HarborOne Bancorp, Inc. (the “Company” or “HarborOne”) (NASDAQ:
HONE), the holding company for HarborOne Bank (the “Bank”),
announced net income of $3.9 million, or $0.10 per diluted share,
for the third quarter of 2024, compared to a net income of $7.3
million, or $0.18 per diluted share for the preceding quarter, and
net income of $8.4 million, or $0.20 per diluted share for the same
period last year. Net income for the nine months ended September
30, 2024 was $18.5 million, or $0.45 per diluted share, compared to
$23.2 million, or $0.53 per diluted share for the same period in
2023. The third quarter of 2024 includes a credit loss provision of
$5.9 million, primarily as a result of a suburban office commercial
real estate credit.
Selected Quarterly Financial Highlights:
- Loan growth of $40.3 million, or 3.3% annualized.
- Client deposit growth of $89.5 million, or 8.8%
annualized.
- Net interest margin improvement to 2.33% from 2.29% on a
linked-quarter basis.
- Share repurchases of 347,670 at an average cost of $12.23 per
share.
“I am pleased to see continued margin expansion coupled with an
almost $90 million increase in client deposits. Our balance sheet
is positioned for margin improvement from declining cost of funds
enabled by lower market interest rates,” said Joseph F. Casey,
President and CEO.
Net Interest Income Net interest and dividend income was
$31.9 million for the quarter ended September 30, 2024, compared to
$31.4 million for the quarter ended June 30, 2024, and $31.1
million for the quarter ended September 30, 2023. Net interest
margin was 2.33% for the quarter ended September 30, 2024, compared
to 2.29% for the quarter ended June 30, 2024, and 2.32% for the
quarter ended September 30, 2023.
On a linked-quarter basis, the increase in net interest income
and net interest margin primarily reflects the utilization of
excess cash to pay down higher-cost borrowings. Also impacting
margin, the yield on loans increased 7 basis points and the average
balance increased $54.9 million, while the cost of deposits,
excluding brokered, increased 13 basis points and the average
balance of deposits excluding brokered increased $82.0 million.
Average checking account balances increased $18.7 million and
average certificates of deposits increased $97.3 million on a
linked-quarter basis.
The $813,000 increase in net interest and dividend income from
the prior year quarter reflects an increase of $5.9 million, or
9.3%, in total interest and dividend income, partially offset by an
increase of $5.1 million, or 15.8%, in total interest expense. The
total cost of funding liabilities increased 32 basis points, while
the average balance increased $161.2 million, and the yield on
interest-earning assets increased 33 basis points, while the
average balance increased $139.8 million.
Noninterest Income Total noninterest income decreased
$1.4 million, or 11.3%, to $10.6 million for the quarter ended
September 30, 2024, from $11.9 million for the quarter ended June
30, 2024. HarborOne Mortgage, LLC (“HarborOne Mortgage”) realized a
$3.8 million gain on loan sales from mortgage closings of $209.5
million for the quarter ended September 30, 2024, compared to $3.1
million from mortgage loan closings of $173.0 million on a
linked-quarter basis. Mortgage loan closings for the quarter ended
September 30, 2023 were $157.6 million with a gain on loan sales of
$2.7 million. Despite a drop in mortgage rates, the rate-locked
pipeline was down $8.7 million on a linked-quarter basis as
for-sale inventory continues to constrain loan demand.
The mortgage servicing rights (“MSR”) valuation declined $2.6
million for the three months ended September 30, 2024, compared to
a decrease of $1.1 million in the MSR valuation for the three
months ended June 30, 2024, as key benchmark interest rates used in
the valuation model decreased from the prior quarter. The impact on
the MSR valuation of principal payments on the underlying mortgages
was $690,000 and $545,000 for the quarters ended September 30, 2024
and June 30, 2024, respectively. During the first quarter of 2024,
HarborOne Mortgage executed an economic hedge to partially mitigate
potential MSR valuation losses in a declining rate environment. For
the three months ended September 30, 2024 the hedging gain was
$845,000, compared to a $280,000 hedging loss for the three months
ended June 30, 2024.
The prior quarter noninterest income included a $1.8 million
gain on the sale-leaseback of a banking center in downtown Brockton
and a $1.0 million loss on the sale of $17.5 million of
available-for-sale securities, and no such items occurred in the
quarter ended September 30, 2024.
Total noninterest income decreased $1.0 million, or 8.9%,
compared to the quarter ended September 30, 2023, primarily due to
a $1.6 million, or 31.3%, decrease in mortgage banking income as
the $1.0 million improvement on the gain on sale of mortgage loans
was offset by the loss on the MSR valuation. The prior year quarter
reflected a $125,000 increase in the MSR valuation. The decrease in
mortgage banking income was partially offset by improved earnings
on the bank-owned life insurance and an increase in deposit account
fees.
Noninterest Expense Total noninterest expense decreased
$876,000 or 2.6%, to $32.3 million for the quarter ended September
30, 2024, from $33.1 million for the quarter ended June 30, 2024.
The primary driver was a $819,000 decrease in marketing expense. In
the prior quarter, marketing expense included a $675,000
contribution for the bargain purchase price on the sale-leaseback
noted above. Compensation and benefits expenses decreased $425,000
due to accrual adjustments for 2024 management incentives partially
offset by increased commission on mortgage originations.
Total noninterest expense increased $396,000, or 1.2%, compared
to the prior year quarter of $31.9 million. The primary driver was
a $414,000 increase in other expenses due to an increase in cloud
computing expenses and deposit expenses.
