EX-99.1 2 ex-99d1.htm EX-99.1 hone_Exhibit_99.1

Exhibit 99.1

HarborOne Bancorp, Inc. Announces 2018 First Quarter Earnings

Contact: Joseph F. Casey, EVP, COO, CFO

Brockton, Massachusetts (April 19, 2018): HarborOne Bancorp, Inc. (the “Company”) (NASDAQ: HONE), the holding company for HarborOne Bank (the “Bank”), announced net income of $2.3 million, or $0.07 per basic and diluted share, for the first quarter of 2018, compared to $1.6 million, or $0.05 per basic and diluted share, for the prior quarter and net income of $2.7 million, or $0.09 per basic and diluted share, for the same quarter last year. 

 

Selected highlights for the first quarter of 2018 include:

 

·

Net interest margin increased to 3.26% from 3.07% for the prior quarter and 2.99% for the first quarter of 2017.

·

Announcement of an agreement to acquire Coastway Bancorp, Inc. (“Coastway”) in an all cash transaction valued at approximately $125.6 million.

·

Total commercial loans (including commercial construction) grew by 6% in the first quarter.

·

Total deposits grew by 6% in the first quarter and amounted to $2.13 billion at March 31, 2018.

 

Additionally, effective April 3, 2018, the Bank’s wholly owned subsidiary, Merrimack Mortgage Company, LLC, became HarborOne Mortgage, LLC (“HarborOne Mortgage”). HarborOne Mortgage consolidates the Bank’s residential mortgage lending division with the legacy Merrimack Mortgage Company, LLC.

 

The increase in net income from the prior quarter primarily reflects a  $692,000 increase in net interest income, a  $2.1 million decrease in noninterest expense and a $726,000 decrease in income tax provision partially offset by a $2.8 million decrease in noninterest income.  

 

The Coastway transaction is expected to close in the second half of 2018 and is subject to customary closing conditions, including the approval of the stockholders of Coastway and required regulatory approvals. 

 

James W. Blake, President and CEO stated, “We are excited as we start 2018, looking forward to welcoming the Coastway customers, employees and communities to HarborOne. We anticipate another robust year, despite a challenging residential mortgage market, with a continued focus on organic balance sheet growth and building commercial loan relationships.”

 

Net Interest Income

The Company’s net interest and dividend income was $20.1 million for the quarter ended March 31, 2018,  up $692,000, or 3.6%, from $19.4 million for the quarter ended December 31, 2017 and up $2.7 million,  or 15.4%, from  $17.4 million for the quarter ended March 31, 2017. The tax-equivalent interest rate spread and net interest margin were 3.07% and 3.26%, respectively, for the quarter ended March 31, 2018 compared to 2.90% and 3.07%, respectively, for the quarter ended December 31, 2017 and 2.83% and 2.99%, respectively, for the quarter ended March 31, 2017.

 

The increase in net interest income from the previous quarter reflects an $876,000, or 3.7%, increase in total interest and dividend income and an increase of $184,000, or 4.2% in total interest expense. The increase in interest and dividend income is primarily due to commercial loan growth that provided an increase in average outstanding loans of $57.7 million partially offset by decreases in the average balances of residential real estate and consumer loans. The yield on loans was 4.13%  for the quarter ended March 31, 2018 and 3.94% for the quarter ended December 31, 2017. The increase in interest expense is due to an increase in average interest-bearing deposits of $14.4 million with a  10 basis point increase in the cost of those funds offset by a  decrease in average FHLB advances of $26.7 million and a 7 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 $2.25 billion from $2.11 billion and an increase in the yield on loans to 4.13% from 3.78%, again primarily driven by commercial loan growth as well as higher rates on variable rate loans.  Total interest and dividend income increased  $3.5 million, or 16.5%, and total interest expense increased $843,000, or 22.7%, over the prior year quarter as a result of rising interest rates.

 

Noninterest Income

Noninterest income decreased to $11.3 million for the quarter ended March 31, 2018,  down  $2.8 million, or 19.8%, from the quarter ended December 31, 2017.  The decrease is primarily due to a decrease in mortgage banking income of $1.8 million as mortgage originations decreased 39.4% from the prior quarter. Changes in the mortgage servicing rights fair value amounted to  a $1.0 million increase in the first quarter of 2018 compared to a $74,000 decrease in the fourth quarter of 2017. Also, other income decreased $760,000 as the prior quarter income included a $1.2 million reversal of contingent consideration for the HarborOne Mortgage earn out that was settled in full in the fourth quarter of 2017. 

