Press Release

HarborOne Bancorp, Inc. Announces 2017 Second Quarter Earnings

Company Release - 7/21/2017 9:02 AM ET

BROCKTON, Mass.--(BUSINESS WIRE)-- HarborOne Bancorp, Inc. (the “Company”) (NASDAQ: HONE), the holding company for HarborOne Bank (the “Bank”), announced second quarter 2017 net income of $3.2 million or $0.10 per share as compared to $2.7 million, or $0.09 per share in the prior quarter and net loss of $681,000 in the same quarter last year.

The Company reported net income of $5.9 million or $0.19 per share for the six months ended June 30, 2017 compared to a net loss of $557,000 for the same period in 2016.

The Company’s results for the quarter ended June 30, 2016 included a one-time contribution of $4.8 million to The HarborOne Foundation (the “Foundation”). Excluding this non-recurring expense, net income would have been $2.2 million for the second quarter of 2016 and $2.3 million for the first six months of 2016.

James W. Blake, President and CEO stated, “We are pleased with the Company’s overall performance again this quarter. We had solid net income growth of 17% from the previous quarter driven by commercial loan growth, a rebound in mortgage banking activity and continued improvement in asset quality.”

Net Interest Income
The Company’s net interest and dividend income was $18.2 million for the quarter ended June 30, 2017, up $783,000, or 4.5%, from $17.4 million for the quarter ended March 31, 2017 and up $3.6 million, or 24.3%, from $14.7 million for the quarter ended June 30, 2016. The interest rate spread and net interest margin on a tax-equivalent basis were 2.87% and 3.03%, respectively, for the quarter ended June 30, 2017 compared to 2.83% and 2.99%, respectively, for the quarter ended March 31, 2017 and 2.68% and 2.81%, respectively, for the quarter ended June 30, 2016.

The increase in net interest income from the previous quarter reflects a $763,000, or 3.6%, increase in total interest and dividend income and a decrease of $20,000, or 0.5% in total interest expense. The increase in interest and dividend income is primarily due to the commercial loan growth that provided an increase in average outstanding loans of $17.5 million combined with a 4 basis point increase in yield on loans. Interest expense was essentially flat as average interest-bearing deposits increased $68.1 million with no change in the cost of those funds and average FHLB advances decreased $37.1 million coupled with a 1 basis point decrease in total cost of borrowed funds.

The increase in net interest income over the prior year quarter is primarily due to growth in the Company’s average loan balances to $2.13 billion from $1.88 billion and an increase in the yield on loans to 3.82% from 3.61%, again primarily driven by commercial loan growth as well as higher rates on variable rate loans. Total interest and dividend income increased $3.8 million, or 21.0%, and total interest expense increased $243,000, or 7.0%.

Noninterest Income
Noninterest income increased to $14.3 million for the quarter ended June 30, 2017, up $2.9 million, or 24.8%, from the quarter ended March 31, 2017. This increase is primarily due to a 54.4% increase in mortgage loan originations at Merrimack Mortgage Company, LLC (“Merrimack”) as a result of seasonal fluctuations resulting in a $2.7 million, or 37.1% increase in mortgage banking income. Mortgage banking income was also impacted by servicing rights fair value adjustments amounting to a $1.1 million decrease in the second quarter of 2017 compared to a $442,000 decrease in the first quarter of 2017 and a $2.2 million decrease in the second quarter of 2016. Servicing rights fair value adjustments largely reflect fluctuations in the 10-year Constant Maturity Treasury rate and residential real estate mortgage loan rates. Noninterest income decreased $1.6 million, or 10.0% primarily driven by a decrease of $1.5 million, or 13.1%, in mortgage banking income as compared to the quarter ended June 30, 2016. Compared to the same quarter prior year, Merrimack’s mortgage originations decreased 19.1% in 2017 primarily as a result of higher residential mortgage interest rates and reduced refinance volume in 2017.

Noninterest Expense
Noninterest expenses were $26.9 million for the quarter ended June 30, 2017, an increase of $2.5 million, or 10.1%, from the quarter ended March 31, 2017. The increase was primarily due to the increase in mortgage loan originations which contributed to an increase of $1.4 million, or 9.3%, in compensation and benefits and an increase of $519,000, or 38.1%, in loan expense primarily from an increase in loan closing expense on loans held for sale. Noninterest expense decreased $4.3 million, or 13.8%, from the quarter ended June 30, 2016 primarily due to the $4.8 million charitable contribution made in 2016.