Provision for Income Taxes The effective tax rate for the
three and nine months ended September 30, 2024 was 8.53% and 21.3%.
The effective tax rate for the three months ended June 30, 2024 was
23.28%. The decrease on a linked quarter basis reflects a discrete
tax benefit as a result of the filing of amended tax returns to
properly reflect tax exempt interest.
Asset Quality and Allowance for Credit Losses Total
nonperforming assets were $28.4 million at September 30, 2024,
compared to $9.8 million at June 30, 2024 and $18.8 million at
September 30, 2023. Nonperforming assets as a percentage of total
assets were 0.49% at September 30, 2024, 0.17% at June 30, 2024,
and 0.33% at September 30, 2023. The third quarter 2024 increase is
primarily a result of a single, $17.2 million credit,
collateralized by suburban office space, that required a $4.7
million specific reserve allocation and is on nonaccrual
status.
The Company recorded a $5.9 million provision for credit losses
for the quarter ended September 30, 2024. The provision for loan
credit losses was $5.0 million, and the provision for unfunded
commitments was $855,000. The provision for loan credit losses was
primarily due to the specific reserve allocation noted above and
provisioning for commercial loan growth, partially offset by
improved qualitative factor adjustments for residential real estate
mortgages as consumer metrics considered in the model improved. For
the quarter ended June 30, 2024, a provision for credit losses of
$615,000 was recorded, a result of a provision for loan credit
losses of $1.1 million partially offset by a $534,000 negative
provision for unfunded commitments. The Company recorded a negative
provision for credit losses of $113,000 for the quarter ended
September 30, 2023. The ACL on loans was $54.0 million, or 1.11% of
total loans, at September 30, 2024, compared to $49.1 million, or
1.02% of total loans, at June 30, 2024 and $48.3 million, or 1.02%
of total loans, at September 30, 2023. The ACL on unfunded
commitments, included in other liabilities on the unaudited
Consolidated Balance Sheets, amounted to $3.7 million at September
30, 2024, compared to $2.9 million at June 30, 2024 and $4.2
million at September 30, 2023.
Net charge-offs totaled $182,000, or 0.02%, of average loans
outstanding on an annualized basis, for the quarter ended September
30, 2024, $195,000, or 0.02% of average loans outstanding on an
annualized basis, for the quarter ended June 30, 2024, and net
recoveries of $18,000 for the quarter ended September 30, 2023.
As of September 30, 2024 and June 30, 2024, classified
commercial loans amounted to $57.5 million and $1.7 million,
respectively. The increase in classified loans on a linked quarter
basis includes an increase of $48.0 million in commercial real
estate loans, primarily from three credits included in the office
sector that totaled to $37.0 million with a $5.2 million specific
reserve allocation. Management continues to perform comprehensive
reviews and works proactively with creditworthy borrowers facing
financial stress to implement prudent accommodations to improve the
Bank’s prospects of contractual repayment.
Balance Sheet Total assets decreased $11.1 million, or
0.2%, to $5.78 billion at September 30, 2024, from $5.79 billion at
June 30, 2024. The linked-quarter decrease primarily reflects a
decrease in cash and cash equivalents and other assets, partially
offset by loan growth.
Available-for-sale securities increased $7.7 million to $276.8
million at September 30, 2024 from $269.1 million at June 30, 2024.
The unrealized loss on securities available for sale decreased to
$52.2 million as of September 30, 2024, as compared to $65.3
million of unrealized losses as of June 30, 2024. Securities held
to maturity were $19.6 million at September 30, 2024.
Loans increased $40.3 million, or 0.8%, to $4.88 billion at
September 30, 2024, from $4.84 billion at June 30, 2024. The
linked-quarter increase was primarily due to increases in
commercial and industrial loans of $50.9 million, commercial
construction loans of $36.5 million, and $13.2 million of
residential mortgage loans, partially offset by a decrease of $59.7
million in commercial real estate loans.
Total deposits increased $77.9 million to $4.54 billion at
September 30, 2024 from $4.46 billion at June 30, 2024. Compared to
the prior quarter, non-certificate accounts increased $11.1 million
and term certificate accounts increased $78.4 million, as a
competitive rate environment continued to pressure deposit mix and
rates. Brokered deposits decreased $11.6 million. As of September
30, 2024, FDIC-insured deposits were approximately 74% of total
deposits, including Bank subsidiary deposits.
Borrowed funds decreased $80.0 million to $539.4 million at
September 30, 2024 from $619.4 million at June 30, 2024, as excess
liquidity was used to paydown high rate borrowings. As of September
30, 2024, the Bank had $1.27 billion in available borrowing
capacity across multiple relationships.
Total stockholders’ equity was $584.2 million at September 30,
2024, compared to $577.3 million at June 30, 2024. Stockholders’
equity increased 1.2% when compared to the prior quarter, as
unrealized losses on available-for-sale securities decreased and
net income was offset by share repurchases and dividends. The
Company continues to implement and execute share repurchase
programs, repurchasing 1,501,523 shares at an average price of
$10.76, including $0.10 per share of excise tax, during the nine
months ended September 30, 2024. The
tangible-common-equity-to-tangible-assets ratio(1) was 9.17% at
September 30, 2024, 9.03% at June 30, 2024, and 9.17% at September
30, 2023. At September 30, 2024, the Company and the Bank had
strong capital positions, exceeding all regulatory capital
requirements, and are considered well-capitalized.