 

Noninterest income decreased  $105,000, or 0.9%, as compared to the quarter ended March 31, 2017. The change in mortgage servicing rights fair value was an increase of $1.5 million, offset by a  $1.6 million decrease in other mortgage banking income during the prior

 

 

year quarter. Compared to the same quarter prior year, mortgage originations by HarborOne Mortgage decreased 13.9% in 2018 primarily as a result of higher residential mortgage interest rates, low housing inventories and reduced refinancing volume. 

 

Noninterest Expense

Noninterest expenses were $27.6 million for the quarter ended March 31, 2018,  a decrease of $2.1 million, or 7.1%, from the quarter ended December 31, 2017 due to decreases in compensation and benefits of $1.3 million, $490,000 in loan expense and $538,000 in other expenses.  The decrease in compensation and benefits and loan expenses reflects the decrease in loan production volumes. The decrease in other expenses primarily reflects a fourth quarter expense accrual of $925,000 to freeze the director postretirement benefit plan that was partially offset by additional expenses in the first quarter related to the acquisition of Coastway. 

 

Noninterest expenses increased  $3.2 million,  or 13.1%, from the quarter ended March 31, 2017. The increase was primarily due to increases in compensation and benefits of $1.4 million, marketing of $517,000, and other expenses of $962,000. The compensation and benefits and other expense increase reflects expenses related to the management and Board equity plans that were established in August 2017. The first quarter of 2018 includes $974,000 in compensation and benefits related to the management’s equity plan expense and $392,000 in other expenses related to the Board’s equity plan. There were no such expenses in the first quarter of 2017. Also contributing to the increase in other expenses was $486,000 in expenses related to the Coastway acquisition.

 

Income Tax Provision

The effective tax rate was 26.5% for the quarter ended March 31, 2018, 49.2% for the quarter ended December 31, 2017 and 35.1% for the quarter ended March 31, 2017.  The enactment of the Tax Cuts and Jobs Act of 2017 resulted in significant changes to the U.S. tax code, including a reduction in the top corporate income tax rate from 35% to 21% effective January 1, 2018. As a result of the reduction in tax rate, the Company revalued its net deferred tax asset and recorded a one-time additional $243,000 tax provision in the fourth quarter of 2017 and reduced the effective tax rate in 2018.  

 

Asset Quality

The Company recorded a provision for loan losses of $808,000 for the quarter ended March 31, 2018, $760,000 for the quarter ended December 31, 2017 and $265,000 for the quarter ended March 31, 2017.  The provisions  in these quarters were primarily due to commercial loan growth. Changes in the provision for loan losses are 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 $18.9 million, or 0.84%, of total loans at March 31, 2018, compared to $18.5 million, or 0.84%, of total loans, at December 31, 2017 and $16.9 million, or 0.82%, of total loans at March 31, 2017. Net charge-offs totaled $434,000 for the quarter ended March 31, 2018, or 0.08%, of average loans outstanding on an annualized basis, compared to $204,000, or 0.04%, for the quarter ended December 31, 2017 and $349,000, or 0.07%, for the quarter ended March 31, 2017.

 

Nonperforming assets were $17.2 million at March 31, 2018 compared to $18.6 million at December 31, 2017 and $23.5 million at March 31, 2017. Nonperforming assets as a percentage of total assets were 0.63% at March 31, 2018,  0.69% at December 31, 2017 and 0.91% at March 31, 2017. 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 $50.7 million, or 1.9%, to $2.74 billion at March 31, 2018 from $2.68 billion at December 31, 2017. Net loans increased $37.8 million, or 1.7%, to $2.21 billion at March 31, 2018 from $2.18 billion at December 31, 2017.  The net increase in loans for the three months ended March 31, 2018 was primarily due to increases of $31.7 million in commercial real estate loans, $16.3 million in construction loans and $1.5 million in commercial and industrial loans partially offset by a  decrease of $4.6 million in residential real estate loans and $6.2 million in consumer loans. Loans held for sale decreased $25.3 million, or 42.6%, to $34.1 million at March 31, 2018 from $59.5 million at December 31,  2017 due to the decrease in residential mortgage originations.

 

Total deposits increased $113.5 million, or 5.6%, to $2.13 billion at March 31, 2018 from $2.01 billion at December 31, 2017.  Compared to the prior quarter, non-certificate accounts increased $27.5 million, term certificate accounts increased $89.3 million and brokered deposits decreased $3.3 million.  The increase in certificate accounts was in part due to certificate promotions during the quarter.  Borrowings were $226.4 million at March 31, 2018 and $290.4 million at December 31, 2017.

