%
Consumer loans (3)
7.01
%
6.82
%
6.51
%
5.79
%
5.80
%
Total loans
5.08
%
5.01
%
4.92
%
4.81
%
4.69
%
Total interest-earning assets
4.91
%
4.81
%
4.74
%
4.63
%
4.51
%
Interest-bearing liabilities:
Savings accounts
1.87
%
2.09
%
1.98
%
1.74
%
1.51
%
NOW accounts
0.10
%
0.17
%
0.11
%
0.08
%
0.05
%
Money market accounts
3.77
%
3.83
%
3.64
%
3.13
%
2.58
%
Certificates of deposit
4.02
%
3.85
%
3.50
%
2.99
%
1.97
%
Brokered deposits
3.87
%
3.71
%
3.60
%
3.29
%
3.08
%
Total interest-bearing deposits
2.94
%
2.92
%
2.72
%
2.30
%
1.87
%
Borrowings
4.96
%
4.89
%
5.03
%
4.88
%
4.62
%
Subordinated debentures
-
%
19.68
%
7.00
%
6.12
%
6.18
%
Total borrowings
4.96
%
5.52
%
5.15
%
4.94
%
4.73
%
Total interest-bearing liabilities
3.29
%
3.25
%
3.04
%
2.74
%
2.23
%
(1) Includes securities available for sale
and securities held to maturity.
(2) Tax-exempt income on industrial
revenue bonds is included in commercial loans on a tax-equivalent
basis.
(3) Includes nonaccruing loan balances and
interest received on such loans.
(4) Includes the basis adjustments of
certain loans included in fair value hedging relationships.
HarborOne Bancorp,
Inc.
Selected Financial
Highlights
(Unaudited)
Quarters Ended
March 31,
December 31,
September 30,
June 30,
March 31,
Performance Ratios
(annualized):
2024
2023
2023
2023
2023
(dollars in thousands)
Net income (loss)
$
7,300
$
(7,111)
$
8,411
$
7,450
$
7,297
Less: Goodwill impairment charge
—
10,760
—
—
—
Net income, excluding goodwill impairment
charge(1)
$
7,300
$
3,649
$
8,411
$
7,450
$
7,297
Average Assets
$
5,804,738
$
5,646,493
$
5,624,288
$
5,595,576
$
5,367,029
Average Equity
$
584,405
$
586,705
$
598,811
$
600,258
$
618,330
Return on average assets (ROAA)
0.50
%
(0.50)
%
0.60
%
0.54
%
0.54
%
Return on average assets (ROAA), excluding
goodwill impairment charge(2)
0.50
%
0.26
%
0.60
%
0.54
%
0.54
%
Return on average equity (ROAE)
5.00
%
(4.85)
%
5.62
%
4.98
%
4.72
%
Return on average equity (ROAE), excluding
goodwill impairment charge(3)
5.00
%
2.49
%
5.62
%
4.98
%
4.72
%
Total noninterest expense
$
31,750
$
43,214
$
31,872
$
31,725
$
31,509
Less: Amortization of other intangible
assets
189
189
189
189
189
Total adjusted noninterest expense
31,561
43,025
31,683
31,536
31,320
Less: Goodwill impairment charge
—
10,760
—
—
—
Total adjusted noninterest expense,
excluding goodwill impairment(4)
$
31,561
$
32,265
$
31,683
$
31,536
$
31,320
Net interest and dividend income
$
30,582
$
29,693
$
31,080
$
32,100
$
34,398
Total noninterest income
10,741
8,904
11,598
12,662
8,690
Total revenue
$
41,323
$
38,597
$
42,678
$
44,762
$
43,088
Efficiency ratio (5)
76.38
%
111.47
%
74.24
%
70.45
%
72.69
%
Efficiency ratio, excluding goodwill
impairment charge(6)
76.38