(1) 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; 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 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, are utilized by regulators and market analysts to
evaluate a company’s financial condition and therefore, such
information is useful to investors. These disclosures should not be
viewed as a substitute for financial results determined in
accordance with GAAP, nor are they necessarily comparable to
non-GAAP performance measures which may be presented by other
companies. Because non-GAAP financial measures are not
standardized, it may not be possible to compare these financial
measures with other companies’ non-GAAP financial measures having
the same or similar names.
HarborOne Bancorp,
Inc.
Consolidated Balance Sheet
Trend
(Unaudited)
September 30,
June 30,
March 31,
December 31,
September 30,
(in thousands)
2024
2024
2024
2023
2023
Assets
Cash and due from banks
$
39,668
$
48,097
$
36,340
$
38,876
$
38,573
Short-term investments
184,611
186,965
357,101
188,474
208,211
Total cash and cash equivalents
224,279
235,062
393,441
227,350
246,784
Securities available for sale, at fair
value
276,817
269,078
291,008
290,151
271,078
Securities held to maturity, at amortized
cost
19,625
19,725
19,724
19,796
19,795
Federal Home Loan Bank stock, at cost
17,476
25,311
26,565
27,098
23,378
Asset held for sale
—
—
348
348
966
Loans held for sale, at fair value
28,467
41,814
16,434
19,686
17,796
Loans:
Commercial real estate
2,321,148
2,380,881
2,355,672
2,343,675
2,349,886
Commercial construction
270,389
233,926
234,811
208,443
191,224
Commercial and industrial
549,908
499,043
471,215
466,443
450,547
Total commercial loans
3,141,445
3,113,850
3,061,698
3,018,561
2,991,657
Residential real estate
1,719,882
1,706,678
1,695,686
1,709,714
1,706,950
Consumer
18,176
18,704
19,301
22,036
24,247
Loans
4,879,503
4,839,232
4,776,685
4,750,311
4,722,854
Less: Allowance for credit losses on
loans
(54,004)
(49,139)
(48,185)
(47,972)
(48,312)
Net loans
4,825,499
4,790,093
4,728,500
4,702,339
4,674,542
Mortgage servicing rights, at fair
value
43,067
46,209
46,597
46,111
49,201
Goodwill
59,042
59,042
59,042
59,042
69,802
Other intangible assets
947
1,136
1,326
1,515
1,704
Other assets
280,748
299,565
279,237
274,460
289,341
Total assets
$
5,775,967
$
5,787,035
$
5,862,222
$
5,667,896
$
5,664,387
Liabilities and Stockholders'
Equity
Deposits:
Demand deposit accounts
$
713,379
$
689,800
$
677,152
$
659,973
$
708,847
NOW accounts
296,322
308,016
305,071
305,825
289,141
Regular savings and club accounts
926,192
989,720
1,110,404
1,265,315
1,324,635
Money market deposit accounts
1,162,930
1,100,215
1,061,145
966,201
951,128
Term certificate accounts
1,063,672
985,293
852,326
863,457
859,266
Brokered deposits
373,682
385,253
387,926
326,638
276,941
Total deposits
4,536,177
4,458,297
4,394,024
4,387,409
4,409,958
Borrowings
539,364
619,372
754,380
568,462
475,470
Subordinated debt
—
—
—
—
34,380
Other liabilities and accrued expenses
116,224
132,037
136,135
128,266
159,945
Total liabilities
5,191,765
5,209,706
5,284,539
5,084,137
5,079,753
Common stock
598
598
598
598
597
Additional paid-in capital
488,983
487,980
487,277
486,502
485,144
Unearned compensation - ESOP
(24,407)
(24,866)
(25,326)
(25,785)
(26,245)
Retained earnings
368,222
367,584
363,591
359,656
369,930
Treasury stock
(210,197)
(205,944)
(199,853)
(193,590)
(187,803)
Accumulated other comprehensive loss
(38,997)
(48,023)
(48,604)
(43,622)
(56,989)
Total stockholders' equity
584,202
577,329
577,683
583,759
584,634
Total liabilities and stockholders'
equity
$
5,775,967
$
5,787,035
$
5,862,222
$
5,667,896
$
5,664,387
HarborOne Bancorp,
Inc.