 

Total stockholders’ equity was $344.9 million at March 31, 2018 compared to $343.5 million at December 31, 2017 and $332.7 million at March 31, 2017.   The tangible common equity to tangible assets ratio was 12.17% at March 31, 2018, 12.35% at December 31, 2017 and 12.50% at March 31, 2017.  At March 31, 2018, 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. HarborOne Mortgage, LLC, a subsidiary of HarborOne Bank, is a full-service mortgage lender with 34 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, the Company and Coastway’s ability to achieve the synergies and value creation contemplated by the proposed acquisition; the Company and Coastway’s ability to successfully integrate operations in the proposed acquisition; the effect of the announcement of the proposed acquisition on the ability of Coastway to maintain relationships with its key partners, customers and employees, and on its operating business generally; 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; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; 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 the tax equivalent basis for yields, the efficiency ratio, tangible common equity to tangible assets ratio and tangible book value per share is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors.  These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.  Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

 

 

 

HarborOne Bancorp, Inc.

Consolidated Balance Sheet Trend

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(Dollars in thousands)

    

2018

    

2017

    

2017

    

2017

    

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

15,205

 

$

16,348

 

$

15,393

 

$

17,492

 

$

18,621

Short-term investments

 

 

92,105

 

 

64,443

 

 

79,412

 

 

84,105

 

 

83,778

Total cash and cash equivalents

 

 

107,310

 

 

80,791

 

 

94,805

 

 

101,597

 

 

102,399

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale, at fair value

 

 

182,173

 

 

170,853

 

 

166,122

 

 

160,795

 

 

165,348

Securities held to maturity, at amortized cost

 

 

46,095

 

 

46,869

 

 

47,752

 

 

45,660

 

 

46,531

Federal Home Loan Bank stock, at cost

 

 

13,538

 

 

15,532

 

 

16,356

 

 

16,356

 

 

17,863

Loans held for sale, at fair value

 

 

34,129

 

 

59,460

 

 

96,201

 

 

91,849

 

 

51,932

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate

 

 

762,361

 

 

766,917

 

 

769,418

 

 

771,121

 

 

765,368

Commercial real estate

 

 

687,121

 

 

655,419

 

 

623,054

 

 

592,325

 

 

557,174

Construction

 

 

144,949

 

 

128,643

 

 

76,668

 

 

66,908

 

 

69,134

Total mortgage loans on real estate

 

 

1,594,431

 

 

1,550,979

 

 

1,469,140

 

 

1,430,354

 

 

1,391,676

Commercial

 

 

111,013

 

 

109,523

 

 

111,627

 

 

114,234

 

 

111,849

Consumer

 

 

521,634

 

 

527,820

 

 

533,707

 

 

543,394

 

 

551,603

Loans

 

 

2,227,078

 

 

2,188,322

 

 

2,114,474

 

 

2,087,982

 

 

2,055,128

Less: Allowance for loan losses

 

 

(18,863)

 

 

(18,489)

 

 

(17,933)

 

 

(17,181)

 

 

(16,884)

Net deferred loan costs

 

 

6,075

 

 

6,645

 

 

8,035

 

 

8,682

 

 

9,041

Net loans

 

 

2,214,290

 

 

2,176,478

 

 

2,104,576

 

 

2,079,483

 

 

2,047,285

Mortgage servicing rights, at fair value

 

 

22,696

 

 

21,092

 

 

20,376

 

 

20,313

 

 

20,839

Goodwill and other intangible assets

 

 

13,675

 

 

13,497

 

 

13,519

 

 

13,541

 

 

13,563

Other assets

 

 

101,671

 

 

100,348

 

 

99,752

 

 

102,476

 

 

100,384

Total assets

 

$

2,735,577

 

$

2,684,920

 

$

2,659,459

 

$

2,632,070

 

$

2,566,144

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and demand deposit accounts

 

$

419,776

 

$

395,153

 

$

395,728

 

$

395,150

 

$

392,012

Regular savings and club accounts

 

 

378,818

 

 

356,300

 

 

404,465

 

 

398,883

 

 

338,338

Money market deposit accounts

 

 

701,360

 

 

721,021

 

 

666,613

 

 

641,776

 

 

646,123

Brokered deposits

 

 

70,176

 

 

73,490

 

 

73,127

 

 

92,803

 

 

77,774

Term certificate accounts

 

 

557,082

 

 

467,774

 

 