Asset Quality
The Company recorded a $470,000 provision for loan losses for the quarter ended June 30, 2017, $265,000 for the quarter ended March 31, 2017 and $801,000 for the quarter ended June 30, 2016. The provisions in the second quarter of 2017 and 2016 were primarily due to commercial loan growth. In the first quarter of 2017, the Company adjusted general reserve allocations for commercial real estate and commercial loans based on updated peer data. The updated peer data resulted in lower general reserve rates and reserves on these loan types; however, the decrease was partially offset by commercial loan growth. Changes in the provision for loan losses are also based on management’s assessment of loan portfolio growth and composition changes, historical charge-off trends, and ongoing evaluation of credit quality and current economic conditions. The allowance for loan losses was $17.2 million, or 0.82%, of total loans at June 30, 2017, compared to $16.9 million, or 0.82%, of total loans, at March 31, 2017 and $14.4 million, or 0.79%, of total loans, at June 30, 2016. Net charge-offs totaled $173,000 for the quarter ended June 30, 2017, or 0.03%, of average loans outstanding on an annualized basis, compared to $349,000 and 0.07% for the quarter ended March 31, 2017 and $58,000 and 0.01% for the quarter ended June 30, 2016.

Nonperforming assets were $22.5 million at June 30, 2017 compared to $23.5 million at March 31, 2017 and $27.8 million at June 30, 2016. Nonperforming assets as a percentage of total assets were 0.86% at June 30, 2017, 0.91% at March 31, 2017 and 1.23% at June 30, 2016. The steady decline reflects the Company’s continued efforts to minimize nonperforming assets through diligent collection efforts, prudent workout arrangements and strong underwriting.

Balance Sheet
Total assets increased $65.9 million, or 2.6%, to $2.63 billion at June 30, 2017 from $2.57 billion at March 31, 2017. Net loans increased $32.2 million, or 1.6%, to $2.08 billion at June 30, 2017 from $2.05 billion at March 31, 2017. The net increase in loans for the three months ended June 30, 2017 was primarily due to increases of $35.2 million in commercial real estate loans, $5.8 million in residential real estate loans and $2.4 million in commercial and industrial loans, partially offset by a decrease of $2.2 million in construction loans and $8.2 million in consumer loans. Loans held for sale increased $39.9 million, or 76.9%, to $91.9 million at June 30, 2017 from $51.9 million at March 31, 2017 due to the seasonal increase in residential mortgage originations.

Total deposits increased $69.1 million, or 3.6%, to $1.99 billion at June 30, 2017 from $1.93 billion at March 31, 2017. Compared to the prior quarter non-certificate accounts increased $59.3 million, brokered deposits increased $15.0 million and term certificate accounts decreased $5.3 million. The increase in non-certificate accounts was primarily due to HarborOne Bancorp Inc.’s participation in the Bank’s reciprocal deposit program that was established in June with respect to the Company’s $64.8 million deposit at the Bank, which effectively converts the Company’s deposit at the Bank to multiple deposits at other financial institutions which are not eliminated in consolidation. The reciprocal deposit program provides access to FDIC insured deposit products in aggregate amounts exceeding current insurance limits for depositors. Borrowings were $265.1 million at June 30, 2017 and $275.1 million at March 31, 2017.

Total stockholders’ equity was $336.6 million at June 30, 2017 compared to $332.7 million at March 31, 2017 and $324.3 million at June 30, 2016. The tangible common equity to tangible assets ratio was 12.34% at June 30, 2017, 12.50% at March 31, 2017 and 13.79% at June 30, 2016. At June 30, 2017, the Company and the Bank exceed all regulatory capital requirements.

About HarborOne Bancorp, Inc.
HarborOne Bancorp, Inc. is the holding company for HarborOne Bank, the largest co-operative bank in New England. HarborOne Bank serves the financial needs of consumers, businesses, and municipalities throughout Southeastern Massachusetts through a network of 14 full-service branches, two limited service branches, a commercial loan office in Providence, Rhode Island, a residential lending office in Westford, Massachusetts, and 13 free-standing ATMs. 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. Merrimack Mortgage Company, LLC, a subsidiary of HarborOne Bank, is a full-service mortgage lender with 33 offices in Massachusetts, New Hampshire and Maine, and also does business 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. 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, adverse conditions in the capital and debt markets and the impact of such conditions on the Company’s business activities; changes in interest rates; competitive pressures from other financial institutions; the effects of general economic conditions on a national basis or 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 the value of securities in the Company’s investment portfolio; changes in loan default and charge-off rates; fluctuations in real estate values; the adequacy of loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and investments; changes in government 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 Securities and Exchange Commission (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 Bancorp, Inc.’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 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)
               