Consolidated Statements of Net
Income - Trend
(Unaudited)
Quarters Ended
September 30,
June 30,
March 31,
December 31,
September 30,
(in thousands, except share data)
2024
2024
2024
2023
2023
Interest and dividend income:
Interest and fees on loans
$
63,595
$
61,512
$
59,937
$
59,499
$
58,124
Interest on loans held for sale
546
347
243
369
370
Interest on securities
1,965
2,121
2,065
2,001
2,003
Other interest and dividend income
2,928
3,971
4,659
2,516
2,667
Total interest and dividend income
69,034
67,951
66,904
64,385
63,164
Interest expense:
Interest on deposits
29,969
27,272
26,899
27,310
25,039
Interest on borrowings
7,172
9,329
9,423
6,260
6,439
Interest on subordinated debentures
—
—
—
1,122
606
Total interest expense
37,141
36,601
36,322
34,692
32,084
Net interest and dividend income
31,893
31,350
30,582
29,693
31,080
Provision (benefit) for credit losses
5,903
615
(168)
644
(113)
Net interest and dividend income, after
provision for credit losses
25,990
30,735
30,750
29,049
31,193
Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans
3,752
3,143
2,013
2,176
2,704
Changes in mortgage servicing rights fair
value
(2,641)
(1,098)
54
(3,553)
125
Other
2,390
2,356
2,276
2,301
2,270
Total mortgage banking income
3,501
4,401
4,343
924
5,099
Deposit account fees
5,370
5,223
4,983
5,178
5,133
Income on retirement plan annuities
122
141
145
147
146
Gain on sale of asset held for sale
—
1,809
—
—
—
Loss on sale of securities
—
(1,041)
—
—
—
Bank-owned life insurance income
777
758
746
1,207
531
Other income
798
628
524
1,448
689
Total noninterest income
10,568
11,919
10,741
8,904
11,598
Noninterest expenses:
Compensation and benefits
18,551
18,976
17,636
19,199
18,699
Occupancy and equipment
4,628
4,636
4,781
4,670
4,430
Data processing
2,711
2,375
2,479
2,474
2,548
Loan expense (income)
457
461
371
(317)
385
Marketing
549
1,368
816
811
794
Professional fees
1,292
1,236
1,457
1,690
1,374
Deposit insurance
1,028
993
1,164
795
1,004
Goodwill impairment
—
—
—
10,760
—
Other expenses
3,052
3,099
3,046
3,132
2,638
Total noninterest expenses
32,268
33,144
31,750
43,214
31,872
Income (loss) before income taxes
4,290
9,510
9,741
(5,261)
10,919
Income tax provision
366
2,214
2,441
1,850
2,507
Net income (loss)
$
3,924
$
7,296
$
7,300
$
(7,111)
$
8,412
Earnings (losses) per common share:
Basic
$
0.10
$
0.18
$
0.17
$
(0.17)
$
0.20
Diluted
$
0.10
$
0.18
$
0.17
$
(0.17)
$
0.20
Weighted average shares outstanding:
Basic
40,984,857
41,293,787
41,912,421
42,111,872
42,876,893
Diluted
41,336,985
41,370,289
42,127,037
42,299,858
42,983,477
HarborOne Bancorp,
Inc.
Consolidated Statements of Net
Income - Trend
(Unaudited)
For the Nine Months Ended
September 30,
(dollars in thousands, except share
data)
2024
2023
$ Change
% Change
Interest and dividend income:
Interest and fees on loans
$
185,044
$
166,399
$
18,645
11.2
%
Interest on loans held for sale
1,136
982
154
15.7
Interest on securities
6,151
6,117
34
0.6
Other interest and dividend income
11,558
6,405
5,153
80.5
Total interest and dividend income
203,889
179,903
23,986
13.3
Interest expense:
Interest on deposits
84,140
61,014
23,126
37.9
Interest on borrowings
25,924
19,658
6,266
31.9
Interest on subordinated debentures
—
1,653
(1,653)
(100.0)
Total interest expense
110,064
82,325
27,739
33.7
Net interest and dividend income
93,825
97,578
(3,753)
(3.8)
Provision for credit losses
6,350
5,036
1,314
26.1
Net interest and dividend income, after
provision for credit losses
87,475
92,542
(5,067)
(5.5)
Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans
8,908
8,228
680
8.3
Changes in mortgage servicing rights fair
value
(3,685)
(1,131)
(2,554)
(225.8)
Other
7,022
6,798
224
3.3
Total mortgage banking income
12,245
13,895
(1,650)
(11.9)
Deposit account fees
15,576
14,878
698
4.7
Income on retirement plan annuities
408
393
15
3.8
Gain on sale of asset held for sale
1,809
—
1,809
100.0
Loss on sale of securities
(1,041)
—
(1,041)
(100.0)
Bank-owned life insurance income
2,281
1,542
739
47.9
Other income
1,950
2,242
(292)
(13.0)
Total noninterest income
33,228
32,950
278
0.8
Noninterest expenses:
Compensation and benefits
55,163
54,718
445
0.8
Occupancy and equipment
14,045
14,103
(58)
(0.4)
Data processing
7,565
7,297
268
3.7
Loan expense
1,289
1,115
174
15.6
Marketing
2,733
2,900
(167)
(5.8)
Professional fees
3,985
3,989
(4)
(0.1)
Deposit insurance
3,185
2,690
495
18.4
Other expenses
9,197
8,294
903
10.9
Total noninterest expenses
97,162
95,106
2,056
2.2
Income before income taxes
23,541
30,386
(6,845)
(22.5)
Income tax provision
5,021
7,198
(2,177)
(30.2)
Net income
$
18,520
$
23,188
$
(4,668)
(20.1)
%
Earnings per common share:
Basic
$
0.45
$
0.53
Diluted
$
0.45
$
0.53
Weighted average shares outstanding:
Basic
41,395,517
43,591,954
Diluted
41,609,933
43,793,137
HarborOne Bancorp,
Inc.