463,612

 

 

465,179

 

 

470,490

Total deposits

 

 

2,127,212

 

 

2,013,738

 

 

2,003,545

 

 

1,993,791

 

 

1,924,737

Short-term borrowed funds

 

 

 —

 

 

44,000

 

 

10,000

 

 

30,000

 

 

75,000

Long-term borrowed funds

 

 

226,364

 

 

246,365

 

 

266,366

 

 

235,117

 

 

200,118

Other liabilities and accrued expenses

 

 

37,144

 

 

37,333

 

 

38,947

 

 

36,527

 

 

33,554

Total liabilities

 

 

2,390,720

 

 

2,341,436

 

 

2,318,858

 

 

2,295,435

 

 

2,233,409

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

327

 

 

327

 

 

327

 

 

321

 

 

321

Additional paid-in capital

 

 

148,559

 

 

147,060

 

 

145,525

 

 

144,705

 

 

144,555

Unearned compensation - ESOP

 

 

(10,536)

 

 

(10,685)

 

 

(10,833)

 

 

(10,982)

 

 

(11,130)

Retained earnings

 

 

209,946

 

 

207,590

 

 

205,997

 

 

203,159

 

 

199,946

Treasury stock

 

 

(742)

 

 

(280)

 

 

 —

 

 

 —

 

 

 —

Accumulated other comprehensive loss

 

 

(2,697)

 

 

(528)

 

 

(415)

 

 

(568)

 

 

(957)

Total stockholders' equity

 

 

344,857

 

 

343,484

 

 

340,601

 

 

336,635

 

 

332,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

2,735,577

 

$

2,684,920

 

$

2,659,459

 

$

2,632,070

 

$

2,566,144

 

 

 

 

 

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income - Trend

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(Dollars in thousands, except per share amounts)

    

2018

    

2017

    

2017

    

2017

    

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

22,504

 

$

21,349

 

$

20,990

 

$

19,640

 

$

19,135

Interest on loans held for sale

 

 

411

 

 

777

 

 

796

 

 

620

 

 

546

Interest on securities

 

 

1,496

 

 

1,389

 

 

1,334

 

 

1,332

 

 

1,216

Other interest and dividend income

 

 

274

 

 

294

 

 

294

 

 

320

 

 

252

Total interest and dividend income

 

 

24,685

 

 

23,809

 

 

23,414

 

 

21,912

 

 

21,149

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

3,523

 

 

3,151

 

 

2,812

 

 

2,567

 

 

2,432

Interest on borrowed funds

 

 

1,038

 

 

1,226

 

 

1,333

 

 

1,130

 

 

1,285

Total interest expense

 

 

4,561

 

 

4,377

 

 

4,145

 

 

3,697

 

 

3,717

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

 

20,124

 

 

19,432

 

 

19,269

 

 

18,215

 

 

17,432

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for loan losses

 

 

808

 

 

760

 

 

921

 

 

470

 

 

265

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income, after provision for loan losses

 

 

19,316

 

 

18,672

 

 

18,348

 

 

17,745

 

 

17,167

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in mortgage servicing rights fair value

 

 

1,022

 

 

(74)

 

 

(488)

 

 

(1,052)

 

 

(442)

Other

 

 

6,261

 

 

9,134

 

 

11,071

 

 

11,200

 

 

7,846

Total mortgage banking income

 

 

7,283

 

 

9,060

 

 

10,583

 

 

10,148

 

 

7,404

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposit account fees

 

 

2,967

 

 

3,223

 

 

3,172

 

 

3,071

 

 

2,845

Income on retirement plan annuities

 

 

113

 

 

118

 

 

114

 

 

113

 

 

110

Gain on sale of consumer loans

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

78

Bank-owned life insurance income

 

 

239

 

 

246

 

 

260

 

 

261

 

 

257

Other income

 

 

747

 

 

1,507

 

 

498

 

 

706

 

 

760

Total noninterest income

 

 

11,349

 

 

14,154

 

 

14,627

 

 

14,299

 

 

11,454

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

16,352

 

 

17,655

 

 

17,325

 

 

16,319

 

 

14,924

Occupancy and equipment

 

 

3,275

 

 

3,047

 

 

2,954

 

 

2,726

 

 

2,988

Data processing

 

 

1,553

 

 

1,560

 

 

1,547

 

 

1,528

 

 

1,522

Loan expense

 

 

1,262

 

 

1,752

 

 

1,884

 

 

1,882

 

 

1,363

Marketing

 

 

999

 

 

936

 

 