%
83.59
%
74.24
%
70.45
%
72.69
%
(1) This non-GAAP measure represents net
income, excluding goodwill impairment charge
(2) This non-GAAP measure represents net
income, excluding goodwill impairment charge to average assets
(3) This non-GAAP measure represents net
income, excluding goodwill impairment charge to average equity
(4) This non-GAAP measure represents
adjusted noninterest expense, excluding goodwill impairment
charge
(5) This non-GAAP measure represents
adjusted noninterest expense divided by total revenue
(6) This non-GAAP measure represents
adjusted noninterest expense, excluding goodwill impairment divided
by total revenue
At or for the Quarters
Ended
March 31,
December 31,
September 30,
June 30,
March 31,
Asset Quality
2024
2023
2023
2023
2023
(dollars in thousands)
Total nonperforming assets
$
12,160
$
17,582
$
18,795
$
20,234
$
12,300
Nonperforming assets to total assets
0.21
%
0.31
%
0.33
%
0.36
%
0.22
%
Allowance for credit losses on loans to
total loans
1.01
%
1.01
%
1.02
%
1.02
%
1.02
%
Net charge-offs (recoveries)
$
125
$
1,311
$
(18)
$
2,671
$
(11)
Annualized net charge-offs
(recoveries)/average loans
0.01
%
0.11
%
—
%
0.23
%
—
%
Allowance for credit losses on loans to
nonperforming loans
396.27
%
273.92
%
257.21
%
236.62
%
383.50
%
HarborOne Bancorp,
Inc.
Selected Financial
Highlights
(Unaudited)
Quarters Ended
March 31,
December 31,
September 30,
June 30,
March 31,
Capital and Share Related
2024
2023
2023
2023
2023
(dollars in thousands, except share
data)
Common stock outstanding
45,055,006
45,401,224
45,915,364
46,575,478
47,063,087
Book value per share
$
12.82
$
12.86
$
12.73
$
12.79
$
12.74
Tangible common equity:
Total stockholders' equity
$
577,683
$
583,759
$
584,634
$
595,532
$
599,794
Less: Goodwill
59,042
59,042
69,802
69,802
69,802
Less: Other intangible assets (1)
1,326
1,515
1,704
1,893
2,082
Tangible common equity
$
517,315
$
523,202
$
513,128
$
523,837
$
527,910
Tangible book value per share (2)
$
11.48
$
11.52
$
11.18
$
11.25
$
11.22
Tangible assets:
Total assets
$
5,862,222
$
5,667,896
$
5,664,387
$
5,659,254
$
5,572,858
Less: Goodwill
59,042
59,042
69,802
69,802
69,802
Less: Other intangible assets
1,326
1,515
1,704
1,893
2,082
Tangible assets
$
5,801,854
$
5,607,339
$
5,592,881
$
5,587,559
$
5,500,974
Tangible common equity / tangible assets
(3)
8.92
%
9.33
%
9.17
%
9.38
%
9.60
%
(1) Other intangible assets are core
deposit intangibles.
(2) This non-GAAP ratio is total
stockholders' equity less goodwill and intangible assets divided by
common stock outstanding.
(3) This non-GAAP ratio is total
stockholders' equity less goodwill and intangible assets to total
assets less goodwill and intangible assets.
HarborOne Bancorp,
Inc.