Average Balances and Yield
Trend
(Unaudited)
Quarters Ended
September 30, 2024
June 30, 2024
September 30, 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)
$
351,897
$
1,965
2.22
%
$
374,730
$
2,121
2.28
%
$
375,779
$
2,003
2.11
%
Other interest-earning assets
207,096
2,928
5.62
306,361
3,971
5.21
207,234
2,667
5.11
Loans held for sale
30,897
546
7.03
20,775
347
6.72
20,919
370
7.02
Loans
Commercial loans (2)(3)
3,129,428
44,859
5.70
3,091,004
43,023
5.60
2,980,817
40,438
5.38
Residential real estate loans (3)(4)
1,712,295
18,837
4.38
1,695,059
18,393
4.36
1,700,383
17,525
4.09
Consumer loans (3)
18,445
351
7.57
19,221
352
7.37
25,126
412
6.51
Total loans
4,860,168
64,047
5.24
4,805,284
61,768
5.17
4,706,326
58,375
4.92
Total interest-earning assets
5,450,058
69,486
5.07
5,507,150
68,207
4.98
5,310,258
63,415
4.74
Noninterest-earning assets
303,765
300,847
314,030
Total assets
$
5,753,823
$
5,807,997
$
5,624,288
Interest-bearing liabilities:
Savings accounts
$
963,570
3,807
1.57
$
1,058,524
4,305
1.64
$
1,360,728
6,787
1.98
NOW accounts
292,620
104
0.14
299,536
88
0.12
274,329
75
0.11
Money market accounts
1,130,148
10,953
3.86
1,069,153
10,186
3.83
910,694
8,355
3.64
Certificates of deposit
1,028,509
11,819
4.57
931,255
9,946
4.30
818,182
7,212
3.50
Brokered deposits
340,301
3,286
3.84
300,385
2,747
3.68
287,428
2,610
3.60
Total interest-bearing deposits
3,755,148
29,969
3.17
3,658,853
27,272
3.00
3,651,361
25,039
2.72
Borrowings
608,736
7,172
4.69
776,852
9,329
4.83
508,001
6,439
5.03
Subordinated debentures
—
—
-
—
—
-
34,364
606
7.00
Total borrowings
608,736
7,172
4.69
776,852
9,329
4.83
542,365
7,045
5.15
Total interest-bearing liabilities
4,363,884
37,141
3.39
4,435,705
36,601
3.32
4,193,726
32,084
3.04
Noninterest-bearing
liabilities:
Noninterest-bearing deposits
696,094
670,494
705,009
Other noninterest-bearing liabilities
109,796
126,477
126,742
Total liabilities
5,169,774
5,232,676
5,025,477
Total stockholders' equity
584,049
575,321
598,811
Total liabilities and stockholders'
equity
$
5,753,823
$
5,807,997
$
5,624,288
Tax equivalent net interest income
32,345
31,606
31,331
Tax equivalent interest rate spread
(5)
1.68
%
1.66
%
1.70
%
Less: tax equivalent adjustment
452
256
251
Net interest income as reported
$
31,893
$
31,350
$
31,080
Net interest-earning assets (6)
$
1,086,174
$
1,071,445
$
1,116,532
Net interest margin (7)
2.33
%
2.29
%
2.32
%
Tax equivalent effect
0.03
0.02
0.02
Net interest margin on a fully tax
equivalent basis
2.36
%
2.31
%
2.34
%
Ratio of interest-earning assets to
interest-bearing liabilities
124.89
%
124.16
%
126.62
%
Supplemental information:
Total deposits, including demand
deposits
$
4,451,242
$
29,969
$
4,329,347
$
27,272
$
4,356,370
$
25,039
Cost of total deposits
2.68
%
2.53
%
2.28
%
Total funding liabilities, including
demand deposits
$
5,059,978
$
37,141
$
5,106,199
$
36,601
$
4,898,735
$
32,084
Cost of total funding liabilities
2.92
%
2.88
%
2.60
%
(1) Includes securities available for sale
and securities held to maturity.
(2) Tax-exempt income on industrial
revenue bonds is included in commercial loans on a tax-equivalent
basis.
(3) Includes nonaccruing loan balances and
interest received on such loans.
(4) Includes the basis adjustments of
certain loans included in fair value hedging relationships.
(5) Net interest rate spread represents
the difference between the yield on average interest-earning assets
and the cost of average interest-bearing liabilities.
(6) Net interest-earning assets represents
total interest-earning assets less total interest-bearing
liabilities.
(7) Net interest margin represents net
interest income divided by average total interest-earning
assets.
(8) Annualized
HarborOne Bancorp,
Inc.
Average Balances and Yield
Trend
(Unaudited)
For the Nine Months
Ended
September 30, 2024
September 30, 2023
Average
Average
Outstanding
Yield/
Outstanding
Yield/
Balance
Interest
Cost (8)
Balance
Interest
Cost (8)
(dollars in thousands)
Interest-earning assets:
Investment securities (1)
$
366,418
$
6,151
2.24
%
$
381,572
$
6,117
2.14
%
Other interest-earning assets
289,673
11,558
5.33
170,377
6,405
5.03
Loans held for sale
22,010
1,136
6.89
19,557
982
6.71
Loans
Commercial loans (2)(3)
3,087,245
129,825
5.62
2,940,483
116,116
5.28
Residential real estate loans (3)(4)
1,702,718
55,405
4.35
1,676,979
49,598
3.95
Consumer loans (3)
19,397
1,062
7.31
30,112
1,350
5.99
Total loans
4,809,360
186,292
5.17
4,647,574
167,064
4.81
Total interest-earning assets
5,487,461
205,137
4.99
5,219,080
180,568
4.63
Noninterest-earning assets
301,264
310,826
Total assets
$
5,788,725
$
5,529,906
Interest-bearing liabilities:
Savings accounts
$
1,069,045
13,635
1.70
$
1,413,553
18,397
1.74
NOW accounts
294,014
267
0.12
276,872
170
0.08
Money market accounts
1,064,791
30,452
3.82
846,235
19,849
3.14
Certificates of deposit
938,608
30,320
4.31
693,941
15,170
2.92
Brokered deposits
332,410
9,466
3.80
299,665
7,428
3.31
Total interest-bearing deposits
3,698,868
84,140
3.04
3,530,266
61,014
2.31
FHLB and FRB borrowings
716,343
25,924
4.83
541,034
19,658
4.86
Subordinated debentures
—
—
—
34,331
1,653
6.44
Total borrowings
716,343
25,924
4.83
575,365
21,311
4.95
Total interest-bearing liabilities
4,415,211
110,064
3.33
4,105,631
82,325
2.68
Noninterest-bearing
liabilities:
Noninterest-bearing deposits
673,757
712,815
Other noninterest-bearing liabilities
118,488
105,732
Total liabilities
5,207,456
4,924,178
Total stockholders' equity
581,269
605,728
Total liabilities and stockholders'
equity
$
5,788,725
$
5,529,906
Tax equivalent net interest income
95,073
98,243
Tax equivalent interest rate spread
(5)
1.66
%
1.95
%
Less: tax equivalent adjustment
1,248
665
Net interest income as reported
$
93,825
$
97,578
Net interest-earning assets (6)
$
1,072,250
$
1,113,449
Net interest margin (7)
2.28
%
2.50
%
Tax equivalent effect
0.03
0.02
Net interest margin on a fully tax
equivalent basis
2.31
%
2.52
%
Ratio of interest-earning assets to
interest-bearing liabilities
124.29
%
127.12
%
Supplemental information:
Total deposits, including demand
deposits
$
4,372,625
$
84,140
$
4,243,081
$
61,014
Cost of total deposits
2.57
%
1.92
%
Total funding liabilities, including
demand deposits
$
5,088,968
$
110,064
$
4,818,446
$
82,325
Cost of total funding liabilities
2.89
%
2.28
%
(1) Includes securities available for sale
and securities held to maturity.