June 30, March 31, December 31, September 30, June 30,
(Dollars in thousands) 2017   2017   2016   2016   2016  
 

Assets

 
Cash and due from banks $ 17,492 $ 18,621 $ 16,464 $ 15,706 $ 18,773
Short-term investments   84,105     83,778     33,751     3,549     11,365  
Total cash and cash equivalents 101,597 102,399 50,215 19,255 30,138
 
Securities available for sale, at fair value 160,795 165,348 136,469 115,397 121,957
Securities held to maturity, at amortized cost 45,660 46,531 47,877 49,213 50,504
Federal Home Loan Bank stock, at cost 16,356 17,863 15,749 15,255 13,078
Loans held for sale, at fair value 91,849 51,932 86,443 114,054 99,697
Loans:
Residential real estate 771,121 765,368 770,935 774,404 773,169
Commercial real estate 592,325 557,174 495,801 450,945 377,386
Construction   66,908     69,134     58,443     40,438     31,414  
Total mortgage loans on real estate 1,430,354 1,391,676 1,325,179 1,265,787 1,181,969
Commercial 114,234 111,849 100,501 88,718 82,333
Consumer   543,394     551,603     563,104     555,874     560,144  
Loans 2,087,982 2,055,128 1,988,784 1,910,379 1,824,446
Less: Allowance for loan losses (17,181 ) (16,884 ) (16,968 ) (15,832 ) (14,439 )
Net deferred loan costs   8,682     9,041     9,931     10,336     10,893  
Net loans 2,079,483 2,047,285 1,981,747 1,904,883 1,820,900
Mortgage servicing rights, at fair value 20,313 20,839 20,333 15,534 12,688
Goodwill and other intangible assets 13,541 13,563 13,585 13,607 13,630
Other assets   102,476     100,384     95,892     99,935     104,166  
Total assets $ 2,632,070   $ 2,566,144   $ 2,448,310   $ 2,347,133   $ 2,266,758  
 
Liabilities and Stockholders' Equity
 
Deposits:
NOW and demand deposit accounts $ 395,150 $ 392,012 $ 365,869 $ 358,628 $ 339,379
Regular savings and club accounts 334,112 338,338 316,947 317,198 316,195
Money market deposit accounts 706,547 646,123 595,211 596,377 620,975
Brokered deposits 92,803 77,774 54,045 20,236
Term certificate accounts   465,179     470,490     472,681     442,472     433,685  
Total deposits 1,993,791 1,924,737 1,804,753 1,734,911 1,710,234
Short-term borrowed funds 30,000 75,000 80,000 50,000
Long-term borrowed funds 235,117 200,118 195,119 195,120 195,096
Other liabilities and accrued expenses   36,527     33,554     39,054     39,188     37,138  
Total liabilities   2,295,435     2,233,409     2,118,926     2,019,219     1,942,468  
 
Common stock 321 321 321 321 321
Additional paid-in capital 144,705 144,555 144,420 144,175 144,107
Unearned compensation - ESOP (10,982 ) (11,130 ) (11,278 ) (11,575 ) (11,872 )
Retained earnings 203,159 199,946 197,211 194,275 190,723
Accumulated other comprehensive income (loss)   (568 )   (957 )   (1,290 )   718     1,011  
Total stockholders' equity   336,635     332,735     329,384     327,914     324,290  
 
Total liabilities and stockholders' equity $ 2,632,070   $ 2,566,144   $ 2,448,310   $ 2,347,133   $ 2,266,758  
 
 
HarborOne Bancorp, Inc.
Consolidated Statements of Net Income - Trend
(Unaudited)
               
Quarters Ended
June 30, March 31, December 31, September 30, June 30,
(Dollars in thousands, except per share amounts) 2017   2017   2016 2016 2016  
 
Interest and dividend income:
Interest and fees on loans $ 19,640 $ 19,135 $ 18,092 $ 17,144 $ 16,293
Interest on loans held for sale 620 546 788 866 581
Interest on securities 1,332 1,216 1,002 988 1,023
Other interest and dividend income   320     252     167   164   209  
Total interest and dividend income   21,912     21,149     20,049   19,162   18,106  
 