1,136

 

 

1,041

 

 

482

Professional fees

 

 

968

 

 

1,097

 

 

1,126

 

 

1,080

 

 

930

Deposit insurance

 

 

494

 

 

412

 

 

397

 

 

446

 

 

462

Other expenses

 

 

2,696

 

 

3,234

 

 

2,069

 

 

1,856

 

 

1,734

Total noninterest expenses

 

 

27,599

 

 

29,693

 

 

28,438

 

 

26,878

 

 

24,405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

3,066

 

 

3,133

 

 

4,537

 

 

5,166

 

 

4,216

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

814

 

 

1,540

 

 

1,699

 

 

1,953

 

 

1,481

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,252

 

$

1,593

 

$

2,838

 

$

3,213

 

$

2,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.07

 

$

0.05

 

$

0.09

 

$

0.10

 

$

0.09

Diluted

 

$

0.07

 

$

0.05

 

$

0.09

 

$

0.10

 

$

0.09

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

31,569,811

 

 

31,582,069

 

 

31,303,281

 

 

31,013,002

 

 

30,998,163

Diluted

 

 

31,569,811

 

 

31,582,069

 

 

31,303,281

 

 

31,013,002

 

 

30,998,163

 

 

 

 

 

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

 

 

(Dollars in thousands, except per share amounts)

    

2018

    

2017

    

$ Change

    

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

22,504

 

$

19,135

 

$

3,369

 
17.6

%

Interest on loans held for sale

 

 

411

 

 

546

 

 

(135)

 
(24.7)

 

Interest on securities

 

 

1,496

 

 

1,216

 

 

280

 
23.0

 

Other interest and dividend income

 

 

274

 

 

252

 

 

22

 
8.7

 

Total interest and dividend income

 

 

24,685

 

 

21,149

 

 

3,536

 
16.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

3,523

 

 

2,432

 

 

1,091

 
44.9

 

Interest on borrowed funds

 

 

1,038

 

 

1,285

 

 

(247)

 
(19.2)

 

Total interest expense

 

 

4,561

 

 

3,717

 

 

844

 
22.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

 

20,124

 

 

17,432

 

 

2,692

 
15.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for loan losses

 

 

808

 

 

265

 

 

543

 
204.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income, after provision for loan losses

 

 

19,316

 

 

17,167

 

 

2,149

 
12.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage banking income:

 

 

 

 

 

 

 

 

 

 

 

 

Changes in mortgage servicing rights fair value

 

 

1,022

 

 

(442)

 

 

1,464

 
331.2

 

Other

 

 

6,261

 

 

7,846

 

 

(1,585)

 
(20.2)

 

Total mortgage banking income

 

 

7,283

 

 

7,404

 

 

(121)

 
(1.6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposit account fees

 

 

2,967

 

 

2,845

 

 

122

 
4.3

 

Income on retirement plan annuities

 

 

113

 

 

110

 

 

 3

 
2.7

 

Gain on sale of consumer loans

 

 

 —

 

 

78

 

 

(78)

 
(100.0)

 

Bank-owned life insurance income

 

 

239

 

 

257

 

 

(18)

 
(7.0)

 

Other income

 

 

747

 

 

760

 

 

(13)

 
(1.7)

 

Total noninterest income

 

 

11,349

 

 

11,454

 

 

(105)

 
(0.9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

16,352

 

 

14,924

 

 

1,428

 
9.6

 

Occupancy and equipment

 

 

3,275

 

 

2,988

 

 

287

 
9.6

 

Data processing

 

 

1,553

 

 

1,522

 

 

31

 
2.0

 

Loan expense

 

 

1,262

 

 

1,363

 

 

(101)

 
(7.4)

 

Marketing

 

 

999

 

 

482

 

 

517

 
107.3

 

Professional fees

 

 

968

 

 

930

 

 

38

 
4.1

 

Deposit insurance

 

 

494

 

 

462

 

 

32

 
6.9

 

Other expenses

 

 

2,696

 

 

1,734

 

 

962

 
55.5

 

Total noninterest expenses

 

 

27,599

 

 

24,405

 

 

3,194

 
13.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

3,066

 

 

4,216

 

 

(1,150)

 
(27.3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

814

 

 

1,481

 

 

(667)

 
(45.0)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,252

 

$

2,735

 

$

(483)

 
(17.7)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.07

 

 

0.09

 

 

(0.02)

 
(22.2)

%

Diluted

 

$

0.07

 

 

0.09

 

 

(0.02)

 
(22.2)