(2) Tax-exempt income on industrial
revenue bonds is included in commercial loans on a tax-equivalent
basis.
(3) Includes nonaccruing loan balances and
interest received on such loans.
(4) Includes the basis adjustments of
certain loans included in fair value hedging relationships.
(5) Net interest rate spread represents
the difference between the yield on average interest-earning assets
and the cost of average interest-bearing liabilities.
(6) Net interest-earning assets represents
total interest-earning assets less total interest-bearing
liabilities.
(7) Net interest margin represents net
interest income divided by average total interest-earning
assets.
(8) Annualized.
HarborOne Bancorp,
Inc.
Average Balances and Yield
Trend
(Unaudited)
Average Balances - Trend -
Quarters Ended
September 30,
June 30,
March 31,
December 31,
September 30,
2024
2024
2024
2023
2023
(in thousands)
Interest-earning assets:
Investment securities (1)
$
351,897
$
374,730
$
372,787
$
370,683
$
375,779
Other interest-earning assets
207,096
306,361
356,470
205,929
207,234
Loans held for sale
30,897
20,775
14,260
20,010
20,919
Loans
Commercial loans (2)(3)
3,129,428
3,091,004
3,040,835
3,005,840
2,980,817
Residential real estate loans (3)(4)
1,712,295
1,695,059
1,700,694
1,707,978
1,700,383
Consumer loans (3)
18,445
19,221
20,539
22,324
25,126
Total loans
4,860,168
4,805,284
4,762,068
4,736,142
4,706,326
Total interest-earning assets
5,450,058
5,507,150
5,505,585
5,332,764
5,310,258
Noninterest-earning assets
303,765
300,847
299,153
313,729
314,030
Total assets
$
5,753,823
$
5,807,997
$
5,804,738
$
5,646,493
$
5,624,288
Interest-bearing liabilities:
Savings accounts
$
963,570
$
1,058,524
$
1,186,201
$
1,307,774
$
1,360,728
NOW accounts
292,620
299,536
289,902
290,147
274,329
Money market accounts
1,130,148
1,069,153
994,353
963,223
910,694
Certificates of deposit
1,028,509
931,255
855,070
859,274
818,182
Brokered deposits
340,301
300,385
356,459
288,449
287,428
Total interest-bearing deposits
3,755,148
3,658,853
3,681,985
3,708,867
3,651,361
Borrowings
608,736
776,852
764,623
507,520
508,001
Subordinated debentures
—
—
—
22,614
34,364
Total borrowings
608,736
776,852
764,623
530,134
542,365
Total interest-bearing liabilities
4,363,884
4,435,705
4,446,608
4,239,001
4,193,726
Noninterest-bearing
liabilities:
Noninterest-bearing deposits
696,094
670,494
654,436
683,548
705,009
Other noninterest-bearing liabilities
109,796
126,477
119,289
137,239
126,742
Total liabilities
5,169,774
5,232,676
5,220,333
5,059,788
5,025,477
Total stockholders' equity
584,049
575,321
584,405
586,705
598,811
Total liabilities and stockholders'
equity
$
5,753,823
$
5,807,997
$
5,804,738
$
5,646,493
$
5,624,288
Annualized Yield Trend -
Quarters Ended
September 30,
June 30,
March 31,
December 31,
September 30,
2024
2024
2024
2023
2023
Interest-earning assets:
Investment securities (1)
2.22
%
2.28
%
2.23
%
2.14
%
2.11
%
Other interest-earning assets
5.62
%
5.21
%
5.26
%
4.85
%
5.11
%
Loans held for sale
7.03
%
6.72
%
6.85
%
7.32
%
7.02
%
Commercial loans (2)(3)
5.70
%
5.60
%
5.51
%
5.45
%
5.38
%
Residential real estate loans (3)(4)
4.38
%
4.36
%
4.30
%
4.21
%
4.09
%
Consumer loans (3)
7.57
%
7.37
%
7.01
%
6.82
%
6.51
%
Total loans
5.24
%
5.17
%
5.08
%
5.01
%
4.92
%
Total interest-earning assets
5.07
%
4.98
%
4.91
%
4.81
%
4.74
%
Interest-bearing liabilities:
Savings accounts
1.57
%
1.64
%
1.87
%
2.09
%
1.98
%
NOW accounts
0.14
%
0.12
%
0.10
%
0.17
%
0.11
%
Money market accounts
3.86
%
3.83
%
3.77
%
3.83
%
3.64
%
Certificates of deposit
4.57
%
4.30
%
4.02
%
3.85
%
3.50
%
Brokered deposits
3.84
%
3.68
%
3.87
%
3.71
%
3.60
%
Total interest-bearing deposits
3.17
%
3.00
%
2.94
%
2.92
%
2.72
%
Borrowings
4.69
%
4.83
%
4.96
%
4.89
%
5.03
%
Subordinated debentures
-
%
-
%
-
%
19.68
%
7.00
%
Total borrowings
4.69
%
4.83
%
4.96
%
5.52
%
5.15
%
Total interest-bearing liabilities
3.39
%
3.32
%
3.29
%
3.25
%
3.04
%
(1) Includes securities available for sale
and securities held to maturity.