Interest expense:
Interest on deposits 2,567 2,432 2,283 2,092 2,165
Interest on borrowed funds   1,130     1,285     1,211   1,168   1,289  
Total interest expense   3,697     3,717     3,494   3,260   3,454  
 
Net interest and dividend income 18,215 17,432 16,555 15,902 14,652
 
Provision for loan losses   470     265     1,456   1,710   801  
 
Net interest income, after provision for loan losses   17,745     17,167     15,099   14,192   13,851  
 
Noninterest income:
Mortgage banking income:
Changes in mortgage servicing rights fair value (1,052 ) (442 ) 2,970 351 (2,163 )
Other   11,200     7,846     12,404   16,513   13,837  
Total mortgage banking income 10,148 7,404 15,374 16,864 11,674
 
Deposit account fees 3,071 2,845 2,979 3,010 2,928
Income on retirement plan annuities 113 110 111 111 108
Gain on sale of consumer loans 78 29
Gain on sale and call of securities, net 41
Bank-owned life insurance income 261 257 263 275 274
Other income   706     760     557   609   834  
Total noninterest income   14,299     11,454     19,284   20,869   15,888  
 
Noninterest expenses:
Compensation and benefits 16,414 15,019 18,616 18,902 16,407
Occupancy and equipment 2,724 2,986 2,516 2,458 2,463
Data processing 1,528 1,522 1,557 1,450 1,446
Loan expense 1,882 1,363 2,710 3,316 2,128
Marketing 1,041 482 835 592 607
Professional fees 1,080 930 822 709 602
Deposit insurance 446 462 208 437 418
Prepayment penalties on Federal Home Loan Bank 400
Charitable foundation contributions 4,820
Other expenses   1,763     1,641     2,099   1,745   1,878  
Total noninterest expenses   26,878     24,405     29,363   29,609   31,169  
 
Income (loss) before income taxes 5,166 4,216 5,020 5,452 (1,430 )
 
Income tax provision (benefit)   1,953     1,481     2,084   1,900   (749 )
 
Net income (loss) $ 3,213   $ 2,735   $ 2,936 $ 3,552 $ (681 )
 
Earnings per common share:
Basic and diluted $ 0.10 $ 0.09 $ 0.09 0.11 N/A
 
Weighted average shares outstanding:
Basic and diluted 31,013,002 30,998,163 30,973,588 30,943,808 N/A
 
 
HarborOne Bancorp, Inc.
Consolidated Statements of Net Income
(Unaudited)
               
Six Months Ended June 30,
(Dollars in thousands, except per share amounts) 2017 2016 $ Change % Change
 
Interest and dividend income:
Interest and fees on loans $ 38,775 $ 31,936 $ 6,839 21.4 %
Interest on loans held for sale 1,166 1,041 125 12.0
Interest on securities 2,548 2,122 426 20.1
Other interest and dividend income   572     446     126   28.3
Total interest and dividend income   43,061     35,545     7,516   21.1
 
Interest expense:
Interest on deposits 4,999 4,335 664 15.3
Interest on borrowed funds   2,415     2,672     (257 ) (9.6 )
Total interest expense   7,414     7,007     407   5.8
 
Net interest and dividend income 35,647 28,538 7,109 24.9
 
Provision for loan losses   735     1,006     (271 ) (26.9 )
 
Net interest income, after provision for loan losses   34,912     27,532     7,380   26.8
 
Noninterest income:
Mortgage banking income:
Changes in mortgage servicing rights fair value (1,494 ) (4,451 ) 2,957 66.4
Other   19,046     23,213     (4,167 ) (18.0 )
Total mortgage banking income 17,552 18,762 (1,210 ) (6.4 )
 
Deposit account fees 5,916 5,675 241 4.2
Income on retirement plan annuities 223 214 9 4.2
Gain on sale of consumer loans 78 79 (1 ) (1.3 )
Gain on sale and call of securities, net 283 (283 ) (100.0 )
Bank-owned life insurance income 518 550 (32 ) (5.8 )
Other income   1,466     1,387     79   5.7
Total noninterest income   25,753     26,950     (1,197 ) (4.4 )
 