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

31,569,811

 

 

30,998,163

 

 

571,648

 
1.8

%

Diluted

 

 

31,569,811

 

 

30,998,163

 

 

571,648

 
1.8

 

 

 

 

 

 

 

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

 

March 31, 2018

 

December 31, 2017

 

March 31, 2017

 

 

 

Average

 

 

 

 

 

Average

 

 

 

 

 

Average

 

 

 

 

 

 

 

Outstanding

 

 

 

Yield/

 

Outstanding

 

 

 

Yield/

 

Outstanding

 

 

 

Yield/

 

 

    

Balance

    

Interest

    

Cost (6)

    

Balance

    

Interest

    

Cost (6)

 

Balance

    

Interest

    

Cost (6)

 

 

 

(Dollars in thousands)

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

 

$

2,248,119

 

$

22,915

 

4.13

%  

$

2,230,303

 

$

22,126

 

3.94

%  

$

2,111,768

 

$

19,681

 

3.78

%

Investment securities (2)

 

 

227,362

 

 

1,541

 

2.75

 

 

214,127

 

 

1,465

 

2.71

 

 

197,525

 

 

1,292

 

2.65

 

Other interest-earning assets

 

 

37,346

 

 

274

 

2.97

 

 

73,014

 

 

294

 

1.60

 

 

67,428

 

 

252

 

1.52

 

Total interest-earning assets

 

 

2,512,827

 

 

24,730

 

3.99

 

 

2,517,444

 

 

23,885

 

3.76

 

 

2,376,721

 

 

21,225

 

3.62

 

Noninterest-earning assets

 

 

125,640

 

 

 

 

 

 

 

127,374

 

 

 

 

 

 

 

124,148

 

 

 

 

 

 

Total assets

 

$

2,638,467

 

 

 

 

 

 

$

2,644,818

 

 

 

 

 

 

$

2,500,869

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

$

332,414

 

 

137

 

0.17

 

$

353,350

 

 

159

 

0.18

 

$

326,731

 

 

151

 

0.19

 

NOW accounts

 

 

125,602

 

 

20

 

0.06

 

 

126,661

 

 

20

 

0.06

 

 

123,340

 

 

19

 

0.06

 

Money market accounts

 

 

716,380

 

 

1,383

 

0.78

 

 

716,862

 

 

1,287

 

0.71

 

 

627,073

 

 

753

 

0.49

 

Certificates of deposit

 

 

496,839

 

 

1,718

 

1.40

 

 

464,139

 

 

1,444

 

1.23

 

 

469,774

 

 

1,350

 

1.17

 

Brokered deposit

 

 

78,930

 

 

265

 

1.36

 

 

74,783

 

 

241

 

1.28

 

 

65,698

 

 

159

 

0.98

 

Total interest-bearing deposits

 

 

1,750,165

 

 

3,523

 

0.82

 

 

1,735,795

 

 

3,151

 

0.72

 

 

1,612,616

 

 

2,432

 

0.61

 

FHLB advances

 

 

253,359

 

 

1,038

 

1.66

 

 

280,092

 

 

1,226

 

1.74

 

 

291,896

 

 

1,285

 

1.79

 

Total interest-bearing liabilities

 

 

2,003,524

 

 

4,561

 

0.92

 

 

2,015,887

 

 

4,377

 

0.86

 

 

1,904,512

 

 

3,717

 

0.79

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

260,455

 

 

 

 

 

 

 

256,522

 

 

 

 

 

 

 

237,056

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

31,457

 

 

 

 

 

 

 

31,459

 

 

 

 

 

 

 

28,981

 

 

 

 

 

 

Total liabilities

 

 

2,295,436

 

 

 

 

 

 

 

2,303,868

 

 

 

 

 

 

 

2,170,549

 

 

 

 

 

 

Total equity

 

 

343,031

 

 

 

 

 

 

 

340,950

 

 

 

 

 

 

 

330,320

 

 

 

 

 

 

Total liabilities and equity

 

$

2,638,467

 

 

 

 

 

 

$

2,644,818

 

 

 

 

 

 

$

2,500,869

 

 

 

 

 

 

Tax equivalent net interest income

 

 

 

 

 

20,169

 

 

 

 

 

 

 

19,508

 

 

 

 

 

 

 

17,508

 

 

 

Tax equivalent interest rate spread (3)

 

 

 

 

 

 

 

3.07

%  

 

 

 

 

 

 

2.90

%  

 

 

 

 

 

 

2.83

%

Less: tax equivalent adjustment

 