(2) Tax-exempt income on industrial
revenue bonds is included in commercial loans on a tax-equivalent
basis.
(3) Includes nonaccruing loan balances and
interest received on such loans.
(4) Includes the basis adjustments of
certain loans included in fair value hedging relationships.
HarborOne Bancorp,
Inc.
Selected Financial
Highlights
(Unaudited)
Quarters Ended
September 30,
June 30,
March 31,
December 31,
September 30,
Performance Ratios
(annualized):
2024
2024
2024
2023
2023
(dollars in thousands)
Net income (loss)
$
3,924
$
7,296
$
7,300
$
(7,111)
$
8,412
Less: Goodwill impairment charge
—
—
—
10,760
—
Net income, excluding goodwill impairment
charge(1)
$
3,924
$
7,296
$
7,300
$
3,649
$
8,412
Average Assets
$
5,753,823
$
5,807,997
$
5,804,738
$
5,646,493
$
5,624,288
Average Equity
$
584,049
$
575,321
$
584,405
$
586,705
$
598,811
Return on average assets (ROAA)
0.27
%
0.50
%
0.50
%
(0.50)
%
0.60
%
Return on average assets (ROAA), excluding
goodwill impairment charge(2)
0.27
%
0.50
%
0.50
%
0.26
%
0.60
%
Return on average equity (ROAE)
2.69
%
5.07
%
5.00
%
(4.85)
%
5.62
%
Return on average equity (ROAE), excluding
goodwill impairment charge(3)
2.69
%
5.07
%
5.00
%
2.49
%
5.62
%
Total noninterest expense
$
32,268
$
33,144
$
31,750
$
43,214
$
31,872
Less: Amortization of other intangible
assets
190
189
189
189
189
Total adjusted noninterest expense
32,078
32,955
31,561
43,025
31,683
Less: Goodwill impairment charge
—
—
—
10,760
—
Total adjusted noninterest expense,
excluding goodwill impairment(4)
$
32,078
$
32,955
$
31,561
$
32,265
$
31,683
Net interest and dividend income
$
31,893
$
31,350
$
30,582
$
29,693
$
31,080
Total noninterest income
10,568
11,919
10,741
8,904
11,598
Total revenue
$
42,461
$
43,269
$
41,323
$
38,597
$
42,678
Efficiency ratio (5)
75.55
%
76.16
%
76.38
%
111.47
%
74.24
%
Efficiency ratio, excluding goodwill
impairment charge(6)
75.55
%
76.16
%
76.38
%
83.59
%
74.24
%
(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
September 30,
June 30,
March 31,
December 31,
September 30,
Asset Quality
2024
2024
2024
2023
2023
(dollars in thousands)
Total nonperforming assets
$
28,408
$
9,766
$
12,201
$
17,582
$
18,795
Nonperforming assets to total assets
0.49
%
0.17
%
0.21
%
0.31
%
0.33
%
Allowance for credit losses on loans to
total loans
1.11
%
1.02
%
1.01
%
1.01
%
1.02
%
Net charge-offs (recoveries)
$
182
$
195
$
125
$
1,311
$
(18)
Annualized net charge-offs
(recoveries)/average loans
0.02
%
0.02
%
0.01
%
0.11
%
—
%
Allowance for credit losses on loans to
nonperforming loans
190.10
%
503.16
%
396.26
%
273.92
%
257.21
%
HarborOne Bancorp,
Inc.
Selected Financial
Highlights
(Unaudited)
Quarters Ended
September 30,
June 30,
March 31,
December 31,
September 30,
Capital and Share Related
2024
2024
2024
2023
2023
(dollars in thousands, except share
data)
Common stock outstanding
44,130,134
44,459,490
45,055,006
45,401,224
45,915,364
Book value per share
$
13.24
$
12.99
$
12.82
$
12.86
$
12.73
Tangible common equity:
Total stockholders' equity
$
584,202
$
577,329
$
577,683
$
583,759
$
584,634
Less: Goodwill
59,042
59,042
59,042
59,042
69,802
Less: Other intangible assets (1)
947
1,136
1,326
1,515
1,704
Tangible common equity
$
524,213
$
517,151
$
517,315
$
523,202
$
513,128
Tangible book value per share (2)
$
11.88
$
11.63
$
11.48
$
11.52
$
11.18
Tangible assets:
Total assets
$
5,775,967
$
5,787,035
$
5,862,222
$
5,667,896
$
5,664,387
Less: Goodwill
59,042
59,042
59,042
59,042
69,802
Less: Other intangible assets
947
1,136
1,326
1,515
1,704
Tangible assets
$
5,715,978
$
5,726,857
$
5,801,854
$
5,607,339
$
5,592,881
Tangible common equity / tangible assets
(3)
9.17
%
9.03
%
8.92
%
9.33
%
9.17
%
(1) Other intangible assets are core
deposit intangibles.