Segments Key Financial
Data
(Unaudited)
Quarters Ended
Statements of Net Income for HarborOne
Bank Segment:
March 31, 2024
December 31,
2023
September 30,
2023
June 30, 2023
March 31, 2023
(Dollars in thousands)
Net interest and dividend income
$
30,485
$
30,637
$
31,468
$
32,490
$
34,562
Provision (benefit) for credit losses
(168
)
644
(113
)
3,283
1,866
Net interest and dividend income, after
provision for credit losses
30,653
29,993
31,581
29,207
32,696
Mortgage banking income:
Intersegment loss
(236
)
(159
)
(198
)
(358
)
(348
)
Changes in mortgage servicing rights fair
value
(32
)
(257
)
18
29
(136
)
Other
180
185
188
195
201
Total mortgage banking (loss) income
(88
)
(231
)
8
(134
)
(283
)
Other noninterest income:
Deposit account fees
4,983
5,178
5,132
5,013
4,733
Income on retirement plan annuities
145
147
146
128
119
Bank-owned life insurance income
746
1,207
531
511
500
Other income
517
1,405
694
962
590
Total noninterest income
6,303
7,706
6,511
6,480
5,659
Noninterest expenses:
Compensation and benefits
15,307
16,535
15,238
15,067
14,764
Occupancy and equipment
4,150
4,038
3,828
3,910
4,295
Data processing
2,470
2,462
2,527
2,355
2,305
Loan expense
71
153
128
96
87
Marketing
783
751
709
787
1,063
Professional fees
1,056
1,404
914
699
996
Deposit insurance
1,164
794
1,004
1,176
510
Other expenses
2,406
2,476
1,924
2,103
2,170
Total noninterest expenses
27,407
28,613
26,272
26,193
26,190
Less: Amortization of other intangible
assets
189
189
190
189
189
Total adjusted noninterest expense
27,218
28,424
26,082
26,004
26,001
Income before income taxes
9,549
9,086
11,820
9,494
12,165
Provision for income taxes
2,386
2,535
2,716
2,193
3,115
Net income
$
7,163
$
6,551
$
9,104
$
7,301
$
9,050
Efficiency ratio (1) - QTD
73.99
%
74.13
%
68.67
%
66.73
%
64.65
%
Efficiency ratio (1) - YTD
73.99
%
68.49
%
66.64
%
65.67
%
64.65
%
(1) This non-GAAP measure represents
adjusted noninterest expense divided by total revenue
HarborOne Bancorp,
Inc.
Segments Key Financial
Data
(Unaudited)
Quarters Ended
Statements of Net Income for HarborOne
Mortgage Segment:
March 31, 2024
December 31,
2023
September 30,
2023
June 30, 2023
March 31, 2023
(Dollars in thousands)
Net interest and dividend income
$
80
$
160
$
199
$
120
$
327
Mortgage banking income:
Gain on sale of mortgage loans
2,013
2,176
2,704
3,300
2,224
Intersegment gain
308
56
249
90
454
Changes in mortgage servicing rights fair
value
86
(3,296)
107
407
(1,556)
Other
2,097
2,116
2,082
2,117
2,015
Total mortgage banking income
4,504
1,052
5,142
5,914
3,137
Other noninterest income (loss)
10
2
(4)
—
—
Total noninterest income
4,514
1,054
5,138
5,914
3,137
Noninterest expenses:
Compensation and benefits
2,919
3,217
4,014
3,700
3,575
Occupancy and equipment
604
596
567
688
701
Data processing
9
13
21
48
41
Loan expense
304
(470)
258
321
226
Marketing
33
60
85
138
118
Professional fees
132
120
155
180
257
Goodwill impairment
—
10,760
—
—
—
Other expenses
310
371
390
418
404
Total noninterest expenses
4,311
14,667
5,490
5,493
5,322
Income (loss) before income taxes
283
(13,453)
(153)
541
(1,858)
Income tax (benefit) provision
60
(596)
(15)
232
(565)
Net income (loss)
$
223
$
(12,857)
$
(138)
$
309
$
(1,293)
Efficiency ratio (1) - QTD
93.84
%
1,208.15
%
102.87
%
91.03
%
153.64
%
Efficiency ratio, excluding goodwill
impairment (2) - QTD
93.84
%
321.83
%
102.87
%
91.03
%
153.64
%
Efficiency ratio (1) - YTD
93.84
%
192.98
%
109.91
%
113.87
%
153.64
%
Efficiency ratio, excluding goodwill
impairment (2) - YTD
93.84
%
125.94
%
109.91
%
113.87
%
153.64
%
(1) This non-GAAP measure represents
noninterest expense divided by total revenue
(2) This non-GAAP measure represents
noninterest expense, excluding goodwill impairment divided by total
revenue
Category: Earnings Release
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240424104114/en/
Joseph F. Casey, President and Chief Executive Officer (508)
895-1312 jcasey@harborone.com
HarborOne Bancorp (NASDAQ:HONE)
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