 

 

 

 

45

 

 

 

 

 

 

 

76

 

 

 

 

 

 

 

76

 

 

 

Net interest income as reported

 

 

 

 

$

20,124

 

 

 

 

 

 

$

19,432

 

 

 

 

 

 

$

17,432

 

 

 

Net interest-earning assets (4)

 

$

509,303

 

 

 

 

 

 

$

501,557

 

 

 

 

 

 

$

472,209

 

 

 

 

 

 

Net interest margin (5)

 

 

 

 

 

 

 

3.25

%  

 

 

 

 

 

 

3.06

%  

 

 

 

 

 

 

2.97

%

Tax equivalent effect

 

 

 

 

 

 

 

0.01

 

 

 

 

 

 

 

0.01

 

 

 

 

 

 

 

0.02

 

Net interest margin on a fully tax equivalent basis

 

 

 

 

 

 

 

3.26

%  

 

 

 

 

 

 

3.07

%  

 

 

 

 

 

 

2.99

%

Average interest-earning assets to average interest-bearing liabilities

 

 

125.42

%  

 

 

 

 

 

 

124.88

%  

 

 

 

 

 

 

124.79

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including demand deposits

 

$

2,010,620

 

$

3,523

 

 

 

$

1,992,317

 

$

3,151

 

 

 

$

1,849,672

 

$

2,432

 

 

 

Cost of total deposits

 

 

 

 

 

 

 
0.71

%  

 

 

 

 

 

 
0.63

%  

 

 

 

 

 

 
0.53

%  

Total funding liabilities, including demand deposits

 

$

2,263,979

 

$

4,561

 

 

 

$

2,272,409

 

$

4,377

 

 

 

$

2,141,568

 

$

3,717

 

 

 

Cost of total funding liabilities

 

 

 

 

 

 

 
0.82

%  

 

 

 

 

 

 
0.76

%  

 

 

 

 

 

 
0.70

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 21% for the period ended March 31, 2018 and 35% for the periods ended December 31, 2017 and March 31, 2017.  The yield on investments before tax equivalent adjustments for the quarters presented were 2.67%, 2.57%, and 2.50%, 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

 

 

    

   March 31, 2018    

    

December 31, 2017

    

September 30, 2017

    

    June 30, 2017     

    

   March 31, 2017    

 

 

 

(In thousands)

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

 

$

2,248,119

 

$

2,230,303

 

$

2,190,303

 

$

2,129,280

 

$

2,111,768

 

Investment securities (2)

 

 

227,362

 

 

214,127

 

 

206,761

 

 

209,691

 

 

197,525

 

Other interest-earning assets

 

 

37,346

 

 

73,014

 

 

102,589

 

 

81,370

 

 

67,428

 

Total interest-earning assets

 

 

2,512,827

 

 

2,517,444

 

 

2,499,653

 

 

2,420,341

 

 

2,376,721

 

Noninterest-earning assets

 

 

125,640

 

 

127,374

 

 

128,966

 

 

129,281

 

 

124,148

 

Total assets

 

$

2,638,467

 

$

2,644,818

 

$

2,628,619

 

$

2,549,622

 

$

2,500,869

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

$

332,414

 

$

353,350

 

$

402,470

 

$

351,948

 

$

326,731

 

NOW accounts

 

 

125,602

 

 

126,661

 

 

125,636

 

 

128,794

 

 

123,340

 

Money market accounts

 

 

716,380

 

 

716,862

 

 

646,873

 

 

654,127

 

 

627,073

 

Certificates of deposit

 

 

496,839

 

 

464,139

 

 

463,077

 

 

469,249

 

 

469,774

 

Brokered deposit

 

 

78,930

 

 

74,783

 

 

82,976

 

 

76,555

 

 

65,698

 

Total interest-bearing deposits

 

 

1,750,165

 

 

1,735,795

 

 

1,721,032

 

 

1,680,673

 

 

1,612,616

 

FHLB advances

 

 

253,359

 

 

280,092

 

 

287,858

 

 

254,832

 

 

291,896

 

Total interest-bearing liabilities

 

 

2,003,524

 

 

2,015,887

 

 

2,008,890

 

 

1,935,505

 

 

1,904,512

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

260,455

 

 

256,522

 

 

251,579

 

 

250,654

 

 

237,056

 

Other noninterest-bearing liabilities

 

 

31,457

 

 

31,459

 

 

30,815

 

 

29,432

 

 

28,981

 

Total liabilities

 

 

2,295,436

 

 

2,303,868

 