(2) This non-GAAP ratio is total
stockholders' equity less goodwill and intangible assets divided by
common stock outstanding.
(3) This non-GAAP ratio is total
stockholders' equity less goodwill and intangible assets to total
assets less goodwill and intangible assets.
HarborOne Bancorp,
Inc.
Segments Key Financial
Data
(Unaudited)
Quarters Ended
September 30,
June 30,
March 31,
December 31,
September 30,
Statements of Net Income for HarborOne
Bank Segment:
2024
2024
2024
2023
2023
(Dollars in thousands)
Net interest and dividend income
$
31,780
$
31,098
$
30,485
$
30,637
$
31,468
Provision (benefit) for credit losses
5,903
615
(168)
644
(113)
Net interest and dividend income, after
provision for credit losses
25,877
30,483
30,653
29,993
31,581
Mortgage banking income:
Intersegment loss
(357)
(464)
(236)
(159)
(198)
Changes in mortgage servicing rights fair
value
(220)
(74)
(32)
(257)
18
Other
175
180
180
185
188
Total mortgage banking (loss) income
(402)
(358)
(88)
(231)
8
Other noninterest income:
Deposit account fees
5,370
5,223
4,983
5,178
5,132
Income on retirement plan annuities
122
141
145
147
146
Gain on sale of asset held for sale
—
1,809
—
—
—
Loss on sale of securities
—
(1,041)
—
—
—
Bank-owned life insurance income
777
758
746
1,207
531
Other income
798
624
517
1,405
694
Total noninterest income
6,665
7,156
6,303
7,706
6,511
Noninterest expenses:
Compensation and benefits
14,939
15,627
15,307
16,535
15,238
Occupancy and equipment
4,029
4,052
4,150
4,038
3,828
Data processing
2,686
2,363
2,470
2,462
2,527
Loan expense
143
187
71
153
128
Marketing
524
1,331
783
751
709
Professional fees
942
771
1,056
1,404
914
Deposit insurance
1,028
992
1,164
794
1,004
Other expenses
2,461
2,468
2,406
2,476
1,924
Total noninterest expenses
26,752
27,791
27,407
28,613
26,272
Less: Amortization of other intangible
assets
190
189
189
189
190
Total adjusted noninterest expense
26,562
27,602
27,218
28,424
26,082
Income before income taxes
5,790
9,848
9,549
9,086
11,820
Provision for income taxes
875
2,310
2,386
2,535
2,716
Net income
$
4,915
$
7,538
$
7,163
$
6,551
$
9,104
Efficiency ratio (1) - QTD
69.09
%
72.15
%
73.99
%
74.13
%
68.67
%
Efficiency ratio (1) - YTD
71.71
%
73.05
%
73.99
%
68.49
%
65.67
%
(1) This non-GAAP measure represents
adjusted noninterest expense divided by total revenue
HarborOne Bancorp,
Inc.
Segments Key Financial
Data
(Unaudited)
Quarters Ended
September 30,
June 30,
March 31,
December 31,
September 30,
Statements of Net Income for HarborOne
Mortgage Segment:
2024
2024
2024
2023
2023
(Dollars in thousands)
Net interest and dividend income
$
105
$
240
$
80
$
160
$
199
Mortgage banking income:
Gain on sale of mortgage loans
3,752
3,141
2,013
2,176
2,704
Intersegment gain
277
464
308
56
249
Changes in mortgage servicing rights fair
value
(2,421)
(1,024)
86
(3,296)
107
Other
2,215
2,177
2,097
2,116
2,082
Total mortgage banking income
3,823
4,758
4,504
1,052
5,142
Other noninterest income (loss)
—
4
10
2
(4)
Total noninterest income
3,823
4,762
4,514
1,054
5,138
Noninterest expenses:
Compensation and benefits
4,215
3,944
2,919
3,217
4,014
Occupancy and equipment
562
547
604
596
567
Data processing
25
11
9
13
21
Loan expense
314
274
304
(470)
258
Marketing
25
36
33
60
85
Professional fees
162
131
132
120
155
Goodwill impairment
—
—
—
10,760
—
Other expenses
297
326
310
371
390
Total noninterest expenses
5,600
5,269
4,311
14,667
5,490
Income (loss) before income taxes
(1,672)
(267)
283
(13,453)
(153)
Income tax (benefit) provision
(535)
(76)
60
(596)
(15)
Net income (loss)
$
(1,137)
$
(191)
$
223
$
(12,857)
$
(138)
Closed loan volume
$
209,525
$
172,994
$
102,102
$
124,225
$
157,573
Gain on sale margin
1.79
%
1.82
%
1.97
%
1.75
%
1.72
%
Efficiency ratio (1) - QTD
142.57
%
105.34
%
93.84
%
1,208.15
%
102.87
%
Efficiency ratio, excluding goodwill
impairment (2) - QTD
142.57
%
105.34
%
93.84
%
321.83
%
102.87
%
Efficiency ratio (1) - YTD
112.24
%
99.83
%
93.84
%
192.98
%
109.91
%
Efficiency ratio, excluding goodwill
impairment (2) - YTD
112.24
%
99.83
%
93.84
%
125.94
%
109.91
%
(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/20241023227939/en/
Stephen W. Finocchio, Executive Vice President and Chief
Financial Officer (508)-895-1180 sfinocchio@harborone.com
HarborOne Bancorp (NASDAQ:HONE)
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