Noninterest expenses:
Compensation and benefits 31,433 31,925 (492 ) (1.5 )
Occupancy and equipment 5,710 5,247 463 8.8
Data processing 3,050 2,860 190 6.6
Loan expense 3,245 3,720 (475 ) (12.8 )
Marketing 1,523 1,172 351 29.9
Professional fees 2,010 1,179 831 70.5
Deposit insurance 908 821 87 10.6
Prepayment penalties on Federal Home Loan Bank 400 (400 ) (100.0 )
Charitable foundation contributions 4,820 (4,820 ) (100.0 )
Other expenses   3,404     3,582     (178 ) (5.0 )
Total noninterest expenses   51,283     55,726     (4,443 ) (8.0 )
 
Income (loss) before income taxes 9,382 (1,244 ) 10,626 854.2
 
Income tax provision (benefit)   3,434     (687 )   4,121   599.9
 
Net income (loss) $ 5,948   $ (557 ) $ 6,505   1167.9 %
 
Earnings per common share:
Basic and diluted $ 0.19 N/A N/A
 
Weighted average shares outstanding:
Basic and diluted 31,005,623 N/A N/A
 
 
HarborOne Bancorp, Inc.
Average Balances / Yields
(Unaudited)
 
      Quarters Ended
June 30, 2017   March 31, 2017 June 30, 2016

Average
Outstanding
Balance

  Interest    

Yield/
Cost (6)

Average
Outstanding
Balance

  Interest    

Yield/
Cost (6)

Average
Outstanding
Balance

  Interest    

Yield/
Cost (6)

(Dollars in thousands)
Interest-earning assets:
Loans (1) $ 2,129,280 $ 20,260 3.82 % $ 2,111,768 $ 19,681 3.78 % $ 1,881,488 $ 16,874 3.61 %
Investment securities (2) 209,691 1,408 2.69 197,525 1,292 2.65 173,731 1,101 2.55
Other interest-earning assets   81,370   320 1.58   67,428   252 1.52   51,257   209 1.64
Total interest-earning assets 2,420,341   21,988 3.64 2,376,721   21,225 3.62 2,106,476   18,184 3.47
Noninterest-earning assets   129,281   124,148   131,104
Total assets $ 2,549,622 $ 2,500,869 $ 2,237,580
Interest-bearing liabilities:
Savings accounts $ 338,607 141 0.17 $ 326,731 151 0.19 $ 317,180 137 0.17
NOW accounts 128,794 20 0.06 123,340 19 0.06 120,702 19 0.06
Money market accounts 667,468 831 0.50 627,073 753 0.49 642,758 724 0.45
Certificates of deposit 469,249 1,369 1.17 469,774 1,350 1.17 446,848 1,285 1.16
Brokered deposit   76,555   206 1.08   65,698   159 0.98    
Total interest-bearing deposits 1,680,673 2,567 0.61 1,612,616 2,432 0.61 1,527,488 2,165 0.57
FHLB advances   254,832   1,130 1.78   291,896   1,285 1.79   239,245   1,289 2.17
Total interest-bearing liabilities 1,935,505   3,697 0.77 1,904,512   3,717 0.79 1,766,733   3,454 0.79
Noninterest-bearing liabilities:
Noninterest-bearing deposits 250,654 237,056 244,651
Other noninterest-bearing liabilities   29,432   28,981   28,887
Total liabilities 2,215,591 2,170,549 2,040,271
Total equity   334,031   330,320   197,309
Total liabilities and equity $ 2,549,622 $ 2,500,869 $ 2,237,580
Tax equivalent net interest income 18,291 17,508 14,730
Tax equivalent interest rate spread (3) 2.87 % 2.83 % 2.68 %
Less: tax equivalent adjustment   76   76   78
Net interest income as reported $ 18,215 $ 17,432 $ 14,652
Net interest-earning assets (4) $ 484,836 $ 472,209 $ 339,743
Net interest margin (5) 3.02 % 2.97 % 2.80 %
Tax equivalent effect 0.01 0.02 0.01
Net interest margin on a fully tax equivalent basis 3.03 % 2.99 % 2.81 %
Average interest-earning assets to average interest-bearing liabilities 125.05 % 124.79 % 119.23 %
 