 

2,291,284

 

 

2,215,591

 

 

2,170,549

 

Total equity

 

 

343,031

 

 

340,950

 

 

337,335

 

 

334,031

 

 

330,320

 

Total liabilities and equity

 

$

2,638,467

 

$

2,644,818

 

$

2,628,619

 

$

2,549,622

 

$

2,500,869

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized Yield Trend - Quarters Ended

 

 

    

   March 31, 2018    

    

December 31, 2017

    

September 30, 2017

    

    June 30, 2017     

    

   March 31, 2017    

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

 

 
4.13

%  

 
3.94

%  

 
3.95

%  

 
3.82

%  

 
3.78

%

Investment securities (2)

 

 
2.75

%  

 
2.71

%  

 
2.70

%  

 
2.69

%  

 
2.65

%

Other interest-earning assets

 

 
2.97

%  

 
1.60

%  

 
1.14

%  

 
1.58

%  

 
1.52

%

Total interest-earning assets

 

 
3.99

%  

 
3.76

%  

 
3.73

%  

 
3.64

%  

 
3.62

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

 
0.17

%  

 
0.18

%  

 
0.19

%  

 
0.17

%  

 
0.19

%

NOW accounts

 

 
0.06

%  

 
0.06

%  

 
0.06

%  

 
0.06

%  

 
0.06

%

Money market accounts

 

 
0.78

%  

 
0.71

%  

 
0.59

%  

 
0.50

%  

 
0.49

%

Certificates of deposit

 

 
1.40

%  

 
1.23

%  

 
1.18

%  

 
1.17

%  

 
1.17

%

Brokered deposit

 

 
1.36

%  

 
1.28

%  

 
1.17

%  

 
1.08

%  

 
0.98

%

Total interest-bearing deposits

 

 
0.82

%  

 
0.72

%  

 
0.65

%  

 
0.61

%  

 
0.61

%

FHLB advances

 

 
1.66

%  

 
1.74

%  

 
1.84

%  

 
1.78

%  

 
1.79

%

Total interest-bearing liabilities

 

 
0.92

%  

 
0.86

%  

 
0.82

%  

 
0.77

%  

 
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

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

Performance Ratios (annualized):

    

2018

 

2017

 

2017

 

2017

 

2017

 

 

 

   

                     

     

   

                     

     

   

                     

     

   

                     

     

   

                     

 

Return on average assets (ROAA)

 

 

0.34

%  

 

0.24

%  

 

0.43

%  

 

0.50

%  

 

0.44

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average equity (ROAE)

 

 

2.63

%  

 

1.87

%  

 

3.37

%  

 

3.85

%  

 

3.31

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (1)

 

 

87.62

%  

 

88.34

%  

 

83.83

%  

 

82.60

%  

 

84.41

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) This non-GAAP measure represents noninterest expense divided by the sum of net interest income and noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At or for the Quarters Ended

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

Asset Quality

    

2018

 

2017

 

2017

 

2017

 

2017

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

                     

     

   

                     

     

   

                     

     

   

                     

     

   

                     

 

Total nonperforming assets

 

$

17,171

 

$

18,617

 

$

20,627

 

$

22,522

 

$

23,471

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

 

0.63

%  

 

0.69

%  

 

0.78

%  

 

0.86

%  

 

0.91

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses to total loans

 

 

0.84

%  

 

0.84

%  

 

0.84

%  

 

0.82

%  

 

0.82

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge offs

 

$

434

 

$

204

 

$

169

 

$

173

 

$

349

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized net charge offs/average loans

 

 

0.08

%  

 

0.04

%  

 

0.03

%  

 

0.03

%  

 

0.07

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses to nonperforming loans

 

 

115.51

%  

 

103.55

%  

 

91.47

%  

 

80.04

%  

 

78.17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

Capital and Share Related

    

2018

 

2017

 

2017

 

2017

 

2017

 

 

 

   

                     

     

   

                     

     

   

                     

     

   

                     

     

   

                     

 

Common stock outstanding

 

 

32,622,695

 

 

32,647,395

 

 

32,662,295

 

 

32,120,880

 

 

32,120,880

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

10.57

 

$

10.52

 

$

10.43

 

$

10.48

 

$

10.36

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible book value per share (1)

 

$

10.15

 

$

10.11

 

$

10.01

 

$

10.06

 

$

9.94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity / tangible assets (2)

 

 

12.17

%  

 

12.35

%  

 

12.36

%  

 

12.34

%  

 

12.50

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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.