(1) Includes loans held for sale, nonaccruing loan balances and interest received on such loans.
(2) Includes securities available for sale and securities held to maturity. Interest income from tax exempt securities is computed on a taxable equivalent basis using a tax rate of 35% for all periods presented. The yield on investments before tax equivalent adjustments for the quarters presented were 2.55%, 2.50%, and 2.37%, respectively.
(3) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(4) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
(5) Net interest margin represents net interest income divided by average total interest-earning assets.
(6) Annualized

 

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

 
      Year to Date
June 30, 2017   June 30, 2016

Average
Outstanding
Balance

  Interest    

Yield/
Cost (6)

Average
Outstanding
Balance

  Interest    

Yield/
Cost (6)

(Dollars in thousands)
Interest-earning assets:
Loans (1) $ 2,120,573 $ 39,941 3.80 % $ 1,842,228 $ 32,977 3.60 %
Investment securities (2) 203,642 2,700 2.67 178,673 2,279 2.57
Other interest-earning assets   74,437   572 1.55   64,621   446 1.39
Total interest-earning assets 2,398,652   43,213 3.63 2,085,522   35,702 3.44
Noninterest-earning assets   126,729   126,731
Total assets $ 2,525,381 $ 2,212,253
Interest-bearing liabilities:
Savings accounts $ 332,702 292 0.18 $ 309,368 267 0.17
NOW accounts 126,037 39 0.06 118,785 37 0.06
Money market accounts 647,383 1,584 0.49 636,711 1,428 0.45
Certificates of deposit 469,510 2,719 1.17 452,742 2,603 1.16
Brokered deposit   71,156   365 1.03    
Total interest-bearing deposits 1,646,788 4,999 0.61 1,517,606 4,335 0.57
FHLB advances   273,262   2,415 1.78   252,318   2,672 2.13
Total interest-bearing liabilities 1,920,050   7,414 0.78 1,769,924   7,007 0.80
Noninterest-bearing liabilities:
Noninterest-bearing deposits 243,937 219,315
Other noninterest-bearing liabilities   29,207   27,983
Total liabilities 2,193,194 2,017,222
Total equity   332,187   195,031
Total liabilities and equity $ 2,525,381 $ 2,212,253
Tax equivalent net interest income 35,799 28,695
Tax equivalent interest rate spread (3) 2.85 % 2.64 %
Less: tax equivalent adjustment   152   157
Net interest income as reported $ 35,647 $ 28,538
Net interest-earning assets (4) $ 478,602 $ 315,598
Net interest margin (5) 3.00 % 2.75 %
Tax equivalent effect 0.01 0.02
Net interest margin on a fully tax equivalent basis 3.01 % 2.77 %
Average interest-earning assets to average interest-bearing liabilities 124.93 % 117.83 %
 

(1) Includes loans held for sale, nonaccruing loan balances and interest received on such loans.
(2) Includes securities available for sale and securities held to maturity. Interest income from tax exempt securities is computed on a taxable equivalent basis using a tax rate of 35% for all periods presented. The yield on investments before tax equivalent adjustments was 2.52% and 2.39% for the six months ended June 30, 2017 and 2016, respectively.
(3) Net 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
June 30, 2017   March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016
(In thousands)
Interest-earning assets:
Loans (1) $ 2,129,280 $ 2,111,768 $ 2,055,444 $ 1,983,249 $ 1,881,488
Investment securities (2) 209,691 197,525 168,485 166,816 173,731
Other interest-earning assets   81,370   67,428   38,912   18,030   51,257

 

Total interest-earning assets 2,420,341 2,376,721 2,262,841 2,168,095 2,106,476
Noninterest-earning assets   129,281   124,148   126,899   130,498   131,104
Total assets $ 2,549,622 $ 2,500,869 $ 2,389,740 $ 2,298,593 $ 2,237,580
Interest-bearing liabilities:
Savings accounts $ 338,607 $ 326,731 $ 319,166 $ 319,202 $ 317,180
NOW accounts 128,794 123,340 124,134 120,704 120,702
Money market accounts 667,468 627,073 602,263 612,761 642,758
Certificates of deposit 469,249 469,774 458,491 434,519 446,848
Brokered deposit   76,555   65,698   39,689   549  

 

Total interest-bearing deposits 1,680,673 1,612,616 1,543,743 1,487,735 1,527,488
FHLB advances   254,832   291,896   257,568   232,587   239,245
Total interest-bearing liabilities 1,935,505 1,904,512 1,801,311 1,720,322 1,766,733
Noninterest-bearing liabilities:
Noninterest-bearing deposits 250,654 237,056 227,918 217,930 244,651
Other noninterest-bearing liabilities   29,432   28,981   31,055   32,888   28,887
Total liabilities 2,215,591 2,170,549 2,060,284 1,971,140 2,040,271
Total equity   334,031   330,320   329,456   327,453   197,309
Total liabilities and equity $ 2,549,622 $ 2,500,869 $ 2,389,740 $ 2,298,593 $ 2,237,580
 
Annualized Yield Trend - Quarters Ended
June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016
Interest-earning assets:
Loans (1) 3.82 % 3.78 % 3.65 % 3.61 % 3.61 %
Investment securities (2) 2.69 % 2.65 % 2.55 % 2.54 % 2.55 %
Other interest-earning assets 1.58 % 1.52 % 1.71 % 3.62 % 1.64 %
Total interest-earning assets 3.64 % 3.62 % 3.54 % 3.53 % 3.47 %
 
Interest-bearing liabilities:
Savings accounts 0.17 % 0.19 % 0.18 % 0.17 % 0.17 %
NOW accounts 0.06 % 0.06 % 0.06 % 0.06 % 0.06 %
Money market accounts 0.50 % 0.49 % 0.46 % 0.44 % 0.45 %
Certificates of deposit 1.17 % 1.17 % 1.16 % 1.14 % 1.16 %
Brokered deposit 1.08 % 0.98 % 0.92 % 2.17 % %
Total interest-bearing deposits 0.61 % 0.61 % 0.59 % 0.56 % 0.57 %
FHLB advances 1.78 % 1.79 % 1.87 % 2.00 % 2.17 %
Total interest-bearing liabilities 0.77 % 0.79 % 0.77 % 0.75 % 0.79 %
 

(1) Includes loans held for sale, nonaccruing loan balances and interest received on such loans.
(2) Includes securities available for sale and securities held to maturity.

 
HarborOne Bancorp, Inc.
Selected Financial Highlights
(Unaudited)
 
      Quarters Ended
June 30,   March 31,   December 31,   September 30,   June 30,
Performance Ratios (annualized): 2017 2017 2016 2016 2016
         
Return (loss) on average assets (ROAA) 0.50 % 0.44 % 0.49 % 0.62 % (0.12 ) %
 
Return (loss) on average equity (ROAE) 3.85 % 3.31 % 3.56 % 4.34 % (1.38 ) %
 
Efficiency ratio (1) 82.60 % 84.41 % 81.87 % 80.46 % 101.99 %
 

(1) Represents noninterest expense divided by the sum of net interest income and noninterest income

       
      At or for the Quarters Ended
June 30, March 31, December 31, September 30, June 30,
Asset Quality 2017 2017 2016 2016 2016
(Dollars in thousands)
 
Total nonperforming assets $ 22,522 $ 23,471 $ 22,946 $ 25,992 $ 27,770
 
Nonperforming assets to total assets 0.86 % 0.91 % 0.94 % 1.11 % 1.23 %
 
Allowance for loan losses to total loans 0.82 % 0.82 % 0.85 % 0.82 % 0.79 %
 
Net charge offs $ 173 $ 349 $ 320 $ 317 $ 58
 
Annualized net charge offs/average loans 0.03 % 0.07 % 0.06 % 0.07 % 0.01 %
 
Allowance for loan losses to nonperforming loans 80.04 % 78.17 % 80.12 % 65.92 % 55.52 %
 
               
June 30, March 31, December 31, September 30, June 30,
Capital and Share Related 2017 2017 2016 2016 2016
 
 
Common stock outstanding 32,120,880 32,120,880 32,120,880 32,120,880 32,120,880
 
Book value per share $ 10.48 $ 10.36 $ 10.25 $ 10.21 10.10
 
Tangible book value per share (1) $ 10.06 $ 9.94 $ 9.83 $ 9.79 9.67
 
Tangible common equity / tangible assets (2) 12.34 % 12.50 % 12.97 % 13.47 % 13.79 %
 

(1) This non-GAAP ratio is total stockholders' equity less goodwill and other intangible assets divided by common stock outstanding.
(2) This non-GAAP ratio is total stockholders' equity less goodwill and other intangible assets to total assets less goodwill and other intangible assets.

HarborOne Bancorp, Inc.
Joseph F. Casey, 508-895-1312
EVP, COO, CFO

Source: HarborOne Bancorp, Inc.